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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): JUNE 4, 1996 (May 28, 1996)
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CO-COUNSEL, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 1-12422 76-0248179
- ---------------------------- ----------- ------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Three Riverway, Suite 1140, Houston, Texas 77056
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (713) 961-5552
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Item 5. Other Events.
On May 28, 1996, Co-Counsel, Inc., a Texas corporation (the "Company"),
entered into an Agreement and Plan of Merger (the "Merger Agreement") with
Olsten Corporation, a Delaware corporation ("Olsten") and Lawyers Acquisition
Corp., a Texas corporation and wholly-owned subsidiary of Olsten ("Merger Sub").
Pursuant to the Merger Agreement, Merger Sub will be merged with and into the
Company (the "Merger"), and the Company will become a wholly-owned subsidiary of
Olsten.
Consummation of the Merger is subject to the satisfaction of certain
conditions, including approval of the Company's shareholders, registration under
the Securities Act of 1933 of the shares of Class B Common Stock of Olsten, par
value $.10 per share, to be issued in the Merger ("Class B Stock") and the
shares of Common Stock of Olsten, par value $.10 per share, issuable upon
conversion of the Class B Stock ("Olsten Common Stock"), listing of the shares
of the Olsten Common Stock with the New York Stock Exchange, and other customary
conditions to closing. It is expected that the consummation of the Merger will
occur as soon as practicable after the satisfaction of all conditions to the
consummation.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit
Number Identification of Exhibit
- ------- -------------------------
99.1 Agreement and Plan of Merger dated May 28, 1996, by and among
Olsten Corporation, Lawyers Acquisition Corp. and Co-Counsel,
Inc.
99.2 Voting Agreements between Olsten Corporation and certain
shareholders of Co-Counsel, Inc.
99.3 Press Release.
-2-
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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.
CO-COUNSEL, INC.
Dated: June 4, 1996 By: /s/ JOSEPH G. McDevitt
----------------------------
Joseph G. McDevitt
Vice President - Finance
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EXHIBIT INDEX
Exhibit
Number Description
99.1 Agreement and Plan of Merger dated
May 28, 1996, by and among Olsten
Corporation, Lawyers Acquisition Corp.
and Co-Counsel, Inc.
99.2 Voting Agreements between Olsten
Corporation and certain shareholders
of Co-Counsel, Inc.
99.3 Press Release.
<PAGE> 1
EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
DATED MAY 28, 1996
BY AND AMONG
OLSTEN CORPORATION,
LAWYERS ACQUISITION CORP.
AND
CO-COUNSEL, INC.
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TABLE OF CONTENTS
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ARTICLE I
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3 Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
EFFECT OF THE MERGER ON THE
CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.1 Effect on Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Conversion Number for Co-Counsel Common Stock; Capital Stock of Merger Sub . . . . . . . . 3
(b) Cancellation of Treasury Stock and Other Co-Counsel Common Stock . . . . . . . . . . . . . 4
(c) Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.2 Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(a) Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) Distributions with Respect to Unexchanged Shares . . . . . . . . . . . . . . . . . . . . . 7
(d) No Further Ownership Rights in Co-Counsel Common Stock . . . . . . . . . . . . . . . . . . 7
(e) No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(f) Termination of Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(g) No Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(h) Investment of Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(i) Co-Counsel Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF OLSTEN AND . . . . . . . . . . . . . . . . . . . . . . . . 9
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Section 3.1 Organization, Standing and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.2 Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.3 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.4 SEC Documents; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.5 Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.6 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.9 Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.10 Operation of Merger Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.11 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CO-COUNSEL . . . . . . . . . . . . . . . . . 14
Section 4.1 Organization, Standing and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.2 Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.3 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.4 SEC Documents; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.5 Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.6 No Undisclosed Material Liabilities;
Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.9 Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.10 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 4.11 Permits; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 4.12 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4.13 Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4.14 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4.15 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.16 Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.17 Transaction Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.18 Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.19 Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.20 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.21 Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.22 Relationships with Clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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Section 4.23 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE V
COVENANTS OF OLSTEN AND CO-COUNSEL
PENDING THE MERGER . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.1 Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.2 Governing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.3 Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.4 Dividends; Changes in Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.5 Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.6 No Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.7 No Dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.8 Indebtedness; Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.9 Advice of Changes; Governmental Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.10 Employee Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.11 No Dissolution, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.12 No Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.13 Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.14 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VI
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.1 Preparation of S-4 and Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.2 Letters of Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.3 Accounting Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.4 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.5 Meeting of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.6 Legal Conditions to Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.7 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.8 Stock Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.9 Stock Options; Co-Counsel Warrants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.10 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 6.11 Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 6.12 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 6.13 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 6.14 Additional Agreements; Reasonable Efforts. . . . . . . . . . . . . . . . . . . . . . . . . . 36
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ARTICLE VII
CONDITIONS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . 38
Section 7.1 Conditions to Obligations of Each Party
to Effect the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(a) Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(b) NYSE Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(c) Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(d) S-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(e) No Injunction or Restraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 7.2 Additional Conditions to Obligations of
Olsten and Merger Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(b) Agreements and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(c) No Pending Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(d) Affiliate Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(e) Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(f) Appraisal Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(g) Opinion of Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.3 Additional Conditions to Obligation of Co-Counsel . . . . . . . . . . . . . . . . . . . . . . . 40
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(b) Agreements and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(c) Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(d) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . 41
Section 8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.4 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE IX
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.1 Non-Survival of Representations, Warranties,
Covenants and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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Section 9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 9.3 Interpretation; Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 9.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 9.5 Entire Agreement; No Third Party Beneficiaries;
Rights of Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 9.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.7 No Remedy in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.8 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.9 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.10 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.11 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
EXHIBITS
Exhibit I -- Plan of Merger
Exhibit II -- Articles of Merger
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated May 28, 1996 (the "Agreement"), by
and among Olsten Corporation, a Delaware corporation ("Acquiror"), Lawyers
Acquisition Corp., a Texas corporation that is a direct wholly-owned subsidiary
of Olsten ("Merger Sub") and Co-Counsel, Inc., a Texas corporation
("Co-Counsel").
WHEREAS, the Boards of Directors of Olsten, Merger Sub and Co-Counsel
have each determined that it is in the best interests of their respective
shareholders for Merger Sub to merge with and into Co-Counsel upon the terms
and subject to the conditions set forth herein (the "Merger"), and have adopted
the Plan of Merger in the form attached hereto as Exhibit I (the "Plan of
Merger");
WHEREAS, for accounting purposes, it is intended that the Merger shall
be accounted for as a "pooling of interests";
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended;
WHEREAS, Olsten, Merger Sub and Co-Counsel desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, subject to the terms and conditions set forth herein, Olsten, Merger
Sub and Co- Counsel hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.1 Effective Time of the Merger. Subject to the
provisions of this Agreement, Articles of Merger in the form attached hereto as
Exhibit II (the "Articles of Merger") shall be duly prepared, executed and
acknowledged by Co-Counsel and Merger Sub and thereafter delivered to the
Secretary of State of the State of Texas, for
<PAGE> 8
filing as provided in the Texas Business Corporation Act (the "TBCA"), as soon
as practicable on or after the Closing Date (as defined in Section 1.2). The
Merger shall become effective upon the issuance of a certificate of merger by
the Secretary of State of the State of Texas pursuant to the TBCA (the
"Effective Time").
Section 1.2 Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m., New York City time, on a date to be specified by
the parties, which shall be no later than the second Business Day (as defined
below) after the latest to occur of the conditions set forth in Article VII
each having been fulfilled or having been waived in accordance with this
Agreement (the "Closing Date"), at the offices of Gordon Altman Butowsky
Weitzen Shalov & Wein, 114 West 47th Street, New York, New York 10036, unless
another date or place is agreed to in writing by the parties hereto. For
purposes of this Agreement, "Business Day" means any day other than: (i) a
Saturday or Sunday; and (ii) a day on which banks in the State of New York or
Texas are required or permitted to be closed.
Section 1.3 Effects of the Merger. (a) At the Effective Time:
(i) the separate existence of Merger Sub shall cease and Merger Sub shall be
merged with and into Co-Counsel and Co-Counsel shall be the surviving
corporation (Merger Sub and Co-Counsel are sometimes referred to herein as the
"Constituent Corporations" and Co-Counsel is sometimes referred to herein as
the "Surviving Corporation"); (ii) all of the outstanding capital stock of
Co-Counsel shall be converted as provided in Section 2.1; (iii) the Articles of
Incorporation of Co-Counsel as in effect immediately prior to the Effective
Time shall be amended as of the Effective Time by operation of this Agreement
and by virtue of the Merger, without any further action by the shareholders or
directors of the Surviving Corporation, to read in its entirety as the Articles
of Incorporation of Merger Sub, except that Article I of the Articles of
Incorporation of the Surviving Corporation shall be amended at the Effective
Time, to change the name of the Surviving Corporation to Co-Counsel, Inc. and
(iv) the bylaws of Merger Sub, as in effect immediately prior to the Effective
Time, shall be the bylaws of the Surviving Corporation, until duly amended in
accordance with the terms thereof, of the articles of incorporation of the
Surviving Corporation and of the TBCA. At Olsten's election, any direct
wholly-owned Subsidiary (as defined in Section 2.1(b) hereof) of Olsten may be
substituted for Merger Sub as a constituent corporation in the Merger, PROVIDED
that the parties shall have executed an appropriate amendment to this Agreement
in form and substance reasonably satisfactory to Olsten and Co-Counsel in order
to reflect such substitution.
(b) The directors and officers of Merger Sub at the
Effective Time shall, from and after the Effective Time, be the directors and
officers of the Surviving
2
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Corporation until the successors of all such persons shall have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's articles of
incorporation and by-laws.
(c) At and after the Effective Time, the corporate
existence of Co-Counsel, with all its rights, privileges, powers and franchises
of a public as well as of a private nature, shall continue unaffected and
unimpaired by the Merger. The Merger shall have the effects specified in the
TBCA.
ARTICLE II
EFFECT OF THE MERGER ON THE
CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
Section 2.1 Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of Co-Counsel's Common Stock, par value $.01 per share ("Co-Counsel
Common Stock"), or any capital stock of Merger Sub:
(a) Conversion Number for Co-Counsel Common Stock;
Capital Stock of Merger Sub. (i) Subject to Section 2.2(e), each share of
Co-Counsel Common Stock which shall be issued and outstanding immediately prior
to the Effective Time (other than any shares of Co-Counsel Common Stock to be
canceled pursuant to Section 2.1(b) and any Dissenting Shares (as defined in
Section 2.1(c)) shall be converted into the right to receive that number (the
"Conversion Number") of Olsten's Class B Common Stock, par value $.10 per share
("Class B Stock"), computed in accordance with Section 2.1(a)(ii). As of the
Effective Time, all shares of Co-Counsel Common Stock, and each holder of a
certificate representing such shares of Co-Counsel Common Stock, shall cease to
have any rights with respect thereto, except the right to receive the shares of
Class B Stock (and cash in lieu of fractional shares of Class B Stock as
contemplated by Section 2.2(e)) to be issued or paid in consideration therefor
upon surrender of such certificate in accordance with Section 2.2, without
interest. If, between the date hereof and the Effective Time, the outstanding
shares of Class B Stock and/or Olsten Common Stock, par value $.10 per share
("Olsten Common Stock"), shall be changed into a different number of shares by
reason of any reclassification, recapitalization, split-up, combination,
exchange of shares or readjustment, or a stock dividend thereon shall be
distributed as of a date prior to the Effective Time, or declared with a record
date prior
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to the Effective Time and a distribution date or comparable effective date
after the Effective Time, the Conversion Number set forth above shall be
appropriately adjusted to reflect such change; provided, however, that the
foregoing shall not apply to any issuance by Olsten of Olsten Common Stock upon
conversion of Olsten's 4 7/8% Convertible Subordinated Debentures due 2003 as a
result of the redemption thereof.
(ii) The Conversion Number shall be equal to the quotient
obtained by dividing (x) 420,000 by (y) the sum of (A) the number of shares of
Co-Counsel Common Stock outstanding immediately prior to the Effective Time
(including shares of Co-Counsel Common Stock issued to the public as part of
the Units referred to in Section 4.2(b), but excluding shares of Co-Counsel
Common Stock issuable as part of any Units acquired upon exercise of any
Representatives' Warrants (as defined below)) and (B) the number of shares of
Co-Counsel Common Stock issuable upon exercise in full of all options and other
rights to purchase or otherwise acquire Co-Counsel Common Stock (other than the
Co-Counsel Warrants and the Representatives' Warrants, both as defined in
Section 4.2(b)), whether or not vested, which are outstanding immediately prior
to the Effective Time. The number of shares of Co-Counsel Common Stock that
are issuable as described in clause (B) above shall exclude shares that
presently are reserved for issuance upon exercise of options that will be
cancelled or terminated in accordance with the applicable option plan and any
option agreement relating to such option, prior to the Effective Time.
(iii) Each share of the capital stock of Merger Sub which
shall be issued and outstanding immediately prior to the Effective Time shall
be converted into and become one fully paid and nonassessable share of common
stock, par value $.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Other Co-Counsel
Common Stock. All shares of Co-Counsel Common Stock and all other shares of
capital stock of Co-Counsel that are owned by Co-Counsel as treasury stock and
any shares of Co-Counsel Common Stock or other shares of capital stock of
Co-Counsel owned by Co-Counsel, Olsten or any wholly-owned Subsidiary of
Olsten, shall be canceled and retired and shall cease to exist and no stock of
Olsten or of Merger Sub or other consideration shall be delivered in exchange
therefor.
As used in this Agreement, the word "Subsidiary" of any party
means any corporation or other organization, whether incorporated or
unincorporated, of which (i) such party or any other Subsidiary of such party
is a general partner (excluding partnerships, the general partnership interests
of which held by such party or any
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Subsidiary of such party do not have a majority of the voting interests in such
partnership) or (ii) at least a majority of the securities or other interests
having by their terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such party or by any one or more of its Subsidiaries, or by such party and
one or more of its Subsidiaries.
(c) Dissenting Shares. (i) Notwithstanding any
provision of this Agreement to the contrary, any shares of Co-Counsel Common
Stock held by a holder who has demanded and perfected his demand for appraisal
of such Co-Counsel Common Stock in accordance with the TBCA and as of the
Effective Time has not effectively withdrawn or lost such right to appraisal
("Dissenting Shares"), shall not be converted into or represent the right to
receive shares of Class B Stock (or cash in lieu of fractional shares of Class
B Stock as contemplated by Section 2.2(e)) for such shares of Co-Counsel
Common Stock pursuant to Section 2.1(a), but the holder thereof shall only be
entitled to such rights as are granted by the TBCA.
(ii) Notwithstanding the provisions of Section
2.1(c)(i), if any holder of shares of Co-Counsel Common Stock who demands
appraisal of such Co-Counsel Common Stock under the TBCA shall effectively
withdraw or lose (through failure to perfect or otherwise) his right to
appraisal, then, as of the Effective Time or the occurrence of such event,
whichever last occurs, such holder's shares of Co-Counsel Common Stock shall
automatically be converted into and represent only the right to receive the
shares of Class B Stock (and cash in lieu of fractional shares of Class B Stock
as contemplated by Section 2.2(e)) to be issued or paid in consideration
therefor for such Co-Counsel Common Stock as provided in Section 2.1(a),
without interest thereon, upon surrender of the certificate or certificates
representing such shares of Co-Counsel Common Stock in accordance with Section
2.2.
Co-Counsel shall give Olsten (A) prompt notice of any written
demands for appraisal of any shares of Co-Counsel Common Stock, withdrawals of
such demands, and any other instruments served pursuant to the TBCA and
received by Co-Counsel and (B) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under the TBCA. Co-Counsel
shall not, except with the prior written consent of Olsten, voluntarily make
any payment with respect to any demands for appraisal of any shares of
Co-Counsel Common Stock or offer to settle or settle any such demands.
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Section 2.2 Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, Olsten
shall deposit, or shall cause to be deposited, with Chemical Mellon Shareholder
Services, L.L.C., or such other bank or trust company which shall be acceptable
to Olsten (the "Exchange Agent"), for the benefit of holders of shares of
Co-Counsel Common Stock, for exchange in accordance with this Section 2.2,
through the Exchange Agent, certificates representing the shares of the Class B
Stock (such shares of Class B Stock, together with (i) any dividends or
distributions with respect thereto with a record date after the Effective Time
of the Merger and (ii) any cash delivered to the Exchange Agent to be delivered
in lieu of fractional shares as contemplated by Section 2.2(e), being
hereinafter referred to as the "Exchange Fund") issuable pursuant to Section
2.1 in exchange for outstanding shares of Co-Counsel Common Stock. The
Exchange Agent shall deliver, pursuant to irrevocable instructions, the shares
of Class B Stock contemplated to be issued pursuant to Section 2.1 out of the
Exchange Fund. The Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedures. As soon as reasonably
practicable after the Effective Time, the Exchange Agent shall mail to each
holder of record of a certificate or certificates which immediately prior to
the Effective Time represented outstanding shares of Co-Counsel Common Stock
(the "Certificates") whose shares were converted into the right to receive
shares of Class B Stock pursuant to Section 2.1: (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the Certificates to
the Exchange Agent and shall be in such form and have such other provisions as
Olsten and Co-Counsel may reasonably specify); and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing shares of Class B Stock. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Olsten, together with such letter of transmittal, duly executed,
and such other documents as may be reasonably required by the Exchange Agent,
the holder of such Certificate shall be entitled to receive in exchange
therefor certificates representing that number of whole shares of Class B Stock
(and cash in lieu of fractional shares) which such holder has the right to
receive pursuant to this Article II, and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of Co-Counsel
Common Stock which is not registered in the transfer records of Co-Counsel,
certificates representing the proper number of shares of Class B Stock may be
issued to a transferee if the Certificate representing such Co-Counsel Common
Stock is presented to the Exchange Agent, accompanied by all documents required
to evidence and effect such transfer and by evidence that any
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applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.2, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender one or more certificates representing shares of Class B Stock and
cash in lieu of any fractional shares of Class B Stock as contemplated by this
Section 2.2. The Exchange Agent shall not be entitled to vote or exercise any
rights of ownership with respect to the Class B Stock held by it from time to
time hereunder.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to Class B Stock with a record
date after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Class B Stock represented thereby and
no cash payment in lieu of fractional shares shall be paid to any such holder
pursuant to Section 2.2(e) until the surrender of such Certificate in
accordance with this Section 2.2. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to the holder
of the Certificates representing whole shares of Class B Stock issued in
exchange therefor, without interest: (i) at the time of such surrender, the
amount of any cash payable in lieu of a fractional share of Class B Stock to
which such holder is entitled pursuant to Section 2.2(e) and the amount of
dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of Class B Stock; and (ii)
at the appropriate payment date, the amount of dividends or other distributions
with a record date after the Effective Time but prior to such surrender and
with a payment date subsequent to such surrender payable with respect to such
whole shares of Class B Stock.
(d) No Further Ownership Rights in Co-Counsel Common
Stock. All shares of the Class B Stock issued upon the surrender for exchange
of Certificates in accordance with the terms hereof (including any cash paid
pursuant to Section 2.2(c) or 2.2(e)) shall be deemed to have been issued (and
paid) in full satisfaction of all rights pertaining to such shares of
Co-Counsel Common Stock, subject, however, to the Surviving Corporation's
obligation to pay any dividends or make any other distributions with a record
date prior to the Effective Time which may have been declared or made by
Co-Counsel on such shares of Co-Counsel Common Stock in accordance with the
terms of this Agreement or prior to the date hereof and which remain unpaid at
the Effective Time, and there shall be no further registration of transfers on
the stock transfer books of the Surviving Corporation of the shares of
Co-Counsel Common Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to
the Surviving Corporation or the Exchange Agent for any reason, they shall be
canceled and exchanged as provided in this Article II.
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(e) No Fractional Shares. No certificate or scrip
representing fractional shares of Class B Stock shall be issued upon the
surrender for exchange of Certificates, and such fractional share interests
will not entitle the owner thereof to vote or to any rights of a shareholder of
Olsten. Notwithstanding any other provision of this Agreement, each holder of
shares of Co-Counsel Common Stock exchanged pursuant to the Merger who would
otherwise have been entitled to receive a fraction of a share of Class B Stock
(after taking into account all Certificates delivered by such holder) shall
receive, in lieu thereof, cash (without interest) in an amount equal to such
fractional part of a share of Class B Stock multiplied by the Average Price.
For purposes of this Agreement, "Average Price" means the average closing price
of Olsten Common Stock on the New York Stock Exchange (the "NYSE") during the
ten trading days immediately prior to the Effective Time.
(f) Termination of Exchange Fund. Any portion of the
Exchange Fund and any cash in lieu of fractional shares of Class B Stock made
available to the Exchange Agent which remains undistributed for 180 days after
the Effective Time shall be delivered to Olsten, upon demand, and any holders
of the Certificates who have not theretofore complied with this Article II
shall thereafter look only to Olsten for delivery of certificates representing
Class B Stock and any cash in lieu of fractional shares of Class B Stock and
any dividends or distributions with respect to Class B Stock.
(g) No Liability. Neither Olsten, Merger Sub, Co-Counsel
nor the Exchange Agent shall be liable to any holder of shares of Co-Counsel
Common Stock or Class B Stock, as the case may be, for such shares (or
dividends or distributions with respect thereto) or cash from the Exchange Fund
(or by Olsten after the Exchange Fund has terminated) delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
At such time as any amounts remaining unclaimed by holders of any such shares
would otherwise escheat to or become property of any Governmental Entity (as
defined in Section 3.3(c)), such amounts shall, to the extent permitted by
applicable law, become the property of Olsten free and clear of any claims or
interest of any such holders or their successors, assigns or personal
representatives previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent
shall invest any cash included in the Exchange Fund, as directed by Olsten, on
a daily basis. Any interest and other income resulting from such investments
shall be paid to Olsten.
(i) Co-Counsel Affiliates. Certificates surrendered for
exchange by any Co-Counsel Affiliate (as defined in Section 4.22) shall not be
exchanged for certificates
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representing Class B Stock until Olsten has received a written agreement from
such Co-Counsel Affiliate as provided in Section 6.7.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF OLSTEN AND MERGER SUB
Except as set forth in this Agreement or Olsten's disclosure schedule
previously delivered to Co-Counsel (the "Olsten Disclosure Schedule"), Olsten
and Merger Sub hereby represent and warrant to Co-Counsel as follows:
Section 3.1 Organization, Standing and Power. Each of Olsten and
Merger Sub: (i) is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation; (ii) has all
requisite corporate power and corporate authority to own, lease and operate its
properties and to carry on its business as now being conducted and (iii) is
duly qualified or licensed to do business and in good standing in each
jurisdiction in which the business it is conducting, or the operation,
ownership or leasing of its properties, makes such qualification or licensing
necessary, other than in such jurisdictions where the failure so to be in good
standing, qualified or licensed does not, individually or in the aggregate,
have a Material Adverse Effect (as defined in Section 9.3). Each of Olsten and
Merger Sub has heretofore made available to Co-Counsel complete and correct
copies of its presently effective certificate of incorporation and by-laws.
Section 3.2 Capital Structure. (a) As of the date hereof, the
authorized capital stock of Olsten consists of 110,000,000 shares of Olsten
Common Stock, 50,000,000 shares of Class B Stock and 250,000 shares of
Preferred Stock, par value $.10 per share ("Olsten Preferred Stock"). As of
May 15, 1996, 50,661,229 shares of Olsten Common Stock and 14,055,519 shares of
Class B Stock were issued and outstanding and no shares of Olsten Preferred
Stock were issued or outstanding.
(b) As of the date hereof, the authorized capital stock of
Merger Sub consists of 1,000 shares of common stock, par value $.01 per share,
all of which are validly issued, fully paid and nonassessable and are owned by
Olsten.
(c) All outstanding shares of Olsten Common Stock and Class B
Stock are, and all shares of Class B Stock which are to be issued pursuant to
the Merger (and, after
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the Effective Time, upon the exercise of Co-Counsel Warrants and Co-Counsel
Stock Options (as defined in Section 6.9)) will be, when issued in accordance
with the respective terms thereof, validly issued, fully paid and nonassessable
and not subject to preemptive rights. Each share of Class B Stock to be issued
in the Merger will be immediately convertible, at no expense to the
shareholder, into one share of Olsten Common Stock and such shares of Olsten
Common Stock have been reserved for issuance upon such conversion. Except as
set forth in this Section 3.2 and in the Olsten SEC Documents (as defined in
Section 3.4), there are outstanding: (i) no bonds, debentures, notes or other
indebtedness having the right to vote (or convertible into securities having
the right to vote) on any matters on which shareholders may vote ("Voting
Debt"), shares of capital stock or other voting securities of Olsten; (ii) no
securities of Olsten or any of its Subsidiaries convertible into or
exchangeable for shares of capital stock, Voting Debt or other voting
securities of Olsten or any of its Subsidiaries; and (iii) no options,
warrants, calls, rights (including preemptive rights), commitments or
agreements to which Olsten or any of its Subsidiaries is a party or by which it
is bound obligating Olsten or any of its Subsidiaries to issue, deliver, sell,
purchase, redeem or acquire or cause to be issued, delivered, sold, purchased,
redeemed or acquired, additional shares of capital stock or any Voting Debt or
other voting securities of Olsten or any of its Subsidiaries or obligating
Olsten or any of its Subsidiaries to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement. There are not, as of
the date hereof, and there will not be at the Effective Time, any shareholder
agreements, voting trusts or other agreements or understandings to which Olsten
is a party or by which it is bound relating to the voting of any shares of the
capital stock of Olsten.
Section 3.3 Authority Relative to this Agreement. (a) Olsten
and Merger Sub have all necessary corporate power and corporate authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Olsten
and Merger Sub and the consummation by Olsten and Merger Sub of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Olsten and Merger Sub. The Plan of Merger has
been duly adopted by the Board of Directors of Merger Sub. This Agreement has
been duly executed and delivered by Olsten and Merger Sub and assuming this
Agreement constitutes the valid and binding agreement of Co-Counsel,
constitutes the legal, valid and binding obligation of Olsten and Merger Sub,
enforceable against Olsten and Merger Sub in accordance with its terms.
(b) The execution and delivery of this Agreement by
Olsten and Merger Sub do not, and the consummation of the transactions
contemplated hereby by
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Olsten and Merger Sub will not: (i) conflict with, or result in any violation
or breach of, any provision of the currently effective certificate of
incorporation or by-laws of Olsten or Merger Sub or (ii) assuming the consents,
approvals, authorizations or permits and filings or notifications referred to
in Section 3.3(c) are duly and timely obtained or made, result in any violation
or breach of, or constitute (with or without notice or lapse of time, or both)
a default (or give rise to any right of termination, cancellation or
acceleration or lien or other charge or encumbrance) under any of the terms,
conditions, or provisions (any of the foregoing a "Violation") of any loan or
credit agreement, note, mortgage, indenture, lease, or other agreement,
obligation, instrument, concession, franchise, license, permit, judgment,
order, decree, statute, law, ordinance, rule or regulation to which Olsten or
Merger Sub or their assets may be bound, except for such Violations that,
individually or in the aggregate, do not have a Material Adverse Effect.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, or permit from any court,
administrative agency, commission or other governmental authority or
instrumentality, domestic or foreign (a "Governmental Entity"), is required by
or with respect to Olsten or any of its Subsidiaries to validly execute and
deliver this Agreement on behalf of Olsten or any of its Subsidiaries or to
effect the Merger, except for: (i) (A) the filing with the Securities and
Exchange Commission ("SEC") and the effectiveness of a registration statement
on Form S-4 under the Securities Act of 1933, as amended (the "Securities
Act"), in connection with the issuance of the Class B Stock pursuant to this
Agreement and the Olsten Common Stock issuable upon conversion of such Class B
Stock, as amended or supplemented (such registration statement, as it may be
amended or supplemented from time to time, the "S-4") and (B) the filing with
the SEC of such reports under Section 13(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and such other compliance with the
Securities Act, the Exchange Act and the rules and regulations thereunder, as
may be required in connection with this Agreement and the transactions
contemplated hereby, and the obtaining from the SEC of such orders as may be so
required; (ii) the filing of the Articles of Merger with the Secretary of State
of Texas; (iii) such filings and approvals as may be required by applicable
state securities or "blue sky" laws and (iv) filings with, and approval of, the
NYSE for the listing of the shares of Olsten Common Stock issuable upon
conversion of the Class B Stock to be issued pursuant to this Agreement, except
where the failure to obtain such consents, approvals, order, authorizations or
permits or to make such filings does not have a Material Adverse Effect.
Section 3.4 SEC Documents; Financial Statements. (a) The Olsten
Disclosure Schedule sets forth a true and complete list of each report,
schedule, registration
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statement and definitive proxy statement filed by Olsten with the SEC since
December 31, 1993 (collectively, the "Olsten SEC Documents"). As of their
respective dates: (i) the Olsten SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as
the case may be, and the rules and regulations of the SEC thereunder applicable
to such Olsten SEC Documents and (ii) none of the Olsten SEC Documents
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) The financial statements of Olsten included in the
Olsten SEC Documents (including the audited financial statements of Olsten and
its consolidated Subsidiaries for the fiscal year ended December 31, 1995,
included in Olsten's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995) complied as to form in all material respects with the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles ("GAAP")
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited statements, as
permitted by Rule 10-01 of Regulation S-X of the SEC) and fairly present in
accordance with applicable requirements of GAAP (subject, in the case of the
unaudited statements, to normal, recurring audit adjustments) the consolidated
financial position of Olsten and its consolidated Subsidiaries as at their
respective dates and the consolidated results of operations and the
consolidated cash flows of Olsten and its consolidated Subsidiaries for the
periods then ended.
Section 3.5 Information Supplied. None of the information
supplied or to be supplied by Olsten for inclusion or incorporation by
reference in (i) the S-4 will, at the time the S-4 is filed with the SEC and at
the time it becomes effective under the Securities Act or at the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and (ii) the proxy statement in definitive form relating
to the meeting of Co-Counsel's shareholders to be held in connection with the
Merger, as amended or supplemented (such definitive proxy statement, as it may
be amended or supplemented from time to time, the "Proxy Statement") will, at
the date such information is supplied to shareholders of Co-Counsel, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The S-4, insofar as it relates to Olsten or Merger Sub or other
information supplied by Olsten for inclusion therein, will comply as to form in
all
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material respects with the provisions of the Securities Act and the rules and
regulations thereunder.
Section 3.6 Absence of Certain Changes or Events. Olsten does
not have any material indebtedness, obligations or liabilities of any kind
(whether accrued, absolute, contingent or otherwise, and whether due or to
become due or asserted or unasserted), and, to the best knowledge of Olsten,
there is no basis for the assertion of any claim or liability of any nature
against Olsten, which is not fully reflected in, reserved against or otherwise
described in the financial statements included in the Olsten SEC Documents,
except for such indebtedness, obligations or liabilities as would not have a
Material Adverse Effect. Except as disclosed in the Olsten SEC Documents or as
disclosed in writing by Olsten to Co-Counsel prior to the date hereof, since
December 31, 1995, the business of Olsten has been conducted only in the
ordinary and usual course and there has not been any material adverse change in
its business, properties, operations or financial condition and no event has
occurred and no fact or set of circumstances has arisen which has resulted in
or could reasonably be expected to result in a Material Adverse Effect.
Section 3.7 Litigation. There are (i) no actions, proceedings or
claims pending, and (ii) to the knowledge of Olsten, no investigations pending,
or actions, proceedings, claims or investigations threatened, in any case,
against Olsten or any of its Subsidiaries, before any Governmental Entity
which, if adversely decided, individually or in the aggregate would have a
Material Adverse Effect. Neither Olsten nor any of its Subsidiaries nor any of
their property is subject to any order, judgment, injunction, or decree which,
individually or in the aggregate, has a Material Adverse Effect.
Section 3.8 Taxes. Olsten has filed all tax returns required to
be filed by it (including estimated tax returns), has properly determined the
taxes due on such returns and has paid all taxes required to be paid as shown
on such returns, except in each case, where the failure to do so would not have
a Material Adverse Effect.
Section 3.9 Accounting Matters. To the knowledge of Olsten,
neither Olsten nor any of its affiliates has, through the date of this
Agreement, taken or agreed to take any action that (without giving effect to
any action taken or agreed to be taken by Co-Counsel or any of its affiliates)
would prevent Olsten from accounting for the business combination to be
effected by the Merger as a pooling-of-interests. As used in this Agreement,
the term "affiliate" has the meaning ascribed to it in Regulation 12b-2
promulgated under the Exchange Act.
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Section 3.10 Operation of Merger Sub. Merger Sub is a direct,
wholly-owned subsidiary of Olsten, was formed solely for the purpose of
engaging in the transactions contemplated hereby, has engaged in no other
business activities and has conducted its operations only as contemplated
hereby.
Section 3.11 Disclosure. No representation or warranty by
Olsten in this Agreement and no statement contained in any document or other
writing furnished or to be furnished to Co-Counsel or any of its
representatives pursuant to the provisions hereof contains or will contain any
untrue statement of material fact or omits or will omit to state any material
fact necessary in order to make the statements made herein or therein not
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CO-COUNSEL
Except as set forth in this Agreement or Co-Counsel's disclosure
schedule previously delivered to Olsten (the "Co-Counsel Disclosure Schedule"),
Co-Counsel hereby represents and warrants to Olsten and to Merger Sub as
follows:
Section 4.1 Organization, Standing and Power. Co-Counsel (i) is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Texas; (ii) has all requisite corporate power and
corporate authority to own, lease and operate its properties and to carry on
its business as now being conducted and (iii) is duly qualified or licensed to
do business and in good standing in each jurisdiction in which the business it
is conducting, or the operation, ownership or leasing of its properties, makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure so to be in good standing, qualified or licensed does not,
individually or in the aggregate, have a Material Adverse Effect. Co-Counsel
has heretofore made available to Olsten complete and correct copies of its
presently effective articles of incorporation and by-laws. Co-Counsel has no
Subsidiaries and will not have any Subsidiaries at the Effective Time.
Section 4.2 Capital Structure. (a) The authorized capital
stock of Co-Counsel consists of 20,000,000 shares of Co-Counsel Common Stock
and 5,000,000 shares of Preferred Stock, par value $.01 per share (the
"Co-Counsel Preferred Stock").
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(b) As of the date hereof, 3,741,500 shares of Co-Counsel
Common Stock were issued and outstanding and no shares of Co-Counsel Preferred
Stock were issued or outstanding. The Co-Counsel Disclosure Schedule lists all
shares of Co-Counsel Common Stock which were reserved for issuance pursuant to
Co-Counsel's Stock Option Plan For Non-Employee Directors and Co-Counsel's
Employee Stock Option Plan, respectively (collectively, the "Co-Counsel Stock
Option Plans") and (ii) no shares of Co-Counsel Common Stock were held by
Co-Counsel in its treasury. As of the date hereof, there were outstanding: (i)
1,437,500 redeemable common stock purchase warrants to purchase Co-Counsel
Common Stock at an exercise price of $3.75 per share (the "Co-Counsel
Warrants") and (ii) non-redeemable warrants to acquire 125,000 Units (as
hereinafter defined) at an exercise price of $3.90 per Unit issued to the
representatives identified in Co-Counsel's Prospectus dated November 15, 1993
(the "Representatives' Warrants"). Each "Unit" (herein so called) consists of
one share of Co-Counsel Common Stock and one Co-Counsel Warrant (collectively,
the "Units").
(c) All outstanding shares of Co-Counsel Common Stock are
and all shares of Co-Counsel Common Stock which may be issued pursuant to the
Co-Counsel Stock Option Plans, the Co-Counsel Warrants and the Representatives'
Warrants will be, when issued in accordance with the respective terms thereof,
validly issued, fully paid and nonassessable and not subject to preemptive
rights. The Co-Counsel Disclosure Schedule sets forth all options granted
pursuant to the Co-Counsel Stock Option Plans which are outstanding as of the
date hereof, the number of shares of Co-Counsel Common Stock for which such
options are exercisable, the option exercise price, and the identity of the
optionee and which of such options are incentive stock options and which are
non-qualified stock options. Except as set forth in this Section 4.2, there
are outstanding: (i) no shares of capital stock, Voting Debt or other voting
securities of Co-Counsel; (ii) no securities of Co-Counsel convertible into or
exchangeable for shares of capital stock, Voting Debt or other voting
securities of Co-Counsel and (iii) no options, warrants, calls, rights
(including preemptive rights), commitments or agreements to which Co-Counsel is
a party or by which it is bound obligating Co-Counsel to issue, deliver, sell,
purchase, redeem or acquire or cause to be issued, delivered, sold, purchased,
redeemed or acquired, additional shares of capital stock or any Voting Debt or
other voting securities of Co-Counsel or obligating Co-Counsel to grant, extend
or enter into any such option, warrant, call, right, commitment or agreement.
There are not as of the date hereof, and there will not be at the Effective
Time, any shareholder agreements, voting trusts or other agreements or
understandings to which Co-Counsel or any of its shareholders is a party or by
which it or any of its shareholders is bound relating to the voting of any
shares of the capital stock of Co-Counsel.
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Section 4.3 Authority Relative to this Agreement. (a)
Co-Counsel has all necessary corporate power and corporate authority to execute
and deliver this Agreement and, subject with respect to consummation of the
Merger, to approval of the Plan of Merger by the affirmative vote of the
holders of two-thirds of the outstanding shares of Co- Counsel Common Stock
entitled to vote thereon (the "Counsel Vote"), to consummate the transactions
contemplated hereby. The Plan of Merger has been duly adopted by the Board of
Directors of Co-Counsel. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Co-Counsel, subject, with
respect to consummation of the Merger, to approval of the Plan of Merger by the
Co-Counsel Vote. This Agreement has been duly executed and delivered by
Co-Counsel and, subject, with respect to consummation of the Merger, to
approval of the Plan of Merger by the Co-Counsel Vote, and assuming this
Agreement constitutes the valid and binding agreement of Olsten and Merger Sub,
constitutes the valid and binding obligation of Co-Counsel, enforceable
against Co-Counsel in accordance with its terms.
(b) The execution and delivery of this Agreement by
Co-Counsel do not, and the consummation of the transactions contemplated hereby
by Co-Counsel will not: (i) conflict with, or result in any violation or
breach of any provision of, the currently effective articles of incorporation
or by-laws of Co-Counsel or (ii) assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in Section
4.3(c) are duly and timely obtained or made and the approval of the Plan of
Merger by the Co-Counsel Vote has been obtained, result in any Violation of any
loan or credit agreement, note, mortgage, indenture, lease, Co-Counsel Benefit
Plan (as defined in Section 4.9) or other agreement, obligation, instrument,
concession, franchise, license, Co-Counsel Permit (as defined in Section 4.11),
judgment, order, decree, statute, law, ordinance, rule or regulation to which
Co-Counsel or its assets may be bound, except for such Violations that,
individually or in the aggregate, do not have a Material Adverse Effect.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, or permit from any Governmental
Entity, is required by or with respect to Co-Counsel to validly execute and
deliver this Agreement on behalf of Co-Counsel by Co-Counsel or to effect the
Merger, except for: (i) the filing with the SEC of (A) the Proxy Statement and
(B) such reports under Section 13(a) of the Exchange Act, and such other
compliance with the Exchange Act and the rules and regulations thereunder, as
may be required in connection with this Agreement and the transactions
contemplated hereby; (ii) the filing of the Articles of Merger with the
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Secretary of State of the State of Texas and (iii) such filings and approvals
as may be required by the applicable state securities or "blue sky" laws.
Section 4.4 SEC Documents; Financial Statements. (a) The
Co-Counsel Disclosure Schedule sets forth a true and complete list of each
report, schedule, registration statement and definitive proxy statement ever
filed by Co-Counsel with the SEC (collectively, the "Co-Counsel SEC
Documents"). As of their respective dates: (i) the Co-Counsel SEC Documents
complied in all material respects with the requirements of the Securities Act
or the Exchange Act, as the case may be, and the rules and regulations of the
SEC thereunder applicable to such Co-Counsel SEC Documents and (ii) none of the
Co-Counsel SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
(b) The financial statements of Co-Counsel included in
the Co-Counsel SEC Documents (including the audited financial statements of
Co-Counsel for the fiscal year ended December 31, 1995, included in
Co-Counsel's Annual Report on Form 10-KSB for the fiscal year ended December
31, 1995 (the "Counsel 10-K")) complied as to form in all material respects
with the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Rule 10-01 of Regulation S-X
of the SEC) and fairly present in accordance with applicable requirements of
GAAP (subject, in the case of the unaudited statements, to normal, recurring
audit adjustments) the financial position of Co-Counsel and the results of
operations and the cash flow of Co-Counsel for the periods then ended.
Section 4.5 Information Supplied. None of the information
supplied or to be supplied by Co-Counsel for inclusion or incorporation by
reference in: (i) the S-4 will, at the time the S-4 is filed with the SEC and
at the time it becomes effective under the Securities Act or at the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; and (ii) the Proxy Statement will, at the date mailed
to Co-Counsel's shareholders and at the time of the meeting of Co-Counsel's
shareholders to be held in connection with the Merger or at the Effective Time,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement, insofar
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as it relates to Co-Counsel or other information supplied by Co-Counsel for
inclusion therein, will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder, and
the S-4, insofar as it relates to Co-Counsel or other information supplied by
Co-Counsel for inclusion therein, will comply as to form in all material
respects with the provisions of the Securities Act and the rules and
regulations thereunder.
Section 4.6 No Undisclosed Material Liabilities; Absence of
Certain Changes or Events. Co-Counsel does not have any material indebtedness,
obligations or liabilities of any kind (whether accrued, absolute, contingent
or otherwise, and whether due or to become due or asserted or unasserted), and,
to the best knowledge of Co-Counsel, there is no basis for the assertion of any
claim or liability of any nature against Co-Counsel, which is not fully
reflected in, reserved against or otherwise described in the financial
statements included in the Co-Counsel SEC Documents, except for such
indebtedness, obligations or liabilities as would not have a Material Adverse
Effect. Except as disclosed in the Co-Counsel SEC Documents or as disclosed in
writing by Co-Counsel to Olsten prior to the date hereof of, since December 31,
1995, the business of Co-Counsel has been conducted only in the ordinary and
usual course and there has not been any material adverse change in its
business, properties, operations or financial condition and no event has
occurred and no fact or set of circumstances has arisen which has resulted in
or could reasonably be expected to result in a Material Adverse Effect.
Section 4.7 Litigation. There are no actions, suits,
proceedings, claims (including counterclaims in any action, suit or proceeding
in which Co-Counsel or any of its affiliates is a plaintiff) or investigations
pending or, to the knowledge of Co-Counsel, threatened against or involving
Co-Counsel or any of its present or former directors, officers, employees,
consultants, agents, or shareholders, any of its properties, assets or business
or any Co-Counsel Benefit Plan that individually or in the aggregate, has a
Material Adverse Effect. There are no actions, suits or claims or legal,
administrative or arbitrative proceedings or investigations pending or orders,
judgments, injunctions, awards or decrees of any Governmental Entity, against
or involving any of its present or former directors, officers, employees,
consultants, agents, or shareholders of Co-Counsel which, individually or in
the aggregate, have a Material Adverse Effect. The Co-Counsel Disclosure
Schedule contains true, accurate and complete information regarding the status
of all such actions, suits, proceedings, claims and investigations, including
any settlement proposal or damages estimate communicated to any party, orally
or in writing. Co-Counsel has entered into settlement agreements (the
"Settlement Agreements") with all of the defendants in the action entitled Of
Counsel Enterprises,
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Inc. vs. L.C. Wegard & Co., Inc., et al. pending in the United States District
Court for the Southern District of Texas, Houston Division (the "IPO
Litigation") and has delivered to Olsten true, correct and complete copies of
such Settlement Agreements. Other than as set forth in the Settlement
Agreements, there are no arrangements, agreements or understandings between
Co-Counsel and any of such defendants with respect to the settlement of the IPO
Litigation. The Settlement Agreements have been duly approved by Co-Counsel's
Board of Directors.
Section 4.8 Taxes. Co-Counsel has filed all tax returns required
to be filed by it (including estimated tax returns), has properly determined
the taxes due on such returns and has paid all taxes required to be paid as
shown on such returns. The most recent financial statements contained in the
Co-Counsel SEC Documents reflect an adequate reserve for all taxes payable by
Co-Counsel accrued through the date of such financial statements. All
deficiencies for any taxes which have been proposed, asserted or assessed
against Co-Counsel have been fully paid, or are fully reflected as a liability
in such financial statements, or are being contested and an adequate reserve
therefor has been established and is fully reflected in such financial
statements. There are no liens for taxes (other than for current taxes not yet
due and payable) on the assets of Co-Counsel. The federal, state and foreign
income tax returns of Co-Counsel have been examined by and settled with the
Internal Revenue Service (the "IRS") or other applicable taxing authority, or
the statute of limitations with respect to such years has expired, for all
years through 1992. There has been no waiver or extension of the statute of
limitations for the assessment of any tax for any taxable year. Co-Counsel is
not a party to or bound by any agreement providing for the allocation or
sharing of taxes. Co-Counsel has not filed a consent pursuant to or agreed to
the application of Section 341(f) of the Internal Revenue Code of 1986, as
amended (the "Code"). No deficiency for any taxes has been proposed, asserted
or assessed with respect to Co-Counsel, no audit or other examination of the
tax returns of Co-Counsel is currently in progress and no facts exist which
constitute grounds for the assessment of any additional taxes with respect to
Co-Counsel or any of its affiliates. Co-Counsel has disclosed on its federal
income tax returns all positions taken therein that could give rise to a
substantial understatement of federal income tax within the meaning of Section
6662 of the Code. All taxes which are required by the laws of the United
States, any state or political subdivision thereof or any foreign country to be
withheld or collected by Co-Counsel have been duly withheld or collected and,
to the extent required, have been paid to the proper governmental authorities
or properly deposited as required by applicable laws. Co-Counsel (i) 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 Co-Counsel) and (ii)
does not have any liability for the taxes of any person (other than Co-Counsel)
under Treas. Reg. Section
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1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise. For purposes of this
Agreement, the term tax (including, with correlative meaning, the terms "taxes"
and "taxable") shall include all federal, state, local, and foreign income,
profits, franchise, gross receipts, payroll, sales, employment, use, property,
withholding, excise and other taxes, duties, or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts.
Section 4.9 Benefit Plans.
(a) The Co-Counsel Disclosure Schedule contains a true and
complete list of each: (i) pension, retirement, savings, profit sharing, stock
bonus, deferred compensation, bonus, incentive compensation, stock option,
restricted stock, stock purchase, stock appreciation right, salary
continuation, severance or termination pay, medical, hospital, dental,
cafeteria, flexible spending, dependent care, life or other insurance,
disability, fringe benefit, vacation pay, sick pay, holiday, unemployment,
employee loan, educational assistance or other employee benefit plan or
program, agreement or arrangement and (ii) employment, consulting or severance
agreement, in each case, whether written or oral, covering current or former
employees, directors or agents of Co-Counsel and maintained, sponsored or
contributed to by Co-Counsel, or with respect to which Co-Counsel may be a
party or otherwise have any liability (including, but not limited to, any
"employee benefit plans", as defined in Section 3(3) of ERISA) (all the
foregoing being herein called the "Co-Counsel Benefit Plans")). With respect
to the Co-Counsel Benefit Plans, individually and in the aggregate, Co-Counsel
has made available to Olsten a true and correct copy of (i) the three most
recent annual reports (Form 5500) filed with the IRS, if any, (ii) such
Co-Counsel Benefit Plan, (iii) any summary plan description relating to such
Co-Counsel Benefit Plan, (iv) each trust agreement, insurance contract, annuity
contract or other funding vehicle or investment contract relating to a
Co-Counsel Benefit Plan, (v) the most recent actuarial report or valuation,
(vi) the latest IRS determination letter and any other IRS ruling relating to a
Co-Counsel Benefit Plan and (vii) the premium expenses and claims experience
for each Co-Counsel Benefit Plan which is a welfare benefit plan for the three
most recent fiscal years and for the period from the beginning of the current
fiscal year to the last day of the month preceding the date hereof.
(b) Each Co-Counsel Benefit Plan complies, in form and
operation, in all material respects, with all applicable laws. No event has
occurred with respect to the Co-Counsel Benefit Plans, and there exists no
condition or set of circumstances in connection with which Co-Counsel could be
subject to any liability under ERISA, the
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Code or any other applicable statute, order or governmental rule or regulation,
which has a Material Adverse Effect.
(c) Each of the Co-Counsel Benefit Plans and related
trusts that is intended to be qualified under Section 401(a) and exempt from
tax under Section 501(a) of the Code has been determined by the IRS to be so
qualified and exempt and, to the knowledge of Co-Counsel, nothing has occurred
since such determination to cause any of such Co-Counsel Benefit Plans and
related trusts not to qualify under Section 401(a) or be exempt under Section
501(a) of the Code.
(d) With respect to the Co-Counsel Benefit Plans, all
required returns, reports and descriptions have been appropriately filed and
distributed.
(e) With respect to the Co-Counsel Benefit Plans, there
has been no prohibited transaction within the meaning of Section 406 of ERISA
or Section 4975 of the Code, or any liability for taxes or breach of fiduciary
duty and there is no action, suit, grievance, arbitration or other claim with
respect to the administration or investment of assets of the Co-Counsel Benefit
Plans (other than routine claims for benefits made in the ordinary course of
plan administration) pending, or to the knowledge of Co-Counsel, threatened,
and Co-Counsel has no knowledge of any facts which are reasonably likely to
give rise to any such action, suit, grievance or other claim.
(f) Co-Counsel does not maintain, sponsor, or contribute
to (or is required to contribute to) any "defined benefit plan" as defined in
Section 3(35) of ERISA, "multiemployer plan" as defined in Section 3(37) of
ERISA, or "multiple employer plan" within the meaning of Sections 4063 or 4064
of ERISA. With respect to any "employee benefit plan" (as defined in Section
3(3) of ERISA), whether or not terminated, currently or formerly maintained or
contributed to by Co-Counsel, or any entity which was at any time under common
control, determined under Section 414(b), (c), (m) or (o) of the Code, with
Co-Counsel, no liability has been incurred, and no event has occurred and no
condition exists, which could subject Co-Counsel, directly or indirectly
(through an indemnification agreement or otherwise) to any material liability,
including, without limitation, any material liability under Section 412, 4971,
4975 or 4980B of the Code or Title IV of ERISA.
(g) With respect to the Co-Counsel Benefit Plans, there
are no funded benefit obligations for which contributions are due and have not
been made or for which contributions have not been properly accrued as required
by GAAP, and there are no unfunded benefit obligations which have not been (i)
accounted for by reserves (if
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required by GAAP) or (ii) if required (and to the extent required, if any),
properly disclosed in accordance with GAAP or the rules and regulations of the
SEC, in the financial statements of Co-Counsel.
(h) No Co-Counsel Benefit Plan or other contract or
agreement to which Co-Counsel is a party provides life, health or other welfare
benefits to retirees or other terminated employees of Co-Counsel or their
dependents, other than continuation coverage mandated by Section 4980B of the
Code or any state law requiring similar continuation coverage.
(i) The audited balance sheet of Co-Counsel contained in
the Co-Counsel 10-K reflects reserves which are adequate to cover any
reasonably expected liabilities for unresolved or outstanding workers
compensation claims or claims under Co-Counsel's self-funded employee welfare
plans.
Section 4.10 Labor Relations. None of the employees of Co-Counsel
is represented by any labor union. To the knowledge of Co-Counsel, there is no
activity involving any employees of Co-Counsel seeking to certify a collective
bargaining unit or engaging in any other organizational activity.
Section 4.11 Permits; Compliance with Law. Co-Counsel is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any Governmental Entity necessary for Co-Counsel to own, lease and operate
its properties or to carry on its business as it is now being conducted
(collectively, the "Co-Counsel Permits"), except where the failure to have any
of the Co-Counsel Permits would not, individually or in the aggregate, have a
Material Adverse Effect. Co-Counsel (i) is, and has been, in compliance with
all laws, regulations, rules and orders, and reporting, licensing,
certification, registration and qualification requirements applicable to its
business or employees conducting its business, including, without limitation,
any federal, state or local laws, statutes, regulations or ordinances, and any
judicial or administrative orders or judgments thereunder and the common law,
pertaining to all health, industrial hygiene and environmental laws, including
the handing, storage, transportation and disposition of waste, any regulated
waste hazardous, toxic substances or other products or materials used by
Co-Counsel in the operations of its business, the breach or violation of which,
individually or in the aggregate, has a Material Adverse Effect; and (ii) has
received no notification or communication from any Governmental Entity (A)
asserting that Co-Counsel is not in compliance with any of the foregoing, which
noncompliance has a Material Adverse
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Effect, or (B) threatening to revoke any Co-Counsel Permit, which revocation
has a Material Adverse Effect.
Section 4.12 Insurance. Co-Counsel maintains insurance against
such risks and in such amounts as Co-Counsel reasonably believes are necessary
to conduct its business. Co-Counsel has provided Olsten with true and accurate
copies of all such policies. Co-Counsel is not in default with respect to any
provisions or requirements of any such policy nor have any of them failed to
give notice or present any claim thereunder in due and timely fashion, except
for defaults or failures which, individually or in the aggregate, do not have a
Material Adverse Effect. To the knowledge of Co-Counsel, Co-Counsel has not
received any notice of cancellation or termination in respect of any of its
insurance policies.
Section 4.13 Property. The Co-Counsel Disclosure Schedule sets
forth a true, complete and accurate list and description of all real property
owned or leased by Co-Counsel as of the date hereof including, any leasehold
estate which may been assigned by Co-Counsel, as assignor. Such description
includes, with respect to each lease, the term thereof, the location and number
of square feet of the premises thereof and the amount of base rent and
additional rent (including escalations) payable thereunder. True, complete and
accurate copies of the leases (including, but not limited to any subleases or
assignment agreements, if any) set forth on the Co-Counsel Disclosure Schedule
have been delivered to Olsten. Except as described in the following sentence,
Co-Counsel has good, valid and marketable title to, or a valid leasehold in,
all of its properties and assets (real, personal, mixed, tangible and
intangible), including, without limitation, all of the properties and assets
reflected in the balance sheet of Co-Counsel (except for properties and assets
disposed of in the ordinary course of business and consistent with past
practices since December 31, 1995). None of such properties or assets are
subject to any liability, obligation, claim, lien, mortgage, pledge, security
interest, conditional sale agreement, charge or encumbrance of any kind
(whether absolute, accrued, contingent or otherwise), except for imperfections
of title and encumbrances, if any, which are not substantial in amount, do not
materially detract from the value of the property or assets subject thereto and
do not impair the operations of Co-Counsel.
Section 4.14 Contracts. The Co-Counsel Disclosure Schedule lists
all contracts, agreements and instruments to which Co-Counsel is a party or by
which it or any of its properties or assets are bound: (a) which if terminated,
canceled or materially modified, could reasonably be expected to have a
Material Adverse Effect; (b) which involve payment obligations of any party
thereto in excess of $25,000; (c) which continue in effect after December 31,
1997, (d) which require indemnification or contribution
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payments by any party thereto, or (e) which grant registration rights to any
person or entity (collectively, the "Co-Counsel Contracts"). All of the
Co-Counsel Contracts are in full force and effect, Co-Counsel is not is in
breach, violation or default under any Co-Counsel Contract, and, to the
knowledge of Co-Counsel, no condition exists which constitutes a breach,
violation or default thereunder by Co-Counsel or gives rise to any right of
termination, cancellation, prepayment or acceleration and Co-Counsel is not
aware of any default by any other party to any Co-Counsel Contract nor of any
event or condition which constitutes a breach thereunder.
Section 4.15 Intellectual Property. Co-Counsel owns, possesses or
has the right to use (perpetually and without payment of royalties), for the
life of the proprietary right, all franchises, patents, trademarks, service
marks, tradenames, licenses and authorizations which are necessary or useful
to, or are currently used in its business (collectively, "Intellectual Property
Rights"). The Co-Counsel Disclosure Schedule sets forth a true, correct and
complete list and description of all such Intellectual Property Rights.
Co-Counsel is not a licensor or licensee of any Intellectual Property Rights.
All filings and other actions necessary to perfect the rights of Co-Counsel to
its Intellectual Property Rights have been duly made in all jurisdictions where
such rights are used by it except in such case, as does not have a Material
Adverse Effect. Co-Counsel is not infringing any Intellectual Property Rights
of any person or otherwise violating the rights of any person which could
subject Co-Counsel to liabilities which would prevent Co-Counsel from
conducting its business substantially in the manner in which it is now being
conducted and no claim has been made or threatened against Co-Counsel alleging
any such violation, except, in such case, as does not have a Material Adverse
Effect.
Section 4.16 Related Party Transactions. Except as disclosed in
the Co-Counsel SEC Documents, there have been no material transactions between
Co-Counsel on the one hand and (i) a record or beneficial owner of five percent
or more of the voting securities of Co-Counsel or (ii) an affiliate of any such
officer, director or beneficial owner, on the other hand.
Section 4.17 Transaction Expenses. Co-Counsel does not currently
and will not in the future have any liability or obligation (whether for the
payment of fees or otherwise and whether or not conditioned on the occurrence,
existence or absence of one or more events or circumstances) to any person or
entity arising from or relating to services provided to Co-Counsel or
Co-Counsel's affiliates in connection with any aspect of the preparation or
negotiation of, or the consummation of the transactions contemplated by, this
Agreement or the decision to engage in such preparation, negotiation and
consummation.
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Section 4.18 Accounting Matters. To the knowledge of Co-Counsel,
neither Co-Counsel nor any of its affiliates has, through the date of this
Agreement, taken or agreed to take any action that (without giving effect to
any action taken or agreed to be taken by Olsten or any of its affiliates)
would prevent Olsten from accounting for the business combination to be
effected by the Merger as a pooling-of-interests.
Section 4.19 Vote Required. The only vote of the holders of any
class or series of Co-Counsel capital stock necessary to approve the Plan of
Merger is the affirmative vote by the holders of two-thirds of the outstanding
shares of Co-Counsel Common Stock entitled to vote thereon.
Section 4.20 Affiliates. The Co-Counsel Disclosure Schedule sets
forth a list of all persons who are, to the knowledge of Co-Counsel at the date
hereof, "affiliates" of Co-Counsel for purposes of Rule 145 under the
Securities Act (the "Co-Counsel Affiliates").
Section 4.21 Certain Agreements. Except for the Co-Counsel
Benefit Plans, Co-Counsel is not a party to any written or oral employment
agreement, or other arrangement regarding employees (including the Co-Counsel
Benefit Plans), directors or agents, including any (i) agreement with any
executive officer or other employee of Co-Counsel the benefits of which are
contingent, or the terms of which are materially altered, upon the occurrence
of a transaction involving Co-Counsel of the nature contemplated by this
Agreement or (ii) agreement or plan, any of the benefits of or rights under
which will be increased, or the vesting or payment of the benefits of or rights
under which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which
will be calculated on the basis of any of the transactions contemplated by this
Agreement. No holder of any option to purchase shares of Co-Counsel Common
Stock, or shares of Co-Counsel Common Stock granted in connection with the
performance of services for Co-Counsel, is or will be entitled to receive cash
from Co-Counsel in lieu of or in exchange for such option or shares as a result
of the transactions contemplated by this Agreement.
Section 4.22 Relationships with Clients. Co-Counsel is not
engaged in any material dispute with any client of Co-Counsel, except for
disputes which do not have a Material Adverse Effect. To Co-Counsel's
knowledge, no client is considering termination or any adverse modification of
its arrangements relating to businesses of Co-Counsel (other than terminations
or modifications that occur in the ordinary course of business as a result of
work orders being completed and which do not have a Material Adverse Effect).
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Section 4.23 Disclosure. No representation or warranty by
Co-Counsel in this Agreement and no statement contained in any document or
other writing furnished or to be furnished to Olsten or to Merger Sub or any of
their representatives pursuant to the provisions hereof contains or will
contain any untrue statement of material fact or omits or will omit to state
any material fact necessary in order to make the statements made herein or
therein not misleading. All copies of all Co-Counsel Contracts and all other
documents delivered to Olsten, Merger Sub or any of their representatives
pursuant hereto are true, complete and accurate in all material respects.
There has been no event or transaction which has occurred or information which
has come to the attention of Co-Counsel (other than events or information
relating to economic conditions of general public knowledge) which could
reasonably be expected to have a Material Adverse Effect or which could
reasonably be expected to prevent or impair the ability of the Surviving
Corporation, after the Effective Time, to carry on the business of Co-Counsel
in the same manner as it is presently being conducted.
ARTICLE V
COVENANTS OF OLSTEN AND CO-COUNSEL
PENDING THE MERGER
During the period from the date of this Agreement to the Effective
Time, Olsten and Co-Counsel each agree that (except as contemplated or
expressly permitted by this Agreement or to the extent that the other party
shall otherwise agree in writing):
Section 5.1 Ordinary Course. The business of Co-Counsel shall be
conducted only in the ordinary course of business and in a manner consistent
with past practice. Co-Counsel shall use all reasonable efforts to preserve
substantially intact the business organization of itself, to keep available the
services of its present officers, employees and consultants and to preserve its
present relationships with customers, suppliers and other persons with which it
has a significant business relationship.
Section 5.2 Governing Documents. No party shall amend or propose to
amend its certificate of incorporation or by-laws or equivalent organizational
documents, provided that Olsten shall be permitted to make non-material
amendments to its bylaws.
Section 5.3 Issuance of Securities. Co-Counsel shall not, issue,
deliver or sell, or authorize or propose to issue, deliver or sell, any shares
of its capital stock of any class, any Voting Debt or any securities
convertible into, or any rights, warrants or
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options to acquire any such shares, Voting Debt or convertible securities or
other ownership interest, except for the issuance of Co-Counsel Common Stock
issuable pursuant to the exercise of the Co-Counsel Warrants, the
Representatives' Warrants and the Co-Counsel Stock Options disclosed in Section
4.2(b).
Section 5.4 Dividends; Changes in Stock. No party shall, nor shall
any party propose to: (i) declare, set aside, make or pay any dividend or
other distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock (except in the case of Olsten (x) cash dividends or
distributions paid on or with respect to a class of common stock all of which
shares of common stock are owned directly or indirectly by Olsten and (y) it
may continue the declaration and payment of its regular quarterly cash
dividends) or (ii) reclassify, combine, split or subdivide any of its capital
stock. Co-Counsel shall not redeem, purchase or otherwise acquire, directly or
indirectly any of its capital stock.
Section 5.5 Acquisition Proposals. Co-Counsel will not and will
direct its officers, directors, employees and any investment banker, financial
advisor, attorney, accountant or other representative retained by Co-Counsel
not to: (i) solicit or otherwise encourage any inquiries or the making of any
proposal which constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal (as defined below in this Section 5.5), or (ii) except to
the extent permitted by the last sentence of this Section 5.5, agree to or
endorse any Acquisition Proposal or engage in negotiations concerning, provide
any nonpublic information to, or have any discussions with, any person relating
to any Acquisition Proposal. Co-Counsel will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing and, in
connection therewith, will request that confidential information furnished by
or on behalf of Co-Counsel to any such parties be returned to Co-Counsel
immediately. Co-Counsel shall immediately notify Olsten of any negotiations,
requests for nonpublic information or discussions with respect to an
Acquisition Proposal and will keep Olsten fully informed of the status and
details of any such Acquisition Proposal, indication or request. As used in
this Agreement, "Acquisition Proposal" means any proposal or offer involving a
merger, consolidation, share exchange, recapitalization, business combination
or other similar transaction involving Co-Counsel or any proposal or offer to
acquire an equity interest (other than an immaterial equity interest) in, or a
material portion of the assets of Co-Counsel other than the transactions
contemplated by this Agreement. Notwithstanding any other provision of this
Agreement, nothing contained in this Agreement shall prohibit Co-Counsel or
Co-Counsel's Board of Directors (the "Counsel Board of Directors"): (A) from
taking and disclosing to Co-Counsel's shareholders a position or making other
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disclosures contemplated by Rule 14e-2 promulgated under the Exchange Act as
based upon advice of its outside legal counsel (which may be Co-Counsel's
regularly engaged outside legal counsel) may be required by law; (B) from
withdrawing, modifying or changing its recommendation to Co-Counsel's
shareholders with respect to the Merger or (C) from taking, authorizing or
permitting any action or actions in response to or in connection with any
Acquisition Proposal, or any action contemplated by clause (ii) of the first
sentence of this Section 5.5, if the Co-Counsel Board of Directors determines
in good faith, based upon the advice of its outside legal counsel, that, in
each such case, the failure to do so would violate its fiduciary duties to the
holders of Co-Counsel Common Stock under applicable law.
Section 5.6 No Acquisitions. Co-Counsel shall not acquire or agree
to acquire by merging or consolidating with, or by purchasing a substantial
equity interest in or a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof or otherwise acquire or agree to
acquire any material amount of assets other than in the ordinary course of
business.
Section 5.7 No Dispositions. Co-Counsel shall not sell, lease,
encumber or otherwise dispose of, or agree to sell, lease (whether such lease
is an operating or capital lease), encumber or otherwise dispose of any
material portion of its assets.
Section 5.8 Indebtedness; Leases. Co-Counsel shall not incur any
indebtedness for borrowed money or guarantee any such indebtedness or issue or
sell any debt securities or warrants or rights to acquire any debt securities
of Co- Counsel or guarantee any debt securities of others or enter into,
cancel, surrender, amend or modify any lease or sublease (whether such lease or
sublease is an operating or capital lease) other than in each case in the
ordinary course of business.
Section 5.9 Advice of Changes; Governmental Filings. Each party
shall confer on a regular and frequent basis with the other, report on
operational matters and promptly advise the other orally and in writing of:
(i) any material inaccuracy or breach of any of its representations, warranties
or covenants contained in this Agreement and (ii) any material failure of a
party or any officer, director, employee, agent or affiliate thereof, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that such advice shall not be
taken into account in determining whether any of the conditions contained in
Article VII has been satisfied. Each party shall promptly provide the other
(or its counsel) copies of all
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filings made by such party with any Governmental Entity in connection with this
Agreement and the transactions contemplated hereby.
Section 5.10 Employee Arrangements. Co-Counsel shall not: (a)
increase or agree to increase the compensation (whether cash or non-cash)
payable or to become payable or the benefits provided or to be provided to its
directors, officers or employees, except for: (i) increases in salary or wages
of employees other than officers of Co-Counsel (whether in such capacity or
otherwise) in accordance with past practices and not to exceed 5% on an annual
basis; or (ii) increases required by the provisions of any Co-Counsel Benefit
Plan as in effect on the date hereof; (b) grant or increase the amount of any
severance or termination pay to, or enter into any employment or severance
agreements with, any officers or employees of Co-Counsel; (c) enter into or
amend any collective bargaining agreement; or (d) establish, adopt, enter into
or amend any employee benefit or fringe benefit plans or arrangements for the
benefit of any directors, officers or employees, including, without limitation,
any plans or arrangements of the type set forth in Section 4.9 hereof;
provided, however, that nothing in this Section 5.10 shall prevent the payment
or other performance of any award or grant made prior to the date hereof and
disclosed in the Co-Counsel SEC Documents, the Co-Counsel Disclosure Schedule
or pursuant to this Agreement. For the purposes of this Section 5.10, the term
"officer" shall mean only those persons who are required to file Form 3 or 4
under Section 16(a) of the Exchange Act.
Section 5.11 No Dissolution, Etc. Neither Olsten nor Co-Counsel
shall authorize, recommend, propose or announce an intention to adopt a plan of
complete or partial liquidation or dissolution.
Section 5.12 No Action. No party hereto will take or agree or commit
to take any action that is reasonably likely to make any of its representations
or warranties hereunder inaccurate in any material respect at the date made (to
the extent so limited) or as of the Effective Time.
Section 5.13 Tax Returns. Co-Counsel will file all tax returns
required to be filed by it (including estimated tax returns) and will pay all
taxes due prior to the Effective Time.
Section 5.14 Litigation. Without Olsten's prior written consent,
Co-Counsel shall not, nor shall it permit any of its affiliates or
representatives to, take any action with respect to any pending or threatened
actions, suits or proceedings, including,
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without limitation, conducting settlement negotiations or entering into any
binding settlement agreement, arrangement or understanding.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Preparation of S-4 and Proxy Statement. Co-Counsel shall
as promptly as practicable prepare and file with the SEC the Proxy Statement
and Olsten shall as promptly as practicable prepare and file with the SEC the
S-4, in which the Proxy Statement will be included as a prospectus. Olsten
shall use its reasonable efforts, and Co-Counsel shall cooperate with Olsten,
to have the S-4 declared effective by the SEC as promptly as practicable and to
keep the S- 4 effective as long as is necessary to consummate the Merger.
Olsten shall, as promptly as practicable, provide copies of any written
comments received from the SEC with respect to the S-4 to Co-Counsel and advise
Co-Counsel of any verbal comments with respect to the S-4 received from the
SEC. Co-Counsel shall use all reasonable efforts to cause the Proxy Statement
to be mailed to its shareholders promptly after the S-4 is declared effective.
Olsten shall use reasonable efforts to obtain all necessary state securities
laws or "blue sky" permits, approvals and registrations in connection with the
issuance of Class B Stock (and the Olsten Common Stock issuable upon conversion
of such Class B Stock) pursuant to the Merger. If at any time prior to the
Effective Time, any event with respect to Olsten or any of its Subsidiaries or
with respect to other information supplied by Olsten or for inclusion in the
Proxy Statement or S-4, shall occur which is required to be described in an
amendment of, or a supplement to, the Proxy Statement or the S-4, such event
shall be so described, and such amendment or supplement shall be promptly filed
with the SEC and, as required by law, disseminated to the shareholders of
Co-Counsel. If at any time prior to the Effective Time, any event with respect
to Co-Counsel or with respect to other information supplied by Co-Counsel for
inclusion in the Proxy Statement or S-4, shall occur which is required to be
described in an amendment of, or a supplement to, the Proxy Statement or the
S-4, such event shall be so described, and such amendment or supplement shall
be promptly filed with the SEC and, as required by law, disseminated to the
shareholders of Co-Counsel. Olsten shall advise Co-Counsel, promptly after it
receives notice thereof, of the time when the S-4 has become effective or any
supplement or amendment thereto has been filed, the issuance of any stop order,
the denial or suspension of the qualification of the Class B Stock (or the
Olsten Common Stock issuable upon conversion of such Class B Stock) issuable
pursuant to the Merger for offering or sale in any jurisdiction or any request
by the SEC for any amendment or
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supplement to the S-4 or comments thereon and responses thereto or requests by
the SEC for additional information.
Section 6.2 Letters of Accountants. (a) Olsten shall use reasonable
best efforts to cause Coopers & Lybrand L.L.P. ("C&L"), Olsten's independent
public accountants, to deliver to Olsten, a letter to the effect that
pooling-of- interests accounting is appropriate for the Merger if it is closed
and consummated in accordance with this Agreement, and Co-Counsel shall use
reasonable best efforts to cause BDO Seidman L.L.P. ("Seidman"), Co-Counsel's
independent public accountants, to cooperate fully with C&L (including without
limitation, sharing information, analysis and work product, engaging in active
discussions and delivering to Co-Counsel a letter substantially similar to C &
L's letter to Olsten) in connection with C&L's delivery of such letter.
(b) Co-Counsel shall use reasonable best efforts to cause to
be delivered to Olsten a letter of Seidman, Co-Counsel's independent public
accountants, dated a date within two Business Days before the date on which the
S-4 shall become effective and addressed to Olsten, in form and substance
reasonably satisfactory to Olsten and customary in form and substance for
letters delivered by independent public accountants in connection with
registration statements similar to the S-4.
Section 6.3 Accounting Matters. Neither Olsten, Co-Counsel nor any
of their respective affiliates shall take or agree to take any action or fail
to take any action that would prevent Olsten from accounting for the business
combination to be effected by the Merger as a pooling-of-interests under GAAP.
Without limitation of the foregoing, each party agrees that neither it nor its
affiliates will, and it will direct its accountants not to, discuss with or
make any written presentations to the SEC concerning the application of
pooling-of-interests accounting, unless such party has provided to the other
party a reasonable opportunity to participate fully in any such discussion or
presentation. Each party shall promptly notify the other parties if at any
time such party has knowledge of any fact or circumstance which causes such
party to believe that C&L will not be able to deliver the letter referred to in
Section 6.2(a).
Section 6.4 Access to Information. From the date hereof to the
Effective Time, Olsten and Co-Counsel shall each afford to the other, and the
officers, employees, accountants, counsel and other representatives of the
other, access at all reasonable times to its officers, employees, agents,
properties, offices, plants, other facilities and to all books and records
(including tax returns), and shall furnish to the other party all financial,
operating and other data and information as the other party, through its
officers, employees or agents, may reasonably request. Each of Co-Counsel and
Olsten
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agrees that it will not, and will cause its respective representatives not to,
use any information obtained pursuant to this Section 6.4 for any purpose
unrelated to the consummation of the transaction contemplated by this
Agreement. The Confidentiality Agreement dated January 4, 1996 between Olsten
and Co-Counsel ("Co-Counsel Confidentiality Agreement") shall apply with
respect to information furnished by Co-Counsel and Co-Counsel's representatives
thereunder or hereunder and any other activities contemplated thereby.
Section 6.5 Meeting of Shareholders. Co-Counsel shall promptly take
all action necessary in accordance with the laws of the State of Texas, the
Exchange Act, its articles of incorporation and its by-laws to convene a
meeting of its shareholders for the purpose of approving this Agreement.
Subject to Section 5.5, Co-Counsel will, through its Board of Directors,
recommend to its shareholders approval of this Agreement and shall use its
reasonable best efforts to obtain approval of this Agreement by its
shareholders (except to the extent Co-Counsel's Board of Directors in good
faith, determines that, based upon the advice of its outside legal counsel, to
do so would violate its fiduciary duties to the holders of Co-Counsel Common
Stock under applicable law).
Section 6.6 Legal Conditions to Merger. Each of Co-Counsel and
Olsten will take all reasonable actions necessary to comply promptly with all
legal requirements which may be imposed on itself with respect to the Merger
(including furnishing all information required in connection with approvals of
or filings with any Governmental Entity) and will promptly cooperate with and
furnish information to each other in connection with any such requirements
imposed upon either of them in connection with the Merger.
Section 6.7 Affiliates. Prior to the Closing Date, Co-Counsel shall
notify Olsten in writing regarding any changes in the identity of the
Co-Counsel Affiliates. Co-Counsel shall use all reasonable efforts to cause
each Co-Counsel Affiliate to deliver to Olsten on or prior to the Closing Date
an agreement in substantially the form previously agreed upon (each, an
"Affiliate Agreement").
Section 6.8 Stock Exchange Listing. Olsten shall use its reasonable
best efforts to cause the shares of Olsten Common Stock, issuable upon
conversion of the Class B Stock to be issued pursuant to this Agreement, to be
listed on the NYSE, subject to notice of official issuance thereof.
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Section 6.9 Stock Options; Co-Counsel Warrants.
(a) At the Effective Time, each outstanding option to
purchase Co-Counsel Common Stock which has been granted pursuant to the
Co-Counsel Stock Option Plans (collectively, the "Co-Counsel Stock Options"),
whether vested or unvested, and each outstanding right to acquire shares of
Co-Counsel Common Stock pursuant to the Co-Counsel Warrants or the
Representatives' Warrants, shall be assumed by Olsten. After the Effective
Time, each (A) Co-Counsel Stock Option and each Co-Counsel Warrant shall
automatically be deemed to constitute an option, warrant or right to acquire,
on the same terms and conditions as were applicable under such Co-Counsel Stock
Option or Co-Counsel Warrant, as the case may be, the number of shares of Class
B Stock equal to the product obtained by multiplying (i) the number of shares
of Co-Counsel Common Stock subject to the Co-Counsel Stock Option or the
Co-Counsel Warrant, as the case may be, by (ii) the Conversion Number, at a
price per share equal to the quotient obtained by dividing (x) the exercise
price for the shares of Co-Counsel Common Stock subject to such Co-Counsel
Stock Option or Co-Counsel Warrant, as the case may be, by (y) the Conversion
Number; (B) each of the then outstanding Representatives' Warrants shall
automatically be deemed to constitute a warrant or right to acquire, on the
same terms and conditions as were applicable under such Representatives'
Warrants, the number of new units ("New Units") equal to the product obtained
by multiplying (i) the number of then outstanding Representatives' Warrants by
(ii) the Conversion Number, at a price per New Unit equal to the quotient
obtained by dividing (i) $3.90 by (ii) the Conversion Number and (C) with
respect to each New Unit, any Co- Counsel Common Stock and Company Warrant
obtained as a result of exercise of a converted Representatives' Warrant to
acquire such New Unit, such Co-Counsel Common Stock and Co-Counsel Warrant
shall be deemed to have been converted on the same basis as described in clause
(A) above; PROVIDED, HOWEVER, that the number of shares of Class B Stock that
may be purchased upon exercise of such Co-Counsel Stock Option,
Representatives' Warrant or Co-Counsel Warrant shall not include any fractional
share and, upon exercise of such Co-Counsel Stock Option, Representatives'
Warrant or Co-Counsel Warrant, a cash payment shall be made for any fractional
share in accordance with the requirements of such Co-Counsel Stock Option,
Representatives' Warrant or Co-Counsel Warrant; and PROVIDED FURTHER, that in
the case of any Co-Counsel Stock Option to which Section 421 of the Code applies
by reason of its qualification under any of Sections 422-424 of the Code
("qualified stock options"), the option price, the number of shares purchasable
pursuant to such option and the terms and conditions of exercise of such option
shall be determined in order to comply with Section 424(a) of the Code.
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(b) As soon as practicable after the Effective Time,
Olsten shall deliver to each then holder of a Co-Counsel Stock Option,
Co-Counsel Warrant or Representatives' Warrant, an appropriate notice setting
forth such holder's right to acquire Class B Stock, and the Co-Counsel Stock
Option agreement, Co-Counsel Warrant and Representatives' Warrant of each such
holder shall be deemed to be appropriately amended so that such option
continues in effect on the same terms and conditions as contained in the
outstanding Co-Counsel Stock Option Agreement, Co-Counsel Warrant or
Representatives' Warrant (subject to the adjustments required by this Section
6.9 after giving effect to the Merger).
(c) As soon as practicable after the Effective Time,
Olsten shall file registration statements: (i) on Form S-8 (or any successor
form) or another appropriate form with respect to the shares of Class B Stock
subject to Co-Counsel Stock Option Plans (and the shares of Olsten Common Stock
into which such shares of Class B Stock are convertible) and (ii) on Form S-3
(or any successor form) or another appropriate form with respect to the shares
of Class B Stock subject to the Co-Counsel Warrants (and the shares of Olsten
Common Stock into which such shares of Class B Stock are convertible), and
shall use its reasonable best efforts to maintain the effectiveness of such
registration statements (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as any Co-Counsel Stock Options or
Co-Counsel Warrants remain outstanding.
Section 6.10 Fees and Expenses. (a) Except as otherwise provided in
this Section, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such expenses.
(b) If Olsten terminates this Agreement as permitted
under Section 8.1(d) as a result of the occurrence of any event described in
clause (i) of Section 6.10(d) or as permitted under Section 8.1(g), or
Co-Counsel terminates this Agreement as permitted under Section 8.1(f) or (g),
then Co-Counsel shall pay to Olsten promptly, but in no event later than two
Business Days, after such termination, an amount in immediately available funds
equal to $500,000.
(c) If Olsten terminates this Agreement as permitted
under Section 8.1(d) as a result of the occurrence of any event described in
clause (ii) of Section 6.10(d) (so long as no event described in clause (i) of
Section 6.10(d) has occurred), then Co-Counsel shall pay Olsten promptly, but
in no event later than two Business Days after Olsten's demand therefor, an
amount in immediately available funds equal to Olsten's reasonable, documented
out-of-pocket expenses incurred in connection with the
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negotiation, execution, delivery and performance of this Agreement and the
transactions contemplated hereby (including, without limitation, costs and
disbursements of attorneys, accountants and investment bankers, filing fees and
the expenses incurred in connection with printing and mailing the Proxy
Statement and the S-4) up to $250,000; provided, however, that if within one
year after such termination, Co-Counsel or any of its Subsidiaries has effected
or has entered into an agreement to effect any Acquisition Proposal or any
tender or exchange offer referred to in Section 6.10(d)(ii) is closed, then
Co-Counsel shall pay to Olsten promptly, but in no event later than two
Business Days, after the consummation of, or execution of any agreement
relating to, such Acquisition Proposal, or consummation of such tender or
exchange offer, in addition to the amount paid to Olsten in reimbursement of
its expenses as provided above, an amount in immediately available funds, equal
to the difference between $500,000 and the amount of such expenses previously
paid by Co-Counsel to Olsten.
(d) Each of the events described in the following clauses
(i) and (ii) is hereinafter referred to as a "Trigger Event":
(i) The Co-Counsel Board of Directors shall have
(A) withdrawn or materially modified its approval or recommendation of this
Agreement for any reason other than the occurrence of an event relating to
Olsten which has a Material Adverse Effect or (B) postponed the date scheduled
for Co-Counsel's shareholders' meeting relating to this Agreement (the
"Co-Counsel Meeting") beyond September 30, 1996, without Olsten's prior written
consent, which consent shall not be unreasonably delayed or withheld; or
(ii) The Plan of Merger shall not have been
approved with the Co-Counsel Vote having been taken by the requisite vote of
Co-Counsel shareholders as provided in Section 6.1 in circumstances when (a) an
offer or proposal to effect an Acquisition Proposal (which was not encouraged
or solicited by Olsten) with or for Co-Counsel has been publicly announced or
(b) any person or group (as defined in Section 13(d)(3) of the Exchange Act)
("Group") (other than Olsten or any of its affiliates) shall have become a
beneficial owner (as defined in Rule 13d-3 promulgated under the Exchange Act)
("Beneficial Owner") of at least 15% of the outstanding shares of Co-Counsel
Common Stock, or any person or group shall have commenced, or shall have
publicly announced its intention to commence, a tender or exchange offer for at
least 25% of the outstanding shares of Co-Counsel Common Stock unless at least
five (5) days prior to the latest scheduled date for the Co-Counsel Meeting,
such person or group publicly announces its withdrawal of such offer or
intention not to commence such tender or exchange offer.
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Section 6.11 Brokers or Finders. Each of Olsten and Co-Counsel
represents, as to itself and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, except De Bellas &
Co., all of whose fees and expenses will be paid by Olsten in accordance with
Olsten's agreement with such firm, and the persons disclosed in the Co-Counsel
Disclosure Schedule, all of whose fees and expenses will be paid by Co-Counsel
in accordance with Co-Counsel's agreement with such firms (true, correct and
complete copies of which have been delivered by Co-Counsel to Olsten), and each
of Olsten and Co-Counsel respectively agree to indemnify and hold the other
harmless from and against any and all claims, liabilities or obligations with
respect to any other fees, commissions or expenses asserted by any person on
the basis of any act or statement alleged to have been made by such party or
its affiliate.
Section 6.12 Indemnification. Olsten and Merger Sub agree that all
rights to indemnification existing in favor of the present directors, officers
and employees of Co-Counsel (solely in their capacities as such) or present
directors of Co-Counsel serving or who served at Co-Counsel's request as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, as provided in Co-
Counsel's articles of incorporation or bylaws (each as in effect on the date
hereof), and the indemnification agreements with such present directors,
officers and employees as in effect as of the date hereof with respect to
matters occurring prior to the Effective Time shall survive the Merger and
shall continue in full force and effect and without modification (other than
modifications which would enlarge the indemnification rights) for a period of
not less than the statutes of limitations applicable to such matters, and
Olsten agrees to cause the Surviving Corporation to comply fully with its
obligations hereunder and thereunder. Furthermore, the present Article XIII of
the Articles of Incorporation of Co-Counsel shall not be modified or
terminated for a period of at least four years after the Effective Time, except
for modifications which enlarge the protection or rights of the directors.
Section 6.13 Employment Agreements. At the Closing, Olsten shall
offer or cause the Surviving Corporation to offer to enter into employment
agreements with each of the individuals listed in Section 6.13 of the
Co-Counsel Disclosure Schedule, each such agreement to be substantially in the
form previously agreed to among Olsten, Co-Counsel and each such individual on
or prior to the date hereof.
Section 6.14 Additional Agreements; Reasonable Efforts. Subject to
the terms and conditions of this Agreement, each of the parties hereto agrees
to use all reasonable
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efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations (including, without limitation, providing information and making
all necessary filings under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended) to consummate and make effective the transactions
contemplated by this Agreement, subject to the Co-Counsel Vote, including
cooperating fully with the other party. Except as otherwise contemplated
herein, in any case at any time after the Effective Date, any further action is
necessary or desirable to carry out the purposes of this Agreement or to vest
the Surviving Corporation with full title to all properties, assets, rights,
approvals, immunities and franchises of either of the Constituent Corporations,
the proper officers and directors of each party to this Agreement shall take
all such necessary action. Co-Counsel shall use its best efforts to cause
Stephens Inc. to issue at the earliest practicable date, an opinion addressed
to Co-Counsel or Co-Counsel's Board of Directors that the Conversion Number is
fair, from a financial point of view, to Co-Counsel and the holders of
Co-Counsel Common Stock (the "Fairness Opinion").
Section 6.15 Reserved Shares; Eligibility for Rules 144 and 145. (a)
On the date hereof, Olsten has, and at and following the Effective Time, Olsten
shall have (i) sufficient shares of Class B Stock reserved for issuance (A)
upon conversion of shares of Co-Counsel Common Stock in the Merger and (B) upon
the exercise of all options and warrants to acquire shares of Class B Stock
(including, after the Effective Time, all options to acquire Co-Counsel Common
Stock and the Co-Counsel Warrants and the Representatives' Warrants assumed by
Olsten pursuant to Section 6.9 hereof) and (ii) sufficient shares of Olsten
Common Stock reserved for issuance upon conversion of all issued and
outstanding Class B Stock and all Class B Stock issuable pursuant to clause (i)
of this Section.
(b) The shares of Olsten Common Stock acquired upon conversion of
Class B Stock will be available for resale without restriction (i) immediately
and without any limitation by those present holders of Co-Counsel Common Stock,
the Co-Counsel Stock Options or the Co-Counsel Warrants who are not Co-Counsel
Affiliates and (ii) immediately after expiration of the "Restricted Period" (as
defined in the Affiliate Agreements) by the present holders of Co-Counsel
Common Stock, the Co-Counsel Stock Options or the Co-Counsel Warrants who are
Co-Counsel Affiliates and who comply with the requirements of Rule 145(d)(1) in
effecting such resales. Olsten shall use all reasonable efforts to insure that
Rule 144 and Rule 145 shall at all times remain available for Co-Counsel
Affiliates to resell their shares of Olsten Common Stock. The parties confirm
that since Olsten Common Stock (and Class B Stock) will be registered with the
SEC in the S-4 and distributed in a public offering, no shares of such Olsten
Common Stock or Class B Stock will be "restricted securities" within the
meaning of Rule 144.
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ARTICLE VII
CONDITIONS OF MERGER
Section 7.1 Conditions to Obligations of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) Shareholder Approval. The Plan of Merger shall have
been approved by the Co-Counsel Vote.
(b) NYSE Listing. The shares of Olsten Common Stock
issuable upon conversion of Class B Stock to be issued pursuant to this
Agreement shall have been authorized for listing on the NYSE upon official
notice of issuance.
(c) Other Approvals. Other than the filing provided for
by Section 1.1, all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by, any
Governmental Entity required in connection with the consummation of the Merger,
the failure to obtain which has a Material Adverse Effect on Olsten and its
Subsidiaries, taken as a whole (assuming the Merger had taken place), shall
have been filed, occurred or been obtained. Olsten shall have received all
state securities laws or "blue sky" permits and authorizations necessary to
issue the Class B Stock (and the Olsten Common Stock issuable upon conversion
of such Class B Stock) pursuant to the Agreement.
(d) S-4. The S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order.
(e) No Injunction or Restraints. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction prohibiting the consummation of the Merger
shall be in effect; PROVIDED, HOWEVER, that prior to invoking this condition,
each party shall use all reasonable efforts to have any such decree, ruling,
injunction or order vacated, except as otherwise contemplated by this
Agreement.
Section 7.2 Additional Conditions to Obligations of Olsten and Merger
Sub. The obligations of Olsten and Merger Sub to effect the Merger are also
subject to the following conditions (any one or more of which may be waived by
Olsten and Merger Sub, but only in a writing signed by Olsten and Merger Sub):
38
<PAGE> 45
(a) Representations and Warranties. All representations
and warranties of Co-Counsel contained in this Agreement which are qualified
with respect to Material Adverse Effect on Co-Counsel or materiality shall be
true and correct, and all representations and warranties that are not so
qualified shall be true and correct in all material respects, in each case as
if such representation or warranty was made on and as of the Effective Time,
except to the extent that any such representation or warranty is made as of a
specified date, in which case such representation or warranty shall have been
true and correct as of such specified date.
(b) Agreements and Covenants. Co-Counsel shall have
performed or complied in all material respects with all of its agreements and
covenants contained in this Agreement to be performed or complied with by it at
or prior to the Effective Time.
(c) No Pending Proceedings. Neither Olsten nor
Co-Counsel nor any Subsidiary of Olsten shall be required by the Department of
Justice, the Federal Trade Commission or any other Governmental Entity to hold
separate, sell or otherwise dispose of any Subsidiary or assets or properties,
the effect of any of which would be to materially impair the value of the
Merger to Olsten.
(d) Affiliate Agreements. Olsten shall have received
from each Co-Counsel Affiliate (as defined in Section 4.22) an executed copy of
an Affiliate Agreement.
(e) Compliance Certificate. Co-Counsel shall have
delivered to Olsten a certificate, dated as of the Closing Date, signed by the
President or any Vice President of Co-Counsel, certifying as to the fulfillment
of the conditions specified in paragraphs (a) and (b) of this Section 7.2.
(f) Appraisal Rights. Shareholders holding no more than
7.5% of the outstanding Co-Counsel Common Stock shall have demanded their
appraisal rights under the TBCA.
(g) Opinion of Accountants. Olsten shall have received
an opinion from C&L, in form reasonably satisfactory to Olsten, to the effect
that the business combination to be effected by the Merger would be properly
accounted for as a pooling-of-interests in accordance with GAAP and all
published rules, regulations and policies of the SEC.
39
<PAGE> 46
Section 7.3 Additional Conditions to Obligation of Co-Counsel. The
obligation of Co-Counsel to effect the Merger is also subject to the following
conditions (any one or more of which may be waived by Co-Counsel, but only in a
writing signed by Co-Counsel):
(a) Representations and Warranties. All representations
and warranties of Olsten and Merger Sub contained in this Agreement which are
qualified with respect to Material Adverse Effect on Olsten or materiality
shall be true and correct, and all representations and warranties that are not
so qualified shall be true and correct in all material respects, in each case
as if such representation or warranty is made as of the Effective Time, except
to the extent that any such representation or warranty is made as of a
specified date, in which case such representation or warranty shall have been
true and correct as of such specified date.
(b) Agreements and Covenants. Olsten shall have
performed or complied in all material respects with all of its agreements and
covenants contained in this Agreement to be performed or complied with by it at
or prior to the Effective Time.
(c) Compliance Certificate. Olsten shall have delivered
to Co-Counsel a certificate, dated the Closing Date, signed by the Chairman,
President or any Vice President of Olsten, certifying as to the fulfillment of
the conditions specified in paragraphs (a) and (b) of this Section 7.3.
(d) Tax Opinion. Co-Counsel shall have received an
opinion from Bracewell & Patterson, L.L.P., dated the Effective Time, to the
effect that (i) the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code; (ii)
Co-Counsel will be a party to the reorganization within the meaning of Section
368(b) of the Code; (iii) no gain or loss will be recognized by Co-Counsel as a
result of the Merger; and (iv) no gain or loss will be recognized by any
shareholder of Co-Counsel as a result of the Merger with respect to Co-Counsel
Common Stock converted solely into Class B Stock (and the Olsten Common Stock
issuable upon conversion of such Class B Stock. In rendering such opinion,
such counsel may rely upon representations contained in certificates and this
Agreement of Co-Counsel, Olsten, Merger Sub and others.
40
<PAGE> 47
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after approval of the
matters presented in connection with the Merger by the shareholders of
Co-Counsel:
(a) By mutual consent of the Board of Directors of Olsten
and Co-Counsel Board of Directors; or
(b) By either Olsten or Co-Counsel, if the Merger shall
not have been consummated by October 31, 1996 (provided that the right to
terminate this Agreement under this Section 8.1(b) shall not be available to
any party whose failure to fulfill any obligation hereunder has been the cause
of or resulted in the failure of the Merger to occur on or before such date);
or
(c) By either Olsten or Co-Counsel, if there has been a
material breach of any representation, warranty, covenant or agreement on the
part of the other set forth in this Agreement, which breach has not been cured
within fifteen (15) Business Days following receipt by the breaching party of
notice of such breach, or if a court of competent jurisdiction or governmental
regulatory or administrative agency or commission having proper jurisdiction
and authority thereof shall have issued an order, decree or ruling (which
order, decree or ruling the parties hereto shall use their best efforts to
lift) prohibiting the transactions contemplated by this Agreement and such
order, decree or ruling shall have become final and non-appealable; or
(d) By Olsten, if a Trigger Event shall have occurred; or
(e) By Olsten or Co-Counsel, if the Co-Counsel Vote shall
not have been obtained by reason of the failure to obtain the required vote at
a duly held meeting of shareholders or at any adjournment thereof; or
(f) By Co-Counsel, if Co-Counsel receives from any person
other than Olsten or its affiliates an offer with respect to an Acquisition
Proposal and the Co-Counsel Board of Directors so terminates in good faith,
based upon the advice of its outside legal counsel, that such termination is
required in the exercise of its fiduciary duties to the holders of Co-Counsel
Common Stock under applicable law.
41
<PAGE> 48
(g) By Olsten or Co-Counsel, if (i) Co-Counsel shall have
not received the Fairness Opinion prior to the earlier of (x) June 3, 1996 and
(y) the date that the S-4 is ready for filing with the SEC or (ii) the Fairness
Opinion shall have been withdrawn, modified or revoked.
Section 8.2 Effect of Termination. In the event of termination of
this Agreement as provided in Section 8.1, this Agreement shall forthwith
become void and there shall be no obligations on the part of a party hereto or
their respective directors or officers except for obligations of a party (but
not its officers or directors) (a) with respect to this Section 8.2, the second
and third sentences of Section 6.4 and Sections 6.10 and 6.11 and (b) to the
extent that such termination results from the willful breach by a party hereto
of any of its representations, warranties, covenants or agreements, in each
case, as set forth in this Agreement, except as otherwise provided in Section
9.7.
Section 8.3 Amendment. This Agreement may only be amended by the
parties hereto, prior to the Effective Time, in accordance with applicable law;
provided, however, that, after approval of this Agreement by the shareholders
of Co-Counsel under the TBCA, no amendment may be made which would require
further approval by such shareholders without such further approval. This
Agreement may not be amended except by an instrument in writing signed on
behalf of the parties hereto.
Section 8.4 Extension; Waiver. At any time prior to the Effective
Time, any party hereto may, to the extent legally allowed, (a) extend the time
for the performance of any of the obligations or other acts of the other
parties hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and
(c) waive compliance with any of the agreements or conditions contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party to be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations, Warranties, Covenants
and Agreements. The representations, warranties, covenants and agreements in
this Agreement shall not survive beyond the Effective Time. This Section 9.1
shall not limit any covenant or agreement of any party hereto which by its
express terms contemplates performance after the Effective Time.
42
<PAGE> 49
Section 9.2 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made upon receipt, if made or given by hand delivery, telecopier or
facsimile transmission (electronically confirmed), or upon receipt by
registered or certified mail (postage prepaid, return receipt requested) at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Olsten:
William P. Costantini, Esq.
Senior Vice President and General Counsel
Olsten
175 Broad Hollow Road
Melville, New York 11747
(516) 844-7250 (telephone)
(516) 844-7266 (telecopier)
with a copy to:
Marjorie Sybul Adams, Esq.
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
(212) 626-0861 (telephone)
(212) 626-0799 (telecopier)
(b) if to Co-Counsel:
Joseph A. Turano, III
President
Co-Counsel, Inc.
3 Riverway, Suite 1140
Houston, TX 77056
(713) 961-5552 (telephone)
(713) 961-9133 (telecopier)
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<PAGE> 50
with a copy to:
Rick Wittenbraker, Esq.
Bracewell & Patterson, L.L.P.
711 Louisiana Street
Houston, Texas 77002
713-223-2900 (telephone)
713-221-1212 (telecopier)
Section 9.3 Interpretation; Certain Definitions. When a reference is
made in this agreement to Sections, such reference shall be to a Section of
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. Whenever
the word "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation". The term
"Material Adverse Effect" shall mean with respect to Olsten or Co-Counsel, as
the case may be, an effect of such magnitude on Olsten or Co-Counsel, as the
case may be, that is or that can reasonably be expected to be materially
adverse to the business, results of operations or financial condition of Olsten
or Co-Counsel, as the case may be. The phrase "made available" in this
Agreement shall mean that the information referred to has been made available
if requested by the party to whom such information is to be made available.
Any reference to "the knowledge of" Co-Counsel or Olsten, as applicable, shall
be deemed to refer to (a) in the case of Olsten, to the actual knowledge of any
of its executive officers set forth in Section 9.3 of the Olsten Disclosure
Schedule and (b) in the case of Co-Counsel, to the actual knowledge of any of
its executive officers set forth in Section 9.3 of the Co-Counsel Disclosure
Schedule.
Section 9.4 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood
that all parties need not sign the same counterpart.
Section 9.5 Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership. This Agreement (including the documents and the instruments
referred to herein) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof. Except as otherwise provided in Section
6.9, 6.12 and 6.15, this Agreement is not intended to
44
<PAGE> 51
confer upon any person other than the parties hereto any rights or remedies
hereunder. The parties hereby acknowledge that no party shall have the right
to acquire or shall be deemed to have acquired shares of common stock of the
other party pursuant to the Merger until consummation thereof.
Section 9.6 Governing Law. Except to the extent that the laws of the
State of Texas or the State of Delaware are mandatorily applicable to the
Merger, this Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof. EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
ACTIONS OF OLSTEN, CO-COUNSEL, OR MERGER SUB IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
Section 9.7 No Remedy in Certain Circumstances. Each party agrees
that, should any court or other competent authority hold any provision of this
Agreement or part hereof to be null, void or unenforceable, or order any party
to take any action inconsistent herewith or not to take an action consistent
herewith or required hereby, the validity, legality and enforceability of the
remaining provisions and obligations contained or set forth herein shall not in
any way be affected or impaired thereby, unless the foregoing inconsistent
action or the failure to take an action makes the Agreement impossible to
perform in which case this Agreement shall terminate pursuant to Article VIII
hereof. Except as otherwise contemplated by this Agreement, to the extent that
a party hereto took an action inconsistent herewith or failed to take action
consistent herewith or required hereby pursuant to an order or judgment of a
court or other competent authority, such party shall incur no liability or
obligation unless such party did not in good faith seek to resist or object to
the imposition or entering of such order or judgment.
Section 9.8 Publicity. The initial press release relating to this
Agreement shall be a joint press release mutually satisfactory to the parties,
and thereafter Co-Counsel and Olsten shall, subject to their respective legal
obligations (including requirements of stock exchanges and other similar
regulatory bodies), consult with each other and use their reasonable efforts to
agree upon the text of any press release before issuing any such press release
or otherwise making public statements with respect to the transactions
contemplated hereby and in making any filings with any Governmental Entity or
with any national securities exchange with respect thereto.
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<PAGE> 52
Section 9.9 Assignment. Except as expressly provided in this
Agreement, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the
other parties. 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.
Section 9.10 Specific Performance. The parties acknowledge that
money damages are not an adequate remedy for violations of this Agreement and
that any party may, in its sole discretion, apply to a court of competent
jurisdiction for specific performance or injunctive or such other relief as
such court may deem just and proper in order to enforce this Agreement or
prevent any violation hereof and, to the extent permitted by applicable law,
each party waives any objection to the imposition of such relief.
Section 9.11 Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law
or in equity shall be cumulative and not alternative, and the exercise or
beginning of the exercise of any thereof by any party shall not preclude the
simultaneous or later exercise of any other such right, power or remedy by such
party.
46
<PAGE> 53
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement and Plan of Merger to be executed on May 28, 1996, by the respective
officers thereunto duly authorized.
OLSTEN CORPORATION
By: /s/ ANTHONY J. PUGLISI
--------------------------------
Title: Senior Vice President
LAWYERS ACQUISITION CORP.
By: /s/ ANTHONY J. PUGLISI
--------------------------------
Title: Senior Vice President
CO-COUNSEL, INC.
By: /s/ JOSEPH A. TURANO, III
--------------------------------
Title: President
47
<PAGE> 1
EXHIBIT 99.2
VOTING AGREEMENT
VOTING AGREEMENT, dated May 28, 1996, between Olsten Corporation, a
Delaware corporation ("Acquiror") and Lisa Moore Turano, a shareholder (the
"Shareholder") of Co-Counsel, Inc., a Texas corporation (the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Acquiror, the Company and Lawyers Acquisition Corp., a Texas
corporation ("Merger Sub"), are entering into an Agreement and Plan of Merger
(the "Merger Agreement"); and
WHEREAS, the Shareholder is the record and beneficial owner of
1,500,000 shares of the Company's Common Stock, par value $.01 per share (the
"Block Shares");
WHEREAS, approval of the Merger Agreement and the Merger by the
Company's shareholders is a condition to the consummation of the Merger (as
defined in the Merger Agreement); and
WHEREAS, as a condition to its entering into the Merger Agreement,
Acquiror has required that the Shareholder agree, and the Shareholder has
agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
Section 1. Voting Agreement and Grant of Proxy.
(a) The Shareholder hereby agrees that at any meeting of the
shareholders of the Company, however called, and in connection with any action
of the shareholders of the Company, the Shareholder shall vote the Block Shares
and any other voting securities of the Company, whether heretofore or hereafter
issued, which are held of record or beneficially by the Shareholder; (i) in
favor of the Merger and (ii) against any proposal for any recapitalization,
merger (other than the Merger), sale of assets or other business combination
between the Company and any other person or entity (other than Acquiror or
Merger Sub) or any other action or agreement that Acquiror notifies the
Shareholder in writing before any vote could result in a breach of any
covenant, representation or warranty or any other obligation or agreement of
the
<PAGE> 2
Company under the Merger Agreement or which could result in any of the
conditions to the Merger Agreement not being fulfilled.
(b) Except as provided in this Section 1, the Shareholder hereby
agrees that he or she shall not, and shall not offer or agree to, sell,
transfer, tender, assign, pledge or otherwise dispose of, or grant any proxies
with respect to, the Block Shares, or enter into any contract, option or other
arrangement or understanding with respect to the sale, assignment, pledge or
other disposition, directly or indirectly, of the Block Shares or other voting
securities of the Company, whether heretofore or hereafter issued, which are
held of record or beneficially by the Shareholder.
(c) The Shareholder, by this Agreement, with respect to the Block
Shares and any other voting securities of the Company, whether heretofore or
hereafter issued, which are held of record or beneficially by the Shareholder,
does hereby constitute and appoint Acquiror and Merger Sub, or any nominee of
Acquiror and Merger Sub, with full power of substitution, from the date hereof
to the earlier to occur of termination of this Agreement or the Effective Time,
as his or her true and lawful attorney and proxy ("Proxy"), for and in the
name, place and stead of the Shareholder, to demand that the Secretary of the
Company call a special meeting of the shareholders of the Company for the
purpose of considering any actions related to the Merger Agreement and the Plan
of Merger (as defined in the Merger Agreement) and to vote each of the Block
Shares and any other voting securities of the Company, whether heretofore or
hereafter issued, which are held of record or beneficially by the Shareholder,
at every annual, special or adjourned meeting of the shareholders of the
Company, including the right to sign his or her name (as shareholder) to any
consent, certificate or other document relating to the Company that the law of
the State of Texas may permit or require: (i) in favor of the Plan of Merger
and the Merger Agreement and (ii) against any proposal for any
recapitalization, merger (other than the Plan of Merger), sale of assets or
other business combination between the Company and any other person or entity
(other than Acquiror or Merger Sub) or any other action or agreement that
Acquiror notifies the Shareholder in writing before any vote could result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which could result in
any of the conditions to the Merger Agreement not being fulfilled.
(d) THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND COUPLED
WITH AN INTEREST. The Shareholder acknowledges receipt and review of a copy of
the Merger Agreement. The Shareholder hereby revokes all proxies heretofore
made by him or her that are inconsistent with this Section 1.
(e) The Shareholder shall perform such further acts and execute
such further documents and instruments as may reasonably be required to vest in
Acquiror
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<PAGE> 3
and Merger Sub the power to carry out and give effect to the provisions of this
Agreement.
(f) The Shareholder agrees that he or she will not vote any of the
Block Shares or any other voting securities of the Company, whether heretofore
or hereafter issued, which are held of record or beneficially by the
Shareholder, at any annual, special or adjourned meeting of the shareholders of
the company, including the right to sign his or her name (as shareholder) to
any consent, certificate or other document relating to the Company that the law
of the State of Texas may permit or require, in any manner that is intended, or
could reasonably be expected, to impede, interfere with, delay, postpone or
materially adversely affect the transactions contemplated by the Merger
Agreement.
(g) The Company will cause each certificate of the Shareholder
evidencing the Block Shares outstanding during the period that this Agreement
is in effect to bear a legend in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE SOLD, EXCHANGED OR OTHERWISE TRANSFERRED OR
DISPOSED OF EXCEPT IN COMPLIANCE WITH THE TERMS
AND CONDITIONS OF AN AGREEMENT DATED MAY 24, 1996,
AS IT MAY BE AMENDED, AMONG ACQUIROR, THE COMPANY
AND LAWYERS ACQUISITION CORP. AND THE REGISTERED
HOLDER OF THIS CERTIFICATE, A COPY OF WHICH IS ON
FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
ISSUER.
Section 2. Term of Agreement. It is a condition precedent to the
effectiveness of this Agreement that the Merger Agreement shall have been
executed and delivered. If the Merger Agreement is terminated in accordance
with its terms, this Agreement shall terminate and be of no further force or
effect and the parties hereto shall have no further obligations or liability
hereunder, except for any rights Acquiror may have in respect of any breach by
the Shareholder of his or her obligations hereunder.
Section 3. Representations and Warranties of the Shareholder. The
Shareholder represents and warrants to Acquiror that:
(a) The Shareholder is the record owner of the Block Shares and the
Block Shares represent all of the Company Common Stock or other voting
securities of the Company owned beneficially or of record by the Shareholder;
-3-
<PAGE> 4
(b) The Shareholder has full legal power and authority to execute and
deliver this Agreement;
(c) The Block Shares are free and clear of all voting trust, voting
agreement, proxies or similar arrangements; and
(d) The Shareholder has duly executed and delivered this Agreement.
Section 4. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state thereof having jurisdiction, this being in addition
to any other remedy to which they are entitled at law or in equity.
Section 5. Notices. All notices, requests, claims, demands and other
communications hereunder shall be effective upon receipt, shall be in writing
and shall be delivered in person, by overnight courier service, or by mail
(registered or certified mail, postage prepaid, return receipt requested) to
the Shareholder at the address set forth below the Shareholder's name on the
signature page hereof and to the Company as set forth in the Merger Agreement
or to such other address as any party may have furnished to the other in writing
in accordance herewith.
Section 6. Binding Effect. This Agreement shall inure to the benefit
of and, subject to applicable law, be binding upon the parties hereto and their
respective heirs, personal representatives, successors and assigns.
Section 7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without giving
effect to the principles of conflict of laws thereof.
Section 8. Counterparts. This Agreement may be executed in two
counterparts, each of which shall be an original, but which together shall
constitute one and the same Agreement.
Section 9. Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction hereof.
Section 10. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or
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<PAGE> 5
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
Section 11. Amendment; Waiver. No amendment or waiver of any
provision of this Agreement or consent to departure therefrom shall be
effective unless in writing and signed by Acquiror and the Shareholder, in the
case of an amendment, or by the party which is the beneficiary of any such
provision, in the case of a waiver or a consent to departure therefrom.
Section 12. Entire Agreement. This Agreement set forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, covenants, arrangements, communications,
representations and warranties, whether oral or written, by either party with
respect thereto.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto all as of the day and year first above written.
OLSTEN CORPORATION
By: /s/ ANTHONY J. PUGLISI
------------------------------
Name: Anthony J. Puglisi
Title: Senior Vice President
/S/ LISA MOORE TURANO
---------------------------------
LISA MOORE TURANO
-5-
<PAGE> 6
VOTING AGREEMENT
VOTING AGREEMENT, dated May 28, 1996, between Olsten Corporation, a
Delaware corporation ("Acquiror") and Donald Sanders, a shareholder (the
"Shareholder") of Co-Counsel, Inc., a Texas corporation (the "Company").
WITNESSETH:
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Acquiror, the Company and Lawyers Acquisition Corp., a Texas
corporation ("Merger Sub"), are entering into an Agreement and Plan of Merger
(the "Merger Agreement"); and
WHEREAS, the Shareholder is the record and beneficial owner of
628,000 shares of the Company's Common Stock, par value $.01 per share (the
"Block Shares");
WHEREAS, approval of the Merger Agreement and the Merger by the
Company's shareholders is a condition to the consummation of the Merger (as
defined in the Merger Agreement); and
WHEREAS, as a condition to its entering into the Merger Agreement,
Acquiror has required that the Shareholder agree, and the Shareholder has
agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other
good and valuable consideration given to each party hereto, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Voting Agreement and Grant of Proxy.
(a) The Shareholder hereby agrees that at any meeting of the
shareholders of the Company, however called, and in connection with any action
of the shareholders of the Company, the Shareholder shall vote the Block Shares
and any other voting securities of the Company, whether heretofore or hereafter
issued, which are held of record or beneficially by the Shareholder: (i) in
favor of the Merger and (ii) against any proposal for any recapitalization,
merger (other than the Merger), sale of assets or other business combination
between the Company and any other person or entity (other than Acquiror or
Merger Sale) or any other action or agreement that Acquiror notifies the
Shareholder in writing before any vote could result in a breach of any
covenant, representation or warranty or any other obligation or agreement of
the Company under the Merger Agreement or which could result in any of the
conditions to the Merger Agreement not being fulfilled.
<PAGE> 7
(b) Except as provided in his Section 1, the Shareholder hereby agrees
that he or she shall not, and shall not offer or agree to, sell, transfer,
tender, assign, pledge or otherwise dispose of, or grant any proxies with
respect to, the Block Shares, or enter into any contract, option or other
arrangement or understanding with respect to he sale, assignment, pledge or
other disposition, directly or indirectly, of the Block Shares or other voting
securities of the Company, whether heretofore or hereafter issued, which are
held of record or beneficially by the Shareholder.
(c) The Shareholder, by this Agreement, with respect to the Block
Shares and any other voting securities of the Company, whether heretofore or
hereafter issued, which are held of record or beneficially by the Shareholder,
does hereby constitute and appoint Acquiror and Merger Sub, or any nominee of
Acquiror and Merger Sub, with full power of substitution, from the date hereof
to the earlier to occur of termination of this Agreement or the Effective Time,
as his or her true and lawful attorney and proxy ("Proxy"), for and in the
name, place and stead of the Shareholder, to demand that the Secretary of the
Company call a special meeting of the shareholders of the Company for the
purpose of considering any actions related to the Merger Agreement and the Plan
of Merger (as defined in the Merger Agreement) and to vote each of the Block
Shares and any other voting securities of the Company, whether heretofore or
hereafter issued, which are held of record or beneficially by the Shareholder,
at every annual, special or adjourned meeting of the shareholders of the
Company, including the right to sign his or her name (as shareholder) to any
consent, certificate or other document relating to the Company that the law of
the State of Texas may permit or require: (i) in favor of the Plan of Merger
and the Merger Agreement and (ii) against any proposal for any
recapitalization, merger (other than the Plan of Merger), sale of assets or
other business combination between the Company and any other person or entity
(other than Acquior or Merger Sub) or any other action or agreement that
Acquiror notifies the Shareholder in writing before any vote could result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which could result in
any of the conditions to the Merger Agreement not being fulfilled.
(d) THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND COUPLED
WITH AN INTEREST. The Shareholder acknowledges receipt and review of a copy of
the Merger Agreement. The Shareholder hereby revokes all proxies heretofore
made by him or her that are inconsistent with this Section 1.
(e) The Shareholder shall perform such further acts and execute
such further documents and instruments as may reasonably be required to vest in
Acquiror and Merger Sub the power to carry out and give effect to the
provisions of this Agreement.
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<PAGE> 8
(f) The Shareholder agrees that he or she will not vote any of the
Block Shares or any other voting securities of the Company, whether heretofore
or hereafter issued, which are held of record or beneficially by the
Shareholder, at any annual, special or adjourned meeting of the shareholders of
the Company, including the right to sign his or her name (as shareholder) to
any consent, certificate or other document relating to the Company that the law
of the State of Texas may permit or interfere with, delay, postpone or
materially adversely affect the transactions contemplated by the Merger
Agreement.
(g) The Company will cause each certificate of the Shareholder
evidencing the Block Shares outstanding during the period that this Agreement
is in effect to bear a legend in the following form:
THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE SOLD, EXCHANGED
OR OTHERWISE TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE TERMS AND
CONDITIONS OF AN AGREEMENT DATED
MAY 24, 1996, AS IT MAY BE AMENDED,
AMONG ACQUIROR, THE COMPANY AND
LAWYERS ACQUISITION CORP. AND THE
REGISTERED HOLDER OF THIS CERTIFICATE,
A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
EXECUTIVE OFFICES OF THE ISSUER.
Section 2. Term of Agreement. It is a condition precedent to the
effectiveness of this Agreement that the Merger Agreement shall have been
executed and delivered. If the Merger Agreement is terminated in accordance
with its terms, this agreement shall terminate and be of no further force or
effect and the parties hereto shall have no further obligations or liability
hereunder, except for any rights Acquiror may have in respect of any breach by
the Shareholder of his or her obligations hereunder.
Section 3. Representations and Warranties of the Shareholder. The
Shareholder represents and warrants to Acquiror that:
(a) The Shareholder is the record owner of the Block Shares and the
Block Shares represent all of the Company Common Stock or other voting
securities of the Company owned beneficially or of record by the Shareholder;
(b) The Shareholder has full legal power and authority to execute
and deliver this agreement;
-3-
<PAGE> 9
(c) The Block Shares are free and clear of all voting trust,
voting agreement, proxies or similar arrangements; and
(d) The Shareholder has duly executed and delivered this
Agreement.
Section 4. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state thereof having jurisdiction, this being in addition
to any other remedy to which they are entitled at law or in equity.
Section 5. Notices. All notices, requests, claims, demands and
other communications hereunder shall be effective upon receipt, shall be in
writing and shall be delivered in person, by overnight courier service, or by
mail (registered or certified mail, postage prepaid, return receipt requested)
to the Shareholder at the address set forth below the Shareholder's name on the
signature page hereof and to the Company as set forth in the Merger Agreement
or to such other address as any party may have furnished to the other in
writing in accordance herewith.
Section 6. Binding Effect. This Agreement shall inure to the benefit
of and, subject to applicable law, be binding upon the parties hereto and their
respective heirs, personal representatives, successors and assigns.
Section 7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without giving
effect to the principles of conflict of laws thereof.
Section 8. Counterparts. This Agreement may be executed in two
counterparts, each of which shall be an original, but which together shall
constitute one and the same Agreement.
Section 9. Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction hereof.
Section 10. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
-4-
<PAGE> 10
Section 11. Amendment; Waiver. No amendment or waiver of any
provision of this Agreement or consent to departure therefrom shall be
effective unless in writing and signed by Acquiror and the Shareholder, in the
case of an amendment, or by the party which is the beneficiary of any such
provision, in the case of a waiver or a consent to departure therefrom.
Section 12. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, covenants, arrangements, communications,
representations and warranties, whether oral or written, by either party with
respect thereto.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto all as of the day and year first above written.
OLSTEN CORPORATION
By: /s/ ANTHONY J. PUGLISI
---------------------------------------
Name: Anthony J. Puglisi
Title: Senior Vice President
/s/ DON A. SANDERS
------------------------------------------
DONALD SANDERS
-5-
<PAGE> 1
EXHIBIT 99.3
[OLSTEN CORPORATION LOGO]
CONTACTS: OLSTEN CO-COUNSEL
DAVID R. FLUHRER JOSEPH A. TURANO, III
Vice President- President and
Communications Chief Executive Officer
(516) 844-7590 (713) 961-5552
102761.1054@ JOSEPH G. MCDEVITT
compuserve.com Vice President-
ANTHONY J. PUGLISI Finance
Senior Vice President- (713) 961-5552
Finance
(516) 844-7110
FOR IMMEDIATE RELEASE
OLSTEN CORPORATION ANNOUNCES AGREEMENT
TO ACQUIRE CO-COUNSEL, INC.
PROPOSED ACQUISITION OF LEGAL STAFFING FIRM
CONTINUES OLSTEN'S STRATEGIC EXPANSION OF SERVICES
MELVILLE, NY, May 28, 1996 -- Olsten Corporation (NYSE:OLS) today announced
that it has signed a definitive agreement to acquire Co-Counsel, Inc.
(Nasdaq:LEGL), a leading provider of temporary and full-time attorneys and
paralegals to law firms and corporate law departments.
The proposed transaction, valued at $13 million, would be accounted for
as a pooling of interests and is subject to satisfaction of customary
conditions, including approval by the shareholders of Co-Counsel and certain
regulatory filings. The merger is expected to be completed by the end of July.
Co-Counsel, founded in 1988, provides its legal services primarily through
offices in Houston, Dallas, Chicago, New York and Los Angeles. Each of its
offices will continue to be operated by practicing attorneys and paralegals who
exclusively serve law firms and corporate law departments. The company reported
1995 revenues of $8.7 million. Olsten is a world leader in staffing services
and North America's largest provider of home health care and related services.
"We expect Co-Counsel to be a cornerstone for the growth of our legal
staffing operations as we capitalize on opportunities to provide clients with
higher value-added legal services," said Frank N. Liguori, Olsten Chairman and
Chief Executive Officer. "The legal
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<PAGE> 2
2
staffing industry, although still in its infancy, is growing rapidly. The
acquisition of Co-Counsel fits well with our overall strategy of broadening our
range of services and our geographic network." Liguori said the transaction
would be neither accretive nor dilutive to Olsten's 1996 results.
"The Co-Counsel acquisition and future expansion of Olsten's legal services
will closely parallel development of our other Professional Services
businesses, under which we currently provide accounting, professional/technical
and paralegal staffing to large and small clients," said Olsten Staffing
Services President Richard A. Piske, III. "We anticipate that Co-Counsel's
legal and paralegal services will be made available to our current and
potential clients through its own growing network of offices in major
locations, and will be provided as part of the core offerings of Olsten
Staffing Services offices in many markets to give our customers the 'one-stop
shopping' they require."
"The opportunity to become part of Olsten Corporation," said Joseph A.
Turano, III, Co-Counsel's President and Chief Executive Officer, "allows us to
accelerate our expansion plans into new cities. Also, we believe this merger
provides a great opportunity and significant benefits to our shareholders, our
clients, our staff and contractors."
"As founder of Co-Counsel," said Lisa Moore Turano, "I am especially
pleased because this merger will enable the Company to accomplish its mission
to be the preeminent provider of contract legal professionals."
Primarily through Olsten Staffing Services, the Company operates 700
staffing or information technology offices in North America, South America and
Europe, providing assignment employees to business, industry and government, as
well as services for the design, development and maintenance of information
systems. Through its Olsten Kimberly QualityCare subsidiary, the Company's 600
health care offices in the United States and Canada provide health care network
management and caregivers for home health care and institutions, as well as
management services to hospital-based home health agencies.
Olsten Corporation, with a network of 1,300 offices on three continents,
employed 650,000 people and provided services to more than 500,000
client/patient accounts last year. The Company reported 1995 systemwide sales
of more than $3 billion and revenues of over $2.5 billion.
###
