Exhibit 99.2
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NORTEL December 28, 2005
2221 Lakeside Blvd.
Mail Stop: 99116A20
Richardson, TX 75082-4399
TEL 972-684-3591
FAX 972-684-3772
stoddar@nortel.com
WWW.NORTEL.COM
ALAN G. STODDARD
Vice President,
Carrier & Multimedia
Networks
Volt Delta Resources, LLC,
Volt Information Sciences, Inc.,
Volt Delta Resources Holdings, Inc.,
and Nuco I, Ltd.
560 Lexington Avenue
New York, NY 10022
RE: Letter of Agreement Approving the Company's Purchase of the Nortel
Membership Interest in the Company (hereinafter "LOA")
Ladies and Gentlemen:
Reference is hereby made to the Members' Agreement, dated as of August 2, 2004
(the "Members' Agreement"), by and among Volt Delta Resources, LLC, a Nevada
limited liability company (the "Company"), Nortel Networks Inc., a Delaware
corporation ("Nortel Networks"), Volt Delta Resources Holdings, Inc., a Nevada
corporation ("Holdings"), Nuco I, Ltd., a Nevada corporation ("Nuco"), and Volt
Information Sciences, Inc., a New York corporation ("VIS" and together with the
Company, Holdings, Nuco, and Nortel Networks, the "Members"). Capitalized terms
used herein but not defined shall have the meanings ascribed to such terms in
the Members' Agreement.
As provided for in the Members' Agreement, Nortel Networks beneficially owns in
the aggregate Membership Interests representing twenty-four percent (24%) of the
issued and outstanding Membership Interests of the Company (the "Nortel Networks
Membership Interest") and VIS beneficially owns in the aggregate Membership
Interests representing seventy-six percent (76%) of the issued and outstanding
Membership Interests of the Company and Holdings is the record holder of such
Membership Interests beneficially owned by VIS.
Article VI of the Members Agreement provides that a) at any time following (i)
the second (2nd) anniversary of the Closing Date or (ii) upon the occurrence of
a Termination Event (A) Nortel Networks shall have an option to require the
Company to purchase from Nortel Networks all of Nortel Networks' Membership
Interests and (B) the Company shall have an option to purchase all of Nortel
Networks' Membership Interests. Notwithstanding the foregoing, the Members have
agreed, on the terms and conditions set out below, that the Company shall
purchase from Nortel Networks the Nortel Networks Membership Interest in the
Company prior to the second (2nd) anniversary of the Closing Date or the
occurrence of a Termination Event.
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Therefore, this LOA is binding upon the Members and confirms the following
agreements and understandings of the Members, on behalf of themselves and their
respective affiliates and subsidiaries with respect to the Members' Agreement:
1. Acceleration and Exercise of Put Option.
a. Purchase and Sale of Nortel Networks Membership Interests.
Notwithstanding Article IV and VI of the Members' Agreement, and in
lieu of the terms and conditions described in Sections 6.3 and 6.4 of
the Members Agreement on the terms and subject to the conditions set
forth in this LOA, on the New Closing Date (as defined below), Nortel
Networks hereby sells to the Company (hereinafter the "Buyer"), and
Buyer hereby purchases from Nortel Networks, all of the Nortel
Networks Membership Interests including the Dividend Obligation
(defined below) for an aggregate purchase price equal to $US
61,750,000 (hereinafter the "Purchase Price").
b. Payment of Purchase Price Subject to Section 1(c) below, Buyer shall
pay Nortel Networks the Purchase Price in immediately available funds
by wire transfer to an account designated by Nortel Networks
(hereinafter the "Nortel Account" and as defined below) as follows:
i. US $25,000,000 shall be paid on December 28, 2005 (hereinafter
the "New Closing Date"), concurrent with the execution of this
LOA (hereinafter the "Initial Payment") by the Buyer to Nortel
Networks; and
ii. US $36,750,000 shall be paid on February 15, 2006 (hereinafter
the "Final Payment") by the Buyer to Nortel Networks subject to
the timely satisfaction by Nortel Networks of its obligations in
Section 1(c)(iii).
c. Settlement of Purchase and Sale of the Nortel Networks Membership
Interests.
i. The closing of the sale and purchase of the Nortel Networks
Membership Interest shall take place on December 28, 2005 (the
"New Closing Date"), subject to the satisfaction of the
obligations set forth in Section 1(b)(i) and 1(c)(ii) and the
execution of this LOA, execution of and any payment of any monies
due under the Commercial Agreement by and between Buyer and
Nortel Networks dated as of the even date hereof ("Commercial
Agreement"), and execution of the Note (as defined below) dated
as of even date hereof.
ii. On the New Closing Date: (1) Buyer (or its designee) shall
deliver to Nortel Networks the Initial Payment in accordance with
Section 1(b)(i) above and an executed US $36,750,000 promissory
note (the "Note"); and (2) the Members shall execute and deliver,
and take such other action as shall be reasonably necessary to
consummate the purchase and sale of the Nortel Networks
Membership Interests, so that from the date hereof Nortel
Networks shall no longer own any Membership Interests in the
Company, although Nortel Networks shall have a security interest
therein as set forth in the Note; and
iii. No later than ten (10) business days from the date hereof Nortel
Networks shall either (A) deliver to Buyer (or its designee)
certificates (together with duly executed instruments of transfer
in favor of Buyer) representing all of the Nortel Networks
Membership Interests or (B), in accordance with Section 8.2 of
the Operating Agreement, deliver an affidavit to the Board of
Managers of the Company alleging that the certificates
representing the Nortel Networks Membership Interests (the
"Certificates") have been lost and, if required by the Board of
Managers, give the Company an indemnity against any third party
claims against the Company with respect to the Certificates.
d. Accumulated Distribution; Purchase Price Allocation. It is understood
and agreed that on the New Closing Date, the Nortel Networks
Membership Interests shall be purchased and sold hereunder together
with all related rights to Excess Cash under Section 5.7 of the
Members' Agreement for all periods (the "Dividend Obligation"), and
that, as of the New Closing Date, Nortel Networks shall no longer have
any Claim (as defined below) of any kind with respect to such Dividend
Obligation or with respect to the Exit Payment, Excess Cash, the
purchase price and all dividends, distributions or excess cash under
the Members Agreement except for the Final Payment, the Relationship
Agreement Payment, and as provided in the Note. Buyer and Nortel
Networks agree that the Purchase Price shall be allocated between the
purchase of the Nortel Networks Membership Interests and the payment
of such Dividend Obligation as set forth on Schedule A (hereinafter
the "Allocation"). Buyer and Nortel Networks agree that (i) they shall
file all tax returns and forms consistent with such Allocation, (ii)
in the event that the United States Internal Revenue Service or any
other taxing authority disputes the Allocation, Nortel Networks or
Buyer, as the case may be, shall promptly notify the other party of
the nature of such dispute, and shall cooperate in good faith in order
to preserve the effectiveness of the Allocation, and (iii) for all tax
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purposes, Buyer and Nortel Networks shall report the transactions
contemplated by this letter agreement in a manner consistent with the
terms of this letter agreement and the Allocation.
e. Waiver. Each Member hereby consents to the transfer of the Nortel
Networks Membership Interests in accordance with this Section 1, and
waives any tag-along or other similar or dissimilar rights such Member
might have under the Members' Agreement in connection with the
transfer of the Nortel Networks Membership Interest to the Company.
f. Buyer Obligations. In accordance with Section 4.3 of the Members'
Agreement and effective as of the New Closing Date, Buyer hereby
unconditionally agrees to be bound by, and to comply fully with the
provisions of, the Members' Agreement applicable to the Nortel
Networks Membership Interests.
g. Release. Effective as of the New Closing Date, but subject to Final
Payment, except as expressly provided for in this LOA each Member
hereby knowingly and voluntarily releases and forever discharges the
other Members and their affiliates, and their respective stockholders,
officers, directors, employees, agents, successors and assigns
(hereinafter the "Releasees") from any and all contracts, agreements,
claims, demands, proceedings, liabilities, allegations, causes of
action, orders, obligations, debts, damages, costs, attorneys' fees
and expenses whatsoever, known or unknown, suspected or unsuspected,
fixed or contingent, both at law and in equity (collectively,
"Claims"), which such Member or any of its affiliates has, has ever
had or may hereafter have against the respective Releasees arising
prior to the New Closing Date, or on account of or arising out of any
matter, cause or event occurring prior to the New Closing Date, but in
each case only in connection with the Nortel Networks Membership
Interests, the interests of Nortel Networks in the Company, the
Membership Interests, the establishment of the Company, the Members'
Agreement or the Operating Agreement. Effective as of the New Closing
Date, each Member, hereby irrevocably covenants to refrain from,
directly or indirectly, asserting any Claim or demand, or commencing,
instituting or causing to be commenced, any proceeding of any kind
against any other Member, based upon any matter purported to be
released hereby.
h. The Company may purchase and may use any of its Excess Cash, cash on
hand or other assets to make the payments provided for herein and to
acquire the shares of varetis solutions GmbH.
i. Until the Final Payment, the Nortel Networks Manager shall remain on
the Board and Article 2 of the Members Agreement, including but not
limited to Nortel Networks rights under Section 2.2 of the Members
Agreement entitled, "Company Matters Requiring Super-Majority
Approval," shall continue to be in full force and effect.
j. Upon the Final Payment and notwithstanding Section 6.1(b) of the
Members' Agreement, the Members Agreement shall terminate in
accordance with Section 6.2(a), except that (i) Sections 5.4, 5.11,
5.12, and Article VII shall survive termination in accordance with the
terms hereof and thereof; and (ii) any covenant, agreement,
undertaking, Liability or obligation in Sections 2.4(g) and (h) shall
survive in full force and effect until the expiration of any
applicable statutory limitation period (giving effect to any waiver,
mitigation or extension thereof).
2. Relationship Agreement Payment. Pursuant to Section 5.11 of the Members'
Agreement, VIS hereby agrees to pay Nortel Networks $2,000,000 (the
"Relationship Payment") on February 2, 2006 in immediately available funds,
by wire transfer to the Nortel Account.
3. Resolution of Commercial Disputes. In addition to that set forth in the
Commercial Agreement, Buyer and Nortel Networks hereby agree to enter into
good faith negotiations to resolve any outstanding commercial disputes
between the parties prior to and after the New Closing Date, and to execute
releases, as necessary, to evidence the resolution of such disputes.
4. "Nortel Account" means the account listed in Schedule "A" hereto.
5. Representations and Warranties. Nortel Networks represents and warrants
that the Nortel Networks Membership Interest has not been sold, assigned,
pledged, hypothecated, mortgaged; nor is the Nortel Membership Interest
subject to any liens, claims, hypothecation or any other claim by any third
party; and Nortel Networks holds full and clear title to the Nortel
Networks Membership Interest; and Nortel Networks will defend the Nortel
Membership Interest against all claims and demands of all persons claiming
the same or any interest therein on or prior to the date hereof.
6. Company Covenants.
a. As of the New Closing Date, Buyer shall and will be the owner of the
Nortel Networks Membership Interest free from any adverse claim,
security interest, encumbrance, lien, charge, or other right, title or
interest of any person other than, the security interest of Nortel
Networks set forth in the Note ("Liens") and covenants that at all
times prior to the payment of the Final Payment the Nortel Networks
Membership Interests will be and remain free of
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all Liens; and Buyer will defend the Nortel Networks Membership
Interests against all claims and demands of all persons at any time
claiming the same or any interest therein, from and after the date
hereof.
b. Until the payment of the Final Payment: (i) Buyer will not enter into
or execute any security agreement or any financing statement covering
the Nortel Networks Membership Interests, other than those security
agreements and financing statements in favor of Nortel Networks, if
any, and further (ii) there will not be on file in any public office
any financing statement or statements (or any documents or papers
filed as such) covering the Nortel Networks Membership Interests other
than financing statements in favor of Nortel Networks, if any, unless
in any case the prior written consent of Nortel Networks shall have
been obtained.
7. Nortel Networks Indemnification. After the New Closing Date, Nortel
Networks shall indemnify and hold harmless the Company, its affiliates and
their respective directors, officers, employees, consultants, shareholders,
agents and representatives, and all successors and assigns of the foregoing
(collectively, the "Company Indemnified Parties") from and against, and
agrees to promptly defend any Company Indemnified Party from and reimburse
any Company Indemnified Party for, any and all losses which such Company
Indemnified Party may at any time suffer or incur, or become subject to, as
a result of the breach of any covenants, representations or warranties made
by Nortel Networks in or pursuant to this LOA, and/or the breach of this
LOA.
8. The Company Indemnification. After the New Closing Date, the Company shall
indemnify and hold harmless Nortel Networks, its affiliates and their
respective directors, officers, employees, consultants, shareholders,
agents and representatives, and all successors and assigns of the foregoing
(collectively, the "Nortel Indemnified Parties") from and against, and
agrees to promptly defend any Nortel Indemnified Party from and reimburse
any Nortel Networks Indemnified Party for, any and all losses which such
Nortel Indemnified Party may at any time suffer or incur, or become subject
to, as a result of the breach of any covenants, representations or
warranties made by the Company in or pursuant to this LOA, and/or the
breach of this LOA.
9. Attorneys' Fees. In any action, or proceeding brought to enforce any or all
rights under this LOA or related to this LOA, the prevailing party shall be
entitled to, in addition to any and all remedies at law and equity, its
reasonable attorney's fees and costs.
10. Miscellaneous.
(a) This LOA and, to the extent applicable, the Members' Agreement and the
Operating Agreement, constitute the entire agreement between the
Members with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral,
between the Members with respect to the subject matter hereof. Except
as otherwise expressly provided herein, this LOA shall not amend,
modify, alter or waive any rights or obligations of any Member or any
other person under any other previously executed document, contract or
agreement, including the Members' Agreement and the Operating
Agreement.
(b) This LOA shall not be assigned by a Member by operation of law or
otherwise without the prior written consent of each other Member.
Notwithstanding the foregoing, a Member may assign its rights under
this LOA to any of its affiliates without the consent of each other
Member, but such assignment shall not relieve such Member from its
obligations hereunder.
(c) This LOA may not be amended, changed, supplemented or otherwise
modified except by an instrument in writing signed on behalf of each
other Member.
(d) All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given in accordance with
Section 7.2 of the Members' Agreement.
(e) Whenever possible, each provision or portion of any provision of this
LOA will be interpreted in such manner as to be effective and valid
under applicable law but if any provision or portion of any provision
of this LOA is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction such
invalidity, illegality or unenforceability will not affect any other
provision or portion of any provision in such jurisdiction, and this
LOA will be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provision or portion of any
provision had never been contained herein.
(f) All rights, powers and remedies provided under this LOA or otherwise
available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise of any thereof by any Member
shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such Member.
(g) The failure of any Member to exercise any rights, power or remedy
provided under this LOA or otherwise available in respect hereof at
law or in equity, or to insist upon compliance by any other Member
hereto with its
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obligations hereunder, and any custom or practice of the Members at
variance with the terms hereof, shall not constitute a waiver by such
Member of its right to exercise any such or other right, power or
remedy or to demand such compliance.
(h) Except as otherwise provided in this LOA, this LOA shall be binding
upon and inure solely to the benefit of each Member, and nothing in
this LOA, express or implied, is intended to confer upon any other
person any rights or remedies of any nature whatsoever under or by
reason of this LOA.
(i) THIS LOA SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, EXCLUSIVE OF ITS RULES REGARDING CONFLICTS
OF LAWS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE MEMBERS
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
(j) The parties hereto consent to submit to the personal jurisdiction of
any state or federal court located in the City and County of New York,
State of New York with respect to any claim arising from this LOA and
agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court.
The Members irrevocably and unconditionally waive any objection to the
laying of venue of any such action in any such state or federal court,
and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such action brought in
any such court has been brought in an inconvenient forum.
(k) The descriptive headings used herein are inserted for convenience of
reference only and are not intended to be part of or to affect the
meaning or interpretation of this LOA.
(l) This LOA may be executed in counterparts, which together shall
constitute one instrument. Facsimiles of duly executed signature pages
are acceptable and shall be deemed to be originals.
Please confirm that the above correctly reflects our understandings and
agreements with respect to the foregoing matters by signing the enclosed copy of
this LOA and returning it to us.
Very truly yours,
NORTEL NETWORKS INC.
By /s/ Alan Stoddard
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Name: Alan Stoddard
Title: Vice President, Carrier and
Multimedia Networks
Accepted and Agreed:
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VOLT INFORMATION SCIENCES, INC.
By: /s/ Ronald Kochman
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Name: Ronald Kochman
Title: Vice President
NUCO I, LTD.
By: /s/ Jack Egan
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Name:Jack Egan
Title: Vice President
VOLT DELTA RESOURCES HOLDINGS, INC.
By: /s/ Jack Egan
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Name: Jack Egan
Title: Vice President
VOLT DELTA RESOURCES, LLC
By: /s/ Ronald Kochman
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Name: Ronald Kochman
Title: Vice President
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