EXHIBIT 2
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AGREEMENT AND PLAN OF MERGER
Dated as of October 5, 2001,
among
AQUENT, INC.,
JETELECTRO ACQUISITION CORP.
and
RENAISSANCE WORLDWIDE, INC.
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TABLE OF CONTENTS
Page
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ARTICLE I
The Merger.............................................................. 1
Section 1.01. The Merger............................................ 1
Section 1.02. Closing............................................... 1
Section 1.03. Effective Time........................................ 1
Section 1.04. Effects............................................... 1
Section 1.05. Articles of Organization and By-laws.................. 2
Section 1.06. Directors............................................. 2
Section 1.07. Officers.............................................. 2
ARTICLE II
Effect on the Capital Stock of the Constituent Corporations; Exchange of
Certificates........................................................... 2
Section 2.01. Effect on Capital Stock............................... 2
Section 2.02. Exchange of Certificates.............................. 3
ARTICLE III
Representations and Warranties of the Company........................... 5
Section 3.01. Organization, Standing and Power...................... 5
Section 3.02. Company Subsidiaries.................................. 5
Section 3.03. Capital Structure..................................... 5
Section 3.04. Authority; Execution and Delivery; Enforceability..... 6
Section 3.05. No Conflicts: Consents................................ 7
SEC Documents; Undisclosed Liabilities; Certain
Section 3.06. Agreements............................................ 8
Section 3.07. Information Supplied.................................. 9
Section 3.08. Absence of Certain Changes or Events.................. 9
Section 3.09. Taxes................................................. 10
Section 3.10. ERISA Compliance...................................... 10
Section 3.11. Litigation............................................ 12
Section 3.12. Compliance with Applicable Laws....................... 12
Section 3.13. Intellectual Property................................. 12
Section 3.14. Brokers; Fees and Expenses............................ 13
Section 3.15. Opinion of Financial Advisor.......................... 13
Section 3.16. Stock Options and Employee Stock Purchase Plan........ 13
Section 3.17. Accounts Receivable................................... 13
Section 3.18. Properties............................................ 13
Section 3.19. Government Contracts.................................. 13
Section 3.20. Books and Records..................................... 13
ARTICLE IV
Representations and Warranties of Parent and Sub........................ 14
Section 4.01. Organization, Standing and Power...................... 14
Section 4.02. Sub................................................... 14
Section 4.03. Authority; Execution and Delivery; Enforceability..... 14
Section 4.04. No Conflicts; Consents................................ 14
Section 4.05. Information Supplied.................................. 15
Section 4.06. Brokers............................................... 15
Section 4.07. Financial Ability to Perform.......................... 15
ARTICLE V
Covenants Relating to Conduct of Business................................ 15
Section 5.01. Conduct of Business.................................... 15
Section 5.02. No Solicitation by Company............................. 18
ARTICLE VI
Additional Agreements.................................................... 19
Section 6.01. Preparation of Proxy Statement; Stockholders Meeting... 19
Section 6.02. Access to Information; Confidentiality................. 20
Section 6.03. Reasonable Efforts; Notification....................... 20
Section 6.04. Benefit Plans.......................................... 21
Section 6.05. Indemnification; D&O Insurance, etc.................... 21
Section 6.06. Fees and Expenses...................................... 22
Section 6.07. Public Announcements................................... 23
Section 6.08. Actions Respecting Commitment Letters; Financing....... 23
Section 6.09. Rights Agreement....................................... 24
Section 6.10. Stockholder Litigation................................. 24
Section 6.11. Lease Termination...................................... 24
ARTICLE VII
Conditions Precedent..................................................... 24
Section 7.01. Conditions to Each Party's Obligation To Effect The
Merger................................................. 24
Section 7.02. Conditions Precedent to Parent's and Sub's
Obligations............................................ 25
Section 7.03. Conditions to Obligation of Company.................... 25
ARTICLE VIII
Termination, Amendment and Waiver........................................ 26
Section 8.01. Termination............................................ 26
Section 8.02. Procedure and Effect of Termination.................... 27
Section 8.03. Amendment.............................................. 27
Section 8.04. Extension; Waiver...................................... 27
Section 8.05. Procedure for Termination, Amendment, Extension or
Waiver................................................. 27
ARTICLE IX
General Provisions....................................................... 27
Section 9.01. Nonsurvival of Representations and Warranties.......... 27
Section 9.02. Notices................................................ 28
Section 9.03. Definitions............................................ 28
Section 9.04. Definitions Cross Reference Table...................... 29
Section 9.05. Interpretation......................................... 30
Section 9.06. Severability........................................... 31
Section 9.07. Counterparts........................................... 31
Section 9.08. Entire Agreement; No Third-Party Beneficiaries......... 31
Section 9.09. Governing Law.......................................... 31
Section 9.10. Assignment............................................. 31
Section 9.11. Enforcement............................................ 31
Section 9.12. Consents............................................... 31
Section 9.13. Headings............................................... 32
Section 9.14. Parent Guarantee....................................... 32
Exhibit A--Articles of Organization of Surviving Corporation
Company Disclosure Schedule
Buyer Disclosure Schedule
Schedule 5.01(a)(ix)--Prohibited Capital Expenditures
Schedule 6.08--Permitted Actions of Parent
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of October 5,
2001, among Aquent, Inc., a Massachusetts corporation ("Parent"), JetElectro
Acquisition Corp., a Massachusetts corporation ("Sub") and a wholly owned
Subsidiary (as defined in Section 9.03) of Parent, and Renaissance Worldwide,
Inc., a Massachusetts corporation (the "Company").
WHEREAS the respective Boards of Directors of Parent, Sub and the Company
have approved the acquisition of the Company by Parent on the terms and subject
to the conditions set forth in this Agreement;
WHEREAS a special committee of the Board of Directors of the Company
comprised of the Company's independent directors (the "Special Committee") has
unanimously approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS the respective Boards of Directors of Parent, Sub and the Company
have approved the merger (the "Merger") of Sub with and into the Company, on
the terms and subject to the conditions set forth in this Agreement, whereby,
subject to the exceptions set forth below, each issued share of Common Stock,
no par value per share, of the Company ("Company Common Stock") shall be
converted into the right to receive cash consideration as specified below;
WHEREAS Parent, Sub and the Company 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, the parties hereto agree as follows:
ARTICLE I
The Merger
Section 1.01. The Merger. On the terms and subject to the satisfaction or
waiver of the conditions set forth in this Agreement, and in accordance with
the Massachusetts Business Corporation Law (the "BCL"), Sub shall be merged
with and into the Company at the Effective Time (as defined in Section 1.03).
At the Effective Time, the separate corporate existence of Sub shall cease and
the Company shall continue as the surviving corporation (the "Surviving
Corporation"). The Surviving Corporation shall possess all the rights,
privileges, immunities, powers and franchises of the Company and Sub, and the
Surviving Corporation shall by operation of law become liable for all of the
debts, liabilities and duties of the Company and Sub. The name of the Surviving
Corporation shall continue to be Renaissance Worldwide, Inc. and the purpose
thereof shall be as set forth in Section 2 of the Articles of Organization of
the Surviving Corporation.
Section 1.02. Closing. The closing (the "Closing") of the Merger shall take
place at the offices of ▇▇▇▇ and ▇▇▇▇ LLP in Waltham, MA at 10:00 a.m. on the
second business day following the satisfaction (or, to the extent permitted by
Law, waiver by the appropriate parties) of the conditions set forth in Article
VII, or at such other place, time and date as shall be agreed in writing
between Parent and the Company. The date on which the Closing occurs is
referred to in this Agreement as the "Closing Date".
Section 1.03. Effective Time. Prior to the Closing, Parent shall prepare and
give the Company and its counsel the opportunity to review, and on the Closing
Date or as soon as practicable thereafter Parent shall file with the Secretary
of State of The Commonwealth of Massachusetts, articles of merger or other
appropriate documents (in any such case, the "Articles of Merger") executed in
accordance with the relevant provisions of the BCL and shall make all other
filings or recordings required under the BCL. The Merger shall become effective
at such time as the Articles of Merger are duly filed with such Secretary of
State, or at such other time as Parent and the Company shall agree and specify
in the Articles of Merger (the time the Merger becomes effective being the
"Effective Time").
Section 1.04. Effects. The Merger shall have the effects set forth in
Section 80 of the BCL.
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Section 1.05. Articles of Organization and By-laws.
(a) The Articles of Organization of the Company shall be amended and
restated at the Effective Time to read in the form of Exhibit A, and, as so
amended, such Articles of Organization shall be the Articles of
Organization of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable Law.
(b) Subject to Section 6.05, the By-laws of the Company as in effect
immediately prior to the Effective Time shall be the By-laws of the
Surviving Corporation until thereafter changed or amended as provided
therein or by applicable Law.
Section 1.06. Directors. At the Closing, Parent shall designate the
directors of the Surviving Corporation and such directors shall hold office
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
Section 1.07. Officers. At the Closing, Parent shall designate the officers
of the Surviving Corporation and such officers shall hold office until the
earlier of their resignation or removal or until their respective successors
are duly elected or appointed and qualified, as the case may be.
ARTICLE II
Effect on the Capital Stock of the Constituent Corporations; Exchange of
Certificates
Section 2.01. 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
Company Common Stock or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of capital
stock of Sub shall be converted into and become 5,000 fully paid and non-
assessable shares of common stock, no par value per share, of the Surviving
Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each share of
Company Common Stock that is owned directly by the Company, any Subsidiary
of the Company, Parent or Sub shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and no
other consideration shall be delivered or deliverable in exchange therefor.
(c) Conversion of Company Common Stock. Subject to Sections 2.01(b) and
2.01(d), each issued share of Company Common Stock shall be converted into
the right to receive $2.00 in cash, subject to adjustment for any stock
split, stock dividend or combination of stock that may occur from the date
hereof and prior to the Effective Time. The aggregate cash payable upon the
conversion of shares of Company Common Stock pursuant to this Section
2.01(c) is referred to as the "Merger Consideration". As of the Effective
Time, all such shares of Company Common Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall cease
to exist, and each holder of a certificate representing any such shares of
Company Common Stock shall cease to have any rights with respect thereto,
except the right to receive Merger Consideration upon surrender of such
certificate in accordance with Section 2.02, without interest.
(d) Appraisal Rights. Notwithstanding anything in this Agreement to the
contrary, shares ("Appraisal Shares") of Company Common Stock that are
outstanding immediately prior to the Effective Time and that are held by
any Person who is entitled to demand and properly demands appraisal of such
Appraisal Shares pursuant to, and who complies in all respects with,
Sections 86 through 97 of the BCL (the "Appraisal Provisions") shall not be
converted into Merger Consideration as provided in Section 2.01(c), but
rather the holders of Appraisal Shares shall be entitled to payment of the
fair value of such Appraisal Shares in accordance with the Appraisal
Provisions; provided, however, that if any such holder shall fail to
perfect or otherwise shall waive, withdraw or lose the right to appraisal
under the Appraisal
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Provisions, then the right of such holder to be paid the fair value of such
holder's Appraisal Shares shall cease and such Appraisal Shares shall be
deemed to have been converted as of the Effective Time into, and to have
become exchangeable solely for the right to receive, Merger Consideration
as provided in Section 2.01(c), without interest, upon surrender of such
certificate in accordance with the provisions of Section 2.02. Company
shall give Parent (i) prompt notice of any demand for payment of fair
market value received by Company, the withdrawal of any such demand, and
any other instrument served pursuant to the Appraisal Provisions and
received by Company and (ii) the opportunity to direct all negotiations and
proceedings with respect to any demand for payment of fair market value
under the Appraisal Provisions. Company shall not, except with the prior
written consent of Parent, make any payment with respect to any demand for
payment of fair market value or offer to settle or settle any such demand,
or agree to do any of the foregoing.
(e) Company Stock Options. Parent and the Company agree that, in
accordance with the provisions of the Company Stock Option Plans (as
defined in Section 3.16), each outstanding option to purchase Company
Common Stock under any Company Stock Option Plan shall either (i) be
terminated as of the Effective Time or (ii) from and after the Effective
Time entitle the holder thereof to receive, upon exercise in accordance
with the terms thereof (including but not limited to any terms with respect
to vesting), an amount in cash (less applicable withholding taxes) equal to
the product of (x) the number of shares of Company Common Stock previously
subject to such stock option multiplied by (y) the amount, if any, by which
$2.00 (subject to adjustment for any stock split, stock dividend or
combination of stock that may occur from the date hereof and prior to the
Effective Time) exceeds the per share exercise price of such stock option.
Parent and Company further agree that each outstanding option to purchase
the capital stock of GovConnect, Inc. pursuant to the GovConnect, Inc. 2000
Stock Incentive Plan shall be terminated as of the Effective Time in
accordance with the provisions of the GovConnect, Inc. 2000 Stock Incentive
Plan. In the event and to the extent that any Company Stock Option Plan
permits or requires the Company Board (or any committee thereof) to
exercise discretion with respect to outstanding stock options, the Company
Board (or such committee, as the case may be) will exercise such discretion
with the consent of Parent, which consent will not unreasonably be
withheld.
(f) Stockholder Loans. In the event that any stockholder of the Company
has outstanding loans from the Company as of the Effective Time, the
consideration payable to such stockholder, or his or its Affiliates,
pursuant to this Section 2.01 shall, to the extent permitted by applicable
law, be reduced by an amount equal to the outstanding principal plus
accrued interest of such stockholder's loans as of the Effective Time.
Section 2.02. Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Parent shall select a
bank or trust company in the United States, reasonably acceptable to the
Company, to act as paying agent (the "Paying Agent") for the payment of the
Merger Consideration upon surrender of certificates representing Company
Common Stock. Parent shall take all steps necessary to provide, or to
enable and cause the Sub to provide, to the Paying Agent prior to the
Effective Time cash necessary to pay for the shares of Company Common Stock
converted into the right to receive cash pursuant to Section 2.01(c) (such
cash being hereinafter referred to as the "Exchange Fund"). If for any
reason (including losses) the Exchange Fund is inadequate to pay the
amounts to which holders of shares of Company Common Stock shall be
entitled under Section 2.01(c), Parent shall take all steps necessary to
enable or cause the Surviving Corporation promptly to deposit in trust
additional cash with the Paying Agent sufficient to make all payments
required under Section 2.01(c), and Parent and the Surviving Corporation
shall in any event be liable for payment thereof. The Exchange Fund shall
not be used for any purpose except as expressly provided in this Agreement.
(b) Exchange Procedures. Promptly after the Effective Time (but in no
event later than five business days following such date), the Surviving
Corporation shall cause the Paying Agent to mail to each holder of record
of a certificate or certificates (the "Certificates") that immediately
prior to the Effective Time represented outstanding shares of Company
Common Stock whose shares were converted
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into the right to receive Merger Consideration pursuant to Section 2.01,
(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 Paying Agent and shall be in such
form and have such other provisions as Parent may reasonably specify), and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by
the Paying Agent, the holder of such Certificate shall be entitled to
receive in exchange therefor the amount of cash into which the shares of
Company Common Stock theretofore represented by such Certificate shall have
been converted pursuant to Section 2.01, and the Certificate so surrendered
shall forthwith be canceled. In the event of a transfer of ownership of
Company Common Stock that is not registered in the transfer records of the
Company, payment may be made to a Person other than the Person in whose
name the Certificate so surrendered is registered, if such Certificate
shall be properly endorsed or otherwise be in proper form for transfer and
the Person requesting such payment shall pay any transfer or other taxes
required by reason of the payment to a Person other than the registered
holder of such Certificate or establish to the satisfaction of Parent that
such tax has been paid or is not applicable. Until surrendered as
contemplated by this Section 2.02, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon
such surrender the amount of cash, without interest, into which the shares
of Company Common Stock theretofore represented by such Certificate have
been converted pursuant to Section 2.01. If any holder of shares of Company
Common Stock shall be unable to surrender such holder's Certificates
because such Certificates have been lost, mutilated or destroyed, such
holder may deliver in lieu thereof an affidavit and indemnity bond in form
and substance and with surety reasonably satisfactory to the Surviving
Corporation. No interest shall be paid or accrue on the cash payable upon
surrender of any Certificate.
(c) No Further Ownership Rights in Company Common Stock. The Merger
Consideration paid in accordance with the terms of this Article II upon
conversion of any shares of Company Common Stock shall be deemed to have
been paid in full satisfaction of all rights pertaining to such shares of
Company Common Stock, and after the Effective Time there shall be no
further registration of transfers on the stock transfer books of the
Surviving Corporation of shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, any certificates formerly representing shares of Company
Common Stock are presented to the Surviving Corporation or the Paying Agent
for any reason, they shall be canceled and exchanged as provided in this
Article II.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund that
remains undistributed to the holders of Company Common Stock for six months
after the Effective Time shall be delivered to Parent, upon demand, and any
holder of Company Common Stock who has not theretofore complied with this
Article II shall thereafter look only to Parent for payment of its claim
for Merger Consideration.
(e) No Liability. None of Parent, Sub, the Company or the Paying Agent,
nor any of their respective officers, directors, employees, agents or
counsel, shall be liable to any Person in respect of any cash from the
Exchange Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Law. If any Certificate has not been
surrendered prior to five years after the Effective Time (or immediately
prior to such earlier date on which Merger Consideration in respect of such
Certificate would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 3.05(b))), any such shares,
cash, dividends or distributions in respect of such Certificate shall, to
the extent permitted by applicable Law, become the property of the
Surviving Corporation, free and clear of all claims or interest of any
Person previously entitled thereto.
(f) Investment of Exchange Fund. The Paying Agent shall invest any cash
included in the Exchange Fund, as directed by Parent, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Parent.
(g) Withholdings. Parent shall be entitled to deduct and withhold from
the consideration otherwise payable to any holder of Company Common Stock
pursuant to this Agreement such amounts as may be
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required to be deducted and withheld with respect to the making of such
payment under the Code (as defined in Section 3.10(b)), or under any
provision of state, local or foreign tax Law. To the extent that amounts
are so withheld by the Surviving Corporation or Parent, as the case may be,
such withheld amounts shall be treated for all purposes of this Agreement
as having been paid to the holder of the shares of Company Common Stock in
respect of which such deduction and withholding was made by the Surviving
Corporation or Parent, as the case may be.
(h) Charges and Expenses. The Surviving Corporation shall pay all
charges and expenses, including those of the Paying Agent, in connection
with the exchange of cash for shares of Company Common Stock.
ARTICLE III
Representations and Warranties of the Company
Company represents and warrants to each of Parent and Sub that, except as
indicated in the applicable section of the Disclosure Schedule furnished by
Company to Parent prior to the execution of this Agreement (the "Company
Disclosure Schedule") corresponding to the Sections and subsections set forth
below:
Section 3.01. Organization, Standing and Power. Each of the Company and each
of its Subsidiaries (the "Company Subsidiaries") is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized and has full corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals, and
has made all filings, registrations and declarations, in each case whether
domestic or foreign, necessary to enable it to own, lease or otherwise hold its
properties and assets and to conduct its businesses as presently conducted, in
each case other than such franchises, licenses, permits, authorizations,
approvals, filings, registrations and declarations the lack of which,
individually and in the aggregate, has not had and would not reasonably be
expected to have a Company Material Adverse Effect (as defined in Section
9.03). The Company and each Company Subsidiary is duly qualified to do business
in each jurisdiction where the nature of its business or their ownership or
leasing of its properties make such qualification necessary except where the
failure to so qualify has not had and would not reasonably be expected to have
a Company Material Adverse Effect. The Company has made available to Parent
true and complete copies of the articles of organization of the Company, as
amended to the date of this Agreement (as so amended, the "Company Charter"),
and the by- laws of the Company, as amended to the date of this Agreement (as
so amended, the "Company By-laws"), and the comparable charter and
organizational documents of each Company Subsidiary, in each case as amended
through the date of this Agreement.
Section 3.02. Company Subsidiaries. The Company Disclosure Schedule lists
each Company Subsidiary and its jurisdiction of organization. All of the
outstanding shares of capital stock of each Company Subsidiary have been
validly issued and are fully paid and nonassessable and, except as set forth in
the Company Disclosure Schedule, are owned by the Company, free and clear of
all pledges, liens, charges, mortgages, encumbrances and security interests of
any kind or nature whatsoever except for those pledges, liens, charges,
mortgages, encumbrances and security interests that have not and would not
reasonably be expected to have a Company Material Adverse Effect (collectively,
"Liens").
Section 3.03. Capital Structure.
(a) The authorized capital stock of the Company consists of 99,000,000
shares of Company Common Stock and 99,000 shares of Series A Preferred
Stock, par value $0.10 per share (the "Series A Preferred Stock" and,
together with the Company Common Stock, the "Company Capital Stock"). At
the close of business on October 2, 2001: (i) 52,902,540 shares of Company
Common Stock were issued and outstanding, (ii) 5,192,812 shares of Company
Common Stock were held by the Company in its treasury, (iii) 4,128,909
shares of Company Common Stock were subject to outstanding options to
purchase
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Company Common Stock (the "Company Stock Options"), (iv) 1,182,168 shares
of Company Common Stock were reserved for issuance pursuant to the Company
Stock Purchase Plan and (v) 99,000 shares of Series A Preferred Stock were
reserved for issuance (but not issued or outstanding) in connection with
the rights (the "Company Rights") issued pursuant to the Rights Agreement
dated as of June 13, 2000 (as amended and in effect as of the date hereof,
the "Company Rights Agreement"), between the Company and Fleet National
Bank, as Rights Agent. Except as set forth above, at the close of business
on October 2, 2001, no shares of capital stock or other voting securities
of the Company were issued, reserved for issuance or outstanding. All
outstanding shares of Company Capital Stock are, and all such shares that
may be issued prior to the Effective Time will be when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject to
or issued in violation of any purchase option, call option, right of first
refusal, preemptive right, subscription right or any similar right under
any provision of the BCL, the Company Charter, the Company By-laws or any
Contract (as defined in Section 3.05(a)) to which the Company is a party or
otherwise bound;
(b) There are not any bonds, debentures, notes or other indebtedness of
the Company having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which holders
of Company Common Stock may vote ("Voting Company Debt");
(c) Except as set forth above or referred to in Section 3.16, and except
pursuant to the GovConnect, Inc. 2000 Stock Incentive Plan, as of the date
of this Agreement, there are not any options, warrants, rights, convertible
or exchangeable securities, "phantom" stock rights, stock appreciation
rights, stock-based performance units, commitments, Contracts, arrangements
or undertakings of any kind to which the Company or any Company Subsidiary
is a party or by which any of them is bound (i) obligating the Company or
any Company Subsidiary to issue or sell, or cause to be issued or sold,
additional shares of capital stock or other equity interests in, or any
security convertible or exercisable for or exchangeable into any capital
stock of or other equity interest in, the Company or of any Company
Subsidiary or any Voting Company Debt or (ii) obligating the Company or any
Company Subsidiary to issue, grant, extend or enter into any such option,
warrant, right, security, commitment, Contract, arrangement or undertaking.
The Company Disclosure Schedule sets forth a true and complete list as of
the date hereof of each Person who holds (x) an option to purchase Company
Common Stock as of the date hereof with a per share exercise price less
than or equal to $2.00 together with the number of shares of Company Common
Stock subject to such option, the option price of such option, whether such
option is intended to qualify as an ISO, the number of such options that
are vested as of the date hereof (including whether and to what extent the
vesting of such options shall be accelerated by the transactions
contemplated by this Agreement or by termination of employment or change in
position following consummation of the Merger) and the expiration date of
such option, and (y) any other right, directly or indirectly, to acquire
Company Common Stock at a price per share less than or equal to $2.00,
together with the number of shares of Company Common Stock subject to such
right. The Company Disclosure Schedule sets forth the total number of ISOs,
nonqualified options and such other rights outstanding on the date hereof
with a per share exercise price less than or equal to $2.00. All options
issued pursuant to the Company Stock Option Plans shall be terminated or
otherwise be cancelled at the Effective Time other than options issued
pursuant to the Company's 1996 Stock Plan and 1998 Acquisition Stock Option
Plan.
(d) As of the date of this Agreement, there are not any outstanding
contractual obligations of the Company, contingent or otherwise, or any
Company Subsidiary to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any Company Subsidiary. There are no issued
and outstanding shares of Company Common Stock that constitute restricted
stock or that are otherwise subject to a repurchase or redemption right in
favor of the Company. The Company has made available to Parent a complete
and correct copy of the Company Rights Agreement, as amended to the date of
this Agreement.
Section 3.04. Authority; Execution and Delivery; Enforceability.
(a) The Company has all requisite corporate power and authority to
execute and deliver this Agreement and, subject to the Company Stockholder
Approval (as defined in Section 3.04(c)) with respect
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to the Merger if required by Law (as defined in Section 3.05(a)), to
consummate the transactions contemplated hereby. The execution and delivery
by the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject, in the case of the
Merger, to receipt of the Company Stockholder Approval. The Company has
duly executed and delivered this Agreement, and this Agreement constitutes
its legal, valid and binding obligation (subject to the Company Stockholder
Approval with respect to the Merger if required by Law), enforceable
against it in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws of general
applicability relating to or affecting the enforcement of creditors' rights
and by the effect of the principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(b) Each of the Board of Directors of Company (the "Company Board") and
the Special Committee, in each case at a meeting duly called and held, duly
and unanimously adopted votes (i) approving this Agreement and the Merger,
(ii) determining that as of the date of this Agreement the terms of the
Merger are fair to and in the best interests of Company and its
stockholders, and (iii) as of the date of this Agreement recommending that
Company's stockholders approve this Agreement. Such votes are sufficient to
render inapplicable to Parent and Sub and this Agreement and the
transactions contemplated hereby the provisions of Chapter 110C and Chapter
110F of the BCL and Section 6H of the Company's Articles of Organization,
as amended (assuming the requirement that the terms of the Merger be
furnished to shareholders is satisfied). No other Massachusetts takeover
statute or similar statute or regulation, and to the Company's Knowledge no
takeover statute or similar statute or regulation of any other state,
applies or purports to apply to Company with respect to this Agreement or
the transactions contemplated hereby.
(c) In accordance with the provisions in Section 6I of the Company's
Articles of Organization, as amended, the only vote of holders of any class
or series of Company Capital Stock necessary to approve and adopt this
Agreement and the Merger is the approval of this Agreement by the holders
of not less than a majority of the outstanding Company Common Stock (the
"Company Stockholder Approval").
(d) The Company has terminated the Agreement and Plan of Merger dated as
of June 21, 2001 among Registry Holding Company, Redwood Acquisition Corp.
and the Company (the "June 21 Merger Agreement") in accordance with the
provisions thereof and has in connection with such termination paid or
become obligated to pay not more than $2,000,000 to Registry Holding
Company, Inc. and up to $250,000 to G. ▇▇▇▇ ▇▇▇▇▇▇.
Section 3.05. No Conflicts: Consents.
(a) Except as set forth in the Company Disclosure Schedule, the
execution and delivery by the Company of this Agreement do not, and the
consummation of the transactions contemplated hereby and compliance with
the terms hereof will not, result in any violation of or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation under, or
result in the creation of any Lien upon any of the properties or assets of
the Company or any Company Subsidiary under, or result in any grant of
additional rights to any party under, any provision of (i) the Company
Charter, the Company By-laws or the comparable charter or organizational
documents of any Company Subsidiary, (ii) any contract, lease, license,
indenture, note, bond, agreement, permit, concession, franchise or other
instrument (a "Contract") to which the Company or any Company Subsidiary is
a party or by which any of their respective properties or assets is bound
or (iii) subject to the filings and other matters referred to in Section
3.05(b), any judgment, order, injunction or decree, domestic or foreign
("Judgment"), or statute, law (including common law), legislation,
interpretation, ordinance, rule or regulation, domestic or foreign ("Law"),
applicable to the Company or any Company Subsidiary or their respective
properties or assets, other than, in the case of clauses (ii) and (iii)
above, any such items that, individually and in the aggregate, have not had
and would not reasonably be expected to have a Company Material Adverse
Effect.
7
(b) No consent, approval, license, permit, order or authorization
("Consent") of, or registration, declaration or filing with, any Federal,
state, local or foreign government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (each, a "Governmental Entity") is
required to be obtained or made by or with respect to Company or any
Company Subsidiary in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, other than (i) if required, compliance with and filing
of a pre-merger notification report under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (ii) the filing with
the U.S. Securities and Exchange Commission (the "SEC") of a proxy
statement relating to the approval of this Agreement by the Company's
stockholders (the "Proxy Statement"), (iii) the filing of the Articles of
Merger with the Secretary of State of The Commonwealth of Massachusetts and
appropriate documents with the relevant authorities of the other
jurisdictions in which the Company is qualified to do business, (iv)
compliance with and filings under the Laws of any foreign jurisdictions, if
and to the extent required, and (v) such other items that, individually and
in the aggregate, have not had and would not reasonably be expected to have
a Company Material Adverse Effect.
(c) The Company and the Company Board have taken all action necessary to
(i) render the Company Rights inapplicable to this Agreement and the
transactions contemplated hereby and (ii) ensure that (A) neither Parent
nor any of its stockholders, Affiliates or associates is or will become an
"Acquiring Person" (as defined in the Company Rights Agreement) by reason
of this Agreement or the Merger), (B) a "Distribution Date" (as defined in
the Company Rights Agreement) shall not occur by reason of this Agreement
or the Merger and (C) the Company Rights shall expire immediately prior to
the Effective Time.
Section 3.06. SEC Documents; Undisclosed Liabilities; Certain Agreements.
(a) The Company has filed all reports, schedules, forms, statements and
other documents required to be filed by the Company with the SEC since
January 1, 1999 (including without limitation the filing of exhibits
thereto) (the "Company SEC Documents"). As of its respective date, each
Company SEC Document complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or the Securities Act of 1933, as amended (the "Securities
Act"), as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Company SEC Document, and did not
at the time they were filed (or if amended or superseded by a filing prior
to the date of this Agreement, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements of the Company included
in the Company SEC Documents comply as to form in all material respects
with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in
accordance with United States generally accepted accounting principles
("GAAP") (except, in the case of unaudited statements, as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly present, in
all material respects, the consolidated financial position of the Company
and the Company Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
(b) Except as set forth in the Filed Company SEC Documents (as defined
in Section 3.08), as of the date of this Agreement neither the Company nor
any Company Subsidiary has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) required by GAAP to be
set forth on a consolidated balance sheet of the Company and the Company
Subsidiaries or in the notes thereto, other than liabilities or obligations
incurred since the date of the most recent financial statements included in
the Filed Company SEC Documents in the ordinary course of business
consistent with prior practice or which, individually and in the aggregate,
would not reasonably be expected to have a Company Material Adverse
8
Effect. Except as set forth in the Filed Company SEC Documents or in the
Company Disclosure Schedule, as of the date of this Agreement, neither the
Company nor any Company Subsidiary has any indebtedness, obligations for
deferred purchase price of property or services or earn out payment
obligations, capitalized lease obligations, outstanding letters of credit
or guarantees or other arrangements having the economic effect of a
guarantee for any indebtedness of any other Person other than such
indebtedness, obligations for deferred purchase price of property or
services or earn out payment obligations, capitalized lease obligations,
outstanding letters of credit or guarantees or other arrangements having
the economic effect of a guarantee for any indebtedness of any other Person
incurred since the date of the most recent consolidated financial
statements filed with the SEC in the ordinary course of business consistent
with past practice and which in the aggregate would not exceed $500,000.
(c) Except as disclosed in the Filed Company SEC Documents, as of the
date of this Agreement, neither the Company nor any of its Subsidiaries has
entered into any transaction with any director, officer or other affiliate
of the Company or any of its Subsidiaries or any transaction that would be
subject to proxy statement disclosure pursuant to Item 404 of Regulation S-
K.
(d) Other than pursuant to agreements relating to the disposition of
assets by the Company or a Company Subsidiary, copies of which were made
available to the Buyer, there is no non-competition or other similar
agreement, commitment, judgment, injunction or order which the Company or
any Subsidiary of the Company is a party or subject to that has or would
reasonably be expected to have the effect of prohibiting or impairing in
any material respect the conduct of the business of the Company as
presently being conducted by it.
Section 3.07. Information Supplied. None of the information supplied or to
be supplied by the Company for inclusion or incorporation by reference in the
Proxy Statement will, at the date it is first mailed to the Company's
stockholders or at the time of the Company Stockholders Meeting (as defined in
Section 6.01(a)), 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 will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except that no representation is made by the Company
with respect to statements made or incorporated by reference therein based on
information supplied in writing by Parent or Sub for inclusion or incorporation
by reference therein.
Section 3.08. Absence of Certain Changes or Events. Except as disclosed in
the Company SEC Documents filed and publicly available prior to the date of
this Agreement (the "Filed Company SEC Documents") or in the Company Disclosure
Schedule, from December 30, 2000 to the date of this Agreement, the Company has
conducted its business only in the ordinary course, and during such period
there has not been:
(i) any event, change, effect or development that, individually or in
the aggregate, has had or would reasonably be expected to have a
Company Material Adverse Effect;
(ii) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to
any Company Capital Stock or any repurchase for value by the Company
of any Company Capital Stock;
(iii) any split, combination or reclassification of any Company Capital
Stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for
shares of Company Capital Stock;
(iv) (A) any granting by the Company or any Company Subsidiary to any
current or former director or executive officer of the Company or
any Company Subsidiary of any material increase in their
compensation, except to the extent required under employment
agreements in effect as of the date of the most recent audited
financial statements included in the Filed Company SEC Documents,
(B) any granting by the Company or any Company Subsidiary to any
such director or executive officer of any material increase in
severance or termination pay, except as was required under any
employment,
9
severance or termination policy, practice or agreements in effect as
of the date of the most recent audited financial statements included
in the Filed Company SEC Documents or (C) any entry by the Company
or any Company Subsidiary into, or any material amendment of, any
employment, severance or termination agreement with any such
director or executive officer;
(v) any change in accounting methods, principles or practices by the
Company or any Company Subsidiary materially affecting the
consolidated assets, liabilities or results of operations of the
Company, except insofar as may have been required by a change in
GAAP; or
(vi) any material elections with respect to Taxes (as defined in Section
3.09) by the Company or any Company Subsidiary or settlement or
compromise by the Company or any Company Subsidiary of any material
Tax liability or refund.
Section 3.09. Taxes.
(a) Each of the Company and each Company Subsidiary (for such periods as
each Subsidiary was owned, directly or indirectly, by the Company) (i) has
timely filed, or has caused to be timely filed on its behalf, all Tax
Returns (as defined in Section 3.09(d)) required to be filed by it (taking
into account any extensions of time for filing such Tax Returns), (ii) has
paid all Taxes (as defined in Section 3.09(d)) owed by it (whether or not
shown on any Tax Returns) and (iii) has withheld or collected all taxes
that the Company is or was required by law to withhold or collect, except
where the failure to file Tax Returns, to pay Taxes or to withhold or
collect taxes has not had and would not reasonably be expected to have a
Company Material Adverse Effect. Neither the Company nor any Company
Subsidiary has any liability for any Tax obligation of any taxpayer
(including without limitation any affiliated group of corporations or other
entities that included the Company or any Company Subsidiary during a prior
period) other than the Company or any Company Subsidiary, except where such
liability has not had and would not reasonably be expected to have a
Company Material Adverse Effect.
(b) The most recent financial statements contained in the Filed Company
SEC Documents reflect an adequate reserve (in accordance with GAAP) for all
Taxes payable by the Company and the Company Subsidiaries for all Taxable
periods and portions thereof through the date of such financial statements
(in addition to any reserve for deferred taxes established to reflect
timing differences between book and tax income).
(c) There are no material Liens for Taxes (other than for current Taxes
not yet due and payable) on the assets of the Company or any Company
Subsidiary.
(d) For purposes of this Agreement:
"Taxes" includes all forms of taxation imposed by any Federal, state, local,
foreign or other Governmental Entity, including income, franchise, property,
sales, use, excise, employment, unemployment, payroll, social security,
estimated, value added, ad valorem, transfer, recapture, withholding and other
Taxes of any kind, including all interest, penalties and additions thereto.
"Tax Return" means all Federal, state, local, provincial and foreign Tax
returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax return relating to Taxes.
Section 3.10. ERISA Compliance.
(a) The Company Disclosure Schedule contains a list of all material
"employee pension benefit plans" (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
(sometimes referred to herein as "Company Pension Plans"), "employee
welfare benefit plans" (as defined in Section 3(1) of ERISA), a stock
bonus, stock purchase, stock option, restricted stock or similar equity-
based plan, and any other deferred-compensation, retirement, welfare-
benefit, bonus, incentive, severance or fringe benefit plan or arrangement
maintained, or contributed to, by the Company or any Company Subsidiary for
the benefit of any current or former employees, officers or directors of
the
10
Company or any Company Subsidiary (together, the "Company Benefit Plans").
The Company has made available to Parent true, complete and correct copies
of (i) each Company Benefit Plan (or, in the case of any unwritten Company
Benefit Plan, a brief description thereof), (ii) the most recent annual
report on Form 5500 filed with the Internal Revenue Service with respect to
each Company Benefit Plan (if any such report was required), (iii) the most
recent summary plan description for each Company Benefit Plan for which
such summary plan description is required and (iv) each trust agreement and
group annuity contract relating to any Company Benefit Plan, if any.
(b) All Company Benefit Plans are in compliance in all material respects
with applicable Law (including, where applicable, the Code and ERISA),
except such noncompliance as has not had and would not reasonably be
expected to have a Company Material Adverse Effect. All Company Pension
Plans are intended to be tax-qualified under Section 401 (a) of the
Internal Revenue Code of 1986, as amended (the "Code") and, except as set
forth in the Company Disclosure Schedule, the Company has no reason to
believe that any of the Company Pension Plans are not so qualified under
Section 401 (a) of the Code. There is no pending or, to the Knowledge of
the Seller, threatened lawsuit, material claim or other material
controversy relating to any Company Benefit Plan, other than claims for
benefits in the normal course.
(c) No Company Pension Plan is a "defined benefit plan" within the
meaning of Section 3(35) of ERISA or is subject to the minimum funding
standards of Section 412 of the Code or Section 302 of ERISA, and neither
the Company nor any Company Subsidiary has any actual or contingent
liability under any defined benefit plan which it (or any Affiliate)
previously maintained or contributed to (or was obligated to maintain or
contribute to). None of the Company, any Company Subsidiary, any officer of
the Company or any Company Subsidiary or any of the Company Benefit Plans
which are subject to ERISA, including the Company Pension Plans, any trusts
created thereunder or any trustee or administrator thereof, has engaged in
a non-exempt "prohibited transaction" (as such term is defined in Section
406 of ERISA or Section 4975 of the Code) or any other breach of fiduciary
responsibility that could subject the Company, any Company Subsidiary or
any officer of the Company or any Company Subsidiary to any material tax or
penalty on prohibited transactions imposed by such Section 4975 or to any
material liability under Section 502(i) or 502(1) of ERISA that would
reasonably be expected to have a Company Material Adverse Effect.
(d) With respect to any Company Benefit Plan that is an employee welfare
benefit plan, (i) all such Company Benefit Plans are unfunded and no such
Company Benefit Plan is funded through a "welfare benefits fund" (as such
term is defined in Section 419(e) of the Code), and (ii) each such Company
Benefit Plan that is a "group health plan" (as such term is defined in
Section 5000(b)(1) of the Code), complies in all material respects with the
applicable requirements of Section 4980B(f) of the Code, except such
noncompliance as would not reasonably be expected to have a Company
Material Adverse Effect.
(e) Each Company Benefit Plan is amendable and terminable in accordance
with its terms and neither the Company nor any of the Company's
Subsidiaries have made any promise, except as set forth in said Company
Benefit Plans, that such plans may not be terminated. Except as set forth
on Schedule 3.10(e), termination of any or all of the Company Benefit Plans
will not result in costs to the Company that would reasonably be expected
to have a Company Material Adverse Effect.
(f) Except as disclosed in the Filed Company SEC Documents or in the
Company Disclosure Schedule, neither the Company nor any Company Subsidiary
is a party to any oral or written (i) agreement with any director,
executive officer or employee of the Company or any Company Subsidiary (A)
providing for any cash payments to any Person upon the occurrence of a
transaction involving the Company or any Company Subsidiary of the nature
of any of the transactions contemplated by this Agreement, (B) providing
for any cash severance payment to any Person after the termination of
employment of such director, executive officer or employee (ii) agreement
or plan binding the Company or any Company Subsidiary, including any stock
option plan, stock appreciation right plan, restricted stock plan, stock
purchase plan or severance benefit plan, any of the benefits of which shall
be increased, or the vesting of the benefits of which shall be accelerated,
by the occurrence of any of the transactions
11
contemplated by this Agreement or the value of any of the benefits of which
shall be calculated on the basis of any of the transactions contemplated by
this Agreement.
(g) None of the Company Benefit Plans promises or provides retiree
medical or other retiree welfare benefits to any person, except as required
by applicable law.
Section 3.11. Litigation. Except as disclosed in the Filed Company SEC
Documents or in the Company Disclosure Schedule, as of the date of this
Agreement, there is no suit, action or proceeding pending or, to the Knowledge
of the Company, overtly threatened against the Company or any Company
Subsidiary that, individually or in the aggregate, has had or would reasonably
be expected to have a Company Material Adverse Effect, nor, as of the date of
this Agreement, is there any Judgment outstanding against the Company or any
Company Subsidiary that has had or would reasonably be expected to have a
Company Material Adverse Effect.
Section 3.12. Compliance with Applicable Laws. Except as disclosed in the
Filed Company SEC Documents or in the Company Disclosure Schedule, the Company
and the Company Subsidiaries are in compliance with all, and has not received
any written notices of violations with respect to any, applicable Laws,
including those relating to immigration, occupational health and safety and the
environment, except for instances of noncompliance that, individually and in
the aggregate, have not had and would not reasonably be expected to have a
Company Material Adverse Effect. This Section 3.12 does not relate to matters
with respect to Taxes, which are the subject of Section 3.09.
Section 3.13. Intellectual Property.
(a) Except as disclosed in the Filed Company SEC Documents or in the
Company Disclosure Schedule, the Company and the Company Subsidiaries own,
or are licensed or otherwise possess legally enforceable rights to use all
patents, trademarks, trade names, service marks, copyrights, and any
applications therefor, technology, know-how, computer software programs or
applications, and tangible or intangible proprietary information or
material that are used in the business of the Company and the Company
Subsidiaries as currently conducted, except as would not reasonably be
expected to have a Company Material Adverse Effect.
(b) Except as disclosed in the Filed Company SEC Documents or in the
Company Disclosure Schedule or as would not reasonably be expected to have
a Company Material Adverse Effect, the Company and the Company Subsidiaries
are not in violation of any licenses, sublicenses and other agreements as
to which the Company and/or the Company Subsidiaries are a party and
pursuant to which the Company and/or the Company Subsidiaries are
authorized to use any third-party patents, trademarks, service marks and
copyrights ("Third-Party Intellectual Property Rights"). Except as
disclosed in the Filed Company SEC Documents or in the Company Disclosure
Schedule and except as would not reasonably be expected to have a Company
Material Adverse Effect, as of the date of this Agreement no claims with
respect to the patents, registered and material unregistered trademarks and
service marks, registered copyrights, trade names and any applications
therefor owned by the Company or the Company Subsidiaries (the "Company
Intellectual Property Rights"), any trade secret material to the Company,
or Third-Party Intellectual Property Rights to the extent arising out of
any use, reproduction or distribution of such Third Party Intellectual
Property Rights by or through the Company or the Company Subsidiaries, are
currently pending (or, to the Knowledge of the Company, are overtly
threatened by any Person) against the Company.
(c) To the Company's Knowledge, all patents, registered trademarks,
service marks and copyrights held by the Company or the Company
Subsidiaries are valid and subsisting. Except as disclosed in the Filed
Company SEC Documents or in the Company Disclosure Schedule, to the
Company's Knowledge, there is no material unauthorized use, infringement or
misappropriation of any Company Intellectual Property Rights by any third
party, including any employee or former employee of the Company or the
Company Subsidiaries.
12
Section 3.14. Brokers; Fees and Expenses.
(a) No broker, investment banker, financial advisor or other Person,
other than ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., financial advisor to the Special
Committee, the fees and expenses of which will be paid by the Company, and
▇▇ ▇▇▇▇▇ Securities Corporation, former financial advisor to the Company,
the fees and expenses of which will be paid by the Company under certain
circumstances, is entitled to any broker's, finder's, financial advisor's
or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of the
Company. The Company has delivered to Parent a complete and accurate copy
of all agreements pursuant to which ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. or ▇▇
▇▇▇▇▇ Securities Corporation are entitled to any fees and expenses payable
by the Company in connection with any of the transactions contemplated by
this Agreement.
(b) The Company Disclosure Schedule sets forth a list of the fees and
expenses, estimated in good faith as of the date of this Agreement,
incurred and to be incurred by the Company and any of its Subsidiaries in
connection with the sale of the Company (including without limitation the
fees and expenses of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., ▇▇ ▇▇▇▇▇ Securities
Corporation and of the Company's legal counsel and accountants) and noting
which fees and expenses, if any, have been paid as of September 30, 2001 or
accrued as of June 30, 2001.
Section 3.15. Opinion of Financial Advisor. The Company has received the
opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., dated the date of this Agreement, to
the effect that, as of such date, the consideration to be received in the
Merger by the holders of Company Common Stock not affiliated with Parent is
fair to such holders from a financial point of view and a copy of the signed
opinion has been provided to Parent.
Section 3.16. Stock Options and Employee Stock Purchase Plan. The Company
has provided Parent with true and complete copies of the Company's 1996 Stock
Plan, 1998 Acquisition Stock Option Plan, 1998 International Stock Option Plan,
Addendum to 1998 International Stock Option Plan, 1998 Directors Stock Plan,
Renaissance Solutions, Inc. 1995 Equity Incentive Plan, 2000 Directors Stock
Plan, GovConnect, Inc. 2000 Stock Incentive Plan, 1996 Eligible Directors Stock
Plan and The Hunter Group, Inc. Employee Non-Qualified Stock Option Plan
(collectively, the "Company Stock Option Plans"), including the form of option
certificates, restricted stock agreements and certain other documents related
to such Company Stock Option Plans, and the Company's 1996 Employee Stock
Purchase Plan (the "Company Stock Purchase Plan"). The Company Board has taken
all actions necessary under the Company Stock Purchase Plan to suspend the
commencement of the Offering Periods (as defined in the Company Stock Purchase
Plan) scheduled to commence on July 2, 2001 and thereafter.
Section 3.17. Accounts Receivable. The accounts receivable of the Company
arose out of the sale of inventory or services performed in the ordinary course
of business.
Section 3.18. Properties. Neither the Company nor any Company Subsidiary is
in default under any agreement pursuant to which it leases real property of
more than 3,000 square feet (collectively, the "Leases"), except where the
existence of such defaults, individually or in the aggregate, has not had and
would not reasonably be expected to have a Company Material Adverse Effect. The
Company and the Company Subsidiaries do not own any real property. The Company
has made available to Parent true and complete copies of all Leases.
Section 3.19. Government Contracts. Neither the Company nor any Company
Subsidiary is suspended or debarred from bidding on contracts or subcontracts
with any Governmental Entity and to the Knowledge of the Company, no such
suspension or debarment proceedings are pending or threatened that have had or
would reasonably be expected to have a Company Material Adverse. Neither the
Company nor any Company Subsidiary has any agreements, contracts or commitments
which require it to obtain or maintain a security clearance with a Governmental
Entity.
Section 3.20. Books and Records. The books and records of the Company and
each Company Subsidiary accurately reflect the assets, liabilities, financial
condition and results of operations of the Company
13
or such Company Subsidiary and have been maintained in accordance with good
business and bookkeeping practices, except where such failure to be accurate or
to be so maintained has not had and would not be reasonably expected to have a
Company Material Adverse Effect.
ARTICLE IV
Representations and Warranties of Parent and Sub
Parent and Sub jointly and severally represent and warrant to Company that,
except as indicated in the applicable section of the Disclosure Schedule
furnished by Parent to Company prior to the execution of this Agreement (the
"Buyer Disclosure Schedule") corresponding to the Sections and subsections set
forth below:
Section 4.01. Organization, Standing and Power. Each of Parent and Sub is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has full corporate power and
authority and possesses all governmental franchises, licenses, permits,
authorizations and approvals, in each case whether domestic or foreign,
necessary to enable it to own, lease or otherwise hold its properties and
assets and to conduct its businesses as presently conducted, other than such
franchises, licenses, permits, authorizations and approvals the lack of which,
individually and in the aggregate, has not had and would not reasonably be
expected to materially adversely affect the ability of Parent or Sub to perform
their obligations under this Agreement and consummate the transactions
contemplated hereby (a "Parent Material Adverse Effect").
Section 4.02. Sub.
(a) Since the date of its incorporation, Sub has not, directly or
through a Subsidiary, carried on any business or conducted any operations
other than the execution of this Agreement, the performance of its
obligations hereunder and matters ancillary thereto. Sub was incorporated
solely for the purpose of consummating the transactions contemplated
hereby.
(b) The authorized capital stock of Sub consists of 1,000 shares of
common stock, no par value per share, all of which have been validly
issued, are fully paid and nonassessable and are owned by Parent free and
clear of any Lien.
Section 4.03. Authority; Execution and Delivery; Enforceability. Each of
Parent and Sub has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery by each of Parent and Sub of this Agreement and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Parent and Sub.
Parent, as sole stockholder of Sub, has approved this Agreement. Each of Parent
and Sub has duly executed and delivered this Agreement, and this Agreement
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws of general applicability relating to or
affecting the enforcement of creditors' rights and by the effect of the
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
Section 4.04. No Conflicts; Consents.
(a) The execution and delivery by each of Parent and Sub of this
Agreement, do not, and the consummation of the transactions contemplated
hereby and compliance with the terms hereof will not, result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration
of any obligation under, or result in the creation of any Lien upon any of
the properties or assets of Parent or any of its Subsidiaries under, any
provision of (i) the charter, by-laws or other organizational documents of
Parent or any of its Subsidiaries, (ii) any Contract to which Parent or any
of its Subsidiaries is a party or by which any of their respective
properties or assets is
14
bound or (iii) subject to the filings and other matters referred to in
Section 4.04(b), any Judgment or Law applicable to Parent or any of its
Subsidiaries or their respective properties or assets, other than, in the
case of clauses (ii) and (iii) above, any such items that, individually and
in the aggregate, have not had and would not reasonably be expected to have
a Parent Material Adverse Effect.
(b) No Consent of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with respect
to Parent or any of its Subsidiaries in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, other than (i) if required, compliance
with and filing of a pre-merger notification report under the HSR Act, (ii)
the filing with the SEC of such reports under Section 13 of the Exchange
Act as may be required in connection with this Agreement and the
transactions contemplated hereby, (iii) the filing of the Articles of
Merger with the Secretary of State of The Commonwealth of Massachusetts and
appropriate documents with the relevant authorities of the other
jurisdictions in which Parent and Sub are qualified to do business, (iv)
compliance with and filings under the Laws of any foreign jurisdictions, if
and to the extent required, and (v) such other items that, individually and
in the aggregate, have not had and would not reasonably be expected to have
a Parent Material Adverse Effect.
Section 4.05. Information Supplied. None of the information supplied or to
be supplied by Parent or Sub for inclusion or incorporation by reference in the
Proxy Statement will, at the date it is first mailed to the Company's
stockholders or at the time of the Company Stockholders Meeting, 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.
Section 4.06. Brokers. No broker, investment banker, financial advisor or
other Person, other than SunTrust ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Company LLC is entitled to
any broker's, finder's, financial advisor's or other similar fee or commission
in connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of the Parent or Sub.
Section 4.07. Financial Ability to Perform. Parent and Sub have provided the
Company with a commitment letter from CIT Business Credit, dated as of October
1, 2001 (the "Commitment Letter" and the financing to be provided thereunder,
the "Financing"). To the Knowledge of Parent and Sub, the obligation to fund
the commitment under the Commitment Letter is not subject to any condition
other than as set forth in the Commitment Letter. Parent and Sub are not aware
of any fact or occurrence that makes any of the assumptions or statements set
forth in the Commitment Letter inaccurate or that causes the Commitment Letter
to be ineffective or that precludes the satisfaction of the conditions set
forth in the Commitment Letter. To the Knowledge of Parent and Sub, the
Commitment Letter has been duly executed by all parties thereto and is in full
force and effect. All commitment and other fees required to be paid under the
Commitment Letter on or prior to the date hereof have been paid. The aggregate
amount of financing committed pursuant to the Commitment Letter, together with
at least $60,500,000 in cash held by the Company and cash held by the Parent
and equity commitments of certain shareholders of Parent as previously
disclosed to the Company, is sufficient to fund all amounts required to be paid
by Parent or Sub in connection with the consummation of the transactions
contemplated hereby, including, but not limited to, the Merger Consideration.
ARTICLE V
Covenants Relating to Conduct of Business
Section 5.01. Conduct of Business.
(a) Conduct of Business by the Company. Except for matters set forth in
Section 5.01 of the Company Disclosure Schedule, expressly agreed to in
writing by Parent or otherwise expressly permitted by this Agreement, from
the date of this Agreement to the earlier to occur of the date of the
termination of this Agreement or the Effective Time, the Company shall, and
shall cause each Company Subsidiary to,
15
conduct the business of the Company and the Company Subsidiaries taken as a
whole in the usual, regular and ordinary course in substantially the same
manner as previously conducted and use reasonable efforts to preserve
intact its current business organization, keep available the services of
its current officers and employees and keep its relationships with
customers, suppliers and others having business dealings with them. In
addition, and without limiting the generality of the foregoing, except for
matters set forth in Section 5.01 of the Company Disclosure Schedule,
expressly agreed to in writing by Parent or otherwise expressly permitted
by this Agreement, from the date of this Agreement to the earlier to occur
of the date of the termination of this Agreement or the Effective Time, the
Company shall not, and shall not permit any Company Subsidiary to, do any
of the following without the prior written consent of Parent which consent
will be given or denied within a reasonable time after any written request
for such consent:
(i) (A) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock,
other than dividends and distributions by a direct or indirect
wholly owned Subsidiary of the Company to its parent, (B)
split, combine or reclassify any of its capital stock or issue
or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital
stock, or (C) purchase, redeem or otherwise acquire any shares
of capital stock of the Company or any Company Subsidiary or
any other securities thereof or any rights, warrants or options
to acquire any such shares or other securities, except in the
case of (B) and (C), as required by any employee benefit plan
of the Company or any Company Subsidiary or agreement existing
as of the date hereof;
(ii) issue, deliver, sell or grant (A) any shares of its capital
stock, (B) any Voting Company Debt or other voting securities,
(C) any securities convertible into or exchangeable for, or any
options, warrants or rights to acquire, any such shares, Voting
Company Debt, voting securities or convertible or exchangeable
securities or (D) any "phantom" stock, "phantom" stock rights,
stock appreciation rights or stock-based performance units,
other than (1) the issuance of Company Common Stock (and
associated Company Rights) upon the exercise of Company Stock
Options outstanding on the date of this Agreement and in
accordance with their present terms, (2) the issuance of
Company Common Stock upon the exercise of Company Rights and
(3) the issuance of Company Common Stock Options pursuant to
the Company Stock Option Plans and consistent with past
practices;
(iii) amend its articles of organization, by-laws or other comparable
charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or consolidating
with, or by purchasing a substantial equity interest in or
portion of the assets of, or by any other manner, any business
or any corporation, partnership, joint venture, association or
other business organization or division thereof or (B) any
assets that are material, individually or in the aggregate, to
the Company and the Company Subsidiaries taken as a whole,
except for purchases in the ordinary course of business
consistent with past practice;
(v) except as disclosed in Section 5.01 of the Company Disclosure
Schedule, (A) grant to any current or former director or
executive officer of the Company or any Company Subsidiary any
material increase in compensation, except in the ordinary
course of business consistent with past practices to the extent
required under employment agreements in effect as of the date
of the most recent audited financial statements included in the
Filed Company SEC Documents, (B) grant to any current or former
director or executive officer of the Company or any Company
Subsidiary any increase in severance or termination pay, except
to the extent required under any agreement in effect as of the
date of the most recent audited financial statements included
in the Filed Company SEC Documents, (C) enter into or amend any
employment, consulting, indemnification, severance or
termination agreement with any such director or executive
officer or enter into or amend any other transaction that would
be or is subject to proxy statement disclosure pursuant to Item
404 of Regulation S-K, (D) establish,
16
adopt, enter into or amend in any material respect any
collective bargaining agreement or Company Benefit Plan, (E)
take any action to accelerate any rights or benefits, or make
any material determinations not in the ordinary course of
business consistent with prior practice, under any collective
bargaining agreement or Company Benefit Plan, (F) forgive any
indebtedness of any employee of the Company or any of its
Subsidiaries in excess of $25,000 in the aggregate or (G) hire
any employee in the United States pursuant to any temporary
work authorization;
(vi) make any change in accounting methods, principles or practices
materially affecting the reported consolidated assets,
liabilities or results of operations of the Company, except
insofar as may have been required by a change in GAAP;
(vii) sell, lease (as lessor), license or otherwise dispose of or
subject to any Lien any material properties or assets, except
(A) sales of assets or inventory in the ordinary course of
business consistent with past practice and (B) sales or
dispositions of obsolete or worthless assets;
(viii) (A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another Person, issue or sell any debt
securities or warrants or other rights to acquire any debt
securities of the Company or any Company Subsidiary, guarantee
any debt securities of another Person, except for short-term
borrowings from Persons that are not directors, officers or
employees of the Company or any Company Subsidiary incurred in
the ordinary course of business consistent with past practice,
or (B) make any loans to, or investments in, any other Person,
other than to or in the Company or any direct or indirect
wholly owned Subsidiary of the Company;
(ix) make or agree to make new capital expenditures that are in
excess of $300,000 in any three-month period (provided that
with respect thereto Parent consent shall not be unreasonably
withheld) or make or agree to make new capital expenditures for
items set forth in Schedule 5.01(a)(ix);
(x) (A) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise) in excess of $100,000 individually or
$1,000,000 in the aggregate, other than the payment, discharge
or satisfaction, in the ordinary course of business consistent
with past practice or in accordance with their terms, of
liabilities reflected or reserved against in, or contemplated
by, the most recent consolidated financial statements (or the
notes thereto) of the Company included in the Filed Company SEC
Documents or incurred in the ordinary course of business
consistent with past practice (provided that with respect
thereto Parent consent shall not be unreasonably withheld), (B)
cancel any indebtedness in excess of $100,000 individually or
$1,000,000 in the aggregate or waive any claims or rights of
substantial value or (provided that with respect to any such
cancellation or waiver Parent consent shall not be unreasonably
withheld) (C) waive the benefits of, or agree to modify in any
manner, any confidentiality, standstill or similar agreement to
which the Company or any Company Subsidiary is a party;
(xi) enter into, renew, extend, amend, modify, waive any material
provision of, or terminate any lease or similar commitment, in
each case providing for payments in excess of $250,000 over the
term of such lease or commitment (or until the date on which
such lease or commitment may be terminated by the Company
without penalty);
(xii) except as required by their terms, enter into, terminate or
breach in any material respect (or take or fail to take any
action, that, with or without notice or lapse of time or both,
would become a material breach) or materially amend any
Contract filed or that would be required to be filed in any
Company SEC Documents;
(xiii) without prior consultation with Parent (in addition to the
consent requirement described above, provided that with respect
thereto Parent consent shall not be unreasonably withheld),
17
commence any litigation or arbitration other than in accordance
with past practice or settle any litigation or arbitration for
money damages or other relief in excess of $100,000, or if as
part of such settlement Company or any Company Subsidiary would
agree to any restrictions on its operations, or which relates
to this Agreement or the transactions contemplated hereby;
(xiv) elect or appoint any new directors or officers of Company or
any Company Subsidiary;
(xv) take any action that would reasonably be expected to result in
the inability to satisfy the conditions to closing set forth in
Section 7.02(a);
(xvi) liquidate, dissolve or effect a recapitalization or
reorganization in any form of transaction
(xvii) make any material election with respect to Taxes or settle or
compromise any material Tax liability or refund;
(xviii) invest funds in debt securities or other investments maturing
more than 60 days after the date of investment; or
(xix) authorize, or commit or agree to take, any of the foregoing
actions.
(b) Advice of Changes. The Company shall use reasonable efforts to
promptly advise Parent orally and in writing of any change or event or
which the Company becomes aware that has or would reasonably be expected to
have a Company Material Adverse Effect.
Section 5.02. No Solicitation by Company.
(a) The Company agrees that, from the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, neither
Company nor any Company Subsidiary shall, nor shall either authorize or
permit any of its respective directors, officers or employees or any
representative retained by it (including any financial advisors) to,
directly or indirectly through another Person, (i) solicit, initiate or
encourage (including by way of furnishing non-public information) any
inquiries or the making of an Acquisition Proposal, or (ii) participate in
any discussions or negotiations regarding any Acquisition Proposal;
provided, however, that if, at any time, the Company Board or the Special
Committee determines in good faith, after consultation with outside legal
counsel, that it is necessary to do so in order to act in a manner
consistent with its fiduciary duties to Company's stockholders under
applicable Law, Company may, in response to a Superior Proposal which was
not solicited by Company in violation of Section 5.02(a) and which did not
otherwise result from a breach of this Section 5.02, and subject to
compliance with the provisions of paragraph (c) below, (x) furnish
information with respect to Company to any Person making such unsolicited
Superior Proposal pursuant to a confidentiality agreement entered into
between such Person and Company in form and substance reasonably
satisfactory to the Company Board or the Special Committee meeting the
requirements of the last sentence of Section 5.02(b), and (y) participate
in discussions or negotiations regarding such unsolicited Superior
Proposal. For purposes of this Agreement, an "Acquisition Proposal" means
any inquiry, proposal or offer from any Person (i) relating to any direct
or indirect acquisition or purchase of (A) a business that constitutes 15%
or more of the net revenues, net income or the assets of Company or any
Company Subsidiary, or (B) 15% or more of any class of equity securities of
Company or any Company Subsidiary, (ii) relating to any tender offer or
exchange offer that if consummated would result in any Person beneficially
owning 15% or more of any class of equity securities of Company or any
Company Subsidiary, or (iii) relating to any merger, consolidation,
business combination, acquisition, recapitalization, liquidation,
dissolution or similar transaction involving Company or any Company
Subsidiary, in each case, other than the transactions contemplated by this
Agreement. Immediately following the execution and delivery of this
Agreement by the parties hereto, Company will cease and cause to be
terminated any existing activities, discussions or negotiations with any
parties conducted with respect to the foregoing.
(b) Except as expressly permitted by this Section 5.02, the Company
Board shall not (i) withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to Parent, the approval or
18
recommendation by the Company Board or Special Committee of this Agreement,
the Merger or the transactions contemplated hereby, (ii) approve or
recommend, or propose publicly to approve or recommend, any Acquisition
Proposal, or (iii) cause Company or any Company Subsidiary to enter into
any letter of intent, agreement in principle, acquisition agreement or
other similar agreement (each, a "Company Acquisition Agreement") related
to any Acquisition Proposal, other than any such agreement entered into
concurrently with a termination pursuant to the next sentence.
Notwithstanding the foregoing, if at any time the Company Board or the
Special Committee determines in good faith, after consultation with outside
counsel, that it is necessary to do so in order to act in a manner
consistent with its fiduciary duties to Company's stockholders under
applicable law, subject to compliance with paragraph (c) below, the Company
Board may, in response to a Superior Proposal which was not solicited by
Company in violation of Section 5.02(a) and which did not otherwise result
from a breach of this Section 5.02 (subject to this and the remaining
provisions of this Section 5.02), enter into an agreement with respect to
such Superior Proposal and, at the time of execution of a binding agreement
with respect thereto, terminate this Agreement in accordance with Section
8.01(e). For purposes of this Agreement, a "Superior Proposal" means any
Acquisition Proposal which (i) the Company Board or the Special Committee
determines in good faith is reasonably likely to be consummated, taking
into account the Person making the proposal and all legal, financial and
regulatory aspects of the proposal, and (ii) the Company Board or the
Special Committee believes in good faith (after consultation with and based
upon the advice of its outside financial advisors) would, if consummated,
provide greater value to Company's stockholders than the transactions
contemplated by this Agreement. Before the Company can furnish any
information to or commence any negotiations with any proponent of an
Acquisition Proposal, the Company must obtain a confidentiality agreement
from the proponent of such Acquisition Proposal that contains a standstill
and other provisions at least as favorable to the Company as the ones set
forth in the Confidentiality Agreement between the Company and the Parent
dated August 21, 2001.
(c) In addition to the obligations of Company as set forth in paragraphs
(a) and (b) of this Section 5.02, Company shall advise Parent orally within
one business day and in writing within two business days of any Acquisition
Proposal in response to which the Company has furnished (or proposes to
furnish) confidential information to the proponent thereof or has commenced
(or proposes to commence) negotiations with the proponent thereof. Such
notice shall include the material terms of any such Acquisition Proposal
(with any such notice referred to as a "Company Notice"). The Company shall
use its reasonable efforts to keep Parent informed of the status and
details (including any change to the terms thereof) of any such Acquisition
Proposal. In addition, in the event Company intends to enter into a Company
Acquisition Agreement relating to a Superior Proposal, Company will deliver
a Company Notice at least 48 hours prior to entering into such definitive
agreement, which Company Notice will identify and detail the proposed terms
of such Superior Proposal.
ARTICLE VI
Additional Agreements
Section 6.01. Preparation of Proxy Statement; Stockholders Meeting.
(a) The Company shall, as soon as practicable following the date of
execution of this Agreement, prepare and file with the SEC the Proxy
Statement (as defined in Section 6.01(c)) in preliminary form (provided
that Parent, Sub and their counsel shall be given reasonable opportunity to
review and comment on the Proxy Statement prior to its filing with the
SEC), and each of the Company, Parent and Sub shall use its best efforts to
respond as promptly as practicable to any comments of the SEC with respect
thereto. The Company shall notify Parent promptly of the receipt of any
comments from the SEC or its staff and of any request by the SEC or its
staff for amendments or supplements to the Proxy Statement or for
additional information and shall supply Parent with copies of all
correspondence between the Company or any of its representatives, on the
one hand, and the SEC or its staff, on the other hand, with respect to the
Proxy Statement. If at any time prior to receipt of the Company Stockholder
Approval there shall occur
19
any event that should be set forth in an amendment or supplement to the
Proxy Statement, the Company shall promptly prepare and mail to its
stockholders such an amendment or supplement. The Company shall use
reasonable efforts to cause the Proxy Statement to be mailed to the
Company's stockholders as promptly as practicable after filing with the
SEC. Subject to the fiduciary duties of the Company Board under applicable
law, (i) the Proxy Statement shall contain the recommendation of the
Company Board that the stockholders of the Company vote to adopt and
approve this Agreement and the Merger and (ii) if requested to do so by
Parent at any time prior to the Company Stockholders Meeting (as defined in
Section 6.01(b)) and subject to compliance with applicable laws, if there
shall have been publicly announced an alternative Acquisition Proposal, the
Company Board shall within a reasonable period of time following such
request (and prior to the Company Stockholders Meeting) publicly reaffirm
such recommendation and/or shall publicly announce that it is not
recommending that the stockholders of the Company accept an alternative
Acquisition Proposal, provided that such reaffirmation or announcement does
not require significant delay in the timing of the Company Stockholders
Meeting.
(b) The Company shall, as soon as practicable following the date of
execution of this Agreement, duly call, give notice of, convene and hold a
meeting of its stockholders (the "Company Stockholders Meeting") for the
purpose of seeking the Company Stockholder Approval. Subject to Section
5.02, the Company shall, through the Company Board, recommend to its
stockholders that they give the Company Stockholder Approval. Without
limiting the generality of the foregoing, the Company agrees that its
obligations pursuant to the first sentence of this Section 6.01(b) shall
not be affected by the commencement, public proposal, public disclosure or
communication to the Company of any Acquisition Proposal.
(c) Parent shall cause any and all shares of Company Common Stock owned
by Parent, Sub or any other Subsidiary of Parent to be voted in favor of
the approval of this Agreement.
Section 6.02. Access to Information; Confidentiality. The Company shall, and
shall cause each Company Subsidiary to afford to Parent, and to Parent's
officers, employees, accountants, counsel, financial advisors, financing
sources and other representatives, upon reasonable notice, reasonable access
during normal business hours during the period prior to the Effective Time to
all their respective properties, books, contracts, commitments, personnel and
records and, during such period, the Company shall, and shall cause each
Company Subsidiary to, furnish promptly to Parent such information concerning
its business, properties, assets, customers, consultants and personnel as
Parent may reasonably request; provided, however, that the Company may withhold
the documents and information described in the Company Disclosure Schedule to
the extent required to comply with the terms of a confidentiality agreement
with a third party in effect on the date of this Agreement; provided further,
that the Company shall use reasonable efforts to obtain, as promptly as
practicable, any consent from such third party required to permit the Company
to furnish such documents and information to Parent. The Company hereby
consents, and shall cause each Company Subsidiary to consent, to Parent and
Parent's officers, employees, accountants, counsel, financial advisors,
financing sources and other representatives contacting, in a reasonable
fashion, consultants to and customers of the Company and such Company
Subsidiary and will, upon reasonable notice from Parent, request such
consultants and customers to cooperate during normal business hours during the
period prior to the Effective Time with any requests made by or on behalf of
Parent. Subject to the requirements of Law, Parent shall, and shall cause its
officers, employees, agents, consultants and affiliates to, hold all
information obtained pursuant to this Agreement in confidence and in the event
of termination of this Agreement for any reason, Parent shall promptly return
or destroy all nonpublic documents obtained from Company and any copies made of
such documents for Parent and all documentation and other material prepared by
Parent or its advisors based on written nonpublic information furnished by
Company or its advisors shall be destroyed.
Section 6.03. Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties shall use all reasonable efforts to take, or
cause to be taken, all reasonable actions, and to do, or cause to be done,
and to assist and cooperate with the other parties in doing, all things
reasonably necessary, proper or
20
advisable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated hereby, including without
limitation (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making
of all necessary registrations and filings (including filings with
Governmental Entities, if any) and the taking of all reasonable steps as
may be necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by, any Governmental Entity, (ii) the obtaining of all
necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby, including, when reasonable, seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed and (iv) the execution and delivery
of any additional instruments necessary to consummate the transactions
contemplated hereby and to fully carry out the purposes of this Agreement;
provided, however, that the obligations set forth in this sentence shall
not be deemed to have been breached as a result of actions by the Company
expressly permitted under Section 5.02 or 8.01. In connection with and
without limiting the foregoing, the Company and the Company Board shall, at
the request of Parent: (i) take all action within its power reasonably
requested by Parent as necessary to ensure that no state takeover statute
or similar statute or regulation is or becomes applicable to this Agreement
or the transactions contemplated hereby, and (ii) if any state takeover
statute or similar statute or regulation becomes applicable to this
Agreement or the transactions contemplated hereby, take all action within
its power reasonably requested by Parent as necessary to ensure that the
transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the transactions
contemplated hereby. Nothing in this Agreement shall be deemed to require
any party to waive any substantial rights or agree to any substantial
limitation on its operations or to dispose of any significant asset or
collection of assets.
(b) The Company shall give prompt notice to Parent, and Parent or Sub
shall give prompt notice to the Company, of (i) any representation or
warranty made by it becoming untrue or inaccurate in any material respect
or (ii) the failure by it to comply with or satisfy in any material respect
any covenant, condition or agreement to be complied with or satisfied by it
under this Agreement; provided, however, that no such notification shall
affect the representations, warranties, covenants or agreements of the
parties or the conditions to the obligations of the parties under this
Agreement.
Section 6.04. Benefit Plans. Parent shall have sole discretion with respect
to the determination as to whether or when to terminate, merge or continue any
employee benefit plans and programs of Company after the Effective Time.
Nothing herein contained shall be construed to guarantee continued employment
to any Company Employee or change the "at-will" status of any Company Employee.
At the request of Parent, the Company shall (i) take all corporate action
reasonably required to terminate any 401(k) plan maintained by the Company or
any ERISA Affiliate in accordance with its terms and applicable law, including
without limitation ERISA and the Code, effective prior to the Effective Time
and (ii) take such corporate actions as are reasonably required to cause the
effects on options issued under the Company Stock Option Plans set forth in
Section 2.01(e).
Section 6.05. Indemnification; D&O Insurance, etc.
(a) Parent shall, to the fullest extent permitted by Law, cause the
Surviving Corporation (from and after the Effective Time) to honor all the
Company's obligations to indemnify, defend and hold harmless (including any
obligations to advance funds for expenses) the current and former directors
and officers of the Company and its Subsidiaries against all losses,
claims, damages or liabilities arising out of acts or omissions by any such
directors and officers occurring prior to the Effective Time to the maximum
extent that such obligations of the Company exist on the date of this
Agreement, whether pursuant to the Company Charter, the Company By-laws,
the BCL, individual indemnity agreements or otherwise, and such obligations
shall survive the Merger and shall continue in full force and effect in
accordance with the terms of the Company Charter, the Company By-laws, the
BCL and such individual indemnity agreements from the Effective Time until
the expiration of the applicable statute of limitations with respect to any
21
claims against such directors or officers arising out of such acts or
omissions. In the event a current or former director or officer of the
Company or any of its Subsidiaries is entitled to indemnification under
this Section 6.05(a), such director or officer shall be entitled to
reimbursement from the Company (from and after the Effective Time) or the
Surviving Corporation (from and after the Effective Time) for reasonable
attorney fees and expenses incurred by such director or officer in pursuing
such indemnification, including payment of such fees and expenses by the
Surviving Corporation or the Company, as applicable, in advance of the
final disposition of such action upon receipt of an undertaking by such
current or former director or officer to repay such payment if it shall be
adjudicated that such current or former director or officer was not
entitled to such payment.
(b) The Company will maintain, through the Effective Time, the Company's
existing directors' and officers' insurance in full force and effect
without reduction of coverage. From and after the Effective Time and for a
period of six years after the Effective Time, Parent shall cause to be
maintained in effect the current policies of directors' and officers'
liability insurance and indemnification maintained by the Company (provided
that Parent may substitute therefor policies with reputable and financially
sound carriers, which policies provide coverage of the types, in the
amounts and containing terms and conditions which are no less advantageous
than those maintained by the Company) with respect to claims arising from
or related to facts or events which occurred at or before the Effective
Time; provided, however, that Parent shall not be obligated to make annual
premium payments for such insurance to the extent such premiums exceed 200%
of the annual premiums paid as of the date hereof by the Company for such
insurance (such 200% amount, the "Maximum Premium"). If such insurance
coverage cannot be obtained at all, or can only be obtained at an annual
premium in excess of the Maximum Premium, Parent shall maintain the most
advantageous policies of directors' and officers' insurance obtainable for
an annual premium equal to the Maximum Premium. The Company represents to
Parent that the Maximum Premium is $1,080,500.
(c) The Articles of Organization of the Surviving Corporation shall
contain the provisions that are set forth in Section 6B of the Company
Charter, which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner
that would affect adversely the rights thereunder of individuals who at or
at any time prior to the Effective Time were directors, officers, employees
or other agents of the Company.
(d) If the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or
merger and the continuing or surviving entity does not assume the
obligations of the Surviving Corporation set forth in this Section 6.05, or
(ii) transfers all or substantially all of its properties and assets to any
Person, then, and in each such case, proper provision shall be made so that
the successors and assigns of the Surviving Corporation assume, as a matter
of law or otherwise, the obligations set forth in this Section 6.05.
(e) Parent guarantees that if for any reason the Company or the
Surviving Corporation, as the case may be, shall not meet its obligations
pursuant to this Section 6.05, it shall meet such obligations in full when
and as such obligations arise.
Section 6.06. Fees and Expenses.
(a) Except as otherwise provided in this Agreement, and whether or not
the transactions contemplated by this Agreement are consummated, all costs
and expenses incurred in connection with the transactions contemplated by
this Agreement shall be borne by the party incurring such costs and
expenses.
(b) The Company shall pay to Parent the amount of $3,000,000 by wire
transfer of immediately available funds as reimbursement of Parent's
expenses and as liquidated damages (the "Company Break-Up Fee") in the
event that:
(i) Parent or the Company terminates this Agreement pursuant to
Section 8.01(b)(i) and (x) at the time of such termination there
is a publicly announced Acquisition Proposal from a bona fide
22
proponent not affiliated or acting in concert with Parent or any
of Parent's Affiliates, which Acquisition Proposal has not been
withdrawn and (y) within six months of such termination the
Company enters into a definitive agreement with respect to any
alternative Acquisition Proposal; or
(ii) Parent or the Company terminates this Agreement pursuant to
Section 8.01(b)(iii) following the Company Stockholders Meeting
if (x) the stockholders of the Company shall have failed to
approve this Agreement and the Merger at the Company
Stockholders Meeting and (y) at the time of the Company
Stockholders Meeting there is a publicly announced Acquisition
Proposal from a bona fide proponent not affiliated or acting in
concert with Parent or any of Parent's Affiliates, which
Acquisition Proposal has not been withdrawn and (z) within six
months of such termination the Company enters into a definitive
agreement with respect to any alternative Acquisition Proposal;
or
(iii) Parent terminates this Agreement pursuant to Section 8.01(c); or
(iv) Parent terminates this Agreement pursuant to Section 8.01(d); or
(v) The Company terminates this Agreement pursuant to Section
8.01(e).
The Company Break-Up Fee shall be paid within three (3) business days after
a termination by Parent pursuant to Section 8.01(c) or 8.01(d) or a
termination by the Company pursuant to Section 8.01(e); and in the case of
the events specified in clause (i) or clause (ii) of this Section 6.06(b)
shall be made within three business days of the execution of such
definitive agreement.
Section 6.07. Public Announcements. Parent and Sub, on the one hand, and the
Company, on the other hand, shall consult with each other before issuing, and
provide each other the opportunity to review and comment upon, any press
release or other public statements with respect to the transactions
contemplated hereby and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by
applicable Law (including foreign regulations relating to competition), court
process or by obligations pursuant to any listing agreement with any national
securities exchange.
Section 6.08. Actions Respecting Commitment Letters; Financing.
(a) Parent and Sub shall use commercially reasonable efforts to perform
all obligations required to be performed by them in accordance with and
pursuant to the Commitment Letter and shall not amend, terminate or waive
any provisions under such Commitment Letter without the Company's consent
if the effect thereof would be reasonably likely to prevent or materially
delay the consummation of the transactions contemplated hereby.
(b) Parent and Sub shall use their commercially reasonable efforts to
obtain the financing on the terms set forth in the Commitment Letter;
provided, however, that in the event that the sources of debt financing
identified in the Commitment Letter indicate that they are not willing to
consummate the financing, Parent and Sub shall use commercially reasonable
efforts to obtain substitute financing with other nationally recognized
financial institutions ("Substitute Financing"), provided that such
Substitute Financing is not on terms materially more burdensome to Parent
and Sub. Parent and Sub shall from time to time provide such information as
the Company may reasonably request regarding the status of the financing of
the Merger and related negotiations.
(c) Parent and Sub shall provide prompt written notice to the Company of
the receipt of notification by the contemplated lender(s) under the
Commitment Letter or in connection with any Substitute Financing, of its or
their unwillingness or intended unwillingness to provide the financing
described in the Commitment Letter and, in each case, the stated reasons
therefor, if known (such written notice to be provided as promptly as
practicable and, in any event, within one business day of Parent or Sub
becoming aware of such event).
23
(d) Except as set forth in Schedule 6.08 or in the ordinary course of
business, Parent and Sub shall not, at any time prior to the earlier of the
Effective Time or the termination of this Agreement in accordance with its
terms, directly or indirectly: (i) declare, set aside or pay any dividends
on, or make any other distributions in respect of, any of its capital
stock, (ii) purchase, redeem or otherwise acquire any shares of capital
stock of Parent or Sub or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities, (iii)
create or contribute cash or other property to any subsidiary, (iv) make
any loans to or investments in any Person (other than the acquisition of
shares of the Company through the transactions contemplated hereby) or (v)
make any other payments or distributions of cash or other property to any
of its Affiliates.
(e) Company shall provide all information reasonably requested by Parent
or Sub in connection with the financing to be supplied pursuant to the
Commitment Letter.
Section 6.09. Rights Agreement. The Company Board shall take all action
requested in writing by Parent in order to render the Company Rights
inapplicable to the transactions contemplated hereby. Except as approved in
writing by Parent, the Company Board shall not (i) amend the Company Rights
Agreement, (ii) redeem the Company Rights or (iii) take any action with
respect to, or make any determination under, the Company Rights Agreement, in
each case in a manner adverse to Parent or Sub.
Section 6.10. Stockholder Litigation. The Company shall give Parent the
opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and/or its directors relating to this Agreement
or the transactions contemplated hereby; provided, however, that Parent shall
have the right to prevent the Company from entering into any such settlement
without Parent's consent, which consent shall not be unreasonably withheld or
delayed, if Parent agrees to indemnify the Company and each director of the
Company for the amount of its, his or her liability, if any, arising from the
underlying claim, net of any insurance proceeds received by such Person, that
is in excess of the amount for which such Person would have been liable under
such settlement.
Section 6.11. Lease Termination. The Company shall exercise its termination
rights under certain leases of real property as set forth in Section 6.11 of
the Company Disclosure Schedule.
ARTICLE VII
Conditions Precedent
Section 7.01. Conditions to Each Party's Obligation To Effect The
Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or express written waiver on or prior to the
Closing Date of the following conditions:
(a) Stockholder Approval. The Company shall have obtained the Company
Stockholder Approval.
(b) Antitrust. The waiting period (and any extension thereof) applicable
to the Merger under the HSR Act, if the HSR Act is applicable, shall have
been terminated or shall have expired. Any consents, approvals and filings
under any other foreign antitrust Law the absence of which would prohibit
the consummation of Merger, shall have been obtained or made.
(c) No Injunctions or Restraints. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or
permanent injunction or other order enacted, entered, promulgated, enforced
or issued by any Governmental Entity or other legal restraint or
prohibition preventing the consummation of the Merger shall be in effect;
provided, however, that prior to asserting this condition each of the
parties shall have used all reasonable efforts to prevent the entry of any
such injunction or other order and to appeal as promptly as possible any
such injunction or other order that may be entered.
24
Section 7.02. Conditions Precedent to Parent's and Sub's Obligations. Parent
and Sub shall be obligated to effect the Merger only if each of the following
conditions is satisfied at or prior to the Closing Date, unless any such
condition is waived in writing by Parent:
(a) Representations and Warranties. The representations and warranties
of Company set forth in this Agreement shall be true and correct in all
material respects (without giving duplicative effect to any materiality
qualification contained in the applicable representation or warranty other
than representations and warranties contained in Section 3.20 and the first
sentence of each of Section 3.18 and 3.19, which shall be true and correct
as written) as of the Closing Date with the same force and effect as though
made again at and as of the Closing Date, except for any representations
and warranties that address matters only as of a particular date (which
shall remain true and correct in all material respects (without giving
duplicative effect to any materiality qualification contained in the
applicable representation or warranty) as of such date); and the Parent
shall have received a certificate signed on behalf of the Company by a duly
authorized officer of the Company to such effect.
(b) Performance of Obligations of Company. Company shall have performed
in all material respects all obligations required to be performed by it
under this Agreement at or prior to the Closing Date; and the Parent shall
have received a certificate signed on behalf of the Company by a duly
authorized officer of the Company to such effect.
(c) Absence of Material Adverse Changes. There shall not have occurred
any change in the business, assets, financial condition or results of
operations of Company or any of its Subsidiaries which has had, or is
reasonably likely to have, individually or in the aggregate, a Company
Material Adverse Effect.
(d) Financing. The financing contemplated in the Commitment Letter, or
the Substitute Financing, shall have been consummated.
(e) Demand for Payment. The Company shall have made demand for payment
under the Promissory Note dated April 18, 2000 by G. ▇▇▇▇ ▇▇▇▇▇▇ in the
principal amount of $1,860,000, such demand to require payment on or before
the Closing. If elected by G. ▇▇▇▇ ▇▇▇▇▇▇ in writing such payment may be
made by reducing the amount to be received pursuant to Section 2.01(c)
hereof with respect to shares of Company Common Stock held by him.
Section 7.03. Conditions to Obligation of Company. Company shall be
obligated to effect the Merger only if each of the following conditions is
satisfied at or prior to the Closing Date, unless any such condition is waived
in writing by Company:
(a) Representations and Warranties. The representations and warranties
of Parent and Sub set forth in this Agreement shall be true and correct in
all material respects (without giving duplicative effect to any materiality
qualification contained in the applicable representation or warranty) as of
the Closing Date with the same force and effect as though made again at and
as of the Closing Date, except for any representations and warranties that
address matters only as of a particular date (which shall remain true and
correct in all material respects (without giving duplicative effect to any
materiality qualification contained in the applicable representation or
warranty) as of such date); and the Company shall have received a
certificate signed on behalf of the Parent by a duly authorized officer of
the Parent to such effect.
(b) Performance of Obligations of Parent and Sub. Parent and Sub shall
each have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date; and
the Company shall have received a certificate signed on behalf of the
Parent by a duly authorized officer of the Parent to such effect.
25
ARTICLE VIII
Termination, Amendment and Waiver
Section 8.01. Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after receipt of Company
Stockholder Approval:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if the Merger is not consummated on or before December 31, 2001,
provided however, that if the Proxy Statement is selected for
review by the staff of the SEC, such date shall be extended
until February 28, 2002, provided that this extension shall not
be available to a party that is not in compliance with Section
6.01(a);
(ii) if any Governmental Entity shall have issued an order, decree or
ruling or takes any other action enjoining, restraining or
otherwise prohibiting the Merger and such order, decree, ruling
or other action shall have become final and nonappealable; or
(iii) if the stockholders of the Company shall fail to approve this
Agreement and the Merger at the Company Stockholders Meeting;
(c) by Parent, if (i) the representations and warranties of the Company
set forth in this Agreement are not true and correct in all material
respects (without giving duplicative effect to any materiality
qualification contained in the applicable representations and warranties)
as of the date hereof (or, in the case of any representations and
warranties that address matters only as of a particular date other than the
date hereof, as of such other specified date) and such misrepresentations
cannot be or have not been cured within the 30 day period (or such longer
period as may be expressly permitted by Parent) following the giving by
Parent of written notice to the Company of such breach or (ii) the Company
violates or fails to perform in any material respect its covenants
contained in Section 5.02, which breach or failure to perform cannot be or
has not been cured within the 30 day period (or such longer period as may
be expressly permitted by Parent) following the giving by Parent of written
notice to the Company of such violation or breach or (iii) the Company
violates or fails to perform in any material respect any of its other
covenants contained in this Agreement, which breach or failure to perform
would give rise to the failure of a condition set forth in Section 7.02(b)
and cannot be or has not been cured within the 30 day period (or such
longer period as may be expressly permitted by Parent) following the giving
by Parent of written notice to the Company of such violation or breach;
(d) by Parent, if the Company Board/Special Committee (i) withdraws or
modifies in a manner adverse to Parent or Sub, or publicly resolves to
withdraw or modify in a manner adverse to Parent or Sub, its approval or
recommendation of this Agreement or the Merger, (ii) fails to recommend to
the Company's stockholders that they approve the Merger and give the
Company Stockholder Approval, (iii) publicly approves or recommends, or
resolves to approve or recommend, any alternative Acquisition Proposal or
(iv) in violation of the provisions of Section 6.01(b), fails to reconfirm
the recommendation referred to in clause (ii) above if requested in
accordance with the applicable provisions of Section 6.01(b), or fails to
publicly announce (in accordance with the applicable provisions of Section
6.01(b)) that the Company Board/Special Committee is not recommending any
alternative Acquisition Proposal;
(e) by the Company pursuant to Section 5.02;
(f) by the Company, if either (i) the representations and
warranties of Parent and Sub set forth in this Agreement are not true and
correct in all material respects (without giving duplicative effect to any
materiality qualification contained in the applicable representations and
warranties) as of the date hereof (or, in the case of any representations
and warranties that address matters only as of a particular date other than
the date hereof, as of such other specified date) and such
misrepresentations cannot be or have not been cured within the 30 day
period (or such longer period as may be expressly permitted by the
26
Company) following the giving by the Company of written notice to Parent of
such breach or (ii) Parent or Sub violates or fails to perform in any
material respect any of their covenants contained in this Agreement, which
breach or failure to perform would give rise to the failure of a condition
set forth in Section 7.03(b) and cannot be or has not been cured within the
30 day period (or such longer period as may be expressly permitted by the
Company) following the giving by the Company of written notice to Parent of
such violation or breach; or
(g) by either the Company or Parent if any of the events specified in
Section 6.08(c) occurs and notwithstanding the commercially reasonable
efforts of Parent and Sub to secure Substitute Financing as contemplated by
Section 6.08(b) Parent and Sub are not able to obtain such Substitute
Financing within thirty (30) days of delivery of notice pursuant to Section
6.08(c).
Section 8.02. Procedure and Effect of Termination. In the event of the
termination of this Agreement by Company or Parent as provided in Section 8.01,
this Agreement shall forthwith become void and have no effect other than
Section 3.14(a), Section 4.06, the confidentiality provisions contained in
Section 6.02, Section 6.06, this Section 8.02 and Article IX, which provisions
shall survive such termination, and all obligations of the parties hereunder
(other than pursuant to such enumerated provisions) shall terminate without any
liability or obligation on the part of Parent, Sub or the Company, to any
party, except that such termination will not affect the respective rights or
obligations of the parties with respect to any breach of any representation,
warranty or covenant set forth in this Agreement prior to such termination.
Section 8.03. Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties. This Agreement
may be so amended by the parties at any time before or after receipt of the
Company Stockholder Approval; provided, however, that after receipt of the
Company Stockholder Approval, there shall be made no amendment that by Law
requires further approval by the stockholders of the Company without the
further approval of such stockholders; and provided, further, that after this
Agreement is adopted by the Company's stockholders, no such amendment or
modification shall be made that reduces the amount or changes the form of
Merger Consideration or otherwise materially and adversely affects the rights
of the Company's stockholders hereunder, without the further approval of such
stockholders.
Section 8.04. Extension; Waiver. At any time prior to the Effective Time,
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the proviso of
Section 8.03, waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
Section 8.05. Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement, an amendment of this Agreement pursuant to
Section 8.03 or an extension or waiver pursuant to Section 8.04 shall, in order
to be effective, require in the case of Parent, Sub or the Company, action by
its Board of Directors or the duly authorized designee of its Board of
Directors.
ARTICLE IX
General Provisions
Section 9.01. Nonsurvival of Representations and Warranties. Except as
provided in the last sentence of this Section 9.01, none of the
representations, warranties and covenants in this Agreement (including any
rights arising out of any breach of such representations, warranties and
covenants) or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time. This Section 9.01 (including any rights arising out
of any breach of such representations and warranties) shall not limit any
covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.
27
Section 9.02. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given (i) seven days after mailing by certified mail, (ii) when delivered by
hand, (iii) upon confirmation of receipt by telecopy or (iv) one business day
after sending by overnight delivery service, to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) If to Company:
Renaissance Worldwide, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Parent or Sub:
Aquent, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇ and ▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9.03. Definitions. For purposes of this Agreement:
An "Affiliate" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person. As used in this definition the
term "control" (including the terms "controlled by" and "under common control
with") means, with respect to the relationship between or among two or more
Persons, the possession, directly or indirectly or as trustee or executor, of
the power to direct or cause the direction of the affairs or management of a
Person, whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise, including, without limitation, the
ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of
such Person.
A "Company Material Adverse Effect" means any change, effect, event,
occurrence, state of facts or development that is materially adverse to the
business, assets, financial condition, or results of operations of the Company
and the Company Subsidiaries, or that materially and adversely affects the
ability of the Company to perform its obligations under this Agreement and
consummate the transactions contemplated hereby; provided however, that none of
the following shall be deemed in themselves, either alone or in combination, to
constitute, and none of the following shall be taken into account in
determining whether there has been or will be a Company Material Adverse
Effect: (a) any change in the market price or trading volume of Company's
28
stock after the date hereof, (b) any adverse change, effect, event, occurrence,
state of facts or development to the extent attributable to the announcement or
pendency of the transactions contemplated hereby (including any cancellations
of or delays in customer orders, any reduction in sales, any disruption in
supplier, distributor, partner or similar relationships or any loss of
employees); (c) any adverse change, effect, event, occurrence, state of facts
or development attributable to conditions affecting the industries in which
Company participates, the economy of the United States as a whole or foreign
economies in any locations where the Company or any Company Subsidiary has
material operations or sales which does not have a disproportionate effect on
the Company and its Subsidiaries, (d) any adverse change, effect, event,
occurrence, state of facts or development arising from or relating to
compliance with the terms of, or the taking of any action required by, this
Agreement, or (e) any adverse change, effect, event, occurrence, state of facts
or development arising from any action taken by Parent, Sub or any of their
respective directors, officers, employees, agents or Affiliates.
A "Person" means any individual, firm, corporation, partnership, company,
limited liability company, trust, joint venture, association, Governmental
Entity or other entity.
A "Subsidiary" of any Person means another Person, an amount of the voting
securities, other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first
Person.
"To the Knowledge" of any specified corporation means to the actual
knowledge of any current director or executive officer of such corporation.
Section 9.04. Definitions Cross Reference Table. The following terms defined
elsewhere in this Agreement in the Sections set forth below shall have the
respective meanings therein defined:
Term Definition
---- ------------
"Affiliate"................................................ Section 9.03
"Agreement"................................................ Preamble
"Appraisal Provisions"..................................... Section 2.01(d)
"Appraisal Shares"......................................... Section 2.01(d)
"Acquisition Proposal"..................................... Section 5.02(a)
"Articles of Merger"....................................... Section 1.03
"BCL"...................................................... Section 1.03
"Buyer Disclosure Schedules"............................... Article IV
"Certificates"............................................. Section 2.02(b)
"Closing".................................................. Section 1.02
"Closing Date"............................................. Section 1.04
"Code"..................................................... Section 3.10(b)
"Commitment Letter"........................................ Section 4.07
"Company".................................................. Preamble
"Company Acquisition Agreement"............................ Section 5.02(b)
"Company Benefit Plans".................................... Section 3.10(a)
"Company Board"............................................ Section 3.04(b)
"Company Break-Up Fees".................................... Section 6.06(b)
"Company By-laws".......................................... Section 3.01
"Company Capital Stock".................................... Section 3.03
"Company Charter".......................................... Section 3.01
"Company Common Stock"..................................... Preamble
"Company Disclosure Schedule".............................. Article III
"Company Intellectual Property Rights"..................... Section 3.13(b)
"Company Material Adverse Effect".......................... Section 9.03
29
Term Definition
---- --------------
"Company Notice"........................................... Section 5.02(c)
"Company Rights"........................................... Section 3.03
"Company Rights Agreement"................................. Section 3.03
"Company SEC Documents".................................... Section 3.06
"Company Stock Options".................................... Section 3.03
"Company Stock Option Plan"................................ Section 3.16
"Company Stock Purchase Plan".............................. Section 3.16
"Company Stockholder Approval"............................. Section 3.04(c)
"Company Stockholders Meeting"............................. Section 6.01(b)
"Company Subsidiaries"..................................... Section 3.01
"Consent".................................................. Section 3.05(b)
"Contract"................................................. Section 3.05(a)
"Effective Time"........................................... Section 1.05
"ERISA".................................................... Section 3.10(a)
"Exchange Act"............................................. Section 3.06
"Exchange Fund"............................................ Section 2.02(a)
"Filed Company SEC Documents".............................. Section 3.08
"Financing"................................................ Section 4.07
"GAAP"..................................................... Section 3.06
"Governmental Entity"...................................... Section 3.05(b)
"HSR Act".................................................. Section 3.05(b)
"June 1 Merger Agreement".................................. Section 3.04(d)
"Judgment"................................................. Section 3.05(a)
"Law"...................................................... Section 3.05(a)
"Leases"................................................... Section 3.18
"Liens".................................................... Section 3.02
"Maximum Premium".......................................... Section 6.05(b)
"Merger"................................................... Preamble
"Merger Consideration"..................................... Section 2.01(c)
"Parent"................................................... Preamble
"Parent Material Adverse Effect"........................... Section 4.01
"Paying Agent"............................................. Section 2.02(a)
"Person"................................................... Section 9.03
"Proxy Statement".......................................... Section 3.05(b)
"SEC"...................................................... Section 3.05(b)
"Securities Act"........................................... Section 3.06
"Series A Preferred Stock"................................. Section 3.03
"Special Committee"........................................ Recitals
"Sub"...................................................... Preamble
"Subsidiary"............................................... Section 9.03
"Substitute Financing"..................................... Section 6.08(b)
"Superior Proposal"........................................ Section 5.02(b)
"Surviving Corporation".................................... Section 1.01
"Tax Return"............................................... Section 3.09(d)
"Taxes".................................................... Section 3.09(d)
"Third-Party Intellectual Property Rights"................. Section 3.13(b)
"To the Knowledge"......................................... Section 9.03
"Voting Company Debt"...................................... Section 3.03
Section 9.05. Interpretation. When a reference is made in this Agreement to
a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents and headings
30
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
words "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".
Section 9.06. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule or law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
Section 9.07. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
Section 9.08. Entire Agreement; No Third-Party Beneficiaries. This
Agreement, taken together with the Company Disclosure Schedule, (a) constitute
the entire agreement, and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the transactions
contemplated hereby and (b) except for the provisions of Article II, Section
6.04 and Section 6.05, is not intended to confer upon any Person other than the
parties any rights or remedies.
Section 9.09. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of The Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
Section 9.10. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any of or all its rights, interests and obligations under this
Agreement to Parent or to any direct or indirect wholly owned Subsidiary of
Parent, but no such assignment shall relieve Sub of any of its obligations
under this Agreement. Any purported assignment without such consent shall be
void. Subject to the preceding sentences, this Agreement will be binding upon,
inure to the benefit of, and be enforceable by, the parties and their
respective successors and assigns.
Section 9.11. Enforcement. The parties 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 of this Agreement in any Massachusetts state court or
any Federal court located in The Commonwealth of Massachusetts, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
Personal jurisdiction of any Massachusetts state court or any Federal court
located in The Commonwealth of Massachusetts in the event any dispute arises
out of this Agreement or any transactions contemplated hereby, (b) agrees that
it will not attempt to deny or defeat such Personal jurisdiction by motion or
other request for leave from any such court, (c) agrees that it will not bring
any action relating to this Agreement or any transactions contemplated hereby
in any court other than any Massachusetts state court or any Federal court
sitting in The Commonwealth of Massachusetts and (d) waives any right to trial
by jury with respect to any action related to or arising out of this Agreement
or any transactions contemplated hereby.
Section 9.12. Consents. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, such consent shall be given in writing in
a manner consistent with the requirements for a waiver
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of compliance as set forth in Sections 8.04 and 8.05. Sub hereby agrees that
any consent or waiver of compliance given by Parent hereunder shall be
conclusively binding upon it, whether given expressly on its behalf or not.
Section 9.13. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 9.14. Parent Guarantee.
(a) Parent hereby agrees to cause Sub and the Surviving Corporation to
perform in full all of their obligations (including, without limitation,
the obligation to pay any amounts due pursuant to this Agreement). The
Parent hereby further unconditionally guarantees the full and punctual
payment of all amounts payable by Sub or the Surviving Corporation under
this Agreement. Upon failure by Sub or the Surviving Corporation to pay
punctually any such amount, Parent shall forthwith on demand pay the amount
not so paid.
(b) The obligations of the Parent hereunder shall be unconditional and
absolute and, without limiting the generality of the foregoing, shall not
be released, discharged or otherwise affected by any change in the
corporate existence, structure or ownership of Sub or the Surviving
Corporation, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting Sub or the Surviving Corporation or their assets or
any resulting release or discharge of any obligation of the Sub or the
Surviving Corporation contained in this Agreement.
(c) The Parent irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any person or entity
against the Sub or the Surviving Corporation or any other person or entity.
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IN WITNESS WHEREOF, Parent, Sub and Company have caused this Agreement and
Plan of Merger to be executed as an instrument under seal as of the date first
written above by their respective officers thereunto duly authorized.
Aquent, Inc.
By: _________________________________
Name:
Title:
Jetelectro Acquisition Corp.
By: _________________________________
Name:
Title:
Renaissance Worldwide, INC.
By: _________________________________
Name:
Title:
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