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Exhibit 1
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AGREEMENT AND PLAN OF MERGER
AMONG
VIAD CORP,
PINE VALLEY ACQUISITION CORPORATION
AND
MONEYGRAM PAYMENT SYSTEMS, INC.
DATED AS OF APRIL 4, 1998
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TABLE OF CONTENTS
PAGE
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ARTICLE I
THE OFFER
Section 1.01. The Offer................................................... 1
Section 1.02. Company Action.............................................. 3
ARTICLE II
THE MERGER
Section 2.01. The Merger.................................................. 4
Section 2.02. Effective Time; Closing..................................... 4
Section 2.03. Effect of the Merger........................................ 5
Section 2.04. Certificate of Incorporation; By-laws....................... 5
Section 2.05. Directors and Officers...................................... 5
Section 2.06. Conversion of Securities.................................... 5
Section 2.07. Employee Stock Options...................................... 6
Section 2.08. Dissenting Shares........................................... 6
Section 2.09. Surrender of Shares; Stock Transfer Books................... 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.01. Organization and Qualification; Subsidiaries................ 8
Section 3.02. Certificate of Incorporation and By-laws.................... 9
Section 3.03. Capitalization.............................................. 9
Section 3.04. Authority Relative to this Agreement........................ 9
Section 3.05. No Conflict; Required Filings and Consents.................. 10
Section 3.06. Compliance.................................................. 11
Section 3.07. SEC Filings; Financial Statements........................... 11
Section 3.08. Absence of Certain Changes or Events........................ 12
Section 3.09. Absence of Litigation....................................... 13
Section 3.10. Employee Benefit Plans...................................... 13
Section 3.11. Labor Matters............................................... 15
Section 3.12. Offer Documents; Schedule 14D-9; Proxy Statement............ 15
Section 3.13. Taxes....................................................... 16
Section 3.14. Brokers..................................................... 16
Section 3.15. Certain Contracts........................................... 16
Section 3.16. Real Property and Leases.................................... 17
Section 3.17. Trademarks, Patents, Copyrights and Intellectual Property... 17
Section 3.18. Environmental Matters....................................... 18
Section 3.19. Statute Takeover Statutes................................... 18
Section 3.20. Insurance................................................... 18
Section 3.21. Agents...................................................... 19
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Section 4.01. Corporate Organization...................................... 19
Section 4.02. Authority Relative to this Agreement........................ 20
Section 4.03. No Conflict; Required Filings and Consents.................. 20
Section 4.04. Financing................................................... 21
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PAGE
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Section 4.05. Offer Documents; Proxy Statement............................ 21
Section 4.06. Brokers..................................................... 21
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.01. Conduct of Business by the Company Pending the Merger....... 22
Section 5.02. Additional Covenants........................................ 24
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01. Stockholders' Meeting....................................... 25
Section 6.02. Proxy Statement............................................. 26
Section 6.03. Company Board Representation; Section 14(f)................. 26
Section 6.04. Access to Information; Confidentiality...................... 27
Section 6.05. No Solicitation of Transactions............................. 27
Section 6.06. Employee Benefits Matters................................... 29
Section 6.07. Directors' and Officers' Indemnification and Insurance...... 29
Section 6.08. Further Action; Reasonable Best Efforts..................... 30
Section 6.09. Public Announcements........................................ 30
Section 6.10. Confidentiality Agreement................................... 30
Section 6.11. SEC and Stockholder Filings................................. 31
Section 6.12. Takeover Statutes........................................... 31
Section 6.13. Certain Actions............................................. 31
ARTICLE VII
CONDITIONS TO THE MERGER
Section 7.01. Conditions to the Merger.................................... 31
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.01. Termination................................................. 32
Section 8.02. Effect of Termination....................................... 33
Section 8.03. Fees........................................................ 33
Section 8.04. Amendment................................................... 34
Section 8.05. Waiver...................................................... 34
ARTICLE IX
GENERAL PROVISIONS
Section 9.01. Non-Survival of Representations, Warranties and
Agreements.................................................. 34
Section 9.02. Notices..................................................... 35
Section 9.03. Certain Definitions......................................... 36
Section 9.04. Severability................................................ 38
Section 9.05. Entire Agreement; Assignment................................ 39
Section 9.06. Parties in Interest......................................... 39
Section 9.07. Governing Law............................................... 39
Section 9.08. Headings.................................................... 39
Section 9.09. Counterparts................................................ 39
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ANNEX A
Conditions to the Offer
ANNEX B
Agreement Respecting the Plans and Other Employee Benefit Matters
SCHEDULES
3.01........................................................ Subsidiaries
3.03........................................................ Stock Options
3.04(b)..................................................... Company Approvals
3.05(a)..................................................... Conflicts
3.05(b)..................................................... State/Foreign Regulatory
Consents/Notices
3.06........................................................ Compliance
3.07(c)..................................................... Financials
3.08........................................................ Certain Changes or Events
3.09........................................................ Litigation
3.10(a)..................................................... Employee Benefits Plans
3.10(f)..................................................... WARN Disclosure
3.10(g)..................................................... Foreign Benefit Plans
3.13........................................................ Taxes
3.15........................................................ First Data Corporation Agreements
3.17(b)..................................................... Intellectual Property
3.17(c)..................................................... Intellectual Property
3.20........................................................ Insurance
3.21........................................................ Agents
5.01(g)..................................................... Capital Expenditures
9.03........................................................ Material Adverse Affect
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GLOSSARY OF DEFINED TERMS(NOT PART OF THIS AGREEMENT)
DEFINED TERM LOCATION OF DEFINITION
------------ ----------------------
Acquisition Proposal........................................ sec. 6.05(a)
Affiliate................................................... sec. 9.03(a)
Agents...................................................... sec. 3.21
Agreement................................................... Preamble
American Express............................................ sec. 5.01(j)
Banamex..................................................... sec. 3.15
Beneficial Owner............................................ sec. 9.03(b)
Blue Sky Laws............................................... sec. 3.05(b)
Board....................................................... Recitals
Business Day................................................ sec. 9.03(c)
Certificate of Merger....................................... sec. 2.02
Certificates................................................ sec. 2.09(b)
Code........................................................ sec. 9.03(d)
Company..................................................... Preamble
Company Approvals........................................... sec. 3.04(b)
Company Common Stock........................................ Recitals
Company Stock Option........................................ sec. 2.07
Company Stock Option Plans.................................. sec. 2.07
Confidentiality Agreement................................... sec. 6.04(c)
Control..................................................... sec. 9.03(e)
Delaware Law................................................ Recitals
Dissenting Shares........................................... sec. 2.08
Effective Time.............................................. sec. 2.02
Environmental Laws.......................................... sec. 9.03(f)
Environmental Permits....................................... sec. 3.18
ERISA....................................................... sec. 3.10(a)
Exchange Act................................................ sec. 1.02(b)
Fee......................................................... sec. 8.03(a)
Foreign Plan................................................ sec. 3.10(g)
Governmental Authority...................................... sec. 9.03(g)
Hazardous Substances........................................ sec. 9.03(h)
HSR Act..................................................... sec. 3.05(b)
Indemnified Parties......................................... sec. 6.07(b)
Intellectual Property....................................... sec. 3.17(b)
IRS......................................................... sec. 3.10(a)
Material Adverse Effect..................................... sec. 9.03(i)
Merger...................................................... Recitals
Merger Consideration........................................ sec. 2.06(a)
Minimum Condition........................................... sec. 1.01(a)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇.............................................. sec. 1.02(a)
1997 Balance Sheet.......................................... sec. 3.07(c)
Offer....................................................... Recitals
Offer Documents............................................. sec. 1.01(b)
Offer to Purchase........................................... sec. 1.01(b)
Option Spread............................................... sec. 2.07
Parent...................................................... Preamble
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DEFINED TERM LOCATION OF DEFINITION
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Paying Agent................................................ sec. 2.09(a)
Per Share Amount............................................ Recitals
Person...................................................... sec. 9.03(j)
Plans....................................................... sec. 3.10(a)
Pre-Offer Approvals......................................... sec. 3.05(b)
Proxy Statement............................................. sec. 3.12
Purchaser................................................... Preamble
Returns..................................................... sec. 9.03(k)
Schedule 14D-1.............................................. sec. 1.01(b)
Schedule 14D-9.............................................. sec. 1.02(a)
SEC......................................................... sec. 9.03(l)
SEC Reports................................................. sec. 3.07(a)
SEC Rules................................................... sec. 9.03(m)
Securities Act.............................................. sec. 3.07(a)
Shares...................................................... Recitals
Stockholders' Meeting....................................... sec. 6.01(a)
Subsidiary.................................................. sec. 9.03(n)
Superior Proposal........................................... sec. 6.05(b)
Surviving Corporation....................................... sec. 2.01
Takeover Statute............................................ sec. 6.12
Tax......................................................... sec. 9.03(o)
Taxpayer.................................................... sec. 3.13
Transactions................................................ sec. 3.04(a)
WARN........................................................ sec. 3.10(f)
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AGREEMENT AND PLAN OF MERGER dated as of April 4, 1998 (this "Agreement")
among VIAD CORP, a Delaware corporation ("Parent"), PINE VALLEY ACQUISITION
CORPORATION, a Delaware corporation and a wholly owned Subsidiary of Parent
("Purchaser"), and MONEYGRAM PAYMENT SYSTEMS, INC., a Delaware corporation (the
"Company").
WHEREAS, the Boards of Directors of Parent, Purchaser and the Company have
each determined that it is in the best interests of their respective
stockholders for Parent to acquire the Company upon the terms and subject to the
conditions set forth herein; and
WHEREAS, in furtherance of such acquisition, it is proposed that Purchaser
shall make a cash tender offer (the "Offer") to acquire all the issued and
outstanding shares of Common Stock, par value $0.01 per share, of the Company
("Company Common Stock") (such shares of Company Common Stock being hereinafter
collectively referred to as "Shares") for $17.00 per Share (such amount, or any
greater amount per Share paid pursuant to the Offer, being hereinafter referred
to as the "Per Share Amount") net to the seller in cash, upon the terms and
subject to the conditions of this Agreement and the Offer; and
WHEREAS, the Board of Directors of the Company (the "Board") has
unanimously approved the making of the Offer and resolved and agreed to
recommend that holders of Shares tender their Shares pursuant to the Offer; and
WHEREAS, also in furtherance of such acquisition, the Boards of Directors
of Parent, Purchaser and the Company have each approved the merger (the
"Merger") of Purchaser with and into the Company in accordance with the General
Corporation Law of the State of Delaware ("Delaware Law") following the
consummation of the Offer and upon the terms and subject to the conditions set
forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
Section 1.01. The Offer. (a) Upon the terms, and subject to the conditions
of this Agreement, Purchaser shall commence the Offer as promptly as reasonably
practicable after the date hereof, but in no event later than five Business Days
after the initial public announcement of Purchaser's intention to commence the
Offer. The obligation of Purchaser to accept for payment and pay for Shares
tendered pursuant to the Offer shall be subject to the condition (the "Minimum
Condition") that at least the number of Shares that when added to the Shares
already owned by Parent shall constitute a majority of the then outstanding
Shares on a fully diluted basis (including, without limitation, all Shares
issuable upon the conversion of any convertible securities or upon the exercise
of any options, warrants or rights) shall have been validly tendered and not
withdrawn prior to the expiration of the Offer and also shall be subject to the
satisfaction of the other conditions set forth in Annex A hereto. Purchaser
expressly reserves the right to waive any such condition, to increase the price
per Share payable in the Offer, and to make any other changes in the terms and
conditions of the Offer; provided, however, that the Minimum Condition may not
be waived without the prior approval of the Company and that no change may be
made which decreases the price per Share payable in the Offer or which reduces
the maximum number of Shares to be purchased in the Offer or which imposes
conditions to the Offer in addition to those set forth in Annex A hereto.
Notwithstanding the foregoing, Purchaser may, without the consent of the
Company, (i) extend the Offer beyond the scheduled expiration date (the initial
scheduled expiration date being 20 Business Days following the commencement of
the Offer computed in accordance with SEC Rules) if, at the scheduled expiration
date of the Offer, any of the conditions to Purchaser's obligation to accept for
payment, and to pay for, the Shares, shall not be satisfied or waived, (ii)
extend the Offer for any period required by the SEC Rules applicable to the
Offer, or (iii) extend the Offer for an aggregate period of not more than 10
Business Days beyond the latest applicable date that would otherwise be
permitted under clause (i) or (ii) of this sentence, if as of such date, all of
the conditions to Purchaser's obligations to accept for payment, and to pay for,
the Shares are satisfied or waived, but the
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number of Shares validly tendered and not withdrawn pursuant to the Offer equals
75 percent or more, but less than 90 percent, of the outstanding Shares on a
fully diluted basis; provided, however, that (A) if, on the initial scheduled
expiration date of the Offer, the sole condition remaining unsatisfied is either
(x) the failure of the waiting period under the HSR Act to have expired or been
terminated, or (y) the failure to obtain a Pre-Offer Approval, the Purchaser
shall extend the Offer from time to time until five Business Days after the
later of expiration or termination of the waiting period under the HSR Act or
the receipt of all Pre-Offer Approvals and (B) if the sole condition remaining
unsatisfied on the initial scheduled expiration date of the Offer is the
condition set forth in paragraph (e) of Annex A, the Purchaser shall, so long as
the breach can be cured and the Company is vigorously attempting to cure such
breach, extend the Offer from time to time until five Business Days after such
breach is cured (provided that Purchaser shall not be required to extend the
Offer under A or B beyond 45 calendar days after such initial scheduled
expiration date). The Per Share Amount shall, subject to applicable withholding
of taxes, be net to the seller in cash, upon the terms and subject to the
conditions of the Offer. Subject to the terms and conditions of the Offer,
Purchaser shall pay, as promptly as practicable after expiration of the Offer,
for all Shares validly tendered and not withdrawn.
(b) As soon as reasonably practicable on the date of commencement of the
Offer, Purchaser shall file with the SEC (i) a Tender Offer Statement on
Schedule 14D-1 (together with all amendments and supplements thereto, the
"Schedule 14D-1") with respect to the Offer. The Schedule 14D-1 shall contain or
shall incorporate by reference an offer to purchase (the "Offer to Purchase")
and forms of the related letter of transmittal and any related summary
advertisement (the Schedule 14D-1, the Offer to Purchase and such other
documents, together with all supplements and amendments thereto, being referred
to herein collectively as the "Offer Documents"). Parent, Purchaser and the
Company agree to correct promptly any information provided by any of them for
use in the Offer Documents which shall have become false or misleading, and
Parent and Purchaser further agree to take all steps necessary to cause the
Schedule 14D-1 as so corrected to be filed with the SEC and the other Offer
Documents as so corrected to be disseminated to holders of Shares, in each case
as and to the extent required by applicable federal securities laws.
Section 1.02. Company Action. (a) The Company hereby approves of and
consents to the Offer and represents and warrants that (i) the Board, at a
meeting duly called and held on April 4, 1998, has unanimously (A) determined
that this Agreement and the transactions contemplated hereby, including each of
the Offer and the Merger, are fair to and in the best interests of the holders
of Shares, (B) approved and adopted this Agreement and the transactions
contemplated hereby (such approval and adoption having been made in accordance
with the provisions of sec.203 of Delaware Law) and (C) recommended that the
stockholders of the Company accept the Offer and approve and adopt this
Agreement and the transactions contemplated hereby, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇, Discover & Co. ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") has delivered to the Board a
written opinion that the consideration to be received by the holders of Shares
pursuant to each of the Offer and the Merger is fair to the holders of Shares
from a financial point of view. Unless the recommendation of the Board has been
withdrawn in accordance with Section 6.05, the Company hereby consents to the
inclusion in the Offer Documents of the recommendation of the Board described in
the immediately preceding sentence and agrees to cause ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to consent
to the inclusion of its written opinion in the offering documents forming a part
of the Solicitation/Recommendation Statement on Schedule 14D-9 (together with
all amendments and supplements thereto, the "Schedule 14D-9"). The Company has
been advised by each of its directors and executive officers that they intend
either to tender all Shares beneficially owned by them to Purchaser pursuant to
the Offer or to vote such Shares in favor of the approval and adoption by the
stockholders of the Company of this Agreement and the transactions contemplated
hereby.
(b) As soon as reasonably practicable on the date of commencement of the
Offer, the Company shall file with the SEC the Schedule 14D-9 containing, unless
the recommendation of the Board has been withdrawn in accordance with Section
6.05, the recommendation of the Board described in Section 1.02(a) and shall
disseminate the Schedule 14D-9 to the extent required by Rule 14d-9 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
any other applicable federal securities laws. The Company, Parent and Purchaser
agree to correct promptly any information provided by any of them for use in the
Schedule 14D-9 which shall have become false or misleading, and the Company
further agrees to
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take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed
with the SEC and disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws.
(c) The Company shall promptly furnish Purchaser with mailing labels
containing the names and addresses of all record holders of Shares and with
security position listings of Shares held in stock depositories, each as of a
recent date, together with all other available listings and computer files
containing names, addresses and security position listings of record holders and
beneficial owners of Shares. The Company shall furnish Purchaser with such
additional information, including, without limitation, updated listings and
computer files of stockholders, mailing labels and security position listings,
and such other assistance as Parent, Purchaser or their agents may reasonably
request. Subject to the requirements of applicable law, and except for such
steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer or the Merger, Parent and Purchaser
shall hold in confidence the information contained in such labels, listings and
files, shall use such information only in connection with the Offer and the
Merger, and, if this Agreement shall be terminated in accordance with Section
8.01, shall deliver to the Company all copies of such information then in their
possession.
ARTICLE II
THE MERGER
Section 2.01. The Merger. Upon the terms and subject to the conditions set
forth in Article VII, and in accordance with Delaware Law, at the Effective Time
(as hereinafter defined) Purchaser shall be merged with and into the Company. As
a result of the Merger, the separate corporate existence of Purchaser shall
cease and the Company shall continue as the surviving corporation of the Merger
(the "Surviving Corporation").
Section 2.02. Effective Time; Closing. As promptly as practicable after
the satisfaction or, if permissible, waiver of the conditions set forth in
Article VII, the parties hereto shall cause the Merger to be consummated by
filing this Agreement or a certificate of merger or certificate of ownership and
merger (in either case, the "Certificate of Merger") with the Secretary of State
of the State of Delaware, in such form as is required by, and executed in
accordance with the relevant provisions of, Delaware Law. The Merger shall
become effective at the time of filing of the Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with Delaware Law or
such later time as may be specified in the Certificate of Merger (the date and
time when the Merger shall become effective being the "Effective Time").
Section 2.03. Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of Delaware Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
the Company and Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities, obligations, restrictions, disabilities and duties of the
Company and Purchaser shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
Section 2.04. Certificate of Incorporation; By-laws. (a) At the Effective
Time, the Certificate of Incorporation of the Company shall be restated in the
form acceptable to Purchaser and shall be the Certificate of Incorporation of
the Surviving Corporation until thereafter amended as provided by law and such
Certificate of Incorporation; provided, however, that such restated Certificate
of Incorporation shall be in accordance with the provisions of Section 6.07
hereof.
(b) The By-laws of Purchaser, as in effect immediately prior to the
Effective Time, shall be the By-laws of the Surviving Corporation until
thereafter amended as provided by law, the Certificate of Incorporation of the
Surviving Corporation and such By-laws.
Section 2.05. Directors and Officers. The directors and officers of
Purchaser immediately prior to the Effective Time shall be the initial directors
and officers of the Surviving Corporation, each to hold office in
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accordance with the Certificate of Incorporation and By-laws of the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualified.
Section 2.06. Conversion of Securities. At the Effective Time, by virtue
of the Merger and without any action on the part of Purchaser, the Company or
the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be canceled pursuant to Section
2.06(b) and any Dissenting Shares (as hereinafter defined)) shall be
canceled and shall be converted automatically into the right to receive an
amount equal to the Per Share Amount in cash (the "Merger Consideration")
payable, after reduction for any required Tax withholding, without
interest, to the holder of such Share, upon surrender, in the manner
provided in Section 2.08, of the certificate that formerly evidenced such
Share;
(b) Each Share held in the treasury of the Company and each Share
owned by Purchaser, Parent or any direct or indirect wholly owned
Subsidiary of Parent or of the Company immediately prior to the Effective
Time shall be canceled without any conversion thereof and no payment or
distribution shall be made with respect thereto; and
(c) Each share of Common Stock, par value $.01 per share, of Purchaser
issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued, fully paid and
nonassessable share of Common Stock, par value $.01 per share, of the
Surviving Corporation.
Section 2.07. Employee Stock Options. Each stock option (a "Company Stock
Option") outstanding at the Effective Time under the Company's 1996 Stock Option
Plan or 1996 Broad-Based Stock Option Plan (the "Company Stock Option Plans")
shall be canceled by the Company immediately prior to the Effective Time, and
each holder of a canceled Company Stock Option shall be entitled to receive at
the Effective Time or as soon as practicable thereafter from the Company in
consideration for the cancellation of such Company Stock Option an amount (the
"Option Spread") equal to the product of (i) the number of Shares previously
subject to such Company Stock Option and (ii) the excess, if any, of the Per
Share Amount over the exercise price per share of Company Common Stock
previously subject to such Company Stock Option. The Option Spread, after
reduction for applicable Tax withholding, if any, shall be paid in cash. Upon
the Effective Time, the Company Stock Option Plans shall terminate.
Section 2.08. Dissenting Shares. Notwithstanding any provision of this
Agreement to the contrary, Shares that are outstanding immediately prior to the
Effective Time and which are held by stockholders who shall have not voted in
favor of the Merger or consented thereto in writing and who shall have demanded
properly in writing appraisal for such Shares in accordance with Section 262 of
Delaware Law (collectively, the "Dissenting Shares") shall not be converted into
or represent the right to receive the Merger Consideration. Such stockholders
shall be entitled to receive payment of the appraised value of such Shares held
by them in accordance with the provisions of such Section 262, except that all
Dissenting Shares held by stockholders who shall have failed to perfect or who
effectively shall have withdrawn or lost their rights to appraisal of such
Shares under such Section 262 shall thereupon be deemed to have been converted
into and to have become exchangeable for, as of the Effective Time, the right to
receive the Merger Consideration, without any interest thereon, upon surrender,
in the manner provided in Section 2.09, of the certificate or certificates that
formerly evidenced such Shares.
Section 2.09. Surrender of Shares; Stock Transfer Books. (a) Prior to the
Effective Time, Purchaser shall designate a bank or trust company to act as its
paying agent (the "Paying Agent") who shall also act as agent for the holders of
Shares in connection with the Merger to receive the funds to which holders of
Shares shall become entitled pursuant to Section 2.06(a). Promptly upon receipt,
any such funds shall be invested by the Paying Agent as directed by the
Surviving Corporation, provided that such investments shall be in obligations of
or guaranteed by the United States of America or of any agency thereof and
backed by the full faith and credit of the United States of America, in
commercial paper obligations rated A-1 or P-1 or better by ▇▇▇▇▇'▇ Investors
Services, Inc. or Standard & Poor's Corporation, respectively, or in deposit
accounts, certificates of deposit or banker's acceptances of, repurchase or
reverse repurchase agreements with, or
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Eurodollar time deposits purchased from, commercial banks with capital, surplus
and undivided profits aggregating in excess of $500 million (based on the most
recent financial statements of such bank which are then publicly available at
the SEC or otherwise).
(b) Promptly after the Effective Time, the Surviving Corporation shall
cause to be mailed to each person who was, at the Effective Time, a holder of
record of Shares entitled to receive the Merger Consideration pursuant to
Section 2.06(a) a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "Certificates") shall pass, only upon proper
delivery of the Certificates to the Paying Agent) and instructions for use in
effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Certificate, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as may be required
pursuant to such instructions, the holder of such Certificate shall be entitled
to receive in exchange therefor the Merger Consideration for each Share formerly
evidenced by such Certificate, after reduction for any required withholding Tax
and such Certificate shall then be canceled. No interest shall accrue or be paid
on the Merger Consideration payable upon the surrender of any Certificate for
the benefit of the holder of such Certificate. If payment of the Merger
Consideration is to be made to a person other than the person in whose name the
surrendered Certificate is registered on the stock transfer books of the
Company, it shall be a condition of payment that the Certificate so surrendered
shall be endorsed properly or otherwise be in proper form for transfer and that
the person requesting such payment shall have paid all transfer and other Taxes
required by reason of the payment of the Merger Consideration to a person other
than the registered holder of the Certificate surrendered or shall have
established to the satisfaction of the Surviving Corporation that such Taxes
either have been paid or are not applicable.
(c) At any time following the sixth month after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to deliver
to it any funds which had been made available to the Paying Agent and not
disbursed to holders of Shares (including, without limitation, all interest and
other income received by the Paying Agent in respect of all funds made available
to it), and thereafter such holders shall be entitled to look to the Surviving
Corporation (subject to abandoned property, escheat and other similar laws) only
as general creditors thereof with respect to any Merger Consideration that may
be payable upon due surrender of the Certificates held by them. Notwithstanding
the foregoing, neither the Surviving Corporation nor the Paying Agent shall be
liable to any holder of a Share for any Merger Consideration delivered in
respect of such Share to a public official pursuant to any abandoned property,
escheat or other similar law.
(d) At the close of business on the day of the Effective Time, the stock
transfer books of the Company shall be closed and thereafter there shall be no
further registration of transfers of Shares on the records of the Company. From
and after the Effective Time, the holders of Shares outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
Shares except as otherwise provided herein or by applicable law.
(e) Parent and/or the Surviving Corporation shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of Shares such amounts, if any, as Parent and/or the Surviving
Corporation is required to deduct and withhold with respect to the making of
such payment under the Code, or any provision of state, local or foreign Tax
law. To the extent that amounts are so withheld by Parent and/or the Surviving
Corporation, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares in respect of which
such deduction and withholding was made by Parent and/or the Surviving
Corporation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Purchaser that:
Section 3.01. Organization and Qualification; Subsidiaries. (a) Each of
the Company and each Subsidiary of the Company is duly organized, validly
existing and in good standing under the laws of its
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jurisdiction of organization and has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be so organized, existing or in good standing or to have such power, authority
and governmental approvals would not, individually or in the aggregate, have a
Material Adverse Effect (as defined below). Each of the Company and each
Subsidiary is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that would not, individually or in
the aggregate, have a Material Adverse Effect. A true and complete list of all
the Subsidiaries, together with the jurisdiction of incorporation of each
Subsidiary and the percentage of the outstanding capital stock of each
Subsidiary owned by the Company and each other Subsidiary, is set forth in
Schedule 3.01. Except as disclosed in Schedule 3.01, the Company and its
Subsidiaries does not directly or indirectly own any equity or similar interest
in, or any interest convertible into or exchangeable or exercisable for any
equity or similar interest in, any corporation, partnership, joint venture or
other business association or entity.
Section 3.02. Certificate of Incorporation and By-laws. The Company has
heretofore furnished to Parent a complete and correct copy of the Certificate of
Incorporation and the By-laws or equivalent organizational documents, each as
amended to date, of the Company and each Subsidiary. Such Certificates of
Incorporation and By-Laws or equivalent organizational documents are in full
force and effect, and neither the Company nor any Subsidiary is in violation of
any provision thereof.
Section 3.03. Capitalization. The authorized capital stock of the Company
consists of 100,000,000 Shares. As of the date hereof, (i) 16,513,800 Shares are
issued and outstanding, all of which are validly issued, fully paid and
nonassessable and free of preemptive rights, (ii) 111,200 Shares are held in the
treasury of the Company, (iii) no Shares are held by the Subsidiaries and (iv)
1,200,000 Shares are reserved for future issuance pursuant to employee stock
options granted pursuant to the Company's Stock Option Plans. Except as set
forth in this Section 3.03, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock of the Company or any Subsidiary or obligating the
Company or any Subsidiary to issue or sell any shares of capital stock of, or
other equity interests in, the Company or any Subsidiary. All Shares subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. Schedule 3.03 contains a list of
all options to purchase any capital stock of the Company. There are no
outstanding contractual obligations of the Company or any Subsidiary to provide
funds to, or make any investment (in the form of a loan, capital contribution or
otherwise) in, any Subsidiary or any other person other than to agents and
wholly owned Subsidiaries of the Company, in the ordinary course of business
consistent with past practice. There are no commitments, understandings,
restrictions or arrangements obligating the Company to purchase, redeem or
acquire, or register under any securities law any shares of capital stock or any
securities or rights convertible into, exchangeable for, or evidencing the right
to subscribe to any shares of capital stock of the Company. Except for any
obligations in connection with this Agreement, there are not as of the date
hereof, and there will not be at the Closing Date, any stockholder agreement,
voting trust or other agreements or understandings to which the Company is a
party or to which it is bound, relating directly or indirectly to any Company
Common Stock.
Section 3.04. Authority Relative to this Agreement. (a) The Company has
all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby (the "Transactions"). The execution and delivery of this
Agreement by the Company and the consummation by the Company of the Transactions
have been duly and validly authorized by all necessary corporate action and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the Transactions (other than, with
respect to the Merger, the approval and adoption of this Agreement by the
holders of a majority of the then outstanding Shares if and to the extent
required by applicable law, and the filing and recordation of appropriate merger
documents as required by Delaware Law). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Parent and Purchaser, constitutes a legal, valid and
binding obligation of the Company.
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(b) Schedule 3.04(b) lists all material permits, registrations, licenses,
franchises, certifications and other approvals, including without limitation,
all money transfer or sale of checks licenses (collectively, the "Company
Approvals") required from any Governmental Authority, in order for the Company
and its Subsidiaries to conduct its business as presently conducted. The Company
has obtained all Company Approvals except where the lack of such Company
Approvals would not, individually or in the aggregate, have a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is subject to, nor bound
by, any agreement with, or judgment, decree or order issued by, any Governmental
Authority which, individually or in the aggregate, has a Material Adverse
Effect.
Section 3.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement and the consummation of the Transactions by the
Company will not, (i) conflict with or violate the Certificate of Incorporation
or By-laws or equivalent organizational documents of the Company or any
Subsidiary, (ii) except as set forth in Schedule 3.05(a), conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Company or any Subsidiary or by which any property or asset of the Company or
any Subsidiary is bound or affected other than conflicts or violations that
would not, individually or in the aggregate, have a Material Adverse Effect, or
(iii) except as set forth on Schedule 3.05(a), result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of the Company or any Subsidiary
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation, other than
breaches or defaults that would not, individually or in the aggregate, have a
Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement and the consummation of the Transactions
by the Company will not, require any consent, approval, authorization or permit
of, or filing with or notification to, any Governmental Authority, except (i)
for applicable requirements, if any, of the Exchange Act, state securities or
"blue sky" laws ("Blue Sky Laws") and state takeover laws, the pre-merger
notification requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder (the "HSR Act"), and
filing and recordation of appropriate merger documents as required by Delaware
Law, (ii) requirements of state and foreign banking, currency or other
regulatory authorities (all of which requirements including, without limitation,
the identification of all authorizations, consents or approvals required to
consummate the Offer ("Pre-Offer Approvals") are set forth in Schedule 3.05(b))
and (iii) where failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or delay
consummation of the Offer or the Merger, or otherwise prevent the Company from
performing its obligations under this Agreement, and would not, individually or
in the aggregate, have a Material Adverse Effect.
Section 3.06. Compliance. Except as set forth on Schedule 3.06, neither
the Company nor any Subsidiary is in conflict with, or in default or violation
of, (i) any law, rule, regulation, order, judgment or decree applicable to the
Company or any Subsidiary or by which any property or asset of the Company or
any Subsidiary is bound or affected, including, without limitation, the Foreign
Corrupt Practices Act of 1977, as amended, the Money Laundering Control Act, and
the Bank Secrecy Act, or (ii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any property or asset of the Company or any Subsidiary is bound or
affected, except for any such conflicts, defaults or violations that would not,
individually or in the aggregate, have a Material Adverse Effect.
Section 3.07. SEC Filings; Financial Statements. (a) The Company has filed
all forms, reports and documents required to be filed by it with the SEC since
December 11, 1996 and has heretofore made available to Parent, in the form filed
with the SEC, (i) its Registration Statement on Form S-1, as amended, filed with
the ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) its Annual Reports on Form 10-K for the
fiscal years ended December 31, 1996 and 1997, (iii) all proxy statements
relating to the Company's meetings of stockholders (whether annual or special)
held since December 31, 1996 and (iv) all other forms, reports and other
registration statements filed by the Company with the SEC since January 1, 1996
(the forms, reports and
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other documents referred to in clauses (i), (ii), (iii) and (iv) above being
referred to herein, collectively, as the "SEC Reports"). The SEC Reports (i)
were prepared in accordance with the requirements of the Securities Act of 1933,
as amended (the "Securities Act"), and the Exchange Act, as the case may be, and
the rules and regulations thereunder and (ii) did not at the time they were
filed 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 made therein, in the light of the circumstances under which they were
made, not misleading. No Subsidiary is required to file any form, report or
other document with the SEC.
(b) Each of the consolidated financial statements (including, in each case,
any notes thereto) contained in the SEC Reports was prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated and each fairly presented the consolidated
financial position, results of operations and changes in financial position of
the Company and the Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein (except as otherwise noted therein and
subject, in the case of unaudited statements, to normal and recurring year-end
adjustments).
(c) Except as and to the extent set forth on the consolidated balance sheet
of the Company and the Subsidiaries as at December 31, 1997, including the notes
thereto (the "1997 Balance Sheet"), neither the Company nor any Subsidiary has
any liability or obligation of any nature (whether accrued, absolute, contingent
or otherwise) which would be required to be reflected on a balance sheet
prepared in accordance with generally accepted accounting principles, except for
liabilities and obligations (i) incurred in the ordinary course of business
consistent with past practice since December 31, 1997, (ii) that would not,
individually or in the aggregate, have a Material Adverse Effect or (iii) as set
forth on Schedule 3.07(c).
(d) The Transactions Summaries, dated March 10, 1998 and April [1], 1998,
provided to Parent and Purchaser by the Company, accurately sets forth the
number of transactions sent and received by the Company and its Subsidiaries
during the 1997 fiscal year and January and February 1998.
Section 3.08. Absence of Certain Changes or Events. From December 31, 1997
through the date hereof, except as set forth on Schedule 3.08 or disclosed in
any SEC Report, there has not been (i) a Material Adverse Effect, (ii) any
material change by the Company in its accounting methods, principles or
practices, (iii) any entry by the Company or any Subsidiary into any contract
material to the Company and the Subsidiaries, taken as a whole, (iv) any
declaration, setting aside or payment of any dividend or distribution in respect
of any capital stock of the Company or any redemption, purchase or other
acquisition of any of its securities or (v) other than pursuant to the contracts
specified in Section 3.10 and Annex B, any increase in or establishment of any
bonus, insurance, severance, deferred compensation, pension, retirement, profit
sharing, stock option (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards, or restricted stock
awards), stock purchase or other employee benefit plan, or any other increase in
the compensation payable or to become payable to any officers or key employees
of the Company or any Subsidiary, except in the ordinary course of business
consistent with past practice.
Section 3.09. Absence of Litigation. Except as set forth on Schedule 3.09,
as of the date hereof, there is no claim, action, proceeding or investigation
pending or, to the knowledge of the Company, threatened against the Company or
any Subsidiary, or any property or asset of the Company or any Subsidiary,
before any court, arbitrator or administrative, governmental or regulatory
authority or body, domestic or foreign, that, individually or in the aggregate,
is reasonably likely to have a Material Adverse Effect. As of the date hereof,
neither the Company nor any Subsidiary nor any property or asset of the Company
or any Subsidiary is subject to any order, writ, judgment, injunction, decree,
determination or award having, individually or in the aggregate, a Material
Adverse Effect.
Section 3.10. Employee Benefit Plans. (a) Schedule 3.10(a) contains a true
and complete list of all employee benefit plans (within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) and all material bonus, stock option, incentive, deferred
compensation, severance or other benefit plans, programs or arrangements, and
all material employment, termination, severance or other contracts or agreements
to which the Company or any Subsidiary is a party, with respect to which the
Company or any Subsidiary has any obligation or which are maintained,
contributed to or sponsored by the Company or any Subsidiary for the benefit of
any current or former employee, officer or director of the
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Company or any Subsidiary (collectively, the "Plans"). Each Plan is in writing
and the Company has previously made available to Parent a true and complete copy
of (i) each trust or other funding arrangement, (ii) each summary plan
description and summary of material modifications, (iii) the most recently filed
Internal Revenue Service (the "IRS") Form 5500. Neither the Company nor any
Subsidiary has any express or implied commitment (i) to create, incur liability
with respect to or cause to exist any other employee benefit plan, program or
arrangement, (ii) to enter into any contract or agreement to provide material
compensation or benefits to any individual or (iii) to modify or terminate any
Plan, other than with respect to a modification, change or termination required
by ERISA or the Code.
(b) Other than as specifically disclosed in Schedule 3.10(a), none of the
Plans are subject to Title IV of ERISA. The Company does not maintain or
contribute to any Voluntary Employee Benefit Association under Section 501(c)(9)
of the Code. Other than as specifically disclosed in Schedule 3.10(a), none of
the Plans (i) provides for the payment of separation, severance, termination or
similar-type benefits to any person, (ii) obligates the Company or any
Subsidiary to pay separation, severance, termination or other benefits as a
result of any Transaction or (iii) obligates the Company or any Subsidiary to
make any payment or provide any benefit that could be subject to a tax under
Section 4999 of Code. Other than as specifically disclosed in Schedule 3.10(a),
none of the Plans provides for or promises retiree medical, disability or life
insurance benefits to any current or former employee, officer or director of the
Company or any Subsidiary. The Company is not a Party to any Multi-Employer Plan
as that term is defined in ERISA.
(c) Each Plan which is intended to be qualified under Section 401(a) of the
Code is so qualified, and each trust established in connection with any Plan
which is intended to be exempt from federal income taxation under Section 501(a)
of the Code is so exempt, it being understood that the Company has yet to file a
determination letter request with the IRS with regard to such plans.
(d) There has been no prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) with respect to any Plan that could
reasonably be expected to result in a material liability to the Company or any
Subsidiary. The Company has not incurred any material liability under, arising
out of or by operation of Title IV of ERISA (other than liability for premiums
to the Pension Benefit Guaranty Corporation arising in the ordinary course). No
Reportable Event (within the meaning of Section 4043 of ERISA) has occurred or
is expected to occur with respect to any Plan subject to Title 4 of ERISA other
than a Reportable Event with respect to which the 30-day notice requirement has
been waived).
(e) Each Plan is now and has been operated in all material respects in
accordance with the requirements of all applicable laws, including, without
limitation, ERISA and the Code, and the Company and each Subsidiary has
performed all material obligations required to be performed by them under, are
not in any material respect in default under or in violation of, and has no
knowledge of any material default or violation by any party to, any Plan. No
Plan is under audit or investigation by any Governmental Authority nor has the
Company or any Subsidiary been notified of any audit or investigation.
(f) The Company and the Subsidiaries have not incurred any liability under,
and have complied in all material respects with, the Worker Adjustment
Retraining Notification Act and the regulations promulgated thereunder ("WARN")
and do not reasonably expect to incur any such liability as a result of actions
taken or not taken prior to the Effective Time. Schedule 3.10(f) lists (i) all
the employees terminated or laid off by the Company or any Subsidiary during the
90 days prior to the date hereof and (ii) all the employees of the Company or
any Subsidiary who have experienced a reduction in hours of work of more than
50% during any month during the 90 days prior to the date hereof and describes
all notices given by the Company and the Subsidiaries in connection with WARN.
The Company will, by written notice to Parent and Purchaser, update Schedule
3.10(f) to include any such terminations, layoffs and reductions in hours from
the date hereof through the Effective Time and will provide Parent and Purchaser
with any related information which they may reasonably request.
(g) Except as set forth in Schedule 3.10(g) the Company and its
Subsidiaries do not have any Plan that is not subject to the laws of the United
States or governed by the laws of any other country (a "Foreign Plan"). With
respect to each Foreign Plan: (i) each Foreign Plan required to be registered
has been registered and has been maintained in good standing with applicable
regulatory authorities. Each Foreign Benefit Plan is
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now and has always been operated in full compliance with all applicable
non-United States laws. No Foreign Benefit Plan is under audit, or notice of
audit or investigation; (ii) all employer and employee contributions to each
Foreign Plan required by law or by the terms of such Foreign Plan have been
made, or if applicable, accrued in accordance with normal accounting practices
and a pro rata contribution for the period prior to and including the Effective
Time has been made or accrued; and (iii) the fair market value of the assets of
each funded Foreign Plan, the liability of each insurer of any Foreign Plan
funded through insurance, or the book reserve established by the Company for any
Foreign Plan, together with any accrued contributions, is sufficient to procure
or provide for the benefits determined on any ongoing basis (actual or
contingent) accrued to the Effective Time with respect to all current and former
participants under such Plan according to actuarial assumptions and valuations
most recently used to determine employer contributions to such Plan or benefit
liabilities for such Plan and no transaction contemplated by this Agreement
shall cause such assets or insurance obligations to be less than such benefit
obligations.
Section 3.11. Labor Matters. (i) There are no controversies pending, or,
to the knowledge of the Company, threatened between the Company or any
Subsidiary and any of their respective employees, which controversies have or
could have a Material Adverse Effect, and (ii) neither the Company nor any
Subsidiary is a party to any collective bargaining agreement or other labor
union contract applicable to persons employed by the Company or any Subsidiary
or, to the knowledge of the Company, are there any activities or proceedings of
any labor union to organize any such employees.
Section 3.12. Offer Documents; Schedule 14D-9; Proxy Statement. Neither
the Schedule 14D-9 nor any information supplied by the Company for inclusion in
the Offer Documents shall, at the respective times the Schedule 14D-9, the Offer
Documents or any amendments or supplements thereto are filed with the SEC or are
first published, sent or given to stockholders of the Company or at the
expiration date or the date of purchase, 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 made therein, in the light of the
circumstances under which they are made, not misleading. Neither the proxy
statement to be sent to the stockholders of the Company in connection with the
Stockholders' Meeting (as hereinafter defined) or the information statement to
be sent to such stockholders, as appropriate (such proxy statement or
information statement, as amended or supplemented, being referred to herein as
the "Proxy Statement"), shall, at the date the Proxy Statement (or any amendment
or supplement thereto) is first mailed to stockholders of the Company, at the
time of the Stockholders' Meeting and at the Effective Time, be false or
misleading with respect to any material fact, or omit to state any material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they are made, not
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Stockholders' Meeting which
shall have become false or misleading. The Schedule 14D-9 and the Proxy
Statement shall comply in all material respects as to form with the requirements
of the Exchange Act and the rules and regulations thereunder.
Section 3.13. Taxes. Except as disclosed on Schedule 3.13, the Company and
each of its Subsidiaries, its previously owned subsidiaries and any affiliated
group within the meaning of Section 1504 of the Code of which the Company, its
Subsidiaries or previously owned Subsidiaries is or has been a member (each a
"Taxpayer") has timely filed, or caused to be timely filed all Returns required
to be filed and all such Returns were complete and accurate in all material
respects, and has paid, collected or withheld, or caused to be paid, collected
or withheld, all Taxes required to be paid, collected or withheld, other than
(i) such Taxes for which adequate reserves in the Company's financial statements
have been established or which are being contested in good faith or (ii) such
Taxes that, individually or in the aggregate, would not have a Material Adverse
Effect. Neither the IRS nor any other taxing authority or agency, domestic or
foreign, is now asserting or, to the best knowledge of the Company, threatening
to assert against the Company or any Subsidiary any deficiency or claim for
additional Taxes or interest thereon or penalties in connection therewith that
individually or in the aggregate, would have a Material Adverse Effect. Neither
the Company nor any Subsidiary has made an election under Sections 341(f) or
338(h)(10) of the Code, except as set forth in Schedule 3.13. Except as set
forth on Schedule 3.13, neither the Company nor any of its Subsidiaries is a
party to any Tax sharing agreement or any other agreement with respect to Taxes.
As of the date hereof, the Company has not received
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any notification from the IRS or First Data Corporation, whether formal or
informal, that the IRS has taken or is considering taking a position, which if
upheld, would result in the inability of the Company to use, for accounting
purposes, the deferred tax asset currently reflected in the financial
statements. The Company will take no action with respect to the tax treatment of
such deferred tax asset prior to the consummation of the Offer.
Section 3.14. Brokers. No broker, finder or investment banker (other than
▇▇▇▇▇▇ ▇▇▇▇▇▇▇) is entitled to any brokerage, finder's or other fee or
commission in connection with the Transactions based upon arrangements made by
or on behalf of the Company. The Company has heretofore furnished to Parent a
complete and correct copy of all agreements between the Company and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ pursuant to which such firm would be entitled to any payment relating to
the Transactions.
Section 3.15. Certain Contracts. The contracts listed on Schedule 3.15
between the Company and First Data Corporation or its Affiliates, and the agent
agreement between the Company (as assignee) and Banco Nacional de Mexico, S.N.C.
("Banamex") are valid, binding and legal obligations of the parties, enforceable
in accordance with their respective terms, and are in full force and effect.
There has been no event and there are no circumstances constituting, and the
execution, delivery and performance of this Agreement and the consummation of
the Transactions will not (i) constitute a breach of or an event of default (or
an event which with notice or lapse of time or both would become such a default)
or (ii) confer upon First Data Corporation or Banamex, as the case may be, any
right of termination, amendment, acceleration, cancellation or withholding of
performance, under such agreements.
Section 3.16. Real Property and Leases. All leases of real property leased
for the use or benefit of the Company or any Subsidiary to which the Company or
any Subsidiary is a party requiring rental payments in excess of $100,000 during
any calendar year are in full force and effect, and there exists no default
under any such lease by the Company or any Subsidiary, nor any event which with
notice or lapse of time or both would constitute a default hereunder by the
Company or any Subsidiary, except as would not, individually or in the
aggregate, have a Material Adverse Effect.
Section 3.17. Trademarks, Patents, Copyrights and Intellectual
Property. (a) The Company and the Subsidiaries own or possess adequate licenses
or other valid rights to use all patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, copyrights, service marks, trade
secrets, applications for trademarks and for service marks, know-how and other
proprietary rights and information used or held for use in connection with the
business of the Company and the Subsidiaries as currently conducted or as
contemplated to be conducted, and the Company is unaware of any assertion or
claim challenging the validity of any of the foregoing which would, individually
or in the aggregate, have a Material Adverse Effect. To the knowledge of the
Company, the conduct of the business of the Company and the Subsidiaries as
currently conducted and as contemplated to be conducted does not conflict in any
way with, violate or infringe upon, any patent, patent right, license,
trademark, trademark right, trade name, trade name right, service ▇▇▇▇,
copyright, trade secret or other intellectual property of any third party that
would, individually or in the aggregate, have a Material Adverse Effect. To the
knowledge of the Company, neither it nor any Subsidiary has licensed or
otherwise permitted the use by any third party of any proprietary information on
terms or in a manner that would, individually or in the aggregate, have a
Material Adverse Effect.
(b) Schedule 3.17(b) sets forth a complete list of each material patent,
trademark or service ▇▇▇▇ registration, copyright registration and application
therefor, and a complete list of all material software (including any software
being developed by or for the Company) owned, used, licensed, or assigned by or
to the Company which is used in or is reasonably necessary to conduct the
business and operations of the Company and its Subsidiaries ("Intellectual
Property").
(c) Except as set forth on Schedule 3.17(c) and as would not, individually
or in the aggregate, have a Material Adverse Effect:
(i) The Company or a Subsidiary is the sole and exclusive owner of, or
has the unrestricted right to use, any and all Intellectual Property and
all items of Intellectual Property are valid and subsisting and
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Schedule 3.17(b) identifies the owner, licensor and licensee of each item
of Intellectual Property, as applicable; and
(ii) The use, licensing or sale by or to the Company or its
Subsidiaries of any of the Intellectual Property does not require the
acquiescence, agreement or consent of any third party. In addition, to the
Company's knowledge, the Intellectual Property and the products and
services of the Company and its Subsidiaries are not subject to a challenge
or claim of infringement, interference or unfair competition or other claim
and the Intellectual Property is not being infringed upon or violated by
any third party.
Section 3.18. Environmental Matters. To the knowledge of the Company or as
would not, individually or in the aggregate, have a Material Adverse Effect: (i)
the Company and its Subsidiaries have not violated and are not in violation of
any Environmental Law; (ii) none of the properties owned or leased by the
Company or any Subsidiary (including, without limitation, soils and surface and
ground waters) are contaminated with any Hazardous Substance; (iii) the Company
and its Subsidiaries are not liable for any off-site contamination; (iv) the
Company and its Subsidiaries are not liable under any Environmental Law
(including, without limitation, pending or threatened liens); (v) the Company
and its Subsidiaries have all permits, licenses and other authorizations
required under any Environmental Law ("Environmental Permits"); and (vi) the
Company and its Subsidiaries are in compliance with their Environmental Permits.
Section 3.19. Statute Takeover Statutes. The Board of Directors of the
Company has approved the Merger and any related transactions, and, to the
knowledge of the Company, no provision of any Takeover Statute will prevent,
impair, impede or prevent, any Transactions. Section 203 of Delaware Law is and
shall be inapplicable to the Merger, the other Transactions and this Agreement.
Section 3.20. Insurance. Schedule 3.20 contains a description of all
policies of fire, liability, workers' compensation and other forms of insurance
providing insurance coverage to or for the Company or its Subsidiaries
(including any such policies which name the Company or its Subsidiaries as a
loss payee or pursuant to which such party otherwise has rights). The Company
and/or its Subsidiaries is a named insured under such policies owned by them,
all premiums with respect thereto have been paid when due and no notice of
cancellation or termination has been received with respect to any such policy.
In the three year period ending on the date hereof, neither the Company nor its
Subsidiaries has received any written notice from, or on behalf of, any
insurance carrier relating to or involving an increase in insurance rates
(except to the extent that insurance risks may be increased for similarly
situated risks) or non-renewal of a policy, or requiring or suggesting material
alternation of any of the Company's or its Subsidiaries' assets, purchase of
material addition equipment or material modification of any of the Company's or
any of its Subsidiaries' methods of doing business. Neither the Company nor any
of its Subsidiaries has made any material claim for reimbursement from its
insurance carriers (other than health insurance carriers) since December 11,
1996.
Section 3.21. Agents. Part I of Schedule 3.21 sets forth the five largest
money order agents, the fifteen largest wire transfer agents by send transaction
volume and the five largest wire transfer agents by receive transaction volume
of the Company and its Subsidiaries (collectively, the "Agents"), in each case
during the fiscal year ended December 31, 1997. Except as described in Part II
of Schedule 3.21, with respect to any Agent on the date hereof, (i) no Agent of
the Company or any Subsidiary has canceled or otherwise terminated, or
threatened in writing to cancel or otherwise terminate, its relationship with
the Company or any Subsidiary or has during the twelve months period ending on
the date hereof, decreased materially or limited materially, or threatened to
decrease materially or limit materially, its services to the Company or any
Subsidiary or its usage or purchase of the services of the Company and its
Subsidiaries, and the Company has no knowledge of any material breach by any
Agent of its agency agreements with the Company or any Subsidiary; and (ii)
there has been no event and there are no circumstances constituting an event,
and the execution, delivery and performance of this Agreement and the
consummation of the Transactions will not (x) constitute a breach or an event of
default (or an event which with notice, lapse of time or both, would become such
a default) or (y) confer upon any such Agent any right of termination,
amendment, acceleration, cancellation or withholding of services or payments.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby, jointly and severally, represent and warrant
to the Company that:
Section 4.01. Corporate Organization. Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be so organized, existing or in good standing or to have such power, authority
and governmental approvals would not, individually or in the aggregate, have a
material adverse effect on the ability of Parent or Purchaser to perform their
obligations hereunder, or prevent or materially delay the consummation of the
Transactions.
Section 4.02. Authority Relative to this Agreement. Each of Parent and
Purchaser has all necessary corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by Parent and
Purchaser and the consummation by Parent and Purchaser of the Transactions have
been duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Parent or Purchaser are necessary to
authorize this Agreement or to consummate the Transactions (other than, with
respect to the Merger, the filing and recordation of appropriate merger
documents as required by Delaware Law). This Agreement have been duly and
validly executed and delivered by Parent and Purchaser and, assuming the due
authorization, execution and delivery by the Company, constitutes legal, valid
and binding obligations of each of Parent and Purchaser enforceable against each
of Parent and Purchaser in accordance with its terms.
Section 4.03. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Parent and Purchaser do not, and the
performance of this Agreement by Parent and Purchaser will not, (i) conflict
with or violate the Certificate of Incorporation or By-laws of either Parent or
Purchaser, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Parent or Purchaser or by which any property or
asset of either of them is bound or affected, or (iii) result in any breach of
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of Parent or Purchaser pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Parent or Purchaser
is a party or by which Parent or Purchaser or any property or asset of either of
them is bound or affected, except for any such violations, breaches, defaults or
other occurrences which would not, individually or in the aggregate, have a
material adverse effect on the ability of Parent or Purchaser to perform their
obligations hereunder, or prevent or materially delay the consummation of the
Transactions.
(b) The execution and delivery of this Agreement by Parent and Purchaser do
not, and the performance of this Agreement by Parent and Purchaser will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or foreign,
except (i) for applicable requirements, if any, of the Exchange Act, Blue Sky
Laws and state takeover laws, the HSR Act, and filing and recordation of
appropriate merger documents as required by Delaware Law, (ii) requirements of
state and foreign banking currency or other regulatory authorities (all of which
requirements are set forth in Schedule 3.05(b)) and (iii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not, individually or in the aggregate, have a
material adverse effect on the ability of Parent or Purchaser to perform their
obligations hereunder, or prevent or materially delay the consummation of the
Transactions.
Section 4.04. Financing. Parent has existing commitments from responsible
financial institutions (true and correct copies of which have been provided to
the Company), to enable it to borrow sufficient funds to permit Purchaser to
acquire all the outstanding Shares in the Offer and the Merger.
Section 4.05. Offer Documents; Proxy Statement. The Offer Documents will
not, at the time the Offer Documents are filed with the SEC or are first
published, sent or given to stockholders of the Company, as the
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case may be, 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 made therein, in the light of the circumstances under which they
are made, not misleading. The information supplied by Parent for inclusion in
the Proxy Statement will not, on the date the Proxy Statement (or any amendment
or supplement thereto) is first mailed to stockholders of the Company, at the
time of the Stockholders' Meeting and at the Effective Time, contain any
statement which, at such time and in light of the circumstances under which it
is made, is false or misleading with respect to any material fact, or omits to
state any material fact required to be stated therein or necessary in order to
make the statements therein not false or misleading or necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Stockholders' Meeting which shall have become false or
misleading. Notwithstanding the foregoing, Parent and Purchaser make no
representation or warranty with respect to any information supplied by the
Company or any of its representatives which is contained in any of the foregoing
documents or the Offer Documents. The Offer Documents shall comply in all
material respects as to form with the requirements of the Exchange Act and the
rules and regulations thereunder.
Section 4.06. Brokers. No broker, finder or investment banker (other than
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇) is entitled to any brokerage, finder's or other fee or
commission in connection with the Transactions based upon arrangements made by
or on behalf of Parent or Purchaser.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.01. Conduct of Business by the Company Pending the
Merger. Except as contemplated by this Agreement, neither the Company nor any
Subsidiary shall, between the date of this Agreement and the Effective Time,
directly or indirectly do, or propose to do, any of the following without the
prior written consent of Parent:
(a) amend or otherwise change its Certificate of Incorporation or
By-laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of, (i) any
shares of capital stock of any class of the Company or any Subsidiary, or
any options, warrants, convertible securities or other rights of any kind
to acquire any shares of such capital stock, or any other ownership
interest (including, without limitation, any phantom interest), of the
Company or any Subsidiary (except for the issuance of a maximum of
1,180,266 Shares issuable pursuant to employee stock options outstanding on
the date hereof) or (ii) any assets of the Company or any Subsidiary except
in the ordinary course of business consistent with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) form any new Subsidiaries or implement the formation of a holding
company or expend any funds in preparation for or implement any corporate
restructuring, including, but not limited to the formation of a holding
company or the merger of any Subsidiary with and into the Company;
(f) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any corporation,
partnership, other business organization or any division thereof or any
material amount of assets; (ii) except for borrowings under existing credit
facilities in the ordinary course of business, incur any indebtedness for
borrowed money or issue any debt securities or assume, guarantee or
endorse, or otherwise as an accommodation become responsible for, the
obligations of any person, or (iii) except as permitted pursuant to
paragraph (j) below or the posting of letters of credit required by
licensing or regulatory authorities in the ordinary course of business,
make any loans or advances;
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(g) authorize or make capital expenditures in excess of the amounts
set forth on Schedule 5.01(g); provided, however, that (i) before making
any expenditures for the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Multi-Currency Project, the Company
will involve Purchaser in the selection of a consultant and will not expend
in excess of $5,500,000 for a systems software package or $150,000 in
consulting fees payable to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, without the consent of
Purchaser, which consent will not be unreasonably withheld or delayed, (ii)
the Company will not make any expenditures for new software or hardware for
the Future System/Year 2000 Project prior to June 1, 1998, but the Company
may incur consulting and similar fees not to exceed $500,000 in aggregate
prior to such date, and (iii) the Company will not make any capital
expenditures other than as set forth in clauses (i) and (ii) above in
excess of $4,000,000 in the aggregate without the prior consent of the
Purchaser, which consent will not be unreasonably withheld or delayed;
(h) other than as set forth in Annex B, increase the compensation
payable or to become payable to its officers or employees, except for
increases in accordance with past practices in salaries or wages of
employees of the Company or any Subsidiary who are not officers of the
Company, or, other than in accordance with existing policies, grant any
severance or termination pay to, or enter into any employment or severance
agreement with any director, officer or other employee of the Company or
any Subsidiary, or establish, adopt, enter into or amend any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee;
(i) other than as required by generally accepted accounting
principles, and except for the reclassification of the financial paper
outstanding from fiduciary liability to operating liability on the balance
sheet, make any change to its accounting policies or procedures;
(j) (i) make any advances to agents or enter into any agreement with
any agent that guarantees or assures payment of minimum aggregate
commissions or which grants any signing or other bonus in an amount in
excess of $1,500,000 in the aggregate; or (ii) enter into any agreement
which would increase the period of time during which any agent retains the
proceeds of money order or wire transfer sales prior to remitting such
proceeds to the Company; provided, however, notwithstanding any other
provision of this Section 5.01, the Company may enter into a contract with
American Express Travel Related Services, Inc. ("American Express")
containing terms substantially similar to those in the draft contract,
version 8, previously provided to the Purchaser if such contract does not
contain any provision that would confer upon American Express any right of
termination, amendment, acceleration, cancellation or withholding of
services or payments upon the consummation of the Offer, the Merger or any
other Transaction;
(k) enter into or amend any agreement with any agent, with respect to
which the credit exposure (measured as actual agent remittances due on any
one Business Day) is greater than $500,000;
(l) establish any new lines of credit or other credit facilities or
replace existing credit facilities with facilities that have terms that are
less favorable to the Company;
(m) pay, settle, discharge or enter into any agreement for the
settlement or compromise of any pending or threatened litigation requiring
payment(s) by the Company or any Subsidiary in excess of $1,000,000 in the
aggregate;
(n) agree in writing, or otherwise, to take any of the foregoing
actions or to take any other action which would make any representation or
warranty of the Company in this Agreement untrue or incorrect in any
material respect; or
(o) make any tax election or settle or compromise any material
federal, state local or foreign income tax liability.
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Section 5.02. Additional Covenants. After the date hereof and prior to the
Effective Time or the earlier termination of this Agreement, unless Parent shall
otherwise agree in writing, the Company covenants and agrees that it shall, and
cause each of its Subsidiaries to:
(a) Conduct their respective businesses in the ordinary and usual
course of business consistent with past practice;
(b) Confer with Parent's designated representatives on a regular and
frequent basis regarding operational matters of a material nature and the
general status of the ongoing business of the Company;
(c) Promptly notify Parent of any significant changes in the business,
financial condition or results of operation of the Company or its
Subsidiaries taken as a whole;
(d) Promptly notify Parent of any judgment, decree, injunction, rule,
notice or order of any Governmental Authority which is reasonably likely to
materially restrict the business of the Company and its Subsidiaries as
currently conducted or is reasonably likely to have a Material Adverse
Effect;
(e) Maintain or renew with financially responsible insurance
companies, (i) insurance on its tangible assets and its business in such
amounts and against such risks and losses as are consistent with past
practice (ii) the Company's existing directors and officers indemnification
insurance; and
(f) Use all reasonable best efforts to preserve the business,
reputation and prospects of the Company and its Subsidiaries and preserve
the current relationships of the Company and its Subsidiaries with
customers, employees, agents, suppliers and other persons with which the
company or any Subsidiary has business relations.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01. Stockholders' Meeting. (a) If required by applicable law in
order to consummate the Merger, the Company, acting through the Board, shall, in
accordance with applicable law and the Company's Certificate of Incorporation
and By-laws, (i) duly call, give notice of, convene and hold an annual or
special meeting of its stockholders as soon as practicable following
consummation of the Offer for the purpose of considering and taking action on
this Agreement and the transactions contemplated hereby (the "Stockholders'
Meeting") and (ii) subject to its fiduciary duties under applicable law after
receiving the advice of independent counsel, (A) include in the Proxy Statement
the recommendation of the Board that the stockholders of the Company approve and
adopt this Agreement and the transactions contemplated hereby and (B) use all
reasonable efforts to obtain such approval and adoption. At the Stockholders'
Meeting, Parent and Purchaser shall cause all Shares then owned by them and
their Subsidiaries to be voted in favor of the approval and adoption of this
Agreement and the transactions contemplated hereby.
(b) Notwithstanding the foregoing, in the event that Purchaser shall
acquire at least 90 percent of the then outstanding Shares, the parties hereto
agree, at the request of Purchaser, subject to Article VII, to take all
necessary and appropriate action to cause the Merger to become effective, in
accordance with Section 253 of Delaware Law, as soon as reasonably practicable
after such acquisition, without a meeting of the stockholders of the Company.
Section 6.02. Proxy Statement. If required by applicable law, as soon as
practicable following consummation of the Offer, the Company shall file the
Proxy Statement with the SEC under the Exchange Act, and shall use all
reasonable efforts to have the Proxy Statement cleared by the SEC. Parent,
Purchaser and the Company shall cooperate with each other in the preparation of
the Proxy Statement, and the Company shall notify Parent of the receipt of any
comments of the SEC with respect to the Proxy Statement and of any requests by
the SEC for any amendment or supplement thereto or for additional information
and shall provide to Parent promptly copies of all correspondence between the
Company or any representative of the Company and the SEC. The Company shall (i)
give Parent and its counsel the opportunity to review the Proxy Statement prior
to its being filed with the SEC; (ii) give Parent and its counsel the
opportunity to
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review all amendments and supplements to the Proxy Statement and all responses
to requests for additional information and replies to comments prior to their
being filed with, or sent to, the SEC; and (iii) consider in good faith the
comments and information provided by Parent, Purchaser and their counsel with
respect thereto. Each of the Company, Parent and Purchaser agrees to use all
reasonable efforts, after consultation with the other parties hereto, to respond
promptly to all such comments of and requests by the SEC and to cause the Proxy
Statement and all required amendments and supplements thereto to be mailed to
the holders of Shares entitled to vote at the Stockholders' Meeting at the
earliest practicable time.
Section 6.03. Company Board Representation; Section 14(f). (a) Promptly
upon the purchase by Purchaser of Shares pursuant to the Offer, and from time to
time thereafter, in addition to its rights under applicable law and the
Company's Certificate of Incorporation and By-Laws, Purchaser shall be entitled
to designate up to such number of directors, rounded up to the next whole
number, on the Board and the boards of each of its Subsidiaries as shall give
Purchaser representation on the Board and the boards of each of its Subsidiaries
equal to the product of the total number of directors on the Board and the
boards of each of its Subsidiaries (giving effect to the directors elected
pursuant to this sentence) multiplied by the percentage that the aggregate
number of Shares beneficially owned by Purchaser or any Affiliate of Purchaser
following such purchase bears to the total number of Shares then outstanding,
and the Company shall, at such time, promptly take all actions necessary to
cause Purchaser's designees to be elected as directors of the Company and each
of its Subsidiaries, including increasing the size of the Board and the boards
of each of its Subsidiaries or securing the resignations of incumbent directors
or both. At such times, the Company shall use all reasonable efforts to cause
persons designated by Purchaser to constitute the same percentage as persons
designated by Purchaser shall constitute of the Board of each committee of the
Board to the extent permitted by applicable law.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under this Section 6.03 and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 to fulfill such
obligations. Parent or Purchaser shall supply to the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and Affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the election of designees of Purchaser pursuant to this
Section 6.03, prior to the Effective Time, any amendment of this Agreement or
the Certificate of Incorporation or By-laws of the Company, any termination of
this Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or Purchaser or
waiver of any of the Company's rights hereunder shall require the concurrence of
a majority of the directors of the Company then in office who neither were
designated by Purchaser nor are employees of the Company.
Section 6.04. Access to Information; Confidentiality. (a) From the date
hereof to the Effective Time, the Company shall, and shall cause the
Subsidiaries and the officers, directors, employees, auditors and agents of the
Company and the Subsidiaries to, afford the officers, employees and agents of
Parent and Purchaser and persons providing or committing to provide Parent or
Purchaser with financing for the Transactions reasonable access at all
reasonable times to the officers, employees, agents, properties, offices, plants
and other facilities, books and records of the Company and each Subsidiary, and
shall furnish Parent and Purchaser and persons providing or committing to
provide Parent or Purchaser with financing for the Transactions with all
financial, operating and other data and information as Parent or Purchaser,
through its officers, employees or agents, may reasonably request.
(b) The Company, Parent and Purchaser each agree to promptly advise each
other of any information required to update or correct any documents filed,
published or issued by such parties pursuant to the Offer or pursuant to Section
6.01 or 6.02
(c) All information obtained by Parent or Purchaser pursuant to this
Section 6.04 shall be kept confidential in accordance with the confidentiality
agreement, dated February 11, 1998 (the "Confidentiality Agreement"), between
Parent and the Company.
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Section 6.05. No Solicitation of Transactions. (a) The Company shall, and
shall direct and use reasonable efforts to cause its officers, directors,
employees, representatives and agents to, immediately cease any discussions or
negotiations with any parties that may be ongoing with respect to an Acquisition
Proposal (as hereinafter defined). The Company shall not, nor shall it permit
any of its Subsidiaries to, nor shall it authorize or permit any of its
officers, directors or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by it or any of its
Subsidiaries to, directly or indirectly, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other action designed
or reasonably likely to facilitate, any inquiries or the making of any proposal
which constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal or (ii) participate in any discussions or negotiations regarding any
Acquisition Proposal; provided, however, that if, at any time prior to the
consummation of the Offer, the Board determines in good faith, after receipt of
advice from its outside counsel, that it is necessary to do so in order to
comply with its fiduciary duties to the Company's stockholders under applicable
law, the Company may, in response to an Acquisition Proposal which was not
solicited by or on behalf of the Company subsequent to the date hereof, and
subject to compliance with Section 6.05(b) and (c), (x) furnish information with
respect to the Company to any person pursuant to a customary confidentiality
agreement (as determined by the Company after receipt of advice from its outside
counsel) and (y) participate in negotiations regarding such Acquisition
Proposal. "Acquisition Proposal" means (i) any inquiry, proposal or offer from
any person relating to any direct or indirect acquisition or purchase of 15% or
more of the assets of the Company and its Subsidiaries or 15% or more of any
class of equity securities of the Company or any of its Subsidiaries, (ii) 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 the Company
or any of its Subsidiaries, (iii) any merger, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any of its Subsidiaries, other than the
Transactions, or (iv) any other transaction that could reasonably be expected to
prevent or materially delay the consummation of the Offer or the Merger.
(b) Except as set forth in this Section 6.05, neither the Board nor any
committee thereof shall (i) withdraw or modify, or propose publicly to withdraw
or modify, in any manner adverse to Parent or Purchaser, the approval or
recommendation by such Board or committee of the Offer, the Merger, the other
Transactions or this Agreement, (ii) approve or recommend, or propose publicly
to approve or recommend, any Acquisition Proposal or (iii) cause the Company to
enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement related to any Acquisition Proposal with any Person
other than Parent or its Affiliates. Notwithstanding the foregoing, in the event
that prior to the Offer, the Board determines in good faith, after receipt of
advice from outside counsel, that it is necessary to do in order to comply with
its fiduciary duties to the Company's stockholders under applicable law, the
Board may (A) withdraw or modify its approval or recommendation of the Offer,
the Merger, the other Transactions or this Agreement, or (B) approve or
recommend a Superior Proposal (as hereinafter defined ) or terminate this
Agreement and, if it so chooses, cause the Company to enter into any agreement
with respect to a Superior Proposal. For purposes of this Agreement, a "Superior
Proposal" means any bona fide proposal made by a third party to acquire,
directly or indirectly, for consideration consisting of cash and/or securities,
more than 50% of the combined voting power of the shares of the Company's Common
Stock then outstanding or all or substantially all of the assets of the Company
and its Affiliates on terms which the Board determines in its good faith
judgment to be more favorable to the Company's stockholders than the Offer and
the Merger and for which financing is committed or, in the good faith judgment
of the Board, is reasonably likely to be timely obtained, and also taking into
account the likelihood of any prohibition of, or delay in closing, such Superior
Proposal under applicable antitrust law.
(c) In addition to the obligations of the Company set forth in paragraphs
(a) and (b) of this Section 6.05, if the Company intends to withdraw or amend
its recommendation of the Offer in accordance with this Section 6.05, it shall
give the Purchaser 48 hours advance written notice, such notice to specify the
identity of any third party that has made an Acquisition Proposal and the
material terms of such Acquisition Proposal. Following the delivery of such
notice, the Company will promptly inform the Purchaser of material developments
with respect to such Acquisition Proposal.
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(d) Nothing contained in this Section 6.05 shall prohibit the Company from
taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders.
Section 6.06. Employee Benefits Matters. Annex B hereto sets forth certain
agreements among the parties hereto with respect to the Plans and other employee
benefits matters.
Section 6.07. Directors' and Officers' Indemnification and Insurance. (a)
The Certificate of Incorporation of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification than are set forth
in Article 8, of the Certificate of Incorporation of the Company, 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 materially and
adversely affect the rights thereunder of individuals who at the Effective Time
were directors, officers, employees, fiduciaries or agents of the Company,
unless such modification shall be required by law.
(b) Regardless of whether the Merger becomes effective, the Company shall
indemnify and hold harmless, and, after the Effective Time, the Surviving
Corporation shall, indemnify and hold harmless, each present and former
director, officer, employee, fiduciary and agent of the Company and each
Subsidiary (collectively, the "Indemnified Parties") to the fullest extent
permitted under the Certificate of Incorporation and the By-laws of the Company
for a period of six years after the date hereof.
(c) Company, Parent and the Surviving Corporation shall use their
respective reasonable best efforts to maintain in effect for six years from the
Effective Time, if available, the current directors' and officers' liability
insurance policies maintained by the Company (provided that Parent and the
Surviving Corporation may substitute therefor policies of at least the same
coverage containing terms and conditions which are not materially less
favorable) with respect to matters occurring prior to the Effective Time;
provided, however, that if the existing policies expire, are terminated or
canceled during such period Parent or the Surviving Corporation will use its
reasonable best efforts to obtain substantially similar policies.
Notwithstanding the foregoing, in no event shall Parent or the Surviving
Corporation be required to expend pursuant to this Section 6.07(c) more than an
amount per year equal to 200% of current annual premiums paid by the Company for
such insurance (which premiums the Company represents and warrants to be
$183,352 in the aggregate).
Section 6.08. Further Action; Reasonable Best Efforts. Upon the terms and
subject to the conditions hereof, each of the parties hereto shall (i) make
promptly its respective filings, and thereafter make any other required
submissions, under the HSR Act with respect to the Transactions and (ii) use its
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
Transactions, including, without limitation, using all reasonable efforts to
obtain all licenses, permits, consents, approvals, authorizations,
qualifications and orders of governmental authorities and parties to contracts
with the Company and the Subsidiaries as are necessary for the consummation of
the Transactions and to fulfill the conditions to the Offer and the Merger. In
case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall use their reasonable best
efforts to take all such action.
Section 6.09. Public Announcements. Parent and the Company shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to this Agreement, any Transaction or the Company's
earnings for the first quarter of 1998, and shall not issue any such press
release or make any such public statement without the prior consent of the other
parties, except and until as may be required by law or any listing agreement
with a national securities exchange to which Parent or the Company is a party.
Section 6.10. Confidentiality Agreement. The Company hereby waives the
provisions of the Confidentiality Agreement as and to the extent necessary to
permit the consummation of each Transaction. Upon the acceptance for payment of
Shares pursuant to the Offer, the Confidentiality Agreement shall be deemed to
have terminated without further action by the parties thereto.
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Section 6.11. SEC and Stockholder Filings. The Company shall deliver to
Parent in accordance with Section 9.02 a copy of all material public reports and
materials as and when it sends the same to its stockholders, the SEC or any
state or foreign securities commission.
Section 6.12. Takeover Statutes. If any "fair price" "moratorium,"
"control share acquisition" or other similar antitakeover statute or regulation
enacted under state or federal laws in the United States (each a "Takeover
Statute"), including, without limitation, Section 203 of the Delaware Code, is
or may become applicable to the Offer, the Merger, this Agreement, or any
Transactions, the Company and the members of its Board of Directors (or any
required and duly constituted Committee thereof) will grant such approvals, and
take such actions as are necessary so that the transactions contemplated by this
Agreement may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize the effects of
any Takeover Statute on any of the transactions contemplated hereby.
Section 6.13. Certain Actions. Following the consummation of the Offer but
prior to the Effective Time, (i) the Company agrees, if requested by the
Purchaser, to issue Shares to the Purchaser representing a maximum of 19.9% of
the Shares outstanding immediately prior to such issuance and (ii) the Company
shall terminate the Credit Agreement between the Company and Northern Trust.
ARTICLE VII
CONDITIONS TO THE MERGER
Section 7.01. Conditions to the Merger. The respective obligations of each
party to effect the Merger shall be subject to the satisfaction at or prior to
the Effective Time of the following conditions:
(a) Stockholder Approval. This Agreement and the transactions
contemplated hereby shall have been approved and adopted by the affirmative
vote of the stockholders of the Company to the extent required by Delaware
Law;
(b) No Order. No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, executive
order, decree, injunction or other order (whether temporary, preliminary or
permanent) which is then in effect and has the effect of making the
acquisition of Shares by Parent or Purchaser or any Affiliate of either of
them illegal or otherwise preventing consummation of the Transactions; and
(c) Offer. Purchaser or its permitted assignee shall have purchased
all Shares validly tendered and not withdrawn pursuant to the Offer;
provided, however, that this condition shall not be applicable to the
obligations of Parent or Purchaser if Purchaser fails to purchase any
Shares validly tendered and not withdrawn pursuant to the Offer in breach
of this Agreement or the terms of the Offer.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.01. Termination. This Agreement may be terminated and the Merger
and the other Transactions may be abandoned at any time prior to the Effective
Time, notwithstanding any requisite approval and adoption of this Agreement and
the transactions contemplated hereby by the stockholders of the Company:
(a) By mutual written consent duly authorized by the Boards of
Directors of Parent, Purchaser and the Company; or
(b) By either Parent, Purchaser or the Company if (i) the Offer is not
completed on or before August 30, 1998; provided, however, that the right
to terminate this Agreement under this clause (i) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure to complete the Offer on or
before such date; (ii) the Effective Time shall not have occurred on or
before October 30, 1998; provided, however, that the right to terminate
this
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Agreement under this clause (ii) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause
of, or resulted in, the failure of the Effective Time to occur on or before
such date; or (iii) any Governmental Authority shall have enacted or
promulgated any law, rule or regulation or shall have issued an order,
decree, ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Offer or the Merger or making the acquisition of
Shares by Parent or Purchaser, or any Affiliate thereof, illegal, and such
law, rule, regulation, order, decree, ruling or other action shall remain
in effect or have become final and nonappealable;
(c) By Parent if (i) due to an occurrence or circumstance that would
result in a failure to satisfy any condition set forth in Annex A hereto or
the continuing existence of those conditions set forth in clauses (a)
through (i) in Annex A hereto, Purchaser shall have (A) failed to commence
the Offer within five Business Days following the date of this Agreement,
(B) terminated the Offer without having accepted any Shares for payment
thereunder or (C) failed to pay for Shares pursuant to the Offer within 75
calendar days following the commencement of the Offer, unless such failure
to pay for Shares shall have been caused by or resulted from the failure of
Parent or Purchaser to perform in any material respect any material
covenant or agreement of either of them contained in this Agreement or the
material breach by Parent or Purchaser of any material representation or
warranty of either of them contained in this Agreement; or (ii) prior to
the purchase of Shares pursuant to the Offer, the Board or any committee
thereof shall have withdrawn or modified in a manner adverse to Purchaser
or Parent its approval or recommendation of the Offer, this Agreement, the
Merger or any other Transaction or shall have taken any action to
facilitate (other than as contemplated by this Agreement), approve or
recommend any Acquisition Proposal; or
(d) By the Company, upon approval of the Board, if (i) Purchaser shall
have (A) failed to commence the Offer within five Business Days following
the date of this Agreement, (B) terminated the Offer without having
accepted any Shares for payment thereunder or (C) failed to pay for Shares
pursuant to the Offer within 75 calendar days following the commencement of
the Offer, unless such failure to pay for Shares shall have been caused by
or resulted from the failure of the Company to perform in any material
respect any material covenant or agreement of it contained in this
Agreement or the material breach by the Company of any material
representation or warranty of it contained in this Agreement; or (ii) prior
to the purchase of Shares pursuant to the Offer, the Board shall have
withdrawn or modified in a manner adverse to Purchaser or Parent its
approval or recommendation of the Offer, this Agreement, the Merger or any
other Transaction in order to enter into an agreement for any Acquisition
Proposal.
Section 8.02. Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.01, this Agreement shall forthwith become
void, and there shall be no liability on the part of any party hereto, except
(i) as set forth in Sections 6.04, 8.03 and 9.01 and (ii) nothing herein
(including the expiration of representations and warranties in accordance with
Section 9.01) shall relieve any party from liability for any breach hereof.
Section 8.03. Fees. (a) In the event that (x) this Agreement is terminated
pursuant to Section 8.01(c)(ii) or Section 8.01(d)(ii), or (y) this Agreement is
terminated pursuant to Section 8.01(b) and (A) an Acquisition Proposal shall
have been publicly disclosed prior to the date of such termination and (B) a
Superior Proposal shall have been consummated on or prior to the first
anniversary of such termination; then the Company shall pay Parent promptly (but
in no event later than three Business Days after such termination shall have
occurred or such Superior Proposal shall have been consummated, as the case may
be) a fee of $10 million (the "Fee"), which amount shall be payable in
immediately available funds.
(b) Except as set forth in this Section 8.03, all costs and expenses
incurred in connection with this Agreement and the Transactions shall be paid by
the party incurring such expenses, whether or not any Transaction is
consummated.
(c) In the event that the Company shall fail to pay the Fee when due, the
Company shall reimburse Parent and the Purchaser for the costs and expenses
actually incurred or accrued by Parent and Purchaser (including, without
limitation, fees and expenses of counsel) in connection with the collection
under and
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enforcement of this Section 8.03, together with interest on such unpaid Fee,
commencing on the date that the Fee became due, at a rate equal to the rate of
interest publicly announced by Citibank, N.A., from time to time, in the City of
New York, as such bank's Base Rate plus 2%.
Section 8.04. Amendment. Subject to Section 6.03, this Agreement may be
amended by the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective Time;
provided, however, that after the approval and adoption of this Agreement and
the transactions contemplated hereby by the stockholders of the Company, no
amendment may be made which would reduce the amount or change the type of
consideration into which each Share shall be converted upon consummation of the
Merger. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
Section 8.05. Waiver. At any time prior to the Effective Time, any party
hereto may (i) extend the time for the performance of any obligation or other
act of any other party hereto, (ii) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any agreement or condition contained herein. Any
such extension or waiver shall be valid only if expressly set forth in an
instrument in writing signed by the party or parties to be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.01, as the case may be, except that the agreements set
forth in Article II and Sections 6.06 and 6.07 shall survive the Effective Time
indefinitely and those set forth in Sections 6.04 and 8.03 shall survive
termination indefinitely.
Section 9.02. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section 9.02):
if to Parent or Purchaser:
Viad Corp
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice President, General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Travelers Express Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (612) ( ▇▇▇-▇▇▇▇
Attention: President
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
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if to the Company:
MoneyGram Payment Systems, Inc.
Park ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Section 9.03. Certain Definitions. For purposes of this Agreement, the
term:
(a) "Affiliate" of a specified person means a person who directly or
indirectly through one or more intermediaries controls, is controlled by,
or is under common control with, such specified person;
(b) "Beneficial Owner" with respect to any Shares means a person who
shall be deemed to be the beneficial owner of such Shares (i) which such
person or any of its Affiliates or associates (as such term is defined in
Rule 12b-2 promulgated under the Exchange Act) beneficially owns, directly
or indirectly, (ii) which such person or any of its Affiliates or
associates has, directly or indirectly, (A) the right to acquire (whether
such right is exercisable immediately or subject only to the passage of
time), pursuant to any agreement, arrangement or understanding or upon the
exercise of consideration rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement, arrangement
or understanding or (iii) which are beneficially owned, directly or
indirectly, by any other persons with whom such person or any of its
Affiliates or associates or person with whom such person or any of its
Affiliates or associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any Shares;
(c) "Business Day" means any day on which the principal offices of the
SEC in Washington, D.C. are open to accept filings, or, in the case of
determining a date when any payment is due, any day on which banks are not
required or authorized to close in the City of New York;
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and the regulations, revenue rulings, revenue procedures and announcements
promulgated thereunder. All citations to the Code or to the regulations
promulgated thereunder shall include any amendments or any substitute or
successor provisions thereto.
(e) "Control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
(f) "Environmental Laws" means any federal, state or local law, as in
effect on the date hereof, relating to (A) releases or threatened releases
of Hazardous Substances or materials containing Hazardous Substances; (B)
the manufacture, handling, transport, use, treatment, storage or disposal
of Hazardous Substances or materials containing Hazardous Substances; or
(C) otherwise relating to pollution of the environment or the protection of
human health.
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(g) "Government Authority" means any agency, instrumentality,
department, commission, court, tribunal or board of any government, whether
foreign or domestic and whether national, federal, state, provincial or
local.
(h) "Hazardous Substances" means (A) those substances defined in or
regulated under the following federal statutes and their state
counterparts, as each may be amended from time to time, and all regulations
thereunder; the Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Federal Insecticide, Fungicide, and
Rodenticide Act and the Clean Air Act; (B) petroleum and petroleum products
including crude oil and any fractions thereof; (C) natural gas, synthetic
gas and any mixtures thereof; (D) radon; (E) any substance with respect to
which a federal, state or local agency requires environmental
investigation, monitoring, reporting or remediation.
(i) "Material Adverse Effect" means any change, effect, condition,
event or circumstance that is or is reasonably likely to be materially
adverse to the business, financial condition, assets, properties or results
of operations of the Company and the Subsidiaries, taken as a whole,
including, (x) termination of the Company's Agency Agreement with Banamex
or (y) termination of the Company's agency agreements with agents (other
than American Express Travel Related Services Company, Inc. and Safeway,
Inc.), representing ten percent or more of the aggregate send or receive
transaction volume either sent or received by the Company and its
Subsidiaries during 1997; provided, however, that "Material Adverse Effect"
shall not include any change, effect, condition, event or circumstance
arising out of or attributable to (i) any decrease in the market price of
the Shares (but not any change, effect, condition, event or circumstance
underlying such decrease to the extent that it would otherwise constitute a
Material Adverse Effect), (ii) changes, effects, conditions, events or
circumstances that generally affect the industries in which the Company
operates (including legal and regulatory changes), (iii) general economic
conditions or change, effects, conditions or circumstances affecting the
securities markets generally, (iv) changes arising from the consummation of
the Transactions or the announcement of the execution of this Agreement,
(v) any reduction in the price of services or products offered by the
Company in response to the reduction in price of comparable services or
products offered by a competitor, (vi) any of the items set forth in
Schedule 9.03(e).
(j) "Person" means an individual, corporation, partnership, limited
partnership, syndicate, person (including, without limitation, a "person"
as defined in Section 13(d)(3) of the Exchange Act), trust, association or
entity or government, political subdivision, agency or instrumentality of a
government.
(k) "Returns" shall mean all returns, declarations, reports,
statements, and other documents required to be filed with any government or
taxing authority in respect of Taxes, and the term "Return" shall mean any
one of the foregoing Returns.
(l) "SEC" means the U.S. Securities and Exchange Commission.
(m) "SEC Rules" means any rules, regulations or interpretations of the
SEC or the staff thereof.
(n) "Subsidiary" or "Subsidiaries" of the Company, the Surviving
Corporation, Parent or any other person means an Affiliate controlled by
such person, directly or indirectly, through one or more intermediaries.
(o) "Tax" or "Taxes" shall mean (A) all federal, state and local and
foreign taxes and assessments of any nature whatsoever, based on the laws
and regulations in effect from time to time through the Closing Date,
including, without limitation, all income, profits, franchise, gross
receipts, capital, sales, use, withholding, value added, ad valorem,
transfer, employment, social security, disability, occupation, property,
severance, production, exercise, environmental and other taxes, duties and
other similar governmental charges and assessments imposed by or on behalf
of any government or taxing authority, including all interest, penalties
and additions imposed with respect to such amounts, and (B) any obligations
under any agreements or arrangements with respect to any Taxes described in
clause (A) above.
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Section 9.04. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of 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 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 a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
Section 9.05. Entire Agreement; Assignment. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes, except as set forth in Sections 6.04 and 6.10, all prior agreements
and undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof. This Agreement shall not be assigned by
operation of law or otherwise, except that Parent and Purchaser may assign all
or any of their rights and obligations hereunder to any wholly-owned Subsidiary
of Parent provided that no such assignment shall relieve the assigning party of
its obligations hereunder if such assignee does not perform such obligations.
Section 9.06. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, other than Section 6.06 and 6.07 (which is intended to be for
the benefit of the persons covered thereby and may be enforced by such persons).
Section 9.07. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined in any Delaware state court.
Section 9.08. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
Section 9.09. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
VIAD CORP
A Delaware Corporation
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Agent; President
and CEO of Travelers Express
Company, Inc.
PINE VALLEY ACQUISITION
CORPORATION
A Delaware Corporation
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
MONEYGRAM PAYMENT
SYSTEMS, INC.
A Delaware Corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman and CEO
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ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or pay for any Shares tendered pursuant to the
Offer, and may terminate or amend the Offer and may postpone the acceptance for
payment of and payment for Shares tendered, if (w) the Minimum Condition shall
not have been satisfied, (x) any applicable waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer,
(y) any Pre-Offer Approval shall not have been obtained, (z) at any time on or
after the date of this Agreement, and prior to the acceptance for payment of
Shares, any of the following conditions shall exist:
(a) there shall be pending before any court any action or proceeding
instituted by any Governmental Authority (i) that is reasonably likely to
prohibit or limit materially the ownership or operation by the Company,
Parent or any of their Subsidiaries, of all or any material portion of the
business or assets of the Company and the Subsidiaries, taken as a whole,
or any material portion of the business or assets of Parent and its
Subsidiaries, taken as a whole, or to compel the Company, Parent or any of
their Subsidiaries to dispose of or hold separate all or any material
portion of the business or assets of the Company and the Subsidiaries,
taken as a whole, or Parent and its Subsidiaries taken as a whole, as a
result of the Transactions; (ii) reasonably likely to impose or confirm
limitations on the ability of Parent or Purchaser to exercise effectively
full rights of ownership of any Shares, including, without limitation, the
right vote any Shares acquired by Purchaser pursuant to the Offer or
otherwise on all matters properly presented to the Company's Stockholders
including, without limitation, the approval and adoption of this Agreement
and the transactions contemplated hereby; or (iii) seeking to require
divestiture by Parent or Purchaser of any Shares;
(b) there shall have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, entered, enforced, promulgated, amended, issued and deemed
applicable to (i) Parent, the Company or any Subsidiary or Affiliate of
Parent or the Company or (ii) any Transaction, by any Governmental
Authority, domestic or foreign, which is reasonably likely to result,
directly or indirectly in any of the consequences referred to in clauses
(i) through (iii) of paragraph (a) above;
(c) there shall have occurred, and be continuing, any change,
condition, event or other development that, individually or in the
aggregate, has a Material Adverse Effect;
(d) any representation or warranty of the Company in this Agreement,
that is qualified by materiality or Material Adverse Effect shall not be
true and correct or, without regard to such qualification, any such
representations or warranties shall not be true and correct so as to in
aggregate have a Material Adverse Effect, or any representation or warranty
not so qualified shall not be true and correct in all material respects, in
each case as if such representation or warranty was made as of such time on
or after the date of this Agreement (except for representations and
warranties made as of a specific date which shall be true and correct as of
such date) or the Company shall not have delivered to Parent a certificate
of the Company to such effect signed by a duly authorized officer thereof
and dated as of the date on which Parent shall first accept Shares for
payment.
(e) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under this
Agreement;
(f) this Agreement shall have been terminated in accordance with its
terms; or
(g) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of or payment
for Shares thereunder.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or may be waived by
▇-▇
▇▇
▇▇▇▇▇▇▇▇▇ or Parent in whole or in part at any time and from time to time in
their sole discretion. The failure by Parent or Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right; the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances; and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
A-2
35
ANNEX B
AGREEMENT RESPECTING THE PLANS
AND OTHER EMPLOYEE BENEFIT MATTERS
1. IN GENERAL
Parent hereby agrees that for a period of two years immediately following
the Effective Time, it shall, or shall cause the Surviving Corporation and its
Subsidiaries to, continue to maintain employee benefit and welfare plans,
programs, contracts, agreements, severance plans and policies (each referred to,
for purposes of this paragraph, as a "plan"), for the benefit of active
employees of the Company and its Subsidiaries which in the aggregate provide
benefits that are comparable to, and no less favorable than, the benefits
provided to such active employees pursuant to the plans set forth in Sections A,
B and F of Schedule 3.10(a) Part I on the date hereof, or to provide during such
period benefits equivalent to those provided under corresponding plans of
Travelers Group or its Subsidiaries if such benefits are greater. Parent hereby
guarantees the Surviving Corporation's performance of the obligations under this
paragraph.
2. CERTAIN CONTRACTS
Parent and Purchaser hereby agree to honor, without modification, and after
the purchase of Shares pursuant to the Offer, Parent agrees to cause the Company
and its Subsidiaries to honor, all contracts, agreements, arrangements,
policies, plans and commitments of the Company (or any of its Subsidiaries) in
effect as of the date hereof which are applicable to any employee or former
employee or any director or former director of the Company (or any of its
Subsidiaries), including, without limitation, the Company Executive Retention
Plan dated May 13, 1997, as amended on July 8, 1997 and July 21, 1997.
3. CERTAIN PLANS
Parent and Purchaser hereby agree to allow active employees of the Company
to be eligible to participate in incentive compensation plans and stock option
plans of Travelers Group or its Subsidiaries on terms comparable to the terms on
which employees of comparable status and seniority at other comparable
Subsidiaries of Parent participate.
B-1
