AGREEMENT AND PLAN OF MERGER
BY AND AMONG
PER-SE TECHNOLOGIES, INC.
ROYAL MERGER CO.,
AND
NDCHEALTH CORPORATION
Dated as of August 26, 2005
TABLE OF CONTENTS
ARTICLE 1 TRANSACTIONS AND TERMS OF MERGER............................ 1
1.1 Merger...................................................... 1
1.2 Time and Place of Closing................................... 1
1.3 Effective Time.............................................. 2
ARTICLE 2 TERMS OF MERGER............................................. 2
2.1 Certificate of Incorporation................................ 2
2.2 Bylaws...................................................... 2
2.3 Directors and Officers...................................... 2
ARTICLE 3 MANNER OF CONVERTING SHARES................................. 2
3.1 Conversion of Company Common Stock.......................... 2
3.2 Certain Adjustments......................................... 3
3.3 Shares Held by the Company, Parent or Purchaser............. 3
3.4 Dissenting Stockholders..................................... 3
3.5 Treatment of Options and Other Equity Awards................ 4
3.6 Intentionally Omitted....................................... 4
3.7 No Fractional Shares........................................ 4
ARTICLE 4 EXCHANGE OF SHARES.......................................... 5
4.1 Availability of Consideration............................... 5
4.2 Exchange of Shares.......................................... 5
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY............... 6
5.1 Organization and Qualification; Subsidiaries................ 6
5.2 Certificate of Incorporation and Bylaws..................... 7
5.3 Capitalization.............................................. 7
5.4 Authority Relative to the Transactions...................... 8
5.5 No Conflict; Required Filings and Consents.................. 8
5.6 Permits; Compliance......................................... 9
5.7 SEC Filings; Financial Statements; Undisclosed
Liabilities................................................. 9
5.8 Absence of Certain Changes or Events........................ 11
5.9 Litigation.................................................. 11
5.10 Employee Benefit Plans...................................... 12
5.11 Labor and Employment Matters................................ 14
5.12 Real Property; Title to Assets.............................. 15
5.13 Intellectual Property....................................... 15
5.14 Taxes....................................................... 17
5.15 Environmental Matters....................................... 18
5.16 Company Rights Agreement.................................... 18
5.17 Material Contracts.......................................... 19
5.18 Insurance................................................... 19
5.19 Certain Business Practices.................................. 20
5.20 Healthcare Information Laws................................. 20
5.21 Opinion of Financial Advisors............................... 20
5.22 Brokers..................................................... 20
5.23 HIS Sale.................................................... 20
5.24 Note Indenture.............................................. 21
5.25 Statements True and Correct................................. 21
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER...... 21
6.1 Organization and Qualification; Subsidiaries................ 21
6.2 Certificate of Incorporation and Bylaws..................... 22
6.3 Capitalization.............................................. 22
6.4 Authority Relative to the Transactions...................... 22
6.5 No Conflict; Required Filings and Consents.................. 23
6.6 Permits; Compliance......................................... 23
6.7 SEC Filings; Financial Statements; Undisclosed
Liabilities................................................. 24
6.8 Absence of Certain Changes or Events........................ 25
6.9 Litigation.................................................. 25
6.10 Employee Benefit Plans...................................... 25
6.11 Taxes....................................................... 28
6.12 Parent Rights Agreement..................................... 28
6.13 Material Contracts.......................................... 29
6.14 Certain Business Practices.................................. 29
6.15 Healthcare Information Laws................................. 29
6.16 Statements True and Correct................................. 29
6.17 Financing................................................... 30
6.18 Stock Ownership............................................. 30
6.19 Brokers..................................................... 30
ARTICLE 7 CONDUCT OF BUSINESS PENDING CONSUMMATION.................... 30
7.1 Covenants of the Company.................................... 30
7.2 No Control of Other Party's Business........................ 32
7.3 Covenants of Parent......................................... 32
7.4 Adverse Changes in Condition................................ 32
7.5 Reports..................................................... 33
7.6 Notes Tender Offer; Discharge of Note Indenture............. 33
ARTICLE 8 ADDITIONAL AGREEMENTS....................................... 34
8.1 Registration Statement; Joint Proxy Statement/Prospectus;
Stockholder Approval........................................ 34
8.2 Other Offers, Etc. ......................................... 35
8.3 Exchange Listing............................................ 37
8.4 Antitrust Notification; Consents of Governmental
Authorities................................................. 37
8.5 Filings with State Offices.................................. 38
8.6 Agreement as to Efforts to Consummate....................... 38
8.7 Investigation and Confidentiality........................... 38
8.8 Public Announcements........................................ 39
8.9 State Takeover Laws......................................... 39
8.10 Intentionally Omitted....................................... 39
ii
8.11 Employee Benefits Plans..................................... 39
8.12 Indemnification; Insurance.................................. 40
8.13 Sale of HIS................................................. 41
8.14 Company Affiliates.......................................... 41
8.15 Stockholder Litigation...................................... 41
8.16 Letters of the Company's Accountants........................ 41
8.17 Exemption for Liability Under Section 16(b)................. 41
ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE........... 42
9.1 Conditions to Obligations of Each Party..................... 42
9.2 Conditions to Obligations of Parent and Purchaser........... 42
9.3 Conditions to Obligations of the Company.................... 43
ARTICLE 10 TERMINATION................................................. 44
10.1 Termination................................................. 44
10.2 Effect of Termination....................................... 45
10.3 Non-Survival of Representations and Covenants............... 45
ARTICLE 11 MISCELLANEOUS............................................... 45
11.1 Definitions................................................. 45
11.2 Expenses; Effect of Termination............................. 51
11.3 Entire Agreement............................................ 53
11.4 Amendments.................................................. 53
11.5 Waivers..................................................... 53
11.6 Assignment.................................................. 53
11.7 Parties in Interest......................................... 53
11.8 Notices..................................................... 53
11.9 Governing Law; Venue; Waiver of Jury Trial.................. 54
11.10 Counterparts................................................ 54
11.11 Captions; Articles and Sections............................. 54
11.12 Interpretations............................................. 54
11.13 Enforcement of Agreement.................................... 55
11.14 Severability................................................ 55
iii
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of August 26, 2005 by and among PER-SE TECHNOLOGIES, INC., a
Delaware
corporation ("Parent"), ROYAL MERGER CO., a
Delaware corporation and a wholly
owned subsidiary of Parent ("Purchaser"), and NDCHEALTH CORPORATION, a
Delaware
corporation (the "Company"). Certain capitalized terms used in this Agreement
are defined in Section 11.1 of this Agreement.
PREAMBLE
WHEREAS, this Agreement provides for the business combination between
Parent and the Company upon the terms and subject to the conditions of this
Agreement as follows: Parent will acquire all of the capital stock of the
Company through the merger of Purchaser with and into the Company (the
"Merger"), with the Company as the surviving corporation;
WHEREAS, the Board of Directors of the Company has approved, and the
Company has entered into simultaneously with this Agreement, certain agreements
pursuant to which, prior to the Effective Time, (a) all of the Shareholder
Assets (as defined in the Contribution Agreement) will be transferred to or will
remain with, as the case may be, NDC Health Information Services (Arizona),
Inc., a wholly owned subsidiary of the Company ("HIS"), (b) HIS will assume or
retain, as the case may be, the Company Assumed Liabilities (as defined in the
Contribution Agreement), (c) all of the Company Assets (as defined in the
Contribution Agreement) will be transferred to or will remain with, as the case
may be, Parent, (d) Parent will assume or retain, as the case may be, the
Shareholder Assumed Liabilities (as defined in the Contribution Agreement), and
(e) all of the outstanding shares of common stock, par value $1.00 per share of
HIS (the "HIS Common Stock"), will be sold to Wolters Kluwer Health, Inc. (the
"Information Buyer") (the "Information Sale") (the foregoing transactions are
collectively referred to as the "Information Restructuring");
WHEREAS, the respective Boards of Directors of Parent, Purchaser and the
Company are of the opinion that the transactions described herein are advisable,
fair to and in the best interests of the Parties to this Agreement and their
respective stockholders. The Boards of Directors of Parent, Purchaser and the
Company have each approved the Merger in accordance with applicable law, upon
the terms and subject to the conditions set forth herein;
WHEREAS, the transactions described in this Agreement are subject to the
approvals of the stockholders of the Company, the stockholders of Parent,
expiration of the required waiting period under the HSR Act, and the
satisfaction of certain other conditions described in this Agreement;
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the Parties agree
as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger.
Subject to the terms and conditions of this Agreement, at the Effective
Time, Purchaser shall be merged with and into the Company in accordance with the
applicable provisions of the DGCL. The Company shall be the surviving
corporation resulting from the Merger (the "Surviving Corporation"), shall
become a wholly owned Subsidiary of Parent and shall continue to be governed by
the Laws of the State of
Delaware.
1.2 Time and Place of Closing.
The closing of the transactions contemplated hereby (the "Closing") will
take place at 8:00 a.m. on the date that the Effective Time, as defined below,
occurs, or at such other time as the Parties, acting through
1
their authorized officers, may mutually agree. The Closing shall be held at such
location as may be mutually agreed upon by the Parties.
1.3 Effective Time.
The Merger and other transactions contemplated by this Agreement shall
become effective on the date and at the time the Certificate of Merger
reflecting the Merger (the "Certificate of Merger") shall each become effective
with the Secretary of State of the State of
Delaware (the "Effective Time").
Subject to the terms and conditions of this Agreement, unless otherwise mutually
agreed upon in writing by the authorized officers of each Party, the Parties
shall cause the Effective Time to occur no later than the second Business Day
after the satisfaction of the conditions set forth in ARTICLE 9 of this
Agreement (other than (i) those conditions that are waived by the Party for
whose benefit such conditions exist, and (ii) any such conditions which, by
their terms, are not capable of being satisfied until the Closing, but subject
to those conditions).
ARTICLE 2
TERMS OF MERGER
2.1 Certificate of Incorporation.
The Certificate of Incorporation of the Company as in effect immediately
prior to the Effective Time shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended as provided by Law and such
Certificate of Incorporation.
2.2 Bylaws.
Unless otherwise determined by Parent prior to the Effective Time, subject
to Section 8.12, at the Effective Time, the Bylaws of the Company shall be
amended in the Merger to be identical to the Bylaws of the Purchaser, as in
effect immediately prior to the Effective Time, and shall be the Bylaws of the
Surviving Corporation until thereafter amended as provided by Law, the
Certificate of Incorporation of the Surviving Corporation and such Bylaws.
2.3 Directors and Officers.
The directors of Purchaser immediately prior to the Effective Time shall be
the initial directors of the Surviving Corporation, each to hold office in
accordance with the Certificate of Incorporation and Bylaws of the Surviving
Corporation, and the officers of Purchaser immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation, in each case
until their respective successors are duly elected or appointed and qualified or
until their earlier death, resignation or removal.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Company Common Stock.
At the Effective Time, without any action on the part of the Parties or the
holders of Company Common Stock, the Merger shall be effected in accordance with
the following terms:
(a) Each share of common stock, par value $0.01 per share, of Purchaser
(the "Purchaser Common Stock") issued and outstanding immediately prior to
the Effective Time shall be converted into and exchanged for the right to
receive one share of common stock of the Surviving Corporation.
(b) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (excluding shares cancelled
pursuant to Section 3.3 and Dissenting Shares), together with the Company
Rights issued pursuant to the Company Rights Agreement (as such terms are
defined
2
in Section 5.16), shall, subject to the provisions of Section 3.7, be
converted into and exchanged for the right to receive (i) $13.00 in cash
(without interest), plus (ii) a number of fully paid, nonassessable shares
of Parent Common Stock (together with the Parent Rights associated
therewith) equal to $6.50 divided by the Applicable Price (the "Exchange
Ratio") ((i) and (ii) collectively, the "Per Share Merger Consideration");
provided, however, Parent may, at its sole option, adjust the Per Share
Merger Consideration so that the Per Share Merger Consideration would
instead, subject to the provisions of Section 3.7, consist of (A) an amount
(determined by Parent) in cash (without interest) greater than $13.00 but
less than or equal to the Total Per Share Amount (the "Adjusted Cash
Amount"), plus (B) a number of fully paid, nonassessable shares of Parent
Common Stock (together with the Parent Rights associated therewith) equal
to (1) the amount, if any, by which the Total Per Share Amount exceeds the
Adjusted Cash Amount, divided by (2) the Applicable Price (the "Adjusted
Exchange Ratio"). If Parent adjusts the Per Share Merger Consideration in
accordance with the foregoing proviso, Parent shall deliver written notice
to the Company and the stockholders of the Company at least five (5)
Business Days prior to the Company Stockholders' Meeting (as hereinafter
defined), which written notice shall set forth the Adjusted Cash Amount and
the Adjusted Exchange Ratio. It is expressly understood that Parent may
satisfy such notice obligation with respect to stockholders of the Company
by issuing a press release in accordance with Parent's normal business
practices. The Exchange Ratio or the Adjusted Exchange Ratio, as
applicable, shall be rounded to the nearest one-ten thousandths of a share.
3.2 Certain Adjustments.
If after the date of this Agreement and at or prior to the Effective Time,
the outstanding shares of Parent Common Stock are changed into a different
number of shares by reason of any reclassification, recapitalization, split-up,
stock split, subdivision, combination or exchange of shares, or any dividend
payable in stock or other securities is declared thereon or rights issued in
respect thereof with a record date within such period, the Exchange Ratio or the
Adjusted Exchange Ratio, as applicable, will be adjusted accordingly, if
necessary and without duplication, to provide to the holders of Company Common
Stock the same economic effect as contemplated by this Agreement.
3.3 Shares Held by the Company, Parent or Purchaser.
Each share of Company Common Stock held in the treasury of the Company and
each share of Company Common Stock owned by Purchaser or Parent immediately
prior to the Effective Time shall be canceled without any conversion thereof and
no payment or distribution shall be made with respect thereto.
3.4 Dissenting Stockholders.
(a) Notwithstanding any provision of this Agreement to the contrary, shares
(collectively, the "Dissenting Shares") of Company Common Stock that are
outstanding immediately prior to the Effective Time and that are held by
stockholders of the Company who have exercised and perfected appraisal rights
for such shares of Company Common Stock in accordance with Section 262 of the
DGCL (the "Dissenting Stockholders") shall not be converted into or represent
the right to receive the Per Share Merger Consideration pursuant to Section
3.1(b). Such Dissenting Stockholders shall be entitled to receive payment of the
appraised value of such Dissenting Shares in accordance with Section 262 of the
DGCL. All Dissenting Shares held by Dissenting Stockholders who shall have
failed to perfect or who effectively shall have withdrawn or lost their rights
to appraisal of such shares of Company Common Stock under the DGCL 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 Per Share Merger
Consideration pursuant to Section 3.1(b), without any interest thereon, upon
surrender of the Certificate or Certificates that formerly evidenced such shares
of Company Common Stock, in the manner provided, and subject to the conditions
of ARTICLE 4.
(b) The Company shall give Parent (i) prompt notice of any demands for
appraisal received by the Company, withdrawals of such demands, and any other
related instruments served pursuant to the DGCL and received by the Company and
(ii) prior to the Effective Time, the opportunity to participate in all
3
negotiations and proceedings with respect to demands for appraisal under the
DGCL. The Company shall not, except with the prior written consent of Parent,
which shall not be unreasonably withheld or delayed, make any payment with
respect to any demands for appraisal or offer to settle or settle any such
demands.
3.5 Treatment of Options and Other Equity Awards.
(a) Between the date of this Agreement and the Effective Time, the Company
shall take all necessary action (which action shall be effective as of the
Effective Time) to terminate, as of the Effective Time, any and all plans of the
Company in which there are outstanding options to acquire Company Common Stock
or under which any such options could be granted and each stock option agreement
granted otherwise than under such plans which shall themselves constitute
separate plans, each as amended through the date of this Agreement
(collectively, the "Company Stock Option Plans"), (ii) cancel, as of the
Effective Time, each outstanding option to purchase shares of Company Common
Stock granted under the Company Stock Option Plans (each, a "Company Stock
Option") that is outstanding and unexercised, whether or not vested or
exercisable, as of such date, and (iii) give effect to the remaining provisions
of this Section 3.5 (in each case, without the creation of additional liability
to the Company or any of its Subsidiaries).
(b) As of the Effective Time, each holder of a Company Stock Option,
whether or not vested or exercisable, immediately prior to the Effective Time
shall be entitled to receive the Per Share Merger Consideration pursuant to
Section 3.1(b) as if such holder was a stockholder of the Company holding a
whole number of shares of Company Common Stock (rounded downward to the nearest
whole share) equal to (i) the product of (X) the total number of shares of
Company Common Stock subject to such Company Stock Option multiplied by (Y) the
excess, if any, of the Total Per Share Amount over the exercise price per share
of such Company Stock Option (rounded to the nearest cent), divided by (ii) the
Total Per Share Amount. No holder of a Company Stock Option that has an exercise
price per share that is equal to or greater than the Total Per Share Amount
shall be entitled to any payment with respect to such cancelled Company Stock
Option before or after the Effective Time.
(c) As of the Effective Time, each outstanding Company Restricted Stock
Award, the restrictions of which have not lapsed immediately prior to the
Effective Time, shall become fully vested and the holder of the resultant shares
of Company Common Stock thereof shall be entitled to receive the Per Share
Merger Consideration pursuant to Section 3.1(b) for such shares.
(d) As of the Effective Time, each outstanding unit granted under the
Company Stock Option Plans representing the right to receive shares of Company
Common Stock in the future (each a "Stock Unit") that is outstanding as of
immediately prior to the Effective Time, whether or not vested, shall become
fully vested and the holder of the resultant shares thereof shall be entitled to
receive the Per Share Merger Consideration pursuant to Section 3.1(b) for such
shares.
(e) Immediately following the execution and delivery of this Agreement, the
Company's 2000 Employee Stock Purchase Plan (the "ESPP") shall be terminated
and, in accordance with the ESPP, any cash balances then credited to the
Participants' Contribution Accounts (as defined in the ESPP) shall be
distributed as soon as practicable, without interest.
(f) On or as of the Effective Time, the Company shall cancel or cause to be
canceled, for a payment of not more than $1,740,000, that certain Warrant
Agreement dated December 31, 2003, between the Company and ArcLight System LLC
and the Warrant (the "Warrant Agreement"), to purchase 391,098 shares of Company
Common Stock at an exercise price of $26.24 per share issued to ArcLight System
LLC thereunder (the "Warrant").
3.6 Intentionally Omitted.
3.7 No Fractional Shares.
Notwithstanding any other provision of this Agreement, neither certificates
nor scrip for fractional shares of Parent Common Stock shall be issued in the
Merger. Each holder who otherwise would have been entitled to a fraction of a
share of Parent Common Stock shall receive in lieu thereof cash (without
interest) in an
4
amount determined by multiplying the fractional share interest to which such
holder would otherwise be entitled (after taking into account all shares of
Company Common Stock owned by such holder at the Effective Time) by the Average
Price. No such holder shall be entitled to dividends, voting rights or any other
rights in respect of any fractional share.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Availability of Consideration.
At or prior to the Effective Time, Parent shall (i) designate a bank or
trust company to act as exchange agent (which designation shall be subject to
the Company's reasonable consent) (the "Exchange Agent") and (ii) deposit, or
shall cause to be deposited, with the Exchange Agent, for the benefit of the
holders of certificates representing Company Common Stock (the "Company
Certificates"), for exchange in accordance with this ARTICLE 4, cash in an
amount sufficient to pay the cash consideration and the aggregate number of
shares of Parent Common Stock due to the stockholders pursuant to Section 3.1(b)
and any cash that may be payable in lieu of any fractional shares (such cash and
certificates for shares of Parent Common Stock, together with any dividends or
distributions with respect thereto, being hereinafter referred to as the
"Exchange Fund"). The cash so deposited shall be invested by the Exchange Agent
as directed by Parent or, after the Effective Time, the Surviving Corporation;
provided that such investments shall be in obligations of the United States of
America. Any net profit resulting from, or interest or income produced by, such
investments will be payable to Parent.
4.2 Exchange of Shares.
(a) As soon as practicable after the Effective Time, the Exchange Agent
shall mail to each holder of record of a Company Certificate a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the certificates shall pass, only upon delivery of the
certificates to the Exchange Agent) and instructions for use in effecting the
surrender of the Company Certificates in exchange for cash, certificates
representing the shares of Parent Common Stock and cash in lieu of fractional
shares of Parent Common Stock, if any, into which the shares of Company Common
Stock represented by such certificate or certificates shall have been converted
pursuant to this Agreement. Upon proper surrender of a Company Certificate for
exchange and cancellation to the Exchange Agent, together with a properly
completed letter of transmittal, duly executed, the holder of such Company
Certificate shall be entitled to receive in exchange therefor, (i) a certificate
representing that number of shares of Parent Common Stock to which such former
holder of Company Common Stock shall have become entitled pursuant to Section
3.1(b), (ii) a check representing that amount of cash to which such former
holder of Company Common Stock shall have become entitled pursuant to Section
3.1(b), and (iii) a check representing the amount of cash (if any) payable in
lieu of fractional shares of Parent Common Stock, which such former holder has
the right to receive in respect of the Company Certificate surrendered pursuant
to the provisions of this ARTICLE 4, and the Company Certificate so surrendered
shall forthwith be cancelled. No interest will be paid or accrued on the cash
payable in respect of Company Common Stock pursuant to Section 3.1(b) or this
ARTICLE 4.
(b) No dividends or other distributions with a record date after the
Effective Time with respect to Parent Common Stock shall be paid to the holder
of any unsurrendered Company Certificate until the holder thereof shall
surrender such certificate in accordance with this ARTICLE 4. After the
surrender of a Company Certificate in accordance with this ARTICLE 4, the record
holder thereof shall be entitled to receive any such dividends or other
distributions, without any interest thereon, which theretofore had become
payable with respect to shares of Parent Common Stock represented by such
certificate.
(c) If any certificate representing shares of Parent Common Stock is to be
issued in the name of other than the registered holder of the Company
Certificate surrendered in exchange therefor, it shall be a condition of the
issuance thereof that the Company Certificate so surrendered shall be properly
endorsed (or
5
accompanied by an appropriate instrument of transfer) and otherwise in proper
form for transfer, and that the person requesting such exchange shall pay to the
Exchange Agent in advance any transfer or other taxes required by reason of the
issuance of a certificate representing shares of Parent Common Stock in the name
of and payment of cash to any person other than the registered holder of the
Company Certificate surrendered, or required for any other reason relating to
such holder or requesting person, or shall establish to the reasonable
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(d) At or after the Effective Time, there shall be no transfers on the
stock transfer books of the Company of the shares of Company Common Stock which
were issued and outstanding immediately prior to the Effective Time. If, after
the Effective Time, certificates representing such shares are presented for
transfer to the Exchange Agent, they shall be cancelled and exchanged for
certificates representing shares of Parent Common Stock and payment of cash as
provided in this ARTICLE 4.
(e) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of the Company for six months after the Effective Time shall be
paid, at the request of Parent, to Parent. Any stockholders of Parent who have
not theretofore complied with this ARTICLE 4 shall thereafter look only to
Parent for payment of the shares of Parent Common Stock, cash, cash in lieu of
any fractional shares and unpaid dividends and distributions on the Parent
Common Stock deliverable in respect of each share of Company Common Stock held
by such stockholder at the Effective Time as determined pursuant to this
Agreement, in each case, without any interest thereon. Notwithstanding anything
to the contrary contained herein, none of Parent, the Company, the Exchange
Agent or any other person shall be liable to any former holder of shares of
Company Common Stock for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws.
(f) In the event any Company Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Company Certificate to be lost, stolen or destroyed and, if required by
Parent, the posting by such person of a bond in such amount as Parent may
determine is reasonably necessary as indemnity against any claim that may be
made against it with respect to such Company Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Company Certificate
the shares of Parent Common Stock, cash, cash in lieu of fractional shares and
unpaid dividends and distributions deliverable in respect thereof pursuant to
this Agreement.
(g) Parent, Purchaser, the Company, the Surviving Corporation and the
Exchange Agent will each be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement or the transactions
contemplated hereby to any holder of Company Common Stock, Company Stock
Options, Warrant, Company Restricted Stock Awards or Stock Units such amounts as
such payors are required to deduct and withhold with respect to the making of
such payment under the Code, or any applicable provision of Tax law. To the
extent that such amounts are properly withheld by such payors, such withheld
amounts will be treated for all purposes of this Agreement as having been paid
to the relevant holder in respect of whom such deduction and withholding were
made.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to Parent and Purchaser to enter into this Agreement, the
Company hereby represents and warrants to Parent and Purchaser that:
5.1 Organization and Qualification; Subsidiaries.
(a) Each of the Company and its Subsidiaries is a corporation or limited
liability company duly formed, validly existing and in good standing under the
laws of the jurisdiction of its formation 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. Each of
the Company and its Subsidiaries is duly qualified or licensed as a foreign
corporation or limited liability company 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
6
business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would not be
reasonably likely to have a Material Adverse Effect.
(b) A true and complete list of all the Company's Subsidiaries, together
with the jurisdiction of formation of each such Subsidiary and the percentage of
the outstanding equity interests of each such Subsidiary owned by the Company
and each other such Subsidiary is set forth in Section 5.1(b) of the Company
Disclosure Schedule (the "Company Disclosure Schedule"), which has been prepared
by the Company and delivered by the Company to Parent and Purchaser prior to the
execution and delivery of this Agreement. Except as disclosed in Section 5.1(b)
of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries owns, directly or indirectly, any equity or similar interest in, or
any interest convertible into or exchangeable or exercisable for any equity or
similar interest in, any corporation, limited liability company, partnership,
joint venture or other business association or entity.
5.2 Certificate of Incorporation and Bylaws.
The Company has heretofore furnished to Parent a complete and correct copy
of the Certificate of Incorporation and the Bylaws or equivalent organizational
documents, each as amended to date, of the Company and each of its Subsidiaries.
Such Certificates of Incorporation, Bylaws or equivalent organizational
documents are in full force and effect.
5.3 Capitalization.
(a) The authorized capital stock of the Company consists of (i) 200,000,000
shares of common stock, par value $0.125 per share ("Company Common Stock") and
(ii) 1,000,000 shares of preferred stock, par value $1.00 per share ("Company
Preferred Stock"). As of August 25, 2005, (i) 36,205,601 shares of Company
Common Stock are issued and outstanding, all of which are validly issued, fully
paid and nonassessable, (ii) 799 shares of Company Common Stock held in the
treasury of the Company, (iii) 4,170,305 shares of Company Common Stock are
reserved for future issuance pursuant to outstanding Company Stock Options,
Stock Units and other rights (together with the Company Restricted Stock Awards,
the "Company Stock Awards") granted pursuant to the Company Stock Option Plans
and (iv) 381,098 shares of Company Common Stock are reserved for future issuance
pursuant to the Warrants. As of the date of this Agreement, no shares of Company
Preferred Stock are issued and outstanding. Section 5.3(a) of the Company
Disclosure Schedule sets forth a correct and complete list, as of the date
hereof, of the holders of all outstanding Company Stock Awards, the type and
number of each such Company Stock Award, the date of grant of each such Company
Stock Award and, if applicable, the exercise price thereof. All outstanding
Company Stock Awards are evidenced by stock option agreements, restricted stock
purchase agreements or other award agreements, the forms of which have been
delivered to Parent. There are no bonds, debentures, notes or other indebtedness
of the Company or any of its Subsidiaries having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matter on which stockholders of the Company or any of its Subsidiaries may
vote. Except as set forth in this Section 5.3(a) or in Section 5.3(a) of the
Company Disclosure Schedule, and except for the Company Rights issued pursuant
to the Company Rights Agreement, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character that obligate the
Company or any of its Subsidiaries to issue or sell any shares of capital stock
of, or other equity interests in, the Company or any of its Subsidiaries. There
are no outstanding contractual obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of Company
Common Stock or any capital stock of, or other equity interests in, any of its
Subsidiaries or to provide funds to, or make any investment (in the form of a
loan, capital contribution or otherwise) in, any of its Subsidiaries or any
other person. All outstanding shares of Company Common Stock, all outstanding
Company Stock Awards, and all outstanding shares of capital stock of, or other
equity interests in, each of the Company's Subsidiaries have been issued and
granted in compliance with (i) all applicable Securities Laws and other
applicable Laws and (ii) all requirements set forth in applicable contracts. No
consent of any holder of any Company Stock Awards is required in connection with
the actions contemplated by Section 3.5.
7
(b) Each outstanding share of capital stock of, or other equity interests
in, each of the Company's Subsidiaries is duly authorized, validly issued, fully
paid and nonassessable, and, except as set forth in Section 5.3(b) to the
Company Disclosure Schedule, each such share or other equity interest that is
owned directly or indirectly by the Company is owned by the Company or another
of its Subsidiaries free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, charges and other encumbrances of any
nature whatsoever.
5.4 Authority Relative to the Transactions.
The Company has all requisite corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the Transactions (as defined below). The execution and delivery by the Company
of this Agreement 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 or the Information Restructuring
(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 of Company
Common Stock (the "Company Stockholder Approval") and the filing and recordation
of appropriate merger documents as required by the DGCL). This Agreement has
been duly and validly executed and delivered by the Company and, assuming the
due authorization, execution and delivery by the other parties thereto,
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought). The Board of Directors of the Company, at a meeting duly called and
held, has (i) determined that this Agreement, the Merger and the transactions
contemplated hereby (collectively, the "Transactions"), are fair to, and in the
best interests of, the holders of Company Common Stock, (ii) approved, adopted
and declared advisable this Agreement and the Transactions (such approval and
adoption having been made in accordance with the DGCL, including, without
limitation, Section 203 thereof) and (iii) resolved, subject to Section 8.2(c),
to recommend that the holders of Company Common Stock approve and adopt this
Agreement and the Transactions. To the knowledge of the Company, no state
takeover statute (other than Section 203(a) of the DGCL) is applicable to the
Merger or the other Transactions.
5.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery by the Company of this Agreement do not, and
neither the performance by the Company of this Agreement nor the consummation of
the Transactions or the Information Restructuring will, (i) conflict with or
violate the Certificate of Incorporation or Bylaws or any equivalent
organizational documents of the Company or any of its Subsidiaries, (ii)
assuming that all consents, approvals, authorizations and other actions
described in Section 5.5(b) have been obtained or taken and all filings and
obligations described in Section 5.5(b) have been made or fulfilled, conflict
with or violate any United States or non-United States statute, law (including
common law), ordinance, regulation, rule, code, executive order, injunction,
judgment, decree or other order ("Law") applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected, or (iii) except as set forth in Section
5.5(a) of the Company Disclosure Schedule, 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 of its Subsidiaries
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation, except, with
respect to clause (iii), for any such conflicts, violations, breaches, defaults
or other occurrences which would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect.
8
(b) Except as set forth in Section 5.5(b) of the Company Disclosure
Schedule, the execution and delivery by the Company of this Agreement do not,
and neither the performance by the Company of this Agreement nor the
consummation of the Transactions or the Information Restructuring, will require
any consent, approval, authorization or permit of, or filing with or
notification to, any United States federal, state, county or local or non-United
States government, governmental, regulatory or administrative authority, agency,
instrumentality or commission or any court, tribunal, or judicial or arbitral
body (a "Governmental Authority"), except for (i) the pre-merger notification
requirements of the HSR Act, (ii) any applicable requirements of the Exchange
Act, the rules of the NYSE and state takeover Laws, (iii) the filing and
recordation of appropriate merger documents as required by the DGCL and (iv)
where the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect.
5.6 Permits; Compliance.
(a) Each of the Company and its Subsidiaries is in possession of all
franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders of any Governmental
Authority, in each case that are material to the Company and its Subsidiaries,
taken as a whole, necessary for each of the Company or its Subsidiaries to own,
lease and operate its properties or to carry on its business as it is now being
conducted (the "Company Permits"). No suspension or cancellation of any of the
Company Permits is pending or, to the knowledge of the Company, threatened.
(b) Each of the Company and its Subsidiaries is in compliance with (i) all
Laws applicable to the Company or such Subsidiary or by which any property or
asset of the Company or such Subsidiary is bound or affected, and (ii) all
notes, bonds, mortgages, indentures, contracts, agreements, leases, licenses,
Company Permits, franchises or other instruments or obligations to which the
Company or such Subsidiary is a party or by which the Company or such Subsidiary
or any property or asset of the Company or such Subsidiary is bound, in each
case, other than noncompliance which would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect. Except as set
forth in Section 5.6(b) of the Company Disclosure Schedule, there are no
proceedings, inquiries or investigations pending before any Governmental
Authority or, to the Company's knowledge, threatened by any Governmental
Authority with respect to the Company or any of its Subsidiaries, other than any
such proceedings, inquiries or investigations which would not, individually or
in the aggregate, be reasonably likely to have a Material Adverse Effect.
(c) Except as set forth in Section 5.6(c) of the Company Disclosure
Schedule, to the knowledge of the Company, neither the Company, its
Subsidiaries, nor any of their respective officers, directors, employees or
agents have been, since May 31, 2002, or is currently being investigated,
charged or implicated in any violation of Laws relating to Medicare, Medicaid,
Tricare, or any other state or federally sponsored or funded health care
program. Neither the Company, its Subsidiaries, nor any of their respective
officers, directors, employees, independent contractors or agents have engaged
in any activities which may serve as grounds for any material penalties of any
kind under Title 11, Title 18 or Title 19 of the Social Security Act, the False
Claims Act (31 U.S.C. sec.3729 et seq.), the False Statements Act (18 U.S.C.
sec.1001), the Program Fraud Civil Penalties Act (31 U.S.C. sec.3801 et seq.),
the Food, Drug and Cosmetic Act (21 U.S.C. sec.301 et seq.) (all as amended or
superseded), or the anti-fraud and abuse provisions of the Health Insurance
Portability and Accountability Act of 1996 (18 ▇.▇.▇. ▇▇▇.▇▇▇▇, ▇▇ ▇.▇.▇.
▇▇▇.▇▇▇, ▇▇ ▇.▇.▇. sec.1035, 18 U.S.C. sec.1518) or any fraud and abuse, false
claims and anti-self referral statutes and regulations in each state or other
jurisdiction where the Company or its Subsidiaries have operations or any
related regulations or other Laws.
5.7 SEC Filings; Financial Statements; Undisclosed Liabilities.
(a) The Company has filed or furnished, as the case may be, all SEC
Documents required to be filed or furnished, as the case may be, by it with the
SEC since May 31, 2002 (collectively, the "Company SEC Reports"). The Company
SEC Reports (i) were prepared in accordance with either the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as the case may be, and
the rules and regulations promulgated thereunder and (ii) did not, at the time
they were filed, or, if amended or supplemented, as of the date of such
9
amendment or supplement, 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 of the Company is required to file
any form, report or other document with the SEC. Section 5.7(a) of the Company
Disclosure Schedule lists, and the Company has delivered to Parent copies of,
all comment letters received by the Company from the Staff of the SEC since May
31, 2002 and all responses to such comment letters by or on behalf of the
Company.
(b) Each of the consolidated financial statements (including, in each case,
any notes thereto), as restated to date, contained in the Company SEC Reports,
as amended to date, complied at the time it was filed as to form in all material
respects with the applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto in effect at the time of filing and
was prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto or, in the case of
unaudited interim statements, the omission of footnotes and otherwise as
permitted by Form 10-Q of the SEC) and each fairly presents, in all material
respects, the consolidated financial position, results of operations and cash
flows of the Company and its consolidated Subsidiaries as at the respective
dates thereof and for the respective periods indicated therein, except as
otherwise noted therein.
(c) Neither the Company nor any of its Subsidiaries has any liability or
obligation of any nature (whether accrued, absolute, contingent or otherwise)
which would be required to be reflected, reserved for or disclosed in a
consolidated balance sheet of the Company and its consolidated Subsidiaries,
including the notes thereto, prepared as of the date of this Agreement in
accordance with GAAP except (i) as reflected, reserved for or disclosed in the
consolidated balance sheet of the Company and the consolidated Subsidiaries as
at May 27, 2005, including the notes thereto (the "2005 Balance Sheet"), (ii) as
incurred in the ordinary course of business consistent with past practice since
May 27, 2005, (iii) as incurred pursuant to the Transactions, (iv) as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, or (v) as set forth in Section 5.7(c) of the Company Disclosure
Schedule.
(d) Except as set forth in Section 5.7(d) of the Company Disclosure
Schedule, the Company maintains disclosure controls and procedures required by
Rule 13a-15 or Rule 15d-15 under the Exchange Act; such controls and procedures
are effective to ensure that all material information concerning the Company and
its Subsidiaries is made known on a timely basis to the individuals responsible
for the preparation of the Company's SEC filings and other public disclosure
documents.
(e) Except as set forth in Section 5.7(e) of the Company Disclosure
Schedule, the Company and its Subsidiaries maintain accurate books and records
reflecting its assets and liabilities and maintain a system of internal
accounting controls which provide assurance that (i) transactions are executed
in accordance with management's authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management's authorization, (iv) the recorded
accountability for assets is compared with the existing assets at regular
intervals and appropriate action is taken with respect to any differences, and
(v) accounts, notes and other receivables and inventory are recorded accurately,
and proper and adequate procedures are implemented to effect the collection
thereof on a current and timely basis. The Company has delivered to Parent
complete and correct copies of, all written descriptions of, and all policies,
manuals and other documents promulgating, such internal accounting controls.
(f) Section 5.7(f) of the Company Disclosure Schedule lists, and the
Company has delivered to Parent copies of, the documentation creating or
governing, all securitization transactions and "off-balance sheet arrangements"
(as defined in Item 303(a)(4) of Regulation S-K of the SEC) effected by the
Company or its Subsidiaries since May 31, 2002.
(g) Ernst & Young LLP, which has expressed its opinion with respect to the
financial statements of the Company and its Subsidiaries included in the Company
SEC Reports (including related notes), is and has been throughout the periods
covered by such financial statements (i) a registered public accounting firm (as
defined in Section 2(a)(12) of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act), (ii) "independent" with
respect to the Company
10
within the meaning of Regulation S-X, and (iii) with respect to the Company, in
compliance with subsections (g) through (l) of Section 10A of the Exchange Act
and the related Rules of the SEC and the Public Company Accounting Oversight
Board. Section 5.7(g) of the Company Disclosure Schedule lists all non-audit
services performed by Ernst & Young LLP for the Company and its Subsidiaries
since May 27, 2005.
(h) The Chief Executive Officer and the Chief Financial Officer of the
Company have signed, and the Company has furnished to the SEC, all
certifications required by Sections 302 and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and
the rules and regulations of the SEC promulgated thereunder with respect to the
Company's filings pursuant to the Exchange Act. Such certifications contain no
qualifications or exceptions to the matters certified therein and have not been
modified or withdrawn. Neither the Company nor any of its officers has received
notice from any Governmental Authority questioning or challenging the accuracy,
completeness, form or manner of filing or submission of such certifications. The
Company has provided to Parent complete and correct copies of all certifications
filed with the SEC pursuant to Sections 302 and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
and hereby reaffirms, represents and warrants to the Company the matters and
statements made in such certificates.
(i) Except as permitted by the Exchange Act, neither the Company nor any of
its Subsidiaries (i) has, since July 31, 2002, extended or maintained credit,
arranged for the extension of credit, or renewed, or (ii) permits to remain
outstanding, an extension of credit, in the form of a personal loan to or for
any director or executive officer (or equivalent thereof) of the Company.
(j) The Company is, or will timely be in all material respects, in
compliance with all listing and corporate governance requirements of the NYSE,
and is in compliance in all material respects with all rules, regulations, and
requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the SEC.
(k) Each of the Company, its directors and its senior financial officers
has consulted with the Company's independent auditors and with the Company's
outside counsel with respect to, and (to the extent applicable to the Company)
is familiar in all material respects with all of the requirements of, the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company is in compliance with the provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act applicable to it as of the date hereof and has implemented
such programs and has taken reasonable steps, upon the advice of the Company's
independent auditors and outside counsel, respectively, to ensure the Company's
future compliance (not later than the relevant statutory and regulatory
deadlines therefore) with all provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act which shall
become applicable to the Company after the date hereof.
5.8 Absence of Certain Changes or Events.
Since May 27, 2005, except as set forth in Section 5.8 of the Company
Disclosure Schedule, or as expressly contemplated by this Agreement, (a) there
has not been any Material Adverse Effect with respect to the Company and its
Subsidiaries, taken as a whole, and (b) none of the Company or any of its
Subsidiaries has taken any action that, if taken after the date of this
Agreement, would constitute a material breach of any of the covenants set forth
in Section 7.1.
5.9 Litigation.
Except as set forth in the Company SEC Reports or in Section 5.9 of the
Company Disclosure Schedule, there is no litigation, suit, claim, action,
proceeding or investigation (which investigation has been communicated to the
Company or of which the Company has knowledge) (an "Action") pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries, or any property or asset of the Company or any such Subsidiary,
before any Governmental Authority, except for Actions that, if determined
adversely to the Company or any such Subsidiary would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect. Except as
set forth in Section 5.9 of the Company Disclosure Schedule, neither the Company
nor any of its Subsidiaries nor any property or asset of the Company or any such
Subsidiary is subject to any continuing order of, consent decree, settlement
agreement or other similar written agreement with, or, to the knowledge of the
Company, continuing investigation by, any Governmental Authority, or any order,
writ, judgment, injunction, decree, determination or award of any Governmental
Authority. There are no Actions pending or, to the knowledge of the Company,
threatened
11
against the Company or any of its Subsidiaries, that would reasonably be
expected to prevent or materially delay the consummation of the Transactions or
the Information Restructuring.
5.10 Employee Benefit Plans.
(a) Section 5.10(a) of the Company Disclosure Schedule lists all employee
benefit plans (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) (whether or not such plans are
subject to ERISA) and all bonus, stock option, stock purchase, restricted stock,
incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans, programs or
arrangements, including each plan, program, arrangement or scheme maintained or
required to be maintained under the Laws of a jurisdiction outside the United
States of America and all employment, retention, termination, severance or other
contracts or agreements, whether legally enforceable or not, to which the
Company or any of its Subsidiaries is a party, with respect to which the Company
or any such Subsidiary has any obligation or which are maintained, contributed
to or sponsored by the Company or any such Subsidiary for the benefit of any
current or former employee, officer or director (or other beneficiary or their
dependents or spouses) of the Company or any such Subsidiary (collectively, the
"Plans"). For each Plan, the Company has furnished or made available to Parent a
true and complete copy of each Plan document (including all amendments thereto)
and where such Plan is unwritten, a written description of the material terms
thereof, and has delivered or made available to Parent a true and complete copy
of the following: (i) each trust or other funding arrangement prepared in
connection with a Plan, (ii) each summary plan description and summary of
material modifications (or a description of any material oral communications)
provided by the Company or any of its Subsidiaries to any current or former
employees, officers, directors, or other beneficiaries or their dependents or
spouses of the Company or any of its Subsidiaries concerning the extent of the
benefits provided under each Plan, (iii) the most recently filed Internal
Revenue Service ("IRS") Forms 5500 for each Plan required to file such report,
(iv) the most recently received IRS determination letter for each Plan that has
received such IRS determination letter and (v) the three most recently prepared
actuarial reports or financial statements in connection with each Plan for which
an actuarial report or financial statement has been prepared (whether or not
required) and (vi) nondiscrimination and coverage testing data and results for
the three most recent years in connection with each Plan that is intended to be
qualified under Section 401(a) of the Code. Except as disclosed in Section
5.10(a) of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries has any express or implied commitment, whether legally enforceable
or not, (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 compensation or benefits to any individual, or
(iii) to modify, change or terminate any Plan, other than with respect to a
modification, change or termination required by this Agreement, the Transactions
or ERISA or the Code or to otherwise comply with applicable Law.
(b) Except as disclosed in Section 5.10(b) of the Company Disclosure
Schedule, neither the Company, any of its Subsidiaries (including any entity
that during the past six years was a Subsidiary of the Company) nor any Person
(whether incorporated or unincorporated) that together with the Company or any
of its Subsidiaries (including any entity that during the past six years was a
Subsidiary of the Company) would be deemed a "single employer" within the
meaning of Section 414 of the Code ("ERISA Affiliate") has now or at any time
contributed to, sponsored, or maintained (i) a pension plan (within the meaning
of Section 3(2) of ERISA) subject to Section 412 of the Code or Title IV of
ERISA, (ii) a multiemployer plan (within the meaning of Section 3(37) or
4001(a)(3) of ERISA) (a "Multiemployer Plan"), or (iii) a single employer
pension plan (within the meaning of Section 4001(a)(15) of ERISA) for which the
Company or any of its Subsidiaries could incur liability under Section 4063 or
4064 of ERISA (a "Multiple Employer Plan"). Except as disclosed in Section
5.10(b) of the Company Disclosure Schedule, no Plan exists that (A) provides for
the payment of separation, severance, termination or similar-type benefits to
any Person, (B) obligates the Company or any of its Subsidiaries to pay
separation, severance, termination or similar-type benefits solely or partially
as a result of the consummation of any Transaction or the Information
Restructuring, or (C) could result in the payment to any present or former
employee, director or consultant of the Company or any of its Subsidiaries of
any money or other property or accelerate or provide any other rights or
benefits to any current or former employee, director or consultant of the
Company or any of its Subsidiaries as a result of the
12
consummation of the Transactions or the Information Restructuring (whether alone
or in connection with any subsequent event). Except as disclosed in Section
5.10(b) of the Company Disclosure Schedule, there is no contract, plan or
arrangement (written or otherwise) covering any current or former employee,
director or consultant of the Company or any of its Subsidiaries that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible pursuant to the terms of Section 280G of the Code.
Except as disclosed in Section 5.10(b) of the Company Disclosure Schedule and to
the extent required under ERISA Section 601 et. seq. and Code Section 4980B,
none of the Plans provides for or promises retiree medical, retiree disability
or retiree life insurance benefits to any current or former employee, officer,
director or consultant of the Company or any of its Subsidiaries. Except as
disclosed in Section 5.10(b) of the Company Disclosure Schedule, each of the
Plans is subject only to the Laws of the United States or a political
subdivision thereof. Except as disclosed in Section 5.10(b) of the Company
Disclosure Schedule, none of the Plans nor any plan, program, arrangement,
contract or agreement previously contributed to, sponsored or maintained by the
Company or its Subsidiaries during the past six years (including any entity that
during the past six years was a Subsidiary of the Company) that would be a
"plan" as described in Section 5.10(a) if currently in effect ("Prior Company
Plan" is or was a "multiple employer welfare arrangement" (as defined in Section
3(40) of ERISA).
(c) Except as disclosed in Section 5.10(c) of the Company Disclosure
Schedule, each Plan is now and always has been, and each Prior Company Plan
always was, operated in all material respects in accordance with its terms and
the requirements of all applicable Laws including, without limitation, ERISA and
the Code. Except as disclosed in Section 5.10(c) of the Company Disclosure
Schedule, the Company and its Subsidiaries have performed all obligations
required to be performed by them under, are not in any respect in default under
or in violation of, and have no knowledge of any default or violation by any
party to, any Plan or Prior Company Plan. No Action is pending or, to the
knowledge of the Company, threatened with respect to any Plan or Prior Company
Plan (other than routine claims for benefits in the ordinary course) and except
as disclosed in Section 5.10(c) of the Company Disclosure Schedule, no fact or
event exists that could reasonably be expected to give rise to any such Action.
Except as disclosed in Section 5.10(c) of the Company Disclosure Schedule, to
the knowledge of the Company, no "qualification failure" (within the meaning of
Rev. Proc. 2003-44) exists with respect to any Plan that is intended to be
qualified under Section 401(a) of the Code.
(d) Except as disclosed in Section 5.10(d) of the Company Disclosure
Schedule, each Plan that is intended to be qualified under Section 401(a) of the
Code has timely received a favorable determination letter from the IRS covering
all of the provisions applicable to the Plan for which determination letters are
currently available that the Plan 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, and no fact or event
exists that could reasonably be expected to result in the revocation of such
exemption.
(e) To the knowledge of the Company, there has not been any non-exempt
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) with respect to any Plan or Prior Company Plan.
(f) Except as set forth in Section 5.10(f) of the Company Disclosure
Schedule, all contributions, premiums or payments required to be made with
respect to any Plan have been made on or before their due dates. All such
contributions have been fully deducted for income tax purposes and no such
deduction has been challenged or disallowed by any Governmental Authority and,
to the knowledge of the Company, no fact or event exists which could reasonably
be expected to give rise to any such challenge or disallowance. The assets of
each Plan that has assets are reported at their fair market value on the
financial statements of each such Plan.
(g) The Company and its Subsidiaries are in compliance with the
requirements of the Workers Adjustment and Retraining Notification Act and any
similar state or local Law ("WARN") and have no liabilities pursuant to WARN
determined without regard to any terminations of employment that occur on or
after the Effective Time.
13
(h) In addition to the foregoing, with respect to each Plan listed in
Section 5.10(a) of the Company Disclosure Schedule that is not subject to United
States Law (a "Non-U.S. Benefit Plan"), which Plans are so identified on Section
5.10(h) of the Company Disclosure Schedule:
(i) all employer and employee contributions to each Non-U.S. Benefit
Plan required by Law or by the terms of such Non-U.S. Benefit Plan have
been made, or, if applicable, accrued in accordance with normal accounting
practices;
(ii) to the knowledge of the Company, each Non-U.S. Benefit Plan which
provides employee health and welfare benefits is administered by group
insurance providers pursuant to the terms of group policies which are in
good standing with the applicable insurance companies;
(iii) each Non-U.S. Benefit Plan maintained by the Company or any of its
Subsidiaries required to be registered or approved has been registered or
approved and has been maintained in good standing with applicable
Governmental Authorities. To the knowledge of the Company, each Non-U.S.
Benefit Plan is now and always has been operated in material compliance
with all applicable non-United States Laws; and
(iv) each Non-U.S. Benefit Plan which is a retirement savings plan and
which is contributed to, sponsored or maintained by the Company or any of
its Subsidiaries for the benefit of the employees in Canada provides only
defined contribution benefits which are dependent on investment performance
and does not require specified minimum guaranteed benefits to be paid.
5.11 Labor and Employment Matters.
(a) Neither the Company nor any of its Subsidiaries is a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by the Company or any such Subsidiary, nor, to the knowledge of
the Company, are there any activities or proceedings of any labor union to
organize any such employees. To the knowledge of the Company, there are no
unfair labor practice complaints pending against the Company or any of its
Subsidiaries before the National Labor Relations Board or any other Governmental
Authority or any current union representation questions involving employees of
the Company or any such Subsidiary. There is no strike, controversy, slowdown,
work stoppage or lockout occurring, or, to the knowledge of the Company, any
threat thereof in writing, by or with respect to any employees of the Company or
any of its Subsidiaries.
(b) Except as disclosed in Section 5.11(b) of the Company Disclosure
Schedule, the Company and its Subsidiaries have paid in full to all current and
former employees or adequately accrued for in accordance with GAAP consistently
applied all wages, salaries, commissions, bonuses, benefits and other
compensation due to or on behalf of such employees and there is no claim with
respect to payment of wages, salary or overtime pay that has been asserted or is
now pending or, to the knowledge of the Company, threatened before any
Governmental Authority with respect to any persons currently or formerly
employed by the Company or any such Subsidiary. Except as disclosed in Section
5.11(b) of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries is a party to, or otherwise bound by, any consent decree with, or
citation by, any Governmental Authority relating to employees or employment
practices. There is no charge or proceeding with respect to a violation of any
occupational safety or health standards that has been asserted or is now pending
or, to the knowledge of the Company, threatened with respect to the Company or
its Subsidiaries. Except as disclosed in Section 5.11(b) of the Company
Disclosure Schedule, there is no charge of discrimination in employment or
employment practices, for any reason, including, without limitation, age,
gender, race, religion or other legally protected category, which has been
asserted or is now pending or, to the knowledge of the Company, threatened
before the United States Equal Employment Opportunity Commission, or any other
Governmental Authority in any jurisdiction in which the Company or any of its
Subsidiaries has employed or employ any person. Neither the Company nor any of
its Subsidiaries has received a claim from any Governmental Authority to the
effect that the Company or such Subsidiary has improperly classified an
individual as an independent contractor.
14
5.12 Real Property; Title to Assets.
(a) Each parcel of real property owned by the Company or any of its
Subsidiaries (i) is owned free and clear of all mortgages, pledges, liens,
security interests, conditional and installment sale agreements, encumbrances,
charges or other claims of third parties of any kind, including, without
limitation, any easement, right of way or other encumbrance to title, or any
option, right of first refusal, or right of first offer (collectively, "Liens"),
other than (A) Liens for current Taxes and assessments not yet past due and
payable, (B) inchoate mechanics' and materialmen's Liens for construction in
progress, (C) workmen's, repairmen's, warehousemen's and carriers' Liens arising
in the ordinary course of business of the Company or such Subsidiary consistent
with past practice and (D) all matters of record that would not, individually or
in the aggregate, be reasonably likely to have a Material Adverse Effect
(collectively, "Permitted Liens") and (ii) is neither subject to any
governmental decree or order to be sold nor is being condemned, expropriated or
otherwise taken by any Governmental Authority with or without payment of
compensation therefor, nor, to the knowledge of the Company, has any such
condemnation, expropriation or taking been proposed.
(b) All leases, subleases and licenses related to real property which are
material to the Company's business on a consolidated basis are in full force and
effect, are valid and effective in accordance with their respective terms, and
there is not, under any of such leases, any existing material default or event
of default (or event which, with notice or lapse of time, or both, would
constitute a material default) by the Company or any of its Subsidiaries or, to
the Company's knowledge, by the other party to such lease, sublease or license.
(c) There are no contractual or legal restrictions or other arrangements
that preclude or restrict the ability of the Company or any of its Subsidiaries
to use all or any portion of any real property owned or leased by the Company or
any such Subsidiary for the purposes for which it is currently being used by the
Company or such Subsidiary. There are no material adverse physical conditions
known to the Company which materially and adversely affect the Company's and its
Subsidiaries' ability to use any real property, or improvements thereon, owned
or leased by the Company or any such Subsidiary for the purposes for which they
are currently being used.
(d) Each of the Company and its Subsidiaries has good and valid title to,
or, in the case of leased properties and assets, valid leasehold or subleasehold
interests in, all of its properties and assets, tangible and intangible, real,
personal and mixed, used or held for use in its business, free and clear of any
Liens, except for Permitted Liens or other defects of title which are not
reasonably likely to have a Material Adverse Effect.
5.13 Intellectual Property.
(a) The Company and its Subsidiaries own or have sufficient rights to all
Intellectual Property currently used in the operation of its business as
presently conducted. Except where the loss or impairment of such Intellectual
Property would not, in the aggregate, reasonably be expected to result in a
Material Adverse Effect, (i) neither the consummation of the Transactions nor
the Information Restructuring will result in the loss or impairment of any such
Intellectual Property, and (ii) each item of Intellectual Property owned or used
by the Company or its Subsidiaries immediately prior to the Closing will be
owned or available for use by the Company and its Subsidiaries on identical
terms and conditions immediately subsequent to the Closing. The Company and its
Subsidiaries have taken all commercially reasonable actions to maintain and
protect each item of Intellectual Property owned or used by them.
(b) To the knowledge of the Company, neither the Company nor any of its
Subsidiaries has, during the past three (3) years, interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any Intellectual
Property rights of third parties in any material respect. Except as set forth in
Section 5.13(b) of the Company Disclosure Schedule, neither the Company nor any
of its Subsidiaries has, during the past three (3) years, received any written
charge, complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation (including any claim that it must
license or refrain from using any Intellectual Property rights of any third
party). To the knowledge of the Company, neither the Company nor any of its
Subsidiaries will interfere, infringe upon, misappropriate, or otherwise come
into conflict with, any Intellectual Property rights of third parties in any
material respect as a result of the continued operation of their businesses as
presently conducted.
15
(c) Except as set forth in Section 5.13(c) of the Company Disclosure
Schedule, to the knowledge of the Company, no third party (including any present
or former employee, consultant, independent contractor, or shareholder) has,
during the past three (3) years, interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property
rights of the Company or any of its Subsidiaries, except for any such
interference, infringement, misappropriation or conflict which are not
reasonably likely to have a Material Adverse Effect.
(d) Section 5.13(d) of the Company Disclosure Schedule identifies all
material Software products currently marketed, or proposed to be marketed within
the next two (2) years, to customers by the Company or any of its Subsidiaries.
With respect to each item identified in Section 5.13(d) of the Company
Disclosure Schedule:
(i) The Company or one of its Subsidiaries possesses all right, title,
and interest in and to the item, free and clear of any and all Liens other
than Permitted Liens.
(ii) The item is not subject to any outstanding injunction, judgment,
order, decree, ruling, or charge.
(iii) No action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to the knowledge of the Company,
threatened which challenges the legality, validity, enforceability, use, or
ownership of the item.
(iv) Except in connection with customer agreements entered into by the
Company or any of its Subsidiaries, neither the Company nor any of its
Subsidiaries has ever agreed to indemnify any Person for or against any
interference, infringement, misappropriation, or other conflict with
respect to the item.
(v) Neither the Company nor any of its Subsidiaries is under any
obligation to grant any right, license or permission to use, or with
respect to, the item other than pursuant to non-exclusive license
agreements with customers, resellers or distributors in the ordinary course
of business.
(vi) No (A) governmental funding; (B) facilities of a Governmental
Authority, university, college, other educational institution or research
center or (C) funding from any Person (other than funds received in
consideration for the Company's share capital) was used in the development
of the item by the Company or any of its Subsidiaries. No current or former
employee, consultant, or independent contractor of the Company or any of
its Subsidiaries, who was involved in, or who contributed to, the creation
or development of the item, has performed services for any Governmental
Authority, university, college, or other educational institution or
research center during a period of time during which such employee,
consultant, or independent contractor was also performing services for the
Company or any of its Subsidiaries.
(vii) Such item operates without malfunctions or design failures, and is
free from any defects, errors or "bugs" in each case, with the exception of
such de minimus malfunctions, design failures, defects, errors or "bugs"
which do not adversely affect in a material manner the intended use of such
item.
(viii) Such item was either developed (A) by employees of the Company or
one of its Subsidiaries within the scope of their employment or (B) by
independent contractors or consultants who have assigned all of their
rights in and to the item to the Company or one of its Subsidiaries
pursuant to written agreements.
(ix) The source code and system documentation relating to such item (A)
has been subject to commercially reasonable efforts by the Company and its
Subsidiaries to maintain the confidentiality thereof, (B) has been
disclosed only to employees who have a need to know in connection with the
performance of their duties to the Company and its Subsidiaries, and (C)
has not been disclosed to any third party not under an obligation to
maintain the confidential nature of such information.
(e) To the knowledge of the Company, the documentation relating to each
Trade Secret of the Company and its Subsidiaries is current, accurate, and
sufficient in detail and content for the conduct of the
16
businesses of the Company and its Subsidiaries. The Company and its Subsidiaries
have taken commercially reasonable precautions to protect the secrecy,
confidentiality, and value of its Trade Secrets.
(f) Except as set forth in Section 5.13(f) of the Company Disclosure
Schedule or where the failure thereof would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, all current
and former employees of the Company and its Subsidiaries and all other Persons
who have been involved in the development of Intellectual Property by or on
behalf of the Company or its Subsidiaries have executed written agreements with
the Company or its Subsidiaries that assign to the Company or one of its
Subsidiaries all rights to any inventions, improvements, discoveries or
information of the Company and its Subsidiaries. Except as set forth in Section
5.13(f) of the Company Disclosure Schedule, no current or former employee of the
Company or any of its Subsidiaries has entered into any agreement that requires
the employee to transfer, assign or disclose information concerning his work to
anyone other than the Company or one of its Subsidiaries. No employee or former
employee has the right or has claimed a right to ownership of any of the
Intellectual Property in any invention or improvement made by him in the course
of his employment with the Company or any of its Subsidiaries.
(g) Except as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, the data and information used by the
Company and its Subsidiaries in providing products or services to their
customers (collectively, the "Company Data") (i) does not violate the privacy
rights of any Person, (ii) does not infringe upon, misappropriate, conflict with
or violate the Intellectual Property rights of any Person, (iii) was collected
and acquired in accordance with all applicable Laws or agreements to which the
Company or its Subsidiaries is bound, or both, and (iv) when used by the Company
and its Subsidiaries, in the manner in which the Company Data was used prior to
the date hereof, is in full accordance with all, and does not violate any,
applicable Laws or agreements to which the Company or its Subsidiaries is bound.
The Company and its Subsidiaries have taken all commercially reasonable steps to
maintain the confidentiality and proprietary nature of the Company Data.
5.14 Taxes.
(a) Except as set forth in Section 5.14(a) of the Company Disclosure
Schedule, the Company and its Subsidiaries have paid all Taxes due and owing and
have filed all Tax Returns that they were required to file and all such Tax
Returns were correct and complete in all material respects. Neither the Company
nor any of its Subsidiaries currently is the beneficiary of any extension of
time within which to file any Tax Return. There are no liens for Taxes (other
than Taxes not yet due and payable) upon any of the assets of the Company or any
of its Subsidiaries.
(b) Except as set forth in Section 5.14(b) of the Company Disclosure
Schedule, there is no dispute or claim pending or, to the knowledge of the
Company, threatened concerning any Tax liability of the Company or any of its
Subsidiaries.
(c) Except as set forth in Section 5.14(c) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries has waived any statute
of limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency.
(d) Except as set forth in Section 5.14(d) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries (i) has filed a
consent under Section 341(f) of the Code concerning collapsible corporations;
(ii) is a party to any agreement, contract, arrangement or plan that has
resulted or would result, separately or in the aggregate, in any payment that
would not be deductible pursuant to Code Section 162(m) or any "excess parachute
payment" within the meaning of Code Section 280G (or any corresponding provision
of state, local or foreign Tax Law); (iii) has been a United States real
property holding corporation within the meaning of Code Section 897(c)(2) during
the applicable period specified in Code Section 897(c)(1)(A)(ii); (iv) is a
party to or bound by any tax allocation or sharing agreement; (v) has been a
member of an affiliated group filing a consolidated federal income Tax return
(other than a group the common parent of which was the Company) or has any
liability for the Taxes of any Person other than the Company or any of its
Subsidiaries under Reg. sec. 1.1502-6 (or any similar provision of state, local
or foreign Tax law), as a transferee or successor, by contract, or otherwise;
(vi) has distributed stock of another
17
corporation or has had its stock distributed in a transaction that was purported
or intended to be governed in whole or in part by Code Section 355 or Code
Section 361; or (vii) has participated in any reportable transaction within the
meaning of Code Section 6707A(c)(1).
(e) Except as set forth in Section 5.14(e) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries will be required to
include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Effective
Time as a result of any (i) change in method of accounting for a taxable period
ending on or prior to the Effective Time; (ii) closing agreement as described in
Code section 7121 (or any corresponding or similar provision of state, local or
foreign Tax Law) executed on or prior to the Effective Time; (iii) intercompany
transactions or any excess loss account described in Treasury regulations under
Code section 1502 (or any corresponding or similar provision of state, local or
foreign Tax Law); (iv) installment sale or open transaction disposition made on
or prior to the Effective Time; or (v) prepaid amount received on or prior to
the Effective Time.
(f) The accruals and reserves for Taxes reflected in the 2005 Balance Sheet
are adequate to satisfy all Taxes accruable through such date in accordance with
GAAP.
(g) The factual statements and representations made to the Internal Revenue
Service in connection with the Company's request for a private letter ruling
regarding certain federal income tax consequences of the transactions
contemplated by the Distribution Agreement, dated January 31, 2001, by and
between the Company and Global Payments, Inc. were true, correct and complete
when made, and no action which is inconsistent with any of such factual
statements or representations has been taken by the Company, any Subsidiary of
the Company, nor, to the knowledge of the Company, by Global Payments, Inc. or
any of its Affiliates. The Company and its Subsidiaries have complied with, and
to the knowledge of the Company, each of Global Payments, Inc. and its
Affiliates has complied with, each of the covenants set forth in Section 9.1 of
the Tax Sharing and Indemnification Agreement, dated January 31, 2001, by the
Company and Global Payments, Inc.
(h) The factual statements and representations made to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
in connection with the opinion delivered by such law firm on August 19, 2005
regarding certain federal income tax consequences of the acquisition by the
Company of the stock of TechRx Incorporated were true, correct and complete when
made, and no action which is inconsistent with any of such factual statements or
representations has been taken by the Company or any Subsidiary of the Company.
5.15 Environmental Matters.
Except as described in Section 5.15 of the Company Disclosure Schedule, (a)
neither the Company nor any of its Subsidiaries is in material violation of any
Environmental Law; (b) none of the properties currently or formerly owned,
leased or operated by the Company or any of its Subsidiaries (including, without
limitation, soils and surface and ground waters) has been contaminated by the
dumping, discharge, spillage, disposal or other release of Hazardous Substances
that requires investigation, removal, remediation or corrective action by the
Company or any such Subsidiary under applicable Environmental Laws; (c) none of
the Company or any of its Subsidiaries has been notified that it is actually or
potentially liable under or received any requests for information or other
correspondence or written notice that it is considered potentially liable for
any off-site contamination by Hazardous Substances; (d) each of the Company and
its Subsidiaries has all material permits, licenses and other authorizations
required under any Environmental Law ("Environmental Permits"); (f) each of the
Company and its Subsidiaries is in material compliance with its Environmental
Permits; and (g) neither the execution of this Agreement nor the consummation of
the Transactions or the Information Restructuring will require any
investigation, remediation or other action with respect to Hazardous Substances,
or any notice to or consent of Governmental Authorities or third parties,
pursuant to any applicable Environmental Law or Environmental Permit.
5.16 Company Rights Agreement.
The Company has taken all necessary action so that none of the execution or
delivery of this Agreement, the consummation of the Merger or the consummation
of any other Transactions or the Information
18
Restructuring will result in any Person becoming able to exercise any rights
under the Stockholder Protection Rights Agreement, dated as of March 26, 2001,
between the Company and SunTrust Bank, Atlanta, as rights agent, (the "Company
Rights Agreement"), or enabling or requiring the associated Series A Junior
Participating Preferred Stock Purchase Rights (the "Company Rights") to be
separated from the shares of the Company Common Stock to which they are attached
or to be triggered or to be exercisable.
5.17 Material Contracts.
Other than any contract or amendment thereto filed as an exhibit to any
Company SEC Report and except as disclosed in Section 5.17 of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries, nor any of
their respective assets, businesses, or operations, is a party to, or is bound
or affected by, or receives benefits under, (i) any employment, severance,
termination, consulting, or retirement contract providing for aggregate payments
to any Person in any calendar year in excess of $500,000, (ii) any material
contract relating to the borrowing of money by the Company or any of its
Subsidiaries or the guarantee by the Company or such Subsidiary of any such
obligation (other than contracts evidencing trade payables), (iii) any contract
which prohibits or restricts, in any material respect, the Company or any of its
Subsidiaries from engaging in any business activities in any geographic area,
line of business, or customer segment or otherwise in competition with any other
Person, (iv) any contract granting material exclusive rights or "most favored
nation" status to the counterparty thereof, (v) any contract pursuant to which
the Company or any of its Subsidiaries have granted any material Intellectual
Property rights to a third party (other than non-exclusive license agreements
with customers, distributors or resellers in the ordinary course of business),
(vi) any contract pursuant to which the Company or any of its Subsidiaries has
received the right to use any material Intellectual Property (other than
commercially-available, off-the-shelf software programs having a license fee of
$100,000 or less), (vii) any indemnity agreement in favor of any Person, (viii)
any contract relating to any discontinued operation or any assets or business
sold or otherwise disposed of by the Company or its Subsidiaries within the
three (3) year period ended on the date hereof, or (ix) any other contract or
amendment thereto that would be required to be filed as an exhibit to a Form
10-K filed by the Company with the SEC on the date of this Agreement (such
contracts described in clauses (i) through (ix) of this Section 5.17 being
referred to collectively as the "Material Contracts"). With respect to each
Material Contract and except as disclosed in Section 5.17 of the Company
Disclosure Schedule: (A) the contract is in full force and effect; (B) neither
the Company nor any of its Subsidiaries is in default thereunder, other than
defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect; (C) neither the Company nor any of its
Subsidiaries has repudiated or waived any material provision of any such
contract; and (D) no other party to any such contract is, to the knowledge of
the Company, in default in any respect, other than defaults which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect, or has repudiated or waived any material provision thereunder. The
Company has furnished or made available to Parent a true and correct copy of
each Material Contract.
5.18 Insurance.
Section 5.18 of the Company Disclosure Schedule sets forth a complete and
correct list of all material insurance policies owned or held by the Company and
each of its Subsidiaries. With respect to each such insurance policy: (i) the
policy is legal, valid and binding and enforceable in accordance with its terms
and, except for policies that have expired under their terms in the ordinary
course, is in full force and effect, (ii) all premiums due thereon have been
paid in full, (iii) neither the Company nor any of its Subsidiaries is in
material breach or default under the policy, (iv) neither the Company nor any of
its Subsidiaries has taken any action or failed to take any action which would
permit the termination or modification of the policy, (v) except as set forth in
Section 5.18 of the Company Disclosure Schedule, no insurer under the policy has
cancelled or generally disclaimed liability under any such policy or indicated
any intent to do so or not renew the policy, (vi) all material claims under the
policy have been filed in a timely fashion, and (vii) a true and correct copy of
the policy has been delivered to Parent.
19
5.19 Certain Business Practices.
None of the Company, any of its Subsidiaries or any directors or officers,
agents or employees of the Company or any such Subsidiary, has (i) used any
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to political activity; (ii) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns or violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; (iii) made any payment in the nature of
criminal bribery; or (iv) made any payment or received any payment for the
purposes of inducing purchases/sales in violation of the Social Security Act
sect. 1128 (b)(3), the "Federal Anti-kickback Statute," or any similar federal,
state or local Law.
5.20 Healthcare Information Laws.
The Company and its Subsidiaries are in material compliance with all
applicable Healthcare Information Laws. Each of the Company, and its
Subsidiaries (i) has undertaken all necessary surveys, audits, inventories,
reviews, analyses, or assessments (including any necessary risk assessments) on
all areas required for compliance under all Healthcare Information Laws, (ii)
has been in compliance with such Healthcare Information Laws since the
applicable compliance date of any such Law, (iii) has developed a plan for
maintaining compliance with all Healthcare Information Laws (the "Company
Compliance Plan") and (iii) has implemented those provisions of the Company
Compliance Plan to ensure that such entity is and will remain in compliance with
all Healthcare Information Laws. For purposes of this Agreement, the term
"Healthcare Information Laws" means any and all federal and state Laws relating
to patient or individual healthcare information, including the Administrative
Simplification requirements of the Health Insurance Portability and
Accountability Act of 1996, Pub. L. No. 104-191, as amended, and any rules or
regulations promulgated thereunder.
5.21 Opinion of Financial Advisors.
The Company has received the opinions of each of The Blackstone Group L.P.
and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., each dated the date of this Agreement, to the effect
that, as of the date of this Agreement and based upon and subject to the factors
and assumptions set forth therein, the Per Share Merger Consideration is fair,
from a financial point of view, to the Company's stockholders.
5.22 Brokers.
No broker, finder or investment banker (other than The Blackstone Group
L.P. and ▇▇▇▇▇▇▇, Sachs & Co.) 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 or its Subsidiaries. The Company has
heretofore furnished to Parent a complete and correct copy of all agreements
between the Company and each of The Blackstone Group L.P. or ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co. pursuant to which such firms would be entitled to any payment or indemnity
relating to the Transactions.
5.23 HIS Sale.
(a) Except as specifically set forth in the Information Documents,
following consummation of the transactions contemplated by the Information
Documents, the Company will not have, or become obligated for, any liabilities
(whether accrued, contingent, absolute, known, unknown or otherwise) arising out
of or relating to the Information Management Business or the Information
Restructuring.
(b) Except for assets that are to be used to provide the services
contemplated by the Transition Services Agreement (as defined below), following
consummation of the transactions contemplated by the Information Documents, the
Company and its Subsidiaries shall own, free and clear of all Liens other than
Permitted Liens, or have the right to use from third parties, on the same terms
in effect prior to such consummation, all material assets and properties
currently used in, or necessary to, the operation of the Company's network
services and systems business.
20
5.24 Note Indenture.
The Company is not currently in default under or in violation of and, to
the Knowledge of the Company, no event, fact or circumstance exists that would,
with the giving of notice, the passage of time or both, cause a default under
the Indenture between the Company and Regions Bank, as Trustee, dated as of
November 26, 2002 (the "Note Indenture") or any of the 10 1/2% Senior
Subordinated Notes due 2012 (the "Senior Subordinated Notes") issued pursuant to
the Note Indenture, and the consummation of the Information Restructuring will
not constitute a violation of, cause a default under, or cause the occurrence of
an event that with the giving of notice, the passage of time or both would cause
a default under the Note Indenture or any of the Senior Subordinated Notes.
5.25 Statements True and Correct.
(a) No statement, certificate, instrument, or other writing furnished or to
be furnished by the Company to Parent pursuant to this Agreement or any other
document, agreement, or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(b) None of the information supplied or to be supplied by the Company for
inclusion in the Registration Statement to be filed by Parent with the SEC will,
(i) at the time the Registration Statement is filed with the SEC, (ii) at any
time it is amended or supplemented or (iii) at any time when the Registration
Statement becomes effective under the Securities Act, be false or misleading
with respect to any material fact, or omit to state any material fact necessary
to make the statements therein not misleading.
(c) None of the information supplied or to be supplied by the Company for
inclusion in the Joint Proxy Statement/Prospectus to be mailed to the Company's
and Parent's stockholders in connection with the Stockholders' Meetings, the
Notes Tender Offer Documents, and any other documents to be filed by the Company
with the SEC or any other Governmental Authority in connection with the
Transactions, will, at the respective time such documents are filed, and with
respect to the Joint Proxy Statement/Prospectus, when first mailed to the
stockholders of the Company and stockholders of Parent, be false or misleading
with respect to any material fact, or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, or, in the case of the Joint Proxy
Statement/Prospectus or any amendment thereof or supplement thereto, at the time
of the Stockholders' Meetings, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Stockholders' Meetings.
(d) All documents that the Company is responsible for filing with any
Governmental Authority in connection with the Transactions will comply in all
material respects with the provisions of applicable Law.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
As an inducement to the Company to enter into this Agreement, Parent and
Purchaser hereby, jointly and severally, represent and warrant to the Company as
follows:
6.1 Organization and Qualification; Subsidiaries.
(a) Each of Parent and Purchaser is a corporation duly formed, validly
existing and in good standing under the laws of the jurisdiction of its
formation 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. Each of Parent and the Purchaser 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
21
failures to be so qualified or licensed and in good standing that would not be
reasonably likely to have a Material Adverse Effect.
(b) Parent or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock (or other equity interests) of each
Subsidiary set forth in Section 6.1(b) of Parent Disclosure Schedule (the
"Parent Disclosure Schedule"), which has been prepared by Parent and delivered
by Parent to the Company prior to the execution and delivery of this Agreement.
Except as disclosed in Section 6.1(b) of the Parent Disclosure Schedule, Parent
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, limited liability company, partnership,
joint venture or other business association or entity.
6.2 Certificate of Incorporation and Bylaws.
Parent has heretofore furnished to the Company a complete and correct copy
of the Certificate of Incorporation and the Bylaws, each as amended to date, of
Parent and Purchaser. Such Certificates of Incorporation and Bylaws are in full
force and effect.
6.3 Capitalization.
The authorized capital stock of Parent consists of (i) 200,000,000 shares
of Parent Common Stock, (ii) 600,000 shares of non-voting common stock, par
value $.01 per share ("Parent Non-Voting Common Stock"), and (iii) 20,000,000
shares of preferred stock, no par value ("Parent Preferred Stock"). As of July
29, 2005, 32,943,419 shares of Parent Common Stock were issued and outstanding,
all of which are validly issued, fully paid and nonassessable As of the date of
this Agreement, no shares of Parent Non-Voting Common Stock or Parent Preferred
Stock are issued and outstanding.
6.4 Authority Relative to the Transactions.
Each of Parent and Purchaser has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the Transactions. The execution and delivery by each
of Parent and Purchaser of this Agreement and the consummation by each of 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 issuance of Parent Common
Stock pursuant to this Agreement, the approval of such issuance by the holders
of a majority of the then outstanding shares of Parent Common Stock cast, in
person or by proxy, on such proposal ("Parent Stockholder Approval"), and the
filing and recordation of appropriate merger documents as required by the DGCL).
This Agreement has been duly and validly executed and delivered by each of
Parent and Purchaser and, assuming the due authorization, execution and delivery
by the other parties thereto, constitutes the legal, valid and binding
obligation of each of Parent and Purchaser, enforceable against each of Parent
and Purchaser in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought). The Board of Directors of Parent, at a meeting duly called and
held, has (i) determined that the Transactions contemplated hereby, are fair to,
and in the best interests of, the holders of Parent Common Stock, (ii) approved,
adopted and declared advisable this Agreement and the Transactions (such
approval and adoption having been made in accordance with the DGCL, including,
without limitation, Section 203 thereof) and (iii) resolved to recommend that
the holders of Parent Common Stock approve the issuance of Parent Common Stock
pursuant to this Agreement. To the knowledge of each of Parent and Purchaser, no
state takeover statute (other than Section 203(a) of the DGCL) is applicable to
the Merger or the other Transactions.
22
6.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery by each of Parent and Purchaser of this
Agreement do not, and the performance by each of Parent and Purchaser of this
Agreement will not, (i) conflict with or violate the Certificate of
Incorporation or Bylaws of Parent or Purchaser, (ii) assuming that all consents,
approvals, authorizations and other actions described in Section 6.5(b) have
been obtained or taken and all filings and obligations described in Section
6.5(b) have been made or fulfilled, conflict with or violate any Law applicable
to Parent or any of its Subsidiaries or by which any property or asset of Parent
or any such Subsidiary is bound or affected, or (iii) except as set forth in
Section 6.5(a) of the Parent Disclosure Schedule, 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 Parent or Purchaser pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation, except, with respect to
clause (iii), for any such conflicts, violations, breaches, defaults or other
occurrences which would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect.
(b) Except as set forth in Section 6.5(b) of the Parent Disclosure
Schedule, the execution and delivery by each of Parent and Purchaser of this
Agreement do not, and the performance by each of Parent and Purchaser of this
Agreement will not, require any consent, approval, authorization or permit of,
or filing with or notification to, a Governmental Authority, except for (i) the
pre-merger notification requirements of the HSR Act, (ii) any applicable
requirements of the Exchange Act, the rules of the Nasdaq and state takeover
Laws, (iii) the filing and recordation of appropriate merger documents as
required by the DGCL and (iv) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect.
6.6 Permits; Compliance.
(a) Each of Parent and Parent's Subsidiaries is in possession of all
franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders of any Governmental
Authority, in each case that are material to Parent and its Subsidiaries, taken
as a whole, for each of Parent and its Subsidiaries to own, lease and operate
its properties or to carry on its business as it is now being conducted (the
"Parent Permits"). No suspension or cancellation of any of the Parent Permits is
pending or, to the knowledge of Parent, threatened.
(b) Each of Parent and its Subsidiaries is in compliance with (i) all Laws
applicable to each of Parent and its Subsidiaries or by which any property or
asset of Parent or such Subsidiary is bound or affected, and (ii) all notes,
bonds, mortgages, indentures, contracts, agreements, leases, licenses, Parent
Permits, franchises or other instruments or obligations to which Parent or such
Subsidiary is a party or by which Parent or such Subsidiary or any property or
asset of Parent or such Subsidiary is bound, in each case, other than
noncompliance which would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect. Except as set forth in Section 6.6(b)
of the Parent Disclosure Schedule, there are no proceedings, inquiries or
investigations pending before any Governmental Authority or, to Parent's
knowledge, threatened by any Governmental Authority with respect to Parent or
any of its Subsidiaries, other than any such proceedings, inquiries or
investigations which would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect.
(c) Except as set forth on Schedule 6.6(c), to the knowledge of Parent,
neither Parent, its Subsidiaries, nor any of their respective officers,
directors, employees or agents have been, since May 31, 2002, or is currently
being investigated, charged or implicated in any violation of Laws relating to
Medicare, Medicaid, Tricare, or any other state or federally sponsored or funded
health care program. Neither Parent, its Subsidiaries, nor any of their
respective officers, directors, employees, independent contractors or agents
have engaged in any activities which may serve as grounds for any material
penalties of any kind under Title 11, Title 18 or Title 19 of the Social
Security Act, the False Claims Act (31 U.S.C. sec.3729 et seq.), the False
23
Statements Act (18 U.S.C. sec.1001), the Program Fraud Civil Penalties Act (31
U.S.C. sec.3801 et seq.), the Food, Drug and Cosmetic Act (21 U.S.C. sec.301 et
seq.) (all as amended or superseded), or the anti-fraud and abuse provisions of
the Health Insurance Portability and Accountability Act of 1996 (18 ▇.▇.▇.
▇▇▇.▇▇▇▇, ▇▇ ▇.▇.▇. ▇▇▇.▇▇▇, ▇▇ ▇.▇.▇. sec.1035, 18 U.S.C. sec.1518) or any
fraud and abuse, false claims and anti-self referral statutes and regulations in
each state or other jurisdiction where Parent or its Subsidiaries have
operations or any related regulations or other federal or state Laws.
6.7 SEC Filings; Financial Statements; Undisclosed Liabilities.
(a) Parent has filed or furnished, as the case may be, all SEC Documents
required to be filed or furnished by it with the SEC since May 31, 2002
(collectively, the "Parent SEC Reports"). The Parent SEC Reports (i) were
prepared in accordance with either the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations promulgated
thereunder and (ii) did not, at the time they were filed, or, if amended or
supplemented, as of the date of such amendment or supplement, 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 of Parent 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), as restated to date, contained in the Parent SEC Reports, as
amended to date, complied at the time it was filed as to form in all material
respects with the applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto in effect at the time of filing and,
was prepared in accordance with GAAP applied on a consistent basis throughout
the periods indicated (except as may be indicated in the notes thereto or, in
the case of unaudited interim statements, the omission of footnotes and
otherwise as permitted by Form 10-Q of the SEC) and each fairly presents, in all
material respects, the consolidated financial position, results of operations
and cash flows of Parent and its consolidated Subsidiaries as at the respective
dates thereof and for the respective periods indicated therein, except as
otherwise noted therein.
(c) Neither Parent nor any of its Subsidiaries has any liability or
obligation of any nature (whether accrued, absolute, contingent or otherwise)
which would be required to be reflected, reserved for or disclosed in a
consolidated balance sheet of Parent and its consolidated Subsidiaries,
including the notes thereto, prepared as of the date of this Agreement in
accordance with GAAP, except (i) as reflected, reserved for or disclosed in the
consolidated balance sheet of Parent and the consolidated Subsidiaries as at
December 31, 2004, including the notes thereto (the "2004 Parent Balance Sheet")
or in the consolidated balance sheet of Parent and its consolidated Subsidiaries
as at June 30, 2005, including the notes thereto, (ii) as incurred in the
ordinary course of business consistent with past practice since December 31,
2004, (iii) as incurred pursuant to the Transactions, (iv) as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, or (v) as set forth in Section 6.7(c) of the Parent Disclosure
Schedule.
(d) Except as set forth in Section 6.7(d) of the Parent Disclosure
Schedule, Parent maintains disclosure controls and procedures required by Rule
13a-15 or Rule 15d-15 under the Exchange Act; such controls and procedures are
effective to ensure that all material information concerning Parent and its
Subsidiaries is made known on a timely basis to the individuals responsible for
the preparation of Parent's SEC filings and other public disclosure documents.
(e) Except as set forth in Section 6.7(e) of the Parent Disclosure
Schedule, Parent and its Subsidiaries maintain accurate books and records
reflecting its assets and liabilities and maintain a system of internal
accounting controls which provide assurance that (i) transactions are executed
in accordance with management's authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management's authorization, (iv) the recorded
accountability for assets is compared with the existing assets at regular
intervals and appropriate action is taken with respect to any differences, and
(v) accounts, notes and other receivables and inventory are recorded accurately,
and proper and adequate procedures are implemented to effect the collection
thereof on a current and timely basis. Parent has made
24
available to the Company complete and correct copies of, all written
descriptions of, and all policies, manuals and other documents promulgating,
such internal accounting controls.
(f) Section 6.7(f) of the Parent Disclosure Schedule lists, and Parent has
delivered to Company copies of, the documentation creating or governing, all
securitization transactions and "off-balance sheet arrangements" (as defined in
Item 303(a)(4) of Regulation S-K of the SEC) effected by Parent since December
31, 2002.
(g) Ernst & Young LLP, which has expressed its opinion with respect to the
financial statements of Parent and its Subsidiaries included in the Parent SEC
Reports (including related notes), is and has been throughout the periods
covered by such financial statements (i) a registered public accounting firm (as
defined in Section 2(a)(12) of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act), (ii) "independent" with
respect to Parent within the meaning of Regulation S-X, and (iii) with respect
to Parent, in compliance with subsections (g) through (l) of Section 10A of the
Exchange Act and the related Rules of the SEC and the Public Company Accounting
Oversight Board. Section 6.7(g) of the Company Disclosure Schedule lists all
non-audit services performed by Ernst & Young LLP for Parent and its
Subsidiaries since December 31, 2004.
(h) The Chief Executive Officer and the Chief Financial Officer of Parent
have signed, and Parent has furnished to the SEC, all certifications required by
Sections 302 and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and the rules and regulations of
the SEC promulgated thereunder with respect to Parent's filings pursuant to the
Exchange Act. Such certifications contain no qualifications or exceptions to the
matters certified therein and have not been modified or withdrawn. Neither
Parent nor any of its officers has received notice from any Governmental
Authority questioning or challenging the accuracy, completeness, form or manner
of filing or submission of such certifications. Parent has provided to the
Company complete and correct copies of all certifications filed with the SEC
pursuant to Sections 302 and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and hereby reaffirms,
represents and warrants to Parent the matters and statements made in such
certificates.
(i) Except as permitted by the Exchange Act, neither Parent nor any of its
Subsidiaries (i) has, since December 31, 2002, extended or maintained credit,
arranged for the extension of credit, or renewed, or (ii) permits to remain
outstanding, an extension of credit, in the form of a personal loan to or for
any director or executive officer (or equivalent thereof) of Parent.
(j) Parent is, or will timely be in all material respects, in compliance
with all listing and corporate governance requirements of the Nasdaq, and is in
compliance in all material respects with all rules, regulations, and
requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the SEC.
6.8 Absence of Certain Changes or Events.
Since June 30, 2005, except as set forth in Section 6.8 of the Parent
Disclosure Schedule, or as expressly contemplated by this Agreement, (a) there
has not been any Material Adverse Effect with respect to Parent and its
Subsidiaries, taken as a whole, and (b) none of Parent or any of its
Subsidiaries has taken any action that, if taken after the date of this
Agreement, would constitute a material breach of any of the covenants set forth
in Section 7.3.
6.9 Litigation.
Except as set forth in Section 6.9 of the Parent Disclosure Schedule, there
is no Action pending or, to the knowledge of Parent, threatened against Parent
or any of its Subsidiaries, before any Governmental Authority, that would
reasonably be expected (i) to have a Material Adverse Effect on Parent or any of
its Subsidiaries or (ii) to prevent or materially delay the consummation of the
Transactions.
6.10 Employee Benefit Plans.
(a) Section 6.10(a) of the Parent Disclosure Schedule lists all employee
benefit plans (as defined in Section 3(3) of ERISA) (whether or not such plans
are subject to ERISA) and all bonus, stock option, stock purchase, restricted
stock, incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans, programs or
arrangements, including each plan, program,
25
arrangement or scheme maintained or required to be maintained under the Laws of
a jurisdiction outside the United States of America, and all employment,
retention, termination, severance or other contracts or agreements, whether
legally enforceable or not, to which Parent or any of its Subsidiaries is a
party, with respect to which Parent or any of its Subsidiaries has any
obligation or which are maintained, contributed to or sponsored by Parent or any
of its Subsidiaries for the benefit of any current or former employee, officer
or director of Parent or any of its Subsidiaries (collectively, the "Parent
Plans"). For each Parent Plan, Parent has furnished or made available to the
Company a true and complete copy of each Parent Plan document (including all
amendments thereto) and where such Parent Plan is unwritten, a written
description of the material terms thereof, and has delivered or made available
to the Company a true and complete copy of the following: (i) each trust or
other funding arrangement prepared in connection with a Parent Plan, (ii) each
summary plan description and summary of material modifications (or a description
of any material oral communications) provided by Parent or any of its
Subsidiaries to any current or former employees, officers, directors, or other
beneficiaries or their dependents or spouses of Parent or any of its
Subsidiaries concerning the extent of the benefits provided under each Parent
Plan, (iii) the most recently filed IRS Forms 5500 for each Parent Plan required
to file such report, (iv) the most recently received IRS determination letter
for each Parent Plan that has received such IRS determination letter, (v) the
three most recently prepared actuarial reports or financial statements in
connection with each Parent Plan for which an actuarial report or financial
statement has been prepared (whether or not required) and (vi) nondiscrimination
and coverage testing data and results for the three most recent years in
connection with each Parent Plan that is intended to be qualified under Section
401(a) of the Code. Except as disclosed in Section 6.10(a) of the Parent
Disclosure Schedule, neither Parent nor any of its Subsidiaries has any express
or implied commitment, whether legally enforceable or not, (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
compensation or benefits to any individual, or (iii) to modify, change or
terminate any Parent Plan, other than with respect to a modification, change or
termination required by this Agreement, the Transactions or ERISA or the Code or
to otherwise comply with applicable Law.
(b) Except as disclosed in Section 6.10(b) of the Parent Disclosure
Schedule, neither Parent nor any of its Subsidiaries (including any entity that
during the past six years was a Subsidiary of Parent) nor any ERISA Affiliate of
Parent or any of its Subsidiaries has now or at any time contributed to,
sponsored, or maintained (i) a pension plan (within the meaning of Section 3(2)
of ERISA) subject to Section 412 of the Code or Title IV of ERISA, (ii) a
Multiemployer Plan, or (iii) a Multiple Employer Plan. Except as disclosed in
Section 6.10(b) of the Parent Disclosure Schedule, no Parent Plan exists that
(A) provides for the payment of separation, severance, termination or
similar-type benefits to any Person, (B) obligates Parent or any of its
Subsidiaries to pay separation, severance, termination or similar-type benefits
solely or partially as a result of any Transaction, or (C) could result in the
payment to any present or former employee, director or consultant of Parent or
any of its Subsidiaries of any money or other property or accelerate or provide
any other rights or benefits to any current or former employee of Parent or any
of its Subsidiaries as a result of the consummation of the Transactions (whether
alone or in connection with any subsequent event). Except as disclosed in
Section 6.10(b) of the Parent Disclosure Schedule, there is no contract, plan or
arrangement (written or otherwise) covering any current or former employee of
Parent or any of its Subsidiaries that, individually or collectively, could give
rise to the payment of any amount that would not be deductible pursuant to the
terms of Section 280G of the Code. Except to the extent required under ERISA
Section 601 et. seq. and Code Section 4980B, none of the Parent Plans provides
for or promises retiree medical, retiree disability or retiree life insurance
benefits to any current or former employee, director or consultant of Parent or
any of its Subsidiaries. Except as disclosed in Section 6.10(b) of the Parent
Disclosure Schedule, each of the Parent Plans is subject only to the Laws of the
United States or a political subdivision thereof. Except as disclosed in Section
6.10(b) of the Parent Disclosure Schedule, none of the Parent Plans nor any
plan, program, arrangement, contract or agreement previously contributed to,
sponsored or maintained by Parent or its Subsidiaries during the past six years
(including any entity that during the past six years was a Subsidiary of Parent)
that would be a "plan" as described in Section 6.10(a) if currently in effect
("Prior Parent Plan") is or was a "multiple employer welfare arrangement" (as
defined in Section 3(40) of ERISA).
26
(c) Except as disclosed in Section 6.10(c) of the Parent Disclosure
Schedule, each Parent Plan is now and always has been, and each Prior Parent
Plan always was, operated in all material respects in accordance with its terms
and the requirements of all applicable Laws including, without limitation, ERISA
and the Code. Except as disclosed in Section 6.10(c) of the Parent Disclosure
Schedule, Parent and its Subsidiaries have performed all obligations required to
be performed by them under, are not in any respect in default under or in
violation of, and have no knowledge of any default or violation by any party to,
any Parent Plan or Prior Parent Plan. No Action is pending or, to the knowledge
of Parent, threatened with respect to any Parent Plan or Prior Parent Plan
(other than routine claims for benefits in the ordinary course) and except as
disclosed in Section 6.10(c) of the Parent Disclosure Schedule, no fact or event
exists that could reasonably be expected to give rise to any such Action. Except
as disclosed in Section 6.10(c) of the Parent Disclosure Schedule, to the
knowledge of Parent, no "qualification failure" (within the meaning of Rev.
Proc. 2003-44) exists with respect to any Parent Plan that is intended to be
qualified under Section 401(a) of the Code.
(d) Each Parent Plan that is intended to be qualified under Section 401(a)
of the Code has timely received a favorable determination letter from the IRS
covering all of the provisions applicable to the Parent Plan for which
determination letters are currently available that the Parent Plan is so
qualified and each trust established in connection with any Parent Plan which is
intended to be exempt from federal income taxation under Section 501(a) of the
Code is so exempt, and no fact or event exists that could reasonably be expected
to result in the revocation of such exemption.
(e) To the knowledge of Parent, there has not been any non-exempt
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) with respect to any Parent Plan or Prior Plan.
(f) Except as set forth in Section 5.10(f) of the Parent Disclosure
Schedule, all contributions, premiums or payments required to be made with
respect to any Parent Plan have been made on or before their due dates. All such
contributions have been fully deducted for income tax purposes and no such
deduction has been challenged or disallowed by any Governmental Authority and,
to the knowledge of Parent, no fact or event exists which could reasonably be
expected to give rise to any such challenge or disallowance. The assets of each
Parent Plan that has assets are reported at their fair market value on the
financial statements of each such Parent Plan.
(g) In addition to the foregoing, with respect to each Parent Plan listed
in Section 6.10(a) of the Parent Disclosure Schedule that is a Non-U.S. Benefit
Plan, which Parent Plans are so identified on Section 6.10(g) of the Parent
Disclosure Schedule:
(i) all employer and employee contributions to each Non-U.S. Benefit
Plan required by Law or by the terms of such Non-U.S. Benefit Plan have
been made, or, if applicable, accrued in accordance with normal accounting
practices;
(ii) the fair market value of the assets of each funded Non-U.S. Benefit
Plan, the liability of each insurer for any Non-U.S. Benefit Plan funded
through insurance or the book reserve established for any Non-U.S. Benefit
Plan, together with any accrued contributions, is sufficient to procure or
provide for the benefits determined as if such plan is maintained on any
ongoing basis (actual or contingent) accrued to the date of this Agreement
with respect to all current and former participants under such Non-U.S.
Benefit Plan according to the actuarial assumptions and valuations most
recently used to determine employer contributions to such Non-U.S. Benefit
Plan, and none of the Transactions shall cause such assets or insurance
obligations to be less than such benefit obligations;
(iii) each Non-U.S. Benefit Plan maintained by Parent or any of its
Subsidiaries required to be registered or approved has been registered or
approved and has been maintained in good standing with applicable
regulatory authorities. Each Non-U.S. Benefit Plan is now and always has
been operated in material compliance with all applicable non-United States
Laws; and
(iv) each Non-U.S. Benefit Plan which is contributed to, sponsored or
maintained by Parent or any of its Subsidiaries for the benefit of the
employees in the United Kingdom provides only defined
27
contribution benefits which are dependent on investment performance and
does not require specified minimum guaranteed benefits to be paid.
6.11 Taxes.
(a) Parent and its Subsidiaries have paid all Taxes due and owing and have
filed all Tax Returns that they were required to file and all such Tax Returns
were correct and complete in all material respects. Neither Parent nor any of
its Subsidiaries currently is the beneficiary of any extension of time within
which to file any Tax Return. There are no liens for Taxes (other than Taxes not
yet due and payable) upon any of the assets of Parent or any of its
Subsidiaries.
(b) Except as set forth in Section 6.11(b) of the Parent Disclosure
Schedule there is no dispute or claim pending or, to the knowledge of Parent,
threatened concerning any Tax liability of Parent or any of its Subsidiaries.
(c) Except as set forth in Section 6.11(c) of the Parent Disclosure
Schedule, neither Parent nor any of its Subsidiaries has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.
(d) Except as set forth in Section 6.11(d) of the Parent Disclosure
Schedule, neither Parent nor any of its Subsidiaries (i) has filed a consent
under Section 341(f) of the Code concerning collapsible corporations; (ii) is a
party to any agreement, contract, arrangement or plan that has resulted or would
result, separately or in the aggregate, in any payment that would not be
deductible pursuant to Code Section 162(m) or any "excess parachute payment"
within the meaning of Code Section 280G (or any corresponding provision of
state, local or foreign Tax Law); (iii) has been a United States real property
holding corporation within the meaning of Code Section 897(c)(2) during the
applicable period specified in Code Section 897(c)(1)(A)(ii); (iv) is a party to
or bound by any tax allocation or sharing agreement; (v) has been a member of an
affiliated group filing a consolidated federal income Tax return (other than a
group the common parent of which was Parent) or has any liability for the Taxes
of any Person other than Parent or any of its Subsidiaries under Reg.
sec. 1.1502-6 (or any similar provision of state, local or foreign Tax Law), as
a transferee or successor, by contract, or otherwise; (vi) has distributed stock
of another corporation or has had its stock distributed in a transaction that
was purported or intended to be governed in whole or in part by Code Section 355
or Code Section 361; or (vii) has participated in any reportable transaction
within the meaning of Code Section 6707A(c)(1).
(e) Except as set forth in Section 6.11(e) of the Parent Disclosure
Schedule, neither Parent nor any of its Subsidiaries will be required to include
any item of income in, or exclude any item of deduction from, taxable income for
any taxable period (or portion thereof) ending after the Effective Time as a
result of any (i) change in method of accounting for a taxable period ending on
or prior to the Effective Time; (ii) closing agreement as described in Code
Section 7121 (or any corresponding or similar provision of state, local or
foreign Tax Law) executed on or prior to the Effective Time; (iii) intercompany
transactions or any excess loss account described in Treasury regulations under
Code Section 1502 (or any corresponding or similar provision of state, local or
foreign Tax Law); (iv) installment sale or open transaction disposition made on
or prior to the Effective Time; or (v) prepaid amount received on or prior to
the Effective Time.
(f) The accruals and reserves for Taxes reflected in the 2004 Parent
Balance Sheet are adequate to satisfy all Taxes accruable through such date in
accordance with GAAP.
6.12 Parent Rights Agreement.
Parent has taken all necessary action so that none of the execution or
delivery of this Agreement, the consummation of the Merger or the consummation
of any other Transactions will result in any person becoming able to exercise
any rights under the Rights Agreement, dated as of February 11, 1999, as
amended, between Parent and American Stock Transfer & Trust Company, as rights
agent, (the "Parent Rights Agreement"), or enabling or requiring the associated
rights to purchase shares of Parent's Series A Junior
28
Participating Preferred Stock (the "Parent Rights") to be separated from the
shares of the Parent Common Stock to which they are attached or to be triggered
or to be exercisable.
6.13 Material Contracts.
Other than any contract or amendment thereto filed as an exhibit to any
Parent SEC Report and except as disclosed in Section 6.13 of the Parent
Disclosure Schedule or otherwise reflected in Parent's financial statements,
neither Parent nor any of its Subsidiaries, nor any of their respective assets,
businesses, or operations, is a party to, or is bound or affected by, or
receives benefits under, (i) any employment, severance, termination, consulting,
or retirement contract providing for aggregate payments to any Person in any
calendar year in excess of $500,000, (ii) any material contract relating to the
borrowing of money by Parent or any of its Subsidiaries or the guarantee by
Parent or any such Subsidiary of any such obligation (other than contracts
evidencing trade payables) and (iii) any contract which prohibits or restricts,
in any material respect, Parent or any of its Subsidiaries from engaging in any
business activities in any geographic area, line of business or otherwise in
competition with any other Person. With respect to each such contract and except
as disclosed in Section 6.13 of the Parent Disclosure Schedule: (A) the contract
is in full force and effect; (B) neither Parent nor any of its Subsidiaries is
in default thereunder, other than defaults which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect; (C) neither
Parent nor any of its Subsidiaries has repudiated or waived any material
provision of any such contract; and (D) no other party to any such contract is,
to the knowledge of Parent, in default in any respect, other than defaults which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect, or has repudiated or waived any material provision thereunder.
6.14 Certain Business Practices.
None of Parent, any of its Subsidiaries or any directors or officers,
agents or employees of Parent or any such Subsidiary, has (i) used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related
to political activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended; (iii) made any payment in the nature of criminal bribery; or
(iv) made any payment or received any payment for the purposes of inducing
purchases/sales in violation of the Social Security Act sect. 1128 (b)(3), the
"Federal Anti-kickback Statute", or any similar federal, state or local Law.
6.15 Healthcare Information Laws.
Parent and its Subsidiaries are in material compliance with all applicable
Healthcare Information Laws. Each of Parent, and its Subsidiaries (i) has
undertaken all necessary surveys, audits, inventories, reviews, analyses, or
assessments (including any necessary risk assessments) on all areas required for
compliance under all Healthcare Information Laws, (ii) has been in compliance
with such Healthcare Information Laws since the applicable compliance date of
any such Laws, (iii) has developed a plan for maintaining compliance with all
Healthcare Information Laws (the "Parent Compliance Plan") and (iii) has
implemented those provisions of the Parent Compliance Plan to ensure that such
entity is and will remain in compliance with all Healthcare Information Laws.
6.16 Statements True and Correct.
(a) No statement, certificate, instrument, or other writing furnished or to
be furnished by Parent to the Company pursuant to this Agreement or any other
document, agreement, or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(b) None of the information supplied or to be supplied by Parent for
inclusion in the Registration Statement to be filed by Parent with the SEC will,
(i) at the time the Registration Statement is filed with the SEC, (ii) at any
time it is amended or supplemented or (iii) at any time when the Registration
Statement
29
becomes effective under the Securities Act, be false or misleading with respect
to any material fact, or omit to state any material fact necessary to make the
statements therein not misleading.
(c) None of the information supplied or to be supplied by Parent for
inclusion in the Joint Proxy Statement/Prospectus to be mailed to the Company's
and Parent's stockholders in connection with the Stockholders' Meetings, the
Notes Tender Offer Documents and any other documents to be filed by Parent with
the SEC or any other Governmental Authority in connection with the Transactions
will, at the respective time such documents are filed, and with respect to the
Joint Proxy Statement/Prospectus, when first mailed to the stockholders of the
Company and stockholders of Parent, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, in the case of the Joint Proxy Statement/ Prospectus or any
amendment thereof or supplement thereto, at the time of the Stockholders'
Meetings, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for the
Stockholders' Meetings.
(d) All documents that Parent is responsible for filing with any
Governmental Authority in connection with the Transactions will comply in all
material respects with the provisions of applicable Law.
6.17 Financing.
Parent has received the commitment letter attached to the Parent Disclosure
Schedule. The funds proposed to be made available thereunder, together with
Parent's available cash and the proceeds from the Information Sale, will be
sufficient to permit Parent and Purchaser to consummate all the Transactions,
including, without limitation, the Merger.
6.18 Stock Ownership.
Neither Parent nor Purchaser is, nor at any time during the last three
years has been, an "interested stockholder" of the Company, as defined by
Section 203 of the DGCL.
6.19 Brokers.
No broker, finder or investment banker (other than Banc of America
Securities LLC) 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 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Covenants of the Company.
The Company agrees that, between the date of this Agreement and the
Effective Time, except as expressly contemplated by this Agreement or as set
forth in Section 7.1 of the Company Disclosure Schedule, unless Parent shall
otherwise consent in writing:
(a) the businesses of the Company and its Subsidiaries shall be
conducted only in, and the Company and its Subsidiaries shall not take any
action except in, the ordinary course of business and in a manner
consistent with past practice and, to the extent consistent therewith, the
Company will use commercially reasonable efforts to preserve intact its
current business organization, keep available the services of its current
officers and employees and preserve its relationships with its customers,
suppliers, licensors, licensees, distributors, resellers and others having
business dealings with the Company or any of its Subsidiaries; and
30
(b) neither the Company nor any of its Subsidiaries shall, directly or
indirectly, do, or commit to do, any of the following:
(i) amend or otherwise change the Certificate of Incorporation or
Bylaws or equivalent organizational documents of the Company or any of
its Subsidiaries;
(ii) issue, sell, pledge, dispose of, grant or encumber, or otherwise
subject to any Lien, (A) any shares of any class of capital stock of the
Company or any of its Subsidiaries, 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, of the Company
or any of its Subsidiaries (except for the issuance of Company Common
Stock issuable pursuant to Company Stock Awards outstanding on the date
of this Agreement and granted under Company Stock Option Plans in effect
on the date of this Agreement or for Company Common Stock issuable upon
the exercise of outstanding Warrants) or (B) any assets of the Company
or any of its Subsidiaries, except in the ordinary course of business
and in a manner consistent with past practice;
(iii) 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;
(iv) reclassify, combine, split, subdivide or redeem, or purchase or
otherwise acquire, directly or indirectly, any of its capital stock
(except for such acquisitions permitted or otherwise contemplated by the
Plans in the ordinary course of business in a manner consistent with
past practice);
(v) (A) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets, investment or capital
contribution or any other business combination) any corporation,
partnership or other business organization; (B) incur any indebtedness
(other than draws under the Credit Facility in the ordinary course of
business consistent with past practice) or issue any debt securities or
assume, guarantee or endorse, or otherwise become responsible for, the
obligations of any person; (C) authorize, or make any commitment with
respect to, any capital expenditure other than in the ordinary course of
business consistent with past practice and in no event greater than
$7,500,000 in the aggregate in any fiscal quarter; or (D) enter into or
amend any contract, agreement, commitment or arrangement with respect to
any matter set forth in this Section 7.1(b)(v);
(vi) (A) increase the compensation payable or to become payable or
the benefits provided to its current or former officers, directors, or
employees or any of their beneficiaries or dependents, except for
increases in the ordinary course of business and consistent with past
practice, (B) establish, adopt, enter into, terminate or amend any Plan
except as required by this Agreement or the Transactions contemplated
hereby, or to satisfy the minimum requirements of ERISA, the Code or
other applicable Law, (C) loan or advance money or other property to any
current or former director or executive officer of the Company or any
other Person, or (D) grant any stock option or stock unit or any other
equity or equity based awards;
(vii) effectuate a "plant closing" or "mass layoff," as those terms
are defined in WARN (determined without regard to terminations of
employment occurring on or after the Effective Time);
(viii) change any accounting policies or procedures, other than
changes required to be taken in response to changes in GAAP or in Law;
(ix) make, revoke or change any material Tax election or material
method of Tax accounting, file any amended Tax Return (unless required
by Law), enter into any closing agreement relating to a material amount
of Taxes, settle or compromise any material liability with respect to
Taxes or consent to any material claim or assessment relating to Taxes
or any waiver of the statute of limitations for any such claim or
assessment;
31
(x) pay, discharge or satisfy any material claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than in the ordinary course of business and consistent
with past practice, unless such payment, discharge or satisfaction is
made in accordance in all material respects with the terms of such
claim, liability or obligation as such terms exist on the date of this
Agreement;
(xi) amend or modify in any material respect, or consent to the
termination of, any Material Contract, or amend, waive or modify in any
material respect, or consent to the termination of, the Company's or any
of its Subsidiaries' rights thereunder;
(xii) commence or settle any Action, other than the settlement of
Actions involving payments by the Company or its Subsidiaries not to
exceed, with respect to any individual Action, $500,000 (provided,
further, that the Company shall also consult in good faith with Parent
prior to the settlement of any individual Action for more than
$250,000); or
(xiii) enter into any contract or agreement with any current or
former director or officer of the Company or any of its Subsidiaries or
any of their respective affiliates (including any immediate family
member of such person) or any other Affiliate of the Company or any of
its Subsidiaries; and
(c) the Company shall continue to file, prosecute, and maintain all
material Intellectual Property of the Company and its Subsidiaries. The
Company shall provide Parent with timely notice of any material
developments in the prosecution and maintenance of the such Intellectual
Property. The Company will also provide timely notice to Parent if there is
a reasonable potential that such Intellectual Property may become lost or
lapsed, except for such lapses of unused Intellectual Property in the
ordinary course of business and consistent with past practice, or if the
Company or any of its Subsidiaries receives any written charge, complaint,
claim, demand or notice alleging any interference, infringement,
misappropriation or violation of the Intellectual Property rights of any
third party by the Company of any of its Subsidiaries.
7.2 No Control of Other Party's Business.
Nothing contained in this Agreement shall give Parent, directly or
indirectly, the right to control or direct the Company's or its Subsidiaries'
operations prior to the Effective Time, and nothing contained in this Agreement
shall give the Company, directly or indirectly, the right to control or direct
Parent's or its Subsidiaries operations prior to the Effective Time. Prior to
the Effective Time, each of the Company and Parent shall exercise, consistent
with the terms and conditions of this Agreement, complete control and
supervision over its Subsidiaries' respective operations.
7.3 Covenants of Parent.
Parent agrees that, between the date of this Agreement and the Effective
Time, except as expressly contemplated by this Agreement or as set forth in
Section 7.3 of the Parent Disclosure Schedule, unless the Company shall
otherwise consent in writing:
(a) the businesses of Parent and its Subsidiaries shall be conducted
only in, and Parent and its Subsidiaries shall not take any action except
in, the ordinary course of business and in a manner consistent with past
practice; and
(b) neither Parent nor any of its Subsidiaries shall, directly or
indirectly, do, or commit to do, any of the following:
(i) amend or otherwise change its Certificate of Incorporation or
Bylaws or equivalent organizational documents, in each case, in any
manner adverse to the holders of the Company Common Stock;
(ii) reclassify, combine, split, subdivide or redeem, or purchase or
otherwise acquire, directly or indirectly, any of its capital stock
(except for such acquisitions permitted or otherwise contemplated by the
Plans in the ordinary course of business in a manner consistent with
past practice);
32
(iii) declare, set aside, make or pay any dividend or other
distribution payable in cash or property, with respect to any of its
capital stock; or
(iv) change any accounting policies or procedures, other than changes
required to be taken in response to changes in GAAP or in Law.
7.4 Adverse Changes in Condition.
Each Party agrees to give written notice promptly to the other Party upon
becoming aware of any fact, or of the occurrence or impending occurrence of any
event or circumstance, relating to it or any of its Subsidiaries which (a)
represents, or is reasonably likely to represent, either a material breach of
any representation, warranty, covenant or agreement of the other Party or which
has had or is reasonably likely to have a Material Adverse Effect or (b)
results, or is reasonably likely to result, in any of the conditions set forth
in ARTICLE 9 required to be satisfied by such Party not being satisfied. For
purposes of determining the satisfaction of the conditions to the consummation
of the Transactions contemplated by this Agreement, the fact that a Party has
given notice pursuant to this Section 7.4 shall not be considered.
7.5 Reports.
Each Party and its Subsidiaries shall file all reports required to be filed
by it with Governmental Authorities between the date of this Agreement and the
Closing and shall deliver to the other Party copies of all such material reports
promptly after the same are filed. If financial statements are contained in any
such reports filed with the SEC, such financial statements will fairly present
in all material respects the consolidated financial position of the entity
filing such statements as of the dates indicated and the consolidated results of
operations and cash flows for the periods then ended in accordance with GAAP
(subject in the case of interim financial statements to normal recurring
year-end adjustments that are not material). As of their respective dates, such
reports filed with the SEC will comply in all material respects with the
Securities Laws and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Any financial statements contained in any other
reports to another Governmental Authority shall be prepared in accordance with
Laws applicable to such reports.
7.6 Notes Tender Offer; Discharge of Note Indenture.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 10, at the request of Parent, the Company will commence
a tender offer or consent solicitation (collectively, the "Notes Tender Offer")
in respect of the Senior Subordinated Notes, as and at the time that Parent
shall request, with the cooperation of Parent. If commenced, the Notes Tender
Offer shall be in accordance with applicable Law and shall be solely on the
terms and conditions specified by Parent; provided, that the Notes Tender Offer
(and all obligations to make any payments to holders of all or any portion of
Senior Subordinated Notes in connection therewith or to modify the terms or
provisions of any Senior Subordinated Notes) shall be conditioned upon the
consummation of the Transactions, and shall terminate immediately upon the
termination of this Agreement prior to the consummation thereof. The Company
agrees to amend, supplement, consummate and/or terminate, as applicable, the
Notes Tender Offer upon, and only upon, the written consent of Parent. The
Company agrees to use its reasonable efforts to cooperate with Parent and,
subject to the preceding sentence and applicable Law, to use its reasonable best
efforts to consummate the Notes Tender Offer if so requested by Parent.
(b) If Parent elects to pursue the Notes Tender Offer, Parent shall
prepare, or cause to be prepared, an Offer to Purchase and Consent Solicitation
Statement in connection with the Notes Tender Offer in form and substance
reasonably satisfactory to the Company (as amended from time to time, the "Notes
Offer to Purchase"), together with related letters of transmittal and similar
ancillary agreements relating to the Notes Tender Offer (such documents,
together with all supplements and amendments thereto, being referred to herein
collectively as the "Notes Tender Offer Documents"). The Company shall provide
Parent with a
33
list of the record holders of the Senior Subordinated Notes, and to the extent
known by the Company, the beneficial owners of the Senior Subordinated Notes
(collectively, the "Noteholders"). The Company shall provide Parent with any
information for inclusion in the Notes Tender Offer Documents which may be
required under applicable Law and which is reasonably requested by Parent. If at
any time prior to the acceptance of Senior Subordinated Notes pursuant to the
Notes Tender Offer, any event should occur that is required by applicable Law,
or otherwise determined by Parent to be advisable, to be set forth in an
amendment of, or a supplement to, the Notes Tender Offer Documents, Parent will
prepare and cause to be disseminated such amendment or supplement; provided,
however, that prior to such dissemination, Parent shall consult with the Company
with respect to such amendment or supplement and shall afford the Company
reasonable opportunity to comment thereon.
(c) In the event the Notes Tender Offer is not commenced or otherwise
consummated other than for failure to consummate the Transactions, at the
request of Parent, immediately prior to the Effective Time, the Company will use
a portion of the proceeds from the Information Sale to provide for the
redemption of all of the Notes at the price set forth in the Notes Indenture and
the Senior Subordinated Notes in order to discharge and satisfy the entire
obligations under the Notes through the date of redemption in accordance with
Section 401 of the Indenture (the "Redemption").
(d) Parent shall pay for all expenses of the Company and, to the extent the
Company is responsible therefor, the Noteholders incurred in connection with the
Notes Tender Offer or the Redemption, as applicable.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Joint Proxy Statement/Prospectus; Stockholder
Approval.
(a) As promptly as reasonably practicable after execution of this
Agreement, the Parties shall cooperate to promptly prepare, and Parent shall
file with the SEC, the Registration Statement, and Parent shall use its
reasonable efforts, and Parent and the Company shall each cooperate, to cause
the Registration Statement to become effective under the Securities Act, and
Parent shall take any action required to be taken under applicable state blue
sky Laws or the Securities Laws in connection with the issuance of the shares of
Parent Common Stock upon consummation of the Merger (other than qualifying to do
business in any jurisdiction in which it is not now so qualified or filing a
general consent to service of process). The Parties shall cooperate in the
preparation and filing of the Registration Statement and shall furnish all
information concerning it and the holders of its capital stock as Parent may
reasonably request in connection with such action. In connection with the Joint
Proxy Statement/Prospectus that is a part of the Registration Statement, the
Parties shall furnish to each other all information concerning them that each
may reasonably request in connection with such Joint Proxy Statement/Prospectus.
No filing of, or amendment or supplement to, the Registration Statement will be
made by Parent, and no filing of, or amendment or supplement to, the Joint Proxy
Statement/Prospectus shall be made by either Parent or the Company (including
the filing, furnishing, or mailing of additional solicitation material), in each
case without providing the other Party a reasonable opportunity to review and
comment thereon. As soon as practicable after the effectiveness of the
Registration Statement, each of Parent and the Company shall mail such Joint
Proxy Statement/Prospectus to its respective stockholders. The Parties shall
timely and properly make all necessary filings with respect to the Merger under
the Securities Laws. If at any time prior to the Effective Time, any information
relating to the Company or Parent or any of their respective Subsidiaries,
directors, officers or employees, or any information relating to the
Transactions or the Information Sale, is discovered by the Company or Parent
which should be set forth in an amendment or supplement to the Registration
Statement or the Joint Proxy Statement/Prospectus, so that either such document
would not include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, the Party which
discovers such information shall promptly notify the other Parties hereto and an
appropriate amendment or supplement describing such information shall be
34
promptly filed with the SEC and, to the extent required by Law, disseminated to
the stockholders of the Company and Parent. Parent will advise the Company, as
promptly as reasonably practicable after Parent receives notice thereof, of the
time when the Registration Statement has become effective, of the issuance of
any stop order or the suspension of the qualification of Parent Common Stock for
offering or sale in any jurisdiction, of the initiation or threat of any
proceeding for any such purpose, or of the receipt of comments from the SEC or
its staff or of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information. Each Party shall supply
each other Party copies of (i) all correspondence between it or any of its
Representatives, on the one hand, and the SEC or its staff, on the other, with
respect to the Transactions, the Information Sale, the Registration Statement or
the Joint Proxy Statement/Prospectus and (ii) all orders of the SEC relating to
the Registration Statement.
(b) The Company shall, as promptly as reasonably practicable after the
execution of this Agreement, establish a record date for, duly call, give notice
of, convene and hold a Stockholders' Meeting (the "Company Stockholders'
Meeting"), to be held as promptly as practicable after the Registration
Statement has been declared effective by the SEC, solely for the purpose of
obtaining the Company Stockholder Approval and shall, subject to the provisions
of Section 8.2(c), through its Board of Directors, recommend to its stockholders
the adoption and approval of this Agreement and the Transactions contemplated
hereby, and shall use all commercially reasonable efforts to obtain Company
Stockholder Approval.
(c) Parent shall, as promptly as reasonably practicable after the execution
of this Agreement, establish a record date for, duly call, give notice of,
convene and hold a Stockholders' Meeting (the "Parent Stockholders' Meeting"),
to be held as soon as reasonably practicable after the Registration Statement
has been declared effective by the SEC, solely for the purpose of obtaining the
Parent Stockholder Approval and shall, subject to fiduciary duties under
applicable Law, through its Board of Directors, recommend to its stockholders
the approval of the issuance of Parent Common Stock pursuant to this Agreement,
and shall use all commercially reasonable efforts to obtain Parent Stockholder
Approval.
8.2 Other Offers, Etc.
(a) The Company agrees that neither it nor any of its Subsidiaries nor any
Representative of it or any such Subsidiary will, directly or indirectly, (i)
solicit, initiate or knowingly encourage (including by way of furnishing
nonpublic information), or take any other action designed to, or that could
reasonably be expected to, facilitate, any inquiries or the making of any
proposal or offer (including, without limitation, any proposal or offer to its
stockholders) for, or that could reasonably be expected to lead to, a Competing
Transaction (as defined below), or (ii) enter into or maintain or continue
discussions or negotiations with any Person for the intended purpose of
facilitating such inquiries or the making of such a proposal or offer, or (iii)
agree to, approve, endorse or recommend any Competing Transaction or enter into
any letter of intent or other contract, agreement or commitment providing for or
otherwise relating to any Competing Transaction (other than a confidentiality
agreement pursuant to the terms and conditions of Section 8.2(b)), or (iv)
authorize or permit any Representative of the Company or any of its Subsidiaries
to take any such action. The Company shall notify Parent as promptly as
practicable (and in any event within twenty-four (24) hours) after the Company
receives any bona fide oral or written proposal or offer for a Competing
Transaction, specifying the material terms and conditions thereof and the
identity of the party making such proposal or offer, and shall furnish to Parent
a copy of such proposal or offer (if it is in writing). The Company shall
thereafter keep Parent fully informed on a prompt basis of the status thereof,
including any modifications to the financial or other material terms of such
proposal or offer and shall provide to Parent as soon as practicable after
receipt or delivery thereof, copies of all correspondence and other written
communications received by the Company or any of its Subsidiaries from any
Person, or given by the Company or any of its Subsidiaries to any Person, that
relates to any such proposal or offer (which shall include correspondence and
other communications to or from the Information Buyer). The Company immediately
shall cease and cause to be terminated, and shall cause its Subsidiaries and its
and their respective Representatives to cease and cause to be terminated, all
discussions or negotiations (whether or not existing as of the date hereof) with
any Person conducted heretofore with respect to a Competing Transaction. Without
limiting the foregoing, it is agreed that any violation of the restrictions set
forth in this Section 8.2(a) by any Representative of the Company or its
35
Subsidiaries shall be a breach of this Section 8.2(a) by the Company.
Notwithstanding the aforementioned, nothing contained in this Section 8.2 shall
prohibit the Company and its Representatives from taking any action with respect
to the negotiation, execution and consummation of the Information Restructuring
in accordance with the terms of the Information Documents.
(b) Notwithstanding anything to the contrary in this Section 8.2, prior to
the time of obtaining the Company Stockholder Approval, the Company may furnish
non-public information to, and enter into discussions with, a Person who has
made an unsolicited, bona fide proposal or offer for a Competing Transaction, so
long as (A) neither the Company nor any of its Subsidiaries nor any of their
Representatives shall have breached any of the provisions of Section 8.2(a) with
respect to such unsolicited, bona fide proposal or offer and (B) (i) the Board
of Directors of the Company has determined, in its good faith judgment (after
consulting with its financial advisor), that such proposal or offer constitutes
or could reasonably be expected to lead to a Superior Proposal (as defined
below), (ii) the Board of Directors of the Company has determined, in its good
faith judgment after consulting with its outside legal counsel (who may be the
Company's regularly engaged outside legal counsel), that, in light of such
proposal or offer, the failure to furnish such information or to enter into
discussions with such Person would be inconsistent with its fiduciary duties
under applicable Law (taking into account the extent to which the Company
solicited, and participated in discussions and negotiations with respect to,
Competing Transactions prior to entering into this Agreement), (iii) the Company
has provided written notice to Parent at least two (2) business days prior to
taking any such action of its intent to furnish information or enter into
discussions with such Person, (iv) the Company has obtained from such Person an
executed confidentiality agreement (unless a confidentiality agreement already
exists) on terms no less favorable to the Company than those contained in the
Confidentiality Agreements (it being understood that such confidentiality
agreement and any related agreements shall not include any provision calling for
any exclusive right to negotiate with such Person or having the effect of
prohibiting the Company from satisfying its obligations under this Agreement or
the Information Documents), except that such confidentiality agreement may
permit such Person to share Evaluation Material (as defined in the
Confidentiality Agreements) with its Representatives and financing sources, and
(v) all information provided to such Person has been previously provided to
Parent or is provided to Parent prior to or concurrently with the time it is
provided to such Person making such offer or proposal.
(c) Except as set forth in this Section 8.2(c), neither the Board of
Directors of the Company nor any committee thereof shall withdraw, qualify or
modify, or propose publicly to withdraw, qualify or modify, in a manner adverse
to Parent, the approval by the Board of Directors of the Company or any such
committee of this Agreement or the Merger or the recommendation of the Board of
Directors of the Company to the Company stockholders that they give Company
Stockholder Approval (any of the foregoing being a "Change in the Company
Recommendation") or approve or recommend, or cause or permit the Company to
enter into any letter of intent or other contract, agreement or commitment with
respect to, any Competing Transaction (except for a confidentiality agreement as
contemplated by Section 8.2(b) above) (a "Competing Transaction Agreement").
Notwithstanding the foregoing, prior to the time of obtaining Company
Stockholder Approval and so long as neither the Company nor its Subsidiaries nor
any of its or their Representatives shall have breached any of the provisions of
Section 8.2(a) with respect to such unsolicited, bona fide proposal or offer,
the Board of Directors of the Company shall be permitted to (i) not recommend to
the stockholders of the Company that they give the Company Stockholder Approval,
(ii) make a Change in the Company Recommendation, and/or (iii) recommend a
Competing Transaction if the Board of Directors of the Company (or a committee
of disinterested directors thereof) by a majority vote has determined in its
good faith judgment, (w) after consulting with its financial advisor, that such
Competing Transaction constitutes a Superior Proposal, and (x) after consulting
with outside legal counsel (who may be the Company's regularly engaged outside
legal counsel), that the failure to make a Change in the Company Recommendation
would be inconsistent with its fiduciary duties under applicable Law (taking
into account the extent to which the Company solicited, and participated in
discussions and negotiations with respect to, Competing Transactions prior to
entering into this Agreement), but only (y) after providing written notice to
Parent at least two business days in advance (a "Notice of Superior Proposal")
advising Parent that the Board of Directors of the Company has received a
proposal or an offer of a Competing Transaction that the Board of Directors of
the Company (or such committee) has determined is a Superior Proposal (the
"Offer"), specifying the material
36
terms and conditions of such Offer and identifying the Person making such Offer
with a copy thereof and indicating that the Board of Directors of the Company
intends to effect a Change in the Company Recommendation and/or recommend a
Competing Transaction and (z) if Parent does not, prior to two (2) business days
after Parent's receipt of the Notice of Superior Proposal, make an offer that
the Board of Directors of the Company determines, in its good faith judgment
(after consulting with its financial advisor) to be at least as favorable to the
Company's stockholders as such Offer. Any disclosure that the Board of Directors
of the Company is legally required to make with respect to the receipt of a
proposal or offer for a Competing Transaction will not constitute a violation of
this Agreement.
(d) A "Competing Transaction" means any of the following (other than the
Transactions): (i) the acquisition by any Person in any manner of a number of
shares of any class of equity securities of the Company equal to or greater than
15% of the number of such shares outstanding before such acquisition, (ii) the
acquisition by any Person in any manner, directly or indirectly, of assets
(including securities of any Subsidiary) that constitute 15% or more of the
assets of the Company and its Subsidiaries taken as a whole, or (iii) a merger,
consolidation, tender offer, exchange offer, binding share exchange, joint
venture, dissolution, recapitalization, liquidation, business combination or
other similar transaction, or series of related transactions occurring
contemporaneously, involving the Company or any of its Subsidiaries as a result
of which any Person or Persons, collectively would acquire the assets or
securities described in either of clauses (i) or (ii) above. Notwithstanding the
foregoing, the Information Restructuring as set forth in the Information
Documents shall not be deemed a Competing Transaction.
(e) A "Superior Proposal" means an unsolicited (after the date hereof)
written bona fide offer made by a third party with respect to a Competing
Transaction (with all percentages contained in the definition of "Competing
Transaction" increased to 80% for purposes of this definition), in each case on
terms that the Board of Directors of the Company determines, in its good faith
judgment (after consulting with its financial advisor) and taking into account
all legal, financial, regulatory and other aspects of the offer that it deems
relevant (including whether such Competing Transaction is reasonably capable of
being completed taking into account all financial, legal, regulatory and other
aspects of such offer), to be more favorable to the Company stockholders than
the Merger.
8.3 Exchange Listing.
Parent shall use all commercially reasonable efforts to list, prior to the
Effective Time, on the Nasdaq National Market the shares of Parent Company
Common Stock to be issued to the holders of Company Common Stock pursuant to the
Merger, and Parent shall use all commercially reasonable efforts to give all
notices and make all filings with Nasdaq required in connection with the
transactions contemplated herein.
8.4 Antitrust Notification; Consents of Governmental Authorities.
(a) Each of the Parties undertake and agree to and to cause their
respective "ultimate parent entities" (as defined in the HSR Act) to file as
soon as practicable notifications under the HSR Act with the United States
Federal Trade Commission (the "FTC") and the Antitrust Division of the United
States Department of Justice (the "Antitrust Division"). Each of the Parties
further agrees to respond as promptly as practicable to any inquiries and/or
requests for information or documents received from any Governmental Authority
in connection with antitrust matters related to the Transactions contemplated by
this Agreement. Neither Parent, Purchaser or the Company shall extend any
waiting period under the HSR Act or enter into any agreement with the FTC or the
Antitrust Division not to consummate the Transactions contemplated by this
Agreement, except with the prior written consent of the other Parties, which
consent shall not be unreasonably withheld or delayed. Parent, Purchaser or the
Company shall, from the date hereof until the Effective Date, use their
respective commercially reasonable efforts to avoid the entry of, or to have
vacated or terminated, any decree, order, or judgment that would restrain,
prevent or delay the consummation of the Transactions.
(b) Notwithstanding anything to the contrary in this Agreement, (i) Parent
and Purchaser shall not be required to take any actions in connection with, or
agree to, any sale, divestiture or disposition of any
37
businesses, assets, properties or product lines of Parent, the Company or their
respective Subsidiaries, or the imposition of any material limitation on the
ability of Parent to own or exercise control of the Company or its Subsidiaries
or their respective businesses following the Effective Time and (ii) the Company
shall not be permitted to take any actions in connection with, or agree to, any
divestiture or disposition as a prerequisite for the FTC's or Antitrust
Division's clearance of the Merger or the Information Sale.
(c) In case, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purposes of this Section 8.4, the proper
officers and directors of each party to this Agreement shall use their
commercially reasonable efforts to take all such action.
8.5 Filings with State Offices.
Upon the terms and subject to the conditions of this Agreement, Parent
shall use all commercially reasonable efforts to execute and file the
Certificate of Merger with the Secretary of State of the State of
Delaware in
connection with the Closing.
8.6 Agreement as to Efforts to Consummate.
Subject to the terms and conditions of this Agreement, except as provided
in Section 8.4, each Party agrees to use, and to cause each of its Subsidiaries
to use all commercially reasonable efforts (a) to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the Transactions,
including using its reasonable efforts (i) to obtain all Permits, consents,
approvals, authorizations, qualifications and orders of Governmental Authorities
and parties to contracts with the Company and its Subsidiaries as are necessary
for the consummation of the Transactions and to fulfill the conditions to the
Merger, (ii) to lift or rescind any Order adversely affecting its ability to
consummate the Transactions, and (iii) to cause to be satisfied the conditions
referred to in ARTICLE 9, and (b) to cause the satisfaction of all conditions to
Closing; provided that nothing herein shall preclude either Party from
exercising its rights under this Agreement.
8.7 Investigation and Confidentiality.
(a) Prior to the Effective Time, each Party shall use all commercially
reasonable efforts to keep the other Parties promptly advised of all material
developments relevant to its business, the consummation of the Merger and the
other Transactions, and consummation of the Information Restructuring. The
Company shall afford to Parent (and its counsel, financial advisors, auditors
and other Representatives) reasonable access (including for the purpose of
coordinating integration activities and transition planning with employees of
the Company and its Subsidiaries) to the business, properties, personnel,
offices, books and records of the Company and its Subsidiaries and each of their
respective financial, legal and operating conditions as Parent reasonably
requests, provided that such access shall not interfere unreasonably with normal
operations of the Company or any of its Subsidiaries, as the case may be.
Without limiting the foregoing, the Company shall permit Parent's senior
officers to meet with the officers of the Company responsible for the Company's
financial statements, the internal controls of the Company and the disclosure
controls and procedures of the Company to discuss such matters as Parent may
deem reasonably necessary or appropriate for Parent to satisfy its obligations
under Sections 302 and 906 of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and any rules and regulations
relating thereto. During the period prior to the Effective Time (or the
termination of this Agreement), the Company shall promptly furnish to Parent (i)
a copy of each report, schedule, registration statement and other document filed
by it during such period pursuant to the requirements of applicable Federal and
state securities Laws and (ii) all other information concerning the Company's
and its Subsidiaries' business, properties, and personnel as Parent may
reasonably request.
(b) In addition to the Parties' respective obligations under the
Confidentiality Agreements, which are hereby reaffirmed and adopted, and
incorporated by reference herein, each Party shall, and shall cause its
Representatives to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
38
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Effective Time, each Party shall promptly return or certify the destruction of
all documents and copies thereof, and all work papers containing confidential
information received from the other Party.
8.8 Public Announcements.
Parent and the Company shall each issue an initial press release relating
to this Agreement the text of each of which has been agreed to by each of Parent
and the Company. Thereafter, unless otherwise required by applicable Law or the
requirements of the NYSE or Nasdaq, each of Parent and the Company shall each
use its commercially reasonable efforts to consult with each other before
issuing any press release or otherwise making any public statements with respect
to this Agreement, the Merger or any of the other Transactions
8.9 State Takeover Laws.
Each of the Parties shall (i) take all necessary action to ensure that no
Takeover Law or similar statute or regulation is or becomes applicable to this
Agreement or the Transactions and (ii) if any state Takeover Law or similar
statute or regulation is or becomes applicable to this Agreement or the
Transactions, take all reasonable action to ensure that the Transactions may be
promptly consummated on the terms contemplated by this Agreement and otherwise
to minimize the effect of, or challenge the validity or applicability of, any
applicable Takeover Law.
8.10 Intentionally Omitted.
8.11 Employee Benefits Plans.
(a) From and after the Effective Time and at least until December 31, 2005,
employees of the Company and its Subsidiaries shall be offered participation in
employee benefit plans, programs, policies and arrangements that are no less
favorable in the aggregate to those provided under the applicable employee
benefit plans (as defined in Section 3(3) of ERISA (excluding plans exempt under
Section 201(2) of ERISA)), programs, policies and arrangements of the Company
and its Subsidiaries in effect at the Effective Time (collectively, "Current
Plans"); provided, however, that nothing contained in this Section 8.11(a) shall
(i) obligate or commit Parent or its Subsidiaries to continue any particular
Current Plan after the Effective Time or to maintain in effect any particular
Current Plan or any level or type of benefits, (ii) obligate or commit Parent or
its Subsidiaries to provide any employee of the Company or any of its
Subsidiaries with any equity compensation pursuant to any equity compensation
plans, programs or arrangements sponsored or provided by Parent or any of its
Subsidiaries or Affiliates for the benefit of its employees, or (iii) prohibit
Parent or its Subsidiaries from making any changes to any Current Plans. In the
event that the operation of any severance pay plan or arrangement or any
deferred compensation plan or arrangement of the Company or its Subsidiaries
(the "Deferred Compensation Plans") after the Effective Time and through
December 31, 2006 causes an excise tax, interest, and/or penalties under Code
Section 409A to be assessed against an individual, Parent will, or will cause
the Company or Subsidiaries to, reimburse the individual for such excise tax,
interest, and/or penalties through a gross up payment to be made no later than
the date the excise tax, interest and/or penalties is due; provided, however,
(A) if the Closing does not occur on or before December 31, 2005 (or such later
date as may be provided by subsequent Treasury guidance prior to December 31,
2005 for the termination of deferral arrangements without consequence under Code
Section 409A) (the later of December 31, 2005 or such later date being the "409A
Deadline"), or (B) if Parent, the Company or any of their Subsidiaries offers to
make a lump sum payment on or before the 409A Deadline of the aggregate payments
due to an individual pursuant to any such Deferred Compensation Plans and such
offer is not accepted on a timely basis by such individual, then, in either such
case, neither Parent, the Company nor any of their respective Subsidiaries shall
have any liability to such individual for any such gross up payment. In
addition, notwithstanding anything contained in this Agreement to the contrary,
the Company shall have the right prior to Closing to amend the Deferred
Compensation Plans such that payments made under the Deferred Compensation Plans
will be in accordance with Code Section 409A and will not be subject to an
excise tax, interest and/or penalties. Such amendment may include an amendment
to cause currently
39
non-vested amounts to pay out in a lump sum upon a qualifying separation from
service, and such amendments may, but need not, be made contingent on the
consummation of the Transactions.
(b) Parent will, or will cause the Company and its Subsidiaries to, credit
each employee of the Company and its Subsidiaries as of the Effective Time with
such number of unused vacation days and other paid time off accrued by each such
employee with the Company and its Subsidiaries prior to the Effective Time in
accordance with the Company's personnel policies applicable to such employees on
the date hereof, copies of which have been made available to Parent; provided
that Parent may, in its sole discretion and to the extent permitted by
applicable Law, require that such vacation and other paid time off be taken by
each such employee prior to December 31, 2005.
(c) Employees of the Company and its Subsidiaries shall receive credit for
purposes of eligibility to participate and vesting (but not for benefit accruals
under any plan) under any employee benefit plan, program or arrangement
established or maintained by Parent or any of its Affiliates for service accrued
prior to the Effective Time with the Company or any of its Subsidiaries under
which such employee may be eligible to participate on or after the Effective
Time to the extent such service would have been recognized by the Company or any
such Subsidiary under comparable plans immediately prior to the Effective Time;
provided, however, that such crediting of service shall not operate to duplicate
any benefit or the funding of any such benefit.
(d) With respect to the welfare benefit plans, programs and arrangements
maintained, sponsored or contributed to by Parent or its Subsidiaries ("Parent
Welfare Benefit Plans") in which an employee of the Company and its Subsidiaries
may be eligible to participate on or after the Effective Time, Parent shall
waive, or cause its insurance carrier to waive, any limitations on benefits
relating to pre-existing conditions (if any) with respect to participation and
coverage requirements applicable to employees of the Company and its
Subsidiaries under Parent Welfare Benefit Plans to the same extent such
limitations are waived under any comparable plan of Parent or its Subsidiaries;
provided, however, that such pre-existing condition limitations shall not be
waived with respect to life insurance and disability benefits provided under the
Parent Plans or with respect to Parent Plans that are group health plans if the
employee (or the employee's dependent) has not been covered under a group health
plan for at least one year prior to the Effective Time.
8.12 Indemnification; Insurance.
(a) The Bylaws of the Surviving Corporation shall contain provisions no
less favorable with respect to indemnification than are set forth in Article VII
of the Bylaws 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 affect adversely the rights thereunder of individuals who, at
or prior to the Effective Time, were directors, officers, employees, fiduciaries
or agents of the Company (collectively, "Indemnified Directors/ Officers"),
unless such modification shall be required by Law. Parent hereby unconditionally
guarantees the obligations of the Surviving Corporation under this Section
8.12(a).
(b) As of or prior to the Effective Time, Parent shall obtain prepaid (or
"tail") directors' and officers' liability insurance providing for coverage with
respect to matters occurring prior to the Effective Time for six years from the
Effective Time, which coverage amount shall be the same as, and which shall
contain terms and conditions that are not materially less favorable than, the
current directors' and officers' liability insurance policies maintained by the
Company.
(c) In the event Parent or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any other
Person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, then, and in each such case, proper
provision shall be made so that the successors and assigns of Parent or the
Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 8.12.
The provisions of this Section 8.12 are intended to be for the benefit of
and shall be enforceable by, each Indemnified Director/Officer and their
respective heirs and representatives.
40
8.13 Sale of HIS.
(a) Concurrently with the execution and delivery of this Agreement, the
Company shall execute and deliver the Stock Purchase Agreement and the related
documents listed in Section 8.13 of the Company Disclosure Schedule, each in the
form attached as exhibits to Section 8.13 of the Company Disclosure Schedule
(collectively the "Information Documents"). The Company shall not agree to
amend, modify or waive any term, condition or provision of the Information
Documents without the prior written consent of Parent.
(b) Immediately prior to the Effective Time and pursuant to the terms of
the Information Documents, the Company shall consummate the Information
Restructuring, including the Information Sale upon the terms and subject to the
conditions set forth in the Information Documents.
(c) The Company shall, and shall cause HIS to, comply with each of their
respective obligations under the Information Documents. The Company agrees to
give written notice promptly to Parent upon becoming aware of any fact, or the
occurrence or impending occurrence of any event or circumstance, which (i)
represents, or is reasonably likely to represent, either a material breach of
any representation, warranty, covenant or agreement of the Company or the
Information Buyer under the Information Documents, or (ii) results, or is
reasonably likely to result, in any of the conditions to the consummation of the
transactions contemplated by the Information Documents not being satisfied.
8.14 Company Affiliates.
No later than five (5) days prior to the Closing Date, the Company shall
deliver to Parent a list of names and addresses of those persons who were, in
the Company's reasonable judgment, on date of the Company Stockholders' Meeting,
"affiliates" (within the meaning of Rule 145 of the rules and regulations
promulgated under the Securities Act (each such person being a "Company
Affiliate")) of the Company. The Company shall provide Parent with such
information and documents as Parent shall reasonably request for purposes of
reviewing such list. Prior the Closing Date, the Company shall use its
commercially reasonable efforts to deliver or cause to be delivered to Parent
from each Company Affiliate an affiliate letter substantially in the form
attached hereto as Exhibit A.
8.15 Stockholder Litigation.
Except to the extent that the provisions of any insurance policies relevant
thereto prohibit or limit the Company from doing so, the Company shall give
Parent the reasonable opportunity to participate in the defense or settlement of
any stockholder Litigation against the Company and/or its directors relating to
the Merger or the other Transactions, and no such settlement shall be agreed to
by the Company without Parent's prior written consent, which consent shall not
be unreasonably withheld or delayed.
8.16 Letters of the Company's Accountants.
The Company shall use its commercially reasonable efforts to cause to be
delivered to Parent two letters from the Company's independent accountants, one
dated a date within two Business Days before the date on which the Registration
Statement will become effective and one dated a date within two Business Days
before the Closing Date, each addressed to Parent, in form and substance
reasonably satisfactory to Parent and customary in scope and substance for
comfort letters delivered by independent public accountants in connection with
registration statements similar to the Registration Statement.
8.17 Exemption for Liability Under Section 16(b).
Provided that Company delivers to Parent the Section 16 Information in a
timely fashion, the Board of Directors of Parent, or a committee of Non-Employee
Directors thereof (as such term is defined for purposes of Rule 16b-3(d) under
the Exchange Act), shall adopt a resolution providing that the receipt by
Company Insiders of Parent Common Stock in exchange for shares of Company Common
Stock pursuant to the
41
Transactions contemplated hereby and to the extent such securities are listed in
the Section 16 Information are intended to be exempt from liability pursuant to
Section 16(b) under the Exchange Act.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party.
The respective obligations of each Party to perform this Agreement and
consummate the Merger and the other Transactions are subject to the satisfaction
of the following conditions, unless waived by the Parties pursuant to Section
11.5:
(a) Stockholder Approval. Company Stockholder Approval and Parent
Stockholder Approval shall have been obtained.
(b) Regulatory Approvals. All applicable waiting periods under the HSR
Act with respect to the Merger shall have expired or terminated.
(c) Legal Proceedings. No court or Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any Law or Order (whether temporary, preliminary or permanent) or taken any
other action which prohibits, restricts or makes illegal consummation of
the Merger or any of the other Transactions; provided that, subject to
Section 8.4(b), each of the Parties shall have used all commercially
reasonable efforts to prevent the entry of any such Order and to appeal as
promptly as possible any Order that may be entered.
(d) Registration Statement. The Registration Statement shall be
effective under the Securities Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued, no
order by the SEC to suspend the effectiveness thereof shall have been
initiated and be continuing, and all necessary approvals under state
securities Laws or the Securities Act or Exchange Act relating to the
issuance or trading of the shares of Parent Common Stock issuable pursuant
to the Merger shall have been received.
(e) Exchange Listing. The shares of Parent Common Stock issuable
pursuant to the Merger shall have been approved for listing on the Nasdaq
National Market, subject to official notice of issuance.
(f) Sale of HIS. The Information Restructuring shall have been
consummated in accordance with the terms of the Information Documents
(including the satisfaction or waiver of all conditions set forth in the
Information Documents); provided, however, that any Party in material
breach or default of any covenant or agreement of such Party in the
Information Documents shall be deemed to have waived this condition.
9.2 Conditions to Obligations of Parent and Purchaser.
The obligations of Parent and Purchaser to perform this Agreement and
consummate the Merger and the other Transactions are subject to the satisfaction
of the following conditions, unless waived by Parent pursuant to Section 11.5:
(a) Representations and Warranties. Each of the representations and
warranties of the Company set forth in this Agreement that do not contain
an exception or qualification relating to materiality or Material Adverse
Effect shall be true and correct in all material respects, on and as of the
Closing Date, with the same effect as though all such representations and
warranties had been made on and as of the Closing Date (provided that such
representations and warranties which are confined to a specified date shall
be true and correct in all material respects only as of such date). The
representations and warranties of the Company set forth in this Agreement
that contain an exception or qualification relating to materiality or
Material Adverse Effect shall be true and correct in all respects, on and
as of the Closing Date, with the same effect as though all such
representations and warranties had been made on
42
and as of the Closing Date (provided that such representations and
warranties which are confined to a specified date shall be true and correct
in all respects only as of such date); provided, however, that this
condition shall be deemed to have been satisfied unless the individual or
aggregate impact of all inaccuracies of such representations and warranties
has had, or would reasonably be expected to have, a Material Adverse Effect
with respect to the Company.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of the Company to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all material respects.
(c) Certificates. The Company shall have delivered to Parent (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer or its chief financial officer, to the effect that
the conditions set forth in Section 9.1(a) as relates to the Company and in
Sections 9.2(a) and 9.2(b) have been satisfied, and (ii) certified copies
of resolutions duly adopted by the Company's Board of Directors and
stockholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement, and
the consummation of the Transactions, all in such reasonable detail as
Parent and its counsel shall reasonably request.
(d) Company SEC Reports. The Company shall have timely filed or
furnished, as the case may be, all Company SEC Reports required to be filed
or furnished, as the case may be, by the Company following the date of this
Agreement and all such Company SEC Reports shall have been prepared in
accordance with the requirements of the Securities Law.
(e) Appraisal Rights. The total number of Dissenting Shares shall not
exceed fifteen percent (15%) of the outstanding shares of Company Common
Stock at the Effective Time.
(f) Arclight Consent. The provisions of that certain letter agreement
dated August 5, 2005, between Arclight System LLC and the Company shall
have become effective, including with respect to the cancellation of the
Warrant Agreement in accordance with Section 3.5(f).
9.3 Conditions to Obligations of the Company.
The obligations of the Company to perform this Agreement and consummate the
Merger and the other Transactions are subject to the satisfaction of the
following conditions, unless waived by the Company pursuant to Section 11.5:
(a) Representations and Warranties. Each of the representations and
warranties of Parent set forth in this Agreement that do not contain an
exception or qualification relating to materiality or Material Adverse
Effect shall be true and correct in all material respects, on and as of the
Closing Date, with the same effect as though all such representations and
warranties had been made on and as of the Closing Date (provided that such
representations and warranties which are confined to a specified date shall
be true and correct in all material respects only as of such date). The
representations and warranties of Parent set forth in this Agreement that
contain an exception or qualification relating to materiality or Material
Adverse Effect shall be true and correct in all respects, on and as of the
Closing Date, with the same effect as though all such representations and
warranties had been made on and as of the Closing Date (provided that such
representations and warranties which are confined to a specified date shall
be true and correct in all respects only as of such date); provided,
however, that this condition shall be deemed to have been satisfied unless
the individual or aggregate impact of all inaccuracies of such
representations and warranties has had, or would reasonably be expected to
have, a Material Adverse Effect with respect to Parent.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of Parent to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all material respects.
43
(c) Certificates. Parent shall have delivered to the Company (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer or its chief financial officer, to the effect that
the conditions set forth in Section 9.1(a) as relates to Parent and in
Sections 9.3(a) and 9.3(b) have been satisfied, and (ii) certified copies
of resolutions duly adopted by Parent's Board of Directors evidencing the
taking of all action necessary to authorize the execution, delivery and
performance of this Agreement, and the consummation of the Transactions,
all in such reasonable detail as the Company and its counsel shall
reasonably request.
ARTICLE 10
TERMINATION
10.1 Termination.
Notwithstanding any other provision of this Agreement, and notwithstanding
the approval of this Agreement by the stockholders of the Company and
stockholders of Parent or both, this Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time:
(a) by mutual written agreement of the Parties; or
(b) by either Parent or the Company if the Effective Time shall not have
occurred within six months following the date hereof (the "Outside Date");
provided, however, that the right to terminate this Agreement under this
Section 10.1(b) shall not be available to any Party whose failure to
perform, in any material respect, any of such Party's covenants or
agreements contained in this Agreement has been a principal cause of, or
resulted in, the failure of the Effective Time to occur on or before such
date; provided, further, that, (i) if the Company and/or the Information
Buyer shall terminate the Stock Purchase Agreement, then Parent shall have
the right, upon written notice to the Company, to extend the Outside Date
for 120 days following such termination of the Stock Purchase Agreement,
and (ii) if all waiting periods (and extensions thereof) applicable to the
consummation of the Merger and the other Transactions under the HSR Act
have not expired or terminated, then either Parent or the Company shall
have the right, upon written notice the other Party, to extend the Outside
Date to the date which is ten months following the date hereof; or
(c) by either Parent or the Company if any Governmental Authority shall
have enacted, issued, promulgated, enforced or entered any permanent
injunction, order, decree or ruling which is then in effect and has the
effect of making consummation of the Merger illegal or otherwise preventing
or prohibiting consummation of the Merger and such injunction, order,
decree or ruling shall have become final and non-appealable; provided,
however, that the right to terminate this Agreement under this Section
10.1(c) shall not be available to any Party whose failure to perform, in
any material respect, any of such Party's covenants or agreements contained
in this Agreement or whose other act or failure to act has been the primary
cause of, or resulted in, the application or imposition of such injunction,
order, decree or ruling; or
(d) by Parent if a Company Triggering Event (as defined below) shall
have occurred; or
(e) by either Parent or the Company, in the event the Company
Stockholder Approval is not obtained at the Company Stockholders' Meeting
(including any adjournment or postponement thereof); or
(f) by either Parent or the Company, in the event the Parent Stockholder
Approval is not obtained at the Parent Stockholders' Meeting (including any
adjournment or postponement thereof); or
(g) by the Company if it enters into a definitive agreement with respect
to a Superior Proposal (other than a confidentiality agreement as
contemplated by Section 8.2(b)); provided, however, that neither the
Company nor any of its Subsidiaries or Representatives shall have breached
any of the provisions of Section 8.2, including, without limitation, the
provisions of Section 8.2(c), and simultane-
44
ously with the termination under this Section 10.1(g), the Company shall
pay Parent the Fee pursuant to Section 11.2(b); or
(h) by Parent if the Company and/or the Information Buyer shall have
terminated the Stock Purchase Agreement.
For purposes of this Agreement, a "Company Triggering Event" shall be
deemed to have occurred if: (i) a Change in Company Recommendation shall have
occurred; (ii) the Board of Directors of the Company shall have recommended to
the stockholders of the Company a Competing Transaction or shall have publicly
announced it intends to do so; (iii) the Company shall have entered into any
Competing Transaction Agreement or any agreement, contract or commitment
accepting any Competing Transaction; (iv) a tender offer or exchange offer that,
if successful, would result in any Person becoming a beneficial owner of 50% or
more of the outstanding shares of Company Common Stock is commenced and the
Board of Directors of the Company fails, within ten (10) days of commencement of
such tender offer or exchange offer, to recommend that the stockholders of
Company Common Stock reject such tender offer or exchange offer; or (v) the
Company shall have failed to include in the Joint Proxy Statement/Prospectus the
recommendation of the Board of Directors of the Company in favor of holders of
Company Common Stock approving this Agreement, the Merger and the other
Transactions contemplated herein.
10.2 Effect of Termination.
In the event of the termination of this Agreement pursuant to Section 10.1,
this Agreement shall forthwith become void, and there shall be no liability
under this Agreement on the part of any Party hereto, except (a) as set forth in
Section 11.2 and (b) nothing herein shall relieve any Party from liability for
any willful breach of any of its representations, warranties, covenants or
agreements set forth in this Agreement prior to such termination; provided,
however, that the terms of Section 8.7(b) shall survive any termination of this
Agreement.
10.3 Non-Survival of Representations and Covenants.
The representations, warranties and agreements in this Agreement and in any
certificate delivered pursuant hereto shall terminate at the Effective Time or
upon the termination of this Agreement pursuant to Section 10.1, as the case may
be, except that the agreements set forth in ARTICLES 1, 2, 3, 4 and 11 and
Sections 8.4(c), 8.7(b), 8.11, 8.12 and 10.3 shall survive the Effective Time.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions.
(a) Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:
"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.
"Antitrust Laws" means the HSR Act, as amended, the ▇▇▇▇▇▇▇ Act, as
amended, the ▇▇▇▇▇▇▇ Act, as amended, the Federal Trade Commission Act, as
amended, and any other federal, state or foreign Law or order designed to
prohibit, restrict or regulate actions in order to promote or enhance
competition and/or prevent monopolization or restraint of trade.
"Applicable Price" means the Average Price; provided, however, if any
Parent Common Stock (or any security convertible or exchangeable into or
exercisable thereof) shall be issued, sold, granted or otherwise disposed
of by Parent within thirty-three (33) Business Days prior to the Closing
Date (except for (a) the issuance of Parent Common Stock (or any security
convertible or exchangeable into or exercisable thereof) pursuant to stock
options, units and other rights outstanding as of the date of this
45
Agreement, (b) the issuance of Parent Common Stock (or any security
convertible or exchangeable into or exercisable thereof) pursuant to stock
options, units and other rights hereafter granted pursuant to any employee
or director stock incentive plan approved by the Board of Directors of
Parent (or any committee thereof), and (c) the grant or issuance of Parent
Common Stock (or any security convertible or exchangeable into or
exercisable thereof) hereafter pursuant to any employee or director stock
incentive plan approved by the Board of Directors of Parent (or any
committee thereof)), then the Applicable Price shall mean the lesser of (i)
the Average Price or (ii) the lowest price per share received by Parent
pursuant to any such transaction or transactions.
"Assets" of a Person means all of the assets, properties, businesses and
rights of such Person of every kind, nature, character and description,
whether real, personal or mixed, tangible or intangible, absolute, accrued
or contingent, or otherwise relating to or utilized in such Person's
business, directly or indirectly, in whole or in part, whether or not
carried on the books and records of such Person, and whether or not owned
in the name of such Person or any Affiliate of such Person and wherever
located.
"Average Price" means the average of the volume weighted sales prices
per share of the Parent Common Stock on the Nasdaq National Market as
reported by Bloomberg Financial Markets (or, if not reported thereby, any
other authoritative source as the parties shall agree in writing) for the
twenty (20) consecutive full trading days in which such shares are traded
on the Nasdaq National Market ending on the third trading day, prior to,
but not including, the Closing Date. The Average Price shall be calculated
to the nearest one-hundredth of one cent.
"Beneficial Owner" has the meaning ascribed to such term under Rule
13d-3(a) of the Exchange Act.
"Business Day" means any day, other than a Saturday, Sunday or one on
which banks are authorized by Law to close in New York, New York.
"Closing Date" means the date on which the Closing occurs.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Company Common Stock" means the $0.125 par value common stock of the
Company.
"Company Insiders" shall mean those officers and directors of the
Company who are subject to the reporting requirements of Section 16(a) of
the Exchange Act and who are listed in the Section 16 Information.
"Company Restricted Stock Award" means each share of Company Common
Stock outstanding immediately prior to the Effective Time that is subject
to a repurchase option, risk of forfeiture or other condition under the
Company Stock Option Plans or any applicable restricted stock purchase
agreement or other agreement with the Company.
"Confidentiality Agreements" means those certain Confidentiality
Agreements, dated June 29, 2005, and August 1, 2005 between the Company and
Parent.
"Consent" means any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by or filing of notice to any
Person pursuant to any Material Contract, Law, Order, or Permit.
"Contribution Agreement" means the Contribution Agreement included in
the Information Documents.
"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.
"Credit Facility" means that certain $225,000,000 Credit Agreement among
the Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital, Credit Suisse First Boston, Bank of
America, N.A., LaSalle Bank National Association and the Other Lenders
Party thereto, dated as of November 26, 2002.
46
"DGCL" means the General Corporation Law of the State of
Delaware.
"Environmental Laws" means any United States federal, state or local
Laws, regulations and enforceable governmental orders relating to pollution
or protection of the environment, human health and safety, or natural
resources, including, without limitation the Comprehensive Environmental
Response Compensation and Liability Act, 42 U.S.C. sec.sec.9601 et seq.
("CERCLA"), and the Resource Conservation and Recovery Act, 42 U.S.C.
sec.sec.6901 et seq. ("RCRA").
"Hazardous Substances" means those hazardous or toxic substances,
chemicals, wastes and pollutants defined in or regulated under any
Environmental Law, including, without limitation, RCRA hazardous wastes and
CERCLA hazardous substances.
"HIPAA" means the Health Insurance Portability and Accountability Act of
1996, as amended, and the rules and regulations promulgated thereunder.
"HSR Act" means Section 7A of the ▇▇▇▇▇▇▇ Act, as added by Title II of
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder.
"Information Management Business" means the Business (as defined in the
Contribution Agreement).
"Intellectual Property" means (i) all business names, trade names,
registered and unregistered trademarks (including common law marks), trade
dress and service marks (including all U.S. federal, state, Canada,
European Union and foreign registrations with respect to any of the
foregoing, and applications for registration of any of the foregoing); (ii)
all patents (including all reissues, divisions, continuations,
continuations in part, and extensions thereof), patent applications, and
inventions and discoveries that may be patentable; (iii) all copyrights in
both published and unpublished works, whether registered (if capable of
registration in any relevant jurisdiction) or unregistered (including all
U.S. and foreign registrations and applications for registration of the
foregoing); (iv) all computer software (in both source code and object
code) (collectively, "Software"), including (A) any and all software
implementations of algorithms, models and methodologies, whether in source
code or object code, (B) databases and compilations, including any and all
data and collections of data, whether machine readable or otherwise, (C)
descriptions, flow-charts and other work product used to design, plan,
organize and develop any of the foregoing, (D) the technology supporting
any Internet site(s), and (E) all documentation, including system
documentation, user manuals and training materials, relating to any of the
foregoing; (v) all internet domain names and internet domain name
registrations; (vi) all information, without regard to form, including, but
not limited to, technical or nontechnical data, prescription claims data,
hospital claims data, patient claims data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a drawing, a
process, product plans, or a list of actual or potential customers or
suppliers which is not commonly known by or available to the public and
which information: (A) derives economic value, actual or potential, from
not being generally known to, and not being readily ascertainable by proper
means by, other Persons who can obtain economic value from its disclosure
or use; and (B) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy (collectively, "Trade Secrets"); and
(vii) all other unregistered intellectual property rights, including
know-how, confidential information, customer lists, technical
documentation, technical information, data, technology, research records,
plans, drawings, schematics, compilations, devices, formulas, designs,
prototypes, methods, techniques, processes, procedures, programs, or codes,
whether tangible or intangible.
"Joint Proxy Statement/Prospectus" means the proxy statement used by the
Company and Parent to solicit the approval of their respective stockholders
of the Transactions, which shall include the prospectus of Parent relating
to the issuance of the Parent Common Stock pursuant to the Merger.
"Knowledge" as used with respect to a Person (including references to
such Person being aware of a particular matter) means those facts that are
actually known by the chairman, president, chief financial officer, chief
accounting officer, chief operating officer, or general counsel.
47
"Litigation" means any action, suit, arbitration, cause of action,
lawsuit, claim, complaint, criminal prosecution, governmental or other
examination or investigation, audit (other than regular audits of financial
statements by outside auditors), compliance review, inspection, hearing,
administrative or other proceeding relating to or affecting a Party, its
business, its records, its policies, its practices, its compliance with
Law, its actions, its Assets.
"Material Adverse Effect" means, with respect to a Party, any event,
circumstance, change or effect that, individually or in the aggregate with
all other events, circumstances, changes and effects, is or is reasonably
likely to be materially adverse to (i) the business, financial condition or
results of operations of such Party and its Subsidiaries taken as a whole,
or (ii) the ability of such Party to consummate the Merger or the other
Transactions; provided, however, that the foregoing shall not include any
event, circumstance, change or effect resulting from (A) changes in general
economic or financial market conditions (which do not have a materially
disproportionate effect on such Party and its Subsidiaries), (B) general
changes in the industries in which such Party and its Subsidiaries operate
(which do not have a materially disproportionate effect on such Party and
its Subsidiaries), (C) changes in the trading price of the shares of common
stock of such Party between the date hereof and the Effective Time (it
being understood that any fact or development giving rise to or
contributing to such change in the trading price of the shares of common
stock of such Party may be the cause of a Material Adverse Effect), (D)
changes in Law or GAAP, (E) the direct effects of compliance with this
Agreement on the operating performance of such Party, including any
Expenses incurred by such Party in consummating the Merger or the other
Transactions, (F) the announcement of this Agreement or the Merger or any
of the other Transactions, the fulfillment of such Party's obligations
hereunder or the consummation of the Merger or the other Transactions, or
(G) any outbreak or escalation of hostilities or act of terrorism or any
declaration of war (which do not have a materially disproportionate effect
on such Party and its Subsidiaries).
"Nasdaq" means the Nasdaq Stock Market, Inc.
"Nasdaq National Market" means the National Market System of the Nasdaq
Stock Market, Inc.
"NYSE" means the New York Stock Exchange, Inc.
"Order" means any administrative decision or award, decree, injunction,
judgment, order, quasi-judicial decision or award, ruling, or writ of any
federal, state, local or foreign or other court, arbitrator, mediator,
tribunal, administrative agency, or Governmental Authority, whether
temporary, preliminary or permanent.
"Parent Common Stock" means the $0.01 par value common stock of Parent.
"Party" means any of the Company, Parent or Purchaser and "Parties"means
the Company, Parent and Purchaser.
"Permit" means any Company Permits, Parent Permits or Environmental
Permits.
"Person" means an individual, corporation, partnership, limited
partnership, limited liability company, 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.
"Registration Statement" means the Registration Statement on Form S-4,
or other appropriate form, including any pre-effective or post-effective
amendments or supplements thereto, filed with the SEC by Parent under the
Securities Act with respect to the shares of Parent Common Stock to be
issued pursuant to the Merger and which shall contain the Joint Proxy
Statement/Prospectus.
"Representative" means, with respect to any Person, such Person's
officers, directors, employees, accountants, auditors, attorneys,
consultants, legal counsel, agents, investment banker, financial advisor
and other representatives.
48
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act" means the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended,
and the rules and regulations promulgated thereunder.
"SEC" means the United States Securities and Exchange Commission.
"SEC Documents" means all forms, proxy statements, registration
statements, reports, schedules, and other documents, including all
certifications and statements required by (x) the SEC's Order dated June
27, 2002 pursuant to Section 21(a)(1) of the Exchange Act, (y) Rule 13a-14
or 15d-14 under the Exchange Act or (z) Section 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act with respect to any report that is an SEC Document, filed, or required
to be filed, by a Party or any of its Subsidiaries with any Governmental
Authority pursuant to the Securities Laws.
"Section 16 Information" shall mean information accurate in all material
respects regarding the Company Insiders, the number of shares of Company
Common Stock held by each such Company Insider and expected to be exchanged
for Parent Common Stock in the Merger.
"Securities Laws" means the Securities Act, the Exchange Act, the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, the Investment Company Act of 1940, as amended, the
Investment Advisors Act of 1940, as amended, the Trust Indenture Act of
1939, as amended, and the rules and regulations of any Governmental
Authority promulgated thereunder.
"Stock Purchase Agreement" means the Stock Purchase Agreement included
in the Information Documents pursuant to which the Company has agreed to
sell the HIS Common Stock to the Information Buyer.
"Stockholders' Meetings" means the respective meetings of the
stockholders of the Company and stockholders of Parent to be held pursuant
to Section 8.1, including any adjournment or adjournments thereof.
"Subsidiaries" or "subsidiary" of the Company, the Surviving
Corporation, Parent or any other Person means any corporation or other
entity of which shares or other ownership interests having voting power to
elect a majority of the board of directors or other Persons performing
similar functions are directly or indirectly owned by such Person.
"Tax" or "Taxes" means any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties,
capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty or addition thereto, whether disputed or not and
including any obligations to indemnify or otherwise assume or succeed to
the Tax liability of any other Person.
"Tax Law" means any Law relating to Taxes.
"Tax Return" means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule
or attachment thereto, and including any amendment thereof.
"Total Per Share Amount" means $19.50.
(b) The terms set forth below shall have the meanings ascribed thereto in
the referenced sections:
TERM PAGE
---- ----
2004 Parent Balance Sheet............. 31
2005 Balance Sheet.................... 13
409A Deadline......................... 51
Action................................ 14
Adjusted Cash Amount.................. 3
TERM PAGE
---- ----
Adjusted Exchange Ratio............... 3
Agreement............................. 1
Antitrust Division.................... 48
CERCLA................................ 60
Certificate of Merger................. 2
49
TERM PAGE
---- ----
Change in the Company Recommendation.. 47
Closing............................... 2
Company............................... 1
Company Affiliate..................... 53
Company Certificates.................. 6
Company Common Stock.................. 9
Company Compliance Plan............... 25
Company Data.......................... 22
Company Disclosure Schedule........... 8
Company Permits....................... 11
Company Preferred Stock............... 9
Company Rights........................ 24
Company Rights Agreement.............. 24
Company SEC Reports................... 12
Company Stock Awards.................. 9
Company Stock Option.................. 5
Company Stock Option Plans............ 5
Company Stockholder Approval.......... 10
Company Stockholders' Meeting......... 45
Company Triggering Event.............. 57
Competing Transaction Agreement....... 47
Current Plans......................... 50
Deferred Compensation Plans........... 51
Dissenting Shares..................... 4
Dissenting Stockholders............... 4
Effective Time........................ 2
Environmental Permits................. 24
ERISA................................. 15
ESPP.................................. 5
Exchange Act.......................... 12
Exchange Agent........................ 6
Exchange Fund......................... 6
Exchange Ratio........................ 3
Expenses.............................. 65
Federal Anti-kickback Statute......... 25
Fee................................... 66
FTC................................... 48
GAAP.................................. 12
Governmental Authority................ 11
Healthcare Information Laws........... 26
HIS................................... 1
HIS Common Stock...................... 1
Indemnified Directors/Officers........ 52
Information Buyer Termination Fee..... 66
TERM PAGE
---- ----
Information Documents................. 52
Information Restructuring............. 1
Information Sale...................... 1
IRS................................... 15
Law................................... 10
Liens................................. 19
Material Contracts.................... 25
Merger................................ 1
Multiemployer Plan.................... 16
Multiple Employer Plan................ 16
Non-U.S. Benefit Plan................. 17
Note Indenture........................ 26
Noteholders........................... 43
Notes Offer to Purchase............... 43
Notes Tender Offer.................... 43
Notes Tender Offer Documents.......... 43
Notice of Superior Proposal........... 47
Offer................................. 47
Outside Date.......................... 56
Parent Compliance Plan................ 38
Parent Disclosure Schedule............ 28
Parent Non-Voting Common Stock........ 28
Parent Permits........................ 30
Parent Plans.......................... 33
Parent Preferred Stock................ 28
Parent Rights......................... 37
Parent Rights Agreement............... 37
Parent SEC Reports.................... 30
Parent Stockholder Approval........... 28
Parent Stockholders' Meeting.......... 45
Parent Welfare Benefit Plans.......... 51
Per Share Merger Consideration........ 3
Permitted Liens....................... 19
Plans................................. 15
Prior Company Plan.................... 16
Prior Parent Plan..................... 34
Purchaser............................. 1
Purchaser Common Stock................ 3
RCRA.................................. 60
Redemption............................ 44
Securities Act........................ 12
Senior Subordinated Notes............. 26
Software.............................. 61
Stock Unit............................ 5
50
TERM PAGE
---- ----
Subsidiary............................ 8
Surviving Corporation................. 2
Trade Secrets......................... 61
Transactions.......................... 10
TERM PAGE
---- ----
WARN.................................. 17
Warrant............................... 6
Warrant Agreement..................... 6
Any singular term in this Agreement shall be deemed to include the plural,
and any plural term the singular. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed followed by the
words "without limitation."
11.2 Expenses; Effect of Termination.
(a) Except as set forth in this Section 11.2, all Expenses (as defined
below) incurred in connection with this Agreement and the Merger shall be paid
by the Party incurring such Expenses, whether or not the Merger or any other
Transaction is consummated. However, the Company and Parent shall each pay
one-half of all Expenses relating to printing, filing and mailing the
Registration Statement and the Joint Proxy Statement/Prospectus and all SEC and
other regulatory filing fees incurred in connection with the Registration
Statement and the Joint Proxy Statement/Prospectus. "Expenses", as used in this
Agreement, shall mean all reasonable out-of-pocket expenses (including, without
limitation, all reasonable fees and expenses of counsel, accountants, auditors,
investment bankers, lenders, experts and consultants to a party hereto and its
affiliates) incurred after July 1, 2005 by a Party or on its behalf in
connection with or related to the investigation, authorization, preparation,
negotiation, execution and performance of this Agreement, the preparation,
printing, filing and mailing of the Registration Statement and Joint Proxy
Statement/ Prospectus, the solicitation of stockholder proxies and all other
matters related to consummation of the Merger and the other Transactions.
(b) The Company agrees that:
(i) if Parent shall terminate this Agreement pursuant to Section
10.1(d); or
(ii) if Parent or the Company shall terminate this Agreement pursuant to
Section 10.1(b), and prior to any such termination, either (A) a Company
Triggering Event shall have occurred, or (B) (x) an announcement or bona
fide offer or proposal with respect to a Competing Transaction shall have
been made with respect to the Company and such announcement, offer or
proposal with respect to a Competing Transaction shall not have been
unconditionally withdrawn at the time of such termination, and (y) within 9
months after such termination, the Company enters into an agreement
providing for a Competing Transaction or a Competing Transaction is
consummated; or
(iii) if Parent or the Company shall terminate this Agreement pursuant
to Section 10.1(e) and at the time of the Company Stockholders' Meeting,
either (A) a Company Triggering Event shall have occurred, or (B) (x) an
announcement or bona fide offer or proposal with respect to a Competing
Transaction shall have been made with respect to the Company and such
announcement, offer or proposal with respect to a Competing Transaction
shall not have been unconditionally withdrawn at the time of the Company
Stockholders' Meeting, and (y) within 9 months the date of such termination
the Company enters into an agreement providing for a Competing Transaction
or a Competing Transaction is consummated; or
(iv) if the Company shall terminate this Agreement pursuant to Section
10.1(g); or
(v) if (A) Parent shall terminate this Agreement pursuant to Section
10.1(h) or (B) Parent or the Company shall terminate this Agreement
pursuant to Section 10.1(b) by reason of the failure to satisfy the
condition set forth in Section 9.1(f) (unless, in either case, such
termination is solely as a result of a material breach by the Information
Buyer of the Information Documents);
then the Company shall pay to Parent, simultaneously with the termination in the
case of Section 11.2(b)(iv) or, in the other cases, promptly (but in any event
no later than one business day after the first of all the
51
conditions to any of Section 11.2(b)(i), Section 11.2(b)(ii), Section
11.2(b)(iii) or Section 11.2(b)(v) shall have occurred) a fee (the "Fee") of
$26,763,750, which amount shall be payable in immediately available funds;
provided, however, if, simultaneously with the termination of this Agreement the
Company also terminates the Stock Purchase Agreement and pays the Information
Buyer a termination fee pursuant to Section 9.2(b) of the Stock Purchase
Agreement (the "Information Buyer Termination Fee"), then the Fee shall equal
$16,763,750.
(c) The Company agrees that (except as provided in Section 11.2(b)) if
either Party shall terminate this Agreement pursuant to Section 10.1(e), then
the Company shall pay to Parent promptly (but in any event no later than one
business day after the termination date) an amount equal to the amount of
Parent's Expenses, which amount shall be payable in immediately available funds;
provided that the Company shall not be liable for any amount of Parent's
Expenses in excess of $10,000,000 in the aggregate; provided, further, that any
amount paid to Parent pursuant to this Section 11.2(c) shall be credited against
any amount required to be paid by the Company pursuant to Section 11.2(b).
(d) Parent agrees that if either Party shall terminate this Agreement
pursuant to Section 10.1(f), then Parent shall pay to the Company promptly (but
in any event no later than one business day after the termination date) an
amount equal to the amount of the Company's Expenses, which amount shall be
payable in immediately available funds; provided that Parent shall not be liable
for any amount of the Company's Expenses in excess of $10,000,000 in the
aggregate.
(e) Parent agrees that if (i) either Party shall terminate this Agreement
pursuant to Section 10.1(b) by reason of Parent's failure to have or obtain
sufficient funds to consummate the Merger and (ii) all conditions to the
consummation of the Merger and the other Transactions have been satisfied or
waived by the appropriate Party, then Parent shall pay to the Company promptly
(but in any event no later than one business day after the termination date) an
amount equal to the Company's Expenses, which amount shall be payable in
immediately available funds; provided that Parent shall not be liable for any
amount of the Company's Expenses in excess of $10,000,000 in the aggregate. The
right of the Company to receive payment by Parent of the Company's Expenses
under this Section 11.2(e) shall be in addition to, and not in lieu of, any
other rights or remedies that the Company might have based upon or arising out
of the failure of Parent to have or obtain sufficient funds to consummate the
Merger.
(f) Parent agrees that if either Party shall terminate this Agreement
pursuant to Section 10.1(b) by reason of the failure of the condition described
in Section 9.1(b), then Parent shall pay to the Company promptly (but in any
event no later than one Business Day after the termination date) an amount equal
to the amount of the Company's Expenses, which amount shall be payable in
immediately available funds; provided that Purchaser shall not be liable for any
amount of the Company's Expenses in excess of $10,000,000 in the aggregate.
(g) Notwithstanding anything contained herein to the contrary, in the event
that (i) the Fee is reduced by reason of the payment of the Information Buyer
Termination Fee pursuant to Section 11.2(b) and (ii) within nine (9) months
after the date of termination of this Agreement a definitive agreement for a
Competing Transaction or a sale or other disposition of all or substantially all
of the assets of the Information Business (whether by asset sale, stock sale,
merger or otherwise) with or involving Wolters Kluwer N.V. or any of its
Affiliates is entered into or consummated, then the Company shall pay to Parent,
simultaneously with the earlier of the execution of such definitive agreement or
such consummation, an amount equal to the Information Buyer Termination Fee,
which amount shall be payable in immediately available funds.
(h) Each of the Company and Parent acknowledges that the agreements
contained in this Section 11.2 are an integral part of the Transactions, and
that, without these agreements, the other Party would not enter into this
Agreement; accordingly, if either Party fails to pay in a timely manner any of
the amounts due pursuant to this Section 11.2, and, in order to obtain such
payment, the other Party makes a claim that results in a judgment against the
first Party, the first Party shall pay to the other Party its reasonable fees
and expenses (including reasonable attorneys' fees and expenses) in connection
with such suit, together with interest on the amounts due from each date for
payment until the date of payment at the prime rate of Bank of America, N.A. in
effect on the date such payment was required to be made.
52
11.3 Entire Agreement.
Except as otherwise expressly provided herein, this Agreement (including
the documents and instruments referred to herein) constitutes the entire
agreement between the Parties with respect to the Transactions contemplated
hereunder and supersedes all prior arrangements or understandings with respect
to the Transactions contemplated hereunder, written or oral (except, as to
Section 8.7(b), for the Confidentiality Agreements).
11.4 Amendments.
To the extent permitted by Law, this Agreement may be amended by a
subsequent writing signed by each of the Parties upon the approval of each of
the Parties, whether before or after stockholder approval of this Agreement has
been obtained.
11.5 Waivers.
At any time prior to the Effective Time, any Party may (a) extend the time
for the performance of any obligation or other act of any other Party, (b) waive
any inaccuracy in the representations and warranties of any other Party
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any agreement of any other Party or any condition to its own
obligations contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the Party or Parties to be bound
thereby.
11.6 Assignment.
This Agreement shall not be assigned (whether pursuant to a merger, by
operation of Law or otherwise), except that Parent and Purchaser may assign all
or any of their rights and obligations hereunder to any affiliate of Parent;
provided that no such assignment shall relieve the assigning party of its
obligations hereunder if such assignee does not perform such obligations.
11.7 Parties in Interest.
This Agreement shall be binding upon and inure solely to the benefit of
each Party, 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 Sections 8.11 and
8.12 (which is intended to be for the benefit of the Persons covered thereby and
may be enforced by such Persons).
11.8 Notices.
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage pre-paid, or by courier
or overnight carrier, to the Persons at the addresses set forth below (or at
such other address as may be provided hereunder), and shall be deemed to have
been delivered as of the date so delivered:
The Company: NDCHealth Corporation
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Copy to Counsel: ▇▇▇▇▇▇ & Bird LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
53
Parent or Purchaser: Per-Se Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Copy to Counsel: King & Spalding LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
11.9 Governing Law; Venue; Waiver of Jury Trial.
Regardless of any conflict of law or choice of law principles that might
otherwise apply, the Parties agree that this Agreement shall be governed by and
construed in all respects in accordance with the laws of the State of
Delaware.
The Parties all expressly agree and acknowledge that the State of
Delaware has a
reasonable relationship to the Parties and/or this Agreement. The Parties hereby
irrevocably submit to the jurisdiction of the courts of the State of
Delaware
and the Federal courts of the United States of America located in the State of
Delaware solely in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in this Agreement,
and in respect of the Transactions, and hereby waive, and agree not to assert,
as a defense in any Litigation for the interpretation or enforcement of this
Agreement or of any such document, that it is not subject thereto or that such
Litigation may not be brought or is not maintainable in said courts or that the
venue thereof may not be appropriate or that this Agreement or any such document
may not be enforced in or by such courts, and the Parties hereto irrevocably
agree that all claims with respect to such Litigation shall be heard and
determined in such a Delaware State or Federal court. The Parties hereby consent
to and grant any such court jurisdiction over such Parties solely for such
purpose and over the subject matter of such dispute and agree that mailing of
process or other papers in connection with any such Litigation in the manner
provided in this Section 11.9 or in such other manner as may be permitted by Law
shall be valid and sufficient service thereof. Each Party acknowledges and
agrees that any controversy which may arise under this Agreement is likely to
involve complicated and difficult issues, and therefore each such Party hereby
irrevocably and unconditionally waives any right such Party may have to a trial
by jury in respect of any Litigation directly or indirectly arising out of or
relating to this Agreement, or the Transactions. Each Party certifies and
acknowledges that (i) no Representative of any other Party has represented,
expressly or otherwise, that such other Party would not, in the event of
Litigation, seek to enforce the foregoing waiver, (ii) each Party understands
and has considered the implications of this waiver, (iii) each Party makes this
waiver voluntarily, and (iv) each Party has been induced to enter into this
Agreement by, among other things, the mutual waivers and certifications in this
Section 11.9.
11.10 Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
11.11 Captions; Articles and Sections.
The captions contained in this Agreement are for reference purposes only
and are not part of this Agreement. Unless otherwise indicated, all references
to particular Articles or Sections shall mean and refer to the referenced
Articles and Sections of this Agreement.
11.12 Interpretations.
Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against any Party, whether under any rule of construction
or otherwise. No Party to this Agreement shall be considered the draftsman. The
Parties acknowledge and agree that this Agreement has been reviewed,
54
negotiated, and accepted by all Parties and their attorneys and shall be
construed and interpreted according to the ordinary meaning of the words used so
as fairly to accomplish the purposes and intentions of all Parties hereto.
11.13 Enforcement of Agreement.
The Parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement was not performed in accordance
with its specific terms or was otherwise breached. It is accordingly agreed that
the Parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
11.14 Severability.
Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
[SIGNATURES ON NEXT PAGE]
55
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by its duly authorized officers as of the day and year
first above written.
NDCHEALTH CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
Its: Executive Vice President,
General Counsel,
and Secretary
PER-SE TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Its: Chairman, Chief Executive
Officer and President
ROYAL MERGER CO.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Its: Chairman, Chief Executive
Officer and President
56