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AGREEMENT AND PLAN
OF MERGER
AMONG
AFFILIATED COMPUTER SERVICES, INC.,
ACS ACQUISITION CORPORATION,
AND
BRC HOLDINGS, INC.
OCTOBER 19, 1998
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AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
PAGE
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RECITALS
ARTICLE I The Tender Offer
1.1. The Tender Offer. . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2. Company Actions . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.3. Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE II The Merger
2.1. The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.2. Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.3. Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . .5
2.4. Certificate of Incorporation. . . . . . . . . . . . . . . . . . . . .5
2.5. Bylaws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.6. Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.7. Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.8. Conversion of the Shares. . . . . . . . . . . . . . . . . . . . . . .6
2.9. Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.10. Conversion of the Common Stock of
the Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
2.11. Payment for Shares. . . . . . . . . . . . . . . . . . . . . . . . . .7
2.12. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
ARTICLE III Representations and Warranties
of the Company
3.1. Organization and Qualification. . . . . . . . . . . . . . . . . . . .8
3.2. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
3.3. Authorized Capital. . . . . . . . . . . . . . . . . . . . . . . . . 10
3.4. Corporate Authorization . . . . . . . . . . . . . . . . . . . . . . 10
3.5. Approvals; No Violations. . . . . . . . . . . . . . . . . . . . . . 10
3.6. SEC Filings; Financial Statements . . . . . . . . . . . . . . . . . 11
3.7. Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . . . 11
3.8. Compliance with Applicable Law. . . . . . . . . . . . . . . . . . . 12
3.9. Termination, Severance, and
Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . 12
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3.10. Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.11. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.12. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.13. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 14
3.14. Voting Requirements . . . . . . . . . . . . . . . . . . . . . . . . 16
3.15. Finders and Investment Bankers; Transaction Expenses. . . . . . . . 16
3.16. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.17. Title to Properties; Entire Business. . . . . . . . . . . . . . . . 16
3.18. Intellectual Property Rights. . . . . . . . . . . . . . . . . . . . 16
3.19 Largest Customers . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.20 Year 2000 Compliance. . . . . . . . . . . . . . . . . . . . . . . . 17
3.21 Certain Material Contract . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IV Representations and Warranties of the Parent
and the Purchaser
4.1. Organization and Qualification. . . . . . . . . . . . . . . . . . . 17
4.2. Corporate Authorization . . . . . . . . . . . . . . . . . . . . . . 18
4.3. Approvals; No Violations. . . . . . . . . . . . . . . . . . . . . . 18
4.4. No Prior Activities . . . . . . . . . . . . . . . . . . . . . . . . 18
4.5. Information Supplied. . . . . . . . . . . . . . . . . . . . . . . . 19
4.6. Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE V Covenants
5.1. Conduct of Business of the Company. . . . . . . . . . . . . . . . . 19
5.2. Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.3. Action of Stockholders of the Company;
Voting and Disposition of the Shares. . . . . . . . . . . . . . . . 22
5.4. Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . 23
5.5. Notification of Certain Matters . . . . . . . . . . . . . . . . . . 23
5.6. Access to Information . . . . . . . . . . . . . . . . . . . . . . . 23
5.7. Public Announcements. . . . . . . . . . . . . . . . . . . . . . . . 25
5.8. Officers' and Directors' Indemnification. . . . . . . . . . . . . . 25
5.9. Other Actions by the Company. . . . . . . . . . . . . . . . . . . . 25
5.10. Available Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VI Conditions to Consummation of the Merger
6.1. Stockholder Approval. . . . . . . . . . . . . . . . . . . . . . . . 26
6.2. No Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.3. Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.4. Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . 26
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ARTICLE VII Termination; Amendment; Waiver
7.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.2. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . 28
7.3. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.4. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.5. Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VIII Miscellaneous
8.1. Survival of Representations, Warranties,
and Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.2. Brokerage Fees and Commissions. . . . . . . . . . . . . . . . . . . 30
8.3. Entire Agreement; Assignment. . . . . . . . . . . . . . . . . . . . 31
8.4. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.5. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.7. Specific Performance. . . . . . . . . . . . . . . . . . . . . . . . 32
8.8. Other Potential Bidders . . . . . . . . . . . . . . . . . . . . . . 33
8.9. Descriptive Headings; References. . . . . . . . . . . . . . . . . . 34
8.10. Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . 34
8.11. Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.12. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.13. Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.14. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . 34
Annex A Certain Conditions
Annex B-1 List of Those Signing the Stock Tender Agreement
Annex B-2 Stock Tender Agreement
Schedules [Note: Schedules to this Agreement have been omitted from this
filing but descriptions of such Schedules may be found in the
Agreement where referred to.]
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "AGREEMENT") dated as of October 19,
1998, by and among AFFILIATED COMPUTER SERVICES, INC., a Delaware corporation
(the "PARENT"), ACS ACQUISITION CORPORATION, a Delaware corporation and a
wholly-owned subsidiary of the Parent (the "PURCHASER"), and BRC HOLDINGS,
INC., a Delaware corporation (the "COMPANY").
RECITALS
The Boards of Directors of the Parent and the Company have unanimously
determined that it is in the best interests of the stockholders of their
respective corporations for the Purchaser to acquire all the outstanding
common stock, par value $.10 per share, of the Company (the "SHARES").
The parties intend to effect such acquisition through a tender offer on
the terms described below, followed by a merger of the Company with the
Purchaser on the terms described below (the "MERGER").
THEREFORE, in consideration of the foregoing, the mutual covenants
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which all parties hereby acknowledge, the parties
agree as follows:
ARTICLE I
THE TENDER OFFER
1.1 THE TENDER OFFER. (a) Provided that this Agreement has not been
terminated in accordance with ARTICLE VII and none of the events referred to
in ANNEX A (other than the events referred to in CLAUSES (i) and (ii) of the
second paragraph of ANNEX A and CLAUSE (j) of ANNEX A) has occurred or is
existing, within five business days of the date of this Agreement, the
Purchaser will commence a tender offer (the "OFFER"), subject to the Minimum
Condition described below, to purchase a total of at least 8,704,238 Shares
(which will represent not less than 51% of the outstanding Shares on a fully
diluted basis) at a price of $19.00 per Share (as such amount may be
increased in accordance with the terms of this Agreement, the "PER SHARE
AMOUNT") net to the seller in cash. The Purchaser agrees to accept for
payment a total of at least 8,704,238 Shares validly tendered pursuant to the
Offer as soon as legally permissible, and to pay for all such Shares as
promptly as practicable, upon the terms and subject to the conditions of the
Offer, as it may be revised as permitted by this Agreement. The obligation
of Purchaser to commence the Offer will be subject only to conditions set
forth in ANNEX A, and the obligation of Purchaser to accept for payment,
purchase, and pay for the Shares tendered pursuant to the Offer will be
subject to such conditions and to the further condition that 8,704,238 Shares
have been validly tendered and not withdrawn prior to the expiration date of
the offer (the "MINIMUM CONDITION"). If the Minimum Condition is not
satisfied on any Expiration Date of the Offer, the Purchaser may, in
Purchaser's discretion, extend the Offer for a period or periods not to
exceed, in the aggregate, ten business days. The Purchaser specifically
reserves the right to increase the price per share payable in the
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Offer, to extend the expiration date of the Offer (unless, after January 31,
1999, all conditions to the Offer listed on ANNEX A are fulfilled), and to
make any other changes in the terms and conditions of the Offer (provided
that, unless previously approved by the Company in writing, no change may be
made that decreases the price per Share payable in the Offer, that changes
the form of consideration to be paid in the Offer, that reduces the minimum
number of Shares to be purchased in the Offer, that imposes conditions to the
Offer in addition to those set forth in ANNEX A, or that broadens the scope
of such conditions). Notwithstanding the foregoing, Purchaser (i) shall
extend the Offer for any period required by any rule, regulation or
interpretation of the Securities and Exchange Commission (the "SEC") or the
staff thereof applicable to the Offer, and (ii) may, without the consent of
the Company, extend the Offer for an aggregate period of not more than 10
business days beyond the latest applicable date that would otherwise be
permitted under clause (i) of this sentence if, as of such date, all of the
offer conditions are satisfied or waived by Purchaser, but the number of
Shares validly tendered and not withdrawn pursuant to the Offer is less than
90% of the then outstanding Shares on a fully diluted basis. The parties
agree that the conditions set forth in ANNEX A are for the sole benefit of
the Purchaser and may be asserted by the Purchaser regardless of the
circumstances giving rise to any such condition (including any action or
inaction by the Purchaser or the Parent, if such action or inaction by the
Purchaser or the Parent is not taken knowingly or intentionally for the
purpose of breaking the Minimum Condition or one or more of the conditions
contained in ANNEX A) or may be waived by the Purchaser, in whole or in part,
at any time and from time to time, in its sole discretion. The failure by
the Purchaser at any time to exercise any of the foregoing rights will not be
deemed a waiver of any such right, the waiver of any such right with respect
to particular facts and circumstances will not be deemed a waiver with
respect to other facts or circumstances, and each such right will be deemed
an ongoing right that may be asserted at any time and from time to time. Any
good faith determination by the Purchaser with respect to any of the
foregoing conditions (including, without limitation, the satisfaction of such
conditions) will be final and binding on all parties. The Per Share Amount
will be paid net to the seller in cash, less any required withholding taxes,
on the terms and subject to the conditions of the Offer. If at the time of
the Expiration Date (or at the expiration of a proper extension), the Company
is purchasing Shares pursuant to the Offer and if at such time a greater
number of Shares than 8,704,238 Shares has been tendered into the Offer and
not withdrawn, then 8,704,238 Shares will be purchased on a pro rata basis.
The Company agrees that no Shares held by the Company or any of its
subsidiaries will be tendered in the Offer. The Company hereby consents to
the Offer and represents that (a) its Board of Directors, at a meeting duly
called and held (i) determined at such time that the Offer and the Merger,
taken together, are fair to the Company and its stockholders and in the best
interests of the holders of the Shares; (ii) resolved at such time to
recommend acceptance of the Offer and approval and adoption of this
Agreement, the Merger, and the transactions contemplated by this Agreement by
the stockholders of the Company prior to such purchase; and (iii) irrevocably
approved the Offer, the Merger, this Agreement, and the transactions
contemplated by this Agreement for the purposes of Section 203 of the
Delaware General Corporation Law (the "DGCL") and any other state or federal
statute, regulation, or rule that the Purchaser has identified, or that is
known after reasonable inquiry, to the Company requiring prior approval by
the Board of Directors of the Company of this Agreement, the Merger, the
Offer, or the other transactions contemplated by this Agreement and (b)
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation ("DLJ"), the Company's
financial advisor (the "ADVISOR"), has delivered to the
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Board of Directors of the Company its opinion that, subject to the
limitations and qualifications set forth in such opinion, the Per Share
Amount is fair from a financial point of view to the holders of the Shares.
(b) As promptly as practicable on the date of the commencement of the
Offer, the Parent and the Purchaser will file with the SEC a Tender Offer
Statement on Schedule 14D-1 with respect to the Offer under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), which will (i) reflect
the execution and delivery of this Agreement; (ii) set forth the Offer as
provided for in this Agreement; and (iii) contain or incorporate by reference
a form of letter of transmittal and summary advertisement.
(c) The Purchaser will promptly disseminate the offer to purchase
referred to in SECTION 1.1(b) (as amended pursuant to this Agreement, the
"OFFER TO PURCHASE" and, collectively with all other schedules and exhibits
required to be filed with the SEC, the "OFFER DOCUMENTS") to the holders of
the Shares, reflecting the terms set forth in this Agreement. The Offer
Documents will contain the recommendation of the Board of Directors of the
Company that the holders of the Shares accept the Offer as described in
SECTION 1.1(a) and may make reference to the opinion of the Advisor referred
to in SECTION 1.1(a) and include or incorporate such opinion. The Purchaser
and the Company, with respect to written information supplied by the Company
specifically for use in the Offer Documents or based upon information
pertaining to the Company in the Company Reports (as defined in SECTION 3.6),
agree promptly to correct any information in the Offer Documents that becomes
false or misleading in any material respect. Subject to SECTION 1.2(b), the
Purchaser further agrees to take all steps to cause the Offer Documents to be
disseminated to the holders of Shares, as and to the extent required by
applicable law. The Company and its counsel will be given an opportunity to
review and comment on the Offer Documents prior to their being filed with the
SEC. The Parent and the Purchaser will promptly provide to the Company any
written comments they receive from the SEC with respect to the Offer
Documents.
1.2 COMPANY ACTIONS. (a) The Company hereby agrees to file with the
SEC as soon as practicable on or after the date of commencement of the Offer,
and promptly mail to its stockholders, a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with all schedules, amendments, and
supplements, the "SCHEDULE 14D-9") containing the recommendations of the
Board of Directors of the Company referred to in SECTION 1.1 (subject to the
right of the Board of Directors of the Company to withdraw such
recommendations if it is obligated to do so by its fiduciary obligations
under applicable law) and the opinion of the Advisor referred to in SECTION
1.1(a). The Purchaser and its counsel will be given an opportunity to review
and comment on the Schedule 14D-9 prior to its being filed with the SEC. The
Company will promptly provide to the Parent and the Purchaser any written
comments it receives from the SEC with respect to the Schedule 14D-9.
(b) The Company has been advised that the persons named on ANNEX B-1
have entered into the Stock Tender Agreement in the form of ANNEX B-2 (the
"STOCK TENDER AGREEMENT"). The Schedule 14D-9, at the time it is first
published, disseminated, or mailed to the stockholders of the Company, will
not contain any untrue statement of a material fact or omit
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to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading. The Company agrees
promptly to take all steps necessary to cause the Schedule 14D-9 to be
corrected to the extent requested by the Parent to reflect any change in
information concerning the Parent, the Purchaser, or the Offer, and, as
corrected, to be filed with the SEC and disseminated to the stockholders of
the Company, as and to the extent required by applicable law.
(c) In connection with the Offer, the Company will promptly furnish the
Purchaser with mailing labels, security position listings, and any available
listing or computer files containing the names and addresses of the record
holders of Shares as of the most recent practicable date and will furnish the
Purchaser with such information and assistance (including updated lists of
security position listings and listing or computer files) as the Purchaser or
its agents may reasonably request in order to communicate the Offer to the
record and beneficial holders of Shares. Subject to applicable law and
except for such steps as are necessary to disseminate the Offer Documents,
the Purchaser and its affiliates will hold in confidence the information
contained in any such labels, listings, and files, will use such information
only in connection with the Offer and the Merger, and, if this Agreement is
terminated, will deliver to the Company all copies of such information in its
possession.
1.3 BOARD OF DIRECTORS. (a) Effective upon the payment by the
Purchaser for Shares pursuant to the Offer, the Purchaser will be entitled to
designate that number of directors of the Company, rounded up to the next
whole number, that equals the product of (x) the total number of directors on
the Board of Directors (giving effect to the election or appointment of any
additional directors pursuant to this SECTION 1.3) and (y) the percentage
that the number of Shares on a fully diluted basis owned by the Parent and
the Purchaser (including Shares accepted for payment) bears to the total
number of outstanding Shares. The Board of Directors of the Company will at
all relevant times be composed of a sufficient number of directors so that
the right of the Purchaser under this SECTION 1.3(a) and the right of the
Company under SECTION 1.3(b) to have at least 2 Continuing Directors (as
defined in SECTION 1.3(b)) will not be impaired. The Company will at such
time cause the designees of the Purchaser to be elected to or appointed by
the Board of Directors, including, without limitation, increasing the number
of directors, amending its bylaws, using its reasonable best efforts to
obtain resignations of incumbent directors, and, to the extent necessary,
filing with the SEC and mailing to its stockholders the information required
by Section 14(f) of the Exchange Act and the rules promulgated thereunder, as
promptly as possible. The Parent and the Purchaser will supply any
information with respect to themselves and their respective nominees,
officers, directors, and affiliates required by Section 14(f) of the Exchange
Act and such rules to the Company. Upon written request by the Purchaser,
the Company will use its reasonable best efforts to cause the designees of
the Purchaser to constitute the same percentage of representation as is on
the Board of Directors after giving effect to this SECTION 1.3 on (i) each
committee of the Board of Directors; (ii) the board of directors of each
subsidiary of the Company; and (iii) each committee of such subsidiaries'
boards of directors.
(b) Following the election or appointment of the designees of the
Purchaser pursuant to this SECTION 1.3 and prior to the Effective Time, any
amendment or termination of this Agreement, extension for the performance of
the obligations or other acts of the Parent and the
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Purchaser, or waiver of the rights of the Company under this Agreement, will
(if and to the extent that there are any then serving directors of the type
specified below) require the approval of a majority of the then serving
directors of the Company who are directors on the date of this Agreement (the
"CONTINUING DIRECTORS"). Prior to the Effective Time, there will be no fewer
than 2 Continuing Directors. If, prior to the Effective Time, the number of
Continuing Directors is one, such remaining Continuing Director will be
entitled to appoint directors to fill the vacancies created and such
appointees will be Continuing Directors for the purposes of this Agreement.
The Continuing Directors may not be removed prior to the Effective Time.
ARTICLE II
THE MERGER
2.1 THE MERGER. Upon the terms and subject to the conditions of this
Agreement and in accordance with the DGCL, the Purchaser will be merged with
and into the Company as soon as practicable following the satisfaction or
waiver of the conditions set forth in ARTICLE VI. Following the Merger, the
Company will continue as the surviving corporation (the "SURVIVING
CORPORATION") and the separate corporate existence of the Purchaser will
cease. At the election of the Parent or the Purchaser, any one or more
direct or indirect wholly-owned subsidiaries of the Parent incorporated under
the laws of the State of Delaware may be substituted for the Purchaser as a
constituent corporation in the Merger. As used in this Agreement, the term
"Purchaser" refers to any such substituted corporation.
2.2 EFFECTIVE TIME. The Merger will be consummated by filing with the
Delaware Secretary of State a certificate of merger or certificate of
ownership and merger in accordance with the DGCL (the "CERTIFICATE OF
MERGER") in such form as is required by, and executed in accordance with, the
relevant provisions of the DGCL, and such other documents as may be required
by the provisions of the DGCL. The Merger will be effective at the time of
such filing or at such later time as is specified in the Certificate of
Merger in accordance with the provisions of the DGCL. Such time of
effectiveness is referred to as the "EFFECTIVE TIME."
2.3 EFFECTS OF THE MERGER. The Merger will have the effects set forth
in Section 259 of the DGCL. As of the Effective Time, the Company will be a
wholly-owned direct or indirect subsidiary of the Parent. Without limiting
the foregoing, at the Effective Time, all properties, rights, privileges,
powers, and franchises of the Company and the Purchaser will vest in the
Surviving Corporation and all debts, liabilities, obligations, and duties of
the Company and the Purchaser will become the debts, liabilities,
obligations, and duties of the Surviving Corporation.
2.4 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
the Company as in effect at the Effective Time will be the Certificate of
Incorporation of the Surviving Corporation until amended in accordance with
applicable law, except that at the election of the Purchaser, the Company
will amend its Certificate of Incorporation immediately prior to the
Effective Time to conform as nearly as possible to the Certificate of
Incorporation of the Purchaser.
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2.5 BYLAWS. The Bylaws of the Purchaser as in effect immediately prior
to the Effective Time will be the Bylaws of the Surviving Corporation until
amended in accordance with applicable law.
2.6 DIRECTORS. The directors of the Purchaser at the Effective Time
will be the initial directors of the Surviving Corporation and will hold
office from the Effective Time until their respective successors are duly
elected or appointed and qualified.
2.7 OFFICERS. The officers of the Company at the Effective Time will
be the initial officers of the Surviving Corporation and will hold office
from the Effective Time until their respective successors are duly elected or
appointed and qualified.
2.8 CONVERSION OF THE SHARES. At the Effective Time:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than (i) Shares held by the Parent, the Purchaser, the
Company, or any direct or indirect subsidiary of the Parent or the Company
and (ii) any Dissenting Shares (as defined in SECTION 2.9)) will, without
further action by the Parent, the Purchaser, or the Company, automatically be
canceled and extinguished and converted into the right to receive in cash the
Per Share Amount (the "MERGER CONSIDERATION") without interest, less any
required withholding taxes, upon surrender of the certificate formerly
representing such Share in accordance with SECTION 2.11.
(b) Each Share issued and outstanding immediately prior to the
Effective Time that is owned or held by the Parent, the Purchaser, the
Company, or any direct or indirect subsidiary of Parent or the Company will
be canceled and retired and cease to exist, without any conversion, and no
payment will be made with respect to any such Share.
2.9 DISSENTING SHARES. (a) Notwithstanding anything in this Agreement
to the contrary, Shares that are issued and outstanding immediately prior to
the Effective Time and that are held by stockholders that have complied in
all respects with the requirements of the DGCL concerning the right of a
stockholder of the Company to dissent from the Merger and to require an
appraisal of such Shares in the manner provided in the DGCL, if applicable,
and that, as of the Effective Time, have not effectively withdrawn or lost
such right to appraisal (the "DISSENTING SHARES") will not be converted into
or represent a right to receive the Merger Consideration pursuant to SECTION
2.8, but the holders of such Dissenting Shares will be entitled only to such
rights as are granted under Section 262 of the DGCL. Each holder of
Dissenting Shares that becomes entitled to payment for such Shares pursuant
to such section of the DGCL will receive payment for such Dissenting Shares
from the Surviving Corporation in accordance with the DGCL; PROVIDED,
HOWEVER, that to the extent that any holder or holders of Shares have failed
to establish the entitlement to appraisal rights as provided in Section 262
of the DGCL, such holder or holders (as the case may be) will forfeit the
right to appraisal of such Shares and each such Share will thereupon be
deemed to have been converted, as of the Effective Time, into and represent
the right to receive payment from the Surviving Corporation of the Merger
Consideration, without interest, as provided in SECTION 2.8.
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(b) The Company will give the Parent and the Purchaser (i) prompt
notice of any written demands for appraisal, withdrawals of demands for
appraisal, and any other instrument served pursuant to Section 262 of the
DGCL received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under
Section 262 of the DGCL. The Company will not, except with the express
written consent of the Parent, voluntarily make any payment with respect to
any demands for appraisal or settle or offer to settle any such demands.
2.10 CONVERSION OF THE COMMON STOCK OF THE PURCHASER. Each share of the
common stock of the Purchaser issued and outstanding immediately prior to the
Effective Time will, by virtue of the Merger and without any action on the
part of the holder of such stock, be converted into and represent one validly
issued, fully paid, and nonassessable share of common stock, par value $.10
per share, of the Surviving Corporation.
2.11 PAYMENT FOR SHARES. (a) Prior to the Effective Time, the Purchaser
will appoint a bank or trust company reasonably acceptable to the Company as
agent for the holders of Shares (the "PAYING AGENT") to receive and disburse
the cash to which holders of Shares become entitled pursuant to SECTION 2.8.
At the Effective Time, the Purchaser or the Parent will provide the Paying
Agent with sufficient cash to allow the Merger Consideration to be paid by
the Paying Agent for each Share then entitled to receive the Merger
Consideration (the "PAYMENT FUND").
(b) Promptly after the Effective Time, the Purchaser or the Parent will
cause the Paying Agent to mail to each record holder immediately prior to the
Effective Time of an outstanding certificate or certificates representing
Shares that as of the Effective Time represent the right to receive the
Merger Consideration (the "CERTIFICATES"), a form of letter of transmittal
(which will specify that delivery will be effected, and risk of loss and
title to the Certificates will pass, only upon proper delivery of the
Certificates to the Paying Agent) and instructions for use in effecting the
surrender of the Certificates for payment. Upon surrender to the Paying
Agent of a Certificate, together with such letter of transmittal duly
executed and completed in accordance with its instructions and such other
documents as may be requested, the holder of such Certificate will be
entitled to receive in exchange for such Certificate, subject to any required
withholding of taxes, the Merger Consideration and such Certificate will
forthwith be canceled. No interest will be paid or accrued on the Merger
Consideration upon the surrender of the Certificates. If payment or delivery
is to be made to a person other than the person in whose name the Certificate
surrendered is registered, it will be a condition of payment or delivery
that the Certificate so surrendered be properly endorsed, with signature
properly guaranteed, or otherwise be in proper form for transfer and that the
person requesting such payment or delivery pay any transfer or other taxes
required by reason of the payment or delivery to a person other than the
registered holder of the Certificate surrendered or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is
not applicable. Until surrendered in accordance with the provisions of this
SECTION 2.11, each Certificate (other than Certificates held by persons
referred to in SECTION 2.8(a)(i) and (ii)) will represent for all purposes
only the right to receive the Merger Consideration, without interest and
subject to any required withholding of taxes. Notwithstanding the foregoing,
neither the Paying Agent nor any party to this Agreement will be
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liable to a holder of Shares for any Merger Consideration delivered to a
public official pursuant to applicable abandoned property, escheat, or
similar laws.
(c) Promptly following the date that is six months after the Effective
Time, the Paying Agent will return to the Surviving Corporation all cash,
certificates, and other property in its possession that constitute any
portion of the Payment Fund, and the duties of the Paying Agent will
terminate. Thereafter, each holder of a Certificate formerly representing a
Share may surrender such Certificate to the Surviving Corporation and
(subject to applicable abandoned property, escheat, and similar laws) receive
in exchange therefor the Merger Consideration without any interest. Neither
the Parent, the Purchaser, nor the Surviving Corporation will be liable to
any holder of Shares for any amount paid to a public official pursuant to
applicable abandoned property, escheat, or similar laws. If Certificates are
not surrendered prior to midnight on the fourth anniversary of the Effective
Time, unclaimed amounts of the Payment Fund will, to the extent permitted
under applicable law, become the property of the Surviving Corporation.
Notwithstanding the foregoing, the Surviving Corporation will be entitled to
receive from time to time all interest or other amounts earned with respect
to the Payment Fund as such amounts accrue or become available.
(d) Any portion of the Payment Fund for which rights to dissent have
been perfected will be returned to the Surviving Corporation upon demand.
(e) After the Effective Time there will be no registration of transfers
on the stock transfer books of the Surviving Corporation of the Shares that
were outstanding immediately prior to the Effective Time.
2.12 CLOSING. Upon the terms and subject to the conditions of this
Agreement, as soon as practicable after all the conditions to the obligations
of the parties to effect the Merger under ARTICLE VI have been satisfied or
waived, the Company and the Purchaser will (a) file with the Secretary of
State of Delaware the Certificate of Merger and (b) take all such other and
further actions as may be required by law to make the Merger effective.
Contemporaneous with the filing referred to in this SECTION 2.12, a closing
(the "CLOSING") will be held at the offices of ▇▇▇▇▇▇ & ▇▇▇▇, L.L.P., ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ or at such other location as the
parties to this Agreement may establish for the purpose of confirming all the
foregoing. The date and the time of such Closing are referred to as the
"CLOSING DATE."
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent and the Purchaser that:
3.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Delaware and has the requisite corporate power and authority and any
necessary governmental authority to own, operate, and lease its properties
and assets and to carry on its business as it is now being conducted, except
for failures to have such power and authority as is not reasonably expected
to
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result in a Company Material Adverse Effect (as defined below). The Company
is duly qualified or licensed to do business and is in good standing in each
jurisdiction where the character of its properties owned or leased or the
nature of its activities makes such qualification or licensing necessary,
except for failures to be so qualified or licensed and in good standing as is
not, individually or in the aggregate, reasonably expected to result in a
Company Material Adverse Effect. Copies of the Certificate of Incorporation
and Bylaws of the Company, including all amendments, have been delivered to
the Parent and the Purchaser and such copies are accurate and complete. The
Certificate of Incorporation and Bylaws of the Company are in full force and
effect and the Company is not in default of the performance, observation, or
fulfillment of any provision of its Certificate of Incorporation or Bylaws.
For the purposes of this Agreement, "COMPANY MATERIAL ADVERSE EFFECT" means
any change or effect, other than a change or effect involving MatriDigm
Corporation, that, individually or when taken together with all such other
changes or effects, is reasonably expected to be materially adverse to the
condition (financial or other), business, operations, properties, assets,
liabilities, prospects, or results of operations of the Company and its
subsidiaries, taken as a whole.
3.2 SUBSIDIARIES. The Company is, directly or indirectly, the record
and beneficial owner of all the outstanding shares of capital stock of each
of its subsidiaries (other than directors' qualifying shares), there are no
proxies or voting agreements with respect to any such shares, and no equity
security of any of its subsidiaries is or may become required to be issued by
reason of any options, warrants, scrip, rights to subscribe to, calls, or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any capital stock of any
subsidiary, and there are no contracts, commitments, understandings, or
arrangements by which any subsidiary is bound to issue additional shares of
its capital stock or securities convertible into or exchangeable for such
shares. All such shares directly or indirectly owned by the Company are
owned by the Company or a wholly owned subsidiary, free and clear of any
claim, lien, encumbrance, or agreement. Each subsidiary of the Company is a
corporation duly organized, validly existing, and in good standing under the
laws of its jurisdiction of incorporation and has the requisite corporate
power and authority and any necessary governmental authority to own, operate,
or lease its properties and assets and to carry on its business as it is now
being conducted, except for failures as are not, individually or in the
aggregate, reasonably expected to result in a Company Material Adverse
Effect. Each subsidiary of the Company is duly qualified or licensed to do
business and is in good standing in each jurisdiction where the character of
its properties owned or leased or the nature of its activities makes such
qualification or licensing necessary, except for failures to be so qualified,
licensed, or in good standing as are not, individually or in the aggregate,
reasonably expected to result in a Company Material Adverse Effect. Copies
of the charter documents, bylaws, or equivalent organizational documents of
each subsidiary of the Company have been delivered to the Parent and are
accurate and complete. Neither the Company nor any subsidiary of the Company
(a) beneficially owns any material equity interests in any entities that are
not subsidiaries of the Company or (b) is party to any material joint
venture, partnership, or similar arrangement other than its joint venture
with ▇▇▇▇▇ Systems, Inc. and its interest in the United Records joint venture.
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3.3 AUTHORIZED CAPITAL. The authorized capital stock of the Company
consists solely of 30,000,000 shares of common stock, $.10 par value per
share, of which 13,738,144 shares were outstanding as of September 30, 1998,
and 2,000,000 shares of preferred stock, $10.00 par value per share, of which
no shares are outstanding. All of the outstanding Shares have been duly
authorized and are validly issued, fully paid, nonassessable, and free of
preemptive rights. There are outstanding options to purchase up to 3,328,989
Shares. Except as set forth above or on SCHEDULE 3.3 and there are no
preemptive rights nor any outstanding subscriptions, options, warrants,
rights, convertible securities, or other agreements or commitments of any
character relating to the issued or unissued capital stock or other
securities of the Company or any of its subsidiaries. There are no voting
trusts or other understandings to which the Company or any of its
subsidiaries is a party with respect to the voting capital stock of the
Company or any of its subsidiaries.
3.4 CORPORATE AUTHORIZATION. The Company has the full corporate power
and authority to execute and deliver this Agreement and, subject to any
necessary stockholder approval of the Merger, to consummate the transactions
contemplated by this Agreement. The execution, delivery, and performance by
the Company of this Agreement and the consummation by the Company of the
Merger and of the other transactions contemplated by this Agreement have been
duly and validly authorized by all necessary corporate action and, except for
any required approval of the Merger and any adoption of this Agreement by the
stockholders of the Company in connection with the consummation of the
Merger, no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions
contemplated by this Agreement. This Agreement has been duly and validly
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
3.5 APPROVALS; NO VIOLATIONS. Except for applicable requirements of
the Exchange Act and the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Anti-trust Improvements Act of
▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇") and the filing of the Certificate of Merger as required
by the DGCL, no filing with, and no permit, authorization, consent, or
approval of, any foreign or domestic public body or authority is necessary
for the consummation by the Company of the transactions contemplated by this
Agreement. Except as set forth on SCHEDULE 3.5, the execution and delivery
of this Agreement by the Company, the consummation by the Company of the
transactions contemplated by this Agreement and the compliance by the Company
with any of the provisions of this Agreement will not (a) conflict with or
result in any breach of any provision of the charters of bylaws or equivalent
organizational documents of the Company or any of its subsidiaries; (b)
result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation, or acceleration) under, any of the terms, conditions, or
provisions of any note, bond, mortgage, indenture, license, lease, contract,
agreement, or other instrument or obligation to which the Company or any of
its subsidiaries is a party or by which any of them or any of their
properties or assets may be bound; or (c) violate any order, writ,
injunction, decree, statute, rule, or regulation applicable to the Company,
any of its subsidiaries or any of their properties or assets; except such
violations, conflicts, breaches, defaults, terminations, or accelerations
referred to in this SECTION 3.5 as are not, individually or in
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the aggregate, reasonably expected to result in a Company Material Adverse
Effect or materially adversely affect the ability of any party to perform its
obligations under this Agreement.
3.6 SEC FILINGS; FINANCIAL STATEMENTS. At least since December 31,
1993, the Company has timely filed with the SEC all forms, reports,
statements, and documents required to be filed by it pursuant to the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "SECURITIES ACT"), and the Exchange Act, and the rules and
regulations promulgated thereunder, together with all amendments thereto
(collectively, and including, when filed, the Schedule 14d-9, the "COMPANY
REPORTS") and has otherwise complied in all material respects with the
requirements of the Securities Act and the Exchange Act. The Company will
promptly deliver to the Purchaser any Company Report filed by the Company
after the date of this Agreement. As of their respective dates, the Company
Reports did not 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
to make the statements made therein, in light of the circumstances under
which they were or will be made, not misleading. Each of the historical
consolidated balance sheets included in or incorporated by reference into the
Company Reports as of its date and each of the historical consolidated
statements of income and earnings, stockholders' equity, and cash flows
included in or incorporated by reference into the Company Reports (including
any related notes and schedules) fairly presents or will fairly present the
consolidated financial condition, results of operations, stockholders'
equity, and cash flows, as the case may be, of the Company and its
subsidiaries for the periods set forth (subject, in the case of unaudited
statements, to normal year-end audit adjustments), in each case in accordance
with generally accepted accounting principles consistently applied during the
periods involved. The Company maintains a system of internal accounting
controls sufficient to provide that transactions are executed in accordance
with management's general or specific authorization, transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets, access to assets is permitted only in accordance
with management's general or specific authorization, and the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
3.7 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in the
consolidated balance sheet of the Company as of September 30, 1998, and
except as set forth in the Company Reports, neither the Company nor any of
its subsidiaries has any liabilities or obligations of any nature, whether or
not accrued, contingent, or otherwise, that would be required to be included
on a consolidated balance sheet of the Company and its subsidiaries as of
September 30, 1998 prepared in accordance with generally accepted accounting
principles, and that are, individually or in the aggregate, reasonably
expected to result in a Company Material Adverse Effect. Since September 30,
1998, the Company and its subsidiaries have conducted their respective
businesses in a manner consistent with past practices, and neither the
Company nor any of its subsidiaries has become subject to any liabilities or
obligations that would be required to be included on a consolidated balance
sheet of the Company and its subsidiaries prepared in accordance with
generally accepted accounting principles and that are, individually or in the
aggregate, reasonably expected to result in a Company Material Adverse
Effect, other than liabilities or obligations incurred in the ordinary course
of business consistent with past practices or incurred in connection
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with the Offer, this Agreement, or the Merger and disclosed in the Company
Reports or consisting of reasonable legal, printing, accounting, and other
customary fees incurred in connection with the Offer, this Agreement, or the
Merger.
3.8 COMPLIANCE WITH APPLICABLE LAW. The Company and each of its
subsidiaries currently hold and are in compliance with the terms of all
licenses, permits, and authorizations necessary for the lawful conduct of
their respective businesses, and have complied with, and neither the Company
nor any of its subsidiaries is in violation of, or in default under, the
applicable statutes, ordinances, rules, regulations, orders, or decrees of
any federal, state, local, or foreign governmental bodies, agencies, or
authorities having, asserting, or claiming jurisdiction over it or over any
part of its operations or assets, except for violations that would not,
individually or in the aggregate, result in a Company Material Adverse
Effect. The businesses of the Company and its subsidiaries are not being and
have not been conducted in violation of any law, ordinance, or regulation of
any governmental authorities and regulatory agencies except for violations as
are not, individually or in the aggregate, reasonably expected to result in a
Company Material Adverse Effect. No investigation or review by any
governmental authorities and regulatory agencies with respect to the Company
or any of its subsidiaries is pending or, to the best knowledge of the
Company, threatened, nor, to the best knowledge of the Company, have any
governmental authorities and regulatory agencies indicated an intention to
conduct such an investigation or review, and no fine has been levied against,
or order entered with respect to, the Company or any subsidiary by any
regulatory authority.
3.9 TERMINATION, SEVERANCE, AND EMPLOYMENT AGREEMENTS. Set forth on
SCHEDULE 3.9 is a complete and accurate list of each (a) employment,
severance, or collective bargaining agreement not terminable without
liability or obligation on 60 days' or less notice; (b) agreement with any
director, executive officer, or other key employee, agent, or contractor of
the Company or any subsidiary of the Company (i) the benefits of which are
contingent, or the terms of which are materially altered, on the occurrence
of a transaction involving the Company or any subsidiary of the Company of
the nature of any of the transactions contemplated by this Agreement or
relating to an actual or potential change in control of the Company or any of
its subsidiaries or (ii) providing any term of employment or other
compensation guarantee or extending severance benefits or other benefits
after termination not comparable to benefits available to employees, agents,
or contractors generally; (c) agreement, plan, or arrangement under which any
person may receive payments that may be subject to the tax imposed by Section
4999 of the Internal Revenue Code of 1986 (the "CODE") or included in the
determination of such person's "parachute payment" under Section 280G of the
Code; and (d) agreement or plan, including any stock option plan, stock
appreciation right plan, restricted stock plan, or stock purchase plan, any
of the benefits of which will be increased, or the vesting of the benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which
will be calculated on the basis of any of the transactions contemplated by
this Agreement; provided that no matter need be described in SCHEDULE 3.9
which is otherwise specifically described or referenced herein or which
involves payments in the aggregate of less than $100,000 by the Company.
Except as disclosed on SCHEDULE 3.9, since December 31, 1995, neither the
Company nor any of its subsidiaries has entered into or amended any
employment or severance agreement with any director, officer, or key
employee, agent, or contractor, or, granted any
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severance or termination pay to any officer, director, or key employee,
agent, or contractor of the Company or any of its subsidiaries.
3.10 EMPLOYEE BENEFITS. No "employee pension benefit plan" (as defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) ("PENSION PLAN") is a "multiemployer plan" (within the
meaning of ERISA), nor has the Company, or any of its subsidiaries or any
other person that, together with the Company, is or has been treated as a
single employer under Section 414(b), (c), (m), or (o) of the Code (each a
"COMMONLY CONTROLLED ENTITY") ever contributed or been required to contribute
to any multiemployer plan. Each Pension Plan intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter from
the Internal Revenue Service that it is so qualified and nothing has occurred
since the date of such letter that is reasonably expected to affect the
qualified status of such Pension Plan. None of the "employee welfare benefit
plans" (as defined in Section 3(1) of ERISA), or other plans, arrangements,
or policies relating to stock options, stock purchases, compensation,
deferred compensation, severance, fringe benefits, and other employee
benefits, in each case maintained, or contributed to, or required to be
maintained or contributed to, by the Company or any Commonly Controlled
Entity for the benefit of any current or former employees, officers, agents,
or directors (or any beneficiaries of such persons) of the Company or any of
its subsidiaries (collectively, "BENEFIT PLANS") promises or provides medical
benefits to any person after termination of employment with the Company or
any agency of the Company, except as otherwise required by law in the
applicable jurisdiction. Each individual who is paid for services in any
form by the Company or any Commonly Controlled Entity and who is treated by
the Company or a Commonly Controlled Entity as an independent contractor for
federal income tax purposes (including, without limitation, Code provisions
applicable or relating to employee benefit plans), state unemployment tax
purposes, or any other purpose, is an independent contractor for such
purpose. Except where it is not reasonably expected to result in a Company
Material Adverse Effect: (a) each Benefit Plan has been administered in
accordance with its terms; (b) the Company and all the Benefit Plans are all
in compliance with applicable provisions of ERISA, the Code, and all other
applicable laws; (c) each Benefit Plan could be amended or terminated without
liability to the Company, any Commonly Controlled Entity, the Purchaser, or
the Parent on or at any time after the Effective Time; (d) neither the
Company nor any Commonly Controlled Entity has incurred any liability, and no
event has occurred that would result in any liability, to a Pension Plan
(other than for contributions not yet due) or to the Pension Benefit Guaranty
Corporation (other than for payment of premiums not yet due) that has not
been fully paid; (e) neither the Company nor any Commonly Controlled Entity
has incurred any direct or indirect liability under, arising out of, or by
operation of Title IV of ERISA, in connection with the termination of, or
withdrawal from, any Pension Plan or other requirement plan or arrangement,
and no fact or event exists that is reasonably expected to give rise to any
such liability; and (f) the aggregate accumulated benefit obligations of each
Pension Plan subject to Title IV of ERISA do not exceed the fair market value
of the assets of such Pension Plan.
3.11 TAXES. The Company and its subsidiaries have timely filed all
federal income tax returns and reports and other material returns and reports
relating to federal, state, local, and foreign taxes required to be filed.
Such reports and returns are true, correct and complete, except for such
failures to be true, correct and complete as are not, individually or in the
aggregate,
-13-
reasonably expected to result in a Company Material Adverse Effect. The
Company and its subsidiaries have paid or made adequate provision for all
taxes owed except taxes that if not so paid or provided for is not reasonably
expected to result in a Company Material Adverse Effect, and, except as
disclosed in SCHEDULE 3.11, no unpaid deficiencies in taxes or other
governmental charges for any period have been proposed or assessed by any
government taxing authority and, to the knowledge of the Company, no
government tax authority is threatening to propose or assess against the
Company or any of its subsidiaries any such deficiency or charge that is,
individually or in the aggregate, reasonably expected to result in a Company
Material Adverse Effect. The Company and its subsidiaries have withheld or
collected and paid over to the appropriate governmental authorities or are
properly holding for such payment all taxes required by law to be withheld or
collected, except for such failures to have so withheld or collected and paid
over, or to be so holding for payment as are not, individually or in the
aggregate, reasonably expected to result in a Company Material Adverse
Effect. There are no material liens for taxes upon the assets of the Company
or its subsidiaries, other than liens for current taxes not yet due and
payable and liens for taxes that are being contested in good faith by
appropriate proceedings diligently prosecuted. Neither the Company nor any
of its subsidiaries has agreed to or is required to make any adjustment under
Section 481(a) of the Code. Neither the Company nor any of its subsidiaries
has made any election under Section 341(f) of the Code.
3.12 LITIGATION. There is no suit, claim, action, proceeding, or
investigation pending or, to the knowledge of the Company, threatened against
the Company or any of its subsidiaries or any of their respective properties
or assets before any court, regulatory agency, or tribunal as to which an
adverse determination is reasonably considered probable that, individually or
in the aggregate, is reasonably expected to result in a Company Material
Adverse Effect. Neither the Company nor any of its subsidiaries is subject
to any outstanding order, writ, injunction, or decree that, individually or
in the aggregate, is reasonably expected to result in a Company Material
Adverse Effect or would prevent or delay the consummation of the transactions
contemplated by this Agreement.
3.13 ENVIRONMENTAL MATTERS. Except for matters disclosed in SCHEDULE
3.13 and except for matters that are not reasonably expected to result,
individually or in the aggregate with all other such matters, in liability to
the Company or any of its subsidiaries in excess of $200,000, (i) the
properties, operations and activities of the Company and its subsidiaries are
in compliance with all applicable Environmental Laws; (ii) the Company and
its subsidiaries and the properties and operations of the Company and its
subsidiaries are not subject to any existing, pending or, to the knowledge of
the Company, threatened action, suit, claim, investigation, inquiry or
proceeding by or before any governmental authority under any Environmental
Laws; (iii) all notices, permits, licenses, or similar authorizations, if
any, required to be obtained or filed by the Company or any of its
subsidiaries under any Environmental Laws in connection with any aspect of
the business of the Company or its subsidiaries, including without limitation
those relating to the treatment, storage, disposal or release of a hazardous
or otherwise regulated substance, have been duly obtained or filed and will
remain valid and in effect after the Merger, and the Company and its
subsidiaries are in compliance with the terms and conditions of all such
notices, permits, licenses and similar authorizations; (iv) the Company and
its subsidiaries have satisfied and are currently in compliance with all
financial responsibility requirements applicable to their operations and
-14-
imposed by any governmental authority under any Environmental Laws, and the
Company and its subsidiaries have not received any notice of noncompliance
with any such financial responsibility requirements; (v) to the Company's
knowledge, there are no physical or environmental conditions existing on any
property of the Company or its subsidiaries or resulting from the Company's
or such subsidiaries' operations or activities, past or present, at any
location, that would give rise to any on-site or off-site remedial
obligations imposed on the Company or any of its subsidiaries under any
Environmental Laws or that would impact the soil, groundwater or surface
water or human health (to the extent of exposure to hazardous substances);
(vi) to the Company's knowledge, since the effective date of the relevant
requirements of applicable Environmental Laws and to the extent required by
such applicable Environmental Laws, all hazardous or otherwise regulated
substances generated by the Company and its subsidiaries have been
transported only by carriers authorized under Environmental Laws to transport
such substances and wastes, and disposed of only at treatment, storage, and
disposal facilities authorized under Environmental Laws to treat, store or
dispose of such substances and wastes; (vii) there has been no exposure of
any person or property to hazardous substances or any pollutant or
contaminant, nor has there been any release of hazardous substances, or any
pollutant or contaminant into the environment by the Company or its
subsidiaries or in connection with their properties or operations that is
reasonably expected to give rise to any claim against the Company or any of
its subsidiaries for damages or compensation; and (viii) subject to
restrictions necessary to preserve any attorney client privilege, the Company
and its subsidiaries have made available to Parent all internal and external
environmental audits and studies and all correspondence on substantial
environmental matters in the possession of the Company or its subsidiaries
relating to any of the current or former properties or operations of the
Company and its subsidiaries.
For purposes of this Agreement, the term "ENVIRONMENTAL LAWS" shall mean
any and all laws, statutes, ordinances, rules, regulations, or orders of any
Governmental Entity pertaining to health (to the extent of exposure to
hazardous substances) the environment currently in effect in any and all
jurisdictions in which the Company and its subsidiaries own property or
conduct business, including without limitation, the Clean Air Act, as
amended, the Comprehensive Environmental, Response, Compensation, and
Liability Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976 ("RCRA"), as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, the Hazardous & Solid Waste Amendments Act of 1984,
as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, the Oil
Pollution Act of 1990 ("OPA"), any state laws implementing the foregoing
federal laws, and all other environmental conservation or protection laws.
For purposes of this Agreement, the terms "hazardous substance" and "release"
have the meanings specified in CERCLA and RCRA and shall include petroleum
and petroleum products, radon and PCB's, and the term "disposal" has the
meaning specified in RCRA; PROVIDED, HOWEVER, that to the extent the laws of
the state in which the property is located establish a meaning for "hazardous
substance," "release," or "disposal" that is broader than that specified in
either CERCLA or RCRA, such broader meaning shall apply.
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3.14. VOTING REQUIREMENTS. The Board of Directors of the Company
has approved the Offer, the Merger and this Agreement, and such approval is
sufficient to render inapplicable to the Offer, the Merger and the Agreement
the provisions of Section 203 of the DGCL. The affirmative vote of the
holders of a majority of the outstanding shares of Common Stock in favor of
adoption of this Agreement and the Merger is the only vote of the holders of
any class or series of the Company's capital stock necessary to approve this
Agreement and the transactions contemplated hereby under any applicable law,
rule or regulations or pursuant to the requirements of the Company's
certificate of incorporation or bylaws.
3.15. FINDERS AND INVESTMENT BANKERS; TRANSACTION EXPENSES. Neither
the Company nor any of its officers or directors has employed any investment
banker, business consultant, financial advisor, broker or finder in
connection with the transactions contemplated by this Agreement, except for
DLJ and ▇▇▇▇ ▇▇▇▇▇▇▇, or incurred any liability for any investment banking,
business consultancy, financial advisory, brokerage or finders' fees or
commissions in connection with the transactions contemplated hereby, except
for fees payable to DLJ (as reflected in agreements between such firms and
the Company, copies of which have been delivered to Parent).
3.16. INSURANCE. The Company and each of its subsidiaries are
currently insured, and during each of the past five calendar years have been
insured, for reasonable amounts against such risks as companies engaged in a
similar business and similarly situated would, in accordance with good
business practice, customarily be insured.
3.17. TITLE TO PROPERTIES; ENTIRE BUSINESS. The Company and its
subsidiaries have good title or a valid and subsisting leasehold interest in
and to or a valid and enforceable license to use all material assets,
properties and rights owned, used or held of use by them in the conduct of
their respective businesses, in each case, free and clear of any Liens other
than Permitted Liens. The Company and its subsidiaries own or have
sufficient right to use all assets and properties necessary to conduct their
businesses in the manner in which they are currently conducted. As used
herein, "PERMITTED LIENS" mean: (i) a lien of a landlord, carrier,
warehouseman, mechanic, materialman, or any other statutory lien arising in
the ordinary course of business; (ii) a lien for taxes not yet due or being
contested in good faith; (iii) with respect to the right of the Company or
its subsidiaries to use any property leased to the Company or its
subsidiaries, arises by the terms of the applicable lease; (iv) a purchase
money security interest arising in the ordinary course of business; or (v)
does not materially detract from the value of the encumbered property or
assets or materially detract from or interfere with the use of the encumbered
property or assets in the ordinary course of business.
3.18. INTELLECTUAL PROPERTY RIGHTS. Except as set forth in SCHEDULE
3.18, the Company and its subsidiaries have the right to use all of the
material trademarks and trade names utilized by it in the conduct of its
business and any other computer software and software licenses, intellectual
property, proprietary information, trade secrets, trademarks, trade names,
copyrights, material and manufacturing specifications, drawings and designs
used by the Company or any of its subsidiaries and material to the operation
of the business of the Company or any of its subsidiaries (collectively,
"Intellectual Property"), without infringing on or otherwise acting adversely
to the rights or claimed rights of any person, except to the extent such
infringement or
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actions adverse to another's rights or claimed rights is not reasonably
expected to have a Company Material Adverse Effect. Except as set forth on
such SCHEDULE 3.18, neither the Company nor any of its subsidiaries is
obligated to pay any royalty or other consideration material to the Company
and its subsidiaries taken as a whole to any person in connection with the
use of any Intellectual Property. Except as set forth in such SCHEDULE 3.18
and as is not reasonably expected to have a Company Material Adverse Effect,
to the Company's knowledge, no other person is infringing on the rights of
the Company and its subsidiaries in any of their Intellectual Property.
3.19 LARGEST CUSTOMERS. The Company has made available to Parent a list
of the 10 largest customers by dollar volume of the Company and its
subsidiaries (the "LARGEST CUSTOMERS"), with the amount of revenues
attributable to each such customer, for each fiscal years ending December 31,
1996 and 1997. Except as previously disclosed, none of the Largest Customers
has terminated or materially altered its relationship with the Company since
January 1, 1996 or, to the Company's knowledge, threatened to do so or
otherwise notified the Company of its intention to do so, and there has been
no material dispute with any of the Largest Customers since January 1, 1996.
3.20 YEAR 2000 COMPLIANCE. The disclosures in the Company's Annual
Report on Form 10-K for the year ending December 31, 1997 and in its
Quarterly Report on Form 10-Q for the quarter ending June 30, 1998 regarding
the "status of Year 2000 Compliance" met the applicable standards (as
generally understood by legal practitioners) required with regard thereto as
of the dated filed, and such disclosures continue to be correct, in light of
the circumstances made and when measured against the disclosure standards
sought to be satisfied, in all material respects as if made on the date of
this Agreement.
3.21 CERTAIN MATERIAL CONTRACTS. The Company has disclosed to the
Purchaser and the Parent all agreements and arrangements (whether written or
oral and including all amendments thereto) to which the Company or any of its
Subsidiaries is a party or a beneficiary or by which the Company or any of
its Subsidiaries is bound that are material, directly or indirectly, to the
business of the Company and any of its Subsidiaries, taken as a whole
(collectively, the "MATERIAL CONTRACTS"). The Company and its Subsidiaries
have performed all of its obligations under each Material Contract, and there
exist no breach or default, or event that with notice or lapse of time would
constitute a breach or default under any Material Contract except as is not
reasonably expected to have a Company Material Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND THE PURCHASER
Each of the Parent and the Purchaser represents and warrants to the
Company as follows:
4.1 ORGANIZATION AND QUALIFICATION. Each of the Parent and the
Purchaser is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware and has all requisite
corporate power and authority and any necessary governmental
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authority to carry on its business as now conducted. Each of the Parent and
the Purchaser is duly qualified or licensed to do business, and is in good
standing, in each jurisdiction where the character of its properties owned or
leased or the nature of its activities makes such qualification or licensing
necessary, except for failures to be so duly qualified or licensed and in
good standing as are not, individually or in the aggregate, reasonably
expected to result in a Parent Material Adverse Effect. For the purposes of
this Agreement, "PARENT MATERIAL ADVERSE EFFECT" means any change or effect
that, individually or when taken together with all such other changes or
effects, are reasonably expected to be materially adverse to the condition
(financial or other), business, operations, properties, assets, liabilities,
prospects, or results of operations of the Parent and its subsidiaries, taken
as a whole.
4.2 CORPORATE AUTHORIZATION. Each of the Parent and the Purchaser has
the full corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated by this Agreement. The
execution, delivery, and performance by each of the Parent and the Purchaser
of this Agreement and the consummation by the Parent and the Purchaser of the
Merger and of the other transactions necessary for such consummation have
been duly and validly authorized by the Parent as sole stockholder of the
Purchaser and by the Board of Directors of each of the Parent and the
Purchaser and no other corporate proceedings on the part of the Parent or the
Purchaser are necessary to authorize this Agreement or to consummate the
transactions contemplated by this Agreement. This Agreement has been duly
and validly executed and delivered by each of the Parent and the Purchaser
and constitutes a valid and binding obligation of each of the Parent and the
Purchaser, enforceable in accordance with its terms.
4.3 APPROVALS; NO VIOLATIONS. Except for applicable requirements of
the Exchange Act and the HSR Act and the filing and recordation of the
Certificate of Merger as required by the DGCL, no filing with, and no permit,
authorization, consent, or approval of any foreign or domestic public body or
authority is necessary for the consummation by the Parent and the Purchaser
of the transactions contemplated by this Agreement. Neither the execution
and delivery of this Agreement by the Parent and the Purchaser nor the
consummation by the Parent and the Purchaser of the transactions contemplated
by this Agreement nor compliance by them with any of the provisions of this
Agreement will (a) conflict with or result in any breach of any provision of
the organizational documents or bylaws of the Parent or the Purchaser; (b)
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of
termination, cancellation, or acceleration under), any of the terms,
conditions, or provisions of any note, bond, mortgage, indenture, license,
lease, contract, agreement, or other instrument or obligation to which the
Parent or the Purchaser is a party or by which either of them or any of their
respective properties or assets may be bound; or (c) violate any order, writ,
injunction, decree, statute, rule, or regulation applicable to the Parent or
the Purchaser or any of their respective properties or assets; except such
violations, conflicts, breaches, defaults, terminations, or accelerations
referred to in this SECTION 4.3 as are not, individually or in the aggregate,
reasonably expected to result in a Parent Material Adverse Effect.
4.4 NO PRIOR ACTIVITIES. Except for obligations or liabilities
incurred in connection with its incorporation or organization, the Offer, or
the negotiation and consummation of this
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Agreement and the transactions contemplated by this Agreement, the Purchaser
has not incurred any obligations or liabilities, nor has it engaged in any
business or activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person.
4.5 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by the Parent or the Purchaser for inclusion or incorporation by
reference in the Offer Documents, the Schedule 14D-9, the information
statement under Section 14(f) of the Exchange Act, or the Proxy Statement
will, in the case of the Offer Documents and the Schedule 14D-9, at the
respective times the Offer Documents and the Schedule 14D-9 are filed with
the SEC or first published, sent, or given to the stockholders of the
Company, or, in the case of the Proxy Statement, at the date the Proxy
Statement is first mailed to the stockholders of the Company or at the time
of the meeting of the stockholders of the Company held to vote on approval
and adoption of this Agreement and the Merger, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Offer
Documents will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations promulgated
thereunder, except that no representation or warranty is made by the Parent
or the Purchaser with respect to statements made or incorporated by reference
in the Offer Documents based on information supplied by the Company for
inclusion or incorporation by reference in the Offer Documents.
4.6 FINANCING. Parent or Purchaser will have available to it at the
time required the funds necessary to consummate the Offer, the Merger and the
transactions contemplated hereby.
ARTICLE V
COVENANTS
5.1 CONDUCT OF BUSINESS OF THE COMPANY.
(a) Except as expressly contemplated by this Agreement and except
in cases where, at or after such time as the designees of the Parent
constitute a majority of the members of the Board of Directors of the Company
and the failure to comply with the covenants set forth in this SECTION 5.1
results from actions, or omissions to act, taken or authorized by such
designees, during the period from the date of this Agreement to the Effective
Time:
(i) Each of the Company and its subsidiaries will conduct
its business solely in the ordinary course consistent with past practices,
except as is reasonably expected to facilitate the consummation of the Offer,
the Merger or the transactions contemplated hereby.
(ii) Neither the Company nor any of its subsidiaries will
intentionally take or willfully omit to take any actions that results in or
are reasonably expected to result in, a Company Material Adverse Effect.
(iii) The Company will use its reasonable best efforts to
preserve intact the business organization of the Company and each of its
subsidiaries, to keep available the
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services of its and their present officers and key employees and consultants,
and to maintain satisfactory relationships with customers, agents,
reinsurers, suppliers, and other persons having business relationships with
the Company or its subsidiaries.
(b) Without limiting the provisions of SECTION 5.1(a), except as
expressly contemplated by this Agreement and except in cases where, at or
after such time as the designees of the Parent constitute a majority of the
members of the Board of Directors of the Company and the failure to comply
with the covenants set forth in this SECTION 5.1 results from actions, or
omissions to act, taken or authorized by such designees, during the period
from the date of this Agreement to the Effective Time, neither the Company
nor any of its subsidiaries will:
(i) issue, sell, or dispose of additional shares of capital
stock of any class (including the Shares) of the Company or any of its
subsidiaries, or securities convertible into or exchangeable for any such
shares or securities, or any rights, warrants, or options to acquire any
such shares or securities, other than Shares issued upon exercise of options
disclosed in SECTION 3.3, which options cover a total of no more than
3,328,989 Shares;
(ii) redeem, purchase, or otherwise acquire, or propose to
redeem, purchase, or otherwise acquire, any of its outstanding capital stock,
or other securities of the Company or any of its subsidiaries;
(iii) split, combine, subdivide, or reclassify any of its
capital stock or declare, set aside, make, or pay any dividend or
distribution on any shares of its capital stock except for dividends or
distributions to the Company and its subsidiaries from their respective
subsidiaries;
(iv) sell, pledge, dispose of, or encumber any of its
assets, except for sales, pledges, dispositions, or encumbrances in the
ordinary course of business consistent with past practices or between the
Company and its subsidiaries, except as reasonably may be expected to
facilitate the consummation of the Offer, the Merger or the transactions
contemplated hereby;
(v) incur or modify any indebtedness or issue any debt
securities, or assume, guarantee, endorse, or otherwise as an accommodation
become absolutely or contingently responsible for obligations of any other
person, or make any loans or advances, other than in the ordinary course of
business consistent with past practices;
(vi) adopt or amend any bonus, profit sharing, compensation,
severance, termination, stock option, pension, retirement, deferred
compensation, employment or other employee benefit agreements, trusts, plans,
funds, or other arrangements for the benefit or welfare of any director,
officer, or employee, or (except for normal increases in the ordinary course
of business that are consistent with past practices and that, in the
aggregate, do not result in a material increase in benefits or compensation
expense to the Company) increase in any manner the compensation or fringe
benefits of any director, officer, or employee or pay any benefit not
required by any existing plan or arrangement (including, without limitation,
the granting or vesting of stock options or stock appreciation rights) or
take any action or grant any benefit not expressly
-20-
required under the terms of any existing agreements, trusts, plans, funds, or
other such arrangements or enter into any contract, agreement, commitment, or
arrangement to do any of the foregoing; or make or agree to make any payments
to any directors, officers, agents, contractors, or employees relating to a
change or potential change in control of the Company;
(vii) acquire by merger, consolidation, or acquisition of
stock or assets any corporation, partnership, or other business organization
or division or make any investment either by purchase of stock or securities,
contributions to capital (other than to wholly-owned subsidiaries), property
transfer, or purchase of any material amount of property or assets, in any
other person;
(viii) except as required by this Agreement, adopt any
amendments to their respective charters or bylaws or equivalent
organizational documents;
(ix) take any action other than in the ordinary course of
business and consistent with past practices, to pay, discharge, settle, or
satisfy any claim, liability, or obligation (absolute or contingent, accrued
or unaccrued, asserted or unasserted, or otherwise);
(x) change any method of accounting or accounting practice
used by the Company or any of its subsidiaries, except for any change
required by reason of a concurrent change in generally accepted accounting
principles;
(xi) revalue in any respect any of its assets, including,
without limitation, writing down the value of its portfolio or writing off
notes or accounts receivable other than in the ordinary course of business
consistent with past practices (other than with respect to MatriDigm
Corporation);
(xii) except in the ordinary course of business consistent
with past practice, authorize any new capital expenditures;
(xiii) make any tax election, settle or compromise any
federal, state, or local tax liability or consent to the extension of time
for the assessment or collection of any federal, state, or local tax, the
effect of which would be material;
(xiv) settle or compromise any pending or threatened suit,
action, or claim material to the Company and its subsidiaries taken as a
whole or relevant to the transactions contemplated by this Agreement;
(xv) except as permitted by this Agreement, enter into any
agreement, arrangement, or understanding to do any of the foregoing actions
in this SECTION 5.1, including any agreement, arrangement, or understanding
resulting in or providing for a sale of any assets of the Company (other than
a sale of assets in the ordinary course of business and consistent with past
practices) or a merger or other liquidation, sale, or disposition of the
Company; or
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(xvi) voluntarily take any action or willfully omit to take
any action that is reasonably expected to make any representation or warranty
in ARTICLE III untrue or incorrect in any material respect at any time,
including as of the date of this Agreement and as of the time of consummation
of the Offer and the Effective Time, as if made as of such time.
5.2 PROXY STATEMENT. Promptly after the execution of this Agreement,
the Company and the Parent will cooperate with each other and use all
reasonable efforts to prepare, and the Company and the Parent will file with
the SEC, as soon as is reasonably practicable after completion of the Offer,
a proxy statement, together with a form of proxy, or information statement,
with respect to the Special Meeting (as defined in SECTION 5.3), if such
Special Meeting is required to be held pursuant to SECTION 5.3. For the
purposes of this Agreement, the term "PROXY STATEMENT" means such proxy or
information statement filed in final form with the SEC at the time it
initially is mailed to the stockholders of the Company and all amendments or
supplements thereto, if any, similarly filed and mailed. The parties will
use all reasonable efforts to have the Proxy Statement cleared by the SEC as
promptly as practicable after filing and, as promptly as practicable after
the Proxy Statement has been so cleared, will mail the Proxy Statement to the
stockholders of the Company as of the record date for the Special Meeting.
The Company represents that none of the information provided or to be
provided by it, and the Parent and the Purchaser represent that none of the
information provided or to be provided by them, for use in the Proxy
Statement will, on the date the Proxy Statement is first mailed to the
stockholders of the Company and on the date of the Special Meeting, be false
or misleading with respect to any material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading, and the Parent, the Company, and the Purchaser each agrees to
correct any information provided by it for use in the Proxy Statement that
has become false or misleading in any material respect and file such
amendments and supplements as are necessary. The Proxy Statement will comply
as to form in all material respects with all applicable requirements of
federal securities laws and applicable state laws.
5.3 ACTION OF STOCKHOLDERS OF THE COMPANY; VOTING AND DISPOSITION OF
THE SHARES.
(a) Promptly after completion of the Offer and if required by
applicable law in order to consummate the Merger, the Company will take all
action necessary in accordance with the DGCL and the Certificate of
Incorporation and Bylaws of the Company, to call a meeting of its
stockholders (the "SPECIAL MEETING") with a record date as of which the
Parent is the record owner of the Shares purchased pursuant to the Offer at
which the stockholders of the Company will consider and vote upon the Merger
and this Agreement. Unless the fiduciary duties of the Board of Directors or
any Director under applicable law require otherwise, the Proxy Statement will
contain the unanimous recommendation of the Board of Directors of the Company
that the stockholders of the Company vote to adopt and approve the Merger and
this Agreement. The Company will, at the request of the Parent, use all
reasonable efforts to obtain from its stockholders proxies in favor of such
adoption and approval and to take all other action necessary, or, in the
reasonable judgment of the Company and the Parent, helpful to secure the vote
or consent of stockholders required by the DGCL to effect the Merger.
Notwithstanding the foregoing, in the event that the Parent determines to
effect the Merger without a meeting of the
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stockholders of the Company pursuant to Section 228 or Section 253 of the
DGCL, the parties will take all necessary or appropriate action to cause the
Merger to become effective as soon as practicable after expiration of the
Offer without a meeting of stockholders, in accordance with either such
section of the DGCL.
(b) At the Special Meeting, the Parent, the Purchaser, and their
subsidiaries will vote, or cause to be voted, all of the Shares then owned by
any of them in favor of the Merger.
5.4 ADDITIONAL AGREEMENTS. Subject to the terms and conditions of this
Agreement and to the fiduciary obligations of the Board of Directors of the
Company under applicable law, each of the parties agrees to use their
respective reasonable best efforts to take, or cause to be taken, all actions
to do, or cause to be done, all things necessary, proper, or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement (including consummation of the Offer, the
Merger, and the Financing (as defined in SECTION 5.11)) and to cooperate with
each other in connection with the foregoing, including, without limitation,
using their respective reasonable best efforts (a) to obtain all necessary
waivers, consents, and approvals from other parties to loan agreements,
leases, and other contracts, (b) to obtain all necessary consents, approvals,
and authorizations as are required to be obtained under any federal, state,
or foreign law or regulations, (c) to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the
parties to consummate the transactions contemplated by this Agreement, (d) to
prepare and effect all necessary registrations and filings, and (e) to
fulfill all conditions to and covenants contained in this Agreement. If,
after the Effective Time, any action is necessary to effect the purposes of
this Agreement, the proper officers and directors of each party will take all
such necessary action.
5.5 NOTIFICATION OF CERTAIN MATTERS. The Company will give prompt
notice to the Parent and the Purchaser, and the Parent and the Purchaser will
give prompt notice to the Company, of (a) the occurrence, or failure to
occur, of any event, which occurrence or failure is reasonably expected to
cause any representation or warranty contained in this Agreement to be untrue
or inaccurate in any material respect at any time, (b) any material failure
of the Company, the Parent, or the Purchaser, as the case may be, or of any
officer, director, employee, or agent of the Company, the Parent, or the
Purchaser, to comply with or satisfy any covenant, condition, or agreement to
be complied with or satisfied by it under this Agreement, (c) any act,
omission to act, event, or occurrence that, with notice, the passage of time,
or otherwise, is reasonably expected to result in a Company Material Adverse
Effect or a Parent Material Adverse Effect, as the case may be, and (d) any
contingent liability of the Company for which it reasonably believes it will,
with the passage of time or otherwise, become liable. No such notification
will affect the representations or warranties of the parties or the
conditions to the obligations of the parties under this Agreement.
5.6 ACCESS TO INFORMATION.
(a) From the date of this Agreement to the Effective Time, the
Company will, and will cause its subsidiaries, officers, directors,
employees, and agents upon reasonable notice
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to, afford to officers, employees, and agents of the Parent, the Purchaser
and their affiliates and, subject to the execution and delivery of a
customary confidentiality agreement, the banks, other financial institutions,
and investment bankers working with the Parent or the Purchaser, and their
respective officers, employees, and agents, complete access at all reasonable
times to its officers, employees, agents, properties, books, records, and
contracts, and will furnish the Parent, the Purchaser and their affiliates
and, subject to the execution and delivery of a customary confidentiality
agreement, the banks, other financial institutions, and investments bankers
working with the Parent or the Purchaser, all financial, operating, and other
data and information as they reasonably request.
(b) Each of the Parent and the Purchaser will hold and will cause
its directors, officers, agents, employees, consultants, and advisors to hold
in confidence, unless compelled to disclose by judicial or administrative
process or, in the written opinion of its legal counsel, by other
requirements of law, all documents and information concerning the Company and
its subsidiaries furnished to such persons in connection with the
transactions contemplated by this Agreement (except to the extent that such
information can be shown to have been (i) previously known by such persons
from sources other than the Company, or its directors, officers,
representatives, or affiliates, (ii) in the public domain through no fault of
such persons, or (iii) later lawfully acquired by such persons on a
non-confidential basis from other sources who are not known by the Parent or
the Purchaser to be bound by a confidentiality agreement or otherwise
prohibited from transmitting the information to the Parent or the Purchaser
by a contractual, legal, or fiduciary obligation) and will not release or
disclose such information to any other person, except its directors,
officers, agents, employees, consultants, and advisors, in connection with
this Agreement who need to know such information. If the transactions
contemplated by this Agreement are not consummated, such confidence shall be
maintained and, if requested by or on behalf of the Company, the Parent and
the Purchaser will, and will use all reasonable efforts to cause their
auditors, attorneys, financial advisors, and other consultants, agents, and
representatives to, return to the Company or destroy all copies of written
information furnished by the Company to the Parent and the Purchaser or their
agents, representatives, or advisors. It is understood that the Parent and
the Purchaser will be deemed to have satisfied their obligation to hold such
information confidential if they exercise the same care as they take to
preserve confidentiality for their own similar information.
(c) Within ten (10) days following the date hereof, the Company
will deliver or cause to be delivered to Purchaser and Parent copies of and
any relevant information relating to, and SCHEDULE 5.6(c) setting forth, the
following: (i) registered patents, trademarks, service marks, trade names or
copyrights, or applications for or licenses (to or from the Company or any of
its subsidiaries) with respect to any of the foregoing that are material to
the Company and its subsidiaries taken as a whole, that (A) are owned by the
Company or any of its subsidiaries, or with respect to which the Company or
any of its subsidiaries has any rights, or (B) are used, whether directly or
indirectly, by the Company or any of its subsidiaries, and (ii) all Pension
Plans and Benefit Plans.
(d) If the Parent and the Purchaser obtain actual knowledge that
the Company is in breach of any representation or warranty contained in this
Agreement, the Parent and the
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Purchase will promptly inform the Company of such breach. However, no
investigation pursuant to this SECTION 5.6 will affect any representations or
warranties of the parties in this Agreement or the conditions to the
obligations of the parties to this Agreement.
5.7 PUBLIC ANNOUNCEMENTS. The Parent and the Purchaser on the one hand
and the Company on the other hand will consult with each other before issuing
any press release or otherwise making any public statements with respect to
this Agreement, the Offer, or the other transactions contemplated by this
Agreement, and will not issue any such press release or make any such public
statement prior to such consultation, except as may be required by law or the
listing requirements of any securities exchange.
5.8 OFFICERS' AND DIRECTORS' INDEMNIFICATION.
(a) The Parent and the Purchaser agree that all rights to
indemnification now existing in favor of the directors or officers of the
Company and its subsidiaries as provided in their respective certificates of
incorporation or bylaws and pursuant to the contracts listed on SCHEDULE 5.8
will, to the extent such rights are in accordance with applicable law,
survive the Merger and stay in effect in accordance with their respective
terms. Parent hereby guarantees the full and faithful performance by Parent,
Purchaser and the Surviving Corporation of their respective obligations set
forth in this SECTION 5.8(a).
(b) In the event any action, suit, proceeding, or investigation
relating to this Agreement or to the transactions contemplated by this
Agreement is commenced by a third party, whether before or after the
Effective Time, the parties to this Agreement agree, subject to the fiduciary
duties of the respective Directors of the Company and Parent, to cooperate
and use all reasonable efforts to defend against and respond to such action,
suit, proceeding, or investigation.
(c) For a period of three (3) years after the Effective Time,
Parent shall cause the Surviving Corporation to maintain officers' and
directors' liability insurance for all persons currently covered under the
Company's officers' and directors' liability insurance policies, in their
capacities as officers and directors, on terms no less favorable to the
covered persons than such existing insurance; provided, however, that Parent
shall not be required in order to maintain or procure such coverage to pay an
annual premium in excess of 200% of the current annual premium paid by the
Company for its existing coverage (the "Cap"); and provided, further, that if
equivalent coverage cannot be obtained, or can be obtained only by paying an
annual premium in excess of the Cap, Parent shall only be required to obtain
as much coverage as can be obtained by paying an annual premium equal to the
Cap. This SECTION 5.8(c) is intended to be for the benefit of, and shall be
enforceable by, the persons referred to above, their heirs and personal
representatives, and shall be binding on Parent and its successors and
assigns.
(d) The covenants contained in this SECTION 5.8 will survive the
Merger and the Termination of this Agreement as a result thereof,
indefinitely.
5.9 OTHER ACTIONS BY THE COMPANY. If any "fair price," "moratorium,"
"control share acquisition," or other form of antitakeover statute,
regulation, charter provision, or contract is or
-25-
becomes applicable to the transactions contemplated by this Agreement, the
Company and the members of the Board of Directors of the Company will use
their reasonable efforts to grant such approvals and take such actions as are
necessary under such laws, provisions, or contracts so that the transactions
contemplated by this Agreement may be consummated as promptly as practicable
on the terms contemplated by this Agreement and otherwise act to eliminate or
minimize the effects of such statute, regulation, provision or contract on
the transactions contemplated by this Agreement.
5.10 AVAILABLE FUNDS. The Parent will at the times required have
financing that, together with internally generated or otherwise available
funds and Parent's current revolving credit agreement will be sufficient to
permit the Purchaser to consummate the Offer and the Merger (the
"FINANCING"). The Parent and the Purchaser will use their reasonable best
efforts to pursue and obtain the Financing as soon as practicable.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
The respective obligations of each party to effect the Merger are
subject to the satisfaction prior to the Effective Time of the following
conditions:
6.1 STOCKHOLDER APPROVAL. This Agreement will have been adopted and
approved by the affirmative vote of the stockholders of the Company in
accordance with the Certificate of Incorporation and Bylaws of the Company
and with applicable law, unless no stockholder vote is required by law.
6.2 NO INJUNCTION. No federal or state statute, rule, regulation,
injunction, decree, or order will be enacted, promulgated, entered, or
enforced that would (i) prohibit consummation of the Merger or of the other
transactions contemplated by this Agreement or (ii) impose any material
limitation on the ability of the Parent or the Purchaser to exercise all
rights of ownership with respect to the Shares; provided that the parties to
this Agreement agree to use their respective reasonable best efforts to have
any such injunction, decree, or order lifted.
6.3 OFFER. The Purchaser will have purchased Shares pursuant to the
Offer (except that the Purchaser or the Parent in their sole discretion may
waive conditions to the Offer).
6.4 GOVERNMENTAL CONSENTS. The waiting period applicable to the
consummation of the Merger under the HSR Act will have expired or been
terminated and all filings required to be made prior to the Effective Time
with, and all consents, approvals, permits, and authorizations required to be
obtained prior to the Effective Time from, governmental and regulatory
authorities in connection with the execution and delivery of this Agreement
and the consummation of the transactions contemplated by this Agreement will
have been made or obtained (as the case may be).
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ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
7.1 TERMINATION. This Agreement may be terminated and the Offer and
the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any Stockholder approval of the Merger):
(a) by mutual written consent of the Parent, the Purchaser, and
the Company (subject to the provisions of SECTION 1.3(b));
(b) by the Parent and the Purchaser or the Company if any court of
competent jurisdiction or other governmental body has issued a final order,
decree, or ruling or taken any other final action restraining, enjoining, or
otherwise prohibiting the Merger and such order, decree, ruling, or other
action is or has become nonappealable;
(c) by the Parent and the Purchaser if due to an occurrence or
circumstance that has resulted or is reasonably expected to result in a
failure to satisfy any of the conditions set forth in ANNEX A, the Purchaser
has (i) failed to commence the Offer within five business days following the
date of the initial public announcement of the Offer, (ii) terminated the
Offer, or (iii) failed to pay for the Shares pursuant to the Offer by January
31, 1999;
(d) by the Company if (i) there has not been a breach of any
material representation, warranty, covenant, or agreement on the part of the
Company, and the Purchaser has (A) failed to commence the Offer within five
business days following the date of the initial public announcement of the
Offer, (B) terminated the Offer, or (C) failed to pay for the Shares pursuant
to the Offer by January 31, 1999; provided, that any termination pursuant to
this CLAUSE (C) must be made by written notice irrevocably stating the intent
of the Company to terminate this Agreement under this SECTION 7.1(d)(i)(C)
delivered to the Purchaser and the Parent by 12:00 noon, Dallas time, on
January 31, 1999, or (ii) prior to the purchase of Shares pursuant to the
Offer, a person or group has made a bona fide offer that the Board of
Directors of the Company by a majority vote determines in its good faith
judgment and in the exercise of its fiduciary duties, after consultation with
its financial and legal advisors, is obligated by its fiduciary duties under
applicable law to terminate this Agreement, provided that such termination
under this CLAUSE (ii) will not be effective until payment of the fee
required by SECTION 7.3(b);
(e) by the Parent and the Purchaser prior to the purchase of
Shares pursuant to the Offer, if:
(i) there has been a breach (which breach is not cured or
not capable of being cured prior to the earlier of (A) 10 days following
notice to the Company by the Purchaser of such breach or (B) two business
days prior to the expiration date of the Offer, as extended from time to time
pursuant to the terms of this Agreement) of any representation or warranty on
the part of the Company (a) having a Company Material Adverse Effect or (b)
such that closing would put the Purchaser or the Parent in conflict with the
federal securities law;
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(ii) there has been a breach (which breach is not cured or
not capable of being cured prior to the earlier of (A) 10 days following
notice to the Company by the Purchaser of such breach or (B) two business
days prior to the expiration date of the Offer, as extended from time to time
pursuant to the terms of this Agreement) of any covenant or agreement on the
part of the Company (a) resulting in a Company Material Adverse Effect or (b)
such that closing would put the Purchaser or the Parent in conflict with the
federal securities law;
(iii) the Company engages in negotiations with any person or
group (other than the Parent or the Purchaser) that has proposed a Third
Party Acquisition (as defined in SECTION 7.3) except to the extent permitted
by SECTION 8.8;
(iv) the Company enters into an agreement, letter of intent,
or arrangement with respect to a Third Party Acquisition;
(v) the Board has withdrawn or modified (including by
amendment of the Schedule 14D-9) in a manner adverse to the Purchaser its
approval or recommendation of the Offer, this Agreement, or the Merger or has
recommended another offer, or has adopted any resolution to effect any of the
foregoing; or
(vi) the Minimum Conditions have not been satisfied by the
expiration date of the Offer and on or prior to such date (A) any person or
group (other than the Parent or the Purchaser) has made and not withdrawn a
public announcement with respect to a Third Party Acquisition or (B) any
person or group (including the Company or any of its affiliates) other than
the Parent or the Purchaser has become the beneficial owner of 19.9% (except
in bona fide arbitrage transactions) or more of the Shares; or
(f) by the Company if (i) there has been a breach (which breach is
not cured or not capable of being cured prior to the earlier of (A) 10 days
following notice to Parent of such breach or (B) two business days prior to
the expiration date of the Offer, as extended from time to time pursuant to
the terms of this Agreement) of any representation or warranty on the part of
the Parent or the Purchaser that materially adversely affects (or materially
delays) the consummation of the Offer or (ii) there has been a material
breach (which breach is not cured or not capable of being cured prior to the
earlier of (A) 10 days following notice to Parent of such breach or (B) two
business days prior to the expiration date of the Offer, as extended from
time to time pursuant to the terms of this Agreement) of any covenant or
agreement on the part of the Parent or the Purchaser that materially
adversely affects (or materially delays) the consummation of the Offer.
7.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to SECTION 7.1, this Agreement will
become void and have no effect, without any liability on the part of any
party to this Agreement or its affiliates, directors, officers, or
stockholders, other than the provisions of this SECTION 7.2 and SECTIONS
5.6(b), 5.8, and 7.3. Nothing contained in this SECTION 7.2 will relieve any
party from liability for any breach of this Agreement.
-28-
7.3 FEES AND EXPENSES. (a) In the event the Parent and the Purchaser
terminate this Agreement pursuant to SECTIONS 7.1(e)(i) through (v) or the
Company terminates this Agreement pursuant to SECTION 7.1(d)(ii) or SECTION
7.1(d)(i)(C), the Company will reimburse the Parent, the Purchaser, and their
affiliates (not later than one business day after submission of statements
together with reasonable documentation therefor) for all out-of-pocket fees
and expenses actually incurred by any of them or on their behalf in
connection with the Offer and the Merger and the proposed consummation of all
transactions contemplated by this Agreement (including, without limitation,
costs of advertising, filing fees and fees payable to legal counsel,
financial printers, financing sources, investment bankers, counsel to any of
the foregoing, and accountants) not in excess of $3,000,000.
(b) If (i) (A) the Parent and the Purchaser terminate this
Agreement pursuant to SECTIONS 7.1(e)(i) through (v) or in circumstances that
would permit the Parent and the Purchaser to terminate this Agreement
pursuant to SECTIONS 7.1(e)(i) through (v) had a notice of termination
specified such SECTIONS 7.1(e)(i) through (v) or (B) if the Company
terminates this Agreement pursuant to SECTION 7.1(d)(i)(C) and, within four
months after such termination pursuant to clause (A) or clause (B) the
Company enters into an agreement, letter of intent, or binding arrangement
with respect to a Third Party Acquisition, or a Third Party Acquisition
occurs (or within 9 months after such termination if the Third Party
Acquisition that occurs or with respect to which an agreement, letter of
intent or binding arrangement has been entered into is or is reasonably
expected to be a transaction more favorable to the Company's stockholders
than the transactions contemplated by this Agreement) or (ii) the Company
terminates this Agreement pursuant to SECTION 7.1(d)(ii), then in either case
the Company will pay to the Parent and the Purchaser, within one business day
following the execution and delivery of such agreement or letter of intent or
the entering into of such an arrangement or the occurrence of such Third
Party Acquisition, as the case may be, or simultaneously with such
termination pursuant to SECTION 7.1(d)(ii), a fee, in cash, of $10,000,000
and reimburse Parent for all out-of-pocket fees and expenses actually
incurred by or on behalf of Parent or Purchaser in connection with the Offer
and the Merger and the proposed consummation of all the transactions
contemplated by this Agreement (including, without limitation, costs of
advertising, filing fees and fees payable to legal counsel, financial
printers, financing sources, investment bankers, counsel to any of the
foregoing, and accountants) not in excess of $3,000,000 (with a credit for
amounts, if any, paid under SECTION 7.3(a)).
For the purposes of this Agreement, "THIRD PARTY ACQUISITION" means the
occurrence of any of the following events (i) the acquisition of the Company
by merger or otherwise by any person or group other than the Parent, the
Purchaser, or any affiliate of the Parent or the Purchaser (a "THIRD PARTY");
(ii) the acquisition by a Third Party of more than 19.9% of the total assets
of the Company and its subsidiaries, taken as a whole; (iii) the acquisition
by a Third Party of 19.9% or more of the outstanding Shares from the Company
or in a transaction or series of related transactions that results in a
change of control of the Company; (iv) the adoption by the Company of a plan
of liquidation or the declaration or payment of an extraordinary dividend; or
(v) the acquisition by the Company or any of its subsidiaries of more than
19.9% of the outstanding Shares.
-29-
(c) Except as specifically provided in this SECTION 7.3 each party
will bear its own expenses in connection with this Agreement and the
transactions contemplated by this Agreement.
7.4 AMENDMENT. This Agreement may not be amended except in an
instrument in writing signed on behalf of all of the parties to this
Agreement; PROVIDED, HOWEVER, that after approval of the Merger by the
stockholders of the Company, no amendment that would either decrease the
Merger Consideration or change any other term or condition of this Agreement,
if any such change, alone or in the aggregate, would materially and adversely
affect the stockholders of the Company, may be made without the further
approval of the stockholders of the Company; PROVIDED, FURTHER, that, after
purchase of the Shares pursuant to the Offer, no amendment may be made to
SECTION 5.8 without the consent of the indemnified persons.
7.5 WAIVER. At any time prior to the Effective Time, whether before or
after the Special Meeting, any party to this Agreement may (i) subject to the
second proviso in SECTION 7.4, extend the time for the performance of any of
the obligations or other acts of any other party or parties to this
Agreement, (ii) subject to the provisos contained in SECTION 7.4 of this
Agreement, waive any inaccuracies in the representations and warranties
contained in this Agreement by any other applicable party or in any
documents, certificate, or writing delivered pursuant to this Agreement by
any other applicable party, or (iii) subject to the provisos contained in
SECTION 7.4 of this Agreement, waive compliance with any of the agreements of
any other party or with any conditions to its own obligations. Any agreement
on the part of a party to this Agreement to any such extension or waiver will
be valid only if set forth in an instrument in writing signed on behalf of
such party by a duly authorized officer.
ARTICLE VIII
MISCELLANEOUS
8.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND AGREEMENTS. The
representations and warranties made in this Agreement will not survive beyond
the Effective Time or the termination of this Agreement, as the case may be.
No investigation made, or information received by, any party to this
Agreement will affect any representation or warranty made by any other party
to this Agreement. The covenants and agreements of the parties to this
Agreement will survive in accordance with their terms.
8.2 BROKERAGE FEES AND COMMISSIONS. The Company hereby represents and
warrants to the Parent with respect to the Company and any of its
subsidiaries that, except for fees payable to ▇▇▇▇ ▇▇▇▇▇▇▇ (not to exceed
$1.3 million) and fees payable to DLJ pursuant to an agreement described in
the Offer, and except as disclosed in the Offer, the Parent and the Purchaser
hereby represent and warrant to the Company with respect to Parent or any of
its subsidiaries that, no person is entitled to receive from the Company, the
Parent, the Purchaser or any of their subsidiaries, respectively, any
investment banking, brokerage, or finder's fee or fees in connection with
this Agreement or any of the transactions contemplated by this Agreement.
-30-
8.3 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, together with the
Stock Tender Agreements and all the Schedules and Annexes, (a) constitutes
the entire agreement between the parties with respect to the subject matter
of this Agreement and supersedes all other prior written agreements and
understandings and all prior and contemporaneous oral agreements and
understandings between the parties to this Agreement or any of them with
respect to the subject matter of this Agreement and (b) will not be assigned
by operation of law or otherwise, provided that the Parent may assign its
rights and obligations under this Agreement, or those of the Purchaser,
including, without limitation, the right to substitute in place of the
Purchaser a subsidiary as one of the constituent corporations to the Merger
as provided in SECTION 2.1 to any direct or indirect subsidiary of the
Parent, but no such assignment will relieve the assigning party of its
obligations under this Agreement. Any purported assignment of this Agreement
not made in accordance with this SECTION 8.3 will be null, void, and of no
effect. No party to this Agreement has relied upon any representation or
warranty, oral or written, of any other party to this Agreement or any of
their officers, directors, or stockholders except for the representations and
warranties contained in this Agreement and the Stock Tender Agreements.
8.4 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect. Upon any final judicial determination that
any term or other provision is invalid, illegal, or incapable of being
enforced, the parties to this Agreement will negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated by this Agreement be consummated to the extent possible.
8.5 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement will be in writing and will be deemed to
have been duly given when delivered in person, by cable, telegram or telex,
facsimile or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties as follows:
(a) if to the Parent or the Purchaser, to:
Affiliated Computer Services, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
Affiliated Computer Services, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
-31-
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, to:
BRC Holdings, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address will be effective only upon
receipt).
8.6 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF THE LAWS
THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
8.7 SPECIFIC PERFORMANCE. Each of the parties to this Agreement
acknowledges and agrees that the other parties to this Agreement would be
irreparably damaged in the event any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. Accordingly, each of the parties to this Agreement agrees that
each of them will be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions of this Agreement in any action
instituted in any court of the United States or any state having subject
matter jurisdiction, in addition to any other remedy to which such party may
be entitled, at law or in equity.
-32-
8.8 OTHER POTENTIAL BIDDERS.
(a) Subject to the next sentence, the Company shall not, directly
or indirectly, through any officer, director, employee, representative or
agent of the Company or any of its subsidiaries, solicit or encourage
(including by way of furnishing information) the initiation of any inquires
or proposals regarding a Third Party Acquisition (any of the foregoing
inquiries or proposals being referred to herein as an "Acquisition
Proposal"). Notwithstanding the foregoing, nothing contained in this SECTION
8.8(a) or any other provision of this Agreement shall prevent the Board if it
determines in good faith, after consultation with, and the receipt of advice
from, outside counsel, that it is required to do so in order to discharge
properly its fiduciary duties, from considering, negotiating, approving and
recommending to the stockholders of the Company an unsolicited bona fide
written Acquisition Proposal, or providing information to any third party in
connection therewith, which the Board of Directors of the Company determines
in good faith (after consultation with its financial advisors and legal
counsel) may reasonably result in a transaction more favorable to the
Company's stockholders than the transaction contemplated by this Agreement
(any Acquisition Proposal meeting such criterion, including those specified
in the immediately preceding parenthetical proviso, being referred to herein
as a "SUPERIOR PROPOSAL"). Nothing therein shall prohibit the Company from
complying with Rules 14d-9 and 14e-2 under the Exchange Act with respect to
any other tender offers.
(b) The Company shall promptly, but in no event later than 24
hours, notify Parent after receipt of any Acquisition Proposal or any request
for nonpublic information relating to the Company or any of its subsidiaries
in connection with an Acquisition Proposal or for access to the properties,
books or records of the Company or any subsidiary by any person or entity
that informs the Board that it is considering making, or has made, an
Acquisition Proposal. Such notice to Parent shall be made orally and in
writing and shall indicate in reasonable detail the identity of the offeror
and the terms and conditions of such proposal, inquiry or contact.
(c) If the Board receives a request for material nonpublic
information by a party who makes an unsolicited bona fide Acquisition
Proposal and the Board determines that such proposal, if consummated pursuant
to its terms would be a Superior Proposal, then, and only in such case, the
Company may, subject to the execution of a confidentiality agreement
substantially similar to that then in effect between the Company and Parent,
provide such party with access to information regarding the Company.
(d) The Company shall immediately cease and cause to be terminated
any existing discussions or negotiations with any parties (other than the
Parent and the Purchaser) conducted heretofore with respect to any of the
foregoing. The Company agrees not to release any third party from any
confidentiality or standstill agreement to which the Company is a party.
(e) The Company shall ensure that the officers, directors and
employees of the Company and its subsidiaries and any investment banker or
other advisor or representative retained by the Company are aware of the
restrictions described in this Section; and shall be responsible for any
breach of this SECTION 8.8 by such bankers, advisors and representatives.
-33-
8.9 DESCRIPTIVE HEADINGS; REFERENCES. The descriptive headings in this
Agreement are inserted for convenience of reference only and are not intended
to be part of or to affect the meaning or interpretation of this Agreement.
References in this Agreement to Sections, Annexes, and Schedules are
references to the Sections, Annexes, and Schedules of this Agreement unless
the context indicates otherwise.
8.10 PARTIES IN INTEREST. This Agreement will be binding upon and inure
solely to the benefit of each party to this Agreement, and, except as
provided in SECTIONS 5.9 and 8.11, nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights or remedies
of any nature whatsoever under or by reason of this Agreement.
8.11 BENEFICIARIES. The Parent hereby acknowledges that SECTION 5.8 is
intended to benefit the indemnified parties referred to in SECTION 5.8, any
of whom will be entitled to enforce SECTION 5.8 against the Surviving
Corporation, the Parent or the Company, as the case may be.
8.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original, but all of
which will constitute one and the same agreement.
8.13 OBLIGATIONS. The Parent will perform or cause the Purchaser to
perform all of the obligations of the Purchaser under this Agreement,
including consummation of the Merger, in accordance with the terms of this
Agreement.
8.14 CERTAIN DEFINITIONS. For the purposes of this Agreement: (a) the
term "SUBSIDIARY" means each person in which a person owns or controls,
directly or through one or more subsidiaries, 50 percent or more of the stock
or other interests having general voting power in the election of directors
or persons performing similar functions or more than 50% of the equity
interests; (b) the term "PERSON" will be broadly construed to include any
individual, corporation, company, partnership, trust, joint stock company,
association, or other private or governmental entity; (c) the term "GROUP"
has the meaning given in Section 13(d)(3) of the Exchange Act; (d) the term
"AFFILIATE" has the meaning given in Rule 144(a)(1) under the Securities Act;
and (e) the term "BUSINESS DAY" has the meaning given in Rule 14d-1(c)(6)
under the Exchange Act.
-34-
IN WITNESS WHEREOF, each of the parties to this Agreement has caused
this Agreement to be executed on its behalf by its duly authorized officers,
all as of the day and year first above written.
AFFILIATED COMPUTER SERVICES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President,
Chief Financial Officer
ACS ACQUISITION CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
BRC HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Operating
Officer
-35-
ANNEX A
Terms used in this Annex A have the meanings ascribed to them in the
Agreement and Plan of Merger dated as of October 19, 1998 (the "MERGER
AGREEMENT").
Notwithstanding any other provisions of the Offer, the Purchaser will
not be required to accept for payment or (subject to any applicable rules and
regulations of the SEC, including Rule 14e-l(c) relating to the obligation of
the Purchaser to pay for or return tendered Shares promptly after the
termination or withdrawal of the Offer) to pay for tendered Shares, or may
terminate or amend the Offer as provided in the Agreement, or may postpone
the acceptance for payment of, or payment for, Shares (whether or not any
other Shares have been accepted for payment or paid for pursuant to the
Offer) if prior to the expiration of the Offer (i) the Minimum Condition has
not been satisfied; (ii) the waiting period under the HSR Act has not expired
or been terminated with respect to purchase of the Shares; or (iii) if at any
time on or after the date of the Merger Agreement, and at any time before the
time of acceptance for payment of any such Shares, any of the following
occurs:
(a) any of the representations or warranties of the Company contained
in the Merger Agreement is not true and correct at and as of any date prior
to the expiration date of the Offer as if made at and as of such time,
except for (i) failures (other than with respect to the Company's
investment in MatriDigm) to be true and correct as are not, individually or
in the aggregate, reasonably expected to result in a Company Material
Adverse Effect; or (ii) failures to comply as are capable of being and are
cured prior to the earlier of (A) 10 days after written notice from the
Purchaser to the Company of such failure or (B) two business days prior to
the expiration date of the Offer;
(b) the Company has failed to comply with any of its obligations
under the Merger Agreement, except for(i) failures to so comply as are not,
individually or in the aggregate, reasonably expected to result in a
Company Material Adverse Effect; and (ii) failures to comply as are capable
of being and are cured prior to the earlier of (A) 10 days after written
notice from the Purchaser to the Company of such failure or (B) two
business days prior to the expiration date of the Offer;
(c) the Board of Directors of the Company has withdrawn or modified
in any respect adverse to the Purchaser or the Parent its recommendation of
the Offer or taken any position inconsistent with such, recommendation;
(d) the Merger Agreement has been terminated in accordance with its
terms;
(e) the Company has reached an agreement with the Parent or the
Purchaser that the Offer or the Merger be terminated or amended;
(f) any state, federal, or foreign government, or governmental
authority has taken any action, or proposed, sought, promulgated, or
enacted, or any state, federal, or
A-1
foreign government or governmental authority or court has entered,
enforced, or deemed applicable to the Offer or the Merger, any statute,
rule, regulation, judgment, order, or injunction that is reasonably likely
to (i) make the acceptance for payment of, the payment for, or the
purchase of, some or all of the Shares illegal or otherwise restrict,
materially delay, prohibit consummation of, or make materially more
costly, the Offer or the Merger, (ii) result in a material delay in or
restrict the ability of the Purchaser, or render the Purchaser unable,
to accept for payment, pay for or purchase some or all of the Shares in
the Offer or the Merger, (iii) require the divestiture by the Parent, the
Purchaser, or the Company or any of their respective subsidiaries or
affiliates of all or any material portion of the business, assets, or
property of any of them or any Shares, or impose any material limitation
on the ability of any of them to conduct their business and own such
assets, properties, and Shares, (iv) impose material limitations on the
ability of the Parent or the Purchaser to acquire or hold or to exercise
effectively all rights of ownership of the Shares, including the right to
vote any Shares acquired by either of them on all matters properly
presented to the Stockholders of the Company,(v) impose any limitations on
the ability of the Parent, the Purchaser, or any of their respective
subsidiaries or affiliates effectively to control in any material respect
the business or operations of the Company, the Parent, the Purchaser, or
any of their respective subsidiaries or affiliates;
(g) any change (or any condition, event or development involving a
prospective change) has occurred or been threatened in the business,
properties, assets, liabilities, capitalization, stockholders' equity,
financial condition, operations, licenses or franchises results of
operations, or prospects of the Company or any of its subsidiaries, that is
reasonably expected to result in a Company Material Adverse Effect;
(h) there has occurred (i) any general suspension of trading in, or
limitation on prices for, securities on any national securities exchange or
in the over-the-counter market or quotations for shares traded thereon as
reported by the NASDAQ or otherwise, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or (whether or not mandatory), (iii) a commencement of a war or
armed hostilities or other national or international calamity directly or
indirectly involving the United States other than as a participant in
police actions sponsored by international organizations, (iv) any
limitation (whether or not mandatory) by any governmental authority on the
extension of credit by banks or other financial institutions, (v) after the
date of the Merger Agreement, an aggregate decline of at least 25% in the
Dow ▇▇▇▇▇ Industrial Average or Standard & Poor's 500 Index or a decline in
either such index of 12-1/2% in any 24-hour period, or (vi) in the case of
any of the occurrences referred to in clauses (i) through (iv) existing at
the time of the commencement of the Offer, in the reasonable judgment of
the Purchaser, a material acceleration or worsening thereof;
(i) any person or group other than the Parent or the Purchaser and
their affiliates has entered into a definitive agreement or an agreement in
principle with the Company with respect to a tender offer or exchange offer
for any Shares or a merger, consolidation, or other business combination or
acquisition with or involving the Company or any of its subsidiaries; or
A-2
(j) any material approval, permit, authorization, consent, or waiting
period of any domestic or foreign, governmental, administrative, or
regulatory entity.(federal, state, local, provincial or otherwise) has not
been obtained or satisfied on terms satisfactory to the Purchaser in its
sole discretion
that, in the good faith judgment of the Purchaser, makes it inadvisable to
proceed with the Offer or with such acceptance for payment of, or payment
for, Shares or to proceed with the Merger.
The foregoing conditions are for the sole benefit of the Purchaser and
may be asserted by the Purchaser regardless of the circumstances giving rise
to any such condition or may be waived by the Purchaser in whole or in part
at any time and from time to time in its sole discretion (subject to the
terms of the Agreement). The failure by the Purchaser at any time to
exercise any of the foregoing rights will not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances will not be deemed to waiver with respect to any other facts or
circumstances, and each such right will be deemed an ongoing right that may
be asserted at any time and from time to time.
▇-▇
▇▇▇▇▇ ▇-▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, individually and as Independent Executor of the
Estate of ▇.▇. ▇▇▇▇▇▇ and as Director of the ▇▇▇▇▇▇ Family Foundation,
Inc.
▇▇▇▇ ▇▇▇▇▇▇▇
B1-1
ANNEX B-2
STOCK TENDER AGREEMENT
STOCK TENDER AGREEMENT (this "Agreement"), dated October 19, 1998, by
and among AFFILIATED COMPUTER SERVICES, INC., a Delaware corporation
("Parent"), ACS ACQUISITION CORPORATION, a Delaware corporation and
wholly-owned subsidiary of the Parent ("Purchaser") and each of the parties
listed on the signature pages hereto (each a "Stockholder", and collectively,
the "Stockholders").
WHEREAS, each of the Stockholders is, as of the date hereof, the record
and beneficial owner of the shares of common stock, par value $.01 per share
(the "Common Stock"), of BRC HOLDINGS, INC., a Delaware corporation (the
"Company"), set forth opposite its name on Annex I hereto;
WHEREAS, Parent, Purchaser and the Company concurrently herewith are
entering into an Agreement and Plan of Merger, dated as of the date hereof
(the "Merger Agreement"), which provides, among other things, for the
acquisition of the Company by Parent by means of a cash tender offer (the
"Offer") by Purchaser for all of the outstanding shares of Common Stock and
for the subsequent merger (the "Merger") of Purchaser with and into the
Company upon the terms and subject to the conditions set forth in the Merger
Agreement; and
WHEREAS, as a condition to the willingness of Parent and Purchaser to
enter into the Merger Agreement, and in order to induce Parent and Purchaser
to enter into the Merger Agreement, the Stockholders have agreed to enter
into this Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by Parent
and Purchaser of the Merger Agreement and the mutual representations,
warranties, covenants and agreements set forth herein and therein, and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. Each of
the Stockholders hereby represents and warrants to Parent and Purchaser,
severally and not jointly, as follows:
(a) Such Stockholder is the beneficial owner of the shares of
Common Stock (as may be adjusted from time to time pursuant to Section 6
hereof, the "Shares") set forth opposite its name on Annex I to this
Agreement. Such Shares are held of record, in each case, by the custodian of
such Stockholder. On the date hereof, the Shares opposite such Stockholder's
name constitute all of the Shares owned by such Stockholder. Such
Stockholder has the exclusive right to vote or dispose of (or exercise the
voting or disposition of) such Shares.
(b) Such Stockholder has all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby and has taken all action necessary to authorize the execution,
delivery and performance of this Agreement.
1
(c) This Agreement has been duly authorized, validly executed
and delivered by such Stockholder and constitutes the legal, valid and
binding obligation of such Stockholder, enforceable against such Stockholder
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting enforcement of
creditors' rights generally and by general equitable principles (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
(d) The execution and delivery of this Agreement by such
Stockholder do not, and the performance by such Stockholder of its
obligations hereunder will not, require any filing by such Stockholder with,
or any permit, authorization, consent or approval of, any Governmental or
Regulatory Authority or any third party other than an amendment to Schedule
13D and Form 4 and/or Form 5. There is no beneficiary or holder of a voting
trust certificate or other interest of any trust of which such Stockholder is
a trustee whose consent is required for the execution and delivery of this
Agreement or the consummation by such Stockholder of the transactions
contemplated hereby.
(e) The Shares and the certificates representing the Shares
owned by such Stockholder are now and at all times during the term hereof
will be held by such Stockholder, or by a nominee or custodian for the
benefit of such Stockholder, free and clear of all Liens, proxies, voting
trusts or agreements or understandings or arrangements whatsoever, except for
any such liens or proxies arising hereunder, and not subject to any
preemptive rights.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.
Each of Parent and Purchaser hereby represents and warrants to the
Stockholders as follows:
(a) Parent and Purchaser are corporations duly organized,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation, and each of Parent and Purchaser has full
corporate power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby and has taken all necessary corporate
action to authorize the execution, delivery and performance of this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by each of Parent and Purchaser and constitutes the legal, valid
and binding obligation of each of Parent and Purchaser, enforceable against
each of them in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(c) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance by Parent and Purchaser of their
obligations hereunder and the consummation of the transactions contemplated
hereby will not, (i) conflict with, result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under,
result in or give to any person any right of termination, cancellation,
modification or acceleration of, or result in the creation or imposition of
any Lien upon any of the assets or properties of Parent or Purchaser under,
any of the terms, conditions or provisions of (A) the certificates or
2
articles of incorporation or bylaws of Parent or Purchaser or (B) (x) any
Law or Order of any Governmental or Regulatory Authority applicable to Parent
or Purchaser or any of their respective assets or properties, or (y) any
Contract to which Parent or Purchaser is a party or by which Parent or
Purchaser or any of their respective assets or properties is bound, excluding
from the foregoing clauses (x) and (y) conflicts, violations, breaches,
defaults, terminations, modifications, accelerations and creations and
impositions of Liens which, individually or in the aggregate, could not be
reasonably expected to have a material adverse effect on the ability of
Parent and Purchaser to consummate the transactions contemplated by this
Agreement, or (ii) require any filing by Parent or Purchaser with, or any
permit, authorization, consent or approval of, any Governmental or Regulatory
Authority.
SECTION 3. PURCHASE AND SALE OF THE SHARES. Each of the Stockholders
hereby agrees to tender the Shares set forth opposite its name on Annex I to
this Agreement into the Offer promptly, and in any event no later than the
fifth business day following the commencement of the Offer pursuant to
Section 1.1 of the Merger Agreement and not to withdraw any Shares so
tendered unless the Offer is terminated or has expired; provided that if such
Stockholder shall thereafter acquire shares of Common Stock, then any such
Shares shall be tendered on the next succeeding business day after such
acquisition. Purchaser hereby agrees to purchase all the Shares so tendered
at a price per Share equal to $19.00 per Share or any higher price that may
be paid in the Offer; provided, however, that Purchaser's obligation to
accept for payment and pay for the Shares in the Offer is subject to all the
terms and conditions of the Offer set forth in the Merger Agreement and Annex
A thereto.
SECTION 4. TRANSFER OF THE SHARES; PROXIES AND NON-INTERFERENCE. Prior
to the termination of this Agreement, except as otherwise provided herein,
none of the Stockholders shall, directly or indirectly, (i) offer for sale,
sell, transfer, tender, pledge, encumber, assign, or otherwise dispose of,
any or all of the Shares; (ii) enter into any Contract, option or
understanding with respect to any transfer of any or all of the Shares or any
interest therein; (iii) except as provided herein, grant any proxy,
power-of-attorney or other authorization or consent in or with respect to the
Shares; (iv) deposit the Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Shares; or (v) take any other
action that would in any way restrict, limit or interfere with the
performance of such Stockholder's obligations hereunder or the transactions
contemplated hereby.
SECTION 5. STOCKHOLDER CAPACITY. No person executing this Agreement
who is or becomes during the term hereof a director of the Company makes any
agreement or understanding herein in his or her capacity as such director.
Each Shareholder signs solely in his or her capacity as the owner of, or the
trustee of a trust whose beneficiaries are the owners of, such Shareholder
Shares.
SECTION 6. CERTAIN EVENTS. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Common Stock or the
acquisition of additional shares of Common Stock or other securities or
rights of the Company by any Stockholder, the number of Shares shall be
adjusted appropriately, and this Agreement and the rights and obligations
hereunder shall attach to any additional shares
3
of Common Stock or other securities or rights of the Company issued to or
acquired by any such Stockholder.
SECTION 7. CERTAIN OTHER AGREEMENTS. From the date of this Agreement
until the earlier of the termination of this Agreement or the Effective Time,
none of the Stockholders shall, and none of the Stockholders shall permit or
authorize any advisor or representative retained by or acting for or on
behalf of any such Stockholder to, directly or indirectly, (i) take any
action to initiate, solicit, continue, encourage or facilitate (including by
way of furnishing or disclosing non-public information) any inquiries or the
making of any offer or proposal with respect to a merger, reorganization,
share exchange, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any
of its subsidiaries or any proposal or offer to acquire in any manner,
directly or indirectly, 15% or more of the shares of any class of voting
securities of the Company or any of its subsidiaries or a substantial portion
of the assets of the Company or any of its subsidiaries, other than the
transactions contemplated by the Merger Agreement or by this Agreement (any
of the foregoing being referred to as an "Acquisition Proposal"), or (ii)
engage in negotiations, discussions or communications regarding or disclose
any information relating to the Company or any of its subsidiaries or afford
access to the properties, books or records of the Company or any of its
subsidiaries to any person, corporation, partnership or other entity or group
(a "Potential Acquiror") that may be considering making, or has made, an
Acquisition Proposal or knowingly facilitate any effort or attempt to make or
implement an Acquisition Proposal or accept an Acquisition Proposal. The
obligations of each of the Stockholders pursuant to this Section are several
and not joint.
SECTION 8. FURTHER ASSURANCES. Each of the Stockholders shall, upon
request of Parent or Purchaser, take such further actions as may reasonably
be necessary or desirable to carry out the provisions hereof, provided that
the Stockholders shall not be required to incur any additional costs or
expenses or receive less-than the agreed price without their consent.
SECTION 9. TERMINATION. Except as otherwise provided in this
Agreement, this Agreement, and all rights and obligations of the parties
hereunder, shall terminate immediately upon the earlier of (i) the
consummation of the Offer, (ii) the termination of the Merger Agreement in
accordance with its terms or (iii) the Effective Time; provided, however,
that Sections 7 and 10 shall survive any termination of this Agreement.
SECTION 10. EXPENSES. All fees and expenses incurred by any one party
hereto shall be borne by the party incurring such fees and expenses.
SECTION 11. PUBLIC ANNOUNCEMENTS. Each of the Stockholders, Parent and
Purchaser agrees that it will not issue any press release or otherwise make
any public statement with respect to this Agreement or the transactions
contemplated hereby without the prior consent of the other party, which
consent shall not be unreasonably withheld or delayed; provided, however,
that such disclosure can be made without obtaining such prior consent if (i)
the disclosure is required by law, and (ii) the party making such disclosure
has first used its best efforts to consult with the other party about the
form and substance of such disclosure. The obligations of each of the
Stockholders pursuant to this Section are several and not joint.
4
SECTION 12. DEFINITIONS. As used in this Agreement, the following
terms shall have the meanings indicated below:
"CONTRACT" means any agreement, lease, evidence of indebtedness,
mortgage, indenture, security agreement or other contract (whether written or
oral).
"LAW" means any law, statute, rule, regulation, ordinance and other
pronouncement having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"LIENS" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale Contract, title retention Contract or other Contract to
give any of the foregoing.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality
of the United States, any foreign country or any domestic or foreign state,
county, city or other political subdivision.
"ORDER" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
SECTION 13. MISCELLANEOUS.
(a) All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class
postage prepaid) to the parties at the following addresses or facsimile
numbers:
(A) if to any or all the Stockholders, to:
▇▇▇▇ ▇▇▇▇▇▇▇
Capital Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
5
(B) if to Parent or Purchaser, to:
Affiliated Computer Services, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number
as provided in this Section, be deemed given upon receipt, and (iii) if
delivered by mail in the manner described above to the address as provided in
this Section, be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
person to whom a copy of such notice is to be delivered pursuant to this
Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by
giving notice specifying such change to the other parties hereto.
(b) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement.
(c) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall be
considered one and the same agreement.
(d) This Agreement constitutes the entire agreement, and
supersedes all prior agreements and understandings, whether written and oral,
among the parties hereto with respect to the subject matter hereof.
(e) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas without giving effect to the
principles of conflicts of laws thereof; provided, however, that the
consummation and effectiveness of the Merger will be governed and construed
in accordance with the laws of the State of Delaware.
(f) Each party hereby irrevocably submits to the exclusive
jurisdiction of the courts in the State of Texas or the United States
District Court for the Northern District of Texas
6
in any action, suit or proceeding arising in connection with this Agreement,
and agrees that any such action, suit or proceeding shall be brought only in
such court (and waives any objection based on forum non conveniens or any
other objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this paragraph (f) and
shall not be deemed to be a general submission to the jurisdiction of said
Courts or in the State of Texas other than for such purposes. Each party
hereto hereby waives any right to a trial by jury in connection with any such
action, suit or proceeding.
(g) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the
other parties, and any such purported assignment shall be null and void;
provided, however, Purchaser or Parent may, without the prior written consent
of any Stockholder assign its rights and obligations to any of its direct or
indirect wholly owned subsidiaries. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable
by, the parties and their respective successors and assigns, and the
provisions of this Agreement are not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
(h) If any term, provision, covenant or restriction herein is
held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable or against its regulatory policy, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
(i) Each of the parties hereto acknowledge and agrees that in
the event of any breach of this Agreement, each non-breaching party would be
irreparably and immediately harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto (i) will waive, in
any action for specific performance, the defense of adequacy of a remedy at
law and (ii) shall be entitled, in addition to any other remedy to which they
may be entitled at law or in equity, to compel specific performance of this
Agreement.
(j) No amendment, modification or waiver in respect to this
Agreement shall be effective unless it shall be in writing and signed by each
party hereto; provided that Annex I hereto may be supplemented by Parent by
adding the name and other relevant information concerning any stockholder of
the Company who agrees to be bound by the terms of this Agreement without the
agreement of any other party hereto, and thereafter such added stockholder
shall be treated as a "Stockholder" for all purposes of this Agreement.
[THE REMAINDER OF PAGE IS INTENTIONALLY OMITTED]
7
IN WITNESS WHEREOF, each of Parent, the Purchaser and the Stockholders
have caused this Agreement to be duly executed and delivered as of the date
first written above.
AFFILIATED COMPUTER SERVICES, INC.
By:
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
ACS ACQUISITION CORPORATION
By:
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
[STOCKHOLDERS]
--------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, individually and as
Independent Executor of the Estate of
▇.▇. ▇▇▇▇▇▇ and as Director of the
▇▇▇▇▇▇ Family Foundation, Inc.
--------------------------------------------
--------------------------------------------
8
ANNEX I
Ownership of Company Common Stock
STOCKHOLDER NUMBER OF SHARES
----------- ----------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, individually and 2,960,890
as Independent Executor of the Estate of
▇.▇. ▇▇▇▇▇▇ and as Director of the
▇▇▇▇▇▇ Family Foundation, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ 344,246
9