Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
Dated as of October 5, 2001,
among
AQUENT, INC.,
JETELECTRO ACQUISITION CORP.
and
RENAISSANCE WORLDWIDE, INC.
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Table of Contents
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Page
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ARTICLE I
The Merger............................................................................. 1
Section 1.01. The Merger......................................................... 1
Section 1.02. Closing............................................................ 2
Section 1.03. Effective Time..................................................... 2
Section 1.04. Effects............................................................ 2
Section 1.05. Articles of Organization and By-laws............................... 2
Section 1.06. Directors.......................................................... 2
Section 1.07. Officers........................................................... 3
ARTICLE II
Effect on the Capital Stock of the Constituent Corporations; Exchange of Certificates.. 3
Section 2.01. Effect on Capital Stock............................................ 3
Section 2.02. Exchange of Certificates........................................... 5
ARTICLE III
Representations and Warranties of the Company.......................................... 7
Section 3.01. Organization. Standing and Power................................... 7
Section 3.02. Company Subsidiaries............................................... 8
Section 3.03. Capital Structure.................................................. 8
Section 3.04. Authority; Execution and Delivery; Enforceability.................. 9
Section 3.05. No Conflicts: Consents............................................. 10
Section 3.06. SEC Documents; Undisclosed Liabilities; Certain Agreements......... 12
Section 3.07. Information Supplied............................................... 13
Section 3.08. Absence of Certain Changes or Events............................... 13
Section 3.09. Taxes.............................................................. 14
Section 3.10. ERISA Compliance................................................... 15
Section 3.11. Litigation......................................................... 17
Section 3.12. Compliance with Applicable Laws.................................... 17
Section 3.13. Intellectual Property.............................................. 18
Section 3.14. Brokers; Fees and Expenses......................................... 18
Section 3.15. Opinion of Financial Advisor....................................... 19
Section 3.16. Stock Options and Employee Stock Purchase Plan..................... 19
Section 3.17. Accounts Receivable................................................ 19
Section 3.18. Properties......................................................... 20
Section 3.19. Government Contracts............................................... 20
Section 3.20. Books and Records.................................................. 20
ARTICLE IV
Representations and Warranties of Parent and Sub....................................... 20
Section 4.01. Organization, Standing and Power................................... 20
Section 4.02. Sub................................................................ 20
Section 4.03. Authority; Execution and Delivery; Enforceability.................. 21
Section 4.04. No Conflicts; Consents............................................. 21
Section 4.05. Information Supplied............................................... 22
Section 4.06. Brokers............................................................ 22
Section 4.07. Financial Ability to Perform....................................... 22
ARTICLE V
Covenants Relating to Conduct of Business.............................................. 23
Section 5.01. Conduct of Business................................................ 23
Section 5.02. No Solicitation by Company......................................... 27
ARTICLE VI
Additional Agreements.................................................................. 29
Section 6.01. Preparation of Proxy Statement; Stockholders Meeting............... 29
Section 6.02. Access to Information; Confidentiality............................. 30
Section 6.03. Reasonable Efforts; Notification................................... 30
Section 6.04. Benefit Plans...................................................... 31
Section 6.05. Indemnification; D&O Insurance, etc................................ 32
Section 6.06. Fees and Expenses.................................................. 33
Section 6.07. Public Announcements............................................... 34
Section 6.08. Actions Respecting Commitment Letters; Financing................... 34
Section 6.09. Rights Agreement................................................... 35
Section 6.10. Stockholder Litigation............................................. 35
Section 6.11. Lease Termination.................................................. 36
ARTICLE VII
Conditions Precedent................................................................... 36
Section 7.01. Conditions to Each Party's Obligation To Effect The Merger......... 36
Section 7.02. Conditions Precedent to Parent's and Sub's Obligations............. 36
Section 7.03. Conditions to Obligation of Company................................ 37
ARTICLE VIII
Termination, Amendment and Waiver...................................................... 38
Section 8.01. Termination........................................................ 38
Section 8.02. Procedure and Effect of Termination................................ 39
Section 8.03. Amendment.......................................................... 40
Section 8.04. Extension; Waiver.................................................. 40
Section 8.05. Procedure for Termination, Amendment, Extension or Waiver.......... 40
ARTICLE IX
General Provisions..................................................................... 40
Section 9.01. Nonsurvival of Representations and Warranties...................... 40
Section 9.02. Notices............................................................ 41
Section 9.03. Definitions........................................................ 42
Section 9.04. Definitions Cross Reference Table.................................. 43
Section 9.05. Interpretation..................................................... 44
Section 9.06. Severability....................................................... 45
Section 9.07. Counterparts....................................................... 45
Section 9.08. Entire Agreement; No Third-Party Beneficiaries..................... 45
Section 9.09. Governing Law...................................................... 45
Section 9.10. Assignment......................................................... 45
Section 9.11. Enforcement........................................................ 45
Section 9.12. Consents........................................................... 46
Section 9.13. Headings........................................................... 46
Section 9.14. Parent Guarantee................................................... 46
Exhibit A - Articles of Organization of Surviving Corporation
Company Disclosure Schedule
Buyer Disclosure Schedule
Schedule 5.01(a)(ix) - Prohibited Capital Expenditures
Schedule 6.08 - Permitted Actions of Parent
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of October 5,
2001, among Aquent, Inc., a Massachusetts corporation ("Parent"), JetElectro
Acquisition Corp., a Massachusetts corporation ("Sub") and a wholly owned
Subsidiary (as defined in Section 9.03) of Parent, and Renaissance Worldwide,
Inc., a Massachusetts corporation (the "Company").
WHEREAS the respective Boards of Directors of Parent, Sub and the Company
have approved the acquisition of the Company by Parent on the terms and subject
to the conditions set forth in this Agreement;
WHEREAS a special committee of the Board of Directors of the Company
comprised of the Company's independent directors (the "Special Committee") has
unanimously approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS the respective Boards of Directors of Parent, Sub and the Company
have approved the merger (the "Merger") of Sub with and into the Company, on the
terms and subject to the conditions set forth in this Agreement, whereby,
subject to the exceptions set forth below, each issued share of Common Stock, no
par value per share, of the Company ("Company Common Stock") shall be converted
into the right to receive cash consideration as specified below;
WHEREAS Parent, Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
The Merger
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Section 1.01. The Merger. On the terms and subject to the satisfaction
or waiver of the conditions set forth in this Agreement, and in accordance with
the Massachusetts Business Corporation Law (the "BCL"), Sub shall be merged with
and into the Company at the Effective Time (as defined in Section 1.03). At the
Effective Time, the separate corporate existence of Sub shall cease and the
Company shall continue as the surviving corporation (the "Surviving
Corporation"). The Surviving Corporation shall possess all the rights,
privileges, immunities, powers and franchises of the Company and Sub, and the
Surviving Corporation shall by operation of law become liable for all of the
debts, liabilities and duties of the Company and Sub. The name of the Surviving
Corporation shall continue to be Renaissance Worldwide, Inc. and the purpose
thereof shall be as set forth in Section 2 of the Articles of Organization of
the Surviving Corporation.
Section 1.02. Closing. The closing (the "Closing") of the Merger shall
take place at the offices of ▇▇▇▇ and ▇▇▇▇ LLP in Waltham, MA at 10:00 a.m. on
the second business day following the satisfaction (or, to the extent permitted
by Law, waiver by the appropriate parties) of the conditions set forth in
Article VII, or at such other place, time and date as shall be agreed in writing
between Parent and the Company. The date on which the Closing occurs is referred
to in this Agreement as the "Closing Date".
Section 1.03. Effective Time. Prior to the Closing, Parent shall
prepare and give the Company and its counsel the opportunity to review, and on
the Closing Date or as soon as practicable thereafter Parent shall file with the
Secretary of State of The Commonwealth of Massachusetts, articles of merger or
other appropriate documents (in any such case, the "Articles of Merger")
executed in accordance with the relevant provisions of the BCL and shall make
all other filings or recordings required under the BCL. The Merger shall become
effective at such time as the Articles of Merger are duly filed with such
Secretary of State, or at such other time as Parent and the Company shall agree
and specify in the Articles of Merger (the time the Merger becomes effective
being the "Effective Time").
Section 1.04. Effects. The Merger shall have the effects set forth in
Section 80 of the BCL.
Section 1.05. Articles of Organization and By-laws.
(a) The Articles of Organization of the Company shall be amended and
restated at the Effective Time to read in the form of Exhibit A, and, as so
amended, such Articles of Organization shall be the Articles of
Organization of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable Law.
(b) Subject to Section 6.05, the By-laws of the Company as in effect
immediately prior to the Effective Time shall be the By-laws of the
Surviving Corporation until thereafter changed or amended as provided
therein or by applicable Law.
Section 1.06. Directors. At the Closing, Parent shall designate the
directors of the Surviving Corporation and such directors shall hold office
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
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Section 1.07. Officers. At the Closing, Parent shall designate the
officers of the Surviving Corporation and such officers shall hold office until
the earlier of their resignation or removal or until their respective successors
are duly elected or appointed and qualified, as the case may be.
ARTICLE II
Effect on the Capital Stock of the Constituent Corporations;
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Exchange of Certificates
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Section 2.01. Effect on Capital Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any shares of
Company Common Stock or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of capital
stock of Sub shall be converted into and become 5,000 fully paid and non-
assessable shares of common stock, no par value per share, of the Surviving
Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each share
of Company Common Stock that is owned directly by the Company, any
Subsidiary of the Company, Parent or Sub shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and
no other consideration shall be delivered or deliverable in exchange
therefor.
(c) Conversion of Company Common Stock. Subject to Sections 2.01(b)
and 2.01(d), each issued share of Company Common Stock shall be converted
into the right to receive $2.00 in cash, subject to adjustment for any
stock split, stock dividend or combination of stock that may occur from the
date hereof and prior to the Effective Time. The aggregate cash payable
upon the conversion of shares of Company Common Stock pursuant to this
Section 2.01(c) is referred to as the "Merger Consideration". As of the
Effective Time, all such shares of Company Common Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall cease
to exist, and each holder of a certificate representing any such shares of
Company Common Stock shall cease to have any rights with respect thereto,
except the right to receive Merger Consideration upon surrender of such
certificate in accordance with Section 2.02, without interest.
(d) Appraisal Rights. Notwithstanding anything in this Agreement to
the contrary, shares ("Appraisal Shares") of Company Common Stock that are
outstanding immediately prior to the Effective Time and that are held by
any Person who is entitled to demand and properly demands appraisal of such
Appraisal Shares pursuant to, and who complies in all respects with,
Sections 86 through 97 of the BCL (the "Appraisal Provisions") shall not be
converted into Merger Consideration as provided in Section 2.01(c), but
rather the holders of
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Appraisal Shares shall be entitled to payment of the fair value of such
Appraisal Shares in accordance with the Appraisal Provisions; provided,
however, that if any such holder shall fail to perfect or otherwise shall
waive, withdraw or lose the right to appraisal under the Appraisal
Provisions, then the right of such holder to be paid the fair value of such
holder's Appraisal Shares shall cease and such Appraisal Shares shall be
deemed to have been converted as of the Effective Time into, and to have
become exchangeable solely for the right to receive, Merger Consideration
as provided in Section 2.01(c), without interest, upon surrender of such
certificate in accordance with the provisions of Section 2.02. Company
shall give Parent (i) prompt notice of any demand for payment of fair
market value received by Company, the withdrawal of any such demand, and
any other instrument served pursuant to the Appraisal Provisions and
received by Company and (ii) the opportunity to direct all negotiations and
proceedings with respect to any demand for payment of fair market value
under the Appraisal Provisions. Company shall not, except with the prior
written consent of Parent, make any payment with respect to any demand for
payment of fair market value or offer to settle or settle any such demand,
or agree to do any of the foregoing.
(e) Company Stock Options. Parent and the Company agree that, in
accordance with the provisions of the Company Stock Option Plans (as
defined in Section 3.16), each outstanding option to purchase Company
Common Stock under any Company Stock Option Plan shall either (i) be
terminated as of the Effective Time or (ii) from and after the Effective
Time entitle the holder thereof to receive, upon exercise in accordance
with the terms thereof (including but not limited to any terms with respect
to vesting), an amount in cash (less applicable withholding taxes) equal to
the product of (x) the number of shares of Company Common Stock previously
subject to such stock option multiplied by (y) the amount, if any, by which
$2.00 (subject to adjustment for any stock split, stock dividend or
combination of stock that may occur from the date hereof and prior to the
Effective Time) exceeds the per share exercise price of such stock option.
Parent and Company further agree that each outstanding option to purchase
the capital stock of GovConnect, Inc. pursuant to the GovConnect, Inc. 2000
Stock Incentive Plan shall be terminated as of the Effective Time in
accordance with the provisions of the GovConnect, Inc. 2000 Stock Incentive
Plan. In the event and to the extent that any Company Stock Option Plan
permits or requires the Company Board (or any committee thereof) to
exercise discretion with respect to outstanding stock options, the Company
Board (or such committee, as the case may be) will exercise such discretion
with the consent of Parent, which consent will not unreasonably be
withheld.
(f) Stockholder Loans. In the event that any stockholder of the
Company has outstanding loans from the Company as of the Effective Time,
the consideration payable to such stockholder, or his or its Affiliates,
pursuant to this Section 2.01 shall, to the extent permitted by applicable
law, be reduced by an amount equal to the outstanding principal plus
accrued interest of such stockholder's loans as of the Effective Time
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Section 2.02. Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Parent shall select a
bank or trust company in the United States, reasonably acceptable to the
Company, to act as paying agent (the "Paying Agent") for the payment of the
Merger Consideration upon surrender of certificates representing Company
Common Stock. Parent shall take all steps necessary to provide, or to
enable and cause the Sub to provide, to the Paying Agent prior to the
Effective Time cash necessary to pay for the shares of Company Common Stock
converted into the right to receive cash pursuant to Section 2.01(c) (such
cash being hereinafter referred to as the "Exchange Fund"). If for any
reason (including losses) the Exchange Fund is inadequate to pay the
amounts to which holders of shares of Company Common Stock shall be
entitled under Section 2.01(c), Parent shall take all steps necessary to
enable or cause the Surviving Corporation promptly to deposit in trust
additional cash with the Paying Agent sufficient to make all payments
required under Section 2.01(c), and Parent and the Surviving Corporation
shall in any event be liable for payment thereof. The Exchange Fund shall
not be used for any purpose except as expressly provided in this Agreement.
(b) Exchange Procedures. Promptly after the Effective Time (but in no
event later than five business days following such date), the Surviving
Corporation shall cause the Paying Agent to mail to each holder of record
of a certificate or certificates (the "Certificates") that immediately
prior to the Effective Time represented outstanding shares of Company
Common Stock whose shares were converted into the right to receive Merger
Consideration pursuant to Section 2.01, (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon delivery of the Certificates to
the Paying Agent and shall be in such form and have such other provisions
as Parent may reasonably specify), and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for Merger
Consideration. Upon surrender of a Certificate for cancellation to the
Paying Agent, together with such letter of transmittal, duly executed, and
such other documents as may reasonably be required by the Paying Agent, the
holder of such Certificate shall be entitled to receive in exchange
therefor the amount of cash into which the shares of Company Common Stock
theretofore represented by such Certificate shall have been converted
pursuant to Section 2.01, and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of Company
Common Stock that is not registered in the transfer records of the Company,
payment may be made to a Person other than the Person in whose name the
Certificate so surrendered is registered, if such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the
Person requesting such payment shall pay any transfer or other taxes
required by reason of the payment to a Person other than the registered
holder of such Certificate or establish to the satisfaction of Parent that
such tax has been paid or is not applicable. Until surrendered as
contemplated by this Section 2.02, each Certificate shall be deemed at any
time after the Effective Time to represent only
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the right to receive upon such surrender the amount of cash, without
interest, into which the shares of Company Common Stock theretofore
represented by such Certificate have been converted pursuant to Section
2.01. If any holder of shares of Company Common Stock shall be unable to
surrender such holder's Certificates because such Certificates have been
lost, mutilated or destroyed, such holder may deliver in lieu thereof an
affidavit and indemnity bond in form and substance and with surety
reasonably satisfactory to the Surviving Corporation. No interest shall be
paid or accrue on the cash payable upon surrender of any Certificate.
(c) No Further Ownership Rights in Company Common Stock. The Merger
Consideration paid in accordance with the terms of this Article II upon
conversion of any shares of Company Common Stock shall be deemed to have
been paid in full satisfaction of all rights pertaining to such shares of
Company Common Stock, and after the Effective Time there shall be no
further registration of transfers on the stock transfer books of the
Surviving Corporation of shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, any certificates formerly representing shares of Company
Common Stock are presented to the Surviving Corporation or the Paying Agent
for any reason, they shall be canceled and exchanged as provided in this
Article II.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund
that remains undistributed to the holders of Company Common Stock for six
months after the Effective Time shall be delivered to Parent, upon demand,
and any holder of Company Common Stock who has not theretofore complied
with this Article II shall thereafter look only to Parent for payment of
its claim for Merger Consideration.
(e) No Liability. None of Parent, Sub, the Company or the Paying
Agent, nor any of their respective officers, directors, employees, agents
or counsel, shall be liable to any Person in respect of any cash from the
Exchange Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Law. If any Certificate has not been
surrendered prior to five years after the Effective Time (or immediately
prior to such earlier date on which Merger Consideration in respect of such
Certificate would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 3.05(b))), any such shares,
cash, dividends or distributions in respect of such Certificate shall, to
the extent permitted by applicable Law, become the property of the
Surviving Corporation, free and clear of all claims or interest of any
Person previously entitled thereto.
(f) Investment of Exchange Fund. The Paying Agent shall invest any
cash included in the Exchange Fund, as directed by Parent, on a daily
basis. Any interest and other income resulting from such investments shall
be paid to Parent.
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(g) Withholdings. Parent shall be entitled to deduct and withhold from
the consideration otherwise payable to any holder of Company Common Stock
pursuant to this Agreement such amounts as may be required to be deducted
and withheld with respect to the making of such payment under the Code (as
defined in Section 3.10(b)), or under any provision of state, local or
foreign tax Law. To the extent that amounts are so withheld by the
Surviving Corporation or Parent, as the case may be, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to
the holder of the shares of Company Common Stock in respect of which such
deduction and withholding was made by the Surviving Corporation or Parent,
as the case may be.
(h) Charges and Expenses. The Surviving Corporation shall pay all
charges and expenses, including those of the Paying Agent, in connection
with the exchange of cash for shares of Company Common Stock.
ARTICLE III
Representations and Warranties of the Company
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Company represents and warrants to each of Parent and Sub that, except as
indicated in the applicable section of the Disclosure Schedule furnished by
Company to Parent prior to the execution of this Agreement (the "Company
Disclosure Schedule") corresponding to the Sections and subsections set forth
below:
Section 3.01. Organization. Standing and Power. Each of the Company and
each of its Subsidiaries (the "Company Subsidiaries") is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized and has full corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals, and
has made all filings, registrations and declarations, in each case whether
domestic or foreign, necessary to enable it to own, lease or otherwise hold its
properties and assets and to conduct its businesses as presently conducted, in
each case other than such franchises, licenses, permits, authorizations,
approvals, filings, registrations and declarations the lack of which,
individually and in the aggregate, has not had and would not reasonably be
expected to have a Company Material Adverse Effect (as defined in Section 9.03).
The Company and each Company Subsidiary is duly qualified to do business in each
jurisdiction where the nature of its business or their ownership or leasing of
its properties make such qualification necessary except where the failure to so
qualify has not had and would not reasonably be expected to have a Company
Material Adverse Effect. The Company has made available to Parent true and
complete copies of the articles of organization of the Company, as amended to
the date of this Agreement (as so amended, the "Company Charter"), and the by-
laws of the Company, as amended to the date of this Agreement (as so amended,
the "Company By-laws"), and the comparable charter and organizational documents
of each Company Subsidiary, in each case as amended through the date of this
Agreement.
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Section 3.02. Company Subsidiaries. The Company Disclosure Schedule
lists each Company Subsidiary and its jurisdiction of organization. All of the
outstanding shares of capital stock of each Company Subsidiary have been validly
issued and are fully paid and nonassessable and, except as set forth in the
Company Disclosure Schedule, are owned by the Company, free and clear of all
pledges, liens, charges, mortgages, encumbrances and security interests of any
kind or nature whatsoever except for those pledges, liens, charges, mortgages,
encumbrances and security interests that have not and would not reasonably be
expected to have a Company Material Adverse Effect (collectively, "Liens").
Section 3.03. Capital Structure.
(a) The authorized capital stock of the Company consists of 99,000,000
shares of Company Common Stock and 99,000 shares of Series A Preferred
Stock, par value $0.10 per share (the "Series A Preferred Stock" and,
together with the Company Common Stock, the "Company Capital Stock"). At
the close of business on October 2, 2001: (i) 52,902,540 shares of Company
Common Stock were issued and outstanding, (ii) 5,192,812 shares of Company
Common Stock were held by the Company in its treasury, (iii) 4,128,909
shares of Company Common Stock were subject to outstanding options to
purchase Company Common Stock (the "Company Stock Options"), (iv) 1,182,168
shares of Company Common Stock were reserved for issuance pursuant to the
Company Stock Purchase Plan and (v) 99,000 shares of Series A Preferred
Stock were reserved for issuance (but not issued or outstanding) in
connection with the rights (the "Company Rights") issued pursuant to the
Rights Agreement dated as of June 13, 2000 (as amended and in effect as of
the date hereof, the "Company Rights Agreement"), between the Company and
Fleet National Bank, as Rights Agent. Except as set forth above, at the
close of business on October 2, 2001, no shares of capital stock or other
voting securities of the Company were issued, reserved for issuance or
outstanding. All outstanding shares of Company Capital Stock are, and all
such shares that may be issued prior to the Effective Time will be when
issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to or issued in violation of any purchase option, call option,
right of first refusal, preemptive right, subscription right or any similar
right under any provision of the BCL, the Company Charter, the Company By-
laws or any Contract (as defined in Section 3.05(a)) to which the Company
is a party or otherwise bound;
(b) There are not any bonds, debentures, notes or other indebtedness
of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on
which holders of Company Common Stock may vote ("Voting Company Debt");
(c) Except as set forth above or referred to in Section 3.16, and
except pursuant to the GovConnect, Inc. 2000 Stock Incentive Plan, as of
the date of this Agreement, there are not any options, warrants, rights,
convertible or
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exchangeable securities, "phantom" stock rights, stock appreciation
rights, stock-based performance units, commitments, Contracts, arrangements
or undertakings of any kind to which the Company or any Company Subsidiary
is a party or by which any of them is bound (i) obligating the Company or
any Company Subsidiary to issue or sell, or cause to be issued or sold,
additional shares of capital stock or other equity interests in, or any
security convertible or exercisable for or exchangeable into any capital
stock of or other equity interest in, the Company or of any Company
Subsidiary or any Voting Company Debt or (ii) obligating the Company or any
Company Subsidiary to issue, grant, extend or enter into any such option,
warrant, right, security, commitment, Contract, arrangement or undertaking.
The Company Disclosure Schedule sets forth a true and complete list as of
the date hereof of each Person who holds (x) an option to purchase Company
Common Stock as of the date hereof with a per share exercise price less
than or equal to $2.00 together with the number of shares of Company Common
Stock subject to such option, the option price of such option, whether such
option is intended to qualify as an ISO, the number of such options that
are vested as of the date hereof (including whether and to what extent the
vesting of such options shall be accelerated by the transactions
contemplated by this Agreement or by termination of employment or change in
position following consummation of the Merger) and the expiration date of
such option, and (y) any other right, directly or indirectly, to acquire
Company Common Stock at a price per share less than or equal to $2.00,
together with the number of shares of Company Common Stock subject to such
right. The Company Disclosure Schedule sets forth the total number of
ISOs, nonqualified options and such other rights outstanding on the date
hereof with a per share exercise price less than or equal to $2.00. All
options issued pursuant to the Company Stock Option Plans shall be
terminated or otherwise be cancelled at the Effective Time other than
options issued pursuant to the Company's 1996 Stock Plan and 1998
Acquisition Stock Option Plan.
(d) As of the date of this Agreement, there are not any outstanding
contractual obligations of the Company, contingent or otherwise, or any
Company Subsidiary to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any Company Subsidiary. There are no issued
and outstanding shares of Company Common Stock that constitute restricted
stock or that are otherwise subject to a repurchase or redemption right in
favor of the Company. The Company has made available to Parent a complete
and correct copy of the Company Rights Agreement, as amended to the date of
this Agreement.
Section 3.04. Authority; Execution and Delivery; Enforceability.
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(a) The Company has all requisite corporate power and authority to
execute and deliver this Agreement and, subject to the Company Stockholder
Approval (as defined in Section 3.04(c)) with respect to the Merger if
required by Law (as defined in Section 3.05(a)), to consummate the
transactions contemplated
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hereby. The execution and delivery by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of the
Company, subject, in the case of the Merger, to receipt of the Company
Stockholder Approval. The Company has duly executed and delivered this
Agreement, and this Agreement constitutes its legal, valid and binding
obligation (subject to the Company Stockholder Approval with respect to the
Merger if required by Law), enforceable against it in accordance with its
terms, except to the extent that enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws of general applicability relating to or affecting the
enforcement of creditors' rights and by the effect of the principles of
equity (regardless of whether enforceability is considered in a proceeding
in equity or at law).
(b) Each of the Board of Directors of Company (the "Company Board")
and the Special Committee, in each case at a meeting duly called and held,
duly and unanimously adopted votes (i) approving this Agreement and the
Merger, (ii) determining that as of the date of this Agreement the terms of
the Merger are fair to and in the best interests of Company and its
stockholders, and (iii) as of the date of this Agreement recommending that
Company's stockholders approve this Agreement. Such votes are sufficient to
render inapplicable to Parent and Sub and this Agreement and the
transactions contemplated hereby the provisions of Chapter 110C and Chapter
110F of the BCL and Section 6H of the Company's Articles of Organization,
as amended (assuming the requirement that the terms of the Merger be
furnished to shareholders is satisfied). No other Massachusetts takeover
statute or similar statute or regulation, and to the Company's Knowledge no
takeover statute or similar statute or regulation of any other state,
applies or purports to apply to Company with respect to this Agreement or
the transactions contemplated hereby.
(c) In accordance with the provisions in Section 6I of the Company's
Articles of Organization, as amended, the only vote of holders of any class
or series of Company Capital Stock necessary to approve and adopt this
Agreement and the Merger is the approval of this Agreement by the holders
of not less than a majority of the outstanding Company Common Stock (the
"Company Stockholder Approval").
(d) The Company has terminated the Agreement and Plan of Merger dated
as of June 21, 2001 among Registry Holding Company, Redwood Acquisition
Corp. and the Company (the "June 21 Merger Agreement") in accordance with
the provisions thereof and has in connection with such termination paid or
become obligated to pay not more than $2,000,000 to Registry Holding
Company, Inc. and up to $250,000 to G. ▇▇▇▇ ▇▇▇▇▇▇.
Section 3.05. No Conflicts: Consents.
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(a) Except as set forth in the Company Disclosure Schedule, the
execution and delivery by the Company of this Agreement do not, and the
consummation of the transactions contemplated hereby and compliance with
the terms hereof will not, result in any violation of or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation under, or
result in the creation of any Lien upon any of the properties or assets of
the Company or any Company Subsidiary under, or result in any grant of
additional rights to any party under, any provision of (i) the Company
Charter, the Company By-laws or the comparable charter or organizational
documents of any Company Subsidiary, (ii) any contract, lease, license,
indenture, note, bond, agreement, permit, concession, franchise or other
instrument (a "Contract") to which the Company or any Company Subsidiary is
a party or by which any of their respective properties or assets is bound
or (iii) subject to the filings and other matters referred to in Section
3.05(b), any judgment, order, injunction or decree, domestic or foreign
("Judgment"), or statute, law (including common law), legislation,
interpretation, ordinance, rule or regulation, domestic or foreign ("Law"),
applicable to the Company or any Company Subsidiary or their respective
properties or assets, other than, in the case of clauses (ii) and (iii)
above, any such items that, individually and in the aggregate, have not had
and would not reasonably be expected to have a Company Material Adverse
Effect.
(b) No consent, approval, license, permit, order or authorization
("Consent") of, or registration, declaration or filing with, any Federal,
state, local or foreign government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (each, a "Governmental Entity") is
required to be obtained or made by or with respect to Company or any
Company Subsidiary in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, other than (i) if required, compliance with and filing
of a pre-merger notification report under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (ii) the filing with
the U.S. Securities and Exchange Commission (the "SEC") of a proxy
statement relating to the approval of this Agreement by the Company's
stockholders (the "Proxy Statement"), (iii) the filing of the Articles of
Merger with the Secretary of State of The Commonwealth of Massachusetts and
appropriate documents with the relevant authorities of the other
jurisdictions in which the Company is qualified to do business, (iv)
compliance with and filings under the Laws of any foreign jurisdictions, if
and to the extent required, and (v) such other items that, individually and
in the aggregate, have not had and would not reasonably be expected to have
a Company Material Adverse Effect.
(c) The Company and the Company Board have taken all action necessary
to (i) render the Company Rights inapplicable to this Agreement and the
transactions contemplated hereby and (ii) ensure that (A) neither Parent
nor any of its stockholders, Affiliates or associates is or will become an
"Acquiring
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Person" (as defined in the Company Rights Agreement) by reason of this
Agreement or the Merger), (B) a "Distribution Date" (as defined in the
Company Rights Agreement) shall not occur by reason of this Agreement or
the Merger and (C) the Company Rights shall expire immediately prior to the
Effective Time.
Section 3.06. SEC Documents; Undisclosed Liabilities; Certain Agreements.
(a) The Company has filed all reports, schedules, forms, statements
and other documents required to be filed by the Company with the SEC since
January 1, 1999 (including without limitation the filing of exhibits
thereto) (the "Company SEC Documents"). As of its respective date, each
Company SEC Document complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or the Securities Act of 1933, as amended (the "Securities
Act"), as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Company SEC Document, and did not
at the time they were filed (or if amended or superseded by a filing prior
to the date of this Agreement, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements of the Company included
in the Company SEC Documents comply as to form in all material respects
with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in
accordance with United States generally accepted accounting principles
("GAAP") (except, in the case of unaudited statements, as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly present, in
all material respects, the consolidated financial position of the Company
and the Company Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
(b) Except as set forth in the Filed Company SEC Documents (as defined
in Section 3.08), as of the date of this Agreement neither the Company nor
any Company Subsidiary has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) required by GAAP to be
set forth on a consolidated balance sheet of the Company and the Company
Subsidiaries or in the notes thereto, other than liabilities or obligations
incurred since the date of the most recent financial statements included in
the Filed Company SEC Documents in the ordinary course of business
consistent with prior practice or which, individually and in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect.
Except as set forth in the Filed Company SEC Documents or in the Company
Disclosure Schedule, as of the date of this Agreement, neither the Company
nor any Company Subsidiary has any indebtedness, obligations for deferred
purchase price of property or
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services or earn out payment obligations, capitalized lease obligations,
outstanding letters of credit or guarantees or other arrangements having
the economic effect of a guarantee for any indebtedness of any other Person
other than such indebtedness, obligations for deferred purchase price of
property or services or earn out payment obligations, capitalized lease
obligations, outstanding letters of credit or guarantees or other
arrangements having the economic effect of a guarantee for any indebtedness
of any other Person incurred since the date of the most recent consolidated
financial statements filed with the SEC in the ordinary course of business
consistent with past practice and which in the aggregate would not exceed
$500,000.
(c) Except as disclosed in the Filed Company SEC Documents, as of the
date of this Agreement, neither the Company nor any of its Subsidiaries has
entered into any transaction with any director, officer or other affiliate
of the Company or any of its Subsidiaries or any transaction that would be
subject to proxy statement disclosure pursuant to Item 404 of Regulation S-
K.
(d) Other than pursuant to agreements relating to the disposition of
assets by the Company or a Company Subsidiary, copies of which were made
available to the Buyer, there is no non-competition or other similar
agreement, commitment, judgment, injunction or order which the Company or
any Subsidiary of the Company is a party or subject to that has or would
reasonably be expected to have the effect of prohibiting or impairing in
any material respect the conduct of the business of the Company as
presently being conducted by it.
Section 3.07. Information Supplied. None of the information supplied or
to be supplied by the Company for inclusion or incorporation by reference in the
Proxy Statement will, at the date it is first mailed to the Company's
stockholders or at the time of the Company Stockholders Meeting (as defined in
Section 6.01(a)), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied in writing by Parent or Sub for inclusion or incorporation by reference
therein.
Section 3.08. Absence of Certain Changes or Events. Except as disclosed
in the Company SEC Documents filed and publicly available prior to the date of
this Agreement (the "Filed Company SEC Documents") or in the Company Disclosure
Schedule, from December 30, 2000 to the date of this Agreement, the Company has
conducted its business only in the ordinary course, and during such period there
has not been:
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(i) any event, change, effect or development that, individually or in
the aggregate, has had or would reasonably be expected to have a
Company Material Adverse Effect;
(ii) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with
respect to any Company Capital Stock or any repurchase for value
by the Company of any Company Capital Stock;
(iii) any split, combination or reclassification of any Company Capital
Stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for
shares of Company Capital Stock;
(iv) (A) any granting by the Company or any Company Subsidiary to any
current or former director or executive officer of the Company or
any Company Subsidiary of any material increase in their
compensation, except to the extent required under employment
agreements in effect as of the date of the most recent audited
financial statements included in the Filed Company SEC Documents,
(B) any granting by the Company or any Company Subsidiary to any
such director or executive officer of any material increase in
severance or termination pay, except as was required under any
employment, severance or termination policy, practice or
agreements in effect as of the date of the most recent audited
financial statements included in the Filed Company SEC Documents
or (C) any entry by the Company or any Company Subsidiary into,
or any material amendment of, any employment, severance or
termination agreement with any such director or executive
officer;
(v) any change in accounting methods, principles or practices by the
Company or any Company Subsidiary materially affecting the
consolidated assets, liabilities or results of operations of the
Company, except insofar as may have been required by a change in
GAAP; or
(vi) any material elections with respect to Taxes (as defined in
Section 3.09) by the Company or any Company Subsidiary or
settlement or compromise by the Company or any Company Subsidiary
of any material Tax liability or refund.
Section 3.09. Taxes.
(a) Each of the Company and each Company Subsidiary (for such periods
as each Subsidiary was owned, directly or indirectly, by the Company) (i)
has timely filed, or has caused to be timely filed on its behalf, all Tax
Returns (as
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defined in Section 3.09(d)) required to be filed by it (taking into account
any extensions of time for filing such Tax Returns), (ii) has paid all
Taxes (as defined in Section 3.09(d)) owed by it (whether or not shown on
any Tax Returns) and (iii) has withheld or collected all taxes that the
Company is or was required by law to withhold or collect, except where the
failure to file Tax Returns, to pay Taxes or to withhold or collect taxes
has not had and would not reasonably be expected to have a Company Material
Adverse Effect. Neither the Company nor any Company Subsidiary has any
liability for any Tax obligation of any taxpayer (including without
limitation any affiliated group of corporations or other entities that
included the Company or any Company Subsidiary during a prior period) other
than the Company or any Company Subsidiary, except where such liability has
not had and would not reasonably be expected to have a Company Material
Adverse Effect.
(b) The most recent financial statements contained in the Filed
Company SEC Documents reflect an adequate reserve (in accordance with GAAP)
for all Taxes payable by the Company and the Company Subsidiaries for all
Taxable periods and portions thereof through the date of such financial
statements (in addition to any reserve for deferred taxes established to
reflect timing differences between book and tax income).
(c) There are no material Liens for Taxes (other than for current
Taxes not yet due and payable) on the assets of the Company or any Company
Subsidiary.
(d) For purposes of this Agreement:
"Taxes" includes all forms of taxation imposed by any Federal, state,
local, foreign or other Governmental Entity, including income, franchise,
property, sales, use, excise, employment, unemployment, payroll, social
security, estimated, value added, ad valorem, transfer, recapture, withholding
and other Taxes of any kind, including all interest, penalties and additions
thereto.
"Tax Return" means all Federal, state, local, provincial and foreign Tax
returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax return relating to Taxes.
Section 3.10. ERISA Compliance.
(a) The Company Disclosure Schedule contains a list of all material
"employee pension benefit plans" (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
(sometimes referred to herein as "Company Pension Plans"), "employee
welfare benefit plans" (as defined in Section 3(1) of ERISA), a stock
bonus, stock purchase, stock option, restricted stock or similar equity-
based plan, and any other deferred-compensation, retirement, welfare-
benefit, bonus, incentive, severance or fringe benefit plan or arrangement
maintained, or contributed to, by the Company or any
-15-
Company Subsidiary for the benefit of any current or former employees,
officers or directors of the Company or any Company Subsidiary (together,
the "Company Benefit Plans"). The Company has made available to Parent
true, complete and correct copies of (i) each Company Benefit Plan (or, in
the case of any unwritten Company Benefit Plan, a brief description
thereof), (ii) the most recent annual report on Form 5500 filed with the
Internal Revenue Service with respect to each Company Benefit Plan (if any
such report was required), (iii) the most recent summary plan description
for each Company Benefit Plan for which such summary plan description is
required and (iv) each trust agreement and group annuity contract relating
to any Company Benefit Plan, if any.
(b) All Company Benefit Plans are in compliance in all material
respects with applicable Law (including, where applicable, the Code and
ERISA), except such noncompliance as has not had and would not reasonably
be expected to have a Company Material Adverse Effect. All Company Pension
Plans are intended to be tax-qualified under Section 401 (a) of the
Internal Revenue Code of 1986, as amended (the "Code") and, except as set
forth in the Company Disclosure Schedule, the Company has no reason to
believe that any of the Company Pension Plans are not so qualified under
Section 401 (a) of the Code. There is no pending or, to the Knowledge of
the Seller, threatened lawsuit, material claim or other material
controversy relating to any Company Benefit Plan, other than claims for
benefits in the normal course.
(c) No Company Pension Plan is a "defined benefit plan" within the
meaning of Section 3(35) of ERISA or is subject to the minimum funding
standards of Section 412 of the Code or Section 302 of ERISA, and neither
the Company nor any Company Subsidiary has any actual or contingent
liability under any defined benefit plan which it (or any Affiliate)
previously maintained or contributed to (or was obligated to maintain or
contribute to). None of the Company, any Company Subsidiary, any officer of
the Company or any Company Subsidiary or any of the Company Benefit Plans
which are subject to ERISA, including the Company Pension Plans, any trusts
created thereunder or any trustee or administrator thereof, has engaged in
a non-exempt "prohibited transaction" (as such term is defined in Section
406 of ERISA or Section 4975 of the Code) or any other breach of fiduciary
responsibility that could subject the Company, any Company Subsidiary or
any officer of the Company or any Company Subsidiary to any material tax or
penalty on prohibited transactions imposed by such Section 4975 or to any
material liability under Section 502(i) or 502(1) of ERISA that would
reasonably be expected to have a Company Material Adverse Effect.
(d) With respect to any Company Benefit Plan that is an employee
welfare benefit plan, (i) all such Company Benefit Plans are unfunded and
no such Company Benefit Plan is funded through a "welfare benefits fund"
(as such term is defined in Section 419(e) of the Code), and (ii) each such
Company Benefit Plan that is a "group health plan" (as such term is defined
in Section 5000(b)(1) of the Code), complies in all material respects with
the applicable
-16-
requirements of Section 4980B(f) of the Code, except such noncompliance as
would not reasonably be expected to have a Company Material Adverse Effect.
(e) Each Company Benefit Plan is amendable and terminable in
accordance with its terms and neither the Company nor any of the Company's
Subsidiaries have made any promise, except as set forth in said Company
Benefit Plans, that such plans may not be terminated. Except as set forth
on Schedule 3.10(e), termination of any or all of the Company Benefit Plans
will not result in costs to the Company that would reasonably be expected
to have a Company Material Adverse Effect.
(f) Except as disclosed in the Filed Company SEC Documents or in the
Company Disclosure Schedule, neither the Company nor any Company Subsidiary
is a party to any oral or written (i) agreement with any director,
executive officer or employee of the Company or any Company Subsidiary (A)
providing for any cash payments to any Person upon the occurrence of a
transaction involving the Company or any Company Subsidiary of the nature
of any of the transactions contemplated by this Agreement, (B) providing
for any cash severance payment to any Person after the termination of
employment of such director, executive officer or employee (ii) agreement
or plan binding the Company or any Company Subsidiary, including any stock
option plan, stock appreciation right plan, restricted stock plan, stock
purchase plan or severance benefit plan, any of the benefits of which shall
be increased, or the vesting of the benefits of which shall be accelerated,
by the occurrence of any of the transactions contemplated by this Agreement
or the value of any of the benefits of which shall be calculated on the
basis of any of the transactions contemplated by this Agreement.
(g) None of the Company Benefit Plans promises or provides retiree
medical or other retiree welfare benefits to any person, except as required
by applicable law.
Section 3.11. Litigation. Except as disclosed in the Filed Company SEC
Documents or in the Company Disclosure Schedule, as of the date of this
Agreement, there is no suit, action or proceeding pending or, to the Knowledge
of the Company, overtly threatened against the Company or any Company Subsidiary
that, individually or in the aggregate, has had or would reasonably be expected
to have a Company Material Adverse Effect, nor, as of the date of this
Agreement, is there any Judgment outstanding against the Company or any Company
Subsidiary that has had or would reasonably be expected to have a Company
Material Adverse Effect.
Section 3.12. Compliance with Applicable Laws. Except as disclosed in
the Filed Company SEC Documents or in the Company Disclosure Schedule, the
Company and the Company Subsidiaries are in compliance with all, and has not
received any written notices of violations with respect to any, applicable Laws,
including those relating to immigration, occupational health and safety and the
environment, except for instances
-17-
of noncompliance that, individually and in the aggregate, have not had and would
not reasonably be expected to have a Company Material Adverse Effect. This
Section 3.12 does not relate to matters with respect to Taxes, which are the
subject of Section 3.09.
Section 3.13. Intellectual Property.
(a) Except as disclosed in the Filed Company SEC Documents or in the
Company Disclosure Schedule, the Company and the Company Subsidiaries own,
or are licensed or otherwise possess legally enforceable rights to use all
patents, trademarks, trade names, service marks, copyrights, and any
applications therefor, technology, know-how, computer software programs or
applications, and tangible or intangible proprietary information or
material that are used in the business of the Company and the Company
Subsidiaries as currently conducted, except as would not reasonably be
expected to have a Company Material Adverse Effect.
(b) Except as disclosed in the Filed Company SEC Documents or in the
Company Disclosure Schedule or as would not reasonably be expected to have
a Company Material Adverse Effect, the Company and the Company Subsidiaries
are not in violation of any licenses, sublicenses and other agreements as
to which the Company and/or the Company Subsidiaries are a party and
pursuant to which the Company and/or the Company Subsidiaries are
authorized to use any third-party patents, trademarks, service marks and
copyrights ("Third-Party Intellectual Property Rights"). Except as
disclosed in the Filed Company SEC Documents or in the Company Disclosure
Schedule and except as would not reasonably be expected to have a Company
Material Adverse Effect, as of the date of this Agreement no claims with
respect to the patents, registered and material unregistered trademarks and
service marks, registered copyrights, trade names and any applications
therefor owned by the Company or the Company Subsidiaries (the "Company
Intellectual Property Rights"), any trade secret material to the Company,
or Third-Party Intellectual Property Rights to the extent arising out of
any use, reproduction or distribution of such Third Party Intellectual
Property Rights by or through the Company or the Company Subsidiaries, are
currently pending (or, to the Knowledge of the Company, are overtly
threatened by any Person) against the Company.
(c) To the Company's Knowledge, all patents, registered trademarks,
service marks and copyrights held by the Company or the Company
Subsidiaries are valid and subsisting. Except as disclosed in the Filed
Company SEC Documents or in the Company Disclosure Schedule, to the
Company's Knowledge, there is no material unauthorized use, infringement or
misappropriation of any Company Intellectual Property Rights by any third
party, including any employee or former employee of the Company or the
Company Subsidiaries.
Section 3.14. Brokers; Fees and Expenses.
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(a) No broker, investment banker, financial advisor or other Person,
other than ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., financial advisor to the Special
Committee, the fees and expenses of which will be paid by the Company, and
▇▇ ▇▇▇▇▇ Securities Corporation, former financial advisor to the Company,
the fees and expenses of which will be paid by the Company under certain
circumstances, is entitled to any broker's, finder's, financial advisor's
or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of the
Company. The Company has delivered to Parent a complete and accurate copy
of all agreements pursuant to which ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. or ▇▇
▇▇▇▇▇ Securities Corporation are entitled to any fees and expenses payable
by the Company in connection with any of the transactions contemplated by
this Agreement.
(b) The Company Disclosure Schedule sets forth a list of the fees and
expenses, estimated in good faith as of the date of this Agreement,
incurred and to be incurred by the Company and any of its Subsidiaries in
connection with the sale of the Company (including without limitation the
fees and expenses of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., ▇▇ ▇▇▇▇▇ Securities
Corporation and of the Company's legal counsel and accountants) and noting
which fees and expenses, if any, have been paid as of September 30, 2001 or
accrued as of June 30, 2001.
Section 3.15. Opinion of Financial Advisor. The Company has received
the opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., dated the date of this Agreement,
to the effect that, as of such date, the consideration to be received in the
Merger by the holders of Company Common Stock not affiliated with Parent is fair
to such holders from a financial point of view and a copy of the signed opinion
has been provided to Parent.
Section 3.16. Stock Options and Employee Stock Purchase Plan. The
Company has provided Parent with true and complete copies of the Company's 1996
Stock Plan, 1998 Acquisition Stock Option Plan, 1998 International Stock Option
Plan, Addendum to 1998 International Stock Option Plan, 1998 Directors Stock
Plan, Renaissance Solutions, Inc. 1995 Equity Incentive Plan, 2000 Directors
Stock Plan, GovConnect, Inc. 2000 Stock Incentive Plan, 1996 Eligible Directors
Stock Plan and The Hunter Group, Inc. Employee Non-Qualified Stock Option Plan
(collectively, the "Company Stock Option Plans"), including the form of option
certificates, restricted stock agreements and certain other documents related to
such Company Stock Option Plans, and the Company's 1996 Employee Stock Purchase
Plan (the "Company Stock Purchase Plan"). The Company Board has taken all
actions necessary under the Company Stock Purchase Plan to suspend the
commencement of the Offering Periods (as defined in the Company Stock Purchase
Plan) scheduled to commence on July 2, 2001 and thereafter.
Section 3.17. Accounts Receivable. The accounts receivable of the
Company arose out of the sale of inventory or services performed in the ordinary
course of business.
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Section 3.18. Properties. Neither the Company nor any Company
Subsidiary is in default under any agreement pursuant to which it leases real
property of more than 3,000 square feet (collectively, the "Leases"), except
where the existence of such defaults, individually or in the aggregate, has not
had and would not reasonably be expected to have a Company Material Adverse
Effect. The Company and the Company Subsidiaries do not own any real property.
The Company has made available to Parent true and complete copies of all Leases.
Section 3.19. Government Contracts. Neither the Company nor any Company
Subsidiary is suspended or debarred from bidding on contracts or subcontracts
with any Governmental Entity and to the Knowledge of the Company, no such
suspension or debarment proceedings are pending or threatened that have had or
would reasonably be expected to have a Company Material Adverse. Neither the
Company nor any Company Subsidiary has any agreements, contracts or commitments
which require it to obtain or maintain a security clearance with a Governmental
Entity.
Section 3.20. Books and Records. The books and records of the Company
and each Company Subsidiary accurately reflect the assets, liabilities,
financial condition and results of operations of the Company or such Company
Subsidiary and have been maintained in accordance with good business and
bookkeeping practices, except where such failure to be accurate or to be so
maintained has not had and would not be reasonably expected to have a Company
Material Adverse Effect.
ARTICLE IV
Representations and Warranties of Parent and Sub
------------------------------------------------
Parent and Sub jointly and severally represent and warrant to Company that,
except as indicated in the applicable section of the Disclosure Schedule
furnished by Parent to Company prior to the execution of this Agreement (the
"Buyer Disclosure Schedule") corresponding to the Sections and subsections set
forth below:
Section 4.01. Organization, Standing and Power. Each of Parent and Sub
is duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has full corporate power and authority
and possesses all governmental franchises, licenses, permits, authorizations and
approvals, in each case whether domestic or foreign, necessary to enable it to
own, lease or otherwise hold its properties and assets and to conduct its
businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually and in the
aggregate, has not had and would not reasonably be expected to materially
adversely affect the ability of Parent or Sub to perform their obligations under
this Agreement and consummate the transactions contemplated hereby (a "Parent
Material Adverse Effect").
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Section 4.02. Sub.
(a) Since the date of its incorporation, Sub has not, directly or
through a Subsidiary, carried on any business or conducted any operations
other than the execution of this Agreement, the performance of its
obligations hereunder and matters ancillary thereto. Sub was incorporated
solely for the purpose of consummating the transactions contemplated
hereby.
(b) The authorized capital stock of Sub consists of 1,000 shares of
common stock, no par value per share, all of which have been validly
issued, are fully paid and nonassessable and are owned by Parent free and
clear of any Lien.
Section 4.03. Authority; Execution and Delivery; Enforceability. Each of
Parent and Sub has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery by each of Parent and Sub of this Agreement and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Parent and Sub.
Parent, as sole stockholder of Sub, has approved this Agreement. Each of Parent
and Sub has duly executed and delivered this Agreement, and this Agreement
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws of general applicability relating to or affecting
the enforcement of creditors' rights and by the effect of the principles of
equity (regardless of whether enforceability is considered in a proceeding in
equity or at law).
Section 4.04. No Conflicts; Consents.
(a) The execution and delivery by each of Parent and Sub of this
Agreement, do not, and the consummation of the transactions contemplated
hereby and compliance with the terms hereof will not, result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration
of any obligation under, or result in the creation of any Lien upon any of
the properties or assets of Parent or any of its Subsidiaries under, any
provision of (i) the charter, by-laws or other organizational documents of
Parent or any of its Subsidiaries, (ii) any Contract to which Parent or any
of its Subsidiaries is a party or by which any of their respective
properties or assets is bound or (iii) subject to the filings and other
matters referred to in Section 4.04(b), any Judgment or Law applicable to
Parent or any of its Subsidiaries or their respective properties or assets,
other than, in the case of clauses (ii) and (iii) above, any such items
that, individually and in the aggregate, have not had and would not
reasonably be expected to have a Parent Material Adverse Effect.
(b) No Consent of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with respect
to Parent or any of its Subsidiaries in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions
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contemplated hereby, other than (i) if required, compliance
with and filing of a pre-merger notification report under the HSR Act, (ii)
the filing with the SEC of such reports under Section 13 of the Exchange
Act as may be required in connection with this Agreement and the
transactions contemplated hereby, (iii) the filing of the Articles of
Merger with the Secretary of State of The Commonwealth of Massachusetts and
appropriate documents with the relevant authorities of the other
jurisdictions in which Parent and Sub are qualified to do business, (iv)
compliance with and filings under the Laws of any foreign jurisdictions, if
and to the extent required, and (v) such other items that, individually and
in the aggregate, have not had and would not reasonably be expected to have
a Parent Material Adverse Effect.
Section 4.05. Information Supplied. None of the information supplied or to
be supplied by Parent or Sub for inclusion or incorporation by reference in the
Proxy Statement will, at the date it is first mailed to the Company's
stockholders or at the time of the Company Stockholders Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
Section 4.06. Brokers. No broker, investment banker, financial advisor or
other Person, other than SunTrust ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Company LLC is entitled to
any broker's, finder's, financial advisor's or other similar fee or commission
in connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of the Parent or Sub.
Section 4.07. Financial Ability to Perform. Parent and Sub have provided
the Company with a commitment letter from CIT Business Credit, dated as of
September 19, 2001 (the "Commitment Letter" and the financing to be provided
thereunder, the "Financing"). To the Knowledge of Parent and Sub, the obligation
to fund the commitment under the Commitment Letter is not subject to any
condition other than as set forth in the Commitment Letter. Parent and Sub are
not aware of any fact or occurrence that makes any of the assumptions or
statements set forth in the Commitment Letter inaccurate or that causes the
Commitment Letter to be ineffective or that precludes the satisfaction of the
conditions set forth in the Commitment Letter. To the Knowledge of Parent and
Sub, the Commitment Letter has been duly executed by all parties thereto and is
in full force and effect. All commitment and other fees required to be paid
under the Commitment Letter on or prior to the date hereof have been paid. The
aggregate amount of financing committed pursuant to the Commitment Letter,
together with at least $60,500,000 in cash held by the Company and cash held by
the Parent and equity commitments of certain shareholders of Parent as
previously disclosed to the Company, is sufficient to fund all amounts required
to be paid by Parent or Sub in connection with the consummation of the
transactions contemplated hereby, including, but not limited to, the Merger
Consideration.
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ARTICLE V
Covenants Relating to Conduct of Business
-----------------------------------------
Section 5.01. Conduct of Business.
(a) Conduct of Business by the Company. Except for matters set forth
in Section 5.01 of the Company Disclosure Schedule, expressly agreed to in
writing by Parent or otherwise expressly permitted by this Agreement, from
the date of this Agreement to the earlier to occur of the date of the
termination of this Agreement or the Effective Time, the Company shall, and
shall cause each Company Subsidiary to, conduct the business of the Company
and the Company Subsidiaries taken as a whole in the usual, regular and
ordinary course in substantially the same manner as previously conducted
and use reasonable efforts to preserve intact its current business
organization, keep available the services of its current officers and
employees and keep its relationships with customers, suppliers and others
having business dealings with them. In addition, and without limiting the
generality of the foregoing, except for matters set forth in Section 5.01
of the Company Disclosure Schedule, expressly agreed to in writing by
Parent or otherwise expressly permitted by this Agreement, from the date of
this Agreement to the earlier to occur of the date of the termination of
this Agreement or the Effective Time, the Company shall not, and shall not
permit any Company Subsidiary to, do any of the following without the prior
written consent of Parent which consent will be given or denied within a
reasonable time after any written request for such consent:
(i) (A) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock,
other than dividends and distributions by a direct or indirect
wholly owned Subsidiary of the Company to its parent, (B) split,
combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock, or
(C) purchase, redeem or otherwise acquire any shares of capital
stock of the Company or any Company Subsidiary or any other
securities thereof or any rights, warrants or options to acquire
any such shares or other securities, except in the case of (B)
and (C), as required by any employee benefit plan of the Company
or any Company Subsidiary or agreement existing as of the date
hereof;
(ii) issue, deliver, sell or grant (A) any shares of its capital
stock, (B) any Voting Company Debt or other voting securities,
(C) any securities convertible into or exchangeable for, or any
options, warrants or rights to acquire, any such shares, Voting
Company Debt, voting securities or convertible or exchangeable
securities or (D) any "phantom" stock, "phantom" stock rights,
stock
-23-
appreciation rights or stock-based performance units, other than
(1) the issuance of Company Common Stock (and associated Company
Rights) upon the exercise of Company Stock Options outstanding on
the date of this Agreement and in accordance with their present
terms, (2) the issuance of Company Common Stock upon the exercise
of Company Rights and (3) the issuance of Company Common Stock
Options pursuant to the Company Stock Option Plans and consistent
with past practices;
(iii) amend its articles of organization, by-laws or other comparable
charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or consolidating with,
or by purchasing a substantial equity interest in or portion of
the assets of, or by any other manner, any business or any
corporation, partnership, joint venture, association or other
business organization or division thereof or (B) any assets that
are material, individually or in the aggregate, to the Company
and the Company Subsidiaries taken as a whole, except for
purchases in the ordinary course of business consistent with past
practice;
(v) except as disclosed in Section 5.01 of the Company Disclosure
Schedule, (A) grant to any current or former director or
executive officer of the Company or any Company Subsidiary any
material increase in compensation, except in the ordinary course
of business consistent with past practices to the extent required
under employment agreements in effect as of the date of the most
recent audited financial statements included in the Filed Company
SEC Documents, (B) grant to any current or former director or
executive officer of the Company or any Company Subsidiary any
increase in severance or termination pay, except to the extent
required under any agreement in effect as of the date of the most
recent audited financial statements included in the Filed Company
SEC Documents, (C) enter into or amend any employment,
consulting, indemnification, severance or termination agreement
with any such director or executive officer or enter into or
amend any other transaction that would be or is subject to proxy
statement disclosure pursuant to Item 404 of Regulation S-K, (D)
establish, adopt, enter into or amend in any material respect any
collective bargaining agreement or Company Benefit Plan, (E) take
any action to accelerate any rights or benefits, or make any
material determinations not in the ordinary course of business
consistent with prior practice, under any collective bargaining
agreement or Company Benefit Plan, (F) forgive any indebtedness
of any employee of the Company or any of its Subsidiaries in
excess of
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$25,000 in the aggregate or (G) hire any employee in the United
States pursuant to any temporary work authorization;
(vi) make any change in accounting methods, principles or practices
materially affecting the reported consolidated assets,
liabilities or results of operations of the Company, except
insofar as may have been required by a change in GAAP;
(vii) sell, lease (as lessor), license or otherwise dispose of or
subject to any Lien any material properties or assets, except (A)
sales of assets or inventory in the ordinary course of business
consistent with past practice and (B) sales or dispositions of
obsolete or worthless assets;
(viii) (A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another Person, issue or sell any debt
securities or warrants or other rights to acquire any debt
securities of the Company or any Company Subsidiary, guarantee
any debt securities of another Person, except for short-term
borrowings from Persons that are not directors, officers or
employees of the Company or any Company Subsidiary incurred in
the ordinary course of business consistent with past practice, or
(B) make any loans to, or investments in, any other Person, other
than to or in the Company or any direct or indirect wholly owned
Subsidiary of the Company;
(ix) make or agree to make new capital expenditures that are in excess
of $300,000 in any three-month period (provided that with respect
thereto Parent consent shall not be unreasonably withheld) or
make or agree to make new capital expenditures for items set
forth in Schedule 5.01(a)(ix);
(x) (A) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise) in excess of $100,000 individually or
$1,000,000 in the aggregate, other than the payment, discharge or
satisfaction, in the ordinary course of business consistent with
past practice or in accordance with their terms, of liabilities
reflected or reserved against in, or contemplated by, the most
recent consolidated financial statements (or the notes thereto)
of the Company included in the Filed Company SEC Documents or
incurred in the ordinary course of business consistent with past
practice (provided that with respect thereto Parent consent shall
not be unreasonably withheld), (B) cancel any indebtedness in
excess of $100,000 individually or $1,000,000 in the aggregate or
waive any claims or rights of substantial value or (provided that
with respect to any such
-25-
cancellation or waiver Parent consent shall not be unreasonably
withheld) (C) waive the benefits of, or agree to modify in any
manner, any confidentiality, standstill or similar agreement to
which the Company or any Company Subsidiary is a party;
(xi) enter into, renew, extend, amend, modify, waive any material
provision of, or terminate any lease or similar commitment, in
each case providing for payments in excess of $250,000 over the
term of such lease or commitment (or until the date on which such
lease or commitment may be terminated by the Company without
penalty);
(xii) except as required by their terms, enter into, terminate or
breach in any material respect (or take or fail to take any
action, that, with or without notice or lapse of time or both,
would become a material breach) or materially amend any Contract
filed or that would be required to be filed in any Company SEC
Documents;
(xiii) without prior consultation with Parent (in addition to the
consent requirement described above, provided that with respect
thereto Parent consent shall not be unreasonably withheld),
commence any litigation or arbitration other than in accordance
with past practice or settle any litigation or arbitration for
money damages or other relief in excess of $100,000, or if as
part of such settlement Company or any Company Subsidiary would
agree to any restrictions on its operations, or which relates to
this Agreement or the transactions contemplated hereby;
(xiv) elect or appoint any new directors or officers of Company or any
Company Subsidiary;
(xv) take any action that would reasonably be expected to result in
the inability to satisfy the conditions to closing set forth in
Section 7.02(a);
(xvi) liquidate, dissolve or effect a recapitalization or
reorganization in any form of transaction
(xvii) make any material election with respect to Taxes or settle or
compromise any material Tax liability or refund;
(xviii) invest funds in debt securities or other investments maturing
more than 60 days after the date of investment; or
(xix) authorize, or commit or agree to take, any of the foregoing
actions.
(b) Advice of Changes. The Company shall use reasonable efforts
to promptly advise Parent orally and in writing of any change or
event or which the
-26-
Company becomes aware that has or would reasonably be expected to
have a Company Material Adverse Effect.
Section 5.02. No Solicitation by Company.
(a) The Company agrees that, from the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement,
neither Company nor any Company Subsidiary shall, nor shall either
authorize or permit any of its respective directors, officers or
employees or any representative retained by it (including any
financial advisors) to, directly or indirectly through another Person,
(i) solicit, initiate or encourage (including by way of furnishing
non-public information) any inquiries or the making of an Acquisition
Proposal, or (ii) participate in any discussions or negotiations
regarding any Acquisition Proposal; provided, however, that if, at any
time, the Company Board or the Special Committee determines in good
faith, after consultation with outside legal counsel, that it is
necessary to do so in order to act in a manner consistent with its
fiduciary duties to Company's stockholders under applicable Law,
Company may, in response to a Superior Proposal which was not
solicited by Company in violation of Section 5.02(a) and which did not
otherwise result from a breach of this Section 5.02, and subject to
compliance with the provisions of paragraph (c) below, (x) furnish
information with respect to Company to any Person making such
unsolicited Superior Proposal pursuant to a confidentiality agreement
entered into between such Person and Company in form and substance
reasonably satisfactory to the Company Board or the Special Committee
meeting the requirements of the last sentence of Section 5.02(b), and
(y) participate in discussions or negotiations regarding such
unsolicited Superior Proposal. For purposes of this Agreement, an
"Acquisition Proposal" means any inquiry, proposal or offer from any
Person (i) relating to any direct or indirect acquisition or purchase
of (A) a business that constitutes 15% or more of the net revenues,
net income or the assets of Company or any Company Subsidiary, or (B)
15% or more of any class of equity securities of Company or any
Company Subsidiary, (ii) relating to any tender offer or exchange
offer that if consummated would result in any Person beneficially
owning 15% or more of any class of equity securities of Company or any
Company Subsidiary, or (iii) relating to any merger, consolidation,
business combination, acquisition, recapitalization, liquidation,
dissolution or similar transaction involving Company or any Company
Subsidiary, in each case, other than the transactions contemplated by
this Agreement. Immediately following the execution and delivery of
this Agreement by the parties hereto, Company will cease and cause to
be terminated any existing activities, discussions or negotiations
with any parties conducted with respect to the foregoing.
(b) Except as expressly permitted by this Section 5.02, the Company Board
shall not (i) withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to Parent, the approval or recommendation
by the Company Board or Special Committee of this Agreement, the
Merger or the
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transactions contemplated hereby, (ii) approve or recommend, or
propose publicly to approve or recommend, any Acquisition Proposal, or
(iii) cause Company or any Company Subsidiary to enter into any letter
of intent, agreement in principle, acquisition agreement or other
similar agreement (each, a "Company Acquisition Agreement") related to
any Acquisition Proposal, other than any such agreement entered into
concurrently with a termination pursuant to the next sentence.
Notwithstanding the foregoing, if at any time the Company Board or the
Special Committee determines in good faith, after consultation with
outside counsel, that it is necessary to do so in order to act in a
manner consistent with its fiduciary duties to Company's stockholders
under applicable law, subject to compliance with paragraph (c) below,
the Company Board may, in response to a Superior Proposal which was
not solicited by Company in violation of Section 5.02(a) and which did
not otherwise result from a breach of this Section 5.02 (subject to
this and the remaining provisions of this Section 5.02), enter into an
agreement with respect to such Superior Proposal and, at the time of
execution of a binding agreement with respect thereto, terminate this
Agreement in accordance with Section 8.01(e). For purposes of this
Agreement, a "Superior Proposal" means any Acquisition Proposal which
(i) the Company Board or the Special Committee determines in good
faith is reasonably likely to be consummated, taking into account the
Person making the proposal and all legal, financial and regulatory
aspects of the proposal, and (ii) the Company Board or the Special
Committee believes in good faith (after consultation with and based
upon the advice of its outside financial advisors) would, if
consummated, provide greater value to Company's stockholders than the
transactions contemplated by this Agreement. Before the Company can
furnish any information to or commence any negotiations with any
proponent of an Acquisition Proposal, the Company must obtain a
confidentiality agreement from the proponent of such Acquisition
Proposal that contains a standstill and other provisions at least as
favorable to the Company as the ones set forth in the Confidentiality
Agreement between the Company and the Parent dated August 21, 2001.
(c) In addition to the obligations of Company as set forth in paragraphs
(a) and (b) of this Section 5.02, Company shall advise Parent orally
within one business day and in writing within two business days of any
Acquisition Proposal in response to which the Company has furnished
(or proposes to furnish) confidential information to the proponent
thereof or has commenced (or proposes to commence) negotiations with
the proponent thereof. Such notice shall include the material terms of
any such Acquisition Proposal (with any such notice referred to as a
"Company Notice"). The Company shall use its reasonable efforts to
keep Parent informed of the status and details (including any change
to the terms thereof) of any such Acquisition Proposal. In addition,
in the event Company intends to enter into a Company Acquisition
Agreement relating to a Superior Proposal, Company will deliver a
Company Notice at least 48 hours prior to entering into such
definitive agreement, which Company Notice will identify and detail
the proposed terms of such Superior Proposal.
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ARTICLE VI
Additional Agreements
---------------------
Section 6.01. Preparation of Proxy Statement; Stockholders Meeting.
(a) The Company shall, as soon as practicable following the date of
execution of this Agreement, prepare and file with the SEC the Proxy
Statement (as defined in Section 6.01(c)) in preliminary form
(provided that Parent, Sub and their counsel shall be given reasonable
opportunity to review and comment on the Proxy Statement prior to its
filing with the SEC), and each of the Company, Parent and Sub shall
use its best efforts to respond as promptly as practicable to any
comments of the SEC with respect thereto. The Company shall notify
Parent promptly of the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and
shall supply Parent with copies of all correspondence between the
Company or any of its representatives, on the one hand, and the SEC or
its staff, on the other hand, with respect to the Proxy Statement. If
at any time prior to receipt of the Company Stockholder Approval there
shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement, the Company shall promptly prepare
and mail to its stockholders such an amendment or supplement. The
Company shall use reasonable efforts to cause the Proxy Statement to
be mailed to the Company's stockholders as promptly as practicable
after filing with the SEC. Subject to the fiduciary duties of the
Company Board under applicable law, (i) the Proxy Statement shall
contain the recommendation of the Company Board that the stockholders
of the Company vote to adopt and approve this Agreement and the Merger
and (ii) if requested to do so by Parent at any time prior to the
Company Stockholders Meeting (as defined in Section 6.01(b)) and
subject to compliance with applicable laws, if there shall have been
publicly announced an alternative Acquisition Proposal, the Company
Board shall within a reasonable period of time following such request
(and prior to the Company Stockholders Meeting) publicly reaffirm such
recommendation and/or shall publicly announce that it is not
recommending that the stockholders of the Company accept an
alternative Acquisition Proposal, provided that such reaffirmation or
announcement does not require significant delay in the timing of the
Company Stockholders Meeting.
(b) The Company shall, as soon as practicable following the date of
execution of this Agreement, duly call, give notice of, convene and
hold a meeting of its stockholders (the "Company Stockholders
Meeting") for the purpose of seeking the Company Stockholder Approval.
Subject to Section 5.02, the Company shall, through the Company Board,
recommend to its stockholders that they give the Company Stockholder
Approval. Without limiting the generality of the foregoing, the
Company agrees that its obligations pursuant to the first sentence of
this Section 6.01(b) shall not be affected by the
-29-
commencement, public proposal, public disclosure or communication to
the Company of any Acquisition Proposal.
(c) Parent shall cause any and all shares of Company Common Stock owned by
Parent, Sub or any other Subsidiary of Parent to be voted in favor of
the approval of this Agreement.
Section 6.02. Access to Information; Confidentiality. The Company shall,
and shall cause each Company Subsidiary to afford to Parent, and to Parent's
officers, employees, accountants, counsel, financial advisors, financing sources
and other representatives, upon reasonable notice, reasonable access during
normal business hours during the period prior to the Effective Time to all their
respective properties, books, contracts, commitments, personnel and records and,
during such period, the Company shall, and shall cause each Company Subsidiary
to, furnish promptly to Parent such information concerning its business,
properties, assets, customers, consultants and personnel as Parent may
reasonably request; provided, however, that the Company may withhold the
documents and information described in the Company Disclosure Schedule to the
extent required to comply with the terms of a confidentiality agreement with a
third party in effect on the date of this Agreement; provided further, that the
Company shall use reasonable efforts to obtain, as promptly as practicable, any
consent from such third party required to permit the Company to furnish such
documents and information to Parent. The Company hereby consents, and shall
cause each Company Subsidiary to consent, to Parent and Parent's officers,
employees, accountants, counsel, financial advisors, financing sources and other
representatives contacting, in a reasonable fashion, consultants to and
customers of the Company and such Company Subsidiary and will, upon reasonable
notice from Parent, request such consultants and customers to cooperate during
normal business hours during the period prior to the Effective Time with any
requests made by or on behalf of Parent. Subject to the requirements of Law,
Parent shall, and shall cause its officers, employees, agents, consultants and
affiliates to, hold all information obtained pursuant to this Agreement in
confidence and in the event of termination of this Agreement for any reason,
Parent shall promptly return or destroy all nonpublic documents obtained from
Company and any copies made of such documents for Parent and all documentation
and other material prepared by Parent or its advisors based on written nonpublic
information furnished by Company or its advisors shall be destroyed.
Section 6.03. Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties shall use all reasonable efforts to
take, or cause to be taken, all reasonable actions, and to do, or
cause to be done, and to assist and cooperate with the other parties
in doing, all things reasonably necessary, proper or advisable to
consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated hereby, including without
limitation (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the
making of all necessary
-30-
registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid an action
or proceeding by, any Governmental Entity, (ii) the obtaining of all
necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial
or administrative, challenging this Agreement or the consummation of
the transactions contemplated hereby, including, when reasonable,
seeking to have any stay or temporary restraining order entered by any
court or other Governmental Entity vacated or reversed and (iv) the
execution and delivery of any additional instruments necessary to
consummate the transactions contemplated hereby and to fully carry out
the purposes of this Agreement; provided, however, that the
obligations set forth in this sentence shall not be deemed to have
been breached as a result of actions by the Company expressly
permitted under Section 5.02 or 8.01. In connection with and without
limiting the foregoing, the Company and the Company Board shall, at
the request of Parent: (i) take all action within its power reasonably
requested by Parent as necessary to ensure that no state takeover
statute or similar statute or regulation is or becomes applicable to
this Agreement or the transactions contemplated hereby, and (ii) if
any state takeover statute or similar statute or regulation becomes
applicable to this Agreement or the transactions contemplated hereby,
take all action within its power reasonably requested by Parent as
necessary to ensure that the transactions contemplated hereby may be
consummated as promptly as practicable on the terms contemplated by
this Agreement and otherwise to minimize the effect of such statute or
regulation on the transactions contemplated hereby. Nothing in this
Agreement shall be deemed to require any party to waive any
substantial rights or agree to any substantial limitation on its
operations or to dispose of any significant asset or collection of
assets.
(b) The Company shall give prompt notice to Parent, and Parent or Sub
shall give prompt notice to the Company, of (i) any representation or
warranty made by it becoming untrue or inaccurate in any material
respect or (ii) the failure by it to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied
with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the
obligations of the parties under this Agreement.
Section 6.04. Benefit Plans. Parent shall have sole discretion with
respect to the determination as to whether or when to terminate, merge or
continue any employee benefit plans and programs of Company after the Effective
Time. Nothing herein contained shall be construed to guarantee continued
employment to any Company Employee or change the "at-will" status of any Company
Employee. At the request of Parent, the Company shall (i) take all corporate
action reasonably required to terminate any 401(k) plan maintained by the
Company or any ERISA Affiliate in accordance with its terms and applicable law,
including without limitation ERISA and the Code, effective prior to the
Effective Time and (ii) take such corporate actions as are reasonably required
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to cause the effects on options issued under the Company Stock Option Plans set
forth in Section 2.01(e).
Section 6.05. Indemnification; D&O Insurance, etc.
(a) Parent shall, to the fullest extent permitted by Law, cause the
Surviving Corporation (from and after the Effective Time) to honor all
the Company's obligations to indemnify, defend and hold harmless
(including any obligations to advance funds for expenses) the current
and former directors and officers of the Company and its Subsidiaries
against all losses, claims, damages or liabilities arising out of acts
or omissions by any such directors and officers occurring prior to the
Effective Time to the maximum extent that such obligations of the
Company exist on the date of this Agreement, whether pursuant to the
Company Charter, the Company By-laws, the BCL, individual indemnity
agreements or otherwise, and such obligations shall survive the Merger
and shall continue in full force and effect in accordance with the
terms of the Company Charter, the Company By-laws, the BCL and such
individual indemnity agreements from the Effective Time until the
expiration of the applicable statute of limitations with respect to
any claims against such directors or officers arising out of such acts
or omissions. In the event a current or former director or officer of
the Company or any of its Subsidiaries is entitled to indemnification
under this Section 6.05(a), such director or officer shall be entitled
to reimbursement from the Company (from and after the Effective Time)
or the Surviving Corporation (from and after the Effective Time) for
reasonable attorney fees and expenses incurred by such director or
officer in pursuing such indemnification, including payment of such
fees and expenses by the Surviving Corporation or the Company, as
applicable, in advance of the final disposition of such action upon
receipt of an undertaking by such current or former director or
officer to repay such payment if it shall be adjudicated that such
current or former director or officer was not entitled to such
payment.
(b) The Company will maintain, through the Effective Time, the Company's
existing directors' and officers' insurance in full force and effect
without reduction of coverage. From and after the Effective Time and
for a period of six years after the Effective Time, Parent shall cause
to be maintained in effect the current policies of directors' and
officers' liability insurance and indemnification maintained by the
Company (provided that Parent may substitute therefor policies with
reputable and financially sound carriers, which policies provide
coverage of the types, in the amounts and containing terms and
conditions which are no less advantageous than those maintained by the
Company) with respect to claims arising from or related to facts or
events which occurred at or before the Effective Time; provided,
however, that Parent shall not be obligated to make annual premium
payments for such insurance to the extent such premiums exceed 200% of
the annual premiums paid as of the date hereof by the Company for such
insurance (such 200% amount, the "Maximum Premium"). If such insurance
coverage cannot be obtained at all, or can only be obtained at an
annual
-32-
premium in excess of the Maximum Premium, Parent shall maintain the
most advantageous policies of directors' and officers' insurance
obtainable for an annual premium equal to the Maximum Premium. The
Company represents to Parent that the Maximum Premium is $1,080,500.
(c) The Articles of Organization of the Surviving Corporation shall
contain the provisions that are set forth in Section 6B of the Company
Charter, which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any
manner that would affect adversely the rights thereunder of
individuals who at or at any time prior to the Effective Time were
directors, officers, employees or other agents of the Company.
(d) If the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or
merger and the continuing or surviving entity does not assume the
obligations of the Surviving Corporation set forth in this Section
6.05, or (ii) transfers all or substantially all of its properties and
assets to any Person, then, and in each such case, proper provision
shall be made so that the successors and assigns of the Surviving
Corporation assume, as a matter of law or otherwise, the obligations
set forth in this Section 6.05.
(e) Parent guarantees that if for any reason the Company or the Surviving
Corporation, as the case may be, shall not meet its obligations
pursuant to this Section 6.05, it shall meet such obligations in full
when and as such obligations arise.
Section 6.06. Fees and Expenses.
(a) Except as otherwise provided in this Agreement, and whether or not the
transactions contemplated by this Agreement are consummated, all costs
and expenses incurred in connection with the transactions contemplated
by this Agreement shall be borne by the party incurring such costs and
expenses.
(b) The Company shall pay to Parent the amount of $3,000,000 by wire
transfer of immediately available funds as reimbursement of Parent's
expenses and as liquidated damages (the "Company Break-Up Fee") in the
event that:
(i) Parent or the Company terminates this Agreement pursuant to
Section 8.01(b)(i) and (x) at the time of such termination
there is a publicly announced Acquisition Proposal from a bona
fide proponent not affiliated or acting in concert with Parent
or any of Parent's Affiliates, which Acquisition Proposal has
not been withdrawn and (y) within six months of such
termination the
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Company enters into a definitive agreement with respect to any
alternative Acquisition Proposal; or
(ii) Parent or the Company terminates this Agreement pursuant to
Section 8.01(b)(iii) following the Company Stockholders Meeting
if (x) the stockholders of the Company shall have failed to
approve this Agreement and the Merger at the Company
Stockholders Meeting and (y) at the time of the Company
Stockholders Meeting there is a publicly announced Acquisition
Proposal from a bona fide proponent not affiliated or acting in
concert with Parent or any of Parent's Affiliates, which
Acquisition Proposal has not been withdrawn and (z) within six
months of such termination the Company enters into a definitive
agreement with respect to any alternative Acquisition Proposal;
or
(iii) Parent terminates this Agreement pursuant to Section 8.01(c);
or
(iv) Parent terminates this Agreement pursuant to Section 8.01(d) ;
or
(v) The Company terminates this Agreement pursuant to Section
8.01(e).
The Company Break-Up Fee shall be paid within three (3) business days after
a termination by Parent pursuant to Section 8.01(c) or 8.01(d) or a
termination by the Company pursuant to Section 8.01(e); and in the case of
the events specified in clause (i) or clause (ii) of this Section 6.06(b)
shall be made within three business days of the execution of such
definitive agreement.
Section 6.07. Public Announcements. Parent and Sub, on the one hand, and
the Company, on the other hand, shall consult with each other before issuing,
and provide each other the opportunity to review and comment upon, any press
release or other public statements with respect to the transactions contemplated
hereby and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by applicable
Law (including foreign regulations relating to competition), court process or by
obligations pursuant to any listing agreement with any national securities
exchange.
Section 6.08. Actions Respecting Commitment Letters; Financing.
(a) Parent and Sub shall use commercially reasonable efforts to perform
all obligations required to be performed by them in accordance with
and pursuant to the Commitment Letter and shall not amend, terminate
or waive any provisions under such Commitment Letter without the
Company's consent if the effect thereof would be reasonably likely to
prevent or materially delay the consummation of the transactions
contemplated hereby.
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(b) Parent and Sub shall use their commercially reasonable efforts to
obtain the financing on the terms set forth in the Commitment Letter;
provided, however, that in the event that the sources of debt
financing identified in the Commitment Letter indicate that they are
not willing to consummate the financing, Parent and Sub shall use
commercially reasonable efforts to obtain substitute financing with
other nationally recognized financial institutions ("Substitute
Financing"), provided that such Substitute Financing is not on terms
materially more burdensome to Parent and Sub. Parent and Sub shall
from time to time provide such information as the Company may
reasonably request regarding the status of the financing of the Merger
and related negotiations.
(c) Parent and Sub shall provide prompt written notice to the Company of
the receipt of notification by the contemplated lender(s) under the
Commitment Letter or in connection with any Substitute Financing, of
its or their unwillingness or intended unwillingness to provide the
financing described in the Commitment Letter and, in each case, the
stated reasons therefor, if known (such written notice to be provided
as promptly as practicable and, in any event, within one business day
of Parent or Sub becoming aware of such event).
(d) Except as set forth in Schedule 6.08 or in the ordinary course of
business, Parent and Sub shall not, at any time prior to the earlier
of the Effective Time or the termination of this Agreement in
accordance with its terms, directly or indirectly: (i) declare, set
aside or pay any dividends on, or make any other distributions in
respect of, any of its capital stock, (ii) purchase, redeem or
otherwise acquire any shares of capital stock of Parent or Sub or any
other securities thereof or any rights, warrants or options to acquire
any such shares or other securities, (iii) create or contribute cash
or other property to any subsidiary, (iv) make any loans to or
investments in any Person (other than the acquisition of shares of the
Company through the transactions contemplated hereby) or (v) make any
other payments or distributions of cash or other property to any of
its Affiliates.
(e) Company shall provide all information reasonably requested by Parent
or Sub in connection with the financing to be supplied pursuant to the
Commitment Letter.
Section 6.09. Rights Agreement. The Company Board shall take all action
requested in writing by Parent in order to render the Company Rights
inapplicable to the transactions contemplated hereby. Except as approved in
writing by Parent, the Company Board shall not (i) amend the Company Rights
Agreement, (ii) redeem the Company Rights or (iii) take any action with respect
to, or make any determination under, the Company Rights Agreement, in each case
in a manner adverse to Parent or Sub.
Section 6.10. Stockholder Litigation. The Company shall give Parent the
opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and/or its directors relating to this Agreement
or the transactions
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contemplated hereby; provided, however, that Parent shall
have the right to prevent the Company from entering into any such settlement
without Parent's consent, which consent shall not be unreasonably withheld or
delayed, if Parent agrees to indemnify the Company and each director of the
Company for the amount of its, his or her liability, if any, arising from the
underlying claim, net of any insurance proceeds received by such Person, that is
in excess of the amount for which such Person would have been liable under such
settlement.
Section 6.11. Lease Termination. The Company shall exercise its
termination rights under certain leases of real property as set forth in Section
6.11 of the Company Disclosure Schedule.
ARTICLE VII
Conditions Precedent
--------------------
Section 7.01. Conditions to Each Party's Obligation To Effect The Merger.
The respective obligation of each party to effect the Merger is subject to the
satisfaction or express written waiver on or prior to the Closing Date of the
following conditions:
(a) Stockholder Approval. The Company shall have obtained the Company
Stockholder Approval.
(b) Antitrust. The waiting period (and any extension thereof) applicable
to the Merger under the HSR Act, if the HSR Act is applicable, shall
have been terminated or shall have expired. Any consents, approvals
and filings under any other foreign antitrust Law the absence of which
would prohibit the consummation of Merger, shall have been obtained or
made.
(c) No Injunctions or Restraints. No statute, rule, regulation, executive
order, decree, temporary restraining order, preliminary or permanent
injunction or other order enacted, entered, promulgated, enforced or
issued by any Governmental Entity or other legal restraint or
prohibition preventing the consummation of the Merger shall be in
effect; provided, however, that prior to asserting this condition each
of the parties shall have used all reasonable efforts to prevent the
entry of any such injunction or other order and to appeal as promptly
as possible any such injunction or other order that may be entered.
Section 7.02. Conditions Precedent to Parent's and Sub's Obligations.
Parent and Sub shall be obligated to effect the Merger only if each of the
following conditions is satisfied at or prior to the Closing Date, unless any
such condition is waived in writing by Parent:
(a) Representations and Warranties. The representations and warranties of
Company set forth in this Agreement shall be true and correct in all
material respects (without giving duplicative effect to any
materiality
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qualification contained in the applicable representation or warranty
other than representations and warranties contained in Section 3.20
and the first sentence of each of Section 3.18 and 3.19, which shall
be true and correct as written) as of the Closing Date with the same
force and effect as though made again at and as of the Closing Date,
except for any representations and warranties that address matters
only as of a particular date (which shall remain true and correct in
all material respects (without giving duplicative effect to any
materiality qualification contained in the applicable representation
or warranty) as of such date); and the Parent shall have received a
certificate signed on behalf of the Company by a duly authorized
officer of the Company to such effect.
(b) Performance of Obligations of Company. Company shall have performed in
all material respects all obligations required to be performed by it
under this Agreement at or prior to the Closing Date; and the Parent
shall have received a certificate signed on behalf of the Company by a
duly authorized officer of the Company to such effect.
(c) Absence of Material Adverse Changes. There shall not have occurred any
change in the business, assets, financial condition or results of
operations of Company or any of its Subsidiaries which has had, or is
reasonably likely to have, individually or in the aggregate, a Company
Material Adverse Effect.
(d) Financing. The financing contemplated in the Commitment Letter, or the
Substitute Financing, shall have been consummated.
(e) Demand for Payment. The Company shall have made demand for payment
under the Promissory Note dated April 18, 2000 by G. ▇▇▇▇ ▇▇▇▇▇▇ in
the principal amount of $1,860,000, such demand to require payment on
or before the Closing. If elected by G. ▇▇▇▇ ▇▇▇▇▇▇ in writing such
payment may be made by reducing the amount to be received pursuant to
Section 2.01(c) hereof with respect to shares of Company Common Stock
held by him.
Section 7.03. Conditions to Obligation of Company. Company shall be
obligated to effect the Merger only if each of the following conditions is
satisfied at or prior to the Closing Date, unless any such condition is waived
in writing by Company:
(a) Representations and Warranties. The representations and warranties of
Parent and Sub set forth in this Agreement shall be true and correct
in all material respects (without giving duplicative effect to any
materiality qualification contained in the applicable representation
or warranty) as of the Closing Date with the same force and effect as
though made again at and as of the Closing Date, except for any
representations and warranties that address matters only as of a
particular date (which shall remain true and correct in all material
respects (without giving duplicative effect to any materiality
qualification contained in the applicable representation or warranty)
as of such date); and the
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Company shall have received a certificate signed on behalf of the
Parent by a duly authorized officer of the Parent to such effect.
(b) Performance of Obligations of Parent and Sub. Parent and Sub shall
each have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing
Date; and the Company shall have received a certificate signed on
behalf of the Parent by a duly authorized officer of the Parent to
such effect.
ARTICLE VIII
Termination, Amendment and Waiver
---------------------------------
Section 8.01. Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after receipt of Company
Stockholder Approval:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if the Merger is not consummated on or before December 31,
2001, provided however, that if the Proxy Statement is selected
for review by the staff of the SEC, such date shall be extended
until February 28, 2002, provided that this extension shall not
be available to a party that is not in compliance with Section
6.01(a);
(ii) if any Governmental Entity shall have issued an order, decree
or ruling or takes any other action enjoining, restraining or
otherwise prohibiting the Merger and such order, decree, ruling
or other action shall have become final and nonappealable; or
(iii) if the stockholders of the Company shall fail to approve this
Agreement and the Merger at the Company Stockholders Meeting;
(c) by Parent, if (i) the representations and warranties of the Company
set forth in this Agreement are not true and correct in all material
respects (without giving duplicative effect to any materiality
qualification contained in the applicable representations and
warranties) as of the date hereof (or, in the case of any
representations and warranties that address matters only as of a
particular date other than the date hereof, as of such other specified
date) and such misrepresentations cannot be or have not been cured
within the 30 day period (or such longer period as may be expressly
permitted by Parent) following the giving by Parent of written notice
to the Company of such breach or (ii) the Company violates or fails to
perform in any material respect its covenants contained in Section
5.02, which breach or failure to perform cannot be or has not been
cured
-38-
within the 30 day period (or such longer period as may be expressly
permitted by Parent) following the giving by Parent of written notice
to the Company of such violation or breach or (iii) the Company
violates or fails to perform in any material respect any of its other
covenants contained in this Agreement, which breach or failure to
perform would give rise to the failure of a condition set forth in
Section 7.02(b) and cannot be or has not been cured within the 30 day
period (or such longer period as may be expressly permitted by Parent)
following the giving by Parent of written notice to the Company of
such violation or breach;
(d) by Parent, if the Company Board/Special Committee (i) withdraws or
modifies in a manner adverse to Parent or Sub, or publicly resolves to
withdraw or modify in a manner adverse to Parent or Sub, its approval
or recommendation of this Agreement or the Merger, (ii) fails to
recommend to the Company's stockholders that they approve the Merger
and give the Company Stockholder Approval, (iii) publicly approves or
recommends, or resolves to approve or recommend, any alternative
Acquisition Proposal or (iv) in violation of the provisions of Section
6.01(b), fails to reconfirm the recommendation referred to in clause
(ii) above if requested in accordance with the applicable provisions
of Section 6.01(b), or fails to publicly announce (in accordance with
the applicable provisions of Section 6.01(b)) that the Company
Board/Special Committee is not recommending any alternative
Acquisition Proposal;
(e) by the Company pursuant to Section 5.02;
(f) by the Company, if either (i) the representations and warranties of
Parent and Sub set forth in this Agreement are not true and correct in
all material respects (without giving duplicative effect to any
materiality qualification contained in the applicable representations
and warranties) as of the date hereof (or, in the case of any
representations and warranties that address matters only as of a
particular date other than the date hereof, as of such other specified
date) and such misrepresentations cannot be or have not been cured
within the 30 day period (or such longer period as may be expressly
permitted by the Company) following the giving by the Company of
written notice to Parent of such breach or (ii) Parent or Sub violates
or fails to perform in any material respect any of their covenants
contained in this Agreement, which breach or failure to perform would
give rise to the failure of a condition set forth in Section 7.03(b)
and cannot be or has not been cured within the 30 day period (or such
longer period as may be expressly permitted by the Company) following
the giving by the Company of written notice to Parent of such
violation or breach; or
(g) by either the Company or Parent if any of the events specified in
Section 6.08(c) occurs and notwithstanding the commercially reasonable
efforts of Parent and Sub to secure Substitute Financing as
contemplated by Section 6.08(b) Parent and Sub are not able to obtain
such Substitute Financing within thirty (30) days of delivery of
notice pursuant to Section 6.08(c).
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Section 8.02. Procedure and Effect of Termination. In the event of the
termination of this Agreement by Company or Parent as provided in Section 8.01,
this Agreement shall forthwith become void and have no effect other than Section
3.14(a), Section 4.06, the confidentiality provisions contained in Section 6.02,
Section 6.06, this Section 8.02 and Article IX, which provisions shall survive
such termination, and all obligations of the parties hereunder (other than
pursuant to such enumerated provisions) shall terminate without any liability or
obligation on the part of Parent, Sub or the Company, to any party, except that
such termination will not affect the respective rights or obligations of the
parties with respect to any breach of any representation, warranty or covenant
set forth in this Agreement prior to such termination.
Section 8.03. Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties. This Agreement
may be so amended by the parties at any time before or after receipt of the
Company Stockholder Approval; provided, however, that after receipt of the
Company Stockholder Approval, there shall be made no amendment that by Law
requires further approval by the stockholders of the Company without the further
approval of such stockholders; and provided, further, that after this Agreement
is adopted by the Company's stockholders, no such amendment or modification
shall be made that reduces the amount or changes the form of Merger
Consideration or otherwise materially and adversely affects the rights of the
Company's stockholders hereunder, without the further approval of such
stockholders.
Section 8.04. Extension; Waiver. At any time prior to the Effective Time,
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the proviso of
Section 8.03, waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
Section 8.05. Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement, an amendment of this Agreement pursuant to
Section 8.03 or an extension or waiver pursuant to Section 8.04 shall, in order
to be effective, require in the case of Parent, Sub or the Company, action by
its Board of Directors or the duly authorized designee of its Board of
Directors.
ARTICLE IX
General Provisions
------------------
Section 9.01. Nonsurvival of Representations and Warranties. Except as
provided in the last sentence of this Section 9.01, none of the representations,
warranties and covenants in this Agreement (including any rights arising out of
any breach of such representations, warranties and covenants) or in any
instrument delivered pursuant to this
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Agreement shall survive the Effective Time. This Section 9.01 (including any
rights arising out of any breach of such representations and warranties) shall
not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
Section 9.02. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given (i) seven days after mailing by certified mail, (ii) when delivered by
hand, (iii) upon confirmation of receipt by telecopy or (iv) one business day
after sending by overnight delivery service, to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) If to Company:
Renaissance Worldwide, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Parent or Sub:
Aquent, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇ and ▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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Section 9.03. Definitions. For purposes of this Agreement:
-----------
An "Affiliate" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person. As used in this definition the
term "control" (including the terms "controlled by" and "under common control
with") means, with respect to the relationship between or among two or more
Persons, the possession, directly or indirectly or as trustee or executor, of
the power to direct or cause the direction of the affairs or management of a
Person, whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise, including, without limitation, the
ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
A "Company Material Adverse Effect" means any change, effect, event,
occurrence, state of facts or development that is materially adverse to the
business, assets, financial condition, or results of operations of the Company
and the Company Subsidiaries, or that materially and adversely affects the
ability of the Company to perform its obligations under this Agreement and
consummate the transactions contemplated hereby; provided however, that none of
the following shall be deemed in themselves, either alone or in combination, to
constitute, and none of the following shall be taken into account in determining
whether there has been or will be a Company Material Adverse Effect: (a) any
change in the market price or trading volume of Company's stock after the date
hereof, (b) any adverse change, effect, event, occurrence, state of facts or
development to the extent attributable to the announcement or pendency of the
transactions contemplated hereby (including any cancellations of or delays in
customer orders, any reduction in sales, any disruption in supplier,
distributor, partner or similar relationships or any loss of employees); (c) any
adverse change, effect, event, occurrence, state of facts or development
attributable to conditions affecting the industries in which Company
participates, the economy of the United States as a whole or foreign economies
in any locations where the Company or any Company Subsidiary has material
operations or sales which does not have a disproportionate effect on the Company
and its Subsidiaries, (d) any adverse change, effect, event, occurrence, state
of facts or development arising from or relating to compliance with the terms
of, or the taking of any action required by, this Agreement, or (e) any adverse
change, effect, event, occurrence, state of facts or development arising from
any action taken by Parent, Sub or any of their respective directors, officers,
employees, agents or Affiliates.
A "Person" means any individual, firm, corporation, partnership, company,
limited liability company, trust, joint venture, association, Governmental
Entity or other entity.
A "Subsidiary" of any Person means another Person, an amount of the voting
securities, other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first Person.
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"To the Knowledge" of any specified corporation means to the actual
knowledge of any current director or executive officer of such corporation.
Section 9.04. Definitions Cross Reference Table. The following terms
defined elsewhere in this Agreement in the Sections set forth below shall have
the respective meanings therein defined:
Term Definition
---- ----------
"Affiliate" Section 9.03
"Agreement" Preamble
"Appraisal Provisions" Section 2.01(d)
"Appraisal Shares" Section 2.01 (d)
"Acquisition Proposal" Section 5.02(a)
"Articles of Merger" Section 1.03
"BCL" Section 1.03
"Buyer Disclosure
Schedules" Article IV
"Certificates" Section 2.02(b)
"Closing" Section 1.02
"Closing Date" Section 1.04
"Code" Section 3.10(b)
"Commitment Letter" Section 4.07
"Company" Preamble
"Company Acquisition
Agreement" Section 5.02(b)
"Company Benefit Plans" Section 3.10(a)
"Company Board" Section 3.04(b)
"Company Break-Up Fees" Section 6.06(b)
"Company By-laws" Section 3.01
"Company Capital Stock" Section 3.03
"Company Charter" Section 3.01
"Company Common Stock" Preamble
"Company Disclosure
Schedule" Article III
"Company Intellectual
Property Rights" Section 3.13(b)
"Company Material Adverse
Effect" Section 9.03
"Company Notice" Section 5.02(c)
"Company Rights" Section 3.03
"Company Rights Agreement" Section 3.03
"Company SEC Documents" Section 3.06
"Company Stock Options" Section 3.03
"Company Stock Option Plan" Section 3.16
"Company Stock Purchase
Plan" Section 3.16
"Company Stockholder
Approval" Section 3.04(c)
"Company Stockholders
Meeting" Section 6.01(b)
"Company Subsidiaries" Section 3.01
"Consent" Section 3.05(b)
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"Contract" Section 3.05(a)
"Effective Time" Section 1.05
"ERISA" Section 3.10(a)
"Exchange Act" Section 3.06
"Exchange Fund" Section 2.02(a)
"Filed Company SEC
Documents" Section 3.08
"Financing" Section 4.07
"GAAP" Section 3.06
"Governmental Entity" Section 3.05(b)
"HSR Act" Section 3.05(b)
"June 1 Merger Agreement Section 3.04(d)
"Judgment" Section 3.05(a)
"Law" Section 3.05(a)
"Leases" Section 3.18
"Liens" Section 3.02
"Maximum Premium" Section 6.05(b)
"Merger" Preamble
"Merger Consideration" Section 2.01(c)
"Parent" Preamble
"Parent Material Adverse
Effect" Section 4.01
"Paying Agent" Section 2.02(a)
"Person" Section 9.03
"Proxy Statement" Section 3.05(b)
"SEC" Section 3.05(b)
"Securities Act" Section 3.06
"Series A Preferred Stock" Section 3.03
"Special Committee" Recitals
"Sub" Preamble
"Subsidiary" Section 9.03
"Substitute Financing" Section 6.08(b)
"Superior Proposal" Section 5.02(b)
"Surviving Corporation" Section 1.01
"Tax Return" Section 3.09(d)
"Taxes" Section 3.09(d)
"Third-Party Intellectual
Property Rights" Section 3.13(b)
"to the Knowledge" Section 9.03
"Voting Company Debt" Section 3.03
Section 9.05. Interpretation. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation".
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Section 9.06. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
Section 9.07. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
Section 9.08. Entire Agreement; No Third-Party Beneficiaries. This
Agreement, taken together with the Company Disclosure Schedule, (a) constitute
the entire agreement, and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the transactions
contemplated hereby and (b) except for the provisions of Article II, Section
6.04 and Section 6.05, is not intended to confer upon any Person other than the
parties any rights or remedies.
Section 9.09. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of The Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
Section 9.10. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any of or all its rights, interests and obligations under this
Agreement to Parent or to any direct or indirect wholly owned Subsidiary of
Parent, but no such assignment shall relieve Sub of any of its obligations under
this Agreement. Any purported assignment without such consent shall be void.
Subject to the preceding sentences, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
Section 9.11. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Massachusetts state court or
any Federal court located in The Commonwealth of Massachusetts, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
Personal jurisdiction of any Massachusetts state court or any Federal court
located in The
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Commonwealth of Massachusetts in the event any dispute arises out of this
Agreement or any transactions contemplated hereby, (b) agrees that it will not
attempt to deny or defeat such Personal jurisdiction by motion or other request
for leave from any such court, (c) agrees that it will not bring any action
relating to this Agreement or any transactions contemplated hereby in any court
other than any Massachusetts state court or any Federal court sitting in The
Commonwealth of Massachusetts and (d) waives any right to trial by jury with
respect to any action related to or arising out of this Agreement or any
transactions contemplated hereby.
Section 9.12. Consents. Whenever this Agreement requires or permits
consent by or on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of compliance
as set forth in Sections 8.04 and 8.05. Sub hereby agrees that any consent or
waiver of compliance given by Parent hereunder shall be conclusively binding
upon it, whether given expressly on its behalf or not.
Section 9.13. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 9.14. Parent Guarantee.
(a) Parent hereby agrees to cause Sub and the Surviving Corporation to
perform in full all of their obligations (including, without limitation,
the obligation to pay any amounts due pursuant to this Agreement). The
Parent hereby further unconditionally guarantees the full and punctual
payment of all amounts payable by Sub or the Surviving Corporation under
this Agreement. Upon failure by Sub or the Surviving Corporation to pay
punctually any such amount, Parent shall forthwith on demand pay the amount
not so paid.
(b) The obligations of the Parent hereunder shall be unconditional and
absolute and, without limiting the generality of the foregoing, shall not
be released, discharged or otherwise affected by any change in the
corporate existence, structure or ownership of Sub or the Surviving
Corporation, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting Sub or the Surviving Corporation or their assets or
any resulting release or discharge of any obligation of the Sub or the
Surviving Corporation contained in this Agreement.
(c) The Parent irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any person or entity
against the Sub or the Surviving Corporation or any other person or entity.
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IN WITNESS WHEREOF, Parent, Sub and Company have caused this Agreement and Plan
of Merger to be executed as an instrument under seal as of the date first
written above by their respective officers thereunto duly authorized.
AQUENT, INC.
By
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Name:
Title:
JETELECTRO ACQUISITION CORP.
By
---------------
Name:
Title:
RENAISSANCE WORLDWIDE, INC.
By
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Name:
Title:
By
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Name:
Title:
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EXHIBIT A
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[Articles of Incorporation of Surviving Corporation]
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