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EXHIBIT 99.2
[EXECUTION COPY]
SELLING SHAREHOLDER'S AGREEMENT
dated as of September 24, 1997
by and between
VIAD CORP
and
▇▇▇▇ ▇. ▇▇▇▇▇▇
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TABLE OF CONTENTS
ARTICLE I.
ESCROW OF DACHIS SHARES
Section 1.1. Escrow of Dachis Shares......................................1
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF DACHIS
Section 2.1. Authority....................................................2
Section 2.2. Accuracy of Company's Representations........................2
Section 2.3. Company Stock................................................2
Section 2.4. Subsidiaries.................................................3
Section 2.5. Authority; Non-Contravention; Approvals......................3
Section 2.6. Reports and Financial Statements.............................4
Section 2.7. Absence of Undisclosed Liabilities...........................4
Section 2.8. Absence of Certain Changes or Events.........................5
Section 2.9. Litigation...................................................5
Section 2.10. Accuracy of Proxy Statement.................................5
Section 2.11. No Violation of Law.........................................5
Section 2.12. Compliance with Organizational Document.....................5
Section 2.13. State Takeover Statutes.....................................6
Section 2.14. Vote Required...............................................6
Section 2.15. Intellectual Property.......................................6
Section 2.16. Validity of Contracts.......................................6
Section 2.17. Customers and Suppliers.....................................8
Section 2.18. Indebtedness To and From Officers, Directors and Others.....8
Section 2.19. Licenses and Permits........................................9
Section 2.20. Taxes and Returns...........................................9
Section 2.21. ERISA Related Matters......................................10
Section 2.22. Labor and Employment Matters...............................12
Section 2.23. Tax Free Structure.........................................13
Section 2.24. No Breach..................................................13
Section 2.25. Un-bank Agreements.........................................13
Section 2.26. No Undisclosed Liabilities.................................13
Section 2.27. Absence of Other Claims....................................13
Section 2.28. No Violations of Environmental Law.........................13
Section 2.29. No Tax Liabilities.........................................13
Section 2.30. No Criminal Conduct........................................14
Section 2.31. No Violations of Other Agreement...........................14
Section 2.32. No Vendor Liabilities......................................14
Section 2.33. Advisors and Investment Bankers............................14
Section 2.34. Complete Disclosure........................................14
Section 2.35. Complete Performance.......................................14
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ARTICLE III.
CERTAIN AGREEMENTS
Section 3.1. Agreement to Cooperate......................................14
Section 3.2. Confidentiality.............................................15
Section 3.3. Tax Treatment...............................................15
Section 3.4. Pooling.....................................................15
Section 3.5. Affiliates Agreements.......................................15
Section 3.6. Comply With Merger Agreement................................15
Section 3.7. Delivery of Certificate of Adequate Documentation...........15
Section 3.8. Continuation of Indemnities: No Circular Indemnities.......16
ARTICLE IV.
TERMINATION, AMENDMENT AND WAIVER
Section 4.1. Termination.................................................16
Section 4.2. Effect of Termination or Abandonment........................16
ARTICLE V.
INDEMNIFICATION
Section 5.1. Indemnification.............................................17
Section 5.2. Participation in Litigation.................................17
Section 5.3. Claims Procedure............................................17
Section 5.4. Payment of Indemnified Losses...............................18
Section 5.5. Limitations on Indemnity....................................18
Section 5.6. Special Indemnification.....................................18
Section 5.7. Manner of Payment...........................................19
ARTICLE VI.
DISPUTE RESOLUTION
Section 6.1. Representatives.............................................20
Section 6.2. Mediation..................................................20
Section 6.3. Arbitration.................................................20
ARTICLE VII.
GENERAL PROVISIONS
Section 7.1. Definitions.................................................22
Section 7.2. Amendment and Modification..................................22
Section 7.3. Waiver......................................................22
Section 7.4. Survival....................................................22
Section 7.5. Notices.....................................................22
Section 7.6. Binding Effect; Assignment..................................24
Section 7.7. Expenses....................................................24
Section 7.8. Governing Law...............................................24
Section 7.9. Interpretation..............................................24
Section 7.10. Entire Agreement...........................................24
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Section 7.11. Severability...............................................24
Section 7.12. Specific Performance.......................................25
Section 7.13. Disclosure Schedules.......................................25
Section 7.14. Counterparts...............................................25
Section 7.15. Parties in Interest........................................25
EXHIBIT A FORM OF ESCROW AGREEMENT.....................................27
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SELLING SHAREHOLDER'S AGREEMENT
This SELLING SHAREHOLDER'S AGREEMENT, dated as of September 24, 1997
(this "Agreement"), is by and between VIAD CORP, a Delaware corporation
("Parent") and ▇▇▇▇ ▇. ▇▇▇▇▇▇, a significant shareholder of GAME FINANCIAL
CORPORATION, a Minnesota corporation ("Company") (together with his successors
and assigns, "Dachis"), solely in his capacity as a shareholder and not in his
capacity as an officer or director of the Company.
RECITALS:
WHEREAS, the respective Boards of Directors of Parent and the
Company have approved the merger ("Merger") of Game Acquisition Corp., a
Minnesota corporation ("Acquisition Sub") with and into the Company pursuant to
the terms and conditions set forth in the Agreement and Plan of Merger dated as
of the date hereof, by and among Parent, Acquisition Sub and the Company
("Merger Agreement"); and
WHEREAS, as a condition and inducement to Parent and Acquisition Sub
entering into the Merger Agreement, concurrently with the execution and delivery
of this Agreement, Dachis has agreed to enter into this Agreement and has agreed
to and will enter into the Escrow Agreement, in substantially the form set forth
in Exhibit A or another form reasonably satisfactory to each of the parties
thereto ("Escrow Agreement"), by and among Parent, Dachis and the Escrow Agent
(as defined therein) on or before the Closing Date (as defined in the Merger
Agreement).
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, Parent
and Dachis, intending to be legally bound hereby, agree as follows (capitalized
terms used herein without definition shall have the meanings set forth in the
Merger Agreement or, if not defined therein, the Escrow Agreement):
ARTICLE I.
ESCROW OF DACHIS SHARES
Section 1.1. Escrow of Dachis Shares. Pursuant to the terms of Section 3.6
of the Merger Agreement, and as security for the representations, warranties,
covenants, indemnities and other obligations of Dachis to the Parent or the
Surviving Corporation, at the Effective Time, Certificates that would otherwise
have been issued to Dachis in the Merger pursuant to Section 3.1 of the Merger
Agreement representing Parent Common Stock having an aggregate value (based upon
the Viad Price) equal to the sum of the Maximum Indemnification Amount (as
defined in Section 5.5(b)), and the Software Fee (as defined in Section 5.6)
shall be deposited with and held in escrow by the Escrow Agent (the "Escrowed
Shares"). All Escrowed Shares, together with the proceeds from the sale of any
Escrowed Shares and any interest accrued from such proceeds from the Closing
Date until its distribution in accordance with the terms of the Escrow
Agreement, shall be payable into and held in escrow pursuant to the terms of the
Escrow Agreement ("Escrowed Consideration"). Dachis may exercise any voting
rights that he may have with respect to the Escrowed Shares during the Escrow
Term and all dividends or other distributions (and interest accrued thereon)
payable with respect to the Escrowed Shares while such Escrowed Shares are held
in escrow during the Escrow Term shall be payable to Dachis.
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ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF DACHIS
Dachis represents and warrants to Parent and Surviving Corporation as
follows:
Section 2.1. Authority. Dachis has the requisite capacity, power and
authority to enter into his Employment Agreement with the Company, the
Irrevocable Proxy Agreement, the Escrow Agreement, the Affiliate Agreement and
this Agreement and to consummate the transactions contemplated hereby and
thereby. The Employment Agreement, the Irrevocable Proxy Agreement, the Escrow
Agreement, the Affiliate Agreement and this Agreement have each been duly and
validly executed and delivered by Dachis and, assuming the due authorization,
execution and delivery of such agreements by Parent and Company, if applicable,
constitute valid and legally binding agreements of Dachis enforceable against
him in accordance with their respective terms, except to the extent that
enforcement may be limited by the laws of bankruptcy or insolvency, or laws
relating to creditor's rights generally.
Section 2.2. Accuracy of Company's Representations. To the best knowledge
of Dachis, the representations and warranties of the Company contained in the
Merger Agreement are true and correct in all material respects on and as of the
date of this Agreement and on and as of the Effective Time as if made on and as
of such date, except as contemplated or permitted by this Agreement and except
those which in the aggregate would not have a Company Material Adverse Effect or
Parent Adverse Impact.
Section 2.3. Company Stock. (a) The Company has 10,000,000 authorized
shares of Common Stock, of which 4,522,522 shares are outstanding as of August
31, 1997, all of which are or shall be validly issued and are fully paid,
nonassessable and free of preemptive rights and 1,000,000 shares of Preferred
Stock, none of which have been issued or are outstanding. Except as set forth in
Section 4.2 of the Company Disclosure Schedule, as of the date hereof and as of
the Closing Date, there are no outstanding stock appreciation rights,
subscriptions, options, warrants, rights, calls, contracts, voting trusts,
proxies or other commitments, understandings, restrictions, or arrangements,
including any right of conversion or exchange under any outstanding security,
instrument or other agreement obligating the Company to issue, deliver, sell or
cause to be issued, delivered or sold, additional shares of the capital stock of
the Company or obligating the Company or any Subsidiary of the Company to grant,
extend or enter into any such agreement or commitment except pursuant to this
Agreement. Except as set forth in the Stock Option Agreement or set forth in
Section 4.2 of the Company Disclosure Schedule, there are no commitments,
understandings, restrictions or arrangements obligating the Company to purchase,
redeem or acquire, or register under any securities law any shares of capital
stock or any securities or rights convertible into, exchangeable for, or
evidencing the right to subscribe to any shares of capital stock of the Company.
(b) Except as set forth in Section 4.2 of the Company Disclosure
Schedule, and except for any obligations in connection with this Agreement,
there are not as of the date hereof and there will not be at the Closing Date,
any stockholder agreement, voting trust or other agreements or understandings to
which the Company or any of the Significant Shareholders of the Company are a
party or to which any of them is bound relating directly or indirectly to any
Company Common Stock or other capital stock. Except as stated in Section 4.2 of
the Company Disclosure Schedule, there has not been, and there will not have
been on the Closing Date, any change in the equity interest of the Common Stock
or other capital stock of the Company since June 30, 1994. For purposes of this
subsection, "any change in the equity interest of the Common Stock or other
capital stock of the Company" includes but is not limited to: distributions to
shareholders of any dividends; additional issuances, exchanges or retirements of
stock;
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reacquisition of shares (treasury shares); grants, exercises, or cancellation of
stock options; outstanding warrants; and spin-offs.
Section 2.4. Subsidiaries. Each Subsidiary of the Company is set forth in
Section 4.3 of the Disclosure Schedule, is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite power and authority to own, lease and
operate its assets and properties and to carry on its business as it is now
being conducted. The Company has never had a Subsidiary that is not listed in
Section 4.3 of the Company Disclosure Schedule as a Subsidiary of the Company.
Except as set forth in Section 4.3 of the Company Disclosure Schedule, each of
such Subsidiaries is qualified to do business, and is in good standing in the
State(s) set forth in Section 4.2 of the Company Disclosure Schedule, and
without limiting the foregoing, to the best knowledge of Dachis, is qualified to
do business with the Native American Tribes set forth in Section 4.3 of the
Company Disclosure Schedule. Any such Subsidiary does not lease or operate
properties or otherwise conduct business in any other State or to the best
knowledge of Dachis, with any Native American Tribe. Except as set forth in
Section 4.3 of the Disclosure Schedule, all of the outstanding shares of capital
stock of each Subsidiary are validly issued, fully paid, nonassessable and free
of preemptive rights, and are owned directly or indirectly by the Company free
and clear of any liens, claims, encumbrances, security interests, equities,
charges and options of any nature whatsoever. Each then existing Subsidiary of
the Company is listed in Exhibit 21 to the Company 10-KSB. As of the date hereof
and as of the Closing Date, there are no outstanding stock appreciation rights,
subscriptions, options, warrants, rights, calls, contracts, voting trusts,
proxies or other commitments, understandings, restrictions or arrangements
relating to the issuance, sale, voting, transfer, ownership or other rights
affecting any shares of capital stock of any Subsidiary of the Company,
including any right of conversion or exchange under any outstanding security,
instrument or agreement. Section 4.3 of the Company's Disclosure Schedule sets
forth a complete list of all corporations, partnerships, joint ventures and
other business entities in which the Company or any of its Subsidiaries directly
or indirectly owns an interest and such Subsidiaries' direct and indirect share,
partnership or other ownership interest of each such entity.
Section 2.5. Authority; Non-Contravention; Approvals. (a) The Company has
full corporate power and authority to enter into the Merger Agreement and the
Stock Option Agreement and subject to Company Stockholders' Approval and the
Company Required Approvals, to consummate the transactions contemplated hereby.
The execution, delivery and performance of the Merger Agreement and the Stock
Option Agreement and the consummation by the Company of the transactions
contemplated thereby have been duly authorized by the Company's Board of
Directors, and no other corporate proceedings on the part of the Company are
necessary to authorize the execution and delivery of the Merger Agreement and
the Stock Option Agreement and the consummation by the Company of the
transactions contemplated hereby, except for receipt of the Company
Stockholders' Approval and the obtaining of the Company Required Approvals. The
Merger Agreement and the Stock Option Agreement have been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery hereof by Parent and Acquisition Sub, constitute valid
and legally binding agreements of the Company enforceable against it in
accordance with their respective terms, except to the extent that enforcement
may be limited by the laws of bankruptcy or insolvency, or laws relating to
creditors' remedies generally.
(b) Except as set forth in Section 4.4 of the Company's Disclosure
Schedule, the execution and delivery of the Merger Agreement and the Stock
Option Agreement by the Company does not, and the consummation by the Company of
the transactions contemplated thereby will not, violate, conflict with or result
in a breach of any provision of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under, or result in the
creation of
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any lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company or any of its Subsidiaries under any of the terms,
conditions or provisions of (i) the respective charters or By-Laws of the
Company or any of its Subsidiaries, (ii) subject to obtaining the Company
Required Approvals and the receipt of the Company Stockholders' Approval, any
statute, law, ordinance, rule, regulation, judgment, decree, order, injunction,
writ, permit or license of any Governmental Authority (other than a Native
American Authority), or to the best knowledge of Dachis, any Native American
Authority, applicable to the Company or any of its Subsidiaries or any of their
respective properties or assets, or (iii) any note, bond, mortgage, indenture,
deed of trust, license, franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which the Company or any of
its Subsidiaries is now a party or by which the Company or any of its
Subsidiaries or any of their respective properties or assets may be bound or
affected, excluding from the foregoing clauses (ii) and (iii) such violations,
conflicts, breaches, defaults, terminations, accelerations or creations of
liens, security interests, charges or encumbrances that would not, in the
aggregate, have or may have a Company Material Adverse Effect or Parent Adverse
Impact.
(c) Except for the Company Required Approvals, no declaration,
filing or registration with, or notice to, or authorization, consent or approval
of, any Governmental Authority (other than a Native American Authority), or, to
the best knowledge of Dachis, any Native American Authority, is necessary for
the execution and delivery of the Merger Agreement and the Option Agreement by
the Company or the consummation by the Company of the transactions contemplated
hereby, except for such declarations, filings, registrations, notices,
authorizations, consents or approvals the failure of which to make or obtain, as
the case may be, will not, in the aggregate, have or may have a Company Material
Adverse Effect or a Parent Adverse Impact.
Section 2.6. Reports and Financial Statements. Since December 31, 1992,
the Company and each of its Subsidiaries have filed all forms, statements,
reports and documents (including all exhibits, amendments and supplements
thereto) required to be filed by them under each of the Securities Act, the
Exchange Act, applicable laws and regulations of the Company's and its
Subsidiaries' jurisdictions of incorporation and the respective rules and
regulations thereunder, all of which complied in all material respects with all
applicable requirements of the appropriate act and the rules and regulations
thereunder. The Company has delivered to Parent true and complete copies of its
Company SEC Reports, and the Recent Company Financial Statements and will
deliver copies of all Company Reports filed after the date hereof but before the
Closing Date. As of their respective dates, the Company SEC Reports did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Company Financial Statements fairly present in all material respects the
financial position of the Company and its Subsidiaries as of the dates thereof
and the results of their operations and cash flows for the periods then ended in
conformity with generally accepted accounting principles applied on a consistent
basis (except as may be indicated therein or in the notes thereto), subject, in
the case of the unaudited interim financial statements, to normal year end and
audit adjustments and any other adjustments described therein.
Section 2.7. Absence of Undisclosed Liabilities. Except as set forth in
Section 4.6 of the Company's Disclosure Schedule or in the Recent Company
Reports, neither the Company nor any of its Subsidiaries had at December 31,
1996, or has incurred since that date, any liabilities or obligations (whether
absolute, accrued, contingent or otherwise) of any nature, except liabilities,
obligations or contingencies (a) which are accrued or reserved against in the
Recent Company Financial Statements or reflected in the notes thereto or (b)
which were incurred after December 31, 1996, and were incurred in the ordinary
course of business and consistent with past practices and, in either case,
except for any such
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liabilities, obligations or contingencies which (i) would not, in the aggregate,
have a Company Material Adverse Effect or Parent Adverse Impact, (ii) have been
discharged or paid in full prior to the date hereof; or (iii) would not be
required to be disclosed in the Company Financial Statements or the notes
thereto.
Section 2.8. Absence of Certain Changes or Events. Except as set forth in
Section 4.7 of the Company's Disclosure Schedule or in the Recent Company
Reports, since December 31, 1996, there has not been any material adverse change
in the business, financial condition or the results of operations of the Company
and its Subsidiaries, taken as a whole that would result in a Company Material
Adverse Effect or Parent Adverse Impact and the Company and its Subsidiaries
have in all material respects conducted their respective businesses in the
ordinary course consistent with past practice.
Section 2.9. Litigation. Except as disclosed in the Recent Company
Reports, the Recent Company Financial Statements, or Section 4.8 of the
Company's Disclosure Schedule, (a) there are no claims, suits, actions or
proceedings pending or, to the knowledge of Dachis, threatened, nor to the
knowledge of Dachis are there any investigations or reviews pending or
threatened, against, relating to or affecting the Company or any of its
Subsidiaries, which, if adversely determined, is reasonably likely to have a
Company Material Adverse Effect; (b) there have not been any developments since
December 31, 1996 with respect to such claims, suits, actions, proceedings,
investigations or reviews which, individually or in the aggregate, is reasonably
likely to have a Company Material Adverse Effect; and (c) except as contemplated
by the Company Required Approvals, neither the Company nor any of its
Subsidiaries is subject to any judgment, decree, injunction, rule or order of
any Governmental Authority, or any arbitrator which prohibits or restricts the
consummation of the transactions contemplated hereby or is reasonably likely to
have a Company Material Adverse Effect or Parent Adverse Impact.
Section 2.10. Accuracy of Proxy Statement. The Proxy Statement which shall
be included in the Registration Statement will not at the time of the mailing of
the Proxy Statement and any amendment or supplement thereto (unless the same is
corrected prior to the Company Stockholders' Meeting), and 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 or necessary to correct any statement in any
earlier filing with the SEC of such Proxy Statement or any amendment or
supplement thereto or any earlier communication to stockholders of the Company
with respect to the transactions contemplated by this Agreement. The Proxy
Statement will comply as to form in all material respects with all Applicable
Laws, including the provisions of the Exchange Act. Notwithstanding the
foregoing, no representation is made by Dachis with respect to information
supplied by Parent or Acquisition Sub or their representatives specifically for
inclusion in the Proxy Statement.
Section 2.11. No Violation of Law. Except as set forth in Section 4.10 of
the Company's Disclosure Schedule or the Recent Company Reports, neither the
Company nor any of its Subsidiaries has violated, is in violation of, or, to the
knowledge of Dachis, is under investigation with respect to or has been given
notice or been charged with any violation of, any law, statute, order, rule,
regulation, ordinance, or judgment of any Governmental Authority, except for (a)
any violations which in the aggregate would not have a Company Material Adverse
Effect or Parent Adverse Impact and (b) subject to Section 2.19, any violations
which arise solely from the failure by the Company or any of its Subsidiaries to
obtain Company Approvals from any Native American Authority.
Section 2.12. Compliance with Organizational Document. Except as disclosed
in the Recent Company Reports, the Recent Company Financial Statements or
Section 4.11 of the Company's Disclosure Schedule, to the knowledge of Dachis,
the Company and each of its Subsidiaries have not violated, are not
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in breach or violation of or in default in the performance or observance of any
term or provision of, and no event has occurred which, with lapse of time or
action by a third party (or both), could result in a default under the
respective charters or By-laws of the Company or any of its Subsidiaries.
Section 2.13. State Takeover Statutes. The Board of Directors of the
Company has approved the Merger and any related transactions and the provisions
of MCL Section 302A.671 will not prevent, and the provisions of MCL 302A.673
will not impair, impede or prevent, any transaction contemplated hereby,
including the granting of the irrevocable proxy contemplated by the Irrevocable
Proxy Agreement.
Section 2.14. Vote Required. The affirmative vote of the holders of a
majority of the outstanding Company Common Stock is the only vote of the holders
of any class or series of Company capital stock necessary to approve the Merger
or the other transactions contemplated herein.
Section 2.15. Intellectual Property. Set forth on Section 4.14 of the
Company Disclosure Schedule is a complete list of the Intellectual Property.
Except as set forth in Section 4.14 of the Company Disclosure Schedule:
(a) The Company or its Subsidiaries are the sole and exclusive owner
of, or has the unrestricted right to use, any and all Intellectual Property, and
all items of Intellectual Property are valid and subsisting and Section 4.14 of
the Company Disclosure Schedule identifies the owner, licensor and licensee of
each item of Intellectual Property, as applicable;
(b) The conduct of the business and operations of the Company and
its Subsidiaries and the ownership, manufacture, purchase, sale, licensing, use
and performance of the products or services of the Company and its Subsidiaries
do not contravene, conflict with, violate or infringe upon any patent,
trademark, service ▇▇▇▇, copyright or other intellectual property right of a
third party and no proprietary information or trade secret has been
misappropriated by the Company or any of its Subsidiaries from any third party.
In addition, the use, licensing or sale by or to the Company as its Subsidiaries
of any of the Intellectual Property does not require the acquiescence, agreement
or consent of any third party;
(c) To Dachis' knowledge, the Intellectual Property, and the
Company's products and services are not subject to a challenge or claim of
infringement, interference or unfair competition or other claim and the
Intellectual Property, is not being infringed upon or violated by any third
party;
(d) With respect to any software included in the Intellectual
Property, there is no Year 2000 Problem, and the software will create, store and
generate output data related to or including dates on or after January 1, 2000,
without errors or omissions;
(e) Each item of software owned, used or licensed by the Company and
its Subsidiaries is fully operative, sufficiently developed and is currently
capable of performing its intended application(s) as described in Section 4.14
of the Company Disclosure Schedule; and
(f) The Intellectual Property is sufficient, fit and adequate for
the reasonably anticipated or intended future business and operations of the
Company and its Subsidiaries.
Section 2.16. Validity of Contracts. (a) Except for contracts, leases,
commitments, plans, agreements and licenses, together with all amendments
thereto, listed in Section 4.15(a) of the Company Disclosure Schedule (complete
and accurate copies of which have been delivered to Parent) and the agreements
entered into in connection with the Merger, the Company and its Subsidiaries are
neither a party to nor subject to:
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(i) any plan or contract providing for bonuses, pensions,
options, stock purchases, profit sharing, severance or termination pay,
collective bargaining or the like, or any contract or agreement with any
labor union;
(ii) any employment contract or contract for services which
requires the payment of $30,000 or more annually or which is not
terminable within 30 days by the Company or any of its Subsidiaries
without liability for any penalty or severance payment other than pursuant
to the Company's severance policies existing on the date hereof;
(iii) any contract or agreement for the purchase of any
commodity, material or equipment except purchase orders in the ordinary
course for less than $50,000 each;
(iv) any other contracts or agreements creating any obligation
of the Company or its Subsidiaries of $50,000 or more with respect to any
such contract;
(v) any contract or agreement providing for the purchase of
all or substantially all of its requirements of a particular product from
a supplier;
(vi) any contract or agreement which by its terms does not
terminate or is not terminable by the Company or its Subsidiaries or any
successor or assign within six months after the date hereof without
payment of a penalty of $50,000 or more;
(vii) any contract or agreement for the sale or lease of its
products or services not made in the ordinary course of business;
(viii) any contract with any sales agent or distributor of
products or services of the Company or any subsidiary;
(ix) any contract containing covenants limiting the freedom of
the Company or its Subsidiary to compete in any line of business or with
any person or entity;
(x) any contract or agreement for the purchase of any fixed
asset for a price in excess of $50,000 whether or not such purchase is in
the ordinary course of business;
(xi) any license agreement (as licensor or licensee);
(xii) any indenture, mortgage, promissory note, loan
agreement, guaranty or other agreement or commitment for the borrowing of
money and any related security agreement;
(xiii) any contract or agreement with any officer, employee,
director or stockholder of the Company or any Subsidiary or with any
persons or organizations controlled by or affiliated with any of them;
(xiv) any partnership, joint venture, or other similar
contract, arrangement or agreement;
(xv) any registration rights agreements, warrants, warrant
agreements or other rights to subscribe for securities, any voting
agreements, voting trusts, shareholder agreements or other similar
arrangements or any stock purchase or repurchase agreements or stock
restriction agreements; or
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(xvi) any other contract, written or oral, not described in
subsections (i) - (xv) which is material to the business or operations of
the Company.
(b) All Contracts are valid and are in full force and effect and
constitute legal, valid and binding obligations of the Company and its
Subsidiaries and the other parties thereto, enforceable in accordance with their
respective terms, except to the extent that enforcement may be limited by the
laws of bankruptcy or insolvency or other laws relating to creditors' remedies
generally. Neither the Company, its Subsidiaries, nor any other party to any
Contract of the Company or a Subsidiary, is in default in complying with any
provisions thereof, and no condition or event or facts exists which, with
notice, lapse of time or both would constitute a default thereof on the part of
either of the Company, or any Subsidiary or on the part of any other party
thereto in any such case that could have a Company Material Adverse Effect.
(c) Except as disclosed in Section 4.15(c) of the Company Disclosure
Schedule, no Contract with a customer or supplier of the Company or its
Subsidiaries provides, by its terms, for or permits the customer to terminate
the Contract at will, for convenience, without cause, or upon a change of the
ownership or control of the Company.
(d) Except as disclosed in Section 4.15(d) of the Company Disclosure
Schedule, no consent of any party to a Contract that is not a Native American
Tribe is required in connection with the consummation of the transactions
contemplated herein and in the Merger Agreement.
(e) With respect to any Contracts to which a Native American Tribe
is a party, to the best knowledge of Dachis, except as disclosed in Section
4.15(e) of the Company Disclosure Schedule, no consent of any Native American
Tribe is required for the consummation of the transactions contemplated herein
and in the Merger Agreement.
Section 2.17. Customers and Suppliers. Section 4.16 of the Company
Disclosure Schedule sets forth a true, complete and correct list of all
customers from which the Company has received revenues of over $100,000 and the
10 largest suppliers of the Company and its Subsidiaries by volume of purchases,
for each of the years ended December 31, 1994, 1995 and 1996 and for the six
month period ended June 30, 1997. Except as set forth in Section 4.16 of the
Company Disclosure Schedule, the Company and its Subsidiaries have not received
any indication from any material supplier of the Company or any of its
Subsidiaries to the effect that, and has no reason to believe that, such
supplier will stop, or materially decrease the rate of, supplying materials,
products or services to the Company or its Subsidiaries. Except as set forth in
Section 4.16 of the Company Disclosure Schedule, the Company and its
Subsidiaries have not received any indication from any material customer of the
Company or its Subsidiaries to the effect that, and has no reason to believe
that, such customer will stop, or materially decrease the use of the services of
the Company or any of its Subsidiaries.
Section 2.18. Indebtedness To and From Officers, Directors and Others.
Except as set forth in Section 4.17 of the Company Disclosure Schedule, (a) the
Company and its Subsidiaries are not indebted to any shareholder, director,
officer, employee or agent of the Company and its Subsidiaries except for
amounts due as normal salaries, wages, overtime payments, employee benefits and
bonuses and in reimbursement of ordinary expenses on a basis consistent with the
past practices of the Company and (b) no shareholder, director, officer,
employee or agent of the Company or any of its Subsidiaries is indebted to the
Company or any of its Subsidiaries except for advances for ordinary business
expenses on a basis consistent with the past practices of the Company.
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Section 2.19. Licenses and Permits. Section 4.18 of the Company Disclosure
Schedule lists all Company Approvals required from any Governmental Authority
(other than a Native American Authority) and to the best knowledge of Dachis,
any Native American Authority in order for the Company and its Subsidiaries to
conduct its business. The Company has obtained all Company Approvals (other than
from Native American Authorities), which are valid and in full force and effect,
and to the best knowledge of Dachis, the Company has obtained all Company
Approvals from Native American Authorities and to the Company's knowledge, such
approvals are in full force and effect, except where the lack of such Company
Approvals would not have a Company Material Adverse Effect or Parent Adverse
Impact. Except as disclosed in Section 4.18 of the Company Disclosure Schedule,
none of the Company Approvals is subject to termination by their express terms
as a result of the execution of this Agreement by the Company or the
consummation of the Merger. No further Company Approvals (other than from Native
American Authorities) and, to the best knowledge of Dachis, no further Company
Approvals from any Native American Authority will be required in order to
continue to conduct the business currently conducted by the Company subsequent
to the Closing, except where the termination of such Company Approvals or the
lack of such further Company Approvals would not have a Company Material Adverse
Effect. Except as disclosed in Section 4.18 of the Company Disclosure Schedule
or in any other schedule thereto, neither the Company nor any of its
Subsidiaries is subject to nor bound by any agreement, judgment, decree or order
which may have a Company Material Adverse Effect or Parent Adverse Impact.
Section 2.20. Taxes and Returns. (a) Except as disclosed in Section
4.19(a) of the Company Disclosure Schedule, each Taxpayer has timely filed, or
caused to be timely filed all Tax Returns required to be filed and all such
returns were complete and accurate in all material respects, and has paid,
collected or withheld, or caused to be paid, collected or withheld, all Taxes
required to be paid, collected or withheld, other than such Taxes for which
adequate reserves in the Company Financial Statements have been established or
which are being contested in good faith. Except as set forth in Section 4.19(a)
of the Company Disclosure Schedule, there are no claims or assessments pending
against any Taxpayer for any alleged deficiency in any Tax, and no Taxpayer has
been notified in writing of any proposed Tax liens, claims or assessments
against any Taxpayer (other than in each case, claims or assessments for which
adequate reserves in the Company Financial Statements have been established or
which are being contested in good faith). Except as set forth in Section 4.19(a)
of the Company Disclosure Schedule, no Taxpayer has any waivers or extensions of
any applicable statute of limitations to assess any Taxes in excess of $10,000.
Except as set forth in Section 4.19(a) of the Company Disclosure Schedule, there
are no outstanding requests by any Taxpayer for any extension of time within
which to file any material Tax Return or within which to pay any material
amounts of Taxes shown to be due on any Tax Return.
(b) To the best knowledge of Dachis, there are no liens for material
amounts of Taxes on the assets of the Company or any of its Subsidiaries except
for statutory liens for current Taxes not yet due and payable.
(c) Other than as set forth on Section 4.19(c) of the Company
Disclosure Schedule, there have been no audits and there are no ongoing audits
of any Tax Returns or reports of any Tax filed by Taxpayer. There is set forth
on Section 4.19(c) of the Company Disclosure Schedule a brief description of the
status of all prior audits, all ongoing audits and all notifications of audits
for any Taxpayer, and except as otherwise disclosed on such Section 4.19(c) of
the Company Disclosure Schedule all deficiencies resulting from such audits have
either been paid or adequately provided for in the Company Financial Statements.
(d) Section 4.19(d) of the Company Disclosure Schedule sets forth
all elections made by Taxpayer in the past five years that remain in effect for
any Taxpayer with respect to Taxes. Except as
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set forth on Section 4.19(d) of the Company Disclosure Schedule, there are no
ongoing audit adjustments of Taxes that will affect taxable periods subsequent
to the audit.
(e) Except as set forth in Section 4.19(e) of the Company Disclosure
Schedule, (i) there has not been made with respect to any Taxpayer, or any
property held by any Taxpayer, any consent under Section 341 of the Code (or any
corresponding provisions of state, local or foreign income Tax Law), (ii) no
property of any Taxpayer is "tax exempt use property" within the meaning of
Section 168(h) of the Code, and (iii) no Taxpayer is a party to any lease made
pursuant to former Section 168(f)(8) of the Code.
(f) Except as set forth in Section 4.19(f) of the Company Disclosure
Schedule, no Taxpayer is party to any Tax sharing agreement or any other
agreement with respect to Taxes.
(g) Except as disclosed in Section 4.19(g) of the Company Disclosure
Schedule, the charges, accruals and reserves on the books of the Company with
respect to Taxes due and payable after the Closing Date have been presented in
accordance with GAAP consistently applied.
(h) Except as set forth in Section 4.19(h) of the Company Disclosure
Schedule, no Taxpayer is a party to any joint venture, partnership, or other
arrangement or contract that could be treated as a partnership for federal
income tax purposes.
Section 2.21. ERISA Related Matters. (a) Section 4.20 of the Company
Disclosure Schedule sets forth a complete list of all Plans of the Company and
its Subsidiaries.
(b) The Company has delivered to Parent true, complete and correct
copies, together with all amendments thereto, of (i) each Plan (other than
certain union Plans listed in Section 4.20(b) of the Company Disclosure Schedule
which cannot be obtained upon reasonable effort or, in the case of any unwritten
Plans, descriptions thereof), (ii) the three most recent annual reports on Form
5500 filed with the IRS with respect to each Plan (if any such report was
required), (iii) the most recent summary plan description for each Plan for
which such a summary plan description is required, (iv) each trust agreement and
group annuity contract relating to any Plan; (v) reasonable evidence of adoption
for each Plan; and (vi) a complete copy of each IRS determination letter for
each Plan for which such a letter was obtained. Neither the Company nor any
corporation or trade or business (whether or not incorporated) which would be or
was treated as a member of Controlled Group, is now sponsoring or contributing
to or ever has sponsored or contributed to, prior to the Closing Date, any Plan
subject to Title IV of ERISA.
(c) Except as set forth in Section 4.20 of the Company Disclosure
Schedule, there exists no liability in connection with any Plan that has been
terminated and all procedures for termination of such plans have been properly
followed.
(d) Neither the Company nor any of its Subsidiaries or any of the
Plans, or any trust created thereunder, or any trustee or administrator thereof,
or any other "disqualified person" within the meaning of Section 4975(e)(2) of
the Code, has engaged in a transaction in connection with which the Company or
any such Subsidiaries or any trustee or administrator of the Plans or any such
trust, or any other such "disqualified person," could be subject to either a
liability or civil penalty assessed pursuant to Sections 409, 502(i) or 502(l)
of ERISA or a tax imposed pursuant to Section 4975 through 4980 of the Code.
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(e) Except as described in Section 4.20(c) of the Company Disclosure
Schedule, each of the Plans and any trust created thereunder has been operated
and administered in accordance with its terms and in compliance with Applicable
Laws, including but not limited to ERISA and the Code. There are no pending or
threatened claims, action, audits, or examinations with respect to any of the
Plans and any trust created thereunder by any Governmental Authority. There are
no pending or threatened claims with respect to any of the Plans and any trust
created thereunder, by any employee or former employee that participated in,
currently participates in, or is or was eligible to participate in, or
beneficiary covered under any such Plan, or otherwise involving any such Plan
(other than routine claims for benefits).
(f) All contributions required to be made to each Plan have been
timely made or accrued for on the Company Financial Statements. All account
allocations required to have been made under each Plan and Applicable Law have
been made.
(g) None of the Plans or any trust established thereunder has
incurred any "accumulated funding deficiency" (as defined in Section 302 of
ERISA and Section 412 of the Code), whether or not waived, as of the last day of
the most recent fiscal year of each of the Plans. No contribution failure has
occurred with respect to any Plan sufficient to give rise to a lien under
Section 302(f) of ERISA.
(h) With respect to any Plan that provides welfare benefits as
defined in Section 419(e) of the Code, except as disclosed in Section 4.20 of
the Company Disclosure Schedule, no such Plan is unfunded or funded through a
welfare benefits fund, as such term is defined in Section 419(e) of the Code.
(i) With respect to any "welfare plan" (as defined in Section 3(1)
of ERISA) which qualifies as a "group health plan" under Section 607(1) of ERISA
and Section 4980B of the Code and related regulations (relating to the benefit
continuation rights imposed by COBRA), the Company, and each of its
Subsidiaries, such group health plan and the administrator of such group health
plan have all complied, in all material respects, with all reporting,
disclosure, notice, election and other benefit requirements imposed under COBRA,
as and when applicable; and the Company has not incurred any direct or indirect
liability, nor is the Company subject to any loss, assessment, excise tax
penalty, loss of federal income tax deduction or other sanction arising on
account of or in respect of any direct or indirect failure to comply with such
COBRA requirements.
(j) With respect to each Plan that is funded wholly or partially
through an insurance policy, there will be no liability of the Company or its
Subsidiaries as of the Closing Date that has not been either paid or reasonably
estimated and reserved for in accordance with GAAP consistently applied.
(k) Except as otherwise set forth in Section 4.20(k) of the Company
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (A) result in any
payment (including, without limitation, severance, unemployment compensation,
golden parachute or otherwise) becoming due from the Company under any Plan, (B)
increase any benefits otherwise payable under any Plan, or (C) result in the
acceleration of the time of payment or vesting of any such benefits.
(l) The Company has not announced any plan or made any legally
binding commitment to create additional benefits which are intended to cover
employees or former employees of the Company or to make any amendment or
modifications to any Plan that covers or has covered or is available to the
Company employees or former employees other than as set forth in Section 4.20(l)
of the
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Company Disclosure Schedule or as required by Applicable Law. No payment under
any Plan will not be deductible by the Company by reason of failure to comply
with any provisions of the Code.
(m) The Company does not, nor has it ever contributed to or
participated in any Multiemployer Plan as defined in Section 3(37) of ERISA.
Section 2.22. Labor and Employment Matters. (a) (a) Except as set forth in
Section 4.21(a) of the Company Disclosure Schedule, the Company and its
Subsidiaries are and have been in compliance in all material respects with all
Applicable Laws relating to employment and employment practices, terms and
conditions of employment and wages and hours, and such laws respecting
employment discrimination, equal opportunity, affirmative action, worker's
compensation, occupational safety and health requirements and unemployment
insurance and related matters, and is not engaged in and has not engaged in any
unfair labor practice as defined under Applicable Laws.
(b) The Company and its Subsidiaries are not delinquent or in
arrears in payments to any of their respective employees or agents for any
wages, salaries, commission, overtime payments, bonuses or other direct
compensation for any services performed by them or benefits required to be
provided or amounts required to be reimbursed to such officers, directors,
employees or agents.
(c) Except as set forth in Schedule 4.21(c), if the employment of
any such officers, directors, employees or agents terminates for any reason,
neither Company, Parent, Acquisition Sub nor the Surviving Corporation will,
pursuant to any agreement in effect, or by reason of any act or omission by
Company or any subsidiary before the Effective Time, be liable to any of such
officers, directors, employees or agents for so-called "severance pay" or any
other payments, benefits or damages.
(d) Except as set forth in Section 4.21(d) of the Company Disclosure
Schedule, there is no material controversy pending or, to the knowledge of
Dachis, threatened between Company and its Subsidiaries, on the one hand and any
of its employees or consultants or former employees or consultants, on the other
hand.
(e) Company and its Subsidiaries (i) have never been and are not now
subject to a union organizing effort, (ii) are not subject to any collective
bargaining agreement with respect to any of their respective employees, and
(iii) are not subject to any other contract, written or oral, with any trade or
labor union, employees' association or similar organization. Company and its
Subsidiaries have good labor relations, and have no knowledge of any facts
indicating that the consummation of the transactions contemplated hereby will
have a Company Adverse Effect on such labor relations, and has no knowledge that
any of their key employees intends to leave their employ.
(f) Except as set forth in Schedule 4.21(f), Company and its
Subsidiaries have no employment contracts or consulting agreements currently in
effect that are not terminable at will (other than agreements with the sole
purpose of providing for the confidentiality of proprietary information or
assignment of inventions). To the knowledge of Dachis, no employee of Company
and its Subsidiaries is in violation of any term of any employment contract,
patent disclosure statement, noncompetition agreement, or any other contract or
agreement, or any restrictive covenant, relating to the right of any such
employee to be employed thereby, or to use proprietary information of others,
and the employment of such employees does not subject Company and its
Subsidiaries to any claim by any other Person.
(g) A list of all employees, officers and consultants of Company and
its Subsidiaries and their current compensation is set forth on Section 4.21(g)
of the Company Disclosure Schedule. Such
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list also describes any vested benefits, including, without limitation, vacation
or sick pay, which each Person on such list is entitled to receive from Company.
Section 2.23. Tax Free Structure. To the knowledge of Dachis (a) the
Merger, together with the other transactions contemplated under this Agreement,
shall qualify as a tax-free reorganization under the provisions of Section
368(a)(1)(B) of the Code, and (b) each of the Company and Dachis has not taken
any action, or failed to take any action that would make the Merger ineligible
as a tax-free reorganization.
Section 2.24. No Breach. The Company and its Subsidiaries are not in
breach of any agreement, covenant, representation, warranty, or other obligation
of Company made or incurred under or pursuant to the Merger Agreement or any
document delivered pursuant thereto.
Section 2.25. Un-bank Agreements. All agreements or arrangements between
the Company and Un-bank Company LLP are on terms no less advantageous to the
Company than could be secured from an unaffiliated third party in a transaction
negotiated at arm's-length. The Company has made no material payments to Un-bank
Company LLP or any of its principals or members in connection with or arising
from any business between the Company and Un-bank Company LLP.
Section 2.26. No Undisclosed Liabilities. There exists no basis for
assertion against the Company (or any Party whom the Company would be required
to indemnify) and the Company has no liability for any claim against the Company
or any of its Affiliates in connection with the business of the Company and any
of its Subsidiaries conducted prior to the Closing Date (including claims for
injury, property or economic damage or any product or strict liability claim
arising from the design, sale or distribution of or exposure to any product or
component thereof or the provision of any service by the Company or any
Subsidiary), other than claims specifically identified in the Merger Agreement.
Section 2.27. Absence of Other Claims. There exists no basis for assertion
against the Company (or any party whom the Company would be required to
indemnify) and the Company has no liability for any claim of the type described
in Sections 10.1(c), (d), (e), (f), (g), (i) or (k) of the Merger Agreement.
Section 2.28. No Violations of Environmental Law. The Company has not
violated and will have no liability under any Environmental Law (including
remediation expenses), including any such liability arising out of the conduct
of the Company or any of its Subsidiaries prior to the Closing Date which is
imposed upon Parent or the Surviving Corporation; whether or not disclosed or
required to be disclosed on the Company Disclosure Schedule. There will be no
presence of any real property owned, used or leased by the Company or in the
improvements thereon at or prior to the Closing Date, including without
limitation on the soil, sub-soil and groundwater, of "hazardous substances,"
"hazardous waste," "hazardous constituents" and "solid waste" (as those terms
are defined in any applicable U.S. federal, state or local or foreign statute,
regulation, ordinance or requirement of any kind) in any quantity.
Section 2.29. No Tax Liabilities. The Company does not have any
liabilities for Taxes of others, including, but not limited to the Company or
any Affiliate (for example, by reason of transferee liability or application of
Treas. Reg. Section 1.1502-6), damage or Indemnified Loss payable with respect
to Taxes claimed or assessed against the Company (a) for any taxable period
ending on or before the Effective Time or as a result of transactions
contemplated under the Merger Agreement (including any Section 338(h)(10)
election) or (b) for any taxable period as a result of a breach of any of the
representations or warranties contained in Section 4.19 of the Merger Agreement.
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Section 2.30. No Criminal Conduct. To the knowledge of Dachis, neither the
Company or any of its Subsidiaries have engaged in any criminal misconduct,
whether or not disclosed or required to be disclosed on the Company Disclosure
Schedule.
Section 2.31. No Violations of Other Agreement. There has been, and as of
the Effective Time, there will be no breach of any agreement, covenant,
representation, warranty or other obligation by Dachis under the Irrevocable
Proxy Agreement, the Affiliate Agreement, the Escrow Agreement or this
Agreement.
Section 2.32. No Vendor Liabilities. There are and as of the Effective
Time there will be no losses arising out of any joint liability due to
affiliations, partnerships, joint ventures, associations or other similar
business arrangements, whether by contract or operation of law in which Company
or Dachis participated prior to the Closing Date.
Section 2.33. Advisors and Investment Bankers. Except for the Company's
investment banking firm, Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc., whose advisory fee
arrangement has been disclosed to Parent prior to the date hereof, no broker,
advisor, finder or investment banker is entitled to any brokerage, advisor's,
finder's or other fee or commission in connection with the Merger or the
transactions contemplated by the Merger Agreement based upon arrangements made
by or on behalf of the Company.
Section 2.34. Complete Disclosure. Neither the Merger Agreement, the Stock
Option Agreement, the Irrevocable Proxy Agreement, the Escrow Agreement or this
Agreement, nor any of the certificates or documents required to be delivered by
Company and/or Dachis to Parent under the Merger Agreement as a condition to
closing, taken together, contains a statement of a material fact that is untrue
in any material respect, or omits to state any material fact necessary in order
to make the statements contained herein and therein, in light of the
circumstances under which such statements were made, not misleading in any
material respect.
Section 2.35. Complete Performance. To the best knowledge of Dachis, the
Company has performed and as of the Effective Time shall have performed, in all
material respects, all agreements and obligations of the Company contained in
the Merger Agreement and the Stock Option Agreement required to be performed by
them on or prior to the Effective Time.
ARTICLE III.
CERTAIN AGREEMENTS
Section 3.1. Agreement to Cooperate. (a) Subject to the terms and
conditions provided in this Agreement and Applicable Law, Dachis shall use all
reasonable efforts to take, or cause to be taken, all action to do, or cause to
be done, all things necessary, proper or advisable under Applicable Law to
consummate and make effective the transactions contemplated by the Merger
Agreement, including causing the Company to use its reasonable efforts to obtain
all necessary or appropriate waivers, consents and approvals and SEC "no-action"
letters (including, but not limited to, required approvals under applicable
Minnesota state laws and regulations), to effect all necessary registrations and
filings (including, but not limited to, filings under the HSR Act) and to lift
any injunction or other legal bar to the Merger (and, in such case, to proceed
with the Merger as expeditiously as possible).
(b) In connection with any filings under the HSR Act, (i) in the
event that Dachis determines that a filing by Dachis (as an acquiring person)
under the HSR Act is necessary, Dachis shall
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promptly make all such necessary filings at his sole expense, or (ii) in the
event that Dachis determines that such a filing by Dachis under the HSR Act is
not necessary, Dachis shall represent and warrant to Parent in writing in a form
reasonably satisfactory to Parent at the Closing Date that no filing is required
under Title II of the HSR Act with respect to Dachis' acquisition of shares of
Parent Common Stock in connection with the Merger and shall provide an opinion
from ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A., counsel to Dachis stating that Dachis was not and
is not required to file under Title II of the HSR Act with respect to the shares
of Parent Common Stock to be acquired by Dachis in the Merger.
Section 3.2. Confidentiality. Unless (a) otherwise expressly provided in
this Agreement, (b) required by Applicable Law or any listing agreement with, or
the rules and regulations of, any applicable securities exchange or the NASD,
(c) necessary to secure any required Consents as to which the other party has
been advised, or (d) consented to in writing by Parent, any information or
documents furnished in connection herewith shall be kept strictly confidential
by Dachis and his agents and assigns. Prior to any disclosure pursuant to the
preceding sentence, Dachis' shall consult with Parent regarding the nature and
extent of the disclosure. Nothing contained herein shall preclude disclosures to
the extent necessary to comply with accounting, SEC and other disclosure
obligations imposed by Applicable Law. In the event the Merger is not
consummated, Dachis shall return to Parent any documents furnished by the other
and all copies thereof any of them may have made (or destroy all such documents
and certify as to the complete destruction of such documents) and will hold in
absolute confidence any information obtained from Parent except to the extent
(i) Dachis is required to disclose such information by Applicable Law or such
disclosure is necessary in connection with the pursuit or defense of a claim,
(ii) such information was known by Dachis prior to such disclosure or was
thereafter developed or obtained by Dachis independent of such disclosure, or
(iii) such information is or becomes generally available to the public or is
otherwise no longer confidential. Prior to any disclosure of information
pursuant to the exception in clause (i) of the preceding sentence, Dachis shall
so notify Parent which provided the same in order that such party may seek a
protective order or other appropriate remedy should it choose to do so.
Section 3.3. Tax Treatment. Dachis will use his reasonable best efforts to
cause the Merger to qualify as a tax-free reorganization under the provisions of
Section 368(a)(1)(B) of the Code and Dachis shall not knowingly take any action
or knowingly fail to take such action that would jeopardize the treatment of the
Merger as a tax-free reorganization.
Section 3.4. Pooling. From and after the date hereof, Dachis shall not
knowingly take any action, or knowingly fail to take any action, that would
jeopardize the treatment of the Merger as a pooling of interests for accounting,
reporting and tax purposes.
Section 3.5. Affiliates Agreements. Dachis shall enter into, and Dachis
shall use his best efforts to ensure that each person who is or may be an
"affiliate" of Company within the meaning of Rule 145 promulgated under the
Securities Act including the Trust, shall enter into the Affiliate Agreements.
Section 3.6. Comply With Merger Agreement. Dachis shall use best efforts
to cause the Company and its Subsidiaries to comply with the terms and
conditions of the Merger Agreement and the Stock Option Agreement.
Section 3.7. Delivery of Certificate of Adequate Documentation. On or
before the date which is eleven (11) months from the date hereof, Dachis shall
cause Parent and Surviving Corporation to receive from Cambridge Technology or
another software consultant reasonably acceptable to Parent and Dachis
("Consultant") a certificate in form and substance reasonably satisfactory to
Parent, to the effect that documentation has been prepared and appropriate
procedures are in place to allow the Company's software
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and systems existing as of the Effective Time to be used and modified in the
ordinary course of business and without undue expense by any third party that is
reasonably knowledgeable regarding systems and software of a similar nature
("Certificate of Adequate Documentation"). Parent will promptly cause Consultant
to provide to the Company and Dachis a complete written list of the documents
and procedures which, if completed, will cause Consultant to issue such a
certificate.
Section 3.8. Continuation of Indemnities: No Circular Indemnities. The
right to indemnification, if any, from the Company of Dachis as an officer or
director of the Company pursuant to the Company Charter Documents or under any
Applicable Law, shall survive the Effective Date; provided, however, that
subject to Applicable Law, (a) no indemnification shall be available to Dachis
from the Company, Parent, the Surviving Corporation or Acquisition Sub for any
claim or matter for which any Indemnified Party would be entitled to receive
indemnification under Article V of this Agreement, and (b) no indemnification
shall be available to Dachis for any claim or matter if, with regard to the
subject matter thereof, the Company, the Parent, the Surviving Corporation or
the Acquisition Sub prevails upon a claim (at law or in equity) against that
officer or director. For purposes of the foregoing, the Company, the Parent, the
Surviving Corporation or the Acquisition Sub, as the case may be, shall be
considered to have "prevailed upon a claim" only if: (x) a final order resolving
such claim in favor of the Company, the Parent, the Surviving Corporation or the
Acquisition Sub, as the case may be, shall be issued by a court, administrative
body or other tribunal of competent jurisdiction, unless such final order is
subsequently overturned on appeal; or (y) Dachis enters into an agreement with
the Company, the Parent, the Surviving Corporation or the Acquisition Sub, as
the case may be, for the purpose of resolving such claim and therein agrees that
the Company, the Parent, the Surviving Corporation or the Acquisition Sub, as
the case may be, has prevailed upon such claim for purposes of this Section 3.8.
Notwithstanding the foregoing, Dachis may pursue such rights as he may have
under the insurance policy described in Section 7.12 of the Merger Agreement.
ARTICLE IV.
TERMINATION, AMENDMENT AND WAIVER
Section 4.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time whether before or after approval of the Merger by
the Shareholders of the Company or the Acquisition Sub:
(a) by mutual written consent of Parent and Dachis;
(b) by Parent upon termination of the Merger Agreement by Parent in
accordance with the terms of Article 9 of the Merger Agreement; and/or
(c) by Dachis upon termination of the Merger Agreement by the
Company in accordance with the terms of Article 9 of the Merger Agreement.
Section 4.2. Effect of Termination or Abandonment. Nothing contained in
this Agreement shall relieve any party from any liability for any inaccuracy,
misrepresentation or breach of this Agreement, the Affiliate Agreements, the
Merger Agreement, the Stock Option Agreement or the Irrevocable Proxy Agreement
prior to termination.
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ARTICLE V.
INDEMNIFICATION
Section 5.1. Indemnification. Dachis (the "Indemnifying Party") shall
indemnify, defend and hold harmless Parent, Acquisition Sub, Surviving
Corporation, any corporation affiliated with Parent, and any director, officer,
stockholder, employee or agent of any of them (each, an "Indemnified Party")
from and against all Indemnified Loss which may be sustained, suffered or
incurred by an Indemnified Party to the extent resulting or arising in any way
from (regardless of any investigation or inquiry by the Parent at any time,
provided, that an Indemnified Party shall not be entitled to indemnification
under this Agreement with respect to the breach of any representation or
warranty of Dachis, if the Parent had Actual Knowledge of the existence and
scope of such breach):
(a) The breach of any agreement, covenant, representation, warranty,
or other obligation of Dachis made or incurred under or pursuant to this
Agreement, the Irrevocable Proxy Agreement, the Escrow Agreement, the Affiliate
Agreement or any other agreement or document delivered pursuant thereto or in
connection herewith; and/or
(b) The liability of the Company, the Surviving Corporation or any
of its Subsidiaries for its own Taxes or its liability, if any, for Taxes of
others, but not limited to the Company or any Affiliate (for example, by reason
of transferee liability or application of Treas. Reg. Section 1.1502-6), damage
or Indemnified Losses payable with respect to Taxes claimed or assessed against
the Company (i) for any taxable period ending on or before the Effective Time or
as a result of the Merger and the other transactions contemplated therein
(including any Section 338(h)(10) election) or (ii) for any taxable period
resulting from a breach of any of the representations or warranties contained in
Section 4.19 of the Merger Agreement.
Section 5.2. Participation in Litigation. In the event any suit or other
proceeding is initiated against an Indemnified Party with respect to which
Parent alleges Dachis is or may be obligated to indemnify an Indemnified Party
hereunder, Dachis shall be entitled to participate in such suit or proceeding,
at its expense and by counsel of its choosing, provided that (a) such counsel is
reasonably satisfactory to Parent, and (b) Parent shall retain primary control
over such suit or proceeding. Such counsel shall be afforded access to all
information pertinent to the suit or proceeding in question. Parent shall not
settle or otherwise compromise any such suit or proceeding without the prior
written consent of Dachis, which consent shall not be unreasonably withheld or
delayed, if the effect of such settlement or compromise would be to impose
liability on Dachis hereunder.
Section 5.3. Claims Procedure. In the event from time to time Parent
believes that it or any other Indemnified Party has or will suffer any
Indemnified Loss for which Dachis is obligated to indemnify it hereunder
("Indemnified Event"), it shall promptly notify Dachis in writing of the matter,
specifying therein the reason why Parent believes that Dachis is or will be
obligated to indemnify, the amount, if liquidated, to be indemnified, and the
basis on which Parent has calculated such amount; if not yet liquidated, the
notice shall so state. The failure of the Indemnified Party to give such
notification shall not affect the indemnification provided in this Agreement.
The Indemnified Party need not seek, and has sole and unfettered discretion in
seeking, indemnification from any other Person (including, without limitation,
the Company or the Surviving Corporation) before or while seeking
indemnification from the Indemnifying Party in accordance with the terms of this
Agreement, and nothing herein shall create a duty to seek indemnification from
any other Person. An Indemnified Party may not seek indemnification under this
Article V for any amounts that the Indemnified Party has actually received under
any insurance policy,
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unless such recovery is sought pursuant to the subrogation rights of the
insurer. Any Indemnified Party may in its sole and exclusive discretion
determine whether or not it will seek insurance payments/coverage under such
policy. The Indemnified Party shall retain sole and unfettered discretion to
submit a claim seeking coverage under a policy of insurance and nothing herein
shall create a duty to submit any such claim.
Section 5.4. Payment of Indemnified Losses. (a) Dachis shall pay all
Indemnified Loss of any Indemnified Party within ten (10) days of receipt of
notice from that Indemnified Party of an Indemnified Loss in accordance with
Section 5.7, unless Dachis has given a notice of dispute of the Indemnified Loss
to the Indemnified Party and the Escrow Agent, in which case the claim for
Indemnified Loss shall be subject to resolution in accordance with the
provisions of Article VI of this Agreement. In the event any payment for an
Indemnified Loss is made after the tenth day, it shall bear interest from (and
including) the date due (but excluding the date of payment), at an interest rate
equal to five percent (5%) above the Prime Rate in effect on the date such
payment became due, but in no event to exceed the maximum interest rate
permitted under Applicable Laws; provided, however, that no such payment shall
be due so long as it is the subject of a bona fide, reasonable contest or so
long as the delay is solely due to the administrative timing requirements of
making a distribution of the Escrowed Consideration in accordance with the terms
of the Escrow Agreement.
(b) Dachis may at any time during the Escrow Term elect to sell any
of the Escrowed Shares and notify Escrow Agent of his election to sell such
shares in accordance with the terms of the Escrow Agreement, provided, that the
proceeds from the sale of any such shares (together with any interest accrued
thereon) shall remain in escrow as part of the Escrowed Consideration and
distributed in accordance with Section 5.7 and the Escrow Agreement.
Section 5.5. Limitations on Indemnity. (a) Notwithstanding anything to the
contrary herein (except as set forth in Section 5.5(c) and Section 5.6), Dachis
shall have no obligation to indemnify any Indemnified Party from, against or in
respect of any Indemnified Loss unless the aggregate of all Indemnified Losses
incurred by all Indemnified Parties exceeds $500,000, in which case Dachis shall
be required to indemnify such Indemnified Parties for the full amount of their
losses, without deduction.
(b) Notwithstanding anything to the contrary contained in this
Agreement (except as set forth in Section 5.5(c)), in the Merger Agreement or
Escrow Agreement, the obligations of Dachis to all Indemnified Parties for any
and all Indemnified Loss shall not in any event exceed, in the aggregate, Four
Million Five Hundred Thousand Dollars ($4,500,000) (the "Maximum Indemnification
Amount"), provided, however, that the Maximum Indemnification Amount shall not
apply to any claim of indemnification based upon (i) Section 5.6 of this
Agreement; (ii) a breach or inaccuracy of Section 2.20 (Taxes and Returns) of
this Agreement; (iii) a breach of Dachis' Employment Agreement; or (iv) a breach
of Dachis' Affiliate Agreement; and, provided further, that the Maximum
Indemnification Amount shall not apply to, and nothing in this Agreement shall
limit, the liability of Dachis to any Indemnified Party for any claim asserted
at law or in equity for fraud, intentional or willful misrepresentation or other
willful misconduct or any claim based upon any federal or state securities laws
or regulations.
(c) None of the limitations in this Section 5.5 shall apply to any
matter giving rise to a claim which, the delay or the discovery of which, is the
consequence of fraud or willful misconduct by Dachis.
Section 5.6. Special Indemnification. (a) In the event that a Certificate
of Adequate Documentation is not provided to Parent and Surviving Corporation in
accordance with Section 3.7 on or
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before the date which is eleven (11) months from the date hereof, Dachis shall
promptly, but in no event later than two Business Days after the date which is
eleven (11) months from the date hereof, pay to Surviving Corporation $500,000
("Software Fee") in accordance with Section 5.7, to defray any expenses that the
Surviving Corporation or the Parent may incur to produce the necessary
documentation and install appropriate procedures for the Surviving Corporation's
software and systems and certain losses incurred in connection with the absence
of appropriate documentation and procedures. Payment of such Software Fee shall
not operate to reduce the amount available to any Indemnified Party pursuant to
the indemnification provision of Sections 5.4 or 5.5.
Section 5.7. Manner of Payment. In order to preserve the "pooling of
interests" treatment for the Merger as anticipated by the Merger Agreement, all
Indemnified Losses (whether to be paid pursuant to agreement by Dachis and the
Parent or pursuant to an Award in accordance with Article VI) and the Software
Fee to be paid pursuant to Section 5.6 shall be payable in the following order
and manner and in the event that Escrowed Consideration is to be disbursed, the
parties hereto should instruct the Escrow Agent in accordance with this Section:
(a) first, if a sufficient number of Escrowed Shares are available
to satisfy the Indemnified Loss or the Software Fee, as applicable, through the
surrender to Parent for cancellation of that number of Certificates representing
Parent Common Stock equal to (x) the total amount of the Indemnified Loss or the
Software Fee divided by (y) the Viad Price, regardless of the fair market value
of the Parent Common Stock on the date of payment;
(b) second, if a sufficient number of Escrowed Shares are not
available, but sufficient Escrowed Consideration from the sale of such Escrowed
Shares is available to satisfy the Indemnified Loss or the Software Fee, as
applicable, through the distribution to Parent of such Escrowed Consideration in
lieu of such Escrowed Shares equal to the product of (A) the balance of the
total amount of the Indemnified Loss or the Software Fee, as applicable, not
paid with Escrowed Shares divided by the Viad Price, by (B) the price per share
at which the Parent Common Stock (net of commissions) was sold by Dachis or the
Escrow Agent, together with any interest accrued on the proceeds of any sale;
(c) third, if a sufficient number of Escrowed Shares or adequate
Escrowed Consideration to satisfy the Indemnified Loss or the Software Fee, as
applicable, is not available, and Dachis is the beneficial owner of any shares
of Parent Common Stock, with the surrender for cancellation of certificates
representing that number of shares of Parent Common Stock held by Dachis equal
to the balance of the total amount of the Indemnified Loss or the Software Fee,
as applicable, not paid with Escrowed Consideration, calculating the number of
shares in accordance with Section 5.7(a); and
(d) fourth, if adequate Escrowed Consideration to satisfy the
Indemnified Loss or the Software Fee, as applicable, is not available and Dachis
is not the beneficial owner of a sufficient number of shares of Parent Common
Stock to satisfy the Indemnified Loss or the Software Fee, as applicable,
through the payment of cash by wire transfer of immediately available funds to
an account designated by Parent of an amount equal to the balance of the
Indemnified Loss or the Software Fee, as applicable, not paid with Escrowed
Consideration or with shares of Parent Common Stock.
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ARTICLE VI.
DISPUTE RESOLUTION
Section 6.1. Representatives. (a) Subject to Section 6.1(b), if any
dispute arises under or relates to this Agreement, at the written request of
either party each party will appoint a designated representative (the
"Representative") to meet for the purpose of resolving the dispute. The
Representatives will meet at a mutually agreeable place within 10 days after
either party makes a written request to the other for such a meeting. The
Representatives will honor reasonable requests to exchange information related
to the dispute and will make an effort to negotiate a resolution to the dispute.
Negotiations shall continue until the dispute is resolved or until either party
informs the other in writing that negotiations will not result in a mutually
acceptable resolution and a mediator should be appointed.
(b) The parties hereto agree that the circumstances in which
disputes between them will not be subject to the provisions of this Article VI
is where (i) there is an alleged breach of any provision of this Agreement
relating to Intellectual Property, confidentiality or nondisclosure, or (ii) a
party makes a good faith determination that a breach of the terms of this
Agreement by the other party is such that irreparable harm to such party may
result from the breach such that equitable or other relief in the form of a
temporary restraining order or other immediate injunctive relief is the only
adequate remedy, or (iii) the determination of the satisfaction of the
conditions to the obligations of Parent and Acquisition Sub as set forth in
Section 8.3 of the Merger Agreement. The question of damages, if any, incurred
by such party as a result of such breach will be resolved pursuant to the
dispute resolution procedures set forth in this Article VI.
Section 6.2. Mediation. In the event that the dispute is not resolved
under Section 6.1, the dispute shall be submitted to nonbinding mediation (the
"Mediation"). The parties shall appoint a mutually agreeable neutral mediator
(the "Mediator"). If the parties are unable to agree on a Mediator within 10
days after the mediation is requested, either party may refer the matter to the
office of the AAA for the limited purpose of having AAA provide a panel of seven
names from which the parties will select a Mediator. If the parties are unable
to agree on a person on the panel, the parties shall alternately strike names
from the panel until one name is left on the panel. A coin toss will determine
which party is entitled to strike the first name. Except as otherwise provided
in this Agreement or as the parties may agree otherwise at the time of the
Mediation, the Mediation shall be conducted pursuant to the Commercial Mediation
Rules of the AAA, as amended from time to time. The Mediation shall be conducted
within 30 days after the appointment of the Mediator. The parties shall share
equally the cost of the Mediation, including, but not limited to, fees of the
Mediator, the cost, if any, of obtaining a location for the Mediation and any
filing fee. If during the Mediation the parties reach a settlement of all or any
of their disputes they shall reduce the settlement to the form of a written
settlement agreement which shall be binding upon the parties. The Mediation may
be terminated only after both parties have participated in the Mediation and are
unable to agree on a settlement. Mediation discussions or opinions of the
Mediator are confidential and may not be relied upon, referred to or introduced
as evidence in any subsequent arbitration or other proceeding.
Section 6.3. Arbitration. (a) In the event the dispute is not resolved
under Section 6.2, the parties agree that the dispute shall be resolved by a
private arbitration conducted by an arbitrator (the "Arbitrator"). Within 10
days after the termination of such negotiations pursuant to Section 6.2, the
parties shall agree upon one arbitrator, selected from a permanent panel of no
fewer than fifteen names agreed upon by the parties (the "Permanent Panel"). The
parties shall select the arbitrator from the Permanent Panel by alternately
striking names until only one name remains on the Permanent Panel. A
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toss of a coin will determine which party is to strike the first name. Neither
party may choose as its arbitrator the person who was its Representative under
Section 6.2 of this Agreement or any person who participated in the Mediation or
any person who is an officer, director or employee of either party or any
affiliated entity of either party, or a person who has a direct or indirect
personal or financial interest in the outcome of the arbitration.
(b) The Arbitrator shall set a hearing date for an arbitration (the
"Hearing") within 90 days from the date the Arbitrator is selected, unless
otherwise agreed by the parties, or unless otherwise ordered by the Arbitrator
at the request of either party.
(c) Unless otherwise agreed, within 15 days before the Hearing each
party shall submit to the Arbitrator with a copy to the other party a list of
all witnesses and exhibits which it intends to present at the Hearing.
(d) No later than 10 days before the scheduled Hearing, each party
shall provide to the Arbitrator a short (not to exceed five single-spaced pages
or such other page limit as the Arbitrator permits) a statement of its position
with regard to the dispute.
(e) At the Hearing, each party shall, unless it waives the
opportunity, make an oral opening statement, and an oral closing statement.
(f) The Arbitrator shall not be strictly bound by rules of procedure
or rules of evidence, but shall use the Federal Rules of Evidence as a guideline
in conducting the Hearing.
(g) When testimony is complete and each party has introduced its
exhibits, subject to the provisions of this Agreement, and each party has made a
closing statement pursuant the provisions of this Agreement or waived the
opportunity to do so, the Arbitrator shall declare the Hearing closed; provided,
however, the parties may submit post-hearing briefs pursuant to an agreed upon
schedule or one formulated by the Arbitrator.
(h) The Hearing shall be held at a location agreed upon by the
parties and convenient for the Arbitrator, or if the parties cannot agree upon a
location, at a location designated by the Arbitrator.
(i) The Hearing shall be conducted in private. Attendance at the
Hearing shall be limited to the following: (i) the Arbitrator; (ii)
representatives of each party; (iii) each party's attorneys and attorneys'
assistants or advisors, if any, including expert witnesses, if any; (iv) a court
reporter if requested by either party; and (v) any witnesses. The Arbitrator may
sequester witnesses upon the motion of a party.
(j) Within 30 days of the close of the Hearing or submission of the
post-hearing briefs, the Arbitrator shall issue a written opinion and award (the
"Award"), based on evidence, arguments and post-hearing briefs, if any. The
Award shall be a decision of the Arbitrator, shall resolve the parties' dispute,
and shall be final and binding on the parties. The fact that an opinion is
issued does not enlarge or restrict the authority of a court provided in the
Arbitration Act to review the arbitration proceedings or the Award. The
Arbitrator shall have the Award delivered to each Party.
(k) Except as otherwise provided in this Agreement, there shall be
no ex parte communication regarding the subject matter of the Hearing between a
party or its attorneys and the Arbitrator from the time the Arbitrator is
appointed until after the parties receive the Award.
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(l) The parties may agree to submit the dispute to the Arbitrator
without a Hearing, in which event the Arbitrator will render and deliver to the
parties a written opinion and Award within 30 days of being notified that the
parties waive the Hearing.
(m) Notwithstanding any other provision of this Agreement, the
Arbitrator shall have no power to delete from, add to, nor modify the terms of
this Agreement, and may not award any remedy which effectively conflicts
directly or indirectly with any provision of this Agreement.
(n) The arbitration shall be governed by the laws of the State of
Minnesota, including without limitation the provisions of the Minnesota Uniform
Arbitration Act, except as otherwise provided in this Agreement.
(o) The parties shall share equally the costs and expenses of the
arbitration, including, but not limited to, filing fees, fees of the arbitrators
and costs, if any, of obtaining a location for the arbitration. Each party shall
bear its own witness and expert fees, and copying and travel expenses. Each
party shall bear its own attorney fees relating to the dispute.
ARTICLE VII.
GENERAL PROVISIONS
Section 7.1. Definitions. Capitalized terms used in this Agreement without
definition herein shall have the meaning set forth in the Merger Agreement.
Section 7.2. Amendment and Modification. To the extent permitted by
Applicable Law, this Agreement may be amended, modified or supplemented only by
a written agreement between Dachis and Parent.
Section 7.3. Waiver. Any failure of Dachis or Parent to comply with any
obligation, covenant, agreement or condition herein may be waived by Parent, or
Dachis on the other hand, only by a written instrument signed by the party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. 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 this Section
7.3.
Section 7.4. Survival. (a) Subject to Section 7.4(b), the representations,
warranties, covenants and agreements of Dachis contained herein or in any
certificates or other documents delivered prior to or at the Closing shall
survive the Closing.
(b) Subject to Section 5.5(c), the representations and warranties of
Dachis set forth in this Agreement shall survive for a period of one year
following the Closing Date, except for the representations and warranties
relating to the non-filing of any Tax Returns or the non-payment of any Taxes to
any Governmental Authority, in which case, such representations and warranties
shall survive until the expiration of the applicable statute of limitations.
Section 7.5. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given when delivered in
person, by facsimile, receipt confirmed, or on the next business day when sent
by overnight courier or on the second succeeding business day when sent
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by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such other address for
a party as shall be specified by like notice).
(a) If to Acquisition Sub or Parent, to:
Viad Corp
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Travelers Express Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ South, Mail Stop 8060
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Dachis, to:
Game Financial Corporation
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇. ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Ravich, Meyer, Wilson, Kirkman, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, PA
4595 IDS Center
Minneapolis, Minn. 55402
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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and to:
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A.
1100 International Centre
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇. ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 7.6. Binding Effect; Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto prior to the Effective Time without the
prior written consent of the other party hereto, except that Parent may assign
to any other direct subsidiary of Parent, including Travelers Express Company,
Inc. and Surviving Corporation, any and all rights, interests and obligations of
Parent under this Agreement.
Section 7.7. Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs or expenses.
Section 7.8. Governing Law. This Agreement shall be deemed to be made in,
and in all respects shall be interpreted, construed and governed by and in
accordance with the internal laws of, the State of Minnesota.
Section 7.9. Interpretation. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. 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. Whenever the words "include," "includes," or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
Section 7.10. Entire Agreement. This Agreement and the documents or
instruments referred to herein including, but not limited to, the Merger
Agreement, the Employment Agreement between Dachis and the Company, the
Irrevocable Proxy Agreement, the Escrow Agreement and the Stock Option Agreement
and their respective Exhibits and Schedules, embody the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
thereof. There are no restrictions, promises, representations, warranties,
covenants, or undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
Section 7.11. Severability. In case any provision in this Agreement shall
be held invalid, illegal or unenforceable in a jurisdiction, such provision
shall be modified or deleted, as to the jurisdiction involved, only to the
extent necessary to render the same valid, legal and enforceable, and the
validity, legality and enforceability of the remaining provisions hereof shall
not in any way be affected or impaired thereby nor shall the validity, legality
or enforceability of such provision be affected thereby in any other
jurisdiction.
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Section 7.12. Specific Performance. The parties hereto 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. Accordingly, the parties further agree that each party shall
be entitled to an injunction or restraining order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other right or remedy to which such party may be entitled under
this Agreement, at law or in equity.
Section 7.13. Disclosure Schedules. Dachis and Parent acknowledge that the
Schedules to this Agreement and the Company Disclosure Schedule (a) relate to
certain matters concerning the disclosures required and transactions
contemplated by this Agreement, (b) are qualified in their entirety by reference
to specific provisions of this Agreement, (c) are not intended to constitute and
shall not be construed as indicating that such matter is required to be
disclosed, nor shall such disclosure be construed as an admission that such
information is material with respect to Company or Parent, as the case may be,
except to the extent required by this Agreement, and (d) disclosure of the
information contained in one section of the Company or Parent Disclosure
Schedule shall not be deemed as proper disclosure for all sections of Company or
Parent Disclosure Schedule, as the case may be, unless specific cross-reference
citations are made.
Section 7.14. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but
all of which shall constitute one and the same agreement.
Section 7.15. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and the Surviving
Corporation (which is hereby declared to be a third party beneficiary of this
Agreement) and nothing in this Agreement or on any instrument or document
executed by any party in connection with the transactions contemplated hereby,
express or implied, is intended to confer upon any other person other than the
Surviving Corporation any rights or remedies of any nature whatsoever under this
Agreement.
[Intentionally left blank.]
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IN WITNESS WHEREOF, Parent and Dachis have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.
VIAD CORP
A Delaware Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO of
Travelers Express Company, Inc.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
ACKNOWLEDGED AND ACCEPTED:
GAME FINANCIAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President
-------------------------------------
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EXHIBIT A
FORM OF ESCROW AGREEMENT
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EXHIBIT A
ESCROW AGREEMENT
dated as of _______________, 1997
by and among
VIAD CORP,
▇▇▇▇ ▇. ▇▇▇▇▇▇
and
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
as Escrow Agent
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TABLE OF CONTENTS
ARTICLE I.
ESCROW OF DACHIS SHARES
Section 1.1. Escrow of Dachis Shares......................................1
Section 1.2. Appointment of Escrow Agent..................................2
Section 1.3. Distribution of the Escrowed Consideration...................2
Section 1.4. Concerning the Escrow Agent..................................2
Section 1.5. Fees.........................................................3
Section 1.6. Resignation..................................................3
Section 1.7. Duties.......................................................3
Section 1.8. Indemnification..............................................3
Section 1.9. Cash Payments; Distribution of Escrowed Consideration........3
ARTICLE II.
DISBURSEMENTS AND DETERMINATIONS
Section 2.1. Claims Procedure.............................................4
Section 2.2. Escrow Termination Date......................................4
ARTICLE III.
GENERAL PROVISIONS
Section 3.1. Definitions..................................................5
Section 3.2. Amendment and Modification...................................5
Section 3.3. Waiver.......................................................5
Section 3.4. Survival.....................................................5
Section 3.5. Notices......................................................5
Section 3.6. Binding Effect; Assignment...................................7
Section 3.7. Expenses.....................................................7
Section 3.8. Governing Law................................................7
Section 3.9. Interpretation...............................................7
Section 3.10. Entire Agreement............................................8
Section 3.11. Severability................................................8
Section 3.12. Specific Performance........................................8
Section 3.13. Counterparts................................................8
Section 3.14. Parties in Interest.........................................8
Schedule 1 Additional Terms and Conditions of Escrow
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ESCROW AGREEMENT
This ESCROW AGREEMENT, dated as of _______________, 1997 (as amended
from time to time, "Agreement"), is by and among VIAD CORP, a Delaware
corporation ("Parent"), ▇▇▇▇ ▇. ▇▇▇▇▇▇, a significant shareholder of Game
Financial Corporation, a Minnesota corporation ("Company"), solely in his
capacity as a shareholder and not in his capacity as an officer or director of
the Company, (together with his successors and assigns, "Dachis"), and State
Street Bank and Trust Company of California, N.A., as Escrow Agent ("Escrow
Agent").
RECITALS:
WHEREAS, the respective Boards of Directors of the Parent and the
Company have approved the merger ("Merger") of the Company with and into Game
Acquisition Corp., a Minnesota corporation ("Acquisition Sub") pursuant to the
terms and conditions set forth in the Agreement and Plan of Merger dated as of
the date hereof, by and among Parent, Acquisition Sub and the Company ("Merger
Agreement");
WHEREAS, as a condition and inducement to Parent and Acquisition Sub
entering into the Merger Agreement, concurrently with the execution and delivery
of this Agreement, Dachis has agreed to enter into the Selling Shareholder's
Agreement which requires Dachis to deposit into escrow the Escrowed
Consideration (as defined below); and
WHEREAS, the parties wish to establish the terms and conditions upon
which the Escrow Agent will accept and hold the Escrowed Consideration and the
terms under which the Escrowed Consideration will be disbursed to the parties,
all as set forth below.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, Parent
and Dachis, intending to be legally bound hereby, agree as follows;
ARTICLE I.
ESCROW OF DACHIS SHARES
Section 1.1. Escrow of Dachis Shares.
(a) Pursuant to the terms of Section 3.6 of the Merger Agreement and
Section 1.1 of the Selling Shareholder's Agreement, and as security for the
representations, warranties, covenants, indemnification and other obligations of
Dachis under the Selling Shareholder's Agreement, at the Effective Time,
certificates registered in the name of Dachis (in each case accompanied by a
blank stock power properly executed by Dachis) that would have otherwise been
issued to Dachis in accordance with the procedures of Section 3.1 of the Merger
Agreement representing Parent Common Stock having an aggregate value (based upon
the Viad Price) equal to the sum of the Maximum Indemnification Amount and the
Software Fee, shall be deposited with and held in escrow by the Escrow Agent
("Escrowed Shares"). The Escrow
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Agent need not confirm the calculation of the number of Escrowed Shares
delivered to it and may assume without inquiry that whatever Escrowed Shares are
delivered to it are those required by the Merger Agreement and the Selling
Shareholder's Agreement. All Escrowed Shares, together with the proceeds from
the sale of any Escrowed Shares and any interest accrued from such proceeds
shall be payable into and held in escrow pursuant to the terms of this Agreement
("Escrowed Consideration"). As the registered owner of the Escrowed Shares,
Dachis may exercise any voting rights that he may have with respect to the
Escrowed Shares during the term of this Agreement ("Escrow Term") and all
dividends and other distributions (other than in connection with any stock
dividend, subdivision, reclassification, recapitalization, split, combination or
exchange of shares) payable with respect to the Escrowed Shares while such
Escrowed Shares are held in escrow during the Escrow Term shall be payable to
Dachis.
(b) Dachis may at any time during the Escrow Term elect to require
the Escrow Agent to sell any of the Escrowed Shares and Escrow Agent shall sell
such shares on behalf of Dachis in accordance with the prior written
instructions of Dachis, provided, that all proceeds from the sale of any such
shares (including any interest accrued on such proceeds) shall remain in escrow
as part of the Escrowed Consideration and distributed in accordance with Section
1.3.
(c) Unless otherwise specifically required herein, the Escrow Agent
shall invest any cash received from the proceeds of the sale of any Escrowed
Shares pursuant to Section 1.1(b) in a [reputable] money market mutual fund
registered under the Investment Company Act of 1940 [with a federally insured
commercial bank], the principal of which is invested solely in the United States
government and agency obligations. For tax reporting purposes, all income earned
on the Escrowed Consideration shall be allocable to Dachis. Any and all interest
earned by such investments shall be reinvested and distributed in accordance
with Section 1.3.
Section 1.2. Appointment of Escrow Agent. Dachis and the Parent hereby
appoints State Street Bank and Trust Company of California, N.A., as the Escrow
Agent ("Escrow Agent") and State Street Bank and Trust Company of California,
N.A. hereby agrees to perform the duties of the Escrow Agent under this
Agreement, on the terms and conditions set forth in this Agreement and in
Schedule 1 to be provided by Escrow Agent and attached hereto.
Section 1.3. Distribution of the Escrowed Consideration. The Escrow Agent
shall hold the Escrowed Consideration in its possession until authorized to make
distributions thereof in accordance with Article II of this Agreement. Parent
and Dachis agree between themselves that, from time to time, they shall jointly
execute and deliver to the Escrow Agent instructions in accordance with Section
5.7 of the Selling Shareholder's Agreement, which shall direct the Escrow Agent
regarding the distribution of the Escrowed Consideration. In the absence of
either such a jointly executed instruction by the Parent and Dachis or a final
resolution of any dispute with respect to the disposition of the Escrowed
Consideration described in a certificate delivered to the Escrow Agent as having
been made in accordance with Article VI of the Selling Shareholder's Agreement,
no Escrowed Consideration shall be distributed by the Escrow Agent. Prior to the
settlement or resolution of any dispute known to the Escrow Agent which may
arise between Parent and Dachis, the Escrow Agent is authorized and directed to
retain in this possession, without liability to anyone, that portion of the
Escrowed Consideration which are subject of such dispute.
Section 1.4. Concerning the Escrow Agent. The Escrow Agent shall be
entitled to compensation for its services hereunder as set forth in Section 1.5
below and shall also be reimbursed for all reasonable expenses, disbursements
and advances (including reasonable attorneys' fees and expenses) incurred or
made by it in performing its duties hereunder. Each of the Parent, on the one
hand, and Dachis, on the other hand, shall pay one-half of all such compensation
and reimbursements promptly following the request (which request shall not be
made more than once during any three-month period commencing with the
three-month period beginning on the date hereof) and submission by the Escrow
Agent to Parent and Dachis of a reasonably detailed itemized statements of the
amounts to be paid and/or reimbursed. To secure the payment of such fees and
expenses and of any indemnities payable pursuant to Section 1.8, each of the
Parent and Dachis, as to itself or himself, as the case may be, grants to the
Escrow Agent a first lien and security interest on that portion of the Escrowed
Consideration otherwise distributable to it or him, as appropriate.
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Section 1.5. Fees. Each of Parent, on the one hand, and Dachis on the
other hand, agree to pay fifty percent (50%) of the fees to the Escrow Agent set
forth in Schedule 1 attached hereto. All fees are to be paid in accordance with
Schedule 1 attached hereto.
Section 1.6. Resignation. The Escrow Agent, or any successor to it
hereafter appointed, may resign at any time by giving ninety (90) days' prior
written notice of such resignation to the other parties in accordance with this
Agreement specifying the date when such resignation shall take effect, and shall
thereupon be discharged from its duties hereunder upon the appointment and
acceptance of the successor Escrow Agent as hereinafter provided. Upon such
notice, a successor Escrow Agent shall be appointed with the consent of the
Parent and Dachis or, if such parties are unable to agree upon a successor
Escrow Agent within thirty (30) days after the notice of resignation, the Escrow
Agent shall be entitled, at its option, to appoint its own successor, which
shall be a national bank or trust company based in the United States, having (or
if the Escrow Agent is a subsidiary of a bank holding company, such holding
company shall have) assets of at least $500 million. Any successor Escrow Agent
appointed hereunder shall deliver to the parties a written instrument accepting
such appointment hereunder, and thereupon it shall succeed to all of the rights
and duties of the Escrow Agent hereunder and shall be entitled to receive in
escrow the Escrowed Consideration from the Escrow Agent. The Escrow Agent shall
continue to serve until its successor accepts the escrow and receives the
Escrowed Consideration. The Parent and Dachis shall have the right at any time
upon the unanimous consent to substitute a new Escrow Agent by giving notice
thereof to the Escrow Agent then acting.
Section 1.7. Duties. The Escrow Agent undertakes to perform only such
duties as are specifically set forth herein and may conclusively rely upon and
shall be protected in acting or refraining from acting on any written notice,
instrument or signature believed by it in good faith to be genuine and to have
been signed or presented by the proper party or parties duly authorized to do
so. The Escrow Agent shall have no responsibility for the contents of any
writing contemplated herein and may rely without liability upon the contents
thereof. The Escrow Agent shall not be liable for any action taken or omitted by
it in good faith and reasonably believed by it to be authorized hereby or within
the rights or powers conferred upon it hereunder, for any action taken or
omitted by it in good faith in accordance with advice of counsel, or any mistake
of fact or law or error of judgment or for anything which it may do or refrain
from doing in connection herewith, in each case, except for its own misconduct
or negligence.
Section 1.8. Indemnification. Parent shall indemnify the Escrow Agent and
hold the Escrow Agent harmless against any and all liabilities incurred by the
Escrow Agent as a result of the consequences of the actions of Parent. Dachis
shall indemnify the Escrow Agent and hold the Escrow Agent harmless against any
and all liabilities incurred by the Escrow Agent as a consequence of the actions
of Dachis or as a result of the action of the Company prior to the Closing.
Section 1.9. Cash Payments; Distribution of Escrowed Consideration. All
cash payments hereunder to Parent or to Dachis shall be made by wire transfer of
immediately available funds to such banks and for the credit to such accounts as
may be specified in writing to the Escrow Agent from time to time by the
parties. All distributions of Escrowed Consideration of Parent Common Stock
shall be delivered to the party entitled to receive the Escrowed Consideration
in person or by overnight express courier at the address of that party set forth
in Section 3.5 below, as it may be amended from time to time by written notice
to the parties to this Agreement. Prior to making any distribution of Escrowed
Consideration, the Escrow Agent may require the intended recipient to furnish an
IRS Form W-9 or such other document as the Escrow Agent may require to permit it
to report the distribution to the proper taxing authority or authorities.
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ARTICLE II.
DISBURSEMENTS AND DETERMINATIONS
Section 2.1. Claims Procedure. (a) In the event that, from time to time,
Parent or Acquisition Sub believes that it is an Indemnified Party and has or
will suffer any Indemnified Loss for which Dachis has or will have indemnity
obligations pursuant to Section V of the Selling Shareholder's Agreement
("Indemnified Event"), and party shall promptly notify Dachis and Escrow Agent
in writing of the Indemnified Event, specifying therein the reason why the
Indemnified Party believes that Dachis is or will be obligated to indemnify the
Indemnified Party, the amount, if liquidated, to be indemnified, and the basis
upon which the Indemnified Party has calculated such amount; and if not yet
liquidated, the notice shall so state. In the event that the Indemnified Party
and Dachis are able to agree on the number of Escrowed Shares to be surrendered
to Parent for cancellation and other Escrowed Consideration to be disbursed to
Parent pursuant to the terms of Article V of the Selling Shareholder's Agreement
as a result of the Indemnified Event, Parent and Dachis shall issue a joint
written instruction to the Escrow Agent regarding the distribution of such
Escrowed Consideration to the Parent.
(b) In the event the Parent delivers to the Escrow Agent a
certificate (a "Software Claim Notice") (A) stating on its face (i) that a
Certificate of Adequate Documentation has not been provided to the Parent and
the Surviving Corporation in accordance with Section 3.7 of the Selling
Shareholder's Agreement, and (ii) that a copy of such claim has been furnished
to the other party to this Agreement and (B) instructing the Escrow Agent to pay
Parent or Surviving Corporation the Software Fee of $500,000 payable in
accordance with Section 5.7 of the Selling Shareholder's Agreement, then the
Escrow Agent shall deliver the amount set forth in such Software Claim Notice to
the person named therein, at the address named therein; provided, however, that
the Escrow Agent shall not distribute such amount if the Escrow Agent, within
five Business Days following the Escrow Agent's receipt of a Software Claim
Notice, shall receive from Dachis a certificate to the effect that a Certificate
of Adequate Documentation has been properly and timely delivered to the Parent,
together with a copy of such Certificate of Adequate Documentation (which shall
be in form and substance satisfactory to Parent), in which case the Escrow Agent
shall continue to hold all Escrowed Consideration on hand pending a resolution
of the dispute pursuant to Section 2.1(c).
(c) In the event that the Indemnified Party and Dachis are unable to
agree, and accordingly do not instruct the Escrow Agent, regarding the number of
Escrowed Shares and other Escrowed Consideration to be surrendered by the Escrow
Agent to Parent, or the payment of the Software Fee, the matter shall be treated
by the parties (other than the Escrow Agent) as a matter subject to the dispute
resolution procedures of Article VI of the Selling Shareholder's Agreement and
the Escrow Agent shall continue to hold all Escrowed Shares and other Escrowed
Consideration subject to dispute pending its receipt of either a joint written
instruction from Parent and Dachis or a certificate stating on its face that it
is a final Award by the Arbitrator in accordance with Article VI of the Selling
Shareholder's Agreement.
Section 2.2. Escrow Termination Date.
(a) The escrow provided for herein shall terminate on the later of
(i) the date which is one (1) year from the Effective Time; or (ii) if Escrow
Agent has received a notice of an Indemnification Event or a Software Claim
Notice, the date on which all Escrowed Consideration has been distributed
pursuant to Section 2.2(b)(i). The Parent shall furnish to the Escrow Agent
(with a copy to Dachis) a certificate setting forth the Closing Date and the
Effective Time.
(b) On the date which is one (1) year from the Effective Time, the
Escrow Agent shall deliver to Dachis all certificates for Escrowed Shares of
Parent Common Stock and other Escrowed Consideration held in escrow on that date
(subject to any payments to be paid to the Escrow Agent for its fees) to Dachis
unless it shall have received from an Indemnified Party prior to that date a
notice of an Indemnified Event or a Software Claim Notice, in which case all
Escrowed Shares and other Escrowed Consideration then in escrow shall continue
to be held in escrow pending Escrow Agent's receipt of either a (i) joint
written instruction from Parent and Dachis regarding
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the distribution of the Escrowed Shares and other Escrowed Consideration; or
(ii) a certificate stating on its face that it is a final Award issued by an
Arbitrator pursuant to the provisions of Article VI of the Selling Shareholder's
Agreement regarding the distribution of the Escrowed Shares and other Escrowed
Consideration.
ARTICLE III.
GENERAL PROVISIONS
Section 3.1. Definitions. Definitions as between the parties other than
the Escrow Agent, they agree that capitalized terms used in this Agreement
without definition herein shall have the meaning set forth in the Merger
Agreement or if not defined therein, in the Selling Shareholder's Agreement.
Section 3.2. Amendment and Modification. To the extent permitted by
applicable law, this Agreement may be amended, modified or supplemented only by
a written agreement among Dachis, Parent and Escrow Agent.
Section 3.3. Waiver. Any failure of Dachis or Parent to comply with any
obligation, covenant, agreement or condition herein may be waived by Parent or
Dachis, respectively, only by a written instrument signed by the party granting
such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure. 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 this Section 3.3.
Section 3.4. Survival. The respective covenants and agreements of the
parties contained herein or in any certificates or other documents delivered
prior to or at the Closing shall survive the execution and delivery of the
Merger.
Section 3.5. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given when delivered in
person, by facsimile, receipt confirmed, or on the next business day when sent
by overnight courier or on the second succeeding business day when sent by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified by like notice).
(a) If to Acquisition Sub or Parent, to:
Viad Corp
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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with copies to:
Travelers Express Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ South, Mail Stop 8060
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Dachis, to:
Game Financial Corporation
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Ravich, Meyer, Wilson, Kirkman,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, PA
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A.
1100 International Centre
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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(c) If to the Escrow Agent, to:
State Street Bank and Trust Company of California, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ Mer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notwithstanding the foregoing, notices addressed to the Escrow Agent shall
be effective only upon receipt.
Section 3.6. Binding Effect; Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto prior to the Effective Time without the
prior written consent of the other party hereto, except that Parent may assign
to any other direct subsidiary of Parent, including Travelers Express Company,
Inc., and the Surviving Corporation any and all rights, interests and
obligations of Parent under this Agreement.
Section 3.7. Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs or expenses.
Section 3.8. Governing Law. This Agreement shall be deemed to be made in,
and in all respects shall be interpreted, construed and governed by and in
accordance with the internal laws of, the State of Minnesota.
Section 3.9. Interpretation. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. 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. Whenever the words "include," "includes," or
"including' are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
Section 3.10. Entire Agreement. This Agreement is between the parties
other than the Escrow Agent the documents or instruments referred to herein or
entered simultaneously herewith including, but not limited to, the Merger
Agreement, the Employment Agreements between Dachis and the Company, the Selling
Shareholder's Agreement, the Irrevocable Proxy Agreement and the Stock Option
Agreement and their respective Exhibits and Schedules embody the entire
agreement and understanding of the parties hereto other than the Escrow Agent in
respect of the subject matter thereof. The Escrow Agent's duties are governed
solely by this Agreement. There are no restrictions, promised, representations,
warranties, covenants, or undertakings, other than those expressly set forth or
referred to herein. This Agreement supersedes all prior agreements and the
understandings between the parties with respect to such subject matter.
Section 3.11. Severability. In case any provision in this Agreement shall
be held invalid, illegal or unenforceable in a jurisdiction, such provision
shall be modified or deleted, as to the jurisdiction involved, only to the
extent necessary to render the same valid, legal and enforceable, and the
validity, legality and enforceability of the remaining provisions hereof shall
not in any way be affected or impaired
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thereby nor shall the validity, legality or enforceability of such provision be
affected thereby in any other jurisdiction.
Section 3.12. Specific Performance. The parties hereto 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. Accordingly, the parties further agree that each party shall
be entitled to an injunction or restraining order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other right or remedy to which such party may be entitled under
this Agreement, at law or in equity.
Section 3.13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
Section 3.14. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, together with the
Surviving Corporation (which is hereby declared to be a third party beneficiary
hereof), and nothing in this Agreement or on any instrument or document executed
by any party in connection with the transactions contemplated hereby, express or
implied, is intended to confer upon any other person (other than the Surviving
Corporation) any rights or remedies of any nature whatsoever under this
Agreement.
IN WITNESS WHEREOF, Parent, Dachis and Escrow Agent have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
VIAD CORP
A Delaware Corporation
By:____________________________________
Name:
Title:
_______________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A.
By:____________________________________
Name:
Title:
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ACKNOWLEDGED AND ACCEPTED:
GAME FINANCIAL CORPORATION
By:_______________________________
Name:
Title:
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SCHEDULE 1
SCHEDULE OF ESCROW FEES
Acceptance Fee: Waived
Administration Fee: $2,500.00 per year, or [pro rata
portion for any part year]
Investment Transaction Charges: $ 65.00
Wire Transfer Fee: $ 20.00
Out-of-Pocket Expense: At Cost
Legal Fees (▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇): At Cost
11