EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
dated as of
April 5, 1999
by and between
BANCTEC, INC.
and
COLONIAL ACQUISITION CORP.
TABLE OF CONTENTS
_________________
ARTICLE I
THE MERGER
Section 1.01. The Merger.......................................................................... 2
Section 1.02. Closing............................................................................. 2
Section 1.03. Effective Time...................................................................... 2
Section 1.04. Effects of the Merger............................................................... 2
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
Section 2.01. Effect on Capital Stock............................................................. 3
(a) Cancellation of Certain Stock.......................................................... 3
(b) Retention or Conversion of Company Common Stock........................................ 3
(c) Cancellation and Retirement of Company Common Stock.................................... 3
(d) Dissenting Shares...................................................................... 4
(e) Acquisition Common Stock............................................................... 4
Section 2.02. Common Stock Elections.............................................................. 4
Section 2.03. Proration........................................................................... 6
Section 2.04. Exchange of Certificates............................................................ 7
(a) Exchange Agent......................................................................... 7
(b) Exchange Procedures.................................................................... 7
(c) No Further Ownership Rights in Company Common Stock.................................... 8
(d) Termination of Exchange Fund........................................................... 8
(e) No Liability........................................................................... 8
(f) Investment of Exchange Fund............................................................ 8
(g) Lost Certificates...................................................................... 8
(h) Withholding Rights..................................................................... 9
Section 2.05. Stock Plans......................................................................... 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of the Company....................................... 9
(a) Organization, Qualifications and Corporate Power; Materiality.......................... 9
(b) Organizational Documents; Capital Stock and Securities Owned........................... 10
(c) Authorization of Agreement, Non-Contravention, Etc..................................... 10
(d) Capital Structure...................................................................... 11
(e) Subsidiaries........................................................................... 12
(f) Voting of Shares....................................................................... 12
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(g) SEC Documents; Financial Statements............................................... 12
(h) Disclosure Documents; Information Supplied........................................ 13
(i) Absence of Certain Changes or Events.............................................. 13
(j) No Undisclosed Material Liabilities............................................... 15
(k) Compliance with Law; Litigation................................................... 15
(l) Taxes............................................................................. 16
(m) Pension and Benefit Plans; ERISA.................................................. 17
(n) Environmental Matters............................................................. 18
(o) Intellectual Property............................................................. 19
(p) Real Properties................................................................... 19
(q) Tangible Personal Property........................................................ 20
(r) Insurance......................................................................... 20
(s) Contracts......................................................................... 21
(t) Labor Matters..................................................................... 21
(u) Transactions with Affiliates...................................................... 21
(v) Year 2000......................................................................... 22
(w) Rights Agreement.................................................................. 22
(x) Opinion of Financial Advisor...................................................... 22
(y) Brokers........................................................................... 22
(z) Board Recommendation.............................................................. 23
(aa) Vote Required.................................................................... 23
(bb) State Takeover Statute Inapplicable.............................................. 23
(cc) Stock Plans...................................................................... 23
Section 3.02. Representations and Warranties of Acquisition................................... 23
(a) Organization, Qualifications and Corporate Power.................................. 23
(b) Capital Structure................................................................. 23
(c) Authorization of Agreement, Non-Contravention, Etc................................ 24
(d) Information Supplied.............................................................. 24
(e) Subsidiaries...................................................................... 25
(f) Acquisition Not an Interested Stockholder......................................... 25
(g) Interim Operations of Acquisition................................................. 25
(h) Brokers........................................................................... 25
(i) Financing......................................................................... 25
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.01. Covenants of the Company........................................................ 26
(a) Ordinary Course................................................................... 26
(b) Dividends; Change in Stock........................................................ 26
(c) Issuance of Securities............................................................ 26
(d) Governing Documents............................................................... 27
(e) No Acquisitions................................................................... 27
(f) No Dispositions................................................................... 27
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(g) Indebtedness........................................................................ 27
(h) Accounting Matters.................................................................. 27
(i) Advice of Changes; Filings.......................................................... 27
(j) Compensation; Benefit Plans......................................................... 28
(k) Discharges or Waiver of Claims...................................................... 28
(l) Leases and Lease Commitments........................................................ 28
(m) Liquidation Plan, Etc............................................................... 28
(n) Collective Bargaining Agreements.................................................... 28
(o) Transactions with Affiliates........................................................ 28
(p) Tax Matters......................................................................... 29
(q) Intellectual Property............................................................... 29
(r) Insurance........................................................................... 29
(s) Other Actions....................................................................... 29
Section 4.02. Covenants of Acquisition.......................................................... 29
(a) Other Actions....................................................................... 29
(b) Advice of Changes................................................................... 29
ARTICLE V
OTHER AGREEMENTS
Section 5.01. No Solicitation................................................................... 30
Section 5.02. Recapitalization.................................................................. 31
Section 5.03. Preparation of the Proxy Statement/Prospectus..................................... 31
Section 5.04. Company Stockholder Meeting....................................................... 32
Section 5.05. Access to Information............................................................. 32
Section 5.06. Reasonable Best Efforts........................................................... 32
Section 5.07. Indemnification and Insurance..................................................... 33
Section 5.08. Benefits Matters.................................................................. 35
Section 5.09. Resignations of Directors......................................................... 36
Section 5.10. Solvency at Closing............................................................... 36
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01. Conditions to Each Party's Obligation to Effect the Merger........................ 36
(a) Company Stockholder Approval........................................................ 36
(b) HSR Act and Other Approvals......................................................... 36
(c) Form S-4............................................................................ 36
(d) No Injunctions or Restraints; Illegality............................................ 36
Section 6.02. Conditions to the Obligations of Acquisition to Effect the Merger................. 36
(a) Representations and Warranties...................................................... 37
(b) Performance of Obligations of the Company........................................... 37
(c) Consents, Etc....................................................................... 37
(d) No Litigation....................................................................... 37
(e) Financing........................................................................... 37
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Section 6.03. Conditions to the Obligations of the Company to Effect the Merger.................. 38
(a) Representations and Warranties....................................................... 38
(b) Performance of Obligations of Acquisition............................................ 38
(c) Financing............................................................................ 38
(d) Solvency Letter...................................................................... 38
Section 6.04. Frustration of Closing Conditions.................................................. 38
ARTICLE VII
TERMINATION AND AMENDMENT
Section 7.01. Termination........................................................................ 38
Section 7.02. Effect of Termination.............................................................. 40
Section 7.03. Fees and Expenses.................................................................. 40
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. Nonsurvival of Representations and Warranties...................................... 40
Section 8.02. Confidentiality Agreement.......................................................... 41
Section 8.03. Publicity.......................................................................... 41
Section 8.04. Amendment.......................................................................... 41
Section 8.05. Extension; Waiver.................................................................. 41
Section 8.06. Notices............................................................................ 41
Section 8.07. Counterparts....................................................................... 42
Section 8.08. Entire Agreement; No Third-Party Beneficiaries; Rights of Ownership
........................................................................................ 42
Section 8.09. Governing Law...................................................................... 43
Section 8.10. Successors and Assigns............................................................. 43
Section 8.11. Jurisdiction....................................................................... 43
Section 8.12. Headings; Interpretation........................................................... 43
Section 8.13. Severability....................................................................... 43
Section 8.14. WAIVER OF JURY TRIAL............................................................... 43
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DISCLOSURE SCHEDULE
Section 2.05 Stock Plans
Section 3.01(b) Shares of Capital Stock and Securities Owned
Section 3.01(c) Approvals and Consents Required
Section 3.01(e) Subsidiaries
Section 3.01(f) Registration Rights, Stockholder and Voting Agreements
Section 3.01(i)(1) Certain Changes or Events
Section 3.01(i)(6) Loans and Investments
Section 3.01(i)(8) Transactions, Commitments, Contracts or Agreements
Section 3.01(i)(10) Compensation and Benefits
Section 3.01(i)(10) Employment and Compensation Arrangements
Section 3.01(j) Material Liabilities
Section 3.01(l) Taxes
Section 3.01(m)(1) Pension and Benefit Plans; ERISA
Section 3.01(m)(5) Increases in Compensation
Section 3.01(n) Environmental Matters
Section 3.01(o) Intellectual Property
Section 3.01(p)(i) Owned Properties
Section 3.01(p)(ii) Leased Properties
Section 3.01(r) Insurance
Section 3.01(s) Contracts
Section 3.01(t) Labor Matters
Section 3.01(u) Transactions with Affiliates
Section 4.01(e) Mergers, Acquisitions, Etc.
Section 4.01(m) Liquidation Plan, Etc.
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 5, 1999, by and
between BancTec, Inc., a Delaware corporation (the "COMPANY"), and Colonial
Acquisition Corp., a Delaware corporation ("ACQUISITION").
W I T N E S S E T H :
WHEREAS, the Boards of Directors of each of Acquisition and the
Company have unanimously deemed it advisable and in the best interests of their
respective stockholders for Acquisition to merge with and into the Company (the
"MERGER") pursuant to Section 251 of the Delaware General Corporation Law upon
the terms and subject to the conditions set forth herein;
WHEREAS, the Boards of Directors of each of Acquisition and the
Company have unanimously adopted resolutions approving and declaring advisable
this Agreement and the Merger;
WHEREAS, Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ VIII, L.P. ("WCAS VIII"), as
the holder of all the issued and outstanding common stock, par value $.01 per
share, of Acquisition ("ACQUISITION COMMON STOCK"), has approved and adopted
this Agreement, the Merger and the transactions contemplated hereby;
WHEREAS, the Merger requires the approval of this Agreement by the
affirmative vote of the holders of a majority of the outstanding shares of
common stock, $.01 par value per share, of the Company (the "COMPANY COMMON
STOCK");
WHEREAS, Acquisition and the Company desire that, upon the
consummation of the Merger, approximately 97% of the issued and outstanding
shares of capital stock of the Company be converted into cash in the amount of
$18.50 per share and the stockholders of the Company shall retain a number of
shares equal to approximately 6.5% of the total number of shares of outstanding
Common Stock of the surviving corporation immediately after the Effective Time;
WHEREAS, it is intended that the Merger be recorded as a
recapitalization for financial reporting purposes and each of the parties, after
discussion with their respective auditors, believe that the Merger is eligible
for such accounting treatment; and
WHEREAS, each of Acquisition and the Company desires to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe certain conditions for the Merger;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), Acquisition shall be merged with and into
the Company at the Effective Time (as defined in Section 1.03). Following the
Merger, the separate corporate existence of Acquisition shall cease and the
Company shall continue as the surviving corporation (the "SURVIVING
CORPORATION") and shall succeed to and assume all the rights and obligations of
Acquisition in accordance with the DGCL.
Section 1.02. Closing. Unless this Agreement shall have been
terminated and the transactions contemplated herein abandoned pursuant to
Section 7.01, and subject to the satisfaction or waiver of the conditions set
forth in Article VI, the closing of the Merger (the "CLOSING") will take place
at 10:00 a.m. on a date to be specified by the parties, which shall be no later
than the second business day following the satisfaction or waiver of all the
conditions set forth in Article VI (the "CLOSING DATE"), at the offices of
Reboul, MacMurray, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Kristol, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, unless another time, date or place is agreed to by the parties
hereto.
Section 1.03. Effective Time. Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be consummated by filing
a certificate of merger (the "CERTIFICATE OF MERGER") in accordance with the
relevant provisions of the DGCL with the Secretary of State of the State of
Delaware. The Merger shall become effective upon the completion of the filing
of the Certificate of Merger with the Secretary of State of the State of
Delaware or at such time thereafter as is provided in the Certificate of Merger
(the time the Merger becomes effective being hereinafter referred to as the
"EFFECTIVE TIME").
Section 1.04. Effects of the Merger. (a) The Merger shall have the
effects as set forth in the applicable provisions of the DGCL.
(b) The directors of Acquisition and the officers of the Company
immediately prior to the Effective Time shall, from and after the Effective
Time, be the initial directors and officers, respectively, of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified, or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Certificate of Incorporation and Bylaws.
(c) The Certificate of Incorporation of Acquisition, as amended
pursuant to the Certificate of Merger relating thereto, shall be the Certificate
of Incorporation of the Surviving
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Corporation following the Merger until thereafter changed or amended as provided
therein or by applicable law.
(d) The Bylaws of Acquisition as in effect at the Effective Time
shall be the Bylaws of the Surviving Corporation following the Merger until
thereafter changed or amended as provided therein or by the Certificate of
Incorporation of the Surviving Corporation or applicable law.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
Section 2.01. Effect on Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the Company,
Acquisition or the holders of Company Common Stock or of any shares of capital
stock of Acquisition:
(a) Cancellation of Certain Stock. Each share of Company Common
-----------------------------
Stock that is owned by Acquisition or by the Company or any of its subsidiaries
(other than those held in connection with the Stock Plans (as defined in Section
2.05)) shall automatically be canceled and retired and shall cease to exist and
no consideration shall be delivered in exchange therefor.
(b) Retention or Conversion of Company Common Stock. Except as
-----------------------------------------------
otherwise provided in Section 2.01(a) or as provided in 2.01(d) with respect to
shares of Company Common Stock as to which appraisal rights have been exercised,
each share of Company Common Stock issued and outstanding immediately prior to
the Effective Time shall be converted into the following:
(i) in the case of shares of Company Common Stock with
respect to which an election to retain has effectively been made and not
revoked or forfeited pursuant to Section 2.02(c) ("ELECTING SHARES"), and
subject to Section 2.03 below, the right to retain one fully paid and
nonassessable share of Company Common Stock (a "NON-CASH ELECTION SHARE");
and
(ii) in the case of shares of Company Common Stock other than
Electing Shares, and subject to Section 2.03 below, the right to receive
from the Surviving Corporation following the Merger an amount in cash equal
to $18.50 (the "CASH MERGER CONSIDERATION" and, together with the Non-Cash
Election Shares, the "MERGER CONSIDERATION").
(c) Cancellation and Retirement of Company Common Stock. All shares
---------------------------------------------------
of Company Common Stock issued and outstanding immediately prior to the
Effective Time (other than shares referred to in Section 2.01(a), which shall be
canceled and retired in accordance
3
therewith, and Non-Cash Election Share) shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to have any rights with
respect thereto except the right to receive the Merger Consideration, without
interest thereon.
(d) Dissenting Shares. Notwithstanding anything in this Agreement to
-----------------
the contrary, shares of Company Common Stock that are outstanding immediately
prior to the Effective Time and held by a holder who has not voted in favor of
the Merger or consented thereto in writing and who has validly demanded
appraisal for such shares in accordance with Section 262 of the DGCL shall not
be converted into a right to receive the Cash Merger Consideration, unless such
holder fails to perfect or withdraws or otherwise loses its right to appraisal.
If after the Effective Time, any such holder fails to perfect or withdraws or
loses its right to appraisal, such Dissenting Shares shall be treated as if they
had been converted as of the Effective Time into the right to receive the Cash
Merger Consideration to which such holder is entitled, without interest thereon.
The Company shall give prompt notice to Acquisition of any demands, attempted
withdrawals of such demands and any other instruments served pursuant to
applicable law received by the Company for appraisal of shares of Company Common
Stock, and, prior to the Effective Time, Acquisition shall have the right to
direct all negotiations and proceedings with respect to such demands. The
Company shall not, except with the prior written consent of Acquisition, make
any payment with respect to, or settle, offer to settle or approve any
withdrawal of any such demands.
(e) Acquisition Common Stock. The shares of Acquisition Common Stock
------------------------
issued and outstanding immediately prior to the Effective Time shall be
converted into a total number of shares of Company Common Stock equal to
8,500,919 shares of common stock of the Surviving Corporation as of the
Effective Time.
Section 2.02. Common Stock Elections. (a) Each person (as defined
in Section 8.12) who, on the Election Date (as hereinafter defined), is a record
holder of Company Common Stock will be entitled, with respect to all or any
portion of such shares, to make an unconditional election (a "NON-CASH
ELECTION") on or prior to the Election Date to retain Non-Cash Election Shares,
on the basis hereinafter set forth.
(b) The Company shall prepare a form of election, which form shall be
subject to the reasonable approval of Acquisition (as the same may be amended or
supplemented, the "FORM OF ELECTION"), to be mailed by the Company with the
Proxy Statement/Prospectus (as hereinafter defined) to the record holders of
Company Common Stock as of the record date for the Company Stockholder Meeting
(as hereinafter defined) and otherwise distributed in accordance with the
requirements of the Securities and Exchange Commission ("SEC"), which Form of
Election shall be used by each record holder of Company Common Stock who wishes
to elect, subject to the provisions of Section 2.03, to retain Non-Cash Election
Shares for any or all shares of Company Common Stock as to which it is the
record holder. The Company will use its reasonable best efforts to make the Form
of Election and the Proxy Statement/Prospectus available to all persons who
become holders of Company Common Stock during the period between the record date
and
4
the Election Date. Any such holder's election to retain Non-Cash Election
Shares shall have been properly made only if the Exchange Agent (as hereinafter
defined) shall have received such election at its designated office, by 5:00
p.m., local time for the Exchange Agent, on the second business day prior to the
date of the Company Stockholder Meeting (the "ELECTION DATE"), pursuant to (i) a
Form of Election properly completed and signed and accompanied by certificates
representing the shares of Company Common Stock to which such Form of Election
relates, duly endorsed in blank or otherwise in form acceptable for transfer on
the books of the Company (or by an appropriate guarantee of delivery of such
certificates as set forth in such Form of Election from a firm that is an
"eligible guarantor institution" as defined in Rule 17Ad-15 under the Exchange
Act (as hereinafter defined) (an "ELIGIBLE INSTITUTION"), provided such
certificates are in fact delivered to the Exchange Agent within three business
days after the date of execution of such guarantee of delivery) or (ii) such
other procedures as may be set forth in the Proxy Statement/Prospectus.
(c) Any Form of Election may be revoked by the holder submitting it
to the Exchange Agent only by notice received by the Exchange Agent prior to
5:00 p.m., local time for the Exchange Agent, on the Election Date in accordance
with the procedures set forth in the Proxy Statement/Prospectus (unless
Acquisition and the Company determine not less than two business days prior to
the Election Date that the Closing Date is not likely to occur within five
business days following the Election Date, in which case any Form of Election
will remain revocable until a subsequent date which shall be a date prior to the
Closing Date determined by Acquisition and the Company). In addition, all Forms
of Election shall automatically be revoked if the Exchange Agent is notified in
writing by Acquisition and the Company that this Agreement has been terminated.
If a Form of Election is properly revoked, the certificate or certificates (or
guarantees of delivery, as appropriate) for the shares of Company Common Stock
to which such Form of Election relates shall be promptly returned by the
Exchange Agent to the stockholder submitting the same, or pursuant to such other
procedures as are set forth in the Proxy Statement/Prospectus.
(d) The determination of the Exchange Agent (or the Company, if the
Exchange Agent declines to make such determination) shall be binding as to
whether elections to retain Non-Cash Election Shares have been properly made or
revoked pursuant to this Section 2.02 with respect to shares of Company Common
Stock and as to when elections and revocations were received by it. If the
Exchange Agent reasonably determines in good faith that any election to retain
Non-Cash Election Shares was not properly made with respect to shares of Company
Common Stock, such shares shall be treated by the Exchange Agent as shares that
were not Electing Shares at the Effective Time, and such shares shall be
exchanged in the Merger for cash pursuant to Section 2.01(b)(ii), subject to
proration as provided in Section 2.03. The Exchange Agent (or the Company if
the Exchange Agent declines to make such determination) shall also make all
computations as to the allocation and the proration contemplated by Section
2.03, and any such computations shall be conclusive and binding on the holders
of Company Common Stock. The Exchange Agent may, with the mutual written
consent of the Company and
5
Acquisition, establish procedures as are consistent with this Section 2.02 for
the implementation of the elections provided for herein as shall be necessary or
desirable fully to effect such elections.
Section 2.03. Proration. (a) Notwithstanding anything in this
Agreement to the contrary, the aggregate number of shares of Company Common
Stock to be retained at the Effective Time pursuant to Section 2.01(b) shall be
equal to 590,973 shares of outstanding Common Stock of the Surviving Corporation
immediately after the Effective Time (the "NON-CASH ELECTION NUMBER").
(b) If the number of Electing Shares exceeds the Non-Cash Election
Number, then each Electing Share shall be converted into the right to retain
Non-Cash Election Shares or receive cash in accordance with the terms of 2.01 in
the following manner:
(i) a proration factor (the "EXCESS PRORATION FACTOR")
shall be determined by dividing the Non-Cash Election Number by the total
number of Electing Shares;
(ii) the number of Electing Shares covered by each Non-Cash
Election shall be determined by multiplying the Excess Proration Factor by
the total number of Electing Shares covered by such Non-Cash Election
(subject to rounding, to avoid the issuance of fractional shares); and
(iii) all Electing Shares, other than those shares converted
into the right to retain Non-Cash Election Shares in accordance with
Section 2.03(b)(ii), shall be converted into cash in accordance with the
terms of Section 2.01(b)(ii), as if such shares were not Electing Shares.
(c) If the number of Electing Shares is less than the Non-Cash
Election Number, then:
(i) all Electing Shares shall be converted into the right
to retain shares of Company Common Stock in accordance with the terms of
Section 2.01(b)(i);
(ii) additional shares of Company Common Stock (other than
Electing Shares and Dissenting Shares) shall be converted into the right to
retain Non-Cash Election Shares in accordance with the terms of Section
2.01(b) in the following manner:
(A) a proration factor (the "SHORTFALL PRORATION
FACTOR") shall be determined by dividing (x) the difference between the No-
Cash Election Number and the number of Electing Shares, by (y) the total
number of shares of Company Common Stock outstanding at the Effective Time
(other than Electing Shares and Dissenting Shares); and
(B) the number of shares of Company Common Stock
(other than Electing Shares and Dissenting Shares) held by each stockholder
that shall be converted
6
into the right to retain Non-Cash Election Shares shall be determined by
multiplying the Shortfall Proration Factor by the total number of shares of
Company Common Stock (other than Electing Shares and Dissenting Shares)
held by such holder (subject to rounding to avoid the issuance of
fractional shares); and
(iii) shares of Company Common Stock subject to clause (ii) of
this Section 2.03(c) shall be converted into the right to retain Non-Cash
Election Shares in accordance with Section 2.01(b)(i), as if such shares
were Electing Shares.
Section 2.04. Exchange of Certificates. (a) Exchange Agent. Prior
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to the Effective Time, Acquisition shall appoint a bank or trust company that is
reasonably satisfactory to the Company to act as exchange and paying agent (the
"EXCHANGE AGENT") for the payment of cash and issuance of shares, if any,
constituting the Merger Consideration. As of the Effective Time, the Surviving
Corporation shall deposit with the Exchange Agent, for the benefit of the
holders of shares of Company Common Stock, cash in an amount sufficient to pay
the aggregate Cash Merger Consideration required to be paid pursuant to Section
2.01 in exchange for outstanding shares of Company Common Stock (such cash being
hereinafter referred to as the "EXCHANGE FUND").
(b) Exchange Procedures. As soon as reasonably practicable (and in
-------------------
any event no later than ten days) after the Effective Time, the Surviving
Corporation shall cause the Exchange Agent to mail or deliver to each person who
was, immediately prior to the Effective Time, a holder of record of Company
Common Stock that was converted into the right to receive the Merger
Consideration pursuant to Section 2.01(b), (i) a letter of transmittal in
customary form and containing customary provisions and (ii) instructions for use
in effecting the surrender of certificates representing such person's shares of
Company Common Stock in exchange for the Merger Consideration. Promptly after
the Effective Time, each holder of record of an outstanding certificate or
certificates which prior thereto represented shares of Company Common Stock (the
"CERTIFICATES") shall, upon surrender to the Exchange Agent of such Certificates
or, if such shares are held in book-entry or other uncertificated form, upon the
entry through a book-entry transfer agent of the surrender of such shares of
Company Common Stock on a book-entry account statement (any references herein to
Certificates shall be deemed to include references to book-entry account
statements relating to the ownership of Company Common Stock), and acceptance
thereof by the Exchange Agent, be entitled to receive in exchange therefor a
certificate representing the number of full shares of common stock of the
Surviving Corporation, if any, to be retained by the holder thereof as Non-Cash
Election Shares pursuant to this Agreement and an amount of cash equal to the
Cash Merger Consideration per share multiplied by the number of shares
represented by such Certificates which have not otherwise been retained as Non-
Cash Election Shares, and the Certificates so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of Company Common Stock that
is not registered in the transfer records of the Company, the issuance of any
Non-Cash Election Shares and the payment of the Cash Merger Consideration may be
made to a person other than the person in whose name the Certificate so
surrendered is registered if, and only if, such
7
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such issuance or payment shall pay any
transfer or other taxes required by reason of the issuance of any Non-Cash
Election Shares and the payment of the Cash Merger Consideration to a person
other than the registered holder of such Certificate or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 2.02, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the Merger Consideration which the
holder thereof has the right to receive in respect of such Certificate pursuant
to this Article II. No interest shall be paid or will accrue on any cash payable
as Merger Consideration pursuant to this Article II.
(c) No Further Ownership Rights in Company Common Stock Exchanged For
-----------------------------------------------------------------
Cash. All cash paid upon the surrender therefor of Certificates in accordance
----
with the terms of this Article II shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Company Common Stock
exchanged for cash theretofore represented by such Certificates, and there shall
be no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Company Common Stock which were
outstanding immediately prior to the Effective Time and which have been
converted, in whole or in part, pursuant to this Agreement into the right to
receive the Cash Merger Consideration, and if after the Effective Time such
Certificates are presented to the Company for transfer, they shall be canceled
against delivery of the Cash Merger Consideration and, if appropriate,
certificates for Non-Cash Election Shares.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund
----------------------------
that remains undistributed to the holders of the Certificates for more than six
months after the Effective Time shall be delivered to the Surviving Corporation,
upon demand, and any holders of the Certificates who have not theretofore
complied with this Article II shall thereafter look only to the Surviving
Corporation (as general creditors thereof) for payment of their claim for Merger
Consideration.
(e) No Liability. None of the Company, Acquisition, the Surviving
------------
Corporation or the Exchange Agent shall be liable to any person in respect of
any cash or other property from the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If any
Certificate shall not have been surrendered prior to two years after the
Effective Time (or immediately prior to such earlier date on which any Merger
Consideration would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 3.01(c)), any such Merger
Consideration shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
(f) Investment of Exchange Fund. The Exchange Agent shall invest any
---------------------------
cash included in the Exchange Fund as directed by the Surviving Corporation.
Any interest and other income resulting from investments shall be paid to the
Surviving Corporation.
8
(g) Lost Certificates. If any Certificate shall have been lost,
-----------------
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable and customary amount as the Surviving Corporation may direct as
indemnity against any claim that may be made against it with respect to such
Certificate, the Exchange Agent shall deliver in exchange for such lost, stolen
or destroyed Certificate the applicable Merger Consideration with respect
thereto pursuant to this Agreement.
(h) Withholding Rights. The Surviving Corporation shall be entitled
------------------
to deduct and withhold from consideration otherwise payable to any holder of
Company Common Stock or Company Stock Options (as defined in Section 2.05)
pursuant to this Agreement such amounts as may be required to be deducted and
withheld with respect to the making of such payment under the Internal Revenue
Code of 1986, as amended (the "CODE"), or under any provision of state, local or
foreign tax law.
Section 2.05. Stock Plans. Each of the Company's stock option or
stock purchase plans (the "COMPANY STOCK PLANS") and options to acquire shares
of Company Common Stock or shares of restricted stock of the Company outstanding
on the date hereof (the "COMPANY STOCK OPTIONS"), including without limitation
information concerning the date of vesting of such options or the lapse of
restrictions on such restricted stock and the acceleration of such vesting or
restrictions by virtue of the Merger or the transactions contemplated hereby, is
as previously delivered to Acquisition and listed in Section 2.05 of the
Disclosure Schedule. The Company shall take all actions necessary to provide
that, as of the Effective Time, (i) each Company Stock Option so surrendered for
cash shall be canceled, and (ii) in consideration for such cancellation, the
Company shall pay to each such holder of Company Stock Options an amount in cash
equal to the product of (1) the excess, if any, of the Cash Merger Consideration
over the per-share exercise price thereof and (2) the number of shares of
Company Common Stock subject thereto immediately prior to the Effective Time
(the "EXCESS OPTION PAYMENT AMOUNT").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of the Company. The
Company represents and warrants as of the date hereof (or such other date as
shall be expressly specified) to Acquisition as follows:
(a) Organization, Qualifications and Corporate Power; Materiality.
-------------------------------------------------------------
The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and is duly licensed or
qualified to do business as a foreign corporation and is in good standing in
each other jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such licensing or qualification necessary and
where the failure to so qualify would in the aggregate have a material adverse
effect (as defined) on the Company. As
9
used in this Agreement, "MATERIAL ADVERSE EFFECT" means, when used in connection
with the Company, any change, effect, event, occurrence or development that is,
or is reasonably likely to be, materially adverse to the business, results of
operations or condition (financial or other) of the Company and its Subsidiaries
(as defined in Section 3.01(e)(i)), taken as a whole; "material adverse effect"
means, when used in connection with Acquisition, any change, effect, event,
occurrence or development that is materially adverse to Acquisition's ability to
consummate the transactions contemplated hereby.
(b) Organizational Documents; Capital Stock and Securities Owned.
------------------------------------------------------------
The Company has made available to Acquisition complete and correct copies of its
charter and bylaws and the charter and bylaws (or other organizational
documents) of each of its Subsidiaries, in each case as amended to the date of
this Agreement. The Company has the corporate power and authority to own and
hold its properties and to carry on its business as currently conducted. Except
as set forth in Section 3.01(b) of the Disclosure Schedule, the Company does not
own of record or beneficially, directly or indirectly, (i) any shares of
outstanding capital stock or securities convertible into capital stock of any
other corporation or (ii) any participating interest in any partnership, joint
venture or other non-corporate business enterprises.
(c) Authorization of Agreement, Non-Contravention, Etc. The Company
--------------------------------------------------
has all requisite corporate power and authority to enter into this Agreement
and, subject to obtaining the affirmative vote of the holders of a majority of
the outstanding shares of Company Common Stock (the "COMPANY STOCKHOLDER
APPROVAL") with respect to the Merger, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, subject to
obtaining the Company Stockholder Approval with respect to the Merger. This
Agreement has been duly executed and delivered by the Company and, assuming the
due authorization, execution and delivery by Acquisition, constitutes a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, moratorium, reorganization and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby will not, conflict
with, or result in any breach or violation of, or result in the termination of,
or accelerate the performance required by, or give right to a right of
termination, cancellation or acceleration of any obligation under, or the
creation of a Lien (as defined in 3.01(d)) pursuant to (i) any provision of the
charter (or similar organizational documents) or bylaws of the Company or any
Subsidiary of the Company or (ii) subject to obtaining or making the consents,
approvals, orders, authorizations, registrations, declarations and filings
referred to in the following sentence, any loan or credit agreement, note,
mortgage, indenture, lease, Company Benefit Plan (as defined in Section 3.01(m))
or other agreement, obligation, instrument, permit, concession, franchise,
license, or any judgment, order, decree, statute, law, ordinance, rule or
regulation (collectively "LAWS") applicable to the Company or any Subsidiary or
their respective properties or assets, in any case under this clause
10
(ii) which would, individually or in the aggregate, have a material adverse
effect on the Company except as set forth in Section 3.01(c) of the Disclosure
Schedule. Except as set forth in Section 3.01(c) of the Disclosure Schedule, no
consent, approval, order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission or other
governmental authority or instrumentality (a "GOVERNMENTAL ENTITY") is required
by or with respect to the Company or any Subsidiary in connection with the
execution and delivery of this Agreement by the Company or the consummation by
the Company of the transactions contemplated hereby, the failure of which to be
obtained or made would, individually or in the aggregate, have a material
adverse effect on the Company or would prevent or materially delay the
consummation of the transactions contemplated hereby, except for (A) the filing
with the Securities and Exchange Commission of (i) a Registration Statement on
Form S-4 covering the Electing Shares (the "FORM S-4") and the Proxy
Statement/Prospectus relating to the consideration of the Company Stockholder
Approval at a meeting (the "COMPANY STOCKHOLDER MEETING") of the stockholders of
the Company duly called and convened to consider the approval of this Agreement
and (ii) such reports under the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder (the "EXCHANGE ACT"), as may be
required in connection with this Agreement, the Merger and the other
transactions contemplated hereby, (B) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware and appropriate documents
with the relevant authorities of other states in which the Company is qualified
to do business, (C) filings required pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder (the "HSR ACT"), (D) filings necessary to satisfy the applicable
requirements of state securities or "blue sky" laws and (E) those required under
the rules and regulations of the New York Stock Exchange, Inc. ("NYSE")
(collectively, the "REQUIRED FILINGS").
(d) Capital Structure. The authorized capital stock of the Company
-----------------
consists of 45,000,000 shares of Company Common Stock and 1,000,000 shares of
preferred stock, $.01 par value, of the Company ("COMPANY PREFERRED STOCK" and,
together with the Company Common Stock, the "COMPANY CAPITAL STOCK"). At the
close of business on March 29, 1999, (A) 19,461,601 shares of Company Common
Stock were outstanding, (B) no shares of Company Preferred Stock were
outstanding, (C) options to acquire 2,918,406 shares of Company Common Stock
from the Company pursuant to the Company Stock Plans were outstanding, and (D)
common stock purchase rights ("PURCHASE RIGHTS") to acquire certain shares of
Company Common Stock from the Company pursuant to the Rights Agreement (as
defined in Section 3.01(w)) were outstanding. Other than as set forth above, at
the close of business on March 9, 1999, there were outstanding no shares of
Company Capital Stock or options, warrants or other rights to acquire Company
Capital Stock from the Company. Since March 9, 1999, (x) there have been no
issuances by the Company of shares of Company Capital Stock other than issuances
of shares of Company Common Stock pursuant to the exercise of Company Stock
Options outstanding as of March 9, 1999 and (y) there have been no issuances by
the Company of options, warrants or other rights to acquire capital stock from
the Company except as expressly permitted by this Agreement. No bonds,
debentures, notes or other indebtedness having the right to vote (or convertible
into or exchangeable for securities having the right to vote) on any matters on
11
which stockholders of the Company may vote are issued or outstanding. All
outstanding shares of Company Common Stock are, and any shares of Company Common
Stock that may be issued upon the exercise of Company Stock Options when issued
will be, duly authorized, validly issued, fully paid and nonassessable, and will
be delivered free and clear of all claims, liens, mortgages, encumbrances,
pledges or security interests (collectively, "LIENS") and not subject to
preemptive rights. Other than as set forth above, and except for this
Agreement, the Stock Option Agreement, the Company Stock Plans, the Company
Stock Options and the Purchase Rights, there are no outstanding securities,
options, warrants, calls, rights, commitments, agreements or undertakings of any
kind to which the Company or any Subsidiary is a party or by which the Company
or any Subsidiary is bound obligating the Company or any Subsidiary to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other equity or voting securities of the Company or of any
Subsidiary or obligating the Company or any Subsidiary to issue, grant, extend
or enter into any such security, option, warrant, call, right, commitment,
agreement or undertaking. There are no outstanding obligations of the Company
or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares
of capital stock of the Company or any of its Subsidiaries.
(e) Subsidiaries. (i) Each Subsidiary that is a corporation is duly
------------
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and is duly licensed or qualified to do business
as a foreign corporation and is in good standing in each other jurisdiction in
which the nature of its business or the ownership or leasing of its properties
makes such licensing or qualification necessary and where the failure to so
qualify would in the aggregate have a material adverse effect on the Company.
For purposes of this Agreement, "SUBSIDIARY" means any corporation or other
entity (including any partnership referred to in Section 3.01(e)(ii) below) of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are directly or indirectly owned by the Company. All Subsidiaries and
their respective jurisdictions of incorporation are identified in Section
3.01(e) of the Disclosure Schedule.
(ii) Each partnership (whether or not limited partnership) and each
limited liability company in which the Company directly or indirectly owns a
partnership interest or membership interest, as the case may be, entitling it to
50% or more of the voting interest therein, and each limited partnership for
which the Company or a Subsidiary is a general partner, has been duly organized
and is in good standing under the laws of its jurisdiction of organization, and
is duly licensed or qualified to do business and is in good standing in each
other jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such licensing or qualification necessary and
where the failure to so qualify would in the aggregate have a material adverse
effect on the Company. The Company has previously delivered to Acquisition a
list of all such partnerships and limited liability companies.
(iii) Except as set forth in Section 3.01(e) of the Disclosure
Schedule, all of the outstanding capital stock of, or other ownership interests
in, each Subsidiary is owned by the Company, directly or indirectly, free and
clear of any Lien and free of any other limitation or
12
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other ownership interests).
(f) Voting of Shares. As of the date hereof, there are not any
----------------
stockholder agreements, voting trusts or other agreements or understandings to
which the Company is a party or by which it is bound relating to the voting of
any shares of the Company. All registration rights agreements, stockholder
agreements and voting agreements to which the Company or any of its Subsidiaries
is a party are identified in Section 3.01(f) of the Disclosure Schedule.
(g) SEC Documents; Financial Statements. The Company has filed and
-----------------------------------
made available to Acquisition a correct and complete copy of each report,
schedule, registration statement and definitive proxy statement required to be
filed by the Company with the SEC since January 1, 1996 (the "COMPANY SEC
DOCUMENTS"). As of their respective dates, the Company SEC Documents complied
in all material respects with the requirements of the Securities Act of 1933, as
amended, or the Exchange Act, as the case may be, applicable to such Company SEC
Documents. None of the Company SEC Documents when filed contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of the Company included in the Company SEC Documents comply as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis ("GAAP") during the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited interim
financial statements, as permitted by Form 10-Q, or for normal year-end
adjustments that are not, in the aggregate, material) and fairly present in all
material respects the consolidated financial position of the Company and its
consolidated subsidiaries as at the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended.
(h) Disclosure Documents; Information Supplied. Each document
------------------------------------------
required to be filed by the Company with the SEC in connection with the
transactions contemplated by this Agreement (the "COMPANY DISCLOSURE
DOCUMENTS"), including without limitation the Form S-4, the Proxy
Statement/Prospectus and any amendments or supplements thereto, will, when it
becomes effective under the Securities Act, comply as to form in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act and the rules and regulations thereunder, and each such document required to
be filed with any Governmental Entity other than the SEC will comply in all
material respects with the provisions of applicable law as to the information
required to be contained therein. At the time the Form S-4 becomes effective
under the Securities Act, the Form S-4 will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
13
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. At the date the Proxy
Statement/Prospectus is first mailed to the stockholders of the Company or at
the time of the Company Stockholder Meeting, the Proxy Statement/Prospectus will
not 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 were made,
not misleading. At the time of the filing of any Company Disclosure Document
other than the Form S-4 and the Proxy Statement/Prospectus and at the time of
any distribution thereof, such Company Disclosure Document will not 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 were made, not misleading. The
representations and warranties contained in this Section 3.01(h) do not apply to
statements or omissions included or incorporated by reference in the Company
Disclosure Documents based upon information supplied to the Company by
Acquisition specifically in writing for inclusion or incorporation by reference
therein.
(i) Absence of Certain Changes or Events. Since December 31, 1998,
------------------------------------
the Company and its Subsidiaries have conducted their businesses only in the
ordinary course of business and in a manner consistent with past practice
(except in connection with the negotiation, execution and delivery of this
Agreement) and there has not been:
(1) any event, occurrence or development of a state of circumstances
or facts which has had a material adverse effect except as set forth in Section
3.01(i)(1) of the Disclosure Schedule;
(2) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of Company Capital Stock, or any
repurchase, redemption or other acquisition by the Company or any Subsidiary of
any outstanding shares of capital stock or other securities of, or other
ownership interests in, the Company or any Subsidiary;
(3) any amendment of any material term of any outstanding security of
the Company or any Subsidiary;
(4) any incurrence, assumption or guarantee by the Company or any
Subsidiary of any indebtedness for borrowed money other than in the ordinary
course of business and in amounts and on terms consistent with past practice,
but in any event not in excess of $1,000,000 individually or $5,000,000 in the
aggregate;
(5) any creation or assumption by the Company or any Subsidiary of
any Lien on any material asset other than in the ordinary course of business
consistent with past practices, but in any event not securing any obligation in
excess of $5,000,000;
(6) any making of any loan, advance or capital contributions to or
investment in any person other than loans, advances or capital contributions to
or investments in wholly-owned Subsidiaries made in the ordinary course of
business consistent with past practice except as set forth in Section 3.01(i)(6)
of the Disclosure Schedule;
14
(7) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company or any
Subsidiary which, individually or in the aggregate, has had or would reasonably
be expected to have a material adverse effect;
(8) except as set forth in Section 3.01(i)(8) of the Disclosure
Schedule, any transaction or commitment made, or any contract or agreement
entered into, by the Company or any Subsidiary relating to its assets or
business (including the acquisition or disposition of any assets) or any
relinquishment by the Company or any Subsidiary of any contract or other right,
in either case, material to the Company and its Subsidiaries taken as a whole,
other than transactions and commitments in the ordinary course of business
consistent with past practice and those contemplated by this Agreement;
(9) any change in any method of accounting or accounting practice by
the Company or any Subsidiary, except for any such change required by reason of
a concurrent change in GAAP;
(10) except as set forth in Section 3.01(i)(10) of the Disclosure
Schedule, any (i) grant of any severance or termination pay to any director,
officer or employee of the Company or any Subsidiary, (ii) entering into of any
employment, deferred compensation or similar agreement (or any amendment to any
such existing agreement) with any director, officer or employee of the Company
or any Subsidiary, other than, with respect to employees other than executive
officers only, in the ordinary course of business consistent with past practice,
(iii) increase in benefits payable under any existing severance or termination
pay policies or employment agreements or (iv) increase in compensation, bonus or
other benefits payable to directors, officers or employees of the Company or any
Subsidiary, other than, with respect to employees other than executive officers
only, in the ordinary course of business consistent with past practice, in each
case except as set forth in Section 3.01(i)(10) of the Disclosure Schedule;
(11) any labor dispute, other than routine individual grievances, or
any activity or proceeding by a labor union or representative thereof to
organize any employees of the Company or any Subsidiary, or any lockouts,
strikes, slowdowns, work stoppages or threats thereof by or with respect to such
employees; or
(12) any cancellation of any licenses, sublicenses, franchises,
permits or agreements to which the Company or any Subsidiary is a party, or any
notification to the Company or any Subsidiary that any party to any such
arrangements intends to cancel or not to renew such arrangements beyond its
expiration date as in effect on the date hereof, which cancellation or
notification, individually or in the aggregate, has had or reasonably could be
expected to have a material adverse effect.
(j) No Undisclosed Material Liabilities. There are no liabilities of
-----------------------------------
the Company or any Subsidiary of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, that could
reasonably be expected to have, individually or in the
15
aggregate, a material adverse effect, other than (i) liabilities reflected in
the Company's financial statements (together with the related notes thereto)
filed with the Company's annual report on Form 10-K for the year ended December
31, 1998, (ii) liabilities incurred in the ordinary course of business
consistent with past practice since December 31, 1998, which in the aggregate
would not have a material adverse effect upon the Company and its Subsidiaries,
taken as a whole; (iii) liabilities under this Agreement or for professional
fees and expenses in connection with the transactions contemplated hereby; and
(iv) as previously disclosed and as set forth in Section 3.01(j) of the
Disclosure Schedule.
(k) Compliance with Law; Litigation. The Company and its
-------------------------------
Subsidiaries hold all permits, licenses, variances, exemptions, authorizations,
orders and approvals of all Governmental Entities (the "COMPANY PERMITS") that
are required for them to own, lease or operate their properties and assets and
to carry on their businesses as presently conducted, and there has occurred no
default under any such Company Permit, except for the lack of any Company Permit
or for defaults under any Company Permit which lack or default would not have,
individually or in the aggregate, a material adverse effect on the Company. The
conduct by the Company and its Subsidiaries of their respective businesses has
been in compliance with all Laws, with such exceptions as would not have,
individually or in the aggregate, a material adverse effect on the Company. As
of the date hereof, there is no claim, suit, action or proceeding pending or, to
the knowledge of the Company, threatened against the Company or any of its
Subsidiaries that could reasonably be expected, individually or in the
aggregate, to have a material adverse effect on the Company, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any Subsidiary that would have,
individually or in the aggregate, a material adverse effect on the Company.
(l) Taxes. (i) Each of the Company, its Subsidiaries and any
-----
affiliated, combined or unitary group of which any such corporation or other
entity is or was a member (A) have duly and timely filed, or have caused to be
filed on their behalf, all material tax returns, reports, declarations,
estimates, information returns and statements required to be filed by them
(collectively, "TAX RETURNS"), or requests for extensions to file such Tax
Returns have been timely filed and granted and have not expired, and as of the
time of filing, such Tax Returns are correct and complete in all material
respects; (B) have duly and timely paid in full (or the Company has paid on its
behalf) or made adequate provision in the Company's accounting records for all
material Taxes for all past and current periods for which the Company or any of
its Subsidiaries is liable; and (C) has complied in all material respects with
all applicable laws, rules and regulations relating to the payment and
withholding of Taxes and has in all material respects timely withheld from
employee wages and paid over to the proper governmental authorities all amounts
required to be so withheld and paid over. The most recent financial statements
contained in the Company SEC Documents reflect adequate accruals for all Taxes
payable by the Company and its Subsidiaries for all taxable periods and portions
thereof accrued through the date of such financial statements. Section 3.01(l)
of the Disclosure Schedule sets forth the last taxable period through which the
federal income tax returns of the Company and any of its Subsidiaries have been
examined by the Internal Revenue Service or otherwise closed. All deficiencies
asserted as a
16
result of any such examinations and any examination by any applicable state,
local or foreign taxing authority which have not been or will not be appealed or
contested in a timely manner have been paid, fully settled or adequately
provided for in the most recent financial statements contained in the Company
SEC Documents. Except as set forth in Section 3.01(l) of the Disclosure
Schedule, no federal, state, local or foreign tax audits or other administrative
proceedings or court proceedings are currently pending with regard to any
federal, state, local or foreign Taxes for which the Company or any of its
Subsidiaries would be liable, and no deficiencies for any such Taxes have been
proposed, asserted or assessed or, to the best knowledge of the Company,
threatened against the Company or any of its Subsidiaries pursuant to such
examination of the Company or any of its Subsidiaries by such federal, state,
local or foreign taxing authority with respect to any period. Except as set
forth in Section 3.01(l) of the Disclosure Schedule, no requests for waivers of
the time to assess any Taxes against the Company or any of its Subsidiaries have
been granted or are pending, and neither the Company nor any of its Subsidiaries
has executed (or will execute prior to the Effective Time) any closing agreement
pursuant to Section 7121 of the Code, or any predecessor provision thereof or
any similar provision of state, local or foreign income tax law that relates to
the assets or operations of the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries is a party to any agreement providing for
the allocation or sharing of liability for any Taxes. The Company has made
available to Acquisition complete and accurate copies of all income and
franchise Tax Returns and all other material Tax Returns filed by or on behalf
of the Company or any of its Subsidiaries for the taxable years ending on or
prior to December 31, 1997. Except as set forth in Schedule 3.01(l) of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries has made
any payments subject to Section 280G of the Code, or is obligated to make any
such payments that will not be deductible under Section 280G of the Code, or is
a party to any agreement that under certain circumstances could obligate it to
make any payments that will not be deductible under Section 280G of the Code.
Neither the Company nor any of its Subsidiaries has been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
As used in this Agreement, the terms "TAX" and "TAXES" include all federal,
state, local or foreign income, franchise, property, sales, use, ad valorem,
payroll, social security, unemployment, assets, value added, withholding,
excise, severance, transfer, employment, alternative or add-on minimum and other
taxes, charges, fees, levies, licenses or other assessments, including without
limitation obligations for withholding taxes from payments due or made to any
other person, together with any interest, penalties, additions to tax or
additional amounts imposed by any taxing authority.
(m) Pension and Benefit Plans; ERISA. Except as otherwise set forth
--------------------------------
in Section 3.01(m) of the Disclosure Schedule:
(1) Section 3.01(m)(1) of the Disclosure Schedule lists each
"employee benefit plan" (as such term is defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) maintained by the
Company or any Subsidiary or to which the Company or any Subsidiary contributes
or is required to contribute or in which any employee or
17
former employee of the Company or any Subsidiary participates or is otherwise
covered (a "COMPANY BENEFIT PLAN"). The only Company Benefit Plans that
individually or collectively would constitute an "employee pension benefit plan"
as defined in Section 3(2) of ERISA are identified as such in the list described
above. The Company and each Subsidiary have complied and currently are in
compliance, both as to form and operation in all material respects, with the
applicable provisions of ERISA and the Code, respectively, with respect to each
Company Benefit Plan.
(2) Each of the Company Benefit Plans that is intended to be
"qualified" within the meaning of Section 401(a) of the Code does so qualify and
is exempt from taxation pursuant to Section 501(a) of the Code where the failure
to so qualify would have a material adverse effect on the Company.
(3) Neither the Company nor any Subsidiary has maintained,
contributed to or been required to contribute to a "multiemployer plan" (as
defined in Section 3(37) of ERISA). No amount is due or owing from the Company
or any Subsidiary on account of a "multiemployer plan" (as defined in Section
3(37) of ERISA) or on account of any withdrawal therefrom.
(4) Other than normal claims for benefits, there is no claim pending
against the Company or any Subsidiary under the Code, ERISA or other applicable
law with respect to any of the Company Benefit Plans. Full payment has been
made, or will be made in accordance with Section 404(a)(6) of the Code, of all
amounts that are required to be paid under Section 412 of the Code and the terms
of each Company Benefit Plan that is intended to be qualified under Section
401(a) of the Code; and none of the Company Benefit Plans nor 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. The Company and the Subsidiaries have no current liability for plan
termination or withdrawal under Title IV of ERISA.
(5) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee or officer of the
Company or any Subsidiary to severance pay, unemployment compensation or any
other payment or (ii) accelerate the time of payment or vesting (except as
provided in Section 2.05), or increase the amount of compensation due any such
employee or officer except as disclosed in Section 3.01(m)(5) of the Disclosure
Schedule.
(6) The Company has provided (or made available to) Acquisition with
correct and complete copies of (i) written plans and summary plan descriptions
for each of the Company Benefit Plans; (ii) each trust agreement, insurance
policy or other instrument relating to the funding of each of the Company
Benefit Plans; (iii) the two most recent Annual Reports (Form 5500 series) and
accompanying schedules filed with the Internal Revenue Service or United States
Department of Labor with respect to each of the Company Benefit Plans and (iv)
the most recent audited financial statement for each of the Company Benefit
Plans.
18
(n) Environmental Matters. Except as set forth in Section 3.01(n) of
---------------------
the Disclosure Schedule, (i) the Company and its Subsidiaries operate their
assets, properties, businesses and operations in material compliance with all
applicable environmental laws, ordinances and regulations, (ii) neither the
Company nor any Subsidiary has knowledge of or has received written notice of
any claim, action, suit, proceeding, hearing or investigation, based on or
related to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling, or the emission, discharge, release or
threatened release into the environment, of any pollutant, contaminant, or
hazardous or toxic material or waste (collectively, an "ENVIRONMENTAL EVENT")
relating to their assets, properties, businesses and operations and (iii) to the
knowledge of the Company, no notice of any Environmental Event was given to any
person or entity that occupied the offices of the Company and its Subsidiaries
prior to the date such offices were occupied or used in their business. Without
limiting the generality of the foregoing, to the knowledge of the Company,
neither the Company nor any Subsidiary has disposed of or placed on or in such
offices any waste materials, hazardous materials or hazardous substances in
violation of law.
(o) Intellectual Property. Except as set forth in Section 3.01(o) of
---------------------
the Disclosure Schedule, each of the Company and its Subsidiaries owns or has a
valid right to use each trademark, trade name, patent, service ▇▇▇▇, brand ▇▇▇▇,
brand name, computer program, database, industrial design and copyright
required, owned or used in connection with the operation of its businesses,
including any registrations thereof and pending applications therefor, and each
license or other contract relating thereto that is material to the conduct of
its businesses (collectively, the "COMPANY INTELLECTUAL PROPERTY"), except where
the failure to own or have a right to use such property would not have,
individually or in the aggregate, a material adverse effect on the Company. All
material Company Intellectual Property (other than computer programs, databases
and commercially available software) is set forth in Section 3.01(o) of the
Disclosure Schedule. Except as set forth in Section 3.01(o) of the Disclosure
Schedule, the use of the Company Intellectual Property by the Company or its
Subsidiaries does not conflict with, infringe upon, violate or interfere with or
constitute an appropriation of any right, title, interest or goodwill, including
without limitation any trademark, trade name, patent, service ▇▇▇▇, brand ▇▇▇▇,
brand name, computer program, database, industrial design, copyright or any
pending application therefor of any other person, which in any case could result
in a material adverse effect on the Company. Except as set forth in Section
3.01(o) of the Disclosure Schedule, the Company's rights to the use of all
Company Intellectual Property will not be adversely affected by the transactions
contemplated in this Agreement. The Company has taken all reasonable
precautions to prevent disclosure of any confidential Company Intellectual
Property.
(p) Real Properties.
---------------
(i) Except as otherwise disclosed in the Company SEC Documents,
Section 3.01(p)(i) of the Disclosure Schedule sets forth a list of all material
real property owned in fee by the Company or any of its Subsidiaries
(individually, an "OWNED PROPERTY" and, collectively, the "OWNED PROPERTIES").
To the best knowledge of the Company, the Company has good and
19
marketable fee title to each Owned Property, including the buildings, structures
and other improvements located thereon, in each case free and clear of all
Liens, except (i) Liens which, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on the Company and (ii)
Liens for Taxes and other governmental charges which are not yet due and
payable. There are no condemnations or eminent domain (which term, as used
herein, shall include other compulsory acquisitions or takings by Governmental
Entities) proceedings pending or threatened against any Owned Property or any
material portion thereof. The Company has not received any notice from any city,
village or other Governmental Entity of any zoning, ordinance, land use,
building, fire or health code or other legal violation in respect of any Owned
Property, other than violations which have been corrected or which, individually
or in the aggregate, would not reasonably be expected to have a material adverse
effect on the Company.
(ii) Except as otherwise disclosed in the Company SEC Documents,
Section 3.01(p)(ii) of the Disclosure Schedule sets forth a list of all material
real property (including land and buildings) that is leased by the Company or
any of its Subsidiaries as lessee or sublessee (the "LEASED REAL ESTATE"). The
Company has delivered or caused to be delivered to Acquisition complete and
accurate copies of the written lease and subleases that are described in Section
3.01(p)(ii) of the Disclosure Schedule or otherwise disclosed in the Company SEC
Documents. There are no condemnations or eminent domain proceedings pending or
threatened against any Leased Real Estate or any material portion thereof. The
Company has not received any notice from any city, village or other Governmental
Entity of any zoning, ordinance, land use, building, fire or health code or
other legal violation in respect of any Leased Real Estate, other than
violations which have been corrected or which, individually or in the aggregate,
would not reasonably be expected to have a material adverse effect on the
Company.
(iii) The Owned Properties and the Leased Real Estate constitute, in
the aggregate, all of the material real property used to conduct the business of
the Company and its Subsidiaries in the manner in which such business was
conducted during the fiscal year ended December 31, 1998.
(q) Tangible Personal Property. The Company and its Subsidiaries (A)
--------------------------
have good and valid title to all the tangible personal property material to the
operation of the business conducted by the Company and its Subsidiaries taken as
a whole and reflected in the latest audited financial statements included in the
Company SEC Documents as being owned by the Company and its Subsidiaries or
acquired after the date thereof (except properties sold or otherwise disposed of
in the ordinary course of business since the date thereof), free and clear of
all Liens except (1) statutory Liens securing payments not yet due and (2) such
imperfections and irregularities of title or Liens as do not affect the use of
the properties or assets subject thereto or affected thereby or otherwise
materially impair business operations at such properties, in either case in such
a manner as to have, individually or in the aggregate, a material adverse effect
on the Company, and (B) are collectively the lessee of all tangible personal
property material to the operation of the business conducted by the Company and
its Subsidiaries and reflected as leased in the latest audited financial
statements included in the Company SEC Documents (or on the books
20
and records of the Company as of the date thereof) or acquired after the date
thereof (except for leases that have expired by their terms) and are in
possession of the properties purported to be leased thereunder, and each such
leases is valid and in full force and effect without default thereunder by the
lessee or the lessor, other than defaults that would not, individually or in the
aggregate, have a material adverse effect on the Company. Each of the Company
and its Subsidiaries enjoys peaceful and undisturbed possession under all such
leases. Such owned and leased tangible personal property is in good working
order, reasonable wear and tear excepted, and is suitable for the use for which
it is intended, except that, which would not, individually or in the aggregate,
have a material adverse effect on the Company.
(r) Insurance. The Company and its Subsidiaries are covered by valid
---------
and currently effective insurance policies issued in favor of the Company or its
Subsidiaries that are customary for companies of similar size and financial
condition. Except as set forth in Section 3.01(r) of the Disclosure Schedule,
all such policies are in full force and effect, all premiums due thereon have
been paid and the Company has complied with the provisions of such policies.
All such policies will remain in full force and effect after giving effect to
this Agreement and the transactions contemplated hereby. Except as set forth in
Section 3.01(r) of the Disclosure Schedule, the Company has not been advised of
any defense to coverage in connection with any claim to coverage asserted or
noticed by the Company under or in connection with any of its extant insurance
policies. The Company has not received any written notice from or on behalf of
any insurance carrier issuing policies or binders relating to or covering the
Company and its Subsidiaries that there will be a cancellation or non-renewal of
existing policies or binders, or that alteration of any equipment or any
improvements to real estate occupied by or leased to or by the Company or its
Subsidiaries, purchase of additional equipment, or material modification of any
of the methods of doing business, will be required.
(s) Contracts. Except as set forth in Section 3.01(s) of the
---------
Disclosure Schedule, and except for matters that would not, individually or in
the aggregate, have a material adverse effect on the Company, (i) the Company
and any of its Subsidiaries are not party to or bound by any agreement that
materially limits the ability of the Company, the Surviving Corporation, or any
of their Subsidiaries to compete in any line of business in any geographic area;
(ii) neither the Company nor any of its Subsidiaries is (with or without the
lapse of time or the giving of notice, or both) in breach or default in any
material respect under any agreement; (iii) to the best knowledge of the
Company, none of the other parties to any agreement is (with or without the
lapse of time or the giving of notice, or both) in breach or default in any
material respect under any contract and (iv) neither the Company nor any of its
Subsidiaries has received any written notice of the intention of any party to
terminate any agreement whether as a termination for convenience or for default
of the Company or any of its Subsidiaries thereunder.
(t) Labor Matters. Except as set forth in Section 3.01(t) of the
-------------
Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party
to, or is bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, nor is the
Company or any of its Subsidiaries currently the subject of a
21
proceeding asserting that it or any such Subsidiary has committed an unfair
labor practice (within the meaning of the National Labor Relations Act) or
seeking to compel it or such Subsidiaries to bargain with any labor organization
as to wages and conditions of employment. There is (i) no strike, labor dispute,
slowdown or stoppage pending or threatened against the Company or any of its
Subsidiaries and (iii) no union representation question existing with respect to
the employees of the Company or any of its Subsidiaries.
(u) Transactions with Affiliates. Except as set forth in the Company
----------------------------
SEC Documents or Section 3.01(u) of the Disclosure Schedule, neither the Company
nor any officer, director, employee or affiliate of the Company, any Subsidiary
or any individual related by blood, marriage or adoption to any such individual
or any entity in which any such person or individual owns any beneficial
interest, is a party to any agreement, contract, commitment, transaction or
understanding with or binding upon the Company or any of its Subsidiaries or any
of their respective assets or has any material interest in any material property
owned by the Company or its Subsidiaries or has engaged in any transaction with
any of the foregoing within the last twelve months.
(v) Year 2000. The Company has reviewed its operations and has
---------
inquired of third parties with which the Company and its Subsidiaries have a
material relationship to evaluate the extent to which the business or operations
of the Company and its Subsidiaries will be affected by the Year 2000 Problem.
As a result of such review and inquiries, the Company has no reason to believe,
and does not believe, the Year 2000 Problem will have a material adverse effect
on the Company and its Subsidiaries, taken as a whole, or result in any material
loss or interference with any of the business or operations of the Company and
its Subsidiaries, taken as a whole. The "YEAR 2000 PROBLEM" as used herein
means any significant risk that computer hardware or software used in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of mechanical or
electrical systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1, 2000.
(w) Rights Agreement. Subject to the terms and conditions of this
----------------
Agreement, the Company has duly entered into an amendment to the First Amended
and Restated Rights Agreement dated as of May 26, 1998 (the "RIGHTS AGREEMENT")
between the Company and American Stock Transfer & Trust Company, as Rights
Agent, pursuant to which the Rights Agreement and the Rights will not be
applicable to the Merger, and the execution of this Agreement and the
consummation of the Merger shall not result in a "Distribution Date" under the
Rights Agreement and the consummation of the Merger shall not result in
Acquisition or its affiliates being an "Acquiring Person," result in the
occurrence of an event described in Section 11(a)(ii) or Section 13 of the
Rights Agreement or otherwise result in the ability of any person to exercise
any Purchase Rights under Rights Agreement or require the Purchase Rights to
separate from the shares of Company Common Stock to which they are attached. A
correct and complete copy of the Rights Agreement has been provided to
Acquisition.
22
(x) Opinion of Financial Advisor. The Board of Directors of the
----------------------------
Company has received the oral opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. (the "FINANCIAL
ADVISOR") to the effect that, as of such date, the Merger Consideration to be
received by the holders of Company Common Stock in the Merger is fair from a
financial point of view to such holders, and such opinion has not been withdrawn
or materially and adversely modified. The Financial Advisor has represented to
the Company that it will promptly deliver to the Company a written opinion
confirming in writing the oral opinion described above.
(y) Brokers. No broker, investment banker, financial advisor or
-------
other person, other than the Financial Advisor, the fees and expenses of which
will be paid by the Company, is entitled any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company. The Company's arrangements with the Financial Advisor have been
fully disclosed to Acquisition prior to the date hereof.
(z) Board Recommendation. As of the date hereof, the Board of
--------------------
Directors of the Company, at a meeting duly called and held, by the unanimous
vote of the directors present at such meeting, (i) determined that this
Agreement and the transactions contemplated hereby, including the Merger, are
advisable, fair to and in the best interests of the stockholders of the Company
and has approved the same and (ii) resolved to recommend, subject to their
fiduciary duties under applicable Law and Section 5.01, that the holders of
shares of Company Common Stock approve and adopt this Agreement.
(aa) Vote Required. The affirmative vote of the holders of a
-------------
majority of the outstanding shares of Company Common Stock is the only vote of
the holders of any class or series of the Company's capital stock necessary
(under applicable Law or otherwise) to approve this Agreement and the
transactions contemplated hereby.
(bb) State Takeover Statute Inapplicable. The Board of Directors of
-----------------------------------
the Company has approved this Agreement, the Merger and the transactions
contemplated hereby and such approval, assuming the accuracy of Acquisition's
representation in Section 3.02(f) hereof, is sufficient to render the provisions
of Section 203 of the DGCL inapplicable to the Merger, this Agreement and the
transactions contemplated hereby.
(cc) Stock Plans. All of the outstanding Company Stock Options shall
-----------
have vested pursuant to their terms at the Effective Time and shall not be
exercisable after the Effective Time.
Section 3.02. Representations and Warranties of Acquisition.
Acquisition represents and warrants as of the date hereof (or such other date as
shall be expressly specified) to the Company as follows:
23
(a) Organization, Qualifications and Corporate Power. Acquisition is
------------------------------------------------
a corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and is duly licensed or qualified to do business
as a foreign corporation and is in good standing in each other jurisdiction in
which the nature of its business or the ownership or leasing of its properties
makes such licensing or qualification necessary and where the failure to so
qualify would in the aggregate have a material adverse effect. Acquisition has
the corporate power and authority to own and hold its properties and to carry on
its business as currently conducted.
(b) Capital Structure. The authorized capital stock of Acquisition
-----------------
consists of 1,000 shares of Acquisition Common Stock and all of the authorized
shares of Acquisition have been validly issued, are fully paid and nonassessable
and are owned by WCAS VIII or its affiliates.
(c) Authorization of Agreement, Non-Contravention, Etc. Acquisition
--------------------------------------------------
has all requisite corporate power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate and stockholder action on
the part of Acquisition. This Agreement has been duly executed and delivered by
Acquisition and constitutes a valid and binding obligation of Acquisition,
enforceable against Acquisition in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law). The execution and delivery of
this Agreement does not, and the consummation of the transactions contemplated
hereby will not, conflict with, or result in any breach or violation of, or
result in the termination of, or accelerate the performance required by, or give
right to a right of termination, cancellation or acceleration of any obligation
under, or the creation of a Lien pursuant to (i) any provision of the charter
(or similar organizational documents) or bylaws of Acquisition or (ii) subject
to obtaining or making the Required Filings, any loan or credit agreement, note,
mortgage, indenture, lease or other agreement, obligation, instrument, permit,
concession, franchise, license, or any Laws applicable to Acquisition or its
properties or assets, in any case under this clause (ii) which would,
individually or in the aggregate, have a material adverse effect on Acquisition.
No consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Entity is required by or with respect to
Acquisition in connection with the execution and delivery of this Agreement by
Acquisition or the consummation by Acquisition of the transactions contemplated
hereby, the failure of which to be obtained or made would, individually or in
the aggregate, have a material adverse effect on Acquisition or would prevent or
materially delay the consummation of the transactions contemplated hereby,
except for the Required Filings.
(d) Information Supplied. The information supplied or to be supplied
--------------------
by Acquisition for inclusion or incorporation by reference in any Company
Disclosure Document will not contain any untrue statement of a material fact or
omit to state any material fact required to be
24
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading (i) in the case of
the Proxy Statement/Prospectus, at the date the Proxy Statement/Prospectus is
first mailed to the stockholders of the Company or at the time of the Company
Stockholder Meeting, (ii) in the case of the Form S-4, at the time the Form S-4
is filed with the SEC, at any time it is amended or supplemented and at the time
it becomes effective under the Securities Act, or (iii) in the case of any
Company Disclosure Document other than the Form S-4 and the Proxy
Statement/Prospectus, at the time of the filing of such Company Disclosure
Document and at the time of any distribution thereof. The representations and
warranties contained in this Section 3.02(d) do not apply to statements or
omissions included or incorporated by reference in the Company Disclosure
Documents based upon information supplied to Acquisition by the Company
specifically in writing for inclusion or incorporation by reference therein. Any
document required to be filed by Acquisition or its affiliates with any
Governmental Entity other than the SEC will comply in all material respects with
the provisions of applicable law as to the information required to be contained
therein.
(e) Subsidiaries. Acquisition does not own, directly or indirectly,
------------
any capital stock or other ownership interest in any person.
(f) Acquisition Not an Interested Stockholder. As of the date of
-----------------------------------------
this Agreement, neither Acquisition nor any of its affiliates or associates (as
such terms are defined under the Exchange Act) is an "interested stockholder" as
such term is defined in Section 203 of the DGCL.
(g) Interim Operations of Acquisition. Acquisition was formed on
---------------------------------
March 8, 1999 solely for the purpose of engaging in the transaction contemplated
hereby, has engaged in no other business activities and has conducted its
operations only as contemplated hereby. Except for (i) obligations or
liabilities incurred in connection with its incorporation or organization and
the transactions contemplated hereby and (ii) this Agreement and any other
agreements or arrangements contemplated by this Agreement or in furtherance of
the transactions contemplated hereby, Acquisition has not incurred, directly or
indirectly, any obligations or liabilities or engaged in any business activities
of any type or kind whatsoever or entered into any agreements or arrangements
with any person.
(h) Brokers. No broker, investment banker, financial advisor or
-------
other person, other than Chase Securities Inc., and except as contemplated by
the Commitment Letters (as defined in Section 3.02(i)), the fees and expenses of
which in each case will be paid by Acquisition or, if the Merger is consummated,
the Surviving Corporation, is entitled any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Acquisition.
(i) Financing. Acquisition (or WCAS VIII in the case of clause (i)
---------
below) has received and executed commitment letters, each dated as of the date
hereof (the "COMMITMENT LETTERS"), from (i) Chase Securities Inc. and Chase Bank
of Texas, N.A. (collectively, "CHASE"), pursuant to which Chase has committed,
subject to the terms and conditions set forth therein, to
25
provide the Surviving Corporation with up to $120.0 million of financing under
available senior secured credit facilities; (ii) WCAS VIII, pursuant to which it
has committed, subject to the terms and conditions set forth therein, to provide
to Acquisition up to $145.0 million in equity; and (iii) WCAS Capital Partners
III, L.P. or an affiliate thereof, pursuant to which it has committed to provide
up to $160.0 million of senior subordinated financing (the financings referred
to in clauses (i), (ii) and (iii) above being collectively referred to as the
"FINANCING"). Such Financing is adequate to pay in full in cash at closing the
Merger Consideration, together with all fees and expenses of Acquisition and the
Surviving Corporation associated with the transactions contemplated hereby, and
to make any other payments necessary to consummate the transactions contemplated
hereby. True and complete copies of the Commitment Letters have been furnished
to the Company. WCAS VIII or Acquisition has fully paid any and all commitment
fees or other fees required by such Commitment Letters to be paid as of the date
hereof (and will duly pay any such fees after the date hereof); provided that,
--------
if the Merger is consummated, the Surviving Corporation will reimburse WCAS VIII
for such commitment fees or other fees required by such Commitment Letters. The
Commitment Letters are valid and in full force and effect and no event has
occurred which (with or without notice, lapse of time or both) would constitute
a default thereunder on the part of Acquisition, WCAS VIII or their affiliates
or would adversely affect the probability that such Financing will actually be
funded.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.01. Covenants of the Company. During the period from the
date of this Agreement until the Effective Time, the Company agrees as to itself
and its Subsidiaries that (expressly as expressly contemplated, required or
permitted by this Agreement or as set forth in the Disclosure Schedule):
(a) Ordinary Course. The Company and its Subsidiaries shall carry on
---------------
their respective businesses only in the ordinary course consistent with past
practice in all material respects and use their best efforts to preserve intact
their present businesses, maintain their rights and licenses, keep available the
services of their current officers and employees and preserve their
relationships with customers, suppliers and others having business dealings with
them. The Company shall not, nor shall it permit any of its Subsidiaries to,
enter into any new line of business, or incur or commit to any capital
expenditures, other than capital expenditures and obligations or liabilities
incurred or committed to that are either (i) contemplated in the Company's
current capital budget, a copy of which has been furnished to Acquisition prior
to the date hereof (the "CAPITAL BUDGET"), or (ii) not in excess of $5,000,000
individually or in the aggregate.
(b) Dividends; Change in Stock. The Company shall not, nor shall it
--------------------------
permit any of its Subsidiaries to, nor shall it propose to (i) declare, set
aside or pay any dividends on or make other distributions in respect of any
capital stock (except for cash dividends paid to the Company and its wholly-
owned Subsidiaries with regard to the Company's Subsidiaries' capital stock),
(ii)
26
adjust, split, combine or reclassify any capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of or in
substitution for capital stock or (iii) repurchase, redeem or otherwise acquire,
or permit any Subsidiary to purchase or otherwise acquire, any shares of capital
stock or any debt securities, warrants or options, in each case issued by the
Company or any of its Subsidiaries.
(c) Issuance of Securities. The Company shall not, nor shall it
----------------------
permit any of its Subsidiaries to, (i) issue, deliver or sell, or authorize or
propose the issuance, delivery or sale of, any shares of its or any of its
Subsidiaries' capital stock of any class or any securities convertible into or
exchange for, or any rights, warrants or options to acquire, any of the
foregoing, or any other securities or equity equivalents (including stock
appreciation rights), except for (x) shares issuable upon the exercise of
Company Stock Options outstanding as of the date hereof and (y) issuances of
capital stock of the Subsidiaries to the Company or to a wholly owned Subsidiary
of the Company; (ii) amend the terms of or reprice any Company Stock Option
outstanding on the date of this Agreement or amend the terms of any Stock Option
Plan in effect as of the date hereof.
(d) Governing Documents. The Company shall not, nor shall it permit
-------------------
any of its Subsidiaries to, amend or propose to amend its certificate of
incorporation or bylaws (or other organizational documents).
(e) No Acquisitions. Except as set forth in Section 4.01(e) of the
---------------
Disclosure Schedule, the Company shall not, nor shall it permit any of its
Subsidiaries to, (i) merge or consolidate with, or acquire any equity interest
in, or enter into an agreement with respect to the foregoing, except for (A) a
merger of a wholly-owned Subsidiary with or into the Company or another wholly-
owned Subsidiary or (B) the creation of a wholly-owned Subsidiary of the Company
in the ordinary course of business; or (ii) acquire or agree to acquire a
substantial portion of the assets of, any corporation, partnership, association
or other business organization or any division or business thereof.
(f) No Dispositions. The Company shall not, nor shall it permit any
---------------
of its Subsidiaries to, sell, lease, mortgage, encumber or otherwise dispose of,
any material assets (including, without limitation, capital stock or other
ownership interest in any Subsidiary), other than sales or leases in the
ordinary course of business consistent with past practice.
(g) Indebtedness. The Company shall not, nor shall it permit any of
------------
its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money
(except for lease obligations incurred in the ordinary course of business and
consistent with past practice or drawdowns by the Company under its existing
revolving credit facility or uncommitted lines of credit, if any, made in the
ordinary course of business consistent with past practice or as contemplated by
the Capital Budget), (ii) issue or sell any debt securities or warrants or
rights to acquire any debt securities or (iii) guarantee any debt obligations of
any other person.
27
(h) Accounting Matters. The Company shall not, nor shall it permit
------------------
any of its Subsidiaries to, change its fiscal year or make any material changes
with respect to its accounting methods, principles or practices in effect as of
December 31, 1998, except as required by the SEC, applicable Law or GAAP.
(i) Advice of Changes; Filings. The Company shall advise Acquisition
--------------------------
of any change or event that would cause or constitute a material breach of any
of its representations or warranties contained herein. The Company shall file
all reports required to be filed by it with the SEC or NYSE between the date of
this Agreement and the Effective Time and shall deliver to Acquisition copies of
all such reports promptly after the same are filed. Any such report shall not
contain, as of the date of its filing, any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(j) Compensation; Benefit Plans. The Company shall not, nor shall it
---------------------------
permit any of its Subsidiaries to, (i) enter into, adopt, amend or terminate any
Company Benefit Plan, any other employee benefit plan, any existing employment,
severance or termination agreement with any director, officer or employee,
except as may be required by applicable Law, or (ii) increase in any manner the
compensation (including, without limitation, salary, bonus or other benefits) of
any of its directors, officers or employees or provide any other benefit not
required by any plan and arrangement as in effect as of the date hereof, except
for increases made, with respect to employees other than executive officers, in
the ordinary course of business and consistent with past practice.
(k) Discharges or Waiver of Claims. The Company shall not, nor shall
------------------------------
it permit any of its Subsidiaries to, (i) pay, discharge, or satisfy any claims
(including claims of stockholders), liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), except for the
payment, discharge or satisfaction of liabilities or obligations in the ordinary
course of business consistent with past practice; (ii) waive, release, grant or
transfer any rights of material value or modify or change in any material
respect rights of material value (including, without limitation, the waiver or
release of any rights under confidentiality or standstill agreements), or (iii)
settle or compromise any litigation (whether or not commenced prior to the date
of this Agreement), other than settlements or compromises of litigation where
the amount paid (after giving effect to insurance proceeds actually received) in
settlement or compromise does not exceed $3,500,000, provided that the aggregate
amount paid in connection with the settlement or compromise of all such
litigation matters shall not exceed $10,000,000.
(l) Leases and Lease Commitments. The Company shall not, nor shall
----------------------------
it permit any of its Subsidiaries to, enter into or commit to enter into, or
assume, any operating or capital lease, other than any such lease contemplated
by the Capital Budget or the Company's operating budget, a copy of which has
been provided to Acquisition prior to the date hereof.
28
(m) Liquidation Plan, Etc. Except as set forth in Section 4.01(m) of
---------------------
the Disclosure Schedule, the Company shall not, nor shall it permit any of its
Subsidiaries to, authorize, recommend, propose or announce an intention to adopt
a plan of complete or partial liquidation or dissolution.
(n) Collective Bargaining Agreements. The Company shall not, nor
--------------------------------
shall it permit any of its Subsidiaries to, enter into any collective bargaining
agreement, contract or other agreement or understanding with a labor union or
labor organization, except as may be required by applicable law.
(o) Transactions with Affiliates. The Company shall not, nor shall
----------------------------
it permit any of its Subsidiaries to, enter into any agreement, contract,
commitment, transaction or understanding with any officer, director, employee or
affiliate of the Company, any Subsidiary or any individual related by blood,
marriage or adoption to any such individual or any entity in which any such
person or individual owns any beneficial interest that would be required to be
disclosed under Item 404 of Regulation S-K under the Exchange Act.
(p) Tax Matters. The Company shall not, nor shall it permit any of
-----------
its Subsidiaries to, make any material Tax election, take any Tax position or
amend in a material respect any Tax Return, except in the ordinary course of
business consistent with past practice.
(q) Intellectual Property. The Company shall not, nor shall it
---------------------
permit any of its Subsidiaries to, enter into any license with respect to
Company Intellectual Property unless such license is non-exclusive and entered
into in the ordinary course consistent with past practice.
(r) Insurance. The Company shall not, nor shall it permit any of its
---------
Subsidiaries to, fail to keep in full force and effect insurance comparable in
amount and scope of coverage to insurance now carried by it.
(s) Other Actions. The Company shall not, nor shall it permit any of
-------------
its Subsidiaries to, agree to take, make any commitment (whether orally or in
writing) to take or take (i) any action that would result in any of the
representations and warranties of the Company set forth in this Agreement that
are qualified as to materiality being untrue, any of such representations and
warranties that are not so qualified being untrue in any material respect or any
of the conditions to the Merger set forth in Article VI not being satisfied, in
each case as of any time prior to the Effective Time, or (ii) any action
prohibited by this Agreement. The Company shall not, nor shall it permit any of
its Subsidiaries to, fail to take any action necessary to prevent any such
representation or warranty from being inaccurate (in the case of representations
and warranties that are qualified as to materiality) or inaccurate in any
material respect (in the case of representations and warranties that are not so
qualified) as of any time prior to the Effective Time.
Section 4.02. Covenants of Acquisition. During the period from the
date of this Agreement until the Effective Time, Acquisition agrees that:
29
(a) Other Actions. Acquisition shall not agree to take, make any
-------------
commitment (whether orally or in writing) to take or take (i) any action that
would result in any of its representations and warranties set forth in this
Agreement that are qualified as to materiality being untrue, any of such
representations and warranties that are not so qualified being untrue in any
material respect or any of the conditions to the Merger set forth in Article VI
not being satisfied, in each case as of any time prior to the Effective Time, or
(ii) any action prohibited by this Agreement. Acquisition shall not fail to
take any action necessary to prevent any such representations or warranty from
being inaccurate (in the case of representations and warranties that are
qualified as to materiality) or inaccurate in any material respect (in the case
of representations and warranties that are not so qualified) as of any time
prior to the Effective Time.
(b) Advice of Changes. Acquisition shall advise the Company of any
-----------------
change or event that would cause or constitute a material breach of any of its
representations or warranties contained herein or which it believes will result
in any of the debt or equity financing necessary for the consummation of the
Merger and the other transactions contemplated hereby not being available to it
on terms no less favorable than those set forth in the Commitment Letters.
ARTICLE V
OTHER AGREEMENTS
Section 5.01. No Solicitation. (a) The Company shall not, nor shall
it permit any of its Subsidiaries to, nor shall it authorize or permit any
officer, director or employee of, or any investment banker, attorney or other
advisor or representative of, the Company or any of its Subsidiaries
(collectively, "COMPANY REPRESENTATIVES") to, directly or indirectly, (i)
solicit, initiate, encourage or knowingly facilitate the submission of any
Acquisition Proposal (as defined in Section 5.01(d)) or (ii) enter into or
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, any Acquisition Proposal; provided,
--------
however, that notwithstanding any other provision of this Agreement, (A) the
-------
Company's Board of Directors may take and disclose to the stockholders of the
Company a position contemplated by Rules 14d-9 and 14e-2(a) promulgated under
the Exchange Act and (B) following receipt from a third party, without any
solicitation, initiation or encouragement, directly or indirectly, by the
Company or any Company Representative, of a bona fide Acquisition Proposal, (w)
the Company may engage in discussions or negotiations with such third party and
may furnish such third party information concerning it, and its business,
properties and assets if such third party executes a confidentiality agreement
no less favorable to the Company than the existing confidentiality agreement
between the Company and WCAS VIII (the "CONFIDENTIALITY AGREEMENT") (except that
such third party confidentiality agreement need not require approval or request
of the Company's Board of Directors prior to the making of an offer or proposal
to such Board of Directors), (x) the Board of Directors of the Company may
withdraw, modify or not make its recommendation referred to in Section 3.01(z),
(y) terminate this Agreement in accordance with Article VII or (z) take any
combination of the actions described in clauses (w), (x) and (y) above, but in
each case referred to in clauses (A) and (B) only to the extent that the
Company's Board of Directors shall conclude in good faith, after consultation
with the Company's outside counsel, that
30
such action is required in order for the Company's Board of Directors to act in
a manner consistent with its fiduciary duties under applicable Law.
(b) The Company will immediately cease and cause to be terminated any
existing activities, discussions and negotiations conducted heretofore with
respect to an Acquisition Proposal.
(c) The Company will promptly advise Acquisition orally and in
writing of any Acquisition Proposal, the material terms and conditions of such
Acquisition Proposal and the identity of the person making any such Acquisition
Proposal and any determination by the Board of Directors of the Company pursuant
to the last proviso of Section 5.01(a) with respect to an Acquisition Proposal.
The Company will keep Acquisition informed, as promptly as reasonably
practicable, as to the status of any actions, including any discussions, taken
pursuant to such Acquisition Proposal.
(d) As used in this Agreement, "ACQUISITION PROPOSAL" means any
inquiry, proposal or offer from any person relating to (i) any direct or
indirect acquisition or purchase of assets or a business that constitutes 20% or
more of the net revenues, net income or assets of the Company and its
Subsidiaries, taken as a whole, or 20% or more of the outstanding Company Common
Stock, (ii) any tender offer or exchange offer (including by the Company or any
of its Subsidiaries) that if consummated would result in any person beneficially
owning 20% or more of the outstanding Company Common Stock, or (iii) any merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving the Company or any of its Subsidiaries, other
than the transactions contemplated by this Agreement.
Section 5.02. Recapitalization. Each of the Company and Acquisition
shall use all reasonable best efforts to cause the transactions contemplated by
this Agreement, including the Merger, to be accounted for as a recapitalization
and such accounting treatment to be accepted by their respective accountants and
the SEC, and neither the Company nor Acquisition shall take any action that
would be reasonably likely to cause such accounting treatment not to be
obtained. In the event that Acquisition reasonably determines that it will not
be permitted to account for the transactions contemplated by this Agreement as a
recapitalization, the parties shall take all commercially reasonable actions to
amend this Agreement to cause the transactions contemplated hereby to be
accounted for as a recapitalization. Without limiting the generality of the
foregoing, the parties hereto shall, at the option of Acquisition at any time
prior to the mailing of the Proxy Statement/Prospectus (as hereinafter defined),
amend this Agreement to provide that, if a third party investor unaffiliated
with WCAS and reasonably satisfactory to the Company is willing to acquire,
together with its affiliates, the outstanding Company Common Stock that this
Agreement contemplates the Company's existing stockholders shall retain, such
third party investor shall either subscribe to acquire Company Common Stock from
the Company or acquire common stock of Acquisition from Acquisition and the
existing stockholders shall not retain any Company Common Stock. Acquisition
shall use its reasonable best efforts to identify such third party investor as
promptly as practicable following the date of this Agreement. The terms of this
31
Agreement shall continue in effect in such amendment to the extent consistent
with the revised transaction structure. Any terms required to be revised to
accommodate such revised structure shall be reasonably acceptable to all parties
hereto.
Section 5.03. Preparation of the Proxy Statement/Prospectus. As
promptly as practicable following the date of this Agreement, the Company shall
prepare and file with the SEC the Form S-4 and a proxy or information statement
pertaining to the Merger, which shall also constitute the prospectus included in
the Form S-4 (the "PROXY STATEMENT/PROSPECTUS"). Acquisition will cooperate with
the Company in connection with preparation of the Proxy Statement/Prospectus,
including furnishing to the Company all information regarding Acquisition and
its affiliates as may be required to be disclosed therein. The Company shall
use its best efforts to have the Form S-4 declared effective by the SEC as
promptly as practicable and shall cause a definitive Proxy Statement/Prospectus
to be distributed to its stockholders as promptly as practicable thereafter. No
filing of, or amendment or supplement to, the Proxy Statement/Prospectus will be
made by the Company without providing Acquisition the opportunity to review and
comment thereon and to approve the same, provided that such approvals shall not
be unreasonably withheld or delayed. The Company will advise Acquisition,
promptly after it receives notice thereof, of any request by the SEC for
amendment of the Proxy Statement/Prospectus or comments thereon and responses
thereto or requests by the SEC for additional information. The Company and
Acquisition agree to notify the other party and to correct any information
provided by it that shall have become false or misleading and an appropriate
amendment or supplement describing such information shall be promptly filed with
the SEC and, to the extent required by law, disseminated to the stockholders of
the Company.
Section 5.04. Company Stockholder Meeting. As promptly as
practicable after the date hereof, the Company shall, subject to its fiduciary
duties and Section 5.01, take all action necessary in accordance with all
applicable laws and its Certificate of Incorporation and By-laws, to duly call,
give notice of, convene and hold the Company Stockholder Meeting to consider and
vote upon the approval and adoption of this Agreement and the Merger and for
such other purposes as may be necessary or desirable. The Board of Directors of
the Company has determined that the Merger is advisable and in the best
interests of the stockholders of the Company and shall, subject to its fiduciary
duties and Section 5.01, recommend that the stockholders of the Company vote to
approve and adopt this Agreement and the Merger and any other matters to be
submitted to stockholders in connection therewith.
Section 5.05. Access to Information. Upon reasonable notice, the
Company shall, and shall cause its Subsidiaries and its and their respective
officers, directors, employees, representatives and agents to afford access to
the officers, employees, accountants, counsel and other representatives of
Acquisition (including financing sources and their employees, accountants,
counsel and other representatives), during normal business hours during the
period prior to the Effective Time, to all of the Company's and its
Subsidiaries' properties, books, leases, contracts, commitments, officers,
employees, accountants, counsel, other representatives and records. Acquisition
will, and will cause its advisors and representatives who receive nonpublic
32
information regarding the Company to agree to, hold any such information in
confidence to the extent required by, and in accordance with, the terms of the
Confidentiality Agreement.
Section 5.06. Reasonable Best Efforts. (a) Subject to the terms and
conditions herein provided, each of the Company and Acquisition shall, and shall
cause its Subsidiaries to, use all reasonable best efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate or make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including (i) the formation of subsidiaries and all other actions
necessary or advisable to consummate the Financing, (ii) the obtaining of any
necessary consent, authorization, order or approval of, or any exemption by, any
Governmental Entity and/or any public or private third party which is required
to be obtained by such party or any of its subsidiaries in connection with the
Merger and the other transactions contemplated by this Agreement, and the making
or obtaining of all necessary filing and registrations with respect thereto
(including without limitation filings required under the HSR Act), (iii) the
defending of any lawsuits or other legal proceedings challenging this Agreement
and (iv) the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the purposes
of, this Agreement.
(b) Acquisition shall not, and shall cause WCAS VIII and their
affiliates not to, terminate, amend or modify in any respect the Commitment
Letters in a manner that could reasonably be expected to adversely affect the
probability that such Financing will actually be funded, or the timing thereof,
without prior written consent of the Company.
(c) The Company agrees to, and to cause its Subsidiaries and its and
their respective officers, directors, employees, advisors and accountants to,
reasonably cooperate with Acquisition in connection with the arrangement of any
financing to be consummated prior to or contemporaneously with the closing in
respect of the transactions contemplated by this Agreement, as may be reasonably
requested by Acquisition.
Section 5.07. Indemnification and Insurance. (a) Acquisition agrees
that all rights to indemnification now existing in favor of any officers,
directors, employees or agents of the Company or any of its Subsidiaries as
provided in their respective charters or bylaws (or similar organizational
documents) and any existing indemnification agreements or arrangements of the
Company or its Subsidiaries shall survive the Merger and shall continue in full
force and effect for a period of not less than six years from the Effective Time
(or such longer period as may be provided in any existing indemnification
agreement between the Company and any current or former officer or director
thereof); provided that, in the event any claim or claims are asserted or made
--------
within such six-year period, all rights to indemnification in respect of any
such claim or claims shall continue until final disposition of any and all such
claims.
(b) The Company shall, and from and after the Effective Time, the
Surviving Corporation shall, for a period of six years after the Effective Time,
indemnify, defend and hold
33
harmless each person who is now, or has been at any time prior to the date of
this Agreement or who becomes prior to the Effective Time, an officer, director,
employee or agent of the Company or any of its Subsidiaries (collectively, the
"INDEMNIFIED PARTIES") against all losses, expenses (including attorneys' fees),
claims, damages, liabilities or amounts that are paid in settlement with the
approval of the indemnifying party (which approval shall not be unreasonably
withheld) of, or otherwise in connection with, any threatened or actual claim,
action, suit, proceeding or investigation (a "CLAIM"), based in whole or in part
on or arising in whole or in part out of the fact that the Indemnified Party (or
the person controlled by the Indemnified Party) is or was a director, officer,
employee or agent (including, without limitation, a trustee or fiduciary of any
Company Benefit Plan) of the Company or any of its Subsidiaries and pertaining
to any matter existing or arising out of actions or omissions occurring at or
prior to the Effective Time (including, without limitation, any Claim arising
out of this Agreement or any of the transactions contemplated hereby), whether
asserted or claimed prior to, at or after the Effective Time, in each case to
the fullest extent permitted under Delaware law, and shall pay any expenses, as
incurred, in advance of the final disposition of any such action or proceeding
to each Indemnified Part to the fullest extent permitted under Delaware law. In
determining whether an Indemnified Party is entitled to indemnification under
this Section 5.07, if requested by such Indemnified Party, such determination
shall be made by special, independent counsel selected by the Surviving
Corporation and approved by the Indemnified Party (which approval shall not be
unreasonably withheld), and who has not otherwise performed services for the
Surviving Corporation or its affiliates within the last three years (other than
in connection with such matters). Without limiting the foregoing, in the event
any such claim, action, suit, proceeding or investigation is brought against any
Indemnified Parties (whether arising before or after the Effective Time), (i)
the Indemnified Parties may retain the Company's regularly engaged independent
legal counsel or counsel satisfactory to them and reasonably satisfactory to the
Company (or satisfactory to them and reasonably satisfactory to the Surviving
Corporation after the Effective Time), and the Company (or after the Effective
Time, the Surviving Corporation) shall pay all reasonable fees and expenses of
such counsel for the Indemnified Parties as promptly as statements therefor are
received; and (ii) the Company (or after the Effective Time, the Surviving
Corporation) will use all reasonable efforts to assist in the vigorous defense
of any such matter, provided that neither the Company nor the Surviving
Corporation shall be liable for any settlement effected without its prior
written consent, which consent shall not unreasonably be withheld. In the event
of any Claim, any Indemnified Party wishing to claim indemnification will
promptly notify the Company (or after the Effective Time, the Surviving
Corporation) thereof (provided that failure to so notify the Surviving
Corporation will not affect the obligations of the Surviving Corporation except
to the extent that the Surviving Corporation shall have been prejudiced as a
result of such failure) and shall deliver to the Company (or after the Effective
Time, the Surviving Corporation) the undertaking contemplated by Section 145(e)
of the DGCL, but without any requirement for the posting of a bond. Without
limiting the foregoing, in the event any such Claim is brought against any of
the Indemnified Parties, such Indemnified Parties may retain only one law firm
(plus one local counsel, if necessary) to represent them with respect to each
such matter unless the use of counsel chosen to represent the Indemnified
Parties would present such counsel with a conflict of interest, or the
representation of all of the Indemnified Parties by the same counsel would be
34
inappropriate due to actual or potential differing interests between them, in
which case such additional counsel as may be required (as shall be reasonably
determined by the Indemnified Parties and the Company or the Surviving
Corporation, as the case may be) may be retained by the Indemnified Parties at
the cost and expense of the Company (or the Surviving Corporation) and the
Company (or the Surviving Corporation) shall pay all reasonable fees and
expenses of such counsel for such Indemnified Parties. The Company (or the
Surviving Corporation shall use all reasonable efforts to assist in the vigorous
defense of any such Claim, provided that the Company (or the Surviving
Corporation) shall not be liable for any settlement effected without its written
consent, which consent, however, shall not be unreasonably withheld.
Notwithstanding the foregoing, nothing contained in this Section 5.07 shall be
deemed to grant any right to any Indemnified Party which is not permitted to be
granted to an officer, director, employee or agent of the Company under Delaware
law, assuming for such purposes that the Company's certificate of incorporation
and bylaws provide for the maximum indemnification permitted by law.
(c) Acquisition agrees that the Company and, from and after the
Effective Time, the Surviving Corporation shall cause to be maintained in effect
for not less than six years from the Effective Time the current policies of the
directors' and officers' liability insurance maintained by the Company; provided
that (i) the Surviving Corporation may substitute therefor policies of at least
the same coverage containing terms and conditions which are no less
advantageous; (ii) such substitution shall not result in any gaps or lapses in
coverage with respect to matters occurring prior to the Effective Time; and
(iii) the Surviving Corporation shall not be required to pay an annual premium
in excess of 200% of the last annual premium paid by the Company prior to the
date hereof and if the Surviving Corporation is unable to obtain the insurance
required by this Section 5.07(c) it shall obtain as much comparable insurance as
possible for an annual premium equal to such maximum amount.
(d) Following the Merger, if the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all of
its properties and assets to any person or persons, then, and in each such case,
proper provision shall be made so that the successors and assigns of the
Surviving Corporation, and any of their successors and assigns, assume the
obligations of the parties hereto and the Surviving Corporation set forth in
this Section 5.07.
(e) This Section 5.07 shall survive the consummation of the Merger at
the Effective Time, is intended to benefit the Company, the Surviving
Corporation and the Indemnified Parties (each of whom may enforce the provisions
of this Section 5.07) and shall be binding on the successors and assigns of the
Surviving Corporation.
Section 5.08. Benefits Matters. (a) Acquisition agrees that the
Company will honor and, from and after the Effective Time, the Surviving
Corporation and its Subsidiaries will honor all obligations under employment
agreements, Company Benefit Plans and all other
35
employee benefit plans, programs, policies and arrangements of the Company and
its Subsidiaries in accordance with the terms thereof.
(b) Acquisition agrees that the Surviving Corporation will take such
actions as are necessary so that, for a period of at least one year from the
Effective Time, employees of the Company and its Subsidiaries will be provided
cash compensation, employee benefit and incentive compensation and similar plans
and programs (other than equity-based compensation plans and programs) as will
provide compensation and benefits which in the aggregate are no less favorable
than those provided to such employees as of the date hereof.
(c) To the extent permitted under applicable Law, each employee of
the Company or its Subsidiaries shall be given credit for all service with the
Company or its Subsidiaries (or service credited by the Company or its
Subsidiaries) under all employee benefit plans, programs, policies and
arrangements maintained by the Surviving Corporation in which they participate
or in which they become participants for purposes of eligibility, vesting and
benefit accrual including, without limitation, for purposes of determining (1)
short-term and long-term disability benefits, (2) severance benefits, (3)
vacation benefits and (4) benefits under any retirement plan.
(d) This Section 5.08, which shall survive the consummation of the
Merger at the Effective Time and shall continue without limit except as
expressly set forth herein, is intended to benefit and bind the Company, the
Surviving Corporation and any person referenced in this Section 5.08, each of
whom may enforce the provisions of this Section 5.08 whether or not party to
this Agreement. Except as provided in clause (a) above, nothing contained in
this Section 5.08 shall create any beneficiary rights in any employee or former
employee (including any dependent thereof) of the Company, any of its
Subsidiaries or the Surviving Corporation in respect of continued employment for
any specified period of any nature or kind whatsoever. In addition, nothing in
this Section 5.08 shall be construed to limit the ability of the Surviving
Corporation or any of its Subsidiaries to review Company Benefit Plans and all
other employee benefit plans, programs, policies and arrangements from time to
time and make such changes as it or they deem appropriate.
Section 5.09. Resignations of Directors. Prior to the Effective
Time, the Company shall deliver to Acquisition evidence satisfactory to
Acquisition of the resignation of all directors of the Company, effective at the
Effective Time.
Section 5.10. Solvency at Closing. Acquisition agrees for the
benefit of the directors of the Company to take all actions necessary to ensure
that, immediately following the Effective Time, the Surviving Corporation will
be solvent for all purposes under federal bankruptcy and applicable state
fraudulent transfer and fraudulent conveyance laws.
ARTICLE VI
CONDITIONS PRECEDENT
36
Section 6.01. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of the parties to effect the Merger shall be
subject to the satisfaction or waiver at or prior to the Effective Time of the
following conditions:
(a) Company Stockholder Approval. The Company Stockholder Approval
----------------------------
shall have been obtained.
(b) HSR Act and Other Approvals. Any waiting period applicable to
---------------------------
the Merger under the HSR Act shall have expired or been terminated and the
approvals listed in Section 3.01(c) of the Disclosure Schedule shall have been
obtained.
(c) Form S-4. The Form S-4 shall have been declared effective and no
--------
stop order with respect thereto shall be in effect at the Effective Time.
(d) No Injunctions or Restraints; Illegality. No temporary
----------------------------------------
restraining order, preliminary or permanent injunction or other order or decree
issued by any Governmental Entity of competent jurisdiction enjoining or
otherwise preventing the consummation of the Merger shall be in effect;
provided, however, that each of the parties shall use reasonable best efforts to
-------- -------
prevent the entry of any such injunction or other order or decree and to cause
any such injunction or other order or decree that may be entered to be vacated
or otherwise rendered of no effect. No statute, rule, regulation or other Law
shall have been enacted, promulgated or otherwise issued by any Governmental
Entity that prohibits the consummation of the Merger.
Section 6.02. Conditions to the Obligations of Acquisition to Effect
the Merger. The obligations of Acquisition to effect the Merger shall be subject
to the satisfaction of the following conditions unless waived by Acquisition:
(a) Representations and Warranties. The representations and
------------------------------
warranties of the Company set forth in this Agreement (i) to the extent
qualified by materiality or material adverse effect qualifiers, shall be true
and correct and (ii) to the extent not qualified by materiality or material
adverse effect qualifiers, shall be true and correct in all material respects,
in each of cases (i) and (ii), as of the date of this Agreement and as of the
Effective Time as though made on and as of the Effective Time, except (x) as
contemplated or permitted by this Agreement and (y) to the extent that such
representations or warranties shall have been expressly made as of an earlier
date, in which case such representations and warranties shall have been true and
correct as of such earlier date, and Acquisition shall have received a
certificate to such effect signed on behalf of the Company by its Chief
Executive Officer or its Chief Financial Officer.
(b) Performance of Obligations of the Company. The Company shall
-----------------------------------------
have performed or complied with in all material respects all material
obligations required to be performed or complied with by it under this Agreement
at or prior to the Effective Time, and Acquisition shall have received a
certificate to such effect signed on behalf of the Company by its Chief
Executive Officer or its Chief Financial Officer.
37
(c) Consents, Etc. Acquisition shall have received evidence, in form
-------------
and substance reasonably satisfactory to it, that such consents, approvals,
authorizations, qualifications and orders of Governmental Entities and other
third parties as are necessary in connection with the transactions contemplated
hereby have been obtained, other than those the failure of which to be obtained,
individually or in the aggregate, would not have a material adverse effect on
the Company.
(d) No Litigation. There shall not be pending any suit, action or
-------------
proceeding brought by any Governmental Entity seeking to prohibit or limit in
any material respect the ownership or operation by the Company, Acquisition or
any of their respective affiliates of a substantial portion of the business or
assets of the Company and its Subsidiaries, taken as a whole, or to require any
such person to dispose of or hold separate any material portion of the business
or assets of the Company and its Subsidiaries, taken as a whole, as a result of
the Merger or any of the other transactions contemplated by this Agreement or
seeking to impose limitations on the ability of WCAS VIII or any of its
affiliates or any third party investor contemplated by Section 5.02 to acquire
or hold, or exercise full rights of ownership of, any shares of Company Common
Stock, including, without limitation, the right to vote the Company Common Stock
on all matters properly presented to the stockholders of the Company or seeking
to prohibit WCAS VIII or any of its affiliates or any such investor from
effectively controlling in any material respect a substantial portion of the
business or operations of the Company or its Subsidiaries, in each case after
giving effect to any actions required to be taken pursuant to Section 5.06.
(e) Financing. Acquisition shall have arranged the Financing
---------
substantially on the terms contemplated by the Commitment Letters or alternative
financing on terms no less favorable than those set forth in the Commitment
Letters, unless the failure to arrange the Financing was the result of a failure
by Acquisition to perform any covenant or condition contained therein or herein,
a failure by WCAS VIII or its affiliates to perform its obligations contained
therein or the inaccuracy of any representation or warranty of Acquisition.
Section 6.03. Conditions to the Obligations of the Company to Effect
the Merger. The obligations of the Company to effect the Merger shall be subject
to the satisfaction of the following conditions unless waived by the Company:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Acquisition set forth in this Agreement (i) to the extent
qualified by materiality or material adverse effect qualifiers, shall be true
and correct and (ii) to the extent not qualified by materiality or material
adverse effect qualifiers, shall be true and correct in all material respects,
in each of cases (i) and (ii), as of the date of this Agreement and as of the
Effective Time as though made on and as of the Effective Time, except (x) as
contemplated or permitted by this Agreement and (y) to the extent that such
representations or warranties shall have been expressly made as of an earlier
date, in which case such representations and warranties shall have been true and
correct as of such earlier date, and the Company shall have received a
certificate to such effect signed on behalf of
38
Acquisition by a director thereof who shall also be a managing member of the
sole general partner of WCAS VIII.
(b) Performance of Obligations of Acquisition. Acquisition shall
-----------------------------------------
have performed or complied with in all material respects all material
obligations required to be performed or complied with by it under this Agreement
at or prior to the Effective Time, and the Company shall have received a
certificate to such effect signed on behalf of Acquisition by a director thereof
who shall also be a managing member of the sole general partner of WCAS VIII.
(c) Financing. Acquisition shall have arranged the Financing
---------
substantially on the terms contemplated by the Commitment Letters or alternative
financing on terms no less favorable than those set forth in the Commitment
Letters, unless the failure to arrange the Financing was the result of a failure
by the Company to perform any covenant or condition contained herein or the
inaccuracy of any representation or warranty of the Company.
(d) Solvency Letter. Acquisition shall have caused the valuation
---------------
firm which has delivered a solvency letter to the financial institutions
providing the debt financing for the Merger (or, if no such letter has been
provided thereto, a valuation firm reasonably acceptable to the Company) to have
delivered to the Company a letter addressed to its Board of Directors in form
and substance reasonably satisfactory thereto as to the solvency of the Company
and its Subsidiaries after giving effect to the Merger, the financing
arrangements contemplated by Acquisition with respect to the Merger and the
other transactions contemplated hereby.
Section 6.04. Frustration of Closing Conditions. Neither Acquisition
nor the Company may rely on the failure of any condition set forth in Section
6.01, 6.02 or 6.03, as the case may be, to be satisfied if such failure was
caused by such party's failure to use all reasonable best efforts to consummate
the Merger and the other transactions contemplated hereby.
ARTICLE VII
TERMINATION AND AMENDMENT
Section 7.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after the Company
Stockholder Approval is obtained:
(a) by mutual written consent of Acquisition and the Company;
(b) by Acquisition or the Company upon written notice to the other
party:
(i) if any Governmental Entity of competent jurisdiction
shall have issued a permanent injunction or other order or
decree enjoining or otherwise preventing the consummation of
the Merger and such injunction or other order or decree shall
have become final and nonappealable; provided that the party
seeking to terminate this Agreement pursuant to
39
this clause (i) shall have used its reasonable best efforts to
prevent or contest the imposition of, or seek the lifting or stay
of, such injunction, order or decree;
(ii) unless the party seeking to terminate this Agreement
is in material breach of its obligations hereunder, if the
Company or Acquisition breaches or fails to perform any of its
representations, warranties, covenants or other agreements
hereunder, which breach or failure to perform (A) would give rise
to the failure of a condition set forth in Section 6.02, in the
case of such a breach or failure to perform on the part of the
Company, or Section 6.03, in the case of such a breach or failure
to perform on the part of Acquisition, and (B) is incapable of
being cured by the party so breaching or failing to perform or is
not cured within 10 days after the terminating party gives
written notice of such breach to the other party and such a cure
is not effected during such period;
(iii) if the Merger shall not have been consummated on or
before September 15, 1999, unless the failure to consummate the
Merger is the result of a material breach of this Agreement by
the party seeking to terminate this Agreement; or
(iv) if, upon a vote at a duly held Company Stockholder
Meeting or any adjournment thereof, the Company Stockholder
Approval shall not have been obtained;
(c) by Acquisition upon written notice to the Company if the Board of
Directors of the Company or any committee thereof shall have withdrawn or
modified in a manner adverse to Acquisition its approval or recommendation of
the Merger or this Agreement, approved or recommended any Acquisition Proposal
or resolved to do any of the foregoing; or
(d) by the Company, if the Board of Directors of the Company
determines, in the exercise of its good faith judgment as to fiduciary duties to
its stockholders imposed by law, after consultation with outside counsel, that
such termination is required by reason of an Acquisition Proposal being made in
order for the Company's Board of Directors to act in a manner consistent with
its fiduciary duties under applicable law; provided that the Company shall
--------
notify Acquisition promptly of its intention to terminate this Agreement or
enter into a definitive agreement with respect to any Acquisition Proposal,
Section 7.02. Effect of Termination. In the event of termination of
this Agreement by either party hereto as provided in Section 7.01, this
Agreement shall forthwith become void and have no effect, and, except to the
extent that such termination results from the willful and material breach by a
party of any of its representations, warranties, covenants or agreements set
forth in this Agreement, there shall be no liability or obligation on the part
of
40
Acquisition or the Company, except with respect to Section 3.01(h), Section
3.01(y), Section 3.02 (d), Section 3.02(h), the second sentence of 5.05, this
Section 7.02, Section 7.03 and Article VIII, which provisions shall survive such
termination.
Section 7.03. Fees and Expenses. (a) Whether or not the Merger is
consummated, all costs and expenses incurred in connection with the Merger, this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such expenses.
(b) If a Payment Event (as hereinafter defined) occurs, the Company
shall, within two business days following such Payment Event, pay Acquisition,
or its designee, a termination fee of $12,000,000 in cash. A "PAYMENT EVENT"
means (i) the termination of this Agreement by Acquisition pursuant to Section
7.01(c), (ii) the termination of this Agreement by the Company pursuant to
Section 7.01(d), or (iii) the Company (x) enters into, (y) agrees to enter into
or (z) consummates a transaction within one year after the date of termination
of this Agreement (other than pursuant to Section 7.01(a) or Section 7.01(b)(i),
or by reason of Acquisition's failure to comply with or perform, or breach, in
any material respect, of any of its covenants or agreements contained herein)
that is the subject of an inquiry, proposal or offer that is an Acquisition
Proposal that was publicly announced or submitted to the Company prior to the
termination of this Agreement.
(c) The Company acknowledges that the agreements contained in this
Section 7.03 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Acquisition would not enter into
this Agreement; accordingly, if the Company fails to promptly pay any amount due
pursuant to this Section 7.03, and, in order to obtain such payment, Acquisition
commences a suit which results in a judgment against the Company for the fee set
forth in this Section 7.03, the Company shall also pay to Acquisition its costs
and expenses incurred in connection with such litigation.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant hereto shall survive the Effective Time, provided that this
--------
Section 8.01 shall not limit any covenant or agreement of the parties that by
its terms contemplates performance after the Effective Time.
Section 8.02. Confidentiality Agreement. The Confidentiality
Agreement shall survive the execution and delivery of this Agreement or any
termination of this Agreement, and the provisions of the Confidentiality
Agreement shall apply to all information and material delivered by any party
hereunder.
41
Section 8.03. Publicity. The Company and Acquisition agree that they
will not issue any press release or make any other public announcement
concerning this Agreement or the transactions contemplated hereby without the
prior consent of the other party, which consent shall not be unreasonably
withheld, except that the Company or Acquisition may make such public disclosure
that it believes in good faith to be required by law (in which event such party
shall consult, to the extent possible, with the other party prior to making such
disclosure).
Section 8.04. Amendment. This Agreement may be amended, modified or
supplemented only by written agreement by the parties hereto at any time before
the Effective Time; provided that, after receipt of the Company Stockholder
--------
Approval, no amendment shall be made which by law requires further approval by
such stockholders without so obtaining such further approval.
Section 8.05. Extension; Waiver. At any time prior to the Effective
Time, the parties hereto may, to the extent legally allowed, (a) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations or warranties
contained herein or in any document delivered pursuant hereto and (c) subject to
the provisions of Section 8.04, waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
Section 8.06. Notices. All notices, requests and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally, telecopied (with confirmation) or sent by
overnight or same-day courier (providing proof of delivery) or sent by certified
or registered mail, postage prepaid, to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
(a) if to the Company, to it at:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
A. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
3700 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center
42
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇; and
(b) if to Acquisition, to it at:
▇/▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
Reboul, MacMurray, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Kristol
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 8.07. Counterparts. This Agreement may be executed in two
counterparts, both of which shall be considered one and the same agreement and
shall become effective when each party hereto shall have received a counterpart
hereof signed by the other party hereto.
Section 8.08. Entire Agreement; No Third-Party Beneficiaries; Rights
of Ownership. This Agreement, together with the Confidentiality Agreement, (a)
constitute the entire agreement and supersede all prior agreements with respect
to the subject matter hereof and of the Confidentiality Agreement and (b) other
than Section 5.07, Section 5.08 and Section 5.10 of this Agreement, is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
Section 8.09. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware applicable to
agreements entered into and to be performed wholly within such State.
Section 8.10. Successors and Assigns. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned, in whole or
in part, by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties, and any such assignment
that is not so consented to shall be null and void; provided that Acquisition
--------
may assign its rights hereunder to any of its affiliates, but no such assignment
43
shall relieve Acquisition of its obligations hereunder. If Acquisition shall
assign its rights under this Agreement, then the parties hereto shall enter into
a reasonable and appropriate amendment to this Agreement to reflect such
assignment and the substitution of the assignee as Acquisition for purposes of
this Agreement. Subject to the first sentence of this Section 8.10, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
Section 8.11. Jurisdiction. Each of the parties hereto (a) consents
to submit itself to the personal jurisdiction of any federal court located in
the State of Delaware or any Delaware state court in the event any dispute
arises out of this Agreement or the transactions contemplated hereby, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and (c) agrees that it will not
bring any action relating to this Agreement or the transactions contemplated
hereby in any court other than a federal or state court sitting in the State of
Delaware.
Section 8.12. Headings; Interpretation. 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. References in this Agreement
to Sections, Schedules, Exhibits or Articles mean a Section, Schedule, Exhibit
or Article of this Agreement or the Disclosure Schedule unless otherwise
indicated. References to this Agreement shall be deemed to include all Exhibits
and Sections of the Disclosure Schedule, unless the context otherwise requires.
The term "PERSON" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, a governmental entity or an unincorporated
organization.
Section 8.13. Severability. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or any other such instrument.
Section 8.14. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND
Acquisition HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
44
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement and Plan of Merger as of the day and year first above written.
BANCTEC, INC.
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
COLONIAL ACQUISITION CORP.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇
Title: Vice President
45