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EXHIBIT 10.31
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ADP MERGERCO, INC.,
a Michigan corporation
AND
AUTOMATIC DATA PROCESSING, INC.,
a Delaware corporation
AND
▇▇▇▇▇ CORPORATION,
a Michigan corporation
Dated as of
August 22, 1995
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TABLE OF CONTENTS
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ARTICLE 1
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Merger. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effect on Outstanding Shares of ▇▇▇▇▇ Common Stock;
ADP Mergerco Common Stock . . . . . . . . . . . . . . . . . 2
1.3 Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Rights of Holders of ▇▇▇▇▇ Common Stock; ADP Common
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5 No Fractional Shares. . . . . . . . . . . . . . . . . . . . 3
1.6 Procedure for Exchange of Stock . . . . . . . . . . . . . . 4
1.7 Stock Options . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF ADP MERGERCO AND ADP. . . . . . . . . 6
2.1 Due Organization. . . . . . . . . . . . . . . . . . . . . . 7
2.2 Due Authorization . . . . . . . . . . . . . . . . . . . . . 7
2.3 Assets and Liabilities. . . . . . . . . . . . . . . . . . . 7
2.4 Compliance with Laws. . . . . . . . . . . . . . . . . . . . 8
2.5 Claims and Proceedings. . . . . . . . . . . . . . . . . . . 8
2.6 Financial Statements and Reports. . . . . . . . . . . . . . 8
2.7 Capitalization. . . . . . . . . . . . . . . . . . . . . . . 9
2.8 ADP Common Stock. . . . . . . . . . . . . . . . . . . . . . 9
2.9 Options . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.10 Additional Rights . . . . . . . . . . . . . . . . . . . . . 9
2.11 Dividends and Stock Purchases . . . . . . . . . . . . . . . 9
2.12 Shareholder Notice. . . . . . . . . . . . . . . . . . . . . 10
2.13 Brokers and Finders . . . . . . . . . . . . . . . . . . . . 10
2.14 Reorganization. . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇ . . . . . . . . . . . . . . . . 10
3.1 Due Organization. . . . . . . . . . . . . . . . . . . . . . 10
3.2 Due Authorization . . . . . . . . . . . . . . . . . . . . . 10
3.3 No Consents . . . . . . . . . . . . . . . . . . . . . . . . 11
3.4 Assets and Liabilities. . . . . . . . . . . . . . . . . . . 11
3.5 Properties. . . . . . . . . . . . . . . . . . . . . . . . . 11
3.6 Licenses and Permits. . . . . . . . . . . . . . . . . . . . 11
3.7 Intellectual Rights . . . . . . . . . . . . . . . . . . . . 12
3.8 Compliance with Laws. . . . . . . . . . . . . . . . . . . . 12
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3.9 Employee Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.10 Contracts and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.11 Claims and Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.12 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.13 Financial Statements and Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.15 Business Relations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.16 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.17 Notes and Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.18 Information Furnished to ADP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.19 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.20 Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.21 ▇▇▇▇▇ Dividends and Stock Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.22 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.23 Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.24 Submission to Vote. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.25 Information to be Provided. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.26 Shareholder Vote. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.27 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.28 Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.29 Chapter 7A and Chapter 7B of MBCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.30 Pooling of Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.31 Fixed Assets; Sufficiency of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.32 Leased Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.33 Licensed Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.34 Loan Agreements, Debt Instruments and Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . 20
3.35 Employees; Employment Practices; Compensation and Vacations . . . . . . . . . . . . . . . . . 20
3.36 Capital Expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.37 Bank Accounts and Safe Deposit Boxes; Powers of Attorney. . . . . . . . . . . . . . . . . . 20
3.38 Casualty Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.39 Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.40 Reorganization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 4
ADDITIONAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.1 Conduct of Sandy's Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.2 Conduct of Business by ADP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.3 Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.4 Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.5 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.6 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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4.7 Public Announcements . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 5
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.1 Conditions to ADP Mergerco's and ADP's Obligations . . . . . 26
5.2 Conditions to Sandy's Obligations . . . . . . . . . . . . . 30
5.3 Closing and Effective Time . . . . . . . . . . . . . . . . . 33
ARTICLE 6
TERMINATION AND ABANDONMENT . . . . . . . . . . . . . . . . . . . . . . 33
6.1 Termination and Abandonment . . . . . . . . . . . . . . . . 33
6.2 Effect of Termination . . . . . . . . . . . . . . . . . . . 33
ARTICLE 7
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.1 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 33
7.2 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.3 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.4 Intentionally Left Blank . . . . . . . . . . . . . . . . . . 34
7.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . 34
7.6 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 34
7.7 Severability . . . . . . . . . . . . . . . . . . . . . . . . 35
7.8 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.9 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.10 Non-Survival of Representations, Warranties, and Covenants . 36
7.11 Fiduciary Duties . . . . . . . . . . . . . . . . . . . . . . 36
7.12 Indemnification and Insurance . . . . . . . . . . . . . . . 37
7.13 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.14 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 38
7.15 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.16 Sections; Exhibits . . . . . . . . . . . . . . . . . . . . . 38
7.17 Number and Gender of Words . . . . . . . . . . . . . . . . . 38
7.18 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 38
7.19 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 38
EXHIBIT A - Plan of Merger
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SCHEDULES
SCHEDULE 3.3 - Consents
SCHEDULE 3.6 - Licenses
SCHEDULE 3.7 - Intellectual Rights
SCHEDULE 3.9 - Employee Plans
SCHEDULE 3.10 - Contracts and Agreements
SCHEDULE 3.11 - ▇▇▇▇▇ Claims and Proceedings
SCHEDULE 3.12 - Insurance
SCHEDULE 3.13 - Acquisition Expenses
SCHEDULE 3.14 - Taxes
SCHEDULE 3.15 - Business Relations
SCHEDULE 3.17 - Notes and Accounts Receivables
SCHEDULE 3.20 - Options
SCHEDULE 3.21 - ▇▇▇▇▇ Dividends and Stock Purchases
SCHEDULE 3.22 - Subsidiaries
SCHEDULE 3.23 - Customers
SCHEDULE 3.32 - Leased Properties
SCHEDULE 3.33 - Licensed Properties
SCHEDULE 3.34 - Debt Instruments
SCHEDULE 3.35 - Employees
SCHEDULE 3.36 - Capital Expenditures
SCHEDULE 3.37 - Bank Accounts
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made and entered
into as of August 22, 1995, by and among ADP Mergerco, Inc., a Michigan
corporation ("ADP Mergerco"), Automatic Data Processing, Inc., a Delaware
corporation and owner of all of the outstanding capital stock of ADP Mergerco
("ADP") and ▇▇▇▇▇ Corporation, a Michigan corporation ("▇▇▇▇▇").
RECITALS
WHEREAS, the respective boards of directors of ADP Mergerco and ▇▇▇▇▇ have
approved the merger of ADP Mergerco with and into ▇▇▇▇▇ (the "Merger") under
the Michigan Business Corporation Act (the "MBCA") in accordance with the
provisions of this Agreement and the Plan of Merger (the "Plan") in
substantially the form attached hereto as Exhibit A.
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants, agreements and conditions set forth in this Agreement,
and in order to set forth the terms and conditions, of the Merger and the mode
of carrying the Merger into effect, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger.
(a) Upon the terms and subject to the conditions set forth in this
Agreement and the Plan, and in accordance with the MBCA, at the Effective Time
(such term and all other capitalized terms used herein having the respective
meanings set forth in Section 7.19 hereof), ADP Mergerco will be merged with
and into ▇▇▇▇▇. As a result of the Merger, the separate corporate existence of
ADP Mergerco will cease and ▇▇▇▇▇ shall continue as the surviving corporation
of the Merger (the "Surviving Corporation") under its present corporate name.
(b) On the Closing Date, or as soon thereafter as practicable, the
parties will execute and file with the Department of Commerce of the State of
Michigan, a Certificate of Merger in accordance with the MBCA. The Merger will
become effective upon the filing of such Certificate of Merger in accordance
with Sections 131 and 707 of the MBCA (the "Effective Time"). At the Effective
Time, ADP Mergerco will be merged with and into ▇▇▇▇▇.
(c) The Articles of Incorporation and Bylaws of ADP Mergerco in effect
immediately prior to the Effective Time shall be the Articles of Incorporation
and Bylaws of the Surviving Corporation until thereafter amended in accordance
with the provisions therein and as provided by the MBCA. The initial directors
of the Surviving Corporation shall be the directors of ADP Mergerco immediately
prior the Effective Time, in each case until their successors are elected and
qualified, and the initial officers of the Surviving Corporation shall be the
officers of ADP Mergerco immediately prior to the Effective Time, in each case
until their successors are duly elected and qualified.
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(d) The parties will structure the Merger so that it will be accounted
for by ADP and ▇▇▇▇▇ as a pooling of interests in accordance with generally
accepted accounting principles ("GAAP") and applicable rules and regulations of
the Securities and Exchange Commission (the "SEC"). Subject to the terms and
conditions hereof, each party will use its best efforts and will take all
actions and do all things necessary or appropriate to obtain such accounting
treatment.
(e) The parties intend to structure the Merger so that it will be treated
for federal income tax purposes as a tax-free reorganization pursuant to
Section 368 of the Internal Revenue Code and, subject to the terms and
conditions hereof, each party will take all reasonable actions to obtain such
tax treatment.
1.2 Effect on Outstanding Shares of ▇▇▇▇▇ Common Stock; ADP Mergerco
Common Stock.
To effectuate the Merger, and subject to the terms and conditions of this
Agreement and the Plan, at the Effective Time:
(a) each share of ▇▇▇▇▇ common stock, par value $.0l per share (the
"▇▇▇▇▇ Common Stock"), which is issued and outstanding immediately prior to the
Effective Time shall be converted into and exchangeable for shares of common
stock, par value $.10 per share, of ADP ("ADP Common Stock") at the Exchange
Ratio and ADP shall issue to holders of ▇▇▇▇▇ Common Stock shares of ADP Common
Stock based on the Exchange Ratio in exchange for the outstanding shares of
▇▇▇▇▇ Common Stock, and pay cash in lieu of any fractional share as provided in
Section 1.5 hereof;
(b) each share of ▇▇▇▇▇ Common Stock held as treasury stock of ▇▇▇▇▇
immediately prior to the Effective Time shall be canceled, retired and cease
to exist, and no exchange or payment shall be made in respect thereof; and
(c) each share of common stock, par value $.01 per share, of ADP Mergerco
which is issued and outstanding immediately prior to the Effective Time shall
be converted into and become one validly issued, fully paid and nonassessable
share of common stock of the Surviving Corporation.
1.3 Exchange Ratio.
(a) If the Average ADP Stock Price is equal to or greater than $58.764
and less than or equal to $71.823, then the Exchange Ratio shall be (rounded to
the seventh decimal place) (i) $12.00, divided by (ii) the Average ADP Common
Stock Price (the "Exchange Ratio"). The "Average ADP Common Stock Price" means
the average of the daily closing sales prices of ADP Common Stock as reported
on the New York Stock Exchange ("NYSE") (as reported by The Wall Street Journal
or, if not reported thereby, as reported by another authoritative source as
mutually agreed by ADP and ▇▇▇▇▇) for the 10 consecutive full trading days
ending on the Determination Date. The "Determination Date" shall mean the
third business day immediately prior to the later of (i) the date (as
originally scheduled in the notice mailed to Sandy's shareholders, and without
giving effect to any adjournments or postponements) of the ▇▇▇▇▇
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meeting of shareholders to obtain the shareholder approval referred to in
Section 4.3 hereof and (ii) the date on which the last regulatory approval
required to consummate the Merger has been obtained and all statutory or
regulatory waiting periods in respect thereof have expired or been terminated.
(b) If the Average ADP Stock Price is less than $58.764, then the
Exchange Ratio shall be 0.2042054.
(c) If the Average ADP Stock Price is greater than $71.823, then the
Exchange Ratio shall be 0.1670771.
(d) If, from and including the date hereof through the Effective Time,
shares of ADP Common Stock shall be changed into a different number of shares
or a different class of shares by reason of any reclassification,
recapitalization, split-up, combination, exchange of shares or readjustment,
or if a stock dividend thereon shall be declared with a record date within
such period, then the computation of the Average ADP Common Stock Price shall
be appropriately and proportionately adjusted.
1.4 Rights of Holders of ▇▇▇▇▇ Common Stock; ADP Common Stock.
(a) At and after the Effective Time and until surrendered for exchange,
each outstanding stock certificate which immediately prior to the Effective
Time represented shares of ▇▇▇▇▇ Common Stock shall be deemed for all purposes,
except as contemplated by Section 1.6(c) to evidence ownership of and to
represent the number of whole shares of ADP Common Stock into which such shares
of ▇▇▇▇▇ Common Stock shall have been converted, and the record holder of such
outstanding certificate shall, after the Effective Time, be entitled to vote
the shares of ADP Common Stock into which such shares of ▇▇▇▇▇ Common Stock
shall have been converted on any matters on which the holders of record of ADP
Common Stock, as of any date subsequent to the Effective Time, shall be
entitled to vote. In any matters relating to such certificates theretofore
evidencing shares of outstanding ▇▇▇▇▇ Common Stock, ADP may rely conclusively
upon the record of shareholders maintained by ▇▇▇▇▇ containing the names and
addresses of the holders of record of ▇▇▇▇▇ Common Stock immediately prior to
the Effective Time.
(b) At and after the Effective Time, ADP shall reserve a sufficient
number of authorized but non-outstanding shares of ADP Common Stock for
issuance or exchange in connection with the conversion of ▇▇▇▇▇ Common Stock
into ADP Common Stock.
1.5 No Fractional Shares. No fractional shares of ADP Common Stock, and
no certificates representing such fractional shares, shall be issued upon the
surrender for exchange of certificates representing ▇▇▇▇▇ Common Stock. In
lieu of any fractional share, ADP shall pay to each holder of ▇▇▇▇▇ Common
Stock who otherwise would be entitled to receive a fractional share of ADP
Common Stock an amount of cash (without interest) determined by multiplying (a)
the Average ADP Common Stock Price times (b) the fractional share interest to
which such holder would otherwise be entitled.
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1.6 Procedure for Exchange of Stock.
(a) After the Effective Time, holders of certificates theretofore
evidencing outstanding shares of ▇▇▇▇▇ Common Stock, upon surrender of such
certificates to Chemical-Mellon Shareholder Services, as exchange agent (in
such capacity, the "Exchange Agent"), shall be entitled to receive, (i)
certificates representing the number of whole shares of ADP Common Stock into
which shares of ▇▇▇▇▇ Common Stock theretofore represented by the certificates
so surrendered shall have been converted as provided in Section 1.2(a) hereof
and (ii) cash payments in lieu of fractional shares, if any, as provided in
Section 1.5 hereof. As soon as practicable after the Effective Time, ADP shall
cause the Exchange Agent to mail appropriate and customary transmittal
materials (which shall specify that delivery shall be effected, and risk of
loss and title to the certificates theretofore representing shares of ▇▇▇▇▇
Common Stock shall pass, only upon proper delivery of such certificates to the
Exchange Agent) to each holder of ▇▇▇▇▇ Common Stock of record as of the
Effective Time advising such holder of the effectiveness of the Merger and the
procedure for surrendering to the Exchange Agent outstanding certificates
formerly evidencing ▇▇▇▇▇ Common Stock in exchange for new certificates for ADP
Common Stock and cash in lieu of fractional shares. ADP shall not be obligated
to deliver or cause the Exchange Agent to deliver the consideration to which
any former holder of shares of ▇▇▇▇▇ Common Stock is entitled as a result of
the Merger until such holder surrenders the certificate or certificates
representing such shares for exchange as provided in such transmittal materials
and this Section 1.6(a). Upon surrender to the Exchange Agent of a
certificate formerly representing shares of ▇▇▇▇▇ Common Stock, together with
duly executed transmittal materials, ADP shall promptly (i) issue or cause to
be issued to the persons entitled thereto a certificate representing the number
of whole shares of ADP Common Stock that such persons are entitled to receive
pursuant to Section 1.2 hereof and (ii) distribute or cause to be distributed
to the persons entitled thereto cash in lieu of fractional shares in the amount
determined pursuant to Section 1.5 hereof. Upon surrender, each certificate
theretofore evidencing ▇▇▇▇▇ Common Stock shall be cancelled. If any
certificate evidencing shares of ADP Common Stock is to be issued to a person
other than the person in whose name the certificate surrendered is registered,
it shall be a condition to the issuance of ADP Common Stock that the
certificate so surrendered shall be properly endorsed or be otherwise in proper
form for transfer and that the person requesting such exchange shall pay all
transfer or other taxes required by reason of the payment to a person other
than the registered holder of the certificate surrendered (or establish to the
satisfaction of ADP that such tax has been paid or is not applicable).
(b) At or promptly after the Effective Time, ADP shall deposit with the
Exchange Agent, for exchange in accordance with this Section 1.6, Certificates
representing the shares of ADP Common Stock and cash in lieu of fractional
shares (such certificates and cash are hereinafter referred to as the "Exchange
Fund") to be issued or paid by ADP pursuant to this Article 1 in connection
with the Merger. After the Effective Time, ADP shall, on each payment or
distribution date, tender to the Exchange Agent as an addition to the Exchange
Fund all dividends and other distributions applicable to certificates held in
the Exchange Fund.
(c) Until outstanding certificates formerly representing ▇▇▇▇▇ Common
Stock are surrendered as provided in Section 1.6(a) hereof, no dividend or
distribution payable to holders of record of ADP Common Stock shall be paid to
any holder of such outstanding certificates,
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but upon surrender of such outstanding certificates by such
holder there shall be paid to such holder out of the Exchange
Fund the amount of any dividends or distributions (without
interest) theretofore payable with respect to such whole shares
of ADP Common Stock, but not paid to such holder, and which
dividends or distributions had a record date occurring subsequent
to the Effective Time.
(d) After the Effective Time, there shall be no further
registration of transfers on the records of ▇▇▇▇▇ of outstanding
certificates formerly representing shares of ▇▇▇▇▇ Common Stock,
and if a certificate formerly representing such shares is
presented to ▇▇▇▇▇ or ADP, it shall be forwarded to the Exchange
Agent for cancellation and exchange for certificates representing
shares of ADP Common Stock as herein provided.
(e) All shares of ADP Common Stock and cash for any
fractional shares issued and paid upon the surrender for exchange
of certificates theretofore evidencing shares of ▇▇▇▇▇ Common
Stock in accordance with the above terms and conditions shall be
deemed to have been issued and paid in full satisfaction of all
rights pertaining to the underlying shares of ▇▇▇▇▇ Common Stock.
(f) Any portion of the Exchange Fund (including the
proceeds of any investments thereof or any ADP Common Stock) that
remains unclaimed by the holders of ▇▇▇▇▇ Common Stock for 12
months after the Effective Time shall be returned or repaid to
ADP. Any holders of certificates theretofore evidencing shares
of ▇▇▇▇▇ Common Stock who have not theretofore complied with this
Section 1.6 shall thereafter look only to ADP for payment of
their shares of ADP Common Stock, cash in lieu of fractional
shares and any unpaid dividends and distributions on the ADP
Common Stock deliverable in respect of each share of ▇▇▇▇▇ Common
Stock that such holder holds as determined pursuant to this
Agreement, in each case, without any interest thereon. If
outstanding certificates for shares of ▇▇▇▇▇ Common Stock are not
surrendered or the payment for them not claimed prior to the date
on which such payments would otherwise escheat to or become the
property of any governmental unit or agency the unclaimed items
shall, to the extent not prohibited by abandoned property and any
other applicable law, become the property of ADP (and to the
extent not in its possession shall be paid over to it), free and
clear of all claims or interest of any person previously entitled
to such claims. Notwithstanding the foregoing, none of ADP, the
Exchange Agent or any other person shall be liable to any former
holder of ▇▇▇▇▇ Common Stock for any amount delivered to a public
official pursuant to applicable abandoned property, escheat or
similar laws.
(g) In the event any certificate for ▇▇▇▇▇ Common Stock
shall have been lost, stolen or destroyed, the Exchange Agent
shall issue and pay in exchange for such lost, stolen or
destroyed certificate, upon the making of an affidavit of that
fact by the holder thereof, such shares of ADP Common Stock and
cash for fractional shares, if any, as may be required pursuant
to this Agreement, provided, however, that ADP, in its discretion
and as a condition precedent to the issuance and payment thereof,
may require the holder of such lost, stolen or destroyed
certificate to deliver a bond in such sum as it may direct as
indemnity against any claim that may be made against ADP, ▇▇▇▇▇,
the Exchange Agent or any other party with respect to the
certificate alleged to have been lost, stolen or destroyed.
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1.7 Stock Options.
(a) All stock options outstanding at the Effective Time (i)
under Sandy's 1985 Performance Incentive Plan, 1989 Performance
Incentive Plan or Director Stock Option Plan or (ii) pursuant to
the nonqualified stock option agreement dated August 8, 1988
between ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or the amended nonqualified
stock option agreement dated September 1, 1992 between ▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (collectively, the "▇▇▇▇▇ Options") shall, by
virtue of the Merger and without any action on the part of the
holders of such options, be converted into and become options to
purchase shares of ADP Common Stock ("Substitute Options") as
follows:
(i) each Substitute Option will cover the number of
shares of ADP Common Stock (rounded down to the nearest
whole share) which the holder of the ▇▇▇▇▇ Option being
replaced would have been entitled to receive in the Merger
had such holder exercised, immediately prior to the
Effective Time, the ▇▇▇▇▇ Option which the Substitute Option
is replacing;
(ii) each Substitute Option will be exercisable for a
purchase price per share (rounded down to the nearest cent)
determined by dividing (x) the purchase price per share of
▇▇▇▇▇ Common Stock payable upon exercise of the ▇▇▇▇▇ Option
which the Substitute Option replaced, multiplied by the
number of shares of ▇▇▇▇▇ Common Stock covered by the ▇▇▇▇▇
Option, by (y) the number of shares of ADP shares of ▇▇▇▇▇
Common Stock covered by the Substitute Option, as determined
in accordance with clause (i) above; and
(iii) each Substitute Option will be exercisable,
over each time period during which the ▇▇▇▇▇ Option it
replaced would have been exercisable (taking into account
any acceleration in vesting brought about by the Merger),
with respect to that number of shares of ADP Common Stock
(rounded down to the nearest whole share) determined by
multiplying (x) the number of shares of ▇▇▇▇▇ Common Stock
with respect to which the ▇▇▇▇▇ Option would have been
exercisable during that time period by (y) a fraction, the
numerator of which is the total number of shares of ADP
Common Stock covered by the Substitute Option and the
denominator of which is the total number of shares of ▇▇▇▇▇
Common Stock covered by the replaced ▇▇▇▇▇ Option.
(b) Subject to the foregoing requirements, the terms of
each Substitute Option will be substantially equivalent to the
terms of the ▇▇▇▇▇ Option that it replaces.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF ADP MERGERCO AND ADP
ADP Mergerco and ADP hereby jointly and severally represent
and warrant to ▇▇▇▇▇ as follows (with the understanding that
▇▇▇▇▇ is relying materially on each representation and warranty
in entering into and performing this Agreement):
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2.1 Due Organization. ADP Mergerco and ADP are
corporations validly existing and in good standing under the laws
of the State of Michigan and the State of Delaware, respectively,
and have full power and authority and are entitled to own or
lease their properties and to carry on their business as, and in
the places where, such properties are owned or leased and such
business is conducted.
2.2 Due Authorization. ADP Mergerco and ADP have full
power and authority to enter into and perform their obligations
under this Agreement and each agreement, instrument and document
required to be executed by ADP Mergerco or ADP in accordance with
this Agreement. The execution, delivery, and performance by ADP
Mergerco and ADP of this Agreement and the agreements, documents,
and instruments required to be executed and delivered by ADP
Mergerco and ADP in accordance with this Agreement (i) have been
duly authorized by the Boards of Directors of ADP Mergerco and
ADP, respectively, and (ii) do not require the consent of the
shareholders of ADP. This Agreement has been and the agreements,
documents, and instruments required to be executed and delivered
by ADP Mergerco and ADP in accordance with this Agreement on the
Closing Date will have been duly and validly executed and
delivered by ADP Mergerco and ADP and constitute, or will
constitute, valid and binding obligations of ADP Mergerco and
ADP, enforceable against ADP Mergerco and ADP in accordance with
their respective terms, except that (i) such validity, binding
effect and enforceability may be subject to applicable
bankruptcy, insolvency, fraudulent transfer, or other laws, now
or hereafter in effect, affecting creditors' rights generally,
and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable
defenses (including commercial reasonableness, good faith, and
fair dealing) and to the discretion of the court before which any
proceeding therefor may be brought. None of the execution,
delivery or performance of this Agreement or any other agreement,
instrument, or document to be executed by ADP Mergerco or ADP in
accordance with this Agreement will (a) violate any foreign,
federal, state, county, or local law, rule, or regulation or any
order, writ, injunction, or decree of any court, agency or
governmental body applicable to ADP Mergerco or ADP or their
properties, (b) violate or conflict with, or permit the
cancellation of, any agreement to which ADP Mergerco or ADP is a
party, or by which either of them or any of their properties are
bound, or result in the creation of any lien, security interest,
charge, or encumbrance upon any of such properties, or (c)
violate or conflict with any provision of the Certificate of
Incorporation or the Bylaws of either ADP Mergerco or ADP.
2.3 Assets and Liabilities. ADP has good and marketable
title to, or a valid leasehold or other possessory interest in,
the properties and assets (the "Assets") owned or used by it,
located on its premises, or shown on the ADP Financial Statements
or acquired after March 31, 1995, except for properties and
assets disposed of in the ordinary course of business, consistent
with past practice, since March 31, 1995. ADP does not have any
obligations or liabilities, absolute or contingent, including
without limitation, mortgages, liens, pledges, charges,
encumbrances or other third party security interests
("Liabilities"), except for those Liabilities which have been (i)
reflected and appropriately reserved against in accordance with
GAAP consistently applied in the ADP Financial Statements or (ii)
incurred in the ordinary course of business, consistent with past
practice, after March 31, 1995.
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2.4 Compliance with Laws. To ADP's knowledge, ADP and its use and
occupancy of its Assets and properties, wherever located, have complied,
and are complying, with all foreign, federal, state, county, and local laws,
regulations, and orders that are applicable to ADP's business, and ADP has
filed with the proper authorities all statements and reports required by the
laws, regulations, and orders to which it or its properties or operations are
subject, except where such noncompliance or failure to file, individually
and/or in the aggregate, would not have a MAE. When used with respect to ADP
or ▇▇▇▇▇, "▇▇▇" means any material adverse effect on the financial condition,
assets, liabilities, results of operations or business of ADP and its
subsidiaries or ▇▇▇▇▇ and its subsidiary, as the case may be, in each case
taken as a whole. No claim has been made by any governmental authority (and,
to the best of ADP's knowledge, no such claim is anticipated) to the effect
that the business conducted by ADP fails to comply with any law, rule,
regulation, or ordinance, except for any such noncompliance which would not
have a MAE. Without limiting the foregoing, ADP has complied with all judicial
and governmental requirements relating to pollution and environmental control
and regulation and employee health and safety including, but not limited to,
laws, rules, regulations, ordinances, and orders related to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
handling, presence, emission, discharge, release, or threatened release into or
on the air, land, surface, water, groundwater, personal property, or
structures, wherever located, of any contaminants, hazardous materials,
hazardous or toxic substances, or wastes as defined under any federal, state,
or local laws, regulations, or ordinances, except for any such noncompliance
which would not have a MAE.
2.5 Claims and Proceedings. There are no claims, actions, suits,
proceedings, or investigations pending or, to the best of ADP Mergerco's
and ADP's knowledge, threatened against or affecting ADP Mergerco or ADP
or any of their Assets, at law or in equity, or before or by any court,
municipal, or other governmental department, commission, board, agency,
instrumentality, except (a) those claims, actions, suits, or proceedings or
investigations which, if concluded in a manner adverse to
ADP or ADP Mergerco, would not have a MAE or (b) as set forth in any of
the ADP SEC Filings or the ADP Financial Statements. No inquiry,
action, or proceeding has been instituted or, to the best of ADP
Mergerco's and ADP's knowledge, threatened to restrain or prohibit the
carrying out of the transactions contemplated by this Agreement or to
challenge the validity of any part of such transactions or seeking
damages on account thereof.
2.6 Financial Statements and Reports. ADP has previously furnished
▇▇▇▇▇ with true and correct copies (with exhibits) of (a) its Annual Report on
Form 10-K for the fiscal year ended June 30, 1994, as filed with the SEC; (b)
its Quarterly Reports on Form 10-Q for the three, six and nine months ended
September 30, 1994, December 31, 1994 and March 31, 1995, as filed with the
SEC; (c) the definitive proxy statements relating to all meetings of its
shareholders during the three years preceding the date of this Agreement; and
(d) all other reports and registration statements filed by ADP with the SEC
since June 30, 1992 (collectively, the "ADP SEC Filings"). As of their
respective dates, the ADP SEC Filings did not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, except any such statement or omission therein which has been
corrected or otherwise disclosed or updated in a subsequent filing with the
SEC. Since June 30, 1991, ADP has filed with the
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SEC all reports and registration statements and all other filings required to
be filed with the SEC under the rules and regulations of the SEC. ADP has also
delivered to ▇▇▇▇▇ a complete and correct copy of ADP's audited financial
statements for the three year period ended June 30, 1994, audited by Deloitte &
Touche, LLP, certified public accountants, and ADP's unaudited balance sheets,
statements of cash flows, and earnings statements at and for the three-month,
six-month and nine-month periods ended September 30, 1994, December 31, 1994
and March 31, 1995 (which unaudited balance sheets, statements of cash flows,
and earnings statements may be subject to normal recurring year-end and audit
adjustments, which, in the aggregate are not reasonably expected to be
material) (the "ADP Financial Statements"). The ADP Financial Statements have
been prepared in accordance with GAAP applied on a consistent basis with prior
periods and each of the ADP Financial Statements fairly presents in all
material respects the financial position, results of operations, or changes in
financial position, as the case may be, of ADP as of the indicated date or for
the indicated period. Since June 30, 1994, there has been no material adverse
change in the financial condition, assets, liabilities, results of operations
or business of ADP and its subsidiaries taken as a whole.
2.7 Capitalization. The authorized capital stock of ADP consists of
(i) 500,000,000 shares of ADP Common Stock, of which 143,826,080 shares were
issued and outstanding as of July 31, 1995 and (ii) 300,000 shares of preferred
stock, par value $1.00 per share, of which no shares are issued and outstanding
as of the date hereof. All issued and outstanding shares of ADP Common Stock
were validly issued and are fully paid and non-assessable and free of
preemptive rights, and 13,291,336 shares were held by ADP in its treasury as of
July 31, 1995.
2.8 ADP Common Stock. The shares of ADP Common Stock to be delivered
in connection with the Merger (i) have been duly authorized and when delivered
pursuant to this Agreement, will be validly issued, fully paid and
non-assessable, and (ii) will be covered by an effective registration statement
on Form S-4, pursuant to which the issuance of such shares of ADP Common Stock
to Sandy's shareholders will be registered.
2.9 Options. Except (i) as disclosed in the ADP SEC Filings, (ii) for
stock options granted after March 31, 1995 in the ordinary course of business
pursuant to ADP's stock option plans, and (iii) for commitments to issue an
immaterial number of shares of ADP Common Stock in connection with acquisitions
completed prior to the date hereof, there are no outstanding options, rights
(including stock appreciation and similar rights), warrants, calls or
commitments (including, without limitation, any statutory or other legal
commitments) relating to ADP's capital stock or obligating ADP to issue or
dispose of any shares of its capital stock.
2.10 Additional Rights. Except as contemplated hereby, the
consummation of the Merger will not obligate ADP to issue any additional equity
interest in ADP, to declare any dividend or make any distributions of any
property or assets, or to redeem, purchase, acquire, or offer to acquire any
shares of capital stock of ADP in accordance with the Certificate of
Incorporation of ADP or any contract or agreement to which ADP is a party.
2.11 Dividends and Stock Purchases. Except (i) as disclosed in the ADP
SEC Filings, (ii) for regular quarterly dividends and (iii) for repurchases of
shares pursuant to ADP's Board of Directors' approved repurchase program, from
March 1, 1994 through the date of this
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Agreement, ADP has not declared, set aside or made payment of any dividend or
distribution of assets to the holders of ADP Common Stock, nor has it
repurchased any shares of ADP Common Stock.
2.12 Shareholder Notice. The Registration Statement will not, at the
time it becomes effective, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, except that
no representation is made by ADP with respect to information supplied by ▇▇▇▇▇
or any Affiliate thereof which relates to ▇▇▇▇▇ or any Affiliate or associate
of ▇▇▇▇▇.
2.13 Brokers and Finders. ADP has not caused any liability to be
incurred to any finder, broker, or sales agent in connection with the
execution, delivery, or performance of, or the transactions contemplated by,
this Agreement.
2.14 Reorganization. It is the present intention of ADP to continue
at least one significant historic business line of ▇▇▇▇▇ after the Merger, or
to use at least a significant portion of Sandy's historic business assets in a
business after the Merger, in each case within the meaning of Treas. Reg
Section 1.368-1(d).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇
▇▇▇▇▇ hereby represents and warrants to ADP Mergerco and ADP as follows
(with the understanding that ADP Mergerco and ADP are relying materially on
each such representation and warranty in entering into and performing this
Agreement) (for purposes of this Article 3, the term "▇▇▇▇▇" shall mean ▇▇▇▇▇
Corporation and its subsidiary):
3.1 Due Organization. ▇▇▇▇▇ is a corporation validly existing and
in good standing under the laws of the State of Michigan, and has full power
and authority to own or lease its properties and to carry on its business as,
and in the places where, such properties are owned or leased and such business
is now conducted. ▇▇▇▇▇ is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction in which the character
of its properties owned or leased or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not
have a MAE. ▇▇▇▇▇ has previously delivered to ADP true and correct copies of
Sandy's Articles of Incorporation and Bylaws as in effect on the date hereof.
3.2 Due Authorization. ▇▇▇▇▇ has full power and authority to enter
into and perform its obligations under this Agreement and each agreement,
instrument, and document required to be executed by ▇▇▇▇▇ in accordance with
this Agreement, subject to approval of its shareholders. This Agreement has
been, and the agreements, documents and instruments required to be executed and
delivered by ▇▇▇▇▇ in accordance with this Agreement on the Closing Date will
have been, duly and validly authorized, executed and delivered by ▇▇▇▇▇, and
constitute, or will
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constitute, valid and binding obligations of ▇▇▇▇▇, enforceable against ▇▇▇▇▇
in accordance with their respective terms, except that (i) such validity,
binding effect and enforceability may be subject to applicable bankruptcy,
insolvency, fraudulent transfer, or other laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses (including commercial reasonableness, good faith, and
fair dealing) and to the discretion of the court before which any proceeding
therefor may be brought. None of the execution, delivery, or performance of
this Agreement or any other agreement, instrument, or document to be executed
by ▇▇▇▇▇ in accordance with this Agreement will, (a) violate any foreign,
federal, state, county, or local law, rule, or regulation or any order, writ,
injunction, or decree of any court, agency or governmental body applicable to
▇▇▇▇▇ or any of their properties, (b) violate or conflict with, or permit the
cancellation of, any agreement to which ▇▇▇▇▇ is a party, or by which it or any
of its properties are bound, or result in the creation of any lien, security
interest, charge, or encumbrance upon any of such properties, or (c) violate or
conflict with any provision of the Articles of Incorporation or the Bylaws of
▇▇▇▇▇.
3.3 No Consents. Except as described on Schedule 3.3 and except
for (a) the approval of the transaction by Sandy's shareholders under the
provisions of the MBCA, (b) filings made pursuant to the Exchange Act and the
rules and regulations promulgated thereunder, (c) the filing of premerger
notification, and the expiration or early termination of the waiting period
required under, the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR") and (d) the filing of a Certificate of Merger with the
Department of Commerce of the State of Michigan, no consent or approval of any
governmental agency and no material consent or approval of any third party is
required in order for ▇▇▇▇▇ to enter into and perform this Agreement or any
agreement, instrument, or document executed or to be executed by ▇▇▇▇▇ in
accordance with this Agreement.
3.4 Assets and Liabilities. ▇▇▇▇▇ has good and marketable title
to, or a valid leasehold or other possessory interest in, the Assets owned or
used by it, located on its premises, or shown on the ▇▇▇▇▇ Financial Statements
or acquired after May 31, 1995, except for properties and assets disposed of in
the ordinary course of business, consistent with past practice, since May 31,
1995. ▇▇▇▇▇ does not have any Liabilities, except for those Liabilities which
have been (i) reflected and appropriately reserved against in accordance with
GAAP consistently applied in the Financial Statements or (ii) incurred in the
ordinary course of business, consistent with past practice, after May 31, 1995.
3.5 Properties. The operation of the properties and business of
▇▇▇▇▇ in the manner in which they are now operated does not violate any zoning
ordinances, municipal regulations, or other rules, regulations, or laws, except
for violations which would not have a MAE. No covenants, easements,
rights-of-way, or regulations impair in any material respect the use of Sandy's
Assets for the purposes for which they are now operated. There are no pending
or, to the best of Sandy's knowledge, threatened condemnation or similar
proceedings or assessments affecting its Assets.
3.6 Licenses and Permits. ▇▇▇▇▇ has obtained all licenses, permits
and other authorizations, and has taken all actions, necessary to comply in all
material respects with
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applicable laws or governmental regulations in connection with its business as
now conducted. Schedule 3.6 lists all foreign, federal, state, county, and
local governmental licenses, authorizations, accreditations, certificates,
permits, and orders held or applied for by ▇▇▇▇▇ which are material to the
conduct of the business of ▇▇▇▇▇, taken as a whole. ▇▇▇▇▇ has complied, and is
complying, in all material respects with the terms and conditions of all such
licenses, authorizations, accreditations, certificates, permits, and orders,
and no material violation of any such licenses, authorizations, accreditations,
certificates, permits, or orders, or the laws or rules governing the issuance
or continued validity thereof, has occurred. No claim has been made by any
governmental authority (and, to the best knowledge of ▇▇▇▇▇, no such claim is
anticipated) to the effect that any license, authorization, accreditation,
certificate, permit, or order in addition to those listed on Schedule 3.6 is
necessary with respect to the business conducted by ▇▇▇▇▇.
3.7 Intellectual Rights. Schedule 3.7 lists all trademarks and
service marks (registered or unregistered), trade names, patents and copyrights
and applications therefor, and other intellectual property owned or used by or
registered in the name of ▇▇▇▇▇ or in which ▇▇▇▇▇ has any right, license, or
interest which are material to the business conducted by ▇▇▇▇▇. Except for the
documents listed on Schedule 3.7, ▇▇▇▇▇ is not a party to any license
agreements, either as licensor or licensee, with respect to any trademarks,
service marks, trade names, patents or copyrights or applications therefor,
trade secrets, know-how, processes or other intellectual property which are
material to the business conducted by ▇▇▇▇▇. ▇▇▇▇▇ has good and marketable
title to or the right to use such assets and all inventions, processes,
designs, formulae, trade secrets, and know-how necessary for the conduct of
Sandy's business, without the payment of any royalty or similar payment. To
the best of Sandy's knowledge, ▇▇▇▇▇ is not infringing any patent, trademark,
service ▇▇▇▇, trade name, copyright, trade secret, know-how, process or other
intellectual property rights of others and there are no infringements by others
of any such rights owned by or licensed to ▇▇▇▇▇. No patents, trademarks and
service marks, trade names, copyrights, trade secrets, know-how, processes or
other intellectual property rights or interest therein or license thereof,
other than those set forth in Section 3.7, are necessary for the conduct of
Sandy's business as now conducted.
3.8 Compliance with Laws. To Sandy's knowledge, subject to the
matters discussed in Section 3.14 hereof, ▇▇▇▇▇ and its use and occupancy of
its Assets and properties, wherever located, have complied, and are complying,
with all foreign, federal, state, county, and local laws, regulations, and
orders that are applicable to its business and has filed with the proper
authorities all statements and reports required by the laws, regulations, and
orders to which it or its properties or operations are subject, except where
such noncompliance or failure to file, individually and/or in the aggregate,
would not have a MAE. No claim has been made by any governmental authority
(and, to the best of Sandy's knowledge, no such claim is anticipated) to the
effect that the business conducted by ▇▇▇▇▇ fails to comply with any law, rule,
regulation, or ordinance, except for any such noncompliance which would not
have a MAE. Without limiting the foregoing, ▇▇▇▇▇ has complied with all
judicial and governmental requirements relating to pollution and environmental
control and regulation and employee health and safety including, but not
limited to, laws, rules, regulations, ordinances, and orders related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, handling, presence, emission, discharge, release, or threatened
release into or on the air, land, surface,
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water, groundwater, personal property, or structures, wherever located, of any
contaminants, hazardous materials, hazardous or toxic substances, or wastes as
defined under any federal, state, or local laws, regulations, or ordinances,
except for any such noncompliance which would not have a MAE.
3.9 Employee Plans.
(a) ▇▇▇▇▇ does not maintain or have any actual or potential
liability or obligation with respect to any employee benefit, policy,
arrangement or agreement (including without limitation, any savings,
retirement, fringe benefit, stock option, bonus, incentive compensation,
deferred compensation, excess, supplemental executive compensation, employee
stock purchase, vacation, sickness or disability, severance or separation,
restricted stock plan, policy or arrangement) or employment or consulting
contracts or agreements (including without limitation, any "employee benefit
plan," as defined in the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), whether or not subject to ERISA, whether written or oral
("Employee Plans"), other than those set forth on Schedule 3.9(a). With
respect to each Employee Plan, ▇▇▇▇▇ has heretofore delivered to ADP true and
complete copies of the following documents, where applicable: (i) the text of
the Employee Plan (including any amendments thereto) and of any trust or
insurance contract maintained in connection therewith, (ii) the three most
recent annual reports (IRS Form 5500 series), together with required schedules
filed with the IRS and any financial statements or opinions required under
ERISA, (iii) the most recent summary plan description and all modifications,
and (iv) the most recent determination letter issued by the Internal Revenue
Service ("IRS").
(b) Neither ▇▇▇▇▇ nor any corporation or other trade or business
which is or has been under common control with ▇▇▇▇▇ (as determined under
Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
amended (the "Code")) has ever maintained, contributed to or incurred any
obligation or liability with respect to (i) any "multiemployer plan", as
defined in Section 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code
(either as an employer or a joint employer) or (ii) any other plan covered by
Title IV of ERISA or subject to the requirements of Section 412 of the Code and
▇▇▇▇▇ has no actual or contingent liability under Title IV of ERISA or Section
412 of the Code to any person or entity, including the Pension Benefit Guaranty
Corporation, the IRS, any such plan or the participants (or their
beneficiaries) in any such plan and there is no basis for any such liability as
the result of or after the consummation of the transactions contemplated by
this Agreement.
(c) Each Employee Plan that is intended to be qualified under Section
401 of the Code is, to Sandy's best knowledge, so qualified and has been so
qualified during the period from its adoption to date, and each trust forming a
part thereof is exempt from tax pursuant to Section 501 of the Code and all
contributions made thereto have been deductible by ▇▇▇▇▇. A favorable
determination letter has been issued by the IRS with respect to each such plan
and trust, which letter includes a determination with respect to the
qualification of the plan under the Tax Reform Act of 1986 and subsequent tax
legislation (or if such letter has not yet been received, an application has
been made to the IRS for such determination within the remedial amendment
period so that such letter will have retroactive effect to the effective date
of such legislation) and
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there are no facts and nothing has occurred that would adversely affect the
qualification of such plan.
(d) No Employee Plan is a "voluntary employees" beneficiary
association" within the meaning of Section 501(c)(9) of the Code and there have
been no other "welfare benefit funds" within the meaning of Section 419 of the
Code relating to Employees. Except as set forth on Schedule 3.9(d), no
Employee Plan provides health, dental, life insurance or other welfare benefits
(whether on an insured or self-insured basis) to Employees after their
retirement or other termination of employment from ▇▇▇▇▇ (other than
continuation coverage required under Section 601 through 609 of ERISA and
Section 4980B of the Code which may be purchased at the sole expense of the
Employee).
(e) To Sandy's best knowledge, each Employee Plan has, in all
material respects, been maintained and administered in compliance with its
terms and with the requirements prescribed by any and all statutes, orders,
rules and regulations, including, but not limited to, ERISA and the Code, which
are applicable to such plan and there is no audit, investigation, dispute,
arbitration, claim, suit, or grievance, pending or threatened, involving an
Employee Plan (other than routine claims for benefits), and, to the best
knowledge of ▇▇▇▇▇, there is no basis for such a claim. To Sandy's best
knowledge, there have been no "prohibited transactions" (within the meaning of
Section 4975 of the Code or Section 406 of ERISA) with respect to any Employee
Plan.
(f) All contributions have been, or prior to the Effective Time
will be, made under, and all obligations to Employees (including vacation
entitlements) have been, or prior to the Effective Time will be, satisfied with
respect to, each Employee Plan for all periods up to the Effective Time, except
as shown in the Financial Statements. Except as disclosed in Schedule 3.9(f),
the costs of all Employee Plans are fully accrued and reflected in the
Financial Statements.
(g) Except as otherwise indicated on Schedule 3.9(g), none of the
Employee Plans provides for the payment of separation, severance, termination
or similar-type benefits to any person or the acceleration of any rights to
benefits under any Employee Plan or obligates ▇▇▇▇▇ to pay separation,
severance, termination or similar-type benefits solely as a result of any
transaction contemplated by this Agreement or as a result of a "change in
control" (within the meaning of such term under Section 280G of the Code).
3.10 Contracts and Agreements. Schedule 3.10A sets forth a complete
and accurate list of all written or oral contracts, commitments, leases, and
other agreements, to which ▇▇▇▇▇ is a party or by which it or its properties or
assets may be bound which (a) relate to the leasing of real property, (b)
provide for payments in any one year in excess of $100,000 or (c) are otherwise
material to the operation of Sandy's business. ▇▇▇▇▇ has afforded to ADP and
its officers, attorneys, and other representatives the opportunity to review
complete and correct copies of all such contracts, commitments, leases, and
other agreements to which ▇▇▇▇▇ is a party or by which ▇▇▇▇▇ or its properties
are bound. ▇▇▇▇▇ is not and, to the best of Sandy's knowledge, no other party
thereto is, in default (and no event has occurred which, with the passage of
time or the giving of notice, or both, would constitute a default) under any
contract,
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commitment, lease, or other agreement to which ▇▇▇▇▇ is a party or by which it
or its properties or assets may be bound, and ▇▇▇▇▇ has not waived any
material right under any such contract, commitment, lease, or other agreement.
▇▇▇▇▇ has not received any notice of default or termination under any such
contract, commitment, lease, or other agreement, and ▇▇▇▇▇ has not assigned or
otherwise transferred any rights under any such contract, commitment, lease, or
other agreement. As of July 31, 1995, there were no written or oral contracts,
commitments, or other agreements pursuant to which or in connection with which
▇▇▇▇▇ has accepted payment of more than $50,000 for services or goods yet to be
performed or provided by ▇▇▇▇▇ to a third party other than those set forth in
Schedule 3.10B (including a list of such contracts, commitments or
agreements).
3.11 Claims and Proceedings. There are no claims, actions, suits,
proceedings, or investigations pending against or affecting ▇▇▇▇▇ or any of its
Assets or against or affecting any Employee Plans or any fiduciary for or
assets of any such plans, at law or in equity, or before or by any court,
municipal, or other governmental department, commission, board, agency, or
instrumentality, nor is there any reasonable basis for any such claims, suits,
proceeding or investigations, except as set forth in Schedule 3.11 and except
for claims, actions, suits, proceedings or investigations which (i) are filed
or instituted after the date hereof and (ii) seek damages or other amounts
(including costs and expenses) in an amount less than $50,000, individually, or
$100,000, in the aggregate. No inquiry, action, or proceeding has been
instituted to restrain or prohibit the carrying out of the transactions
contemplated by this Agreement or to challenge the validity of any part of such
transactions or seeking damages on account thereof, nor is there any reasonable
basis for any such inquiry, action or proceeding.
3.12 Insurance. Schedule 3.12 lists all policies of insurance, other
than title insurance policies, held by or on behalf of ▇▇▇▇▇ and each
outstanding claim thereunder in excess of $10,000. All policies of insurance
set forth on Schedule 3.12 are in full force and effect, and no notice of
cancellation has been received or, to Sandy's knowledge, has been sent by the
insurance carrier thereof. In the reasonable judgment of Sandy's management,
the policies are in amounts which are adequate in relation to the business and
properties of ▇▇▇▇▇ (but in any event in amounts not less than the amounts
generally purchased by other similar businesses), and all premiums to date have
been paid in full.
3.13 Financial Statements and Reports. ▇▇▇▇▇ has previously
furnished ADP with true and correct copies (with exhibits) of (a) its Annual
Report on Form 10-K for the fiscal year ended August 31, 1994, as filed with
the SEC; (b) its Quarterly Reports on Form 10-Q for the three months ended
November 30, 1994, February 28, 1995 and May 31, 1995, as filed with the SEC;
(c) all of its Current Reports on Form 8-K filed with the SEC subsequent to
August 31, 1994; (d) the definitive proxy statements relating to all meetings
of its shareholders during the three years preceding the date of this
Agreement; and (e) all other reports and registration statements filed by ▇▇▇▇▇
with the SEC since August 31, 1992 (collectively, the "▇▇▇▇▇ SEC Filings"). As
of their respective dates, the ▇▇▇▇▇ SEC Filings did not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading, except any such statement or omission therein which has
been corrected or otherwise disclosed or updated in a subsequent filing with
the SEC. Since August 31, 1991, ▇▇▇▇▇ has filed with the SEC all
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reports and registration statements and all other filings required to be filed
with the SEC under the rules and regulations of the SEC. ▇▇▇▇▇ has also
delivered to ADP a complete and correct copy of Sandy's audited financial
statements for the three year period ended August 31, 1994, audited by
Deloitte & Touche, LLP, certified public accountants, and Sandy's unaudited
balance sheet, statement of cash flows, and income statement at and for the
nine-month period ended May 31, 1995 (which unaudited balance sheet, statement
of cash flows, and income statement may be subject to normnal recurring
year-end and audit adjustments, which, in the aggregate are not reasonably
expected to be material) (the "▇▇▇▇▇ Financial Statements"). The ▇▇▇▇▇
Financial Statements have been prepared in accordance with GAAP applied on a
consistent basis with prior periods and each of the ▇▇▇▇▇ Financial Statements
fairly presents in all material respects the financial position, results of
operations, or changes in financial position, as the case may be, of ▇▇▇▇▇ as
of the indicated date or for the indicated period. Since August 31, 1994,
except for expenses incurred in connection with the transactions contemplated
by this Agreement and in connection with the consideration of a transaction
with ▇▇▇▇▇▇▇▇ Communications, Inc. ("▇▇▇▇▇▇▇▇"), there has been no material
adverse change in the financial position, assets, liabilities, results of
operations or business of ▇▇▇▇▇ and its subsidiaries taken as a whole. A true
and complete list of all expenses heretofore incurred and hereafter expected to
be incurred by ▇▇▇▇▇ in connection with the transactions contemplated hereby
and in connection with the consideration of a transaction with ▇▇▇▇▇▇▇▇ is
contained in Schedule 3.13.
3.14 Taxes. Except as set forth on Schedule 3.14A, all federal,
foreign, state, county, and local tax (including, without limitation, income,
gross receipts, excise, property, franchise, license, sales, use, withholding,
estimated, occupancy, capital, profits, employment, unemployment compensation,
payroll related, import duties and other governmental charges and assessments),
whether or not measured in whole or in part by net income, and including
deficiencies, interest, additions to tax or interest, and penalties with
respect thereto, and including expenses associated with contesting any proposed
adjustment related to any of the foregoing (collectively, "Taxes" or,
individually, a "Tax") returns, reports, and declarations of estimated tax
(collectively, "Returns" or, individually a "Return") which were required to be
filed by ▇▇▇▇▇ on or before the date hereof have been filed within the time and
in the manner provided by law, and all such Returns are true and correct and
accurately reflect, in all material respects, the Tax liabilities of ▇▇▇▇▇.
All Returns required to be filed by ▇▇▇▇▇ after the date hereof and on or
before the Effective Time shall be prepared and timely filed, in a manner
consistent with prior years and applicable laws and regulations. All Taxes
required to be paid on or before the date hereof have been timely paid or
adequately accrued in the Financial Statements. Any Taxes required to be paid
after the date hereof and on or before the Effective Time shall be timely paid.
Schedule 3.14B lists all of the jurisdictions in which ▇▇▇▇▇ has filed Returns
during the 1994, 1993 and 1992 calendar years. ▇▇▇▇▇ has provided to ADP true
and complete copies of all such Returns. Except as set forth on Schedule
3.14C, ▇▇▇▇▇ has not executed any presently effective waiver or extension of
any statute of limitations against assessments and collections of Taxes. There
are no current, pending or, to the best of Sandy's knowledge, threatened,
claims, assessments, notices, proposals to assess, deficiencies, or audits
(collectively, "▇▇▇▇▇ Tax Actions") with respect to any Taxes owed or allegedly
owed by ▇▇▇▇▇ which remain unpaid and for which, in the reasonable judgment of
Sandy's management, adequate provision has not been made in the Financial
Statements. Except as set forth on Schedule 3.14D, to the best of Sandy's
knowledge, there is no basis for any ▇▇▇▇▇ Tax Actions.
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There are no tax liens on any of the assets of ▇▇▇▇▇ except for liens for
current taxes not yet due and payable. Except as set forth on Schedule 3.14D,
proper and accurate amounts (other than immaterial amounts) have been withheld
and remitted by ▇▇▇▇▇ from and in respect of its Employees for all periods in
full and complete compliance in all material respects with the tax withholding
provisions of all applicable laws and regulations. ▇▇▇▇▇ is, and since 1986
has been, a C corporation as defined in Section 1361 of the Code. ▇▇▇▇▇ has
not agreed to nor is ▇▇▇▇▇ required to make any adjustments under Section
481(a) of the Code by reason of change in accounting method or otherwise. ▇▇▇▇▇
has not been nor is a party to any tax sharing agreement.
3.15 Business Relations. Except as set forth on Schedule 3.15, to
the knowledge of ▇▇▇▇▇, since August 31, 1994, ▇▇▇▇▇ has not received notice
that any customer, client, or supplier of ▇▇▇▇▇ will cease or otherwise refuse
to do business with ▇▇▇▇▇ in the same manner as such business had been
previously conducted with ▇▇▇▇▇.
3.16 Brokers and Finders. ▇▇▇▇▇ has not caused any liability to be
incurred to any finder, broker, or sales agent in connection with the
execution, delivery, or performance of, or the transactions contemplated by,
this Agreement, except for fees not to exceed $500,000 paid or to be paid to
its financial advisor, Bear, ▇▇▇▇▇▇▇ & Co., Inc. ("Bear, ▇▇▇▇▇▇▇"), for which
▇▇▇▇▇ will be responsible. ▇▇▇▇▇ has heretofore delivered to ADP a true and
complete copy of the agreement(s) pursuant to which Bear, ▇▇▇▇▇▇▇ has provided
and will provide service to ▇▇▇▇▇ in connection with the transactions
contemplated by this Agreement.
3.17 Notes and Accounts Receivable. Schedule 3.l7 lists all of the
notes and accounts receivable of ▇▇▇▇▇ at May 31, 1995. Except as listed on
Schedule 3.17, (a) all of the notes and accounts receivable are free and clear
of any security interests, liens, encumbrances, or other charges and are,
in the reasonable judgment of Sandy's management, adequately reserved for on
Sandy's balance sheet as of May 31, 1995; (b) to the best of Sandy's knowledge,
none of the notes or accounts receivable is subject to any offset or claims of
offset, other than normal credits and returns in the ordinary course of
business; and (c) none of the obligors on the notes or accounts receivable has
given notice that they will or may refuse to pay the full amount thereof or
any portion thereof. This Section 3.17 does not constitute a warranty by ▇▇▇▇▇
that any of the notes or accounts receivable will be collected by ▇▇▇▇▇
following the transactions contemplated hereby.
3.18 Information Furnished to ADP. ▇▇▇▇▇ has made available to ADP
and its officers, attorneys, accountants, and representatives true and correct
copies of all agreements, documents, and other items listed on the schedules to
this Agreement and all books and records of ▇▇▇▇▇. The books and records of
▇▇▇▇▇ accurately reflect in all material respects the transactions to which
▇▇▇▇▇ is a party or by which its properties are subject or bound.
3.19 Capitalization. The authorized capital stock of ▇▇▇▇▇ consists
of 8,000,000 shares of ▇▇▇▇▇ Common Stock and 2,000,000 shares of preferred
stock, $.0l par value per share, of which 2,326,783 shares of ▇▇▇▇▇ Common
Stock and no shares of preferred stock are issued and outstanding as of the
date hereof. Each share of ▇▇▇▇▇ Common Stock is entitled to one vote for
purposes of approving the Merger. All issued and outstanding shares of ▇▇▇▇▇
Common
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Stock were validly issued and are fully paid and nonassessable and free of
preemptive rights, and no shares are held by ▇▇▇▇▇ in its treasury. 146,000
shares of ▇▇▇▇▇ Common Stock, and no shares of preferred stock, are reserved
for issuance upon the exercise of outstanding ▇▇▇▇▇ Options as of the date
hereof.
3.20 Options. Except as set forth on Schedule 3.20(a) there are
no outstanding options , rights (including stock appreciation and similar
rights), warrants, Calls, commitments (including, without limitation, any
statutory or other legal commitments) or written agreements relating to Sandy's
capital stock or obligating ▇▇▇▇▇ to issue or dispose of any shares of its
capital stock.
3.21 ▇▇▇▇▇ Dividends and Stock Purchases. Except as set forth on
Schedule 3.21, since March 31, 1994, ▇▇▇▇▇ has not declared, set aside or made
payment of any dividend or distribution of assets to the holders of ▇▇▇▇▇
Common Stock, nor has it repurchased any shares of ▇▇▇▇▇ Common Stock.
3.22 Subsidiaries. ▇▇▇▇▇ has no direct or indirect subsidiaries and
no stock or other equity or ownership interests (whether controlling or not) in
any corporation, association, partnership, joint venture, or other entity,
other than as set forth in Schedule 3.22. ▇▇▇▇▇ Corporation of Canada is an
inactive corporation which has no material assets and conducts no business.
3.23 Customers. Schedule 3.23 accurately sets forth as of June 30,
1995 the name of each existing customer of ▇▇▇▇▇, which, in the past 12 months,
purchased more than $50,000 of goods or services from ▇▇▇▇▇, and a list of any
written agreement between ▇▇▇▇▇ and such customer, if the agreement is
effective and obligates ▇▇▇▇▇ to future performance over more than 6 months or
for more than $25,000 in the next three months relating to the customer.
3.24 Submission to Vote. Based in part on the financial analysis
performed by its financial advisors, the Board of Directors of ▇▇▇▇▇ has
adopted a resolution recommending that the Merger and the other transactions
contemplated herein be submitted to and approved by Sandy's shareholders.
3.25 Information to be Provided. None of the information supplied
by ▇▇▇▇▇ for inclusion in the Registration Statement will, at the time the
Registration Statement is filed with the SEC or the Merger Proxy Statement is
mailed to ▇▇▇▇▇ shareholders, contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading.
3.26 Shareholder Vote. The affirmative vote of the holders of a
majority of the outstanding shares of ▇▇▇▇▇ Common Stock is the only vote of
the holders of any class or series of stock of ▇▇▇▇▇ necessary to approve the
Merger.
3.27 Labor Matters. ▇▇▇▇▇ is not a party to any collective bargaining
agreement or other labor union contract applicable to persons employed by
▇▇▇▇▇. At no time since July 1, 1993 has ▇▇▇▇▇ been involved in any labor
discussions with any unit or group seeking to become
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a bargaining unit for any of its employees. There are no material
controversies, strikes, work stoppages or disputes pending or threatened
between ▇▇▇▇▇ and any of the employees or former employees of ▇▇▇▇▇
("Employees").
3.28 Ordinary Course. Since August 31, 1994, ▇▇▇▇▇ has conducted
its business only in the ordinary course, consistent with its past practice,
except (a) as expressly permitted by this Agreement or in connection with the
transactions contemplated by this Agreement, (b) as set forth in any of the
▇▇▇▇▇ SEC Filings or any of the ▇▇▇▇▇ Financial Statements, and (c) in
connection with Sandy's dealings with ▇▇▇▇▇▇▇▇.
3.29 Chapter 7A and Chapter 7B of MBCA. Section 780 of Chapter 7A
of the MBCA does not apply to any business combination (as defined in Chapter
7A of the MBCA) between ▇▇▇▇▇ and ADP Mergerco or any of its affiliates, and
Chapter 7B of the MBCA does not apply to control share acquisitions (as defined
in Chapter 7B of the MBCA) of shares of ▇▇▇▇▇.
3.30 Pooling of Interests. To Sandy's best knowledge, ▇▇▇▇▇ has not
taken, failed to take, or agreed to take or not to take any action which would
disqualify the Merger as a pooling of interests for accounting purposes.
3.31 Fixed Assets; Sufficiency of Assets. The physical and
intangible assets of ▇▇▇▇▇, whether owned, licensed or leased by it, are
sufficient to provide all services currently offered or committed by ▇▇▇▇▇ to
its customers. There are no assets or property necessary for the conduct of
the business of ▇▇▇▇▇ as presently utilized or conducted which are not owned,
leased, or licensed by ▇▇▇▇▇.
3.32 Leased Properties. Schedule 3.32 contains a list of all
outstanding realty and material personalty leases to which ▇▇▇▇▇ is a party or
by which it is bound, whether as lessee or lessor, on the date hereof. ▇▇▇▇▇
has heretofore provided ADP with true and complete copies of all such leases.
▇▇▇▇▇ occupies or uses all of the real and personal property leased by it under
and in accordance with such leases, and has neither assigned its interests
under any such lease nor further subleased the property which is the subject of
any such lease. All of such leases are in full force and effect and the
transactions contemplated by this Agreement will not effect a termination of or
otherwise interfere with Sandy's rights under each such lease, nor violate any
term or provision of any such lease or incur any additional charge thereunder.
▇▇▇▇▇ has not made any material alterations to, or installed any fixtures at,
the leased premises set forth in Schedule 3.32 such that it will have an
obligation to retrofit any such leased premises.
3.33 Licensed Properties. Schedule 3.33 contains a list of all
outstanding licenses to which ▇▇▇▇▇ is a party or by which it is bound, whether
as licensee or licensor, on the date hereof (including without limitation any
software licenses other than commercial, off-the-shelf software used in the
ordinary course of business). ▇▇▇▇▇ has heretofore provided ADP with true and
complete copies of all such licenses. Except as otherwise set forth in
Schedule 3.33: (a) ▇▇▇▇▇ has the right to use all of the property licensed by
it under any such licenses, and (b) any license granted by ▇▇▇▇▇ to others is
non-exclusive and any such licensees are not and shall not be entitled to
further sublicense, assign or transfer the licensed property to others. All of
such licenses are in full force and effect, and the transactions contemplated
by this Agreement will
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not effect a termination of or otherwise interfere with Sandy's rights under
any license agreement as to which it is the licensee, nor violate any term or
provision of any such license or incur any additional charge thereunder.
3.34 Loan Agreements, Debt Instruments and Guarantees. Schedule
3.34 contains a true and complete list of all loan agreements, debt
instruments, guarantees, or any related documents of any nature whatsoever
which are outstanding on the date hereof and to which ▇▇▇▇▇ is a party or by
which it is bound. ▇▇▇▇▇ has heretofore provided ADP with true and complete
copies of all such documents. Except as otherwise set forth in Schedule 3.34,
all outstanding liabilities and debts of ▇▇▇▇▇ may be prepaid in whole or in
part at any time without penalty, all of such liabilities and debts shall
continue as liabilities and debts of ▇▇▇▇▇ notwithstanding the transactions
contemplated by this Agreement without mandatory prepayment, penalty or points,
and no event has occurred prior to the date hereof which with the lapse of time
or the giving of notice or both would constitute a default of either party
under any such loan agreement, debt instrument, guaranty, or any related
document.
3.35 Employees; Employment Practices; Compensation and Vacations.
Schedule 3.35 contains a true and complete listing of all employees of ▇▇▇▇▇
during the one-year period ending on the date hereof, their annual salary, date
of hire, date of next review, date of last review and, if applicable, their
dates of termination. Schedule 3.35 also contains a separate true and
complete listing of all independent contractors engaged by ▇▇▇▇▇ during the
one-year period ending on the date hereof, together with the terms of the
compensation arrangements applicable to each such independent contractor.
Since August 31, 1994, except in the ordinary course of business and consistent
as to timing and amount with past practices, ▇▇▇▇▇ has not: (a) increased the
compensation payable or to become payable to or for the benefit of any of its
employees or independent contractors, (b) provided any of its employees with
increased security or tenure of employment, (c) increased the amount payable to
any of its employees upon the termination of any such person's employment, or
(d) increased, augmented or improved benefits granted to or for the benefit of
any of its employees under any bonus, stock option, profit sharing, pension,
retirement, deferred compensation, insurance or other direct or indirect
benefit plan or arrangement.
3.36 Capital Expenditures. Except as set forth in Schedule 3.36,
there are no capital projects or capital expenditures currently committed for
or undertaken by ▇▇▇▇▇ which are not paid for on the date hereof.
3.37 Bank Accounts and Safe Deposit Boxes; Powers of Attorney.
Schedule 3.37 contains: (a) the names of all banks in which ▇▇▇▇▇ has an
account (including without limitation any trust account) or safe deposit box,
and (b) the names of all persons or entities, if any, holding powers of
attorney from ▇▇▇▇▇.
3.38 Casualty Losses. Since August 31, 1994, there has not been any
material loss, damage or destruction to or of any of the assets, property or
business of ▇▇▇▇▇ (other than as to which all necessary repairs or replacements
have been made or will be covered by insurance proceeds when made) nor have any
of such assets, properties or business of ▇▇▇▇▇ been affected as a result of
fire, accident or other casualty, war, civil strife or act of God (other than
in any
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immaterial respect and as to which all necessary repairs or replacements have
been made or will be covered by insurance proceeds when made).
3.39 Transactions with Affiliates. ▇▇▇▇▇ has heretofore provided
ADP with true and complete copies of all contracts or agreements of any nature
whatsoever, whether written or oral, between ▇▇▇▇▇ and any director, executive
officer or other Affiliate of ▇▇▇▇▇, including without limitation any
employment agreement or other compensation or reimbursement arrangement, any
loan or guarantee, and any purchase or sales agreement.
3.40 Reorganization. ▇▇▇▇▇ operates at least one significant
historic business line, or owns at least a significant portion of its historic
business assets, in each case within the meaning of Treas. Reg. Section
1.368-1(d). ▇▇▇▇▇ has no knowledge that any shareholder of ▇▇▇▇▇ has any
present plan, intention or arrangement to dispose of any of the ADP Common
Stock to be received in the Merger in a manner that would cause the Merger to
violate the continuity of shareholder interest requirement set forth in Treas.
Reg. Section 1.368-1.
ARTICLE 4
ADDITIONAL COVENANTS AND AGREEMENTS
4.1 Conduct of Sandy's Business. ▇▇▇▇▇ covenants and agrees that,
prior to the Effective Time, unless ADP Mergerco and ADP shall otherwise agree
in writing or as otherwise expressly contemplated by this Agreement:
(a) ▇▇▇▇▇ will carry on its businesses in the regular and
ordinary course, consistent with past practice, and, except in connection
with the transactions contemplated by this Agreement or in connection with
any other offer to acquire shares or assets of ▇▇▇▇▇ to the extent
permitted by Section 7.11 of this Agreement, use reasonable efforts to
preserve intact its present business organizations. Without limiting the
foregoing ▇▇▇▇▇ will not directly or indirectly, without the prior written
consent of ADP Mergerco and ADP and except in connection with the
transactions contemplated by this Agreement:
(i) issue, sell, pledge, dispose of or encumber its
Assets, other than through sales of goods and/or services to
Sandy's customers in the ordinary course of business,
consistent with past practice;
(ii) amend Sandy's Articles of Incorporation or
By-laws;
(iii) split, combine or reclassify any outstanding
shares of ▇▇▇▇▇ capital stock, or declare, set aside or pay
any dividend payable in cash, stock, property or otherwise with
respect to such shares;
(iv) redeem, purchase, acquire or offer to acquire
any shares of ▇▇▇▇▇ capital stock;
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(v) issue, sell, pledge or dispose of, or agree to
issue, sell, pledge or dispose of, any additional shares of, or
securities convertible or exchangeable for, or any options,
warrants or rights of any kind to acquire any shares of, ▇▇▇▇▇
capital stock of any class whether pursuant to any rights
agreement, stock plan or otherwise, except that ▇▇▇▇▇ may issue
shares of ▇▇▇▇▇ Common Stock in accordance with currently
outstanding stock options;
(vi) acquire (by merger, consolidation or
acquisition of stock or assets) or be acquired by any
corporation, partnership or other business organization or
division thereof;
(vii) incur any indebtedness for borrowed money,
other than in the ordinary course of business, consistent with
past practice, or issue any debt securities;
(viii) enter into or modify any material contract,
lease or agreement, other than in the ordinary course of
business, consistent with past practice;
(ix) terminate, modify, assign, waive, release or
relinquish any material contract rights or amend any material
rights or claims except as expressly provided in this
Agreement;
(x) other than pursuant to previously existing
written plans, written agreements or regular budgets and
standard policies, grant any increase in the salary or other
compensation or benefits to Sandy's directors, officers or
employees or grant any bonus to any employee or enter into any
employment agreement, or make any loan to or enter into any
material transaction of any other nature with any officer,
director or employee of ▇▇▇▇▇; provided, that ▇▇▇▇▇ may pay
fiscal 1995 bonuses based on earnings before merger-related
costs;
(xi) take any action to institute any new severance
or termination pay practices with respect to any directors,
officers or employees of ▇▇▇▇▇ or to increase the benefits
payable under its severance or termination pay practices;
(xii) hire new employees, other than in the ordinary
course of business, consistent with past practice;
(xiii) adopt or amend, in any respect, except as may
be required by applicable law or regulation (in which case
▇▇▇▇▇ will notify ADP Mergerco and ADP of such amendment or
adoption and the reasons therefor), any bonus, profit sharing,
compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment or other employee
benefit plan, agreement, trust, fund, plan or arrangement for
the benefit or welfare of any directors, officers or employees;
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(xiv) except as set forth on Schedule 3.36, make any
capital expenditures or capital commitments in amounts greater
than $100,000 in the aggregate;
(xv) make any election for federal income tax
purposes;
(xvi) settle or compromise any litigation involving
the payment of, or enter into a settlement agreement to pay
over time, an amount in cash, notes or other property in excess
of $50,000; or
(xvii) enter into any contract, agreement, commitment
or arrangement to do any of the foregoing.
(b) ▇▇▇▇▇ will use reasonable efforts, to the extent not
prohibited by the foregoing provisions of this Section 4.1, to maintain
its relationships with its suppliers and customers, and, if requested by
ADP Mergerco or ADP, (i) ▇▇▇▇▇ will use reasonable efforts to make
reasonable arrangements as reasonably requested by ADP Mergerco or ADP for
representatives of ADP Mergerco or ADP to meet with customers and
suppliers of ▇▇▇▇▇ (provided however that ADP Mergerco or ADP will give
▇▇▇▇▇ reasonable notice of such meetings), and (ii) ▇▇▇▇▇ will schedule,
as reasonably requested by ADP Mergerco or ADP, meetings of
representatives of ADP Mergerco or ADP with executive officers of ▇▇▇▇▇.
4.2 Conduct of Business by ADP. From the date of this Agreement to
the Effective Time, unless ▇▇▇▇▇ shall otherwise agree in writing or as
otherwise expressly contemplated or permitted by other provisions of this
Agreement, including but not limited to, this Section 4.2:
(a) Neither ADP nor any subsidiary of ADP shall amend its
Certificate of Incorporation (or other such governing document) or bylaws
in a manner which would materially adversely affect the rights of holders
of ADP Common Stock or the ability of ADP to consummate the transactions
contemplated hereby in a timely manner;
(b) Neither ADP nor any subsidiary of ADP shall make any
acquisition or take any other action that individually or in the aggregate
would materially adversely affect the ability of ADP or ADP Mergerco to
consummate the transactions contemplated hereby in a timely manner; and
(c) Other than regular quarterly cash dividends which are not
in excess of $.25 per share of ADP Common Stock and any stock split
effected as a stock dividend, ADP shall not declare, set aside, make or
pay any dividend or distribution (whether in cash, stock or property or
any combination thereof) in respect of the ADP Common Stock; and
(d) ADP shall not agree to do any of the foregoing.
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4.3 Shareholder Approval.
(a) As soon as reasonably practicable following the date hereof,
▇▇▇▇▇ will take all action necessary in accordance with the Exchange Act, the
laws of the State of Michigan and Sandy's Articles of Incorporation and Bylaws
to call, give notice of, and convene a meeting of ▇▇▇▇▇ shareholders (the
"Meeting") to consider and vote upon the approval and adoption of this
Agreement and the Plan, and for such other purposes as ▇▇▇▇▇ may ▇▇▇▇ necessary
or desirable. As of the date of this Agreement, the Board of Directors of
▇▇▇▇▇ has determined, based in part upon the financial analysis performed by
its financial advisors, that the Merger is advisable and in the best interest
of the shareholders of ▇▇▇▇▇ and, subject to their fiduciary duties, shall
recommend that Sandy's shareholders vote to approve and adopt this Agreement
and the Plan and any other matters to be submitted to Sandy's shareholders in
connection therewith. ▇▇▇▇▇ shall use reasonable efforts to solicit and secure
from its shareholders such approval and adoption, subject to the fiduciary
duties of the directors of ▇▇▇▇▇, which efforts shall include without
limitation diligently soliciting shareholder proxies therefor and advising ADP
Mergerco and ADP upon request from time to time as to the status of the
shareholder vote then tabulated. Nothing in this Section shall in any way bind
or obligate any officers or directors of ▇▇▇▇▇ to act in any way in their
capacities as shareholders of ▇▇▇▇▇. The Meeting will take place as soon after
the date hereof as permitted under applicable law and as is reasonably
practicable.
(b) As promptly as reasonably practicable following the execution
of this Agreement, ADP and ▇▇▇▇▇ shall file with the SEC a registration
statement on Form S-4 (the "Registration Statement") covering the issuance and
delivery of the ADP Common Stock to the shareholders of ▇▇▇▇▇ and containing
preliminary proxy materials which comply with the requirements of the Exchange
Act with respect to the transactions contemplated hereby and will use their
best efforts to cause such Registration Statement to be declared effective and
such preliminary proxy materials to be cleared by the SEC. ▇▇▇▇▇ and ADP will
cooperate fully in the preparation and filing of the Registration Statement and
such preliminary proxy materials and any amendments and supplements thereto.
(c) Promptly after the Registration Statement (including the
definitive proxy statement contained therein (the "Merger Proxy Statement"))
becomes effective, ▇▇▇▇▇ shall cause the Merger Proxy Statement to be mailed to
its stockholders to solicit their approval of the transactions contemplated
herein and therein. ▇▇▇▇▇ shall not use any proxy material in connection with
the Meeting without ADP's prior approval.
4.4 Other Agreements. Subject to the terms and conditions herein
provided and to the fiduciary duties of the Boards of Directors of ▇▇▇▇▇ and
ADP, each of the parties hereto agrees to use all reasonable efforts to take,
or cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including without
limitation, using all reasonable efforts to obtain all necessary waivers,
consents and approvals and to effect all necessary registrations and filings,
including, but not limited to, filings required under the Exchange Act and the
HSR; except that the foregoing shall not require ADP Mergerco, ADP or ▇▇▇▇▇ to
agree to make any divestiture of a significant asset in order to obtain any
waiver, consent or approval. Subject to the terms and conditions herein
provided,
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ADP, as the parent corporation of ADP Mergerco, will cause ADP Mergerco to take
all reasonable actions and to do, or cause to be done, all things reasonably
necessary, proper or advisable to consummate and make effective as promptly as
possible the transactions contemplated by this Agreement.
4.5 Notification of Certain Matters. ▇▇▇▇▇ shall give prompt
notice to ADP Mergerco and ADP, and ADP Mergerco and ADP shall give prompt
notice to ▇▇▇▇▇, of (i) the occurrence, or failure to occur, of any event which
such party believes would be likely to cause any of its representations or
warranties contained in this Agreement (including as it relates to information
contained in the schedules prepared pursuant to Articles 2 and 3) to be untrue
or inaccurate in any material respect at any time from the date hereof to the
Effective Time and (ii) any material failure of ▇▇▇▇▇, ADP or ADP Mergerco, as
the case may be, or any officer, director, employee or agent thereof, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that failure to give such notice
shall not constitute a waiver of any defense that may be validly asserted. No
disclosure of changes to the Article 3 schedules pursuant to this Section 4.5
will be deemed to amend or supplement the schedules or prevent or cure any
misrepresentation, breach of warranty, or breach of any covenant thereunder.
4.6 Access to Information. ▇▇▇▇▇ will, and will cause Sandy's
officers, directors, employees and agents, including attorneys and accountants,
to afford, from the date hereof to the Effective Time, the officers, employees
and agents of ADP Mergerco and ADP complete access at all reasonable times to
Sandy's officers, employees, agents, properties, books, records and workpapers,
and shall furnish ADP Mergerco and ADP all financial, operating and other data
and information as ADP Mergerco and ADP may reasonably request. ADP Mergerco
and ADP will use reasonable efforts not to disrupt Sandy's business.
4.7 Public Announcements. None of ADP Mergerco, ADP or ▇▇▇▇▇ will
make, issue or release any oral or written public announcement or statement
concerning, or acknowledgment of the existence of, or reveal the terms,
conditions or status of, the transactions contemplated by this Agreement and
the Plan, or any other communication to shareholders or the investing public,
directly or indirectly (including without limitation press releases and
statements to securities analysts), without first making a good faith attempt
to obtain the prior approval of, or concurrence in, the contents of such
announcement, acknowledgment or statement by the other of them, which approval
or concurrence will not be unreasonably withheld or delayed; provided, that
nothing in this Agreement will prevent any party from commenting on prior
public announcements or from making any announcement, acknowledgement or
statement required by law or the rules of any securities exchange on which its
stock is listed.
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ARTICLE 5
CLOSING
5.1 Conditions to ADP Mergerco's and ADP's Obligations.
Notwithstanding any other provision herein to the contrary, the obligations of
ADP Mergerco and ADP to consummate the transactions contemplated hereby are
subject to the fulfillment of each of the following conditions:
(a) The representations and warranties of ▇▇▇▇▇ contained
herein and the information contained in the schedules prepared pursuant to
Article 3 shall be true and correct on and as of the Closing Date with the
same force and effect as though such representations and warranties had
been made and such information had been given on and as of the Closing
Date, except to the extent waived in writing by ADP; ▇▇▇▇▇ shall have
performed in all material respects all obligations and complied in all
material respects with all agreements, covenants and conditions required
by this Agreement to be performed or complied with by it at or prior to
the Closing Date.
(b) There shall not be any judgment, decree, injunction,
ruling or order of any court, governmental department, commission, agency
or instrumentality outstanding against ADP Mergerco, ADP or ▇▇▇▇▇ which
prohibits or materially restricts or delays the consummation of the
Merger.
(c) This Agreement and the Plan shall have been approved and
adopted by the requisite vote of the holders of the outstanding shares of
▇▇▇▇▇ Common Stock in accordance with the MBCA and Sandy's Articles of
Incorporation and Bylaws.
(d) All authorizations, consents and permits required by ▇▇▇▇▇
to perform this Agreement and the Plan shall have been obtained and shall
be in form and substance satisfactory to ADP Mergerco and ADP. The
required statutory waiting period under the HSR shall have expired or been
terminated and no condition shall have been imposed with respect thereto
which is not acceptable to ADP Mergerco and ADP.
(e) ▇▇▇▇▇ will have delivered, or will have caused to be
delivered, to ADP Mergerco and ADP the following:
(i) A copy of the resolutions duly adopted by
Sandy's Board of Directors approving the adoption, execution,
performance, and delivery of this Agreement and the Plan and
authorizing all necessary or proper action to enable ▇▇▇▇▇ to
comply with the terms hereof and thereof.
(ii) A copy of the resolutions duly adopted by
Sandy's shareholders authorizing the adoption, execution,
performance, and delivery of this Agreement and the Plan and
approving the Merger in accordance with the MBCA.
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(iii) The opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
▇▇▇▇ to the effect that:
(A) ▇▇▇▇▇ is a corporation validly existing
and in good standing under the laws of the state of its
incorporation and is duly qualified to do business within
the jurisdictions set forth therein;
(B) ▇▇▇▇▇ has the corporate power and
authority to execute, deliver, and perform its obligations
under this Agreement and the Plan; the execution,
delivery, and performance by ▇▇▇▇▇ of its obligations
under this Agreement and the Plan have been duly
authorized by all necessary corporate action on the part
of ▇▇▇▇▇; and this Agreement and the Plan have been duly
executed and delivered by ▇▇▇▇▇ and constitute the valid
and binding obligations of ▇▇▇▇▇, enforceable against
▇▇▇▇▇ in accordance with their respective terms, except
that (1) such validity, binding effect and enforceability
may be subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other
laws, now or hereafter in effect, affecting creditors'
rights generally, and (2) the remedy of specific
performance and injunctive and other forms of equitable
relief may be subject to equitable defenses (including
commercial reasonableness, good faith, and fair dealing)
and to the discretion of the court before which any
proceeding therefor may be brought;
(C) The execution, delivery, and performance
by ▇▇▇▇▇ of its obligations under this Agreement and the
Plan (i) do not violate (a) Sandy's Articles of
Incorporation or Bylaws or (b) any law known to counsel to
be applicable to ▇▇▇▇▇ where such violation would
reasonably be expected to have a material adverse effect
upon the validity, performance or enforceability of any of
the terms of this Agreement applicable to ▇▇▇▇▇, or (c)
based solely on a review of the results of a litigation
search in the United States District Court for the Eastern
District of Michigan, Southern Division, dated within two
weeks of the Closing Date, and the Oakland County,
Michigan Circuit Court, dated within two weeks of the
Closing Date (the "Searches") and a certificate of
officers of ▇▇▇▇▇, any of Sandy's obligations under any
judgment, decree, or order of any court or any other
agency of government and (ii) do not constitute a breach
of, or a default under, any of the agreements listed as
exhibits to Sandy's most recent Annual Report on Form 10-K
filed with the SEC or any subsequent Quarterly Reports on
Form 10-Q and any other material agreements of ▇▇▇▇▇
actually known to counsel (collectively, the
"Agreements");
(D) No approval, authorization, or other
action by, or filing with, any governmental authority of
the United States of America or the State of Michigan is
required for the execution, delivery and
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performance by ▇▇▇▇▇ of this Agreement or the Plan (other
than under state "blue sky" laws, the SEC approvals
contemplated by Section 4.3(b) hereof, the approval of the
U.S. Department of Justice and the Federal Trade
Commission pursuant to the HSR and the filing of a
Certificate of Merger with the Department of Commerce of
the State of Michigan);
(E) Subject to compliance with applicable
federal and state securities laws (as to which counsel
need express no opinion), all of the outstanding shares of
▇▇▇▇▇ Common Stock have been duly authorized, validly
issued and fully paid, and are nonassessable and free of
any preemptive rights created by the Articles of
Incorporation or Bylaws of ▇▇▇▇▇ or created by any of the
Agreements;
(F) This Agreement and the Plan were duly and
validly approved by the shareholders of ▇▇▇▇▇ in
accordance with the MBCA and Sandy's Articles of
Incorporation and Bylaws, and, assuming that this
Agreement and the Plan were duly and validly approved by
ADP Mergerco in accordance with the MBCA and ADP
Mergerco's Articles of Incorporation and Bylaws, upon
filing a Certificate of Merger with the Department of
Commerce of the State of Michigan the Merger will become
effective under the laws of the State of Michigan;
(G) Based solely on the Searches, the results
of an inquiry to members of such counsel's firm and a
certificate of officers of ▇▇▇▇▇, such counsel shall
confirm to ADP and ADP Mergerco that to its actual
knowledge (i) there are no claims, actions, suits,
proceedings or investigations pending or threatened in
writing against ▇▇▇▇▇ or any Employee Plans, at law or in
equity, before any court or governmental agency, except as
set forth in Section 3.11 hereof and (ii) no action or
proceeding has been instituted or threatened in writing to
restrain or prohibit the performance of any party's
obligations under this Agreement or to challenge the
validity of any part of this Agreement or seeking damages
on account thereof; and
(H) The treatment of the ▇▇▇▇▇ Stock Options
contemplated by Section 1.8 will not result in the breach
of any of the ▇▇▇▇▇ Stock Options or the stock option
plans pursuant to which such options were granted or
violate any law, rule, regulation or order.
(iv) A Certificate from the Chairman of ▇▇▇▇▇,
solely in his capacity as an officer of ▇▇▇▇▇, to the effect
that the Company has complied with Section 4.1 of this
Agreement and the representations and warranties in Article 3
are true and correct in all respects on the Closing Date.
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(f) The Registration Statement shall have become effective and
no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceeding for that purpose and no similar
proceeding in respect of the Merger Proxy Statement shall have been
initiated or threatened by the SEC. ADP shall have received all state
blue sky or securities law permits and other authorizations necessary to
consummate the Merger.
(g) The Employment and Consulting Agreement dated November 4,
1985 between ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as heretofore amended and as
amended on the date hereof (the "Employment and Consulting Agreement"),
shall be in full force and effect and shall not have been subsequently
amended without the prior written consent of ADP.
(h) ▇▇▇▇▇ shall have entered into employment agreements, in
form and substance reasonably satisfactory to ADP, with certain key
employees of ▇▇▇▇▇ to be specified by ADP, and such employees' existing
employment agreements with ▇▇▇▇▇ shall have been terminated.
(i) ADP shall have received a complete and correct copy of
Sandy's audited financial statements for the one-year period ending August
31, 1995, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
Deloitte & Touche, LLP or other certified public accountants of nationally
recognized standing.
(j) ADP shall have received unaudited consolidated balance
sheets and income statements for each complete calendar month from June
30, 1995 through the last full month immediately prior to the Closing
Date, in each case certified by Sandy's chief financial officer as being
prepared in accordance with Sandy's books and records and consistent with
past practices.
(k) ▇▇▇▇▇ shall have received the opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇, in form and substance reasonably satisfactory to ▇▇▇▇▇
and ADP, to the effect that the Merger qualifies for federal income tax
purposes as a reorganization within the meaning of Section 368 of the
Code.
(l) All amounts owing under the Amended and Restated Revolving
Credit Agreement, dated June 23, 1993, between ▇▇▇▇▇ and Comerica Bank, as
amended, shall have been paid in full, and such credit agreement shall have
been terminated by ▇▇▇▇▇.
(m) ADP shall have received an agreement, in form and
substance reasonably satisfactory to it, from each "affiliate" of ▇▇▇▇▇
within the meaning of such term as used in Rule 145 under the Securities
Act (an "Affiliate") to the effect that (i) no disposition of ADP Common
Stock received in the Merger will be made by such persons except within
the limits and in accordance with the applicable provisions of (x) said
Rule 145, as amended from time to time, or except in a transaction which,
in
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the opinion of legal counsel reasonably satisfactory to ADP, is exempt
from registration under the Securities Act of 1933 and (y) Securities
Act Release No. 5312 with respect to sales of ADP Common Stock by
Affiliates until such time as financial results covering at least 30
days of post-merger combined operations have been published, provided
that ADP agrees to publish promptly financial statements reflecting
such combined operations and (ii) such person has not theretofore
taken (and, if such agreement is delivered prior to the Closing Date,
will not take during the remaining period prior thereto) any action
(including, without limitation, selling or otherwise disposing of
▇▇▇▇▇ Common Stock beneficially owned by such person) that would
prevent the Merger from being accounted for as a pooling of interests.
(n) ADP shall have received evidence from Deloitte &
Touche LLP, in form and substance reasonably satisfactory to it, that
the Merger may properly be accounted for as a pooling of interests.
(o) In consideration of ADP's guaranty of the obligations
of the Surviving Corporation under the lease agreement dated February
1, 1994 between ▇▇▇▇▇ and 1500 Limited Partnership, such lease shall
have been amended, on terms mutually satisfactory to ADP and 1500
Limited Partnership, (i) to add an additional improvements allowance
of $200,000 thereunder to be available to the Surviving Corporation
immediately after the Effective Time and until December 31, 1996, (ii)
to accelerate the availability of the last $100,000 of the
improvements allowance thereunder from February 1, 2000 to the Closing
Date so that such $100,000 allowance shall be available immediately
after the Effective Time and until December 31, 1996 and (iii) to
permit the Surviving Corporation to self-insure under Sections 11.2,
11.3, 11.4 and 11.5 of such lease in accordance with ADP's standard
policy.
(q) ADP shall have received evidence, in form and
substance reasonably satisfactory to it, that the ▇▇▇▇▇ Adjusted Net
Worth as at the Test Date shall be no less than $10,101,187. The
"▇▇▇▇▇ Adjusted Net Worth" means the stockholders' equity of ▇▇▇▇▇,
calculated in a manner consistent with that used to calculate
stockholders' equity in the ▇▇▇▇▇ Financial Statements, provided that:
(i) the ▇▇▇▇▇ Adjusted Net Worth shall be calculated as if all amounts
payable to ▇▇▇▇▇▇▇ ▇▇▇▇▇ under the Employment and Consulting Agreement
and the $190,000 in additional expenses and fees used by the parties
in calculating the $10,101,187 figure are deductible for federal income
tax purposes at the statutory corporate rate, and (ii) the ▇▇▇▇▇
Adjusted Net Worth shall be calculated as if all amounts payable to
▇▇▇▇▇▇▇ ▇▇▇▇▇ under the Employment and Consulting Agreement had been
paid as of the Test Date. The "Test Date" means the last day of the
calendar month ending more than ten but less than forty-one days
before the Closing Date.
5.2 Conditions to Sandy's Obligations. Notwithstanding any other
provision herein to the contrary, the obligation of ▇▇▇▇▇ to consummate the
transactions contemplated hereby is subject to the fulfillment of each of the
following conditions:
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(a) The representations and warranties of ADP Mergerco
and ADP contained herein shall be true and correct on and as of the Closing
Date with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date, except to the extent
waived in writing by ▇▇▇▇▇ and except that any representations and warranties
made as of a specified date will be deemed true and correct as of the Closing
Date if they were true and correct on the specified date. ADP Mergerco and ADP
shall have performed in all material respects all obligations and complied in
all material respects with all agreements, covenants and conditions required by
this Agreement to be performed or complied with by either of them at or prior
to the Effective Time.
(b) The delivery to ▇▇▇▇▇ of a copy of the resolutions
duly adopted by ADP Mergerco's Board of Directors or a duly authorized
committee thereof approving the execution and delivery of this Agreement and
the Plan and authorizing all necessary or proper action to enable ADP Mergerco
to comply with the terms hereof.
(c) There shall not be any judgment, decree, injunction,
ruling or order of any court, governmental department, commission, agency or
instrumentality outstanding against ADP Mergerco, ADP or ▇▇▇▇▇ which prohibits
or materially restricts or delays the consummation of the Merger.
(d) The approval by Sandy's shareholders, in accordance
with the MBCA and Sandy's Articles of Incorporation and Bylaws, of this
Agreement and the Plan and authorizing all necessary or proper action to enable
▇▇▇▇▇ to comply with the terms hereof.
(f) The delivery by ADP of the Exchange Fund to the
Exchange Agent for the conversion of the ▇▇▇▇▇ Common Stock as set forth in the
Plan.
(g) The opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, General Counsel of ADP, to the
effect that:
(A) ADP is a corporation validly
existing and in good standing under the laws of the
State of Delaware;
(B) ADP has the corporate power
and the corporate authority to execute, deliver, and
perform its obligations under this Agreement and the
Plan; the execution, delivery, and performance by ADP
of its obligations under this Agreement and the Plan
have been duly authorized by all necessary corporate
action on the part of ADP; and this Agreement and the
Plan have been duly executed and delivered by ADP and
constitute the valid and binding agreements of ADP,
enforceable against ADP in accordance with their
respective terms, except that (1) such enforcement may
be subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization,
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moratorium, or other laws, now or hereafter in
effect, affecting creditors' rights generally, and (2)
the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to
equitable defenses (including commercial
reasonableness, good faith, and fair dealing) and to
the discretion of the court before which any
proceeding therefor may be brought;
(C) The execution, delivery, and
performance by ADP of its obligations under this
Agreement and the Plan (i) do not violate (a) ADP's
Certificate of Incorporation or Bylaws or (b) any law
known to counsel to be applicable to ADP where such
violation would reasonably be expected to have a
material adverse effect upon the validity, performance
or enforceability of any of the terms of this
Agreement applicable to ADP, or (c) any of ADP's
obligations under any judgment, decree, or order of
any court or any other agency of government known to
counsel that is applicable to ADP or its properties
and (ii) do not constitute a breach of, or a default
under, any of the agreements listed as exhibits to
ADP's most recent Annual Report on Form 10-K filed
with the SEC or any subsequent Quarterly Reports on
Form 10-Q and any other material agreements of ADP
actually known to counsel;
(D) No approval, authorization, or
other action by, or filing with, any governmental
authority of the United States of America or the State
of Delaware is required in connection with the
execution, delivery and performance by ADP of this
Agreement or the Plan (other than under state "blue
sky" laws, the SEC approvals contemplated by Section
4.3(b) and the approval of the U.S. Department of
Justice and the Federal Trade Commission pursuant to
the HSR);
(E) This Agreement and the Plan
were duly and validly approved by the shareholders of
ADP Mergerco in accordance with ADP Mergerco's
Certificate of Incorporation and Bylaws;
(F) The Registration Statement has
become effective under the Securities Act of 1933, as
amended, and, to the best knowledge of such counsel,
no stop order suspending the effectiveness of the
Registration Statement has been issued and no
proceedings for that purpose have been instituted or
are pending or contemplated;
(G) The shares of ADP Common Stock
to be issued in connection with the Merger have been
duly authorized and when issued in accordance with the
terms of this Agreement and the Plan will be validly
issued, fully paid and nonassessable; and
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(H) Subject to compliance
with applicable federal and state securities laws (as
to which counsel need express no opinion), all of the
outstanding shares of ADP Common Stock have been duly
authorized, validly issued and fully paid, and are
nonassessable and free of any preemptive rights
created by the Articles of Incorporation or Bylaws of
ADP or created by any of the agreements referred to in
clause (C)(ii) above.
5.3 Closing and Effective Time. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m. local
time as soon as practicable after the satisfaction of the conditions precedent
to the Closing, or at such other time and place as mutually agreed by ADP
Mergerco, ADP and ▇▇▇▇▇ (the "Closing Date").
ARTICLE 6
TERMINATION AND ABANDONMENT
6.1 Termination and Abandonment. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time,
whether before or after approval by the shareholders of ▇▇▇▇▇:
(a) by mutual action of the Boards of Directors of ADP
Mergerco, ADP and ▇▇▇▇▇;
(b) by the Board of Directors of ADP Mergerco, ADP or
▇▇▇▇▇ if the Merger does not take place on or before January 31, 1996;
or
(c) by the Board of Directors of ▇▇▇▇▇ pursuant to
Section 7.11 hereof.
6.2 Effect of Termination. Except as provided in Section 7.6
hereof with respect to fees and expenses and in Section 7.1 hereof with respect
to confidentiality, in the event of the termination of this Agreement and the
abandonment of the Merger, this Agreement shall thereafter become void and have
no effect, and no party hereto shall have any liability to any other party
hereto or its shareholders or directors or officers in respect thereof, except
that nothing herein shall relieve any party from liability for any breach
hereof.
ARTICLE 7
MISCELLANEOUS
7.1 Entire Agreement. This Agreement (together with the schedules
contemplated herein and the documents delivered in connection herewith)
supersedes all prior documents, understandings, and agreements, oral or
written, relating to this transaction and constitutes the
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entire understanding among the parties with respect to the subject matter
hereof; provided, however, that the Confidentiality Agreement dated May 2, 1995
and the Non-Disclosure Agreement dated May 2, 1995 shall each survive the
execution, delivery and termination of this Agreement.
7.2 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto;
provided, however, that after approval of the Merger by the shareholders of
▇▇▇▇▇, no amendment may be made which decreases the consideration to which the
shareholders of ▇▇▇▇▇ are entitled pursuant to this Agreement or otherwise
materially adversely affects the shareholders of ▇▇▇▇▇ without the further
approval of the shareholders of ▇▇▇▇▇.
7.3 Waiver. At any time prior to the Effective Time, whether
before or after any meeting of Sandy's shareholders, any party hereto may (a)
in the case of ADP Mergerco and ADP, extend the time for the performance of any
of the obligations or other acts of ▇▇▇▇▇ or, subject to the provisions
contained in Section 7.2 hereof, waive compliance with any of the agreements of
▇▇▇▇▇ or with any conditions to the respective obligations of ADP Mergerco or
ADP, or (b) in the case of ▇▇▇▇▇, acting through its Chairman, extend the time
for the performance of any of the obligations or other acts of ADP Mergerco or
ADP, or waive compliance with any of the agreements of ADP Mergerco or ADP or
with any conditions to its own obligations. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid if set forth in an
instrument in writing signed on behalf of such party by a duly authorized
officer.
7.4 Intentionally Left Blank.
7.5 Successors and Assigns. No rights or obligations of any party
hereto under this Agreement may be assigned. Any assignment in violation of
the foregoing shall be null and void. Subject to the preceding sentence of
this Section 7.5, the provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.
7.6 Fees and Expenses.
(a) Except as otherwise provided in subsection (b) below,
regardless of whether the Merger is consummated, each of the parties hereto
shall pay its own respective costs and expenses (including, but not limited to,
attorneys' fees) incurred in connection with this Agreement and the
transactions contemplated hereby.
(b) If the Board of Directors of ▇▇▇▇▇ terminates this Agreement
pursuant to Section 7.11(d) hereof, then ▇▇▇▇▇ shall pay to ADP, within one
business day after such termination, a fee equal to four percent of the
aggregate purchase price which the third party indicated it would pay in
connection with the proposed Acquisition Transaction which was the basis for
such termination.
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7.7 Severability. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable; this Agreement
shall be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part hereof; and the remaining provisions shall
remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance herefrom. Furthermore,
in lieu of such illegal, invalid, or unenforceable provision, there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable.
7.8 Waiver. No failure or delay on the part of any party in
exercising any right, power, or privilege hereunder or under any of the
documents delivered in connection with this Agreement shall operate as a waiver
of such right, power, or privilege; nor shall any single or partial exercise of
any such right, power, or privilege preclude any other or future exercise
thereof 'or the exercise of any other right, power, or privilege.
7.9 Notices. Any notices required or permitted to be given under
this Agreement (and, unless otherwise expressly provided therein, under any
document delivered in connection with this Agreement) will be sufficient if
given in writing and shall be deemed received: (a) when personally delivered to
the relevant party at such party's address as set forth below, (b) when
confirmed if delivered by facsimile or similar device, (c) if sent by mail, on
the third day following the date when deposited in the United States mail,
certified or registered mail, postage prepaid, to the relevant party at its
address indicated below or (d), if sent by recognized overnight courier, on the
day following the date when delivered to the courier, postage prepaid,
addressed to the relevant party at its address indicated below:
If to ADP or Automatic Data Processing, Inc.
ADP Mergerco: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President, Dealer Services Group
Phone: 708/▇▇▇-▇▇▇▇
FAX: 708/▇▇▇-▇▇▇▇
with a copy to, in the case of notices to either ADP Mergerco
or ADP (which shall not constitute notice):
Automatic Data Processing, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Phone: 201/▇▇▇-▇▇▇▇
FAX: 201/▇▇▇-▇▇▇▇
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If to ▇▇▇▇▇: ▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman
Phone:810/▇▇▇-▇▇▇▇
FAX: 810/▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Phone: 313/▇▇▇-▇▇▇▇
FAX: 313/▇▇▇-▇▇▇▇
Each party may change its address for purposes of this Section 7.9 by proper
written notice to the other parties.
7.10 Non-Survival of Representations, Warranties, and Covenants.
Except as provided in Section 7.12 hereof, regardless of any investigation at
any time made by or on behalf of any party hereto or of any information any
party may have in respect thereof, all covenants, agreements, representations,
and warranties made hereunder or pursuant hereto or in connection with the
transactions contemplated hereby shall automatically terminate (without further
action) at the Effective Time.
7.11 Fiduciary Duties. ▇▇▇▇▇ will immediately cease any and all
discussions and negotiations with any and all third parties regarding any
proposed (i) merger of ▇▇▇▇▇ with or into any third party, (ii) sale of
substantially all of the assets of ▇▇▇▇▇, (iii) sale of more than one percent
of the outstanding shares of ▇▇▇▇▇ Common Stock, or (iv) consolidation or other
business combination involving ▇▇▇▇▇ or any division of ▇▇▇▇▇ (an "Acquisition
Transaction"). Except as set forth below in this Section 7.11, ▇▇▇▇▇ will
not, and will not permit any of its officers, directors, investment bankers,
attorneys or accountants to, and will not authorize any of its employees,
agents or representatives to, directly or indirectly, (i) encourage, solicit or
initiate discussions or negotiations with, or provide any non-public
information to, any person or entity other than ADP or its affiliates (or any
group in which ADP or its affiliates participates) concerning an Acquisition
Transaction or (ii) otherwise encourage, solicit or initiate inquiries or the
submission of any proposal contemplating an Acquisition Transaction. ▇▇▇▇▇
may, without liability for breach of this Agreement, (a) furnish information
and engage in discussions or negotiations with any person if ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇ or other independent legal counsel to ▇▇▇▇▇ advises the Board
of Directors of ▇▇▇▇▇ that failure to furnish such information or engage in
such discussions or negotiations is likely to be considered a breach by the
Board of Directors of ▇▇▇▇▇ of its fiduciary duties, (b) take and disclose to
Sandy's shareholders a position with respect to a tender offer by a third party
(a "Third Party Offer") pursuant to Rules 14d-9 and 14e-2(a) promulgated under
the Exchange Act or make such disclosure to Sandy's shareholders that, in the
good faith judgment of the Board of Directors of
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▇▇▇▇▇ based upon the advice of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ or other
independent legal counsel to ▇▇▇▇▇, may be required under applicable law, (c)
take action to provide that Chapter 7A or 7B of the MBCA does not apply to
acquisitions of shares of ▇▇▇▇▇ Common Stock pursuant to any Third Party Offer
at a value or consideration per share which, after consultation with Sandy's
financial advisors, the Board of Directors of ▇▇▇▇▇ determines is higher than
the Exchange Ratio, approve any such Third Party Offer and the transactions
contemplated thereby, or otherwise take any similar action which, in the good
faith judgment of the Board of Directors based upon the advice of ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ or other independent legal counsel to ▇▇▇▇▇, may be
required by the directors' fiduciary duties with respect to any such Third
Party Offer or (d) terminate this Agreement if ▇▇▇▇▇ receives a written
proposal regarding an Acquisition Transaction which offers more consideration
to the shareholders of ▇▇▇▇▇ than that offered hereunder by ADP and the Board of
Directors of ▇▇▇▇▇ recommends to the shareholders of ▇▇▇▇▇ that such
shareholders accept and/or approve such Acquisition Transaction.
7.12 Indemnification and Insurance.
(a) For six years after the Closing Date, ADP shall, or
shall cause the Surviving Corporation to, indemnify and hold harmless each
present and former director or officer of ▇▇▇▇▇ (the "Indemnified Parties")
from and against any and all claims arising out of or in connection with
activities in such capacity or on behalf of, or at the request of, ▇▇▇▇▇,
occurring on or prior to the Closing Date ("Claims"), to the fullest extent
permitted under applicable law and, in addition (if not prohibited by
applicable law), to the fullest extent provided in Sandy's charter and bylaws
in effect at the date hereof. If any Claim or Claims asserted or made within
such six year period, all rights to indemnification in respect of any such
Claim or Claims shall continue until disposition of any and all such Claims.
Without limiting the foregoing, after the Effective Time ADP shall, or shall
cause the Surviving Corporation to, advance expenses incurred with respect to
the foregoing, as they are incurred, to the fullest extent permitted under
applicable law, provided that the person on whose behalf the expenses are
advanced provides an undertaking (which need not be secured) to repay such
advances if it is ultimately determined in a final, non-appealable judicial
proceeding that such person is not entitled to indemnification.
(b) After the Effective Time, ADP shall, or shall cause
the Surviving Corporation to, maintain Sandy's existing officers' and
directors' liability insurance in respect of Claims, or other insurance
(including a run-off policy) in respect of Claims, no less favorable in scope
and amount of coverage, in full force and effect without reduction of coverage
for a period of three years after the Closing Date; provided, however, that ADP
will not be required to pay an annual premium therefor in excess of two times
the last annual premium paid by ▇▇▇▇▇ prior to the date hereof and if ADP is
unable to purchase the insurance required by this Section 7.12 it shall
purchase as much comparable insurance as can be obtained for an annual premium
equal to such maximum amount.
7.13 Knowledge.
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(a) When used in this Agreement, the term "knowledge" (or any
variation thereof) of ▇▇▇▇▇ shall refer to the actual knowledge of or notice to
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or any other executive
officer of ▇▇▇▇▇, and the term "best knowledge" of ▇▇▇▇▇ shall refer to the
actual knowledge of or notice to any of such persons after due inquiry by all
of such persons.
(b) When used in this Agreement, the term "knowledge" (or any
variation thereof) of ADP or ADP Mergerco shall refer to the actual knowledge
of or notice to ▇▇▇▇ ▇▇▇▇▇▇, Art Weinbach, ▇▇▇▇▇ ▇▇▇▇▇ or any other executive
officer of ADP or ADP Mergerco, and the term "best knowledge" of ADP or ADP
Mergerco shall refer to the actual knowledge of or notice to any of such
persons after due inquiry by all of such persons.
7.14 Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the State of Michigan without regard
to its choice of laws principles.
7.15 Headings. The headings and captions used in this Agreement
are, unless specified otherwise, for convenience only and shall not be deemed
to limit, amplify, or modify the terms of this Agreement or affect the meaning
hereof.
7.16 Sections; Exhibits. All references to "sections",
"schedules", and "exhibits" herein are, unless specifically indicated
otherwise, references to sections, schedules, and exhibits of and to this
Agreement.
7.17 Number and Gender of Words. Whenever herein the singular
number is used, the same shall include the plural where appropriate, and words
of any gender shall include each other gender where appropriate.
7.18 Counterparts. This Agreement may be executed in multiple
counterparts; provided however, that all such counterparts together shall be
deemed to constitute one agreement. This Agreement may be executed by
facsimile signatures.
7.19 Definitions. For purposes of this Agreement, the term:
(a) "Acquisition Transaction" has the meaning set forth in Section
7.11 hereof;
(b) "ADP" has the meaning set forth in the preamble to this
Agreement;
(c) "ADP ▇▇▇▇▇ Common Stock" has the meaning set forth in Section
1.2(a) hereof;
(d) "ADP Financial Statements" has the meaning set forth in
Section 2.6 hereof;
(e) "ADP Mergerco" has the meaning set forth in the preamble to
this Agreement;
(f) "ADP SEC Filings" has the meaning set forth in Section 2.6
hereof;
(g) "Affiliate" has the meaning set forth in Section 5.1(n)
hereof;
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(h) "Affiliate Stockholder" has the meaning set forth in Section
5.1(l) hereof;
(i) "Affiliate Stockholders' Agreement" has the meaning set forth
in Section 5.1(l) hereof;
(j) "Agreement" has the meaning set forth in the preamble to this
Agreement;
(k) "Assets" has the meaning set forth in Section 2.3 hereof;
(l) "Average ADP Common Stock Price" has the meaning set forth in
Section 1.3(a) hereof;
(m) "Best Knowledge" has the meaning set forth in Section 7.13
hereof;
(n) "Claim" and "Claims" have the meanings set forth in Section
7.12(a) hereof;
(o) "Closing" has the meaning set forth in Section 5.3 hereof;
(p) "Closing Date" has the meaning set forth in Section 5.3 hereof;
(q) "Code" has the meaning set forth in Section 3.9(c) hereof;
(r) "▇▇▇▇▇ Common Stock" has the meaning set forth in Section
1.2(a) hereof;
(s) "Determination Date" has the meaning set forth in Section
1.3(a) hereof;
(t) "Effective Time" has the meaning set forth in Section 1.1
(b) hereof;
(u) "Employees" has the meaning set forth in Section 3.27 hereof;
(v) "Employee Plans" has the meaning set forth in Section 3.9(b)
hereof;
(w) "Employment and Consulting Agreement" has the meaning set
forth in Section 5.1(g) hereof;
(x) "ERISA" has the meaning set forth in Section 3.9(b) hereof;
(y) "Escrow Agent" has the meaning set forth in Section 5.1(1)
hereof;
(z) "Escrow Agreement" has the meaning set forth in Section 5.1
(b) hereof;
(aa) "Exchange Agent" has the meaning set forth in Section 1.6(a)
hereof;
(ab) "Exchange Fund" has the meaning set forth in Section 1.6(b)
hereof;
(ac) "Exchange Ratio" has the meaning set forth in Section 1.3(a)
hereof;
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(ad) "Exhibits" has the meaning set forth in Section 7.16 hereof;
(ae) "GAAP" has the meaning set forth in Section 1.1(d) hereof;
(af) "HSR" has the meaning set forth in Section 3.3 hereof;
(ag) "Indemnified Parties" has the meaning set forth in Section
7.12(a);
(ah) "IRS" has the meaning set forth in Section 3.9 hereof;
(ai) "Knowledge" has the meaning set forth in Section 7.13 hereof;
(aj) "Liabilities" has the meaning set forth in Section 2.3 hereof;
(ak) "MAE" has the meaning set forth in Section 2.4 hereof;
(al) "MBCA" has the meaning set forth in the Recitals of this
Agreement;
(am) "Meeting" has the meaning set forth in Section 4.3(a) hereof;
(an) "Merger" has the meaning set forth in the preamble of this
Agreement;
(ao) "Merger Proxy Statement" has the meaning set forth in Section
4.3(c) hereof;
(ap) "NYSE" has the meaning set forth in Section 1.3(a) hereof;
(aq) "Plan" has the meaning set forth in the Recitals of this
Agreement;
(ar) "Registration Statement" has the meaning set forth in Section
4.3(b) hereof;
(as) "Return" and "Returns" have the meanings set forth in Section
3.14 hereof;
(at) "▇▇▇▇▇" has the meaning set forth in the preamble of this
Agreement;
(au) "▇▇▇▇▇ Financial Statements" has the meaning set forth in
Section 3.13 hereof;
(av) "▇▇▇▇▇ Adjusted Net Worth" has the meaning set forth in
Section 5.1(q) hereof;
(aw) "▇▇▇▇▇ Options" has the meaning set forth in Section 1.8(a)
hereof;
(ax) "▇▇▇▇▇ SEC Filings" has the meaning set forth in Section 3.13
hereof;
(ay) "▇▇▇▇▇ Tax Actions" has the meaning set forth in Section 3.14
hereof;
(az) "Schedules" has the meaning set forth in Section 7.16 hereof;
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(ba) "SEC" has the meaning set forth in Section 1.1(d) hereof;
(bb) "Sections" has the meaning set forth in Section 7.16 hereof;
(bc) "Stockholders' Representative" has the meaning set forth in
Section 1.7 hereof;
(bd) "Substitute Options" has the meaning set forth in Section
1.8(a) hereof;
(be) "Surviving Corporation" has the meaning set forth in Section
1.1(a) hereof;
(bf) "Tax" and "Taxes" have the meanings set forth in Section 3.14
hereof;
(bg) "Test Date" has the meaning set forth in Section 5.1(q)
hereof;
(bh) "Third Party Offer" has the meaning set forth in Section 7.11
hereof; and
(bi) "▇▇▇▇▇▇▇▇" has the meaning set forth in Section 3.13 hereof.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
ADP MERGERCO, INC.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Its: President
------------------------
AUTOMATIC DATA PROCESSING, INC.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Its: Corporate Vice President
------------------------
▇▇▇▇▇ CORPORATION
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Its: Chairman -- C.E.O.
------------------------
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