Exhibit 3
AGREEMENT AND PLAN OF MERGER
dated as of
May 4, 1997
among
DECISIONONE HOLDINGS CORP.
and
QUAKER HOLDING CO.
TABLE OF CONTENTS
Page
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ARTICLE 1
The Merger
Section 1.01. The Merger..............................................1
Section 1.02. Conversion (or Retention) of Shares.....................2
Section 1.03. Elections...............................................3
Section 1.04. Proration of Election Price.............................5
Section 1.05. Surrender and Payment...................................6
Section 1.06. Dissenting Shares.......................................8
Section 1.07. Stock Options...........................................9
Section 1.08. Warrants................................................9
Section 1.09. Fractional Shares......................................10
ARTICLE 2
The Surviving Corporation
Section 2.01. Certificate of Incorporation...........................10
Section 2.02. Bylaws.................................................10
Section 2.03. Directors and Officers.................................10
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(1) The Table of Contents is not a part of this Agreement.
ARTICLE 3
Representations and Warranties of the Company
Section 3.01. Corporate Existence and Power..........................11
Section 3.02. Corporate Authorization................................11
Section 3.03. Governmental Authorization.............................11
Section 3.04. Non-contravention......................................12
Section 3.05. Capitalization.........................................12
Section 3.06. Subsidiaries...........................................13
Section 3.07. SEC Filings............................................14
Section 3.08. Financial Statements...................................14
Section 3.09. Disclosure Documents...................................15
Section 3.10. Absence of Certain Changes.............................16
Section 3.11. No Undisclosed Material Liabilities....................17
Section 3.12. Litigation.............................................17
Section 3.13. Taxes..................................................18
Section 3.14. ERISA..................................................19
Section 3.15. Employees..............................................21
Section 3.16. Labor Matters..........................................21
Section 3.17. Compliance with Laws and Court Orders..................22
Section 3.18. Licenses and Permits...................................22
Section 3.19. Repairable Parts.......................................22
Section 3.20. Intellectual Property..................................22
Section 3.21. Finders' Fees..........................................23
Section 3.22. Inapplicability of Certain Restrictions................23
Section 3.23. Rights Plan............................................23
ARTICLE 4
Representations and Warranties of MergerSub
Section 4.01. Corporate Existence and Power..........................24
Section 4.02. Corporate Authorization................................24
Section 4.03. Governmental Authorization.............................24
Section 4.04. Non-contravention......................................24
Section 4.05. Disclosure Documents...................................25
Section 4.06. Finders' Fees..........................................25
Section 4.07. Financing..............................................25
Section 4.08. Capitalization.........................................26
ARTICLE 5
Covenants of the Company
Section 5.01. Conduct of the Company.................................27
Section 5.02. Stockholder Meeting; Proxy Material....................29
Section 5.03. Access to Information..................................29
Section 5.04. Other Offers...........................................30
Section 5.05. Notices of Certain Events..............................33
Section 5.06. Resignation of Directors...............................33
Section 5.07. Preferred Stock........................................33
Section 5.08. Solvency Advice........................................33
ARTICLE 6
Covenants of MergerSub
Section 6.01. SEC Filings............................................34
Section 6.02. Voting of Shares.......................................34
Section 6.03. Director and Officer Liability.........................34
Section 6.04. Employee Plans and Benefit Arrangements................35
Section 6.05. Financing..............................................36
Section 6.06. NASDAQ Listing.........................................36
Section 6.07. Access to Information..................................36
ARTICLE 7
Covenants of MergerSub and the Company
Section 7.01. Best Efforts...........................................36
Section 7.02. Certain Filings........................................37
Section 7.03. Public Announcements...................................38
Section 7.04. Further Assurances.....................................38
ARTICLE 8
Conditions to the Merger
Section 8.01. Conditions to the Obligations of Each Party............38
Section 8.02. Conditions to the Obligations of MergerSub.............39
Section 8.03. Condition to the Obligation of the Company.............41
ARTICLE 9
Termination
Section 9.01. Termination............................................42
Section 9.02. Effect of Termination..................................43
ARTICLE 10
Miscellaneous
Section 10.01. Notices...............................................43
Section 10.02. Survival of Representations and Warranties............44
Section 10.03. Amendments; No Waivers................................44
Section 10.04. Expenses..............................................45
Section 10.05. Successors and Assigns; Benefit.......................45
Section 10.06. Governing Law.........................................45
Section 10.07. Counterparts; Effectiveness...........................45
Section 10.08. Knowledge Defined.....................................46
Exhibit A Amendments to the Company's Certificate of
Incorporation
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of May 4, 1997 among
DecisionOne Holdings Corp., a Delaware corporation (the "Company") and Quaker
Holding Co., a Delaware corporation ("MergerSub").
W I T N E S S E T H:
WHEREAS, as of the date of execution of this Agreement, all of
the outstanding capital stock of, or other ownership interest in, MergerSub is
owned, in the aggregate, by DLJ Merchant Banking ▇▇▇▇▇▇▇▇ ▇▇, ▇.▇., ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇, ▇.▇., ▇▇▇ Diversified Partners, L.P., DLJMB Funding II,
Inc., UK Investment Plan 1997 Partners and DLJ First ESC LLC;
WHEREAS, MergerSub is unwilling to enter into this Agreement
unless, contemporaneously with the execution and delivery of this Agreement,
certain beneficial and record stockholders of the Company enter into a Voting
Agreement and Irrevocable Proxy providing for certain actions relating to
certain of the shares of common stock, options and warrants of the Company
owned by them;
WHEREAS, MergerSub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger (as defined in Section 1.01) and also to prescribe certain conditions
to the Merger;
WHEREAS, it is intended that the Merger be recorded as a
recapitalization for financial reporting purposes and both parties, after
discussion with their auditors, believe that the Merger is eligible for such
accounting treatment;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE 1
The Merger
Section 1.01. The Merger. (a) At the Effective Time,
MergerSub shall be merged (the "Merger") with and into the Company in
accordance with the Delaware Law, and in accordance with the terms and
conditions hereof, whereupon the separate existence of MergerSub shall
cease, and the Company shall be the surviving corporation (the "Surviving
Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company
and MergerSub will file a certificate of merger with the Secretary of State
of the State of Delaware and make all other filings or recordings required
by Delaware Law in connection with the Merger. The Merger shall become
effective at such time as the certificate of merger is duly filed with the
Secretary of State of the State of Delaware or at such later time as is
specified in the certificate of merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises and be
subject to all of the restrictions, disabilities and duties of the Company
and MergerSub, all as provided under Delaware Law.
(d) The Company hereby represents that its Board of Directors, at a
meeting duly called and held and acting on the unanimous recommendation of
the Board of Directors of the Company, other than any directors expected to
become affiliated with MergerSub, has (i) determined that this Agreement
and the transactions contemplated hereby, including the Merger, are fair to
and in the best interest of the Company's stockholders, (ii) approved this
Agreement and the transactions contemplated hereby, including the Merger,
which approval satisfies in full the requirements of the General
Corporation Law of the State of Delaware (the "Delaware Law") including,
without limitation, Section 203 thereof with respect to the transactions
contemplated hereby, and (iii) resolved to recommend approval and adoption
of this Agreement and the Merger by its stockholders. The Company further
represents that ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. has delivered to the Company's Board of
Directors its opinion that the consideration to be paid in the Merger is
fair to the holders of shares of common stock of the Company, par value
$0.01 per share (each, a "Share"), from a financial point of view.
Section 1.02. Conversion (or Retention) of Shares. At the
Effective Time:
(a) each Share held by the Company as treasury stock or owned by
MergerSub immediately prior to the Effective Time shall be canceled, and no
payment shall be made with respect thereto;
(b) each share of common stock, par value $.01 per share, of
MergerSub ("MergerSub Common Stock") outstanding immediately prior to the
Effective Time shall be converted into and become 1 share of common stock
of the Surviving Corporation with the same rights, powers and privileges as
the shares so converted;
(c) each share of preferred stock, par value $.01 per share, of
MergerSub ("MergerSub Preferred Stock"), if any, outstanding immediately
prior to the Effective Time shall be converted into and become 1 share of
preferred stock of the Surviving Corporation with the same rights, powers
and privileges as the shares of preferred stock so converted;
(d) each outstanding warrant to purchase shares of MergerSub common
stock (each, a "MergerSub Warrant") shall be automatically amended to
constitute a warrant to acquire shares of common stock of the Surviving
Corporation on the same terms and conditions as the MergerSub Warrant; and
(e) each Share outstanding immediately prior to the Effective Time
shall, except as otherwise provided in Section 1.02(a)-(d) or as provided
in Section 1.06 with respect to Shares as to which appraisal rights have
been exercised, be converted into the following (the "Merger
Consideration"):
(i) for each such Share with respect to which an election to
retain Company Stock (as defined below) has been effectively made and
not revoked or lost pursuant to Sections 1.03(c), (d) and (e) ("Stock
Electing Shares"), or is deemed made pursuant to Section 1.04(d)(ii), as
the case may be, the right to retain one share of common stock (the
"Stock Election Price"), par value $.01 per share ("Company Stock"); and
(ii) for each such Share (other than Stock Electing Shares and
Shares as to which an election to retain Company Stock is deemed made
pursuant to Section 1.04(d)(ii)), the right to receive in cash from
MergerSub an amount equal to $23.00 (the "Cash Election Price").
Section 1.03. Elections. (a) Each person who, on or prior to
the Election Date referred to in (c) below, is a record holder of Shares
will be entitled, with respect to such Shares, to make an unconditional
election on or prior to such Election Date to retain the Stock Election
Price (a "Stock Election"), on the basis hereinafter set forth. For
purposes of this Agreement, "Election" means a Stock Election.
(b) Prior to the mailing of the Company Proxy Statement (as defined in
Section 3.09), MergerSub shall appoint an agent reasonably acceptable to the
Company (the "Exchange Agent") for the purpose of exchanging certificates
representing Shares for the Merger Consideration.
(c) MergerSub shall prepare and mail a form of election, which form
shall be subject to the reasonable approval of the Company (the "Form of
Election"), with the Company Proxy Statement to the record holders of
Shares as of the record date for the Company Stockholder Meeting (as
defined in Section 5.02), which Form of Election shall be used by each
record holder of Shares who makes an Election with respect to any or all
its Shares. The Company will use its reasonable best efforts to make the
Form of Election and the Company Proxy Statement available to all persons
who become holders of Shares during the period between such record date and
the Election Date referred to below. Any such holder's Election shall have
been properly made only if the Exchange Agent shall have received at its
designated office, by 5:00 p.m., New York City time on the business day
(the "Election Date") next preceding the date of the Company Stockholder
Meeting, a Form of Election properly completed and signed and accompanied
by certificates for the Shares to which such Form of Election relates, duly
endorsed in blank or otherwise in form acceptable for transfer on the books
of the Company (or by an appropriate guarantee of delivery of such
certificates as set forth in such Form of Election from a firm which is a
member of a registered national securities exchange or of the National
Association of Securities Dealers, Inc. or a commercial bank or trust
company having an office or correspondent in the United States, provided
such certificates are in fact delivered to the Exchange Agent within five
New York Stock Exchange trading days after the date of execution of such
guarantee of delivery).
(d) Any Form of Election may be revoked by the holder submitting it
to the Exchange Agent only by written notice received by the Exchange Agent
(i) prior to 5:00 p.m., New York City time on the Election Date or (ii)
after the date of the Company Proxy Statement, if (and to the extent that)
the Exchange Agent is legally required to permit revocations, and the
Effective Time shall not have occurred prior to such date. In addition,
all Forms of Election shall automatically be revoked if the Exchange Agent
is notified in writing by MergerSub or the Company that the Merger has been
abandoned or this Agreement has been terminated. If a Form of Election is
revoked, the certificate or certificates (or guarantees of delivery, as
appropriate) for the Shares to which such Form of Election relates shall be
promptly returned to the stockholder submitting the same to the Exchange
Agent.
(e) The determination of the Exchange Agent shall be binding whether
or not Elections have been properly made or revoked pursuant to this
Section 1.03 with respect to Shares and when elections and revocations were
received by it. If the Exchange Agent determines that any Election either
(x) was not properly made or (y) was not submitted to or received by the
Exchange Agent with respect to any Shares, such Shares shall be converted
into Merger Consideration in accordance with Section 1.04(b)(iii) or
Section 1.04(d)(ii), as the case may be. The Exchange Agent shall also
make all computations as to the allocation and the proration contemplated
by Section 1.04, and any such computation shall be conclusive and binding
on the holders of Shares. The Exchange Agent may, with the mutual
agreement of MergerSub and the Company, make such rules as are consistent
with this Section 1.03 for the implementation of the elections provided for
herein as shall be necessary or desirable fully to effect such elections.
Section 1.04. Proration of Election Price. (a)
Notwithstanding anything in this Agreement to the contrary but subject to
Sections 1.02(a) and 1.06, the number of Shares to be converted into the
right to retain Company Stock at the Effective Time (the "Stock Election
Number") shall be the sum of (A) 1,474,345 plus (B) 5.3% of the number of
Shares, if any, issued after April 21, 1997 but prior to the Effective Time
in respect of Options (as defined below) or Warrants (as defined below)
(excluding for this purpose any Shares to be canceled pursuant to Section
1.02(a)).
(b) If the number of Stock Electing Shares exceeds in the aggregate the
Stock Election Number, then the Stock Electing Shares for each Stock Election
shall be converted into the right to retain the Stock Election Price or the
right to receive the Cash Election Price in accordance with the terms of
Section 1.02(e) in the following manner:
(i) A stock proration factor (the "Stock Proration Factor") shall
be determined by dividing the Stock Election Number by the total number
of Stock Electing Shares.
(ii) The number of Stock Electing Shares covered by each Stock
Election to be converted into the right to retain the Stock Election Price
shall be determined by multiplying the Stock Proration Factor by the total
number of Stock Electing Shares covered by such Stock Election.
(iii) Each Stock Electing Share, other than any Shares converted
into the right to receive the Stock Election Price in accordance with
Section 1.04(b)(ii), shall be converted into the right to receive the Cash
Election Price as if such shares were not Stock Electing Shares in
accordance with the terms of Section 1.02(e)(ii).
(c) If the number of Stock Electing Shares is equal to the Stock
Election Number, then all Stock Electing Shares shall be converted into the
right to receive the Stock Election Price in accordance with the terms of
Section 1.02(e)(i), and all Shares other than Stock Electing Shares shall
be converted into the right to receive the Cash Election Price.
(d) If the number of Stock Electing Shares is less in the aggregate
than the Stock Election Number, then:
(i) All Stock Electing Shares shall be converted into the right
to receive the Stock Election Price in accordance with Section 1.02(e)(i).
(ii) Such number of Shares with respect to which a Stock Election
is not in effect ("Non-Electing Shares") shall be converted into the right
to retain the Stock Election Price (and a Stock Election shall be deemed to
have been made with respect to such Shares) in accordance with Section
1.02(e) in the following manner:
(A) a cash proration factor (the "Cash Proration Factor")
shall be determined by dividing (x) the difference between the Stock
Election Number and the number of Stock Electing Shares, by (y) the
total number of Shares other than Stock Electing Shares and
Dissenting Shares (as defined in Section 1.06); and
(B) the number of Shares in addition to Stock Electing
Shares to be converted into the right to retain the Stock Election
Price shall be determined by multiplying the Cash Proration Factor by
the total number of Shares other than Stock Electing Shares and
Dissenting Shares so that the aggregate number of Stock Electing
Shares and Non-Electing Shares converted into such right equals the
Stock Election Number.
Subject to the provisions of Section 1.04(d)(ii), the Exchange
Agent shall determine (on a consistent basis among stockholders who held
Shares as to which they did not make the election referred to in Section
1.02(e)(i), pro rata to the number of shares as to which they did not make
such election) which Non-Electing Shares shall be converted into the right to
receive the Stock Election Price.
Section 1.05. Surrender and Payment. (a) As soon as
reasonably practicable as of or after the Effective Time, MergerSub shall
deposit with the Exchange Agent, for the benefit of the holders of Shares,
for exchange in accordance with this Article 1, the Merger Consideration.
For purposes of determining the Merger Consideration to be made available,
MergerSub shall assume that no holder of Shares will perfect his right to
appraisal of his Shares. Promptly after the Effective Time, MergerSub will
send, or will cause the Exchange Agent to send, to each holder of Shares at
the Effective Time a letter of transmittal for use in such exchange (which
shall specify that the delivery shall be effected, and risk of loss and
title shall pass, only upon proper delivery of the certificates
representing Shares to the Exchange Agent).
(b) Each holder of Shares that have been converted into a right to
receive the Merger Consideration, upon surrender to the Exchange Agent of a
certificate or certificates representing such Shares, together with a
properly completed letter of transmittal covering such Shares, will be
entitled to receive the Merger Consideration payable in respect of such
Shares. Until so surrendered, each such certificate shall, after the
Effective Time, represent for all purposes, only the right to receive such
Merger Consideration. No interest will be paid or will accrue on any cash
payable as Merger Consideration or in lieu of any fractional shares of
Company Stock.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the Person requesting such payment shall pay to the
Exchange Agent any transfer or other taxes required as a result of such
payment to a Person other than the registered holder of such Shares or
establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not payable. For purposes of this Agreement, "Person" means an
individual, a corporation, a limited liability company, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or any agency or instrumentality
thereof.
(d) After the Effective Time, there shall be no further registration of
transfers of Shares. If, after the Effective Time, certificates representing
Shares are presented to the Surviving Corporation, they shall be canceled and
exchanged for the Merger Consideration provided for, and in accordance with
the procedures set forth, in this Article 1.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.05(a) that remains unclaimed by the
holders of Shares six months after the Effective Time shall be returned to
MergerSub, upon demand, and any such holder who has not exchanged his
Shares for the Merger Consideration in accordance with this Section prior
to that time shall thereafter look only to MergerSub for payment of the
Merger Consideration in respect of his Shares. Notwithstanding the
foregoing, MergerSub shall not be liable to any holder of Shares for any
amount paid to a public official pursuant to applicable abandoned property
laws. Any amounts remaining unclaimed by holders of Shares two years after
the Effective Time (or such earlier date immediately prior to such time as
such amounts would otherwise escheat to or become property of any
governmental entity) shall, to the extent permitted by applicable law,
become the property of MergerSub free and clear of any claims or interest
of any Person previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.05(a) to pay for Shares for which
appraisal rights have been perfected shall be returned to MergerSub, upon
demand.
(g) No dividends or other distributions with respect to Company
Stock with a record date after the Effective Time shall be paid to the
holder of any unsurrendered certificate for Shares with respect to the
shares of Company Stock represented thereby and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 1.09
until the surrender of such certificate in accordance with this Article 1.
Subject to the effect of applicable laws, following surrender of any such
certificate, there shall be paid to the holder of the certificate
representing whole shares of Company Stock issued in exchange therefor,
without interest, (i) at the time of such surrender or as promptly after
the sale of the Excess Shares (as defined in Section 1.09) as practicable,
the amount of any cash payable in lieu of a fractional share of Company
Stock to which such holder is entitled pursuant to Section 1.09 and the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of
Company Stock, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective
Time but prior to such surrender and a payment date subsequent to such
surrender payable with respect to such whole shares of Company Stock.
Section 1.06. Dissenting Shares. Notwithstanding Section
1.02, Shares which are issued and outstanding immediately prior to the
Effective Time and which are held by a holder who has not voted such shares
in favor of the Merger, who shall have delivered a written demand for
appraisal of such Shares in the manner provided by the Delaware Law and
who, as of the Effective Time, shall not have effectively withdrawn or lost
such right to appraisal ("Dissenting Shares") shall not be converted into a
right to receive the Merger Consideration. The holders thereof shall be
entitled only to such rights as are granted by Section 262 of the Delaware
Law. Each holder of Dissenting Shares who becomes entitled to payment for
such Shares pursuant to Section 262 of the Delaware Law shall receive
payment therefor from the Surviving Corporation in accordance with the
Delaware Law; provided, however, that (i) if any such holder of Dissenting
Shares shall have failed to establish his entitlement to appraisal rights
as provided in Section 262 of the Delaware Law, (ii) if any such holder of
Dissenting Shares shall have effectively withdrawn his demand for appraisal
of such Shares or lost his right to appraisal and payment for his Shares
under Section 262 of the Delaware Law or (iii) if neither any holder of
Dissenting Shares nor the Surviving Corporation shall have filed a petition
demanding a determination of the value of all Dissenting Shares within the
time provided in Section 262 of the Delaware Law, such holder shall forfeit
the right to appraisal of such Shares and each such Share shall be treated
as if it had been a Non-Electing Share and had been converted, as of the
Effective Time, into a right to receive the Merger Consideration, without
interest thereon, from the Surviving Corporation as provided in Section
1.02 hereof. The Company shall give MergerSub prompt notice of any demands
received by the Company for appraisal of Shares, and MergerSub shall have
the right to participate in all negotiations and proceedings with respect
to such demands. The Company shall not, except with the prior written
consent of MergerSub, make any payment with respect to, or settle or offer
to settle, any such demands.
Section 1.07. Stock Options. (a ) Immediately prior to the
Effective Time, each outstanding option to acquire Shares granted to
employees and directors, whether vested or not (the "Options") shall be
canceled and, in lieu thereof, as soon as reasonably practicable as of or
after the Effective Time, the holders of such Options shall receive, with
respect to each Option, a cash payment in an amount equal to the product of
(x) the excess, if any, of $23.00 over the exercise price of such Option
multiplied by (y) the number of Shares subject to such Option.
(b) Prior to the Effective Time, the Company shall (i) obtain any
consents from holders of options to purchase Shares granted under the
Company's stock option or compensation plans or arrangements and (ii) make any
amendments to the terms of such stock option or compensation plans or
arrangements that are necessary to give effect to the transactions
contemplated by Section 1.07(a). Notwithstanding any other provision of
this Section, payment may be withheld in respect of any Option until
necessary consents are obtained.
Section 1.08. Warrants. The Company shall use its
reasonable best efforts to cause holders of all outstanding warrants
("Warrants") to surrender such Warrants to the Company prior to the
Effective Time in exchange for payment immediately after the Effective Time
of an amount equal to the difference between the exercise price in respect
of each Share for which such Warrant is exercisable and $23.00, multiplied
by the number of Shares subject to such Warrant, and upon such other terms
and conditions satisfactory to MergerSub. With respect to Warrants that
are not surrendered prior to the Effective Time, after the Effective Time,
the Surviving Corporation shall comply with all applicable terms of such
unsurrendered Warrants.
Section 1.09. Fractional Shares. (a) No certificates or
scrip representing fractional shares of Company Stock shall be issued upon
the surrender for exchange of certificates representing Shares, and such
fractional share interests will not entitle the owner thereof to vote or to
any rights of a stockholder of the Surviving Corporation; and
(b) Notwithstanding any other provision of this Agreement,
each holder of Shares exchanged pursuant to the Merger who would otherwise
have been entitled to receive a fraction of a share of Company Stock (after
taking into account all Shares delivered by such holder) shall receive, in
lieu thereof, a cash payment (without interest) representing such holder's
proportionate interest in the net proceeds from the sale by the Exchange
Agent (following the deduction of applicable transaction costs), on behalf
of all such holders, of the shares (the "Excess Shares") of Company Stock
representing such fractions. Such sale shall be made as soon as
practicable after the Effective Time.
ARTICLE 2
The Surviving Corporation
Section 2.01. Certificate of Incorporation. The
certificate of incorporation of the Company in effect immediately prior to
the Effective Time shall be amended as of the Effective Time as set forth
in Exhibit A, and as so amended, shall be the certificate of incorporation
of the Surviving Corporation until thereafter amended in accordance with
applicable law.
Section 2.02. Bylaws. The bylaws of MergerSub in effect at
the Effective Time shall be the bylaws of the Surviving Corporation until
amended in accordance with applicable law.
Section 2.03. Directors and Officers. From and after the
Effective Time, until successors are duly elected or appointed and
qualified in accordance with applicable law, the directors of MergerSub at
the Effective Time shall be the directors of the Surviving Corporation, and
the officers of the Company at the Effective Time shall be the officers of
the Surviving Corporation.
ARTICLE 3
Representations and Warranties of the Company
The Company represents and warrants to MergerSub that:
Section 3.01. Corporate Existence and Power. The Company
is a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware, and has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted. The Company is duly
qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned or leased by
it or the nature of its activities makes such qualification necessary,
except for those jurisdictions where the failure to be so qualified would
not, individually or in the aggregate, have a Material Adverse Effect. The
Company has heretofore delivered to MergerSub true and complete copies of
the Company's certificate of incorporation and bylaws as currently in
effect. For purposes of this Agreement, "Material Adverse Effect" means
any material adverse effect on the condition (financial or otherwise),
business, assets, or results of operations of the Company and the
Subsidiaries taken as a whole, but excluding (i) any change resulting from
general economic conditions and (ii) with respect to Section 3.10(a) and
Section 3.10(h) (in the case of the latter, with respect to agreements
only), any change arising out of the transactions contemplated by this
Agreement and the public announcement thereof.
Section 3.02. Corporate Authorization. The execution,
delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby are
within the Company's corporate powers and, except for any required approval
by the Company's stockholders by majority vote in connection with the
consummation of the Merger, have been duly authorized by all necessary
corporate and stockholder action. This Agreement constitutes a valid and
binding agreement of the Company.
Section 3.03. Governmental Authorization. The execution,
delivery and performance by the Company of this Agreement and the
consummation of the Merger by the Company require no action by or in
respect of, or filing with, any governmental body, agency, official or
authority other than the filing of a certificate of merger in accordance
with Delaware Law; compliance with any applicable requirements of the ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"); compliance with any applicable requirements of the Securities
Exchange Act of 1934, as amended and the rules and regulations promulgated
thereunder (the "Exchange Act"); compliance with the applicable
requirements of the Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder (the "Securities Act"); compliance with
any applicable foreign or state securities or Blue Sky laws; and (f) where
the failure to take such action would not, individually or in the
aggregate, have a Material Adverse Effect.
Section 3.04. Non-contravention. Except as set forth on
Schedule 3.04, the execution, delivery and performance by the Company of
this Agreement and the consummation by the Company of the transactions
contemplated hereby do not and will not contravene or conflict with the
certificate of incorporation or bylaws of the Company, assuming compliance
with the matters referred to in Section 3.03, contravene or conflict with
or constitute a violation of any provision of any law, regulation,
judgment, writ, injunction, order or decree of any court or governmental
authority binding upon or applicable to the Company or any Subsidiary or
any of their properties or assets, except under the Revolving Credit
Agreement dated as of April 26, 1996 among the Company, certain of its
Subsidiaries and the banks named therein, as amended (the "Revolving Credit
Agreement") constitute a default under or give rise to a right of
termination, cancellation or acceleration of any right or obligation of the
Company or any Subsidiary or to a loss of any benefit to which the Company
or any Subsidiary is entitled under any provision of any agreement,
contract or other instrument binding upon the Company or any Subsidiary or
any license, franchise, permit or other similar authorization held by the
Company or any Subsidiary, or result in the creation or imposition of any
Lien on any asset of the Company or any Subsidiary, except, in the case of
clauses (b), (c) and (d), to the extent that any such violation, failure to
obtain any such consent or other action, default, right, loss or Lien would
not, individually or in the aggregate, have a Material Adverse Effect. For
purposes of this Agreement, "Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset.
Section 3.05. Capitalization. The authorized capital stock
of the Company consists of 100,000,000 shares of common stock ("Common
Stock"), par value $.01 per share, of which as of April 21, 1997, there
were outstanding 27,817,830 shares of Common Stock and Options to purchase
an aggregate of not more than 2,932,014 shares of Common Stock (of which
options to purchase an aggregate of 1,364,014 shares of Common Stock were
exercisable) and 5,000,000 shares of preferred stock ("Preferred Stock"),
par value $.01 per share, of which as of April 21, 1997 none were issued
and outstanding. As of April 21, 1997 there were Warrants to purchase:
(i) 134,478 shares of common stock of the Company at an exercise price of
$5.90 per share and (ii) 468,750 shares or common stock of the Company at
an exercise price of $0.10 per share. The aggregate exercise price of the
(i) Options outstanding as of April 21, 1997 is $22,064,966.50 and (ii)
Warrants outstanding as of April 21, 1997 is $840,295.20. All outstanding
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. Except as set forth
in this Section and except for changes since April 21, 1997 resulting from
the exercise of Options and Warrants, in each case, outstanding on such
date, there are outstanding no shares of capital stock or other voting
securities of the Company, no securities of the Company convertible into or
exchangeable for shares of capital stock or voting securities of the
Company, and no options or other rights to acquire from the Company, and no
obligation of the Company to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of the Company (the items in clauses 3.05(a), 3.05(b) and
3.05(c) being referred to collectively as the "Company Securities"). There
are no outstanding obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any Company Securities.
Section 3.06. Subsidiaries. Each Subsidiary is a
corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation, has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted and is duly qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary, except
where the failure to have such licenses, authorizations, consents and
approvals or for those jurisdictions where failure to be so qualified would
not, individually or in the aggregate, have a Material Adverse Effect. For
purposes of this Agreement, "Subsidiary" means any corporation or other
entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are directly or indirectly owned by the
Company and/or one or more Subsidiary, except for Properties Holding
Corporation, Decision Data Computer Investment Corporation, Decision Data
Computer International S.A. and Properties Development Corporation, none of
which (i) is performing any activity significant to the business of the
Company and its Subsidiaries or (ii) has any material assets or liabilities
(together, the "Immaterial Subsidiaries"), provided, however that for the
purposes of Articles 5, 6 and 7 hereof, the term "Subsidiaries" shall be
deemed to include the Immaterial Subsidiaries. All Subsidiaries and their
respective jurisdictions of incorporation are identified in the Company's
annual report on Form 10-K for the fiscal year ended June 30, 1996 (the
"Company 10-K").
(b) Except for the restrictions on disposition of capital stock
pursuant to the Revolving Credit Agreement, all of the outstanding capital
stock of, or other ownership interests in, each Subsidiary, is owned by the
Company, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other ownership
interests). All such capital stock has been duly authorized and validly
issued and is fully paid and non-assessable. There are no outstanding
securities of the Company or any Subsidiary convertible into or
exchangeable for shares of capital stock or other voting securities or
ownership interests in any Subsidiary, and options or other rights to
acquire from the Company or any Subsidiary, and no other obligation of the
Company or any Subsidiary to issue, any capital stock, voting securities or
other ownership interests in, or any securities convertible into or
exchangeable for any capital stock, voting securities or ownership
interests in, any Subsidiary (the items in clauses 3.06(b)(i) and
3.06(b)(ii) being referred to collectively as the "Subsidiary Securities").
There are no outstanding obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any outstanding Subsidiary
Securities.
Section 3.07. SEC Filings. The Company has made available
to MergerSub the Company 10-K, its quarterly reports on Form 10-Q for its
fiscal quarters ended September 30, 1996 and December 31, 1996
(collectively, the "Forms 10-Q") its proxy or information statements
relating to meetings of, or actions taken without a meeting by, the
stockholders of the Company held since January 1, 1996, and all of its
other reports, statements, schedules and registration statements filed with
the Securities and Exchange Commission (the "SEC") since January 1, 1996
(the documents referred to in clauses (i)-(iv), together with Schedule 3.08
collectively, the "SEC Documents").
(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
(c) Each such registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act, as of the date such
statement or amendment became effective did not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
Section 3.08. Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial statements
of the Company included in its annual reports on Form 10-K, in the Forms 10-Q
and in Schedule 3.08 fairly present, in all material respects, in conformity
with generally accepted accounting principles applied on a consistent basis
(except as may be indicated in the notes thereto), the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
thereof and their consolidated results of operations and changes in financial
position for the periods then ended (subject to normal year-end adjustments in
the case of any unaudited interim financial statements). For purposes of this
Agreement, "Balance Sheet" means the consolidated balance sheet of the Company
and its subsidiaries as of June 30, 1996 set forth in the Company 10-K and
"Balance Sheet Date" means June 30, 1996.
Section 3.09. Disclosure Documents. (a) Each document required
to be filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "Company Disclosure Documents"),
including, without limitation, the proxy or information statement of the
Company containing information required by Regulation 14A under the
Exchange Act, and, if applicable, Rule 13e-3 and Schedule 13E-3 under the
Exchange Act (the "Company Proxy Statement"), to be filed with the SEC in
connection with the Merger, and any amendments or supplements thereto will,
when filed, comply as to form in all material respects with the applicable
requirements of the Exchange Act. The representations and warranties
contained in this Section 3.09(a) will not apply to statements or omissions
included in the Company Disclosure Documents based upon information
furnished to the Company in writing by MergerSub specifically for use
therein.
(b) At the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company and at
the time such stockholders vote on adoption of this Agreement, the Company
Proxy Statement, as supplemented or amended, if applicable, will not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading.
At the time of the filing of any Company Disclosure Document other than the
Company Proxy Statement and at the time of any distribution thereof, such
Company Disclosure Document will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading. The representations and warranties
contained in this Section 3.09(b) will not apply to statements or omissions
included in the Company Disclosure Documents based upon information
furnished to the Company in writing by MergerSub specifically for use
therein.
(c) The information with respect to the Company or any Subsidiary
that the Company furnishes to MergerSub in writing specifically for use in
the MergerSub Disclosure Documents (as defined in Section 6.01) will not,
at the time of the filing thereof, at the time of any distribution thereof
and at the time of the meeting of the Company's stockholders, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they were made,
not misleading.
Section 3.10. Absence of Certain Changes. Since the
Balance Sheet Date, the Company and Subsidiaries have conducted their
business in the ordinary course consistent with past practice and there has
not been:
(a) except as disclosed in the Forms 10-Q and Schedule 3.08, any event,
occurrence or development of a state of facts which, individually or in the
aggregate, has had, or would reasonably be expected to have a Material Adverse
Effect;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the
Company, or (other than any retirement of Options or Warrants contemplated
pursuant to this Agreement) any repurchase, redemption or other acquisition
by the Company or any Subsidiary of any outstanding shares of capital stock
or other securities of, or other ownership interests in, the Company or any
Subsidiary;
(c) except as disclosed in the SEC Documents, any amendment of any
material term of any outstanding security of the Company or any Subsidiary;
(d) except as disclosed in the SEC Documents, any incurrence,
assumption or guarantee by the Company or any Subsidiary of any
indebtedness for borrowed money, other than in the ordinary course of
business and in amounts and on terms consistent with past practices;
(e) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company or
any Subsidiary which, individually or in the aggregate, has had, or would
reasonably be expected to have, a Material Adverse Effect;
(f) except as disclosed in Schedule 5.01, any material change in any
method of accounting or accounting practice by the Company or any
Subsidiary, except for any such change required by reason of a concurrent
change in generally accepted accounting principles;
(g) except as disclosed in the SEC Documents or in Schedule 3.10(g),
any grant of any severance or termination pay to any director, officer or
employee of the Company or any Subsidiary, entering into of any employment,
deferred compensation or other similar agreement (or any amendment to any
such existing agreement) with any director, officer or employee of the
Company or any Subsidiary, increase in benefits payable under any existing
severance or termination pay policies or employment agreements or increase
in compensation, bonus or other benefits payable to directors, officers or
employees of the Company or any Subsidiary, other than in the ordinary
course of business consistent with past practice; or
(h) any cancellation of any licenses, sublicenses, franchises,
permits or agreements to which the Company or any Subsidiary is a party, or
any notification to the Company or any Subsidiary that any party to any
such arrangements intends to cancel or not renew such arrangements beyond
its expiration date as in effect on the date hereof, which cancellation or
notification, individually or in the aggregate, has had, or would
reasonably be expected to have, a Material Adverse Effect.
Section 3.11. No Undisclosed Material Liabilities. There
are no liabilities of the Company or any Subsidiary of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or
otherwise, which, individually or in the aggregate, would reasonably be
expected to be material to the business of the Company and its Subsidiaries
taken as a whole, other than:
(a) liabilities disclosed or provided for in the Balance Sheet;
(b) liabilities disclosed in the SEC Documents filed after the
Balance Sheet Date but prior to the date of this Agreement;
(c) liabilities incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date, which in the
aggregate would not have a Material Adverse Effect;
(d) liabilities under this Agreement; and
(e) liabilities under contracts or agreements of the Company or any
Subsidiary entered into in the ordinary course of business (as to which
contracts or agreements there is no breach or violation by the Company or any
Subsidiary).
Section 3.12. Litigation. Except as disclosed in Schedule
3.12, there is no action, suit, investigation or proceeding (or any basis
therefor) pending against, or to the knowledge of the Company threatened
against or affecting, the Company or any Subsidiary or any of their
respective properties before any court or arbitrator or any governmental
body, agency or official which, if determined or resolved adversely to the
Company or any Subsidiary in accordance with the plaintiff's demands, would
reasonably be expected to have a Material Adverse Effect or which in any
manner challenges or seeks to prevent, enjoin, alter or materially delay
the Merger or any of the other transactions contemplated hereby.
Section 3.13. Taxes. (a) All material tax returns,
statements, reports and forms (including estimated tax returns and reports
and information returns and reports) required to be filed with any taxing
authority with respect to any tax period (or portion thereof) ending on or
before the Effective Time (a "Pre-Closing Tax Period") by or on behalf of
the Company or any Subsidiary of the Company (collectively, the "Returns"),
were filed when due (including any applicable extension periods) in
accordance with all applicable laws.
(b) The Company and its Subsidiaries have timely paid, or withheld and
remitted to the appropriate taxing authority, all material taxes shown as due
and payable on all Returns that have been filed.
(c) The charges, accruals and reserves for taxes with respect to the
Company and any Subsidiary for any Pre-Closing Tax Period (including any
Pre-Closing Tax Period for which no Return has yet been filed, with respect
to which Periods the Company has made estimates in accordance with past
practice) reflected on the books of the Company and its Subsidiaries
(excluding any provision for deferred income taxes) are adequate to cover
such taxes.
(d) There is no material claim (including under any indemnification
or tax-sharing agreement), audit, action, suit, proceeding, or
investigation now pending or threatened in writing against or in respect of
any tax or "tax asset" of the Company or any Subsidiary, other than
periodic sales tax audits occurring in the ordinary course of business, the
resolution of which, individually or in the aggregate, the Company believes
will not have a Material Adverse Effect, and claims, audits, actions,
suits, proceedings or investigations with respect to which the Company is
indemnified in full pursuant to the Stock Purchase Agreement among Decision
Servcom, Inc., ▇▇▇▇ Atlantic Business Systems Services, Inc., and ▇▇▇▇
Atlantic Business Systems, Inc. dated September 19, 1995. For purposes of
this Section 3.13, the term "tax asset" shall include any net operating
loss, net capital loss, investment tax credit, foreign tax credit,
charitable deduction or any other credit or tax attribute which could
reduce taxes.
(e) There are no Liens for taxes upon the assets of the Company or its
Subsidiaries except for Liens for current taxes not yet due.
(f) Neither the Company nor any of its Subsidiaries has been a
United States real property holding corporation within the meaning of
Section 897(c)(2) of the Internal Revenue Code of 1986, as amended (the
"Code") during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code.
Section 3.14. ERISA. (a) Schedule 3.14(a) sets forth a
list identifying each "employee benefit plan", as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974 ("ERISA"), which is
subject to any provision of ERISA and is maintained, administered or
contributed to by the Company or any affiliate (as defined below) and
covers any employee or former employee of the Company or any affiliate or
under which the Company or any affiliate has any liability. Copies of such
plans (and, if applicable, related trust agreements) and all amendments
thereto and written interpretations thereof have been furnished to
MergerSub together with the three most recent annual reports (Form 5500
including, if applicable, Schedule B thereto) prepared in connection with
any such plan and the most recent actuarial valuation report prepared in
connection with any such plan. Such plans are referred to collectively
herein as the "Employee Plans". For purposes of this Section, "affiliate"
of any Person means any other Person which, together with such Person,
would be treated as a single employer under Section 414 of the Code. The
only Employee Plans which individually or collectively would constitute an
"employee pension benefit plan" as defined in Section 3(2) of ERISA (the
"Pension Plans") are identified as such in the list referred to above. The
Company will make available to MergerSub complete age, salary, service and
related data as of the most recently available date for employees and
former employees of the Company and any affiliate covered under the Pension
Plans.
(b) No Employee Plan constitutes a "multiemployer plan", as defined in
Section 3(37) of ERISA (a "Multiemployer Plan"), and no Employee Plan is
maintained in connection with any trust described in Section 501(c)(9) of the
Code. Except as otherwise identified in Schedule 3.14(b), no Employee Plan is
subject to Title IV of ERISA and no "accumulated funding deficiency", as
defined in Section 412 of the Code, has been incurred with respect to any
Pension Plan, whether or not waived. The Company knows of no "reportable
event", within the meaning of Section 4043 of ERISA, and no event described in
Section 4041, 4042, 4062 or 4063 of ERISA has occurred in connection with any
Employee Plan, other than a "reportable event" or other event that
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Material Adverse Effect. To the Company's knowledge, no
condition exists and no event has occurred that could constitute grounds for
termination of any Employee Plan subject to Title IV of ERISA and neither the
Company nor any of its affiliates has incurred any liability under Title IV of
ERISA arising in connection with the termination of, or complete or partial
withdrawal from, any plan covered or previously covered by Title IV of ERISA.
Nothing done or omitted to be done and no transaction or holding of any asset
under or in connection with any Employee Plan has or will make the Company or
any Subsidiary, any officer or director of the Company or any Subsidiary
subject to any liability under Title I of ERISA or liable for any tax pursuant
to Section 4975 of the Code which liability, individually or in the aggregate,
has had, or would reasonably be expected to have, a Material Adverse Effect.
(c) Each Employee Plan which is intended to be qualified under
Section 401(a) of the Code is either a standardized prototype plan covered
by an opinion letter issued by the IRS or an individually designed plan
covered by a determination letter issued by the IRS and, to the knowledge
of the Company, nothing has occurred since the date of the opinion or
determination letter which resulted, or is likely to result, in the
Company's inability to rely on such letters. The Company has furnished to
MergerSub copies of the most recent Internal Revenue Service opinion
determination letters with respect to each such Plan. Each Employee Plan
has been maintained in substantial 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.
(d) Except as set forth in Schedule 3.14(d) there is no contract,
agreement, plan or arrangement covering any employee or former employee of
the Company or any affiliate that, individually or collectively, could give
rise to the payment of any amount that would not be deductible pursuant to
the terms of Section 280G of the Code.
(e) Schedule 3.14(e) sets forth a list of each employment, severance
or other similar contract, arrangement or policy and each plan or
arrangement (written or oral) providing for insurance coverage (including
any self-insured arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement benefits
or for deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation or other forms of incentive compensation or post-retirement
insurance, compensation or benefits which is not an Employee Plan, is
entered into, maintained or contributed to, as the case may be, by the
Company or any of its Subsidiaries and covers any employee or former
employee of the Company or any of its Subsidiaries. Such contracts, plans
and arrangements as are described above, copies or descriptions of all of
which have been furnished previously to MergerSub are referred to
collectively herein as the "Benefit Arrangements". Each Benefit
Arrangement has been maintained in substantial compliance with its terms
and with the requirements prescribed by any and all statutes, orders, rules
and regulations that are applicable to such Benefit Arrangement.
(f) To the knowledge of the Company, no condition exists that would
prevent the Company or any Subsidiary from amending or terminating any
Employee Plan or Benefit Arrangement providing health or medical benefits
in respect of any active employee of the Company or any Subsidiary.
(g) Except as disclosed on Schedule 3.14(g), there has been no
amendment to, written interpretation or announcement (whether or not
written) by the Company or any of its affiliates relating to, or change in
employee participation or coverage under, any Employee Plan or Benefit
Arrangement which would increase materially the expense of maintaining such
Employee Plan or Benefit Arrangement above the level of the expense
incurred in respect thereof for the fiscal year ended on the Balance Sheet
Date other than with regard to any changes mandated by law.
(h) Except as disclosed in Section 3.15, neither the Company nor any
Subsidiary is a party to or subject to any union contract or any employment
contract or arrangement providing for annual future compensation (excluding
sales commissions) of $150,000 or more with any officer, director or employee.
Section 3.15. Employees. The Company has disclosed to
MergerSub in writing on the date of this Agreement the names, titles,
annual salaries and other compensation of all employees of the Company (the
"Key Employees") whose base compensation, together with any other cash
compensation (excluding sales commissions), was in excess of $150,000 per
annum for calendar year 1996. Except as disclosed to MergerSub in writing
on the date of this Agreement, none of the Key Employees has indicated to
the Company in writing on or prior to the date hereof that he or she
intends to resign or retire as a result of the transactions contemplated by
this Agreement or otherwise within three months after the Effective Time.
Section 3.16. Labor Matters. The Company is in compliance
with all currently applicable laws respecting employment practices, terms
and conditions of employment and wages and hours, and is not engaged in any
unfair labor practice, the failure to comply with which or engagement in
which, as the case may be, individually or in the aggregate, has not had,
and would not reasonably be expected to have, a Material Adverse Effect.
There is no unfair labor practice complaint pending or, to the knowledge of
the Company, threatened against the Company before the National Labor
Relations Board. Except as otherwise set forth on Schedule 3.16, there are
no strikes, slowdowns, union organizational campaigns or other protected
concerted activity under the National Labor Relations Act or, to the
knowledge of Company, threats thereof, by or with respect to any employees
of the Company.
Section 3.17. Compliance with Laws and Court Orders.
Neither the Company nor any Subsidiary is in violation of, or has since
January 1, 1996 violated, and to the knowledge of the Company none is under
investigation with respect to or has been threatened to be charged with or
given notice of any violation of, in each case, by any governmental agency
or authority, any applicable law, rule, regulation, judgment, injunction,
order or decree, except for violations that have not had, and would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
Section 3.18. Licenses and Permits. Except as set forth on
Schedule 3.18 or except as has not had, and would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, the
Permits are valid and in full force and effect, neither the Company nor any
Subsidiary is in default under, and no condition exists that with notice or
lapse of time or both would constitute a default under, the Permits and none
of the Permits will be terminated or impaired or become terminable, in whole
or in part, as a result of the transactions contemplated hereby. "Permits"
means each material license, franchise, permit, certificate, approval or other
similar authorization affecting, or relating in any way to, the assets or
business of the Company and its Subsidiaries.
Section 3.19. Repairable Parts. The repairable parts set
forth in the Balance Sheet were stated therein at cost less accumulated
amortization. Since the Balance Sheet Date, the repairable parts of the
Company and its Subsidiaries have been maintained in the ordinary course of
business. All such repairable parts are owned free and clear of all Liens,
except for a purchase money security interest in certain parts in favor of
Electronic Data Systems Corp. to secure the issuance of approximately
$2,000,000 of credits. The repairable parts recorded on the Balance Sheet
consist of, and all repairable parts of the Company and its Subsidiaries as
of the Effective Time will consist of, items of a quality usable in the
normal course of business consistent with past practices (it being
understood that at any given time, a portion of repairable parts are not in
good repair) and are and will be in quantities sufficient for the normal
operation of the business of the Company and its Subsidiaries in accordance
with past practice.
Section 3.20. Intellectual Property. Except for that
litigation involving certain independent service providers referred to in
"Item 3. Legal Proceedings" in the Company 10-K, provided that the Company
is not a party to litigation of such nature which would be required to be
disclosed in response to this sentence, the Company and the Subsidiaries
own or possess adequate licenses or other rights to use all Intellectual
Property Rights necessary to conduct the business now operated by them,
except where the failure to own or possess such licenses or rights,
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Material Adverse Effect. To the knowledge of the
Company, the Intellectual Property Rights of the Company and the
Subsidiaries do not conflict with or infringe upon any Intellectual
Property Rights of others to the extent that, if sustained, such conflict
or infringement, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect. For purposes of this
Agreement, "Intellectual Property Right" means any trademark, service ▇▇▇▇,
trade name, mask work, copyright, patent, software license, other data
base, invention, trade secret, know-how (including any registrations or
applications for registration of any of the foregoing) or any other similar
type of proprietary intellectual property right.
Section 3.21. Finders' Fees. With the exception of fees
payable to ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., a copy of whose engagement agreement has been
provided to MergerSub, there is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on
behalf of, the Company or any Subsidiary who might be entitled to any fee
or commission from the Company or any Subsidiary or any of its affiliates
upon consummation of the transactions contemplated by this Agreement.
Section 3.22. Inapplicability of Certain Restrictions.
Section 203 of the Delaware Law does not in any way restrict the
consummation of the Merger or the other transactions contemplated by this
Agreement. The adoption of this Agreement by the affirmative vote of the
holders of Shares entitling such holders to exercise at least a majority of
the voting power of the Shares is the only vote of holders of any class or
series of the capital stock of the Company required to adopt this Agreement
or to approve the Merger or any of the other transactions contemplated
hereby, and no higher or additional vote is required pursuant to of the
Company's certificate of incorporation or otherwise.
Section 3.23. Rights Plan. Neither the Company nor any of its
Subsidiaries has any rights plan or similar common stock or preferred stock
purchase plan or similar arrangement.
ARTICLE 4
Representations and Warranties of MergerSub
MergerSub represents and warrants to the Company that:
Section 4.01. Corporate Existence and Power. MergerSub is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted. Since the date of its
incorporation, MergerSub has not engaged in any activities other than in
connection with or as contemplated by this Agreement and the Merger or in
connection with arranging any financing required to consummate the
transactions contemplated hereby. MergerSub has furnished to the Company true
and correct copies of its certificate of incorporation and by-laws, which
shall not be amended or modified prior to the Effective Time except to reflect
the terms of the MergerSub Preferred Stock.
Section 4.02. Corporate Authorization. The execution,
delivery and performance by MergerSub of this Agreement and the
consummation by MergerSub of the transactions contemplated hereby are
within the corporate powers of MergerSub and have been duly authorized by
all necessary corporate and stockholder action. This Agreement constitutes
a valid and binding agreement of MergerSub.
Section 4.03. Governmental Authorization. The execution,
delivery and performance by MergerSub of this Agreement and the
consummation by MergerSub of the transactions contemplated by this
Agreement require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than (a) the filing
of a certificate of merger in accordance with the Delaware Law, (b)
compliance with any applicable requirements of the HSR Act; (c) compliance
with any applicable requirements of the Exchange Act; (d) compliance with
the applicable requirements of the Securities Act; and (e) compliance with
any applicable foreign or state securities or Blue Sky laws.
Section 4.04. Non-contravention. The execution, delivery
and performance by MergerSub of this Agreement and the consummation by
MergerSub of the transactions contemplated hereby do not and will not
contravene or conflict with the certificate of incorporation or bylaws of
MergerSub, assuming compliance with the matters referred to in Section
4.03, contravene or conflict with any provision of law, regulation,
judgment, order or decree binding upon MergerSub, or constitute a default
under or give rise to any right of termination, cancellation or
acceleration of any right or obligation of MergerSub or to a loss of any
benefit to which MergerSub is entitled under any agreement, contract or
other instrument binding upon MergerSub.
Section 4.05. Disclosure Documents. (a) The information
with respect to MergerSub that MergerSub furnishes to the Company in
writing specifically for use in any Company Disclosure Document will not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading
in the case of the Company Proxy Statement at the time the Company Proxy
Statement or any amendment or supplement thereto is first mailed to
stockholders of the Company, at the time the stockholders vote on adoption
of this Agreement and at the Effective Time, and in the case of any Company
Disclosure Document other than the Company Proxy Statement, at the time of
the filing thereof and at the time of any distribution thereof.
(b) The MergerSub Disclosure Documents (as defined in Section
6.01), when filed, will comply as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and will
not at the time of the filing thereof, at the time of any distribution thereof
or at the time of the meeting of the Company's stockholders, contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, provided, that this
representation and warranty will not apply to statements or omissions in the
MergerSub Disclosure Documents based upon information furnished to MergerSub
in writing by the Company specifically for use therein.
Section 4.06. Finders' Fees. Except for ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation ("DLJSC"), a copy of whose engagement
agreement has been provided to the Company and whose fees will be paid by
MergerSub, there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of MergerSub who
might be entitled to any fee or commission from MergerSub or any of its
affiliates upon consummation of the transactions contemplated by this
Agreement.
Section 4.07. Financing. The Company has received copies
of a commitment letter dated May 4, 1997 from DLJ Merchant Banking Partners
II, L.P., DLJ Offshore Partners II, C.V., DLJ Diversified Partners, C.V.,
DLJ Funding II, Inc., UK Investment Plan 1997 Partners and DLJ First ESC
LLC pursuant to which each of the foregoing has committed, subject to the
terms and conditions set forth therein, to purchase securities of MergerSub
for an aggregate amount equal to $310,000,007, a letter dated May 4, 1997
from DLJSC pursuant to which DLJSC has indicated that it is highly
confident of its ability to place privately, or underwrite in the public
markets, Senior Subordinated Notes of DecisionOne Corporation, a Delaware
corporation ("Operating Co.") in the amount of $150,000,000, and a
commitment letter dated April 30, 1997 from DLJ Capital Funding, Inc.
("DLJ Senior Debt Fund") pursuant to which DLJ Senior Debt Fund has
committed, subject to the terms and conditions set forth therein, to enter
into one or more credit agreements providing for loans to Operating Co. of
up to $575,000,000. As used in this Agreement, the aforementioned entities
shall hereinafter be referred to as the "Financing Entities." The
aforementioned credit agreements and commitments to purchase equity
securities of MergerSub or Operating Co. shall be referred to as the
"Financing Agreements" and the financing to be provided thereunder and
under the arrangements described in clause (b) above shall be referred to
as the "Financing." The aggregate proceeds of the Financing are in an
amount sufficient to pay the Merger Consideration, to repay all of the
Company's and its Subsidiaries' indebtedness together with any interest,
premium or penalties payable in connection therewith, to provide a
reasonable amount of working capital financing and to pay related fees and
expenses (collectively, the "Required Amounts"). As of the date hereof,
none of the commitment letters relating to the Financing Agreements
referred to above has been withdrawn and MergerSub does not know of any
facts or circumstances that may reasonably be expected to result in any of
the conditions set forth in the commitment letters relating to the
Financing Agreements not being satisfied. MergerSub believes that the
Financing will not create any liability to the directors and stockholders
of the Company under any federal or state fraudulent conveyance or transfer
law. MergerSub further believes that, upon the consummation of the
transactions contemplated hereby, including, without limitation, the
Financing, the Surviving Corporation (i) will not become insolvent, (ii)
will not be left with unreasonably small capital, (iii) will not have
incurred debts beyond its ability to pay such debts as they mature, and
(iv) the capital of the Company will not become impaired.
Section 4.08. Capitalization. The authorized capital stock
of MergerSub consists of (i) 30,000,000 shares of MergerSub Common Stock,
of which as of the date hereof, there were outstanding 101 shares and (ii)
15,000,000 shares of MergerSub Preferred Stock, of which as of the date
hereof no shares were outstanding. All outstanding shares of capital stock
of MergerSub have been duly authorized and validly issued and are fully
paid and nonassessable. As of the moment immediately prior to the
Effective Time, 9,782,609 shares of MergerSub Common Stock, 3,400,000
shares of MergerSub Preferred Stock (or, in lieu thereof, Senior Discount
Notes of MergerSub in an equivalent proceeds amount of $85,000,000) and
MergerSub Warrants to acquire 1,417,180 shares of MergerSub Common Stock at
an exercise price of not less than $0.01 per share, will be outstanding;
provided that if any Shares are issued after the date hereof but prior to
the Effective Time in respect of Options or Warrants as set forth in
Section 1.04(a), the number of MergerSub Warrants shall be increased to
reflect any such issuances.
ARTICLE 5
Covenants of the Company
The Company agrees that:
Section 5.01. Conduct of the Company. Except as otherwise
specifically provided in this Agreement, from the date hereof to the Effective
Time, the Board of Directors of the Company shall not approve or authorize any
action that would allow the Company and its Subsidiaries to carry on their
respective businesses other than in the ordinary and usual course of business
and consistent with past practice or any action that would prevent the Company
and its Subsidiaries from using their best efforts to preserve intact their
respective present business organizations, maintain in effect all federal,
state and local licenses, approvals and authorizations, including, without
limitation, all permits that are required for the Company or any of its
Subsidiaries to carry on its business, keep available the services of their
respective key officers and employees and maintain satisfactory relationships
with their respective customers, lenders, suppliers and others having business
relationships with any of them. Without limiting the generality of the
foregoing, and except as otherwise specifically provided in this Agreement,
without the prior written consent of MergerSub, prior to the Effective Time,
the Board of Directors of the Company shall not, nor shall it authorize or
direct the Company or any Subsidiary, directly or indirectly, to:
(a) adopt or propose any change in its certificate of incorporation or
bylaws (other than as contemplated by this Agreement);
(b) except pursuant to existing agreements or arrangements acquire (by
merger, consolidation or acquisition of stock or assets) any material
corporation, partnership or other business organization or division thereof,
or sell, lease or otherwise dispose of a material subsidiary or a material
amount of assets or securities; make any investment whether by purchase of
stock or securities, contributions to capital or any property transfer, or
purchase any property or assets of any other individual or entity other than
the purchase of inventory, supplies, office equipment or repairable parts in
the ordinary course of business (it being understood that purchases pursuant
to the agreement referenced in 8.02(i) are in the ordinary course of business)
in the aggregate for an amount in excess of $3,000,000; waive, release,
grant, or transfer any rights of material value; modify or change in any
material respect any existing material license, lease, contract, or other
document; other than endorsements of negotiable instruments in the ordinary
course, guaranties of obligations of Subsidiaries or guaranties or other
liabilities related to the purchases of inventory, repairable parts, office
equipment or supplies which arise in the ordinary course of business, assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other Person
which, are in excess of $1,500,000 in the aggregate; make any loans, advances
or capital contributions to, or investments in, any other Person which, are in
excess of $1,000,000 in the aggregate or make any capital expenditure which,
individually, is in excess of $1,000,000 or, in the aggregate with any other
such expenditure, are in excess of $5,000,000;
(c) take any action that would make any representation and warranty
of the Company hereunder inaccurate in any respect at, or as of any time
prior to, the Effective Time, or omit to take any action necessary to
prevent any such representation or warranty from being inaccurate in any
respect at any such time;
(d) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its
capital stock, other than cash dividends and distributions by a wholly
owned subsidiary of the Company to the Company or to a subsidiary all of
the capital stock which is owned directly or indirectly by the Company, or
redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or
otherwise acquire any of its securities or any securities of its
subsidiaries;
(e) adopt or amend any bonus, profit sharing, compensation,
severance, termination, stock option, pension, retirement, deferred
compensation, employment or employee benefit plan, agreement, trust, plan,
fund or other arrangement for the benefit and welfare of any director,
officer or employee, or (except for normal increases in the ordinary course
of business that are consistent with past practices and that, in the
aggregate, do not result in a material increase in benefits or compensation
expense to the Company or any Subsidiary) increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any existing plan or arrangement (including,
without limitation, the granting of stock options or stock appreciation
rights or the removal of existing restrictions in any benefit plans or
agreements);
(f) revalue in any material respect any significant portion of its
assets, including, without limitation, writing down the value of inventory
in any material manner or write-off of notes or accounts receivable in any
material manner;
(g) pay, discharge or satisfy any material claims, liabilities or
obligations (whether absolute, accrued, asserted or unasserted, contingent
or otherwise) other than the payment, discharge or satisfaction in the
ordinary course of business, consistent with past practices, of liabilities
reflected or reserved against in the consolidated financial statements of
the Company or incurred in the ordinary course of business, consistent with
past practices;
(h) make any tax election with respect to or settle or compromise any
material income tax liability;
(i) take any action other than in the ordinary course of business and
consistent with past practices with respect to accounting policies or
procedures; or
(j) agree or commit to do any of the foregoing.
Section 5.02. Stockholder Meeting; Proxy Material. The
Company shall cause a meeting of its stockholders (the "Company Stockholder
Meeting") to be duly called and held as soon as reasonably practicable for
the purpose of voting on the approval and adoption of this Agreement and
the Merger. The Board of Directors of the Company shall, subject to its
fiduciary duties as determined in good faith and as advised by counsel,
recommend approval and adoption of this Agreement and the Merger by the
Company's stockholders. In connection with such meeting, the Company shall
promptly prepare and file with the SEC, shall use its reasonable best
efforts to have cleared by the SEC and shall thereafter mail to its
stockholders as promptly as practicable the Company Proxy Statement and all
other proxy materials for such meeting, subject to its fiduciary duties as
determined in good faith and as advised by counsel, shall use its
reasonable best efforts to obtain the necessary approvals by its
stockholders of this Agreement and the transactions contemplated hereby and
shall otherwise comply with all legal requirements applicable to such
meeting.
Section 5.03. Access to Information. From the date hereof
until the Effective Time, the Company shall give MergerSub, its counsel,
financial advisors, auditors and other authorized representatives full
access to the offices, properties, books and records of the Company and the
Subsidiaries during normal business hours, will furnish to MergerSub, their
counsel, financial advisors, auditors and other authorized representatives
such financial and operating data and other information as such Persons may
reasonably request and will instruct the Company's and its Subsidiaries'
employees, counsel and financial advisors to cooperate with MergerSub in
its investigation of the business of the Company and the Subsidiaries;
provided that no investigation pursuant to this Section shall affect any
representation or warranty given by the Company to MergerSub hereunder; and
provided, further that any information provided to MergerSub pursuant to
this Section 5.03 shall be subject to the Confidentiality Agreement dated
as of March 19, 1997 between the Company and DLJ Merchant Banking II, Inc.
(the "Confidentiality Agreement").
Section 5.04. Other Offers. (a) Neither the Company nor any of
its Subsidiaries shall (whether directly or indirectly through advisors,
agents or other intermediaries), nor shall the Company or any of its
Subsidiaries authorize or permit any of its or their officers, directors,
agents, representatives, advisors or Subsidiaries to, (i) solicit, initiate
or take any action knowingly to facilitate the submission of inquiries,
proposals or offers from any Third Party (as defined below) (other than
MergerSub) relating to (A) any acquisition or purchase of 20% or more of
the consolidated assets of the Company and its Subsidiaries or of over 20%
of any class of equity securities of the Company or any of its
Subsidiaries, (B) any tender offer (including a self tender offer) or
exchange offer that if consummated would result in any Third Party
beneficially owning 20% or more of any class of equity securities of the
Company or any of its Subsidiaries, (C) any merger, consolidation, business
combination, sale of substantially all assets, recapitalization,
liquidation, dissolution or similar transaction involving the Company, or
any of its Subsidiaries whose assets, individually or in the aggregate,
constitute more than 20% of the consolidated assets of the Company, other
than the transactions contemplated by this Agreement, or (D) any other
transaction the consummation of which would, or could reasonably be
expected to impede, interfere with, prevent or materially delay the Merger
or which would, or could reasonably be expected to, materially dilute the
benefits to MergerSub of the transactions contemplated hereby
(collectively, "Acquisition Proposals"), or agree to or endorse any
Acquisition Proposal, or (ii) enter into or participate in any discussions
or negotiations regarding any of the foregoing, or furnish to any Third
Party any information with respect to its business, properties or assets or
any of the foregoing, or otherwise cooperate in any way with, or knowingly
assist or participate in, facilitate or encourage, any effort or attempt by
any Third Party (other than MergerSub) to do or seek any of the foregoing;
provided, however, that the foregoing shall not prohibit the Company
(either directly or indirectly through advisors, agents or other
intermediaries) from (i) publicly disclosing in a press release, in a
general manner, the Company's permitted activities hereunder, (ii)
furnishing information pursuant to an appropriate confidentiality letter
(which letter shall not be less favorable to the Company in any material
respect than the Confidentiality Agreement, and a copy of which shall be
provided for informational purposes only to MergerSub) concerning the
Company and its businesses, properties or assets to a Third Party who has
made a bona fide Acquisition Proposal, (iii) engaging in discussions or
negotiations with such a Third Party who has made a bona fide Acquisition
Proposal, (iv) following receipt of a bona fide Acquisition Proposal,
taking and disclosing to its stockholders a position contemplated by Rule
14d-9 or Rule 14e-2(a) under the Exchange Act or otherwise making
disclosure to its stockholders, (v) following receipt of a bona fide
Acquisition Proposal, failing to make or withdrawing or modifying its
recommendation referred to in Section 5.02 and/or (vi) taking any non-
appealable, final action ordered to be taken by the Company by any court of
competent jurisdiction but in each case referred to in the foregoing
clauses (ii) through (vi) only to the extent that the Board of Directors of
the Company shall have concluded in good faith on the basis of advice from
counsel that such action is required to prevent the Board of Directors of
the Company from breaching its fiduciary duties to the stockholders of the
Company under applicable law; provided, further, that (A) the Board of
Directors of the Company shall not take any of the foregoing actions until
reasonable notice to MergerSub of its intent to take such action shall have
been give to MergerSub; and (B) if the Board of Directors of the Company
receives an Acquisition Proposal, to the extent it may do so without
breaching its fiduciary duties as advised by counsel and as determined in
good faith, and without violating any of the conditions of such Acquisition
Proposal, then the Company shall promptly inform MergerSub of the terms and
conditions of such proposal and the identity of the person making it.
Subject to the provisions of the previous sentence, the Company shall
immediately cease and cause its Subsidiaries and its and their advisors,
agents and other intermediaries to cease any and all existing activities,
discussions or negotiations with any parties (other than MergerSub)
conducted heretofore with respect to any of the foregoing, and shall use
its reasonable best efforts to cause any such parties in possession of
confidential information about the Company that was furnished by or on
behalf of the Company to return or destroy all such information in the
possession of any such party (other than MergerSub) or in the possession of
any agent or advisor of any such party. As used in this Agreement, the
term "Third Party" means any Person or "group," as described in Rule 13d-
5(b) promulgated under the Exchange Act, other than MergerSub or any of its
affiliates.
(b) If a Payment Event (as hereinafter defined) occurs, the Company
shall pay to MergerSub, within two business days following such Payment
Event, a fee of $20,947,000.00.
(c) "Payment Event" shall mean that at least one enumerated event has
occurred in all of the following clauses (i)-(iii): (i) a Third Party
shall have made an Acquisition Proposal prior to the Company Stockholder
Meeting, (ii) this Agreement shall have been terminated pursuant to any of
Sections 9.01(e), 9.01(f) or 9.01(g) and (iii) any Acquisition Proposal
(whether or not proposed prior to the Company Stockholders Meeting and
whether or not it involves the Third Party making the Acquisition Proposal
referred to in Section 5.04(c)(i) above) shall have been consummated within
12 months following the termination of this Agreement.
(d) Upon the termination of this Agreement for any reason other than
(i) a termination by the Company pursuant to Section 9.01(c), (ii) a
termination by either the Company or MergerSub pursuant to Section 9.01(a),
(iii) a termination that follows a failure of the condition set forth in
Section 8.01(e) or Section 8.02(e) to be satisfied, or (iv) any termination
that follows a refusal by MergerSub to consummate the Merger because
Section 3.10(a) or 3.10(h) is not true and correct as of the Effective
Time, by reason of an event that occurs between the date hereof and the
Effective Time, the Company shall reimburse MergerSub and its affiliates
not later than two business days after submission of reasonable
documentation thereof for 100% of their documented out-of-pocket fees and
expenses (including, without limitation, the reasonable fees and expenses
of their counsel and investment banking fees), actually incurred by any of
them or on their behalf in connection with this Agreement and the
transactions contemplated hereby and the arrangement, obtaining the
commitment to provide or obtaining the Financing for the transactions
contemplated by this Agreement (including fees payable to the Financing
Entities and their respective counsel) provided that the aggregate amount
payable pursuant to this Section 5.04(d) shall not exceed $8,250,000;
provided further, that (i) in the event that a fee is paid pursuant to
Section 5.04(b) or (ii) in the event of any termination of this Agreement
which follows a refusal of MergerSub to consummate the Merger by reason of
the condition set forth in Section 8.01(c) or Section 8.02(b), the
aggregate amount payable pursuant to this Section 5.04(d) shall not include
any investment banking fee payable to DLJSC as disclosed in Section 4.06
and the limit set forth in the immediately proceeding clause shall be
reduced from $8,250,000 to $5,750,000.
(e) The Company acknowledges that the agreements contained in this
Section 5.04 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, MergerSub would not enter
into this Agreement; accordingly, if the Company fails to promptly pay any
amount due pursuant to this Section 5.04, and, in order to obtain such
payment, the other party commences a suit which results in a judgment
against the Company for the fee or fees and expenses set forth in this
Section 5.04, the Company shall also pay to MergerSub its costs and
expenses incurred in connection with such litigation.
(f) Sections 5.04(b)-(e) shall survive any termination of this
Agreement, however caused.
(g) Section 5.05. Notices of Certain Events. The Company shall
promptly notify MergerSub of:
(a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating to
or involving or otherwise affecting the Company or any Subsidiary which, if
pending on the date of this Agreement, would have been required to have
been disclosed pursuant to Section 3.12 or which relate to the consummation
of the transactions contemplated by this Agreement.
Section 5.06. Resignation of Directors. Prior to the
Effective Time, the Company shall deliver to MergerSub evidence
satisfactory to MergerSub of the resignation of all directors of the
Company effective at the Effective Time.
Section 5.07. Preferred Stock. Provided that MergerSub
shall have provided to Company reasonably in advance of the first mailing
to stockholders of the Company Proxy Statement the terms thereof, prior to
the Effective Time, the Board of Directors of the Company shall take all
necessary action to establish the terms of the Mirror Preferred Stock and
file the Certificate of Designations with the Delaware Secretary of State,
all in accordance with the applicable provisions of Delaware Law. The
"Mirror Preferred Stock" shall be Preferred Stock of the Company, the terms
of and certificate of designations of which shall be identical in all
respects (except the name of the Company) to the terms of the MergerSub
Preferred Stock and the certificate of designations therefor.
Section 5.08. Solvency Advice. The Company shall request an
independent advisor to deliver the advice contemplated by Section 8.03(a) as
promptly as practicable.
ARTICLE 6
Covenants of MergerSub
MergerSub agrees that:
Section 6.01. SEC Filings. As soon as practicable after the
date of announcement of the execution of the Merger Agreement, MergerSub shall
file (separately, or as part of the Company Proxy Statement) with the SEC, if
required, a Rule 13E-3 Transaction Statement ("Transaction Statement") with
respect to the Merger (together with any supplements or amendments thereto,
collectively the "MergerSub Disclosure Documents"). MergerSub and the Company
each agrees to correct any information provided by it for use in the MergerSub
Disclosure Documents if and to the extent that it shall have become false or
misleading in any material respect. MergerSub agrees to take all steps
necessary to cause the MergerSub Disclosure Documents as so corrected to be
filed with the SEC and to be disseminated to holders of Shares, in each case
as and to the extent required by applicable federal securities laws. The
Company and its counsel shall be given reasonable opportunity to review and
comment on each MergerSub Disclosure Document prior to its being filed with
the SEC.
Section 6.02. Voting of Shares. MergerSub agrees to vote all
Shares beneficially owned by it in favor of adoption of this Agreement at the
Company Stockholder Meeting.
Section 6.03. Director and Officer Liability. (a) For a period
of 6 years after the Effective Time, MergerSub shall cause the Surviving
Corporation to indemnify and hold harmless the present and former officers
and directors of the Company in respect of acts or omissions occurring
prior to the Effective Time to the extent provided under the Company's
certificate of incorporation and bylaws in effect on the date hereof;
provided that such indemnification shall be subject to any limitation
imposed from time to time under applicable law. For a period of 6 years
after the Effective Time, MergerSub shall cause the Surviving Corporation
to provide officers' and directors' liability insurance in respect of acts
or omissions occurring prior to the Effective Time covering each such
Person currently covered by the Company's officers' and directors'
liability insurance policy on terms with respect to coverage and amount no
less favorable than those of such policy in effect on the date hereof (or,
if such insurance policy cannot be obtained, such insurance policy on terms
with respect to coverage and amount as favorable as can be obtained,
subject to the proviso at the conclusion of this sentence), provided that
in satisfying its obligation under this Section, MergerSub shall not be
obligated to cause the Surviving Corporation to pay premiums in excess of
125% of the amount per annum the Company paid in its last full fiscal year,
which amount has been disclosed to MergerSub.
(b) In furtherance of and not in limitation of the preceding paragraph,
MergerSub agrees that the officers and directors of the Company that are
defendants in all litigation commenced by stockholders of the Company with
respect to (x) the performance of their duties as such officers and/or
directors under federal or state law (including litigation under federal and
state securities laws) and (y) the Merger, including, without limitation, any
and all such litigation commenced on or after the date of this Agreement (the
"Subject Litigation") shall be entitled to be represented, at the reasonable
expenses of the Company, in the Subject Litigation by one counsel (and
Delaware counsel if appropriate and one local counsel in each jurisdiction in
which a case is pending) each of which counsel shall be selected by a
plurality of such director defendants; provided that the Company shall not be
liable for any settlement effected without its prior written consent (which
consent shall not be unreasonably withheld) and that a condition to the
indemnification payments provided in Section 6.03(a) shall be that such
officer/director defendant not have settled any Subject Litigation without the
consent of the Surviving Corporation (such consent not to be unreasonably
withheld) and, prior to the Effective Time, MergerSub; and provided further
that neither MergerSub nor the Surviving Corporation shall have any obligation
hereunder to any officer/director defendant when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final and non-appealable, that indemnification of such officer/director
defendant in the manner contemplated hereby is prohibited by applicable law.
Section 6.04. Employee Plans and Benefit Arrangements. (a)
From and after the Effective Time, subject to applicable law, the Surviving
Corporation and its subsidiaries will honor obligations of the Company and
its Subsidiaries incurred prior to the Effective Time under all existing
Employee Plans and Benefit Arrangements (as defined in Section 3.14).
(b) MergerSub agrees that, for at least one year from the Effective
Time, subject to applicable law, the Surviving Corporation and its
Subsidiaries will provide benefits to their employees which will, in the
aggregate, be comparable to those currently provided by the Company and its
subsidiaries to their employees. Notwithstanding the foregoing, nothing
herein shall obligate or require the Surviving Corporation or any of its
subsidiaries to provide its employees with a plan or arrangement similar to
any equity based compensation plans currently maintained by the Company and
nothing herein shall otherwise limit the Surviving Corporation's right to
amend, modify or terminate any Employee Plan or Benefit Arrangement, as
defined in Section 3.14.
(c) It is MergerSub's current intention to maintain the Surviving
Corporation's headquarters at its present location or another location in the
greater Philadelphia area.
Section 6.05. Financing. MergerSub shall use its
reasonable best efforts to obtain the Financing. In the event that any
portion of such Financing becomes unavailable, regardless of the reason
therefor, MergerSub will use its reasonable best efforts to obtain
alternative financing on substantially comparable or more favorable terms
from other sources.
Section 6.06. NASDAQ Listing. MergerSub will not take any
action, for at least three years after the Effective Time of the Merger, to
cause the Company Stock to be de-listed from The NASDAQ National Market
System ("NASDAQ"); provided, however, that MergerSub may cause or permit
the Company Stock to be de-listed in connection with any transaction which
results in the termination of registration of such securities under Section
12 of the Exchange Act, and provided, further, that nothing in this Section
6.06 shall require the Company to take any affirmative action to prevent
the Company Stock from being de-listed by NASDAQ if the Company Stock
ceases to meet the applicable listing standards.
Section 6.07. Access to Information. From the date hereof
until the Effective Time, MergerSub shall give the Company and its
independent advisor any such information regarding MergerSub as may be
necessary to permit such independent advisor to render the advice to be
delivered to the Company's Board of Directors pursuant to Section 8.03(b).
ARTICLE 7
Covenants of MergerSub and the Company
The parties hereto agree that:
Section 7.01. Best Efforts. Subject to the terms and
conditions of this Agreement, each party will use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable under applicable laws
and regulations to consummate the transactions contemplated by this
Agreement. Each party shall also refrain from taking, directly or
indirectly, any action contrary to or inconsistent with the provisions of
this Agreement, including action which would impair such party's ability to
consummate the Merger and the other transactions contemplated hereby.
Without limiting the foregoing, the Company and its Board of Directors
shall use their reasonable best efforts to (a) take all action necessary so
that no state takeover statute or similar statute or regulation is or
becomes applicable to the Merger or any of the other transactions
contemplated by this Agreement and (b) if any state takeover statute or
similar statute or regulation becomes applicable to any of the foregoing,
take all reasonable action necessary so that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly
as practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the
other transactions contemplated by this Agreement.
Section 7.02. Certain Filings. (a) The Company and MergerSub
shall use their respective reasonable best efforts to take or cause to be
taken, (i) all actions necessary, proper or advisable by such party with
respect to the prompt preparation and filing with the SEC a registration
statement on Form S-4 (the "Registration Statement"), the Company
Disclosure Documents and the MergerSub Disclosure Documents, (ii) such
actions as may be required to have the Registration Statement declared
effective under the Securities Act and to have the Company Proxy Statement
cleared by the SEC, in each case as promptly as practicable, and (iii) such
actions as may be required to have to be taken under state securities or
applicable Blue Sky laws in connection with the issuance of the securities
contemplated hereby.
(b) The Company agrees to provide, and will cause its
Subsidiaries and its and their respective officers, employees and advisors
to provide, all necessary cooperation in connection with the arrangement of
any financing to be consummated contemporaneous with or at or after the
Closing in respect of the transactions contemplated by this Agreement,
including without limitation, (x) participation in meetings, due diligence
sessions and road shows, (y) the preparation of offering memoranda, private
placement memoranda, prospectuses and similar documents, and (z) the
execution and delivery of any commitment letters, underwriting or placement
agreements, pledge and security documents, other definitive financing
documents, or other requested certificates or documents, including a
certificate of the chief financial officer of the Company with respect to
solvency matters, comfort letters of accountants and legal opinions as may
be requested by MergerSub; provided that the form and substance of any of
the material documents referred to in clause (y), and the terms and
conditions of any of the material agreements and other documents referred
to in clause (z), shall be substantially consistent with the terms and
conditions of the financing required to satisfy the condition precedent set
forth in Section 8.01(e).
(c) The Company and MergerSub shall cooperate with one
another (i) in determining whether any action by or in respect of, or
filing with, any governmental body, agency or official, or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement (including
the Financing) and (ii) in seeking any such actions, consents, approvals or
waivers or making any such filings, furnishing information required in
connection therewith or with the Registration Statement, the Company
Disclosure Documents and MergerSub Disclosure Documents and seeking timely
to obtain any such actions, consents, approvals or waivers.
Section 7.03. Public Announcements. MergerSub and the
Company will consult with each other before issuing any press release or
making any public statement with respect to this Agreement and the
transactions contemplated hereby and, except for any press release or
public statement as may be required by applicable law or any listing
agreement with any national securities exchange, will not issue any such
press release or make any such public statement prior to such consultation.
Section 7.04. Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of the Company or
MergerSub, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Company or MergerSub, any other actions
and things to vest, perfect or confirm of record or otherwise in the Surviving
Corporation any and all right, title and interest in, to and under any of the
rights, properties or assets of the Company acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with, the Merger.
ARTICLE 8
Conditions to the Merger
Section 8.01. Conditions to the Obligations of Each Party.
The obligations of the Company and MergerSub to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) this Agreement shall have been adopted by the stockholders of the
Company in accordance with Delaware Law;
(b) any applicable waiting period under the HSR Act relating to the
Merger shall have expired or been terminated;
(c) no provision of any applicable law or regulation and no judgment,
order, decree or injunction shall prohibit or restrain the consummation of
the Merger; provided, however, that the Company and MergerSub shall each
use its reasonable best efforts to have any such judgment, order, decree or
injunction vacated; and
(d) all consents, approvals and licenses of any governmental or other
regulatory body required in connection with the execution, delivery and
performance of this Agreement and for the Surviving Corporation to conduct the
business of the Company in substantially the manner now conducted, shall have
been obtained, unless the failure to obtain such consents, authorizations,
orders or approvals would not have a Material Adverse Effect after giving
effect to the transactions contemplated by this Agreement (including the
Financing);
(e) the funds in an amount at least equal to the Required Amounts
shall have been made available to MergerSub and/or Operating Co. as
contemplated in Section 4.07; and
(f) the Registration Statement shall have been declared effective and
no stop order suspending the effectiveness of the Registration Statement
shall be in effect and no proceedings for such purpose shall be pending
before or threatened by the SEC.
Section 8.02. Conditions to the Obligations of MergerSub. The
obligations of MergerSub to consummate the Merger are subject to the
satisfaction of the following further conditions:
(a) the Company shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time, the representations and warranties of the Company contained
in this Agreement and in any certificate or other writing delivered by the
Company pursuant hereto shall be true in all material respects at and as of
the Effective Time (provided that representations made as of a specific
date shall be required to be true as of such date only) as if made at and
as of such time and MergerSub shall have received a certificate signed by
any Vice President of the Company to the foregoing effect;
(b) There shall not be instituted or pending (x) any action or
proceeding by any government or governmental authority or agency, or (y)
any action or proceeding by any other person, that has a reasonable
likelihood of success, in any case referred to in clauses (x) or (y),
before any court or governmental authority or agency, challenging or
seeking to make illegal, to delay materially or otherwise directly or
indirectly to restrain or prohibit the consummation of the Merger or
seeking to obtain material damages or otherwise directly or indirectly
relating to the transactions contemplated by this Agreement, seeking to
restrain or prohibit MergerSub's (including its Subsidiaries and
affiliates) ownership or operation of all or any material portion of the
business or assets of the Company and its Subsidiaries, taken as a whole,
or to compel MergerSub or any of its Subsidiaries or affiliates to dispose
of or hold separate all or any material portion of the business or assets
of the Company and its Subsidiaries, taken as a whole, seeking to impose or
confirm material limitations on the ability of MergerSub or any of its
Subsidiaries or affiliates to effectively control the business or
operations of the Company and its Subsidiaries, taken as a whole, or
effectively to exercise full rights of ownership of the Shares or Company
Stock, including, without limitation, the right to vote any Shares or
Company Stock acquired or owned by MergerSub or any of its Subsidiaries or
affiliates on all matters properly presented to the Company's stockholders,
or seeking to require divestiture by MergerSub or any of its Subsidiaries
or affiliates of any Shares or Company Stock, and no court, arbitrator or
governmental body, agency or official shall have issued any judgment,
order, decree or injunction, and there shall not be any statute, rule or
regulation, that, in the sole judgment of MergerSub is likely, directly or
indirectly, to result in any of the consequences referred to in the
preceding clauses (i) through (iv);
(c) MergerSub shall have received all documents it may reasonably
request relating to the existence of the Company and the Subsidiaries and
the authority of the Company for this Agreement, all in form and substance
satisfactory to MergerSub;
(d) the holders of not more than 3% of the outstanding Shares shall
have demanded appraisal of their Shares in accordance with Delaware Law;
(e) MergerSub shall be reasonably satisfied that the Merger will be
recorded as a "recapitalization" for financial reporting purposes;
(f) MergerSub shall have received undertakings in writing from each
person, if any, who according to counsel for the Company might reasonably
be considered "affiliates" of the Company within the meaning of Rule 145(c)
of the SEC pursuant to the Securities Act (each, an "Affiliate"), in each
case in form and substance satisfactory to counsel for MergerSub providing
(i) such Affiliate will notify MergerSub in writing before offering for
sale or selling or otherwise disposing of any shares of Company Stock owned
by such Affiliate and (ii) no such sale or other disposition shall be made
unless and until the Affiliate has supplied to MergerSub an opinion of
counsel for the Affiliate (which opinion and counsel shall be reasonably
satisfactory to MergerSub) to the effect that such transfer is not in
violation of the Securities Act;
(g) the Registration Rights Agreement dated as of October 20, 1995,
entered into among the Company and the Significant Security Holders (as
defined therein), shall have been amended in the manner previously agreed;
(h) The certificate of designation for the Mirror Preferred
Stock shall have been accepted for filing by the Delaware Secretary of State;
and
(i) Total indebtedness (long and short term) of the Company and
its Subsidiaries as of the Effective Time, excluding any indebtedness
attributable to "Phase II" as defined in the Agreement for Services for
End-Of-Life Inventory Management dated as of June 7, 1996 between Operating
Co. and Compaq Computer Corporation ("Attributable Indebtedness") shall not
exceed $240,000,000 and shall not exceed $255,000,000 including Attributable
Indebtedness.
Section 8.03. Condition to the Obligation of the Company. The
obligation of the Company to consummate the Merger is subject to the
satisfaction of the following further conditions:
(a) MergerSub shall have performed in all material respects
all of its obligations hereunder required to be performed by it at or prior
to the Effective Time, the representations and warranties of MergerSub
contained in this Agreement and in any certificate or other writing
delivered by either of them pursuant hereto shall be true in all material
respects at and as of the Effective Time (except for any inaccuracies in
such representations and warranties that are solely due to an action taken
after the date hereof of the type described in Section 5.01 which is taken
specifically in accordance with Section 5.01) (provided that
representations made as of a specific date shall be required to be true as
of such date only) as if made at and as of such time and the Company shall
have received a certificate signed by any Vice President of MergerSub to
the foregoing effect; and
(b) The Board of Directors of the Company shall have received advice,
reasonably satisfactory to the Board, from an independent advisor confirming
the belief of MergerSub set forth in the last sentence of Section 4.07.
ARTICLE 9
Termination
Section 9.01. Termination. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the
Effective Time (notwithstanding any approval of this Agreement by the
stockholders of the Company):
(a) by mutual written consent of the Company and MergerSub;
(b) by either the Company or MergerSub, if the Merger has not been
consummated by the later of (x) the earlier of September 15, 1997 and ten
business days after the Company Stockholders Meeting, and (y) August 15, 1997,
provided that the party seeking to exercise such right is not then in breach
in any material respect of any of its obligations under this Agreement;
(c) by either the Company or MergerSub, if MergerSub (in the case of
termination by the Company), or the Company (in the case of termination by
MergerSub) shall have breached in any material respect any of its obligations
under this Agreement or any representation and warranty of MergerSub (in the
case of termination by the Company) or the Company (in the case of termination
by MergerSub) shall have been incorrect in any material respect when made or
at any time prior to the Closing;
(d) by either the Company or MergerSub, if there shall be any law or
regulation that makes consummation of the Merger illegal or otherwise
prohibited or if any judgment, injunction, order or decree enjoining MergerSub
or the Company from consummating the Merger is entered and such judgment,
injunction, order or decree shall become final and nonappealable;
(e) by MergerSub if the Board of Directors of the Company shall have
withdrawn or modified or amended, in a manner adverse to MergerSub, its
approval or recommendation of this Agreement and the Merger or its
recommendation that stockholders of the Company adopt and approve this
Agreement and the Merger, or approved, recommended or endorsed any proposal
for a transaction other than the Merger (including a tender or exchange
offer for Shares) or if the Company has failed to call the Company
Stockholders Meeting or failed as promptly as reasonably practicable after
the Registration Statement is declared effective to mail the Company Proxy
Statement to its stockholders or failed to include in such statement the
recommendation referred to above;
(f) by the Company if prior to the Effective Time the Board of
Directors of the Company shall have withdrawn or modified or amended, in a
manner adverse to MergerSub, its approval or recommendation of this
Agreement and the Merger or its recommendation that stockholders of the
Company adopt and approve this Agreement and the Merger in order to permit
the Company to execute a definitive agreement providing for the acquisition
of the Company or in order to approve a tender or exchange offer for any or
all of the Shares, in either case, as determined by the Board of Directors
of the Company to be on terms more favorable to the Company's stockholders
than the Merger from a financial point of view, provided that the Company
shall be in compliance with Section 5.04;
(g) by either the Company or MergerSub if, at a duly held
stockholders meeting of the Company or any adjournment thereof at which
this Agreement and the Merger is voted upon, the requisite stockholder
adoption and approval shall not have been obtained.
The party desiring to terminate this Agreement pursuant to
Sections 9.01(b)-(g) shall give written notice of such termination to the
other party in accordance with Section 10.01.
Section 9.02. Effect of Termination. If this Agreement is
terminated pursuant to Section 9.01, this Agreement shall become void and of
no effect with no liability on the part of any party hereto, except that the
agreements contained in Sections 5.04(b)-(f) and 10.04 shall survive the
termination hereof.
ARTICLE 10
Miscellaneous
Section 10.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy
or similar writing) and shall be given,
if to MergerSub, to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(C)/(O) DLJ Merchant Banking II, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company, to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DecisionOne Holdings Corp.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or telecopy number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (a) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section and the appropriate telecopy confirmation is received or (b) if given
by any other means, when delivered at the address specified in this Section.
Section 10.02. Survival of Representations and Warranties.
The representations and warranties and agreements contained herein and in
any certificate or other writing delivered pursuant hereto shall not
survive the Effective Time or the termination of this Agreement except for
the agreements set forth in Sections 6.03, 6.04, 6.06 and 7.04 which will
survive the Effective Time and Sections 5.04(b)-(f) and 10.04 which will
survive any termination hereof.
Section 10.03. Amendments; No Waivers. (a) Any provision of
this Agreement may be amended or waived prior to the Effective Time if, and
only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by the Company and MergerSub or in the case of a waiver, by
the party against whom the waiver is to be effective; provided that after
the adoption of this Agreement by the stockholders of the Company, no such
amendment or waiver shall, without the further approval of such
stockholders, alter or change the amount or kind of consideration to be
received in exchange for any shares of capital stock of the Company, any
term of the certificate of incorporation of the Surviving Corporation or
any of the terms or conditions of this Agreement if such alteration or
change would adversely affect the holders of any shares of capital stock of
the Company.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 10.04. Expenses. Except as provided in Section
5.04, all costs and expenses incurred in connection with this Agreement
shall be paid by the party incurring such cost or expense.
Section 10.5. Successors and Assigns; Benefit. The
provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, provided
that no party may assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement without the consent of the other
parties hereto. Nothing in this Agreement, expressed or implied, shall
confer on any Person other than the parties hereto, and their respective
successors and assigns, any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, except that the present and former
officers and directors of the Company shall have the rights set forth in
Section 6.03 hereof.
Section 10.06. Governing Law. This Agreement shall be
construed in accordance with and governed by the law of the State of
Delaware, without reference to the conflicts of laws rules thereof.
Section 10.07. Counterparts; Effectiveness. This
Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received counterparts hereof
signed by all of the other parties hereto.
Section 10.08. Knowledge Defined.. When used with respect
to the Company, "knowledge" means the actual knowledge of any of the
following officers of the Company or any of their successors: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
DecisionOne Holdings Corp.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
QUAKER HOLDING CO.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
EXHIBIT A
CERTIFICATE OF INCORPORATION
OF THE
SURVIVING CORPORATION
*****
As of the Effective Time, the Certificate of Incorporation of the
Surviving Corporation shall be amended as follows:
Article Second shall be deleted in its entirety and replaced with the
following:
"SECOND: The address of its registered office in the State of
Delaware is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The name of its
registered agent at such address is Corporation Service Company."
The first paragraph of Article Fourth shall be deleted in its entirety
and replaced with the following:
"FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is 45,000,000 consisting of 30,000,000 shares
of Common Stock, par value $.01 per share (the "Common Stock") and
15,000,000 shares of Preferred Stock, par value $.01 per share (the
"Preferred Stock")."
In addition, the second paragraph and Sections I and II of Article
Fourth shall be deleted. Section III of Article Fourth shall be renumbered
"Section I" Section IV of Article Fourth shall be renumbered "Section III".
Articles Fifth through Seventh shall be deleted in their entirety, and
replaced with the following:
"FIFTH: The Board of Directors shall have the power to adopt, amend or
repeal the bylaws of the Corporation.
SIXTH: Election of directors need not be by written ballot unless the
bylaws of the Corporation so provide.
SEVENTH: (1) A director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director to the fullest extent permitted by Delaware
Law.
(2)(a) Each person (and the heirs, executors or administrators of
such person) who was or is a party or is threatened to be made a party to,
or is involved in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was a director or officer of the
Corporation or is or was serving at the request of the Corporation as a
director or officer of another corporation, partnership, joint venture,
trust or other enterprise, shall be indemnified and held harmless by the
Corporation to the fullest extent permitted by Delaware Law. The right to
indemnification conferred in this ARTICLE SEVENTH shall also include the
right to be paid by the Corporation the expenses incurred in connection
with any such proceeding in advance of its final disposition to the fullest
extent authorized by Delaware Law. The right to indemnification conferred
in this ARTICLE SEVENTH shall be a contract right.
(b) The Corporation may, by action of its Board of Directors, provide
indemnification to such of the officers, employees and agents of the
Corporation to such extent and to such effect as the Board of Directors
shall determine to be appropriate and authorized by Delaware Law.
(3) The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any expense, liability or loss incurred by such person in any such capacity
or arising out of his status as such, whether or not the Corporation would
have the power to indemnify him against such liability under Delaware Law.
(4) The rights and authority conferred in this ARTICLE SEVENTH shall
not be exclusive of any other right which any person may otherwise have or
hereafter acquire.
(5) Neither the amendment nor repeal of this ARTICLE SEVENTH, nor the
adoption of any provision of this Certificate of Incorporation or the
bylaws of the Corporation, nor, to the fullest extent permitted by Delaware
Law, any modification of law, shall eliminate or reduce the effect of this
ARTICLE SEVENTH in respect of any acts or omissions occurring prior to such
amendment, repeal, adoption or modification.
EIGHTH: The Corporation reserves the right to amend this Certificate
of Incorporation in any manner permitted by Delaware Law and, with the sole
exception of those rights and powers conferred under the above ARTICLE
SEVENTH, all rights and powers conferred herein on stockholders, directors
and officers, if any, are subject to this reserved power."
Except as provided above, the Certificate of Incorporation of the
Surviving Corporation shall remain in full force and effect.