EXHIBIT 2.6
TRANSFER AGREEMENT
BY AND AMONG
PREMIERE TECHNOLOGIES, INC.,
VOICE-NET COMMUNICATIONS SYSTEMS, INC.
AND
OWNERS OF VOICE-NET COMMUNICATIONS SYSTEMS, INC.
DATED AS OF APRIL 2, 1997
TRANSFER AGREEMENT
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of
April 2, 1997 by and among Premiere Technologies, Inc., a Georgia corporation
("Premiere"), VOICE-NET COMMUNICATIONS SYSTEMS, INC., a New York corporation
(the "Company"), and those parties listed on the signature pages hereto as the
owners of the Company (the "Owners").
W I T N E S S E T H:
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WHEREAS, this Agreement provides for the acquisition of the Company by
Premiere pursuant to the merger of the Company with and into a wholly owned
subsidiary of Premiere ("Merger Corp"), with Merger Corp as the surviving
corporation in such merger (the "Merger");
WHEREAS, the respective Boards of Directors of Premiere and the Company have
approved the terms and conditions set forth in this Agreement;
WHEREAS, the Owners own at least ninety-six percent (96 %) of the equity
interests in the Company;
WHEREAS, this Agreement provides for all of the Owners' equity interests in
the Company to be converted into the right to receive shares of Premiere Stock
in connection with the Merger;
WHEREAS, it is also the intention of the parties hereto that the form of the
transactions with respect to the Company, Premiere and Merger Corp shall qualify
as a "reorganization" within the meaning of Section 368(a) of the Code for
federal income tax purposes; and
WHEREAS, it is also the intention of the parties hereto that the business
combination to be effected by the Merger be accounted for as a pooling of
interests.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
I. UNIFORM TERMS AND CONDITIONS
1.1 Incorporation by Reference. The Uniform Terms and Conditions attached
hereto as Exhibit A (the "Uniform Terms") are hereby made a part of and
incorporated herein as if fully restated herein. Capitalized terms not defined
herein shall have the meanings provided in the Uniform Terms.
II. TERMS OF MERGER
2.1 The Merger.
(a) Subject to the terms and conditions of this Agreement, at the
Effective Time, the Company shall be merged with and into Merger Corp in
accordance with the provisions of the business corporation act under the laws of
the State of New York (the "New York Act") and the laws of the State of Georgia
(the "Georgia Act"). Merger Corp shall be the surviving corporation resulting
from the Merger, shall thereafter conduct the business and operations of the
Company as a wholly owned subsidiary of Premiere and shall continue to be
governed by the laws of the State of Georgia. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the respective boards of directors of Premiere, Merger Corp and the Company.
(b) Subject to the provisions of this Agreement, the parties shall file
a Certificate of Merger executed in accordance with the relevant provisions of
the New York Act and a Certificate of Merger executed in accordance with the
relevant provisions of the Georgia Act and shall make all other filings or
recordings required under each such Act as soon as practicable on or after the
Closing Date. The Merger and other transactions contemplated by this Agreement
shall become effective on the date and at the time the Articles Certificate of
Merger reflecting the Merger becomes effective with the Secretary of State of
the State of New York and the Certificate of Merger reflecting the Merger
becomes effective with the Secretary of State of the State of Georgia (the
"Effective Time").
(c) The charter and Bylaws of Merger Corp in effect immediately prior
to the Effective Time shall be the charter and Bylaws of the surviving
corporation until otherwise amended or repealed, the directors of Merger Corp
immediately prior to the Effective Time shall serve as the directors of the
surviving corporation from and after the Effective Time, and the officers of
Merger Corp in office immediately prior to the Effective Time shall serve as the
officers of the surviving corporation from and after the Effective Time.
2.2 Conversion of Shares. Subject to the provisions of this Section 2.2,
and in consideration for the transactions contemplated hereby, at the Effective
Time, by virtue of the Merger and without any action on the part of the parties
hereto or the shareholders of any of the parties hereto, the shares of the
constituent corporations of the Merger shall be converted as follows:
(a) Each share of Premiere Stock and each share of Merger Corp common
stock issued and outstanding at the Effective Time shall remain issued and
outstanding after the Effective Time.
(b) All of the shares of the no par value capital stock of the Company
("Company Stock") (excluding treasury shares and excluding shares held by
shareholders who perfect their statutory dissenters' rights as provided in
Section 2.4 of this Agreement) issued and outstanding at the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for the
right to receive:
(i) the number of shares of Premiere Stock determined by dividing (A)
the product of .9 multiplied by the Company Purchase Price, by
(B) the Average Closing Price; and
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(ii) the number of shares of Premiere Stock determined by dividing (A)
the product of .1 multiplied by the Company Purchase Price, by
(B) the Average Closing Price (the "General Escrow Amount");
all as determined in accordance with Section 2.3 below (collectively, the
"Consideration"). Subject to Section 2.2(d) below, the Consideration shall be
issuable to the Owners pro rata in accordance with their ownership of Company
Common Stock pursuant to Section 2.6, which ownership the Owners represent has
not been adjusted in contemplation of the transactions described herein.
(c) Any and all shares of Company Common Stock held as treasury shares
by the Company shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.
(d) Upon consummation of the Merger, the Owners shall deliver the
General Escrow Amount in negotiable form to the Escrow Agent to be held in
escrow pursuant to the terms and conditions of the Escrow Agreement in the form
attached hereto as Exhibit B, which shall be executed and delivered by Premiere
and the Owners at the Closing.
2.3 Calculation of Consideration. For purposes of determining the
Consideration issuable to the Owners pursuant to Section 2.2(b) above, the
following shall apply:
(a) "Average Closing Price" shall be the average of the daily last sale
prices of Premiere Stock for the period consisting of twenty (20) consecutive
trading days on which such shares are actually traded on the Nasdaq National
Market (as reported by the Wall Street Journal or, if not reported thereby, any
other authoritative source selected by Premiere) ending at the close of trading
on the first trading day immediately preceding the Closing; provided, however,
that the Average Closing Price shall not be less than $22.50 nor more than
$30.50 (collectively, $22.50 and $30.50 are referred to as the "Average Closing
Price Limitations").
(b) "Company Purchase Price" shall be the sum of (i) the amount
determined by multiplying the Normalized EBITDA of the Company by the Stock
Multiple, plus (ii) the amount of cash reflected on the Closing Date Balance
Sheet, minus (iii) the aggregate amount of principal and accrued and unpaid
interest under funded debt and capital lease obligations reflected on the
Closing Date Balance Sheet, and minus (iv) the amount by which the Transaction
Costs exceed the Deductible Amount.
(c) "Deductible Amount" shall be an amount equal to $5,000.
(d) "Normalized EBITDA" of the Company shall be an amount equal to
$594,985.00.
(e) "Registration Right" shall mean the right to include Premiere Stock
issued in the Merger in a registration statement which Premiere intends to file
promptly after the end of the first full fiscal quarter of Premiere containing
the period of post-Merger combined operations required by ASRs 130 and 135,
pursuant to the terms and conditions of the Stock Restriction and Registration
Rights Agreement in the form attached hereto as of Exhibit C (the "Registration
Rights Agreement").
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(f) "Stock Multiple" shall be six (6).
(g) "Transaction Costs" shall mean all amounts incurred but unpaid by
the Company in connection with (i) the negotiation and preparation of this
Agreement, (ii) the preparation of the Audited Financial Statements, (iii) the
consummation of the Transactions and (iv) one-half of the costs and expenses of
public record searches pursuant to Section 5.9(b) of the Uniform Terms.
2.4 Dissenting Shareholders. Subject to Section 4.2, any holder of shares
of voting capital stock of the Company who perfects any available dissenters'
rights in accordance with and as contemplated by the New York Act shall be
entitled to receive the value of such shares in cash from the Company after the
Effective Time as determined pursuant to such provision of law; provided, that
no such payment shall be made to any dissenting shareholder unless and until
such dissenting shareholder has complied with the applicable provisions of the
New York Act and surrendered to the Company the certificate or certificates
representing the shares for which payment is being made. In the event that a
dissenting shareholder of the Company fails to perfect, or effectively withdraws
or loses, its right to appraisal and of payment for its shares, Premiere shall
issue and deliver the consideration to which such holder of shares of Company
capital stock is entitled under this Article II (without interest) upon
surrender of certificates representing such shares held by such holder.
2.5 Closing. The Closing shall take place at the offices of Xxxxxx & Bird
LLP, Atlanta, Georgia, at 10:00 a.m. local time, on the date set forth in the
Uniform Terms, provided all conditions set forth in Articles V and VI of the
Uniform Terms and Articles IV and V of this Agreement have been satisfied or
waived, or on such other date or at such other place and time mutually agreed
upon by the parties.
2.6 Exchange of Shares. Promptly after the Effective Time, Premiere and
Company shall cause to be mailed to the former Company shareholders appropriate
transmittal materials for the surrender of the certificate or certificates
formerly representing their shares of Company Common Stock in exchange for
shares of Premiere Stock as provided in this Agreement. Until surrendered for
exchange in accordance herewith, each certificate theretofore representing
shares of Company Common Stock shall from and after the Effective Time represent
only the right to receive the Consideration provided in this Agreement in
exchange therefor. No certificates representing fractional shares will be
issued as a result of the Merger. Each holder of shares of Company Common Stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of Premiere Common Stock shall receive, in lieu
thereof, cash (without interest) in an amount equal to such fractional part of a
share of Premiere Common Stock multiplied by the Average Closing Price.
2.7 Purchase for Investment, Etc. Each Owner represents and warrants the
following to Premiere:
(a) such Owner has accurately completed the Investor Questionnaire
required by Premiere prior to or contemporaneous with the execution of the
Transfer Agreement and the statements therein are true and correct and
acknowledges that Premiere has relied upon such statements in entering into this
Agreement;
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(b) such Owner is acquiring Premiere Stock for such Owner's own account
and not with a view to or for sale in connection with any public distribution
thereof within the meaning of the Securities Act;
(c) such Owner (i) has sufficient knowledge and experience in financial
and business matters to enable him, her or it to evaluate the merits and risks
of an investment in Premiere Stock, (ii) has the ability to bear the economic
risk of acquiring Premiere Stock for an indefinite period and to afford a
complete loss thereof and (iii) has had an opportunity to ask questions of and
to receive answers from the officers of Premiere and to obtain additional
information in writing as requested, which has been made available to and
examined by such Owner or such Owner's advisors; and
(d) such Owner (i) acknowledges that Premiere Stock has not been
registered under any securities laws and cannot be resold without registration
thereunder or exemption therefrom, (ii) agrees not to transfer all or any
Premiere Stock received by such Owner unless such transfer has been registered
or is exempt from registration under applicable securities laws and (iii)
acknowledges that the certificate(s) representing Premiere Stock shall bear the
following legend with respect to the restrictions on transfer under applicable
securities laws:
"The securities represented hereby have not been registered under
the Securities Act of 1933, as amended, and may not be offered,
sold, transferred or otherwise disposed of unless registered with
the Securities and Exchange Commission of the United States and the
securities regulatory authorities of applicable states or unless an
exemption from such registration is available."
2.8 Accounting, Tax and Regulatory Matters. Each Owner and the Company,
jointly and severally, represents and warrants to Premiere that neither the
Company, any Owner nor any Affiliate thereof has taken or agreed to take any
action or has any knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the Merger from qualifying for pooling-of-interests
accounting treatment or as a reorganization within the meaning of Section 368(a)
of the Code, or (ii) materially impede or delay receipt of any consents referred
to in Section 5.6 of the Uniform Terms or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
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III. ADDITIONAL AGREEMENTS
3.1 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, the Company and Merger Corp shall execute and file
the Certificate of Merger with the Secretary of State of the State of New York
and a Certificate of Merger with the Secretary of State of the State of Georgia
in connection with the Closing.
3.2 Conditions to Closing. The Company, the Owners and Premiere agree to
use their commercially reasonable best efforts to satisfy the closing conditions
set forth in Articles IV and V of this Agreement by the date indicated therein
or the Closing Date, as applicable.
3.3 Additional Indemnification Items. Subject to Sections 8.2 through 8.6
of the Uniform Terms, the Owners and, if the Transactions involve an Asset
Transfer, the Company, shall jointly and severally indemnify and hold harmless
Premiere, and its officers, directors, agents or affiliates, from and against
any and all Losses suffered or incurred by any such party by reason of or
arising out of any of the following:
(a) a breach of Section 2.19 of the Uniform Terms as it relates to
liability for sales tax (irrespective of whether disclosed on
Schedule 2.19 or in the Financial Statements.
3.4 Tax Matters. Each of the Company, the Owners and Premiere undertakes
and agrees to use its reasonable efforts to cause the Merger, and to take no
action which would cause the Merger not, to qualify as a "reorganization" within
the meaning of Section 368(a) of the Code for federal income tax purposes.
Notwithstanding the foregoing, the Owners understand that (i) Premiere makes no
representation or warranty regarding the tax treatment of this Agreement or the
Merger, (ii) the Closing is not subject to a condition that an Internal Revenue
Service ruling or tax opinion be obtained as to the federal income tax
consequences of this Agreement or the Merger, and (iii) the Company and the
Owners shall look to their respective advisors for advice concerning the tax
consequences of this Agreement and the Merger.
3.5 Registration Rights. At the Closing, Premiere and the Owners shall
execute and deliver the Registration Rights Agreement.
3.6 Accounting Treatment.
(a) The Company and each of the Owners has accurately completed the
Pooling Questionnaire required by Premiere prior to or contemporaneous with the
execution of this Agreement, and the statements therein are true and correct.
(b) Premiere, the Company and each of the Owners agrees to use its
reasonable efforts to cause the Merger, and to take no action which would cause
the Merger not, to qualify for treatment as a pooling of interests for
accounting purposes. Without limiting the foregoing, the Company and each of
the Owners agrees not to sell, transfer, or otherwise dispose of his, her or its
interests in, or reduce his, her or its risk relative to, any of the shares of
Premiere Common Stock received in connection with the Merger until such time as
Premiere notifies the Company and each such Owner that the requirements of ASRs
130 and 135 have been met. The Company and each of the Owners understands that
ASRs 130 and 135 relate to the publication of financial results of at least
thirty (30) days of post-Merger combined operations of Premiere and the Company.
Premiere
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agrees that it shall publish such results within forty-five (45) days after the
end of the first fiscal quarter of Premiere containing the required period of
post-Merger combined operations and that it shall notify the Company and each of
the Owners promptly following such publication. Premiere shall be entitled to
place the following restrictive legend on the shares of Premiere Stock issued
pursuant to the Merger to enforce the foregoing restrictions:
"The shares represented by this certificate were issued pursuant to
a business combination which is accounted for as a "pooling of interests"
and may not be sold, nor may the owner thereof reduce his risks relative
thereto in any way, until such time as Premiere Technologies, Inc.
("Premiere") has published the financial results covering at least 30
days of combined operations after the effective date of the merger
through which the business combination was effected.
3.7 Affiliate Agreements. The Company has disclosed in Schedule 3.7 all
Persons whom it reasonably believes is an "affiliate" of the Company for
purposes of Rule 145 under the 1933 Act. The Company shall use its reasonable
efforts to cause each such Person to deliver to Premiere as soon as reasonably
practicable following the execution of this Agreement, a written agreement,
substantially in the form attached hereto as Exhibit D.
3.8 Tax Representations. In connection with the opinion to be rendered to
Premiere by Xxxxxx & Bird to the effect that the transactions contemplated
hereby will constitute a tax-free reorganization within the meaning of Section
368(a) of the Code, the Owners shall furnish such counsel with such
representations as to their plans for the disposition of the shares of Premiere
Stock to be received in the Transactions as such counsel shall reasonably
request.
3.9 Restricted Stock. All contractual restrictions or limitations on
transfer with respect to Company Common Stock under any plan, program, contract
or arrangement, to the extent that such restrictions or limitations have not
already lapsed (whether as a result of the Transactions or otherwise), and
except as otherwise expressly provided in such plan, program, contract or
arrangement, shall remain in full force and effect with respect to shares of
Premiere Stock into which such restricted stock is converted pursuant to Section
2.2 of this Transfer Agreement.
3.10 Exchange Listing. Premiere shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq National Market the shares of
Premiere Stock to be issued to the Owners pursuant to the Transactions, and
Premiere shall give all notices and make all filings with the NASD required in
connection with the Transactions.
IV. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF PREMIERE
In addition to the conditions of Premiere contained in Article V of the
Uniform Terms, the obligation of Premiere to consummate the Transactions is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:
4.1 Approval of Owners. The Owners shall have approved the Merger in
accordance with the requirements of the New York Act and the Company shall have
provided Premiere certified copies of such resolutions, and Owners holding no
more than 10 percent (10%) of the Company Common Stock issued and outstanding
immediately prior to the Effective Time shall have exercised any of the rights
described in Section 2.4.
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4.2 Grand Solution Documents. VTNLP, VTE, the NAP and each of the
Franchisee Companies shall have executed and delivered Grand Solution Documents
reflecting the terms described in Exhibit E hereto in form and substance
reasonably satisfactory to Premiere.
4.3 Pooling Letter. Premiere shall have received a letter from the Company
containing representations related to the pooling of interests accounting
treatment, in the form attached hereto as Exhibit F.
4.4 Reorganization Opinion. Premiere shall have received an opinion of
Xxxxxx & Bird LLP, counsel to Premiere, to the effect that the transactions
contemplated by the Agreement, including the Merger, will constitute a tax-free
reorganization within the meaning of Section 368(a) of the Code.
4.5 Xxxx Xxxxxx Obligations. All obligations owing by the Company to Xxxx
Xxxxxx Corp. shall be satisfied in full, and Xxxx Xxxxxx Corp. shall have
released its security interest in shares of the Company's capital stock.
V. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF THE COMPANY
AND THE OWNERS
In addition to the conditions of the Company and the Owners contained in
Article VI of the Uniform Terms, the obligation of the Company and the Owners to
consummate the Transactions is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions:
5.1 Approval of Premiere and Merger Corp. The Board of Directors of
Premiere and the Board of Directors and the shareholder of Merger Corp shall
have approved the Merger in accordance with the requirement of applicable state
law. Premiere and Merger Corp shall have provided the Company certified copies
of such resolutions.
5.2 Registration Rights. Premiere and each Owner shall have executed and
delivered a Registration Rights Agreement.
VI. MISCELLANEOUS
6.1 Notices. The addresses for notices in accordance with Section 10.1 of
the Uniform Terms for the Company and the Owners are as follows:
If to the Company: With a copy to:
0000 Xxxxxxxxxx Xxxx Xxxxx & Xxxxxxxxx LLP
Bronx, NY 0000 Xxxx 0xx Xxxxxx
___________________ Xxxxxxxxx, XX 00000-0000
Attn: ______________ Attn: Xxxxxxx X. XxXxxxxx, Xx.
Phone: (___) ___-____ Phone: (___) ___-____
Fax: (000) 000-0000 Fax: (___) ___-____
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If to the Owners: With a copy to:
0000 Xxxxxxxxxx Xxxx Xxxxx & Xxxxxxxxx LLP
Bronx, NY 0000 Xxxx 0xx Xxxxxx
___________________ Xxxxxxxxx, XX 00000-0000
Attn: ______________ Attn: Xxxxxxx X. XxXxxxxx, Xx.
Phone: (___) ___-____ Phone: (___) ___-____
Fax: (000) 000-0000 Fax: (___) ___-____
6.2 Owner's Representative. The Owners' Representative for purposes of
Section 10.2 of the Uniform Terms shall be Banner X. Xxxxxx, who shall serve as
the Owner's Representative under the terms of said Section 10.2 of the Uniform
Terms.
6.3 Certain Definitions. In addition to the terms defined elsewhere herein
and in the Uniform Terms, as used in this Agreement:
(a) "Anticipated Closing Date" shall mean April 30, 1997.
(b) "Knowledge" of the Company shall mean the personal knowledge after
due inquiry of those facts that are known or should reasonably have been
known after due inquiry by Banner X. Xxxxxx and Xxxxxxx X. Xxxxxx and
the knowledge of any such Persons obtained or which would have been
obtained from a reasonable investigation.
(c) "Outside Closing Date" shall mean June 30, 1997.
[Signatures continued on following page.]
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IN WITNESS WHEREOF, THE UNDERSIGNED HAVE EXECUTED THIS AGREEMENT AS OF THE
DAY AND year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.,
a Georgia corporation
/s/ Xxxxxxx X. Xxxxx
By: _____________________________
Sr. V.P.
Title: __________________________
Attest:
/s/ Xxxxxxx X. Xxxxxxx
By: ____________________________
Asst. Sec.
Title: _________________________
COMPANY:
VOICE-NET COMMUNICATIONS
SYSTEMS, INC.
a New York corporation
/s/ Xxxxxxx X. Xxxxxx
By: _____________________________
President
Title: __________________________
Attest:
/s/ Xxxxxxxx X. Xxxxxxx
By: ____________________________
Ex. Vice President
Title: _________________________
OWNERS:
/s/ Banner X. Xxxxxx
_________________________________
BANNER X. XXXXXX,
an individual resident of the
State of New York
Witness:
/s/ Xxxxxxxx X. Xxxxxxx
By: ____________________________
Xxxxxxxx X. Xxxxxxx
Name: __________________________
[signatures continued on following page]
/s/ Xxxxxxx X. Xxxxxx
_________________________________
XXXXXXX X. XXXXXX,
an individual resident of the
State of New York
Witness:
/s/ Xxxxxxxx X. Xxxxxxx
By: ____________________________
Xxxxxxxx X. Xxxxxxx
Name: __________________________
TRANSFER AGREEMENT
BY AND AMONG
PREMIERE TECHNOLOGIES INC.,
VT OF LONG ISLAND INC.
AND
OWNERS OF VT OF LONG ISLAND INC.
DATED AS OF APRIL 2, 1997
TRANSFER AGREEMENT
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of
April 2, 1997 by and among Premiere Technologies, Inc., a Georgia corporation
("Premiere"), VT of Long Island Inc., a New York corporation (the "Company"),
and those parties listed on the signature pages hereto as the owners of the
Company (the "Owners").
W I T N E S S E T H:
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WHEREAS, this Agreement provides for the acquisition of the Company by
Premiere pursuant to the merger of the Company with and into a wholly owned
subsidiary of Premiere ("Merger Corp"), with Merger Corp as the surviving
corporation in such merger (the "Merger");
WHEREAS, the respective Boards of Directors of Premiere and the Company have
approved the terms and conditions set forth in this Agreement;
WHEREAS, the Owners own one hundred percent (100%) of the equity interests in
the Company;
WHEREAS, this Agreement provides for all of the Owners' equity interests in
the Company to be converted into the right to receive shares of Premiere Stock
in connection with the Merger;
WHEREAS, it is also the intention of the parties hereto that the form of the
transactions with respect to the Company, Premiere and Merger Corp shall qualify
as a "reorganization" within the meaning of Section 368(a) of the Code for
federal income tax purposes; and
WHEREAS, it is also the intention of the parties hereto that the business
combination to be effected by the Merger be accounted for as a pooling of
interests.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
I. UNIFORM TERMS AND CONDITIONS
1.1 Incorporation by Reference. The Uniform Terms and Conditions attached
hereto as Exhibit A (the "Uniform Terms") are hereby made a part of and
incorporated herein as if fully restated herein. Capitalized terms not defined
herein shall have the meanings provided in the Uniform Terms.
II. TERMS OF MERGER
2.1 The Merger.
(a) Subject to the terms and conditions of this Agreement, at the
Effective Time, the Company shall be merged with and into Merger Corp in
accordance with the provisions of the business corporation act under the laws of
the State of New York (the "New York Act") and the laws of the State of Georgia
(the "Georgia Act"). Merger Corp shall be the surviving corporation resulting
from the Merger, shall thereafter conduct the business and operations of the
Company as a wholly owned subsidiary of Premiere and shall continue to be
governed by the laws of the State of Georgia. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the respective boards of directors of Premiere, Merger Corp and the Company.
(b) Subject to the provisions of this Agreement, the parties shall file
a Certificate of Merger executed in accordance with the relevant provisions of
the New York Act and a Certificate of Merger executed in accordance with the
relevant provisions of the Georgia Act and shall make all other filings or
recordings required under each such Act as soon as practicable on or after the
Closing Date. The Merger and other transactions contemplated by this Agreement
shall become effective on the date and at the time the Certificate of Merger
reflecting the Merger becomes effective with the Secretary of State of the State
of New York and the Certificate of Merger reflecting the Merger becomes
effective with the Secretary of State of the State of Georgia (the "Effective
Time").
(c) The charter and Bylaws of Merger Corp in effect immediately prior
to the Effective Time shall be the charter and Bylaws of the surviving
corporation until otherwise amended or repealed, the directors of Merger Corp
immediately prior to the Effective Time shall serve as the directors of the
surviving corporation from and after the Effective Time, and the officers of
Merger Corp in office immediately prior to the Effective Time shall serve as the
officers of the surviving corporation from and after the Effective Time.
2.2 Conversion of Shares. Subject to the provisions of this Section 2.2,
and in consideration for the transactions contemplated hereby, at the Effective
Time, by virtue of the Merger and without any action on the part of the parties
hereto or the shareholders of any of the parties hereto, the shares of the
constituent corporations of the Merger shall be converted as follows:
(a) Each share of Premiere Stock and each share of Merger Corp common
stock issued and outstanding at the Effective Time shall remain issued and
outstanding after the Effective Time.
(b) All of the shares of the no par value capital stock of the Company
("Company Stock") (excluding treasury shares and excluding shares held by
shareholders who perfect their statutory dissenters' rights as provided in
Section 2.4 of this Agreement) issued and outstanding at the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for the
right to receive:
(i) the number of shares of Premiere Stock determined by dividing
(A) the product of .9 multiplied by the Company Purchase
Price, by (B) the Average Closing Price; and
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(ii) the number of shares of Premiere Stock determined by dividing
(A) the product of .1 multiplied by the Company Purchase
Price, by (B) the Average Closing Price (the "General Escrow
Amount");
all as determined in accordance with Section 2.3 below (collectively, the
"Consideration"). Subject to Section 2.2(d) below, the Consideration shall be
issuable to the Owners pro rata in accordance with their ownership of Company
Common Stock pursuant to Section 2.6, which ownership the Owners represent has
not been adjusted in contemplation of the transactions described herein.
(c) Any and all shares of Company Common Stock held as treasury shares
by the Company shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.
(d) Upon consummation of the Merger, the Owners shall deliver the
General Escrow Amount in negotiable form to the Escrow Agent to be held in
escrow pursuant to the terms and conditions of the Escrow Agreement in the form
attached hereto as Exhibit B, which shall be executed and delivered by Premiere
and the Owners at the Closing.
2.3 Calculation of Consideration. For purposes of determining the
Consideration issuable to the Owners pursuant to Section 2.2(b) above, the
following shall apply:
(a) "Average Closing Price" shall be the average of the daily last sale
prices of Premiere Stock for the period consisting of twenty (20) consecutive
trading days on which such shares are actually traded on the Nasdaq National
Market (as reported by the Wall Street Journal or, if not reported thereby, any
other authoritative source selected by Premiere) ending at the close of trading
on the first trading day immediately preceding the Closing; provided, however,
that the Average Closing Price shall not be less than $22.50 nor more than
$30.50 (collectively, $22.50 and $30.50 are referred to as the "Average Closing
Price Limitations").
(b) "Company Purchase Price" shall be the sum of (i) the amount
determined by multiplying the Normalized EBITDA of the Company by the Stock
Multiple, plus (ii) the amount of cash reflected on the Closing Date Balance
Sheet, minus (iii) the aggregate amount of principal and accrued and unpaid
interest under funded debt and capital lease obligations reflected on the
Closing Date Balance Sheet, and minus (iv) the amount by which the Transaction
Costs exceed the Deductible Amount.
(c) "Deductible Amount" shall be an amount equal to $5,000.
(d) "Normalized EBITDA" of the Company shall be an amount equal to
$80,690.00.
(e) "Registration Right" shall mean the right to include Premiere Stock
issued in the Merger in a registration statement which Premiere intends to file
promptly after the end of the first full fiscal quarter of Premiere containing
the period of post-Merger combined operations required by ASRs 130 and 135,
pursuant to the terms and conditions of the Stock Restriction and Registration
Rights Agreement in the form attached hereto as of Exhibit C (the "Registration
Rights Agreement") .
(f) "Stock Multiple" shall be six (6).
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(g) "Transaction Costs" shall mean all amounts incurred but unpaid by
the Company in connection with (i) the negotiation and preparation of this
Agreement, (ii) the preparation of the Audited Financial Statements, (iii) the
consummation of the Transactions and (iv) one-half of the costs and expenses of
public record searches pursuant to Section 5.9(b) of the Uniform Terms.
2.4 Dissenting Shareholders. Subject to Section 4.2, any holder of shares
of voting capital stock of the Company who perfects any available dissenters'
rights in accordance with and as contemplated by the New York Act shall be
entitled to receive the value of such shares in cash from the Company after the
Effective Time as determined pursuant to such provision of law; provided, that
no such payment shall be made to any dissenting shareholder unless and until
such dissenting shareholder has complied with the applicable provisions of the
New York Act and surrendered to the Company the certificate or certificates
representing the shares for which payment is being made. In the event that a
dissenting shareholder of the Company fails to perfect, or effectively withdraws
or loses, its right to appraisal and of payment for its shares, Premiere shall
issue and deliver the consideration to which such holder of shares of Company
capital stock is entitled under this Article II (without interest) upon
surrender of certificates representing such shares held by such holder.
2.5 Closing. The Closing shall take place at the offices of Xxxxxx & Bird
LLP, Atlanta, Georgia, at 10:00 a.m. local time, on the date set forth in the
Uniform Terms, provided all conditions set forth in Articles V and VI of the
Uniform Terms and Articles IV and V of this Agreement have been satisfied or
waived, or on such other date or at such other place and time mutually agreed
upon by the parties.
2.6 Exchange of Shares. Promptly after the Effective Time, Premiere and
Company shall cause to be mailed to the former Company shareholders appropriate
transmittal materials for the surrender of the certificate or certificates
formerly representing their shares of Company Common Stock in exchange for
shares of Premiere Stock as provided in this Agreement. Until surrendered for
exchange in accordance herewith, each certificate theretofore representing
shares of Company Common Stock shall from and after the Effective Time represent
only the right to receive the Consideration provided in this Agreement in
exchange therefor. No certificates representing fractional shares will be
issued as a result of the Merger. Each holder of shares of Company Common Stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of Premiere Common Stock shall receive, in lieu
thereof, cash (without interest) in an amount equal to such fractional part of a
share of Premiere Common Stock multiplied by the Average Closing Price.
2.7 Purchase for Investment, Etc. Each Owner, represents and warrants the
following to Premiere:
(a) such Owner has accurately completed the Investor Questionnaire
required by Premiere prior to or contemporaneous with the execution of the
Transfer Agreement and the statements therein are true and correct and
acknowledges that Premiere has relied upon such statements in entering into this
Agreement;
- 4 -
(b) such Owner is acquiring Premiere Stock for such Owner's own account
and not with a view to or for sale in connection with any public distribution
thereof within the meaning of the Securities Act;
(c) such Owner (i) has sufficient knowledge and experience in financial
and business matters to enable him, her or it to evaluate the merits and risks
of an investment in Premiere Stock, (ii) has the ability to bear the economic
risk of acquiring Premiere Stock for an indefinite period and to afford a
complete loss thereof and (iii) has had an opportunity to ask questions of and
to receive answers from the officers of Premiere and to obtain additional
information in writing as requested, which has been made available to and
examined by such Owner or such Owner's advisors; and
(d) such Owner (i) acknowledges that Premiere Stock has not been
registered under any securities laws and cannot be resold without registration
thereunder or exemption therefrom, (ii) agrees not to transfer all or any
Premiere Stock received by such Owner unless such transfer has been registered
or is exempt from registration under applicable securities laws and (iii)
acknowledges that the certificate(s) representing Premiere Stock shall bear the
following legend with respect to the restrictions on transfer under applicable
securities laws:
"The securities represented hereby have not been registered under
the Securities Act of 1933, as amended, and may not be offered,
sold, transferred or otherwise disposed of unless registered with
the Securities and Exchange Commission of the United States and the
securities regulatory authorities of applicable states or unless an
exemption from such registration is available."
2.8 Accounting, Tax and Regulatory Matters. Each Owner and the Company,
jointly and severally, represents and warrants to Premiere that neither the
Company, any Owner nor any Affiliate thereof has taken or agreed to take any
action or has any knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the Merger from qualifying for pooling-of-interests
accounting treatment or as a reorganization within the meaning of Section 368(a)
of the Code, or (ii) materially impede or delay receipt of any consents referred
to in Section 5.6 of the Uniform Terms or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
III. ADDITIONAL AGREEMENTS
3.1 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, the Company and Merger Corp shall execute and file
the Certificate of Merger with the Secretary of State of the State of New York
and a Certificate of Merger with the Secretary of State of the State of Georgia
in connection with the Closing.
3.2 Conditions to Closing. The Company, the Owners and Premiere agree to
use their commercially reasonable best efforts to satisfy the closing conditions
set forth in Articles IV and V of this Agreement by the date indicated therein
or the Closing Date, as applicable.
3.3 Additional Indemnification Items. Subject to Sections 8.2 through 8.6
of the Uniform Terms, the Owners and, if the Transactions involve an Asset
Transfer, the Company, shall jointly and severally indemnify and hold harmless
Premiere, and its officers, directors, agents or affiliates,
- 5 -
from and against any and all Losses suffered or incurred by any such party by
reason of or arising out of any of the following:
(a) a breach of Section 2.19 of the Uniform Terms as it relates to
liability for sales tax (irrespective of whether disclosed on Schedule 2.19 or
in the Financial Satements).
3.4 Tax Matters. Each of the Company, the Owners and Premiere undertakes
and agrees to use its reasonable efforts to cause the Merger, and to take no
action which would cause the Merger not, to qualify as a "reorganization" within
the meaning of Section 368(a) of the Code for federal income tax purposes.
Notwithstanding the foregoing, the Owners understand that (i) Premiere makes no
representation or warranty regarding the tax treatment of this Agreement or the
Merger, (ii) the Closing is not subject to a condition that an Internal Revenue
Service ruling or tax opinion be obtained as to the federal income tax
consequences of this Agreement or the Merger, and (iii) the Company and the
Owners shall look to their respective advisors for advice concerning the tax
consequences of this Agreement and the Merger.
3.5 Registration Rights. At the Closing. Premiere and the Owners shall
execute and deliver the Registration Rights Agreement.
3.6 Accounting Treatment.
(a) The Company and each of the Owners has accurately completed the
Pooling Questionnaire required by Premiere prior to or contemporaneous with the
execution of this Agreement, and the statements therein are true and correct.
(b) Premiere, the Company and each of the Owners agrees to use its
reasonable efforts to cause the Merger, and to take no action which would cause
the Merger not, to qualify for treatment as a pooling of interests for
accounting purposes. Without limiting the foregoing, the Company and each of
the Owners agrees not to sell, transfer, or otherwise dispose of his, her or its
interests in, or reduce his, her or its risk relative to, any of the shares of
Premiere Common Stock received in connection with the Merger until such time as
Premiere notifies the Company and each such Owner that the requirements of ASRs
130 and 135 have been met. The Company and each of the Owners understands that
ASRs 130 and 135 relate to the publication of financial results of at least
thirty (30) days of post-Merger combined operations of Premiere and the Company.
Premiere agrees that it shall publish such results within forty-five (45) days
after the end of the first fiscal quarter of Premiere containing the required
period of post-Merger combined operations and that it shall notify the Company
and each of the Owners promptly following such publication. Premiere shall be
entitled to place the following restrictive legend on the shares of Premiere
Stock issued pursuant to the Merger to enforce the foregoing restrictions:
"The shares represented by this certificate were issued pursuant to a
business combination which is accounted for as a "pooling of interests"
and may not be sold, nor may the owner thereof reduce his risks relative
thereto in any way, until such time as Premiere Technologies, Inc.
("Premiere") has published the financial results covering at least 30
days of combined operations after the effective date of the merger
through which the business combination was effected.
3.7 Affiliate Agreements. The Company has disclosed in Schedule 3.7 all
Persons whom it reasonably believes is an "affiliate" of the Company for
purposes of Rule 145 under the 1933 Act.
- 6 -
The Company shall use its reasonable efforts to cause each such Person to
deliver to Premiere as soon as reasonably practicable following the execution of
this Agreement, a written agreement, substantially in the form attached hereto
as Exhibit D.
3.8 Tax Representations. In connection with the opinion to be rendered to
Premiere by Xxxxxx & Bird to the effect that the transactions contemplated
hereby will constitute a tax-free reorganization within the meaning of Section
368(a) of the Code, the Owners shall furnish such counsel with such
representations as to their plans for the disposition of the shares of Premiere
Stock to be received in the Transactions as such counsel shall reasonably
request.
3.9 Restricted Stock. All contractual restrictions or limitations on
transfer with respect to Company Common Stock under any plan, program, contract
or arrangement, to the extent that such restrictions or limitations have not
already lapsed (whether as a result of the Transactions or otherwise), and
except as otherwise expressly provided in such plan, program, contract or
arrangement, shall remain in full force and effect with respect to shares of
Premiere Stock into which such restricted stock is converted pursuant to Section
2.2 of this Transfer Agreement.
3.10 Exchange Listing. Premiere shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq National Market the shares of
Premiere Stock to be issued to the Owners pursuant to the Transactions, and
Premiere shall give all notices and make all filings with the NASD required in
connection with the Transactions.
IV. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF PREMIERE
In addition to the conditions of Premiere contained in Article V of the
Uniform Terms, the obligation of Premiere to consummate the Transactions is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:
4.1 Approval of Owners. The Owners shall have approved the Merger in
accordance with the requirements of the New York Act and the Company shall have
provided Premiere certified copies of such resolutions, and Owners holding no
more than ten percent (10%) of the Company Common Stock issued and outstanding
immediately prior to the Effective Time shall have exercised any of the rights
described in Section 2.4.
4.2 Grand Solution Documents. VTNLP, VTE, the NAP and each of the
Franchisee Companies shall have executed and delivered Grand Solution Documents
reflecting the terms described in Exhibit E hereto in form and substance
reasonably satisfactory to Premiere.
4.3 Pooling Letter. Premiere shall have received a letter from the Company
in the form attached hereto as Exhibit F containing representations related to
the pooling of interests accounting treatment.
4.4 Reorganization Opinion. Premiere shall have received an opinion of
Xxxxxx & Bird LLP, counsel to Premiere, to the effect that the transactions
contemplated by the Agreement, including the Merger, will constitute a tax-free
reorganization within the meaning of Section 368(a) of the Code.
- 7 -
V. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF THE COMPANY
AND THE OWNERS
In addition to the conditions of the Company and the Owners contained in
Article VI of the Uniform Terms, the obligation of the Company and the Owners to
consummate the Transactions is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions:
5.1 Approval of Premiere and Merger Corp. The Board of Directors of
Premiere and the Board of Directors and the shareholder of Merger Corp shall
have approved the Merger in accordance with the requirement of applicable state
law. Premiere and Merger Corp shall have provided the Company certified copies
of such resolutions.
5.2 REGISTRATION RIGHTS. PREMIERE AND EACH OWNER SHALL HAVE EXECUTED AND
DELIVERED A REGISTRATION RIGHTS AGREEMENT.
VI. MISCELLANEOUS
6.1 NOTICES. THE ADDRESSES FOR NOTICES IN ACCORDANCE WITH SECTION 10.1 OF
THE UNIFORM TERMS FOR THE COMPANY AND THE OWNERS ARE AS FOLLOWS:
IF TO THE COMPANY: WITH A COPY TO:
0000 XXXXXXXXXX XXXX XXXXX & XXXXXXXXX LLP
BRONX, NY 0000 XXXX 0XX XXXXXX
___________________ XXXXXXXXX, XX 00000-0000
ATTN: XXXXXXX X. XXXXXX ATTN: XXXXXXX X. XXXXXXXX, XX.
PHONE: (___) ___-____ PHONE: (___) ___-____
FAX: (000) 000-0000 FAX: (___) ___-____
IF TO THE OWNERS: WITH A COPY TO:
0000 XXXXXXXXXX XXXX XXXXX & XXXXXXXXX LLP
BRONX, NY 0000 XXXX 0XX XXXXXX
___________________ XXXXXXXXX, XX 00000-0000
ATTN: ______________ ATTN: XXXXXXX X. XXXXXXXX, XX.
PHONE: (___) ___-____ PHONE: (___) ___-____
FAX: (000) 000-0000 FAX: (___) ___-____
6.2 OWNER'S REPRESENTATIVE. THE OWNERS' REPRESENTATIVE FOR PURPOSES OF
SECTION 10.2 OF THE UNIFORM TERMS SHALL BE BANNER X. XXXXXX, WHO SHALL SERVE AS
THE OWNER'S REPRESENTATIVE UNDER THE TERMS OF SAID SECTION 10.2 OF THE UNIFORM
TERMS.
6.3 CERTAIN DEFINITIONS. IN ADDITION TO THE TERMS DEFINED ELSEWHERE HEREIN
AND IN THE UNIFORM TERMS, AS USED IN THIS AGREEMENT:
- 8 -
(A) "ANTICIPATED CLOSING DATE" SHALL MEAN APRIL 30, 1997.
(B) "KNOWLEDGE" OF THE COMPANY SHALL MEAN THE PERSONAL KNOWLEDGE AFTER
DUE INQUIRY OF THOSE FACTS THAT ARE KNOWN OR SHOULD REASONABLY HAVE BEEN
KNOWN AFTER DUE INQUIRY BY BANNER X. XXXXXX, XXXXXXX X. XXXXXX AND
XXXXXXXX X. XXXXXXX AND THE KNOWLEDGE OF ANY SUCH PERSONS OBTAINED OR
WHICH WOULD HAVE BEEN OBTAINED FROM A REASONABLE INVESTIGATION.
(C) "OUTSIDE CLOSING DATE" SHALL MEAN JUNE 30, 1997.
- 9 -
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.,
a Georgia corporation
/s/ Xxxxxxx X. Xxxxx
By: ________________________________
Sr. V.P.
Title: _____________________________
Attest:
/s/ Xxxxxxx X. Xxxxxxx
By: ____________________________
Asst. Sec.
Title: _________________________
COMPANY:
VT OF LONG ISLAND INC.,
a New York corporation
/s/ Xxxxxxx X. Xxxxxx
By: ________________________________
Vice President
Title: _____________________________
Attest:
/s/ Xxxxxxxx X. Xxxxxxx
By: ____________________________
Treasurer
Title: _________________________
OWNERS:
/s/ Banner X. Xxxxxx
____________________________________
BANNER X. XXXXXX,
an individual resident of the
State of New York
Witness:
/s/ Xxxxxxxx X. Xxxxxxx
By: ____________________________
Xxxxxxxx X. Xxxxxxx
Name: __________________________
[Signatures continued on following page.]
/s/ Xxxxxxx X. Xxxxxx
___________________________________
XXXXXXX X. XXXXXX,
an individual resident of the
State of New York
Witness:
/s/ Xxxxxxxx X. Xxxxxxx
By: ____________________________
Xxxxxxxx X. Xxxxxxx
Name: __________________________
/s/ Xxxxxxxx X. Xxxxxxx
___________________________________
XXXXXXXX X. XXXXXXX,
an individual resident of the
State of New York
Witness:
/s/ Banner X. Xxxxxx
By: ____________________________
Banner X. Xxxxxx
Name: __________________________
