Exhibit 99.2
Execution Version
AGREEMENT AND PLAN OF MERGER
AMONG
▇▇▇▇▇▇▇▇ NV,
NORTH ACQUISITION CORPORATION,
and
CORPORATE EXPRESS, INC.
JULY 13, 1999
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS........................................................ 1
ARTICLE II. MERGER TRANSACTIONS...............................................13
Section 2.1. The Merger.......................................................13
Section 2.2. The Closing......................................................13
Section 2.3. Actions at the Closing...........................................13
Section 2.4. Effect of Merger.................................................14
Section 2.5. Procedure for Payment............................................15
Section 2.6. Closing of Transfer Records......................................16
Section 2.7. Withholding Rights...............................................16
Section 2.8. Use of Corporate Express Name and Headquarters...................17
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................17
Section 3.1. Organization, Qualification, and Corporate Power.................17
Section 3.2. Capitalization...................................................18
Section 3.3. Authorization of Transaction.....................................19
Section 3.4. Noncontravention.................................................19
Section 3.5. Filings with the SEC.............................................20
Section 3.6. Financial Statements.............................................21
Section 3.7. Compliance with Applicable Laws..................................21
Section 3.8. Absence of Changes or Events.....................................22
Section 3.9. Litigation.......................................................23
Section 3.10. Taxes...........................................................23
Section 3.11. Employee Benefits...............................................26
Section 3.12. Brokers' Fees...................................................28
Section 3.13. Disclosure......................................................28
Section 3.14. Employee Relations..............................................29
Section 3.15. Intellectual Property...........................................29
Section 3.16. No Undisclosed Material Liabilities.............................30
Section 3.17. Customers and Suppliers.........................................30
Section 3.18. State Takeover Statutes.........................................31
Section 3.19. Voting Requirements.............................................31
Section 3.20. Year 2000 Compliance............................................31
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE MERGER
SUBSIDIARY....................................................................31
Section 4.1. Organization.....................................................32
Section 4.2. Financing........................................................32
Section 4.3. Authorization of Transaction.....................................32
Section 4.4. Noncontravention.................................................33
Section 4.5. Litigation.......................................................34
Section 4.6. Disclosure.......................................................34
Section 4.7. No Prior Activities of Merger Subsidiary.........................35
Section 4.8. Surviving Corporation After Merger...............................35
ARTICLE V. ADDITIONAL AGREEMENTS..............................................35
Section 5.1. General..........................................................35
Section 5.2. Sale of Negotiable Securities....................................36
Section 5.3. Dispositions.....................................................36
Section 5.4. Delivery Systems Spinoff.........................................38
Section 5.5. NASDAQ Listing...................................................40
Section 5.6. Notices and Consents.............................................40
Section 5.7. Regulatory Matters and Approvals.................................41
Section 5.8. Fairness Opinions................................................43
Section 5.9. Financing........................................................43
Section 5.10. Rights Agreement................................................43
Section 5.11. Operation of Business...........................................43
Section 5.12. Full Access; Confidentiality Agreement;
Solicitation of Employees.....................................46
Section 5.13. Notice of Developments..........................................46
Section 5.14. Exclusivity.....................................................47
Section 5.15. Announcements...................................................48
Section 5.16. Insurance and Indemnification...................................49
Section 5.17. Company Stock Plans and Warrants................................49
Section 5.18. Employee Benefits...............................................51
Section 5.19. Stay-Put Bonuses................................................54
Section 5.20. Indentures and Change of Control Offers.........................54
Section 5.21. Transfer Tax....................................................54
ARTICLE VI. CONDITIONS TO OBLIGATION TO CLOSE.................................55
Section 6.1. Conditions to Obligation of the Buyer and the Merger Subsidiary..55
Section 6.2. Conditions to Obligation of the Company..........................56
ARTICLE VII. TERMINATION......................................................58
Section 7.1. Termination of Agreement.........................................58
Section 7.2. Effect of Termination............................................60
ARTICLE VIII. MISCELLANEOUS...................................................60
Section 8.1. Survival.........................................................60
Section 8.2. No Third-Party Beneficiaries.....................................60
Section 8.3. Entire Agreement.................................................61
Section 8.4. Succession and Assignment........................................61
Section 8.5. Counterparts.....................................................61
Section 8.6. Headings.........................................................61
Section 8.7. Notices..........................................................61
Section 8.8. Governing Law....................................................63
Section 8.9. Jurisdiction and Venue; Waiver of Jury Trial.....................63
Section 8.10. Amendments and Waivers..........................................64
Section 8.11. Severability....................................................65
Section 8.12. Expenses........................................................65
Section 8.13. Construction....................................................66
Section 8.14. Incorporation of Exhibits and Schedules.........................66
AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger, dated as of July 13, 1999 (the "Agreement"),
by and among ▇▇▇▇▇▇▇▇ NV, a company organized under the laws of the Kingdom of
The Netherlands (the "Buyer"), North Acquisition Corporation, a Colorado
corporation and a wholly-owned Subsidiary of the Buyer (the "Merger
Subsidiary"), and Corporate Express, Inc., a Colorado corporation (the
"Company"). The Buyer, the Merger Subsidiary, and the Company are referred to
collectively herein as the "Parties."
WHEREAS, the Supervisory and Executive Boards of the Buyer and the
respective Boards of Directors of the Merger Subsidiary and the Company have
approved this Agreement, and deem it advisable and in the best interests of
their respective shareholders to consummate the merger of Merger Subsidiary with
and into the Company on the terms and conditions set forth herein, pursuant to
which the Buyer will acquire all of the outstanding capital stock of the Company
for cash on the terms and conditions set forth herein;
WHEREAS, this Agreement provides for the sale of the Delivery Systems
Companies or the spinoff (through the Merger) of such companies at the Effective
Time on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
ARTICLE I.
DEFINITIONS.
"Acquisition Proposal" means any written offer or proposal for, or any
written indication of interest in, any (i) direct or indirect acquisition or
purchase of a business or assets that constitute 20% or more of the net
revenues, net income or the assets of the Company and its Subsidiaries, taken as
a whole (excluding the Delivery Systems Companies and the Expedited Companies),
(ii) direct or indirect acquisition or purchase of 20% or more of any class of
equity securities of the Company or any of its Subsidiaries whose business
constitutes 20% or more of the net revenues, net income or assets of the Company
and its Subsidiaries, taken as a whole (excluding the Delivery Systems Companies
and the Expedited Companies), (iii) tender offer and/or exchange offer that if
consummated would result in any person beneficially owning 20% or more of any
class of equity securities of the Company or any of its Subsidiaries whose
business constitutes 20% or more of the net revenues, net income or assets of
the Company and its Subsidiaries, taken as a whole (excluding the Delivery
Systems Companies and the Expedited Companies), or (iv) merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any of its Subsidiaries whose business
constitutes 20% or more of the net revenue, net income or assets of the Company
and its Subsidiaries, taken as a whole (excluding the Delivery Systems Companies
and the Expedited Companies), other than the transactions contemplated by this
Agreement, including the Merger, Delivery Systems Dispositions and the Expedited
Dispositions.
"Affected Employees" has the meaning set forth in Section 5.18(b).
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Exchange Act.
"Applicable Laws" shall mean, with respect to a Person, any and all
statutes, laws, ordinances, rules, orders and regulations of any Governmental
Authority applicable to such Person and/or such Person's business, properties or
assets.
"Articles of Merger" has the meaning set forth in Section 2.3 below.
"Buyer" has the meaning set forth in the preface above.
"Buyer Disclosure Schedule" has the meaning set forth in Article IV below.
"Buyer Shareholder Approval" has the meaning set forth in Section 5.7(d).
"Buyer Special Meeting" has the meaning set forth in Section 5.7(d).
"Central Works Council Approval" shall mean the positive advice of the
Central Works Council of the Buyer with regard to the Merger and the financing
implications thereof.
"Closing" has the meaning set forth in Section 2.2 below.
"Closing Date" has the meaning set forth in Section 2.2 below.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Colorado Business Corporation Act" means the Colorado Business Corporation
Act, as amended.
"Company" has the meaning set forth in the preface above.
"Company Common Share" means any share of the Common Stock, $.0002 par
value per share, of the Company.
"Company Disclosure Schedule" has the meaning set forth in Article III
below.
"Company Intellectual Property" has the meaning set forth in Section
3.15(a).
"Company Rights" has the meaning set forth in Section 3.2.
"Company Rights Agreement" has the meaning set forth in Section 3.2.
"Company SEC Reports" has the meaning set forth in Section 3.5 below.
"Company Shareholder" means any Person who or which holds any Company
Common Shares.
"Company Shareholder Approval" means the affirmative vote of the holders of
two-thirds of the outstanding Company Common Shares in favor of this Agreement
and the Merger in accordance with the Colorado Business Corporation Act.
"Company Special Meeting" has the meaning set forth in Section 5.7(c)
below.
"Company Stock Options" means stock options issued under the Company Stock
Plans and summarized (as to number of options and exercise price) in a list
made available by the Company to the Buyer.
"Company Stock Plans" means any and all of the following: the Corporate
Express, Inc. 1992 Stock Option Plan; the Amended and Restated 1992 Corporate
Express, Inc. Stock Option Plan; the Corporate Express, Inc. 1994 Executive
Stock Option Plan; the 1996 Corporate Express, Inc. Supplemental Stock Option
Plan; the Corporate Express, Inc. 1994 Stock Option and Incentive Plan (as
amended on March 1, 1996); the Corporate Express, Inc. 1996 Stock Option Plan
for Outside Directors; the Corporate
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Express, Inc. Stock Option Plan for French Employees; the Corporate Express,
Inc. Stock Option Plan for USD Optionholders; the Corporate Express, Inc. Stock
Option Plan for United Transnet, Inc. Optionholders; the Distribution Resources
Corporate Express, Inc. Stock Option Plan; the Stock Incentive Plan for Former
Optionholders of Data Document Holdings, Inc.; the Non-Qualified Stock Option
Agreement for Former Optionholder (▇▇▇▇ ▇. ▇▇▇▇▇▇) of Data Document Holdings,
Inc.; and the Computer Software Stock Option Plan.
"Company Stock Purchase Plan" means the Corporate Express, Inc. 1994
Employee Stock Purchase Plan (as amended and restated on January 10, 1995).
"Confidentiality Agreement" has the meaning set forth in Section 5.12(b).
"Definitive Financing Agreements" has the meaning set forth in Section 5.9
below.
"Definitive Proxy Materials" means the definitive proxy materials relating
to the Company Special Meeting.
"Delivery Systems Adjustment Amount" means the amount (whether positive or
negative) by which the aggregate amount of cash dividends and distributions paid
by, or, to the extent that they are forgiven on or prior to the Effective Time,
intercompany advances or loans made by, the Delivery Systems Companies to the
Company or to the Company's other Subsidiaries from the first day of the fiscal
quarter beginning on May 2, 1999 until the Effective Time (including repayments
or reductions in intercompany indebtedness owed by the Delivery Systems
Companies) exceeds the aggregate amount of capital contributions and
intercompany advances and loans made by the Company or its other Subsidiaries to
the Delivery Systems Companies (and other payments made by the Company or its
other Subsidiaries on behalf of or for the direct benefit of the Delivery
Systems Companies) during such period.
"Delivery Systems Companies" means Corporate Express Delivery Systems,
Inc., a Delaware corporation; American Delivery System, Inc., a Michigan
corporation; Corporate Express Distribution Services, Inc., a Michigan
corporation; New Delaware Delivery, Inc., a Delaware corporation; Red Arrow
Corporation, a Missouri corporation; RAC, Inc.; Red Arrow Spotting Services,
Inc.; Red Arrow Trucking Co.; Red Arrow Warehousing, Co.; Rush Trucking, Inc.;
Corporate Express Delivery Systems - Intermountain, Inc., a Delaware
corporation; Corporate Express Delivery
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Leasing - Intermountain, Inc., a Delaware corporation; Corporate Express
Delivery Systems - Mid-Atlantic, Inc., a Delaware corporation; Corporate Express
Delivery Leasing - Mid-Atlantic, Inc., a Delaware corporation; Corporate Express
Delivery Systems - Mid-West, Inc., a Delaware corporation; Corporate Express
Delivery Leasing - Mid-West, Inc., a Delaware corporation; Corporate Express
Delivery Systems - New England, Inc., a Delaware corporation; Corporate Express
Delivery Leasing - New England, Inc., a Delaware corporation; Corporate Express
Delivery Systems - Northeast, Inc., a Delaware corporation; Corporate Express
Delivery Leasing - Northeast, Inc., a Delaware corporation; Corporate Express
Delivery Leasing - Southeast, Inc., a Delaware corporation; Air Courier Dispatch
of New Jersey, Inc., a Minnesota corporation; Sunbelt Courier, Inc., an Arkansas
corporation; Tricor America, Inc., a California corporation; Corporate Express
Delivery Systems - Southwest, Inc., a Delaware corporation; Corporate Express
Delivery Leasing - Southwest, Inc., a Delaware corporation; Corporate Express
Delivery Systems - West Coast, Inc., a Delaware corporation; Corporate Express
Delivery Systems A.1 Division, Inc.; Corporate Express Delivery Leasing - West
Coast, Inc., a Delaware corporation; Midnite Express International Couriers
Limited; Midnite Express International Courier, Inc.; Midnite Express
International (Australia) Pty. Limited; Corporate Express Delivery Systems -
A.V. Division, Inc.; Corporate Express Delivery Administration, Inc., a Nevada
corporation; Corporate Express Delivery Management Business Trust, a Delaware
Business Trust; USDS Canada, Ltd.; 3152740 Canada, Inc.; and Swift Messenger
Service Canada, Ltd. The Delivery Systems Companies do not include the Expedited
Companies.
"Delivery Systems Dispositions" means the consummation of the sale of the
stock or assets of the Delivery Systems Companies, in one or more transactions,
to a Person or Persons other than the Company, its other Subsidiaries or the
Buyer.
"Delivery Systems Losses" has the meaning set forth in Section 5.3(g).
"Delivery Systems Proceeds" means the sum of (a) the aggregate Proceeds
from all Delivery Systems Dispositions and (b) the Delivery Systems Adjustment
Amount (if the Delivery Systems Dispositions shall have occurred).
"Delivery Systems Spinoff" has the meaning set forth in Section 5.4(a).
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"Disposition Proceeds" means an aggregate amount equal to: (a) the Delivery
Systems Proceeds, if any, (b) the Expedited Proceeds, (c) the Negotiable
Securities Proceeds and (d) the Final Adjustment Amount.
"Dissenting Share" means any Company Common Share as to which any Company
Shareholder has properly exercised his or its appraisal rights under the
Colorado Business Corporation Act.
"Effective Time" has the meaning set forth in Section 2.4(a) below.
"Employee Benefit Plans" means all employee benefit plans (as defined in
Section 3(3) of ERISA) and all other employee benefit plans, agreements,
contracts or arrangements providing benefits and/or compensation and/or the
deferral thereof, whether or not subject to ERISA, including executive
compensation and directors' benefit plans, and payroll practices which the
Company, any of its Subsidiaries or any ERISA Affiliate of the Company
maintains, contributes to or has any obligation to or liability for (but
excluding individual employment and severance agreements, collective bargaining
agreements and any "multiemployer plans" (within the meaning of Section
4001(a)(3) of ERISA) to which the Company or any of its Subsidiaries contributes
or is required to contribute thereunder, and plans providing for fringe
benefits, tuition reimbursement, credit union benefits, employee assistance or
other similar non-material benefits).
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices,
investigations, notices of noncompliance or violation or proceedings under any
Environmental Law or any permit issued under any Environmental Law (for purposes
of this definition), "Claims"), including (A) any and all Claims by governmental
or regulatory authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any applicable Environmental Law and (B)
any and all written Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment.
"Environmental Laws" shall mean any and all applicable federal, state,
local or foreign statutes, common law, ordinances, rules, regulations, Permits,
judgments, orders, decrees, injunctions or other legally binding authorizations,
relating to pollution or protection of the environment, health or safety,
6
including: (a) releases as defined in 42 U.S.C. Section 9601(22) ("Releases") or
threatened Releases of Hazardous Material into the environment; or (b) the
generation, treatment, storage, disposal, use, handling, manufacturing,
transportation or shipment of, or exposure to, a Hazardous Material.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and all rules and regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to a Person, any other Person that,
together with such Person, as of the relevant measuring date, is or was required
to be treated as a single employer under Section 414 of the Code.
"EU Competition Laws" has the meaning set forth in Section 3.4.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expedited Adjustment Amount" means the amount (whether positive or
negative) by which the aggregate amount of cash dividends and distributions paid
by, or, to the extent that they are forgiven on or prior to the Effective Time,
intercompany advances or loans made by, the Expedited Companies to the Company
or to the Company's other Subsidiaries from the first day of the fiscal quarter
beginning on May 2, 1999 until the Effective Time (including repayments or
reductions in intercompany indebtedness owed by the Expedited Companies) exceeds
the aggregate amount of capital contributions and intercompany advances and
loans made by the Company or its other Subsidiaries to the Expedited Companies
(and other payments made by the Company or its other Subsidiaries on behalf of
or for the direct benefit of the Expedited Companies) during such period.
"Expedited Companies" means Corporate Express Delivery Systems - Expedited,
Inc., a Delaware corporation and an indirect wholly-owned subsidiary of the
Company, and Corporate Express Delivery Leasing - Expedited, Inc., a Delaware
corporation and an indirect wholly-owned subsidiary of the Company.
"Expedited Dispositions" means the consummation of the sale of the stock or
assets of the Expedited Companies, in one or more transactions, to a Person or
Persons other than the Company, the Company's other Subsidiaries or the Buyer,
including any sale, liquidation or collection of receivables generated by the
Expedited Companies that is part of or related to such sale.
7
"Expedited Proceeds" means the sum of (a) the aggregate Proceeds from the
Expedited Dispositions and (b) the Expedited Adjustment Amount (if the Expedited
Dispositions shall have occurred).
"Fairness Opinions" has the meaning set forth in Section 5.8 below.
"Final Adjustment Amount" means the amount (whether positive or negative)
by which (a) the sum of (i) the Forms Sale Final Adjustment and (ii) the Sofco
Final Adjustment exceeds (b) $3,351,270.
"Financing Commitments" has the meaning set forth in Section 4.2 below.
"Forms Sale Proceeds" means the Proceeds received by the Company from the
sale of certain assets constituting its forms businesses pursuant to the Asset
Purchase Agreement between Global Docugraphix Inc. and CEX Holdings, Inc., dated
as of May 28, 1999.
"Forms Sale Final Adjustment" means the amount (whether positive or
negative) by which the Forms Sale Proceeds exceeds $9,362,000.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Governmental Authority" shall mean any federal, state, local or foreign
court, administrative agency or commission or other governmental authority or
instrumentality.
"▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"Hazardous Material" means (A) any petroleum or petroleum products,
radioactive materials, asbestos in any form that has become friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, gas; and (B)
hazardous substances (as defined in 42 U.S.C. Section 9601(14)).
"Indemnitees" has the meaning set forth in Section 5.16(c).
"Material Adverse Effect," with respect to any Person, means any material
adverse effect on the business, assets, liabilities, results of operations or
financial
8
condition of such Person and its Subsidiaries, taken as a whole, excluding
effects attributable directly and predominantly to the announcement of this
Agreement, including the loss of employees, customers, orders, products or
suppliers; provided, that with respect to the Company, such determination shall
be made after giving effect to the Expedited Dispositions (to the extent
consummated) and the Delivery Systems Dispositions or Delivery Systems Spinoff.
"Merger" has the meaning set forth in Section 2.1 below.
"Merger Consideration" has the meaning set forth in Section 2.4(e) below.
"Merger Subsidiary" has the meaning set forth in the preface above.
"NMS" shall mean the Nasdaq National Market.
"Negotiable Securities" has the meaning set forth in Section 5.2.
"Negotiable Securities Proceeds" means the aggregate cash proceeds received
by the Company from the sale of the Negotiable Securities from the date hereof
to the Effective Time, net of out-of-pocket fees and expenses paid to third
parties.
"Non-U.S. Plans" has the meaning set forth in Section 3.11(h).
"Option Termination Adjustment Amount" means (a) $10.0 million plus (b) the
amount by which the aggregate cash portion of the Merger Consideration that
would be payable upon the exercise of all Company Stock Options or Warrants
existing on the date hereof that are terminated or cancelled prior to the
Effective Time (other than under Section 5.17(a) or 5.17(c)) exceeds the
aggregate exercise price of all such terminated or cancelled Company Stock
Options or Warrants.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Parties" has the meaning set forth in the preface above.
"Paying Agent" has the meaning set forth in Section 2.5(a) below.
"Payment Fund" has the meaning set forth in Section 2.5(a) below.
9
"Per Share Adjustment Amount" means:
(a) the amount, if any, by which (i) the Disposition Proceeds exceeds (ii)
$70.0 million (or $20.0 million if the Delivery Systems Spinoff is elected under
Section 5.4); or
(b) provided that the Delivery Systems Spinoff is not elected, the negative
of the amount, if any, by which (i) $50.0 million exceeds (ii) the Disposition
Proceeds;
in either case divided by the Total Number of Company Common Shares Outstanding.
"Permits" shall mean any and all federal, state, local and foreign
governmental approvals, authorizations, certificates, filings, franchises,
licenses, notices, permits and rights, including all authorizations under
Environmental Laws.
"Permitted Cash Investments" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (b) U.S. dollar denominated
(or foreign currency fully hedged) time deposits, certificates of deposit,
Eurodollar time deposits or Eurodollar certificates of deposit of (i) any
domestic commercial bank of recognized standing having capital and surplus in
excess of $100.0 million or (ii) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is at
least P-1 or the equivalent thereof, in each case with maturities of not more
than twelve months from the date of acquisition; and (c) repurchase agreements
with a bank or trust company having capital and surplus in excess of $100.0
million for direct obligations issued by or fully guaranteed by the United
States of America in which the Surviving Corporation will have a perfected first
priority security interest (subject to no other liens) and having, on the date
of purchase thereof, a fair market value of at least 100% of the amount of
repurchase obligations.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
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"Proceeds" means the aggregate proceeds received by the Company or any of
its Subsidiaries in respect of any of the Delivery Systems Dispositions, the
Expedited Dispositions, the Sofco Disposition or the assets described in the
definition of Forms Sale Proceeds (including the fair market value of any non-
cash consideration received in any such sale as determined by the Buyer in its
sole discretion), including the aggregate proceeds received from any sales,
liquidations or collections of receivables generated in connection with such
sale or dispositions, net of out-of-pocket fees and expenses paid to third
parties.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialman's, and
similar liens, (b) liens for taxes not yet due and payable or for taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Sofco" means Sofco Inc., a New York corporation and an indirect wholly-
owned subsidiary of the Company.
"Sofco Adjustment Amount" means the amount (whether positive or negative)
by which the aggregate amount of cash dividends and distributions paid by, or,
to the extent that they are forgiven on or prior to the Effective Time,
intercompany advances or loans made by, Sofco to the Company or to the Company's
other Subsidiaries from the first day of the fiscal quarter beginning on May 2,
1999 until the Effective Time (including repayments or reductions in
intercompany indebtedness owed by Sofco) exceeds the aggregate amount of capital
contributions and intercompany advances and loans made by the Company or its
other Subsidiaries to Sofco (and other payments made by the Company or its other
Subsidiaries on behalf of or for the benefit of Sofco) during such period.
"Sofco Disposition" means the consummation of the sale of U.S. Food Service
stock received under the Stock Purchase Agreement dated as of May 27, 1999
between U.S. Food Service and CEX Holdings, Inc.
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"Sofco Final Adjustment" mean the the amount (whether positive or negative)
by which the Sofco Proceeds exceeds $57,286,730.
"Sofco Proceeds" means the sum of (a) the aggregate Proceeds from the Sofco
Disposition and (b) the Sofco Adjustment Amount.
"Spinoff Securities" has the meaning set forth in Section 5.4(a).
"Subsidiary" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to elect a majority of the directors.
"Superior Proposal" means any bona fide Acquisition Proposal for or in
respect of all of the outstanding Company Common Shares, Company Stock Options
and Warrants on terms that the Board of Directors of the Company determines in
its good faith reasonable judgment (after consultation with a financial advisor
of nationally recognized reputation and outside legal counsel of nationally
recognized reputation, taking into account all the terms and conditions of the
Acquisition Proposal, including any break-up fees, expense reimbursement
provisions, financing commitments and conditions to consummation) are more
favorable to the Company's stockholders than the transactions contemplated by
this Agreement.
"Surviving Corporation" has the meaning set forth in Section 2.1 below.
"S-4 Registration Statement" has the meaning set forth in Section 5.7(b).
"Tax Returns" has the meaning set forth in Section 3.10(a).
"Taxes" has the meaning set forth in Section 3.10(a).
"Total Number of Company Common Shares Outstanding" means 104,889,575
shares plus (i) any additional Company Common Shares issued in accordance with
Section 5.11 after the date hereof and prior to the Effective Time and (ii) the
number of Company Common Shares issuable upon exercise of Company Stock Options
and Warrants outstanding immediately prior to the Effective Time that have a per
share exercise price less than the cash portion of the Merger Consideration.
"Transition Services Agreement" has the meaning set forth in Section
5.4(c)(iv).
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"WARN" means the Worker Adjustment and Retraining Notification Act, 29
U.S.C. Section 2101 et seq., and the rules and regulations promulgated
thereunder.
"Warrants" means (a) the outstanding warrants to purchase 562,500 Company
Common Shares at an exercise price of $4.89 per share that expire on January 31,
2002, (b) the outstanding warrants to purchase 19,500 Company Common Shares at
an exercise price of $9.44 per share that expire on February 28, 2005 and (c)
the outstanding warrants to purchase 49,839 Company Common Shares at an exercise
price of $.01 that expire on July 15, 2002.
ARTICLE II.
MERGER TRANSACTIONS.
Section 2.1. The Merger.
On and subject to the terms and conditions of this Agreement, the Merger
Subsidiary will merge with and into the Company (the "Merger") at the Effective
Time. The Company shall be the corporation surviving the Merger (the "Surviving
Corporation") and the separate corporate existence of the Merger Subsidiary
shall cease.
Section 2.2. The Closing.
The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at a location to be determined in New York, New
York, commencing at 9:00 a.m. local time on the second business day following
the satisfaction or waiver of all conditions to the obligations of the Parties
to consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective Parties will take at the Closing itself) or
such other date as the Parties may mutually determine (the "Closing Date").
Section 2.3. Actions at the Closing.
At the Closing, (i) the Company will deliver to the Buyer and the Merger
Subsidiary the various certificates, instruments, and documents referred to in
Section 6.1 below, (ii) the Buyer and the Merger Subsidiary will deliver to the
Company the various certificates, instruments, and documents referred to in
Section 6.2 below, (iii) the Company and the Merger Subsidiary will file with
13
the Secretary of State of the State of Colorado Articles of Merger in form
satisfactory to the Parties (the "Articles of Merger"), and (iv) the Buyer will
cause the Surviving Corporation to deliver the Payment Fund to the Paying Agent
in the manner provided below in this Article II.
Section 2.4. Effect of Merger.
(a) General. The Merger shall become effective at the time (the "Effective
Time") the Company and the Merger Subsidiary file the Articles of Merger with
the Secretary of State of the State of Colorado. The Merger shall have the
effect set forth in the Colorado Business Corporation Act. The Surviving
Corporation may, at any time after the Effective Time, take any action
(including executing and delivering any document) in the name and on behalf of
either the Company or the Merger Subsidiary in order to carry out and effectuate
the transactions contemplated by this Agreement.
(b) Articles of Incorporation. The Articles of Incorporation of the
Surviving Corporation shall be amended and restated at and as of the Effective
Time to read as did the Articles of Incorporation of the Merger Subsidiary
immediately prior to the Effective Time (except that the name of the Surviving
Corporation will remain unchanged).
(c) Bylaws. The Bylaws of the Surviving Corporation shall be amended and
restated at and as of the Effective Time to read as did the Bylaws of the Merger
Subsidiary immediately prior to the Effective Time (except that the name of the
Surviving Corporation will remain unchanged).
(d) Directors and Officers. The directors of the Merger Subsidiary and the
officers of the Company at the Effective Time shall, from and after the
Effective Time, be the directors and officers, respectively, of the Surviving
Corporation until their successors shall have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the articles of incorporation and the by-laws of the Surviving Corporation.
(e) Conversion of Company Common Shares. At and as of the Effective Time,
each Company Common Share issued and outstanding immediately prior to the
Effective Time (other than any Dissenting Shares) shall by virtue of the Merger
and without any action on the part of the holder thereof, be converted into the
right to receive:
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(i) the sum in cash of $9.70 (or $9.20 if the Company elects,
or if the Buyer causes the Company to elect, the Delivery Systems Spinoff
pursuant to Section 5.4) and the Per Share Adjustment Amount (whether
positive or negative); and
(ii) if the Company elects (or if the Buyer causes the Company
to elect) the Delivery Systems Spinoff pursuant to Section 5.4, a number of
Spinoff Securities equal to the total number of Spinoff Securities to be
distributed in the Delivery Systems Spinoff divided by the Total Number of
Company Common Shares Outstanding (the cash consideration payable pursuant
to subsection (i) and the Spinoff Securities issuable pursuant to
subsection (ii) collectively referred to as the "Merger Consideration").
(f) Certain Adjustments. If, subject to Section 5.11, between the date of
this Agreement and the Effective Time, the outstanding Company Common Shares are
changed into a different number of shares or a different class by reason of any
reclassification, recapitalization, split-up, combination, exchange of shares or
readjustment, or a stock dividend thereon shall be declared with a record date
prior to the Effective Time, the Merger Consideration shall be correspondingly
adjusted. No Company Common Share shall be deemed to be outstanding or to have
any rights other than those set forth above in Section 2.4(e) and this Section
2.4(f) after the Effective Time. At and as of the Effective Time, each
Dissenting Share shall be converted into the right to receive payment from the
Surviving Corporation with respect thereto in accordance with the provisions of
the Colorado Business Corporation Act.
(g) Conversion of Capital Stock of the Merger Subsidiary. At and as of the
Effective Time, each share of Common Stock, $.01 par value per share, of the
Merger Subsidiary issued and outstanding immediately prior to the Effective Time
shall be converted into and represent the right to receive one share of Common
Stock, $.01 par value per share, of the Surviving Corporation.
(h) Treatment of Company Stock Options and Warrants. The Company Stock
Options and the Warrants will receive the treatment set forth in Section 5.17.
Section 2.5. Procedure for Payment.
15
(a) Immediately after the Effective Time, (A) the Buyer will cause the
Surviving Corporation to furnish to a bank or trust company selected by the
Buyer and approved prior to the Effective Time by the Company, which approval
shall not be withheld unreasonably (the "Paying Agent"), a fund (the "Payment
Fund") consisting of cash and, if applicable, Spinoff Securities, sufficient in
the aggregate for the Paying Agent to make full payment of the Merger
Consideration, (B) the Buyer will cause the Paying Agent to mail a letter of
transmittal (with instructions for its use) to each record holder of outstanding
Company Common Shares for the holder to use in surrendering the certificates
which represented his or its Company Common Shares against payment of the Merger
Consideration and (C) the Buyer shall cause the Paying Agent to pay and issue
the Merger Consideration to the holders of outstanding Company Common Shares
entitled thereto. No interest will accrue or be paid to the holder of any
outstanding Company Common Shares.
(b) The Buyer may cause the Paying Agent to invest the cash included in
the Payment Fund in Permitted Cash Investments. The Buyer may cause the Paying
Agent to pay over to the Surviving Corporation any net earnings with respect to
the investments, and the Buyer will cause the Surviving Corporation to replace
promptly any portion of the Payment Fund which the Paying Agent loses through
investments.
(c) The Buyer may cause the Paying Agent to pay over to the Surviving
Corporation any portion of the Payment Fund (including any earnings thereon)
remaining one year after the Effective Time, and thereafter all former
shareholders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat, and other similar laws) as general creditors
thereof with respect to the cash payable upon surrender of their certificates.
(d) The Buyer shall cause the Surviving Corporation to pay all charges and
expenses of the Paying Agent.
Section 2.6. Closing of Transfer Records.
After the close of business on the Closing Date, transfers of Company
Common Shares outstanding prior to the Effective Time shall not be made on the
stock transfer books of the Surviving Corporation.
Section 2.7. Withholding Rights.
16
The Buyer, the Merger Subsidiary, the Company, the Surviving Corporation
and the Paying Agent, as the case may be, shall be entitled to deduct and
withhold, or cause to be deducted and withheld, from the consideration otherwise
payable pursuant to this Agreement to any holder of Company Common Shares,
Company Stock Options, Warrants or 4 1/2% Convertible Notes due 2000 of the
Company such amounts as are required to be deducted and withheld with respect to
the making of such payment under the Code, or any provision of applicable state,
local or foreign Tax law. To the extent that amounts are so deducted and
withheld, such deducted and withheld amounts shall be treated for all purposes
of this Agreement as having been paid to such holders in respect of which such
deduction and withholding was made.
Section 2.8. Use of Corporate Express Name and Headquarters.
Following the Merger, the Company will operate its North American
operations for the foreseeable future using the Corporate Express name. In
addition, the Company will continue to operate its North American operations for
the foreseeable future out of the Company's headquarters in Broomfield,
Colorado.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Buyer and the Merger Subsidiary
that the statements contained in this Article III are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this Article III), except as set forth in
the disclosure schedule accompanying this Agreement (the "Company Disclosure
Schedule"). The representations and warranties contained in this Article III
apply only to the Company and its Subsidiaries other than the Delivery Systems
Companies and the Expedited Companies (and not including the agreements relating
to the sale thereof). The Company Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
this Article III.
Section 3.1. Organization, Qualification, and Corporate Power.
17
Each of the Company and its Subsidiaries is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation. Each of the Company and its Subsidiaries is duly qualified or
licensed to conduct business and is in good standing under the laws of each
jurisdiction in which the property owned, leased or operated by it or in which
the nature of the business conducted by it requires such qualification, except
where the lack of such qualification or license would not have a Material
Adverse Effect on the Company. Each of the Company and its Subsidiaries has
full corporate power and authority to carry on the businesses in which it is
engaged and to own and use the properties owned and used by it. The Company
has, prior to the date of this Agreement, delivered to the Buyer complete and
correct copies of the Articles of Incorporation and Bylaws of the Company.
Section 3.2. Capitalization.
The entire authorized capital stock of the Company consists of (i)
300,000,000 Company Common Shares, of which 104,889,575 Company Common Shares
are issued and outstanding and 39,635,681 Company Common Shares are held in
treasury as of the date hereof, (ii) 3,000,000 shares of non-voting common
stock, par value $.0002 per share, of which no shares are issued and
outstanding, and (iii) 25,000,000 shares of preferred stock, par value $.0001
per share, of which no shares are issued and outstanding. Except for (v) rights
to purchase Company Common Shares under the Company Stock Purchase Plan, (w) the
rights (the "Company Rights") issued pursuant to the Rights Agreement dated as
of January 29, 1998 between the Company and ChaseMellon Shareholder Services,
L.L.C. (the "Company Rights Agreement"), (x) the Company Stock Options, (y) the
Warrants and (z) the 4 1/2% Convertible Notes due 2000 of the Company, there are
no outstanding or authorized options, warrants, calls, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts or
commitments that could require the Company to issue, sell, or otherwise cause to
become outstanding or to redeem or transfer any of its capital stock. Neither
the Company nor any of its Subsidiaries has authorized or issued and outstanding
any bonds, debentures, notes or other indebtedness the holders of which have the
right to vote (or to convert or exchange such bonds, debentures, notes or other
indebtedness into securities the holders of which have the right to vote) with
the shareholders of such Person on any matter, other than the Company Common
Shares which may be issued upon conversion of the 4 1/2% Convertible Notes due
2000 of the Company. All issued and outstanding
18
Company Common Shares have been duly authorized and are validly issued and fully
paid and nonassessable and are not subject to preemptive rights.
Section 3.3. Authorization of Transaction.
The Company has full corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby; provided, however, that the Company cannot
consummate the Merger unless and until it receives the Company Shareholder
Approval. The execution, delivery and performance of this Agreement by the
Company, and the consummation by it of the transactions contemplated hereby,
have been duly authorized and approved by the Company's Board of Directors, and,
except for the Company Shareholder Approval, no other corporate action on the
part of the Company is necessary to authorize the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Company and, assuming that this Agreement is a valid and
binding obligation of Buyer and Merger Subsidiary and is enforceable against
Buyer and Merger Subsidiary in accordance with its terms, is a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except to the extent that its enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditors' rights generally.
Section 3.4. Noncontravention.
Assuming (i) the filings required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act are made
and the waiting period thereunder has been terminated or has expired, (ii) the
applicable requirements of the NMS have been met, (iii) the prior notification
and reporting requirements of the European Community pursuant to Council
Regulation 4064/89, as amended (the "EU Competition Laws"), as well as any
antitrust filings/notifications which must or may be effected at the national
level in countries having jurisdiction are complied with or made and the waiting
period thereunder has been terminated or has expired and the necessary
approvals, if any, have been obtained, (iv) the requirements of the Securities
Act relating to the S-4 Registration Statement and the requirements of the
Exchange Act relating to the proxy statement required in connection with the
Company Special Meeting have been met, (v) the filing of the Articles of Merger
and other appropriate merger documents, if any, as required by the
19
Colorado Business Corporation Act, are made and (vi) the Company Shareholder
Approval has been obtained in accordance with the Colorado Business Corporation
Act, the execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby will not:
(A) violate or conflict with any provision of the Company's Articles of
Incorporation or Bylaws; (B) violate or conflict with any statute, ordinance,
rule, regulation, order or decree of any court or of any governmental or
regulatory body, agency or authority applicable to the Company or any of its
Subsidiaries or by which any of their respective properties or assets may be
bound; (C) require any filing by the Company or any of its Subsidiaries with, or
the obtaining by the Company or any of its Subsidiaries of any permit, consent
or approval of, or the giving of any notice by the Company or any of its
Subsidiaries to, any governmental or regulatory body, agency or authority; or
(D) result in a violation or breach of, conflict with or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation, payment or acceleration) under, or result in
the creation of any Security Interest upon any of the properties or assets of
the Company or any of its Subsidiaries under, or give rise to any obligation,
right of termination, cancellation, acceleration or increase of any obligation
or a loss of a material benefit under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, franchise, permit,
agreement, contract, lease, franchise agreement or other instrument or
obligation to which the Company or any of its Subsidiaries is a party, or by
which any such Person or any of its properties or assets are bound (other than
the actions taken with respect to the Company Stock Options and the Warrants
pursuant to Section 5.17), except in all such cases where the violation, breach,
default or failure to file would not reasonably be expected to have a Material
Adverse Effect on the Company or would not impair or materially delay the
ability of the Company to consummate the Merger and the other transactions
contemplated by this Agreement.
Section 3.5. Filings with the SEC.
The Company and its Subsidiaries have timely filed all forms, reports,
schedules, statements, registration statements and documents with the SEC
required to be filed by it pursuant to the federal securities laws and the SEC
rules and regulations thereunder, and all forms, reports, schedules, statements,
registration statements and other documents filed with the SEC by the Company
and its Subsidiaries have complied in all material respects with all applicable
requirements of the Securities Act or the Exchange Act, as the case
20
may be, and the SEC rules and regulations promulgated thereunder. The Company
has, prior to the date of this Agreement, made available to Buyer true and
complete copies of all forms, reports, schedules, statements, registration
statements and other filings filed by the Company and its Subsidiaries with the
SEC since January 1, 1997 (such forms, reports, schedules, statements,
registration statements and other filings, together with any exhibits, any
amendments thereto and information incorporated by reference therein, are
sometimes collectively referred to as the "Company SEC Reports"). As of their
respective dates or, if amended, as of the date of the last such amendment prior
to the date hereof the Company SEC Reports did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Section 3.6. Financial Statements.
Each of the consolidated balance sheets of the Company and its consolidated
Subsidiaries as of the end of the fiscal quarter ended May 1, 1999, as of the
end of the fiscal year ended January 30, 1999, as of the end of the eleven
months ended January 31, 1998 and as of the end of the fiscal year ended March
1, 1997 and the consolidated statements of operations, consolidated statements
of stockholders' equity and consolidated statements of cash flows of the Company
and its consolidated Subsidiaries for the fiscal quarter ended May 1, 1999, for
the fiscal year ended January 30, 1999, for the eleven months ended January 31,
1998 and for the fiscal year ended March 1, 1997 contained in the Company SEC
Reports were prepared in accordance with GAAP applied on a consistent basis
(except as may be indicated therein or in the notes or schedules thereto and
except that the interim financial statements lack footnotes and are subject to
year-end audit adjustments) and present fairly, in all material respects, the
consolidated financial position of the Company and its consolidated Subsidiaries
as of the dates thereof and the consolidated results of their operations and
changes in cash flows for the periods then ended.
Section 3.7. Compliance with Applicable Laws.
(a) Except as disclosed in the Company SEC Reports, since June 1, 1996,
the Company and its Subsidiaries have been in compliance with all Applicable
Laws, except for such noncompliance which, individually or in the aggregate,
would not be reasonably expected to have a Material Adverse Effect on the
Company.
21
(b) Each of the Company and its Subsidiaries has in effect all Permits
necessary for it to own, lease or operate its properties and assets and to carry
on its business as now conducted, other than such Permits the absence of which
would not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect on the Company, and there has occurred no default under
any such Permit other than such defaults which, individually or in the
aggregate, would not be reasonably expected to have a Material Adverse Effect on
the Company.
(c) Each of the Company and its Subsidiaries is, and has been, to the best
knowledge of the Company, each entity formerly owned by the Company's
Subsidiaries, while so owned, was in compliance in all respects with all
applicable Environmental Laws, except for such noncompliance which, individually
or in the aggregate, would not have a Material Adverse Effect on the Company.
(d) Except as could not reasonably be expected to have a Material Adverse
Effect on the Company, (i) Hazardous Materials have not been released or
disposed of by the Company or its Subsidiaries, or to the best knowledge of the
Company, by any other Person, on any property currently or formerly owned,
operated or leased by the Company and its Subsidiaries and no Hazardous
Materials released by the Company or its Subsidiaries or to the best knowledge
of the Company, by any other Person, have migrated to or have been transmitted
to any property adjoining or adjacent to any such property, (ii) the Company and
each of its Subsidiaries have obtained all Permits and are in substantial
compliance with all Environmental Laws and the requirements of any Permits and
all such Permits are in full force and effect, (iii) there are no past, pending
or threatened Environmental Claims against the Company or any of its
Subsidiaries or any of their properties or against any Person whose liability
for such Environmental Claim the Company or any of its Subsidiaries has retained
or assumed either contractually or by operation of law and (iv) there are no
facts or circumstances, conditions or occurrences regarding any of the
properties owned or leased by the Company or its Subsidiaries to cause such
properties to be subject to any restrictions on its ownership, occupancy, use or
transferability under any Environmental Law.
Section 3.8. Absence of Changes or Events
Except as disclosed in the Company SEC Reports and except for the Expedited
Dispositions, the Sofco Disposition, the sale of the forms business
22
described in the definition of Forms Sale Proceeds, the Delivery Services
Dispositions and the Delivery Services Spinoff and the other transactions
contemplated by this Agreement, (a) since January 30, 1999, there has not been
any change or occurrence which resulted in or is reasonably expected to have a
Material Adverse Effect on the Company, and (b) since January 30, 1999, the
Company and its Subsidiaries have conducted their businesses only in the
Ordinary Course of Business and there has not been (i) any declaration, setting
aside or payment of any dividend or other distribution with respect to the
capital stock of the Company, (ii) any split, combination or reclassification of
any of the capital stock of the Company or any issuance or the authorization of
any issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock of the Company, (iii) any damage,
destruction or loss that has had or could be reasonably expected to have a
Material Adverse Effect on the Company, or (iv) any change in accounting
methods, principles or practices by the Company materially affecting its assets,
liabilities or business, except insofar as may have been required by a change in
GAAP.
Section 3.9. Litigation.
Except as disclosed in the Company SEC Reports, there is no action, suit,
proceeding at law or in equity, or any arbitration or any administrative or
other proceeding by or before (or to the best knowledge of the Company any
investigation or review by) any governmental or other instrumentality or agency,
pending, or, to the best knowledge of the Company, threatened, against or
affecting the Company or any of its Subsidiaries, or any of their respective
properties or rights which would have a Material Adverse Effect on the Company.
Neither the Company nor any of its Subsidiaries is subject to any judgment,
order or decree entered in any lawsuit or proceeding which would have a Material
Adverse Effect on the Company.
Section 3.10. Taxes.
(a) Tax Returns. The Company and each of its Subsidiaries has timely filed
or caused to be timely filed with the appropriate taxing authorities (taking
into account extensions) all material federal and other returns, statements,
forms and reports for Taxes (as hereinafter defined) ("Tax Returns") that are
required to be filed by, or with respect to, the Company and such Subsidiaries
on or prior to the Closing Date. Such Tax Returns were correct and complete in
all material respects. "Taxes" shall mean all taxes, assessments, charges,
duties, fees, levies or other governmental charges including all Federal, state,
local, foreign and other income, franchise, profits, capital gains, capital
23
stock, transfer, sales, use, occupation, property, excise, stamp, license,
payroll, withholding and other taxes, assessments, charges, duties, fees, levies
or other governmental charges of any kind whatsoever (whether payable directly
or by withholding and whether or not requiring the filing of a Tax Return), all
estimated taxes, deficiency assessments, additions to tax, penalties and
interest and shall include any liability for such amounts as a result of being a
member of a combined, consolidated, unitary or affiliated group.
(b) Payment of Taxes. The Company and its Subsidiaries have timely and in
the manner prescribed by law paid all material Taxes that are currently due and
payable except for those contested in good faith and for which adequate reserves
have been made on the financial statements of the Company and its Subsidiaries
in accordance with GAAP.
(c) Other Tax Matters.
(i) The Company and each of its Subsidiaries have not been the
subject of an audit or other examination of Taxes by the tax authorities of any
nation, state or locality with respect to any taxable period for which the
statute of limitations has not expired, nor has the Company or any of its
Subsidiaries received any written notices with respect to such taxable periods
from any tax authority, relating to any issue which could materially affect the
Tax liability of the Company or any of its Subsidiaries that has not been
resolved or paid in full.
(ii) The Company has provided or made available to Buyer complete and
accurate copies of (A) all federal income Tax Returns, and any amendments
thereto, filed by the Company or any of its Subsidiaries covering all years
ending on or after February 28, 1995 and all state income or franchise Tax
Returns, and any amendments thereto, filed by the Company or any of its
Subsidiaries, covering all taxable years ending on or after January 31, 1998,
(B) all audit reports received from any taxing authority relating to any Tax
Return filed by the Company or any of its Subsidiaries, (C) any written and
legally binding agreement with a taxing authority relating to Taxes entered into
by the Company or any of its Subsidiaries that would have a continuing effect
after the Closing Date and (D) any written ruling of a taxing authority relating
to Taxes received by the Company or any of its Subsidiaries that would have a
continuing effect after the Closing Date.
24
(iii) All material Taxes which the Company or any of its Subsidiaries
is (or was) required by law to withhold or collect have been duly withheld or
collected, and have been timely paid over to the proper authorities to the
extent due and payable.
(iv) There are no tax sharing, allocation, indemnification or similar
agreements or arrangements in effect as between the Company, any Subsidiary, or
any predecessor or Affiliate of any of them and any other party under which
Buyer, or the Company (or any of its Subsidiaries) could be liable for any
material Taxes or other material claims of any party other than the Company or
any Subsidiary of the Company.
(v) Neither the Company nor any of its Subsidiaries has been required
to include in income any adjustment pursuant to Section 481 or any similar
provision of the Code or the corresponding tax laws of any nation, state or
locality by reason of a voluntary change in accounting method initiated by the
Company or any of its Subsidiaries, and the Internal Revenue Service or other
taxing authority has not initiated or proposed any such adjustment or change in
accounting method.
(vi) Neither the Company nor any of its Subsidiaries: (A) has
requested any extensions of time within which to file Tax Returns, which Tax
Returns have not since been filed, (B) has entered into an agreement or waiver
extending any statute of limitations relating to the payment or collection of
Taxes of the Company or any of its Subsidiaries which statute of limitations has
not expired or (C) is contesting the Tax liability of the Company or any of its
Subsidiaries before any court, tribunal or agency.
(vii) No election under 341(f) of the Code has been made or shall be
made prior to the Closing Date to treat the Company as a consenting corporation
as defined in Section 341 of the Code.
(viii) No amount payable under any Employee Benefit Plan or other
agreement, contract, or arrangement will fail to be deductible for Federal
income tax purposes by virtue of Section 280G or Section 162(m) of the Code or
will fail to be deductible under the Applicable Laws of any non-U.S.
jurisdiction.
(ix) To the best knowledge of the Company, no foreign person owns or
has owned beneficially more than five percent of the total fair market value of
Company Common Stock during the applicable period
25
specified in Section 897(c)(1)(A)(ii) of the Code. To the best knowledge of the
Company, no foreign person owns or has owned beneficially Company Stock Options,
Warrants or 4 1/2% Convertible Notes due 2000 of the Company having a fair
market value greater than five percent of the total fair market value of the
Company Common Shares measured at the time of such ownership.
Section 3.11. Employee Benefits.
(a) The Company has made available to the Buyer a true and complete list
as of the date of this Agreement of all Employee Benefit Plans currently
maintained by the Company or any of its Subsidiaries for the benefit of any
current or former employee, director, officer, consultant or agent of the
Company or any of its Subsidiaries or to which the Company or any of its
Subsidiaries contributes, has any obligation to contribute, has any liability or
is a party, except for Employee Benefit Plans with respect to employees outside
the United States. The Company has also made available to Buyer true and
complete copies of (i) all employment agreements providing for annual base
compensation in excess of $125,000, (ii) all agreements or arrangements,
payments under which may fail to be deductible for Federal income tax purposes
by virtue of Section 280G or Section 162(m) of the Code, and (iii) all other
agreements providing for bonus, incentive compensation, change in control,
retention or severance benefits to any current or former employee, officer,
director, consultant or agent that would be triggered or payable, in whole or in
part, by the transactions under this Agreement and that would materially exceed
the benefits under the Corporate Express Severance Policy, dated December 1,
1998 (assuming that the recipient of such payment would receive a payment under
the Corporate Express Severance Policy), except in the case of each of (i), (ii)
and (iii), individual employment agreements with employees who are employed
outside of the United States.
(b) Each Employee Benefit Plan intended to be "qualified" (within the
meaning of Section 401(a) of the Code) has received a favorable determination
letter from the Internal Revenue Service and, to the best knowledge of the
Company and its Subsidiaries, no event has occurred and no condition exists that
could reasonably be expected to result in the revocation of any such
determination.
(c) All material contributions and other payments required to be made by
the Company or any of its Subsidiaries to any Employee Benefit Plan
26
(or to any person pursuant to the terms thereof) have been made or the amount of
such payment or contribution obligation has been reflected in the financial
statements contained in the Company SEC Reports.
(d) Each Employee Benefit Plan is in compliance with all Applicable Laws
(including ERISA and the Code) and all applicable collective bargaining or labor
agreements and has been administered and operated in accordance with its terms,
except where the failure to comply would not result in a Material Adverse Effect
on the Company.
(e) None of the Company, any of its Subsidiaries, or any ERISA Affiliate
has incurred any liability to an Employee Benefit Plan under Title IV of ERISA
(other than for contributions not yet due) or to the Pension Benefit Guaranty
Corporation (other than for payment of premiums not yet due) that, when
aggregated with other such liabilities, would result in a material liability of
the Company or any of its Subsidiaries that has not been fully paid.
(f) None of the Company, any of its Subsidiaries nor any ERISA Affiliate
(i) has incurred any unsatisfied withdrawal liability under Part 1 of Subtitle E
of Title IV of ERISA to any "Multiemployer Plan" (as defined in Section
4001(a)(3) of ERISA); or (ii) would be subject to any withdrawal liability if,
as of the close of the most recent fiscal year of any such plan ended prior to
the date hereof the Company, any of its Subsidiaries or any ERISA Affiliate were
to engage in a complete withdrawal (as defined in Section 4203 of ERISA) or
partial withdrawal (as defined in Section 4205 of ERISA) from any such plan,
except where such liability would not, or would not reasonably be expected to,
result in a Material Adverse Effect on the Company.
(g) Except as specifically set forth in this Agreement, no employee,
director, officer, consultant or agent of the Company or any of its Subsidiaries
shall be entitled to any additional benefit or any acceleration of the time of
payment or vesting of any benefit under any Employee Benefit Plan as a result of
the consummation of the transactions contemplated by this Agreement.
(h) With respect to any Employee Benefit Plan maintained outside the
United States for the purpose of providing or otherwise making available
retirement benefits to employees of the Company or any of its Subsidiaries
(collectively, the "Non-U.S Plans"), each of the following is true:
(A) each Non-U.S. Plan is in compliance in all material respects with
the laws and regulations applicable to such plan except
27
where the failure to comply would not result in a Material Adverse Effect on the
Company;
(B) each Non-U.S Plan and related funding arrangement that is intended
to qualify for tax-favored status has been reviewed and approved for such status
by the appropriate government authority (or has been submitted for such review
and approval within the applicable time period), and nothing has occurred and no
condition exists that is likely to cause the loss or denial of such tax-favored
status; and
(C) as of the most recent valuation date, there are no material
unfunded benefit liabilities.
Section 3.12. Brokers' Fees.
None of the Company and its Subsidiaries has any liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
Section 3.13. Disclosure.
The Definitive Proxy Materials will comply with the Exchange Act in all
material respects. The Definitive Proxy Materials will not, as of the date they
are mailed to shareholders and as of the date of the Company Special Meeting,
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 will be made, not misleading; provided, however,
that the Company makes no representation or warranty with respect to any
information that the Buyer and the Merger Subsidiary will supply specifically
for use in the Definitive Proxy Materials. If the Company elects (or if Buyer
causes the Company to elect) a Delivery Systems Spinoff, the S-4 Registration
Statement (that will include the Definitive Proxy Materials) will comply with
the Securities Act in all material respects. The S-4 Registration Statement 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 will be made, not misleading.
None of the information that the Company will supply specifically for use
in any offering memorandum used by Buyer will, as of the time such offering
memoranda are mailed to investors and as of the Closing Date, contain
28
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 will be made, not misleading.
Section 3.14. Employee Relations.
Except as would not have or be reasonably expected to have a Material
Adverse Effect on the Company:
(a) each of the Company and its Subsidiaries is in compliance with all
federal, foreign, state or other Applicable Laws respecting employment and
employment practices, terms and conditions of employment and wages and hours and
has not and is not engaged in any unfair labor practice;
(b) no unfair labor practice charge or complaint against the Company or
any of its Subsidiaries is pending before the National Labor Relations Board or
an equivalent tribunal under applicable foreign law;
(c) there is no labor strike, slowdown, stoppage or dispute pending or, to
the best knowledge of the Company or any of its Subsidiaries, threatened against
or involving the Company or any of its Subsidiaries; and
(d) there is no proceeding, claim, suit, action or governmental
investigation pending or, to the best knowledge of the Company or any of its
Subsidiaries, threatened, against the Company or any of its Subsidiaries with
respect to any of the foregoing.
Section 3.15. Intellectual Property.
(a) The Company owns or is licensed to use, the rights to all patents,
trademarks, trade names, service marks, copyrights together with any
registrations and applications therefor, internet domain names, net lists,
schematics, technology, trade secrets, source codes, know-how, computer software
programs or applications including all object and source codes and tangible or
intangible proprietary information or material used in and material to the
business of the Company and any of its Subsidiaries as currently conducted (the
"Company Intellectual Property"), except where the failure to so own or license
would not have a Material Adverse Effect on the Company. Neither the Company
nor any of its Subsidiaries is, or as a result of the execution, delivery or
performance of the Company's obligations hereunder
29
will be, in violation of or lose any rights pursuant to, any license or
agreement, except as would not have a Material Adverse Effect on the Company.
(b) No claims with respect to the Company Intellectual Property are
pending or, to the best knowledge of the Company, threatened by any Person (i)
that the manufacture, sale or use of any product or process as now used or
offered for use or sale by the Company or any of its Subsidiaries infringes on
any copyright, trade secret, patent or other intellectual property right of any
Person, or (ii) challenging the ownership, validity, enforceability or
effectiveness of any of the Company Intellectual Property owned by the Company
or any of its Subsidiaries. To the best knowledge of the Company, all issued
patents, all registered trademarks and service marks and all copyrights owned by
the Company or any of its Subsidiaries are valid, enforceable and subsisting.
To the best knowledge of the Company, there has not been and there is not any
material unauthorized use, infringement or misappropriation of any of the
Company Intellectual Property by any third Person, including any employee or
former employee.
(c) No Company Intellectual Property owned by the Company is subject to
any outstanding order, judgment, decree, stipulation or agreement restricting in
any material manner the licensing thereof by the Company or any of its
Subsidiaries.
Section 3.16. No Undisclosed Material Liabilities.
There are no liabilities of the Company or any Subsidiary of the Company
of any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, other than: (a) liabilities disclosed or provided for
in Company SEC Reports, including the notes to the financial statements included
therein; (b) liabilities which in the aggregate would not have a Material
Adverse Effect on the Company; and (c) liabilities under this Agreement.
Section 3.17. Customers and Suppliers.
To the best knowledge of the Company, the Company has not received a
notice of default, cancellation, termination or material reduction (or written
threat of default, cancellation, termination or material reduction) of its
contractual relationship with any of its customers, suppliers, distributors or
sales representatives, the loss or reduction of such contractual relationship,
when aggregated with all contracts and relationships that the Company has
30
entered into as replacements or substitutes therefor, would result in a Material
Adverse Effect on the Company.
Section 3.18. State Takeover Statutes.
No takeover statute or similar statute or regulation of any state of the
United States of America is applicable to the Merger or this Agreement.
Section 3.19. Voting Requirements.
Under the Colorado Business Corporation Act, the affirmative vote of
holders of two-thirds of the outstanding Company Common Shares is required to
approve the Merger.
Section 3.20. Year 2000 Compliance.
To the Company's knowledge, all hardware, software, databases and systems
(including, without limitation, embedded control systems, management information
systems and microprocessor controlled, robotic or other device systems) used in
or necessary to the operation of the business of the Company and its
Subsidiaries are, or as a result of ongoing remediation efforts will be, prior
to October 31, 1999, able to process records containing dates after January 1,
2000 and able without error or malfunction to operate and process data through
and following January 1, 2000, except to the extent that any such errors or
malfunctions will not result in a Material Adverse Effect on the Company.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE MERGER SUBSIDIARY
Each of the Buyer and the Merger Subsidiary represents and warrants to the
Company that the statements contained in this Article IV are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Article IV), except
as set forth in the disclosure schedule accompanying this Agreement (the "Buyer
Disclosure Schedule"). The Buyer Disclosure Schedule will be arranged in
31
paragraphs corresponding to the numbered and lettered paragraphs contained in
this Article IV.
Section 4.1. Organization.
Each of the Buyer and the Merger Subsidiary is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
Section 4.2. Financing.
The Buyer presently has, and as of the Closing Date will have, cash
resources or binding written commitments from responsible financial institutions
(the "Financing Commitments") or a combination thereof adequate to allow the
Buyer and the Merger Subsidiary to consummate the Merger and the transactions
contemplated hereby on a timely basis and fund the working capital needs of the
Surviving Corporation and its Subsidiaries after the Closing. The Buyer has
provided true and correct copies of the Financing Commitments to the Company.
None of the Financing Commitments has been withdrawn and the Buyer and Merger
Subsidiary do not know of any facts or circumstances existing on the date hereof
that would result in any of the conditions contained in the Financing
Commitments not being satisfied.
Section 4.3. Authorization of Transaction.
Each of the Buyer and the Merger Subsidiary has full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated hereby; provided,
however, that the Buyer and the Merger Subsidiary cannot consummate the Merger
unless and until it receives the Buyer Shareholder Approval and the Central
Works Council Approval. The execution, delivery and performance of this
Agreement by the Buyer and the Merger Subsidiary, and the consummation by each
of them of the transactions contemplated hereby, have been duly authorized and
approved by the Supervisory and Executive Boards of the Buyer and the Board of
Directors of the Merger Subsidiary, and, except for the Buyer Shareholder
Approval and the Central Works Council Approval, no other corporate action on
the part of the Buyer or the Merger Subsidiary is necessary to authorize the
execution, delivery and performance of this Agreement by the Buyer or the Merger
Subsidiary and the consummation of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Buyer and the Merger
Subsidiary and,
32
assuming that this Agreement is a valid and binding obligation of the Company
and is enforceable against the Company in accordance with its terms, is a valid
and binding obligation of the Buyer and the Merger Subsidiary enforceable
against each of them in accordance with its terms, except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally.
Section 4.4. Noncontravention.
Assuming (i) the filings required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act are made
and the waiting period thereunder has been terminated or has expired, (ii) the
prior notification and reporting requirements of the EU Competition Laws as well
as any antitrust filings/notifications which must or may be effected at the
national level in countries having jurisdiction are complied with or made and
the waiting period thereunder has been terminated or has expired and the
necessary approvals, if any, have been obtained, (iii) the Central Works Council
Approval has been obtained, (iv) the filing of the Articles of Merger and other
appropriate merger documents, if any, as required by the Colorado Business
Corporation Act, are made and (v) the Buyer Shareholder Approval has been
obtained, the execution and delivery of this Agreement by the Buyer and the
Merger Subsidiary and the consummation by the Buyer and the Merger Subsidiary of
the transactions contemplated hereby will not: (A) violate any provision of the
corporate charter or the bylaws or other organizational documents of the Buyer
and the Merger Subsidiary ; (B) violate any statute, ordinance, rule,
regulation, order or decree of any court or of any governmental or regulatory
body, agency or authority applicable to the Buyer or the Merger Subsidiary or
any of the Buyer's Subsidiaries or by which any of their respective properties
or assets may be bound; (C) require any filing by the Buyer or any of its
Subsidiaries with, or the obtaining by the Buyer or any of its Subsidiaries of
any permit, consent or approval of, or the giving of any notice by the Buyer or
any of its Subsidiaries to, any governmental or regulatory body, agency or
authority; or (D) result in a violation or breach of any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, contract, lease, franchise agreement or other
instrument or obligation to which the Buyer or any of its Subsidiaries is a
party, or by which any such Person or any of its properties or assets are bound,
except in all such cases where the violation, breach, default or failure to file
would not impair or materially delay the ability of the Buyer and the Merger
Subsidiary to consummate the transactions under this Agreement.
33
Section 4.5. Litigation.
There is no action, suit, investigation or proceeding pending against, or
to the knowledge of the Buyer threatened against or affecting, Buyer, Merger
Subsidiary or any of Buyer's Subsidiaries or any of their respective properties
before any court or arbitrator or any governmental body, agency or official
which would reasonably be expected to impair or materially delay the ability of
the Buyer and the Merger Subsidiary to consummate the transactions under this
Agreement.
Section 4.6. Disclosure.
None of the information that the Buyer and the Merger Subsidiary will
supply specifically for use in the Definitive Proxy Materials will, as of the
time the Definitive Proxy Materials are mailed to shareholders and as of the
date of the Company Special Meeting, 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 will be made,
not misleading. If at any time prior to the Company Special Meeting, any event
shall occur that shall render the information previously supplied by the Buyer
and the Merger Subsidiary to the Company inaccurate in any material respect, the
Buyer and the Merger Subsidiary shall immediately notify the Company of such
event and shall assist the Company in preparing any amendment or supplement to
the Definitive Proxy Material that may be necessary to correct such inaccuracy.
Any proxy or other disclosure document mailed to shareholders of the Buyer
in connection with obtaining the Buyer Shareholder Approval will comply in all
material respects with the requirements of Dutch law and the Amsterdam Stock
Exchange; provided, however, that the Buyer and the Merger Subsidiary make no
representation or warranty with respect to any information that the Company will
supply specifically for use in such proxy or other disclosure document.
Any offering memorandum or other disclosure document used in connection
with the financing by Buyer of the transactions contemplated by this Agreement
will not, as of their respective dates and as of the effective dates of the
closing of the financing, 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 will be made, not
34
misleading; provided, however, that the Buyer and the Merger Subsidiary makes no
representation or warranty with respect to any information that the Company will
supply specifically for use in such offering memorandum.
Section 4.7. No Prior Activities of Merger Subsidiary.
The Merger Subsidiary has not incurred, directly or indirectly, any
liabilities or obligations, except those incurred in connection with its
incorporation and organization or with the negotiation of this Agreement and the
transactions contemplated hereby. The Merger Subsidiary has not engaged,
directly or indirectly, in any business or activity of any type or kind, or
entered into any agreement or arrangement with any person or entity, or is
subject to or bound by any obligation or undertaking, that is not contemplated
by or in connection with this Agreement and the transactions contemplated
hereby.
Section 4.8. Surviving Corporation After Merger.
At the Effective Time and after giving effect to any changes in the
Surviving Corporation's assets and liabilities as a result of the Merger and
after giving effect to the financing for the Merger and the use of proceeds
therefrom, the Surviving Corporation will not (a) be insolvent (either because
its financial condition is such that the sum of its debts is greater than the
fair market value of its assets or because the present saleable value of its
assets will be less than the amount required to pay its debts as they become
due), (b) have unreasonably small capital with which to engage in its business
or (c) have incurred or plan to incur debts beyond its ability to pay as they
become absolute and matured.
ARTICLE V.
ADDITIONAL AGREEMENTS
The Parties agree as follows with respect to the period from and after the
execution of this Agreement.
Section 5.1. General.
Each of the Parties will use its reasonable best efforts to take all
action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Article VI below). The Company will cooperate and assist in the financings
35
contemplated by the Financing Commitments (and any replacements or refinancings
thereof), including by assisting in due diligence and preparation of
documentation, providing necessary financial statements and causing its auditors
to cooperate in the preparation of financial statements and comfort letters,
with adequate notice, having appropriate senior officers available for road
shows and executing required documentation and in any tender offer and/or
consent solicitation in connection with the Company's existing debt securities,
including by entering into customary dealer manager agreements and executing
appropriate supplemental indentures.
Section 5.2. Sale of Negotiable Securities.
The Company will use its reasonable best efforts to consummate the sale of
the 555,000 shares of a public company previously identified to Buyer (the
"Negotiable Securities") on or prior to the Effective Date on terms and
conditions that the Company believes are reasonable. The Company will, on a
timely basis, provide Buyer with all agreements and other documents relating to
the sale of the Negotiable Securities. The Company will utilize all of the net
proceeds to repay indebtedness under the Company's existing credit facility.
Section 5.3. Dispositions.
The Company has applied or will apply the Sofco Proceeds and the Forms Sale
Proceeds to repay indebtedness under the Company's existing credit facility. The
Company will use its reasonable best efforts to consummate the Delivery Systems
Dispositions and the Expedited Dispositions before the Effective Time. The
Company will promptly provide Buyer with all agreements and other documents
relating to the Delivery Systems Dispositions and the Expedited Dispositions
(including all drafts thereof). The Delivery Systems Disposition and Expedited
Dispositions will comply with the following limitations unless the Buyer
consents to any variation therefrom:
(a) Without the consent of the Buyer, the Company will not sell the rights
to the name "Corporate Express" or any variation thereof in connection with the
Delivery Systems Dispositions or the Expedited Dispositions; provided, however,
that in connection with such dispositions, the Company may license the use by
the purchaser of such businesses of the Corporate Express name for a transition
period not to exceed 12 months without the further consent of the Company; and
provided further, that the purchaser of such assets will not be required to
remove the name Corporate Express that is
36
permanently affixed to motor vehicles or buildings for a period of 36 months
following such disposition;
(b) To the extent that any of the Delivery Systems Companies or Expedited
Dispositions are dependent on the Company or any of its Subsidiaries for any
services provided in the ordinary course of business which are not readily
obtainable from third parties, the disposition agreements may provide for a
continuation of such services for a reasonable period of time with the Company
to be compensated for continuing to provide such services on the basis of its
costs plus a commercially reasonable fee or percentage of costs;
(c) All liabilities and obligations of the Delivery Systems Companies or
the Expedited Companies to which the Company or any of its Subsidiaries will be
subject, including all guaranties extended by the Company or any of its
Subsidiaries to third parties on behalf of the Delivery Systems Companies and
the Expedited Companies, all indemnification obligations and liability in
respect of breaches of representations and warranties made in connection with
such sale (in each case valued at the Company's reasonable estimate of the net
cost to the Company) and unresolved claims under pending litigation (valued at
reasonable estimated settlement value), shall be subject to an aggregate maximum
amount of not more than $9.0 million (less any amounts used with respect to the
$9.0 million referred to in Section 5.4(c)(iv)); provided, however, that the
following liabilities and obligations shall be disregarded for purposes of this
subsection (iii) and may be retained by the Company or its Subsidiaries:
guarantees of any mortgage or other secured indebtedness except to the extent
that the fair market value of the property securing such mortgage or other
secured indebtedness is less than the amount of the mortgage or secured
indebtedness; and any indemnification obligations of the Company and its
Affiliates in respect of Taxes to the extent relating to contingent liabilities
of the Delivery Systems Companies or the Expedited Companies attributable solely
to any such companies being a member of the Company's consolidated group (for
the periods of such membership);
(d) All representations, warranties and indemnities given in connection
with such transactions shall expire within one year from the date of closing of
such sale;
(e) The Company will utilize all of the Proceeds to repay indebtedness
under the Company's existing credit facility;
37
(f) The sale of the Delivery Systems Companies must be structured as a
stock purchase wherein the buyer of the Delivery Systems Companies agrees to
make a Section 338(h)(10) election under the Code with respect to such
transaction; and
(g) In connection with the Delivery Systems Dispositions, either: (i) the
purchaser or purchasers of the Delivery Systems Companies will indemnify and
hold the Company harmless against all liabilities, losses, claims, damages,
costs and expenses arising out of or in connection with claims asserted against
the Company or any of its other Subsidiaries and relating to the Delivery
Systems Companies or their businesses or assets (collectively "Delivery Systems
Losses") to the extent that such Delivery Systems Losses exceed $9.0 million,
other than liabilities and obligations specifically referred to following the
proviso in Section 5.3(c), which shall not be subject to such limitation; or
(ii) the terms and conditions applicable to any sale of the Delivery Systems
Companies must be reasonably satisfactory to the Buyer in accordance with the
criteria set forth in this Section 5.3. The Buyer will use its reasonable best
efforts, if requested by the Company, to make a representative available to
review and respond promptly to the proposed terms of any such proposed
disposition and to review and consider any drafts of documents presented to it
by the Company.
Section 5.4. Delivery Systems Spinoff.
(a) If the Company is unable to consummate the Delivery Systems
Dispositions by October 31, 1999 on satisfactory terms and conditions, the
Company may elect (and after October 31, 1999, the Buyer may require the Company
to elect) to: (i) include the shares of Corporate Express Delivery Systems, Inc.
(or any other Delivery Systems Company that owns such remaining stock or assets)
in the Merger Consideration; (ii) contribute such remaining stock or assets of
the Delivery Systems Companies to an existing or newly-formed entity and include
the stock or other securities of such entity in the Merger Consideration; or
(iii) any combination of the foregoing (each such transaction, a "Delivery
Systems Spinoff" and the securities included in the Merger Consideration, the
"Spinoff Securities"). Notwithstanding the foregoing, and unless the Buyer
agrees otherwise, the Company will continue to use its best efforts after it has
elected (or Buyer has caused the Company to elect) to pursue the Delivery
Systems Spinoff to consummate the Delivery Systems Dispositions on satisfactory
terms and conditions.
38
(b) In order to prepare for a Delivery Systems Spinoff, the Company will,
commencing promptly after the date of this Agreement, take all reasonable
actions necessary to be able to complete a Delivery Systems Spinoff prior to
December 15, 1999, including: commencing preparation of the S-4 Registration
Statement relating to the securities of Delivery Systems as set forth in Section
5.7(b); engaging auditors in order to prepare as soon as reasonably possible the
required audited financial statements for the Delivery Systems Companies to be
included in the S-4 Registration Statement; and obtaining a revolving credit or
other credit facility that will enable the Delivery Systems Companies to operate
independently following the Delivery Systems Spinoff.
(c) The Delivery Systems Spinoff will comply with the following
limitations unless the Buyer consents to any variation therefrom:
(i) The S-4 Registration Statement of the Delivery Systems Companies
will comply with the Securities Act and all applicable rules and regulations
thereunder governing such registration statement;
(ii) The audited financial statements of the Delivery Systems
Companies included in the S-4 Registration Statement may not contain a going
concern qualification;
(iii) The Board of Directors of the Company must have received a
solvency opinion from an investment banking or appraisal firm of national
reputation relating to the Delivery Systems Companies after giving effect to the
Delivery Systems Spinoff;
(iv) The Company will, and will cause its Subsidiaries, as
applicable, to enter into a transition services agreement containing terms and
conditions (the "Transition Services Agreement") reasonably satisfactory to the
Buyer and as are reasonably required to effect the Delivery Systems Spinoff and
to govern the relationships between Company and the Delivery Systems Companies
following the Delivery Systems Spinoff; provided, however, that all liabilities
and obligations of the Delivery Systems Companies to which the Company or any of
its Subsidiaries will be subject under the Transition Services Agreement or
otherwise, including any guaranties extended by the Company or any of its
Subsidiaries to third parties on behalf of the Delivery Systems Companies, any
indemnification obligations (in each case valued at the Company's reasonable
estimate of the net cost to the Company) and unresolved claims under pending
litigation (valued at reasonable estimated settlement
39
value), shall be subject to an aggregate maximum amount of not more than $9.0
million (less any amounts used with respect to the $9.0 million referred to in
Section 5.3(c)); provided, however, that the following liabilities and
obligations shall be disregarded for purposes of this subsection (iv) and may be
retained by the Company and its Subsidiaries: guarantees of any mortgage or
other secured indebtedness except to the extent that the fair market value of
the property securing such mortgage or other secured indebtedness is less than
the amount of the mortgage or secured indebtedness; and any indemnification
obligations of the Company and its Affiliates in respect of Taxes to the extent
relating to contingent liabilities of the Delivery Systems Companies
attributable solely to any such companies being a member of the Company's
consolidated group (for the periods of such membership); and
(v) If the Company elects (or the Buyer causes the Company to elect)
the Delivery Systems Spinoff, the Transition Services Agreement will provide
that the Delivery Systems Companies will indemnify and hold the Company harmless
against all Delivery Systems Losses to the extent that such Delivery Systems
Losses exceed $9.0 million, other than liabilities and obligations specifically
referred to following the second proviso in Section 5.4(c)(iv), which shall not
be subject to such limitation.
Section 5.5. NASDAQ Listing.
If the Company elects (or if the Buyer causes the Company to elect) the
Delivery Systems Spinoff (and the Delivery Systems Dispositions have not
occurred) and the shares of Corporate Express Delivery Systems, Inc. (or such
other Delivery Systems Company or other entity whose securities are distributed
in the Delivery Systems Spinoff) are eligible for listing on the Nasdaq Stock
Market, the Company shall use its reasonable best efforts to cause such shares
to be approved for listing on the Nasdaq Stock Market (or another securities
exchange), subject to notice of official issuance, prior to the Effective Time.
Section 5.6. Notices and Consents.
The Company will give any notices (and will cause each of its Subsidiaries
to give any notices) to third parties, and will use its reasonable best efforts
to obtain (and will cause each of its Subsidiaries to use its reasonable best
efforts to obtain) any material third party consents that the Buyer reasonably
may request in connection with the matters referred to in Section 3.4 above.
40
Section 5.7. Regulatory Matters and Approvals.
Each of the Parties will (and the Company will cause each of its
Subsidiaries to) give any notices to, make any filings with, and use its
reasonable best efforts to obtain any material authorizations, consents, and
approvals of governments and governmental agencies in connection with the
matters referred to in Section 3.4 and Section 4.4 above. Without limiting the
generality of the foregoing:
(a) Proxy Materials. The Company will prepare and file with the SEC
preliminary proxy materials under the Exchange Act relating to the Company
Special Meeting. The filing Party in each instance will use its reasonable best
efforts to respond to the comments of the SEC thereon and will make any further
filings (including amendments and supplements) in connection therewith that may
be necessary, proper, or advisable. The Buyer will provide the Company, and the
Company will provide the Buyer, with whatever information and assistance in
connection with the foregoing filings that the filing Party reasonably may
request.
(b) Delivery Systems Spinoff. If the Company elects (or if the Buyer
causes the Company to elect) the Delivery Systems Spinoff (and the Delivery
Systems Dispositions have not occurred), the Company will, in connection with
and as part of the preliminary proxy materials described in subsection (a)
immediately above, prepare and file with the SEC a registration statement on
Form S-4 under the Securities Act relating to the equity securities of Corporate
Express Delivery Systems, Inc. (or any other Delivery Systems Company or other
entity that will serve as the entity owning the stock or assets that are part of
the Delivery Systems Spinoff (the "S-4 Registration Statement") in sufficient
time to have the S-4 Registration Statement declared effective prior to the
Effective Time. The Company will use its reasonable best efforts to respond to
any comments of the SEC on the S-4 Registration Statement and will make any
further filings (including amendments and supplements) in connection therewith
that may be necessary, proper, or advisable.
(c) Company Special Meeting. The Company will call a special meeting of
its shareholders (the "Company Special Meeting"), as soon as reasonably
practicable in order that the shareholders may consider and vote upon the
adoption of this Agreement and the approval of the Merger in accordance with the
Colorado Business Corporation Act. The Company will mail the Definitive Proxy
Materials to its shareholders as soon as reasonably
41
practicable and shall use its reasonable best efforts to solicit from its
shareholders proxies in favor of adoption of this Agreement and the transactions
contemplated hereby. Subject to Section 5.14(b), the Definitive Proxy Materials
will contain the affirmative recommendation of a majority of the members of the
board of directors of the Company in favor of the adoption of this Agreement and
the approval of the Merger.
(d) Buyer Special Meeting. The Buyer will call a special meeting of its
shareholders (the "Buyer Special Meeting"), to be held as soon as reasonably
practicable, but in no event later than August 15, 1999, in order that the
shareholders of Buyer may consider and vote upon the adoption of this Agreement
in accordance with the requirements of Dutch law and the Amsterdam Stock
Exchange (the "Buyer Shareholder Approval"). The Buyer will use its reasonable
best efforts to solicit from its shareholders proxies in favor of adoption of
this Agreement.
(e) Competition Filings. Each of the Parties will file (and the Company
will cause each of its Subsidiaries to file) any Notification and Report Forms
and related material that it may be required to file with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, and all similar notifications and applications
under the laws of all foreign governmental authorities, including under the EU
Competition Laws, that have jurisdiction over the transactions contemplated by
this Agreement, and will use its reasonable best efforts to obtain (and the
Company will cause each of its Subsidiaries to use its reasonable best efforts
to obtain) an early termination of the applicable waiting periods, and will make
(and the Company will cause each of its Subsidiaries to make) any further
filings pursuant thereto that may be necessary, proper, or advisable. The
Parties will use their reasonable best efforts to obtain approval of the
transactions contemplated by this Agreement under such laws, rules and
regulations. In particular, each of the Parties shall use its reasonable best
efforts to (y) avoid the entry of, or to have vacated or terminated, any decree,
order, or judgment that would restrain or delay the Closing including defending
through litigation a motion for preliminary injunction asserted in any court by
any third party and (z) avoid or eliminate any impediment under any antitrust,
competition, or trade regulation law that may be asserted by any Governmental
Authority with respect to the Merger or any other transaction contemplated
hereby so as to enable the Closing to occur as soon as reasonably possible,
including proposing, negotiating, committing to and effecting, by consent
decree, hold separate order, or otherwise, the sale, divestiture or
42
disposition of such assets or businesses of Buyer or any of its Subsidiaries and
the Company or any of its Subsidiaries, or otherwise take or commit to take any
actions that may be required in order to avoid the entry of, or to effect the
dissolution of any injunction, temporary restraining order, or other order in
any suit or proceeding which would otherwise have the effect of preventing or
delaying the Closing.
Section 5.8. Fairness Opinions.
On or before the date hereof, the Company will have received written or
oral opinions of ▇▇▇▇▇▇▇▇▇ Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation and of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated as to the fairness of the transactions under
this Agreement to the Company Shareholders from a financial point of view (the
"Fairness Opinions") and, if oral, to be promptly followed by delivery of
written opinions.
Section 5.9. Financing.
The Buyer and the Merger Subsidiary will use their reasonable best efforts
to enter into definitive agreements (the "Definitive Financing Agreements") as
soon as reasonably practicable on terms and conditions which will permit the
Buyer to consummate the transactions contemplated hereby. The Buyer will
furnish correct and complete copies of the Definitive Financing Agreements to
the Company. In the event any or all of the financing becomes unavailable for
any reason, the Buyer will use its reasonable best efforts to obtain replacement
financing which permits the Buyer to consummate the transactions contemplated
hereby.
Section 5.10. Rights Agreement.
The Company shall take all necessary action to cancel the Company Rights
or redeem the Company Rights with respect to the transactions contemplated by
this Agreement and to cause the Company Rights Agreement to be inapplicable to
such transactions.
Section 5.11. Operation of Business.
Except for the transactions contemplated by this Agreement (such as the
Expedited Dispositions, the Delivery Systems Dispositions and the Delivery
Systems Spinoff), the Company will not (and will not cause or permit any of its
Subsidiaries to) engage in any practice, take any action, or enter into any
43
transaction outside the Ordinary Course of Business. The Company will, and will
cause each of its Subsidiaries to, use their reasonable best efforts to preserve
intact their respective business organization, keep available the services of
their officers and employees and maintain satisfactory relationships with
licensors, suppliers, distributors, customers, lessors, creditors, joint venture
partners and others having significant business relationships with them. Without
limiting the generality of the foregoing, and except as specifically set forth
in this Agreement or specifically agreed to by Buyer:
(a) none of the Company and its Subsidiaries will authorize or effect any
change in its charter or bylaws;
(b) none of the Company and its Subsidiaries will issue or sell, or
authorize to issue or sell, any shares of its capital stock or any other
securities, or issue or sell, or authorize to issue or sell, any securities
convertible into, or options, warrants or rights to purchase or subscribe for,
or to enter into any arrangement or contract with respect to, or amend or modify
in a manner adverse to the interests of the Buyer and the Merger Subsidiary any
arrangement or contract with respect to, the issuance or sale of, shares of its
capital stock or other securities, except upon exercise of Warrants or the
Company Stock Options or upon the conversion of the 4 1/2% Convertible Notes due
2000 of the Company, except for up to 225,000 shares issued under the Company
Stock Purchase Plan and except for the issuance or grant of Company Stock
Options in the Ordinary Course of Business to purchase up to 100,000 Company
Common Shares at an exercise price no less than the fair market value of the
Company Common Shares on the date of the grant;
(c) none of the Company and its Subsidiaries will declare, set aside, or
pay any dividend or distribution with respect to its capital stock (whether in
cash or in kind), or redeem, repurchase or otherwise acquire any of its capital
stock, except for dividends, distributions, redemptions, repurchases or
acquisitions of capital stock payable to the Company or its Subsidiaries;
(d) none of the Company and its Subsidiaries will issue any note, bond, or
other debt security or create, incur, assume, or guarantee any indebtedness for
borrowed money or capitalized lease obligation or other material liability
outside the Ordinary Course of Business or modify any such indebtedness or
capitalized lease obligations or material liability in a manner materially
adverse to the Buyer or the Merger Subsidiary;
44
(e) none of the Company and its Subsidiaries will grant any Security
Interest upon any of its assets outside the Ordinary Course of Business;
(f) none of the Company and its Subsidiaries will make any capital
investment in, make any loan to, or acquire the securities or assets of, any
other Person, or merge or consolidate with any other Person, outside the
Ordinary Course of Business;
(g) none of the Company and its Subsidiaries will enter into any contracts
or commitments with respect to capital expenditures outside the Ordinary Course
of Business and in excess of amounts budgeted therefor in the Company's capital
expenditures budget for 1999;
(h) except for the award of Stay-Put Bonuses in accordance with Section
5.19 or in connection with the treatment of Company Stock Options as set forth
in this Agreement, none of the Company and its Subsidiaries will make any change
in employment terms or any Employee Benefit Plan for any of its directors,
officers, employees, consultants or agents, whether current or former, outside
the Ordinary Course of Business;
(i) none of the Company and its Subsidiaries will transfer, lease,
license, guarantee, sell, mortgage, pledge or dispose of any material assets,
except in the Ordinary Course of Business;
(j) none of the Company and its Subsidiaries will adopt or enter into a
plan of complete or partial liquidation, dissolution, recapitalization, merger,
consolidation or reorganization;
(k) none of the Company and its Subsidiaries will sell or pledge or agree
to sell or pledge any stock or other equity interest owned by it in another
Person except in the Ordinary Course of Business;
(l) none of the Company and its Subsidiaries will make or rescind any
material tax election or settle or compromise any material tax liability;
(m) none of the Company and its Subsidiaries will agree to the settlement
of any material claim or litigation except for settlements with respect to
claims or litigation involving the Delivery Systems Companies or the operation
of their business, settlements with respect to claims or litigation which have
been reserved for in the Company's financial statements for the
45
year ended January 30, 1999 and settlements which individually do not exceed
$500,000 and which in the aggregate do not exceed $2.5 million;
(n) within 90 days prior to the Effective Time, cause a "mass layoff" or
"plant closing" (as such terms are defined in WARN) requiring notice under WARN
or any equivalent state, local or foreign law without fully complying with the
requirements of WARN or such law; and
(o) none of the Company and its Subsidiaries will commit to any of the
foregoing.
The Company agrees to consult regularly with the Buyer on ongoing
operational issues with respect to the business of the Company and its
Subsidiaries. Each of the Parties agrees to designate an officer to serve as
its designated representative to facilitate these consultations. The officer
designated by Buyer shall use its reasonable efforts to respond to written
requests for waivers of the covenants under this Section 5.11 in no more than 48
hours from the time of receipt.
Section 5.12. Full Access; Confidentiality Agreement; Solicitation of
Employees.
(a) The Company will (and will cause each of its Subsidiaries to) permit
representatives of the Buyer and its lenders and underwriters and their
representatives to have full access (and, except for information that the
Company deems proprietary, be permitted to photocopy) during regular business
hours pursuant to mutually agreed upon notification procedures, and in a manner
so as not to interfere with the normal business operations of the Company and
its Subsidiaries, to all premises, properties, personnel, books, records
(including tax records), contracts, and documents of or pertaining to each of
the Company and its Subsidiaries.
(b) The Buyer, Merger Subsidiary and the Company will adhere to all of the
restrictions and obligations set forth in the confidentiality and standstill
agreement, dated March 11, 1999 (the "Confidentiality Agreement").
Section 5.13. Notice of Developments.
Each Party will give prompt written notice to the others of any development
causing a breach of any of its own representations and warranties in Article III
and Article IV above. No disclosure by any Party pursuant to this Section 5.13,
however, shall be deemed to amend or supplement the Company
46
Disclosure Schedule or the Buyer Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
Section 5.14. Exclusivity.
(a) The Company and its Subsidiaries will, and the Company will cause the
officers, directors, employees, investment bankers, attorneys, consultants and
other agents of the Company and its Subsidiaries to, immediately cease and cause
to be terminated all discussions and negotiations, if any, that have taken place
prior to the date hereof with any parties with respect to any Acquisition
Proposal.
(b) The Company and its Subsidiaries will not, and the Company will not
authorize or permit the officers, directors, employees, investment bankers,
attorneys, consultants and other agents of the Company and its Subsidiaries to,
directly or indirectly, take any action to solicit, initiate or encourage the
making of any Acquisition Proposal or any inquiry with respect thereto or engage
in substantive discussions or negotiations with any Person with respect thereto,
or disclose any non-public information relating to the Company or any Subsidiary
of the Company or afford access to the properties, books or records of the
Company or any Subsidiary of the Company to, any Person that has made, or to the
Company's knowledge, is considering making, any Acquisition Proposal; provided
that nothing contained in this Section 5.14 shall prevent the Company from
furnishing non-public information (that shall have been made available to Buyer)
to, or entering into substantive discussions or negotiations with, or affording
access to the properties, books or records of the Company or its Subsidiaries
to, any Person in connection with a bona fide Acquisition Proposal received from
such Person which has not been solicited, initiated or encouraged by the
Company, or any of its officers, directors, employees, investment bankers,
attorneys, consultants or other agents acting on its behalf, so long as prior to
furnishing such non-public information to, or entering into substantive
discussions or negotiations with, such Person: (i) the Board of Directors of the
Company determines in its good faith judgment that such Acquisition Proposal is
reasonably likely to constitute a Superior Proposal and that, as a result, it is
necessary to take such actions to comply with its fiduciary duty to shareholders
under applicable law, after receiving the advice of nationally recognized
outside legal counsel and (ii) the Company receives from such Person an executed
confidentiality agreement with terms no less favorable to the Company than those
contained in the Confidentiality Agreement.
47
(c) Nothing contained in this Agreement shall prevent the Board of
Directors of the Company from complying with Rule 14e-2 or Rule 14d-9 under the
Exchange Act with regard to an Acquisition Proposal; provided that the Board of
Directors of the Company shall not recommend that the shareholders of the
Company tender their shares in connection with a tender offer except to the
extent the Board of Directors of the Company determines upon advice from
nationally recognized outside legal counsel, that such a recommendation is
required to comply with the fiduciary duties of the Board of Directors of the
Company to shareholders under applicable law. Unless the Board of Directors of
the Company determines upon advice from nationally recognized outside legal
counsel, that it would constitute a violation of its fiduciary duty to
shareholders under applicable law to do so, the Company will (i) promptly (and
in no event later than 48 hours after receipt of any Acquisition Proposal)
notify Buyer after receipt of any Acquisition Proposal or any request for non-
public information relating to the Company or any Subsidiary of the Company or
for access to the properties, books or records of the Company or any Subsidiary
of the Company by any Person that has made, or to the Company's knowledge may be
considering making, an Acquisition Proposal, and shall provide the Buyer with a
description of the material terms of any Acquisition Proposal, and (ii) will
keep Buyer continually informed of the status and material terms of any such
Acquisition Proposal or request; provided that in no event shall the Company
accept an Acquisition Proposal which the Board of Directors shall have
determined is a Superior Proposal without having given the Buyer two full
business days' notice of its intention to do so.
Section 5.15. Announcements.
Prior to the Closing, none of the Parties hereto will issue any press
release or make any public announcement with respect to this Agreement and the
Merger without the prior consent of the other (which consent shall not be
unreasonably withheld), except as may be required by applicable law or
applicable stock exchange regulations, in which event the party required to make
the release shall, if possible, allow the other party reasonable time to comment
on such release in advance of such issuance. The parties hereto agree that the
initial press release to be issued with respect to the transactions contemplated
hereby shall be in a form heretofore agreed to by the parties hereto.
48
Section 5.16. Insurance and Indemnification.
(a) For six years after the Effective Time, the Buyer shall procure
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 in amounts no less favorable than those of
such policy in effect on the date hereof.
(b) The Buyer will not take any action to alter or impair any exculpatory
or indemnification provisions now existing in the Articles of Incorporation or
bylaws of the Company for the benefit of any individual who served as a director
or officer of the Company at any time prior to the Effective Time.
(c) For six years after the Effective Time, the Buyer shall indemnify and
hold harmless the individuals who on or prior to the Effective Time were
officers, directors and employees of the Company or its Subsidiaries
(collectively, the "Indemnitees") with respect to all acts or omissions by them
in their capacities as such or taken at the request of the Company or any of its
Subsidiaries at any time prior to the Effective Time to the extent provided
under the Company's certificate of incorporation and by-laws in effect on the
date hereof.
(d) The Buyer shall cause the Surviving Corporation to honor all
indemnification agreements with Indemnitees (including under the Company's by-
laws) in effect as of the date hereof in accordance with the terms thereof.
(e) The obligations of Buyer under this Section 5.16 shall not be
terminated or modified in such a manner as to adversely affect any Indemnitee to
whom this Section 5.16 applies without the consent of such affected Indemnitee
(it being expressly agreed that the Indemnitees to whom this Section 5.16
applies shall be third party beneficiaries of this Section 5.16).
Section 5.17. Company Stock Plans and Warrants.
(a) Effective at the Effective Time, the Company will offer to pay or
issue to the holder of each outstanding Company Stock Option (or to such
holder's assignee or designee if permitted in accordance with the applicable
Company Stock Plan), whether vested or unvested, in consideration of the
cancellation of such Company Stock Option, (i) the Merger Consideration payable
or issuable with respect to the number of Company Common Shares into which such
Company Stock Option is exercisable (rounded in the case of
49
the cash consideration to the nearest cent and in the case of the Spinoff
Shares, if any, to the nearest whole share) less (ii) the aggregate exercise
price under such Company Stock Option immediately prior to the Effective Time.
No interest will accrue or be paid to the holder of any outstanding Company
Stock Option on any amounts payable hereunder.
(b) In addition, at the request of the Buyer, the Company will allocate
the Option Termination Adjustment Amount in order to compensate full-time
employee holders of Company Stock Options (other than employees of the Delivery
Systems Companies and the Expedited Companies) for the loss of the long-term
option value of their Company Stock Options resulting from the Merger and the
other transactions provided for in this Agreement and in order if necessary to
obtain the agreement of the holders of such Company Stock Options to cancel such
options. The Company may, in its sole discretion, allocate the Option
Termination Adjustment Amount among full-time employee holders of the Company
Stock Options (or to such holders' assignees or designees if permitted in
accordance with the applicable Company Stock Plan, but not to employees of the
Delivery Systems Companies and the Expedited Companies) in any manner that it
deems fair and appropriate, including as a reduction in the exercise price of
the Company Stock Options; provided, that half of the Option Termination
Adjustment Amount will be payable or realizable at the Effective Time and the
other half will be payable only to holders who are full-time employees of the
Company or one of its Subsidiaries nine months following the Closing Date, who
were terminated by the Company without cause during such period or who
voluntarily resigned during such period as a result of a required relocation or
a significant diminishment of title, responsibilities or compensation.
(c) Effective at the Effective Time, the Company will offer to pay or
issue to the holder of each outstanding Warrant, whether then exercisable or
not, in consideration of the cancellation of such Warrant, (i) the Merger
Consideration payable or issuable with respect to the number of Company Common
Shares into which such Warrant would (ignoring any vesting or other restrictions
on exercise) be exercisable (rounded in the case of the cash consideration to
the nearest cent and in the case of the Spinoff Shares, if any, to the nearest
whole share) less (ii) the aggregate exercise price under such Warrant
immediately prior to the Effective Time. No interest will accrue or be paid to
the holder of any outstanding Warrant for any amounts payable hereunder.
50
(d) On or prior to August 31, 1999 (i) the Company shall terminate the
Company Stock Purchase Plan and (ii) in accordance with the terms and conditions
of the Company Stock Purchase Plan, the Company shall issue to the custodian
Company Common Shares or cause the custodian to conduct in the open market the
final purchase of Company Common Shares (such issued or purchased Company Common
Shares not to exceed 225,000 shares) and promptly distribute any remaining cash
account balances to participants.
(e) The Company shall, and/or shall cause any of its Subsidiaries to,
terminate each Company Stock Plan, and any other plan, program or arrangement
providing for the issuance or grant of the Company Common Shares or any other
interest in respect of the Company Common Shares (other than the Company Stock
Purchase Plan), such termination to be effective as of the Effective Time.
(f) Prior to the Effective Time, the Board of Directors (or, if
appropriate, any committee administering any of the Company Stock Plans) shall
adopt such resolutions or take such actions as are necessary, subject if
necessary, to obtaining consents of the holders in respect of the Company Stock
Plans and/or the Warrants, to carry out the terms of this Section. Any such
consents shall be subject to the approval of Buyer.
(g) Prior to the Effective Time, the Company shall deliver to the
participants in the Company Stock Purchase Plan and the Company Stock Plans and
holders of the Warrants appropriate notice, subject to the approval of Buyer,
setting forth such participants' and holders' rights as set forth in this
Section. The Company (or any committee administering the Company Stock Plans)
shall use its reasonable best efforts to encourage all holders of the Company
Stock Options and Warrants to consent to the cancellation of their Company Stock
Options and Warrants in exchange for the consideration offered under Sections
5.17(a), 5.17(b) and 5.17(c) in instances where such cancellation is not
permitted at the option of the Company under the terms of the agreements
governing the Company Stock Options and Warrants.
Section 5.18. Employee Benefits.
(a) The Buyer shall cause the Surviving Corporation to honor, in
accordance with the terms, conditions and restrictions of the applicable plan,
policy, agreement and/or arrangement, all benefits and obligations accrued (and
not theretofore used, paid or canceled) as of the Effective Time by employees of
51
the Company and its Subsidiaries under the following plans, policies, agreements
and arrangements: (i) the Corporate Express Severance Policy, dated December 1,
1998, provided, however, that any person who has not incurred (or delivered or
received notice of) a termination of employment as of the Effective Time shall
not be deemed to have accrued a benefit under the Corporate Express Severance
Policy, dated December 1, 1998, for purposes of this Section 5.18(a), (ii) all
written employment, severance, change in control and retention agreements to
which the Company or any of its Subsidiaries is a party, (iii) with respect to
the Company's and its Subsidiaries' bonus and incentive compensation plans and
policies, any payments or benefits earned but not paid as of the Effective Time
(not including bonuses contemplated by Section 5.18(e) hereof), and (iv) the
Company's and its Subsidiaries' plans and policies with respect to vacation,
personal days, sick days, educational assistance, employment assistance, jury
duty and bereavement; provided, however, that following the one (1) year
anniversary of the Effective Time, the Buyer may modify, convert, substitute or
terminate the benefits accrued (and not theretofore used, paid or canceled) as
of the Effective Time under this clause (iv) in exchange for payments or
benefits that are not materially less favorable than the benefits so modified,
converted, substituted or terminated. Notwithstanding the foregoing, with
respect to benefits and obligations accruing after the Effective Time, nothing
in this Section 5.18(a) shall be construed to limit the Buyer's ability to
modify (to the extent permitted by the terms of the applicable plan, policy,
agreement or arrangement and by applicable law) any Employee Benefit Plan or
provide any alternative plans, policies, agreements or arrangements following
the Effective Time. The Buyer and the Company hereby agree that the
consummation of the Merger shall constitute a "Change in Control" for purposes
of any employee arrangement and all other Employee Benefit Plans, pursuant to
the terms of such plans in effect on the date hereof.
(b) Following the Effective Time, the Buyer shall continue to provide to
individuals who are employed by the Company and its Subsidiaries as of the
Effective Time, who remain employed with the Buyer or any Subsidiary of the
Buyer, and who are not subject to collective bargaining agreements ("Affected
Employees"), for one (1) year following the Effective Time, employee benefits
(other than stock option, stock purchase or other benefits involving the
potential issuance of securities of the Company or the Buyer) (i) pursuant to
the Employee Benefit Plans (including the Corporate Express Severance Policy,
dated December 1, 1998, and the Corporate Express Management Incentive Program)
as provided to such employees immediately
52
prior to the Effective Time or (ii) pursuant to employee benefit plans,
programs, policies or arrangements maintained by the Buyer or any Subsidiary of
the Buyer providing coverage and benefits which, in the aggregate, are not
materially less favorable than those provided to employees of the Buyer in
positions comparable to positions held by Affected Employees with the Buyer or
its Subsidiaries from time to time after the Effective Time.
(c) The Buyer will, or will cause the Surviving Corporation to, give
Affected Employees full credit for purposes of eligibility, vesting and
determination of the level of benefits, not including benefit accruals under any
defined benefit plans, under any employee benefit plans or arrangements
maintained by the Buyer or any Subsidiary of the Buyer for such Affected
Employees' service with the Company or any Subsidiary of the Company to the same
extent recognized by the Company immediately prior to the Effective Time.
(d) The Buyer will, or will cause the Surviving Corporation to, (i) waive
all limitations as to preexisting conditions, exclusions and waiting periods
with respect to participation and coverage requirements applicable to the
Affected Employees under any welfare benefit plans that such employees may be
eligible to participate in after the Effective Time, other than limitations or
waiting periods that are already in effect with respect to such employees and
that have not been satisfied as of the Effective Time under any welfare plan
maintained for the Affected Employees immediately prior to the Effective Time,
(ii) provide each Affected Employee with credit for any co-payments and
deductibles paid prior to the Effective Time in satisfying any applicable
deductible or out-of-pocket requirements for the year in which the Effective
Time occurs under any welfare plans that such employees are eligible to
participate in after the Effective Time and (iii) continue group health
insurance coverage pursuant to COBRA for individuals covered under health
insurance plans of the Company and its Subsidiaries immediately prior to the
Effective Time.
(e) The Buyer acknowledges that the Company's Board of Directors has
determined that all officers and employees covered by the Company's management
incentive bonus plans have performed at a level satisfactory to the Company
during the current fiscal year and, accordingly, that all such individuals would
be entitled to receive bonuses at the end of such fiscal year in the amounts
provided for under such bonus plans, but in any case not less than 50% of the
base target amounts under such plans.
53
Section 5.19. Stay-Put Bonuses.
At the request of the Buyer and in order to retain key and necessary
employees following the Merger, the Company will award special employee bonuses
in an aggregate amount not to exceed $9.0 million ("Stay-Put Bonuses") after the
date hereof and prior to the Effective Time for the purpose of retaining
employees that the Company and the Buyer believe are important to the operation
of the Company's business following the Merger. Half of the amount of a Stay-
Put Bonus shall be paid on or prior to the Effective Time and the other half
shall be paid only to employees who are employed full-time by the Company or one
of its Subsidiaries nine months following the Closing Date, employees of the
Company and its Subsidiaries (other than the Delivery Systems Companies and the
Expedited Companies) who were terminated by the Company without cause during
such period or who voluntarily resigned during such period as a result of a
required relocation or a significant diminishment of title, responsibilities or
compensation.
Section 5.20. Indentures and Change of Control Offers
.
The Buyer shall cause the Surviving Corporation and its Subsidiaries to
comply with any requirement to make any "Change of Control Offer" (to the extent
that any such requirement is not waived or eliminated) under the Indenture,
dated as of June 24, 1996, with respect to the 4 1/2% Convertible Notes due 2000
of the Company, the Indenture, dated as of May 29, 1998, with respect to the 9
5/8% Senior Subordinated Notes due 2008 of CEX Holdings, Inc. or under any other
indenture or similar instrument.
Section 5.21. Transfer Tax.
The Company and the Buyer shall cooperate in the preparation, execution
and filing of all returns, questionnaires, applications or other documents
regarding any real property transfer or gains, sales, use, transfer, value
added, stock transfer and stamp taxes, any transfer, recording, registration and
other fees and any similar taxes which become payable in connection with the
transactions contemplated by this Agreement (together with any related
interests, penalties or additions to tax, "Transfer Taxes"). All Transfer Taxes
shall be paid by the Company and expressly shall not be a liability of any
holder of Company Common Shares, Company Stock Options, Warrants or 4 1/2%
Convertible Notes due 2000 of the Company.
54
ARTICLE VI.
CONDITIONS TO OBLIGATION TO CLOSE
Section 6.1. Conditions to Obligation of the Buyer and the Merger Subsidiary.
The obligation of each of the Buyer and the Merger Subsidiary to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:
(a) this Agreement and the Merger shall have received the Company
Shareholder Approval and the Buyer Shareholder Approval;
(b) the representations and warranties set forth in Article III above that
are not qualified as to materiality shall be true and correct in all material
respects at and as of the Closing Date and such representations and warranties
that are qualified as to materiality shall be true and correct as of the Closing
Date;
(c) the Company shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(d) there shall not be any statute, rule, regulation, judgment, non-
appealable order, decree, stipulation, injunction, or charge in effect
preventing consummation of any of the transactions contemplated by this
Agreement;
(e) the Company shall have delivered to the Buyer and the Merger
Subsidiary a certificate to the effect that each of the conditions specified
above in Section 6.1(a)-(d) is satisfied in all respects;
(f) the Delivery Systems Dispositions shall have been consummated or if
the Company has elected (or the Buyer has caused the Company to elect) the
Delivery Systems Spinoff (and the Delivery Systems Dispositions shall not have
occurred), the S-4 Registration Statement shall have become effective under the
Securities Act, all approvals required by the NMS shall have been received and
the Delivery Systems Spinoff shall have occurred;
(g) all applicable waiting periods (and any extensions thereof) under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and the EU Competition Laws shall have expired or
otherwise been terminated and any required approvals shall have been obtained
and the Parties shall have received all other authorizations, consents,
55
and approvals of governments and governmental agencies referred to in Section
3.4 and Section 4.4 above;
(h) all actions to be taken by the Company in connection with
consummation of the transactions contemplated hereby and all certificates,
instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Buyer and the Merger Subsidiary.
The Buyer and the Merger Subsidiary may waive any condition specified in
this Section 6.1 if they execute a writing so stating at or prior to the
Closing.
Section 6.2. Conditions to Obligation of the Company.
The obligation of the Company to consummate the transactions to be
performed by it in connection with the Closing is subject to satisfaction of the
following conditions:
(a) if the Company has elected the Delivery Systems Spinoff (and the
Delivery Systems Dispositions have not occurred), the S-4 Registration Statement
shall have become effective under the Securities Act and the Delivery Systems
Spinoff shall have occurred;
(b) the representations and warranties set forth in Article IV above that
are not qualified as to materiality shall be true and correct in all material
respects at and as of the Closing Date and such representations and warranties
that are qualified as to materiality shall be true and correct as of the Closing
Date;
(c) each of the Buyer and the Merger Subsidiary shall have performed and
complied with all of its covenants hereunder in all material respects through
the Closing;
(d) there shall not be any judgment, nonappealable order, decree,
stipulation, injunction, or charge in effect preventing consummation of any of
the transactions contemplated by this Agreement;
(e) each of the Buyer and the Merger Subsidiary shall have delivered to
the Company a certificate to the effect that each of the conditions specified
above in Section 6.2(b)-(d) is satisfied in all respects;
56
(f) this Agreement and the Merger shall have received the Company
Stockholder Approval;
(g) all applicable waiting periods (and any extensions thereof) under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and the EU Competition Laws shall have expired or
otherwise been terminated and any required approvals shall have been obtained
and the Parties shall have received all other authorizations, consents, and
approvals of governments and governmental agencies referred to in Section 3.4
and Section 4.4 above;
(h) all actions to be taken by the Buyer and the Merger Subsidiary in
connection with consummation of the transactions contemplated hereby and all
certificates, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Company.
The Company may waive any condition specified in this Section 6.2 if it
executes a writing so stating at or prior to the Closing.
57
ARTICLE VII
TERMINATION.
Section 7.1. Termination of Agreement.
Any of the Parties may terminate this Agreement with the prior
authorization of its board of directors (whether before or after stockholder
approval) as provided below:
(a) the Parties may terminate this Agreement by mutual written consent at
any time prior to the Effective Time;
(b) the Buyer and the Merger Subsidiary may terminate this Agreement by
giving written notice to the Company at any time prior to the Effective Time (i)
in the event the Company breaches any representation or warranty contained in
this Agreement which, if uncured, would result in any such representation or
warranty that is qualified as to materiality being untrue or incorrect in any
respect or, in any such representation or warranty that is not so qualified,
being untrue or incorrect in any material respect, or breaches or fails to
perform in any material respect any obligation, agreement or covenant to be
performed or complied with under this Agreement, the Buyer or the Merger
Subsidiary has notified the Company of such breach or failure, and such breach
or failure has continued without cure for a period of 30 days after the notice
thereof or (ii) if the Closing shall not have occurred on or before December 15,
1999, by reason of the failure of any condition precedent under Section 6.1
hereof (unless the failure results primarily from the Buyer or the Merger
Subsidiary breaching any representation, warranty, or covenant contained in this
Agreement);
(c) the Company may terminate this Agreement by giving written notice to
the Buyer and the Merger Subsidiary at any time prior to the Effective Time (i)
in the event the Buyer or the Merger Subsidiary breaches any representation or
warranty contained in this Agreement which, if uncured, would result in any such
representation or warranty that is qualified as to materiality being untrue or
incorrect in any respect or, in any such representation or warranty that is not
so qualified, being untrue or incorrect in any material respect, or breaches or
fails to perform in any material respect any obligation, agreement or covenant
to be performed or complied with under this Agreement, the Company has notified
the Buyer and the Merger Subsidiary of such breach or failure, and such breach
or failure has continued without cure
58
for a period of 30 days after the notice thereof or (ii) if the Closing shall
not have occurred on or before December 15, 1999, by reason of the failure of
any condition precedent under Section 6.2 hereof (unless the failure results
primarily from the Company breaching any representation, warranty, or covenant
contained in this Agreement);
(d) any Party may terminate this Agreement by giving written notice to the
other Parties at any time after the Company Special Meeting in the event this
Agreement and the Merger fail to receive the Company Shareholder Approval;
(e) by either the Buyer, on the one hand, or the Company, on the other
hand, if any statute, rule or regulation shall have been promulgated which
prohibits the consummation of the Merger of if any order or injunction of a
court of competent jurisdiction which prohibits consummation of the Merger shall
have become final and non-appealable;
(f) (i) by the Buyer if, at any time prior to consummation of the Merger,
the Company shall have (A) entered into any agreement, arrangement or
understanding with respect to any Acquisition Proposal, (B) withdrawn or
modified in a manner adverse to the Buyer or Merger Subsidiary, the approval and
recommendation of this Agreement or (C) approved or recommended any Acquisition
Proposal or (ii) by the Company if, at any time prior to consummation of the
Merger, the Company shall have entered into any agreement to effect a Superior
Proposal and the entering into of such agreement is permitted in accordance with
Section 5.14 and the fees payable by the Company to the Buyer pursuant to
Section 8.12(b) are paid simultaneously with such termination;
(g) by the Company, if the Buyer shall have failed (i) to enter into
Definitive Financing Agreements on or prior to the date of the Company Special
Meeting or (ii) to obtain the Buyer Shareholder Approval or the Central Works
Council Approval by August 15, 1999;
(h) by the Buyer if, prior to and continuing through the Closing Date: (i)
trading in securities generally on the New York Stock Exchange or NMS shall have
been suspended or materially limited, (ii) a general moratorium on commercial
banking activities in New York shall have been declared by either Federal or
state authorities, or (iii) there shall have occurred any outbreak or escalation
of hostilities or other international or domestic calamity,
59
crisis or change in political financial or economic conditions, the effect of
which on the global financial markets is such as to make it impossible to
complete the financing for the transactions under this Agreement; or
(i) by the Buyer, if the Buyer shall have failed to obtain the Buyer
Shareholder Approval by August 15, 1999.
Section 7.2. Effect of Termination.
If any Party terminates this Agreement pursuant to Section 7.1 above, all
rights and obligations of the Parties hereunder shall terminate without any
liability of any Party to any other Party (except for any obligations under
Section 8.12 and liability of any Party then in breach and except that if the
Company terminates this Agreement pursuant to Section 7.1(g)(i), the Buyer shall
be deemed to have breached this Agreement); provided, however, that Sections 8.8
and 8.9 below and the confidentiality provisions contained in Section 5.12 above
shall survive any such termination.
ARTICLE VIII.
MISCELLANEOUS.
Section 8.1. Survival.
None of the representations, warranties, and covenants of the Parties
(other than the provisions in Article II above concerning payment of the Merger
Consideration and the provisions in Section 5.16 above concerning insurance and
indemnification) will survive the Effective Time.
Section 8.2. No Third-Party Beneficiaries.
This Agreement shall not confer any rights or remedies upon any Person
other than the Parties and their respective successors and permitted assigns;
provided, however, that (i) the provisions in Article II above concerning
payment of the Merger Consideration are intended for the benefit of the Company
Shareholders and (ii) the provisions in Section 5.16 above concerning insurance
and indemnification are intended for the benefit of the individuals specified
therein and their respective legal representatives.
60
Section 8.3. Entire Agreement.
Except for the Confidentiality Agreement, this Agreement (including the
documents referred to herein) constitutes the entire agreement among the Parties
and supersedes any prior understandings, agreements, or representations by or
among the Parties, written or oral, to the extent they related in any way to the
subject matter hereof.
Section 8.4. Succession and Assignment.
This Agreement shall be binding upon and inure to the benefit of the
Parties named herein and their respective successors and permitted assigns. No
Party may assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the other Parties.
Section 8.5. Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original but all of which together will constitute one and
the same instrument.
Section 8.6. Headings.
The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
Section 8.7. Notices.
All notices, requests, demands, claims, and other communications hereunder
will be in writing. Any notice, request, demand, claim, or other communication
hereunder shall be deemed duly given if (and then two business days after) it is
sent by registered or certified mail, return receipt requested, postage prepaid,
and addressed to the intended recipient as set forth below:
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If to the Company:
Corporate Express, Inc.
▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
(▇▇▇) ▇▇▇-▇▇▇▇ (Telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
Copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
If to the Buyer or the Merger Subsidiary:
▇▇▇▇▇▇▇▇ NV
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Attention: Corporate Secretary
▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇ (Telephone)
▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇ (FAX)
Copy to:
Winthrop, Stimson, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (FAX)
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no
62
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth.
Section 8.8. Governing Law.
THIS AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES HERETO SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICT OF LAWS RULES THEREOF OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW; PROVIDED, HOWEVER, THAT ANY OF THE
PROVISIONS CONTAINED HEREIN WITH REGARD TO THE MERGER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO, WITHOUT REGARD
TO THE CONFLICT OF LAWS RULES THEREOF.
Section 8.9. Jurisdiction and Venue; Waiver of Jury Trial.
(a) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any New
York state court or any Federal court of the United States of America sitting in
New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any of the transactions
contemplated hereby, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in any such New York state court or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Each of the Buyer and the Merger Subsidiary hereby irrevocably
appoints CT Corporation System (the "Process Agent"), with an office on the date
hereof at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, as its agent
to receive, on behalf of the Buyer and the Merger Subsidiary and their
63
property, service of copies of the summons and complaint and any other process
which may be served in any such action or proceeding. Such service may be made
by mailing or delivering a copy of such process to the Buyer and the Merger
Subsidiary in care of the Process Agent at the Process Agent's above address,
and each of the Buyer and the Merger Subsidiary hereby also irrevocably consents
to the service of any and all process in any such action or proceeding by
mailing of copies of such process to the addresses for Buyer and Merger
Subsidiary at their respective addresses specified in Section 8.7.
(c) Each of the parties hereto irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby in any New York State or Federal court. Each of the parties
hereto hereby waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court.
(d) To the extent that either the Buyer or the Merger Subsidiary has or
hereafter may acquire any immunity from jurisdiction of any court or from legal
process with respect to itself or its property, such party hereby irrevocably
and unconditionally waives such immunity in respect of its obligations under
this Agreement and, without limiting the generality of the foregoing, agrees
that the waivers set forth in this Section 8.9 shall have the fullest scope
permitted under the Foreign Sovereign Immunities Act of 1976 of the United
States and are intended to be irrevocable for purposes of such Act.
(e) Each of the parties to this Agreement hereby irrevocably waives all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement or the transactions contemplated hereby.
Section 8.10. Amendments and Waivers.
The Parties may mutually amend any provision of this Agreement at any time
prior to the Effective Time with the prior authorization of their respective
boards of directors; provided, however, that any amendment effected subsequent
to stockholder approval will be subject to the restrictions contained in the
Colorado Business Corporation Act. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by all
of the Parties. No waiver by any Party of any default, misrepresentation, or
64
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
Section 8.11. Severability.
Any term or provision of this Agreement that is invalid or unenforceable in
any situation in any jurisdiction shall not affect the validity or
enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation or in
any other jurisdiction.
Section 8.12. Expenses.
(a) Except as otherwise specified in this Section 8.12 or agreed in
writing by the parties, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such cost or expense.
(b) If this Agreement is terminated by any Party in accordance with
Section 7.1(f) hereof, then the Company shall pay to the Buyer an amount equal
to $40.0 million not later than the date of such termination.
(c) If this Agreement is terminated by any Party in accordance with
Section 7.1(d) hereof and if on or prior to the date that is one year from the
date of such termination, the Company shall have consummated an agreement with
respect to any Acquisition Proposal with any Person or any Affiliate of such
Person who shall have made or caused to be made an Acquisition Proposal prior to
the date on which this Agreement shall have been terminated pursuant to Section
7.1(d), then the Company shall pay to the Buyer an amount equal to $30.0 million
not later than the date of the consummation of such transaction.
(d) If this Agreement is terminated by the Buyer or Merger Subsidiary in
accordance with Section 7.1(b)(ii) because the condition set forth in Section
6.1(f) has not been met, the Company shall pay to the Buyer an amount equal to
$30.0 million not later than the date of such termination. Acceptance by the
Buyer of any of the payments referred to in the foregoing sentence shall
constitute conclusive evidence that this Agreement has been validly terminated
and upon acceptance of payment of such amount the
65
Company shall be fully released and discharged from any liability or obligation
resulting from or under this Agreement.
(e) If the Company terminates this Agreement pursuant to Section 7.1(g) or
if the Buyer terminates this Agreement pursuant to Section 7.1(i), then the
Buyer shall pay to the Company (by wire transfer of immediately available funds
not later than the date of termination of this Agreement) an amount equal to
$20.0 million. Such payment shall not release the Buyer from any other
liability or obligation resulting from or under this Agreement; however, the
Buyer may credit this $20.0 million payment against any liabilities or damages
that it may be required to pay to the Company under this Agreement.
(f) If this Agreement is terminated by any Party in accordance with
Section 7.1(d) hereof, the Company shall promptly thereafter reimburse the Buyer
for its actual documented out-of-pocket expenses incurred in connection with the
transactions under this Agreement in an aggregate amount not to exceed $10.0
million; provided, however, if on or prior to the date that is one year after
the date of such termination, the Company shall have consummated an agreement
with respect to any Acquisition Proposal such that an additional payment is
payable under this Section 8.12, the Company may credit any payment made under
this Section 8.12(f) against such additional payment.
(g) If any Party is entitled to a payment under more than one of the
provisions set forth in subsections (b) through (f) of this Section 8.12, such
Party shall be entitled to receive the highest amount payable pursuant to any
one of such subsections.
Section 8.13. Construction.
The Parties have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context otherwise requires. The word "including" shall
mean including without limitation.
Section 8.14. Incorporation of Exhibits and Schedules.
66
The Exhibits and Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof.
*****
67
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
▇▇▇▇▇▇▇▇ NV
By: /s/ Frans Koffrie
----------------------------------------------------------------
Title: Chairman of the Executive Board
----------------------------------------------------------------
NORTH ACQUISITION CORPORATION
By: /s/ Frans Koffrie
----------------------------------------------------------------
Title: Chairman of the Executive Board
----------------------------------------------------------------
CORPORATE EXPRESS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------------------------
Title: Executive Vice President
----------------------------------------------------------------
68
