Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
WEST CORPORATION,
DIALING ACQUISITION CORP.,
ITC HOLDING COMPANY, INC.,
AND,
FOR PURPOSES OF SECTIONS 3.6, 4.1 AND 8.13,
ARTICLE 11 AND ARTICLE 12 ONLY,
THE STOCKHOLDER REPRESENTATIVE
Dated as of March 27, 2003
TABLE OF CONTENTS
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER .......................... 1
1.1 Merger ....................................................... 1
1.2 Time and Place of Closing .................................... 1
1.3 Effective Time ............................................... 2
ARTICLE 2 - TERMS OF MERGER ........................................... 2
2.1 Certificate of Incorporation ................................. 2
2.2 Bylaws ....................................................... 2
2.3 Directors and Officers ....................................... 2
ARTICLE 3 - MANNER OF CONVERTING SHARES ............................... 2
3.1 Merger Consideration ......................................... 2
3.2 Conversion of Shares ......................................... 3
3.3 Shares Held by Company or Parent ............................. 5
3.4 Treatment of Equity Rights ................................... 5
3.5 Estimated Balance Sheet ...................................... 6
3.6 Closing Working Capital ...................................... 8
3.7 Dissenting Stockholders ......................................10
ARTICLE 4 - PAYMENT OF MERGER CONSIDERATION ...........................11
4.1 Payment Procedures ...........................................11
4.2 Rights of Former Company Stockholders ........................12
4.3 Escrow Fund ..................................................12
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF COMPANY .................13
5.1 Organization, Standing, and Power ............................13
5.2 Authority of Company; No Breach By Agreement .................13
5.3 Capital Stock ................................................14
5.4 Company Subsidiaries .........................................15
5.5 Financial Statements .........................................16
5.6 Absence of Undisclosed Liabilities ...........................16
5.7 Absence of Certain Changes or Events .........................17
5.8 Tax Matters ..................................................18
5.9 Assets .......................................................20
5.10 Intellectual Property ........................................20
5.11 Environmental Matters ........................................21
5.12 Compliance with Laws .........................................22
5.13 Labor Relations ..............................................23
5.14 Employee Benefit Plans .......................................23
5.15 Material Contracts ...........................................24
5.16 Legal Proceedings ............................................25
5.17 Reports ......................................................25
5.18 Statements True and Correct ..................................25
5.19 State Takeover Laws ..........................................26
5.20 Charter Provisions ...........................................26
5.21 Stockholders' Voting Agreements ..............................26
5.22 Board Recommendation .........................................26
5.23 Interests in Real Property ...................................26
5.24 Transactions with Affiliates .................................28
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5.25 No Brokers .................................................. 28
5.26 Investment Company .......................................... 28
5.27 Customers ................................................... 28
5.28 Solvency .................................................... 29
5.29 Insurance ................................................... 29
5.30 Fairness Opinions ........................................... 29
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB ......... 29
6.1 Organization, Standing, and Power ........................... 30
6.2 Authority; No Breach By Agreement ........................... 30
6.3 SEC Filings; Financial Statements ........................... 30
6.4 Absence of Certain Changes or Events ........................ 31
6.5 Compliance with Laws ........................................ 31
6.6 Legal Proceedings ........................................... 31
6.7 Statements True and Correct ................................. 32
6.8 Authority of Sub ............................................ 32
6.9 Financing ................................................... 32
6.10 No Broker ................................................... 33
6.11 Solvency .................................................... 33
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION ................. 33
7.1 Covenants of Company ........................................ 33
7.2 Covenants of Parent ......................................... 35
7.3 Adverse Changes in Condition ................................ 35
7.4 Reports ..................................................... 36
7.5 Credit Facility ............................................. 36
ARTICLE 8 - ADDITIONAL AGREEMENTS ................................... 36
8.1 Proxy Statement; Stockholder Approval ...................... 36
8.2 Other Offers, Etc. .......................................... 37
8.3 Antitrust Notification; Consents of Regulatory Authorities .. 37
8.4 Filing with State Office .................................... 38
8.5 Agreement as to Efforts to Consummate ....................... 38
8.6 Investigation and Confidentiality ........................... 39
8.7 Press Releases .............................................. 39
8.8 Employee Benefits and Contracts ............................. 39
8.9 Indemnification of Officers and Directors ................... 41
8.10 Asset Dispositions .......................................... 43
8.11 Financing ................................................... 43
8.12 Restrictive Covenant Agreement .............................. 43
8.13 Certain Tax Matters ......................................... 43
8.14 Real Estate Matters ........................................ 46
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE ........ 47
9.1 Conditions to Obligations of Each Party ..................... 47
9.2 Conditions to Obligations of Parent ......................... 47
9.3 Conditions to Obligations of Company ........................ 49
ARTICLE 10 - TERMINATION ............................................. 50
10.1 Termination ................................................. 50
10.2 Effect of Termination ....................................... 51
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ARTICLE 11 - REIMBURSEMENT FOR LOSSES ................................ 51
11.1 Reimbursement for Losses .................................... 51
11.2 Procedures for Reimbursement ................................ 53
11.3 Third Party Claims .......................................... 54
11.4 Exclusive Post-Closing Remedy ............................... 55
11.5 Time Limitations ............................................ 55
11.6 Tax Effect and Insurance .................................... 55
11.7 Subrogation ................................................. 56
11.8 Reimbursement Claims for Losses, Resulting from, Based upon
or Arising out of the Company Disposition Matter ............ 56
ARTICLE 12 - STOCKHOLDER REPRESENTATIVE .............................. 57
12.1 Appointment; Acceptance ..................................... 57
12.2 Authority ................................................... 58
12.3 Actions ..................................................... 58
12.4 Effectiveness ............................................... 58
12.5 Indemnification; Fees and Expenses .......................... 58
12.6 Successor ................................................... 59
12.7 Survival of Authorizations .................................. 59
ARTICLE 13 - MISCELLANEOUS ........................................... 59
13.1 Definitions ................................................. 59
13.2 Expenses .................................................... 69
13.3 Entire Agreement ............................................ 70
13.4 Amendments .................................................. 70
13.5 Waivers ..................................................... 71
13.6 Assignment .................................................. 71
13.7 Notices ..................................................... 71
13.8 Governing Law; Venue ........................................ 72
13.9 Counterparts ................................................ 72
13.10 Captions; Articles and Sections ............................. 72
13.11 Interpretations ............................................. 72
13.12 Severability ................................................ 73
13.13 Company Name and Logos ...................................... 73
13.14 Disclosure Memorandum ....................................... 73
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EXHIBIT INDEX
Exhibit Description
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Exhibit 1 Forms of Voting Agreement
Exhibit 2 Form of Certificate of Incorporation of the Surviving
Corporation
Exhibit 3 Accounting Methods, Policies, Practices,
Procedures and Adjustments Related to the Calculation
of the Aggregate Cash Consideration, Including the
Company Projected Liabilities
Exhibit 4 Example of Per Share Price Calculations
Exhibit 5 Accounting Methods, Policies, Practices, Procedures
and Adjustments Related to the Calculation of Working
Capital
Exhibit 6 Form of Escrow Agreement
Exhibit 7 Form of Restrictive Covenant Agreement
Exhibit 8 Forms of Legal Opinions of Counsel to Company
Exhibit 9 Form of Legal Opinion of Foreign Counsel to
Certain Company Subsidiaries
Exhibit 10 Baseline Statement
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of March 27, 2003, by and among West Corporation ("Parent"), a Delaware
corporation; Dialing Acquisition Corp. ("Sub"), a Delaware corporation; ITC
Holding Company, Inc. ("Company"), a Delaware corporation; and, solely with
respect to Sections 3.6, 4.1 and 8.13, Article 11 and Article 12 as the
stockholders' representative, Xxxxxxxx X. Xxxxxx, III (the "Stockholder
Representative").
Preamble
The respective Boards of Directors of Company, Sub and Parent are of the
opinion that the transactions described herein are in the best interests of the
Parties to this Agreement and their respective stockholders. This Agreement
provides for the acquisition of Company by Parent pursuant to the merger of Sub
with and into Company. At the effective time of such merger, the outstanding
shares of the capital stock of Company shall be converted into the right to
receive the Cash Merger Consideration (except as provided herein). As a result,
Company shall continue to conduct its business and operations as a wholly owned
subsidiary of Parent. The transactions described in this Agreement, including
the Merger, are subject to the approvals of the stockholders of Company, the
consummation of the Stock Dispositions, termination or expiration of the
required waiting period under the HSR Act and the satisfaction of certain other
conditions described in this Agreement.
Concurrently with the execution and delivery of this Agreement, as a
condition and inducement to Parent's willingness to enter into this Agreement,
certain of the holders of the outstanding shares of Company Capital Stock have
executed and delivered to Parent an agreement in substantially the form of one
of the agreements attached as Exhibit 1 (each a "Voting Agreement"), pursuant to
which they have agreed, among other things, subject to the terms thereof, to
vote the shares of Company Capital Stock over which such Persons have voting
power to adopt this Agreement and the related transactions.
Certain capitalized terms used in this Agreement are defined in Section
13.1.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the Parties agree
as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger.
Subject to the terms and conditions of this Agreement, at the Effective
Time, Sub shall be merged with and into Company in accordance with the
applicable provisions of Section 251 of the DGCL and with the effects provided
in Section 259 of the DGCL (the "Merger"). As a result of the Merger, the
separate corporate existence of Sub shall cease and Company shall continue as
the Surviving Corporation of the Merger and as a wholly owned Subsidiary of
Parent and shall continue to be governed by the Laws of the State of Delaware.
The Merger shall be consummated pursuant to the terms of this Agreement, which
has been approved by the respective Boards of Directors of Company, Sub and
Parent.
1.2 Time and Place of Closing.
The closing of the transactions contemplated hereby (the "Closing") will
take place at 9:00 A.M. on the date that the Effective Time occurs, or at such
other time as the Parties, acting through their
authorized officers, may mutually agree. The Closing shall be held at such
location as may be mutually agreed upon by the Parties.
1.3 Effective Time.
The Merger shall become effective on the date and at the time the
Certificate of Merger reflecting the Merger shall be filed with the Secretary of
State of the State of Delaware or at such later date as the Parties mutually
agree (the "Effective Time"). Subject to the terms and conditions hereof, unless
otherwise mutually agreed upon in writing by the authorized officers of each
Party, the Parties shall use their reasonable efforts to cause the Effective
Time to occur on the first Business Day following the satisfaction or waiver of
all of the conditions set forth in Article 9, other than those conditions
requiring performance at the Closing.
ARTICLE 2
TERMS OF MERGER
2.1 Certificate of Incorporation.
The Certificate of Incorporation of Company in effect immediately prior
to the Effective Time shall be amended to read in its entirety as set forth in
Exhibit 2 attached hereto and as so amended shall constitute the Certificate of
Incorporation of the Surviving Corporation until duly amended or repealed.
2.2 Bylaws.
The Bylaws of Sub in effect immediately prior to the Effective Time shall
be the Bylaws of the Surviving Corporation until duly amended or repealed.
2.3 Directors and Officers.
The directors of Sub in office immediately prior to the Effective Time,
together with such additional persons as may thereafter be elected, shall serve
as the directors of the Surviving Corporation from and after the Effective Time
in accordance with the Bylaws of the Surviving Corporation. The officers of Sub
in office immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected, shall serve as the officers of the
Surviving Corporation from and after the Effective Time in accordance with the
Bylaws of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Merger Consideration.
The consideration to be issued in the Merger in exchange for the Company
Capital Stock and the Company Options shall have an aggregate value equal to (1)
$399,600,000 (the "Base Amount"), plus (2) the amount of cash on the balance
sheet of Company and the Company Entities as of the Closing Date (the "Cash on
Hand"), minus (3) the projected liabilities of Company as of the Closing Date
excluding any tax liabilities related to InterCall (which tax liabilities are
included in the calculation of Working Capital) as calculated using the
accounting methods, policies, practices, procedures and adjustments as described
on Exhibit 3 (the "Projected Liabilities"), and with respect to (2) and (3) as
calculated pursuant to Section 3.5 and as adjusted pursuant to Section 3.6 (as
so adjusted, the "Aggregate Cash
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Consideration"). For purposes of this Agreement, Cash on Hand shall include the
amounts payable under the Promissory Notes to Company or any Company Entity in
connection with the Asset Dispositions.
3.2 Conversion of Shares.
(a) Subject to the provisions of this Article 3, at the Effective Time, by
virtue of the Merger and without any action on the part of Parent, Company, Sub
or the stockholders of any of the foregoing, the shares of the constituent
corporations shall be converted as follows:
(i) Each share of Sub Common Stock issued and outstanding immediately
prior to the Effective Time shall cease to be outstanding and shall be
converted into one hundred (100) shares of common stock, par value $0.01
per share, of the Surviving Corporation.
(ii) Subject to Sections 3.5 and 3.6, each share of Company Common
Stock held by an "accredited investor" (as defined in Rule 501 of the
Securities Act) who makes certain investor representations to Company (a
"Qualified Investor") in the Investor Letter (the "Investor Letter"),
excluding shares held by any Company Entity or any Parent Entity and
excluding shares held by stockholders who perfect their statutory appraisal
rights, issued and outstanding immediately prior to the Effective Time (but
after conversion of any Company Preferred Stock that is to be converted
immediately prior to the Effective Time and after exercise of any Company
Options that are to be exercised immediately prior to the Effective Time)
shall cease to be outstanding and shall be converted into and exchanged for
the right to receive an amount of cash equal to the sum of (1) the
Accredited Per Share Amount, without interest thereon, plus (2) the Escrow
Per Share Amount, with interest thereon as described in Section 4.3 minus
(3) any required withholding of Taxes (the "Accredited Merger
Consideration").
(iii) Subject to Sections 3.5 and 3.6, each share of Company Common
Stock held by a stockholder that is not a Qualified Investor, excluding
shares held by any Company Entity or any Parent Entity and excluding shares
held by stockholders who perfect their statutory appraisal rights, issued
and outstanding immediately prior to the Effective Time (but after
conversion of any Company Preferred Stock that is to be converted
immediately prior to the Effective Time and after exercise of any Company
Options that are to be exercised immediately prior to the Effective Time)
shall cease to be outstanding and shall be converted into and exchanged for
the right to receive an amount of cash equal to (1) the Other Per Share
Amount, without interest thereon, minus (2) any required withholding of
Taxes (the "Non-Accredited Merger Consideration" and together with the
Accredited Merger Consideration, the "Cash Merger Consideration").
(b) Certain Definitions.
(i) Accredited Per Share Amount. The "Accredited Per Share Amount"
shall be equal to the quotient (rounded down to the fourth decimal place)
of (A) the product of (1) the Aggregate Cash Consideration plus the product
of the aggregate number of all In The Money Options immediately prior to
the Effective Time (but after exercise of any Company Options that are to
be exercised immediately prior to the Effective Time) multiplied by the
weighted average exercise price of such In The Money Options, multiplied by
(2) the quotient (rounded down to the fourth decimal place) of the
Accredited Shares (as defined below) divided by the number of shares of
Company Common Stock outstanding immediately prior to the Effective Time
(but after conversion of any Company Preferred Stock that is to be
converted immediately prior to the Effective Time and after exercise of any
Company Options that are to be exercised immediately prior to the Effective
Time) plus all In The Money Options (the "Accredited Quotient"), less the
aggregate amount of the Escrow Deposits divided by (B) the number of
Accredited Shares.
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(ii) Accredited Shares. The "Accredited Shares" shall mean that number
of shares of Company Common Stock issued and outstanding immediately prior
to the Effective Time (but after conversion of any Company Preferred Stock
that is to be converted immediately prior to the Effective Time and after
exercise of any Company Options that are to be exercised immediately prior
to the Effective Time) (regardless of whether such shares are unvested,
subject to right of repurchase, risk of forfeiture or other condition in
favor of Company at such time) held by Qualified Investors.
(iii) Other Per Share Amount. The "Other Per Share Amount" shall be
equal to the quotient (rounded down to the fourth decimal place) of (A) the
product of (1) the Aggregate Cash Consideration plus the product of the
aggregate number of all In The Money Options immediately prior to the
Effective Time (but after exercise of any Company Options that are to be
exercised immediately prior to the Effective Time) multiplied by the
weighted average exercise price of such In The Money Options, multiplied by
(2) the quotient (rounded down to the fourth decimal place) of the Other
Shares divided by the number of shares of Company Common Stock outstanding
immediately prior to the Effective Time (but after conversion of any
Company Preferred Stock that is to be converted immediately prior to the
Effective Time and after exercise of any Company Options that are to be
exercised immediately prior to the Effective Time) plus all In The Money
Options (the "Other Quotient") divided by (B) the number of Other Shares.
(iv) Other Shares. The "Other Shares" shall mean that number of shares
of Company Common Stock issued and outstanding immediately prior to the
Effective Time (but after conversion of any Company Preferred Stock that is
to be converted immediately prior to the Effective Time and after exercise
of any Company Options that are to be exercised immediately prior to the
Effective Time) (regardless of whether such shares are unvested, subject to
right of repurchase, risk of forfeiture or other condition in favor of
Company at such time) not held by a Qualified Investor.
(v) Escrow Per Share Amount. The "Escrow Per Share Amount" shall be
equal to the quotient (rounded down to the fourth decimal place) of (A) the
aggregate amount of the Escrow Deposits divided by (B) the number of
Accredited Shares. The amount of the Escrow Deposits may be reduced in
accordance with the terms of this Agreement, including without limitation,
pursuant to Article 11.
(c) The Investor Letter was mailed on February 25, 2003 (the "Mailing
Date") to each holder of record of Company Capital Stock as of February 25, 2003
(the "Investor Record Date").
(d) Any Company Capital Stock with respect to which the holder (or the
beneficial owner, as the case may be) shall not have submitted to Company, an
effective, properly completed Investor Letter on or before the date which is
three (3) Business Days prior to the Closing Date (the "Investment Deadline")
shall be exchanged for the right to receive the Non-Accredited Merger
Consideration in accordance with Section 3.2(a).
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(e) Company shall make available such number of Investor Letters as may be
reasonably requested by all persons who become holders (or beneficial owners) of
Company Capital Stock between the Investor Record Date and close of business on
the Business Day prior to the Investment Deadline, and Company shall provide to
the Paying Agent all information reasonably necessary for it to perform as
specified herein.
(f) Any such Investor Letter shall have been properly tendered only if
Company shall have actually received a properly completed Investor Letter by the
Investment Deadline. An Investor Letter shall be deemed properly completed only
if the holder shall have properly executed the Investor Letter attesting that
such holder is or is not an "accredited investor" and making those other
representations contained in the Investor Letter.
(g) For illustrative purposes only, an example of the calculations of the
Accredited Merger Consideration, the Non-Accredited Merger Consideration and the
consideration to be paid to the option holders pursuant to Section 3.4 is set
forth on Exhibit 4.
(h) The amount of Accredited Merger Consideration payable to a Company
stockholder that is a stockholder of the corporation purchasing the Disposed
Companies in the Stock Dispositions or that is purchasing the Xxxx jet from
Company in the Asset Dispositions (a "Disposition Stockholder") shall be setoff
against amounts owed by such stockholder to Company or a Company Entity,
directly or indirectly, under the Promissory Notes. Company shall provide to
Parent and the Paying Agent not less than one (1) Business Day prior to the
Closing Date (i) a list of the stockholders of Company that are subject to
setoff pursuant to this Section 3.2(h), (ii) a calculation of the amounts to be
setoff against the Accredited Merger Consideration payable to each such
stockholder of Company, and (iii) evidence signed by each such stockholder of
Company of the right of Parent to setoff amounts payable under this Agreement to
such stockholder against the portion of the amounts of the Promissory Notes
guaranteed by such stockholder. The aggregate amount of the Accredited Merger
Consideration to be offset against amounts owed to Company or a Company Entity
by all of the Disposition Stockholders shall equal the aggregate of the amounts
payable under the Promissory Notes. In no event shall the amount owed by any
Disposition Stockholder under the Promissory Notes exceed the amount of
Accredited Merger Consideration payable to such stockholder.
(i) Subject to the rights of reimbursement and other remedies available
under this Agreement, in no event shall the Cash Merger Consideration payable by
Parent hereunder for all, but not less than all, of the issued and oustanding
shares of Company Capital Stock, together with the amount payable by Parent
under Section 3.4 in respect of all Company Options, exceed or be less than the
Aggregate Cash Consideration.
3.3 Shares Held by Company or Parent.
Each of the shares of Company Capital Stock held by any Company Entity or
by any Parent Entity shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 Treatment of Equity Rights.
(a) Company shall take all actions necessary to provide that all
outstanding options or other Equity Rights to purchase shares of Company Common
Stock ("Company Options") granted under any stock option plan, program or
similar arrangement of Company or any of its Subsidiaries, each as amended (the
"Company Option Plans") or otherwise, shall become fully exercisable and vested
immediately prior to the Effective Time whether or not otherwise exercisable and
vested. Company shall
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comply with the terms of the Company Option Plans, as applicable, and, to the
extent required thereunder, provide written notice to the holders of Company
Options that such Company Options shall be treated as set forth herein. Holders
of Company Options shall be given the opportunity to exercise their Company
Options, effective immediately prior to the Effective Time, and thereby to
become stockholders of Company, entitled to receive the Cash Merger
Consideration for each share of Company Common Stock at the same time and in the
same manner as the other Company stockholders pursuant to Article 3.
(b) All Company Options which are outstanding immediately prior to the
Effective Time, are held by persons who are not Qualified Investors, and are not
exercised in accordance with Section 3.4(a) shall be canceled and shall become
null and void, and the holders thereof shall be entitled to receive, at the same
time and in the same manner as the Company stockholders pursuant to this Article
3, for each such Company Option to acquire one share of Company Common Stock, an
amount in cash equal to (x) the Other Per Share Amount minus (y) the exercise
price per share of such Company Option (such difference being referred to as the
"Exercise Difference," and the aggregate amount of such Exercise Differences for
all Option holders who are not Qualified Investors, the "Aggregate Exercise
Differences"). All applicable withholding taxes attributable to the payments
made hereunder with respect to any Company Option (the "Required Withholding
Amount") shall be deducted from the amounts payable hereunder with respect to
such Company Option. Notwithstanding anything in this Section 3.4(c) to the
contrary, in the event the Exercise Difference is zero or a negative number with
respect to any Company Option, the holder of such Company Option shall receive
no consideration in connection with the cancellation of such Company Option
pursuant to this Section 3.4(b).
(c) All Company Options which are outstanding immediately prior to the
Effective Time, are held by Qualified Investors, and are not exercised in
accordance with Section 3.4(a) shall be canceled and shall become null and void,
and the holders thereof shall be entitled to receive from the Company
immediately prior to the Effective Time, for each such Company Option to acquire
one share of Company Common Stock, that number of Shares of Company Common Stock
equal to the quotient of the Exercise Difference divided by the Other Per Share
Amount (the "Option Amount"). For Company Options to acquire more than one share
of Company Common Stock, the number of shares of Company Common Stock to be
received shall be equal to the product of the Option Amount by the number of
shares of Company Common Stock able to be acquired under such Company Option.
All applicable withholding taxes attributable to the distributions contemplated
hereby shall be deducted from the shares to be distributed hereunder by
withholding that number of shares having a value equal to the Required
Withholding Amount. Notwithstanding anything in this Section 3.4(c) to the
contrary, in the event the Exercise Difference is zero or a negative number with
respect to any Company Option, the holder of such Company Option shall receive
no consideration in connection with the cancellation of such Company Option
pursuant to this Section 3.4(c). Notwithstanding anything in this Section 3.4(c)
to the contrary, the Company shall not be obligated to issue any fraction of a
share of Company Stock under this Section 3.4(c), and the Company will pay to
any holder of a fraction of a share of Company Common Stock that otherwise would
be distributed hereunder, a cash payment equal to the product of such fraction
and the Exercise Difference (the "Fractional Option Distribution"). Holders
receiving a distribution of Company Common Stock pursuant to this Section 3.4(c)
shall become stockholders of the Company, entitled to receive the Accredited
Merger Consideration for each share of Company Common Stock at the same time and
in the same manner as the other Qualified Investor stockholders pursuant to
Article 3.
(d) The Company Option Plans shall terminate immediately prior to the
Effective Time.
3.5 Estimated Balance Sheet.
(a) Company will cause to be prepared and delivered to Parent a
consolidated balance sheet for Company and the Company Subsidiaries, pro forma
giving effect to the Stock Dispositions, as of the
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Closing Date (the "Estimated Balance Sheet") and a certificate based on such
Estimated Balance Sheet setting forth in reasonable detail Company's estimate of
Working Capital (the "Estimated Working Capital") and Net Cash on Hand (the
"Estimated Net Cash On Hand"), as of such date (the "Estimated Working Capital
Certificate"). The Estimated Balance Sheet shall (i) include the consolidated
financial position of Company and the Company Subsidiaries, and (ii) present the
estimated financial position of Company and the Company Subsidiaries as at the
close of business on the Closing Date. The Estimated Balance Sheet and the
Estimated Working Capital Certificate shall be prepared using the same
accounting methods, policies, practices, procedures and adjustments as were used
in the preparation of the Baseline Statement, which are attached as Exhibit 5
hereto (the "Agreed Accounting Principles").
(b) Company shall deliver to Parent the Estimated Balance Sheet and the
Estimated Working Capital Certificate no less than five (5) business days prior
to the Closing Date. The Estimated Balance Sheet and the Estimated Working
Capital Certificate shall be deemed final upon the earliest of (i) the date on
which Parent and Company agree that such documents are final, (ii) the third
Business Day after receipt of such documents pursuant to Section 3.5(b) if
Parent has not delivered a written notice to Company that expresses a
disagreement in good faith of at least $5,000,000 with the Estimated Working
Capital or the Estimated Net Cash on Hand or the calculations thereof and
setting forth its calculations of such amounts, and (iii) the date on which all
disputes relating to such statements and calculations between the Parties are
resolved in accordance with Section 3.5(c). If Parent delivers a notice of
disagreement pursuant to this Section 3.5(b), such notice shall specify in
reasonable detail those items or amounts as to which it disagrees.
(c) If Parent delivers a notice of disagreement pursuant to Section 3.5(b),
Company and Parent shall, during the two (2) Business Days following such
delivery, use their reasonable efforts to reach agreement on the disputed items
or amounts (the "Disputed Estimated Amounts"). If, during such period, Company
and Parent are unable to reach such agreement, they shall promptly thereafter
cause PriceWaterhouseCoopers (or if said firm shall be unwilling to act
thereunder, such other independent public accountants of nationally recognized
standing reasonably satisfactory to Parent and Company), promptly to review and
analyze the Estimated Balance Sheet and the Estimated Working Capital
Certificate for correctness and compliance with the calculations described in
Exhibits 3 and 5. The independent accountants shall be entitled to review all
work papers of the Parties used in calculating the Disputed Estimated Amounts.
In making such calculations, such independent accountants shall act as
arbitrators. Such independent accountants shall deliver to Company and Parent,
as promptly as practicable and in any event no later than seven (7) days after
the Estimated Balance Sheet and Estimated Working Capital Certificate are
provided to such independent accountants, the independent accountants'
calculations of the Estimated Working Capital and the Estimated Net Cash on
Hand. Such calculations shall be final and binding upon Company and Parent,
absent fraud, bad faith, willful misconduct or manifest error in the preparation
thereof. Both Company and Parent shall have the opportunity to participate in
such analysis and comment on the workpapers related thereto prior to the
delivery of the calculations of the Estimated Working Capital and the Estimated
Net Cash on Hand by the independent accountants. The cost of such review and
calculations shall be borne (i) by Company if the difference between (A) the sum
of the Estimated Working Capital and the Estimated Net Cash on Hand shown in the
independent accountants' calculation and (B) the sum of Company's calculation of
the Estimated Working Capital and Estimated Net Cash on Hand delivered pursuant
to Section 3.5(a) is greater than the difference between (C) the sum of the
Estimated Working Capital and Estimated Net Cash on Hand shown in the
independent accountants' calculation and (D) the sum of Parent's calculation of
the Estimated Working Capital and Estimated Cash on Hand delivered pursuant to
Section 3.5(b), (ii) by Parent if the difference between (E) the sum of the
Estimated Working Capital and Estimated Net Cash on Hand shown in the
independent accountants' calculation and (F) the sum of Parent's calculation of
the Estimated Working Capital and Estimated Cash on Hand delivered pursuant to
Section 3.5(b) is greater than the difference between (G) the sum of the
Estimated Working Capital and Estimate Cash on Hand
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shown in the independent accountants' calculation and (H) the sum of Company's
calculation of the Estimated Working Capital and Estimated Cash on Hand
delivered pursuant to Section 3.5(a), and (iii) otherwise equally by Company and
Parent. If for any reason the independent accountants do not complete their
procedures within the seven (7) day review period, then Company and Parent shall
jointly determine the Estimated Working Capital and the Estimated Net Cash on
Hand as soon as reasonably practical following such review period. If Company
and Parent are unable to make a joint determination within two (2) Business Days
after such review period, then the final Estimated Working Capital and the final
Estimated Net Cash on Hand shall be equal to the average of Company's and
Parent's calculation of the Estimated Working Capital and the average of
Company's and Parent's calculation of the Estimated Net Cash on Hand.
(d) If the Estimated Working Capital as determined in accordance with this
Section 3.5 is greater than the Baseline Working Capital Amount, the Aggregate
Cash Consideration payable by Parent at Closing shall be increased by the amount
of the excess; provided, however, the Estimated Working Capital shall not exceed
$13,000,000 for the purposes of this Section 3.5(d).
(e) If the Estimated Working Capital as determined in accordance with this
Section 3.5 is less than the Baseline Working Capital Amount, the Aggregate Cash
Consideration payable by Parent at Closing shall be reduced by the amount of the
deficiency.
(f) If the Estimated Net Cash on Hand as determined in accordance with this
Section 3.5 is greater than $0, the Aggregate Cash Consideration payable by
Parent at Closing shall be increased by the amount of the excess; provided,
however, the Estimated Net Cash on Hand shall not exceed $25,000,000 for the
purposes of this Section 3.5(f).
(g) If the Estimated Net Cash on Hand as determined in accordance with this
Section 3.5 is less than $0, the Aggregate Cash Consideration payable by Parent
at Closing shall be reduced by the amount of the deficiency.
3.6 Closing Working Capital.
(a) As promptly as practicable, but not later than thirty (30) days after
the Closing Date, Parent will cause to be prepared and delivered to the
Stockholder Representative a consolidated balance sheet, giving effect to the
Stock Dispositions, of Company and its Subsidiaries as of the Closing Date (the
"Closing Balance Sheet") and a certificate based on the Closing Balance Sheet
setting forth in reasonable detail Parent's calculation of the Closing Working
Capital and the Net Cash on Hand (the "Closing Net Cash On Hand") as of the
Closing Date (the "Closing Working Capital Certificate"). The Closing Balance
Sheet shall (i) include the consolidated financial position of Company and its
Subsidiaries and (ii) present the consolidated financial position of Company and
its Subsidiaries as at the close of business on the Closing Date. The Closing
Balance Sheet and the Closing Working Capital Certificate shall be prepared
using the Agreed Accounting Principles.
(b) The Closing Balance Sheet and the Closing Working Capital Certificate
delivered pursuant to Section 3.6(a) shall be deemed final, absent fraud, bad
faith, willful misconduct or manifest error in the preparation thereof, upon the
earliest of (i) the date on which Parent and the Stockholder Representative
agree that such documents are final, (ii) the 30th day after receipt of such
documents pursuant to Section 3.6(a), if the Stockholder Representative has not
delivered a notice that expresses a disagreement with the Closing Balance Sheet,
the Closing Working Capital Certificate or the Closing Working Capital or the
calculations thereof and setting forth their calculation of such amount(s), and
(iii) the date on which all disputes relating to such statements and
calculations between the Parties are resolved in accordance
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with Section 3.6(c). If the Stockholder Representative delivers a notice of
disagreement pursuant to this Section 3.6(b), such notice shall specify those
items or amounts as to which they disagree.
(c) If the Stockholder Representative delivers a notice of disagreement
pursuant to Section 3.6(b), the Stockholder Representative and Parent shall,
during the 30 days following such delivery, use their reasonable efforts to
reach agreement on the disputed items or amounts (the "Disputed Amounts"). If,
during such period, the Stockholder Representative and Parent are unable to
reach such agreement, they shall promptly thereafter cause
PriceWaterhouseCoopers (or if said firm shall be unwilling to act thereunder,
such other independent public accountants of nationally recognized standing
reasonably satisfactory to Parent and the Stockholder Representative), promptly
to review this Agreement, the documents delivered pursuant to Section 3.6(a) and
any other documents necessary to calculate the Disputed Amounts (including all
work papers of the Parties used in calculating the Disputed Amounts). In making
such calculation, such independent accountants shall act as arbitrators. Such
independent accountants shall deliver to the Stockholder Representative and
Parent, as promptly as practicable and in any event no later than 90 days after
their engagement, a report setting forth such calculation. Such report shall be
final and binding upon the stockholders of Company and Parent, absent fraud, bad
faith, willful misconduct or manifest error in the preparation thereof. The cost
of such review and report shall be (i) deducted from either the InterCall Fund
or the ITC Operations Fund, as Parent may determine in its sole discretion, in
accordance with the terms of the Escrow Agreement, if the difference between the
Closing Working Capital shown in the independent accountants' calculation and
the Stockholder Representative's calculation of the Closing Working Capital
delivered pursuant to Section 3.6(b) is greater than the difference between the
Closing Working Capital shown in the independent accountants' calculation and
Parent's calculation of the Closing Working Capital delivered pursuant to
Section 3.6(a), (ii) borne by Parent if the difference between the Closing
Working Capital shown in the independent accountants' calculation and Parent's
calculation of the Closing Working Capital delivered pursuant to Section 3.6(a)
is greater than the difference between the Closing Working Capital shown in the
independent accountants' calculation and the Stockholder Representative's
calculation of the Closing Working Capital delivered pursuant to Section 3.6(b),
and (iii) otherwise borne equally by the stockholders of Company, through a
deduction from either the InterCall Fund or the ITC Operations Fund, as Parent
may determine in its sole discretion, in accordance with the terms of the Escrow
Agreement, and Parent.
(d) The independent accountants shall have jurisdiction to decide any and
all issues presented to it that arise out of or relate to this Section 3.6 or
the transactions contemplated hereby, including the issue of whether or not the
independent accountants have jurisdiction to decide any particular dispute
controversy or claim. The arbitration shall be held in Xxxx County, Georgia. The
governing Law shall be as set forth in Section 13.8 of this Agreement and the
parties' consent to the jurisdiction of the courts identified in Section 13.8 of
this Agreement for all purposes in connection with the arbitration, including
(i) enforcement of the arbitration award and (ii) issuance of provisional
remedies to protect rights, interests, assets or property, including but not
limited to temporary or preliminary injunctive relief, to ensure ultimate
satisfaction of the arbitration award. The parties agree that the award made by
the independent accountants shall be final and binding on the parties and that
they waive any right to appeal the arbitral award, to the extent an appeal may
be lawfully waived.
(e) The Stockholder Representative and Parent agree that they will, and
will cause their respective independent accountants and the Company Entities to,
cooperate and assist in the preparation of the Closing Balance Sheet and the
Closing Working Capital Certificate and in the conduct of the reviews referred
to in this Section 3.6, including, without limitation, making available, to the
extent necessary, relevant books, records, working papers, analyses and
schedules, and permitting representatives of the Parties to consult (in the
presence of a representative of the Company Entities) with the respective
employees, auditors, actuaries, attorneys and agents of the Company Entities.
The
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Stockholder Representative and Parent further agree that they will take
reasonable efforts to ensure that a representative of the Stockholder
Representative and Parent are present and permitted to participate in any and
all discussions involving the independent accountants relating to the Closing
Balance Sheet and the Closing Working Capital Certificates and a copy of all
information provided to the independent accountants by one Party is promptly
delivered to the other Party.
(f) Subject to Section 3.6(j), if the Closing Working Capital as determined
in accordance with this Section 3.6 is greater than the Estimated Working
Capital (as determined in accordance with Section 3.5 and as capped by Section
3.5(d), if applicable), then the Aggregate Cash Consideration payable by Parent
shall be increased by the amount of the excess, and Parent shall pay to the
Paying Agent such excess to be promptly distributed to the Company Stockholders
and option holders in the same manner as the Cash Merger Consideration and other
consideration was distributed pursuant to Sections 3.2, 3.4 and 4.1.
(g) Subject to Section 3.6(j), if the Closing Working Capital as determined
in accordance with this Section 3.6 is less than the Estimated Working Capital
(as determined in accordance with Section 3.5 and as capped by Section 3.5(d),
if applicable), then the amount of such deficiency shall be deducted from either
the InterCall Fund or the ITC Operations Fund, as Parent may determine in its
sole discretion, in accordance with the terms of the Escrow Agreement.
(h) Subject to Section 3.6(j), if the Closing Net Cash on Hand as
determined in accordance with this Section 3.6 is greater than the Estimated Net
Cash on Hand (as determined in accordance with Section 3.5 and as capped by
Section 3.5(f), if applicable), then the Aggregate Cash Consideration payable by
Parent shall be increased by the amount of the excess, and Parent shall pay to
the Paying Agent such excess to be promptly distributed to the Company
Stockholders and option holders in the same manner as the Cash Merger
Consideration and other consideration was distributed pursuant to Sections 3.2,
3.4 and 4.1.
(i) Subject to Section 3.6(j), if the Closing Net Cash on Hand as
determined in accordance with this Section 3.6 is less than the Estimated Net
Cash on Hand (as determined in accordance with Section 3.5 and as capped by
Section 3.5(f), if applicable), then the amount of such deficiency shall be
deducted from either the InterCall Fund or the ITC Operations Fund, as Parent
may determine in its sole discretion, in accordance with the terms of the Escrow
Agreement.
(j) If pursuant to this Section 3.6 there is both an increase to the
Aggregate Cash Consideration and an entitlement to a deduction from the
InterCall Fund or the ITC Operations Fund, Parent shall be entitled to offset
the amount of such deduction against the additional amount of Aggregate Cash
Consideration prior to the payment of the remaining portion, if any, of the
additional Aggregate Cash Consideration or making any deduction from the
InterCall Fund or the ITC Operations Fund, as the case may be, for the remaining
portion, if any.
3.7 Dissenting Stockholders.
(a) Notwithstanding anything in this Agreement to the contrary, but only in
the circumstances and to the extent provided by the DGCL, shares of Company
Common Stock that are outstanding immediately prior to the Effective Time and
that are held by Company stockholders who did not vote such shares in favor of
the Merger and who shall have properly and timely delivered to Company, as the
case may be, a written demand for appraisal of their shares of the Company
Common Stock in accordance with Section 262 of the DGCL ("Dissenting Shares")
shall not be converted into the right to receive, or be exchangeable for, the
Cash Merger Consideration. Instead, the holders thereof shall be entitled to
payment of the fair value of such shares in accordance with the provisions of
Section 262 of the DGCL;
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provided, however, that (i) if any holder of Dissenting Shares shall
subsequently withdraw its demand for payment of the fair value of such
Dissenting Shares, or (ii) if any holder fails to establish and perfect its
entitlement to the relief provided in Section 262 of the DGCL, the rights and
obligations of such holder to receive such fair value shall terminate, and such
Dissenting Shares shall thereupon be deemed to have been converted into the
right to receive, and to have become exchangeable for, as of the Effective Time,
the Cash Merger Consideration in accordance with Section 3.2 hereof.
(b) Within three (3) days prior to the Effective Time, Company shall give
Parent notice of any demands received by Company for appraisal of Dissenting
Shares. Prior to the Closing, Company shall control all negotiations and
proceedings with respect to such demands and on and after the Closing, Parent
shall exercise such control. Parent shall promptly pay to any holder of
Dissenting Shares any and all amounts due and owing to such holder as a result
of any settlement or determination by the Court of Chancery of the State of
Delaware with respect to such demands. If, as a result of any such settlement or
determination (i) any Company stockholder is entitled to receive as payment for
its Dissenting Shares an amount per share that exceeds the Accredited Merger
Consideration or the Non-Accredited Merger Consideration, as the case may be
(the aggregate amount of such excess for all Dissenting Shares the "Appraisal
Reduction Amount"), then the Appraisal Reduction Amount shall be deducted from
the ITC Operations Fund or the InterCall Fund, as Parent may determine in its
sole discretion, in accordance with the Escrow Agreement, or (ii) any Company
stockholder is entitled to receive an amount per share that is less than the
amount of the Accredited Merger Consideration or the Non-Accredited Merger
Consideration, as the case may be (the aggregate amount of such deficiency for
all Dissenting Shares, the "Appraisal Addition Amount"), then Parent shall
promptly deposit with the Escrow Agent the Appraisal Addition Amount, with such
amount to be treated as interest is treated on the Escrow Deposits in accordance
with the terms of the Escrow Agreement. Company shall comply with the notice
provisions of Section 262 of the DGCL.
(c) All of the costs and expenses incurred by the Parties in connection
with this Section 3.7 (but excluding the amounts due and owing to the holders of
Dissenting Shares under Section 3.7(b)) shall be paid by Company in cash prior
to the Closing Date and thereafter shall be deducted from the ITC Operations
Fund or the InterCall Fund, as Parent may determine in its sole discretion.
ARTICLE 4
PAYMENT OF MERGER CONSIDERATION
4.1 Payment Procedures.
(a) At the Effective Time, Parent shall wire in immediately available funds
to a paying agent selected by Company and approved by Parent, which approval
shall not be unreasonably withheld (the "Paying Agent"), for exchange in
accordance with this Section 4.1, the Aggregate Cash Consideration less the sum
of (A) the aggregate amount of the Escrow Deposits, and (B) the aggregate
amounts of the Promissory Notes. Promptly after the Effective Time, Parent and
the Stockholder Representative shall cause the Paying Agent to mail to each
holder of record of a certificate or certificates which represented shares of
Company Capital Stock immediately prior to the Effective Time (the
"Certificates") appropriate transmittal materials and instructions (which shall
specify that delivery shall be effected, and risk of loss and title to such
Certificates shall pass, only upon proper delivery of such Certificates, to the
Paying Agent). The Certificate or Certificates representing Company Capital
Stock so delivered shall be duly endorsed as the Paying Agent may require. In
the event of a transfer of ownership of shares of Company Capital Stock
represented by Certificates that are not registered in the transfer records of
Company, the Cash Merger Consideration provided in Section 3.2 may be issued to
a transferee if the Certificates representing such shares are delivered to the
Paying Agent, accompanied by all documents required to
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evidence such transfer and by evidence satisfactory to the Paying Agent that any
applicable stock transfer taxes have been paid. If any Certificate shall have
been lost, stolen, mislaid or destroyed, upon receipt of (i) an affidavit of
that fact from the holder claiming such Certificate to be lost, mislaid, stolen
or destroyed, (ii) such bond, security or indemnity as Parent and the Paying
Agent may reasonably require and (iii) any other documents necessary to evidence
and effect the bona fide exchange thereof, the Paying Agent shall deliver to
such holder the consideration into which the shares represented by such lost,
stolen, mislaid or destroyed Certificate shall have been converted. The Paying
Agent may establish such other reasonable and customary rules and procedures in
connection with its duties as it may deem appropriate. Parent shall pay all
charges and expenses, including those of the Paying Agent, in connection with
the distribution of the Cash Merger Consideration.
(b) After the Effective Time, each holder of shares of Company Capital
Stock (other than shares to be canceled pursuant to Section 3.3, and excluding
Dissenting Shares and excluding shares to be issued upon the exercise of Company
Options immediately prior to the Effective Time) issued and outstanding at the
Effective Time shall surrender the Certificate or Certificates representing such
shares to the Paying Agent and shall promptly upon surrender thereof receive in
exchange therefor the consideration provided in Section 3.2. Parent shall not be
obligated to deliver the consideration to which any former holder of Company
Capital Stock is entitled as a result of the Merger until such holder surrenders
such holder's Certificate or Certificates for exchange as provided in this
Section 4.1. Promptly after the Effective Time, the Paying Agent shall deliver
to the holders of Company Options the amounts due, if any, to such holders of
Company Options under Sections 3.4(b) and 3.4(c).
(c) Each of Parent, the Surviving Corporation and the Paying Agent shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Company Capital Stock such
amounts, if any, as it is required to deduct and withhold with respect to the
making of such payment under the Code or any provision of state, local or
foreign Tax Law. To the extent that any amounts are so withheld by Parent, the
Surviving Corporation or the Paying Agent, as the case may be, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Company Capital Stock in respect of which such
deduction and withholding was made by Parent, the Surviving Corporation or the
Paying Agent, as the case may be.
(d) Any other provision of this Agreement notwithstanding, none of Parent,
the Surviving Corporation or the Paying Agent shall be liable to a holder of
Company Capital Stock for any amounts paid or property delivered in good faith
to a public official pursuant to any applicable abandoned property, escheat or
similar Law.
4.2 Rights of Former Company Stockholders.
At the Effective Time, the stock transfer books of Company shall be closed
as to holders of Company Capital Stock immediately prior to the Effective Time
and no transfer of Company Capital Stock by any such holder shall thereafter be
made or recognized. Until surrendered for exchange in accordance with the
provisions of Section 4.1, each Certificate theretofore representing shares of
Company Capital Stock (other than shares to be canceled pursuant to Sections 3.3
and excluding Dissenting Shares) shall from and after the Effective Time
represent for all purposes only the right to receive the consideration provided
in Sections 3.2 in exchange therefor.
4.3 Escrow Fund.
At the Effective Time, Parent shall deposit with The Bank of New York, as
escrow agent under the Escrow Agreement, from the Aggregate Cash Consideration:
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(a) an amount of cash equal to $10,000,000 (the "InterCall Fund");
(b) an amount of cash equal to $4,500,000 (the "ITC Non-Operations Fund");
and
(c) an amount of cash equal to $12,500,000 (the "ITC Operations Fund" and,
together with the InterCall Fund and the ITC Non-Operations Fund, the "Escrow
Deposits").
Each of the amounts set forth in paragraphs (a), (b) and (c) above shall be
held, invested and disbursed in accordance with the terms and conditions of the
Escrow Agreement in substantially the form attached hereto as Exhibit 6 (the
"Escrow Agreement").
Article 5
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents and warrants on the date of this Agreement and
will on the Closing Date represent and warrant (other than representations and
warranties which address matters only as of a specified date, which shall speak
only as of such specified date) to Parent and Sub as follows:
5.1 Organization, Standing, and Power.
Company is a corporation duly incorporated, validly existing, and in good
standing under the Laws of the State of Delaware, and has the corporate power
and authority to carry on its business as now conducted and to own, lease and
operate its material Assets. Company is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for jurisdictions in which the failure to be so qualified or licensed would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. Section 5.1 of the Company Disclosure Memorandum sets
forth all jurisdictions in which Company is qualified to transact business as a
foreign corporation.
5.2 Authority of Company; No Breach By Agreement.
(a) Company has the corporate power and authority necessary to execute,
deliver, and, other than with respect to the Merger, perform this Agreement, and
with respect to the Merger, upon the adoption of this Agreement by Company's
stockholders in accordance with this Agreement and the DGCL, to perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated herein, including the Merger, have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of Company, subject to the adoption of this Agreement by the
holders of a majority of the outstanding shares of Company Common Stock and the
holders of two-thirds of the outstanding shares of Company Preferred Stock, as
contemplated by Section 8.1, which are the only stockholder votes required for
adoption of this Agreement and consummation of the Merger by Company. Subject to
such requisite stockholder approval, this Agreement represents a legal, valid,
and binding obligation of Company, enforceable against Company in accordance
with its terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
- 13 -
(b) Except as disclosed in Section 5.2(b) of the Company Disclosure
Memorandum, neither the execution and delivery of this Agreement by Company, nor
the consummation by Company of the transactions contemplated hereby (including,
without limitation, the setting up, the payment and the other operation of the
Escrow Deposits), nor compliance by Company with any of the provisions hereof,
will (i) conflict with or result in a breach of any provision of Company's
Certificate of Incorporation or Bylaws or the certificate or articles of
incorporation or bylaws or similar constitutive document of any Company
Subsidiary or any resolution adopted by the board of directors or the
stockholders of any Company Entity, or (ii) constitute or result in a Default
under, or require any Consent pursuant to, or result in the creation of any Lien
on any material Asset of any Company Entity under, any Company Contract or
Permit of any Company Entity, where such Default or Lien, or any failure to
obtain such Consent, is reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect, or, (iii) subject to receipt of
the requisite Consents referred to in Section 5.2(b) of the Company Disclosure
Memorandum, constitute or result in a Default under, or require any Consent
pursuant to, any Law or Order applicable to any Company Entity or any of their
respective material Assets.
(c) Other than Consents required from Regulatory Authorities set forth in
Section 5.2(c) of the Company Disclosure Memorandum, and other than notices to
or filings with the Internal Revenue Service ("IRS"), the Department of Labor or
the Pension Benefit Guaranty Corporation with respect to any employee benefit
plans, or under the HSR Act, no notice to, filing with, or Consent of, any
public body or authority or any other Person who is not party to or bound by a
Contract with Company or any Company Entity is necessary for the consummation by
Company of the Merger and the other transactions contemplated in this Agreement
(including, without limitation, the setting up, the payment and the other
operation of the Escrow Deposits), other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect.
5.3 Capital Stock.
The authorized capital stock of Company consists of 65,000,000 shares of
Company Common Stock and 3,000,000 shares of Company Preferred Stock. As of the
date of this Agreement, (i) 26,151,110 shares of Company Common Stock were
issued and outstanding, (ii) 8,591,724 shares of Company Common Stock were
reserved for issuance upon exercise of Company Options, (iii) 5,781,858 shares
of Company Common Stock were available for issuance upon exercise of Company
Options as set forth in Section 5.3 of the Company Disclosure Memorandum, and
(iv) 645,153 shares of Series A Convertible Preferred Stock and 133,664 shares
of Series B Convertible Preferred Stock were issued and outstanding. Except as
set forth above, as of the date of this Agreement, no shares of capital stock or
other voting securities of Company were issued, reserved for issuance or
outstanding. Immediately prior to the Effective Time (but after conversion of
any Company Preferred Stock that is to be converted immediately prior to the
Effective Time and after the exercise of any Company Options that are to be
exercised immediately prior to the Effective Time) assuming that (A) all shares
of Company Preferred Stock will be converted into shares of Company Common
Stock, (B) all holders of Company Options will exercise their Company Options
for cash, and (C) no Company Options are cancelled, (i) 35,048,236 shares of
Company Common Stock will be issued and outstanding, (ii) 2,809,866 shares of
Company Common Stock will be reserved for issuance upon exercise of outstanding
Company Options, (iii) 0 shares of Company Common Stock will be available for
issuance upon exercise of Company Options, and (iv) 0 shares of Company Series A
Convertible Preferred Stock and 0 shares of Company Series B Convertible
Preferred Stock will be issued and outstanding. Except as set forth above, and
except for shares issued upon the exercise of Company Options set forth in
Section 5.3 of the Company Disclosure Memorandum, as of the date of this
Agreement and as of the Effective Time, no shares of capital stock or other
voting securities of Company were or will be issued, reserved for issuance or
outstanding. All of the issued and outstanding shares of Company Capital Stock
are, and all shares of Company Capital Stock
- 14 -
which may be issued will be, when issued, duly authorized, validly issued, fully
paid and nonassessable under the DGCL and not subject to preemptive rights.
Except as set forth in Section 5.3 of the Company Disclosure Memorandum, there
are no bonds, debentures, notes or other indebtedness of Company having the
right to vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which the stockholders of Company or any of its
Subsidiaries may vote. Except as set forth above or in Section 5.3 of the
Company Disclosure Memorandum, there are no and there will be no Equity Rights
of any kind to which Company or any Company Subsidiary is a party or by which
any of them is bound obligating Company or any Company Subsidiary to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other voting securities of Company or any Company Subsidiary or
obligating Company or any Company Subsidiary to issue, grant, extend or enter
into any Equity Rights obligating Company or any Company Subsidiary to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other voting securities of Company or any Company Subsidiary.
Except as set forth in Section 5.3 of the Company Disclosure Memorandum, there
are no outstanding contractual obligations (contingent or otherwise) of Company
or any Company Subsidiary to repurchase, redeem or otherwise acquire any capital
stock or other voting securities of Company or any Company Subsidiary. As of the
date of this Agreement, there are and, as of the Closing Date, there will be, no
dividends or other distributions owing to the stockholders of Company or any of
its Subsidiaries which have not been paid by Company or such Subsidiaries in
full.
5.4 Company Subsidiaries.
(a) Each Company Subsidiary is a corporation, and each such Subsidiary is
duly organized, validly existing, and is in good standing under the Laws of the
jurisdiction in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its material
Assets and to carry on its business as now conducted. Each Company Subsidiary is
duly qualified or licensed to transact business as a foreign entity in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for jurisdictions in which the failure to be
so qualified or licensed would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect. Section 5.4 of the
Company Disclosure Memorandum sets forth all jurisdictions in which each Company
Subsidiary is qualified to transact business as a foreign corporation. Company
has no Subsidiaries other than those set forth in Section 5.4 of the Company
Disclosure Memorandum. Company or one of its Subsidiaries owns the amount of the
issued and outstanding shares of capital stock (or other equity interests) of
each Subsidiary as set forth in Section 5.4 of the Company Disclosure Memorandum
and such shares are the sole outstanding shares of capital stock of such
Subsidiaries. No capital stock (or other equity interests) of any Company
Subsidiary is or may become required to be issued (other than to another Company
Entity) by reason of any Equity Rights, and there are no Contracts by which any
Company Subsidiary is bound to issue (other than to another Company Entity)
additional shares of its capital stock (or other equity interests) or Equity
Rights or by which any Company Entity is or may be bound to transfer any shares
of the capital stock (or other equity interests) of any Company Subsidiary
(other than to another Company Entity). There are no Contracts relating to the
rights of any Company Entity to vote or to dispose of any shares of the capital
stock (or other equity interests) of any Company Subsidiary. No Company
Subsidiary is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of the capital stock of any Company
Subsidiary. All of the shares of capital stock (or other equity interests) of
each Company Subsidiary held by a Company Entity are fully paid and
nonassessable under the applicable Law of the jurisdiction in which such
Subsidiary is incorporated or organized and are owned by the Company Entity free
and clear of any Lien.
(b) Legal Connect Limited, a Company Subsidiary organized under the laws of
the United Kingdom, has neither conducted any operations nor generated any
revenue since its formation. ITC Wireless has neither conducted any operations
nor generated any revenues since its formation.
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5.5 Financial Statements.
(a) Company has heretofore made available to Parent true and complete
copies of the Company Financial Statements. Except as set forth in Section
5.5(a) of the Company Disclosure Memorandum, each of the Company Financial
Statements (including, in each case, any related notes) (i) was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements),
(ii) fairly presents in all material respects the consolidated financial
position of Company and the Company Subsidiaries as at the respective dates and
the consolidated results of operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not expected to
be material in amount or effect, and (iii) are complete, correct and in
accordance with the books of account and records of Company.
(b) Company has heretofore made available to Parent true and complete
copies of the Company Pro-Forma Financial Statements. Except as set forth in
Section 5.5(a) of the Company Disclosure Memorandum, each of the Company
Pro-Forma Financial Statements (including, in each case, any related notes) (i)
was prepared in accordance with GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes to such financial
statements), (ii)fairly presents in all material respects the consolidated
financial position of Company and the Company Subsidiaries on a pro-forma basis
as at the respective dates and the consolidated results of operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount or effect, and (iii)
are complete, correct and in accordance with the books of account and records of
Company on a pro-forma basis.
(c) Company has heretofore made available to Parent true and complete
copies of the InterCall Financial Statements. Except as set forth in Section
5.5(a) of the Company Disclosure Memorandum, each of the InterCall Financial
Statements (including, in each case, any related notes) (i) was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements),
(ii) fairly presents in all material respects the consolidated financial
position of the InterCall Business as at the respective dates and the
consolidated results of operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not expected to
be material in amount or effect, and (iii) are complete, correct and in
accordance with the books of account and records of InterCall.
5.6 Absence of Undisclosed Liabilities.
Except as set forth in Section 5.6 of the Company Disclosure Memorandum, no
Company Entity has any Liabilities required under GAAP to be set forth or
provided for on the consolidated balance sheet or in the notes of Company as of
December 31, 2002 (the "2002 Balance Sheet") that would reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect,
except Liabilities which are (i) accrued or reserved against in the 2002 Balance
Sheet, included in the Company Financial Statements delivered prior to the date
of this Agreement or reflected in the notes thereto or (ii) incurred in the
ordinary course of business consistent with past practices since December 31,
2002. Except as shown on the 2002 Balance Sheet or as set forth in Section 5.6
of the Company Disclosure Memorandum, no Company Entity is directly or
indirectly liable upon or with respect to (by discount, repurchase agreements or
otherwise), or obligated in any other way to provide funds in respect of, or to
guarantee or assume, any debt, obligation or dividend of any Person.
- 16 -
5.7 Absence of Certain Changes or Events.
(a) Except as set forth in Section 5.7(a) of the Company Disclosure
Memorandum, since December 31, 2002, there has not been:
(i) any event, change, condition or circumstance that has had or would
reasonably be expected to have a Company Material Adverse Effect;
(ii) any material loss, damage, destruction or other casualty to the
Assets or properties of the Company Entities taken as a whole (other than
any for which insurance awards have been received or guaranteed);
(iii) any change in any method of accounting or accounting practice of
any Company Entity; or
(iv) any loss of the employment, services or benefits of any key
employee of any Company Entity, other than Company or ITC Services.
(b) Since December 31, 2002, each Company Entity has operated in the
ordinary course of its business consistent with past practice and, except as set
forth in Section 5.7(b) of the Company Disclosure Memorandum, has not:
(i) incurred any material Liability, except in the ordinary course of
business consistent with past practice;
(ii) failed to discharge or satisfy any Lien or pay or satisfy any
Liability when due and payable, other than Liabilities being contested in
good faith and for which adequate reserves have been provided and other
than Liens arising in the ordinary course of business that do not,
individually or in the aggregate, interfere with the use or operation of
any of such Assets;
(iii) mortgaged, pledged or subjected to any Lien any of their
respective material Assets, properties or rights, except for mechanics'
liens and Liens for Taxes not yet due and payable and except for Liens
arising in the ordinary course of business that do not, individually or in
the aggregate, interfere with the use or operation of any of such Assets;
(iv) sold or transferred any of their Assets or canceled any debts or
claims, except in the ordinary course of business consistent with past
practice;
(v) disposed of any patents, trademarks or copyrights or any patent,
trademark or copyright applications or registrations;
(vi) defaulted on any material obligation;
(vii) entered into any transaction material to its respective
business, except in the ordinary course of business consistent with past
practice;
(viii) written off as uncollectible any Material Accounts Receivable
or any portion thereof not reflected in the 2002 Balance Sheet;
- 17 -
(ix) granted any increase in the compensation or benefits of its
employees, other than increases in accordance with past practice not
exceeding 5%, or entered into any employment or severance agreement or
arrangement with any of them;
(x) made, in excess of $25,000, any capital expenditure or additions
to property, plant and equipment used in its operations other than ordinary
repairs and maintenance;
(xi) laid off any of their employees, other than employees of Company
or ITC Services;
(xii) discontinued the offering of any services or product;
(xiii)incurred any obligation or liability for the payment of
severance benefits;
(xiv) declared, paid, or set aside for payment any dividend or other
distribution in respect of shares of capital stock, membership interests or
other securities, or redeemed, purchased or otherwise acquired, directly or
indirectly, any shares of capital stock, membership interests or other
securities, or agreed to do so;
(xv) transferred any Liability of (A) Knology, Inc., (B) ITC DeltaCom,
Inc., (C) PRE Solutions, Inc., (D) xXxxxxxxXxxxx.xxx, Inc., or (E)
Surebridge, Inc to Company or any Company Entity; or
(xvi) entered into any agreement or made any commitment to do any of
the foregoing.
5.8 Tax Matters.
Except as set forth in Section 5.8 of the Company Disclosure Memorandum:
(a) All Company Entities have timely filed with the appropriate Taxing
authorities all Tax Returns in all jurisdictions in which Tax Returns are
required to be filed, and such Tax Returns are correct and complete in all
material respects. No Company Entity is the beneficiary of any extension of time
within which to file any Tax Return. All Taxes of the Company Entities (whether
or not shown on any Tax Return) have been fully and timely paid. There are no
Liens for any Taxes on any of the Assets of any of the Company Entities.
(b) None of the Company Entities has received any notice of assessment or
proposed assessment in connection with any Taxes, and, to the knowledge of
Company, there are no threatened or pending disputes, claims, audits or
examinations regarding any Taxes of any Company Entity or the Assets of any
Company Entity. No officer or employee responsible for Tax matters of any
Company Entity expects any Regulatory Authority to assess any additional Taxes
for any period for which Tax Returns have been filed. None of the Company
Entities has waived or extended any statute of limitations in respect of any
Taxes or agreed to a Tax assessment or deficiency.
(c) Each Company Entity has complied in all material respects with all
applicable Laws, rules and regulations relating to the withholding of Taxes and
the payment thereof to appropriate authorities, including Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee
or independent contractor, and Taxes required to be withheld and paid pursuant
to Sections 1441 and 1442 of the Code or similar provisions under foreign Law.
- 18 -
(d) None of the Company Entities has made any payments, is obligated to
make any payments, or is a party to any contract that could obligate it to make
any payments that could be disallowed as a deduction under Section 280G or
162(m) of the Code.
(e) None of the Company Entities has been a United States real property
holding corporation within the meaning of Section 897(c)(1)(A)(ii) of the Code.
None of the Company Entities has been or will be required to include any
adjustment in taxable income for any Tax period (or portion thereof) pursuant to
Section 481 of the Code or any comparable provision under state or foreign Tax
Laws as a result of transactions or events occurring prior to the Closing.
(f) Each of the Company Entities is in compliance with, and its records
contain all information and documents (including properly completed IRS Forms
W-9) necessary to comply with, all applicable information reporting and Tax
withholding requirements under federal, state, and local Tax Laws, and such
records identify with specificity all accounts subject to backup withholding
under Section 3406 of the Code, except for such instances of noncompliance and
such omissions as are not reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect.
(g) Any liability of the Company Entities for Taxes not yet due and
payable, or which are being contested in good faith, has been accrued on the
Company's Financial Statements in accordance with GAAP.
(h) None of the Company Entities is a party to any agreement, whether
written or unwritten, providing for the payment of Taxes, payment for Tax
losses, entitlements to refunds or similar Tax matters.
(i) None of the Company Entities has deferred gain or loss arising from any
intercompany transactions, within the meaning of Treasury Regulations ss.
1.1502-13, excluding any deferred intercompany gains that result from the Stock
Dispositions.
(j) None of the Company Entities has distributed stock of another Person,
or has had stock distributed by another Person, in a transaction that was
purported or intended to be governed in whole or in part by Section 355 of the
Code.
(k) No excess loss account (within the meaning of Treasury Regulations ss.
1.1502-19) exists with respect to the Company Entities.
(l) As of the date of the execution of this Agreement, ITC Service
Company's basis in its stock in Surebridge, Inc. is an amount that is equal to
or greater than the amount set forth in Section 5.8(l) of the Disclosure
Memorandum.
(m) As of December 31, 2002, ITC Service Company's basis in its stock in
xXxxxxxxXxxxx.xxx, Inc. was an amount that is equal to or greater than the
amount set forth in Section 5.8(m) of the Disclosure Memorandum.
(n) As of the date of the execution of this Agreement, ITC Telecom Ventures
Inc.'s basis in its stock in Knology, Inc. is an amount that is equal to or
greater than the amount set forth in Section 5.8(n) of the Disclosure
Memorandum.
(o) As of the date of the execution of this Agreement, ITC Telecom Ventures
Inc.'s basis in its stock in ITC Deltacom, Inc. is an amount that is equal to or
greater than the amount set forth in Section 5.8(o) of the Disclosure
Memorandum.
- 19 -
(p) As of December 31, 2002, ITC Telecom Ventures, Inc.'s basis in its
stock in PRE Solutions, Inc. was an amount equal to or greater than the amount
set forth in Section 5.8(p) of the Disclosure Memorandum.
5.9 Assets.
(a) Except as set forth in Section 5.9(a) of the Company Disclosure
Memorandum, the Company Entities have good and marketable title, free and clear
of all Liens, to all of the material Assets which they purport to own or which
are reflected in their books and records and in the 2002 Balance Sheet, except
for such Liens or other defects of title which, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect. All tangible properties used in the businesses of the Company Entities
are in good condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with Company's past practices.
(b) Except as set forth in Section 5.9(b) of the Company Disclosure
Memorandum, all Assets which are material to Company's business on a
consolidated basis, held under leases or subleases by any of the Company
Entities, are held under valid Contracts enforceable in accordance with their
respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought) and
binding on such Company Entity, and to the Knowledge of Company, each such
Contract is in full force and effect.
(c) Except as set forth in Section 5.9(c) of the Company Disclosure
Memorandum, the Assets owned or leased by the Company Entities constitute all of
the assets, properties and rights used by the Company Entities to conduct the
business of the Company Entities as currently conducted.
5.10 Intellectual Property.
(a) The Company Entities own all right, title and interest in and to the
Company Intellectual Property, or have valid and enforceable licenses to use the
Licensed Intellectual Property, which together represents all intellectual
property rights necessary to the conduct of their businesses as currently
conducted. The Company Entities are in material compliance with contractual
obligations relating to the protection of the Licensed Intellectual Property. To
the Knowledge of Company, there are no conflicts with or infringements of any
Company Intellectual Property by any Person. To the Knowledge of Company, the
conduct of the businesses of the Company Entities as such businesses are
currently conducted does not infringe the Intellectual Property or other
proprietary right of any Person. Except as set forth in Section 5.10(a) of the
Company Disclosure Memorandum, no proceedings have been instituted, or are
pending or, to the Knowledge of Company, threatened, which challenge the rights
of any Company Entity with respect to the Company Intellectual Property or the
Licensed Intellectual Property, nor has any Person claimed or alleged any rights
to the Company Intellectual Property.
(b) Section 5.10(b) of the Company Disclosure Memorandum sets forth a
current and complete list of all registrations of or applications for
registration of Company Intellectual Property (including patents and domain
names), ("Listed Intellectual Property"), the relevant jurisdiction and, with
respect to U.S. registrations and applications, the date of application or
issuance and record owners as to each. Except as described in Section 5.10(b) of
the Company Disclosure Memorandum, all Listed Intellectual Property is owned by
a Company Entity, free and clear of all Liens. Except as set forth in Section
5.10(b) of the Company Disclosure Memorandum, all Listed Intellectual Property
is valid, subsisting, unexpired, in proper form, enforceable and owned in the
name of a Company Entity, and all renewal fees and other
- 20 -
maintenance fees that have fallen due on or prior to the date of this Agreement
have been paid. Except as set forth in Section 5.10(b) of the Company Disclosure
Memorandum, no Listed Intellectual Property is the subject of any proceeding
before any governmental, registration or other authority in any jurisdiction,
including any office action or other form of preliminary or final refusal of
registration. The consummation of the transactions contemplated hereby will not
alter or impair the rights of any Company Entity in any Company Intellectual
Property or Licensed Intellectual Property.
(c) Section 5.10(c) of the Company Disclosure Memorandum sets forth a
complete list of all material agreements of Company or any Company Entity
relating to the Licensed Intellectual Property and the Company Intellectual
Property. Except as set forth in Section 5.10(c) of the Company Disclosure
Memorandum, no Company Entity is under any obligation to pay royalties or other
payments in connection with any material agreement relating to the Licensed
Intellectual Property or restricted from assigning its rights respecting Company
Intellectual Property or Licensed Intellectual Property, and no Company Entity
will be, as a result of the execution and delivery of this Agreement or the
performance of such Company Entity's obligations under this Agreement, in breach
of any material agreement relating to the Company Intellectual Property or the
Licensed Intellectual Property.
(d) No Person, including, without limitation, any present or former
employee, officer or director of any Company Entity, or agent or outside
contractor of any Company Entity, holds any right, title or interest, directly
or indirectly, in whole or in part, in or to any Company Intellectual Property.
(e) The Company Entities have taken commercially reasonable steps to
protect their trade secrets.
5.11 Environmental Matters.
(a) Each of the Company Entities is and has been in compliance in all
respects with all Environmental Laws in connection with the ownership, use,
maintenance and operation of the Operating Property and otherwise in connection
with the conduct of its business, except for violations which are not reasonably
likely to have, individually or in the aggregate, a Company Material Adverse
Effect.
(b) Except as set forth in Section 5.11(b) of the Company Disclosure
Memorandum, none of the Company Entities has any material Liability under any
Environmental Law.
(c) Except as set forth in Section 5.11(c) of the Company Disclosure
Memorandum, no request for information, notice, governmental agency inquiry,
demand letter, notice of violation or alleged violation of, non-compliance or
alleged non-compliance with or any Liability under any Environmental Law has
been received by or, to the Knowledge of Company, threatened against any of the
Company Entities.
(d) There are no Orders outstanding, or any administrative, civil or
criminal actions, suits, proceedings or investigations pending or, to the
Knowledge of Company, threatened against any of the Company Entities relating to
compliance with or Liability under any Environmental Law.
(e) Each of the Company Entities has obtained or applied for all Permits
required under any Environmental Law for the conduct of its business or the
ownership or use of the Operating Property, including without limitation any
improvements or equipment located thereon.
(f) Except as identified in Section 5.11 of the Company Disclosure
Memorandum, there has been no Release of any Hazardous Material on, from or
affecting or potentially affecting the Operating
- 21 -
Property, except such as is not reasonably likely to have, individually or in
the aggregate, a Company Material Adverse Effect.
(g) Neither the Operating Property nor any property formerly owned or
operated by any of the Company Entities, during the period of any Company
Entity's ownership or operation thereof, has ever been the subject of any
generation, accumulation, storage, handling, transportation or disposal of any
Hazardous Material.
(h) None of the Company Entities has disposed of, transported, or arranged
for the disposal or transportation of any Hazardous Material to any offsite
location.
(i) Company has made available to Parent with complete copies of all
existing reports, studies, memoranda, correspondence, and similar documents that
relate to (i) environmental conditions at the Operating Property and any
formerly owned or operated property, and (ii) the Company Entities' compliance
with and actual or potential liability under Environmental Laws.
5.12 Compliance with Laws.
(a) Section 5.12(a) of the Company Disclosure Memorandum sets forth a true
and complete list of all material Permits of each Company Entity, and all
pending applications therefor.
(b) Each Company Entity has in effect all material Permits necessary for it
to own, lease, or operate its material Assets and to carry on its business as
now conducted, and there has occurred no Default under any such Permit and, to
the Knowledge of Company, no factor, condition or circumstance exists and no
event or change has occurred that would reasonably be expected to result in a
Default under any such Permit.
(c) Except as set forth in Section 5.12(c) of the Company Disclosure
Memorandum, none of the Company Entities:
(i) is or has ever been in Default under any of the provisions of its
Certificate of Incorporation or Bylaws (or other governing instruments);
(ii) is or has ever been in Default under any Laws (including, without
limitation, the Securities Act and the Exchange Act), Orders, or Permits
applicable to it, its business or its employees conducting its business, except
for Defaults which are not reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect; or
(iii) since January 1, 2000, has received any notification or
communication from any agency or department of foreign, federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting that
any Company Entity is not, or may not be, in compliance with any Laws or Orders,
where such noncompliance is reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect, (ii) threatening to revoke any
Permits, the revocation of which is reasonably likely to have, individually or
in the aggregate, a Company Material Adverse Effect, or (iii) requiring any
Company Entity to enter into or consent to the issuance of a cease and desist
order, injunction, formal agreement, directive, commitment, or memorandum of
understanding, or to adopt any board resolution or similar undertaking, which
restricts materially the conduct of its business.
Except as set forth in Section 5.12 of the Company Disclosure Memorandum,
the consummation of the transactions contemplated by this Agreement will not
result in the termination or suspension of any Permit of any Company Entity.
- 22 -
5.13 Labor Relations.
(a) No Company Entity is the subject of any Litigation, or to the Knowledge
of Company, threatened Litigation, asserting that it or any other Company Entity
has committed an unfair labor practice (within the meaning of the National Labor
Relations Act or comparable state Law) or other violation of state or federal
labor Law or seeking to compel it or any other Company Entity to bargain with
any labor organization or other employee representative as to wages or
conditions of employment, nor is any Company Entity party to any collective
bargaining agreement or subject to any bargaining order, injunction or other
Order relating to any Company Entity's relationship or dealings with its
employees, any labor organization or any other employee representative. There is
no strike, slowdown, lockout or other job action or labor dispute involving any
Company Entity pending or threatened and there have been no such actions or
disputes since January 1, 2000. To the Knowledge of Company, since January 1,
2000, there has not been any attempt by any Company Entity employees or any
labor organization or other employee representative to organize or certify a
collective bargaining unit or to engage in any other union organization activity
with respect to the workforce of any Company Entity.
(b) To the Knowledge of Company, all of the employees employed in the
United States are either United States citizens or are legally entitled to work
in the United States under the Immigration Reform and Control Act of 1986, as
amended, other United States immigration Laws and the Laws related to the
employment of non-United States citizens applicable in the state in which the
employees are employed.
5.14 Employee Benefit Plans.
(a) Company has delivered or made available to Parent prior to the
execution of this Agreement, copies of each Employee Benefit Plan currently
adopted, maintained by, sponsored in whole or in part by, or contributed to by
any Company Entity thereof for the benefit of employees, former employees,
retirees, dependents, spouses, directors, independent contractors, or other
beneficiaries or under which employees, retirees, former employees, dependents,
spouses, directors, independent contractors, or other beneficiaries are eligible
to participate (collectively, the "Company Benefit Plans"). No Company Benefit
Plan is subject to Code Section 412.
(b) Company has delivered or made available to Parent prior to the
execution of this Agreement, a copy of (i) the most recent annual reports on
Form 5500 filed with the IRS for each Company Benefit Plan, including any
actuarial and auditor reports required to be filed with the annual reports, (ii)
the most recent plan documents and related trust documents, adoption agreements,
and all amendments thereto for each such Company Benefit Plan, including, in the
case of any Company Benefit Plan not set forth in writing, a written description
thereof, (iii) the most recent summary plan descriptions for each Company
Benefit Plan, (iv) the most recent favorable IRS determination letter, and (v)
the most recent funding and service agreements and most current insurance
policies or contracts with respect to each Company Benefit Plan.
(c) Neither any Company Entity nor any ERISA Affiliate currently has, or
has had, any material obligation or liability, contingent or otherwise, under
Title IV of ERISA or Section 412 of the Code. No Company Benefit Plan is a
"multiemployer plan," as defined in Section 3(37) of ERISA (a "Multiemployer
Plan"), or a plan that has two or more contribution sponsors at least two of
whom are not under common control, within the meaning of Section 4063 of ERISA
(a "Multiple Employer Plan"), nor has any Company Entity or any ERISA Affiliate
at any time contributed to or been obligated to contribute to any Multiemployer
Plan or Multiple Employer Plan.
- 23 -
(d) Each Company Benefit Plan is in material compliance with the terms of
such Company Benefit Plan and in material compliance with any applicable
requirements of the Code and ERISA (including rules and regulations thereunder).
Each Company Benefit Plan that is intended to be qualified under Section 401(a)
of the Code has received a favorable determination letter from the IRS or,
within the time permitted under Section 401(b) of the Code, has timely applied
for a favorable determination letter. Company is not aware of any circumstances
likely to result in revocation of any such favorable determination letter.
Company has not received any communication from any government agency
questioning or challenging the compliance of any Company Benefit Plan with
applicable Laws. No Company Benefit Plan is currently being audited by a
governmental agency for compliance with applicable Laws or has been audited with
a determination by the governmental agency that the Company Benefit Plan failed
to comply with applicable Laws.
(e) To the Knowledge of Company, no "party in interest" (as defined in
ERISA Section 3(14)) or "disqualified person" (as defined in Section 4975(e)(2)
of the Code) with respect to any Company Benefit Plan has engaged in any
nonexempt "prohibited transaction" (described in Section 4975(c) of the Code or
ERISA Section 406). All contributions or premium payments required to be made
under the terms of any Company Benefit Plan have been timely made, and all
contributions for any period ending on or before the Closing Date which are not
yet due will have been paid or accrued prior to the Closing Date. There are no
unresolved claims or disputes under the terms of, or in connection with, any
Company Benefit Plan other than claims for benefits which are payable in the
ordinary course of business.
(f) No Company Entity has any Liability for retiree health and life
benefits under any of the Company Benefit Plans except to the extent required
under Part 6 of Title I of ERISA or Section 4980B of the Code. No Tax under
Sections 4980B or 5000 of the Code has been incurred with respect to any Company
Benefit Plan and no circumstance exists that would give rise to such Taxes.
(g) Except as set forth on Section 5.14(g) of the Company Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of any Company Entity
from any Company Entity under any Company Benefit Plan or otherwise, (ii)
increase any benefits otherwise payable under any Company Benefit Plan, (iii)
result in any acceleration of the time of payment or vesting of any such
benefit, or (iv) result in any payment that will not be deductible under Section
280G of the Code.
(h) The treatment of the Company Options as set forth in Section 3.4 shall
have been effected prior to the Effective Time in compliance with the terms of
the Company Option Plans.
5.15 Material Contracts.
Except for such Contracts as are terminable by any Company Entity without
payment of any penalty or fine on not more than three months notice and those
Contracts that are listed in Section 5.15 of the Company Disclosure Memorandum,
none of the Company Entities, nor any of their respective Assets, businesses, or
operations, is a party to, or is bound or affected by, or receives benefits
under, (i) any employment, severance, termination, consulting, or retirement
Contract providing for aggregate payments to any Person in any calendar year in
excess of $100,000, (ii) any Contract relating to the borrowing of money by any
Company Entity or the guarantee by any Company Entity of any such obligation
(other than Contracts evidencing trade payables and Contracts relating to
borrowings or guarantees made in the ordinary course of business), (iii) any
Contract involving payments to or from any Company Entity in any calendar year
in excess of $200,000, (iv) any Contract which materially prohibits or
materially restricts any Company Entity from engaging in any business activities
in any geographic area, line of business or otherwise in competition with any
other Person, (v) any joint venture, partnership or limited liability
- 24 -
company agreement (other than any such agreement entered into in connection with
an investment made in the ordinary course of business), (vi) any Contract
limiting or restricting the ability of any of the Company Entities to make
distributions in respect of any of the shares of their capital stock, or (vii)
any Contract to make a capital expenditure (as defined in GAAP and which in no
event shall include investments purchased in the ordinary course of business) in
excess of $100,000 (together with all Contracts referred to in Section Error!
Reference source not found., the "Company Contracts"). With respect to each
Company Contract: (A) the Contract is in full force and effect; (B) no Company
Entity is in Default thereunder; (C) no Company Entity has repudiated or waived
any material provision of any such Contract; and (D) no other party to any such
Contract is, to the Knowledge of Company, in Default in any respect or has
repudiated or waived any material provision thereunder. Company has made
available to Parent or its Representatives true and complete originals or copies
of all of the Company Contracts.
5.16 Legal Proceedings.
Section 5.16 of the Company Disclosure Memorandum sets forth a list and
summary description of the Litigation pending, or to the Knowledge of Company,
threatened, by or against any Company Entity. There is no Litigation instituted
or pending, or, to the Knowledge of Company, threatened against any Company
Entity that would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. No Company Entity nor any of their
respective Assets, properties or rights is subject to any Order, nor is any
Company Entity party to any written agreement, consent agreement or memorandum
of understanding with, or party to any commitment letter or similar undertaking
to, any Regulatory Authority that materially restricts the conduct of its
business or that would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
5.17 Reports.
Except as disclosed in Section 5.17 of the Company Disclosure Memorandum,
since January 1, 2000 or the date of organization if later, each Company Entity
has timely filed all reports and statements, together with any amendments
required to be made with respect thereto, that it was required to file with
Regulatory Authorities. As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied in all material respects with all applicable Laws. As of its respective
date, each such report and document 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 made therein, in light of the circumstances
under which they were made, not misleading.
5.18 Statements True and Correct.
(a) None of the information supplied or to be supplied by any Company
Entity or any Affiliate thereof for inclusion in the Proxy Statement to be
mailed to Company's stockholders in connection with the Stockholders' Meeting,
and any other documents to be filed by a Company Entity or any Affiliate thereof
with any Regulatory Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed, and with respect
to the Proxy Statement, when first mailed to the stockholders of Company, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case of the
Proxy Statement or any amendment thereof or supplement thereto, at the time of
the Stockholders' Meeting, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to correct any statement in
any earlier communication with respect to the solicitation of any proxy for the
Stockholders' Meeting.
(b) All documents that any Company Entity or any Affiliate thereof is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form
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in all material respects with the provisions of applicable Law. None of the
representations, warranties or statements of Company contained in this
Agreement, or in the exhibits hereto, contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make any
of such representations, warranties or statements in light of the circumstances
under which they were made not misleading.
5.19 State Takeover Laws.
Each Company Entity has taken all necessary action to exempt the
transactions contemplated by this Agreement from any applicable "moratorium,"
"fair price," "business combination," "control share," or other anti-takeover
Laws of their jurisdiction of incorporation or organization (collectively,
"Takeover Laws"). This Agreement and the Merger are not subject to the
restrictions contained in Section 203 of the DGCL.
5.20 Charter Provisions.
Each Company Entity has taken all action so that the entering into of this
Agreement and the consummation of the Merger and the other transactions
contemplated by this Agreement do not and will not result in the grant of any
preemptive or similar rights to any Person under the Certificate of
Incorporation, Bylaws or other governing instruments of any Company Entity or
restrict or impair the ability of Parent or any of its Subsidiaries to vote, or
otherwise to exercise the rights of a stockholder with respect to, shares of any
Company Entity that may be directly or indirectly acquired or controlled by
them.
5.21 Stockholders' Voting Agreements.
Each of the holders of outstanding shares of Company Common Stock and
Company Preferred Stock identified in Section 5.21 of the Company Disclosure
Memorandum has executed and delivered to Parent a Voting Agreement. Section 5.21
of the Company Disclosure Memorandum sets forth as of the date of execution of
this Agreement the number of shares of Company Common Stock owned by each such
stockholder and the aggregate percentage ownership of Company Common Stock
subject to the Voting Agreements.
5.22 Board Recommendation.
The Board of Directors of Company, at a meeting duly called and held, has
by unanimous vote of the directors present resolved to recommend that the
holders of the shares of Company Capital Stock give the Company Stockholder
Approval.
5.23 Interests in Real Property.
(a) Section 5.23(a) of the Company Disclosure Memorandum sets forth a true
and complete list of all real properties owned by the Company Entities (the
"Owned Real Property"). Section 5.23(a) of the Company Disclosure Memorandum
sets forth (i) the street address and use description of each Owned Real
Property, (ii) the name of the entity which holds the interest in each Owned
Real Property (each, an "Owner" and, collectively, the "Owners"), and (iii) the
approximate square footage of each Owned Real Property. Except as disclosed in
Section 5.23(a) of the Company Disclosure Memorandum, the Owners own good,
marketable and insurable fee simple title to each of the Owned Real Property and
such interests are not subject to any Liens. Except as disclosed in Section
5.23(a) of the Company Disclosure Memorandum, none of the Owned Real Property is
subject to any lease, sublease, license or other
- 26 -
agreement granting to any person any right to the use, occupancy or enjoyment
thereof (or any portion thereof).
(i) Company has made available to Parent all plans, specifications
and architectural drawings and all warranties relating to the
Owned Real Property or the buildings, structures, improvements,
equipment, facilities, plants and fixtures comprising, situated
at or located thereon, to the extent in Company's possession.
(ii) All Owned Real Property includes all utilities and rights of
access to public roads, streets or the like or valid easements
over private streets, roads or other private property for such
ingress to and egress from the Real Property, except as would not
materially impair the ability to use any such Real Property as
presently conducted.
(b) Section 5.23(b) of the Company Disclosure Memorandum sets forth a true
and complete list of all real properties leased or subleased by each Company
Entity (the "Leased Real Property" and, together with the Owned Real Property,
collectively, the "Real Property"). Section 5.23(b) of the Company Disclosure
Memorandum sets forth (i) the street address and use description of each Leased
Real Property, (ii) the name of the entity which holds the interest in each
Leased Real Property (each, a "Lessee" and, collectively, the "Lessees"), (iii)
the approximate square footage of each Leased Real Property.
(c) Other than the Real Property Leases, no Company Entity (or their
subsidiaries) is a party to any lease, sublease, license or other agreement
granting to any Person any right to the use, occupancy or enjoyment of real
property.
(d) Except as disclosed in Section 5.23(d) of the Company Disclosure
Memorandum, to the Knowledge of Company, there does not exist under any Real
Property Leases any Default by any party thereto.
(e) Except as disclosed in Section 5.23(e) of the Company Disclosure
Memorandum, no Company Entity has subleased, licensed or granted other interests
giving any Person any right to the use, occupancy or enjoyment of the Leased
Real Property or any portion thereof.
(f) Except as disclosed in Section 5.23(f) of the Company Disclosure
Memorandum, the Lessees' interests with respect to the Real Property Leases have
not been assigned or pledged and such interests are not subject to any Liens.
(g) Company has made available to Parent a copy of each Real Property Lease
or other written evidence of the obligations, and all amendments thereto, as
listed in Section 5.23(b) of the Company Disclosure Memorandum.
(h) Except as identified in Section 5.23(h) of the Company Disclosure
Memorandum, the indirect transfer of the Real Property to Parent (or to a
designee of Parent), as contemplated by this Agreement, does not require the
consent or approval of any other party. No Owner or Lessee is a party to or
obligated under any option, right of first refusal or other contractual right to
sell, dispose of or lease any of the Real Property or any portion thereof or
interest therein to any Person (other than pursuant to this Agreement).
(i) Except as set forth in Section 5.23(i) of the Company Disclosure
Memorandum, neither Company nor any Owner or Lessee has any Knowledge of (nor
has it received written notice of) any existing, pending or threatened: (i)
condemnation of any part of the Real Property; (ii) special assessments against
any part of the Real Property; (iii) litigation against Company or any Owner or
- 27 -
Lessee for breach of any restrictive covenant or other agreement affecting any
part of the Real Property; or (iv) discontinuation of sewer, water, electric,
gas, telephone or other utilities or services presently provided or available to
the Real Property.
(j) Except as set forth in Section 5.23(j) of the Company Disclosure
Memorandum, all brokerage commissions and other compensation and fees payable by
reason of the Leased Real Property, have been paid in full except for such
commissions and other compensation related to options or extensions in the Real
Property Leases which are not yet exercised.
5.24 Transactions with Affiliates.
Except as set forth in Section 5.24 of the Company Disclosure Memorandum,
no Company Entity is a party to any oral or written agreement, arrangement or
understanding with any of its Affiliates under which it: (a) leases any Real
Property or personal property (either to or from such Person); (b) licenses
technology (either to or from such Person); (c) is obligated to purchase any
tangible or intangible asset from or sell such asset to such Person; (d)
purchases products or services from such Person; (e) pays or receives salaries,
bonuses, commissions, rebates or other payments; (f) has any Liability as a
guarantor or debtor or otherwise, or (g) provides, receives, is entitled to
provide or receive or has any other right (under common law or otherwise) to any
other material benefit. Except as set forth in Section 5.24 of the Company
Disclosure Memorandum, no Affiliate of any Company Entity owns or has any rights
in or to any of the Assets, properties or rights used by the Company Entities in
the ordinary course of their respective businesses.
5.25 No Brokers.
Except as set forth in Section 5.25 of the Company Disclosure Memorandum,
no broker, finder or similar intermediary has acted for or on behalf of, or is
entitled to any broker's, finder's or similar fee or other commission from any
of the Company Entities or any of their respective Affiliates in connection with
this Agreement or any related agreement or the transactions contemplated hereby
or thereby.
5.26 Investment Company.
Neither Company nor InterCall is an "investment company" under the
Investment Company Act of 1940, as amended, or is a company controlled by an
investment company. As of the Effective Time, neither Company nor InterCall will
be an "investment company" under the Investment Company Act of 1940, as amended,
or will be a company controlled by an investment company.
5.27 Customers.
Section 5.27 of the Company Disclosure Memorandum sets forth a complete and
correct list of the fifty (50) largest customers of the InterCall Business as
measured by InterCall's consolidated revenues during the fiscal year ended
December 31, 2002 and from such date to January 31, 2003 (the "Significant
Customers"), and the aggregate gross revenues generated from each such
Significant Customer for each such period. Except as set forth in Section 5.27
of the Company Disclosure Memorandum, to Company's Knowledge, as of the date of
the execution of this Agreement, (a) neither InterCall nor any of the InterCall
Operating Subsidiaries is engaged in any dispute in excess of $10,000 with any
Significant Customer, (b) no Significant Customer has proposed in writing, or
orally to any of the individuals set forth in Section 13.1 of the Company
Disclosure Memorandum, to terminate or to exercise its option not to renew its
Contract with InterCall or any of the InterCall Operating Subsidiaries, and (c)
no Significant Customer has given InterCall or any of the InterCall Operating
Subsidiaries written notice that it is subject to any bankruptcy, insolvency or
similar proceeding.
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5.28 Solvency
Each of the Company Entities: (i) is able to pay its debts generally as
they become due and is solvent, (ii) does not intend to incur debts prior to the
Effective Time that will be beyond its ability to pay as such debts mature, and
(iii) is not subject to any case or other proceeding under any bankruptcy,
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar Law of any jurisdiction relating to such
Company Entity.
5.29 Insurance
(a) Section 5.29(a) of the Company Disclosure Memorandum lists all policies
of title, liability (including, without limitation, directors' and officers'
liability), fire, casualty, business interruption, workers' compensation and
other forms of insurance insuring Company, the Company Subsidiaries and their
respective assets, properties, operations and employees (collectively, the
"Company Insurance Policies"). Company has furnished or made available to Parent
a true, complete and accurate copy of each of the Company Insurance Policies.
Except as set forth in Section 5.29(a) of the Company Disclosure Memorandum, all
of the Company Insurance Policies and bonds are in full force and effect and
will not be terminated by reason of the consummation of the transactions
contemplated by this Agreement. Neither Company nor any Company Subsidiary is in
material default under any provisions of any Company Insurance Policy, nor has
Company or any Subsidiary received written notice of cancellation of any such
Company Insurance Company. No claim under any Company directors' and officers'
liability insurance policy has been made prior to the date of the execution of
this Agreement, and to the knowledge of Company, no facts exist that would
reasonably be likely to give rise to any claim under any such policy.
(b) Section 5.29(b) of the Company Disclosure Memorandum lists all
indemnification agreements between any of the Company Entities and their
respective officers, directors and employees (collectively, the "Company
Indemnification Agreements"). Company has furnished or made available to Parent
a true, complete and accurate copy of each of the Company Indemnification
Agreements.
5.30 Fairness Opinions
(a) The Board of Directors of Company received an opinion of Credit Suisse
First Boston, financial advisor to Company, dated the date of the execution of
this Agreement, to the effect that the Aggregate Cash Consideration is fair,
from a financial point of view, to the holders of the Company Common Stock.
(b) The Special Committee of the Board of Directors of Company has received
an opinion from SunTrust Xxxxxxxx Xxxxxxxx, financial advisor to Company, dated
March 27, 2003, in connection with the Stock Dispositions.
Article 6
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub hereby jointly and severally represent and warrant to
Company as follows:
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6.1 Organization, Standing, and Power.
Parent is a corporation duly incorporated, validly existing, and in good
standing under the Laws of the State of Delaware, and has the corporate power
and authority to carry on its business as now conducted and to own, lease and
operate its material Assets. Parent is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for jurisdictions in which the failure to be so qualified or licensed would not
reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect.
6.2 Authority; No Breach By Agreement.
(a) Parent has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Parent. This Agreement
represents a legal, valid, and binding obligation of Parent, enforceable against
Parent in accordance with its terms (except in all cases as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
receivership, conservatorship, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by Parent, nor the
consummation by Parent of the transactions contemplated hereby, nor compliance
by Parent with any of the provisions hereof, will (i) conflict with or result in
a breach of any provision of Parent's Certificate of Incorporation or Bylaws, or
(ii) constitute or result in a Default under, or require any Consent pursuant
to, or result in the creation of any Lien on any Asset of any Parent Entity
under, any Contract or Permit of any Parent Entity where such Default or Lien,
or any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Parent Material Adverse Effect, or, (iii)
subject to receipt of the requisite consents referred to in Section 6.2(b) of
the Parent Disclosure Memorandum, constitute or result in a Default under, or
require any Consent pursuant to, any Law or Order applicable to any Parent
Entity or any of their respective material Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and the rules
of the Nasdaq, and other than Consents required from Regulatory Authorities set
forth in Section 6.2(c) of the Parent Disclosure Memorandum, and other than
notices to or filings with the IRS, the Department of Labor or the Pension
Benefit Guaranty Corporation with respect to any employee benefit plans, or
under the HSR Act, no notice to, filing with, or Consent of, any public body or
authority or any other Person is necessary for the consummation by Parent or Sub
of the Merger and the other transactions contemplated in this Agreement, other
than Consents, filings, or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a Parent Material
Adverse Effect.
6.3 SEC Filings; Financial Statements.
(a) Parent has timely filed and made available to Company all SEC Documents
required to be filed by Parent since January 1, 2000 (together with all such SEC
Documents filed, whether or not required to be filed, the "Parent SEC Reports").
The Parent SEC Reports (i) at the time filed, complied in all material respects
with the applicable requirements of the Securities Laws and other applicable
Laws and (ii) did not, at the time they were filed (or, if amended or superseded
by a filing prior to the date of
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this Agreement, then on the date of such filing or, in the case of registration
statements, at the effective date thereof), contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such
Parent SEC Reports or necessary in order to make the statements in such Parent
SEC Reports, in light of the circumstances under which they were made, not
misleading.
(b) Each of the Parent Financial Statements (including, in each case, any
related notes) contained in the Parent SEC Reports, including any Parent SEC
Reports filed after the date of this Agreement until the Effective Time,
complied as to form in all material respects with the applicable published rules
and regulations of the SEC with respect thereto, was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes to such financial statements or, in the case of
unaudited interim statements, as permitted by Form 10-Q of the SEC), and fairly
presented in all material respects the consolidated financial position of Parent
and its Subsidiaries as at the respective dates and the consolidated results of
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be material in amount
or effect.
6.4 Absence of Certain Changes or Events.
Since December 31, 2002, except as disclosed in (i) the Parent SEC
Documents or (ii) the Parent Financial Statements delivered prior to the date of
this Agreement, there have been no events, changes or occurrences, which have
had, individually or in the aggregate, a Parent Material Adverse Effect.
6.5 Compliance with Laws.
None of the Parent Entities:
(a) is in Default under its Certificate of Incorporation or Bylaws (or
other governing instruments); or
(b) is in Default under any Laws, Orders or Permits applicable to its
business or employees conducting its business, except for Defaults which are not
reasonably likely to have, individually or in the aggregate, a Parent Material
Adverse Effect; or
(c) since January 1, 2000, has received any notification or communication
from any agency or department of foreign, federal, state, or local government or
any Regulatory Authority or the staff thereof (i) asserting that any Parent
Entity is not, or may not be, in compliance with any Laws or Orders, where such
noncompliance is reasonably likely to have, individually or in the aggregate, a
Parent Material Adverse Effect, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Parent Material Adverse Effect, or (iii) requiring any Parent
Entity to enter into or consent to the issuance of a cease and desist order,
formal agreement, directive, commitment or memorandum of understanding, or to
adopt any board resolution or similar undertaking, which restricts materially
the conduct of its business.
6.6 Legal Proceedings.
Except as disclosed in the Parent SEC Documents, there is no Litigation
instituted or pending, or, to the Knowledge of Parent, threatened against any
Parent Entity that is reasonably likely to have, individually or in the
aggregate, a Parent Material Adverse Effect.
- 31 -
6.7 Statements True and Correct.
(a) None of the information supplied or to be supplied by any Parent Entity
or any Affiliate thereof for inclusion in the Proxy Statement to be mailed to
Company's stockholders in connection with the Stockholders' Meeting, and any
document to be filed by any Parent Entity or any Affiliate thereof with the SEC
or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed, and
with respect to the Proxy Statement, when first mailed to the stockholders of
Company, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or, in the case of
the Proxy Statement or any amendment thereof or supplement thereto, at the time
of the Stockholders' Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Stockholders' Meeting.
(b) All documents that any Parent Entity or any Affiliate thereof is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material respects
with the provisions of applicable Law.
6.8 Authority of Sub.
Sub is a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of Delaware as a wholly owned Subsidiary of
Parent. The authorized capital stock of Sub shall consist of 100 shares of Sub
Common Stock, all of which are validly issued and outstanding, fully paid and
nonassessable and is owned by Parent free and clear of any Lien. Sub has the
corporate power and authority necessary to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein, including the Merger, have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of Sub. This Agreement represents a legal, valid, and
binding obligation of Sub, enforceable against Sub in accordance with its terms
(except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar Laws affecting
the enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding may be brought).
Parent, as the sole stockholder of Sub, will vote prior to the Effective Time
the shares of Sub Common Stock in favor of approval of this Agreement, as and to
the extent required by applicable Law.
6.9 Financing.
Parent has received and executed a commitment letter dated as of the date
hereof from the third party lender set forth in Section 6.9 of the Parent
Disclosure Memorandum (the "Lender") (the "Commitment Letter"), pursuant to
which the Lender has committed, subject to the terms and conditions set forth
therein, to provide to Parent debt financing in the amount more particularly
described in Section 6.9 of the Parent Disclosure Memorandum. True and complete
copies of the Commitment Letter and related documents have been attached to
Section 6.9 of the Parent Disclosure Memorandum. The Commitment Letter is in
full force and effect, all commitment fees required to be paid thereunder have
been paid in full or will be duly paid in full when due, and no event has
occurred which (with or without notice, lapse of time or both) would constitute
a default thereunder on the part of Parent or Sub, as the case may be. The
Commitment Letter has been obtained, subject to the terms and conditions
thereof, to finance the acquisition of Company as contemplated in this
Agreement, to pay certain costs, fees and expenses in connection with such
transaction, to refinance certain existing debt of Parent and Company, to pay
any fees and expenses in connection with the senior secured debt financing and
to provide for the
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working capital and general corporate requirements of Parent and Parent Entities
(such financing, the "Financing").
6.10 No Broker.
Except as set forth in Section 6.10 of the Parent Disclosure Memorandum, no
broker, finder or similar intermediary has acted for or on behalf of, or is
entitled to any broker's, finder's or similar fee or other commission from
Parent, Sub or any of their respective Affiliates in connection with this
Agreement or any related agreement or the transactions contemplated hereby or
thereby.
6.11 Solvency.
Each of Parent and Sub is able to pay its debts generally as they become
due and is solvent and will not be, nor will the Surviving Corporation be, from
and after the Effective Time, rendered insolvent as a result of the transactions
contemplated hereby. Parent, Sub, and from and after the Effective Time,
Surviving Corporation, on a consolidated basis, are not engaged nor currently
contemplate being engaged in a business or transaction for which any property
remaining with them would be insufficient to continue to operate their
businesses or to pay their debts generally as they come due.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Covenants of Company.
From the date of this Agreement until the earlier of the Effective Time or
the termination of this Agreement, unless the prior written consent of Parent
shall have been obtained, and except as otherwise expressly contemplated herein,
including in connection with the Asset Dispositions in accordance with Section
8.10, Company shall, and shall cause each of its Subsidiaries to, (A) operate
InterCall and the InterCall Operating Subsidiaries only in the usual, regular
and ordinary course of business consistent with past practice, (B) preserve
intact the business organization of InterCall and the InterCall Operating
Subsidiaries, (C) take no action which would (1) adversely affect the ability of
any Party to obtain any Consents required for the transactions contemplated
hereby, or (2) adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement, and (D) not authorize, do or
agree or commit to do any of the following:
(a) amend the Certificate of Incorporation, Bylaws or other governing
instruments of any Company Entity; or
(b) except as disclosed in Section 7.1(b) of the Company Disclosure
Memorandum, incur any debt obligation or other obligation for borrowed money
(other than indebtedness of a Company Entity to another Company Entity) in
excess of an aggregate of $100,000 (for the Company Entities on a consolidated
basis), except in the ordinary course of the business consistent with past
practice, or impose, or suffer the imposition, on any material Asset of any
Company Entity of any Lien or permit any such Lien to exist (other than in
connection with Liens in effect as of the date hereof); or
(c) except as disclosed in Section 7.1(c) of the Company Disclosure
Memorandum or as contemplated in Section Error! Reference source not found.,
repurchase, redeem, or otherwise acquire or exchange (other than exchanges in
the ordinary course under employee benefit plans), directly or indirectly, any
shares, or any securities convertible into any shares, of the capital stock of
any Company Entity, or declare or pay any dividend or make any other
distribution in respect of Company Capital Stock; or
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(d) except for this Agreement, pursuant to the exercise of stock options
outstanding as of the date hereof and pursuant to the terms thereof in existence
on the date hereof, as contemplated in Section 8.10 or as disclosed in Section
7.1(d) of the Company Disclosure Memorandum, issue, sell, pledge, encumber,
authorize the issuance of, enter into any Contract to issue, sell, pledge,
encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of Company Capital Stock or any other capital
stock of any Company Entity, or any stock appreciation rights, or any option,
warrant, or other Equity Right; or
(e) except as disclosed in Section 7.1(e) of the Company Disclosure
Memorandum or as contemplated in Section Error! Reference source not found.,
adjust, split, combine or reclassify any capital stock of any Company Entity or
issue or authorize the issuance of any other securities in respect of or in
substitution for shares of Company Capital Stock, or sell, lease, mortgage or
otherwise dispose of or otherwise encumber (i) any shares of capital stock of
any Company Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another Company Entity) or (ii) any Assets for reasonable and
adequate consideration which exceeds $50,000 individually or $100,000 in the
aggregate; or
(f) except for purchases of U.S. Treasury securities or U.S. Government
agency securities, which in either case have maturities of sixty (60) days or
less, except as contemplated in Section 8.10 and except as disclosed in Section
7.1(f) of the Company Disclosure Memorandum, purchase any securities or make any
investment, either by purchase of stock of securities, contributions to capital,
Asset transfers, or purchase of any Assets, in any Person other than a wholly
owned Company Subsidiary, or otherwise acquire direct or indirect control over
any Person; or
(g) except as disclosed in Section 7.1(g) of the Company Disclosure
Memorandum, grant any increase in compensation or benefits to the employees or
officers of any Company Entity, except with respect to any employee who earned
less than $150,000 in the calendar year ended December 31 immediately preceding
the date of this Agreement in accordance and consistent with past practice (but
in any event not exceeding 5% of such person's compensation and benefits) or as
required by Law; pay any severance or termination pay or any bonus other than
pursuant to written policies or written Contracts in effect on the date of this
Agreement and disclosed in Section 7.1(g) of the Company Disclosure Memorandum;
and enter into or amend any severance agreements with officers of any Company
Entity; grant any material increase in fees or other increases in compensation
or other benefits to directors of any Company Entity except in accordance with
past practice or waive any stock repurchase rights, accelerate, amend or change
the period of exercisability of any Equity Rights or restricted stock, or
reprice Equity Rights granted under the Company Stock Plan or authorize cash
payments in exchange for any Equity Rights; or
(h) enter into or amend any employment Contract between any Company Entity
and any Person having a salary thereunder in excess of $75,000 per year (unless
such amendment is required by Law) that the Company Entity does not have the
unconditional right to terminate without Liability (other than Liability for
services already rendered), at any time on or after the Effective Time; or
(i) except as disclosed in Section 7.1(i) of the Company Disclosure
Memorandum, adopt any new employee benefit plan of any Company Entity or
terminate or withdraw from, or make any material change in or to, any existing
employee benefit plans of any Company Entity other than any such change that is
required by Law or that, in the opinion of counsel, is necessary or advisable to
maintain the tax qualified status of any such plan, or make any distributions
from such employee benefit plans, except as required by Law, the terms of such
plans or consistent with past practice; or
(j) except as disclosed in Section 7.1(j) of the Company Disclosure
Memorandum, make any material change in any Tax or accounting methods or systems
of internal accounting controls or make any
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Tax election, except as may be appropriate to conform to changes in Tax Laws or
regulatory accounting requirements or GAAP; or
(k) permit any tax sharing agreement or similar arrangement with respect to
Taxes involving any Company Entity included within the affiliated group within
the meaning of Section 1504(a) of the Code of which Company is the common parent
to remain effective after the Closing Date, such that, after the Closing Date,
no Company Entity shall have any obligation under any such agreement or
arrangement for any past, present or future taxable period; or
(l) sell, transfer, dispose, abandon or otherwise encumber any Company
Intellectual Property unless such abandonment otherwise occurs in the usual,
regular and ordinary course of business consistent with past practice; or
(m) except as set forth in Section 7.1(m) of the Company Disclosure
Memorandum, settle or compromise any claims or litigation involving payments by
any Company Entity of $50,000 or more in any single instance or related
instances, or that otherwise are material to the conduct of the business of any
Company Entity (it being understood that any such settlement or compromise shall
not provide for any equitable or injunctive relief) or, except in the ordinary
and usual course of business, modify, amend or terminate any of its material
Contracts or waive, release or assign any material rights or claims; or
(n) permit any insurance policy naming it as a beneficiary or a loss payee
to be cancelled or terminated without notice to Parent, except in the ordinary
and usual course of business; or
(o) enter into or amend any Company Indemnification Agreement; or
(p) renew the agreement set forth in Section 7.1(p) of the Company
Disclosure Memorandum.
Notwithstanding the foregoing, the Company Entities may terminate any of
the employees of Company and ITC Service Company.
7.2 Covenants of Parent.
From the date of this Agreement until the earlier of (i) the Effective Time
or (ii) the termination of this Agreement, unless the prior written consent of
Company shall have been obtained, and except as otherwise expressly contemplated
herein, Parent covenants and agrees that it shall (A) take no action which would
(1) adversely affect the ability of any Party to obtain any Consents required
for the transactions contemplated hereby, (2) adversely affect the ability of
any Party to perform its respective covenants and agreements under this
Agreement, or (3) materially impair its ability to consummate the Financing, or
(B) not enter into an agreement or take any other action the result of which
would materially delay the consummation of the Merger.
7.3 Adverse Changes in Condition.
Each Party agrees to give written notice promptly to the other Party upon
becoming aware of the occurrence or impending occurrence of any event or
circumstance relating to it or any of its Subsidiaries which (i) would have,
individually or in the aggregate, a Company Material Adverse Effect or a Parent
Material Adverse Effect, as applicable, or (ii) would cause or constitute a
material breach of any of its representations, warranties, or covenants
contained herein, and to use its commercially reasonable efforts to prevent or
promptly to remedy the same.
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7.4 Reports.
Each Party and its Subsidiaries shall file all reports required to be filed
by it with Regulatory Authorities between the date of this Agreement and the
Effective Time and shall deliver to the other Party copies of all such material
reports promptly after the same are filed.
7.5 Credit Facility.
The Company shall obtain on or before two (2) days prior to the Closing
Date a payoff letter (the "Payoff Letter") from Wachovia Bank, N.A., as agent
(the "Agent") under that certain Credit Agreement for up to $100,000,000 with
First Union National Bank, Bank of America, N.A., and Cobank, AEB, dated April
26, 2000, as amended November 3, 2000, April 29, 2001, February 13, 2002, March
12, 2002, June 25, 2002 and June 28, 2002 (the "Credit Facility")) pursuant to
which the Agent will provide the dollar amount of principal and estimated
interest and fees required to be paid to the Agent for its benefits and the
benefit of the lenders under the Credit Facility in order to fully pay off the
Credit Facility and terminate the Credit Agreement and release any and all Liens
thereunder.
Article 8
ADDITIONAL AGREEMENTS
8.1 Proxy Statement; Stockholder Approval.
(a) In connection with the Stockholders' Meeting, Company shall, as soon as
practicable following the date of this Agreement, but in no event later than
fifteen (15) days following the date of this Agreement, prepare and mail a Proxy
Statement to Company's stockholders, and Parent and Sub shall furnish to Company
all information concerning them that Company may reasonably request in
connection with such Proxy Statement. The Proxy Statement shall include the
fairness opinion referred to in Section 5.30(b).
(b) Company shall duly call, give notice of, convene and hold a
Stockholders' Meeting, to be held as soon as reasonably practicable after the
date hereof, for the purpose of voting upon approval of this Agreement and the
Stock Dispositions ("Company Stockholder Approval") and such other related
matters as it deems appropriate and shall, subject to the provisions of
Section 8.1(c), through its Board of Directors, recommend to its stockholders
the adoption of this Agreement and use its reasonable efforts to obtain the
Company Stockholder Approval. It is the intention of Company to have its
stockholders' meeting on the same day as the Closing.
(c) Neither the Board of Directors of Company, nor any committee thereof
shall withdraw, qualify or modify, or propose publicly to withdraw, qualify or
modify, in a manner adverse to Parent, the approval of such Board of Directors
or such committee of this Agreement or the Merger or the recommendation of such
Board of Directors to Company stockholders that they give the Company
Stockholder Approval; provided, that the Board of Directors of Company shall be
permitted to (i) not recommend to Company stockholders that they give the
Company Stockholder Approval or (ii) withdraw, qualify or modify, or propose
publicly to withdraw, qualify or modify, in a manner adverse to Parent, the
recommendation of such Board of Directors to Company stockholders that they give
the Company Stockholder Approval (in each case, a "Company Subsequent
Determination"), only (A) if the Board of Directors of Company by a majority
vote determines in its good faith judgment that it is necessary to do so to
comply with its fiduciary duties to Company stockholders under applicable Law,
after receiving the advice of outside legal counsel, and (B) if Company and its
officers and directors have complied in all
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respects with their obligations set forth in Section 8.2 in connection with its
receipt of all Acquisition Proposals.
8.2 Other Offers, Etc.
(a) Neither any Company Entity nor any of its Affiliates or Representatives
shall, directly or indirectly (i) solicit, initiate, encourage, induce or
otherwise facilitate any inquiry or the making, submission, offer or
announcement of any Acquisition Proposal or any proposal which would reasonably
be expected to lead to any Acquisition Proposal, (ii) participate in any
discussions or negotiations regarding, or furnish to any Person or "Group" (as
such term is defined in Section 13(d) under the Exchange Act) any nonpublic
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes or may reasonably be
expected to lead to, any Acquisition Proposal, (iii) approve, endorse or
recommend any Acquisition Proposal, or (iv) enter into any agreement
contemplating or otherwise relating to any Acquisition Transaction; provided
however, that this Section 8.2(a) shall not prohibit a Company Entity from
furnishing nonpublic information regarding any Company Entity to, or entering
into a confidentiality agreement or discussions or negotiations with, any Person
or Group in response to a bona fide unsolicited written Acquisition Proposal
submitted by such Person or Group (and not withdrawn) if (A) no Company Entity
or Representative or Affiliate thereof shall have violated any of the
restrictions set forth in this Section 8.2, (B) the Board of Directors of
Company determines in its good faith judgment that such Acquisition Proposal may
constitute a Superior Proposal, (C) (1) at least three business days prior to
furnishing any such nonpublic information to, or entering into discussions or
negotiations with, such Person or Group, Company gives Parent written notice of
the identity of such Person or Group, the material terms of such Acquisition
Proposal and of Company's intention to furnish nonpublic information to, or
enter into discussions or negotiations with, such Person or Group, and (2) prior
to providing any non-public information or data to any such Person or Group,
Company has received from such Person or Group an executed confidentiality
agreement containing terms no less favorable to the disclosing party than the
terms of the Confidentiality Agreement, and (D) contemporaneously with
furnishing any such nonpublic information to such Person or Group, Company
furnishes such nonpublic information to Parent (to the extent such nonpublic
information has not been previously made available by Company to Parent).
Company shall keep Parent informed, on a prompt basis, of the status and
material terms of any proposals or offers referred to in this Section 8.2(a) and
the status and material terms of any discussions or negotiations referred to
herein.
(b) Each of the Company Entities shall, and shall cause its Affiliates to,
immediately cease any and all existing activities, discussions or negotiations
with any Persons conducted heretofore with respect to any Acquisition Proposal.
Without limiting the foregoing, it is agreed that any violation of the
restrictions set forth in this Section 8.2, by any Affiliate or Representative
of any Company Entity shall be deemed to be a breach of this Section 8.2 by
Company.
8.3 Antitrust Notification; Consents of Regulatory Authorities.
(a) Each of the Parties (i) will, as promptly as practicable after the date
of this Agreement, make an appropriate filing of a Notification and Report Form
with the United States antitrust enforcement authorities, the Federal Trade
Commission ("FTC") and the United States Department of Justice ("DOJ"), pursuant
to the HSR Act (and make such other filings and responses as may be required
under state Laws or under Laws in foreign jurisdictions governing antitrust or
merger control matters) with respect to the transactions contemplated hereby,
(ii) will promptly file any supplemental or additional information and
documentary materials which may be requested in connection therewith by
Regulatory Authorities, (iii) will comply in all material respects with all
other requirements of the HSR Act, the Xxxxxxx Act, as amended, the Xxxxxxx Act,
as amended, the Federal Trade Commission Act, as amended, and any other
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federal, state or foreign Law or Order designed to protect competition
(collectively, "Antitrust Laws"), and (iv) will take all other actions necessary
to cause the expiration or termination of the applicable waiting periods under
the Antitrust Laws as soon as practicable. Each Party shall use its reasonable
efforts to resolve objections, if any, which may be asserted with respect to the
Merger under the Antitrust Laws. In the event any Litigation is threatened or
instituted challenging the Merger as violative of Antitrust Laws, each Party
shall use its reasonable efforts to avoid the filing of, or resist or resolve
such Litigation. Each Party shall use its reasonable efforts to take such action
as may be required by: (i) the DOJ and/or the FTC in order to resolve such
objections as either of them may have to the Merger under the Antitrust Laws, or
(ii) any federal or state court of the United States, or similar court of
competent jurisdiction in any foreign jurisdiction, in any suit brought by any
Regulatory Authority or any other Person challenging the Merger as violative of
the Antitrust Laws, in order to avoid the entry of any Order (whether temporary,
preliminary or permanent) which has the effect of preventing the consummation of
the Merger and to have vacated, lifted, reversed or overturned any such Order.
Parent shall be entitled to direct any proceedings or negotiations with any
Regulatory Authority relating to any of the foregoing, provided that it shall
afford Company a reasonable opportunity to participate therein.
(b) The Parties hereto shall cooperate with each other and use their
reasonable efforts to promptly prepare and file all necessary documentation, to
effect all applications, notices, petitions and filings (which shall include the
filings pursuant to subsection (a) above), and to obtain as promptly as
practicable all Consents of all Regulatory Authorities and other Persons which
are necessary or advisable to consummate the transactions contemplated by this
Agreement (including the Merger). The Parties agree that they will consult with
each other with respect to the obtaining of all Consents of all Regulatory
Authorities and other Persons necessary or advisable to consummate the
transactions contemplated by this Agreement and each Party will keep the other
apprised of the status of matters relating to consummation of the transactions
contemplated herein. Each Party also shall promptly advise the other upon
receiving any communication from any Regulatory Authority whose Consent is
required for consummation of the transactions contemplated by this Agreement
which causes such Party to believe that there is a reasonable likelihood that
any requisite Consent will not be obtained or that the receipt of any such
Consent will be materially delayed.
8.4 Filing with State Office.
Upon the terms and subject to the conditions of this Agreement, Company
shall execute and file the Certificate of Merger with the Secretary of State of
the State of Delaware in connection with the Closing.
8.5 Agreement as to Efforts to Consummate.
(a) Subject to the terms and conditions of this Agreement, each Party
agrees to use, and to cause its Subsidiaries to use, its reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper, or advisable under applicable Laws to consummate and
make effective, as soon as reasonably practicable after the date of this
Agreement, the transactions contemplated by this Agreement, including using its
reasonable efforts to lift or rescind any Order adversely affecting its ability
to consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article 9; provided, that nothing herein shall
preclude either Party from exercising its rights under this Agreement.
(b) Neither Parent nor Sub shall, without the prior written consent of the
Company, take any action to amend, terminate or rescind the Commitment Letter in
any manner that would reasonably be expected to decrease the likelihood that the
Financing will be obtained at Closing and each shall use their commercially
reasonable efforts to satisfy the terms and conditions set forth in the
Commitment Letter on
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or before the termination of this Agreement; provided, however, that this
Section 8.5(b) shall not restrict Parent's ability to reasonably withhold its
consent under the Commitment Letter in respect of pricing matters related to the
Financing.
8.6 Investigation and Confidentiality.
(a) Prior to the Effective Time, each Party shall keep the other Party
advised of all material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause to
be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations. Notwithstanding the preceding sentence,
Parent shall not be required to provide disclosure to Company if such disclosure
violates, or could reasonably be expected to violate, applicable securities
laws. No investigation by a Party shall affect the ability of such Party to rely
on the representations and warranties of the other Party.
(b) In addition to the Parties' respective obligations under the
Confidentiality Agreement, which is hereby reaffirmed and adopted, and
incorporated by reference herein, each Party shall, and shall cause its
Representatives to, maintain the confidentiality of all confidential information
made available to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Effective Time, each Party shall promptly return or certify the destruction of
all documents and copies thereof, and all work papers containing confidential
information received from the other Party.
(c) Each Party agrees to give the other Party notice as soon as practicable
after any determination by it of any fact or occurrence relating to the other
Party which it has discovered through the course of its investigation and which
represents, or would represent, either a material breach of any representation,
warranty, covenant or agreement of the other Party or which has had or would
have a Company Material Adverse Effect or a Parent Material Adverse Effect, as
applicable.
8.7 Press Releases.
Prior to the Effective Time, Company and Parent shall consult with each
other as to the form and substance of any press release or other public
disclosure materially related to this Agreement or any other transaction
contemplated hereby; provided, that nothing in this Section 8.7 shall be deemed
to prohibit any Party from making any disclosure which its counsel deems
necessary or advisable in order to satisfy such Party's disclosure obligations
imposed by Law.
8.8 Employee Benefits and Contracts.
(a) Prior to or effective upon the Closing, Company shall adopt a severance
plan for employees of InterCall in substantially the form attached to Section
8.8 of the Company Disclosure Memorandum (the "InterCall Severance Plan").
Following the adoption of the InterCall Severance Plan, Company and Parent shall
cooperate in the "roll out" of the InterCall Severance Plan, including the
development and delivery of appropriate employee communications associated with
such plan. Prior to the Closing, Company shall take all actions necessary and
required to amend Company's 401(k) plan to provide one hundred percent (100%)
vesting of all Company contributions previously allocated to each active
participant under such plan. Following the Effective Time, Parent shall provide
generally to officers and employees of the Company Entities who are or become
employed by InterCall or any of their respective Subsidiaries on or following
the Closing (the "Transferred Employees") employee benefits under
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employee benefit plans (other than stock option or other plans involving the
potential issuance of Parent Common Stock), on terms and conditions which, when
taken as a whole, are substantially similar to those currently provided by the
Parent Entities to their similarly-situated officers and employees; provided,
that, for a period of twelve (12) months after the Effective Time, Parent shall
provide to Transferred Employees severance benefits in accordance with either
(i) the InterCall Severance Plan, or (ii) the policies of Parent, whichever of
(i) or (ii) will provide the greater benefit to the officer or employee;
provided further, that Parent shall be entitled to continue providing
Transferred Employees employee benefits on the terms and conditions that were
provided by Company and any Company Entity immediately prior to the Effective
Time until such time as Parent's first open enrollment under its benefit plans
which shall be no later than nine (9) months following the Effective Time.
(b) For purposes of eligibility and vesting, but not benefit accruals,
under any Parent Employee Benefit Plan, the service of the Transferred Employees
prior to the Effective Time shall be treated as service with a Parent Entity for
purposes of such Parent Employee Benefit Plans. Parent also shall cause the
Surviving Corporation and its Subsidiaries to honor in accordance with their
terms all employment, severance, consulting and other compensation Contracts
disclosed in Section 8.8 of the Company Disclosure Memorandum to Parent between
any Company Entity and any current or former director, officer, or employee
thereof, and all provisions for vested benefits or other vested amounts earned
or accrued through the Effective Time under the Company Benefit Plans. The
amount of monetary obligations owed to or with respect to such current and
former directors, officers and employees listed in Section 8.8 of the Company
Disclosure Memorandum have been accrued in the Company's Financial Statements.
The Company and InterCall have financial obligations for providing
post-employment medical and dental benefits ("Continued Health Benefits") to the
officers listed on Section 5.7(b) of the Company Disclosure Memorandum and their
respective spouses (each a "Covered Individual"), in accordance with the
Severance Agreement and General Release executed between each of such officers
and the Company (a "Severance Agreement"). The Company has provided to Parent a
copy of each Severance Agreement reflecting the maximum period during which
Continued Health Benefits shall be provided (the "Continuation Period"). As of
the date of execution of this Agreement, the Covered Individuals are provided
medical and dental benefits through the medical plan, dental plan and any
related insurance policy or policies with Blue Cross Blue Shield of Georgia
(collectively, the "Current Plan"). In the event the Company, the Company
Subsidiaries, the Surviving Corporation or any successor thereto, as applicable
(the "Continuing Sponsor") fails to continue in full force and effect during the
Continuation Period the Current Plan, or in the event coverage of the Covered
Individuals under the Current Plan (determined with regard to both benefits
provided and the cost of such benefits) is reduced during the Continuation
Period, then (i) the Continuing Sponsor, at its sole cost and expense, shall
obtain Continued Health Benefits for the Covered Individuals other than Xxxxxxxx
X. Xxxxxx, III and his spouse and Xxxxxxx X. Xxxxx, III and his spouse (the
"Xxxxxx and Xxxxx Covered Individuals") under a replacement plan that is
comparable to the Current Plan (determined with regard to both benefits provided
and the cost of such benefits), and (ii) the Continuing Sponsor shall use
commercially reasonable efforts to obtain Continued Health Benefits for the
Xxxxxx and Xxxxx Covered Individuals under a replacement plan that is comparable
to the Current Plan (determined with regard to both benefits provided and the
cost of such benefits). If the Continuing Sponsor fails to obtain such coverage
under a replacement plan for the Xxxxxx and Xxxxx Covered Individuals, then each
of Xxxxxxxx X. Xxxxxx, III or Xxxxxxx X. Xxxxx, III can elect either (i) to pay
any additional premiums for the Continued Health Benefits over the costs for
such individual that was reflected on the Closing Balance Sheet that is
attributable to providing Continued Health Benefits or (ii) to require the
Continuing Sponsor to pay directly to such individual an amount equal to the
remaining pro rata share reflected on the Closing Balance Sheet that is
attributable to providing Continued Health Benefits for such individual and his
spouse. Any such payment shall be made within thirty (30) days of the
discontinuance of the Current Plan or the date that coverage of the Covered
Individual under the Current Plan is reduced. Notwithstanding anything to the
contrary contained herein, following the Closing, in no event shall Parent,
Surviving Corporation or any of their
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respective Subsidiaries have any Liability with respect to any employment,
severance, consulting or other compensation Contract between any Company Entity
and any employee or former employee of any Disposed Company in such Person's
capacity as an employee or former employee of any Disposed Company.
(c) Following the Effective Time, no employee of a Company Entity who
elects to be covered under any medical or disability insurance plan of a Parent
Entity shall be excluded from coverage under such plan on the basis of a
pre-existing condition that was not also excluded under the applicable Company
Benefit Plan. To the extent that an employee of a Company Entity has satisfied
in whole or in part any annual deductible or paid any out-of-pocket or
co-payment expenses (as evidenced by reasonable documentation to be provided by
Company) under a medical insurance plan of a Company Entity for a plan year,
such individual shall be credited therefor under the corresponding provisions of
the corresponding Parent Employee Benefit Plan in which such individual
participates after the Effective Time.
8.9 Indemnification of Officers and Directors.
(a) From and after the Effective Time, in the event of any threatened or
actual claim, action, suit, proceeding, or investigation, whether civil,
criminal, or administrative (a "Claim"), including a Claim in which any person
who is now, or has been at any time prior to the date of this Agreement, or who
becomes prior to the Effective Time, a current or former director or officer of
any Company Entity (each an "Indemnified Party") is, or is threatened to be,
made a party based in whole or in part on, or arising in whole or in part out
of, or pertaining to (i) the fact that the Indemnified Party is or was acting in
his or her capacity as a director, officer, or employee of Company, any of the
Company Subsidiaries, or any of their respective predecessors (excluding any
Claim brought by an Indemnified Party against another Indemnified Party), or
(ii) this Agreement or any of the transactions contemplated hereby, whether in
any case asserted or arising before or after the Effective Time, if the
Indemnified Party, in his or her capacity as a director, officer of employee of
any Company Entity, is or is threatened to be made a defendant in such Claim
each of Parent and the Surviving Corporation shall indemnify and hold harmless,
as and to the fullest extent permitted by Law, each such Indemnified Party
against any Liability (including reasonable attorneys' fees and expenses in
advance of the final disposition of any claim, suit, proceeding, or
investigation to each Indemnified Party to the fullest extent permitted by Law
upon receipt of any undertaking required by applicable Law), judgments, fines,
and amounts paid in settlement in connection with any such threatened or actual
Claim and in the event of any such threatened or actual Claim (whether asserted
or arising before or after the Effective Time), the Indemnified Parties may
retain counsel reasonably satisfactory to them; provided, that (x) Parent shall
have the right to assume the defense thereof and upon such assumption Parent
shall not be liable to any Indemnified Party for any legal expenses of other
counsel or any other expenses subsequently incurred by any Indemnified Party in
connection with the defense thereof, except that if Parent elects not to assume
such defense or counsel for the Indemnified Parties reasonably advises the
Indemnified Parties that there are issues which raise conflicts of interest
between Parent and the Indemnified Parties, the Indemnified Parties may retain
counsel reasonably satisfactory to them, and Parent shall pay the reasonable
fees and expenses of such counsel for the Indemnified Parties, (y) neither
Parent nor the Surviving Corporation shall be liable for any settlement effected
without Parent's prior written consent (which consent shall not be unreasonably
withheld, conditioned or delayed), and (z) neither Parent nor the Surviving
Corporation shall have any obligation hereunder to any Indemnified Party when
and if a court of competent jurisdiction shall ultimately determine, and such
determination shall have become final and nonappealable, that indemnification of
such Indemnified Party in the manner contemplated hereby is prohibited by
applicable Law. Parent's and the Surviving Corporation's obligations under this
Section 8.9(a) continue in full force and effect for a period of six years after
the Effective Time; provided, that all rights to indemnification in
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respect of any claim (an "Indemnification Claim") asserted or made within such
period shall continue until the final disposition of such Indemnification Claim.
(b) Parent agrees that all rights to indemnification and all limitations on
Liability existing in favor of the current or former directors, officers, and
employees of the Company Entities (the "Covered Parties") as provided in the
Company Entities' respective Certificate of Incorporation, Bylaws, or similar
governing instruments or any indemnity agreement with a Covered Party as in
effect as of the date of this Agreement with respect to matters occurring prior
to the Effective Time shall survive the Merger and shall continue in full force
and effect, and shall be honored by such entities or their respective successors
as if they were the indemnifying party thereunder, without any amendment
thereto, for a period of six years after the Effective Time; provided, that all
rights to indemnification in respect of any Claim asserted or made within such
period shall continue until the final disposition of such Claim; provided,
further, however, that nothing contained in this Section 8.9(b) shall be deemed
to preclude the liquidation, consolidation, or merger of any Company Entity, in
which case all of such rights to indemnification and limitations on Liability
shall be deemed to so survive and continue notwithstanding any such liquidation,
consolidation, or merger. Without limiting the foregoing, in any case in which
approval by Parent is required to effectuate any indemnification, Parent shall
direct, at the election of the Indemnified Party, that the determination of any
such approval shall be made by independent counsel mutually agreed upon between
Parent and the Indemnified Party.
(c) Prior to or at the Effective Time, Company shall, at its sole cost and
expense, secure an endorsement to the ForeFront Portfolio blended liability
insurance policy, Policy No. 8160-9827 issued to it by Federal Insurance Company
for the period August 16, 2002 to August 16, 2003 (the "Policy"). Such
endorsement shall provide the Indemnified Parties with coverage for acts
committed or allegedly committed prior to the Effective Time. Such coverage
shall be for a period of at least six years following the Effective Time and
shall be at least as broad in scope as the coverage currently provided under the
Policy and have other terms and conditions not materially less favorable to the
coverage presently provided under the Policy. The provisions of this
Section 8.9(c) shall be deemed to have been satisfied if an extended reporting
period shall have been obtained by Parent at Company's sole cost and expense
prior to or at the Effective Time, which provides coverage equivalent to that
provided under the Policy for an aggregate period of at least six years, with
respect to acts committed or allegedly committed prior to the Effective Time.
Parent shall maintain, or shall cause the Surviving Corporation to maintain,
such coverage in effect for the Indemnified Parties for not less than six years
after the Effective Time. Company shall fully pay the premiums of the Policy on
or before the Effective Time.
(d) If a Claim is based on, arises out of or pertains to an Indemnified
Party's actions or inactions in his or her capacity as a current or former
officer, director or employee of any of the Disposed Companies, Parent shall be
reimbursed, to the extent that such Claim is not covered by the Policy, out of
either the InterCall Fund or the ITC Operations Fund (as Parent may, in its sole
discretion, determine) the amount, if any, for which Parent is required to
indemnify such Indemnified Party under this Section 8.9, any indemnity agreement
entered into by Company in favor of such Indemnified Party or otherwise in
connection with such Claim.
(e) If Parent or the Surviving Corporation or any successors or assigns
shall consolidate with or merge into any other Person and shall not be the
continuing or surviving Person of such consolidation or merger or shall transfer
all or substantially all of its Assets to any Person, then and in each case,
proper provision shall be made so that the successors and assigns of Parent or
the Surviving Corporation shall assume the obligations set forth in this
Section 8.9.
(f) The provisions of this Section 8.9 are intended to be for the benefit
of and shall be enforceable by each Indemnified Party and their respective heirs
and representatives.
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8.10 Asset Dispositions.
The Asset Dispositions other than the sale of Surebridge, Inc. shall be
consummated on or prior to the Effective Time and Company agrees to use its
commercially reasonable efforts to consummate the sale of Surebridge, Inc. on or
prior to the Effective Time. Company has furnished to Parent a true, complete
and correct copy of the agreements and other documents set forth in Section 8.10
of the Company Disclosure Memorandum pursuant to which the Asset Dispositions
shall be consummated. Company agrees not to amend the documents set forth in
Section 8.10 without the prior written consent of Parent, which consent shall
not be unreasonably withheld or delayed. The Parties acknowledge that the
corporation purchasing the Disposed Companies ("Purchaser") will issue
additional securities of Purchaser to new investors that are stockholders of the
Company and that such new investors will enter into agreements and related
documents substantially similar to the copies provided to Parent. Parent agrees
that entering into such agreements and related documents will not be a violation
of this Section 8.10. The Parties further acknowledge that Xxxxxxxx X. Xxxxxx,
III ("Xxxxxx"), as purchaser of the Xxxx jet, may assign a portion of the
obligation to purchase the Xxxx jet to third parties; provided, however, that
Xxxxxx shall remain solely liable for all obligations to ITC Services with
respect to such purchase unless the assignee enters into agreements and related
documents substantially similar to the copies provided to Parent (including,
without limitation, a proceeds setoff letter ("Proceeds Setoff Letter"), and
Parent consents to decreasing the obligations of Xxxxxx with respect to such
transaction, in which case the obligations of Xxxxxx shall be reduced only to
the extent such obligations are assigned to and assumed by the assignee
(including, without limitation, the setoff obligation in the Proceeds Setoff
Letter). Section 8.10 of the Company Disclosure Memorandum sets forth the
obligations of any Company Entity following the Effective Time to any of the
Disposed Companies.
8.11 Financing.
Parent understands and agrees that any financing used to provide Parent
with the funds to perform its obligation under this Agreement shall not
contemplate or require the pledge or use of Assets of any Company Entity prior
to the Effective Time.
8.12 Restrictive Covenant Agreement.
Concurrently with the execution and delivery of this Agreement, the
individuals listed on Section 8.12 of the Company Disclosure Memorandum have
executed and delivered to Parent an agreement in substantially the form of
Exhibit 7 (each a "Restrictive Covenant Agreement").
8.13 Certain Tax Matters
(a) Preparation of Tax Returns.
(i) Stockholder Representative's Responsibility. The Stockholder
Representative, on behalf of Company, shall prepare and timely file
(or cause to be prepared and timely filed) with the relevant taxing
authorities all Tax Returns of Company or any of its Subsidiaries for
the tax year ending December 31, 2002 ("2002 Tax Returns"). In the
event that the 2002 Tax Returns are not completed prior to the Closing
then such returns shall be subject to the procedures outlined in
subsections (a)(ii)(A) through (C) below, revised to reflect that the
Stockholder Representative is responsible in the first instance for
the preparation of the 2002 Tax Returns and therefore placing the
Stockholder Representative in the position of Parent and Parent in the
position of the Stockholder Representative.
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(ii) Parent's Responsibility. Parent, on behalf of Company, shall
prepare and timely file (or cause to be prepared and timely filed)
with the relevant taxing authorities all Tax Returns with respect to
Company or its Subsidiaries with respect to taxable periods ending
after 2002 and including the Closing Date ("Final Tax Returns"),
subject to the provisions in paragraphs (A) - (C) below.
(A) Any such Final Tax Returns shall, to the extent permitted
by applicable Tax law, be prepared (i) on a basis consistent with the
last previous Tax Returns filed in respect of Company or its
Subsidiaries, as the case may be, and (ii) in the case of the Tax
Returns of Company or its Subsidiaries with respect to the 2003
taxable year and for which the Reimbursing Parties may have a
reimbursement obligation under Section 11.1, on a basis consistent
with the underlying methodology used in the calculation of (x) the
Projected Liabilities and (y) any estimated tax payments made by
Company or its Subsidiaries, as the case may be, with respect to the
2003 taxable year.
(B) Parent shall submit a draft of the Final Tax Returns
(including the underlying work papers) to the Stockholder
Representative at least ninety (90) days prior to their due date for
their approval. The Stockholder Representative shall have the right to
conduct a reasonable review of the Final Tax Returns prepared by
Parent, and Parent shall not file (or cause to be filed) such Final
Tax Returns without the prior written consent of the Stockholder
Representative, which consent shall not be unreasonably withheld or
delayed. The draft Final Tax Returns shall be deemed final upon the
earliest of (i) the date on which Parent and the Stockholder
Representative agree that such draft Final Tax Returns are final, (ii)
the 30th day after receipt of the draft Final Tax Returns pursuant to
this Section 8.13(a)(ii)(B), if the Stockholder Representative has not
delivered a notice that expresses disagreement with the draft Final
Tax Returns and setting forth the basic terms of their disagreement,
or (iii) the date on which all disputes relating to such Final Tax
Returns between Parent and the Stockholder Representative are resolved
in accordance with Section 8.13(a)(ii)(C). If the Stockholder
Representative delivers a notice of disagreement pursuant to this
Section 8.13(a)(ii)(B), such notice shall specify those items or
amounts as to which they disagree with specificity.
(C) If the Stockholder Representative delivers a notice of
disagreement pursuant to Section 8.13(a)(ii)(B), the Stockholder
Representative and Parent shall, during the 20 days following such
delivery, use their commercially reasonable efforts to reach agreement
on the disputed tax items or amounts (the "Disputed Tax Items"). If,
during such period, the Stockholder Representative and Parent are
unable to reach such agreement, they shall promptly thereafter cause
accounting firm used in Section 3.6(c) (or if said firm shall be
unwilling to act thereunder, such other independent public accountants
of nationally recognized standing reasonably satisfactory to Parent
and the Stockholder Representative) (the "Tax Dispute Accountants"),
promptly to review the draft Final Tax Returns and any other documents
necessary to render a determination on the Disputed Tax Items
(including all necessary work papers of the parties). The parties will
present their arguments to the Tax Dispute Accountants within 10 days
after submission of the dispute to the Tax Dispute Accountants. The
Tax Dispute Accountants will resolve the dispute, in a fair and
equitable manner and in accordance with the applicable Tax law, within
20 days after the parties have presented their arguments to the Tax
Dispute Accountants or earlier if so required by law. The Tax Dispute
Accountants' decision shall be final, conclusive and binding on the
parties. Following the resolution of any such dispute, Parent shall
prepare and timely file (or cause to be prepared and timely filed) the
Final Tax Returns, as modified based on the resolution of such
dispute. The fees and expenses of the Tax dispute Accountants in
resolving a dispute shall be either borne by Parent or deducted from
the Escrow Deposits in accordance with the terms of the Escrow
Agreement in inverse proportion
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as the parties may prevail on matters resolved by the Tax Dispute
Accountants, which proportionate allocations shall be determined by
the Tax Dispute Accountants at the time the determination of the Tax
Dispute Accountants is rendered on the merits of the matters
submitted.
(b) Audits and Other Proceedings.
(i) Following the Closing Date, if an audit or other
administrative or judicial proceeding is initiated by any Tax
authority with respect to Taxes of Company or any of its Subsidiaries
for which the Reimbursing Parties may have a reimbursement obligation
under Section 11.1, Parent or Company, as the case may be, shall
promptly notify the Stockholder Representative of such audit or
proceeding, stating the nature and basis of such claim and the amount
thereof, to the extent known. Failure to give such notice shall not
relieve the Reimbursing Parties from any reimbursement obligation
which they may have with respect to Section 11.1, except to the extent
that the Reimbursing Parties are prejudiced thereby. The Stockholder
Representative will have the right, at its option, to control the
conduct of all stages of such audit or other administrative or
judicial proceeding with representatives of its own choosing
reasonably acceptable to the Reimbursed Party (and Reimbursed Party
acknowledges that Xxxxxx & Bird LLP shall be deemed reasonably
acceptable as legal representative to Reimbursing Parties) with
respect to Taxes of Company or any of its Subsidiaries for which the
Reimbursing Parties may have a reimbursement obligation under Section
11.1. At such time as such request is received by Parent, Parent or
Company, as the case may be, will furnish the Stockholder
Representative and/or its representatives with powers of attorney or
any other documentation or authorization necessary or appropriate to
enable the Stockholder Representative and/or its representatives to
control the conduct of such audit or other proceeding. Parent shall
control the conduct of all stages of all other audits or other
administrative or judicial proceedings with respect to Taxes of
Company or any of its Subsidiaries. Parent and Company shall not, and
shall not permit any of their Affiliates to, accept any proposed
adjustment or enter into any settlement or agreement in compromise
regarding any Taxes of Company or any of its Subsidiaries for which
the Reimbursing Parties have a reimbursement obligation under Section
11.1 without the express written consent of the Stockholder
Representative (on behalf of the Reimbursing Parties).
(ii) With respect to any audit or other administrative or judicial
proceeding that it controls, the Stockholder Representative (x) shall
give prompt notice to Parent of any Tax adjustment proposed in writing
pursuant to any audit or other administrative or judicial proceeding
controlled by the Stockholder Representative (on behalf of the Company
Stockholders) with respect to the assets or activities of Company or
any of its Subsidiaries, and (y) shall not accept any proposed
adjustment or enter into any settlement or agreement in compromise
which would bind Parent or Company or any of its Subsidiaries with
respect to any Taxes of Company or its Subsidiaries (other than any
such Taxes for which the Reimbursing Parties have a reimbursement
obligation under Section 11.1) without the express written consent of
Parent, which consent shall not be unreasonably withheld or delayed.
(c) Cooperation on Tax Matters. Parent, the Stockholder Representative and
Company stockholders shall (and after the Closing, Parent shall cause Company
to) cooperate fully, to the extent reasonably requested by the other party, in
connection with the filing of all Tax Returns and in the course of any audit or
other administrative or judicial proceeding with respect to Taxes. Parent and
Company stockholders agree, and following the Closing, Parent agrees to cause
Company, to retain all books and records with respect to Tax matters pertinent
to Company relating to any Tax period beginning before the Closing Date until
the expiration of the applicable statute of limitations.
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(d) Amended Tax Returns. Parent shall not amend, and shall not permit any
of its Affiliates to amend, any Tax Return pertaining to a Pre-Closing Tax
Period without the prior written consent of the Stockholder Representative
(which consent shall not be unreasonably withheld or delayed), provided,
however, Parent may amend, and may permit any of its Affiliates to amend, such a
Tax Return without such written consent and thereby forego any right to
reimbursement from the Reimbursing Party under Section 11.1 with respect to any
Tax Return pertaining to a Pre-Closing Tax Period.
(e) Final Tax Payments. If the amount due and payable on the 2002 Tax
Returns or the Final Tax Returns is less than the amount included in Projected
Liabilities or Working Capital for such obligation, such difference shall be
promptly remitted to the Stockholder Representative (for distribution to the
stockholders of Company in the same manner as provided in Article 3). If the
amount due and payable on the 2002 Tax Returns or the Final Tax Returns is more
than the amount included in Projected Liabilities or Working Capital for such
obligation, such difference shall be considered an amount subject to
reimbursement pursuant to the provisions of Section 11.1. Any amounts subject to
reimbursement under the provisions of Section 11.1 pursuant to this Section
8.13(e) shall be deducted from either the InterCall Fund or the ITC Operations
Fund as Parent may determine in its sole discretion.
(f) Loss. For purposes of Section 11.1, no "Loss" shall have occurred with
respect to any Tax matter arising from a federal, state, local or other income
Tax return if and to the extent any increase in Tax in one period is offset by a
decrease in Tax in another period and such offset is readily calculable. By way
of illustration and not limitation, if an item of income or deduction is
included in one year and it is determined that it should instead be included or
allowed in another year, the reduction in Tax by reflecting the item in the
other year shall reduce the Loss arising from the increase in Tax in the year
adjusted. Similarly, if an item of deduction is required to be capitalized and
recovered over some other period of time specified at the time of the
disallowance of the item, the reduction in Tax resulting from the later
deductions shall offset the original increase in Tax, but limiting such offset
to the amount of Tax deductions actually permitted to be taken on a Tax return
filed by the time of the final determination of the disallowed amount. No offset
will be required to be made, however, if the timing or amount of the future
potentially offsetting item is uncertain at the time of resolution of the matter
resulting in the Tax loss, such as an adjustment that may only be recovered
through recovery of the basis of an item in a future period that cannot be
determined. In the event of a dispute over the calculation of an offsetting
amount, such item shall be resolved in the manner specified in Section
8.13(a)(ii)(C).
8.14 Real Estate Matters
Company covenants to use its commercially reasonable efforts to obtain
prior to the Closing Date an estoppel certificate (the "Declarant Estoppel")
from the Declarant under the Declaration of Covenants dated November 2, 1989,
recorded in Deed Book 544, Page 543, in the Office of the Clerk of Superior
Court of Xxxxx County, Georgia (the "CCRs") which shall provide that all of the
Owned Real Properties subject to the CCRs are in compliance with the terms of
the CCRs. Further, to the extent the Owned Property located at 0000 X.X. Xxxxxxx
Xxxxx, Xxxx Xxxxx, Xxxxxxx or the 1.6306 acre parcel which is contiguous to the
property located at 0000 X.X. Xxxxxxx Xxxxx does not comply with the acreage
requirement contained in Section 3.12 of the CCRs, Company shall use its
commercially reasonable efforts to obtain a variance (as described in Section
4.02 of the CCRs) prior to the Closing Date for such non-compliance. The costs
of any such estoppel certificates and variances under this Section 8.14 shall be
borne solely by Company.
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Article 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party.
The respective obligations of each Party to perform this Agreement and
consummate the Merger and the other transactions contemplated hereby are subject
to the satisfaction of the following conditions, unless waived by both Parties
pursuant to Section 13.5:
(a) Regulatory Approvals. Any applicable waiting period under the HSR Act
relating to the Merger shall have expired or been terminated. All other Consents
of, filings and registrations with, and notifications to, all Regulatory
Authorities required for consummation of the Merger shall have been obtained or
made and shall be in full force and effect and all waiting periods required by
Law shall have expired, except for such Consents which, if not obtained, would
not, individually or in the aggregate, have a Company Material Adverse Effect.
(b) Legal Proceedings. No court or governmental or Regulatory Authority of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any Law or Order (whether temporary, preliminary or permanent) or taken
any other action which prohibits or makes illegal consummation of the
transactions contemplated by this Agreement.
9.2 Conditions to Obligations of Parent.
The obligations of Parent to perform this Agreement and consummate the
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by Parent pursuant to
Section 13.5(a):
(a) Representations and Warranties. For purposes of this Section 9.2(a),
the accuracy of the representations and warranties of Company set forth in
Article 5 shall be assessed on and as of the Closing Date with the same effect
as if made on and as of such date (other than representations and warranties
which address matters only as of a specified date, which shall speak only as of
such specified date). All of the representations and warranties of Company set
forth in Article 5 shall be true and correct; provided, however, that this
condition shall have been satisfied so long as any failure of such
representations and warranties to be true and correct does not result in, and
may not be reasonably likely to result in, individually or in the aggregate, a
Company Material Adverse Effect. For purposes of this Section 9.2(a), including
for purposes of determining under this Section 9.2(a) if any representation or
warranty has been breached, those representations and warranties of Company
which are qualified by references to "material" or "Company Material Adverse
Effect" or to the "Knowledge" of any Person shall be deemed not to include such
qualifications.
(b) Performance of Agreements and Covenants. Each and all of the agreements
and covenants of Company to be performed and complied with pursuant to this
Agreement and the other agreements contemplated hereby prior to the Effective
Time shall have been duly performed and complied with in all material respects.
(c) Certificates. Company shall have delivered to Parent (i) a certificate,
dated as of the Effective Time and signed on its behalf by its chief executive
officer and its chief financial officer, to the effect that the conditions set
forth in Section 9.1, as it relates to Company, and in Sections 9.2(a) and
9.2(b) have been satisfied and setting forth the number of shares of Company
Capital Stock and Company Options outstanding immediately prior to the Effective
Time, (ii) certified copies of resolutions duly
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adopted by Company's Board of Directors and stockholders evidencing the taking
of all corporate action necessary to authorize the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Parent and its counsel
shall request, and (iii) a certificate signed by an authorized officer of
Company in substantially the form set forth in Section 9.2(c) of the Company
Disclosure Memorandum.
(d) Escrow Agreement. The Stockholder Representative and the Escrow Agent
shall have executed and delivered the Escrow Agreement to Parent on or prior to
Closing.
(e) Asset Dispositions. The Asset Dispositions shall have been duly
consummated.
(f) Stockholder Approval. The stockholders of Company holding 90% of the
Company Common Stock and 100% of the Company Preferred Stock (to the extent
there are any shares of Company Preferred Stock outstanding) shall have adopted
this Agreement, and approved the consummation of the transactions contemplated
hereby, including the Merger and the Stock Dispositions, as and to the extent
required by Law, or by the provisions of any governing instruments.
(g) Dissenting Stockholders. The total shares of Company Capital Stock held
by stockholders who have properly exercised and not withdrawn their appraisal
rights under the DGCL shall not have exceeded five percent (5%) of the shares of
Company Capital Stock outstanding as of the date of the Stockholders Meeting.
(h) Legal Opinions from Xxxxxx & Bird LLP. Xxxxxx & Bird LLP, counsel to
Company, shall have delivered to Parent one or more legal opinions covering the
matters set forth in Exhibit 8 attached hereto.
(i) Legal Opinions from Foreign Counsel. Counsel to InterCall Conferencing
Services Limited shall have delivered to Parent a legal opinion covering the
matters set forth in Exhibit 9 attached hereto.
(j) Tax Certificate. At the Closing, Parent shall have received from
Company a certificate signed under penalties of perjury stating that, as of the
Closing Date, Company has determined that it is not and, at all times during the
five year period preceding the date of such written statement, has not been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code, and that the stock of Company does not constitute a
United States real property interest within the meaning of Section 897(c)(1)(A)
of the Code.
(k) Payment or Assessment of Property Taxes. Company shall have paid in
full and in cash the property taxes assessed against the Owned Real Property
that are due and payable as of the Closing Date.
(l) Financing. There shall not be any material adverse condition, material
disruption or material adverse change in the financial, banking or capital
markets as set forth in the Commitment Letter which results in Parent's being
unable to consummate the Financing.
(m) Tax Liability Insurance. The Escrow Policy attached to Section 9.2(m)
of the Company Disclosure Memorandum shall be in full force and effect, all
premiums therefor shall have been paid by Company in full and in cash and such
policy shall become non-cancellable upon consummation of the Merger.
(n) Directors' and Officers' Liability Insurance. The Policy, and all
endorsements thereto as provided in Section 8.9(c), (or any alternative coverage
as described below) shall be in full force and effect; provided, however, that
Company may, in its sole discretion, substitute for such coverage
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alternative directors' and officers' liability insurance underwritten by an
insurance company whose financial strength has been rated no less than "A" by
A.M. Best Company, and which complies in all respects with the requirements set
forth in Section 8.9(c). Company shall have furnished a true, correct and
complete copy of any such alternative directors' and officers' liability
insurance to Parent prior to the Closing Date.
9.3 Conditions to Obligations of Company.
The obligations of Company to perform this Agreement and consummate the
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by Company pursuant to
Section 13.5(b):
(a) Representations and Warranties. For purposes of this Section 9.3(a),
the accuracy of the representations and warranties of Parent and Sub set forth
in Article 6 shall be assessed on and as of the Closing Date with the same
effect as if made on and as of such date (other than representations and
warranties which address matters only as of a specified date, which shall speak
only as of such specified date). All of the representations and warranties of
Parent and Sub set forth in Article 6 shall be true and correct; provided,
however, that this condition shall have been satisfied so long as any failure of
such representations and warranties to be true and correct does not result in,
and may not be reasonably likely to result in, individually or in the aggregate,
a Parent Material Adverse Effect. For purposes of this Section 9.3(a), including
for purposes of determining under this Section 9.3(a) if any representation or
warranty has been breached, those representations and warranties of Parent and
Sub which are qualified by references to "material" or "Parent Material Adverse
Effect" or to the "Knowledge" of any Person shall be deemed not to include such
qualifications.
(b) Performance of Agreements and Covenants. Each and all of the agreements
and covenants of Parent and Sub to be performed and complied with pursuant to
this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all material
respects.
(c) Certificates. Parent shall have delivered to Company (i) a certificate,
dated as of the Effective Time and signed on its behalf by its chief executive
officer and its chief financial officer, to the effect that the conditions set
forth in Section 9.1, as it relates to Parent and Sub, and in Sections 9.3(a)
and 9.3(b) have been satisfied, and (ii) certified copies of resolutions duly
adopted by Parent's Board of Directors and Sub's Board of Directors and sole
stockholder evidencing the taking of all corporate action necessary to authorize
the execution, delivery and performance of this Agreement, and the consummation
of the transactions contemplated hereby, all in such reasonable detail as
Company and its counsel shall request.
(d) Escrow Agreement. Parent and the Escrow Agent shall have executed and
delivered the Escrow Agreement to the Stockholder Representative on or prior to
Closing.
(e) Stockholder Approval. The stockholders of Company holding 90% of the
Company Common Stock and 100% of the Company Preferred Stock shall have adopted
this Agreement, and approved the consummation of the transactions contemplated
hereby, including the Merger and the Stock Dispositions, as and to the extent
required by Law, or by the provisions of any governing instruments.
(f) Company Credit Facility. Parent shall pay in full at Closing all
amounts set forth in the Payoff Letter and obtain Lien releases under the Credit
Facility.
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Article 10
TERMINATION
10.1 Termination.
Notwithstanding any other provision of this Agreement or the approval of
this Agreement by the stockholders of Company, this Agreement may be terminated
and the Merger abandoned at any time prior to the Effective Time:
(a) By mutual written agreement of Parent and Company; or
(b) By either Party (provided that the terminating Party is not then in
breach of any representation, warranty, covenant, or other agreement contained
in this Agreement) in the event of a breach by the other Party of any
representation or warranty contained in this Agreement which facts giving rise
to such breach cannot be or have not been cured (provided that no cure period
shall be required for a breach which by its nature cannot be cured) within 30
days after the giving of written notice to the breaching Party of such breach
and which breach may be reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect or a Parent Material Adverse
Effect, as applicable, on the breaching Party; or
(c) By either Party (provided that the terminating Party is not then in
material breach of any representation, warranty, covenant, or other agreement
contained in this Agreement) in the event of a material breach by the other
Party of any covenant or agreement contained in this Agreement which cannot be
or has not been cured (provided that no cure period shall be required for a
breach which by its nature cannot be cured) within 30 days after the giving of
written notice to the breaching Party of such breach; or
(d) By either Party (provided that the terminating Party is not then in
material breach of any representation, warranty, covenant, or other agreement
contained in this Agreement) in the event (i) any Consent of any Regulatory
Authority required for consummation of the Merger and the other transactions
contemplated hereby shall have been denied by final non-appealable action of
such authority, (ii) the stockholders of Company fail to give the Company
Stockholder Approval at the Stockholders' Meeting where such matter was
presented to such stockholders for approval and voted upon or (iii) if there
shall be any Law enacted, promulgated, issued or entered following the date of
this Agreement that makes consummation of the transactions contemplated hereby
illegal or otherwise prohibited; or
(e) By either Party in the event that the Merger shall not have been
consummated by July 28, 2003 (which date shall be extended to September 29,
2003, at either Party's election if the Merger shall not have been consummated
as a result of Parent's failure to receive the Financing due to any material
adverse condition, material disruption or material adverse change in the
financial, banking or capital markets as set forth in the Commitment Letter) if
the failure to consummate the transactions contemplated hereby on or before such
date is not caused by any breach of this Agreement by the Party electing to
terminate pursuant to this Section 10.1(e); provided, however, that Parent shall
not be entitled to terminate this Agreement pursuant to this Section 10.1(e) if
the failure to consummate the transactions contemplated hereby on or before such
date is caused by Parent's failure to obtain financing as a result of a material
adverse change set forth in clause (iii) of the last paragraph of the Commitment
Letter or in Condition 2 or in the first part of Condition 3 of the Conditions
Precedent to Closing section of the Summary of Indicative Terms and Conditions
incorporated into the Commitment Letter (for greater certainty, in no event
shall the immediately preceding proviso limit Parent's ability to terminate this
- 50 -
Agreement at any time pursuant to Section 10.1(i), whether prior to or following
the dates set forth in this Section 10.1(e)); or
(f) By Parent in the event that (i) the Board of Directors of Company shall
have failed to include in the Proxy Statement its recommendation, without
modification or qualification, that Company stockholders give the Company
Stockholder Approval or shall have formally withdrawn, qualified or modified, in
a manner adverse to Parent, the recommendation of such Board of Directors to
Company stockholders that they give the Company Stockholder Approval, or (ii)
the Board of Directors of Company shall have affirmed, recommended or authorized
entering into any Acquisition Transaction other than the Merger; or
(g) By Company, if prior to receipt of Company Stockholder Approval, the
Board of Directors of Company has made a Company Subsequent Determination
pursuant to Section 8.1(c) in order to approve and permit Company to accept a
Superior Proposal; provided, however, that (i) Parent does not make, within
three business days after receipt from Company of written notice that (A)
Company has received a Superior Proposal, (B) the material terms of the Superior
Proposal, and (C) Company intends to effect a Company Subsequent Determination,
an offer that the Board of Directors of Company shall have concluded in its good
faith judgment is as favorable to the Company stockholders as such Superior
Proposal, and (ii) Company shall have tendered to Parent the Company Termination
Fee payable pursuant to Section 13.2(b); or
(h) By Company in the event that the Financing has been terminated; or
(i) By Parent in the event that the Financing has been terminated as a
result of a material adverse change set forth in clause (iii) of the last
paragraph of the Commitment Letter or in condition 2 or in the first part of
Condition 3 of the Conditions Precedent to Closing section of the Summary of
Indicative Terms and Conditions incorporated into the Commitment Letter and, if
required by Section 13.2(c), Parent has tendered to Company the Parent
Termination Fee as provided therein.
10.2 Effect of Termination.
In the event of the termination and abandonment of this Agreement pursuant
to Section 10.1, this Agreement shall become void and have no effect, without
any Liability on the part of any Party or its Affiliates, Representatives or
stockholders, except that (i) the provisions of this Section 10.2, Section
8.6(b) and Article 13 shall survive any such termination and abandonment, and
(ii) no such termination shall relieve the breaching Party from Liability
resulting from any willful breach by that Party of this Agreement. No
termination of this Agreement shall affect the obligations of the parties
contained in the Confidentiality Agreement, all of which obligations shall
survive termination of this Agreement in accordance with the terms thereof.
Article 11
REIMBURSEMENT FOR LOSSES
11.1 Reimbursement for Losses.
(a) Notwithstanding the Closing, the Escrow Deposits shall be reduced in
accordance with the Escrow Agreement and this Article 11 in an amount sufficient
to compensate Parent and any Affiliate of Parent and their respective directors,
officers, agents and employees (the "Reimbursed Party"), for any damage
(including, without limitation, punitive and consequential damages), liability,
loss, cost, expense (including all reasonable attorneys' fees), interest,
penalty, assessments or fines (collectively, "Losses")
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suffered or incurred by any Reimbursed Party at any time and from time to time,
arising out of or resulting from one or more of the following:
(i) the breach of any representation or warranty of Company
contained in this Agreement, the Escrow Agreement or in any schedule
or certificate delivered herewith or therewith to Parent in connection
with the Closing, which results in a Loss after the Effective Time;
(ii) any failure of Company to duly perform or observe prior to
the Effective Time any term, provision, covenant, agreement or
condition contained in this Agreement on the part of Company to be
performed or observed, which results in a Loss after the Effective
Time; and
(iii) the matters set forth in Section 11.1 of the Company
Disclosure Memorandum, which matters result in a Loss after the
Effective Time.
For purposes of determining under this Section 11.1 if any representation or
warranty of Company other than Sections 5.10(c), 5.17, 5.18, and 5.27 has been
breached, any qualification or limitation of such representation or warranty by
reference to the materiality of matters stated therein or as to matters having
or not having a "Material Adverse Effect," and any limitation of such
representations and warranties as being "to the Knowledge of," or "known to" or
words of similar effect, shall be disregarded, in determining any breach
thereof.
(b) Any reduction in the Escrow Deposits pursuant to Section 11.1(a) above
shall be subject to the limitations set forth in this Article 11 including the
following limitations:
(i) Any Reimbursement Claim for Losses resulting from, based upon
or arising out of the InterCall Business shall be made only against
the InterCall Fund. The InterCall Fund shall not be reduced under
Section 11.1(a) for Losses resulting from, based upon or arising out
of the InterCall Business unless the aggregate of all Losses relating
thereto for which a reduction would, but for this Section 11.1(b)(i),
be made exceeds on a cumulative basis an amount equal to $1,000,000
(subject to Section 11.1(b)(iii)), and upon reaching such amount, the
InterCall Fund shall be reduced only for any such Losses in excess of
such amount; provided, however, that any claim for which it shall have
been fully and finally adjudicated or determined that fraud is a
material element shall not be subject to the limitation set forth in
this clause to the extent the Losses are caused by or result from such
fraud; and provided, further, that any Reimbursement Claim for Losses
resulting from, based upon or arising out of the matters set forth in
Section 8.13(e) shall not be conditioned on, or subject to, the
$1,000,000 limitation set forth in this clause.
(ii) Any Reimbursement Claim for Losses resulting from, based
upon or arising out of the Company Business unrelated to the Company
Disposition Matter or the Xxxxxx shall be made only against the ITC
Operations Fund. The ITC Operations Fund shall not be reduced under
Section 11.1(a) for Losses resulting from, based upon or arising out
of the Company Business unrelated to the Company Disposition Matter or
the Xxxxxx unless the aggregate of all Losses relating thereto for
which a reduction would, but for this Section 11.1(b)(ii), be made
exceeds on a cumulative basis an amount equal to $1,000,000 (subject
to Section 11.1(b)(iv)), but upon reaching such amount, the ITC
Operations Fund shall be reduced for all such Losses; provided,
however, that any claim for which it shall have been fully and finally
adjudicated or determined that fraud is a material element shall not
be subject to the limitation set forth in this clause to the extent
the Losses are caused by or result from such fraud; and provided,
further, that any Reimbursement Claim for Losses resulting from, based
upon or arising out of the matters set forth
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in Section 8.13(e) shall not be conditioned on, or subject to, the
$1,000,000 limitation set forth in this clause.
(iii) The maximum amount the Escrow Deposits may be reduced under
Section 11.1(a) for Losses resulting from, based upon or arising out
of the InterCall Business, whether individually or in the aggregate,
(whether such liability would be pursuant to such sections or under
any other theory of liability) shall not exceed the InterCall Fund.
(iv) The maximum amount the Escrow Deposits may be reduced under
Section 11.1(a) for Losses resulting from, based upon or arising out
of the Company Business unrelated to the Company Disposition Matter or
the Xxxxxx, whether individually or in the aggregate, (whether such
liability would be pursuant to such sections or under any other theory
of liability) shall not exceed (A) the ITC Operations Fund, and (B) if
no funds remain in the ITC Operations Fund and if there are funds
remaining in the InterCall Fund, the remaining portion, if any, of the
InterCall Fund.
(v) Any Reimbursement Claim for Losses resulting from, based upon
or arising out of the Company Disposition Matter or the Xxxxxx shall
be made only against the ITC Non-Operations Fund. The maximum amount
the Escrow Deposits may be reduced under Section 11.1(a) for Losses
resulting from, based upon or arising out of the Company Disposition
Matter or the Xxxxxx, whether individually or in the aggregate,
(whether such liability would be pursuant to such sections, the Escrow
Policy or under any other theory of liability) shall not exceed the
ITC Non-Operations Fund.
(vi) A Reimbursed Party shall not be entitled under this
Agreement to multiple recovery for the same Losses.
(vii) Notwithstanding any provision to the contrary, to the
extent that the IRS asserts a claim for an additional amount of Taxes
with respect to the Stock Dispositions (except to the extent such
Taxes are attributable to a breach of representation or warranty set
forth in Section 5.8(l)-(p)), there shall be no right to seek
reimbursement from the Escrow Deposits for the amount of such Taxes
under Section 11.1.
11.2 Procedures for Reimbursement.
(a) A Reimbursement Claim shall be made by a Reimbursed Party by delivery
of a written notice to the Stockholder Representative requesting a reduction in
the Escrow Funds and specifying the basis on which such reduction is sought and
the amount of asserted Losses and, in the case of a Third Party Claim,
containing (by attachment or otherwise) such other information as such
Reimbursed Party shall have concerning such Third Party Claim.
(b) If the Reimbursement Claim involves a Third Party Claim (excluding any
claim that relates to Tax matters), the procedures set forth in Section 11.3
shall be observed by the Reimbursed Party and the Reimbursing Parties.
(c) If the Reimbursement Claim involves a Third Party Claim that relates to
Tax matters, the procedures set forth in Section 8.13(b) - (c) (as opposed to
Section 11.3) shall be observed by the Reimbursed Party and the Reimbursing
Parties.
(d) If the Reimbursement Claim involves a matter other than a Third Party
Claim, the Reimbursing Parties shall have 30 days to object to such
Reimbursement Claim by delivery of a written
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notice of such objection to such Reimbursed Party specifying in reasonable
detail the basis for such objection. Failure to timely so object shall
constitute a final and binding acceptance of the Reimbursement Claim by the
Stockholder Representative on behalf of the Reimbursing Parties and the
Reimbursement Claim shall be paid in accordance with Section 11.2(e) hereof.
(e) Upon determination of the amount of a Reimbursement Claim, whether by
agreement between the Reimbursing Parties and the Reimbursed Party or by any
other final adjudication, the Escrow Deposits shall be reduced in accordance
with the Escrow Agreement by the amount of any such Reimbursement Claim within
ten days of the date such amount is determined.
11.3 Third Party Claims.
The obligations and liabilities of the parties hereunder with respect to a
Third Party Claim (excluding any claim that relates to Tax matters) shall be
subject to the following terms and conditions:
(a) A Reimbursed Party shall give the Stockholder Representative written
notice of a Third Party Claim promptly after receipt by the Reimbursed Party of
notice thereof, and the Reimbursing Parties may undertake the defense,
compromise and settlement thereof by representatives of its own choosing
reasonably acceptable to the Reimbursed Party (and Reimbursed Party acknowledges
that Xxxxxx & Bird LLP shall be deemed reasonably acceptable to act as legal
representatives to Reimbursing Parties). The failure of a Reimbursed Party to
notify the Stockholder Representative of such claim shall not limit the
possibility for the reduction of the Escrow Deposits with respect to such claim
except to the extent the Reimbursing Parties demonstrate that the defense of
such claim is materially prejudiced by such failure. If the Reimbursed Party
desires to participate in, but not control, any such defense, compromise and
settlement, it may do so at its sole cost and expense. If, however, the
Reimbursing Parties fail or refuse to undertake the defense of such Third Party
Claim within twenty (20) days after written notice of such claim has been given
to the Stockholder Representative by the Reimbursed Party, the Reimbursed Party
shall have the right to undertake the defense, compromise and settlement of such
claim with counsel of its own choosing. In the circumstances described in the
preceding sentence, the Reimbursed Party shall, promptly upon its assumption of
the defense of such claim, make a Reimbursement Claim as specified in Section
11.3 which shall be deemed a Reimbursement Claim that is not a Third Party Claim
for the purposes of the procedures set forth herein.
(b) No settlement of a Third Party Claim which shall result in the
reduction of the Escrow Deposits under this Article 11 shall be made without the
prior written consent by the Stockholder Representative on behalf of the
Reimbursing Parties, which consent shall not be unreasonably withheld or
delayed. Consent shall be presumed in the case of settlements of $50,000 or less
where the Reimbursing Parties have not responded within five Business Days of
notice of a proposed settlement. If the Reimbursing Parties assume the defense
of such a Third Party Claim, (i) no compromise or settlement thereof may be
effected by the Reimbursing Parties without the Reimbursed Party's consent
unless (a) there is no finding or admission of any violation of law or any
violation of the rights of any person and no effect on any other claim that may
be made against the Reimbursed Party, and (b) the sole relief provided is
monetary damages that are paid in full by the Reimbursing Parties, and (ii) the
Reimbursed Party shall have no liability with respect to any compromise or
settlement thereof effected without its consent, which consent shall not be
unreasonably withheld or delayed.
(c) In connection with the defense, compromise or settlement of any Third
Party Claim, the Parties to this Agreement shall execute such powers of attorney
as may reasonably be necessary or appropriate to permit participation of counsel
selected by any Party hereto and, as may reasonably be related to any such claim
or action, shall provide access to the counsel, accountants and other
representatives of each Party during normal business hours to all properties,
personnel, books, Tax
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records, contracts, commitments and all other business records of such other
Party and will furnish to such other Party copies of all such documents as may
reasonably be requested (certified, if requested).
(d) All expenses reasonably incurred by the Stockholder Representative in
connection with the defense, compromise and settlement of Reimbursement Claims
under this Section 11.3 shall first be paid out of the interest accrued on the
Escrow Deposits in accordance with the Escrow Agreement and, to the extent that
the amount of such expenses exceeds the amount of such accrued interest, such
excess shall be paid out of the ITC Operations Fund and/or the InterCall Fund,
as Parent may determine in its sole discretion but, to the extent one fund is
depleted, such expenses shall be deducted from the other fund. Other than as may
be deducted from the Escrow Deposits, in no event shall Parent or any of its
Affiliates be liable for expenses incurred by the Stockholder Representative in
connection with the defense, compromise and settlement of Reimbursement Claims
under this Section 11.3.
11.4 Exclusive Post-Closing Remedy.
Absent fraud, and except for seeking equitable relief, from and after the
Closing the sole remedy of a Reimbursed Party in connection with the matters
specified in Section 11.1, shall be the appropriate Escrow Deposits as set forth
in this Article 11. For greater certainty, claims which are the subject matter
of Section 11.1 and which allege a claim of fraud and state the circumstances
constituting fraud with particularity on the part of any party shall not be
subject to the limitations set forth in this Section 11.4, including, without
limitation, reimbursement exclusively from the Escrow Deposits. For greater
certainty, no stockholder of Company shall have personal liability for any
amounts by which the Escrow Deposits may be reduced under this Agreement, and
the sole source of recovery for such amounts shall be the Escrow Deposits.
11.5 Time Limitations.
(a) The InterCall Fund or the ITC Operations Fund, as the case may be,
shall not be reduced under Section 11.1(a) hereof for Losses resulting from,
based upon or arising out of the InterCall Business or the Company Business
unrelated to the Company Disposition Matter or the Xxxxxx, unless written notice
asserting a Reimbursement Claim based thereon is given to the Stockholder
Representative in accordance with Section 11.3 prior to the second anniversary
of the Closing Date.
(b) The ITC Non-Operations Fund shall not be reduced under Section 11.1(a)
hereof for Losses resulting from, based upon or arising out of the Company
Disposition Matter or the Xxxxxx, unless written notice asserting a
Reimbursement Claim based thereon is given to the Stockholder Representative in
accordance with Section 11.3 prior to the second anniversary of the Closing
Date; provided, however, that if Company has received written notice from the
IRS that it intends to examine, or that it is in fact examining, the federal
income tax consequences of the Company Disposition Matter, and such examination
has not been concluded on or prior to the second anniversary of the Closing
Date, the time by which notice asserting a Reimbursement Claim must be given to
the Stockholder Representative shall be extended until there has been a Final
Determination of the examination of the Company Disposition Matter.
11.6 Tax Effect and Insurance.
Subject to the limitations set forth in Section 11.1, the amount by which
the Escrow Deposits shall be reduced with respect to any Reimbursement Claim
shall be reduced by the tax benefit actually realized and any insurance proceeds
received by the Reimbursed Party as a result of any Losses upon which such
Reimbursement Claim is based, and shall include any tax detriment actually
suffered by the Reimbursed Party as a result of such Losses. Notwithstanding the
foregoing, any insurance proceeds
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received by Parent and the Surviving Corporation under the Escrow Policy (as
defined in Section 11.8) shall not reduce the amount by which the ITC
Non-Operations Fund shall be reduced with respect to any Reimbursement Claim
pursuant to Section 11.1(b)(v), inasmuch as each of the Parties agrees that the
ITC Non-Operations Fund is, for all purposes, the Retention (as defined in the
Escrow Policy) with respect to any Loss resulting from, based upon or arising
out of the Company Disposition Matter or the Xxxxxx, including, without
limitation, the reimbursement of Claim Expenses (as defined in the Primary
Policy). With respect to any Losses resulting from, based upon or arising out of
the Xxxxxx, any Reimbursed Party may seek recovery for the amount of such Losses
in excess of the amount of the Retention solely under the Escrow Policy. Any
Losses resulting from, based upon or arising out of the Xxxxxx which do not
exceed the amount of the Retention shall be deducted from the ITC Non-Operations
Fund in accordance with Section 11.1(b)(v). The amount of any such tax benefit
or detriment shall be determined by taking into account the effect, if any and
to the extent determinable, of timing differences resulting from the
acceleration or deferral of items of gain or loss resulting from such Losses and
shall otherwise be determined so that payment by the Reimbursing Parties of the
Reimbursement Claim, as adjusted to give effect to any such tax benefit or
detriment, will make the Reimbursed Party as economically whole as is reasonably
practical with respect to the Losses upon which the Reimbursement Claim is
based.
11.7 Subrogation.
Upon payment in full of any Reimbursement Claim, whether such payment is
effected by set-off or otherwise, or the payment of any judgment or settlement
with respect to a Third Party Claim, the Reimbursing Parties shall be subrogated
to the extent of such payment to the rights of the Reimbursed Party against any
person or entity with respect to the subject matter of such Reimbursement Claim
or Third Party Claim.
11.8 Reimbursement Claims for Losses, Resulting from, Based upon or Arising out
of the Company Disposition Matter.
(a) The Parties acknowledge and agree that the ITC Non-Operations Fund is,
for all purposes, the Retention (as defined in the Escrow Policy) with respect
to any Loss resulting from, based upon or arising out of the Company Disposition
Matter or the Xxxxxx, including, without limitation, the reimbursement of Claim
Expenses (as defined in the Primary Policy); provided, however, that in no event
shall this Section 11.8 or the Escrow Policy prevent the ITC Non-Operations Fund
from being otherwise distributed in accordance with Section 11.5(b) and the
Escrow Agreement (it being understood that a Policy Claim shall be deemed to be
a Reimbursement Claim for purposes of Section 11.5(b)). Notwithstanding anything
in this Agreement to the contrary, including, without limitation, Sections
8.13(b), 11.2 and 11.3, each of Parent, Company and the Stockholder
Representative hereby agrees that a Reimbursement Claim for Losses resulting
from, based upon or arising out of the Company Disposition Matter or the Xxxxxx
(to be made against the ITC Non-Operations Fund pursuant to Section 11.1(b)(v))
shall be governed by the terms and conditions set forth in the Escrow Policy and
in this Section 11.8 and to the extent such losses exceed the ITC Non-Operations
Fund, reimbursement shall be available solely under the Escrow Policy. Each of
Parent, Company and the Stockholder Representative hereby agrees that with
respect to any claim for coverage under the Escrow Policy resulting from, based
upon or arising out of the Company Disposition Matter or the Xxxxxx (a "Policy
Claim") and for so long as there is any amount remaining in the ITC
Non-Operations Fund:
(i) Parent or the Surviving Corporation shall notify the Stockholder
Representative in writing in the event that Parent or the Surviving
Corporation asserts a Policy Claim. The time limits for reimbursement
against the ITC Non-Operations Fund shall be governed by Section 11.5(b)
and the release of funds in the ITC Non-Operations Fund shall be in
accordance with the terms of the Escrow Agreement.
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(ii) Parent and/or the Surviving Corporation shall keep the
Stockholder Representative informed, on a prompt basis, of the status of
any Policy Claim and in connection therewith, shall furnish the Stockholder
Representative with a copy of all material documents relating to such
Policy Claim. Subject to Section 11.8(a)(i), failure to comply with this
Section 11.8(ii) shall not relieve the Reimbursing Parties from any
reimbursement obligation which they may have pursuant to Section 11.1,
except to the extent that the Reimbursing Parties are prejudiced thereby.
(iii) The Stockholder Representative shall be entitled to consult with
Parent, the Surviving Corporation and the Insurer (as defined in the Escrow
Policy) on an ongoing basis during the pendency of any Policy Claim.
(iv) Neither Parent nor the Surviving Corporation shall approve the
settlement of any Policy Claim with the Insurer or the reimbursement of
Claim Expenses (as defined in the Primary Policy) which provides for the
reduction of the ITC Non-Operations Fund without the express written
consent of the Stockholder Representative, which consent shall not be
unreasonably withheld or delayed.
(v) Subject to the provisions of this Section 11.8, any Final
Adjudication (as defined in the Primary Policy) of a Policy Claim with
respect to Loss covered under the Escrow Policy, including amounts
attributable to the Retention, shall be final and binding upon Parent, the
Surviving Corporation and the Stockholder Representative and each such
Party shall comply in all respects therewith.
(vi) The Stockholder Representative shall cooperate in good faith with
Parent, the Surviving Corporation and the Insurer in all matters in
connection with any Policy Claim.
Other than in the event of material non-compliance with any or all of the
foregoing items (i) through (vi) and subject to the provisions of this Section
11.8, the Parties agree that any determination made under the Escrow Policy
shall be final and binding upon each of them, absent manifest error.
(b) Upon exhaustion of the ITC Non-Operations Fund (whether as a result of
the Final Adjudication of a Policy Claim requiring disbursement of the
Retention, a Claim Expense or upon the release of the funds therein to the
Qualified Investors in accordance with the Escrow Agreement), this Section 11.8
shall be void and of no further force and effect, which shall in no way affect
any other section of this Agreement.
ARTICLE 12
STOCKHOLDER REPRESENTATIVE
12.1 Appointment; Acceptance.
Each Company stockholder constitutes and appoints the Stockholder
Representative as his or her true and lawful attorney-in-fact to act for and on
behalf of such stockholder in all matters relating to or arising out of this
Agreement, including, without limitation, accepting and agreeing to reimburse
any Party with respect to any Reimbursement Claim, objecting to any
Reimbursement Claim or the amount of such Reimbursement Claim and prosecuting
and resolving such dispute as herein provided, accepting the defense, compromise
and settlement of any Third Party Claim or refusing to accept the same, taking
actions on behalf of the Company Stockholders in accordance with Section 8.13
hereof, instituting and prosecuting such actions (including arbitration
proceedings) as the Stockholder Representative shall deem appropriate in
connection with any of the foregoing, retaining counsel, accountants, appraisers
and other advisers in connection with any of the foregoing, all for the account
of the stockholder, such stockholder
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agreeing to be fully bound by the acts, decisions and agreements of the
Stockholder Representative taken and done pursuant to the authority herein
granted. By executing and delivering this Agreement under the heading
"Stockholder Representative," the person who is appointed as a Stockholder
Representative hereby (i) accepts his appointment and authorization to act as
Stockholder Representative as attorney-in-fact and agent on behalf of the
stockholders in accordance with the terms of this Agreement and (ii) agrees to
perform his obligations under Article 11 and this Article 12.
12.2 Authority.
Each stockholder fully and completely, without restriction authorizes the
Stockholder Representative to take or refrain from taking, as appropriate, all
actions as are required of the Stockholder Representative under this Agreement,
including, without limitation, pursuant to Article 11, as more fully described
in Section 12.1 above.
12.3 Actions.
Each stockholder hereby expressly acknowledges and agrees that (i) the
Stockholder Representative is exclusively authorized to act on its behalf,
notwithstanding any dispute or disagreement among stockholders, (ii) Parent and
any other Person shall be entitled to rely on any and all actions taken by the
Stockholder Representative (regardless of any disagreement or disparity between
them) under this Agreement and any related agreements without any liability to
any of the stockholders of Company and without any obligation to inquire of any
of such stockholders or the Stockholder Representative.
12.4 Effectiveness.
The authorization of the Stockholder Representative shall be irrevocable
and effective until its rights and obligations under this Agreement terminate by
virtue of the termination of any and all of the obligations of Company under
Article 8, Article 10 or Article 11.
12.5 Indemnification; Fees and Expenses.
The stockholders hereby jointly and severally agree (i) to indemnify and
hold the Stockholder Representative harmless from any and all liability, loss,
cost, damage or expense, including attorneys fees (reasonably incurred or
suffered as a result of the performance of their duties under this Agreement),
and (ii) that the Stockholder Representative shall not have any liability to the
stockholders for any act or omission hereunder, except for gross negligence or
willful misconduct. Prior to disbursement of the ITC Operations Fund, the
reasonable fees and expenses of the Stockholder Representative (including those
resulting from mere negligence on the part of the Stockholder Representative)
shall first be paid out of the interest accrued on the Escrow Deposits in
accordance with the Escrow Agreement and, to the extent the amount of such fees
and expenses exceeds the amount of such accrued interest, such excess shall be
deducted from the ITC Operations Fund or the InterCall Fund, as Parent may
determine in its sole discretion, but to the extent one such fund is depleted,
such expenses shall be deducted from the other fund, in advance where reasonably
requested by the Stockholder Representative. Other than as may be deducted from
the Escrow Deposits, neither Parent nor any of its Affiliates (including,
without limitation, Company following the Effective Time) shall have any
liability with respect to such fees and expenses. The Stockholder Representative
shall have no personal liability to advance any of their moneys hereunder.
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12.6 Successor.
Upon not less than 30 days prior written notice to Parent, the Stockholder
Representative shall have the right to resign at his sole discretion for any
reason at any time and in such event, such Stockholder Representative shall
continue to have all rights to indemnification, fees and expenses as provided in
Section 12.5 above. If the Stockholder Representative resigns or ceases to
function in his capacity as such for any reason whatsoever, such Stockholder
Representative shall immediately give notice to the other parties to this
Agreement. In such event, the stockholders, may appoint a successor and give
notice to the other parties to this Agreement; provided, however, that if for
any reason the Stockholder Representative has resigned and the stockholders do
not appoint any successor within thirty (30) days after the Stockholder
Representative resigns or otherwise ceases to function, then Parent shall have
the right, upon notice to each stockholder, to petition a court of competent
jurisdiction for the appointment of one or more successors.
12.7 Survival of Authorizations.
EACH STOCKHOLDER INTENDS FOR THE AUTHORIZATIONS AND AGREEMENTS IN THE
FOREGOING SECTIONS OF THIS ARTICLE 12 TO REMAIN IN FORCE AND NOT BE AFFECTED IF
SUCH STOCKHOLDER SUBSEQUENTLY BECOMES MENTALLY OR PHYSICALLY DISABLED,
INCOMPETENT OR INCAPACITATED, DOES HEREBY AUTHORIZE SUCH RECORDINGS AND FILINGS
HEREOF AS A STOCKHOLDER REPRESENTATIVE MAY DEEM APPROPRIATE, AND DOES HEREBY
DIRECT THAT NO FILING OF ACCOUNTS OR INVENTORIES OR POSTING OF A SURETY BOND
SHALL BE REQUIRED.
ARTICLE 13
MISCELLANEOUS
13.1 Definitions.
(a) Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:
"Acquisition Proposal" means any proposal (whether communicated to
Company or publicly announced to Company's stockholders) by any Person
(other than Parent or any of its Affiliates) for an Acquisition Transaction
involving Company or any of its present or future consolidated Subsidiaries
(including, without limitation, the InterCall Operating Subsidiaries), or
any combination of such Subsidiaries, the Assets of which constitute 50% or
more of the consolidated Assets of Company as reflected on Company's
consolidated statement of condition prepared in accordance with GAAP.
"Acquisition Transaction" means any transaction or series of related
transactions (other than the transactions contemplated by this Agreement)
involving: (i) any acquisition or purchase from Company by any Person or
Group (other than Parent or any of its Affiliates) of 50% or more in
interest of the total outstanding voting securities of Company, or any
tender offer or exchange offer that if consummated would result in any
Person or Group (other than Parent or any of its Affiliates) beneficially
owning 50% or more in interest of the total outstanding voting securities
of Company, or any merger, consolidation, business combination or similar
transaction involving Company pursuant to which the stockholders of Company
immediately preceding such transaction hold less than 65% of the equity
interests in the surviving or resulting entity (which includes the parent
corporation of any constituent corporation to any such transaction) of such
- 59 -
transaction; or (ii) any sale or lease (other than in the ordinary course
of business), or exchange, transfer, license (other than in the ordinary
course of business), or other disposition (other than pledges to secure
bona fide indebtedness) of 50% or more of the consolidated Assets of
Company.
"Affiliate" of a Person means: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by
or under common control with such Person; or (ii) any officer, director,
partner, employer, or direct or indirect beneficial owner of any 10% or
greater equity or voting interest of such Person.
"Asset Dispositions" means the sale of the Xxxx jet owned by ITC
Service Company and the Stock Dispositions.
"Assets" of a Person means all of the assets, properties, businesses
and rights of such Person of every kind, nature, character and description,
whether real, personal or mixed, tangible or intangible, accrued or
contingent, or otherwise relating to or utilized in such Person's business,
directly or indirectly, in whole or in part, whether or not carried on the
books and records of such Person, and whether or not owned in the name of
such Person or any Affiliate of such Person and wherever located.
"Baseline Statement" means the statement attached hereto as Exhibit
12.
"Baseline Working Capital Amount" means the Baseline Working Capital
Amount set forth on the Baseline Statement.
"Business Day" means a day other than a Saturday, Sunday or other day
which banks in New York City are authorized or required by law to close.
"Certificate of Merger" means the Certificate of Merger to be executed
by Company and filed with the Secretary of State of Delaware relating to
the Merger as contemplated by Section 1.1.
"Closing Date" means the date on which the Closing occurs.
"Closing Working Capital" means the Working Capital as of the Closing
Date.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Company Business" means the business of Company not including the
InterCall Business.
"Company Capital Stock" means, collectively, the Company Common Stock
and the Company Preferred Stock.
"Company Common Stock" means the $0.01 par value common stock of
Company.
"Company Disclosure Memorandum" means the written information entitled
"Company Disclosure Memorandum" delivered prior to the date of this
Agreement to Company describing in reasonable detail the matters contained
therein.
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"Company Disposition Matter" means any Tax Liability of Company
arising out of its spin-off pursuant to section 355 of the Code of its
stock of Knology, Inc.
"Company Entities" means, collectively, Company and all Company
Subsidiaries.
"Company Financial Statements" means the consolidated balance sheets
(including related notes and schedules, if any) of Company as of December
31, 2002 and 2001, and the related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) for each of the three fiscal years ended December 31,
2002, 2001 and 2000.
"Company Intellectual Property" means all Intellectual Property owned
by the Company Entities, other than as set forth in Section 13.13 of the
Company Disclosure Memorandum.
"Company Material Adverse Effect" means an event, change or occurrence
which, individually or together with any other event, change or occurrence,
has a material adverse impact on (i) the financial position, business,
prospects, or results of operations of Company and its Subsidiaries, taken
as a whole, or (ii) the ability of Company to perform its obligations under
this Agreement or to consummate the Merger or the other transactions
contemplated by this Agreement, provided that "Company Material Adverse
Effect" shall be deemed not to include the impact of (A) changes in Laws of
general applicability or interpretations thereof by courts or governmental
authorities, (B) changes in generally accepted accounting principles, (C)
actions and omissions of Company (or any of its Subsidiaries) taken with
the prior informed written Consent of Parent in contemplation of the
transactions contemplated hereby and (D) any loss of employment after the
date of execution of this Agreement of any or all of the persons set forth
in Section 13.13 of the Parent Disclosure Memorandum.
"Company Preferred Stock" means, collectively, the Series A
Convertible Preferred Stock and the Series B Convertible Preferred Stock.
"Company Pro-Forma Financial Statements" means the consolidated
balance sheets (including related notes and schedules, if any) of Company
as of December 31, 2002, pro forma to remove the effects of PRE Solutions,
Inc., xXxxxxxxXxxxx.xxx, Inc., Surebridge, Inc., Knology, Inc. and
ITC DeltaCom, Inc., and the related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) for the twelve months ended December 31, 2002.
"Company Subsidiaries" means the Subsidiaries of Company, which shall
include the Company Subsidiaries described in Section Error! Reference
source not found. and any corporation, limited liability company, limited
partnership, limited liability partnership or other organization acquired
as a Subsidiary of Company in the future and held as a Subsidiary by
Company at the Effective Time, and which shall exclude PRE Solutions, Inc.,
xXxxxxxxXxxxx.xxx, Inc. and Surebridge, Inc.
"Confidentiality Agreement" means that certain Confidentiality
Agreement, dated March 21, 2002, between Company and Parent.
"Consent" means any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
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"Contract" means any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease, license,
obligation, plan, practice, restriction, understanding, or undertaking of
any kind or character, or other document to which any Person is a party or
that is binding on any Person or its capital stock, Assets or business.
"Default" means (i) any breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit,
(ii) any occurrence of any event that with the passage of time or the
giving of notice or both would constitute a breach or violation of, default
under, contravention of, or conflict with, any Contract, Law, Order, or
Permit, or (iii) any occurrence of any event that with or without the
passage of time or the giving of notice would give rise to a right of any
Person to exercise any remedy or obtain any relief under, terminate or
revoke, suspend, cancel, or modify or change the current terms of, or
renegotiate, or to accelerate the maturity or performance of, or to
increase or impose any Liability under, any Contract, Law, Order, or
Permit.
"DGCL" means the Delaware General Corporation Law. ----
"Disposed Companies" means the companies the stock of which are being
sold in the Stock Dispositions.
"Employee Benefit Plan" means each pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock
ownership, share purchase, severance pay, vacation, bonus, retention,
change in control or other incentive plan, medical, vision, dental or other
health plan, any life insurance plan, flexible spending account, cafeteria
plan, vacation, holiday, disability or any other employee benefit plan or
fringe benefit plan, including any "employee benefit plan," as that term is
defined in Section 3(3) of ERISA and any other plan, fund, policy, program,
practice, or arrangement providing compensation or other benefits, whether
or not such Employee Benefit Plan is or is intended to be subject to the
Code, ERISA or any other applicable Law, whether funded or unfunded or
arrived at through collective bargaining or otherwise.
"Environmental Laws" means any federal, state, local or foreign Law
related in any respect to protection of human health or the environment,
including any permit, approval, license, or other authorization arising
thereunder.
"Equity Rights" means all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of the capital stock
of a Person or by which a Person is or may be bound to issue additional
shares of its capital stock or other equity rights.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any entity, which together with a Company
Entity would be treated as a single employer under Code Section 414.
"Escrow Policy" means collectively, the Primary Policy and each of
Company's excess tax liability insurance policies attached to Section
9.2(m) of the Company Disclosure Memorandum.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
- 62 -
"Exhibits" 1 through 9 inclusive, mean the Exhibits so marked, copies
of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof, and may be
referred to in this Agreement and any other related instrument or document
without being attached hereto.
"Final Determination" means (i) a decision, judgment, decree or other
order by any court of competent jurisdiction, which decision, judgment,
decree or other order has become final after all allowable appeals have
been exhausted or the time for filing such appeal has expired or (ii) a
closing agreement entered into under Section 7121 of the Code or any other
formal agreement reached.
"GAAP" means United States generally accepted accounting principles,
consistently applied during the periods involved.
"Hazardous Material" means any substance, waste, pollutant, compound,
or element defined as or deemed to be hazardous under Environmental Law
that poses a risk of harm to human health or the environment.
"Xxxxxx" means (i) the three pre-paid variable forward contracts that
were entered into between ITC Wireless, Inc. ("ITCW") and Dresdner Bank AG
("Dresdner") on or about October 31, 2001 with respect to, in the
aggregate, 11,500,000 ordinary shares of Deutsche Telekom owned by ITCW;
(ii) the pre-paid variable forward contract entered into between ITCW and
Dresdner on or about February 5, 2002 with respect to 3,000,000 ordinary
shares of Deutsche Telekom owned by ITCW; and (iii) the pre-paid variable
forward contract entered into between ITCW and Dresdner on or about
February 7, 2002 with respect to 5,792,128 ordinary shares of Deutsche
Telekom owned by ITCW, copies of all five of which have been delivered to
the Insurer.
"HSR Act" means Section 7A of the Xxxxxxx Act, as added by Title II of
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder.
"Intellectual Property" means all of the following: copyrights,
patents (including re-issues, continuations, divisions, continuations
in-part, renewals and extensions), trademarks, service marks, trade dress,
trade names, domain names, together with all goodwill associated therewith,
registrations and applications therefor, technology, computer software
(including any source or object codes therefor or documentation relating
thereto), database rights, trade secrets, franchises, know-how, inventions,
and other intellectual property rights, internet web sites, and claims or
causes of action arising out of or related to past, present or future
infringement or misappropriation of the foregoing.
"InterCall" means InterCall, Inc., a Delaware corporation.
"InterCall Business" means the audio, video, web and data conferencing
business of InterCall and InterCall Operating Subsidiaries.
"InterCall Financial Statements" means the consolidated balance sheets
(including related notes and schedules, if any) of the teleconferencing and
videoconferencing segments of InterCall as of January 31, 2003, and as of
December 31, 2002 and 2001, and the related statements of income, changes
in stockholders' equity, and cash flows (including related notes
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and schedules, if any) for the one month ended January 31, 2003, and for
each of the three fiscal years ended December 31, 2002, 2001 and 2000.
"InterCall Operating Subsidiaries" means InView, Inc., InterCall Asia
Pacific Holdings Pty. Ltd., InterCall InterCall Conferencing Services
Limited, InterCall Hong Kong, Ltd., InterCall Singapore Pte. Ltd.,
InterCall Web Conferencing, Inc., InterCall New Zealand, InterCall Japan,
KK and Legal Connect Limited.
"In The Money Options" means any Company Options for which the
Exercise Difference is a positive number.
"ITC Service Company" means ITC Service Company, a Delaware
corporation and wholly owned subsidiary of InterCall.
"ITC Telecom Ventures" means ITC Telecom Ventures, Inc., a Delaware
corporation and wholly owned subsidiary of InterCall.
"Knowledge" or "knowledge" as used with respect to a Person other than
Company (including references to such Person being aware of a particular
matter) means the actual current knowledge of the chairman, members of the
board of directors, president, chief financial officer, chief accounting
officer, chief operating officer, any senior vice president, any vice
president, and chief legal officer of such Person, after reasonable
inquiry. With respect to Company, "Knowledge" or "knowledge" means the
knowledge of those individuals listed in Section 13.1 of the Company
Disclosure Memorandum, after reasonable inquiry.
"Law" means any code, law (including common law), ordinance,
regulation, reporting or licensing requirement, rule, or statute applicable
to a Person or its Assets, Liabilities, or business, including those
promulgated, interpreted or enforced by any Regulatory Authority.
"Liability" means any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including
costs of investigation, collection and defense), claim, deficiency,
guaranty or endorsement of or by any Person (other than endorsements of
notes, bills, checks, and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, known or
unknown, or otherwise.
"Licensed Intellectual Property" means all Intellectual Property owned
by third parties and used by the Company Entities in the conduct of their
businesses.
"Lien" means any conditional sale agreement, easement, encroachment,
encumbrance, hypothecation, lien, mortgage, pledge, security interest,
title retention or other security arrangement on, of, or with respect to
any property or property interest, other than (i) liens for current
property Taxes not yet due and payable, and (ii) liens or title defects
which do not materially impair the use of or title to the Assets subject to
such lien.
"Litigation" means any legal action, arbitration, cause of action,
lawsuit, legal claim, legal complaint, criminal prosecution, governmental
or other examination or investigation, audit (other than regular audits of
financial statements by outside auditors), hearing, administrative or other
proceeding relating to or affecting a Party, including, without limitation,
its business, its
- 64 -
records, its policies, its practices, its compliance with Law, its actions
or its Assets (including Contracts related to it), or the transactions
contemplated by this Agreement.
"Material" or "material" for purposes of this Agreement shall be
determined in light of the facts and circumstances of the matter in
question; provided that any specific monetary amount stated in this
Agreement shall determine materiality in that instance.
"Material Account Receivable" means accounts receivable equal to or
greater than $50,000 individually or $250,000 in the aggregate.
"Nasdaq" means the National Market Systems of the Nasdaq Stock Market,
Inc.
"Net Cash On Hand" means Cash on Hand less (i) the Projected
Liabilities, and (ii) the Company Lender Debt.
"Operating Property" means any property owned, leased, or operated by
the Party in question or by any of its Subsidiaries or in which such Party
or Subsidiary holds a material security interest or other material interest
(including an interest in a fiduciary capacity), and, where required by the
context, includes the owner or operator of such property, but only with
respect to such property.
"Order" means any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or
writ of any federal, state, local or foreign or other court, arbitrator,
tribunal, administrative agency, or Regulatory Authority.
"Parent Common Stock" means the $0.01 par value common stock of
Parent.
"Parent Disclosure Memorandum" means the written information entitled
"Parent Disclosure Memorandum" delivered prior to the date of this
Agreement to Company describing in reasonable detail the matters contained
therein.
"Parent Entities" means, collectively, Parent and all Parent
Subsidiaries.
"Parent Financial Statements" means (i) the consolidated balance
sheets (including related notes and schedules, if any) of Parent as of
December 31, 2002 and 2001, and the related statements of income, changes
in stockholders' equity, and cash flows (including related notes and
schedules, if any) for each of the three fiscal years ended December 31,
2002, 2001 and 2000, as filed by Parent in SEC Documents, and (ii) the
consolidated balance sheets of Parent (including related notes and
schedules, if any) and related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to periods
ended subsequent to December 31, 2002.
"Parent Material Adverse Effect" means an event, change or occurrence
which, individually or together with any other event, change or occurrence,
has a material adverse impact on (i) the financial position, business, or
results of operations of Parent and its Subsidiaries, taken as a whole, or
(ii) the ability of Parent to perform its obligations under this Agreement
or to consummate the Merger or the other transactions contemplated by this
Agreement, provided that "Parent Material Adverse Effect" shall be deemed
not to include the impact of (A) changes in Laws of general applicability
or interpretations thereof by courts or governmental authorities, (B)
changes in generally accepted accounting principles, or (C) actions and
omissions of Parent
- 65 -
(or any of its Subsidiaries) taken with the prior informed written Consent
of Company in contemplation of the transactions contemplated hereby.
"Party" means any of Company, Sub or Parent, and "Parties" means
Company, Sub and Parent.
"Permit" means any federal, state, local, and foreign governmental
approval, authorization, certificate, easement, filing, franchise, license,
notice, permit, or right to which any Person is a party or that is or may
be binding upon or inure to the benefit of any Person or its securities,
Assets, or business.
"Person" means a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
limited liability partnership, trust, business association, group acting in
concert, or any person acting in a representative capacity.
"Pre-Closing Tax Period" means any taxable period (or portion thereof)
ending on or before the Closing Date. For purposes of this Agreement, in
the case of any Taxes that are payable with respect to any Tax period
beginning before and ending after the Closing Date, such Taxes shall be
apportioned between the portion of such period ending on the Closing Date
and the portion beginning on the day after the Closing Date (x) in the case
of real and personal property Taxes, on a per diem basis, and (y) in the
case of all other Taxes, on the basis of the actual activities of Company
or any of its Subsidiaries as determined from the books and records of
Company or any of its Subsidiaries, as the case may be, for such partial
period.
"Primary Policy" means Company's tax liability insurance policy
(policy no. 00 DR 0217329), dated March 26, 2003, with Nutmeg Insurance
Company attached to Section 9.2(m) of the Company Disclosure Memorandum.
"Promissory Notes" means the promissory notes payable to Company or
any Company Entity in connection with the Asset Dispositions.
"Proxy Statement" means the proxy statement used by Company to solicit
the approval of its stockholders of the transactions contemplated by this
Agreement.
"Regulatory Authorities" means, collectively, the SEC, the Nasdaq, the
FTC, the DOJ, and all other foreign, federal, state, county, local or other
governmental or regulatory agencies, authorities (including antitrust,
competition, taxing and self-regulatory authorities), instrumentalities,
commissions, boards or bodies having jurisdiction over the Parties and
their respective Subsidiaries.
"Reimbursement Claim" means any claim for indemnification under
Article 11.
"Reimbursing Parties" means the stockholders of Company immediately
prior to the Effective Time.
"Release" has the same meaning ascribed thereto under the
Comprehensive Environmental Response Compensation and Liability Act, 42
U.S.C. 9601 et seq. ("CERCLA").
"Representative" means any investment banker, financial advisor,
attorney, accountant, consultant, or other representative or agent engaged
or authorized by a Person.
- 66 -
"SEC" means the United States Securities and Exchange Commission.
"SEC Documents" means all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to
be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Laws" means the Securities Act, the Exchange Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations of any Regulatory
Authority promulgated thereunder.
"Series A Convertible Preferred Stock" means the $0.01 par value
preferred stock of Company designated as Series A Convertible Preferred
Stock.
"Series B Convertible Preferred Stock" means the $0.01 par value
preferred stock of Company designated as Series B Convertible Preferred
Stock.
"Stock Dispositions" means (i) the sale of the capital stock of PRE
Solutions, Inc. xXxxxxxxXxxxx.xxx, Inc., Surebridge, Inc., Knology, Inc.
and ITC.DeltaCom, Inc., (ii) the transfer of the ITC names, logos and marks
set forth in Section 13.13 of the Company Disclosure Memorandum, (iii) the
sale of $500,000 in cash, and (iv) the assignment of that certain Residual
Note, dated December 22, 1999, made by Knology, Inc. in favor of InterCall,
Inc. to a C-Corporation.
"Stockholders' Meeting" means the meeting of the stockholders of
Company to be held pursuant to Section 8.1, including any adjournment or
adjournments thereof.
"Stockholder Representative" means Xxxxxxxx X. Xxxxxx, III.
"Sub Common Stock" means the $1.00 par value common stock of Sub.
"Subsidiaries" means all those corporations, associations, or other
business entities of which the entity in question either (i) owns or
controls 50% or more of the outstanding equity securities either directly
or through an unbroken chain of entities as to each of which 50% or more of
the outstanding equity securities is owned directly or indirectly by its
parent (provided, there shall not be included any such entity the equity
securities of which are owned or controlled in a fiduciary capacity), (ii)
in the case of partnerships, serves as a general partner, (iii) in the case
of a limited liability company, serves as a managing member, or (iv)
otherwise has the ability to elect a majority of the directors, trustees or
managing members thereof.
"Superior Proposal" means any Acquisition Proposal (on its most
recently amended or modified terms, if amended or modified) (i) involving
the acquisition of 50% or more of the equity interests in, or all or
substantially all of the Assets and Liabilities of, the Company Entities
and (ii) with respect to which the Board of Directors of Company (A)
determines in its good faith judgment that such Acquisition Proposal, if
accepted, is reasonably likely to be consummated on a timely basis, taking
into account all legal, financial, regulatory and other aspects of the
Acquisition Proposal and the Person or Group making the Acquisition
Proposal, and (B) determines in its good faith judgment to be more
favorable, if consummated, to Company's stockholders than the Merger taking
into account all relevant factors.
- 67 -
"Surviving Corporation" means Company as the surviving corporation
resulting from the Merger.
"Tax" or "Taxes" means any federal, state, county, local, or foreign
taxes, charges, fees, levies, imposts, duties, or other assessments,
including income, gross receipts, excise, employment, sales, use, transfer,
recording license, payroll, franchise, severance, documentary, stamp,
occupation, windfall profits, environmental, federal highway use,
commercial rent, customs duties, capital stock, paid-up capital, profits,
withholding, Social Security, single business and unemployment, disability,
real property, personal property, registration, ad valorem, value added,
alternative or add-on minimum, estimated, or other tax or governmental fee
of any kind whatsoever, imposed or required to be withheld by the United
States or any state, county, local or foreign government or subdivision or
agency thereof, including any interest, penalties, and additions imposed
thereon or with respect thereto.
"Tax Return" means any report, return, information return, or other
information required to be supplied to a Regulatory Authority in connection
with Taxes, including any return of an affiliated or combined or unitary
group that includes a Party or its Subsidiaries.
"Third Party Claim" means any Litigation that is instituted against a
Reimbursed Party by a Person other than a Company stockholder and which, if
prosecuted successfully, would result in a Loss for which such Reimbursed
Party is entitled to indemnification hereunder.
"Treasury Regulations" means the Treasury regulations (including
proposed and temporary Treasury regulations) promulgated under the Code.
"Working Capital" means current assets less (i) cash, and (ii) current
liabilities (as each such term is defined by GAAP) of InterCall. Current
liabilities for InterCall shall not include the Projected Liabilities.
(b) The terms set forth below shall have the meanings ascribed
thereto on the referenced page:
Term Page
2002 Balance Sheet .............................. 17
2002 Tax Returns ................................ 44
Accredited Merger Consideration ................. 3
Accredited Per Share Amount ..................... 3
Accredited Shares ............................... 4
Aggregate Cash Consideration .................... 3
Aggregate Exercise Differences .................. 6
Agreed Accounting Principles .................... 7
Agreement ....................................... 1
Antitrust Laws .................................. 38
Appraisal Addition Amount ....................... 11
Appraisal Reduction Amount ...................... 11
Base Amount ..................................... 2
Cash Merger Consideration ....................... 3
Certificates .................................... 12
Claim ........................................... 42
Closing ......................................... 2
Closing Balance Sheet ........................... 8
Closing Net Cash On Hand ........................ 8
Closing Working Capital Certificate ............. 8
Commitment Letter ............................... 33
Company ......................................... 1
Company Benefit Plans ........................... 24
Company Contracts ............................... 25
Company Indemnification Agreements .............. 30
Company Insurance Policies ...................... 29
Company Option Plans ............................ 6
Company Options ................................. 6
Company Stockholder Approval .................... 37
Company Subsequent Determination ................ 37
Company Termination Fee ......................... 70
Continuation Period ............................. 41
Continued Health Benefits ....................... 41
Continuing Sponsor .............................. 41
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Covered Individual ............................ 41
Covered Parties ............................... 42
Credit Facility ............................... 36
Current Plan .................................. 41
Disposition Stockholder ....................... 5
Disputed Amounts .............................. 9
Disputed Estimated Amounts .................... 7
Disputed Tax Items ............................ 45
Dissenting Shares ............................. 11
DOJ ........................................... 38
Effective Time ................................ 2
Escrow Agreement .............................. 13
Escrow Deposits ............................... 13
Escrow Per Share Amount ....................... 4
Estimated Balance Sheet ....................... 7
Estimated Net Cash On Hand .................... 7
Estimated Working Capital ..................... 7
Estimated Working Capital Certificate ......... 7
Exercise Difference ........................... 6
Final Tax Returns ............................. 44
Financing ..................................... 33
Fractional Option Distribution ................ 6
FTC ........................................... 38
Indemnification Claim ......................... 42
Indemnified Party ............................. 42
InterCall Fund ................................ 13
Investment Deadline ........................... 4
Investor Letter ............................... 3
Investor Record Date .......................... 4
IRS ........................................... 14
ITC Non-Operations Fund ....................... 13
ITC Operations Fund ........................... 13
Xxxxxx and Xxxxx Covered Individuals .......... 41
Leased Real Property .......................... 27
Lender ........................................ 33
Lessee(s) ..................................... 27
Listed Intellectual Property .................. 21
Losses ........................................ 52
Mailing Date .................................. 4
Merger ........................................ 1
Multiemployer Plan ............................ 24
Multiple Employer Plan ........................ 24
Non-Accredited Merger Consideration ........... 3
Option Amount ................................. 6
Other Per Share Amount ........................ 4
Other Quotient ................................ 4
Other Shares .................................. 4
Owned Real Property ........................... 27
Owner(s) ...................................... 27
Parent ........................................ 1
Parent SEC Reports ............................ 31
Parent Termination Fee ........................ 70
Paying Agent .................................. 12
Policy ........................................ 43
Proceeds Setoff Letter ........................ 44
Purchaser ..................................... 43
Qualified Investor ............................ 3
Real Property ................................. 27
Reimbursed Party .............................. 52
Required Withholding Amount ................... 6
Restrictive Covenant Agreement ................ 44
Severance Agreement ........................... 41
Significant Customers ......................... 29
Sub ........................................... 1
Takeover Laws ................................. 26
Tax Dispute Accountants ....................... 45
Transferred Employees ......................... 40
Voting Agreement .............................. 1
(c) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
13.2 Expenses.
(a) Except as otherwise provided in this Section 13.2, each of the Parties
shall bear and pay all direct costs and expenses incurred by it or on its behalf
in connection with the transactions contemplated hereunder, including filing,
registration and application fees, printing fees, and fees and expenses of its
own financial or other consultants, investment bankers, accountants, and
counsel. Expenses incurred by Company or any of its Subsidiaries in connection
with this Agreement and the transactions contemplated hereby will be paid at
Closing, and such amounts will be reflected in the Working Capital adjustment
pursuant to Sections 3.5 and 3.6.
(b) Notwithstanding the foregoing, Parent and Company agree that Company
shall pay to Parent $15,000,000 (the "Company Termination Fee") solely as
follows:
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(i) if Parent shall terminate this Agreement pursuant to Section
10.1(f);
(ii)if Company shall terminate this Agreement pursuant to Section
10.1(g); or
(iii) if (x) either Party shall terminate this Agreement pursuant to
Section 10.1(d)(ii), and (y) within twelve (12) months of the termination
of this Agreement, an Acquisition Transaction is consummated.
If the Company Termination Fee shall be payable pursuant to subsection (b)(i) of
this Section, the Company Termination Fee shall be paid in same-day funds within
two business days from the date of termination of this Agreement. If the Company
Termination Fee shall be payable pursuant to subsection (b)(ii) of this Section,
the Company Termination Fee shall be paid in same-day funds prior to the
termination of this Agreement. If the Company Termination Fee shall be payable
pursuant to subsection (b)(iii) of this Section, the Company Termination Fee
shall be paid in same-day funds at or prior to the date of consummation of such
Acquisition Transaction.
(c) Notwithstanding the foregoing, Parent and Company agree that Parent
shall pay to Company $15,000,000 (the "Parent Termination Fee") if Parent fails
to receive the Financing as a result of a material adverse change set forth in
clause (iii) of the last paragraph of the Commitment Letter or in condition 2 or
in the first part of condition 3 of the Conditions Precedent to Closing section
of the Summary of Indicative Terms and Conditions incorporated into the
Commitment Letter; provided, however, that such Parent Termination Fee shall not
be payable if the material adverse change referred to above is caused by an
event directly relating to Company or the Company Subsidiaries, taken as a
whole.
If the Parent Termination Fee shall be payable pursuant to subsection (c) of
this Section, the Parent Termination Fee shall be paid in same-day funds prior
to the termination of this Agreement.
13.3 Entire Agreement.
Except as otherwise expressly provided herein, this Agreement (including
the Escrow Agreement and the Voting Agreements and the other documents and
instruments referred to herein) constitutes the entire agreement between the
Parties with respect to the transactions contemplated hereunder and supersedes
all prior arrangements or understandings with respect thereto, written or oral
(except, as to Section 8.6(b), for the Confidentiality Agreement). Nothing in
this Agreement expressed or implied, is intended to confer upon any Person,
other than the Parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, other than as
provided in Sections 8.8 and 8.9. Except as expressly provided in another
written agreement, no Affiliate of a Party or any director, officer, trustee,
employee, representative or agent of any Party or any Affiliate of a Party,
acting in such Person's capacity as director, officer, trustee, employee,
representative or agent, shall have any Liability for breaches of this Agreement
or the transactions contemplated hereby to the extent such Person was acting in
such capacity, and each Party hereby waives and releases all claims of any such
Liability.
13.4 Amendments.
To the extent permitted by Law, this Agreement may be amended by a
subsequent writing signed by each of the Parties upon the approval of each of
the Parties, whether before or after stockholder approval of this Agreement has
been obtained; provided, that after any such approval by the holders of Company
Capital Stock, there shall be made no amendment that requires further approval
by such stockholders without the further approval of such stockholders.
- 70 -
13.5 Waivers.
(a) Prior to or at the Effective Time, Parent, acting through its Board of
Directors, chief executive officer or other authorized officer, shall have the
right to waive any Default in the performance of any term of this Agreement by
Company, to waive or extend the time for the compliance or fulfillment by
Company of any and all of their obligations under this Agreement, and to waive
any or all of the conditions precedent to the obligations of Parent under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing signed
by a duly authorized officer of Parent.
(b) Prior to or at the Effective Time, Company, acting through its Board of
Directors, chief executive officer or other authorized officer, shall have the
right to waive any Default in the performance of any term of this Agreement by
Parent or Sub, to waive or extend the time for the compliance or fulfillment by
Parent or Sub of any and all of its obligations under this Agreement, and to
waive any or all of the conditions precedent to the obligations of Company under
this Agreement, except any condition which, if not satisfied, would result in
the violation of any Law. No such waiver shall be effective unless in writing
signed by a duly authorized officer of Company.
(c) The failure of any Party at any time or times to require performance of
any provision hereof shall in no manner affect the right of such Party at a
later time to enforce the same or any other provision of this Agreement. No
waiver of any condition or of the breach of any term contained in this Agreement
in one or more instances shall be deemed to be or construed as a further or
continuing waiver of such condition or breach or a waiver of any other condition
or of the breach of any other term of this Agreement.
13.6 Assignment.
Except as expressly contemplated hereby, neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any Party
hereto (whether by operation of Law or otherwise) without the prior written
consent of the other Party. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the Parties
and their respective successors and assigns.
13.7 Notices.
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage pre-paid, or by courier
or overnight carrier, to the persons at the addresses set forth below (or at
such other address as may be provided hereunder), and shall be deemed to have
been delivered as of the date so delivered:
Company: ITC Holding Company, Inc.
0000 00xx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, III
Copy to Counsel: Xxxxxx & Bird LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
- 71 -
Attention: Xxxxxx Xxxxx
Xxxxx X. Xxxxx
Parent or Sub: West Corporation
00000 Xxxxxxx Xxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: General Counsel
Copy to Counsel: Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile Number: (000) 000-0000
Attention: Xxxx X'Xxxxxxxx
Xxxxx Xxxxxxxxxx
Stockholder Representative: Xxxxxxxx X. Xxxxxx, III
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxx 00000
Telephone Number: (000) 000-0000
13.8 Governing Law; Venue.
Regardless of any conflict of law or choice of law principles that might
otherwise apply, the Parties agree that this Agreement shall be governed by and
construed in all respects in accordance with the laws of the State of Delaware.
Each party hereto agrees to submit to the personal jurisdiction and venue of the
state and federal courts in Xxxx County, Georgia, and do hereby waive all
questions of personal jurisdiction and venue, including, without limitation, the
claim or defense that such courts constitute an inconvenient forum.
13.9 Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
13.10 Captions; Articles and Sections.
The captions contained in this Agreement are for reference purposes only
and are not part of this Agreement. Unless otherwise indicated, all references
to particular Articles or Sections shall mean and refer to the referenced
Articles and Sections of this Agreement.
13.11 Interpretations.
Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against any Party, whether under any rule of construction
or otherwise. No Party to this Agreement shall be considered the draftsman. The
Parties acknowledge and agree that this Agreement has been reviewed, negotiated,
and accepted by all Parties and their attorneys and shall be construed and
interpreted according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of all Parties hereto.
- 72 -
13.12 Severability.
Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
13.13 Company Name and Logos.
As soon as practicable (but in any event within 180 days) after the Closing
Date, Parent and the Surviving Corporation shall remove all ITC names, logos and
marks set forth in Section 13.13 of the Company Disclosure Memorandum from all
assets of Company. Nothing in this Agreement shall constitute a license or
authorization for Parent or the Surviving Corporation to use any such ITC names,
logos or marks. The Parties do not attribute any value of the ITC name, logo or
xxxx.
13.14 Disclosure Memorandum.
Other than with the prior written consent of the other Parties hereto,
neither Company nor Parent shall be entitled to amend or supplement their
respective Disclosure Memorandum or any section thereof.
- 73 -
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by its duly authorized officers as of the day and year
first above written.
ITC HOLDING COMPANY, INC.
By: /s/ Xxxxxxxx X. Xxxxxx, III
-----------------------------------
Name: Xxxxxxxx X. Xxxxxx, III
Title: Chairman and Chief Executive
Officer
WEST CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President,
Strategic Business Development
DIALING ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
FOR PURPOSES OF SECTION 8.3, 6, 4.1 AND 8.13 AND
ARTICLES 11 AND 12 ONLY
Solely in his/its capacity as the
Stockholder Representative:
/s/ Xxxxxxxx X. Xxxxxx, III
---------------------------------------------
Name: XXXXXXXX X. XXXXXX, III
- 74 -
[Form of Stockholder Voting Agreement - Standard Form]
Exhibit 1
STOCKHOLDER VOTING AGREEMENT
THIS STOCKHOLDER VOTING AGREEMENT (this "Agreement") is made and entered
into as of March __, 2003, by and among __________ ("Parent"), a Delaware
corporation, and the undersigned ("Stockholder").
RECITALS
A. Concurrently with the execution and delivery hereof, Parent, _________
("Sub"), a Delaware corporation and a direct wholly owned subsidiary of Parent,
and __________ ("Company"), a Delaware corporation are entering into an
Agreement and Plan of Merger of even date herewith (as it may be amended from
time to time pursuant to the terms thereof, the "Merger Agreement"), which
provides for the merger (the "Merger") of Sub with and into Company in
accordance with its terms.
B. Stockholder is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of such number of shares of the outstanding capital stock of
Company and shares subject to outstanding Equity Rights to acquire Company
capital stock as is indicated on the signature page of this Agreement.
C. In consideration of the execution and delivery of the Merger Agreement
by Parent and Sub, Stockholder desires to agree to vote such Stockholder's
Shares (as defined herein) and deliver an irrevocable proxy to Parent for such
Shares so as to facilitate the consummation of the Merger.
NOW, THEREFORE, intending to be legally bound, the parties hereto hereby
agree as follows:
1. Certain Definitions.
(a) Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed thereto in the Merger Agreement. For all purposes of and
under this Agreement, the following terms shall have the following respective
meanings:
"Company Common Stock" means the shares of common stock, $0.01
par value per share, of Company.
"Company Preferred Stock" means, collectively, the Series A
Convertible Preferred Stock and the Series B Convertible Preferred Stock.
"Expiration Date" means the earlier to occur of (i) such date and
time as the Merger Agreement shall have been terminated pursuant to the
terms of Article 10 thereof or (ii) the Effective Time.
"Person" means any individual, corporation, limited liability
company, general or limited partnership, unincorporated association, joint
venture, or other business enterprise or entity.
"Series A Convertible Preferred Stock" means the $0.01 par value
preferred stock of Company designated as Series A Convertible Preferred
Stock.
"Series B Convertible Preferred Stock" means the $0.01 par value
preferred stock of Company designated as Series B Convertible Preferred
Stock.
"Shares" means (i) all shares of Company Common Stock, Company
Preferred Stock and other voting securities of Company owned, beneficially
or of record, by Stockholder as of the date hereof, (ii) all additional
shares of Company Common Stock, Company Preferred Stock and other voting
securities of Company acquired by Stockholder, beneficially or of record,
during the period commencing with the execution and delivery of this
Agreement and expiring on the Expiration Date, and (iii) such other shares
of Company Common Stock, Company Preferred Stock and other voting
securities of Company over which Stockholder has or will have voting power.
"Transfer" means, with respect to any security, to directly or
indirectly (i) sell, pledge, encumber, grant an option with respect to,
transfer or dispose of such security or any interest in such security, or
(ii) enter into an agreement, commitment or other arrangement to sell,
pledge, encumber, grant an option with respect to, transfer or dispose of
such security or any interest therein. The term "Transfer" shall not
include the conversion of Series A Convertible Preferred Stock or Series B
Convertible Stock into shares of Company Common Stock.
(b) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
2. Transfer Restrictions.
(a) Transfer of Shares. At all times during the period commencing with
the execution and delivery of this Agreement and expiring on the date on which
the Company Stockholder Approval is obtained, Stockholder shall not Transfer any
of the Shares unless each Person to which any of such Shares, or any interest in
any of such Shares, is Transferred shall have: (i) executed a counterpart of
this Agreement, and (ii) agreed in writing to hold such Shares (or interest in
such Shares) subject to all of the terms and provisions of this Agreement
(except to the extent prohibited by applicable law).
(b) Transfer of Voting Rights. At all times during the period
commencing with the execution and delivery of this Agreement and expiring on the
Expiration Date, Stockholder shall not deposit (or permit the deposit of) any
Shares in a voting trust or grant any proxy or enter into any voting agreement
or similar agreement in contravention of the obligations of Stockholder under
this Agreement with respect to any of the Shares.
3. Vote of Shares.
(a) Agreement to Vote Shares. Stockholder hereby agrees that at any
meeting of the holders of Shares, however called, or in any other circumstance
upon which the vote or other approval of holders of Company Common Stock is
sought, all of such Stockholder's Shares shall be voted as set forth in Section
3(b).
(b) Execution and Delivery of Irrevocable Proxy. In order to secure
its obligations under Section 3(a), concurrently with this Agreement,
Stockholder has duly executed and delivered an irrevocable proxy in the form
attached as Exhibit A hereto (the "Irrevocable Proxy") appointing Parent and any
of its authorized representatives as such Stockholder's proxy with the power to
vote, at any meeting of the holders of Shares, however called, or in any other
circumstance upon which the vote or other approval of holders of Company Common
Stock is sought, all of such Stockholder's Shares: (x) in favor of the adoption
of the Merger Agreement and any actions required in furtherance of the
transactions contemplated thereby and hereby
- 2 -
(including, without limitation, in favor of the appointment of the Stockholder
Representatives named in Section 13.1 of the Merger Agreement and in favor of
the approval of the Asset Dispositions); (y) against any action or agreement
that would result in a breach in any material respect of any covenant,
representation or warranty or any other material obligation or agreement of
Company under the Merger Agreement; and (z) against the following actions (other
than the Merger and the transactions contemplated by the Merger Agreement
including, without limitation, the Asset Dispositions): (A) any Acquisition
Proposal other than an Acquisition Proposal with Parent or any Affiliate thereof
and (B) to the extent that such (1) are intended to, or could reasonably be
expected to, impede, interfere with, delay, postpone, or materially adversely
affect the Merger or the transactions contemplated by the Merger Agreement or
this Agreement, or (2) are intended to, or could reasonably be expected to,
implement or lead to any Acquisition Proposal (other than an Acquisition
Proposal with Parent or any Affiliate thereof): (I) any change in a majority of
the persons who constitute the Board of Directors of Company; (II) any change in
the present capitalization of Company or any amendment of Company's Certificate
of Incorporation or Bylaws; or (III) any other material change in Company's
corporate structure or business. In addition to the other covenants and
agreements of Stockholder provided for elsewhere in this Agreement, from the
execution of this Agreement until the Expiration Date, Stockholder shall not
enter into any agreement, arrangement or understanding with any Person or entity
to take any of the actions described in clause (y) or (z) of the foregoing
sentence, or the effect of which would violate the provisions and agreements
contained in this Section 3. To the extent that Stockholder is or becomes
(during the term hereof) a director or officer of the Company, he or she makes
no agreement, arrangement or understanding herein in his or her capacity as such
director or officer and nothing herein shall limit or affect, or give rise to
any liability to Stockholder by virtue of, any actions taken by Stockholder in
his or her capacity as an officer or director of Company (including, without
limitation, with respect to Company exercising its rights under the Merger
Agreement) or otherwise fulfilling his or her fiduciary obligations as a
director or officer of the Company. To the extent that Stockholder is a
corporation and a director or officer of Stockholder is or becomes (during the
term hereof) a director or officer of the Company, Stockholder makes no
agreement, arrangement or understanding herein relating to its director's or
officer's capacity as such director or officer of the Company and nothing herein
shall limit or affect, or give rise to any liability to Stockholder by virtue
of, any actions taken by Stockholder's director or officer in his or her
capacity as an officer or director of the Company (including, without
limitation, with respect to Company exercising its rights under the Merger
Agreement) or otherwise fulfilling his or her fiduciary obligations as a
director or officer of the Company.
4. Representations and Warranties of Stockholder. Stockholder hereby
represents and warrants to Parent as follows: (i) Stockholder is the beneficial
or record owner of the shares of Company Common Stock or Company Preferred Stock
indicated on the signature page of this Agreement; (ii) Stockholder does not
beneficially own any securities of Company other than the shares of Company
Common Stock, Company Preferred Stock and Equity Rights to purchase shares of
Company Common Stock set forth on the signature page of this Agreement; and
(iii) Stockholder has full power and authority to make, enter into and carry out
the terms of this Agreement.
5. Exchange of Shares; Waiver of Rights of Appraisal. If the Company
Stockholder Approval is obtained and the Merger is consummated, the Shares
shall, pursuant to the terms of the Merger Agreement, be exchanged for the
consideration provided in the Merger Agreement. Stockholder hereby waives any
and all rights of appraisal with respect to the Merger, or rights to dissent
from the Merger, that such Stockholder may have under Delaware Law or any other
applicable law.
6. Release of Claims. Stockholder has delivered to Parent, concurrently
with the execution hereof, a release, substantially in the form attached as
Exhibit B hereto.
7. Termination. This Agreement shall terminate and be of no further force
or effect whatsoever as of the Expiration Date.
- 3 -
8. Severability. If any term or other provision of this Agreement is held
invalid, illegal or incapable of being enforced by any court of competent
jurisdiction, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party hereto. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.
9. Binding Effect and Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, provided that except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interests or obligations of the parties hereto may be assigned by any of
the parties hereto without prior written consent of the other parties hereto
except as expressly contemplated by Section 2(a) hereof and except that Parent,
without obtaining the consent of any other party hereto, shall be entitled to
assign this Agreement or all or any of its rights or obligations hereunder to
any one or more Affiliates of Parent, but no assignment by Parent under this
Section 9 shall relieve Parent of its obligations under this Agreement. Any
assignment in violation of the foregoing shall be void.
10. Amendments and Modification. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by each of the parties hereto; provided that any
provision of this Agreement may be waived, or the time for its performance may
be extended, by the party or parties entitled to the benefit thereof by a
writing signed by each such party or an authorized representative thereof.
11. Specific Performance; Injunctive Relief. The parties hereto acknowledge
that Parent shall be irreparably harmed and that there shall be no adequate
remedy at law for a violation of any of the covenants or agreements of
Stockholder set forth in this Agreement. Therefore, Stockholder hereby agrees
that, in addition to any other remedies that may be available to Parent upon any
such violation, Parent shall have the right to enforce such covenants and
agreements by specific performance, injunctive relief or by any other means
available to such party at law or in equity.
12. Notices. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice): if to Parent, to its address provided in the
Merger Agreement, with a copy to Parent's counsel; and if to Stockholder, to
Stockholder's address shown below Stockholder's signature on the last page
hereof.
13. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, without reference to principles of conflicts of law.
14. Entire Agreement. This Agreement, together with the documents expressly
referred to herein, contain the entire understanding of the parties in respect
of the subject matter hereof, and supersede all prior negotiations and
understandings between the parties with respect to such subject matter.
15. Effect of Headings. The section headings are for convenience only and
shall not affect the construction or interpretation of this Agreement.
- 4 -
16. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the date first above written.
PARENT: STOCKHOLDER:
------------------------------- ----------------------------
By: By:
Its: Its:
Address:
--------------------------
--------------------------
--------------------------
Telephone: (___) _____-________
Shares Beneficially Owned:
_____________ shares of Company Common
Stock
_____________ shares of Company Preferred
Stock
____________ shares of Company Common
Stock subject to Equity Rights
- 5 -
EXHIBIT A
FORM OF IRREVOCABLE PROXY
By its execution hereof, and in order to secure its obligations under the
Stockholder Voting Agreement (the "Agreement") of even date herewith among
("Parent"), a Delaware corporation, and the undersigned ("Stockholder"),
Stockholder hereby irrevocably constitutes and appoints Parent and its
successors and assigns, with full power of substitution and resubstitution, from
the date hereof to the termination of the Agreement, as such Stockholder's true
and lawful attorney and proxy (its "Proxy"), for and in such Stockholder's name,
place and stead to vote all of the Shares of such Stockholder as such
Stockholder's Proxy at every annual, special or adjourned meeting of
stockholders of Company, and to sign on behalf of such Stockholder (as a
Stockholder of Company) any ballot, proxy, consent, certificate or other
document relating to Company that law permits or requires, as and to the extent
provided in Section 3 of the Agreement.
The attorneys and proxies named above may not exercise this Proxy on any other
matter except as provided in Section 3 of the Agreement. The Stockholder may
vote the Shares on all other matters. This Proxy is coupled with an interest and
Stockholder intends this Proxy to be irrevocable to the fullest extent permitted
by law. Stockholder hereby revokes any proxy previously granted by such
Stockholder with respect to such Stockholder's Shares. The Proxy will terminate
and be of no further force or effect, automatically, upon the Expiration Date.
To the extent that Stockholder is or becomes (during the term hereof) a director
or officer of the Company, he or she makes no agreement or understanding herein
in his or her capacity as such director or officer and nothing herein shall
limit or affect, or give rise to any liability to Stockholder by virtue of, any
actions taken by Stockholder in his or her capacity as an officer or director of
Company (including, without limitation, with respect to Company exercising its
rights under the Merger Agreement) or otherwise fulfilling his or her fiduciary
obligations as a director or officer of the Company.
To the extent that Stockholder is a corporation and a director or officer of
Stockholder is or becomes (during the term hereof) a director or officer of the
Company, Stockholder makes no agreement, arrangement or understanding herein
relating to its director's or officer's capacity as such director or officer of
the Company and nothing herein shall limit or affect, or give rise to any
liability to Stockholder by virtue of, any actions taken by Stockholder's
director or officer in his or her capacity as an officer or director of the
Company (including, without limitation, with respect to Company exercising its
rights under the Merger Agreement) or otherwise fulfilling his or her fiduciary
obligations as a director or officer of the Company.
This Proxy and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns, provided that except as otherwise specifically provided herein neither
this Proxy nor any of the rights, interest or obligations of the parties hereto
may be assigned by any of the parties hereto except as expressly contemplated by
Section 2(a) of the Agreement and except that Parent, without obtaining the
written consent of any other party hereto shall be entitled to assign this Proxy
to any one or more Affiliates of Parent, but no assignment by Parent of this
Proxy shall relieve Parent of its obligations under this Proxy. Any assignment
in violation of the foregoing shall be void.
Capitalized terms used but not defined herein shall have the meaning set forth
in the Agreement. Stockholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in
Parent or any of its nominees, the power to carry out and give effect to the
provisions of this Proxy.
A-1
IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Proxy
this day of March , 2003.
STOCKHOLDER:
--------------------------------
Name:
A-2
EXHIBIT B
FORM OF RELEASE OF CLAIMS
The undersigned on behalf of itself, and if the undersigned is an individual on
behalf of himself/herself and his/her family, heirs, executors, administrators,
legal representatives, beneficiaries and assigns, and if the undersigned is a
trust or foundation on behalf of its beneficiaries, trustees, legal
representatives, administrators and assigns, and if the undersigned is a
corporation on behalf of its officers, directors and assigns, and if the
undersigned is a partnership on behalf of its partners and assigns (collectively
referred to herein as "Stockholder"), pursuant to Section 6 of that certain
Stockholder Voting Agreement (the "Agreement"), dated as of March _, 2003, by
and among West Corporation and Stockholder, and in exchange for consideration,
the adequacy of which is acknowledged by Stockholder, does hereby
unconditionally release and forever discharge ITC Holding Company, Inc. and any
of its direct or indirect subsidiaries, affiliated companies and predecessors,
and their respective directors, officers, employees, members, agents and their
successors and assigns (collectively referred to herein as the "Company") from
any and all actions or inactions, causes of action, suits, controversies, claims
and demands whatsoever, for or by reason of any matter, cause or thing
whatsoever, whether known or unknown, including, but not limited to any alleged
tort, breach of express or implied contract, defamation, or violation of any
federal, state or local law or regulation, arising at any time on or before the
Closing Date (as defined in the Merger Agreement), or any such causes of action,
suits, controversies, claims or demands arising after the Closing Date with
respect to actions or inactions that occurred on or before the Closing Date, and
which accrued to the Stockholder in its capacity as a stockholder of ITC Holding
Company, Inc.
Notwithstanding the foregoing, this Release of Claims (this "Release") shall not
apply to any claim (i) for unpaid compensation for periods occurring on or
before the Closing Date; (ii) for reasonable business expenses that have not
been reimbursed for periods occurring on or before the Closing Date; (iii) for
benefits which may be due Stockholder under the Company's employee benefit or
severance plans or under Section 8.8 of the Merger Agreement; (iv) in the event
Stockholder is or was a director or officer of the Company, for amounts for
which Stockholder is indemnified (pursuant to the Merger Agreement or otherwise)
as a result of his/her serving as a director or officer; (v) for the right to
receive the Accredited Merger Consideration or the Non-Accredited Merger
Consideration (as those terms are defined in the Merger Agreement), as the case
may be; (vi) for any right to receive the Stockholder's pro-rata portion of any
funds placed in escrow pursuant to Section 4.3 of the Merger Agreement; or (vii)
in Stockholder's capacity as a Stockholder Representative pursuant to the Merger
Agreement, but in the case of clauses (i), (ii) and (iii) of this paragraph,
only to the extent that any such amounts (in the case of clauses (i) and (ii))
and the costs of any such benefits (in the case of clause (iii)) have been fully
accrued by the Company prior to the Effective Time.
Stockholder represents that he/she has not, prior to the date of this Release,
individually or with any person, filed, or commenced the filing of, any charges,
lawsuits, complaints or proceedings with any governmental agency, or against the
Company (any "Proceeding"), with respect to any of the matters released by
Stockholder pursuant to this Release. Stockholder covenants and agrees that
he/she will never, individually or with any person, file or commence the filing
of any Proceeding with respect to any of the matters released by Stockholder
pursuant to this Release.
Stockholder expressly acknowledges that the acts done and evidenced hereby, and
the release granted hereunder, are done and granted to compromise any doubtful
and disputed claims and to avoid litigation, and are not an admission by the
Company of any violation of any employment law, regulation, ordinance, or
B-1
administrative procedure, or any other federal, state, or local law, common law,
regulation or ordinance, liability for which is expressly denied.
This Release shall be effective from and after the Effective Time (as defined in
the Merger Agreement). This Release shall terminate automatically upon the
termination of the Merger Agreement and, accordingly, shall be rendered null and
void.
If any provision or paragraph of this Release is ever determined not
enforceable, the remaining provisions and paragraphs shall remain in full force
and effect.
Stockholder acknowledges that this Release will be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware.
Capitalized terms used but not defined herein shall have the meaning set forth
in the Agreement.
B-2
STOCKHOLDER ACKNOWLEDGES THAT HE/SHE HAS READ THIS RELEASE, THAT HE/SHE HAS BEEN
ADVISED THAT HE/SHE SHOULD CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS
RELEASE, AND THAT HE/SHE UNDERSTANDS ALL OF ITS TERMS AND EXECUTES IT
VOLUNTARILY AND WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND THE CONSEQUENCES
THEREOF.
-------------------------
Name:
Date:
B-3
[Form of Stockholder Voting Agreement - SCANA]
Exhibit 1
STOCKHOLDER VOTING AGREEMENT
THIS STOCKHOLDER VOTING AGREEMENT (this "Agreement") is made and entered
into as of March ___, 2003, by and among West Corporation ("Parent"), a Delaware
corporation, and the undersigned ("Stockholder").
RECITALS
A. Concurrently with the execution and delivery hereof, Parent, Dialing
Acquisition Corp. ("Sub"), a Delaware corporation and a direct wholly owned
subsidiary of Parent, and ITC Holding Company, Inc. ("Company"), a Delaware
corporation are entering into an Agreement and Plan of Merger of even date
herewith (as it may be amended from time to time pursuant to the terms thereof,
the "Merger Agreement"), which provides for the merger (the "Merger") of Sub
with and into Company in accordance with its terms.
B. Stockholder is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of such number of shares of the outstanding capital stock of
Company and shares subject to outstanding Equity Rights to acquire Company
capital stock as is indicated on the signature page of this Agreement.
C. In consideration of the execution and delivery of the Merger Agreement
by Parent and Sub, Stockholder desires to agree to vote such Stockholder's
Shares (as defined herein) and deliver an irrevocable proxy to Parent for such
Shares so as to facilitate the consummation of the Merger.
NOW, THEREFORE, intending to be legally bound, the parties hereto hereby
agree as follows:
1. Certain Definitions.
(a) Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed thereto in the Merger Agreement. For all purposes of and
under this Agreement, the following terms shall have the following respective
meanings:
"Company Common Stock" means the shares of common stock, $0.01
par value per share, of Company.
"Company Preferred Stock" means, collectively, the Series A
Convertible Preferred Stock and the Series B Convertible Preferred
Stock.
"Expiration Date" means the earlier to occur of (i) such date and
time as the Merger Agreement shall have been terminated pursuant to
the terms of Article 10 thereof or (ii) the Effective Time.
"Person" means any individual, corporation, limited liability
company, general or limited partnership, unincorporated association,
joint venture, or other business enterprise or entity.
"Series A Convertible Preferred Stock" means the $0.01 par value
preferred stock of Company designated as Series A Convertible
Preferred Stock.
"Series B Convertible Preferred Stock" means the $0.01 par value
preferred stock of Company designated as Series B Convertible
Preferred Stock.
"Shares" means (i) all shares of Company Common Stock, Company
Preferred Stock and other voting securities of Company owned,
beneficially or of record, by Stockholder as of the date hereof, (ii)
all additional shares of Company Common Stock, Company Preferred Stock
and other voting securities of Company acquired by Stockholder,
beneficially or of record, during the period commencing with the
execution and delivery of this Agreement and expiring on the
Expiration Date, and (iii) such other shares of Company Common Stock,
Company Preferred Stock and other voting securities of Company over
which Stockholder has or will have voting power.
"Transfer" means, with respect to any security, to directly or
indirectly (i) sell, pledge, encumber, grant an option with respect
to, transfer or dispose of such security or any interest in such
security, or (ii) enter into an agreement, commitment or other
arrangement to sell, pledge, encumber, grant an option with respect
to, transfer or dispose of such security or any interest therein. The
term "Transfer" shall not include the conversion of Series A
Convertible Preferred Stock or Series B Convertible Stock into shares
of Company Common Stock.
(b) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
2. Transfer Restrictions/Conversion/Waiver of Rights.
(a) Transfer of Shares. At all times during the period commencing with
the execution and delivery of this Agreement and expiring on the date on which
the Company Stockholder Approval is obtained, Stockholder shall not Transfer any
of the Shares unless each Person to which any of such Shares, or any interest in
any of such Shares, is Transferred shall have: (i) executed a counterpart of
this Agreement, and (ii) agreed in writing to hold such Shares (or interest in
such Shares) subject to all of the terms and provisions of this Agreement
(except to the extent prohibited by applicable law).
(b) Transfer of Voting Rights. At all times during the period
commencing with the execution and delivery of this Agreement and expiring on the
Expiration Date, Stockholder shall not deposit (or permit the deposit of) any
Shares in a voting trust or grant any proxy or enter into any voting agreement
or similar agreement in contravention of the obligations of Stockholder under
this Agreement with respect to any of the Shares.
(c) Conversion of Company Preferred Stock/Waiver of Rights.
Immediately prior to the Effective Time (as defined in the Merger Agreement)
under the Merger Agreement, and subject to the satisfaction or waiver of the
conditions precedent to the obligations to consummate the Merger, Stockholder
agrees to convert all shares of Company Preferred Stock held by Stockholder into
shares of Company Common Stock in accordance with the terms of the Certificates
of Designation for the Series A Convertible Preferred Stock and Series B
Convertible Preferred Stock as in effect on the date of such conversion. In
addition, Stockholder hereby waives its rights to require the Company to satisfy
the conditions set forth in Section 6.5 and 6.6 of the Certificates of
Designation for the Series A Convertible Preferred Stock and Series B
Convertible Preferred Stock in connection with the transactions contemplated by
the Merger Agreement.
3. Vote of Shares.
(a) Agreement to Vote Shares. Stockholder hereby agrees that at any
meeting of the holders of Shares, however called, or in any other circumstance
upon which the vote or other approval of
- 2 -
holders of Company Common Stock or Company Preferred Stock is sought, all of
such Stockholder's Shares shall be voted as set forth in Section 3(b).
(b) Execution and Delivery of Irrevocable Proxy. In order to secure
its obligations under Section 3(a), concurrently with this Agreement,
Stockholder has duly executed and delivered an irrevocable proxy in the form
attached as Exhibit A hereto (the "Irrevocable Proxy") appointing Parent and any
of its authorized representatives as such Stockholder's proxy with the power to
vote, at any meeting of the holders of Shares, however called, or in any other
circumstance upon which the vote or other approval of holders of Company Common
Stock or Company Preferred Stock is sought, all of such Stockholder's Shares:
(x) in favor of the adoption of the Merger Agreement and any actions required in
furtherance of the transactions contemplated thereby and hereby (including,
without limitation, in favor of the appointment of the Stockholder
Representatives named in Section 13.1 of the Merger Agreement and in favor of
the approval of the Asset Dispositions); (y) against any action or agreement
that would result in a breach in any material respect of any covenant,
representation or warranty or any other material obligation or agreement of
Company under the Merger Agreement; and (z) against the following actions (other
than the Merger and the transactions contemplated by the Merger Agreement
including, without limitation, the Asset Dispositions): (A) any Acquisition
Proposal other than an Acquisition Proposal with Parent or any Affiliate thereof
and (B) to the extent that such (1) are intended to, or could reasonably be
expected to, impede, interfere with, delay, postpone, or materially adversely
affect the Merger or the transactions contemplated by the Merger Agreement or
this Agreement, or (2) are intended to, or could reasonably be expected to,
implement or lead to any Acquisition Proposal (other than an Acquisition
Proposal with Parent or any Affiliate thereof): (I) any change in a majority of
the persons who constitute the Board of Directors of Company; (II) any change in
the present capitalization of Company or any amendment of Company's Certificate
of Incorporation or Bylaws; or (III) any other material change in Company's
corporate structure or business. In addition to the other covenants and
agreements of Stockholder provided for elsewhere in this Agreement, from the
execution of this Agreement until the Expiration Date, Stockholder shall not
enter into any agreement, arrangement or understanding with any Person or entity
to take any of the actions described in clause (y) or (z) of the foregoing
sentence, or the effect of which would violate the provisions and agreements
contained in this Section 3. To the extent that Stockholder is or becomes
(during the term hereof) a director or officer of the Company, he or she makes
no agreement, arrangement or understanding herein in his or her capacity as such
director or officer and nothing herein shall limit or affect, or give rise to
any liability to Stockholder by virtue of, any actions taken by Stockholder in
his or her capacity as an officer or director of Company (including, without
limitation, with respect to Company exercising its rights under the Merger
Agreement) or otherwise fulfilling his or her fiduciary obligations as a
director or officer of the Company. To the extent that Stockholder is a
corporation and a director or officer of Stockholder is or becomes (during the
term hereof) a director or officer of the Company, Stockholder makes no
agreement, arrangement or understanding herein relating to its director's or
officer's capacity as such director or officer of the Company and nothing herein
shall limit or affect, or give rise to any liability to Stockholder by virtue
of, any actions taken by Stockholder's director or officer in his or her
capacity as an officer or director of the Company (including, without
limitation, with respect to Company exercising its rights under the Merger
Agreement) or otherwise fulfilling his or her fiduciary obligations as a
director or officer of the Company.
4. Representations and Warranties of Stockholder. Stockholder hereby
represents and warrants to Parent as follows: (i) Stockholder is the beneficial
or record owner of the shares of Company Common Stock or Company Preferred Stock
indicated on the signature page of this Agreement; (ii) Stockholder does not
beneficially own any securities of Company other than the shares of Company
Common Stock, Company Preferred Stock and Equity Rights to purchase shares of
Company Common Stock set forth on the signature page of this Agreement; and
(iii) Stockholder has full power and authority to make, enter into and carry out
the terms of this Agreement.
- 3 -
5. Exchange of Shares; Waiver of Rights of Appraisal. If the Company
Stockholder Approval is obtained and the Merger is consummated, the Shares
shall, pursuant to the terms of the Merger Agreement, be exchanged for the
consideration provided in the Merger Agreement. Stockholder hereby waives any
and all rights of appraisal with respect to the Merger, or rights to dissent
from the Merger, that such Stockholder may have under Delaware Law or any other
applicable law.
6. Release of Claims. Stockholder has delivered to Parent, concurrently
with the execution hereof, a release, substantially in the form attached as
Exhibit B hereto.
7. Termination. This Agreement shall terminate and be of no further force
or effect whatsoever as of the Expiration Date.
8. Severability. If any term or other provision of this Agreement is held
invalid, illegal or incapable of being enforced by any court of competent
jurisdiction, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party hereto. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.
9. Binding Effect and Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, provided that except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interests or obligations of the parties hereto may be assigned by any of
the parties hereto without prior written consent of the other parties hereto
except as expressly contemplated by Section 2(a) hereof and except that Parent,
without obtaining the consent of any other party hereto, shall be entitled to
assign this Agreement or all or any of its rights or obligations hereunder to
any one or more Affiliates of Parent, but no assignment by Parent under this
Section 9 shall relieve Parent of its obligations under this Agreement. Any
assignment in violation of the foregoing shall be void.
10. Amendments and Modification. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by each of the parties hereto; provided that any
provision of this Agreement may be waived, or the time for its performance may
be extended, by the party or parties entitled to the benefit thereof by a
writing signed by each such party or an authorized representative thereof.
11. Specific Performance; Injunctive Relief. The parties hereto acknowledge
that Parent shall be irreparably harmed and that there shall be no adequate
remedy at law for a violation of any of the covenants or agreements of
Stockholder set forth in this Agreement. Therefore, Stockholder hereby agrees
that, in addition to any other remedies that may be available to Parent upon any
such violation, Parent shall have the right to enforce such covenants and
agreements by specific performance, injunctive relief or by any other means
available to such party at law or in equity.
12. Notices. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice): if to Parent, to its address provided in the
Merger Agreement, with a
- 4 -
copy to Parent's counsel; and if to Stockholder, to Stockholder's address shown
below Stockholder's signature on the last page hereof.
13. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, without reference to principles of conflicts of law.
14. Entire Agreement. This Agreement, together with the documents expressly
referred to herein, contain the entire understanding of the parties in respect
of the subject matter hereof, and supersede all prior negotiations and
understandings between the parties with respect to such subject matter.
15. Effect of Headings. The section headings are for convenience only and
shall not affect the construction or interpretation of this Agreement.
16. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
[Signatures on Next Page]
- 5 -
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the date first above written.
WEST CORPORATION SCANA COMMUNICATIONS HOLDING, INC.
By: By:
------------------------------ ------------------------------------
Its: Its:
------------------------------ ------------------------------------
Address:
-----------------------------------------
-----------------------------------------
-----------------------------------------
Telephone: (___) _____-________
Shares Beneficially Owned:
_____________ shares of Company Common
Stock
_____________ shares of Company Preferred
Stock
_____________ shares of Company Common
Stock subject to Equity Rights
ACKNOWLEDGED AND AGREED BY:
ITC HOLDING COMPANY, INC.
By:
------------------------------
Its:
------------------------------
- 6 -
EXHIBIT A
---------
FORM OF IRREVOCABLE PROXY
By its execution hereof, and in order to secure its obligations under the
Stockholder Voting Agreement (the "Agreement") of even date herewith among West
Corporation ("Parent"), a Delaware corporation, and the undersigned
("Stockholder"), Stockholder hereby irrevocably constitutes and appoints Parent
and its successors and assigns, with full power of substitution and
resubstitution, from the date hereof to the termination of the Agreement, as
such Stockholder's true and lawful attorney and proxy (its "Proxy"), for and in
such Stockholder's name, place and stead to vote all of the Shares of such
Stockholder as such Stockholder's Proxy at every annual, special or adjourned
meeting of stockholders of Company, and to sign on behalf of such Stockholder
(as a Stockholder of Company) any ballot, proxy, consent, certificate or other
document relating to Company that law permits or requires, as and to the extent
provided in Section 3 of the Agreement.
The attorneys and proxies named above may not exercise this Proxy on any other
matter except as provided in Section 3 of the Agreement. The Stockholder may
vote the Shares on all other matters. This Proxy is coupled with an interest and
Stockholder intends this Proxy to be irrevocable to the fullest extent permitted
by law. Stockholder hereby revokes any proxy previously granted by such
Stockholder with respect to such Stockholder's Shares. The Proxy will terminate
and be of no further force or effect, automatically, upon the Expiration Date.
To the extent that Stockholder is or becomes (during the term hereof) a director
or officer of the Company, he or she makes no agreement or understanding herein
in his or her capacity as such director or officer and nothing herein shall
limit or affect, or give rise to any liability to Stockholder by virtue of, any
actions taken by Stockholder in his or her capacity as an officer or director of
Company (including, without limitation, with respect to Company exercising its
rights under the Merger Agreement) or otherwise fulfilling his or her fiduciary
obligations as a director or officer of the Company.
To the extent that Stockholder is a corporation and a director or officer of
Stockholder is or becomes (during the term hereof) a director or officer of the
Company, Stockholder makes no agreement, arrangement or understanding herein
relating to its director's or officer's capacity as such director or officer of
the Company and nothing herein shall limit or affect, or give rise to any
liability to Stockholder by virtue of, any actions taken by Stockholder's
director or officer in his or her capacity as an officer or director of the
Company (including, without limitation, with respect to Company exercising its
rights under the Merger Agreement) or otherwise fulfilling his or her fiduciary
obligations as a director or officer of the Company.
This Proxy and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns, provided that except as otherwise specifically provided herein neither
this Proxy nor any of the rights, interest or obligations of the parties hereto
may be assigned by any of the parties hereto except as expressly contemplated by
Section 2(a) of the Agreement and except that Parent, without obtaining the
written consent of any other party hereto shall be entitled to assign this Proxy
to any one or more Affiliates of Parent, but no assignment by Parent of this
Proxy shall relieve Parent of its obligations under this Proxy. Any assignment
in violation of the foregoing shall be void.
A-1
Capitalized terms used but not defined herein shall have the meaning set forth
in the Agreement. Stockholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in
Parent or any of its nominees, the power to carry out and give effect to the
provisions of this Proxy.
[Signature on Next Page]
A-2
IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Proxy this ___
day of March, 2003.
SCANA COMMUNICATIONS HOLDING, INC.
By:
-------------------------------
Its:
-------------------------------
A-3
EXHIBIT B
---------
FORM OF RELEASE OF CLAIMS
The undersigned on behalf of itself, and if the undersigned is an individual on
behalf of himself/herself and his/her family, heirs, executors, administrators,
legal representatives, beneficiaries and assigns, and if the undersigned is a
trust or foundation on behalf of its beneficiaries, trustees, legal
representatives, administrators and assigns, and if the undersigned is a
corporation on behalf of its officers, directors and assigns, and if the
undersigned is a partnership on behalf of its partners and assigns (collectively
referred to herein as "Stockholder"), pursuant to Section 6 of that certain
Stockholder Voting Agreement (the "Agreement"), dated as of March ___, 2003, by
and among West Corporation and Stockholder, and in exchange for consideration,
the adequacy of which is acknowledged by Stockholder, does hereby
unconditionally release and forever discharge ITC Holding Company, Inc. and any
of its direct or indirect subsidiaries, affiliated companies and predecessors,
and their respective directors, officers, employees, members, agents and their
successors and assigns (collectively referred to herein as the "Company") from
any and all actions or inactions, causes of action, suits, controversies, claims
and demands whatsoever, for or by reason of any matter, cause or thing
whatsoever, whether known or unknown, including, but not limited to any alleged
tort, breach of express or implied contract, defamation, or violation of any
federal, state or local law or regulation, arising at any time on or before the
Closing Date (as defined in the Merger Agreement), or any such causes of action,
suits, controversies, claims or demands arising after the Closing Date with
respect to actions or inactions that occurred on or before the Closing Date, and
which accrued to the Stockholder in its capacity as a stockholder of ITC Holding
Company, Inc.
Notwithstanding the foregoing, this Release of Claims (this "Release") shall not
apply to any claim (i) for unpaid compensation for periods occurring on or
before the Closing Date; (ii) for reasonable business expenses that have not
been reimbursed for periods occurring on or before the Closing Date; (iii) for
benefits which may be due Stockholder under the Company's employee benefit or
severance plans or under Section 8.8 of the Merger Agreement; (iv) in the event
Stockholder is or was a director or officer of the Company, for amounts for
which Stockholder is indemnified (pursuant to the Merger Agreement or otherwise)
as a result of his/her serving as a director or officer; (v) for the right to
receive the Accredited Merger Consideration or the Non-Accredited Merger
Consideration, as the case may be; (vi) for any right to receive the
Stockholder's pro-rata portion of any funds placed in escrow pursuant to Section
4.3 of the Merger Agreement; or (vii) in Stockholder's capacity as a Stockholder
Representative pursuant to the Merger Agreement, but in the case of clauses (i),
(ii) and (iii) of this paragraph, only to the extent that any such amounts (in
the case of clauses (i) and (ii)) and the costs of any such benefits (in the
case of clause (iii)) have been fully accrued by the Company prior to the
Effective Time.
Stockholder represents that he/she has not, prior to the date of this Release,
individually or with any person, filed, or commenced the filing of, any charges,
lawsuits, complaints or proceedings with any governmental agency, or against the
Company (any "Proceeding"), with respect to any of the matters released by
Stockholder pursuant to this Release. Stockholder covenants and agrees that
he/she will never, individually or with any person, file or commence the filing
of any Proceeding with respect to any of the matters released by Stockholder
pursuant to this Release.
Stockholder expressly acknowledges that the acts done and evidenced hereby, and
the release granted hereunder, are done and granted to compromise any doubtful
and disputed claims and to avoid litigation, and
B-1
are not an admission by the Company of any violation of any employment law,
regulation, ordinance, or administrative procedure, or any other federal, state,
or local law, common law, regulation or ordinance, liability for which is
expressly denied. This Release shall be effective from and after the Effective
Time (as defined in the Merger Agreement).
This Release shall terminate automatically upon the termination of the Merger
Agreement and, accordingly, shall be rendered null and void. If any provision or
paragraph of this Release is ever determined not enforceable, the remaining
provisions and paragraphs shall remain in full force and effect.
Stockholder acknowledges that this Release will be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware.
Capitalized terms used but not defined herein shall have the meaning set forth
in the Agreement.
[Signature on Next Page]
B-2
STOCKHOLDER ACKNOWLEDGES THAT IT HAS READ THIS RELEASE, THAT IT HAS BEEN ADVISED
THAT IT SHOULD CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS RELEASE, AND THAT
IT UNDERSTANDS ALL OF THE RELEASE TERMS AND EXECUTES THE RELEASE VOLUNTARILY AND
WITH FULL KNOWLEDGE OF THE SIGNIFICANCE AND THE CONSEQUENCES OF THE RELEASE.
SCANA COMMUNICATIONS HOLDING, INC.
By:
-------------------------------
Its:
-------------------------------
Date:
------------------------------
B-3
[Form of Stockholder Voting Agreement - Xx. Xxxxxx/Xx. Xxxxx]
Exhibit 1
STOCKHOLDER VOTING AGREEMENT
THIS STOCKHOLDER VOTING AGREEMENT (this "Agreement") is made and entered
into as of March __, 2003, by and among __________ ("Parent"), a Delaware
corporation, and the undersigned ("Stockholder").
RECITALS
A. Concurrently with the execution and delivery hereof, Parent, _________
("Sub"), a Delaware corporation and a direct wholly owned subsidiary of Parent,
and __________ ("Company"), a Delaware corporation are entering into an
Agreement and Plan of Merger of even date herewith (as it may be amended from
time to time pursuant to the terms thereof, the "Merger Agreement"), which
provides for the merger (the "Merger") of Sub with and into Company in
accordance with its terms.
B. Stockholder is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of such number of shares of the outstanding capital stock of
Company and shares subject to outstanding Equity Rights to acquire Company
capital stock as is indicated on the signature page of this Agreement.
C. In consideration of the execution and delivery of the Merger Agreement
by Parent and Sub, Stockholder desires to agree to vote such Stockholder's
Shares (as defined herein) and deliver an irrevocable proxy to Parent for such
Shares so as to facilitate the consummation of the Merger.
NOW, THEREFORE, intending to be legally bound, the parties hereto hereby
agree as follows:
1. Certain Definitions.
(a) Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed thereto in the Merger Agreement. For all purposes of
and under this Agreement, the following terms shall have the following
respective meanings:
"Company Common Stock" means the shares of common stock, $0.01
par value per share, of Company.
"Company Preferred Stock" means, collectively, the Series A
Convertible Preferred Stock and the Series B Convertible Preferred Stock.
"Expiration Date" means the earlier to occur of (i) such date and
time as the Merger Agreement shall have been terminated pursuant to the
terms of Article 10 thereof or (ii) the Effective Time.
"Person" means any individual, corporation, limited liability
company, general or limited partnership, unincorporated association, joint
venture, or other business enterprise or entity.
"Series A Convertible Preferred Stock" means the $0.01 par value
preferred stock of Company designated as Series A Convertible Preferred
Stock.
"Series B Convertible Preferred Stock" means the $0.01 par value
preferred stock of Company designated as Series B Convertible Preferred
Stock.
"Shares" means (i) all shares of Company Common Stock, Company
Preferred Stock and other voting securities of Company owned, beneficially
or of record, by Stockholder as of the date hereof, (ii) all additional
shares of Company Common Stock, Company Preferred Stock and other voting
securities of Company acquired by Stockholder, beneficially or of record,
during the period commencing with the execution and delivery of this
Agreement and expiring on the Expiration Date, and (iii) such other shares
of Company Common Stock, Company Preferred Stock and other voting
securities of Company over which Stockholder has or will have voting power.
"Transfer" means, with respect to any security, to directly or
indirectly (i) sell, pledge, encumber, grant an option with respect to,
transfer or dispose of such security or any interest in such security, or
(ii) enter into an agreement, commitment or other arrangement to sell,
pledge, encumber, grant an option with respect to, transfer or dispose of
such security or any interest therein. The term "Transfer" shall not
include the conversion of Series A Convertible Preferred Stock or Series B
Convertible Stock into shares of Company Common Stock.
(b) Any singular term in this Agreement shall be deemed to include
the plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
2. Transfer Restrictions.
(a) Transfer of Shares. At all times during the period commencing
with the execution and delivery of this Agreement and expiring on the date on
which the Company Stockholder Approval is obtained, Stockholder shall not
Transfer any of the Shares unless each Person to which any of such Shares, or
any interest in any of such Shares, is Transferred shall have: (i) executed a
counterpart of this Agreement, and (ii) agreed in writing to hold such Shares
(or interest in such Shares) subject to all of the terms and provisions of this
Agreement (except to the extent prohibited by applicable law).
(b) Transfer of Voting Rights. At all times during the period
commencing with the execution and delivery of this Agreement and expiring on the
Expiration Date, Stockholder shall not deposit (or permit the deposit of) any
Shares in a voting trust or grant any proxy or enter into any voting agreement
or similar agreement in contravention of the obligations of Stockholder under
this Agreement with respect to any of the Shares.
3. Vote of Shares.
(a) Agreement to Vote Shares. Stockholder hereby agrees that at any
meeting of the holders of Shares, however called, or in any other circumstance
upon which the vote or other approval of holders of Company Common Stock is
sought, all of such Stockholder's Shares shall be voted as set forth in Section
3(b).
(b) Execution and Delivery of Irrevocable Proxy. In order to secure
its obligations under Section 3(a), concurrently with this Agreement,
Stockholder has duly executed and delivered an irrevocable proxy in the form
attached as Exhibit A hereto (the "Irrevocable Proxy") appointing Parent and any
of its authorized representatives as such Stockholder's proxy with the power to
vote, at any meeting of the holders of Shares, however called, or in any other
circumstance upon which the vote or other approval of holders of Company Common
Stock is sought, all of such Stockholder's Shares: (x) in favor of the adoption
of the Merger Agreement and any actions required in furtherance of the
transactions contemplated thereby and hereby
- 2 -
(including, without limitation, in favor of the appointment of the Stockholder
Representatives named in Section 13.1 of the Merger Agreement and in favor of
the approval of the Asset Dispositions); (y) against any action or agreement
that would result in a breach in any material respect of any covenant,
representation or warranty or any other material obligation or agreement of
Company under the Merger Agreement; and (z) against the following actions (other
than the Merger and the transactions contemplated by the Merger Agreement
including, without limitation, the Asset Dispositions): (A) any Acquisition
Proposal other than an Acquisition Proposal with Parent or any Affiliate thereof
and (B) to the extent that such (1) are intended to, or could reasonably be
expected to, impede, interfere with, delay, postpone, or materially adversely
affect the Merger or the transactions contemplated by the Merger Agreement or
this Agreement, or (2) are intended to, or could reasonably be expected to,
implement or lead to any Acquisition Proposal (other than an Acquisition
Proposal with Parent or any Affiliate thereof): (I) any change in a majority of
the persons who constitute the Board of Directors of Company; (II) any change in
the present capitalization of Company or any amendment of Company's Certificate
of Incorporation or Bylaws; or (III) any other material change in Company's
corporate structure or business. In addition to the other covenants and
agreements of Stockholder provided for elsewhere in this Agreement, from the
execution of this Agreement until the Expiration Date, Stockholder shall not
enter into any agreement, arrangement or understanding with any Person or entity
to take any of the actions described in clause (y) or (z) of the foregoing
sentence, or the effect of which would violate the provisions and agreements
contained in this Section 3. To the extent that Stockholder is or becomes
(during the term hereof) a director or officer of the Company, he or she makes
no agreement, arrangement or understanding herein in his or her capacity as such
director or officer and nothing herein shall limit or affect, or give rise to
any liability to Stockholder by virtue of, any actions taken by Stockholder in
his or her capacity as an officer or director of Company (including, without
limitation, with respect to Company exercising its rights under the Merger
Agreement) or otherwise fulfilling his or her fiduciary obligations as a
director or officer of the Company. To the extent that Stockholder is a
corporation and a director or officer of Stockholder is or becomes (during the
term hereof) a director or officer of the Company, Stockholder makes no
agreement, arrangement or understanding herein relating to its director's or
officer's capacity as such director or officer of the Company and nothing herein
shall limit or affect, or give rise to any liability to Stockholder by virtue
of, any actions taken by Stockholder's director or officer in his or her
capacity as an officer or director of the Company (including, without
limitation, with respect to Company exercising its rights under the Merger
Agreement) or otherwise fulfilling his or her fiduciary obligations as a
director or officer of the Company.
4. Representations and Warranties of Stockholder. Stockholder hereby
represents and warrants to Parent as follows: (i) Stockholder is the beneficial
or record owner of the shares of Company Common Stock or Company Preferred Stock
indicated on the signature page of this Agreement; (ii) Stockholder does not
beneficially own any securities of Company other than the shares of Company
Common Stock, Company Preferred Stock and Equity Rights to purchase shares of
Company Common Stock set forth on the signature page of this Agreement; and
(iii) Stockholder has full power and authority to make, enter into and carry out
the terms of this Agreement.
5. Exchange of Shares; Waiver of Rights of Appraisal. If the Company
Stockholder Approval is obtained and the Merger is consummated, the Shares
shall, pursuant to the terms of the Merger Agreement, be exchanged for the
consideration provided in the Merger Agreement. Stockholder hereby waives any
and all rights of appraisal with respect to the Merger, or rights to dissent
from the Merger, that such Stockholder may have under Delaware Law or any other
applicable law.
6. Release of Claims. Stockholder has delivered to Parent, concurrently
with the execution hereof, a release, substantially in the form attached as
Exhibit B hereto.
7. Termination. This Agreement shall terminate and be of no further force
or effect whatsoever as of the Expiration Date.
- 3 -
8. Severability. If any term or other provision of this Agreement is held
invalid, illegal or incapable of being enforced by any court of competent
jurisdiction, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party hereto. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.
9. Binding Effect and Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, provided that
except as otherwise specifically provided herein, neither this Agreement nor any
of the rights, interests or obligations of the parties hereto may be assigned by
any of the parties hereto without prior written consent of the other parties
hereto except as expressly contemplated by Section 2(a) hereof and except that
Parent, without obtaining the consent of any other party hereto, shall be
entitled to assign this Agreement or all or any of its rights or obligations
hereunder to any one or more Affiliates of Parent, but no assignment by Parent
under this Section 9 shall relieve Parent of its obligations under this
Agreement. Any assignment in violation of the foregoing shall be void.
10. Amendments and Modification. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by each of the parties hereto; provided that any
provision of this Agreement may be waived, or the time for its performance may
be extended, by the party or parties entitled to the benefit thereof by a
writing signed by each such party or an authorized representative thereof.
11. Specific Performance; Injunctive Relief. The parties hereto
acknowledge that Parent shall be irreparably harmed and that there shall be no
adequate remedy at law for a violation of any of the covenants or agreements of
Stockholder set forth in this Agreement. Therefore, Stockholder hereby agrees
that, in addition to any other remedies that may be available to Parent upon any
such violation, Parent shall have the right to enforce such covenants and
agreements by specific performance, injunctive relief or by any other means
available to such party at law or in equity.
12. Notices. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice): if to Parent, to its address provided in the
Merger Agreement, with a copy to Parent's counsel; and if to Stockholder, to
Stockholder's address shown below Stockholder's signature on the last page
hereof.
13. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, without reference to principles of conflicts of law.
14. Entire Agreement. This Agreement, together with the documents
expressly referred to herein, contain the entire understanding of the parties in
respect of the subject matter hereof, and supersede all prior negotiations and
understandings between the parties with respect to such subject matter.
15. Effect of Headings. The section headings are for convenience only and
shall not affect the construction or interpretation of this Agreement.
- 4 -
16. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the date first above written.
PARENT: STOCKHOLDER:
------------------------------- ------------------------------------
By: By:
Its: Its:
Address:
------------------------------------
------------------------------------
------------------------------------
Telephone: (___) _______-___________
Shares Beneficially Owned:
______________ shares of Company
Common Stock
______________ shares of Company
Preferred Stock
______________ shares of Company
Common Stock subject to Equity
Rights
- 5 -
EXHIBIT A
---------
FORM OF IRREVOCABLE PROXY
By its execution hereof, and in order to secure its obligations under the
Stockholder Voting Agreement (the "Agreement") of even date herewith among
("Parent"), a Delaware corporation, and the undersigned ("Stockholder"),
Stockholder hereby irrevocably constitutes and appoints Parent and its
successors and assigns, with full power of substitution and resubstitution, from
the date hereof to the termination of the Agreement, as such Stockholder's true
and lawful attorney and proxy (its "Proxy"), for and in such Stockholder's name,
place and stead to vote all of the Shares of such Stockholder as such
Stockholder's Proxy at every annual, special or adjourned meeting of
stockholders of Company, and to sign on behalf of such Stockholder (as a
Stockholder of Company) any ballot, proxy, consent, certificate or other
document relating to Company that law permits or requires, as and to the extent
provided in Section 3 of the Agreement.
The attorneys and proxies named above may not exercise this Proxy on any other
matter except as provided in Section 3 of the Agreement. The Stockholder may
vote the Shares on all other matters. This Proxy is coupled with an interest and
Stockholder intends this Proxy to be irrevocable to the fullest extent permitted
by law. Stockholder hereby revokes any proxy previously granted by such
Stockholder with respect to such Stockholder's Shares. The Proxy will terminate
and be of no further force or effect, automatically, upon the Expiration Date.
To the extent that Stockholder is or becomes (during the term hereof) a director
or officer of the Company, he or she makes no agreement or understanding herein
in his or her capacity as such director or officer and nothing herein shall
limit or affect, or give rise to any liability to Stockholder by virtue of, any
actions taken by Stockholder in his or her capacity as an officer or director of
Company (including, without limitation, with respect to Company exercising its
rights under the Merger Agreement) or otherwise fulfilling his or her fiduciary
obligations as a director or officer of the Company.
To the extent that Stockholder is a corporation and a director or officer of
Stockholder is or becomes (during the term hereof) a director or officer of the
Company, Stockholder makes no agreement, arrangement or understanding herein
relating to its director's or officer's capacity as such director or officer of
the Company and nothing herein shall limit or affect, or give rise to any
liability to Stockholder by virtue of, any actions taken by Stockholder's
director or officer in his or her capacity as an officer or director of the
Company (including, without limitation, with respect to Company exercising its
rights under the Merger Agreement) or otherwise fulfilling his or her fiduciary
obligations as a director or officer of the Company.
This Proxy and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns, provided that except as otherwise specifically provided herein neither
this Proxy nor any of the rights, interest or obligations of the parties hereto
may be assigned by any of the parties hereto except as expressly contemplated by
Section 2(a) of the Agreement and except that Parent, without obtaining the
written consent of any other party hereto shall be entitled to assign this Proxy
to any one or more Affiliates of Parent, but no assignment by Parent of this
Proxy shall relieve Parent of its obligations under this Proxy. Any assignment
in violation of the foregoing shall be void.
Capitalized terms used but not defined herein shall have the meaning set forth
in the Agreement. Stockholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in
Parent or any of its nominees, the power to carry out and give effect to the
provisions of this Proxy.
A-1
IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Proxy
this day of March __, 2003.
STOCKHOLDER:
---------------------------------------------
Name:
A-2
EXHIBIT B
FORM OF RELEASE OF CLAIMS
The undersigned on behalf of itself, and if the undersigned is an individual on
behalf of himself/herself and his/her family, heirs, executors, administrators,
legal representatives, beneficiaries and assigns, and if the undersigned is a
trust or foundation on behalf of its beneficiaries, trustees, legal
representatives, administrators and assigns, and if the undersigned is a
corporation on behalf of its officers, directors and assigns, and if the
undersigned is a partnership on behalf of its partners and assigns (collectively
referred to herein as "Stockholder"), pursuant to Section 6 of that certain
Stockholder Voting Agreement (the "Agreement"), dated as of March _, 2003, by
and among West Corporation and Stockholder, and in exchange for consideration,
the adequacy of which is acknowledged by Stockholder, does hereby
unconditionally release and forever discharge ITC Holding Company, Inc. and any
of its direct or indirect subsidiaries, affiliated companies and predecessors,
and their respective directors, officers, employees, members, agents and their
successors and assigns (collectively referred to herein as the "Company") from
any and all actions or inactions, causes of action, suits, controversies, claims
and demands whatsoever, for or by reason of any matter, cause or thing
whatsoever, whether known or unknown, including, but not limited to any alleged
tort, breach of express or implied contract, defamation, or violation of any
federal, state or local law or regulation, arising at any time on or before the
Closing Date (as defined in the Merger Agreement), or any such causes of action,
suits, controversies, claims or demands arising after the Closing Date with
respect to actions or inactions that occurred on or before the Closing Date, and
which accrued to the Stockholder in its capacity as an officer, director,
employee or stockholder of ITC Holding Company, Inc. and any of its direct or
indirect subsidiaries, affiliated companies and predecessors; provided, that
Stockholder is not, and shall not be deemed to be, releasing any claims
Stockholder may have against PRE Solutions, Inc. xXxxxxxxXxxxx.xxx, Inc.,
Surebridge, Inc., Knology, Inc. or ITC/\DeltaCom, Inc.
Notwithstanding the foregoing, this Release of Claims (this "Release") shall not
apply to any claim (i) for unpaid compensation for periods on or before the
Closing Date; (ii) for reasonable business expenses that have not been
reimbursed for periods occurring on or before the Closing Date; (iii) for
benefits which may be due Stockholder under the Company's employee benefit or
severance plans, under Section 8.8 of the Merger Agreement or any agreements
listed on Schedule 8.8 of the Company Disclosure Memorandum; provided, that the
impact of this Release on the rights of the undersigned to be reimbursed by the
Company in the event the Company fails to provide the same level of Continuing
Health Benefits (as defined in the Merger Agreement) as are being provided under
the Current Plan (as defined in the Merger Agreement) as of the Closing Date
shall be governed by clause (vii) below; (iv) in the event Stockholder is or was
a director or officer of the Company, for amounts for which Stockholder is
indemnified (pursuant to the Merger Agreement or otherwise) as a result of
his/her serving as a director or officer; (v) for the right to receive the
Accredited Merger Consideration or the Non-Accredited Merger Consideration (as
those terms are defined in the Merger Agreement), as the case may be; (vi) for
any right to receive the Stockholder's pro-rata portion of any funds placed in
escrow pursuant to Section 4.3 of the Merger Agreement; (vii) pursuant to
Section 8.8(b) of the Merger Agreement or Section 3(d) of the Severance
Agreement between the Company and the undersigned, dated as of March __, 2003,
for the right to reimbursement in an amount equal to the remaining pro rata
share reflected on the Closing Balance Sheet (as defined in the Merger
Agreement) that is attributable to providing Continued Health Benefits for the
undersigned and his spouse in the event the Current Plan is terminated or
coverage under the Current Plan is reduced and the Company fails to obtain
comparable coverage under a replacement plan; or (viii) in Stockholder's
capacity as a Stockholder Representative pursuant to the Merger Agreement, but
in the case of clauses (i), (ii) and (iii) of this paragraph, only to the extent
that any such amounts (in the case of clauses (i)
B-1
and (ii)) and the costs of any such benefits (in the case of clause (iii)) have
been fully accrued by the Company prior to the Effective Time.
Stockholder represents that he/she has not, prior to the date of this Release,
individually or with any person, filed, or commenced the filing of, any charges,
lawsuits, complaints or proceedings with any governmental agency, or against the
Company (any "Proceeding"), with respect to any of the matters released by
Stockholder pursuant to this Release. Stockholder covenants and agrees that
he/she will never, individually or with any person, file or commence the filing
of any Proceeding with respect to any of the matters released by Stockholder
pursuant to this Release.
Stockholder expressly acknowledges that the acts done and evidenced hereby, and
the release granted hereunder, are done and granted to compromise any doubtful
and disputed claims and to avoid litigation, and are not an admission by the
Company of any violation of any employment law, regulation, ordinance, or
administrative procedure, or any other federal, state, or local law, common law,
regulation or ordinance, liability for which is expressly denied.
This Release shall be effective from and after the Effective Time (as defined in
the Merger Agreement). This Release shall terminate automatically upon the
termination of the Merger Agreement and, accordingly, shall be rendered null and
void.
If any provision or paragraph of this Release is ever determined not
enforceable, the remaining provisions and paragraphs shall remain in full force
and effect.
Stockholder acknowledges that this Release will be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware.
Capitalized terms used but not defined herein shall have the meaning set forth
in the Agreement.
B-2
STOCKHOLDER ACKNOWLEDGES THAT HE/SHE HAS READ THIS RELEASE, THAT HE/SHE HAS BEEN
ADVISED THAT HE/SHE SHOULD CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS
RELEASE, AND THAT HE/SHE UNDERSTANDS ALL OF ITS TERMS AND EXECUTES IT
VOLUNTARILY AND WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND THE CONSEQUENCES
THEREOF.
------------------------------------
Name:
Date:
B-3
[Form of Stockholder Voting Agreement for Xxxxx Xxxxxx]
Exhibit 1
STOCKHOLDER VOTING AGREEMENT
THIS STOCKHOLDER VOTING AGREEMENT (this "Agreement") is made and entered
into as of March __, 2003, by and among __________ ("Parent"), a Delaware
corporation, and the undersigned ("Stockholder").
RECITALS
A. Concurrently with the execution and delivery hereof, Parent, _________
("Sub"), a Delaware corporation and a direct wholly owned subsidiary of Parent,
and __________ ("Company"), a Delaware corporation are entering into an
Agreement and Plan of Merger of even date herewith (as it may be amended from
time to time pursuant to the terms thereof, the "Merger Agreement"), which
provides for the merger (the "Merger") of Sub with and into Company in
accordance with its terms.
B. Stockholder is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of such number of shares of the outstanding capital stock of
Company and shares subject to outstanding Equity Rights to acquire Company
capital stock as is indicated on the signature page of this Agreement.
C. In consideration of the execution and delivery of the Merger Agreement
by Parent and Sub, Stockholder desires to agree to vote such Stockholder's
Shares (as defined herein) and deliver an irrevocable proxy to Parent for such
Shares so as to facilitate the consummation of the Merger.
NOW, THEREFORE, intending to be legally bound, the parties hereto hereby
agree as follows:
1. Certain Definitions.
(a) Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed thereto in the Merger Agreement. For all purposes of and
under this Agreement, the following terms shall have the following respective
meanings:
"Company Common Stock" means the shares of common stock, $0.01 par
value per share, of Company.
"Company Preferred Stock" means, collectively, the Series A
Convertible Preferred Stock and the Series B Convertible Preferred Stock.
"Expiration Date" means the earlier to occur of (i) such date and
time as the Merger Agreement shall have been terminated pursuant to the
terms of Article 10 thereof or (ii) the Effective Time.
"Person" means any individual, corporation, limited liability
company, general or limited partnership, unincorporated association, joint
venture, or other business enterprise or entity.
"Series A Convertible Preferred Stock" means the $0.01 par value
preferred stock of Company designated as Series A Convertible Preferred
Stock.
"Series B Convertible Preferred Stock" means the $0.01 par value
preferred stock of Company designated as Series B Convertible Preferred
Stock.
"Shares" means (i) all shares of Company Common Stock, Company
Preferred Stock and other voting securities of Company owned, beneficially
or of record, by Stockholder as of the date hereof, (ii) all additional
shares of Company Common Stock, Company Preferred Stock and other voting
securities of Company acquired by Stockholder, beneficially or of record,
during the period commencing with the execution and delivery of this
Agreement and expiring on the Expiration Date, and (iii) such other shares
of Company Common Stock, Company Preferred Stock and other voting
securities of Company over which Stockholder has or will have voting power.
"Transfer" means, with respect to any security, to directly or
indirectly (i) sell, pledge, encumber, grant an option with respect to,
transfer or dispose of such security or any interest in such security, or
(ii) enter into an agreement, commitment or other arrangement to sell,
pledge, encumber, grant an option with respect to, transfer or dispose of
such security or any interest therein. The term "Transfer" shall not
include the conversion of Series A Convertible Preferred Stock or Series B
Convertible Stock into shares of Company Common Stock.
(b) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
2. Transfer Restrictions.
(a) Transfer of Shares. At all times during the period commencing
with the execution and delivery of this Agreement and expiring on the date on
which the Company Stockholder Approval is obtained, Stockholder shall not
Transfer any of the Shares unless each Person to which any of such Shares, or
any interest in any of such Shares, is Transferred shall have: (i) executed a
counterpart of this Agreement, and (ii) agreed in writing to hold such Shares
(or interest in such Shares) subject to all of the terms and provisions of this
Agreement (except to the extent prohibited by applicable law).
(b) Transfer of Voting Rights. At all times during the period
commencing with the execution and delivery of this Agreement and expiring on the
Expiration Date, Stockholder shall not deposit (or permit the deposit of) any
Shares in a voting trust or grant any proxy or enter into any voting agreement
or similar agreement in contravention of the obligations of Stockholder under
this Agreement with respect to any of the Shares.
3. Vote of Shares.
(a) Agreement to Vote Shares. Stockholder hereby agrees that at any
meeting of the holders of Shares, however called, or in any other circumstance
upon which the vote or other approval of holders of Company Common Stock is
sought, all of such Stockholder's Shares shall be voted as set forth in Section
3(b).
(b) Execution and Delivery of Irrevocable Proxy. In order to secure
its obligations under Section 3(a), concurrently with this Agreement,
Stockholder has duly executed and delivered an irrevocable proxy in the form
attached as Exhibit A hereto (the "Irrevocable Proxy") appointing Parent and any
of its authorized representatives as such Stockholder's proxy with the power to
vote, at any meeting of the holders of Shares, however called, or in any other
circumstance upon which the vote or other approval of holders of Company Common
Stock is sought, all of such Stockholder's Shares: (x) in favor of the adoption
of the Merger Agreement and any actions required in furtherance of the
transactions contemplated thereby and hereby
-2-
(including, without limitation, in favor of the appointment of the Stockholder
Representatives named in Section 13.1 of the Merger Agreement and in favor of
the approval of the Asset Dispositions); (y) against any action or agreement
that would result in a breach in any material respect of any covenant,
representation or warranty or any other material obligation or agreement of
Company under the Merger Agreement; and (z) against the following actions (other
than the Merger and the transactions contemplated by the Merger Agreement
including, without limitation, the Asset Dispositions): (A) any Acquisition
Proposal other than an Acquisition Proposal with Parent or any Affiliate thereof
and (B) to the extent that such (1) are intended to, or could reasonably be
expected to, impede, interfere with, delay, postpone, or materially adversely
affect the Merger or the transactions contemplated by the Merger Agreement or
this Agreement, or (2) are intended to, or could reasonably be expected to,
implement or lead to any Acquisition Proposal (other than an Acquisition
Proposal with Parent or any Affiliate thereof): (I) any change in a majority of
the persons who constitute the Board of Directors of Company; (II) any change in
the present capitalization of Company or any amendment of Company's Certificate
of Incorporation or Bylaws; or (III) any other material change in Company's
corporate structure or business. In addition to the other covenants and
agreements of Stockholder provided for elsewhere in this Agreement, from the
execution of this Agreement until the Expiration Date, Stockholder shall not
enter into any agreement, arrangement or understanding with any Person or entity
to take any of the actions described in clause (y) or (z) of the foregoing
sentence, or the effect of which would violate the provisions and agreements
contained in this Section 3. To the extent that Stockholder is or becomes
(during the term hereof) a director or officer of the Company, he or she makes
no agreement, arrangement or understanding herein in his or her capacity as such
director or officer and nothing herein shall limit or affect, or give rise to
any liability to Stockholder by virtue of, any actions taken by Stockholder in
his or her capacity as an officer or director of Company (including, without
limitation, with respect to Company exercising its rights under the Merger
Agreement) or otherwise fulfilling his or her fiduciary obligations as a
director or officer of the Company. To the extent that Stockholder is a
corporation and a director or officer of Stockholder is or becomes (during the
term hereof) a director or officer of the Company, Stockholder makes no
agreement, arrangement or understanding herein relating to its director's or
officer's capacity as such director or officer of the Company and nothing herein
shall limit or affect, or give rise to any liability to Stockholder by virtue
of, any actions taken by Stockholder's director or officer in his or her
capacity as an officer or director of the Company (including, without
limitation, with respect to Company exercising its rights under the Merger
Agreement) or otherwise fulfilling his or her fiduciary obligations as a
director or officer of the Company.
4. Representations and Warranties of Stockholder. Stockholder hereby
represents and warrants to Parent as follows: (i) Stockholder is the beneficial
or record owner of the shares of Company Common Stock or Company Preferred Stock
indicated on the signature page of this Agreement; (ii) Stockholder does not
beneficially own any securities of Company other than the shares of Company
Common Stock, Company Preferred Stock and Equity Rights to purchase shares of
Company Common Stock set forth on the signature page of this Agreement; and
(iii) Stockholder has full power and authority to make, enter into and carry out
the terms of this Agreement.
5. Exchange of Shares; Waiver of Rights of Appraisal. If the Company
Stockholder Approval is obtained and the Merger is consummated, the Shares
shall, pursuant to the terms of the Merger Agreement, be exchanged for the
consideration provided in the Merger Agreement. Stockholder hereby waives any
and all rights of appraisal with respect to the Merger, or rights to dissent
from the Merger, that such Stockholder may have under Delaware Law or any other
applicable law.
6. Release of Claims. Stockholder has delivered to Parent, concurrently
with the execution hereof, a release, substantially in the form attached as
Exhibit B hereto.
7. Termination. This Agreement shall terminate and be of no further force
or effect whatsoever as of the Expiration Date.
-3-
8. Severability. If any term or other provision of this Agreement is held
invalid, illegal or incapable of being enforced by any court of competent
jurisdiction, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party hereto. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.
9. Binding Effect and Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, provided that except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interests or obligations of the parties hereto may be assigned by any of
the parties hereto without prior written consent of the other parties hereto
except as expressly contemplated by Section 2(a) hereof and except that Parent,
without obtaining the consent of any other party hereto, shall be entitled to
assign this Agreement or all or any of its rights or obligations hereunder to
any one or more Affiliates of Parent, but no assignment by Parent under this
Section 9 shall relieve Parent of its obligations under this Agreement. Any
assignment in violation of the foregoing shall be void.
10. Amendments and Modification. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by each of the parties hereto; provided that any
provision of this Agreement may be waived, or the time for its performance may
be extended, by the party or parties entitled to the benefit thereof by a
writing signed by each such party or an authorized representative thereof.
11. Specific Performance; Injunctive Relief. The parties hereto acknowledge
that Parent shall be irreparably harmed and that there shall be no adequate
remedy at law for a violation of any of the covenants or agreements of
Stockholder set forth in this Agreement. Therefore, Stockholder hereby agrees
that, in addition to any other remedies that may be available to Parent upon any
such violation, Parent shall have the right to enforce such covenants and
agreements by specific performance, injunctive relief or by any other means
available to such party at law or in equity.
12. Notices. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice): if to Parent, to its address provided in the
Merger Agreement, with a copy to Parent's counsel; and if to Stockholder, to
Stockholder's address shown below Stockholder's signature on the last page
hereof.
13. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, without reference to principles of conflicts of law.
14. Entire Agreement. This Agreement, together with the documents expressly
referred to herein, contain the entire understanding of the parties in respect
of the subject matter hereof, and supersede all prior negotiations and
understandings between the parties with respect to such subject matter.
15. Effect of Headings. The section headings are for convenience only and
shall not affect the construction or interpretation of this Agreement.
-4-
16. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the date first above written.
PARENT: STOCKHOLDER:
----------------------------- -------------------------------
By: By:
Its: Its:
Address:
-------------------------------
-------------------------------
-------------------------------
Telephone: (___) _____-________
Shares Beneficially Owned:
_____________ shares of Company Common
Stock
_____________ shares of Company Preferred
Stock
_____________ shares of Company Common
Stock subject to Equity Rights
- 5 -
EXHIBIT A
FORM OF IRREVOCABLE PROXY
By its execution hereof, and in order to secure its obligations under the
Stockholder Voting Agreement (the "Agreement") of even date herewith among
("Parent"), a Delaware corporation, and the undersigned ("Stockholder"),
Stockholder hereby irrevocably constitutes and appoints Parent and its
successors and assigns, with full power of substitution and resubstitution, from
the date hereof to the termination of the Agreement, as such Stockholder's true
and lawful attorney and proxy (its "Proxy"), for and in such Stockholder's name,
place and stead to vote all of the Shares of such Stockholder as such
Stockholder's Proxy at every annual, special or adjourned meeting of
stockholders of Company, and to sign on behalf of such Stockholder (as a
Stockholder of Company) any ballot, proxy, consent, certificate or other
document relating to Company that law permits or requires, as and to the extent
provided in Section 3 of the Agreement.
The attorneys and proxies named above may not exercise this Proxy on any other
matter except as provided in Section 3 of the Agreement. The Stockholder may
vote the Shares on all other matters. This Proxy is coupled with an interest and
Stockholder intends this Proxy to be irrevocable to the fullest extent permitted
by law. Stockholder hereby revokes any proxy previously granted by such
Stockholder with respect to such Stockholder's Shares. The Proxy will terminate
and be of no further force or effect, automatically, upon the Expiration Date.
To the extent that Stockholder is or becomes (during the term hereof) a director
or officer of the Company, he or she makes no agreement or understanding herein
in his or her capacity as such director or officer and nothing herein shall
limit or affect, or give rise to any liability to Stockholder by virtue of, any
actions taken by Stockholder in his or her capacity as an officer or director of
Company (including, without limitation, with respect to Company exercising its
rights under the Merger Agreement) or otherwise fulfilling his or her fiduciary
obligations as a director or officer of the Company.
To the extent that Stockholder is a corporation and a director or officer of
Stockholder is or becomes (during the term hereof) a director or officer of the
Company, Stockholder makes no agreement, arrangement or understanding herein
relating to its director's or officer's capacity as such director or officer of
the Company and nothing herein shall limit or affect, or give rise to any
liability to Stockholder by virtue of, any actions taken by Stockholder's
director or officer in his or her capacity as an officer or director of the
Company (including, without limitation, with respect to Company exercising its
rights under the Merger Agreement) or otherwise fulfilling his or her fiduciary
obligations as a director or officer of the Company.
This Proxy and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns, provided that except as otherwise specifically provided herein neither
this Proxy nor any of the rights, interest or obligations of the parties hereto
may be assigned by any of the parties hereto except as expressly contemplated by
Section 2(a) of the Agreement and except that Parent, without obtaining the
written consent of any other party hereto shall be entitled to assign this Proxy
to any one or more Affiliates of Parent, but no assignment by Parent of this
Proxy shall relieve Parent of its obligations under this Proxy. Any assignment
in violation of the foregoing shall be void.
Capitalized terms used but not defined herein shall have the meaning set forth
in the Agreement. Stockholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in
Parent or any of its nominees, the power to carry out and give effect to the
provisions of this Proxy.
A-1
IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Proxy this
day of March __, 2003.
STOCKHOLDER:
-------------------------------
Name:
A-2
EXHIBIT B
---------
FORM OF RELEASE OF CLAIMS
The undersigned on behalf of itself, and if the undersigned is an individual on
behalf of himself/herself and his/her family, heirs, executors, administrators,
legal representatives, beneficiaries and assigns, and if the undersigned is a
trust or foundation on behalf of its beneficiaries, trustees, legal
representatives, administrators and assigns, and if the undersigned is a
corporation on behalf of its officers, directors and assigns, and if the
undersigned is a partnership on behalf of its partners and assigns (collectively
referred to herein as "Stockholder"), pursuant to Section 6 of that certain
Stockholder Voting Agreement (the "Agreement"), dated as of March _, 2003, by
and among West Corporation and Stockholder, and in exchange for consideration,
the adequacy of which is acknowledged by Stockholder, does hereby
unconditionally release and forever discharge ITC Holding Company, Inc. and any
of its direct or indirect subsidiaries, affiliated companies and predecessors,
and their respective directors, officers, employees, members, agents and their
successors and assigns (collectively referred to herein as the "Company") from
any and all actions or inactions, causes of action, suits, controversies, claims
and demands whatsoever, for or by reason of any matter, cause or thing
whatsoever, whether known or unknown, including, but not limited to any alleged
tort, breach of express or implied contract, defamation, or violation of any
federal, state or local law or regulation, arising at any time on or before the
Closing Date (as defined in the Merger Agreement), or any such causes of action,
suits, controversies, claims or demands arising after the Closing Date with
respect to actions or inactions that occurred on or before the Closing Date, and
which accrued to the Stockholder in its capacity as a stockholder of ITC Holding
Company, Inc.
Notwithstanding the foregoing, this Release of Claims (this "Release") shall not
apply to any claim (i) for unpaid compensation for periods occurring on or
before the Closing Date; (ii) for reasonable business expenses that have not
been reimbursed for periods occurring on or before the Closing Date; (iii) for
benefits which may be due Stockholder under the Company's employee benefit or
severance plans or under Section 8.8 of the Merger Agreement; (iv) in the event
Stockholder is or was a director or officer of the Company, for amounts for
which Stockholder is indemnified (pursuant to the Merger Agreement or otherwise)
as a result of his/her serving as a director or officer; (v) for the right to
receive the Accredited Merger Consideration or the Non-Accredited Merger
Consideration (as those terms are defined in the Merger Agreement), as the case
may be; (vi) for any right to receive the Stockholder's pro-rata portion of any
funds placed in escrow pursuant to Section 4.3 of the Merger Agreement; or (vii)
in Stockholder's capacity as a Stockholder Representative pursuant to the Merger
Agreement.
Stockholder represents that he/she has not, prior to the date of this Release,
individually or with any person, filed, or commenced the filing of, any charges,
lawsuits, complaints or proceedings with any governmental agency, or against the
Company (any "Proceeding"), with respect to any of the matters released by
Stockholder pursuant to this Release. Stockholder covenants and agrees that
he/she will never, individually or with any person, file or commence the filing
of any Proceeding with respect to any of the matters released by Stockholder
pursuant to this Release.
Stockholder expressly acknowledges that the acts done and evidenced hereby, and
the release granted hereunder, are done and granted to compromise any doubtful
and disputed claims and to avoid litigation, and are not an admission by the
Company of any violation of any employment law, regulation, ordinance, or
administrative procedure, or any other federal, state, or local law, common law,
regulation or ordinance, liability for which is expressly denied.
B-1
This Release shall be effective from and after the Effective Time (as defined in
the Merger Agreement). This Release shall terminate automatically upon the
termination of the Merger Agreement and, accordingly, shall be rendered null and
void.
If any provision or paragraph of this Release is ever determined not
enforceable, the remaining provisions and paragraphs shall remain in full force
and effect.
Stockholder acknowledges that this Release will be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware.
Capitalized terms used but not defined herein shall have the meaning set forth
in the Agreement.
B-2
STOCKHOLDER ACKNOWLEDGES THAT HE/SHE HAS READ THIS RELEASE, THAT HE/SHE HAS BEEN
ADVISED THAT HE/SHE SHOULD CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS
RELEASE, AND THAT HE/SHE UNDERSTANDS ALL OF ITS TERMS AND EXECUTES IT
VOLUNTARILY AND WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND THE CONSEQUENCES
THEREOF.
-------------------------
Name:
Date:
B-3
[Form of Certificate of Incorporation of the Surviving Corporation]
Exhibit 2
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
INTERCALL HOLDING CORPORATION
ARTICLE I. NAME OF CORPORATION.
The name of this corporation is InterCall Holding Corporation
("Corporation").
ARTICLE II. REGISTERED OFFICE; REGISTERED AGENT
The address of this Corporation's registered office in the State of
Delaware is 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000. The
name of its registered agent at such address is Corporation Service Company.
ARTICLE III. PURPOSE
The purpose of this Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State of Delaware.
ARTICLE IV. CAPITAL STOCK
The total number of shares of stock which this Corporation shall have
authority to issue is One Hundred Thousand (100,000). All such shares are to be
designated as Common Stock, par value $.01 per share, and are to be of one
class.
ARTICLE V. BOARD OF DIRECTORS
Section 5.01 General.
The business and affairs of this Corporation shall be managed by, or under
the direction of, a Board of Directors comprised as set forth in this Article V.
Section 5.02 Number of Directors.
The number of directors of this Corporation shall be as specified in the
by-laws or fixed in the manner provided therein.
Section 5.03 Term of Office
A director shall hold office until the annual meeting of stockholders next
following his election and until his successor shall be elected and qualified,
subject, however, to prior death, resignation, retirement, disqualification or
removal from office.
Section 5.04 Election of Directors.
Election of directors need not be by written ballot except and to the
extent and to the extent provided in the by-laws of this Corporation.
Section 5.05 Removal of Directors.
At any meeting of stockholders with respect to which notice of such purpose
has been given, the entire Board of Directors or any individual director may be
removed, with or without cause, by the affirmative vote of the holders of a
majority of all outstanding shares entitled to be voted at an election of
directors.
Section 5.06 Vacancies.
Any vacancy on the Board of Directors that results from an increase in the
number of directors or from the prior death, resignation, retirement,
disqualification or removal from office or a director shall be filled by a
majority of the Board of Directors then in office, though less than a quorum, or
by the sole remaining director, or by the stockholders of this Corporation if
the Board of Directors has not filled the vacancy. Any director elected to fill
a vacancy resulting from the prior death, resignation, retirement,
disqualification or removal from office of a director shall have the same
remaining term as that of his or her predecessor.
Section 5.07 Severability.
The invalidity or unenforceability of this Article V or any portion hereof,
or of any action taken pursuant to this Article V, shall not affect the validity
or enforceability of any other provision of this Certificate of Incorporation,
any action taken pursuant to such other provision, or any action taken pursuant
to this Article V.
ARTICLE VI. BY-LAWS
The Board of Directors, by vote of a majority of the whole Board, shall
have the power to adopt, amend or repeal the by-laws of this Corporation, but
any by-law adopted by the Board of Directors may be amended or repealed by the
stockholders.
ARTICLE VII. MEETINGS OF STOCKHOLDERS; BOOKS OF CORPORATION
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws may provide. The books of this Corporation may be kept
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors or the by-laws of this Corporation.
- 2 -
ARTICLE VIII. LIABILITY OF DIRECTORS
A director of this Corporation shall not be personally liable to this
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent such exemption from liability or
limitation thereof is not permitted under the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended. If the General
Corporation Law of the State of Delaware is amended after the filing of this
Certificate of Incorporation to authorize corporate action further eliminating
or limiting the personal liability of directors, then the liability of a
director of this Corporation shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law of the State of Delaware, as so
amended. Any repeal or modification of this Article VIII shall not adversely
affect any right or protection of a director of this Corporation existing
hereunder with respect to any act or omission occurring prior to such repeal or
modification.
ARTICLE IX. COMPROMISE
Whenever a compromise or arrangement is proposed between this Corporation
and its creditors or any class of them and/or between this Corporation and its
stockholders or any class of them, any court of equitable jurisdiction with the
State of Delaware may, on the application in a summary way of this Corporation
or of any creditor or stockholder thereof or on the application of any receiver
or receivers appointed for this Corporation under the provisions of Section 291
of Title 8 of the Delaware Code or on the application of trustees in dissolution
or of any receiver or receivers appointed for this Corporation under the
provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement, the said compromise or arrangement and
the said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of this
Corporation, as the case may be, and also on this Corporation.
ARTICLE X. RESERVATION OF RIGHTS
The Corporation reserves the right at any time, and from time to time, to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, and other provisions authorized by the laws of the State of
Delaware at the time may be added or inserted, in whatsoever nature conferred
upon stockholders or directors by and pursuant to this Certificate of
Incorporation in its present form or as hereafter amended are granted subject to
the rights reserved in this Article X.
IN WITNESS WHEREOF, the foregoing Amended and Restated Certificate of
Incorporation has been signed on this ___ day of ______ 2003.
- 3 -
---------------------------
Name:
Title:
- 4 -
Exhibit 3
[Intentionally omitted]
Exhibit 4
[Intentionally omitted]
Exhibit 5
[Intentionally omitted]
[Form of Escrow Agreement]
Exhibit 6
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of
[__________________], 2003 (the "Effective Date") by and among West Corporation,
a Delaware corporation ("Parent"), the Stockholder Representative listed on the
signature page hereto (the "Stockholder Representative" and together with
Parent, the "Interested Parties") on behalf of certain former stockholders (the
"Stockholders") of ITC Holding Company, Inc., a Delaware corporation
("Company"), and The Bank of New York, a New York banking institution, as escrow
agent hereunder (the "Escrow Agent").
Preamble
--------
Dialing Acquisition Corp. ("Sub"), a Delaware corporation, is a wholly
owned subsidiary of Parent, and each of Parent and Sub is a party to an
Agreement and Plan of Merger (the "Merger Agreement") with Company, dated as of
March __, 2003, pursuant to which Sub has on this date merged (the "Merger")
with and into Company with Company surviving the Merger and becoming a wholly
owned subsidiary of Parent;
Pursuant to Section 3.2 of the Merger Agreement, the Stockholders received,
in exchange for shares of capital stock of Company, the right to receive the
Aggregate Cash Consideration, including the right to receive the $27,000,000 in
cash deposited in escrow pursuant to Section 4.3 of the Merger Agreement (the
"Escrow Deposit");
Pursuant to the terms of the Merger Agreement, the Escrow Deposit has been
delivered and will be held by the Escrow Agent pursuant to the terms of this
Agreement until termination of this Agreement as provided herein; and
The Escrow Agent is willing to hold and administer such funds and any
income thereon and additions thereto, and to pay and distribute the amounts held
by it in accordance with the agreement of the Interested Parties and/or arbitral
or judicial orders and decrees as set forth in this Agreement.
Certain capitalized terms used in this Agreement are defined in Section 5.1
of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE 1 ESTABLISHMENT OF ESCROW
1.1 Escrow Deposit.
On the Effective Date, Parent shall deliver the Escrow Deposit in
immediately available funds to the Escrow Agent. From and after receipt of the
Escrow Deposit by the Escrow Agent, the Escrow Agent will hold and disburse the
Escrow Deposit (together with any cash or other property received in respect
thereof or earned thereon, which shall become a part of the Escrow Deposit) for
the benefit of Parent and the Stockholders, as the case may be, in accordance
with the provisions of this Agreement.
1.2 Stockholder Percentage Interests.
Attached as Schedule I hereto is a schedule showing for each Stockholder
(i) the respective percentage interest (the "Percentage Interest") of each such
Stockholder in the Escrow Deposit, and (ii) the corresponding aggregate maximum
cash payment payable to each Stockholder, subject to the adjustments provided
herein.
1.3 Investments.
The Escrow Agent shall invest the cash received by the Escrow Agent in
Eligible Investments and shall not be responsible or liable for any loss
accruing from any investment made in accordance herewith. "Eligible Investments"
shall mean (i) obligations issued or guaranteed by the United States of America
or any agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof); and (ii) shares of
money market funds 100% of the assets of which constitute obligations of the
type described in clause (i) above. No investment shall have a term of more than
90 days. If otherwise qualified, obligations of the Escrow Agent shall qualify
as Eligible Investments. Absent its timely receipt of such specific written
investment instruction from the Stockholder Representative, the Escrow Agent
shall invest the Escrow Deposit in the Fidelity U.S. Treasury Fund III or such
other comparable investment fund selected from time to time by the Stockholder
Representative and as agreed to by Parent. After first deducting any fees of the
Escrow Agent, all remaining earnings received from the investment of the Escrow
Deposit shall be credited to, and shall become a part of, the Escrow Deposit
(and any losses on such investments shall be debited from the Escrow Deposit);
provided; however, the earnings on the investment of the Escrow Deposit will be
the sole property of the Stockholders and Parent will have no right to seek
recovery of Escrow Claims from such earnings. The Stockholders have no right to
any guaranteed rate of return on the investment of the Escrow Deposit.
1.4 Tax-Related Terms.
(a) Tax Characterization. The Interested Parties agree to treat the
Stockholders (in proportion to their respective Percentage Interests) as the
owner of the Escrow Deposit for all federal, state and local income tax
purposes. Accordingly, all earnings
- 2 -
from the investment of the Escrow Deposit shall be reported as allocated to the
Stockholders in proportion to their respective Percentage Interests.
(b) Certification of Taxpayer Identification Number. The Stockholders
hereto agree to provide the Escrow Agent with a certified tax identification
number for each Stockholder by signing and returning a Form W-9 (or Form W-8, in
case of non-U.S. persons), or by providing copies of any substitute W-9 by
submitting copies of such Stockholder's transmittal materials, to the Escrow
Agent prior to the date on which any income earned on the investment of the
Escrow Deposit is credited to the Escrow Deposit. The Stockholders understand
that, in the event their tax identification numbers are not certified to the
Escrow Agent, the Internal Revenue Code, as amended from time to time, may
require withholding of a portion of any interest or other income earned on the
investment of the Escrow Deposit.
(c) Tax Distributions. The Escrow Agent shall make a distribution ("Tax
Distribution") to the Stockholders (in proportion to their Percentage Interests)
no later than March 15th of each year during the term of this Agreement in an
amount equal to the lesser of (x) the amount of earnings earned on the
investment of the Escrow Deposit in the previous calendar year or (y) the
product of 35% and the amount of earnings earned on the investment of the Escrow
Deposit in the previous calendar year.
1.5 Separate Allocation of Escrow Deposit.
The Escrow Deposit shall be maintained by the Escrow Agent as three
separate and distinct funds for the benefit of Parent and the Stockholders. The
three funds are referred to as the InterCall Fund, the ITC Non-Operations Fund
and the ITC Operations Fund. On the Effective Date, the InterCall Fund shall be
allocated $10,000,000 of the Escrow Deposit, the ITC Non-Operations Fund shall
be allocated $4,500,000 of the Escrow Deposit and the ITC Operations Fund shall
be allocated $12,500,000 of the Escrow Deposit. Following the Effective Date,
the Escrow Agent, pursuant to written instructions received pursuant to Sections
2.2 and 2.3 hereof, or based on the terms of a final arbitration award or other
final adjudication, shall deduct the amount of each distribution from the
appropriate escrow fund. Parent and the Stockholder Representative agree that
the determination of which fund an Escrow Claim should be deducted from and the
limits on the amount of the Escrow Claims that can be deducted against these
funds, shall be governed by the terms of the Merger Agreement. Further, the
Escrow Agent shall allocate earnings from the investment of the Escrow Deposit
to each of these three funds based on the percentage that each fund represents
to the aggregate amount of the Escrow Deposit at the time such allocation of
earnings is computed; provided; however, the earnings on the investment of the
Escrow Deposit will be the sole property of the Stockholders and Parent will
have no right to seek recovery of Escrow Claims from such earnings. Upon the
written request of Parent or the Stockholder Representative, and on each
anniversary of the Effective Date, the Escrow Agent shall deliver to Parent and
the Stockholder Representative, a report setting forth the amounts then
allocated to each of these funds and a summary of the aggregate earnings from
the investment of the Escrow Deposit since the date of the last report.
- 3 -
Article 2 TERM; DISTRIBUTION OF ESCROW DEPOSIT; LIMITS
2.1 Term.
The term of this Agreement shall commence on the Effective Date and shall
terminate at such time as the entire Escrow Deposit shall have been distributed
pursuant to the terms of this Agreement.
2.2 Adjustment of Escrow Deposit.
If, between the Effective Date and the Distribution Date, Parent shall be
entitled to be reimbursed pursuant to an Escrow Claim, then Parent shall deliver
to the Stockholder Representative (with a copy to the Escrow Agent) a notice
thereof (a "Notice of Reimbursement Obligation"), which notice shall include a
good faith estimate of the amount of the Escrow Claim and shall also allocate in
good faith, and in accordance with the terms of the Merger Agreement, the amount
of such Escrow Claim that should be deducted from the InterCall Fund, the ITC
Non-Operations Fund and/or the ITC Operations Fund. Following the receipt of
such Notice of Reimbursement Obligation, the Stockholder Representative and
Parent shall mutually agree on the amount of the Escrow Claim to be subject to
reimbursement hereunder (the "Reimbursement Amount") and deliver written notice
thereof to the Escrow Agent, or if they cannot so agree, the Reimbursement
Amount shall be determined by arbitration or other final adjudication in
accordance with the terms of the Merger Agreement. Within 10 days following the
final determination of the Reimbursement Amount, the Escrow Agent shall
distribute to Parent an amount of the Escrow Deposit equal to the Reimbursement
Amount and shall hold any remaining Escrow Deposit pursuant to this Agreement.
Unless otherwise set forth in a ruling issued in connection with arbitration or
other final adjudication as provided herein, the Escrow Agent shall have no
right or obligation to distribute funds from the Escrow Deposit under this
Section 2.2 until such time as the Escrow Agent receives a joint written notice
from Parent and the Stockholder Representative setting forth the amount to be
distributed and the portion thereof to be deducted from the InterCall Fund, the
ITC Non-Operations Fund and/or the ITC Operations Fund (which shall be
determined in accordance with the Merger Agreement).
2.3 Distribution of Escrow Deposit.
(a) With respect to Escrow Claims pending as of the Distribution Date,
Parent and the Stockholder Representative shall use their reasonable efforts to
agree in writing on the Reimbursement Amount with respect to any such pending
Escrow Claims; provided, that if Parent and the Stockholder Representative are
unable to agree on the Reimbursement Amount with respect to such Escrow Claims
by the Distribution Date, the Reimbursement Amount for purposes of the
calculations in the following sentences of this Section shall be the amount
claimed by Parent in good faith in its Notice of Reimbursement Obligation, plus
an estimate of the Stockholder Representative's maximum legal and other expenses
made by the Stockholder Representative in good faith as communicated to the
Escrow Agent in writing. Upon determination of the Reimbursement Amounts related
to pending Escrow Claims in accordance with the
- 4 -
preceding sentence (the "Pending Claim Amount"), the Escrow Agent shall (i)
promptly distribute to the Stockholders, in accordance with their respective
Percentage Interests, the Escrow Deposit, less the Pending Claim Amount (the
"Undisputed Escrow Deposit"), and (ii) retain in escrow the Pending Claim Amount
(the "Disputed Escrow Deposit"). For purposes of Section 1.5 hereof, the
Disputed Escrow Deposit shall be allocated among the InterCall Fund, the ITC
Non-Operations Fund and the ITC Operations Fund in accordance with the written
agreement of Parent and the Stockholder Representative in accordance with the
terms of the Merger Agreement; provided, that if Parent and the Stockholder
Representative are unable to agree on the allocation between these funds, the
allocation shall be made in accordance with the Notice of Reimbursement
Obligation. Except for accrued earnings that are being retained as part of the
Disputed Escrow Deposit to cover fees and expenses of the Stockholder
Representative, all accrued earnings from the investment of the Escrow Deposit
less any amount previously distributed as a Tax Distribution shall be
distributed to the Stockholders on the Distribution Date in accordance with
their respective Percentage Interests.
(b) Upon the final resolution as agreed by Parent and the Stockholder
Representative in writing of any Escrow Claim for which Disputed Escrow Deposit
amounts were retained in escrow after the Distribution Date, or upon
determination by an arbitration award or by any other final adjudication, the
Escrow Agent shall promptly (i) distribute to Parent an amount of the Disputed
Escrow Deposit equal to the Reimbursement Amount corresponding to such Escrow
Claim (if any); (ii) distribute to the Stockholder Representative an amount
equal to the actual fees and expenses reasonably incurred by the Stockholder
Representative in connection with such Escrow Claim (if any); and (iii) deliver
any remaining Disputed Escrow Deposit to the Stockholders in accordance with
their respective Percentage Interests in such remaining Disputed Escrow Deposit.
(c) If there is a Company Disposition Audit pending as of the Distribution
Date, the Escrow Agent shall retain in escrow the balance of the Escrow Deposit
that is then allocated to the ITC Non-Operations Fund, plus the estimated fees
and expenses of the Stockholder Representative to defend the Company Disposition
Audit, which amount shall be estimated by the Stockholder Representative in good
faith and shall be retained from the accrued earnings on the investment of the
Escrow Deposit and communicated to the Escrow Agent in writing. Within 10 days
following a Final Determination of the Company Disposition Audit, the Escrow
Agent shall promptly (i) distribute to Parent the amount of the Escrow Deposit
held pursuant to this Section 2.3(c) that is owed to Parent, if any, in
accordance with the terms of the Final Determination; (ii) distribute to the
Stockholder Representative an amount equal to the actual fees and expenses
reasonably incurred by the Stockholder Representative in connection with the
Company Disposition Audit; and (iii) distribute to the Stockholders in
accordance with their respective Percentage Interests the remaining amount of
the Escrow Deposit funds held pursuant to this Section 2.3(c).
- 5 -
2.4 Effect of Final Delivery.
This Agreement shall continue in full force and effect until the Escrow
Agent has delivered all, but not less than all, of the Escrow Deposit pursuant
to the terms hereof. After all of such funds have been so delivered, all rights,
duties and obligations of the respective parties hereunder shall terminate.
ARTICLE 3 THE ESCROW AGENT
3.1 Appointment.
Parent and the Stockholder Representative hereby designate and appoint the
Escrow Agent as "Escrow Agent" under this Agreement and the Escrow Agent hereby
accepts such designation and appointment, subject to all of the provisions of
this Agreement.
(a) Each Interested Party acknowledges and agrees that the Escrow Agent (i)
shall not be responsible for any of the agreements referred to or described
herein (including the Merger Agreement), or for determining or compelling
compliance therewith, and shall not otherwise be bound thereby, (ii) shall be
obligated only for the performance of such duties as are expressly and
specifically set forth in this Escrow Agreement on its part to be performed,
each of which are ministerial (and shall not be construed to be fiduciary) in
nature, and no implied duties or obligations of any kind shall be read into this
Agreement against or on the part of the Escrow Agent, (iii) shall not be
obligated to take any legal or other action hereunder which might in its
judgment involve or cause it to incur any expense or liability unless it shall
have been furnished with acceptable indemnification, (iv) may rely on and shall
be protected in acting or refraining from acting upon any written notice,
instruction (including wire transfer instructions, whether incorporated herein
or provided in a separate written instruction), instrument, statement,
certificate, request or other document furnished to it hereunder and believed by
it to be genuine and to have been signed or presented by the proper person, and
shall have no responsibility for determining the accuracy thereof, and (v) may
consult counsel satisfactory to it, including in-house counsel, and the opinion
or advice of such counsel in any instance shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with the opinion or advice of
such counsel. The Escrow Agent may act in reliance upon any instructions signed
on signature believed by it to be genuine, and may assume that any person who
gives any written instructions, notice or receipt, or makes any statements in
connection with the provisions hereof, has been duly authorized to do so. The
Escrow Agent shall have no duty to make inquiry as to the genuineness, accuracy
or validity of any statements or instructions or any signatures on statements or
instructions.
(b) The Escrow Agent shall not be liable to anyone for any action taken or
omitted to be taken by it hereunder except in the case of the Escrow Agent's
gross negligence or willful misconduct. In no event shall the Escrow Agent be
liable for indirect, punitive, special or consequential damage or loss
(including but not limited to
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lost profits) whatsoever, even if the Escrow Agent has been informed of the
likelihood of such loss or damage and regardless of the form of action.
3.2 Successor.
The Escrow Agent may at any time resign as Escrow Agent hereunder by giving
30 days' prior written notice of resignation to Parent and the Stockholder
Representative. Prior to the effective date of the resignation as specified in
such notice, the Stockholder Representative will issue to the Escrow Agent a
written instruction authorizing redelivery of the Escrow Deposit to a bank or
trust company that it selects as successor to the Escrow Agent hereunder,
subject to the consent of the Parent (which consent shall not be unreasonably
withheld or delayed). If, however, the Stockholder Representative shall fail to
name such a successor escrow agent within 20 days after the notice of
resignation from the Escrow Agent, Parent shall be entitled to name such
successor escrow agent. If no successor escrow agent is named by Parent or the
Stockholder Representative, the Escrow Agent may apply to a court of competent
jurisdiction for appointment of a successor escrow agent.
3.3 Compensation, Expenses Reimbursement and Indemnification.
(a) Each of the Interested Parties agrees (i) to reimburse the Escrow Agent
for 50% of its attorney's fees and expenses incurred in connection with the
preparation of this Agreement and (ii) to pay 50% of the Escrow Agent's
compensation for its normal services hereunder in accordance with Schedule II
hereto, which may be subject to change hereafter on an annual basis.
(b) Each of the Interested Parties agrees to reimburse the Escrow Agent for
50% of all costs and expenses incurred in connection with the administration of
this Agreement or the escrow created hereby or the performance or observance of
its duties hereunder which are in excess of its compensation for normal services
hereunder, including payment of any legal fees and expenses incurred by the
Escrow Agent in connection with the resolution of any claim by any party
hereunder.
(c) The Escrow Agent may obtain reimbursement for its fees and expenses
from the Escrow Deposit, including, without limitation, reimbursement from any
accrued earnings resulting from the investment of the Escrow Deposit; provided,
that Parent agrees to reimburse the Escrow Deposit for 50% of any such
reimbursements.
(d) Any withdrawal made by the Escrow Agent from the Escrow Deposit in
accordance with this Section 3.3 and any subsequent reimbursement thereof from
Parent shall be allocated among the InterCall Fund, the ITC Non-Operations Fund
and the ITC Operations Fund based on the percentage that each fund represents to
the aggregate amount of the Escrow Deposit at the time such withdrawal is made.
(e) Each of the Interested Parties covenants and agrees to jointly and
severally indemnify the Escrow Agent (and its directors, officers and employees)
and hold it (and such directors, officers and employees) harmless from and
against any loss, liability, damage, cost and expense of any nature incurred by
the Escrow Agent arising out of or in
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connection with this Agreement or with the administration of its duties
hereunder, including, but not limited to, attorney's fees and other costs and
expenses of defending or preparing to defend against any claim of liability
unless and except to the extent such loss, liability, damage, cost and expense
shall be caused by the Escrow Agent's gross negligence, bad faith, or willful
misconduct. The foregoing indemnification and agreement to hold harmless shall
survive the termination of this Agreement and the resignation of the Escrow
Agent.
3.4 Dispute Resolution.
It is understood and agreed that should any dispute arise with respect to
the delivery, ownership, right of possession, and/or disposition of the Escrow
Deposit, or should any claim be made upon the Escrow Agent or the Escrow Deposit
by a third party, the Escrow Agent upon receipt of notice of such dispute or
claim is authorized and shall be entitled (at its sole option and election) to
retain in its possession without liability to anyone, all or any of said Escrow
Deposit until such dispute shall have been settled either by the mutual written
agreement of the parties involved or by a final order, decree or judgment of a
court in the United States of America, the time for perfection of an appeal of
such order, decree or judgment having expired. The Escrow Agent may, but shall
be under no duty whatsoever to, institute or defend any legal proceedings that
relate to the Escrow Deposit.
ARTICLE 4 STOCKHOLDER REPRESENTATIVE
4.1 Power and Authority.
The Stockholder Representative represents and warrants to Parent and the
Escrow Agent that the Stockholder Representative has irrevocable right, power
and authority (i) to enter into and perform this Agreement, (ii) to give and
receive directions and notices hereunder; and (iii) to make all determinations
that may be required or that Stockholder Representative deems appropriate under
this Agreement. Without limiting the generality of the foregoing, the
Stockholder Representative shall have full power and authority, on behalf of all
the Stockholders and their successors, to interpret all the terms and provisions
of this Agreement, to dispute or fail to dispute any claim against the Escrow
Deposit made by Parent, to negotiate and compromise any dispute which may arise
under this Agreement, to sign any releases or other documents with respect to
any such dispute, and to authorize payments to be made with respect thereto.
4.2 Resignation; Successors.
Upon the resignation, death or removal of the Stockholder Representative, a
successor Stockholder Representative shall be selected in accordance with
Section 12.6 of the Merger Agreement.
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4.3 Fees and Expenses.
(a) In accordance with Sections 11.3(d) and 12.5 of the Merger Agreement,
the reasonable fees and expenses of the Stockholder Representative shall first
be paid from the interest earned on the Escrow Deposit and to the extent that
the amount of such fees and expenses exceeds the amount of such accrued
interest, such excess shall be deducted against the balance of the ITC
Operations Fund and/or the InterCall Fund, as Parent may in its sole discretion
determine and notify the Escrow Agent in writing, but to the extent one such
fund is depleted, such expenses shall be deducted from the other fund.
(b) In order to obtain reimbursement for fees and expenses from the Escrow
Deposit, the Stockholder Representative shall submit to Parent and Escrow Agent
a written notice setting forth the amount of the fees and expenses for which
they are seeking reimbursement (the "Reimbursement Request"). Any portion of a
Reimbursement Request that does not exceed the balance of the accrued earnings
on the Escrow Deposit shall be paid to the Stockholder Representative within
five business days following the receipt of the Reimbursement Request by the
Escrow Agent. If any portion of the Reimbursement Request exceeds the balance of
the accrued earnings on the Escrow Deposit (the "Deficiency Amount"), Escrow
Agent shall notify Parent and the Stockholder Representative of such deficiency
as soon as reasonably practicable following the receipt of such Reimbursement
Request. Within 10 days following the receipt of such notice, Parent shall
provide to the Stockholder Representative and the Escrow Agent its written
agreement or objection to the withdraw of the Deficiency Amount from the balance
of the Escrow Deposit. If Parent disagrees with the withdrawal of the Deficiency
Amount, the balance of the Deficiency Amount available for distribution to the
Stockholder Representative shall be determined by arbitration or other final
adjudication. If Parent agrees with the withdraw of the Deficiency Amount from
the Escrow Deposit, Parent shall deliver to the Escrow Agent a written statement
to such effect The Deficiency Amount to be distributed to the Stockholder
Representative, as determined by the mutual agreement of Stockholder
Representative and Parent or by arbitration or other adjudication, shall be
deducted from the ITC Operations Fund or the InterCall Fund (or a combination
thereof) in accordance with the written instructions of Parent. If Parent does
not provide such written instructions within ten (10) business days following a
request by Escrow Agent, the balance of the Deficiency Amount shall be deducted
from the ITC Operations Fund, but to the extent the ITC Operations Fund is
depleted, such expenses shall be deducted from the InterCall Fund.
ARTICLE 5 MISCELLANEOUS
5.1 Definitions.
(a) Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:
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"Company Disposition Audit" shall mean an event, as contemplated by
Section 11.5(b) of the Merger Agreement, whereby Company has received
written notice from the Internal Revenue Service that it intends to
examine, or that it is in fact examining the federal income tax
consequences of the Company Disposition Matter.
"Distribution Date" shall mean the date that is two years from the
Effective Date.
"Escrow Claim" shall mean a Reimbursement Claim under Article 11 of
the Merger Agreement, a working capital deficiency claim under Section
3.6(g) of the Merger Agreement, or a post-closing adjustment claim pursuant
to Section 3.6(i) of the Merger Agreement.
"Stockholder Representative" shall mean Xxxxxxxx X. Xxxxxx, III.
(b) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
(c) Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to them in the Merger Agreement.
5.2 Transferability.
A Stockholder may not transfer any interest in the Escrow Deposit or any
other right under this Escrow Agreement to any other party, except that upon
written notice from the legal representative of the estate of a deceased
Stockholder to the Escrow Agent, the rights of such Stockholder under this
Escrow Agreement shall be transferred to the estate of such Stockholder, and
subsequently to any beneficiary thereof, in the event of the Stockholder's
death; provided, however, that any such beneficiary or the legal representative
of any such estate shall be bound by the provisions of this Escrow Agreement
without taking any further action. The Escrow Agent shall be entitled to treat
the legal representative of the estate of such Stockholder, and subsequently any
beneficiary thereof, as the absolute owner of the rights of such Stockholder
under this Escrow Agreement in all respects and shall incur no liability for
distributions made in good faith to the legal representatives of such
Stockholder or such beneficiary in accordance with the terms of this Escrow
Agreement. The contingent right to receive a Percentage Interest of the Escrow
Deposit shall not be transferable by the Stockholders otherwise than by will or
by the laws of descent and distribution. Further, the contingent rights to the
Escrow Deposit shall not be represented by any form of certificate or other
instrument.
5.3 Notices.
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by
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registered or certified mail, postage pre-paid, or by courier or overnight
carrier, to the persons at the addresses set forth below (or at such other
address as may be provided hereunder), and shall be deemed to have been
delivered as of the date so delivered:
If to Parent:
West Corporation
00000 Xxxxxxx Xxxxx Xxxxx
Xxxxx, XX 00000
Attn: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile Number: (000) 000-0000
Attention: Xxxx X'Xxxxxxxx
Xxxxx Xxxxxxxxxx
If to the Stockholder Representative:
Xxxxxxxx X. Xxxxxx, III
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
with a copy to:
Xxxxxx & Bird LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
Attention: Xxxxxx Xxxxx
Xxxxx X. Xxxxx
If to the Escrow Agent:
The Bank of New York
000 Xxxxxxx Xxxxxx
0 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
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or such other person or address as shall be furnished in writing by any of the
parties and any such notice or communication shall be deemed to have been given
as of the date so mailed.
5.4 Governing Law.
This Agreement shall be governed by and construed in all respects in
accordance with the laws of the State of Delaware as contracts wholly
negotiated, executed and to be performed in the State of Delaware, without
regard to the principles of conflicts of law thereof.
5.5 Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the
respective heirs, executors, administrators, successors and assigns of the
parties hereto.
5.6 Severability.
If any provision or section of this Agreement is determined to be void or
otherwise unenforceable, it shall not affect the validity or enforceability of
any other provisions of this Agreement which shall remain unenforceable in
accordance with their terms.
5.7 Headings.
The headings and subheadings contained in this Agreement are for reference
only and for the benefit of the parties and shall not be considered in the
interpretation or construction of this Agreement.
5.8 Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
5.9 Amendments.
This Agreement may not be altered or modified without the express written
consent of the parties hereto. No course of conduct shall constitute a waiver of
any of the terms and conditions of this Agreement, unless such waiver is
specified in writing, and then only to the extent so specified. A waiver of any
of the terms and conditions of this Agreement on one occasion shall not
constitute a waiver of the other terms of this Escrow Agreement, or of such
terms and conditions on any other occasion.
5.10 No Ownership Interests.
The interests of the Stockholders in the Escrow Deposit do not represent
any ownership rights in Parent, including, without limitation, any rights to
vote on matters
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submitted to a vote of the stockholders of Parent or rights to the receipt of
dividends issued by Parent to its stockholders.
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IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as
of the day and year first above written.
PARENT
By:
------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
STOCKHOLDER REPRESENTATIVE
----------------------------------------
Xxxxxxxx X. Xxxxxx III
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[Form of Restrictive Covenant Agreement]
Exhibit 7
RESTRICTIVE COVENANT AGREEMENT
THIS RESTRICTIVE COVENANT AGREEMENT (this "Covenant Agreement") is entered
into on this ___ day of March, 2003, by and among ______________________
("Stockholder") and West Corporation ("Parent"), a Delaware corporation.
WHEREAS, concurrently with the execution and delivery hereof, Parent,
Dialing Acquisition Corp. ("Sub"), a Delaware corporation and a direct wholly
owned subsidiary of Parent, and ITC Holding Company, Inc. ("Company"), a
Delaware corporation, are entering into an Agreement and Plan of Merger of even
date herewith (the "Merger Agreement") which provides for the merger (the
"Merger") of Sub with and into Company in accordance with its terms; and
WHEREAS, Stockholder is the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of shares of the outstanding capital stock of Company;
and
WHEREAS, in consideration of the execution and delivery of the Merger
Agreement by Parent and Sub, Stockholder agrees to, among other things, enter
into this Covenant Agreement.
NOW, THEREFORE, intending to be legally bound, the parties hereto hereby
agree as follows:
1. General. Stockholder acknowledges and agrees that (1) the agreements and
covenants contained in this Covenant Agreement are reasonable and valid in
geographical and temporal scope and in all other respects, and essential to
protect the value of Parent's business and assets, and (2) Stockholder has
obtained knowledge, contacts, know-how, training and experience and there is a
substantial probability that such knowledge, know-how, contacts, training and
experience could be used to the substantial advantage of a competitor of Company
or Parent and to Company's or Parent's substantial detriment.
2. Covenant Not To Compete.
(a) Stockholder covenants and agrees that, during the Restricted Period (as
defined below), Stockholder shall not, directly or indirectly, individually or
on behalf of or through any Person, or as a sole proprietor, partner,
stockholder, director, officer, principal, agent or executive of a Person, or in
any other capacity or relationship, engage in any business or employment,
anywhere within the United States of America, or any other jurisdiction in which
InterCall or any of the InterCall Operating Subsidiaries conducts business or
operations, that is materially competitive with the audio, video and web
conferencing business of InterCall and the InterCall Operating Subsidiaries.
Notwithstanding the foregoing, the restrictions set forth in this Section 2(a)
shall not apply to the Person set forth on Schedule A hereto.
(b) Notwithstanding anything to the contrary in this Covenant Agreement,
Stockholder shall not be prohibited from acquiring or holding: (i) less than
five percent (5%) of the outstanding securities of any entity that may compete
directly or indirectly with the audio, video and web conferencing business of
InterCall or any of the InterCall Operating Subsidiaries, or (ii) the
outstanding securities of any entity that may compete directly or indirectly
with the audio, video and web conferencing business of InterCall or any of the
InterCall Operating Subsidiaries provided that such entity does not generate
more than 5% of its gross revenue from its audio, video and web conferencing
business. Those entities whose securities are acquired or held by Stockholder
pursuant to clause (i) or (ii) of the immediately preceding sentence are
referred to herein as to the "Permitted Entities."
3. Non-Solicitation of Customers and Suppliers. Stockholder covenants and
agrees that, during the Restricted Period, Stockholder shall not, without the
prior written consent of Parent, directly or indirectly, individually or on
behalf of or through any Person who is not a Permitted Entity, (i) solicit or
divert or attempt to solicit or divert, any Person, from doing business with
InterCall or any of the InterCall Operating Subsidiaries for purposes of
providing audio, video and web conferencing services to such Person or (ii)
attempt to induce any such Person to cease being a supplier of InterCall or any
of the InterCall Operating Subsidiaries. Notwithstanding the foregoing, the
restrictions set forth in this Section 3 shall not apply to the Person set forth
on Schedule A hereto.
4. Non-Hire of Employees. Stockholder covenants and agrees that during the
Restricted Period, Stockholder shall not, without the prior written consent of
Parent, directly or indirectly, either individually or on behalf of or through
any Person who is not a Permitted Entity, employ any of the individuals set
forth on Schedule B hereto.
5. Remedies for Breach. Without intending to limit the remedies available
to Parent, Stockholder acknowledges that a breach of any of the covenants
contained in this Covenant Agreement may result in irreparable injury to Parent,
or an Affiliate of Parent, for which there is no adequate remedy at law, and
that in such case it will not be possible to measure damages for such injuries
precisely and that, in the event of such a breach or imminent threat thereof,
Parent shall be entitled to obtain a temporary restraining order and/or a
preliminary or permanent injunction, without the necessity of proving
irreparable harm or injury as a result of such breach or threatened breach,
restraining Stockholder from engaging in activities prohibited hereunder or such
other relief as may be required specifically to enforce such covenants.
Notwithstanding any other provision to the contrary, the Restricted Period with
respect to Stockholder shall be tolled during any period of violation, as
determined by a court of law, of any of the covenants set forth
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herein; provided, however, that the Restricted Period shall be tolled only as to
the specific covenant so violated.
6. Independence and Severability. Each of the rights enumerated in this
Covenant Agreement shall be independent of the others and shall be in addition
to and not in lieu of any other rights and remedies available to Parent at law
or in equity. If any of the covenants contained herein or any part of any of
them is hereafter construed or adjudicated to be invalid or unenforceable, the
same shall not affect the remainder of the covenant or covenants or rights or
remedies, which shall be given full effect without regard to the invalid
portions. If any of the covenants contained herein are held to be invalid or
unenforceable because of the duration of such provisions or the area or scope
covered thereby, Stockholder agrees that the court making such determination
shall have the power to reduce the duration, scope and/or area of such provision
to a reasonable duration, scope and/or area and in its reduced form said
provision shall then be enforceable.
7. Restricted Period. For purposes of this Covenant Agreement, the term
"Restricted Period" shall mean the period commencing on the Closing Date and
ending on the thirty (30) month anniversary of said Closing Date.
8. Binding Effect and Assignment. This Covenant Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, provided that
except as otherwise specifically provided herein, neither this Covenant
Agreement nor any of the rights, interests or obligations of the parties hereto
may be assigned by any of the parties hereto without prior written consent of
the other parties hereto and except that Parent, without obtaining the consent
of any other party hereto, shall be entitled to assign this Covenant Agreement
or all or any of its rights or obligations hereunder to any one or more
Affiliates of Parent, but no assignment by Parent under this Section 87 shall
relieve Parent of its obligations under this Covenant Agreement. Any assignment
in violation of the foregoing shall be void.
9. Amendments and Modification. This Covenant Agreement may not be
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by each of the parties hereto; provided
that any provision of this Covenant Agreement may be waived, or the time for its
performance may be extended, by the party or parties entitled to the benefit
thereof by a writing signed by each such party or an authorized representative
thereof.
10. Notices. All notices and other communications pursuant to this Covenant
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice): if to Parent, to its address provided in the
Merger Agreement, with a copy to Parent's counsel; and if to
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Stockholder, to Stockholder's address shown below Stockholder's signature on the
signature page hereof.
11. Choice of Law. The parties agree that this Covenant Agreement shall be
governed by and interpreted in accordance with the laws of the State of Georgia,
without giving effect to the choice of law provisions thereof.
12. Effectiveness and Termination. This Covenant Agreement shall be
effective from and after the Effective Time. This Covenant Agreement shall
terminate automatically upon the termination of the Merger Agreement and,
accordingly, shall be rendered null and void.
13. Entire Agreement. This Covenant Agreement, together with the documents
expressly referred to herein, contain the entire understanding of the parties in
respect of the subject matter hereof, and supersede all prior negotiations and
understandings between the parties with respect to such subject matter.
14. Effect of Headings. The section headings are for convenience only and
shall not affect the construction or interpretation of this Covenant Agreement.
15. Defined Terms. Capitalized terms used but not defined in this Covenant
Agreement shall have the meanings assigned to them in the Merger Agreement.
16. Counterparts. This Covenant Agreement may be executed in several
counterparts, each of which shall be an original, but which together shall
constitute one and the same agreement.
Agreed to on the date indicated above.
WEST CORPORATION
-----------------------------
Stockholder
Address of Stockholder By:
------------------------------
----------------------------- Name:
----------------------------
----------------------------- Title:
---------------------------
-----------------------------
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Exhibit 8
[Intentionally omitted]
Exhibit 9
[Intentionally omitted]
Exhibit 10
[Intentionally omitted]
