EXHIBIT 2.3(C)
AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION,
REGISTRATION RIGHTS AGREEMENT,
AND ESCROW AGREEMENT
THIS AMENDMENT is made this April 4, 1997, but effective as of June 28,
1996, by and among NATIONAL ACTION FINANCIAL SERVICES, INC., a Georgia
corporation, for itself and as successor to SC ACQUISITION CORP., a Nebraska
corporation, ("NAFS"), SITEL CORPORATION, a Minnesota corporation ("SITEL"),
XXXXXXX X. XXXXXXXX individually and also in his capacity as Stockholders'
Representative ("Stockholders Representative"), and (with respect to the Escrow
Agreement only) FIRST BANK, N.A., as Escrow Agent.
This Amendment amends the Agreement and Plan of Reorganization dated June
6, 1996, as amended (the "Merger Agreement"), the Registration Rights Agreement
dated June 28, 1996 (the "Registration Rights Agreement"), and the Escrow
Agreement dated July 3, 1996 (the "Escrow Agreement") by and among the above
parties. The Merger Agreement, Registration Rights Agreement, and Escrow
Agreement are referred to collectively as the "Agreements".
WE AGREE AS FOLLOWS:
MERGER AGREEMENT
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1. The following definition of "Audit Completion Date" is added in
alphabetical order to Article I of the Merger Agreement:
"Audit Completion Date" means the date of issuance of the first report
of independent auditors on the financial statements of the combined
enterprise of SITEL and NAFS following the Closing Date.
2. The definition of "Escrow Period" in Article I of the Merger
Agreement is amended to state in its entirety as follows:
"Escrow Period" means the period beginning on the Closing Date
and ending on the earlier of the Audit Completion Date or the one
year anniversary of the Closing Date.
3. The definition of "Survival Period" in Article I of the Merger
Agreement is amended to state in its entirety as follows:
"Survival Period" means the period beginning on the Closing Date and
ending on the earlier of the Audit Completion Date or the one year
anniversary of the Closing Date.
4. Section 4.6 of the Merger Agreement is amended to state in its
entirety as follows:
4.6 Escrow Agreement. At the Closing, SITEL, Stockholders'
Representative, and an escrow agent to be mutually agreed upon by the
parties prior to Closing (the "Escrow Agent") shall execute and deliver an
Escrow Agreement in mutually satisfactory form (the "Escrow Agreement").
Pursuant to the Escrow Agreement, at the Closing SITEL shall deliver the
Indemnity Escrow Shares to the Escrow Agent. The Indemnity Escrow Shares
shall secure the NAFS Stockholders' indemnification obligations to SITEL
and its affiliates for the NAFS Stockholders' representations, warranties
and covenants under or pursuant to this Agreement for the Escrow
Period. As will be provided in the Escrow Agreement, during the Escrow
Period, the NAFS Stockholders shall be entitled to vote the Indemnity
Escrow Shares and to receive any dividends paid on the Indemnity Escrow
Shares. As will be provided in the Escrow Agreement, to the extent
Indemnity Escrow Shares are applied to indemnification obligations of the
NAFS Shareholders, any dividends paid to NAFS Shareholders in respect of
the applied Indemnity Escrow Shares shall be returned to SITEL promptly
following application of the Indemnity Escrow Shares. As will be provided
in the Escrow Agreement, to the extent not applied to any indemnification
obligations of the NAFS Stockholders during the Escrow Period, the
Indemnity Escrow Shares shall be immediately released to the NAFS
Stockholders following the Escrow Period.
5. Section 6.8 of the Merger Agreement is amended to state in its
entirety as follows:
6.8 Accounts Receivable. The accounts receivable of NAFS arising from
the Business as set forth on the Interim Balance Sheet or arising since the
date thereof are valid and genuine; have arisen solely out of bona fide
sales and deliveries of goods, performance of services and other business
transactions in the ordinary course of business consistent with past
practice; and are not subject to valid defenses, set-offs or counterclaims.
The allowance for collection losses on the Interim Balance Sheet has been
determined in accordance with GAAP consistent with past practice.
6. Section 10.3 of the Merger Agreement is amended to state in its
entirety as follows:
10.3 Method of Asserting Claims; Limitations on Indemnification.
___________________________________________________________
10.3.1 Claim Notice.
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(a) In the event that (1) any SITEL Claim is asserted against or
sought to be collected from an Indemnified SITEL Party by a third party, or
(2) an Indemnified SITEL Party has a SITEL Claim against NAFS Stockholders
which does not involve a claim or demand being asserted against or sought
to be collected from it by a third party, the Indemnified SITEL Party shall
promptly notify the Stockholders' Representative of such SITEL Claim,
specifying the nature of such SITEL Claim and the amount or the estimated
amount thereof to the extent then feasible (which estimate shall not be
conclusive of the final amount of such SITEL Claim) (the "Claim Notice").
The Stockholders' Representative shall have thirty (30) days from the
personal delivery or mailing of the Claim Notice (the "Notice Period") to
notify the Indemnified SITEL Party, (i) whether or not they dispute their
liability to the Indemnified SITEL Party hereunder with respect to such
SITEL Claim and (ii) in the case of a SITEL Claim involving a third party,
notwithstanding any such dispute, whether or not they desire, at their sole
cost and expense, to defend the Indemnified SITEL Party against such SITEL
Claim.
(b)(1) A Claim Notice for a SITEL Claim must be given to NAFS and
Stockholders' Representative within the Survival Period. The NAFS
Stockholders shall not have any indemnification obligations under this
Article X with respect to SITEL Claims for which a Claim Notice is not
given to them within the Survival Period.
(c) The NAFS Stockholders shall be obligated to indemnify the SITEL
Indemnified Parties with respect to SITEL Claims only to the extent of the
excess of such SITEL Claims (which either have been paid to third parties
or, if the claim originates with SITEL or NAFS, then which have been
presented and for which the NAFS Stockholders would have liability in
accordance with this Section 10.3 (without regard to this Section 10.3
(c) over $200,000 in the aggregate; provided, however, that this claims
"basket" shall not apply to the NAFS Stockholders' obligation to indemnify
the SITEL Indemnified Parties with respect to any misrepresentation in or
omission from the certificate with respect to the Net Book Value.
(d) The NAFS Stockholders' obligations for indemnification under this
Article X, and obligations underlying the other rights and remedies
referred to in Section 10.7, shall not exceed an amount equal to thirty
percent (30%) of the SITEL Common Shares comprising the Adjusted Merger
Consideration or, to the extent that the NAFS Stockholders no longer hold
such shares at the time of indemnification, the cash equivalent of such
shares based upon the Exchange Price (the "Aggregate Indemnification
Limit"). An individual NAFS Stockholder's obligations for indemnification
under this Article X shall not exceed such NAFS Stockholder's pro rata
share of the Aggregate Indemnification Limit, based upon such NAFS
Stockholder's percentage share of the NAFS Common Shares outstanding (on an
as converted and fully diluted basis) immediately prior to the Effective
Time.
(e) The amount of any SITEL Claim shall be reduced by the Federal and
state income tax benefits (computed using the then maximum marginal
corporate income tax rates) realized by the SITEL Indemnified Parties with
respect to such SITEL Claim. At the time the SITEL Indemnified Parties
give the Stockholders' Representative a Claim Notice, the SITEL Indemnified
Parties shall make a good faith estimate of any Federal and state income
tax benefits that will result from the Claim, and such Claim Notice shall
set forth in reasonable detail the computation of such estimated tax
benefits. If such estimated tax benefits and the SITEL Indemnified
Parties' actual tax benefits with respect to a Claim differ, prompt
adjustment shall be made for the amount of the difference at the time the
actual tax benefit is determined; provided that no adjustment shall be
made with respect to any difference which cannot reasonably be determined
until after the Survival Period.
(f) Notwithstanding anything to the contrary in this Agreement, the
NAFS Stockholders's representations, warranties and covenants do not extend
to and NAFS Stockholders shall not be obligated to indemnify the
Indemnified SITEL Parties with respect to any damages, losses,
deficiencies, liabilities, costs and expenses associated with the
termination of any NAFS state collection agency licenses at or following
the Closing solely because of the Merger.
(g) The amount of a SITEL Claim shall not bear interest except after
it has been reduced to a judgment, settlement or arbitration award and then
it shall bear interest at the judgment rate provided by Nebraska law.
(h) [Deleted]
7. Section 10.5 of the Merger Agreement is amended to state in its
entirety as follows:
10.5 Application or Release of Indemnity Escrow Shares.
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10.5.1 Application to Pay Indemnity Claims. During the Escrow
________________________________________________________
Period, the Escrow Agent shall deliver the Indemnity Escrow Shares from
time to time upon receipt of any of the following:
(a) A joint statement signed by SITEL and Stockholders'
Representative stating that an indemnity claim of an Indemnified
SITEL Party shall be paid out of the Indemnity Escrow Shares,
indicating the amount of the indemnity claim, the number of
Indemnity Escrow Shares to be applied to pay such indemnity claim and
the person or persons to whom such Indemnity Escrow Shares are to be
delivered; or
(b) An award rendered by an arbitrator, pursuant to an
arbitration conducted in accordance with Section 1.4.3 of the Escrow
Agreement, directing that an indemnity claim of an Indemnified SITEL
Party shall be paid out of the Indemnity Escrow Shares, indicating the
amount of the indemnity claim, the number of Indemnity Escrow Shares
to be applied to pay such indemnity claim and the person or persons to
whom such Indemnity Escrow Shares are to be delivered; or
(c) An order of a court of competent jurisdiction, which
has not been appealed within the applicable time period or is
non-appealable, directing that an indemnity claim of an
Indemnified SITEL Party shall be paid out of the Indemnity Escrow
Shares, indicating the amount of the indemnity claim, the number of
Indemnity Escrow Shares to be applied to pay such indemnity claim and
the person or persons to whom such Indemnity Escrow Shares are to be
delivered.
For purposes of this Section 10.5, unless otherwise agreed by the
Indemnified SITEL Parties and Stockholders' Representative, each Indemnity
Escrow Share shall have a deemed value of $27.375 (the price at which such
shares were valued for purposes of the Merger) and the indemnity claims
shall be paid pro rata out of the NAFS Stockholders' respective SITEL
Common Shares included within the Indemnity Escrow Shares. Delivery of
shares in respect of indemnity claims shall be effected by the Escrow Agent
delivering the certificates evidencing the Indemnity Escrow Shares to the
transfer agent for the Company together with the related stock powers (duly
completed by the Escrow Agent as to the pro rata number of shares being
delivered out of each certificate) with instructions to deliver the
appropriate number of shares from the certificates to the Company and the
balance to be reissued in the names of the NAFS Stockholders named on the
certificates and redelivered to the Escrow Agent.
10.5.2 Release Immediately Following the Escrow Period. To the extent
not previously delivered pursuant to Section 10.5.1, the Indemnity Escrow
Shares shall be delivered immediately following the expiration of the
Escrow Period. The Indemnified SITEL Parties shall receive therefrom, to
the extent not previously paid by Stockholders' Representative or NAFS
Stockholders, disbursed from the Indemnity Escrow Shares, or designated for
disbursement from the Indemnity Escrow Shares, the number of Indemnity
Escrow Shares necessary to satisfy the aggregate sum of all indemnity
claims resolved in favor of the Indemnified SITEL Parties reduced by the
aggregate sum of all indemnity claims resolved in favor of the Indemnified
NAFS Parties. The balance of the Indemnity Escrow Shares shall be
distributed to the NAFS Stockholders pro rata, in accordance with their
percentage ownership of the NAFS Common Shares (on an as converted and
fully diluted basis) outstanding immediately prior to the Effective Time.
10.5.3 Non-Limitation of Liability. Nothing in this Section 10.5 or
in the Escrow Agreement shall be construed to limit the liability of the
NAFS Stockholders under Section 10.1, or under any other provisions of this
Agreement, to the amount of the Indemnity Escrow Shares.
8. Section 10.6 Right of Setoff of the Merger Agreement is deleted.
ESCROW AGREEMENT
_________________
9. Section 1.1 of the Escrow Agreement is amended to state in its
entirety as follows:
1.1 Deposit of Indemnity Escrow Shares. Pursuant to Section 4.6 of
the Merger Agreement, SITEL has delivered to Escrow Agent at Closing the
Indemnity Escrow Shares, consisting of Sixty-Eight Thousand Five Hundred
Sixty-Two (68,562) SITEL Common Shares. The Indemnity Escrow Shares are
evidenced by certificates issued in the names of the NAFS Stockholders pro
rata in accordance with their percentage ownership of the NAFS Common
Shares outstanding (on an as converted and fully diluted basis) immediately
prior to the Effective Time and include accompanying executed stock powers
with signatures appropriately guaranteed and any required transfer tax
stamps. Escrow Agent shall place the Indemnity Escrow Shares in a
segregated account (the "Escrow Account"). Escrow Agent hereby
acknowledges receipt of the Indemnity Escrow Shares. Any shares of SITEL
Common Stock that are hereafter issued in respect of the Indemnity Shares
by reason of any reclassification, stock split, subdivision or combination
of shares, recapitalization, merger or similar capital events shall be
considered part of the Indemnity Escrow Shares for all purposes and shall
be promptly delivered to the Escrow Agent to be held in the Escrow Account.
10. Section 1.4.2 of the Escrow Agreement is amended to state in its
entirety as follows:
1.4 Application or Release of Indemnity Escrow Shares. The
Escrow Agent shall deliver shares from the Indemnity Escrow Shares from
time to time pursuant to Sections 1.4.1 (Applications to Pay Indemnity
Claims) and 1.4.2 (Release Following Escrow Period).
1.4.1 Application to Pay Indemnity Claims. The Escrow Agent shall
deliver shares from the Indemnity Escrow Shares during the Escrow
Period in payment of indemnity claims within five (5) business days
after receipt of any of the following:
(a) A joint statement signed by SITEL and Stockholders'
Representative stating that an indemnity claim of an
Indemnified SITEL Party shall be paid out of the Indemnity Escrow
Shares, indicating the amount of the indemnity claim, the number of
Indemnity Escrow Shares to be applied to pay such indemnity claim and
the person or persons to whom such Indemnity Escrow Shares are to be
delivered; or
(b) An award rendered by an arbitrator, pursuant to an
arbitration conducted in accordance with Section 1.4.3 of this
Escrow Agreement, directing that an indemnity claim of an
Indemnified SITEL Party shall be paid out of the Indemnity Escrow
Shares, indicating the amount of the indemnity claim, the number of
Indemnity Escrow Shares to be applied to pay such indemnity claim and
the person or persons to whom such Indemnity Escrow Shares are to be
delivered; or
(c) An order of a court of competent jurisdiction, which has
not been appealed within the applicable time period or is
non-appealable, directing that an indemnity claim of an
Indemnified SITEL Party shall be paid out of the Indemnity Escrow
Shares, indicating the amount of the indemnity claim, the number of
Indemnity Escrow Shares to be applied to pay such indemnity claim and
the person or persons to whom such Indemnity Escrow Shares are to be
delivered.
For purposes of payment of indemnity claims out of the Indemnity Escrow
Shares, unless otherwise agreed by the Indemnified SITEL Parties and
Stockholders' Representative, each Indemnity Escrow Share shall have a
deemed value of $27.375 (the price at which such shares were valued for
purposes of the Merger) and the indemnity claims shall be paid pro rata out
of the NAFS Stockholders' respective SITEL Common Shares included within
the Indemnity Escrow Shares. Delivery of shares in respect of indemnity
claims shall be effected by the Escrow Agent delivering the certificates
evidencing the Indemnity Escrow Shares to the transfer agent for the Company
together with the related stock powers (duly completed by the Escrow Agent as
to the pro rata number of shares being delivered out of each certificate) with
instructions to deliver the appropriate number of shares from the certificates
to the Company and the balance to be reissued in the names of the NAFS
Stockholders named on the certificates and redelivered to the Escrow Agent.
1.4.2 Release Following Escrow Period. To the extent not previously
distributed pursuant to Section 1.4.1, the Indemnity Escrow Shares shall be
delivered on the first business day immediately following the Escrow Period.
The Indemnified SITEL Parties shall receive therefrom, to the extent not
previously paid by Stockholders' Representative or NAFS Stockholders or
disbursed from the Indemnity Escrow Shares, the number of Indemnity Escrow
Shares necessary to satisfy the aggregate sum of all indemnity claims resolved,
in one of the manners contemplated in Section 1.4.1, in favor of the Indemnified
SITEL Parties, reduced by the aggregate sum of all indemnity claims resolved, in
one of the manners contemplated in Section 1.4.1, in favor of the Indemnified
NAFS Parties. The balance of the Indemnity Escrow Shares shall be distributed
to the Stockholders' Representative for further distribution to the NAFS
Stockholders pro rata, in accordance with their percentage ownership of the NAFS
Common Shares (on an as converted and fully diluted basis) outstanding
immediately prior to the Effective Time.
1.4.3 Resolution of Dispute.
(a) Good Faith Efforts. Because pooling of interests requirements
require the distribution of the Indemnity Escrow Shares immediately
following the Escrow Period, it is necessary that SITEL and
Stockholders' Representative endeavor to reach agreement with respect
to indemnity claims as soon as practicable after such indemnity claims
arise. In furtherance thereof, SITEL and Stockholders' Representative
agree that they shall negotiate in good faith and use all reasonable
efforts to agree upon the rights of the respective parties with respect to
such indemnity claims. If SITEL and Stockholders' Representative so agree,
a certificate setting forth such agreement shall be furnished to the Escrow
Agent as provided in Section 1.4.1(a).
(b) Submission to Arbitration. If, after 30 days following receipt
by Stockholders' Representative of any indemnity claim in accordance
with Section 10.3 of the Merger Agreement, SITEL and Stockholders'
Representative have not reached final agreement upon such indemnity
claim, as evidenced by their signing and delivering to Escrow Agent a
joint certificate in accordance with Section 1.4.1(a) setting forth
such agreement or mutually agreeing that the indemnity claim should not
proceed further, then such dispute shall be settled by arbitration in
Omaha, Nebraska, before a single arbitrator pursuant to the rules of the
American Arbitration Association. Arbitration may be commenced at any time
by any party hereto giving written notice to each other party to a dispute
that such dispute has been referred to arbitration under this Section
1.4.3. With respect to all matters referred to arbitration under this
Section 1.4.3, SITEL and Stockholders' Representative shall use all
reasonable efforts to obtain expeditious arbitration with the objective of
resolving the dispute promptly and in all events prior to the expiration of
the Escrow Period. The arbitrator shall be selected by the joint agreement
of SITEL and the Stockholders' Representative, but if they do not so agree
within twenty (20) days after the date of the notice referred to above, the
selection shall be made pursuant to the rules of the Association from the
panel of arbitrators maintained by such Association. Any award rendered by
the arbitrator shall be conclusive and binding upon the parties
hereto; provided, however, that any such award shall be accompanied by
a written opinion of the arbitrator giving the reasons for the award.
This provision for arbitration shall be specifically enforceable by
the parties and the decision of the arbitrator in accordance herewith
shall be final and binding and there shall be no right of appeal
therefrom. Each party shall pay its own expenses of arbitration and
the expenses of the arbitrator shall be equally shared; provided,
however, that if in the opinion of the arbitrator any claim for
indemnification or any defense or objection thereto was unreasonable,
the arbitrator may assess, as part of his award, all or any part of
the arbitration expenses of the other party (including reasonable
attorneys' fees) and of the arbitrator against the party raising such
unreasonable claim, defense or objection.
11. Article II of the Escrow Agreement is amended to state in its entirety
as follows:
ARTICLE II - DIVIDENDS, VOTING AND RIGHTS OF OWNERSHIP
Any cash dividends, dividends payable in property or other
distributions of any kind made in respect of the Indemnity Escrow Shares
shall be distributed currently by SITEL directly to the NAFS Stockholders
(or the duly registered successor holders of such Indemnity Escrow Shares)
pro rata, in accordance with their percentage ownership of the NAFS Common
Shares (on an as converted and fully diluted basis) outstanding immediately
prior to the Effective Time. Each NAFS Stockholder (or the duly registered
successor holders of such Indemnity Escrow Shares) shall have the right to
vote his or her pro rata share of the Indemnity Escrow Shares during such
time as the Indemnity Escrow Shares are held by the Escrow Agent. To the
extent Indemnity Escrow Shares are applied to indemnification obligations
of the NAFS Shareholders, any dividends paid to NAFS Shareholders in
respect of the applied Indemnity Escrow Shares shall be returned to SITEL
promptly following application of the Indemnity Escrow Shares.
REGISTRATION RIGHTS AGREEMENT
_____________________________
12. Section 10 of the Registration Rights Agreement is amended to state in
its entirety as follows:
Section 10. Lock-Up Agreement. Each Holder of Registrable
Securities has voluntarily and irrevocably offered that, in
connection with any firmly underwritten public offering of SITEL's common
stock, such Holder shall not sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any Registrable
Securities (other than those included in such firmly underwritten public
offering) without the prior written consent of SITEL or the underwriters
managing such underwritten offering, as the case may be, for such period of
time (not to exceed 90 days) from the effective date of such registration
as may be requested by such managing underwriters and SITEL has accepted
such offer in entering into this Agreement; provided, however, that the
above lockup agreement shall not apply unless all executive officers,
directors and holders of more than 10% of the SITEL's outstanding
Common Stock enter into similar agreements. In order to enforce the
foregoing covenant, SITEL may impose stop-transfer instructions with
respect to the Registrable Securities until the end of such lock-up period.
GENERAL
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13. Full Force and Effect. Except as modified hereby, the parties confirm
that each Agreement remains in full force and effect according to its terms
immediately prior to this Amendment. This Amendment shall be governed by
Nebraska law, without regard to its conflicts of laws principles.
[Signature page follows]
SIGNATURE PAGE TO
AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION,
REGISTRATION RIGHTS AGREEMENT,
AND ESCROW AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment.
NATIONAL ACTION FINANCIAL SERVICES, INC.
By: /S/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Chief Executive Officer
SITEL CORPORATION
By: /S/ Xxxxx X. Major
Xxxxx X. Major
Chief Financial Officer
Stockholders' Representative
/S/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx,
individually and in his capacity as a
Stockholders' Representative pursuant to a
Stockholders' Representative Agreement dated as of
June 6, 1996, by and among Xxxxxxx X. Xxxxxxxx and
the NAFS Stockholders signatory thereto
SIGNATURE PAGE TO
AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION,
REGISTRATION RIGHTS AGREEMENT,
AND ESCROW AGREEMENT
(continued)
The undersigned becomes signatory to this Amendment solely in order to
indicate its acknowledgment and acceptance of the Amendments to the Escrow
Agreement set forth in paragraphs 9, 10 and 11.
FIRST BANK NATIONAL ASSOCIATION
(Escrow Agent)
By: /S/ Xxxxx Sites
Title: Trust Officer
Date: 4/21/97
By: /S/ Xxxxxxx X. X'Xxxxxx
Title: Vice President
Date: 4/21/97
