EXHIBIT 2.1
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
dated as of
June 17, 1999
by and between
BANCTEC, INC.
and
COLONIAL ACQUISITION CORP.
TABLE OF CONTENTS
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ARTICLE I
THE MERGER
Section 1.01. The Merger.............................................................. 2
Section 1.02. Closing................................................................. 2
Section 1.03. Effective Time.......................................................... 2
Section 1.04. Effects of the Merger................................................... 2
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
Section 2.01. Effect on Capital Stock................................................. 3
(a) Cancellation of Certain Stock............................................ 3
(b) Conversion of Company Common Stock....................................... 3
(c) Cancellation and Retirement of Company Common Stock...................... 3
(d) Dissenting Shares........................................................ 3
(e) Acquisition Common Stock................................................. 4
Section 2.02. Exchange of Certificates................................................ 4
(a) Exchange Agent........................................................... 4
(b) Exchange Procedures...................................................... 4
(c) No Further Ownership Rights in Company Common Stock
Exchanged For Cash................................................... 5
(d) Termination of Exchange Fund............................................. 5
(e) No Liability............................................................. 5
(f) Investment of Exchange Fund.............................................. 6
(g) Lost Certificates........................................................ 6
(h) Withholding Rights....................................................... 6
Section 2.03. Stock Plans............................................................. 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of the Company........................... 6
(a) Organization, Qualifications and Corporate Power; Materiality............ 6
(b) Organizational Documents; Capital Stock and Securities Owned............. 7
(c) Authorization of Agreement, Non-Contravention, Etc....................... 7
(d) Capital Structure........................................................ 8
(e) Subsidiaries............................................................. 9
(f) Voting of Shares......................................................... 10
(g) SEC Documents; Financial Statements...................................... 10
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(h) Disclosure Documents; Information Supplied............................. 10
(i) Absence of Certain Changes or Events................................... 11
(j) No Undisclosed Material Liabilities.................................... 12
(k) Compliance with Law; Litigation........................................ 13
(l) Taxes.................................................................. 13
(m) Pension and Benefit Plans; ERISA....................................... 14
(n) Environmental Matters.................................................. 16
(o) Intellectual Property.................................................. 16
(p) Real Properties........................................................ 16
(q) Tangible Personal Property............................................. 17
(r) Insurance.............................................................. 18
(s) Contracts.............................................................. 18
(t) Labor Matters.......................................................... 18
(u) Transactions with Affiliates........................................... 19
(v) Year 2000.............................................................. 19
(w) Rights Agreement....................................................... 19
(x) Opinion of Financial Advisor........................................... 20
(y) Brokers................................................................ 20
(z) Board Recommendation................................................... 20
(aa) Vote Required......................................................... 20
(bb) State Takeover Statute Inapplicable................................... 20
(cc) Stock Plans........................................................... 20
Section 3.02. Representations and Warranties of Acquisition......................... 20
(a) Organization, Qualifications and Corporate Power....................... 21
(b) Capital Structure...................................................... 21
(c) Authorization of Agreement, Non-Contravention, Etc..................... 21
(d) Information Supplied................................................... 22
(e) Subsidiaries........................................................... 22
(f) Acquisition Not an Interested Stockholder.............................. 22
(g) Interim Operations of Acquisition...................................... 22
(h) Brokers................................................................ 22
(i) Financing.............................................................. 22
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.01. Covenants of the Company.............................................. 23
(a) Ordinary Course........................................................ 23
(b) Dividends; Change in Stock............................................. 24
(c) Issuance of Securities................................................. 24
(d) Governing Documents.................................................... 24
(e) No Acquisitions........................................................ 24
(f) No Dispositions........................................................ 24
(g) Indebtedness........................................................... 24
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(h) Accounting Matters.......................................................... 25
(i) Advice of Changes; Filings.................................................. 25
(j) Compensation; Benefit Plans................................................. 25
(k) Discharges or Waiver of Claims.............................................. 25
(l) Leases and Lease Commitments................................................ 25
(m) Liquidation Plan, Etc....................................................... 26
(n) Collective Bargaining Agreements............................................ 26
(o) Transactions with Affiliates................................................ 26
(p) Tax Matters................................................................. 26
(q) Intellectual Property....................................................... 26
(r) Insurance................................................................... 26
(s) Other Actions............................................................... 26
Section 4.02. Covenants of Acquisition................................................... 27
(a) Other Actions............................................................... 27
(b) Advice of Changes........................................................... 27
ARTICLE V
OTHER AGREEMENTS
Section 5.01. No Solicitation............................................................ 27
Section 5.02. Recapitalization........................................................... 28
Section 5.03. Preparation of the Proxy Statement......................................... 28
Section 5.04. Company Stockholder Meeting................................................ 29
Section 5.05. Access to Information...................................................... 29
Section 5.06. Reasonable Best Efforts.................................................... 29
Section 5.07. Indemnification and Insurance.............................................. 30
Section 5.08. Benefits Matters........................................................... 32
Section 5.09. Resignations of Directors.................................................. 33
Section 5.10. Solvency at Closing........................................................ 33
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01. Conditions to Each Party's Obligation to Effect the Merger................. 33
(a) Company Stockholder Approval................................................ 33
(b) HSR Act and Other Approvals................................................. 33
(c) No Injunctions or Restraints; Illegality.................................... 34
Section 6.02. Conditions to the Obligations of Acquisition to Effect the Merger.......... 34
(a) Representations and Warranties.............................................. 34
(b) Performance of Obligations of the Company................................... 34
(c) Consents, Etc............................................................... 34
(d) No Litigation............................................................... 34
(e) Financing................................................................... 35
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Section 6.03. Conditions to the Obligations of the Company to Effect the Merger........ 35
(a) Representations and Warranties............................................ 35
(b) Performance of Obligations of Acquisition................................. 35
(c) Financing................................................................. 35
(d) Solvency Letter........................................................... 36
Section 6.04. Frustration of Closing Conditions........................................ 36
ARTICLE VII
TERMINATION AND AMENDMENT
Section 7.01. Termination.............................................................. 36
Section 7.02. Effect of Termination.................................................... 37
Section 7.03. Fees and Expenses........................................................ 37
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. Nonsurvival of Representations and Warranties............................ 38
Section 8.02. Confidentiality Agreement................................................ 38
Section 8.03. Publicity................................................................ 38
Section 8.04. Amendment................................................................ 38
Section 8.05. Extension; Waiver........................................................ 39
Section 8.06. Notices.................................................................. 39
Section 8.07. Counterparts............................................................. 40
Section 8.08. Entire Agreement; No Third-Party Beneficiaries;
Rights of Ownership................................................ 40
Section 8.09. Governing Law............................................................ 40
Section 8.10. Successors and Assigns................................................... 40
Section 8.11. Jurisdiction............................................................. 40
Section 8.12. Headings; Interpretation................................................. 41
Section 8.13. Severability............................................................. 41
Section 8.14. WAIVER OF JURY TRIAL..................................................... 41
Section 8.15. Reference; No Waiver..................................................... 41
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Disclosure Schedule
Section 2.05 Stock Plans
Section 3.01(b) Shares of Capital Stock and Securities Owned
Section 3.01(c) Approvals and Consents Required
Section 3.01(e) Subsidiaries
Section 3.01(f) Registration Rights, Stockholder and Voting Agreements
Section 3.01(i)(1) Certain Changes or Events
Section 3.01(i)(6) Loans and Investments
Section 3.01(i)(8) Transactions, Commitments, Contracts or Agreements
Section 3.01(i)(10) Compensation and Benefits
Section 3.01(i)(10) Employment and Compensation Arrangements
Section 3.01(j) Material Liabilities
Section 3.01(l) Taxes
Section 3.01(m)(1) Pension and Benefit Plans; ERISA
Section 3.01(m)(5) Increases in Compensation
Section 3.01(n) Environmental Matters
Section 3.01(o) Intellectual Property
Section 3.01(p)(i) Owned Properties
Section 3.01(p)(ii) Leased Properties
Section 3.01(r) Insurance
Section 3.01(s) Contracts
Section 3.01(t) Labor Matters
Section 3.01(u) Transactions with Affiliates
Section 4.01(e) Mergers, Acquisitions, Etc.
Section 4.01(m) Liquidation Plan, Etc.
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AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of June
17, 1999 (the "Agreement"), by and between BancTec, Inc., a Delaware corporation
(the "Company"), and Colonial Acquisition Corp., a Delaware corporation
("Acquisition").
W I T N E S S E T H :
WHEREAS, the Company and Acquisition have entered into that certain
Agreement and Plan of Merger dated as of April 5, 1999 (the "Original Merger
Agreement");
WHEREAS, subsequent to the date of the Original Merger Agreement, the
Company and Acquisition have each determined that it is in the best interests of
each of the foregoing entities and their respective stockholders to enter into
this Agreement, which amends and restates the Original Merger Agreement.
WHEREAS, the Boards of Directors of each of Acquisition and the
Company have unanimously deemed it advisable and in the best interests of their
respective stockholders for Acquisition to merge with and into the Company (the
"Merger") pursuant to Section 251 of the Delaware General Corporation Law upon
the terms and subject to the conditions set forth herein;
WHEREAS, the Boards of Directors of each of Acquisition and the
Company have unanimously adopted resolutions approving and declaring advisable
this Agreement and the Merger;
WHEREAS, Welsh, Carson, Xxxxxxxx & Xxxxx VIII, L.P. ("WCAS VIII"), as
the holder of all the issued and outstanding capital stock of Acquisition has
approved and adopted this Agreement, the Merger and the transactions
contemplated hereby;
WHEREAS, the Merger requires the approval of this Agreement by the
affirmative vote of the holders of a majority of the outstanding shares of
common stock, $.01 par value per share, of the Company (the "Company Common
Stock");
WHEREAS, it is intended that the Merger be recorded as a
recapitalization for financial reporting purposes and each of the parties, after
discussion with their respective auditors, believe that the Merger is eligible
for such accounting treatment; and
WHEREAS, each of Acquisition and the Company desires to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe certain conditions for the Merger;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), Acquisition shall be merged with and into
the Company at the Effective Time (as defined in Section 1.03). Following the
Merger, the separate corporate existence of Acquisition shall cease and the
Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
Acquisition in accordance with the DGCL.
Section 1.02. Closing. Unless this Agreement shall have been
terminated and the transactions contemplated herein abandoned pursuant to
Section 7.01, and subject to the satisfaction or waiver of the conditions set
forth in Article VI, the closing of the Merger (the "Closing") will take place
at 10:00 a.m. on a date to be specified by the parties, which shall be no later
than the second business day following the satisfaction or waiver of all the
conditions set forth in Article VI (the "Closing Date"), at the offices of
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, unless another time, date or place is agreed to by the parties
hereto.
Section 1.03. Effective Time. Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be consummated by filing
a certificate of merger (the "Certificate of Merger") in accordance with the
relevant provisions of the DGCL with the Secretary of State of the State of
Delaware. The Merger shall become effective upon the completion of the filing
of the Certificate of Merger with the Secretary of State of the State of
Delaware or at such time thereafter as is provided in the Certificate of Merger
(the time the Merger becomes effective being hereinafter referred to as the
"Effective Time").
Section 1.04. Effects of the Merger. (a) The Merger shall have the
effects as set forth in the applicable provisions of the DGCL.
(b) The directors of Acquisition and the officers of the Company
immediately prior to the Effective Time shall, from and after the Effective
Time, be the initial directors and officers, respectively, of the Surviving
Corporation until their successors have been duly elected
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or appointed and qualified, or until their earlier death, resignation or removal
in accordance with the Surviving Corporation's Certificate of Incorporation and
Bylaws.
(c) The Certificate of Incorporation of Acquisition, as amended
pursuant to the Certificate of Merger relating thereto, shall be the Certificate
of Incorporation of the Surviving Corporation following the Merger until
thereafter changed or amended as provided therein or by applicable law.
(d) The Bylaws of Acquisition as in effect at the Effective Time
shall be the Bylaws of the Surviving Corporation following the Merger until
thereafter changed or amended as provided therein or by the Certificate of
Incorporation of the Surviving Corporation or applicable law.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
Section 2.01. Effect on Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the Company,
Acquisition or the holders of Company Common Stock or of any shares of capital
stock of Acquisition:
(a) Cancellation of Certain Stock. Each share of Company Common
-----------------------------
Stock that is owned by Acquisition or by the Company or any of its subsidiaries
(other than those held in connection with the Stock Plans (as defined in Section
2.05)) shall automatically be canceled and retired and shall cease to exist and
no consideration shall be delivered in exchange therefor.
(b) Conversion of Company Common Stock. Except as otherwise provided
----------------------------------
in Section 2.01(a) or as provided in 2.01(d) with respect to shares of Company
Common Stock as to which appraisal rights have been exercised, each share of
Company Common Stock issued and outstanding immediately prior to the Effective
Time shall be converted into the right to receive from the Surviving Corporation
following the Merger an amount in cash equal to $18.50 (the "Merger
Consideration").
(c) Cancellation and Retirement of Company Common Stock. Except as
---------------------------------------------------
provided in Section 2.01(d), all shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than shares referred
to in Section 2.01(a), which shall be canceled and retired in accordance
therewith) shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to have any rights with respect thereto except the
right to receive the Merger Consideration, without interest thereon.
(d) Dissenting Shares. Notwithstanding anything in this Agreement to
-----------------
the contrary, shares of Company Common Stock that are outstanding immediately
prior to the
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Effective Time and held by a holder who has not voted in favor of the Merger or
consented thereto in writing and who has validly demanded appraisal for such
shares in accordance with Section 262 of the DGCL ("Dissenting Shares") shall
not be converted into a right to receive the Merger Consideration, unless such
holder fails to perfect or withdraws or otherwise loses its right to appraisal.
If after the Effective Time, any such holder fails to perfect or withdraws or
loses its right to appraisal, such Dissenting Shares shall be treated as if they
had been converted as of the Effective Time into the right to receive the Merger
Consideration to which such holder is entitled, without interest thereon. The
Company shall give prompt notice to Acquisition of any demands, attempted
withdrawals of such demands and any other instruments served pursuant to
applicable law received by the Company for appraisal of shares of Company Common
Stock, and, prior to the Effective Time, Acquisition shall have the right to
direct all negotiations and proceedings with respect to such demands. The
Company shall not, except with the prior written consent of Acquisition, make
any payment with respect to, or settle, offer to settle or approve any
withdrawal of any such demands.
(e) Acquisition Common Stock. Each share of common stock, par value
------------------------
$.01 per share, of Acquisition (the "Acquisition Common Stock") issued and
outstanding immediately prior to the Effective Time shall be converted into and
become one fully paid and nonassessable share of common stock, par value $.01
per share, of the Surviving Corporation as of the Effective Time. Each share of
Class A Common Stock, par value $.01 per share, of Acquisition (the "Acquisition
Class A Common Stock") issued and outstanding immediately prior to the Effective
Time shall be converted into and become one fully paid and nonassessable share
of Class A Common Stock, par value $.01 per share, of the Surviving Corporation.
Section 2.02. Exchange of Certificates. (a) Exchange Agent. Prior
--------------
to the Effective Time, Acquisition shall appoint a bank or trust company that is
reasonably satisfactory to the Company to act as exchange and paying agent (the
"Exchange Agent") for the payment of the Merger Consideration. As of the
Effective Time, the Surviving Corporation shall deposit with the Exchange Agent,
for the benefit of the holders of shares of Company Common Stock, cash in an
amount sufficient to pay the aggregate Merger Consideration required to be paid
pursuant to Section 2.01 in exchange for outstanding shares of Company Common
Stock (such cash being hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as reasonably practicable (and in
-------------------
any event no later than ten days) after the Effective Time, the Surviving
Corporation shall cause the Exchange Agent to mail or deliver to each person who
was, immediately prior to the Effective Time, a holder of record of Company
Common Stock that was converted into the right to receive the Merger
Consideration pursuant to Section 2.01(b), (i) a letter of transmittal in
customary form and containing customary provisions and (ii) instructions for use
in effecting the surrender of certificates representing such person's shares of
Company Common Stock in exchange for the Merger Consideration. Promptly after
the Effective Time, each holder of record of an outstanding certificate or
certificates which prior thereto represented shares of Company Common Stock (the
"Certificates") shall, upon surrender to the Exchange Agent of such
4
Certificates or, if such shares are held in book-entry or other uncertificated
form, upon the entry through a book-entry transfer agent of the surrender of
such shares of Company Common Stock on a book-entry account statement (any
references herein to Certificates shall be deemed to include references to book-
entry account statements relating to the ownership of Company Common Stock), and
acceptance thereof by the Exchange Agent, be entitled to receive in exchange
therefor an amount of cash equal to the Merger Consideration per share
multiplied by the number of shares represented by such Certificates and the
Certificates so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Company Common Stock that is not registered in the
transfer records of the Company, the payment of the Merger Consideration may be
made to a person other than the person in whose name the Certificate so
surrendered is registered if, and only if, such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the person requesting
such payment shall pay any transfer or other taxes required by reason of the
payment of the Merger Consideration to a person other than the registered holder
of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 2.02, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration which the holder thereof has the right to
receive in respect of such Certificate pursuant to this Article II. No interest
shall be paid or will accrue on any cash payable as Merger Consideration
pursuant to this Article II.
(c) No Further Ownership Rights in Company Common Stock Exchanged For
-----------------------------------------------------------------
Cash. All cash paid upon the surrender therefor of Certificates in accordance
----
with the terms of this Article II shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Company Common Stock
exchanged for cash theretofore represented by such Certificates, and there shall
be no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Company Common Stock which were
outstanding immediately prior to the Effective Time and which have been
converted, in whole or in part, pursuant to this Agreement into the right to
receive the Merger Consideration, and if after the Effective Time such
Certificates are presented to the Company for transfer, they shall be canceled
against delivery of the Merger Consideration.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund
----------------------------
that remains undistributed to the holders of the Certificates for more than six
months after the Effective Time shall be delivered to the Surviving Corporation,
upon demand, and any holders of the Certificates who have not theretofore
complied with this Article II shall thereafter look only to the Surviving
Corporation (as general creditors thereof) for payment of their claim for Merger
Consideration.
(e) No Liability. None of the Company, Acquisition, the Surviving
------------
Corporation or the Exchange Agent shall be liable to any person in respect of
any cash or other property from the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If any
Certificate shall not have been surrendered prior to two years after the
Effective Time (or immediately prior to such earlier date on which any Merger
Consideration
5
would otherwise escheat to or become the property of any Governmental Entity (as
defined in Section 3.01(c)), any such Merger Consideration shall, to the extent
permitted by applicable law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any person previously entitled
thereto.
(f) Investment of Exchange Fund. The Exchange Agent shall invest any
---------------------------
cash included in the Exchange Fund as directed by the Surviving Corporation.
Any interest and other income resulting from investments shall be paid to the
Surviving Corporation.
(g) Lost Certificates. If any Certificate shall have been lost,
-----------------
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable and customary amount as the Surviving Corporation may direct as
indemnity against any claim that may be made against it with respect to such
Certificate, the Exchange Agent shall deliver in exchange for such lost, stolen
or destroyed Certificate the applicable Merger Consideration with respect
thereto pursuant to this Agreement.
(h) Withholding Rights. The Surviving Corporation shall be entitled
------------------
to deduct and withhold from consideration otherwise payable to any holder of
Company Common Stock or Company Stock Options (as defined in Section 2.03)
pursuant to this Agreement such amounts as may be required to be deducted and
withheld with respect to the making of such payment under the Internal Revenue
Code of 1986, as amended (the "Code"), or under any provision of state, local or
foreign tax law.
Section 2.03. Stock Plans. Each of the Company's stock option or
stock purchase plans (the "Company Stock Plans") and options to acquire shares
of Company Common Stock or shares of restricted stock of the Company outstanding
on the date hereof (the "Company Stock Options"), including without limitation
information concerning the date of vesting of such options or the lapse of
restrictions on such restricted stock and the acceleration of such vesting or
restrictions by virtue of the Merger or the transactions contemplated hereby, is
as previously delivered to Acquisition and listed in Section 2.03 of the
Disclosure Schedule. The Company shall take all actions necessary to provide
that, as of the Effective Time, (i) each Company Stock Option so surrendered for
cash shall be canceled, and (ii) in consideration for such cancellation, the
Company shall pay to each such holder of Company Stock Options an amount in cash
equal to the product of (1) the excess, if any, of the Merger Consideration over
the per-share exercise price thereof and (2) the number of shares of Company
Common Stock subject thereto immediately prior to the Effective Time (the
"Excess Option Payment Amount").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
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Section 3.01. Representations and Warranties of the Company. The
Company represents and warrants as of the date hereof (or such other date as
shall be expressly specified) to Acquisition as follows:
(a) Organization, Qualifications and Corporate Power; Materiality.
-------------------------------------------------------------
The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and is duly licensed or
qualified to do business as a foreign corporation and is in good standing in
each other jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such licensing or qualification necessary and
where the failure to so qualify would in the aggregate have a material adverse
effect (as defined) on the Company. As used in this Agreement, "material
adverse effect" means, when used in connection with the Company, any change,
effect, event, occurrence or development that is, or is reasonably likely to be,
materially adverse to the business, results of operations or condition
(financial or other) of the Company and its Subsidiaries (as defined in Section
3.01(e)(i)), taken as a whole; "material adverse effect" means, when used in
connection with Acquisition, any change, effect, event, occurrence or
development that is materially adverse to Acquisition's ability to consummate
the transactions contemplated hereby.
(b) Organizational Documents; Capital Stock and Securities Owned.
------------------------------------------------------------
The Company has made available to Acquisition complete and correct copies of its
charter and bylaws and the charter and bylaws (or other organizational
documents) of each of its Subsidiaries, in each case as amended to the date of
this Agreement. The Company has the corporate power and authority to own and
hold its properties and to carry on its business as currently conducted. Except
as set forth in Section 3.01(b) of the Disclosure Schedule, the Company does not
own of record or beneficially, directly or indirectly, (i) any shares of
outstanding capital stock or securities convertible into capital stock of any
other corporation or (ii) any participating interest in any partnership, joint
venture or other non-corporate business enterprises.
(c) Authorization of Agreement, Non-Contravention, Etc. The Company
--------------------------------------------------
has all requisite corporate power and authority to enter into this Agreement
and, subject to obtaining the affirmative vote of the holders of a majority of
the outstanding shares of Company Common Stock (the "Company Stockholder
Approval") with respect to the Merger, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, subject to
obtaining the Company Stockholder Approval with respect to the Merger. This
Agreement has been duly executed and delivered by the Company and, assuming the
due authorization, execution and delivery by Acquisition, constitutes a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, moratorium, reorganization and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). The execution and delivery of this Agreement
7
does not, and the consummation of the transactions contemplated hereby will not,
conflict with, or result in any breach or violation of, or result in the
termination of, or accelerate the performance required by, or give right to a
right of termination, cancellation or acceleration of any obligation under, or
the creation of a Lien (as defined in 3.01(d)) pursuant to (i) any provision of
the charter (or similar organizational documents) or bylaws of the Company or
any Subsidiary of the Company or (ii) subject to obtaining or making the
consents, approvals, orders, authorizations, registrations, declarations and
filings referred to in the following sentence, any loan or credit agreement,
note, mortgage, indenture, lease, Company Benefit Plan (as defined in Section
3.01(m)) or other agreement, obligation, instrument, permit, concession,
franchise, license, or any judgment, order, decree, statute, law, ordinance,
rule or regulation (collectively "Laws") applicable to the Company or any
Subsidiary or their respective properties or assets, in any case under this
clause (ii) which would, individually or in the aggregate, have a material
adverse effect on the Company except as set forth in Section 3.01(c) of the
Disclosure Schedule. Except as set forth in Section 3.01(c) of the Disclosure
Schedule, no consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality (a "Governmental Entity") is
required by or with respect to the Company or any Subsidiary in connection with
the execution and delivery of this Agreement by the Company or the consummation
by the Company of the transactions contemplated hereby, the failure of which to
be obtained or made would, individually or in the aggregate, have a material
adverse effect on the Company or would prevent or materially delay the
consummation of the transactions contemplated hereby, except for (A) the filing
with the Securities and Exchange Commission ("SEC") of (i) a proxy statement in
definitive form prepared in accordance with Regulation 14A promulgated under the
Exchange Act (such proxy statement as amended or supplemented from time to time
being hereinafter referred to as the "Proxy Statement") relating to the
consideration of the Company Stockholder Approval at a meeting (the "Company
Stockholder Meeting") of the stockholders of the Company duly called and
convened to consider the approval of this Agreement and (ii) such reports under
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act"), as may be required in connection
with this Agreement, the Merger and the other transactions contemplated hereby,
(B) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware and appropriate documents with the relevant authorities of
other states in which the Company is qualified to do business, (C) filings
required pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder (the "HSR
Act"), (D) filings necessary to satisfy the applicable requirements of state
securities or "blue sky" laws and (E) those required under the rules and
regulations of the New York Stock Exchange, Inc. ("NYSE") (collectively, the
"Required Filings").
(d) Capital Structure. The authorized capital stock of the Company
-----------------
consists of 45,000,000 shares of Company Common Stock and 1,000,000 shares of
preferred stock, $.01 par value, of the Company ("Company Preferred Stock" and,
together with the Company Common Stock, the "Company Capital Stock"). At the
close of business on March 29, 1999, (A) 19,461,601 shares of Company Common
Stock were outstanding, (B) no shares of Company
8
Preferred Stock were outstanding, (C) options to acquire 2,918,406 shares of
Company Common Stock from the Company pursuant to the Company Stock Plans were
outstanding, and (D) common stock purchase rights ("Purchase Rights") to acquire
certain shares of Company Common Stock from the Company pursuant to the Rights
Agreement (as defined in Section 3.01(w)) were outstanding. Other than as set
forth above, at the close of business on March 9, 1999, there were outstanding
no shares of Company Capital Stock or options, warrants or other rights to
acquire Company Capital Stock from the Company. Since March 9, 1999, (x) there
have been no issuances by the Company of shares of Company Capital Stock other
than issuances of shares of Company Common Stock pursuant to the exercise of
Company Stock Options outstanding as of March 9, 1999 and (y) there have been no
issuances by the Company of options, warrants or other rights to acquire capital
stock from the Company except as expressly permitted by this Agreement. No
bonds, debentures, notes or other indebtedness having the right to vote (or
convertible into or exchangeable for securities having the right to vote) on any
matters on which stockholders of the Company may vote are issued or outstanding.
All outstanding shares of Company Common Stock are, and any shares of Company
Common Stock that may be issued upon the exercise of Company Stock Options when
issued will be, duly authorized, validly issued, fully paid and nonassessable,
and will be delivered free and clear of all claims, liens, mortgages,
encumbrances, pledges or security interests (collectively, "Liens") and not
subject to preemptive rights. Other than as set forth above, and except for this
Agreement, the Stock Option Agreement, the Company Stock Plans, the Company
Stock Options and the Purchase Rights, there are no outstanding securities,
options, warrants, calls, rights, commitments, agreements or undertakings of any
kind to which the Company or any Subsidiary is a party or by which the Company
or any Subsidiary is bound obligating the Company or any Subsidiary to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other equity or voting securities of the Company or of any
Subsidiary or obligating the Company or any Subsidiary to issue, grant, extend
or enter into any such security, option, warrant, call, right, commitment,
agreement or undertaking. There are no outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its Subsidiaries.
(e) Subsidiaries. (i) Each Subsidiary that is a corporation is duly
------------
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and is duly licensed or qualified to do business
as a foreign corporation and is in good standing in each other jurisdiction in
which the nature of its business or the ownership or leasing of its properties
makes such licensing or qualification necessary and where the failure to so
qualify would in the aggregate have a material adverse effect on the Company.
For purposes of this Agreement, "Subsidiary" means any corporation or other
entity (including any partnership referred to in Section 3.01(e)(ii) below) of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are directly or indirectly owned by the Company. All Subsidiaries and
their respective jurisdictions of incorporation are identified in Section
3.01(e) of the Disclosure Schedule.
9
(ii) Each partnership (whether or not limited partnership) and each
limited liability company in which the Company directly or indirectly owns a
partnership interest or membership interest, as the case may be, entitling it to
50% or more of the voting interest therein, and each limited partnership for
which the Company or a Subsidiary is a general partner, has been duly organized
and is in good standing under the laws of its jurisdiction of organization, and
is duly licensed or qualified to do business and is in good standing in each
other jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such licensing or qualification necessary and
where the failure to so qualify would in the aggregate have a material adverse
effect on the Company. The Company has previously delivered to Acquisition a
list of all such partnerships and limited liability companies.
(iii) Except as set forth in Section 3.01(e) of the Disclosure
Schedule, all of the outstanding capital stock of, or other ownership interests
in, each Subsidiary is owned by the Company, directly or indirectly, free and
clear of any Lien and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests).
(f) Voting of Shares. As of the date hereof, there are not any
----------------
stockholder agreements, voting trusts or other agreements or understandings to
which the Company is a party or by which it is bound relating to the voting of
any shares of the Company. All registration rights agreements, stockholder
agreements and voting agreements to which the Company or any of its Subsidiaries
is a party are identified in Section 3.01(f) of the Disclosure Schedule.
(g) SEC Documents; Financial Statements. The Company has filed and
-----------------------------------
made available to Acquisition a correct and complete copy of each report,
schedule, registration statement and definitive proxy statement required to be
filed by the Company with the SEC since January 1, 1996 (the "Company SEC
Documents"). As of their respective dates, the Company SEC Documents complied
in all material respects with the requirements of the Securities Act of 1933, as
amended, or the Exchange Act, as the case may be, applicable to such Company SEC
Documents. None of the Company SEC Documents when filed contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of the Company included in the Company SEC Documents comply as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis ("GAAP") during the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited interim
financial statements, as permitted by Form 10-Q, or for normal year-end
adjustments that are not, in the aggregate, material) and fairly present in all
material respects the consolidated financial position of the Company and its
consolidated subsidiaries as at the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended.
10
(h) Disclosure Documents; Information Supplied. Each document
------------------------------------------
required to be filed by the Company with the SEC in connection with the
transactions contemplated by this Agreement (the "Company Disclosure
Documents"), including without limitation the the Proxy Statement and any
amendments or supplements thereto, will comply as to form in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act and the rules and regulations thereunder, and each such document required to
be filed with any Governmental Entity other than the SEC will comply in all
material respects with the provisions of applicable law as to the information
required to be contained therein. At the date the Proxy Statement is first
mailed to the stockholders of the Company or at the time of the Company
Stockholder Meeting, the Proxy Statement will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. At the time of the
filing of any Company Disclosure Document other than the Proxy Statement and at
the time of any distribution thereof, such Company Disclosure Document will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The representations and warranties contained in this Section
3.01(h) do not apply to statements or omissions included or incorporated by
reference in the Company Disclosure Documents based upon information supplied to
the Company by Acquisition specifically in writing for inclusion or
incorporation by reference therein.
(i) Absence of Certain Changes or Events. Since December 31, 1998,
------------------------------------
the Company and its Subsidiaries have conducted their businesses only in the
ordinary course of business and in a manner consistent with past practice
(except in connection with the negotiation, execution and delivery of this
Agreement) and there has not been:
(1) any event, occurrence or development of a state of circumstances
or facts which has had a material adverse effect except as set forth in Section
3.01(i)(1) of the Disclosure Schedule;
(2) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of Company Capital Stock, or any
repurchase, redemption or other acquisition by the Company or any Subsidiary of
any outstanding shares of capital stock or other securities of, or other
ownership interests in, the Company or any Subsidiary;
(3) any amendment of any material term of any outstanding security of
the Company or any Subsidiary;
(4) any incurrence, assumption or guarantee by the Company or any
Subsidiary of any indebtedness for borrowed money other than in the ordinary
course of business and in amounts and on terms consistent with past practice,
but in any event not in excess of $1,000,000 individually or $5,000,000 in the
aggregate;
11
(5) any creation or assumption by the Company or any Subsidiary of
any Lien on any material asset other than in the ordinary course of business
consistent with past practices, but in any event not securing any obligation in
excess of $5,000,000;
(6) any making of any loan, advance or capital contributions to or
investment in any person other than loans, advances or capital contributions to
or investments in wholly-owned Subsidiaries made in the ordinary course of
business consistent with past practice except as set forth in Section 3.01(i)(6)
of the Disclosure Schedule;
(7) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company or any
Subsidiary which, individually or in the aggregate, has had or would reasonably
be expected to have a material adverse effect;
(8) except as set forth in Section 3.01(i)(8) of the Disclosure
Schedule, any transaction or commitment made, or any contract or agreement
entered into, by the Company or any Subsidiary relating to its assets or
business (including the acquisition or disposition of any assets) or any
relinquishment by the Company or any Subsidiary of any contract or other right,
in either case, material to the Company and its Subsidiaries taken as a whole,
other than transactions and commitments in the ordinary course of business
consistent with past practice and those contemplated by this Agreement;
(9) any change in any method of accounting or accounting practice by
the Company or any Subsidiary, except for any such change required by reason of
a concurrent change in GAAP;
(10) except as set forth in Section 3.01(i)(10) of the Disclosure
Schedule, any (i) grant of any severance or termination pay to any director,
officer or employee of the Company or any Subsidiary, (ii) entering into of any
employment, deferred compensation or similar agreement (or any amendment to any
such existing agreement) with any director, officer or employee of the Company
or any Subsidiary, other than, with respect to employees other than executive
officers only, in the ordinary course of business consistent with past practice,
(iii) increase in benefits payable under any existing severance or termination
pay policies or employment agreements or (iv) increase in compensation, bonus or
other benefits payable to directors, officers or employees of the Company or any
Subsidiary, other than, with respect to employees other than executive officers
only, in the ordinary course of business consistent with past practice, in each
case except as set forth in Section 3.01(i)(10) of the Disclosure Schedule;
(11) any labor dispute, other than routine individual grievances, or
any activity or proceeding by a labor union or representative thereof to
organize any employees of the Company or any Subsidiary, or any lockouts,
strikes, slowdowns, work stoppages or threats thereof by or with respect to such
employees; or
12
(12) any cancellation of any licenses, sublicenses, franchises,
permits or agreements to which the Company or any Subsidiary is a party, or any
notification to the Company or any Subsidiary that any party to any such
arrangements intends to cancel or not to renew such arrangements beyond its
expiration date as in effect on the date hereof, which cancellation or
notification, individually or in the aggregate, has had or reasonably could be
expected to have a material adverse effect.
(j) No Undisclosed Material Liabilities. There are no liabilities of
-----------------------------------
the Company or any Subsidiary of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, that could
reasonably be expected to have, individually or in the aggregate, a material
adverse effect, other than (i) liabilities reflected in the Company's financial
statements (together with the related notes thereto) filed with the Company's
annual report on Form 10-K for the year ended December 31, 1998, (ii)
liabilities incurred in the ordinary course of business consistent with past
practice since December 31, 1998, which in the aggregate would not have a
material adverse effect upon the Company and its Subsidiaries, taken as a whole;
(iii) liabilities under this Agreement or for professional fees and expenses in
connection with the transactions contemplated hereby; and (iv) as previously
disclosed and as set forth in Section 3.01(j) of the Disclosure Schedule.
(k) Compliance with Law; Litigation. The Company and its
-------------------------------
Subsidiaries hold all permits, licenses, variances, exemptions, authorizations,
orders and approvals of all Governmental Entities (the "Company Permits") that
are required for them to own, lease or operate their properties and assets and
to carry on their businesses as presently conducted, and there has occurred no
default under any such Company Permit, except for the lack of any Company Permit
or for defaults under any Company Permit which lack or default would not have,
individually or in the aggregate, a material adverse effect on the Company. The
conduct by the Company and its Subsidiaries of their respective businesses has
been in compliance with all Laws, with such exceptions as would not have,
individually or in the aggregate, a material adverse effect on the Company. As
of the date hereof, there is no claim, suit, action or proceeding pending or, to
the knowledge of the Company, threatened against the Company or any of its
Subsidiaries that could reasonably be expected, individually or in the
aggregate, to have a material adverse effect on the Company, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any Subsidiary that would have,
individually or in the aggregate, a material adverse effect on the Company.
(l) Taxes. (i) Each of the Company, its Subsidiaries and any
-----
affiliated, combined or unitary group of which any such corporation or other
entity is or was a member (A) have duly and timely filed, or have caused to be
filed on their behalf, all material tax returns, reports, declarations,
estimates, information returns and statements required to be filed by them
(collectively, "Tax Returns"), or requests for extensions to file such Tax
Returns have been timely filed and granted and have not expired, and as of the
time of filing, such Tax Returns are correct and complete in all material
respects; (B) have duly and timely paid in full (or the
13
Company has paid on its behalf) or made adequate provision in the Company's
accounting records for all material Taxes for all past and current periods for
which the Company or any of its Subsidiaries is liable; and (C) has complied in
all material respects with all applicable laws, rules and regulations relating
to the payment and withholding of Taxes and has in all material respects timely
withheld from employee wages and paid over to the proper governmental
authorities all amounts required to be so withheld and paid over. The most
recent financial statements contained in the Company SEC Documents reflect
adequate accruals for all Taxes payable by the Company and its Subsidiaries for
all taxable periods and portions thereof accrued through the date of such
financial statements. Section 3.01(l) of the Disclosure Schedule sets forth the
last taxable period through which the federal income tax returns of the Company
and any of its Subsidiaries have been examined by the Internal Revenue Service
or otherwise closed. All deficiencies asserted as a result of any such
examinations and any examination by any applicable state, local or foreign
taxing authority which have not been or will not be appealed or contested in a
timely manner have been paid, fully settled or adequately provided for in the
most recent financial statements contained in the Company SEC Documents. Except
as set forth in Section 3.01(l) of the Disclosure Schedule, no federal, state,
local or foreign tax audits or other administrative proceedings or court
proceedings are currently pending with regard to any federal, state, local or
foreign Taxes for which the Company or any of its Subsidiaries would be liable,
and no deficiencies for any such Taxes have been proposed, asserted or assessed
or, to the best knowledge of the Company, threatened against the Company or any
of its Subsidiaries pursuant to such examination of the Company or any of its
Subsidiaries by such federal, state, local or foreign taxing authority with
respect to any period. Except as set forth in Section 3.01(l) of the Disclosure
Schedule, no requests for waivers of the time to assess any Taxes against the
Company or any of its Subsidiaries have been granted or are pending, and neither
the Company nor any of its Subsidiaries has executed (or will execute prior to
the Effective Time) any closing agreement pursuant to Section 7121 of the Code,
or any predecessor provision thereof or any similar provision of state, local or
foreign income tax law that relates to the assets or operations of the Company
or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is a
party to any agreement providing for the allocation or sharing of liability for
any Taxes. The Company has made available to Acquisition complete and accurate
copies of all income and franchise Tax Returns and all other material Tax
Returns filed by or on behalf of the Company or any of its Subsidiaries for the
taxable years ending on or prior to December 31, 1997. Except as set forth in
Schedule 3.01(l) of the Disclosure Schedule, neither the Company nor any of its
Subsidiaries has made any payments subject to Section 280G of the Code, or is
obligated to make any such payments that will not be deductible under Section
280G of the Code, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that will not be deductible
under Section 280G of the Code. Neither the Company nor any of its Subsidiaries
has been a United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code. As used in this Agreement, the terms "Tax" and
"Taxes" include all federal, state, local or foreign income, franchise,
property, sales, use, ad valorem, payroll, social security, unemployment,
assets, value added, withholding, excise, severance, transfer, employment,
alternative or add-on minimum and other taxes, charges, fees, levies, licenses
or other
14
assessments, including without limitation obligations for withholding taxes from
payments due or made to any other person, together with any interest, penalties,
additions to tax or additional amounts imposed by any taxing authority.
(m) Pension and Benefit Plans; ERISA. Except as otherwise set forth
--------------------------------
in Section 3.01(m) of the Disclosure Schedule:
(1) Section 3.01(m)(1) of the Disclosure Schedule lists each
"employee benefit plan" (as such term is defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) maintained by the
Company or any Subsidiary or to which the Company or any Subsidiary contributes
or is required to contribute or in which any employee or former employee of the
Company or any Subsidiary participates or is otherwise covered (a "Company
Benefit Plan"). The only Company Benefit Plans that individually or
collectively would constitute an "employee pension benefit plan" as defined in
Section 3(2) of ERISA are identified as such in the list described above. The
Company and each Subsidiary have complied and currently are in compliance, both
as to form and operation in all material respects, with the applicable
provisions of ERISA and the Code, respectively, with respect to each Company
Benefit Plan.
(2) Each of the Company Benefit Plans that is intended to be
"qualified" within the meaning of Section 401(a) of the Code does so qualify and
is exempt from taxation pursuant to Section 501(a) of the Code where the failure
to so qualify would have a material adverse effect on the Company.
(3) Neither the Company nor any Subsidiary has maintained,
contributed to or been required to contribute to a "multiemployer plan" (as
defined in Section 3(37) of ERISA). No amount is due or owing from the Company
or any Subsidiary on account of a "multiemployer plan" (as defined in Section
3(37) of ERISA) or on account of any withdrawal therefrom.
(4) Other than normal claims for benefits, there is no claim pending
against the Company or any Subsidiary under the Code, ERISA or other applicable
law with respect to any of the Company Benefit Plans. Full payment has been
made, or will be made in accordance with Section 404(a)(6) of the Code, of all
amounts that are required to be paid under Section 412 of the Code and the terms
of each Company Benefit Plan that is intended to be qualified under Section
401(a) of the Code; and none of the Company Benefit Plans nor any trust
established thereunder has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA and Section 412 of the Code) whether or not
waived. The Company and the Subsidiaries have no current liability for plan
termination or withdrawal under Title IV of ERISA.
(5) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee or officer of the
Company or any Subsidiary to severance pay, unemployment compensation or any
other payment or (ii) accelerate the time of payment or vesting (except as
provided in Section 2.03), or increase the amount of compensation
15
due any such employee or officer except as disclosed in Section 3.01(m)(5) of
the Disclosure Schedule.
(6) The Company has provided (or made available to) Acquisition with
correct and complete copies of (i) written plans and summary plan descriptions
for each of the Company Benefit Plans; (ii) each trust agreement, insurance
policy or other instrument relating to the funding of each of the Company
Benefit Plans; (iii) the two most recent Annual Reports (Form 5500 series) and
accompanying schedules filed with the Internal Revenue Service or United States
Department of Labor with respect to each of the Company Benefit Plans and (iv)
the most recent audited financial statement for each of the Company Benefit
Plans.
(n) Environmental Matters. Except as set forth in Section 3.01(n) of
---------------------
the Disclosure Schedule, (i) the Company and its Subsidiaries operate their
assets, properties, businesses and operations in material compliance with all
applicable environmental laws, ordinances and regulations, (ii) neither the
Company nor any Subsidiary has knowledge of or has received written notice of
any claim, action, suit, proceeding, hearing or investigation, based on or
related to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling, or the emission, discharge, release or
threatened release into the environment, of any pollutant, contaminant, or
hazardous or toxic material or waste (collectively, an "Environmental Event")
relating to their assets, properties, businesses and operations and (iii) to the
knowledge of the Company, no notice of any Environmental Event was given to any
person or entity that occupied the offices of the Company and its Subsidiaries
prior to the date such offices were occupied or used in their business. Without
limiting the generality of the foregoing, to the knowledge of the Company,
neither the Company nor any Subsidiary has disposed of or placed on or in such
offices any waste materials, hazardous materials or hazardous substances in
violation of law.
(o) Intellectual Property. Except as set forth in Section 3.01(o) of
---------------------
the Disclosure Schedule, each of the Company and its Subsidiaries owns or has a
valid right to use each trademark, trade name, patent, service xxxx, brand xxxx,
brand name, computer program, database, industrial design and copyright
required, owned or used in connection with the operation of its businesses,
including any registrations thereof and pending applications therefor, and each
license or other contract relating thereto that is material to the conduct of
its businesses (collectively, the "Company Intellectual Property"), except where
the failure to own or have a right to use such property would not have,
individually or in the aggregate, a material adverse effect on the Company. All
material Company Intellectual Property (other than computer programs, databases
and commercially available software) is set forth in Section 3.01(o) of the
Disclosure Schedule. Except as set forth in Section 3.01(o) of the Disclosure
Schedule, the use of the Company Intellectual Property by the Company or its
Subsidiaries does not conflict with, infringe upon, violate or interfere with or
constitute an appropriation of any right, title, interest or goodwill, including
without limitation any trademark, trade name, patent, service xxxx, brand xxxx,
brand name, computer program, database, industrial design, copyright or any
pending application therefor of any other person, which in any case could result
in a material adverse
16
effect on the Company. Except as set forth in Section 3.01(o) of the Disclosure
Schedule, the Company's rights to the use of all Company Intellectual Property
will not be adversely affected by the transactions contemplated in this
Agreement. The Company has taken all reasonable precautions to prevent
disclosure of any confidential Company Intellectual Property.
(p) Real Properties.
---------------
(i) Except as otherwise disclosed in the Company SEC Documents,
Section 3.01(p)(i) of the Disclosure Schedule sets forth a list of all material
real property owned in fee by the Company or any of its Subsidiaries
(individually, an "Owned Property" and, collectively, the "Owned Properties").
To the best knowledge of the Company, the Company has good and marketable fee
title to each Owned Property, including the buildings, structures and other
improvements located thereon, in each case free and clear of all Liens, except
(i) Liens which, individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on the Company and (ii) Liens for
Taxes and other governmental charges which are not yet due and payable. There
are no condemnations or eminent domain (which term, as used herein, shall
include other compulsory acquisitions or takings by Governmental Entities)
proceedings pending or threatened against any Owned Property or any material
portion thereof. The Company has not received any notice from any city, village
or other Governmental Entity of any zoning, ordinance, land use, building, fire
or health code or other legal violation in respect of any Owned Property, other
than violations which have been corrected or which, individually or in the
aggregate, would not reasonably be expected to have a material adverse effect on
the Company.
(ii) Except as otherwise disclosed in the Company SEC Documents,
Section 3.01(p)(ii) of the Disclosure Schedule sets forth a list of all material
real property (including land and buildings) that is leased by the Company or
any of its Subsidiaries as lessee or sublessee (the "Leased Real Estate"). The
Company has delivered or caused to be delivered to Acquisition complete and
accurate copies of the written lease and subleases that are described in Section
3.01(p)(ii) of the Disclosure Schedule or otherwise disclosed in the Company SEC
Documents. There are no condemnations or eminent domain proceedings pending or
threatened against any Leased Real Estate or any material portion thereof. The
Company has not received any notice from any city, village or other Governmental
Entity of any zoning, ordinance, land use, building, fire or health code or
other legal violation in respect of any Leased Real Estate, other than
violations which have been corrected or which, individually or in the aggregate,
would not reasonably be expected to have a material adverse effect on the
Company.
(iii) The Owned Properties and the Leased Real Estate constitute, in
the aggregate, all of the material real property used to conduct the business of
the Company and its Subsidiaries in the manner in which such business was
conducted during the fiscal year ended December 31, 1998.
(q) Tangible Personal Property. The Company and its Subsidiaries
--------------------------
(A) have good and valid title to all the tangible personal property material to
the operation of the business
17
conducted by the Company and its Subsidiaries taken as a whole and reflected in
the latest audited financial statements included in the Company SEC Documents as
being owned by the Company and its Subsidiaries or acquired after the date
thereof (except properties sold or otherwise disposed of in the ordinary course
of business since the date thereof), free and clear of all Liens except (1)
statutory Liens securing payments not yet due and (2) such imperfections and
irregularities of title or Liens as do not affect the use of the properties or
assets subject thereto or affected thereby or otherwise materially impair
business operations at such properties, in either case in such a manner as to
have, individually or in the aggregate, a material adverse effect on the
Company, and (B) are collectively the lessee of all tangible personal property
material to the operation of the business conducted by the Company and its
Subsidiaries and reflected as leased in the latest audited financial statements
included in the Company SEC Documents (or on the books and records of the
Company as of the date thereof) or acquired after the date thereof (except for
leases that have expired by their terms) and are in possession of the properties
purported to be leased thereunder, and each such leases is valid and in full
force and effect without default thereunder by the lessee or the lessor, other
than defaults that would not, individually or in the aggregate, have a material
adverse effect on the Company. Each of the Company and its Subsidiaries enjoys
peaceful and undisturbed possession under all such leases. Such owned and leased
tangible personal property is in good working order, reasonable wear and tear
excepted, and is suitable for the use for which it is intended, except that,
which would not, individually or in the aggregate, have a material adverse
effect on the Company.
(r) Insurance. The Company and its Subsidiaries are covered by valid
---------
and currently effective insurance policies issued in favor of the Company or its
Subsidiaries that are customary for companies of similar size and financial
condition. Except as set forth in Section 3.01(r) of the Disclosure Schedule,
all such policies are in full force and effect, all premiums due thereon have
been paid and the Company has complied with the provisions of such policies.
All such policies will remain in full force and effect after giving effect to
this Agreement and the transactions contemplated hereby. Except as set forth in
Section 3.01(r) of the Disclosure Schedule, the Company has not been advised of
any defense to coverage in connection with any claim to coverage asserted or
noticed by the Company under or in connection with any of its extant insurance
policies. The Company has not received any written notice from or on behalf of
any insurance carrier issuing policies or binders relating to or covering the
Company and its Subsidiaries that there will be a cancellation or non-renewal of
existing policies or binders, or that alteration of any equipment or any
improvements to real estate occupied by or leased to or by the Company or its
Subsidiaries, purchase of additional equipment, or material modification of any
of the methods of doing business, will be required.
(s) Contracts. Except as set forth in Section 3.01(s) of the
---------
Disclosure Schedule, and except for matters that would not, individually or in
the aggregate, have a material adverse effect on the Company, (i) the Company
and any of its Subsidiaries are not party to or bound by any agreement that
materially limits the ability of the Company, the Surviving Corporation, or any
of their Subsidiaries to compete in any line of business in any geographic area;
(ii) neither the Company nor any of its Subsidiaries is (with or without the
lapse of time or the giving of
18
notice, or both) in breach or default in any material respect under any
agreement; (iii) to the best knowledge of the Company, none of the other parties
to any agreement is (with or without the lapse of time or the giving of notice,
or both) in breach or default in any material respect under any contract and
(iv) neither the Company nor any of its Subsidiaries has received any written
notice of the intention of any party to terminate any agreement whether as a
termination for convenience or for default of the Company or any of its
Subsidiaries thereunder.
(t) Labor Matters. Except as set forth in Section 3.01(t) of the
-------------
Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party
to, or is bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, nor is the
Company or any of its Subsidiaries currently the subject of a proceeding
asserting that it or any such Subsidiary has committed an unfair labor practice
(within the meaning of the National Labor Relations Act) or seeking to compel it
or such Subsidiaries to bargain with any labor organization as to wages and
conditions of employment. There is (i) no strike, labor dispute, slowdown or
stoppage pending or threatened against the Company or any of its Subsidiaries
and (iii) no union representation question existing with respect to the
employees of the Company or any of its Subsidiaries.
(u) Transactions with Affiliates. Except as set forth in the Company
----------------------------
SEC Documents or Section 3.01(u) of the Disclosure Schedule, neither the Company
nor any officer, director, employee or affiliate of the Company, any Subsidiary
or any individual related by blood, marriage or adoption to any such individual
or any entity in which any such person or individual owns any beneficial
interest, is a party to any agreement, contract, commitment, transaction or
understanding with or binding upon the Company or any of its Subsidiaries or any
of their respective assets or has any material interest in any material property
owned by the Company or its Subsidiaries or has engaged in any transaction with
any of the foregoing within the last twelve months.
(v) Year 2000. The Company has reviewed its operations and has
---------
inquired of third parties with which the Company and its Subsidiaries have a
material relationship to evaluate the extent to which the business or operations
of the Company and its Subsidiaries will be affected by the Year 2000 Problem.
As a result of such review and inquiries, the Company has no reason to believe,
and does not believe, the Year 2000 Problem will have a material adverse effect
on the Company and its Subsidiaries, taken as a whole, or result in any material
loss or interference with any of the business or operations of the Company and
its Subsidiaries, taken as a whole. The "Year 2000 Problem" as used herein
means any significant risk that computer hardware or software used in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of mechanical or
electrical systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1, 2000.
19
(w) Rights Agreement. Subject to the terms and conditions of this
----------------
Agreement, the Company has duly entered into an amendment to the First Amended
and Restated Rights Agreement dated as of May 26, 1998 (the "Rights Agreement")
between the Company and American Stock Transfer & Trust Company, as Rights
Agent, pursuant to which the Rights Agreement and the Rights will not be
applicable to the Merger, and the execution of this Agreement and the
consummation of the Merger shall not result in a "Distribution Date" under the
Rights Agreement and the consummation of the Merger shall not result in
Acquisition or its affiliates being an "Acquiring Person," result in the
occurrence of an event described in Section 11(a)(ii) or Section 13 of the
Rights Agreement or otherwise result in the ability of any person to exercise
any Purchase Rights under Rights Agreement or require the Purchase Rights to
separate from the shares of Company Common Stock to which they are attached. A
correct and complete copy of the Rights Agreement has been provided to
Acquisition.
(x) Opinion of Financial Advisor. The Board of Directors of the
----------------------------
Company has received the oral opinion of Xxxxxxx, Xxxxx & Co. (the "Financial
Advisor") to the effect that, as of such date, the Merger Consideration to be
received by the holders of Company Common Stock in the Merger is fair from a
financial point of view to such holders, and such opinion has not been withdrawn
or materially and adversely modified. The Financial Advisor has represented to
the Company that it will promptly deliver to the Company a written opinion
confirming in writing the oral opinion described above.
(y) Brokers. No broker, investment banker, financial advisor or
-------
other person, other than the Financial Advisor, the fees and expenses of which
will be paid by the Company, is entitled any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company. The Company's arrangements with the Financial Advisor have been
fully disclosed to Acquisition prior to the date hereof.
(z) Board Recommendation. As of the date hereof, the Board of
--------------------
Directors of the Company, at a meeting duly called and held, by the unanimous
vote of the directors present at such meeting, (i) determined that this
Agreement and the transactions contemplated hereby, including the Merger, are
advisable, fair to and in the best interests of the stockholders of the Company
and has approved the same and (ii) resolved to recommend, subject to their
fiduciary duties under applicable Law and Section 5.01, that the holders of
shares of Company Common Stock approve and adopt this Agreement.
(aa) Vote Required. The affirmative vote of the holders of a
-------------
majority of the outstanding shares of Company Common Stock is the only vote of
the holders of any class or series of the Company's capital stock necessary
(under applicable Law or otherwise) to approve this Agreement and the
transactions contemplated hereby.
(bb) State Takeover Statute Inapplicable. The Board of Directors of
-----------------------------------
the Company has approved this Agreement, the Merger and the transactions
contemplated hereby
20
and such approval, assuming the accuracy of Acquisition's representation in
Section 3.02(f) hereof, is sufficient to render the provisions of Section 203 of
the DGCL inapplicable to the Merger, this Agreement and the transactions
contemplated hereby.
(cc) Stock Plans. All of the outstanding Company Stock Options shall
-----------
have vested pursuant to their terms at the Effective Time and shall not be
exercisable after the Effective Time.
Section 3.02. Representations and Warranties of Acquisition.
Acquisition represents and warrants as of the date hereof (or such other date as
shall be expressly specified) to the Company as follows:
(a) Organization, Qualifications and Corporate Power. Acquisition is
------------------------------------------------
a corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and is duly licensed or qualified to do business
as a foreign corporation and is in good standing in each other jurisdiction in
which the nature of its business or the ownership or leasing of its properties
makes such licensing or qualification necessary and where the failure to so
qualify would in the aggregate have a material adverse effect. Acquisition has
the corporate power and authority to own and hold its properties and to carry on
its business as currently conducted.
(b) Capital Structure. As of the date of this Agreement, the
-----------------
authorized capital stock of Acquisition consists of 1,000 shares of Acquistion
Common Stock, 1,000 shares of which have been validly issued and are fully paid,
nonassessable and owned of record and beneficially by WCAS VIII or its
affiliates. Immediately prior to the Closing, the authorized capital stock of
Acquisition will consist of (i) 30,000,000 shares of Acquisition Common Stock,
(ii) 1,000,000 shares of Acquisition Class A Common Stock, and (iii) 1,000,000
shares of preferred stock, par value $.01 per share ("Acquisition Preferred
Stock"). No shares of Acquisition Class A Common Stock or Acquisition Preferred
Stock are issued and outstanding.
(c) Authorization of Agreement, Non-Contravention, Etc. Acquisition
--------------------------------------------------
has all requisite corporate power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate and stockholder action on
the part of Acquisition. This Agreement has been duly executed and delivered by
Acquisition and constitutes a valid and binding obligation of Acquisition,
enforceable against Acquisition in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law). The execution and delivery of
this Agreement does not, and the consummation of the transactions contemplated
hereby will not, conflict with, or result in any breach or violation of, or
result in the termination of, or accelerate the performance required by, or give
right to a right of termination, cancellation
21
or acceleration of any obligation under, or the creation of a Lien pursuant to
(i) any provision of the charter (or similar organizational documents) or bylaws
of Acquisition or (ii) subject to obtaining or making the Required Filings, any
loan or credit agreement, note, mortgage, indenture, lease or other agreement,
obligation, instrument, permit, concession, franchise, license, or any Laws
applicable to Acquisition or its properties or assets, in any case under this
clause (ii) which would, individually or in the aggregate, have a material
adverse effect on Acquisition. No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Entity is required
by or with respect to Acquisition in connection with the execution and delivery
of this Agreement by Acquisition or the consummation by Acquisition of the
transactions contemplated hereby, the failure of which to be obtained or made
would, individually or in the aggregate, have a material adverse effect on
Acquisition or would prevent or materially delay the consummation of the
transactions contemplated hereby, except for the Required Filings.
(d) Information Supplied. The information supplied or to be supplied
--------------------
by Acquisition for inclusion or incorporation by reference in any Company
Disclosure Document will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading (i) in the case of the Proxy Statement, at the
date the Proxy Statement is first mailed to the stockholders of the Company or
at the time of the Company Stockholder Meeting, or (ii) in the case of any
Company Disclosure Document other than the Proxy Statement, at the time of the
filing of such Company Disclosure Document and at the time of any distribution
thereof. The representations and warranties contained in this Section 3.02(d)
do not apply to statements or omissions included or incorporated by reference in
the Company Disclosure Documents based upon information supplied to Acquisition
by the Company specifically in writing for inclusion or incorporation by
reference therein. Any document required to be filed by Acquisition or its
affiliates with any Governmental Entity other than the SEC will comply in all
material respects with the provisions of applicable law as to the information
required to be contained therein.
(e) Subsidiaries. Acquisition does not own, directly or indirectly,
------------
any capital stock or other ownership interest in any person.
(f) Acquisition Not an Interested Stockholder. As of the date of
-----------------------------------------
this Agreement, neither Acquisition, Convergent Equity Partners L.P. nor any of
their respective affiliates or associates (as such terms are defined under the
Exchange Act) is an "interested stockholder" as such term is defined in Section
203 of the DGCL.
(g) Interim Operations of Acquisition. Acquisition was formed on
---------------------------------
March 8, 1999 solely for the purpose of engaging in the transaction contemplated
hereby, has engaged in no other business activities and has conducted its
operations only as contemplated hereby. Except for (i) obligations or
liabilities incurred in connection with its incorporation or organization and
the transactions contemplated hereby and (ii) this Agreement and any other
agreements or
22
arrangements contemplated by this Agreement or in furtherance of the
transactions contemplated hereby, Acquisition has not incurred, directly or
indirectly, any obligations or liabilities or engaged in any business activities
of any type or kind whatsoever or entered into any agreements or arrangements
with any person.
(h) Brokers. No broker, investment banker, financial advisor or
-------
other person, other than Chase Securities Inc., and except as contemplated by
the Commitment Letters (as defined in Section 3.02(i)), the fees and expenses of
which in each case will be paid by Acquisition or, if the Merger is consummated,
the Surviving Corporation, is entitled any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Acquisition.
(i) Financing. Acquisition (or WCAS VIII in the case of clause (i)
---------
below) has received and executed commitment letters, each dated as of the date
hereof (the "Commitment Letters"), from (i) Chase Securities Inc. and Chase Bank
of Texas, N.A. (collectively, "Chase"), pursuant to which Chase has committed,
subject to the terms and conditions set forth therein, to provide the Surviving
Corporation with up to $120.0 million of financing under available senior
secured credit facilities; (ii) WCAS VIII and Convergent Equity Partners L.P.,
pursuant to which such entities have committed, subject to the terms and
conditions set forth therein, to provide to Acquisition up to $145.0 million in
equity; and (iii) WCAS Capital Partners III, L.P. or an affiliate thereof,
pursuant to which it has committed to provide up to $160.0 million of senior
subordinated financing (the financings referred to in clauses (i), (ii) and
(iii) above being collectively referred to as the "Financing"). Such Financing
is adequate to pay in full in cash at closing the Merger Consideration, together
with all fees and expenses of Acquisition and the Surviving Corporation
associated with the transactions contemplated hereby, and to make any other
payments necessary to consummate the transactions contemplated hereby. True and
complete copies of the Commitment Letters have been furnished to the Company.
WCAS VIII or Acquisition has fully paid any and all commitment fees or other
fees required by such Commitment Letters to be paid as of the date hereof (and
will duly pay any such fees after the date hereof); provided that, if the Merger
--------
is consummated, the Surviving Corporation will reimburse WCAS VIII for such
commitment fees or other fees required by such Commitment Letters. The
Commitment Letters are valid and in full force and effect and no event has
occurred which (with or without notice, lapse of time or both) would constitute
a default thereunder on the part of Acquisition, WCAS VIII, Convergent Equity
Partners L.P. or their respective affiliates or would adversely affect the
probability that such Financing will actually be funded.
23
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.01. Covenants of the Company. During the period from the
date of this Agreement until the Effective Time, the Company agrees as to itself
and its Subsidiaries that (expressly as expressly contemplated, required or
permitted by this Agreement or as set forth in the Disclosure Schedule):
(a) Ordinary Course. The Company and its Subsidiaries shall carry on
---------------
their respective businesses only in the ordinary course consistent with past
practice in all material respects and use their best efforts to preserve intact
their present businesses, maintain their rights and licenses, keep available the
services of their current officers and employees and preserve their
relationships with customers, suppliers and others having business dealings with
them. The Company shall not, nor shall it permit any of its Subsidiaries to,
enter into any new line of business, or incur or commit to any capital
expenditures, other than capital expenditures and obligations or liabilities
incurred or committed to that are either (i) contemplated in the Company's
current capital budget, a copy of which has been furnished to Acquisition prior
to the date hereof (the "Capital Budget"), or (ii) not in excess of $5,000,000
individually or in the aggregate.
(b) Dividends; Change in Stock. The Company shall not, nor shall it
--------------------------
permit any of its Subsidiaries to, nor shall it propose to (i) declare, set
aside or pay any dividends on or make other distributions in respect of any
capital stock (except for cash dividends paid to the Company and its wholly-
owned Subsidiaries with regard to the Company's Subsidiaries' capital stock),
(ii) adjust, split, combine or reclassify any capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for capital stock or (iii) repurchase, redeem or otherwise
acquire, or permit any Subsidiary to purchase or otherwise acquire, any shares
of capital stock or any debt securities, warrants or options, in each case
issued by the Company or any of its Subsidiaries.
(c) Issuance of Securities. The Company shall not, nor shall it
----------------------
permit any of its Subsidiaries to, (i) issue, deliver or sell, or authorize or
propose the issuance, delivery or sale of, any shares of its or any of its
Subsidiaries' capital stock of any class or any securities convertible into or
exchange for, or any rights, warrants or options to acquire, any of the
foregoing, or any other securities or equity equivalents (including stock
appreciation rights), except for (x) shares issuable upon the exercise of
Company Stock Options outstanding as of the date hereof and (y) issuances of
capital stock of the Subsidiaries to the Company or to a wholly owned Subsidiary
of the Company; (ii) amend the terms of or reprice any Company Stock Option
outstanding on the date of this Agreement or amend the terms of any Stock Option
Plan in effect as of the date hereof.
24
(d) Governing Documents. The Company shall not, nor shall it permit
-------------------
any of its Subsidiaries to, amend or propose to amend its certificate of
incorporation or bylaws (or other organizational documents).
(e) No Acquisitions. Except as set forth in Section 4.01(e) of the
---------------
Disclosure Schedule, the Company shall not, nor shall it permit any of its
Subsidiaries to, (i) merge or consolidate with, or acquire any equity interest
in, or enter into an agreement with respect to the foregoing, except for (A) a
merger of a wholly-owned Subsidiary with or into the Company or another wholly-
owned Subsidiary or (B) the creation of a wholly-owned Subsidiary of the Company
in the ordinary course of business; or (ii) acquire or agree to acquire a
substantial portion of the assets of, any corporation, partnership, association
or other business organization or any division or business thereof.
(f) No Dispositions. The Company shall not, nor shall it permit any
---------------
of its Subsidiaries to, sell, lease, mortgage, encumber or otherwise dispose of,
any material assets (including, without limitation, capital stock or other
ownership interest in any Subsidiary), other than sales or leases in the
ordinary course of business consistent with past practice.
(g) Indebtedness. The Company shall not, nor shall it permit any of
------------
its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money
(except for lease obligations incurred in the ordinary course of business and
consistent with past practice or drawdowns by the Company under its existing
revolving credit facility or uncommitted lines of credit, if any, made in the
ordinary course of business consistent with past practice or as contemplated by
the Capital Budget), (ii) issue or sell any debt securities or warrants or
rights to acquire any debt securities or (iii) guarantee any debt obligations of
any other person.
(h) Accounting Matters. The Company shall not, nor shall it permit
------------------
any of its Subsidiaries to, change its fiscal year or make any material changes
with respect to its accounting methods, principles or practices in effect as of
December 31, 1998, except as required by the SEC, applicable Law or GAAP.
(i) Advice of Changes; Filings. The Company shall advise Acquisition
--------------------------
of any change or event that would cause or constitute a material breach of any
of its representations or warranties contained herein The Company shall file
all reports required to be filed by it with the SEC or NYSE between the date of
this Agreement and the Effective Time and shall deliver to Acquisition copies of
all such reports promptly after the same are filed. Any such report shall not
contain, as of the date of its filing, any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(j) Compensation; Benefit Plans. The Company shall not, nor shall it
---------------------------
permit any of its Subsidiaries to, (i) enter into, adopt, amend or terminate any
Company Benefit Plan, any other employee benefit plan, any existing employment,
severance or termination agreement with
25
any director, officer or employee, except as may be required by applicable Law,
or (ii) increase in any manner the compensation (including, without limitation,
salary, bonus or other benefits) of any of its directors, officers or employees
or provide any other benefit not required by any plan and arrangement as in
effect as of the date hereof, except for increases made, with respect to
employees other than executive officers, in the ordinary course of business and
consistent with past practice.
(k) Discharges or Waiver of Claims. The Company shall not, nor shall
------------------------------
it permit any of its Subsidiaries to, (i) pay, discharge, or satisfy any claims
(including claims of stockholders), liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), except for the
payment, discharge or satisfaction of liabilities or obligations in the ordinary
course of business consistent with past practice; (ii) waive, release, grant or
transfer any rights of material value or modify or change in any material
respect rights of material value (including, without limitation, the waiver or
release of any rights under confidentiality or standstill agreements), or (iii)
settle or compromise any litigation (whether or not commenced prior to the date
of this Agreement), other than settlements or compromises of litigation where
the amount paid (after giving effect to insurance proceeds actually received) in
settlement or compromise does not exceed $3,500,000, provided that the aggregate
amount paid in connection with the settlement or compromise of all such
litigation matters shall not exceed $10,000,000.
(l) Leases and Lease Commitments. The Company shall not, nor shall
----------------------------
it permit any of its Subsidiaries to, enter into or commit to enter into, or
assume, any operating or capital lease, other than any such lease contemplated
by the Capital Budget or the Company's operating budget, a copy of which has
been provided to Acquisition prior to the date hereof.
(m) Liquidation Plan, Etc. Except as set forth in Section 4.01(m) of
---------------------
the Disclosure Schedule, the Company shall not, nor shall it permit any of its
Subsidiaries to, authorize, recommend, propose or announce an intention to adopt
a plan of complete or partial liquidation or dissolution.
(n) Collective Bargaining Agreements. The Company shall not, nor
--------------------------------
shall it permit any of its Subsidiaries to, enter into any collective bargaining
agreement, contract or other agreement or understanding with a labor union or
labor organization, except as may be required by applicable law.
(o) Transactions with Affiliates. The Company shall not, nor shall
----------------------------
it permit any of its Subsidiaries to, enter into any agreement, contract,
commitment, transaction or understanding with any officer, director, employee or
affiliate of the Company, any Subsidiary or any individual related by blood,
marriage or adoption to any such individual or any entity in which any such
person or individual owns any beneficial interest that would be required to be
disclosed under Item 404 of Regulation S-K under the Exchange Act.
26
(p) Tax Matters. The Company shall not, nor shall it permit any of
-----------
its Subsidiaries to, make any material Tax election, take any Tax position or
amend in a material respect any Tax Return, except in the ordinary course of
business consistent with past practice.
(q) Intellectual Property. The Company shall not, nor shall it
---------------------
permit any of its Subsidiaries to, enter into any license with respect to
Company Intellectual Property unless such license is non-exclusive and entered
into in the ordinary course consistent with past practice.
(r) Insurance. The Company shall not, nor shall it permit any of its
---------
Subsidiaries to, fail to keep in full force and effect insurance comparable in
amount and scope of coverage to insurance now carried by it.
(s) Other Actions. The Company shall not, nor shall it permit any of
-------------
its Subsidiaries to, agree to take, make any commitment (whether orally or in
writing) to take or take (i) any action that would result in any of the
representations and warranties of the Company set forth in this Agreement that
are qualified as to materiality being untrue, any of such representations and
warranties that are not so qualified being untrue in any material respect or any
of the conditions to the Merger set forth in Article VI not being satisfied, in
each case as of any time prior to the Effective Time, or (ii) any action
prohibited by this Agreement. The Company shall not, nor shall it permit any of
its Subsidiaries to, fail to take any action necessary to prevent any such
representation or warranty from being inaccurate (in the case of representations
and warranties that are qualified as to materiality) or inaccurate in any
material respect (in the case of representations and warranties that are not so
qualified) as of any time prior to the Effective Time.
Section 4.02. Covenants of Acquisition. During the period from the
date of this Agreement until the Effective Time, Acquisition agrees that:
(a) Other Actions. Acquisition shall not agree to take, make any
-------------
commitment (whether orally or in writing) to take or take (i) any action that
would result in any of its representations and warranties set forth in this
Agreement that are qualified as to materiality being untrue, any of such
representations and warranties that are not so qualified being untrue in any
material respect or any of the conditions to the Merger set forth in Article VI
not being satisfied, in each case as of any time prior to the Effective Time, or
(ii) any action prohibited by this Agreement. Acquisition shall not fail to
take any action necessary to prevent any such representations or warranty from
being inaccurate (in the case of representations and warranties that are
qualified as to materiality) or inaccurate in any material respect (in the case
of representations and warranties that are not so qualified) as of any time
prior to the Effective Time.
(b) Advice of Changes. Acquisition shall advise the Company of any
-----------------
change or event that would cause or constitute a material breach of any of its
representations or warranties contained herein or which it believes will result
in any of the debt or equity financing necessary
27
for the consummation of the Merger and the other transactions contemplated
hereby not being available to it on terms no less favorable than those set forth
in the Commitment Letters.
ARTICLE V
OTHER AGREEMENTS
Section 5.01. No Solicitation. (a) The Company shall not, nor shall
it permit any of its Subsidiaries to, nor shall it authorize or permit any
officer, director or employee of, or any investment banker, attorney or other
advisor or representative of, the Company or any of its Subsidiaries
(collectively, "Company Representatives") to, directly or indirectly, (i)
solicit, initiate, encourage or knowingly facilitate the submission of any
Acquisition Proposal (as defined in Section 5.01(d)) or (ii) enter into or
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, any Acquisition Proposal; provided,
--------
however, that notwithstanding any other provision of this Agreement, (A) the
-------
Company's Board of Directors may take and disclose to the stockholders of the
Company a position contemplated by Rules 14d-9 and 14e-2(a) promulgated under
the Exchange Act and (B) following receipt from a third party, without any
solicitation, initiation or encouragement, directly or indirectly, by the
Company or any Company Representative, of a bona fide Acquisition Proposal, (w)
the Company may engage in discussions or negotiations with such third party and
may furnish such third party information concerning it, and its business,
properties and assets if such third party executes a confidentiality agreement
no less favorable to the Company than the existing confidentiality agreement
between the Company and WCAS VIII (the "Confidentiality Agreement") (except that
such third party confidentiality agreement need not require approval or request
of the Company's Board of Directors prior to the making of an offer or proposal
to such Board of Directors), (x) the Board of Directors of the Company may
withdraw, modify or not make its recommendation referred to in Section 3.01(z),
(y) terminate this Agreement in accordance with Article VII or (z) take any
combination of the actions described in clauses (w), (x) and (y) above, but in
each case referred to in clauses (A) and (B) only to the extent that the
Company's Board of Directors shall conclude in good faith, after consultation
with the Company's outside counsel, that such action is required in order for
the Company's Board of Directors to act in a manner consistent with its
fiduciary duties under applicable Law.
(b) The Company will immediately cease and cause to be terminated any
existing activities, discussions and negotiations conducted heretofore with
respect to an Acquisition Proposal.
(c) The Company will promptly advise Acquisition orally and in
writing of any Acquisition Proposal, the material terms and conditions of such
Acquisition Proposal and the identity of the person making any such Acquisition
Proposal and any determination by the Board of Directors of the Company pursuant
to the last proviso of Section 5.01(a) with respect to an Acquisition Proposal.
The Company will keep Acquisition informed, as promptly as reasonably
practicable, as to the status of any actions, including any discussions, taken
pursuant to such Acquisition Proposal.
28
(d) As used in this Agreement, "Acquisition Proposal" means any
inquiry, proposal or offer from any person relating to (i) any direct or
indirect acquisition or purchase of assets or a business that constitutes 20% or
more of the net revenues, net income or assets of the Company and its
Subsidiaries, taken as a whole, or 20% or more of the outstanding Company Common
Stock, (ii) any tender offer or exchange offer (including by the Company or any
of its Subsidiaries) that if consummated would result in any person beneficially
owning 20% or more of the outstanding Company Common Stock, or (iii) any merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving the Company or any of its Subsidiaries, other
than the transactions contemplated by this Agreement.
Section 5.02. Recapitalization. Each of the Company and Acquisition
shall use all reasonable best efforts to cause the transactions contemplated by
this Agreement, including the Merger, to be accounted for as a recapitalization
and such accounting treatment to be accepted by their respective accountants and
the SEC, and neither the Company nor Acquisition shall take any action that
would be reasonably likely to cause such accounting treatment not to be
obtained. In the event that Acquisition reasonably determines that it will not
be permitted to account for the transactions contemplated by this Agreement as a
recapitalization, the parties shall take all commercially reasonable actions to
amend this Agreement to cause the transactions contemplated hereby to be
accounted for as a recapitalization; provided that no such amendment may be
implemented if such amendment would reasonably be expected to (i) cause the
consideration to be received by the holders of Company Common Stock or options
under the Company Stock Plans to be less than the consideration that such
holders would have been entitled to receive under the Original Merger Agreement,
or (ii) result in the parties hereto being unable, after using reasonable best
efforts, to cause a Closing to occur on or prior to the date set forth in
Section 7.01(b)(iii).
Section 5.03. Preparation of the Proxy Statement. As promptly as
practicable following the date of this Agreement, the Company shall prepare and
file with the SEC the Proxy Statement. Acquisition will cooperate with the
Company in connection with preparation of the Proxy Statement, including
furnishing to the Company all information regarding Acquisition and its
affiliates as may be required to be disclosed therein. The Company shall use
its best efforts to cause a definitive Proxy Statement to be distributed to its
stockholders as promptly as practicable thereafter. No filing of, or amendment
or supplement to, the Proxy Statement will be made by the Company without
providing Acquisition the opportunity to review and comment thereon and to
approve the same, provided that such approvals shall not be unreasonably
withheld or delayed. The Company will advise Acquisition, promptly after it
receives notice thereof, of any request by the SEC for amendment of the Proxy
Statement or comments thereon and responses thereto or requests by the SEC for
additional information. The Company and Acquisition agree to notify the other
party and to correct any information provided by it that shall have become false
or misleading and an appropriate amendment or supplement describing such
information shall be promptly filed with the SEC and, to the extent required by
law, disseminated to the stockholders of the Company.
29
Section 5.04. Company Stockholder Meeting. As promptly as
practicable after the date hereof, the Company shall, subject to its fiduciary
duties and Section 5.01, take all action necessary in accordance with all
applicable laws and its Certificate of Incorporation and By-laws, to duly call,
give notice of, convene and hold the Company Stockholder Meeting to consider and
vote upon the approval and adoption of this Agreement and the Merger and for
such other purposes as may be necessary or desirable. The Board of Directors of
the Company has determined that the Merger is advisable and in the best
interests of the stockholders of the Company and shall, subject to its fiduciary
duties and Section 5.01, recommend that the stockholders of the Company vote to
approve and adopt this Agreement and the Merger and any other matters to be
submitted to stockholders in connection therewith.
Section 5.05. Access to Information. Upon reasonable notice, the
Company shall, and shall cause its Subsidiaries and its and their respective
officers, directors, employees, representatives and agents to afford access to
the officers, employees, accountants, counsel and other representatives of
Acquisition (including financing sources and their employees, accountants,
counsel and other representatives), during normal business hours during the
period prior to the Effective Time, to all of the Company's and its
Subsidiaries' properties, books, leases, contracts, commitments, officers,
employees, accountants, counsel, other representatives and records. Acquisition
will, and will cause its advisors and representatives who receive nonpublic
information regarding the Company to agree to, hold any such information in
confidence to the extent required by, and in accordance with, the terms of the
Confidentiality Agreement.
Section 5.06. Reasonable Best Efforts. (a) Subject to the terms and
conditions herein provided, each of the Company and Acquisition shall, and shall
cause its Subsidiaries to, use all reasonable best efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate or make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including (i) the formation of subsidiaries and all other actions
necessary or advisable to consummate the Financing, (ii) the obtaining of any
necessary consent, authorization, order or approval of, or any exemption by, any
Governmental Entity and/or any public or private third party which is required
to be obtained by such party or any of its subsidiaries in connection with the
Merger and the other transactions contemplated by this Agreement, and the making
or obtaining of all necessary filing and registrations with respect thereto
(including without limitation filings required under the HSR Act), (iii) the
defending of any lawsuits or other legal proceedings challenging this Agreement
and (iv) the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the purposes
of, this Agreement.
(b) Acquisition shall not, and shall cause WCAS VIII and their
affiliates not to, terminate, amend or modify in any respect the Commitment
Letters in a manner that could reasonably be expected to adversely affect the
probability that such Financing will actually be funded, or the timing thereof,
without prior written consent of the Company.
30
(c) The Company agrees to, and to cause its Subsidiaries and its and
their respective officers, directors, employees, advisors and accountants to,
reasonably cooperate with Acquisition in connection with the arrangement of any
financing to be consummated prior to or contemporaneously with the closing in
respect of the transactions contemplated by this Agreement, as may be reasonably
requested by Acquisition.
Section 5.07. Indemnification and Insurance. (a) Acquisition agrees
that all rights to indemnification now existing in favor of any officers,
directors, employees or agents of the Company or any of its Subsidiaries as
provided in their respective charters or bylaws (or similar organizational
documents) and any existing indemnification agreements or arrangements of the
Company or its Subsidiaries shall survive the Merger and shall continue in full
force and effect for a period of not less than six years from the Effective Time
(or such longer period as may be provided in any existing indemnification
agreement between the Company and any current or former officer or director
thereof); provided that, in the event any claim or claims are asserted or made
--------
within such six-year period, all rights to indemnification in respect of any
such claim or claims shall continue until final disposition of any and all such
claims.
(b) The Company shall, and from and after the Effective Time, the
Surviving Corporation shall, for a period of six years after the Effective Time,
indemnify, defend and hold harmless each 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, an officer, director, employee or agent of the Company or any of its
Subsidiaries (collectively, the "Indemnified Parties") against all losses,
expenses (including attorneys' fees), claims, damages, liabilities or amounts
that are paid in settlement with the approval of the indemnifying party (which
approval shall not be unreasonably withheld) of, or otherwise in connection
with, any threatened or actual claim, action, suit, proceeding or investigation
(a "Claim"), based in whole or in part on or arising in whole or in part out of
the fact that the Indemnified Party (or the person controlled by the Indemnified
Party) is or was a director, officer, employee or agent (including, without
limitation, a trustee or fiduciary of any Company Benefit Plan) of the Company
or any of its Subsidiaries and pertaining to any matter existing or arising out
of actions or omissions occurring at or prior to the Effective Time (including,
without limitation, any Claim arising out of this Agreement or any of the
transactions contemplated hereby), whether asserted or claimed prior to, at or
after the Effective Time, in each case to the fullest extent permitted under
Delaware law, and shall pay any expenses, as incurred, in advance of the final
disposition of any such action or proceeding to each Indemnified Part to the
fullest extent permitted under Delaware law. In determining whether an
Indemnified Party is entitled to indemnification under this Section 5.07, if
requested by such Indemnified Party, such determination shall be made by
special, independent counsel selected by the Surviving Corporation and approved
by the Indemnified Party (which approval shall not be unreasonably withheld),
and who has not otherwise performed services for the Surviving Corporation or
its affiliates within the last three years (other than in connection with such
matters). Without limiting the foregoing, in the event any such claim, action,
suit, proceeding or investigation is brought against any Indemnified Parties
(whether arising before or after the Effective Time), (i) the Indemnified
Parties may retain the Company's regularly engaged independent legal counsel
31
or counsel satisfactory to them and reasonably satisfactory to the Company (or
satisfactory to them and reasonably satisfactory to the Surviving Corporation
after the Effective Time), and the Company (or after the Effective Time, the
Surviving Corporation) shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties as promptly as statements therefor are
received; and (ii) the Company (or after the Effective Time, the Surviving
Corporation) will use all reasonable efforts to assist in the vigorous defense
of any such matter, provided that neither the Company nor the Surviving
Corporation shall be liable for any settlement effected without its prior
written consent, which consent shall not unreasonably be withheld. In the event
of any Claim, any Indemnified Party wishing to claim indemnification will
promptly notify the Company (or after the Effective Time, the Surviving
Corporation) thereof (provided that failure to so notify the Surviving
Corporation will not affect the obligations of the Surviving Corporation except
to the extent that the Surviving Corporation shall have been prejudiced as a
result of such failure) and shall deliver to the Company (or after the Effective
Time, the Surviving Corporation) the undertaking contemplated by Section 145(e)
of the DGCL, but without any requirement for the posting of a bond. Without
limiting the foregoing, in the event any such Claim is brought against any of
the Indemnified Parties, such Indemnified Parties may retain only one law firm
(plus one local counsel, if necessary) to represent them with respect to each
such matter unless the use of counsel chosen to represent the Indemnified
Parties would present such counsel with a conflict of interest, or the
representation of all of the Indemnified Parties by the same counsel would be
inappropriate due to actual or potential differing interests between them, in
which case such additional counsel as may be required (as shall be reasonably
determined by the Indemnified Parties and the Company or the Surviving
Corporation, as the case may be) may be retained by the Indemnified Parties at
the cost and expense of the Company (or the Surviving Corporation) and the
Company (or the Surviving Corporation) shall pay all reasonable fees and
expenses of such counsel for such Indemnified Parties. The Company (or the
Surviving Corporation shall use all reasonable efforts to assist in the vigorous
defense of any such Claim, provided that the Company (or the Surviving
Corporation) shall not be liable for any settlement effected without its written
consent, which consent, however, shall not be unreasonably withheld.
Notwithstanding the foregoing, nothing contained in this Section 5.07 shall be
deemed to grant any right to any Indemnified Party which is not permitted to be
granted to an officer, director, employee or agent of the Company under Delaware
law, assuming for such purposes that the Company's certificate of incorporation
and bylaws provide for the maximum indemnification permitted by law.
(c) Acquisition agrees that the Company and, from and after the
Effective Time, the Surviving Corporation shall cause to be maintained in effect
for not less than six years from the Effective Time the current policies of the
directors' and officers' liability insurance maintained by the Company; provided
that (i) the Surviving Corporation may substitute therefor policies of at least
the same coverage containing terms and conditions which are no less
advantageous; (ii) such substitution shall not result in any gaps or lapses in
coverage with respect to matters occurring prior to the Effective Time; and
(iii) the Surviving Corporation shall not be required to pay an annual premium
in excess of 200% of the last annual premium paid by the Company prior to the
date hereof and if the Surviving Corporation is unable to obtain the
32
insurance required by this Section 5.07(c) it shall obtain as much comparable
insurance as possible for an annual premium equal to such maximum amount.
(d) Following the Merger, if the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all of
its properties and assets to any person or persons, then, and in each such case,
proper provision shall be made so that the successors and assigns of the
Surviving Corporation, and any of their successors and assigns, assume the
obligations of the parties hereto and the Surviving Corporation set forth in
this Section 5.07.
(e) This Section 5.07 shall survive the consummation of the Merger at
the Effective Time, is intended to benefit the Company, the Surviving
Corporation and the Indemnified Parties (each of whom may enforce the provisions
of this Section 5.07) and shall be binding on the successors and assigns of the
Surviving Corporation.
Section 5.08. Benefits Matters. (a) Acquisition agrees that the
Company will honor and, from and after the Effective Time, the Surviving
Corporation and its Subsidiaries will honor all obligations under employment
agreements, Company Benefit Plans and all other employee benefit plans,
programs, policies and arrangements of the Company and its Subsidiaries in
accordance with the terms thereof.
(b) Acquisition agrees that the Surviving Corporation will take such
actions as are necessary so that, for a period of at least one year from the
Effective Time, employees of the Company and its Subsidiaries will be provided
cash compensation, employee benefit and incentive compensation and similar plans
and programs (other than equity-based compensation plans and programs) as will
provide compensation and benefits which in the aggregate are no less favorable
than those provided to such employees as of the date hereof.
(c) To the extent permitted under applicable Law, each employee of
the Company or its Subsidiaries shall be given credit for all service with the
Company or its Subsidiaries (or service credited by the Company or its
Subsidiaries) under all employee benefit plans, programs, policies and
arrangements maintained by the Surviving Corporation in which they participate
or in which they become participants for purposes of eligibility, vesting and
benefit accrual including, without limitation, for purposes of determining (1)
short-term and long-term disability benefits, (2) severance benefits, (3)
vacation benefits and (4) benefits under any retirement plan.
(d) This Section 5.08, which shall survive the consummation of the
Merger at the Effective Time and shall continue without limit except as
expressly set forth herein, is intended to benefit and bind the Company, the
Surviving Corporation and any person referenced in this Section 5.08, each of
whom may enforce the provisions of this Section 5.08 whether or not party to
this Agreement. Except as provided in clause (a) above, nothing contained in
this Section 5.08 shall create any beneficiary rights in any employee or former
employee (including any dependent
33
thereof) of the Company, any of its Subsidiaries or the Surviving Corporation in
respect of continued employment for any specified period of any nature or kind
whatsoever. In addition, nothing in this Section 5.08 shall be construed to
limit the ability of the Surviving Corporation or any of its Subsidiaries to
review Company Benefit Plans and all other employee benefit plans, programs,
policies and arrangements from time to time and make such changes as it or they
deem appropriate.
Section 5.09. Resignations of Directors. Prior to the Effective
Time, the Company shall deliver to Acquisition evidence satisfactory to
Acquisition of the resignation of all directors of the Company, effective at the
Effective Time.
Section 5.10. Solvency at Closing. Acquisition agrees for the
benefit of the directors of the Company to take all actions necessary to ensure
that, immediately following the Effective Time, the Surviving Corporation will
be solvent for all purposes under federal bankruptcy and applicable state
fraudulent transfer and fraudulent conveyance laws.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of the parties to effect the Merger shall be
subject to the satisfaction or waiver at or prior to the Effective Time of the
following conditions:
(a) Company Stockholder Approval. The Company Stockholder Approval
----------------------------
shall have been obtained.
(b) HSR Act and Other Approvals. Any waiting period applicable to
---------------------------
the Merger under the HSR Act shall have expired or been terminated and the
approvals listed in Section 3.01(c) of the Disclosure Schedule shall have been
obtained.
(c) No Injunctions or Restraints; Illegality. No temporary
----------------------------------------
restraining order, preliminary or permanent injunction or other order or decree
issued by any Governmental Entity of competent jurisdiction enjoining or
otherwise preventing the consummation of the Merger shall be in effect;
provided, however, that each of the parties shall use reasonable best efforts to
-------- -------
prevent the entry of any such injunction or other order or decree and to cause
any such injunction or other order or decree that may be entered to be vacated
or otherwise rendered of no effect. No statute, rule, regulation or other Law
shall have been enacted, promulgated or otherwise issued by any Governmental
Entity that prohibits the consummation of the Merger.
Section 6.02. Conditions to the Obligations of Acquisition to Effect
the Merger. The obligations of Acquisition to effect the Merger shall be subject
to the satisfaction of the following conditions unless waived by Acquisition:
34
(a) Representations and Warranties. The representations and
------------------------------
warranties of the Company set forth in this Agreement (i) to the extent
qualified by materiality or material adverse effect qualifiers, shall be true
and correct and (ii) to the extent not qualified by materiality or material
adverse effect qualifiers, shall be true and correct in all material respects,
in each of cases (i) and (ii), as of the date of this Agreement and as of the
Effective Time as though made on and as of the Effective Time, except (x) as
contemplated or permitted by this Agreement and (y) to the extent that such
representations or warranties shall have been expressly made as of an earlier
date, in which case such representations and warranties shall have been true and
correct as of such earlier date, and Acquisition shall have received a
certificate to such effect signed on behalf of the Company by its Chief
Executive Officer or its Chief Financial Officer.
(b) Performance of Obligations of the Company. The Company shall
-----------------------------------------
have performed or complied with in all material respects all material
obligations required to be performed or complied with by it under this Agreement
at or prior to the Effective Time, and Acquisition shall have received a
certificate to such effect signed on behalf of the Company by its Chief
Executive Officer or its Chief Financial Officer.
(c) Consents, Etc. Acquisition shall have received evidence, in form
-------------
and substance reasonably satisfactory to it, that such consents, approvals,
authorizations, qualifications and orders of Governmental Entities and other
third parties as are necessary in connection with the transactions contemplated
hereby have been obtained, other than those the failure of which to be obtained,
individually or in the aggregate, would not have a material adverse effect on
the Company.
(d) No Litigation. There shall not be pending any suit, action or
-------------
proceeding brought by any Governmental Entity seeking to prohibit or limit in
any material respect the ownership or operation by the Company, Acquisition or
any of their respective affiliates of a substantial portion of the business or
assets of the Company and its Subsidiaries, taken as a whole, or to require any
such person to dispose of or hold separate any material portion of the business
or assets of the Company and its Subsidiaries, taken as a whole, as a result of
the Merger or any of the other transactions contemplated by this Agreement or
seeking to impose limitations on the ability of WCAS VIII or any of its
affiliates or any third party investor contemplated by Section 5.02 to acquire
or hold, or exercise full rights of ownership of, any shares of Company Common
Stock, including, without limitation, the right to vote the Company Common Stock
on all matters properly presented to the stockholders of the Company or seeking
to prohibit WCAS VIII or any of its affiliates or any such investor from
effectively controlling in any material respect a substantial portion of the
business or operations of the Company or its Subsidiaries, in each case after
giving effect to any actions required to be taken pursuant to Section 5.06.
(e) Financing. Acquisition shall have arranged the Financing
---------
substantially on the terms contemplated by the Commitment Letters or alternative
financing on terms no less favorable than those set forth in the Commitment
Letters, unless the failure to arrange the
35
Financing was the result of a failure by Acquisition to perform any covenant or
condition contained therein or herein, a failure by either WCAS VIII or
Convergent Equity Partners L.P. or their respective affiliates to perform their
respective obligations contained therein or the inaccuracy of any representation
or warranty of Acquisition.
Section 6.03. Conditions to the Obligations of the Company to Effect
the Merger. The obligations of the Company to effect the Merger shall be subject
to the satisfaction of the following conditions unless waived by the Company:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Acquisition set forth in this Agreement (i) to the extent
qualified by materiality or material adverse effect qualifiers, shall be true
and correct and (ii) to the extent not qualified by materiality or material
adverse effect qualifiers, shall be true and correct in all material respects,
in each of cases (i) and (ii), as of the date of this Agreement and as of the
Effective Time as though made on and as of the Effective Time, except (x) as
contemplated or permitted by this Agreement and (y) to the extent that such
representations or warranties shall have been expressly made as of an earlier
date, in which case such representations and warranties shall have been true and
correct as of such earlier date, and the Company shall have received a
certificate to such effect signed on behalf of Acquisition by a director thereof
who shall also be a managing member of the sole general partner of WCAS VIII.
(b) Performance of Obligations of Acquisition. Acquisition shall
-----------------------------------------
have performed or complied with in all material respects all material
obligations required to be performed or complied with by it under this Agreement
at or prior to the Effective Time, and the Company shall have received a
certificate to such effect signed on behalf of Acquisition by a director thereof
who shall also be a managing member of the sole general partner of WCAS VIII.
(c) Financing. Acquisition shall have arranged the Financing
---------
substantially on the terms contemplated by the Commitment Letters or alternative
financing on terms no less favorable than those set forth in the Commitment
Letters, unless the failure to arrange the Financing was the result of a failure
by the Company to perform any covenant or condition contained herein or the
inaccuracy of any representation or warranty of the Company.
(d) Solvency Letter. Acquisition shall have caused the valuation
---------------
firm which has delivered a solvency letter to the financial institutions
providing the debt financing for the Merger (or, if no such letter has been
provided thereto, a valuation firm reasonably acceptable to the Company) to have
delivered to the Company a letter addressed to its Board of Directors in form
and substance reasonably satisfactory thereto as to the solvency of the Company
and its Subsidiaries after giving effect to the Merger, the financing
arrangements contemplated by Acquisition with respect to the Merger and the
other transactions contemplated hereby.
Section 6.04. Frustration of Closing Conditions. Neither Acquisition
nor the Company may rely on the failure of any condition set forth in Section
6.01, 6.02 or 6.03, as the
36
case may be, to be satisfied if such failure was caused by such party's failure
to use all reasonable best efforts to consummate the Merger and the other
transactions contemplated hereby.
ARTICLE VII
TERMINATION AND AMENDMENT
Section 7.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after the Company
Stockholder Approval is obtained:
(a) by mutual written consent of Acquisition and the Company;
(b) by Acquisition or the Company upon written notice to the other
party:
(i) if any Governmental Entity of competent jurisdiction
shall have issued a permanent injunction or other order or decree
enjoining or otherwise preventing the consummation of the Merger
and such injunction or other order or decree shall have become
final and nonappealable; provided that the party seeking to
terminate this Agreement pursuant to this clause (i) shall have
used its reasonable best efforts to prevent or contest the
imposition of, or seek the lifting or stay of, such injunction,
order or decree;
(ii) unless the party seeking to terminate this Agreement
is in material breach of its obligations hereunder, if the
Company or Acquisition breaches or fails to perform any of its
representations, warranties, covenants or other agreements
hereunder, which breach or failure to perform (A) would give rise
to the failure of a condition set forth in Section 6.02, in the
case of such a breach or failure to perform on the part of the
Company, or Section 6.03, in the case of such a breach or failure
to perform on the part of Acquisition, and (B) is incapable of
being cured by the party so breaching or failing to perform or is
not cured within 10 days after the terminating party gives
written notice of such breach to the other party and such a cure
is not effected during such period;
(iii) if the Merger shall not have been consummated on or
before September 15, 1999, unless the failure to consummate the
Merger is the result of a material breach of this Agreement by
the party seeking to terminate this Agreement; or
(iv) if, upon a vote at a duly held Company Stockholder
Meeting or any adjournment thereof, the Company Stockholder
Approval shall not have been obtained;
37
(c) by Acquisition upon written notice to the Company if the Board of
Directors of the Company or any committee thereof shall have withdrawn or
modified in a manner adverse to Acquisition its approval or recommendation of
the Merger or this Agreement, approved or recommended any Acquisition Proposal
or resolved to do any of the foregoing; or
(d) by the Company, if the Board of Directors of the Company
determines, in the exercise of its good faith judgment as to fiduciary duties to
its stockholders imposed by law, after consultation with outside counsel, that
such termination is required by reason of an Acquisition Proposal being made in
order for the Company's Board of Directors to act in a manner consistent with
its fiduciary duties under applicable law; provided that the Company shall
--------
notify Acquisition promptly of its intention to terminate this Agreement or
enter into a definitive agreement with respect to any Acquisition Proposal,
Section 7.02. Effect of Termination. In the event of termination of
this Agreement by either party hereto as provided in Section 7.01, this
Agreement shall forthwith become void and have no effect, and, except to the
extent that such termination results from the willful and material breach by a
party of any of its representations, warranties, covenants or agreements set
forth in this Agreement, there shall be no liability or obligation on the part
of Acquisition or the Company, except with respect to Section 3.01(h), Section
3.01(y), Section 3.02 (d), Section 3.02(h), the second sentence of 5.05, this
Section 7.02, Section 7.03 and Article VIII, which provisions shall survive such
termination.
Section 7.03. Fees and Expenses. (a) Whether or not the Merger is
consummated, all costs and expenses incurred in connection with the Merger, this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such expenses.
(b) If a Payment Event (as hereinafter defined) occurs, the Company
shall, within two business days following such Payment Event, pay Acquisition,
or its designee, a termination fee of $12,000,000 in cash. A "Payment Event"
means (i) the termination of this Agreement by Acquisition pursuant to Section
7.01(c), (ii) the termination of this Agreement by the Company pursuant to
Section 7.01(d), or (iii) the Company (x) enters into, (y) agrees to enter into
or (z) consummates a transaction within one year after the date of termination
of this Agreement (other than pursuant to Section 7.01(a) or Section 7.01(b)(i),
or by reason of Acquisition's failure to comply with or perform, or breach, in
any material respect, of any of its covenants or agreements contained herein)
that is the subject of an inquiry, proposal or offer that is an Acquisition
Proposal that was publicly announced or submitted to the Company prior to the
termination of this Agreement.
(c) The Company acknowledges that the agreements contained in this
Section 7.03 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Acquisition would not enter into
this Agreement; accordingly, if the Company fails to promptly pay any amount due
pursuant to this Section 7.03, and, in order to obtain such
38
payment, Acquisition commences a suit which results in a judgment against the
Company for the fee set forth in this Section 7.03, the Company shall also pay
to Acquisition its costs and expenses incurred in connection with such
litigation.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant hereto shall survive the Effective Time, provided that this
--------
Section 8.01 shall not limit any covenant or agreement of the parties that by
its terms contemplates performance after the Effective Time.
Section 8.02. Confidentiality Agreement. The Confidentiality
Agreement shall survive the execution and delivery of this Agreement or any
termination of this Agreement, and the provisions of the Confidentiality
Agreement shall apply to all information and material delivered by any party
hereunder.
Section 8.03. Publicity. The Company and Acquisition agree that they
will not issue any press release or make any other public announcement
concerning this Agreement or the transactions contemplated hereby without the
prior consent of the other party, which consent shall not be unreasonably
withheld, except that the Company or Acquisition may make such public disclosure
that it believes in good faith to be required by law (in which event such party
shall consult, to the extent possible, with the other party prior to making such
disclosure).
Section 8.04. Amendment. This Agreement may be amended, modified or
supplemented only by written agreement by the parties hereto at any time before
the Effective Time; provided that, after receipt of the Company Stockholder
--------
Approval, no amendment shall be made which by law requires further approval by
such stockholders without so obtaining such further approval.
Section 8.05. Extension; Waiver. At any time prior to the Effective
Time, the parties hereto may, to the extent legally allowed, (a) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations or warranties
contained herein or in any document delivered pursuant hereto and (c) subject to
the provisions of Section 8.04, waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
Section 8.06. Notices. All notices, requests and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally, telecopied (with confirmation) or sent by
overnight or same-day courier (providing proof of
39
delivery) or sent by certified or registered mail, postage prepaid, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to the Company, to it at:
0000 XXX Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: President
Facsimile: (000) 000-0000
with a copy to:
Xxx X. Xxxxxx, Esq.
A. Xxxxxxx Xxxxx, Esq.
Xxxxxx & Xxxxxx L.L.P.
3700 Xxxxxxxx Xxxx Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Facsimile: (000) 000-0000; and
(b) if to Acquisition, to it at:
x/x Xxxxx, Xxxxxx, Xxxxxxxx & Xxxxx XXXX, X.X.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxx X. Xxxxxxxxx, Esq.
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Section 8.07. Counterparts. This Agreement may be executed in two
counterparts, both of which shall be considered one and the same agreement and
shall become effective when each party hereto shall have received a counterpart
hereof signed by the other party hereto.
40
Section 8.08. Entire Agreement; No Third-Party Beneficiaries; Rights
of Ownership. This Agreement, together with the Confidentiality Agreement, (a)
constitute the entire agreement and supersede all prior agreements with respect
to the subject matter hereof and of the Confidentiality Agreement and (b) other
than Section 5.07, Section 5.08 and Section 5.10 of this Agreement, is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
Section 8.09. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware applicable to
agreements entered into and to be performed wholly within such State.
Section 8.10. Successors and Assigns. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned, in whole or
in part, by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties, and any such assignment
that is not so consented to shall be null and void; provided that Acquisition
---------
may assign its rights hereunder to any of its affiliates, but no such assignment
shall relieve Acquisition of its obligations hereunder. If Acquisition shall
assign its rights under this Agreement, then the parties hereto shall enter into
a reasonable and appropriate amendment to this Agreement to reflect such
assignment and the substitution of the assignee as Acquisition for purposes of
this Agreement. Subject to the first sentence of this Section 8.10, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
Section 8.11. Jurisdiction. Each of the parties hereto (a) consents
to submit itself to the personal jurisdiction of any federal court located in
the State of Delaware or any Delaware state court in the event any dispute
arises out of this Agreement or the transactions contemplated hereby, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and (c) agrees that it will not
bring any action relating to this Agreement or the transactions contemplated
hereby in any court other than a federal or state court sitting in the State of
Delaware.
Section 8.12. Headings; Interpretation. The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. References in this Agreement
to Sections, Schedules, Exhibits or Articles mean a Section, Schedule, Exhibit
or Article of this Agreement or the Disclosure Schedule unless otherwise
indicated. References to this Agreement shall be deemed to include all Exhibits
and Sections of the Disclosure Schedule, unless the context otherwise requires.
The term "person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, a governmental entity or an unincorporated
organization.
Section 8.13. Severability. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or
41
unenforceability shall not affect any other provision of this Agreement or any
other such instrument.
Section 8.14. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND
Acquisition HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 8.15. Reference; No Waiver. Any reference in this Agreement
to the "date hereof," the "date of this Agreement" or the "date of execution of
this Agreement" shall be deemed to refer to April 5, 1999, the date of the
Original Merger Agreement, but any reference to the "date of this Amended and
Restated Agreement" or the "date of execution of this Amended and Restated
Agreement" shall refer to the date first written above. The parties' execution
and delivery of this Agreement shall not constitute a waiver of any rights that
either of the parties hereto may have by reason of any event, misrepresentation
or breach of covenant of the Original Merger Agreement having occurred prior to
the date of execution and delivery of this Agreement whether or not known to any
or all of the parties hereto.
42
IN WITNESS WHEREOF, the parties have executed and delivered this
Amended and Restated Agreement and Plan of Merger as of the day and year first
above written.
BANCTEC, INC.
By /s/ Xxx X. Xxxxxx
-----------------------------
Name: Xxx X. Xxxxxx
Title: Senior Vice President
COLONIAL ACQUISITION CORP.
By /s/ Xxxxxxx X. xx Xxxxxx
-----------------------------
Name: Xxxxxxx X. xx Xxxxxx
Title: Vice President
