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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ELECTRONIC DATA SYSTEMS CORPORATION,
RAMCAD CORPORATION
AND
NEODATA CORPORATION
AUGUST 7, 1997
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TABLE OF CONTENTS
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ARTICLE I
THE MERGER
1.1 The Merger............................................................. 1
1.2 The Closing............................................................ 1
1.3 Effective Time of the Merger........................................... 2
1.4 Effects of the Merger.................................................. 2
(a) Effects of the Merger.............................................. 2
(b) Directors and Officers............................................. 2
(c) Certificate of Incorporation....................................... 2
(d) Bylaws............................................................. 2
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1 Conversion of Capital Stock............................................ 2
(a) Capital Stock of Sub............................................... 2
(b) Cancellation of Treasury Stock and Parent-Owned Stock.............. 3
(c) Conversion of Capital Stock of the Company......................... 3
2.2 No Further Ownership Rights in the Company............................. 3
2.3 Payment for Shares..................................................... 3
(a) Paying Agent....................................................... 3
(b) Payment Procedures................................................. 4
(c) Unregistered Transfer of Capital Stock............................. 4
(d) Termination of Payment Fund........................................ 4
(e) Withholding Rights................................................. 5
(f) No Liability....................................................... 5
2.4 Stock Transfer Books................................................... 5
2.5 Dissenting Shares...................................................... 5
2.6 Stock Options.......................................................... 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 Organization and Standing.............................................. 6
3.2 Subsidiaries........................................................... 7
3.3 Corporate Power and Authority.......................................... 7
3.4 Capitalization of the Company.......................................... 8
3.5 Conflicts, Consents and Approvals...................................... 9
3.6 Absence of Certain Changes............................................ 10
3.7 Company SEC Documents................................................. 11
3.8 Taxes................................................................. 11
3.9 Compliance with Laws.................................................. 13
3.10 Litigation........................................................... 13
3.11 Employee Benefit Plans............................................... 13
3.12 Contracts............................................................ 16
3.13 No Defaults.......................................................... 16
3.14 Permits.............................................................. 16
3.15 Environmental Matters................................................ 17
3.16 No Undisclosed Liabilities........................................... 20
3.17 Corporate Records.................................................... 21
3.18 Accounting Records................................................... 21
3.19 Brokers.............................................................. 21
3.20 Properties........................................................... 21
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3.21 Insurance............................................................. 22
3.22 Intellectual Property................................................. 22
3.23 Labor Matters......................................................... 23
3.24 Bank Accounts......................................................... 24
3.25 Performance Consistent with Projections............................... 24
3.26 Related Party Transactions............................................ 24
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
4.1 Organization and Standing.............................................. 25
4.2 Corporate Power and Authority.......................................... 25
4.3 Conflicts, Consents and Approvals...................................... 25
4.4 Litigation............................................................. 26
ARTICLE V
COVENANTS OF THE PARTIES
5.1 Mutual Covenants....................................................... 26
(a) General............................................................ 26
(b) HSR Act............................................................ 26
(c) Other Governmental Matters......................................... 26
(d) Notification of Certain Matters.................................... 26
(e) Termination of Securityholders Agreement........................... 27
(f) Public Statements.................................................. 27
5.2 Covenants of the Company............................................... 27
(a) Access............................................................. 27
(b) Conduct of the Company's Operations................................ 28
(c) Discharge and Termination of Subdebt Warrants and Bridge Warrants.. 29
(d) Stock Options...................................................... 29
(e) Termination of Financial Advisory Agreements....................... 29
(f) Consent of Stockholders............................................ 29
5.3 Covenants of Parent and Sub............................................ 30
(a) Indemnification; Insurance......................................... 30
(b) Stockholder Actions................................................ 31
ARTICLE VI
CONDITIONS
6.1 Conditions to Obligations of All Parties............................... 31
6.2 Conditions to Obligations of Parent and Sub............................ 31
6.3 Conditions to Obligations of the Company............................... 33
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination............................................................ 33
7.2 Effect of Termination.................................................. 34
7.3 Amendment.............................................................. 34
7.4 Extension; Waiver...................................................... 34
ARTICLE VIII
MISCELLANEOUS
8.1 Survival of Representations and Warranties............................. 34
8.2 Notices................................................................ 34
8.3 Interpretation......................................................... 35
8.4 Counterparts........................................................... 36
8.5 Entire Agreement....................................................... 36
8.6 Third Party Beneficiaries.............................................. 36
8.7 Governing Law.......................................................... 36
8.8 Specific Performance................................................... 36
8.9 Assignment............................................................. 36
8.10 Expenses.............................................................. 36
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8.11 Severability.......................................................... 36
8.12 Subsidiares........................................................... 37
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made and
entered into as of the 7th day of August, 1997, by and among Electronic Data
Systems Corporation, a Delaware corporation ("Parent"), Ramcad Corporation, a
Delaware corporation and a wholly-owned subsidiary of Parent ("Sub"), and
Neodata Corporation, a Delaware corporation (the "Company").
RECITALS:
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have unanimously approved the acquisition of the Company by Parent, by
means of the merger (the "Merger") of Sub with and into the Company, upon the
terms and subject to the conditions set forth in this Agreement; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the consummation thereof;
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
1.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the General Corporation Law of
the State of Delaware (the "DGCL"), Sub shall be merged with and into the
Company at the Effective Time (as defined). At the Effective Time, the separate
corporate existence of Sub shall cease, and the Company shall continue as the
surviving corporation and a direct wholly owned subsidiary of Parent (Sub and
the Company are sometimes hereinafter referred to as "Constituent Corporations"
and, as the context requires, the Company is sometimes hereinafter referred to
as the "Surviving Corporation"), and shall continue under the name "Neodata
Corporation."
1.2 The Closing. Unless otherwise mutually agreed by the parties
hereto, the closing of the transactions contemplated hereby (the "Closing")
will take place at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxxxxx
Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, at 10:00 a.m., local time, on August
29, 1997, or on such other business date on which all conditions to the
obligations of the parties hereto shall have been satisfied or waived in
writing by the appropriate party (the "Closing Date").
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1.3 Effective Time of the Merger. 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") with the Secretary
of State of the State of Delaware, as provided in the DGCL, on the Closing
Date. The Merger shall become effective upon such filing or at such time
thereafter as is provided in the Certificate of Merger (the "Effective Time").
1.4 Effects of the Merger.
(a) Effects of the Merger. The Merger shall have the effects as set
forth in the applicable provisions of the DGCL.
(b) Directors and Officers. The directors of Sub and the officers
of Sub immediately prior to the Effective Time shall, from and after the
Effective Time, be the initial directors and officers, respectively, of the
Surviving Corporation, holding the same offices in the Surviving Corporation as
they held in Sub immediately prior to the Effective Time, until their
successors have been duly elected 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) Certificate of Incorporation. At the Effective Time and
without any further action on the part of the Constituent Corporations, the
Certificate of Incorporation of Sub shall be the Certificate of Incorporation
of the Surviving Corporation, provided that Article One of such Certificate
Incorporation shall be amended to read in its entirety as follows:
"The name of the corporation is Neodata Corporation."
(d) Bylaws. At the Effective Time and without any further action on
the part of the Constituent Corporations, the Bylaws of Sub shall be the Bylaws
of the Surviving Corporation.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1 Conversion of Capital Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of any holder of shares of
capital stock of the Company or any holder of shares of capital stock of Sub:
(a) Capital Stock of Sub. Each share of the capital stock of Sub
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 $0.01 per share, of the Surviving Corporation.
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(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each
share of capital stock of the Company that is owned, directly or indirectly, by
the Company and each share of capital stock of the Company that is owned,
directly or indirectly, by Parent, Sub or any other subsidiary of Parent shall
be canceled and retired and shall cease to exist and no consideration shall be
delivered or deliverable in exchange therefor.
(c) Conversion of Capital Stock of the Company. Subject to the other
provisions of this Section 2.1, each share of capital stock of the Company
issued and outstanding immediately prior to he Effective Time (excluding shares
referred to in Section 2.1(b) above and other than Dissenting Shares (as
defined in Section 2.6)) shall be converted into the right to receive the
Merger Consideration, without any interest thereon, upon surrender of the
certificate formerly representing such share of capital stock. For purposes of
this Agreement, "Merger Consideration" shall mean collectively (i) in the case
of the Common Stock, par value $.01 per share of the Company (the "Common
Stock"), and the Nonvoting Common Stock, par value $.01 per share of the
Company (the "Nonvoting Common Stock"), an amount in cash equal to $2.60 per
share of Common Stock, and (ii) in the case of the Class A Convertible
Preferred Stock - Series 2, par value $.01 per share, of the Company (the
"Series 2 Preferred"), an amount in cash equal to $7.6727090241 per share of
Series 2 Preferred, in each case subject to withholding.
2.2 No Further Ownership Rights in the Company. All shares of
capital stock of the Company, when converted as provided in Section 2.1, no
longer shall be outstanding and shall automatically be canceled and retired and
shall cease to exist, and each certificate previously evidencing shares of
capital stock of the Company outstanding immediately prior to the Effective Time
(collectively, the "Certificates") shall thereafter represent only the right to
receive the Merger Consideration, without any interest thereon. Following
conversion of the shares of capital stock of the Company as provided in Section
2.1, the holders of Certificates shall cease to have any rights as stockholders
of the Company except as otherwise provided herein or by law.
2.3 Payment for Shares.
(a) Paying Agent. Prior to the Effective Time, Sub shall appoint
a United States bank or trust company reasonably acceptable to the Company to
act as paying agent (the "Paying Agent") for the payment of the Merger
Consideration. At Closing, Sub shall deposit or shall cause to be deposited
with the Paying Agent in a separate fund established for the benefit of the
holders of shares of capital stock of the Company (other than the Company or
Parent, Sub or any other subsidiary or Parent, or holders of Dissenting Shares)
immediately available funds in amounts necessary to make the payments described
in this Section 2.3 (the "Payment Fund").
The Paying Agent shall invest portions of the Payment Fund as Parent
directs in obligations of or guaranteed by the United States of America, in
commercial paper obligations receiving the highest investment grade rating from
both Xxxxx'x Investors Services, Inc. and Standard & Poor's Corporation, or in
certificates of deposit, bank repurchase agreements or banker's acceptances of
commercial banks with capital exceeding $1,000,000,000 (collectively,
"Permitted Investments"); provided, however, that the maturities of Permitted
Investments shall be such as to permit the Paying Agent to make prompt payment
to former holders of capital stock
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of the Company entitled thereto as contemplated by this Section. The Surviving
Corporation shall cause the Payment Fund to be promptly replenished to the
extent of any losses incurred as a result of Permitted Investments. The Paying
Agent shall, pursuant to irrevocable instructions, pay the Merger Consideration
out of the Payment Fund. Any interest or other income earned on the investment
of cash held in the Payment Fund shall be paid to Parent as and when requested
by Parent. If for any reason (including losses) the Payment Fund is inadequate
to pay the amounts to which holders of shares of capital stock of the Company
shall be entitled under this Section 2.3, Parent shall in any event be liable
for payment thereof or to cause the Surviving Corporation to make payment
thereof. The Payment Fund shall not be used for any purpose except as expressly
provided in this Agreement.
(b) Payment Procedures. Parent will instruct Paying Agent to
distribute the Merger Consideration as soon as reasonably practicable after the
Effective Time (subject to withholding), to each holder of record of a
Certificate or Certificates (excluding Certificates representing shares
referred to in Section 2.1(b) above and Dissenting Shares) as set forth herein.
Upon surrender of a Certificate (or affidavit of lost Certificate in form and
substance reasonably satisfactory to Parent and Paying Agent, and, if Parent or
Paying Agent shall reasonably request, the posting of a bond in form and
substance reasonably satisfactory to Parent and Paying Agent) to the Paying
Agent or to such other agent or agents as may be appointed by the Surviving
Corporation, together with a blank stock power, duly executed, and such other
documents as may be required by Parent or the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor the aggregate
Merger Consideration into which the shares theretofore represented by such
Certificate so surrendered shall have been converted. No interest will be paid
or will accrue on the Merger Consideration upon the surrender of any
Certificate. Until surrendered as contemplated by this Section 2.3(b), 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 as
contemplated by this Section 2.3.
(c) Unregistered Transfer of Capital Stock. In the event of a
transfer of ownership of capital stock of the Company which is not registered
in the transfer record of the Company, the appropriate Merger Consideration may
be issued to a transferee if the Certificate representing such capital stock is
presented to the Paying Agent, accompanied by all documents reasonably required
by Parent, including (i) documents to evidence and effect such transfer and to
evidence that any applicable stock transfer taxes have been paid and (ii)
documents evidencing transferee's representation or warranties to Parent with
respect to the ownership of such capital stock.
(d) Termination of Payment Fund. Any funds deposited with the
Paying Agent that are payable to a former stockholder of the Company which has
not submitted a claim for its portion of the Merger Consideration as described
in this Section 2.3 within six months after notice of the Effective Time has
been transmitted to stockholders of record shall be paid or delivered, as the
case may be, to Parent upon demand, and any former stockholders of the Company
who have not theretofore complied with the instructions for exchanging their
Certificates shall thereafter look only to Parent for payment, it being
acknowledged by Parent and Sub that Parent's receipt of any such amounts shall
not relieve it of its payment obligations to
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such former stockholders. In no event will any former stockholder of the
Company be entitled to receive interest or any other amounts earned on the
Merger Consideration held by the Paying Agent or Parent in accordance with this
Section 2.3(d).
(e) Withholding Rights. Parent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of shares of capital stock of the Company such amounts as Parent is
required to deduct and withhold with respect to the making of such payment
under the Internal Revenue Code of 1986, as amended (the "Code"), or any
provision of state, local or foreign tax law. To the extent that amounts are
so withheld by Parent, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of such shares of capital
stock of the Company in respect of which such deduction and withholding was made
by Parent. To the extent applicable, the parties hereto agree that the Parent
may require a holder of a Certificate to certify, under penalty of perjury, such
person's taxpayer identification number and that such person is not a foreign
person pursuant to Section 1445(b)(2) of the Code. Prior to the Closing Date,
the Company will provide Parent with an affidavit under penalties of perjury
which satisfies Section 1445(b)(3) of the Code.
(f) No Liability. Neither Parent nor the Surviving Corporation
shall be liable to any holder of shares of capital stock of the Company for any
cash from the Payment Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
2.4 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of shares of capital stock of the Company thereafter
on the records of the Company. On or after the Effective Time, any
Certificates presented to the Paying Agent or Parent for any reason shall be
converted into the Merger Consideration.
2.5 Dissenting Shares. Notwithstanding any other provisions of
this Agreement to the contrary, shares of capital stock of the Company that are
outstanding immediately prior to the Effective Time and which are held by
stockholders who shall have not voted in favor of the Merger or consented
thereto in writing and who shall have demanded properly in writing appraisal
for such shares in accordance with Section 262 of the DGCL (collectively, the
"Dissenting Shares") shall not be converted into or represent the right to
receive the Merger Consideration. Such stockholders instead shall be entitled
to receive payment of the appraised value of such shares of capital stock of
the Company held by them in accordance with the provisions of such Section 262
of the DGCL, except that all Dissenting Shares held by stockholders who shall
have failed to perfect or who effectively shall have withdrawn or lost their
rights to appraisal of such shares of capital stock of the Company under such
Section 262 of the DGCL shall thereupon be deemed to have been converted into
and to have become exchangeable, as of the Effective Time, for the right to
receive, without any interest thereon, the appropriate Merger Consideration
upon surrender, in the manner provided in Section 2.3, of the Certificate or
Certificates that, immediately prior to the Effective Time, evidenced such
shares of capital stock of the Company. The Company shall give Parent (i)
prompt notice of any written demands for appraisal, withdrawals of demands for
appraisal and any other written instrument served pursuant
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to Section 262 of the DGCL received by the Company and (ii) the opportunity to
participate in all negotiations and proceedings with respect to demands for
appraisal under such Section. Prior to the Effective Time, the Company will
not voluntarily make any payment with respect to any demands for appraisal and
will not, except with the prior written consent of Parent, settle or offer to
settle any such demands.
2.6 Stock Options. Other than (i) nonvested options held by
Xxxxxxxx Xxxxxxx, Xxxxxxx Xxxxx, Xx Xxxxxxxx, Xx Xxxxxxx, Xxx Xxxx, Xxx Xxxxx,
Xxxxx Xxxxxx and Xxxx Xxxx, the acceleration of exercisability of which is
contingent upon delivery by each such person of an Amendment to Executive
Employment Agreement, and (ii) certain options held by A. Xxxxxxxx Xxxxx to the
extent that such acceleration would result in an "excess parachute payment"
within the meaning of Section 280G of the Code, prior to the Closing, the
Company shall cause each outstanding Performance Option (as hereinafter
defined), Xxxxxxxx Option (as hereinafter defined) and each outstanding option
under the 1990 Plan (as hereinafter defined) and the 1994 Plan (as hereinafter
defined, and together with the 1990 Plan, the "Stock Option Plans") to become
exercisable for a period beginning on such date after the date hereof as the
Company shall reasonably determine and ending immediately prior to the
Effective Time. At the Effective Time, each then outstanding Performance
Option, Xxxxxxxx Option or option under the Stock Option Plans (collectively,
the "Options") which was not exercised prior to the Effective Time shall
terminate and the holder thereof will have the right to receive for the shares
of Common Stock, Series 2 Preferred or Nonvoting Common Stock subject to such
Option an amount (subject to any applicable withholding tax) in cash equal to
the difference between the aggregate Merger Consideration applicable to such
shares and the aggregate per share exercise price of such option to the extent
such difference is a positive number (such amount being hereinafter referred to
as, the "Option Consideration"). The surrender of an Option to the Company in
exchange for the Option Consideration shall be deemed a release of any and all
rights the holder had or may have had in respect of such option.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce Parent and Sub to enter into the Agreement, the
Company hereby represents and warrants to Parent and Sub that the statements
contained in this Article III are true, correct and complete.
3.1 Organization and Standing. Each of the Company and its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation with full power
and authority to own, lease, use and operate its properties and to conduct its
business as and where now owned, leased, used, operated and conducted. Each of
the Company and its subsidiaries is duly qualified to do business and in good
standing in each jurisdiction in which the nature of the business conducted by
it or the property it owns, leases or operates makes such qualification
necessary, except where the failure to be so qualified or in good standing in
such jurisdiction would not have a material adverse effect on the Company.
Section 3.1 of the Disclosure Schedule delivered by the Company to parent
herewith (the "Company
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Disclosure Schedule") lists, for the Company and each of its subsidiaries, (i)
the jurisdiction of incorporation and (ii) each jurisdiction in which such
entity is qualified or licensed to do business. The Company has previously
delivered to Parent complete and correct copies of (i) the Certificates of
Incorporation (or similar governing documents) and all amendments thereto to
the date hereof and (ii) the Bylaws (or similar governing documents) as in
effect on the date hereof, in each case for the Company and each of its
subsidiaries.
3.2 Subsidiaries. As of the date hereof, the Company does not own,
directly or indirectly, any equity or other ownership interest in any
corporation, partnership, joint venture or other entity or enterprise, except
as set forth in Section 3.2 of the Company Disclosure Schedule. Section 3.2 of
the Company Disclosure Schedule sets forth as to each subsidiary of the
Company: (i) its name, (ii) its authorized capital stock or share capital,
(iii) the number of issued and outstanding shares of it capital stock or share
capital, and (iv) the number of shares owned beneficially and of record by the
Company or any of its subsidiaries. Except as set forth in Section 3.2 of the
Company Disclosure Schedule, each of the outstanding shares of capital stock of
each of the Company's subsidiaries is duly authorized, validly issued, fully
paid and nonassessable, and is owned, directly or indirectly, by the Company
free and clear of all liens, pledges, security interests, claims, options,
rights of first refusal, limitations on voting rights, or other encumbrances.
Other than as set forth in Section 3.2 of the Company Disclosure Schedule,
there are no outstanding shares of capital stock or subscriptions, options,
warrants, puts, calls, agreements, understandings, claims or other commitments
or rights of any type relating to the issuance, sale or transfer of any
securities of any subsidiary of the Company, nor are there outstanding any
securities which are convertible into or exchangeable for any shares of
capital stock of any subsidiary of the Company; and no subsidiary of the
Company has any obligation of any kind to issue any additional securities or to
pay for securities of any subsidiary of the Company or any predecessor thereof
(other than any obligation of Neodata Services, Inc., a Delaware corporation
and a wholly-owned subsidiary of the Company ("Services"), under the Indenture
(as defined in Section 3.7)).
3.3 Corporate Power and Authority. The Company has full corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly and validly approved by the Board of
Directors of the Company, and no other corporate proceedings on the part of the
Company are necessary to approve this Agreement and to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval and adoption of this Agreement by the stockholders of the Company in
accordance with the DGCL and the Company's Certificate of Incorporation).
This Agreement has been duly executed and delivered by the Company and,
assuming the due execution and delivery of this Agreement by the other parties
hereto, constitutes a valid and binding obligation of the Company enforceable
against it in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditor's rights in general and subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
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3.4 Capitalization of the Company. The Company's authorized
capital stock consists solely of (a) 63,000,000 shares of Common Stock, (b)
3,000,000 shares of Nonvoting Common Stock, and (c) 21,090,000 shares of
preferred stock, par value $.01 per share ("Preferred Stock"), of which
9,000,000 shares are designated as "Class A Convertible Preferred Stock -
Series 1," 9,000,000 shares are designated as "Class A Convertible Preferred
Stock - Series 2" and 3,090,000 shares are designated as "Class B Junior
Convertible Preferred Stock." As of the date hereof, (i) 387,892.08 shares of
Common Stock are issued and outstanding, (ii) no shares of Nonvoting Common
Stock are issued and outstanding, (iii) 8,600,000 shares of Class A
Convertible Preferred Stock - Series 1 are issued and outstanding, (iv)
6,671,743.73 shares of Series 2 Preferred are issued and outstanding and (v)
3,090,000 shares of Class B Junior Convertible Preferred Stock are issued and
outstanding. As of the date hereof, (i) 75,441.26 shares of Common Stock and
1,297,589.65 shares of Series 2 Preferred are reserved for issuance upon
exercise of outstanding options granted under the Company's 1990 Employee
Incentive Plan (the "1990 Plan"), of which options to purchase 51,714.84 shares
of Common Stock and 889,495.29 shares of Series 2 Preferred are outstanding,
(ii) 20,117.67 shares of Common Stock and 346,023.91 shares of Series 2
Preferred are reserved for issuance upon exercise of outstanding options
granted to executive officers in 1990 (the "Performance Options"), of which
options to purchase 11,825.29 shares of Common Stock and 203,394.93 shares of
Series 2 Preferred are outstanding, (iii) 2,011.77 shares of Common Stock and
34,602.39 shares of Series 2 Preferred are reserved for issuance upon exercise
of outstanding options granted to Xxxxxx X. Xxxxxxxx (the "Xxxxxxxx Options"),
all of which options are outstanding (iv) 2,631,579 shares of Common Stock and
2,631,579 shares of Nonvoting Common Stock are reserved for issuance upon
exercise of outstanding options granted under the Company's 1994 Incentive Plan
(the "1994 Plan"), of which no options for Common Stock are outstanding and
options to purchase 2,322,334 shares of Nonvoting Common Stock are outstanding
and (v) 61,987.57 shares of Common Stock and 1,066,186.17 shares of Series 2
Preferred are reserved for issuance upon exercise of outstanding warrants, of
which Bridge Warrants (as hereinafter defined) to purchase 1,307.65 shares of
Common Stock and 22,491.56 shares of Series 2 Preferred are outstanding and
Subdebt Warrants (as hereinafter defined) to purchase 28,266.23 shares of
Common Stock and 486,179.16 shares of Preferred Stock are outstanding (the
"Warrants"). The Conversion Rate (as such term is defined in the Certificate of
Incorporation of the Company) for the Series 2 Preferred is 2.9510419319. As of
the date hereof, all outstanding shares of capital stock of the Company are
owned of record as set forth in Section 3.4 of the Company Disclosure Schedule.
Each outstanding share of capital stock of the company is duly authorized and
validly issued, fully paid and nonassessable and free of any preemptive rights.
Following (A) the execution and delivery of the Warrant Exercise Agreements (as
defined in Section 5.2) and the consummation of the transactions contemplated
thereby and (B) consummation of the Option Plan Terminations (as defined in
Section 5.2(d)), except for the Class A Convertible Preferred Stock - Series 1,
the Series 2 Preferred, the Class B Junior Convertible Preferred Stock and the
Nonvoting Common Stock, and except as provided in the Stockholders Agreement,
dated as of November 28, 1994, among the Company and the stockholders of the
Company listed on the signature pages thereto (the "Stockholders Agreement"),
which will terminate and cease to be effective at the Effective Time, and in
the Indenture, there will be no outstanding subscriptions, options, warrants,
puts, calls, agreements, understandings, claims or other commitments or rights
of any type relating to the issuance, sale or transfer by the Company or any
subsidiary of the Company of any securities
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of the Company or any such subsidiary, nor will there be outstanding any
securities which are convertible into or exchangeable for any shares of capital
stock of the Company, and the Company will have no obligation of any kind to
issue any additional capital stock. The Company has no outstanding bonds,
debentures, notes or other similar obligations the holders of which have the
right to vote generally with holders of the Common Stock (or convertible into
securities having such right). Except pursuant to this Agreement, there are
not now, and at the Effective Time there will not be, any voting trusts or
other agreements or understandings to which the Company or any of its
subsidiaries is a party or is bound with respect to the voting of the capital
stock of the Company or any of its subsidiaries, other than the Stockholders
Agreement and the Securityholders Agreement (as hereinafter defined). Section
3.4 of the Company Disclosure Schedule sets forth (i) all options to purchase
capital stock of the Company which are outstanding on the date hereof, the
number and class of shares of capital stock for which such options are
exercisable, the exercise price of such options, which of such options are
currently exercisable, the vesting schedule for all other options and the
identity of the optionees, and (ii) the number of Warrants which are
outstanding on the date hereof, the number and class of shares of capital stock
for which such Warrants are exercisable, the exercise price and the record
holders thereof.
3.5 Conflicts, Consents and Approvals. Neither the execution and
delivery of this Agreement by the Company nor the consummation of the
transactions contemplated hereby will:
(a) conflict with or violate any provision of the Certificate of
Incorporation or Bylaws (or any similar organizational document) of the
Company or any subsidiary of the Company;
(b) violate, or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which, with the giving of notice,
the passage of time or otherwise, would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time or
otherwise) to terminate, accelerate, modify or call a default under,
result in the loss of any benefit under, result in the termination,
acceleration or cancellation of, or result in the creation of any lien,
security interest, charge or encumbrance upon, any of the properties or
assets of the Company or any of its subsidiaries under any of the terms,
conditions or provisions of, any note, bond, mortgage, indenture, deed of
trust, license, contract, undertaking, agreement, lease or other instrument
or obligation to which the Company or any of its subsidiaries is a party or
by which any of their respective properties or assets may be bound;
(c) violate any order, writ, injunction, decree, statute, rule or
regulation, applicable to the Company or any of its subsidiaries or their
respective properties or assets; or
(d) require any action or consent or approval of, or review by, or
registration or filing by the Company or any of its affiliates with, any
third party or any court, arbitral tribunal, administrative agency or
commission or other governmental or regulatory body, agency, instrumentality
or authority (a "Governmental Authority"), other than (i) actions
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required by the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder (the "HSR
Act") and (ii) the filing and recordation of the Certificate of Merger as
required by the DGCL;
except as set forth in Section 3.5 of the Company Disclosures Schedule and, in
the case of subparagraphs (b), (c) and (d) above, for any of the foregoing that
would not, in the aggregate, have a material adverse effect on the Company.
3.6 Absence of Certain Changes. Except as set forth in Section 3.6 of
the Company Disclosure Schedule, since June 30, 1996, each of the Company and
its subsidiaries has conducted its business in the ordinary course, consistent
with past practice, and there has not occurred (i) any event which has had or
which would have, individually or in the aggregate, a material adverse effect
on the Company (but, excluding for such purposes, events that are generally
applicable in the Company's industry and the United States economy), (ii) any
transaction or commitment, other than in the ordinary course of business,
entered into by the Company or any of its subsidiaries, (iii) any material
change by the Company in its accounting methods, principles or practices; (iv)
any declaration, setting aside or payment of any dividend or distribution in
respect of any capital stock of the Company or any subsidiary (other than
dividends by a subsidiary to the Company); (v) any acquisition of material
assets or stock or other material interests of a third party or agreement with
respect to the foregoing other than in the ordinary course of business
consistent with past practice; (vi) any sale, transfer or other disposition of
material assets of the Company or any subsidiary or agreement with respect to
the foregoing other than in the ordinary course of business consistent with
past practice; (vii) any material revaluation by the Company or any subsidiary
of any asset (including, without limitation, any writing down of accounts
receivable, other than the writing down of accounts receivable in the ordinary
course of business); (viii) any mortgage or pledge of any of the material
assets or properties of the Company or any of its subsidiaries or the
subjection of any of the material assets or properties of the Company or any of
its subsidiaries to any liens, charges, encumbrances, imperfections of title,
security interests, options or rights or claims of others with respect thereto,
other than in the ordinary course of business consistent with past practice;
(ix) any assumption or guarantee by the Company or any of its subsidiaries of
the indebtedness of any person or entity other than in the ordinary course of
business consistent with past practice; (x) any capital expenditures by the
Company and its subsidiaries other than in the ordinary course of business
consistent with past practice; (xi) any cancellation, satisfaction or
prepayment of any debt, obligation, liability or encumbrance, or waiver of any
claim or right of value of the Company or any of its subsidiaries, other than
in the ordinary course of business consistent with past practice; (xii) any
labor organizational efforts or complaints, or any labor trouble or
controversies with a group of employees; (xiii) any material deterioration or
adverse change in internal control systems; or (xiv) any increase in the
compensation payable or to become payable by the Company or any subsidiary to
any employees, officers of consultants as salary or wages or under any bonus,
insurance, welfare, severance, deferred compensation, pension, retirement,
profit sharing, stock option, stock purchase or other employee benefit plan,
other than pursuant to the terms of the employment agreements and employee
benefit plans listed in Sections 3.11 or 3.12 of the Company Disclosure
Schedule or other than in the ordinary course of business consistent with past
practice.
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3.7 Company SEC Documents. Services has timely filed with the
Securities and Exchange Commission (the "Commission"), and the Company has made
available to Parent, all forms, reports, schedules, statements, exhibits and
other documents required to be filed by Services under the Securities Exchange
Act of 1934 (together with the rules and regulations thereunder, the "Exchange
Act"), the Securities Act of 1933 (together with the rules and regulations
thereunder, the "Securities Act"), and the terms of that certain Indenture,
dated May 5, 1993 (the "Indenture"), by and between Services and Ameritrust
Texas National Association, as Trustee (such documents as supplemented and
amended since the time of filing, collectively, the "Company SEC Documents").
The Company SEC Documents, including, without limitation, any financial
statements or schedules included therein, at the time filed (a) did not contain
any untrue statement of a material fact or omit 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, and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be. The
financial statements (including the related notes) of Services included in the
Company SEC Documents comply in all material respect as to form with applicable
accounting requirements and with the published rules and regulations of the
Commission with respect thereto, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto), and fairly present
(subject in the case of unaudited statements to normal, recurring and year-end
audit adjustments) in all material respects the consolidated results of its
operations and cash flows for the periods then ended. The consolidated
financial statements of the Company and its subsidiaries attached to Section 3.7
of the Company Disclosure Schedule have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except that the Company's investment in Services is
carried at historical cost and except for the absence of footnotes) and fairly
present (subject in the case of unaudited statements to normal, recurring and
year-end audit adjustments) in all material respects the financial position of
the Company and its subsidiaries and cash flows for the periods then ended. The
Company has previously made available to Parent correct and complete copies of
(i) annual management letters from the Company's independent certified public
accountants and (ii) all material correspondence between the Commission and the
Company (including its subsidiaries) or its representatives, in each case since
January 1, 1993.
3.8 Taxes. (a) Except as disclosed on Section 3.8 of the Company
Disclosure Schedule:
(i) All Tax Returns required to be filed on or before the Closing
Date by or on behalf of, or in which is required to be reported the income
or other items of, the Company or any subsidiary of the Company have been or
will be filed within the time prescribed by law (including extensions of
time approved by the appropriate taxing authority). Such Tax Returns are
accurate and complete in all material respects.
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(ii) The Company and all subsidiaries of the Company have paid or will
pay, on a timely basis, all Taxes that are due on or before the Closing Date
(including, but not limited to, Taxes shown to be due on the Tax Returns
described in the preceding paragraph), except those Taxes that are being
disputed in good faith and for which adequate provision has been made in the
consolidated financial statements of the Company.
(iii) Adequate provision has been made on the Company's consolidated
balance sheet at June 30, 1997 attached to Section 3.7 of the Company
Disclosure Schedule and Services' most recent consolidated balance sheet
included in the Company SEC Documents for the payment of Taxes not yet due
as of the respective dates thereof.
(iv) There are no liens for Taxes upon any of the properties or assets
of the Company or any subsidiary of the Company, except liens for Taxes not
yet due or for Taxes being disputed in good faith and for which adequate
provision has been made in the financial statements of the Company (on the
date thereof).
(v) There are no pending audits, actions, proceedings, investigations,
disputes or claims with respect to any Taxes payable by or asserted against
the Company or any subsidiary of the Company and, to the Company's
knowledge, there is no basis on which any claim for Taxes can be asserted
with respect to the Company or any subsidiary of the Company that would
have a material adverse effect.
(vi) Neither the Company nor any subsidiary of the Company has given or
been requested in writing to give waivers or other agreements extending any
statue of limitations for assessment or collection of Taxes with respect to
the Company or any subsidiary of the Company for taxable periods for which
the applicable statue of limitations has not expired.
(vii) Neither the Company nor any subsidiary of the Company has made an
election that would result or has resulted in an adjustment under Section
481 of the Code increasing taxable income in taxable years ending after the
Closing Date.
(viii) All Taxes required to be withheld, collected or deposited by the
Company or any subsidiary of the Company have timely been withheld,
collected or deposited and, to the extent required, have been timely paid to
the relevant taxing authority.
(ix) As of the Closing Date, there are no unsatisfied actual or
proposed adjustments or assessments for Taxes, against the Company or any
subsidiary of the Company, and to the Company's knowledge, there is no basis
for any such assessment or adjustment.
(x) No closing agreement or agreements pursuant to Section 7121 of the
Code or any similar provision of any state or local law have been entered
into by or with respect to the Company or any subsidiary of the Company.
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(b) As used in this Agreement:
(i) "Tax" means all federal, state, local and foreign taxes,
charges, fees, levies or other similar assessments or liabilities
(including, without limitation, income, receipts, ad valorem, value
added, excise, property (whether real or personal property), sales,
occupation, service, stamp, use, licensing, withholding, employment,
payroll, share, capital, surplus, franchise or other taxes), whether
computed on a separate, consolidated, unitary or combined basis or in
any other manner, and includes any interest, fines, penalties,
assessments, deficiencies or additions to tax.
(ii) "Tax Returns" means any returns, renditions, declarations,
reports, claims for refund, and any informational returns or statements,
including any schedules or attachments thereto, required to be supplied
to a taxing authority in connection with or relating to Taxes.
3.9 Compliance with Laws. Except as set forth on Section 3.9 of
the Company Disclosure Schedule, each of the Company and its subsidiaries is in
compliance with all applicable laws, statutes, orders, rules, regulations,
policies or guidelines promulgated, or judgments, decisions or orders entered,
by any Governmental Authority (collectively, "Applicable Law") relating to it
or its business or properties, except for any such failures to be in compliance
therewith which, in the aggregate, would not have a material adverse effect on
the Company. Except as set forth in Section 3.9 of the Company Disclosure
Schedule, no investigation or review by any Governmental Authority with respect
to the Company or any of its subsidiaries is pending or, to the knowledge of
the Company, threatened.
3.10 Litigation. Except as set forth on Section 3.10 of the
Company Disclosure Schedule, there is no suit, claim, action, proceeding or
investigation (an "Action") pending or, to the knowledge of the Company,
threatened against the Company, any of its subsidiaries or any of their
respective properties which, if decided adversely, would, individually or in
the aggregate, have a material adverse effect on the Company or would prevent
or delay in any material respect the consummation of the transactions
contemplated hereby. Neither the Company nor any of its subsidiaries is subject
to any outstanding order, writ, injunction or decree which, individually or in
the aggregate, would have a material adverse effect on the Company or would
prevent or delay in any material respect the consummation of the transactions
contemplated hereby. There is no action, suit, or proceeding pending, or to the
knowledge of the Company, threatened against the Company that questions the
validity of this Agreement or any action taken or to be taken by the Company in
connection with this Agreement.
3.11 Employee Benefit Plans.
(a) For purposes of this Agreement, the following terms have the
definitions given below:
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"Controlled Group Liability" means any and all liabilities under
(i) Title IV of ERISA, (ii) section 302 of ERISA, and (iii) sections 412
and 4971 of the Code, in each case other than pursuant to the Company
Plans (as defined below).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations thereunder.
"ERISA Affiliate" means, with respect to any entity, trade or
business, any other entity, trade or business that is a member of a
group described in Section 414(b), (c), (m) or (o) of the Code or
Section 4001(b)(1) of ERISA that includes the first entity, trade or
business, or that is a member of the same "controlled group" as the
first entity, trade or business pursuant to Section 4001(a)(14) of
ERISA.
"Company Plans" means all employee benefit plans, programs,
voluntary employee benefit arrangements, policies, practices, and other
arrangements providing benefits to any employee or former employee or
beneficiary or dependent thereof, whether or not written, and whether
covering one person or more than one person, sponsored or maintained by
the Company or any of its subsidiaries or to which the Company or any of
its subsidiaries contributes or is obligated to contribute. Without
limiting the generality of the foregoing, the term "Company Plans"
includes all employee welfare benefit plans within the meaning of
Section 3(1) of ERISA and all employee pension benefit plans within the
meaning of Section 3(2) of ERISA.
(b) Section 3.11(b) of the Company Disclosure Schedule lists all
Company Plans. With respect to each Company Plan, the Company has made
available to Parent and Sub a true, correct and complete copy of: (i) each
writing constituting a part of such Company Plan, including without limitation
all plan documents, benefit schedules, actuarial reports, valuation statements,
trust agreements, insurance contracts and other funding vehicles; (ii) the last
two (2) annual Forms 5500, 990 and 1041 reports and accompanying schedules, as
filed with the Internal Revenue Service; (iii) the current summary plan
description, if any; (iv) the most recent annual financial report, if any; (v)
the most recent determination letter from the Internal Revenue Service, if any;
and (vi) all other correspondence from the Internal Revenue Service or
Department of Labor received which relates to any Company Plan ever sponsored,
maintained or acquired by the Company or an ERISA Affiliate.
(c) The Internal Revenue Service has issued a favorable
determination letter with respect to each Company Plan that is intended to be a
"qualified plan" within the meaning of Section 401(a) of the Code (a "Qualified
Company Plan") and, to the Company's knowledge, there are no existing
circumstances nor any events that have occurred that would adversely affect the
qualified status of any Qualified Company Plan or the related trust.
(d) All contributions required to be made to any Company Plan by
Applicable Law or by any plan document or other contractual undertaking, and
all premiums due or payable
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with respect to insurance policies funding any Company Plan, for any period
through the date hereof have been timely made or paid in full and through the
Closing Date will be timely made or paid in full or, to the extent not required
to be made or paid on or before the date hereof or the Closing Date, as
applicable, have been or will be properly reflected in the Company's financial
statements contained in the Company SEC Documents in accordance with generally
accepted accounting principles.
(e) Except as set forth in Section 3.11(e) of the Company Disclosure
Schedule, the Company and its subsidiaries have complied, and are now in
compliance, in all material respects, with all provisions of ERISA, the Code
and all laws and regulations applicable to the Company Plans, including the
timely filing of all required reports and disclosures and the timely delivery
of all information and communications to employees during every year of
existence. To the Company's knowledge, there are no existing circumstances that
would give rise to any requirement for the posting of security with respect to
a Company Plan or the imposition of any lien on the assets of the Company or any
of its subsidiaries under ERISA or the Code.
(f) Except as set forth in Section 3.11(f) of the Company
Disclosure Schedule, no Company Plan is subject to Title IV or Section 302 of
ERISA or Section 412 or 4971 of the Code. No Company Plan is a "multiemployer
plan" within the meaning of Section 4001(a)(3) of ERISA (a "Multiemployer
Plan"), or a plan that has two or more contributing sponsors at least two of
whom are not under common control, within the meaning of Section 4063 of ERISA
(a "Multiple Employer Plan"), nor has the Company or any of its subsidiaries
or any of their respective ERISA Affiliates, at any time within five years
before the date hereof, contributed to or been obligated to contribute to any
Multiemployer Plan or Multiple Employer Plan.
(g) To the Company's knowledge there are no existing circumstances
that would result in any Controlled Group Liability that would be a liability
of the Company or any of its subsidiaries following the Closing, other than
normal funding responsibilities. Without limiting the generality of the
foregoing, neither the Company nor any of its subsidiaries nor any of their
respective ERISA Affiliates has engaged in any transaction described in Section
4069 or Section 4204 of ERISA. The Company Plans have not engaged in any
transactions described in Sections 406 or 407 of ERISA not exempt under ERISA
Section 408, or any transaction described in Section 4975 of the Code which
was not exempt under Code Section 4975.
(h) Except as set forth in Section 3.11(h) of the Company
Disclosure Schedule and except for health continuation coverage as required by
Section 4980B of the Code or Part 6 of Title I of ERISA, neither the Company
nor any of its subsidiaries has any liability for post-employment life, health,
medical or other welfare benefits under any Company Plan (excluding claims
incurred but not paid on or before termination of employment) to former
employees or beneficiaries or dependents thereof.
(i) Except as set forth in Section 3.11(i) of the Company
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will result in, cause
the accelerated vesting or delivery of, or increase the amount or value of, any
payment or benefit to any employee or director or former employee or
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former director of the Company or any of its subsidiaries, pursuant to a
"change in control" or "change of control" or otherwise.
(j) Except as set forth in Section 3.11(j) of the Company
Disclosure Schedule, there are no pending or, to the Company's knowledge,
threatened claims (other than claims for benefits in the ordinary course),
lawsuits or arbitrations which have been asserted or instituted against the
Company Plans, any fiduciaries thereof with respect to their duties to the
Company Plans or the assets of any of the trusts under any of the Company Plans
which would result in any material liability of the Company or any of its
subsidiaries to the Pension Benefit Guaranty Corporation, the Department of
Treasury, the Department of Labor or any Multiemployer Plan.
3.12 Contracts. Section 3.12 of the Company Disclosure Schedule
sets forth an accurate list of any of the following to which the Company or any
of its subsidiaries is a party or by which any of them or their properties or
assets may be bound; (i) any contract, commitment or agreement involving a
partnership, joint venture or similar arrangement; (ii) any contract,
commitment or agreement in which rights or obligations change upon the
consummation of the transactions contemplated by this Agreement; (iii) any
secrecy, non-compete or other agreement which (A) restricts the right of the
Company, its subsidiaries or any of its officers or employees to engage in any
type of business or activity after the consummation of the transactions
contemplated by this Agreement or (B) would restrict in any manner the right of
Parent or any of its subsidiaries to engage in any type of business or activity
after the consummation of the transactions contemplated by this Agreement; and
(iv) all written employment agreements, employment contracts or, to the
knowledge of the Company, understandings (other than the general employment of
employees pursuant to an at-will understanding) relating to employment to which
the Company or any of its subsidiaries is a party. The Company has made
available to Parent complete and correct copies of all contracts referred to in
the immediately preceding sentence. Section 3.12 of the Company Disclosure
Schedule also sets forth a true and correct list of all contracts with the top
twenty customers of the Company measured by revenues received from such
customers by the Company during the fiscal year ended June 30, 1997.
3.13 No Default. None of the Company or any of its subsidiaries is
in default or violation (and no event has occurred which with notice or the
lapse of time or both would constitute a default or violation) of any term,
condition or provision of (i) its Certificate of Incorporation or Bylaws (or
similar governing documents), (ii) any note, bond, mortgage, indenture, lease,
license, contract, agreement, guarantee or other instrument, obligation or
executory commitment (each a "Contract") to which the Company or any of its
subsidiaries is now a party or by which any of them or any of their respective
properties or assets may be bound or (iii) any order, writ, injunction, decree,
law, statute, rule or regulation applicable to the Company, any of its
subsidiaries or any of their respective properties or assets, except in the
case of (ii) or (iii) for violations, breaches or defaults that would not,
individually or in the aggregate, have a material adverse effect on the
Company. To the knowledge of the Company, no other party to any Contract is in
default or violation of any Contract.
3.14 Permits. Each of the Company and its subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents,
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certificates, approvals and orders (collectively, "Permits") necessary to own,
lease and operate its properties and to carry on its business as it is now
being conducted, and the Company and its subsidiaries are in compliance with
the terms of the Permits, except for any such Permits the failure of which to
possess or be in compliance with, individually or in the aggregate, would not
have a material adverse effect on the Company.
3.15 Environmental Matters.
(a) Except as disclosed in the applicable subsection of Section
3.15 of the Company Disclosure Schedule, (i) the Company and each of its
subsidiaries and each of their businesses, operations and Properties comply
with all Environmental Laws, except where the failure to be in compliance would
not, individually or in the aggregate, have a material adverse effect on the
Company; (ii) the Company and each of its subsidiaries have obtained all
Environmental Permits necessary for the ownership and operation of their
respective businesses, operations and Properties, and all such Environmental
Permits are in good standing and are not the subject of any modification or
revocation proceeding, and the Company and each of its subsidiaries are in
compliance with all terms and conditions of such Environmental Permits, and to
the Company's knowledge, all such Environmental Permits are valid, except
where the failure to obtain such Environmental Permit or be in compliance
therewith would not, individually or in the aggregate, have a material adverse
effect on the Company; (iii) neither the Company nor any of its subsidiaries nor
any of their businesses, operations or Properties is the subject of any
outstanding written order, judgment, writ, decree, injunction, citation,
directive, or summons of, or agreement or settlement with, any Governmental
Authority or other person respecting (A) any alleged or asserted violation of or
noncompliance with Environmental Laws, (B) any Remedial Actions, or (C) any
Environmental Claims arising from the Release or threat of Release of a
Contaminant; (iv) neither the Company nor any of its subsidiaries is a party,
defendant or respondent in any pending judicial or administrative proceeding
alleging a violation of any Environmental Law, or asserting any Environmental
Claim arising from the Release or threat of Release of a Contaminant or relating
to any Remedial Action; (v) to the Company's knowledge none of the businesses,
operations or Properties of the Company or any of its subsidiaries is the
subject of any investigation by any Governmental Authority (other than periodic
and ordinary inspections) evaluating any alleged or asserted violation of or
noncompliance with any Environmental Law, including, without limitation, a
determination whether any Remedial Action is needed with respect to a Release or
threatened Release of any Contaminant; (vi) neither the Company nor any
subsidiary of the Company has filed any written notice under any Environmental
Law indicating past or present treatment, storage or disposal of a hazardous
water or solid waste or reporting a spill or Release of a Contaminant into the
environment under any Environmental Law, (vii) to the Company's knowledge,
neither the Company nor any subsidiary of the Company has any contingent
liability in connection with any Release or threat of Release of any Contaminant
at any location; (viii) neither the Company nor any subsidiary of the Company
has received any written notice or claim or is otherwise aware of any notice or
claim concerning (A) any alleged violation of Environmental Law, (B) any alleged
liability of the Company or any of its subsidiaries for any Environmental Claim,
or (C) any alleged liability of the Company or any of its subsidiaries arising
out of or related to the Release or threat of Release of a Contaminant at any
location; (ix) neither the Company nor any of its subsidiaries has engaged in
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or permitted any generation, storage, transportation, treatment, recycling,
reclamation, handling, use or disposal of any Contaminant, except in compliance
with Environmental Laws; (x) neither the Company nor any of its subsidiaries
has disposed of or released any Contaminant at any of its Properties and, to
the Company's knowledge, neither has any prior owner or operator or other
person; (xi) none of the Company's or any of its subsidiaries' properties
contain, or, to the Company's knowledge, have ever contained, any underground
storage tanks, surface impoundments, asbestos-containing materials or
polychlorinated biphenyls; (xii) no Environmental Lien in favor of any
Governmental Authority has been filed or attached to any of the Properties and,
to the Company's knowledge, there are no conditions or facts in existence that
with the passage of time could give rise to the filing or attachment of such an
Environmental Lien; (xiii) none of the Properties is listed or proposed for
listing on the National Priorities List ("NPL") pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act or any similar state or
foreign list of sites, or on the Comprehensive Environmental Response
Compensation and Liability Information System List ("CERCLIS") or any similar
state or foreign list of sites; (xiv) to the Company's knowledge, no Contaminant
has migrated from any of the Properties onto or underneath other properties, nor
has any Contaminant migrated from other properties upon, about or beneath any of
the Properties; (xv) neither the Company nor any of its Subsidiaries has
received or is otherwise aware of any written notice, claim or other
communication alleging liability on the part of the Company or any of its
Subsidiaries, and to the Company's knowledge, neither the Company nor any of its
Subsidiaries has any liability, for the violation of any Environmental Law, for
any Environmental Claim, or for the Release or threatened Release of any
Contaminant in connection with any businesses, operations or properties
previously owned or operated by the Company or any of its Subsidiaries or any
predecessors thereto.
(b) Prior to the Closing Date, the Company and its subsidiaries shall
have complied fully with all Environmental Notice Requirements, and any related
Environmental Permits shall have been issued, except where the failure to so
comply or to have obtained such Environmental Permits would not, individually or
in the aggregate, have a material adverse effect on the Company.
(c) There is no financial responsibility requirement issued by any
Governmental Authority pursuant to 42 U.S.C. 6991b(c)(6) or any state or local
equivalents applicable to the businesses, operations or Properties of the
Company and each of its Subsidiaries.
"Contaminant" means those substances, materials, articles and items, in
any form, whether solid, liquid, gaseous, semisolid or any combination thereof,
whether waste materials, raw materials, chemicals, finished products,
by-products or any other substance, material, article or item, which are
regulated by or form the basis of liability under any applicable Environmental
Law, including, without limitation, hazardous wastes, hazardous substances,
pollutants, contaminants, toxic substances, infectious waste, medical waste,
special waste, asbestos, polychlorinated biphenyls, petroleum (including, but
not limited to, crude oil, petroleum-derived substances, waste or breakdown or
decomposition products thereof or any fraction thereof) and radioactive
substances.
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"Environmental Claim" means any written notice of violation (including,
without limitation, any notice of expenditures necessary to come into
compliance with or maintain compliance with, any Environmental Law or
Environmental Permit), claim (whether based on strict liability or otherwise),
judgment, encumbrance, lien, settlement, citation, demand, abatement, order or
direction (conditional or otherwise) by any Governmental Authority or other
person for personal injury or death, toxic tort, tangible or intangible
property damage, damage to the environment, trespass, damage to natural
resources, nuisance pollution, contamination or other adverse effects on the
environment, or for fines, penalties or prohibitions, arising out of, related
to, resulting from or based upon (a) the existence, or the continuation of the
existence, of a Release or a threatened Release of any Contaminant, odor or
audible noise, (b) the environmental aspects of the transportation, storage,
treatment, disposal, generation, recycling, reclamation, use or handling of any
Contaminants or other materials in connection with the businesses, operations
or properties, or (c) the violation, or alleged violation, of any Environmental
Law by the Company or any of its subsidiaries.
"Environmental Damages" means all claims, judgments, damages (including
punitive damages), losses, penalties, fines, interest, fees, liabilities
(including strict liability), encumbrances, liens, costs, and expenses of
investigation and defense of any Environmental Claim, whether or not such
Environmental Claim is ultimately defeated, and of any good faith settlement or
judgment, of whatever kind or nature, contingent or otherwise, matured or
unmatured, foreseeable or unforeseeable, including, without limitation,
reasonable attorneys' fees and disbursements and consultants' fees, any of
which are incurred at any time as a result of the existence of Contaminants or
noncompliance with any Environmental Law.
"Environmental Laws" means all applicable federal, state, local or
foreign laws, statutes, codes, ordinances, rules, regulations, Environmental
Permits, judgments, orders, decrees or settlements relating to the environment,
natural resources, safety, health or the regulation of contaminants, including,
without limitations, the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. Section 9601 et seq.) ("CERCLA"), the Hazardous
Material Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) ("RCRA"), the
Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act, as amended (15 U.S.C.
Section 2601 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. Section 136 et seq.), the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. Section 11001 et seq.), the Safe Drinking Water
Act (42 U.S.C. Section 201 and Section 300f et seq.), The Rivers and Harbors
Act (33 U.S.C. Section 401 Section et seq.), The Oil Pollution Act (33 U.S.C.
Section 2701 et seq.), and the Occupational Safety and Health Act (29 U.S.C.
Section 651 et seq.), as such laws, statutes, codes, ordinances, rules,
regulations, Environmental Permits, judgments, orders, decrees, and settlements
have been and may be amended or supplemented from time to time, and any
analogous future enacted or adopted federal, state, local, or foreign laws,
statutes, codes, ordinances, rules, regulations, Environmental Permits,
judgments, orders, decrees and settlements.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (i) liability under Environmental Laws or (ii) damages arising
from, or costs incurred by such Governmental Authority in response to, a
Release or threatened Release of a Contaminant.
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"Environmental Notice Requirements" means requirements under any
Environmental Law which are applicable to the transactions contemplated by this
Agreement and which require notification, registration or filing of information
pertaining to such transactions, the Properties, and/or the parties to such
transactions, to or with any governmental authority or Parent, including,
without limitation, any Environmental Permit transfer or modification
requirements and any so-called "environmental cleanup responsibility acts."
"Environmental Permit" means any permit, approval, authorization,
registration, license, variance or permission required from a Governmental
Authority having jurisdiction under an applicable Environmental Law.
"Properties" means all real or personal property of any kind or
description presently owned, leased, operated or under the control of the
Company or any of its subsidiaries.
"Release" means any release, spill, emission, leaking, pumping,
emptying, dumping, injection, abandonment, deposit, disposal, discharge,
dispersal, leaching or migration of any Containment (including, but not limited
to, the abandonment or discarding of Contaminants in barrels, drums or other
containers) into the indoor or outdoor environment or into or out of any real
property, including the movement of Contaminants, into, under, on, through or
in the air, soil, subsurface strata, surface water, groundwater, drinking water
supply, any sediments associated with any water bodies or any other
environmental medium.
"Remedial Action" means all actions required to: (i) clean up, remove,
treat, dispose of or in any way remediate or undertake corrective action with
respect to Contaminants in the indoor or outdoor environment; (ii) prevent,
mitigate or minimize the Release or threat of Release of Contaminants; or (iii)
perform pre-remedial studies and investigations and post-remedial monitoring
and care in respect of actions contemplated in the preceding clauses (i) and
(ii).
3.16 No Undisclosed Liabilities. Except as and to the extent
disclosed in the Company SEC Documents or on the consolidated balance sheet of
the Company and its subsidiaries attached to Section 3.7 of the Company
Disclosure Schedule, as of June 30, 1997, neither the Company nor any of its
subsidiaries had any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, that would be required by generally accepted
accounting principles to be reflected on a consolidated balance sheet of the
Company and its subsidiaries (including the notes thereto). Except as and to
the extent disclosed in the Company SEC Documents or no the consolidated
balance sheet of the Company and its subsidiaries attached to Section 3.7 of
the Company Disclosure Schedule, since June 30, 1997, neither the Company nor
any of its subsidiaries has incurred any liabilities of any nature, whether or
not accrued, contingent or otherwise, having or which would have, and there
have been no events, changes or effects with respect to the Company and its
subsidiaries having or which would have, in either case individually or in the
aggregate, a material adverse effect on the Company.
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3.17 Corporate Records. The minute books of the Company and its
subsidiaries accurately reflect in all material respects all actions taken to
this date by the stockholders, board of directors and committees of the board
of directors of the Company and its subsidiaries. The stock certificate books
and records of the Company and its subsidiaries accurately reflect on the date
hereof and will accurately reflect as of the Effective Time the ownership of
the capital stock of the Company and its subsidiaries.
3.18 Accounting Records. The Company and its subsidiaries maintain
accounting records which fairly and validly reflect, in all material respects,
their transactions and maintain accounting controls sufficient to provide
reasonable assurances that such transactions are, in all material respects, (i)
executed in accordance with management's general or specific authorization and
(ii) recorded as necessary to permit the preparation of financial statements in
conformity with generally accepted accounting principles (except that the
Company's investment in Services is carried at historical rates).
3.19 Brokers. No broker, finder, investment banker or financial
advisor is entitled to any brokerage, finder's, or other fee or commission
payable by the Company in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company or any of
its subsidiaries, except for (i) the fee specified in the Xxxxx Muse
Termination Agreement (as hereinafter defined) and (ii) the fee payable to
Chase Securities, Inc. for rendering a fairness opinion to the Board of
Directors of the Company in connection with the transactions contemplated
hereby, which fee will not be in excess of $50,000 (plus reimbursement of
reasonable expenses).
3.20 Properties
(a) Section 3.20(a) of the Company Disclosure Schedule contains a
complete and correct list of all real property owned or leased by the Company
or any subsidiary of the Company (the "Real Properties"). Each of the Company
and its subsidiaries has good fee or leasehold title to the Real Property.
Except as set forth in the title insurance policies listed in Section 3.20(a)
of the Company Disclosure Schedule, no Real Property owned by the Company or
any of its subsidiaries is subject to any claims, liens, or encumbrances whether
by mortgage, pledge, lien, conditional sales agreement, charge or otherwise,
except for those which, individually or in the aggregate, would not have a
material adverse effect on the Company. Except as set forth in Section 3.20(a)
of the Company Disclosure Schedule, there is no contract, agreement,
arrangement or obligation of any kind with any person or entity regarding the
Real Property or the development, management or operation thereof.
(b) The Company has previously made available to Parent complete
and correct copies of each lease to which the Company or any of its
subsidiaries is a party or any of their properties are bound providing for
payments of at least $40,000 per year. A complete and correct list of each
such material lease is set forth in Section 3.20(b) of the Company Disclosure
Schedule. All of such material leases are valid and subsisting and in full
force and effect with respect to the Company and its subsidiaries and, to the
Company's knowledge, with respect to any other party thereto.
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3.21 Insurance. Section 3.21 of the Company Disclosure Schedule
sets forth a complete and correct list of all insurance policies currently in
force insuring against risks of the Company and its subsidiaries, and the
Company has previously made available to Parent copies of the directors and
officers insurance policy maintained by the Company for the fiscal year ending
June 30, 1998 and, with respect to the other policies listed on Section 3.21 of
the Company Disclosure Schedule, has previously made available to Parent true
and correct schedules listing the name of carrier, policy coverage, policy
limits and deductibles. The Company and its subsidiaries are in compliance
with the terms of such policies and there are no claims by the Company or any
of its subsidiaries under any such policy as to which any insurance company is
denying liability or defending under a reservation of rights clause.
3.22 Intellectual Property.
(a) The Company and its subsidiaries own or have the right to use
pursuant to license, sublicense, agreement, or permission all Intellectual
Property (as hereinafter defined) necessary for the operation of the businesses
of the Company and its subsidiaries as presently conducted and as presently
proposed to be conducted. Each item of Intellectual Property owned or used by
any of the Company and its subsidiaries in the Company's and its subsidiaries'
business immediately prior to the Effective Time will be owned or available for
use by the Surviving Corporation on identical terms and conditions immediately
subsequent to the Effective Time. To the knowledge of the Company, the Company
and its subsidiaries have taken all necessary action to maintain and protect
each item of Intellectual Property that the Company and its subsidiaries own or
use. Neither the Company nor any of its subsidiaries has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and to the knowledge of the
Company there has never been any charge, complaint, claim, demand, or notice
alleging any such interference, infringement, misappropriation, or violation
(including any claim that the Company or any of its subsidiaries must license
or refrain from using any Intellectual Property rights of any third party). To
the knowledge of the Company, no third party has interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any Intellectual
Property rights of the Company or its subsidiaries. "Intellectual Property"
shall mean the entire right, title and interest in and to all proprietary
rights of every kind and nature, including patents, patent applications,
registered and unregistered copyrights, registered and unregistered trademarks
and service marks, computer programs and databases, trade secrets and
proprietary information.
(b) Section 3.22(b) of the Company Disclosure Schedule sets forth
each patent, trademark or copyright registration which has been issued to the
Company or its subsidiaries with respect to any of their Intellectual Property,
each pending patent application or application for registration which the
Company and its subsidiaries have made with respect to any of their
Intellectual Property, and each license, agreement, or other permission which
the Company and its subsidiaries have granted to any third party with respect
to any of their Intellectual Property. Section 3.22(b) of the Company
Disclosure Schedule also sets forth each trade name and unregistered trademark
used by the Company and its subsidiaries in connection with their businesses.
With respect to each item of Intellectual Property required to be disclosed
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pursuant to this Section 3.22(b): (i) the Company and its subsidiaries possess
all right, title, and interest in and to the item, free and clear of any lien,
license, or other restriction; (ii) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge; (iii) no action, suit,
proceeding, hearing, interference, opposition, re-issue, re-examination,
investigation, charge, complaint, claim, or demand is pending or, to the
knowledge of the Company, threatened which challenges the legality, validity,
enforceability, scope, use, or ownership of the item; and (iv) neither the
Company nor any of its subsidiaries has agreed to indemnify any person or
entity for or against any interference, infringement, misappropriation, or
other conflict with respect to the item.
(c) Section 3.22(c) of the Company Disclosure Schedule sets forth
each item of Intellectual Property that any third party owns and that the
Company and its Subsidiaries use or Intellectual Property that the Company or
its subsidiaries have less than full ownership interests in pursuant to
license, sublicense, agreement, or permission, other than any item of
Intellectual Property licensed or sublicensed or used pursuant to an agreement
between Parent and a third party and used by parent in connection with the
connection with the performance of information technology services for the
Company. The Company has made available to Parent correct and complete copies
of all such licenses, sublicenses, agreements, and permissions (as amended to
date). With respect to each item, (i) the relevant license, sublicense,
agreement, or permission covering the item is legal, valid, binding,
enforceable, and in full force and effect and will continue to be legal, valid
binding, enforceable, and in full force and effect on identical terms following
the consummation of the Merger; (ii) to the knowledge of the Company, the
underlying item of Intellectual Property is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge; and (iii) no action,
suit, proceeding, hearing, interference, opposition, reissue, re-examination,
investigation, charge, complaint, claim, or demand is pending or, to the
knowledge of the Company, threatened, against the Company or any subsidiary
which challenges the legality, validity, scope, use, ownership or
enforceability of the underlying item of Intellectual Property.
(d) The Company shall not be deemed to be in breach of any
representation or warranty in this Section 3.22 if such breach arises from a
breach by Parent of its obligations under the Agreement for Information
Technology Services dated January 1, 1995 between Parent and Services.
3.23 Labor Matters. Except as set forth in Section 3.23 of the
Company Disclosure Schedule, neither the Company nor any of its subsidiaries is
a party to, or is currently negotiating, any collective bargaining or other
labor union contract applicable to any person employed by the Company or its
subsidiaries. Except as set forth in Section 3.23 of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries has experienced any
labor dispute, strike or work stoppage since January 1, 1993, and there is no
pending or, to the Company's knowledge, threatened labor dispute, strike or
work stoppage against the Company or any subsidiary of the Company. Neither
the Company nor its subsidiaries, nor their respective representatives or
employees, has committed any unfair labor practices in connection with the
operation of the respective businesses of the Company or its subsidiaries, and
there is no pending, or to the knowledge of the Company threatened, charge or
complaint against the Company or its subsidiaries by the National Labor
Relations Board or any comparable state or foreign agency.
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The Company and its subsidiaries are in material compliance with all applicable
laws respecting employment, consulting, employment practices, wages, hours and
terms and conditions of employment. Except as set forth on Section 3.23 of the
Company Disclosure Schedule, neither the Company nor any of its subsidiaries
has had a "Plant closing" or "mass layoff" within the meaning of the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. Sections 2101 et seq.
3.24 Bank Accounts. Section 3.24 of the Company Disclosure Schedule
sets forth a complete and correct list of (i) the name and address of each bank
in which the Company or any subsidiary of the Company has an account or safe
deposit box and the names of all persons authorized to draw thereon or to have
access thereto and (b) the names of all persons, if any, holding powers of
attorney (including, without limitation, with respect to tax matters) from the
Company or any subsidiary of the Company and a summary of the terms thereof.
3.25 Projections. Certain projections for Services' consolidated
operations for each month from July through December 1997 are attached hereto
as Section 3.25 of the Company Disclosure Schedule (the "Projections"). The
Projections were prepared in good faith and consistent with past practices. All
assumptions on which the Projections are based were determined in accordance
with past practices. The Company believes that all such stated assumptions were
reasonable when made and continue to be reasonable. the Projections were not
prepared with a view to public disclosure and do not purport to present
financial condition or results of operations in accordance with generally
accepted accounting principles. The Projections have not been audited, compiled
or otherwise examined by independent accountants. The Projections reflect
numerous assumptions, many of which are beyond the control of the Company.
Accordingly, there can be no assurance that the assumptions made in preparing
the Projections will prove to be accurate, and actual results may be materially
greater or less than those contained in the Projections.
3.26 Related Party Transactions. Except as listed in Section 3.26 of
the Company Disclosure Schedule, since June 30 1996 there have been no material
transactions between the Company and any of its subsidiaries, on the one hand,
and any (i) officer or director of the Company or any of its subsidiaries, (ii)
record or beneficial owner of five percent or more of any class of equity
securities of the Company, or (iii) affiliated (as such term is defined in
Regulation 12b-2 promulgated under the Exchange Act) of any such officer,
director or beneficial owner, on the one hand, other than transactions with
Parent and any of its subsidiaries, any payments under the Xxxxx Muse Advisory
Agreement (as hereinafter defined) or the Wand Advisory Agreement (as
hereinafter defined), and payment of compensation for services rendered to the
Company or any of its subsidiaries pursuant to the employment arrangements
listed in Section 3.12 of the Company Disclosure Schedule as in effect on the
date hereof.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
In order to induce the Company to enter into this Agreement,
Parent and Sub, jointly and severally, hereby represent and warrant to the
Company that the statements contained in this Article IV are true, correct and
complete.
4.1 Organization and Standing. Each Parent and Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware with full power and authority to own, lease, use and
operate its properties and to conduct its business as and where now owned,
leased, used, operated and conducted.
4.2 Corporate Power and Authority. Each of Parent and Sub
has full corporate power and authority to execute and deliver this Agreement
and to perform the transactions contemplated hereby to be performed by it. The
execution and delivery of this Agreement by Parent and Sub and the consummation
by Parent and Sub of the transactions contemplated hereby to be performed by it
have duly and validly approved by the Board of Directors of Parent and Sub and
no other corporate proceedings with respect to Parent and Sub are necessary to
approve this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by each of Parent and Sub
and, assuming the due execution and delivery of this Agreement by the other
parties hereto, constitutes a valid and binding obligation of Parent and Sub
enforceable against them in accordance with its terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights in general and subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
4.3 Conflicts; Consents and Approvals. Neither the
execution and delivery of this Agreement by Parent or Sub nor the consummation
of the transactions contemplated hereby will:
(a) conflict with, or violate any provision of, the
Certificate of Incorporation or Bylaws of Parent and Sub;
(b) violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with the
giving of notice, the passage of time or otherwise, would constitute a
default) under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, contract,
undertaking, agreement, lease or other instrument or obligation to
which Parent, Sub or any of their subsidiaries is a party or by which
any of their respective properties or assets may be bound;
(c) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Parent or Sub or any of their
properties or assets; or
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(d) require any action or consent or approval of, or review by, or
registration or filing by Parent, Sub or any of their affiliates with, any
third party or any Governmental Authority, other than (i) actions required
by the HSR Act and (ii) the filing and recordation of the Certificate of
Merger as required by the DGCL;
except, in the case of (b), (c) and (d), for any of the foregoing that would
not, in the aggregate, have a material adverse effect on Parent or Sub or that
would not prevent or delay in any material respect the consummation of the
transactions contemplated hereby.
4.4 Litigation. There is no action, suit, or proceeding pending
or, to the knowledge of Parent or Sub, threatened against Parent or Sub that
questions the validity of this Agreement or any action taken or to be taken by
Parent or Sub in connection with this Agreement.
ARTICLE V
COVENANTS OF THE PARTIES
The parties hereto agree as follows with respect to the period from and
after the execution of this Agreement until the Effective Time.
5.1 Mutual Covenants.
(a) General. Each of the parties shall use its reasonable efforts
to take all actions and to do all things necessary, proper or advisable to
consummate the transactions contemplated by this Agreement as promptly as
possible (including, without limitation, using its reasonable efforts to cause
the conditions set forth in Article VI for which they are responsible to be
satisfied as soon as reasonably practicable and to prepare, execute and deliver
such further instruments and take or cause to be taken such other and further
action as any other party hereto shall reasonably request).
(b) HSR Act. As soon as practicable, and in any event no later
than two business days after the date hereof, each of the parties hereto will
file any Notification and Report Forms and related material required to be
filed by it with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice under the HSR Act with respect to the
transactions contemplated hereby.
(c) Other Governmental Matters. Each of the parties shall use its
reasonable efforts to take any additional action that may be necessary, proper
or advisable in connection with any other notices to, filings with, and
authorizations, consents and approvals of, any Governmental Authority that it
may be required to give, make or obtain.
(d) Notification of Certain Matters. Each of the parties shall
give prompt notice to the other parties of (i) the occurrence or non-occurrence
of any event the occurrence or
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non-occurence of which would cause any representation or warranty contained in
this Agreement made by such party to be untrue or inaccurate at or prior to the
Closing Date, except to the extent such representations and warranties speak as
of an earlier date, and (ii) any material failure of such party to comply with
or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder, provided, however, that the delivery of any notice
pursuant to this Section 5l(d) shall not limit or otherwise affect the
remedies available hereunder to any party.
(e) Termination of Securityholders Agreement. Simultaneously with the
Closing, Parent and the Company shall cause the Securityholders Agreement, dated
as of November 28, 1994, among the Company, HM/Neodata, L.P., HM/Neodata DBMS,
L.P. and Parent (the "Securityholders Agreement") to be terminated pursuant to
the provisions of the First Amendment to Securityholders Agreement in the form
of Exhibit A hereto (the "Securityholders Agreement Amendment").
(f) Public Statements. The parties shall consult with each other prior
to issuing any public statement or announcement with respect to this Agreement
or the transactions contemplated hereby and shall not issue any such public
statement or announcement prior to such consultation and without consent of the
other party, which shall no be unreasonably withheld, except that any party may
issue such a public statement or announcement prior to such consultation if and
to the extent required by law or any listing agreement with a national
securities exchange or any other similar regulatory bodies, in which case such
party shall use its best efforts to consult with the other parties prior to
issuing such public statement or announcement.
5.2 Covenants of the Company.
(a) Access. From and after the date of this Agreement until the
Closing Date (or the termination of this Agreement), the Company shall permit
representatives of Parent and Sub to have reasonable access to the Company's
officers, employees, premises, properties, books, records, financial and
operating data, contracts, tax records and documents. Without limiting the
foregoing, during such period, to the extent permitted by applicable law, one
or more representatives of Parent (a "Parent Representative") shall be permitted
to relocate to the Company's principal executive offices and/or such other
facilities of the Company and its subsidiaries as Parent shall deem necessary.
Management of the Company shall cooperate with such representatives of Parent
and shall offer to include such representatives in all material decisions,
actions or meetings regarding the management of the Company and its
subsidiaries. During the period from the date hereof to the Effective Time, the
Company shall notify Parent of any material change in the normal course of the
Company's business. During such period, the Company shall promptly furnish to
Parent all monthly or other interim financial information regarding the
Company's or Services' consolidated financial position or results of operations
as soon as practicable following the availability of such information. The
representations and warranties of the Company contained herein or in any
certificate or other document delivered to Parent or Sub shall not be deemed
waived or otherwise affected by any such investigation made by Parent or any of
its representatives.
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(b) Conduct of the Company's Operations. During the period from the
date of this Agreement to the Closing Date, the Company shall, and shall cause
its subsidiaries to, conduct its operations in the ordinary course, except as
expressly contemplated by this Agreement or authorized by Parent or a Parent
Representative (which authorization shall be proven by clear and convincing
evidence), and shall use its commercially reasonable best efforts to maintain
and preserve its business organization and its material rights and franchises
and to retain the services of its officers and key employees and maintain
satisfactory relationships with customers, suppliers and other third parties,
and to perform in all material respects all of its obligations under all
contracts and agreements to which it is a party to by which any of its assets
or properties are bound, to the end that their goodwill and ongoing business
shall not be impaired in any material respect. Notwithstanding the immediately
preceding sentence, prior to the Closing Date, except as may be authorized by
Parent or a Parent Representative (which authorization shall be proven by clear
and convincing evidence), neither the Company nor any subsidiary of the company
shall (i) take any action that would result in any of the Company's
representations or warranties set forth in this Agreement not being true or in
any of the conditions to the Merger set forth in Article 7 not being satisfied;
(ii) amend or propose to amend its Certificate of Incorporation or Bylaws;
(iii) increase in any manner the compensation or fringe benefits (including,
but not limited to, severance benefits) payable or to become payable to any
director, officer, employee, independent contractor (except for increases in
salary to non-officer employees in the ordinary course of business in
accordance with pre-established bonus targets and performance goals) or amend
or enter into any employment agreement with any present or future officer or
employee (except for the Amendments to Employment Agreements referred to in
Section 6.2(i) hereof), provided, however, that Parent acknowledges that the
creation of employment rights under applicable law in connection with the
hiring by the Company or a subsidiary of an employee in the ordinary course of
business in the absence of a written employment agreement shall not be deemed
to be prohibited by this clause; (iv) except pursuant to the exercise of
options or warrants existing on the date hereof and disclosed pursuant to this
Agreement and except for the conversion of Nonvoting Common Stock into common
Stock pursuant to the terms of the Company's Certificate of Incorporations,
issue any shares of capital stock, effect any stock split or otherwise change
its capitalization as it existed on the date hereof; (v) grant, confer or award
any option, warrant, conversion right or other right not existing on the date
hereof to acquire any shares of its capital stock; (vi) adopt any new employee
benefit plan or amend any existing employee benefit plan in any material
respect, other than the termination of option plans of the Company pursuant to
this Agreement; (vii) except for dividends declared by Services to the company
required for payment of the Promissory Note due 1998 of the company (as
successor to Neodata Books/Distribution/Holding, Inc.) dated June 26, 1991
payable to Xxxxxxxx Corporation in the original principal amount of $7,000,000
(the "Xxxxxxxx Note") in accordance with its terms, declare, set aside or pay
any dividend or make any other distribution or payment with respect to any
shares of its capital stock or directly or indirectly redeem, purchase or
otherwise acquire any shares of its capital stock or capital stock of any
subsidiary; (viii) sell, lease or otherwise dispose of any of its assets
(including capital stock of any subsidiary) which are material, individually
or in the aggregate, except in the ordinary course of business; or (ix) agree
to take any of the actions specified in this Section 5.2(b).
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(c) Discharge and termination of Subdebt Warrants and Bridge
Warrants. Prior to or simultaneously with the Closing, the Company shall
discharge and terminate (i) all of its obligations under the outstanding
Subdebt Warrants (as defined below) pursuant to a Subdebt Warrant Exercise
Agreement, to be dated as of the Closing Date, among the Company and the
holders of the Subdebt Warrants substantially in the form of Exhibit B hereto
(the "Subdebt Warrant Exercise Agreement") and (ii) all of its obligations
under the outstanding Bridge Warrants (as defined below) pursuant to a Bridge
Warrant Exercise Agreement, to be dated as of the Closing Date, among the
Company and the holders of the Bridge Warrants substantially in the form of
Exhibit C hereto (the "Bridge Warrant Exercise Agreement," and together with
the Subdebt Warrant Exercise Agreement, the "Warrant Exercise Agreements"). As
used herein, (i) the "Subdebt Warrants" means those certain Warrants to Acquire
Nonvoting Common Stock of Neodata Corporation, as amended, listed and described
under the heading "Subdebt Warrants" in Section 5.2(c) of the Company
Disclosure Schedule and (ii) the "Bridge Warrants" means those certain Warrants
to Acquire Common Stock of Neodata Corporation, as amended, listed and
described under the heading "Bridge Warrants" in Section 5.2(c) of the Company
Disclosure Schedule.
(d) Stock Options. Prior to the Closing, the Company shall cause
the 1990 Plan and the 1994 Plan to terminate as of the Effective Time and shall
cause the provisions in any other plan, program or arrangement providing for
the issuance or grant of any other interest in respect of the capital stock of
the Company to be canceled as of the Effective Time (the "Option Plan
Terminations"). The Company agrees to take all action necessary to ensure that
following the Effective Time no participant in the 1990 Plan, the 1994 Plan or
any other plans, programs or arrangements shall have any right thereunder to
acquire equity securities of the Company or the Surviving Corporation.
(e) Termination of Financial Advisory Agreements. Simultaneously
with the Closing, the Company shall cause the Financial Advisory Agreement,
dated as of August 22, 1990, among the Company, Neodata Services, Inc. and
Xxxxx, Muse Co. Incorporated, as amended (the "Xxxxx Muse Advisory Agreement"),
and the Financial Advisory Agreement, dated as of September 30, 1992, among the
Company, Neodata Services, Inc. and Wand/Neodata Investments, L.P., as amended
(the "Wand Advisory Agreement"), to be terminated pursuant to the provisions of
the Xxxxx Muse Termination Agreement substantially in the form of Exhibit D
hereto (the "Xxxxx Muse Termination Agreement") and the Wand Termination
Agreement substantially in the form of Exhibit E hereto (the "Wand Termination
Agreement" and, collectively with the Xxxxx Muse Termination Agreement, the
"Financial Advisory Termination Agreements"), respectively.
(f) Consent of Stockholders. The Company shall take all action
reasonably necessary, in accordance with the DGCL and its Certificate of
Incorporation and Bylaws, to obtain the written consent of its stockholders to
(i) the Merger and the transactions contemplated hereby and (ii) all payments,
including amounts received in respect of stock and stock options, to be made to
Xxxxxxxx Xxxxx pursuant to the Amended and Restated Executive Employment
Agreement dated January 1, 1997 between the Company and A. Xxxxxxxx Xxxxx (the
"Xxxxx Employment Agreement"). The information furnished to stockholders shall
include written
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disclosure in a form reasonably acceptable to Parent. At or prior to the
Closing, the Company shall deliver to Parent a certificate of the Company's
Secretary setting forth (i) the number of shares of capital stock of the
Company with respect to which consent has been granted to the foregoing matters
and (ii) the number of Dissenting Shares.
5.3 Covenants of Parent and Sub.
(a) Indemnification; Insurance.
(i) For a period of six years from and after the
Effective Time, Parent shall, and shall cause the Surviving Corporation
to, indemnify and hold harmless to the fullest extent permitted under
applicable law each person who is now, or has been at any time prior to
the date hereof, an officer or director of the Company for any
subsidiary thereof) (individually, an "Indemnified Party" and
collectively, the "Indemnified Parties") against all losses, claims,
damages, liabilities, costs or expenses (including reasonable
attorneys' fees), judgments, fines, penalties and amounts paid in
settlement in connection with any claim, action, suit, proceeding or
investigation (and shall pay reasonable expenses for legal fees in
advance of the final disposition of any such action or proceeding to
each Indemnified Party to he fullest extent permitted under applicable
law upon receipt from an Indemnified Party of any undertaking
contemplated by applicable law, including, without limitation, an
undertaking to reimburse Parent or the Surviving Corporation for such
expenses paid in advance in the event that it is ultimately determined
that such Indemnified Party is not entitled to the payment of such
expenses for any reason) arising out of or pertaining to acts or
omissions, or alleged acts or omissions, by them in their capacities as
such prior to the Effective Time, whether commenced asserted or claimed
before the Effective Time and including, without limitation,
liabilities arising under the Securities Act, the Exchange Act and
state corporation laws; provided that the Surviving Corporation shall
pay for only one law firm (in addition to local counsel) for all
Indemnified Parties, unless the xxx of one law firm for all Indemnified
Parties would present such law firm with a conflict of interest. For a
period of six years from and after the Effective Time and except as may
be required by applicable law, Parent shall cause the Surviving
Corporation to keep in effect the Company's current provisions in its
Certificate of Incorporation and Bylaws providing for exculpation of
director and officer liability and indemnification of the Indemnified
Parties to the fullest extent permitted under the DGCL. In the event of
any actual or threatened claim, action, suit, proceeding or
investigation in respect of such acts or omissions, Parent shall cause
the Surviving Corporation to cooperate in the defense of any such
matter; provide, however, that neither Parent nor the Surviving
Corporation shall be liable for any settlement effected without its
written consent (which consent shall not be unreasonably withheld).
(ii) From and after the Closing Date, Parent shall, or
shall cause the Surviving Corporation to, maintain in effect for a
period ending not earlier than the six year anniversary of the
Effective Time directors' and officers' liability insurance providing
at least substantially the same coverage with respect to the Company's
officers and directors as the current policy maintained by the Company,
with respect to
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matters occurring prior to or existing at the Effective time, including
the transactions contemplated by this Agreement, to the extent such
insurance is commercially available at reasonable cost with respect to
such matters.
(b) Stockholder Actions. Parent agrees that, in its
capacity as a stockholder of the Company, it shall execute such consents and
otherwise vote to approve such actions necessary to consummate the transactions
contemplated hereby.
ARTICLE VI
CONDITIONS
6.1 Conditions to Obligations of All Parties. The
obligations of the parties to consummate the transactions contemplated by this
Agreement are subject to the satisfaction, contemporaneously with, or prior to,
the Closing, of each of the following conditions (all or any of which may be
waived in whole or in part by the Company or by Parent and Sub):
(a) no temporary restraining order, preliminary or permanent
injunction or other order or decree which seeks to prevent consummation
of any of the transactions contemplated hereby shall have been issued
and remain in effect, and no statute, rule or regulation shall have
been enacted by an Governmental Authority which prevents the
consummations of any of the transactions contemplated hereby;
(b) any waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated; and
(c) this Agreement and the Merger shall have been approved
and adopted by the requisite vote of the stockholders of the Company in
accordance with the DGCL and the Company's Certificate of
Incorporation.
6.2 Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to perform the transactions contemplated by this
Agreement to be performed by them are subject to the satisfaction,
contemporaneously with, or prior to, the Closing, of each of the following
additional conditions (all or any of which may be waived in whole or in part by
Parent and Sub):
(a) the representations and warranties of the Company
contained herein shall be true and correct as of the date of this
Agreement in all material respects and (except to the extent that such
representations and warranties speak specifically as of an earlier
date) as of the Effective Time as though made on and as of the
Effective Time, provided, however, that materiality for such purpose
shall be determined without reference to any material or knowledge
standard included in any particular representation or warranty;
(b) the Company shall have performed in all material
respects each covenant to be performed by it on or prior to the Closing
Date;
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(c) all consents and approvals of Governmental Authorities or third
party consents and approvals identified on Section 6.2(c) of the Company
Disclosure Schedule necessary for the consummation of the transactions
contemplated by this Agreement shall have been obtained.
(d) there shall not have occurred after the date hereof any events
resulting in or which would result in, individually or in the aggregate, a
material adverse effect on the Company, except to the extent that any such
event resulted from any action taken by the Company or a subsidiary which
was authorized by Parent or a Parent Representative where such
authorization can be proven by clear and convincing evidence;
(e) the Subdebt Warrants and the Bridge Warrants shall have been
exercised and the Company shall have no further obligations in connection
therewith, other than payment of the difference between the aggregate
Merger Consideration and the exercise price, if any, in respect thereof;
(f) all outstanding options to acquire capital stock of the Company
shall have been terminated;
(g) the Financial Advisory Termination Agreements shall have been
duly and validly executed and delivered by the parties thereto and shall be
valid, binding and in full force and effect;
(h) Parent shall have received the opinion of Weil, Gotshal, &
Xxxxxx, L.L.P., counsel to the Company, substantially in the form of
Exhibit F hereto;
(i) Parent shall have received the Amendment to Executive
Employment Agreement, substantially in the form of Exhibit G hereto, duly
executed by the Company and each of Xxxxxxxx Xxxxxxx, Xxxxxxx Xxxxx, Ed
Fiaherty, Xx Xxxxxxx, Xxx Xxxx, Xxx Xxxxx, Xxxxx Xxxxxx and Xxxx Xxxx,
except for any such person with respect to whom such person's stock options
shall not have been accelerated;
(j) the Securityholders Agreement Amendment shall have been duly
and validly executed and delivered by the parties thereto other than Parent
and shall be valid, binding and in full force and effect.
(k) the Company shall have filed with the Commission its Annual
Report on Form 10-K for its fiscal year ended June 30, 1997, which shall
include an unqualified opinion from Coopers & Xxxxxxx, the Company's
independent auditors; and
(l) The Company shall have obtained the ratification and approval
by the vote of persons owning more than 75% of the voting power of all
outstanding stock of the Company, pursuant to written disclosure in a form
reasonably acceptable to Parent, of the
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amounts to be received by A. Xxxxxxxx Xxxxx in connection with the
transactions contemplated hereby.
6.3 Conditions to Obligations of the Company. The obligations of
the Company to perform the transactions contemplated by this Agreement to be
performed by it are subject to the satisfaction, contemporaneously with, or
prior to, the Closing, of each of the following additional conditions (all or
any of which may be waived in whole or in part by the Company):
(a) the representations and warranties of Parent and Sub contained
herein shall be true and correct as of the date of this Agreement in all
material respects and (except to the extent that such representations and
warranties speak specifically as of an earlier date) as of the Effective
Time as though made on and as of the Effective Time, provided, however,
that materiality for such purpose shall be determined without reference to
any material or knowledge standard included in any particular
representation or warranty
(b) each of Parent and Sub shall have performed in all material
respects each covenant to be performed by it on or prior to the Closing
Date
(c) the Securityholders Agreement Amendment shall have been duly
and validly executed and delivered by the parties thereto other than the
Company and shall be valid, binding and in full force and effect; and
(d) Parent and Sub shall have delivered the Merger Consideration,
the Option Consideration and all amounts necessary to cash out the Bridge
Warrants and the Subdebt Warrants to the Paying Agent by wire transfer of
immediately available funds.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time:
(a) by mutual consent of Parent and the Company;
(b) by either Parent or the Company if any permanent injunction or
other order or decree of a court or other competent Governmental Authority
preventing the consummation of the transactions contemplated hereby shall
have become final and nonappealable, provided that the party seeking to
terminate this Agreement pursuant to this clause (b) shall have used its
reasonable best efforts to remove such injunction, order or decree;
(c) by either Parent or the Company if the Closing shall not have
occurred before October 15, 1997 (or November 15, 1997, in the event the
Closing shall not have
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occurred on or before October 15, 1997 due to the failure to receive
termination of the waiting period under the HSR Act); provided that the
right to terminate this Agreement under this Section 7.1(c) shall not be
available to any party whose failure to perform any material covenant or
obligation under this Agreement has been the cause of or resulted in the
failure of the Closing to occur on or before such date, or
(d) by Parent or the Company (so long as the terminating party is not
then in material breach of any representation, warranty, covenant or other
agreement contained herein) if there shall have been a material breach of
any of the covenants or agreements or any of the representations or
warranties set forth in this Agreement on the part of the other party, which
breach is not cured within 10 days following written notice given by the
terminating party to the party committing such breach, or which breach, by
its nature, cannot be cured prior to the Closing, but only if such breach
would constitute a failure of a condition contained in Section 6.2 or
Section 6.3, as applicable.
7.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 7.1, this Agreement, except for the provisions of
Sections 7.2 and 8.10, shall become void and have no effect, without any
liability on the part of any party or its directors, officers, employees or
stockholders. Notwithstanding the foregoing, nothing in this Section 7.2 shall
relieve any party to this Agreement of liability for a breach of any covenant or
agreement set forth in this Agreement.
7.3 Amendment. This Agreement may be amended by a written instrument
signed by the parties hereto and, if required by the DGCL or otherwise, approved
by action taken by their respective Boards of Directors, at any time, but no
amendment shall be made which by law requires further approval by the
stockholders of the Company or Sub without such further approval.
7.4 Extension; Waiver. At any time prior to the Closing Date, Parent
(with respect to the Company) and the Company (with respect to Parent and Sub)
may, to the extent legally allowed, (a) extend the time for the performance of
any of the obligations or other acts of such party, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in a written instrument
signed on behalf of such party.
ARTICLE VIII
MISCELLANEOUS
8.1 Survival of Representations and Warranties. The representations
and warranties made herein by the parties hereto shall not survive the Closing
Date.
8.2 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given upon receipt if delivered personally,
telecopied (which is
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confirmed) or dispatched by a nationally recognized overnight courier service 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:
Neodata Corporation
000 X. Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: A. Xxxxxxxx Xxxxx
with copies to:
Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx
Xxxxxxxx X. Xxxxxx, Xx.
Telecopy No.: (000) 000-0000
and
Xxxx X. Xxxxx
Xxxx, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
(b) if to Parent or Sub:
Electronic Data Systems Corporation
0000 Xxxxxx Xxxxx
Mail Stop H2-8W-40
Xxxxx, Xxxxx 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
8.3 Interpretation. When a reference is made in this Agreement
to an Article, Section or Schedule, such reference shall be to an Article,
Section or Schedule of this Agreement unless otherwise indicated. The headings
and the table of contents contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. For the purposes of this Agreement, a "material adverse effect"
shall mean, as to any party, a material adverse effect on the assets,
liabilities, result of operations, business, properties or condition (financial
or otherwise) of such party and its subsidiaries, taken as a whole, or on such
party's ability to consummate the transactions contemplated hereby. For the
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purposes of this Agreement, the term "to the knowledge of the Company" or
similar terms shall be deemed to include the knowledge of any subsidiaries of
the Company.
8.4 Counterparts. This Agreement may be executed in counterparts,
which together shall constitute one and the same Agreement. The parties may
execute more than one copy of the Agreement, each of which shall constitute an
original.
8.5 Entire Agreement. This Agreement (including the documents and
the instruments referred to herein) constitutes the entire agreement among the
parties and supersedes all prior agreements and understandings, agreements or
representations by or among the parties, written and oral, with respect to the
subject matter hereof and thereof.
8.6 Third Party Beneficiaries. Nothing in this Agreement, express
or implied, is intended or shall be construed to create any third party
beneficiaries, except for the provisions of Section 5.3(a) which may be
enforced by the beneficiaries thereof.
8.7 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Texas without regard to principles
of conflicts of law.
8.8 Specific Performance. The transactions contemplated by this
Agreement are unique and monetary damages would not be an adequate remedy for a
breach hereof. Accordingly, each of the parties acknowledges and agrees that, in
addition to all other remedies to which it may be entitled, each of the parties
hereto is entitled to a decree of specific performance, provided that such
party is not in material default hereunder.
8.9 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties, except that Sub may assign any or all of its
rights, interest and obligations hereunder to Parent or to any direct or
indirect wholly owned subsidiary of Parent. Subject to the preceding sentence,
the Agreement shall be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
8.10 Expenses. All costs and expenses incurred in connection with
the consummation of the transactions contemplated by the Agreement by Parent
and Sub shall be paid by Parent and all costs and expenses incurred in
connection with the consummation of the transactions contemplated by this
Agreement by the Company shall be paid by the Company. Notwithstanding the
foregoing, the filing fees incurred in connection with the filings or
registrations pursuant to the HSR Act shall be borne equally by Parent and the
Company.
8.11 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so
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broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
8.12 Subsidiaries. As used in this Agreement, the word "subsidiary"
when used with respect to any party means any corporation or other
organization, whether incorporated or unincorporated, of which such party
directly or indirectly owns or controls at least 50% of the securities or
other interests having by their terms ordinary voting power to elect a majority
of the board of directors or others performing similar functions with respect
to such corporation or other organization, or any organization of which such
party is a general partner.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Parent, Sub and the Company have signed this
Agreement as of the date first written above.
ELECTRONIC DATA SYSTEMS CORPORATION
By: /s/ XXXX X. XXXXXXXXX
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice Chairman
RAMCAD CORPORATION
By: /s/ XXXX X. XXXXXXXXX
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
NEODATA CORPORATION
By: /s/ A. XXXXXXXX XXXXX
----------------------------------
Name: A. Xxxxxxxx Xxxxx
Title: President/Chief Executive Officer
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