Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
AFFILIATED RESEARCH CENTERS, INC.,
ARC MERGER SUB-1, INC.
AND
XXXXXXXXXXXXXX.XXX, INC.
DATED AS OF JANUARY 6, 2000
TABLE OF CONTENTS
Page
----
THE MERGER AND THE CLOSING..........................................................1
The Merger.....................................................................1
Effective Time.................................................................2
Effect of the Merger...........................................................2
Subsequent Actions.............................................................2
Certificate of Incorporation; By-Laws; Directors and Officers..................2
The Closing....................................................................3
EFFECT ON STOCK OF THE SURVIVING CORPORATION AND THE MERGED
CORPORATION....................................................................3
Conversion of Securities.......................................................3
Conversion of Shares...........................................................3
Cancellation of Treasury Shares................................................4
Conversion of Common Stock of Merger Subsidiary into Common Stock of the
Surviving Corporation..........................................................4
Exchange of Shares Other Than Treasury Shares..................................5
Transfer Books.................................................................6
No Fractional Share Certificates...............................................6
Rights to Purchase AmDoc Common Stock, AmDoc Series A Preferred Stock,
AmDoc Series B Preferred Stock and AmDoc Series C Preferred Stock..............7
Appraisal Rights...............................................................8
Escrow of Shares...............................................................8
Appointment of Stockholder Representatives.....................................9
Post-Merger Adjustments.......................................................10
REPRESENTATIONS AND WARRANTIES OF AMDOC............................................14
Organization, Qualification, and Corporate Power..............................14
Authorization of Transaction; Required Filings and Consents...................15
Capitalization; Subsidiaries..................................................15
Noncontravention..............................................................16
Material Contracts............................................................16
Tax Treatment.................................................................18
REPRESENTATIONS AND WARRANTIES OF ARC AND MERGER SUBSIDIARY........................18
Organization, Qualification, and Corporate Power..............................18
Authorization of Transaction; Required Filings and Consents...................19
Capitalization; Subsidiaries; Affiliated Entities.............................19
Noncontravention..............................................................21
Material Contracts............................................................21
COVENANTS AND AGREEMENTS...........................................................23
Conduct of AmDoc and ARC......................................................23
Information Statement.........................................................25
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Compliance with Laws; Information Statement; Other Actions....................26
No Solicitation...............................................................26
Takeover Statute..............................................................27
Tax Treatment.................................................................27
Conveyance Taxes..............................................................27
Access to Information; Confidentiality Agreement..............................27
Obligations of Merger Subsidiary..............................................28
Director and Officer Liability................................................28
Notices and Consents..........................................................28
Notice; Supplements to Disclosure Schedule....................................28
Employee Benefit Plans........................................................29
Stock Option Matters..........................................................29
Further Assurances............................................................29
CONDITIONS TO THE MERGER...........................................................29
Conditions to Obligations of Each Party to Effect the Merger..................29
Additional Conditions to Obligations of AmDoc.................................30
Additional Conditions to Obligations of ARC and Merger Subsidiary.............30
TERMINATION, AMENDMENT AND WAIVER..................................................31
Termination...................................................................31
Effect of Termination.........................................................31
Amendment.....................................................................31
Waiver........................................................................31
GENERAL PROVISIONS.................................................................32
Non-Survival of Representations, Warranties and Agreements....................32
Notices.......................................................................32
Expenses......................................................................33
Certain Definitions...........................................................33
Headings......................................................................34
Severability..................................................................34
Entire Agreement; No Third-Party Beneficiaries................................34
Assignment....................................................................34
Governing Law.................................................................34
Consent to Jurisdiction.......................................................34
Costs of Enforcement..........................................................34
Specific Performance..........................................................34
Publicity.....................................................................35
Incorporation of Annexes, Exhibits and Disclosure Schedule....................35
Counterparts..................................................................35
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DISCLOSURE SCHEDULE
-------------------
Section Description
------- -----------
2.8 AmDoc Contingent Rights
3.3(b) AmDoc Securities
3.3(c)(i) AmDoc Capitalization as of Date of Agreement
3.3(c)(ii) AmDoc Capitalization Immediately Prior to Effective Time
3.3(d) AmDoc Subsidiaries
4.2 ARC Ancillary Documents
4.3(b) ARC Securities
4.3(c)(i) ARC Capitalization as of Date of Agreement
4.3(c)(ii) ARC Capitalization Immediately Prior to Effective Time
4.3(d) ARC Subsidiaries
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EXHIBITS
--------
Exhibit Description
------- -----------
A Form of Restated Certificate of Incorporation of the Surviving Corporation
B Form of Amended and Restated By-laws of the Surviving Corporation
C Research Series A Preferred Stock Terms
D Escrow Agreement
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INDEX OF DEFINED TERMS
----------------------
Definition Page
---------- ----
Agreement......................................................................1
AmDoc..........................................................................1
AmDoc 401(k) Plan.............................................................29
AmDoc Acquisition Proposal....................................................26
AmDoc Ancillary Documents.....................................................14
AmDoc Claim...................................................................13
AmDoc Common Stock.............................................................3
AmDoc Common Stock Exchange Ratio..............................................4
AmDoc Common Stockholder Representative........................................9
AmDoc Contingent Rights........................................................7
AmDoc Escrowed Shares..........................................................8
AmDoc Preferred Stock..........................................................4
AmDoc Preferred Stockholder Representative.....................................9
AmDoc Series A Preferred Stock.................................................3
AmDoc Series A Preferred Stock Exchange Ratio..................................4
AmDoc Series B Preferred Stock.................................................3
AmDoc Series B Preferred Stock Exchange Ratio..................................4
AmDoc Series C Preferred Stock.................................................4
AmDoc Series C Preferred Stock Exchange Ratio..................................4
AmDoc Shares...................................................................4
AmDoc Stock Options...........................................................15
AmDoc Stockholder Representatives..............................................9
Applicable Law................................................................17
Arbitrators...................................................................12
ARC Acquisition Proposal......................................................27
ARC Ancillary Documents.......................................................19
ARC Claim.....................................................................11
ARC Class A Common Stock.......................................................3
ARC Class B Common Stock......................................................19
ARC Common Stock..............................................................19
ARC Escrowed Shares............................................................8
ARC New Series A Preferred Stock..............................................19
ARC Preferred Stock...........................................................19
ARC Series A Preferred Stock..................................................19
ARC Series A-1 Preferred Stock.................................................3
ARC Series A-2 Preferred Stock.................................................4
ARC Series A-3 Preferred Stock.................................................4
ARC Series B Preferred Stock..................................................19
ARC Series C Preferred Stock..................................................19
ARC Series E Preferred Stock..................................................19
ARC Stock Options.............................................................20
Auditor.......................................................................10
Business Day..................................................................33
Certificate of Merger..........................................................2
Closing........................................................................3
Closing Date...................................................................3
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Definition Page
---------- ----
Code...........................................................................1
Confidentiality Agreement.....................................................28
Delaware Law...................................................................1
Disclosure Schedule...........................................................14
Dissenting AmDoc Shares........................................................8
Effective Time.................................................................2
Escrow Agent...................................................................8
Escrow Agreement...............................................................9
Escrowed Shares................................................................8
Exchange Agent.................................................................5
Exchange Fund..................................................................5
Exchange Ratios................................................................4
GAAP..........................................................................10
Governmental Authority........................................................15
Governmental Licenses.........................................................14
Information Statement.........................................................25
Investor Rights Agreement.....................................................19
Knowledge.....................................................................33
Liens.........................................................................16
Material Adverse Effect.......................................................34
Merged Corporation.............................................................1
Merger.........................................................................1
Merger Subsidiary..............................................................1
Parties........................................................................1
Party..........................................................................1
Person........................................................................34
Pre-Surrender Dividends........................................................6
Registration Rights Agreement.................................................19
Representatives...............................................................28
Restraints....................................................................29
Securities Act................................................................26
Series A-5 Preferred Stock....................................................20
Subsidiary....................................................................34
Surviving Corporation..........................................................1
Surviving Corporation Common Stock.............................................4
Termination Date..............................................................31
Working Capital Shortfall.....................................................11
Working Capital Statement.....................................................10
vi
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of January 6, 2000 (this
"Agreement"), is by and among Affiliated Research Centers, Inc., a Delaware
corporation ("ARC"), ARC Merger Sub-1, Inc., a Delaware corporation and a wholly
owned subsidiary of ARC ("Merger Subsidiary"), and XxxxxxxxXxxxxx.xxx, Inc., a
Delaware corporation ("AmDoc").
W I T N E S S E T H
WHEREAS, the Boards of Directors of AmDoc, ARC and Merger Subsidiary have
each determined that it is in the best interests of their respective
stockholders for AmDoc and ARC to enter into a business combination in a "merger
of equals" under which Merger Subsidiary will, upon the terms and subject to the
conditions set forth herein, merge with and into AmDoc (the "Merger") so that
AmDoc will become a wholly owned subsidiary of ARC;
WHEREAS, the Boards of Directors of AmDoc, ARC and Merger Subsidiary (and
ARC as the sole stockholder of Merger Subsidiary) have each determined that the
Merger and the other transactions contemplated hereby are consistent with, and
in furtherance of, their respective business strategies and goals and have each
approved the Merger upon the terms and subject to the conditions set forth
herein; and
WHEREAS, for federal income tax purposes, it is intended that the Merger
shall constitute a tax-free reorganization under Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
ARTICLE I
THE MERGER AND THE CLOSING
SECTION 1.1 -- The Merger. At the Effective Time and subject to and upon
the terms and conditions of this Agreement and the Delaware General Corporation
Law, as amended ("Delaware Law"), Merger Subsidiary shall be merged with and
into AmDoc, the separate corporate existence of Merger Subsidiary shall cease,
and AmDoc shall continue as the surviving corporation which shall be a wholly
owned subsidiary of ARC. AmDoc as the surviving corporation after the Merger is
herein sometimes referred to as the "Surviving Corporation" and Merger
Subsidiary as the non-surviving corporation after the Merger is herein sometimes
referred to as the "Merged Corporation." AmDoc, ARC and Merger Subsidiary are
herein referred to collectively as the "Parties" and each individually as a
"Party."
SECTION 1.2 -- Effective Time. As promptly as practicable on the Closing
Date, the Parties shall cause the Merger to be consummated by filing a
Certificate of Merger (the
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"Certificate of Merger") with the Secretary of State of the State of Delaware
with respect to the Merger, in such form as required by, and executed in
accordance with, the relevant provisions of Delaware Law. The Merger shall
become effective at such time as the Certificate of Merger is duly filed with
the Secretary of State of the State of Delaware, or at such later date or time
as may be set forth in the Certificate of Merger (such time as the Merger
becomes effective being hereinafter referred to as the "Effective Time").
SECTION 1.3 -- Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of Delaware Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
AmDoc and Merger Subsidiary shall continue with, or vest in, as the case may be,
AmDoc as the Surviving Corporation, and all debts, liabilities and duties of
AmDoc and Merger Subsidiary shall continue to be, or become, as the case may be,
the debts, liabilities and duties of AmDoc as the Surviving Corporation. At the
Effective Time, the Surviving Corporation shall be a direct, wholly owned
subsidiary of ARC.
SECTION 1.4 -- Subsequent Actions. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to continue in, vest, perfect or confirm of record or
otherwise in the Surviving Corporation its right, title or interest in, to or
under any of the rights, properties, privileges, franchises or assets of either
of its constituent corporations acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger or otherwise to
carry out this Agreement, the officers and directors of the Surviving
Corporation shall be directed and authorized to execute and deliver, in the name
and on behalf of either of such constituent corporations, all such deeds, bills
of sale, assignments and assurances and to take and do, in the name and on
behalf of each of such corporations or otherwise, all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties, privileges,
franchises or assets in the Surviving Corporation or otherwise to carry out this
Agreement.
SECTION 1.5 -- Certificate of Incorporation; By-Laws; Directors and
Officers. Unless otherwise agreed by AmDoc and ARC before the Effective Time, at
the Effective Time:
(a) the restated certificate of incorporation of AmDoc, as in effect
immediately prior to the Effective Time, shall be amended and restated at and as
of the Effective Time as set forth in Exhibit A hereto and, as so amended and
restated, such restated certificate of incorporation shall be the restated
certificate of incorporation of the Surviving Corporation until thereafter
amended as provided by law and such certificate of incorporation;
(b) the amended and restated by-laws of AmDoc, as in effect
immediately prior to the Effective Time, shall be amended and restated at and as
of the Effective Time as set forth described in Exhibit B hereto and, as so
amended and restated, such amended and restated by-laws shall be the amended and
restated by-laws of the Surviving Corporation until thereafter amended as
provided by law and by the restated certificate of incorporation and the amended
and restated by-laws of the Surviving Corporation; and
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(c) the officers and directors listed on Annex A hereto shall be the
officers and directors of ARC and the Surviving Corporation, respectively, until
the earlier of their death, resignation or removal or until their respective
successors are duly elected and qualified.
SECTION 1.6 -- The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Xxxxx, Day,
Xxxxxx & Xxxxx, 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, commencing
at 10:00 a.m. local time on January 6, 2000, or, if later, on the second
Business Day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions set forth in Article
VI hereof (other than conditions with respect to actions the respective Parties
will take at the Closing itself), or at such other time and place and on such
other date as AmDoc and ARC shall agree (the "Closing Date").
ARTICLE II
EFFECT ON STOCK OF THE SURVIVING CORPORATION
AND THE MERGED CORPORATION
SECTION 2.1 -- Conversion of Securities. The manner and basis of converting
the shares of the Surviving Corporation and of the Merged Corporation at the
Effective Time, by virtue of the Merger and without any action on the part of
any of the Parties or the holder of any of such securities, shall be as
hereinafter set forth in this Article II.
SECTION 2.2 -- Conversion of Shares. At the Effective Time:
(a) each share of common stock, par value $0.01 per share, of AmDoc
("AmDoc Common Stock") issued and outstanding immediately prior to the Effective
Time (other than shares of AmDoc Common Stock to be canceled in accordance with
Section 2.3 hereof and any Dissenting AmDoc Shares) shall, without any action by
the holder thereof, be converted into the right to receive 1.2509 shares of
Class A Common Stock, par value $0.001 per share, of ARC ("ARC Class A Common
Stock"), subject to adjustment as provided in Sections 2.10 and 2.12 hereof;
(b) each share of Series A Convertible Preferred Stock, par value
$0.01 per share, of AmDoc ("AmDoc Series A Preferred Stock") issued and
outstanding immediately prior to the Effective Time (other than shares of AmDoc
Series A Preferred Stock to be canceled in accordance with Section 2.3 hereof
and any Dissenting AmDoc Shares) shall, without any action by the holder
thereof, be converted into the right to receive 1.2509 shares of Series A-1
Preferred Stock, par value $0.001 per share, of ARC (which will have the voting
powers and such designations, preferences and relative, participating, optional
and other special rights, and qualifications limitations and restrictions
thereof as are stated and expressed in the Certificate of Designation,
Preferences and Rights of Series A Preferred Stock attached hereto as Exhibit C)
("ARC Series A-1 Preferred Stock"), subject to adjustment as provided in
Sections 2.10 and 2.12 hereof; and
(c) each share of Series B Redeemable Convertible Preferred Stock,
par value $0.01 per share, of AmDoc ("AmDoc Series B Preferred Stock") issued
and outstanding immediately prior to the Effective Time (other than shares of
AmDoc Series B Preferred Stock to
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be canceled in accordance with Section 2.3 hereof and any Dissenting AmDoc
Shares) shall, without any action by the holder thereof, be converted into the
right to receive 1.2509 shares of Series A-2 Preferred Stock, par value $0.001
shares, of ARC (which will have the voting powers and such designations,
preferences and relative, participating, optional and other special rights, and
qualifications limitations and restrictions thereof as are stated and expressed
in the Certificate of Designation, Preferences and Rights of Series A Preferred
Stock attached hereto as Exhibit C) ("ARC Series A-2 Preferred Stock"), subject
to adjustment as provided in Sections 2.10 and 2.12 hereof; and
(d) each share of Series C Redeemable Convertible Preferred Stock,
par value $0.01 per share, of AmDoc ("AmDoc Series C Preferred Stock" and
together with the AmDoc Series A Preferred Stock and the AmDoc Series B
Preferred Stock, the "AmDoc Preferred Stock") issued and outstanding immediately
prior to the Effective Time (other than shares of AmDoc Series C Preferred Stock
to be canceled in accordance with Section 2.3 hereof and any Dissenting AmDoc
Shares) shall, without any action by the holder thereof, be converted into the
right to receive 1.2509 shares of Series A-3 Preferred Stock, par value $0.001
per share, of ARC (which will have the voting powers and such designations,
preferences and relative, participating, optional and other special rights, and
qualifications limitations and restrictions thereof as are stated and expressed
in the Certificate of Designation, Preferences and Rights of Series A Preferred
Stock attached hereto as Exhibit C) ("ARC Series A-3 Preferred Stock"), subject
to adjustment as provided in Sections 2.10 and 2.12 hereof.
The shares of AmDoc Common Stock and AmDoc Preferred Stock referred to above are
referred to herein collectively as the "AmDoc Shares." At the Effective Time, by
virtue of the Merger and without any action by the parties, each AmDoc Share
shall cease to be outstanding, shall be canceled and retired and shall cease to
exist, and the holders thereof shall cease to have any rights with respect
thereto, other than the right to receive the consideration therefor upon the
surrender of certificates representing such AmDoc Shares in accordance with
Section 2.5. For purposes of this Agreement, the "AmDoc Common Stock Exchange
Ratio" shall be 1:1.2509, the "AmDoc Series A Preferred Stock Exchange Ratio"
shall be 1:1.2509, the "AmDoc Series B Preferred Stock Exchange Ratio" shall be
1:1.2509 and the "AmDoc Series C Preferred Stock Exchange Ratio" shall be
1:1.2509 (the AmDoc Common Stock Exchange Ratio, the AmDoc Series A Preferred
Stock Exchange Ratio, the AmDoc Series B Preferred Stock Exchange Ratio and the
AmDoc Series C Preferred Stock Exchange Ratio collectively, the "Exchange
Ratios").
SECTION 2.3 -- Cancellation of Treasury Shares. At the Effective Time, each
share of AmDoc Common Stock, AmDoc Series A Preferred Stock, AmDoc Series B
Preferred Stock and AmDoc Series C Preferred Stock held in the treasury of AmDoc
or by any of AmDoc's Subsidiaries, and each share of AmDoc Common Stock, AmDoc
Series A Preferred Stock, AmDoc Series B Preferred Stock and AmDoc Series C
Preferred Stock that is owned by ARC, Merger Subsidiary or any other Subsidiary
of ARC, if any, immediately prior to the Effective Time shall be canceled and
retired and no shares of stock or other securities of ARC or the Surviving
Corporation shall be issuable, and no payment or other consideration shall be
made, with respect thereto.
SECTION 2.4 -- Conversion of Common Stock of Merger Subsidiary into Common
Stock of the Surviving Corporation. At the Effective Time, the shares of common
stock, par value $0.001 per share, of Merger Subsidiary issued and outstanding
immediately prior to the
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Effective Time, and all rights in respect thereof, shall, without any action on
the part of ARC, forthwith cease to exist and be converted into an aggregate of
100 validly issued, fully paid and nonassessable shares of common stock of the
Surviving Corporation, par value $0.001 per share (the "Surviving Corporation
Common Stock"). Immediately after the Effective Time and upon surrender by ARC
of the certificate representing the shares of the common stock of Merger
Subsidiary, the Surviving Corporation shall deliver to ARC an appropriate
certificate or certificates representing the shares of Surviving Corporation
Common Stock created by conversion of the common stock of Merger Subsidiary
owned by ARC.
SECTION 2.5 -- Exchange of Shares Other Than Treasury Shares. Subject to
the terms and conditions hereof, at or prior to the Effective Time, ARC shall
enter into an agreement with LaSalle Bank National Association or such other
bank or trust company as may be designated by ARC and as shall be reasonably
satisfactory to AmDoc (the "Exchange Agent") to effect the exchange of AmDoc
Shares for ARC Class A Common Stock, ARC Series A-1 Preferred Stock, ARC Series
A-2 Preferred Stock or ARC Series A-3 Preferred Stock, as the case may be, in
accordance with the provisions of this Article II. At or prior to the Effective
Time, ARC shall deposit, or cause to be deposited, with the Exchange Agent for
the benefit of the holders of AmDoc Shares certificates representing ARC Class A
Common Stock, ARC Series A-1 Preferred Stock, ARC Series A-2 Preferred Stock and
ARC Series A-3 Preferred Stock for conversion of AmDoc Shares in accordance with
the provisions of Section 2.2 hereof (such certificates, together with any
dividends or distributions with respect thereto and any cash payable in lieu of
any fractional shares of ARC Class A Common Stock, ARC Series A-1 Preferred
Stock, ARC Series A-2 Preferred Stock and ARC Series A-3 Preferred Stock being
herein referred to as the "Exchange Fund"). Commencing immediately after the
Effective Time and until the appointment of the Exchange Agent shall be
terminated, each holder of a certificate or certificates theretofore
representing AmDoc Shares may surrender the same to the Exchange Agent, and,
after the appointment of the Exchange Agent shall be terminated, any such holder
may surrender any such certificate to ARC. Such holder shall be entitled upon
such surrender to receive in exchange therefor a certificate or certificates
representing the number of full shares of ARC Class A Common Stock, ARC Series
A-1 Preferred Stock, ARC Series A-2 Preferred Stock or ARC Series A-3 Preferred
Stock, as the case may be, into which the AmDoc Shares theretofore represented
by the certificate or certificates so surrendered shall have been converted in
accordance with the provisions of Section 2.2 hereof, together with a cash
payment in lieu of fractional shares, if any, in accordance with Section 2.7
hereof, and all such shares of ARC Class A Common Stock, ARC Series A-1
Preferred Stock, ARC Series A-2 Preferred Stock or ARC Series A-3 Preferred
Stock, as the case may be, shall be deemed to have been issued at the Effective
Time. Until so surrendered and exchanged, each outstanding certificate which,
prior to the Effective Time, represented issued and outstanding AmDoc Shares
shall be deemed for all corporate purposes of ARC, other than the payment of
dividends and other distributions, if any, to evidence ownership of the number
of full shares of ARC Class A Common Stock, ARC Series A-1 Preferred Stock, ARC
Series A-2 Preferred Stock or ARC Series A-3 Preferred Stock, as the case may
be, into which the AmDoc Shares theretofore represented thereby shall have been
converted at the Effective Time. Unless and until any such certificate
theretofore representing AmDoc Shares is so surrendered, no dividend or other
distribution, if any, payable to the holders of record of ARC Class A Common
Stock, ARC Series A-1 Preferred Stock, ARC Series A-2 Preferred Stock or ARC
Series A-3 Preferred Stock, as the case may be, as of any date subsequent to the
Effective Time shall be paid to the holder of such certificate in respect
thereof. Except as otherwise provided in Section 2.6 hereof, upon the surrender
of any such certificate
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theretofore representing AmDoc Shares, the record holder of the certificate or
certificates representing shares of ARC Class A Common Stock, ARC Series A-1
Preferred Stock, ARC Series A-2 Preferred Stock or ARC Series A-3 Preferred
Stock, as the case may be, issued in exchange therefor shall receive from the
Exchange Agent or from ARC, as the case may be, payment of the amount of
dividends and other distributions, if any, which as of any date subsequent to
the Effective Time and until such surrender shall have become payable with
respect to such number of shares of ARC Class A Common Stock, ARC Series A-1
Preferred Stock, ARC Series A-2 Preferred Stock or ARC Series A-3 Preferred
Stock, as the case may be ("Pre-Surrender Dividends"). No interest shall be
payable with respect to the payment of Pre-Surrender Dividends upon the
surrender of certificates theretofore representing AmDoc Shares. After the
appointment of the Exchange Agent shall have been terminated, any holders of
certificates representing AmDoc Shares which have not received payment of Pre-
Surrender Dividends shall look only to ARC for payment thereof. Notwithstanding
the foregoing provisions of this Section 2.5, neither the Exchange Agent nor any
Party shall be liable to a holder of AmDoc Shares for any ARC Class A Common
Stock, ARC Series A-1 Preferred Stock, ARC Series A-2 Preferred Stock or ARC
Series A-3 Preferred Stock, any dividends or distributions thereon or any cash
payment for fractional shares as contemplated by Section 2.7 hereof, delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
SECTION 2.6 -- Transfer Books. The stock transfer books of AmDoc shall be
closed at the Effective Time and no transfer of any AmDoc Shares will thereafter
be recorded on any of such stock transfer books. In the event of a transfer of
ownership of AmDoc Shares that is not registered in the stock transfer records
of AmDoc at the Effective Time, a certificate or certificates representing the
number of full shares of ARC Class A Common Stock, ARC Series A-1 Preferred
Stock, ARC Series A-2 Preferred Stock or ARC Series A-3 Preferred Stock, as the
case may be, into which such AmDoc Shares shall have been converted shall be
issued to the transferee together with a cash payment in lieu of fractional
shares, if any, in accordance with Section 2.7 hereof, and a cash payment in the
amount of Pre-Surrender Dividends, if any, in accordance with Section 2.5
hereof, if the certificate or certificates representing such AmDoc Shares is or
are surrendered as provided in Section 2.5 hereof, accompanied by all documents
required to evidence and effect such transfer and by evidence of payment of any
applicable stock transfer tax.
SECTION 2.7 -- No Fractional Share Certificates. (a) No scrip or fractional
share certificate for ARC Class A Common Stock, ARC Series A-1 Preferred Stock,
ARC Series A-2 Preferred Stock or ARC Series A-3 Preferred Stock will be issued
upon the surrender for exchange of certificates evidencing AmDoc Shares, and an
outstanding fractional share interest will not entitle the owner thereof to
vote, to receive dividends or to any rights of a stockholder of ARC or of the
Surviving Corporation with respect to such fractional share interest.
(b) As promptly as practicable following the Effective Time, ARC
shall deliver to the Exchange Agent for deposit in the Exchange Fund an amount
sufficient for the Exchange Agent to pay (i) each holder of AmDoc Common Stock
an amount in cash equal to the product obtained by multiplying the fractional
share interest to which such holder would otherwise be entitled (after taking
into account all shares of AmDoc Common Stock held at the Effective Time by such
holder) by $12.00, (ii) each holder of AmDoc Series A Preferred Stock an amount
in cash equal to the product obtained by multiplying the fractional share
interest to
6
which such holder would otherwise be entitled (after taking into account all
shares of AmDoc Series A Preferred Stock held at the Effective Time by such
holder) by $12.00, (iii) each holder of AmDoc Series B Preferred Stock an amount
in cash equal to the product obtained by multiplying the fractional share
interest to which such holder would otherwise be entitled (after taking into
account all shares of AmDoc Series B Preferred Stock held at the Effective Time
by such holder) by $12.00 and (iv) each holder of AmDoc Series C Preferred Stock
an amount in cash equal to the product obtained by multiplying the fractional
share interest to which such holder would otherwise be entitled (after taking
into account all shares of AmDoc Series C Preferred Stock held at the Effective
Time by such holder) by $12.00.
(c) As soon as practicable after the determination of the amount of
cash, if any, to be paid to holders of AmDoc Shares with respect to any
fractional share interests, the Exchange Agent shall pay to such holders such
amounts, net of any required withholding, to such holders of AmDoc Shares,
subject to and in accordance with the terms of Section 2.5 hereof.
(d) Any portion of the Exchange Fund which remains undistributed for
six (6) months after the Effective Time shall be delivered to ARC, upon demand,
and any holders of AmDoc Shares who have not theretofore complied with the
provisions of this Article II shall thereafter look only to ARC for satisfaction
of their claims for ARC Class A Common Stock, ARC Series A-1 Preferred Stock,
ARC Series A-2 Preferred Stock or ARC Series A-3 Preferred Stock, any cash in
lieu of fractional shares of ARC Class A Common Stock, ARC Series A-1 Preferred
Stock, ARC Series A-2 Preferred Stock or ARC Series A-3 Preferred Stock and any
Pre-Surrender Dividends, in each case, without any interest thereon.
(e) The Exchange Agent shall invest all cash included in the Exchange
Fund as directed by ARC. Any interest and other income resulting from such
investments shall be paid to ARC.
SECTION 2.8 -- Rights to Purchase AmDoc Common Stock, AmDoc Series A
Preferred Stock, AmDoc Series B Preferred Stock and AmDoc Series C Preferred
Stock. At the Effective Time, each warrant and option granted by AmDoc to
purchase shares of AmDoc Common Stock, AmDoc Series A Preferred Stock, AmDoc
Series B Preferred Stock or AmDoc Series C Preferred Stock and referred to on
Schedule 2.8 hereto (collectively, "AmDoc Contingent Rights") which is
outstanding and unexercised immediately prior to the Effective Time (other than
any of such AmDoc Contingent Rights to be canceled or exercised prior to the
Effective Time as reflected on Section 3.3(c)(ii) of the Disclosure Schedule)
shall be converted pursuant to its terms into a warrant or option, as the case
may be, to purchase shares of ARC Class A Common Stock, ARC Series A-1 Preferred
Stock, ARC Series A-2 Preferred Stock or ARC Series A-3 Preferred Stock, as the
case may be, in such amount and at such exercise price as provided below and
otherwise having the same terms and conditions as are in effect immediately
prior to the Effective Time (except to the extent that such terms, conditions
and restrictions are altered in accordance with their terms as a result of the
transactions contemplated hereby):
(a) the number of shares of ARC Class A Common Stock, ARC Series A-1
Preferred Stock, ARC Series A-2 Preferred Stock or ARC Series A-3 Preferred
Stock to be subject to the applicable AmDoc Contingent Right shall be equal to
the product of (i) the number of shares of AmDoc Common Stock, AmDoc Series A
Preferred Stock, AmDoc Series B
7
Preferred Stock or AmDoc Series C Preferred Stock subject to the original AmDoc
Contingent Right and (ii) the applicable Exchange Ratio;
(b) the exercise price per share of ARC Class A Common Stock, ARC
Series A-1 Preferred Stock, ARC Series A-2 Preferred Stock or ARC Series A-3
Preferred Stock under the applicable AmDoc Contingent Right shall be equal to
(i) the exercise price per share of AmDoc Common Stock, AmDoc Series A Preferred
Stock, AmDoc Series B Preferred Stock or AmDoc Series C Preferred Stock under
the original AmDoc Contingent Right divided by (ii) the applicable Exchange
Ratio;
(c) upon each exercise of options or warrants issued upon the
conversion of any AmDoc Contingent Rights by a holder thereof, the aggregate
number of shares of ARC Class A Common Stock, ARC Series A-1 Preferred Stock,
ARC Series A-2 Preferred Stock or Series A-3 Preferred Stock deliverable upon
such exercise shall be rounded down, if necessary, to the nearest whole share
and the aggregate exercise price shall be rounded up, if necessary, to the
nearest cent, all as specifically reflected on Schedule 2.8 hereto.
SECTION 2.9 -- Appraisal Rights. Notwithstanding any provision of this
Agreement to the contrary, if required by Delaware Law, but only to the extent
required thereby, AmDoc Shares that are issued and outstanding immediately prior
to the Effective Time and that are held by holders of AmDoc Shares who have
properly exercised appraisal rights with respect thereto in accordance with
Section 262 of the Delaware Law (the "Dissenting AmDoc Shares") will not be
exchanged as provided in Section 2.2, and holders of such Dissenting AmDoc
Shares will be entitled to receive payment of the appraised value of such
Dissenting AmDoc Shares in accordance with the provisions of such Section 262
unless and until the holders fail to perfect or effectively withdraw or lose
their rights to appraisal and payment under Delaware Law. If, after the
Effective Time, any such holder fails to perfect or effectively withdraws or
loses such right, such AmDoc Shares will thereupon be treated as if they had
been converted into and become exchangeable for, at the Effective Time, the
consideration set forth in Section 2.2, without any interest thereon. AmDoc will
promptly give ARC notice of any demands received by AmDoc for appraisals of
AmDoc Shares. AmDoc shall not, except with the prior written consent of ARC,
make any payment with respect to any demands for appraisal or settle any such
demands.
SECTION 2.10 -- Escrow of Shares. At the Effective Time, ARC shall (a)
allocate from the shares of ARC Class A Common Stock, ARC Series A-1 Preferred
Stock, ARC Series A-2 Preferred Stock and ARC Series A-3 Preferred Stock to be
delivered to the holders of AmDoc Common Stock, AmDoc Series A Preferred Stock,
AmDoc Series B Preferred Stock and AmDoc Series C Preferred Stock pursuant to
Section 2.5, and shall deliver to LaSalle Bank National Association, Chicago,
Illinois, (the "Escrow Agent"), into escrow, a number of shares of ARC Class A
Common Stock, ARC Series A-1 Preferred Stock, ARC Series A-2 Preferred Stock and
ARC Series A-3 Preferred Stock, in each case rounded up to the nearest whole
share, equal to 20% of the ARC Class A Common Stock, ARC Series A-1 Preferred
Stock, ARC Series A-2 Preferred Stock and ARC Series A-3 Preferred Stock that
would otherwise be issuable to the holders of AmDoc Common Stock, AmDoc Series A
Preferred Stock, AmDoc Series B Preferred Stock and AmDoc Series C Preferred
Stock pursuant to Section 2.5 (collectively, the "AmDoc Escrowed Shares") and
(b) issue and deliver to the Escrow Agent into escrow an additional number of
shares of ARC Class A Common Stock, ARC Series A-1 Preferred Stock, ARC Series
A-2 Preferred Stock and ARC Series A-3 Preferred Stock equal to the number of
AmDoc
8
Escrowed Shares (collectively, the "ARC Escrowed Shares" and, together with the
AmDoc Escrowed Shares, the "Escrowed Shares"). The AmDoc Escrowed Shares shall
be allocated from the shares of ARC Class A Common Stock, ARC Series A-1
Preferred Stock, ARC Series A-2 Preferred Stock and ARC Series A-3 Preferred
Stock to be delivered pursuant to Section 2.5 to each holder of AmDoc Common
Stock, AmDoc Series A Preferred Stock, AmDoc Series B Preferred Stock and AmDoc
Series C Preferred Stock in proportion to each such holder's respective holdings
of AmDoc Common Stock, AmDoc Series A Preferred Stock, AmDoc Series B Preferred
Stock and AmDoc Series C Preferred Stock. The Escrowed Shares shall be held by
the Escrow Agent for the period set forth in the Escrow Agreement (as
hereinafter defined) and delivered by the Escrow Agent to the Persons entitled
thereto, all as provided under the terms of the Escrow Agreement, dated as of
the date hereof, by and among ARC, the Escrow Agent and the AmDoc Stockholders'
Representatives (as defined in Section 2.11 below), in substantially the form of
Exhibit D attached hereto (the "Escrow Agreement").
SECTION 2.11 -- Appointment of Stockholder Representatives. Xxxxxxx Xxxxx
is hereby appointed as the representative (the "AmDoc Preferred Stockholder
Representative") of the holders of the AmDoc Series A Preferred Stock, the
holders of the AmDoc Series B Preferred Stock and the holders of the AmDoc
Series C Preferred Stock (or, after the Effective Time of the Merger, the former
holders of the AmDoc Series A Preferred Stock, the holders of the AmDoc Series B
Preferred Stock and the holders of the AmDoc Series C Preferred Stock) and
Xxxxxx Xxxxxxxx is hereby appointed as the representative (the "AmDoc Common
Stockholder Representative") of the holders of the AmDoc Common Stock (or, after
the Effective Time, the former holders of the AmDoc Common Stock). The AmDoc
Preferred Stockholder Representative and the AmDoc Common Stockholder
Representative are herein referred to as the "AmDoc Stockholder
Representatives." The AmDoc Stockholder Representatives are authorized to act on
behalf of the holders of capital stock of AmDoc in all matters arising under
Section 2.12 of this Agreement and under the Escrow Agreement and action by them
in such capacity shall require the consent of both of them. In the event the
AmDoc Stockholder Representatives are unable to agree on any action, the matter
shall be submitted for resolution to arbitration by a panel of three
arbitrators, one to be selected by the AmDoc Preferred Stockholder
Representative, one to be selected by the AmDoc Common Stockholder
Representative and the third to be selected by the first two arbitrators. The
decision of the arbitrators as to all matters which they are directed to decide
shall be final and binding on the AmDoc Stockholder Representatives. The AmDoc
Preferred Stockholder Representative may be replaced by the affirmative vote of
the Persons who, prior to the Effective Time, were holders of a majority of the
outstanding shares of AmDoc Series A Preferred Stock, AmDoc Series B Preferred
Stock and AmDoc Series C Preferred Stock voting together as a single class on
the basis of one vote per one share. The AmDoc Common Stockholder Representative
may be replaced by an affirmative vote of the Persons who, prior to the
Effective Time, were the holders of a majority of the outstanding shares of
AmDoc Common Stock. The AmDoc Stockholder Representatives shall not be liable,
in their capacity as representatives of the former holders of the AmDoc shares,
to the holders of the AmDoc shares by reason of any error of judgment or for any
act done or step taken (including any settlement of claims pursuant to the terms
of the Escrow Agreement) or omitted by them in good faith or any mistake of fact
or law or for anything which they may do or refrain from doing in connection
herewith, unless caused by or arising out of their own gross negligence or
willful misconduct and may rely on advice of legal counsel and accountants
retained by them for that purpose. If not borne by the non-prevailing party
pursuant to Section 2.12(a), (b) or (c) below, ARC shall pay the costs of such
legal counsel and accountants up to
9
maximum of $15,000. In the event that there is not a determination of the
prevailing party pursuant to Section 2.12(a), (b) or (c) below, any costs of
such legal counsel and accountants in excess of $15,000 shall be paid in cash by
ARC only to the extent that then available AmDoc Escrowed Shares sufficient to
satisfy such excess costs are available to satisfy such excess. Any such excess
costs shall be deemed to be a finally determined ARC Claim and shall be
satisfied in the proportions set forth in Section 2.12(b).
SECTION 2.12 -- Post-Merger Adjustments.
(a) Negative Working Capital Adjustment. As soon as practicable after
the Effective Time, but in no event later than February 15, 2000, ARC shall
prepare and submit to the AmDoc Stockholders' Representatives a statement of the
working capital (defined as current assets less current liabilities but not
including (i) any amounts of indebtedness that were converted into equity
securities of AmDoc prior to the Effective Time or (ii) principal amounts (but
not interest) owed to Premier Research Worldwide Ltd. pursuant to that certain
12-1/2% convertible note dated December 21, 1999 in principal amount equal to
$1,500,000) of AmDoc as of December 31, 1999 (the "Working Capital Statement"),
which Working Capital Statement shall be prepared from the books and records
kept by AmDoc and in accordance with generally accepted accounting principles
applied on a consistent basis ("GAAP"), and shall present fairly as of December
31, 1999, the working capital of AmDoc. The AmDoc Stockholders' Representatives
and their professional advisers shall have twenty (20) business days from the
date of submission of the Working Capital Statement in which to review the
Working Capital Statement, and if, in their reasonable judgment, the Working
Capital Statement does not fairly present the working capital of AmDoc as of
December 31, 1999, the AmDoc Stockholders' Representatives shall have the right
to propose any adjustment thereto within such twenty (20) business day period.
ARC shall cooperate fully in responding to questions and requests for
information submitted by the AmDoc Stockholders' Representatives in connection
with such review, and shall, with reasonable prior notice, provide them with
full access to members of management of ARC who are knowledgeable in the matters
under review and to the books and records of AmDoc to the extent related to the
determination of working capital. Unless the AmDoc Stockholders' Representatives
notify ARC within such twenty (20) business day period that they object to the
Working Capital Statement, the Working Capital Statement shall be binding upon
ARC and the holders of the AmDoc Shares. ARC and the AmDoc Stockholders'
Representatives shall use their best efforts for five (5) business days after
the submission by the AmDoc Stockholders' Representatives of any proposed
adjustment to the Working Capital Statement to resolve any differences. If ARC
and the AmDoc Stockholders' Representatives do not resolve a dispute as to the
content of the Working Capital Statement or as to the adequacy of the access of
information afforded the AmDoc Stockholders' Representatives or their
professional advisers within the five (5) business day period, such dispute may,
at the request of ARC or the AmDoc Stockholders' Representatives, be submitted
for resolution to PricewaterhouseCoopers LLP or such other mutually acceptable
independent public accounting firm as ARC and the AmDoc Stockholders'
Representatives shall determine (the "Auditor"). ARC shall provide to the
Auditor its estimate of the working capital of AmDoc as of December 31, 1999 and
the AmDoc Stockholders' Representatives shall provide to the Auditor their
estimate of the working capital of AmDoc as of December 31, 1999. The Auditor
shall provide ARC and the AmDoc Stockholders' Representatives with its
determination of the working capital of AmDoc as of December 31, 1999 and, for
purposes of this Agreement, the working capital of AmDoc as of December 31, 1999
shall be deemed to be whichever of the estimates is closest to
10
the Auditor's determination. The decision of the Auditor as to all matters which
it is directed hereunder to decide shall be final and binding upon ARC and the
holders of the AmDoc Shares. The non-prevailing party shall bear the fees and
costs of the Auditor and the prevailing party (including attorneys' fees and
expenses) incurred in connection with such dispute, such fees to be paid in cash
by ARC, whether borne by ARC or the holders of the AmDoc Shares, but if borne by
the holders of the AmDoc Shares, such costs and fees shall be added to the
amount of the claim made against the AmDoc Escrowed Shares and allocated in the
manner set forth below with respect to Working Capital Shortfall (as defined
below). If and to the extent that the working capital of AmDoc as of December
31, 1999, as finally agreed by ARC and the AmDoc Stockholders' Representatives
or as determined by the Auditor as set forth above, is less than negative Three
Hundred and Fifty Thousand Dollars (-$350,000) (such amount, the "Working
Capital Shortfall"), ARC and the AmDoc Stockholders' Representatives shall
instruct the Escrow Agent to deliver ARC Escrowed Shares to ARC for due
cancellation pursuant to the terms and conditions of the Escrow Agreement as
follows:
(i) a number of shares of ARC Class A Common Stock equal to (A)
seventy-six and eighteen one-hundredths percent (76.18%) of the Working Capital
Shortfall, divided by (B) $12.00;
(ii) a number of shares of ARC Series A-1 Preferred Stock equal to
(A) six and one one-hundredth percent (6.01%) of the Working Capital Shortfall,
divided by (B) $12.00; and
(iii) a number of shares of ARC Series A-2 Preferred Stock equal
to (A) five and ninety-six one-hundredths percent (5.96%) of the Working Capital
Shortfall, divided by (B) $12.00; and
(iv) a number of shares of ARC Series A-3 Preferred Stock equal to
(A) eleven and eighty-five one-hundredths (11.85%) of the Working Capital
Shortfall, divided by (B) $12.00.
(b) Adjustment for Losses Attributable to Breaches of AmDoc
Representations and Warranties. If, on or prior to the Termination Date (as
defined in the Escrow Agreement), it becomes known to ARC that (i) any of the
representations and warranties set forth in Section 3.3(c)(ii) or 3.5 of this
Agreement were untrue or incorrect as of the date hereof or as of the Closing
Date, (ii) AmDoc's projection as set forth on Section 3.3(c)(ii) of the
Disclosure Schedule as to the number of shares of ARC Series A-6 Preferred Stock
to be issued to Premier Research Worldwide, LLP in connection with agreements
between AmDoc and Premier Research Worldwide, Ltd. in existence at the Closing
Date is less than the number of shares actually issued or (iii) Xxxxx Xxxx fails
to execute or revokes the Settlement Agreement between Xxxxx Xxxx and AmDoc in
the form previously provided to ARC, ARC shall notify the AmDoc Stockholders'
Representatives and the Escrow Agent in writing of the amount of its good faith
estimate of the amount of any claim, loss, liability, damage, cost or expense
resulting from or incurred in connection with the breach of such representation
or warranty, the inaccuracy of such projection or such failure to execute or
revocation, as the case may be, less the amount of any benefits actually
received (a "ARC Claim"), which notice shall include a brief description of the
facts upon which such ARC Claim is based. Upon receipt of the notice of the ARC
Claim, the AmDoc Stockholders' Representatives shall have twenty (20) business
days in which to
11
review such ARC Claim, and if, in their reasonable judgment, they disagree with
the validity of such ARC Claim or with the amount of such ARC Claim, the AmDoc
Stockholders' Representatives may propose an adjustment thereto or propose that
no amount should be paid on account of such ARC Claim within such twenty (20)
business day period. Any proposed adjustment or rejection thereof shall be in
writing and shall be submitted to ARC within such twenty (20) business day
period. ARC shall cooperate fully in responding to questions and requests for
information submitted by the AmDoc Stockholders' Representatives and their
professional advisers in connection with such review, and shall, with reasonable
prior notice, provide them with full access to members of management of ARC who
are knowledgeable in the matters under review and to the books and records of
AmDoc to the extent related to the determination of the ARC Claim. Unless the
AmDoc Stockholders' Representatives notify ARC within such twenty (20) business
day period that they object to the ARC Claim, the ARC Claim shall be binding
upon ARC and the holders of the AmDoc Shares and shall be deemed finally
determined. ARC and the AmDoc Stockholders' Representatives shall use their best
efforts for five (5) business days after the submission of any proposed
adjustment or rejection by the AmDoc Stockholders' Representatives to agree upon
any proposed adjustments to the ARC Claim. If ARC and the AmDoc Stockholders'
Representatives do not resolve a dispute as to the amount or validity of the ARC
Claim within the five (5) business day period, such dispute may, at the request
of ARC or the AmDoc Stockholders' Representatives, be submitted for resolution
to arbitration by a panel of three arbitrators, one to be selected by ARC, one
to be selected by the AmDoc Stockholders' Representatives and the third to be
selected by the first two arbitrators (collectively, the "Arbitrators"). ARC
shall provide to the Arbitrators its estimate of the ARC Claim and the AmDoc
Stockholders' Representatives shall provide to the Arbitrators their estimate of
the ARC Claim. The Arbitrators shall provide ARC and the AmDoc Stockholders'
Representatives with its determination of the ARC Claim and, for purposes of
this Agreement, the ARC Claim shall be deemed to be whichever of the estimates
is closest to the Arbitrators' determination. The decision of the Arbitrators as
to all matters which they are directed hereunder to decide shall be final and
binding upon ARC and the holders of the AmDoc Shares. The non-prevailing party
shall bear the fees and costs of the arbitration and the prevailing party
(including attorneys' fees and expenses) incurred in connection with such
dispute, such fees to be paid in cash by ARC, whether borne by ARC or the
holders of the AmDoc Shares, but if borne by the holders of the AmDoc Shares,
such costs and fees shall be added to the amount of the ARC Claim and allocated
in the manner set forth below. Upon final determination of the ARC Claim as set
forth above, the Escrow Agent shall deliver a number of AmDoc Escrowed Shares to
ARC for due cancellation pursuant to the terms and conditions of the Escrow
Agreement as follows:
(i) a number of shares of ARC Class A Common Stock equal to (A)
seventy-six and eighteen one-hundredths percent (76.18%) of the amount of such
ARC Claim, divided by (B) $12.00;
(ii) a number of shares of ARC Series A-1 Preferred Stock equal to
(A) six and one one-hundredth (6.01%) of the amount of such ARC Claim, divided
by (B) $ 12.00; and
(iii) a number of shares of ARC Series A-2 Preferred Stock equal to
(A) five and ninety-six one-hundredths percent (5.96%) of the amount of such ARC
Claim, divided by (B) $12.00; and
12
(iv) a number of shares of ARC Series A-3 Preferred Stock equal to
(A) eleven and eighty-five one-hundredths percent (11.85%) of the amount of such
ARC Claim, divided by (B) $12.00.
(c) Adjustment for Losses Attributable to Breaches of ARC
Representations and Warranties. If, on or prior to the Termination Date (as
defined in the Escrow Agreement), it becomes known to the AmDoc Stockholders'
Representatives that (i) any of the representations and warranties set forth in
Section 4.3(c)(ii) or 4.5 of this Agreement were untrue or incorrect as of the
date hereof or as of the Closing Date or (ii) AmDoc's projection as set forth on
Section 3.3(c)(ii) of the Disclosure Schedule as to the number of shares of ARC
Series A-6 Preferred Stock to Premier Research Worldwide, Ltd. in connection
with agreements between AmDoc and Premier Research Worldwide, Ltd. in existence
at the Closing Date is more than the number of shares actually issued, the AmDoc
Stockholders' Representatives shall notify ARC and the Escrow Agent in writing
of the amount of their good faith estimate of the amount of any claim, loss,
liability, damage, cost or expense resulting from or incurred in connection with
the breach of such representation or warranty or inaccuracy of such projection,
less the amount of any benefits actually received (an "AmDoc Claim"), which
notice shall include a brief description of the facts upon which such AmDoc
Claim is based. ARC shall cooperate fully in responding to questions and
requests for information submitted by the AmDoc Stockholders' Representatives
and their professional advisers in connection with their determination of an
AmDoc Claim, and shall, with reasonable prior notice, provide them with full
access to members of the management of ARC who are knowledgeable in the matters
under review and to the books and records of AmDoc to the extent related to the
determination of the AmDoc Claim. Upon receipt of the notice of the AmDoc Claim,
ARC shall have twenty (20) business days in which to review such AmDoc Claim,
and if, in its reasonable judgment, it disagrees with the amount of such AmDoc
Claim, ARC may propose an adjustment thereto or propose that no amount should be
paid on account of such ARC Claim within such twenty (20) business day period.
Any proposed adjustment or rejection thereof shall be in writing and shall be
submitted to the AmDoc Stockholders' Representatives within such twenty (20)
business day period. Unless ARC notifies the AmDoc Stockholders' Representatives
within such twenty (20) business day period that it objects to the AmDoc Claim,
the AmDoc Claim shall be binding upon ARC and the holders of the AmDoc Shares
and shall be deemed finally determined. ARC and the AmDoc Stockholders'
Representatives shall use their best efforts for five (5) business days after
the submission of any proposed adjustment or rejection by ARC to agree upon any
proposed adjustments to the AmDoc Claim. If ARC and the AmDoc Stockholders'
Representatives do not resolve a dispute as to the amount or validity of the
AmDoc Claim within the five (5) business day period, such dispute may, at the
request of ARC or the AmDoc Stockholders' Representatives, be submitted for
resolution to arbitration by Arbitrators selected in the manner set forth in
Section 2.12(b). ARC shall provide to the Arbitrators its estimate of the AmDoc
Claim and the AmDoc Stockholders' Representatives shall provide to the
Arbitrators their estimate of the AmDoc Claim. The Arbitrators shall provide ARC
and the AmDoc Stockholders' Representatives with its determination of the AmDoc
Claim and the AmDoc Claim shall be deemed to be whichever of the estimates is
closest to the Arbitrators' determination. The decision of the Arbitrators as to
all matters which they are directed hereunder to decide shall be final and
binding upon ARC and the holders of the AmDoc Shares. The non-prevailing party
shall bear the fees and costs of the arbitration and the prevailing party
(including attorneys' fees and expenses) incurred in connection with such
dispute, such fees to be paid in cash by ARC, whether borne by ARC or the
holders of the AmDoc Shares, but if borne by the holders of the AmDoc Shares,
such costs and
13
fees shall be treated as a finally determined ARC Claim pursuant to Section
12.2(b) and allocated in the manner set forth therein. Upon final determination
of the AmDoc Claim as set forth above, the Escrow Agent shall distribute a
number of ARC Escrowed Shares to the former stockholders of Am Doc pursuant to
the terms and conditions of the Escrow Agreement as follows:
(i) a number of shares of ARC Class A Common Stock equal to (A)
seventy-six and eighteen one-hundredths (76.18%) of the amount of such AmDoc
Claim, divided by (B) $12.00;
(ii) a number of shares of ARC Series A-1 Preferred Stock equal to
(A) six and one one-hundredth (6.01%) of the amount of such AmDoc Claim, divided
by (B) $ 12.00; and
(iii) a number of shares of ARC Series A-2 Preferred Stock equal to
(A) five and ninety-six one-hundredths percent (5.96%) of the amount of such
AmDoc Claim, divided by (B) $12.00; and
(iv) a number of shares of ARC Series A-3 Preferred Stock equal to
(A) eleven and eighty-five one-hundredths percent (11.85%) of the amount of such
AmDoc Claim, divided by (B) $12.00.
Except as provided in Sections 7.1 and 7.2, the remedies provided in this
Section 2.12 shall be the sole and exclusive recourse of the Parties for any
inaccuracy or breach of any of the representations and warranties set forth in
this Agreement; provided, however, that notwithstanding the foregoing, in no
event shall the limitation set forth in this sentence apply to any inaccuracy or
breach of any of the representations and warranties set forth in this Agreement
which constitutes common law fraud.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AMDOC
AmDoc represents and warrants to ARC and Merger Subsidiary that the
statements contained in this Article III are true and correct as of the date of
this Agreement and will be true and correct as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article III), except as set forth in specifically
referenced sections of the disclosure schedule attached hereto (the "Disclosure
Schedule").
SECTION 3.1 -- Organization, Qualification, and Corporate Power. Each of
AmDoc and its Subsidiaries is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation.
Each of AmDoc and its Subsidiaries is duly licensed or qualified to conduct
business and is in good standing as a foreign corporation under the laws of each
jurisdiction where such qualification is required, except where the failure to
be so qualified or in good standing would not have a Material Adverse Effect.
Each of AmDoc and its Subsidiaries has all requisite corporate power and
authority and all governmental licenses, authorizations, consents and approvals
(collectively, "Governmental Licenses") required to own or lease its properties
and to carry on the business in which it is engaged, except for failures to have
any such Governmental
14
License which would not, individually or in the aggregate, have a Material
Adverse Effect. AmDoc has heretofore delivered to ARC true, complete and correct
copies of the certificate of incorporation and the by-laws of AmDoc and each of
its Subsidiaries as currently in effect.
SECTION 3.2 -- Authorization of Transaction; Required Filings and Consents.
AmDoc has the requisite corporate power and authority to enter into, execute
and deliver this Agreement and the Escrow Agreement (collectively, the "AmDoc
Ancillary Documents") and to perform its obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the AmDoc Ancillary Documents and
the performance of AmDoc's obligations hereunder and thereunder have been duly
and validly authorized by the Board of Directors of AmDoc and no other corporate
proceedings on the part of AmDoc are necessary to authorize the execution,
delivery and performance by AmDoc of this Agreement and the AmDoc Ancillary
Documents and to consummate the transactions contemplated hereby and thereby.
The Board of Directors of AmDoc has determined that the transactions
contemplated by this Agreement are in the best interest of AmDoc and its
stockholders and has recommended to such stockholders that they approve and
adopt this Agreement and the transactions contemplated hereby. This Agreement
and each AmDoc Ancillary Document has been duly executed and delivered by AmDoc
and constitutes, assuming due authorization, execution and delivery of this
Agreement and the AmDoc Ancillary Documents by ARC, Merger Subsidiary and the
other parties thereto (other than AmDoc), the valid and binding obligation of
AmDoc, enforceable against AmDoc in accordance with their respective terms.
There is no notice to be given to, filing to be made with, or authorization,
consent, or approval to obtained from any Federal, state, local or foreign
government, court of competent jurisdiction, administrative agency, commission
or other governmental authority or instrumentality (each, a "Governmental
Authority") in connection with the execution and delivery of this Agreement and
the Ancillary Documents in order for the Parties to consummate the transactions
contemplated by this Agreement and the AmDoc Ancillary Documents, except for (a)
the filing of the Certificate of Merger with the Secretary of State of the State
of Delaware and appropriate documents with the relevant authorities of the other
states in which AmDoc is qualified to do business; (b) compliance with any
applicable requirements of state blue sky laws; (c) the due filing of a Form D
evidencing the exchange of AmDoc Shares for shares of ARC Class A Common Stock,
ARC Series A-1 Preferred Stock and ARC Series A-2 Preferred Stock with the
Securities and Exchange Commission; and (d) such other notices, filings,
authorizations, consents or approvals (i) the failure of which to be given, made
or obtained individually or in the aggregate would not reasonably be expected to
have a Material Adverse Effect or (ii) that become applicable as a result of the
business or activities in which ARC or any of its respective Affiliates is or
proposes to be engaged or any acts or omissions by, or facts pertaining to, ARC.
SECTION 3.3 -- Capitalization; Subsidiaries.
(a) The authorized capital stock of AmDoc consists of 2,500,000
shares of AmDoc Common Stock and 1,000,000 shares of AmDoc Preferred Stock, of
which 133,333 have been designated as AmDoc Series A Preferred Stock, 189,500
have been designated as AmDoc Series B Preferred Stock and 263,114 have been
designated as AmDoc Series C Preferred Stock. As of the date hereof, (i)
1,690,903 shares of AmDoc Common Stock are outstanding and no shares of AmDoc
Common Stock are held in AmDoc's treasury and (ii) 509,774 shares of AmDoc
Preferred Stock are outstanding, of which 133,333 shares are AmDoc Series A
Preferred Stock, 113,327 shares are AmDoc Series B Preferred Stock, 263,114
shares are AmDoc Series C Preferred
15
Stock, and no shares of AmDoc Preferred Stock are held in AmDoc's treasury. All
of the issued and outstanding shares of AmDoc Common Stock and AmDoc Preferred
Stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof arising from AmDoc.
(b) An aggregate of 373,140 shares of AmDoc Common Stock are reserved
and authorized for issuance pursuant to AmDoc's 1999 Long-Term Incentive Stock
Option Plan, of which options ("AmDoc Stock Options") to purchase a total of
281,906 shares of AmDoc Common Stock were outstanding as of the date hereof. The
names of the optionees holding AmDoc Stock Options, the date of grant of each
AmDoc Stock Option outstanding as of the date hereof, the number of shares of
AmDoc Common Stock subject to each AmDoc Stock Option, the expiration date of
each such AmDoc Stock Option and the price at which each such AmDoc Stock Option
may be exercised are set forth in Section 3.3(b) of the Disclosure Schedule. No
vesting restrictions of any AmDoc Stock Options will, as a consequence of the
Merger, lapse so as to accelerate the vesting of any such AmDoc Stock Options.
AmDoc does not have and is not bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character to or by which AmDoc
is a party or is bound which, directly or indirectly, obligate AmDoc to issue,
deliver, sell, redeem, repurchase or otherwise acquire any shares of AmDoc
Common Stock, AmDoc Preferred Stock or any other equity security of AmDoc or any
securities representing the right to purchase or otherwise receive any shares of
AmDoc Common Stock, AmDoc Preferred Stock or any other equity security of AmDoc.
AmDoc does not have any outstanding bonds, debentures, notes or other
obligations entitling the holders thereof to vote (or that are convertible into
or exercisable for securities having the right to vote) with the stockholders of
AmDoc on any matter. There are no voting trusts or other agreements or
understanding to which AmDoc or any of its Subsidiaries or, to the Knowledge of
AmDoc, any of AmDoc's directors or executive officers is a party with respect to
the voting of capital stock of AmDoc or any of its Subsidiaries.
(c) (i) Section 3.3(c)(i) of the Disclosure Schedule sets forth a
true, correct and complete list, as of the date prior to the date hereof, of all
outstanding equity securities of AmDoc, including any and all contingent equity
securities, identified by type and amount of equity security and the name of the
holder thereof, and (ii) Section 3.3(c)(ii) of the Disclosure Schedule sets
forth a true, correct and complete list, of all equity securities of AmDoc,
including any and all contingent equity securities, identified by type of amount
of equity security and the name of the holder thereof, as will be outstanding
immediately prior to the Effective Time, including a description of any
conversion, exchange, cancellation or other modification to any AmDoc equity
securities to occur between the date prior to the date hereof and immediately
prior to the Effective Time. AmDoc has received from each of the holders of any
AmDoc equity securities that will be converted, exchanged, canceled or otherwise
modified in the manner reflected on Schedule 3.3(c)(ii) binding agreements
providing for such conversion, exchange, cancellation or other modification.
(d) Section 3.3(d) of the Disclosure Schedule sets forth the name,
jurisdiction of incorporation or organization, and capitalization of each
Subsidiary of AmDoc. AmDoc owns, directly or indirectly, all of the outstanding
capital stock of each of its Subsidiaries. Each share of each Subsidiary owned
directly or indirectly by AmDoc is duly authorized and validly issued and is
fully paid, nonassessable and free of preemptive rights, and each share is free
and clear of all mortgages, liens, security interests, charges, easements,
leases, subleases, covenants, rights of way, options, claims, restrictions or
encumbrances of any kind (collectively "Liens"), and all rights of first refusal
and limitations on AmDoc's voting rights. None of AmDoc's Subsidiaries has or is
bound
16
by any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the sale or issuance by such Subsidiary
or by AmDoc or any other Subsidiary of AmDoc, of any shares of capital stock or
any other equity security of such Subsidiary or any securities representing the
right to purchase or otherwise receive any shares of capital stock or any other
equity security of such Subsidiary. Neither AmDoc nor any of its Subsidiaries
owns of record or beneficially any capital stock or other equity interest or
investment in any other Person (other than, with respect to AmDoc, its
Subsidiaries).
SECTION 3.4 -- Noncontravention. Neither the execution and delivery of this
Agreement or any of the AmDoc Ancillary Documents by AmDoc, nor the performance
by AmDoc of its obligations hereunder or thereunder, will (a) violate, conflict
with or result in a breach of any provision of the certificate of incorporation,
by-laws or equivalent organizational instruments of AmDoc or any of its
Subsidiaries, (b) violate any Applicable Law, injunction, judgment, order,
decree, ruling, charge, or other restriction of any Governmental Authority
applicable to AmDoc or any of its Subsidiaries or by which AmDoc or any of its
Subsidiaries is bound or to which any of their assets is subject or (c) conflict
with, result in a violation or breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, indenture, lease,
Governmental License, instrument, or other arrangement to which AmDoc or any of
its Subsidiaries is a party or by which AmDoc or any of its Subsidiaries is
bound or to which any of their assets is subject (or result in the imposition of
any Lien upon any of their assets), except, with respect to clauses (b) and (c)
above, where the violation, conflict, breach, default, acceleration,
termination, modification, cancellation, failure to give notice, or Lien would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. As used herein, the term "Applicable Law" means any statute, law
(including common law), ordinance, rule or regulation applicable to the Person
referenced.
SECTION 3.5 -- Material Contracts. Except as otherwise provided in Section
3.5 of the Disclosure Schedule, neither AmDoc nor any of its Subsidiaries has
any currently existing contract, obligation, agreement, plan, arrangement,
commitment or the like (written or oral), of any material nature, including,
without limitation, the following:
(i) Employment, bonus or consulting agreements, pension, profit
sharing, deferred compensation, stock bonus, retirement, stock option, stock
purchase, phantom stock, restricted stock or similar plans, including any
agreements under any such agreements or plans evidencing rights to purchase
securities of AmDoc or any of its Subsidiaries and agreements among stockholders
and AmDoc or any of its Subsidiaries;
(ii) Loan or other agreements, notes, indentures, or instruments
relating to or evidencing indebtedness for borrowed money, or mortgaging,
pledging or granting or creating a lien or security interest or other
encumbrance on any of AmDoc's or its Subsidiaries' property or any agreement or
instrument evidencing any guaranty by AmDoc or its Subsidiaries of payment or
performance by any other person involving amounts in excess of $10,000;
(ii) Agreements with any labor union or collective bargaining
organization or other labor agreements;
17
(iv) Any contract or series of contracts with the same person for the
furnishing or purchase of equipment, goods or services, including, without
limitation, agreements with subcontractors, involving amounts in excess of
$50,000;
(v) Any agreements or similar documents relating to the sale or
repurchase of shares of capital stock of AmDoc or any of its Subsidiaries;
(vi) Any joint venture contract or arrangement or other agreement
involving a sharing of profits or expenses to which AmDoc or any of its
Subsidiaries is a party;
(vii) Agreements limiting the ability of AmDoc or any of its
Subsidiaries to compete in any line of business or in any geographic area or
with any person;
(viii) Except for this Agreement and the other agreements
contemplated hereby, agreements providing for disposition or exclusive license
of the business, assets or shares of capital stock of AmDoc or any of its
Subsidiaries, agreements of merger or consolidation to which AmDoc or any of its
Subsidiaries is a party or letters of intent with respect to the foregoing; or
(ix) Agreements pursuant to which any investment banker, broker,
finder or other intermediary would be entitled to any fee or commission from
AmDoc or any of its Subsidiaries, the Surviving Corporation, ARC or any of ARC's
Affiliates, in connection with the execution of this Agreement or in connection
with, or as a result of the consummation of, the transactions contemplated by
this Agreement.
To AmDoc's knowledge, all of the agreements referred to above are
valid, binding and in full force and effect in all material respects and AmDoc
and its Subsidiaries (and to the Knowledge of AmDoc, each other party thereto)
have complied in all material respects with all the material provisions of such
contracts, obligations, agreements, plans, arrangements, and commitments.
SECTION 3.6 -- Tax Treatment. Neither AmDoc nor any of its Subsidiaries,
nor, to the Knowledge of AmDoc, any of their Affiliates, has taken any action or
knows of any fact, agreement, plan or other circumstance that could prevent the
Merger from qualifying as a reorganization under the provision of Section 368(a)
of the Code.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ARC
AND MERGER SUBSIDIARY
ARC and Merger Subsidiary represent and warrant to AmDoc that the
statements contained in this Article IV are true and correct as of the date of
this Agreement and will be true and correct as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article IV), except as set forth in the specifically
referenced sections of the Disclosure Schedule.
SECTION 4.1 -- Organization, Qualification, and Corporate Power. Each of
ARC and its Subsidiaries is a corporation duly organized, validly existing, and
in good standing under the laws
18
of the jurisdiction of its incorporation. Each of ARC and its Subsidiaries is
duly licensed or qualified to conduct business and is in good standing as a
foreign corporation under the laws of each jurisdiction where such qualification
is required, except where the failure to be so qualified or in good standing
would not have a Material Adverse Effect. Each of ARC and its Subsidiaries has
all requisite corporate power and all Governmental Licenses required to own or
lease its properties and to carry on the business in which it is engaged, except
for failures to have any such Governmental License which would not, individually
or in the aggregate, have a Material Adverse Effect. ARC has heretofore
delivered to AmDoc true, complete and correct copies of the certificate of
incorporation and the by-laws of ARC and each of its Subsidiaries as currently
in effect.
SECTION 4.2 -- Authorization of Transaction; Required Filings and Consents.
ARC and Merger Subsidiary each has the requisite corporate power and authority
to enter into, execute and deliver this Agreement and the Escrow Agreement, the
Amended and Restated Registration Rights Agreement, dated as of the date hereof,
among ARC and certain other persons (the "Registration Rights Agreement"), the
Investor Rights Agreement, dated as of the date hereof, among ARC and certain
other persons (the "Investor Rights Agreement," and together with the Escrow
Agreement and the Registration Rights Agreement, the "ARC Ancillary Documents")
and to perform their respective obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the ARC Ancillary Documents and the performance
of ARC's and Merger Subsidiary's respective obligations hereunder and thereunder
have been duly and validly authorized by the Board of Directors of ARC and
Merger Subsidiary, respectively, and by ARC as the sole stockholder of Merger
Subsidiary, and no other corporate proceedings on the part of ARC or Merger
Subsidiary are necessary to authorize the execution, delivery and performance by
ARC and Merger Subsidiary of this Agreement and the ARC Ancillary Documents and
to consummate the transactions contemplated hereby and thereby. This Agreement
has been, and each ARC Ancillary Document at the time of execution will have
been, duly executed and delivered by ARC and Merger Subsidiary and constitutes,
or will constitute, assuming due authorization, execution and delivery of this
Agreement by AmDoc and the other parties thereto (other than ARC and Merger
Subsidiary), the valid and binding obligation of ARC and Merger Subsidiary,
enforceable against ARC and Merger Subsidiary in accordance with its terms.
There is no notice to be given to, filing to be made with, or authorization,
consent, or approval of any Governmental Authority to be obtained in connection
with the execution and delivery of this Agreement in order for the Parties to
consummate the transactions contemplated by this Agreement and the ARC Ancillary
Documents, except for (a) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware; (b) compliance with any applicable
requirements of state blue sky laws; (c) the due filing of a Form D evidencing
the exchange of AmDoc Shares for shares of ARC Class A Common Stock, ARC Series
A-1 Preferred Stock, ARC Series A-2 Preferred Stock and ARC Series A-3 Preferred
Stock with the Securities and Exchange Commission; and (d) such other notices,
filings, authorizations, consents or approvals (i) the failure of which to be
given, made or obtained individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect or (ii) that become applicable as a
result of the business or activities in which AmDoc or any of its respective
Affiliates is or proposes to be engaged or any acts or omissions by, or facts
pertaining to, AmDoc.
SECTION 4.3 -- Capitalization; Subsidiaries; Affiliated Entities.
(a) The authorized capital stock of ARC consists of 25,000,000
shares of ARC Class A Common Stock, 685,324 shares of Class B Common Stock, par
value $0.001 per share
19
("ARC Class B Common Stock" and, together with the ARC Class A Common Stock, the
"ARC Common Stock"), and 10,000,000 shares of Preferred Stock, par value $0.001
per share (the "ARC Preferred Stock"), of which 888,889 shares have been
designated as Series A Preferred Stock, par value $0.001 per share ("ARC Series
A Preferred Stock"), 228,436 shares have been designated as Series B Contingent
Convertible Preferred Stock, par value $0.001 per share ("ARC Series B Preferred
Stock"), 111,879 shares have been designated as Series C Contingent Convertible
Preferred Stock, par value $0.001 per share ("ARC Series C Preferred Stock"),
30,164 shares have been designated as Series E Preferred Stock, par value $0.001
per share ("ARC Series E Preferred Stock") and 2,252,301 shares have been
designated Series A Preferred Stock, par value $0.001 per share ("ARC New Series
A Preferred Stock"). As of the date hereof, 1,483,536 shares of ARC Class A
Common Stock are outstanding, 4,583 shares of ARC Class A Common stock are held
in ARC's treasury, 685,324 shares of ARC Class B Common Stock are outstanding,
no shares of ARC Class B Common Stock are held in ARC's treasury, 888,889 shares
of ARC Series A Preferred Stock are outstanding, 228,436 shares of ARC Series B
Preferred Stock are outstanding, no shares of ARC Series C Preferred Stock are
outstanding, 30,164 shares of ARC Series E Preferred Stock are outstanding,
499,580 shares of ARC New Series A Preferred Stock are outstanding (which shares
have been designated "Series A-5 Preferred Stock"), no other shares of ARC
Preferred Stock are issued or outstanding, and no shares of ARC Preferred Stock
are held in ARC's treasury. All of the issued and outstanding shares of ARC
Common Stock and ARC Preferred Stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof arising from ARC.
(b) An aggregate of 2,362,957 shares of ARC Class A Common Stock and
111,879 shares of ARC Series C Preferred Stock are reserved and authorized for
issuance pursuant to ARC's stock option plans, of which options ("ARC Stock
Options") to purchase a total of 682,709 shares of ARC Class A Common Stock and
105,333 shares of ARC Series C Preferred Stock were outstanding as of the date
hereof. The names of the optionees holding ARC Stock Options, the date of grant
of each ARC Stock Option outstanding as of the date hereof, the number of shares
of ARC Class A Common Stock or ARC Series C Preferred Stock, as the case may be,
subject to each such ARC Stock Option, the expiration date of each such ARC
Stock Option, and the price at which each such ARC Stock Option may be exercised
are set forth in Section 4.3(b) of the Disclosure Schedule. No vesting
restrictions of any ARC Stock Options will, as a consequence of the Merger,
lapse so as to accelerate the vesting of any such ARC Stock Options. ARC does
not have and is not bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character to or by which ARC is a party
or is bound which, directly or indirectly, obligate ARC to issue, deliver, sell,
redeem, repurchase or otherwise acquire any shares of ARC Common Stock, ARC
Preferred Stock or any other equity security of ARC or any securities
representing the right to purchase or otherwise receive any shares of ARC Common
Stock, ARC Preferred Stock or any other equity security of ARC. ARC does not
have any outstanding bonds, debentures, notes or other obligations entitling the
holders thereof to vote (or that are convertible into or exercisable for
securities having the right to vote) with the stockholders of ARC on any matter.
There are no voting trusts or other agreements or understanding to which ARC or
any of its Subsidiaries or, to the Knowledge of ARC, any of ARC's directors or
executive officers is a party with respect to the voting of capital stock of ARC
or any of its Subsidiaries.
(c) (i) Section 4.3(c)(i) of the Disclosure Schedule sets forth a
true, correct and complete list, as of the date prior to the date hereof, of all
outstanding equity securities of ARC, including any and all contingent equity
securities, identified by type and amount of equity security
20
and the name of the holder thereof, and (ii) Section 4.3(c)(ii) of the
Disclosure Schedule sets forth a true, correct and complete list, of all equity
securities of ARC, including any and all contingent equity securities,
identified by type and amount of equity security and the name of the holder
thereof, as will be outstanding immediately prior to the Effective Time,
including a description of any conversion, exchange, cancellation or other
modification to any ARC equity securities to occur between the date prior to the
date hereof and immediately prior to the Effective Time. ARC has received from
each of the holders of any ARC equity securities that will be converted,
exchanged, canceled or otherwise modified in the manner reflected on Schedule
4.3(c)(ii) binding agreements providing for such conversion, exchange,
cancellation or other modification.
(d) Section 4.3(d) of the Disclosure Schedule sets forth the name,
jurisdiction of incorporation or organization, and capitalization of each
Subsidiary of ARC. ARC owns, directly or indirectly, all of the outstanding
capital stock of its Subsidiaries. Each share of each Subsidiary owned directly
or indirectly by ARC is duly authorized and validly issued and is fully paid,
nonassessable and free of preemptive rights and is free and clear of all Liens,
rights of first refusal and limitations on ARC's voting rights. None of ARC's
Subsidiaries has or is bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling for the sale
or issuance by such Subsidiary, or by ARC or any other Subsidiary of ARC, of any
shares of capital stock or any other equity security of such Subsidiary or any
securities representing the right to purchase or otherwise receive any shares of
capital stock or any other equity security of such Subsidiary. Neither ARC nor
any of its Subsidiaries owns of record or beneficially any capital stock or
other equity interest or investment in any other Person (other than, with
respect to ARC, its Subsidiaries).
SECTION 4.4 -- Noncontravention. Neither the execution and delivery of this
Agreement or any of the ARC Ancillary Documents by ARC and Merger Subsidiary,
nor the performance by ARC and Merger Subsidiary of their respective obligations
hereunder or thereunder, will (a) violate, conflict with or result in a breach
of any provision of the certificate of incorporation, by-laws or equivalent
organizational instruments of ARC or any of its Subsidiaries, (b) violate any
Applicable Law, injunction, judgment, order, decree, ruling, charge, or other
restriction of any Governmental Authority applicable to ARC or any of its
Subsidiaries or by which ARC or any of its Subsidiaries is bound or to which any
of their assets is subject or (c) conflict with, result in a violation or breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, indenture, lease, Governmental License, instrument,
or other arrangement to which ARC or any of its Subsidiaries is a party or by
which ARC or any of its Subsidiaries is bound or to which any of their assets is
subject (or result in the imposition of any Lien upon any of their assets),
except, with respect to clauses (b) and (c) above, where the violation,
conflict, breach, default, acceleration, termination, modification,
cancellation, failure to give notice, or Lien would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 4.5 -- Material Contracts. Except as otherwise provided in Section
4.5 of the Disclosure Schedule, neither ARC nor any of its Subsidiaries has any
currently existing contract, obligation, agreement, plan, arrangement,
commitment or the like (written or oral), of any material nature, including,
without limitation, the following:
(i) Employment, bonus or consulting agreements, pension, profit
sharing, deferred compensation, stock bonus, retirement, stock option, stock
purchase, phantom stock,
21
restricted stock or similar plans, including any agreements under any such
agreements or plans evidencing rights to purchase securities of ARC or any of
its Subsidiaries and agreements among stockholders and ARC or any of its
Subsidiaries;
(ii) Loan or other agreements, notes, indentures, or instruments
relating to or evidencing indebtedness for borrowed money, or mortgaging,
pledging or granting or creating a lien or security interest or other
encumbrance on any of ARC's or its Subsidiaries' property or any agreement or
instrument evidencing any guaranty by ARC or its Subsidiaries of payment or
performance by any other person involving amounts in excess of $10,000;
(iii) Agreements with any labor union or collective bargaining
organization or other labor agreements;
(iv) Any contract or series of contracts with the same person for the
furnishing or purchase of equipment, goods or services, including, without
limitation, agreements with subcontractors, involving amounts in excess of
$50,000;
(v) Any agreements or similar documents relating to the sale or
repurchase of shares of capital stock of ARC or any of its Subsidiaries;
(vi) Any joint venture contract or arrangement or other agreement
involving a sharing of profits or expenses to which ARC or any of its
Subsidiaries is a party;
(vii) Agreements limiting the ability of ARC or any of its
Subsidiaries to compete in any line of business or in any geographic area or
with any person;
(viii) Except for this Agreement and the other agreements
contemplated hereby, agreements providing for disposition or exclusive license
of the business, assets or shares of capital stock of ARC or any of its
Subsidiaries, agreements of merger or consolidation to which ARC or any of its
Subsidiaries is a party or letters of intent with respect to the foregoing; or
(ix) Agreements pursuant to which any investment banker, broker,
finder or other intermediary would be entitled to any fee or commission from ARC
or any of its Subsidiaries, the Surviving Corporation, ARC or any of ARC's
Affiliates, in connection with the execution of this Agreement or in connection
with, or as a result of the consummation of, the transactions contemplated by
this Agreement.
To ARC's knowledge, all of the agreements referred to above are valid,
binding and in full force and effect in all material respects and ARC and its
Subsidiaries (and to the Knowledge of ARC, each other party thereto) have
complied in all material respects with all the material provisions of such
contracts, obligations, agreements, plans, arrangements, and commitments.
22
ARTICLE V
COVENANTS AND AGREEMENTS
SECTION 5.1 -- Conduct of AmDoc and ARC. From the date hereof until the
Effective Time, AmDoc and ARC and their respective Subsidiaries shall conduct
their businesses in the ordinary course and use their reasonable best efforts to
maintain in effect all existing material qualifications, licenses, Permits and
approvals, preserve intact their business organizations and relationships with
third parties and to keep available the services of their present officers and
employees. Without limiting the generality of the foregoing, other than as
specifically contemplated by this Agreement or with the written consent of ARC,
in the case of AmDoc, or AmDoc, in the case of ARC (which consent shall not be
unreasonably withheld or delayed), from the date of hereof until the Effective
Time (excluding the execution of this Agreement and the other agreements
contemplated hereby and executed on or before the date hereof), neither AmDoc
nor ARC shall (and neither shall permit any of its respective Subsidiaries to):
(a) declare, set aside or pay any dividend or other distribution with
respect to any shares of capital stock (other than dividends and distributions
by a direct or indirect wholly owned subsidiary of AmDoc or ARC to its parent)
or repurchase, redeem or otherwise acquire any outstanding shares of capital
stock or other equity securities of, or other ownership interests in, AmDoc or
any of its Subsidiaries, or ARC or any of its Subsidiaries, as the case may be,
except in connection with (i) the issuance of shares of ARC Class A Common Stock
or ARC Series C Preferred Stock upon the exercise of ARC Stock Options
outstanding as of or granted pursuant to stock option plans existing on the date
hereof, (ii) the repurchase of shares of ARC Class A Common Stock pursuant to
clinical research services agreements entered into by ARC prior to the date
hereof, (iii) the issuance of shares of ARC Class A Common Stock upon the
exercise of warrants outstanding as of the date hereof, (iv) the redemption of
shares of ARC Series A Preferred Stock in accordance with the terms thereof, (v)
the issuance of shares of ARC or AmDoc upon exercise or conversion of the
warrants, options and certain convertible promissory notes of ARC as set forth
on Section 3.3(c)(ii) or Section 4.3(c)(ii) of the Disclosure Schedule and (vi)
the issuance of shares of ARC Series A-4 Preferred Stock or ARC Series A-5
Preferred Stock as set forth on Section 4.3(c)(ii) of the Disclosure Schedule;
(b) issue, deliver, pledge or sell shares of capital stock or any
securities convertible into or exchangeable or exercisable for, or any rights,
warrants or options to acquire, any such shares, except for (i) the issuance of
ARC Class A Common Stock or ARC Series C Preferred Stock upon the exercise of
ARC Stock Options or warrants outstanding as of or granted pursuant to stock
option plans existing on the date hereof, (ii) the issuance of AmDoc Common
Stock or AmDoc Preferred Stock upon the exercise of AmDoc Contingent Rights
outstanding as of the date hereof, (iii) the issuance of shares of ARC Class A
Common Stock upon conversion of shares of ARC Preferred Stock or ARC Class B
Common Stock or upon exercise of warrants outstanding on the date hereof, (iv)
the issuance of shares of ARC or AmDoc upon conversion of promissory notes of
ARC or AmDoc outstanding on the date hereof and as set forth on Section
3.3(c)(ii) or Section 4.3(c)(ii) of the Disclosure Schedules, (v) the issuance
of shares of ARC Class A Common Stock to Xxxxx Associates pursuant to that
certain agreement, dated as of December 1, 1999, between ARC and Xxxxx
Associates, (vi) the issuance of shares of ARC Series A-4 Preferred Stock or ARC
Series A-5 Preferred Stock, as set forth on Section 4.3(c)(ii) of the Disclosure
Schedule; and (viii) the issuance of shares of AmDoc Common Stock or AmDoc
Preferred Stock upon conversion,
23
exchange, cancellation or other modification of AmDoc equity securities as
contemplated by Section 3.3(c)(ii) of the Disclosure Schedule.
(c) except as specifically contemplated by this Agreement (including,
without limitation, in connection with the exchange of ARC Series A Preferred
Stock for ARC Series A-4 Preferred Stock as set forth on Schedule 4.3(c)(ii)),
amend any material term of any outstanding security issued by AmDoc or ARC or
any of their Subsidiaries;
(d) except in the ordinary course of business, incur any indebtedness
for borrowed money or issue any debt securities, or assume, guarantee, endorse
or otherwise as an accommodation become responsible for the obligations of any
Person other than AmDoc or any of its Subsidiaries or ARC or any of its
Subsidiaries, as the case may be, or other than pursuant to commitments made on
or prior to the date hereof and for which binding agreements for conversion
thereof into shares of AmDoc Common Stock or AmDoc Preferred Stock as set forth
in Section 3.3(c)(ii) have been executed;
(e) create or assume any Lien on any of its assets, other than
Permitted Liens or Liens which, in the aggregate, do not have and could not
reasonably be expected to have a Material Adverse Effect;
(f) change any method of accounting or accounting practice, except
for any such change required by reason of a change in GAAP;
(g) except as specifically contemplated by this Agreement, (i) grant
any severance or termination pay to any directors, officers or employees
(current, former or retired), (ii) enter into any employment, deferred
compensation or other similar agreement (or any amendment to any such existing
agreement) with any directors, officers or employees, (iii) increase the
benefits payable under any existing severance or termination pay policies or
employment agreements or (iv) increase the compensation, bonus or other benefits
payable to any directors, officers or employees;
(h) consummate (or enter into any agreement or agreement in principle
with respect to or take any steps to facilitate) any merger, business
combination, sale of stock or sale of material assets or any acquisition of
stock or assets or operations of another entity, or write off as uncollectible
any notes or accounts receivable or write down the value of any inventory;
(i) dispose of or permit to lapse any rights in any intellectual
property or disclose to any Person not an employee or otherwise dispose of any
trade secret, process or know-how not heretofore a matter of public knowledge,
except pursuant to judicial order or process;
(j) except as specifically contemplated by this Agreement, amend the
certificate of incorporation or by-laws or comparable organizational documents
of AmDoc or any of its Subsidiaries or ARC or any of its Subsidiaries;
(k) alter (through merger, liquidation, reorganization, restructuring
or any other fashion) the corporate structure or ownership of AmDoc or any of
its Subsidiaries or ARC or any of its Subsidiaries, except for the issuance or
repurchase of capital stock pursuant to Section 5.1(a) or (b) or as otherwise
specifically contemplated by this Agreement;
24
(l) make any tax election or settle or compromise any material
federal, state, local or foreign tax liability;
(m) sell, lease, license, close or otherwise dispose of any of assets
of AmDoc or any of its Subsidiaries or ARC or any of its Subsidiaries, except in
the ordinary course of business;
(n) acquire any material interest in any Person (whether by purchase
of assets, purchase of stock or otherwise), or enter into or amend, in any
material respect, any joint venture or partnership;
(o) make any capital expenditures other than capital expenditures
contemplated by such Party's capital expenditure budget approved by its Board of
Directors, other than in the ordinary course of business consistent with past
practice;
(p) elect, appoint or remove the Chief Executive Officer, President,
Chief Financial Officer or any Vice President;
(q) except as contemplated by this Agreement, amend its By-laws to
increase the size of the Board of Directors;
(r) enter into or amend, in any material respect, any material
contract, other than in the ordinary course of business consistent with past
practice;
(s) incur any material obligation or liability, including without
limitation any liability for non-performance or termination of any contract or
agreement, except liabilities or obligations incurred in the ordinary course of
business; or
(t) authorize any of, or commit or agree to take any of, the
foregoing actions except as otherwise permitted by this Agreement.
SECTION 5.2 -- Information Statement. AmDoc and ARC will (a) as promptly as
practicable following the date of this Agreement, prepare an information
statement to be distributed in connection with the Merger to each of the AmDoc
stockholders that is not a party to the written consent of Stockholders adopting
the Merger (the "Information Statement"), and mail the Information Statement to
each of such AmDoc stockholders as promptly as practicable after the date hereof
and (b) otherwise comply in all material respects with all legal requirements of
Applicable Law in connection with the preparation and mailing of such
Information Statement.
25
SECTION 5.3 -- Compliance with Laws; Information Statement; Other Actions.
(a) ARC and AmDoc each covenant and agree that the Information
Statement will comply in all material respects with the provisions of the
Securities Act of 1933, as amended (the "Securities Act") and the rules and
regulations thereunder (including, without limitation, the provisions of
Regulation D thereunder), except that (i) no representation is made by ARC with
respect to statements made therein based on information supplied by AmDoc in
writing for inclusion therein or with respect to omitted information regarding
AmDoc so required to be included therein and (ii) no representation is made by
AmDoc with respect to statements made therein based on information supplied by
ARC in writing for inclusion therein or with respect to omitted information
regarding ARC so required to be included therein. ARC and AmDoc shall take all
actions necessary to cause the exchange of AmDoc Shares pursuant to Section 2.2
to (i) qualify for an exemption from registration under the Securities Act
pursuant to Regulation D promulgated thereunder and (ii) to be qualified under
applicable state securities or "blue sky" laws, and neither ARC nor AmDoc shall
take any action inconsistent therewith.
(b) AmDoc covenants that none of the information supplied in writing
by AmDoc for inclusion or incorporation by reference in the Information
Statement will, at the time the Information Statement is mailed to the
stockholders of AmDoc or at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstance
under which they were made, not misleading.
(c) ARC covenants that none of the information supplied in writing by
ARC for inclusion or incorporation by reference in the Information Statement
will, at the time the Information Statement is mailed to the stockholders of
AmDoc or at the Effective Time, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances in which they
were made, not misleading.
(d) As promptly as practicable after the date of this Agreement, each
of AmDoc and ARC shall use its respective best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other party in doing, all things necessary, proper or advisable to
consummate and make effective the Merger and to identify and address issues
(including but not limited to issues arising in connection with change in
control covenants under existing financing agreements, stock options and
employment agreements) relating to the operation of the respective companies
following the Merger.
SECTION 5.4 -- No Solicitation. (a) From the date hereof until the
termination of this Agreement, AmDoc and its Subsidiaries shall not (whether
directly or indirectly through advisors, agents or other intermediaries), and
AmDoc shall use its reasonable best efforts to ensure that the respective
officers, directors, advisors, representatives or other agents of AmDoc and its
Subsidiaries will not, directly or indirectly, (i) solicit, initiate or
encourage any AmDoc Acquisition Proposal or (ii) engage in discussions or
negotiations with, or disclose any non-public information relating to AmDoc or
any of its Subsidiaries or afford access to the properties, books or records of
AmDoc or any of its Subsidiaries to, any Person that has made, or has indicated
its interest in making, an AmDoc Acquisition Proposal. For purposes of this
Agreement, "AmDoc Acquisition Proposal" means any offer or proposal for, or
public announcement of an intention (whether or not conditional)
26
to propose, a merger, consolidation, recapitalization, liquidation or other
business combination involving AmDoc or any of its Subsidiaries or the
acquisition or purchase of 15% or more of any class of equity securities of
AmDoc or any of its Subsidiaries, or any tender offer (including self-tenders)
or exchange offer that if consummated would result in any Person beneficially
owning 15% or more of any class of equity securities of AmDoc or any of its
Subsidiaries, or a substantial portion of the assets of, AmDoc or any of its
Subsidiaries, other than the transactions contemplated by this Agreement.
(b) From the date hereof until the termination of this Agreement, ARC
and its Subsidiaries shall not (whether directly or indirectly through advisors,
agents or other intermediaries), and ARC shall use its reasonable best efforts
to ensure that the respective officers, directors, advisors, representatives or
other agents of ARC and its Subsidiaries will not, directly or indirectly, (i)
solicit, initiate or encourage any ARC Acquisition Proposal or (ii) engage in
discussions or negotiations with, or disclose any non-public information
relating to ARC or any of its Subsidiaries or afford access to the properties,
books or records of ARC or any of its Subsidiaries to, any Person that has made,
or has indicated its interest in making, a ARC Acquisition Proposal. For
purposes of this Agreement, "ARC Acquisition Proposal" means any offer or
proposal for, or public announcement of an intention (whether or not
conditional) to propose, a merger, consolidation, recapitalization, liquidation
or other business combination involving ARC or any of its Subsidiaries or the
acquisition or purchase of 15% or more of any class of equity securities of ARC
or any of its Subsidiaries, or any tender offer (including self-tenders) or
exchange offer that if consummated would result in any Person beneficially
owning 15% or more of any class of equity securities of ARC or any of its
Subsidiaries, or a substantial portion of the assets of, ARC or any of its
Subsidiaries, other than the transactions contemplated by this Agreement.
SECTION 5.5 -- Takeover Statute. If any "fair price," "moratorium,"
"control share acquisition" or other form of antitakeover statute or regulation,
including, without limitation, the provisions of Section 203 of Delaware Law,
shall become applicable to the transactions contemplated hereby, AmDoc, ARC and
each of their Board of Directors has granted such approvals and take such
actions as are necessary so that the transactions contemplated hereby may be
consummated as promptly as practicable on the terms contemplated hereby and
otherwise act to eliminate or minimize the effects of such statute or regulation
on the transactions contemplated hereby.
SECTION 5.6 -- Tax Treatment. ARC and AmDoc shall take all actions
necessary to cause the Merger to qualify as a reorganization under the
provisions of Section 368(a) of the Code, and neither ARC nor AmDoc will take
any action inconsistent therewith.
SECTION 5.7 -- Conveyance Taxes. ARC and AmDoc shall cooperate in the
preparation, execution and filing of all Tax Returns, questionnaires,
applications, or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp Taxes, any transfer,
recording, registration and other fees, and any similar Taxes that become
payable in connection with the transactions contemplated hereunder that are
required or permitted to be filed on or before the Effective Time.
SECTION 5.8 -- Access to Information; Confidentiality Agreement. Upon
reasonable advance notice, between the date hereof and the Effective Time, ARC
and AmDoc shall (i) give to one another and to one another's counsel, financial
advisors, auditors and other authorized
27
representatives (collectively, "Representatives") reasonable access during
normal business hours to its and its Subsidiaries books and records, (ii)
furnish to one another and to one another's Representatives such financial and
operating data and other information as such Persons may reasonably request and
(iii) instruct their respective key management employees, counsel and financial
advisors to cooperate with one another in their respective investigations of the
business of AmDoc and ARC; provided that all requests for information or to
interview ARC's or AmDoc's key management employees should be directed to and
coordinated with the chief executive officer of ARC and the chief executive
officer of AmDoc, respectively, or such person or persons as each such officer
shall designate; and provided further that any information and documents
received by AmDoc, ARC and their respective Representatives (whether furnished
before or after the date of this Agreement) shall be held in strict confidence
in accordance with the Confidentiality Agreement dated as of December ___, 1999,
as amended, between ARC and AmDoc (the "Confidentiality Agreement"), which shall
remain in full force and effect pursuant to the terms thereof, notwithstanding
the execution and delivery of this Agreement, the termination hereof or the
Closing. Notwithstanding anything to the contrary in this Agreement, neither
AmDoc nor ARC shall be required to disclose any information to the other or the
other's Representatives if doing so would violate any agreement, law, rule or
regulation to which AmDoc or ARC or any of their respective Subsidiaries is a
party or is subject.
SECTION 5.9 -- Obligations of Merger Subsidiary. Merger Subsidiary will,
and ARC will take all action necessary to cause Merger Subsidiary to, perform
its obligations under this Agreement and to consummate the Merger on the terms
and subject to the conditions set forth in this Agreement.
SECTION 5.10 -- Director and Officer Liability. All rights to
indemnification and all limitations on liability existing in favor of each
person who at or prior to the Effective Time was an officer or director of AmDoc
or any of its Subsidiaries, as provided in the applicable certificate of
incorporation and by-laws of AmDoc and its Subsidiaries, or in an agreement
between any of such persons and AmDoc or any of its Subsidiaries as in effect as
of the date hereof, shall survive the Merger and continue in full force and
effect, notwithstanding any termination of the status of such person as an
officer or director and notwithstanding the completion of the Merger.
SECTION 5.11 -- Notices and Consents. AmDoc and ARC shall cooperate with
one another (a) in determining whether any action by or in respect of, or filing
with, any Governmental Authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
contracts in connection with the consummation of the transactions contemplated
by this Agreement and (b) in seeking any such actions, consents, approvals or
waivers or making any such filings, furnishing information required in
connection therewith and seeking timely to obtain any such actions, consents,
approvals or waivers.
SECTION 5.12 -- Notice; Supplements to Disclosure Schedule. AmDoc and ARC
will each promptly give notice to the other Party of, upon receipt of notice or
Knowledge of, any fact or the occurrence of any event or the failure of any
event to occur which would or could reasonably be expected to make any
representation or warranty by AmDoc or ARC, as the case may be, contained herein
untrue or result in the failure to satisfy any of the conditions specified in
Section 6.1, 6.2 or 6.3 hereof, as applicable, and AmDoc and ARC will each keep
the other Party informed on a regular basis as to the status of such events.
From time to time prior to the Effective Time, AmDoc and ARC will each promptly
supplement or amend the Disclosure Schedule with respect to any matter
28
hereafter arising which, if existing or occurring at the date of this Agreement,
would have been required to be set forth in the Disclosure Schedule. However, no
such supplement or amendment of the Disclosure Schedule shall be deemed to cure
any breach of any representation, warranty or agreement made in this Agreement
unless AmDoc or ARC, as the case may be, specifically agrees thereto in writing.
SECTION 5.13 -- Employee Benefit Plans. Prior to the Closing, AmDoc shall
take such action as may be necessary to terminate the AmDoc 401(k) Profit
Sharing Plan and Trust (the "AmDoc 401(k) Plan"), effective prior to the Closing
Date. As soon as practicable following the effective date of such termination,
AmDoc shall obtain from the Internal Revenue Service a determination that the
AmDoc 401(k) Plan was "qualified" upon its termination pursuant to Section
401(a) of the Code and that its related trust was exempt under Section 501(a) of
the Code. As soon a practicable after obtaining such favorable determination
letter from the Internal Revenue Service, AmDoc shall cause the assets of the
AmDoc 401(k) Plan to be distributed to the extent permitted by Applicable Law
and the terms of the AmDoc 401(k) Plan.
SECTION 5.14 -- Stock Option Matters. As soon as practicable following the
Effective Time, the Compensation Committee of the Board of Directors of ARC
shall consider in good faith whether and to what extent it would be appropriate
or desirable to reprice or otherwise modify stock options received by holders of
AmDoc Shares pursuant to Section 2.8 hereof or grant to such persons additional
stock options.
SECTION 5.15 -- Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of AmDoc and Merger Subsidiary,
any deeds, bills of sale, assignments or assurances and to take and do, in the
name and on behalf of AmDoc and Merger Subsidiary, any other actions to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets of AmDoc acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger.
ARTICLE VI
CONDITIONS TO THE MERGER
SECTION 6.1 -- Conditions to Obligations of Each Party to Effect the
Merger. The respective obligations of each Party to effect the Merger shall be
subject to the following conditions:
(a) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order, judgment, decree, statute,
law, ordinance, rule or regulation, entered, enacted, promulgated, enforced or
issued by any Governmental Authority of competent jurisdiction or other legal
restraint or prohibition (collectively, "Restraints") shall be in effect (i)
preventing the consummation of the Merger, or (ii) which otherwise is reasonably
likely to have a Material Adverse Effect on ARC or AmDoc, as applicable;
provided, however, that each of the Parties shall have used its reasonable best
efforts to prevent the entry of any such Restraints and to appeal as promptly as
possible any such Restraints that may be entered;
(b) Governmental and Regulatory Approvals. All consents, approvals
and actions of, filings with and notices to any Governmental Authority required
of AmDoc, ARC or any of their
29
Subsidiaries to consummate the Merger and the other transactions contemplated
hereby shall have been obtained (other than the filing of the Certificate of
Merger provided for under Section 1.3), all in form and substance reasonably
satisfactory to ARC and AmDoc; and
(c) Tax Opinion. AmDoc shall have received from Battle Xxxxxx LLP,
counsel to AmDoc, on the Closing Date, an opinion, dated as of the Closing Date
and stating that the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code and that ARC,
Merger Subsidiary and AmDoc will each be a party to that reorganization within
the meaning of Section 368(b) of the Code and that no gain or loss will be
recognized by the stockholders of AmDoc upon their exchange of AmDoc Common
Stock or AmDoc Preferred Stock, as the case may be, for ARC Class A Common Stock
or ARC Preferred Stock, as the case may be, under Section 354 of the Code
(except to the extent such a stockholder receives cash in lieu of fractional
shares and to the extent of a payment of transfer taxes made on behalf of such
stockholder, if any).
SECTION 6.2 -- Additional Conditions to Obligations of AmDoc. The
obligations of AmDoc to effect the Merger are also subject to the fulfillment of
the following conditions:
(a) Representations and Warranties. The representations and
warranties of ARC and Merger Subsidiary contained in Sections 4.1, 4.2 and 4.4
of this Agreement shall be true and correct in all respect when made and at and
as of the Closing Date, as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such date), except
where the failure of such representations and warranties to be so true and
correct (without giving effect to any limitation as to "materiality" or
"Material Adverse Effect" set forth therein) does not have, and is not likely to
have, individually or in the aggregate, a Material Adverse Effect on ARC or the
transactions contemplated hereby; and
(b) Covenants. ARC and Merger Subsidiary shall have performed or
complied in all material respects with the terms and provisions of Section 5.1
of this Agreement.
SECTION 6.3 -- Additional Conditions to Obligations of ARC and Merger
Subsidiary. The obligations of ARC and Merger Subsidiary to effect the Merger
are also subject to the fulfillment of the following conditions:
(a) Representations and Warranties. The representations and
warranties of AmDoc contained in Sections 3.1, 3.2 and 3.4 of this Agreement
shall be true and correct in all respect when made and at and as of the Closing
Date, as if made at and as of such time (except to the extent expressly made as
of an earlier date, in which case as of such date), except where the failure of
such representations and warranties to be so true and correct (without giving
effect to any limitation as to "materiality" or "Material Adverse Effect" set
forth therein) does not have, and is not likely to have, individually or in the
aggregate, a Material Adverse Effect on AmDoc or the transactions contemplated
hereby;
(b) Covenants. AmDoc shall have performed or complied in all material
respects with the provisions of Section 5.1 of this Agreement.
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ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 -- Termination. This Agreement may be terminated at any time
before the Effective Time, in each case as authorized by the respective Board of
Directors of AmDoc or ARC:
(a) by mutual written consent of each of AmDoc and ARC;
(b) by either AmDoc or ARC if the Merger shall not have been
consummated on or before January 31, 2000 (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section 7.1(b)
shall not be available to any Party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure of the
Effective Time to occur on or before the Termination Date;
(c) by either AmDoc or ARC if (i) a statute, rule, regulation or
executive order shall have been enacted, entered or promulgated prohibiting the
consummation of the Merger substantially on the terms contemplated hereby or
(ii) an order, decree, ruling or injunction shall have been entered permanently
restraining, enjoining or otherwise prohibiting the consummation of the Merger
substantially on the terms contemplated hereby and such order, decree, ruling or
injunction shall have become final and non-appealable and the party seeking to
terminate this Agreement pursuant to this clause 7.1(c)(ii) shall have used its
reasonable best efforts to remove such injunction, order or decree; or
(d) by either AmDoc or ARC if (i) the other shall have breached, or
failed to comply with, in any material respect the provisions of Section 5.1 of
this Agreement or the representations or warranties made by AmDoc, ARC or Merger
Subsidiary, as the case may be, in Sections 3.1, 3.2, 3.4, 4.1, 4.2 or 4.4 shall
have been incorrect in any material respect when made or shall have since ceased
to be true and correct in any material respect, and (ii) such breach, failure or
misrepresentation is not cured within thirty (30) days after notice thereof and
(iii) such breach, failure or misrepresentation would cause the condition set
forth in Section 6.2(a) or 6.3(a), as the case may be, not to be satisfied.
SECTION 7.2 -- Effect of Termination. In the event of termination of this
Agreement as provided in Section 7.1 hereof, and subject to the provisions of
Section 8.1 hereof, this Agreement shall forthwith become void and there shall
be no liability on the part of any of the Parties, except (i) as set forth in
Section 8.3 hereof; and (ii) nothing herein shall relieve any Party from
liability for any wilful breach hereof.
SECTION 7.3 -- Amendment. This Agreement may be amended by the Parties
pursuant to a writing adopted by action taken by each of AmDoc and ARC at any
time before the Effective Time; provided, however, that, after approval of the
Merger Agreement by the stockholders of AmDoc, no amendment may be made which by
law would require further approval by such stockholders without the further
approval of such stockholders. This Agreement may not be amended except by an
instrument in writing signed by the Parties.
SECTION 7.4 -- Waiver. At any time before the Effective Time, a Party may
(a) extend the time for the performance of any of the obligations or other acts
of the other Parties, (b) waive any
31
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) subject to the proviso of Section
7.3, waive compliance by the other Parties 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 as against such Party and only if set
forth in an instrument in writing signed by such Party.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1 -- Non-Survival of Representations, Warranties and Agreements.
Except as contemplated by Section 2.12 of this Agreement, the representations,
warranties and agreements in this Agreement shall terminate at the Effective
Time, except that the agreements set forth in Article I and Sections 2.4, 2.5,
2.6, 2.7, 2.8, 2.9 and 5.10 hereof shall survive the Effective Time
indefinitely. The representations, warranties and agreements in this agreement
shall terminate upon the termination of this Agreement pursuant to Section 7.1
hereof, except that the agreements set forth in Sections 7.2, 8.3, 8.9, 8.10,
8.11, 8.12 and 8.13 hereof shall survive termination indefinitely. Nothing
contained herein shall limit any covenant or agreement of the Parties which by
its terms contemplates performance after the Effective Time.
SECTION 8.2 -- Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date of receipt and shall be delivered personally or mailed by
registered or certified mail (postage prepaid, return receipt requested), sent
by overnight courier or sent by telecopy, to the Parties at the following
addresses or telecopy numbers (or at such other address or telecopy number for a
Party as shall be specified by like notice):
(a) if to AmDoc:
00000 Xxx Xxx Xxxxxxxxx
Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, M.D.
Telecopy No.: (000) 000-0000
with a copy to:
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
(b) if to ARC or Merger Subsidiary:
0000 Xxx-Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
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Attention: Xxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
SECTION 8.3 -- Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Party incurring such costs and
expenses, except that the reasonable costs and expenses of the parties related
to attorneys fees and expenses shall be borne by ARC following the Effective
Time.
SECTION 8.4 -- Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
(a) "Business Day" means any day other than a Saturday, a Sunday or a
day on which commercial banks located in the State of Illinois are authorized or
required by law or other governmental action to be closed for business.
(b) "Knowledge" means, with respect to any Person that is not an
individual, the knowledge of such Person's executive officers after reasonable
inquiry.
(c) "Material Adverse Effect" means a material adverse effect (i) on
the condition (financial or otherwise), business, assets, liabilities,
properties or results of operations of AmDoc and its Subsidiaries taken as a
whole, or ARC and its Subsidiaries taken as a whole, as the case may be, that is
not a result of general changes in the economy or the industries in which such
entities operate, or (ii) on the ability of AmDoc, or ARC, as the case may be,
to perform any material obligations hereunder or under the transactions
contemplated hereby ; provided, however, that Material Adverse Effect shall not
be deemed to include the impact of (A) actions or omissions of AmDoc or ARC
taken with the prior written consent of AmDoc or ARC, as applicable, in
contemplation of the transactions contemplated hereby, (B) changes in GAAP and
(c) general changes in the economy or the industries in which AmDoc and ARC
operate.
(d) "Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
(e) "Subsidiary" means any Person with respect to which AmDoc or ARC,
as the case may be, directly or indirectly owns a majority of the common stock
or has the power to vote or direct the voting of sufficient securities to elect
a majority of the directors or others performing similar functions with respect
to such Person.
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SECTION 8.5 -- Headings. The headings contained in this Agreement
(including in the Table of Contents, the Index of Exhibits and the Index of
Disclosure Schedules) and the defined terms contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 8.6 -- Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any Party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the maximum extent possible.
SECTION 8.7 -- Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the Confidentiality Agreement, the Disclosure Schedule and any
documents delivered by the Parties in connection herewith constitute the entire
agreement and, except as expressly set forth herein and therein, supersede any
and all other prior agreements and undertakings, both written and oral, among
the Parties, or any of them, with respect to the subject matter hereof and,
except for the provisions of Article II and Section 5.10, are not intended to
confer upon any Person other than AmDoc, ARC and Merger Subsidiary and, after
the Effective Time, their respective stockholders and the Surviving Corporation,
any rights or remedies hereunder.
SECTION 8.8 -- Assignment. This Agreement shall not be assigned by
operation of law or otherwise.
SECTION 8.9 -- Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed entirely within that State, without
regard to the conflicts of laws provisions thereof.
SECTION 8.10 -- Consent to Jurisdiction. Each of the Parties hereto (a)
consents to submit itself to the personal jurisdiction of any Federal court
located in the State of Delaware or any Delaware state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated by
this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
and (c) agrees that it will not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any court other than a
Federal court sitting in the State of Delaware or a Delaware state court.
SECTION 8.11 -- Costs of Enforcement. Except as otherwise set forth herein,
prior to the Effective Time, the prevailing Party in any proceeding brought to
enforce any provision of the Agreement shall be entitled to recover the
reasonable fees and costs of its counsel, plus all other costs of such
proceeding.
SECTION 8.12 -- Specific Performance. The Parties hereto agree that if any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached, irreparable damage would occur, no
adequate remedy at law would exist and
34
damages would be difficult to determine, and that the parties shall be entitled
to specific performance of the terms hereof, in addition to any other remedy at
law or equity.
SECTION 8.13 -- Publicity. ARC and AmDoc shall mutually agree upon any
public announcements relating to the Merger and shall not issue any such public
announcement prior to such agreement, except as may be required by Applicable
Law, in which case the Party proposing to issue such public announcement shall
use all reasonable efforts to consult in good faith with the other Party before
issuing any such public announcement.
SECTION 8.14 -- Incorporation of Annexes, Exhibits and Disclosure Schedule.
The Annexes, Exhibits and the Disclosure Schedule identified in this Agreement
are incorporated by reference and made a part hereof.
SECTION 8.15 -- Counterparts. This Agreement may be executed in one or more
counterparts, and by the different Parties in separate counterparts, each of
which when executed shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
[remainder of page intentionally blank]
35
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly
authorized.
XXXXXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx, M.D.
Title: President
AFFILIATED RESEARCH CENTERS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
ARC MERGER SUB-1, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
[Signature Page to Agreement and Plan of Merger]
36
ANNEX A
Directors of ARC
----------------
Xxxxxxx Xxxxxxx, M.D.
Xxxx X. Xxxxx
Xxxxxx X. Xxxxxxxxx
Xxx Xxxxxxxx, M.D.
Xxxx Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxx, M.D.
Xxxxxx Xxxxxxx
Officers of ARC
---------------
Chairman of the Board - Xxxxx X. Xxxxxx, M.D.
Chief Executive Officer - Xxxxxx X. Xxxxxxxx
President - Xxxxxx X. Xxxxxxxx
Chief Financial Officer - Xxxxx X. Xxxxxxx
Secretary - Xxxxx X. Xxxxxxx
Assistant Secretary - Xxxxxx X. Xxxxxxxx
Directors of Surviving Corporation
----------------------------------
Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxx, M.D.
Officers of Surviving Corporation
---------------------------------
Chief Executive Officer - Xxxxxx X. Xxxxxxxx
President - Xxxxx X. Xxxxxx, M.D.
Chief Financial Officer and Secretary - Xxxxx X. Xxxxxxx
Assistant Secretary - Xxxxxx X. Xxxxxxxx
37
