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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT
(PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
(AMENDMENT NO. 5)
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 12)
MAXSERV, INC.
(NAME OF SUBJECT COMPANY)
SEARS, ROEBUCK AND CO.
MAX ACQUISITION DELAWARE INC.
(BIDDERS)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
005779171
(CUSIP NUMBER OF CLASS OF SECURITIES)
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MICHAEL D. LEVIN, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
SEARS, ROEBUCK AND CO.
3333 BEVERLY ROAD
HOFFMAN ESTATES, IL 60179
(847) 286-2500
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
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COPY TO:
MARK D. GERSTEIN, ESQ.
LATHAM & WATKINS
SEARS TOWER, SUITE 5800
233 SOUTH WACKER DRIVE
CHICAGO, IL 60606-6401
(312) 876-7700
CALCULATION OF FILING FEE:
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<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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<S> <C>
$39,701,747 $7,941
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</TABLE>
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* For purposes of calculating the fee only. The amount assumes the purchase
of 5,122,806 shares of common stock, par value $.01 per share, of MaxServ,
Inc. at $7.75 net in cash per share, which represents the fully diluted
shares at February 28, 1997 not owned by the persons filing this statement.
** The amount of the filing fee calculated in accordance with Regulation
240.0-11 of the Securities Exchange Act of 1934 equals 1/50th of 1% of the
value of the shares to be purchased.
[X]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid:$7,200 Filing Parties:
Sears, Roebuck and Co.
Max Acquisition
Delaware Inc.
Form or Registration No.: Schedule 14D-1 Date Filed: February 4, 1997
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Sears, Roebuck and Co. and Max Acquisition Delaware Inc. hereby amend and
supplement their Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-
1"), originally filed with the Securities and Exchange Commission on February
4, 1997, with respect to the offer to purchase any and all outstanding shares
of common stock, par value $.01 per share, of MaxServ, Inc., at a price of
$7.75 per share as set forth in this Amendment No. 5 to the Schedule 14D-1.
This Amendment No. 5 to the Schedule 14D-1 also constitutes the Amendment No.
12 to the Statement on Schedule 13D of Parent and Purchaser. The item numbers
and responses thereto below are in accordance with the requirements of
Schedule 14D-1. Capitalized terms not defined herein have the meaning ascribed
to them in the Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(b) Item 1(b) of the Schedule 14D-1 is hereby amended and supplemented to
incorporate by reference the information set forth in the sections entitled
"INTRODUCTION," "SPECIAL FACTORS--Background of the Offer" and "THE AMENDED
OFFER--Terms of the Offer" of the Supplement, dated March 3, 1997 (the
"Supplement"), to the Offer to Purchase, dated February 4, 1997.
(c) Item 1(c) of the Schedule 14D-1 is hereby amended and supplemented to
incorporate by reference the information set forth in the section entitled
"THE AMENDED OFFER--Price Range of Shares" of the Supplement.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) Items 3(a)-(b) of the Schedule 14D-1 are hereby amended and
supplemented to incorporate by reference the information set forth in the
sections entitled "INTRODUCTION" and "SPECIAL FACTORS--Background of the
Offer" of the Supplement.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) Item 4(a) of the Schedule 14D-1 is hereby amended and supplemented to
incorporate by reference the information set forth in the section entitled
"THE AMENDED OFFER--Source and Amount of Funds" of the Supplement.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(g) Items 5(a)-(g) of the Schedule 14D-1 are hereby amended and
supplemented to incorporate by reference the information set forth in the
sections entitled "INTRODUCTION" and "SPECIAL FACTORS--Purpose of the Offer
and the Merger" of the Supplement.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) Item 6(a) of the Schedule 14D-1 is hereby amended and supplemented to
incorporate by reference the information set forth in the section entitled
"INTRODUCTION" of the Supplement.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Item 7 of the Schedule 14D-1 is hereby amended and supplemented to
incorporate by reference the information set forth in the sections entitled
"INTRODUCTION," "SPECIAL FACTORS--Background of the Offer," "SPECIAL FACTORS--
The Merger Agreement," "SPECIAL FACTORS--The Stockholder Tender Agreement" and
"THE AMENDED OFFER--Amendments to Conditions of the Offer" of the Supplement.
2
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ITEM 10. ADDITIONAL INFORMATION.
(e) Item 10(e) of the Schedule 14D-1 is hereby amended and supplemented to
incorporate by reference the information set forth in the section entitled "THE
AMENDED OFFER--Additional Information" of the Supplement.
(f) Item 10(f) of the Schedule 14D-1 is hereby amended and supplemented to
incorporate by reference the information set forth in the entire Supplement and
the revised Letter of Transmittal, copies of which are filed herewith as
exhibits (a)(9) and (a)(10), respectively.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 of the Schedule 14D-1 is hereby amended and supplemented to add the
following exhibits:
(a)(9) Supplement to Offer to Purchase.
(a)(10) Revised Letter of Transmittal.
(a)(11) Text of Press Release jointly issued by Parent and the Company, dated
March 3, 1997.
(c)(1) Agreement and Plan of Merger dated March 2, 1997 by and among the
Company, Parent and Purchaser.*
(c)(2) Stockholder Tender Agreement dated March 2, 1997, by and among Parent,
Purchaser, Sunwestern Investment Fund II and Sunwestern Cayman 1984
Partners.
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* The Disclosure Schedule to the Agreement and Plan of Merger is omitted.
The parties agree to furnish supplementally a copy of this Disclosure
Schedule to the Securities and Exchange Commission upon request.
3
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SIGNATURE
AFTER DUE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I CERTIFY THAT
THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND CORRECT.
Dated: March 3, 1997 Max Acquisition Delaware Inc.
/s/ John T. Pigott
By: _________________________________
Name: John T. Pigott
Title: Vice President and
Treasurer
Sears, Roebuck and Co.
/s/ Michael D. Levin
By: _________________________________
Name: Michael D. Levin
Title: Senior Vice President,
General Counsel and Secretary
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<C> <S>
(a)(9) Supplement to Offer to Purchase.
(a)(10) Revised Letter of Transmittal.
Text of Press Release jointly issued by Parent and the Company, dated
(a)(11) March 3, 1997.
(c)(1) Agreement and Plan of Merger dated March 2, 1997 by and among the
Company, Parent and Purchaser.*
(c)(2) Stockholder Tender Agreement, dated March 2, 1997, by and among
Parent, Purchaser, Sunwestern Investment Fund II and Sunwestern Cayman
1984 Partners.
</TABLE>
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* The Disclosure Schedule to the Agreement and Plan of Merger is omitted. The
parties agree to furnish supplementally a copy of this Disclosure Schedule
to the Securities and Exchange Commission upon request.
<PAGE>
EXHIBIT (a)(9)
SUPPLEMENT TO THE OFFER TO PURCHASE DATED FEBRUARY 4, 1997
MAX ACQUISITION DELAWARE INC.
A WHOLLY OWNED SUBSIDIARY OF
SEARS, ROEBUCK AND CO.
HAS INCREASED ITS OFFER TO PURCHASE
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK
OF
MAXSERV, INC.
TO
$7.75 NET PER SHARE IN CASH
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 14, 1997, UNLESS THE OFFER IS EXTENDED.
This Supplement amends and supplements the Offer to Purchase, dated February
4, 1997, relating to the Offer by Max Acquisition Delaware Inc. ("Purchaser"),
a wholly owned subsidiary of Sears, Roebuck and Co. ("Parent"). Purchaser is
now offering to purchase any and all outstanding shares of common stock, par
value $.01 per share ("Shares"), of MaxServ, Inc. (the "Company") at a price
of $7.75 per share, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
this Supplement and in the revised Letter of Transmittal. Purchaser, Parent
and the Company have entered into an Agreement and Plan of Merger, dated as of
March 2, 1997 (the "Merger Agreement"), providing for, among other things, the
increase in the price to be paid pursuant to the Offer and, following
consummation of the Offer, upon the terms and subject to the conditions set
forth in the Merger Agreement, the merger of Purchaser with and into the
Company (the "Merger").
THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF THE COMPANY HAS
UNANIMOUSLY APPROVED THE OFFER AS AMENDED AND DETERMINED THAT THE OFFER AND
THE MERGER ARE IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS. THE
SPECIAL COMMITTEE RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES. THE MERGER AGREEMENT HAS BEEN APPROVED BY THE BOARD OF DIRECTORS
OF THE COMPANY BASED ON THE RECOMMENDATION OF THE SPECIAL COMMITTEE.
THE MEMBERS OF THE SPECIAL COMMITTEE HAVE AGREED TO TENDER ALL OUTSTANDING
SHARES OVER WHICH THEY HAVE DISPOSITIVE POWER, INCLUDING AN AGGREGATE OF
1,014,800 SHARES OWNED BY TWO INVESTMENT FUNDS.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS,
INCLUDING THE EXERCISE, EXCHANGE OR SURRENDER OF OUTSTANDING OPTIONS TO
ACQUIRE SHARES.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") NOR HAS THE COMMISSION
PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY
OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
IMPORTANT
Any stockholder desiring to tender all or a portion of such stockholder's
Shares should either (i) complete and sign one of the Letters of Transmittal
(or a facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, have such stockholder's signature thereon guaranteed if required
by Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of
Transmittal (or such manually signed facsimile), or, in the case of a book-
entry transfer, an Agent's Message (as defined in the Offer to Purchase), and
any other required documents to First Chicago Trust Company of New York (the
"Depositary") and either deliver the certificates for such Shares to the
Depositary along with the Letter of Transmittal (or a manually signed
facsimile thereof) or deliver such Shares pursuant to the procedure for book-
entry transfer set forth in the Offer to Purchase or (ii) request such
stockholder's broker, dealer, commercial bank, trust company or other nominee
to effect the transaction for such stockholder. Any stockholder having Shares
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact such broker, dealer, commercial bank, trust company
or other nominee if such stockholder desires to tender such Shares.
If a stockholder desires to tender Shares and such stockholder's
certificates for Shares are not immediately available or the procedure for
book-entry transfer cannot be completed on a timely basis, or time will not
permit all required documents to reach the Depositary prior to the expiration
of the Offer, such stockholder's tender may be effected by following the
procedure for guaranteed delivery set forth in the Offer to Purchase.
Questions and requests for assistance may be directed to the Information
Agent or to the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Supplement. Additional copies of
the Offer to Purchase, this Supplement, the Letter of Transmittal, the Notice
of Guaranteed Delivery and other related materials may be obtained from the
Information Agent or from brokers, dealers, commercial banks and trust
companies.
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
March 3, 1997
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TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION................................................................ 1
SPECIAL FACTORS............................................................. 3
Background of the Offer................................................... 3
Fairness of the Offer..................................................... 3
Purpose of the Offer and the Merger....................................... 4
The Merger Agreement...................................................... 4
The Stockholder Tender Agreement.......................................... 10
THE AMENDED OFFER........................................................... 11
Amended Terms of the Offer................................................ 11
Procedure for Tendering Shares............................................ 11
Price Range of Shares..................................................... 12
Source and Amount of Funds................................................ 12
Amendments to Conditions of the Offer..................................... 12
Additional Information.................................................... 15
Miscellaneous............................................................. 15
</TABLE>
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To the Holders of Common Stock of
MaxServ, Inc.:
INTRODUCTION
The following information amends and supplements the Offer to Purchase,
dated February 4, 1996 (the "Offer to Purchase"), of Max Acquisition Delaware
Inc., a Delaware corporation and a wholly owned subsidiary of Sears, Roebuck
and Co. Purchaser is now offering to purchase any and all outstanding shares
of common stock, par value $.01 per share, of MaxServ, Inc., a Delaware
corporation, at a purchase price of $7.75 per share (the "Offer Price"), net
to the seller in cash, without interest thereon, upon the terms and subject to
the conditions set forth in the Offer to Purchase, this Supplement and in the
revised Letter of Transmittal (which, together with any amendments or
supplements hereto or thereto, collectively constitute the "Offer").
Except as otherwise set forth in this Supplement and the revised Letter of
Transmittal, the terms and conditions previously set forth in the Offer to
Purchase and the related Letter of Transmittal remain applicable in all
respects to the Offer and this Supplement should be read in conjunction with
the Offer to Purchase. Capitalized terms used and not otherwise defined herein
have the meaning ascribed to them in the Offer to Purchase. Procedures for
tendering Shares are set forth in the sections entitled "THE TENDER OFFER--
Procedure for Tendering Shares" of the Offer to Purchase and "THE AMENDED
OFFER--Procedure for Tendering Shares" herein.
THE OFFER TO PURCHASE, THIS SUPPLEMENT AND THE RELATED LETTERS OF
TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE OFFER.
THE SPECIAL COMMITTEE HAS UNANIMOUSLY APPROVED THE OFFER AS AMENDED AND
DETERMINED THAT THE OFFER AND THE MERGER ARE IN THE BEST INTERESTS OF THE
COMPANY'S STOCKHOLDERS. THE SPECIAL COMMITTEE RECOMMENDS THAT STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES. THE MERGER AGREEMENT HAS BEEN
APPROVED BY THE BOARD OF DIRECTORS OF THE COMPANY BASED ON THE RECOMMENDATION
OF THE SPECIAL COMMITTEE.
THE MEMBERS OF THE SPECIAL COMMITTEE HAVE AGREED TO TENDER ALL OUTSTANDING
SHARES OVER WHICH THEY HAVE DISPOSITIVE POWER, INCLUDING AN AGGREGATE OF
1,014,800 SHARES OWNED BY TWO INVESTMENT FUNDS.
Purchaser, Parent and the Company have entered into an Agreement and Plan of
Merger, dated as of March 2, 1997, providing for, among other things, (i) an
increase in the price to be paid pursuant to the Offer from $7.00 per Share to
$7.75 per Share, net to the seller in cash, (ii) an extension of the period
the Offer is to remain open to provide for the initial expiration of the
amended Offer at 12:00 midnight, New York City time, on Friday, March 14, 1997
and (iii) following consummation of the Offer, upon the terms and subject to
the conditions set forth in the Merger Agreement, the merger of Purchaser with
and into the Company. In the Merger each outstanding Share (other than Shares
owned by Parent or Purchaser, Shares held in the treasury of the Company and
Shares held by stockholders of the Company who properly exercise their
appraisal rights under the applicable provisions of the General Corporation
Law of the State of Delaware (the "DGCL")) will be converted into the right to
receive $7.75 per Share in cash (the "Merger Consideration"). See "SPECIAL
FACTORS--Purpose of the Offer and the Merger" and "THE AMENDED OFFER--Amended
Terms of the Offer" herein.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS,
INCLUDING THAT ALL OPTIONS TO ACQUIRE SHARES BE EXERCISED, SURRENDERED OR
EXCHANGED. SEE "THE AMENDED OFFER--AMENDMENTS TO CONDITIONS OF THE OFFER."
Based upon representations and warranties of the Company contained in the
Merger Agreement, as of February 28, 1997, there were 10,948,506 Shares issued
and outstanding. In addition, as of such date, (i) options
1
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to purchase approximately 1,157,633 Shares (the "Options") and (ii) a warrant
to purchase 50,000 Shares (the "Warrant"), were outstanding. According to the
Company, there were 491 holders of record of Shares on February 3, 1997.
Purchaser is not offering to acquire the Options or Warrant in the Offer;
holders of Options and Warrants desiring to obtain the Offer Price in the
Offer must exercise such instruments and tender the Shares obtained thereby
pursuant to the terms of the Offer. The exercise, exchange or surrender of all
of the Options is a condition of the Offer. See "SPECIAL FACTORS--The Merger
Agreement" and "THE AMENDED OFFER--Amendments to Certain Conditions of the
Offer."
In order to induce Purchaser and Parent to enter into the Merger Agreement,
certain stockholders of the Company affiliated with Sunwestern Investment Fund
II and Sunwestern Cayman 1984 Partners (collectively, the "Selling
Stockholders"), have entered into a Stockholder Tender Agreement, dated as of
March 2, 1997 (the "Stockholder Tender Agreement"), pursuant to which the
Selling Stockholders have agreed to tender and sell all Shares owned by them
pursuant to and in accordance with the terms of the Offer. The Selling
Stockholders have represented they beneficially own an aggregate of 1,014,800
Shares.
If Purchaser owns at least 90% of the outstanding Shares following
consummation of the Offer (assuming the transfer of Parent's currently owned
Shares to Purchaser), Purchaser would have the ability to consummate the
Merger without a meeting or vote of the MaxServ Board or of the stockholders
of the Company pursuant to the "short form" merger provisions of Section 253
of the DGCL. In such circumstances, Purchaser currently intends to so
effectuate the Merger as soon as practicable. Parent currently owns 7,033,333
Shares, representing approximately 64.2% of the outstanding Shares as of
February 28, 1997. As a result of Parent's ownership of Shares and Shares
tendered by the Selling Stockholders, Purchaser will need to have
approximately 1,805,523 Shares validly tendered and not withdrawn pursuant to
the Offer, in addition to the Shares subject to the Stockholder Tender
Agreement, in order to acquire 90% of the outstanding Shares.
The Merger Agreement provides that promptly upon the purchase by Purchaser
of the Shares pursuant to the Offer, and from time to time thereafter,
Purchaser shall be entitled to designate such number of directors, rounded up
to the next whole number, on the MaxServ Board that equals the product of (i)
the total number of directors on the MaxServ Board (giving effect to the
election of directors pursuant to this paragraph) and (ii) the percentage that
the aggregate number of Shares owned by Purchaser or any affiliate of
Purchaser bears to the total number of Shares then outstanding, and the
Company shall, at such time, promptly take all actions necessary to cause
Purchaser's designees to be elected as directors of the Company, including
increasing the size of the MaxServ Board or securing the resignations of
incumbent directors, or both. The Company shall cause persons designated by
Purchaser to constitute the same percentage as persons designated by Purchaser
shall constitute of the MaxServ Board to be appointed to each committee of the
MaxServ Board, to the extent permitted by applicable law.
In the event Purchaser and Parent own less than 90% of the outstanding
Shares following consummation of the Offer, pursuant to the Merger Agreement,
upon the request of Purchaser, the Company shall cause a meeting of its
stockholders (the "Company Stockholder Meeting") to be duly called and held as
soon as practicable for the purposes of voting on the approval and adoption of
the Merger Agreement, the Merger and the transactions contemplated thereby,
except as set forth below.
The Merger Agreement provides that, at Parent's request, the Company will
promptly prepare and file with the Commission under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") a proxy statement or information
statement relating to the Company Stockholder Meeting or written consent in
lieu of the Company Stockholder Meeting (the "Proxy Statement") and cause the
Proxy Statement to be mailed to its stockholders at the earliest practicable
time and obtain the necessary approvals by its stockholders of the Merger
Agreement. Notwithstanding the foregoing, in the event that Purchaser acquires
at least 90% of the outstanding Shares and Purchaser so requests, Parent,
Purchaser and the Company will take all actions necessary and appropriate to
cause the Merger to become effective without a meeting of the stockholders of
the Company in accordance with Section 253 of the DGCL.
2
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SPECIAL FACTORS
BACKGROUND OF THE OFFER
The discussion set forth in the section entitled "SPECIAL FACTORS--Background
of the Offer" of the Offer to Purchase is hereby amended and supplemented as
follows:
On February 18, 1997, Mr. Nathaniel P. Turner, Chairman of the Special
Committee, called Mr. John T. Pigott, an officer of Parent, and informed Mr.
Pigott that the Special Committee was interested in meeting with
representatives of Parent to discuss the Offer. Mr. Pigott called Mr. Turner on
February 19, 1997 to schedule a meeting between representatives of Parent and
the Special Committee to be held on February 26, 1997. Mr. Turner requested
that he and Mr. Pigott confer privately prior to the February 26 meeting.
On February 25, 1997, Mr. Pigott telephoned Mr. Turner and stated that Parent
believed there was value to a negotiated transaction and that, as a result,
Parent was prepared to increase the Offer Price in the context of a negotiated
transaction. Mr. Pigott informed Mr. Turner, however, that Parent was not
prepared to increase the Offer Price to the Special Committee's desired price
range.
Also on February 25, 1997, a representative of Merrill Lynch & Co. ("Merrill
Lynch"), financial advisor to Parent, spoke with a representative of Broadview
Associates LLC ("Broadview"), financial advisor to the Special Committee in an
effort to discern whether a compromise as to the Offer Price was achievable.
Merrill Lynch did not, however, make any offer to Broadview during this
conversation.
On February 26, 1997, representatives of Parent and Parent's legal advisors
met with representatives of the Special Committee and the Special Committee's
legal advisors. At this meeting the Special Committee and representatives of
Parent discussed the issue of resolving the impasse on price. The parties
agreed the discussions were productive and directed their advisors to identify
the issues to be resolved in a negotiated transaction.
On February 27, 1997, further discussions were held between Mr. Turner and
Mr. Pigott and counsel to Parent and the Special Committee in an effort to
resolve the issues associated with a negotiated acquisition.
On March 1 and March 2, 1997, further negotiations took place between the
Special Committee, through its counsel, Parent, through its counsel, and
counsel to the plaintiffs in the litigation styled Gordon v. Bayless, et al.,
which had arisen out of the Offer, concerning the terms of a proposed Agreement
and Plan of Merger. During that same time period, negotiations took place
between representatives of Parent and Sunwestern concerning the terms of a
proposed Stockholder Tender Agreement. Late on March 1, the Special Committee
and Parent agreed in principal upon a price of $7.75 per Share. On March 2,
1997, the Special Committee unanimously approved the Offer and the Merger,
determined that the Offer and the Merger are fair to and in the best interests
of the stockholders of the Company and recommended that the Company's
stockholders accept the Offer and tender their Shares pursuant to the Offer.
Following the Special Committee's meeting, the MaxServ Board met and, after
approval of the Merger Agreement by the directors not designated by Parent,
approved the Merger Agreement and recommended its approval by stockholders. On
March 2, 1997, the Board of Directors of Purchaser also approved the Merger
Agreement and the Offer, as amended hereby. Following such approval by the
MaxServ Board, Parent, Purchaser and the Company executed and delivered the
Merger Agreement. Concurrently therewith, Parent, Purchaser, and the Selling
Stockholders executed and delivered the Stockholder Tender Agreement, pursuant
to which the Selling Stockholders agreed to tender the 1,014,800 Shares
beneficially owned by them in the Offer. On March 3, 1997, the Company and
Parent jointly issued a press release announcing the execution of the Merger
Agreement, the increase of the Offer Price to $7.75 per Share and the extension
of the Offer.
FAIRNESS OF THE OFFER
The discussion set forth in the section entitled "SPECIAL FACTORS--Fairness
of the Offer" of the Offer to Purchase is hereby amended and supplemented as
follows:
3
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Purchaser and Parent continue to believe that the Offer is fair to the
Company's stockholders. In addition to considering the factors described in
the section entitled "SPECIAL FACTORS--Fairness of the Offer" of the Offer to
Purchase, and the fact that the Offer Price is higher than the price being
offered at the time those factors were initially considered, in making this
determination, Purchaser and Parent have also considered the following
additional factors: (i) the Special Committee and the MaxServ Board have
received an opinion (the "Broadview Opinion") from Broadview that the Offer
Price is fair, from a financial point of view, to the stockholders of the
Company other than Parent and Purchaser and (ii) the Offer is being made
pursuant to a negotiated transaction with the Company and resulted from a
negotiation process with a committee comprised of disinterested directors,
represented by independent counsel, likely to produce the best transaction for
the Company's stockholders. Purchaser and Parent did not find it practicable
to, and did not, assign specific relative weights to any of the factors
considered in reaching their opinion as to the fairness of the Offer.
PURPOSE OF THE OFFER AND THE MERGER
The discussion set forth in the section entitled "SPECIAL FACTORS--Purpose
and Structure of the Offer; Plans for the Company after the Offer" of the
Offer to Purchase is hereby amended and supplemented as follows:
On March 3, 1997, Parent, Purchaser and the Company entered into the Merger
Agreement, pursuant to which, among other things, the parties have expressed
their intention that the Merger be effected as promptly as practicable
following the consummation of the Offer. Pursuant to the Merger Agreement,
Purchaser has amended the Offer to provide for the terms and conditions set
forth herein. Also on March 3, 1997, Parent, Purchaser and the Selling
Stockholders executed and delivered the Stockholder Tender Agreement. Set
forth below is a summary of the material provisions of the Merger Agreement
and the Stockholder Tender Agreement. The full text of the Merger Agreement
and the Stockholder Tender Agreement have been filed as exhibits (c)(1) and
(c)(2), respectively, to Amendment No. 5 to the Tender Offer Statement on
Schedule 14D-1 (the "Schedule
14D-1") filed with the Commission on March 3, 1997 and are incorporated herein
by reference. Such exhibit should be available for inspection and copies
should be obtainable in the manner set forth below under "THE AMENDED OFFER--
Miscellaneous." The summary contained herein is qualified in its entirety by
such reference.
THE MERGER AGREEMENT
The Offer. The Merger Agreement provides that, as promptly as practicable
following the execution thereof, Parent and Purchaser will amend the Offer to
provide (a) for a purchase price per Share of $7.75, (b) for the period the
Offer is to remain open to be extended to provide for an initial expiration of
the Offer no later than 12:00 midnight on Friday, March 14, 1997 and (c) for
the consummation of the Offer to be subject, in addition to the conditions set
forth in the Offer to Purchase, only to the condition set forth in the section
of this Supplement entitled "THE AMENDED OFFER--Amendments to Conditions of
the Offer" below. The Merger Agreement further provides that without the prior
written consent of the Company, neither Parent nor Purchaser shall (i) reduce
the number of Shares subject to the Offer, (ii) reduce the price per Share to
be paid pursuant to the Offer, (iii) extend the Offer if all of the Offer
Conditions (as defined in the Merger Agreement) have been satisfied or waived,
(iv) change the form of consideration payable in the Offer, (v) amend, modify,
or add to the Offer Conditions (provided that Parent or Purchaser in its sole
discretion may waive any such conditions) or (vi) amend any other term of the
Offer in a manner adverse to the holders of the Shares. Notwithstanding the
foregoing, Parent and Purchaser may, without the consent of the Company, (A)
extend the Offer, if at the scheduled expiration date of the Offer any of the
Offer Conditions shall not have been satisfied or waived, until such time as
such conditions are satisfied or waived, (B) extend the Offer for any period
required by any statute, rule, regulation, interpretation or position of the
Commission or any other governmental authority or agency (domestic, foreign or
supranational) applicable to the Offer, and (C) extend the Offer for any
reason on one or more occasions for an aggregate of not more than fifteen
business days beyond the latest expiration date that would otherwise be
permitted under clauses (A) and (B) of this sentence in order to obtain at
least 90% of the outstanding Shares. Parent will make available sufficient
funds sufficiently in advance of the Effective Time (as defined below) to
consummate the Offer in accordance with the provisions of the Merger
Agreement.
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The Merger. The Merger Agreement provides that, following the consummation of
the Offer, Purchaser shall be merged with and into the Company and the separate
corporate existence of Purchaser shall thereupon cease. The Company shall be
the surviving corporation in the Merger and shall, following the Merger,
continue as a wholly owned subsidiary of Parent, governed by the laws of the
State of Delaware, and the separate corporate existence of the Company, with
all its rights, privileges, immunities, powers and franchises, of a public as
well as of a private nature, continuing unaffected by the Merger. At the time
the Merger is effective (the "Effective Time"), each Share issued and
outstanding immediately prior to the Effective Time (other than Shares held in
the Company's treasury or owned by Parent or Purchaser or Shares which are held
by stockholders exercising appraisal rights pursuant to Section 262 of the
DGCL) shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive, without interest, an
amount in cash equal to the Merger Consideration.
The Merger Agreement provides that the Certificate of Incorporation of the
Company will be amended at the Effective Time to read as set forth in Annex B
to the Merger Agreement, and the By-Laws of Purchaser at the Effective Time
will be the By-Laws of the Surviving Corporation, subject to the obligation of
Purchaser and Parent to continue in force and effect certain obligations of the
Company to indemnify its officers and directors. The Merger Agreement also
provides that the directors of Purchaser immediately prior to the Effective
Time will be the directors of the Surviving Corporation and the officers of the
Company immediately prior to the Effective Time will be the officers of the
Surviving Corporation.
Company Stock Options and Warrant. The Merger Agreement provides that prior
to consummation of the Offer, the Company may enter into agreements in respect
of outstanding options ("Options") issued under the Company's 1988 Stock Option
Plan and the Company's 1994 Stock Option Plan (collectively, the "Stock Option
Plans") and any other Options issued by the Company, providing for either (i)
the payment upon surrender of the Option upon consummation of the Offer or at
the Effective Time of an amount of cash per share subject to each such Option
equal to the difference between the Merger Consideration and the exercise price
of such Option less an amount equal to all taxes required to be withheld from
such payment or (ii) with the consent of Parent, exchange of such Options into
certain options to acquire shares of Parent's common stock. The Company may, if
(and only if) an Option holder enters into an agreement described in the
preceding sentence, accelerate the vesting of any outstanding Options. The
Merger Agreement further provides that the Company shall immediately provide
the notice of the Merger required by Section 4.1(d) of the Warrant No. 1 to
purchase 50,000 shares issued to Needham & Co., Inc. dated August 30, 1994.
Recommendation. The Company represents and warrants in the Merger Agreement
that (i) the Special Committee has unanimously adopted resolutions, determining
that the Merger Agreement and the transactions contemplated thereby, including
the Offer and the Merger, are fair to, and in the best interests of, the
stockholders of the Company other than Parent and recommending without
qualification that the Stockholders of the Company accept the Offer, tender
their Shares thereunder to the Purchaser and approve and adopt the Merger
Agreement and the Merger, and (ii) the disinterested directors of the Company
Board and the Company Board have each unanimously adopted resolutions (A)
approving and adopting the Merger Agreement and the transactions contemplated
thereby, including the Offer, the Merger and the Stockholder Tender Agreement
and the transactions contemplated thereby, in all respects and (B) taking all
other action necessary to render any state takeover statutes inapplicable to
the Offer, the Merger and the Stockholder Tender Agreement.
Interim Agreements of Parent, Purchaser and the Company. Pursuant to the
Merger Agreement, the Company has covenanted and agreed that, during the period
from the date of the Merger Agreement to the Effective Time, the Company will
conduct its business and operations only in the ordinary and usual course of
business consistent with past practice. The Merger Agreement provides that the
Company will use its reasonable best efforts to preserve intact the business
organization of the Company, to keep available the services of its operating
personnel and to preserve the goodwill of suppliers and others having business
relationships with it. Pursuant to the Merger Agreement, without limiting the
generality of the foregoing, and except as otherwise expressly provided in the
Merger Agreement, prior to the Effective Time, the Company will not, without
the prior written consent of Parent: (i) amend its Certificate of Incorporation
or By-Laws; (ii)(a) create, incur or
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assume any indebtedness for money borrowed, including obligations in respect of
capital leases, except in the ordinary course of business consistent with past
practice or (b) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations
of any other person; provided, however, that the Company may endorse negotiable
instruments in the ordinary course of business consistent with past practice;
(iii) declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of the Common
Stock of the Company; (iv) issue, sell, grant, purchase or redeem, or issue,
whether by dividend or otherwise, or sell any securities convertible into or
exercisable for, or options with respect to, or warrants to purchase or rights
to subscribe to or otherwise purchase, or subdivide or in any way reclassify,
any shares of capital stock or other securities of the Company, except for the
exercise of the Options and Warrants outstanding on the date of the Merger
Agreement; (v)(a) increase the aggregate amount of compensation payable or to
become payable by the Company to its directors, officers or employees whether
by salary or bonus or (b) increase the rate or term of, or otherwise alter, any
bonus, insurance, pension, severance or other employee benefit plan, payment or
arrangement made to, for or with any such directors, officers or employees;
(vi) enter into any agreement, commitment or transaction, except agreements,
commitments or transactions in the ordinary course of business consistent with
past practice or settlements with the Internal Revenue Service or other similar
authority as permitted by Section 7.02(b) of the Merger Agreement; (vii) sell,
transfer, mortgage, pledge or grant any security interest, lien or other
encumbrance on any asset other than in the ordinary course of business
consistent with past practice; (viii) waive any right under any contract or
other agreement identified in the Company's Disclosure Schedule (as defined in
the Merger Agreement); (ix) other than as and when required by any change in
generally accepted accounting principles, make any material change in its
accounting or tax methods or practices or make any material change in
depreciation or amortization policies or rates adopted by it for accounting or
tax purposes or, other than normal writedowns or writeoffs consistent with past
practices, make any writedowns of inventory or writeoffs of notes or accounts
receivable; (x) make any loan or advance to any of its stockholders, officers,
directors, employees (other than advances to field sales personnel, vacation
advances, relocation advances and travel advances in each case made in the
ordinary course of business in a manner consistent with past practice), or make
any other loan or advance to any other person or group otherwise than in the
ordinary course of business consistent with past practice; (xi) terminate or
fail to renew, where such renewal is at the Company's option, any contract or
other agreement other than in the ordinary course of business, the termination
or failure of which to renew would have a Material Adverse Effect (as defined
below); (xii) enter into any collective bargaining agreement or employment
agreement; (xiii) make any addition to or modification of the Company's
existing employee benefits plans or adopt any new employee benefit plan; (xiv)
take, agree to take or do, or with respect to anything within the Company's
control, knowingly permit to be done or to be taken any action in the conduct
of its business which (a) would cause any of the representations of the Company
to be or become untrue in any material respect, and (b) would reasonably be
expected to have a Material Adverse Effect; (xv) fail to comply with all
applicable filing, payment, withholding, collection and record retention
obligations under all applicable federal, state, local and foreign tax laws; or
(xvi) agree to do any of the foregoing.
When used in the Merger Agreement, the term "Material Adverse Effect" means a
material adverse effect on the business, assets, financial condition or results
of operations of the Company or on the ability of the Company, Parent or
Purchaser to consummate the transactions contemplated by the Merger Agreement,
or any event or events which, individually or in the aggregate, constitute or,
with the passage of time, would constitute a "Material Adverse Effect."
Other Agreements of Parent, Purchaser and the Company. In the Merger
Agreement, the Company, its affiliates and their respective officers,
directors, employees, investment bankers, attorneys and other representatives
and agents have agreed that they shall immediately cease any existing
discussions or negotiations, if any, with any parties (other than Purchaser and
Parent) conducted heretofore with respect to any acquisition of all or any
material portion of the assets of, or any equity interest in, the Company or
any business combination with the Company. The Company, its present affiliates
and their respective officers, directors, employees, representatives or agents
have also agreed that none of them shall, directly or indirectly, encourage,
solicit, participate in or initiate discussions or negotiations with, or
provide any information to, any corporation, partnership, person or other
entity or group (other than Parent and Purchaser, any affiliate or associate of
Parent
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and Purchaser or any designees of Parent and Purchaser) concerning any
Acquisition Proposal (as defined in the Merger Agreement) or take any other
action to facilitate the making of a proposal that constitutes or could
reasonably be expected to lead to an Acquisition Proposal. The Company has
agreed to use its best efforts to ensure that the officers, directors and
employees of the Company and any investment banker or other advisor or
representatives retained by the Company are aware of the restrictions set
forth in the preceding sentences. In the event that a third party makes a
fully financed all cash tender offer for the Shares at a price in excess of
the Offer Price, the obligation of the Special Committee and the Company's
Board of Directors to continue to recommend the Offer Price shall be relieved
to the extent necessary, in the opinion of legal counsel, to permit the
Special Committee and the Company's Board of Directors to satisfy their
obligations under Rule 14e-2 promulgated by the Commission under the Exchange
Act.
Pursuant to the Merger Agreement, between the date of the Merger Agreement
and the Effective Time, the Company will, during ordinary business hours and
upon reasonable advance notice, (i) give Parent and Parent's authorized
representatives all access the Parent shall reasonably request to all books,
records (including, without limitation, the workpapers of the Company's
outside accountants), contracts, commitments, offices, and other facilities
and properties of the Company and its personnel, representatives, accountants
and agents, provided, however, that all such access shall take place after
appropriate prior consultation with the officers of the Company, (ii) will
permit Parent to make such inspections as Parent may reasonably request and
(iii) will cause the Company's officers and advisors to furnish Parent with
such financial and operating data and other information with respect to the
business, personnel, assets, liabilities and properties of the Company as
Parent may from time to time reasonably request; provided, however, that any
such investigation shall be conducted in such a manner as not to interfere
unreasonably with the operation of the business of the Company.
The Merger Agreement provides that promptly upon the purchase by Purchaser
of the Shares pursuant to the Offer, and from time to time thereafter,
Purchaser shall be entitled to designate such number of directors, rounded up
to the next whole number, on the MaxServ Board that equals the product of (i)
the total number of directors on the MaxServ Board (giving effect to the
election of directors pursuant to this paragraph) and (ii) the percentage,
expressed as a decimal, that the aggregate number of Shares beneficially owned
by Purchaser or any affiliate of Purchaser following such Purchase bears to
the total number of Shares then outstanding, and the Company shall, at such
time, promptly take all actions necessary to cause Purchaser's designees to be
elected as directors of the Company, including increasing the size of the
MaxServ Board or securing the resignations of incumbent directors, or both.
The Company shall cause persons designated by Purchaser to constitute the same
percentage as persons designated by Purchaser shall constitute of the MaxServ
Board to be appointed to each committee of the MaxServ Board, to the extent
permitted by applicable law.
Pursuant to the Merger Agreement, in the event that Purchaser owns less than
ninety percent (90%) of the outstanding shares of Common Stock following
expiration of the Offer, the Company shall take all action to the extent
necessary to consummate the Merger in accordance with applicable law,
including, causing a meeting of its stockholders to be duly called and held as
soon as practicable for the purposes of voting on the approval and adoption of
the Merger Agreement, the Merger and the transactions contemplated thereby.
The Merger Agreement provides that, at Parent's request, the Company will
promptly prepare and file with the Commission under the Exchange Act the Proxy
Statement and cause the Proxy Statement to be mailed to its stockholders at
the earliest practicable time and obtain the necessary approvals by its
stockholders of the Merger Agreement. Notwithstanding the foregoing, in the
event that Purchaser acquires at least 90% of the outstanding Shares and
Purchaser so requests, Parent, Purchaser and the Company will take all actions
necessary and appropriate to cause the Merger to become effective without a
meeting of the stockholders of the Company in accordance with Section 253 of
the DGCL.
Parent has agreed that all rights to indemnification now existing in favor
of present and former directors, officers and employees of the Company
("Indemnified Parties") as provided in the Company's Certificate of
Incorporation and By-laws, or rights of indemnification equivalent thereto,
and limitations of liability in the
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Company's Certificate of Incorporation or limitations equivalent thereto, shall
survive the Merger and shall continue in full force and effect for a period of
at least six years. Parent has agreed to cause to remain in full force and
effect and cause the Surviving Corporation to fully perform all indemnity
agreements with Indemnified Parties in effect on the date of the Merger
Agreement. For a period of at least six years after the Effective Time, Parent
and the Surviving Corporation will, jointly and severally, indemnify and hold
harmless, to the fullest extent permitted by applicable law, each Indemnified
Party and advance expenses in connection with such indemnification. In
addition, Parent has agreed that for six years after the Effective Time, Parent
will cause the Surviving Corporation to use reasonable efforts to maintain,
officers' and directors' liability insurance with respect to acts or omissions
occurring prior to the Effective Time covering each such person currently
covered by the Company's officers' and directors' liability insurance policy on
terms no less favorable than those of such policy in effect on the date of the
Merger Agreement or at the Effective Time or at Parent's option, such less
favorable terms as Parent may provide its own directors and officers.
The Merger Agreement provides that the Company, Purchaser and Parent will
each use their best efforts to consummate the transactions contemplated by the
Merger Agreement.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto, including
without limitation, representations by the Company as to corporate existence
and good standing, subsidiaries, capital structure, corporate authorization,
consents and approvals, taxes, brokers and finders, undisclosed liabilities,
certain changes or events concerning its businesses, compliance with applicable
law, employee benefit plans, litigation and environmental liabilities.
Conditions to the Merger. The obligations of each of Parent, Purchaser and
the Company to effect the Merger are subject to the satisfaction of certain
conditions, which have not been waived at or prior to the Closing of the
Merger, including (i) the Merger Agreement and the Merger shall have been
approved and adopted by the requisite vote or consent, if any is required, of
the stockholders of the Company required by the Company's Certificate of
Incorporation and By-Laws and the DGCL; (ii) no preliminary or permanent
injunction or other order shall have been issued by any court or by any
governmental or regulatory agency, body or authority which prohibits the
consummation of the Offer or the Merger and the transactions contemplated by
the Merger Agreement and which is in effect at the Effective Time, provided,
however, that, in the case of a decree, injunction or other order, each of the
parties shall have used reasonable efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any decree,
injunction or other order that may be entered and (iii) no statute, rule or
regulation shall have been enacted, entered, promulgated or enforced by any
governmental authority that prohibits the consummation of the Offer or the
Merger or has the effect of making the purchase of the Shares illegal. The
obligation of Purchaser and Parent to effect the Merger is further subject to
satisfaction of the conditions, unless waived by Parent, that (i) Purchaser
shall have accepted for payment Shares tendered pursuant to the Offer, provided
that this condition will be deemed satisfied with respect to Purchaser and
Parent if Purchaser shall have failed to purchase Shares pursuant to the Offer
in violation of the terms of the Offer, (ii) the Company shall have performed
and complied in all material respects with the agreements and obligations
contained in the Merger Agreement required to be performed and complied with by
it at or prior to the Effective Time, provided that this clause (ii) shall not
apply after Purchaser has designated a majority of directors to serve on the
MaxServ Board as provided in the Merger Agreement or Purchaser's and Parent's
designees otherwise constitute a majority of the MaxServ Board and (iii) there
shall have been no change in the Special Committee's recommendation that the
stockholders of the Company accept the Offer. The obligation of the Company to
effect the Merger is further subject, unless waived by the Company, to Parent
and Purchaser having performed and complied in all material respects with the
agreements and obligations contained in the Merger Agreement required to be
performed and complied with by each of them at or prior to the Effective Time.
Termination. The Merger Agreement may be terminated and the Offer (if
Purchaser has not accepted Shares for payment) and the Merger may be abandoned
at any time prior to the Effective Time: (i) by mutual written consent of
Parent, Purchaser and the Company; (ii) by Parent and Purchaser or by the
Company if the Closing of
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the Merger shall not have occurred on or prior to December 31, 1997; (iii) by
Parent and Purchaser or the Company if any court of competent jurisdiction in
the United States or other United States governmental body shall have issued an
order, decree or ruling or taken any other final action restraining, enjoining
or otherwise prohibiting the Merger or the acceptance for payment of and
payment for the Shares and such order, decree, ruling or other action shall
have become nonappealable; (iv) by Parent and Purchaser if, due to an
occurrence or circumstance which would result in a failure to satisfy any of
the conditions set forth in Annex A to the Merger Agreement, Purchaser shall
have terminated the Offer or allowed the Offer to expire without the purchase
of any Shares thereunder; (v) by the Company if there shall not have been a
material breach of any representation, warranty, covenant or agreement on the
part of the Company which would entitle Parent or Purchaser to terminate the
Merger Agreement pursuant to clause (vi) of this paragraph and, due to an
occurrence or circumstance which would result in a failure to satisfy any of
the conditions set forth in Annex A to the Merger Agreement or otherwise,
Purchaser shall have terminated the Offer or allowed the Offer to expire
without the purchase of any Shares thereunder; (vi) by Parent and Purchaser
prior to the purchase of Shares pursuant to the Offer if (a) there shall have
been a breach of any representation or warranty on the part of the Company
having a Material Adverse Effect, (b) there shall have been a breach of any
covenant or agreement on the part of the Company resulting in a Material
Adverse Effect or (c) the Special Committee shall have withdrawn or modified
(including by amendment of the Schedule 14D-9) in a manner adverse to Purchaser
its approval or recommendation of the Offer, the Merger Agreement or the Merger
or shall have recommended another offer, or shall have adopted any resolution
to effect any of the foregoing, or (vii) by the Company if (a) there shall have
been a breach of any representation or warranty on the part of Parent or
Purchaser which materially adversely affects the consummation of the Offer or
the Merger and which representation or warranty remains incorrect at the date
of termination under this clause (a), or (b) there shall have been a material
breach of any covenant or agreement on the part of Parent or Purchaser and
which materially adversely affects the consummation of the Offer or the Merger.
Termination Fee and Expenses. In the event that (i) Parent and Purchaser
terminate the Merger Agreement pursuant to clause (vi) of the preceding
paragraph, the Company shall reimburse Parent, Purchaser and their affiliates
(not later than five business days after submission of statements therefor) for
all actual documented out-of-pocket fees and expenses actually and reasonably
incurred by any of them or on their behalf in connection with the Offer and the
Merger and the consummation of all transactions contemplated by the Merger
Agreement (including, without limitation, reasonable attorneys' fees,
reasonable fees payable to financing sources, investment bankers, counsel to
any of the foregoing, and accountants and filing fees and printing costs).
Pursuant to the Merger Agreement, in the event of the termination of the
Merger Agreement and abandonment of the Offer and the Merger, the Merger
Agreement will become void and have no effect, without any liability on the
part of any party to the Merger Agreement or its affiliates, directors,
officers or stockholders, provided that a party will not be relieved from
liability for any damages arising out of any willful or intentional breach of
the Merger Agreement or from their obligations with respect to brokers and
finders, and expenses of the parties.
Costs and Expenses. Except as discussed above, the Merger Agreement provides
that all costs and expenses incurred in connection with the transactions
contemplated by the Merger Agreement shall be paid by the party incurring such
costs and expenses.
Amendments and Modifications. Subject to applicable law, the Merger Agreement
may be amended, modified or supplemented only by written agreement of Parent,
Purchaser and the Company at any time prior to the Effective Time with respect
to any of the terms contained in the Merger Agreement executed by duly
authorized officers of the respective parties except that (i) prior to
consummation of the Offer, consent by the Company shall require the approval of
the Special Committee and (ii) after the consummation of the Offer, the price
per Share to be paid pursuant to the Merger Agreement to the holders of Shares
may not be decreased and the form of consideration to be received by the
holders of Shares in the Merger may not be altered, and no other amendment
which would adversely affect the holders of Shares or may be made, without the
approval of the applicable holders.
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THE STOCKHOLDER AGREEMENT
Concurrently with the execution of the Merger Agreement, Purchaser and Parent
entered into the Stockholder Tender Agreement with the Selling Stockholders.
The Selling Stockholders have represented they own an aggregate of 1,014,800
Shares (representing approximately 9.3% of the outstanding Shares). Pursuant to
the Stockholder Tender Agreement, each Selling Stockholder has agreed to tender
and sell all Shares owned by it to Purchaser pursuant to and in accordance with
the terms of the Offer. In addition, the Selling Stockholders have agreed to
irrevocably waive any rights of appraisal or rights to dissent from the Merger
that such Selling Stockholder may have under applicable law.
The Stockholder Tender Agreement remains in effect until the earliest to
occur of (i) the date the Merger Agreement is terminated in accordance with its
terms, (ii) the purchase of all the Shares pursuant to the Offer and (iii)
April 4, 1997; provided, however, that this Agreement will automatically extend
for up to sixty (60) days if the consummation of the Offer has been enjoined or
otherwise stayed by any court or other governmental authority.
During the term of the Stockholder Tender Agreement, no Selling Stockholder
will, except pursuant to the terms of the Offer, (i) offer to sell, sell,
pledge or otherwise dispose of or transfer (except by operation of law in a
merger or business combination of the Company with or into any other entity or
entities) any interest in or encumber with any lien any of its Shares, (ii)
acquire any Shares or other securities of the Company (except for additional
Shares or securities issued as a result of a stock dividend, stock split,
recapitalization or similar event, and any such additional Shares or securities
will be deemed to constitute Shares subject to the Stockholder Tender
Agreement), (iii) deposit its Shares into a voting trust, agreement or
arrangement with respect to its Shares or grant any proxy or power of attorney
with respect to its Shares or (iv) enter into any contract, option or other
arrangement or undertaking with respect to the sale, assignment or other
disposition of or transfer of any interest in or the voting of any Shares or
any other securities of the Company. In addition, each Selling Stockholder has
agreed not to initiate, solicit (including by way of furnishing information),
encourage or respond to or take any other action knowingly to facilitate, any
inquiries or the making of any proposal by any person or entity (other than
Parent or an affiliate of Parent) with respect to the Company that constitutes
or reasonably may be expected to lead to, an Acquisition Proposal (as defined
in the Merger Agreement), or enter into or maintain or continue discussions or
negotiate with any person or entity in furtherance of such inquiries or to
obtain any Acquisition Proposal, or agree to or endorse any Acquisition
Proposal, or authorize or permit any person or entity acting on behalf of such
Selling Stockholder to do any of the foregoing.
Pursuant to the Stockholder Tender Agreement, beginning on the date thereof
and ending on the date of termination of the Stockholder Tender Agreement, each
Selling Stockholder has agreed to vote each Share owned by it at any annual,
special or adjourned meeting of the stockholders of the Company or execute a
written consent in lieu thereof (i) in favor of the Merger, the execution and
delivery by the Company of the Merger Agreement and the approval and adoption
of the terms thereof; (ii) against any action or agreement that would result in
a breach in any respect of any covenant, agreement, representation or warranty
of the Company under the Merger Agreement; and (iii) against the following
actions (other than the Merger and the other transactions contemplated by the
Merger Agreement): (a) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the Company; (b)
a sale, lease or transfer of a material amount of assets of the Company, or a
reorganization, recapitalization, dissolution or liquidation of the Company;
and (c)(1) any change in a majority of the persons who constitute the MaxServ
Board as of the date of the Stockholder Tender Agreement, except as
contemplated by the Merger Agreement; (2) any change in the present
capitalization of the Company or any amendment of the Company's Certificate of
Incorporation or By-Laws, as amended to the date of the Stockholder Tender
Agreement; (3) any other material change in the Company's corporate structure
or business; or (4) any other action which, in the case of each of the matters
referred to in clauses (c)(1), (2), (3) and (4), is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone, or
adversely affect the Merger and the other transactions contemplated by the
Merger Agreement and the Stockholder Tender Agreement.
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THE AMENDED OFFER
AMENDED TERMS OF THE OFFER
The terms of the Offer set forth under the section entitled "THE TENDER
OFFER--Terms of the Offer" of the Offer to Purchase are hereby amended and
supplemented as follows:
The price to be paid for Shares purchased pursuant to the Offer has been
increased from $7.00 to $7.75 per Share, net to the seller in cash, without
interest thereon. Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of
any such extension or amendment), after the Expiration Date, Purchaser will
promptly accept for payment and will pay for all Shares validly tendered prior
to the Expiration Date and not properly withdrawn in accordance with the
section entitled "THE TENDER OFFER--Withdrawal Rights" of the Offer to
Purchase. All stockholders whose Shares are tendered and purchased pursuant to
the Offer (including those Shares tendered prior to the date hereof) will
receive the increased price. The Merger Agreement provides that, without the
prior consent of the Company, the consideration of $7.75 per Share may not be
decreased.
THE EXPIRATION DATE OF THE OFFER HAS BEEN EXTENDED AND THE OFFER WILL NOW
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, MARCH 14, 1997,
unless and until Purchaser extends the period of time during which the Offer
is open, in which event the term "Expiration Date" shall refer to the latest
time and date at which the Offer, as so extended by Purchaser, shall expire.
The Merger Agreement provides that Purchaser may extend the Offer under
certain circumstances. See "SPECIAL FACTORS--The Merger Agreement." Shares
tendered pursuant to the Offer may be withdrawn in the manner set forth in the
section entitled "THE TENDER OFFER--Withdrawal Rights" of the Offer to
Purchase at any time unless theretofore accepted for payment as provided in
the Offer.
Certain conditions of the Offer as set forth in the section entitled "THE
TENDER OFFER--Certain Conditions of the Offer" of the Offer to Purchase have
been amended. See "THE AMENDED OFFER--Amendments to Conditions of the Offer."
PROCEDURE FOR TENDERING SHARES
The procedures for tendering Shares set forth in the section entitled "THE
TENDER OFFER--Procedure for Tendering Shares" of the Offer to Purchase are
amended and supplemented as follows:
Tendering stockholders may continue to use the original BLUE Letter of
Transmittal and the original GREY Notice of Guaranteed Delivery previously
circulated with the Offer to Purchase or may use the revised PINK Letter of
Transmittal and the revised YELLOW Notice of Guaranteed Delivery circulated
with this Supplement. Although the BLUE Letter of Transmittal previously
circulated with the Offer to Purchase refers only to the Offer to Purchase,
stockholders using such document to tender their Shares will nevertheless
receive the increased Offer price of $7.75 per Share for each Share validly
tendered (and not properly withdrawn) and accepted for payment pursuant to the
Offer, subject to the conditions of the Offer.
STOCKHOLDERS WHO PREVIOUSLY TENDERED THEIR SHARES PURSUANT TO THE OFFER ARE
NOT REQUIRED TO TAKE ANY FURTHER ACTION IN ORDER TO RECEIVE THE INCREASED
PRICE OF $7.75 PER SHARE, EXCEPT AS MAY BE REQUIRED BY THE PROCEDURE FOR
GUARANTEED DELIVERY IF SUCH PROCEDURE WAS UTILIZED.
See the section entitled "THE TENDER OFFER--Withdrawal Rights" of the Offer
to Purchase for the procedures for withdrawing Shares tendered pursuant to the
Offer.
11
<PAGE>
PRICE RANGE OF SHARES
The discussion set forth in the section entitled "THE TENDER OFFER--Price
Range of Shares; Dividends" of the Offer to Purchase is hereby amended and
supplemented as follows:
The Shares are listed and traded on the Nasdaq SmallCap MarketSM under the
symbol "MXSV." The following table sets forth for the quarterly fiscal periods
ended August 31, November 30, February 28 and May 31, the high and low bid
quotations per Share as reported by published financial sources.
<TABLE>
<CAPTION>
HIGH LOW
----- -----
<S> <C> <C>
Fiscal Year ended May 31, 1995:
First Quarter.................................................... $5.25 $3.75
Second Quarter................................................... 5.00 3.50
Third Quarter.................................................... 4.50 3.75
Fourth Quarter................................................... 4.00 3.13
Fiscal Year ended May 31, 1996:
First Quarter.................................................... $4.13 $3.00
Second Quarter................................................... 3.75 3.00
Third Quarter.................................................... 3.63 2.25
Fourth Quarter................................................... 4.25 2.75
Fiscal Year ending May 31, 1997:
First Quarter.................................................... $5.50 $3.50
Second Quarter................................................... 5.50 4.63
Third Quarter (ending February 28, 1997)......................... 7.63 4.63
</TABLE>
On December 4, 1996, the last full trading day before Parent publicly
announced its desire to acquire, through Purchaser, all of the outstanding
Shares not already owned by Parent and the commencement of negotiations with
the Company, the last reported bid quotation per Share as reported by the
National Quotation Bureau was $4.88. On February 3, 1997, the last full day of
trading prior to the commencement of the Offer, the last reported bid
quotation per Share as reported by the National Quotation Bureau was $7.00.
On February 28, 1997, the last full trading day prior to the announcement of
the increased price to be paid pursuant to the Offer and the execution of the
Merger Agreement, the last reported bid quotation per Share as reported by the
National Quotation Bureau was $7.31.
HOLDERS OF SHARES ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE
SHARES.
SOURCE AND AMOUNT OF FUNDS
The information contained in the Section entitled "THE TENDER OFFER--Source
and Amount of Funds" of the Offer to Purchase is hereby amended and
supplemented as follows:
Purchaser estimates that the total amount of funds required to purchase
pursuant to the Offer the number of Shares that are outstanding on a fully
diluted basis (excluding Shares held by Parent or Purchaser) will be
approximately $39,701,747. Purchaser will obtain such funds from Parent, which
will obtain such funds from its working capital. The Offer is not conditioned
upon obtaining any arrangements for the financing of the Offer.
AMENDMENTS TO CONDITIONS OF THE OFFER
The conditions to the Offer as set forth in the section entitled "THE TENDER
OFFER--Certain Conditions of the Offer" of the Offer to Purchase are hereby
amended and restated in their entirety as follows:
Notwithstanding any other provision of the Merger Agreement or the Offer,
but subject to Section 2.01(a) of the Merger Agreement, the Purchaser shall
not be required to accept for payment, purchase or pay for any
12
<PAGE>
Shares of the Company tendered, and may terminate or, subject to the terms of
the Merger Agreement, amend the Offer and may postpone the acceptance for
payment of and payment for any Shares, if prior to the time of acceptance for
payment of Shares tendered pursuant to the Offer (whether or not any Shares
have theretofore been accepted for payment or paid for pursuant to the Offer),
the Company shall not have entered into agreements with the holders of
Options, which have not been exercised prior to the Expiration Date, providing
for the surrender of such Options in exchange for (i) an amount of cash equal
to the difference between the exercise price of all such Options and the
Merger Consideration less all taxes required to be withheld from payment, or
(ii) with the consent of Parent, certain options to acquire shares of Parent's
common stock, or any of the following shall occur or exist:
(a) there shall have been threatened, instituted or be pending any
action, proceeding, application, claim or counterclaim by any government or
governmental authority or agency, domestic or foreign, or by any other
person, domestic or foreign, before any court or governmental regulatory or
administrative agency, authority or tribunal, domestic or foreign, other
than the matter styled Gordon v. Bayless, et al, as pending on the date
hereof, (i) challenging the acquisition by Parent or Purchaser of the
Shares, seeking to restrain or prohibit the making or consummation of the
Offer, including, but not limited to any such challenge to the Offer based
upon the provisions of the Stock Purchase Agreement (as defined in the
Merger Agreement); (ii) seeking to obtain from Parent or Purchaser any
damages, fines or legal sanctions; (iii) seeking to prohibit or limit the
ownership or operation by Parent or Purchaser or any of their affiliates of
any portion of the business or assets of the Company or to compel Parent or
Purchaser or any of their affiliates to dispose of or hold separate all or
any portion of the business or assets of the Company or of Purchaser or
seeking to impose any limitation on the ability of Parent or Purchaser or
any of their affiliates to conduct such business or own such assets; (iv)
seeking to impose or confirm limitations on the ability of Parent or
Purchaser or any of their affiliates effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to vote
any Shares acquired or owned by Parent or Purchaser or any of their
affiliates on all matters properly presented to the Company's stockholders;
(v) seeking to require divestiture by Parent or Purchaser or any of their
affiliates of any Shares; or (vi) seeking any material diminution in the
benefits expected to be derived by Parent or Purchaser or any of their
affiliates as a result of the transactions contemplated by the Offer,
which, in Parent's sole discretion, could be expected to have a material
adverse effect on the business, properties, assets, liabilities,
shareholder's equity, capitalization, prospects, condition (financial or
otherwise) or results of operations of the Company considered on a
consolidated basis or on the ability of the Company, Parent or Purchaser to
consummate the transactions contemplated by the Offer, the Merger or any
similar business combination by Purchaser or any affiliate of Parent with
the Company, or otherwise directly or indirectly relating to the
transactions contemplated by the Offer, the Merger or any such business
combination by Purchaser or any affiliate of Parent with the Company; or
(b) there shall be any statute, rule, regulation, legislation,
interpretation, judgment, order or injunction proposed, enacted,
promulgated, entered, enforced, issued or deemed applicable to the Offer,
the Merger, or other similar business combination by Purchaser or any
affiliate of Parent with the Company, or any other action shall have been
taken by any government, governmental authority or agency or court with
respect to a proceeding described in paragraph (a) above, domestic or
foreign, that has, or, in Parent's sole discretion, could be expected to
result in, any of the consequences referred to in paragraph (a) above; or
(c) any change shall have occurred or been threatened (or any condition,
event or development shall have occurred or been threatened involving a
prospective change) in the business, properties, assets, liabilities,
capitalization, stockholder's equity, condition (financial or otherwise),
operations, licenses or franchises, results of operations or prospects of
the Company that, in the sole judgment of Parent, is or may be materially
adverse to the Company or to the value of the Shares to Purchaser, Parent
or any other affiliate of Parent or Purchaser, or Parent shall have become
aware of any facts that, in the sole judgment of Parent, have or may have
material adverse significance with respect to either the value of the
Company or the value of the Shares to Purchaser, Parent or any other
affiliate of Parent, other than as reflected in the Disclosure Schedule; or
(d) there shall have occurred or been threatened (i) any general
suspension of trading in, or limitation on prices for, securities on the
New York Stock Exchange, Inc., any other national securities exchange or in
13
<PAGE>
the over-the-counter market in the United States; (ii) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States (whether or not mandatory); (iii) any extraordinary or
material adverse change in the financial markets or major stock exchange
indices in the United States or abroad or in the market price of Shares,
including, without limitation, a decline of at least 10% in either the Dow
Jones Average of Industrial Stocks or the Standard & Poor's 500 Index from
that existing at the close of business on February 28, 1997; (iv) any
material change in United States currency exchange rates or any other
currency exchange rates or a suspension of, or limitation on, the markets
therefor; (v) the commencement of a war or armed hostilities or other
international calamity directly or indirectly involving the United States;
or (vi) in the case of any of the foregoing existing March 3, 1997, a
material acceleration or worsening thereof; or
(e) unless Parent shall have consented in writing, the Company shall have
(i) split, combined or otherwise changed, or authorized or proposed a
split, combination or other change of, the Shares or its capitalization;
(ii) issued, distributed, pledged or sold, or authorized, proposed or
announced the issuance, distribution, pledge or sale of (A) any shares of
capital stock (including, without limitation, the Shares), or securities
convertible into any such shares, or any rights, warrants, or options to
acquire any such shares or convertible securities, or (B) any other
securities in respect of, in lieu of, or in substitution for Shares; (iii)
purchased or otherwise acquired or caused a reduction in the number of, or
proposed or offered to purchase or otherwise acquire or cause a reduction
in the number of, any outstanding Shares or other securities of the
Company, except as permitted by Section 4.05(a) of the Merger Agreement;
(iv) declared or paid any dividend or distribution on any shares of capital
stock or issued, or authorized, recommended or proposed the issuance of,
any other distribution in respect of the Shares, whether payable in cash,
securities or other property, or altered or proposed to alter any material
term of any outstanding security; (v) issued, or announce its intention to
issue, any debt securities or any rights, warrants or options entitling the
holder thereof to purchase or otherwise acquire any debt securities, or
incurred, or announced its intention to incur, any debt other than in the
ordinary course of business and consistent with its past practice; (vi)
authorized, recommended, proposed or publicly announced its intention to
enter into (A) any merger, consolidation, liquidation, dissolution,
business combination, acquisition or assets or securities or disposition of
assets or securities other than in the ordinary course of business, (B) any
material change in its capitalization, (C) any release or relinquishment of
any material contract rights, or (D) any comparable event not in the
ordinary course of business; (vii) authorized, recommended or proposed or
announced its intention to authorize, recommend or propose any transaction
which could adversely affect the value of the Shares; (viii) proposed,
adopted or authorized any amendment to its Certificate of Incorporation or
Bylaws or similar organizational documents or Purchaser or Parent shall
have learned about any such proposal or amendment which shall not have been
previously disclosed; (ix) entered into any new material contracts or
cancelled or substantially changed the terms of any existing material
contracts; or (x) agreed in writing or otherwise to take any of the
foregoing actions; or
(f) the Company shall have (i) entered into any employment, severance or
similar agreement, arrangement or plan with any of its employees other than
in the ordinary course of business; (ii) entered into or amended any
agreements, arrangements or plans so as to provide for increased or
accelerated benefits to any employee as a result of or in connection with
the transactions contemplated by the Offer, the Merger or other business
combination; or (iii) except as may be required by law, taken any action to
terminate or amend any employee benefit plan (as defined in Section 3(2) of
the Employee Retirement and Income Security Act of 1974, as amended) of the
Company, or Purchaser shall have become aware of any such action that was
not disclosed in publicly available filings prior to the date of this Offer
to Purchase; or
(g) Purchaser, Parent or another affiliate of Parent and the Company
shall have entered into an agreement that the Offer be terminated or
amended or Purchaser, Parent or another affiliate of Parent shall have
entered into an agreement with the Company providing for a merger or other
business combination with the Company, which, in the sole judgment of
Parent or Purchaser in any such case, and regardless of the circumstances
(including any action or inaction by Purchaser, Parent or any affiliate of
Parent) giving rise to any such condition makes it inadvisable to proceed
with the Offer and/or with such acceptance for payment or payment.
14
<PAGE>
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent or Purchaser regardless of the circumstances
giving rise to any such condition and may be waived by Parent or Purchaser, in
whole or in part, at any time and from time to time, in its sole discretion.
The failure by Parent or Purchaser at any time to exercise any of the
foregoing rights will not be deemed a waiver of any such right, and the waiver
of such right with respect to any particular facts or circumstances shall not
be deemed a waiver with respect to any other facts or circumstances, and each
such right will be deemed an ongoing right which may be asserted at any time
and from time to time. Any determination by Parent or Purchaser concerning the
events described above will be final and binding upon all parties.
ADDITIONAL INFORMATION
During the course of negotiations with the Special Committee, discussions
took place between counsel to Parent and counsel to plaintiffs in the
shareholder litigation arising out of the Initial Offer, styled as Gordon v.
Bayless, et al., plaintiff's counsel and Parent's counsel have agreed that the
increased Offer Price represents a fair value for the Shares and, subject to
confirmatory discovery, would resolve the issues outstanding in the
litigation.
MISCELLANEOUS
Purchaser is not aware of any jurisdiction in which the making of the Offer
or the tender of Shares in connection therewith would not be in compliance
with the laws of such jurisdiction. To the extent Purchaser becomes aware of
any valid state statute prohibiting the making of the Offer or the acceptance
of Shares pursuant thereto, Purchaser will make a good faith effort to comply
with such state statute. If, after such good faith effort, the Offer cannot
comply with such state statute, the Offer will not be made to (nor will
tenders be accepted from or on behalf of) holders of Shares in such
jurisdiction. In any jurisdiction the securities, blue sky or other laws of
which require the Offer to be made by a licensed broker or dealer, the Offer
shall be deemed to be made on behalf of Purchaser by the Dealer Manager or one
or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OTHER THAN AS CONTAINED HEREIN, IN THE
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF ANY SUCH INFORMATION
OF REPRESENTATION IS GIVEN OR MADE, IT SHOULD NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY PURCHASER.
Parent and Purchaser have filed with the Commission the Schedule 14D-1,
pursuant to Rule 14d-1 of the Exchange Act, and a Transaction Statement on
Schedule 13E-3, pursuant to Rule 13e-3 of the Exchange Act, respectively,
together with exhibits furnishing certain additional information with respect
to the Offer, and may file amendments thereto. Such Schedule 14D-1, Schedule
13E-3 and any amendments thereto, including exhibits, may be examined at, and
copies may be obtained by mail at prescribed rates from the Commission's
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a World Wide Web site on the internet at
http:\\www.sec.gov that contains reports and other information regarding
registrants that file electronically with the Commission.
Max Acquisition Delaware Inc.
March 3, 1997
15
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for Shares and any other required documents
should be sent or delivered by each stockholder of the Company or such
holder's broker, dealer, commercial bank, trust company or other nominee to
the Depositary at one of the addresses set forth below:
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
----------------
Facsimile Transmission:
(201) 222-4720
or
(201) 222-4721
Confirm by Telephone:
(201) 222-4707
By Hand: By Overnight Courier: By Mail:
First Chicago Trust First Chicago Trust First Chicago Trust
Company Company Company
of New York of New York of New York
Attention: Tenders & Attention: Tenders & Attention: Tenders &
Exchanges Exchanges Exchanges
c/o THE DEPOSITORY TRUST Suite 4680--MXV P.O. Box 2569, Suite
COMPANY 14 Wall Street, 8th 4660
55 Water Street, DTC TAD Floor Jersey City, NJ 07303-
Vietnam Veterans New York, NY 10005 2569
Memorial Plaza
New York, NY 10041
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers listed below. Additional copies of the Offer to Purchase, this
Supplement, the Letter of Transmittal, the Notice of Guaranteed Delivery and
other related materials may be obtained from the Information Agent or from
brokers, dealers, commercial banks and trust companies.
THE DEALER MANAGER FOR THE OFFER IS:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1330
(212) 449-8209 (Call Collect)
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Toll Free (800) 848-3405
Banks and Brokerage Firms, please call:
(212) 269-5550
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
MAXSERV, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED FEBRUARY 4, 1997 AND THE
SUPPLEMENT DATED MARCH 3, 1997
OF
MAX ACQUISITION DELAWARE INC.
A WHOLLY OWNED SUBSIDIARY OF
SEARS, ROEBUCK AND CO.
THIS OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, MARCH 14, 1997, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Overnight Courier: By Mail:
By Hand:
First Chicago Trust First Chicago Trust
First Chicago Trust Company Company
Company of New York of New York
of New York Attention: Tenders & Attention: Tenders &
Attention: Tenders & Exchanges Exchanges
Exchanges Suite 4680 -- MXV P.O. Box 2569, Suite 4660
c/o THE DEPOSITORY TRUST 14 Wall Street, 8th Floor Jersey City, NJ 07303-
COMPANY New York, NY 10005 2569
55 Water Street, DTC TAD
Vietnam Veterans Memorial
Plaza
New York, NY 10041
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9
PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)A
(PLEASE FILL IN, IF BLANK, EXACTLY AS
NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
SHARE EVIDENCED BY NUMBER OF
CERTIFICATE SHARE SHARES
NUMBER(S)* CERTIFICATE(S) TENDERED**
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL SHARES
</TABLE>
- -------------------------------------------------------------------------------
*Need not be completed by stockholders delivering Shares by book-
entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares
evidenced by each Share Certificate delivered to the Depositary
are being tendered hereby. See Instruction 4.
<PAGE>
This Letter of Transmittal is to be completed by stockholders of MaxServ,
Inc. (the "Company") if certificates ("Share Certificates") representing
Shares (as defined below) are to be forwarded herewith or, unless an Agent's
Message (as defined in the Offer to Purchase (as defined below)) is utilized,
if delivery of Shares is to be made by book-entry transfer to the Depositary's
account at The Depository Trust Company ("DTC") or Philadelphia Depository
Trust Company ("PDTC") (hereinafter collectively referred to as the "Book-
Entry Transfer Facilities") pursuant to the procedures set forth in the
section entitled "THE TENDER OFFER--Procedure For Tendering Shares" of the
Offer to Purchase (as defined below).
Stockholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates, and all other documents required
hereby, to the Depositary prior to the Expiration Date (as defined in the
Supplement (as defined below)), or who cannot comply with the book-entry
transfer procedures on a timely basis, may nevertheless tender their Shares
pursuant to the guaranteed delivery procedure set forth in the sections
entitled "THE TENDER OFFER--Procedure For Tendering Shares" of the Offer to
Purchase and "THE AMENDED OFFER--Procedure for Tendering Shares" of the
Supplement. See Instruction 2. Delivery of documents to a Book-Entry Transfer
Facility in accordance with such Book-Entry Transfer Facility's procedures
does not constitute delivery to the Depositary.
[_] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution _____________________________________________
Check Box of Applicable Book-Entry Transfer Facility:
(check one)
[_] DTC [_] PDTC
Account Number ____________________________________________________________
Transaction Code Number ___________________________________________________
[_] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s) ____________________________________________
Window Ticket No. (if any) _________________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution which Guaranteed Delivery ______________________________
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Max Acquisition Delaware Inc., a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Sears, Roebuck and
Co., a New York corporation ("Parent"), the above-described shares of common
stock, par value $.01 per share (the "Shares"), of MaxServ, Inc., a Delaware
corporation (the "Company"), pursuant to Purchaser's offer to purchase any and
all outstanding Shares at a purchase price of $7.75 per Share (the "Offer
Price"), net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated
February 4, 1997 (the "Offer to Purchase"), the Supplement thereto dated March
3, 1997 (the "Supplement"), receipt of which is hereby acknowledged, and in
this Letter of Transmittal (which, as they may be amended and supplemented
from time to time, together constitute the "Offer").
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, the undersigned hereby sells, assigns and transfers to or
upon the order of Purchaser all right, title and interest in and to all the
Shares that are being tendered hereby and any and all other Shares or other
securities issued or issuable in respect thereof on or after February 4, 1997
(a "Distribution") and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (and any
Distributions), with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) deliver
Share Certificates evidencing such Shares (and any Distributions), or transfer
ownership of such Shares (and any Distributions) on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in any such
case, with all accompanying evidence of transfer and authenticity, to or upon
the order of Purchaser, (b) present such Shares (and any Distributions) for
transfer on the books of the Company and (c) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Shares (and any
Distributions), all in accordance with the terms of and subject to the
conditions to the Offer.
The undersigned hereby irrevocably appoints designees of Purchaser as the
attorneys and proxies of the undersigned, each with full power of
substitution, to exercise all voting and other rights of the undersigned in
such manner as each such attorney and proxy or his substitute shall in his
sole judgment deem proper, with respect to all of the Shares tendered hereby
which have been accepted for payment by Purchaser (and any and all
Distributions) prior to the time of any vote or other action, at any meeting
of stockholders of the Company (whether annual or special and whether or not
an adjourned meeting) or otherwise. This power of attorney and proxy are
irrevocable, are coupled with an interest in the Shares tendered hereby, and
are granted in consideration of, and effective upon, the acceptance for
payment of such Shares by Purchaser in accordance with the terms of the Offer.
Such acceptance for payment shall revoke any other proxy or written consent
granted by the undersigned at any time with respect to such Shares (and any
Distributions), and no subsequent proxies will be given or written consents
executed by the undersigned (and if given or executed, will not be deemed
effective).
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any Distributions) and that when the same are accepted for payment
by Purchaser, Purchaser will acquire good and unencumbered title thereto, free
and clear of all liens, restrictions, charges and encumbrances and not subject
to any adverse claims. The undersigned will, upon request, execute and deliver
any additional documents deemed by the Depositary or the Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby (and any Distributions). All authority herein conferred
or agreed to be conferred shall survive the death or incapacity of the
undersigned, and any obligation of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in the sections entitled "THE TENDER OFFER--Procedure
for Tendering Shares" of the Offer to Purchase and "THE AMENDED OFFER--
Procedure for Tendering Shares" of the Supplement and in the instructions
hereto will constitute an agreement between the undersigned and Purchaser upon
the terms and subject to the conditions of the Offer. The undersigned
acknowledges that no interest will be paid on the Offer Price for tendered
Shares regardless of any extension of the Offer or any delay in making such
payment.
<PAGE>
Unless otherwise indicated in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of any Shares
purchased, and return any Share Certificates evidencing any Shares not
tendered or not purchased, in the name(s) of the undersigned (and, in the case
of Shares tendered by book-entry transfer, by credit to the account at the
Book-Entry Transfer Facility designated above). Similarly, unless otherwise
indicated in the box entitled "Special Delivery Instructions," please mail the
check for the purchase price of any Shares purchased and return any Share
Certificates evidencing Shares not tendered or not purchased (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signature(s). In the event that the boxes entitled "Special
Payment Instructions" and "Special Delivery Instructions" are both completed,
please issue the check for the purchase price of any Shares purchased and
return any Share Certificates evidencing any Shares not tendered or not
purchased in the name(s) of, and mail said check and Share Certificates to,
the person(s) so indicated. The undersigned acknowledges that Purchaser has no
obligation, pursuant to the "Special Payment Instructions," to transfer any
Shares from the name of the registered holder(s) thereof if Purchaser does not
accept for payment any of the Shares so tendered.
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS (SEE
(SEE INSTRUCTIONS 1, 5, 6 AND INSTRUCTIONS 1, 5, 6 AND 7)
7)
To be completed ONLY if the check
To be completed ONLY if the check for the purchase price of Shares
for the purchase price of Shares purchased or Share Certificates
purchased or Share Certificates evidencing Shares not tendered or
evidencing Shares not tendered or not purchased are to be mailed to
not purchased are to be issued in someone other than the under-
the name of someone other than the signed, or to the undersigned at
undersigned, or if Shares tendered an address other than that shown
hereby and delivered by book-entry under the undersigned's signature.
transfer which are not purchased
are to be returned by credit to an
account at one of the Book-Entry
Transfer Facilities other than
that designated above.
Mail [_] check [_] Share Certif-
icate(s) to:
Name ______________________________
(PLEASE PRINT)
Address ___________________________
Issue [_] check [_] Share ___________________________________
Certificate(s) to: (ZIP CODE)
Name ______________________________
(PLEASE PRINT)
Address ___________________________
___________________________________
(ZIP CODE)
___________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
<PAGE>
IMPORTANT
STOCKHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON OTHER SIDE)
----------------------------------------------------
----------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Dated: , 1997
(MUST BE SIGNED BY THE REGISTERED HOLDER(S)
EXACTLY AS NAME(S) APPEAR(S) ON SHARE
CERTIFICATE(S) OR ON A SECURITY POSITION LISTING OR
BY A PERSON(S) AUTHORIZED TO BECOME THE REGISTERED
HOLDER(S) BY CERTIFICATES AND DOCUMENTS TRANSMITTED
HEREWITH. IF SIGNATURE IS BY A TRUSTEE, EXECUTOR,
ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-FACT, OFFICER
OF A CORPORATION OR OTHER PERSON ACTING IN A
FIDUCIARY OR REPRESENTATIVE CAPACITY, PLEASE
PROVIDE THE FOLLOWING INFORMATION AND SEE
INSTRUCTION 5.)
Name(s): ___________________________________________
____________________________________________________
(PLEASE PRINT)
Capacity (full title): _____________________________
Address: ___________________________________________
____________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No.: _______________________
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.: ____
(SEE SUBSTITUTE FORM W-9 ON
REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: ______________________________
Name: ______________________________________________
(PLEASE TYPE OR PRINT)
Title: _____________________________________________
Name of Firm: ______________________________________
Address: ___________________________________________
____________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No.: _______________________
Dated: , 1997
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, signatures on
all Letters of Transmittal must be guaranteed by a firm that is a bank, broker,
dealer, credit union, savings association or other entity which is a member in
good standing of the Securities Transfer Agents Medallion Program or by any
other bank, broker, dealer, credit union, savings association or other entity
which is an "eligible guarantor institution," as such term is defined in Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended (each of the
foregoing constituting an "Eligible Institution"), unless the Shares tendered
thereby are tendered (i) by a registered holder of Shares who has not completed
either the box labeled "Special Payment Instructions" or the box labeled
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. See Instruction 5. If Share Certificates
are registered in the name of a person or persons other than the signer of this
Letter of Transmittal, or if payment is to be made or delivered to, or
certificates evidencing unpurchased Shares are to be issued or returned to, a
person other than the registered owner or owners, then the tendered Share
Certificates must be endorsed or accompanied by duly executed stock powers, in
either case signed exactly as the name or names of the registered owner or
owners appear on the Share Certificates or stock powers, with the signatures on
the Share Certificates or stock powers guaranteed by an Eligible Institution as
provided herein. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or, unless an Agent's Message (as defined in the Offer to Purchase) is
utilized, if the delivery of Shares is to be made by book-entry transfer
pursuant to the procedures set forth in the section entitled "THE TENDER
OFFER--Procedure for Tendering Shares" of the Offer to Purchase. Certificates
for all physically delivered Shares, or a confirmation of a book-entry transfer
into the Depositary's account at one of the Book-Entry Transfer Facilities of
all Shares delivered electronically, as well as a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof) and any
other documents required by this Letter of Transmittal, or an Agent's Message
in the case of a book-entry delivery, must be received by the Depositary at one
of its addresses set forth on the front page of this Letter of Transmittal by
the Expiration Date. Stockholders who cannot deliver their Share Certificates
and all other required documents to the Depositary by the Expiration Date must
tender their Shares pursuant to the guaranteed delivery procedure set forth in
the section entitled "THE TENDER OFFER--Procedure for Tendering Shares" of the
Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by
or through an Eligible Institution; (b) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form provided by Purchaser,
must be received by the Depositary prior to the Expiration Date; and (c) the
Share Certificates for all tendered Shares, in proper form for tender, or a
confirmation of a book-entry transfer into the Depositary's account at one of
the Book-Entry Transfer Facilities of all Shares delivered electronically, as
well as a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof), and any other documents required by this
Letter of Transmittal, must be received by the Depositary within three New York
Stock Exchange, Inc. trading days after the date of execution of such Notice of
Guaranteed Delivery, all as provided in the section entitled "THE TENDER
OFFER--Procedure for Tendering Shares" of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING PERSON, AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted. By
execution of this Letter of Transmittal (or a manually signed facsimile
hereof), all tendering stockholders waive any right to receive any notice of
the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any Share Certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
which are to be
<PAGE>
tendered in the box entitled "Number of Shares Tendered." In such case, a new
Share Certificate for the remainder of the Shares represented by the old Share
Certificate will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the box entitled "Special Delivery Instructions"
herein, as promptly as practicable following the expiration or termination of
the Offer. All Shares represented by Share Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any other
change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificate(s) or separate
stock powers are required, unless payment of the purchase price is to be made,
or Share Certificate(s) evidencing Shares not tendered or not purchased are to
be returned, in the name of any person other than the registered holder(s).
Signatures on any such Share Certificates or stock powers must be guaranteed
by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by,
appropriate stock powers, in either case, signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signature(s) on
any such Share Certificate(s) or stock powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Purchaser of the authority of such person so
to act must be submitted.
6. STOCK TRANSFER TAXES. Purchaser will pay any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be returned in the name of, any
person other than the registered holder(s), then the amount of any stock
transfer taxes (whether imposed on the registered holder(s), such other person
or otherwise) payable on account of the transfer to such person will be
deducted from the purchase price unless satisfactory evidence of the payment
of such taxes, or exemption therefrom, is submitted. EXCEPT AS PROVIDED IN
THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER OF TAX STAMPS TO BE
AFFIXED TO THE SHARE CERTIFICATE(S) LISTED IN THIS LETTER OF TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase
price of any Shares purchased is to be issued, or any Shares not tendered or
not purchased are to be returned, in the name of a person other than the
person(s) signing this Letter of Transmittal or if the check or any Share
Certificates not tendered or not purchased are to be mailed to someone other
than the person(s) signing this Letter of Transmittal or to the person(s)
signing this Letter of Transmittal at an address other than that shown above,
the appropriate boxes on this Letter of Transmittal should be completed.
Persons tendering Shares by book-entry transfer may request that Shares not
purchased be credited to such account at any of the Book-Entry Transfer
Facilities as such stockholder may designate in the box entitled "Special
Payment Instructions." If no such instructions are given, any such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facilities designated above.
8. SUBSTITUTE FORM W-9. The tendering holder of Shares is required to
provide the Depositary with such holder's correct taxpayer identification
number ("TIN") on Substitute Form W-9, which is provided below, unless an
exemption applies. In the case of such a holder who has completed the box
entitled "Special Payment Instructions" above, however, the correct TIN on
Substitute Form W-9 should be provided for the recipient of the payment
pursuant to these instructions. Failure to provide the information on the
Substitute Form W-9 may subject the tendering holder of Shares to a $50
penalty and to 31% federal income tax backup withholding on the payment of the
purchase price for the Shares.
<PAGE>
9. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Information Agent or the Dealer
Manager at their respective addresses and telephone numbers set forth on the
back cover of the Offer to Purchase. Additional copies of the Offer to
Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and
other related materials may be obtained from the Information Agent or from
brokers, dealers, commercial banks and trust companies.
THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY HEREOF
(TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND
ALL OTHER REQUIRED DOCUMENTS) OR NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED
BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER
TO PURCHASE).
IMPORTANT TAX INFORMATION
Under the federal income tax law, a holder of Shares whose tendered Shares
are accepted for payment is required by law to provide the Depositary (as
payer) with such holder's correct TIN on Substitute Form W-9 below. The holder
of Shares must also state that (i) such holder has not been notified by the
Internal Revenue Service that such holder is subject to backup withholding as a
result of a failure to report all interest or dividends or (ii) the Internal
Revenue Service has notified such holder that such holder is no longer subject
to backup withholding. If the Depositary is not provided with the correct TIN,
the holder of Shares may be subject to a $50 penalty imposed by the Internal
Revenue Service and payments made to such holder may be subject to backup
withholding.
Certain holders of Shares (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, such individual must submit a statement, signed under
penalties of perjury, attesting to such individual's exempt status. Forms of
such statements can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the holder of Shares. Backup withholding is not an
additional tax. Rather, the tax withheld pursuant to backup withholding rules
will be available as a credit against such holder's tax liabilities. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
WHAT NUMBER TO GIVE THE DEPOSITARY
If the holder of Shares is an individual, the correct TIN is his or her
social security number. In other cases, the correct TIN may be the employer
identification number of the record holder of the Shares tendered hereby. If
the Shares are in more than one name or are not in the name of the actual
owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report. If the tendering holder of Shares has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the holder should write "Applied For" in the space provided for the TIN
in Part I, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN within 30 days,
the Depositary may withhold 31% of all payments of the purchase price to such
holder until a TIN is provided to the Depositary.
<PAGE>
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- --------------------------------------------------------------------------------
SUBSTITUTE PART I--Taxpayer PART III--Social
FORM W-9 Identification Number--For Security Number OR
DEPARTMENT OF all accounts, enter taxpayer Employer Identification
THE TREASURY identification number in the Number
box at right. (For most
individuals, this is your
social security number. If
you do not have a number, see
OBTAINING A NUMBER in the
enclosed Guidelines.) Certify
by signing and dating below.
NOTE:If the account is in
more than one name, see chart
in the enclosed Guidelines to
determine which number to
give the payer.
INTERNAL
REVENUE ------------------------
SERVICE (If awaiting TIN write
"Applied For")
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN)
- --------------------------------------------------------------------------------
PART II--For Payees exempt from backup withholding, see the enclosed
Guidelines and complete as instructed therein.
- --------------------------------------------------------------------------------
CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me); and
(2) I am not subject to backup withholding either because (a) I have not
been notified by the Internal Revenue Service (IRS) that I am subject to
backup withholding as a result of a failure to report all interest or
dividends, or (b) the IRS has notified me that I am no longer subject to
backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have
been notified by the IRS that you are subject to backup withholding because
of underreporting interest or dividends on your tax return. However, if,
after being notified by the IRS that you were subject to backup withholding,
you received another notification from the IRS that you were no longer
subject to backup withholding, do not cross out item (2). (Also see
instructions in the enclosed Guidelines.)
- --------------------------------------------------------------------------------
SIGNATURE ____________________________ DATE _________________________________
NAME ________________________________________________________________________
ADDRESS _____________________________________________________________________
CITY ____________________ STATE ____________________ ZIP ____________________
NOTE: FAILURE TO COMPLETE AND RETURN THE SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER TO PURCHASE. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING (OR WILL SOON
APPLY FOR) A TAXPAYER IDENTIFICATION NUMBER
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an application in
the near future. I understand that, notwithstanding the information I
provided in Part III of the Substitute Form W-9 (and the fact that I have
completed this Certificate of Awaiting Taxpayer Identification Number), if
I do not provide a correct TIN to the Depositary within thirty (30) days,
31% of all reportable payments made to me pursuant to the Offer may be
withheld.
------------------------------------ ------------------------------------
Signature Date
If you have any questions regarding the Offer, please contact the Information
Agent or the Dealer Manager.
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street
New York, New York 10005
(212) 269-5550 (Call Collect)
(800) 755-3107 (Call Toll Free)
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1330
(212) 449-8209 (Call Collect)
<PAGE>
EXHIBIT (a)(11)
FOR IMMEDIATE RELEASE
---------------------
March 3, 1997
Media Contacts
--------------
<TABLE>
<S> <C> <C>
Tom Nicholson Neil A. Johnson Andy Stern
Sears, Roebuck and Co. Senior Vice President, Finance Stern, Nathan & Perryman
(847) 286-5231 and Chief Financial Officer (214) 373-1601
MaxServ, Inc.
(512) 834-8341
</TABLE>
SEARS ROEBUCK AND CO. AND SPECIAL COMMITTEE OF MAXSERV, INC.
REACH MERGER AGREEMENT
CHICAGO, Illinois - Sears, Roebuck and Co. [NYSE: S] and MaxServ, Inc.
[Nasdaq SmallCap Market/SM/: MXSV] today announced the execution of a definitive
merger agreement in which Sears agreed to increase the price of its offer,
through its wholly-owned subsidiary, for any and all outstanding shares of
MaxServ from $7.00 to $7.75. Sears pending tender offer will be amended to
reflect the cash price of $7.75 per share. The expiration date of the offer
will also be extended until Friday, March 14, 1997. Sears intends to
disseminate today to MaxServ shareholders a supplement to its prior Offer to
Purchase, dated February 4, 1997.
At a meeting held yesterday, the Special Committee of the Board of
Directors of MaxServ unanimously recommended approval of the merger agreement
and determined that the $7.75 per share offer is fair to and in the best
interests of the stockholders of MaxServ. The Special Committee has recommended
that MaxServ shareholders tender their shares in the offer. Nathaniel P.
Turner, Chairman of the Special Committee, said "Sears increased offer
represents a significant premium over the historic market value of the shares."
The members of the Special Committee have agreed to tender all of the shares
over which they have dispositive power, including 1,014,800 shares owned by two
investment funds.
Jane J. Thompson, President of Sears Home Services, said "Sears is pleased
to have reached an agreement with MaxServ. It has been Sears desire from the
outset to negotiate a friendly transaction with the Special Committee."
Ms. Thompson and Mr. Turner each stated that they "wished to thank the
officers and almost 3,000 employees of MaxServ, who the Special Committee and
Sears know are the true value of MaxServ and are the principal reason that the
Company has achieved the value represented by this transaction."
Sears and the Special Committee also credited the efforts of counsel to the
parties and in the shareholder litigation arising out of the offer in helping to
effectuate an agreement between the parties.
Sears, Roebuck and Co. is a leading U.S. retailer of apparel, home and
automotive products, and home services, with annual revenues of more than $38
billion. Sears has been a customer of MaxServ since 1983 and accounts for more
than 90 percent of MaxServ's revenues. MaxServ provides information services for
Sears customers and for the repair and servicing of appliances and electronics
by Sears Home Services technicians.
The Dealer Manager for the offer is Merrill Lynch & Co. The Information
Agent is D.F. King & Co. (1-800-755-3107).
<PAGE>
Exhibit (C)(1)
AGREEMENT AND PLAN OF MERGER
by and among
MAXSERV, INC.,
MAX ACQUISITION DELAWARE INC.,
and
SEARS, ROEBUCK AND CO.
Dated as of March 2, 1997
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE I - DEFINITIONS..................................................... 2
1.01 Definitions.................................................... 2
ARTICLE II - THE TENDER OFFER............................................... 8
2.01 The Offer...................................................... 8
2.02 Company Action................................................. 9
ARTICLE III - THE MERGER.................................................... 10
3.01 The Merger..................................................... 10
3.02 Effective Time................................................. 11
3.03 Certificate of Incorporation................................... 11
3.04 By-Laws........................................................ 11
3.05 Directors and Officers......................................... 11
3.06 Further Assurances............................................. 11
3.07 Stockholders' Meeting or Written Consent in Lieu of a Meeting.. 11
3.08 Company Board Representation; Section 14(f).................... 13
ARTICLE IV - CONVERSION OR CANCELLATION OF SHARES; STOCK RIGHTS............. 14
4.01 Conversion or Cancellation of Shares........................... 14
4.02 Exchange of Certificates; Paying Agent......................... 15
4.03 Dissenters' Rights............................................. 16
4.04 Transfer of Shares After the Effective Time.................... 16
4.05 Company Stock Options and Warrant.............................. 17
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF THE COMPANY................... 17
5.01 Organization, Qualification.................................... 17
5.02 Company Subsidiaries........................................... 17
5.03 The Company's Capitalization................................... 17
5.04 Company Investments............................................ 18
5.05 Authority...................................................... 18
5.06 Consents and Approvals; No Violation........................... 18
5.07 SEC Reports; Financial Statements.............................. 19
5.08 Proxy Statement; Offer Documents............................... 19
5.09 Undisclosed Liabilities........................................ 20
5.10 Absence of Certain Changes or Events........................... 20
5.11 Patents, Trademarks, Etc....................................... 20
5.12 Employee Benefit Plans......................................... 21
5.13 Legal Proceedings, Etc......................................... 21
5.14 Taxes.......................................................... 22
5.15 Compliance with Law............................................ 22
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
5.16 Insider Interests.............................................. 22
5.17 Environmental Protection....................................... 22
5.18 Labor Matters.................................................. 23
5.19 Brokers and Finders............................................ 23
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF
THE PARENT AND THE PURCHASER................................................ 24
6.01 Corporation Organization....................................... 24
6.02 Authorized Capital............................................. 24
6.03 Authority...................................................... 24
6.04 No Prior Activities............................................ 24
6.05 No Financing Contingency....................................... 25
6.06 Governmental Filings; No Violations............................ 25
6.07 Brokers and Finders............................................ 25
6.08 Offer Documents; Proxy Statement; Other Information............ 26
ARTICLE VII - COVENANTS OF THE PARTIES...................................... 26
7.01 Conduct of Business of the Company............................. 26
7.02 Notification of Certain Matters................................ 28
7.03 Access to Information.......................................... 28
7.04 Further Information............................................ 29
7.05 Reasonable Efforts............................................. 29
7.06 Public Announcements........................................... 29
7.07 Indemnity; D&O Insurance....................................... 30
7.08 Other Transactions............................................. 32
7.09 Contribution to Capital........................................ 32
ARTICLE VIII - CONDITIONS TO THE MERGER..................................... 32
8.01 Conditions to Each Party's Obligation to Effect the Merger..... 32
8.02 Conditions to the Obligations of the Parent and the Purchaser
to Effect the Merger........................................... 33
8.03 Conditions to the Obligations of the Company to Effect the
Merger......................................................... 33
ARTICLE IX - CLOSING........................................................ 34
9.01 Time and Place................................................. 34
9.02 Filings at the Closing......................................... 34
ARTICLE X - TERMINATION; AMENDMENT; WAIVER.................................. 34
10.01 Termination.................................................... 34
10.02 Effect of Termination.......................................... 35
10.03 Fees and Expenses.............................................. 35
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
ARTICLE XI - MISCELLANEOUS 36
11.01 Survival of Representations, Warranties, Covenants and
Agreements.................................................... 36
11.02 Amendment and Modification.................................... 36
11.03 Waiver of Compliance; Consents................................ 36
11.04 Counterparts.................................................. 36
11.05 Governing Law; Submission to Jurisdiction..................... 37
11.06 Notices....................................................... 37
11.07 Entire Agreement, Assignment Etc.............................. 38
11.08 Validity...................................................... 38
11.09 Headings; Certain Definitions................................. 39
11.10 Specific Performance.......................................... 39
ANNEX A ................................................................... A-1
ANNEX B ................................................................... B-1
</TABLE>
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"),
dated as of March 2, 1997, among MaxServ, Inc., a Delaware corporation (the
"Company"), Max Acquisition Delaware Inc., a Delaware corporation (the
"Purchaser"), and Sears, Roebuck and Co., a New York corporation (the "Parent").
WHEREAS, on February 4, 1997, Parent and Purchaser commenced a tender
offer to purchase all outstanding shares of common stock, par value $0.01 per
share (the "Shares") of the Company for a purchase price of $7.00 per Share, net
to the seller in cash, without interest thereon, upon the terms and subject to
the conditions set forth in the Offer to Purchase dated February 4, 1997 (the
"Offer to Purchase") of Purchaser and the related Letter of Transmittal
(collectively, the "Initial Offer"), which are filed as exhibits to each of (a)
the Tender Offer Statement on Schedule 14D-1 filed by Parent and Purchaser
(together with all supplements or amendments thereto, the "Schedule 14D-1") and
(b) the Transaction Statement on Schedule 13E-3 filed by Parent and Purchaser
(together with all supplements or amendments thereto, the "Schedule 13E-3") in
respect of the Initial Offer with the Securities and Exchange Commission (the
"SEC") on February 4, 1997;
WHEREAS, on February 18, 1997, the Special Committee (the "Special
Committee") of the Board of Directors of the Company (the "Company Board") filed
a Solicitation/Recommendation Statement on Schedule 14D-9 on behalf of the
Company (together with all supplements or amendments thereto, the "Schedule 14D-
9") in which it recommended the Company's stockholders reject the Initial Offer;
WHEREAS, the Boards of Directors of Purchaser and, on the
recommendation of the Special Committee and, following approval of the
disinterested directors of the Company Board, the Company, each have determined
that it is in the best interests of their respective companies and stockholders
for Parent to acquire the Company upon the terms and conditions set forth
herein;
WHEREAS, promptly following the execution hereof, Parent and Purchaser
will file with the SEC an amendment to the Schedule 14D-1 which reflects the
Amendments, and the Special Committee will file an amendment to the Schedule
14D-9 in which it recommends to the Company's stockholders that they accept the
Offer;
WHEREAS, the Company, the Parent and the Purchaser desire to make
certain representations, warranties and agreements in connection with this
Agreement;
WHEREAS, to complete the acquisition described herein, the respective
Boards of Directors of the Purchaser and the Company, and the Parent acting as
the sole stockholder of the Purchaser, have approved the Offer and the
subsequent merger of the Purchaser with and into the Company upon the terms and
subject to the conditions of this Agreement;
WHEREAS, in order to induce the Purchaser and the Parent to enter into
this Agreement, the Stockholders have entered into the Tender Agreement,
pursuant to which such
1
<PAGE>
stockholders have agreed to tender their shares of Common Stock pursuant to and
in accordance with the terms of the Offer;
NOW, THEREFORE, in consideration of the representations, warranties
and agreements herein contained, and subject to the terms and conditions herein
contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. For purposes of this Agreement and in addition to
any and all definitions and interpretations otherwise provided throughout this
Agreement, the following terms shall have the meanings set forth below. Any of
such terms, unless the context otherwise requires, may be used in the singular
or plural, depending on reference.
"Acquisition Proposal" shall mean any proposed merger, sale of assets,
sale of shares of capital stock, acquisition of Shares other than pursuant to
the Offer or the Merger or similar transaction involving the Company or any
division of the Company.
"Amendments" shall have the meaning set forth in Section 2.01.
"Certificate of Incorporation" shall mean the Certificate of
Incorporation of the Company.
"Certificate" or "Certificates" shall mean the certificates that,
immediately prior to the Effective Time, represent issued and outstanding
Shares.
"Closing" shall have the meaning set forth in Section 9.01.
"Closing Date" shall mean the date on which the Closing occurs.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean the common stock of the Company, par value
$.01 per share.
"Company Balance Sheet" shall mean the audited consolidated balance
sheet of the Company dated as of May 31, 1996.
"Company Benefit Plans" shall mean (i) all employee pension and
welfare benefit plans, agreements and arrangements described in section 3(3) of
ERISA, including without limitation, all qualified retirement plans and medical,
dental, life insurance and other similar plans, maintained by the Company, to
which the Company has contributed or been
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required to contribute, or with respect to which the Company has a liability,
whether direct or indirect, actual or contingent, (ii) all stock option, change
of control and similar plans, agreements and arrangements maintained by the
Company, and (iii) all material employment, bonus, incentive, and similar plans,
agreements and arrangements maintained by the Company.
"Company Board" shall have the meaning set forth in the second Whereas
clause of this Agreement.
"Constituent Corporations" shall mean the Purchaser and the Company.
"Delaware Certificate of Merger" shall have the meaning set forth in
Section 3.02.
"DGCL" shall mean the General Corporation Law of the State of
Delaware.
"Director" shall mean a member of the Company Board as of the date
hereof.
"Disclosure Schedule" shall mean a schedule, attached hereto and
incorporated herein by reference, executed and delivered by the Company to the
Purchaser and the Parent as of the date hereof that sets forth the exceptions to
the representations and warranties contained in Article V hereof and certain
other information called for by this Agreement.
"Dissenting Shares" shall mean Shares that are not voted in favor of
the approval and adoption of the Merger and with respect to which appraisal
rights are demanded and perfected in accordance with Section 262 of the DGCL and
not withdrawn.
"Dissenting Stockholders" shall mean the stockholders of the Company
who hold Dissenting Shares.
"Effective Time" shall have the meaning set forth in Section 3.02.
"Environmental Claims" shall mean all written allegations, notices of
violation, liens, claims, demands, suits, or causes of action for any damage,
including, without limitation, personal injury, property damage, lost use of
property or consequential damages, arising directly or indirectly out of
Environmental Conditions or Environmental Laws. By way of example only,
Environmental Claims include (i) violations of or obligations under any contract
related to Environmental Laws or Environmental Conditions, (ii) actual or
threatened damages to natural resources, (iii) claims for nuisance or its
statutory equivalent, (iv) claims for the recovery of response costs, or
administrative or judicial orders directing the performance of investigations,
responses or remedial actions under any Environmental Laws, (v) requirements to
implement "corrective action" pursuant to any order or permit issued pursuant to
Environmental Laws, (vi) fines, penalties or liens of any kind against property
related to Environmental Laws or Environmental Conditions, and (vii) with regard
to any
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present or former employees, claims relating to exposure to or injury from
Environmental Conditions.
"Environmental Conditions" shall mean the state of the environment,
including natural resources, soil, surface water, ground water, or ambient air,
relating to or arising out of the use, storage, treatment, transportation,
release, disposal, dumping or threatened release of Hazardous Substances.
"Environmental Laws" shall mean all applicable federal, state,
district, local and foreign laws, all rules or regulations promulgated
thereunder, and all orders, consent orders, judgments, notices, permits or
demand letters issued or entered pursuant thereto, relating to pollution or
protection of the environment (e.g., ambient air, surface water, ground water,
or soil). Environmental Laws shall include, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Toxic Substances Control Act, as amended, the Hazardous Materials
Transportation Act, as amended, the Resource Conservation and Recovery Act, as
amended, the Clean Water Act, as amended, the Safe Drinking Water Act, as
amended, the Clean Air Act, as amended, the Atomic Energy Act of 1954, as
amended, the Occupational Safety and Health Act, as amended, and all analogous
laws promulgated or issued by any state or other governmental authority.
"Environmental Reports" shall mean any and all written analyses,
summaries or explanations, in the possession or control of the Company, of (a)
any Environmental Conditions in, on or about the Properties (defined below) of
the Company or (b) the Company's compliance with Environmental Laws.
"Equity Rights" shall have the meaning set forth in Section 5.03.
"ERISA" shall mean the Employee Retirement Income Securities Act of
1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Expiration Date" shall mean the scheduled expiration date and the
time the Offer is, from time to time, set to expire.
"Funds" shall have the meaning set forth in Section 4.02(a).
"Hazardous Substances" shall mean all pollutants, contaminants,
chemicals, wastes, and any other carcinogenic, ignitable, corrosive, reactive,
toxic or otherwise hazardous substances or materials subject to regulation,
control or remediation under Environmental Laws, including but not limited to
petroleum, urea formaldehyde, flammable, explosive and
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radioactive materials, PCBs, pesticides, herbicides, asbestos,
sludge, slag, acids, metals, and solvents.
"Indemnified Parties" shall mean each present and former director or
officer of the Company.
"Indemnity Agreements" shall have the meaning set forth in Section
7.07.
"Initial Offer" shall have the meaning set forth in the first Whereas
clause of this Agreement.
"Intellectual Property" shall mean trademarks (registered or
unregistered), service marks, brand names, certification marks, trade dress,
assumed names, trade names and other indications of origin, the goodwill
associated with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing, including any
extension, modification or renewal of any such registration or application;
inventions, discoveries and ideas, whether patented, patentable or not in any
jurisdiction; nonpublic information, trade secrets and confidential information
(including, without limitation, (i) all databases owned, maintained, supported
and updated by Parent, located at Parent's computer facilities and (ii) Sears
TIPS Database, Sears MAX Database, Sears STAC Database (as such terms are
defined in that certain Service Agreement by and between the Company and the
Parent dated as of May 20, 1993), and any other databases created by the Company
specifically for providing services to Parent) and rights in any jurisdiction to
limit the use or disclosure thereof by any person; writings and other works,
whether copyrighted, copyrightable or not in any jurisdiction; registration or
applications for registration of copyrights in any jurisdiction, and any
renewals or extensions thereof; any similar intellectual property or proprietary
rights and computer programs and software (including source code, object code
and data); licenses, immunities, covenants not to sue and the like relating to
the foregoing; and any claims or causes of action arising out of or related to
any infringement or misappropriation of any of the foregoing.
"Loan Agreement" shall mean the Loan Agreement between the Company and
Texas Commerce Bank, National Association, dated as of April 29, 1994, as
amended.
"Material Adverse Effect" shall mean a material adverse effect on the
business, assets, financial condition or results of operation of the Company or
on the ability of the Company, the Parent or the Purchaser to consummate the
transactions contemplated by this Agreement, or any event or events which,
individually or in the aggregate, constitute or, with the passage of time, would
constitute a Material Adverse Effect.
"Merger" shall have the meaning set forth in Section 3.01.
"Merger Consideration" shall have the meaning set forth in Section
4.01(a).
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"Offer" shall have the meaning set forth in Section 2.01(a).
"Offer Conditions" shall have the meaning set forth in Section
2.01(a).
"Offer Documents" shall mean the documents pursuant to which the Offer
will be made, including all materials required to be transmitted to stockholders
pursuant to Regulations 13E-3 and 14D-1 of the Exchange Act, together with any
supplements or amendments thereto.
"Offer to Purchase" shall have the meaning set forth in the first
whereas clause of this Agreement.
"Options" shall mean outstanding options to purchase Shares issued
pursuant to the Stock Option Plans, or otherwise.
"Other Filings" shall have the meaning set forth in Section 3.07(b).
"Parent Companies" shall mean the Parent together with any wholly-
owned subsidiaries of the Parent.
"Paying Agent" shall have the meaning set forth in Section 4.02(a).
"Properties" shall mean the real or personal properties owned or
leased by the Company.
"Proxy Statement" shall mean any proxy or information statement or
similar materials distributed to the Company's stockholders in connection with
the Merger, including any amendments or supplements thereto.
"Real Property" shall mean all of the real property owned in fee by
the Company.
"Real Property Leases" shall mean all of the material leases and
subleases under which, as of the date hereof, the Company has the right to
occupy space.
"Schedule 13E-3" shall have the meaning set forth in the first Whereas
clause of this Agreement.
"Schedule 14D-1" shall have the meaning set forth in the first Whereas
clause of this Agreement.
"Schedule 14D-9" shall have the meaning set forth in the second
Whereas clause of this Agreement.
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"SEC" shall mean the Securities and Exchange Commission.
"SEC Reports" shall have the meaning set forth in Section 5.07.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Shares" shall have the meaning set forth in the first Whereas clause
of this Agreement.
"Special Committee" shall have the meaning set forth in the second
Whereas clause of this Agreement.
"Staff" shall mean the employees, representatives and other staff of
the SEC.
"Stockholders" shall mean Sunwestern Investment Fund II, a Texas
limited partnership, and Sunwestern Cayman 1984 Partners.
"Stockholders' Meeting" shall mean the annual or special meeting of
the stockholders of the Company held for the purpose of approving and adopting
this Agreement, the Merger and the transactions contemplated hereby and thereby.
"Stock Option Plans" shall mean the Company's 1988 Stock Option Plan
and the Company's 1994 Stock Option Plan.
"Stock Purchase Agreement" shall mean that certain Stock Purchase
Agreement by and between the Parent and the Company dated as of December 29,
1994.
"Surviving Corporation" shall mean the Company after the Merger.
"Taxes" shall mean all federal, state, local, foreign and other taxes,
assessments or other governmental charges, including, without limitation,
income, estimated income, gross receipts, profits, occupation, franchise,
capital stock, real or personal property, sales, use, value added, transfer,
license, commercial rent, payroll, employment or unemployment, social security,
disability, withholding, alternative or add-on minimum, customs, excise, stamp
or environmental taxes, and further including all interest, penalties and
additions in connection therewith for which the Company may be liable.
"Tender Agreement" shall mean that certain Stockholder Tender
Agreement, dated as of the date hereof by and among, the Purchaser, the Parent
and the Stockholders.
"Transfer Agent" shall mean the transfer agent selected by the
Company.
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"Warrants" shall mean the Warrant No. 1 to purchase 50,000 Shares
issued to Needham & Co., Inc., dated August 30, 1994.
ARTICLE II
THE TENDER OFFER
2.01 The Offer. (a) As promptly as practicable following the
execution hereof, Parent and Purchaser will amend the Initial Offer (the Initial
Offer as now or hereafter amended, is referred to herein as the "Offer") to
provide (i) for a purchase price per Share of $7.75 (the "Per Share Price"),
(ii) for the period the Offer is to remain open to be extended to provide for an
initial expiration of the Offer no later than at 12:00 midnight on Friday, March
14, 1997 and (iii) for the consummation of the Offer to be subject only to the
conditions (the "Offer Conditions") set forth on Annex A hereto (collectively,
the "Amendments"). Without the prior written consent of the Company, neither
Parent nor Purchaser shall (i) reduce the number of Shares subject to the Offer,
(ii) reduce the price per Share to be paid pursuant to the Offer, (iii) extend
the Offer if all of the Offer Conditions have been satisfied or waived, (iv)
change the form of consideration payable in the Offer, (v) amend, modify or add
to the Offer Conditions (provided that Parent or Purchaser in its sole
discretion may waive any such conditions) or (vi) amend any other term of the
Offer in a manner adverse to the holders of the Shares. Notwithstanding the
foregoing, Parent and Purchaser may, without the consent of the Company, (A)
extend the Offer, if at the scheduled expiration date of the Offer any of the
Offer Conditions shall not have been satisfied or waived, until such time as
such conditions are satisfied or waived, (B) extend the Offer for any period
required by any statute, rule, regulation, interpretation or position of the SEC
or any other governmental authority or agency (domestic, foreign or
supranational) applicable to the Offer, and (C) extend the Offer on one or more
occasions for an aggregate of not more than 15 business days beyond the latest
expiration date that would otherwise be permitted under clauses (A) and (B) of
this sentence in order to obtain at least 90% of the outstanding Shares.
Purchaser will promptly pay for all Shares tendered and not withdrawn pursuant
to the Offer as soon as practicable after the expiration of the Offer. The
obligation of Purchaser to accept for payment and pay for Shares tendered
pursuant to the Offer shall be subject only to the satisfaction or waiver of the
Offer Conditions.
(b) As promptly as reasonably practicable following execution of this
Agreement, the Parent and the Purchaser shall file with the SEC each of the
Schedule 13E-3 and Schedule 14D-1, which shall reflect the Amendments. The
Offer Documents shall comply as to form in all material respects with the
requirements of the Exchange Act, and the rules and regulations promulgated
thereunder and, on the date filed with the SEC and on the date first published,
sent or given to the holders of Shares, shall not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation will be made by the Parent or the Purchaser with
respect to information supplied by the Company or any Stockholder in writing
specifically for inclusion in the Offer Documents, and the Offer Documents may
contain a disclaimer to such effect. Each of the Parent, the Purchaser and the
Company agrees promptly to correct any information supplied by it specifically
for
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inclusion in the Offer Documents if and to the extent that such information
shall have become false or misleading in any material respect, and each of the
Parent and the Purchaser further agrees to take all steps necessary to cause the
Offer Documents as so corrected to be filed with the SEC and to be disseminated
to holders of Shares, in each case as and to the extent required by applicable
federal securities laws. The Parent and the Purchaser agree to provide the
Company and its counsel in writing with any comments the Parent, the Purchaser
or their counsel may receive from the SEC or its Staff with respect to the Offer
Documents promptly after the receipt of such comments and shall provide the
Company and its counsel an opportunity to participate, including by way of
discussions with the Commission or its Staff, in the response of the Parent and
Purchaser to such comments. The Company and its counsel shall be given all
practicable opportunity to review and comment upon the Offer Documents and all
amendments and supplements thereto prior to their filing with the SEC or
dissemination to the stockholders of the Company.
(c) The Parent will make available to the Purchaser sufficient funds
sufficiently in advance of the Effective Time to consummate the Offer and the
Merger in accordance with the provisions of this Agreement.
2.02 Company Action. (a) The Company hereby approves of and
consents to the Offer and the Merger and represents and warrants that (X) the
Special Committee has unanimously adopted resolutions determining that this
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, are fair to, and in the best interests of, the stockholders of the
Company other than Parent and recommending without qualification that the
stockholders of the Company accept the Offer, tender their Shares thereunder to
the Purchaser and approve and adopt this Agreement and the Merger and (Y) the
disinterested directors of the Company Board and the Company Board have each (i)
unanimously adopted resolutions that approved and adopted this Agreement and the
transactions contemplated hereby, including the Offer and the Merger and the
transactions contemplated thereby, in all respects and (ii) taken all other
action necessary to render any state takeover statutes inapplicable to the Offer
and the Merger and the Tender Agreement and (Z) as required by Section 7.04 (e)
of the Stock Purchase Agreement, a majority of the directors on the Company
Board who are not affiliated with the Parent have approved the acquisition of
additional Shares by the Parent or its affiliates pursuant to the terms of the
Offer and the Merger.
(b) The Company has been advised by each of its executive officers
and each of its directors, that each such person intends to tender pursuant to
the Offer all outstanding Shares owned or controlled by such person. The
Company represents that the Special Committee has received the oral opinion of
Broadview Associates LLC that the consideration to be received by holders of
Shares pursuant to the Offer and the Merger is fair to such holders from a
financial point of view, and the Company will provide a copy of the written
form of such opinion to the Parent prior to the filing of the amendments to the
Schedule 14D-1 and the Schedule 14D-9 contemplated hereby.
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(c) The Special Committee shall use its best efforts to file with the
SEC, on the date the Offer Documents are filed with the SEC, an amendment to the
Schedule 14D-9 which contains the recommendations described in Sections
2.02(a)(X) (other than any recommendation with respect to the Merger), and shall
mail the Schedule 14D-9 to the stockholders of the Company. The Schedule 14D-9
shall comply in all material respects with the requirements of the Exchange Act
and the rules and regulations promulgated thereunder on the date filed with the
SEC and on the date first published, sent or given to the Company's
stockholders, and shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except that no representation is made by the
Company with respect to information supplied in writing by the Parent or the
Purchaser specifically for inclusion or incorporation by reference in the
Schedule 14D-9, and may contain a disclaimer to such effect. Each of the
Company, the Parent and the Purchaser agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that such
information shall have become false or misleading in any material respect, and
the Company further agrees to take all steps necessary to amend or supplement
the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented
to be filed with the SEC and disseminated to the Company's stockholders, in each
case as and to the extent required by applicable federal securities laws. The
Company agrees to provide the Parent and its counsel in writing with any
comments the Company or its counsel may receive from the SEC or its Staff with
respect to the Schedule 14D-9 promptly after the receipt of such comments. The
Parent and its counsel shall be given all practicable opportunity to review and
comment upon the Schedule 14D-9 and all amendments and supplements thereto prior
to their filing with the SEC or dissemination to stockholders of the Company.
ARTICLE III
THE MERGER
3.01 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, the Parent shall cause the Purchaser to merge
(the "Merger") with and into the Company and the separate corporate existence of
the Purchaser shall thereupon cease. The Company shall be the surviving
corporation in the Merger and shall, following the Merger, continue as a wholly-
owned subsidiary of Parent, governed by the laws of the State of Delaware, and
the separate corporate existence of the Company, with all its rights,
privileges, immunities, powers and franchises, of a public as well as of a
private nature, shall continue unaffected by the Merger. From and after the
Effective Time, the Merger shall have the effects specified in the DGCL.
3.02 Effective Time. At the Closing contemplated in Section 9.01,
the Company and the Parent will cause a Certificate of Merger or, if applicable,
a Certificate of Ownership and Merger (in either case, the "Delaware Certificate
of Merger") to be filed with
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the Secretary of State of the State of Delaware as provided in the DGCL. The
Merger shall become effective as of the date and at the time the Delaware
Certificate of Merger is duly filed with the Secretary of State of the State of
Delaware (or such later time as may be specified therein), and such time is
hereinafter referred to as the "Effective Time."
3.03 Certificate of Incorporation. The Certificate of Incorporation
of the Company shall be amended at the Effective Time to read as set forth in
Annex B hereto, until duly amended in accordance with the terms thereof and the
DGCL.
3.04 By-Laws. The By-Laws of the Purchaser as in effect immediately
prior to the Effective Time shall be the By-Laws of the Surviving Corporation,
until duly amended in accordance with the terms thereof and the DGCL.
3.05 Directors and Officers. At the Effective Time, the directors of
the Purchaser immediately prior to the Effective Time shall be the directors of
the Surviving Corporation, each of such directors to hold office, subject to the
applicable provisions of the Certificate of Incorporation and By-Laws of the
Surviving Corporation, until their respective successors shall be duly elected
or appointed and qualified. The officers of the Company immediately prior to
the Effective Time shall be the initial officers of the Surviving Corporation,
in each case until their respective successors are duly elected or appointed and
qualified.
3.06 Further Assurances. If at any time after the Effective Time the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are necessary,
desirable or proper: (a) to 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, privileges, powers, franchises, properties or assets of either of
the Constituent Corporations, or (b) otherwise to carry out the purposes of this
Agreement, the proper officers and directors of the Surviving Corporation are
hereby authorized on behalf of the respective Constituent Corporations to
execute and deliver, in the name and on behalf of the respective Constituent
Corporations, all such deeds, bills of sale, assignments and assurances and do,
in the name and on behalf of the Constituent Corporations, all such other acts
and things necessary, desirable or proper to vest, perfect or confirm its right,
title or interest in, to or under any of the rights, privileges, powers,
franchises, properties or assets of the Constituent Corporations and otherwise
to carry out the purposes of this Agreement.
3.07 Stockholders' Meeting or Written Consent in Lieu of a Meeting.
In the event that the Purchaser owns less than ninety percent (90%) of the
outstanding Shares following expiration of the Offer, the Company shall take all
action to the extent necessary to consummate the Merger in accordance with
applicable law, including:
(a) (i) if requested by Parent, duly call, give notice of, convene
and hold the Stockholders' Meeting, as soon as practicable;
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(ii) include in any Proxy Statement the recommendation of the
Special Committee and the Company Board that stockholders of the Company vote in
favor of the approval and adoption of this Agreement and the Merger and the
other transactions contemplated hereby and thereby and the determination of the
Special Committee that this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, are fair to, and in the best interests of,
the stockholders of the Company; and
(iii) as soon as practicable after the Parent's request, (A)
prepare and file a preliminary Proxy Statement with the SEC, (B) after
consultation with the Parent and the Purchaser, respond promptly to any comments
made by the SEC with respect to the Proxy Statement and any preliminary version
thereof, provided, however, that the Company shall provide the Parent and its
counsel with copies of any written comments from the SEC or its Staff and an
opportunity to participate, including by way of discussions with the SEC or its
Staff, in the response of the Company to such comments, and (C) cause the Proxy
Statement to be mailed to its stockholders at the earliest practicable time
after responding to all such comments to the satisfaction of the Staff of the
SEC and to obtain the necessary approvals by its stockholders of this Agreement.
(b) The Company, the Parent and the Purchaser, as the case may be,
shall promptly prepare and file any other filings required under the Exchange
Act or any other Federal or state securities or corporate laws relating to the
Merger and the transactions contemplated herein (the "Other Filings"). Each of
the parties hereto shall notify the other parties hereto promptly of the receipt
by it of any comments from the SEC or its Staff and of any request of the SEC
for amendments or supplements to the Proxy Statement or by the SEC or any other
governmental officials with respect to any Other Filings or for additional
information and will supply the other parties hereto with copies of all
correspondence between it and its representatives, on the one hand, and the SEC
or the members of its Staff or any other governmental officials, on the other
hand, and will provide the other parties and their counsel with the opportunity
to participate, including by way of discussions with the SEC or its Staff, in
the response of such party to such comments, with respect to the Proxy
Statement, any Other Filings or the Merger. The Company, the Parent and the
Purchaser each shall use its best efforts to obtain and furnish the information
required to be included in the Proxy Statement, any Other Filings or the Merger.
If at any time prior to the time of approval and adoption of this Agreement by
the Company's stockholders there shall occur any event that should be set forth
in an amendment or supplement to the Proxy Statement, the Company shall promptly
prepare and mail to its stockholders such amendment or supplement. The Company
shall not mail the Proxy Statement or, except as required by the Exchange Act or
the rules and regulations promulgated thereunder, any amendment or supplement
thereto, to the Company's stockholders unless the Company has first obtained the
consent of the Parent to such mailing.
(c) At the Stockholders' Meeting or in any written consent in lieu of
a meeting, the Parent, the Purchaser and their affiliates will vote all Shares
owned by them and will exercise all voting rights or proxies held by them in
favor of approval and adoption of this Agreement, the Merger, and the
transactions contemplated hereby and thereby.
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(d) Notwithstanding the foregoing, in the event that the Purchaser
shall acquire at least ninety percent (90%) of the outstanding Shares, the
parties hereto agree, at the request of the Purchaser, to take all necessary and
appropriate action to cause the Merger to become effective, in accordance with
Section 253 of the DGCL, as soon as reasonably practicable after such
acquisition and satisfaction or waiver of the conditions of Article VIII,
without a meeting of the stockholders of the Company.
(e) Without limiting the generality of the foregoing, other than as
specifically set forth in clause (a) (ii) above, the Company agrees that its
obligations pursuant to this Section 3.07 shall not be affected by either the
commencement, public proposal, public disclosure or other communication to the
Company by any third party of any offer to acquire some or all of the Shares or
all or any substantial portion of the assets of the Company or any change in the
recommendation of the Company Board.
3.08 Company Board Representation; Section 14(f).
(a) Promptly upon the purchase by the Purchaser of the Shares pursuant
to the Offer, and from time to time thereafter, the Purchaser shall be entitled
to designate up to such number of directors, rounded up to the next whole
number, on the Company Board as shall give the Purchaser representation on the
Company Board equal to the product of the total number of directors on the
Company Board (giving effect to the directors elected pursuant to this sentence)
multiplied by the percentage, expressed as a decimal, that the aggregate number
of Shares beneficially owned by the Purchaser or any affiliate of the Purchaser
following such purchase bears to the total number of Shares, and the Company
shall, at such time, promptly take all actions necessary to cause the
Purchaser's designees to be elected as directors of the Company, including
increasing the size of the Company Board or securing the resignations of
incumbent directors, or both. The Company shall cause persons designated by the
Purchaser to constitute the same percentage as persons designated by the
Purchaser shall constitute of the Company Board to be appointed to each
committee of the Company Board (except the Special Committee), to the extent
permitted by applicable law. Notwithstanding the foregoing, until the Effective
Time, the Company shall use its best efforts to ensure that all the members of
the Company Board and each committee of the Company Board as of the date hereof
who are not employees of the Company shall remain members of the Company Board
and of such committees.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under this Section 3.08, and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 to fulfill such
obligations. The Parent and the Purchaser shall supply to the Company and be
solely responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1.
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(c) Following the election or appointment of designees of the
Purchaser pursuant to this Section 3.08, prior to the Effective Time, the Parent
and the Purchaser each specifically acknowledge and agree that any amendment of
this Agreement or, the Certificate of Incorporation or Bylaws of the Company,
any termination of this Agreement by the Company, any extension by the Company
of the time for the performance of any of the obligations or other acts of the
Company or the Purchaser or waiver of any of the Company's rights hereunder,
shall require the concurrence of a majority of the directors of the Company then
in office who neither were designated by the Purchaser nor are employees of the
Company.
ARTICLE IV
CONVERSION OR CANCELLATION OF SHARES; STOCK RIGHTS
4.01 Conversion or Cancellation of Shares. At the Effective Time, by
virtue of the Merger and without any action on the part of the holders thereof:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than Shares owned by the Parent Companies, Shares held by
the Dissenting Stockholders, and any Shares held in the treasury of the Company)
shall be converted into and represent the right to receive, without interest, an
amount in cash equal to the greater of $7.75 net or the amount per share which
may be paid pursuant to the Offer as it may be amended (the "Merger
Consideration") upon surrender of the Certificates. As of the Effective Time,
all such Shares shall no longer be outstanding, shall be automatically cancelled
and shall cease to exist, and each holder of a Certificate which formerly
represented any such Shares shall thereafter cease to have any rights with
respect to such Shares, except the right to receive the Merger Consideration
without interest for such Shares upon the surrender of such Certificate or
Certificates in accordance with Section 4.02.
(b) Each Share issued and outstanding immediately prior to the
Effective Time and owned by any of the Parent Companies, and each Share issued
and held in the Company's treasury immediately prior to the Effective Time,
shall no longer be outstanding, shall be cancelled without payment of any
consideration therefor and shall cease to exist, and each holder of a
Certificate representing any such Shares shall thereafter cease to have any
rights with respect to such Shares.
(c) Each Share of the Purchaser issued and outstanding immediately
prior to the Effective Time shall be converted into and become one fully-paid
and non-assessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
4.02 Exchange of Certificates; Paying Agent. (a) Prior to the
Closing, the Parent shall select a bank or trust company to act as paying agent
(the "Paying Agent") for the
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payment of the cash consideration specified in Section 4.01 pursuant to
irrevocable instructions from the Parent upon surrender of Certificates
converted into the right to receive cash pursuant to the Merger. Prior to the
Effective Time, the Parent shall make available, or cause the Purchaser to make
available, to the Paying Agent immediately available funds in the amount of the
Merger Consideration multiplied by the number of outstanding Shares (the
"Funds") upon surrender of Certificates pursuant to Section 4.01, it being
understood that any and all interest earned on the Funds shall be paid over by
the Paying Agent as the Parent shall direct. The Funds shall be held as a
separate fund and not used for any purpose except as provided herein.
(b) Promptly after the Effective Time, the Paying Agent shall mail to
each person who was, at the Effective Time, a holder of record of a Certificate
or Certificates, other than the Company or any of the Parent Companies, a letter
of transmittal and instructions for use in effecting the surrender, in exchange
for payment in cash therefor, of the Certificates. The letter of transmittal
shall specify that delivery shall be effected, and risk of loss and title shall
pass, only upon proper delivery to and receipt of such Certificates by the
Paying Agent and shall be in such form and have such provisions as the Parent
shall reasonably specify. Upon surrender to the Paying Agent of such
Certificates, together with the letter of transmittal, duly executed and
completed in accordance with the instructions thereto and such other documents
as may be reasonably required by the Paying Agent, the Paying Agent shall
promptly pay to the persons entitled thereto, out of the Funds, a check in the
amount to which such persons are entitled pursuant to Section 4.01(a), after
giving effect to any required tax withholdings, and such Certificate shall
forthwith be cancelled. No interest will be paid or will accrue on the amount
payable upon the surrender of any such Certificates. If payment is to be made
to a person other than the registered holder of the Certificates surrendered, it
shall be a condition of such payment that the Certificates so surrendered shall
be properly endorsed or otherwise in proper form for transfer and that the
person requesting such payment shall pay any transfer or other taxes required by
reason of the payment to a person other than the registered holder of the
Certificates surrendered or establish to the satisfaction of the Surviving
Corporation or the Paying Agent that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 4.02, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the amount of cash, without
interest, into which the Shares theretofore represented by such Certificate
shall have been converted pursuant to Section 4.01. No interest shall accrue or
be paid on any portion of the Merger Consideration.
(c) One hundred eighty days following the Effective Time, the
Surviving Corporation shall be entitled to cause the Paying Agent to deliver to
it any Funds (including any interest, dividends, earnings or distributions
received with respect thereto which shall be paid as directed by the Parent)
made available to the Paying Agent by the Parent which have not been disbursed,
and thereafter holders of Certificates who have not theretofore complied with
the instructions for exchanging their Certificates shall be entitled to look
only to the Surviving Corporation for payment as general creditors thereof with
respect to the cash payable upon due surrender of their Certificates.
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(d) Except as otherwise provided herein, the Parent shall pay all
charges and expenses, including those of the Paying Agent, in connection with
the exchange of the Merger Consideration for Certificates.
(e) Notwithstanding anything to the contrary in this Section 4.02,
none of the Paying Agent, the Parent, the Company, the Surviving Corporation or
the Purchaser shall be liable to a holder of a Certificate formerly representing
Shares for any amount properly delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If Certificates are not
surrendered prior to two years after the Effective Time (or immediately prior to
such earlier date on which any payment pursuant to this Article IV would
otherwise escheat or become the property of any Federal, state or local
government agency or authority, court or commission), unclaimed funds payable
with respect to such Certificates shall, to the extent permitted by applicable
law, become the property of the Surviving Corporation, free and clear of all
claims or interest of any person previously entitled thereto.
4.03 Dissenters' Rights. Notwithstanding the provisions of Section
4.01 or any other provision of this Agreement to the contrary, Dissenting Shares
shall not be converted into the right to receive cash at or after the Effective
Time, but such Shares shall become the right to receive such consideration as
may be determined to be due to holders of Dissenting Shares pursuant to the laws
of the State of Delaware unless and until the holder of such Dissenting Shares
withdraws his or her demand for such appraisal in accordance with the DGCL or
becomes ineligible for such appraisal. If a holder of Dissenting Shares shall
withdraw his or her demand for such appraisal or shall become ineligible for
such appraisal (through failure to perfect or otherwise), then, as of the
Effective Time or the occurrence of such event, whichever last occurs, such
holder's Dissenting Shares shall automatically be converted into and represent
the right to receive the Merger Consideration, without interest, as provided in
Section 4.01(a) and in accordance with the DGCL. The Company shall give the
Parent (i) prompt notice of any demands for appraisal of Shares received by the
Company and (ii) the opportunity to participate in and direct all negotiations
and proceedings with respect to any such demands. The Company shall not, without
the prior written consent of the Parent, make any payment with respect to, or
settle, offer to settle or otherwise negotiate, any such demands.
4.04 Transfer of Shares After the Effective Time. No transfers of
Shares shall be made in the stock transfer books of the Surviving Corporation at
or after the Effective Time. If, after the Effective Time, Certificates formerly
representing Shares are presented to the Surviving Corporation, they shall be
cancelled and exchanged for the Merger Consideration set forth in Section 4.01.
4.05 Company Stock Options and Warrant.
(a) Prior to consummation of the Offer, the Company may enter into
agreements in respect of outstanding Options, providing for either (i) the
payment upon surrender of the Option upon consummation of the Offer or at the
Effective Time of an amount
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of cash per share subject to each such Option equal to the difference between
the Merger Consideration and the exercise price of such Option, less an amount
equal to all taxes required to be withheld from such payment or (ii) with the
consent of Parent, the exchange of such Options into certain options to acquire
shares of Parent's common stock. The Company may, if (and only if) an Option
holder enters into an agreement described in the preceding sentence, accelerate
the vesting of any outstanding Options.
(b) The Company shall immediately provide the notice required by
Section 4.1(d) of the Warrant.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents, warrants, covenants and agrees to the
Parent and the Purchaser that:
5.01 Organization, Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power and authority to own, lease and
operate its properties and carry on its business as now being conducted. The
Company is duly qualified to do business and is in good standing in each
jurisdiction in which the nature of the Company's business or the location of
its properties makes such qualification necessary, except for any such failure
to qualify or be in good standing as shall not have a Material Adverse Effect on
the Company. The Disclosure Schedule identifies, and the Company has heretofore
made available to the Parent, complete and correct copies of the Certificate of
Incorporation and By-Laws of the Company, as currently in effect.
5.02 Company Subsidiaries. The Company has no subsidiaries.
5.03 The Company's Capitalization. The authorized capital stock of
the Company consists of 25,000,000 Shares. As of the close of business on
February 28, 1997, there were 10,948,506 Shares issued and outstanding and no
Shares held in the Company's treasury. All outstanding Shares have been duly
authorized and validly issued, and are fully paid, nonassessable and free of
preemptive rights. Except for the Options described in Section 4.05 hereof and
except as set forth on the Disclosure Schedule, there are not now, and at the
Effective Time there will not be, any subscriptions, options, warrants, calls,
rights, agreements or commitments relating to the issuance, sale, delivery or
transfer by the Company (including any right of conversion or exchange under any
outstanding security or other instrument) of its Shares (collectively, "Equity
Rights"). There are no outstanding contractual obligations of the Company to
repurchase, redeem or otherwise acquire any Shares. The Disclosure Schedule
contains a complete and accurate list of all holders of Options and any other
options or rights
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of any kind to purchase or acquire Shares, together with the number of such
options and the terms of such options held by each such holder.
5.04 Company Investments. Except as set forth in the Disclosure
Schedule, the Company neither owns nor has the right to acquire, directly or
indirectly, any interest or investment (whether equity or debt) in any
corporation, partnership, joint venture, business, trust or entity, other than
non-controlling investments made in the ordinary course of business and
corporate partnering, development, cooperative marketing and similar
undertakings and arrangements entered into in the ordinary course of business.
5.05 Authority. The Company has full corporate power and authority
to execute, deliver and perform (subject to approval by the Company's
stockholders) this Agreement and to consummate the transactions contemplated
hereby and thereby. This Agreement has been duly and validly approved by the
Company Board, and the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Company Board and, except for the approval of the
Merger by the holders of at least a majority of the Shares in accordance with
the DGCL, no other corporate actions on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby,
including the acquisition of Shares pursuant to the Offer and the Merger. No
"fair price," "merger moratorium," "control share acquisition" or other anti-
takeover statute or similar statute or regulation applies or purports to apply
to the Merger, this Agreement or any of the transactions contemplated hereby or
thereby. This Agreement has been duly and validly executed and delivered by the
Company and, assuming due authorization, execution and delivery by the Parent
and the Purchaser, constitute valid and binding agreements of the Company,
enforceable against the Company in accordance with their terms, except to the
extent that enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting the enforcement
of creditors' rights generally and by general principles of equity, regardless
of whether such enforceability is considered in a proceeding in equity or at
law.
5.06 Consents and Approvals; No Violation. Except as set forth on
the Disclosure Schedule, and except for any required approval of the Merger by
the stockholders of the Company and the filing of the Delaware Certificate of
Merger in accordance with the DGCL, neither the execution, delivery and
performance of this Agreement by the Company nor the consummation by it of the
transactions contemplated hereby and thereby will (i) conflict with or result in
any breach of any provision of the Certificate of Incorporation or By-Laws of
the Company; (ii) require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority, except
(A) in connection with the Exchange Act and (B) where the failure to obtain such
consent, approval, authorization or permit, or to make such filing or
notification, would not have a Material Adverse Effect; (iii) constitute a
breach or result in a default under, or give rise to any right of termination,
amendment, cancellation or acceleration under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, contract, agreement
(including,
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without limitation, the Stock Purchase Agreement) or other instrument or
obligation of any kind to which the Company is a party or by which the Company
or any of its assets may be bound, except for any such breach, default or right
as to which requisite waivers or consents have been obtained or which, in the
aggregate, would not have a Material Adverse Effect; or (iv) assuming compliance
with the DGCL, violate any order, writ, injunction, judgment, decree, law,
statute, rule, regulation or governmental permit or license applicable to the
Company or any of its assets, which violation would have a Material Adverse
Effect.
5.07 SEC Reports; Financial Statements. The Company has filed all
required forms, reports and documents with the SEC since May 31, 1996
(collectively, the "SEC Reports"), each of which has complied in all material
respects with all applicable requirements of the Securities Act, and the
Exchange Act, each as in effect on the dates so filed. None of such forms,
reports or documents, including, without limitation, any financial statements or
schedules included or incorporated by reference therein, contained, when filed,
any untrue statement of a material fact or omitted to state a material fact
required to be stated or incorporated by reference therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The Company has heretofore made available or
promptly will make available to the Parent, a complete and correct copy of any
amendment to the SEC Reports. Each of the financial statements included in the
SEC Reports (including the related notes thereto) presents fairly the financial
position of the Company as of their respective dates and present fairly the
results of operations, the cash flows or changes in financial position, and
changes in stockholders' equity for the periods then ended, all in conformity
with generally accepted accounting principles applied on a consistent basis,
except as otherwise noted therein.
5.08 Proxy Statement; Offer Documents. The Proxy Statement will
comply in all material respects with applicable federal securities laws and will
not contain any untrue statements of a material fact required to be stated
therein or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation is
made by the Company with respect to information supplied by the Parent or the
Purchaser in writing for inclusion in the Proxy Statement. None of the
information supplied by the Company in writing for inclusion in the Offer
Documents or provided by the Company in the Schedule 14D-9 will, at the
respective times that the Offer Documents and the Schedule 14D-9 or any
amendments or supplements thereto are filed with the SEC and are first published
or sent or given to holders of Shares, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
5.09 Undisclosed Liabilities. Except as set forth on the Disclosure
Schedule or reflected in the SEC Reports or with respect to liabilities incurred
in the ordinary course of business (and which in the aggregate are not material
to the Company) since the date of the Company Balance Sheets the Company does
not have any known material liability or obligation, secured or unsecured
(whether absolute, accrued, contingent or otherwise, and
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whether due or to become due) which would be required to be disclosed in
financial statements prepared in accordance with generally accepted accounting
principles. Except as set forth in the Disclosure Schedule, the Company has not
engaged, and prior to the Effective Time will not engage in any hedging
transactions or transactions in derivative securities.
5.10 Absence of Certain Changes or Events. Except as set forth on
the Disclosure Schedule and capital expenditures contained in the Company
budgets approved by the Company Board, since the date of the Company Balance
Sheet (i) the business of the Company has been conducted in the ordinary course
(except as otherwise contemplated by this Agreement) and (ii) there has not been
any change which has had a Material Adverse Effect.
5.11 Patents, Trademarks, Etc. Except to the extent that the
inaccuracy of any of the following (or the circumstances giving rise to such
inaccuracy), individually and in the aggregate, would not have a Material
Adverse Effect:
(a) the Company owns, or is licensed or otherwise has the right to use
(in each case, clear of any liens or encumbrances of any kind), all Intellectual
Property used in or necessary for the conduct of its business as currently
conducted;
(b) no claims are pending or, to the knowledge of the Company,
threatened that the Company is infringing on or otherwise violating the rights
of any person with regard to any Intellectual Property owned by and/or licensed
to the Company;
(c) to the knowledge of the Company, no person is infringing on or
otherwise violating any right of the Company with respect to any Intellectual
Property owned by and/or licensed to the Company;
(d) none of the former or current members of management or key
personnel of the Company, including all former and current employees, agents,
consultants and contractors who have contributed to or participated in the
conception and development of computer software or other Intellectual Property
of the Company, has asserted in writing any claim against the Company in
connection with the involvement of such persons in the conception and
development of any computer software or other Intellectual Property of the
Company, and no such claim has been asserted or threatened in writing;
(e) the execution and delivery of this Agreement, compliance with its
terms and the consummation of the transactions contemplated hereby do not and
will not conflict with or result in any violation or default (with or without
notice or lapse of time or both) or give rise to any right, license or
encumbrance relating to Intellectual Property, or right of termination,
cancellation or acceleration of any material Intellectual Property right or
obligation, or the loss or encumbrance of any Intellectual Property or material
benefit related thereto, or result in or require the creation, imposition or
extension of any lien or encumbrance upon any Intellectual Property or right;
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(f) the Company has taken reasonable and necessary steps to protect
its Intellectual Property and its rights thereunder, and to the knowledge of the
Company no such rights to Intellectual Property have been lost or are in
jeopardy of being lost through failure to act by the Company.
5.12 Employee Benefit Plans. All Company Benefit Plans are listed in
the SEC Reports filed with the SEC prior to the date hereof or are not material.
(a) Except as set forth in the Disclosure Schedule with respect to
each Company Benefit Plan: (i) such Plan has been administered and enforced in
all material respects in accordance with its terms and ERISA, the Code and other
applicable law; (ii) to the knowledge of the Company, no breach of fiduciary
duty or non-exempt prohibited transaction that could result in a material
liability has occurred; (iii) no actions, suits, claims or disputes with respect
to material liabilities, are pending or, to the knowledge of the Company,
threatened, other than routine claims for benefits; (iv) all contributions and
premiums due which are material in amount have been made on a timely basis; (v)
all contributions and all distributions which are material in amount made or
required to be made under such Company Benefit Plan meet the requirements for
deductibility under the Code; and (vi) such Company Benefit Plan is not a
multiemployer plan (as defined in ERISA section 3(37)), a multiple employer plan
within the meaning of the Code or ERISA, a defined benefit plan within the
meaning of ERISA section 3(35), a plan subject to section 302 of ERISA, section
412 of the Code or Title IV of ERISA, or funded through a "welfare benefit fund"
(as defined in Section 419(e) of the Code).
(b) Except as set forth on the Disclosure Schedule or as specifically
provided in Section 4.05, the consummation of the transactions contemplated by
this Agreement will not (i) entitle any individual to severance pay, or (ii)
accelerate the time of payment or vesting, or increase the amount, of
compensation due to any individual.
(c) Each Company Benefit Plan intended to be qualified under section
401(a) of the Code is so qualified, and each trust or other funding vehicle
related thereto is exempt from federal income tax under section 501(a) of the
Code.
5.13 Legal Proceedings, Etc. Except as set forth on the Disclosure
Schedule or the SEC Reports filed with the SEC prior to the date hereof, (i)
there is no claim, action, proceeding or investigation pending or, to the
knowledge of the Company, threatened against or relating to the Company before
any court or governmental or regulatory authority or body which could have a
Material Adverse Effect, and (ii) the Company is not subject to any outstanding
order, writ, judgment, injunction or decree of any court or governmental or
regulatory authority or body which could have a Material Adverse Effect.
5.14 Taxes. The Company has timely filed with the proper taxing or
other governmental authorities all returns (including, without limitation,
information returns, estimated Tax filings and other Tax-related information) in
respect of Taxes required to be
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filed through the date hereof. Such returns, filings and information filed are
complete, correct and accurate in all material respects. The Company has
delivered to Parent complete and accurate copies of all of the Company's
federal, state and local Tax returns filed for its taxable years ended May 31,
1991, 1992, 1993, 1994, 1995 and 1996. The Company has not filed any federal,
state or local tax returns for its taxable years ended May 31, 1997. All Taxes
for which the Company shows as owing on any Tax return for any period or portion
thereof ending on or before the Closing Date, shall have been paid, or an
adequate reserve (in conformity with generally accepted accounting principles
applied on a consistent basis and the Company's past custom and practice) has
been established therefor, and the Company has no material liability for Taxes
in excess of the amounts so paid or reserves so established. All Taxes that the
Company has been required to collect or withhold have been duly collected or
withheld and, to the extent required when due, have been or will be duly paid to
the proper taxing or other governmental authority.
5.15 Compliance with Law. Except as set forth on the Disclosure
Schedule or the SEC Reports, the business of the Company is not being conducted,
and the properties and assets of the Company are not currently owned or
operated, in violation of any law, ordinance, regulation, order, judgment,
injunction, award or decree of any governmental or regulatory entity or court or
arbitrator, except for possible violations which either individually or in the
aggregate do not, and so far as can be reasonably foreseen will not, have a
Material Adverse Effect.
5.16 Insider Interests. The Disclosure Schedule or the SEC Reports
sets forth all material contracts, agreements with and other obligations to
officers, directors, employees or stockholders of the Company, other than those
with Parent. Except as set forth on the Disclosure Schedule or the SEC Reports,
no officer, director or stockholder of the Company, and no entity controlled by
any such officer, director or stockholder, and no relative or spouse who resides
with any such officer, director or stockholder (i) owns, directly or indirectly,
any material interest in any person that is or is engaged in business, other
than on an arm's-length basis, as a competitor, lessor, lessee, customer or
supplier of the Company or (ii) owns, in whole or in part, any tangible or
intangible property that the Company uses in the conduct of the business of the
Company.
5.17 Environmental Protection. Except as set forth on the Disclosure
Schedule or the SEC Reports, (i) the Company is currently in compliance with all
Environmental Laws, including without limitation all permits or licenses
required thereunder except where any failure to comply would not reasonably be
expected to have a Material Adverse Effect; (ii) the Company has not received
any outstanding written notice that the Company is not in compliance with, or
that it is in violation of, any such Environmental Laws which involves a matter
that would reasonably be expected to have a Material Adverse Effect; (iii) there
are no Environmental Claims against the Company except for any Environmental
Claims which would not reasonably be expected to have a Material Adverse Effect;
(iv) no underground storage tank for Hazardous Substances, no PCBs, and no
asbestos containing material is currently located at or on the Properties except
where the occurrence of any of the
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foregoing would not reasonably be expected to have a Material Adverse Effect;
and (v) there have been no releases of Hazardous Substances in quantities
exceeding the reportable quantities as defined under Environmental Laws on, upon
or into the Properties other than those authorized by Environmental Laws except
for any such releases which would not reasonably be expected to have a Material
Adverse Effect. In addition, true and correct copies of the Environmental
Reports at any Property or any facility formerly owned or operated by the
Company have been made available to Purchaser, and a list of all such
Environmental Reports is set forth on the Disclosure Schedule.
5.18 Labor Matters. None of the employees of the Company are covered
by a collective bargaining agreement. As of the date of this Agreement, the
Company does not know of any activity or proceeding of any labor union (or
representatives thereof) to organize any unorganized employees employed by the
Company, nor of any strikes, slowdowns, work stoppages, lockouts or threats
thereof, by or with respect to any of the employees of the Company. Except as
set forth in the Disclosure Schedule, as of the date of this Agreement, the
Company has not received any notice of any claim, nor does it have knowledge of
any facts which are likely to give rise to any claim, that they have not
complied in any respect with any laws relating to the employment of labor,
including, without limitation, any provisions thereof relating to wages, hours,
collective bargaining, the payment of social security and similar taxes, equal
employment opportunity, employment discrimination or employment safety, except
such claims which, in the aggregate, would not have a Material Adverse Effect.
5.19 Brokers and Finders. Neither the Company nor any of its
respective officers, directors or employees has employed any broker, finder or
investment banker or incurred any liability for any brokerage fees, commissions,
finders' fees or investment banking fees in connection with the transactions
contemplated herein, except that the Special Committee has employed, and the
Company has agreed to pay the fees and expenses of, Broadview Associates LLC as
its financial advisor pursuant to a Letter Agreement dated December 18, 1996, a
copy of which has been delivered to the Parent.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF
THE PARENT AND THE PURCHASER
The Parent and the Purchaser hereby represent and warrant to the
Company that:
6.01 Corporation Organization. The Parent is a corporation duly
organized and validly existing and in good standing under the laws of the State
of New York and the Purchaser is a corporation duly organized and validly
existing and in good standing under the laws of the State of Delaware. The
Parent and the Purchaser each has all requisite corporate
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power and authority to own its assets and carry on its business as now being
conducted or proposed to be conducted.
6.02 Authorized Capital. The authorized capital stock of the
Purchaser consists of 1,000 shares of common stock, par value $.01 per share, of
which 1,000 shares are outstanding as of the Effective Time and are owned,
beneficially or of record, by Parent. All of the issued and outstanding shares
of capital stock of the Purchaser are validly issued, fully paid, nonassessable
and free of preemptive rights and all liens.
6.03 Authority. Each of the Parent and the Purchaser has the
necessary corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder. The execution and delivery of this
Agreement by each of the Parent and the Purchaser, the performance by the Parent
and the Purchaser of their respective obligations hereunder and the consummation
by the Parent and the Purchaser of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of their
respective Boards of Directors and approved by the Parent as sole stockholder of
the Purchaser, and no other corporate proceeding on the part of the Parent or
the Purchaser is necessary for the execution and delivery of this Agreement by
the Parent and the Purchaser and the performance by the Parent and the Purchaser
of their respective obligations hereunder and the consummation by the Parent and
the Purchaser of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by each of the Parent and the Purchaser and,
assuming the due authorization, execution and delivery hereof by the Company, is
a legal, valid and binding obligation of the Parent and the Purchaser,
enforceable against each of the Parent and the Purchaser in accordance with its
terms, except to the extent that its enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally or by general equitable principles,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
6.04 No Prior Activities. The Purchaser has not incurred nor will it
incur, directly or indirectly, any liabilities or obligations, except those
incurred in connection with its incorporation or with the negotiation of this
Agreement, the Tender Agreement, the Offer Documents and the consummation of the
transactions contemplated hereby and thereby. The Purchaser has not engaged,
directly or indirectly, in any business or activity of any type or kind, or
entered into any agreement or arrangement with any person or entity, and is not
subject to or bound by any obligation or undertaking, that is not contemplated
by or in connection with this Agreement, the Tender Agreement, the Offer
Documents and the transactions contemplated hereby and thereby.
6.05 No Financing Contingency. The Parent has sufficient funds to
consummate all of the transactions contemplated by this Agreement and will make
available to the Purchaser sufficient funds in sufficient time to consummate the
Offer and the Merger in accordance with the terms of this Agreement.
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6.06 Governmental Filings; No Violations. (a) No notices, reports
or other filings are required to be made by the Parent or the Purchaser with,
nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by the Parent or the Purchaser from, any governmental or
regulatory authorities of the United States, the several States or any foreign
jurisdictions in connection with the execution and delivery of this Agreement by
the Parent and the Purchaser and the consummation by the Parent and the
Purchaser of the transactions contemplated hereby, the failure to make or obtain
any or all of which could prevent, delay or burden the transactions contemplated
by this Agreement, except in connection with the Exchange Act.
(b) Neither the execution and delivery of this Agreement by the Parent
or the Purchaser nor the consummation by the Parent or the Purchaser of the
transactions contemplated hereby nor compliance by the Parent or the Purchaser
with any of the provisions hereof will: (i) conflict with or result in any
breach of any provision of its Certificate of Incorporation or By-Laws, (ii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or require any consent under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which the Parent or the
Purchaser is a party or by which it or any of its properties or assets may be
bound, (iii) require the creation or imposition of any lien upon or with respect
to the properties of the Parent or the Purchaser or (iv) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Parent
or the Purchaser or any of its properties or assets, excluding from the
foregoing clauses (iii) and (iv) violations, breaches or defaults which in the
aggregate, would neither have a material adverse effect on the business,
financial condition or operations of the Parent or the Purchaser nor prevent,
materially delay or materially burden the transactions contemplated by this
Agreement.
6.07 Brokers and Finders. Neither the Parent, the Purchaser nor any
of its officers, directors or employees has employed any broker, finder or
investment banker or incurred any liability for any brokerage fees, commissions,
finders fees or investment banking fees in connection with the transactions
contemplated herein, except that the Parent has employed and will pay the fees
and expenses of Merrill Lynch & Co.
6.08 Offer Documents; Proxy Statement; Other Information. None of
the information included in the Offer Documents (including any amendments or
supplements thereto) or any schedules required to be filed with the SEC in
connection therewith and described therein as being supplied by the Parent or
the Purchaser will, at the respective times that the Offer Documents or any
amendments or supplements thereto or any such schedules are filed with the SEC,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the information supplied in writing by the Parent or the
Purchaser specifically for inclusion in the Proxy Statement, Schedule 14D-9 or
any statement required pursuant to Section 14(f) of the Exchange Act or any
other schedules or statements required to be filed with the SEC in
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connection therewith will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading.
ARTICLE VII
COVENANTS OF THE PARTIES
7.01 Conduct of Business of the Company. The Company shall use its
reasonable best efforts to preserve intact the business organization of the
Company, to keep available the services of its operating personnel and to
preserve the goodwill of those having business relationships with it, including,
without limitation, suppliers. Except as contemplated by this Agreement or as
set forth on the Disclosure Schedule, during the period from the date of this
Agreement to the Effective Time, the Company will conduct its business and
operations only in the ordinary and usual course of business consistent with
past practice. Without limiting the generality of the foregoing, and, except as
contemplated in this Agreement or as set forth on the Disclosure Schedule, prior
to the Effective Time, without the advance written consent of the Parent or
approval of the Company Board, the Company will not:
(a) Amend its Certificate of Incorporation or By-Laws or similar
governing documents;
(b) (i) Create, incur or assume any indebtedness for money borrowed,
including obligations in respect of capital leases, except in the ordinary
course of business consistent with past practice, or (ii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person; provided,
however, that the Company may endorse negotiable instruments in the ordinary
course of business consistent with past practice;
(c) Declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
the Shares;
(d) Issue, sell, grant, purchase or redeem, or issue, whether by
dividend or otherwise, or sell any securities convertible into or exercisable
for, or options with respect to, or warrants to purchase or rights to subscribe
to or otherwise purchase, or subdivide or in any way reclassify, any shares of
capital stock or other securities of the Company except for the exercise of
Options and Warrants outstanding on the date hereof;
(e) Increase the aggregate amount of compensation payable or to
become payable by the Company to its directors, officers or employees, whether
by salary or bonus, or (ii) increase the rate or term of, or otherwise alter,
any bonus, insurance, pension, severance
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or other employee benefit plan, payment or arrangement made to, for or with any
such directors, officers or employees;
(f) Enter into any agreement, commitment or transaction, except
agreements, commitments or transactions in the ordinary course of business
consistent with past practice or any proposed settlement with the IRS or any
other such authority permitted by Section 7.02(b);
(g) Sell, transfer, mortgage, pledge or grant any security interest,
lien or other encumbrance on any asset other than in the ordinary course of
business consistent with past practice;
(h) Waive any right under any contract or other agreement identified
on the Disclosure Schedule;
(i) Other than as and when required by any change in generally
accepted accounting principles, make any material change in its accounting or
tax methods or practices or make any material change in depreciation or
amortization policies or rates adopted by it for accounting or tax purposes or,
other than normal writedowns or writeoffs consistent with past practices, make
any writedowns of inventory or writeoffs of notes or accounts receivable;
(j) Make any loan or advance to any of its stockholders, officers,
directors, employees (other than advances to field sales personnel, vacation
advances, relocation advances and travel advances in each case made in the
ordinary course of business in a manner consistent with past practice) or make
any other loan or advance to any other person or group otherwise than in the
ordinary course of business consistent with past practice;
(k) Terminate or fail to renew, where such renewal is at the
Company's option, any contract or other agreement other than in the ordinary
course of business, the termination or failure of which to renew would have a
Material Adverse Effect;
(l) Enter into any collective bargaining agreement or employment
agreement;
(m) Make any addition to or modification of any existing Company
Benefit Plans or adopt any new Company Benefit Plan;
(n) Take, agree to take, or do, or with respect to anything within
the Company's control, knowingly permit to be done or to be taken any action in
the conduct of its business which (i) would cause any of the representations of
the Company to be or become untrue in any material respect, and (ii) would
reasonably be expected to have a Material Adverse Effect;
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(o) Fail to comply with all applicable filing, payment, withholding,
collection and record retention obligations under all applicable federal, state,
local and foreign Tax laws; or
(p) Agree to do any of the foregoing.
7.02 Notification of Certain Matters. (a) The Company shall give
prompt notice to the Parent of: (i) any notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement; (ii) any
notice or other communication from any regulatory authority in connection with
the transactions contemplated by this Agreement; and (iii) the occurrence of any
event having, or which insofar as can be reasonably foreseen would have, a
Material Adverse Effect.
(b) Between the date of this Agreement and the Effective Time, the
Company shall give prompt notice to the Parent of: (i) the initiation of any
audit or other review by the IRS or any other state, local or foreign taxing or
other governmental authority with respect to any Tax return or that may result
in any additional liability for Taxes, (ii) any proposed adjustment or
assessment by the IRS or any such authority that may result in any material
additional liability for Taxes, (iii) any proposed settlement or similar
agreement with the IRS or any other such authority. Between the date of this
Agreement and the Effective Time, the Company shall not enter into any
settlement under part (iii) of this subsection with respect to Taxes without the
prior written consent of the Parent, which consent shall not be unreasonably
withheld.
7.03 Access to Information. Between the date of this Agreement and
the Effective Time, the Company will, during ordinary business hours and upon
reasonable advance notice, (i) give the Parent and the Parent's authorized
representatives all access the Parent shall reasonably request to all of its
books, records (including, without limitation, the workpapers of the Company's
outside accountants), contracts, commitments, offices and other facilities and
properties, and its personnel, representatives, accountants and agents;
provided, however, that all such access shall take place after appropriate prior
consultation with the officers of the Company, (ii) permit the Parent to make
such inspections thereof as it may reasonably request and (iii) cause its
officers and advisors to furnish to the Parent its financial and operating data
and such other existing information with respect to its business, properties,
assets, liabilities and personnel (including, without limitation, title
insurance reports, real property surveys and environmental reports, if any), as
the Parent may from time to time reasonably request; provided, however, that any
such investigation shall be conducted in such a manner as not to interfere
unreasonably with the operation of the business of the Company.
7.04 Further Information. The Company and the Parent shall give
prompt written notice to the other of (i) any representation or warranty made by
it contained in this Agreement becoming untrue or inaccurate in any material
respect or (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be
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complied with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
7.05 Reasonable Efforts. Subject to the terms and conditions of this
Agreement, each of the parties hereto will use all reasonable efforts to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement
and shall use all reasonable efforts to satisfy the conditions to the
transactions contemplated hereby and to obtain all waivers, permits, consents
and approvals and to effect all registrations, filings and notices with or to
third parties or governmental or public bodies or authorities which are
necessary or desirable in connection with the transactions contemplated by this
Agreement, including, but not limited to, filings to the extent required under
the Exchange Act. Without limiting the generality of the foregoing, the Parent
as the sole stockholder of the Purchaser, and the Purchaser as a stockholder of
the Company, will consent and/or vote in favor of the transactions contemplated
hereunder, and Company, the Parent, and the Purchaser will vigorously defend
against any lawsuit or proceeding, whether judicial or administrative,
challenging this Agreement or the consummation of any of the transactions
contemplated hereby. Subject to the terms and conditions of this Agreement, from
time to time after the date hereof, without further consideration, the Company
will, at its own expense, execute and deliver such documents to the Parent as
the Parent may reasonably request in order to consummate the transactions
contemplated by this Agreement. Subject to the terms and conditions of this
Agreement, from time to time after the date hereof, without further
consideration, each of the Parent and the Purchaser will, at its own expense,
execute and deliver such documents to the Company as the Company may reasonably
request in order to consummate the transactions contemplated by this Agreement.
7.06 Public Announcements. The initial press release with respect to
the transactions contemplated hereby shall be a joint press release, and
thereafter the Company and the Parent shall consult with each other before
issuing any press release or otherwise making any public statements with respect
to the transactions contemplated hereby and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by law, fiduciary duty upon advice of outside legal counsel or
any listing agreement with a national securities exchange. No director shall
make any press release or public announcement concerning the transactions
contemplated hereby except pursuant to the joint press release referenced above
or the Schedule 14D-9, and shall make no other statement inconsistent with the
Schedule 14D-9 and the Schedule 14D-1.
7.07 Indemnity; D&O Insurance. (a) The Parent shall cause (i) all
rights to indemnification by the Company now existing in favor of the
Indemnified Parties as provided in the Company's Certificate of Incorporation
and By-Laws, or rights of indemnification equivalent thereto, and (ii)
limitations of liability in the Company's Certificate of Incorporation, or
limitations equivalent thereto, to survive the Merger and to continue in full
force and effect as rights to indemnification and limitations on liability,
respectively, by the
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Surviving Corporation for a period of six years following the Effective Time,
and shall cause to remain in full force and effect and cause the Surviving
Corporation to fully perform all indemnity agreements with Indemnified Parties
in effect on the date hereof (the "Indemnity Agreements").
(b) Subject to the terms set forth herein, the Parent and the
Surviving Corporation shall, jointly and severally, indemnify and hold harmless,
to the fullest extent permitted under applicable law (and shall also advance
expenses as incurred by an Indemnified Party to the extent permitted under
applicable law, provided the person to whom expenses are advanced provides an
undertaking to repay such advances if it is ultimately determined that such
person is not entitled to indemnification), each Indemnified Party against any
costs or expenses (including attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and amounts paid in settlement in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to any action,
alleged action, omission or alleged omission occurring on or prior to the
Effective Time in their capacity as director, officer or employee (including,
without limitation, any claims, actions, suits, proceedings and investigations
which arise out of or relate to the transactions contemplated by this Agreement)
for a period of six years after the Effective Time, provided that, in the event
any claim or claims are asserted or made within such six year period, all rights
to indemnification in respect of any such claim or claims shall continue until
final disposition of any and all such claims.
(c) Any Indemnified Party wishing to claim indemnification under this
Section 7.07, upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the Parent and the Surviving Corporation
thereof, but the failure to so notify shall not relieve the Parent and the
Surviving Corporation of any obligation to indemnify such Indemnified Party or
of any other obligation imposed by this Section 7.07 unless and to the extent
that such failure prejudices the Parent or the Surviving Corporation; it being
understood that it shall be deemed to materially prejudice the Parent or the
Surviving Corporation, as the case may be, if, as a result of such failure to
notify, the Parent or the Surviving Corporation is not given an opportunity to
assume the defense of such claim, action, suit, proceeding or investigation
within a reasonably prompt time after such claim, action, suit, proceeding or
investigation is asserted or initiated. In the event of any such claim, action,
suit, proceeding or investigation, (i) the Surviving Corporation or the Parent
shall have the right to assume the defense thereof and shall not be liable to
such Indemnified Party for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Party in connection with the
defense hereof, except that if the Parent or Surviving Corporation elects not to
assume such defense or counsel for the Indemnified Party advises that there are
issues which raise conflicts of interest between the Parent or Surviving
Corporation and the Indemnified Party, the Indemnified Party may retain counsel
satisfactory to it, and Parent or the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Party promptly
as statements therefore are received; provided, however, that in no event shall
the Parent or Surviving Corporation be required to pay fees and expenses,
including disbursements and other charges, for more than one firm of attorneys
in any one legal action or
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group of related legal actions unless (A) counsel for the Indemnified Party
advises that there is a conflict of interest that requires more than one firm of
attorneys, or (B) local counsel of record is needed in any jurisdiction in which
any such action is pending, (ii) the Parent and the Indemnified Party shall
cooperate in the defense of any such matter, and (iii) the Parent and the
Surviving Corporation shall not be liable for any settlement effected without
the prior written consent of one of them (which consent shall not be
unreasonably withheld); and provided, further, that the Parent and Surviving
Corporation shall not have any obligation hereunder to any Indemnified Party if
and to the extent a court of competent jurisdiction ultimately determines, and
such determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
law.
(d) For six years after the Effective Time, the Parent shall cause
the Surviving Corporation to use reasonable efforts to maintain the officers'
and directors' liability insurance covering the Indemnified Parties who are
presently covered by the Company's officers' and directors' liability insurance,
with respect to acts or omissions occurring at or prior to the Effective Time,
on terms no less favorable than those in effect on the date hereof or at the
Effective Time, or, at Parent's option, such less favorable terms as Parent may
provide for its own directors and officers.
(e) In the event that any of the provisions of Section 7.07(a), (b),
(c) or (d) above would conflict with any of the provisions of the Company's By-
Laws, Certificate of Incorporation or Indemnity Agreements in a manner that, if
held applicable, would limit or restrict, or impose conditions or obligations on
the exercise by any of the Indemnified Parties of, any of the indemnification
rights or limitations of liability granted to them under the Company's By-Laws,
Certificate of Incorporation or Indemnity Agreements, then, in any such event or
circumstance the applicable provisions of the Company's By-Laws, Certificate of
Incorporation or Indemnity Agreements shall control, as it is the intention of
the parties that the Indemnified Parties shall have indemnification rights or
limitations of liability no less favorable than those which they have under the
Company's By-Laws, Certificate of Incorporation or Indemnity Agreements, as in
effect on the date hereof.
(f) The covenants contained in this Section 7.07 shall survive the
Effective Time until fully discharged, are intended to benefit each of the
Indemnified Parties and shall be binding on all successors and assignees of the
Parent and the Surviving Corporation.
7.08 Other Transactions. (a) The Company on behalf of itself and
its affiliates and their respective officers, directors, employees, investment
bankers, attorneys and other representatives and agents, shall immediately cease
any existing discussions or negotiations, if any, with any parties (other than
the Purchaser and the Parent) conducted heretofore with respect to any
Acquisition Proposal.
(b) Neither the Company, on behalf of itself and each of its
affiliates, nor any of its or their respective officers, directors, employees,
representatives or agents, shall not, directly or indirectly, encourage,
solicit, participate in or initiate discussions or
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negotiations with, or provide any information to, any corporation, partnership,
person or other entity or group (other than the Parent and the Purchaser, any
affiliate or associate of the Parent and the Purchaser or any designees of the
Parent and the Purchaser) concerning any Acquisition Proposal, or take any other
action to facilitate the making of a proposal that constitutes or could
reasonably be expected to lead to an Acquisition Proposal. The Company shall use
its best efforts to ensure that the officers, directors and employees of the
Company and any investment banker or other advisor or representatives retained
by the Company are aware of the restrictions set forth in the preceding
sentences.
(c) Purchaser and Parent acknowledge the obligations of the Special
Committee and the Company Board under Rule 14e-2 of the Exchange Act and agree
that in the event (and only in such event) a fully financed all cash tender
offer is made prior to the Expiration Date for all of the Shares not owned by
Parent, at a price per share in excess of the Merger Consideration, that the
obligations of the Special Committee and the Company Board under Sections
2.02(c) and 3.07(a)(ii) hereof shall be relieved to the extent necessary to
satisfy their obligations under such Rule 14e-2 as prescribed in a written
opinion of their counsel.
7.09 Contribution to Capital. If, after receiving the Parent's
Shares, the Purchaser would own at least 90% of the outstanding Shares, then,
prior to the Effective Time, the Parent shall contribute all of the Shares owned
by it to the capital of the Purchaser.
ARTICLE VIII
CONDITIONS TO THE MERGER
8.01 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to this Agreement to consummate the Merger
shall be subject to the following conditions, which have not been waived at or
prior to the Closing:
(a) This Agreement and the Merger shall have been approved and
adopted by the requisite vote or consent, if any is required, of the
stockholders of the Company required by the Company's Certificate of
Incorporation and By-Laws and the DGCL;
(b) No preliminary or permanent injunction or other order shall have
been issued by any court or by any governmental or regulatory agency, body or
authority which prohibits the consummation of the Offer or the Merger and the
transactions contemplated by this Agreement and which is in effect at the
Effective Time, provided, however, that, in the case of a decree, injunction or
other order, each of the parties shall have used reasonable efforts to prevent
the entry of any such injunction or other order and to appeal as promptly as
possible any decree, injunction or other order that may be entered;
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(c) No statute, rule or regulation shall have been enacted, entered,
promulgated or enforced by any governmental authority that prohibits the
consummation of the Offer or the Merger or has the effect of making the purchase
of the Shares illegal.
8.02 Conditions to the Obligations of the Parent and the Purchaser to
Effect the Merger. The obligation of the Purchaser and the Parent to effect the
Merger shall be further subject to satisfaction of the conditions, unless waived
by the Parent, that (i) the Purchaser shall have accepted for payment Shares
tendered pursuant to the Offer, provided that this condition will be deemed
satisfied with respect to the Purchaser and the Parent if the Purchaser shall
have failed to purchase Shares pursuant to the Offer in violation of the terms
of the Offer, (ii) the Company shall have performed and complied in all material
respects with the agreements and obligations contained in this Agreement
required to be performed and complied with by it at or prior to the Effective
Time, provided that this clause (ii) shall not apply after Purchaser has
designated a majority of directors to serve on the Company Board pursuant to
Section 3.08 or Purchaser's and Parent's designees otherwise constitute a
majority of the Company Board and (iii) there shall have been no change in the
Special Committee's recommendation that the stockholders of the Company accept
the Offer pursuant to Section 2.02(a).
8.03 Conditions to the Obligations of the Company to Effect the
Merger. The obligation of the Company to effect the Merger shall be further
subject, unless waived by the Company, to the Parent and the Purchaser having
performed and complied in all material respects with the agreements and
obligations contained in this Agreement required to be performed and complied
with by each of them at or prior to the Effective Time.
ARTICLE IX
CLOSING
9.01 Time and Place. The closing of the Merger (the "Closing") shall
take place at the offices of Latham & Watkins, Sears Tower, Suite 5800, Chicago,
Illinois at 9:00 a.m. local time on a date to be specified by the parties which
shall be no later than the third business day after the date on which the last
of the closing conditions set forth in Article VIII is satisfied or waived
unless another time, date or place is agreed upon in writing by the parties
hereto.
9.02 Filings at the Closing. At the Closing, the Purchaser shall
cause the Delaware Certificate of Merger to be filed and recorded with the
Secretary of State of the State of Delaware in accordance with the provisions of
Section 103 of the DGCL and/or Section 253 of the DGCL, if applicable, and shall
take any and all other lawful actions and do any and all other lawful things
necessary to cause the Merger to become effective.
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ARTICLE X
TERMINATION; AMENDMENT; WAIVER
10.01 Termination. This Agreement may be terminated and the Offer (if
Purchaser has not accepted Shares for payment) and the Merger may be abandoned
at any time prior to the Effective Time:
(a) by mutual written consent of the Parent, the Purchaser and the
Company;
(b) by the Parent and the Purchaser or by the Company if the Closing
shall not have occurred on or prior to December 31, 1997;
(c) by the Parent and the Purchaser or the Company if any court of
competent jurisdiction in the United States or other United States governmental
body shall have issued an order, decree or ruling or taken any other final
action restraining, enjoining or otherwise prohibiting the Merger or the
acceptance for payment and payment for the Shares in the Offer and such order,
decree, ruling or other action is or shall have become nonappealable;
(d) by the Parent and the Purchaser if, due to an occurrence or
circumstance which would result in a failure to satisfy any of the conditions
set forth in Annex A hereto, the Purchaser shall have terminated the Offer or
allowed the Offer to expire without acceptance for payment of any Shares
thereunder;
(e) by the Company if there shall not have been a material breach of
any representation, warranty, covenant or agreement on the part of the Company
which would entitle the Parent or the Purchaser to terminate this Agreement
pursuant to Section 10.01(f) and, due to an occurrence or circumstance which
would result in a failure to satisfy any of the conditions set forth in Annex A
hereto or otherwise, the Purchaser shall have terminated the Offer or allowed
the Offer to expire without acceptance for payment of any Shares thereunder;
(f) by the Parent and the Purchaser prior to the acceptance for
payment of Shares pursuant to the Offer, if (i) there shall have been a breach
of any representation or warranty on the part of the Company having a Material
Adverse Effect, or (ii) there shall have been a breach of any covenant or
agreement on the part of the Company resulting in a Material Adverse Effect or
(iii) the Special Committee shall have withdrawn or modified (including by
amendment of the Schedule 14D-9) in a manner adverse to the Purchaser, its
approval or recommendation of the Offer, this Agreement or the Merger or shall
have recommended another offer, or shall have adopted any resolution to effect
any of the foregoing;
(g) by the Company if (i) there shall have been a breach of any
representation or warranty on the part of the Parent or the Purchaser which
materially adversely affects the consummation of the Offer or the Merger and
which representation or warranty remains
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incorrect at the date of termination under this clause (g) or (ii) there shall
have been a material breach of any covenant or agreement on the part of the
Parent or the Purchaser and which materially adversely affects the consummation
of the Offer or the Merger.
10.02 Effect of Termination. In the event of the termination of this
Agreement and the abandonment of the Offer and the Merger pursuant to Section
10.01, this Agreement shall forthwith become void and have no effect, without
any liability on the part of any party hereto or its affiliates, directors,
officers or stockholders, provided that no such termination shall relieve any of
the Company, the Parent or the Purchaser from (a) liability for damages arising
from any willful or intentional breach of this Agreement or (b) their
obligations under Section 5.19, this Section 10.02, Section 10.03 and Article
XI.
10.03 Fees and Expenses. (a) In the event that the Parent and the
Purchaser terminate this Agreement pursuant to Section 10.01(f), the Company
shall reimburse the Parent, the Purchaser and their affiliates (not later than
five business days after submission of statements therefor) for all actual
documented out-of-pocket fees and expenses actually and reasonably incurred by
any of them or on their behalf in connection with the Offer and the Merger and
the consummation of all transactions contemplated by this Agreement (including,
without limitation, reasonable attorneys' fees, reasonable fees payable to
financing sources, investment bankers, counsel to any of the foregoing, and
accountants and filing fees and printing costs).
(b) Except as specifically provided in this Section 10.03, each party
shall bear its own expenses in connection with this Agreement and the
transactions contemplated hereby.
ARTICLE XI
MISCELLANEOUS
11.01 Survival of Representations, Warranties, Covenants and
Agreements. The covenants and agreements of the parties contained in Sections
3.06, 4.01, 4.02 (but only to the extent that such Section expressly relates to
actions to be taken after the Effective Time), 4.03, 4.04, 4.05, 7.06, 7.07 and
Article XI hereof, shall survive the consummation of the Offer and the Merger.
The agreements of the parties contained in Sections 10.02, 10.03 and Article XI
hereof and the representations and warranties in Sections 5.19 and 6.07 shall
survive the termination of this Agreement without termination. All other
representations, warranties, agreements and covenants in this Agreement shall
not survive the consummation of the Offer and the Merger or the termination of
this Agreement.
11.02 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by written agreement of
the Parent, the Purchaser and the Company at any time prior to the Effective
Time with respect to
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any of the terms contained herein executed by duly authorized officers of the
respective parties, except that (i) prior to consummation of the Offer, consent
by the Company shall require the approval of the Special Committee and (ii)
after the consummation of the Offer, the price per Share to be paid pursuant to
this Agreement to the holders of Shares shall in no event be decreased and the
form of consideration to be received by the holders of the Shares in the Merger
shall in no event be altered, and no other amendment which would adversely
affect the holders of Shares shall be made, without the approval of the
applicable holders.
11.03 Waiver of Compliance; Consents. At any time prior to the
Effective Time, the parties hereto may extend the time for performance of any of
the obligations or other acts or waive any inaccuracies in the representations
and warranties contained herein or in the documents delivered pursuant hereto.
Any failure of the Parent (for itself and the Purchaser), on the one hand, or
the Company, on the other hand, to comply with any obligation, covenant,
agreement or condition herein may be waived in writing by the Parent (for itself
and the Purchaser) or the Company, respectively, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of or estoppel with respect to any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto or any extensions, such consent or extension
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 11.03.
11.04 Counterparts. This Agreement may be executed in any number of
counterparts each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
11.05 Governing Law; Submission to Jurisdiction. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware without regard to its conflicts of laws rules. Each party hereto hereby
(i) irrevocably and unconditionally submits in any legal action or proceeding
relating to this Agreement, or for recognition and enforcement of any judgment
in respect thereof, to the exclusive general jurisdiction of the state and
federal courts in the state of Delaware, and appellate courts from any thereof
and (ii) consents that any action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same.
11.06 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested) or by overnight courier
service to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
36
<PAGE>
(a) If to the Company, to:
Prior to the Effective Time,
MaxServ, Inc.
8317 Cross Park Drive
Austin, Texas 78754
Attention: President
Telecopier: (512) 970-5555
with a copy to:
Nathaniel P. Turner
MaxServ, Inc.
15303 Dallas Parkway
Suite 960, LB-63
Dallas, Texas 75248
After the Effective Time,
MaxServ, Inc.
8317 Cross Park Drive
Austin, Texas 78754
Attention: President
Telecopier: (512) 834-8473
with copies to:
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, Illinois 60179
Attention: General Counsel
Telecopier: (847) 286-2471
(b) if to the Parent or the Purchaser, to:
Sears, Roebuck and Co.
Max Acquisition Delaware Inc.
3333 Beverly Road
Hoffman Estates, Illinois 60179
Attention: General Counsel
Telecopier: (847) 286-2471
37
<PAGE>
with copies to:
Latham & Watkins
Sears Tower, Suite 5800
233 South Wacker Drive
Chicago, Illinois 60606
Attention: Carl E. Witschy, Esq.
Telecopier: (312) 993-9767
11.07 Entire Agreement, Assignment Etc. This Agreement, which hereby
incorporates the Disclosure Schedule and the Tender Agreement, embodies the
entire agreement and understanding of the parties hereto in respect of the
subject matter hereof and is not intended to confer upon any other person any
rights or remedies hereunder. This Agreement supersedes all prior agreements and
understanding of the parties with respect to the subject matter hereof. This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns, and (except for Indemnified Parties) no other person shall have any
right, benefit or obligation under this Agreement as a third party beneficiary
or otherwise. Neither this Agreement nor any of the rights, interest or
obligations hereunder shall be assigned by any party hereto without the prior
written consent of the other parties hereto, except that the Parent shall have
the right to assign the rights of the Purchaser to any other (directly or
indirectly) wholly-owned subsidiary of the Parent without the prior written
consent of the Company, provided that the Parent shall remain fully responsible
for and shall cause such subsidiary to duly and timely perform, all obligations
of the Purchaser hereunder.
11.08 Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
11.09 Headings; Certain Definitions. The Articles and Section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not affect in any way the meaning
or interpretation of this Agreement. Every reference herein to the word "days,"
if not preceded by the word "business," shall mean calendar days, and every
reference herein to the words "business days" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday that is not a day on which banking institutions
in the city of New York are authorized or obligated by law to close.
11.10 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any state or federal court in
the state of Delaware, this being in addition to any other remedy to which they
are entitled at law or in equity.
38
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto as of the date
first above written.
MAXSERV, INC.
By: /s/ Charles F. Bayless
------------------------
Name: CHARLES F. BAYLESS
------------------------
Title: President/CEO
------------------------
MAX ACQUISITION DELAWARE INC.
By: /s/ John T. Pigott
------------------------
Name: JOHN T. PIGOTT
------------------------
Title: Vice President and Treasurer
------------------------
SEARS, ROEBUCK AND CO.
By: /s/ John T. Pigott
------------------------
Name: JOHN T. PIGOTT
------------------------
Title: Vice President
------------------------
39
<PAGE>
ANNEX A
-------
The capitalized terms used herein and not otherwise defined herein
have the meanings set forth in the Agreement and Plan of Merger to which this
Annex A is attached.
Notwithstanding any other provision of the Agreement and Plan of
Merger to which this ANNEX A is attached (the "Merger Agreement") or the Offer,
but subject to Section 2.01(a) of the Merger Agreement, the Purchaser shall not
be required to accept for payment, purchase or pay for any Shares of the Company
tendered, and may terminate or, subject to the terms of the Merger Agreement,
amend the Offer and may postpone the acceptance for payment of and payment for
any Shares, if prior to the time of acceptance for payment of Shares tendered
pursuant to the Offer (whether or not any Shares have theretofore been accepted
for payment or paid for pursuant to the Offer), the Company shall not have
entered into agreements with the holders of Options which have not been
exercised prior to the Expiration Date, providing for the surrender of such
Options in exchange for (i) an amount of cash equal to the difference between
the exercise price of all such Options and the Merger Consideration less all
taxes required to be withheld from payment, or (ii) with the consent of Parent,
certain options to acquire shares of Parent's common stock, or any of the
following shall occur or exist:
(a) there shall have been threatened, instituted or be pending any
action, proceeding, application, claim or counterclaim by any government or
governmental authority or agency, domestic or foreign, or by any other
person, domestic or foreign, before any court or governmental regulatory or
administrative agency, authority or tribunal, domestic or foreign, other
than the matter styled Gordon v. Bayless, et al., as pending on the date
hereof, (i) challenging the acquisition by Parent or Purchaser of the
Shares, seeking to restrain or prohibit the making or consummation of the
Offer, including, but not limited to any such challenge to the Offer based
upon the provisions of the Stock Purchase Agreement; (ii) seeking to obtain
from Parent or Purchaser any damages, fines or legal sanctions; (iii)
seeking to prohibit or limit the ownership or operation by Parent or
Purchaser or any of their affiliates of any portion of the business or
assets of the Company or to compel Parent or Purchaser or any of their
affiliates to dispose of or hold separate all or any portion of the
business or assets of the Company or of Purchaser or seeking to impose any
limitation on the ability of Parent or Purchaser or any of their affiliates
to conduct such business or own such assets; (iv) seeking to impose or
confirm limitations on the ability of Parent or Purchaser or any of their
affiliates effectively to exercise full rights of ownership of the Shares,
including, without limitation, the right to vote any Shares acquired or
owned by Parent or Purchaser or any of their affiliates on all matters
properly presented to the Company's stockholders; (v) seeking to require
divestiture by Parent or Purchaser or any of their affiliates of any
Shares; or (vi) seeking any material diminution in the benefits expected to
be
A-1
<PAGE>
derived by Parent or Purchaser or any of their affiliates as a result of
the transactions contemplated by the Offer, which, in Parent's sole
discretion, could be expected to have a material adverse effect on the
business, properties, assets, liabilities, shareholder's equity,
capitalization, prospects, condition (financial or otherwise) or results of
operations of the Company considered on a consolidated basis or on the
ability of the Company, Parent or Purchaser to consummate the transactions
contemplated by the Offer, the Merger or any similar business combination
by Purchaser or any affiliate of Parent with the Company, or otherwise
directly or indirectly relating to the transactions contemplated by the
Offer, the Merger or any such business combination by Purchaser or any
affiliate of Parent with the Company; or
(b) there shall be any statute, rule, regulation, legislation,
interpretation, judgment, order or injunction proposed, enacted,
promulgated, entered, enforced, issued or deemed applicable to the Offer,
the Merger, or other similar business combination by Purchaser or any
affiliate of Parent with the Company, or any other action shall have been
taken by any government, governmental authority or agency or court with
respect to a proceeding described in paragraph (a) above, domestic or
foreign, that has, or, in Parent's sole discretion, could be expected to
result in, any of the consequences referred to in paragraph (a) above; or
(c) any change shall have occurred or been threatened (or any
condition, event or development shall have occurred or been threatened
involving a prospective change) in the business, properties, assets,
liabilities, capitalization, stockholder's equity, condition (financial or
otherwise), operations, licenses or franchises, results of operations or
prospects of the Company that, in the sole judgment of Parent, is or may be
materially adverse to the Company or to the value of the Shares to
Purchaser, Parent or any other affiliate of Parent or Purchaser, or Parent
shall have become aware of any facts that, in the sole judgment of Parent,
have or may have material adverse significance with respect to either the
value of the Company or the value of the Shares to Purchaser, Parent or any
other affiliate of Parent, other than as reflected in the Disclosure
Schedule; or
(d) there shall have occurred or been threatened (i) any general
suspension of trading in, or limitation on prices for, securities on the
New York Stock Exchange, Inc., any other national securities exchange or in
the over-the-counter market in the United States; (ii) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States (whether or not mandatory); (iii) any extraordinary or
material adverse change in the financial markets or major stock exchange
indices in the United States or abroad or in the market price of Shares,
including, without limitation, a decline of at least 10% in either the Dow
Jones Average of Industrial Stocks
A-2
<PAGE>
or the Standard & Poor's 500 Index from that existing at the close of
business on February 28, 1997; (iv) any material change in United States
currency exchange rates or any other currency exchange rates or a
suspension of, or limitation on, the markets therefor; (v) the commencement
of a war or armed hostilities or other international calamity directly or
indirectly involving the United States; or (vi) in the case of any of the
foregoing existing at February 28, 1997, a material acceleration or
worsening thereof; or
(e) unless Parent shall have consented in writing, the Company shall
have (i) split, combined or otherwise changed, or authorized or proposed a
split, combination or other change of, the Shares or its capitalization;
(ii) issued, distributed, pledged or sold, or authorized, proposed or
announced the issuance, distribution, pledge or sale of (A) any shares of
capital stock (including, without limitation, the Shares), or securities
convertible into any such shares, or any rights, warrants, or options to
acquire any such shares or convertible securities, or (B) any other
securities in respect of, in lieu of, or in substitution for Shares; (iii)
purchased or otherwise acquired or caused a reduction in the number of, or
proposed or offered to purchase or otherwise acquire or cause a reduction
in the number of, any outstanding Shares or other securities of the
Company, except as permitted by Section 4.05(a) of the Merger Agreement;
(iv) declared or paid any dividend or distribution on any shares of capital
stock or issued, or authorized, recommended or proposed the issuance of,
any other distribution in respect of the Shares, whether payable in cash,
securities or other property, or altered or proposed to alter any material
term of any outstanding security; (v) issued, or announce its intention to
issue, any debt securities or any rights, warrants or options entitling the
holder thereof to purchase or otherwise acquire any debt securities, or
incurred, or announced its intention to incur, any debt other than in the
ordinary course of business and consistent with its past practice; (vi)
authorized, recommended, proposed or publicly announced its intention to
enter into a (A) any merger, consolidation, liquidation, dissolution,
business combination, acquisition or assets or securities or disposition of
assets or securities other than in the ordinary course of business, (B) any
material change in its capitalization, (C) any release or relinquishment of
any material contract rights, or (D) any comparable event not in the
ordinary course of business; (vii) authorized, recommended or proposed or
announced its intention to authorize, recommend or propose any transaction
which could adversely affect the value of the Shares; (viii) proposed,
adopted or authorized any amendment to its Certificate of Incorporation or
Bylaws or similar organizational documents or Purchaser or Parent shall
have learned about any such proposal or amendment which shall not have been
previously disclosed; (ix) entered into any new material contracts or
cancelled or substantially changed the terms of any existing material
contracts; or (x) agreed in writing or otherwise to take any of the
foregoing actions; or
A-3
<PAGE>
(f) the Company shall have (i) entered into any employment, severance
or similar agreement, arrangement or plan with any of its employees other
than in the ordinary course of business; (ii) entered into or amended any
agreements, arrangements or plans so as to provide for increased or
accelerated benefits to any employee as a result of or in connection with
the transactions contemplated by the Offer, the Merger or other business
combination; or (iii) except as may be required by law, taken any action to
terminate or amend any employee benefit plan (as defined in Section 3(2) of
the Employee Retirement and Income Security Act of 1974, as amended) of the
Company, or Purchaser shall have become aware of any such action that was
not disclosed in publicly available filings prior to the date of this Offer
to Purchase; or
(g) Purchaser, Parent or another affiliate of Parent and the Company
shall have entered into an agreement that the Offer be terminated or
amended or Purchaser, Parent or another affiliate of Parent shall have
entered into an agreement with the Company providing for a merger or other
business combination with the Company, which, in the sole judgment of
Parent or Purchaser in any such case, and regardless of the circumstances
(including any action or inaction by Purchaser, Parent or any affiliate of
Parent) giving rise to any such condition makes it inadvisable to proceed
with the Offer and/or with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Parent and
Purchaser and may be asserted by Parent or Purchaser regardless of the
circumstances giving rise to any such condition and may be waived by Parent or
Purchaser, in whole or in part, at any time and from time to time, in its sole
discretion. The failure by Parent or Purchaser at any time to exercise any of
the foregoing rights will not be deemed a waiver of any such right, and the
waiver of such right with respect to any particular facts or circumstances shall
not be deemed a waiver with respect to any other facts or circumstances, and
each such right will be deemed an ongoing right which may be asserted at any
time and from time to time. Any determination by Parent or Purchaser concerning
the events described above will be final and binding upon all parties.
A-4
<PAGE>
ANNEX B
-------
FIRST. The name of the corporation is MaxServ, Inc.
SECOND. The address of the corporation's registered office in the State
of Delaware is One Rodney Square, 10th Floor, Tenth and King Streets, in the
City of Wilmington, County of New Castle, 19801. The name of its registered
agent at such address is RL&F Service Corp.
THIRD. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH. The total number of shares of stock which the corporation shall
have authority to issue is 1,000. All such shares are to be Common Stock, par
value of $.01 per share, and are to be of one class.
FIFTH. The incorporator of the corporation is Siobhan Cameron, P.O. Box
551, Wilmington, DE 19899.
SIXTH. Unless and except to the extent that the by-laws of the
corporation shall so require, the election of directors of the corporation need
not be by written ballot.
SEVENTH. In furtherance and not in limitation of the powers conferred
by the laws of the State of Delaware, the Board of Directors of the corporation
is expressly authorized to make, alter and repeal the by-laws of the
corporation, subject to the power of the stockholders of the corporation to
alter or repeal any by-law whether adopted by them or otherwise.
EIGHTH. A director of the corporation shall not be liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent such exemption from liability or
limitation thereof is not permitted under the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended. Any amendment,
modification or repeal of the foregoing sentence shall not adversely affect any
right or protection of a director of the corporation hereunder in respect of any
act or omission occurring prior to the time of such amendment, modification or
repeal.
NINTH. The corporation reserves the right at any time, and from time to
time, to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation, and other provisions authorized by the laws of the
State of Delaware at the time in force may be added or inserted, in the manner
now or hereafter prescribed by law; and all rights, preferences and privileges
of whatsoever nature conferred upon stockholders, directors or any
B-1
<PAGE>
other persons whomsoever by and pursuant to this Certificate of Incorporation in
its present form or as hereafter amended are granted subject to the rights
reserved in this article.
B-2
<PAGE>
EXHIBIT (c)(2)
STOCKHOLDER TENDER AGREEMENT
by and among
MAX ACQUISITION DELAWARE INC.,
SEARS, ROEBUCK AND CO.,
SUNWESTERN INVESTMENT FUND II,
and
SUNWESTERN CAYMAN 1984 PARTNERS,
Dated as of March 2, 1997
<PAGE>
STOCKHOLDER TENDER AGREEMENT
This STOCKHOLDER TENDER AGREEMENT, dated as of March 2, 1997 (this
"Agreement"), is by and among Max Acquisition Delaware Inc., a Delaware
corporation ("Purchaser"), Sears, Roebuck and Co., a New York corporation
("Parent"), Sunwestern Investment Fund II, a Texas limited partnership
("Sunwestern Fund"), and Sunwestern Cayman 1984 Partners ("Sunwestern Cayman").
Sunwestern Fund and Sunwestern Cayman are referred to herein collectively as
"Stockholders" and individually as a "Stockholder." Capitalized terms used in
this Agreement are defined in Section 11 hereof unless otherwise indicated.
WHEREAS, on February 4, 1997, Parent and Purchaser commenced a tender
offer to purchase all outstanding shares of common stock, par value $.01 per
share (the "Shares") of MaxServ, Inc., a Delaware corporation (the "Company")
for a purchase price of $7.00 per Share, net to the Seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated February 4, 1997 (the "Offer to Purchase") of Purchaser
and the related Letter of Transmittal (collectively, the "Initial Offer") which
are filed as exhibits to (a) the Tender Offer Statement on Schedule 14D-1 filed
by Parent and Purchaser (together with all supplements or amendments thereto,
the "Schedule 14D-1") and (b) the Transaction Statement on Schedule 13E-3 filed
by Parent and Purchaser (together with all supplements or amendments thereto,
the "Schedule 13E-3"), each in respect of the Initial Offer, with the Securities
and Exchange Commission (the "SEC") on February 4, 1997;
WHEREAS, on February 18, 1997, the Special Committee (the "Special
Committee") of the Board of Directors of the Company (the "Company Board") filed
a Solicitation/Recommendation Statement on Schedule 14D-9 on behalf of the
Company (together with all supplements or amendments thereto, the "Schedule 14D-
9") in which it recommended the Company's stockholders reject the Initial Offer;
WHEREAS, the Boards of Directors of Parent, Purchaser and, on the
recommendation of the Special Committee and following approval of the
disinterested directors of the Company Board, the Company Board each have
determined that it is in the best interests of their respective companies and
stockholders for Parent to acquire the Company upon the terms and conditions set
forth in an Agreement and Plan of Merger, dated as of the date hereof (as
amended from time to time, the "Merger Agreement"), which provides in part,
that, upon the terms and subject to the conditions therein, Purchaser will merge
with and into the Company (the "Merger");
WHEREAS, promptly following the execution hereof Parent and Purchaser
will file with the SEC amendments to the Schedule 14D-1 and the Schedule 13E-3
which reflect the Amendments (as defined in the Merger Agreement), and the
Company Board will file an amendment to the Schedule 14D-9 in which it
recommends to the Company's stockholders that they accept the Offer (as defined
in the Merger Agreement);
<PAGE>
WHEREAS, the Stockholders own an aggregate of 1,014,800 Shares; and
WHEREAS, as a condition to the willingness of Parent and Purchaser to
enter into the Merger Agreement, Purchaser has requested that the Stockholders
agree, and in order to induce Parent and Purchaser to enter into the Merger
Agreement, the Stockholders have agreed, to enter into this Agreement so that
Purchaser is assured it will acquire Shares pursuant to and in accordance with
the terms of the Offer;
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and subject to the terms and conditions set forth herein,
the parties hereto hereby agree as follows:
1. Representations and Warranties of the Stockholders. Each
Stockholder represents and warrants to the Purchaser and the Parent as follows:
(a) Such Stockholder is the sole record and Beneficial Owner of, and
has good title to, its Shares and there exist no restrictions on transfer,
options, proxies, voting agreements, voting trusts or Liens affecting the
Shares.
(b) The Shares constitute all of the Securities of the Company
beneficially owned, directly or indirectly, by such Stockholder.
(c) Except for the Shares, such Stockholder does not, directly or
indirectly, beneficially own or has any option, warrant or other right to
acquire any Securities of the Company (presently, with the passage of time,
subject to conditions or otherwise) that are or may by their terms or law become
entitled to voting rights or any Securities that are convertible or exchangeable
into or exercisable for any Securities of the Company.
(d) The execution and delivery of this Agreement by such Stockholder
does not, and the performance by such Stockholder of its obligations hereunder
will not, constitute a violation of, conflict with, result in a default (or an
event which, with notice or lapse of time or both, would result in a default)
under, or result in the creation of any Lien on any Shares under, (i) any
contract, commitment, agreement, understanding, arrangement or restriction of
any kind to which such Stockholder is a party or by which such Stockholder or
its Shares are bound or (ii) any judgment, writ, decree, order or ruling
affecting such Stockholder or its Shares.
(e) Such Stockholder has full power and authority to execute, deliver
and perform this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly and validly authorized by such
Stockholder, and the execution, delivery and performance of this Agreement and
the consummation of the
2
<PAGE>
transactions contemplated hereby have been duly and validly authorized and no
other actions on the part of such Stockholder are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by such Stockholder and,
assuming due authorization, execution and delivery by the Purchaser, constitutes
a valid and binding agreement of such Stockholder, enforceable against such
Stockholder in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(f) Neither the execution and delivery of this Agreement nor the
performance by such Stockholder of its obligations hereunder will violate any
law, decree, statute, rule or regulation applicable to such Stockholder or the
Shares or require any consent, authorization or approval of, filing with or
notice to, any court, administrative agency or other governmental body or
authority.
3
<PAGE>
2. Representations and Warranties of Purchaser. Purchaser represents
and warrants to the Stockholders as follows:
(a) Purchaser is duly organized and validly existing and in good
standing under the laws of the State of Delaware, has the requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby, and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement. This
Agreement has been duly and validly executed and delivered by Purchaser and
constitutes the legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(b) The execution and delivery of this Agreement by Purchaser does
not, and the performance by Purchaser of its obligations hereunder will not,
constitute a violation of, conflict with, or result in a default (or an event
which, with notice or lapse of time or both, would result in a default) under,
its certificate of incorporation or bylaws or any contract, commitment,
agreement, understanding, arrangement or restriction of any kind to which
Purchaser is a party or by which Purchaser is bound or any judgment, writ,
decree, order or ruling applicable to Purchaser.
(c) Neither the execution and delivery of this Agreement nor the
performance by Purchaser of its obligations hereunder will violate any order,
writ, injunction, judgment, law, decree, statute, rule or regulation applicable
to Purchaser or require any consent, authorization or approval of, filing with,
or notice to, any court, administrative agency or other governmental body or
authority.
3. Tender of Shares.
(a) Each Stockholder will cause to be tendered (and not withdrawn) (x)
within five business days of the execution of this Agreement, its Shares and (y)
any other Shares as to which it may subsequently acquire beneficial ownership,
on the next succeeding business day after the acquisition, in each case pursuant
to and in accordance with the terms of the Offer (collectively "Tendered
Securities"). Each Stockholder will receive the same price per Share received by
other stockholders of the Company in the Offer, in the same manner and upon the
same terms as such other stockholders. Each Stockholder acknowledges that
Purchaser's obligation to accept for payment and pay for the Tendered Securities
in the Offer is subject to all of the terms and conditions of the Offer.
(b) Each Stockholder hereby agrees to permit Parent and Purchaser to
publish and disclose in the Offer Documents (as such term is defined in the
Merger Agreement) and, if approval of the stockholders of the Company is
required under applicable
4
<PAGE>
law, the Proxy Statement, its identity and ownership of Shares and the nature of
its commitments, arrangements and understandings with the Company.
4. Transfer of the Shares. During the term of this Agreement,
except as otherwise provided herein, no Stockholder will (a) offer to sell,
sell, pledge or otherwise dispose of or transfer (except by operation of law in
a merger or business combination of the Company with or into any other entity or
entities) any interest in or encumber with any Lien any of its Shares, (b)
acquire any Shares or other securities of the Company (otherwise than in
connection with a transaction of the type described in Section 9, and any such
additional shares or securities will be deemed Shares and included in the Shares
subject to this Agreement), (c) deposit its Shares into a voting trust, enter
into a voting agreement or arrangement with respect to its Shares or grant any
proxy or power of attorney with respect to its Shares, or (d) enter into any
contract, option or other arrangement or undertaking with respect to the direct
or indirect acquisition or sale, assignment or other disposition of or transfer
of any interest in or the voting of any Shares or any other Securities of the
Company.
5. No Solicitation. Beginning on the date hereof and ending on the
date of termination of this Agreement, no Stockholder shall, in its capacity as
such, directly or indirectly, initiate, solicit (including by way of furnishing
information), encourage or respond to or take any other action knowingly to
facilitate, any inquiries or the making of any proposal by any person or entity
(other than Parent or any affiliate of Parent) with respect to the Company that
constitutes or reasonably may be expected to lead to, an Acquisition Proposal
(as such term is defined in the Merger Agreement), or enter into or maintain or
continue discussions or negotiate with any person or entity in furtherance of
such inquiries or to obtain any Acquisition Proposal, or agree to or endorse any
Acquisition Proposal, or authorize or permit any Person or entity acting on
behalf of such Stockholder to do any of the foregoing, provided that the
foregoing shall not be construed to limit or restrict a director of the Company
from performing his or her fiduciary duties as a director. If a Stockholder
receives any inquiry or proposal regarding any Acquisition Proposal, such
Stockholder shall promptly inform Parent of that inquiry or proposal and the
details thereof.
6. Waiver of Appraisal Rights. Each Stockholder hereby irrevocably
waives any rights of appraisal or rights to dissent from the Merger that such
Stockholder may have pursuant to applicable law or otherwise.
7. Voting of Shares. Beginning on the date hereof and ending on the
date of termination of this Agreement, each Stockholder hereby agrees to vote
each Share at any annual, special or adjourned meeting of the stockholders of
the Company or execute a written consent in lieu thereof (a) in favor of the
Merger, the execution and delivery by the Company of the Merger Agreement and
the approval and adoption thereof; (b) against any action or agreement that
would result in a breach in any respect of any covenant, agreement,
representation or warranty of the Company under the Merger Agreement; and (c)
against the following actions (other than the Merger and the other transactions
contemplated by the Merger Agreement): (i) any extraordinary corporate
transaction, such as a merger, consolidation or other business combination
involving the Company; (ii) a
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sale, lease or transfer of a material amount of assets of the Company, or a
reorganization, recapitalization, dissolution or liquidation of the Company;
(iii) (A) any change in a majority of the persons who constitute the Company
Board as of the date hereof, except as contemplated by the Merger Agreement; (B)
any change in the present capitalization of the Company or any amendment of the
Company's Certificate of Incorporation or By-Laws, as amended to date; (C) any
other material change in the Company's corporate structure or business; or (D)
any other action which, in the case of each of the matters referred to in
clauses (iii)(A), (B), (C) and (D), is intended, or could reasonably be
expected, to impede, interfere with, delay, postpone, or adversely affect the
Merger and the other transactions contemplated by this Agreement and the Merger
Agreement.
8. Enforcement of the Agreement. Each Stockholder acknowledges that
breach by it of any covenants or agreements contained in this Agreement will
cause the other party to sustain damages for which it would not have an adequate
remedy at law for money damages, and therefore each of the parties hereto agrees
that in the event of any such breach the aggrieved party shall be entitled to
the remedy of specific performance of such covenants and agreements and
injunctive and other equitable relief in addition to any other remedy to which
it may be entitled, at law or in equity.
9. Adjustments. The number and type of securities subject to this
Agreement will be appropriately adjusted in the event of any stock dividends,
stock splits, recapitalizations, combinations, exchanges of shares or the like
or any other action that would have the effect of changing the Stockholders'
ownership of the Company's capital stock or other securities.
10. Termination. This Agreement will terminate on the earliest of
(a) the date the Merger Agreement is terminated in accordance with its terms,
(b) the purchase of all the Shares pursuant to the Offer, upon termination of
the Offer if, prior thereto, the Stockholders shall have complied with their
covenants under Section 3(a) and (c) April 4, 1997, provided, however, that
this Agreement will automatically extend for up to 60 days if the consummation
of the Offer has been enjoined or otherwise stayed by any court or other
governmental authority.
11. Definitions.
"Adverse Interest" shall have the meaning accorded such term in
Article 8 of the Uniform Commercial Code as adopted by the State of Delaware.
"Agreement" shall have the meaning set forth in the introductory
paragraph of this Agreement.
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"Beneficial Owner" shall have the meaning ascribed to such term
in Rule 13d-3 under the Exchange Act.
"Company" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"Company Board" shall have the meaning set forth in the second
Whereas clause of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, and as
amended, the rules and regulations promulgated thereunder.
"Initial Offer" shall have the meaning set forth in the first
Whereas clause of this Agreement.
"Liens" means any liens, claims, security interests, pledges,
charges, Adverse Interests or other encumbrances of whatever nature.
"Merger" shall have the meaning set forth in the third Whereas
clause of this Agreement.
"Merger Agreement" shall have the meaning set forth in the third
Whereas clause of this Agreement.
"Offer" shall have the meaning set forth in the Merger Agreement.
"Offer to Purchase" shall have the meaning set forth in the first
Whereas clause of this Agreement.
"Parent" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"Proxy Statement" shall have the meaning set forth in the Merger
Agreement.
"Purchaser" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"Schedule 13E-3" shall have the meaning set forth in the first
Whereas clause of this Agreement.
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"Schedule 14D-1" shall have the meaning set forth in the first
Whereas clause of this Agreement.
"Schedule 14D-9" shall have the meaning set forth in the second
Whereas clause of this Agreement.
"SEC" shall have the meaning set forth in the first Whereas
clause of this Agreement.
"Securities" shall have the meaning ascribed to such term in
Section 3(10) of the Exchange Act.
"Shares" shall have the meaning set forth in the fifth Whereas
clause of this Agreement.
"Special Committee" shall have the meaning set forth in the
second Whereas clause of this Agreement.
"Stock Purchase Agreement" shall mean that certain Stock Purchase
Agreement by and between the Parent and the Company dated as of December 29,
1994.
"Stockholder" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Sunwestern Cayman" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Sunwestern Fund" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Tendered Securities" shall have the meaning set forth in Section
3(a) of this Agreement.
12. Brokerage. Purchaser and each Stockholder represent and warrant
to the other that the negotiations relevant to this Agreement have been carried
on by Purchaser, on the one hand, and such Stockholder, on the other hand,
directly with the other, and that there are no claims for finder's fees or
brokerage commissions or other like payments in connection with this Agreement
or the transactions contemplated hereby. Purchaser, on the one hand, and each
Stockholder, on the other hand, will indemnify and hold harmless the other from
and against any and all claims or liabilities for finder's fees or brokerage
commissions or other like payments incurred by reason of action taken by it or
any of them, as the case may be.
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13. Miscellaneous.
(a) Any provision of this Agreement may be waived at any time by the
party that is entitled to the benefits thereof. No such waiver, amendment or
supplement will be effective unless in a writing signed by the party or parties
sought to be bound thereby. Any waiver by any party of a breach of any provision
of this Agreement will not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement or one or more sections hereof will not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
(b) This Agreement contains the entire agreement among the parties
with respect to the subject matter hereof, and supersedes all prior agreements
among the parties with respect to such matters. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified, except upon the
delivery of a written agreement executed by the parties hereto.
(c) This Agreement will be governed by and construed in accordance
with the laws of the State of Delaware applicable to contracts made and
performed in that state. Each party hereto hereby (i) irrevocably and
unconditionally submits in any legal action or proceeding relating to this
Agreement, or for recognition and enforcement of any judgment in respect
thereof, to the exclusive general jurisdiction of the state and federal courts
in the state of Delaware, and appellate courts from any thereof and (ii)
consents that any action or proceeding may be brought in such courts and waives
any objection that it may now or hereafter have to the venue of any such action
or proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same.
(d) The descriptive headings contained herein are for convenience and
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
(e) All notices and other communications hereunder will be in writing
and will be given (and will be deemed to have been duly given upon receipt) by
delivery in person, by telecopy, or by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
If to a Stockholder to the address set forth beneath such
Stockholder's name below:
Sunwestern Investment Fund II
Three Forest Plaza, Suite 1300
12221 Merit Drive
Dallas, Texas 75251
Attention: Patrick A. Rivelli
Telecopier: (972) 239-5650
Sunwestern Cayman 1984 Partners
Three Forest Plaza, Suite 1300
12221 Merit Drive
Dallas, Texas 75251
Attention: Patrick A. Rivelli
Telecopier: (972) 239-5650
9
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If to the Purchaser or Parent to:
Max Acquisition Delaware Inc.
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, Illinois 60179
Attention: General Counsel
Telecopier: (847) 286-6544
with a copy to:
Latham & Watkins
Sears Tower, Suite 5800
233 South Wacker Drive
Chicago, Illinois 60606
Attention: Carl E. Witschy, Esq.
Telecopier: (312) 993-9767
or to such other address as any party may have furnished to the other parties in
writing in accordance herewith.
(f) This Agreement may be executed in any number of counterparts, each
of which will be deemed to be an original, but all of which together will
constitute one agreement.
(g) This Agreement is binding upon and is solely for the benefit of
the parties hereto and their respective successors, legal representatives and
assigns. Neither this Agreement nor any of the rights, interests or obligations
under this Agreement will be assigned by any of the parties hereto without the
prior written consent of the other parties, except that (i) Purchaser will have
the right to assign to Parent or any other direct or indirect
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<PAGE>
wholly owned subsidiary of Parent any and all rights and obligations of
Purchaser under this Agreement, including the right to purchase Shares tendered
by the Stockholders pursuant to the terms hereof and the Offer, provided that
any such assignment will not relieve Purchaser from any of its obligations
hereunder and (ii) Parent will have the right to assign to Purchaser or any
other direct or indirect wholly owned subsidiary of Parent any and all rights
and obligations of Parent under this Agreement, including the right to purchase
Shares held by the Stockholders pursuant to the terms hereof, provided that any
such assignment will not relieve Parent from any of its obligations hereunder.
(h) If any term or other provision of this Agreement is determined to
be invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will 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 hereto. Upon any such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto will
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 by this Agreement are consummated to the
extent possible.
(i) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity will be cumulative and
not alternative, and the exercise of any thereof by either party will not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party.
(j) While Patrick A. Rivelli has no dispositive power over any Shares
held by Sunwestern Capital Ltd., he believes, based upon conversations that he
has had with James F. Leary (who has such dispositive power) since the inception
of the Offer, that all Shares held by Sunwestern Capital Ltd. will be tendered
pursuant to the Offer.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first above written.
MAX ACQUISITION DELAWARE INC.
By: /s/ John T. Pigott
-----------------------------------
Name: John T. Pigott
---------------------------------
Title: Vice President and Treasurer
--------------------------------
SEARS, ROEBUCK AND CO.
By: /s/ John T. Pigott
-----------------------------------
Name: John T. Pigott
---------------------------------
Title: Vice President
--------------------------------
STOCKHOLDERS:
SUNWESTERN INVESTMENT FUND II,
by a duly authorized signatory of
its General Partner
By: /s/ Patrick A. Rivelli
---------------------------------
Name: Patrick A. Rivelli
-------------------------------
SUNWESTERN CAYMAN 1984
PARTNERS, by a duly authorized
signatory of its General Partner
By: /s/ Patrick A. Rivelli
---------------------------------
Name: Patrick A. Rivelli
-------------------------------
