<PAGE> 1
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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
---------------------
BRITE VOICE SYSTEMS, INC.
(Name of Subject Company)
INTERVOICE ACQUISITION SUBSIDIARY III, INC.
INTERVOICE, INC.
(Bidders)
---------------------
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
---------------------
110411105
(CUSIP Number of Class of Securities)
---------------------
DANIEL D. HAMMOND
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
INTERVOICE, INC.
17811 WATERVIEW PARKWAY
DALLAS, TEXAS 75252
(972) 454-8000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
Copy to:
SAM P. BURFORD, JR.
THOMPSON & KNIGHT, P.C.
1700 PACIFIC AVENUE, SUITE 3300
DALLAS, TEXAS 75201
(214) 969-1354
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<PAGE> 2
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
---------------------- --------------------
<S> <C>
$122,719,277....................................... $24,543.86
</TABLE>
- ---------------
* For purposes of calculating fee only. The total transaction value is based
on 9,158,155 Shares, the number of shares for which the Offer (as defined
herein) is made, multiplied by the offer price of $13.40 per share. The
amount of the filing fee calculated in accordance with Regulation 240.0-11
of the Securities Exchange Act of 1934, as amended, equals 1/50 of one
percentum of the value of shares to be purchased.
[ ] 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.
<TABLE>
<S> <C> <C> <C>
Amount Previously Paid: Not applicable. Filing Party: Not applicable.
Form or Registration No.: Not applicable. Date Filed: Not applicable.
</TABLE>
<PAGE> 3
SCHEDULE 14D-1
CUSIP NO. 110411105
(1) Name of reporting persons
S.S. or I.R.S. Identification No. of above person
InterVoice, Inc. (75-1927578)
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(2) Check the appropriate box if a member of a group
(a) [ ]
(b) [X]
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(3) SEC use only
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(4) Sources of funds
BK
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(5) Check box if disclosure of legal proceedings is required pursuant to
Items 2(e) or 2(f)
[ ]
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(6) Citizenship or place of organization
Texas
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(7) Aggregate amount beneficially owned by each reporting person
None
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(8) Check if the aggregate amount in Row (7) excludes certain shares
N/A [ ]
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(9) Percent of class represented by amount in Row (7)
N/A
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(10) Type of reporting person
CO
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SCHEDULE 14D-1
CUSIP NO. 110411105
(1) Name of reporting persons
S.S. or I.R.S. Identification No. of above person
InterVoice Acquisition Subsidiary III, Inc. (75-2816154)
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(2) Check the appropriate box if a member of a group
(a) [ ]
(b) [X]
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(3) SEC use only
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(4) Sources of funds
BK
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(5) Check box if disclosure of legal proceedings is required pursuant to
Items 2(e) or 2(f)
[ ]
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(6) Citizenship or place of organization
Nevada
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(7) Aggregate amount beneficially owned by each reporting person
None
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(8) Check if the aggregate amount in Row (7) excludes certain shares
N/A [ ]
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(9) Percent of class represented by amount in Row (7)
N/A
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(10) Type of reporting person
CO
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<PAGE> 5
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by InterVoice Acquisition Subsidiary III, Inc., a Nevada corporation
(the "Purchaser"), and a wholly owned subsidiary of InterVoice, Inc., a Texas
corporation ("Parent"), to purchase 9,185,155 shares of common stock, no par
value (the "Shares" or "Common Stock"), of Brite Voice Systems, Inc., a Kansas
corporation (the "Company"), at $13.40 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated May 3, 1999 (the "Offer to Purchase"), a copy of which is attached hereto
as Exhibit (a)(1), and in the related Letter of Transmittal, a copy of which is
attached hereto as Exhibit (a)(2) (which together constitute the "Offer").
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Brite Voice Systems, Inc., and the
address of its principal executive offices is 250 International Parkway, Suite
300, Heathrow, Florida 32746.
(b) The class of securities to which this Statement relates is the Common
Stock. As of April 27, 1999, there were 12,271,928 shares of Common Stock issued
and outstanding. The information set forth in the "INTRODUCTION" of the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 "-- Price Range of the Shares;
Dividends on the Shares" of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is being filed by the Purchaser and Parent. The
information set forth in the "INTRODUCTION" and Section 9 "-- Certain
Information Concerning Parent and the Purchaser" of the Offer to Purchase is
incorporated herein by reference. The name, business address, present principal
occupation or employment, the material occupations, positions, offices or
employments for the past five years and citizenship of each director and
executive officer of Parent and the Purchaser and the name, principal business
and address of any corporation or other organization in which such occupations,
positions, offices and employments are or were carried on are set forth in
Schedule I of the Offer to Purchase and incorporated herein by reference.
(e)-(f) During the last five years neither Parent or the Purchaser nor, to
the best knowledge of Parent and the Purchaser, any of the persons listed in
Schedule I of the Offer to Purchase have been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which any such person was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting activities subject to,
federal or state securities laws or finding any violation of such laws.
ITEM 3.PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)(1) Other than the transactions described in Item 3(b) below, neither
Parent or the Purchaser, nor, to the best knowledge of Parent and the Purchaser,
any of the persons listed in Schedule I of the Offer to Purchase, has entered
into any transaction with the Company or any of the Company's affiliates which
are corporations, since the commencement of the Company's third full fiscal year
preceding the date of this Statement, the aggregate amount of which was equal to
or greater than one percent of the consolidated revenues of the Company for (i)
the fiscal year in which such transaction occurred or (ii) the portion of the
current fiscal year which has occurred if the transaction occurred in such year.
(a)(2) Other than the transactions described in Item 3(b) below, neither
Parent or the Purchaser nor, to the best knowledge of Parent and the Purchaser,
any of the persons listed in Schedule I of the Offer to Purchase, has entered
into any transaction since the commencement of the Company's third full fiscal
year preceding the date of this Statement, with the executive officers,
directors or affiliates of the Company which are not corporations, in which the
aggregate amount involved in such transaction or in a series of similar
1
<PAGE> 6
transactions, including all periodic installments in the case of any lease or
other agreement providing for periodic payments or installments, exceeded
$40,000.
(b) The information set forth in the "INTRODUCTION," Section 9 "-- Certain
Information Concerning Parent and the Purchaser," Section 11 "-- Background of
the Offer; Purpose of the Offer and the Merger; The Merger Agreement and Certain
Other Agreements" and Section 12 "-- Plans for the Company; Other Matters" of
the Offer to Purchase is incorporated herein by reference.
ITEM 4.SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 10 "-- Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5.PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the "INTRODUCTION," Section 11
"-- Background of the Offer; Purpose of the Offer and the Merger; The Merger
Agreement and Certain Other Agreements" and Section 12 "-- Plans for the
Company; Other Matters" of the Offer to Purchase is incorporated herein by
reference.
(f)-(g) The information set forth in Section 7 "-- Effect of the Offer on
the Market for the Shares; Stock Listing; Exchange Act Registration; Margin
Regulations" of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in Section 9 "-- Certain Information
Concerning Parent and the Purchaser" and Section 11 "-- Background of the Offer;
Purpose of the Offer and the Merger; The Merger Agreement and Certain Other
Agreements" of the Offer to Purchase is incorporated herein by reference.
ITEM 7.CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the "INTRODUCTION," Section 10 "-- Source and
Amount of Funds," Section 11 "-- Background of the Offer; Purpose of the Offer
and the Merger; The Merger Agreement and Certain Other Agreements," Section 12
"-- Plans for the Company; Other Matters" and Section 16 "-- Fees and Expenses"
of the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 16 "-- Fees and Expenses" of the Offer
to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 "-- Certain Information Concerning
Parent and the Purchaser" of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Except as disclosed in Items 3 and 7 above, there are no present or
proposed material contracts, arrangements, understandings or relationships
between Parent or the Purchaser, or to the best knowledge of Parent and the
Purchaser, any of the persons listed in Schedule I of the Offer to Purchase, and
the Company or any of its executive officers, directors, controlling persons or
subsidiaries.
2
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(b)-(c) The information set forth in the "INTRODUCTION," Section 14
"-- Conditions of the Offer" and Section 15 "-- Certain Legal Matters" of the
Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 "-- Effect of the Offer on the
Market for Shares; Stock Listing; Exchange Act Registration; Margin Regulations"
and Section 15 "-- Certain Legal Matters" of the Offer to Purchase is
incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, to the extent not otherwise incorporated herein by reference, is
incorporated herein by reference.
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S>
(a)(1) -- Offer to Purchase, dated May 3, 1999.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Letter to Brokers, Dealers, Banks, Trust Companies and
Other Nominees.
(a)(4) -- Letter to Clients for use by Brokers, Dealers, Banks,
Trust Companies and Other Nominees.
(a)(5) -- Notice of Guaranteed Delivery.
(a)(6) -- Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) -- Press Release jointly issued by Parent and the Company,
dated April 27, 1999.
(a)(8) -- Form of Summary Advertisement, dated May 3, 1999.
(b) -- None.
(c)(1) -- Acquisition Agreement and Plan of Merger, dated as of
April 27, 1999, by and among Parent, the Purchaser and
the Company.
(c)(2) -- Stockholders' Agreement, dated as of April 27, 1999, by
and among Parent, the Purchaser and certain stockholders
of the Company named therein.
(c)(3) -- Commitment Letter dated as of April 26, 1999, by and
among Parent, the Purchaser, Bank of America National
Trust and Savings Association and NationsBanc Montgomery
Securities LLC.
(c)(4) -- Confidentiality Agreement, dated March 15, 1999, by and
between Parent and the Company.
(d) -- None.
(e) -- Not applicable.
(f) -- None.
</TABLE>
3
<PAGE> 8
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.
INTERVOICE ACQUISITION SUBSIDIARY
III, INC.
By: /s/ ROB-ROY J. GRAHAM
----------------------------------
Name: Rob-Roy J. Graham
Title: President and Chief
Financial Officer
Date: May 3, 1999
4
<PAGE> 9
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.
INTERVOICE, INC.
By: /s/ ROB-ROY J. GRAHAM
----------------------------------
Name: Rob-Roy J. Graham
Title: Chief Financial Officer
Date: May 3, 1999
5
<PAGE> 10
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<C> <S>
(a)(1) -- Offer to Purchase, dated May 3, 1999.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Letter to Brokers, Dealers, Banks, Trust Companies and
Other Nominees.
(a)(4) -- Letter to Clients for use by Brokers, Dealers, Banks,
Trust Companies and Other Nominees.
(a)(5) -- Notice of Guaranteed Delivery.
(a)(6) -- Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) -- Press Release jointly issued by Parent and the Company,
dated April 27, 1999.
(a)(8) -- Form of Summary Advertisement, dated May 3, 1999.
(b) -- None.
(c)(1) -- Acquisition Agreement and Plan of Merger, dated as of
April 27, 1999, by and among Parent, the Purchaser and
the Company.
(c)(2) -- Stockholders' Agreement, dated as of April 27, 1999, by
and among Parent, the Purchaser and certain stockholders
of the Company named therein.
(c)(3) -- Commitment Letter dated as of April 26, 1999, by and
among Parent, the Purchaser, Bank of America National
Trust and Savings Association and NationsBanc Montgomery
Securities LLC
(c)(4) -- Confidentiality Agreement, dated March 15, 1999, by and
between Parent and the Company.
(d) -- None.
(e) -- Not applicable.
(f) -- None.
</TABLE>
<PAGE> 1
EXHIBIT 99.(a)(1)
OFFER TO PURCHASE FOR CASH
9,158,155 SHARES OF COMMON STOCK
OF
BRITE VOICE SYSTEMS, INC.
BY
INTERVOICE ACQUISITION SUBSIDIARY III, INC.
A WHOLLY OWNED SUBSIDIARY OF
INTERVOICE, INC.
AT
$13.40 NET PER SHARE
THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON JUNE 1, 1999, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO AN ACQUISITION AGREEMENT AND PLAN OF
MERGER DATED AS OF APRIL 27, 1999 AMONG INTERVOICE, INC., INTERVOICE ACQUISITION
SUBSIDIARY III, INC. AND BRITE VOICE SYSTEMS, INC. THE BOARD OF DIRECTORS OF
BRITE VOICE SYSTEMS, INC. HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE HOLDERS OF THE COMMON STOCK AND UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER, AT LEAST
9,158,155 SHARES OF COMMON STOCK, WHICH REPRESENT APPROXIMATELY 75% OF THE
SHARES OF COMMON STOCK OUTSTANDING, AND THE OTHER CONDITIONS SET FORTH IN THIS
OFFER TO PURCHASE. SEE SECTION 14.
---------------------
IMPORTANT
Any stockholder who desires to tender all or any portion of such
stockholder's Shares (as defined herein) should either (i) complete and sign the
Letter of Transmittal (or facsimile thereof) in accordance with the instructions
in the Letter of Transmittal, mail or deliver it and any other required
documents to the Depositary (as defined herein) and either deliver the
certificates for such Shares to the Depositary or tender such Shares pursuant to
the procedures for book-entry transfer set forth in Section 3 or (ii) request
such stockholder's broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for such stockholder. Any stockholder whose
Shares are registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such person to tender such stockholder's
Shares.
Any stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, may tender such
Shares by following the procedures for guaranteed delivery set forth in Section
3.
Questions and requests for assistance may be directed to the Information
Agent (as defined herein) at the locations and telephone numbers set forth on
the back cover of this Offer to Purchase. Requests for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent or the Depositary, or to
brokers, dealers, commercial banks or trust companies. A stockholder also may
contact brokers, dealers, commercial banks or trust companies for assistance
concerning the Offer.
---------------------
THE INFORMATION AGENT FOR THE OFFER IS:
CORPORATE INVESTOR COMMUNICATIONS, INC. LOGO
CORPORATE INVESTOR COMMUNICATIONS, INC.
May 3, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION................................................ 1
THE OFFER................................................... 3
1. Terms of the Offer................................... 3
2. Acceptance for Payment and Payment................... 5
3. Procedure for Tendering Shares....................... 6
4. Withdrawal Rights.................................... 8
5. Certain U.S. Federal Income Tax Consequences......... 9
6. Price Range of the Shares; Dividends on the Shares... 10
7. Effect of the Offer on the Market for the Shares;
Stock Listing; Exchange Act Registration; Margin
Regulations.......................................... 10
8. Certain Information Concerning the Company........... 11
9. Certain Information Concerning Parent and the
Purchaser............................................ 13
10. Source and Amount of Funds........................... 15
11. Background of the Offer; Purpose of the Offer and the
Merger; The Merger Agreement and Certain Other
Agreements........................................... 16
12. Plans for the Company; Other Matters................. 30
13. Dividends and Distributions.......................... 34
14. Conditions of the Offer.............................. 34
15. Certain Legal Matters................................ 36
16. Fees and Expenses.................................... 38
17. Miscellaneous........................................ 38
SCHEDULE I -- Directors and Executive Officers of Parent and
the Purchaser
ANNEX A -- Text of Section 17-6712 of the Kansas General
Corporation Code
</TABLE>
i
<PAGE> 3
TO THE HOLDERS OF COMMON STOCK OF BRITE VOICE SYSTEMS, INC.:
INTRODUCTION
INTERVOICE ACQUISITION SUBSIDIARY III, INC., a Nevada corporation (the
"Purchaser") and a wholly owned subsidiary of InterVoice, Inc., a Texas
corporation ("Parent"), hereby offers to purchase 9,158,155 shares of common
stock, no par value (the "Common Stock" or the "Shares"), of Brite Voice
Systems, Inc., a Kansas corporation (the "Company"), at a price of $13.40 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in this Offer to Purchase and in the related Letter of Transmittal
(which, together with any amendments or supplements hereto or thereto,
collectively constitute the "Offer"). THE OFFER IS CONDITIONED UPON, AMONG OTHER
THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION
OF THE OFFER, AT LEAST 9,158,155 SHARES (THE "MINIMUM CONDITION"). SEE SECTION
14. THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON JUNE 1, 1999, UNLESS EXTENDED. SEE SECTION 1.
The Offer is being made pursuant to an Acquisition Agreement and Plan of
Merger, dated as of April 27, 1999 (the "Merger Agreement"), by and among
Parent, the Purchaser and the Company pursuant to which, as soon as practicable
after the completion of the Offer and satisfaction or waiver, if permissible, of
all conditions to the Merger (as defined below), the Purchaser will be merged
with and into the Company and the corporate existence of the Purchaser will
thereupon cease. The merger, as effected pursuant to the immediately preceding
sentence, is referred to herein as the "Merger," and the Company as the
surviving corporation of the Merger, is sometimes herein referred to as the
"Surviving Corporation." The Merger Agreement is more fully described in Section
11.
As a condition and inducement to Parent and the Purchaser to enter into the
Merger Agreement and to incur the liabilities therein, Stanley G. Brannan, Sue
Brannan, Glenn A. Etherington, Leon A. Ferber, John F. Kelsey, III, Alan C.
Maltz (individually and as custodian for his minor daughters), Scott A. Maltz,
Ray S. Naeini and Donald R. Walsh (the "Major Stockholders"), who collectively
have voting power and dispositive power with respect to approximately 3,090,541
Shares, concurrently with the execution and delivery of the Merger Agreement,
are entering into a Stockholders' Agreement (the "Stockholders' Agreement") with
Parent and the Purchaser. Pursuant to the Stockholders' Agreement, the Major
Stockholders have agreed, among other things, to tender the Shares held by them
in the Offer, and to grant Parent a proxy with respect to the voting of such
Shares in favor of the Merger upon the terms and subject to the conditions set
forth therein.
At the effective time of the Merger (the "Effective Time"), each share of
Common Stock then outstanding (other than (i) Shares purchased in the Offer or
otherwise owned by Parent, the Purchaser or any other direct or indirect
subsidiary of Parent, (ii) Shares that are owned by the Company or its
subsidiaries or (iii) Shares (the "Dissenting Shares") held by stockholders who
properly perfect their dissenters' rights under Kansas law (collectively, the
"Excluded Shares")) will be cancelled and extinguished and converted into the
right to receive the merger consideration calculated under either method (1) or
(2), as applicable:
(1) If the Purchaser purchases 9,158,155 Shares in the Offer (the
"Cash Share Number") or, in the sole discretion of the Purchaser, more than
the Cash Share Number, each Share then outstanding (other than Excluded
Shares) will be converted into the right to receive that number of fully
paid and nonassessable shares of common stock, no par value per share, of
Parent (the "Parent Common Stock"), together with associated preferred
stock purchase rights (the "Rights"), equal to the quotient of (x) $13.40
divided by (y) the average per share closing price of the Parent Common
Stock on the Nasdaq National Market (the "Nasdaq") for the 25 trading days
immediately preceding the Effective Time (the "Average Trading Price"),
provided that, for purposes of the Merger Agreement, the Average Trading
Price shall be at least equal to the Lower Collar (as defined below) and
shall not exceed $14.00 per share; or
(2) If the Purchaser lowers the Minimum Condition to a majority of the
issued and outstanding Common Stock on a fully diluted basis and the number
of Shares purchased in the Offer is less than the Cash Share Number, each
Share then outstanding (other than Excluded Shares) will be converted into
1
<PAGE> 4
the right to receive (a) an amount in cash equal to the quotient of (w) the
difference between (i) the product of $13.40 multiplied by the Cash Share
Number and (ii) the aggregate purchase price for the number of Shares
actually purchased in the Offer, divided by (x) a number of shares equal to
(A) the total number of shares of Common Stock issued and outstanding
immediately prior to the Effective Time (B) less the Excluded Shares (C)
plus the Dissenting Shares (such quotient referred to as the "Cash
Amount"), plus (b) that number of shares of Parent Common Stock equal to
the quotient of (y) the difference between $13.40 and the Cash Amount,
divided by (z) the Average Trading Price.
The term "Lower Collar" means $8.00, provided, however, if a Lower Collar
of $8.00 would result in the issuance of more than 5,719,877 shares of
Parent Common Stock in the Merger (assuming for purposes of this
calculation that all outstanding options under the Company's stock option
plans that shall not have been cancelled or repurchased by the Company
pursuant to the Merger Agreement at or prior to the completion of the Offer
are exercised in full immediately prior to the Effective Time and there are
no Dissenting Shares (the "Exercise/No Dissenters Presumption")), the Lower
Collar shall be an amount per share equal to the product of (i) $8.00
multiplied by (ii) a fraction of which (A) the numerator is the total
number of shares of Parent Common Stock that would be issued in the Merger
if the Lower Collar were $8.00, assuming the Exercise/No Dissenters
Presumption, and (B) the denominator is 5,719,877.
The foregoing shall be referred to collectively as the Merger Consideration.
If more than 9,158,155 Shares are validly tendered prior to the Expiration
Date (as defined) and not withdrawn, the Purchaser will, upon the terms and
subject to the conditions of the Offer, accept for payment (and thereby
purchase) the Shares purchased in the Offer on a pro rata basis, with
adjustments to avoid purchases of fractional shares of Common Stock, based on
the number of Shares validly tendered prior to the Expiration Date and not
withdrawn by each tendering stockholder. Because of the difficulty of
determining precisely the number of Shares validly tendered and not withdrawn,
if proration is required, the Purchaser would not expect to announce the final
results of the proration until at least seven Nasdaq trading days after the
Expiration Date. Preliminary results of proration will be announced by press
release as promptly as practicable after the Expiration Date. Holders of shares
of Common Stock may obtain such preliminary information from the Depositary, and
may also be able to obtain such preliminary information from their brokers.
Tendering stockholders will not receive payment for Shares accepted for payment
pursuant to the Offer until the final proration factor is known. Subject to the
terms of the Merger Agreement, the Purchaser reserves the right (but shall not
be obligated) to accept for payment more than 9,158,155 Shares pursuant to the
Offer, although the Purchaser has no present intention of doing so.
At the Effective Time, Shares shall no longer be outstanding and shall be
cancelled and retired and shall cease to exist (in the case of Excluded Shares
other than Dissenting Shares, without the payment of consideration therefor),
and each certificate formerly representing any of such Shares, other than
Excluded Shares, shall thereafter represent only the right to receive the Merger
Consideration and the right, if any, to receive cash in lieu of fractional
shares, without interest.
As the market price of the shares of the Parent Common Stock will
fluctuate, the value of the Merger Consideration at the Effective Time may be
less or greater than the $13.40 in cash per Share payable pursuant to the Offer.
Based on the Average Trading Price of Parent Common Stock calculated at April
30, 1999, the value of each share of Parent Common Stock to be received in the
Merger as Merger Consideration would have been $10.41.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREUNDER, INCLUDING THE OFFER AND
THE MERGER, AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR
TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS, AND UNANIMOUSLY
RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES.
U.S. Bancorp Piper Jaffray, Inc., the Company's financial advisor ("Piper
Jaffray"), has delivered to the Company's Board of Directors its written opinion
dated April 26, 1999 (the "Fairness Opinion") to the effect that based on and
subject to certain matters stated in the Fairness Opinion, the consideration to
be received by the holders of Shares pursuant to the Offer and under the terms
of the Merger Agreement, is fair to such
2
<PAGE> 5
holders (other than Parent and its affiliates), from a financial point of view,
as of the date of the Fairness Opinion. Such opinion is set forth in full as an
exhibit to the Company's Solicitation/Recommendation Statement on Schedule 14D-9
(the "Schedule 14D-9") that is being mailed to stockholders of the Company.
The Merger Agreement provides that the initial scheduled expiration date of
the Offer shall be 21 business days after the date the Offer is commenced.
However, if the Minimum Condition or such other conditions to the Offer that are
reasonably capable of being satisfied within ten business days shall not have
been satisfied or waived by such date, the Purchaser shall extend the Expiration
Date for a minimum of an additional ten business days. In addition, if all
conditions to the Offer shall not have been satisfied or waived by such date,
the Purchaser may, from time to time, in its sole discretion, extend the
Expiration Date. In no event shall the Purchaser be obligated to extend the
Offer beyond June 30, 1999. The Merger Agreement also provides that the
Purchaser shall, on the terms and subject to the prior satisfaction or waiver of
the conditions of the Offer, accept for payment and purchase, as soon as
permitted under the terms of the Offer, 9,158,155 Shares validly tendered and
not withdrawn prior to the expiration of the Offer. The Offer will not remain
open following the time Shares are accepted for payment.
Consummation of the Merger is conditioned upon, among other things, the
approval and adoption by the requisite vote of stockholders of the Company of
the Merger Agreement in order to consummate the Merger. See Section 11. Under
the Kansas General Corporation Code (the "KGCC"), the affirmative vote of a
majority of the outstanding shares of Common Stock is required to approve the
Merger Agreement and the Merger. If 9,158,155 Shares, which represent
approximately 75% of the Shares of Common Stock outstanding, are acquired in the
Offer, the Purchaser will have sufficient voting power to approve and adopt the
Merger Agreement and the Merger without the vote of any other stockholder of the
Company. Additionally, as described above, the Major Stockholders, who hold in
the aggregate approximately 25% of the outstanding Common Stock, have entered
into the Stockholders' Agreement pursuant to which they have agreed, among other
things, to grant Parent a proxy to vote all Shares beneficially owned by them in
favor of the Merger Agreement and the transactions contemplated thereby.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the sale of Shares pursuant to the Offer. The
Purchaser will pay all fees and expenses incurred in connection with the Offer
of Corporate Investor Communications, Inc., which is acting as the Information
Agent (the "Information Agent") and Harris Trust Company of New York, which is
acting as the Depositary (the "Depositary").
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF
THE COMPANY'S STOCKHOLDERS OR AN OFFER TO SELL OR SOLICITATION OF OFFERS TO BUY
PARENT COMMON STOCK OR OTHER SECURITIES. ANY SUCH SOLICITATION WILL BE MADE ONLY
PURSUANT TO SEPARATE PROXY MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION
14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"),
AND ANY SUCH OFFER WILL BE MADE ONLY THROUGH A PROSPECTUS PURSUANT TO THE
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
WHICH PROSPECTUS WILL ALSO CONSTITUTE A JOINT PROXY STATEMENT FOR THE MEETING OF
STOCKHOLDERS OF THE COMPANY RELATING TO THE MERGER (THE "JOINT PROXY
STATEMENT/PROSPECTUS").
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
THE OFFER
1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the
Offer, the Purchaser will accept for payment and pay for 9,158,155 Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4 of this Offer to Purchase. The term "Expiration Date"
shall mean 12:00 Midnight, New York City time, on June 1, 1999, unless and until
the Purchaser, in accordance with the terms of the Merger Agreement, shall have
extended the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by the Purchaser, shall expire.
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<PAGE> 6
If more than the 9,158,155 Shares are validly tendered prior to the
Expiration Date and not withdrawn, the Purchaser will accept for payment (and
thereby purchase) 9,158,155 Shares, on a pro rata basis, with adjustments to
avoid purchases of fractional shares, based upon the number of Shares validly
tendered prior to the Expiration Date and not withdrawn by each tendering
stockholder. In the event that proration of tendered Shares is required, because
of the difficulty of determining the precise number of Shares properly tendered
and not withdrawn (due in part to the guaranteed delivery procedure described
under Section 3), the Purchaser does not expect that it will be able to announce
the final results of such proration or pay for any Shares until at least seven
Nasdaq trading days after the Expiration Date. Preliminary results of proration
will be announced by press release as promptly as practicable after the
Expiration Date. Stockholders may obtain such preliminary information from the
Information Agent and may be able to obtain such information from their brokers.
Subject to the terms of the Merger Agreement, the Purchaser reserves the right
(but shall not be obligated) to accept for payment more than 9,158,155 Shares
pursuant to the Offer, although the Purchaser has no present intention of doing
so.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition, and the expiration or termination of all waiting periods
imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the regulations thereunder (the "HSR Act"). See Section 14. If such
conditions are not satisfied prior to the Expiration Date, the Purchaser
reserves the right (but shall not be obligated) to (i) decline to purchase any
of the Shares tendered and terminate the Offer, subject to the terms of the
Merger Agreement, (ii) waive any of the conditions to the Offer, to the extent
permitted by applicable law and the provisions of the Merger Agreement, and,
subject to complying with applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), purchase all Shares validly tendered or
(iii) subject to the terms of the Merger Agreement, extend the Offer and,
subject to the right of stockholders to withdraw Shares until the Expiration
Date, retain the Shares which will have been tendered during the period or
periods for which the Offer is open or extended.
Subject to applicable regulations of the Commission and to the extent
permitted by the terms of the Merger Agreement, the Purchaser expressly reserves
the right, in its sole discretion, at any time or from time to time, (i) to
extend the period of time during which the Offer is open and thereby delay
acceptance for payment of, and the payment for, any Shares, by giving oral or
written notice of such extension to the Depositary and (ii) to amend the Offer
in any respect (including, without limitation, by decreasing or increasing the
consideration offered in the Offer (the "Offer Price") to holders of Shares
and/or by decreasing the number of Shares being sought in the Offer), by giving
oral or written notice of such amendment to the Depositary. The rights reserved
by the Purchaser in this paragraph are in addition to the Purchaser's rights to
terminate the Offer as described in Section 14. Any extension, amendment or
termination will be followed as promptly as practicable by public announcement
thereof, the announcement in the case of an extension to be issued no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Exchange Act. Without limiting the
obligation of the Purchaser under such Rule or the manner in which the Purchaser
may choose to make any public announcement, the Purchaser currently intends to
make announcements by issuing a press release to the Dow Jones News Service.
Under no circumstances will interest be paid on the Offer Price to be paid by
the Purchaser for the Shares, regardless of any extension of the Offer or any
delay in making such payment. The Merger Agreement provides that the Purchaser
will not amend or waive the Minimum Condition (other than, at the Purchaser's
option, to lower the Minimum Condition to a majority of the issued and
outstanding Common Stock on a fully diluted basis) and will not decrease the
Offer Price or decrease the number of Shares sought, or amend any other term of
the Offer in any manner adverse to the holders of the Shares without the written
consent of the Company.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may retain tendered Shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in Section 4. However, the ability of
the Purchaser to delay the payment for Shares which the Purchaser has accepted
for payment is limited by
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<PAGE> 7
Rule 14e-l(c) under the Exchange Act, which requires that a bidder pay the
consideration offered or return the securities deposited by or on behalf of
holders of securities promptly after the termination or withdrawal of the Offer.
If the Purchaser makes a material change in the terms of the Offer or in
the information concerning the Offer or waives a material condition of the
Offer, the Purchaser will disseminate additional tender offer materials and
extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1
under the Exchange Act. The minimum period during which the Offer must remain
open following material changes in the terms of the Offer or information
concerning the Offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. In a
public release, the Commission has stated that in its view an offer must remain
open for a minimum period of time following a material change in the terms of
the Offer and that waiver of a material condition, such as the Minimum
Condition, is a material change in the terms of the Offer. The release states
that an offer should remain open for a minimum of five business days from the
date a material change is first published, sent or given to security holders and
that, if material changes are made with respect to information not materially
less significant than the offer price and the number of shares being sought, a
minimum of ten business days may be required to allow adequate dissemination and
investor response. The requirement to extend the Offer will not apply to the
extent that the number of business days remaining between the occurrence of the
change and the then-scheduled Expiration Date equals or exceeds the minimum
extension period that would be required because of such amendment. As used in
this Offer to Purchase, "business day" has the meaning set forth in Rule 14d-1
under the Exchange Act.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
will be mailed by the Purchaser to record holders of Shares and will be
furnished by the Purchaser to brokers, dealers, banks and similar persons whose
names, or the names of whose nominees, appear on the stockholder lists or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT. 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), the Purchaser will
accept for payment and will pay for, promptly after the Expiration Date,
9,158,155 Shares validly tendered prior to the Expiration Date and not properly
withdrawn in accordance with Section 4. All determinations concerning the
satisfaction of such terms and conditions will be within the Purchaser's
discretion, which determinations will be final and binding. See Sections 1 and
14. The Purchaser expressly reserves the right, in its sole discretion, to
purchase more than 9,158,155 Shares in the Offer (although it has no present
intention of doing so). In addition, the Purchaser expressly reserves the right,
in its sole discretion, to delay acceptance for payment of or payment for Shares
in order to comply in whole or in part with any applicable law, including,
without limitation, the HSR Act. Any such delays will be effected in compliance
with Rule 14e-l(c) under the Exchange Act (relating to a bidder's obligation to
pay the consideration offered or return the securities deposited by or on behalf
of holders of securities promptly after the termination or withdrawal of such
bidder's offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Shares (or a timely Book-Entry Confirmation (as defined below) with respect
thereto), (ii) a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message (as defined below), and (iii)
any other documents required by the Letter of Transmittal. The per Share
consideration paid to any holder of Common Stock pursuant to the Offer will be
the highest per Share consideration paid to any other holder of such Shares
pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares. Payment
for
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<PAGE> 8
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering stockholders. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY THE PURCHASER FOR THE
SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
If the Purchaser is delayed in its acceptance for payment of, or payment
for, Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (including such rights as are set forth in Sections 1 and 14) (but
subject to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary
may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to exercise, and duly exercise, withdrawal rights as described in
Section 4.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, certificates for any such Shares will be returned, without expense to
the tendering stockholder (or, in the case of Shares delivered by book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility (as defined below) pursuant to the procedures set forth in Section 3,
such Shares will be credited to an account maintained at the Book-Entry Transfer
Facility), as promptly as practicable after the expiration or termination of the
Offer.
The Purchaser reserves the right to transfer or assign, in whole or in
part, to Parent or to any affiliate of Parent, the right to purchase Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tender. For Shares to be tendered validly pursuant to the Offer,
either (i) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature guarantees, or in the
case of a book-entry transfer, an Agent's Message, and any other required
documents, must be received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase prior to the Expiration Date and
either certificates for tendered Shares must be received by the Depositary at
one of such addresses or such Shares must be delivered pursuant to the
procedures for book-entry transfer set forth below (and a Book-Entry
Confirmation received by the Depositary), in each case, prior to the Expiration
Date or (ii) the tendering stockholder must comply with the guaranteed delivery
procedures set forth below.
The Depositary will establish an account with respect to the Shares at The
Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of
the Offer within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account in accordance with the Book-Entry Transfer Facility's procedure for such
transfer. However, although delivery of Shares may be effected through
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility, the Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or an Agent's
Message, and any other required documents must, in any case, be transmitted to,
and received by, the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase prior to the Expiration Date, or the tendering
stockholder must comply with the guaranteed delivery procedures described below.
The confirmation of a book-entry transfer of Shares into the Depositary's
account at the Book-Entry Transfer Facility as described above is referred to
herein as a "Book-Entry Confirmation." DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
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<PAGE> 9
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
The method of delivery of shares, the Letter of Transmittal and all other
required documents, including delivery through the Book-Entry Transfer Facility,
is at the election and risk of the tendering stockholder. Shares will be deemed
delivered only when actually received by the Depositary (including, in the case
of a book-entry transfer, by Book-Entry Confirmation). 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.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
the Book Entry Transfer Facility's systems whose name appears on a security
position listing as the owner of the Shares) of Shares tendered therewith and
such registered holder(s) has (have) not completed either the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agent's Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution" and, collectively, "Eligible Institutions"). In
all other cases, all signatures on Letters of Transmittal must be guaranteed by
an Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal.
If the certificates for Shares are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or
certificates for Shares not tendered or not accepted for payment are to be
returned, to a person other than the registered holder of the certificates
surrendered, then the tendered certificates for such Shares must be endorsed or
accompanied by appropriate stock powers, in either case, signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed by an
Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the procedures 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 Date, such stockholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for (or a Book-Entry Confirmation with respect
to) such Shares, together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message,
and any other required documents are received by the Depositary within
three trading days after the date of execution of such Notice of Guaranteed
Delivery. A "trading day" is any day on which the Nasdaq is open for
business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering stockholders may be paid at different times depending
upon when certificates for
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<PAGE> 10
Shares or Book-Entry Confirmations with respect to Shares are actually received
by the Depositary. Under no circumstances will interest be paid on the purchase
price to be paid by the Purchaser for the Shares, regardless of any extension of
the Offer or any delay in making such payment.
The valid tender of Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering stockholder and
the Purchaser upon the terms and subject to the conditions of the Offer.
Appointment. By executing the Letter of Transmittal as set forth above, a
tendering stockholder will irrevocably appoint designees of the Purchaser, as
such stockholder's attorneys-in-fact and proxies in the manner set forth in the
Letter of Transmittal, each with full power of substitution, to the full extent
of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other Shares or other securities or rights issued or issuable in respect
of such Shares. All such proxies will be considered coupled with an interest in
the tendered Shares. Such appointment will be effective when, and only to the
extent that, the Purchaser accepts for payment Shares tendered by such
stockholder as provided herein. Upon such appointment, all prior powers of
attorney, proxies and consents given by such stockholder with respect to such
Shares or other securities or rights will, without further action, be revoked
and no subsequent powers of attorney, proxies, consents or revocations may be
given by such stockholder (and, if given, will not be deemed effective). The
designees of the Purchaser will thereby be empowered to exercise all voting and
other rights with respect to such Shares and other securities or rights,
including, without limitation, in respect of any annual, special or adjourned
meeting of the Company's stockholders, actions by written consent in lieu of any
such meeting or otherwise, as they in their sole discretion deem proper. The
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the Purchaser's acceptance for payment of
such Shares, the Purchaser must be able to exercise full voting, consent and
other rights with respect to such Shares and other related securities or rights,
including voting at any meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser, in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any or all tenders of any Shares determined by it not to be in proper form or
the acceptance for payment of, or payment for which may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right, in its sole discretion, subject to the provisions of the Merger
Agreement, to waive any of the conditions of the Offer or any defect or
irregularity in the tender of any Shares of any particular stockholder, whether
or not similar defects or irregularities are waived in the case of other
stockholders. No tender of Shares will be deemed to have been validly made until
all defects or irregularities relating thereto have been cured or waived. None
of the Purchaser, Parent, the Depositary, the Information Agent, the Company or
any other person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. Subject to the terms of the Merger Agreement, the Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
Backup Federal Income Tax Withholding. Under the "backup withholding"
provisions of U.S. federal income tax law, unless a tendering registered holder,
or such holder's assignee (in either case, the "Payee"), satisfies the
conditions described in Instruction 9 of the Letter of Transmittal or is
otherwise exempt, the cash payable as a result of the Offer may be subject to
backup withholding tax at a rate 31% of the gross proceeds. To prevent backup
withholding, each Payee should complete and sign the Substitute Form W-9
provided in the Letter of Transmittal. See Instruction 9 of the Letter of
Transmittal.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4,
tenders of Shares are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn pursuant to the procedures set forth below at any time prior to the
Expiration Date and, unless theretofore accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after June 30, 1999.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to
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<PAGE> 11
Purchase and must specify the name of the person having tendered the Shares to
be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If certificates for Shares have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such certificates, the serial numbers shown on such certificates must
be submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution, the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been delivered pursuant to
the procedures for book-entry transfer as set forth in Section 3, any notice of
withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by again following one of the
procedures described in Section 3 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Parent, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defects or irregularities in
any notice of withdrawal or incur any liability for failure to give any such
notification.
5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES. The following discussion
is for general information purposes only and is based on the U.S. federal income
tax law now in effect, which is subject to change, possibly retroactively. This
summary does not discuss all aspects of U.S. federal income taxation which may
be important to particular stockholders in light of their individual investment
circumstances or to certain types of stockholders subject to special tax rules
(e.g., financial institutions, broker-dealers, insurance companies, tax-exempt
organizations and foreign taxpayers), nor does it address specific state, local,
or foreign tax consequences. This summary assumes that stockholders have held
their Shares as "capital assets" (generally property held for investment) under
the Internal Revenue Code of 1986, as amended (the "Code"). EACH HOLDER OF
SHARES IS URGED TO CONSULT ITS TAX ADVISOR REGARDING THE SPECIFIC U.S. FEDERAL,
STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF THE OFFER AND THE
MERGER.
The receipt of cash for Shares tendered pursuant to the Offer will be a
taxable transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign tax laws. Generally, a
stockholder who receives cash for Shares pursuant to the Offer will recognize
gain or loss for federal income tax purposes equal to the difference between the
amount of cash received in exchange for the Shares sold and such stockholder's
adjusted tax basis in such Shares. In addition, stockholders should note that
the receipt of the Merger Consideration (whether consisting solely of shares of
Parent Common Stock or of both shares of Parent Common Stock and cash) if the
Merger is carried out as contemplated by the parties will be a taxable
transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign tax laws. In such event, a
stockholder who receives Parent Common Stock pursuant to the Merger will
recognize gain or loss for federal income tax purposes equal to the difference
between the fair market value of the Parent Common Stock at the Effective Time
(plus the amount of any cash received) and such stockholder's adjusted tax basis
in the Shares exchanged in the Merger. Thus, a stockholder recognizing a gain
under the foregoing rule could be in the position of incurring a tax liability
as a result of the Merger without the corresponding receipt of cash.
Gain or loss recognized with respect to either the receipt of cash pursuant
to the Offer or the receipt of the Merger Consideration pursuant to the Merger
generally will be capital gain or loss. Gain or loss will be calculated
separately for each block of Shares (i.e., a group of Shares with the same tax
basis and holding period) tendered pursuant to the Offer or exchanged in the
Merger. Any such capital gain will be long term if the stockholder has held the
Shares for more than one year at the time of the sale. The deductibility of
capital losses is limited. The initial tax basis of any Parent Common Stock
received pursuant to the Merger will be the fair market value of such stock at
the Effective Time.
9
<PAGE> 12
A holder of Shares who in lieu of receiving the Merger Consideration
perfects such stockholder's appraisal rights, if any, under the KGCC and
receives cash in exchange for such stockholder's Shares should in general
recognize capital gain or loss in an amount equal to the difference between the
amount of cash received (less any amount constituting interest) and the
stockholder's basis in the Shares surrendered therefor. Any amount constituting
interest would be taxable as ordinary income. See Section 12 "-- Appraisal
Rights."
A stockholder whose Shares are purchased in the Offer may be subject to 31%
backup withholding unless certain information is provided to Parent and the
Purchaser or an exemption applies. See Section 3 "-- Backup Federal Income Tax
Withholding."
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES. The shares of Common
Stock are traded on the Nasdaq under the symbol "BVSI". The following table sets
forth, for each of the calendar quarters indicated, the high and low reported
sales price per share of Common Stock on the Nasdaq based on published financial
sources.
<TABLE>
<CAPTION>
COMMON STOCK
---------------
HIGH LOW
------ ------
<S> <C> <C>
1997
First Quarter............................................. $18.00 $10.50
Second Quarter............................................ 10.88 6.75
Third Quarter............................................. 11.63 7.00
Fourth Quarter............................................ 12.25 8.38
1998
First Quarter............................................. $11.25 $ 7.63
Second Quarter............................................ 14.00 8.81
Third Quarter............................................. 13.25 7.13
Fourth Quarter............................................ 10.13 7.00
1999
First Quarter............................................. $12.00 $ 7.50
Second Quarter (through April 30, 1999)................... 12.94 8.00
------ ------
</TABLE>
Since becoming a public company in 1989, the Company has not paid cash
dividends on its Common Stock.
On April 26, 1999, the last full trading day prior to the public
announcement of the execution of the Merger Agreement, the last reported sales
price of the Shares on the Nasdaq was $10.56 per share of Common Stock. On April
30, 1999, the last full trading day prior to the commencement of the Offer, the
last reported sales price of the Shares on the Nasdaq was $12.56 per share of
Common Stock. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR
THE SHARES OF COMMON STOCK.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK LISTING;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Market for the Shares. The purchase of Shares by the Purchaser pursuant to
the Offer will reduce the number of holders of Shares and the number of Shares
that might otherwise trade publicly and, depending upon the number of Shares so
purchased, could adversely affect the liquidity and market value of the
remaining Shares held by the public.
Stock Listing. The Common Stock is listed on the Nasdaq. Depending upon the
aggregate market value and the per share price of any Shares not purchased
pursuant to the Offer, the Common Stock may no longer meet the requirements for
continued listing on the Nasdaq. According to the Nasdaq's published guidelines,
the Nasdaq would consider delisting the Common Stock if, among other things, the
number of record holders of shares of Common Stock should fall below 300, the
number of publicly held shares of Common Stock (exclusive of holdings of
officers and directors of the Company and their immediate families and other
concentrated holdings of 10% or more) should fall below 500,000, or the
aggregate market value of the
10
<PAGE> 13
publicly held shares should fall below $1 million. According to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1998, there
were approximately 621 holders of record of shares of Common Stock at March 1,
1999. The Company has represented that, as of April 27, 1999, 12,271,928 Shares
were issued and outstanding.
If the Nasdaq were to delist the Common Stock, the market therefor could be
adversely affected. It is possible that such Shares would continue to trade in
the over-the-counter market, and that price quotations would be reported by
other sources. The extent of the public market for the Common Stock and the
availability of such quotations would, however, depend upon the number of
stockholders and/or the aggregate market value of such Shares remaining at such
time, the interest in maintaining a market in such Shares on the part of
securities firms, the possible termination of registration of such Shares under
the Exchange Act and other factors. If, as a result of the purchase of the
Shares pursuant to the Offer or otherwise, the Shares no longer meet the
requirements of the Nasdaq for continued inclusion in the Nasdaq and the Shares
are no longer included in the Nasdaq, the market for, and value of, the Shares
could be adversely affected.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act,
assuming there are no other securities of the Company subject to registration,
would substantially reduce the information required to be furnished by the
Company to its stockholders and to the Commission and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy statement
pursuant to Section 14(a) in connection with stockholders' meetings and the
related requirement of furnishing an annual report to stockholders and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Company. Furthermore, the
ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144 or
Rule 144A promulgated under the Securities Act may be impaired or eliminated. If
registration of the Common Stock under the Exchange Act were terminated, such
Shares would no longer be "margin securities" or be eligible for continued
listing on any stock exchange. Parent has agreed to use its best efforts to the
extent feasible to cause the Shares to continue to be listed on the Nasdaq and
registered under the Exchange Act until the Effective Time. As soon as possible
following the Effective Time, Parent has agreed to use its best efforts to cause
the Shares to be delisted from the Nasdaq and deregistered under the Exchange
Act. If registration of the Shares is not terminated prior to the Merger, then
the Shares will be delisted from the Nasdaq and the registration of the Shares
under the Exchange Act will be terminated following the consummation of the
Merger.
Margin Regulations. The Shares presently are "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of securities. Depending
upon factors similar to those described above regarding listing and market
quotations, it is possible that, following the Offer, the Shares would no longer
constitute "margin securities" for the purposes of the margin regulations of the
Federal Reserve Board and therefore could no longer be used as collateral for
loans made by brokers.
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
General. The information concerning the Company contained in this Offer to
Purchase, including that set forth below under the caption "Selected
Consolidated Financial Information," has been furnished by the Company or has
been taken from or based upon publicly available documents and records on file
with the Commission and other public sources. Neither Parent nor the Purchaser
assumes responsibility for the accuracy or completeness of the information
concerning the Company contained in such documents and records or for any
failure by the Company to disclose events which may have occurred or may affect
the significance or accuracy of any such information but which are unknown to
Parent or the Purchaser.
11
<PAGE> 14
The Company designs, integrates, assembles, markets and supports voice
processing and call processing systems and services which incorporate
prepaid/postpaid applications, voice response, voice recognition,
voice/facsimile messaging, audiotex and interactive computer applications into
both standard products and customized market solutions. The Company also offers
a broad array of telecommunications management services. The Company is a Kansas
corporation with its principal executive offices at 250 International Parkway,
Suite 300, Heathrow, Florida 32746. The telephone number of the Company at such
offices is (407) 357-1000.
Selected Consolidated Financial Information. The table set forth below
includes summary consolidated historical financial information of the Company.
The summary consolidated financial information has been derived from the audited
consolidated financial statements as reported in the Company's Annual Report on
Form 10-K for the year ended December 31, 1998. The summary historical financial
information should be read in conjunction with, and is qualified in its entirety
by reference to, the consolidated financial statements and related notes
included in the Company's Annual Report on Form 10-K. Such reports and other
documents may be inspected and copies may be obtained from the Commission in the
manner set forth in "Available Information."
BRITE VOICE SYSTEMS, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues...................................... $135,715 $103,373 $110,409
Operating income (loss)....................... 2,218 (10,737) 11,699
Net income (loss):............................ 11,682 12,127
Continuing operations...................... 1,773 10,437 5,837
Discontinued operations.................... 11,344 1,245 2,718
-------- -------- --------
Total................................. $ 13,117 $ 11,682 $ 8,555
Diluted earnings per share:................... 0.97 0.71
Continuing operations...................... $ 0.15 $ 0.87 $ 0.48
Discontinued operations.................... 0.92 0.10 0.23
-------- -------- --------
Total................................. $ 1.07 $ 0.97 $ 0.71
Weighted average shares used in computation... 12,310 12,068 12,127
BALANCE SHEET DATA:
Working capital............................... $ 62,037 $ 52,879 $ 37,671
Total assets.................................. $122,119 $104,226 $ 74,493
Long-term debt................................ -- -- --
Stockholders' equity.......................... $ 84,913 $ 70,114 $ 54,181
</TABLE>
Company 1999 Budget. During the course of discussions among Parent, the
Purchaser and the Company that led to the execution of the Merger Agreement (see
Section 11 below), the Company provided the Purchaser and Parent with certain
business and financial information that was not publicly available. Such
information included the Company's preliminary budget for the fiscal year ended
December 31, 1999 (the "Preliminary Budget"), which was based on revenues of
approximately $166 million and operating income of approximately $10.8 million
and earnings per diluted Share of approximately $0.61. The Preliminary Budget
was prepared by the Company's management in the ordinary course of its annual
budgeting process. The Company has informed Parent and the Purchaser that it has
not updated the Preliminary Budget as of the date of this Offer to Purchase.
12
<PAGE> 15
The Preliminary Budget was prepared solely for planning and budgeting
purposes and is not intended to be a forecast and was not prepared with a view
to public disclosure or compliance with published guidelines of the Commission
or the guidelines established by the American Institute of Certified Public
Accountants regarding projections, and is included in this Offer to Purchase
only because it was provided to Parent and the Purchaser. None of Parent, the
Purchaser nor any of their representatives assumes any responsibility for the
accuracy of the Preliminary Budget. While presented with numerical specificity,
the Preliminary Budget is based upon a variety of assumptions (not all of which
were stated therein and not all of which were provided to Parent or the
Purchaser) relating to the business of the Company, which may not be realized
and is subject to significant financial, market, economic and competitive
uncertainties and contingencies which are difficult or impossible to predict
accurately, many of which are beyond the control of the Company and Parent.
There can be no assurance that the results in the Preliminary Budget will be
realized, and actual results may vary materially from those indicated above. The
description of the Preliminary Budget should not be regarded as a representation
by Parent, the Purchaser or any of their respective affiliates or
representatives or by the Company or any of its affiliates or representatives
that the budgeted results will be achieved.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the Commission
relating to its business, financial condition and other matters. Information as
of particular dates concerning the Company's directors and officers, their
remuneration, options granted to them, the principal holders of the Company's
securities and any material interests of such persons in transactions with the
Company is required to be disclosed in proxy statements distributed to the
Company's stockholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
Seven World Trade Center, Suite 1300, New York, NY 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies of such
information should be obtainable by mail, upon payment of the Commission's
customary charges, by writing to the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission also maintains a website at
http://www.sec.gov that contains reports, proxy statements and other
information.
9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER.
Parent, together with its subsidiaries, develops, sells and services call
automation systems with a traditional emphasis on interactive voice response
applications, which allow individuals a self help facility using the keys on
their touch-tone telephones, the dials on their rotary telephones, the keyboards
of their personal computers, credit card terminals or their voices to access
and/or provide information to computer data bases utilized by businesses and
telecommunications companies. Parent's systems are sold under the trade names
"OneVoice" and "InterDial." OneVoice Systems are used by a variety of
enterprises to disseminate and receive information efficiently, allowing
multiple callers simultaneous access to computer data bases without the expense
of maintaining an agent and workstation for each telephone line. InterDial
systems improve call center efficiency by automatically dialing phone numbers
and only transferring a call to an agent if the call is answered and the called
party remains on the phone. Parent's products include software development tools
designed to support a number of diverse product applications and to simplify
system customization. Applications currently function in a wide range of
industries including insurance, banking and financial services,
telecommunications, higher education, help desk, government, utilities,
healthcare, insurance, cable TV, retail and wholesale distribution,
transportation and manufacturing. Parent is a Texas corporation whose offices
are located at 17811 Waterview Parkway, Dallas, Texas 75252. The telephone
number of Parent is (972) 454-8000.
The table set forth below includes summary historical financial information
of Parent. The summary information has been derived from the audited
consolidated financial statements as reported in Parent's Annual Report on Form
10-K for the year ended February 28, 1998 and the unaudited consolidated
financial statements of Parent for the year ended February 28, 1999. In the
opinion of Parent's management, the unaudited financial statements for the year
ended February 28, 1999 reflect all adjustments necessary for a fair statement
of the results of operations for such period. The summary historical financial
information for the three fiscal years ended February 28, 1998 should be read in
conjunction with, and is qualified in its entirety by
13
<PAGE> 16
reference to, the consolidated financial statements and related notes included
in the Parent's Annual Report on Form 10-K.
Such reports and other documents may be inspected and copies may be
obtained from the Commission in the manner set forth in Section 8.
INTERVOICE, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------------------------
FEBRUARY 28, FEBRUARY 28, FEBRUARY 28, FEBRUARY 29,
1999 1998 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
OPERATING DATA:
Net sales................................ $136,904 $102,308 $104,846 $97,103
Income (loss) from operations............ 29,148 (8,427) 17,549 25,055
Net income (loss)........................ 20,193 (5,140) 12,760 17,259
Net income (loss) per share:
Basic................................. 0.70 (0.17) 0.40 0.55
Diluted............................... 0.68 (0.17) 0.39 0.53
BALANCE SHEET DATA:
Total assets............................. $111,486 $ 84,893 $109,240 $89,727
Long-term debt........................... 5 -- -- --
Stockholders' equity..................... 82,529 56,631 86,191 69,561
</TABLE>
The Purchaser. The Purchaser is a Nevada entity, newly formed by Parent for
the purpose of effecting the Offer and the Merger. Parent owns all of the
outstanding capital stock of the Purchaser. It is not anticipated that, prior to
the consummation of the Offer, the Purchaser will have any significant assets or
liabilities or will engage in any activities other than those incident to the
Offer and the Merger and the financing thereof. The offices of the Purchaser are
located at c/o Parent at 17811 Waterview Parkway, Dallas, Texas 75252. The
telephone number of the Purchaser is (972) 454-8000.
For certain information concerning the executive officers and directors of
the Purchaser and Parent, see Schedule I.
Except for 100,000 Shares held by David W. Brandenburg, a member of the
Board of Directors of Parent, and except as otherwise set forth in this Offer to
Purchase, neither the Purchaser nor the Parent nor, to the best knowledge of the
Purchaser or Parent, any of the persons listed on Schedule I, nor any associate
or majority-owned subsidiary of any of the foregoing, beneficially owns or has a
right to acquire any Shares, and neither the Purchaser nor Parent nor, to the
best of knowledge of the Purchaser or Parent, any of the persons or entities
referred to above, nor any of the respective executive officers, directors or
subsidiaries of any of the foregoing, has effected any transaction in Shares
during the past 60 days.
Except as set forth in this Offer to Purchase, neither the Purchaser, nor
the Parent nor, to the best knowledge of the Purchaser or Parent, any of the
persons listed on Schedule I, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement, understanding
or relationship concerning the transfer or the voting of any securities of the
Company, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss or the giving or withholding of proxies.
Except as set forth in this Offer to Purchase, neither the Purchaser, Parent nor
any of their respective affiliates, nor, to the best knowledge of the Purchaser
or Parent, any of the persons listed on Schedule I, has had, since January 1,
1996, any business relationships or transactions with the Company or any of its
executive officers, directors or affiliates that would require reporting under
the rules of the Commission. Except as set forth in this Offer to Purchase,
since January 1, 1996, there have been no contacts, negotiations or transactions
between the Purchaser, Parent, any
14
<PAGE> 17
of their respective affiliates or, to the best knowledge of the Purchaser or
Parent, any of the persons listed on Schedule I, and the Company or its
affiliates concerning a merger, consolidation or acquisition, tender offer or
other acquisition of securities, election of directors or a sale or other
transfer of a material amount of assets.
10. SOURCE AND AMOUNT OF FUNDS.
In addition to the consideration in the Merger consisting of Parent Common
Stock, the total amount of funds required by the Purchaser to purchase Shares
pursuant to the Offer and to pay fees and expenses of Parent and the Purchaser
related to the Offer and the Merger is estimated to be approximately $135
million.
Parent has entered into a commitment letter (the "Commitment Letter") with
Bank of America National Trust and Savings Association ("Bank of America") and
NationsBanc Montgomery Securities LLC ("Montgomery Securities") pursuant to
which, subject to the terms and conditions thereof, Bank of America will provide
the Purchaser (the "Borrower") financing in an aggregate amount of up to $150
million (the "Facilities").
The Facilities will be guaranteed by the Parent and each material existing
and future direct and indirect domestic subsidiary of Parent, excluding the
Purchaser; provided that the Company and its subsidiaries will not be required
to guarantee the Facilities until the consummation of the Merger. Bank of
America has committed to lend the full amount of the Facilities upon the terms
and subject to the conditions set forth in the Commitment Letter, and Montgomery
Securities has agreed to use its best efforts to form a syndicate of financial
institutions (the "Lenders") reasonably acceptable to Borrower, Parent and Bank
of America, upon the terms and subject to the conditions set forth in the
Commitment Letter.
Pursuant to the Commitment Letter, the Facilities are expected to consist
of: (i) a $125 million tender facility (the "Term Loan Facility") which will be
available to the Purchaser in order to fund the Offer and the Merger and (ii) a
$25 million revolving credit facility (the "Revolving Credit Facility").
The following is a summary of the principal terms of the Facilities based
upon the Commitment Letter. This summary is qualified in its entirety by
reference to the Commitment Letter, a copy of which has been filed as an exhibit
to the Schedule 14D-1 filed with the Commission in connection with the Offer.
The Commitment Letter provides that the commitments under the Commitment
Letter will terminate unless the Facilities are closed on or prior to June 30,
1999. The Facilities will mature on August 31, 2003, and the Term Loan Facility
will be subject to quarterly amortization with the first payment due on May 31,
2000. In addition, the Facilities will be subject to certain mandatory
prepayments and commitment reductions tied to the sale of assets, the issuance
of debt, the issuance of equity and the generation of excess cash flow for a
fiscal year. Certain of these prepayment and commitment reduction requirements
are limited upon the satisfaction of certain financial ratios.
The amounts borrowed pursuant to the Revolving Credit Facility and the Term
Loan Facility will bear interest at a rate equal to either LIBOR plus the
applicable margin or the Alternate Base Rate (to be defined as the higher of (i)
the Bank of America prime rate or (ii) the federal funds rate plus 0.50%) plus
the applicable margin. The applicable margin during the period from the closing
of the Facilities until receipt of Parent's Form 10-Q for the quarter ended
November 30, 1999 will be 2.50% and 1.25% for LIBOR and Alternate Base Rate
loans, respectively. Thereafter, the applicable margin in each case will be
determined in accordance with a schedule to the Facilities and will be
determined by reference to a ratio of Parent's funded debt to EBITDA (as defined
in the Facilities).
The Facilities will contain certain representations and warranties, certain
negative and affirmative covenants, certain conditions and events of default
which are customarily required for similar financing. Such covenants will
include, among others, restrictions and limitations on liens and negative
pledges; limitations on mergers, consolidations and sales of assets; limitations
on incurrence of debt; limitations on dividends, stock redemptions and the
redemption and/or prepayment of other debt; limitations on investments and
acquisitions (other than the acquisition of the Company); and limitations on
capital expenditures. Key financial covenants based on Parent's consolidated
financial statements include minimum net worth, maximum leverage ratio and
minimum fixed charge coverage ratio.
15
<PAGE> 18
The Facilities will require a first priority perfected security interest in
(i) all of the capital stock of each of the domestic subsidiaries of Parent
(including, without limitation, the Purchaser), and 65% of the capital stock of
each first tier foreign subsidiary of Parent, which capital stock shall not be
subject to any other lien or encumbrance and (ii) subject to permitted liens,
all other present and future material assets and properties of Parent and its
material domestic subsidiaries (including, without limitation, accounts
receivable and proceeds, inventory, real property, machinery and equipment,
contracts, trademarks, copyrights, patents, license rights and general
intangibles), including, without limitation, the Company and its subsidiaries;
provided that the Company and its subsidiaries shall not be required to pledge
such assets and properties until completion of the Merger. Without limiting the
foregoing, but subject to the requirements of Regulation U of the Federal
Reserve Board, all capital stock of the Company owned by the Purchaser or Parent
shall be pledged as collateral for the Facilities.
The funding of the Facilities will be subject to customary closing
conditions, including, among others, the execution of satisfactory
documentation, the receipt of all necessary governmental approvals, and no
material adverse change in the business, assets, liabilities (actual or
contingent), operations, condition (financial or otherwise), or prospects of
Parent and its subsidiaries (taken as a whole) or the Company and its
subsidiaries (taken as a whole). Parent knows of no fact or circumstance that is
likely to result in the conditions, if any, set forth in the Commitment Letter
not being satisfied. Although Parent expects that the Facilities will be
available to provide funds for the consummation of the Offer and the Merger in
accordance with their respective terms, there can be no assurance that the
Facilities will be consummated. The Offer is conditioned on the funding of the
Facilities.
In connection with the Facilities, the Borrower has agreed to pay the
Lenders certain commitment, underwriting, administrative and termination fees,
to reimburse the Lenders for reasonable out-of-pocket fees and expenses, whether
or not the Facilities close, and to provide certain indemnities, as is customary
for commitments such as the Facilities.
Parent anticipates that indebtedness incurred through borrowings under the
Facilities in connection with the Offer and the Merger will be repaid from a
variety of sources, which may include funds generated internally by Parent and
its subsidiaries and following the Merger, funds generated by the Company, bank
financing, and the public or private sale of debt or equity securities. No
decision has been made concerning the method Parent will employ to repay such
indebtedness. Such decision will be made based on Parent's review from time to
time of the advisability of particular actions, as well as on prevailing
interest rates and financial and other economic conditions and such other
factors as Parent may deem appropriate. Parent expressly reserves its right to
obtain financing for the transaction through alternative sources.
Upon consummation of the Merger, the Purchaser will be merged into the
Company, which will then be obligated as the Borrower under the Facilities.
11. BACKGROUND OF THE OFFER; PURPOSE OF THE OFFER AND THE MERGER; THE
MERGER AGREEMENT AND CERTAIN OTHER AGREEMENTS.
The following description was prepared by Parent and the Company.
Information about the Company was provided by the Company and neither the
Purchaser nor Parent takes any responsibility for the accuracy or completeness
of any information regarding meetings or discussions in which Parent or its
representatives did not participate.
BACKGROUND OF THE OFFER.
In late 1997 David Brandenburg, a director of Parent, and Dan Hammond,
Parent's Chairman and Chief Executive Officer, discussed the possibility of
considering a business combination with the Company. Following up on such
discussions, on December 2, 1997, Mr. Hammond held a meeting in Dallas, Texas
with representatives of Parent and the Company to determine if there were any
interest between the two companies for a strategic combination. Representatives
of the Parent included Dan Hammond, Mike Barker, then President of Parent, and
Rob Graham, Chief Financial Officer. Representatives of the Company included
David Gergacz, then President of the Company, Glenn Etherington, Chief Financial
Officer, and Ray Naeini, Executive Vice President. The parties executed a
confidentiality agreement with respect to matters that would be discussed at the
meeting. During the meeting, the participants discussed potential synergies and
strategic
16
<PAGE> 19
advantages of combining operations. Subsequent to the meeting, however, no
further meetings were scheduled.
On February 13, 1998, Rob Graham and Glenn Etherington met in Orlando,
Florida to continue discussions and to explore potential preliminary cost saving
synergies that might result in a strategic combination of Parent and the
Company.
In January 1999 Parent, as part of its corporate strategic planning
process, concluded that it should explore potential strategic combinations or
technology alliances with third parties in order to further enhance shareholder
value. Parent engaged Montgomery Securities to identify potential candidates for
such strategic combinations and/or technology alliances. It was during this
process that Parent decided to determine if the Company had any interest in
resuming discussions.
Dan Hammond called Stan Brannan, the Company's Chief Executive Officer, on
January 15, 1999 and inquired if there were any interest on the part of the
Company in resuming discussions concerning a potential strategic combination of
Parent and the Company.
On January 28, 1999, Stan Brannan traveled to Dallas to hold preliminary
discussions with Dan Hammond and Rob Graham. At this meeting, the parties
discussed the potential acquisition of the Company by Parent, cost savings to be
achieved by such a combination and other potential operating synergies. At the
conclusion of the meeting, Messrs. Hammond and Brannan agreed that they would
each convey their interests in pursuing such combination to their respective
Boards of Directors to determine if there were further interest in pursuing more
discussions. Messrs. Hammond and Brannan agreed to hold an additional meeting in
Orlando assuming the respective Boards of Directors desired for management to
pursue further discussions.
On February 9, 1999, at a regularly scheduled meeting of Parent's Board of
Directors, the Board discussed the potential combination of the operations of
the Parent and the Company and concluded it would be desirable to continue
discussions between the two companies.
Dan Hammond, Rob Graham and Dave Berger, InterVoice's current President and
Chief Operating Officer, attended a meeting in Orlando on February 22, 1999. The
Company was represented by Stan Brannan, Ray Naeini and Glenn Etherington. At
this meeting, the parties expressed a continuing interest in pursuing a
combination of Parent and the Company pursuant to which Parent would acquire all
of the outstanding Common Stock of the Company in exchange for Parent Common
Stock, although no further specifics regarding consideration were discussed.
On February 26, 1999, Parent engaged Montgomery Securities specifically to
advise Parent with respect to a proposed combination of Parent and the Company.
After discussions with, and advice from, Montgomery Securities, Parent decided
that an all cash acquisition of the Company would be preferable to a stock for
stock acquisition.
On March 10, 1999, representatives of Parent and the Company met in
Atlanta, Georgia to discuss in more detail each party's interest in pursuing a
business combination. Management representatives from both the Parent and the
Company attended the meeting along with representatives from Montgomery
Securities, and representatives from Piper Jaffray, financial advisor to the
Company. Also in attendance were representatives from Thompson & Knight, P.C.,
the Parent's legal advisors, and Triplett, Woolf & Garretson, LLC, the Company's
legal advisors. At this meeting, the parties discussed the potential structure
of a combination of Parent and the Company whereby Parent would acquire all of
the outstanding Common Stock of the Company for cash in two steps: (1) a tender
offer for cash for all shares of the Company followed by (2) a cash merger for
any shares not tendered. The Company indicated that it would be interested in
exploring such a combination with several conditions, including that any
transaction proposed would need to offer a premium for the Company. The parties
discussed a range of prices that Parent, subject to due diligence and other
conditions, would be willing to pay for the Company. These discussions covered a
range from $12 to $14 for each Share of the Company's Common Stock. By the end
of the meeting, the parties narrowed the range to between $13 and $14 per Share.
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<PAGE> 20
On March 15, 1999, the parties executed a confidentiality agreement in
which both parties agreed to negotiate exclusively with the other for a 45 day
period provided that the Company could meet with a third party strategic
candidate already scheduled to be held March 18, 1999 and provided further that,
prior to the close of business on March 19, 1999 the Company would notify the
Parent that the Company had ceased and terminated such other discussions or that
it intended to continue such discussions, in which latter event the
confidentiality and exclusive negotiation agreement would terminate. The Company
ended such discussions with the third party on March 19, 1999.
On March 15 and 16, 1999, management groups from both Parent and the
Company met in Orlando near the Company's offices to begin discussions and the
conduct of preliminary due diligence concerning research and development plans,
manufacturing plans and sales plans with respect to each company's products. The
representatives of Parent were Dan Hammond, Rob Graham, David Berger, and Dwain
Hammond, Senior Vice President of Research and Development, Phil Walden, Vice
President of Manufacturing, and Greg Smith, Senior Vice President of Sales and
Marketing. Representatives of the Company included Stan Brannan, Glenn
Etherington and Scotty Walsh, Executive Vice President of Sales, and Leon
Ferber, Vice President of Special Projects. The due diligence meetings continued
among the above representatives with additional management representatives from
both companies in Orlando on March 19, 20, and 21, 1999. The parties discussed
in some detail the potential of combining operations and effecting cost savings
by reducing and/or avoiding expenses, as well as cost reductions in materials
used to manufacture products. Parent and the Company agreed to begin legal and
accounting and tax due diligence as soon as reasonably practicable. Messrs.
Hammond and Brannan agreed that final pricing of the transaction within the $13
to $14 range would be determined by the outcome of the due diligence reviews and
further negotiations.
On March 24, 1999, representatives of the parties' legal advisors, tax
advisors and accounting advisors initiated due diligence in the respective areas
represented in Orlando. Due diligence continued in Orlando with respect to the
books and records of the Company for approximately one week. Following
commencement of the Orlando due diligence, Parent's representatives commenced
due diligence relating to the Company's operations in Manchester, United
Kingdom. Parent and its legal advisors also distributed a preliminary draft of
the definitive merger agreement to the Company and its legal and financial
advisors.
On March 27, 1999, Parent held a special Board meeting in Dallas, Texas to
discuss the status of discussions and negotiations, due diligence, and financing
for the acquisition by Parent. All directors of Parent attended the meeting in
person and by telephone. In addition, representatives of Montgomery Securities,
Thompson & Knight, Ernst & Young, Parent's certified public accountants,
Fulbright & Jaworski, Parent's intellectual property legal advisors, and
representatives from Bank of America from which the Company was seeking
acquisition financing, attended the meeting. The discussion included the results
of due diligence to date and an overview of the Company, as well as a
description of various aspects of its operations, financial condition and market
position. Parent's Board of Directors engaged in extensive discussions
concerning the anticipated synergies that might be realized from a combination
with Parent, consisting primarily of certain corporate and operational overhead
reductions, marketing cost reductions and enhanced staff utilization.
Representatives of Bank of America discussed its ability to finance the proposed
acquisition and reported that available bank financing would not be sufficient
to support a transaction calling for all cash consideration. Extensive
discussions with the bank representatives were conducted by the Board and
various alternative structures for the proposed acquisition were discussed,
including consideration consisting of part cash and part Parent Common Stock.
Management was directed to continue negotiations with Bank of America to attempt
to obtain an acceptable financing commitment. Management was also directed to
continue to negotiate with the Company to attempt to find an acceptable
structure for the transaction within the confines of the available financing.
On April 1, 1999, Dan Hammond called Stan Brannan to propose a modified
structure to the all cash transaction the parties had been previously
discussing. By this time, Parent had concluded that it would be able to obtain
sufficient financing from Bank of America to offer the consideration for the
proposed acquisition in the range between $13 and $14 per Share as previously
agreed by limiting the cash portion of the proposed consideration to
approximately $9 to $10 per Share with the remaining consideration to consist of
Parent Common Stock. Mr. Hammond said that Parent would still be prepared to
conduct a tender offer for the cash
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<PAGE> 21
portion of the transaction followed by a merger in which holders of Shares that
had not been purchased in the tender offer would receive Parent Common Stock or
a combination or any remaining cash and Parent Common Stock.
On April 2, 1999, Parent offered the Company $13.00 per share consisting of
$10.00 per share in cash and $3.00 per Share in Parent Common Stock. This offer
was relayed to the Company through representatives of Piper Jaffray during a
telephone call from a representative of Montgomery Securities.
The Company agreed to move forward with negotiations subject to conducting
its own due diligence of Parent and with the understanding that negotiations
concerning the actual consideration and the mix of cash and stock for the
transaction would continue. On April 6, 1999, Rob Graham sent Glenn Etherington
an e-mail whereby Parent offered $13.50 per Share, consisting of $9.00 to $9.50
in cash and $4.00 to $4.50 in Parent Common Stock. The proposed offer assumed
that a warrant issued by the Company to AT&T Corp. and all outstanding stock
options would be repurchased or canceled by the Company.
On April 10, 11 and 12, 1999, the Company conducted due diligence with
respect to Parent in Dallas, Texas. Participants in these sessions included
representatives of the Company's management and financial, legal and accounting
advisors. In addition, representatives from Parent's proposed lending group,
Bank of America, participated in due diligence of the Company as well as due
diligence of Parent. During these meetings, Parent, the Company and their
respective legal and financial advisors continued negotiating the merger
agreement.
Extensive negotiations were conducted from March 31 through April 14, 1999,
the date prior to Parent's regularly scheduled Board of Directors meeting. At
the April 15, 1999 Board of Directors meeting, management made a presentation to
the Board about the progress of the negotiations and the probable structure of
the transaction which would be in the form of a cash tender offer up to the
extent of the Company's available cash from its lending group (and its own
resources) followed by a merger utilizing Parent Common Stock and any remaining
cash for the shares of Common Stock of the Company not purchased in the tender
offer. Drafts of the merger agreement and related documents were distributed to
Board members and extensive discussion ensued concerning the terms and
conditions negotiated to date. Parent's legal advisors answered questions of
Board members with respect to certain issues involved in the proposed
transaction and discussed extensively other aspects of the proposed transaction.
The Board of Directors preliminarily approved the transaction structure as had
been negotiated to date and directed management to continue negotiations with
the Company in an attempt to finalize the terms of the proposed agreement,
including the mix of the cash and stock components of the consideration. At the
meeting, representatives of Montgomery Securities discussed the financial
aspects of the proposed transaction. Also at the Board meeting, representatives
of Bank of America delivered a signed commitment letter subject to completion of
due diligence, which provided for acquisition financing to Parent. Management
was directed to continue negotiations with the Company to attempt to finalize
the terms of the merger agreement, including negotiations with respect to price
and the mix of consideration between cash and Parent Common Stock.
Following the April 15, 1999 Board of Directors meeting, further extensive
negotiations concerning the terms of the acquisition agreement, the actual
consideration for the Company's Shares and the mix of the cash and stock
components of the consideration were conducted. In a telephone conference on
April 21, 1999 among Mr. Hammond, Mr. Graham, Mr. Brannan and Mr. Etherington,
it was agreed that the price to be paid to AT&T in cancellation of its
outstanding warrant to purchase the Company's Common Stock would be split by the
two companies, resulting in a revised offer price of $13.40 per Share,
consisting of $10.00 per Share in cash and $3.40 per Share in Parent Common
Stock. The transaction was still structured as a tender offer whereby the cash
portion of the transaction would be distributed followed by a merger in which
the Shares of Common Stock not purchased in the tender offer would receive
shares of Parent Common Stock or a combination of any remaining cash and Parent
Common Stock. The number of shares of Parent Common Stock to be issued in the
merger would be determined by an exchange ratio based on the trailing 25-day
average price of Parent Common Stock collared (subject to certain exceptions)
between $8.00 and $14.00.
On April 22, 1999, at a telephone meeting of the Board of Directors of
Parent, Mr. Hammond discussed the status of the negotiations to date and
informed the Board that there were several remaining open issues
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<PAGE> 22
that needed to be negotiated prior to the parties reaching agreement with
respect to the merger agreement. Mr. Hammond emphasized that the issues related
primarily to certain due diligence items and price collar mechanisms with
respect to the merger consideration. The Board authorized management to proceed
with negotiations through the weekend to attempt to finalize the merger
agreement.
After resolving the remaining open issues, on April 26, 1999, at a
telephone meeting of the Board of Directors of Parent, the Board of Directors
unanimously approved the Merger Agreement and the transactions contemplated
thereby, including the Offer and the Merger.
At a meeting of the Board of Directors of the Company held during the
evening of April 26, 1999, the Board of Directors unanimously approved the
Merger Agreement and the transactions contemplated thereby, including the Offer
and the Merger, and determined that the terms of the Offer and the Merger are
fair to, and in the best interests of, the holders of the Common Stock, and
unanimously recommend that stockholders of the Company accept the Offer and
tender their Shares. On April 26, 1999 based upon and subject to certain matters
stated in the opinion, Piper Jaffray delivered to the Company's Board of
Directors its oral opinion, subsequently confirmed by its written opinion dated
that date, to the effect that the consideration to be received by the holders of
Common Stock pursuant to the Offer and under the terms of the Merger Agreement
is fair to such holders (other than Parent and its affiliates), from a financial
point of view as of the date of the opinion. The written opinion of Piper
Jaffray is set forth in full as an exhibit to the Company's Schedule 14D-9,
which is being mailed to stockholders of the Company. Stockholders of the
Company are urged to read that opinion in its entirety.
Following the approval of the Board of Directors, Parent, the Purchaser and
the Company executed and delivered the Merger Agreement as of April 27, 1999.
On May 3, 1999, the Purchaser and Parent commenced the Offer.
PURPOSE OF THE OFFER AND THE MERGER.
The purpose of the Offer is for the Purchaser to acquire a substantial
majority of the outstanding shares of Common Stock. Upon completion of the
Offer, it is expected that the Purchaser will own approximately 75% of the
outstanding shares of Common Stock. The Offer is being made pursuant to the
Merger Agreement and is intended to increase the likelihood that the Merger will
be effected. The purpose of the Merger is to acquire all outstanding Shares not
purchased pursuant to the Offer. The transaction is structured as a merger in
order to ensure the acquisition by Parent of all the outstanding Shares.
Under the KGCC, the approval of the Company's Board and the affirmative
vote of the holders of a majority of the outstanding shares of Common Stock are
required to approve and adopt the Merger Agreement and the transactions
contemplated thereby, including the Merger. The Joint Proxy Statement/
Prospectus containing detailed information concerning the Merger will be
furnished to stockholders of the Company in connection with a special meeting to
be called by the Company to vote on the Merger. In the Merger Agreement, the
Company has agreed to take all action necessary to convene a special meeting of
its stockholders as promptly as practicable after consummation of the Offer for
the purpose of considering and taking action on the Merger Agreement and the
transactions contemplated thereby.
If the Merger is consummated, Parent's common equity interest in the
Company would increase to 100% and Parent would be entitled to all benefits
resulting from that interest. These benefits include complete management with
regard to the future conduct of the Company's business and any increase in its
value. Similarly, Parent will also bear the risk of any losses incurred in the
operation of the Company and any decrease in the value of the Company.
Stockholders of the Company who sell their Shares in the Offer will cease
to have any equity interest in the Company and to participate in its earnings
and any future growth. If the Merger is consummated, the Company's stockholders
will no longer have an equity interest in the Company and instead will have only
the right to receive the Merger Consideration pursuant to the Merger Agreement
or to exercise statutory appraisal rights, if any, under Kansas law. See Section
12. Similarly, the stockholders of the Company will not bear the risk of any
decrease in the value of the Company after selling their Shares in the Offer or
the subsequent
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Merger, except to the extent that the price of the Parent Common Stock they
acquire in the Merger is adversely affected by any such decrease in value.
The primary benefits of the Offer and the Merger to the stockholders of the
Company are that such stockholders are being afforded an opportunity to sell
Shares for cash at a price which represents a premium of approximately 27% over
the closing market price of the Common Stock on the last full trading day prior
to the initial public announcement that the Company, Parent and the Purchaser
executed the Merger Agreement, and a more substantial premium over recent
historical trading prices.
MERGER AGREEMENT
As of April 27, 1999, Parent, the Purchaser and the Company entered into
the Merger Agreement, pursuant to which the Purchaser agreed to make the Offer.
The following description of the Merger Agreement does not purport to be
complete and is qualified by reference to the text of the Merger Agreement, a
copy of which is filed as Exhibit(c)(1) to the Schedule 14D-1 and incorporated
herein by reference. Capitalized terms not otherwise defined herein have the
meanings set forth in the Merger Agreement. The Merger Agreement may be examined
and copies may be obtained at the places and in the manner set forth in Section
8 of this Offer to Purchase.
The Offer. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, the Purchaser will purchase 9,158,155
Shares validly tendered pursuant to the Offer. If more than 9,158,155 Shares are
validly tendered prior to the Expiration Date and not withdrawn, the Purchaser
will, upon the terms and subject to the conditions of the Offer, accept
9,158,155 Shares for payment on a pro rata basis, with adjustments to avoid
purchases of fractional shares, based upon the number of shares validly tendered
prior to the Expiration Date and not withdrawn by each tendering stockholder.
Because of the difficulty of determining precisely the number of shares validly
tendered and not withdrawn, if proration is required, the Purchaser would not
expect to announce the final results of the proration until at least seven
Nasdaq trading days after the Expiration Date. Preliminary results of proration
will be announced by press release as promptly as practicable after the
Expiration Date. Holders of shares of Common Stock may obtain such preliminary
information from the Depositary, and may also be able to obtain such preliminary
proration information from their brokers. The Purchaser will not pay for any
shares of Common Stock accepted for payment pursuant to the Offer until the
final proration factor is known. Subject to the terms of the Merger Agreement,
the Purchaser reserves the right (but shall not be obligated) to accept for
payment more than 9,158,155 Shares pursuant to the Offer, although the Purchaser
has no present intention of doing so.
The obligation of the Purchaser to accept for payment and pay for Shares
tendered is subject to there being tendered, and not withdrawn prior to the
expiration of the Offer, 9,158,155 Shares, and to the satisfaction of the other
conditions set forth in Section 14 hereof. The Merger Agreement provides that
the Purchaser may not amend or waive the Minimum Condition (other than at the
Purchaser's option, to lower the Minimum Condition to a majority of the issued
and outstanding Common Stock on a fully diluted basis), decrease the Offer Price
or decrease the number of Shares sought or otherwise amend any other condition
of the Offer in any manner adverse to the holders of the Shares without the
prior written consent of the Company.
Designation of Directors. The Merger Agreement provides that, promptly
after the purchase of Shares pursuant to the Offer (the Minimum Condition having
been satisfied), Parent shall be entitled to designate directors on the Board of
Directors of the Company as will give Parent representation proportionate to its
ownership interest. To this end, the Company has agreed to expand the size of
the Board of Directors of the Company or to seek the resignation of one or more
of the current directors, as requested by Parent. However, in the event that
Parent's designees are elected to the Board of Directors of the Company, and
until the Effective Time, the Board of Directors must include at least one
director who is a director as of the date of execution of the Merger Agreement
and who is neither an officer of the Company nor a designee, stockholder,
affiliate or associate of Parent (one or more of such directors being the
"Independent Directors"). If the number of Independent Directors is reduced
below two, the remaining Independent Director shall be entitled
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to designate a person to fill such vacancy who shall be deemed an Independent
Director or, if no Independent Directors remain, the other directors shall
designate one person to fill a vacancy created by resignation of one or more
directors, who is neither an officer of the Company nor a designee, stockholder,
affiliate or associate of the Purchaser, such person so designated being deemed
an Independent Director. The Company's obligation to appoint Parent's designees
to the Board of Directors of the Company is subject to compliance with Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. Following the
election of Parent's designees, any action to amend or terminate the Merger
Agreement on behalf of the Company, to exercise or waive any of the Company's
rights, benefits or remedies thereunder, to extend the time for the performance
of the Purchaser's obligations thereunder, to amend the Company's Articles of
Incorporation or Bylaws or to take other action by the Company under the Merger
Agreement shall be effected only by the action of a majority of the directors of
the Company then in office who are Independent Directors.
The Merger. The Merger Agreement provides that at the Effective Time the
Purchaser will be merged with and into the Company, and the Company will
continue as the Surviving Corporation. The Merger will become effective at the
time of filing with the Secretary of State of the State of Kansas of a
Certificate of Merger and the filing with the Secretary of State of the State of
Nevada of Articles of Merger, or at such later time as may be specified in the
Certificate of Merger and the Articles of Merger. The parties expect to file the
Certificate of Merger and the Articles of Merger as soon as practicable
following the closing of the Merger, which will take place on the second
business day after the conditions to the parties' obligation to effect the
Merger have been satisfied or waived, unless another date is otherwise agreed.
Each Share issued and outstanding immediately prior to the Effective Time
(other than Excluded Shares) shall be converted into the right to receive the
Merger Consideration calculated under either method (1) or (2), as applicable:
(1) If the Purchaser purchases 9,158,155 Shares in the Offer (the
"Cash Share Number"), or, in the sole discretion of the Purchaser, more
than the Cash Share Number, that number of fully paid and nonassessable
shares of Parent Common Stock equal to the quotient of (x) $13.40 divided
by (y) the average of the per share closing price of the Parent Common
Stock on the Nasdaq for the 25 trading days immediately preceding the
Effective Time (the "Average Trading Price"), provided that, for purposes
of the Merger Agreement, the Average Trading Price shall be at least equal
to the Lower Collar (as defined below) and shall not exceed $14.00 per
share; or
(2) If the Purchaser lowers the Minimum Condition to a majority of the
issued and outstanding Common Stock on a fully diluted basis and the number
of Shares purchased in the Offer is less than the Cash Share Number, (a) an
amount in cash equal to the quotient of (w) the difference between (i) the
product of $13.40 multiplied by the Cash Share Number and (ii) the
aggregate purchase price for the number of Shares actually purchased in the
Offer, divided by (x) a number of shares equal to (A) the total number of
shares of Common Stock issued and outstanding immediately prior to the
Effective Time (B) less the Excluded Shares (C) plus the Dissenting Shares
(such quotient, referred to as the "Cash Amount"), plus (b) that number of
shares of Parent Common Stock, together with associated Rights, equal to
the quotient of (y) the difference between $13.40 and the Cash Amount,
divided by (z) the Average Trading Price.
The term "Lower Collar" means $8.00, provided, however, if a Lower
Collar of $8.00 would result in the issuance of more than 5,719,877 shares
of Parent Common Stock in the Merger (assuming for purposes of this
calculation that all outstanding options under the Company Stock Plans (as
defined below) that shall not have been cancelled or repurchased by the
Company pursuant to the Merger Agreement at or prior to the completion of
the Offer are exercised in full immediately prior to the Effective Time and
there are no Dissenting Shares (the "Exercise/No Dissenters Presumption")),
the Lower Collar shall be an amount per share equal to the product of (i)
$8.00 multiplied by (ii) a fraction of which (A) the numerator is the total
number of shares of Parent Common Stock that would be issued in the Merger
if the Lower Collar were $8.00, assuming the Exercise/No Dissenters
Presumption, and (B) the denominator is 5,719,877.
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The Excluded Shares (other than the Dissenting Shares) will be cancelled
and cease to exist. Each share of common stock of the Purchaser issued and
outstanding immediately prior to the Effective Time will automatically be
converted into one share of Common Stock of the Surviving Corporation.
The Merger Agreement provides that the Articles of Incorporation and Bylaws
of the Company shall be the Articles of Incorporation and Bylaws of the
Surviving Corporation. The Articles of Incorporation of the Company will be
amended immediately prior to the Effective Time to reduce the number of shares
which the Surviving Corporation will have the authority to issue to 25,000. The
Merger Agreement also provides that the directors and officers of the Purchaser
at the Effective Time will be the directors and officers of the Surviving
Corporation.
The respective obligations of Parent and the Purchaser, on the one hand,
and the Company, on the other hand, to effect the Merger are subject to the
satisfaction on or prior to the Closing Date (as defined in the Merger
Agreement) of each of the following conditions: (i) the Merger Agreement shall
have been approved and adopted by the requisite vote of the holders of Shares in
order to consummate the Merger; (ii) no statute, rule or regulation shall have
been enacted or promulgated by any governmental authority which prohibits the
consummation of the Merger, and there shall be no order or injunction of a court
of competent jurisdiction in effect precluding the consummation of the Merger;
(iii) Parent or the Purchaser or their affiliates shall have made, or caused to
be made, the Offer and shall have purchased 9,158,155 Shares pursuant to the
Offer, unless such failure to purchase is a result of a breach of Parent's and
the Purchaser's obligations under the Merger Agreement; (iv) the registration
statement of which the Joint Proxy Statement/Prospectus is a part shall have
been declared effective by the Commission under the Securities Act and no stop
order suspending the effectiveness of such registration statement shall have
been issued by the Commission and no proceedings for that purpose and no similar
proceeding in respect of the Joint Proxy Statement/Prospectus shall have been
initiated or threatened by the Commission, and (v) the applicable waiting period
under the HSR Act shall have expired or been terminated. The obligation of
Parent and the Purchaser to effect the Merger is further subject to the
condition that the Warrant (as defined herein) has been repurchased by the
Company.
Recommendation. The Company represents in the Merger Agreement that the
Board of Directors of the Company has (i) determined that each of the Merger and
the Offer is fair to the stockholders of the Company and (ii) resolved to
recommend acceptance of the Offer and approval and adoption of the Merger
Agreement by the Company's stockholders. The Company has agreed to file a
Solicitation/Recommendation Statement on Schedule 14D-9 containing such
recommendations with the Commission and to mail such Schedule 14D-9 to the
stockholders of the Company contemporaneous with the commencement of the Offer.
Interim Operations; Covenants. Pursuant to the Merger Agreement, the
Company has agreed that, except (i) as expressly contemplated by the Merger
Agreement, (ii) as set forth in Section 5.2 of the Company Disclosure Schedules
to the Merger Agreement, or (iii) as agreed to in writing by Parent, after the
date of execution of the Merger Agreement, and prior to the time the designees
of the Purchaser constitute a majority of the Company's Board of Directors, (a)
the business of the Company will be conducted only in the ordinary and usual
course, and to the extent consistent therewith, the Company will use its
reasonable best efforts to preserve its business organization intact and
maintain its existing relations with customers, suppliers, employees, creditors
and business partners; (b) the Company will not, directly or indirectly, (i)
except upon exercise of options or other rights to purchase shares of Common
Stock pursuant to options outstanding on the date of the Merger Agreement,
issue, sell, transfer or pledge, or agree to sell, transfer or pledge, any
treasury stock of the Company beneficially owned by it, (ii) amend its Articles
of Incorporation or Bylaws or similar organizational documents; or (iii) split,
combine or reclassify the outstanding Shares of the Company; (c) neither the
Company nor any of its subsidiaries shall (i) declare, set aside or pay any
dividend or other distribution payable in cash, stock or property with respect
to its capital stock, (ii) issue, sell, pledge, dispose of or encumber any
additional shares of, or securities convertible into or exchangeable for, or
options (including any automatic grants of options under the Company Stock
Plans), warrants, calls, commitments or rights of any kind to acquire, any
shares of capital stock of any class of the Company or its subsidiaries, other
than (A) Shares reserved for issuance on the date of the Merger Agreement
pursuant to the exercise of the options outstanding on the date of the Merger
Agreement and (B) Shares issued under the Company's Employee Stock Purchase Plan
if the Offer extends beyond June 30, 1999, (iii) transfer, lease, license, sell,
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mortgage, pledge, dispose of, or encumber any assets, other than in the ordinary
and usual course of business and consistent with past practice, or incur or
modify any indebtedness or other liability, other than in the ordinary and usual
course of business and consistent with past practice; or (iv) redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock other
than as provided in the Merger Agreement; (d) neither the Company nor any of its
subsidiaries shall make any change in the compensation payable or to become
payable by the Company to any of its officers, directors, employees, agents or
consultants (other than in ordinary course) or to persons providing management
services, enter into or amend any employment, severance, consulting, termination
or other agreement or plan or make any loans to any of its officers, directors,
employees, affiliates, agents or consultants or make any change in its existing
borrowing or lending arrangements for or on behalf of any of such persons
pursuant to an employee benefit plan; (e) neither the Company nor any of its
subsidiaries shall pay or make any accrual or arrangement for payment of any
pension, retirement allowance or other employee benefit pursuant to any existing
plan, agreement or arrangement to any officer, director, employee, or affiliate
or pay or agree to pay or make any accrual or arrangement for payment to any
officers, directors, employees or affiliates of the Company of any amount
relating to unused vacation days (other than in the ordinary course), adopt or
pay, grant, issue, accelerate or accrue salary or other payments or benefits
pursuant to any pension, profit-sharing, bonus, extra compensation, incentive,
deferred compensation, stock purchase, stock option, stock appreciation right,
group insurance, severance pay, retirement or other plan, agreement, or
arrangement, or any employment or consulting agreement with or for the benefit
of any director, officer, employee, agent or consultant, or amend in any
material respect any such existing plan, agreement or arrangement in a manner
inconsistent with the foregoing; except that the Company and its subsidiaries
may continue to make quarterly bonus payments to certain key employees
consistent with past business practice in an aggregate amount not to exceed $1.8
million; (f) the Company shall not modify, amend or terminate any of its
material contracts or waive, release or assign any material rights or claims,
except in the ordinary course of business and consistent with past practice; (g)
neither the Company nor any of its subsidiaries will cause any insurance policy
naming it as a beneficiary or a loss payee to be canceled or terminated without
notice to Parent; (h) neither the Company nor any of its subsidiaries will incur
or assume any long-term debt, or except in the ordinary course of business and
in an amount consistent with past practice, incur or assume any short-term
indebtedness; assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other person, except in the ordinary course of business and consistent with
past practice; make any loans, advances or capital contributions to, or
investments in, any other person; or enter into any material commitment or
transaction (including, but not limited to, any borrowing, capital expenditure
or purchase, sale or lease of assets or real estate) or any agreement to develop
customized software products out of the ordinary course of business related to
any maintenance, support or other agreement; (i) neither the Company nor any of
its subsidiaries will change any of the accounting methods used by it unless
required by generally accepted accounting principles, make any material tax
election, change any material tax election already made or settle any tax audit;
(j) neither the Company nor any of its subsidiaries will pay, discharge or
satisfy any claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction of any such claims, liabilities or obligations, in the ordinary
course of business and consistent with past practice, of claims, liabilities or
obligations reflected or reserved against in, or contemplated by, the
consolidated financial statements (or the notes thereto) of the Company; (k)
neither the Company nor any of its subsidiaries will adopt a plan of
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization of the Company (other than the Merger); (l) neither the
Company nor any of its subsidiaries will take or agree to take, any action that
would or is reasonably likely to result in any of the conditions to the Merger
not being satisfied, or would make any representation or warranty of the Company
contained in the Merger Agreement inaccurate in any respect, at or prior to the
Effective Time, or that would materially impair the Company's ability to
consummate the Merger or materially delay such consummation; and (m) neither the
Company nor any of its subsidiaries will enter into any agreement with respect
to the foregoing or take any action with the intent of causing any of the
conditions to the Offer set forth in Section 14 hereof not to be satisfied.
Stockholder Meeting. The Company has agreed to hold a special meeting of
its stockholders (the "Special Meeting") as soon as practicable following
acceptance for payment of Shares pursuant to the Offer
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for the purpose of taking action upon the Merger Agreement. As soon as
practicable after the signing of the Merger Agreement, both Parent and the
Company have agreed to prepare and file with the Commission the Joint Proxy
Statement/Prospectus, with respect to the Special Meeting, including a
registration statement for the purpose of registering under the Securities Act
the offering, sale and delivery of Parent Common Stock, together with associated
Rights, to be issued to stockholders of the Company pursuant to the Merger (the
"Registration Statement"). Parent and the Company will use their best efforts to
have the Registration Statement declared effective with the Commission and as
soon as practicable thereafter the Company agrees to cause the Joint Proxy
Statement/Prospectus to be mailed to its stockholders. Parent and the Purchaser
have agreed to vote all Shares owned by them in favor of approval of the Merger
Agreement at any such meeting.
Director of Parent. Stanley G. Brannan, currently one of the members of the
Company's Board of Directors, will become a member of the Board of Directors of
Parent following the Effective Time.
Company Stock Plans; Repurchase of Warrant. The Merger Agreement requires
the Company to take the following actions with respect to each of the 1984
Incentive Stock Option Plan (the "1984 Plan"), the 1990 Non-Employee Director
Stock Option Plan (the "Director Plan"), the 1994 Stock Option Plan (the "1994
Plan") and the Perception Technology Corporation Stock Option Plan (the
"PTSOP"), which collectively constitute all of the plans of the Company under
which any stock options are outstanding (collectively, the "Company Stock
Plans"), and the Employee Stock Purchase Plan (the "ESPP"):
(1) Promptly upon commencement of the Offer, the Company will use its
best efforts to enter into agreements with optionees to cancel, prior to
the completion of the Offer, all outstanding stock options under the
Company Stock Plans, whether or not then exercisable and whether or not "in
the money" or "underwater." In consideration for the cancellation of the
outstanding "in the money" stock options, the Company has indicated its
intention to enter into agreements with the holders of such stock options
pursuant to which the Company will pay each such person an amount, in cash,
equal to the product of (A) the difference between the Offer Price and the
per Share exercise price of such stock option multiplied by (B) the number
of Shares covered by such stock option, and with respect to all outstanding
"underwater" options, if any, under the Company Stock Plans, the Company
shall pay, in cash, such amount as the Parent and the Company mutually
agree to be appropriate.
(2) The payments for outstanding stock options under the 1984 Plan,
the Director Plan, the 1994 Plan and the PTSOP will be (i) made by the
Company subject to the Purchaser having completed the Offer and (ii) paid
at or prior to the completion of the Offer.
(3) Effective upon completion of the Offer (but in any event prior to
June 30, 1999 unless the Offer is extended past that date), the Company
will terminate the ESPP and refund in cash to participants their respective
account balances.
The Company has entered into an agreement with AT&T Corp. pursuant to which
the Company will repurchase for $7,500,000 in cash, subject to and promptly
after consummation of the Offer, the Common Stock Purchase Warrant (the
"Warrant") dated December 12, 1997 issued by the Company to AT&T Corp.
No Solicitation and Fiduciary Out. In the Merger Agreement, the Company has
agreed to notify the Purchaser within 24-hours if any proposals are received by,
any information is requested from, or any negotiations or discussions are sought
to be initiated or continued with the Company or its representatives, in each
case in connection with any Acquisition Proposal (as defined below) or the
making of an Acquisition Proposal ("Acquisition Proposal Interest") indicating,
in connection with such notice, the terms and conditions of any Acquisition
Proposals or offers. The Company has agreed that it has, as of March 15, 1999,
ceased and caused to be terminated any activities, discussions or negotiations
with any parties conducted prior to the date of the Merger Agreement with
respect to any Acquisition Proposal Interest and that it will keep Parent
informed, on a current basis, of the status and terms of any Acquisition
Proposal Interest. An "Acquisition Proposal" means any tender or exchange offer
involving the Company, any proposal for a merger, consolidation or other
business combination involving the Company, any proposal or offer to acquire in
any manner a substantial equity interest in, or a substantial portion of, the
business or assets of, the Company
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(other than immaterial or insubstantial assets or inventory in the ordinary
course of business or assets held for sale), any proposal or offer regarding any
recapitalization or restructuring with respect to the Company or any proposal or
offer with respect to any other transaction similar to any of the foregoing with
respect to the Company other than pursuant to the transactions effected pursuant
to the Merger Agreement.
In the Merger Agreement, the Company has agreed that the Company will not
(and that it will ensure that its officers, directors, employees, investment
bankers, attorneys, accountants and other agents do not), directly or
indirectly, (i) initiate, solicit or encourage, or take any action to facilitate
the making of, any offer or proposal which constitutes or is reasonably likely
to lead to any Acquisition Proposal, (ii) enter into any agreement with respect
to any Acquisition Proposal or (iii) in the event of an unsolicited written
Acquisition Proposal for the Company, engage in negotiations or discussion with,
or provide information or data to, any person (other than Parent, any of its
affiliates or representatives) relating to any Acquisition Proposal, except that
the Merger Agreement does not prohibit the Company and the Company's Board of
Directors from (i) taking and disclosing to the Company's stockholders a
position with respect to a tender or exchange offer by a third party pursuant to
Rules 14d-9 and 14e-2 promulgated under the Exchange Act or (ii) making such
disclosure to the Company's stockholders as is reasonably deemed necessary, in
the good faith judgment of the Board, only after receiving advice from outside
counsel, that the failure to make such disclosures would cause the Company's
Board of Directors to violate its fiduciary duties to the Company's stockholders
under applicable law.
Notwithstanding the foregoing, prior to the acceptance of Shares pursuant
to the Offer, the Company may furnish information concerning its business to any
person pursuant to confidentiality agreements with provisions no less favorable
to the Company than those contained in the Confidentiality Agreement, dated
March 15, 1999, entered into between Parent and the Company and negotiate
concerning an Acquisition Proposal if (a) such person submitted on an
unsolicited basis a bona fide written proposal to the Company relating to any
such transaction which the Board determines in good faith, after receiving
advice from a nationally recognized investment banking firm, represents a
superior transaction to the Offer and the Merger and (b) in the opinion of the
Board of Directors, only after receipt of written advice from outside legal
counsel to the Company, the failure to provide such information or access or to
engage in such discussions or negotiations would cause the Board of Directors to
violate its fiduciary duties to the Company's stockholders under applicable law
(an Acquisition Proposal which satisfies clauses (a) and (b), a "Superior
Proposal"). Within one business day following receipt by the Company of a
Superior Proposal, the Company must notify Parent of the receipt thereof. The
Company must then provide Parent any material nonpublic information regarding
the Company provided to the other party that was not provided to Parent. The
Company's Board of Directors may withdraw or modify the approval or
recommendation of the Offer, the Merger or the Merger Agreement, terminate the
Merger Agreement pursuant to its terms and enter into an agreement with respect
to a Superior Proposal, provided that written notice of such intent is furnished
Parent not later than the first to occur of three business days in advance or
two business days prior to the expiration of the Offer and the Company,
concurrently with entering into such agreement, must pay or cause to be paid,
the Termination Fee (as defined below). Except as permitted under the terms of
the Merger Agreement, neither the Company's Board of Directors nor any committee
thereof shall (i) approve or recommend, or propose to approve or recommend, any
Acquisition Proposal, (ii) enter into any agreement with respect to any
Acquisition Proposal or (iii) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Parent or the Purchaser, the approval or
recommendation of the Company's Board of Directors, or any committee thereof, of
the Offer, the Merger Agreement or the Merger.
Indemnification and Insurance. The Merger Agreement provides that for five
years after the Effective Time, Parent and the Surviving Corporation shall, to
the fullest extent permitted under Kansas law or the terms of the Surviving
Corporation's Articles of Incorporation or Bylaws as in effect on the Effective
Time, indemnify, defend and hold harmless the present and former officers and
directors of the Company and its subsidiaries against all losses, claims,
damages, liabilities, costs, fees and expenses (including reasonable attorneys'
fees and disbursements of counsel and judgments, fines, losses, claims,
liabilities and amounts paid in settlement) arising out of actions or omissions
occurring at or prior to the Effective Time. The Merger Agreement also provides
that Parent or the Surviving Corporation will maintain the Company's existing
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<PAGE> 29
directors' and officers' liability insurance ("D&O Insurance") for a period of
not less than five years after the Effective Time, provided that Parent may
substitute therefor policies of substantially equivalent coverage and amounts
containing terms no less favorable to such former directors or officers.
Further, if the existing D&O Insurance expires, is terminated or cancelled
during such period, Parent or the Surviving Corporation will use all reasonable
efforts to obtain substantially similar D&O Insurance. In no event shall Parent
be required to pay aggregate premiums for insurance in excess of $250,000. If
Parent or the Surviving Corporation is unable to obtain substantially equivalent
coverage for an aggregate premium not to exceed $250,000, then Parent or the
Surviving Corporation will obtain as much insurance as can be obtained for
$250,000.
Representations and Warranties. The Merger Agreement contains various
representations and warranties of the parties thereto, including representations
by the Company, the Parent and the Purchaser as to, among other things,
corporate existence and good standing, organization, capitalization, corporate
authorization, financial statements, public filings, conduct of business,
employee benefit plans, intellectual property, employment matters, compliance
with laws, tax matters, litigation, environmental matters, material contracts,
potential conflicts of interest, brokers' fees, real property, insurance,
accounts receivable and inventory, the vote required to approve the Merger
Agreement, undisclosed liabilities, information in the Joint Proxy
Statement/Prospectus and the absence of any material adverse effect on the
Company and Parent.
Termination. The Merger Agreement may be terminated and the transactions
contemplated therein may be abandoned at any time before the Effective Time,
whether before or after stockholder approval: (i) by mutual written consent of
Parent and the Company; (ii) by Parent if the Offer shall have expired or been
terminated without any Shares being purchased thereunder by Purchaser as a
result of the occurrence of any of the events set forth in Section 14 hereof;
(iii) by either Parent or the Company if a court of competent jurisdiction or
governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action (which order, decree
or ruling the parties thereto shall use their best efforts to lift), in each
case permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by the Merger Agreement; (iv) by Parent if, without
any material breach by Parent or the Purchaser of its obligations under the
Merger Agreement, the purchase of Shares pursuant to the Offer shall not have
occurred on or before three months from the date of the Merger Agreement; (v) by
the Company if, without any material breach by the Company of its obligations
under the Merger Agreement, the purchase of Shares pursuant to the Offer shall
not have occurred on or before three months from the date of the Merger
Agreement; (vi) by the Company (A) if there shall be a material breach of any of
Parent's or the Purchaser's representations, warranties or covenants thereunder,
which breach cannot be or has not been cured within 30 days of the receipt by
Parent of written notice thereof from the Company or (B) to allow the Company to
enter into an agreement regarding a Superior Proposal, provided that it makes
simultaneous payment of the Termination Fee; (vii) by Parent, if prior to the
purchase of Shares pursuant to the Offer, the Company shall have breached any
representation, warranty or covenant or other agreement contained in the Merger
Agreement, which breach (A) would give rise to the failure of a condition set
forth in paragraph (f) or (g) referred to in Section 14 hereof and (B) cannot be
or has not been cured within 30 days of the receipt by the Company of written
notice thereof from Parent; (viii) by Parent, at any time prior to the purchase
of the Shares pursuant to the Offer, if (A) the Board of Directors of the
Company shall withdraw, modify or change its recommendation or approval in
respect of the Merger Agreement or the Offer in a manner adverse to the
Purchaser, (B) the Board of Directors of the Company shall have recommended any
proposal other than by Parent or the Purchaser in respect of an Acquisition
Proposal, (C) the Company shall have exercised a right with respect to an
Acquisition Proposal referenced in Section 5.3(b) of the Merger Agreement
(regarding providing information to, or negotiating with, a person regarding an
Acquisition Proposal) and shall, directly or through its representatives,
continue discussions with any third party concerning an Acquisition Proposal,
which proposal contains a proposal as to price (without regard to whether such
proposal specifies a specific price or range of potential prices), for more than
20 business days after the date or receipt of such Acquisition Proposal, or (D)
an Acquisition Proposal that is publicly disclosed shall have been commenced,
publicly proposed or communicated to the Company which contains a proposal as to
price (without regard to whether such proposal specifies a specific price or a
range of potential prices) and the Company shall not have rejected such proposal
within 20 business days of its receipt or, if sooner, the date its existence
first becomes publicly disclosed; or (ix) by Parent, as soon as practicable
after the expiration of the Offer, if Bank of America shall
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<PAGE> 30
not have extended the debt financing to Purchaser in accordance with the
Commitment Letter and Parent shall have determined in good faith that it cannot
obtain debt financing within 35 business days after commencement of the Offer
from any other source on terms at least as favorable in the aggregate as the
terms set forth in the Commitment Letter; or (x) by the Company, at the initial
scheduled expiration date of the Offer or any extended expiration date of the
Offer, if at such time (i) Parent shall not have obtained the debt financing or
waived the condition set forth in paragraph (k) set forth in Section 14 hereof
and (ii) the Minimum Condition and all other conditions set forth in Section 14
hereof (other than those set forth in paragraph (k) thereof) have been satisfied
or, to the extent such conditions may be so waived, waived by Parent.
Termination Fee. If (i) Parent shall have terminated the Merger Agreement
pursuant to Section 8.1(h) of the Merger Agreement (described in clause (viii)
of the preceding paragraph), (ii) Parent shall have terminated the Merger
Agreement pursuant to Section 8.1(g) of the Merger Agreement (described in
clause (vii) of the preceding paragraph) and within 12 months following the date
of any such termination an Acquisition Proposal shall have been consummated or
(iii) the Company shall have terminated the Merger Agreement pursuant to Section
8.1(f)(ii) of the Merger Agreement (described in clause (vi)(B) of the preceding
paragraph), then in any such case the Company shall pay the Termination Fee to
Parent in immediately available funds simultaneously with such termination, if
pursuant to Section 8.1(f)(ii) of the Merger Agreement, and promptly, but in no
event later than two business days after the date of such termination if
pursuant to Section 8.1(h) of the Merger Agreement or consummation of the
acquisition contemplated by the Acquisition Proposal following a termination
pursuant to Section 8.1(g). If the Merger Agreement is terminated by Parent
pursuant to Section 8.1(i) of the Merger Agreement (described in clause (ix) of
the preceding paragraph) or by the Company pursuant to Section 8.1(j) of the
Merger Agreement (described in clause (x) of the preceding paragraph) and Parent
is not entitled to terminate, withdraw or not consummate the Offer under one or
more of the conditions to the Offer set forth in Section 14 hereof (other than
the condition set forth in paragraph (k) thereof), Parent shall pay the
Termination Fee to the Company in immediately available funds. If at least a
majority of the issued and outstanding Common Stock on a fully diluted basis has
been validly tendered and not withdrawn prior to the expiration of the Offer,
and this Agreement is terminated by Parent pursuant to Section 8.1(b) of the
Merger Agreement (described in clause (ii) of the preceding paragraph) or by the
Company pursuant to Section 8.1(e) of the Merger Agreement (described in clause
(v) of the preceding paragraph), Parent shall pay the Termination Fee to the
Company in immediately available funds if Parent or the Company terminates this
Agreement solely as a result of the Minimum Condition not having been satisfied,
with payment of the Termination Fee to be made within two business days after
Parent's or the Company's termination of this Agreement.
The term "Termination Fee" shall mean an amount equal to $4,975,000, plus
an amount, not in excess of $1,000,000, equal to the actual and reasonably
documented out-of-pocket expenses incurred by either Parent or Purchaser, on the
one hand, or the Company, on the other hand, as the case may be, in connection
with the Offer, the Merger, this Agreement, the Stockholders' Agreement and the
consummation of the transactions contemplated hereby and thereby.
Fees and Expenses. Except as set forth in Section 8.2 of the Merger
Agreement with respect to the payment of fees and the reimbursement of expenses
as described in the preceding paragraph, the Merger Agreement provides that all
fees, costs and expenses incurred in connection with the Merger Agreement and
the transactions contemplated by the Merger Agreement shall be paid by the party
incurring such fees, costs and expenses.
Amendments and Modifications. Subject to applicable law, the Merger
Agreement may be amended, modified or supplemented by a written agreement of
Parent, the Purchaser and the Company, provided, that after the approval of the
Merger Agreement by the stockholders of the Company, no such amendment,
modification or supplement shall reduce or change the consideration to be
received by the Company's stockholders in the Merger.
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STOCKHOLDERS' AGREEMENT
The following is a summary of certain provisions of the Stockholders'
Agreement. The summary is qualified in its entirety by reference to the
Stockholders' Agreement which is incorporated herein by reference and a copy of
which has been filed with the Commission as Exhibit (c)(2) to the Schedule
14D-1. The Stockholders' Agreement may be examined and copies may be obtained at
the places and in the manner set forth in Section 8 of this Offer to Purchase.
As a condition and inducement to Parent and the Purchaser to enter into the
Merger Agreement and to incur the liabilities therein, Stanley G. Brannan, Sue
Brannan, Glenn A. Etherington, Leon A. Ferber, John F. Kelsey, III, Alan C.
Maltz (individually and as custodian for his minor daughters), Scott A. Maltz,
Ray S. Naeini and Donald R. Walsh (the "Major Stockholders"), who have aggregate
voting power and dispositive power with respect to approximately 25% of the
outstanding Common Stock, concurrently with the execution and delivery of the
Merger Agreement, entered into the Stockholders' Agreement with Parent and the
Purchaser. In the Stockholders' Agreement, the Major Stockholders represented
that they collectively own approximately 3,090,541 Shares.
In the Stockholders' Agreement, the Major Stockholders agree that they will
tender their Shares promptly in the Offer and that they will not withdraw any
Shares so tendered. The Purchaser agrees to purchase all of the Shares so
tendered at $13.40 per Share or such higher price per Share as may be offered by
the Purchaser in the Offer, provided that the Purchaser's obligation to accept
and pay for the Shares in the Offer is subject to all the terms and conditions
of the Offer set forth in the Merger Agreement and Section 14 hereof.
During the term of the Stockholders' Agreement, the Major Stockholders have
agreed that they will not (subject to certain exceptions) (i) transfer, or enter
into any contract, option, agreement or other understanding with respect to the
transfer of, their Shares or stock options or any interest therein, (ii) except
as provided in the Stockholders' Agreement, grant any proxy, power of attorney
or other authorization or consent in or with respect to their Shares or grant
any power of attorney or other authorization or consent in or with respect to
their stock options, or (iii) deposit their Shares in any voting trust or enter
into any voting agreement or arrangement with respect to their Shares that would
in any way restrict, limit or interfere with the performance of their
obligations under the Stockholders' Agreement. In addition, the Major
Stockholders have agreed that they will notify the Purchaser of any inquiry the
Major Stockholders receive which might lead to an acquisition of the Company by
a third party.
Pursuant to the Stockholders' Agreement, the Major Stockholders have
granted to Parent during the term of the Merger Agreement an irrevocable proxy
to vote their shares, or grant a consent or approval in respect of such Shares,
in connection with any meeting of the stockholders of the Company (i) in favor
of the Merger and (ii) against any action or agreement which would impede,
interfere with or prevent the Merger, including any other extraordinary
corporate transaction such as a merger, reorganization or liquidation involving
the Company and a third party or any other proposal by a third party to acquire
the Company.
Subject to the completion of the Merger, those Major Stockholders that hold
stock options on the date of the Stockholders' Agreement agree to surrender such
stock options for cancellation promptly, and in any event no later than the
third business day following the completion of the Merger. The Company has
indicated its intention to enter into agreements with the Major Stockholders
(and with other Company employees holding stock options which are "in the
money") pursuant to which the Company will pay each such person an amount, in
cash, equal to product of (i) the difference between the Offer Price and the
respective exercise prices of such stock options, multiplied by (ii) the number
of shares of Common Stock covered by such stock options.
The Stockholders' Agreement will terminate upon the earlier of (a) the
termination of the Merger Agreement in accordance with its terms, (b) the
Effective Time, or (c) written notice by Parent that Parent, in its sole
discretion desires to terminate the Stockholders' Agreement, provided that
certain provisions specified in the Stockholders' Agreement will survive such
termination.
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CONFIDENTIALITY AGREEMENT
The following is a summary of certain provisions of the Confidentiality
Agreement, dated March 15, 1999, by and between Parent and the Company (the
"Confidentiality Agreement"). The summary of the Confidentiality Agreement does
not purport to be complete and is qualified by reference to the text of the
Confidentiality Agreement, a copy of which is filed as Exhibit (c)(4) hereto and
incorporated herein by reference.
The Confidentiality Agreement contains customary provisions pursuant to
which, among other matters, the parties have agreed to keep confidential all
nonpublic, confidential or proprietary information furnished to each party
relating to the Company or Parent, as the case may be, subject to certain
exceptions (the "Confidential Information"), and to use the Confidential
Information solely in connection with the evaluation of a possible negotiated
transaction between the parties. In addition, the parties have agreed not to
disclose to any person either the fact that discussions or negotiations are
taking place concerning the Offer and the Merger or any of the terms,
conditions, or other facts with respect to the Offer and the Merger, including
the status thereof.
Each party has agreed that without the other party's prior written consent,
for a period of one year from the date of the Confidentiality Agreement, it will
not and its affiliates will not directly solicit for employment, employ or
otherwise contract for the services of any person now employed by the other
party who has been involved in discussions regarding the Offer and the Merger.
Parent has agreed that until the expiration of one year from the date of
the Confidentiality Agreement, except as provided in the Merger Agreement and
the Stockholders' Agreement, it shall not (a) in any manner acquire, agree to
acquire or make any proposal to acquire, directly or indirectly, any securities
or property of the Company or any of its subsidiaries, (b) propose to enter
into, directly or indirectly, any merger or business combination involving the
Company or any of its subsidiaries or to purchase, directly or indirectly, a
material portion of the assets of the Company or any of its subsidiaries, (c)
make, or in any way participate in, directly or indirectly, any solicitation of
proxies to vote, or seek to advise or influence any person with respect to the
voting of, any voting securities of the Company or any of its subsidiaries, (d)
form, join or in any way participate in a group with respect to any voting
securities of the Company or any of its subsidiaries, (e) otherwise act, alone
or in concert with others, to seek to control or influence the management, Board
of Directors or policies of the Company (f) disclose any intention, plan or
arrangement inconsistent with the foregoing or (g) advise, assist or encourage
any other person in connection with any of the foregoing.
In consideration of the time, effort and expense incurred by Parent in
connection with the Offer and the Merger, during the 45-day period commencing on
the date of the Confidentiality Agreement, the Company has agreed that it will
not solicit any offer from, initiate or engage in any discussions or
negotiations with, or provide any information to any third party concerning any
possible proposal regarding a merger, sale of assets or stock, or other
acquisition of the Company or any of its principal assets or businesses. In this
regard, the Company agreed to cease and terminate any existing solicitation,
discussion or negotiation with any persons conducted before the Confidentiality
Agreement and agreed not to release any third party from, or waive any provision
of, any standstill agreement to which it is a party or any confidentiality
agreement between it and another person who has made, or may reasonably be
considered likely to make, a proposal regarding a merger, sale of assets or
stock, or other acquisition of the Company or any of its principal assets or
businesses.
12. PLANS FOR THE COMPANY; OTHER MATTERS.
PLANS FOR THE COMPANY
Parent is conducting a detailed review of the Company and its assets,
corporate structure, capitalization, operations, properties, policies,
management and personnel and will consider, subject to the terms of the Merger
Agreement, what, if any, changes would be desirable in light of the
circumstances which exist upon completion of the Offer. Such changes could
include changes in the Company's business, corporate structure, Articles of
Incorporation, Bylaws, capitalization, Board of Directors or management,
although, except as disclosed in this Offer to Purchase, Parent has no current
plans with respect to any of such matters. The
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Merger Agreement provides that, promptly after the purchase by the Purchaser of
any Shares pursuant to the Offer, the Minimum Condition having been satisfied,
and from time to time thereafter as Shares are acquired by the Purchaser, Parent
shall be entitled to designate such number of directors, subject to compliance
with Section 14(f) of the Exchange Act, rounded down to the next whole number,
on the Company's Board of Directors as is equal to the product of the total
number of directors on such Board (giving effect to the directors designated by
Parent) multiplied by the percentage that the number of Shares which the
Purchaser or any affiliate of the Purchaser owns beneficially bears to the total
number of Shares then outstanding. In furtherance thereof, the Company shall,
upon the request of Parent, promptly either increase the size of its Board of
Directors, or use its best efforts to secure the resignations of such number of
its incumbent directors, or both as is necessary to enable Parent's designees to
be elected to the Company's Board of Directors in accordance with Section 1.3 of
the Merger Agreement and shall cause Parent's designees to be so elected. At
such time, the Company shall, if requested by Parent, also cause persons
designated by Parent to constitute at least the same percentage (rounded down to
the next whole number) as is on the Company's Board of Directors of (i) each
committee of the Company's Board of Directors, (ii) each board of directors (or
similar body) of each subsidiary of the Company and (iii) each committee (or
similar body) of each such board. The Merger Agreement provides that the
directors and officers of the Purchaser at the Effective Time of the Merger
will, from and after the Effective Time, be the initial directors and officers,
respectively, of the Surviving Corporation.
Except as disclosed in this Offer to Purchase, neither Parent nor the
Purchaser has any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of assets, involving
the Company or any of its subsidiaries, or any material changes in the Company's
corporate structure, business or composition of its management or personnel.
OTHER MATTERS
STOCKHOLDER APPROVAL. Under the KGCC, the approval of the Board of
Directors of the Company and the affirmative vote of the holders of a majority
of the outstanding Shares are required to adopt and approve the Merger Agreement
and the transactions contemplated thereby. The Company has represented in the
Merger Agreement that the execution and delivery of the Merger Agreement by the
Company and the consummation by the Company of the transactions contemplated by
the Merger Agreement and the Stockholders' Agreement have been duly authorized
by all necessary corporate action on the part of the Company, subject to the
approval of the Merger by the Company's stockholders in accordance with the
KGCC. In addition, the Company has represented that the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock is the only vote
of the holders of any class or series of the Company's capital stock which is
necessary to approve the Merger Agreement and the transactions contemplated
thereby, including the Merger. Therefore, the only remaining required corporate
action of the Company will be the approval of the Merger Agreement and the
transactions contemplated thereby by the affirmative vote of the holders of a
majority of the shares of Common Stock. The Joint Proxy Statement/Prospectus
containing detailed information concerning the Merger will be furnished to
stockholders of the Company in connection with a special meeting to be called by
the Company to vote on the Merger. In the Merger Agreement, the Company has
agreed to take all action necessary to convene a special meeting of its
stockholders as promptly as practicable after the consummation of the Offer for
the purpose of considering and taking action on the Merger Agreement and the
transactions contemplated thereby. The Merger Agreement provides that Parent
will vote, or cause to be voted, all of the Shares then owned by Parent, the
Purchaser or any of Parent's other subsidiaries and affiliates in favor of the
approval of the Merger and the adoption of the Merger Agreement. If the
Purchaser acquires 9,158,155 Shares in the Offer, it will have sufficient voting
power to cause the approval and adoption of the Merger Agreement and the
transactions contemplated thereby without the affirmative vote of any other
stockholder of the Company. Additionally, the Major Stockholders who hold in the
aggregate approximately 25% of the outstanding Common Stock have entered into
the Stockholders' Agreement pursuant to which they have agreed, among other
things, to grant Parent a proxy to vote all Shares beneficially owned by them in
favor of the Merger Agreement and the transactions contemplated thereby.
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KANSAS ANTI-TAKEOVER STATUTES.
Business Combination Statute. Sections 17-12,100 through 17-12,104 of the
KGCC (the "Kansas Business Combination Statute"), in general, prohibit a Kansas
corporation such as the Company from engaging in a "Business Combination"
(defined as a variety of transactions, including mergers, as set forth below)
with an "Interested Stockholder" (defined generally as a person that is the
beneficial owner of 15% or more of a corporation's outstanding voting stock) for
a period of three years following the date that such person became an Interested
Stockholder unless (a) prior to the date such person became an Interested
Stockholder, the board of directors of the corporation approved either the
Business Combination or the transaction that resulted in the stockholder
becoming an Interested Stockholder, (b) upon consummation of the transaction
that resulted in the stockholder becoming an Interested Stockholder, the
Interested Stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding stock held by
directors who are also officers of the corporation and employee stock ownership
plans that do not provide employees with the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange
offer or (c) on or subsequent to the date such person became an Interested
Stockholder, the Business Combination is approved by the board of directors of
the corporation and authorized at a meeting of stockholders, and not by written
consent, by the affirmative vote of the holders of a least 66 2/3% of the
outstanding voting stock of the corporation not owned by the Interested
Stockholder.
Under Section 17-12,102 of the KGCC, the restrictions described above do
not apply if, among other things (A) the corporation's original articles of
incorporation contain a provision expressly electing not to be governed by
Section 17-12,101 of the KGCC; (B) the corporation, by action of its board of
directors, adopts an amendment to its bylaws within one year of the effective
date of Section 17-12,101 of the KGCC expressly electing not to be governed by
the section, which amendment shall not be further amended by the board of
directors; (C) the corporation, by action of its stockholders, adopts an
amendment to its articles of incorporation or bylaws expressly electing not to
be governed by Section 17-12,101 of the KGCC, provided that, in addition to any
other vote required by law, such amendment of the articles of incorporation or
bylaws must be approved by the affirmative vote of a majority of the shares
entitled to vote, which amendment would not be effective until 12 months after
the adoption of such amendment and would not apply to any Business Combination
between the corporation and any person who became an Interested Stockholder of
the corporation on or prior to the date of such adoption; (D) the corporation
does not have a class of voting stock that is (1) listed on a national
securities exchange, (2) authorized for quotation on an interdealer quotation
system of a registered national securities association or (3) held of record by
more than 2,000 stockholders, unless any of the foregoing results from action
taken, directly or indirectly, by an Interested Stockholder or from a
transaction in which a person became an Interested Stockholder; or (E) a
stockholder becomes an Interested Stockholder "inadvertently" and as soon as
possible thereafter divests itself of a sufficient number of shares so that such
stockholder ceases to be an Interested Stockholder and would not, at any time
within the three-year period immediately prior to a Business Combination between
the corporation and such Interested Stockholder, have been an Interested
Stockholder, but for the inadvertent acquisition. Under Section 17-12,102 of the
KGCC, the restrictions described above also do not apply to certain Business
Combinations proposed by an Interested Stockholder following the announcement or
notification of one of certain extraordinary transactions involving the
corporation and a person who had not been an Interested Stockholder during the
previous three years or who became an Interested Stockholder with the approval
of a majority of the corporation's directors.
Section 17-12,101 of the KGCC provides that, during such three-year period,
the corporation may not merge or consolidate with an Interested Stockholder or
any affiliate or associate thereof and also may not engage in certain other
transactions with an Interested Stockholder or any affiliate or associate
thereof, including, without limitation, (A) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition of assets (except proportionately as a
stockholder of the corporation) having an aggregate market value equal to 10% or
more of the aggregate market value of all assets of the corporation determined
on a consolidated basis or the aggregate market value of all the outstanding
stock of a corporation; (B) any transaction that results in the issuance or
transfer by the corporation or by certain subsidiaries thereof of any stock of
the corporation or
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such subsidiaries to the Interested Stockholder, except pursuant to a
transaction which effects a pro rata distribution to all stockholders of the
corporation; (C) any transaction involving the corporation or certain
subsidiaries thereof which has the effect of increasing the proportionate share
of the stock of any class or series, or securities convertible into the stock of
any class or series, of the corporation or any such subsidiary which is owned
directly or indirectly by the Interested Stockholder (except as a result of
immaterial changes due to fractional share adjustments or as a result of any
purchase or redemption of any shares of stock not caused, directly or
indirectly, by the Interested Stockholder); or (D) any receipt by the Interested
Stockholder of the benefit (except proportionately as a stockholder of such
corporation) of any loans, advances, guarantees, pledges or other financial
benefits provided by or through the corporation.
Control Share Acquisition Statute. Sections 17-1286 through 17-1298 of the
KGCC (the "Kansas Control Share Acquisition Statute") apply to any acquisition
in which a person acquires, directly or indirectly, the power to direct the
exercise of one-fifth or more of the voting power of an "issuer public
corporation." An "issuer public corporation" is defined to mean a Kansas
corporation which has 100 or more shareholders, whose principal place of
business is in Kansas and either (i) more than 10% of whose shareholders are
resident in Kansas or (ii) more than 10% of whose shares are owned by Kansas
residents.
Subject to certain exceptions described below, shares acquired in an
acquisition falling under the Kansas Control Share Acquisition Statute will only
have the voting rights accorded such shares before the acquisition if approved
by both (i) a majority of all outstanding shares entitled to vote in an election
of directors and (ii) a majority of all outstanding shares entitled to vote in
an election of directors, excluding all interested shares. If, before the
acquisition, however, a corporation's articles of incorporation or bylaws
provide that the Kansas Control Share Acquisition Statute does not apply, the
acquired shares will have the same voting rights such shares were accorded
before the acquisition, without the requirement of a shareholder vote. Prior to
approval of the Merger Agreement, the Company's Bylaws were amended to provide
that the Control Share Acquisition Statute does not apply to acquisitions of the
Company's Common Stock.
The Company has represented in the Merger Agreement that the provisions of
the Kansas Business Combination Statute and the Kansas Control Share Acquisition
Statute are not applicable to any of the transactions contemplated by the Merger
Agreement or the Stockholders' Agreement, including the Merger and the purchase
of Shares in the Offer or pursuant to the Stockholders' Agreement.
APPRAISAL RIGHTS. Holders of the Shares do not have appraisal rights as a
result of the Offer. However, if the Merger is consummated, holders of the
Shares at the effective time of the Merger will have certain rights pursuant to
the provisions of Section 17-6712 of the KGCC if the Merger Consideration
consists of anything other than shares of Parent Common Stock or shares of
Parent Common Stock plus cash in lieu of fractional shares of Parent Common
Stock. Dissenting stockholders of the Company who comply with the applicable
statutory procedures would be entitled under such circumstances to receive a
determination of the fair value of their Shares (exclusive of any element of
value arising from the accomplishment or expectation of the Merger) by a
court-appointed appraiser and to receive payment of such fair value in cash,
together with interest thereon, if any. Any such judicial determination of the
fair value of the Shares could be based upon factors other than, or in addition
to, the price per Share, as the case may be, to be paid in the Merger or the
market value of the Shares. The value so determined could be more or less than
the price per Share to be paid in the Merger.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SECTION 17-6712 OF
THE KGCC INCLUDED HEREWITH IN ANNEX A. THE PRESERVATION AND EXERCISE OF
DISSENTERS' RIGHTS REQUIRE STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE
KGCC.
The foregoing description of the KGCC, including the descriptions of
Sections 17-1286 through 17-1298, 17-6703, 17-6712, 17-12,101 and 17-12,102, is
not necessarily complete and is qualified in its entirety by reference to the
KGCC.
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RULE 13e-3. The Merger or other business combination following the purchase
of Shares pursuant to the Offer in which the Purchaser seeks to acquire the
remaining Shares not held by it would have to comply with any applicable federal
law operating at the time of its consummation. Rule 13e-3 under the Exchange Act
is applicable to certain "going private" transactions. Rule 13e-3 will not be
applicable to the Merger or any such other business combination if, among other
things, (i) the Merger or other business combination is consummated within one
year after the purchase of the Shares pursuant to the Offer and the value of the
consideration paid per Share in the Merger or other business combination
(measured at the time of consummation of the Merger) is at least equal to the
amount paid per Share in the Offer or (ii) the consideration paid per Share in
the Merger consists solely of Parent Common Stock and such Parent Common Stock
is registered pursuant to Section 12 of the Exchange Act and is either listed on
a national securities exchange or authorized to be quoted in an inter-dealer
quotation system of a registered national securities association. If applicable,
Rule 13e-3 may require, among other things, that certain additional information
be disclosed to minority stockholders and filed with the Commission prior to the
consummation of the Merger or such other business combination.
13. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that neither the Company nor any of its
subsidiaries shall: (i) declare, set aside or pay any dividend or other
distribution payable in cash, stock or property with respect to its capital
stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares
of, or securities convertible into or exchangeable for, or options (including
any automatic grants of options under the Company Stock Plans), warrants, calls,
commitments or rights of any kind to acquire, any shares of capital stock of any
class of the Company or its subsidiaries, other than (A) Shares reserved for
issuance on the date of the Merger Agreement pursuant to the exercise of options
outstanding as of the date of the Merger Agreement and (B) Shares issued under
the Company's Employee Stock Purchase Plan if the Offer extends beyond June 30,
1999; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or
encumber any assets, other than in the ordinary and usual course of business and
consistent with past practice, or incur or modify any indebtedness or other
liability, other than in the ordinary and usual course of business and
consistent with past practice; or (iv) redeem, purchase or otherwise acquire,
directly or indirectly, any of its capital stock other than as provided in the
Merger Agreement.
14. CONDITIONS OF THE OFFER.
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) the Purchaser's rights to extend and amend the Offer at
any time in its sole discretion (to the extent permitted by the Merger
Agreement), the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations of the Commission, including
Rule 14e-l(c) under the Exchange Act (relating to the Purchaser's obligation to
pay for or return tendered Shares promptly after termination or withdrawal of
the Offer), pay for, and may delay the acceptance for payment of or, subject to
the restriction referred to above, the payment for, any tendered Shares, and may
terminate or amend the Offer as to any Shares not then paid for, if (i) as of
the expiration date of the Offer (A) any applicable waiting period under the HSR
Act has not expired or terminated, or (B) the Minimum Condition has not been
satisfied, or (ii) at any time on or after the date of the Merger Agreement and
before the time of acceptance for payment for any such Shares, any of the
following events shall occur:
(a) there shall be threatened in writing or pending any suit, action
or proceeding by any governmental entity against the Purchaser, Parent, the
Company or any subsidiary of the Company (i) seeking to prohibit or impose
any material limitations on Parent's or the Purchaser's ownership or
operation (or that of any of their respective subsidiaries or affiliates)
of all or a material portion of their (to the extent it relates to the
Offer or Merger) or the Company's businesses or assets, or to compel Parent
or the Purchaser or their respective subsidiaries and affiliates to dispose
of or hold separate any material portion of the business or assets of the
Company and its subsidiaries or (to the extent it relates to the Offer or
Merger) Parent and its subsidiaries, in each case taken as a whole, (ii)
challenging the acquisition by Parent or the Purchaser of any Shares under
the Offer, seeking to restrain or prohibit the making or consummation of
the Offer or the Merger or the performance of any of the other transactions
contemplated by the Merger Agreement, or seeking to obtain from the
Company, and (to the extent it
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relates to the Offer or Merger) Parent or the Purchaser any damages that
are material in relation to the Company and its subsidiaries taken as a
whole, (iii) seeking to impose material limitations on the ability of the
Purchaser, or render the Purchaser unable, to accept for payment, pay for
or purchase some or all of the Shares pursuant to the Offer and the Merger,
or (iv) seeking to impose material limitations on the ability of the
Purchaser or Parent effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote the Shares
purchased by it on all matters properly presented to the Company's
stockholders;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction (other than a temporary or preliminary injunction that is
removed within ten days) enacted, entered, enforced, promulgated or deemed
applicable, pursuant to an authoritative interpretation by or on behalf of
a governmental entity, to the Offer or the Merger, or any other action
shall be taken by any governmental entity, other than the application to
the Offer or the Merger of applicable waiting periods under the HSR Act,
that is reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (iv) of paragraph (a)
above;
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq for a period in excess of 24
hours (excluding suspensions or limitations resulting solely from physical
damage or interference with such exchanges not related to market
conditions), (ii) a declaration of a general banking moratorium or any
general suspension of payments in respect of banks in the United States
(whether or not mandatory), (iii) a commencement of a war, armed
hostilities or other international or national calamity directly or
indirectly involving the United States (which shall not include the United
States' participation in the NATO peacekeeping mission in the provinces of
the former Yugoslavia (including but not limited to Serbia, Kosovo and
Albania)), (iv) any material limitation by any United States governmental
authority on the extension of credit generally by banks or other lending
institutions, (v) a change in general financial, bank or capital market
conditions which materially and adversely affects the ability of financial
institutions in the United States to extend credit or syndicate loans or
(vi) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(d) since December 31, 1998, there shall have occurred any change (or
any development that, insofar as reasonably can be foreseen, is reasonably
likely to result in any change) that constitutes a Company Material Adverse
Effect (as used in this Offer to Purchase, a "Company Material Adverse
Effect" means, subject to certain exceptions, any event, change in or
effect on the business of the Company or its subsidiaries, taken as a
whole, that is or would be expected to be materially adverse to (i) the
business, operations, properties (including intangible properties),
financial condition or results of operations, or prospects of the Company
or its subsidiaries, taken as a whole, or (ii) the ability of the Company
to consummate any of the Transactions (as defined in the Merger Agreement)
or to perform its obligations under the Merger Agreement);
(e) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Parent or the
Purchaser its approval or recommendation of the Offer, the Merger or the
Merger Agreement, or approved or recommended any Acquisition Proposal or
(ii) the Company shall have entered into any agreement with respect to any
Superior Proposal in accordance with Section 5.3(c) of the Merger
Agreement;
(f) any of the representations and warranties of the Company set forth
in the Merger Agreement shall not be true and correct, in each case (i) as
of the date referred to in any representation or warranty which addresses
matters as of a particular date, or (ii) as to all other representations
and warranties, as of the date of the Merger Agreement and as of the
scheduled expiration of the Offer and such inaccuracy individually or in
the aggregate would have a Company Material Adverse Effect;
(g) the Company shall have failed to perform any obligation or to
comply with any agreement or covenant to be performed or complied with by
it under the Merger Agreement, and such failure individually or in the
aggregate would have a Company Material Adverse Effect;
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(h) the Purchaser shall have failed to receive a certificate executed
by the President or a Vice President of the Company, dated as of the
scheduled expiration of the Offer, to the effect that the conditions set
forth in paragraphs (f) and (g) above have not occurred;
(i) all consents, permits and approvals of governmental entities and
other persons listed in Section 3.4 of the Company Disclosure Schedules to
the Merger Agreement and identified with an asterisk shall not have been
obtained with no material adverse conditions attached and no material
expense imposed on the Company or any of its subsidiaries;
(j) the Merger Agreement shall have been terminated in accordance with
its terms; or
(k) Parent and/or the Purchaser shall not have received the debt
financing for the transactions contemplated by the Commitment Letter from
Bank of America, and Parent shall have determined in good faith that it
cannot obtain debt financing from any other source within 35 business days
after the commencement of the Offer on terms at least as favorable in the
aggregate as the terms set forth in the Commitment Letter.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser, may be asserted by Parent or the Purchaser regardless of the
circumstances giving rise to such conditions (including any action or inaction
by Parent or the Purchaser) and may be waived by Parent or the Purchaser in
whole or in part at any time and from time to time in the sole discretion of
Parent or the Purchaser, except as otherwise provided in the Merger Agreement.
The failure by Parent or the Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time.
15. CERTAIN LEGAL MATTERS.
Except as described in this Section 15, based on information provided by
the Company, none of the Company, the Purchaser or Parent is aware of any
license or regulatory permit that appears to be material to the business of the
Company that might be adversely affected by the Purchaser's acquisition of
Shares as contemplated herein or of any approval or other action by a domestic
or foreign governmental, administrative or regulatory agency or authority that
would be required for the acquisition and ownership of the Shares by the
Purchaser as contemplated herein. Should any such approval or other action be
required, the Purchaser and Parent presently contemplate that such approval or
other action will be sought, except as described below under "State Takeover
Laws." While, except as otherwise described in this Offer to Purchase, the
Purchaser does not presently intend to delay the acceptance for payment of or
payment for Shares tendered pursuant to the Offer pending the outcome of any
such matter, there can be no assurance that any such approval or other action,
if needed, would be obtained or would be obtained without substantial conditions
or that failure to obtain any such approval or other action might not result in
consequences adverse to the Company's business or that certain parts of the
Company's business might not have to be disposed of or other substantial
conditions complied with in the event that such approvals were not obtained or
such other actions were not taken or in order to obtain any such approval or
other action. If certain types of adverse action are taken with respect to the
matters discussed below, the Purchaser could decline to accept for payment or
pay for any Shares tendered. See Section 14 for certain conditions to the Offer,
including conditions with respect to governmental actions.
State Takeover Laws. The Company is incorporated under the laws of the
State of Kansas, and the Company's principal executive offices are located in
Heathrow, Florida. Because the Company's Board of Directors has approved the
Offer and the Merger, the Kansas Business Combination Statute, as described in
Section 12 of this Offer to Purchase, is inapplicable to the Offer and the
Merger. In addition, because the Company's Bylaws provide that Sections 17-1286
through 17-1298 do not apply, the Kansas Control Share Acquisition Statute, as
described in Section 12 of this Offer to Purchase is also inapplicable to the
Offer and the Merger. A number of other states have adopted laws and regulations
applicable to attempts to acquire securities of corporations which are
incorporated, or have substantial assets, stockholders, principal executive
offices or principal places of business or whose business operations otherwise
have substantial economic effects in such states. In Edgar v. Mite Corp., in
1982, the Supreme Court of the United States (the "U.S. Supreme
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Court") invalidated on constitutional grounds the Illinois Business Takeover
statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987, in
CTS Corp. v. Dynamics Corp. of America, the U.S. Supreme Court held that the
State of Indiana may, as a matter of corporate law and, in particular, with
respect to those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquirer from voting on the affairs of a
target corporation without the prior approval of the remaining stockholders. The
state law before the U.S. Supreme Court was by its terms applicable only to
corporations that had a substantial number of stockholders in the state and were
incorporated there. The Company, directly or through its subsidiaries, conducts
business in a number of states throughout the United States, some of which have
enacted takeover laws and regulations. Neither Parent nor the Purchaser knows
whether any or all of these takeover laws and regulations will by their terms
apply to the Offer, and, except as set forth above with respect to the Kansas
Business Combination Statute and the Kansas Control Share Acquisition Statute,
neither Parent nor the Purchaser has currently complied with any other state
takeover statute or regulation. The Purchaser reserves the right to challenge
the applicability or validity of any state law purportedly applicable to the
Offer and nothing in this Offer to Purchase or any action taken in connection
with the Offer is intended as a waiver of such right. If it is asserted that any
state takeover statute is applicable to the Offer and an appropriate court does
not determine that it is inapplicable or invalid as applied to the Offer, the
Purchaser might be required to file certain information with or to receive
approvals from the relevant state authorities, and the Purchaser might be unable
to accept for payment or pay for Shares tendered pursuant to the Offer or may be
delayed in consummating the Offer. In such case, the Purchaser may not be
obligated to accept for payment or pay for any Shares tendered pursuant to the
Offer. See Section 14.
Antitrust. Under the provisions of the HSR Act applicable to the Offer, the
acquisition of Shares under the Offer may be consummated only following the
expiration or early termination of the applicable waiting period under the HSR
Act.
Under the provisions of the HSR Act applicable to the purchase of Shares
pursuant to the Offer, such purchase may not be consummated until the expiration
of a 15-calendar day waiting period following the required filing of a
Notification Report Form under the HSR Act by the Parent, which Parent expects
to submit on the date of this Offer to Purchase. Accordingly, if the
Notification and Report Form is filed on May 3, 1999, the waiting period under
the HSR Act would expire at 11:59 P.M., New York City time, on May 17, 1999,
unless early termination of the waiting period is granted by the Federal Trade
Commission ("FTC") and the Department of Justice, Antitrust Division (the
"Antitrust Division") or the Parent receives a request for additional
information or documentary material prior thereto. If either the FTC or the
Antitrust Division issues a request for additional information or documentary
material from the Parent prior to the expiration of the 15-day waiting period,
the waiting period will be extended and will expire at 11:59 P.M., New York City
time, on the tenth calendar day after the date of substantial compliance by the
Parent with such request unless terminated earlier by the FTC and the Antitrust
Division. If such a request is issued, the purchase of and payment for Shares
pursuant to the Offer will be deferred until the additional waiting period
expires or is terminated. Only one extension of such waiting period pursuant to
a request for additional information or documentary material is authorized by
the rules promulgated under the HSR Act. Thereafter, the waiting period can be
extended only by court order. Although the Company is required to file certain
information and documentary material with the Antitrust Division and the FTC in
connection with the Offer, neither the Company's failure to make such filings
nor a request to the Company from the Antitrust Division or the FTC for
additional information or documentary material will extend the waiting period.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed acquisition
of the Company. At any time before or after the Purchaser's acquisition of
Shares pursuant to the Offer, the Antitrust Division or the FTC could take such
action under the antitrust laws as either deems necessary or desirable in the
public interest, including seeking to enjoin the purchase of Shares pursuant to
the Offer or the consummation of the Merger or seeking the divestiture of Shares
acquired by the Purchaser or the divestiture of substantial assets of the
Company or its subsidiaries or the Parent or its subsidiaries. Private parties
and states' Attorneys General may also bring legal action under federal or state
antitrust laws under certain circumstances. There can be no assurance that a
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challenge to the Offer on antitrust grounds will not be made, or, if such a
challenge is made, of the result thereof. See Section 14 for a description of
certain conditions to the Offer, including conditions with respect to litigation
and certain governmental actions.
If the Antitrust Division, the FTC, a state or a private party raises
antitrust concerns in connection with a proposed transaction, the Purchaser may
engage in negotiations with the relevant governmental agency or party concerning
possible means of addressing these issues and may delay consummation of the
Offer or the Merger while such discussions are ongoing. Both the Parent and the
Company have agreed to use their respective best efforts to resolve any
antitrust issues.
Federal Reserve Board Regulations. Regulations G, U and X (the "Margin
Regulations") of the Federal Reserve Board restrict the extension or maintenance
of credit for the purpose of buying or carrying margin stock, including the
Shares, if the credit is secured directly or indirectly by margin stock. Such
secured credit may not be extended or maintained in an amount that exceeds the
maximum loan value of all the direct and indirect collateral securing the
credit, including margin stock and other collateral. All financing for the Offer
will be structured so as to be in full compliance with the Margin Regulations.
16. FEES AND EXPENSES.
The Purchaser has retained Corporate Investor Communications, Inc. to act
as the Information Agent and Harris Trust Company of New York to act as the
Depositary in connection with the Offer. Such firms each will receive reasonable
and customary compensation for their services. The Purchaser has also agreed to
reimburse each such firm for certain reasonable out-of-pocket expenses and to
indemnify each such firm against certain liabilities in connection with their
services, including certain liabilities under federal securities laws.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Information Agent) for making solicitations or
recommendations in connection with the Offer. Brokers, dealers, banks and trust
companies will be reimbursed by the Purchaser for customary mailing and handling
expenses incurred by them in forwarding material to their customers.
17. MISCELLANEOUS.
The Offer is being made to all holders of Shares other than the Company.
The 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. If the Purchaser becomes aware of any
jurisdiction in which the making of the Offer would not be in compliance with
applicable law, the Purchaser will make a good faith effort to comply with any
such law. If, after such good faith effort, the Purchaser cannot comply with any
such law, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares residing in such jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser by 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 Parent or the Purchaser not contained herein or in
the Letter of Transmittal and, if given or made, such information or
representation must not be relied upon as having been authorized.
Parent and the Purchaser have filed with the Commission the Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act furnishing certain additional
information with respect to the Offer. The Schedule 14D-1 and any amendments
thereto, including exhibits, may be examined and copies may be obtained from the
offices of the Commission in the manner set forth in Section 9 of this Offer to
Purchase (except that they will not be available at the regional offices of the
Commission).
38
<PAGE> 41
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF
PARENT AND
THE PURCHASER
1. INTERVOICE ACQUISITION SUBSIDIARY III, INC. Set forth below is the name,
business address and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of the
sole director and executive officer of the Purchaser. Such person is a citizen
of the United States of America, and the business address of such person is c/o
InterVoice, Inc., 17811 Waterview Parkway, Dallas, Texas.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
NAME AND ADDRESS HELD DURING THE PAST FIVE YEARS
- ---------------- -------------------------------
<S> <C>
Rob-Roy J. Graham Mr. Graham is President, Chief Financial Officer, Secretary,
Treasurer and the sole director of the Purchaser. Mr. Graham
is currently Chief Financial Officer and Secretary of
Parent, positions he has held since August 1994; Chief
Accounting Officer of Parent, a position he has held since
April 1994; and Controller of Parent, a position he has held
since August 1992.
</TABLE>
2. INTERVOICE, INC. Set forth below is the name, business address and
present principal occupation or employment, and material occupations, positions,
offices or employments for the past five years, of the directors and executive
officers of Parent. Each such person is a citizen of the United States of
America and the business address of each such person is c/o InterVoice, Inc.,
17811 Waterview Parkway, Dallas, Texas.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
NAME AND ADDRESS HELD DURING THE PAST FIVE YEARS
- ---------------- -------------------------------
<S> <C>
Daniel D. Hammond Mr. Hammond, a founder of Parent, is currently the Chairman
of the Board, a position he has held since December 1990,
and the Chief Executive Officer of Parent, a position he has
held since July 1986. Mr. Hammond has served as a director
since 1984.
David A. Berger Mr. Berger is President and Chief Operating Officer of
Parent, a position he has held since August 1998. From June
1995 to August 1998, he served as President of the Satellite
Networks Division of Scientific Atlanta, a company that
designs, manufactures, sells and installs satellite
communications networks worldwide. From February 1994 to
June 1995, he served as President of the Satellite
Communications Division of Scientific Atlanta. Prior
thereto, from November 1993 to February 1994, he served as
Strategy Consultant for Scientific Atlanta.
Rob-Roy J. Graham Mr. Graham is currently Chief Financial Officer and
Secretary of Parent, positions he has held since August
1994; Chief Accounting Officer of Parent, a position he has
held since April 1994; and Controller of Parent, a position
he has held since August 1992.
</TABLE>
S-1
<PAGE> 42
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
NAME AND ADDRESS HELD DURING THE PAST FIVE YEARS
- ---------------- -------------------------------
<S> <C>
Dwain H. Hammond Mr. Hammond is currently Senior Vice President, Research and
Development, of Parent, a position he has held since
December 1998. From June 1998 to December 1998, Mr. Hammond
served as Senior Vice President, Engineering of Parent. From
September 1994 to June 1998, Mr. Hammond served as Vice
President of Research and Development of Parent. Prior
thereto, he served Parent as Vice President -- Research and
Development, Core Systems from September 1993 to September
1994, and as Director of Hardware Development from 1990 to
September 1993. Mr. Hammond, who has been an employee of
Parent since 1984, is the brother of Daniel D. Hammond,
Chairman of the Board and Chief Executive Officer.
Gordon H. Givens Mr. Givens is currently Senior Vice President, Custom
Products LOB, of Parent, a position he has held since July
1998. From July 1996 to July 1998, Mr. Givens served as
Managing Director of European Strategic Business Unit of
Parent. From March 1994 to July 1996, he served as Vice
President -- Technical Services of Parent. Prior thereto, he
served as Vice President -- Professional Services of Parent
from March 1993 to March 1994.
M. Gregory Smith Mr. Smith is currently Senior Vice President -- Sales, the
Americas and Asia Pacific, a position he has held since
August 1996. From July 1994 to May 1996, he served as Vice
President and General Manager of SRX Corporation, a company
that engaged in the manufacture and sale of
telecommunications equipment. Prior thereto, from May 1992
to July 1994, Mr. Smith served as Regional Sales Manager of
Rockwell International, a manufacturer and contractor in the
telecommunications industry.
Dean C. Howell Mr. Howell is currently Vice President and Corporate Counsel
of Parent, a position he has held since March 1996. From
October 1992 to February 1996, he served as Legal Counsel of
Parent.
H. Don Brown Mr. Brown is currently Vice President of Human Resources, a
position he has held since September 1995. From November
1994 to August 1995, Mr. Brown served as Director of Human
Resources. From August 1992 to September 1994, he served as
Manager of Human Resources for the Permian Basin business
unit of Unocal Corporation, a company that produces and
sells energy resources and specialty minerals.
Eric L. Pratt Mr. Pratt is Vice President of Telco Sales and Systems
Engineering of Parent, a position he has held since October
1997. From October 1996 to October 1997, he served as Senior
Director, Sales for DSC Communications Corporation, a
company that designs, manufactures, and markets
telecommunications equipment. Prior thereto, he served as
Senior Account Director, Sales for DSC Communications
Corporation from June 1993 to October 1996.
Michael J. Polcyn Mr. Polcyn is Vice President -- Packaged Products LOB of
Parent, a position he has held since March 1998. From
December 1995 to March 1998, Mr. Polcyn served as Parent's
Vice President, Business Development and Product Marketing.
Prior thereto, he served as Director, Product Marketing from
March 1994 to December 1995, and as Director, Call Center
Engineering from March 1992 to March 1994.
</TABLE>
S-2
<PAGE> 43
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
NAME AND ADDRESS HELD DURING THE PAST FIVE YEARS
- ---------------- -------------------------------
<S> <C>
Phillip C. Walden Mr. Walden is currently Vice President, Manufacturing, of
Parent, a position he has held since July 1987.
Manuel Victor James Mr. James is Vice President of Networks Services LOB of
Parent, a position he has held since July 1998. From January
1997 to June 1998, Mr. James served as a Senior Director for
DSC Communications Intelligent Networks Division, a company
that designs, manufactures, and markets telecommunications
equipment. From June 1997 to December 1997, Mr. James served
as the General Manager for DSC Telecom Systems Group
acquired from Texas Instruments. Prior thereto, Mr. James
served as General Manager Telecom Systems Division of Texas
Instruments, a company that designs, manufactures and
markets voice dialing, fax messaging and wireless antenna
equipment from June 1996 to May 1997 and Director of
Business Development from June 1995 to May 1996. From June
1993 to June 1995, Mr. James served as Director Product
Management AIN/ PCS Products for DSC Communications.
Joseph J. Pietropaolo Mr. Pietropaolo has served as a director of Parent since
1989. Mr. Pietropaolo is currently an independent consultant
who has been providing consulting services related to
on-line lottery systems since March 1998. He is the former
Chief Financial Officer of Transactive Corporation, a
company that specializes in electronic benefits transfers, a
position he held from August 1994 to March 1997. Mr.
Pietropaolo is also the former Vice President and Treasurer
of GTECH Corporation, a company specializing in on-line
lottery systems, positions he held from 1990 to August 1994.
George C. Platt Mr. Platt has served as a director of Parent since 1991. Mr.
Platt is currently the President and Chief Executive Officer
of InteCom Inc., a wholly owned subsidiary of
Matra-Hachette, a company engaged in the manufacture and
sale of telephone switching systems. He has held this
position since January 1991.
Grant A. Dove Mr. Dove has served as director of Parent since 1997. Mr.
Dove is currently a Managing Partner of Technology
Strategies and Alliances, a firm which provides investment
banking and consulting services, a position he has held
since January 1993. Mr. Dove currently serves as a director
of Media One Group, Cooper Cameron Corp., Control Systems
International, Inc., Microelectronics and Computer
Technology Corp., and Optek Technology, Inc.
David W. Brandenburg Mr. Brandenburg has served as a director of Parent since
1997 and from 1990 to 1995. Mr. Brandenburg is President of
the Brandenburg Life Foundation, a position he has held
since October 1996. From November 1997 to May 1998 Mr.
Brandenburg served as President and Chief Executive Officer
of AnswerSoft, Inc. Mr. Brandenburg served as Vice Chairman
of Parent from December 1994 to May 1995. Prior thereto, Mr.
Brandenburg served as President of Parent from July 1990 to
December 1994.
</TABLE>
S-3
<PAGE> 44
ANNEX A
TEXT OF SECTION 17-6712 OF THE KANSAS GENERAL CORPORATION CODE
17-6712 PAYMENT FOR "STOCK" OF "STOCKHOLDER" OBJECTING TO MERGER OR
CONSOLIDATION; "STOCKHOLDER," "STOCK" AND "SHARE" DEFINED; NOTICE TO OBJECTING
STOCKHOLDERS; DEMAND FOR PAYMENT; APPRAISAL AND DETERMINATION OF VALUE BY
DISTRICT COURT, WHEN; TAXATION OF COSTS; RIGHTS OF OBJECTING STOCKHOLDERS;
STATUS OF STOCK; SECTION INAPPLICABLE TO CERTAIN SHARES OF STOCK. -- (a) When
used in this section, the word "stockholder" means a holder of record of stock
in a stock corporation and also a member of record of a nonstock corporation;
the words "stock" and "share" mean and include what is ordinarily meant by those
words and also membership or membership interest of a member of a nonstock
corporation.
(b) The corporation surviving or resulting from any merger or
consolidation, within 10 days after the effective date of the merger or
consolidation, shall notify each stockholder of any corporation of this state so
merging or consolidating who objected thereto in writing and whose shares either
were not entitled to vote or were not voted in favor of the merger or
consolidation, and who filed such written objection with the corporation before
the taking of the vote on the merger or consolidation, that the merger or
consolidation has become effective. If any such stockholder, within 20 days
after the date of mailing of the notice, shall demand in writing, from the
corporation surviving or resulting from the merger or consolidation, payment of
the value of the stockholder's stock, the surviving or resulting corporation
shall pay to the stockholder, within 30 days after the expiration of the period
of 20 days, the value of the stockholder's stock on the effective date of the
merger or consolidation, exclusive of any element of value arising from the
expectation or accomplishment of the merger or consolidation.
(c) If during a period of 30 days following the period of 20 days provided
for in subsection (b), the corporation and any such stockholder fail to agree
upon the value of such stock, any such stockholder, or the corporation surviving
or resulting from the merger or consolidation, may demand a determination of the
value of the stock of all such stockholders by an appraiser or appraisers to be
appointed by the district court, by filing a petition with the court within four
months after the expiration of the thirty-day period.
(d) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the corporation, which shall file with the clerk
of such court, within 10 days after such service, a duly verified list
containing the names and addresses of all stockholders who have demanded payment
for their shares and with whom agreements as to the value of their shares have
not been reached by the corporation. If the petition shall be filed by the
corporation, the petition shall be accompanied by such duly verified list. The
clerk of the court shall give notice of the time and place fixed for the hearing
of such petition by registered or certified mail to the corporation and to the
stockholders shown upon the list at the addresses therein stated and notice
shall also be given by publishing a notice at least once, at least one week
before the day of the hearing, in a newspaper of general circulation in the
county in which the court is located. The court may direct such additional
publication of notice as it deems advisable. The forms of the notices by mail
and by publication shall be approved by the court.
(e) After the hearing on such petition the court shall determine the
stockholders who have complied with the provisions of this section and become
entitled to the valuation of and payment for their shares, and shall appoint an
appraiser or appraisers to determine such value. Any such appraiser may examine
any of the books and records of the corporation or corporations the stock of
which such appraiser is charged with the duty of valuing, and such appraiser
shall make a determination of the value of the shares upon such investigation as
seems proper to the appraiser. The appraiser or appraisers shall also afford a
reasonable opportunity to the parties interested to submit to the appraiser
pertinent evidence on the value of the shares. The appraiser or appraisers,
also, shall have the powers and authority conferred upon masters by K.S.A.
60-253 and amendments thereto.
(f) The appraiser or appraisers shall determine the value of the stock of
the stockholders adjudged by the court to be entitled to payment therefor and
shall file a report respecting such value in the office of the clerk of
A-1
<PAGE> 45
the court, and notice of the filing of such report shall be given by the clerk
of the court to the parties in interest. Such report shall be subject to
exceptions to be heard before the court both upon the law and facts. The court
by its decree shall determine the value of the stock of the stockholders
entitled to payment therefor and shall direct the payment of such value,
together with interest, if any, as hereinafter provided, to the stockholders
entitled thereto by the surviving or resulting corporation. Upon payment of the
judgment by the surviving or resulting corporation, the clerk of the district
court shall surrender to the corporation the certificates of shares of stock
held by the clerk pursuant to subsection (g). The decree may be enforced as
other judgments of the district court may be enforced, whether such surviving or
resulting corporation be a corporation of this state or of any other state.
(g) At the time of appointing the appraiser or appraisers, the court shall
require the stockholders who hold certificated shares and who demanded payment
for their shares to submit their certificates of stock to the clerk of the
court, to be held by the clerk pending the appraisal proceedings. If any
stockholder fails to comply with such direction, the court shall dismiss the
proceedings as to such stockholder.
(h) The cost of any such appraisal, including a reasonable fee to and the
reasonable expenses of the appraiser, but exclusive of fees of counsel or of
experts retained by any party, shall be determined by the court and taxed upon
the parties to such appraisal or any of them as appears to be equitable, except
that the cost of giving the notice by publication and by registered or certified
mail hereinabove provided for shall be paid by the corporation. The court, on
application of any party in interest, shall determine the amount of interest, if
any, to be paid upon the value of the stock of the stockholders entitled
thereto.
(i) Any stockholder who has demanded payment of the stockholder's stock as
herein provided shall not thereafter be entitled to vote such stock for any
purpose or be entitled to the payment of dividends or other distribution on the
stock, except dividends or other distributions payable to stockholders of record
at a date which is prior to the effective date of the merger or consolidation,
unless the appointment of an appraiser or appraisers shall not be applied for
within the time herein provided, or the proceeding be dismissed as to such
stockholder, or unless such stockholder with the written approval of the
corporation shall deliver to the corporation a written withdrawal of the
stockholder's objections to and an acceptance of the merger or consolidation, in
any of which cases the right of such stockholder to payment for the
stockholder's stock shall cease.
(j) The shares of the surviving or resulting corporation into which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
(k) This section shall not apply to the shares of any class or series of a
class of stock, which, at the record date fixed to determine the stockholders
entitled to receive notice of and to vote at the meeting of stockholders at
which the agreement of merger or consolidation is to be acted on, were either
(1) registered on a national securities exchange or designated as a national
market system security on an interdealer quotation system by the national
association of securities dealers, inc., or (2) held of record by not less than
2,000 stockholders, unless the articles of incorporation of the corporation
issuing such stock shall otherwise provide; nor shall this section apply to any
of the shares of stock of the constituent corporation surviving a merger, if the
merger did not require for its approval the vote of the stockholders of the
surviving corporation, as provided in subsection (f) of K.S.A. 17-6701 and
amendments thereto. This subsection shall not be applicable to the holders of a
class or series of a class of stock of a constituent corporation if under the
terms of a merger of consolidation pursuant to K.S.A. 17-6701 or 17-6702, and
amendments thereto, such holders are required to accept for such stock anything
except (i) stock or stock and cash in lieu of fractional shares of the
corporation surviving or resulting from such merger or consolidation, or (ii)
stock or stock and cash in lieu of fractional shares of any other corporation,
which at the record date fixed to determine the stockholders entitled to receive
notice of and to vote at the meeting of stockholders at which the agreement of
merger or consolidation is to be acted on, were either registered on a national
securities exchange or held of record by not less than 2,000 stockholders, or
(iii) a combination of stock or stock and cash in lieu of fractional shares as
set forth in (i) and (ii) of this subsection. (Last amended by Ch. 135, L. '96,
eff. 7-1-96.)
A-2
<PAGE> 46
The Depositary for the Offer is:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
By Mail: By Hand/Overnight Delivery
Wall Street Station Receive Window
P.O. Box 1023 Wall Street Plaza
New York, New York 10268-1023 88 Pine Street, 19th Floor
New York, New York 10005
</TABLE>
By Facsimile:
(212) 701-7636
Confirm by Telephone:
(212) 701-7624
Questions and requests for assistance or additional copies of this Offer to
Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and the
Guidelines for Certification of Taxpayer Identification on Substitute Form W-9
may be directed to the Information Agent at the locations and telephone numbers
set forth below. Stockholders may also contact their broker, dealer, commercial
bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
Banks and Brokers Call Collect: (201) 896-1900
All Others Call Toll Free: (877) 460-2559
<PAGE> 1
EXHIBIT 99.(a)(2)
LETTER OF TRANSMITTAL
TO TENDER 9,158,155 SHARES OF COMMON STOCK
OF
BRITE VOICE SYSTEMS, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 3, 1999
BY
INTERVOICE ACQUISITION SUBSIDIARY III, INC.
A CORPORATION FORMED BY
INTERVOICE, INC.
THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON JUNE 1, 1999, UNLESS THE OFFER IS
EXTENDED.
The Depositary for the Offer is:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
By Mail: By Hand/Overnight Delivery:
Wall Street Station Receive Window
P.O. Box 1023 Wall Street Plaza
New York, New York 10268-1023 88 Pine Street, 19th Floor
New York, New York 10005
</TABLE>
By Facsimile:
(212) 701-7636
Confirm by Telephone:
(212) 701-7624
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 IN THE APPROPRIATE SPACE PROVIDED THEREFOR 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.
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF COMMON STOCK SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S) AND SHARES TENDERED
SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER OF
SHARE CERTIFICATE EVIDENCED BY SHARES
NUMBER(S)* SHARE CERTIFICATE(S)* TENDERED**
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
TOTAL SHARES:
- ------------------------------------------------------------------------------------------------------------------
* 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.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
This Letter of Transmittal is to be used either if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made by
book-entry transfer to an account maintained by the Depositary at The Depository
Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures
set forth in Section 3 of the Offer to Purchase (as defined below). Delivery of
documents to the Book-Entry Transfer Facility does not constitute delivery to
the Depositary. Stockholders who deliver Shares by book-entry transfer are
referred to herein as "Book-Entry Stockholders" and other stockholders are
referred to herein as "Certificate Stockholders."
Stockholders whose certificates evidencing Shares ("Share Certificates")
are not immediately available or who cannot deliver their Share Certificates and
all other documents required hereby to the Depositary or complete the procedures
for book-entry transfer prior to the Expiration Date (as defined in Section 1 of
the Offer to Purchase) must tender their Shares according to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. See
Instruction 2.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY AT THE BOOK-ENTRY TRANSFER
FACILITY, AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution:
-----------------------------------------------------------------------------
Account Number:
----------------------------------------------------------------------------
Transaction Code Number:
----------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED 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:
-----------------------------------------------------------
[ ] CHECK HERE IF DELIVERED BY BOOK-ENTRY TRANSFER
Account Number (if delivered by Book-Entry Transfer):
--------------------------------------------------
Transaction Code Number:
----------------------------------------------------------------------------
[ ] CHECK HERE IF YOU CANNOT LOCATE YOUR CERTIFICATE(S) AND REQUIRE ASSISTANCE
IN REPLACING THEM. UPON RECEIPT OF NOTIFICATION BY THIS LETTER OF
TRANSMITTAL, THE COMPANY'S STOCK TRANSFER AGENT WILL CONTACT YOU DIRECTLY
WITH REPLACEMENT INSTRUCTIONS.
BOXES ABOVE FOR USE BY ELIGIBLE INSTITUTIONS ONLY
2
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to InterVoice Acquisition Subsidiary III,
Inc., a Nevada corporation (the "Purchaser") and a wholly owned subsidiary of
InterVoice, Inc., a Texas corporation ("Parent"), the above-described shares of
common stock, no par value (the "Common Stock" or "Shares") of Brite Voice
Systems, Inc., a Kansas corporation (the "Company"), pursuant to the Purchaser's
offer to purchase 9,158,155 shares at a price of $13.40 per share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated May 3, 1999 (the "Offer to Purchase"), receipt of which
is hereby acknowledged, and in this Letter of Transmittal (which, together with
the Offer to Purchase and any amendments or supplements hereto or thereto,
constitute the "Offer"). The undersigned understands that the Purchaser reserves
the right to transfer or assign, in whole or in part from time to time, to any
affiliate of Parent the right to purchase Shares tendered pursuant to the Offer.
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), effective upon acceptance for payment of and payment for the
Shares tendered herewith, the undersigned hereby sells, assigns and transfers
to, or upon the order of the 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 (collectively,
"Distributions")) and irrevocably constitutes and appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares and all Distributions, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (a) deliver certificates for such Shares and all Distributions, or transfer
ownership of such Shares and all Distributions on the account books maintained
by a Book-Entry Transfer Facility, together, in any such case, with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Purchaser, upon receipt by the Depositary, as the undersigned's agent, of the
purchase price (adjusted, if appropriate, as provided in the Offer to Purchase),
(b) present such Shares and all Distributions for cancellation and transfer on
the Company's books and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Shares and all Distributions and that, when the same are accepted for payment by
the Purchaser, the Purchaser will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, claims, charges and
encumbrances, and the same will not be subject to any adverse claims. The
undersigned will, upon request, execute any signature guarantees or additional
documents deemed by the Depositary or the Purchaser to be necessary or desirable
to complete the sale, assignment and transfer of the tendered Shares and all
Distributions. In addition, the undersigned shall promptly remit and transfer to
the Depositary for the account of the Purchaser any such Distributions issued to
the undersigned, in respect of the tendered Shares, accompanied by documentation
of transfer, and pending such remittance or appropriate assurance thereof, the
Purchaser shall be entitled to all rights and privileges as owner of any such
Distributions and, subject to the terms of the Merger Agreement, may withhold
the entire purchase price or deduct from the purchase price the amount or value
thereof, as determined by the Purchaser, in its sole discretion.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby irrevocably appoints Rob-Roy J. Graham or Daniel D.
Hammond and each of them, and any other designees of the Purchaser, the
attorneys and proxies of the undersigned, each with full power of substitution,
to vote at any annual, special or adjourned meeting of the Company's
stockholders or otherwise act (including pursuant to written consent) in such
manner as each such attorney and proxy or his or her substitute shall in his or
her sole discretion deem proper, to execute any written consent concerning any
matter as each such attorney and proxy or his or her substitute shall in his or
her sole discretion deem proper with respect to, and to otherwise act with
respect to, all the Shares tendered hereby which have been accepted for payment
by the Purchaser prior to the time any such vote or action is taken (and any and
all Distributions issued or issuable in respect thereof) and with respect to
which the undersigned is entitled to vote. This
3
<PAGE> 4
appointment is effective when, and only to the extent that, the Purchaser
accepts for payment such Shares as provided in the Offer to Purchase. This power
of attorney and proxy is coupled with an interest in the tendered Shares, is
irrevocable and is granted in consideration of the acceptance for payment of
such Shares in accordance with the terms of the Offer. Such acceptance for
payment shall revoke all prior powers of attorney and proxies given by the
undersigned at any time with respect to such Shares and no subsequent powers of
attorney or proxies may be given by the undersigned (and, if given, will not be
deemed effective). The Purchaser reserves the right to require that, in order
for Shares to be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment of such Shares, the Purchaser must be able to exercise
full voting and other rights with respect to such Shares, including voting at
any stockholders meeting then scheduled.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase to
Purchaser and in the instructions hereto will constitute a binding agreement
between the undersigned and the Purchaser upon the terms and subject to the
conditions of the Offer. The undersigned recognizes that under certain
circumstances set forth in the Offer to Purchase, the Purchaser may not be
required to accept for payment any of the tendered Shares. The Purchaser's
acceptance for payment of Shares pursuant to the Offer will constitute a binding
agreement between the undersigned and the Purchaser upon the terms and subject
to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price of any Shares purchased, and/or
return any certificates for Shares not tendered or accepted for payment, in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered." Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price of any Shares
purchased, and/or any certificates for Shares not tendered or accepted for
payment (and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing under "Description of Shares Tendered." In the
event that both the Special Delivery Instructions and the Special Payment
Instructions are completed, please issue the check for the purchase price of any
Shares purchased, and/or return any certificates for Shares not tendered or
accepted for payment in the name(s) of, and mail said check and/or any
certificates to, the person or persons so indicated. Any stockholder tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such stockholder at the
Book-Entry Transfer Facility from which such transfer was made. The undersigned
recognizes that the Purchaser has no obligation pursuant to the Special Payment
Instructions to transfer any Shares from the name of the registered holder(s)
thereof if the Purchaser does not accept for payment any of the Shares so
tendered.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares or Share
Certificates evidencing Shares not tendered or not purchased are to be issued in
the name of someone other than the undersigned.
Issue check and/or certificate(s) to:
Name:
- ----------------------------------------
(Please Print)
Address
- --------------------------------------
- ------------------------------------------------
(Include Zip Code)
- ------------------------------------------------
Taxpayer Identification or Social Security Number
(see Substitute Form W-9)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)
To be completed ONLY if the check for the purchase of Shares purchased or Share
Certificates evidencing Shares not tendered or not purchased are to be mailed to
someone other than the undersigned, or to the undersigned at an address other
than that shown under "Description of Shares Tendered."
Mail check and/or certificate(s) to:
Name:
- ----------------------------------------
(Please Print)
Address
- --------------------------------------
- ------------------------------------------------
(Include Zip Code)
4
<PAGE> 5
IMPORTANT
STOCKHOLDER(S): SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature(s) of Holder(s)
Dated:
- ------------------------------------------------------------------, 199---
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Share Certificates or on a security position listing or by a person(s)
authorized to become 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.
See Instruction 5.)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please Print
Capacity:
- --------------------------------------------------------------------------------
Please Provide Full Title
Address:
- --------------------------------------------------------------------------------
Include Zip Code
Telephone No.:
- --------------------------------------------------------------------------------
Include Area Code
Taxpayer Identification or
Social Security Number:
- --------------------------------------------------------------------------------
See Substitute Form W-9
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
SPACE BELOW IS FOR USE BY FINANCIAL INSTITUTIONS ONLY. FINANCIAL INSTITUTIONS:
PLACE MEDALLION GUARANTEE IN SPACE PROVIDED BELOW.
5
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most commercial banks, savings and loan associations and
brokerage houses) that is a participant in the Security Transfer Agent's
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (each an "Eligible Institution,"
and collectively, "Eligible Institutions"). No signature guarantee is required
on this Letter of Transmittal (i) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in the Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of Shares tendered herewith,
unless such holder(s) has (have) completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" in
this Letter of Transmittal or (ii) if such Shares are tendered for the account
of an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by stockholders either
if Share Certificates are to be forwarded herewith or if a tender of Shares is
to be made pursuant to the procedures for delivery by book-entry transfer set
forth in Section 3 of the Offer to Purchase. For Shares to be validly tendered
pursuant to the Offer, either (i) a properly completed and duly executed Letter
of Transmittal (or facsimile thereof), together with any required signature
guarantees, 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, must be
received by the Depositary at one of the Depositary's addresses set forth herein
prior to the Expiration Date (as defined in the Offer to Purchase) and either
certificates for tendered Shares must be received by the Depositary at one of
such addresses or such Shares must be delivered pursuant to the procedures for
book-entry transfer (and a Book Entry Confirmation received by the Depositary),
in each case, prior to the Expiration Date, or (ii) the tendering stockholder
must comply with the guaranteed delivery procedure set forth below.
Stockholders whose Share Certificates are not immediately available or who
cannot complete the procedures for book-entry transfer on a timely basis or for
whom time will not permit all required documents to reach the Depositary prior
to the Expiration Date, may tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to
such procedures, (i) such tender must be made by or through an Eligible
Institution, (ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser (or facsimile
thereof), must be received by the Depositary prior to the Expiration Date and
(iii) the certificates for (or a Book-Entry Confirmation with respect to) such
Shares, together with this properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees, or,
in the case of a book-entry transfer, an Agent's Message, and any other required
documents are received by the Depositary within three trading days after the
date of execution of such Notice of Guaranteed Delivery, all as provided in
Section 3 of the Offer to Purchase. A "trading day" is any day on which the
Nasdaq National Market is open for business. The Notice of Guaranteed Delivery
may be delivered by hand to the Depositary or transmitted by telegram, facsimile
transmission or mail to the Depositary and must include a guarantee by an
Eligible Institution in the form set forth in such Notice of Guaranteed
Delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER.
SHARE CERTIFICATES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY
CONFIRMATION). 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 and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
6
<PAGE> 7
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers and/or the number
of Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule attached hereto.
4. PARTIAL TENDERS. If fewer than all the Shares evidenced by any Share
Certificate delivered to the Depositary herewith are to be tendered, fill in the
number of Shares which are to be tendered in the box entitled "Number of Shares
Tendered." In such case, new Share Certificates for the remainder of the Shares
that were evidenced by the Share Certificate(s) delivered to the Depositary
herewith will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the box entitled "Special Delivery Instructions" on
the reverse hereof, as soon as practicable after 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 Share Certificate(s) evidencing such shares without any change
whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and tendered hereby, no endorsements of Share Certificates or
separate stock powers are required unless payment or Share Certificates
evidencing Shares not tendered or not accepted for payment are to be issued in
the name of a person other than the registered holder(s), in which case 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) or such Share Certificate(s).
Signatures on such Share Certificate(s) or stock powers must be guaranteed by an
Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the certificates 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 Certificates. Signatures on such Share
Certificate(s) or stock powers must be guaranteed by an Eligible Institution.
See Instruction 1.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay, or cause to be paid, any stock transfer taxes with respect
to the transfer and sale of Shares to it or its assignee pursuant to the Offer.
If, however, payment of the purchase price of any Shares is to be made to, or if
Share Certificates evidencing Shares not tendered or accepted for payment are to
be issued in the name of, a person other than the registered holder(s), or if
tendered Share Certificates are registered in the name of a person other than
the person(s) signing this Letter of Transmittal, the amount of any stock
transfer taxes (whether imposed on the registered holder(s) or such person or
otherwise payable on the account of the transfer to such other person) will be
deducted from the purchase price of such Shares purchased, unless evidence
satisfactory to the Purchaser 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 tax stamps to be affixed to the Share Certificates
evidencing the Shares tendered hereby.
7
<PAGE> 8
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of and/or Share Certificates not accepted for payment are to be
returned to a person other than the signer of this Letter of Transmittal or if a
check is to be sent and/or such Share Certificates are to be returned to a
person other than the signer of this Letter of Transmittal or to an address
other than that shown in the box entitled "Description of Shares Tendered," the
appropriate boxes on this Letter of Transmittal should be completed. Any
stockholder tendering Shares by book-entry transfer will have any Shares not
accepted for payment returned by crediting the account maintained by such
stockholder at the Book-Entry Transfer Facility from which such transfer was
made.
8. WAIVER OF CONDITIONS. Except as otherwise provided in the Offer to
Purchase, the Purchaser reserves the absolute right, in its sole discretion, to
waive any of the conditions of the Offer or any defect or irregularity in the
tender of any Shares of any particular stockholder, whether or not similar
defects or irregularities are waived in the case of other stockholders.
9. SUBSTITUTE FORM W-9. The tendering stockholder (or other payee) is
required, unless an exemption applies, to provide the Depositary with a correct
Taxpayer Identification Number ("TIN"), generally the stockholder's social
security or U.S. federal employer identification number, and with certain other
information, on Substitute Form W-9, which is provided under "Important Tax
Information" below, and to certify under penalties of perjury, that such number
is correct and that the stockholder (or other payee) is not subject to backup
withholding. If a tendering stockholder is subject to backup withholding, he or
she must cross out item (2) of the Certification Box on Substitute Form W-9
before signing such Form. Failure to furnish the correct TIN on the Substitute
Form W-9 may subject the tendering stockholder (or other payee) to a $50 penalty
imposed by the Internal Revenue Service and payments of cash to the tendering
stockholder (or other payee) pursuant to the Offer may be subject to backup
withholding of 31%. If the tendering stockholder has not been issued a TIN and
has applied for a number or intends to apply for a number in the near future, he
or she should write "Applied For" in the space provided for the TIN in Part I,
sign and date the Substitute Form W-9 and sign and date the Certificate of
Awaiting Taxpayer Identification Number. If "Applied For" is written in Part I
and the Depositary is not provided with a TIN by the time of payment, the
Depositary will withhold 31% of all such payments for surrendered Shares
thereafter until a TIN is provided to the Depositary.
10. LOST OR DESTROYED CERTIFICATES. If any Share Certificate(s) has (have)
been lost or destroyed, the stockholder should check the appropriate box on the
Letter of Transmittal. The Company's stock transfer agent will then instruct
such stockholder as to the procedure to be followed in order to replace the
Share Certificate(s). The stockholder will have to post a surety bond of
approximately 2% of the current market value of the stock. This Letter of
Transmittal and related documents cannot be processed until procedures for
replacing lost or destroyed Share Certificates have been followed.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent at the locations and telephone numbers set
forth below.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY THEREOF),
TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES, OR IN THE CASE OF A BOOK-ENTRY
TRANSFER, AN AGENT'S MESSAGE, AND SHARE CERTIFICATES, OR A BOOK-ENTRY
CONFIRMATION, FOR SHARES AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY
THE DEPOSITARY, OR THE NOTICE OF GUARANTEED DELIVERY (OR A FACSIMILE COPY
THEREOF) MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
8
<PAGE> 9
IMPORTANT TAX INFORMATION
Under U.S. federal income tax law, a stockholder surrendering Shares must,
unless an exemption applies, provide the Depositary (as payer) with his correct
TIN on Substitute Form W-9 included in this Letter of Transmittal. If the
stockholder is an individual, his TIN is such stockholder's social security
number. If the correct TIN is not provided, the stockholder may be subject to a
$50 penalty imposed by the Internal Revenue Service and payments of cash to the
tendering stockholder (or other payee) pursuant to the Offer may be subject to
backup withholding of 31% of all payments of the purchase price.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding. In
order for an exempt foreign stockholder to avoid backup withholding, such person
should complete, sign and submit a Form W-8, Certificate of Foreign Status,
signed under penalties of perjury, attesting to such stockholder's exempt
status. A Form W-8 can be obtained from the Depositary. Exempt stockholders,
other than foreign stockholders, should furnish their TIN, write "Exempt" on the
face of the Substitute Form W-9 and sign, date and return the Substitute Form
W-9 to the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional
instructions.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of his correct TIN (or the TIN of any other
payee) by completing the Substitute Form W-9 included in this Letter of
Transmittal, certifying (1) that the TIN provided on the Substitute Form W-9 is
correct (or that such stockholder is awaiting a TIN), and (2) that the
stockholder is not subject to backup withholding because (i) the stockholder has
not been notified by the Internal Revenue Service that the stockholder is
subject to backup withholding as a result of a failure to report all interest
and dividends or (ii) the Internal Revenue Service has notified the stockholder
that the stockholder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the TIN, generally the
social security number or 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 stockholder has
not been issued a TIN and has applied for a number or intends to apply for a
number in the near future, he or she should write "Applied For" in the space
provided for the TIN in Part I, sign and date the Substitute Form W-9 and sign
and date the Certificate of Awaiting Taxpayer Identification Number, which
appears in a separate box below the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN by the time of
payment, the Depositary will withhold 31% of all payments of the purchase price
until a TIN is provided to the Depositary.
9
<PAGE> 10
<TABLE>
<S> <C> <C> <C>
PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK
PAYEE'S NAME:
BUSINESS NAME (IF DIFFERENT):
ADDRESS:
MARK APPROPRIATE BOX: [ ] Individual/Sole Proprietor [ ] Corporation [ ] Partnership [ ] Other
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE ---------------------------
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND Social Security Number(s)
DATING BELOW. OR
---------------------------
Employer Identification
Number(s)
DEPARTMENT OF THE TREASURY PART 2 -- CERTIFICATION -- Under PART 3 --
INTERNAL REVENUE SERVICE Penalties of Perjury, I certify that: Awaiting TIN [ ]
(1) The number shown on this form is my
correct taxpayer identification
number (or I am waiting for a number
to be issued for me), and
(2) I am not subject to backup
withholding because: (a) I am exempt from
backup withholding, or (b) 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 (c) the IRS has
notified me that I am no longer
subject to backup withholding.
PAYER'S REQUEST FOR TAXPAYER CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you
IDENTIFICATION NUMBER have been notified by the IRS that you are currently subject to backup
("TIN") withholding because you have failed to report all interest or dividends
on your tax return. THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR
CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS
REQUIRED TO AVOID BACKUP WITHHOLDING.
Signature ------------------------------------- Date
------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP WITHHOLDING OF 31% OF
ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER AND THE SOLICITATION.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
3 OF THE SUBSTITUTE FORM W-9.
<TABLE>
<S> <C>
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
(1) 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 (2) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a
taxpayer identification number within 60 days, 31% of all
reportable payments made to me thereafter may be withheld
until I provide a taxpayer identification number.
Signature
---------------------------------------------------- Date
---------------------------------
</TABLE>
10
<PAGE> 11
Questions and requests for assistance or additional copies of the Offer to
Purchase, Letter of Transmittal and other tender offer materials may be directed
to the Information Agent at the location and telephone numbers set forth below:
The Information Agent for the Offer is:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
Banks and Brokers Call Collect: (201) 896-1900
All Others Call Toll Free: (877) 460-2559
11
<PAGE> 1
EXHIBIT 99.(a)(3)
OFFER TO PURCHASE FOR CASH
9,158,155 SHARES OF COMMON STOCK
OF
BRITE VOICE SYSTEMS, INC.
AT
$13.40 NET PER SHARE
BY
INTERVOICE ACQUISITION SUBSIDIARY III, INC.
A CORPORATION FORMED BY
INTERVOICE, INC.
THE OFFER, THE PRORATION PERIOD, AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON JUNE 1, 1999, UNLESS THE OFFER IS EXTENDED.
May 3, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by InterVoice Acquisition Subsidiary III, Inc., a
Nevada corporation (the "Purchaser") and a wholly owned subsidiary of
InterVoice, Inc., a Texas corporation ("Parent"), to act as Information Agent in
connection with the Purchaser's offer to purchase 9,158,155 shares (the
"Shares") of common stock, no par value, of Brite Voice Systems, Inc., a Kansas
corporation (the "Company"), at a price of $13.40 per Share, net to the seller
in cash, without interest, upon the terms and subject to the conditions set
forth in the Purchaser's Offer to Purchase, dated May 3, 1999 (the "Offer to
Purchase"), and the related Letter of Transmittal (which, as amended or
supplemented from time to time, together constitute the "Offer") enclosed
herewith. The Offer is being made in connection with the Acquisition Agreement
and Plan of Merger, dated as of April 27, 1999, by and among Parent, the
Purchaser and the Company. Please furnish copies of the enclosed materials to
those of your clients for whose accounts you hold Shares registered in your name
or in the name of your nominee.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee we are enclosing
copies of the following documents:
1. Offer to Purchase;
2. Letter of Transmittal to tender Shares for your use and for the
information of your clients;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available or time will not
permit all required documents to reach the Depositary by the Expiration
Date (as defined in the Offer to Purchase) or if the procedure for
book-entry transfer cannot be completed on a timely basis;
4. A letter to stockholders of the Company from Stanley G. Brannan,
Chairman, President and Chief Executive Officer of the Company, together
with a Solicitation/Recommendation Statement on Schedule 14D-9 filed with
the Securities and Exchange Commission by the Company;
5. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
<PAGE> 2
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON JUNE 1, 1999, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i) the
certificates evidencing such Shares or timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities (as defined in the Offer to Purchase), (ii) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message (as defined in the
Offer to Purchase) in connection with a book-entry delivery, and (iii) any other
documents required by the Letter of Transmittal.
If holders of Shares wish to tender Shares, but cannot deliver such
holders' certificates or other required documents, or cannot comply with the
procedure for book-entry transfer, prior to the expiration of the Offer, a
tender may be effected by following the guaranteed delivery procedure described
in Section 3 of the Offer to Purchase.
Neither the Purchaser nor the Parent will pay any fees or commissions to
any broker, dealer or other person (other than the Information Agent) for
soliciting tenders of Shares pursuant to the Offer. However, upon request, the
Purchaser will reimburse you for customary mailing and handling expenses
incurred by you in forwarding any of the enclosed materials to your clients. The
Purchaser will pay or cause to be paid any stock transfer taxes payable with
respect to the transfer of Shares to it, except as otherwise provided in the
Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
Corporate Investor Communications, Inc., the Information Agent, at the addresses
and telephone numbers set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent at the address and telephone number set forth on the back
cover page of the Offer to Purchase.
Very truly yours,
CORPORATE INVESTOR COMMUNICATIONS, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL AUTHORIZE YOU
OR ANY OTHER PERSON TO ACT ON BEHALF OF OR AS THE AGENT OF THE PARENT, THE
PURCHASER, THE COMPANY, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY
AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY
DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED
THEREIN.
2
<PAGE> 1
EXHIBIT 99.(a)(4)
OFFER TO PURCHASE FOR CASH
9,158,155 SHARES OF COMMON STOCK
OF
BRITE VOICE SYSTEMS, INC.
AT
$13.40 NET PER SHARE
BY
INTERVOICE ACQUISITION SUBSIDIARY III, INC.
A CORPORATION FORMED BY
INTERVOICE, INC.
THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON JUNE 1, 1999, UNLESS THE OFFER IS EXTENDED.
May 3, 1999
To Our Clients:
Enclosed for your consideration are an Offer to Purchase, dated May 3, 1999
(the "Offer to Purchase"), and a related Letter of Transmittal (which, as
amended or supplemented from time to time, together constitute the "Offer")
relating to the offer by InterVoice Acquisition Subsidiary III, Inc., a Nevada
corporation (the "Purchaser") and a wholly owned subsidiary of InterVoice, Inc.,
a Texas corporation ("Parent"), to purchase 9,158,155 shares (the "Shares") of
common stock, no par value, of Brite Voice Systems, Inc., a Kansas corporation
(the "Company"), at a price of $13.40 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in the
Offer. The Offer is being made in connection with the Acquisition Agreement and
Plan of Merger, dated as of April 27, 1999, by and among Parent, the Purchaser
and the Company (the "Merger Agreement"). Also enclosed is the Letter to
Stockholders of the Company from Stanley G. Brannan, Chairman, President and
Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR
YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all of the Shares held by us (or our nominee) for
your account, upon the terms and subject to the conditions set forth in the
Offer.
Your attention is invited to the following:
1. The tender price is $13.40 per Share net to the seller in cash,
without interest.
2. The Offer is being made for 9,158,155 Shares. If more than
9,158,155 Shares are validly tendered prior to the expiration date of the
Offer, and not withdrawn, the Purchaser will, upon the terms and subject to
the conditions of the Offer, accept for payment (and thereby purchase) the
Shares purchased in the Offer on a pro rata basis, with adjustment to avoid
purchase of fractional Shares, based on the number of Shares validly
tendered prior to the expiration date and not withdrawn by each tendering
Stockholder.
<PAGE> 2
3. The Board of Directors of the Company has unanimously approved the
Merger Agreement and the transactions contemplated thereby, has determined
that each of the Merger Agreement and the transactions contemplated thereby
are fair to, and in the best interests of, the holders of the Common Stock
and recommends that the Company's holders tender their Shares in the Offer.
4. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on June 1, 1999, unless the Offer is extended.
5. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
the Purchaser pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
contained in this letter. An envelope in which to return your instructions to us
is enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified in your instructions. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR
BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto, and is being made to all
holders of Shares. The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the laws
of such jurisdiction. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of the Purchaser by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
9,158,155 SHARES OF COMMON STOCK
OF
BRITE VOICE SYSTEMS, INC.
BY
INTERVOICE ACQUISITION SUBSIDIARY III, INC.
A CORPORATION FORMED BY
INTERVOICE, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated May 3, 1999, and the related Letter of Transmittal
(which, as amended or supplemented from time to time, together constitute the
"Offer") relating to the offer by InterVoice Acquisition Subsidiary III, Inc., a
Nevada corporation and a wholly owned subsidiary of InterVoice, Inc., a Texas
corporation, to purchase 9,158,155 Shares of Common Stock, no par value, of
Brite Voice Systems, Inc., a Kansas corporation.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
<TABLE>
<S> <C>
Dated: ---------------------, 1999 SIGN HERE
- -------------------------------------------- --------------------------------------------
Number of Shares to be Tendered: --------------------------------------------
- ---------------- shares of Common Stock* Signature(s) of Holder(s)
- -------------------------------------------- Name(s) of Holder(s)
--------------------------------------------
--------------------------------------------
Please Type or Print
--------------------------------------------
Address
--------------------------------------------
Zip Code
--------------------------------------------
Area Code and Telephone Number
--------------------------------------------
Taxpayer Identification or Social Security
Number
</TABLE>
- ---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
3
<PAGE> 1
EXHIBIT 99.(a)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF 9,158,155 SHARES OF COMMON STOCK
OF
BRITE VOICE SYSTEMS, INC.
TO
INTERVOICE ACQUISITION SUBSIDIARY III, INC.
A CORPORATION FORMED BY
INTERVOICE, INC.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) if certificates
evidencing shares (the "Shares") of common stock, no par value (the "Common
Stock"), of Brite Voice Systems, Inc. (the "Company") are not immediately
available or time will not permit all required documents to reach Harris Trust
Company of New York as Depositary (the "Depositary"), prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase (as defined below)) or
the procedure for delivery by book-entry transfer cannot be completed on a
timely basis. This Notice of Guaranteed Delivery may be delivered by hand or
transmitted by telegram, facsimile transmission or mail to the Depositary. See
Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand/Overnight Delivery:
Wall Street Station (For Eligible Institutions Receive Window
P. O. Box 1023 Only) Wall Street Plaza
New York, New York 10268-1023 (212) 701-7636 88 Pine Street, 19th Floor
Confirm by Telephone: New York, New York 10005
(212) 701-7624
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, AND TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to InterVoice Acquisition Subsidiary III,
Inc., a Nevada corporation and a wholly owned subsidiary of InterVoice, Inc., a
Texas corporation, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated May 3, 1999 (the "Offer to Purchase"), and the related
Letter of Transmittal, receipt of each of which is hereby acknowledged, the
number of Shares specified below pursuant to the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase.
PLEASE CHECK RELEVANT BOX BELOW
Series and Certificate Nos. of Shares (if available):
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------
Common Stock, no par value Name(s) of Record Holder(s)
Certificate Nos. -----------------------------------------
- --------------------------------- -----------------------------------------
Please Type or Print
Number of Shares Tendered: -----------------------------------------
- --------------- [ ]
Address(es):
------------------------------------
-----------------------------------------
Zip Code
Area Code and Tel. No.:
-----------------------
Signature(s):
------------------------------------
Dated:
-----------------------------------------
- -----------------------------------------------------------------------------------------
</TABLE>
Check here if Shares will be delivered by book-entry transfer: [ ]
Account No.:
- ---------------------------------------
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR THE SIGNATURE GUARANTEE)
The undersigned, an Eligible Institution (as defined in the Offer to
Purchase), hereby guarantees delivery to the Depositary, at one of its addresses
set forth above, certificates ("Share Certificates") evidencing the Shares
tendered hereby, in proper form for transfer, or confirmation of book-entry
transfer of such Shares into the Depositary's account at The Depository Trust
Company with delivery of a Letter of Transmittal (or facsimile thereof) properly
completed and duly executed, or an Agent's Message (as defined in the Offer to
Purchase) in the case of a book-entry delivery, and any other required
documents, all within three days on which the Nasdaq National Market is open for
business after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and Share
Certificates to the Depositary within the time period shown herein. Failure to
do so could result in a financial loss to such Eligible Institution.
<TABLE>
<S> <C>
- -------------------------------------------- --------------------------------------------
Name of Firm Authorized Signature
- --------------------------------------------
Address Title:
- -------------------------------------------- --------------------------------------------
Zip Code Name:
- -------------------------------------------- --------------------------------------------
Area Code and Telephone No. Please Type or Print
Dated:
----------------------------------------,199
-
</TABLE>
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE> 1
EXHIBIT 99.(a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER -- Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e., 00-0000000. The table below will help determine the name
and number to give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE NAME
AND SOCIAL
SECURITY
NUMBER OF --
- -----------------------------------------------------
<C> <S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, the
first individual on
the account(1)
3. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
4. a. The usual revocable The grantor-
savings trust trustee(1)
account (grantor is
also trustee)
b. So-called trust The actual owner(1)
account that is not a
legal or valid trust
under state law
5. Sole proprietorship The owner(3)
account
- -----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE NAME
AND EMPLOYER
IDENTIFICATION
NUMBER OF --
- -----------------------------------------------------
<C> <S> <C>
6. A valid trust, estate, Legal entity (Do not
or pension trust furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title.)(4)
7. Corporate account The corporation
8. Association, club, The organization
religious, charitable,
educational, or other
tax-exempt organization
account
9. Partnership The partnership
10. A broker or registered The broker or nominee
nominee
11. Account with the The public entity
Department of
Agriculture in the name
of a public entity
(such as a state or
local government,
school district or
prison) that receives
agricultural program
payments
- ---
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name. You may also enter your business or
"doing business as" name. You may use either your social security number or,
if you have one, your employer identification number.
(4) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name listed, the number
will be considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at a local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number. You may also obtain Form SS-4 by calling the IRS at 1-800-TAX-FORM.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- An organization exempt from tax under section 501(a), or an individual
retirement account.
- The United States or any wholly-owned agency or instrumentality thereof.
- A state, the District of Columbia, a possession of the United States, or any
political subdivision or wholly-owned agency or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or any
wholly-owned agency or instrumentality thereof.
- An international organization or any wholly-owned agency or instrumentality
thereof.
Payees specifically exempted from backup withholding on interest and dividend
payments include the following:
- A corporation.
- A financial institution.
- A registered dealer in securities or commodities registered in the U.S., the
District of Columbia, or a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947.
- An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- A foreign central bank of issue.
- A middleman known in the investment community as a nominee or who is listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
that have at least one nonresident partner.
- Payments of patronage dividends not paid in money.
- Payments made by certain foreign organizations.
- Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
Exempt payees described above may file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE
FORM, AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045, 6049,
6050A, 6050N, and their regulations.
PRIVACY ACT NOTICE. Section 6109 requires most recipients of dividend, interest,
or other payments to give taxpayer identification numbers to payers who must
report the payments to IRS. IRS uses the numbers for identification purposes and
to help verify the accuracy of tax returns. The IRS also may provide this
information to the Department of Justice for civil and criminal litigation and
to cities, states, and the District of Columbia to carry out their tax laws.
Payers must be given the numbers whether or not recipients are required to file
tax returns. Payers must generally withhold 31% of taxable interest, dividend,
and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION, CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE> 1
EXHIBIT 99.(a)(7)
IV PRESS RELEASE
FOR IMMEDIATE RELEASE
CONTACT:
InterVoice, Inc.
Rob-Roy J. Graham
Chief Financial Officer
(972) 454-8712
16-99
INTERVOICE AND BRITE TO MERGE
DALLAS, TEXAS - APRIL 27, 1999 - InterVoice, Inc. (InterVoice) and Brite Voice
Systems, Inc. (Brite) jointly announced that they have signed a definitive
merger agreement in which InterVoice will acquire all the outstanding shares of
Brite common stock. Pursuant to the agreement, InterVoice will pay Brite
shareholders $13.40 per Brite share, or based on approximately 12.3 million
shares of Brite common stock currently outstanding, a total consideration of
approximately $164.4 million. Of this total, approximately $122.7 million, or
$10.00 per Brite share, will be in cash and approximately $41.7 million, or
$3.40 per Brite share, will be in shares of InterVoice common stock.
The transaction will be executed in two steps, the first being an all cash
tender offer at $13.40 per share for approximately 9.2 million shares of Brite's
common stock. The second step will consist of a merger in which shares of Brite
common stock not purchased in the cash tender offer will be exchanged into
shares of InterVoice common stock. The ratio of exchange will be determined at
the time of the merger based on the average closing price of an InterVoice share
for the preceding twenty-five trading days. This transaction has been approved
by the Boards of Directors of Brite and InterVoice. InterVoice has obtained a
commitment for acquisition financing from Bank of America and expects to
commence the cash tender offer on or before May 3, 1999. The closing of the
transaction is subject to completion of the acquisition financing and certain
other customary conditions as described in the merger agreement.
"I am very pleased to merge InterVoice with Brite," said Daniel D. Hammond,
InterVoice's Chairman and CEO. "The resultant company, which we plan to call
InterVoice-Brite and to headquarter in Dallas, creates a hands-down leader in
the call automation industry. The merger of our companies will provide clear
benefits to our major constituents: our customers, our shareholders and our
employees."
Mr. Hammond will serve as Chairman of the Board and CEO of InterVoice-Brite.
Stanley G. Brannan, currently Brite's Chairman, CEO and President, has agreed to
serve on the Board of Directors of InterVoice-Brite as vice-chairman. Senior
members of InterVoice-Brite management team will be David A. Berger, President
and COO, and Rob-Roy J. Graham, CFO. Senior Brite managers, Ray S. Naeini and
Donald (Scotty) R. Walsh, will report to Mr. Berger as Executive Vice
Presidents.
- more -
<PAGE> 2
"Merging InterVoice and Brite makes a lot of sense," said Mr. Brannan. "The
combined marketing, customer support and product development organizations
should produce better long term growth and success. I am excited about my role
as vice-chairman, and I expect to work very hard to make sure the anticipated
benefits of this merger are achieved for our customers, employees and
shareholders."
"The InterVoice-Brite merger creates a worldwide engine for accelerated growth
in the call automation market," said Mr. Hammond. "The past investments made by
InterVoice and Brite customers will be preserved by a product plan which will
bridge our mutual installed bases to benefit from emerging technologies such as
'hands-free' IVR and Internet telephony."
"Both Brite and InterVoice value their respective world class teams of
employees," said Mr. Brannan. "The combination of our companies will only serve
to provide more opportunities for our employees and to attract the talent from
the industry needed to propel InterVoice-Brite growth."
"The InterVoice-Brite combination achieves a more balanced sales mix, whether it
be between domestic sales and international sales, or between IVR sales and
Telco sales, or between systems and services," continued Mr. Hammond. "In
addition, this merger serves shareholder interests well. It allows for
leveraging a single infrastructure to enhance profitability of the companies'
combined operations and to focus spending on those areas with the most sales
growth potential, be it technology investments or investments in new sales
geographies."
"Our companies fit together very well," said Messrs. Hammond and Brannan. "There
are immediate synergies from the outset of the merger and even more to be
realized as the companies combine their operations. We are very excited about
this merger and look forward to continued success."
A conference call is scheduled for 10:30 a.m., CDT, on Tuesday, April 27, 1999,
in which senior members of the InterVoice and Brite management teams will
discuss and answer questions about this merger. The conference call number is
(913) 981-5509 and the identification number is 679296. A replay of the
conference call will be available at 1:30 p.m., CDT, on Tuesday, April 27, 1999
and will run through midnight, CDT, Tuesday, May 4, 1999. The replay phone
number is (719) 457-0820 and the identification number is 679296. Also, replays
of the conference call can be accessed via the Internet at InterVoice's home
page: http://www.intervoice.com.
This press release and public oral statements by InterVoice and Brite
representatives may contain forward-looking information that is subject to
certain risks and uncertainties that could cause actual results to vary from
those projected. Statements that are not historical facts, including statements
about confidence in strategies, plans and expectations about
- more -
<PAGE> 3
new and existing products and their market acceptance, expectations about future
revenues and earnings, industry growth and demand, and returns on investments in
products and markets are forward-looking statements that involve risks and
uncertainties that could materially impact the companies and the merged company
results from operations. For a discussion of the risks and uncertainties that
could materially impact the companies and their results from operations, please
see InterVoice's and Brite's Forms 10-K and Forms 10-Q, and other filings, filed
with the Securities and Exchange Commission.
InterVoice, Inc. (NASDAQ:INTV), is a leading global supplier of call automation
systems for call centers, enhanced network-based services for telecommunications
service providers and the world's largest supplier of interactive voice response
systems. With nearly 12,000 systems shipped to 52 countries, InterVoice's
solutions are used to increase revenues, decrease costs, and deliver exceptional
customer service. InterVoice, an ISO 9001 certified company, is headquartered in
Dallas, Texas, USA and has representative offices in the Americas, Europe, and
Asia-Pacific. Company information and interactive product demonstrations are
available on the World Wide Web at http://www.intervoice.com.
Brite Voice Systems, Inc. (NASDAQ:BVSI), is a world leader in providing enhanced
telecommunications systems and interactive information systems. Brite's products
include prepaid, messaging, voice mail, voice activated dialing, enhanced
calling cards, as well as interactive information and IVR-CTI applications. The
company also provides managed service capabilities for these products. Brite is
certified ISO 9001/TickIT, a globally accepted quality management recognition.
Brite's certification includes the design, development, manufacture,
installation and support of computer-based voice and multimedia systems. The
certification also includes the company's associated managed services,
information services and training services.
<PAGE> 1
EXHIBIT 99.(a)(8)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer (as defined below) is made solely
by the Offer to Purchase dated May 3, 1999 ("Offer to Purchase") and the related
Letter of Transmittal and is being made to all holders of Shares. The Offer is
not being made to (nor will tenders be accepted from or on behalf of) holders of
Shares in any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction or any
administrative or judicial action pursuant thereto. In any jurisdiction where
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of the
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
OFFER TO PURCHASE FOR CASH
9,158,155 SHARES OF COMMON STOCK
OF
BRITE VOICE SYSTEMS, INC.
AT
$13.40 NET PER SHARE
BY
INTERVOICE ACQUISITION SUBSIDIARY III, INC.
A CORPORATION FORMED BY
INTERVOICE, INC.
InterVoice Acquisition Subsidiary III, Inc., a Nevada corporation (the
"Purchaser") and a wholly owned subsidiary of InterVoice, Inc., a Texas
corporation ("Parent"), is offering to purchase 9,158,155 shares (the "Shares")
of common stock, no par value (the "Common Stock"), of Brite Voice Systems,
Inc., a Kansas corporation (the "Company"), for $13.40 per Share (the "Offer
Price"), net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase and in the related Letter of Transmittal
(which, together with any amendments or supplements thereto, collectively
constitute the "Offer").
- --------------------------------------------------------------------------------
THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JUNE 1, 1999,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The purpose of the Offer is for the Purchaser to acquire a substantial
majority of the outstanding Shares and thereby control the business of and
future decisions affecting the Company. Upon completion of the Offer, it is
expected that the Purchaser will own approximately seventy-five percent (75%) of
the outstanding Shares. The Offer is being made pursuant to an Acquisition
Agreement and Plan of Merger, dated as of April 27, 1999 (the "Merger
Agreement"), by and among Parent, the Purchaser and the Company pursuant to
which, as soon as practicable after the completion of the Offer and satisfaction
or waiver, if permissible, of all conditions to the Merger (as defined below),
the Purchaser will be merged with and into the Company and the corporate
existence of the Purchaser will thereupon cease. The merger, as effected
pursuant to the immediately preceding sentence, is referred to herein as the
"Merger," and the Company as the surviving corporation of the Merger, is
sometimes herein referred to as the "Surviving Corporation." The purpose of the
Merger is to acquire all outstanding Shares not purchased pursuant to the Offer.
The transaction is structured as a merger to ensure the acquisition by Parent of
all the outstanding Shares.
At the effective time of the Merger (the "Effective Time"), each Share
of Common Stock then outstanding (other than Shares held by Parent or the
Purchaser or held in treasury of the Company or by any subsidiary of the
Company, which will be cancelled and retired without any payment with respect
thereto, or Shares (the "Dissenting Shares") with respect to which the holder
properly exercises such holder's appraisal rights, if any, under Kansas law
(collectively, the "Excluded Shares")) will be cancelled and converted
automatically into the right to receive either: (1) if the Purchaser purchases
9,158,155 Shares in the Offer (the "Cash Share Number") or, in the sole
discretion of the Purchaser, more than the Cash Share Number, that number of
fully paid and nonassessable shares of common stock, no par value per share, of
<PAGE> 2
Parent ("Parent Common Stock"), together with associated preferred stock
purchase rights, equal to the quotient of (x) the Offer Price divided by (y) the
average of the per share closing price of Parent Common Stock on the Nasdaq
National Market for the 25 trading days immediately preceding the Effective Time
(the "Average Trading Price"), provided that the Average Trading Price shall be
at least equal to the Lower Collar (as defined below) and shall not exceed
$14.00 per share; or (2) if the Purchaser lowers the Minimum Condition (as
defined below) to a majority of the issued and outstanding Common Stock on a
fully diluted basis and the number of Shares purchased in the Offer is less than
the Cash Share Number, (a) an amount in cash equal to the quotient of (w) the
difference between (i) the product of the Offer Price multiplied by the Cash
Share Number and (ii) the aggregate purchase price for the number of Shares
actually purchased in the Offer, divided by (x) a number of shares equal to (A)
the total number of shares of Common Stock issued and outstanding immediately
prior to the Effective Time (B) less the Excluded Shares (C) plus the Dissenting
Shares (such quotient, referred to as the "Cash Amount"), plus (b) that number
of shares of Parent Common Stock equal to the quotient of (y) the difference
between the Offer Price and the Cash Amount, divided by (z) the Average Trading
Price. The term "Lower Collar" is $8.00, provided, however, if a Lower Collar of
$8.00 would result in the issuance of more than 5,719,877 shares of Parent
Common Stock in the Merger (assuming for purposes of this calculation that all
outstanding options under the Company's stock option plans that have not been
canceled or repurchased by the Company pursuant to the Merger Agreement at or
prior to the completion of the Offer are exercised in full immediately prior to
the Effective Time and there are no Dissenting Shares), the Lower Collar shall
be an amount per share equal to the product of (i) $8.00 multiplied by (ii) a
fraction of which (A) the numerator is the total number of shares of Parent
Common Stock that would be issued in the Merger if the Lower Collar were $8.00,
assuming the exercise in full of all outstanding stock options and there are no
Dissenting Shares, and (B) the denominator is 5,719,877. The foregoing
consideration shall be referred to collectively as the "Merger Consideration."
The Merger Agreement is more fully described in Section 11 of the Offer to
Purchase.
At the Effective Time, all Shares shall no longer be outstanding and
shall be cancelled and retired and shall cease to exist (in the case of Excluded
Shares other than Dissenting Shares, without the payment of consideration
therefor), and each certificate formerly representing any of such Shares, other
than the Excluded Shares, shall thereafter represent the right to receive the
Merger Consideration and the right, if any, to receive cash in lieu of
fractional shares of Parent Common Stock pursuant to the Merger Agreement,
without interest.
If more than 9,158,155 Shares are validly tendered prior to the
Expiration Date and not withdrawn, the Purchaser will, upon the terms and
subject to the conditions of the Offer, accept for payment (and thereby
purchase) 9,158,155 Shares on a pro rata basis, with adjustments to avoid
purchases of fractional Shares, based on the number of Shares validly tendered
prior to the Expiration Date (as defined below) and not withdrawn by each
tendering stockholder. If proration is required, the Purchaser would not expect
to announce the final results of the proration until at least seven Nasdaq
National Market trading days after the Expiration Date. Tendering stockholders
will not receive payment for Shares accepted for payment pursuant to the Offer
until the final proration factor is known. Subject to the terms of the Merger
Agreement, the Purchaser reserves the right (but shall not be obligated) to
accept for payment more than 9,185,155 Shares pursuant to the Offer, although
the Purchaser has no present intention of doing so.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER
AND THE MERGER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER, AT LEAST
9,158,155 SHARES (THE "MINIMUM CONDITION").
As a condition and inducement to Parent and the Purchaser to enter into
the Merger Agreement and incurring the liabilities therein, certain major
stockholders (the "Major Stockholders") concurrently with the execution and
delivery of the Merger Agreement, have entered into a Stockholder Agreement with
Parent and the Purchaser (the "Stockholder Agreement"). Pursuant to the
Stockholder Agreement, the Major
2
<PAGE> 3
Stockholders have agreed, among other things, to tender the Shares held by them
in the Offer, to agree to the cancellation of any stock options each such Major
Stockholder holds on the date thereof, and to grant Parent a proxy with respect
to the voting of such Shares in favor of the Merger.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares properly tendered to the
Purchaser and not withdrawn as, if and when the Purchaser gives oral or written
notice to Harris Trust Company of New York (the "Depositary") of the Purchaser's
acceptance for payment of such Shares. Upon the terms and subject to the
conditions of the Offer, payment for Shares accepted for payment pursuant to the
Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payment from the Purchaser and transmitting payment to tendering
stockholders. In all cases, payment for Shares accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or a timely Book-Entry Confirmation (as defined in
the Offer to Purchase) with respect thereto), (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase) and (iii) any other documents
required by the Letter of Transmittal. The per Share consideration paid to any
holder of Common Stock pursuant to the Offer will be the highest per share
consideration paid to any other holder of such Shares pursuant to the Offer.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY
THE PURCHASER FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT.
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn pursuant to the
procedures set forth below at any time prior to the Expiration Date (as defined
in the Offer to Purchase) and, unless theretofore accepted for payment and paid
for by the Purchaser pursuant to the Offer, may also be withdrawn at any time
after June 30, 1999 unless the Offer is extended past that date.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of the Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered by an Eligible
Institution (as defined in Section 3 of the Offer to Purchase), the signatures
on the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been delivered pursuant to the procedures for book-entry transfer as
set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must
also specify the name and number of the account at the Book-Entry Transfer
Facility (as defined in the Offer to Purchase) to be credited with the withdrawn
Shares and otherwise comply with the Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by again following one of the
procedures described in Section 3 of the Offer to Purchase at any time prior to
the Expiration Date.
The term "Expiration Date" shall mean 12:00 Midnight, New York City
time, on June 1, 1999, unless and until the Purchaser, in accordance with the
terms of the Merger Agreement, shall have extended the period of time for which
the Offer is open, in which event the term "Expiration Date" shall mean the
latest time and date at which the Offer, as so extended by the Purchaser, shall
expire.
All questions as to the form and validity (including time of receipt)
of notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding. None of Parent, the
Purchaser, the Depositary, the Information Agent or any other person will be
under any duty to
3
<PAGE> 4
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
Subject to the terms of the Merger Agreement, the Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time, to
extend the period of time during which the Offer is open and thereby delay
acceptance for payment of, and the payment for, any Shares by giving oral or
written notice of such extension to the Depositary.
The information required to be disclosed by paragraph (e)(1)(vii) of
Rule 14d-6 under the Securities Exchange Act of 1934, as amended, is contained
in the Offer to Purchase and is incorporated herein by reference.
The Company has provided the Purchaser with the Company's stockholder
lists and security position listings for the purpose of disseminating the Offer
to holders of Shares. The Offer to Purchase, the related Letter of Transmittal
and other relevant documents will be mailed by the Purchaser to record holders
of Shares and will be furnished by the Purchaser to brokers, dealers, banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder lists, or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance or additional copies of the Offer
to Purchase, Letter of Transmittal and other tender offer documents may be
directed to the Information Agent at the address and telephone numbers set forth
below, and copies will be furnished at the Purchaser's expense. The Purchaser
will not pay any fees or commissions to any broker or dealer or other person
(other than the Information Agent) for soliciting tenders of Shares pursuant to
the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
Banks and Brokers Call Collect: (201) 896-1900
All Others Call Toll Free: (877) 460-2559
May 3, 1999
4
<PAGE> 1
EXHIBIT 99.(c)(1)
ACQUISITION AGREEMENT AND PLAN OF MERGER
by and among
INTERVOICE, INC.
INTERVOICE ACQUISITION SUBSIDIARY III, INC.
and
BRITE VOICE SYSTEMS, INC.
dated as of
April 27, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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ARTICLE I - THE OFFER AND MERGER..................................................................................2
Section 1.1 The Offer..............................................................................2
Section 1.2 The Company Actions....................................................................3
Section 1.3 Directors..............................................................................5
Section 1.4 The Merger.............................................................................6
Section 1.5 Effective Time.........................................................................6
Section 1.6 Closing................................................................................7
Section 1.7 Directors and Officers of the Surviving Corporation....................................7
Section 1.8 Effect of the Merger...................................................................7
Section 1.9 Subsequent Actions.....................................................................7
Section 1.10 Stockholders' Meeting..................................................................7
Section 1.11 Proxy Statement/Registration Statement.................................................8
Section 1.12 Directors of InterVoice................................................................8
ARTICLE II - CONVERSION OF SECURITIES.............................................................................9
Section 2.1 Conversion of Capital Stock............................................................9
Section 2.2 Dissenting Shares.....................................................................10
Section 2.3 Surrender of All Shares of Common Stock; Stock Transfer Books.........................11
Section 2.4 The Company Stock Plans...............................................................12
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................................................13
Section 3.1 Organization; Qualification; Charter and Bylaws.......................................13
Section 3.2 Capitalization........................................................................15
Section 3.3 Authorization; Validity of Agreement; Company Action..................................16
Section 3.4 Consents and Approvals; No Violations.................................................16
Section 3.5 SEC Reports and Financial Statements..................................................17
Section 3.6 Absence of Certain Changes............................................................18
Section 3.7 No Undisclosed Liabilities............................................................18
Section 3.8 Claims................................................................................18
Section 3.9 Employee Benefit Plans; ERISA.........................................................19
Section 3.10 Taxes.................................................................................22
Section 3.11 Contracts.............................................................................24
Section 3.12 Real Property and Leased Property.....................................................25
Section 3.13 Intellectual Property.................................................................26
Section 3.14 Year 2000 Compliance..................................................................30
Section 3.15 Labor Matters.........................................................................31
Section 3.16 Compliance with Laws..................................................................32
Section 3.17 Environmental Matters.................................................................32
Section 3.18 Product Liability.....................................................................33
Section 3.19 Information in Disclosure Documents...................................................33
Section 3.20 Potential Conflict of Interest........................................................34
Section 3.21 Insurance.............................................................................34
</TABLE>
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<TABLE>
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Section 3.22 Suppliers and Customers...............................................................34
Section 3.23 Accounts Receivable; Inventory........................................................35
Section 3.24 Title and Condition of Properties.....................................................35
Section 3.25 Illegal Payments......................................................................36
Section 3.26 Phoenix Acquisition...................................................................36
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER .........................................36
Section 4.1 Organization; Qualification; Charter and Bylaws.......................................36
Section 4.2 Capitalization........................................................................37
Section 4.3 Authorization; Validity of Agreement; Necessary Corporate Action......................39
Section 4.4 Consents and Approvals; No Violations.................................................39
Section 4.5 SEC Reports and Financial Statements..................................................40
Section 4.6 Absence of Certain Changes............................................................40
Section 4.7 No Undisclosed Liabilities............................................................40
Section 4.8 Claims................................................................................41
Section 4.9 Employee Benefit Plans; ERISA.........................................................41
Section 4.10 Taxes.................................................................................44
Section 4.11 Contracts.............................................................................46
Section 4.12 Real Property and Leased Property.....................................................47
Section 4.13 Intellectual Property.................................................................48
Section 4.14 Year 2000 Compliance..................................................................52
Section 4.15 Labor Matters.........................................................................53
Section 4.16 Compliance with Laws..................................................................53
Section 4.17 Environmental Matters.................................................................53
Section 4.18 Product Liability.....................................................................54
Section 4.19 Information in Disclosure Documents...................................................54
Section 4.20 Potential Conflict of Interest........................................................55
Section 4.21 Insurance.............................................................................55
Section 4.22 Suppliers and Customers...............................................................56
Section 4.23 Accounts Receivable; Inventory........................................................56
Section 4.24 Title and Condition of Properties.....................................................56
Section 4.25 Illegal Payments......................................................................57
Section 4.26 Financing.............................................................................57
Section 4.27 Shares Owned by Parent, Purchaser and Affiliates......................................57
ARTICLE V - CONDUCT OF BUSINESS PENDING THE MERGER...............................................................57
Section 5.1 Acquisition Proposals.................................................................57
Section 5.2 Interim Operations of the Company.....................................................58
Section 5.3 No Solicitation and Fiduciary Out.....................................................60
ARTICLE VI - ADDITIONAL AGREEMENTS...............................................................................61
Section 6.1 Additional Agreements.................................................................61
Section 6.2 Notification of Certain Matters.......................................................62
Section 6.3 Access; Confidentiality...............................................................62
Section 6.4 Consents and Approvals................................................................63
Section 6.5 Brokers or Finders....................................................................63
</TABLE>
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<TABLE>
<S> <C> <C>
Section 6.6 Publicity.............................................................................64
Section 6.7 Directors' and Officers' Insurance and Indemnification................................64
Section 6.8 Purchaser Compliance..................................................................65
Section 6.9 Nasdaq National Market Listing and De-Listing.........................................65
Section 6.10 Agreement of Affiliates...............................................................65
Section 6.11 Reasonable Best Efforts...............................................................65
Section 6.12 No Repurchase of Parent Common Stock..................................................66
Section 6.13 Company Stock Plan Amendments.........................................................66
ARTICLE VII - CONDITIONS.........................................................................................66
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger............................66
Section 7.2 Conditions to Obligations by Parent and the Purchaser to Effect the Merger............67
ARTICLE VIII - TERMINATION.......................................................................................67
Section 8.1 Termination...........................................................................67
Section 8.2 Effect of Termination.................................................................68
ARTICLE IX - MISCELLANEOUS.......................................................................................70
Section 9.1 Amendment and Modification............................................................70
Section 9.2 Non-survival of Representations and Warranties........................................70
Section 9.3 Expenses..............................................................................70
Section 9.4 Notices...............................................................................70
Section 9.5 Interpretation........................................................................71
Section 9.6 Counterparts..........................................................................71
Section 9.7 Entire Agreement; No Third Party Beneficiaries........................................71
Section 9.8 Severability..........................................................................72
Section 9.9 Governing Law.........................................................................72
Section 9.10 Assignment............................................................................72
Exhibit A - Stockholders' Agreement
Exhibit B - Affiliate Letter
</TABLE>
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Index of Defined Terms
<TABLE>
<CAPTION>
Defined Term Section No.
- ------------ -----------
<S> <C>
1984 Plan.......................................................................................................2.4
1994 Plan.......................................................................................................2.4
Acquisition Proposal............................................................................................5.1
Acquisition Proposal Interest...................................................................................5.1
Affiliate Agreement............................................................................................6.10
Affiliate Letter...............................................................................................6.10
Agreement..................................................................................................Recitals
Appointment Date................................................................................................5.2
Articles of Incorporation.......................................................................................1.4
Audit.......................................................................................................3.10(b)
Average Trading Price.....................................................................................2.1(b)(1)
Bank...........................................................................................................4.26
By-Laws......................................................................................................1.2(a)
Cash Amount...............................................................................................2.1(b)(2)
Cash Share Number.........................................................................................2.1(b)(1)
Certificates.................................................................................................2.3(b)
Claims ........................................................................................................ 3.8
Closing.........................................................................................................1.6
Closing Date....................................................................................................1.6
Code....................................................................................................3.9(b)(vii)
Commitment Letter..............................................................................................4.26
Common Stock...............................................................................................Recitals
Company....................................................................................................Recitals
Company Agreements..............................................................................................3.4
Company Balance Sheet.......................................................................................3.23(a)
Company's Board of Directors...............................................................................Recitals
Company Disclosure Schedules............................................................................Article III
Company Material Adverse Effect..............................................................................3.1(a)
Company SEC Documents...........................................................................................3.5
Company Stock Plans.............................................................................................2.4
Company Year 2000 Representations...........................................................................3.14(b)
Computer Software...........................................................................................3.13(b)
Confidentiality Agreement....................................................................................5.3(b)
D&O Insurance................................................................................................6.7(b)
Date-Sensitive Data.........................................................................................3.14(c)
Date-Sensitive System.......................................................................................3.14(d)
Debt Financing.................................................................................................4.26
Director Plan...................................................................................................2.4
Dissenting Shares............................................................................................2.1(b)
Dissenting Stockholders......................................................................................2.1(b)
Effective Time..................................................................................................1.5
Encumbrances.................................................................................................3.2(b)
</TABLE>
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<TABLE>
<S> <C>
Environmental Claim.........................................................................................3.17(c)
Environmental Laws..........................................................................................3.17(a)
ERISA Affiliate..............................................................................................3.9(a)
ERISA Plans..................................................................................................3.9(a)
ESPP............................................................................................................2.4
Exchange Act.................................................................................................1.1(a)
Exchange Agent...............................................................................................2.3(a)
Excluded Shares..............................................................................................2.1(b)
Exercise/No Dissenters Presumption...........................................................................2.1(b)
Financial Statements............................................................................................3.5
GAAP............................................................................................................3.5
Governmental Entity.............................................................................................3.4
HSR Act.........................................................................................................3.4
Indebtedness.................................................................................................3.2(d)
Indemnified Party............................................................................................6.7(a)
Independent Directors........................................................................................1.3(c)
Intellectual Property.......................................................................................3.13(d)
KGCC.......................................................................................................Recitals
Lanham Act..................................................................................................3.13(n)
Licensed Product Software...................................................................................3.13(d)
Lower Collar.................................................................................................2.1(b)
Major Stockholders.........................................................................................Recitals
Materials of Environmental Concern..........................................................................3.17(a)
Merger..........................................................................................................1.4
Merger Consideration.........................................................................................2.1(b)
Minimum Condition............................................................................................1.1(a)
NGCL.......................................................................................................Recitals
Offer......................................................................................................Recitals
Offer Documents..............................................................................................1.1(c)
Offer Price................................................................................................Recitals
Offer to Purchase............................................................................................1.1(a)
Other Products..............................................................................................3.14(b)
Parent.....................................................................................................Recitals
Parent Agreements...............................................................................................4.4
Parent Balance Sheet .......................................................................................4.23(a)
Parent Claims...................................................................................................4.8
Parent Common Stock.......................................................................................2.1(b)(1)
Parent Computer Software....................................................................................4.13(b)
Parent Disclosure Schedules..............................................................................Article IV
Parent ERISA Affiliate ......................................................................................4.9(a)
Parent ERISA Plans ..........................................................................................4.9(a)
Parent Financial Statements.....................................................................................4.5
Parent Intellectual Property ...............................................................................4.13(d)
Parent Licensed Product Software ...........................................................................4.13(d)
Parent Material Adverse Effect...............................................................................4.1(a)
Parent Other Products ......................................................................................4.14(b)
</TABLE>
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<TABLE>
<S> <C>
Parent Plans.................................................................................................4.9(a)
Parent Preferred Stock ..................................................................................... 4.2(a)
Parent Product Software ....................................................................................4.13(c)
Parent Real Property........................................................................................4.12(a)
Parent SEC Documents ...........................................................................................4.5
Parent SPD ..............................................................................................4.9(b)(vi)
Parent Stock Plans...........................................................................................4.2(a)
Parent Voting Debt...........................................................................................4.2(a)
Parent Work For Hire Agreements ............................................................................4.13(g)
Parent Year 2000 Representations ...........................................................................4.14(b)
Payment Fund.................................................................................................2.3(a)
PBGC.........................................................................................................3.9(c)
Person..........................................................................................................9.5
Plans........................................................................................................3.9(a)
Preferred Stock .............................................................................................3.2(a)
Product Software............................................................................................3.13(c)
Proxy Statement.............................................................................................1.11(a)
PTSOP ..........................................................................................................2.4
Purchaser..................................................................................................Recitals
Purchaser Common Stock..........................................................................................2.1
Real Property...............................................................................................3.12(a)
Registration Statement .....................................................................................1.11(a)
Rights.........................................................................................................1.11
Schedule 14D-l...............................................................................................1.1(c)
Schedule 14D-9...............................................................................................1.2(b)
SEC..........................................................................................................1.1(c)
Secretaries of State............................................................................................1.5
Securities Act..............................................................................................1.11(a)
Shares.....................................................................................................Recitals
Software Acquisition Agreements.............................................................................3.13(g)
SPD......................................................................................................3.9(b)(iv)
Special Meeting.............................................................................................1.10(a)
Spread ......................................................................................................2.4(i)
Stockholders' Agreement....................................................................................Recitals
Subsidiary...................................................................................................3.1(a)
Superior Proposal............................................................................................5.3(b)
Surviving Corporation...........................................................................................1.4
Tax Authority ..............................................................................................3.10(b)
Tax or Taxes................................................................................................3.10(b)
Tax Returns.................................................................................................3.10(b)
Termination Fee..............................................................................................8.2(e)
Transactions.................................................................................................1.2(a)
Voting Debt..................................................................................................3.2(a)
WARN Act....................................................................................................3.15(b)
Warrant.........................................................................................................2.5
Work For Hire Agreements....................................................................................3.13(g)
Year 2000 Compliant.........................................................................................3.14(e)
</TABLE>
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<PAGE> 8
ACQUISITION AGREEMENT AND PLAN OF MERGER
THIS ACQUISITION AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated
as of April 27, 1999, is made by and among InterVoice, Inc., a Texas corporation
("Parent"), InterVoice Acquisition Subsidiary III Inc., a Nevada corporation and
a wholly owned subsidiary of Parent (the "Purchaser"), and Brite Voice Systems,
Inc., a Kansas corporation (the "Company").
WHEREAS, the Board of Directors of each of Parent, the Purchaser and
the Company has approved, and deems it advisable and in the best interests of
its respective stockholders to consummate, the acquisition of the Company by
Parent upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance thereof, it is proposed that Purchaser make a
cash tender offer (the "Offer") to acquire 9,158,155 shares of the issued and
outstanding common stock, no par value per share (the "Shares" or "Common
Stock"), of the Company, for Thirteen and 40/100s Dollars ($13.40) per share,
net to the seller in cash (such price, or any such higher price per Share as may
be paid in the Offer, being referred to herein as the "Offer Price");
WHEREAS, also in furtherance of such acquisition, the Board of
Directors of each of Parent, the Purchaser and the Company have each approved
the Merger (as hereinafter defined) following the Offer in accordance with the
Kansas General Corporation Code (the "KGCC") and the Nevada General Corporation
Law (the "NGCL") and upon the terms and subject to the conditions set forth
herein;
WHEREAS, the Board of Directors of the Company (the "Company's Board of
Directors") has determined that the consideration to be paid for each Share in
the Offer and in the Merger is fair to the holders of such Shares and has
resolved to recommend that the holders of such Shares accept the Offer and
approve this Agreement and each of the transactions contemplated hereby upon the
terms and subject to the conditions set forth herein;
WHEREAS, as a condition and inducement to Parent's and the Purchaser's
entering into this Agreement and incurring the obligations set forth herein,
Stanley G. Brannan, Sue Brannan, Glenn A. Etherington, Leon A. Ferber, John F.
Kelsey, III, Alan C. Maltz, Scott A. Maltz, Ray S. Naeini and Donald R. Walsh
(the "Major Stockholders") concurrently herewith are entering into a
Stockholders' Agreement (the "Stockholders' Agreement"), dated as of the date
hereof, with Parent and the Purchaser, in the form attached hereto as Exhibit A,
pursuant to which the Major Stockholders have agreed, among other things, to
tender any Shares held by each such Major Stockholder in the Offer, to agree to
the cancellation of any stock options each such Major Stockholder holds on the
date hereof and receive the Spread (as hereinafter defined) per Share in payment
therefor, and to grant Parent a proxy with respect to the voting of such Shares
in favor of the Merger upon the terms and subject to the conditions set forth
therein; and
WHEREAS, the Company, Parent and the Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger.
<PAGE> 9
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 8.1 hereof and none of the events set forth in Annex I
shall have occurred and be existing, as promptly as practicable (but in no event
later than five (5) business days after the public announcement of the execution
of this Agreement), the Purchaser shall commence (within the meaning of Rule
14d-2 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) the Offer at the Offer Price and, subject to there being validly tendered
and not withdrawn prior to the expiration of the Offer, 9,158,155 Shares
(including Shares owned by Parent, the Purchaser or any affiliates thereof) (the
"Minimum Condition") and to the other conditions set forth in Annex I hereto,
shall use its best efforts to consummate the Offer in accordance with its terms.
The obligations of the Purchaser to accept for payment and to pay for any Shares
validly tendered on or prior to the expiration of the Offer and not withdrawn
shall be subject only to the Minimum Condition and the other conditions set
forth in Annex I hereto. The Offer shall be made by means of an offer to
purchase (the "Offer to Purchase") subject to the Minimum Condition and the
other conditions set forth in Annex I hereto and reflecting, where appropriate,
the other terms set forth in this Agreement. The Purchaser shall not amend or
waive the Minimum Condition (other than, at Purchaser's option, to lower the
Minimum Condition to a majority of the issued and outstanding Common Stock on a
fully diluted basis) and shall not decrease, or change the form of, the Offer
Price or decrease the number of Shares sought, or amend any other condition of
the Offer in any manner adverse to the holders of the Shares or impose any
condition to the consummation of the Offer beyond the Minimum Condition and the
conditions set forth in Annex I hereto without the written consent of the
Company; provided, however, that if on the initial scheduled expiration date of
the Offer, which shall be twenty-one (21) business days after the date the
Offer is commenced, all conditions to the Offer will not have been satisfied or
waived, the Purchaser may, from time to time, in its sole discretion, extend the
expiration date and; provided further, however, that if on the initial scheduled
expiration date of the Offer any conditions to the Offer that are reasonably
capable of being satisfied within ten (10) business days, including the Minimum
Condition, will not have been satisfied or waived, the Purchaser shall extend
the expiration date for a minimum of ten (10) business days. In no event shall
the Purchaser be obligated to extend the Offer beyond June 30, 1999. The
Purchaser shall, on the terms and subject to the prior satisfaction or waiver of
the conditions of the Offer, accept for payment and pay for Shares tendered as
soon as it is legally permitted to do so under applicable law.
(b) If more than 9,158,155 Shares are validly tendered prior to the
expiration date, as may be extended pursuant to Section 1.1(a), and not
withdrawn, the Purchaser will, upon the terms and subject to the conditions of
the Offer, accept for payment (and thereby purchase) the Shares purchased in the
Offer on a pro rata basis, with adjustments to avoid purchases of fractional
shares of Common Stock, based on the number of Shares validly tendered prior to
the expiration date and
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not withdrawn by each tendering stockholder. Subject to the terms of this
Agreement, the Purchaser reserves the right (but shall not be obligated) to
accept for payment more than 9,158,155 Shares pursuant to the Offer.
(c) As soon as practicable on the date the Offer is commenced, Parent
and the Purchaser shall file with the United States Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 with respect
to the Offer (together with all amendments and supplements thereto and including
the exhibits thereto, the "Schedule 14D-1"). The Schedule 14D-1 will include, as
exhibits, the Offer to Purchase and a form of letter of transmittal and summary
advertisement (collectively, together with any amendments and supplements
thereto, the "Offer Documents"). The Offer Documents will comply in all material
respects with the provisions of applicable federal securities laws and, on the
date filed with the SEC and on the date first published or sent to the Company's
stockholders, 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 made therein, in light of the circumstances under which
they were made, not misleading, except that no representation is made by Parent
or the Purchaser with respect to information furnished by the Company expressly
for inclusion in the Offer Documents. The information supplied by the Company
expressly for inclusion in the Offer Documents and by Parent or the Purchaser
expressly for inclusion in the Schedule 14D-9 (as hereinafter defined) will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
(d) Each of Parent and the Purchaser will take all steps necessary to
cause the Offer Documents to be filed with the SEC and to be disseminated to
holders of the Shares, in each case as and to the extent required by applicable
federal securities laws. Each of Parent and the Purchaser, on the one hand, and
the Company, on the other hand, will promptly correct any information provided
by it for use in the Schedule 14D-1 or the Offer Documents if and to the extent
that it shall have become false or misleading in any material respect, and the
Purchaser further will take all steps necessary to cause the Schedule 14D-1 or
the Offer Documents as so corrected to be filed with the SEC and to be
disseminated to holders of the Shares, in each case as and to the extent
required by applicable federal securities laws. The Company and its counsel
shall be given the reasonable opportunity to review the initial Schedule 14D-1
before it is filed with the SEC. In addition, Parent and the Purchaser will
provide the Company and its counsel with any comments or other communications,
whether written or oral, Parent, the Purchaser or their counsel may receive from
time to time from the SEC or its staff with respect to the Offer Documents
promptly after the receipt of such comments or other communications.
Section 1.2 The Company Actions.
(a) The Company hereby approves of and consents to the Offer and
represents that the Company's Board of Directors, at a meeting duly called and
held prior to the execution hereof (i) has unanimously determined that each of
this Agreement, the Offer and the Merger (as hereinafter defined) are fair to
and in the best interests of the stockholders of the Company, (ii) has duly and
unanimously approved this Agreement, the Stockholder Agreement, and the
transactions contemplated hereby and thereby, including the Offer and the Merger
(collectively, the
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"Transactions"), and such approval constitutes approval of the Offer, this
Agreement, the Stockholder Agreement, and the transactions contemplated hereby
and thereby, including the Merger, for purposes of Section 17-12,101 of the
KGCC, such that Section 17-12,101 of the KGCC will not apply to the transactions
contemplated hereby or thereby, (iii) has unanimously resolved to recommend 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 (iv)
has unanimously resolved to amend the By-laws of the Company (the "By-Laws") to
ensure that the provisions of Sections 17-1286 through 17-1298 of the KGCC do
not apply to the Company, the rights of its stockholders and the Transactions
contemplated by this Agreement.
(b) As soon as practicable on the date the Offer is commenced, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments or supplements thereto and
including the exhibits thereto, the "Schedule 14D-9") which shall, subject to
the provisions of Section 5.3(c) hereof, contain the recommendation referred to
in clause (iii) of Section 1.2(a) hereof. The Schedule 14D-9 will comply in all
material respects with the provisions of applicable federal securities laws and,
on the date filed with the SEC and on the date first published or sent to the
Company's stockholders, 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 made 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 furnished by
Parent or the Purchaser expressly for inclusion in the Schedule 14D-9. The
Company further agrees to take all steps necessary to cause the Schedule 14D-9
to be filed with the SEC and to be disseminated to holders of the Shares, in
each case, as and to the extent required by applicable federal securities laws.
The Company shall mail, or cause to be mailed, such Schedule 14D-9 to the
stockholders of the Company at the same time the Offer Documents are first
mailed to the stockholders of the Company. Each of the Company, on the one hand,
and Parent and the Purchaser, on the other hand, agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that it shall have become false or misleading in any material respect and the
Company further agrees to take all steps necessary to cause the Schedule 14D-9
as so corrected to be filed with the SEC and to be disseminated to holders of
the Shares, in each case, as and to the extent required by applicable federal
securities laws. Parent and its counsel shall be given the opportunity to review
the Schedule 14D-9 before it is filed with the SEC. In addition, the Company
agrees to provide Parent, the Purchaser and their counsel with any comments,
whether written or oral, that the Company or its counsel may receive from time
to time from the SEC or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments or other communications.
(c) In connection with the Offer, the Company will promptly furnish or
cause to be furnished to the Purchaser mailing labels, security position
listings and any available listing or computer file containing the names and
addresses of all record holders of Shares, each as of a recent date, and shall
promptly furnish the Purchaser with such additional information (including, but
not limited to, updated mailing labels, security position listings and available
listings or computer files containing the names and addresses of all
recordholders of Shares, or any of such other information and assistance as the
Purchaser or its agents may reasonably request in communicating the Offer to the
record and beneficial holders of the Shares).
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Section 1.3 Directors.
(a) Promptly upon the purchase of and payment for any Shares by the
Purchaser pursuant to the Offer, and from time to time thereafter as Shares are
acquired by the Purchaser, Parent shall, subject to meeting the Minimum
Condition, be entitled to designate such number of directors, rounded down to
the next whole number, on the Company's Board of Directors as is equal to the
product of the total number of directors on such Board (giving effect to the
directors designated by Parent pursuant to this sentence) multiplied by the
percentage that the number of Shares that the Purchaser or any affiliate of the
Purchaser owns beneficially bears to the total number of shares of Common Stock
then issued and outstanding. In furtherance thereof, the Company shall, within
twenty-four (24) hours of written request of Parent, either increase the size of
its Board of Directors or use its best efforts to secure the resignations of
such number of its incumbent directors, or both as is directed by Parent to
enable Parent's designees to be elected to the Company's Board of Directors and
shall take all actions available to the Company to cause Parent's designees to
be so elected. At such time, the Company shall, if requested by Parent, also
cause persons designated by Parent to constitute at least the same percentage
(rounded down to the next whole number) as is on the Company's Board of
Directors of (i) each committee of the Company's Board of Directors, (ii) each
board of directors (or similar body), of each Subsidiary (as hereinafter
defined) of the Company (to the extent such action is feasible and reasonable),
and (iii) each committee (or similar body) of each such board (to the extent
such action is feasible and reasonable).
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-l promulgated thereunder in order
to fulfill its obligations under Section 1.3(a) hereof, and shall include in the
Schedule 14D-9 mailed to stockholders promptly after the commencement of the
Offer (or an amendment thereof or an information statement pursuant to Rule
14f-1 if the Purchaser has not theretofore designated directors) such
information with respect to the Company and its officers and directors as is
required under Section 14(f) and Rule 14f-1 in order to fulfill its obligations
under Section 1.3(a) hereof. Parent or the Purchaser shall supply the Company
such information with respect to either of them and their nominees, officers,
directors and affiliates as is required by such Section 14(f) and Rule 14f-1.
The provisions of this Section 1.3 are in addition to and shall not limit any
rights which Parent, the Purchaser or any of their affiliates may have as a
holder or beneficial owner of Shares as a matter of law with respect to the
election of directors or otherwise.
(c) In the event that Parent's designees are elected to the Company's
Board of Directors subject to the other terms of this Agreement and until the
Effective Time (as hereinafter defined), the Company's Board of Directors shall
have at least one (1) director who is a director on the date hereof and who is
neither an officer of the Company nor a designee, stockholder, affiliate or
associate (within the meaning of the federal securities laws) of Parent (one (1)
or more of such directors, the "Independent Directors"); provided that, in such
event, if the number of Independent Directors shall be reduced below two (2) for
any reason whatsoever, the remaining Independent Director shall be entitled to
designate a person to fill such vacancy who shall be deemed an Independent
Director for purposes of this Agreement or, if no Independent Director then
remains, the other directors shall designate one (1) person to fill one (1) of
the vacancies who shall not be a stockholder, affiliate or associate of Parent
or the Purchaser and such person shall be deemed to be an Independent Director
for purposes of this Agreement. Notwithstanding anything in this Agreement to
the contrary, in the
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event that Parent's designees are elected to the Company's Board of Directors,
after the acceptance for payment of Shares pursuant to the Offer and prior to
the Effective Time, the affirmative vote of a majority of the Independent
Directors shall be required to (a) amend or terminate this Agreement on behalf
of the Company, (b) exercise or waive any of the Company's rights, benefits or
remedies hereunder, (c) extend the time for performance of the Purchaser's
obligations hereunder, (d) amend the Company's Articles of Incorporation (as
hereinafter defined) or By-Laws, or (e) take any other action by the Company's
Board of Directors under or in connection with this Agreement.
Section 1.4 The Merger. Upon the terms and subject to the conditions of
this Agreement at the Effective Time, the Company and the Purchaser shall
consummate a merger (the "Merger") pursuant to which (a) the Purchaser shall be
merged with and into the Company and the separate corporate existence of the
Purchaser shall thereupon cease, (b) the Company shall be the successor or
surviving corporation in the Merger (sometimes hereinafter referred to as the
"Surviving Corporation") and shall continue to be governed by the laws of the
State of Kansas, and (c) the separate corporate existence of the Company with
all of its rights, privileges, immunities, powers and franchises shall continue
unaffected by the Merger, except as set forth in this Section 1.4. Pursuant to
the Merger, (x) Article III of the Articles of Incorporation of the Company (the
"Articles of Incorporation"), shall be amended in its entirety to read as
follows:
"ARTICLE III
Capital Stock
The aggregate number of shares which the corporation shall
have authority to issue is twenty-five thousand (25,000), no par value
per share, to be designated "Common Stock"."
As so amended, the Articles of Incorporation shall be the articles of
incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Articles of Incorporation and (y) the By-Laws, as in effect
immediately prior to the Effective Time (as hereinafter defined), shall be the
By-Laws of the Surviving Corporation until thereafter amended as provided by
law, by such Articles of Incorporation or by such By-Laws.
Section 1.5 Effective Time. Parent, the Purchaser and the Company shall
cause (i) a Certificate of Merger the content of which shall comply with the
KGCC and (ii) Articles of Merger or Exchange, the content of which shall comply
with the NGCL, each to be executed and filed on the Closing Date (as hereinafter
defined) (or on such other date as Parent and the Company may agree) with each
of the Secretary of State of Kansas and the Secretary of State of Nevada (the
"Secretaries of State"), as the case may be, in such form as required by, and
executed in accordance with, the relevant provisions of the KGCC and the NGCL.
The Merger shall become effective on the date on which the Certificate of Merger
and the Articles of Merger or Exchange are duly filed with the Secretaries of
State or such time as is agreed upon by the parties and specified in the
Certificate of Merger and the Articles of Merger or Exchange, and such time is
hereinafter referred to as the "Effective Time."
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Section 1.6 Closing. The closing of the Merger (the "Closing") shall
take place at 10:00 a.m. on a date to be specified by the parties, which shall
be no later than the second (2nd) business day after satisfaction or waiver of
all of the conditions set forth in Article VII hereof (the "Closing Date"), at
the offices of Thompson & Knight, P.C., 1700 Pacific Avenue, Suite 3300, Dallas,
Texas 75201, unless another date or place is agreed to in writing by the parties
hereto.
Section 1.7 Directors and Officers of the Surviving Corporation. The
directors and officers of the Purchaser at the Effective Time shall, from and
after the Effective Time, be the directors and officers of the Surviving
Corporation until their successors shall have been duly elected or appointed or
qualified or until their earlier death, resignation or removal in accordance
with the Articles of Incorporation and the By-Laws. If, at the Effective Time, a
vacancy shall exist on the Company's Board of Directors or in any office of the
Surviving Corporation, such vacancy may thereafter be filled in the manner
provided by law.
Section 1.8 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of the KGCC and the
NGCL. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and franchises
of the Company and the Purchaser shall vest in the Surviving Corporation, and
all debts, liabilities and duties of the Company and the Purchaser shall become
the debts, liabilities and duties of the Surviving Corporation including,
without limitation, the Debt Financing (as hereinafter defined) referred to in
Annex I and Section 4.26.
Section 1.9 Subsequent Actions. If at any time after the Effective Time
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Company or the Purchaser acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger or otherwise to carry out this Agreement, the officers and directors of
the Surviving Corporation shall be authorized to execute and deliver, in the
name and on behalf of either the Company or the Purchaser, all such deeds, bills
of sale, assignments and assurances and to take and do, in the name and on
behalf of each of such corporations or otherwise, all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
rights, title and interest in, to and under such rights, properties or assets in
the Surviving Corporation or otherwise to carry out this Agreement.
Section 1.10 Stockholders' Meeting.
(a) In order to consummate the Merger, the Company, acting through its
Board of Directors, shall, in accordance with applicable law duly call, give
notice of, convene and hold a special meeting of its stockholders (the "Special
Meeting") as promptly as practicable following the acceptance for payment and
purchase of the Shares by the Purchaser pursuant to the Offer for the purpose of
considering and taking action upon the approval of the Merger and the adoption
of this Agreement. Subject to its fiduciary obligations, the Company's Board of
Directors shall recommend such approval, and the Company shall take all lawful
action to solicit such approval. Parent shall vote, or cause to be voted, all of
the Shares then owned by it, the Purchaser or any of its other subsidiaries and
affiliates in favor of the approval of the Merger and the approval and adoption
of this Agreement.
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Section 1.11 Proxy Statement/Registration Statement.
(a) As promptly as practicable after the date hereof, the Company and
Parent shall prepare and file with the SEC under the Securities Act of 1933, as
amended (the "Securities Act"), and the Exchange Act, a proxy
statement/prospectus (the "Proxy Statement") with respect to the Special
Meeting, including a registration statement, together with all amendments and
supplements thereto, if any (the "Registration Statement"), on an appropriate
form for the purpose of registering under the Securities Act the offering, sale,
and delivery of Parent Common Stock (as hereinafter defined), together with
preferred share purchase rights issuable pursuant to Parent's Amended and
Restated Rights Agreement dated as of December 12, 1994 (the "Rights"), to be
issued to the stockholders of the Company pursuant to the Merger. Parent and the
Company shall use all reasonable best efforts to have the Registration Statement
declared effective under the Securities Act as promptly as practicable after the
filing thereof. Parent or the Company, as the case may be, shall notify the
other promptly of the receipt of any comments on, or any requests for amendments
or supplements to, the Proxy Statement or the Registration Statement by the SEC,
and each shall supply the other with copies of all correspondence between it and
its representatives, on the one hand, and the SEC or members of its staff, on
the other, with respect to the Proxy Statement or the Registration Statement.
Parent or the Company, as the case may be, after consultation with and the
consent of the other, shall use its reasonable best efforts to respond promptly
to any comments made by the SEC with respect to the Proxy Statement or the
Registration Statement. The Company shall obtain the approval of Parent, and
Parent shall obtain the approval of the Company, before making any filings with
the SEC pertaining to the Proxy Statement or the Registration Statement or any
matter pertaining to this Agreement.
(b) Parent, the Purchaser and the Company each agrees promptly to
correct any information provided by it for use in the Proxy Statement or the
Registration Statement if and to the extent that such information shall have
become false or misleading in any material respect, and Parent and the Company
further agree to take all steps necessary to cause the Proxy Statement or the
Registration Statement as so corrected to be filed with the SEC and to be
disseminated promptly to holders of shares of Company Stock, in each case as and
to the extent required by applicable law. Parent shall also take any action
reasonably required to be taken under any applicable state securities laws in
connection with the issuance of the Parent Common Stock pursuant to the Merger,
and the Company shall furnish all information concerning the Company and its
stockholders as may be reasonably requested in connection with any such action.
(c) As promptly as practicable after the Registration Statement has
been declared effective by the SEC, the Company shall mail the Proxy Statement
to its stockholders as of the record date for the Special Meeting.
Section 1.12 Directors of InterVoice. Promptly following the Effective
Time, Parent will cause its Board of Directors to fill one (1) vacant position
on its Board of Directors with Stanley G. Brannan.
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ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
Shares or holders of common stock, no par value per share, of the Purchaser
("Purchaser Common Stock"):
(a) Each share of Purchaser Common Stock issued and outstanding
immediately before the Effective Time shall be converted into, and shall
thereafter represent, one validly issued, fully paid and nonassessable share of
common stock, no par value per share, of the Surviving Corporation.
(b) Each share of Common Stock issued and outstanding immediately prior
to the Effective Time (other than (i) Shares purchased in the Offer or otherwise
owned by Parent, the Purchaser or any other direct or indirect Subsidiary (as
hereinafter defined) of Parent, (ii) Shares that are owned by the Company or any
direct or indirect Subsidiary of the Company and in each case not held on behalf
of third parties, or (iii) Shares ("Dissenting Shares") that are owned by
stockholders ("Dissenting Stockholders") that have properly exercised appraisal
rights pursuant to Section 17-6712 of the KGCC (collectively, the "Excluded
Shares")) shall be converted into the right to receive the merger consideration
(the "Merger Consideration") calculated under either method (1) or method (2),
as applicable:
(1) If the Purchaser purchases 9,158,155 Shares in the Offer (the "Cash
Share Number") or, in the sole discretion of Purchaser, more than the
Cash Share Number, each share of Common Stock issued and outstanding
immediately prior to the Effective Time (other than Excluded Shares)
will be converted into the right to receive that number of fully paid
and nonassessable shares of common stock, no par value per share, of
Parent (the "Parent Common Stock") equal to the quotient of (x) the
Offer Price divided by (y) the average of the per share closing price
of the Parent Common Stock on the Nasdaq National Market for the
twenty-five (25) trading days immediately preceding the Effective Time
(the "Average Trading Price"), provided that, for purposes of this
Agreement, the Average Trading Price shall be at least equal to the
Lower Collar (as hereinafter defined) and shall not exceed $14.00 per
share; or
(2) If the Purchaser lowers the Minimum Condition as provided in
Section 1.1(a) and the number of Shares purchased in the Offer is less
than the Cash Share Number, each share of Common Stock issued and
outstanding immediately prior to the Effective Time (other than
Excluded Shares) will be converted into the right to receive (a) an
amount in cash equal to the quotient of (w) the difference between (i)
the product of the Offer Price multiplied by the Cash Share Number and
(ii) the aggregate purchase price payable pursuant to this Agreement
for the number of Shares actually purchased in the Offer, divided by
(x) a number of shares equal to (A) the total number of shares of
Common Stock issued and outstanding immediately prior to the Effective
Time (B) less the Excluded Shares (C) plus the Dissenting Shares (such
quotient referred to as the "Cash Amount"), plus (b) that number of
shares of Parent Common Stock equal to the quotient of (y) the
difference between the Offer Price and the Cash Amount, divided by (z)
the Average Trading Price.
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For purposes of this Section 2.1(b), the "Lower Collar" is $8.00,
provided, however, if a Lower Collar of $8.00 would result in the issuance of
more than 5,719,877 shares of Parent Common Stock in the Merger (assuming for
purposes of this calculation that all outstanding stock options under the
Company Stock Plans (as hereinafter defined) that shall not have been cancelled
or repurchased by the Company pursuant to Section 2.4 hereof at or prior to the
completion of the Offer are exercised in full immediately prior to the Effective
Time and that there are no Dissenting Shares (the "Exercise/No Dissenters
Presumption")), the Lower Collar shall be an amount per share equal to the
product of (i) $8.00 multiplied by (ii) a fraction of which (A) the numerator is
the total number of shares of Parent Common Stock that would be issued in the
Merger if the Lower Collar were $8.00, assuming the Exercise/No Dissenters
Presumption, and (B) the denominator is 5,719,877.
All calculations under this Section 2.1 shall be made to the nearest
cent or to the nearest one ten-thousandth of a share of Parent Common Stock.
(c) All shares of Common Stock issued and outstanding immediately prior
to the Effective Time shall no longer be outstanding and shall be canceled and
retired and shall cease to exist (in the case of Excluded Shares other than
Dissenting Shares, without the payment of any consideration therefor), and each
certificate formerly representing any of such Shares, other than Excluded
Shares, shall thereafter represent only the right to receive the Merger
Consideration and the right, if any, to receive cash in lieu of fractional
shares pursuant to Section 2.3(e) hereof, without interest, upon the surrender
of such certificate in accordance with Section 2.3(b) hereof.
(d) The number of shares of Parent Common Stock to be delivered in the
Merger, as determined pursuant to Section 2.1(b) hereof, shall be adjusted to
reflect fully the effect of any stock split, reverse split, stock dividend
(including any dividend or distribution of securities convertible into shares of
Parent Common Stock), reorganization, recapitalization or other like change with
respect to Parent Common Stock the record date for which shall occur after the
date hereof and prior to the Effective Time.
Section 2.2 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the contrary,
any Shares held by a holder who has demanded and perfected his demand for
appraisal of his Shares in accordance with Section 17-6712 of the KGCC, and as
of the Effective Time has neither effectively withdrawn nor lost his right to
such appraisal, shall not be converted into or represent a right to receive the
Merger Consideration pursuant to Section 2.1 hereof, but the holder thereof
shall be entitled to only such rights as are granted by the KGCC.
(b) Notwithstanding the provisions of Section 2.2(a) above, if any
holder of Shares who demands appraisal of such holder's Shares under the KGCC
effectively withdraws or loses (through failure to perfect or otherwise) such
holder's right to appraisal, then as of the Effective Time or the occurrence of
such event, whichever later occurs, such holder's Shares shall automatically be
converted into and represent only the right to receive the Merger Consideration
and the right, if any, to receive cash in lieu of fractional shares pursuant to
Section 2.3(e) hereof, without interest, upon surrender of the certificate or
certificates representing such Shares pursuant to Section 2.3 hereof and such
Shares shall not constitute Excluded Shares.
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(c) The Company shall give Parent (i) prompt notice of any written
demands for appraisal or payment of the fair value of any Shares, withdrawals of
such demands, and any other instruments served pursuant to the KGCC and (ii) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal under the KGCC. The Company shall not voluntarily make any payment
with respect to any demands for appraisal and shall not, except with the prior
written consent of Parent, settle or offer to settle any such demands.
Section 2.3 Surrender of All Shares of Common Stock; Stock
Transfer Books.
(a) Before the Effective Time, the Purchaser shall designate a bank or
trust company reasonably acceptable to the Company to act as agent for the
holders of Shares in connection with the Merger (the "Exchange Agent"). Parent
shall deposit, or cause to be deposited, in trust with the Exchange Agent for
the benefit of holders of Shares (other than the Excluded Shares), certificates
representing Parent Common Stock and (if applicable) cash comprising the
aggregate Merger Consideration pursuant to Section 2.1(b) hereof (the "Payment
Fund"). The Exchange Agent shall, pursuant to irrevocable instructions, make the
payments or deliveries referred to in this Section 2.3(a) out of the Payment
Fund. The Payment Fund shall not be used for any other purpose except as
expressly provided in this Agreement.
(b) As soon as reasonably practicable after the Effective Time, the
Exchange Agent shall mail to each holder of record of a certificate or
certificates, which immediately prior to the Effective Time represented
outstanding Shares (the "Certificates"), whose Shares were converted pursuant to
Section 2.1(b) hereof into the right to receive the Merger Consideration (i) a
letter of transmittal (which shall specify that delivery shall be effected and
that the risk of loss of and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent and shall be in such form and
have such other provisions not inconsistent with this Agreement as Parent may
specify) and (ii) instructions for use in effecting the surrender of
Certificates in exchange for (A) certificates representing shares of Parent
Common Stock comprising the Merger Consideration , (B) if applicable, cash
comprising the Merger Consideration and (C) cash in lieu of fractional shares.
Upon surrender of a Certificate for cancellation to the Exchange Agent or to
such other agent or agents as may be appointed by Parent, together with such
letter of transmittal, duly executed, the holder of such Certificate shall be
entitled to receive in exchange therefor (x) a certificate representing that
number of whole shares of Parent Common Stock that such holder is entitled to
receive pursuant to Section 2.1(b) hereof, and (y) a check in the amount (after
giving effect to any required tax withholdings) of (A) any cash comprising the
Merger Consideration, plus (B) any cash in lieu of fractional shares, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Shares that is not registered in the transfer records
of the Company, a certificate representing the proper number of shares of Parent
Common Stock, together with a check for any cash to be paid upon due surrender
of the Certificate, may be issued and/or paid to such a transferee if the
Certificate formerly representing such Shares is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer and to evidence that any applicable stock transfer taxes have been
paid, in form and substance reasonably satisfactory to Parent and the Exchange
Agent. If any check or any certificate for shares of Parent Common Stock is to
be issued in a name other than that in which the Certificate surrendered in
exchange therefor is registered, it shall be a condition of such exchange that
the person requesting such exchange shall have paid any transfer and other taxes
required by reason of the issuance of certificates for shares of Parent Common
Stock in a name other
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than that of the registered holder of the Certificate surrendered, or shall have
established to the satisfaction of Parent and the Exchange Agent that such tax
has been paid or is not applicable. Until surrendered as contemplated by this
Section 2.3, each Certificate (other than certificates for Excluded Shares)
shall be deemed at any time after the Effective Time to represent only the right
to receive the Merger Consideration.
(c) At the Effective Time, the stock transfer books of the Company
shall be closed and there shall not be any further registration of transfers of
shares of any class of capital stock thereafter on the records of the Company.
From and after the Effective Time, the holders of certificates evidencing
ownership of the Shares outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such Shares, except as otherwise
provided for herein or by applicable law.
(d) Promptly following the date that is one (1) year after the
Effective Time, Parent shall be entitled to require the Exchange Agent to
deliver to it any portion of the Payment Fund (including the proceeds of any
investments thereof and any Parent Common Stock) that remains unclaimed by the
stockholders of the Company, Certificates and other documents in its possession
relating to the transactions contemplated hereby, which had been made available
to the Exchange Agent and which have not been disbursed to holders of
Certificates, and thereafter such holders shall be entitled to look to Parent
and the Surviving Corporation (subject to abandoned property, escheat or similar
laws) only as general creditors thereof with respect to the Merger Consideration
payable upon due surrender of their Certificates, without any interest thereon.
Notwithstanding the foregoing, none of Parent, the Surviving Corporation nor the
Exchange Agent shall be liable to any holder of a Certificate for Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(e) Notwithstanding any other provision of this Agreement, no
fractional shares of Parent Common Stock will be issued and any holder of Shares
entitled to receive a fractional share of Parent Common Stock but for this
Section 2.3(e) shall be entitled to receive a cash payment in lieu thereof,
which payment shall represent such holder's proportionate interest in a share of
Parent Common Stock based on the Average Trading Price.
Section 2.4 The Company Stock Plans.
Schedule 2.4 of the Company Disclosure Schedules (as hereinafter
defined) sets forth the number of optionees and the number of shares of Common
Stock covered by outstanding options for each of the 1984 Incentive Stock Option
Plan (the "1984 Plan"), the 1990 Non-Employee Director Stock Option Plan (the
"Director Plan"), the 1994 Stock Option Plan (the "1994 Plan"), and the
Perception Technology Corporation Stock Option Plan (the "PTSOP"), which
collectively constitute all of the plans of the Company under which any stock
options are outstanding (collectively, the "Company Stock Plans"). The Company
will take, or cause to be taken, the following actions with respect to the
Company Stock Plans and the Employee Stock Purchase Plan (the "ESPP"):
(i) Promptly upon commencement of the Offer, the Company will
use its best efforts to enter into agreements with optionees to cancel,
prior to the completion of the Offer, all outstanding stock options
under the Company Stock Plans, whether or not then exercisable
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<PAGE> 20
and whether or not "in the money" or "underwater." Except as otherwise
provided in the Stockholders' Agreement, in consideration for the
cancellation of the outstanding "in the money" stock options pursuant
to this Section 2.4, the Company shall pay to the holders of such stock
options an amount, in cash, equal to the product of (A) the difference
between the Offer Price and the per share exercise price of such stock
options multiplied by (B) the number of shares of Common Stock covered
by such stock options (the "Spread"), and with respect to all
outstanding "underwater" options, if any, to be canceled pursuant to
this Section 2.4, the Company shall pay, in cash, such amounts as the
Parent and the Company mutually agree to be appropriate.
(ii) The payments for outstanding stock options under the 1984
Plan, the Director Plan, the 1994 Plan and the PTSOP will be (i) made
by the Company subject to the Purchaser having completed the Offer and
(ii) paid at or prior to the completion of the Offer.
(iii) Effective upon completion of the Offer (but in any event
prior to June 30, 1999 unless the Offer is extended past such date),
the Company will terminate the ESPP and refund in cash to participants
their respective account balances.
Section 2.5 Repurchase of Warrant. The Company has entered into a
binding agreement with AT&T Corp. pursuant to which the Company will repurchase
and cancel for $7,500,000 in cash, subject to and promptly after consummation of
the Offer, the Common Stock Purchase Warrant dated December 12, 1997 and related
Warrant Purchase Agreement of even date therewith (collectively, the "Warrant")
issued by the Company to AT&T Corp.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the schedules delivered to Parent prior to the
execution of this Agreement (the "Company Disclosure Schedules") setting forth,
among other things, specific exceptions to the Company's representations and
warranties set forth herein, the Company represents and warrants to Parent and
the Purchaser as set forth below. Each exception set forth in the Company
Disclosure Schedules is identified by reference to, or has been grouped under a
heading referring to, a specific individual section of this Agreement and,
except as otherwise specifically stated with respect to such exception, relates
only to such section.
Section 3.1 Organization; Qualification; Charter and Bylaws.
(a) The Company and each of its Subsidiaries is a corporation,
partnership or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
and has all requisite corporate or other power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as now being conducted, except where the failure to have such
governmental approvals would not, individually or in the aggregate, have a
Company Material Adverse Effect (as hereinafter defined). As used in this
Agreement, the term "Subsidiary" shall mean, with respect to any party, any
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<PAGE> 21
corporation or other organization, whether incorporated or unincorporated or
domestic or foreign to the United States of which (i) such party or any other
Subsidiary of such party is a general partner (excluding such partnerships where
such party or any Subsidiary of such party do not have a majority of the voting
interest in such partnership) or (ii) at least a majority of the securities or
other interests having by their terms ordinary voting power to elect a majority
of the board of directors or others performing similar functions with respect to
such corporation or other organization is directly or indirectly owned or
controlled by such party or by any one or more of its Subsidiaries, or by such
party and one or more of its Subsidiaries. As used in this Agreement, a "Company
Material Adverse Effect" means any event, change in or effect on the business of
the Company or its Subsidiaries, taken as a whole, that is or would be expected
to be materially adverse to (i) the business, operations, properties (including
intangible properties), financial condition or results of operations or
prospects of the Company or its Subsidiaries, taken as a whole, or (ii) the
ability of the Company to consummate any of the Transactions or to perform its
obligations under this Agreement, but such definition shall not include (A) any
material adverse change due to the transactions contemplated by this Agreement,
(B) any material adverse change in the Company's established industry as a
whole, or (C) a material adverse change in the general economic conditions of
the United States of America. The exception of clause (A), (B) and (C) from the
definition of Company Material Adverse Effect shall not otherwise affect the
conditions set forth in Annex I or Article VII hereof. Set forth in Schedule
3.1(a) of the Company Disclosure Schedules is a complete list of the Company's
Subsidiaries, including the respective jurisdictions in which such Subsidiaries
are organized and the Company's ownership of each.
(b) The Company and each of its Subsidiaries is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except where the failure
to be so duly qualified or licensed and in good standing would not individually
or in the aggregate have a Company Material Adverse Effect. Except as set forth
in Schedule 3.1(b) of the Company Disclosure Schedules, the Company does not own
(i) any equity interest in any corporation or other entity or (ii) marketable
securities where the Company's equity interest in any entity exceeds five
percent (5%) of the outstanding equity of such entity on the date hereof.
(c) The Company has made available to Parent accurate and complete
copies of (i) the Articles and/or Certificates of Incorporation and By-Laws of
the Company and each of its Subsidiaries (certified by the respective
Secretaries of State of the Company's, and each of its Subsidiaries'
jurisdiction of incorporation and the secretary or an assistant secretary of the
Company, and each of its Subsidiaries, respectively) as currently in effect,
(ii) the stock records of the Company, and each of its Subsidiaries and (iii)
(A) the minutes of all meetings of the Company's, and its United Kingdom
Subsidiary's, Boards of Directors, any committees of such Boards, and the
Company's, and its United Kingdom Subsidiary's, shareholders (and all consents
in lieu of such meetings, each for the past five (5) years and (B) the minutes
of all meetings of the remaining Subsidiaries' Boards of Directors, and
committees of such Boards, and each of such Subsidiaries' shareholders (and all
consents in lieu of such meetings) each for the past two (2) years. Such
records, minutes, and consents accurately reflect the stock ownership of the
Company, and each of its Subsidiaries and all actions taken by the Company at
such meetings, and each of its Subsidiaries' Boards, any committees of such
Boards, and the Company's, and each of its Subsidiaries', shareholders. Neither
the Company nor any of its Subsidiaries is in violation of any provision of its
respective Articles of Incorporation or By-Laws, except where such violation
would not result in a Company Material Adverse Effect.
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Section 3.2 Capitalization.
(a) The authorized capital stock of the Company consists of 30,000,000
Shares, and 10,000,000 of preferred stock, no par value per share (the
"Preferred Stock"). As of the date hereof, (i) 12,271,928 Shares are issued and
outstanding, (ii) no shares of Preferred Stock are issued and outstanding),
(iii) no Shares are issued and held in the treasury of the Company, and (iv) a
total of 3,783,451 Shares are reserved for issuance pursuant to the 1984 Plan,
the Directors Plan, the 1994 Plan, the PTSOP, the ESPP and the Warrant. Schedule
3.2(a)(i) of the Company Disclosure Schedules sets forth the number of shares of
Common Stock reserved for future issuance or purchase pursuant to each of the
1984 Plan, the Directors Plan, the 1994 Plan, the PTSOP, the ESPP and the
Warrant. Schedule 3.2(a)(ii) of the Company Disclosure Schedules sets forth the
number of shares subject to each outstanding option, and the exercise price
thereof. All the outstanding shares of the Company's capital stock are, and all
shares of Common Stock which may be issued pursuant to the exercise of
outstanding options will be, when issued in accordance with the terms thereof,
duly authorized, validly issued, fully paid and non-assessable. There are no
bonds, debentures, notes or other indebtedness having general voting rights (or
convertible into securities having such rights) ("Voting Debt") of the Company
or any of its Subsidiaries issued and outstanding. Except as disclosed in this
Section 3.2 or as set forth in Schedule 3.2(a)(ii) of the Company Disclosure
Schedules, (i) there are no shares of capital stock of the Company authorized,
issued or outstanding, (ii) there are no existing options, warrants, calls,
pre-emptive rights, subscriptions or other rights, agreements, arrangements or
commitments of any character, relating to the issued or unissued capital stock
of the Company or any of its Subsidiaries, obligating the Company or any of its
Subsidiaries to issue, transfer or sell or cause to be issued, transferred or
sold any shares of capital stock or Voting Debt of, or other equity interest in,
the Company or any of its Subsidiaries or securities convertible into or
exchangeable for such shares or equity interests, or obligating the Company or
any of its Subsidiaries to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment, and
(iii) there are no outstanding contractual obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or the
capital stock of the Company or any Subsidiary or affiliate of the Company or to
provide funds to make any investment (in the form of a loan, capital
contribution or otherwise) in any Subsidiary or any other entity. The Company
has no obligation to grant any options in the future other than pursuant to the
Company Stock Plans.
(b) Except as set forth in Schedule 3.2(b) of the Company Disclosure
Schedules, all of the outstanding shares of capital stock of each of the
Subsidiaries are beneficially owned by Company, directly or indirectly, and all
such shares have been validly issued and are fully paid and nonassessable and
are owned by either the Company or one of its Subsidiaries free and clear of all
liens, charges, security interests, options, claims, mortgages, pledges,
transfer restrictions or other encumbrances and restrictions of any nature
whatsoever ("Encumbrances"), except for those directors' qualifying shares of
capital stock of such Subsidiaries not material in amount and subject to
repurchase or cancellation arrangements.
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(c) There are no voting trusts or other agreements or understandings to
which the Company or any of its Subsidiaries is a party with respect to the
voting of the capital stock of the Company or any of the Subsidiaries.
(d) Other than as set forth on Schedule 3.2(d) of the Company
Disclosure Schedules or the Company's Financial Statements (as hereinafter
defined), there is no outstanding Indebtedness (as hereinafter defined) of the
Company or any of its Subsidiaries. Except as identified in Schedule 3.2(d) of
the Company Disclosure Schedules, no Indebtedness of the Company or its
Subsidiaries contains any restriction upon (i) the prepayment of such
Indebtedness, (ii) the incurrence of Indebtedness (including the Debt Financing)
by the Company or its Subsidiaries, respectively, (iii) the ability of the
Company or its Subsidiaries to grant any liens on their properties or assets, or
(iv) the ability of the Company to enter into this Agreement or to consummate
the Merger. For purposes of this Agreement, "Indebtedness" shall include (v) all
indebtedness for borrowed money or for the deferred purchase price of property
or services (other than current trade liabilities incurred in the ordinary
course of business and payable in accordance with customary practices), (w) any
other indebtedness which is evidenced by a note, bond, debenture or similar
instrument, (x) all obligations under financing leases, (y) all liabilities
secured by any lien on any property and (z) all guarantee obligations.
(e) Except as set forth in Schedule 3.2(e) of the Company Disclosure
Schedules, since January 1, 1995, the Company has not entered into any material
agreement involving the acquisition, sale or disposition of any class of capital
stock or assets of the Company or any of its Subsidiaries, by merger or
otherwise; and except as disclosed on Schedule 3.2(e) of the Company Disclosure
Schedules, to the best of knowledge of the Company, none of the Company or any
of its Subsidiaries is in breach of, or subject to a claim of default under, any
such agreements listed on such Schedule.
Section 3.3 Authorization; Validity of Agreement; Company Action.
The Company has full corporate power and corporate authority to
execute and deliver this Agreement and to consummate the Transactions. The
execution, delivery and performance by the Company of this Agreement, and the
consummation by it of the Transactions, have been duly and validly authorized by
its Board of Directors and, except for obtaining the approval of its
stockholders as contemplated by Section 1.10 hereof, no other corporate action
on the part of the Company is necessary to authorize the execution and delivery
by the Company of this Agreement, and the consummation by it of the Transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Company and, assuming due and valid authorization, execution and delivery hereof
by Parent and the Purchaser, is a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms except that (i)
such enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceedings therefor may be brought.
Section 3.4 Consents and Approvals; No Violations. Except as set forth
in Schedule 3.4 of the Company Disclosure Schedules and for such filings,
permits, authorizations, consents and approvals as are contemplated by this
Agreement or may be required under, and other applicable
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requirements of, the Exchange Act and the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), none of the execution,
delivery or performance of this Agreement by the Company, the consummation by
the Company of the Transactions or compliance by the Company with any of the
provisions hereof will (i) conflict with or result in any breach of any
provision of the Articles of Incorporation, the By-Laws or similar
organizational documents of the Company or any of its Subsidiaries, state
securities laws or blue sky laws and the KGCC, (ii) require any filing with, or
permit, authorization, consent or approval of, any court, arbitral tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency (a "Governmental Entity"), (iii) 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, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may be bound
(collectively, the "Company Agreements") or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company, any
of its Subsidiaries or any of their properties or assets, except in the case of
clause (ii), (iii) or (iv) where failure to obtain such permits, authorizations,
consents or approvals or to make such filings, or where such violations,
breaches or defaults which would not, individually or in the aggregate, have a
Company Material Adverse Effect. Schedule 3.4 of the Company Disclosure
Schedules sets forth a list of all third party consents and approvals required
to be obtained in connection with this Agreement under the Company Agreements
prior to the consummation of the transactions contemplated by this Agreement.
Section 3.5 SEC Reports and Financial Statements. The Company has filed
with the SEC, and has heretofore made available to Parent, true and complete
copies of all forms, reports, schedules, statements and other documents required
to be filed by it since January 1, 1996 under the Exchange Act or the Securities
Act (as such documents have been amended since the time of their filing,
collectively, the "Company SEC Documents"). As of their respective dates, or if
amended, as of the date of the last such amendment, the Company SEC Documents,
including, without limitation, any financial statements or schedules included
therein (a) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which they
were made, not misleading and (b) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the case
may be, and the applicable rules and regulations of the SEC thereunder. None of
the Company's Subsidiaries is required to file any forms, reports or other
documents with the SEC. The financial statements included in the Company SEC
Documents (the "Financial Statements") (i) have been prepared from, and are in
accordance with, the books and records of the Company and its consolidated
Subsidiaries, (ii) comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, (iii) have been prepared in accordance with United States
generally accepted accounting principles ("GAAP") applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto)
and (iv) fairly present in all material respects the consolidated financial
position and the consolidated results of operations and cash flows (and changes
in financial position, if any) of the Company and its consolidated Subsidiaries
as of the times and for the periods referred to therein.
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Section 3.6 Absence of Certain Changes. Except as set forth in Schedule
3.6 of the Company Disclosure Schedules or in the Company SEC Documents filed
prior to the date hereof, since December 31, 1998, the Company and its
Subsidiaries have conducted their respective businesses only in the ordinary and
usual course. From December 31, 1998 through the date of this Agreement, there
has not occurred (i) any event, change or effect (including the incurrence of
any liabilities of any nature, whether or not accrued, contingent or otherwise)
having, individually or in the aggregate, a Company Material Adverse Effect,
(ii) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to the equity
interests of the Company or any of its Subsidiaries or (iii) any change in
accounting principles or methods, except insofar as may be required by a change
in GAAP. Since December 31, 1998 neither the Company nor any of its Subsidiaries
has taken any of the actions prohibited by Section 5.2 hereof that would have a
Company Material Adverse Effect.
Section 3.7 No Undisclosed Liabilities. Except (a) as disclosed in the
Financial Statements and (b) for liabilities and obligations (i) incurred in the
ordinary course of business and consistent with past practice since December 31,
1998, (ii) created pursuant to the terms of this Agreement or (iii) as disclosed
in Schedule 3.7 of the Company Disclosure Schedules or (iv) as disclosed in
Schedule 3.8(a) of the Company Disclosure Schedules, neither the Company nor any
of its Subsidiaries, to the best of its knowledge, has incurred any liabilities
or obligations of any nature, whether or not accrued, contingent or otherwise,
that have, or would be reasonably likely to have, a Company Material Adverse
Effect and would be required to be reflected or reserved against on a
consolidated balance sheet of the Company and its Subsidiaries (including the
notes thereto) prepared in accordance with GAAP as applied in preparing the
consolidated balance sheet of the Company and its Subsidiaries as of December
31, 1998. Schedule 3.7 of the Company Disclosure Schedules sets forth the amount
of principal and unpaid interest outstanding under each instrument evidencing
Indebtedness of the Company and its Subsidiaries which will accelerate or become
due or result in a right of redemption or repurchase on the part of the holder
of such Indebtedness (with or without due notice or lapse of time) as a result
of this Agreement, the Merger or the other Transactions contemplated hereby or
thereby. For purposes of this Agreement, "to the best of its knowledge" (or
similar reference to the subject entity's knowledge) means the knowledge of or
receipt of notice (oral or written) by any of the executive officers (who have
worked on the Transactions) or directors of the entity in question, as such
knowledge has been obtained in the normal conduct of the business of the entity
in question or in connection with the schedules to this Agreement and the
furnishing of information to the other party or parties, as applicable, to the
Transactions as contemplated by this Agreement after having made a reasonable
investigation and due inquiry of the accuracy of the representations and
warranties made by such entity in question, to the extent feasible given
confidentiality considerations, in this Agreement or in any document,
certificate or other writing furnished by such entity pursuant hereto or in
connection herewith.
Section 3.8 Claims. Except as set forth on Schedule 3.8(a) of the
Company Disclosure Schedules or in the Company SEC Documents, as of the date
hereof, there is no suit, written claim, written demand, action, proceeding,
including, without limitation, any arbitration proceeding or alternative dispute
resolution proceeding, or to the best knowledge of the Company, investigation
pending or, to the best knowledge of the Company, threatened against or
affecting, the Company or any of its Subsidiaries (collectively, "Claims"), that
would reasonably be expected to have a Company Material Adverse Effect. Except
as set forth on Schedule 3.8(b) of the Company Disclosure Schedules or in the
Company SEC Documents, there is no Claim or Claims that, either individually or
in the aggregate, if adversely determined, would have a Company Material Adverse
Effect.
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Section 3.9 Employee Benefit Plans; ERISA.
(a) Schedule 3.9(a) of the Company Disclosure Schedules contains a true
and complete list of each employment, bonus, deferred compensation, incentive
compensation, stock purchase, stock option, stock appreciation right or other
stock-based incentive, severance, change-in-control, or termination pay,
hospitalization or other medical, disability, life or other insurance,
supplemental unemployment benefits, profit sharing, pension, or retirement plan,
program, agreement or arrangement and each other employee benefit plan, program,
agreement or arrangement, sponsored, maintained or contributed to or required to
be contributed to by the Company or any of its Subsidiaries, or by any trade or
business, whether or not incorporated (an "ERISA Affiliate"), that together with
the Company or any of its Subsidiaries would be deemed a "single employer"
within the meaning of Section 4001(b)(1) of ERISA, for the benefit of any
current or former employee or director of the Company, or any of its
Subsidiaries or any ERISA Affiliate (the "Plans"). Schedule 3.9(a) of the
Company Disclosure Schedules identifies each of the Plans that is an "employee
welfare benefit plan," or "employee pension benefit plan" as such terms are
defined in Sections 3(1) and 3(2) of ERISA (such plans being hereinafter
referred to collectively as the "ERISA Plans"). Except as required by applicable
law, none of the Company, any of its Subsidiaries nor any ERISA Affiliate has
any formal plan or commitment, whether legally binding or not, to create any
additional Plan or modify or change any existing Plan that would affect any
current or former employee or director of the Company, any of its Subsidiaries
or any ERISA Affiliate.
(b) With respect to each of the Plans, the Company has heretofore
delivered to the Purchaser true and complete copies of each of the following
documents, as applicable:
(i) a copy of the Plan documents (including all amendments
thereto) for each written Plan or a written description of any Plan
that is not otherwise in writing;
(ii) a copy of the annual report or Internal Revenue Service
Form 5500 Series, if required under ERISA, with respect to each ERISA
Plan for the last three (3) Plan years ending prior to the date of this
Agreement for which such a report was required to be filed;
(iii) a copy of the actuarial report, if required under ERISA,
with respect to each ERISA Plan for the last three (3) Plan years
ending prior to the date of this Agreement;
(iv) a copy of the most recent Summary Plan Description
("SPD"), together with all Summaries of Material Modification issued
with respect to such SPD, if required under ERISA, with respect to each
ERISA Plan, and all other material employee communications relating to
each ERISA Plan;
(v) if the Plan is funded through a trust or any other funding
vehicle, a copy of the trust or other funding agreement (including all
amendments thereto) and the latest financial statements thereof, if
any;
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(vi) all contracts relating to the Plans with respect to which
the Company, any of its Subsidiaries or any ERISA Affiliate may have
any liability, including insurance contracts, investment management
agreements, subscription and participation agreements and record
keeping agreements; and
(vii) the most recent determination letter received from the
IRS with respect to each Plan that is intended to be qualified under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the
"Code").
(c) No liability under Title IV of ERISA has been incurred by the
Company, any of its Subsidiaries or any ERISA Affiliate since the effective date
of ERISA that has not been satisfied in full, and no condition exists that
presents a material risk to the Company, or any of its Subsidiaries or any ERISA
Affiliate of incurring any liability under such Title, other than liability for
premiums due the Pension Benefit Guaranty Corporation ("PBGC"), which payments
have been or will be made when due. To the extent this representation applies to
Sections 4064, 4069 or 4204 of Title IV of ERISA, it is made not only with
respect to the ERISA Plans but also with respect to any employee benefit plan,
program, agreement or arrangement subject to Title IV of ERISA to which the
Company, any of its Subsidiaries or any ERISA Affiliate made, or was required to
make, contributions during the past six (6) years.
(d) The PBGC has not instituted proceedings pursuant to Section 4042 of
ERISA to terminate any of the ERISA Plans subject to Title IV of ERISA, and no
condition exists that presents a material risk that such proceedings will be
instituted by the PBGC.
(e) With respect to each of the ERISA Plans that is subject to Title IV
of ERISA, the present value of accumulated benefit obligations under such ERISA
Plan, as determined by the ERISA Plan's actuary based upon the actuarial
assumptions used for funding purposes in the most recent actuarial report
prepared by such Plan's actuary with respect to such ERISA Plan, did not, as of
its latest valuation date, exceed then current value of the assets of such Plan
allocable to such accumulated benefit obligations.
(f) None of the Company, any of its Subsidiaries, any ERISA Affiliate,
any of the ERISA Plans, any trust created thereunder, nor to best knowledge of
the Company, any trustee or administrator thereof has engaged in a transaction
or has taken or failed to take any action in connection with which the Company,
any of its Subsidiaries or any ERISA Affiliate could be subject to any material
liability for either a civil penalty assessed pursuant to Section 409 or 502(i)
of ERISA or a tax imposed pursuant to Sections 4975(a) or (b), 4976 or 4980B of
the Code.
(g) All contributions and premiums that the Company, any of its
Subsidiaries or any ERISA Affiliate is required to pay under the terms of each
of the ERISA Plans and Section 412 of the Code, have, to the extent due, been
paid in full or properly recorded on the financial statements or records of the
Company or its Subsidiaries, and none of the ERISA Plans or any trust
established thereunder has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, as of the last day of the most recent fiscal year of each of the ERISA
Plans ended prior to the date of this Agreement. No lien has been imposed under
Section 412 (n) of the Code or Section 302 (f) of ERISA on the assets of the
Company, any
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of its Subsidiaries or any ERISA Affiliate, and no event or circumstance has
occurred that is reasonably likely to result in the imposition of any such lien
on any such assets on account of any ERISA Plan.
(h) With respect to any ERISA Plan that is a "multi-employer plan," as
such term is defined in Section 3 (37) of ERISA, (i) neither the Company, any of
its Subsidiaries nor any ERISA Affiliate has, since September 26, 1980, made or
suffered a "complete withdrawal" or a "partial withdrawal," as such terms are
respectively defined in Sections 4203 and 4205 of ERISA, (ii) no event has
occurred that presents a material risk of a complete or partial withdrawal,
(iii) none of the Company, any of its Subsidiaries or any ERISA Affiliate has
any contingent liability under Section 4204 of ERISA, (iv) no circumstances
exist that present a material risk that any such multi-employer plan will go
into reorganization, and (v) the aggregate withdrawal liability of the Company,
each of its Subsidiaries and the ERISA Affiliates, computed as if a complete
withdrawal by the Company, each of its Subsidiaries and all of its ERISA
Affiliates had occurred under each such multi-employer plan on the date hereof,
would be zero.
(i) Each of the Plans has been operated and administered in all
material respects in accordance with applicable laws, including but not limited
to ERISA and the Code.
(j) Each of the ERISA Plans that is intended to be "qualified" within
the meaning of Section 401(a) of the Code is so qualified. the Company has
applied for and received a currently effective determination letter from the IRS
stating that it is so qualified, and no event has occurred which would affect
such qualified status.
(k) Each of the ERISA Plans that is intended to qualify under Section
501(c)(9) of the Code is so qualified and meets the requirements of Section
505(c) of the Code and the regulations thereunder.
(l) Except as set forth in Schedule 3.9(l) of the Company Disclosure
Schedules, no amounts payable under any of the Plans or any other contract,
agreement or arrangement with respect to which the Company or any of its
Subsidiaries may have any liability could fail to be deductible for federal
income tax purposes by virtue of Section 162(m) or Section 280G of the Code.
(m) Except as set forth in Schedule 3.9(m) of the Company Disclosure
Schedules, no Plan provides death or medical benefits (whether or not insured),
with respect to current or former employees of the Company, its Subsidiaries or
any ERISA Affiliate after retirement or other termination of service (other than
(i) coverage mandated by applicable laws, (ii) death benefits or retirement
benefits under any "employee pension plan," as that term is defined in Section
3(2) of ERISA, (iii) deferred compensation benefits accrued as liabilities on
the books of the Company, any of its Subsidiaries or an ERISA Affiliate, or (iv)
benefits, the full direct cost of which is borne by the current or former
employee (or beneficiary thereof)).
(n) Except as set forth in Schedule 3.9(n) of the Company Disclosure
Schedules and as provided in Section 2.4 hereof, the consummation of the
transactions contemplated by this Agreement will not (i) entitle any current or
former employee, officer or director of the Company, any of its Subsidiaries or
any ERISA Affiliate to severance pay, unemployment compensation or any other
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similar termination payment, or (ii) accelerate the time of payment or vesting,
or increase the amount of or otherwise enhance any benefit due any such
employee, officer or director.
(o) There are no pending or, to the best knowledge of the Company,
threatened or anticipated claims by or on behalf of any Plan by any employee or
beneficiary under any such Plan or otherwise involving any such Plan (other than
routine claims for benefits).
(p) Except as set forth in Schedule 3.9(p) of the Company Disclosure
Schedules, no Plan is currently under examination by, and there are no issues
related to the Plans currently pending before, the Internal Revenue Service,
Department of Labor, Pension Benefit Guaranty Corporation or any court.
(q) There are no material liabilities under any foreign laws with
respect to the Plans.
Section 3.10 Taxes.
(a) Except as set forth in Schedule 3.10 of the Company Disclosure
Schedules:
(i) the Company and its Subsidiaries have (A) duly filed (or
there have been filed on their behalf) with the appropriate Tax
Authorities (as hereinafter defined) all Tax Returns (as hereinafter
defined) required to be filed by them on or prior to the date hereof
(except where the failure to file a Tax Return would not have a
material adverse effect on the entity failing to file such Tax Return),
and such Tax Returns are true, correct and complete in all material
respects, and (B) duly paid in full or made provision in accordance
with GAAP (or there has been paid or provision has been made on their
behalf) for the payment of all Taxes (as hereinafter defined) for all
periods (or portions thereof) ending on or prior to the date hereof;
(ii) there are no liens for Taxes upon any property or assets
of the Company or any Subsidiary thereof, except for liens for Taxes
not yet due and for which adequate reserves have been established in
accordance with GAAP;
(iii) within the past three (3) years, neither the Company nor
any of its Subsidiaries has made any change in tax reporting method,
received a ruling from any Tax Authority or signed an agreement with
regard to Taxes;
(iv) no federal, state, local or foreign Audits (as
hereinafter defined) are pending with regard to any Taxes or Tax
Returns of the Company or its Subsidiaries and, to the best knowledge
of the Company and its Subsidiaries, no Audit is threatened;
(v) the Tax Returns of the Company and its Subsidiaries have
been examined by the applicable Taxing Authorities (or the applicable
statutes of limitation for the assessment of Taxes for such periods
have expired) for all periods through and including December 31, 1994,
and no material adjustments were asserted as a result of such
examinations which have not been resolved and fully paid, and no issue
has been raised by any Tax Authority in any Audit of the Company or its
Subsidiaries that, if raised with respect to any other period not
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so audited, could be expected to result in a proposed material
deficiency for any period not so audited;
(vi) there are no outstanding requests, agreements, consents
or waivers to extend the statutory period of limitations applicable to
the assessment of any Taxes or deficiencies against the Company or any
of its Subsidiaries, and no power of attorney granted by either the
Company or any of its Subsidiaries with respect to any Taxes is
currently in force;
(vii) neither the Company nor any of its Subsidiaries is a
party to any agreement providing for the allocation, indemnification,
or sharing of Taxes;
(viii) neither the Company nor any of its Subsidiaries is a
party to any agreement, contract or arrangement that could result,
separately or in the aggregate, in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code or in payments
that will not be deductible under Section 162(m) of the Code;
(ix) neither the Company nor any of its Subsidiaries has filed
a consent pursuant to Section 341(f) of the Code or made or filed an
election under Sections 108, 441 or 1017 of the Code;
(x) neither the Company nor any of its Subsidiaries is a party
to any safe harbor lease within the meaning of Section 168(f)(8) of the
Code, as in effect prior to amendment by the Tax Equity and Fiscal
Responsibility Act of 1982;
(xi) neither the Company nor any of its Subsidiaries is liable
for any material Taxes to any foreign Tax Authority. The Company and
its Subsidiaries do not have and have not had a permanent establishment
in any foreign country, as defined in the applicable Tax treaty or
convention between the United States and such foreign country;
(xii) neither the Company nor any of its Subsidiaries is
required to include in income any adjustment under Section 481(a) of
the Code by reason of a change in accounting method initiated by the
Company or any of its Subsidiaries and the Internal Revenue Service has
not proposed any such adjustment or change in accounting method;
(xiii) neither the Company nor any of its Subsidiaries is a
partner in any joint venture, partnership or other arrangement or
contract that could be treated as a partnership for federal income tax
purposes;
(xiv) other than as a result of the Transactions contemplated
herein, none of the Company's tax attributes are subject to the
limitations of Sections 382, 383 or 384 of the Code or Section
1.1502-21(c) of the Treasury Regulations (as hereinafter defined); and
(xv) since its formation, the Company has been a member of an
affiliated group of corporations within the meaning of Section 1504 of
the Code, with respect to which the Company is and at all times has
been the common parent, and has joined in or expects to join in the
filing of a consolidated federal income tax return for all its Tax
periods ending on or
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prior to the Effective Time. Neither the Company nor any of its
Subsidiaries has been a member of any other affiliated group of
corporations within the meaning of Section 1504 of the Code.
(b) "Audit" means any audit, assessment, or other examination relating
to Taxes by any Tax Authority or any judicial or administrative proceedings
relating to Taxes. "Tax" or "Taxes" means all federal, state, local, and foreign
taxes, and other assessments of a similar nature (whether imposed directly or
through withholding), including any interest, additions to tax, or penalties
applicable thereto, imposed by any Tax Authority. "Tax Authority" means the
Internal Revenue Service and any other domestic or foreign governmental
authority responsible for the administration of any Taxes. "Tax Returns" mean
all federal, state, local and foreign tax returns, declarations, statements,
reports, schedules, forms, and information returns and any amendments thereto.
"Treasury Regulations" means one or more treasury regulations promulgated under
the Code by the Treasury Department of the United States.
Section 3.11 Contracts.
For purposes of this Agreement, the Company Agreements consist of the
following:
(a) all sales and distribution contracts of the Company or its
Subsidiaries with respect to which at least an aggregate of $500,000 in
revenues and/or orders were received or revenued thereunder since
January 1, 1998, which sales and distribution contracts are identified
(to the best knowledge of the Company) on Schedule 3.11(a) of the
Company Disclosure Schedules;
(b) all supply agreements material to the business of the
Company under which products were bought or licensed since January 1,
1998 for resale or relicense, which supply agreements are identified
(to the best knowledge of the Company) in Schedule 3.11(b) to the
Company Disclosure Schedules;
(c) all supply agreements for the purchase of goods, software
(other than commercially available or "shrink wrap" software) or other
products for the Company's or its Subsidiaries' internal use under
which orders aggregating at least $250,000 were placed thereunder since
January 1, 1998, which internal supply agreements are identified in
Schedule 3.11(c) of the Company Disclosure Schedules;
(d) the form of confidentiality agreement that has customarily
been used between the Company and its employees, a copy of which is
included as Schedule 3.11(d) of the Company Disclosure Schedules;
(e) the form of agreement generally used by the Company in
engaging independent contractors, a copy of which is included as
Schedule 3.11(e) of the Company Disclosure Schedules;
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(f) all agreements (irrespective of date of execution)
pursuant to which the Company has escrowed source code, which
agreements are identified (to the best knowledge of the Company) in
Schedule 3.11(f) of the Company Disclosure Schedules; and
(g) all powers of attorney (irrespective of date of execution)
of a material nature (excluding usual and customary powers of attorney
for filing trademarks and patents, and usual and customary powers of
attorney for filing documents with governmental authorities and
otherwise complying with corporate formalities in foreign
jurisdictions) executed by the Company or its Subsidiaries in favor of
one or more third parties, which powers of attorney are identified (to
the best knowledge of the Company) in Schedule 3.11(g) of the Company
Disclosure Schedules.
To the best knowledge of the Company, each Company Agreement is a valid and
binding agreement in full force and effect, except where the failure to be valid
and binding and in full force and effect would not have a Company Material
Adverse Effect. To the best knowledge of the Company, there are no defaults, or
events which, with notice or the lapse of time, or both, would result in a
default under any of the Company Agreements, except such defaults and events
that would not, in the aggregate, have a Company Material Adverse Effect.
Section 3.12 Real Property and Leased Property.
(a) Schedule 3.12(a) of the Company Disclosure Schedules sets forth a
complete list of all real property owned by the Company or its Subsidiaries (the
"Real Property"). Except as set forth in Schedule 3.12(a) of the Company
Disclosure Schedules, the Company or its Subsidiaries has good and marketable
title to the Real Property, free and clear of all Encumbrances. Copies of (i)
all deeds, title insurance policies and surveys of the Real Property and (ii)
all documents evidencing all Encumbrances upon the Real Property have been
furnished to Parent. There are no proceedings, claims, disputes or conditions
affecting any Real Property that might curtail or interfere with the use of such
property, nor is an action of condemnation or eminent domain pending or to the
best knowledge of the Company, threatened for all or any portion of the Real
Property. Except as disclosed in Schedule 3.12(a) of the Company Disclosure
Schedules, neither the Company nor any of its Subsidiaries is a party to any
lease, assignment or similar arrangement under which the Company or a Subsidiary
is a lessor, assignor or otherwise makes available for use by any third party
any portion of the Real Property.
(b) Within the prior twelve (12) months of the date of this Agreement,
neither the Company nor any of its Subsidiaries has received any notice of or
other writing referring to any requirements or recommendations by any insurance
company that has issued a policy covering any part of the Real Property or by
any board of fire underwriters or other body exercising similar functions,
requiring or recommending any repairs or work to be done on any part of the Real
Property. The plumbing, electrical, heating, air conditioning, ventilating and
all other structural or material mechanical systems in the buildings upon the
Real Property are in working order and working condition, so as to be adequate
for the operation of the business of the Company and its Subsidiaries as
heretofore conducted, and the roof, basement and foundation walls of all
buildings on the Real Property are free of leaks and other material defects,
except for any matter otherwise covered by this sentence which does not have,
individually or in the aggregate, a Company Material Adverse Effect.
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(c) The Company and its Subsidiaries have obtained all appropriate
licenses, permits, easements and rights of way, including proofs of dedication,
required to use and operate the Real Property, as well as the properties listed
on Schedule 3.12(e) of the Company Disclosure Schedules, in the manner in which
the Real Property is currently being used and operated, except for such
licenses, permits or rights of way the failure of which to have obtained does
not have, individually or in the aggregate, a Company Material Adverse Effect.
(d) Neither the Company nor any of its Subsidiaries has received
notification that the Company or a Subsidiary is in violation of any applicable
building, zoning, anti-pollution, health or other law, ordinance or regulation
in respect of the Real Property or structures or their operations thereon and,
to the best knowledge of the Company, no such violation exists.
(e) Set forth on Schedule 3.12(e) of the Company Disclosure Schedules
is a list of all real property leases to which the Company or any of its
Subsidiaries is a party and that extend for a more than one (1) year after the
date of this Agreement. The Company and each of its Subsidiaries has a good and
valid leasehold interest in all properties held by them under lease listed on
Schedule 3.12(e) of the Company Disclosure Schedules. The lessee under each such
lease and its predecessor under each such lease, if any, has been in peaceable
possession (or remedied any claims relating thereto) of the property covered
thereby since the commencement of the original term of such lease. No waiver,
indulgence or postponement of the lessee's material obligations under any such
lease has been granted by the lessor, and no waiver, indulgence or postponement
of the lessor's obligations thereunder has been granted by the lessee. The
lessee under each such lease is not in breach of or in default under such lease,
nor has any event occurred which (with or without the giving of notice or the
passage of time or both) would constitute a default by the lessee under such
lease or cause a the Company Material Adverse Effect, and the lessee has not
received any notice from, or given any notice to, the lessor indicating that the
lessee or the lessor is in breach of or in default under such lease that would
cause a Company Material Adverse Effect. To the best knowledge of the Company
and each of its Subsidiaries, none of the lessors under such leases is in breach
thereof or in default thereunder.
Section 3.13 Intellectual Property.
(a) Schedule 3.13(a) of the Company Disclosure Schedules is a true and
complete list of all (i) patents and patent applications, (ii) trademark
registrations and applications, (iii) service mark registrations and
applications, (iv) Product Software (as hereinafter defined), (v) copyright
registrations and applications, (vi) material unregistered trademarks and
service marks, and (vii) Internet domain names used or held for use in
connection with the business of the Company or any of its Subsidiaries, together
with all material licensing, sub-licensing, distribution, consignment and
similar agreements related to the foregoing (whether the Company or any of its
Subsidiaries is the licensee or licensor thereunder) other than distribution and
licensing agreements relating to Product Software and Computer Software (as
hereinafter defined) entered into in the ordinary course of business. Other than
as listed in Schedule 3.11(f) of the Company Disclosure Schedules, and for
contracts covered by that provision, no agreement licensing the Intellectual
Property (as hereinafter defined) of the Company to any licensee creates an
option for such licensee to purchase any of the
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Intellectual Property owned by the Company, its Subsidiaries or affiliates, or
would in any other way require the transfer of the Intellectual Property owned
by the Company, its Subsidiaries or any affiliate of the Company to such
licensee. The Company or one of its Subsidiaries currently is listed in the
records of the appropriate United States, state or foreign agency as the sole
owner of record for each application and registration listed in Schedule 3.13(a)
of the Company Disclosure Schedules.
(b) The term "Computer Software" shall mean, other than off-the-shelf
applications and Product Software, the following as used in the current business
of the Company or any of its Subsidiaries and which are material to the current
business of the Company: (i) any and all computer programs and applications
consisting of sets of statements and instructions to be used directly or
indirectly in computer software or firmware whether in source code or object
code form, (ii) databases and compilations, including without limitation any and
all data and collections of data, whether machine readable or otherwise, (iii)
all currently used versions of the foregoing including, without limitation, all
screen displays and designs thereof, and all component modules of source code or
object code or natural language code therefor, and whether recorded on papers,
magnetic media or other electronic or non-electronic device, (iv) all
descriptions, flow-charts and other work product used to design, plan, organize
and develop any of the foregoing, (v) all documentation, including without
limitation all technical and user manuals and training materials, relating to
the foregoing, and all content contained on all World Wide Web sites of the
Company or any of its Subsidiaries.
(c) The term "Product Software" shall mean the following as currently
used in as part of the products of the Company and any of its Subsidiaries: (i)
any and all computer programs and applications consisting of sets of statements
and instructions to be used directly or indirectly in computer software or
firmware whether in source code or object code form, included in or with any
products currently or heretofore sold, licensed or leased or offered for sale,
license or lease by the Company or any of its Subsidiaries (excluding software
developed specifically and solely for a customer or distributor of the Company
or any of its Subsidiaries and which is not offered to any other customers or
distributors of the Company or any of its Subsidiaries), (ii) databases and
compilations for or of any of the foregoing, including without limitation any
and all data and collections of data, whether machine readable or otherwise,
(iii) all versions of the foregoing including, without limitation, all screen
displays and designs thereof, and all component modules of source code or object
code or natural language code therefor, and whether recorded on papers, magnetic
media or other electronic or non-electronic device, (iv) all descriptions,
flow-charts and other work product used to design, plan, organize and develop
any of the foregoing, (v) all documentation, including without limitation all
technical and user manuals and training materials, relating to the foregoing,
and all content contained on all World Wide Web sites of the Company or any of
its Subsidiaries.
(d) Except as set forth on Schedule 3.13(d)(1) of the Company
Disclosure Schedules, the Company and its Subsidiaries, to the best knowledge of
the Company, own or have the right to use all patents, patent applications,
patent rights, copyrights, trademarks, trademark rights, trade names, trade name
rights, and service marks, and all goodwill of the business associated
therewith, trade secrets, technology and know-how, Computer Software other than
off-the-shelf applications, Product Software, Internet domain names,
registrations for and applications for registration of trademarks, service marks
and copyrights, and other confidential or proprietary rights and information and
all technical and user manuals and documentation made or used in connection with
any of the foregoing,
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used anywhere in the world in connection with the businesses of the Company or
any of its Subsidiaries as currently conducted (collectively, the "Intellectual
Property"), free and clear of all Encumbrances of any nature. Except as set
forth on Schedule 3.13(d)(2) of the Company Disclosure Schedules, the Company
and its Subsidiaries own the Product Software or have a valid right or with
respect to prior agreements had a valid right at the time of such agreement to
grant the rights and licenses in and to the Product Software currently or
heretofore set forth in the agreements between the Company or any of its
Subsidiaries and their respective customers, licensors, lessees, distributors
and other resellers. Schedule 3.13(d)(3) of the Company Disclosure Schedules
sets forth a true and complete list of all Product Software which is not
completely and solely owned by the Company and/or its Subsidiaries which is
material to the current business of the Company (collectively, "Licensed Product
Software"). The agreements described on Schedule 3.13(d)(3) of the Company
Disclosure Schedules set forth all of the rights and licenses of the Company and
each of its Subsidiaries in and to the Licensed Product Software, and all
restrictions and obligations (including, without limitation, royalty and other
payment obligations) associated with such rights and licenses, and each such
contract is in full force and effect and neither Company nor any of its
Subsidiaries is in material breach of any of its obligations under any such
Agreement. Any Encumbrances set forth on Schedule 3.13(d) of the Company
Disclosure Schedules do not materially detract from the value of the
Intellectual Property subject thereto and do not materially impair the
operations of any of the Company and its Subsidiaries.
(e) All patent, trademark and copyright registrations and applications
for Intellectual Property, whether registered or pending, that are currently
used or planned to be used in and are material to the conduct of the businesses
of the Company and its Subsidiaries as currently conducted, are listed on
Schedule 3.13(a) of the Company Disclosure Schedules. To the best knowledge of
the Company, such patents, trademarks and copyright registrations and
applications (i) are valid, subsisting, in proper form and enforceable, subject
to the rights of third parties, and have been duly maintained, including the
submission of all necessary filings and fees in accordance with the legal and
administrative requirements of the appropriate jurisdictions and (ii) have not
lapsed, expired or been abandoned, and no patent, trademark, copyright,
registration or application for any of the foregoing is the subject of any
opposition, interference, cancellation proceeding or other legal or governmental
proceeding before any governmental, registration or other authority in any
jurisdiction.
(f) To the best knowledge of the Company, the conduct of the businesses
of, and/or the use of the Intellectual Property, by the Company and its
Subsidiaries as currently conducted does not conflict with or infringe in any
way on any proprietary right of any third party. Other than as set forth in
Schedule 3.13(f) of the Company Disclosure Schedules there is no claim, suit,
action, correspondence, proceeding or negotiation pending or, to the best
knowledge of the Company, threatened against the Company or any of its
Subsidiaries (i) alleging any conflict or infringement with any third party's
proprietary rights, (ii) asserting the Company or any of its Subsidiaries should
consider licensing rights to a third party's patent or other proprietary rights
or (iii) challenging the ownership, use, validity or enforceability of the
Intellectual Property. Each of the Company and its Subsidiaries owns or has the
valid right to use all of the material Intellectual Property used by it or held
for use by it in connection with its business. To the best knowledge of the
Company, there are no conflicts with or infringements of any Intellectual
Property or products of the Company or its Subsidiaries by any third party.
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(g) Except as set forth on Schedule 3.13(g) of the Company Disclosure
Schedules, the Computer Software and Product Software used by the Company or any
of its Subsidiaries in the conduct of their businesses was either: (i) developed
by employees of the Company or such Subsidiary of the Company within the scope
of their employment; (ii) developed on behalf of the Company or any of its
Subsidiaries by a third party, and all ownership rights therein and in any other
associated Intellectual Property have been assigned or otherwise transferred to
or vested in the Company or such Subsidiary of the Company, as the case may be,
pursuant to written agreements ("Work for Hire Agreements"); (iii) acquired from
a third party pursuant to a written assignment or other contract ("Software
Acquisition Agreements") which is in full force and effect and of which neither
the Company nor any of its Subsidiaries is in material breach, or (iv) licensed
from a third party pursuant to a written license or other contract which is in
full force and effect and of which neither the Company nor any of its
Subsidiaries is in material breach. Except as set forth on Schedule 3.13(g)(2)
of the Company Disclosure Schedules, (x) no third party has had access to any of
the source code for any of the Product Software described in clause (i) or (ii)
hereof and (y) no act has been done or omitted to be done by the Company or any
of its Subsidiaries to impair or dedicate to the public or entitle any
Governmental Entity to hold abandoned any of such Computer Software or Product
Software.
(h) To the best knowledge of the Company, no consents, filings, and
authorizations by or with governmental authorities or third parties are
necessary with respect to the consummation of the Transactions contemplated
hereby as they may affect the Intellectual Property.
(i) Neither the Company nor any of its Subsidiaries has entered into
any material consent, forbearance to sue, settlement agreement or
cross-licensing arrangement with any person relating to the Intellectual
Property or the intellectual property of any third party other than as may be
contained in the agreements listed in Schedule 3.13(i) of the Company Disclosure
Schedules, or which is not material to the current business or products of the
Company.
(j) To the best knowledge of the Company, except as set forth on
Schedule 3.13(j) of the Company Disclosure Schedules, the Company and its
Subsidiaries are not, nor will any of them be as a result of the execution and
delivery of this Agreement or the performance of the Company's obligations under
this Agreement, in breach of any material license, sub-license or other
agreement relating to the Intellectual Property.
(k) No former or present employees, officers or directors of the
Company or any of its Subsidiaries hold any right, title or interest directly or
indirectly, in whole or in part, in or to any Intellectual Property.
(l) No trade secret or confidential know-how or other confidential
information relating to the Company or its Subsidiaries has been disclosed or
authorized to be disclosed to any third party, other than pursuant to a
non-disclosure agreement that fully protects the Company's and its Subsidiaries'
interests in and to such confidential information, except to the extent that the
failure to comply with any of the foregoing could not have, individually or in
the aggregate, a Company Material Adverse Effect.
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(m) As delivered to customers and as modified by the Company, the
Company's Product Software and Other Products (as hereinafter defined) conform
to their respective applicable specifications in all material respects, except
to the extent that the failure to comply with any of the foregoing could not
have, individually or in the aggregate, a the Company Material Adverse Effect.
(n) To the best knowledge of the Company, the conduct of the businesses
of the Company and its Subsidiaries, the use of the Intellectual Property and/or
any advertising or marketing materials used by the Company and its Subsidiaries
in connection with the Product Software or Other Products do not violate any
provision of the Trademark Act of 1946, as amended (the "Lanham Act"), including
without limitation Section 43 thereof, and there are no material misstatements
or omissions in any such materials which would violate any provision of the
Lanham Act, except to the extent that the failure to comply with any of the
foregoing could not have, individually or in the aggregate, a Company Material
Adverse Effect.
Section 3.14 Year 2000 Compliance.
(a) As of the date hereof, all Date-Sensitive Data and Date-Sensitive
Systems that are material to the business of the Company (each as hereinafter
defined) owned or used by, licensed or sold to the Company or any of its
Subsidiaries other than those set forth in Schedule 3.14(a) of Company
Disclosure Schedules, have been or will be evaluated for Year 2000 Compliance
issues and are Year 2000 Compliant or will be Year 2000 Compliant on or before
January 1, 2000, except to the extent that the failure to comply with any of the
foregoing could not have, individually or in the aggregate, a Company Material
Adverse Effect. The Company has requested representations from each entity that
(i) provides Date-Sensitive Data to the Company or any of its Subsidiaries which
is material to the business of the Company or (ii) processes in any way
Date-Sensitive Data or software (including the Computer Software or the Product
Software) for the Company or any of its Subsidiaries. The Company has obtained
or will use reasonable efforts to obtain written representations from each
entity that provides any material product or service to the Company or any of
its Subsidiaries that is dependent on Year 2000 Compliant Date-Sensitive Data or
Year 2000 Compliant Date-Sensitive Systems, that any of such entity's
Date-Sensitive Data and/or Date- Sensitive Systems that are used for, or on
behalf of, the Company or any of its Subsidiaries are Year 2000 Compliant,
except to the extent that the failure to comply with any of the foregoing in
this Section 3.14 could not have, individually or in the aggregate, a Company
Material Adverse Effect.
(b) As of the date hereof, all Product Software and all other products
sold, licensed or leased by the Company or any of its Subsidiaries which are, or
are used with, Date-Sensitive Systems or which process Date-Sensitive Data (the
"Other Products"), when used in accordance with their associated specifications
and other documentation, are Year 2000 Compliant subject to the express terms
and conditions of the Company's documentation attached as Schedule 3.14(b) of
the Company Disclosure Schedules (the "Company Year 2000 Representations"),
except to the extent that the failure to comply with any of the foregoing could
not have, individually or in the aggregate, a Company Material Adverse Effect.
To the best knowledge of Company, (a) the Company and its Subsidiaries have made
reasonable efforts not to make written representations concerning any Product
Software or other products of the Company or its Subsidiaries, which are in
addition to or inconsistent with the Company Year 2000 Representations and (b)
any such representations which are in addition to or inconsistent with the
Company Year 2000 Representations, will not, individually or in the aggregate,
have a Company Material Adverse Effect.
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(c) "Date-Sensitive Data" means any data of any type that includes date
information or which is otherwise derived from or dependent on date information.
(d) "Date-Sensitive System" means any software or hardware system or
component, including any electronic or electronically controlled system, that
processes any Date-Sensitive Data and that is installed, in development or on
order.
(e) "Year 2000 Compliant" means (x) with respect to Date-Sensitive
Data, that such data is in proper four digit CCYY format (or windowed around an
appropriate 100-year period which includes dates on, before and after January 1,
2000) and accurate for all dates in the twentieth and twenty-first centuries
without ambiguity, and (y) with respect to Date-Sensitive Systems, that such
Systems at all times accurately exchange, recognize, report and process all
Date-Sensitive Data, including for the twentieth and twenty-first centuries,
including but not limited to calculating, comparing, sequencing and storing such
Date Sensitive Data (including all leap year considerations), when used as a
stand-alone system or in combination with other software or hardware.
Section 3.15 Labor Matters.
(a) Except as set forth on Schedule 3.15(a) of the Company Disclosure
Schedules, (i) there is no labor strike, dispute, slowdown, stoppage or lock-out
pending, or to the best knowledge of the Company, threatened against or
affecting the Company and during the past two (2) years from the date of this
Agreement there has not been any such action, (ii) the Company is not a party to
or bound by any collective bargaining or similar agreement with any labor
organization, or work rules or practices agreed to with any labor organization
or employee association applicable to employees of the Company, (iii) none of
the employees of the Company is represented by any labor organization and the
Company does not have any knowledge of any union organizing activities among the
employees of the Company within the past two (2) years, nor does any question
concerning representation exist concerning such employees, (iv) there are no
written personnel policies, rules or procedures applicable to employees of the
Company, other than those set forth on Schedule 3.15(a) of the Company
Disclosure Schedules, true and correct copies of which have heretofore been
delivered to Parent, (v) to the best of its knowledge, the Company is, and has
at all times been, in compliance, in all material respects, with all applicable
laws respecting employment and employment practices, terms and conditions of
employment, wages, hours of work and occupational safety and health, and is not
engaged in any unfair labor practices as defined in the National Labor Relations
Act or other applicable laws that would cause a Company Material Adverse Effect,
(vi) there is no unfair labor practice charge or written complaint against the
Company pending or, to the best knowledge of the Company, threatened before the
National Labor Relations Board or any similar state, local or foreign agency,
(vii) there is no grievance arising out of any collective bargaining agreement
or other grievance procedure, (viii) no charges with respect to or relating to
the Company are pending before the Equal Employment Opportunity Commission or
any other agency responsible for the prevention of unlawful employment
practices, (ix) the Company has not received notice of the intent of any
federal, state, local or foreign agency responsible for the enforcement of labor
or employment laws to conduct an investigation with respect to or relating to
the Company and no such investigation is
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in progress, and (x) there are no complaints, lawsuits or other proceedings
pending or, to the best knowledge of the Company, threatened in any forum by or
on behalf of any present or former employee of the Company, any applicant for
employment or classes of the foregoing alleging breach of any express or implied
contract for employment, any laws governing employment or the termination
thereof or other discriminatory, wrongful or tortious conduct in connection with
the employment relationship.
(b) The Company represents and warrants that (i) any liabilities under
the Worker Adjustment and Retraining Notification Act (the "WARN Act") arising
out of the Asset Purchase Agreement dated September 23, 1997, with IT Network,
Inc., were covered by an indemnification provision that terminated on April 23,
1999, and as of the date of this Agreement, the Company has not been advised of
any WARN Act claims arising out of that transaction that would have given rise
to IT Network Inc.'s indemnification obligation; (ii) to the best knowledge of
the Company, neither ProfitSource Corporation nor TSL Services, Inc. has
effectuated a "plant closing" or "mass layoff" (as defined by the WARN Act)
since December 14, 1998, which is the effective date of the Stock Purchase
Agreement between the Company and BVS Investco, Inc., TSL Services, Inc., and
ProfitSource Corporation; (iii) except for those matters addressed in subparts
(i) and (ii) of this paragraph, the Company has not experienced an "employment
loss" (as defined by the WARN Act) at any site of employment that would qualify
as a "plant closing" or "mass layoff" (as defined by the WARN Act) since the
enactment of the WARN Act; and (iv) during the three-month period ending March
31, 1999, the individuals whose employment with the Company terminated at each
single site of employment (as defined by 20 C.F.R. Section 639.3(i)) are as set
forth on Schedule 3.15(b) of the Company Disclosure Schedules.
Section 3.16 Compliance with Laws. To the best of its knowledge, the
Company and each of its Subsidiaries has complied in a timely manner and in all
material respects with all laws, rules and regulations, ordinances, judgments,
decrees, orders, writs and injunctions of all United States federal, state,
local and foreign governments and agencies thereof which affect the business,
properties or assets of the Company and its Subsidiaries, and no notice, charge,
claim, action or assertion has been received by the Company or any of its
Subsidiaries or has been filed, commenced or, to the best knowledge of the
Company, threatened against the Company or any of its Subsidiaries alleging any
violation of any of the foregoing. All licenses, permits and approvals required
under such laws, rules and regulations are in full force and effect except where
the failure to be in full force and effect would not have a Company Material
Adverse Effect.
Section 3.17 Environmental Matters.
(a) Except as set forth in Schedule 3.17(a) of the Company Disclosure
Schedules, each of the Company and its Subsidiaries is in full compliance with
all federal, state, local and foreign laws and regulations relating to pollution
or protection of human health or the environment, including, without limitation,
ambient air, surface water, ground water, land surface or subsurface strata, and
natural resources (together "Environmental Laws" and including, without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic or
hazardous substances or wastes, petroleum and petroleum products,
polychlorinated biphenyls (PCBs), or asbestos or asbestos-containing materials
("Materials of Environmental Concern")), or otherwise relating to the
manufacture, processing, distribution, use,
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treatment, storage, disposal, transport or handling of Materials of
Environmental Concern, except where the failure so to comply would not cause a
Company Material Adverse Effect. Such compliance includes, but is not limited
to, the possession by the Company and each of its Subsidiaries of all permits
and other governmental authorizations required under all applicable
Environmental Laws, and compliance with the terms and conditions thereof. All
permits and other governmental authorizations currently held by the Company and
each of its Subsidiaries pursuant to the Environmental Laws are identified in
Schedule 3.17(a) of the Company Disclosure Schedules.
(b) Except as set forth in Schedule 3.17(b) of the Company Disclosure
Schedules, neither the Company nor any of its Subsidiaries has received any
communication (written or oral), whether from a governmental authority or
citizens group that alleges that the Company or any of its Subsidiaries is not
in full compliance with any Environmental Laws. The Company has provided to
Parent such information, if any, that is in the possession of or reasonably
available to the Company regarding environmental matters pertaining to or the
environmental condition of the business of the Company and its Subsidiaries, or
the compliance (or noncompliance) by the Company and its Subsidiaries with any
Environmental Laws.
(c) Except as set forth in Schedule 3.17(c) of the Company Disclosure
Schedules, there is no claim, action, cause of action, investigation or notice
(written or oral) (together, "Environmental Claim") by any person or entity
alleging potential liability (including, without limitation, potential liability
for investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, death, personal injuries, or penalties)
arising out of, based on or resulting from (a) the presence, or release into the
environment, of any Material of Environmental Concern at any location, whether
or not owned or operated by the Company or any of its Subsidiaries or (b)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law, that in either case is pending or threatened against the
Company or any of its Subsidiaries, or against any person or entity whose
liability for any Environmental Claim the Company has retained or assumed either
contractually or by operation of law.
(d) Without in any way limiting the generality of the foregoing, except
as set forth in Schedule 3.17(d) of the Company Disclosure Schedules, to the
best knowledge of the Company, there is no asbestos contained in or forming part
of any building, building component, structure or office space owned, leased,
operated or controlled by the Company or any of its Subsidiaries.
Section 3.18 Product Liability. Except as described in Schedule 3.18 of
the Company Disclosure Schedules, there are not presently pending, or to the
best knowledge of the Company, threatened any criminal, material civil or
administrative actions, suits, demands, claims, hearings, notices of violation,
investigations, proceedings or demand letters relating to any alleged hazard or
alleged defect in design, manufacture, development, programming, materials or
workmanship, including any failure to warn or alleged breach of express or
implied warranty or representation, relating to any product manufactured,
developed, programmed, distributed, licensed or sold by or on behalf of the
Company and its Subsidiaries.
Section 3.19 Information in Disclosure Documents. None of the
information supplied or to be supplied by the Company for the purpose of
inclusion or incorporation by reference in (i) the Offer Documents, at the time
such documents are first published, sent or given to the holders of
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Shares, and at any time they are amended or supplemented, (ii) the Registration
Statement to be filed with the SEC by Parent in connection with the issuance of
Parent Common Stock in the Merger, at the time the Registration Statement is
filed with the SEC or at the time it becomes effective under the Securities Act,
(iii) the Proxy Statement at the date it is first mailed to the Company's
stockholders or at the time of the Special Meeting, or (iv) any syndication or
other materials to be delivered to potential financing sources in connection
with the Transactions or otherwise in connection with the Debt Financing at the
date such materials are first delivered, 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, in light of the
circumstances under which they are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, except that no
representations and warranties are made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Parent or Purchaser for inclusion or incorporation by reference in
the Proxy Statement or contained in the Parent SEC Documents (as hereinafter
defined) incorporated by reference in the Offer Documents, the Registration
Statement, the Proxy Statement or the syndication or other materials.
Section 3.20 Potential Conflict of Interest. Except as set forth in
Schedule 3.20 of the Company Disclosure Schedules or in the Company SEC
Documents filed prior to the date hereof, since December 31, 1998, there have
been no transactions, agreements, arrangements or understandings between the
Company or its Subsidiaries, on the one hand, and their respective affiliates,
on the other hand, that would be required to be disclosed under Item 404 of
Regulation S-K under the Securities Act. Except as set forth in Schedule 3.20 of
Company Disclosure Schedules or in the Company SEC Documents filed prior to the
date hereof, no officer of the Company or any of its Subsidiaries owns, directly
or indirectly, any interest in (excepting not more than one percent (1%) stock
holdings for investment purposes in securities of publicly held and traded
companies) or is an officer, director, employee or consultant of any person
which is a competitor, lessor, lessee, customer or supplier of the Company or
any of its Subsidiaries; and no officer or director of the Company or any of its
Subsidiaries (i) owns, directly or indirectly, in whole or in part, any
Intellectual Property which the Company or any of its Subsidiaries is using or
the use of which is necessary for the business of the Company or its
Subsidiaries; (ii) has any claim, charge, action or cause of action against the
Company or any of its Subsidiaries, except for claims for accrued vacation pay,
accrued benefits under the Plans and similar matters and agreements existing on
the date hereof; (iii) has made, on behalf of the Company or any of its
Subsidiaries, any payment or commitment to pay any commission, fee or other
amount to, or to purchase or obtain or otherwise contract to purchase or obtain
any goods or services from, any other Person of which any officer or director of
the Company or any of its Subsidiaries, or, to the best knowledge of the
Company, a relative of any of the foregoing, is a partner or stockholder (except
stock holdings solely for investment purposes in securities of publicly held and
traded companies); or (iv) owes any money to the Company or any of its
Subsidiaries.
Section 3.21 Insurance. The Company and each of its Subsidiaries have
policies of insurance and bonds of the type and in amounts customarily carried
by persons conducting businesses or owning assets similar to those of the
Company and its Subsidiaries. There is no material claim pending under any of
such policies or bonds as to which coverage has been questioned, denied or
disputed by the underwriters of such policies or bonds. All premiums due and
payable under all such policies and bonds have been paid and the Company and its
Subsidiaries are otherwise in compliance in all material respects with the terms
of such policies and bonds. The Company has no knowledge of any threatened
termination of, or material premium increase with respect to, any of such
policies.
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Section 3.22 Suppliers and Customers. Since December 31, 1998, no
material licensor, vendor, supplier, licensee or customer of the Company or any
of its Subsidiaries has canceled or otherwise modified its relationship with the
Company or its Subsidiaries and, to the best knowledge of the Company, (i) no
such person has any intention to do so, and (ii) the consummation of the
transactions contemplated hereby will not adversely affect any of such
relationships in any material respect, except to the extent the failure to
comply with any of the foregoing could not have, individually or in the
aggregate, a Company Material Adverse Effect.
Section 3.23 Accounts Receivable; Inventory.
(a) Subject to any reserves set forth in the consolidated balance sheet
of the Company included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1998 as filed with the SEC (the "Company Balance Sheet"), the
accounts receivable shown in the Company Balance Sheet arose in the ordinary
course of business, were not, as of the date of the Company Balance Sheet,
subject to any material discount, contingency, claim of offset or recoupment or
counterclaim, and represented, as of the date of the Company Balance Sheet, bona
fide claims against debtors for sales, leases, licenses and other charges. All
accounts receivable of the Company and its Subsidiaries arising after the date
of the Company Balance Sheet through the date of this Agreement arose in the
ordinary course of business and, as of the date of this Agreement, are not
subject to any material discount, contingency, claim of offset or recoupment or
counterclaim, except for normal reserves consistent with past practice. The
amount carried for doubtful accounts and allowances disclosed in the Company
Balance Sheet is believed by the Company as of the date of such the Company
Balance Sheet to be sufficient to provide for any losses which may be sustained
or failure to realize the accounts receivable shown in the Company Balance
Sheet.
(b) As of the date of the Company Balance Sheet, the inventories shown
on the Company Balance Sheet consisted in all material respects of items of a
quantity and quality usable or saleable in the ordinary course of business. All
of such inventories were manufactured or acquired in the ordinary course of
business and, as of the date of this Agreement, have been replenished in all
material respects in the ordinary course of business consistent with past
practices. All such inventories are valued on the Company Balance Sheet in
accordance with GAAP, applied on a basis consistent with the Company's past
practices, and provision has been made or reserves have been established on the
Company Balance Sheet, in each case in an amount believed by the Company as of
the date of this Agreement to be adequate, for all slow-moving, obsolete or
unusable inventories.
Section 3.24 Title and Condition of Properties. The Company and its
Subsidiaries have good and marketable title, free and clear of all Encumbrances,
to all of the personal property and assets shown on the Company Balance Sheet or
acquired after December 31, 1998, except for (A) assets which have been disposed
of to nonaffiliated third parties since December 31, 1998, in the ordinary
course of business, (B) Encumbrances reflected in the Company Balance Sheet, (C)
Encumbrances or imperfections of title which are not, individually or in the
aggregate, material in character, amount or extent and which do not materially
detract from the value or materially interfere with the present or presently
contemplated use of the assets subject thereto or affected thereby, and
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(D) liens for current Taxes not yet due and payable. All of the machinery,
equipment and other tangible personal property and assets owned or used by the
Company or its Subsidiaries are operational, except for ordinary wear and tear
not caused by neglect, and are usable in the ordinary course of business.
Section 3.25 Illegal Payments. To the best knowledge of the Company,
none of the Company or any of its Subsidiaries or any director, officer,
employee, or agent of the Company or any of its Subsidiaries has, directly or
indirectly, paid or delivered any fee, commission, or other sum of money or item
of property however characterized to any broker, finder, agent, government
official, or other person, in the United States or any other country, in any
manner related to the business or operations of the Company or any of its
Subsidiaries, which the Company or any of its Subsidiaries or any such director,
officer, employee, or agent knows or has reason to believe to have been illegal
under any applicable law, including but not limited to the Foreign Corrupt
Practices Act.
Section 3.26 Phoenix Acquisition. Any agreement or letter of intent
between the Company and Phoenix Wireless Group, Inc. is non-binding on the
Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant to the Company as
follows:
Except as set forth in the schedules delivered to the Company prior to
the execution of this Agreement (the "Parent Disclosure Schedules") setting
forth, among other things, specific exceptions to Parent's and Purchaser's
representations and warranties set forth herein, Parent and the Purchaser
represent and warrant to the Company as set forth below. Each exception set
forth in the Parent Disclosure Schedules is identified by reference to, or has
been grouped under a heading referring to, a specific individual section of this
Agreement and, except as otherwise specifically stated with respect to such
exception, relates only to such section.
Section 4.1 Organization; Qualification; Charter and Bylaws.
(a) Parent and each of its Subsidiaries is a corporation, partnership
or other entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has all
requisite corporate or other power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to have such governmental
approvals would not, individually or in the aggregate, have a Parent Material
Adverse Effect (as hereinafter defined). As used in this Agreement, "Parent
Material Adverse Effect" means any event, change in or effect on the business of
Parent or its Subsidiaries, taken as a whole, that is or would be expected to be
materially adverse to (i) the business, operations, properties (including
intangible properties), financial condition or results of operations or
prospects of Parent or its Subsidiaries, taken as a whole, or (ii) the ability
of Parent to consummate any of the Transactions or to perform its obligations
under this Agreement or the Stockholders' Agreement, but such definition shall
not include (A) any material adverse change
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due to the transactions contemplated by this Agreement, (B) any material adverse
change in the Parent's established industry as a whole, or (C) a material
adverse change in the general economic conditions of the United States of
America. Set forth in Schedule 4.1(a) of the Parent Disclosure Schedules is a
complete list of Parent's Subsidiaries, including the respective jurisdictions
in which such Subsidiaries are organized and Parent's ownership of each.
(b) Parent and each of its Subsidiaries is duly qualified or licensed
to do business and in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except where the failure to be
so duly qualified or licensed and in good standing would not individually or in
the aggregate have a Parent Material Adverse Effect. Except as set forth in
Schedule 4.1(b) of the Parent Disclosure Schedules, Parent does not own (i) any
equity interest in any corporation or other entity or (ii) marketable securities
where Parent's equity interest in any entity exceeds five percent (5%) of the
outstanding equity of such entity on the date hereof.
(c) Parent has made available to the Company accurate and complete
copies of (i) the Articles and/or Certificates of Incorporation and By-Laws of
Parent and each of its material Subsidiaries (certified by the respective
Secretaries of State of Parent's, and each of its material Subsidiaries'
jurisdiction of incorporation and the secretary or an assistant secretary of
Parent, and each of its Subsidiaries, respectively) as currently in effect, (ii)
the stock records of Parent and each of its Subsidiaries and (iii) (A) the
minutes of all meetings of Parent's and its material Subsidiaries' Boards of
Directors, any committees of such Boards, and Parent's, and its material
Subsidiaries', shareholders (and all consents in lieu of such meetings) each for
the past five (5) years and (B) the minutes of all meetings of the remaining
Subsidiaries' Board of Directors, and committees of such Boards, and each of
such Subsidiaries' shareholders (and all consents in lieu of such meetings) each
for the past two (2) years (other than InterVoice Limited (Private Limited
Company), InterVoice da Brasil Ltd., InterVoice Communications International,
Inc., VoicePlex Corporation, InterVoice International, Inc. and Phone Star
Corp., none of which Subsidiaries is material to Parent). Such records, minutes,
and consents accurately reflect the stock ownership of the Company, and each of
its Subsidiaries and all actions taken by Parent at such meetings, and each of
its Subsidiaries' Boards, any committees of such Board, and Parent's, and each
of its Subsidiaries' shareholders. Neither Parent nor any of its Subsidiaries is
in violation of any provision of its respective Articles of Incorporation or
By-Laws, except where such violation would not result in a Parent Material
Adverse Effect.
Section 4.2 Capitalization.
(a) The authorized capital stock of Parent consists of 62,000,000
shares of Parent Common Stock and 2,000,000 shares of preferred stock, $100 par
value per share ("Parent Preferred Stock"). As of the date hereof, (i)
28,743,102 shares of Parent Common Stock, together with associated Rights, are
issued and outstanding, (ii) no shares of Parent Preferred Stock are issued and
outstanding, (iii) 5,994,800 shares of Parent Common Stock are issued and held
in the treasury of Parent, (iv) a total of 5,819,507 shares of Parent Common
Stock are reserved for issuance pursuant to the 1990 Incentive Stock Option
Plan, the 1990 Non-Qualified Stock Option Plan for Non- Employees, the 1984
Incentive Stock Option Plan, the 1998 Stock Option Plan, the Restricted Stock
Plan and the Employee Stock Purchase Plan (collectively, the "Parent Stock
Plans"). Schedule
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4.2(a)(i) of the Parent Disclosure Schedules sets forth the maximum number of
shares of Common Stock reserved for future issuance or purchase pursuant to each
Parent Stock Plan, the number of shares of Common Stock available for issuance
or purchase pursuant to each Parent Stock Plan, the aggregate number of shares
subject to outstanding options under the Parent Stock Plan, and the respective
exercise prices thereof. All the outstanding shares of Parent's capital stock
are, and all shares which may be issued pursuant to the exercise of outstanding
options will be, when issued in accordance with the terms thereof, duly
authorized, validly issued, fully paid and non-assessable. There are no bonds,
debentures, notes or other indebtedness having general voting rights (or
convertible into securities having such rights) ("Parent Voting Debt") of Parent
or any of its Subsidiaries issued and outstanding. Except as disclosed in this
Section 4.2 or as set forth in Schedule 4.2(a)(ii) of the Parent Disclosure
Schedules, (i) there are no shares of capital stock of Parent authorized, issued
or outstanding, (ii) there are no existing options, warrants, calls, pre-emptive
rights, subscriptions or other rights, agreements, arrangements or commitments
of any character, relating to the issued or unissued capital stock of Parent or
any of its Subsidiaries, obligating Parent or any of its Subsidiaries to issue,
transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or Parent Voting Debt of, or other equity interest in, Parent or
any of its Subsidiaries or securities convertible into or exchangeable for such
shares or equity interests, or obligating Parent or any of its Subsidiaries to
grant, extend or enter into any such option, warrant, call, subscription or
other right, agreement, arrangement or commitment, and (iii) there are no
outstanding contractual obligations of Parent or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any Shares, or the capital stock of
Parent or any Subsidiary or affiliate of Parent or to provide funds to make any
investment (in the form of a loan, capital contribution or otherwise) in any
Subsidiary or any other entity.
(b) Except as set forth in Schedule 4.2(b) of the Parent Disclosure
Schedules, all of the outstanding shares of capital stock of each of the
Subsidiaries are beneficially owned by Parent, directly or indirectly, and all
such shares have been validly issued and are fully paid and nonassessable and
are owned by either Parent or one of its Subsidiaries free and clear of all
Encumbrances except for those directors' qualifying shares of capital stock of
such Subsidiaries not material in amount and subject to repurchase or
cancellation arrangements.
(c) There are no voting trusts or other agreements or understandings to
which Parent or any of its Subsidiaries is a party with respect to the voting of
the capital stock of Parent or any of the Subsidiaries.
(d) Other than as set forth on Schedule 4.2(d) of the Parent Disclosure
Schedules or the Parent Financial Statements (as hereinafter defined), there is
no outstanding Indebtedness of Parent or any of its Subsidiaries. Except as
identified in Schedule 4.2(d) of the Parent Disclosure Schedules, no
Indebtedness of Parent or its Subsidiaries contains any restriction upon (i) the
prepayment of such Indebtedness, (ii) the incurrence of Indebtedness (including
the Debt Financing) by Parent or its Subsidiaries, respectively, (iii) the
ability of Parent or its Subsidiaries to grant any liens on their properties or
assets or (iv) the ability of the Parent or its Subsidiaries to enter into this
Agreement or consummate the Merger.
(e) Except as set forth in Schedule 4.2(e) of the Parent Disclosure
Schedules, since January 1, 1995, Parent has not entered into any material
agreement involving the acquisition, sale
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or disposition of any class of capital stock or assets of Parent or any of its
Subsidiaries, by merger or otherwise; and except as disclosed on Schedule 4.2(e)
of the Parent Disclosure Schedules, to the best knowledge of Parent, none of
Parent or any of its Subsidiaries is in breach of, or subject to a claim of
default under, any such agreements listed on such Schedule.
Section 4.3 Authorization; Validity of Agreement; Necessary Corporate
Action.
Each of Parent and the Purchaser has full corporate power and corporate
authority to execute and deliver this Agreement and the Stockholders' Agreement
and to consummate the Transactions. The execution, delivery and performance by
Parent of this Agreement and the Stockholders' Agreement, and the consummation
by it of the Transactions, have been duly and validly authorized by their
respective Boards of Directors and no other corporate action on the part of
Parent is necessary to authorize the execution and delivery by Parent and the
Purchaser of this Agreement and the Stockholders' Agreement, and the
consummation by them of the Transactions contemplated hereby. Each of this
Agreement and the Stockholders' Agreement has been duly executed and delivered
by Parent and the Purchaser and, assuming due and valid authorization, execution
and delivery hereof and thereof by the Company, is a valid and binding
obligation of Parent and the Purchaser enforceable against Parent and the
Purchaser in accordance with its terms except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceedings therefor may be brought.
Section 4.4 Consents and Approvals; No Violations. Except as set forth
in Schedule 4.4 of the Parent Disclosure Schedules and for filings, permits,
authorizations, consents and approvals as are contemplated by this Agreement or
may be required under, and other applicable requirements of, the Exchange Act
and the HSR Act, none of the execution, delivery or performance of this
Agreement by Parent or the Purchaser, the consummation by Parent or the
Purchaser of the Transactions or compliance by Parent or the Purchaser with any
of the provisions hereof will (i) conflict with or result in any breach of any
provision of the Articles of Incorporation, the By-Laws or similar
organizational documents of Parent or any of its Subsidiaries, state securities
laws or blue sky laws, and the Texas Business Corporations Act or the NGCL, (ii)
require any filing with, or permit, authorization, consent or approval of, any
Governmental Entity, (iii) 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, amendment, cancellation or acceleration) under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to which
Parent or any of its Subsidiaries is a party or by which any of them or any of
their properties or assets may be bound (collectively, the "Parent Agreements")
or (iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent, any of its Subsidiaries or any of their properties or
assets, except in the case of clause (ii), (iii) or (iv) where failure to obtain
such permits, authorizations, consents or approvals or to make such filings, or
where such violations, breaches or defaults which would not, individually or in
the aggregate, have a Parent Material Adverse Effect. Schedule 4.4 of the Parent
Disclosure Schedules sets forth a list of all third party consents and approvals
required to be obtained in connection with this Agreement under the Parent
Agreements prior to the consummation of the transactions contemplated by this
Agreement.
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Section 4.5 SEC Reports and Financial Statements. Parent has filed with
the SEC, and has heretofore made available to the Company, true and complete
copies of all forms, reports, schedules, statements and other documents required
to be filed by it since January 1, 1996, under the Exchange Act or the
Securities Act (as such documents have been amended since the time of their
filing, collectively, the "Parent SEC Documents"). As of their respective dates,
or if amended, as of the date of the last such amendment, the Parent SEC
Documents, including, without limitation, any financial statements or schedules
included therein (a) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading and (b) complied in all material respects
with the applicable requirements of the Exchange Act and the Securities Act, as
the case may be, and the applicable rules and regulations of the SEC thereunder.
None of Parent's Subsidiaries is required to file any forms, reports or other
documents with the SEC. The financial statements included in the Parent SEC
Documents (the "Parent Financial Statements") (i) have been prepared from, and
are in accordance with, the books and records of Parent and its consolidated
Subsidiaries, (ii) comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, (iii) have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and (iv) fairly present in all material respects the consolidated
financial position and the consolidated results of operations and cash flows
(and changes in financial position, if any) of Parent and its consolidated
Subsidiaries as of the times and for the periods referred to therein.
Section 4.6 Absence of Certain Changes. Except as set forth in Schedule
4.6 of the Parent Disclosure Schedules or in the Parent SEC Documents filed
prior to the date hereof, since February 28, 1998, Parent and its Subsidiaries
have conducted their respective businesses only in the ordinary and usual
course. From February 28, 1998 through the date of this Agreement, there has not
occurred (i) any event, change or effect (including the incurrence of any
liabilities of any nature, whether or not accrued, contingent or otherwise)
having, individually or in the aggregate, a Parent Material Adverse Effect, (ii)
any declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to the equity interests of
Parent or any of its Subsidiaries or (iii) any change in accounting principles
or methods, except insofar as may be required by a change in GAAP.
Section 4.7 No Undisclosed Liabilities. Except (a) as disclosed in the
Parent Financial Statements and (b) for liabilities and obligations (i) incurred
in the ordinary course of business and consistent with past practice since
February 28, 1998 (ii) created pursuant to the terms of this Agreement or (iii)
as disclosed in Schedule 4.7 of the Parent Disclosure Schedules or (iv) as
disclosed in Schedule 4.8(a) of the Parent Disclosure Schedules, neither Parent
nor any of its Subsidiaries, to the best of its knowledge, has incurred any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, that have, or would be reasonably likely to have a Parent Material
Adverse Effect and would be required to be reflected or reserved against on a
consolidated balance sheet of Parent and its Subsidiaries (including the notes
thereto) prepared in accordance with GAAP as applied in preparing the
consolidated balance sheet of Parent and its Subsidiaries as of February 28,
1998. Schedule 4.7 of the Parent Disclosure Schedules sets forth the amount of
principal and unpaid interest outstanding under each instrument evidencing
Indebtedness of Parent and its Subsidiaries which will accelerate or become due
or result in a right of redemption or repurchase on the part of the holder of
such Indebtedness (with or without due notice or lapse of time) as a result of
this Agreement, the Merger or the other Transactions contemplated hereby or
thereby.
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Section 4.8 Claims. Except as set forth on Schedule 4.8(a) of the
Parent Disclosure Schedules or in the Parent SEC Documents, as of the date
hereof, there is no suit, written claim, written demand, action, proceeding,
including, without limitation, any arbitration proceeding or alternative dispute
resolution proceeding, or to the best knowledge of Parent, investigation pending
or, to the best knowledge of Parent, threatened against or affecting, Parent or
any of its Subsidiaries (collectively, "Parent Claims"), that would reasonably
be expected to have a Parent Material Adverse Effect. Except as set forth on
Schedule 4.8(b) of the Parent Disclosure Schedules or in the Parent SEC
Documents, there is no Parent Claim or Parent Claims that, either individually
or in the aggregate, if adversely determined, would have a Parent Material
Adverse Effect.
Section 4.9 Employee Benefit Plans; ERISA.
(a) Schedule 4.9(a) of the Parent Disclosure Schedules contains a true
and complete list of each employment, bonus, deferred compensation, incentive
compensation, stock purchase, stock option, stock appreciation right or other
stock-based incentive, severance, change-in-control, or termination pay,
hospitalization or other medical, disability, life or other insurance,
supplemental unemployment benefits, profit sharing, pension, or retirement plan,
program, agreement or arrangement and each other employee benefit plan, program,
agreement or arrangement, sponsored, maintained or contributed to or required to
be contributed to by Parent or any of its Subsidiaries, or by any trade or
business, whether or not incorporated (a "Parent ERISA Affiliate"), that
together with Parent or any of its Subsidiaries would be deemed a "single
employer" within the meaning of Section 4001(b)(1) of ERISA, for the benefit of
any current or former employee or director of Parent, or any of its Subsidiaries
or any Parent ERISA Affiliate (the "Parent Plans"). Schedule 4.9(a) of the
Parent Disclosure Schedules identifies each of the Parent Plans that is an
"employee welfare benefit plan," or "employee pension benefit plan" as such
terms are defined in Sections 3(1) and 3(2) of ERISA (such plans being
hereinafter referred to collectively as the "Parent ERISA Plans"). Except as
required by applicable law, none of Parent, any of its Subsidiaries nor any
Parent ERISA Affiliate has any formal plan or commitment, whether legally
binding or not, to create any additional Parent Plan or modify or change any
existing Parent Plan that would affect any current or former employee or
director of Parent, any of its Subsidiaries or any Parent ERISA Affiliate.
(b) With respect to each of the Parent Plans, Parent has heretofore
delivered to the Company true and complete copies of each of the following
documents, as applicable:
(i) a copy of the Parent Plan documents (including all
amendments thereto) for each written Parent Plan or a written
description of any Parent Plan that is not otherwise in writing;
(ii) a copy of the annual report or Internal Revenue Service
Form 5500 Series, if required under ERISA, with respect to each Parent
ERISA Plan for the last three (3) Parent Plan years ending prior to the
date of this Agreement for which such a report was required to be
filed;
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(iii) a copy of the actuarial report, if required under ERISA,
with respect to each Parent ERISA Plan for the last three (3) Plan
years ending prior to the date of this Agreement;
(iv) a copy of the most recent Parent Summary Plan Description
("Parent SPD"), together with all Summaries of Material Modification
issued with respect to such Parent SPD, if required under ERISA, with
respect to each Parent ERISA Plan, and all other material employee
communications relating to each Parent ERISA Plan;
(v) if the Parent Plan is funded through a trust or any other
funding vehicle, a copy of the trust or other funding agreement
(including all amendments thereto) and the latest financial statements
thereof, if any;
(vi) all contracts relating to the Parent Plans with respect
to which Parent, any of its Subsidiaries or any Parent ERISA Affiliate
may have any liability, including insurance contracts, investment
management agreements, subscription and participation agreements and
record keeping agreements; and
(vii) the most recent determination letter received from the
IRS with respect to each Parent Plan that is intended to be qualified
under Section 401(a) of the Code.
(c) No liability under Title IV of ERISA has been incurred by Parent,
any of its Subsidiaries or any Parent ERISA Affiliate since the effective date
of ERISA that has not been satisfied in full, and no condition exists that
presents a material risk to Parent, or any of its Subsidiaries or any ERISA
Affiliate of incurring any liability under such Title, other than liability for
premiums due PBGC, which payments have been or will be made when due. To the
extent this representation applies to Sections 4064, 4069 or 4204 of Title IV of
ERISA, it is made not only with respect to the Parent ERISA Plans but also with
respect to any employee benefit plan, program, agreement or arrangement subject
to Title IV of ERISA to which Parent, any of its Subsidiaries or any Parent
ERISA Affiliate made, or was required to make, contributions during the past six
(6) years.
(d) The PBGC has not instituted proceedings pursuant to Section 4042 of
ERISA to terminate any of the Parent ERISA Plans subject to Title IV of ERISA,
and no condition exists that presents a material risk that such proceedings will
be instituted by the PBGC.
(e) With respect to each Parent ERISA Plan that is subject to Title IV
of ERISA, the present value of accumulated benefit obligations under such Parent
ERISA Plan, as determined by the Parent ERISA Plan's actuary based upon the
actuarial assumptions used for funding purposes in the most recent actuarial
report prepared by such Plan's actuary with respect to such Parent ERISA Plan,
did not, as of its latest valuation date, exceed then current value of the
assets of such Plan allocable to such accumulated benefit obligations.
(f) None of Parent, any of its Subsidiaries, any Parent ERISA
Affiliate, any of the Parent ERISA Plans, any trust created thereunder, nor to
Parent's and the Purchaser's best knowledge, any trustee or administrator
thereof has engaged in a transaction or has taken or failed to take any action
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in connection with which Parent, any of its Subsidiaries or any Parent ERISA
Affiliate could be subject to any material liability for either a civil penalty
assessed pursuant to Section 409 or 502(i) of ERISA or a tax imposed pursuant to
Sections 4975(a) or (b), 4976 or 4980B of the Code.
(g) All contributions and premiums that Parent, any of its Subsidiaries
or any Parent ERISA Affiliate is required to pay under the terms of each of the
Parent ERISA Plans and Section 412 of the Code, have, to the extent due, been
paid in full or properly recorded on the financial statements or records of
Parent or its Subsidiaries, and none of the Parent ERISA Plans or any trust
established thereunder has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, as of the last day of the most recent fiscal year of each of the Parent
ERISA Plans ended prior to the date of this Agreement. No lien has been imposed
under Section 412 (n) of the Code or Section 302 (f) of ERISA on the assets of
Parent, any of its Subsidiaries or any Parent ERISA Affiliate, and no event or
circumstance has occurred that is reasonably likely to result in the imposition
of any such lien on any such assets on account of any Parent ERISA Plan.
(h) With respect to any Parent ERISA Plan that is a "multi-employer
plan," as such term is defined in Section 3 (37) of ERISA, (i) neither Parent,
any of its Subsidiaries nor any Parent ERISA Affiliate has, since September 26,
1980, made or suffered a "complete withdrawal" or a "partial withdrawal," as
such terms are respectively defined in Sections 4203 and 4205 of ERISA, (ii) no
event has occurred that presents a material risk of a complete or partial
withdrawal, (iii) none of Parent, any of its Subsidiaries or any Parent ERISA
Affiliate has any contingent liability under Section 4204 of ERISA, (iv) no
circumstances exist that present a material risk that any such multi-employer
plan will go into reorganization, and (v) the aggregate withdrawal liability of
Parent, each of its Subsidiaries and the Parent ERISA Affiliates, computed as if
a complete withdrawal by Parent, each of its Subsidiaries and all of its Parent
ERISA Affiliates had occurred under each such multi-employer plan on the date
hereof, would be zero.
(i) Each of the Parent Plans has been operated and administered in all
material respects in accordance with applicable laws, including but not limited
to ERISA and the Code.
(j) Each of the Parent ERISA Plans that is intended to be "qualified"
within the meaning of Section 401 (a) of the Code is so qualified. Parent has
applied for and received a currently effective determination letter from the IRS
stating that it is so qualified, and no event has occurred which would affect
such qualified status.
(k) Each of the Parent ERISA Plans that is intended to qualify under
Section 501(c)(9) of the Code is so qualified and meets the requirements of
Section 505(c) of the Code and the regulations thereunder.
(l) Except as set forth in Schedule 4.9(l) of the Parent Disclosure
Schedules, no amounts payable under any of the Parent Plans or any other
contract, agreement or arrangement with respect to which Parent or any of its
Subsidiaries may have any liability could fail to be deductible for federal
income tax purposes by virtue of Section 162(m) or Section 280G of the Code.
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(m) Except as set forth in Schedule 4.9(m) of the Parent Disclosure
Schedules, no Parent Plan provides death or medical benefits (whether or not
insured), with respect to current or former employees of Parent, its
Subsidiaries or any Parent ERISA Affiliate after retirement or other termination
of service (other than (i) coverage mandated by applicable laws, (ii) death
benefits or retirement benefits under any "employee pension plan," as that term
is defined in Section 3(2) of ERISA, (iii) deferred compensation benefits
accrued as liabilities on the books of Parent, any of its Subsidiaries or an
Parent ERISA Affiliate, or (iv) benefits, the full direct cost of which is borne
by the current or former employee (or beneficiary thereof)).
(n) Except as set forth in Schedule 4.9(n) of the Parent Disclosure
Schedules and as provided in Section 2.4 hereof, the consummation of the
transactions contemplated by this Agreement will not (i) entitle any current or
former employee, officer or director of Parent, any of its Subsidiaries or any
Parent ERISA Affiliate to severance pay, unemployment compensation or any other
similar termination payment, or (ii) accelerate the time of payment or vesting,
or increase the amount of or otherwise enhance any benefit due any such
employee, officer or director.
(o) There are no pending or, to the best knowledge of Parent,
threatened or anticipated claims by or on behalf of any Plan by any employee or
beneficiary under any such Parent Plan or otherwise involving any such Plan
(other than routine claims for benefits).
(p) Except as set forth in Schedule 3.9(p) of the Company Disclosure
Schedules, no Plan is currently under examination by, and there are no issues
related to the Plans currently pending before, the Internal Revenue Service,
Department of Labor, Pension Benefit Guaranty Corporation or any court.
(q) There are no material liabilities under any foreign laws with
respect to the Plans.
Section 4.10 Taxes.
(a) Except as set forth in Schedule 4.10 of the Parent Disclosure
Schedules:
(i) Parent and its Subsidiaries have (A) duly filed (or there
have been filed on their behalf) with the appropriate Tax Authorities
all Tax Returns required to be filed by them on or prior to the date
hereof (except where the failure to file a Tax Return would not have a
material adverse effect on the entity failing to file such Tax Return),
and such Tax Returns are true, correct and complete in all material
respects, and (B) duly paid in full or made provision in accordance
with GAAP (or there has been paid or provision has been made on their
behalf) for the payment of all Taxes for all periods (or portions
thereof) ending on or prior to the date hereof;
(ii) there are no liens for Taxes upon any property or assets
of Parent or any Subsidiary thereof, except for liens for Taxes not yet
due and for which adequate reserves have been established in accordance
with GAAP;
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(iii) within the past three (3) years, neither Parent nor any
of its Subsidiaries has made any change in tax reporting method,
received a ruling from any Tax Authority or signed an agreement with
regard to Taxes;
(iv) no federal, state, local or foreign Audits are pending
with regard to any Taxes or Tax Returns of Parent or its Subsidiaries
and, to the best knowledge of Parent and its Subsidiaries, no Audit is
threatened;
(v) the Tax Returns of Parent and its Subsidiaries have been
examined by the applicable Taxing Authorities (or the applicable
statutes of limitation for the assessment of Taxes for such periods
have expired) for all periods through and including February 28, 1995,
and no material adjustments were asserted as a result of such
examinations which have not been resolved and fully paid, and no issue
has been raised by any Tax Authority in any Audit of Parent or its
Subsidiaries that, if raised with respect to any other period not so
audited, could be expected to result in a proposed material deficiency
for any period not so audited;
(vi) there are no outstanding requests, agreements, consents
or waivers to extend the statutory period of limitations applicable to
the assessment of any Taxes or deficiencies against Parent or any of
its Subsidiaries, and no power of attorney granted by either Parent or
any of its Subsidiaries with respect to any Taxes is currently in
force;
(vii) neither Parent nor any of its Subsidiaries is a party to
any agreement providing for the allocation, indemnification, or sharing
of Taxes;
(viii) neither Parent nor any of its Subsidiaries is a party
to any agreement, contract or arrangement that could result, separately
or in the aggregate, in the payment of any "excess parachute payments"
within the meaning of Section 280G of the Code or in payments that will
not be deductible under Section 162(m) of the Code;
(ix) neither Parent nor any of its Subsidiaries has filed a
consent pursuant to Section 341(f) of the Code or made or filed an
election under Sections 108, 441 or 1017 of the Code;
(x) neither Parent nor any of its Subsidiaries is a party to
any safe harbor lease within the meaning of Section 168(f)(8) of the
Code, as in effect prior to amendment by the Tax Equity and Fiscal
Responsibility Act of 1982;
(xi) neither Parent nor any of its Subsidiaries is liable for
any material Taxes to any foreign Tax Authority. Parent and its
Subsidiaries do not have and have not had a permanent establishment in
any foreign country, as defined in the applicable Tax treaty or
convention between the United States and such foreign country;
(xii) neither Parent nor any of its Subsidiaries is required
to include in income any adjustment under Section 481(a) of the Code by
reason of a change in accounting method initiated by Parent or any of
its Subsidiaries and the Internal Revenue Service has not proposed any
such adjustment or change in accounting method;
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(xiii) neither Parent nor any of its Subsidiaries is a partner
in any joint venture, partnership or other arrangement or contract that
could be treated as a partnership for federal income tax purposes;
(xiv) other than as a result of the Transactions contemplated
herein, none of Parent's tax attributes are subject to the limitations
of Sections 382, 383 or 384 of the Code or Treasury Regulation Section
1.1502-21(c); and
(xv) since its formation, Parent has been a member of an
affiliated group of corporations within the meaning of Section 1504 of
the Code, with respect to which Parent is and at all times has been the
common parent, and has joined in or expects to join in the filing of a
consolidated federal income tax return for all its Tax periods ending
on or prior to the Effective Time. Neither Parent nor any of its
Subsidiaries has been a member of any other affiliated group of
corporations within the meaning of Section 1504 of the Code.
Section 4.11 Contracts.
For purposes of this Agreement, the Parent Agreements consist of the
following:
(a) all sales and distribution contracts of Parent or its
Subsidiaries with respect to which at least an aggregate of $500,000 in
revenues and/or orders were received or revenued thereunder since March
1, 1998, which sales and distribution contracts are identified (to the
best knowledge of Parent) on Schedule 4.11(a) of the Parent Disclosure
Schedules;
(b) all supply agreements material to the business of Parent
under which products were bought or licensed since March 1, 1998 for
resale or relicense, which supply agreements are identified (to the
best knowledge of Parent) in Schedule 4.11(b) to the Parent Disclosure
Schedules;
(c) all supply agreements for the purchase of goods, software
(other than commercially available or "shrink wrap" software) or other
products for Parent's or its Subsidiaries' internal use under which
orders aggregating at least $250,000 were placed thereunder since March
1, 1998, which internal supply agreements are identified in Schedule
4.11(c) of the Parent Disclosure Schedules;
(d) the form of confidentiality agreement that has customarily
been used between Parent and its employees, a copy of which is included
as Schedule 4.11(d) of the Parent Disclosure Schedules;
(e) the form of agreement generally used by Parent in engaging
independent contractors, a copy of which is included as Schedule
4.11(e) of the Parent Disclosure Schedules;
(f) the form of agreement pursuant to which Parent has
generally escrowed source code, a copy of which is included as Schedule
4.11(f) of the Parent Disclosure Schedules; and
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(g) all powers of attorney (irrespective of date of execution)
of a material nature (excluding usual and customary powers of attorney
for filing trademarks and patents, and usual and customary powers of
attorney for filing documents with governmental authorities and
otherwise complying with corporate formalities in foreign jurisdictions
executed by Parent or its Subsidiaries) in favor of one or more third
parties, which powers of attorney are identified (to the best knowledge
of Parent) in Schedule 4.11(g) of the Parent Disclosure Schedules.
To the best knowledge of Parent, each Parent Agreement is a valid and binding
agreement in full force and effect, except where the failure to be valid and
binding and in full force and effect would not have a Parent Material Adverse
Effect. To the best knowledge of Parent, there are no defaults, or events which,
with notice or the lapse of time, or both, would result in a default under any
of the Parent Agreements, except such defaults and events that would not, in the
aggregate, have a Parent Material Adverse Effect.
Section 4.12 Real Property and Leased Property.
(a) Schedule 4.12(a) of the Parent Disclosure Schedules sets forth a
complete list of all real property owned by Parent or its Subsidiaries (the
"Parent Real Property"). Except as set forth in Schedule 4.12(a) of the Parent
Disclosure Schedules, Parent or its Subsidiaries has good and marketable title
to the Parent Real Property, free and clear of all Encumbrances. Copies of (i)
all deeds, title insurance policies and surveys of the Parent Real Property and
(ii) all documents evidencing all Encumbrances upon the Parent Real Property
have been furnished to Parent. There are no proceedings, claims, disputes or
conditions affecting any Parent Real Property that might curtail or interfere
with the use of such property, nor is an action of condemnation or eminent
domain pending or to the best knowledge of Parent and the Purchaser, threatened
for all or any portion of the Parent Real Property. Except as disclosed in
Schedule 4.12(a) of the Parent Disclosure Schedules, neither Parent nor any of
its Subsidiaries is a party to any lease, assignment or similar arrangement
under which Parent or a Subsidiary is a lessor, assignor or otherwise makes
available for use by any third party any portion of the Real Property.
(b) Within the prior twelve (12) months of the date of this Agreement,
neither Parent nor any of its Subsidiaries has received any notice of or other
writing referring to any requirements or recommendations by any insurance
company that has issued a policy covering any part of the Parent Real Property
or by any board of fire underwriters or other body exercising similar functions,
requiring or recommending any repairs or work to be done on any part of the
Parent Real Property. The plumbing, electrical, heating, air conditioning,
ventilating and all other structural or material mechanical systems in the
buildings upon the Parent Real Property are in working order and working
condition, so as to be adequate for the operation of the business of Parent and
its Subsidiaries as heretofore conducted, and the roof, basement and foundation
walls of all buildings on the Parent Real Property are free of leaks and other
material defects, except for any matter otherwise covered by this sentence which
does not have, individually or in the aggregate, a Parent Material Adverse
Effect.
(c) Parent and its Subsidiaries have obtained all appropriate licenses,
permits, easements and rights of way, including proofs of dedication, required
to use and operate the Parent Real Property, as well as the properties listed on
Schedule 4.12(e) of the Parent Disclosure Schedules, in
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the manner in which the Parent Real Property is currently being used and
operated, except for such licenses, permits or rights of way the failure of
which to have obtained does not have, individually or in the aggregate, a Parent
Material Adverse Effect.
(d) Neither Parent nor any of its Subsidiaries have received
notification that Parent or a Subsidiary is in violation of any applicable
building, zoning, anti-pollution, health or other law, ordinance or regulation
in respect of the Real Property or structures or their operations thereon and,
to the best of Parent's knowledge, no such violation exists.
(e) Set forth on Schedule 4.12(e) of the Parent Disclosure Schedules is
a list of all real property leases to which Parent or any of its Subsidiaries is
a party and that extend for a more than one (1) year after the date of this
Agreement. Parent and each of its Subsidiaries has a good and valid leasehold
interest in all properties held by them under lease listed on Schedule 4.12(f)
of the Parent Disclosure Schedules. The lessee under each such lease and its
predecessor under each such lease, if any, has been in peaceable possession (or
remedied any claims relating thereto) of the property covered thereby since the
commencement of the original term of such lease. No waiver, indulgence or
postponement of the lessee's material obligations under any such lease has been
granted by the lessor or of the lessor's obligations thereunder by the lessee.
The lessee under each such lease is not in breach of or in default under such
lease, nor has any event occurred which (with or without the giving of notice or
the passage of time or both) would constitute a default by the lessee under such
lease or cause a Parent Material Adverse Effect, and the lessee has not received
any notice from, or given any notice to, the lessor indicating that the lessee
or the lessor is in breach of or in default under such lease that would cause a
Parent Material Adverse Effect. To the best knowledge of Parent and each of its
Subsidiaries, none of the lessors under such leases is in breach thereof or in
default thereunder.
Section 4.13 Intellectual Property.
(a) Schedule 4.13(a) of the Parent Disclosure Schedules is a true and
complete list of all (i) patents and patent applications, (ii) trademark
registrations and applications, (iii) service mark registrations and
applications, (iv) Parent Product Software (as hereinafter defined), (v)
copyright registrations and applications, (vi) material unregistered trademarks
and service marks, and (vii) Internet domain names used or held for use in
connection with the business of Parent or any of its Subsidiaries, together with
all material licensing, sub-licensing, distribution, consignment and similar
agreements relating to the foregoing (whether Parent or any of its Subsidiaries
is the licensee or licensor thereunder) other than distribution and licensing
agreements relating to Parent Product Software and Parent Computer Software (as
hereinafter defined) entered into in the ordinary course of business. Other than
as listed in Schedule 4.11(f) of the Parent Disclosure Schedules, and for
contracts covered by that provision, no agreement licensing the Parent
Intellectual Property (as hereinafter defined) to any licensee creates an option
for such licensee to purchase any of the Parent Intellectual Property owned by
Parent, its Subsidiaries or affiliates, or would in any other way require the
transfer of the Intellectual Property owned by Parent, its Subsidiaries or any
affiliate of Parent to such licensee. Parent or one of its Subsidiaries
currently is listed in the records of the appropriate United States, state or
foreign agency as the sole owner of record for each application and registration
listed in Schedule 4.13(a) of the Parent Disclosure Schedules.
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(b) The term "Parent Computer Software" shall mean, other than
off-the-shelf applications and Parent Product Software, the following as used in
the current business of Parent or any of its Subsidiaries and which are material
to the current business of Parent: (i) any and all computer programs and
applications consisting of sets of statements and instructions to be used
directly or indirectly in computer software or firmware whether in source code
or object code form, (ii) databases and compilations, including without
limitation any and all data and collections of data, whether machine readable or
otherwise, (iii) all currently used versions of the foregoing including, without
limitation, all screen displays and designs thereof, and all component modules
of source code or object code or natural language code therefor, and whether
recorded on papers, magnetic media or other electronic or non-electronic device,
(iv) all descriptions, flow-charts and other work product used to design, plan,
organize and develop any of the foregoing, (v) all documentation, including
without limitation all technical and user manuals and training materials,
relating to the foregoing, and all content contained on all World Wide Web sites
of Parent or any of its Subsidiaries.
(c) The term "Parent Product Software" shall mean the following as
currently used in as part of the products of Parent and any of its Subsidiaries:
(i) any and all computer programs and applications consisting of sets of
statements and instructions to be used directly or indirectly in computer
software or firmware whether in source code or object code form, included in or
with any products currently or heretofore sold, licensed or leased or offered
for sale, license or lease by Parent or any of its Subsidiaries (excluding
software developed specifically and solely for a customer or distributor of
Parent or any of its Subsidiaries and which is not offered to any other
customers or distributors of Parent or any of its Subsidiaries), (ii) databases
and compilations for or of any of the foregoing, including without limitation
any and all data and collections of data, whether machine readable or otherwise,
(iii) all versions of the foregoing including, without limitation, all screen
displays and designs thereof, and all component modules of source code or object
code or natural language code therefor, and whether recorded on papers, magnetic
media or other electronic or non-electronic device, (iv) all descriptions,
flow-charts and other work product used to design, plan, organize and develop
any of the foregoing, (v) all documentation, including without limitation all
technical and user manuals and training materials, relating to the foregoing,
and all content contained on all World Wide Web sites of Parent or any of its
Subsidiaries.
(d) Except as set forth on Schedule 4.13(d)(1) of the Parent Disclosure
Schedules, Parent and its Subsidiaries, to the best knowledge of Parent, own or
have the right to use all patents, patent applications, patent rights,
copyrights, trademarks, trademark rights, trade names, trade name rights, and
service marks, and all goodwill of the business associated therewith, trade
secrets, technology and know-how, Parent Computer Software other than
off-the-shelf applications, Parent Product Software, Internet domain names,
registrations for and applications for registration of trademarks, service marks
and copyrights, and other confidential or proprietary rights and information and
all technical and user manuals and documentation made or used in connection with
any of the foregoing, used anywhere in the world in connection with the
businesses of Parent or any of its Subsidiaries as currently conducted
(collectively, the "Parent Intellectual Property"), free and clear of all
Encumbrances of any nature. Except as set forth on Schedule 4.13(d)(2) of the
Parent Disclosure Schedules, Parent and its Subsidiaries own the Parent Product
Software or have a valid right or with respect to prior to agreements had a
valid right at the time of such agreement to grant the rights and licenses in
and to the Parent Product Software currently or heretofore set forth in the
agreements between Parent or any of its Subsidiaries and their respective
customers, licensors, lessees,
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distributors and other resellers. Schedule 4.13(d)(3) of the Parent Disclosure
Schedules sets forth a true and complete list of all Parent Product Software
which is not completely and solely owned by Parent and/or its Subsidiaries which
is material to the current business of Parent (collectively, the "Parent
Licensed Product Software"). The agreements described on Schedule 4.13(d)(3) of
the Parent Disclosure Schedules set forth all of the rights and licenses of
Parent and each of its Subsidiaries in and to the Parent Licensed Product
Software, and all restrictions and obligations (including, without limitation,
royalty and other payment obligations) associated with such rights and licenses,
and each such contract is in full force and effect and neither Parent nor any of
its Subsidiaries is in material breach of any of its obligations under any such
Agreement. Any Encumbrances set forth on Schedule 4.13(d) of the Parent
Disclosure Schedules do not materially detract from the value of the Parent
Intellectual Property subject thereto and do not materially impair the
operations of any of Parent and its Subsidiaries.
(e) All patent, trademark and copyright registrations and applications
for Parent Intellectual Property, whether registered or pending, are currently
used or planned to be used in and are material to the conduct of the businesses
of Parent and its Subsidiaries as currently conducted, are listed on Schedule
4.13(a) of the Parent Disclosure Schedules. To the best knowledge of Parent and
the Purchaser, such patents, trademarks and copyright registrations and
applications (i) are valid, subsisting, in proper form and enforceable, subject
to the rights of third parties, and have been duly maintained, including the
submission of all necessary filings and fees in accordance with the legal and
administrative requirements of the appropriate jurisdictions and (ii) have not
lapsed, expired or been abandoned, and no patent, trademark, copyright,
registration or application for any of the foregoing is the subject of any
opposition, interference, cancellation proceeding or other legal or governmental
proceeding before any governmental, registration or other authority in any
jurisdiction.
(f) To the best knowledge of Parent and the Purchaser, the conduct of
the businesses of, and/or the use of the Parent Intellectual Property by, Parent
and its Subsidiaries as currently conducted does not conflict with or infringe
in any way on any proprietary right of any third party. Other than as set forth
in Schedule 4.13(f) of the Parent Disclosure Schedules there is no claim, suit,
action, correspondence, proceeding or negotiation pending or, to the best
knowledge of Parent and the Purchaser, threatened against Parent or any of its
Subsidiaries (i) alleging any conflict or infringement with any third party's
proprietary rights, (ii) asserting Parent or any of its Subsidiaries should
consider licensing rights to a third party's patent or other proprietary rights
or (iii) challenging the ownership, use, validity or enforceability of the
Parent Intellectual Property. Each of Parent and its Subsidiaries owns or has
the valid right to use all of the material Parent Intellectual Property used by
it or held for use by it in connection with its business. To the best knowledge
of Parent and the Purchaser, there are no conflicts with or infringements of any
Parent Intellectual Property or products of Parent or its Subsidiaries by any
third party.
(g) Except as set forth on Schedule 4.13(g)(1) of the Parent Disclosure
Schedules, the Parent Computer Software and the Parent Product Software used by
Parent or any of its Subsidiaries in the conduct of their businesses was either:
(i) developed by employees of Parent or such Subsidiary of Parent within the
scope of their employment; (ii) developed on behalf of Parent or any of its
Subsidiaries by a third party, and all ownership rights therein and in any other
associated Parent Intellectual Property have been assigned or otherwise
transferred to or vested in Parent or such Subsidiary of Parent, as the case may
be, pursuant to written agreements ("Parent Work for Hire
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Agreements"); (iii) acquired from a third party pursuant to a Software
Acquisition Agreement which is in full force and effect and of which neither
Parent nor any of its Subsidiaries is in material breach, or (iv) licensed from
a third party pursuant to a written license or other contract which is in full
force and effect and of which neither Parent nor any of its Subsidiaries is in
material breach. Except as set forth on Schedule 4.13(g)(2) of the Parent
Disclosure Schedules, (x) no third party has had access to any of the source
code for any of the Parent Product Software described in clause (i) or (ii)
hereof and (y) no act has been done or omitted to be done by Parent or any of
its Subsidiaries to impair or dedicate to the public or entitle any Governmental
Entity to hold abandoned any of such Parent Computer Software or Parent Product
Software.
(h) To the best knowledge of Parent and the Purchaser, no consents,
filings, and authorizations by or with governmental authorities or third parties
are necessary with respect to the consummation of the Transactions contemplated
hereby as they may affect the Intellectual Property.
(i) Neither Parent nor any of its Subsidiaries has entered into any
material consent, forbearance to sue, settlement agreement or cross-licensing
arrangement with any person relating to the Parent Intellectual Property or the
intellectual property of any third party other than as may be contained in the
agreements listed in Schedule 4.13(i) of the Parent Disclosure Schedules, or
which is not material to the current business or products of Parent.
(j) To the best knowledge of Parent, except as set forth on Schedule
4.13(j) of the Parent Disclosure Schedules, Parent and its Subsidiaries are not,
nor will any of them be as a result of the execution and delivery of this
Agreement or the performance of Parent's obligations under this Agreement, in
breach of any material license, sub-license or other agreement relating to the
Parent Intellectual Property.
(k) No former or present employees, officers or directors of Parent or
any of its Subsidiaries hold any right, title or interest directly or
indirectly, in whole or in part, in or to any Parent Intellectual Property.
(l) No trade secret or confidential know-how or other confidential
information relating to Parent or its Subsidiaries has been disclosed or
authorized to be disclosed to any third party, other than pursuant to a
non-disclosure agreement that fully protects Parent's and its Subsidiaries'
interests in and to such confidential information, except to the extent that the
failure to comply with any of the foregoing could not have, individually or in
the aggregate, a Parent Material Adverse Effect.
(m) As delivered to customers and as modified by Parent, the Parent
Product Software and the Parent Other Products (as hereinafter defined) conform
to their respective applicable specifications in all material respects, except
to the extent that the failure to comply with any of the foregoing could not
have, individually or in the aggregate, a Parent Material Adverse Effect.
(n) To the best knowledge of Parent and the Purchaser, the conduct of
the businesses of Parent and its Subsidiaries, the use of the Parent
Intellectual Property and/or any advertising or marketing materials used by
Parent and its Subsidiaries in connection with the Parent Product Software or
Parent Other Products do not violate any provision of the Lanham Act, including
without limitation Section 43 thereof, and there are no material misstatements
or omissions in any such
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materials which would violate any provision of the Lanham Act, except to the
extent that the failure to comply with any of the foregoing could not have,
individually or in the aggregate, a Parent Material Adverse Effect.
Section 4.14 Year 2000 Compliance.
(a) As of the date hereof, all Date-Sensitive Data and Date-Sensitive
Systems that are material to the business of Parent owned or used by, licensed
or sold to Parent or any of its Subsidiaries other than those set forth in
Schedule 4.14(a) of the Parent Disclosure Schedules, have been or will be
evaluated for Year 2000 Compliance issues and are Year 2000 Compliant or will be
Year 2000 Compliant on or before January 1, 2000, except to the extent that the
failure to comply with any of the foregoing could not have, individually or in
the aggregate, a Parent Material Adverse Effect. Parent has requested
representations from each entity that (i) provides Date-Sensitive Data to Parent
or any of its Subsidiaries which is material to the business of Parent or (ii)
processes in any way Date-Sensitive Data or software (including the Parent
Computer Software or the Parent Product Software) for Parent or any of its
Subsidiaries. Parent has obtained or will use reasonable efforts to obtain
written representations from each entity that provides any material product or
service to Parent or any of its Subsidiaries that is dependent on Year 2000
Compliant Date-Sensitive Data or Year 2000 Compliant Date-Sensitive Systems,
that any of such entity's Date-Sensitive Data and/or Date-Sensitive Systems
that are used for, or on behalf of, Parent or any of its Subsidiaries are Year
2000 Compliant, except to the extent that the failure to comply with any of the
foregoing in this Section 4.14 could not have, individually or in the aggregate,
a Parent Material Adverse Effect.
(b) As of the date hereof, all Parent Product Software and all other
products sold, licensed or leased by Parent or any of its Subsidiaries which
are, or are used with, Date-Sensitive Systems or which process Date-Sensitive
Data ( the "Parent Other Products"), when used in accordance with their
associated specifications and other documentation, are Year 2000 Compliant
subject to the express terms and conditions of Parent's documentation attached
as Schedule 4.14(b) of the Parent Disclosure Schedules (the "Parent Year 2000
Representations"), except to the extent that the failure to comply with any of
the foregoing could not have, individually or in the aggregate, a Parent
Material Adverse Effect. To the best knowledge of Parent, (a) Parent and its
Subsidiaries have made reasonable efforts not to make written representations
concerning any Parent Product Software or other products of Parent or its
Subsidiaries, which are in addition to or inconsistent with the Parent Year 2000
Representations and (b) any such representations which are in addition to or
inconsistent with the Parent Year 2000 Representations, will not, individually
or in the aggregate, have a Parent Material Adverse Effect.
Section 4.15 Labor Matters. Except as set forth on Schedule 4.15(a) of
the Parent Disclosure Schedules, (i) there is no labor strike, dispute,
slowdown, stoppage or lock-out pending, or to the knowledge of Parent,
threatened against or affecting Parent and during the past two (2) years from
the date of this Agreement there has not been any such action, (ii) Parent is
not a party to or bound by any collective bargaining or similar agreement with
any labor organization, or work rules or practices agreed to with any labor
organization or employee association applicable to employees of Parent, (iii)
none of the employees of Parent is represented by any labor organization and
Parent does not have any knowledge of any union organizing activities among the
employees of Parent within the past two (2) years, nor does any question
concerning representation exist
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concerning such employees, (iv) there are no written personnel policies, rules
or procedures applicable to employees of Parent, other than those set forth on
Schedule 4.15(a) of the Parent Disclosure Schedules, true and correct copies of
which have heretofore been delivered to the Company, (v) to the best knowledge
of Parent and the Purchaser, Parent is, and has at all times been, in
compliance, in all material respects, with all applicable laws respecting
employment and employment practices, terms and conditions of employment, wages,
hours of work and occupational safety and health, and is not engaged in any
unfair labor practices as defined in the National Labor Relations Act or other
applicable laws that would cause a Parent Material Adverse Effect, (vi) there is
no unfair labor practice charge or written complaint against Parent pending or,
to the knowledge of Parent, threatened before the National Labor Relations Board
or any similar state, local or foreign agency, (vii) there is no grievance
arising out of any collective bargaining agreement or other grievance procedure,
(viii) no charges with respect to or relating to Parent are pending before the
Equal Employment Opportunity Commission or any other agency responsible for the
prevention of unlawful employment practices, (ix) Parent has not received notice
of the intent of any federal, state, local or foreign agency responsible for the
enforcement of labor or employment laws to conduct an investigation with respect
to or relating to Parent and no such investigation is in progress, and (x) there
are no complaints, lawsuits or other proceedings pending or, to the knowledge of
Parent, threatened in any forum by or on behalf of any present or former
employee of Parent, any applicant for employment or classes of the foregoing
alleging breach of any express or implied contract or employment, any laws
governing employment or the termination thereof or other discriminatory,
wrongful or tortious conduct in connection with the employment relationship.
Section 4.16 Compliance with Laws. To the best of its knowledge, Parent
and each of its Subsidiaries has complied in a timely manner and in all material
respects with all laws, rules and regulations, ordinances, judgments, decrees,
orders, writs and injunctions of all United States federal, state, local and
foreign governments and agencies thereof which affect the business, properties
or assets of Parent and its Subsidiaries, and no notice, charge, claim, action
or assertion has been received by Parent or any of its Subsidiaries or has been
filed, commenced or, to Parent's knowledge, threatened against Parent or any of
its Subsidiaries alleging any violation of any of the foregoing. All licenses,
permits and approvals required under such laws, rules and regulations are in
full force and effect except where the failure to be in full force and effect
would not have a Parent Material Adverse Effect.
Section 4.17 Environmental Matters.
(a) Except as set forth in Schedule 4.17(a) of the Parent Disclosure
Schedules, each of Parent and its Subsidiaries is in full compliance with all
Environmental Laws, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern, except where the failure so to comply would
not cause a Parent Material Adverse Effect. Such compliance includes, but is not
limited to, the possession by Parent and each of its Subsidiaries of all permits
and other governmental authorizations required under all applicable
Environmental Laws, and compliance with the terms and conditions thereof. All
permits and other governmental authorizations currently held by Parent and each
of its Subsidiaries pursuant to the Environmental Laws are identified in
Schedule 4.17(a) of the Parent Disclosure Schedules.
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(b) Except as set forth in Schedule 4.17(b) of the Parent Disclosure
Schedules, neither Parent nor any of its Subsidiaries has received any
communication (written or oral), whether from a governmental authority or
citizens group that alleges that Parent or any of its Subsidiaries is not in
full compliance with any Environmental Laws. Parent has provided to the Company
such information, if any, that is in the possession of or reasonably available
to Parent regarding environmental matters pertaining to or the environmental
condition of the business of Parent and its Subsidiaries, or the compliance (or
noncompliance) by Parent and its Subsidiaries with any Environmental Laws.
(c) Except as set forth in Schedule 4.17(c) of the Parent Disclosure
Schedules, there is no Environmental Claim by any person or entity alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, death, personal injuries, or penalties)
arising out of, based on or resulting from (a) the presence, or release into the
environment, of any Material of Environmental Concern at any location, whether
or not owned or operated by Parent or any of its Subsidiaries or (b)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law, that in either case is pending or threatened against Parent
or any of its Subsidiaries, or against any person or entity whose liability for
any Environmental Claim Parent has retained or assumed either contractually or
by operation of law.
(d) Without in any way limiting the generality of the foregoing, except
as set forth in Schedule 4.17(d) of the Parent Disclosure Schedules, to the best
knowledge of Parent and the Purchaser, there is no asbestos contained in or
forming part of any building, building component, structure or office space
owned, leased, operated or controlled by Parent or any of its Subsidiaries.
Section 4.18 Product Liability. Except as described in Schedule 4.18 of
the Parent Disclosure Schedules, there are not presently pending, or to the best
knowledge of Parent, threatened any criminal, material civil or administrative
actions, suits, demands, claims, hearings, notices of violation, investigations,
proceedings or demand letters relating to any alleged hazard or alleged defect
in design, manufacture, development, programming, materials or workmanship,
including any failure to warn or alleged breach of express or implied warranty
or representation, relating to any product manufactured, developed, programmed,
distributed, licensed or sold by or on behalf of Parent and its Subsidiaries.
Section 4.19 Information in Disclosure Documents. None of the
information supplied or to be supplied by Parent for the purpose of inclusion or
incorporation by reference in (i) the Schedule 14D-9 at the time such document
is first published, sent or given to the holders of Shares, and at any time it
is amended or supplemented, (ii) the Registration Statement to be filed with the
SEC by Parent in connection with the issuance of Parent Common Stock in the
Merger, at the time the Registration Statement is filed with the SEC or at the
time it becomes effective under the Securities Act or (iii) the Proxy Statement
at the date it is first mailed to the Company's stockholders or at the time of
the Special Meeting, 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, in light of the circumstances under which
they are made, no misleading. The Registration Statement will comply as to form
in all material respects with the requirements of the Securities Act and the
rules and regulations thereunder, except that no representations and warranties
are made by Parent with respect
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to statements made or incorporated by reference therein based on information
supplied by the Company for inclusion or incorporation by reference in the
Registration Statement or contained in the Company SEC Documents incorporated by
reference in the Registration Statement or the Proxy Statement.
Section 4.20 Potential Conflict of Interest. Except as set forth in
Schedule 4.20 of the Parent Disclosure Schedules or in the Parent SEC Documents
filed prior to the date hereof, since February 28, 1998 there have been no
transactions, agreements, arrangements or understandings between Parent or its
Subsidiaries, on the one hand, and their respective affiliates, on the other
hand, that would be required to be disclosed under Item 404 of Regulation S-K
under the Securities Act. Except as set forth in Schedule 4.20 of the Parent
Disclosure Schedules or in the Parent SEC Documents filed prior to the date
hereof, no officer of Parent or any of its Subsidiaries owns, directly or
indirectly, any interest in (excepting not more than 1% stock holdings for
investment purposes in securities of publicly held and traded companies) or is
an officer, director, employee or consultant of any person which is a
competitor, lessor, lessee, customer or supplier of Parent or any of its
Subsidiaries; and no officer or director of Parent or any of its Subsidiaries
(i) owns, directly or indirectly, in whole or in part, any Parent Intellectual
Property which Parent or any of its Subsidiaries is using or the use of which is
necessary for the business of Parent or its Subsidiaries; (ii) has any claim,
charge, action or cause of action against Parent or any of its Subsidiaries,
except for claims for accrued vacation pay, accrued benefits under the Plans and
similar matters and agreements existing on the date hereof; (iii) has made, on
behalf of Parent or any of its Subsidiaries, any payment or commitment to pay
any commission, fee or other amount to, or to purchase or obtain or otherwise
contract to purchase or obtain any goods or services from, any other Person of
which any officer or director of Parent or any of its Subsidiaries, or, to the
best knowledge of Parent and the Purchaser, a relative of any of the foregoing,
is a partner or stockholder (except stock holdings solely for investment
purposes in securities of publicly held and traded companies); or (iv) owes any
money to Parent or any of its Subsidiaries.
Section 4.21 Insurance. Parent and each of its Subsidiaries have
policies of insurance and bonds of the type and in amounts customarily carried
by persons conducting businesses or owning assets similar to those of Parent and
its Subsidiaries. There is no material claim pending under any of such policies
or bonds as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds. All premiums due and payable under all
such policies and bonds have been paid and Parent and its Subsidiaries are
otherwise in compliance in all material respects with the terms of such policies
and bonds. Parent has no knowledge of any threatened termination of, or material
premium increase with respect to, any of such policies.
Section 4.22 Suppliers and Customers. Since February 28, 1998, no
material licensor, vendor, supplier, licensee or customer of Parent or any of
its Subsidiaries has canceled or otherwise modified its relationship with Parent
or its Subsidiaries and, to the best knowledge of Parent and the Purchaser, (i)
no such person has any intention to do so, and (ii) the consummation of the
transactions contemplated hereby will not adversely affect any of such
relationships in any material respect, except to the extent that the failure to
comply with any of the foregoing could not have, individually or in the
aggregate, a Parent Material Adverse Effect.
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Section 4.23 Accounts Receivable; Inventory.
(a) Subject to any reserves set forth in the consolidated balance sheet
of Parent included in Parent's Quarterly Report on Form 10-Q for the quarter
ended November 30, 1998 as filed with the SEC (the "Parent Balance Sheet"), the
accounts receivable shown in the Parent Balance Sheet arose in the ordinary
course of business, were not, as of the date of the Parent Balance Sheet,
subject to any material discount, contingency, claim of offset or recoupment or
counterclaim, and represented, as of the date of the Parent Balance Sheet, bona
fide claims against debtors for sales, leases, licenses and other charges. All
accounts receivable of Parent and its Subsidiaries arising after the date of the
Parent Balance Sheet through the date of this Agreement arose in the ordinary
course of business and, as of the date of this Agreement, are not subject to any
material discount, contingency, claim of offset or recoupment or counterclaim,
except for normal reserves consistent with past practice. The amount carried for
doubtful accounts and allowances disclosed in the Parent Balance Sheet is
believed by Parent as of the date of such Parent Balance Sheet to be sufficient
to provide for any losses which may be sustained or failure to realize the
accounts receivable shown in the Parent Balance Sheet.
(b) As of the date of the Parent Balance Sheet, the inventories shown
on the Parent Balance Sheet consisted in all material respects of items of a
quantity and quality usable or saleable in the ordinary course of business. All
of such inventories were manufactured or acquired in the ordinary course of
business and, as of the date of this Agreement, have been replenished in all
material respects in the ordinary course of business consistent with past
practices. All such inventories are valued on the Parent Balance Sheet in
accordance with GAAP, applied on a basis consistent with Parent's past
practices, and provision has been made or reserves have been established on the
Parent Balance Sheet, in each case in an amount believed by Parent as of the
date of this Agreement to be adequate, for all slow-moving, obsolete or unusable
inventories.
Section 4.24 Title and Condition of Properties. Parent and its
Subsidiaries have good and marketable title, free and clear of all Encumbrances,
to all of the personal property and assets shown on the Parent Balance Sheet or
acquired after November 30, 1998, except for (A) assets which have been disposed
of to nonaffiliated third parties since November 30, 1998 in the ordinary course
of business, (B) Encumbrances reflected in the Parent Balance Sheet, (C)
Encumbrances or imperfections of title which are not, individually or in the
aggregate, material in character, amount or extent and which do not materially
detract from the value or materially interfere with the present or presently
contemplated use of the assets subject thereto or affected thereby, and (D)
liens for current Taxes not yet due and payable. All of the machinery, equipment
and other tangible personal property and assets owned or used by Parent or its
Subsidiaries are operational, except for ordinary wear and tear not caused by
neglect, and are usable in the ordinary course of business.
Section 4.25 Illegal Payments. To the best knowledge of Parent and the
Purchaser, none of Parent or any of its Subsidiaries or any director, officer,
employee, or agent of Parent or any of its Subsidiaries has, directly or
indirectly, paid or delivered any fee, commission, or other sum of money or item
of property however characterized to any broker, finder, agent, government
official, or other person, in the United States or any other country, in any
manner related to the business or operations of Parent or any of its
Subsidiaries, which Parent or any of its Subsidiaries or any such director,
officer, employee, or agent knows or has reason to believe to have been illegal
under any applicable law, including but not limited to the Foreign Corrupt
Practices Act.
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Section 4.26 Financing. In order to finance the Transactions, Parent
and the Purchaser have obtained a commitment letter dated April 26, 1999 (the
"Commitment Letter") from Bank of America National Trust and Savings Association
(the "Bank"), pursuant to which the Bank has committed, subject to the terms and
conditions thereof, to provide Purchaser financing in aggregate amount of $150
million (the "Debt Financing"), a true and correct copy of which has been
previously provided to the Company. Subject to the terms and conditions of the
Commitment Letter (including the conditions to funding) and this Agreement, the
Debt Financing is sufficient to consummate the Transactions. Assuming the
accuracy of the Company's representations and warranties contained in this
Agreement, Parent believes (based upon the facts known to Parent as of the date
of this Agreement) that each of the conditions to the completion of the Debt
Financing contained in the Commitment Letter will be satisfied on or prior to
the initial scheduled expiration date of the Offer.
Section 4.27 Shares Owned by Parent, Purchaser and Affiliates. Except
for 100,000 Shares held by David W. Brandenburg and except for any Shares that
could be deemed to be beneficially owned (as defined in Rule 13d-3 promulgated
under the Exchange Act) by Parent or the Purchaser under the Stockholders'
Agreement, to the best knowledge of Parent and the Purchaser, none of Parent,
the Purchaser nor any of their respective Affiliates beneficially owns any
Shares.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1 Acquisition Proposals. The Company will notify the
Purchaser within twenty-four (24) hours if any proposals are received by, any
information is requested from, or any negotiations or discussions are sought to
be initiated or continued with, the Company or its officers, directors,
employees, investment bankers, attorneys, accountants or other agents, in each
case in connection with any Acquisition Proposal (as defined below) or the
making of an Acquisition Proposal ("Acquisition Proposal Interest") indicating,
in connection with such notice, the terms and conditions of any Acquisition
Proposals or offers. The Company agrees that it, as of March 15, 1999, ceased
and caused to be terminated any activities, discussions or negotiations with any
parties conducted heretofore with respect to any Acquisition Proposal Interest.
The Company agrees that it shall keep Parent informed, on a current basis, of
the status and terms of any Acquisition Proposal Interest. As used in this
Agreement, "Acquisition Proposal" shall mean any tender or exchange offer
involving the Company, any proposal for a merger, consolidation or other
business combination involving the Company, any proposal or offer to acquire in
any manner a substantial equity interest in, or a substantial portion of the
business or assets of, the Company (other than immaterial or insubstantial
assets or inventory in the ordinary course of business or assets held for sale),
any proposal or offer with respect to any recapitalization or restructuring with
respect to the Company or any proposal or offer with respect to any other
transaction similar to any of the foregoing with respect to the Company other
than pursuant to the Transactions to be effected pursuant to this Agreement.
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Section 5.2 Interim Operations of the Company. The Company covenants
and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as
set forth in Schedule 5.2 of the Company Disclosure Schedules, or (iii) as
agreed in writing by Parent, after the date hereof, and prior to the time the
designees of Parent have been elected to, and shall constitute a majority of,
the Company's Board of Directors pursuant to Section 1.3 hereof (the
"Appointment Date"):
(a) the business of the Company and its Subsidiaries shall be conducted
only in the ordinary and usual course and, to the extent consistent therewith,
each of the Company and its Subsidiaries shall use its best efforts to preserve
its business organization intact and maintain its existing relations with
customers, suppliers, employees, creditors, business partners and others having
business dealings with it, such that its good will and ongoing business shall be
unimpaired at the Effective Time of the Merger;
(b) The Company will not, directly or indirectly, (i) except upon
exercise of the options or other rights to purchase shares of Common Stock
pursuant to presently outstanding stock options under the plans described in
Section 2.4 hereof, issue, sell, transfer or pledge or agree to sell, issue,
transfer or pledge any treasury stock of the Company or any capital stock of any
of its Subsidiaries beneficially owned by it, (ii) amend its Articles of
Incorporation or By-Laws or similar organizational documents; or (iii) split,
combine or reclassify the outstanding Shares or any outstanding capital stock of
any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare,
set aside or pay any dividend or other distribution payable in cash, stock or
property with respect to its capital stock; (ii) issue, sell, pledge, dispose of
or encumber any additional shares of, or securities convertible into or
exchangeable for, or options (including any automatic grants of options under
the Company Stock Plans), warrants, calls, commitments or rights of any kind to
acquire, any shares of capital stock of any class of the Company or its
Subsidiaries, other than (A) Shares reserved for issuance on the date hereof
pursuant to the exercise of options outstanding on the date hereof under the
plans described in Section 2.4 hereof and (B) Shares issued under the ESPP if
the Offer extends beyond June 30, 1999; (iii) transfer, lease, license, sell,
mortgage, pledge, dispose of, or encumber any assets, other than in the ordinary
and usual course of business and consistent with past practice, or incur or
modify any indebtedness or other liability, other than in the ordinary and usual
course of business and consistent with past practice; or (iv) redeem, purchase
or otherwise acquire, directly or indirectly, any shares of any class or series
of its capital stock, or any instrument or security which consists of or
includes a right to acquire such shares (other than the cancellation of options
outstanding on the date hereof pursuant to Section 2.4 hereof);
(d) neither the Company nor any of its Subsidiaries shall make any
change in the compensation payable or to become payable to any of its officers,
directors, employees, agents or consultants (other than general increases in
wages to employees who are not officers or directors or affiliates in the
ordinary course consistent with past practice), or to Persons (as hereinafter
defined) providing management services, enter into or amend any employment,
severance, consulting, termination or other agreement or plan or make any loans
to any of its officers, directors, employees, affiliates, agents or consultants
or make any change in its existing borrowing or lending arrangements for or on
behalf of any of such Persons pursuant to any Plan or otherwise;
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(e) neither the Company nor any of its Subsidiaries shall pay or make
any accrual or arrangement for payment of any pension, retirement allowance or
other employee benefit pursuant to any existing Plan, agreement or arrangement
to any officer, director, employee or affiliate or pay or agree to pay or make
any accrual or arrangement for payment to any officers, directors, employees or
affiliates of the Company of any amount relating to unused vacation days, except
payments and accruals made in the ordinary course consistent with past practice;
adopt or pay, grant, issue, accelerate or accrue salary or other payments or
benefits pursuant to any pension, profit-sharing, bonus, extra compensation,
incentive, deferred compensation, stock purchase, stock option, stock
appreciation right, group insurance, severance pay, retirement or other Plan,
agreement or arrangement, or any employment or consulting agreement with or for
the benefit of any director, officer, employee, agent or consultant, whether
past or present; or amend in any material respect any such existing Plan,
agreement or arrangement in a manner inconsistent with the foregoing, except
that the Company and its Subsidiaries may continue to make quarterly bonus
payments to certain key employees consistent with past business practice in an
aggregate amount not to exceed $1.8 million;
(f) the Company shall not modify, amend or terminate any of the Company
Agreements, and neither the Company nor any of its Subsidiaries shall waive,
release or assign any material rights or claims under any of the Company
Agreements, except in the ordinary course of business and consistent with past
practice;
(g) neither the Company nor any of its Subsidiaries will cause any
insurance policy naming it as a beneficiary or a loss payable payee to be
canceled or terminated without notice to Parent;
(h) neither the Company nor any of its Subsidiaries will (i) incur or
assume any long-term debt, or except in the ordinary course of business and in
an amount consistent with past practice, incur or assume any short-term
indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other Person, except in the ordinary course of business and consistent with
past practice; (iii) make any loans, advances or capital contributions to, or
investments in, any other Person; or (iv) enter into any material commitment or
transaction (including, but not limited to, any borrowing, capital expenditure
or purchase, sale or lease of assets or real estate), any agreement to develop
customized software products out of the ordinary course of business;
(i) neither the Company nor any of its Subsidiaries will change any of
the accounting methods used by it unless required by GAAP, make any Tax election
or change any Tax election already made or settle any Tax Audit, other than in
the ordinary course of business;
(j) neither the Company nor any of its Subsidiaries will pay, discharge
or satisfy any claims, liabilities or obligations (absolute, accrued, asserted
or unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction of any such claims, liabilities or obligations, in the ordinary
course of business and consistent with past practice, of claims, liabilities or
obligations reflected or reserved against in, or contemplated by, the
consolidated financial statements (or the notes thereto) of the Company;
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(k) neither the Company nor any of its Subsidiaries will adopt a plan
of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any of
its Subsidiaries (other than the Merger);
(l) neither the Company nor any of its Subsidiaries will take, or agree
to commit to take, any action that would or is reasonably likely to result in
any of the conditions to the Merger set forth in Article VII or any of the
conditions to the Offer set forth in Annex I not being satisfied, or would make
any representation or warranty of the Company contained herein inaccurate in any
respect at, or as of any time prior to, the Effective Time, or that would
materially impair the ability of the Company to consummate the Merger in
accordance with the terms hereof or materially delay such consummation; and
(m) neither the Company nor any of its Subsidiaries will enter into an
agreement, contract, commitment or arrangement to do any of the foregoing, or
authorize, recommend, propose or announce an intention to do any of the
foregoing.
Section 5.3 No Solicitation and Fiduciary Out.
(a) Except as provided in Section 5.3(b) hereof, the Company will not,
and will ensure that its officers, directors, employees, investment bankers,
attorneys, accountants and other agents do not, directly or indirectly: (i)
initiate, solicit or encourage, or take any action to facilitate the making of,
any offer or proposal which constitutes or is reasonably likely to lead to any
Acquisition Proposal, (ii) enter into any agreement with respect to any
Acquisition Proposal, or (iii) in the event of an unsolicited Acquisition
Proposal for the Company, engage in negotiations or discussions with, or provide
any information or data to, any Person (other than Parent, any of its affiliates
or representatives) relating to any Acquisition Proposal; provided, however,
that nothing contained in this Section 5.3 or any other provision hereof shall
prohibit the Company or the Company's Board of Directors from (i) taking and
disclosing to the Company's stockholders, its position with respect to a tender
or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2 promulgated
under the Exchange Act or (ii) making such disclosure to the Company's
stockholders as is reasonably deemed necessary, in the good faith judgment of
the Company's Board of Directors after receipt of advice from outside legal
counsel to the Company that such disclosure is required under applicable law and
that the failure to make such disclosure would cause the Company's Board of
Directors to violate its fiduciary duties to the Company's stockholders under
applicable law.
(b) Notwithstanding the foregoing, prior to the acceptance of Shares
pursuant to the Offer, the Company may furnish information concerning its
business, properties or assets to any Person pursuant to a confidentiality
agreement with terms no less favorable to the Company than those contained in
the Confidentiality Agreement, dated March 12, 1999 entered into between Parent
and the Company (the "Confidentiality Agreement") and may negotiate and
participate in discussions and negotiations with such Person concerning an
Acquisition Proposal if (x) such entity or group has on an unsolicited basis
submitted a bona fide written proposal to the Company relating to any such
transaction which the Company's Board of Directors determines in good faith,
after receiving advice from a nationally recognized investment banking firm,
represents a superior transaction to the Offer and the Merger and (y) the
Company's Board of Directors determines in good faith, only after receipt of
written advice from outside legal counsel to the Company, that the failure to
provide such
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information or access or to engage in such discussions or negotiations would
cause the Company's Board of Directors to violate its fiduciary duties to the
Company's stockholders under applicable law (an Acquisition Proposal which
satisfies clauses (x) and (y) being referred to herein as a "Superior
Proposal"). The Company shall promptly, and in any event within one (1) business
day following receipt of a Superior Proposal, notify Parent of the receipt of
the same and prior to providing any such party with any material non-public
information. The Company shall promptly provide to Parent any material
non-public information regarding the Company provided to any other party which
was not previously provided to Parent.
(c) Except as set forth herein, neither the Company's Board of
Directors nor any committee thereof shall (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Parent or the Purchaser, the approval
or recommendation by such Board of Directors or any such committee of the Offer,
this Agreement or the Merger, (ii) approve or recommend or propose to approve or
recommend, any Acquisition Proposal or (iii) enter into any agreement with
respect to any Acquisition Proposal. Notwithstanding the foregoing, prior to the
time of acceptance for payment of Shares in the Offer, the Company's Board of
Directors may (subject to the terms of this sentence and the following sentence)
enter into an acquisition agreement with respect to a Superior Proposal, in
which event the Company may take any of the actions set forth in clauses (i)
through (iii) of the immediately preceding sentence; provided, however, that the
Company shall not enter into an acquisition agreement with respect to a Superior
Proposal unless the Company shall have furnished Parent with written notice not
later than the first to occur of (i) 12:00 noon three (3) business days in
advance of any date that it intends to enter into such acquisition agreement or
(ii) two (2) business days prior to the expiration of the Offer; and shall have
caused its financial and legal advisors to negotiate with Parent to make such
adjustments in the terms and conditions of this Agreement as would enable the
Company to proceed with the Transactions contemplated herein on such adjusted
terms.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Additional Agreements. Subject to the terms and conditions
as herein provided, the Company, Parent and the Purchaser will each comply in
all material respects with all applicable laws and with all applicable rules and
regulations of any governmental authority to achieve the satisfaction of the
Minimum Condition and all conditions set forth in Annex I attached hereto and
Article VII hereof, and to consummate and make effective the Merger and the
other Transactions contemplated hereby.
Section 6.2 Notification of Certain Matters. The Company shall give
prompt notice to Parent and the Purchaser, and Parent and the Purchaser shall
give prompt notice to the Company, of (i) the occurrence, or non-occurrence of
any event whose occurrence, or non-occurrence causes
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either (x) any representation or warranty contained in this Agreement to be
untrue or inaccurate in any material respect at any time from the date hereof to
the Effective Time that would have a Company Material Adverse Effect or (y) any
condition set forth in Annex I to be unsatisfied in any material respect at any
time from the date hereof to the date the Purchaser purchases Shares pursuant to
the Offer and (ii) any failure of the Company, the Purchaser or Parent, as the
case may be, or any officer, director, employee or agent thereof, to comply with
or satisfy, in any material respect, any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 6.2 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
Section 6.3 Access; Confidentiality.
(a) From the date hereof to the Effective Time, upon reasonable notice,
the Company shall (and shall cause each of its Subsidiaries to) afford to the
officers, employees, accountants, counsel, financing sources (and their counsel
or representatives) and other representatives of Parent, full access, during
normal business hours during the period prior to the Appointment Date, to all
its properties, books, contracts, commitments and records and, during such
period, the Company shall (and shall cause each of its Subsidiaries to) furnish
promptly to the Parent (and such other persons) (a) a copy of each report,
schedule, registration statement and other document filed or received by it
during such period pursuant to the requirements of federal securities laws and
(b) all other information concerning its business, properties and personnel as
Parent may reasonably request. Access shall include the right to conduct such
studies, demonstrations and tests of the Company's Product Software and Other
Products as Parent, in its reasonable discretion, shall deem appropriate. After
the Appointment Date, the Company shall provide Parent and such persons as
Parent shall designate with all such information, at such time as Parent shall
request. Unless otherwise required by law and until the Appointment Date, Parent
and the Purchaser will hold any such information which is non-public in
confidence in accordance with, and will otherwise abide by, the provisions of
the Confidentiality Agreement. No investigation pursuant to this Section 6.3(a)
shall affect any representation or warranty made by the Company hereunder.
(b) Prior to the Closing, the Company and its accountants, counsel,
agents and other representatives shall cooperate with Parent and the Purchaser
(and such other persons) by providing information about the Company which is
necessary for Parent and the Purchaser and its accountants, agents, counsel and
other representatives to prepare the Disclosure Documents and to satisfy other
reasonable requests with respect to such documents. Notwithstanding the
penultimate sentence of Section 6.3(a) above, Parent and the Purchaser may
disclose, or cause their representatives to disclose, and at the request of
Parent or the Purchaser, the Company shall and shall cause its Subsidiaries to
disclose information concerning the Company and its Subsidiaries, and their
respective businesses, assets and properties, and the Transactions contemplated
by this Agreement in the Disclosure Documents and to prospective financing
sources in connection with the Transactions contemplated hereby.
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Section 6.4 Consents and Approvals.
(a) Each of Parent, the Purchaser and the Company will take all
reasonable actions necessary to comply promptly with all legal requirements
which may be imposed on it with respect to this Agreement and the Transactions
(which actions shall include, without limitation, furnishing all information
required under the HSR Act and in connection with approvals of or filings with
any other Governmental Entity) and will promptly cooperate with and furnish
information to each other in connection with any such requirements imposed upon
any of them or any of their Subsidiaries in connection with this Agreement and
the Transactions. Each of the Company, Parent and the Purchaser will, and will
cause each of its respective Subsidiaries to, take all reasonable actions
necessary to obtain (and will cooperate with each other in obtaining) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity or other public or private third party required to be
obtained or made by Parent, the Purchaser, the Company or any of their
respective Subsidiaries in connection with the Transactions or the taking of any
action contemplated thereby or by this Agreement.
(b) The Company and Parent shall take all reasonable actions necessary
to file on the date this Agreement is executed notifications under the HSR Act
and to respond as promptly as practicable to any inquiries received from the
Federal Trade Commission and the Antitrust Division of the Department of Justice
for additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other Governmental Entity in connection with antitrust matters.
(c) All costs and expenses of obtaining or effecting any and all of the
consents, approvals, orders, authorizations, waivers, declarations, filings and
registrations referred to in this Section 6.4 shall be borne by the party
incurring the same, except that Parent hereby agrees to pay any applicable
filing fee (and limited strictly to such filing fee) related to notification
under the HSR Act.
Section 6.5 Brokers or Finders. The Company represents, as to itself
and its Subsidiaries and affiliates, that no agent, broker, investment banker,
financial advisor or other firm or person is or will be entitled to any broker's
or finder's fee or any other commission or similar fee from the Company or any
of its Subsidiaries in connection with any of the transactions contemplated by
this Agreement except for U.S. Bancorp Piper Jaffray, Inc. whose fees are set
forth in a true, correct and complete copy of the engagement letter attached as
Schedule 6.5 of the Company Disclosure Schedules. Parent represents, as to
itself and its Subsidiaries and affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
broker's or finder's fee from Parent or any of its Subsidiaries in connection
with any of the transactions contemplated by this Agreement except for
NationsBank Montgomery Securities whose fees are set forth in a true, correct
and complete copy of the engagement letter attached as Schedule 6.5 of the
Parent Disclosure Schedules. Except as set forth on Schedule 6.5 of the Company
Disclosure Schedules, the Company shall indemnify and hold harmless Parent and
the Purchaser from and against any and all losses, claims, damages, and
liabilities (including legal and other expenses reasonably incurred in
connection with investigating or defending any claims or actions) with respect
to any finder's fee or any other commission or similar fee, brokerage
commission, or similar payment in connection with any transaction contemplated
hereby asserted by any Person on the basis of any act or statement made or
alleged to have been made by the Company or any of its affiliates. Except as
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set forth on Schedule 6.5 of the Parent Disclosure Schedules, Parent and the
Purchaser shall indemnify and hold harmless the Company from and against any and
all losses, claims, damages, and liabilities (including legal and other expenses
reasonably incurred in connection with investigating or defending any claims or
actions) with respect to any finder's fee or any other commission or similar
fee, brokerage commission, or similar payment in connection with any transaction
contemplated hereby asserted by any Person on the basis of any act or statement
made or alleged to have been made by Parent or any of its affiliates.
Section 6.6 Publicity. The initial press release with respect to the
execution of this Agreement shall be a joint press release acceptable to Parent
and the Company. Thereafter, so long as this Agreement is in effect, neither the
Company, Parent nor any of their respective affiliates shall issue or cause the
publication of any press release or other announcement with respect to the
Merger, this Agreement or the other Transactions without the prior consultation
of the other party, except as such party believes, after receiving the advice of
outside counsel, may be required by law or by any listing agreement with a
national securities exchange or trading market. Information included in
Disclosure Documents shall not be deemed to constitute public disclosure for
purposes of this Section 6.6.
Section 6.7 Directors' and Officers' Insurance and
Indemnification.
(a) For five (5) years after the Effective Time, Parent and the
Surviving Corporation (or any successor to the Surviving Corporation) shall
indemnify, defend and hold harmless the present and former officers and
directors of the Company and its Subsidiaries, and persons who become any of the
foregoing prior to the Effective Time (each an "Indemnified Party") against all
losses, claims, damages, liabilities, costs, fees and expenses (including
reasonable fees and disbursements of counsel and judgments, fines, losses,
claims, liabilities and amounts paid in settlement (provided that any such
settlement is effected with the written consent of the Parent or the Surviving
Corporation, which consent shall not unreasonably be withheld)) arising out of
actions or omissions occurring at or prior to the Effective Time to the full
extent permissible under the KGCC, the terms of the Company's Articles of
Incorporation or By-Laws, as in effect at the date hereof; provided, that in the
event any claim or claims are asserted or made within such five (5) year period,
all rights to indemnification in respect of any such claim or claims shall
continue until disposition of any and all such claims.
(b) Parent or the Surviving Corporation shall maintain the Company's
existing officers' and directors' liability insurance ("D&O Insurance") for a
period of not less than five (5) years after the Effective Time; provided, that
Parent may substitute therefor policies of substantially equivalent coverage and
amounts containing terms no less favorable to such former directors or officers;
provided, further, if the existing D&O Insurance expires, is terminated or
canceled during such period, Parent or the Surviving Corporation will use all
reasonable efforts to obtain substantially similar D&O Insurance; provided,
further, however, that in no event shall Parent be required to pay aggregate
premiums for insurance under this Section 6.7(b) in excess of $250,000;
provided, further, that if the Parent or the Surviving Corporation is unable to
obtain the amount of insurance required by this Section 6.7(b) for such
aggregate premium, Parent or the Surviving Corporation shall obtain as much
insurance as can be obtained for $250,000.
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Section 6.8 Purchaser Compliance. Parent shall cause the Purchaser to
comply with all of its obligations under or related to this Agreement.
Section 6.9 Nasdaq National Market Listing and De-Listing. Parent shall
use its best efforts to cause the shares of Parent Common Stock to be issued in
the Merger to be approved for listing on the Nasdaq National Market subject to
official notice of issuance, prior to the Closing Date. Parent shall use its
best efforts to the extent feasible to cause the Shares to continue to be listed
on the Nasdaq National Market and registered under the Exchange Act until the
Effective Time. Parent shall use its best efforts to cause the Shares to be
de-listed from the Nasdaq National Market and de-registered under the Exchange
Act as soon as possible following the Effective Time.
Section 6.10 Agreement of Affiliates. The Company shall deliver to
Parent, prior to the date the Registration Statement becomes effective under the
Securities Act, a letter (the "Affiliate Letter") identifying all persons who
are, or may be deemed to be, "affiliates" of the Company for purposes of Rule
145 under the Securities Act. The Company shall use its reasonable best efforts
to cause each such person who is identified as an "affiliate" in the Affiliate
Letter to deliver to Parent, prior to the Effective Time, a written agreement
(the "Affiliate Agreement") in substantially the form attached hereto as Exhibit
B.
Section 6.11 Reasonable Best Efforts.
(a) Prior to the Closing, upon the terms and subject to the conditions
of this Agreement, the Purchaser and the Company agree to use their respective
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable under any
applicable laws to consummate and make effective the transactions contemplated
by this Agreement as promptly as practicable including, but not limited to (i)
the preparation and filing of all forms, registrations and notices required to
be filed to consummate the transactions contemplated by this Agreement and the
taking of such actions as are necessary to obtain any requisite approvals,
consents, orders, exemptions or waivers by any third party or Governmental
Entity, (ii) the preparation of any Offering Documents, the Registration
Statement or Disclosure Documents requested by the Purchaser, (iii) the
obtainment by Parent of the Debt Financing and (iv) the satisfaction of the
other parties' conditions to Closing. In addition, no party hereto shall take
any action after the date hereof that would reasonably be expected to materially
delay the obtaining of, or result in not obtaining, any permission, approval or
consent from any Governmental Entity necessary to be obtained prior to Closing.
(b) Prior to the Closing, each party shall promptly consult with the
other parties hereto with respect to, provide any necessary information with
respect to and provide the other (or its counsel) copies of, all filings made by
such party with any Governmental Entity or any other information supplied by
such party to a Governmental Entity in connection with this Agreement and the
transactions contemplated by this Agreement. Each party hereto shall promptly
inform the other parties of any communication from any Governmental Entity
regarding any of the transactions contemplated by this Agreement. If any party
hereto or affiliate thereof receives a request for additional information or
documentary material from any such Government Entity with respect to the
transactions contemplated by this Agreement, then such party will endeavor in
good faith to make, or cause to be made, as soon as reasonably practicable and
after consultation with the other party,
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an appropriate response in compliance with such request. To the extent that
transfers of permits or environmental permits are required as a result of
execution of this Agreement or consummation of the transactions contemplated
hereby, the Company shall use its best efforts to effect such transfers.
(c) Notwithstanding the foregoing, nothing in this Agreement shall be
deemed to require the Purchaser to defend against any litigation brought by any
Governmental Entity seeking to prevent the consummation of the transactions
contemplated hereby.
Section 6.12 No Repurchase of Parent Common Stock. Prior to the Merger,
Parent will not repurchase any shares of Parent Common Stock.
Section 6.13 Company Stock Plan Amendments. Prior to or
contemporaneously with the closing of the Offer, the Company will amend (i) its
401(k) plan so as to insure that neither Parent nor its Subsidiaries (other than
the Company) will become participating employees in such plan and (ii) the
Directors Plan to preclude any further grants of options thereunder.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger shall be subject to
the satisfaction on or prior to the Closing Date of each of the following
conditions, any and all of which may be waived in whole or in part by Parent,
the Purchaser, or the Company, as the case may be, to the extent permitted by
applicable law:
(a) Stockholder Approval. The Merger and this Agreement shall have been
approved and adopted by the requisite vote of the holders of the Shares, as
required by the KGCC and the NGCL;
(b) Statutes, Court Orders. No statute, rule or regulation shall have
been enacted or promulgated by any Governmental Entity which prohibits the
consummation of the Merger; and there shall be no order or injunction of a court
of competent jurisdiction in effect precluding consummation of the Merger;
(c) Purchase of Shares in Offer. The Purchaser shall have made, or
caused to be made, the Offer and shall have purchased, or caused to be
purchased, 9,158,155 Shares pursuant to the Offer; provided, that this condition
shall be deemed to have been satisfied with respect to the obligation of Parent
and the Purchaser to effect the Merger if the Purchaser fails to accept for
payment or pay for Shares pursuant to the Offer in violation of the terms of the
Offer or of this Agreement;
(d) Effectiveness of Registration Statement. The Registration Statement
shall have been declared effective by the SEC under the Securities Act. No stop
order suspending the effectiveness of the Registration Statement shall have been
issued by the SEC and no proceedings for that purpose and no similar proceeding
in respect of the Proxy Statement shall have been initiated or threatened by the
SEC; and
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(e) HSR Approval. The applicable waiting period under the HSR Act shall
have expired or early termination shall have been granted with respect to the
Offer.
Section 7.2 Conditions to Obligations by Parent and the Purchaser to
Effect the Merger. The obligations of Parent and the Purchaser to consummate the
Merger are further subject to fulfillment of the condition that all actions
contemplated by Section 2.5 hereof shall have been taken, which condition may be
waived by Parent and the Purchaser.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated and the
transactions contemplated herein may be abandoned at any time before the
Effective Time, whether before or after stockholder approval of the Merger:
(a) By mutual written consent of Parent and the Company; or
(b) By Parent if the Offer shall have expired or been terminated
without any Shares being purchased thereunder by the Purchaser as a result of
the occurrence of any of the events set forth in Annex I; or
(c) By either Parent or the Company if a court of competent
jurisdiction or governmental, regulatory or administrative agency or commission
shall have issued an order, decree or ruling or taken any other action (which
order, decree or ruling the parties hereto shall use their best efforts to
lift), in each case permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement; or
(d) By Parent if, without any material breach by the Purchaser of its
obligations under this Agreement, the purchase of Shares pursuant to the Offer
shall not have occurred on or before three (3) months from date of this
Agreement; or
(e) By the Company if, without any material breach by the Company of
its obligations under this Agreement, the purchase of Shares pursuant to the
Offer shall not have occurred on or before three (3) months from date of this
Agreement; or
(f) By the Company (i) if there shall be a material breach of any of
Parent or the Purchaser's representations, warranties or covenants hereunder,
which breach cannot be or has not been cured within thirty (30) days of the
receipt by Parent of written notice thereof from the Company or (ii) to allow
the Company to enter into an agreement in accordance with Section 5.3(c) hereof
with respect to a Superior Proposal which the Company's Board of Directors has
determined is more favorable to the stockholders of the Company than the
transactions contemplated hereby;
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<PAGE> 75
provided, however, if termination is pursuant to clause (ii) of this Section
8.1(f), that it has complied with all provisions thereof, including the notice
provision therein, and that it makes simultaneous payment of the Termination Fee
(as hereinafter defined), plus any amounts then due as a reimbursement of
expenses pursuant to Section 8.2(b) hereof; or
(g) By Parent, if prior to the purchase of Shares pursuant to the
Offer, the Company shall have breached any representation, warranty or covenant
or other agreement contained in this Agreement, which breach (i) would give rise
to the failure of a condition set forth in paragraph (f) or (g) of Annex I
hereto and (ii) cannot be or has not been cured within thirty (30) days of the
receipt by the Company of written notice thereof from Parent; or
(h) By Parent, at any time prior to the purchase of the Shares pursuant
to the Offer, if (i) the Company's Board of Directors shall withdraw, modify, or
change its recommendation or approval in respect of this Agreement or the Offer
in a manner adverse to the Purchaser, (ii) the Company's Board of Directors
shall have recommended any proposal other than by Parent or the Purchaser in
respect of an Acquisition Proposal, (iii) the Company shall have exercised a
right with respect to an Acquisition Proposal referenced in Section 5.3(b)
hereof and shall, directly or through its representatives, continue discussions
with any third party concerning an Acquisition Proposal, which proposal contains
a proposal as to price (without regard to whether such proposal specifies a
particular price or range of potential prices), for more than twenty (20)
business days after the date of receipt of such Acquisition Proposal, (iv) an
Acquisition Proposal that is publicly disclosed shall have been commenced,
publicly proposed or communicated to the Company which contains a proposal as to
price (without regard to whether such proposal specifies a specific price or a
range of potential prices) and the Company shall not have rejected such proposal
within twenty (20) business days of its receipt or, if sooner, the date its
existence first becomes publicly disclosed; or
(i) By Parent, as soon as practicable after the expiration of the
Offer, if the Bank shall not have extended the Debt Financing to Purchaser in
accordance with the Commitment Letter and Parent shall have determined in good
faith that it cannot obtain debt financing within thirty-five (35) business days
after commencement of the Offer from any other source on terms at least as
favorable in the aggregate as the terms set forth in the Commitment Letter; or
(j) By the Company, at the initial scheduled expiration date of the
Offer or any extended expiration date of the Offer, if at such time (i) Parent
shall not have obtained the Debt Financing or waived the condition set forth in
subparagraph (k) of Annex I hereto and (ii) the Minimum Condition and all other
conditions set forth in Annex I (other than those set forth in paragraph (k)
thereof) have been satisfied or, to the extent such conditions may be so waived,
waived by Parent.
Section 8.2 Effect of Termination.
(a) In the event of the termination of this Agreement as provided in
Section 8.1 hereof, written notice thereof shall forthwith be given to the other
party or parties specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith become null and void and
there shall be no liability on the part of Parent, the Purchaser or the Company,
except (i) as set forth in this Section 8.2 and in Sections 6.3(a), 6.5 and 9.3
hereof and (ii) nothing herein shall relieve any party from liability for any
willful and material breach of this Agreement.
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<PAGE> 76
(b) If (i) Parent shall have terminated this Agreement pursuant to
Section 8.1(h) hereof, (ii) Parent shall have terminated this Agreement pursuant
to Section 8.1(g) hereof and within twelve (12) months following the date of any
such termination, an acquisition pursuant to an Acquisition Proposal shall have
been consummated or (iii) the Company shall have terminated this Agreement
pursuant to Section 8.1(f)(ii), then in any such case the Company shall pay in
immediately available funds simultaneously with such termination if pursuant to
Section 8.1(f)(ii) hereof and promptly, but in no event later than two (2)
business days after the date of such termination if pursuant to Section 8.1(h)
hereof or the consummation of the acquisition contemplated by the Acquisition
Proposal following a termination pursuant to Section 8.1(g), to Parent a
Termination Fee, which fee shall be payable by wire transfer to such account as
Parent may designate in writing to the Company.
(c) Notwithstanding the provisions set forth in Section 8.2(a) and
Section 8.2(b) above, if this Agreement is terminated by Parent pursuant to
Section 8.1(i) hereof or by the Company pursuant to Section 8.1(j) hereof and
Parent is not entitled to terminate, withdraw or not consummate the Offer under
one or more of the conditions to the Offer set forth in Annex I to this
Agreement (other than the condition set forth in subparagraph (k) of Annex I),
Parent shall pay the Termination Fee to the Company in immediately available
funds. Payment of the Termination Fee shall be made within two (2) business days
after Parent's or the Company's termination of this Agreement pursuant to
Section 8.1(i) or Section 8.1(j).
(d) Notwithstanding the provisions set forth in Sections 8.2(a) and
Section 8.2(b) above, if at least a majority of the issued and outstanding
Common Stock on a fully diluted basis has been validly tendered and not
withdrawn prior to the expiration of the Offer, and this Agreement is terminated
by Parent pursuant to Section 8.1(b) or by the Company pursuant to Section
8.1(e) hereof, Parent shall pay the Termination Fee to the Company in
immediately available funds if Parent or the Company terminates this Agreement
solely as a result of the Minimum Condition not having been satisfied, with
payment of the Termination Fee to be made within two (2) business days after
Parent's or the Company's termination of this Agreement.
(e) For purposes of this Agreement, the term "Termination Fee" shall
mean an amount equal to $4,975,000, plus an amount, not in excess of $1,000,000,
equal to the actual and reasonably documented out-of-pocket expenses incurred by
either Parent or Purchaser, on the one hand, or the Company, on the other hand,
as the case may be, in connection with the Offer, the Merger, this Agreement,
the Stockholders' Agreement and the consummation of the transactions
contemplated hereby and thereby.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendment and Modification. Subject to applicable law and
Section 1.3(c) hereof, this Agreement may be amended, modified and supplemented
in any and all respects, whether before or after any vote of the stockholders of
the Company contemplated hereby, by written agreement of the parties hereto, by
action taken by their respective Boards of Directors or equivalent governing
bodies, at any time prior to the Effective Time with respect to any of the terms
contained
69
<PAGE> 77
herein; provided that after the approval of this Agreement by the shareholders
of the Company, no such amendment, modification or supplement shall reduce the
amount or change the form of the Merger Consideration.
Section 9.2 Non-survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any schedule, instrument
or other document delivered pursuant to this Agreement shall survive the
Effective Time.
Section 9.3 Expenses. Except as expressly set forth in Section 6.4(c)
and 8.2(b) hereof, all fees, costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such fees, costs and expenses.
Section 9.4 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by a nationally recognized overnight
courier service, such as Federal Express, to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Parent or the Purchaser, to:
InterVoice, Inc.
17811 Waterview Parkway
Dallas, Texas 75252
Attention: Vice President and Corporate Counsel
Telephone No.: 972-454-8694
Telecopy No.: 972-454-8120
with a copy to:
InterVoice Acquisition Subsidiary III, Inc.
17811 Waterview Parkway
Dallas, Texas 75252
Attention: Vice President and Corporate Counsel
Telephone No.: 972-454-8694
Telecopy No.: 972-454-8120
and
Sam P. Burford, Jr.
Thompson & Knight, P.C.
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201
Telephone No.: (214) 969-1700
Telecopy No.: (214) 969-1751
70
<PAGE> 78
(b) if to the Company, to:
Brite Voice Systems, Inc.
250 International Parkway, Suite 300
Heathrow, Florida 32746-5006
Attention: Chief Financial Officer
Telephone No.: 407-357-1002
Telecopy No.: 407-357-1410
with a copy to:
Thomas P. Garretson
Triplett, Woolf & Garretson, LLC
2959 North Rick Road, Suite 300
Wichita, Kansas 67226
Telephone No.: 316-630-8100
Telecopy No.: 316-630-8101
Section 9.5 Interpretation. When a reference is made in this Agreement
to Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Whenever the words "include", "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation." As used in this Agreement, the term "affiliates" shall have the
meaning set forth in Rule 12b-2 of the Exchange Act. As used in this Agreement,
the term "Person" shall mean a natural person, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity or organization.
Section 9.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 9.7 Entire Agreement; No Third Party Beneficiaries. This
Agreement and the Confidentiality Agreement (including the documents and the
instruments referred to herein and therein):
(a) constitute the entire agreement and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof, and
(b) except as provided in Sections 2.4 and 6.7 hereof, are not intended
to confer upon any person other than the parties hereto any rights or remedies
hereunder.
Section 9.8 Severability. Any term or provision of this Agreement that
is held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction or other authority
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<PAGE> 79
declares that any term or provision hereof is invalid, void or unenforceable,
the parties agree that the court asking such determination shall have the power
to reduce the scope, duration, area or applicability of the term or provision,
to delete specific words or phrases, or to replace any invalid, void or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision.
Section 9.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas without giving
effect to the principles of conflicts of law thereof.
Section 9.10 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
content of the other parties, except that the Purchaser may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
Parent or to any direct or indirect wholly owned Subsidiary of Parent. Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns. Notwithstanding the foregoing, if any party assigns its rights under
this Agreement, such party shall not be deemed to have been released from its
respective obligations set forth herein.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 80
IN WITNESS WHEREOF, Parent, the Purchaser and the Company have caused
this Agreement to be signed by their respective officers hereunto duly
authorized as of the date first written above.
INTERVOICE, INC.
By /s/ Daniel D. Hammond
-----------------------------------------
Name: Daniel D. Hammond
Title: Chairman of the Board and
Chief Executive Officer
INTERVOICE ACQUISITION SUBSIDIARY,
III, INC.
By /s/ Rob-Roy J. Graham
-----------------------------------------
Name: Rob-Roy J. Graham
Title: President
BRITE VOICE SYSTEMS, INC.
By /s/ Stanley G. Brannan
-----------------------------------------
Name: Stanley G. Brannan
Title: Chairman of the Board, President
and Chief Executive Officer
73
<PAGE> 81
ANNEX I
Certain Conditions of the Offer. Notwithstanding any other provisions
of the Offer, and in addition to (and not in limitation of) the Purchaser's
rights to extend and amend the Offer at any time in its sole discretion (to the
extent as permitted by this Agreement), the Purchaser shall not be required to
accept for payment or, subject to any applicable rules and regulations of the
SEC, including Rule 14e-l(c) under the Exchange Act (relating to the Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
Shares, and may terminate or amend the Offer as to any Shares not then paid for,
if (i) as of the expiration date of the Offer (A) any applicable waiting period
under the HSR Act has not expired or terminated or (B) the Minimum Condition has
not been satisfied, or (ii) at any time on or after the date of this Agreement
and before the time of acceptance for payment for any such Shares, any of the
following events shall occur:
(a) there shall be threatened in writing or pending any suit, action or
proceeding by any Governmental Entity against the Purchaser, Parent, the Company
or any Subsidiary of the Company (i) seeking to prohibit or impose any material
limitations on Parent's or the Purchaser's ownership or operation (or that of
any of their respective Subsidiaries or affiliates) of all or a material portion
of their (to the extent it relates to the Offer or Merger) or the Company's
businesses or assets, or to compel Parent or the Purchaser or their respective
Subsidiaries and affiliates to dispose of or hold separate any material portion
of the business or assets of the Company and its Subsidiaries or (to the extent
it relates to the Offer or Merger) Parent and its Subsidiaries, in each case
taken as a whole, (ii) challenging the acquisition by Parent or the Purchaser of
any Shares under the Offer, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or the performance of any of the other
transactions contemplated by this Agreement, or seeking to obtain from the
Company, and (to the extent it relates to the Offer or Merger) Parent or the
Purchaser any damages that are material in relation to the Company and its
Subsidiaries taken as a whole, (iii) seeking to impose material limitations on
the ability of the Purchaser, or render the Purchaser unable, to accept for
payment, pay for or purchase some or all of the Shares pursuant to the Offer and
the Merger, or (iv) seeking to impose material limitations on the ability of
Purchaser or Parent effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote the Shares purchased by
it on all matters properly presented to the Company's stockholders;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction (other than a temporary or preliminary injunction that is removed
within ten (10) days) enacted, entered, enforced, promulgated, or deemed
applicable, pursuant to an authoritative interpretation by or on behalf of a
Governmental Entity, to the Offer or the Merger, or any other action shall be
taken by any Governmental Entity other than the application to the Offer or the
Merger of applicable waiting periods under HSR Act, that is reasonably likely to
result, directly or indirectly, in any of the consequences referred to in
clauses (i) through (iv) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq Stock Market for a period in excess of
twenty-four (24) hours (excluding suspensions or limitations resulting solely
from physical damage or interference with such exchanges not related to market
A-1
<PAGE> 82
conditions), (ii) a declaration of a general banking moratorium or any general
suspension of payments in respect of banks in the United States (whether or not
mandatory), (iii) a commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the United
States (which shall not include the United States' participation in the NATO
peacekeeping mission in the provinces of the former Yugoslavia (including but
not limited to Serbia, Kosovo and Albania)), (iv) any material limitation by any
United States governmental authority on the extension of credit generally by
banks or other lending institutions, or (v) a change in general financial, bank
or capital market conditions which materially and adversely affects the ability
of financial institutions in the United States to extend credit or syndicate
loans or (vi) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(d) since December 31, 1998, there shall have occurred any change (or
any development that, insofar as reasonably can be foreseen, is reasonably
likely to result in any change) that constitutes a Company Material Adverse
Effect;
(e) (i) the Company's Board of Directors or any committee thereof shall
have withdrawn or modified in a manner adverse to Parent or the Purchaser its
approval or recommendation of the Offer, the Merger or this Agreement, or
approved or recommended any Acquisition Proposal or (ii) the Company shall have
entered into any agreement with respect to any Superior Proposal in accordance
with Section 5.3(c) of this Agreement;
(f) any of the representations and warranties of the Company set forth
in the Merger Agreement shall not be true and correct, in each case (i) as of
the date referred to in any representation or warranty which addresses matters
as of a particular date, or (ii) as to all other representations and warranties,
as of the date of this Agreement and as of the scheduled expiration of the Offer
and such inaccuracy individually or in the aggregate would have a Company
Material Adverse Effect;
(g) the Company shall have failed to perform any obligation or to
comply with any agreement or covenant to be performed or complied with by it
under this Agreement and such failure individually or in the aggregate would
have a Company Material Adverse Effect;
(h) the Purchaser shall have failed to receive a certificate executed
by the President or a Vice President of the Company, dated as of the scheduled
expiration of the Offer, to the effect that the conditions set forth in
paragraphs (f) and (g) of this Annex I have not occurred;
(i) all consents, permits and approvals of Governmental Entities and
other persons listed in Schedule 3.4 of the Company Disclosure Schedules and
identified with an asterisk shall not have been obtained with no material
adverse conditions attached and no material expense imposed on the Company or
any of its Subsidiaries;
(j) this Agreement shall have been terminated in accordance with its
terms; and
(k) Parent and/or the Purchaser shall not have received the Debt
Financing for the Transactions contemplated by the Commitment Letter from the
Bank, and Parent shall have determined in good faith that it cannot obtain debt
financing from any other source within thirty-five
A-2
<PAGE> 83
(35) business days after commencement of the Offer on terms at least as
favorable in the aggregate as the terms set forth in the Commitment Letter.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser, may be asserted by Parent or the Purchaser regardless of the
circumstances giving rise to such conditions (including any action or inaction
by Parent or the Purchaser) and may be waived by Parent or the Purchaser in
whole or in part at any time and from time to time in the sole discretion of
Parent or the Purchaser, except as otherwise provided by this Agreement. The
failure by Parent or the Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
A-3
<PAGE> 84
EXHIBIT A
FORM OF STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "Agreement"), dated as of April 27,
1999, is made by and among InterVoice, Inc., a Texas corporation ("Parent"),
InterVoice Acquisition Subsidiary III, Inc., a Nevada corporation and a wholly
owned subsidiary of Parent (the "Purchaser") and Stanley G. Brannan, Sue
Brannan, Alan C. Maltz (on his own behalf, as well as on behalf of his minor
children for whom Mr. Maltz acts as custodian for 80,000 shares of Common Stock
(as hereinafter defined) beneficially owned by his minor children), Scott A.
Maltz, Glenn A. Etherington, Leon A. Ferber, Ray S. Naeini, Donald R. Walsh and
John F. Kelsey, III (collectively, the "Stockholders").
WHEREAS, the Stockholders are, as of the date hereof, the record and
beneficial owners of approximately 3,090,541 shares (as may be adjusted from
time to time pursuant to Section 6 hereof, the "Shares") of common stock, no par
value (the "Common Stock") of Brite Voice Systems, Inc., a Kansas corporation
(the "Company");
WHEREAS, certain of the Stockholders also own options to purchase
shares of Common Stock (the "Stock Options") pursuant to various stock option
plans maintained by the Company;
WHEREAS, Parent, the Purchaser and the Company concurrently herewith
are entering into an Acquisition Agreement and Plan of Merger, dated as of the
date hereof (the "Merger Agreement"), which provides, among other things, for
the acquisition of the Company by Parent by means of a cash tender offer (the
"Offer") for up to 9,158,155 shares of Common Stock and for the subsequent
merger (the "Merger") of the Purchaser with and into the Company upon the terms
and subject to the conditions set forth in the Merger Agreement; and
WHEREAS, as a condition to the willingness of Parent and the Purchaser
to enter into the Merger Agreement, and in order to induce Parent and the
Purchaser to enter into the Merger Agreement, the Stockholders have agreed to
enter into this Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by
Parent and the Purchaser of the Merger Agreement, the foregoing preamble and the
mutual representations, warranties, covenants and agreements set forth herein
and therein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Representations and Warranties of the Stockholders. Each
Stockholder hereby, severally and not jointly, represents and warrants to Parent
and the Purchaser as follows:
(a) Such Stockholder is the record and beneficial owner of that number
of shares of Common Stock set forth below opposite such Stockholder's name:
<PAGE> 85
<TABLE>
<CAPTION>
Shares
Name of Common Stock
---- ---------------
<S> <C>
Stanley G. Brannan 1,141,962
---------------
Sue Brannan 25,000
---------------
Alan C. Maltz 1,225,106
---------------
Alan C. Maltz, as custodian 80,000
---------------
Scott A. Maltz 472,621
---------------
Glenn A. Etherington 25,321
---------------
Leon A. Ferber 115,000
---------------
Ray S. Naeini 0
---------------
Donald R. Walsh 3,698
---------------
John F. Kelsey, III 1,833
---------------
</TABLE>
(b) Such Stockholder holds Stock Options covering that number of shares
of Common Stock set forth below opposite such Stockholder's name:
<TABLE>
<CAPTION>
Share of Common Stock
Name Covered by Stock Options
---- ------------------------
<S> <C>
Stanley G. Brannan 4,500
------------------------
Sue Brannan 0
------------------------
Alan C. Maltz 4,500
------------------------
Alan C. Maltz, as custodian 0
------------------------
Scott A. Maltz 0
------------------------
Glenn A. Etherington 139,000
------------------------
Leon A. Ferber 50,000
------------------------
Ray S. Naeini 140,000
------------------------
Donald R. Walsh 142,750
------------------------
John F. Kelsey, III 23,500
------------------------
</TABLE>
(c) Such Stockholder has all requisite power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby, and has taken any necessary action to authorize the execution, delivery
and performance of this Agreement.
(d) This Agreement has been duly authorized, executed and delivered by
such Stockholder and constitutes the legal, valid and binding obligation of such
Stockholder, enforceable against such Stockholder in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally, and (ii) the availability of the remedy of specific
performance or injunctive or other forms of equitable relief may be subject to
equitable defenses and would be subject to the discretion of the court before
which any proceeding therefor may be brought.
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<PAGE> 86
(e) Neither the execution and delivery of this Agreement nor the
consummation by such Stockholder of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any contract,
trust, commitment, agreement, understanding, arrangement or restriction of any
kind to which such Stockholder is a party or bound or to which those Shares or
Stock Options owned by such Stockholder are subject. Consummation by such
Stockholder of the transactions contemplated hereby will not violate, or require
any consent, approval, or notice under, any provision of any judgment, order,
decree, statute, law, rule or regulation applicable to such Stockholder or those
Shares or Stock Options owned by such Stockholder, except for any necessary
filing under Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), or state takeover laws.
(f) The certificates representing those Shares owned by such
Stockholder are now and at all times during the term hereof will be held by such
Stockholder, or by a nominee or custodian for the benefit of such Stockholder,
free and clear of all liens, claims, security interests, proxies, voting trusts
or agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising hereunder.
SECTION 2. Representations and Warranties of Parent and the Purchaser.
Each of Parent and the Purchaser hereby, jointly and severally, represents and
warrants to the Stockholders as follows:
(a) Each of Parent and the Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the States of Texas and
Nevada, respectively, has all 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.
(b) This Agreement has been duly authorized, executed and delivered by
each of Parent and the Purchaser and constitutes the legal, valid and binding
obligation of each of Parent and the Purchaser, enforceable against each of them
in accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (ii) the availability
of the remedy of specific performance or injunctive or other forms of equitable
relief may be subject to equitable defenses and would be subject to the
discretion of the court before which any proceeding therefor may be brought.
(c) Neither the execution and delivery of this Agreement nor the
consummation by each of Parent and the Purchaser of the transactions
contemplated hereby will result in a violation of, or a default under, or
conflict with, any contract, trust, commitment, agreement, understanding,
arrangement or restriction of any kind to which Parent or the Purchaser is a
party or bound. The consummation by each of Parent and the Purchaser of the
transactions contemplated hereby will not violate, or require any consent,
approval, or notice under, any provision of any judgment, order, decree,
statute, law, rule or regulation applicable to either Parent or the Purchaser,
except for any necessary filing under the HSR Act or state takeover laws.
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<PAGE> 87
SECTION 3. Purchase and Sale of the Shares. Each Stockholder hereby
agrees, severally but not jointly, that he or she shall tender the Shares into
the Offer promptly, and in any event no later than the third (3RD) business day
following the commencement of the Offer, and that the Stockholders shall not
withdraw any Shares so tendered. The Purchaser hereby agrees to purchase all the
Shares so tendered at a price per Share equal to Thirteen and 40/100s Dollars
($13.40) (the "Offer Price") or any higher price that may be paid in the Offer;
provided, however, that the Purchaser's obligation to accept for payment and pay
for the Shares in the Offer is subject to all the terms and conditions of the
Offer set forth in the Merger Agreement and Annex I thereto.
SECTION 4. Transfer of the Shares. Prior to the termination of this
Agreement, except as otherwise provided herein, each Stockholder agrees,
severally but not jointly, not to: (i) transfer (which term shall include,
without limitation, for the purposes of this Agreement, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the Shares
or the Stock Options; (ii) enter into any contract, option or other agreement or
understanding with respect to any transfer of any or all of those Shares or
Stock Options owned by such Stockholder or any interest therein; (iii) grant any
proxy, power-of-attorney or other authorization or consent in or with respect to
those Shares owned by such Stockholder or grant any power of attorney or other
authorization or consent in or with respect to those Stock Options owned by such
Stockholder; (iv) deposit those Shares owned by such Stockholder into a voting
trust or enter into a voting agreement or arrangement with respect to such
Shares or (v) take any other action that would in any way restrict, limit or
interfere with the performance of such Stockholder's obligations hereunder or
the transactions contemplated hereby.
SECTION 5. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each Stockholder hereby irrevocably grants to, and appoints, Parent
and any nominee thereof, as such Stockholder's respective proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of such Stockholder, to vote those Shares owned by such Stockholder,
or grant a consent or approval in respect of such Shares, in connection with any
meeting of the stockholders of the Company (i) in favor of the Merger, and (ii)
against any action or agreement which would impede, interfere with or prevent
the Merger, including any other extraordinary corporate transaction, such as a
merger, reorganization or liquidation involving the Company and a third party or
any other proposal of a third party to acquire the Company.
(b) Each Stockholder represents, severally but not jointly, that any
proxies, if any, heretofore given in respect of those Shares owned by such
Stockholder are not irrevocable, and that such proxies are hereby revoked.
(c) Each Stockholder hereby affirms, severally but not jointly, that
such Stockholder's irrevocable proxy set forth in this Section 5 is given in
connection with the execution of the Merger Agreement, and that such irrevocable
proxy is given to secure the performance of the duties of such Stockholder under
this Agreement. Each Stockholder hereby further affirms, severally but not
jointly,
4
<PAGE> 88
that such Stockholder's irrevocable proxy is coupled with an interest and,
except as set forth in Section 9 hereof, is intended to be irrevocable in
accordance with the provisions of Section 17-6502 of the Kansas General
Corporation Code (the "KGCC").
SECTION 6. Certain Events. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Common Stock or the acquisition
of additional shares of Common Stock or other securities or rights of the
Company by the Stockholders, the number of Shares and the number of shares of
Common Stock covered by the Stock Options shall be adjusted appropriately, and
this Agreement and the obligations hereunder shall attach to any additional
shares of Common Stock or other securities or rights of the Company issued to or
acquired by the Stockholders.
SECTION 7. Stock Option Cash-Out. Subject to the completion of the
Merger, each Stockholder that holds Stock Options as of the date hereof hereby
agrees, severally but not jointly, that he or she shall, in accordance with
Section 2.4 of the Merger Agreement, surrender such Stock Options to the Company
for cancellation prior to the Effective Time (as defined in the Merger
Agreement). Subject to the conditions set forth in the immediately preceding
sentence and within ten (10) days after the Effective Time of the Merger, the
Company will pay the respective holders of those Stock Options that are "in the
money" an amount, in cash, equal to product of (i) the difference between the
Offer Price and the respective per share exercise prices of such Stock Options,
multiplied by (ii) the number of shares of Common Stock covered by the
respective Stock Options.
SECTION 8. Certain Other Agreements.
(a) Except as provided in this Section 8 hereof, each Stockholder will
not, and will ensure that such Stockholder's, employees, investment bankers,
attorneys, accountants and other agents do not, directly or indirectly: (i)
initiate, solicit or encourage, or take any action to facilitate the making of,
any offer or proposal which constitutes or is reasonably likely to lead to any
Acquisition Proposal (as defined in the Merger Agreement), (ii) enter into any
agreement with respect to any Acquisition Proposal, or (iii) in the event of an
unsolicited Acquisition Proposal for the Company, engage in negotiations or
discussions with, or provide any information or data to, any Person (as defined
in the Merger Agreement) (other than Parent, any of its affiliates or
representatives) relating to any Acquisition Proposal; provided, however, that
nothing contained in this Section 8 or any other provision hereof shall prohibit
Stockholders, on behalf of the Company or the Company's Board of Directors, from
(i) taking and disclosing to the Company's stockholders, its position with
respect to a tender or exchange offer by a third party pursuant to Rules 14d-9
and 14e-2 promulgated under the Exchange Act or (ii) making such disclosure to
the Company's stockholders as is reasonably deemed necessary, in the good faith
judgment of the Company's Board of Directors after receipt of advice from
outside legal counsel to the Company that such disclosure is required under
applicable law and that the failure to make such disclosure would cause the
Company's Board of Directors to violate its fiduciary duties to the Company's
stockholders under applicable law.
5
<PAGE> 89
(b) Notwithstanding the foregoing, prior to the acceptance of Shares
pursuant to the Offer, each Stockholder may furnish information concerning the
Company's business, properties or assets to any Person pursuant to a
confidentiality agreement with terms no less favorable to such Stockholder and
the Company than those contained in the Confidentiality Agreement, dated March
12, 1999 entered into between Parent and the Company (the "Confidentiality
Agreement") and may negotiate and participate in discussions and negotiations
with such Person concerning an Acquisition Proposal if (x) such entity or group
has on an unsolicited basis submitted a bona fide written proposal to the
Company relating to any such transaction which the Company's Board of Directors
determines in good faith, after receiving advice from a nationally recognized
investment banking firm, represents a superior transaction to the Offer and the
Merger and (y) the Company's Board of Directors determines in good faith, only
after receipt of written advice from outside legal counsel to the Company, that
the failure to provide such information or access or to engage in such
discussions or negotiations would cause the Company's Board of Directors to
violate its fiduciary duties to the Company's stockholders under applicable law
(an Acquisition Proposal which satisfies clauses (x) and (y) being referred to
herein as a "Superior Proposal"). Each Stockholder shall promptly, and in any
event within one (1) business day following receipt of a Superior Proposal,
notify Parent of the receipt of the same and prior to providing any such party
with any material non-public information. Each Stockholder shall promptly
provide to Parent any material non-public information regarding the Company
provided to any other party which was not previously provided to Parent.
(c) Except as set forth herein, no Stockholder shall (i) approve or
recommend or propose to approve or recommend, any Acquisition Proposal or (ii)
enter into any agreement with respect to any Acquisition Proposal.
Notwithstanding the foregoing, prior to the time of acceptance for payment of
Shares in the Offer, each Stockholder may (subject to the terms of this sentence
and the following sentence) enter into an acquisition agreement with respect to
a Superior Proposal, in which event each Stockholder may take any of the actions
set forth in clauses (i) through (ii) of the immediately preceding sentence;
provided, however, that no Stockholder shall enter into an acquisition agreement
with respect to a Superior Proposal unless the Company shall have furnished
Parent with written notice not later than the first to occur of (i) 12:00 noon
three (3) business days in advance of any date that it intends to enter into
such acquisition agreement or (ii) two (2) business days prior to the expiration
of the Offer; and shall have caused its financial and legal advisors to
negotiate with Parent to make such adjustments in the terms and conditions of
this Agreement as would enable the Stockholder to proceed with the Transactions
contemplated herein on such adjusted terms.
SECTION 9. Further Assurances. Each Stockholder shall, upon request of
Parent or the Purchaser, execute and deliver any additional documents and take
such further actions as may reasonably be deemed by Parent or the Purchaser to
be necessary or desirable to carry out the provisions hereof and to vest in
Parent the power to vote those Shares owned by such Stockholder as contemplated
by Section 5 hereof.
SECTION 10. Termination. This Agreement, and all rights and obligations
of the parties hereunder, shall terminate immediately upon the earliest of (a)
the termination of the Merger Agreement in accordance with its terms, (b) the
Effective Time (as defined in the Merger Agreement),
6
<PAGE> 90
or (c) written notice by Parent that Parent, in its sole discretion determines
to terminate this Agreement; provided, however, that Section 11 hereof shall
survive any termination of this Agreement.
SECTION 11. Expenses. All fees and expenses incurred by any one party
hereto shall be borne by the party incurring such fees and expenses.
SECTION 12. Public Announcements. The initial press release with
respect to the execution of this Agreement and the Merger Agreement shall be a
joint press release acceptable to Parent, the Purchaser and the Stockholders.
Thereafter, so long as this Agreement is in effect, neither the Parent,
Purchaser, nor the Stockholders, nor any of their respective affiliates shall
issue or cause the publication of any press release or other announcement with
respect to the Merger Agreement, this Agreement or the other Transactions (as
defined in the Merger Agreement) without the prior consultation of the other
party, except as such party believes, after receiving the advice of outside
counsel, may be required by law or by any listing agreement with a national
securities exchange or trading market. Stockholders hereby designate the Company
to represent them in connection with any press releases and announcements.
SECTION 13. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to such terms in the Merger
Agreement.
(b) All notices and other communications hereunder shall be in writing
and shall be deemed given upon (i) transmitter's confirmation of a receipt of a
facsimile transmission, (ii) confirmed delivery by a standard overnight carrier
or when delivered by hand or (iii) the expiration of five (5) business days
after the day when mailed in the United States by certified or registered mail,
postage prepaid, addressed at the following addresses (or at such other address
for a party as shall be specified by like notice):
(A) if to Stanley G. Brannan, to:
c/o Brite Voice Systems, Inc.
250 International Parkway, Suite 300
Heathrow, Florida 32746-5006
Facsimile: 407-357-1410
Telephone: 407-357-1002
(B) if to Sue Brannan, to:
c/o Brite Voice Systems, Inc.
250 International Parkway, Suite 300
Heathrow, Florida 32746-5006
7
<PAGE> 91
Facsimile: 407-357-1410
Telephone: 407-357-1002
(C) if to Alan C. Maltz, Individually or as Custodian, to:
29 Chelsea Drive
Livingston, New Jersey 07039
Facsimile: 973-994-6665
Telephone: 973-994-2468
(D) if to Scott A. Maltz, to:
30 Blackhawk Lane
Burlingame, California 94010
Facsimile: _______________
Telephone: 415-344-4810
(E) if to Glenn A. Etherington, to:
c/o Brite Voice Systems, Inc.
250 International Parkway, Suite 300
Heathrow, Florida 32746-5006
Facsimile: 407-357-1410
Telephone: 407-357-1002
(F) if to Leon A. Ferber, to:
c/o Brite Voice Systems, Inc.
40 Shawmut Road
Canton, Massachusetts 02021-1409
Facsimile: 781-828-7886
Telephone: 781-401-1525
(G) if to Ray S. Naeini, to:
c/o Brite Voice Systems, Inc.
250 International Parkway, Suite 300
Heathrow, Florida 32746-5006
Facsimile: 407-357-1410
Telephone: 407-357-1002
(H) if to Donald R. Walsh, to:
8
<PAGE> 92
c/o Brite Voice Systems, Inc.
250 International Parkway, Suite 300
Heathrow, Florida 32746-5006
Facsimile: 407-357-1410
Telephone: 407-357-1002
(I) if to John F. Kelsey, III, to:
c/o The Kelsey Group
600 Executive Drive
Princeton, New Jersey 08540
Facsimile: 609-921-2112
Telephone: 609-921-7200
and
(J) if to Parent or the Purchaser, to:
17811 Waterview Parkway
Dallas, Texas 75252
Facsimile: 972-454-8781
Telephone: 972-454-8694
Attention: Vice President and Corporate Counsel
with a copy to:
Thompson & Knight, P.C.
1700 Pacific Avenue
Suite 3300
Dallas, Texas 75201
Facsimile: (214) 969-1751
Telephone: (214) 969-1700
Attention: Sam P. Burford, Jr.
(c) The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
(d) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall be considered one and
the same agreement.
(e) This Agreement (including the Merger Agreement and any other
documents and instruments referred to herein) constitutes the entire agreement,
and supersedes all prior agreements and understandings, whether written and
oral, among the parties hereto with respect to the subject matter hereof.
9
<PAGE> 93
(f) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Texas without giving effect to the principles of
conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by, the parties and their respective
successors and assigns, and the provisions of this Agreement are not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
(h) If any term, provision, covenant, restriction or part of the
Agreement herein is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable (either generally or with respect to
certain of the Shares) or against its regulatory policy, the remainder of the
terms, provisions, covenants, restrictions and parts of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired,
invalidated or removed.
(i) Each of the parties hereto acknowledges and agrees that in the
event of any breach of this Agreement, each non-breaching party would be
irreparably and immediately harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto (i) will waive, in any
action for specific performance, the defense of adequacy of a remedy at law and
(ii) shall be entitled, in addition to any other remedy to which they may be
entitled at law or in equity, to compel specific performance of this Agreement
in any action instituted in any state or federal court sitting in Dallas, Texas.
The parties hereto consent to personal jurisdiction in any such action brought
in any state or federal court sitting in Dallas, Texas and to service of process
upon it in the manner set forth in Section 12(b) hereof.
(j) No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10
<PAGE> 94
IN WITNESS WHEREOF, Parent, the Purchaser and the Stockholders have
caused this Agreement to be duly executed and delivered as of the date first
written above.
INTERVOICE, INC.
By /s/
-------------------------------------
Name:
--------------------------------
Title:
--------------------------------
INTERVOICE ACQUISITION SUBSIDIARY III,
INC.
By /s/
-------------------------------------
Name:
--------------------------------
Title:
--------------------------------
STOCKHOLDERS
/s/
----------------------------------------
Stanley G. Brannan
/s/
----------------------------------------
Sue Brannan
/s/
----------------------------------------
Alan C. Maltz (on his own behalf and on
behalf of his minor children with
respect to those Shares for which he
acts as custodian)
/s/
----------------------------------------
Scott A. Maltz
11
<PAGE> 95
STOCKHOLDERS (continued)
/s/
----------------------------------------
Glenn A. Etherington
/s/
----------------------------------------
Leon A. Ferber
/s/
----------------------------------------
Ray S. Naeini
/s/
----------------------------------------
Donald R. Walsh
/s/
----------------------------------------
John F. Kelsey, III
12
<PAGE> 96
EXHIBIT B
FORM OF AFFILIATE AGREEMENT
, 1999
-----------
InterVoice, Inc.
17811 Waterview Parkway
Dallas, Texas 75252
Ladies and Gentlemen:
Reference is made to the provisions of the Acquisition Agreement and
Plan of Merger, dated as of April 27, 1999 (together with any amendments
thereto, the "Merger Agreement"), among Brite Voice Systems, Inc., a Kansas
corporation ("Company"), InterVoice, Inc., a Texas corporation ("Parent") and
InterVoice Acquisition Subsidiary III, Inc., a Nevada corporation, and a wholly
owned subsidiary of Parent ("Purchaser"), pursuant to which, among other things,
Purchaser will be merged with and into Company, with Company continuing as the
surviving corporation (the "Merger"). This agreement constitutes the
undertakings of the undersigned contemplated by Section 6.10 of the Merger
Agreement.
I understand that I may be deemed to be an "affiliate" of Company as
such term is defined for purposes of Rule 145 ("Rule 145") promulgated under the
Securities Act of 1933, as amended (the "Securities Act") and that the
transferability of the shares of common stock, no par value per share, of Parent
(the "Parent Common Stock"), together with associated preferred stock purchase
rights, which I may receive upon the consummation of the Merger in exchange for
my shares of common stock, no par value per share, of Company (the "Shares") may
be restricted. Nothing herein shall be construed as an admission that I am an
affiliate.
I hereby represent, warrant and covenant to Parent that:
(a) I have the full power to execute and deliver this
agreement and to make the representations and warranties herein and to perform
the obligations hereunder;
(b) I will not sell, transfer or otherwise dispose of any of
the shares of Parent Common Stock except (i) pursuant to an effective
registration statement under the Securities Act or (ii) as permitted by, and in
accordance with, Rule 145, if applicable, or another applicable exemption under
the Securities Act; and
(c) I will not exercise appraisal rights in connection with
the Merger.
Parent agrees to cause either or both of the conditions set forth in
Rule 144(c) under the Securities Act to be satisfied at all times during the
period prior to the second anniversary of the Effective Time (as defined in the
Merger Agreement).
I hereby acknowledge that except as otherwise provided in the Merger
Agreement or in the previous paragraph, Parent is under no obligation to
register the sale, transfer or other disposition of
<PAGE> 97
the shares of Parent Common Stock or to take any other action necessary for the
purpose of making an exemption from registration available.
I understand that Parent will issue stop transfer instructions to its
transfer agent with respect to the shares of Parent Common Stock that I receive
upon consummation of the Merger and that a restrictive legend will be placed on
the certificates delivered to me evidencing the shares of Parent Common Stock in
substantially the following form:
"This certificate and the shares represented hereby have been
issued pursuant to a transaction governed by Rule 145 ("Rule
145") promulgated under the Securities Act of 1933, as amended
(the "Securities Act"), and may not be sold or otherwise
disposed of unless registered under the Securities Act
pursuant to a Registration Statement in effect at the time or
unless the proposed sale or disposition can be made in
compliance with Rule 145 or without registration in reliance
on another exemption from registration. Reference is made to
that certain agreement dated _______, 1999 between the Holder
and the Issuer, a copy of which is on file in the principal
office of the Issuer.
Parent agrees to release such stop transfer instructions and to cause
this legend to be removed from the certificates delivered to me evidencing the
shares of Parent Common Stock free of charge to the holder thereof promptly
after the restrictions on transferability of the shares of Parent Common Stock
imposed by Rule 145 are no longer applicable or Parent breaches its obligations
set forth in the first sentence of the fourth paragraph of this agreement, and
after I surrender such certificates to the transfer agent with a request for
such removal.
This agreement shall be binding on successors to Parent and on my
heirs, executors and estate.
I hereby acknowledge that the receipt of this agreement by Parent is an
inducement and a condition to Parent's obligation to consummate the Merger under
the Merger Agreement and this agreement shall be governed by the laws of the
State of Texas.
Very truly yours,
AGREED:
INTERVOICE, INC.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
<PAGE> 1
EXHIBIT 99.(c)(2)
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "Agreement"), dated as of April 27,
1999, is made by and among InterVoice, Inc., a Texas corporation ("Parent"),
InterVoice Acquisition Subsidiary III, Inc., a Nevada corporation and a wholly
owned subsidiary of Parent (the "Purchaser") and Stanley G. Brannan, Sue
Brannan, Alan C. Maltz (on his own behalf, as well as on behalf of his minor
children for whom Mr. Maltz acts as custodian for 80,000 shares of Common Stock
(as hereinafter defined) beneficially owned by his minor children), Scott A.
Maltz, Glenn A. Etherington, Leon A. Ferber, Ray S. Naeini, Donald R. Walsh and
John F. Kelsey, III (collectively, the "Stockholders").
WHEREAS, the Stockholders are, as of the date hereof, the record and
beneficial owners of approximately 3,090,541 shares (as may be adjusted from
time to time pursuant to Section 6 hereof, the "Shares") of common stock, no par
value (the "Common Stock") of Brite Voice Systems, Inc., a Kansas corporation
(the "Company");
WHEREAS, certain of the Stockholders also own options to purchase
shares of Common Stock (the "Stock Options") pursuant to various stock option
plans maintained by the Company;
WHEREAS, Parent, the Purchaser and the Company concurrently herewith
are entering into an Acquisition Agreement and Plan of Merger, dated as of the
date hereof (the "Merger Agreement"), which provides, among other things, for
the acquisition of the Company by Parent by means of a cash tender offer (the
"Offer") for up to 9,158,155 shares of Common Stock and for the subsequent
merger (the "Merger") of the Purchaser with and into the Company upon the terms
and subject to the conditions set forth in the Merger Agreement; and
WHEREAS, as a condition to the willingness of Parent and the Purchaser
to enter into the Merger Agreement, and in order to induce Parent and the
Purchaser to enter into the Merger Agreement, the Stockholders have agreed to
enter into this Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by
Parent and the Purchaser of the Merger Agreement, the foregoing preamble and the
mutual representations, warranties, covenants and agreements set forth herein
and therein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Representations and Warranties of the Stockholders. Each
Stockholder hereby, severally and not jointly, represents and warrants to Parent
and the Purchaser as follows:
(a) Such Stockholder is the record and beneficial owner of that number
of shares of Common Stock set forth below opposite such Stockholder's name:
<PAGE> 2
<TABLE>
<CAPTION>
Shares
Name of Common Stock
---- ---------------
<S> <C>
Stanley G. Brannan 1,141,962
---------------
Sue Brannan 25,000
---------------
Alan C. Maltz 1,225,106
---------------
Alan C. Maltz, as custodian 80,000
---------------
Scott A. Maltz 472,621
---------------
Glenn A. Etherington 25,321
---------------
Leon A. Ferber 115,000
---------------
Ray S. Naeini 0
---------------
Donald R. Walsh 3,698
---------------
John F. Kelsey, III 1,833
---------------
</TABLE>
(b) Such Stockholder holds Stock Options covering that number of shares
of Common Stock set forth below opposite such Stockholder's name:
<TABLE>
<CAPTION>
Share of Common Stock
Name Covered by Stock Options
---- ------------------------
<S> <C>
Stanley G. Brannan 4,500
------------------------
Sue Brannan 0
------------------------
Alan C. Maltz 4,500
------------------------
Alan C. Maltz, as custodian 0
------------------------
Scott A. Maltz 0
------------------------
Glenn A. Etherington 139,000
------------------------
Leon A. Ferber 50,000
------------------------
Ray S. Naeini 140,000
------------------------
Donald R. Walsh 142,750
------------------------
John F. Kelsey, III 23,500
------------------------
</TABLE>
(c) Such Stockholder has all requisite power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby, and has taken any necessary action to authorize the execution, delivery
and performance of this Agreement.
(d) This Agreement has been duly authorized, executed and delivered by
such Stockholder and constitutes the legal, valid and binding obligation of such
Stockholder, enforceable against such Stockholder in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally, and (ii) the availability of the remedy of specific
performance or injunctive or other forms of equitable relief may be subject to
equitable defenses and would be subject to the discretion of the court before
which any proceeding therefor may be brought.
2
<PAGE> 3
(e) Neither the execution and delivery of this Agreement nor the
consummation by such Stockholder of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any contract,
trust, commitment, agreement, understanding, arrangement or restriction of any
kind to which such Stockholder is a party or bound or to which those Shares or
Stock Options owned by such Stockholder are subject. Consummation by such
Stockholder of the transactions contemplated hereby will not violate, or require
any consent, approval, or notice under, any provision of any judgment, order,
decree, statute, law, rule or regulation applicable to such Stockholder or those
Shares or Stock Options owned by such Stockholder, except for any necessary
filing under Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), or state takeover laws.
(f) The certificates representing those Shares owned by such
Stockholder are now and at all times during the term hereof will be held by such
Stockholder, or by a nominee or custodian for the benefit of such Stockholder,
free and clear of all liens, claims, security interests, proxies, voting trusts
or agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising hereunder.
SECTION 2. Representations and Warranties of Parent and the Purchaser.
Each of Parent and the Purchaser hereby, jointly and severally, represents and
warrants to the Stockholders as follows:
(a) Each of Parent and the Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the States of Texas and
Nevada, respectively, has all 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.
(b) This Agreement has been duly authorized, executed and delivered by
each of Parent and the Purchaser and constitutes the legal, valid and binding
obligation of each of Parent and the Purchaser, enforceable against each of them
in accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (ii) the availability
of the remedy of specific performance or injunctive or other forms of equitable
relief may be subject to equitable defenses and would be subject to the
discretion of the court before which any proceeding therefor may be brought.
(c) Neither the execution and delivery of this Agreement nor the
consummation by each of Parent and the Purchaser of the transactions
contemplated hereby will result in a violation of, or a default under, or
conflict with, any contract, trust, commitment, agreement, understanding,
arrangement or restriction of any kind to which Parent or the Purchaser is a
party or bound. The consummation by each of Parent and the Purchaser of the
transactions contemplated hereby will not violate, or require any consent,
approval, or notice under, any provision of any judgment, order, decree,
statute, law, rule or regulation applicable to either Parent or the Purchaser,
except for any necessary filing under the HSR Act or state takeover laws.
3
<PAGE> 4
SECTION 3. Purchase and Sale of the Shares. Each Stockholder hereby
agrees, severally but not jointly, that he or she shall tender the Shares into
the Offer promptly, and in any event no later than the third (3RD) business day
following the commencement of the Offer, and that the Stockholders shall not
withdraw any Shares so tendered. The Purchaser hereby agrees to purchase all the
Shares so tendered at a price per Share equal to Thirteen and 40/100s Dollars
($13.40) (the "Offer Price") or any higher price that may be paid in the Offer;
provided, however, that the Purchaser's obligation to accept for payment and pay
for the Shares in the Offer is subject to all the terms and conditions of the
Offer set forth in the Merger Agreement and Annex I thereto.
SECTION 4. Transfer of the Shares. Prior to the termination of this
Agreement, except as otherwise provided herein, each Stockholder agrees,
severally but not jointly, not to: (i) transfer (which term shall include,
without limitation, for the purposes of this Agreement, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the Shares
or the Stock Options; (ii) enter into any contract, option or other agreement or
understanding with respect to any transfer of any or all of those Shares or
Stock Options owned by such Stockholder or any interest therein; (iii) grant any
proxy, power-of-attorney or other authorization or consent in or with respect to
those Shares owned by such Stockholder or grant any power of attorney or other
authorization or consent in or with respect to those Stock Options owned by such
Stockholder; (iv) deposit those Shares owned by such Stockholder into a voting
trust or enter into a voting agreement or arrangement with respect to such
Shares or (v) take any other action that would in any way restrict, limit or
interfere with the performance of such Stockholder's obligations hereunder or
the transactions contemplated hereby.
SECTION 5. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each Stockholder hereby irrevocably grants to, and appoints, Parent
and any nominee thereof, as such Stockholder's respective proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of such Stockholder, to vote those Shares owned by such Stockholder,
or grant a consent or approval in respect of such Shares, in connection with any
meeting of the stockholders of the Company (i) in favor of the Merger, and (ii)
against any action or agreement which would impede, interfere with or prevent
the Merger, including any other extraordinary corporate transaction, such as a
merger, reorganization or liquidation involving the Company and a third party or
any other proposal of a third party to acquire the Company.
(b) Each Stockholder represents, severally but not jointly, that any
proxies, if any, heretofore given in respect of those Shares owned by such
Stockholder are not irrevocable, and that such proxies are hereby revoked.
(c) Each Stockholder hereby affirms, severally but not jointly, that
such Stockholder's irrevocable proxy set forth in this Section 5 is given in
connection with the execution of the Merger Agreement, and that such irrevocable
proxy is given to secure the performance of the duties of such Stockholder under
this Agreement. Each Stockholder hereby further affirms, severally but not
jointly,
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<PAGE> 5
that such Stockholder's irrevocable proxy is coupled with an interest and,
except as set forth in Section 9 hereof, is intended to be irrevocable in
accordance with the provisions of Section 17-6502 of the Kansas General
Corporation Code (the "KGCC").
SECTION 6. Certain Events. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Common Stock or the acquisition
of additional shares of Common Stock or other securities or rights of the
Company by the Stockholders, the number of Shares and the number of shares of
Common Stock covered by the Stock Options shall be adjusted appropriately, and
this Agreement and the obligations hereunder shall attach to any additional
shares of Common Stock or other securities or rights of the Company issued to or
acquired by the Stockholders.
SECTION 7. Stock Option Cash-Out. Subject to the completion of the
Merger, each Stockholder that holds Stock Options as of the date hereof hereby
agrees, severally but not jointly, that he or she shall, in accordance with
Section 2.4 of the Merger Agreement, surrender such Stock Options to the Company
for cancellation prior to the Effective Time (as defined in the Merger
Agreement). Subject to the conditions set forth in the immediately preceding
sentence and within ten (10) days after the Effective Time of the Merger, the
Company will pay the respective holders of those Stock Options that are "in the
money" an amount, in cash, equal to product of (i) the difference between the
Offer Price and the respective per share exercise prices of such Stock Options,
multiplied by (ii) the number of shares of Common Stock covered by the
respective Stock Options.
SECTION 8. Certain Other Agreements.
(a) Except as provided in this Section 8 hereof, each Stockholder will
not, and will ensure that such Stockholder's, employees, investment bankers,
attorneys, accountants and other agents do not, directly or indirectly: (i)
initiate, solicit or encourage, or take any action to facilitate the making of,
any offer or proposal which constitutes or is reasonably likely to lead to any
Acquisition Proposal (as defined in the Merger Agreement), (ii) enter into any
agreement with respect to any Acquisition Proposal, or (iii) in the event of an
unsolicited Acquisition Proposal for the Company, engage in negotiations or
discussions with, or provide any information or data to, any Person (as defined
in the Merger Agreement) (other than Parent, any of its affiliates or
representatives) relating to any Acquisition Proposal; provided, however, that
nothing contained in this Section 8 or any other provision hereof shall prohibit
Stockholders, on behalf of the Company or the Company's Board of Directors, from
(i) taking and disclosing to the Company's stockholders, its position with
respect to a tender or exchange offer by a third party pursuant to Rules 14d-9
and 14e-2 promulgated under the Exchange Act or (ii) making such disclosure to
the Company's stockholders as is reasonably deemed necessary, in the good faith
judgment of the Company's Board of Directors after receipt of advice from
outside legal counsel to the Company that such disclosure is required under
applicable law and that the failure to make such disclosure would cause the
Company's Board of Directors to violate its fiduciary duties to the Company's
stockholders under applicable law.
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<PAGE> 6
(b) Notwithstanding the foregoing, prior to the acceptance of Shares
pursuant to the Offer, each Stockholder may furnish information concerning the
Company's business, properties or assets to any Person pursuant to a
confidentiality agreement with terms no less favorable to such Stockholder and
the Company than those contained in the Confidentiality Agreement, dated March
12, 1999 entered into between Parent and the Company (the "Confidentiality
Agreement") and may negotiate and participate in discussions and negotiations
with such Person concerning an Acquisition Proposal if (x) such entity or group
has on an unsolicited basis submitted a bona fide written proposal to the
Company relating to any such transaction which the Company's Board of Directors
determines in good faith, after receiving advice from a nationally recognized
investment banking firm, represents a superior transaction to the Offer and the
Merger and (y) the Company's Board of Directors determines in good faith, only
after receipt of written advice from outside legal counsel to the Company, that
the failure to provide such information or access or to engage in such
discussions or negotiations would cause the Company's Board of Directors to
violate its fiduciary duties to the Company's stockholders under applicable law
(an Acquisition Proposal which satisfies clauses (x) and (y) being referred to
herein as a "Superior Proposal"). Each Stockholder shall promptly, and in any
event within one (1) business day following receipt of a Superior Proposal,
notify Parent of the receipt of the same and prior to providing any such party
with any material non-public information. Each Stockholder shall promptly
provide to Parent any material non-public information regarding the Company
provided to any other party which was not previously provided to Parent.
(c) Except as set forth herein, no Stockholder shall (i) approve or
recommend or propose to approve or recommend, any Acquisition Proposal or (ii)
enter into any agreement with respect to any Acquisition Proposal.
Notwithstanding the foregoing, prior to the time of acceptance for payment of
Shares in the Offer, each Stockholder may (subject to the terms of this sentence
and the following sentence) enter into an acquisition agreement with respect to
a Superior Proposal, in which event each Stockholder may take any of the actions
set forth in clauses (i) through (ii) of the immediately preceding sentence;
provided, however, that no Stockholder shall enter into an acquisition agreement
with respect to a Superior Proposal unless the Company shall have furnished
Parent with written notice not later than the first to occur of (i) 12:00 noon
three (3) business days in advance of any date that it intends to enter into
such acquisition agreement or (ii) two (2) business days prior to the expiration
of the Offer; and shall have caused its financial and legal advisors to
negotiate with Parent to make such adjustments in the terms and conditions of
this Agreement as would enable the Stockholder to proceed with the Transactions
contemplated herein on such adjusted terms.
SECTION 9. Further Assurances. Each Stockholder shall, upon request of
Parent or the Purchaser, execute and deliver any additional documents and take
such further actions as may reasonably be deemed by Parent or the Purchaser to
be necessary or desirable to carry out the provisions hereof and to vest in
Parent the power to vote those Shares owned by such Stockholder as contemplated
by Section 5 hereof.
SECTION 10. Termination. This Agreement, and all rights and obligations
of the parties hereunder, shall terminate immediately upon the earliest of (a)
the termination of the Merger Agreement in accordance with its terms, (b) the
Effective Time (as defined in the Merger Agreement),
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<PAGE> 7
or (c) written notice by Parent that Parent, in its sole discretion determines
to terminate this Agreement; provided, however, that Section 11 hereof shall
survive any termination of this Agreement.
SECTION 11. Expenses. All fees and expenses incurred by any one party
hereto shall be borne by the party incurring such fees and expenses.
SECTION 12. Public Announcements. The initial press release with
respect to the execution of this Agreement and the Merger Agreement shall be a
joint press release acceptable to Parent, the Purchaser and the Stockholders.
Thereafter, so long as this Agreement is in effect, neither the Parent,
Purchaser, nor the Stockholders, nor any of their respective affiliates shall
issue or cause the publication of any press release or other announcement with
respect to the Merger Agreement, this Agreement or the other Transactions (as
defined in the Merger Agreement) without the prior consultation of the other
party, except as such party believes, after receiving the advice of outside
counsel, may be required by law or by any listing agreement with a national
securities exchange or trading market. Stockholders hereby designate the Company
to represent them in connection with any press releases and announcements.
SECTION 13. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to such terms in the Merger
Agreement.
(b) All notices and other communications hereunder shall be in writing
and shall be deemed given upon (i) transmitter's confirmation of a receipt of a
facsimile transmission, (ii) confirmed delivery by a standard overnight carrier
or when delivered by hand or (iii) the expiration of five (5) business days
after the day when mailed in the United States by certified or registered mail,
postage prepaid, addressed at the following addresses (or at such other address
for a party as shall be specified by like notice):
(A) if to Stanley G. Brannan, to:
c/o Brite Voice Systems, Inc.
250 International Parkway, Suite 300
Heathrow, Florida 32746-5006
Facsimile: 407-357-1410
Telephone: 407-357-1002
(B) if to Sue Brannan, to:
c/o Brite Voice Systems, Inc.
250 International Parkway, Suite 300
Heathrow, Florida 32746-5006
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<PAGE> 8
Facsimile: 407-357-1410
Telephone: 407-357-1002
(C) if to Alan C. Maltz, Individually or as Custodian, to:
29 Chelsea Drive
Livingston, New Jersey 07039
Facsimile: 973-994-6665
Telephone: 973-994-2468
(D) if to Scott A. Maltz, to:
30 Blackhawk Lane
Burlingame, California 94010
Facsimile: _______________
Telephone: 415-344-4810
(E) if to Glenn A. Etherington, to:
c/o Brite Voice Systems, Inc.
250 International Parkway, Suite 300
Heathrow, Florida 32746-5006
Facsimile: 407-357-1410
Telephone: 407-357-1002
(F) if to Leon A. Ferber, to:
c/o Brite Voice Systems, Inc.
40 Shawmut Road
Canton, Massachusetts 02021-1409
Facsimile: 781-828-7886
Telephone: 781-401-1525
(G) if to Ray S. Naeini, to:
c/o Brite Voice Systems, Inc.
250 International Parkway, Suite 300
Heathrow, Florida 32746-5006
Facsimile: 407-357-1410
Telephone: 407-357-1002
(H) if to Donald R. Walsh, to:
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<PAGE> 9
c/o Brite Voice Systems, Inc.
250 International Parkway, Suite 300
Heathrow, Florida 32746-5006
Facsimile: 407-357-1410
Telephone: 407-357-1002
(I) if to John F. Kelsey, III, to:
c/o The Kelsey Group
600 Executive Drive
Princeton, New Jersey 08540
Facsimile: 609-921-2112
Telephone: 609-921-7200
and
(J) if to Parent or the Purchaser, to:
17811 Waterview Parkway
Dallas, Texas 75252
Facsimile: 972-454-8781
Telephone: 972-454-8694
Attention: Vice President and Corporate Counsel
with a copy to:
Thompson & Knight, P.C.
1700 Pacific Avenue
Suite 3300
Dallas, Texas 75201
Facsimile: (214) 969-1751
Telephone: (214) 969-1700
Attention: Sam P. Burford, Jr.
(c) The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
(d) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall be considered one and
the same agreement.
(e) This Agreement (including the Merger Agreement and any other
documents and instruments referred to herein) constitutes the entire agreement,
and supersedes all prior agreements and understandings, whether written and
oral, among the parties hereto with respect to the subject matter hereof.
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<PAGE> 10
(f) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Texas without giving effect to the principles of
conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by, the parties and their respective
successors and assigns, and the provisions of this Agreement are not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
(h) If any term, provision, covenant, restriction or part of the
Agreement herein is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable (either generally or with respect to
certain of the Shares) or against its regulatory policy, the remainder of the
terms, provisions, covenants, restrictions and parts of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired,
invalidated or removed.
(i) Each of the parties hereto acknowledges and agrees that in the
event of any breach of this Agreement, each non-breaching party would be
irreparably and immediately harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto (i) will waive, in any
action for specific performance, the defense of adequacy of a remedy at law and
(ii) shall be entitled, in addition to any other remedy to which they may be
entitled at law or in equity, to compel specific performance of this Agreement
in any action instituted in any state or federal court sitting in Dallas, Texas.
The parties hereto consent to personal jurisdiction in any such action brought
in any state or federal court sitting in Dallas, Texas and to service of process
upon it in the manner set forth in Section 12(b) hereof.
(j) No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Parent, the Purchaser and the Stockholders have
caused this Agreement to be duly executed and delivered as of the date first
written above.
INTERVOICE, INC.
By /s/ DANIEL D. HAMMOND
-------------------------------------
Name: Daniel D. Hammond
--------------------------------
Title: Chairman and Chief Executive
--------------------------------
Officer
--------------------------------
INTERVOICE ACQUISITION SUBSIDIARY III,
INC.
By /s/ ROB-ROY J. GRAHAM
-------------------------------------
Name: Rob-Roy J. Graham
--------------------------------
Title: President
--------------------------------
STOCKHOLDERS
/s/ STANLEY G. BRANNAN
----------------------------------------
Stanley G. Brannan
/s/ SUE BRANNAN
----------------------------------------
Sue Brannan
/s/ ALAN C. MALTZ
----------------------------------------
Alan C. Maltz (on his own behalf and on
behalf of his minor children with
respect to those Shares for which he
acts as custodian)
/s/ SCOTT A. MALTZ
----------------------------------------
Scott A. Maltz
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<PAGE> 12
STOCKHOLDERS (continued)
/s/ GLENN A. ETHERINGTON
----------------------------------------
Glenn A. Etherington
/s/ LEON A. FERBER
----------------------------------------
Leon A. Ferber
/s/ RAY S. NAEINI
----------------------------------------
Ray S. Naeini
/s/ DONALD R. WALSH
----------------------------------------
Donald R. Walsh
/s/ JOHN F. KELSEY, III
----------------------------------------
John F. Kelsey, III
12
<PAGE> 1
EXHIBIT 99.(c)(3)
April 26, 1999
InterVoice, Inc.
17811 Waterview Parkway
Dallas, Texas 75252
Re: Proposed $150,000,000 Senior Secured Credit Facilities
Ladies and Gentlemen:
InterVoice, Inc., a Texas corporation (the "Parent"), has advised Bank of
America National Trust and Savings Association ("Bank of America") and
NationsBanc Montgomery Securities LLC ("NMS") that the Parent intends to create
a wholly-owned subsidiary ("Newco") to acquire the outstanding capital stock
(the "Acquisition") of Brite Voice Systems, Inc. ("Trinity"). Newco will make a
tender offer (the "Tender Offer") for at least a majority of the issued and
outstanding shares of common stock of Trinity pursuant to the certain
Acquisition Agreement and Plan of Merger (the "Merger Agreement") to be dated on
or about April 26, 1999, among the Parent, Newco, and Trinity, and pursuant to
which Newco will be merged with and into Trinity (the "Merger") as soon as is
practicable after completion of the Tender Offer, subject to any necessary
approval of the Merger by the shareholders of Trinity (the survivor of the
Merger).
You have advised us that $150,000,000 in senior debt financing will be
required in order to effect the Acquisition and the Merger, to pay the related
costs and expenses, and to provide funds for ongoing general corporate purposes
of the Parent and Trinity after completion of the Merger, and that no external
financing other than the financing described herein will be required in
connection with the Acquisition and the Merger. References herein to the
"Transaction" shall include the Acquisition, the Merger, the financing described
herein, the refinancing of existing debt, and all other transactions related to
the Acquisition and the Merger.
In connection with the foregoing, Bank of America is pleased to offer to be
the sole and exclusive administrative agent (in such capacity, the
"Administrative Agent") for up to $150,000,000 of Senior Secured Credit
Facilities (the "Credit Facilities") to Newco, and Bank of America is pleased to
offer its commitment to lend up to $150,000,000 of the Credit Facilities, upon
and subject to the terms and conditions of this letter and the Summary of Terms
and Conditions attached hereto (the "Summary of Terms"). NMS is pleased to
advise you of its willingness, as sole and exclusive Lead Arranger and Book
Manager for the Credit Facilities, to use its best efforts to form a syndicate
of financial institutions (the "Lenders") reasonably acceptable to the Parent
and Newco for the Credit Facilities.
COMMITMENT LETTER - Page 1
<PAGE> 2
Bank of America will act as sole and exclusive Administrative Agent for the
Credit Facilities and NMS will act as sole and exclusive Lead Arranger and Book
Manager for the Credit Facilities. No additional agents, co-agents, or arrangers
will be appointed and no other titles will be awarded without the prior written
approval of Bank of America and NMS, subject to the further provisions hereof.
NMS intends to commence syndication efforts promptly upon Newco's
commencement of the Tender Offer or other publicly disclosed agreement with
Trinity regarding the Acquisition, and the Parent agrees to actively assist, and
to cause Newco and Trinity to assist, NMS in achieving a syndication of the
Credit Facilities that is satisfactory to NMS and Bank of America. Such
assistance shall include, as applicable, (a) the Parent providing and causing
its advisors to provide NMS, Bank of America, and the other Lenders, upon
request, with all information reasonably deemed necessary by NMS and Bank of
America to complete the syndication, including, but not limited to, information
and evaluations prepared by the Parent, Newco, and Trinity and their advisors,
or on their behalf, relating to the Transaction, (b) assistance in the
preparation of an information package for delivery to potential syndicate
members and participants to be used in connection with the syndication, (c) the
Parent using commercially reasonable efforts to ensure that the syndication
efforts benefit materially from its existing lending relationships, and (d)
otherwise assisting NMS and Bank of America in their syndication efforts,
including, without limitation, by making senior management and advisors of the
Parent, Newco, and Trinity and their subsidiaries available from time to time to
attend and make presentations regarding the business and prospects of the Parent
and Trinity and their subsidiaries, as appropriate, at one or more meetings of
prospective Lenders.
Bank of America and NMS agree to consult with the Parent with respect to
syndication of the Credit Facilities. Notwithstanding the foregoing, it is
understood and agreed that Bank of America and NMS will manage and control all
aspects of the syndication, including, without limitation, (a) decisions as to
the selection of proposed Lenders and any titles offered to proposed Lenders,
(b) when commitments will be accepted, and (c) the final allocations of the
commitments among the Lenders. It is understood that no Lender participating in
the Credit Facilities will receive compensation from the Parent or Newco in
order to obtain its commitment, except on the terms contained herein and in the
Summary of Terms. It is also understood and agreed that the amount and
distribution of the fees among the Lenders will be at the sole discretion of
Bank of America and NMS and that any syndication prior to execution of the
definitive documentation for the Credit Facilities will reduce the commitment of
Bank of America.
In the event that such syndication cannot be achieved in a manner
satisfactory to Bank of America and NMS under the structure outlined in the
Summary of Terms, the Parent agrees, and it will cause Newco to agree, that Bank
of America and NMS shall be entitled, in consultation with the Parent and Newco,
to change the pricing, structure, or other terms of the Credit Facilities if
Bank of America and NMS determine that such changes are advisable to ensure a
successful syndication or an optimal credit structure. A successful syndication
would be one in which Bank of America is able to achieve its targeted hold level
of $30,000,000 for the Credit Facilities. The agreement in this paragraph shall
survive closing of the Credit Facilities.
COMMITMENT LETTER - Page 2
<PAGE> 3
The commitment of Bank of America hereunder and the agreement of NMS to
provide the services described herein are subject to the satisfaction of each of
the following conditions precedent in a manner acceptable to Bank of America and
NMS in their sole discretion: (a) each of the terms and conditions set forth
herein and in the Summary of Terms; (b) the absence of a material breach of any
representation, warranty, or agreement of the Parent set forth herein; (c)
execution by the Parent, Newco, Trinity, and/or other appropriate parties of
such agreements and other related documentation as required to consummate the
Transaction (collectively, the "Transaction Documents") and, as appropriate,
filing of such Transaction Documents with the Securities and Exchange
Commission, all of such Transaction Documents which shall be in form and
substance reasonably acceptable to Bank of America and NMS; (d) completion of
the Transaction subject only to funding of the Credit Facilities as required to
complete the Transaction; (e) satisfaction of Bank of America and NMS that prior
to and during the syndication of the Credit Facilities there shall be no
competing offering, placement, or arrangement of any debt securities or bank
financing by or on behalf of the Parent, Newco, or Trinity; (f) the negotiation,
execution, and delivery of definitive documentation for the Credit Facilities
consistent with the Summary of Terms and otherwise satisfactory to Bank of
America and NMS; (g) since the date hereof, no material adverse change in or
material disruption of conditions in the financial, banking, or capital markets
which Bank of America and NMS, in their sole discretion, deem material in
connection with the syndication of the Credit Facilities shall have occurred and
be continuing; (h) no material adverse change in the business, assets,
liabilities (actual or contingent), operations, condition, (financial or
otherwise), or prospects of the Parent, Newco, or Trinity, in each case together
with its subsidiaries taken as a whole, or in the facts and information
regarding such entities as represented to date shall have occurred or become
known to Bank of America or NMS; and (i) neither Bank of America nor NMS
becoming aware after the date hereof of any information or other matter which
reflects that any of the information delivered to Bank of America or NMS or any
representation or warranty set forth in the following paragraph is false or
misleading in any material respect, or in the continuing review by Bank of
America and NMS of the Parent, Newco, and Trinity, and their respective
subsidiaries, additional information or developments concerning conditions or
events with respect to the Parent, Newco, or Trinity which reflects that any of
the information delivered to Bank of America or NMS or any representation or
warranty set forth in the following paragraph is false or misleading in any
material respect (in any such case either Bank of America or NMS may, in its
sole discretion, (A) suggest alternative financing amounts or structures that
ensure adequate protection for the Lenders or (B) terminate this letter and any
commitment or undertaking hereunder).
The Parent hereby represents, warrants, and covenants that (a) all
information, other than the Projections (as defined below), which has been or is
hereafter made available to Bank of America or NMS or the Lenders by the Parent
or any of its representatives in connection with the transactions contemplated
hereby (the "Information") is and will be complete and correct in all material
respects and does not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements contained
therein not misleading, and (b) all financial projections concerning the Parent,
Newco, and Trinity and their respective subsidiaries that have been or are
hereafter made available to Bank of America or NMS or the Lenders by the Parent
or any of its representatives (the "Projections") have been or will be prepared
in good faith based upon assumptions the Parent believes to be reasonable. The
Parent agrees to furnish Bank of America and NMS with such Information and
Projections as Bank of America or NMS may reasonably request
COMMITMENT LETTER - Page 3
<PAGE> 4
and to supplement the Information and the Projections from time to time until
the closing date for the Credit Facilities so that the representations,
warranties, and covenants in the preceding sentence are correct on such closing
date. The Parent understands that in arranging and syndicating the Credit
Facilities, Bank of America and NMS will be using and relying on the Information
and the Projections without independent verification thereof.
By acceptance of this offer, the Parent agrees to pay all reasonable
out-of-pocket fees and expenses (including, without limitation, reasonable
attorneys' fees and expenses, the allocated cost of internal counsel, and due
diligence expenses) incurred before or after the date hereof by Bank of America
and NMS in connection with the Credit Facilities, the syndication thereof, and
the other transactions contemplated hereby.
THE PARENT AGREES TO INDEMNIFY AND HOLD HARMLESS BANK OF AMERICA, NMS, EACH
LENDER, AND EACH OF THEIR AFFILIATES AND THEIR DIRECTORS, OFFICERS, EMPLOYEES,
ADVISORS, AND AGENTS (EACH, AN "INDEMNIFIED PARTY") FROM AND AGAINST (AND WILL
REIMBURSE EACH INDEMNIFIED PARTY AS THE SAME ARE INCURRED) ANY AND ALL LOSSES,
CLAIMS, DAMAGES, LIABILITIES, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, THE
REASONABLE FEES AND EXPENSES OF COUNSEL AND THE ALLOCATED COST OF INTERNAL
COUNSEL) THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED AGAINST ANY INDEMNIFIED
PARTY, IN EACH CASE ARISING OUT OF OR IN CONNECTION WITH OR BY REASON OF
(INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH ANY INVESTIGATION,
LITIGATION, OR PROCEEDING OR PREPARATION OF A DEFENSE IN CONNECTION THEREWITH)
(A) THE TRANSACTION (AS DEFINED HEREIN) OR ANY SIMILAR TRANSACTION AND ANY OF
THE OTHER TRANSACTIONS CONTEMPLATED THEREBY, OR (B) THE CREDIT FACILITIES OR ANY
OTHER FINANCINGS, OR ANY USE MADE OR PROPOSED TO BE MADE WITH THE PROCEEDS
THEREOF (INCLUDING, WITHOUT LIMITATION, ANY CLAIM ARISING OUT OF THE NEGLIGENCE
OF ANY INDEMNIFIED PARTY), UNLESS AND ONLY TO THE EXTENT THAT, AS TO ANY
INDEMNIFIED PARTY, IT SHALL BE DETERMINED IN A FINAL, NONAPPEALABLE JUDGMENT BY
A COURT OF COMPETENT JURISDICTION THAT SUCH LOSSES, CLAIMS, DAMAGES,
LIABILITIES, OR EXPENSES RESULTED PRIMARILY FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF SUCH INDEMNIFIED PARTY OR FROM THE INTENTIONAL BREACH BY SUCH
INDEMNIFIED PARTY OF ITS COMMITMENT UNDER THE TERMS OF THIS LETTER. IN THE CASE
OF ANY INVESTIGATION, LITIGATION, OR PROCEEDING TO WHICH THE INDEMNITY IN THIS
PARAGRAPH APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH
INVESTIGATION, LITIGATION, OR PROCEEDING IS BROUGHT BY THE PARENT, NEWCO,
TRINITY, OR ANY OF THEIR SHAREHOLDERS OR CREDITORS OR ANY OTHER PARTY, OR AN
INDEMNIFIED PARTY AND WHETHER OR NOT THE TRANSACTION IS CONSUMMATED. THE PARENT
AGREES THAT NO INDEMNIFIED PARTY SHALL HAVE ANY LIABILITY TO THE PARENT OR ITS
SUBSIDIARIES OR AFFILIATES OR TO ITS OR THEIR RESPECTIVE SECURITY HOLDERS OR
CREDITORS FOR ANY INDIRECT OR CONSEQUENTIAL DAMAGES ARISING OUT OF, RELATED TO,
COMMITMENT LETTER - Page 4
<PAGE> 5
OR IN CONNECTION WITH THE TRANSACTION, THE CREDIT FACILITIES, OR ANY
OTHER FINANCINGS.
The provisions of the immediately preceding two paragraphs shall remain in
full force and effect regardless of whether any definitive documentation for the
Credit Facilities shall be executed and notwithstanding the termination of this
letter or any commitment or undertaking hereunder.
THIS LETTER AND THE FEE LETTER SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF TEXAS. EACH OF BANK OF AMERICA, NMS, AND THE PARENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
LETTER, THE SUMMARY OF TERMS, THE FEE LETTER, THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY, OR THE ACTIONS OF BANK OF AMERICA OR NMS IN THE NEGOTIATION,
PERFORMANCE, OR ENFORCEMENT HEREOF.
This letter, together with the Summary of Terms and the Fee Letter, are the
only agreements that have been entered into among Bank of America, NMS, and the
Parent with respect to the Credit Facilities and set forth the entire
understanding of the parties with respect thereto. This letter may be modified
or amended only by the written agreement of Bank of America, NMS, and the
Parent. This letter is not assignable by the Parent without the prior written
consent of Bank of America and NMS and is intended to be solely for the benefit
of the parties hereto and the Indemnified Parties.
The offer set forth in this letter will expire at 12:00 midnight, Dallas,
Texas time on April 26, 1999 unless the Parent executes this letter and the Fee
Letter and returns them to Bank of America and NMS, respectively, prior to that
time (which may be by facsimile transmission), whereupon this letter and the Fee
Letter (each of which may be signed in one or more counterparts) shall become
binding agreements. Thereafter, the undertaking and commitment evidenced hereby
will expire on the earliest to occur of (a) the closing of the Transaction
without the use of the Credit Facilities, (b) the acceptance by Trinity or any
of its affiliates of an offer for all or any substantial part of the capital
stock or assets of Trinity other than the offer contemplated hereby, or (c) June
30, 1999, unless definitive documentation for the Credit Facilities is executed
and delivered prior to such date and all conditions to initial funding of the
Credit Facilities pursuant to such documentation have been met by such date.
THIS WRITTEN AGREEMENT (WHICH INCLUDES THE SUMMARY OF TERMS AND CONDITIONS)
AND THE FEE LETTER REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
COMMITMENT LETTER - Page 5
<PAGE> 6
We are pleased to have the opportunity to work with you in connection with
this important financing.
Very truly yours,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By: /s/ Michael J. McCutchin
--------------------------------------
Michael J. McCutchin
Managing Director
NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ Joseph Siegel, Jr.
--------------------------------------
Joseph Siegel, Jr.
Managing Director
COMMITMENT LETTER - Page 6
<PAGE> 7
Accepted and Agreed to
as of April 26, 1999:
INTERVOICE, INC.
By: /s/ ROB-ROY J. GRAHAM
---------------------------------------
Name: Rob-Roy J. Graham
-------------------------------------
Title: Chief Financial Officer
------------------------------------
COMMITMENT LETTER - Page 7
<PAGE> 8
SUMMARY OF TERMS AND CONDITIONS
INTERVOICE, INC.
PROPOSED $150,000,000 SENIOR SECURED CREDIT FACILITIES
BORROWER: InterVoice Acquisition Subsidiary III, Inc., a Nevada
corporation ("Newco").
InterVoice, Inc., a Texas corporation (the "Parent") will
form a wholly-owned subsidiary, Newco, which will acquire
(the "Acquisition") the outstanding capital stock of and be
merged with and into Brite Voice Systems, Inc. a Kansas
corporation ("Trinity"). Newco will make a tender offer (the
"Tender Offer") for at least a majority of the issued and
outstanding shares of common stock (the "Shares") of
Trinity, pursuant to the certain Acquisition Agreement and
Plan of Merger dated on or about April 26, 1999 (the "Merger
Agreement"), among the Parent, Newco, and Trinity. The
Merger Agreement also provides for the merger (the "Merger")
of Newco and Trinity as soon as is practicable after
completion of the Tender Offer, subject to any necessary
approval of the Merger by the shareholders of Trinity (the
survivor of the Merger).
GUARANTORS: The Credit Facilities (as defined below) shall be guaranteed
by the Parent and each material existing and future direct
and indirect domestic subsidiary (individually a
"Subsidiary" and collectively the "Subsidiaries") of the
Parent, excluding Newco and Trinity (collectively, the
"Guarantors"); provided that neither Trinity nor any of its
subsidiaries shall be required to guarantee the Credit
Facilities prior to the Merger, and after the Merger Trinity
shall be the borrower under the Credit Facilities. All
guarantees shall be guarantees of payment and not of
collection.
ADMINISTRATIVE
AGENT: Bank of America National Trust and Savings Association (the
"Administrative Agent") will act as sole and exclusive
administrative and collateral agent. The Administrative
Agent will negotiate with the Parent and Newco, act as the
primary contact for the Parent and Newco, and perform all
other duties associated with the role of exclusive
administrative agent. No other agents or co-agents may be
appointed without the prior written consent of the
Administrative Agent, NMS (as defined below), and the
Parent.
LEAD ARRANGER AND
BOOK MANAGER: NationsBanc Montgomery Securities LLC ("NMS").
LENDERS: A syndicate of financial institutions (including Bank of
America National Trust and Savings Association) arranged by
NMS, which institutions shall be acceptable to the Parent
and the Administrative Agent (collectively, the "Lenders").
CREDIT FACILITIES: An aggregate principal amount of up to $150,000,000 will be
available upon the terms and conditions hereinafter set
forth:
SUMMARY OF TERMS AND CONDITIONS - Page 1
<PAGE> 9
Tender Facility: $125,000,000 tender facility (the "Term
Loan Facility"). The Term Loan Facility will be available to
Newco in order to fund the Tender Offer and the Merger. The
proceeds of loans under the Term Loan Facility will be used
only to finance in part (a) the cash portion of the purchase
price of Trinity's capital stock as follows: (i) acquisition
by Newco of not less than the Minimum Shares (as defined
below) of Trinity pursuant to the Tender Offer and (ii) not
less than 100% of the outstanding capital stock of Trinity
pursuant to the Merger, and (b) the payment of interest,
fees, and other expenses incurred in connection with the
Tender Offer and the Merger.
Revolving Credit Facility: $25,000,000 revolving credit
facility (the "Revolving Credit Facility"), which will
include a $5,000,000 sublimit for the issuance of standby
and commercial letters of credit (each a "Letter of
Credit"). Letters of Credit will be issued by Bank of
America National Trust and Savings Association (in such
capacity, the "Fronting Bank"), and each Lender will
purchase an irrevocable and unconditional participation in
each Letter of Credit.
The Revolving Credit Facility and the Term Loan Facility are
collectively referred to herein as the "Credit Facilities".
PURPOSE: Subject to the other terms of this Summary of Terms and
Conditions, the proceeds of the Credit Facilities shall be
used as follows: (a) the Revolving Credit Facility shall be
used, in part, for an advance to the Parent which shall be
used to repay the indebtedness of the Parent under that
certain Amended and Restated Loan Agreement dated as of
November 18, 1998 (the "Existing Credit Agreement") between
NationsBank, N.A. and the Parent, up to $10,000,000 of (i)
the cash portion of the Tender Offer and the Merger and (ii)
part of the fees and expenses incurred in connection with
the Acquisition and the Merger (the "Transaction Costs"),
and for working capital and other general corporate purposes
of the Parent and its Subsidiaries; and (b) the Term Loan
Facility shall be used to pay (i) the cash portion of the
purchase price for Trinity in the Tender Offer and the
Merger pursuant to the Merger Agreement and (ii) part of the
Transaction Costs.
CLOSING: The execution of definitive loan documentation, to occur on
or before June 30, 1999 ("Closing").
INTEREST RATES: As set forth in Addendum I.
MATURITY: The Revolving Credit Facility shall terminate and all
amounts outstanding thereunder shall be due and payable in
full upon the earlier to occur of (a) the termination,
whether by acceleration or otherwise, or maturity of the
Term Loan Facility or (b) August 31, 2003.
The Term Loan Facility shall be subject to repayment
according to the Scheduled Amortization with the first
payment due on May 31, 2000 and continuing on the last day
of each August, November, February, and May
SUMMARY OF TERMS AND CONDITIONS - Page 2
<PAGE> 10
thereafter with the final payment of all amounts outstanding
thereunder being due and payable in full on August 31, 2003.
AVAILABILITY/
SCHEDULED
AMORTIZATION: Revolving Credit Facility: Subject to compliance with
applicable law, including, without limitation, Regulation U
of the Federal Reserve ("Regulation U"), loans under the
Revolving Credit Facility ("Revolving Credit Loans") may be
made, and Letters of Credit may be issued, in each case
subject to availability.
Term Loan Facility: Subject to compliance with applicable
law, including, without limitation, Regulation U, loans made
under the Term Loan Facility ("Term Loans") will be
available up to the aggregate amount of the Term Loan
Facility as follows: (a) at the time of Closing, for an
amount equal to the cash portion of the aggregate purchase
price of the shares of Trinity's capital stock tendered
pursuant to the Tender Offer and (b) at the time of the
Merger, for an amount equal to the unpaid cash portion of
the purchase price for Trinity and to pay any unpaid
Transaction Costs. The Term Loan Facility will be subject to
quarterly amortization of principal, based upon the annual
amounts set forth below (the "Scheduled Amortization").
<TABLE>
<CAPTION>
Scheduled Amortization
----------------------
<S> <C>
May 31, 2000 $ 5,000,000
August 31, 2000 $ 5,000,000
November 30, 2000 $ 7,500,000
February 28, 2001 $ 7,500,000
May 31, 2001 $ 7,500,000
August 31, 2001 $ 7,500,000
November 30, 2001 $10,000,000
February 28, 2002 $10,000,000
May 31, 2002 $10,000,000
August 31, 2002 $10,000,000
November 30, 2002 $10,000,000
February 28, 2003 $10,000,000
May 31, 2003 $12,500,000
August 31, 2003 $12,500,000
</TABLE>
Notwithstanding anything else herein or elsewhere to the
contrary, unless waived by the Required Lenders (as defined
in the loan documentation), all outstanding principal and
all accrued and unpaid interest under the Credit Facilities
shall be immediately due and payable if (a) the Merger does
not occur upon the later to occur of September 28, 1999 or
within 120 days after the Closing or (b) the Parent or Newco
takes any action to terminate the Merger Agreement or elects
for any other reason not to consummate the Merger.
SUMMARY OF TERMS AND CONDITIONS - Page 3
<PAGE> 11
SECURITY: Concurrently with the initial advance under the Credit
Facilities, the Administrative Agent (on behalf of the
Lenders) shall receive a first priority perfected security
interest in (a) all of the capital stock of each of the
domestic Subsidiaries of the Parent (including, without
limitation, Newco), and 65% of the capital stock of each
first tier foreign Subsidiary of the Parent, which capital
stock shall not be subject to any other lien or encumbrance
and (b) subject to permitted liens, all other present and
future material assets and properties of the Parent and its
material domestic Subsidiaries (including, without
limitation, accounts receivable and proceeds, inventory,
real property, machinery and equipment, contracts,
trademarks, copyrights, patents, license rights, and general
intangibles), including, without limitation, Trinity and its
subsidiaries; provided that Trinity and its subsidiaries
shall not be required to pledge such assets and properties
until completion of the Merger. Without limiting the
foregoing, but subject to the requirements of Regulation U,
all capital stock of Trinity owned by Newco or the Parent
shall be pledged as collateral for the Credit Facilities.
The priority of the lien and security interest of the
Administrative Agent shall be supported by such landlord and
mortgagee waivers, warehousemen and bailee letters, third
party consents, intercreditor agreements, and other
agreements as shall be reasonably required by the
Administrative Agent, in each case in form and substance
reasonably satisfactory to the Administrative Agent.
MANDATORY
PREPAYMENTS AND
COMMITMENT
REDUCTIONS: In addition to the Scheduled Amortization, the Term Loan
Facility will be prepaid by an amount equal to (a) 100% of
the net cash proceeds of all asset sales by the Parent or
any Subsidiary (including, without limitation, sales of
stock of Subsidiaries), subject to limitations for
individual and cumulative asset sales in the ordinary course
of business and de minimus baskets and reinvestment
provisions to be agreed upon, and net of selling expenses
and taxes to the extent such taxes are paid, (b) 100% of the
net cash proceeds from the issuance of any debt (excluding
certain permitted debt to be agreed upon) by the Parent or
any Subsidiary of the Parent, and (c) 100% of the net cash
proceeds from the issuance of equity (excluding equity
issued exclusively as payment for permitted acquisitions and
asset purchases) by the Parent or any Subsidiary of the
Parent if the Parent's Leverage Ratio (as defined below) is
greater than 1.00 to 1.00. In addition to the prepayments
set forth above and in the event that the Term Loans have
been fully repaid any prepayment required pursuant to clause
(a) above shall be applied to the ---------- Revolving
Credit Loans with a corresponding reduction of the Revolving
Credit Facility commitment.
In addition to the Scheduled Amortization, the Term Loan
Facility will be prepaid annually, within 120 days following
the Parent's fiscal year end, by an amount equal to the
lesser of (a) 75% of the Parent's consolidated "excess cash
flow" or (b) an amount required to reduce the ratio of the
Parent's
SUMMARY OF TERMS AND CONDITIONS - Page 4
<PAGE> 12
consolidated Funded Debt (as to be defined in the loan
documentation) to EBITDA (as defined below) (such ratio is
referred to hereinafter as the "Leverage Ratio") to 1.0 to
1.0. "Excess cash flow" will be defined in the loan
documentation as the Parent's consolidated EBITDA, minus
interest expense, minus cash income taxes, minus capital
expenditures, minus scheduled payments of principal on
funded debt, minus optional prepayments of principal, minus
that portion of cash non-recurring charges which were added
back in determining EBITDA; provided that excess cash flow
shall not include, in the aggregate for the term of the
Credit Facilities and without duplication, the first
$10,000,000 of such calculation to the extent such amount is
used to repay outstanding principal under the Revolving
Facility. The calculation of excess cash flow shall take
into consideration such permitted activities of the Parent,
Newco, and Trinity as required to give effect to cash
transactions otherwise affecting excess cash flow (i.e.
permitted cash acquisitions, etc.).
The prepayments described above shall be applied to reduce
the Term Loans in the inverse order of maturity of the
remaining installments of principal of the Term Loans.
OPTIONAL
PREPAYMENTS AND
COMMITMENT
REDUCTIONS: Newco may prepay the Credit Facilities in whole or in part
at any time without penalty, subject to reimbursement of the
Lenders' breakage and redeployment costs in the case of
prepayment of LIBOR borrowings. Optional prepayments shall
be applied ratably to reduce each remaining installment of
principal on the Term Loans. The unutilized portion of any
commitment under the Credit Facilities in excess of the
stated amount of all Letters of Credit may be irrevocably
canceled in whole or in part.
CONDITIONS PRECEDENT
TO CLOSING AND INITIAL
FUNDING: The Closing (and the initial funding) of the Credit
Facilities will be subject to satisfaction of conditions
precedent usual and customary for leveraged financings of
this type as applied by the Administrative Agent acting in
its capacity as a lender generally, including, but not
limited to, the following:
(i) The negotiation, execution, and delivery of
definitive documentation for the Credit Facilities
satisfactory to NMS, the Administrative Agent, and
the Lenders, which shall include, without being
limited to (a) satisfactory opinions of counsel to
Newco, the Parent, and each other Guarantor (which
shall cover, among other things, authority,
legality, validity, binding effect, enforceability
of the documents for the Credit Facilities, and
compliance with applicable law, including, without
limitation, Regulation U) and of local counsel and
such other customary closing documents as the
Administrative Agent shall reasonably request, and
(b) satisfactory evidence that the Administrative
Agent (on behalf of the Lenders)
SUMMARY OF TERMS AND CONDITIONS - Page 5
<PAGE> 13
holds a perfected, first priority lien in all of
the collateral for the Credit Facilities, subject
to no other liens except for permitted liens to be
determined.
(ii) The Merger Agreement (including, without
limitation, all schedules and exhibits thereto)
regarding Trinity and all other documents and
materials filed publicly by the Parent, Newco, or
Trinity (collectively, the "Merger Documents")
shall have been furnished to the Administrative
Agent in their final form (as reviewed by the
Administrative Agent on April 26, 1999), and shall
provide for an aggregate consideration consisting
of cash and a variable amount of the Parent's
common stock, with the cash portion of the
purchase price not to exceed $123,000,000. The
Merger Documents shall have been consummated in
accordance with the terms thereof and in
compliance with applicable law and regulatory
approvals. The Merger Documents shall not have
been altered, amended, or otherwise changed or
supplemented in any material respect or any
material condition therein waived without the
prior written consent of the Administrative Agent.
(iii) There shall have been validly tendered, and Newco
shall have accepted for purchase, not less than
the minimum amount of shares of Trinity's capital
stock pursuant to the charter and constituent
documents of Trinity and according to applicable
law (the "Minimum Shares") so that the shares
owned by Newco after completion of the Tender
Offer shall at all times be an amount in excess of
the number required to approve the Merger. The
tender and purchase of such shares shall have been
pursuant to and in accordance with, documentation
reasonably satisfactory to the Administrative
Agent and there not having been any material
change in the shares of Trinity outstanding as of
April 26, 1999, other than in connection with the
exercise of options outstanding on such date.
(iv) The Acquisition and Merger shall be in compliance
with applicable law, including, without
limitation, regulations of the Securities and
Exchange Commission, and shall be effective in a
manner to be exempt from Sections 17-12,101
through 17-12,104 of the Kansas Statutes Annotated
or any other similar control share statute.
(v) Any "poison pill" rights of Trinity shall have
been redeemed by the board of directors of
Trinity, or the Administrative Agent and the
Lenders shall be satisfied that they have been
invalidated or otherwise will not be triggered.
(vi) The corporate capital and ownership structure
(including, without limitation, articles of
incorporation and by-laws), shareholders
agreements, and management of the Parent and its
Subsidiaries (after giving effect to the
Acquisition) including, without limitation,
the execution of employment contracts, shall be
satisfactory to the Administrative Agent.
SUMMARY OF TERMS AND CONDITIONS - Page 6
<PAGE> 14
(vii) All governmental, shareholder, and third party
consents (including, without limitation,
Hart-Scott Rodino clearance) and approvals
necessary for the consummation of the Tender
Offer, the Merger, the related financings, and the
other transactions contemplated hereby shall have
been obtained, all such consents and approvals
shall be in force and effect, and all applicable
waiting periods shall have expired without any
action being taken by any authority that could
restrain, prevent, or impose any material adverse
conditions on the Tender Offer, the Acquisition,
or the Merger or such other transactions or that
could seek or threaten any of the foregoing, and
no law or regulation shall be applicable which
could have such effect.
(viii) There shall not exist (a) any order, decree,
judgment, ruling, or injunction which restrains
the consummation of the Merger in the manner
contemplated by the Merger Documents, and (b) any
pending or threatened action, suit, investigation,
or proceeding, which would reasonably be expected
to have a material adverse effect on the Borrower
and its Subsidiaries (including, without
limitation, Trinity and its subsidiaries (direct
or indirect)) taken as a whole, any transaction
contemplated hereby or the ability of the Borrower
and its Subsidiaries or any other Guarantor to
perform its obligations under the documentation
for the Credit Facilities or the ability of the
Lenders to exercise their rights thereunder.
(ix) There shall not have occurred a material adverse
change in the business, assets, liabilities
(actual or contingent), operations, condition
(financial or otherwise), or prospects of the
Parent and its Subsidiaries (taken as a whole)
since February 28, 1999, or Trinity and its
subsidiaries (direct and indirect and taken as a
whole) since December 31, 1998, or in the facts
and information regarding such entities as
represented to date.
(x) No default or event of default shall have occurred
and be continuing under any capital stock or debt
of the Borrower, Newco, or Trinity or any of their
subsidiaries (direct or indirect), either before
or after giving effect to the Tender Offer and the
Merger, or would result from the transactions
contemplated hereby.
(xi) The Parent, Newco, Trinity, and their respective
subsidiaries (direct and indirect), after giving
effect to the Tender Offer and the Merger as
contemplated hereby, and after the initial funding
of the Credit Facilities, will have no material
indebtedness other than as set forth in a schedule
attached hereto.
SUMMARY OF TERMS AND CONDITIONS - Page 7
<PAGE> 15
(xii) The Administrative Agent shall be satisfied that
the amount of committed financing available to
Newco shall be sufficient to meet the ongoing
financing needs of the Parent and its Subsidiaries
after giving effect to the Merger and there shall
be no less than $15,000,000 of availability under
the Revolving Credit Facility at Closing after
giving effect to the Acquisition and all
borrowings under the Revolving Credit Facility on
such date.
(xiii) Newco shall have entered into interest rate
protection agreements (or shall enter into such
agreements within 120 days of Closing)
satisfactory to the Administrative Agent, which
agreements shall provide coverage in an amount
equal to at least $50,000,000 and for a duration
of at least three (3) years from Closing.
(xiv) The Administrative Agent, NMS, any Lender, and/or
their affiliates shall have received all fees and
expenses required to be paid on or before Closing.
(xv) The termination of the Parent's and Trinity's
respective existing credit facilities.
(xvi) The Parent shall have received opinions from
Trinity's legal counsel in form and substance and
with regard to such matters as shall be reasonably
acceptable to the Administrative Agent.
ON-GOING CONDITIONS
PRECEDENT: The making of the initial loans under the Term
Loan Facility and all other loans under the Credit
Facilities will be conditioned upon (a) all
representations and warranties in all credit and
security documents (including, without limitation,
the material adverse change and litigation
representations, which will be consistent with the
conditions set forth in clause (viii) and clause
(ix) under "Conditions Precedent to Closing and
Initial Funding" above, and compliance with law
and regulatory requirements representations) being
true and correct in all material respects, (b)
there being no default or event of default in
existence at the time of, or after giving effect
to the making of, such initial loan or other loan,
and (c) except as disclosed in the Merger
Documents, no governmental inquiries, injunctions,
or restraining orders instituted or pending, or
any statute or rule enacted, promulgated, entered,
or enforced which would have a material adverse
effect upon Borrower and its Subsidiaries (taken
as a whole) or Trinity and its direct or indirect
subsidiaries (taken as a whole).
OTHER MATTERS: Newco will be prohibited from engaging in any
business activity other than related to the Tender
Offer, the Merger, and entering into the loan
documentation.
SUMMARY OF TERMS AND CONDITIONS - Page 8
<PAGE> 16
REPRESENTATIONS AND
WARRANTIES: Usual and customary for leveraged financings
generally and for this transaction in particular,
including, but not limited to, the following: (a)
corporate existence and status; (b) corporate
power and authority/enforceability; (c) no
violation of law or contracts or organizational
documents; (d) no material litigation; (e)
correctness of specified financial statements and
other information and no material adverse change;
(f) no required governmental or third party
approvals other than those which have been
obtained prior to Closing; (g) use of
proceeds/compliance with margin regulations; (h)
status under the Investment Company Act; (i) ERISA
matters; (j) environmental matters; (k) perfected
liens and security interests; (l) payment of
taxes; (m) accuracy of disclosure; (n) Year 2000
preparedness; (o) consummation of the Acquisition
and the Merger; and (p) compliance with applicable
law.
COVENANTS: Usual and customary for leveraged financings
generally and for this transaction in particular,
including, but not limited to, the following: (a)
delivery of financial statements and other
reports; (b) delivery of compliance certificates;
(c) delivery of notices of default, material
litigation, and material governmental and
environmental proceedings; (d) compliance with
laws (including, without limitation, environmental
laws and ERISA) and material contractual
obligations; (e) payment of taxes; (f) maintenance
of insurance; (g) limitation on liens and negative
pledges; (h) limitation on mergers,
consolidations, and sales of assets; (i)
limitation on incurrence of debt; (j) limitation
on dividends, stock redemptions, and the
redemption and/or prepayment of other debt; (k)
limitation on investments (including, without
limitation, loans and advances) and acquisitions
(with permitted acquisitions to be allowed as
follows: cash consideration for any individual
permitted acquisition shall not exceed $5,000,000
or $10,000,000 for all permitted acquisitions
occurring during the term commencing on the
Closing date and ending on August 31, 2003, and
stock consideration for any individual permitted
acquisition shall not exceed $25,000,000 or
$50,000,000 for all permitted acquisitions
occurring during the term commencing on the
Closing date and ending on August 31, 2003;
provided that the aggregate levels of permitted
acquisitions set forth in this clause (k) will be
eliminated and cash consideration for permitted
acquisitions shall be increased to $10,000,000 for
any single acquisition and stock consideration for
permitted acquisitions shall be increased to
$50,000,000 for any single acquisition if the
Parent's Leverage Ratio is equal to or less than
1.0 to 1.0 after giving effect to any such planned
acquisition); (l) annual limitation on capital
expenditures of $20,000,000; (m) limitation on
transactions with affiliates; and (n) Year 2000
compliance.
SUMMARY OF TERMS AND CONDITIONS - Page 9
<PAGE> 17
Key financial covenants, calculated based on the
Parent's consolidated financial statements and
otherwise prepared in accordance with GAAP, shall
be:
Adjusted Net Worth -- Adjusted Net Worth
shall not be less than the sum of (i)
75% of Adjusted Net Worth on February
28, 1999, plus (ii) 75% of any increase
in Adjusted Net Worth which is
attributable to the Acquisition or the
Merger (or minus 100% of any decrease in
Adjusted Net Worth attributable to the
acquisition or the Merger, as
applicable), plus (iii) 75% of positive
Net Income for each completed fiscal
quarter from and after February 28,
1999, plus (iv) 100% of any increase in
Adjusted Net Worth attributable to
issuance of equity securities of the
Parent or any Subsidiary from and after
February 28, 1999 other than shares to
be issued in connection with the
Acquisition and the Merger.
Leverage Ratio -- Leverage Ratio as of
any fiscal quarter end (calculated for
the preceding four fiscal quarters) not
to exceed, (i) 2.5 to 1.0 from the
Closing date through November 30, 1999,
(ii) 2.0 to 1.0 from February 28, 2000
through November 30, 2000, and (iii) 1.5
to 1.0 from February 28, 2001 and
thereafter.
Fixed Charge Coverage Ratio -- Fixed
Charge Coverage Ratio as of any fiscal
quarter end (calculated for the
preceding four fiscal quarters) to not
be less than (i) 1.50 to 1.0 from the
Closing date through November 30, 2000,
and (ii) 1.25 to 1.0 from February 28,
2001 and thereafter.
The following definitions shall apply in
connection with the preceding calculations:
"Adjusted Cash Flow" -- for the period in
question, EBITDA for such period, minus the sum of
(i) capital expenditures to the extent paid during
such period, and (ii) taxes to the extent paid
during such period.
"Adjusted Net Worth" -- as of any date, the
sum of (i) shareholder's equity, plus (ii) any
non-cash, non-recurring charges, minus (iii) any
non-recurring gains, plus (iv) other non-recurring
charges up to $10,000,000 in the aggregate during
the term of the Credit Facilities.
"EBITDA" -- for any period, the sum of (i)
Net Income, plus (ii) taxes to the extent included
in the determination of Net Income, plus (iii)
interest expense to the extent included in the
determination of Net Income, plus (iv) all amounts
attributable to
SUMMARY OF TERMS AND CONDITIONS - Page 10
<PAGE> 18
amortization and/or depreciation of assets to the
extent included in the determination of Net
Income, plus (v) any other non-cash, non-recurring
charges to the extent included in the
determination of Net Income, minus (vi) any other
non-recurring gains to the extent included in the
determination of Net Income, plus (vii) other
non-recurring charges up to $10,000,000 in the
aggregate during the term of the Credit
Facilities.
"Fixed Charge Coverage Ratio" -- as of the
last day of any fiscal quarter, the ratio of (i)
Adjusted Cash Flow for the four fiscal quarters
immediately preceding to (ii) Fixed Charges for
such period.
"Fixed Charges" -- for any period, the sum of
(i) cash interest expense to the extent included
in the determination of Net Income for such period
and paid during such period, plus (ii) scheduled
principal payments on funded debt.
"Leverage Ratio" -- as of the last day of any
fiscal quarter, the ratio of (i) funded debt to
(ii) EBITDA for the preceding four fiscal
quarters.
"Net Income" -- for any period, net income
after taxes.
EVENTS OF DEFAULT: Usual and customary for leveraged financings
generally and for this transaction in particular,
including, but not limited to, the following: (a)
nonpayment of principal; (b) nonpayment of
interest, fees, or other amounts within five days
of their due date; (c) violation of certain
covenants (negative covenants, agreement to
maintain corporate existence, inspection rights,
use of proceeds); (d) passage of thirty days after
notice of violation of other covenants without a
cure of such violation occurring, (e) inaccuracy
of representations and warranties; (f)
cross-default to other material agreements and
indebtedness; (g) bankruptcy and other insolvency
events; (h) material judgments; (i) ERISA matters;
(j) actual or asserted invalidity of any loan
documentation or security interests; and (k)
change of control.
ASSIGNMENTS AND
PARTICIPATIONS: Each Lender will be permitted to make assignments
in minimum amounts of $10,000,000 (non-ratably
with respect to the Credit Facilities) to other
financial institutions approved by Newco (so long
as no event of default under the Credit Facilities
or incipient default has occurred and is
continuing) and the Administrative Agent, which
approval shall not be unreasonably withheld. The
Lenders will be permitted to sell participations
with voting rights limited to significant matters
such as changes in amount, rate, and maturity date
and releases of all or substantially all of the
collateral and the Guarantors. An assignment fee
of $3,500 shall be payable by the
SUMMARY OF TERMS AND CONDITIONS - Page 11
<PAGE> 19
assigning Lender to the Administrative Agent upon
the effectiveness of any such assignment
(including, but not limited to, an assignment by a
Lender to another Lender).
WAIVERS AND AMENDMENTS: Amendments and waivers of the provisions of the
credit agreement and other definitive credit
documentation will require the approval of Lenders
holding loans and commitments representing more
than 50% of the aggregate amount of loans and
commitments under the Credit Facilities, except
that the consent of all of the Lenders affected
thereby shall be required with respect to (a)
increases in the commitment of such Lenders, (b)
reductions of principal, interest, or fees, (c)
extensions of scheduled maturities or times for
payment, (d) releases of material portions of the
collateral, and (e) releases of all or
substantially all of the Guarantors, excluding the
Parent which shall require approval of all of the
Lenders.
INDEMNIFICATION: Newco shall indemnify the Administrative Agent,
NMS, and the Lenders and their respective
affiliates from and against all losses,
liabilities, claims, damages, or expenses arising
out of or relating to the Acquisition, the Merger,
the Credit Facilities, Newco's use of loan
proceeds or the commitments, including, but not
limited to, reasonable attorneys' fees (including,
without limitation, the allocated cost of internal
counsel) and settlement costs. This
indemnification shall survive and continue for the
benefit of the indemnitees at all times after the
Parent's acceptance of the Lenders' commitments
for the Credit Facilities, notwithstanding any
failure of the Credit Facilities to close.
GOVERNING LAW: State of Texas.
FEES/EXPENSES: As set forth in Addendum I.
OTHER: This Summary of Terms and Conditions is intended
as an outline only of material terms of the Credit
Facilities and does not purport to summarize all
the conditions, covenants, representations,
warranties, and other provisions which would be
contained in definitive legal documentation for
the Credit Facilities contemplated hereby. The
Parent, Newco, and the other Guarantors and each
of their subsidiaries and affiliates shall waive
their right to a trial by jury.
SUMMARY OF TERMS AND CONDITIONS - Page 12
<PAGE> 20
ADDENDUM I
FEES AND EXPENSES
COMMITMENT FEE: The Borrower will pay a fee (the "Commitment
Fee"), determined in accordance with the
Performance Pricing grid set forth below, on the
unused portion of each Lender's share of the
Credit Facilities. The Commitment Fee is payable
quarterly in arrears commencing upon Closing.
INTEREST RATES: The Credit Facilities shall bear interest at a
rate equal to LIBOR plus the applicable margin or
the Alternate Base Rate (to be defined as the
higher of (i) the Bank of America prime rate or
(ii) the Federal Funds rate plus 0.50%) plus the
applicable margin. The applicable margin during
the period from the Closing until the
Administrative Agent's receipt of the Borrower's
November 30, 1999 10-Q Report shall be 2.50% and
1.25% for LIBOR and Alternate Base Rate loans,
respectively. Thereafter, the applicable margin in
each case shall be determined in accordance with
the Loan Pricing Grid set forth below. The
Borrower shall immediately reimburse the
Administrative Agent and the Lenders for any
breakage costs, charges, or fees incurred with
respect to LIBOR loans on account of the
syndication of the Credit Facilities or as
otherwise set forth in the loan documentation. The
right of reimbursement referred to in the
preceding sentence shall be in addition to and not
in limitation of customary cost and yield
protections.
The Borrower may select interest periods of 1, 2,
3, 6, or 12 months for LIBOR loans, subject to
availability. Interest shall be payable at the end
of the selected interest period, but no less
frequently than quarterly.
A default rate shall apply on all loans
automatically upon the occurrence of an "Event of
Default" (as defined in the loan documentation) at
a rate per annum of 2.0% above the applicable
interest rate.
PERFORMANCE PRICING: The Commitment Fee and the applicable margin, for
any fiscal quarter, shall be the applicable rate
per annum set forth in the applicable table below
opposite the Leverage Ratio determined as of the
last day of the immediately preceding fiscal
quarter.
SUMMARY OF TERMS AND CONDITIONS - Page 13
<PAGE> 21
Loan Pricing Grid
<TABLE>
<CAPTION>
================================================================================
Level Leverage Ratio Applicable Applicable Commitment
Margin for Margin for ABR Fee
LIBOR Loans Loans
================================================================================
<S> <C> <C> <C>
I >= 2.00 to 1.00 2.50% 1.25% 0.50%
- --------------------------------------------------------------------------------
II >= 1.50 to 1.00 but < 2.00 to 2.25% 1.00% 0.50%
1.00
- --------------------------------------------------------------------------------
III >= 0.75 to 1.00 but < 1.50 to 2.00% 0.75% 0.50%
1.00
IV < 0.75 to 1.00 1.75% 0.50% 0.50%
================================================================================
</TABLE>
CALCULATION OF
INTEREST AND FEES: Other than calculations in respect of interest at
the Alternate Base Rate (which shall be made on
the basis of the actual number of days elapsed in
a 365/366 day year), all calculations of interest
and fees shall be made on the basis of the actual
number of days elapsed in a 360 day year.
COST AND YIELD PROTECTION: Customary for transactions and facilities of this
type, including, without limitation, in respect of
breakage or redeployment costs incurred in
connection with prepayments, changes in capital
adequacy and capital requirements or their
interpretation, illegality, unavailability,
reserves without proration or offset, and payments
free and clear of withholding or other taxes.
LETTER OF CREDIT FEES: Letter of credit fees are due quarterly
in arrears to be shared proportionately
by the Lenders. Fees will be equal to
the applicable margin for LIBOR loans on
a per annum basis plus a fronting fee of
0.125% per annum to be paid to the
Fronting Bank for its own account. Fees
will be calculated on the aggregate
stated amount for each Letter of Credit
for the stated duration thereof. The
Fronting Bank's customary expenses for
issuance or negotiation of a letter of
credit shall be paid by Newco upon
issuance of the letter of credit.
EXPENSES: Newco will pay all reasonable costs and expenses
associated with the preparation, due diligence,
administration, syndication, and enforcement of
all documentation executed in connection with the
Credit Facilities, including, without limitation,
the reasonable legal fees of counsel to the
Administrative Agent and NMS (including, without
limitation, the allocated cost of internal
counsel), regardless of whether or not the Credit
Facilities are closed. Newco will also pay the
reasonable expenses of each Lender in connection
with the enforcement of any loan documentation for
the Credit Facilities.
SUMMARY OF TERMS AND CONDITIONS - Page 14
<PAGE> 1
EXHIBIT 99.(c)(4)
CONFIDENTIAL
March 15, 1999
InterVoice, Inc.
17811 Waterview Parkway
Dallas, TX 75252
Attention: Rob-Roy Graham
Chief Financial Officer
Gentlemen:
In connection with a possible transaction between Brite Voice Systems, Inc. (the
"Company"), and InterVoice, Inc. ("InterVoice"), each party has requested
information concerning the other party. As a condition to each party's
furnishing the other with such information, each party agrees to treat any
information concerning the other party (whether prepared by itself, its advisors
or otherwise) which is furnished to the requesting party by or on behalf of the
other party (herein collectively referred to as the "Confidential Evaluation
Material") in accordance with the provisions of this letter and to take or
abstain from taking certain other actions herein set forth. The term
"Confidential Evaluation Material" does not include information which (i) is
already in the requesting party's possession, provided that such information is
not known by such party to be subject to another confidentiality agreement with
or other obligation of secrecy to the other party or a third party, (ii) becomes
generally available to the public other than as a result of a disclosure by the
other party or the other party's agents or directors, officers, employees or
advisors (directors, officers, employees and advisors are individually and
collectively referred to herein as "Representatives"), or (iii) becomes
available to such party on a non-confidential basis from a source other than the
other party or its Representatives, provided that such source is not known by
such party to be bound by a confidentiality agreement with or other obligation
of secrecy to the other party or a third party.
Each party hereby agrees that the Confidential Evaluation Material will be used
solely for the purpose of evaluating a possible transaction between the
parties, and that such information will be kept confidential by each party and
its Representatives and agents; provided, however, that (i) any of such
information may be disclosed to such party's Representatives who need to know
such information for the purpose of evaluating any such possible transaction
between the parties (it being understood that such Representatives shall be
informed by such party of the confidential nature of such information and shall
be directed by such party to treat such information confidentially), and (ii) a
disclosure of such information to which the other party consents in writing may
be made.
In addition, each party agrees that without the prior written consent of the
other party, it will not, and will direct its Representatives not to, disclose
to any person either the fact that discussions or negotiations are taking place
concerning a possible transaction between the parties of any of the
<PAGE> 2
InterVoice, Inc.
March 15, 1999
Page 2
terms, conditions or other facts with respect to any such possible transaction,
including the status thereof.
In the event that one of the parties or its Representatives or agents are
requested or required in a judicial, administrative or governmental proceeding
to disclose any Confidential Evaluation Material, such party agrees that it
will cooperate and provide prompt notice of such request(s) to the other party
so that the other party may seek an appropriate protective order and/or waive
its compliance with the provisions of this letter. If, in the absence of a
protective order or the receipt of a waiver hereunder, such party and its
Representatives or agents are nonetheless, in the opinion of its counsel,
legally required to disclose Confidential Evaluation Material to any tribunal
or else stand liable for contempt or suffer other censure or penalty, such
party may disclose such information to such tribunal without liability
hereunder provided that such party complies with the notice provisions of this
paragraph.
Each party hereby agrees that without the other party's prior written consent,
for a period of one year from the date hereof, it will not and its affiliates
will not directly solicit for employment, employ or otherwise contract for the
services of any person now employed (either as an employee or full time
consultant) by the other party who has been involved in discussions regarding
the proposed transaction to which this letter relates prior to the public
announcement of such transaction.
Although each party will endeavor to include in the Confidential Evaluation
Material information known to it which it believes to be relevant for the
purpose of the other party's investigation, each party understands that
neither the other party nor any of the other party's Representatives will make
any representation or warranty as to the accuracy or completeness of the
Confidential Evaluation Material except to the extent set forth in a definitive
agreement. Each party agrees that neither the other party nor the other party's
Representatives shall have any liability to such party or any of its
Representatives or advisors resulting from the use of the Confidential
Evaluation Material.
In the event that the parties do not proceed with the transaction that is the
subject of this letter within a reasonable time, each party shall promptly, and
in any event upon request, redeliver to the other party all written
Confidential Evaluation Material and any other written material containing or
reflecting any information in the Confidential Evaluation Material (whether
prepared by itself, its Representatives or agents or otherwise) and will not
retain any copies, extracts or other reproductions in whole or in part of such
written material. All documents, memoranda, notes and other writings whatsoever
prepared by either party or its Representatives or agents based on the
information in the Confidential Evaluation Material shall be destroyed.
Each party agrees that unless and until a definitive agreement between the
parties, which respect to any transaction referred to in the first paragraph of
this letter, has been executed and delivered, neither party will be under any
legal obligation of any kind whatsoever with respect to such a transaction by
virtue of this or any written or oral expression with respect to such a
transaction by
<PAGE> 3
InterVoice, Inc.
March 15, 1999
Page 3
any of its Representatives or agents or any other representative or advisor
except, in the case of this letter, for the matters specifically agreed to
herein. The agreement set forth in this paragraph may be modified or waived only
by separate writing executed by both parties expressly so modifying or waiving
such agreement.
InterVoice agrees that until the expiration of one year from the date of this
letter, except at the specific written request of the Company, it shall not: (a)
in any manner acquire, agree to acquire or make any proposal to acquire,
directly or indirectly, any securities or property of the Company or any of its
subsidiaries, (b) propose to enter into, directly or indirectly, any merger or
business combination involving the Company or any of its subsidiaries or to
purchase, directly or indirectly, a material portion of the assets of the
Company or any of its subsidiaries, (c) make, or in any way participate in,
directly or indirectly, any "solicitation of proxies" (as such terms are used in
the proxy rules of the Securities and Exchange Commission) to vote, or seek to
advise or influence any person with respect to the voting of, any voting
securities of the Company or any of its subsidiaries, (d) form, join or in any
way participate in a "group" (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934) with respect to any voting securities of the
Company or any of its subsidiaries, (e) otherwise act, alone or in concert with
others, to seek to control or influence the management, Board of Directors or
policies of the Company, (f) disclose any intention, plan or arrangement
inconsistent with the foregoing or (g) advise, assist or encourage any other
persons in connection with any of the foregoing, InterVoice also agrees during
such period not to (i) request the Company (or its directors, officers,
employees or agents), directly or indirectly, to amend or waive any provisions
of this paragraph (including this sentence), or (ii) take any action which might
require the Company to make a public announcement regarding the possibility of a
business combination or merger.
In consideration of the time, effort, and expense to be incurred by InterVoice
in connection with the possible transaction during the 45-day period commencing
on the date hereof, neither the Company nor any of its Representatives shall
directly or indirectly, solicit any offer from, initiate or engage in any
discussions or negotiations with, or provide any information to any third party
concerning any possible proposal regarding a merger, sale of assets or stock, or
other acquisition of the Company or any of its principal assets or businesses.
In furtherance of the foregoing, the Company shall immediately cease and
terminate any existing solicitation, initiation, encouragement, activity,
discussion, or negotiation with any persons conducted heretofore by it or its
Representatives and agrees not to release any third party from, or waive any
provision of, any standstill agreement to which it is a party or any
confidentiality agreement between it and another person who has made, or who may
be reasonably be considered likely to make a proposal regarding a merger, sale
of assets or stock, or other acquisition of the Company or any of its principal
assets or businesses. Notwithstanding the prohibitions contained in the two
preceding sentences of this paragraph, the Company and its Representatives may
engage in acquisition discussions and negotiations with an unnamed third-party
at the meeting scheduled to be held on Thursday, March 18, 1999; provided that
the Company shall prior to 5:00 p.m., Dallas, Texas time, on Friday, March 19,
1999 notify
<PAGE> 4
InterVoice, Inc.
March 15, 1999
Page 4
InterVoice that (i) the Company has ceased and terminated discussions and
negotiations with such third-party and will comply with the terms and
provisions of this letter, in which event this letter shall remain in full
force and effect or (ii) the Company intends to continue acquisition
discussions and negotiations with such third party, in which event this letter
shall become null and void and each party shall be relieved from any further
obligations hereunder; provided, however, that no termination of this letter
shall terminate or otherwise modify either party's rights or obligations with
respect to any Confidential Evaluation Material. The parties agree to include
appropriate provisions in any definitive agreement with respect to fiduciary
responsibilities of directors of the Company in connection with the
contemplated possible transaction.
This letter shall be governed by, and construed in accordance with, the laws
of the State of Kansas.
Sincerely,
BRITE VOICE SYSTEMS, INC.
By /s/ GLENN A. ETHERINGTON
--------------------------------------------
Name: Glenn A. Etherington
Title: Chief Financial Officer and Secretary
Agreed and accepted this 15th day of March, 1999
INTERVOICE, INC.
By /s/ ROB-ROY GRAHAM
--------------------------------------------
Name: Rob-Roy Graham
Title: Chief Financial Officer and Secretary
