<PAGE>
ROBEC, INC.
425 PRIVET ROAD
HORSHAM, PA 19044
AUGUST 28, 1995
Dear Shareholder:
You are invited to attend a special meeting of shareholders (the "Special
Meeting") of Robec, Inc. ("Robec") to be held at 425 Privet Road, Horsham,
Pennsylvania 19044, on September 27, 1995 (the "Meeting Date") at 10:00 a.m.,
local time.
The purpose of the Special Meeting is to consider and vote upon a proposal to
approve and adopt the Plan of Merger (the "Plan of Merger") pursuant to which
RI Acquisition, Inc., a Pennsylvania corporation and a wholly-owned subsidiary
of AmeriQuest Technologies, Inc., a Delaware corporation ("AmeriQuest"), will
be merged with and into Robec (the "Merger"), with Robec surviving the Merger
as a wholly-owned subsidiary of AmeriQuest. Under the terms of the Merger, each
share of common stock, par value $.01 per share, of Robec ("Robec Common
Stock") that is issued and outstanding on the effective date of the Merger,
other than shares held by AmeriQuest or by shareholders who perfect their
statutory dissenters rights, will be converted automatically into the right to
receive .82944 (the "Exchange Ratio") shares of newly issued common stock, par
value $.01 per share, of AmeriQuest ("AmeriQuest Common Stock"); provided,
however, that in the event that the lesser of (A) the mean trading price of
AmeriQuest Common Stock on the New York Stock Exchange on the fourth trading
day prior to the Meeting Date or (B) the average of the mean trading prices of
AmeriQuest Common Stock on the New York Stock Exchange for each of the 20
trading days prior to the fourth trading day prior to the Meeting Date (the
lesser of the amounts determined pursuant to (A) or (B) above, the "Market
Price"), is less than $3.00 per share, the Exchange Ratio shall be equal to the
sum of (A) the product of (i) .63075 multiplied by (ii) a quotient, the
numerator of which is $3.00 and the denominator of which is the Market Price
plus (B) .19869, all as more fully described in the accompanying
Prospectus/Proxy Statement and the Plan of Merger attached as Appendix I
thereto. Robec shareholders may call 1-800-788-4267 beginning the morning of
the third trading day prior to the Meeting Date to learn the final Exchange
Ratio; and may also change their vote by calling the same number, selecting
"Option 2--Change of Vote" and leaving shareholder's name, social security
number and voting instruction.
Pursuant to an Amended and Restated Agreement and Plan of Reorganization (the
"Amended Agreement") dated as of August 11, 1994 among AmeriQuest, Robec and
four principal shareholders of Robec (the "Principal Shareholders"), as
subsequently amended, on September 22, 1994, the Principal Shareholders
exchanged certain of their shares, representing 50.1% of the outstanding shares
of Robec Common Stock, for shares of AmeriQuest Common Stock at the same
conversion ratio as will apply to shares to be converted in the Merger, after
application of the adjustment mechanism. The Amended Agreement is attached as
Appendix II to the accompanying Prospectus/Proxy Statement.
Approval and adoption of the Plan of Merger requires the affirmative vote of
a majority of the votes cast by all shareholders entitled to vote thereon at a
meeting at which a quorum is present. Shareholders entitled to notice of and to
vote at the Special Meeting are the holders of outstanding shares of Robec
Common Stock on August 18, 1995 (the "Record Date"). AmeriQuest has sufficient
voting power to approve and adopt the Plan of Merger even if no other
shareholder of Robec votes in favor of such proposal. AmeriQuest has agreed to
vote in favor of the approval and adoption of the Plan of Merger.
THE BOARD OF DIRECTORS OF ROBEC HAS UNANIMOUSLY APPROVED AND ADOPTED THE PLAN
OF MERGER AND RECOMMENDS THAT YOU VOTE FOR APPROVAL AND ADOPTION OF THE PLAN OF
MERGER. In reaching its determination regarding the Plan of Merger, the Board
considered, among other things, the opinion of Compass Capital Advisors as to
the fairness, from a financial point of view, of the consideration to be
received by holders of shares of Robec Common Stock pursuant to the Plan of
Merger. The opinion of Compass Capital Advisors is attached as Appendix III to
the accompanying Prospectus/Proxy Statement.
<PAGE>
In view of the importance of the matter to be acted upon at the Special
Meeting, you are invited to personally attend the Special Meeting. Whether or
not you plan to attend the Special Meeting in person and regardless of the
number of shares of Robec Common Stock you own, please date, sign and return
the enclosed proxy in the accompanying envelope, which requires no postage if
mailed in the United States.
Sincerely,
Robert H. Beckett
Chairman, Chief Executive Officer
and President
SHARE CERTIFICATES SHOULD NOT BE SENT WITH THE ENCLOSED PROXY. IF THE MERGER
IS CONSUMMATED, SHAREHOLDERS WILL BE FURNISHED INSTRUCTIONS FOR EXCHANGING
THEIR ROBEC COMMON STOCK FOR AMERIQUEST COMMON STOCK.
<PAGE>
ROBEC, INC.
425 PRIVET ROAD
HORSHAM, PA 19044
TELEPHONE (215) 675-9300
---------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 27, 1995
---------------
To the Shareholders of Robec, Inc.:
Notice is hereby given that a special meeting of shareholders (the "Special
Meeting") of Robec, Inc., a Pennsylvania corporation ("Robec"), will be held at
Robec's principal offices, 425 Privet Road, Horsham, Pennsylvania, on September
27, 1995 (the "Meeting Date") at 10:00 a.m., local time, for the following
purposes:
1. To consider and vote upon a proposal to approve and adopt the Plan of
Merger (the "Plan of Merger") pursuant to which (a) RI Acquisition, Inc., a
Pennsylvania corporation and a wholly-owned subsidiary of AmeriQuest
Technologies, Inc., a Delaware corporation ("AmeriQuest"), will be merged
with and into Robec (the "Merger"), with Robec surviving the Merger as a
wholly-owned subsidiary of AmeriQuest and (b) each share of common stock,
par value $.01 per share, of Robec ("Robec Common Stock") that is issued
and outstanding on the effective date of the Merger, other than shares held
by AmeriQuest or by shareholders who perfect their statutory dissenters
rights, will be converted automatically into the right to receive .82944
(the "Exchange Ratio") shares of the common stock, par value $.01 per
share, of AmeriQuest ("AmeriQuest Common Stock"), provided, however, that
in the event that the lesser of (A) the mean trading price of AmeriQuest
Common Stock on the New York Stock Exchange on the fourth trading day prior
to the Meeting Date or (B) the average of the mean trading prices of
AmeriQuest Common Stock on the New York Stock Exchange for each of the 20
trading days prior to the fourth trading day prior to the Meeting Date (the
lesser of the amounts determined pursuant to (A) or (B) above, the "Market
Price"), is less than $3.00 per share, the Exchange Ratio shall be equal to
the sum of (A) the product of (i) .63075 multiplied by (ii) a quotient, the
numerator of which is $3.00 and the denominator of which is the Market
Price plus (B) .19869. (Robec shareholders may call 1-800-788-4267
beginning the morning of the third trading day prior to the Meeting Date to
learn the final Exchange Ratio; and may also change their vote by calling
the same number, selecting "Option 2--Change of Vote" and leaving
shareholder's name, social security number and voting instruction); and
2. To transact such other business as may properly come before the
Special Meeting or any adjournments thereof.
The Plan of Merger is more fully described in the accompanying
Prospectus/Proxy Statement and is attached as Appendix I thereto.
Robec shareholders have the right to dissent from the Merger and obtain
payment for their shares by following the procedures prescribed in Subchapter
15D of the Pennsylvania Business Corporation Law, which is attached as Appendix
IV to, and summarized under "Dissenters Appraisal Rights" in, the accompanying
Prospectus/Proxy Statement.
Only shareholders of record at the close of business on August 18, 1995 are
entitled to notice of the Special Meeting and to vote at the Special Meeting
and any adjournments thereof. You are cordially invited to attend the Special
Meeting and vote your shares in person.
By Order of the Board of Directors,
Robert S. Beckett
Secretary
August 28, 1995
YOUR PROXY IS IMPORTANT. ACCORDINGLY, YOU ARE ASKED TO COMPLETE, SIGN AND
RETURN THE ACCOMPANYING PROXY CARD IN THE ENVELOPE PROVIDED WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. IF YOU DECIDE TO ATTEND THE MEETING,
YOU MAY REVOKE THE PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE>
FILED PURSUANT TO RULE 424(b)(1)
REGISTRATION NO. 33-57611
ROBEC, INC.
425 PRIVET ROAD
HORSHAM, PENNSYLVANIA 19044
---------------
PROSPECTUS/PROXY STATEMENT
---------------
SPECIAL MEETING OF SHAREHOLDERS
SEPTEMBER 27, 1995
This Prospectus/Proxy Statement is being furnished to the shareholders of
Robec, Inc., a Pennsylvania corporation ("Robec"), in connection with the
solicitation of proxies by the Board of Directors of Robec for use at a
special meeting of shareholders (the "Special Meeting") to be held on
September 27, 1995 (the "Meeting Date") at 10:00 a.m., local time, at Robec's
principal executive offices, 425 Privet Road, Horsham, Pennsylvania and at any
adjournments thereof.
The purpose of the Special Meeting is to consider and vote upon a proposal
to approve and adopt the Plan of Merger (the "Plan of Merger") pursuant to
which RI Acquisition, Inc., a Pennsylvania corporation ("AmeriQuest Sub") and
a wholly-owned subsidiary of AmeriQuest Technologies, Inc., a Delaware
corporation ("AmeriQuest"), will be merged with and into Robec (the "Merger"),
with Robec surviving the Merger as a wholly-owned subsidiary of AmeriQuest and
renamed AmeriQuest/Robec, Inc. (the "Surviving Corporation"). Under the terms
of the Merger, each share of common stock, par value $.01 per share, of Robec
("Robec Common Stock") that is issued and outstanding on the effective date of
the Merger (the "Effective Date"), other than shares held by AmeriQuest or by
shareholders who perfect their statutory dissenters rights, will be converted
automatically into the right to receive .82944 (the "Exchange Ratio") shares
of the common stock of AmeriQuest ("AmeriQuest Common Stock"), provided,
however, that in the event that the lesser of (A) the mean trading price of
AmeriQuest Common Stock on the New York Stock Exchange on the fourth trading
day prior to the Meeting Date or (B) the average of the mean trading prices of
AmeriQuest Common Stock on the New York Stock Exchange for each of the 20
trading days prior to the fourth trading day prior to the Meeting Date (the
lesser of the amounts determined pursuant to (A) or (B) above, the "Market
Price"), is less than $3.00 per share, the Exchange Ratio shall be equal to
the sum of (A) the product of (i) .63075 multiplied by (ii) a quotient, the
numerator of which is $3.00 and the denominator of which is the Market Price
plus (B) .19869. (Robec shareholders may call 1-800-788-4267 beginning the
morning of the third trading day prior to the Meeting Date to learn the final
Exchange Ratio.) A copy of the Plan of Merger is attached as Appendix I to
this Prospectus/Proxy Statement and is incorporated herein by this reference.
Pursuant to an Amended and Restated Agreement and Plan of Reorganization (the
"Amended Agreement") dated as of August 11, 1994 among AmeriQuest, Robec and
four principal shareholders of Robec (the "Principal Shareholders"), as
subsequently amended, on September 22, 1994 the Principal Shareholders
exchanged certain of their shares (the "Exchange"), representing 50.1% of the
outstanding shares of Robec Common Stock, for shares of AmeriQuest Common
Stock at the same conversion ratio as will apply to shares to be converted in
the Merger, after application of the adjustment mechanism. A copy of the
Amended Agreement is attached as Appendix II to this Prospectus/Proxy
Statement and is incorporated herein by this reference. The summaries of the
portions of the Plan of Merger and Amended Agreement set forth in this
Prospectus/Proxy Statement do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, the texts of the Plan of
Merger and the Amended Agreement.
THE BOARD OF DIRECTORS OF ROBEC HAS UNANIMOUSLY APPROVED AND ADOPTED THE
PLAN OF MERGER AND RECOMMENDS THAT YOU VOTE FOR APPROVAL AND ADOPTION OF THE
PLAN OF MERGER. In reaching its determination regarding the Plan of Merger,
the Board considered, among other things, the opinion of Compass Capital
Advisors ("Compass") as to the fairness, from a financial point of view, of
the consideration to be received by holders of shares of Robec Common Stock
pursuant to the Plan of Merger. A copy of the opinion of Compass is attached
as Appendix III to this Prospectus/Proxy Statement and is incorporated herein
by this reference.
AMERIQUEST HAS FILED A REGISTRATION STATEMENT WITH THE SECURITIES AND
EXCHANGE COMMISSION IN WASHINGTON, D.C. COVERING SHARES OF AMERIQUEST COMMON
STOCK TO BE ISSUED BY AMERIQUEST IN CONNECTION WITH THE MERGER DESCRIBED IN
THE FOLLOWING PROSPECTUS/PROXY STATEMENT. THE PROSPECTUS/PROXY STATEMENT WAS
FILED AS PART OF SUCH REGISTRATION STATEMENT.
---------------
THE SHARES OF AMERIQUEST COMMON STOCK TO BE ISSUED PURSUANT TO THE MERGER
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
---------------
THE SHARES OF AMERIQUEST COMMON STOCK TO BE ISSUED PURSUANT TO THE MERGER
INVOLVE CERTAIN IMPORTANT FACTORS TO BE CONSIDERED. SEE "RISK FACTORS."
The date of this Prospectus/Proxy Statement is August 28, 1995.
<PAGE>
AVAILABLE INFORMATION
Robec (SEC File No. 0-18115) and AmeriQuest (SEC File No. 1-10397) are each
subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and in accordance therewith each files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "SEC"). Reports, proxy statements and other
information filed by Robec and AmeriQuest can be inspected and copied at the
public reference facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the SEC: New
York Regional Office, 7 World Trade Center, New York, New York 10048 and
Chicago Regional Office, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549,
at the SEC's prescribed rates. Such material with respect to AmeriQuest can
also be inspected and copied at the offices of the New York Stock Exchange, on
which AmeriQuest's Common Stock is listed.
AmeriQuest has filed with the SEC a registration statement on Form S-4
(together with any amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to
certain shares of AmeriQuest Common Stock to be issued in connection with the
Merger. This Prospectus/Proxy Statement does not contain all the information
set forth in the Registration Statement, certain portions of which have been
omitted pursuant to the rules and regulations of the SEC. A copy of the
Registration Statement may be inspected without charge at the principal
offices of the SEC in Washington, D.C.
ADDITIONAL INFORMATION
This Prospectus/Proxy Statement is accompanied by AmeriQuest's Annual Report
on Form 10-K/A (Amendment No. 9) for the year ended June 30, 1994 and its
Quarterly Report on Form 10-Q/A (Amendment No. 1) for the quarter and nine
months ended March 31, 1995, as well as Robec's Annual Report on Form 10-K/A
(Amendment No. 1) for the year ended December 31, 1994 and its Quarterly
Report on Form 10-Q/A (Amendment No. 1) for the six months ended June 30,
1995.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference:
(1) AmeriQuest's Current Report on Form 8-K (including Amendment Nos. 1
thru 3) dated June 14, 1994, the most recent of which was filed May
26, 1995;
(2) AmeriQuest's Annual Report on Form 10-K (including Amendment Nos. 1
thru 9) for the fiscal year ended June 30, 1994, the most recent of
which was filed August 16, 1995;
(3) AmeriQuest's Current Report on Form 8-K (including Amendment No. 1)
dated July 18, 1994, the most recent of which was filed April 6,
1995;
(4) AmeriQuest's Current Report on Form 8-K (including Amendment Nos. 1
thru 4) dated September 12, 1994, the most recent of which was filed
May 9, 1995;
(5) AmeriQuest's Quarterly Report on Form 10-Q (including Amendment Nos.
1 thru 4) for the three months ended September 30, 1994, the most
recent of which was filed May 9, 1995 (and erroneously labeled as
"Amendment No. 3");
(6) AmeriQuest's Current Report on Form 8-K (including Amendment Nos. 1
thru 6) dated as of November 14, 1994, the most recent of which was
filed May 26, 1995;
(7) AmeriQuest's Quarterly Report on Form 10-Q (including Amendment Nos.
1 thru 4) for the six months ended December 30, 1994, the most recent
of which was filed May 26, 1995;
(8) AmeriQuest's Quarterly Report on Form 10-Q (including Amendment No.
1) for the nine months ended March 31, 1995, the most recent of which
was filed May 26, 1995;
(9) AmeriQuest's Current Report on Form 8-K dated June 26, 1995 and filed
July 3, 1995;
(10) AmeriQuest's Current Report on Form 8-K dated August 7, 1995 filed
August 16, 1995;
(11) AmeriQuest's Current Report on Form 8-K dated August 9, 1995, filed
August 16, 1995;
(12) AmeriQuest's Schedule 14F filed August 14, 1995;
(13) Robec's Annual Report on Form 10-K (including Amendment No. 1) for
the fiscal year ended December 31, 1994, the most recent of which
was filed May 10, 1995;
(14) Robec's Quarterly Report on Form 10-Q for the quarter and three
months ended March 31, 1995, which was filed on May 15, 1995;
(15) Robec's Quarterly Report on Form 10-Q (including Amendment No. 1)
for the quarter and six months ended June 30, 1995, which was filed
on August 25, 1995;
(16) Kenfil Inc.'s Annual Report on Form 10-K for the fiscal year ended
June 30, 1993, SEC File No. 0-19905;
(17) Kenfil Inc.'s Quarterly Report on Form 10-Q for the quarter and three
months ended September 30, 1993;
(18) Kenfil Inc.'s Quarterly Report on Form 10-Q for the quarter and six
months ended December 31, 1993;
(19) Kenfil Inc.'s Quarterly Report on Form 10-Q (including Amendment No.
1) for the quarter and nine months ended March 31, 1994, the most
recent of which was filed May 9, 1995.
ii
<PAGE>
In addition, all reports and other documents filed by Robec or AmeriQuest
prior to the date of the Special Meeting pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act and after the date of this Prospectus/Proxy
Statement, shall be deemed to be incorporated by reference herein and shall be
deemed to be a part hereof from the date of the filing of each such report or
document.
THIS PROSPECTUS/PROXY STATEMENT INCORPORATES DOCUMENTS BY REFERENCE REGARDING
ROBEC AND AMERIQUEST WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH.
THESE DOCUMENTS ARE AVAILABLE UPON REQUEST AS FOLLOWS: WITH RESPECT TO ROBEC,
FROM ROBERT S. BECKETT, SECRETARY, ROBEC, INC., 425 PRIVET ROAD, HORSHAM,
PENNSYLVANIA 19044, AND WITH RESPECT TO AMERIQUEST, FROM STEPHEN G. HOLMES,
SECRETARY, AMERIQUEST TECHNOLOGIES, INC., 3 IMPERIAL PROMENADE, STE. 300, SANTA
ANA, CA 92707. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST
SHOULD BE MADE BY SEPTEMBER 15, 1995.
Any statement incorporated herein by reference shall be deemed to be modified
or superseded for purposes of this Prospectus/Proxy Statement to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated herein by reference modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus/Proxy Statement. Subject to the foregoing, all information appearing
in this Prospectus/Proxy Statement is qualified in its entirety by the
information appearing in the documents incorporated herein by this reference.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS/PROXY STATEMENT IN CONNECTION
WITH THE OFFERING MADE HEREBY, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY ROBEC OR
AMERIQUEST. THIS PROSPECTUS/PROXY STATEMENT DOES NOT CONSTITUTE AN OFFER OF ANY
SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES, OR AN
OFFER TO ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE UNLAWFUL. THE
DELIVERY OF THIS PROSPECTUS/PROXY STATEMENT AT ANY TIME DOES NOT IMPLY THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
iii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY....................................................................... 1
THE MEETING................................................................... 1
TERMS OF THE MERGER........................................................... 2
RISK FACTORS.................................................................. 11
Recent Developments/Computer 2000 Purchase Agreement........................ 11
Recent Developments/Default on Loan with Primary Lender..................... 11
Recent Developments/Acquisitions............................................ 11
Termination of Entertainment Software Business and Significant Fourth
Quarter Fiscal 1995 Operating Loss......................................... 11
Recent Losses; Possible Need for Additional Capital......................... 12
Stock Repurchase Agreement.................................................. 13
Integration of Companies.................................................... 13
Need for Product Development; Manufacturing................................. 13
Competition; Dominance of Industry Leaders.................................. 13
Competition; Products and Gross Margin...................................... 14
Dependence upon Key Personnel............................................... 14
Possible Sales by Shareholders.............................................. 14
Volatility of Stock Price; Trading Volume................................... 14
THE SPECIAL MEETING........................................................... 15
Purpose of the Special Meeting.............................................. 15
Record Date; Solicitation of Proxies........................................ 15
Vote Required............................................................... 16
Stock Ownership of Robec by Management and Certain Beneficial Owners........ 17
Certified Public Accountants................................................ 18
BUSINESSES OF THE COMPANIES................................................... 18
AMERIQUEST.................................................................. 18
General................................................................... 18
Incorporation of Certain Information by Reference......................... 19
Recent Developments....................................................... 19
Computer 2000 Investment................................................ 19
Acquisition of NCD...................................................... 23
ROBEC....................................................................... 26
General................................................................... 26
Incorporation of Certain Information by Reference......................... 26
INFORMATION REGARDING THE MERGER.............................................. 26
THE MERGER.................................................................. 26
BACKGROUND OF THE MERGER.................................................... 27
RECOMMENDATION OF THE BOARD OF DIRECTORS OF ROBEC; REASONS FOR THE MERGER... 30
OPINION OF ROBEC'S FINANCIAL ADVISOR........................................ 31
DISSENTERS APPRAISAL RIGHTS................................................. 36
CERTAIN ANTITRUST MATTERS................................................... 38
INTEREST OF CERTAIN PERSONS IN THE MERGER................................... 39
CERTAIN FEDERAL INCOME TAX CONSEQUENCES..................................... 39
Federal Tax Matters....................................................... 39
Tax Consequences to Robec Shareholders.................................... 39
Tax Consequences to Robec and AmeriQuest.................................. 40
Information Reporting..................................................... 40
Backup Withholding........................................................ 40
ACCOUNTING TREATMENT........................................................ 40
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C>
THE PLAN OF MERGER..................................................... 40
The Merger........................................................... 40
Effective Date....................................................... 41
Terms of the Merger.................................................. 41
Payment of Merger Consideration...................................... 41
Surviving Provisions................................................. 42
Dissenting Shares.................................................... 42
THE AMENDED AGREEMENT.................................................. 42
The Exchange......................................................... 42
Robec Stock Options.................................................. 43
Representations and Warranties; Conduct of Business Pending the
Merger.............................................................. 43
Conditions to Consummation of the Merger............................. 44
Indemnification; Insurance........................................... 44
Termination.......................................................... 44
Amendment; Waiver.................................................... 45
Registration Rights.................................................. 45
PRO FORMA FINANCIAL INFORMATION.......................................... 45
CAPITALIZATION........................................................... 51
COMPARATIVE MARKET PRICES OF COMMON STOCK................................ 52
DIVIDEND POLICY.......................................................... 52
DESCRIPTION OF CAPITAL STOCK OF AMERIQUEST............................... 53
General................................................................ 53
Preferred Stock........................................................ 53
Common Stock........................................................... 53
Dividends.............................................................. 53
Voting Rights.......................................................... 54
Liquidation............................................................ 54
Pre-Emptive Rights..................................................... 54
Anti-Takeover Provisions............................................... 54
COMPARISON OF SHAREHOLDER RIGHTS......................................... 54
By-Laws................................................................ 54
Dividend Declarations.................................................. 55
Terms of Directors..................................................... 55
Removal of Directors................................................... 55
Meetings of Shareholders............................................... 55
Action by Shareholders Without Meeting................................. 56
Dissenters Rights...................................................... 56
Supermajority Provisions............................................... 56
Business Combinations with Interested Shareholders..................... 56
Fiduciary Duty......................................................... 57
Derivative Actions..................................................... 57
LEGAL MATTERS............................................................ 57
EXPERTS.................................................................. 58
SHAREHOLDER PROPOSALS.................................................... 59
OTHER MATTERS............................................................ 59
PLAN OF MERGER........................................................... I-1
AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION................ II-1
FAIRNESS OPINION......................................................... III-1
SUBCHAPTER 15D OF THE PENNSYLVANIA BUSINESS CORPORATION LAW--DISSENTERS
RIGHTS.................................................................. IV-1
</TABLE>
v
<PAGE>
SUMMARY
The following brief summary of certain features of the proposal to merge RI
Acquisition, Inc., a Pennsylvania corporation ("AmeriQuest Sub") and wholly-
owned subsidiary of AmeriQuest Technologies, Inc. ("AmeriQuest"), with and into
Robec, Inc. ("Robec") is not a complete statement of all of the proposal's
material features and is qualified in its entirety by reference to the
Prospectus/Proxy Statement which each shareholder of Robec is urged to examine
carefully and consider in its entirety. Cross references in this Summary refer
to appropriate sections of the Prospectus/Proxy Statement where detailed
information is set forth. A copy of the Plan of Merger is attached as Appendix
I hereto and is incorporated herein by this reference.
THE MEETING
Company Soliciting Proxies: Robec, Inc., 425 Privet Road, Horsham, PA
19044, (215) 675-9300. See "Robec Special Meet-
ing."
Company Issuing Securities: AmeriQuest Technologies, Inc., 3 Imperial Prom-
enade, Ste. 300, Santa Ana, CA 92707, (714)
437-0099.
Businesses of Companies:
Robec is engaged primarily in the distribution
of computer hardware to value-added resellers,
dealers and computer retailers. AmeriQuest is
also engaged in the distribution of computer
hardware to value-added resellers through its
CDS Distribution, Inc. subsidiary, and, through
its recently acquired Ross White Enterprises,
Inc. d/b/a National Computer Distributors sub-
sidiary ("NCD"), is engaged in the distribution
of computer hardware to value-added resellers,
systems integrators and computer retailers.
Through its Kenfil, Inc. ("Kenfil") subsidiary,
AmeriQuest is engaged in the distribution of
microcomputer software to the retail market-
place. AmeriQuest and Computer 2000 AG ("Com-
puter 2000") entered into an agreement pursuant
to which Computer 2000 has agreed to invest ap-
proximately $50 million in AmeriQuest in ex-
change for an approximately 62 percent owner-
ship interest in AmeriQuest, including shares
already owned by Computer 2000 and assuming
consummation of the Merger. The investment by
Computer 2000 closed on August 21, 1995, at
which time AmeriQuest received $31.25 million
cash from Computer 2000 and Computer 2000 ex-
changed its $18 million loan, in each case for
shares of AmeriQuest Common Stock. See "Busi-
nesses of the Companies--AmeriQuest--Recent De-
velopments--Computer 2000 Investment."
Date and Time of Meeting:
A special meeting of shareholders of Robec to
consider and vote upon the Plan of Merger (the
"Special Meeting") will be held on September
27, 1995 (the "Meeting Date") at 10:00 a.m. See
"Notice of Special Meeting."
Place: The principal executive offices of Robec at 425
Privet Road, Horsham, Pennsylvania. See "Notice
of Special Meeting."
Record Date: August 18, 1995. See "Notice of Special Meet-
ing" and "The Special Meeting--Record Date; So-
licitation of Proxies."
Principal Purpose of Robec To consider and vote upon the Plan of Merger,
Meeting: pursuant to which AmeriQuest Sub will be merged
with and into Robec. See "Notice of Special
Meeting" and "The Special Meeting."
1
<PAGE>
Shares Outstanding and 4,439,180 shares of the common stock, par value
Entitled to Vote on Record $.01 per share, of Robec ("Robec Common
Date: Stock"). See "The Special Meeting."
Shares of Robec Common Stock
Owned on the Record Date by On the Record Date, AmeriQuest owned 2,224,029
Officers, Directors and shares of Robec Common Stock and officers and
Principal Shareholders: directors of Robec owned an additional 641,044
shares of Robec Common Stock, which cumula-
tively represent approximately 64.45% of the
outstanding shares of Robec Common Stock. This
is greater than the simple majority of votes
cast which is required to adopt the Plan of
Merger. See "The Special Meeting--Vote Re-
quired."
Robec Required Vote: Affirmative vote of the majority of the votes
cast by all of the holders of outstanding
shares of Robec Common Stock entitled to vote
thereon at a meeting at which a quorum is pres-
ent. AmeriQuest has sufficient voting power to
approve and adopt the Plan of Merger even if no
other shareholders of Robec vote in favor of
such proposal.
Proxies:
Revocable at any time before being voted by (1)
giving written notice to the Secretary of
Robec, (2) by substitution of a new Proxy bear-
ing a later date, (3) by calling 1-800-788-4267
anytime during the three business days preced-
ing the Meeting Date and selecting "Option 2--
Change of Vote" and leaving shareholder's name,
social security number and voting instruction,
or (4) by request for return of the Proxy at
the Special Meeting. See "The Special Meeting--
Vote Required."
TERMS OF THE MERGER
The Exchange by the Principal
Shareholders: AmeriQuest became the owner of 50.1% of the
outstanding Robec Common Stock on September 22,
1994 when four principal shareholders of Robec
(the "Principal Shareholders") exchanged (the
"Exchange") certain of their shares of Robec
Common Stock for shares of common stock, par
value $.01 per share, of AmeriQuest
("AmeriQuest Common Stock"). The Principal
Shareholders initially received .63075 shares
of AmeriQuest Common Stock for each share of
Robec Common Stock exchanged, subject to ad-
justment at the Merger closing to the same ag-
gregate conversion ratio as will apply to
shares to be converted in the Merger.
Exchange Ratio:
On the effective date of the Merger (the "Ef-
fective Date"), each outstanding share of Robec
Common Stock, other than shares owned by
AmeriQuest or by shareholders who perfect their
dissenters rights, will be converted automati-
cally into the right to receive .82944 (the
"Exchange Ratio") shares of newly issued
AmeriQuest Common Stock; provided, however,
that in the event that the lesser of (A) the
mean trading price of AmeriQuest Common Stock
on the New York Stock Exchange on the fourth
trading day prior to the Meeting Date or (B)
the average of the mean trading prices of
AmeriQuest Common Stock on the New York Stock
Exchange for each of the 20 trading days prior
to the fourth trading day prior to the Meeting
Date (the lesser of the amounts determined pur-
suant to (A) or (B) above, the "Market Price"),
is less than $3.00 per share,
2
<PAGE>
the Exchange Ratio shall be equal to the sum of
(A) the product of (i) .63075 multiplied by
(ii) a quotient, the numerator of which is
$3.00 and the denominator of which is the
Market Price plus (B) .19869. (Robec sharehold-
ers may call 1-800-788-4267 beginning the morn-
ing of the third trading day prior to the Meet-
ing Date to learn the final Exchange Ratio.)
See "Information Regarding the Merger--The Plan
of Merger--Terms of the Merger."
Proposed Effective Date:
As soon as possible after the conclusion of the
Special Meeting upon the completion of the nec-
essary formalities required by Pennsylvania law
and certain other conditions precedent, includ-
ing the listing of the shares of AmeriQuest
Common Stock to be issued pursuant to the
Merger with the New York Stock Exchange, but
not more than two business days following the
Meeting Date. See "Information Regarding the
Merger--The Plan of Merger--Effective Date."
Risk Factors: Holders of Robec Common Stock should carefully
consider certain risk factors in evaluating the
Merger prior to voting upon the Plan of Merger.
See "Risk Factors."
Principal Reasons for Merger: The combined companies will have an expanded
customer base for operations, greater access to
capital markets and the opportunity for manage-
rial and administrative efficiencies and over-
head expense savings as a result of the consol-
idation of certain operations. See "Information
Regarding the Merger--Recommendation of the
Board of Directors; Reasons for the Merger."
Factors Considered in The Exchange Ratio was negotiated at arm's
Determining Exchange Ratio: length between AmeriQuest and Robec. Factors
considered by Robec included the respective fi-
nancial condition of each company, including
shareholders' equity, their future prospects
and various other factors. See "Information Re-
garding the Merger--Background of the Merger."
Recommendation of Robec's The Board of Directors of Robec has unanimously
Board of Directors: approved and adopted the Plan of Merger and
recommends that the holders of Robec Common
Stock vote FOR approval and adoption of the
Plan of Merger. See "Information Regarding the
Merger--Recommendation of the Board of Direc-
tors of Robec; Reasons for the Merger."
Fairness Opinion: Compass Capital Advisors has delivered its
written opinion to the Board of Directors of
Robec that as of September 20, 1994 the Merger
was fair to Robec's shareholders from a finan-
cial point of view. For information on the as-
sumptions made, matters considered and limits
on the review by Compass Capital Advisors, see
"Information Regarding the Merger--Opinion of
Robec's Financial Advisor." Robec's Board of
Directors has concluded that (i) no facts have
arisen relating to Robec since September 20,
1994 which would lead the financial advisor to
conclude that Robec was now worth more than as
of September 20, 1994 and (ii) the current con-
sideration to be received by Robec shareholders
in the Merger is greater than that previously
considered by Compass.
Dissenters Rights: Under Pennsylvania law, shareholders of Robec
who file a written objection prior to the vote
on the Plan of Merger and do not vote in favor
of approval and adoption of the Plan of
3
<PAGE>
Merger have the right to demand an appraisal of
the "fair value" of their shares of Robec Com-
mon Stock if the required procedures under
Subchapter 15D of the Pennsylvania Business
Corporation Law of 1988, as amended (the
"BCL"), are followed. APPRAISAL RIGHTS WILL BE
FORFEITED IF THE REQUIREMENTS OF SUBCHAPTER 15D
ARE NOT FULLY AND PRECISELY SATISFIED. See "In-
formation Regarding the Merger--Dissenters Ap-
praisal Rights" and a copy of the text of
Subchapter 15D of the BCL attached as Appendix
IV to this Prospectus/Proxy Statement.
Required Approvals: The approval of the shareholders of Robec. The
early termination of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act") has
been received. See "Information Regarding the
Merger--Certain Legal Matters."
Appointment of Robert H. AmeriQuest has agreed to appoint Robert H.
Beckett as a Director of Beckett, currently the Chairman, Chief Execu-
AmeriQuest After the tive Officer and President of Robec, to the
Exchange: Board of Directors of AmeriQuest as of the
Closing Date and agreed to nominate him for re-
election at each of the next two annual meet-
ings of AmeriQuest stockholders. See "Informa-
tion Regarding the Merger--Interest of Certain
Persons in the Merger."
Federal Tax Consequences of The Merger is intended to qualify as a tax-free
the Merger: reorganization under the provisions of Section
368 of the Internal Revenue Code of 1986, as
amended. See "Information Regarding the Merg-
er--Certain Federal Income Tax Consequences."
Accounting: The Merger will be accounted for as a reorgani-
zation of unaffiliated companies and recorded
as a purchase by AmeriQuest for accounting and
financial reporting purposes. See "Information
Regarding the Merger--Accounting Treatment."
Comparison of Shareholders' Holders of Robec Common Stock will become hold-
Rights: ers of AmeriQuest Common Stock as a result of
the Merger. There are certain differences in
the rights of holders of Robec Common Stock and
AmeriQuest Common Stock, including differences
due to the fact that Robec is organized under
the laws of Pennsylvania whereas AmeriQuest is
organized under the laws of Delaware. See "Com-
parison of Shareholders Rights."
Surrender of Certificates: As soon as practicable after the Effective
Date, American Stock Transfer & Trust Company,
or another entity mutually acceptable to both
Robec and AmeriQuest, in its capacity as ex-
change agent for the Merger (the "Exchange
Agent"), will send a transmittal letter to each
Robec shareholder. The transmittal letter will
contain instructions with respect to the sur-
render of certificates representing Robec Com-
mon Stock to be exchanged for AmeriQuest Common
Stock. See "Information Regarding the Merger--
The Plan of Merger--Surrender and Payment."
ROBEC SHAREHOLDERS SHOULD NOT FORWARD CERTIFI-
CATES FOR ROBEC COMMON STOCK TO THE EXCHANGE
AGENT UNTIL THEY HAVE RECEIVED TRANSMITTAL LET-
TERS. ROBEC SHAREHOLDERS SHOULD NOT RETURN
STOCK CERTIFICATES WITH THE ENCLOSED PROXY.
4
<PAGE>
Comparative Per Share Prices: AmeriQuest Common Stock trades on the New York
Stock Exchange ("NYSE") under the trading sym-
bol ("AQS"). The following table sets forth the
range of high and low closing prices reported
on the NYSE for AmeriQuest Common Stock for the
calendar periods indicated:
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
Calendar 1994
First Quarter............................. 5 7/8 4 1/8
Second Quarter............................ 4 1/8 3
Third Quarter............................. 4 1/4 3 1/8
Fourth Quarter............................ 3 3/4 2 7/8
Calendar 1995
First Quarter............................. 3 1/8 2 1/2
Second Quarter............................ 3 1/4 1 3/4
Robec Common Stock has been traded on the Nasdaq
National Market System since Robec's initial
public offering under the trading symbol "ROBC".
The following table sets forth the range of high
and low bid quotations reported on the Nasdaq
National Market System for Robec Common Stock
for the calendar periods indicated:
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
Calendar 1994
First Quarter............................. 2 7/8 1 1/2
Second Quarter............................ 1 7/8 1/2
Third Quarter............................. 2 1/8 1 1/4
Fourth Quarter............................ 1 7/8 1 9/16
Calendar 1995
First Quarter............................. 1 15/16 1 1/2
Second Quarter............................ 1 13/16 1 1/2
</TABLE>
On June 29, 1994, the last trading day prior to
the first public announcement by AmeriQuest and
Robec concerning the proposed Merger, the last
sale price of AmeriQuest Common Stock reported
on the NYSE was $3.25 per share and the last
sale price of Robec Common Stock reported on
the Nasdaq National Market System was $0.88 per
share. Based on the Exchange Ratio of .82944
shares of AmeriQuest Common Stock for each
share of Robec Common Stock and the quoted
closing sale price of AmeriQuest Common Stock
on that date, AmeriQuest would be issuing stock
that had an equivalent value on that date of
$2.70 per share of Robec Common Stock. On
August 18, 1995, the last sale price of
AmeriQuest Common Stock as reported on the NYSE
was $1.75 per share and the last sale price of
Robec Common Stock reported on the Nasdaq
National Market System was $1.94 per share.
Based on the Exchange Ratio, if the Market
Price of AmeriQuest Common Stock were $1.75,
AmeriQuest would be issuing stock having an
equivalent market value of $2.24 per share of
Robec Common Stock. For information regarding
earlier periods, see "Comparative Market Prices
of Common Stock."
5
<PAGE>
SELECTED HISTORICAL AND PRO FORMA FINANCIAL COMPARATIVE PER SHARE DATA
The following selected historical information of AmeriQuest, Robec, and NCD
has been derived from their respective historical financial statements and
should be read in conjunction with such financial statements and notes thereto.
AmeriQuest's Consolidated Financial Statements for the three years ended June
30, 1994, 1993 and 1992 have been audited by Arthur Andersen LLP, independent
public accountants. Robec's Consolidated Financial Statements for the three
years ended December 31, 1994, 1993 and 1992 have been audited by Coopers &
Lybrand LLP, independent public accountants. NCD's Financial Statements for the
two years ended March 31, 1994 and 1993 have been audited by KPMG Peat Marwick
LLP, independent public accountants. NCD's Statement of Operations for the
three months ended March 31, 1992 has been audited by Hansen, Barnett &
Maxwell, independent public accountants. AmeriQuest's statements of income data
for the nine months ended March 31, 1995 and the balance sheet data at March
31, 1995 and NCD's statement of income data for the six months ended September
30, 1994 and balance sheet data at September 30, 1994 are unaudited but have
been prepared on the same basis as their audited financial statements and, in
the opinion of their respective managements, contain all adjustments consisting
only of normal recurring adjustments, necessary for a fair presentation of the
results of operations for such periods. The selected unaudited pro forma
condensed combined financial data is qualified in its entirety by reference to,
and should be read in conjunction with, the pro forma unaudited combining
financial statements and notes thereto that are included elsewhere in this
Prospectus/Proxy Statement. The unaudited pro forma condensed combined
statement of income combines the results of operations of AmeriQuest, Kenfil,
Robec and NCD for the twelve months ended June 30, 1994 and the nine months
ended March 31, 1995 giving effect to the acquisitions and the Computer 2000
Purchase Agreement as if each transaction had occurred on July 1, 1993. The
unaudited pro forma condensed combined balance sheet data as of March 31, 1995,
gives effect to the Company's acquisition of the remaining 49.9 percent of
Robec common stock, not owned by the Company and the Computer 2000 Purchase
Agreement as if they were completed on that date. The pro forma information is
not necessarily indicative of the operating results or financial position that
would have occurred had the acquisitions been consummated at the beginning of
the periods presented, nor is it necessarily indicative of future operating
results or financial position. The acquisitions discussed above have been
accounted for under the purchase method of accounting.
6
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
MARCH 31 YEARS ENDED JUNE 30
----------- -----------------------------------------------
1995 1994 1993 1992 1991 1990
----------- -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
AMERIQUEST
Historical Statement of
Income Data:
Net sales............. $305,664 $ 87,593 $ 73,082 $115,054 $130,062 $187,724
Income (loss) from
operations........... (5,000) (7,274) 487 (9,047) (11,730) 1,245
Income (loss) before
income taxes......... (9,443) (7,971) 236 (9,623) (12,027) 652
Net income (loss)..... (9,443) (7,971) 236 (8,894) (8,501) 405
Earnings (loss) per
share................ (0.52) (1.33) 0.08 (3.04) (2.89) 0.13
Weighted average
shares outstanding... 18,193 5,974 3,061 2,922 2,942 3,156
<CAPTION>
MARCH 31 JUNE 30
----------- -----------------------------------------------
1995 1994 1993 1992 1991 1990
----------- -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Historical Balance Sheet
Data:
Working capital
(deficit)............ $ (8,508) $ 4,872 $ 5,904 $ 5,217 $ 15,081 $ 22,463
Total assets.......... 170,039 65,145 20,274 23,522 40,747 41,084
Long-term obligations. 572 3,442 1,817 274 1,851 1,134
Shareholders' equity.. 26,447 12,875 8,644 7,952 16,806 26,065
<CAPTION>
NINE MONTHS
ENDED
MARCH 31 YEARS ENDED JUNE 30
----------- -----------------------------------------------
1995 1994 1993 1992 1991 1990
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
KENFIL
Historical Statement of
Income Data:
Net sales............. (1) $138,759 $184,054 $167,451 $133,219 $139,246
Income (loss) from
operations........... (18,167) 4,799 5,081 1,786 2,225
Income (loss) before
income taxes......... (20,753) 1,636 1,407 (2,501) (36)
Net income (loss)..... (20,770) 1,086 873 (1,663) (25)
Earnings (loss) per
share................ (4.72) 0.17 0.06 (0.70) (0.01)
Weighted average
shares outstanding... 4,399 4,399 2,798 2,869 3,108
<CAPTION>
MARCH 31 JUNE 30
----------- -----------------------------------------------
1995 1994 1993 1992 1991 1990
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Historical Balance Sheet
Data:
Working capital....... (1) (1) $ 17,897 $ 5,212 $ 5,162 $ 2,048
Total assets.......... 56,050 41,484 36,144 33,245
Long-term obligations. 6,480 11,380 11,452 1,525
Shareholders' equity
(deficiency)......... 13,146 (8,628) (8,784) 2,640
</TABLE>
- --------
(1) Kenfil operating results and balance sheet data for the nine months ended
March 31, 1995 are consolidated with the results of AmeriQuest.
7
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30 YEARS ENDED DECEMBER 31
----------- -----------------------------------------------
1995 1994 1993 1992 1991 1990
----------- -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
ROBEC
Historical Statement of
Income Data:
Net sales............. $73,100 $141,106 $203,233 $202,564 $201,131 $190,867
Income (loss) from
operations........... (3,217) (4,893) (8,141) (5,353) 4,994 7,890
Income (loss) before
income taxes......... (4,239) (6,148) (9,994) (6,785) 3,237 6,178
Net income (loss)..... (4,239) (6,172) (9,118) (4,589) 2,104 3,956
Earnings (loss) per
share................ (0.95) (1.39) (2.05) (1.03) 0.47 0.87
Weighted average
shares outstanding... 4,439 4,439 4,459 4,459 4,457 4,571
<CAPTION>
JUNE 30 DECEMBER 31
----------- -----------------------------------------------
1995 1994 1993 1992 1991 1990
----------- -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Historical Balance Sheet
Data:
Working capital......... $ 2,345 $ 6,423 $ 12,208 $ 42,078 $ 45,168 $ 22,788
Total assets............ 33,855 36,049 57,075 65,685 71,750 62,519
Long-term obligations... -- -- -- 21,336 20,000 --
Shareholders' equity ... 3,850 8,089 14,261 23,379 27,964 25,860
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS
ENDED ENDED
SEPTEMBER 30(1) YEARS ENDED MARCH 31 MARCH 31 YEARS ENDED DECEMBER 31
--------------- --------------------- ------------ ----------------------------
1994 1994 1993 1992 1991 1990
--------------- --------------------- ------------ ----------- ---------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NCD
Historical Statement of
Income Data:
Net sales............. $117,696 $196,513 $ 113,306 $15,256 $ 40,505 $ 38,689
Income (loss) from
operations........... 2,551 2,433 (1,481) 119 617 338
Income (loss) before
income taxes......... 994 630 (2,736) 51 309 137
Net income (loss)..... 994 630 (2,461) 51 309 137
Earnings (loss) per
share................ 4,247.86 2,859.00 (13,395.00) 423.00 3,094.00 1,370.00
Weighted average
shares outstanding... 234 220 220 120 100 100
<CAPTION>
SEPTEMBER 30(1) MARCH 31 DECEMBER 31
--------------- ----------------------------------- ----------------------------
1994 1994 1993 1992 1991 1990
--------------- --------------------- ------------ ----------- ---------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Historical Balance Sheet
Data:
Working capital......... $ 2,335 $ 20,052 $ 620 $ 1,676 $ (200) $ 262
Total assets............ 52,359 51,677 27,984 9,711 9,656 7,153
Long-term obligations... 2,737 21,499 2,663 94 136 135
Shareholders' equity
(deficiency)........... 1,260 11 (619) 1,582 697 500
</TABLE>
(1) NCD operating results and balance sheet data for the subsequent to November
14, 1994 are consolidated with the results of AmeriQuest.
8
<PAGE>
AMERIQUEST, KENFIL, ROBEC AND NCD
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, 1994 MARCH 31, 1995
------------------- -----------------
<S> <C> <C>
Pro Forma Combined Statement of Income
Data:
Net sales.............................. $613,606 $409,227
Income (loss) from operations (3)...... (34,539) (8,044)
Income (loss) before taxes (3)......... (38,433) (11,897)
Net income (loss) (3).................. (37,636)(1) (11,897)
Net income (loss) applicable to common
stockholders (3)...................... (37,636) (11,897)
Net income (loss) per share (3)........ (0.80) (0.24)
Weighted average shares outstanding.... 47,305 49,630
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1995
--------------
<S> <C>
Pro Forma Combined Balance Sheet Data:
Working capital............................................... $ 40,742
Total assets.................................................. 172,789
Long-term obligations......................................... 572
Total stockholders' equity.................................... 81,247 (3)
Book value per share (2)...................................... 1.61
Common shares outstanding..................................... 50,650
</TABLE>
- --------
(1) The restructuring charge of $5,000,000 included in AmeriQuest's historical
statement of operations relates principally to the write-off of certain
former personal computer joint venture operations. The restructuring charge
and earthquake loss of $3,305,000 included in Kenfil's historical
financials included charges of $2,821,000 for losses sustained in the
Southern California earthquake and restructuring charges of $484,000
relating to severance costs and lease termination costs. The restructuring
charge of $336,000 included in Robec's historical statement of operations
relates to a reduction in office and warehouse space. Such restructuring
charges have been included in the proforma condensed combined statement of
operations in conformity with Article 11 of Regulation S-X of the
Securities and Exchange Commission.
(2) Book value per share is computed by dividing pro forma stockholders' equity
by the pro forma number of shares of common stock outstanding at March 31,
1995.
(3) In connection with executive and operating management changes, AmeriQuest
has made the decision to terminate its entertainment software business and
focus its product line offerings by eliminating certain lower margin
products and vendors within its computer hardware distribution business.
As a result, the Company will record a charge in the fourth quarter of
fiscal 1995 of approximately $25 million associated with the write-off of
the intangible assets related to the entertainment software business, the
write-down of related inventory to liquidation value and the reserve of
customer and vendor receivables to their recoverable value. In addition to
the fourth quarter fiscal 1995 loss related to the termination of the
entertainment software business, the Company expects to record further
substantial fourth quarter operating losses due to the continued sales
volume reductions experienced by the Company and expected substantial
inventory realization reserves associated with the elimination of certain
lower margin products and vendors within the Company's computer hardware
distribution business. These losses are not reflected in the pro forma
financial statements as they relate to activity and management decisions
occurring after the third quarter of fiscal 1995. (See "Risk Factors--
Termination of Entertainment Software Business and Significant Fourth
Quarter Fiscal 1995 Operating Loss").
9
<PAGE>
UNAUDITED COMPARATIVE PER SHARE DATA. The following table sets forth (1) the
historical net income (loss) per share and the historical book value per share
of AmeriQuest Common Stock; (2) the historical net income (loss) per common
share and the historical book value per share of Robec; (3) the unaudited pro
forma combined net income (loss) per common share and the unaudited pro forma
combined book value per share after giving effect to the proposed Merger; and
(4) the unaudited pro forma net income (loss) per equivalent Robec share and
the unaudited pro forma book value per equivalent Robec share assuming the
exchange ratio of 0.82944 (see "Information Regarding the Merger" for
information on adjustments to the exchange ratio for changes in the quoted
market price for AmeriQuest Common Stock preceding the Merger). The information
presented in the table should be read in conjunction with the unaudited pro
forma condensed combined financial statements and the interim consolidated
unaudited condensed financial statements and the notes thereto appearing
elsewhere herein or incorporated herein by reference.
<TABLE>
<CAPTION>
EQUIVALENT
HISTORICAL(3) AMERIQUEST ROBEC
----------------- PRO FORMA PRO FORMA
AMERIQUEST ROBEC COMBINED(1)(3) COMBINED(2)
---------- ------ -------------- -----------
<S> <C> <C> <C> <C>
Net Income (Loss) Per Share(3)
Twelve months ended
June 30, 1994.................. $(1.33) $(2.52) $(0.80) $(0.92)
Nine months ended
March 31, 1995................. (0.52) (0.92) (0.24) (0.27)
Book Value Per Share at
June 30, 1994.................. 1.31 2.65 2.01 2.30
March 31, 1995................. 1.26 1.76 1.61 1.84
</TABLE>
(1) The unaudited pro forma combined net income (loss) per share is based on
the weighted average number of common shares of AmeriQuest Common Stock
outstanding during the period adjusted to give effect to shares assumed to
be issued had the Merger taken place as of the beginning of the period
presented.
(2) The unaudited equivalent Robec pro forma combined per share amounts are
calculated by multiplying the AmeriQuest pro forma combined per share
amounts by the exchange ratio of 0.82944 (adjusted for AmeriQuest's current
quoted market price--see "Information Regarding the Merger--The Merger") of
a share of AmeriQuest Common Stock for each share of Robec Common Stock.
(3) AmeriQuest's and Robec's book value per share are computed by dividing
stockholders' equity by the number of shares of common stock outstanding at
the end of each period. Pro forma combined book value per share is computed
by dividing pro forma combined stockholders' equity by the pro forma
combined number of shares of common stock outstanding at the end of the
period.
10
<PAGE>
RISK FACTORS
The following are certain risk factors to be considered by Robec's
shareholders in voting upon the Plan of Merger, in addition to the risks and
other information described elsewhere in this Prospectus/Proxy Statement.
RECENT DEVELOPMENTS/COMPUTER 2000 PURCHASE AGREEMENT. On November 14, 1994,
AmeriQuest entered into an Investment Agreement and a Loan Agreement with
Computer 2000 AG ("Computer 2000") which contemplated that Computer 2000 would
invest approximately $50 million in AmeriQuest (the "Investment") in exchange
for a 51% ownership interest in AmeriQuest, including shares already owned by
Computer 2000, and assuming consummation of the Merger. The investment as
originally contemplated by Computer 2000 was tiered. The first tier included an
$18 million advance from Computer 2000, exchangeable for shares of AmeriQuest
Common Stock, and the second tier of $32 million was contingent upon the
monthly and cumulative performance of AmeriQuest in the first half of calendar
1995, approval by AmeriQuest stockholders and certain regulatory approvals.
AmeriQuest failed to achieve the performance goals, therefore AmeriQuest had no
right to compel Computer 2000 to make such investment and was required to
renegotiate the arrangement with Computer 2000. On August 7, 1995, AmeriQuest
executed a Purchase Agreement with Computer 2000 (the "Purchase Agreement"),
which provides that Computer 2000 will complete its $50 million investment in
August, 1995 by converting the $18 million advance into AmeriQuest Common Stock
and completing the additional $31.25 million equity investment, on terms
substantially different from those earlier negotiated. Computer 2000 completed
the Investment on August 21, 1995. Computer 2000 now beneficially owns
approximately 62% of AmeriQuest's stock and has voting and managerial control
of AmeriQuest. Although the sale of the shares to Computer 2000 was at a price
below the quoted market price on August 7, 1995, the Board of Directors of
AmeriQuest concluded that it had few alternatives given the financial distress
of AmeriQuest. AmeriQuest also received a fairness opinion from L.H. Friend,
Weinress, Frankson & Presson, Inc. For additional information, see "The
Business of the Companies--AmeriQuest--Recent Developments--Investment by
Computer 2000 Investment."
RECENT DEVELOPMENTS/DEFAULT ON LOAN WITH PRIMARY LENDER. AmeriQuest is
currently in default under the terms of the agreement with its primary lender
by reason of its borrowings exceeding its collateral base. However, the primary
lender has continued to provide financing under the working capital line of
credit. AmeriQuest management expects to reduce its borrowings under this line
with a portion of the proceeds from the Computer 2000 investment to a level
where the loan is fully collateralized; however, no assurance can be given that
AmeriQuest's future working capital needs will not exceed its available
borrowings under its credit agreements.
TERMINATION OF ENTERTAINMENT SOFTWARE BUSINESS AND SIGNIFICANT FOURTH QUARTER
FISCAL 1995 OPERATING LOSS. AmeriQuest has made the decision to terminate its
entertainment software business (which involves sales primarily to retailers)
and to focus its management efforts and capital in the higher-margin value-
added products, applications software and computer hardware distribution
businesses. In addition, AmeriQuest is in the process of further focusing its
product line offerings by eliminating certain lower margin products and vendors
within its computer hardware distribution business. The Company will record a
charge in the fourth quarter of Fiscal 1995 estimated to be between $25 million
to $50 million associated with the write-off of the intangible assets related
to the entertainment software business, the write-down of related inventory to
liquidation value and the reserve of customer and vendor receivables to their
recoverable value.
In addition to the fourth quarter fiscal 1995 loss related to the termination
of the entertainment software business, the Company expects to record a further
substantial fourth quarter operating losses due to the continued sales volume
reductions experienced by the Company and expects substantial inventory
realization reserves associated with the elimination of certain lower margin
products and vendors within the Company's computer hardware distribution
business.
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RECENT DEVELOPMENTS/ACQUISITIONS. AmeriQuest has a policy of growth, both
internal and by acquisition. On June 6, 1994, AmeriQuest acquired 51.9% of
Kenfil Inc., a distributor of entertainment and other computer software
products, and on September 12, 1994 acquired the balance of the outstanding
shares of Kenfil Inc. in a merger between AmeriQuest's wholly-owned subsidiary,
AmeriQuest/Kenfil Inc. and Kenfil Inc. AmeriQuest now owns 100% of the
resultant company, AmeriQuest/Kenfil Inc. ("Kenfil"). (See "Termination of
Entertainment Software Business and Significant Fourth Quarter Fiscal 1995
Operating Loss" above for a discussion of the discontinuance of the
entertainment software business.) On September 22, 1994, AmeriQuest acquired
50.1% of Robec from the Principal Shareholders, and it is contemplated that
AmeriQuest will secure ownership of 100% of Robec upon consummation of the
Merger. On November 14, 1994, AmeriQuest acquired Ross White Enterprises, Inc.,
a Florida corporation d/b/a "National Computer Distributors" ("NCD"). Both
Robec and NCD are distributors of computer hardware. The combination of
AmeriQuest (including Kenfil and NCD) and Robec after consummation of the
Merger is referred to in this Prospectus/Proxy Statement as the "Combined
Company."
RECENT LOSSES; POSSIBLE NEED FOR ADDITIONAL CAPITAL. AmeriQuest experienced
significant net losses for fiscal years 1991 and 1992. Although AmeriQuest had
net earnings of $236,000 for the year ended June 30, 1993, it had a loss of
$7,971,000 for the year ended June 30, 1994, including a write-off of $5.7
million with respect to restructuring and the disposition of assets related to
hardware operations. For the nine months ended March 31, 1995, AmeriQuest
experienced a loss of approximately $9,443,000 compared with a net loss of
approximately $4,889,000 for the same period a year earlier, and anticipates a
significant operating loss for the fourth fiscal quarter ended June 30, 1995.
NCD had a net income for the fiscal year ended March 31, 1994 of $630,115 on
revenues of $196,512,724 compared with a net loss of $2,460,624 the year
earlier on revenues of $113,306,494. For the six months ended September 30,
1994, NCD had a net income of $994,000 on sales of $117,696,000. Robec
experienced a net loss of $6,172,000 and $4,239,000 for the year ended December
31, 1994 and the six months ended June 30, 1995, respectively. The Combined
Company is continuing to incur losses as it attempts to restructure its
operations, and there can be no assurance that the Combined Company will be
able to achieve profitability in subsequent periods even though it is cutting
costs significantly in an attempt to achieve a profitable level of operations
as soon as possible. (See "Termination of Entertainment Software Business and
Significant Fourth Quarter Fiscal 1995 Operating Loss.") In fiscal 1994,
AmeriQuest raised approximately $5,600,000 from the sale of 3,400,000 shares of
AmeriQuest Common Stock, which shares have been registered for resale on a
Registration Statement on Form S-3. On June 30, 1994, it raised another
$2,000,000 in a sale of its securities to foreign investors. On October 17,
1994, AmeriQuest raised approximately $3,432,000 upon the placement of
unsecured, convertible promissory notes which were automatically converted to
shares of AmeriQuest Common Stock and warrants to purchase AmeriQuest Common
Stock at $2.40 per unit upon the acquisition of NCD. On June 30, 1995
AmeriQuest raised approximately $4,500,000 upon the issuance of AmeriQuest
Common Stock and warrants at $1.75 per unit, with each unit comprised of one
share of AmeriQuest Common Stock and two three-year warrants exercisable at
$1.05 per share. In August 1995, AmeriQuest entered into a Purchase Agreement
with Computer 2000 which among other things calls for the issuance of
approximately 8.1 million shares of AmeriQuest Common Stock in satisfaction of
the $18 million Computer 2000 advance and the issuance of approximately 17.9
million shares of AmeriQuest Common Stock for approximately $31.3 million. The
Purchase Agreement also calls for the issuance of warrants to purchase
approximately 14 million shares of AmeriQuest Common Stock at $0.05 per share
and certain anti-dilution warrants related to additional shares issuable in the
Robec Merger and various other outstanding warrant and option agreements (see
"Recent Developments" for a full description of the terms of the Computer 2000
Purchase Agreement). In the event that the Combined Company does not achieve
profitability over the next year, AmeriQuest may be required to seek additional
financing, but the Investment Agreement with Computer 2000 prohibits the
issuance of additional shares of AmeriQuest Common Stock without its consent.
There can be no assurance that any such financing will be available to
AmeriQuest if and when required, or on terms acceptable to AmeriQuest, or that
such additional financing, if available, would not result in substantial
dilution of the equity interests of existing stockholders.
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<PAGE>
STOCK REPURCHASE AGREEMENT. AmeriQuest is party to a Stock Repurchase
Agreement dated November 14, 1994 pursuant to which certain former
shareholders of NCD have the right at any time and from time-to-time after
February 13, 1995 to require AmeriQuest to repurchase up to 661,486 shares of
AmeriQuest Common Stock at $3.50 per share for a total potential obligation of
$2,315,201. Suit was filed by the former shareholders of NCD on June 5, 1995
seeking payment by AmeriQuest. To the extent such persons sell their shares
pursuant to an effective Registration Statement (which was declared effective
on July 12, 1995), AmeriQuest will be relieved of that obligation; however to
the extent the proceeds from such resale are insufficient to realize the full
$2,315,201 claimed, AmeriQuest may have to pay the difference in cash
(approximately $1 million at current quoted market prices) or additional
shares of AmeriQuest Common Stock. The action is styled Lee Capital Holdings
et. al. vs. AmeriQuest Technologies, Inc. et. al., Superior Court of the State
of California, County of Orange, Case No. 748039. Unless such shares are sold,
the satisfaction of the amounts claimed from the assets of AmeriQuest could
have a material adverse effect on the Company.
INTEGRATION OF COMPANIES. In determining the terms of the proposed Merger,
the management of Robec and AmeriQuest evaluated the companies' respective
businesses based in part on expectations concerning the future operations of
the Combined Company. The evaluations reflected to a material extent the
expectation that there would be an increase in the sales of each company's
products, as well as the expectation that the combination of the companies
would produce other beneficial effects. There can be no assurance that these
expectations will be fulfilled. AmeriQuest and Robec believe that a key
benefit to be realized from the Merger will be the integration of their
strategies and product lines. Certain of the anticipated benefits of the
Merger may not be achieved unless the respective operations of each company
are successfully integrated in a timely manner. The difficulties of such
integration may initially be increased by the necessity of maintaining
multiple accounting systems and integrating personnel with disparate business
backgrounds and corporate cultures. Such problems could be further exacerbated
in combining Robec's and NCD's operations with those of AmeriQuest because of
the geographical diversity of the companies. There can be no assurance that
the Combined Company will be able to integrate effectively the products and
services of Robec with the products and services of AmeriQuest and/or NCD. Nor
can there be any assurance that, even if integrated, the Combined Company's
product and service offerings will be successful. If the Combined Company is
not successful in integrating its product strategies and services or if its
integrated products and services fail to achieve market acceptance, the
business of the Combined Company could be adversely affected.
NEED FOR PRODUCT DEVELOPMENT; MANUFACTURING. AmeriQuest (including NCD) and
Robec compete in an industry which is affected by technological change. The
inability of the Combined Company to develop or obtain new products which
respond to industry demands could adversely affect its operational and
financial performance. AmeriQuest depends on original equipment manufacturers
("OEMs") to manufacture various portions of its products, but has no
contractual commitments from its suppliers where no single supplier provides
the entirety of any product needs. Although AmeriQuest performs quality
control checks on these components, there can be no assurance that component
defects will not occur in the future. AmeriQuest has in the past experienced
component reliability problems with respect to new components. AmeriQuest
believes that this problem is typical in the industry and it performs product
quality inspection and final testing to prevent, detect and remedy such
problems. There can be no assurance that component reliability problems will
not have a material adverse effect on the business of the Combined Company.
Robec and AmeriQuest also purchase components, subassemblies and fabricated
parts from independent suppliers. Robec and AmeriQuest attempt to maintain
adequate inventories of parts to cover their respective short-term
requirements and have never experienced difficulties in obtaining inventories
of parts to cover their respective short-term requirements for components.
However, Robec and AmeriQuest do purchase several key components from a
limited number of sources. There can be no assurance that, with respect to
such components, the loss of key sources would not have a material adverse
effect on business of the Combined Company.
COMPETITION; DOMINANCE OF INDUSTRY LEADERS. Most of the Combined Company's
competitors have financial, marketing or management resources substantially
greater than those of the Combined Company. The personal computer industry is
dominated by companies with annual revenues that exceed a billion
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<PAGE>
dollars. The Combined Company's principal markets are comprised predominantly
of personal computer resellers with a moderate volume of sales. Robec and
AmeriQuest are facing increasing competition from many competitors. AmeriQuest
and Robec believe that the market will be increasingly dominated by the
industry leaders. There can be no assurance that the Combined Company will
develop into one of the industry leaders.
COMPETITION; PRODUCTS AND GROSS MARGIN. Robec and AmeriQuest compete in an
industry characterized by intense competition. Because the products
traditionally resold by distributors such as Robec and AmeriQuest have shorter
and shorter product life cycles and are offered by many resellers, the gross
margins which can be earned from the sale of such products reduce quickly over
short periods of time. In addition, the products are subject to loss in value
due to technological obsolescence. Accordingly, the Combined Company's primary
marketing strategy will be to sell products with increasing data storage
capacities. There can be no assurance that the Combined Company will be able to
develop or obtain such higher capacity products or maintain adequate gross
margins on the sales of such products.
DEPENDENCE UPON KEY PERSONNEL. The Combined Company will be dependent upon
the marketing and management expertise of certain key personnel. While other
qualified persons may be found to assume the responsibilities of these key
personnel if they were to leave the Combined Company, the search for successors
could take a substantial amount of time, and the disruption to the Combined
Company's operations could have a material adverse effect on its business; and
AmeriQuest does not maintain key-man insurance policies.
POSSIBLE SALES BY SHAREHOLDERS. AmeriQuest has earlier registered 12,767,364
outstanding shares (52.6%) of AmeriQuest Common Stock on Form S-3 for resale by
certain selling shareholders, including the principal shareholders. AmeriQuest
has also agreed to register the 2,574,287 shares (10.6%) issued on June 30,
1995 and the shares issued to Computer 2000 upon consummation of the
transactions contemplated by the Purchase Agreement with Computer 2000. The
sale of such shares, or the perception that such shares may be sold, may have
the effect of substantially depressing the market price of AmeriQuest's Common
Stock and causing substantial fluctuations in the price of AmeriQuest Common
Stock.
VOLATILITY OF STOCK PRICE; TRADING VOLUME. The price of AmeriQuest's Common
Stock has been subject to significant price fluctuations. There can be no
assurance that the price of the AmeriQuest's Common Stock will stabilize at any
time or at a price equal to or above the price of such shares at the time of
the Merger. Until recently, the trading volume for AmeriQuest's Common Stock
has generally been low. A large increase in share trading volume in a short
period of time could cause a significant reduction in share trading prices.
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<PAGE>
THE SPECIAL MEETING
PURPOSE OF THE SPECIAL MEETING
The Special Meeting is being called (i) to consider and vote upon a proposal
to approve and adopt the Plan of Merger pursuant to which (a) AmeriQuest Sub
will be merged with and into Robec, with Robec surviving the Merger as a
wholly-owned subsidiary of AmeriQuest and (b) each share of Robec Common Stock
that is issued and outstanding on the Effective Date, other than shares held by
AmeriQuest or by shareholders who perfect their statutory dissenters rights,
will be converted automatically into the right to receive shares of AmeriQuest
Common Stock at the Exchange Ratio and (ii) to transact such other business as
may properly come before the Special Meeting or any adjournments thereof.
Approval and adoption of the Plan of Merger by Robec's shareholders is one of
the conditions to the consummation of the Merger. However, because AmeriQuest
owns 50.1% of Robec's Common Stock, AmeriQuest has sufficient voting power to
approve and adopt the Plan of Merger even if no other shareholders of Robec
vote in favor of such proposal. AmeriQuest has agreed to vote in favor of the
approval and adoption of the Plan of Merger. See "Information Regarding the
Merger--The Amended Agreement--Conditions to Consummation of the Merger."
THE BOARD OF DIRECTORS OF ROBEC HAS UNANIMOUSLY APPROVED AND ADOPTED THE PLAN
OF MERGER AND RECOMMENDS THAT HOLDERS OF SHARES OF ROBEC COMMON STOCK VOTE FOR
APPROVAL AND ADOPTION OF THE PLAN OF MERGER.
RECORD DATE; SOLICITATION OF PROXIES
The close of business on August 18, 1995 has been fixed as the record date
(the "Record Date") for the determination of shareholders entitled to notice of
and to vote at the Special Meeting. Accordingly, only holders of Robec Common
Stock of record at the close of business on the Record Date are entitled to
notice of and to vote at the Special Meeting and any adjournments thereof. At
the close of business on the Record Date, there were 4,439,180 shares of Robec
Common Stock outstanding. Robec has 5,000,000 authorized shares of preferred
stock of which no shares are outstanding.
Shares of Robec Common Stock which are represented by properly executed
proxies, unless such proxies shall have previously been properly revoked, will
be voted in accordance with the instructions indicated in such proxies. If no
contrary instructions are indicated, such shares will be voted FOR approval and
adoption of the Plan of Merger and in the discretion of the proxy holder as to
any other matter which may properly come before the Special Meeting. Under the
rules of the National Association of Securities Dealers, brokers may not give a
proxy to vote without complying with the rules of any national exchange to
which the broker is also a member. Brokers that are member firms of the New
York Stock Exchange, Inc. ("NYSE") and who hold shares in street name for
customers have authority under the rules of the NYSE to vote those shares with
respect to the Plan of Merger only if they have received instructions to do so
from the beneficial owners thereof. Under the Pennsylvania Business Corporation
Law of 1988, as amended (the "BCL"), if a shareholder (including a nominee or
other record owner) either records the fact of abstention or otherwise
withholds authority to vote or fails to vote in person or by proxy, such action
would not be considered a "vote cast" and would have no effect in the approval
and adoption of the Plan of Merger, other than to reduce the number of
affirmative votes needed for such approval. A shareholder who has given a proxy
may revoke it at any time prior to its exercise at the Special Meeting by (1)
giving written notice to the Secretary of Robec, (2) by substitution of a new
Proxy bearing a later date, (3) by calling 1-800-788-4267 any time during the
three business days preceding the Meeting Date and selecting "Option 2--Change
of Vote" and leaving shareholder name, social security number and voting
instruction, or (4) by request for return of the Proxy at the Special Meeting.
Written notices should be sent to Robert S. Beckett, Secretary, Robec, Inc.,
425 Privet Road, Horsham, Pennsylvania 19044.
Robec will bear the cost of the Special Meeting and of soliciting proxies
therefor, including the costs of the printing and mailing of this
Prospectus/Proxy Statement and related materials, and the reasonable
15
<PAGE>
expenses incurred by brokerage houses, custodians, nominees and fiduciaries in
forwarding proxy material to the beneficial owners of shares of Robec Common
Stock.
VOTE REQUIRED
In general, a majority of the outstanding shares of Robec Common Stock
entitled to vote, represented in person or by proxy, is required for a quorum
at the Special Meeting. However, those shareholders entitled to vote who
attend, in person or by proxy, any adjournment or adjournments of the Special
Meeting that have been previously adjourned for one or more periods aggregating
at least 15 days because of an absence of a quorum, although less than a quorum
as fixed by law or in the Articles of Incorporation or By-Laws of Robec, shall
nevertheless constitute a quorum for the purpose of acting upon the Plan of
Merger. Provided that a quorum is present at the Special Meeting, the
affirmative vote of a majority of the votes cast by all of the holders of the
outstanding shares of Robec Common Stock entitled to vote thereon as of the
Record Date is required for approval and adoption of the Plan of Merger. Any
other matter which may properly come before the Special Meeting at which a
quorum is present for such purpose requires the affirmative vote of a majority
of the votes cast on the matter unless a greater vote is required by law or the
Articles of Incorporation or By-Laws of Robec. Holders of shares of Robec
Common Stock are entitled to one vote at the Special Meeting for each share of
Robec Common Stock held of record by such holders on the Record Date.
Robec shareholders have the right to dissent from the approval and adoption
of the Plan of Merger and, subject to certain requirements of the BCL, to
receive payment for the fair value of their shares of Robec Common Stock. See
"Information Regarding the Merger--Dissenters Appraisal Rights" and a copy of
the text of Subchapter 15D of the BCL attached as Appendix IV hereto.
On the Record Date, AmeriQuest held 2,224,029 shares of Robec Common Stock
and the officers and directors held an additional 641,044 shares of Robec
Common Stock, excluding exercisable "out of the money" options, constituting
approximately 64.45% of the outstanding shares of Robec Common Stock entitled
to vote at the Special Meeting. The affirmative vote of AmeriQuest would be
more than the simple majority of votes cast which is required to approve and
adopt the Plan of Merger even if all shares of Robec Common Stock were voted.
See "Share Ownership of Robec by Management and Certain Beneficial Owners."
AmeriQuest has agreed to vote all of the outstanding shares of Robec Common
Stock beneficially owned by it on the Record Date in favor of the approval and
adoption of the Plan of Merger.
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<PAGE>
STOCK OWNERSHIP OF ROBEC BY MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of August 1, 1995, or as of such other
date as may be noted below, information related to the beneficial ownership of
Robec Common Stock by (i) each person known to Robec to be the beneficial owner
of more than five percent of the outstanding shares of Robec Common Stock, (ii)
each director of Robec, (iii) the chief executive officer and certain named
executive officers of Robec, and (iv) all directors and current executive
officers as a group. In the case of directors and executive officers, this
information has been provided by them at the request of Robec.
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL OR NUMBER OF SHARES PERCENT OF COMMON
IDENTITY OF GROUP OF COMMON STOCK(1) STOCK OUTSTANDING(2)
--------------------- ------------------ --------------------
<S> <C> <C>
AmeriQuest (3)................... 2,224,029 50.10
Robert H. Beckett(4)(5).......... 452,812 10.20
Mark T. Lindee(6)................ 351,500 7.92
Dimensional Fund Advisors
Inc.(7)......................... 281,100 6.33
G. Wesley McKinney(4)............ 132,420 2.98
Robert S. Beckett(8)............. 49,342 1.11
Alexander C. Kramer, Jr.......... 0 --
John P. Puckett.................. 3,500 *
Louis J. Cissone................. 1,700 *
Edward Ray....................... 1,200 *
George R. Hornig................. 0 --
Richard J. Pinola................ 0 --
All directors and current
executive officers
as a group (11 persons)(5)(8)... 641,044 14.44
</TABLE>
- --------
(1) In accordance with SEC regulations, the table lists all shares as to which
such persons have or share the power to vote or direct disposition. Unless
otherwise indicated, each person has the sole power to vote and to direct
disposition of the shares listed as beneficially owned by such person. The
table includes options exercisable on August 1, 1995 or within 60 days
thereafter, regardless of whether such options are "in-the-money" or "out-
of-the-money," but does not include options which are not exercisable
within 60 days of such date.
(2) Percentages calculated with reference to an aggregate 4,439,180 shares of
Robec Common Stock outstanding on August 1, 1995.
(3) On September 22, 1994, Messrs. Robert H. Beckett, Robert S. Beckett,
Alexander C. Kramer, Jr. and G. Wesley McKinney, exchanged 1,427,913,
281,733, 96,803 and 417,580 shares, of Robec Common Stock, respectively,
for shares of AmeriQuest Common Stock. Accordingly, AmeriQuest became the
holder of shares of Robec Common Stock representing 50.1% of the
outstanding stock of Robec as of that date. AmeriQuest has agreed that
until the effective date of the Merger, it will vote its shares of Robec
Common Stock against the nomination or election of any directors of Robec
other than Robec's current directors, or any successors nominated by its
current directors, and also to vote such shares in favor of the Plan of
Merger. See "Information Regarding the Merger--The Amended Agreement--The
Exchange."
(4) The address of Messrs. Robert H. Beckett, G. Wesley McKinney and Robert S.
Beckett is: c/o Robec, Inc., 425 Privet Road, Horsham, Pennsylvania 19044.
(5) Excludes 49,342, 108,350 and 108,350 shares of Robec Common Stock held by
Mr. Beckett's children, Robert S. Beckett, Susan K. Childers and Thomas T.
Beckett, respectively.
(6) As of August 23, 1995 as reflected in Amendment No. 1 to Schedule 13D dated
August 23, 1995. According to the Schedule 13D, Mr. Lindee has sole voting
power over 326,500 shares of Robec Common Stock and shares voting power
with respect to 25,000 shares of Robec Common Stock.
(7) As of December 31, 1994 as reflected in Amendment No. 3 to Schedule 13G
dated March 1995. According to Dimensional Fund Advisors Inc.
("Dimensional"): (i) it is a Delaware corporation; (ii) it
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is an investment adviser registered under Section 203 of the Investment
Advisers Act of 1940; (iii) it is deemed to have beneficial ownership of
281,100 shares of Robec Common Stock as of December 31, 1994, all of which
shares are held in portfolios of DFA Investment Dimensions Group, Inc., a
registered open-end investment company (the "Fund"), or in series of the DFA
Investment Trust Company, a Delaware business trust (the "Trust"), or the
DFA Group Trust and DFA Participation Trust, investment vehicles for
qualified employee benefit plans, for all of which Dimensional serves as
investment manager. Dimensional disclaims beneficial ownership of all of
such shares; (iv) persons who are officers of Dimensional also serve as
officers of the Fund and the Trust, and in such capacities vote 99,200
shares of Robec Common Stock owned by the Fund and 16,100 shares of Robec
Common Stock owned by the Trust; and (v) it has its principal business
office at 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401.
(8) Excludes 452,812 108,350 and 108,350 shares of Robec Common Stock held by
Mr. Beckett's father Robert H. Beckett, his sister Susan K. Childers and
his brother Thomas T. Beckett, respectively.
* Less than 1%
CERTIFIED PUBLIC ACCOUNTANTS
Coopers & Lybrand L.L.P. ("Coopers & Lybrand") has served as Robec's
independent accountants since 1987. Robec has requested that a representative
of Coopers & Lybrand attend the Special Meeting. Such representative will have
an opportunity to make a statement, if he or she desires, and will be available
to respond to appropriate shareholders' questions.
BUSINESSES OF THE COMPANIES
AMERIQUEST
GENERAL
AmeriQuest Technologies, Inc. has its principal office at 3 Imperial
Promenade, Ste. 300, Santa Ana, CA 92707, and its telephone number is (719)
437-0099. AmeriQuest is a Delaware corporation that conducts business through
its subsidiaries.
CDS Distribution, Inc., a Delaware corporation and wholly-owned subsidiary of
AmeriQuest ("CDS"), is a national value-added wholesale distributor of
microcomputers and related products to value-added resellers, dealers and
computer retailers. CDS markets, sells and supports a variety of products
ranging from individual components, which are typically sold in volume, to
complete systems that have been fully configured, assembled and tested prior to
delivery to its customers.
Kenfil was formed as a partnership in 1983 and was incorporated in California
in 1984. In April 1992, Kenfil reincorporated in the state of Delaware. Kenfil
was acquired by AmeriQuest in a two-step transaction completed in September,
1994. Kenfil is a distributor primarily of microcomputer software. Kenfil
presently carries over 3,500 software titles from over 200 software publishers
for sale to approximately 1,100 resellers. Kenfil focuses on software products
in high growth categories such as the business application, utilities,
graphics, communications, consumer (education and entertainment) and
productivity segments. See "Recent Developments--Termination of Entertainment
Software Business."
CMS Enhancements, Inc., a California corporation and wholly-owned subsidiary
of AmeriQuest ("CMS"), is a supplier of hard disk drive subsystems for IBM
compatible and other leading personal business computers, including Apple and
Compaq. CMS also offers disk array, magneto optical, CD-ROM, floppy disk drives
and magnetic tape back-up subsystems having a variety of data storage
capacities as well as personal computers, networking, graphics, communications
and connectivity and accessory products.
NCD, a Florida corporation, was acquired by AmeriQuest on November 14, 1994.
NCD is a national value-added wholesale distributor of computer hardware to
value-added resellers, systems integrators and computer retailers. NCD is based
in Hollywood, Florida and serves as AmeriQuest's Southeast distribution
facility.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The business of AmeriQuest is described in greater detail in the periodic
reports filed by AmeriQuest with the Securities and Exchange Commission
pursuant to Section 13(a) of the Securities Exchange Act of 1934 (the "Exchange
Act"), portions of which are incorporated herein by the reference thereto
below:
(a) Part I, Item 1. Business, as contained in AmeriQuest's Annual Report
on Form 10-K/A for the year ended June 30, 1994.
(b) Part II, Item 6. Selected Financial Data, as contained in
AmeriQuest's Annual Report on Form 10-K/A for the year ended June 30, 1994.
(c) Part II, Item 7. Management's Discussion and Analysis of Results of
Operations and Financial Condition, as contained in AmeriQuest's Annual
Report on Form 10-K/A (Amendment No. 9) for the year ended June 30, 1994;
and as set forth as Part I, Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition, in AmeriQuest's Quarterly
Reports on Form 10-Q/A (Amendment No. 4) for the three months ended
September 30, 1994, the six months ended December 30, 1994; and
AmeriQuest's Quarterly Report on Form 10-Q/A (Amendment No. 1) for the nine
months ended March 31, 1995.
RECENT DEVELOPMENTS
COMPUTER 2000 INVESTMENT. Computer 2000 is a company organized under the laws
of the Federal Republic of Germany. Computer 2000 claims to be the third
largest distributor of computer products in the world with approximately $2.6
billion in sales in fiscal 1994.
On November 14, 1994, AmeriQuest and Computer 2000 entered into an Investment
Agreement and a Loan Agreement pursuant to which Computer 2000 agreed to invest
approximately $50 million in AmeriQuest in exchange for an approximately 51%
ownership interest in AmeriQuest, including shares already owned by Computer
2000. The transaction had been approved by the boards of both companies, and
was subject to approval by the stockholders of AmeriQuest, to certain
regulatory approvals and to satisfaction of certain other conditions. Under the
terms of the Investment Agreement and the related Loan Agreement, Computer 2000
has initially loaned to AmeriQuest 2000, Inc., a Delaware corporation and a
wholly-owned subsidiary of AmeriQuest ("Sub"), $18 million (the "Loan"). Sub's
repayment obligations under the Loan are secured by a pledge by AmeriQuest of a
security interest in all of the outstanding shares of capital stock of NCD and
Kenfil and the 2,224,029 shares of Robec Common Stock owned by AmeriQuest. The
Investment Agreement further provided that, subject to certain conditions, on
or before September 1, 1995, Computer 2000 had an option to invest an
additional $32 million in AmeriQuest, which would bring Computer 2000's total
ownership interest to approximately 22.9 million shares or 51% of the total
outstanding shares of AmeriQuest Common Stock (assuming consummation of the
Merger) at an average price of $2.22 per share. The ability of AmeriQuest to
require Computer 2000 to make the $32 million investment was contingent upon a
number of conditions, including AmeriQuest's meeting certain monthly and
cumulative after-tax operating profitability conditions during the first half
of calendar 1995. AmeriQuest failed to meet these profitability conditions and
other conditions and, therefore, was required to renegotiate the arrangement
with Computer 2000.
As a result of these negotiations, Computer 2000, its wholly-owned subsidiary
("C2000 Sub") and AmeriQuest entered into the Purchase Agreement on August 7,
1995 under which Computer 2000 or C2000 Sub will acquire shares of AmeriQuest's
Preferred Stock and options, warrants and certain other rights to purchase
shares of AmeriQuest's Common and Preferred Stock in exchange for delivery of
the promissory notes evidencing the Loan (the "Notes") and payment of
$31,250,000, subject to certain conditions. Under these transactions, Computer
2000 and/or C2000 Sub will acquire control (approximately 62% of the
outstanding voting capital stock) of AmeriQuest.
On August 21, 1995, at the closing provided for in the Purchase Agreement,
the Loan Agreement and the Investment Agreement were terminated and the
following transactions occurred:
(a) Computer 2000 assigned the Notes to AmeriQuest in exchange for the
issuance by AmeriQuest of 810,811 shares of AmeriQuest's Series A Preferred
Stock (convertible into 8,108,110 shares of
19
<PAGE>
Common Stock, subject to adjustment) and warrants to purchase 657,289
shares of Series D Preferred Stock (convertible up to 6,572,890 shares of
Common Stock, subject to adjustment) exercisable at $0.53 per share of
Series D Preferred Stock ($.053 per share of Common Stock on an as-if-
converted to Common Stock basis).
(b) Computer 2000 or C2000 Sub purchased from AmeriQuest, for
$31,250,000, 1,785,714 shares of Series B Preferred Stock (convertible into
17,857,140 shares of Common Stock, subject to adjustment) and warrants to
purchase 746,186 shares of Series D Preferred Stock (convertible up to
7,461,860 shares of Common Stock, subject to adjustment) exercisable at
$.53 per share of Series D Preferred Stock ($.053 per share of Common Stock
on an as-if-converted to Common Stock basis).
Assuming the exercise of the warrants referred to in paragraphs (a) and (b)
above (the "Warrants"), the conversion of the Preferred Stock issuable upon
such exercise and the conversion of the Preferred Stock issued at the closing
as described in paragraphs (a) and (b), AmeriQuest will have issued 40,000,000
shares of Common Stock at an average purchase price of $1.25 per share and
Computer 2000 and C2000 Sub will own approximately 62% of AmeriQuest's
outstanding voting stock.
The Warrants referred to above will be exercisable in increments equal to
approximately one-eighth of the total number of shares purchasable thereunder
in the event that any of the following gross sales targets (each a "Performance
Milestone") is achieved by AmeriQuest during the eight quarters in the 24-month
period ended June 30, 1997: $150 million for the first quarter, $160 million
for the second quarter, $190 million for the third quarter, $200 million for
the fourth quarter, $220 million for the fifth quarter, $230 million for the
sixth quarter, $270 million for the seventh quarter and $280 million for the
eighth quarter. However, whether or not AmeriQuest achieves any or all of the
Performance Milestones, (i) Warrants for 700,000 shares of Series D Preferred
Stock (convertible up to 7,000,000 shares of Common Stock, subject to
adjustment), in addition to the Warrants exercisable due to the achievement of
any Performance Milestones, will become exercisable on and after July 31, 1996
and (ii) Warrants for the remaining shares of Series D Preferred Stock will
become exercisable on or after July 31, 1997. Moreover, the Warrants may be
exercised at any time to the extent required in order for Computer 2000 and
C2000 Sub to own 51% of the outstanding voting shares of AmeriQuest's capital
stock. The Warrants will cease to be exercisable three years after the closing.
(c) In consideration for Computer 2000's exchange of the Notes and Computer
2000's or C2000 Sub's additional investment of $31,250,000 as described in
paragraphs (a) and (b) above, AmeriQuest also granted to Computer 2000 or
C2000 Sub the following pari passu rights with respect to other outstanding
warrants, options and other rights to acquire shares of AmeriQuest's Common
Stock that AmeriQuest has previously granted, or is obligated to grant in
the future, to others:
(i) If AmeriQuest issues in connection with its acquisition of Robec
any shares in excess of 2,800,000 shares of Common Stock, including all
shares already issued and all shares issued in the future, including
shares issued upon the exercise of options or warrants granted, assumed
or exchanged in connection with the Robec acquisition (such shares as
are so issued in excess of 2,800,000 shares are referred to as the
"Incremental Shares"), then Computer 2000 or C2000 Sub will have the
right, pursuant to certain warrants to be granted by AmeriQuest (the
"Acquisition Maintenance Warrants"), to purchase a number of share of
Series E Preferred Stock as will be convertible into a number of shares
of Common Stock that will be equal to the number of Incremental Shares
that are issued in connection with the Robec acquisition. The exercise
price of the Acquisition Maintenance Warrants will be $1.25 per share
of Series E Preferred Stock ($0.05 per share of Common Stock on an as-
if-converted to Common Stock basis). The Acquisition Maintenance
Warranties will become exercisable at such time, and from time-to-time,
as Incremental Shares are issued and, for each such issuance, will
remain exercisable for six months. See "Information Regarding the
Merger--The Merger" for information on the number of AmeriQuest shares
that may be issued in the Merger to Robec shareholders. Additional
shares may also be issued upon the exercise of Robec employee stock
options to be exchanged for AmeriQuest options at the Merger closing.
20
<PAGE>
(ii) In connection with a private placements in June 1995 by
AmeriQuest of equity securities, AmeriQuest issued stock and warrants
to investors, which included warrants to purchase up to 5,149,574
shares of Common Stock at an exercise price of $1.05 per share (the
"Unit Warrants"). If and to the extent that any of the Unit Warrants
are exercised, then Computer 2000 or C2000 Sub will have the right,
pursuant to certain warrants to be issued by AmeriQuest (the "Unit
Maintenance Warrants"), to purchase a number of Series F Preferred
Stock that will be convertible into a number of shares of Common Stock
equal to the shares issued upon the exercise of the Unit Warrants (the
"Unit Warrant Shares"). The exercise price of the Unit Maintenance
Warrants will be $5.25 per share of Series F Preferred Stock ($.525 per
share of Common Stock on an as-if-converted to Common Stock). The Unit
Maintenance Warrants will become exercisable only if and to the extent
that any Unit Warrant Shares are issued and, for each such issuance,
will remain exercisable for six months.
(iii) AmeriQuest will also grant to Computer 2000 or C2000 Sub an
option (the "Maintenance Option") to purchase a number of shares of
Common Stock (or other equity securities, as applicable) that will be
equal to the number of shares of Common Stock (or other equity
securities) that AmeriQuest issues upon exercise or conversion of all
currently outstanding options, warrants or other rights (other than
shares subject to the unit maintenance warrants and acquisitions
maintenance) to acquire (upon conversion or otherwise) any shares
("Additional Shares") of Common Stock or other equity securities of
AmeriQuest. The Maintenance Option will become exercisable from time-
to-time with respect to each issuance of an Additional Share upon the
issuance of such Additional Share, will terminate six months thereafter
( subject to extension under certain circumstances) and will be
exercisable for the same consideration and on the same terms as the
consideration for which and terms under which such Additional Shares is
issued.
(d) Consistent with Computer 2000 or CS2000 Sub's acquisition of a
majority of AmeriQuest's outstanding voting capital stock, changes were
made in AmeriQuest's Board of Directors and management. Upon the closing,
three of AmeriQuest's existing directors, Terren Peizer, Eric J. Werner and
William Silvis, resigned from the Board (Gregory A. White resigned as a
director effective July 11, 1995) and five persons designated by Computer
2000 were appointed directors of AmeriQuest. These designees, who will
constitute a majority of AmeriQuest's Board of Directors, are Steve
DeWindt, Klaus J. Laufen and Dr. Harry Krischik, who are three of Computer
2000's four co-presidents, Mark Mulford, who was a Managing Director of
Frontline Distribution Ltd., a United Kingdom corporation that is Computer
2000's largest non-German subsidiary, and Holger Heims, Computer 2000's
Director of Investment, Tax and Legal. Mr. DeWindt will become Chairman of
the Board and Chief Executive Officer of AmeriQuest, and Mr. Mulford will
become AmeriQuest's President and Chief Operating Officer. AmeriQuest
entered into an indemnification agreement with each director designated by
Computer 2000 and agreed to use commercially reasonable efforts to maintain
directors' and officers' liability insurance for their benefit. In
addition, AmeriQuest entered into similar indemnification agreements with
each existing director of AmeriQuest, and each of those directors and
Computer 2000 entered into mutual releases for any claims either party may
have against the other, with certain exceptions. Harold L. Clark,
AmeriQuest's Chief Executive Officer, and Stephen G. Holmes, AmeriQuest's
Secretary, Treasurer and Chief Financial Officer, resigned following the
closing and executed severance agreements. Pursuant to the Amended
Agreement, Robert H. Beckett, Chairman and President of Robec, is to be
appointed to AmeriQuest's Board of Directors following the completion of
the Merger.
Pursuant to the Purchase Agreement, Computer 2000 or C2000 Sub, as
applicable, will have certain registration rights with respect to their shares
of AmeriQuest.
Under the Purchase Agreement, Computer 2000 and C2000 Sub have agreed that,
for a three year period following the closing, AmeriQuest or any subsidiary of
AmeriQuest will not (i) merge or consolidate with Computer 2000, C2000 Sub or
any of their affiliates, (ii) sell or otherwise dispose of all or substantially
all its
21
<PAGE>
assets to Computer 2000, C2000 Sub or any of their affiliates or (iii) adopt
any plan of liquidation or dissolution proposed by Computer 2000, C2000 Sub or
any of their affiliates unless the transaction is approved by the affirmative
vote of at least two-thirds of the outstanding shares of Common Stock of
AmeriQuest held by shareholders other than Computer 2000, C2000 Sub or their
affiliates or unless the fair market value of the consideration received by
holders of AmeriQuest's Common Stock is at least $1.25 per share. Computer 2000
has no present intention to merge or consolidate AmeriQuest with Computer 2000,
C2000 Sub or any of their affiliates.
The Purchase Agreement also provides that, if AmeriQuest incurs any
liability, costs or expenses in connection with certain contingencies
(primarily related to existing litigation and employee terminations) in excess
of $2,000,000, then AmeriQuest may be required to issue to Computer 2000 or
C2000 Sub additional shares of Common Stock equal to the amount of such excess
divided by $1.25. Further, pursuant to the Purchase Agreement, AmeriQuest has
agreed to indemnify Computer 2000, C2000 Sub and their representative
shareholders, officers, directors, agents, employees, representatives,
attorneys, successors and assigns from losses, costs, expenses and damages
arising out of any misrepresentation or breach by AmeriQuest under the Purchase
Agreement or the related agreements in excess of $100,000 in the aggregate.
Such indemnity will, at Computer 2000's or C2000 Sub's option, be payable in
cash or shares of AmeriQuest's Common Stock valued at the lesser of $1.25 or
the then current market price based on a five day average.
THE TRANSACTIONS PROVIDED FOR IN THE PURCHASE AGREEMENT WOULD NORMALLY
REQUIRE APPROVAL OF SHAREHOLDERS ACCORDING TO THE SHAREHOLDER APPROVAL POLICY
OF THE NEW YORK STOCK EXCHANGE (THE "EXCHANGE"). THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS OF AMERIQUEST DETERMINED THAT DELAYS NECESSARY IN SECURING
SHAREHOLDER APPROVAL PRIOR TO THE PROPOSED TRANSACTION WOULD SERIOUSLY
JEOPARDIZE THE FINANCIAL VIABILITY OF AMERIQUEST. AMERIQUEST IS FINANCIALLY
DISTRESSED AND IN THE OPINION OF THE AUDIT COMMITTEE, FINANCIAL SURVIVAL IS
HEAVILY DEPENDENT UPON EFFECTING THE PROPOSED TRANSACTION WITH COMPUTER 2000 AT
THE EARLIEST PRACTICABLE DATE. BECAUSE OF THE DETERMINATION, THE AUDIT
COMMITTEE, PURSUANT TO AN EXCEPTION PROVIDED IN THE EXCHANGE'S SHAREHOLDER
APPROVAL POLICY FOR SUCH A SITUATION, EXPRESSLY APPROVED AMERIQUEST'S OMISSION
TO SEEK THE SHAREHOLDER APPROVAL THAT WOULD OTHERWISE HAVE BEEN REQUIRED UNDER
THAT POLICY. THE EXCHANGE HAS ACCEPTED AMERIQUEST'S APPLICATION OF THE
EXCEPTION.
The authorized number of shares of AmeriQuest's Common Stock are insufficient
to accommodate the transactions provided for in the Purchase Agreement and the
exercise of currently outstanding options, warrants and conversion rights that
AmeriQuest granted prior to the Purchase Agreement. It is contemplated that, as
soon as practicable following the closing, AmeriQuest will seek to amend its
Articles of Incorporation to increase the authorized shares of Common Stock
and, as required, seek approval to increase authorized shares under applicable
employee stock option plans and with respect to outstanding options on other
rights that require shareholder approval, and that Computer 2000 and C2000 Sub
will vote for such amendments and increases. The Preferred Stock to be issued
pursuant to the Purchase Agreement will automatically convert to Common Stock
at such time as the additional requisite shares of Common Stock are authorized.
On November 17, 1994, three days after the announcement of the proposed
investment by Computer 2000 pursuant to the Investment Agreement, an action was
filed against AmeriQuest, the Board of Directors of AmeriQuest and Computer
2000 pursuant to which the plaintiffs seek to have the court either (i) enjoin
the consummation of the transactions contemplated by the Investment Agreement
or (ii) enter a monetary judgment against the Directors of AmeriQuest for an
alleged failure of the Board of Directors to discharge their fiduciary duties
in causing AmeriQuest to enter into the Investment Agreement. AmeriQuest and
the other defendants are defending the action. AmeriQuest is only a nominal
defendant, and in the opinion of AmeriQuest management this action will have no
material adverse effect on AmeriQuest's financial condition or results of
operations. The Board of Directors of AmeriQuest has received an opinion from
L.H. Friend, Weinress & Frankson, Inc. that the Investment Agreement and the
transactions contemplated thereby were fair to AmeriQuest and its stockholders,
from a financial point of view.
ACQUISITION OF NCD. Effective November 15, 1994, AmeriQuest issued 1,864,767
shares of AmeriQuest Common Stock and paid $3,413,312 in exchange for 100% of
the issued and outstanding equity securities of NCD.
22
<PAGE>
GENERAL. NCD was established in 1987 by Greg White and Tom Ross to distribute
computer hardware to value-added resellers ("VARs"), systems integrators and
computer retailers. NCD has grown from a single location in Hollywood, Florida
selling in the southeastern United States, to a company with six distribution
centers, selling products throughout the United States and Latin America. NCD
sells to a broad base of customers, with its largest customer accounting for
only 2.1% of sales. NCD is a leading distributor of microcomputer hardware to
VARs, systems integrators and computer retailers. The Company purchases its
products directly from over fifty different manufacturers and sells to a base
of more than 8,000 customers.
PRODUCTS. NCD sells leading products in network systems, data storage and
computer peripherals. The strategic focus of management has been to add vendors
and to continually expand and change the mix of the product line to ensure that
high demand, fast moving products are available to customers. The expansion of
the product line also protects NCD from relying on any one vendor to too great
a degree. For the fiscal year ending March 31, 1993, NCD generated over 65% of
its sales from its top four vendors. During this last fiscal year, the top
three vendors accounted for only 35% of total sales. Based on the Company's
projected sales by product, the top three vendors (Leading Edge, Western
Digital and Samsung) are expected to account for only 29% of sales for the year
ending March 31, 1995.
NCD is one of the largest distributors in the United States for Epson storage
products, Leading Edge computers, AOC monitors, Citizen printers, CTX, Hyundai,
Acer and Samsung. Its recognition as one of the leading national distributors
was reinforced when AST made NCD only its fifth authorized distributor, joining
Ingram Micro D, Merisel, Tech Data and Gates/FA. The Company's leadership
position in the Latin American market was also recognized by Hewlett Packard
and Apple Computer, both of which made NCD an authorized distributor to Latin
America during fiscal 1994.
The following is a description of the major categories of products currently
sold by NCD and the principal current vendors of those products.
Microcomputers--NCD distributes desktop and portable personal computers and
multiuser microcomputers manufactured by Acer, AST, Samsung, Hyundai and
Zenith.
Printers--NCD distributes a broad line of dot matrix, laser and ink-jet
printers manufactured by Citizen, Panasonic, Lexmark and Samsung.
Monitors and Terminals--NCD distributes monitors and terminals manufactured
by CTX, AOC, AST, Samsung, Sony, Goldstar, Wyse, Viewsonic, Hyundai and Leading
Edge.
Local Area Networks--A local area network ("LAN") permits microcomputers to
communicate with one another and to function on an integrated basis. NCD
distributes LAN specialized hardware products manufactured by Allied Telesis,
Alta Research, Boca Research, CNET, SMC, and Xecom.
Accessories and Supplies--NCD distributes hard and floppy disk drives, board
products, diskettes, stand-by power supplies, modems and other communications
products, accessories and supplies manufactured by numerous companies including
Boca Research, Colorado Memory Systems, Diamond Multimedia, Micro Solutions,
Tandberg Data, PNY Memory and Orchid.
VENDOR RELATIONS. To maintain a strong relationship with its principal
vendors, NCD focuses on marketing the products of a limited number of key
vendors. NCD selects its product line to minimize competition among vendors'
products while maintaining some overlap to provide protection against product
shortages or discontinuations. In addition, NCD enhances its relationship with
its vendors by providing feedback on products, assisting in new product
development and working with vendors to develop marketing programs.
23
<PAGE>
NCD, like AmeriQuest and Robec, sells products throughout the United States
for vendors on a non-exclusive basis without geographic restrictions. NCD has
distribution agreements with most of its vendors and believes they are in the
form customarily used by each vendor and generally contain provisions which
allow termination by either party upon as little as 30 days notice. Most of
NCD's major distribution agreements provide price protection by giving NCD a
credit, subject to specified limitations, in the amount of any price reductions
by the vendor between the time of the initial sale to NCD and the subsequent
sale by NCD to its customer. However, numerous situations arise where it is not
possible to return all obsolete inventory. Accordingly, NCD has established
obsolete inventory reserves against the occurrence of such situations. Most of
the major distribution agreements also give NCD qualified return privileges on
slow-moving inventory. NCD's distribution agreements do not restrict NCD from
selling similar products manufactured by competitors. Any minimum purchase
provisions in NCD's distribution agreements are at levels that NCD believes do
not impose significant risk.
From time to time, the demand for certain products sold by NCD exceeds the
supply available from the vendor. NCD believes that its ability to compete has
not been adversely affected to a material extent by these periodic shortages,
although sales may be adversely affected for an interim period. In order to
limit the impact of such shortages, NCD generally attempts to include
comparable products from more than one vendor in its product line and endeavors
to provide direction to its customers in their selection of products.
COMPETITION. Competition in the distribution of microcomputer products is
intense. Principal national distributors are Micro D, Merisel and Tech Data.
NCD also competes with numerous manufacturers, resellers, retailers and
regional distributors. Most of NCD's major competitors have substantially
greater financial resources than NCD has or than the Combined Company will
have.
Competition is primarily based upon availability of product, price, speed of
delivery, convenience, technical support and other support services. NCD
believes that it is generally competitive with respect to each of these factors
and that its principal, competitive advantages are its technical support and
other support services, and speed of delivery.
SALES AND MARKETING. NCD is a marketing and product driven company whose
focus on sales and customer service mentality pervades throughout the entire
organization. NCD is continually broadening its customer base and sells high
quality, high demand products. In order to do this, management knows that NCD
must consistently provide high levels of service and support, and must expand
its product base to appeal to greater segments of the market. NCD's ability to
broaden its customer base is evidenced by the fact that for the fiscal year
1994, the single largest customer accounted for only 2.1% of $196.5 million of
net sales.
NCD offers its customers a broad product selection and gives them customized
service and support by a highly trained staff. Customers are provided with
quick access to sales and technical support personnel ensuring that questions
are answered and problems resolved in a most efficient and timely manner. When
appropriate, NCD provides customers with educational and promotional seminars
to explain new products and relevant features. This is particularly helpful in
Latin America.
NCD's responsiveness is evidenced by the fact that all orders received by
5:00 p.m. will go out the same day and that there is a one day turnaround on
any system configurations. There is also a one day turnaround on any customer
returns. Salespeople can look up on-line, the stocking levels and product
availability at any of the Company's distribution centers and can react to
customers quickly and efficiently.
NCD has 62 salespeople who are primarily telemarketers selling to an
established base of over 8,000 customers. NCD also has one field salesman,
calling in California. Salespeople are paid a base salary and a percentage of
gross profit over and above a prescribed minimum. Salespeople are given
ongoing, in-depth training.
NCD reaches its clients and potential clients through its ongoing
telemarketing efforts, weekly faxed broadcasts of specific product sales
programs, monthly direct mail efforts and through its catalog, which is mailed
24
<PAGE>
to customers twice a year. NCD also advertises regularly in Computer Reseller
News, VARBusiness, CRN MicroMarketplace and Reseller Management. NCD also
participates in certain trade shows. Over the next year, NCD will be an
exhibitor at the following trade shows:
. Comdex - Atlanta (Spring) . Comdex Sucesu - Brazil
. Comdex - Las Vegas (Fall) . Softel - Chile
. NetWorks - Dallas (Summer) . Inforven - Venezuela
. NetWorks - Boston (Winter) . Computel - Columbia
NCD was one of the first large wholesale distributors to open channels of
distribution into Latin America. NCD has been successful in developing this
segment because of its long business history in the Latin American market and
its understanding of the complexities of duties, import and export taxes, and
the governmental regulations peculiar to individual countries in South and
Central America. NCD has a multi-lingual marketing, sales, credit and technical
support staff. The majority of NCD's sales to Latin America are actually to
agents and distributors who have offices in South Florida and pay in U.S.
dollars drawn on local banks. The agents and distributors are responsible for
actually shipping the products into Latin America.
NCD is optimistic about the long term prospects for the Latin American market
and establishing high quality channels of distribution into the market has been
an important part of its corporate growth strategy. However, the business
generated through large resellers in Latin America tends to be lower margin
business than that which is available domestically. In addition, Latin American
markets may be more volatile than domestic markets. NCD plans to expand its
offshore business as profitable opportunities exist and will look to
specifically broaden its business in Latin America, but the highest growth area
for NCD will continue to be the domestic market for the foreseeable future.
EMPLOYEES. As of October 31, 1994, NCD had 179 full time employees, including
87 in sales, support and purchasing/marketing functions. None of NCD's
employees are covered by a collective bargaining agreement. NCD considers its
relations with its employees to be good.
PROPERTIES. NCD's executive, administrative and domestic sales offices are
located in Hollywood, Florida. This facility consists of 31,887 square feet of
office space. This is a leased space with a termination date of August 1997.
NCD maintains an international sales and administrative office in Miami along
with a Miami shipping warehouse. The current configuration is 10,000 square
feet of office with 20,000 square feet of warehouse. In May 1995, NCD has plans
to relocate to a new warehouse/office of which 3,700 square feet will be office
and 26,300 will be warehouse and storage.
NCD maintains a total of six shipping warehouses. Five of these locations are
outside the state of Florida. These warehouses are predominantly shipping
points, having no sales, marketing or administrative support. Customer returns
are accepted at four locations and tech support personnel are located in four
locations.
NCD leases all of it's facilities. The leases generally provide for base
minimum rental rates per square foot. In addition, NCD is generally responsible
for its pro rata share of maintenance expenses for common areas, real estate
taxes and insurance.
The following table sets forth information regarding NCD's locations:
<TABLE>
<CAPTION>
LOCATION SQ. FEET LEASE EXPIRATION YR OPENED
-------- -------- ---------------- ---------
<S> <C> <C> <C>
Hollywood, FL 31,887 08/01/97 10/92
Miami, FL** 30,000 10/31/94 06/89
Miami, FL 30,000 06/28/2000 Est 02/01/95
Visalia, CA 46,800 03/01/99 04/94
Norcross, GA 13,800 01/31/95 02/90
Fairfield, NJ 10,700 07/10/97 07/09/02
Addison, IL 15,582 11/30/97 12/01/92
Carrollton, TX 13,520 03/31/96 03/31/93
</TABLE>
- -------
** Miami, FL is in transition to move to a new location. A hold over period is
in effect until the new location is occupied. Lease payments at the new
location will not begin until occupancy occurs.
25
<PAGE>
ROBEC
GENERAL
Robec, Inc. has its principal office at 425 Privet Road, Horsham,
Pennsylvania 19044, and its telephone number is (215) 675-9300. The predecessor
of Robec was incorporated in Nevada in 1977. On August 16, 1989, this
predecessor company was merged into a new Pennsylvania corporation to form
Robec. Robec is primarily a national value-added wholesale distributor of
microcomputers and related products to value-added resellers, dealers and
computer retailers and primarily operates in this one business segment. Robec
markets, sells and supports a variety of products ranging from individual
components, which are typically sold in volume, to complete systems that have
been fully configured, assembled and tested prior to delivery to its customers.
Upon completion of the Merger, Robec will serve as AmeriQuest's Northeast
distribution facility.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The business of Robec is described in greater detail in the periodic reports
filed by Robec with the Securities and Exchange Commission pursuant to Section
13(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), portions of
which are incorporated herein by the reference thereto below:
(a) Part I, Item 1. Business, as contained in Robec's Annual Report on
Form 10-K/A (Amendment No. 1) for the year ended December 31, 1994.
(b) Part II, Item 6. Selected Financial Data, as contained in Robec's
Annual Report on Form 10-K/A (Amendment No. 1) for the year ended December
31, 1994.
(c) Part II, Item 7. Management's Discussion and Analysis of Results of
Operations and Financial Condition, as contained in Robec's Annual Report
on Form 10-K/A (Amendment No. 1) for the year ended December 31, 1994; and
as set forth as Part I, Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition, in Robec's Quarterly Report
on Form 10-Q/A (Amendment No. 1) for the six months ended June 30, 1995.
INFORMATION REGARDING THE MERGER
THE MERGER
The Amended Agreement provides that the Merger will be consummated if the
approval of Robec's shareholders required therefor is obtained and all other
conditions to the Merger are satisfied or waived. Upon consummation of the
Merger, AmeriQuest Sub will be merged with and into Robec, with Robec surviving
the Merger as a wholly-owned subsidiary of AmeriQuest. The name of the
surviving entity will be AmeriQuest/Robec, Inc. (previously defined as the
"Surviving Corporation"). Upon consummation of the Merger, each share of Robec
Common Stock that is outstanding on the Effective Date, other than shares held
by AmeriQuest or by holders of Robec Common Stock who perfect their statutory
dissenters rights, will be converted automatically into the right to receive
.82994 (previously defined as the "Exchange Ratio") shares of newly issued
AmeriQuest Common Stock; provided, however, that in the event that the lesser
of (A) the mean trading price of AmeriQuest Common Stock on the New York Stock
Exchange on the fourth trading day prior to the Meeting Date or (B) the average
of the mean trading prices of AmeriQuest Common Stock on the New York Stock
Exchange for each of the 20 trading days prior to the fourth trading day prior
to the Meeting Date (the lesser of the amounts determined pursuant to (A) or
(B) above, the "Market Price"), is less than $3.00 per share, the Exchange
Ratio shall be equal to the sum of (A) the product of (i) .63075 multiplied by
(ii) a quotient, the numerator of which is $3.00 and the denominator of which
is the Market Price plus (B) .19869. (Robec shareholders may call 1-800-788-
4267 beginning the morning of the third trading day prior to the Meeting Date
to learn the final Exchange Ratio.) After the Merger, holders of Robec Common
Stock, other than AmeriQuest, will possess no further interest in, or rights as
shareholders of, Robec.
26
<PAGE>
The following table illustrates the Exchange Ratio and consideration to be
received by Robec shareholders in the Exchange and the Merger using several
possible Market Prices.
<TABLE>
<CAPTION>
AGGREGATE NUMBER
OF SHARES OF
VALUE OF AMERIQUEST AMERIQUEST COMMON
COMMON STOCK TO BE STOCK
EXCHANGE RECEIVED FOR 1 SHARE TO BE RECEIVED BY
MARKET PRICE RATIO OF ROBEC COMMON STOCK ROBEC SHAREHOLDERS
------------ -------- --------------------- ------------------
<C> <C> <C> <S>
$3.50 0.82944 $2.90 3,655,398
$3.00 0.82944 $2.49 3,655,398
$2.50 0.95591 $2.39 4,242,036
$2.00 1.14482 $2.28 5,082,040
$1.50 1.46019 $2.19 6,482,046
</TABLE>
Pennsylvania law contains certain restrictions on corporate takeovers. Robec
has expressly elected in its Articles of Incorporation and Bylaws not to be
governed by these provisions of Pennsylvania law. By previously opting out of
the anti-takeover provisions of Pennsylvania law, Robec was able to use a two-
step structure and complete the Exchange prior to shareholder approval of the
Plan of Merger.
BACKGROUND OF THE MERGER
Following an extended period of growth and relatively stable profitability
between 1984 and 1990, Robec began to experience difficulty in 1991 and
incurred substantial losses in 1992, 1993 and the first three quarters of 1994
(these losses have continued through the second quarter of 1995). Price
discounting by its competitors forced Robec to reduce its prices, resulting in
deteriorating gross margins. The effects of price discounting by competitors
were compounded by customers' increasing focus on price as the basis for
purchasing decisions which reduced Robec's ability to distinguish itself based
on service. Finally, as a result of Robec's failure to comply with certain
covenants in its bank credit agreement, Robec's banks limited its borrowings
under its line of credit.
In March, 1994, Robec hired Penn Hudson Financial Group ("Penn Hudson") to
assist it in developing a plan to return to profitability. Penn Hudson advised
Robec's Board of Directors that the options available to Robec were to (i)
restructure operations to reduce costs, (ii) merge or be acquired or (iii)
liquidate Robec. The Board of Directors directed management to restructure
operations to reduce costs, investigate alternate financing sources and
investigate and solicit merger opportunities. Robec designed and implemented
cost reduction activities including, among other items, closing certain
warehouse and sales locations, downsizing its employee base and refocusing on
its core distribution business. While its losses have been reduced by these
activities, Robec is still operating at a loss.
In April, 1994, Robec and its banks reached an oral agreement to limit
Robec's borrowings under its line of credit to $18 million, of which not more
than $6 million could be based on qualifying inventory, with a commitment to
fund under the line of credit until at least May 11, 1994, which date was later
extended until June 30, 1994. At June 30, 1994, Robec and its banks entered
into an agreement whereby the banks agreed to forbear from taking any action
with respect to any known defaults until September 30, 1994. The forbearance
was contingent upon Robec receiving (and providing to the banks) by August 15,
1994 a firm written commitment from a source reasonably satisfactory to the
banks with respect to a sale, merger or refinancing under the express terms of
which sufficient funding would be provided to satisfy in full Robec's
obligations to the banks not later than September 30, 1994.
At June 30, 1994, Robec entered into a letter of intent with AmeriQuest
pursuant to which AmeriQuest would acquire Robec in an exchange by the
Principal Shareholders followed by a merger, pursuant to which
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<PAGE>
each Robec shareholder would receive .5 shares of AmeriQuest Common Stock for
each share of his or her Robec Common Stock or a total of approximately 2.22
million shares of AmeriQuest Common Stock. The letter of intent, the terms of
which were publicly announced by Robec and AmeriQuest, did not restrict Robec
from soliciting other merger or acquisition proposals, and Robec continued to
explore other acquisition alternatives. Robec also continued to seek financing
from a new lender which would loan to Robec a sufficient amount to repay the
banks and provide additional working capital.
On August 4, 1994, Robec's Board of Directors met to discuss the proposed
AmeriQuest transaction and was updated as to the status of negotiations with
potential alternative lenders and acquirors. Robec's Board of Directors was
presented with information relating to AmeriQuest and the synergies expected to
be created by combining AmeriQuest's and Robec's operations. Robec's Board of
Directors expressed concern that Robec was contributing a high proportion of
the revenues of the combined operations relative to the percentage of total
equity to be received by Robec's shareholders in the combined entity. Robec's
Board of Directors also expressed concern that the exchange ratio was subject
to market variances which could result in Robec's shareholders receiving shares
worth less than what was then expected. As a result of these concerns, Robec's
Board of Directors directed its Chairman to go back to AmeriQuest and attempt
to negotiate a higher exchange ratio as well as a floor which would guarantee
holders of Robec Common Stock that they would receive shares of AmeriQuest
Common Stock worth a specific minimum amount regardless of future fluctuations
in AmeriQuest's stock price. Robec's Board of Directors also requested that
additional information be obtained from AmeriQuest regarding AmeriQuest's
publicly announced agreement to acquire Kenfil. Robec's Board of Directors also
questioned whether the transaction needed to be completed in two steps rather
than one step, but was informed by the Chairman that the two-step structure was
a material aspect of AmeriQuest's offer and that the Principal Shareholders
were agreeable to the first step. The Chairman reported that AmeriQuest desired
to consolidate Robec for accounting purposes as soon as possible. Based upon
the fact that all shareholders would ultimately receive the same consideration,
Robec's Board of Directors accepted the two-step structure provided that its
other concerns were addressed. Robec's Board of Directors was informed that
Robec had not received any other substantive acquisition or alternative
financing proposals other than the acquisition proposal submitted by
AmeriQuest. Management also informed the Board of Directors that, in its
opinion, if all alternatives were exhausted and Robec was forced to liquidate,
Robec's assets could only be sold at a deep discount to book value for an
amount not likely to be in excess of Robec's liabilities. Management also
presented to the Board of Directors projections relating to the ability of
Robec to achieve profitability in 1995 as a stand-alone entity, which assumed
adequate financing would be available.
The Chairman successfully addressed with AmeriQuest the concerns expressed by
Robec's Board of Directors, and on August 11, 1994, Robec entered into an
Agreement and Plan of Reorganization (the "Agreement") providing for the
acquisition of the Company by AmeriQuest for approximately 2.8 million shares
of AmeriQuest Common Stock in a two step transaction in which the Principal
Shareholders would exchange, upon the satisfaction of certain conditions, at
least 50.1% of the outstanding shares of Robec Common Stock, for AmeriQuest
Common Stock at the then exchange ratio, with this exchange to be followed by a
merger in which each outstanding share of Robec Common Stock (other than shares
held by AmeriQuest or by shareholders who perfect their statutory dissenters
rights) would automatically be converted into the right to receive AmeriQuest
Common Stock at the then exchange ratio. Accordingly, the Principal
Shareholders would receive the same consideration per share of Robec Common
Stock in the Exchange as would be received by the holders of Robec Common Stock
in the Merger.
On September 8, 1994, Robec's Board of Directors met and received the oral
opinion of Compass that the consideration to be paid upon the terms and
conditions set forth in the Agreement to Robec's shareholders was fair, from a
financial point of view, to the current shareholders of Robec. Robec's Board of
Directors discussed management's 1995 projections relating to the operation of
Robec as a stand-alone entity. Robec's Board of Directors was also informed
that at this time no lender had firmly committed to provide Robec as a stand-
alone entity with a sufficient line of credit to repay its bank line of credit
and have sufficient remaining
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<PAGE>
credit for working capital. Robec's Board of Directors challenged the value of
management's projections based upon management's failure to demonstrate that
adequate financing could be arranged to maintain Robec as a stand-alone entity.
Robec's Board of Directors discussed the terms of the Agreement and the
analysis of Compass. As part of this discussion, the Chairman pointed out that
Robec's banks were insisting that they be paid in full and that a new credit
agreement be put in place in accordance with the June 30, 1994 forbearance
agreement. Following this discussion, the Chairman suggested requesting
AmeriQuest to clarify in the Agreement that Robec's banks would be paid in full
prior to or simultaneously with the Exchange and amending the Agreement to
insert this condition to replace the existing condition in the Agreement
providing that prior to the Exchange, AmeriQuest would arrange for Robec's
banks to be paid in full on or prior to September 30, 1994. The Board was also
informed that AmeriQuest was engaged in confidential negotiations to acquire
NCD, and that AmeriQuest was engaged in discussions with Computer 2000.
On September 20, 1994, Robec's Board of Directors received the written
opinion of Compass that the consideration to be paid to Robec's shareholders
under the Amended Agreement was fair, from a financial point of view, to the
shareholders of Robec. Also on September 20, 1994, Robec's Board of Directors
unanimously approved entering into the Amended Agreement, including the Plan of
Merger attached thereto, and borrowing up to a maximum of $20 million to be
lent by IBM Credit Corporation pursuant to a collateralized line of credit (the
"IBM Line of Credit"), subject to certain tests and other conditions (including
an AmeriQuest guarantee), to replace Robec's bank credit facility and the
proceeds of a portion of which would be used to repay all of its outstanding
borrowings under such bank credit facility simultaneously with the closing of
the Exchange.
On September 21, 1994, Robec entered into the Amended Agreement with
AmeriQuest and the Principal Shareholders and an Inventory and Working Capital
Financing Agreement dated September 21, 1994 with IBM Credit Corporation
relating to the IBM Line of Credit.
On September 22, 1994, Robec used the proceeds of a portion of the IBM Line
of Credit to repay all of its outstanding borrowings under its existing bank
credit facility. Also on September 22, 1994, as contemplated by the Amended
Agreement, the Principal Shareholders exchanged 2,224,029 shares of Robec
Common Stock, or approximately 50.1% of the outstanding shares of Robec Common
Stock, for 1,402,805 newly issued shares of AmeriQuest Common Stock, subject to
adjustment at the Merger closing to the same aggregate conversion ratio as will
apply to shares to be converted in the Merger.
Since September 22, 1994, Robec's Board of Directors has met regularly and
been updated by the Chairman as to the status of Robec's operations,
AmeriQuest's activities and the reasons for the delays in consummating the
Merger.
Due to the delay in the transaction, on June 30, 1995, Robec's Board of
Directors decided to review the proposed Merger in the context of existing
circumstances and requested additional information from AmeriQuest regarding
its current financial position, including (i) information regarding the
Computer 2000 transaction, (ii) the status of defaults and the
undercollateralization asserted by IBM Credit Corporation in connection with
its line of credit to AmeriQuest, (iii) the status of outstanding lawsuits
asserted against AmeriQuest and (iv) an updated list of outstanding AmeriQuest
shares and information regarding the issuance of additional AmeriQuest Common
Stock and rights to acquire AmeriQuest Common Stock issued without Robec's
consent in violation of the Amended Agreement. The Chairman informed Robec's
Board of Directors at that meeting that he had resigned as a director of
AmeriQuest on June 26, 1995, but that he would be willing to be reappointed
upon consummation of the Merger.
On July 25, 1995, Robec's Board of Directors met to review AmeriQuest's
response to Robec's Board of Directors' request for additional information. The
Chairman informed Robec's Board of Directors that AmeriQuest had offered
882,000 additional AmeriQuest common shares to compensate Robec's shareholders
29
<PAGE>
for dilution resulting from the issuance of approximately 6,000,000 shares of
AmeriQuest Common Stock in violation of the Amended Agreement. Robec's dilution
percentage of 14.7% was calculated based upon the percentage of shares of the
combined company which Robec's shareholders would have received had the Merger
been consummated on August 11, 1994. Robec's Board of Directors expressed a
lack of confidence in AmeriQuest's existing management and discussed the future
prospects of AmeriQuest. Many directors expressed confidence in Computer 2000
based upon previous meetings with Computer 2000 management and Computer 2000's
general reputation in the marketplace. Robec's Board of Directors then
recommended that the acquisition by Computer 2000 of a majority voting interest
in AmeriQuest be included as an additional condition to Robec's obligation to
consummate the Merger. The Board decided that if this additional condition were
added, Robec would be willing to forego its current ability to terminate the
Amended Agreement at any time. The Chairman then described a request made by
AmeriQuest that AmeriQuest desired to cap the Exchange Ratio adjustment
mechanism at $1.75 per share. The Chairman indicated that in return for Robec
agreeing to such a cap, AmeriQuest would agree to increase the base Exchange
Ratio and reduce the base price of the Exchange Ratio adjustment mechanism from
$3.00 per share to $2.50 per share. After discussion, Robec's Board of
Directors directed the Chairman to propose that the $3.00 per share base price
be reduced to $2.25 per share in return for adding a cap of $1.50 per share
(the price at which shares of AmeriQuest Common Stock were sold in the most
recent private placement), and that Robec be given the ability to terminate the
Amended Agreement in the event the Market Price is below the cap price. Robec's
Board of Directors then discussed whether, in light of the delay in the
transaction and the likelihood of an adjustment to the Exchange Ratio, it was
desirable to consult with Compass. Robec's Board of Directors unanimously
determined that, because (i) Robec's financial condition is no better than its
financial condition was as of September 20, 1994, (ii) Robec's management is
not forecasting profits for the foreseeable future, (iii) Robec does not have
access to additional capital, (iv) no other viable option to combine Robec with
any entity other than AmeriQuest had arisen, and (v) the final Exchange Ratio
is likely to be more, rather than less, favorable to Robec's shareholders
compared with the original Exchange Ratio, it was not necessary to request
Compass to update its opinion.
In subsequent negotiations between AmeriQuest and the Chairman, AmeriQuest
was unwilling to reduce the base price used in the Exchange Ratio and,
consequently, there was no agreement to include a cap to the Exchange Ratio
adjustment mechanism. However, AmeriQuest did agree to the additional 882,000
shares, to condition the Merger upon the consummation of the Investment by
Computer 2000 and certain additional items requested by Robec. On August 4,
1995, Robec entered into Amendment No. 1 to the Agreement and Plan of
Reorganization and on August 15, 1995, Robec entered into Amendment No. 2 to
the Agreement and Plan of Reorganization, with an amended Plan of Merger
attached thereto (the "Amendments").
On August 16, 1995, Robec's Board of Directors unanimously ratified the
Amendments and unanimously recommended that holders of Robec Common Stock vote
for approval and adoption of the Plan of Merger.
RECOMMENDATION OF THE BOARD OF DIRECTORS OF ROBEC; REASONS FOR THE MERGER
THE BOARD OF DIRECTORS OF ROBEC HAS UNANIMOUSLY APPROVED AND ADOPTED THE PLAN
OF MERGER AND UNANIMOUSLY RECOMMENDS THAT HOLDERS OF SHARES OF ROBEC COMMON
STOCK VOTE FOR APPROVAL AND ADOPTION OF THE PLAN OF MERGER. In reaching its
decision, Robec's Board of Directors considered, among other things, the
following factors: (i) its knowledge of the business, operations, properties,
assets, financial condition and operating results of Robec; (ii) judgments as
to Robec's future prospects; (iii) presentations by Robec's management and by
Compass with respect to Robec and AmeriQuest; (iv) the opinion of Compass as to
the fairness from a financial point of view of the consideration to be received
by the shareholders of Robec in the Merger (See "Opinion of Robec's Financial
Advisor"); (v) the terms of the Amended Agreement and Plan of Merger which were
the product of extensive "arm's length" negotiations; (vi) the fact that no
other bidder came forward with an offer despite nearly three months between the
announced letter of intent and the Amended Agreement; (vii) the historical
trading prices for Robec Common Stock and AmeriQuest Common
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<PAGE>
Stock; and (viii) the opportunity for Robec shareholders to participate, as
holders of AmeriQuest Common Stock, in a larger, more diversified company of
which Robec would become a significant part. Robec's Board of Directors also
believes that the Merger will allow the Combined Company under the guidance of
new management designated by Computer 2000 to enjoy an expanded customer base
for operations, greater access to capital markets and the opportunity for
managerial and administrative efficiencies and overhead expense savings as a
result of the consolidation of certain operations.
The foregoing discussion of the information and factors considered and given
weight by Robec's Board of Directors is not intended to be exhaustive. In view
of the variety of factors considered in connection with its evaluation of the
Merger, Robec's Board of Directors did not find it practicable to and did not
quantify or otherwise assign relative weights to the specific factors
considered in reaching its determination. In addition, individual members of
Robec's Board of Directors may have given different weights to different
factors.
OPINION OF ROBEC'S FINANCIAL ADVISOR
Compass Capital Advisors (previously defined as "Compass") has delivered a
written opinion to Robec's Board of Directors that, as of September 20, 1994,
the Merger was fair, from a financial point of view, to the shareholders of
Robec. No limitations were imposed by Robec's Board of Directors upon Compass
with respect to the investigations made, procedures followed or otherwise in
connection with Compass rendering its opinion.
THE FULL TEXT OF COMPASS' OPINION, DATED SEPTEMBER 20, 1994, IS ATTACHED AS
APPENDIX III TO THIS PROSPECTUS/PROXY STATEMENT. SHAREHOLDERS ARE URGED TO READ
THE OPINION IN ITS ENTIRETY FOR THE ASSUMPTIONS MADE, MATTERS CONSIDERED AND
LIMITS OF THE REVIEW UNDERTAKEN BY COMPASS. COMPASS' OPINION IS DIRECTED ONLY
TO THE FAIRNESS OF THE CONSIDERATION TO BE RECEIVED BY THE SHAREHOLDERS OF
ROBEC AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY SHAREHOLDER OF ROBEC AS
TO HOW SUCH SHAREHOLDER SHOULD VOTE SUCH SHAREHOLDER'S SHARES OF ROBEC COMMON
STOCK REGARDING APPROVAL AND ADOPTION OF THE PLAN OF MERGER. THE SUMMARY OF THE
OPINION OF COMPASS SET FORTH IN THIS PROSPECTUS/PROXY STATEMENT IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION.
In arriving at its opinion, Compass (i) reviewed the Amended Agreement and
Plan of Merger, (ii) reviewed the filings of Robec and AmeriQuest with the SEC
in 1993 and 1994 to the date of its opinion, including AmeriQuest's
registration statement on Form S-4 as filed with the SEC on July 20, 1994,
(iii) reviewed Robec's 1994 budget income statement and 1995 projected
consolidated statement of operations prepared by Robec's management, (iv)
reviewed AmeriQuest's budget model, (v) reviewed AmeriQuest's internally
prepared projected financial statements for Robec and AmeriQuest operations for
1994 through 1998, (vi) reviewed press releases issued by Robec between August
1993 and August 10, 1994 and by AmeriQuest between December 1993 and August 12,
1994, (vii) reviewed price and volume information relating to trading in shares
of Robec Common Stock and AmeriQuest Common Stock from 1992 through September
16, 1994, (viii) reviewed and analyzed market trading and financial information
on comparable companies, (ix) reviewed information on reported acquisitions in
the computer industry and (x) met with the management of Robec to discuss the
business and prospects of Robec.
In connection with its review, Compass did not independently verify any of
the foregoing information and relied on all such information being complete and
accurate in all material respects. In addition, Compass did not make an
independent evaluation or appraisal of the assets of Robec, nor was it
furnished with any such appraisals.
In arriving at its opinion and delivering its opinion to Robec's Board of
Directors, Compass performed a variety of financial analyses, including those
summarized below. The summary set forth below includes summaries of all of the
material financial analyses discussed by Compass with Robec's Board of
Directors, but does not purport to be a complete description of the analyses
performed by Compass in arriving at its opinion. Arriving at a fairness opinion
is a complex process that involves various determinations as to the most
appropriate and relevant methods of financial analysis and the application of
those methods to the
31
<PAGE>
particular circumstances and, therefore, such an opinion is not necessarily
susceptible to partial analysis or summary description. In performing its
analyses, Compass made numerous assumptions with respect to industry
performance, general business, economic, market and financial conditions and
other matters, many of which are beyond the control of Robec. Any estimates
incorporated in the analyses performed by Compass are not necessarily
indicative of actual values or future results, which may be significantly more
or less favorable than suggested by such analyses. Additionally, estimates of
the value of businesses and securities neither purport to be appraisals nor
necessarily reflect the prices at which businesses or securities actually may
be sold. Accordingly, such analyses and estimates are inherently subject to
substantial uncertainty. No public company utilized as a comparison is
identical to Robec, and none of the acquisition transactions utilized as a
comparison is identical to the Merger. Accordingly, an analysis of publicly
traded comparable companies and comparable acquisition transactions is not
mathematical; rather it involves complex considerations and judgments
concerning differences in financial and operating characteristics of the
comparable companies and other factors that could affect the public trading
value of the comparable companies or company to which they are being compared.
The following is a summary of the material financial analyses performed by
Compass in connection with its fairness opinion:
Market Price Analysis.
Compass reviewed pricing and volume information concerning Robec Common
Stock and AmeriQuest Common Stock from 1992 through September 16, 1994.
Compass focused particularly on the trading ranges of Robec Common Stock
and AmeriQuest Common Stock immediately before and after significant
announcements, including announcements regarding quarterly and annual
financial information. Compass reviewed the reported daily price and volume
activities of Robec Common Stock and AmeriQuest Common Stock for the period
January 4 through August 19, 1994, which was the fifth trading day
following the announcement of the signing of the definitive agreement
relating to AmeriQuest's acquisition of Robec. Compass also focused on the
periods five trading days before and five trading days after certain
announcements:
<TABLE>
<CAPTION>
ROBEC CLOSING PRICE
-------------------------------------------------------------------------------------
DATE ANNOUNCEMENT FIVE DAYS PRIOR ON DATE FIVE DAYS AFTER
------- ------------ --------------- ------- ---------------
<S> <C> <C> <C> <C>
4/15/94 1993 Year End Results 1 3/8 1 1/2 3/4
5/16/94 First Quarter Results 5/8 3/4 1
6/30/94 Letter of Intent with AmeriQuest 3/4 1 1/16 1 7/8
8/12/94 Definitive Agreement with AmeriQuest 1 1/2 1 13/16 1 15/16
<CAPTION>
AMERIQUEST CLOSING PRICE
-------------------------------------------------------------------------------------
DATE ANNOUNCEMENT FIVE DAYS PRIOR ON DATE FIVE DAYS AFTER
------- ------------ --------------- ------- ---------------
<S> <C> <C> <C> <C>
6/7/94 Acquisition of 51% in Kenfil 3 1/2 3 7/8 3 1/2
6/30/94 Letter of Intent with Robec 3 1/8 3 3/8 3 5/8
8/12/94 Definitive Agreement with Robec 4 3 7/8 3 3/4
</TABLE>
Compass concluded that $7/8 (not shown on the above chart), the closing
price on the day prior to the announcement of the letter of intent, was a
representative price for Robec Common Stock that reflected the market's
valuation of Robec's independent financial results. Compass calculated
various multiples using a stock price of $7/8 per share and concluded that,
at $7/8 per share, the price of Robec Common Stock reasonably reflected the
value of Robec Common Stock before the announcement of the proposed
transaction with AmeriQuest. Compass calculated "Total Capital" (defined as
stock price times primary shares outstanding plus interest-bearing debt) to
latest twelve-month revenue (TC/REV), Total Capital to latest twelve month
"EBIT" (defined as earnings before interest expense and taxes) (TC/EBIT),
Total Capital to latest reported interest-bearing debt plus book equity
(TC/(DEBT+EQUITY)), Total Capital to projected 1994 revenue (TC/94REV) and
Total Capital to projected 1995 EBIT (TC/95EBIT), using the $7/8 price per
share of Robec Common Stock at June 29,
32
<PAGE>
1994 and interest-bearing debt as reported in Robec's quarterly report on
Form 10-Q for the quarter ended June 30, 1994. The calculated values for
Robec were:
TC/REV = 0.1x,
TC/EBIT = NEGATIVE,
TC/(DEBT+EQUITY) = 0.7x,
TC/94REV = 0.1x,
TC/94EBIT = NEGATIVE, and
TC/95EBIT = 9.0x.
Compass also concluded that $3 1/4, the closing price on the day prior to
the announcement of the letter of intent, was a representative price for
AmeriQuest Common Stock that reflected the market's valuation of
AmeriQuest's independent financial results (including pro forma results for
the previously announced Kenfil acquisition). Compass calculated various
multiples using a stock price of $3 1/4 per share and concluded that, at
$3 1/4 per share, the price of AmeriQuest's Common Stock reasonably reflected
the value of AmeriQuest Common Stock before the announcement of the
proposed transaction with Robec. Compass calculated Total Capital to latest
twelve month revenue (TC/REV), Total Capital to latest twelve month EBIT
(TC/EBIT), Total Capital to latest reported interest-bearing debt plus book
equity (TC/(DEBT+EQUITY)), Total Capital to projected 1994 revenue
(TC/94REV), Total Capital to projected 1994 EBIT (TC/94EBIT) and Total
Capital to projected 1995 EBIT (TC/95EBIT), using the $3 1/4 price per
share of AmeriQuest Common Stock at June 29, 1994 and interest-bearing debt
as reported in AmeriQuest's quarterly report on Form 10-Q for the quarter
ended March 31, 1994. The calculated values for AmeriQuest were:
TC/REV = 0.3x,
TC/EBIT = NEGATIVE,
TC/(DEBT+EQUITY) = 1.3x,
TC/94REV = 0.4x,
TC/94EBIT = 19.9x, and
TC/95EBIT = 11.0x.
Compass also analyzed AmeriQuest's Common Stock price at August 15, 1994,
after AmeriQuest's announcement of the signing of the definitive
acquisition agreement with Robec, and calculated the same multiples based
on the post-signing price of $3 3/4 per share. Such analysis was performed
on a pro forma basis to include Robec's operating results for the twelve
months ended June 30, 1994, though AmeriQuest will account for the
acquisition using the purchase method of accounting, and balance sheet as
of June 30, 1994, and to calculate total capitalization based on the shares
of Robec's Common Stock that would be outstanding immediately following the
acquisition. The calculated values were:
TC/REV = 0.3x,
TC/EBIT = NEGATIVE,
TC/(DEBT+EQUITY) = 1.3x,
TC/94REV = 0.3x,
TC/94EBIT = 44.9x, and
TC/95EBIT = 12.4x.
Compass compared these multiples to those it calculated for comparable
public companies (See Comparable Companies Analysis, below) and concluded
that, with the exception of the TC/94EBIT multiple of 44.9x calculated for
a combined AmeriQuest and Robec, all such multiples were within the range
of multiples calculated for the comparable companies. Inasmuch as the
TC/EBIT multiple had
33
<PAGE>
been negative both for Robec and AmeriQuest prior to the announcements as
well as for one of the comparable companies, Compass did not consider the
TC/94EBIT to be a significant valuation measure.
Based on the foregoing, Compass concluded that the market was efficient
in evaluating the business and prospects of Robec and AmeriQuest.
Comparable Companies Analysis.
Compass reviewed financial and market price information for the latest
twelve-month periods with respect to five public companies that it deemed
comparable to Robec and AmeriQuest. The public companies selected were
Gates/F.A. Distributing Inc., IRG Technologies, Inc., Merisel Inc.,
Southern Electronics Corp., and Tech Data Corp.
Each of these companies is exclusively engaged as a distributor of
computer equipment, peripherals and accessories. No significant publicly-
traded competitor of either Robec or AmeriQuest was excluded and no
publicly traded company that was exclusively a computer distributor was
excluded.
Compass derived multiples of Total Capital at August 8, 1994 to the
latest reported (i) revenue, (ii) EBIT and (iii) debt plus book equity for
such comparables. The range of such multiples was 0.1x to 0.5x for TC/REV;
NEGATIVE to 14.4x for TC/EBIT; and 0.8x to 2.0x for TC/(DEBT+EQUITY).
As with the Market Price Analysis above, the range of multiples for Robec
and AmeriQuest were within the range of similar multiples calculated for
the public company comparables.
Comparable Acquisitions Analysis.
Compass analyzed the market information available with respect to recent
reported acquisitions in the computer industry, which analysis was limited
by the scarcity of financial information available because nearly all the
transactions were private transactions, and the lack of comparability of
the companies (with one exception noted below), since none of the acquired
companies, except Kenfil, was engaged purely in distribution related to
computer products. The only information that Compass could find for
publicly announced acquisitions of companies in the computer industry
(other than for Kenfil) was the transaction price, the seller's net
earnings, the seller's revenues and, in some cases, the seller's net worth.
No detail of operating income was available, nor was there any historical
information to show historical growth rates or lack thereof. Furthermore,
no information was available with respect to the amount of debt assumed in
the price paid. All of such information would be required to arrive at a
reasonable conclusion as to the applicability of the calculated multiples
to Robec. However, the range of multiples of price/revenues (which is not
directly comparable because debt is not included in the numerator) and
price/book value (which is not directly comparable because debt is not
included in the denominator) for such acquisitions included the multiples
derived in Compass' analysis of Robec and of the comparable public
companies, as discussed above. The acquisitions analyzed by Compass were
AmeriQuest's June, 1994 announcement of the acquisition of Kenfil, Inc.;
LEGENT Corp.'s 1992 acquisition of GOAL Systems International Inc.; the
acquisition of WICAT Systems Inc. by Jostens Inc. in 1992; Storage
Technology Corp's acquisition of XL/Data Comp. Inc. in 1991; Cadence Design
Systems Inc.'s acquisition of Valid Logic Systems Inc. in 1991; Borland
International Inc.'s acquisition of Ashton-Tate Corp. in 1991; and Computer
Associates International's acquisition of Pansophic Systems Inc. in 1991.
The range of multiples were P/REV = 0.1x to 1.9x; P/E = NEGATIVE to 47.4x;
and P/BK = 0.6x to 5.3x. The range of multiples for AmeriQuest's announced
acquisition of Kenfil was P/E = NEGATIVE; P/REV = 0.1x; and P/BK = 0.6x.
Compass did not calculate values for Robec using these multiples, but
merely compared these multiples to the multiples it calculated in its
comparable companies analysis. It did not give any weight to this analysis
in reaching its conclusion.
Share Price Analysis.
Based on the agreed-upon exchange ratio of .63075 shares of AmeriQuest
Common Stock for each share of Robec Common Stock, Compass analyzed the
value to Robec shareholders of the transaction based upon Robec and
AmeriQuest share prices before and after the letter of intent announcement
and
34
<PAGE>
before and after the announcement of the definitive agreement and also at
September 2, 1994. Such analysis is set forth below and indicates that at
each of such dates, the transaction represents a premium to the trading
value of Robec Common Stock.
<TABLE>
<CAPTION>
AMERIQUEST VALUE TO ROBEC WITH
SHARE VALUE TO ROBEC AMERIQUEST AT $3.00
DATE ROBEC SHARE PRICE PRICE EXCHANGE RATIO PER SHARE PER SHARE
---- ----------------- ---------- -------------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
6/23/94 $0.750 $3.125 0.63075 $1.971 $1.892
6/29/94 $0.875 $3.250 0.63075 $2.050 $1.892
7/8/94 $1.875 $3.625 0.63075 $2.286 $1.892
8/5/94 $1.500 $4.000 0.63075 $2.523 $1.892
8/11/94 $1.688 $3.625 0.63075 $2.286 $1.892
8/19/94 $1.938 $3.750 0.63075 $2.365 $1.892
9/2/94 $1.875 $3.500 0.63075 $2.208 $1.892
</TABLE>
Compass also prepared an analysis which is included in the above table
assuming an exchange ratio of $3.00 per share, in accordance with the
provision in the Amended Agreement which provides for additional shares to
be issued to Robec shareholders if the price of AmeriQuest Common Stock on
the business day prior to the Effective Date is less than $3.00 per share.
Compass noted that, based upon Robec's stock price of $ 7/8 prior to the
announcement of the letter of intent, Robec shareholders were receiving
premiums based on AmeriQuest's stock price at September 2, 1994 ($3 1/2) of
152.4% at the exchange ratio and 116.0% at the $3.00 price. When calculated
at Robec's share price before the announcement of the definitive agreement
($1 11/16), those premiums were 30.8% and 12.0%, respectively. Furthermore,
Compass noted that, while the premium had narrowed at September 2, 1994,
when Robec stock traded at $1 7/8, it was still at 17.8% at AmeriQuest's
actual price ($3 1/2) and 0.8% at the $3.00 price.
Contribution Analysis.
Compass analyzed Robec's percentage contribution to 1994 projected EBIT,
1995 projected EBIT, 1994 projected revenues based upon pro forma projected
combined financial results of AmeriQuest, Robec and Kenfil, and also
analyzed Robec's contribution to shareholders' equity. Compass noted that,
following the Merger, the Robec shareholders would hold 14.8% of AmeriQuest
Common Stock. Their contribution to 1994 projected EBIT would be negative,
to 1995 projected EBIT would be 18.6%, to 1994 projected revenue would be
41.2%, and to shareholders' equity would be 26.7%. Compass noted that the
market did not value Robec's prospective earnings, revenues or equity at
the same multiples as it did for AmeriQuest, and noted that if such
respective contributions were weighted in accordance with the multiples
accorded by the market to Robec and AmeriQuest, respectively, Robec's
contribution would be 6.9% of the total. Accordingly, Compass concluded
that, when taking the market's valuation of such parameters into
consideration, the proposed exchange ratio gives Robec's shareholders a
participation in AmeriQuest's equity (14.8%) that represents a 114% premium
over their contribution to pro forma combined results (6.9%).
Conclusion.
On the basis of the Market Price Analysis and the Comparable Companies
Analysis, Compass concluded that the market for both Robec and AmeriQuest
stock was efficient. Compass was unable to arrive at any conclusion based
on its Comparable Acquisitions Analysis. Compass considered the Share Price
Analysis and the Contribution Analysis to be equally important in reaching
its conclusion.
Based upon its analyses and assumptions, Compass concluded that as of
September 20, 1994, the Merger was fair, from a financial point of view, to
Robec's shareholders. In reaching its conclusion, Compass assumed that
Robec's shareholders would receive AmeriQuest Common Stock valued at not
less than $1.892 per share of Robec Common Stock converted in the Merger.
Compass, as part of its investment banking business, is regularly engaged
in the valuation of businesses and their securities in connection with
mergers and acquisitions, employee benefit plans and
35
<PAGE>
valuations for corporate, estate and other purposes. Compass is not
affiliated with either Robec or AmeriQuest, and prior to being retained by
Robec to render the foregoing opinion, had never been employed by Robec or
AmeriQuest.
Robec has agreed to pay Compass a fee of $30,000. Robec has also agreed
to reimburse Compass for its reasonable out-of-pocket expenses up to
$1,000, including all reasonable fees and disbursements of counsel, and to
indemnify Compass and certain related persons against certain liabilities
relating to or arising out of its engagement, including certain liabilities
under the federal securities laws. The fee is payable to Compass without
regard to the opinion rendered by Compass and whether or not the Merger is
consummated.
DISSENTERS APPRAISAL RIGHTS
For purposes of this discussion of appraisal rights, the term "Company" means
Robec and, after the Effective Date, the Surviving Corporation.
Pursuant to the Plan of Merger and the BCL, holders of Robec Common Stock
will have dissenters rights in connection with the Merger under BCL Subchapter
15D ("Subchapter 15D"), a copy of which is attached as Appendix IV to this
Prospectus/Proxy Statement, and may object to the Plan of Merger and demand in
writing that the Company pay them the fair value of their Robec Common Stock.
Failure by any dissenting shareholder to comply with any procedure required
by Subchapter 15D may cause a termination of such shareholder's dissenters
rights. The Company will not give any notice of the following requirements
other than as described in this Prospectus/Proxy Statement and as required by
the BCL. The right to exercise dissenter's rights under Subchapter 15D is the
sole remedy of a holder of Robec Common Stock with respect to the Merger,
absent a showing of fraud or fundamental unfairness in connection with the
Merger. Upon a showing of fraud or fundamental unfairness in connection with
the Merger, a shareholder could seek an injunction against the consummation of
the Merger.
A holder of record of Robec Common Stock may assert dissenters rights as to
fewer than all of the shares of Robec Common Stock registered in such holder's
name only if the holder dissents with respect to all of the Robec Common Stock
beneficially owned by any one person and discloses the name and address of the
person or persons on whose behalf the holder dissents. In that event, the
holder's rights shall be determined as if the shares as to which the holder has
dissented and the other shares were registered in the names of different
holders. A beneficial owner of shares of Robec Common Stock who is not also the
record holder of such shares may assert dissenters rights with respect to
shares held on such owner's behalf and shall be treated as a dissenting
shareholder under the terms of Subchapter 15D if the beneficial owner submits
to the Company, not later than the time of filing the Notice of Intention to
Dissent (as defined below), a written consent of the record holder. Such
beneficial owner may not dissent with respect to less than all shares of Robec
Common Stock beneficially owned by such beneficial owner.
Holders of Robec Common Stock (or beneficial owners thereof as provided
above) who follow the procedures of Subchapter 15D as outlined below will be
entitled to receive from the Company the fair value of their shares of Robec
Common Stock immediately before the Effective Date, taking into account all
relevant factors but excluding any appreciation or depreciation in anticipation
of the effectuation of the Plan of Merger. Holders of Robec Common Stock (or
beneficial owners thereof) who elect to exercise their dissenters rights must
comply with all of the following procedures to preserve those rights.
Holders of Robec Common Stock (or beneficial owners thereof) who wish to
exercise dissenters rights must file a written notice of intention to demand
the fair value of their shares of Robec Common Stock if the Merger is
effectuated (the "Notice of Intention to Dissent"). Such dissenters must file
the Notice of Intention to Dissent with the Secretary of the Company prior to
the vote by Robec shareholders on the Plan of Merger; they must make no change
in their beneficial ownership of Robec Common Stock from the date of filing
until
36
<PAGE>
the Effective Date; and they must refrain from voting their Robec Common Stock
for the approval and adoption of the Plan of Merger. The Notice of Intention to
Dissent must be in addition to and separate from any proxy or vote against the
Plan of Merger.
If the Plan of Merger is approved and adopted by the required vote at the
Special Meeting, the Company will mail a notice (the "Notice of Approval") to
all dissenters who filed a Notice of Intention to Dissent prior to the vote on
the Plan of Merger and who refrained from voting for the approval and adoption
of the Plan of Merger. The Company expects to mail the Notice of Approval
promptly after effectuation of the Merger. The Notice of Approval will state
where and when (the "Demand Deadline") a demand for payment must be sent and
certificates for shares of Robec Common Stock must be deposited in order to
obtain payment; it will supply a form for demanding payment (the "Demand Form")
which includes a request for certification of the date on which the holder, or
the person on whose behalf the holder dissents, acquired beneficial ownership
of the shares of Robec Common Stock; and it will be accompanied by a copy of
Subchapter 15D. Dissenters must ensure that the Demand Form and their
certificates for shares of Robec Common Stock are received by the Company on or
before the Demand Deadline. All mailings to the Company are at the risk of the
dissenter. However, the Company recommends that the Notice of Intention to
Dissent, the Demand Form and the holder's share certificates be sent by
certified mail.
Any holder (or beneficial owner) of Robec Common Stock who fails to file a
Notice of Intention to Dissent, fails to complete and return the Demand Form,
or fails to deposit share certificates with the Company, each within the time
periods provided above, will lose the holder's (or beneficial owner's)
dissenters rights under Subchapter 15D. A dissenter will retain all rights of a
shareholder, or beneficial owner, as the case may be, until those rights are
modified by effectuation of the Plan of Merger.
Upon timely receipt of the completed Demand Form, the Company is required by
the BCL either to remit to dissenters who have returned the Notice of Intention
to Dissent and the completed Demand Form and have deposited their certificates,
the amount the Company estimates to be the fair value for their shares or to
give written notice that no such remittance will be made. The Company does not
intend to make payment of any part of the amounts payable to dissenters until
the fair value of the Robec Common Stock affected by the Merger has been
finally determined. The remittance or notice will be accompanied by:
(1) the closing balance sheet and statement of income of the Company for
the fiscal year ended December 31, 1994, together with the latest available
interim financial statements;
(2) a statement of the Company's estimate of the fair value of the Robec
Common Stock (the "Company's Estimate"); and
(3) a notice of the right of the dissenter to demand payment or
supplemental payment, as the case may be, accompanied by a copy of
Subchapter 15D.
If the Company does not remit the amount of its estimate of fair value of the
Robec Common Stock, it will return any certificates that have been deposited,
and may make a notation on any such certificates that a demand for payment in
accordance with Subchapter 15D has been made. If shares carrying such notation
are thereafter transferred, each new certificate issued therefor may bear a
similar notation, together with the name of the original dissenting holder or
owner of such shares. A transferee of such shares will not acquire by such
transfer any rights in the Company other than those which the original
dissenter had after making demand for payment of their fair value.
After the Company gives notice of the Company's Estimate, without remitting
that amount, and if the dissenter believes that the Company's Estimate is less
than the fair value of the shares, the dissenter may send to the Company the
dissenter's own estimate (the "Holder's Estimate") of the fair value of the
shares as contemplated by BCL (S) 1578, which will be deemed a demand for
payment of the amount of the Holder's Estimate. If a dissenter does not file a
Holder's Estimate within 30 days after the mailing by the Company of its
remittance or notice, the dissenter will be entitled to more than the Company's
Estimate.
37
<PAGE>
If, within 60 days after the Effective Date or after the timely receipt by
the Company of any Holder's Estimate, whichever is later, any demands for
payment remain unsettled, the Company may file in the Court of Common Pleas of
Montgomery County, Pennsylvania an application for relief requesting that the
fair value of the Robec Common Stock be determined by the court. There is no
assurance that the Company will file such an application. All dissenters,
wherever residing, whose demands have not been settled will be made parties to
any such appraisal proceeding. The court may appoint an appraiser to receive
evidence and recommend a decision on the issue of fair value. Each dissenter
who is made a party will be entitled to recover the amount by which the fair
value of the dissenter's Robec Common Stock is found to exceed the amount, if
any, previously remitted, plus interest. Interest shall be payable from the
Effective Date until the date of payment at such rate as is fair and equitable
under all the circumstances, taking into account all relevant factors,
including the average rate currently paid by the Company on its principal line
of credit. If the Company fails to file an application for relief, any
dissenter who has made a demand and who has not already settled the dissenter's
claim against the Company may do so in the name of the Company at any time
within 30 days after the expiration of the 60-day period. If a dissenter does
not file an application within the 30-day period, each dissenter entitled to
file an application shall be paid the Company's Estimate and no more, and may
bring an action to recover any amount thereof not previously remitted.
The costs and expenses of such court proceedings, including the reasonable
compensation and expenses of the appraiser appointed by the court, will be
determined by the court and assessed against the Company, except that any part
of the costs and expenses may be apportioned and assessed as the court deems
appropriate against all or some of the dissenters who are parties and whose
action in demanding supplemental payment the court finds to be dilatory or in
bad faith. Fees and expenses of counsel and of experts for the respective
parties may be assessed as the court deems appropriate against the Company, and
in favor of any or all dissenters, if the Company fails to comply substantially
with the requirements of Subchapter 15D. Such fees and expenses may be assessed
against either the Company or a dissenter, if the court finds that the party
against whom the fees and expenses are assessed acted in bad faith or in a
dilatory manner. If the court finds that the services of counsel for any
dissenter were of substantial benefit to other dissenters similarly situated
and should not be assessed against the Company, it may award such counsel
reasonable fees to be paid out of the amounts awarded to the dissenters who
were benefitted.
Under the BCL, a shareholder of the Company has no right to obtain, in the
absence of fraud or fundamental unfairness, an injunction against the Merger,
nor any right to valuation and payment of the fair value of the holder's shares
because of the Merger, except to the extent provided by the dissenters rights
provisions of Subchapter 15D. The BCL also provides that absent fraud or
fundamental unfairness, the rights and remedies provided by Subchapter 15D are
exclusive.
The foregoing description of the rights of dissenters under Subchapter 15D
should be read in conjunction with Appendix IV to this Prospectus/Proxy
Statement, and is qualified in its entirety by the provisions of Subchapter
15D.
CERTAIN ANTITRUST MATTERS
Pursuant to the requirements of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), the Company and AmeriQuest each filed
a Notification and Report Form for review under the HSR Act with the Federal
Trade Commission (the "FTC") and the Antitrust Division of the U.S. Department
of Justice (the "Antitrust Division"). The parties requested and were granted
early termination of the waiting period under the HSR Act with respect to such
filing on August 26, 1994. Even though the HSR Act waiting period has expired,
either the FTC or the Antitrust Division could take such action under the
antitrust laws as it deems necessary or desirable in the public interest,
including seeking divestiture of substantial assets of Robec or AmeriQuest.
AmeriQuest does not believe that consummation of the Merger will result in a
violation of any applicable antitrust laws. However, there can be no assurance
that a challenge to the Merger on antitrust grounds will not be made or, if
such a challenge is made, of the result.
38
<PAGE>
INTEREST OF CERTAIN PERSONS IN THE MERGER
AmeriQuest has agreed to appoint Robert H. Beckett, who is currently the
Chairman, Chief Executive Officer and President of Robec and a Principal
Shareholder, to the Board of Directors of AmeriQuest and has agreed to nominate
him for re-election at each of the next two annual meetings of AmeriQuest
stockholders. In addition, Robert H. Beckett, Robert S. Beckett and Alexander
C. Kramer, Jr. will continue to serve as officers of the Surviving Corporation
for a period of two years after the Effective Date and Robert H. Beckett and
Robert S. Beckett will continue to serve as directors of the Surviving
Corporation.
AmeriQuest has entered into agreements with Robert H. Beckett, Robert S.
Beckett and Alexander C. Kramer, Jr. that provide for their employment by the
Company for a two-year period following the Exchange (and has agreed to extend
the term until two years following the Merger) at a base salary of not less
than $196,000, $150,000 and $150,000 per year, respectively.
The Amended Agreement also provides for certain indemnification rights for
the Principal Shareholders and the officers and directors of Robec. See "The
Amended Agreement--Indemnification; Insurance." In addition, the Principal
Shareholders have been granted certain registration rights by AmeriQuest. See
"Information Regarding the Merger--The Amended Agreement--Registration Rights."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
FEDERAL TAX MATTERS
The following summary is a general discussion of the material Federal income
tax consequences to Robec's shareholders receiving AmeriQuest Common Stock in
the Merger and to Robec and AmeriQuest. This summary is based upon the Internal
Revenue Code of 1986, as amended (the "Code"), administrative pronouncements,
judicial decisions and existing Treasury Regulations as of the date hereof, all
of which are subject to change, possibly with retroactive effect. Any such
change could affect the continuing validity of this summary. Arthur Andersen
LLP has rendered an opinion with respect to the material tax consequences.
Arthur Andersen's opinion is based upon its best judgment on the application of
current law to the facts of the Merger and is not binding on the courts.
The following discussion does not consider the tax consequences of the Merger
under state, local or foreign tax law. The discussion also does not discuss all
aspects of income taxation that may be relevant to a particular Robec
shareholder or to certain types of shareholders such as financial institutions,
broker-dealers, life insurance companies, tax-exempt organizations, investment
companies and other special status taxpayers.
EACH ROBEC SHAREHOLDER IS STRONGLY URGED TO CONSULT HIS OR HER OWN TAX
ADVISOR REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE
MERGER.
TAX CONSEQUENCES TO ROBEC SHAREHOLDERS
REORGANIZATION. In the opinion of Arthur Andersen LLP the Exchange and the
Merger qualify as a tax-free reorganization under Section 368 of the Code,
which requires in general that the consideration issued by AmeriQuest to the
holders of Robec Common Stock be stock of AmeriQuest. The AmeriQuest Common
Stock initially issued in the Exchange and the Merger will qualify as stock.
Notwithstanding the lack of compliance with all of the Service's advance ruling
guidelines, Arthur Andersen LLP has concluded that there is substantial
authority for the treatment of the Exchange and Merger as a tax-free
reorganization, and Arthur Andersen LLP also believes this treatment is more
likely than not proper. If the Exchange and Merger qualify as a tax-free
reorganization, no gain or loss will be recognized by a Robec shareholder who
receives AmeriQuest Common Stock in the Merger.
BASIS. Shareholders of Robec will take a basis in their new AmeriQuest shares
equal to the basis in their Robec Shares.
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<PAGE>
RECEIPT OF CASH IN LIEU OF FRACTIONAL SHARES. The receipt of cash in lieu of
any fractional shares of Robec Common Stock pursuant to the Merger will not
affect the question whether the Merger qualifies as a tax-free reorganization.
However, the receipt of such cash will be treated as a taxable redemption in
which the recipient shareholder will recognize gain or loss equal to the
difference between the amount of cash received and the shareholder's basis in
such fractional share.
TAX CONSEQUENCES TO ROBEC AND AMERIQUEST
No gain or loss will be recognized by either Robec or AmeriQuest in the
Merger. Robec will retain its historic basis and holding period in its assets
after the Merger. The basis of AmeriQuest in its stock of Surviving Corporation
immediately after the Merger will be equal to the basis of all Robec
shareholders, including AmeriQuest, in their shares of Robec Common Stock
immediately prior to the Effective Date. In addition, the tax attributes, if
any, of Robec will carry over. If it has not occurred prior to the Merger, the
Merger itself will likely cause a "change of ownership" to both Robec and
AmeriQuest (as defined by Section 382). Because of this, the future utilization
of certain tax attributes, if any, that were generated before the change of
ownership, including net operating loss carryovers, may be restricted.
INFORMATION REPORTING
Treasury Regulations require that every taxpayer who receives stock in
connection with a corporate reorganization must file with his or her income tax
return a statement of facts pertinent to the nonrecognition of gain or loss
upon the transaction, including (i) a statement of the basis of the stock
transferred in the transaction and (ii) a statement of the fair market value of
the stock received in the transaction. In addition, taxpayers are required to
maintain permanent records with respect to the foregoing information. Robec
shareholders will be required to comply with these requirements.
BACKUP WITHHOLDING
Under the backup withholding rules of the Code, a Robec shareholder may be
subject to backup withholding with respect to payments of cash in lieu of
fractional shares. To prevent such backup withholding, a Robec shareholder
must, unless an exception applies under the applicable law and regulations,
provide the payor of such cash with such shareholder's correct taxpayer
identification number ("TIN") on a Substitute Form W-9 and certify under
penalties of perjury that such number is correct and that such shareholder is
not subject to backup withholding. A Substitute Form W-9 will be provided to
each Robec shareholder in a letter of transmittal to be mailed to each
shareholder by AmeriQuest. If the correct TIN and certifications are not
provided, a $50 penalty may be imposed on the shareholder by the Service and
payments of cash to such shareholder may be subject to backup withholding at a
rate of 31%.
ACCOUNTING TREATMENT
The Merger will be accounted for by AmeriQuest as a reorganization of
unaffiliated companies and recorded as a purchase by AmeriQuest for accounting
and financial reporting purposes.
THE PLAN OF MERGER
The following is a description of all the material terms of the Plan of
Merger. The description does not purport to be complete and is qualified in its
entirety by reference to the Plan of Merger, a copy of which is attached as
Appendix I hereto and incorporated herein by prior reference. Robec
shareholders are urged to read the Plan of Merger carefully and in its
entirety.
THE MERGER. The Plan of Merger provides that AmeriQuest Sub will be merged
with and into Robec in accordance with Pennsylvania law, whereupon the separate
existence of AmeriQuest Sub will cease and Robec will survive the Merger as the
Surviving Corporation. On the Effective Date, the conversion of Robec
40
<PAGE>
Common Stock and the conversion of shares of the common stock of AmeriQuest Sub
pursuant to the Plan of Merger will be effected as described below.
EFFECTIVE DATE. Following the adoption of the Plan of Merger and subject to
the satisfaction or waiver of all other conditions to closing contained in the
Amended Agreement discussed below under "The Amended Agreement--Conditions to
Consummation of the Merger," the Merger will become effective on the Effective
Date. The Articles of Merger will be filed as soon as practicable after all
conditions contemplated by the Amended Agreement have been satisfied or waived.
TERMS OF THE MERGER. At the Effective Date:
(i) except for shares of Robec Common Stock owned by AmeriQuest on the
Effective Date which shall be cancelled in the Merger, each share of Robec
Common Stock then issued and outstanding, other than shares owned by Robec
shareholders who perfect their statutory dissenters rights, shall be
converted into .82944 shares of AmeriQuest Common Stock; provided, however,
that in the event that the lesser of (A) the mean trading price of
AmeriQuest Common Stock on the New York Stock Exchange on the fourth
trading day prior to the Meeting Date or (B) the average of the mean
trading prices of AmeriQuest Common Stock on the New York Stock Exchange
for each of the 20 trading days prior to the fourth trading day prior to
the Meeting Date (the lesser of the amounts determined pursuant to (A) or
(B) above, the "Market Price"), is less than $3.00 per share, the Exchange
Ratio shall be equal to the sum of (A) the product of (i) .63075 multiplied
by (ii) a quotient, the numerator of which is $3.00 and the denominator of
which is the Market Price plus (B) .19869 (Robec shareholders will be able
to call 1-800-788-4267 beginning the morning of the third trading day prior
to the Meeting Date to learn the final Exchange Ratio); and
(ii) each issued and outstanding share of the capital stock of AmeriQuest
Sub shall be converted into one share of common stock, par value $.01 per
share, of the Surviving Corporation.
Robec shareholders will not be issued fractional shares in connection with
the Merger. Instead, each Robec shareholder who would otherwise have been
entitled to a fraction of a share of AmeriQuest Common Stock will receive, at
such time as the holder receives stock certificates representing shares of
AmeriQuest Common Stock, an amount of cash equal to the per share market value
of the AmeriQuest Common Stock (based on the closing price of AmeriQuest Common
Stock on the Effective Date) multiplied by the fraction of a share of
AmeriQuest Common Stock to which such holder would otherwise be entitled. On
and after the Effective Date, the holder of a certificate representing Robec
Common Stock shall cease to have any rights as a shareholder of Robec, except
for the right to surrender his or her certificate in exchange for payment of
the consideration to be received by such holder of Robec Common Stock in the
Merger (the "Merger Consideration").
PAYMENT OF MERGER CONSIDERATION. AmeriQuest will deposit the Merger
Consideration with the Exchange Agent. After the Effective Date, each Robec
shareholder will be entitled to receive, upon surrender to the Exchange Agent
of one or more certificates representing Robec Common Stock, certificates
representing the number of shares of AmeriQuest Common Stock into which such
shares were converted in the Merger and cash in consideration of fractional
shares, as described above. AmeriQuest Common Stock into which Robec Common
Stock will be converted in the Merger shall be deemed to have been issued on
the Effective Date.
In the event that any certificates representing shares of AmeriQuest Common
Stock are to be delivered to or issued in a name other than that in which the
certificates representing shares of Robec Common Stock surrendered in exchange
therefor are registered, there shall be as conditions of such exchange that the
person requesting such exchange pay to the Exchange Agent any transfer or other
taxes required by reason of the issuance of certificates for such shares of
AmeriQuest Common Stock in a name other than that of the registered holder of
the certificate surrendered, or shall establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not applicable, that the
certificates so surrendered shall be properly endorsed or accompanied by
appropriate stock powers and otherwise be in proper form for transfer and that
such transfer otherwise be proper.
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DETAILED INSTRUCTIONS, INCLUDING A TRANSMITTAL LETTER, AS TO THE METHOD OF
EXCHANGING CERTIFICATES FORMERLY REPRESENTING SHARES OF ROBEC COMMON STOCK FOR
CERTIFICATES REPRESENTING SHARES OF AMERIQUEST COMMON STOCK WILL BE MAILED TO
ROBEC SHAREHOLDERS PROMPTLY FOLLOWING THE EFFECTIVE DATE. ROBEC SHAREHOLDERS
SHOULD NOT SEND CERTIFICATES REPRESENTING THEIR SHARES TO ROBEC OR TO THE
EXCHANGE AGENT PRIOR TO RECEIPT OF SUCH INSTRUCTIONS AND THE TRANSMITTAL
LETTER.
SURVIVING PROVISIONS. The Articles of Incorporation and By-laws of AmeriQuest
Sub will be the Articles of Incorporation and By-laws of the Surviving
Corporation, except that the name of the Surviving Corporation shall be
"AmeriQuest/Robec, Inc." The initial directors and officers of the Surviving
Corporation shall be as follows:
<TABLE>
<C> <S>
Harold L. Clark Director, Chairman of the Board
Robert H. Beckett Director, President and Chief Executive Officer
Robert S. Beckett Director, Vice President and Chief Operating
Officer
Stephen G. Holmes Director, Executive Vice President,
Secretary/Treasurer and Chief Financial Officer
Alexander C. Kramer, Jr. Vice President--Operations
</TABLE>
DISSENTING SHARES. The Plan of Merger provides that shares of Robec Common
Stock that are outstanding immediately prior to the Effective Date and that are
held by shareholders, if any, who are entitled to assert a right to dissent
from the Merger and who demand and validly perfect their rights to receive the
"fair value" of their shares with respect to the Merger under Section 1574 of
the BCL (the "Dissenting Shares") shall be entitled solely to the payment of
the "fair value" of such shares in accordance with the provisions of the BCL;
except that (i) if such demand to receive "fair value" shall be withdrawn upon
the consent of the Surviving Corporation, (ii) if the Plan of Merger shall be
terminated, or the Merger shall not be consummated, (iii) if no demand or
petition for the determination of "fair value" by a court shall have been made
or filed within the time provided in the provisions of the BCL or (iv) if a
court of competent jurisdiction shall determine that such holder of Dissenting
Shares is not entitled to the relief provided by the provisions of the BCL,
then the right of such holder of Dissenting Shares to be paid the "fair value"
of his or her shares of Robec Common Stock shall cease and with respect to
clauses (i), (iii) and (iv) above, such Dissenting Shares shall thereupon be
deemed to have been converted into and to have become exchangeable for, as of
the Effective Date, the right to receive the Merger Consideration with respect
thereto, without any interest thereon, and with respect to clause (ii) above,
the status of such shareholder shall be restored retroactively without
prejudice to any corporate proceeding which may have been taken during the
interim. See "Dissenters Appraisal Rights" and a copy of the text of Subchapter
15D of the BCL attached as Annex III to this Prospectus/Proxy Statement.
THE AMENDED AGREEMENT
The following is a description of the material terms of the Amended
Agreement. The Amended and Restated Agreement and Plan of Reorganization, dated
as of August 11, 1994, was entered into on September 20, 1994. This Agreement
was amended by Amendment No. 1 to the Amended and Restated Agreement and Plan
of Reorganization, dated as of August 4, 1995 and by Amendment No. 2 to the
Amended and Restated Agreement and Plan of Reorganization, dated as of August
15, 1995 (together referred to as the "Amended Agreement"). The description
does not purport to be complete and is qualified in its entirety by reference
to the Amended Agreement, a copy of which is attached as Appendix II hereto.
THE EXCHANGE. The Amended Agreement provides for the acquisition of Robec by
AmeriQuest in a two-stage transaction: a share exchange between AmeriQuest and
the Principal Shareholders to be followed at a later date by the Merger. In
each stage, the holders of Robec Common Stock ultimately receive the same per
42
<PAGE>
share consideration. Pursuant to the Amended Agreement, the first stage
Exchange occurred on September 22, 1994 (the "Exchange Closing"). At the
Exchange Closing, each exchanged share of Robec Common Stock (the "Exchange
Shares") was exchanged for .63075 shares of AmeriQuest Common Stock. At the
Merger Closing, each Principal Shareholder will receive, as additional
consideration for each Exchange Share, (1) .19869 shares of AmeriQuest Common
Stock plus (2) in the event that the Market Price is less than $3.00 per share
on the Effective Date, additional shares of AmeriQuest Common Stock equal to
the difference between (a) .63075 multiplied by a quotient, the numerator of
which is $3.00 and the denominator of which is the Market Price and (b) .63075.
AmeriQuest has agreed with respect to the shares of Robec Common Stock obtained
in the Exchange that prior to the Effective Date it will (i) not sell, pledge,
assign or otherwise dispose of, or enter into any contract, option or other
arrangement with respect to the sale, transfer, pledge, assignment or other
disposition of, any shares of Robec Common Stock acquired in the Exchange
except to a wholly-owned subsidiary of AmeriQuest and (ii) vote all shares of
Robec Common Stock owned by it on the Record Date at any annual or special
meeting of the shareholders of Robec (a) in favor of the Plan of Merger, (b)
against any action or agreement which would result in a breach of a
representation, warranty or covenant of Robec in this Agreement or which would
otherwise impede, interfere with or attempt to discourage the Merger and (c)
against the nomination or election of any director other than the current
directors of Robec or any successor nominated by them. As a result of the
Exchange, AmeriQuest now owns 50.1% of the outstanding shares of Robec Common
Stock.
ROBEC STOCK OPTIONS. The Amended Agreement provides that on the Effective
Date, AmeriQuest will offer to exchange for each of the then-outstanding
options to purchase Robec Common Stock (collectively, the "Robec Options"),
including, without limitation, all outstanding options granted under Robec's
1989 Stock Option Plan, as amended (the "Robec Plan"), as well as any then
outstanding Robec Options not granted under the Robec Plan, an option to
purchase that number of shares of AmeriQuest Common Stock (collectively, the
"AmeriQuest Options") determined by multiplying the number of shares of Robec
Common Stock subject to such Robec Option on the Effective Date by the Exchange
Ratio, at an exercise price per share of AmeriQuest Common Stock equal to the
exercise price per share of such Robec Option divided by the Exchange Ratio.
AmeriQuest will cause the AmeriQuest Common Stock issuable upon exercise of the
AmeriQuest Options to be registered within 20 days after the Effective Date and
will use its best efforts to maintain the effectiveness of such registration
statement or registration statements for so long as any such AmeriQuest Options
shall remain outstanding, and AmeriQuest will reserve a sufficient number of
shares of AmeriQuest Common Stock for issuance upon exercise of the AmeriQuest
Options.
REPRESENTATIONS AND WARRANTIES; CONDUCT OF BUSINESS PENDING THE MERGER. The
Amended Agreement contains various representations and warranties of AmeriQuest
and Robec relating to, among other things, the following matters (which
representations and warranties are subject, in certain cases, to specified
exceptions): (i) the due incorporation, power and standing of, and similar
corporate matters with respect to, each of Robec and AmeriQuest; (ii) the
absence of any conflict with each of Robec's and AmeriQuest's articles and
certificate of incorporation and bylaws, respectively, and compliance with
applicable laws; (iii) each of Robec's and AmeriQuest's capitalization; (iv)
the authorization, execution, delivery, performance and enforceability of the
Amended Agreement by each such party and of the transactions contemplated
thereby; (v) reports and other documents filed with the SEC and other
regulatory authorities and the accuracy of the information contained therein;
(vi) the absence of certain litigation or other proceedings; (vii) the absence
of any governmental or regulatory authorization, consent or approval required
to consummate the Merger; (viii) the absence of any material default under
agreements; (ix) the absence of any tax delinquencies; (x) the compliance of
financial statements with applicable accounting requirements and their
preparation in accordance with generally accepted accounting principles applied
on a consistent basis, fairly presenting the consolidated financial position of
such companies and each of their consolidated subsidiaries and the consolidated
results of their operations and cash flows for the applicable periods; and (xi)
the absence of undisclosed liabilities. The representations and warranties of
AmeriQuest shall be true as of the Effective Date and shall survive the
Effective Date. The representations and warranties of Robec did not survive the
closing
43
<PAGE>
of the Exchange and are therefore of no further force or effect. In addition,
pursuant to the Amended Agreement, AmeriQuest has agreed to carry on its
business, prior to the Effective Date, in the usual and ordinary course, and
has agreed that certain material transactions prior to the Effective Date
require the written consent of Robec.
CONDITIONS TO CONSUMMATION OF THE MERGER. The obligations of AmeriQuest and
Robec to consummate the Merger are subject to the satisfaction of two
conditions: (i) the approval and adoption of the Plan of Merger by the
shareholders of Robec and (ii) that no preliminary or permanent injunction or
other order shall have been issued by any federal or state court which remains
pending and prevents the consummation of the Merger. In addition, the
obligation of Robec to consummate the Merger is subject to the satisfaction of
certain other conditions, including: (i) the Registration Statement of which
this Prospectus/Proxy Statement is a part shall have been declared effective by
the SEC and not be the subject of any stop order or any other proceeding by the
SEC which would bring into question the accuracy and adequacy of the
disclosures contained herein; (ii) the AmeriQuest Common Stock to be issued in
connection with the Merger shall have been approved for listing on the NYSE
subject to official notice of issuance; (iii) completion of the Investment by
Computer 2000 and (iv) the representations and warranties of AmeriQuest
contained in the Amended Agreement shall be true on and as of the Effective
Date, as if made on that date, except for any variation permitted by the
Amended Agreement, and AmeriQuest shall have performed all material covenants
and obligations and complied with all material conditions required by the
Amended Agreement to be performed or complied with by it prior to the Effective
Date.
INDEMNIFICATION; INSURANCE. The Amended Agreement provides that the Articles
of Incorporation of the Surviving Corporation shall contain the provisions with
respect to indemnification that were included in the Articles of Incorporation
of Robec on the date of the Amended Agreement, which provisions shall not be
amended, repealed or otherwise modified for a period of six years from the
Effective Date in any manner that would adversely affect the rights thereunder
of individuals who at the Effective Date were directors, officers, employees or
agents of Robec, unless such modifications are required by law. After the
Effective Date (and with respect to the Principal Shareholders, after the
Exchange), AmeriQuest and the Surviving Corporation shall, to the fullest
extent permitted under applicable law or under AmeriQuest's or the Surviving
Corporation's Certificate or Articles of Incorporation or By-Laws, indemnify
and hold harmless each present and former director and officer of Robec, and to
the fullest extent permitted under applicable law, each Principal Shareholder
(collectively, the "Indemnified Parties"), against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to any action or
omission occurring prior to the Effective Date, or arising out of or pertaining
to the transactions contemplated by the Amended Agreement (collectively,
"Damages"), for a period of six years after the execution of the Amended
Agreement. Furthermore, after such six year period, AmeriQuest and the
Surviving Corporation shall, to the fullest extent permitted under applicable
law, indemnify and hold harmless the Principal Shareholder in their capacity as
shareholders against any Damages arising out of or pertaining to the
transactions contemplated by the Amended Agreement. For a period of two years
after the Effective Date, AmeriQuest shall cause the Surviving Corporation to
use its best efforts to maintain in effect, if available, directors' and
officers' liability insurance coverage for those persons who were previously
covered by Robec's directors' and officers' liability insurance policy on terms
comparable to those applicable to the directors and officers of AmeriQuest as
of the execution of the Amended Agreement.
TERMINATION. The Amended Agreement may only be terminated: (i) by mutual
agreement of Robec and AmeriQuest; (ii) by Robec, if there has been a breach by
AmeriQuest of any representation, warranty, covenant or agreement set forth in
the Amended Agreement on the part of AmeriQuest which has or can reasonably be
expected to have a material adverse effect on AmeriQuest and which AmeriQuest
fails to cure prior to the Effective Date (except that no cure period shall be
provided for a breach by AmeriQuest which
44
<PAGE>
by its nature cannot be cured); or (iii) by Robec if the Merger shall not have
occurred on or prior to December 31, 1994 and Computer 2000 has not completed
the Investment. Thus, the Amended Agreement may not be terminated by AmeriQuest
without the consent of Robec.
AMENDMENT; WAIVER. The Amended Agreement provides that it may be amended by
the parties thereto, by or pursuant to action taken by their respective Boards
of Directors, at any time before or after approval thereof by the shareholders
of Robec, but, after such approval, no amendment shall be made which changes
the Exchange Ratio or which in any way materially adversely affects the rights
of such shareholders, without such further approval of such shareholders. Any
failure by Robec to comply with any of its respective obligations, agreements
or covenants set forth in the Amended Agreement may be expressly waived in
writing by AmeriQuest. Any amendment to the Amended Agreement by Robec shall
require, in addition to any other approval required by applicable law or
Robec's charter documents, the approval of a majority of the Robec directors
who were directors of Robec prior to the Exchange.
REGISTRATION RIGHTS. Pursuant to the Amended Agreement and the terms of a
Registration Rights Agreement by and between AmeriQuest and each of the
Principal Shareholders, AmeriQuest, at its sole expense, prepared and filed a
registration statement on Form S-3 under the Securities Act for use by the
Principal Shareholders with respect to the shares of AmeriQuest Common Stock
which they received in connection with the Exchange and which they will receive
in connection with the Merger. AmeriQuest's S-3 Registration Statement was
declared effective on July 12, 1995. Further, AmeriQuest shall maintain the
effectiveness of the S-3 Registration Statement until such time as such shares
of AmeriQuest Common Stock are no longer deemed to be "restricted securities"
as defined in Rule 144(a)(3) promulgated under the Securities Act. Should any
Principal Shareholder thereafter still be deemed to be an "affiliate" of
AmeriQuest, AmeriQuest shall continue to maintain the effectiveness of such S-3
Registration Statement for the benefit of such "affiliate(s)" until such
Principal Shareholder shall no longer be deemed an "affiliate."
PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma condensed combined financial statements reflect the
acquisition of 49 percent of Robec's Common Stock not owned by AmeriQuest and
the effects of the Computer 2000 Purchase Agreement. The unaudited pro forma
condensed combined statement of income combines the results of operations of
AmeriQuest, Kenfil, Robec and NCD for the twelve months ended June 30, 1994 and
the nine months ended March 31, 1995 giving effect to the above transactions as
if they had occurred on July 1, 1993. The historical statement of income for
Robec and NCD includes their results prior to their acquisition by AmeriQuest.
The unaudited pro forma condensed combined balance sheet as of March 31, 1995,
gives effect to the acquisition of 49 percent of Robec's common stock not owned
by AmeriQuest and the Computer 2000 Purchase Agreement as if they had occurred
on that date. The acquisitions are accounted for under the purchase method of
accounting. The pro forma information is not necessarily indicative of the
operating results or financial position that would have occurred had the merger
been consummated at the beginning of the periods presented, nor is it
necessarily indicative of future operations results or financial position.
Effective June 6, 1994, AmeriQuest acquired 51 percent of the outstanding
common stock of Kenfil. The remaining 49 percent of outstanding Kenfil common
stock was acquired on September 12, 1994. Effective September 22, 1994,
Ameriquest acquired 50.1 percent of the outstanding common stock of Robec, Inc.
Effective November 15, 1994, AmeriQuest acquired 100 percent of the outstanding
common stock of NCD. The historical operating results of AmeriQuest for the
nine month period ended March 31, 1995 includes the historical operating
results of Kenfil for the complete period and that of Robec and NCD for the
periods of September 22, 1994 to March 31, 1995 and November 15, 1994 to March
31, 1995, respectively. The historical balance sheet of AmeriQuest includes the
historical balance sheets of Kenfil, Robec and NCD at March 31, 1995.
45
<PAGE>
AMERIQUEST TECHNOLOGIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED BALANCE SHEET
MARCH 31, 1995 (UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
AMERIQUEST PRO FORMA
TECHNOLOGIES, INC. ADJUSTMENTS PRO FORMA
------------------ ----------- ----------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash.................... $ 425 $ -- $ 425
Accounts receivable,
net.................... 58,765 -- 58,765
Inventories............. 69,185 -- 69,185
Prepaid expenses and
other.................. 3,337 -- 3,337
---------- -------- ----------
Total current assets.. 131,712 -- 131,712
PROPERTY AND EQUIPMENT,
NET..................... 6,002 -- 6,002
INTANGIBLE ASSETS, NET... 30,598 2,750 (A)(D) 33,348 (I)
OTHER ASSETS............. 1,727 -- 1,727
---------- -------- ----------
$ 170,039 $ 2,750 $ 172,789
========== ======== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable........ $ 45,819 $(15,250)(H) $ 30,569
Notes payable........... 68,951 (16,000)(H) 52,951
Subordinated notes
payable................ 18,000 (18,000)(H) --
Other................... 7,450 -- 7,450
---------- -------- ----------
Total current
liabilities.......... 140,220 (49,250) 90,970
---------- -------- ----------
LONG-TERM OBLIGATIONS.... 572 -- 572
MINORITY INTEREST........ 2,800 (2,800)(A)(C) --
STOCKHOLDERS' EQUITY
Preferred stock, $.01
par value; authorized
10,000,000 shares;
no shares issued and
outstanding............ -- -- --
Common stock, $.01 par
value.................. 203 260 (H) 500
37 (A)
Additional paid-in cap-
ital................... 51,381 48,990 (H) 105,884
5,513 (A)
Retained deficit........ (24,012) -- (24,012)
Receivables from affil-
iates.................. (1,125) -- (1,125)
---------- -------- ----------
Total stockholders'
equity............... 26,447 54,800 81,247 (B)(I)
---------- -------- ----------
$ 170,039 $ 2,750 $ 172,789
========== ======== ==========
OUTSTANDING COMMON
SHARES.................. 20,984,736 50,649,736
========== ==========
</TABLE>
46
<PAGE>
AMERIQUEST TECHNOLOGIES, INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR YEAR ENDED JUNE 30, 1994
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
AMERIQUEST KENFIL PRO FORMA PRO FORMA
TECHNOLOGIES, INC.(G) INC. ROBEC, INC. NCD ADJUSTMENTS COMBINED
--------------------- -------- ----------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
NET SALES(E)............ $ 87,593 $138,759 $168,446 $218,808 $ -- $613,606
COST OF SALES........... 75,023 128,843 155,836 202,114 -- 561,816
--------- -------- -------- -------- ------ ----------
Gross profit........... 12,570 9,916 12,610 16,694 -- 51,790
OPERATING EXPENSES
Selling, general and
administrative........ 14,144 24,653 22,985 13,259 2,158 (D) 77,199
Restructuring charge
and earthquake
loss(F)............... 5,700 3,430 -- -- -- 9,130
--------- -------- -------- -------- ------ ----------
Income (loss) from
operations............ (7,274) (18,167) (10,375) 3,435 (2,158) (34,539)
OTHER INCOME (EXPENSE)
Other income........... 31 40 -- -- 71
Interest expense....... (728) (2,626) (1,613) (1,908) 2,910 (E) (3,965)
--------- -------- -------- -------- ------ ----------
(697) (2,586) (1,613) (1,908) 2,910 (3,894)
--------- -------- -------- -------- ------ ----------
Income (loss) before
taxes................. (7,971) (20,753) (11,988) 1,527 752 (38,433)
PROVISION FOR INCOME
TAXES.................. -- 17 (814) -- -- (797)
--------- -------- -------- -------- ------ ----------
Net income (loss)(F)... $ (7,971) $(20,770) $(11,174) $ 1,527 $ 752 $ (37,636)(F)(I)
========= ======== ======== ======== ====== ==========
Net income (loss) per
common share and common
share equivalent....... $ (1.33) $ (0.80)(I)
========= ==========
Common and common
equivalent shares...... 5,973,511 47,305,380
========= ==========
</TABLE>
47
<PAGE>
AMERIQUEST TECHNOLOGIES, INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR NINE MONTHS ENDED MARCH 31, 1995
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AMERIQUEST PRO FORMA PRO FORMA
TECHNOLOGIES, INC. ROBEC, INC. NCD ADJUSTMENTS COMBINED
------------------ ----------- ------- ----------- ----------
<S> <C> <C> <C> <C> <C>
NET SALES............... $ 305,664 $22,351 $81,212 $ -- $ 409,227
COST OF SALES........... 285,329 22,450 74,893 -- 382,672
---------- ------- ------- ------ ----------
Gross profit.......... 20,335 (99) 6,319 -- 26,555
OPERATING EXPENSES
Selling, general and
administrative....... 25,335 3,317 4,781 1,166 (D) 34,599
---------- ------- ------- ------ ----------
Income (loss) from
operations........... (5,000) (3,416) 1,538 (1,166) (8,044)
OTHER INCOME (EXPENSE)
Other income
(expense)............ (282) -- -- -- (282)
Interest expense...... (4,161) (201) (924) 1,715 (E) (3,571)
---------- ------- ------- ------ ----------
(4,443) (201) (924) 1,715 (3,853)
---------- ------- ------- ------ ----------
Income (loss) before
taxes................ (9,443) (3,617) 614 549 (11,897)
PROVISION FOR INCOME
TAXES.................. -- -- -- -- --
---------- ------- ------- ------ ----------
Net income (loss)..... $ (9,443) $(3,617) $ 614 $ 549 $ (11,897)(I)
========== ======= ======= ====== ==========
Net income (loss) per
common share and common
share equivalent....... $ (.52) $ (0.24)(I)
========== ==========
Common and common
equivalent shares...... 18,192,672 49,629,963
========== ==========
</TABLE>
48
<PAGE>
FOOTNOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS OF AMERIQUEST TECHNOLOGIES, INC. AND ROBEC INC.
The following footnotes reflect the assumptions made in the preparation of
the Pro Forma Condensed Consolidated Financial Statements.
(A) To effect the purchase of 49 percent of Robec common stock not owned by
AmeriQuest, AmeriQuest will issue approximately 3,700,000 shares of
AmeriQuest common stock in exchange for 2,235,000 shares of Robec common
stock, in accordance with the terms of the Amended Robec Merger Agreement
(based on an assumed AmeriQuest quoted market price of $2.00 per share).
The Amended Robec Merger Agreement calls for an increase in the exchange
ratio and a guaranteed AmeriQuest market price of $3.00 per share for all
Robec shares exchanged. The AmeriQuest common stock is valued at a
discounted quoted market price, based upon weighted average discounts
received on recently completed private equity transactions. This valuation
represents management's estimate of its fair market value. For purposes of
these pro forma financial statements, the discounted quoted market price of
AmeriQuest common stock is assumed to be $1.50 per share. No assurance can
be given that the number of shares to be issued to the Robec shareholders
will not be a greater number than that reflected herein, as the exact
number of shares is subject to adjustment based on the quoted market value
of AmeriQuest Common Stock on the business day prior to the closing. See
"Information Regarding the Merger--The Merger."
(B) The Company valued its common stock issued in connection with its Kenfil,
Robec and NCD acquisitions at a discounted quoted market price, based upon
weighted average discounts received on recently completed private equity
cash transactions. This valuation represents management's best estimate of
the fair value of the Company's common stock. This valuation represents a
significant discount from quoted market prices due to the thin public
trading volume and small public float of AmeriQuest common stock.
(C) To eliminate the historical minority interest in Robec.
(D) To record goodwill associated with the completion of the Robec Merger and
amortization of this and previous Fiscal 1995 acquisitions over the
estimated economic life of 10 years.
Management believes that the most significant intangible acquired is that
of the distribution channels. Management has assigned a 10 year economic
life to this intangible asset as that is the period of time that management
expects to derive benefit from existing vendor relationships and market
position. Management determined that 10 years is an appropriate economic
life based upon the historical length of the acquiree's vendor
relationships and the overall size and quality of the vendors and their
product offering.
Management is currently in the process of completing its detailed analysis
of the fair value of Robec and NCD net assets acquired and therefore the
allocation of the purchase price to the various assets and liabilities
acquired, including the amount of goodwill presented herein, may change as
a result of the completed analysis. Management however, does not expect
future purchase price allocation adjustments to have a material effect of
the Company's future results of operations and financial position.
(E) To reduce interest expense associated with the redemptions of the following
debt instruments related to the Kenfil and NCD acquisition and the Computer
2000 investment.
<TABLE>
<CAPTION>
DEBT INSTRUMENT REDEMPTION INTEREST EXPENSE ELIMINATED
-------------------------- -------------------------------
FISCAL YEAR NINE MONTHS ENDED
JUNE 30, 1994 MARCH 31, 1995
------------- -----------------
<S> <C> <C>
Kenfil subordinated debt of $3,175,000... $ 380,000 $ --
NCD subordinated debt of $2,737,000...... 360,000 164,000
AQS notes payable of $27,287,000......... 2,170,000 1,551,000
---------- ----------
$2,910,000 $1,715,000
========== ==========
</TABLE>
As the funds used to finance the NCD acquisition and the redemption of the
above debt instruments were provided by the October 1994 private placement
and the Computer 2000 investment, no forfeited investment earnings are
included in these pro forma financial statements.
49
<PAGE>
(F) The restructuring charge of $5,700,000 included in AmeriQuest's historical
statement of operations relates principally to the write-off of certain
former personal computer joint venture operations. The earthquake loss of
$3,430,000 included in Kenfil's historical financials is for losses
sustained in the Southern California earthquake.
(G) Effective December 1993, AQS acquired certain assets and assumed certain
liabilities of Management Systems Group and acquired the outstanding stock
of Rhino Sales Company. The impact of these acquisitions to the Pro Forma
Statement of Operations for the year ended June 30, 1994 would be to
increase revenues approximately $20 million, with no effect on net income.
(H) To give effect to the amended Computer 2000 investment agreement entered
into in August, 1995. This agreement calls for the ultimate issuance of
approximately 8,108,000 shares of AmeriQuest Common Stock to Computer 2000
in satisfaction of the $18 million advance made in November, 1994 and the
ultimate issuance of approximately 17,857,000 shares of AmeriQuest common
stock at $1.75 per share for aggregate net proceeds of approximately $31.3
million. These net proceeds will be used to reduce trade and notes payable.
The amended Computer 2000 investment agreement also includes warrants to
purchase an additional 14,034,000 shares of AmeriQuest Common Stock at
$0.05 per share. The agreement also calls for anti-dilution warrants
related to additional shares issuable in the Robec Merger and various other
outstanding warrant and option agreements.
Initially AmeriQuest will issue Preferred Stock in connection with the
Computer 2000 Purchase Agreement. Upon AmeriQuest stockholder approval to
increase the number of authorized shares of AmeriQuest Common Stock, the
AmeriQuest Preferred Stock will convert into the number of Common Stock
shares indicated above.
(I) In connection with executive and operating management changes, AmeriQuest
has made the decision to terminate its entertainment software business and
focus its product line offerings by eliminating certain lower margin
products and vendors within its computer hardware distribution business.
As a result, the Company will record a charge in the fourth quarter of
fiscal 1995 estimated to be approximately $25 million associated with the
write-off of the intangible assets related to the entertainment software
business, the write-down of related inventory to liquidation value and the
reserve of customer and vendor receivables to their recoverable value. In
addition to the fourth quarter fiscal 1995 loss related to the termination
of the entertainment software business, the Company expects to record
further substantial fourth quarter operating losses due to the continued
sales volume reductions experienced by the Company and expected substantial
inventory realization reserves associated with the elimination of certain
lower margin products and vendors within the Company's computer hardware
distribution business. These losses are not reflected in the pro forma
financial statements as they relate to activity and management decisions
occurring after the third quarter of fiscal 1995. (See "Risk Factors--
Termination of Entertainment Software Business and Significant Fourth
Quarter Fiscal 1995 Operating Loss").
50
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of AmeriQuest, as of March
31, 1995, and as adjusted to give effect to the Computer 2000 Purchase
Agreement and to the acquisition of 49 percent of Robec's common stock not
owned by AmeriQuest. See "Information Regarding the Merger--The Plan of
Reorganization--The Merger--Terms of the Merger."
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
---------- -----------------------
AMERIQUEST ADJUSTMENTS(A) COMBINED
(AMOUNTS IN MILLIONS) ---------- -------------- --------
<S> <C> <C> <C>
Short-term debt, including current
maturities.............................. $ 68.9 $(16.0) $ 52.9
Subordinated note payable................ 18.0 (18.0) --
------ ------ ------
Total debt........................... 86.9 (34.0) 52.9
Minority interest........................ 2.8 (2.8) --
Shareholders' equity:
Common Stock........................... 0.2 0.3 0.5
Additional paid-in capital............. 51.4 54.5 105.9
Retained earnings (deficit)............ (24.0) -- (24.0)
Receivable from affiliates............. (1.1) -- (1.1)
------ ------ ------
Total shareholders' equity............ 26.5 54.8 81.3 (B)
------ ------ ------
Total capitalization..................... $116.2 $ 18.0 $134.2
====== ====== ======
</TABLE>
- --------
(A) To give effect to the issuance of 3,700,000 shares of AmeriQuest common
stock for the remaining 49 percent of Robec common stock and the issuance
of approximately 8.1 million shares of AmeriQuest Common Stock in
satisfaction of Computer 2000's $18 million advance and approximately 17.9
million shares of AmeriQuest Common Stock at $1.75 per share (see "Recent
Developments" for a description of the terms of the Computer 2000 Purchase
Agreement). Short term debt will be reduced by $16 million with a portion
of the net proceeds received by AmeriQuest from the Computer 2000
investment.
(B) In connection with executive and operating management changes, AmeriQuest
has made the decision to terminate its entertainment software business and
focus its product line offerings by eliminating certain lower margin
products and vendors within its computer hardware distribution business.
As a result, the Company will record a charge in the fourth quarter of
fiscal 1995 estimated to be approximately $25 million associated with the
write-off of the intangible assets related to the entertainment software
business, the write-down of related inventory to liquidation value and the
reserve of customer and vendor receivables to their recoverable value. In
addition to the fourth quarter fiscal 1995 loss related to the termination
of the entertainment software business, the Company expects to record
further substantial fourth quarter operating losses due to the continued
sales volume reductions experienced by the Company and expected substantial
inventory realization reserves associated with the elimination of certain
lower margin products and vendors within the Company's computer hardware
distribution business. These losses are not reflected in the pro forma
financial statements as they relate to activity and management decisions
occurring after the third quarter of fiscal 1995. (See "Risk Factors--
Termination of Entertainment Software Business and Significant Fourth
Quarter Fiscal 1995 Operating Loss").
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COMPARATIVE MARKET PRICES OF COMMON STOCK
The following table sets forth the comparative market prices for the shares
of Common Stock of AmeriQuest and Robec. The prices for AmeriQuest Common Stock
reflect the high and low closing prices reported on the New York Stock Exchange
for each calendar quarter since December 31, 1991, while the prices for Robec
Common Stock reflect the high and low last sale prices as reported by the
Nasdaq National Market System for each calendar quarter since December 31,
1991.
<TABLE>
<CAPTION>
AMERIQUEST ROBEC
------------- --------------
1992 HIGH LOW HIGH LOW
---- ------ ------ ------- ------
<S> <C> <C> <C> <C>
First Quarter................................ $3 3/4 $2 3/8 $ 5 3/4 $3 3/4
Second Quarter............................... 3 1 1/2 5 1/4 2 1/2
Third Quarter................................ 2 1/4 1 1/4 3 1/4 2 1/4
Fourth Quarter............................... 3 3/4 1 1/2 3 1/4 2 1/4
<CAPTION>
1993
----
<S> <C> <C> <C> <C>
First Quarter................................ 3 3/8 2 3 1/4 2 3/8
Second Quarter............................... 3 5/8 2 3 1/4 2 3/8
Third Quarter................................ 3 1/4 2 3 1/4 2 1/4
Fourth Quarter............................... 5 7/8 2 1/2 3 1/4 2 3/8
<CAPTION>
1994
----
<S> <C> <C> <C> <C>
First Quarter................................ 6 4 1/8 2 7/8 1 1/2
Second Quarter............................... 4 1/8 3 1 7/8 1/2
Third Quarter................................ 4 1/4 3 1/8 2 1/8 1 1/4
Fourth Quarter............................... 3 3/4 2 7/8 1 7/8 1 9/16
<CAPTION>
1995
----
<S> <C> <C> <C> <C>
First Quarter................................ 3 1/8 2 1/2 1 15/16 1 1/2
Second Quarter............................... 3 1/4 1 3/4 1 13/16 1 1/2
</TABLE>
On August 18, 1995, the share price of AmeriQuest Common Stock closed at
$1.75 per share on the New York Stock Exchange and the last sale price of Robec
Common Stock was $1.94 per share on the Nasdaq National Market System. On June
29, 1994, the day before the business combination of AmeriQuest and Robec was
publicly announced, the share price of AmeriQuest Common Stock closed at $3.25
per share on the New York Stock Exchange and the last sale price of Robec
Common Stock was $0.88 per share on the Nasdaq National Market System.
As of August 18, 1995 Robec had approximately 90 shareholders of record.
DIVIDEND POLICY
Neither AmeriQuest nor Robec has paid a dividend of any kind in the past 5
years. Any declaration of cash or stock dividends will depend upon AmeriQuest's
earnings, financial position, dividend restrictions in any credit facility and
other relevant factors existing at the time. It is not anticipated that
AmeriQuest will pay dividends in the foreseeable future.
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DESCRIPTION OF CAPITAL STOCK OF AMERIQUEST
GENERAL
As of August 10, 1995, the authorized capital stock of AmeriQuest consisted
of 30,000,000 shares of common stock, par value $.01 per share, of which
24,303,572 shares were outstanding (none of which were held as treasury stock)
and 10,000,000 shares of preferred stock, par value $.01 per share, of which no
shares were issued and outstanding. AmeriQuest authorized the issuance of
several series of Preferred Stock to accommodate the Investment, such that the
authorized Preferred Stock now consists of a Series A Preferred Stock (810,811
shares), Series B Preferred Stock (1,785,714 shares), Series D Preferred Stock
(1,403,475 shares), Series E Preferred Stock (400,000 shares) and Series F
Preferred Stock (514,857 shares).
PREFERRED STOCK
Each series of Preferred Stock, other than Series E Preferred Stock, is
initially convertible into 10 shares of AmeriQuest's Common Stock and the
Series E Preferred Stock is initially convertible into 25 shares of
AmeriQuest's Common Stock, and the conversion rate of each series of Preferred
Stock is subject to adjustment for stock splits, combination, dividends,
recapitalizations and the like effecting the Common Stock. The Preferred Stock
automatically converts into AmeriQuest Common Stock at such time as there are
sufficient number of authorized shares of Common Stock reserved to effect the
conversion or exercise of all outstanding shares of Preferred Stock and all
rights, options or warrants convertible or exercisable for Preferred Stock. The
Preferred Stock votes with the Common Stock on an as-converted basis, except so
long as any Preferred Stock is outstanding (i) the approval of 85% of the
outstanding shares of a series of Preferred Stock is required to increase the
authorized Preferred Stock of that series or to amend AmeriQuest's Certificate
of Incorporation or Bylaws if such amendment would alter or change the rights,
preferences or privileges of such series of Preferred Stock and (ii) the vote
of a majority of all the outstanding shares of Preferred Stock is required to
increase the total number of authorized shares of Preferred Stock, to authorize
or issue to any securities senior to or on a parity with the Preferred Stock or
for any merger of the Issuer or any sale of all or substantially all of
AmeriQuest's assets, or to increase the size of the Board in excess of nine
members. The Preferred Stock has the right to receive dividends when declared
by the Board equal to the dividends paid with respect to the number of shares
of AmeriQuest Common Stock into which the Preferred Stock is convertible. In
the event of any liquidation, dissolution or winding-up of AmeriQuest,
including by merger or sale of assets, the Preferred Stock shall be entitled to
be paid the original purchase price for such applicable series of Preferred
Stock ($22.20, $17.50, $0.53, $1.25 and $5.25 for Series A, B, D, E and F
Preferred Stock, respectively) plus all unpaid dividends, prior to any payment
to the holders of Common Stock; thereafter all other payments or distribution
shall be made to the holders of Common Stock.
COMMON STOCK
All outstanding shares of AmeriQuest Common Stock are, and all shares of
AmeriQuest Common Stock issued in connection with the Merger when issued as
described herein will be, fully paid, validly issued and non-assessable. Each
share of AmeriQuest Common Stock has the same relative right as, and is
identical in all respects with, each other share of AmeriQuest Common Stock.
The Purchase Agreement between AmeriQuest and Computer 2000 provides that
Computer 2000 has the right to acquire newly issued shares of AmeriQuest to
give Computer 2000 a 62% ownership interest in AmeriQuest. See "Businesses of
the Companies--AmeriQuest--Recent Developments." Accordingly, AmeriQuest will
seek stockholder approval to increase the number of shares of AmeriQuest Common
Stock authorized for issuance by AmeriQuest from 30,000,000 shares to
100,000,000 shares.
DIVIDENDS
AmeriQuest may pay cash dividends if, as and when declared by its Board of
Directors, subject to applicable provisions of Delaware law. The holders of
AmeriQuest Common Stock will be entitled to receive
53
<PAGE>
and to share equally in such dividends as may be declared by the Board of
Directors of AmeriQuest out of funds legally available therefor. See "Dividend
Policy."
VOTING RIGHTS
Holders of AmeriQuest Common Stock are entitled to one vote for each share
held by them in all matters submitted to the shareholders of AmeriQuest.
Holders of AmeriQuest Common Stock do not have cumulative voting rights in the
election of directors.
LIQUIDATION
In the event of a liquidation, dissolution or winding up of AmeriQuest, the
holders of AmeriQuest Common Stock would be entitled to receive, after payment
of all its debts and liabilities and other payments to holders of preferred
stock, if any, having priority rights, all other assets of AmeriQuest
available. Such stockholders would be entitled to participate ratably in the
net assets available for distribution.
PRE-EMPTIVE RIGHTS
The Certificate of Incorporation of AmeriQuest does not grant holders of
AmeriQuest Common Stock pre-emptive rights.
ANTI-TAKEOVER PROVISIONS
See "Comparison of Shareholder Rights--Business Combinations with Interested
Shareholders."
COMPARISON OF SHAREHOLDER RIGHTS
The following is a summary of material differences between the rights of
holders of Robec Common Stock and the rights of holders of AmeriQuest Common
Stock.
The rights of the shareholders of Robec, a Pennsylvania corporation, are
governed primarily by Pennsylvania law and the Articles of Incorporation and
By-Laws of Robec. Upon consummation of the Merger, Robec shareholders who have
not exercised their statutory dissenters rights will become holders of
AmeriQuest Common Stock. Because AmeriQuest is a Delaware corporation, the
rights of the former Robec shareholders will be governed primarily by Delaware
law and AmeriQuest's Certificate of Incorporation and By-Laws. Except as set
forth below, Robec and AmeriQuest do not believe that there are any material
differences in shareholders' rights under Pennsylvania and Delaware law and the
Articles and Certificate of Incorporation and By-Laws of Robec and AmeriQuest,
respectively. This discussion, however, is not and does not purport to be
complete or to identify all differences that may, under any given fact
situation, be material to shareholders.
BY-LAWS
Under Pennsylvania law the power to adopt, amend or repeal by-laws may be
vested by the by-laws in the directors, with statutory exceptions for certain
actions and subject to the power of shareholders to change such actions.
Pennsylvania law provides that unless the articles of incorporation otherwise
provide, shareholders may change the by-laws without the consent of the
directors. Robec's By-Laws provide its shareholders with the power to alter,
amend or repeal the By-Laws by the majority vote of shareholders at any meeting
at which a quorum is present except that a vote of 66 2/3% of the votes which
shareholders are entitled to cast shall be necessary to alter, amend or repeal
Section 3.2 (dealing with the nomination of directors) and Article IX (dealing
with amendments thereto) thereof. The Board of Directors of Robec may also
alter, amend or repeal the By-Laws subject to the power of the shareholders to
change such action. Under
54
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Delaware law a corporation's certificate of incorporation may confer the power
to adopt, amend or repeal by-laws upon the directors (although it may not
divest the stockholders of such power). AmeriQuest's Certificate of
Incorporation expressly authorizes its board of directors to alter or repeal
AmeriQuest's By-Laws subject to the shareholders' power to change such action.
DIVIDEND DECLARATIONS
Under Pennsylvania law a corporation has the power, subject to restrictions
in its bylaws, to make distributions to its shareholders unless after giving
effect thereto (i) the corporation would not be able to pay its debts as they
become due in the usual course of business, or (ii) the corporation's assets
would be less than the sum of its total liabilities plus the amount that would
be needed upon the dissolution of the corporation to satisfy the preferential
rights, if any, of shareholders having superior preferential rights to those
shareholders receiving the distribution. Under Delaware law the directors may,
subject to any restrictions in a company's certificate of incorporation,
declare and pay dividends, either (i) out of its surplus, defined as the excess
of the net assets of the corporation over the amount determined to be the
capital of the corporation by the board of directors (which amount cannot be
less than the aggregate per value of all issued shares of capital stock), or
(ii) in case there shall be no surplus, out of the net profits for the fiscal
year in which the dividend is declared and the preceding year. The directors of
a Delaware corporation may not declare a dividend out of net profits, however,
if the capital of the corporation is less than the aggregate amount of capital
represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets. Neither Robec's By-Laws nor
AmeriQuest's Certificate of Incorporation and By-Laws contain limitations on
such powers.
TERMS OF DIRECTORS
Under Pennsylvania law the articles of incorporation may provide that
directors be elected in two or more classes whose terms expire at different
times provided that no single term shall exceed four years. Robec's Articles of
Incorporation provide for three classes of directors, each of which is elected
for three-year terms. Under Delaware law the certificate of incorporation or
by-laws of a company may provide that directors be elected in one, two or three
classes whose terms expire at different times provided that no single term
shall exceed three years. AmeriQuest's Certificate of Incorporation and By-Laws
provide for one class of directors.
REMOVAL OF DIRECTORS
Under Pennsylvania law unless the articles of incorporation or bylaws provide
otherwise, directors may be removed by the shareholders of a corporation for or
without cause, and by the board of directors for any proper cause specified in
the bylaws. Robec's By-Laws provide for such removal by shareholders entitled
to cast a majority of the votes which all shareholders would be entitled to
cast in the election of directors. Under Delaware law directors may be removed,
with or without cause, by the holders of a majority of the stock then entitled
to vote at an election of directors.
MEETINGS OF SHAREHOLDERS
Under Pennsylvania law special meetings of shareholders may be called by the
board of directors, shareholders entitled to cast at least 20% of the votes
which all shareholders are entitled to cast at the particular meeting unless
otherwise provided in the articles of incorporation and by such officers or
other persons as may be provided in the by-laws. Robec's Articles of
Incorporation and By-Laws permit the President, the Board and shareholders
entitled to cast 10% of the vote which all shareholders are entitled to cast to
call a special meeting. Under Delaware law special meetings of stockholders may
be called by the board of directors or by such persons as may be authorized by
the certificate of incorporation or the by-laws. Under AmeriQuest's Certificate
of Incorporation and By-Laws, only the board of directors and designated
committees thereof may call a special meeting.
55
<PAGE>
ACTION BY SHAREHOLDERS WITHOUT MEETING
Under Pennsylvania law the bylaws may provide that any action which may be
taken at a meeting of the shareholders may be taken without a meeting if there
is written consent of shareholders who would have been entitled to cast the
minimum number of votes that would be necessary to authorize the action at a
meeting at which all the shareholders were present and voting. Robec's By-Laws
permit all actions to be taken by unanimous consent and any individual action
to be taken by the larger of two-thirds consent or the minimum percentage
necessary to authorize the action at a duly called meeting. Under Delaware law
unless otherwise provided in the certificate of incorporation, any action
required or which may be taken at any annual or special meeting of stockholders
may be taken without a meeting if written consents shall be obtained from the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereat were present and voted. AmeriQuest's By-
Laws permit actions to be taken by the written consent of the minimum votes
required to authorize the actions at a meeting.
DISSENTERS RIGHTS
Under Pennsylvania law shareholders may perfect dissenters rights with regard
to corporate actions involving certain mergers, consolidations, the sale, lease
or exchange of substantially all the assets of another corporation (under
limited circumstances) or the elimination of cumulative voting. However, under
the corporate laws of both states, dissenters rights are generally denied when
a corporation's shares are listed on a national securities exchange or held of
record by more than 2,000 persons. Under Delaware law stockholders may only
perfect appraisal rights with respect to corporate actions involving mergers or
consolidations. Stockholders of AmeriQuest do not have appraisal rights in
connection with the Merger while shareholders of Robec do have appraisal rights
in connection with the Merger.
SUPERMAJORITY PROVISIONS
Under both Pennsylvania and Delaware law the articles of incorporation or
certificate of incorporation, as the case may be, may provide for a higher
shareholder vote requirement than that required by law in order to approve
certain proposed actions or transactions of the corporation. Robec's Articles
of Incorporation and By-Laws require the vote of 66 2/3% of the votes which
shareholders are entitled to cast to (i) alter, amend or repeal Section 3.2
(nomination of directors) and Article IX (amendment of the By-Laws) of Robec's
By-Laws, (ii) repeal or amend Article III (limitation of directors' liability
and indemnification) of the By-Laws and (iii) to amend Article VIII (election
of directors) of the Company's Articles of Incorporation. The AmeriQuest
Certificate of Incorporation and By-Laws contain no supermajority voting
provisions.
BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS
Under Pennsylvania law no business combination (defined to include certain
mergers, sales of assets, sales of 5% or more of outstanding stock, loans,
recapitalizations or liquidations or dissolutions) involving a Pennsylvania
corporation and an interested shareholder (defined to be any holder of 20% or
more of the corporation's voting stock) may be entered into unless (i) approved
by the board of directors of the corporation prior to the interested
shareholder's share acquisition date, (ii) (a) five years have expired since
the acquisition of shares of the corporation by the interested shareholder, and
(b) either (1) a majority of shareholders of the corporation (excluding the
interested shareholder) approves the business combination, or (2) the business
combination is approved by an affirmative vote of all of the holders of all of
the outstanding common shares and satisfies certain minimum statutory
requirements, or (iii) approved (a) by a majority of votes that all
shareholders would be entitled to cast in an election of directors, not
including shares beneficially held by the interested shareholder provided that
(1) the meeting is called no earlier than three months after the interested
shareholder became, and if at the time of the meeting the interested
shareholder is, the beneficial owner of shares entitling the interested
shareholder to cast at least 80% of the votes that all shareholders would be
entitled to cast in an election of directors and (2) the business combination
satisfies
56
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certain other minimum statutory conditions, or (b) approved by the affirmative
vote of all of the holders of all of the outstanding common shares. However,
such law does not restrict any offer to purchase all of a corporation's shares.
Robec has opted out of the business combination rule and therefore such rule
does not apply to Robec.
Delaware has a similar law which defines an interested stockholder as a
holder of 5% or more of the corporation's voting stock. The Delaware law is
further distinguished in that it is inapplicable to business combinations
occurring more than three years after the interested stockholder acquired such
status. Exceptions to the rule against such business combinations include: (a)
prior approval by the board of directors of the business combination or the
transaction which resulted in the stockholder becoming an interested
shareholder and (b) subsequent approval of the business combination by the
board of directors and by a vote of at least two-thirds of the outstanding
voting stock of the corporation. The statute contains exceptions for cases in
which, upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, such interested stockholder holds 85% of
the voting stock of the company. The Delaware statute is applicable to
AmeriQuest as AmeriQuest has not opted out of its provisions.
FIDUCIARY DUTY
Under Pennsylvania law a director may, in considering the best interests of a
corporation, consider (i) the effects of any action on shareholders, employees,
suppliers, customers and creditors of the corporation, and upon communities in
which offices or other facilities of the corporation are located, (ii) the
short-term and long-term interests of the corporation, including the
possibility that the best interests of the corporation may be served by the
continued independence of the corporation, (iii) the resources, intent and
conduct of any person seeking to take control of the corporation and (iv) all
other pertinent factors. Delaware law contains no similar provision.
DERIVATIVE ACTIONS
Under Pennsylvania law a shareholder may maintain a derivative action, even
if the shareholder was not a shareholder at the time of the alleged wrongdoing,
if there is a strong prima facie case in favor of the claim asserted and if the
court determines in its discretion that serious injustice will result without
such action. Under Delaware law a shareholder may bring a derivative action
only if he or she was a shareholder at the time of the alleged wrongdoing and
has made a demand on the board of directors for relief.
LEGAL MATTERS
Certain legal matters with respect to the validity of the shares of
AmeriQuest Common Stock offered hereby will be passed upon for AmeriQuest by
Raymond L. Ridge, Esq., 3901 MacArthur Blvd., Ste. 200, Newport Beach, CA
92660.
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EXPERTS
The financial statements and schedules of the Company incorporated by
reference in this Prospectus and elsewhere in the Registration Statement to the
extent and for the periods indicated in their reports, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from Kenfil Inc.'s Annual Report
on Form 10-K for the year ended June 30, 1993 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and has been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
The consolidated balance sheets of Robec as of December 31, 1993 and 1994 and
the consolidated statements of operations, shareholders' equity, and cash flows
for each of the three years in the period ended December 31, 1994, have been
incorporated herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, with respect thereto, given on the authority of that
firm as experts in accounting and auditing.
The financial statements and schedule of Ross White Enterprises, Inc. (d/b/a
National Computer Distributors) as of March 31, 1994 and 1993, and for the two
years then ended have been incorporated by reference herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants related to such periods incorporated
by reference, and upon the authority of said firm as experts in accounting and
auditing.
The statements of operations, shareholders' equity, and cash flows of NCD for
the three-months ended March 31, 1992, included in this Prospectus/Registration
Statement, have been incorporated herein in reliance on the report of Hansen,
Barnett & Maxwell, independent accountants, with respect thereto, given on the
authority of that firm as experts in accounting and auditing.
The statements of operations, shareholders' equity, and cash flows for the
year in the period ended December 31, 1991, have been incorporated herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
with respect thereto, given on the authority of that firm as experts in
accounting and auditing.
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SHAREHOLDER PROPOSALS
Any proposal which an eligible shareholder of Robec desires to have presented
at Robec's next Annual Meeting of Shareholders (if the Merger has not been
consummated prior to the date the meeting is to be held) concerning a proper
subject for inclusion in the proxy statement and for consideration at an annual
meeting will be included in Robec's proxy statement and related proxy card if
it is received by Robec at 425 Privet Road, Horsham, PA 19044, Attention:
Secretary. The deadline for proposals of shareholders to be presented at the
1995 Annual Meeting of Shareholders has passed. Proposals of shareholders
intended to be presented at the 1996 Annual Meeting of Shareholders must be
received not less than 120 days in advance of the date of Robec's proxy
statement released to shareholders in connection with the 1995 Annual Meeting
of Shareholders.
OTHER MATTERS
The accompanying forms of Proxy are solicited by and on behalf of the
management of Robec whose Notice of Special Meeting is attached to this
Prospectus/Proxy Statement. Robec will bear the expenses of this solicitation
of Proxies. In addition to the use of the mails, Proxies may be solicited by
personal interview, telephone and by directors and officers and employees of
Robec. Arrangements may also be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of solicitation
material to the beneficial owners of stock held of record by such persons, and
Robec may reimburse them for reasonable out-of-pocket expenses incurred by them
in connection therewith.
Robec's board of directors does not intend to bring any other matters before
the Special Meeting and has no reason to believe any other matters will be
presented. If, however, other matters properly presented do come before the
meeting, it is the intention of the persons named as proxy agents in the
enclosed proxy card to vote upon such matters in accordance with their
judgment.
By Order of the Board of Directors,
Robert S. Beckett
Secretary
August 28, 1995
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APPENDIX I
PLAN OF MERGER
MERGING
RI ACQUISITION, INC.
(A PENNSYLVANIA CORPORATION)
AND
WITH AND INTO
ROBEC, INC.
(A PENNSYLVANIA CORPORATION)
RECITALS
A. RI ACQUISITION, INC. (the "Merging Corporation") is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, which is authorized to issue 10,000,000 shares of
Common Stock, par value $.01 per share ("Newco Common Stock"), of which
4,439,180 shares are issued and outstanding, all of which are owned of record
and beneficially by AmeriQuest Technologies, Inc., a Delaware corporation
("AmeriQuest").
B. ROBEC, INC. (the "Surviving Corporation") is a corporation duly organized
and validly existing under the laws of the Commonwealth of Pennsylvania, which
is authorized to issue 10,000,000 shares of Common Stock, par value $.01 per
share, ("Robec Common Stock"), of which 4,439,180 shares are issued and
outstanding and 5,000,000 shares of Preferred Stock, par value $.01 per share,
of which no shares are issued and outstanding.
C. The Board of Directors of the Merging Corporation has adopted resolutions
approving this Plan of Merger in accordance with the Pennsylvania Business
Corporation Law ("BCL"), and directing that it be submitted to the sole
shareholder of the Merging Corporation for adoption.
D. The Board of Directors of the Surviving Corporation has adopted
resolutions approving this Plan of Merger in accordance with the BCL and
directing that it be submitted to the shareholders of the Surviving Corporation
for adoption.
ARTICLE I
THE MERGER
1.1 The Merger. The Merging Corporation and the Surviving Corporation shall
effect a merger (the "Merger") in accordance with and subject to the terms and
conditions of this Plan of Merger (the "Plan"). On the Effective Date (as such
term is defined in Section 1.2 hereof), the Merging Corporation shall be merged
with and into the Surviving Corporation, and the separate existence of the
Merging Corporation, except insofar as it may be continued by law, shall cease,
all with the effect provided in Section 1929 of the BCL.
1.2 Effective Date. Articles of Merger, and such other documents and
instruments as are required by, and complying in all respects with, the BCL
shall be delivered to the Department of State of the Commonwealth of
Pennsylvania. The Merger shall become effective upon the filing of the Articles
of Merger with the Department of State of the Commonwealth of Pennsylvania (the
"Effective Date").
1.3 Further Assurances. If at any time the Surviving Corporation, or its
successors or assigns, shall consider or be advised that any further
assignments or assurances in law or any other acts are necessary or desirable
to (a) vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation its rights, title or interest in, to or under any of the rights,
properties or assets of the Merging Corporation acquired or to be
I-1
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acquired by the Surviving Corporation as a result of, or in connection with,
the Merger, or (b) otherwise carry out the purposes of this Plan, the Merging
Corporation and its proper officers and directors shall be deemed to have
granted to the Surviving Corporation an irrevocable power of attorney to
execute and deliver all such proper deeds, assignments and assurances in law
and to do all acts necessary or proper to vest, perfect or confirm title to and
possession of such rights, properties or assets in the Surviving Corporation
and otherwise to carry out the purposes of this Plan; and the proper officers
and directors of the Surviving Corporation are fully authorized in the name of
the Merging Corporation or otherwise to take any and all such action.
1.4 Amendment or Termination. Notwithstanding shareholder approval of this
Plan, this Plan may be amended or terminated at any time on or before the
Effective Date by agreement of the Boards of Directors of the Merging
Corporation and the Surviving Corporation or terminated by the Surviving
Corporation if the Merger does not occur within two business days of approval
of this Plan by the shareholders of the Surviving Corporation, provided that no
amendment may be made which decreases the amount of Merger Consideration (as
such term is defined in Section 3.1 hereof) payable to holders of Robec Common
Stock.
ARTICLE II
CAPITAL STOCK
2.1 Newco Common Stock. At the Effective Date, the number of outstanding
shares of Newco Common Stock shall be identical to the number of outstanding
shares of Robec Common Stock, and each share of Newco Common Stock then issued
and outstanding shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into one share of the Common Stock of
the Surviving Corporation.
2.2 Robec Common Stock. At the Effective Date, except for shares of Robec
Common Stock owned by AmeriQuest and for shares of Robec Common Stock held by
holders of Dissenting Shares (as such term is defined in Section 2.5), each
share of Robec Common Stock then issued and outstanding shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into .82944 (the "Applicable Fraction") of a validly issued, fully paid and
nonassessable share of AmeriQuest Common Stock; provided, however, that in the
event that the lesser of (A) the mean trading price (determined by dividing by
two the sum of the daily high and low price as reported in the Wall Street
Journal) of AmeriQuest Common Stock on the New York Stock Exchange on the
fourth trading day prior to the day on which Robec shareholders approve and
adopt this Plan (the "Meeting Date") or (B) the average of the mean trading
prices (determined by dividing by two the sum of the daily high and low prices
as reported in the Wall Street Journal) of AmeriQuest Common Stock on the New
York Stock Exchange for each of the twenty trading days prior to the fourth
trading day prior to the Meeting Date (the lesser of the amounts determined
pursuant to (A) or (B) above, the "Market Price"), is less than $3.00 per
share, the Applicable Fraction shall be equal to the sum of (A) the product of
(i) .63075 multiplied by (ii) a quotient, the numerator of which is $3.00 and
the denominator of which is the Market Price plus (B) .19869. Shares of Robec
Common Stock held by AmeriQuest on the Effective Date shall be canceled in the
Merger.
2.3 Fractional Shares. No fractional shares of AmeriQuest Common Stock will
be issued in connection with the Merger, but in lieu thereof each holder of
Robec Common Stock who would otherwise be entitled to receive a fraction of a
share of AmeriQuest Common Stock will receive an amount of cash equal to the
Market Price of AmeriQuest Common Stock multiplied by the fraction of a share
of AmeriQuest Common Stock to which such holder would otherwise be entitled,
without any interest thereon.
2.4 No Further Rights or Transfers. On and after the Effective Date, the
holder of a Certificate (as such term is defined in Section 3.3 hereof)
representing Robec Common Stock shall cease to have any rights as a shareholder
of Robec, except for the right to surrender his or her Certificate in exchange
for payment of the Merger Consideration.
2.5 Dissenting Shares. Notwithstanding anything herein to the contrary,
shares of Robec Common Stock that are outstanding immediately prior to the
Effective Date and that are held by shareholders, if any, who are entitled to
assert a right to dissent from the Merger and who demand and validly perfect
their rights to receive the "fair value" of their shares with respect to the
Merger under Section 1574 of the BCL (the "Dissenting Shares") shall be
entitled solely to the payment of the "fair value" of such shares in accordance
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with the provisions of the BCL; except that (i) if such demand to receive "fair
value" shall be withdrawn upon the consent of the Surviving Corporation, (ii)
if this Plan of Merger shall be terminated, or the Merger shall not be
consummated, (iii) if no demand or petition for the determination of "fair
value" by a court shall have been made or filed within the time provided in the
provisions of the BCL or (iv) if a court of competent jurisdiction shall
determine that such holder of Dissenting Shares is not entitled to the relief
provided by the provisions of the BCL, then the right of such holder of
Dissenting Shares to be paid the "fair value" of his shares of Robec Common
Stock shall cease and with respect to clauses (i), (iii) and (iv) above, such
Dissenting Shares shall thereupon be deemed to have been converted into and to
have become exchangeable for, as of the Effective Date, the right to receive
the Merger Consideration with respect thereto, without any interest thereon,
and with respect to clause (ii) above, the status of such shareholder shall be
restored retroactively without prejudice to any corporate proceeding which may
have been taken during the interim.
ARTICLE III
MERGER PAYMENT PROCEDURE
3.1 Merger Consideration. The certificates which represent shares of
AmeriQuest Common Stock to be issued in accordance with this Agreement to
holders of Robec Common Stock, excluding the holders of Dissenting Shares,
together with any dividends or distributions with respect thereto, and any cash
required in payment of fractional shares pursuant to Section 2.3 hereof, hereby
collectively constitute the "Merger Consideration."
3.2 Exchange Agent. AmeriQuest shall deposit the Merger Consideration with
American Stock Transfer and Trust Company or such other transfer agent as may
be mutually acceptable to both AmeriQuest and Robec (the "Exchange Agent") for
the benefit of holders of Robec Common Stock, promptly after the Effective
Date.
3.3 Transmittal Letter. As soon as practicable after the Effective Date, the
Exchange Agent shall send a notice and transmittal form to each holder of
record of a certificate or certificates theretofore evidencing shares of Robec
Common Stock (such certificates are collectively referred to herein as the
"Certificates"), advising such holder of the effectiveness of the Merger and
the procedure for surrendering to the Exchange Agent such Certificates for
exchange into the Merger Consideration. Upon the surrender of a Certificate to
the Exchange Agent together with and in accordance with such transmittal form,
the holder thereof shall be entitled to receive in exchange therefor the Merger
Consideration payable in respect of each share of Robec Common Stock
represented thereby. Upon such surrender, the Exchange Agent will promptly pay
the Merger Consideration. Each such Certificate shall be deemed for all
purposes to evidence only the right to receive the Merger Consideration.
3.4 Delivery To Person Other Than Registered Holder. If the Merger
Consideration (or any portion thereof) is to be delivered to a person other
than the person in whose name the Certificates surrendered in exchange therefor
are registered, it shall be a condition to the delivery of the Merger
Consideration that the Certificates so surrendered shall be properly endorsed
or accompanied by appropriate stock powers and otherwise be in proper form for
transfer, that such transfer otherwise be proper and that the person requesting
such transfer pay to the Exchange Agent any transfer or other taxes payable by
reason of the foregoing or establish to the satisfaction of the Exchange Agent
that such taxes have been paid or are not required to be paid.
3.5 Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, the owner of such lost, stolen or destroyed Certificate shall
deliver to the Surviving Corporation a bond in such sum as the Surviving
Corporation may direct as indemnity against any claim that may be made against
the Surviving Corporation with respect to the Certificate alleged to have been
lost, stolen or destroyed.
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ARTICLE IV
SURVIVING PROVISIONS
4.1 Articles of Incorporation and Bylaws. The Articles of Incorporation of
the Merging Corporation shall survive and be the Articles of Incorporation of
the Surviving Corporation, except that Article I shall be amended to provide
that the name of the Surviving Corporation shall be "AmeriQuest/Robec, Inc."
until thereafter amended in accordance with the provisions therein and as
provided by the BCL. The bylaws of the Merging Corporation shall survive and be
the bylaws of the Surviving Corporation until thereafter amended in accordance
with the provisions therein and as provided in the BCL.
4.2 Directors and Officers. The directors and officers of the Surviving
Corporation shall be as follows:
<TABLE>
<CAPTION>
Name Position
---- --------
<S> <C>
Harold L. Clark Director, Chairman of the Board
Robert H. Beckett Director, President and Chief Executive
Officer
Robert S. Beckett Director, Vice President and Chief
Operating Officer
Stephen G. Holmes Director, Executive Vice President,
Secretary/Treasurer and Chief Financial
Officer
Alexander C. Kramer, Jr. Vice President--Operations
</TABLE>
Each director and officer listed above shall hold office until the expiration
of his or her term of office or earlier death, resignation or removal in
accordance with the Articles of Incorporation and Bylaws of the Merging
Corporation and applicable law.
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APPENDIX II
AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION is made and
entered into as of the 11th day of August, 1994 by and among AmeriQuest
Technologies, Inc., a Delaware corporation ("AmeriQuest"), Robec, Inc., a
Pennsylvania corporation ("Robec") and Robert H. Beckett, Robert S. Beckett,
Alexander C. Kramer, Jr. and G. Wesley McKinney, who are certain principal
shareholders of Robec (the "Principal Shareholders"), for the acquisition of
Robec by AmeriQuest pursuant to an exchange (the "Exchange") of stock between
AmeriQuest and the Principal Shareholders followed by a merger (the "Merger")
of a wholly-owned subsidiary of AmeriQuest to be formed under the laws of the
Commonwealth of Pennsylvania ("Newco") with and into Robec. The Principal
Shareholders are joining in this Agreement solely for the purposes of agreeing
to be bound by Sections 1.01, 8.06, 8.08 and 8.16 hereof but are intended by
AmeriQuest also to be the beneficiaries of all of the other provisions hereof
which are for their benefit.
WITNESSETH:
WHEREAS, AmeriQuest desires to acquire Robec in a transaction which qualifies
as a tax-free reorganization under Section 368 of the Internal Revenue Code of
1986, as amended;
WHEREAS, management of Robec deems it to be in the best interests of the
shareholders of Robec to receive shares of the Common Stock of AmeriQuest, par
value $.01 per share, ("AmeriQuest Common Stock") upon the merger of Newco with
and into Robec pursuant to the terms hereof and in the plan of merger attached
hereto as Exhibit A (the "Plan of Merger");
WHEREAS, the Principal Shareholders are prepared and willing to assist Robec
in achieving the Merger by exchanging their shares of the Common Stock of
Robec, par value $.01 per share ("Robec Common Stock") for shares of AmeriQuest
Common Stock;
WHEREAS, it is intended that in connection with the Exchange and the Merger
all holders of Robec Common Stock will receive the same consideration per share
for their shares of Robec Common Stock; and
WHEREAS, the parties hereto are parties to an Agreement and Plan of
Reorganization dated as of August 11, 1994 which is amended and restated in its
entirety and superseded hereby.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereby agree as follows:
ARTICLE I.
THE EXCHANGE, MERGER AND RELATED MATTERS
1.01 Exchange of Shares by Principal Shareholders. At the request of Robec
management and in order to assist Robec in effecting the Merger, and subject to
the terms and conditions contained in this Agreement, each of the Principal
Shareholders agrees with AmeriQuest to exchange pro rata a portion of the
number of shares of Robec Common Stock held by such Principal Shareholder (the
"Exchange Shares") for AmeriQuest Common Stock (previously defined as the
"Exchange") such that following the Exchange, AmeriQuest will own at least
50.1% of the outstanding shares of Robec's Common Stock. The closing of the
Exchange is referred to herein as the "Exchange Closing" and shall occur upon
the satisfaction of the applicable conditions and pursuant to the terms as
provided herein at such time and place as the parties shall agree. Upon the
Exchange Closing, each Exchange Share shall be exchanged into .63075 of a
validly issued, fully paid and
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nonassessable share of AmeriQuest Common Stock; provided, however, that in the
event the closing price of AmeriQuest Common Stock on the New York Stock
Exchange on the business day prior to the Effective Date (as that term is
defined in Section 1.07 hereof) as reported in the Wall Street Journal (the
"Closing Date Market Price") is less than $3.00 per share, on the Effective
Date, the Principal Shareholders shall be entitled to receive additional
validly issued, fully paid and nonassessable shares of AmeriQuest Common Stock
equal to the difference between (a) the product of (i) the number of Robec
Common Shares exchanged in the Exchange multiplied by (ii) .63075 multiplied by
(iii) a quotient the numerator of which is $3.00 and the denominator of which
is the Closing Date Market Price and (b) the number of shares of AmeriQuest
Common Stock received by such Principal Shareholder in the Exchange. No
fractional shares of AmeriQuest Common Stock will be issued in connection with
the Exchange or any adjustment pursuant to this Section 1.01, but in lieu
thereof each Principal Shareholder who would otherwise be entitled to receive a
fraction of a share of AmeriQuest Common Stock will receive an amount in cash
equal to the market value of one share of AmeriQuest Common Stock (based on the
closing price of AmeriQuest Common Stock on the New York Stock Exchange on the
previous business day, as reported in the Wall Street Journal) multiplied by
the fraction of a share of AmeriQuest Common Stock to which such holder would
otherwise be entitled without any interest thereon.
1.02 Registration of Exchange Shares. Pursuant to the terms of a Registration
Rights Agreement in the form attached hereto as Exhibit B (the "Registration
Rights Agreement") by and between AmeriQuest and each of the Principal
Shareholders, AmeriQuest shall, at its expense, prepare and file a registration
statement on Form S-3 or if Form S-3 is not available on another appropriate
registration form (the "S-3 Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act") for use by the Principal
Shareholders receiving restricted securities in connection with the Exchange or
pursuant to the Merger, and shall cause the S-3 Registration Statement to be
declared effective not later than the Effective Date (as such term is defined
in Section 1.07 hereof), provided, however, that if the Merger is not
consummated on or prior to December 31, 1994, or if this Agreement is otherwise
terminated, AmeriQuest shall cause the S-3 Registration Statement to become
effective on the earlier of December 31, 1994 or such termination date, as the
case may be. Further, AmeriQuest shall maintain the effectiveness of the S-3
Registration Statement until such time as the shares covered thereby are no
longer deemed to be "restricted securities" as defined in Rule 144(a)(3) or to
be subject to Rule 145, each as promulgated under the Securities Act. Should
any "selling shareholder" identified in the S-3 Registration Statement
thereafter still be deemed to be an "affiliate" of AmeriQuest, AmeriQuest shall
continue to maintain the effectiveness of such S-3 Registration Statement for
the benefit of such "affiliate(s)" until such selling shareholder shall no
longer be deemed an "affiliate."
1.03 The Merger. On the Effective Date, Newco shall be merged with and into
Robec (previously defined as the "Merger") pursuant to this Agreement and the
Plan of Merger, and the separate corporate existence of Newco shall cease, and
Robec shall continue as the surviving corporation under the laws of the
Commonwealth of Pennsylvania under the name "AmeriQuest/Robec, Inc." (the
"Surviving Corporation"). Newco and Robec are referred to herein as the
"Constituent Corporations" to the Merger.
1.04 Conversion of Shares. On the Effective Date, by virtue of the Merger and
without any action on the part of AmeriQuest, Robec, Newco, the Surviving
Corporation, or any holder of any shares of capital stock of either of the
Constituent Corporations, the shares of capital stock of each of the
Constituent Corporations shall be converted as set forth in the Plan of Merger.
1.05 Treatment of Options. (a) On the Effective Date, AmeriQuest will offer
to exchange each of the then outstanding options to purchase Robec Common Stock
(collectively, the "Robec Options"), including, without limitation, all
outstanding options granted under Robec's 1989 Stock Option Plan, as amended
(the "Robec Plan"), as well as any then outstanding Robec options not granted
under the Robec Plan, for an option to purchase that number of shares of
AmeriQuest Common Stock (collectively, the "AmeriQuest Options") determined by
multiplying the number of shares of Robec Common Stock subject to such Robec
Option on the Effective Date by the Applicable Fraction (as such term is
defined in the Plan of Merger), at an exercise price per share of AmeriQuest
Common Stock equal to the exercise price per share of such Robec
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Option divided by the Applicable Fraction. If the foregoing calculation results
in an assumed Robec Option being exercisable for a fraction of a share of
AmeriQuest Common Stock, then the number of shares of AmeriQuest Common Stock
subject to such option will be rounded up to the nearest whole number of
shares. The term, exercisability, vesting schedule, status as an "incentive
stock option" under Section 422 of the Code, if applicable, and all other terms
and conditions of the Robec Options will otherwise be unchanged. Continuous
employment with Robec or any subsidiary of Robec prior to the Merger will be
credited to an optionee of Robec for purposes of determining the vesting of the
AmeriQuest Options.
(b) AmeriQuest will cause the AmeriQuest Common Stock issuable upon exercise
of the AmeriQuest Options to be registered on Form S-8 promulgated by the
Securities and Exchange Commission ("SEC") within 20 days after the Effective
Date and will use its best efforts to maintain the effectiveness of such
registration statement or registration statements for so long as any such
AmeriQuest Options shall remain outstanding. With respect to those individuals
who subsequent to the Merger will be subject to the reporting requirements
under Section 16(a) of the Exchange Act (as such term is defined in Section
1.08(c)), AmeriQuest shall administer the Robec Plan assumed pursuant to this
Section 1.05 in a manner that complies with Rule 16b-3 promulgated by the SEC
under the Exchange Act. AmeriQuest will reserve a sufficient number of shares
of AmeriQuest Common Stock for issuance upon exercise of the AmeriQuest
Options.
(c) Promptly after the Effective Date, AmeriQuest will notify in writing each
holder of a Robec Option of the offer to exchange such Robec Option for an
AmeriQuest Option, the number of shares of AmeriQuest Common Stock that are
then subject to such option, and the exercise price of such option, as
determined pursuant to this Section 1.05.
1.06 Board Representation for Robec. The Board of Directors of AmeriQuest
shall cause Robert H. Beckett to be appointed, effective as of the Exchange
Closing, to the Board of Directors of AmeriQuest, to serve until such time as
his successor, if any, is duly elected and qualified to serve, and shall
nominate him for reelection at each of the next two annual meetings of
shareholders.
1.07 Merger Closing. The closing of the Merger contemplated by this Agreement
(the "Merger Closing") shall take place at the offices of Morgan, Lewis &
Bockius, 2000 One Logan Square, Philadelphia, PA 19103 commencing at 10:00
a.m., local time, on the later of (a) the day of the special meeting of Robec
shareholders provided for in Section 1.08(b) hereof or (b) the day on which the
last of the applicable conditions precedent to the Merger set forth in Articles
VIB and VIIB hereof is fulfilled or waived (subject to applicable law), or (c)
at such other time or place or on such other date as AmeriQuest, Robec and
Newco shall agree (the "Merger Closing Date"). On the Merger Closing Date,
Articles of Merger including the Plan of Merger shall be filed with the
Department of State of the Commonwealth of Pennsylvania in accordance with the
provisions of the Pennsylvania Business Corporation Law of 1988 (the "BCL"),
and the Merger shall become effective upon such filing or at such later time on
the Merger Closing Date as may be specified in the filing with the Department
of State of the Commonwealth of Pennsylvania (the "Effective Date").
1.08 Shareholder Approvals and Registration on Form S-4. (a) As soon as
practicable following the execution of this Agreement, AmeriQuest will convene
a special meeting of its stockholders to secure approval of an increase in the
number of authorized shares of AmeriQuest Common Stock necessary to consummate
the Merger and the Kenfil Merger (as such term is defined below). Pursuant to
an Agreement and Plan of Reorganization dated March 31, 1994, as amended, by
and among AmeriQuest, Kenfil Inc. ("Kenfil") and certain shareholders of Kenfil
(the "Kenfil Agreement"), AmeriQuest has acquired 51% of Kenfil in a stock
exchange and agreed to acquire the remaining shares of common stock of Kenfil
in a merger transaction (the "Kenfil Merger") and to issue simultaneously with
the consummation of the Kenfil Merger approximately 1,700,000 shares of
AmeriQuest Common Stock in exchange for approximately $7,300,000 of Kenfil
subordinated debt and approximately 2,000,000 shares of AmeriQuest Common Stock
to certain vendors of Kenfil in satisfaction of approximately $16,500,000 of
trade debt of Kenfil.
(b) As soon as practicable following the execution of this Agreement, Robec
will convene a special meeting of its shareholders to secure the necessary
shareholder authorizations and approvals of this Agreement and the transactions
contemplated herein.
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(c) The AmeriQuest Common Stock to be issued in the Merger shall be
registered under the Securities Act on a Registration Statement on Form S-4
(the "Form S-4"), and AmeriQuest will pay the filing fee required for any such
filing. In this regard, it will be necessary to file the Form S-4 to serve as a
Prospectus under the Securities Act for the shares so registered and as a
proxy/consent statement ("Prospectus/Proxy-Statement"). As promptly as
practicable after the date of this Agreement, AmeriQuest and Robec shall
prepare and file with the SEC the Form S-4, together with the Prospectus/Proxy
Statement to be included therein and any other documents required by the
Securities Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), in connection with the Merger, and AmeriQuest will pay the
filing fees required for any such filings. Each of AmeriQuest and Robec shall
use its best efforts to respond promptly to any comments of the SEC and to have
the Form S-4 declared effective under the Securities Act as promptly as
practicable after such filing. AmeriQuest shall also take any action required
to be taken under any applicable state securities or "blue-sky" laws and
regulations of the NYSE in connection with the issuance of the AmeriQuest
Common Stock in connection with the Merger and the listing of such shares on
the NYSE. Robec shall promptly furnish to AmeriQuest all information concerning
Robec and the shareholders of Robec as may be reasonably required in connection
with any action contemplated by this Section 1.08. Each of AmeriQuest and Robec
will notify the other promptly of the receipt of any comments from the SEC or
its staff and of any request by the SEC or its staff for amendments or
supplements to the Form S-4 or the Prospectus/Proxy Statement or for additional
information and will supply the other with copies of all correspondence with
the SEC or its staff with respect to the Form S-4 or the Prospectus/Proxy
Statement. Whenever any event occurs which should be set forth in an amendment
or supplement to the Form S-4 or the Prospectus/Proxy Statement, AmeriQuest or
Robec, as the case may be, shall promptly inform the other of such occurrence
and cooperate in filing with the SEC or its staff, and/or mailing to
shareholders of AmeriQuest and Robec, such amendment or supplement. The parties
will enter into customary indemnification and other agreements and seek
customary "comfort letters" in connection with the Form S-4.
1.09 Tax-Free Exchange. The Exchange and the Merger provided for herein are
intended to constitute one integrated transaction that qualifies as a tax-free
reorganization under Section 368 of the Internal Revenue Code of 1986, as
amended (the "Code"), and the AmeriQuest Common Stock is to be received by
holders of Robec Common Stock on a tax-free basis. Except as specifically
provided in Section 1.01 hereof, the number of shares of AmeriQuest Common
Stock to be issued in the Exchange and the Merger will not be subject to
adjustment for fluctuations in the price of the shares for either AmeriQuest or
Robec. Except for cash paid in lieu of fractional shares, no consideration that
could constitute "other property" within the meaning of Section 356(b) of the
Code is being transferred by AmeriQuest for the Robec Common Stock either in
the Exchange or in the Merger. The parties agree not to take a position on any
tax return inconsistent with this Section 1.09. The parties further agree that
each of Robec and AmeriQuest shall pay their own expenses in connection with
the transactions contemplated hereunder. AmeriQuest represents that it has no
plan or intention to reacquire any of its Common Stock issued either in the
Exchange or in the Merger, that it has no plan or intention to sell or
otherwise dispose of any of the assets of Robec except in the ordinary course
of business, and that it will continue the historic business of Robec or use a
significant portion of Robec's historic business assets in a business.
ARTICLE II.
REPRESENTATION AND WARRANTIES OF AMERIQUEST
AmeriQuest hereby represents and warrants to and agrees with Robec and the
Principal Shareholders that:
2.01 Organization and Good Standing. AmeriQuest is, and on the Effective Date
will be, a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, with full power and authority to own
its property and to carry on its business as it is now being conducted, and is
not required to be qualified to do business in any jurisdictions other than
California, Massachusetts and Delaware. Newco will on the Effective Date be a
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania.
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2.02 Authorization and Validity of Agreement. AmeriQuest has full corporate
power and authority to execute and deliver this Agreement and consummate the
transactions contemplated hereby. Except for (a) obtaining the approval of its
Board of Directors as contemplated by Section 6.01 hereof and (b) obtaining the
approval of its shareholders as contemplated by Section 1.08(a) hereof, no
other corporate action on the part of AmeriQuest is necessary to the execution
and delivery by AmeriQuest of this Agreement. Upon receipt of the approvals
referred to in the immediately preceding sentence, this Agreement will have
been duly executed and delivered by AmeriQuest and will be a valid and binding
obligation of AmeriQuest enforceable against AmeriQuest in accordance with its
terms, except that (i) such enforcement may be subject to applicable
bankruptcy, insolvency or other 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 proceeding
therefor may be brought. The performance by Newco on the Effective Date of the
transactions contemplated by the Plan of Merger will have been duly authorized
by AmeriQuest, its sole shareholder, and its Board of Directors and no further
corporate action on the part of Newco is or will be necessary to consummate the
transactions contemplated by this Agreement.
2.03 Capitalization of AmeriQuest. All of AmeriQuest's authorized capital
stock consists of 10,000,000 shares of Common Stock, $.01 par value (previously
referred to as "AmeriQuest Common Stock"), of which 9,862,079 shares are
validly issued and outstanding; and 5,000,000 shares of Preferred Stock, $.01
par value ("AmeriQuest Preferred Stock"), of which 1,099,628 shares of
AmeriQuest Series C Convertible Preferred Stock are issued or outstanding. Upon
approval of the amendment to the AmeriQuest Certificate of Incorporation
contemplated by Section 1.08(a) hereof, AmeriQuest's authorized capital stock
shall consist of 30,000,000 shares of AmeriQuest Common Stock and 5,000,000
shares of AmeriQuest Preferred Stock. All issued and outstanding shares of
AmeriQuest Common Stock are duly authorized, validly issued, fully paid and
nonassessable. There are no options, warrants, contracts or commitments
entitling any person to purchase or otherwise acquire from AmeriQuest any
issued or unissued shares of its capital stock except for (a) 1,500,000 shares
which are the subject of stock options and warrants as described on Appendix I
to this Agreement and (b) an agreement to issue approximately 5,200,000 shares
of AmeriQuest Common Stock upon the closing of the Kenfil Merger. There is no
stock held in the treasury of AmeriQuest.
2.04 Resulting Ownership of AmeriQuest by Robec Shareholders. After the
Effective Date, assuming prior or contemporaneous consummation of the Kenfil
Merger, there will be outstanding approximately 18,961,707 shares of AmeriQuest
Common Stock and no shares of AmeriQuest Preferred Stock, and the current
shareholders of Robec will own approximately 14.76% of the outstanding shares
of AmeriQuest Common Stock. After the Merger, Robec will be a wholly-owned
subsidiary of AmeriQuest.
2.05 SEC Reports. AmeriQuest has delivered or made available to Robec correct
and complete copies of each report, schedule, registration statement and
definitive proxy statement filed by AmeriQuest with the SEC on or after January
1, 1991 (the "AmeriQuest SEC Documents"), which are all of the documents (other
than preliminary material) that AmeriQuest has been required to file with the
SEC on or after January 1, 1991. As of their respective dates or, in the case
of registrations statements, their effective dates, none of the AmeriQuest SEC
Documents (including all exhibits and schedules thereto and documents
incorporated by reference therein) contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and the AmeriQuest
SEC Documents complied when filed in all material respects with the then
applicable requirements of the Securities Act and the Exchange Act and the
rules and regulations thereunder promulgated by the SEC. AmeriQuest has filed
all documents and agreements which were required to be filed as exhibits to the
AmeriQuest SEC Documents.
2.06 Financial Statements. The financial statements of AmeriQuest included in
the AmeriQuest SEC Documents complied as to form in all material respects with
the then applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, were prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as
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may have been indicated in the notes thereto or, in the case of the unaudited
statements, as permitted by Form 10-Q promulgated by the SEC) and fairly
present (subject, in the case of unaudited statements, to normal, year-end
audit adjustments) the consolidated financial position of AmeriQuest and its
consolidated subsidiaries as at the respective dates thereof and the
consolidated results of their operations and cash flows (or changes in
financial position prior to the approval of Statement of Financial Accounting
Standards Number 95) for the respective periods then ended.
2.07 Absence of Undisclosed Liabilities. AmeriQuest has no liabilities or
obligations as of the date hereof, secured or unsecured (whether accrued,
absolute, contingent or otherwise), including without limitation tax
liabilities due or to become due, except current liabilities incurred in the
ordinary course of business or in connection with the transaction contemplated
thereby.
2.08 Subsidiaries. The subsidiaries of AmeriQuest (the "AmeriQuest
Subsidiaries") are identified on Appendix II to this Agreement. Each AmeriQuest
Subsidiary is, and on the Effective Date will be, a corporation duly organized,
validly existing and in good standing under its respective jurisdiction of
incorporation, with full power and authority to own its property and to carry
on its business as it is now being conducted. Unless the context requires
otherwise, as used in Sections 2.07-2.22 and 4.01-4.21 of this Agreement, the
term AmeriQuest includes the AmeriQuest Subsidiaries.
2.09 No Violation of Governing Instruments. Except as disclosed on Appendix
III, no provision of the Certificate of Incorporation or By-laws of AmeriQuest
or of any material agreement or instrument to which AmeriQuest is a party or by
which it is bound is or will be violated by the execution and delivery of this
Agreement or by the performance or satisfaction of any agreement or condition
herein contained to be performed or satisfied by AmeriQuest.
2.10 Permits. AmeriQuest possesses all the licenses, franchises, permits,
registrations and other governmental authorizations necessary for the continued
conduct of its business without material interference or interruption.
2.11 Defaults. Except as disclosed on Appendix IV, AmeriQuest is not in
material default under any lease, purchase or sale contract, note, indenture or
loan agreement, or under any other agreement or arrangements which are
material, alone or in the aggregate, to which it is a party or by which it is
bound or, to the knowledge of the officers and directors of AmeriQuest,
affected. AmeriQuest further agrees to obtain all consents or waivers from (i)
those third parties to whom it is indebted and in default (except for amounts
owed to its vendors) and (ii) all third parties to whom it is indebted whose
indebtedness is scheduled for payment prior to the Effective Date, which may be
necessary to prevent the Merger provided for herein from resulting in any
breach, acceleration, default or collection under any such agreements or
arrangements.
2.12 Agreements. Except as set forth on Appendix V, AmeriQuest is not a party
to and is not bound by:
(a) any employment contracts or agreements or any collective bargaining
or labor agreements;
(b) any pension, retirement, stock option, stock purchase, savings,
profit-sharing, deferred compensation, retainer, consultant, bonus, group
insurance, or any vacation pay or severance pay or other incentive or
welfare, contract, plan or so-called fringe benefit agreement;
(c) any contract for the purchase of any materials, supplies, equipment
or inventory, or for the sale of any inventory, except contracts entered
into in the ordinary course of business (i) which do not (as to each)
involve either an unperformed commitment in excess of $300,000 or the
payment of more than $200,000; or (ii) which may not be terminated without
penalty by AmeriQuest within one year from the date hereof; or
(d) any note or agreement relating to any indebtedness except as shown on
AmeriQuest's March 31, 1994 financial statements included in the AmeriQuest
SEC Documents.
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2.13 Taxes. AmeriQuest has, and on the Effective Date will have, timely filed
all Federal and State and/or local tax returns required to be filed, and have
paid, or made adequate provisions for the payment of, all taxes (whether or not
reflected in its tax returns as filed and whether or not disputed) which may be
or hereafter become due and payable (and/or accruable) in respect of its
operations for all periods prior to the Effective Date, including that portion
of its current fiscal year to and including the Effective Date, to any city,
district, state, the United States, any foreign country or any other taxing
authority, and is not now and on the Effective Date will not be delinquent in
the payment of any tax assessment or government charge. No unpaid tax
deficiencies or additional liabilities of any sort have been proposed by any
governmental representative. No agreements for the extension of time for the
assessment of any amounts of tax have been entered into by or on behalf of
AmeriQuest. AmeriQuest has withheld proper and accurate amounts from its
respective employees for all periods in full and complete compliance with all
tax withholding provisions (including without limitation income tax
withholding, social security and unemployment taxes) of applicable federal,
foreign, state and local laws. The hours worked by and payment made to
employees of AmeriQuest have not been in violation of any applicable federal,
state, foreign or local laws dealing with such matters. All payments due from
AmeriQuest (on account of union employment contracts or otherwise) for employee
profit-sharing, pension benefits and employee health and welfare insurance have
been paid or accrued as a liability on its books. The reserves for taxes
reflected on the financial statements included in the AmeriQuest SEC Documents
are adequate to cover all taxes with respect to the income of AmeriQuest for
the period then ended.
AmeriQuest, on or prior to the Effective Date, agrees to pay all required
federal and state taxes in the time and manner required under applicable
federal and state tax laws with respect to AmeriQuest's operations through the
fiscal year ended June 30, 1994. AmeriQuest is not now and on the Effective
Date will not be delinquent in the payment of any tax assessment or government
charge in respect of AmeriQuest's operations through the Effective Date.
2.14 Accuracy of Corporate Records. The copies of the Certificate of
Incorporation, By-laws, minute books and stock transfer records of AmeriQuest
heretofore or hereafter delivered to Robec or made available to Robec for
examination are complete and correct. The minute books of AmeriQuest contain
complete and accurate records of all meetings and other corporate actions of
its shareholders, directors and committees of its Board of Directors.
2.15 Absence of Litigation. Except as set forth on Appendix VI, AmeriQuest is
not now engaged in or threatened with any litigation or other proceeding in
connection with its affairs involving amounts in excess of $50,000, and has not
been subject to any such litigation or proceeding during the past two (2)
years, and it is not now subject to any decree, order or other governmental
restriction which has a material adverse effect on its business or assets or
which would prevent or hamper the consummation of the Exchange or the Merger
contemplated by this Agreement.
2.16 Insurance. AmeriQuest's insurance coverage is adequate based on its
experience and the experience of similar businesses. AmeriQuest is not now and
on the Effective Date will not be in default in any material respect under any
such policy and such policies will be continued in force and effect up to and
including the Effective Date.
2.17 Employee Benefit Plans and Salaries. There has not been since June 30,
1993 any bonus, profit-sharing, pension, retirement or other similar
arrangement or plan instituted, amended or agreed to by AmeriQuest, or any
increase in the compensation payable or to become payable by it to any of its
officers, employees or agents whose total compensation for services rendered
after any such increase is at an annual rate of more than $100,000 (except for
those persons identified on Appendix VII in the amounts indicated thereon), nor
has any bonus, percentage of compensation or other like benefit accrued to or
for the credit of any of the officers, employees or agents of AmeriQuest
(except for those persons identified on Appendix VII in the amounts indicated
thereon).
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2.18 Salaries and Pensions. AmeriQuest has no unfunded obligation under any
pension or profit-sharing arrangements for the employees of AmeriQuest,
salaried, non-salaried, union or non-union, including any formal or informal
plans, and all funding arrangements with respect thereto have been made in
accordance with the terms of such plans or arrangements.
2.19 Labor Relations, Financial Condition and Assets. Since June 30, 1993,
there has not been any significant labor trouble or any adverse change in the
financial condition, assets, liabilities, properties, business or results of
operations of AmeriQuest, including but not limited to any cancellation of or
threatened cancellation of any contract, any damage or destruction of property
by fire or casualty, whether or not covered by insurance, or the taking of any
property by condemnation or eminent domain, except as disclosed on Appendix
VIII.
2.20 Regulatory Consents. Except for (a) filings required to be made with the
Federal Trade Commission (the "FTC") and the Antitrust Division of the United
States Department of Justice (the "Antitrust Division") under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "Antitrust
Improvements Act"), (b) the filing of a Prospectus/Proxy Statement with the
Securities and Exchange Commission as a Registration Statement on Form S-4, (c)
any consents or filings made necessary by the financing arrangements of the
Constituent Corporations and AmeriQuest and (d) the filing of the Plan of
Merger with the Department of State of the Commonwealth of Pennsylvania, no
material consent, authorization, order or approval of or filing of a
registration with any governmental commission, board or other regulatory body
is required by AmeriQuest for or in connection with the consummation of the
Merger.
2.21 AmeriQuest Shares. The shares of AmeriQuest Common Stock to be issued in
the transactions contemplated by this Agreement will be, upon issuance, duly
authorized, validly issued, fully paid and nonassessable.
2.22 Full Disclosure. No representation, warranty or other statement relating
to AmeriQuest or Newco contained in this Agreement or information contained in
any certificate, exhibit, appendix or document delivered by AmeriQuest or Newco
pursuant to this Agreement contains any untrue statement of material fact or
omits to state a material fact necessary in order to make the statements made
herein or therein not misleading in light of the circumstances under which they
were made.
2.23 Survival. The representations and warranties of AmeriQuest contained
herein are true on the date hereof and shall continue to be true as of the
Effective Date, except for changes permitted or contemplated by the terms of
this Agreement, and shall survive the Effective Date.
ARTICLE III.
REPRESENTATION AND WARRANTIES OF ROBEC
Robec hereby represents and warrants to and agrees with AmeriQuest that:
3.01 Organization and Good Standing. Robec is, and on the Effective Date will
be, a corporation duly organized, validly existing and in good standing under
the laws of the Commonwealth of Pennsylvania, with full power and authority to
own its property and to carry on its business as it is now being conducted, and
is not required to be qualified to do business in any jurisdictions other than
those states in which it is now so qualified.
3.02 Authorization and Validity of Agreement. Robec has full corporate power
and authority to execute and deliver this Agreement and consummate the
transactions contemplated hereby. Except for (a) obtaining the approval of its
Board of Directors as contemplated by Section 6.01 hereof and (b) obtaining the
approval of its shareholders as contemplated by Section 1.08 hereof, no other
corporate action on the part of Robec is necessary to the execution and
delivery by Robec of this Agreement. Upon receipt of the approvals referred
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to in the immediately preceding sentence, this Agreement will have been duly
executed and delivered by Robec and will be a valid and binding obligation of
Robec enforceable against Robec in accordance with its terms, except that (i)
such enforcement may be subject to applicable bankruptcy, insolvency or other
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 proceeding therefor may be brought.
3.03 Capitalization of Robec. All of Robec's authorized capital stock
consists of 10,000,000 shares of Common Stock, par value $.01 per share
(previously referred to as "Robec Common Stock"), of which 4,439,180 shares are
validly issued and outstanding; and 5,000,000 shares of Preferred Stock, par
value $.01 per share, of which no shares are outstanding. All of the issued and
outstanding shares of Robec Common Stock are duly authorized, validly issued,
fully paid and nonassessable. There are no options, warrants, contracts or
commitments entitling any person to purchase or otherwise acquire from Robec
any issued or unissued shares of its capital stock except shares subject to
stock options as outlined on Appendix IX to this Agreement; and 160,000 shares
of Robec Common Stock are held in the treasury of Robec.
3.04 SEC Reports. Robec has delivered or made available to AmeriQuest correct
and complete copies of each report, schedule, registration statement and
definitive proxy statement filed by Robec with the SEC on or after January 1,
1993 (the "Robec SEC Documents"), which are all the documents (other than
preliminary material) that Robec was required to file with the SEC on or after
January 1, 1993. As of their respective dates or, in the case of registrations
statements, their effective dates, none of the Robec SEC Documents (including
all exhibits and schedules thereto and documents incorporated by reference
therein) contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and the Robec SEC Documents complied when filed in all material
respects with the then applicable requirements of the Securities Act and the
Exchange Act and the rules and regulations thereunder promulgated by the SEC.
Robec has filed all documents and agreements which were required to be filed as
exhibits to the Robec SEC Documents.
3.05 Financial Statements. The financial statements of Robec included in the
Robec SEC Documents complied as to form in all material respects with the then
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, were prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may have been indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-Q promulgated by the
SEC) and fairly present (subject, in the case of unaudited statements, to
normal, year-end audit adjustments) the consolidated financial position of
Robec and its consolidated subsidiaries as at the respective dates thereof and
the consolidated results of their operations and cash flows (or changes in
financial position prior to the approval of Statement of Financial Accounting
Standards Number 95) for the respective periods then ended.
3.06 Absence of Undisclosed Liabilities. Other than as set forth on the
balance sheet dated December 31, 1993, Robec has no material liabilities or
obligations as of the date hereof, secured or unsecured (whether accrued,
absolute, contingent or otherwise), including without limitation tax
liabilities due or to become due, except current liabilities incurred in the
ordinary course of business since such date or as set forth on any Appendix to
this Agreement.
3.07 Subsidiaries. The subsidiaries of Robec (the "Robec Subsidiaries") are
identified on Appendix X to this Agreement. Each Robec Subsidiary is, and on
the Effective Date will be, a corporation duly organized, validly existing and
in good standing under its respective jurisdiction of incorporation, with full
power and authority to own its property and to carry on its business as it is
now being conducted. Unless the context requires otherwise, as used in Sections
3.06-3.20 and 5.01-5.21 of this Agreement, the term Robec includes the Robec
Subsidiaries.
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3.08 No Violation of Governing Instruments. Except as disclosed on Appendix
XI, no provision of the Articles of Incorporation or By-laws of Robec or of any
material agreement or instrument to which Robec is a party or by which it is
bound is or will be violated by the execution and delivery of this Agreement or
by the performance or satisfaction of any agreement or condition herein
contained to be performed or satisfied by Robec.
3.09 Permits. Robec possesses all the licenses, franchises, permits,
registrations and other governmental authorizations necessary for the continued
conduct of its business without material interference or interruption.
3.10 Defaults. Except as disclosed on Appendix XII, Robec is not in material
default under any lease, purchase or sale contract, note, indenture or loan
agreement, or under any other agreement or arrangements which are material,
alone or in the aggregate, to which it is a party or by which it is bound.
Robec further agrees to use reasonable efforts to obtain all consents or
waivers from (i) those third parties to whom it is indebted and in default
(except for amounts owed to its vendors) and (ii) all third parties to whom it
is indebted (except for amounts owed to vendors) whose indebtedness is
scheduled for payment prior to the Exchange Closing, which may be necessary to
prevent the Merger provided for herein from resulting in any breach,
acceleration, default or collection under any such agreements or arrangements.
3.11 Agreements. Except as set forth on Appendix XIII, Robec is not a party
to and is not bound by:
(a) any employment contracts or agreements or any collective bargaining
or labor agreements;
(b) any pension, retirement, stock option, stock purchase, savings,
profit-sharing, deferred compensation, retainer, consultant, bonus, group
insurance, or any vacation pay or severance pay or other incentive or
welfare, contract, plan or so-called fringe benefit agreement;
(c) any contract for the purchase of any materials, supplies, equipment
or inventory, or for the sale of any inventory, except contracts entered
into in the ordinary course of business (i) which do not (as to each)
involve either an unperformed commitment in excess of $300,000 or the
payment of more than $200,000; or (ii) which may not be terminated without
penalty by Robec within one year from the date hereof; or
(d) any note or agreement relating to any indebtedness except as shown on
Robec's March 31, 1994 financial statements included in the Robec SEC
Documents.
3.12 Taxes. Robec has, and on the date of the Exchange Closing will have,
timely filed all Federal and State and/or local tax returns required to be
filed, and have paid, or made adequate provisions for the payment of, all taxes
(whether or not reflected in its tax returns as filed and whether or not
disputed) which may be or hereafter become due and payable (and/or accruable)
in respect of its operations for all periods prior to the Exchange Closing,
including that portion of its current fiscal year to and including the Exchange
Closing, to any city, district, state, the United States, any foreign country
or any other taxing authority, and is not now and on the date of the Exchange
Closing will not be delinquent in the payment of any tax assessment or
government charge. No unpaid tax deficiencies or additional liabilities of any
sort have been proposed by any governmental representative. No agreements for
the extension of time for the assessment of any amounts of tax have been
entered into by or on behalf of Robec. Robec has withheld proper and accurate
amounts from its respective employees for all periods in full and complete
compliance with all tax withholding provisions (including without limitation
income tax withholding, social security and unemployment taxes) of applicable
federal, foreign, state and local laws. The hours worked by and payment made to
employees of Robec have not been in violation of any applicable federal, state,
foreign or local laws dealing with such matters. All payments due from Robec
(on account of union employment contract or otherwise) for employee profit-
sharing, pension benefits and employee health and welfare insurance have been
paid or accrued as a liability on its books. The reserves for taxes reflected
on the December 31, 1993 audited financial statements of Robec are adequate to
cover all taxes with respect to the income of Robec for the period then ended.
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Robec, on or prior to the Exchange Closing, agrees to pay all required
federal and state taxes in the time and manner required under applicable
federal and state tax laws with respect to Robec's operations through the
fiscal year ended December 31, 1993. Robec is not now and on the date of the
Exchange Closing will not be delinquent in the payment of any tax assessment or
government charge in respect of Robec's operations through the date of the
Exchange Closing.
3.13 Accuracy of Corporate Records. The copies of the Articles of
Incorporation, By-laws, minute books and stock transfer records of Robec
heretofore or hereafter delivered or made available to AmeriQuest for
examination are complete and correct. The minute books of Robec contain
complete and accurate records of all meetings and other corporate actions of
its shareholders, directors and the committees of its Board of Directors.
3.14 Absence of Litigation. Except as set forth on Appendix XIV, Robec is not
now engaged in or threatened in writing with any litigation or other proceeding
in connection with its affairs involving amounts in excess of $50,000, and has
not been subject to any such litigation or proceeding during the past two (2)
years and it is not now subject to any decree, order or other governmental
restriction which has a material adverse effect on its business or assets or
which would prevent or hamper the consummation of the Exchange or the Merger
contemplated by this Agreement.
3.15 Insurance. Robec's insurance coverage is adequate based on its
experience and the experience of similar businesses. Robec is not now and on
the Effective Date will not be in default in any material respect under any
such policy and such policies will be continued in force and effect up to and
including the Effective Date.
3.16 Employee Benefit Plans and Salaries. There has not been since December
31, 1993 any bonus, profit-sharing, pension, retirement or other similar
arrangement or plan instituted, amended or agreed to by Robec, or any increase
in the compensation payable or to become payable by it to any of its officers,
employees or agents whose total compensation for services rendered after any
such increase is at an annual rate of more than $100,000 (except as set forth
on Appendix XV), nor has any bonus, percentage of compensation or other like
benefit accrued to or for the credit of any of the officers, employees or
agents of Robec (except as set forth on Appendix XV).
3.17 Salaries and Pensions. Robec has no unfunded obligation under any
pension or profit-sharing arrangements for the employees of Robec, salaried,
non-salaried, union or non-union, including any formal or informal plans, and
the funding arrangements with respect thereto have been made in accordance with
the terms of such plans or arrangements.
3.18 Labor Relations, Financial Condition and Assets. Since December 31,
1993, except as set forth in the Robec SEC Documents, there has not been any
significant labor trouble or any adverse change in the financial condition,
assets, liabilities, properties, business or results of operations of Robec,
any damage or destruction of property by fire or casualty, whether or not
covered by insurance, or the taking of any property by condemnation or eminent
domain, except as disclosed on Appendix XVI or on other Appendices attached
hereto.
3.19 Regulatory Consents. Except for (a) filings required to be made with the
FTC and the Antitrust Division under the Antitrust Improvements Act, (b) the
filing of a Prospectus/Proxy Statement with the Securities and Exchange
Commission as a Registration Statement on Form S-4, (c) any consents or filings
made necessary by the financing arrangements of the Constituent Corporations
and AmeriQuest and (d) the filing of the Plan of Merger with the Department of
State of the Commonwealth of Pennsylvania and appropriate documents, if any,
with the relevant authorities in states in which Robec is qualified to do
business, no material consent, authorization, order or approval of or filing of
a registration with any governmental commission, board or other regulatory body
is required by Robec for or in connection with the consummation of the Exchange
and Merger.
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3.20 Full Disclosure. No representation, warranty or other statement relating
to Robec contained in this Agreement or information contained in any
certificate, exhibit, appendix or document delivered by Robec pursuant to this
Agreement contains any untrue statement of material fact or omits to state a
material fact necessary in order to make the statements made herein or therein
not misleading in light of the circumstances under which they were made.
3.21 Survival. The representations and warranties of Robec contained herein
are true on the date hereof and shall continue to be true as of the Exchange
Closing; except for charges permitted or contemplated by the terms of this
Agreement, but shall not survive the Exchange Closing and shall thereafter be
null and void and of no further force or effect.
ARTICLE IV.
CONDUCT OF AMERIQUEST PRIOR TO THE EFFECTIVE DATE
AmeriQuest covenants, warrants and agrees that, from the date hereof to the
Effective Date, except for transactions provided for or herein permitted or
disclosed in an exhibit or appendix hereto or expressly approved of in writing
by Robec, AmeriQuest shall:
4.01 Compensation. Except as disclosed on Appendix VII not increase the rate
of compensation payable or to become payable by it or make, accrue or become
liable for any bonus, profit-sharing, termination or incentive payment (in
excess of the applicable amounts or percentages prevailing at June 30, 1994 to
(a) any of its officers, directors or employees whose compensation is in excess
of $50,000 per annum, or (b) any other of its employees except in the ordinary
and usual course of business.
4.02 Dividends. Not declare or pay any dividend or distribution (in cash or
other property) in respect of any shares of its capital stock.
4.03 Capital Changes. Not purchase, otherwise acquire, sell or issue any
shares of its capital stock, for cash or other consideration, except to honor
outstanding stock option and warrant obligations; nor declare or effect any
stock dividend, stock split or other action that would result in a change in
its authorized and outstanding capitalization.
4.04 Encumbrance of Assets. Not further mortgage, pledge, or subject to any
lien, charge or encumbrance of any kind, any of its assets, tangible or
intangible, exclusive of liens arising as a matter of law in the ordinary
course of business as to which there is no known default.
4.05 Incur Liabilities. Not take any action which would cause it to incur any
material obligation or liability (absolute or contingent) except liabilities
and obligations incurred in the ordinary course of business.
4.06 Debt Retirement. Not discharge or satisfy any lien or encumbrance, or
pay any obligation or liability (absolute or contingent) other than (a) current
liabilities disclosed in the balance sheet dated March 31, 1994 which was
included in the AmeriQuest SEC Documents, and (b) liabilities incurred since
March 31, 1994 in the ordinary course of business.
4.07 Disposition of Assets. Not sell or transfer any of its tangible assets
or cancel any debts or claims, except in each case in the ordinary and usual
course of business, except for the pending sale of CMS Singapore and Any Bus.
4.08 Disposition of Intangibles. Not sell, assign, transfer or otherwise
dispose of patents, trademarks, trade names, copyrights, licenses, customer
lists, trade secrets, product registrations or other intangible assets.
4.09 Waivers. Not knowingly waive any rights of substantial value.
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4.10 Executory Agreements. Not, except in the ordinary course of business,
modify, amend, alter or terminate (by written or oral agreement, or any manner
of action or inaction) any of its executory agreements of a material nature or
which are material in amount.
4.11 Material Transactions. Except as otherwise contemplated herein, not
enter into any transaction material in nature or amount other than in the
ordinary and usual course of business.
4.12 Long-Term Commitments. Not undertake any major long-term (long-term
being defined as extending over a twelve (12) month period) purchase
commitments or sale commitments, even though within the ordinary course of its
business.
4.13 Insurance. Keep its property and assets insured in amounts and with
coverage at least as great as the amounts and coverage in effect on the date of
this Agreement.
4.14 Preservation of Business. Use its best efforts to preserve the
possession and control of all of its assets, to keep in faithful service its
present officers and key employees, to preserve the goodwill of its suppliers,
customers and others having business relations with it, and to do nothing to
impair its ability to keep and preserve its business existing on the date
hereof.
4.15 Amend Certificate. Not amend its Certificate of Incorporation or By-
laws, or change or agree to change in any manner the rights of its outstanding
capital stock or the character of its principal business, except as
contemplated by Section 1.08(a) hereof.
4.16 Preservation of Assets. Maintain its properties and assets in good
repair, order and condition, reasonable wear and use and damage by fire or
other casualty excepted.
4.17 Maintenance of Records. Maintain its books, accounts and records in the
usual, regular and ordinary manner on a basis consistent with that heretofore
employed.
4.18 Credit Practices. Not extend credit in the sale of its products other
than in accordance with credit practices in effect on the date hereof.
4.19 Retention of Real Estate. Not sell, mortgage, lease, buy or otherwise
acquire any real estate or any interest therein.
4.20 Investigation. Allow, at all reasonable times, following reasonable
advance notice, during normal business hours, Robec's employees, attorneys,
accountants and other authorized representatives, free and full access to its
plants, properties, books, records, documents and correspondence, and all of
the work papers and other documents relating thereto in the possession of its
auditors or counsel, in order that Robec may have full opportunity to make such
investigation as it may desire of AmeriQuest's properties and business.
4.21 Compliance with Law. Comply with all laws applicable to it or to the
conduct of its business and will conduct its business in such manner that on
the Effective Date the representations and warranties contained in this
Agreement shall be true as though such representations and warranties were made
on and as of such date.
4.22 Repayment of Robec Debt. Prior to or contemporaneous with the Exchange
Closing, arrange for a third party to loan on the date of the Exchange Closing
to Robec cash sufficient to repay all of its outstanding indebtedness to
CoreStates Bank, N.A. and Fidelity Bank, N.A. pursuant to the Second Amended
and Restated Credit and Security Agreement dated March 29, 1993, as amended
(the "Credit Agreement"), estimated to be approximately $10,500,000 on the date
hereof.
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4.23 Retention and Voting of Shares.
(a) Not to sell, transfer, pledge, assign or otherwise dispose of, or
enter into any contract, option or other arrangement with respect to the
sale, transfer, pledge, assignment or other disposition of, any shares of
Robec Common Stock acquired in the Exchange to any person other than to a
wholly-owned subsidiary of AmeriQuest which shall agree in writing prior to
the transfer to be bound by all of the provisions of this Agreement,
including without limitation this Section 4.23.
(b) Vote all shares of Robec Common Stock owned by it on the record date
for any annual or special meeting of the shareholders of Robec, however
called, and in any action by written consent of the shareholders of Robec,
at such meeting (x) in favor of the Plan of Merger, (y) against any action
or agreement which would result in a breach of any representation, warranty
or covenant of Robec in this Agreement or which would otherwise impede,
interfere with or attempt to discourage the Merger and (z) against the
nomination or election of any director other than the current directors of
Robec or any successor nominated by them.
ARTICLE V.
CONDUCT OF ROBEC PRIOR TO THE EXCHANGE CLOSING
Robec covenants, warrants and agrees that, from the date hereof to the
Exchange Closing, except for transactions provided for or herein permitted or
disclosed in an exhibit or appendix hereto or expressly approved of in writing
by AmeriQuest, Robec shall:
5.1 Compensation. Not increase the rate of compensation payable or to become
payable by it or make, accrue or become liable for any bonus, profit-sharing,
termination or incentive payment (in excess of the applicable amounts or
percentages prevailing at December 31, 1993 or set forth in the Employment
Agreements attached as Exhibits hereto for the individuals indicated therein)
to (a) any of its officers, directors or employees whose compensation is in
excess of $50,000 per annum, or (b) any other of its employees except in the
ordinary and usual course of business.
5.2 Dividends. Not declare or pay any dividend or distribution (in cash or
other property) in respect of any shares of its capital stock.
5.3 Capital Changes. Not purchase, otherwise acquire, sell or issue any
shares of its capital stock, for cash or other consideration, except to honor
outstanding stock option and warrant obligations; nor declare or effect any
stock dividend, stock split or other action that would result in a change in
its authorized and outstanding capitalization.
5.4 Encumbrance of Assets. Not further mortgage, pledge or subject to any
lien, charge or encumbrance of any kind, any of its assets, tangible or
intangible, exclusive of liens arising as a matter of law in the ordinary
course of business as to which there is no known default.
5.5 Incur Liabilities. Not take any action which would cause it to incur any
obligation or liability (absolute or contingent) except liabilities and
obligations incurred in the ordinary course of business.
5.6 Debt Retirement. Not discharge or satisfy any lien or encumbrance, or pay
any obligation or liability (absolute or contingent) other than (a) current
liabilities disclosed in the balance sheet dated March 31, 1994 which was
included in the Robec SEC Documents, and (b) liabilities incurred since March
31, 1994 in the ordinary course of business, except as contemplated by Section
4.22 hereof.
5.7 Disposition of Assets. Not sell or transfer any of its tangible assets or
cancel any debts or claims, except in each case in the ordinary and usual
course of business.
5.8 Disposition of Intangibles. Not sell, assign, transfer or otherwise
dispose of patents, trademarks, tradenames, copyrights, licenses, customer
lists, trade secrets, product registrations or other intangible assets.
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5.9 Waivers. Not knowingly waive any rights of substantial value.
5.10 Executory Agreements. Not, except in the ordinary course of business,
modify, amend, alter or terminate (by written or oral agreement, or any manner
of action or inaction) any of its executory agreements of a material nature or
which are material in amount.
5.11 Material Transactions. Except as otherwise contemplated herein, not
enter into any transaction material in nature or amount other than in the
ordinary and usual course of business.
5.12 Long-Term Commitments. Not undertake any major long-term (long-term
being defined as extending over a twelve (12) month period) purchase
commitments or sale commitments, even though within the ordinary course of its
business, without the prior written consent of AmeriQuest, which consent shall
not be unreasonably withheld or delayed.
5.13 Insurance. Keep its property and assets insured in amounts and with
coverage at least as great as the amounts and coverage in effect on the date of
this Agreement.
5.14 Preservation of Business. Use its best efforts to preserve the
possession and control of all of its assets, to keep in faithful service its
present officers and key employees, to preserve the goodwill of its suppliers,
customers and others having business relations with it, and to do nothing to
impair its ability to keep and preserve its business existing on the date
hereof.
5.15 Amend Articles. Not amend its Articles of Incorporation or By-laws, or
change or agree to change in any manner the rights of its outstanding capital
stock or the character of its principal business.
5.16 Preservation of Assets. Maintain its properties and assets in good
repair, order and condition, reasonable wear and use and damage by fire or
other casualty excepted.
5.17 Maintenance of Records. Maintain its books, accounts and records in the
usual, regular and ordinary manner on a basis consistent with that heretofore
employed.
5.18 Credit Practices. Not extend credit in the sale of its products other
than in accordance with credit practices in effect on the date hereof.
5.19 Retention of Real Estate. Not sell, mortgage, lease, buy or otherwise
acquire any real estate or any interest therein.
5.20 Investigation. Allow, at all reasonable times, following reasonable
advance notice, during normal business hours, AmeriQuest's employees,
attorneys, accountants and other authorized representatives, free and full
access to its plants, properties, books, records, documents and correspondence,
and all of the work papers and other documents relating thereto in the
possession of its auditors or counsel, in order that AmeriQuest may have full
opportunity to make such investigation as it may desire of Robec's properties
and business.
5.21 Compliance with Law. Comply with all laws applicable to it or to the
conduct of its respective business and will conduct its business in such manner
that on the date of the Exchange Closing the representations and warranties
contained in this Agreement shall be true as though such representations and
warranties were made on and as of such date.
5.22 Affiliates. At least ten business days prior to the date of the special
meeting of shareholders to be convened by Robec, Robec shall deliver to
AmeriQuest a list of names and addresses of those persons who were, in Robec's
reasonable judgment, at the record date for the Robec special meeting of
shareholders, "Affiliates" of Robec (each such person, together with the
persons identified below, an "Affiliate") within the meaning of Rule 145 of the
rules and regulations promulgated by the SEC under the Securities Act ("Rule
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145"). If requested by AmeriQuest, Robec shall use its best efforts to deliver
or cause to be delivered to AmeriQuest, prior to the Effective Date, from each
of the Affiliates of Robec identified in the foregoing list, agreements to vote
in favor of the Plan of Merger (collectively, the "Robec Affiliate Agreements")
substantially in a form satisfactory to both AmeriQuest and Robec. AmeriQuest
shall be entitled to place legends on the certificates evidencing any
AmeriQuest Common Stock to be received by such Affiliates pursuant to the terms
of this Agreement and the Plan of Merger, and to issue appropriate stop-
transfer instructions to the transfer agent for AmeriQuest Common Stock,
consistent with the terms of the Robec Affiliate Agreements, whether or not
such Robec Affiliate Agreements are actually delivered to AmeriQuest.
ARTICLE VI.
AMERIQUEST'S CONDITIONS TO CLOSING
A. The obligations of AmeriQuest to effect the Exchange contemplated
hereunder shall be subject to the following express conditions precedent:
6.01 Board Approvals. The Boards of Directors of Robec and AmeriQuest will
have approved this Agreement, following due diligence inquiries acceptable to
the respective Boards of Directors.
6.02 No Litigation. No preliminary or permanent injunction or other order
shall have been issued by any federal or state court of competent jurisdiction
in the United States or by any United States federal or state governmental or
regulatory body which prevents consummation of the transactions contemplated by
this Agreement and which is in effect on the date of the Exchange Closing; no
action or proceeding by any governmental or regulatory authority shall have
been commenced or threatened (and be pending or threatened on the date of the
Exchange Closing) against Newco, AmeriQuest, Robec or any of their respective
affiliates, associates, officers, or directors seeking to prevent or
challenging the transactions contemplated by this Agreement; and no action or
proceeding before any federal or state court of competent jurisdiction in the
United States shall have been commenced (and be pending) against Newco,
AmeriQuest, Robec or any of their respective officers or directors seeking to
prevent or challenging the transactions contemplated hereby and seeking
material damages in connection therewith.
6.03 Employment Contracts. Neither Robec nor any of its subsidiaries shall
have executed any employment agreements or labor agreements to which it is not
now a party, and shall not have extended any new severance right or increased
any existing severance right to any employee except as consented to by
AmeriQuest.
6.04 Continued Truth of Warranties. The representations and warranties of
Robec herein contained shall be true on and as of the Exchange Closing in all
material respects with the same force and effect as though made on such date,
except for any variations permitted by this Agreement.
6.05 Performance of Covenants. Robec shall have performed in all material
respects all covenants and obligations and complied with all conditions
required or contemplated by this Agreement to be performed or complied with by
it prior to the Exchange Closing.
6.06 Damages by Casualty. The business, properties, financial condition,
earnings, prospects and operations of Robec shall not have been adversely
affected on or prior to the Exchange Closing in any material way as a result of
any accident or other casualty (whether or not covered by insurance) or any
labor disturbance or Act of God or of the public enemy.
6.07 No Adverse Change. There shall have been no material adverse change in
the business, properties, operations, financial condition or earnings of Robec
since the date hereof, which contemplates, among other things, that, except as
indicated on the Appendices attached hereto, there will be no significant loss
of customers or vendors, but a loss of up to an average of $500,000 per month
on a cumulative basis since July 1, 1994 shall not be considered a material
adverse change with respect to Robec.
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6.08 Certificate. Robec shall have delivered to AmeriQuest such certificates
and other documents evidencing satisfaction of the foregoing conditions
specified in this Article VI as AmeriQuest shall have reasonably requested.
Unless Robec shall have delivered to AmeriQuest a certificate executed by it
dated prior to the Exchange Closing, certifying that one or more of the
conditions set forth in Section 6.01 through 6.12 of this Agreement have not
been fulfilled, the consummation of the Exchange hereunder shall constitute a
representation and warranty by Robec that each of such conditions has been
fulfilled or satisfied.
6.09 Regulatory Consents. All consents, authorizations, orders and approvals
of, and filings and registrations with, any United States federal or state
governmental commission, board or other regulatory body which are required for
the consummation of the Exchange or the Merger shall have been obtained or
made, and the applicable waiting periods, if any, under the Antitrust
Improvements Act and the rules thereunder shall have expired or been
terminated. No preliminary or permanent injunction or other order by any
federal or state court of competent jurisdiction in the United States or by any
United States federal or state governmental or regulatory body shall have been
issued and remain in effect which prevents the consummation of the Exchange.
6.10 Approval of Legal Matters by Counsel. All legal matters in connection
with this Agreement and the Exchange Closing hereunder shall be approved by
Raymond L. Ridge, Esq., legal counsel for AmeriQuest, in the exercise of
reasonable judgment; and there shall have been furnished to such counsel by
Robec such corporate and other records and information as he may reasonably
have requested for such purpose.
6.11 Opinion of Counsel. Robec shall have furnished AmeriQuest with a
favorable opinion, dated the date of the Exchange Closing, of Morgan, Lewis &
Bockius addressed to Robec and in form and substance satisfactory to AmeriQuest
and its counsel to the effect that:
(a) Robec is a corporation duly incorporated, validly existing, and in
good standing under the laws of the Commonwealth of Pennsylvania; and
(b) Except for obtaining such shareholder approval as is required under
Pennsylvania law, all corporate proceedings required to be taken by or on
the part of Robec to authorize it to carry out this Agreement have been
performed, and this Agreement has been duly executed and delivered by
Robec, is valid and binding upon Robec and is enforceable in accordance
with its terms, except as may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and except to the extent
the enforceability is subject to general principles of equity.
6.12 AmeriQuest Shareholder Approval. The required approval from the
shareholders of AmeriQuest which is referred to in Section 1.08(a) hereof shall
have been obtained.
B. The obligations of AmeriQuest to consummate the Merger contemplated
hereunder shall be subject to the following express conditions precedent:
6.13 Completion of Exchange and Fulfillment of Conditions to Exchange. The
Exchange shall have occurred.
6.14 Robec Shareholder Approvals. The required approval from the shareholders
of Robec which is referred to in Section 1.08(b) hereof shall have been
obtained.
6.15 No Litigation. No preliminary or permanent injunction or other order
shall have been issued by any federal or state court of competent jurisdiction
in the United States or by any United States federal or state governmental or
regulatory body which prevents consummation of the Merger and which is in
effect on the Merger Closing Date.
ANY OF THE CONDITIONS CONTAINED IN THIS ARTICLE VI MAY BE WAIVED, IN WHOLE OR
IN PART, BY AMERIQUEST.
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ARTICLE VII.
PRINCIPAL SHAREHOLDERS' AND ROBEC'S CONDITIONS TO CLOSING
A. The obligation of the Principal Shareholders to effect the Exchange
contemplated hereunder shall be subject to the following express conditions
precedent:
7.01 Board Approvals. The Boards of Directors of Robec and AmeriQuest will
have approved this Agreement, following due diligence inquiries acceptable to
the respective Boards of Directors.
7.02 No Litigation. No preliminary or permanent injunction or other order
shall have been issued by any federal or state court of competent jurisdiction
in the United States or by any United States federal or state governmental or
regulatory body which prevents consummation of the transactions contemplated by
this Agreement and which is in effect on the date of the Exchange Closing; no
action or proceeding by any governmental or regulatory authority shall have
been commenced or threatened (and be pending or threatened on the date of the
Exchange Closing) against Newco, AmeriQuest, Robec or any of their respective
affiliates, associates, officers, or directors seeking to prevent or
challenging the transactions contemplated by this Agreement; and no action or
proceeding before any federal or state court of competent jurisdiction in the
United States shall have been commenced (and be pending) against Newco,
AmeriQuest, Robec or any of their respective officers or directors seeking to
prevent or challenging the transactions contemplated hereby and seeking
material damages in connection therewith.
7.03 Continued Truth of Warranties. The representations and warranties of
AmeriQuest herein contained shall be true on and as of the Exchange Closing
with the same force and effect as though made as of such date, except for any
variations permitted by this Agreement.
7.04 Performance of Covenants. AmeriQuest shall have performed all material
covenants and obligations and complied with all material conditions required by
this Agreement to be performed or complied with by it prior to the Exchange
Closing.
7.05 Certificate. AmeriQuest shall have delivered to Robec such certificates
and other documents evidencing satisfaction of the foregoing conditions
specified in this Article VII as Robec shall have reasonably requested. Unless
an executive officer of AmeriQuest shall have delivered to Robec a certificate
executed by him, dated prior to the Exchange Closing, certifying that one or
more of the conditions set forth in Section 7.01 through 7.17 hereof have not
been fulfilled, the consummation of the Exchange shall constitute a
representation and warranty by AmeriQuest that each of such conditions has been
fulfilled or satisfied.
7.06 Record Date. The record date for the determination of the Robec
shareholders entitled to vote upon the adoption of the Plan of Merger shall
have been fixed or determined in accordance with Section 1763 of the BCL.
7.07 Regulatory Consents. Except for the filing of the Articles of Merger
with the Department of State of the Commonwealth of Pennsylvania, all consents,
authorizations, orders and approvals of, and filings and registrations with,
any United States federal or state governmental commission, board or other
regulatory body which are required for the consummation of the Exchange or the
Merger shall have been obtained or made, and the applicable waiting periods, if
any, under the Antitrust Improvements Act and the rules thereunder shall have
expired or been terminated. No preliminary or permanent injunction or other
order by any federal or state court of competent jurisdiction in the United
States or by any United States federal or state governmental or regulatory body
shall have been issued and remain in effect which prevents the consummation of
the Exchange or the Merger.
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<PAGE>
7.08 Employment Contracts. Each of Messrs. Robert H. Beckett, Robert S.
Beckett and Alexander C. Kramer, Jr., shall have been offered an employment
contract, in substantially the form attached hereto as Exhibit C with base
salaries in amounts previously agreed to between such employee and AmeriQuest.
Except as otherwise provided in this Section 7.08, neither AmeriQuest nor any
of its subsidiaries shall have executed any employment agreements or labor
agreements to which it is not now a party, and shall not have extended or
increased any severance right to any employee.
7.09 Fairness Opinion. The Board of Directors of Robec shall have received a
"fairness opinion" on the Exchange and the Merger from a firm qualified to
render the same, satisfactory to the Board of Directors of Robec.
7.10 Opinion of Counsel. AmeriQuest shall have furnished Robec and the
Principal Shareholders with a favorable opinion, dated the date of the Exchange
Closing, of Raymond L. Ridge, Esq., addressed to Robec and in form and
substance satisfactory to Robec and its legal counsel, to the effect that:
(a) AmeriQuest is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware.
(b) All corporate proceedings required to be taken by or on the part of
AmeriQuest to authorize it to carry out this Agreement have been performed,
and this Agreement has been performed, and this Agreement has been duly
executed and delivered by AmeriQuest, is valid and binding upon AmeriQuest
and, subject to any insolvency law of general applicability, is enforceable
in accordance with its terms.
(c) The shares to be issued in the Exchange have been duly authorized and
upon receipt by the Principal Shareholders will be duly issued, fully-paid
and nonassessable shares of AmeriQuest Common Stock, duly approved for
listing on the NYSE upon official notice of issuance.
7.11 Third Party Consents. Robec shall have received all consents from third
parties which are required for the consummation of the Exchange or the Merger.
7.12 Horsham Lease. AmeriQuest shall have confirmed that the Surviving
Corporation will continue the existing lease and the use of the Robec office
building and warehouse in Horsham, Pennsylvania as its East Coast distribution
facility through end of the term of such lease.
7.13 No Material Adverse Change. There shall have been no material adverse
change in the business, properties, operations, financial conditions or
earnings of AmeriQuest since the date hereof.
7.14 Registration Rights. AmeriQuest shall have entered into a form of
Registration Rights Agreement with the Principal Shareholders in the form
attached hereto as Exhibit B.
7.15 Approval of Legal Matters by Counsel. All legal matters in connection
with this Agreement and the Exchange Closing hereunder shall be approved by
Morgan, Lewis & Bockius, legal counsel for Robec, in the exercise of reasonable
judgment; and there shall have been furnished to such counsel by AmeriQuest
such corporate and other records and information as they may reasonably have
requested for such purpose.
7.16 New York Stock Exchange Listing. The AmeriQuest Common Stock to be
issued pursuant to the Exchange shall have been approved for listing on the
NYSE upon official notice of issuance.
7.17 Repayment of Robec Debt. AmeriQuest or Robec shall have received
proceeds of a loan in an amount to Robec sufficient to repay all amounts
outstanding under the Credit Agreement pursuant to Section 4.22 hereof.
B. The obligation of Robec to consummate and to effect the Merger
contemplated hereunder shall be subject to the following express conditions
precedent:
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<PAGE>
7.18 Completion of Exchange and Fulfillment of Conditions to Exchange. The
Exchange shall have occurred.
7.19 Effective Registration Statement. The Registration Statement on Form S-4
which is referred to in Section 1.08(c) hereof shall have been declared
effective by the SEC and not be the subject of any stop-order from the SEC or
other proceeding by the SEC which would bring into question the accuracy and
adequacy of the disclosures contained therein.
7.20 Shareholder Approvals. All required approvals from the shareholders of
Robec, Newco and AmeriQuest shall have been obtained.
7.21 New York Stock Exchange Listing. The AmeriQuest Common Stock issued
pursuant to the Exchange and to be issued pursuant to the Merger shall have
been approved for listing on the NYSE upon official notice of issuance.
7.22 Opinion of Counsel. AmeriQuest shall have furnished Robec with a
favorable opinion, dated the Effective Date, of Raymond L. Ridge, Esq.,
addressed to Robec and in form and substance satisfactory to Robec and its
legal counsel, to the effect that:
(a) AmeriQuest is a corporation duly incorporated, validly existing, and
in good standing under the laws of the State of Delaware.
(b) Newco is a corporation duly incorporated, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania.
(c) All corporate proceedings required to be taken by or on the part of
AmeriQuest to authorize it to carry out this Agreement have been performed,
and this Agreement has been duly executed and delivered by AmeriQuest, is
valid and binding upon AmeriQuest and, subject to any insolvency laws of
general applicability, is enforceable in accordance with its terms.
(d) The shares to be issued in the Merger have been duly authorized and
upon receipt by the Robec shareholders will be duly issued, fully-paid and
nonassessable shares of AmeriQuest Common Stock, duly approved for listing
on the NYSE upon official notice of issuance.
7.23 No Litigation. No preliminary or permanent injunction or other order
shall have been issued by any federal or state court of competent jurisdiction
in the United States or by any United States federal or state governmental or
regulatory body which prevents consummation of the Merger and which is in
effect on the Merger Closing Date.
7.24 Continued Truth of Warranties. The representations and warranties of
AmeriQuest herein contained shall be true on and as of the Effective Date with
the same force and effect as though made as of such date, except for any
variations permitted by this Agreement.
7.25 Performance of Covenants. AmeriQuest shall have performed all material
covenants and obligations and complied with all material conditions required by
this Agreement to be performed or complied with by it prior to the Effective
Date.
7.26 Approval of Legal Matters by Counsel. All legal matters in connection
with this Agreement and the Merger Closing hereunder shall be approved by
Morgan, Lewis & Bockius, legal counsel for Robec, in the exercise of reasonable
judgment; and there shall have been furnished to such counsel by AmeriQuest
such corporate and other records and information as they may reasonably have
requested for such purpose.
ANY OF THE CONDITIONS CONTAINED IN THIS ARTICLE VII OTHER THAN SECTION 7.14
MAY BE WAIVED, IN WHOLE OR IN PART, BY ROBEC.
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ARTICLE VIII.
MISCELLANEOUS
8.01 Broker For AmeriQuest. AmeriQuest represents and warrants that no
person, firm or corporation has acted in the capacity of broker on its behalf
to bring about the negotiation of this Agreement, and agrees to indemnify and
hold harmless Robec, its subsidiaries and affiliates, against any claims or
liabilities asserted against them by any person acting or claiming to act as a
broker or finder on behalf of AmeriQuest.
8.02 Broker for Robec. Robec represents and warrants that it is obligated to
pay to Penn Hudson Financial Group, Inc. a fee of $75,000 (the "Penn Hudson
Fee") in such firm's capacity as a broker on behalf of Robec in connection with
this Agreement. Robec agrees to pay the Penn Hudson Fee prior to or on the
Effective Date and to indemnify and hold harmless AmeriQuest, its subsidiaries
and affiliates, against any claims or liabilities asserted against them by any
other person acting or claiming to act as a broker or finder on behalf of
Robec.
8.03 Notices. Any notices or other communications required or permitted
hereunder to AmeriQuest and Robec shall be sufficiently given if delivered in
person or sent by telephonic facsimile or by registered mail or courier
service, charges prepaid, addressed as follows:
In the case of AmeriQuest:
AmeriQuest Technologies, Inc.
2722 Michelson Drive
Irvine, California
FAX No. (714) 222-6310
ATTENTION: Harold L. Clark, President
In the case of Robec:
Robec Inc.
425 Privet Road
Horsham, Pennsylvania
FAX No. (215) 672-9747
ATTENTION: Robert H. Beckett, Chairman, Chief Executive Officer
and President
With a copy to:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103
FAX No. (215) 963-5299
ATTENTION: Edward B. Cloues II, Esq.
or to such substituted address as any party has given notice to the other in
writing.
8.04 Waivers and Amendments. Any failure by AmeriQuest or of Robec to comply
with any of their respective obligations, agreements or covenants as set forth
herein may be expressly waived in writing by AmeriQuest in the case of a
default by Robec, and by Robec in the case of a default by AmeriQuest.
8.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
8.06 Confidentiality. Robec and AmeriQuest will provide to each other and, in
the case of AmeriQuest, to the Principal Shareholders, information concerning
their respective businesses and properties. All such information which each
party may provide (or which it has already provided) to the other party, except
information available to the public through documents filed with the Securities
and Exchange Commission
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or otherwise available to the public, is hereinafter called the "Confidential
Information." The Confidential Information shall be treated by the receiving
party as confidential and shall be used by the receiving party only for the
purpose of considering the transaction contemplated by this Agreement. Each of
the parties hereto will retain in confidence, and will require its employees,
consultants, professional representatives and agents to retain in confidence,
all Confidential Information of the other party, and neither party will use or
disclose to others, or permit the use or disclosure of, any such Confidential
Information except for such purpose and except for such disclosure to their
employees, consultants, professional representatives and agents as may be
necessary for such purpose.
If either Robec or AmeriQuest terminates this Agreement, each party will
promptly deliver to the other (without retaining copies thereof) any and all
documents and other materials containing the Confidential Information obtained
from the other party in connection with such discussions, and the Principal
Shareholders will do likewise. Additionally, if this Agreement should be
terminated as herein provided, the parties hereto shall each keep confidential
any information (unless readily ascertainable from public information) obtained
from the other party concerning the properties, operations and business of the
other.
8.07 Expenses. The parties hereto shall each pay their own expenses in
connection with this Agreement and the Merger contemplated hereby. The expense
of furnishing documents required under this Agreement shall be borne by the
party obligated to furnish the same.
8.08 Termination of Agreement. This Agreement may be terminated: (a) by
mutual agreement of Robec and AmeriQuest; (b) by AmeriQuest, prior to the
Exchange, if there has been a breach by Robec of any representation, warranty,
covenant or agreement set forth in this Agreement on the part of Robec which
has or can reasonably be expected to have a material adverse effect on Robec
and which Robec fails to cure prior to the Exchange (except that no cure period
shall be provided for a breach by Robec which by its nature cannot be cured) or
if approval of this Agreement by its board of directors pursuant to Section
6.01 hereof is not obtained; (c) by Robec, if there has been a breach by
AmeriQuest of any representation, warranty, covenant or agreement set forth in
this Agreement on the part of AmeriQuest which has or can reasonably be
expected to have a material adverse effect on AmeriQuest and which AmeriQuest
fails to cure prior to the Effective Date (except that no cure period shall be
provided for a breach by AmeriQuest which by its nature cannot be cured) or if
approval of this Agreement by its board of directors pursuant to Section 7.01
hereof or by its shareholders pursuant to Section 1.08(b) hereof is not
obtained; (d) by either party, if the Exchange shall not have occurred on or
prior to September 30, 1994; (e) by Robec, if the Merger shall not have
occurred on or prior to December 31, 1994, or (f) by Robec or any of the
Principal Shareholders if prior to the Exchange Robec decides to accept a
Superior Proposal (as defined in Section 8.09 hereof). Unless a termination is
caused by the willful failure of one of the parties hereto to perform or
satisfy an agreement or condition to be performed or satisfied by it hereunder,
none of the parties hereto shall have any further obligation or liability to
the other parties under this Agreement other than their respective obligations
under Sections 8.06, 8.07 and 8.12 hereof.
8.09 Competing Offers. Notwithstanding the foregoing, in the event that Robec
receives a bona fide proposal relating to the possible acquisition of Robec
(whether by way of merger, purchase of capital stock, purchase of assets or
otherwise) or any material portion of its capital stock or assets by any person
other than AmeriQuest, which proposal is, in the reasonable good faith judgment
of the Board of Directors of Robec, financially more favorable to the
shareholders of Robec than the terms of the Merger (a "Superior Proposal"),
nothing contained in this Agreement shall prevent the Board of Directors of
Robec from providing information to the party making the Superior Proposal,
negotiating with the party making the Superior Proposal, communicating the
Superior Proposal to the shareholders of Robec or making a recommendation in
favor of the Superior Proposal if before making such recommendation the Board
of Directors determines in good faith, after consultation with legal counsel,
that such action is required or likely required by reason of the fiduciary
duties of the members of the Board of Directors of Robec to the shareholders of
Robec under applicable law.
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However, Robec shall immediately notify AmeriQuest of each proposal it may so
receive to afford AmeriQuest the opportunity to counter with a proposal that is
equal to or better than any Superior Proposal that Robec may receive.
8.10 Announcement. Upon execution of this Agreement, AmeriQuest and Robec
promptly will issue a joint press release approved by both AmeriQuest and Robec
announcing the Exchange and the Merger. Thereafter, neither of such parties
shall make any further announcements with respect to this Agreement or the
transactions proposed herein, without the prior written consent of the other
party, which consent shall not be unreasonably withheld or delayed, provided,
however, that AmeriQuest and Robec may issue such press releases, and make such
other disclosures regarding the transactions contemplated herein, as each
determines (after consultation with legal counsel) are required under
applicable securities laws, NYSE rules or rules of the National Association of
Securities Dealers Automated Quotation system ("NASDAQ").
8.11 Robec Approvals After the Exchange. After the consummation of the
Exchange, any waiver of any condition, or consent to any action, or any
amendment to this Agreement or the Plan of Merger by Robec, shall require, in
addition to any other approval required by applicable law or Robec's Articles
of Incorporation, the approval of a majority of the Robec directors who were
directors of Robec as of the date hereof.
8.12 Indemnification and Insurance. (a) The Certificate of Incorporation of
the Surviving Corporation shall contain the provisions with respect to
indemnification set forth in the Articles of Incorporation of Robec on the date
of this Agreement, which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Date in any manner that
would adversely affect the rights thereunder of individuals who at the
Effective Date were directors, officers, employees or agents of Robec, unless
such modification is required by law.
(b) After the Effective Date (and with respect to the Principal Shareholders,
after the Exchange Closing), AmeriQuest and the Surviving Corporation shall, to
the fullest extent permitted under applicable law or under AmeriQuest's or the
Surviving Corporation's Certificate of Incorporation or By-laws, indemnify and
hold harmless each present and former director and officer of Robec and, to the
fullest extent permitted under applicable law, each Principal Shareholder
(collectively, the "Indemnified Parties") against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to any action or
omission occurring prior to the Effective Date, or arising out of or pertaining
to the transactions contemplated by this Agreement (collectively, "Damages"),
for a period of six years after the date hereof. Furthermore, for a period of
six years after the date hereof, AmeriQuest and the Surviving Corporation
shall, to the fullest extent permitted under applicable law, indemnify and hold
harmless each Principal Shareholder in his capacity as an accommodating
shareholder against any Damages arising out of or pertaining to the
transactions contemplated by this Agreement. AmeriQuest or the Surviving
Corporation shall, to the fullest extent permitted under applicable law, pay
expenses incurred by an Indemnified Party in advance of a disposition of the
applicable action or suit upon the receipt of an undertaking by such person to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified hereunder. If for any reason AmeriQuest and the Surviving
Corporation do not promptly fulfill the indemnification and payment obligations
to the Principal Shareholders set forth in this Section 8.12(b), Robec or its
successor shall perform such obligations as though named in such provisions to
the fullest extent permitted under applicable law. The indemnifying party shall
have the right to choose counsel reasonably acceptable to the Indemnified
Parties. Indemnified Parties may not agree to settle claim without the consent
of the indemnifying party, which consent may not be unreasonably withheld.
(c) For a period of six years after the Effective Date, AmeriQuest shall
cause the Surviving Corporation to use its best efforts to maintain in effect,
if available, directors' and officers' liability insurance covering those
persons who are currently covered by Robec's directors' and officers' liability
insurance policy (a copy
II-23
<PAGE>
of which has been heretofore delivered or made available to AmeriQuest) on
terms comparable to those applicable to the then current directors and officers
of AmeriQuest.
8.13 Attorney's Fees. If any action or proceeding is brought by either party
against the other with respect to this Agreement, the prevailing party shall be
entitled to recover attorney's fees and costs in such amount as the court (or
the arbitrators) may adjudge reasonable.
8.14 Further Assurances. Each of Robec and AmeriQuest agree to use its best
efforts to obtain all consents required by it to consummate the transactions
contemplated by this Agreement. Each party agrees to cooperate with the other
and to execute such further instruments, documents and agreements as may be
reasonably requested by the other to evidence and reflect the transactions
contemplated by this Agreement.
8.15 Headings. The headings herein are for convenience of reference only, do
not constitute a part of this Agreement, and shall not be deemed to limit or
affect any of the provisions of this Agreement.
8.16 Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania.
8.17 Entire Agreement. All prior negotiations and agreements between the
parties hereto are superseded by this Agreement and there are no
representations, warranties, understandings or agreements other than those
expressly set forth herein, in the attached Appendices or in Exhibits delivered
pursuant hereto, except as modified in writing concurrently herewith or
subsequent hereto.
WHEREFORE, the parties have set their hands on September 21, 1994 but
effective as of August 11, 1994.
AmeriQuest Technologies, Inc.
Attest:
/s/ Stephen G. Holmes /s/ Harold L. Clark
_____________________________________ _____________________________________
Stephen G. Holmes, Harold L. Clark,
Secretary President
Robec, Inc.
Attest:
/s/ Robert S. Beckett /s/ Robert H. Beckett
_____________________________________ _____________________________________
Robert S. Beckett, Robert H. Beckett,
Secretary Chairman, Chief Executive Officer
and President
PRINCIPAL SHAREHOLDERS
Each individual Principal Shareholder is joining in this Amended and Restated
Agreement and Plan of Reorganization in his or her capacity as an individual
shareholder solely for the purpose of agreeing to be bound by Sections 1.01,
8.06, 8.08 and 8.16 hereof.
/s/ Robert H. Beckett
_____________________________________
Robert H. Beckett
/s/ Robert S. Beckett
_____________________________________
Robert S. Beckett
/s/ Alexander C. Kramer, Jr.
_____________________________________
Alexander C. Kramer, Jr.
/s/ G. Wesley McKinney
_____________________________________
G. Wesley McKinney
II-24
<PAGE>
APPENDICES
Appendix I --Stock Options, Warrants and Convertible Securities of AmeriQuest
Appendix II --AmeriQuest's Subsidiaries
Appendix III --Instruments Violated by AmeriQuest being party to the Agreement
Appendix IV --Defaults by AmeriQuest
Appendix V --Certain Material AmeriQuest Agreements
Appendix VI --Certain AmeriQuest Litigation
Appendix VII --AmeriQuest's Highly Compensated Employees
Appendix VIII--AmeriQuest's Labor Concerns and Financial Condition
Appendix IX --Stock Options, Warrants and Convertible Securities of Robec
Appendix X --Robec's Subsidiaries
Appendix XI --Instruments Violated by Robec being party to the Agreement
Appendix XII --Robec's Loans in Default and Scheduled for Repayment Prior to the
Effective Date
Appendix XIII--Certain Material Robec Agreements
Appendix XIV --Certain Robec Litigation
Appendix XV --Robec's Highly Compensated Employees
Appendix XVI --Robec's Labor Concerns and Financial Condition
II-25
<PAGE>
EXHIBITS
<TABLE>
<S> <C>
Exhibit A--Plan of Merger
Exhibit B--Registration Rights Agreement
Exhibit C--Form of Employment Agreement.
</TABLE>
II-26
<PAGE>
AMENDMENT NO. 1 TO THE AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION
THIS AMENDMENT NO. 1 (this "Amendment") to the Amended and Restated Agreement
and Plan of Reorganization is made and entered into as of August 4, 1995 by and
among AmeriQuest Technologies, Inc., a Delaware corporation ("AmeriQuest"),
Robec, Inc., a Pennsylvania corporation ("Robec"), and Robert H. Beckett,
Robert S. Beckett, Alexander C. Kramer, Jr. and G. Wesley McKinney, who are
certain principal shareholders of Robec (the "Principal Shareholders").
W I T N E S S E T H
WHEREAS, AmeriQuest, Robec and the Principal Shareholders are parties to an
Amended and Restated Agreement and Plan of Reorganization made and entered into
as of the 11th day of August, 1994 (the "Agreement");
WHEREAS, AmeriQuest, Robec and the Principal Shareholders desire to amend the
Agreement, as set forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and in consideration for the
agreements, representations and warranties set forth below, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Section 1.01 of the Agreement is hereby amended to read in its entirety as
follows:
1.01 Exchange of Shares by Principal Shareholders. Subject to the terms
and conditions contained in this Agreement, each of the Principal
Shareholders agrees with AmeriQuest to exchange pro rata a portion of the
number of shares of Robec Common Stock held by such Principal Shareholder
(the "Exchange Shares") for AmeriQuest Common Stock (previously defined as
the "Exchange") such that following the Exchange, AmeriQuest will own at
least 50.1% of the outstanding shares of Robec's Common Stock. The closing
of the Exchange is referred to herein as the "Exchange Closing" and shall
occur upon the satisfaction of the applicable conditions and pursuant to
the terms as provided herein at such time and place as the parties shall
agree. Upon the Exchange Closing, each Exchange Share shall be exchanged
into .63075 of a validly issued, fully paid and nonassessable share of
AmeriQuest Common Stock; provided, however, that at the Merger Closing each
Principal Shareholder shall receive, as additional consideration for each
Exchange Share, (1) .19869 of a validly issued, fully-paid and
nonassessable share of AmeriQuest Common Stock plus (2) in the event that
the lesser of (A) the mean trading price (determined by dividing by two the
sum of the daily high and low price as reported in the Wall Street Journal)
of AmeriQuest Common Stock on the New York Stock Exchange on the trading
day prior to the day on which Robec shareholders vote on the approval and
adoption of the Plan of Merger (the "Meeting Date") or (B) the average of
the mean trading prices (determined by dividing by two the sum of the daily
high and low prices as reported in the Wall Street Journal) of AmeriQuest
Common Stock on the New York Stock Exchange for each of the twenty trading
days prior to the Meeting Date (the lesser of the amounts determined
pursuant to (A) or (B) above, the "Market Price"), is less than $3.00 per
share, on the Effective Date, the Principal Shareholders shall be entitled
to receive additional validly issued, fully paid and non-assessable shares
of AmeriQuest Common Stock equal to the difference between (a) .63075
multiplied by a quotient, the numerator of which is $3.00 and the
denominator of which is the Market Price and (b) .63075. No fractional
shares of AmeriQuest Common Stock will be issued in connection with the
Exchange or any adjustment pursuant to this Section 1.01, but in lieu
thereof each Principal Shareholder who would otherwise be entitled to
receive a fraction of a share of AmeriQuest Common Stock will receive an
amount in cash equal to the market value of one share of AmeriQuest Common
Stock (based on the Market Price) multiplied by the fraction of a share of
AmeriQuest Common Stock to which such holder would otherwise be entitled
without any interest thereon.
II-27
<PAGE>
2. The Plan of Merger attached as Exhibit A to the Agreement is hereby
amended in its entirety as set forth on Schedule I hereto.
3. Section 1.06 of the Agreement is hereby amended in its entirety as
follows:
1.06 Board Representation of Robec. The Board of Directors of AmeriQuest
shall cause Robert H. Beckett to be appointed, effective as of the
Effective Time, to the Board of Directors of AmeriQuest, to serve until
such time as his successor, if any, is duly elected and qualified to serve,
and shall nominate him for reelection at each of the next two annual
meetings of shareholders.
4. Section 1.07 of the Agreement is hereby amended in its entirety as
follows:
1.07 Merger Closing. The closing of the Merger contemplated by this
Agreement (the "Merger Closing") shall take place at the offices of Morgan,
Lewis & Bockius, 2000 One Logan Square, Philadelphia, PA 19103 commencing
at 10:00 A.M., local time, on the later of (a) the Meeting Date or (b) the
day on which the last of the applicable conditions precedent to the Merger
set forth in Articles VIB and VIIB hereof is fulfilled or waived (subject
to applicable law)(the "Merger Closing Date"); provided, however, that in
no case shall the Merger Closing Date be later than the second business day
following the Meeting Date. On the Merger Closing Date, Articles of Merger
including the Plan of Merger shall be filed with the Department of State of
the Commonwealth of Pennsylvania in accordance with the provisions of the
Pennsylvania Business Corporation Law of 1988 (the "BCL"), and the Merger
shall become effective upon such filing or at such later time on the Merger
Closing Date as may be specified in the filing with the Department of State
of the Commonwealth of Pennsylvania (the "Effective Date").
5. A new Section 2.24 shall be added as follows:
2.24 Deletion of Robec Customer List Files. AmeriQuest represents,
warrants and covenants that (i) it and its subsidiaries no longer use in
any way whatsoever any customer list of Robec and (ii) that it and its
subsidiaries have deleted the relevant portions of any computer files
containing, and destroyed all originals and copies whatsoever of, any Robec
customer list which AmeriQuest or its subsidiaries have come into
possession of prior to the date hereof.
6. The first sentence of Section 7.08 of the Agreement is hereby amended in
its entirety as follows:
7.08 Employment Contracts. Each of Messrs. Robert H. Beckett, Robert S.
Beckett and Alexander C. Kramer, Jr., shall have been offered an employment
contract in substantially the form attached hereto as Exhibit C, continuing
for a period of two years from the Effective Date, with base salaries in
amounts previously agreed to between such employee and AmeriQuest.
7. A new section 7.27 shall be added as follows:
7.27 Investment by Computer 2000. Prior to or contemporaneously with the
Merger Closing, Computer 2000, A.G., a company organized under the laws of
the Federal Republic of Germany ("Computer 2000") shall have invested in
AmeriQuest (the "Investment") on substantially the terms set forth in the
letter from Computer 2000 to AmeriQuest dated July 12, 1995. AmeriQuest
shall promptly provide a copy to Robec of the definitive agreement between
AmeriQuest and Computer 2000 relating to the Investment.
8. Section 8.08(e) of the Agreement is hereby amended in its entirety as
follows:
(e) by Robec, if the Merger shall not have occurred on or prior to
December 31, 1994; provided, however, that this Section 8.08(e) shall be of
no further force or effect following the completion of the Investment, or
9. Except as amended by this Amendment, the Agreement shall remain unchanged
in all other respects and shall remain in full force and effect.
II-28
<PAGE>
10. This Amendment may be executed in two or more counterparts, each of which
shall be deemed to be an original as against any party whose signature appears
thereon, but all of which together shall constitute one and the same
instrument.
11. Each party hereto represents and warrants to each other party hereto that
it has full power and authority to enter into this Amendment, and that this
Amendment constitutes its valid and binding obligation, enforceable against it
in accordance with the terms hereof.
12. All of the terms and provisions of this Amendment and the rights and
obligations of the parties hereto shall be interpreted and enforced in
accordance with the laws of the Commonwealth of Pennsylvania.
WHEREFORE, the parties have set their hands on August 4, 1995 but effective
as of August 11, 1994.
Attest: AMERIQUEST TECHNOLOGIES, INC.
/s/ Stephen G. Holmes /s/ Harold L. Clark
- ------------------------------- -------------------------------
Stephen G. Holmes, Secretary Harold L. Clark, President
Attest: ROBEC, INC.
/s/ Robert S. Beckett /s/ Robert H. Beckett
- ------------------------------- -------------------------------
Robert C. Beckett, Secretary Robert H. Beckett, Chairman,
Chief Executive Officer and
President
PRINCIPAL SHAREHOLDERS
/s/ Robert H. Beckett
-------------------------------
Robert H. Beckett
/s/ Robert S. Beckett
-------------------------------
Robert S. Beckett
/s/Alexander C. Kramer, Jr.
-------------------------------
Alexander C. Kramer, Jr.
/s/ G. Welsey McKinney
-------------------------------
G. Wesley McKinney
II-29
<PAGE>
AMENDMENT NO. 2 TO THE AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION
THIS AMENDMENT NO. 2 (this "Amendment") to the Amended and Restated Agreement
and Plan of Reorganization is made and entered into as of August 15, 1995 by
and among AmeriQuest Technologies, Inc., a Delaware corporation ("AmeriQuest"),
Robec, Inc., a Pennsylvania corporation ("Robec"), and Robert H. Beckett,
Robert S. Beckett, Alexander C. Kramer, Jr. and G. Wesley McKinney, who are
certain principal shareholders of Robec (the "Principal Shareholders").
W I T N E S S E T H
WHEREAS, AmeriQuest, Robec and the Principal Shareholders are parties to an
Amended and Restated Agreement and Plan of Reorganization made and entered into
as of the 11th day of August, 1994, as amended by Amendment No. 1 as of August
4, 1995 (the "Agreement");
WHEREAS, AmeriQuest, Robec and the Principal Shareholders desire to amend the
Agreement, as set forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and in consideration for the
agreements set forth below, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Section 1.01 of the Agreement is hereby amended to read in its entirety as
follows:
1.01 EXCHANGE OF SHARES BY PRINCIPAL SHAREHOLDERS. Subject to the terms
and conditions contained in this Agreement, each of the Principal
Shareholders agrees with AmeriQuest to exchange pro rata a portion of the
number of shares of Robec Common Stock held by such Principal Shareholder
(the "Exchange Shares") for AmeriQuest Common Stock (previously defined as
the "Exchange") such that following the Exchange, AmeriQuest will own at
least 50.1% of the outstanding shares of Robec's Common Stock. The closing
of the Exchange is referred to herein as the "Exchange Closing" and shall
occur upon the satisfaction of the applicable conditions and pursuant to
the terms as provided herein at such time and place as the parties shall
agree. Upon the Exchange Closing, each Exchange Share shall be exchanged
into .63075 of a validly issued, fully paid and nonassessable share of
AmeriQuest Common Stock; provided, however, that at the Merger Closing each
Principal Shareholder shall receive, as additional consideration for each
Exchange Share, (1) .19869 of a validly issued, fully-paid and
nonassessable share of AmeriQuest Common Stock plus (2) in the event that
the lesser of (A) the mean trading price (determined by dividing by two the
sum of the daily high and low price as reported in the Wall Street Journal)
of AmeriQuest Common Stock on the New York Stock Exchange on the fourth
trading day prior to the day on which Robec shareholders vote on the
approval and adoption of the Plan of Merger (the "Meeting Date") or (B) the
average of the mean trading prices (determined by dividing by two the sum
of the daily high and low prices as reported in the Wall Street Journal) of
AmeriQuest Common Stock on the New York Stock Exchange for each of the
twenty trading days prior to the fourth trading day prior to the Meeting
Date (the lesser of the amounts determined pursuant to (A) or (B) above,
the "Market Price"), is less than $3.00 per share, on the Effective Date,
additional validly issued, fully paid and non-assessable shares of
AmeriQuest Common Stock equal to the difference between (a) .63075
multiplied by a quotient, the numerator of which is $3.00 and the
denominator of which is the Market Price and (b) .63075. No fractional
shares of AmeriQuest Common Stock will be issued in connection with the
Exchange or any adjustment pursuant to this Section 1.01, but in lieu
thereof each Principal Shareholder who would otherwise be entitled to
receive a fraction of a share of AmeriQuest Common Stock will receive an
amount in cash equal to the market value of one share of AmeriQuest Common
Stock (based on the Market Price) multiplied by the fraction of a share of
AmeriQuest Common Stock to which such holder would otherwise be entitled
without any interest thereon.
II-30
<PAGE>
2. The Plan of Merger attached as Exhibit A to the Agreement is hereby
amended in its entirety as set forth on Schedule I hereto.
3. Except as amended by this Amendment, the Agreement shall remain
unchanged in all other respects and shall remain in full force and effect.
4. This Amendment may be executed in two or more counterparts, each of
which shall be deemed to be an original as against any party whose
signature appears thereon, but all of which together shall constitute one
and the same instrument.
5. Each party hereto represents and warrants to each other party hereto
that it has full power and authority to enter into this Amendment, and that
this Amendment constitutes its valid and binding obligation, enforceable
against it in accordance with the terms hereof.
6. All of the terms and provisions of this Amendment and the rights and
obligations of the parties hereto shall be interpreted and enforced in
accordance with the laws of the Commonwealth of Pennsylvania.
WHEREFORE, the parties have set their hands as of August 15, 1995 but
effective as of August 11, 1994.
AMERIQUEST TECHNOLOGIES, INC.
Attest:
/s/ STEPHEN G. HOLMES /s/ DONALD RESNICK
Stephen G. Holmes, Donald Resnick,
Secretary President
ROBEC, INC.
Attest:
/s/ ROBERT S. BECKETT /s/ ROBERT H. BECKETT
Robert S. Beckett, Robert H. Beckett,
Secretary Chairman, Chief Executive Officer
and President
PRINCIPAL SHAREHOLDERS
/s/ ROBERT H. BECKETT
Robert H. Beckett
/s/ ROBERT S. BECKETT
Robert S. Beckett
/s/ ALEXANDER C. KRAMER, JR.
Alexander C. Kramer, Jr.
/s/ G. WESLEY MC KINNEY
G. Wesley McKinney
II-31
<PAGE>
APPENDIX III
COMPASS
CAPITAL ADVISORS
September 20, 1994
Board of Directors
Robec, Inc.
425 Privet Road
Horsham, PA 19044
Dear Sirs:
You have asked us to render our opinion as to whether the proposed merger of
Robec, Inc. ("Robec" or the "Company") with a wholly-owned subsidiary of
AmeriQuest Technologies, Inc. ("AmeriQuest"), pursuant to which the outstanding
shares of Robec common stock will be converted to 0.63075 shares of AmeriQuest
common stock (the "Transaction"), is fair, from a financial point of view, to
the current shareholders of the Company.
Compass Capital Advisors ("CCA"), as part of its investment banking business,
is regularly engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, employee benefit plans, and
valuations for corporate, estate, and other purposes. Neither CCA nor any of
its officers or employees has any interest in AmeriQuest or the Company, and
all of such persons are otherwise independent with respect to the Transaction.
In arriving at our opinion we have:
1. reviewed the Amended and Restated Agreement and Plan of Reorganization
dated as of August 11, 1994 by and among, inter alia, Robec and AmeriQuest,
including the Plan of Merger attached thereto;
2. reviewed the filings of Robec and AmeriQuest with the Securities and
Exchange Commission in 1993 and 1994 to date;
3. reviewed the Company's 1994 budget income statement and 1995 projected
consolidated statement of operations prepared by the Company's management;
4. reviewed AmeriQuest's budget model;
5. reviewed AmeriQuest's internally prepared projected financial
statements for Robec and AmeriQuest operations for 1994 through 1998;
6. reviewed AmeriQuest's Form S-4 Registration Statement, as filed with
the Securities and Exchange Commission on July 20, 1994;
7. reviewed press releases issued by Robec between August 1993 and August
10, 1994 and by AmeriQuest between December 1993 and August 12, 1994;
8. reviewed price and volume information relating to trading in Robec and
AmeriQuest common stock from 1992 through September 16, 1994;
9. reviewed and analyzed market trading and financial information about
certain publicly-traded companies which we deemed to be reasonably similar
to Robec and AmeriQuest;
10. reviewed and analyzed publicly available information with respect to
reported acquisitions in the computer industry;
11. discussed the business and prospects of the Company with its senior
management; and
12. reviewed all of the foregoing with you before forming our opinion.
III-1
<PAGE>
In preparing our opinion, we have relied on the accuracy and completeness of
all information supplied or otherwise made available to us by Robec and
AmeriQuest, and we have not independently verified such information or
undertaken an independent appraisal of the assets of Robec or AmeriQuest. We
assume no responsibility to revise or update our opinion if there is a change
in the financial condition or prospects of Robec or AmeriQuest from that
disclosed or projected in the information we reviewed and set forth above or in
the general, economic or market conditions. This opinion does not constitute a
recommendation to any Robec shareholder as to how any such shareholder should
vote on the Transaction. This opinion does not address the relative merits of
the Transaction and any other transactions or business strategies that may have
been discussed by the Company's Board of Directors as alternatives to the
Transaction or the decision of the Company's Board of Directors to proceed with
the Transaction. Our opinion has been prepared solely for the use of the
Company's Board of Directors in its consideration of the Transaction and may
not be reproduced, summarized, described or referred to or given to any other
person or otherwise made public without CCA's prior written consent, except for
inclusion in full in the proxy statement to be sent to the Company's
shareholders in connection with obtaining shareholder approval of the
Transaction, and in any other filings made by the Company under applicable
securities laws. No opinion is expressed herein as to the price at which the
securities to be issued in the Transaction may trade at any time.
Based upon and subject to the foregoing, it is our opinion that the
Transaction is fair, from a financial point of view, to the shareholders of the
Company.
Compass Capital Advisors
/s/ Gabriel F. Nagy
By __________________________________
Gabriel F. Nagy, A.S.A.
Vice President
III-2
<PAGE>
APPENDIX IV
SUBCHAPTER 15D OF THE PENNSYLVANIA BUSINESS CORPORATION LAW
DISSENTERS RIGHTS
Section
1571. Application and effect of subchapter.
1572. Definitions.
1573. Record and beneficial holders and owners.
1574. Notice of intention to dissent.
1575. Notice to demand payment.
1576. Failure to comply with notice to demand payment, etc.
1577. Release of restrictions or payment for shares.
1578. Estimate by dissenter of fair value of shares.
1579. Valuation proceedings generally.
1580. Costs and expenses of valuation proceedings.
(S)1571. APPLICATION AND EFFECT OF SUBCHAPTER.
(a) GENERAL RULE.--Except as otherwise provided in subsection (b), any
shareholder of a business corporation shall have the right to dissent from, and
to obtain payment of the fair value of his shares in the event of, any
corporate action, or to otherwise obtain fair value for his shares, where this
part expressly provides that a shareholder shall have the rights and remedies
provided in this subchapter. See:
Section 1906(c) (relating to dissenters rights upon special treatment).
Section 1930 (relating to dissenters rights).
Section 1931(d) (relating to dissenters rights in share exchanges).
Section 1932(c) (relating to dissenters rights in asset transfers).
Section 1952(d) (relating to dissenters rights in division).
Section 1962(c) (relating to dissenters rights in conversion).
Section 2104(b) (relating to procedure).
Section 2324 (relating to corporation option where a restriction on
transfer of a security is held invalid).
Section 2325(b) (relating to minimum vote requirement).
Section 2704(d) (relating to dissenters rights upon election).
Section 2705(c) (relating to dissenters rights upon renewal of election).
Section 2907(a) (relating to proceedings to terminate breach of
qualifying conditions).
Section 7104(b)(3) (relating to procedure).
(B) EXCEPTIONS.--
(1) Except as otherwise provided in paragraph (2), the holders of the
shares of any class or series of shares that, at the record date fixed to
determine the shareholders entitled to notice of and to vote at the meeting
at which a plan specified in any of section 1930, 1931(d), 1932(c) or
1952(d) is to be voted on, are either:
(i) listed on a national securities exchange; or
(ii) held of record by more than 2,000 shareholders;
shall not have the right to obtain payment of the fair value of any such
shares under this subchapter.
IV-1
<PAGE>
(2) Paragraph (1) shall not apply to and dissenters rights shall be
available without regard to the exception provided in that paragraph in the
case of:
(i) Shares converted by a plan if the shares are not converted solely
into shares of the acquiring, surviving, new or other corporation or
solely into such shares and money in lieu of fractional shares.
(ii) Shares of any preferred or special class unless the articles,
the plan or the terms of the transaction entitle all shareholders of
the class to vote thereon and require for the adoption of the plan or
the effectuation of the transaction the affirmative vote of a majority
of the votes cast by all shareholders of the class.
(iii) Shares entitled to dissenters rights under section 1906(c)
(relating to dissenters rights upon special treatment).
(3) The shareholders of a corporation that acquires by purchase, lease,
exchange or other disposition all or substantially all of the shares,
property or assets of another corporation by the issuance of shares,
obligations or otherwise, with or without assuming the liabilities of the
other corporation and with or without the intervention of another
corporation or other person, shall not be entitled to the rights and
remedies of dissenting shareholders provided in this subchapter regardless
of the fact, if it be the case, that the acquisition was accomplished by
the issuance of voting shares of the corporation to be outstanding
immediately after the acquisition sufficient to elect a majority or more of
the directors of the corporation.
(C) GRANT OF OPTIONAL DISSENTERS RIGHTS.--The bylaws or a resolution of the
board of directors may direct that all or a part of the shareholders shall have
dissenters rights in connection with any corporate action or other transaction
that would otherwise not entitle such shareholders to dissenters rights.
(D) NOTICE OF DISSENTERS RIGHTS.--Unless otherwise provided by statute, if a
proposed corporate action that would give rise to dissenters rights under this
subpart is submitted to a vote at a meeting of shareholders, there shall be
included in or enclosed with the notice of meeting:
(1) a statement of the proposed action and a statement that the
shareholders have a right to dissent and obtain payment of the fair value
of their shares by complying with the terms of this subchapter; and
(2) a copy of this subchapter.
(E) OTHER STATUTES.--The procedures of this subchapter shall also be
applicable to any transaction described in any statute other than this part
that makes reference to this subchapter for the purpose of granting dissenters
rights.
(F) CERTAIN PROVISIONS OF ARTICLES INEFFECTIVE.--This subchapter may not be
relaxed by any provision of the articles.
(G) CROSS REFERENCES.--See sections 1105 (relating to restriction on
equitable relief), 1904 (relating to de facto transaction doctrine abolished)
and 2512 (relating to dissenters rights procedure).
(S)1572. DEFINITIONS.
The following words and phrases when used in this subchapter shall have the
meanings given to them in this section unless the context clearly indicates
otherwise:
"CORPORATION." The issuer of the shares held or owned by the dissenter
before the corporate action or the successor by merger, consolidation,
division, conversion or otherwise of that issuer. A plan of division may
designate which of the resulting corporations is the successor corporation
for the purposes of this subchapter. The successor corporation in a
division shall have sole responsibility for payments to dissenters and
other liabilities under this subchapter except as otherwise provided in the
plan of division.
IV-2
<PAGE>
"DISSENTER." A shareholder or beneficial owner who is entitled to and
does assert dissenters rights under this subchapter and who has performed
every act required up to the time involved for the assertion of those
rights.
"FAIR VALUE." The fair value of shares immediately before the
effectuation of the corporate action to which the dissenter objects, taking
into account all relevant factors, but excluding any appreciation or
depreciation in anticipation of the corporate action.
"INTEREST." Interest from the effective date of the corporate action
until the date of payment at such rate as is fair and equitable under all
of the circumstances, taking into account all relevant factors including
the average rate currently paid by the corporation on its principal bank
loans.
(S)1573. RECORD AND BENEFICIAL HOLDERS AND OWNERS.
(A) RECORD HOLDERS OF SHARES.--A record holder of shares of a business
corporation may assert dissenters rights as to fewer than all of the shares
registered in his name only if he dissents with respect to all the shares
beneficially owned by any one person and discloses the name and address of the
person or persons on whose behalf he dissents. In that event, his rights shall
be determined as if the shares as to which he has dissented and his other
shares were registered in the names of different shareholders.
(B) BENEFICIAL OWNERS OF SHARES.--A beneficial owner of shares of a business
corporation who is not the record holder may assert dissenters rights with
respect to shares held on his behalf and shall be treated as a dissenting
shareholder under the terms of this subchapter if he submits to the corporation
not later than the time of the assertion of dissenters rights a written consent
of the record holder. A beneficial owner may not dissent with respect to some
but less than all shares of the same class or series owned by the owner,
whether or not the shares so owned by him are registered in his name.
(S)1574. NOTICE OF INTENTION TO DISSENT.
If the proposed corporate action is submitted to a vote at a meeting of
shareholders of a business corporation, any person who wishes to dissent and
obtain payment of the fair value of his shares must file with the corporation,
prior to the vote, a written notice of intention to demand that he be paid the
fair value for his shares if the proposed action is effectuated, must effect no
change in the beneficial ownership of his shares from the date of such filing
continuously through the effective date of the proposed action and must refrain
from voting his shares in approval of such action. A dissenter who fails in any
respect shall not acquire any right to payment of the fair value of his shares
under this subchapter. Neither a proxy nor a vote against the proposed
corporate action shall constitute the written notice required by this section.
(S)1575. NOTICE TO DEMAND PAYMENT.
(A) GENERAL RULE.--If the proposed corporate action is approved by the
required vote at a meeting of shareholders of a business corporation, the
corporation shall mail a further notice to all dissenters who gave due notice
of intention to demand payment of the fair value of their shares and who
refrained from voting in favor of the proposed action. If the proposed
corporate action is to be taken without a vote of shareholders, the corporation
shall send to all shareholders who are entitled to dissent and demand payment
of the fair value of their shares a notice of the adoption of the plan or other
corporate action. In either case, the notice shall:
(1) State where and when a demand for payment must be sent and
certificates for certificated shares must be deposited in order to obtain
payment.
(2) Inform holders of uncertificated shares to what extent transfer of
shares will be restricted from the time that demand for payment is
received.
(3) Supply a form for demanding payment that includes a request for
certification of the date on which the shareholder, or the person on whose
behalf the shareholder dissents, acquired beneficial ownership of the
shares.
(4) Be accompanied by a copy of this subchapter.
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(B) TIME FOR RECEIPT OF DEMAND FOR PAYMENT.--The time set for receipt of the
demand and deposit of certificated shares shall be not less than 30 days from
the mailing of the notice.
(S)1576. FAILURE TO COMPLY WITH NOTICE TO DEMAND PAYMENT, ETC.
(A) EFFECT OF FAILURE OF SHAREHOLDER TO ACT.--A shareholder who fails to
timely demand payment, or fails (in the case of certificated shares) to timely
deposit certificates, as required by a notice pursuant to section 1575
(relating to notice to demand payment) shall not have any right under this
subchapter to receive payment of the fair value of his shares.
(B) RESTRICTION ON UNCERTIFICATED SHARES.--If the shares are not represented
by certificates, the business corporation may restrict their transfer from the
time of receipt of demand for payment until effectuation of the proposed
corporate action or the release of restrictions under the terms of section
1577(a) (relating to failure to effectuate corporate action).
(C) RIGHTS RETAINED BY SHAREHOLDER.--The dissenter shall retain all other
rights of a shareholder until those rights are modified by effectuation of the
proposed corporate action.
(S)1577. RELEASE OF RESTRICTIONS OR PAYMENT FOR SHARES.
(A) FAILURE TO EFFECTUATE CORPORATE ACTION.--Within 60 days after the date
set for demanding payment and depositing certificates, if the business
corporation has not effectuated the proposed corporate action, it shall return
any certificates that have been deposited and release uncertificated shares
from any transfer restrictions imposed by reason of the demand for payment.
(B) RENEWAL OF NOTICE TO DEMAND PAYMENT.--When uncertificated shares have
been released from transfer restrictions and deposited certificates have been
returned, the corporation may at any later time send a new notice conforming to
the requirements of section 1575 (relating to notice to demand payment), with
like effect.
(C) PAYMENT OF FAIR VALUE OF SHARES.--Promptly after effectuation of the
proposed corporate action, or upon timely receipt of demand for payment if the
corporate action has already been effectuated, the corporation shall either
remit to dissenters who have made demand and (if their shares are certificated)
have deposited their certificates the amount that the corporation estimates to
be the fair value of the shares, or give written notice that no remittance
under this section will be made. The remittance or notice shall be accompanied
by:
(1) The closing balance sheet and statement of income of the issuer of
the shares held or owned by the dissenter for a fiscal year ending not more
than 16 months before the date of remittance or notice together with the
latest available interim financial statements.
(2) A statement of the corporation's estimate of the fair value of the
shares.
(3) A notice of the right of the dissenter to demand payment or
supplemental payment, as the case may be, accompanied by a copy of this
subchapter.
(D) FAILURE TO MAKE PAYMENT.--If the corporation does not remit the amount of
its estimate of the fair value of the shares as provided by subsection (c), it
shall return any certificates that have been deposited and release
uncertificated shares from any transfer restrictions imposed by reason of the
demand for payment. The corporation may make a notation on any such certificate
or on the records of the corporation relating to any such uncertificated shares
that such demand has been made. If shares with respect to which notation has
been so made shall be transferred, each new certificate issued therefor or the
records relating to any transferred uncertificated shares shall bear a similar
notation, together with the name of the original dissenting holder or owner of
such shares. A transferee of such shares shall not acquire by such transfer any
rights in the corporation other than those that the original dissenter had
after making demand for payment of their fair value.
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(S)1578. ESTIMATE BY DISSENTER OF FAIR VALUE OF SHARES.
(A) GENERAL RULE.--If the business corporation gives notice of its estimate
of the fair value of the shares, without remitting such amount, or remits
payment of its estimate of the fair value of a dissenter's shares as permitted
by section 1577(c) (relating to payment of fair value of shares) and the
dissenter believes that the amount stated or remitted is less than the fair
value of his shares, he may send to the corporation his own estimate of the
fair value of the shares, which shall be deemed a demand for payment of the
amount or the deficiency.
(B) EFFECT OF FAILURE TO FILE ESTIMATE.--Where the dissenter does not file
his own estimate under subsection (a) within 30 days after the mailing by the
corporation of its remittance or notice, the dissenter shall be entitled to no
more than the amount stated in the notice or remitted to him by the
corporation.
(S)1579. VALUATION PROCEEDINGS GENERALLY.
(A) GENERAL RULE.--Within 60 days after the latest of:
(1) effectuation of the proposed corporate action;
(2) timely receipt of any demands for payment under section 1575
(relating to notice to demand payment); or
(3) timely receipt of any estimates pursuant to section 1578 (relating to
estimate by dissenter of fair value of shares);
if any demands for payment remain unsettled, the business corporation may file
in court an application for relief requesting that the fair value of the shares
be determined by the court.
(B) MANDATORY JOINDER OF DISSENTERS.--All dissenters, wherever residing,
whose demands have not been settled shall be made parties to the proceeding as
in an action against their shares. A copy of the application shall be served on
each such dissenter. If a dissenter is a nonresident, the copy may be served on
him in the manner provided or prescribed by or pursuant to 42 Pa.C.S. Ch. 53
(relating to bases of jurisdiction and interstate and international procedure).
(C) JURISDICTION OF THE COURT.--The jurisdiction of the court shall be
plenary and exclusive. The court may appoint an appraiser to receive evidence
and recommend a decision on the issue of fair value. The appraiser shall have
such power and authority as may be specified in the order of appointment or in
any amendment thereof.
(D) MEASURE OF RECOVERY.--Each dissenter who is made a party shall be
entitled to recover the amount by which the fair value of his shares is found
to exceed the amount, if any, previously remitted, plus interest.
(E) EFFECT OF CORPORATION'S FAILURE TO FILE APPLICATION.--If the corporation
fails to file an application as provided in subsection (a), any dissenter who
made a demand and who has not already settled his claim against the corporation
may do so in the name of the corporation at any time within 30 days after the
expiration of the 60-day period. If a dissenter does not file an application
within the 30-day period, each dissenter entitled to file an application shall
be paid the corporation's estimate of the fair value of the shares and no more,
and may bring an action to recover any amount not previously remitted.
(S)1580. COSTS AND EXPENSES OF VALUATION PROCEEDINGS.
(A) GENERAL RULE.--The costs and expenses of any proceeding under section
1579 (relating to valuation proceedings generally), including the reasonable
compensation and expenses of the appraiser appointed by the court, shall be
determined by the court and assessed against the business corporation except
that any part of the costs and expenses may be apportioned and assessed as the
court deems appropriate against all or some of the dissenters who are parties
and whose action in demanding supplemental payment under section 1578 (relating
to estimate by dissenter of fair value of shares) the court finds to be
dilatory, obdurate, arbitrary, vexatious or in bad faith.
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(B) ASSESSMENT OF COUNSEL FEES AND EXPERT FEES WHERE LACK OF GOOD FAITH
APPEARS.--Fees and expenses of counsel and of experts for the respective
parties may be assessed as the court deems appropriate against the corporation
and in favor of any or all dissenters if the corporation failed to comply
substantially with the requirements of this subchapter and may be assessed
against either the corporation or a dissenter, in favor of any other party, if
the court finds that the party against whom the fees and expenses are assessed
acted in bad faith or in a dilatory, obdurate, arbitrary or vexatious manner in
respect to the rights provided by this subchapter.
(C) AWARD OF FEES FOR BENEFITS TO OTHER DISSENTERS.--If the court finds that
the services of counsel for any dissenter were of substantial benefit to other
dissenters similarly situated and should not be assessed against the
corporation, it may award to those counsel reasonable fees to be paid out of
the amounts awarded to the dissenters who were benefitted.
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PROXY PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ROBEC, INC.
The undersigned hereby acknowledges receipt of the Notice of Special Meeting of
Shareholders and the accompanying Prospectus/Proxy Statement, and revoking all
prior proxies, appoints Robert H. Beckett and Alexander C. Kramer, Jr., and
each of them acting singly, with full power of substitution, the attorney and
proxy of the undersigned, to represent the undersigned and to vote all the
shares of common stock of Robec, Inc. ("Robec"), which the undersigned is
entitled to vote at the Special Meeting of Shareholders of Robec to be held at
the offices of Robec, Inc., 425 Privet Road, Horsham, PA 19044 on September 27,
1995 (the "Meeting Date"), at 10:00 a.m., local time, and at any and all
adjournments thereof, with all of the powers the undersigned would possess if
personally present, as follows:
FOR AGAINST ABSTAIN
[_] [_] [_] The proposal to approve and adopt the Plan of Merger (the
"Plan of Merger") pursuant to which (a) RI Acquisition,
Inc., a Pennsylvania corporation and a wholly-owned
subsidiary of AmeriQuest Technologies, Inc., a Delaware
corporation ("AmeriQuest"), will be merged with and into
Robec (the "Merger"), with Robec surviving the Merger as a
wholly-owned subsidiary of AmeriQuest and (b) each share
of common stock, par value $.01 per share, of Robec that
is issued and outstanding on the effective date of the
Merger, other than shares held by AmeriQuest or by
shareholders who perfect their statutory dissenters
rights, will be converted automatically into the right to
receive .82944 shares of the common stock, par value $.01
per share, of AmeriQuest ("AmeriQuest Common Stock"),
provided, however, that in the event that the lesser of
(A) the mean trading price of AmeriQuest Common Stock on
the New York Stock Exchange on the fourth trading day
prior to the Meeting Date or (B) the average of the mean
trading prices of AmeriQuest Common Stock on the New York
Stock Exchange for each of the 20 trading days prior to
the fourth trading day prior to the Meeting Date (the
lesser of the amounts determined pursuant to (A) or (B)
above, the "Market Price"), is less than $3.00 per share,
the Applicable Fraction shall be equal to the sum of (A)
the product of (i) .63075 multiplied by (ii) a quotient,
the numerator of which is $3.00 and the denominator of
which is the Market Price plus (B) .19869.
THE BOARD RECOMMENDS A VOTE FOR THE ABOVE PROPOSAL.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE PROXY WILL BE VOTED FOR THE ABOVE PROPOSAL.
If you expect to attend the Meeting, please check this box [_].
Please sign exactly as name appears on this Proxy. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person. The signer(s) hereby revokes all proxies heretofore given by
the signer(s) to vote at said meeting or any adjournments thereof.
Dated:_________, 1995
_________________________________
Signature
_________________________________
Signature if held jointly
PLEASE SIGN, DATE AND PROMPTLY RETURN THIS PROXY FORM USING THE ENCLOSED
ENVELOPE.
