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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 7, 1997
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Noel Group. Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-19737 13-2649262
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
667 Madison Avenue. New York, New York 10021
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(Address of principal executive offices) (zip code)
Registrant's Telephone Number, including Area Code: (212) 371-1400
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N/A
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On February 7, 1997, pursuant to a Stock Purchase Agreement (the
"Agreement") dated as of December 18, 1996, by and among Automatic Data
Processing, Inc. ("ADP"), Noel Group, Inc. ("Noel") and HealthPlan Services
Corporation ("HealthPlan"), Noel sold to ADP 1,320,000 of the shares of common
stock, par value $.01 per share ("HealthPlan Common Stock"), of HealthPlan held
by Noel (the "Shares") at a price of $20 per Share or $26,400,000 in the
aggregate.
The Agreement provides that ADP will not, nor will it permit any
of its affiliates or associates to, acquire additional shares of HealthPlan,
during a specified period, if such acquisition would result in ADP owning
voting securities having 10% or more of the aggregate voting power of
HealthPlan's capital stock, or take certain other actions regarding control of
HealthPlan, unless in each case specifically invited to do so by HealthPlan's
Board of Directors. The Agreement grants ADP certain registration rights with
respect to the Shares and grants HealthPlan a right of first refusal for a
certain period with respect to the sale of any of the Shares by ADP other than
through the facilities of a national securities exchange or a similar public
sale.
In addition, pursuant to the Agreement, other than a
distribution to Noel's shareholders (or to a trust for the benefit of such
shareholders) Noel agreed not to transfer its remaining shares of HealthPlan
Common Stock prior to September 30, 1997.
The foregoing description of the Agreement does not purport to
be complete. For further information, reference is made to the copy of the
Agreement filed as Exhibit 2.1 hereto.
The Shares represent approximately 9% of HealthPlan's
outstanding Common Stock and the sale of the Shares reduces Noel's holding in
HealthPlan to approximately 29%.
There is no material relationship between ADP and Noel or any of
the Noel's affiliates, any director or officer of Noel or any associate of any
such officer or director.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired. Not
applicable.
(b) Pro forma financial information. Not applicable.
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(c) Exhibits
<TABLE>
<C> <S>
2.1 Stock Purchase Agreement dated as of December 18, 1996 by and among
Automatic Data Processing, Inc., a Delaware corporation, Noel Group,
Inc., a Delaware corporation, and HealthPlan Services Corporation, a
Delaware corporation.
</TABLE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
NOEL GROUP, INC.
(Registrant)
Dated: February 20, 1997 By: /s/ Todd K. West
_________________________
Todd K. West
Vice President-Finance
and Secretary
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================================================================================
STOCK PURCHASE AGREEMENT
by
and
among
AUTOMATIC DATA PROCESSING, INC.,
NOEL GROUP, INC.
and
HEALTHPLAN SERVICES CORPORATION
================================================================================
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TABLE OF CONTENTS
Page
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ARTICLE I PURCHASE AND SALE..........................................2
1.1 Purchase and Sale of Shares................................2
1.2 Purchase Price.............................................2
1.3 Closing....................................................2
ARTICLE II CONDITIONS TO CLOSING......................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER...................6
3.1 Organization...............................................6
3.2 Authority Relative to this Agreement.......................6
3.3 Consents and Approvals; No Violations......................6
3.4 Title......................................................7
3.5 Finders and Investment Bankers.............................7
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER.................8
4.1 Organization...............................................8
4.2 Authority Relative to this Agreement.......................8
4.3 Consents and Approvals; No Violations......................8
4.4 Purchase for Own Account...................................9
4.5 Finders and Investment Bankers.............................9
ARTICLE V REPRESENTATIONS AND WARRANTIES
OF THE COMPANY............................................10
5.1 Organization..............................................10
5.2 Authority Relative to this Agreement......................10
5.3 Consents and Approvals; No Violations.....................10
ARTICLE VI CERTAIN COVENANTS OF PURCHASER.............................11
6.1 Restrictions on Certain Actions by Purchaser..............11
6.2 Standstill Period.........................................14
6.3 Dispositions in Certain Events............................14
6.4 Company's First Offer Rights..............................15
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Page
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ARTICLE VII CERTAIN COVENANTS OF THE COMPANY.........................16
7.1 Certain Actions...........................................16
7.2 First Refusal Rights......................................16
7.3 Percentage Maintenance Right..............................17
7.4 Board Representation......................................18
7.5 Registration Rights.......................................18
A. Shelf Registration.....................................18
B. Piggyback Registration on Underwritten Offerings.......21
C. Priority in Piggyback Offerings; Holdbacks.............23
D. Registration Procedures................................25
E. Preparation; Reasonable Investigation..................29
F. Registration Expenses..................................29
G. Indemnification and Contribution.......................29
H. Registration Rights to Others..........................34
I. Rule 144..............................................35
J. Definitions...........................................35
ARTICLE VIIICERTAIN COVENANTS OF SELLER...............................36
8.1 No Sale Agreement.....................................36
ARTICLE IX MISCELLANEOUS.............................................37
9.1 Termination...........................................37
9.2 Amendment and Modification............................37
9.3 Notices...............................................37
9.4 Assignment............................................38
9.5 Governing Law.........................................39
9.6 Counterparts..........................................39
9.7 Expenses..............................................39
9.8 Entire Agreement......................................39
9.9 No Third Party Beneficiaries..........................40
9.10 Survival of Warranties...............................40
9.11 Interpretation.......................................40
9.12 Adjustments..........................................40
9.13 Public Announcements.................................40
ii
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of December 18, 1996, by and
among AUTOMATIC DATA PROCESSING, INC., a Delaware corporation ("Purchaser"),
NOEL GROUP, INC., a Delaware corporation ("Seller"), and HEALTHPLAN SERVICES
CORPORATION, a Delaware corporation (the "Company").
Seller owns shares of common stock, par value $.01 per share, of the
Company (the "Common Stock"), namely 5,595,846 shares. Purchaser wishes to
purchase from Seller, and Seller wishes to sell to Purchaser, 1,320,000 shares
of Common Stock (the "Shares") upon the terms and subject to the conditions set
forth herein.
As a result of such sale, Purchaser will own a significant block of
Common Stock. The Company has requested that Purchaser consent to certain
standstill agreements with respect to the purchase of additional shares of
Common Stock, which Purchaser is willing to do provided the Company grants
certain rights to Purchaser.
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
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2
ARTICLE I
PURCHASE AND SALE
1.1 Purchase and Sale of Shares. Subject to the terms and conditions
set forth herein, Seller agrees that it will sell to Purchaser, and Purchaser
agrees that it will purchase from Seller, at the Closing (as defined below),
1,320,000 shares of Common Stock, for the purchase price set forth in Section
1.2 below, which purchase price shall be payable to Seller in cash by wire
transfer of immediately available funds to an account designated by Seller.
1.2 Purchase Price. The purchase price for each Share (the "Per
Share Purchase Price") shall be an amount equal to $20. The aggregate purchase
price for the Shares is referred to herein as the "Purchase Price."
1.3 Closing. The purchase of the Shares shall take place at a
closing (the "Closing") to be held at 10:00 a.m. on the third business day after
the conditions to closing under Article II have been satisfied (or waived as
provided in such Article) at the offices of Paul, Weiss, Rifkind, Wharton &
Garrison, 1285 Avenue of the Americas, New York, New York 10019-6064, or at such
other time and place as the parties may mutually agree. The date on which the
Closing occurs is referred to herein as the "Closing Date." At the Closing,
Seller shall deliver to Purchaser duly executed certificates representing the
Shares registered in the name of Purchaser, free and clear of any lien, claim or
other encumbrance, and Purchaser shall purchase the Shares for the Purchase
Price.
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3
ARTICLE II
CONDITIONS TO CLOSING
2.1 The obligation of Purchaser to purchase the Shares at the
Closing and to perform any other of its obligations hereunder shall be subject
to the satisfaction or waiver of the following conditions on or prior to the
Closing Date:
(i) the representations and warranties of Seller and the
Company contained herein shall be true and correct in all material
respects at and as of the Closing Date as if made at and as of such date,
and Purchaser shall have received a certificate of an officer of Seller
and a certificate of an officer of the Company to such effect;
(ii) Seller and the Company shall each have performed and
complied with their respective agreements set forth herein that are
required to be performed or complied with by them on or prior to the
Closing Date, and Purchaser shall have received a certificate of an
officer of Seller and a certificate of an officer of the Company to such
effect;
(iii) all consents, approvals or other actions by, or notices
to, or filings with, any governmental authority or any other person or
entity, necessary or required in connection with the execution, delivery
or performance by Seller and the Company of this Agreement and the
transactions contemplated hereby shall have been obtained and be in full
force and effect, and Purchaser shall have been furnished with appropriate
evidence thereof;
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4
(iv) the Company shall have conducted its business in the
ordinary course from the date hereof to the Closing Date;
(v) prior to the Closing Date, (a) trading in securities
generally on the New York Stock Exchange shall not have been materially
suspended or materially limited or minimum or maximum prices shall not
have been generally established on such exchange (which shall not include
trading suspensions or limitations resulting from the operation of General
Rules 80A and 80B of such Exchange, as amended or supplemented), or
additional material governmental restrictions, not in force on the date of
this Agreement, shall not have been imposed upon trading in securities
generally by such exchange or by order of the Securities and Exchange
Commission or any court or other governmental authority, (b) a general
banking moratorium shall not have been declared by either federal or New
York State authorities and (c) a material adverse change in the financial
or securities markets in the United States which materially adversely
affects the market for the Shares or any declaration by the United States
of a national emergency or war shall not have occurred;
(vi) Purchaser shall have received an opinion of counsel to
Seller covering the matters described in Sections 3.1, 3.2, 3.3 and 3.4;
(vii) no material adverse change shall have occurred from the
date hereof to the Closing Date with respect to the assets, business,
properties, operations or financial condition of the Company and its
subsidiaries taken as a whole;
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5
(viii) he waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), shall have expired
or been terminated; and
(ix) the Company shall not have adopted a "poison pill,"
created a staggered board of directors or issued stock having "super
voting rights," or agreed to do any of the foregoing.
2.2 The obligation of Seller to sell the Shares and to perform any
other of its obligations hereunder shall be subject to the satisfaction or
waiver of the following conditions on or prior to the Closing Date:
(i) the representations and warranties of Purchaser contained
herein shall be true and correct in all material respects at and as of the
Closing Date as if made at and as of such date, and Seller shall have
received a certificate of an officer of Purchaser and a certificate of an
officer of the Company to such effect;
(ii) Purchaser and the Company shall each have performed and
complied with their respective agreements set forth herein that are
required to be performed or complied with by them on or prior to the
Closing Date, and Seller shall have received a certificate of an officer
of Purchaser and a certificate of an officer of the Company to such
effect;
(iii) all consents, approvals or other actions by, or notices
to, or filings with, any governmental authority or any other person or
entity, necessary or required in connection with the execution, delivery
or performance by Purchaser and the Company of this Agreement and the
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6
transactions contemplated hereby shall have been obtained and be in full
force and effect, and Seller shall have been furnished with appropriate
evidence thereof;
(iv) Seller shall have received an opinion of counsel to
Purchaser covering the matters described in Sections 4.1, 4.2 and 4.3;
(v) the waiting period under the HSR Act shall have expired or
been terminated.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
3.1 Organization. Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation.
3.2 Authority Relative to this Agreement. Seller has full corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all requisite corporate action on the part of Seller. This
Agreement has been duly and validly executed and delivered by Seller and
constitutes a legal, valid and binding agreement of Seller enforceable against
Seller in accordance with its terms.
3.3 Consents and Approvals; No Violations. Other than a filing
pursuant to the HSR Act (which Seller shall make, if required, as soon as
practicable
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7
after the date hereof, if required), and any filings under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), no consent, approval,
authorization or filing with any governmental authority is required in
connection with the execution or delivery by Seller of this Agreement or the
consummation by Seller of the trans actions contemplated hereby. Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby nor compliance by Seller with any of the
provisions hereof will (i) conflict with or result in any breach of any
provision of the certificate of incorporation or by-laws of Seller, (ii) require
any consent, approval or notice under, or conflict with or result in a violation
or breach of, or constitute (with or without notice or lapse of time or both) a
default under, any material agreement to which Seller is a party or by which it
is bound or (iii) violate any order, award, decree, law, statute, rule or
regulation applicable to Seller.
3.4 Title. Seller has good title to and is the record and beneficial
owner of the Shares, free and clear of all liens, pledges, security interests,
claims, charges, restrictions on transferability or any other encumbrances or
title defects whatsoever.
3.5 Finders and Investment Bankers. Seller has not employed any
broker or finder or incurred any liability for any brokerage fees, commissions
or finders' fees in connection with the transactions contemplated hereby for
which Purchaser or the Company shall be liable.
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8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller and the Company as
follows:
4.1 Organization. Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation.
4.2 Authority Relative to this Agreement. Purchaser has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all requisite corporate action on the part
of Purchaser. This Agreement has been duly and validly executed and delivered by
Purchaser and constitutes its legal, valid and binding agreement, enforceable
against it in accordance with its terms.
4.3 Consents and Approvals; No Violations. Other than a filing
pursuant to the HSR Act (which Purchaser shall make as soon as practicable after
the date hereof and with respect to which Purchaser shall respond promptly to
requests for additional information or similar requests received from the
Federal Trade Commission or the Department of Justice), no consent, approval,
authorization or filing with any governmental authority is required in
connection with the execution or delivery by Purchaser of this Agreement or the
consummation by Purchaser of the transactions contemplated hereby. Neither the
execution and delivery of this
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9
Agreement nor the consummation of the transactions contemplated hereby nor
compliance by Purchaser with any of the provisions hereof will (i) conflict with
or result in any breach of any provision of the certificate of incorporation or
by-laws of Purchaser, (ii) require any consent, approval or notice under, or
conflict with or result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default under, any material agreement
to which Purchaser is a party or by which it is bound or (iii) violate any
order, award, decree, law, statute, rule or regulation applicable to Purchaser.
4.4 Purchase for Own Account. The Shares to be acquired by Purchaser
are being acquired for its own account and not with a view to distributing or
reselling such securities or any part thereof in any transaction that will be in
violation of the securities laws of the United States of America, or any state
thereof, without prejudice, however, to the rights of Purchaser at all times to
sell or otherwise dispose of all or any part of the Shares under an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or under an exemption therefrom. Purchaser is an "accredited
investor" as defined in the rules promulgated under the Securities Act.
4.5 Finders and Investment Bankers. Purchaser has not employed any
broker or finder or incurred any liability for any brokerage fees, commissions
or finder's fees in connection with the transactions contemplated hereby for
which Seller or the Company will be liable.
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10
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Purchaser and Seller as
follows:
5.1 Organization. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation.
5.2 Authority Relative to this Agreement. The Company has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all requisite corporate action on the part
of the Company. This Agreement has been duly and validly executed and delivered
by the Company and constitutes a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its terms.
5.3 Consents and Approvals; No Violations. Other than a filing
pursuant to the HSR Act (which the Company shall make as soon as practicable
after the date hereof), no consent, approval, authorization or filing with any
governmental authority is required in connection with the execution or delivery
by the Company of this Agreement or the consummation by the Company of the
transactions contem plated hereby. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby nor
compliance by the
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11
Company with any of the provisions hereof will (i) conflict with or result in
any breach of any provision of the certificate of incorporation or by-laws of
the Company, (ii) require any consent, approval or notice under, or conflict
with or result in a violation or breach of, or constitute (with or without
notice or lapse of time or both) a default under, any material agreement to
which the Company is a party or by which it is bound or (iii) violate any order,
award, decree, law, statute, rule or regulation applicable to the Company.
ARTICLE VI
CERTAIN COVENANTS OF PURCHASER
6.1 Restrictions on Certain Actions by Purchaser. Purchaser agrees
that during the Standstill Period (as defined below) it will not, nor will it
permit any of its affiliates or associates, directly or indirectly, unless in
any such case specifically invited in writing to do so by the Board of Directors
of the Company, to:
(i) acquire, offer to acquire, or agree to acquire, whether by
purchase, by joining a partnership, limited partnership, syndicate or other
"group" (as such term is used in Section 13(d) of the Exchange Act), by acting
in concert with others or otherwise (any such act, to "acquire"), any securities
of the Company entitled to vote, or securities convertible into or exercisable
or exchangeable for such securities (collectively, "Restricted Securities") if
such acquisition would result in Purchaser owning voting securities having 10%
or more of the aggregate voting power of the Company's capital stock (such
percentage to be determined based on publicly-available filings made by the
Company);
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12
(ii) participate in the formation, or encourage the formation,
of any "person" (as such term is used in Section 13(d) of the Exchange Act)
which owns or seeks to acquire beneficial ownership or otherwise acts in respect
of Restricted Securities;
(iii) make, or in any way participate in, directly or
indirectly, any "solicitation" of "proxies" (as such terms are defined or used
in Regulation 14A under the Exchange Act) or become a "participant" in any
"election contest" (as such terms are defined or used in Rule 14a-11 under the
Exchange Act) with respect to the Company;
(iv) initiate, propose or otherwise solicit other stockholders
of the Company for the approval of one or more stockholder proposals with
respect to the Company or induce or attempt to induce any other person to
initiate any stockholder proposal;
(v) seek election to, or seek to place a representative on,
the Board of Directors of the Company, other than pursuant to the terms of this
Agreement, or seek the removal of any member of the Board of Directors, other
than any such action by Arthur F. Weinbach acting in his capacity as a member of
the Board of Directors;
(vi) call or seek to have called any meeting of the
stockholders of the Company, other than any such action by Arthur F. Weinbach
acting in his capacity as a member of the Board of Directors;
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13
(vii) deposit any Restricted Securities in a voting trust or
subject them to a voting agreement or other agreement or arrangement with
respect to the voting of such Restricted Securities;
(viii) other than any such action by Arthur F. Weinbach acting
in his capacity as a member of the Board of Directors, otherwise act, directly
or indirectly, alone or in concert with others, to seek to control the
management, Board of Directors, policies or affairs of the Company, or solicit,
propose, seek to effect or negotiate with any other person with respect to any
form of business combination transaction with the Company or any affiliate
thereof or any restructuring, recapitalization or similar transaction with
respect to the Company or any affiliate thereof, solicit, make or propose to
encourage or negotiate with any other person with respect to, or announce an
intent to make, any tender offer or exchange offer for any Restricted
Securities, or publicly disclose an intent, purpose, plan or proposal with
respect to the Company or any Restricted Securities inconsistent with the
provisions of this Agreement, including an intent, purpose, plan or proposal
that is conditioned on or would require the Company to waive the benefit of or
amend any provision of this Agreement, or assist, participate in, facilitate,
encourage or solicit any effort or attempt by any person to do or seek to do any
of the foregoing;
(ix) request the Company (or its directors, officers,
employees or agents), directly or indirectly, to amend or waive any provision of
this Section 6.1; or
(x) encourage or render advice to or make any recommendation
or proposal to any person or other entity to engage in any of the actions
covered by this Section 6.1.
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14
6.2 Standstill Period. The Standstill Period shall mean the period
commencing on the date hereof and ending on the earliest to occur of any of the
following events or dates:
(i) the failure of the Closing to occur on or prior to March
31, 1997;
(ii) December 31, 1997;
(iii) the Company shall have breached in any material respect
any of its obligations under Article VII;
(iv) the Company shall have commenced negotiations with a
third party regarding a merger with, sale of all or substantially all of the
Company's assets to, or other combination with, such third party, or shall have
entered into an agreement in principle to effect any such transaction;
(v) the Board of Directors of the Company shall have publicly
announced that the Company is exploring alternatives to maximize shareholder
value (which alternatives may include, but shall not be limited to, a possible
sale of the Company); or
(vi) a bona fide third party purchaser (a "Third Party") shall
have commenced, or announced its intention to commence, a tender or exchange
offer for the outstanding voting securities of the Company which, if successful,
would result in such Third Party, together with its affiliates and associates,
owning 50% or more of such securities.
6.3 Dispositions in Certain Events. If Purchaser or any direct or
indirect subsidiary of Purchaser owns or acquires any Restricted Securities in
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15
violation of this Agreement, it will immediately dispose of, or immediately
cause the disposition of, such Restricted Securities to persons which are not
the Purchaser or affiliates or associates thereof in a manner not prohibited by
the terms of this Agreement, and if, to the knowledge of Purchaser, any other
affiliate or associate of Purchaser owns or acquires any Restricted Securities
in violation of this Agreement, Purchaser will immediately use its best efforts
to cause such a disposition of such Restricted Securities; provided, however,
that the Company may also pursue any other available remedy to which it may be
entitled as a result of such violation.
6.4 Company's First Offer Rights. Purchaser agrees that, during the
period commencing on the date of this Agreement and ending upon the termination
of the Standstill Period, it will not sell, transfer or otherwise dispose of any
of the Shares, other than through the facilities of a national securities
exchange or a similar public sale, unless Purchaser shall have first offered
such Shares to the Company (the "Purchaser Offer"), for cash, by written notice
to the Company. Such written notice shall specify the number of Shares offered
to be transferred and the terms and conditions of the Purchaser Offer. During a
period of 10 business days after such written notice is received by the Company,
the Company shall have the exclusive right to accept the Purchaser Offer to
purchase the Shares covered thereby at the cash price and otherwise upon the
terms and conditions of the Purchaser Offer. If the Company does not exercise
its right of first offer hereunder or if the Company fails to purchase such
Shares within 20 business days after it has accepted the Purchaser Offer (other
than by reason of Purchaser's failure to comply with its obligations under any
purchase agreement with respect thereto), Purchaser shall be
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16
free, for a period of 90 days, to sell such Shares to any other party at the
same or higher cash price and upon the same terms and conditions specified in
the Purchaser Offer notice.
ARTICLE VII
CERTAIN COVENANTS OF THE COMPANY
7.1 Certain Actions. The Company agrees that, during the period
commencing on the date of this Agreement and ending on December 31, 1997,
without the prior written consent of Purchaser, it will not take any action that
could interfere with "pooling-of-interests" accounting.
7.2 First Refusal Rights. The Company agrees that, during the period
commencing on the date of this Agreement and ending on May 31, 1999, it will not
sell, transfer or otherwise dispose of the Unemployment Compensation and Workers
Compensation businesses of its subsidiary, Harrington Service Corp., or any
material part thereof, unless (i) such disposition is for cash to a bona fide
third party purchaser (a "Third Party") and (ii) the Company shall have first
given Purchaser a right of first refusal to acquire such businesses or part
thereof as provided in this Section 7.2. If the Company has a bona fide written
offer from a Third Party to purchase such businesses or any material part
thereof (the "Offered Interest") and the Company wishes to accept the offer, the
Company, prior to accepting such offer, shall first offer the Offered Interest
to Purchaser (the "Company Offer"), by written notice, at the same price and
upon the same terms offered by the Third Party. Such written notice shall
describe the Offered Interest to be transferred, the terms and
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17
conditions on which such transfer is proposed to be made, the identity of the
Third Party, and shall be accompanied by a copy of the Third Party offer. During
a period of 60 days after such written notice is received by Purchaser,
Purchaser shall have the exclusive right to accept the Company Offer to purchase
the Offered Interest at the cash price and otherwise upon the terms and
conditions of the Company Offer. If Purchaser does not exercise its right of
first refusal hereunder or if Purchaser fails to purchase the Offered Interest
within 90 days after it has accepted the Company Offer (other than by reason of
the Company's failure to comply with its obligations under any purchase
agreement with respect thereto), the Company shall be free, for a period of 90
days, to sell the Offered Interest to the Third Party; provided that the terms
and conditions for the sale to the Third Party may not be renegotiated or
modified unless the Offered Interest has first been offered to Purchaser upon
the modified terms and conditions as provided in this Section 7.2. The
restrictions in this Section 7.2 shall not apply if the Third Party Offer is
received by the Company at such time, if any, that Purchaser owns less than 50%
of the Shares acquired by it on the Closing Date.
7.3 Percentage Maintenance Right. In the event the Company, during
the period commencing on the date of this Agreement and ending on December 31,
1997, intends to sell or issue Common Stock, or securities exchangeable or
exercisable into Common Stock, for cash, the Company shall promptly notify
Purchaser and shall offer Purchaser the right to purchase Common Stock or such
securities, concurrently with such sale or issuance, equal to that amount of
Common Stock or such securities which will permit Purchaser to maintain its
percentage equity ownership of the Company immediately prior to such sale or
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18
issuance, at the same net price received by the Company as consideration for the
sale or issuance of such Common Stock or securities. The rights specified in
this Section 7.3 shall not apply at such time, if any, that Purchaser has sold
Shares in excess of 1% of the Company's Common Stock then outstanding or such
greater amount but only to the extent such greater amount was sold other than
for the sole purpose of preserving the ability of Purchaser to use
"pooling-of-interests" accounting in a combination with the Company (the sale of
such Shares being referred to herein as the "Restriction Termination Event").
7.4 Board Representation. During the period commencing on the
Closing Date and ending upon the occurrence of the Restriction Termination
Event, the Company shall use its best efforts to cause Arthur F. Weinbach to be
nominated as a director of the Company (provided that at the time of such
nomination he has consented to serve in such capacity). Such efforts shall
include, without limitation, the calling of a special meeting of the Board of
Directors of the Company as soon as practicable after the Closing Date to elect
Arthur F. Weinbach as a director of the Board.
7.5 Registration Rights. Capitalized terms used in this Section 7.5
and not otherwise defined shall have the respective meanings given them in
Paragraph J below.
A. Shelf Registration.
(a) The Company shall cause to be filed not later than
15 days after the date hereof a shelf registration statement pursuant to
Rule 415 promulgated under the Securities Act (a "Shelf Registration")
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19
providing for the sale by Purchaser of all of the Shares (which term, as
used in this Section 7.5, shall mean the Shares, together with (i) any
securities of the Company issued or issuable with respect to the Shares by
way of a dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
antidilution protection or otherwise and (ii) any securities of the
Company issued to Purchaser pursuant to Section 7.3), and shall use its
best efforts to have the Shelf Registration declared effective by the
Commission as soon as practicable. The Company agrees to use its
reasonable best efforts to keep the Shelf Registration continuously
effective until the third anniversary of the Closing Date or such shorter
period which will terminate when all of the Shares have been sold pursuant
to the Shelf Registration. The Company further agrees, if necessary, to
supplement or amend the Shelf Registration, if required by the rules or
regulations applicable to the registration form used by the Company for
such Shelf Registration, by the Securities Act or any other rules and
regulations thereunder for shelf registration, and the Company agrees to
furnish to Purchaser copies of any such supplement or amendment promptly
after its being issued or filed with the Commission. The Company further
agrees to promptly supplement or amend the Shelf Registration, or to file
an additional shelf registration statement, to register for sale any
securities issued to Purchaser pursuant to Section 7.3. The Shelf
Registration shall not be deemed to be effective if, after it has become
effective, such registration is interfered with by any stop order,
injunction or other order or requirement of
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20
the Commission or other governmental agency or court for any reason not
attributable to actions taken by Purchaser.
(b) If, at any time during which the Company has the
obligation to keep effective the Shelf Registration contemplated by
Section 7.5(A)(a) hereof, the Company becomes aware of the happening of
any event or discovers any facts during the period such Shelf Registration
is effective that (i) any statement made in such Shelf Registration or the
related prospectus is untrue in any material respect or (ii) causes such
Shelf Registration or the related prospectus to omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, then the Company
will use its reasonable efforts to promptly prepare a supplement or
post-effective amendment to such Shelf Registration or the related
prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to Purchaser,
such prospectus will not contain at the time of such delivery any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading. The Company agrees to notify Purchaser to
suspend use of the prospectus as promptly as practicable after an
appropriate officer or employee of the Company becomes aware of the
occurrence of such an event, and Purchaser hereby agrees to suspend use of
the prospectus until the Company has amended or supplemented the
prospectus to correct such misstatement or omission or has advised
Purchaser that use of such prospectus
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21
may be resumed. At such time as public disclosure is otherwise made or the
Company determines that such disclosure is not necessary, in each case to
correct any misstatement of a material fact, or to include any omitted
material fact, or the Company otherwise determines that use of such
prospectus may be resumed, the Company agrees to promptly notify Purchaser
of such determination and (if applicable) to furnish Purchaser such
numbers of copies of the prospectus, as amended or supplemented, as
Purchaser may reasonably request.
B. Piggyback Registration on Underwritten Offerings.
(a) If the Company at any time proposes to register any
of its securities under the Securities Act, whether or not pursuant to
registration rights granted to other holders of its securities and whether
or not for sale for its own account, and such securities are to be
distributed by or through one or more underwriters, the Company shall give
prompt written notice to Purchaser of its intention to do so and of
Purchaser's rights under this Paragraph B, which notice, in any event,
shall be given at least 15 days prior to the filing of a registration
statement with respect to such proposed registration. Upon the written
request of Purchaser made within 10 days after the receipt of any such
notice, which request shall specify the number of Shares intended to be
disposed of by Purchaser and the minimum offering price per share at which
Purchaser is willing to sell such Shares, the Company shall, subject to
Paragraph C(a), use its best efforts to (x) effect the registration under
the Securities Act of all of the Shares which the Company
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22
has been so requested to register by Purchaser and (y) arrange for such
underwriters to include all of such Shares among the securities of the
Company to be distributed by such underwriters. Promptly following the
setting of the price at which such Shares are to be sold, the Company
shall advise Purchaser of such price, and if such price is below the
minimum price which Purchaser shall have indicated to be acceptable,
Purchaser shall then have the right to withdraw its request to have its
Shares included in such registration statement, by delivery of written
notice of such withdrawal to the Company promptly (but in no event more
than one hour) following its being advised of such price, without
prejudice to the rights of Purchaser to include any Shares in any future
registration (or registrations) pursuant to this Paragraph B. If at any
time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine
for any reason not to register or to delay registration of such
securities, the Company shall give written notice of such determination to
Purchaser and (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Shares in connection with such
registration (but not from any obligation of the Company to pay the
Registration Expenses in connection therewith), without prejudice,
however, to the rights of Purchaser to include any Shares in any future
registration (or registrations) pursuant to this Paragraph B and (ii) in
the case of a
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23
determination to delay registering, shall be permitted to delay
registering any Shares for the same period as the delay in registering
such other securities.
(b) Purchaser shall be a party to the underwriting
agreement between the Company and such underwriters and Purchaser, at its
option, may require that any or all of the representations and warranties
by, and the other agreements on the part of, the Company to and for the
benefit of such underwriters shall also be made to and for the benefit of
Purchaser. Purchaser shall not be required to make any representation or
warranty to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding Purchaser, the
ownership of the Shares and Purchaser's intended method of distribution.
C. Priority in Piggyback Offerings; Holdbacks.
(a) The obligations of the Company under Paragraph B
shall be subject to the following. If the managing underwriter of such
underwritten offering shall advise the Company in writing (with a copy to
Purchaser) that if all of the Shares requested to be included in such
registration were to be so included, in its opinion, the number and type
of securities proposed to be included in such registration would exceed
the number and type of securities which could be sold in such offering
within a price range acceptable to the Company (such writing to state the
basis of such opinion and the approximate number and type of securities
which may be included in such offering without such effect), then the
Company shall include in such registration, to the extent of the number
and type of securities which the
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24
Company is so advised can be sold in such offering (i) first, the
securities that are required to be given first priority pursuant to the
provisions of Section 3(b)(i) of that certain Registration Rights
Agreement, dated as of July 1, 1996, among the Company and the
stockholders named therein (the "Harrington Agreement"), a copy of which
is attached hereto as Exhibit 1, (ii) second, securities that the Company
proposes to issue and sell for its own account (unless the registration
giving rise to the piggyback registration rights of Purchaser hereunder is
as a result of the exercise of demand registration rights by holders of
the Company's securities pursuant to a registration rights agreement with
the Company entered into in accordance with Section 7.5(H) (a "Third Party
Demand Right"), in which case this clause (ii) shall not have effect),
(iii) third, if the registration giving rise to the piggyback registration
rights of Purchaser hereunder is as a result of the exercise of a Third
Party Demand Right, securities of the Company requested to be registered
pursuant to such Third Party Demand Right and (iv) fourth, if the
registration giving rise to the piggyback registration rights of Purchaser
hereunder is not as a result of the exercise of a Third Party Demand
Right, Shares requested to be registered by Purchaser pursuant to
Paragraph B, on a pro rata basis with all other securities of the Company
proposed to be included in such registration in accordance with the number
of shares of Common Stock beneficially owned by Purchaser and the holders
of such other securities.
(b) Holdbacks. Purchaser agrees, if so required by the
managing underwriter, not to effect any public sale or distribution of
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25
securities of the Company of the same class as the securities included in
such registration statement, during the seven days prior to the date on
which any underwritten registration pursuant to Paragraph B has become
effective and the 90 days thereafter. The Company agrees not to effect any
public sale or distribution of its equity securities or securities
convertible into or exchangeable or exercisable for any of such securities
during the seven days prior to and the 90 days after any underwritten
registration pursuant to Paragraph B has become effective, except as part
of such underwritten registration.
D. Registration Procedures. In connection with the Company's
obligation to use its best efforts to effect the registration of the Shares
under the Securities Act as provided in Paragraph A or B of this Section 7.5,
the Company will promptly:
(a) prepare and file with the Commission the requisite
registration statement to effect such registration and thereafter use its
best efforts promptly to cause such registration statement to become
effective;
(b) prepare and file with the Commission such
amendments, post-effective amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and to comply with
the provisions of the Securities Act with respect to the disposition of
all Shares covered by such registration statement until the earlier of (i)
such time as all of the Shares have been disposed of in accordance with
the intended methods of disposition
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26
by Purchaser set forth in such registration statement and (ii) with
respect to the Shelf Registration, three years after the Closing Date and,
with respect to a registration effected pursuant to Paragraph B, 90 days
after the effective date of such registration;
(c) furnish as soon as available to Purchaser such
number of copies of such drafts and final versions of such registration
statement and of each such amendment, post-effective amendment and
supplement thereto (in each case including all exhibits), such number of
copies of such drafts and final versions of the prospectus contained in
such registration statement (including each preliminary prospectus and any
summary prospectus), any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act,
such documents, if any, incorporated by reference in such registration
statement or prospectus, and such other documents, as Purchaser may
reasonably request;
(d) cooperate with Purchaser to facilitate the timely
preparation and delivery of certificates representing Shares to be sold,
which securities shall not bear any restrictive legends and shall be in a
form eligible for deposit with The Depository Trust Company, and enable
the Shares to be in such denominations and registered in such names as
Purchaser may request at least two business days prior to any sale of
Shares;
(e) in the case of an underwritten public offering,
furnish to Purchaser upon request a signed counterpart, addressed to
Purchaser (and the underwriters, if any) of (i) an opinion of counsel for
the Company,
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27
dated the date of the closing under the underwriting agreement), covering
substantially the same matters with respect to such registration statement
(and the prospectus included therein) as shall be covered in the opinion
of counsel for the Company that will be delivered to the underwriters at
such closing;
(f) promptly notify Purchaser, and confirm such advice
in writing, (i) when the prospectus or any prospectus supplement or
post-effective amendment has been filed and, with respect to the
registration statement or any post-effective amendment, when the same has
become effective, (ii) of any request by the Commission for amendments or
supplements to the registration statement or the prospectus or for
additional information, (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the registration statement or
the initiation of any proceedings for that purpose and (iv) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose;
(g) use its reasonable commercial efforts to obtain the
withdrawal of any order suspending the effectiveness of the registration
statement at the earliest possible time;
(h) otherwise comply with all applicable rules and
regulations of the Commission, and make available to its securities
holders, as soon as reasonably practicable, an earnings statement covering
the period of at least twelve months, but not more than eighteen months,
beginning with the
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28
first full calendar month after the effective date of such registration
statement, which earning statement shall satisfy the provisions of Section
11(a) of the Securities Act, and furnish to Purchaser at least ten days
prior to the filing thereof a copy of any amendment or supplement to such
registration statement or prospectus and shall not file any thereof to
which Purchaser shall have reasonably objected on the grounds that such
amendment or supplement does not comply in all material respects with the
requirements of the Securities Act or the rules or regulations thereunder;
(i) provide and cause to be maintained a transfer agent
and a registrar for all Shares covered by such registration statement from
and after a date not later than the effective date of such registration
statement;
(j) use its best efforts (i) to cause all Shares covered
by such registration statement to be listed on the New York Stock Exchange
and on each additional national securities exchange on which similar
securities issued by the Company are then listed, if the listing of such
Shares is then permitted under the rules of such exchange or (ii) if the
listing of such Shares is not then permitted on the New York Stock
Exchange, to secure designation of all such Shares covered by such
registration statement as a NASDAQ "national market system security"
within the meaning of Rule 11Aa2-1 of the Commission or, failing that,
secure NASDAQ authorization for such Shares; and
(k) provide a CUSIP number for all Shares, not later
than the effective date of the applicable registration statement.
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29
E. Preparation; Reasonable Investigation. The Company will
give Purchaser and its counsel the opportunity to participate in the preparation
of each registration statement in which Shares are to be included pursuant to
this Agreement, each prospectus included therein or filed with the Commission,
and each amendment thereof or supplement thereto, and will give each of them
such access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
reasonable opinion of Purchaser or its counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
F. Registration Expenses. The Company will, whether or not any
registration pursuant to this Agreement shall become effective, pay all
Registration Expenses incident to its performance under or compliance with this
Section 7.5 promptly as such Registration Expenses are incurred.
G. Indemnification and Contribution.
(a) The Company will, and hereby does, indemnify and
hold harmless Purchaser and each other Person who participates as an
underwriter in the offering or sale of such securities and each other
Person, if any, who controls Purchaser or any such underwriter within the
meaning of the Securities Act, and their respective directors, officers,
agents, affiliates and controlling persons, against any losses, claims,
damages or liabilities, joint or several, to which Purchaser or
underwriter or any such director, officer, agent, affiliate or controlling
Person may become subject under the Securities
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30
Act or otherwise, including, without limitation, the reasonable fees and
expenses of legal counsel, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened,
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under
the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement
thereto, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made not
misleading, and the Company will reimburse Purchaser or any underwriter
and each such director, officer, agent, affiliate and controlling Person
for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration
statement, any such preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of
Purchaser or any underwriter, as the case may be, specifically stating
that it is for use in the preparation thereof. Such indemnity shall remain
in full force
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31
and effect regardless of any investigation made by or on behalf of
Purchaser or any such director, officer, agent, affiliate or controlling
Person and shall survive the transfer of such securities by Purchaser.
(b) Purchaser will, and hereby does, indemnify and hold
harmless (in the same manner and to the same extent as set forth in
Section 7.5(G)(a)) the Company, and each director and officer of the
Company and each other Person who controls the Company or any such
underwriter within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from
such registration statement, any preliminary prospectus, final prospectus
or summary prospectus, contained therein, or any amendment or supplement
thereto, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company by Purchaser specifically stating
that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement; provided, however, that the liability of such indemnifying
party under this Section 7.5(G)(b) shall be limited to the amount of
proceeds received by such indemnifying party in the offering giving rise
to such liability. Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company or any
such director, officer or controlling Person and shall survive the
transfer of such securities by Purchaser.
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32
(c) Promptly after receipt by an indemnified party of
notice of the commencement of any action or proceeding involving a claim
referred to in clauses (a) or (b) of this Section 7.5(G), such indemnified
party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement
of such action; provided, however, that the failure of any indemnified
party to give notice as provided herein shall not relieve the indemnifying
party of its obligations under the preceding subdivisions of this Section
7.5(G), except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party the indemnifying party shall be
entitled to participate in and, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the
defense thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall be liable for any
settlement of any action or proceeding effected without its written
consent, which consent shall not be unreasonably withheld. No indemnifying
party shall, without the consent of the indemnified party,
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33
which consent shall not be unreasonably withheld, consent to entry of any
judgment or enter into any settlement which does not include as an uncondi
tional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim
or litigation or which requires action other than the payment of money by
the indemnifying party.
(d) Contribution. If the indemnification provided for in
this Section 7.5(G) shall for any reason be held by a court to be
unavailable to an indemnified party under clauses (a) or (b) of this
Section 7.5(G) in respect of any loss, claim, damage or liability, or any
action in respect thereof, then, in lieu of the amount paid or payable
under clauses (a) or (b) of this Section 7.5(G), the indemnified party and
the indemnifying party under clauses (a) or (b) of this Section 7.5(G)
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), in such propor tion as is appropriate to reflect
the relative fault of the Company and Purchaser which resulted in such
loss, claim, damage or liability, or action or proceeding in respect
thereof, with respect to the statements or omissions which resulted in
such loss, claim, damage or liability, or action or proceeding in respect
thereof, as well as any other relevant equitable considerations, provided,
that in no event shall the contribution by Purchaser exceed the amount of
proceeds received by Purchaser and Purchaser shall not be required to
contribute any amount in excess of the amount Purchaser would have been
required to pay to
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34
an indemnified party if the indemnity under clause (a) of this Section
7.5(G) was available. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. No Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim
effected without such Person's consent, which consent shall not be
unreasonably withheld.
(e) Indemnification and contribution similar to that
specified in the preceding subdivisions of this Section 7.5(G) (with
appropriate modifications) shall be given by the Company and Purchaser
with respect to any required registration or other qualification of
securities under any federal or state law or regulation of any
governmental authority other than the Securities Act.
(f) An indemnifying party shall make payments of all
amounts required to be made pursuant to the foregoing provisions of this
Section 7.5(G) to or for the account of the indemnified party from time to
time promptly upon receipt of bills or invoices relating thereto or when
otherwise due or payable; provided that the indemnified party shall
reimburse the indemnifying party for any payments made with the stated
purpose of satisfying the requirements of this clause (f) which were not
required to be made by this Section 7.5(G).
H. Registration Rights to Others. If the Company shall at any
time provide to any holder of any securities of the Company rights with respect
to
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35
the registration of such securities under the Securities Act, such rights shall
not be in conflict with any of the rights provided in this Section 7.5. The
Company shall provide to Purchaser copies of any agreements which purport to
grant rights with respect to the registration of any of the Company's securities
to any holder or prospective holder thereof promptly upon executing the same.
I. Rule 144. The Company shall take all actions reasonably
necessary to enable Purchaser to sell the Shares without registration under the
Securities Act within the limitation of the provisions of Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission, including, without
limitation, filing on a timely basis all reports required to be filed pursuant
to the Exchange Act. Upon the request of Purchaser, the Company will deliver to
Purchaser a written statement as to whether it has complied with such
requirements.
J. Definitions. As used in this Section 7.5, unless the
context otherwise requires, the following terms have the following respective
meanings:
NASDAQ: The National Association of Securities Dealers' Automated
Quotation System.
Person: An individual, a partnership, a limited liability company, a
joint venture, a corporation, a trust, an association, an organization, a
business, an unincorporated organization or a government or political
subdivision thereof or agency thereof or other entity of any kind.
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36
Registration Expenses: All expenses incident to the Company's
performance of or compliance with this Section 7.5 including, without
limitation, all registration and filing fees, all fees of the New York Stock
Exchange, Inc., other national securities exchanges or the National Association
of Securities Dealers, Inc., all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including the
expenses of "cold comfort" letters required by or incident to such performance
and compliance, any fees and disbursements of underwriters customarily paid by
issuers or sellers of securities (excluding any underwriting discounts or
commissions with respect to the Shares, which shall not be paid by the Company)
and any reasonable fees and expenses of counsel to Purchaser.
ARTICLE VIII
CERTAIN COVENANTS OF SELLER
8.1 No Sale Agreement. Seller agrees that, during the period
commencing on the date of this Agreement and ending on September 30, 1997, it
will not sell, transfer or otherwise dispose of any Common Stock other than
pursuant to this Agreement; provided, however, that (i) this restriction shall
not apply to any distribution by Seller of shares of Company Common Stock to
stockholders of Seller or to a trust formed for the benefit of stockholders of
Seller and (ii) this restriction shall terminate upon the occurrence of the
Restriction Termination Event.
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37
ARTICLE IX
MISCELLANEOUS
9.1 Termination. This Agreement may be terminated at any time (i)
upon the mutual agreement of Purchaser and Seller or (ii) by Purchaser or Seller
if the Closing Date shall not have occurred by the later of (x) March 31, 1997,
or (y) the close of business on the 75th day following the initial filing by
Purchaser under the HSR Act.
9.2 Amendment and Modification. This Agreement may be amended,
modified or supplemented only by a written agreement signed by the parties
hereto with respect to any of the terms contained herein.
9.3 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered in person,
by courier or registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
A. if to Purchaser, to it at:
Automatic Data Processing, Inc.
One ADP Boulevard
Roseland, New Jersey 07068
Attention: General Counsel
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38
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Richard S. Borisoff, Esq.
B. if Seller, to it at:
Noel Group, Inc.
667 Madison Avenue
New York, New York 10021
Attention: Chairman of the Board
with a copy to:
Herbert M. Friedman, Esq.
Zimet, Haines, Friedman & Kaplan
460 Park Avenue
New York, New York 10022
C. if to the Company, to it at:
HealthPlan Services Corporation
3501 Frontage Road
Tampa, Florida 33607
Attention: General Counsel
with a copy to:
Frederick W. Kanner, Esq.
Dewey Ballantine
1301 Avenue of the Americas
New York, New York 10019
9.4 Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns, but, prior to the Closing, neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties. After the
Closing, and provided that the Shelf
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Registration is then effective, the rights of Purchaser under Section 7.5
(Registration Rights) may not be assigned by Purchaser without the consent of
any other party hereto to any subsequent holder of Shares.
9.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE.
9.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.7 Expenses. Except as otherwise provided in Section 7.5, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs or expenses,
including, without limitation, such party's legal expenses.
9.8 Entire Agreement. This Agreement, including the documents or
instruments referred to herein, embodies the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein. There
are no restrictions, promises, representations, warranties, covenants or
undertakings, other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
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40
9.9 No Third Party Beneficiaries. Except as provided in Section
7.5(G), this Agreement is not intended to, and does not, create any rights or
benefits of any party other than the parties hereto.
9.10 Survival of Warranties. The respective representations,
warranties, covenants and agreements of Purchaser, Seller and the Company
contained herein shall survive the closing of the transactions contemplated
hereby.
9.11 Interpretation. The Article and Section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
9.12 Adjustments. In the event that after the Closing Date there
occurs any combination, subdivision or reclassification of the Common Stock, the
provisions of this Agreement shall be adjusted to provide for the parties hereto
the same benefits and rights such parties would have had if such combination,
subdivision or reclassification had not occurred.
9.13 Public Announcements. Purchaser, Seller and the Company will
consult with each other before issuing any press release or making any public
statement with respect to the transaction referred to herein and, except as may
be required by applicable law or the rules of the New York Stock Exchange, will
not
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issue any such press release or make any such public statement without the prior
written consent of the other parties hereto.
IN WITNESS WHEREOF, Purchaser, Seller and the Company have each
caused this Agreement to be signed by its duly authorized officers as of the
date first above written.
AUTOMATIC DATA PROCESSING, INC.
By /s/ Authorized Officer
-----------------------------------
Name:
Title:
NOEL GROUP, INC.
By /s/ Joseph S. DiMartino
-----------------------------------
Name: Joseph S. DiMartino
Title: Chairman
HEALTHPLAN SERVICES CORPORATION
By /s/ James K. Murray
-----------------------------------
Name: James K. Murray
Title: President
