UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)(1)*
-------------------------------
CELADON GROUP, INC.
(Name of Issuer)
Common Stock, $.033 par value
(Title of Class of Securities)
150838 10 0
(CUSIP Number)
--------------------------------
Howard Kailes, Esq.
Krugman Chapnick & Grimshaw LLP
Park 80 West - Plaza Two
Saddle Brook, New Jersey 07663
(201) 845-3434
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
-------------------------------
June 23, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this Schedule
13D, and is filing this schedule because of Sections 240.13d-1(e),
240.13d-1(f) or 240.13d-1(g), check the following box.
------
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See Section 240.13d.7(b) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
- -------------------------
(1) Constitutes Amendment No. 5 to Schedule 13G filed jointly by
Hanseatic Corporation, Paul Biddelman and Wolfgang Traber.<PAGE>
<PAGE>
CUSIP NO. 150838 10 0
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Hanseatic Corporation
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)
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(b)
-----
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
959,353 (see footnote 1)
8 SHARED VOTING POWER
(see footnote 2)
9 SOLE DISPOSITIVE POWER
959,353 (see footnote 1)
10 SHARED DISPOSITIVE POWER
(see footnote 2)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
959,353 (see footnotes 1 and 2)
<PAGE>
<PAGE>
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
(see footnote 2)
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.4% (see footnote 3)
14 TYPE OF REPORTING PERSON*
CO
- -----------------
(1) Includes 12,121 shares issuable upon exercise of outstanding
warrants, and excludes the effect of a voting agreement
entered into by Laredo Acquisition Corp., Hanseatic Agreement
and Stephen Russell.
(2) Excludes an aggregate of approximately 1,005,298 shares (the
"Russell Shares") beneficially owned by Stephen Russell
(including 63,334 shares issuable upon exercise of outstanding
options exercisable within 60 days), as reported in the Proxy
Statement dated October 17, 1997 of Celadon Group, Inc. The
Russell Shares are subject to a stockholders' agreement among
Celadon Group, Inc., Hanseatic Corporation and Stephen
Russell.
(3) Based upon an aggregate of 7,721,989 shares outstanding at
June 23, 1998.
<PAGE>
<PAGE>
CUSIP NO. 150838 10 0
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Wolfgang Traber
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)
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(b)
-----
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Germany
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
--
8 SHARED VOTING POWER
959,353 (see footnotes 1 and 2)
9 SOLE DISPOSITIVE POWER
--
10 SHARED DISPOSITIVE POWER
959,353 (see footnotes 1 and 2)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
959,353 (see footnotes 1 and 2)
<PAGE>
<PAGE>
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
(see footnote 2)
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.4% (see footnote 1)
14 TYPE OF REPORTING PERSON*
IN
- ---------------
(1) Represents shares beneficially owned by Hanseatic Corporation;
the undersigned holds in excess of a majority of the shares of
capital stock of Hanseatic Corporation.
(2) Excludes the Russell Shares.
(3) Based upon an aggregate of 7,721,989 shares outstanding at
June 23, 1998.
<PAGE>
<PAGE>
CUSIP NO. 150838 10 0
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Paul A. Biddelman
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)
-----
(b)
-----
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
28,500 (see footnote 1)
8 SHARED VOTING POWER
959,353 (see footnotes 2 and 3)
9 SOLE DISPOSITIVE POWER
28,500 (see footnote 1)
10 SHARED DISPOSITIVE POWER
959,353 (see footnotes 2 and 3)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
987,853 (see footnotes 1, 2 and 3)
<PAGE>
<PAGE>
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
(see footnote 3)
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.7% (see footnote 4)
14 TYPE OF REPORTING PERSON*
IN
- ---------------
(1) Represents shares issuable upon exercise of outstanding
options exercisable within 60 days.
(2) Represents shares beneficially owned by Hanseatic Corporation;
the undersigned is the president of Hanseatic Corporation and
its designee on the board of directors of Celadon Group, Inc.
(3) Excludes the Russell Shares.
(4) Based upon an aggregate of 7,721,989 shares outstanding at
June 23, 1998.
<PAGE>
<PAGE>
INTRODUCTION
Pursuant to Reg. Section 240.13d-2 under the Securities
Exchange Act of 1934, as amended, this Amendment No. 3 to Schedule
13D discloses changes in the Statement on Schedule 13D dated July
3, 1996, as amended by Amendment No. 1 thereto dated July 3, 1996
and Amendment No. 2 thereto dated December 31, 1997, filed jointly
by Hanseatic Corporation ("Hanseatic"), Wolfgang Traber and Paul A.
Biddelman, and therefore does not restate the items therein in
their entirety.
On June 23, 1998, Celadon Group, Inc. (the "Corporation")
entered into an Agreement and Plan of Merger dated such date (the
"Merger Agreement") with Laredo Acquisition Corp. ("Laredo"), a
wholly-owned subsidiary of Odyssey Investment Partners, pursuant to
which Laredo will be merged with and into the Corporation (the
"Merger"). Upon the effectiveness of the Merger (the "Effective
Time"), the separate corporate existence of Laredo will cease and
the Corporation will continue as the surviving corporation (the
"Surviving Corporation"). At the Effective Time: (i) the shares of
common stock of Laredo issued and outstanding immediately prior to
the Effective Time will be automatically converted into and
thereafter represent 2,880,000 shares of validly issued, fully-paid
and nonassessable shares of common stock, $.033 par value (the
"Surviving Common Stock"), of the Surviving Corporation, and (ii)
except as hereinafter described, each share of common stock, $.033
par value (the "Common Stock"), of the Corporation issued and
outstanding immediately prior to the consummation of the Merger
will be converted into the right to receive $20.00 (the "Merger
Consideration"). Certain of the Corporation's current stockholders
(including Hanseatic) will, in lieu of receiving the Merger
Consideration, retain an aggregate of 320,000 shares of Common
Stock currently held by them, each of which will, at the Effective
Time, be converted into the right to receive one share of Surviving
Common Stock (the "Rollover Shares").
The affirmative vote of a majority of the outstanding shares
of Common Stock is required to consummate the Merger. As more fully
described under Item 6 herein, on June 23, 1998 Hanseatic agreed,
pursuant to a Voting Agreement dated such date (the "Voting
Agreement") with Laredo and Stephen Russell, to vote in favor of
the Merger, and to receive Rollover Shares in lieu of the Merger
Consideration with respect to 120,000 shares of Common Stock
beneficially owned by Hanseatic.
Item 4. Purpose of Transaction.
----------------------
On June 23, 1998, Hanseatic entered into the Voting Agreement,
which provides that Hanseatic will vote in favor of the Merger and
receive Rollover Shares in lieu of the Merger Consideration with
respect to 120,000 shares of Common Stock beneficially owned by
Hanseatic. See Item 6 for a description of the Voting Agreement,
which information is incorporated by reference to this item.<PAGE>
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relation-
ships with Respect to Securities of the Issuer.
-----------------------------------------------------
The Voting Agreement provides that, until the Merger Agreement
is terminated in accordance with its terms (the "Termination
Date"), at any meeting of the stockholders of the Corporation, or
in connection with any written consent of stockholders of the
Corporation, Hanseatic will vote all shares of Common Stock
beneficially owned by it: (i) in favor of the Merger and adoption
of the Merger Agreement, the execution and delivery by the
Corporation of the Merger Agreement and the approval of the terms
thereof and in favor of each of the other actions contemplated by
the Merger Agreement and the Voting Agreement and any actions
required in furtherance thereof; (ii) against any action or
agreement that would (or would be reasonably likely to) result in
a breach of any covenant, representation or warranty or any other
obligation or agreement of the Corporation under the Merger
Agreement; and (iii) except as specifically requested in writing by
Laredo in advance, against the following actions (other than the
Merger and the transactions contemplated by the Merger Agreement):
(1) any extraordinary corporate transaction such as a merger,
consolidation or other business combination involving the
Corporation or any of its subsidiaries, (2) a sale, lease or
transfer (whether by merger, consolidation, operation of law or
otherwise) of a material amount of assets of the Corporation or any
of its subsidiaries or a reorganization, recapitalization,
dissolution or liquidation of the Corporation or any of its
subsidiaries; (3)(a) any change in the majority of the board of
directors of the Corporation; (b) any change in the present
capitalization of the Corporation or any amendment of the
Corporation's certificate of incorporation or by-laws; (c) any
other material change in the Corporation's corporate structure or
business; or (d) any other action which is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone,
discourage or materially adversely affect the Merger or the
transactions contemplated by the Merger Agreement, or the Voting
Agreement or the contemplated economic benefits of any of the
foregoing.
Prior to the Termination Date, Hanseatic will not directly or
indirectly: (i) except pursuant to the terms of the Merger
Agreement and to Laredo pursuant to the Voting Agreement, offer for
sale, sell or otherwise dispose of any shares of Common Stock now
or subsequently beneficially owned by Hanseatic, or any interest
therein, or (ii) except as contemplated by the Voting Agreement,
grant any proxies or powers of attorney with respect to any such
shares, deposit any such shares into a voting trust or enter into
a voting agreement with respect to any such shares.
Under the Voting Agreement, Hanseatic has agreed to rollover
an aggregate of 120,000 shares of Common Stock and receive Rollover
Shares in lieu of the Merger Consideration for such shares.<PAGE>
<PAGE>
The Voting Agreement also provides that Hanseatic will not
exercise any rights-of-first refusal or co-sale rights granted to
it by Stephen Russell under the stockholders agreement dated
October 8, 1992, as amended July 3, 1996, to the extent
inconsistent with the Merger Agreement, the Voting Agreement or the
transactions contemplated thereby.
Under the terms thereof, either party may terminate the Merger
Agreement if closing has not occurred on or before November 30,
1998, or earlier in the circumstances described in the Merger
Agreement. Reference is hereby made to the Voting Agreement annexed
hereto as Exhibit B, the full text of which is hereby incorporated
into this item and qualifies all statements contained herein.
Item 7. Materials to be Filed as Exhibits.
---------------------------------
Exhibit A - Agreement pursuant to Rule 13d-1(k)(1)(iii)
Exhibit B - Voting Agreement dated June 23, 1998 among
Laredo Acquisition Corp., Stephen Russell and
Hanseatic Corporation
<PAGE>
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of our knowledge and
belief, we certify that the information set forth in this statement
is true, complete and correct.
Dated: July 3, 1998 HANSEATIC CORPORATION
By s/Paul A. Biddelman
----------------------------
Paul A. Biddelman, President
Dated: July 3, 1998
s/Wolfgang Traber
------------------------------
Wolfgang Traber
Dated: July 3, 1998 s/Paul A. Biddelman
------------------------------
Paul A. Biddelman<PAGE>
<PAGE>
INDEX TO EXHIBITS
Exhibit A - Agreement pursuant to Rule 13d-1(k)(1)(iii)
Exhibit B - Voting Agreement dated June 23, 1998 among
Laredo Acquisition Corp., Stephen Russell and
Hanseatic Corporation
EXHIBIT A
Pursuant to Rule 13d-1(k)(1)(iii) promulgated by the
Securities and Exchange Commission, the undersigned agree that the
statement to which this Exhibit is attached is filed on their
behalf in the capacities set out hereinbelow.
Dated: July 3, 1998 HANSEATIC CORPORATION
By s/Paul A. Biddelman
----------------------------
Paul A. Biddelman, President
Dated: July 3, 1998
s/Wolfgang Traber
------------------------------
Wolfgang Traber
Dated: July 3, 1998
s/Paul A. Biddelman
------------------------------
Paul A. Biddelman
EXHIBIT B
VOTING AGREEMENT
AGREEMENT dated as of June 23, 1998 by and between LAREDO
ACQUISITION CORP., a Delaware corporation ("Acquisition"), and the
other parties signatory hereto (each a "Stockholder").
RECITALS
A. Concurrently herewith, Acquisition, and Celadon Group,
Inc., a Delaware corporation (the "Company"), are entering into an
Agreement and Plan of Merger of even date herewith (as such
agreement may be amended from time to time, the "Merger
Agreement"; capitalized terms used but not defined herein shall
have the meanings set forth in the Merger Agreement) pursuant to
which (and subject to the terms and conditions specified therein)
Acquisition will be merged with and into the Company (the
"Merger").
B. As a condition to Acquisition entering into the Merger
Agreement, Acquisition requires that each Stockholder enter into,
and each such Stockholder hereby agrees to enter into, this
Agreement.
AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties hereby agree as follows:
1. Representations and Warranties of Stockholders. Each
Stockholder hereby severally and not jointly represents and
warrants to Acquisition as follows:
(a) Ownership of Shares.
i. Such Stockholder is the record holder or beneficial
owner of the number of shares of Company Common Stock as is
set forth opposite such Stockholder's name on Schedule I
hereto (such shares shall constitute the "Existing Shares",
and together with any shares of Company Common Stock acquired
of record or beneficially by such Stockholder in any capacity
after the date hereof and prior to the termination hereof,
whether upon exercise of options, conversion of convertible
securities, purchase, exchange or otherwise, shall constitute
the "Shares").
ii. On the date hereof, the Existing Shares set forth
opposite such Stockholder's name on Schedule I hereto
constitute all of the outstanding shares of Company Common
Stock owned of record or beneficially by such Stockholder.
Such Stockholder does not have record or beneficial ownership
of any Shares not set forth on Schedule I hereto.
<PAGE>
<PAGE>
iii. Such Stockholder has sole power of disposition with
respect to all of the Existing Shares set forth opposite such
Stockholder's name on Schedule I and sole voting power with
respect to the matters set forth in Section 2 hereof and sole
power to demand appraisal rights, in each case with respect
to all of the Existing Shares set forth opposite such
Stockholder's name on Schedule I, with no restrictions on
such rights, subject to applicable federal securities laws
and the terms of this Agreement.
iv. Such Stockholder will have sole power of
disposition with respect to Shares other than Existing
Shares, if any, which become beneficially owned by such
Stockholder and will have sole voting power with respect to
the matters set forth in Section 2 hereof and sole power to
demand appraisal rights, in each case with respect to all
Shares other than Existing Shares, if any, which become
beneficially owned by such Stockholder with no restrictions
on such rights, subject to applicable federal securities laws
and the terms of this Agreement.
(b) Organization; Power; Binding Agreement. If such
Stockholder is a corporation, such Stockholder is a corporation
duly formed, validly existing and in good standing under the laws
of its jurisdiction of its organization. If such Stockholder is a
corporation, such Stockholder has the necessary corporate power
and authority to enter into and perform all of such Stockholder's
obligations under this Agreement and has taken all corporate
action necessary to execute and deliver this Agreement, to
consummate the transactions contemplated hereby and to perform its
obligations hereunder, and no other corporate proceedings on the
part of such Stockholder are necessary to authorize the execution,
delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby. If such Stockholder is an
individual, such Stockholder has the legal capacity, power and
authority to enter into and perform all of such Stockholder's
obligations under this Agreement. This Agreement has been duly and
validly executed and delivered by such Stockholder and constitutes
a valid and binding agreement of such Stockholder, enforceable
against such Stockholder in accordance with its terms. If such
Stockholder is married and such Stockholder's Shares constitute
community property, this Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholder's spouse, enforceable against such
person in accordance with its terms.
(c) No Conflicts. Except for filings under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), if applicable, and any required amendments to any
Schedule 13D filed by any such Stockholder, (A) no filing with,
and no permit, authorization, consent or approval of, any state or
federal public body or authority is necessary for the execution of
this Agreement by such Stockholder and the consummation by such<PAGE>
<PAGE>
Stockholder of the transactions contemplated hereby and (B)
neither the execution, delivery or performance of this Agreement
by such Stockholder nor the consummation by such Stockholder of
the transactions contemplated hereby nor compliance by such
Stockholder with any of the provisions hereof shall (x) conflict
with or result in any breach of any applicable certificate of
incorporation, bylaws, trust, partnership agreement or other
agreements or organizational documents applicable to such
Stockholder, (y) result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation,
material modification or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind to which
such Stockholder is a party or by which such Stockholder or any of
such Stockholder's properties or assets may be bound or (z)
violate any order, writ, injunction, decree, judgment, law,
statute, rule or regulation applicable to such Stockholder or any
of such Stockholder's properties or assets.
(d) No Transfer. Except as described on Schedule II,
such Stockholder's Shares and the certificates representing such
Shares are now and at all times during the term hereof will be
held by such Stockholder, or by a nominee or custodian for the
benefit of such Stockholder, free and clear of all liens, claims,
security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising
hereunder.
(e) No Finders. No broker, investment banker, financial
adviser or other person is entitled to any broker's, finder's,
financial adviser's or other similar fee or commission in
connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of such Stockholder in his or
her capacity as such.
(f) Acknowledgment. Such Stockholder understands and
acknowledges that Acquisition is entering into the Merger
Agreement in reliance upon such Stockholder's execution and
delivery of this Agreement.
2. Agreement To Vote; Proxy.
2.1 Voting. Each Stockholder hereby severally and not
jointly agrees that, until the Termination Date (as defined in
Section 7 hereof), at any meeting of the stockholders of the
Company, however called, or in connection with any written consent
of the stockholders of the Company, such Stockholder shall vote
(or cause to be voted) the Shares held of record or beneficially
by such Stockholder (i) in favor of the Merger and adoption of the
Merger Agreement, the execution and delivery by the Company of the<PAGE>
<PAGE>
Merger Agreement and the approval of the terms thereof and in
favor of each of the other actions contemplated by the Merger
Agreement and this Agreement and any actions required in
furtherance hereof and thereof; (ii) against any action or
agreement that would (or would be reasonably likely to) result in
a breach of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger Agreement
or this Agreement; and (iii) except as specifically requested in
writing by Acquisition in advance, against the following actions
(other than the Merger and the transactions contemplated by the
Merger Agreement): (1) any extraordinary corporate transaction,
such as a merger, consolidation or other business combination
involving the Company or any of its subsidiaries; (2) a sale,
lease or transfer (whether by merger, consolidation, operation of
law or otherwise) of a material amount of assets of the Company or
any of its subsidiaries or a reorganization, recapitalization,
dissolution or liquidation of the Company or any of its
subsidiaries; (3) (a) any change in the majority of the board of
directors of the Company; (b) any change in the present
capitalization of the Company or any amendment of the Company's
certificate of incorporation or by-laws; (c) any other material
change in the Company's corporate structure or business; or (d)
any other action which is intended, or could reasonably be
expected, to impede, interfere with, delay, postpone, discourage
or materially adversely affect the Merger or the transactions
contemplated by the Merger Agreement or this Agreement or the
contemplated economic benefits of any of the foregoing. Such
Stockholder shall not enter into any agreement or understanding
with any person or entity prior to the Termination Date to vote or
give instructions after the Termination Date in any manner
inconsistent with clauses (i), (ii) or (iii) of the preceding
sentence.
2.2 PROXY. EACH STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS,
ACQUISITION AND BRIAN KWAIT, PRESIDENT OF ACQUISITION, AND DOUGLAS
HITCHNER, VICE PRESIDENT OF ACQUISITION, IN THEIR RESPECTIVE
CAPACITIES AS OFFICERS OF ACQUISITION, AND ANY INDIVIDUAL WHO
SHALL HEREAFTER SUCCEED TO ANY SUCH OFFICE OF ACQUISITION, AND ANY
OTHER DESIGNEE OF ACQUISITION, EACH OF THEM INDIVIDUALLY, SUCH
STOCKHOLDER'S IRREVOCABLE (UNTIL THE TERMINATION DATE) PROXY AND
ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE THE
SHARES AS INDICATED IN SECTION 2.1 ABOVE. EACH STOCKHOLDER INTENDS
THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION DATE) AND
COUPLED WITH AN INTEREST AND WILL TAKE SUCH FURTHER ACTION AND
EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE
THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY SUCH STOCKHOLDER WITH RESPECT TO SUCH STOCKHOLDER'S
SHARES.
3. Certain Covenants of Stockholders. Except in accordance
with the terms of this Agreement, each Stockholder hereby
severally covenants and agrees as follows:
<PAGE>
<PAGE>
3.1 No Solicitation. Prior to the Termination Date, no
Stockholder shall, in its capacity as such, directly or indirectly
(including through advisors, agents or other intermediaries),
solicit (including by way of furnishing information) or respond to
any inquiries or the making of any proposal by any person or
entity (other than Acquisition or any Affiliate thereof) with
respect to the Company that constitutes or could reasonably be
expected to lead to an Acquisition Proposal (as defined in Section
6.4 in the Merger Agreement). If any Stockholder in its capacity
as such receives any such inquiry or proposal, then such
Stockholder shall promptly inform Acquisition of the terms and
conditions, if any, of such inquiry or proposal and the identity
of the person making it. Each Stockholder, in its capacity as
such, will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing.
Notwithstanding the foregoing, nothing in this Section 3.1 shall
restrict a Stockholder who is also a director of the Company from
taking actions in such Stockholder's capacity as a director to the
extent and in the circumstances permitted by Section 6.4 of the
Merger Agreement.
3.2 Restriction on Transfer, Proxies and Noninterference;
Restriction on Withdrawal. Prior to the Termination Date, no
Stockholder shall, directly or indirectly: (i) except pursuant to
the terms of the Merger Agreement and to Acquisition pursuant to
this Agreement, offer for sale, sell, transfer (whether by merger,
consolidation, operation of law or otherwise), tender, pledge,
encumber, assign or otherwise dispose of, enforce or permit the
execution of the provisions of any redemption agreement with the
Company or enter into any contract, option or other arrangement or
understanding with respect to or consent to the offer for sale,
sale, transfer (whether by merger, consolidation, operation of law
or otherwise), tender, pledge, encumbrance, assignment or other
disposition of, or exercise any discretionary powers to
distribute, any or all of such Stockholder's Shares or any
interest therein, (ii) except as contemplated by this Agreement,
grant any proxies or powers of attorney with respect to any
Shares, deposit any Shares into a voting trust or enter into a
voting agreement with respect to any Shares; or (iii) take any
action that would make any representation or warranty of such
Stockholder contained herein untrue or incorrect or have the
effect of preventing or disabling such Stockholder from performing
such Stockholder's obligations under this Agreement. Acquisition
acknowledges the circumstances described on Schedule II which
shall not be construed as a breach of this covenant.
3.3 Waiver of Appraisal Rights. Each Stockholder hereby
waives any rights of appraisal from the Merger that such
Stockholder may have.
<PAGE>
<PAGE>
3.4 Agreement to Roll-Over. Each Stockholder listed on
Schedule A to the Merger Agreement understands and acknowledges
that Sub is entering into the Merger Agreement in reliance upon
the conversion of their shares into the right to receive the
Surviving Corporation Common Stock and agree to such conversion
pursuant to Section 3.2 of the Merger Agreement. Each Stockholder
hereby agrees to rollover the number of shares of Company Common
Stock set forth opposite such Stockholder's name on Schedule A to
the Merger Agreement.
3.5 Confidentiality, No Hire.
(a) Each Stockholder agrees that for a period ending
five years after the Effective Time of the Merger, such
Stockholder will not disclose to any other party, unless required
to do so by law, any Confidential Information relating to the
Company or to any subsidiary or affiliate thereof which
information was acquired during the course of such Stockholder's
relationship with the Company. As used in this Agreement, the term
"Confidential Information" means information that is not generally
known or available to the public and that is used, developed or
obtained by the Company or its subsidiaries or affiliates in
connection with its businesses, including but not limited to,
(i) products or services; (ii) fees, costs and pricing structures;
(iii) designs; (iv) computer software, including operating
systems, applications and program listings; (v) flow charts,
manuals and documentation; (vi) data bases; (vii) accounting and
business methods; (viii) inventions, devices, new developments,
methods and processes, whether patentable or unpatentable and
whether or not reduced to practice; (ix) customers or customer
requirements, order levels or projections and customer or client
lists; (x) other copyrightable works; (xi) all technology and
trade secrets; and (xii) all similar and related information in
whatever form. Confidential Information will not include any
information that has been published in a form generally available
to the public prior to the date the Stockholder proposes to
disclose or use such information.
(b) Each Stockholder agrees that for a period ending
two years after the Effective Time of the Merger, without the
prior written consent of the Company, neither such Stockholder nor
any business or enterprise with which such Stockholder is
associated as an officer, director or controlling shareholder or
other investor (in each case, with the power to direct or cause
the direction of the management of such business or enterprise)
will employ or attempt to employ an employee of the Company or any
of its Subsidiaries or joint ventures.
3.6 Hanseatic Agreement. Each Stockholder that is a party to
that certain Stockholders Agreement dated as of October 8, 1992
and as amended as of July 3, 1996 (the "Stockholders Agreement")
by and among the Company, Stephen Russell, and Hanseatic
Corporation agrees that, from the date hereof until the date the<PAGE>
<PAGE>
Merger Agreement is terminated in accordance with its terms, the
Stockholders Agreement shall be of no force or effect to the
extent that the Stockholders Agreement is inconsistent with this
Agreement, the Merger Agreement or the transactions contemplated
hereby or thereby and that such Stockholder shall not, and shall
not attempt to, either directly or indirectly, exercise any of its
rights under the Stockholders Agreement in any manner inconsistent
with this Agreement, the Merger Agreement or the transactions
contemplated hereby or thereby (it being agreed that, without
limitation, the exercise of any rights under Article II of the
Stockholders Agreement by any Stockholder in connection with the
transactions contemplated by the Merger Agreement would be
inconsistent with this Agreement, the Merger Agreement and the
transactions contemplated hereby and thereby). Each Stockholder
that is party to the Stockholders Agreement further agrees that
the Stockholder Agreement shall terminate as of the Closing and to
execute such additional documents and agreements to effect the
foregoing. Acquisition acknowledges that Hanseatic Corporation's
representations and warranties set forth in Sections 1(a)(ii),
1(a)(iii) and 1(a)(iv) shall not be deemed to have been breached
as a result of the existence of the Stockholders Agreement.
4. Further Assurances. From time to time, at the other
party's request and without further consideration, each party
hereto shall execute and deliver such additional documents and
take all such further action as may be necessary or desirable to
consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
5. Certain Events. Each Stockholder agrees that this
Agreement and the obligations thereunder shall attach to such
Stockholder's Shares and shall be binding upon any person or
entity to which legal or beneficial ownership of such Shares shall
pass, whether by operation of law or otherwise, including without
limitation such Stockholder's heirs, guardians, administrators or
successors or as a result of any divorce.
6. Stop Transfer. Each Stockholder agrees with, and
covenants to, Acquisition that such Stockholder shall not request
that the Company register the transfer (book-entry or otherwise)
of any certificate or uncertificated interest representing any of
such Stockholder's Shares, unless such transfer is made in
compliance with this Agreement.
7. Termination. The obligations of the Stockholders under
this Agreement shall terminate upon the date the Merger Agreement
is terminated in accordance with its terms. The termination of
this Agreement shall not relieve any party from liability for any
breach of this Agreement.
<PAGE>
<PAGE>
8. Miscellaneous.
8.1 Entire Agreement; Assignment. This Agreement (i)
constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof and (ii) shall
not be assigned by operation of law or otherwise without the prior
written consent of the other parties, provided that Acquisition
may assign, in its sole discretion, its rights and obligations
hereunder to any affiliate of Acquisition, but no such assignment
shall relieve Acquisition of its obligations hereunder if such
assignee does not perform such obligations.
8.2 Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of
a written agreement executed by the parties hereto; provided that
Schedule I may be supplemented by Acquisition by adding the name
and other relevant information concerning any stockholder of the
Company who is or agrees to be bound by the terms of this
Agreement without the agreement of any other party hereto, and
thereafter such added stockholder shall be treated as a
"Stockholder" for all purposes of this Agreement.
8.3 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly received if so given)
by hand delivery, telegram, telex or telecopy, or by mail
(registered or certified mail, postage prepaid, return receipt
requested) or by any courier service, such as Federal Express,
providing proof of delivery. All communications hereunder shall be
delivered to the Stockholders at the addresses set forth on
Schedule I hereto. All communications hereunder shall be delivered
to Acquisition as follows:
c/o Odyssey Investment Partners, LLC
280 Park Avenue
West Tower, 38th Floor
New York, New York 10017
Attn: Brian Kwait
copy to:
Latham & Watkins
885 Third Avenue, Suite 1000
New York, New York 10022
Attn.: Richard Trobman
<PAGE>
<PAGE>
or to such other address as the person to whom notice is given may
have previously furnished to the others in writing in the manner
set forth above.
8.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.
8.5 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement.
8.6 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an
original, but both of which shall constitute one and the same
Agreement.
8.7 Descriptive Headings. The descriptive headings used
herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation
of this Agreement.
8.8 Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law but
if any provision or portion of any provision of this Agreement is
held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained
herein.
8.9 Definitions; Construction. For purposes of this
Agreement:
(a) "beneficially own" or "beneficial ownership" with
respect to any securities shall mean having "beneficial ownership"
of such securities (as determined pursuant to Rule 13d-3 under the
Exchange Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing. Without duplicative
counting of the same securities by the same holder, securities
beneficially owned by a Person shall include securities
beneficially owned by all other Persons with whom such Person
would constitute a "group" as described in Section 13(d)(3) of the
Exchange Act.<PAGE>
<PAGE>
(b) "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
In the event of a stock dividend or distribution, or any
change in the Company Common Stock by reason of any split-up,
subdivision, recapitalization, combination, exchange of shares or
the like, the term "Shares" shall be deemed to refer to and
include the Shares as well as all stock distributed pursuant to
such stock dividends and distributions and any shares into which
or for which any or all of the Shares may be changed, exchanged,
split, subdivided, combined or recapitalized.
8.10 Stockholder Capacity. Notwithstanding anything herein to
the contrary, no person executing this Agreement who is, or
becomes during the term hereof, a director of the Company makes
any agreement or understanding herein in his or her capacity as
such director, and the agreements set forth herein shall in no way
restrict any director in the exercise of his or her fiduciary
duties as a director of the Company. Each Stockholder has executed
this Agreement solely in his or her capacity as the record or
beneficial holder of such Stockholder's Shares.
IN WITNESS WHEREOF, Acquisition and each Stockholder have
caused this Agreement to be duly executed as of the day and year
first above written.
LAREDO ACQUISITION CORP.
By: s/Brian Kwait
------------------------------
Name: Brian Kwait
----------------------------
Title: President
---------------------------
By: s/Muzzi Mirza
------------------------------
Name: Muzzi Mirza
----------------------------
Title: Vice President
---------------------------
<PAGE>
<PAGE>
STOCKHOLDERS:
Stephen Russell
s/Stephen Russell
---------------------------------
Hanseatic Corporation
By: s/Paul A. Biddelman
------------------------------
Name: Paul A. Biddelman
----------------------------
Title: President
---------------------------
<PAGE>
<PAGE>
Schedule I
----------
Name Number of Existing Shares
- ---- -------------------------
Stephen Russell 924,804
Hanseatic Corporation 947,232*
* Exclusive of 12,121 shares issuable upon exercise of warrants,
which for purposes of this Agreement shall be deemed Shares solely
in the event of exercise of such warrants.<PAGE>
<PAGE>
Schedule II
Hanseatic Americas LDC and certain clients of Hanseatic
Corporation have economic rights with respect to the Shares
beneficially owned by Hanseatic Corporation. However, such rights
do not impair or limit Hanseatic Corporation's record and
beneficial ownership power of disposition, voting power or power
to demand appraisal rights with respect to its Shares.
