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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): April 2, 1997
PREMIERE TECHNOLOGIES, INC.
(Exact name of registrant
as specified in its charter)
Georgia 33-80547 59-3074176
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
3399 Peachtree Road, N.E.
The Lenox Building
Suite 400, Atlanta, Georgia 30326
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(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: (404) 262-8400
N/A
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On April 2, 1997, Premiere Technologies, Inc. (the "Company") announced
that it had entered into definitive agreements to acquire Voice-Tel Enterprises,
Inc. ("VTE"), VTN, Inc., the general partner of Voice-Tel Network Limited
Partnership ("VTNLP"), the limited partner interests in VTNLP owned by
Merchandising Productions, Inc. (collectively, "Voice-Tel") and certain
independently operated franchisees (the "Franchisees") (collectively, the
"Acquisitions"). The Acquisitions will be made pursuant to: (i) an Agreement
and Plan of Merger dated as of April 2, 1997 by and among the Company, PTEK
Merger Corporation, a wholly-owned subsidiary of the Company, and VTE; (ii) an
Agreement and Plan of Merger dated as of April 2, 1997 by and among the Company,
PTEK Merger Corporation II, a wholly-owned subsidiary of the Company, VTN, Inc.
and the Stockholders of VTN, Inc.; (iii) a Purchase and Sale Agreement dated
April 2, 1997 by and between the Company and Merchandising Productions, Inc.;
and (iv) Transfer Agreements dated as of April 2, 1997 by and among the Company,
Franchisees and the Owners of Franchisees.
ITEM 7. EXHIBITS.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(C) EXHIBITS.
2.1 Agreement and Plan of Merger, together with exhibits, dated as of
April 2, 1997 by and among Premiere Technologies, Inc., PTEK
Merger Corporation and Voice-Tel Enterprises, Inc. and the
Stockholders of Voice-Tel Enterprises, Inc.
2.2 Agreement and Plan of Merger, together with exhibits/(1)/, dated
as of April 2, 1997 by and among Premiere Technologies, Inc.,
PTEK Merger Corporation II, VTN, Inc. and the Stockholders of
VTN, Inc.
2.3 Purchase and Sale Agreement dated April 2, 1997 by and between
Premiere Technologies, Inc. and Merchandising Productions, Inc.
2.4 Form of Transfer Agreement, together with exhibits, dated as of
__________, 1997 by and among Premiere Technologies, Franchisees.
Inc., Franchisees and the Owners of Franchisees.
99.1 Press Release dated April 2, 1997.
_______________
/(1)/ See Exhibits 1 - 8 of Exhibit 2.10 Agreement and Plan of Merger dated as
of April 2, 1997 by and among Premiere Technologies, Inc., PTEK Merger
Corporation and Voice-Tel Enterprises, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PREMIERE TECHNOLOGIES, INC.
By: /s/ Patrick G. Jones
--------------------
Patrick G. Jones
Senior Vice President of Finance and Legal
Dated: April 2, 1997
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EXHIBIT INDEX
2.1 Agreement and Plan of Merger, together with exhibits, dated as of
April 2, 1997 by and among Premiere Technologies, Inc., PTEK
Merger Corporation and Voice-Tel Enterprises, Inc. and the
Stockholders of Voice-Tel Enterprises, Inc.
2.2 Agreement and Plan of Merger, together with exhibits/(1)/, dated
as of April 2, 1997 by and among Premiere Technologies, Inc.,
PTEK Merger Corporation II, VTN, Inc. and the Stockholders of
VTN, Inc.
2.3 Purchase and Sale Agreement dated April 2, 1997 by and between
Premiere Technologies, Inc. and Merchandising Productions, Inc.
2.4 Form of Transfer Agreement, together with exhibits, dated as of
__________, 1997 by and among Premiere Technologies, Franchisees.
Inc., Franchisees and the Owners of Franchisees.
99.1 Press Release dated April 2, 1997.
_________________
/(1)/ See Exhibits 1 - 8 of Exhibit 2.10 Agreement and Plan of Merger dated as
of April 2, 1997 by and among Premiere Technologies, Inc., PTEK Merger
Corporation and Voice-Tel Enterprises, Inc.
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EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
PREMIERE TECHNOLOGIES, INC.
PTEK MERGER CORPORATION
VOICE-TEL ENTERPRISES, INC.
AND
THE STOCKHOLDERS OF VOICE-TEL ENTERPRISES, INC.
Dated as of April 2, 1997
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TABLE OF CONTENTS
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PARTIES.................................................................................................................. 1
PREAMBLE................................................................................................................. 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER............................................................................. 1
1.1 Merger..................................................................................................... 1
1.2 Time and Place of Closing.................................................................................. 1
1.3 Effective Time............................................................................................. 2
ARTICLE 2 - TERMS OF MERGER.............................................................................................. 2
2.1 Charter.................................................................................................... 2
2.2 Bylaws..................................................................................................... 2
2.3 Directors and Officers..................................................................................... 2
ARTICLE 3 - MANNER OF CONVERTING SHARES.................................................................................. 2
3.1 Conversion of Shares....................................................................................... 2
3.2 Anti-Dilution Provisions................................................................................... 4
3.3 Shares Held by VTE or Premiere............................................................................. 5
3.5 Fractional Shares.......................................................................................... 5
3.6 Stock Options.............................................................................................. 5
ARTICLE 4 - EXCHANGE OF SHARES........................................................................................... 6
4.1 Exchange Procedures........................................................................................ 6
4.2 Rights of Former VTE Stockholders.......................................................................... 7
4.3 Escrow Agreement........................................................................................... 7
4.4 Legending of Securities; Pooling Restrictions.............................................................. 8
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF VTE AND THE STOCKHOLDERS................................................... 8
5.1 Organization, Standing, and Power.......................................................................... 8
5.2 Authority of VTE; No Breach By Agreement................................................................... 9
5.3 Authority of Stockholders; No Breach By Agreement.......................................................... 10
5.4 Capital Stock.............................................................................................. 10
5.5 VTE Subsidiaries........................................................................................... 11
5.6 Financial Statements....................................................................................... 12
5.7 Absence of Undisclosed Liabilities......................................................................... 12
5.8 Absence of Certain Changes or Events....................................................................... 12
5.9 Tax Matters................................................................................................ 12
5.10 Assets..................................................................................................... 14
5.11 Intellectual Property...................................................................................... 15
5.12 Environmental Matters...................................................................................... 17
5.13 Compliance with Laws....................................................................................... 17
5.14 Labor Relations............................................................................................ 18
5.15 Employee Benefit Plans..................................................................................... 18
5.16 Material Contracts......................................................................................... 20
5.17 Legal Proceedings.......................................................................................... 21
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5.18 Reports.................................................................................................... 21
5.19 Franchise Matters.......................................................................................... 21
5.20 VTE Products and Services.................................................................................. 24
5.21 System Performance......................................................................................... 25
5.22 Statements True and Correct................................................................................ 26
5.23 Accounting and Regulatory Matters.......................................................................... 26
5.24 State Takeover Laws........................................................................................ 26
5.25 Charter Provisions......................................................................................... 26
5.26 Investment Intention....................................................................................... 26
5.27 Board Recommendation....................................................................................... 27
5.28 Amway Matters.............................................................................................. 27
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF PREMIERE................................................................... 28
6.1 Organization, Standing, and Power.......................................................................... 28
6.2 Authority; No Breach By Agreement.......................................................................... 28
6.3 Capital Stock.............................................................................................. 29
6.4 Premiere Subsidiaries...................................................................................... 30
6.5 SEC Filings; Financial Statements.......................................................................... 30
6.6 Absence of Undisclosed Liabilities......................................................................... 31
6.7 Absence of Certain Changes or Events....................................................................... 31
6.8 Compliance With Laws....................................................................................... 31
6.9 Legal Proceedings.......................................................................................... 32
6.10 Statements True and Correct................................................................................ 32
6.11 Accounting, and Regulatory Matters......................................................................... 33
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION..................................................................... 33
7.1 Affirmative Covenants of VTE............................................................................... 33
7.2 Negative Covenants of VTE.................................................................................. 33
7.3 Covenants of Premiere...................................................................................... 35
7.4 Adverse Changes in Condition............................................................................... 35
7.5 Reports.................................................................................................... 36
ARTICLE 8 - ADDITIONAL AGREEMENTS........................................................................................ 36
8.1 [Reserved]................................................................................................. 36
8.2 Exchange Listing........................................................................................... 36
8.3 Applications; Antitrust Notification....................................................................... 36
8.4 Filings with State Offices................................................................................. 36
8.5 Agreement as to Efforts to Consummate...................................................................... 37
8.6 Investigation and Confidentiality.......................................................................... 37
8.7 Press Releases............................................................................................. 37
8.8 Certain Actions............................................................................................ 38
8.9 Stockholder Releases....................................................................................... 38
8.10 Accounting Treatment....................................................................................... 38
8.11 State Takeover Laws........................................................................................ 39
8.12 Charter Provisions......................................................................................... 39
8.14 NonCompetition, Nonsolicitation and Nondisclosure.......................................................... 39
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ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE............................................................ 41
9.1 Conditions to Obligations of Each Party.................................................................... 41
9.2 Conditions to Obligations of Premiere...................................................................... 43
9.3 Conditions to Obligations of VTE and the Stockholders...................................................... 44
ARTICLE 10 - INDEMNIFICATION............................................................................................. 45
10.1 Agreement of Indemnitors to Indemnify...................................................................... 45
10.2 Procedures for Indemnification............................................................................. 46
10.3 Third Party Claims......................................................................................... 47
10.4 Limitations as to Amount................................................................................... 48
10.5 Tax Effect and Insurance................................................................................... 49
10.6 Subrogation................................................................................................. 49
10.7 Arbitration................................................................................................. 49
10.8 Exclusivity................................................................................................ 50
ARTICLE 11 - TERMINATION................................................................................................. 50
11.1 Termination................................................................................................ 50
11.2 Effect of Termination...................................................................................... 51
ARTICLE 12 - MISCELLANEOUS............................................................................................... 51
12.1 Definitions................................................................................................ 51
12.2 Expenses................................................................................................... 64
12.3 Brokers and Finders........................................................................................ 64
12.4 Entire Agreement........................................................................................... 64
12.5 Amendments................................................................................................. 64
12.6 Waivers.................................................................................................... 64
12.7 Assignment................................................................................................. 65
12.8 Notices.................................................................................................... 65
12.9 Governing Law.............................................................................................. 66
12.10 Counterparts................................................................................................ 66
12.11 Captions; Articles and Sections............................................................................. 67
12.12 Interpretations............................................................................................. 67
12.13 Enforcement of Agreement.................................................................................... 67
12.14 Severability................................................................................................ 67
12.15 Survival.................................................................................................... 67
SIGNATURES............................................................................................................... 68
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AGREEMENT AND PLAN OF MERGER
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THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of April 2, 1997, by and among PREMIERE TECHNOLOGIES, INC.
("Premiere"), a Georgia corporation; PTEK MERGER CORPORATION ("Sub"), a Delaware
corporation and wholly-owned subsidiary of Premiere; VOICE-TEL ENTERPRISES, INC.
("VTE"), a Delaware corporation; and the stockholders of VTE set forth on the
signature pages hereof (each a "Stockholder" and collectively the
"Stockholders").
PREAMBLE
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This Agreement provides for the acquisition of VTE by Premiere
pursuant to the merger of Sub with and into VTE. At the effective time of such
merger, the outstanding shares of the capital stock of VTE shall be converted
into shares of the common stock of Premiere (except as provided herein). As a
result, stockholders of VTE shall become stockholders of Premiere and VTE shall
continue to conduct its business and operations. The transactions described in
this Agreement are subject to the expiration of the required waiting period
under the HSR Act and the satisfaction of certain other conditions described in
this Agreement. It is the intention of the parties to this Agreement that the
Merger for federal income tax purposes shall qualify as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code, and for
accounting purposes shall qualify for treatment as a pooling of interests.
Certain terms used in this Agreement are defined in Section 121 of
this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
--------------------------------
1.1 MERGER. Subject to the terms and conditions of this Agreement, at
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the Effective Time, Sub shall be merged with and into VTE in accordance with the
provisions of Section 251 of the DGCL and with the effect provided in Section
259 of the DGCL (the "Merger"). VTE shall be the Surviving Corporation resulting
from the Merger and shall continue to be governed by the Laws of the State of
Delaware. The Merger shall be consummated pursuant to the terms of this
Agreement, which has been approved and adopted by the respective Boards of
Directors of VTE, Sub and Premiere.
1.2 TIME AND PLACE OF CLOSING. The closing of the transactions
-------------------------
contemplated hereby (the "Closing") will take place at 9:00 A.M. on the date
that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the Parties,
acting through their authorized officers, may mutually agree. The Closing
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shall be held at the offices of Alston & Bird LLP, Atlanta, Georgia, or at such
other location as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated
--------------
by this Agreement shall become effective on the date and at the time the
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Delaware (the "Effective Time").
1.4 TAX-FREE REORGANIZATION. The Parties intend to adopt this
-----------------------
Agreement as a tax-free plan of reorganization and to consummate the Merger in
accordance with the provisions of Sections 368(a)(1)(A) and 368(a)(2)(E) of the
Code. In this regard, Premiere represents that it currently intends, and that
on the Effective Date it will intend, to continue VTE's historic business or use
a significant portion of VTE's business assets in a business within the meaning
of Treasury Regulation Section 1.368-1(d).
ARTICLE 2
TERMS OF MERGER
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2.1 CHARTER. The Certificate of Incorporation of VTE in effect
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immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation until duly amended or repealed.
2.2 BYLAWS. The Bylaws of VTE in effect immediately prior to the
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Effective Time shall be the Bylaws of the Surviving Corporation until duly
amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of VTE in office
----------------------
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws of
the Surviving Corporation. The officers of VTE in office immediately prior to
the Effective Time, together with such additional persons as may thereafter be
elected, shall serve as the officers of the Surviving Corporation from and after
the Effective Time in accordance with the Bylaws of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
---------------------------
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article
--------------------
3, at the Effective Time, by virtue of the Merger and without any action on the
part of Premiere, VTE, or the stockholders of the foregoing, the shares of the
following corporations shall be converted as follows:
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(a) Each share of Premiere Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding from
and after the Effective Time.
(b) Each share of Sub Common Stock issued and outstanding immediately
prior to the Effective time shall cease to be outstanding and shall be
converted into one share of VTE Common Stock.
(c) Each share of VTE Common Stock (excluding shares held by any VTE
Entity or any Premiere Entity, and excluding shares held by stockholders who
perfect their statutory dissenters' rights as provided in Section 3.4) issued
and outstanding immediately prior to the Effective Time shall cease to be
outstanding and shall be converted into and exchanged for:
(i) the number of shares of Premiere Common Stock (rounded to
the nearest hundredth of a share) determined by dividing the product of
(A) either (1) .77 if the Amway Convertible Note is converted or (2) .71
if the Amway Convertible Note is not converted and (B) the Per Share
Purchase Price, by the Average Closing Price (the "Firm Exchange Ratio");
(ii) (subject to the provisions of Section 4.3) the number of
shares of Premiere Common Stock (rounded to the nearest hundredth of a
share) determined by dividing the product of .1 and the Per Share
Purchase Price by the Average Closing Price (the "General Escrow Exchange
Ratio");
(iii) (subject to the provisions of Section 4.3) the number of
shares of Premiere Common Stock (rounded to the nearest hundredth of a
share) determined by dividing the product of (A) either (1) .13 if the
Amway Convertible Note is converted or (2) .19 if the Amway Convertible
Note is not converted and (B) the Per Share Purchase Price, by the
Average Closing Price (the "Specific Escrow Exchange Ratio" and, together
with the Firm Exchange Ratio and the General Exchange Ratio, the
"Exchange Ratio").
(d) For purposes of the calculation under 3.1(c):
(i) the Per Share Purchase Price shall mean that value obtained
by dividing the VTE Purchase Price by the number of shares of VTE Common
Stock issued and outstanding immediately prior to the Effective Time;
(ii) the VTE Purchase Price shall mean $17,750,000 , less (A) the
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positive amount, if any, by which the aggregate level of Consolidated
Indebtedness of VTE at November 30, 1996 (excluding the Amway Convertible
Note, but including the $110,000 balance on VTE's line of credit with
National City Bank) exceeds $8,491,000, (B) the positive amount, if any,
by which the aggregate amount expended, incurred or committed by VTE to
purchase or redeem any shares of VTE
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Common Stock after November 30, 1996 (including purchases and redemptions
contemplated in Section 9.2(k)) exceed $1,347,000, (C) the positive
amount, if any, by which the aggregate amounts expended, incurred or
committed by VTE and VTNLP or any of their Subsidiaries from May 1, 1995
though and including the Effective Time for fees and expenses of
attorneys, accountants, investment bankers, and other consultants and
travel, entertainment, printing and other out of pocket costs associated
with the actions taken and transactions considered pursuant to the
engagement by VTE of Salomon Brothers Inc. described on Schedule 3.1(d)
of the VTE Disclosure Memorandum, including, without limitation, the
transactions contemplated with the parties described on Schedule 3.1(d)
of the VTE Disclosure Memorandum, exceed $1,500,000, (D) except to the
extent specifically reflected in the adjustments to the VTE Purchase
Price pursuant to clauses (B) or (C) above or to the extent specifically
reflected in the adjustments to the VTN Purchase Price under Section
3.1(d) of the VTN Merger Agreement, the aggregate amount paid, payable or
otherwise incurred or to be incurred in connection with satisfying the
obligations of VTE and the Stockholders or the conditions precedent to
the obligation of Premiere, in each case, whether contained in this
Agreement or in any agreement, certificate or instrument entered into or
delivered in connection herewith, including, without limitation,
satisfying the conditions set forth in Section 9.2(i) and resolving the
claim referred to in Section 9.2(m), and (E) .77 times the aggregate
principal balance of the Amway Convertible Note if the Amway Convertible
Note is not converted; and
(iii) the Average Closing Price shall mean the average of the
daily last sale prices for the shares of Premiere Common Stock for the
twenty (20) consecutive trading days on which such shares are actually
traded as over-the-counter securities and quoted on the Nasdaq National
Market (as reported by The Wall Street Journal or, if not reported
thereby, any other authoritative source selected by Premiere) ending at
the close of trading on the second trading day immediately preceding the
Closing Date); provided, that for purposes of this calculation, the
Average Closing Price shall be deemed to equal (i) $30.50 in the event
the Average Closing Price is greater than $30.50 or (ii) $22.50 in the
event the Average Closing Price is less than $22.50 (together, $30.50 and
$22.50 are referred to as the "Average Closing Price Limitations").
3.2 ANTI-DILUTION PROVISIONS. In the event Premiere changes the number of
------------------------
shares of Premiere Common Stock issued and outstanding prior to the Effective
Time as a result of a stock split, stock dividend, or similar recapitalization
with respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be after the
Exchange Ratio has been determined in accordance with Section 3.1(c). In that
event, prior to the Effective Time, (i) the Exchange Ratio and the Average
Closing Price Limitations shall be proportionately adjusted to the effect of the
stock split, stock dividend or recapitalization on the outstanding shares of
Premiere Common Stock, and (ii) if necessary, the anticipated Effective Time
shall be postponed for an appropriate period of time agreed upon by the parties
in order for
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the Average Closing Price to reflect the market effect of such stock split,
stock dividend, or similar recapitalization. Notwithstanding the foregoing,
Premiere covenants not to effect a stock split, stock dividend or
recapitalization prior to the Effective Time.
3.3 SHARES HELD BY VTE OR PREMIERE. Each of the shares of VTE Common
------------------------------
Stock held by any VTE Entity or by any Premiere Entity shall be canceled and
retired at the Effective Time and no consideration shall be issued in exchange
therefor.
3.4 [RESERVED]
3.5 FRACTIONAL SHARES. Notwithstanding any other provision of this
-----------------
Agreement, each holder of shares of VTE Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of Premiere Common Stock (after taking into account all certificates delivered
by such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of Premiere Common Stock
multiplied by the Average Closing Price used to establish the Exchange Ratio..
No such holder will be entitled to dividends, voting rights, or any other rights
as a stockholder in respect of any fractional shares.
3.6 STOCK OPTIONS.
-------------
(a) As of the Effective Time, each of the stock options listed in Section
5.4(b) of the VTE Disclosure Memorandum (the "VTE Stock Options") which is
outstanding as of the date hereof and has not expired as of the Effective Time
shall be assumed by Premiere and converted into an option (or a new substitute
option shall be granted) to purchase the number of shares of Premiere Common
Stock (rounded down to the nearest whole share) equal to the number of shares of
VTE Common Stock subject to the VTE Stock Option multiplied by the Exchange
Ratio at an exercise price per share of Premiere Common Stock (rounded to the
nearest penny) equal to the former exercise price per share of VTE Common Stock
under such option immediately prior to the Effective Time divided by the
Exchange Ratio; provided, however, that in the case of any VTE Stock Option to
-------- -------
which Section 421 of the Code applies by reason of its qualification under
Section 422 of the Code, the conversion formula shall be adjusted, if necessary,
to comply with Section 424(a) of the Code, provided however, no adjustment shall
be made which could, in the reasonable opinion of Arthur Andersen LLP, preclude
pooling of interests accounting treatment for the Merger. Except as provided
above, the converted or substituted options for Premiere Common Stock shall be
subject to substantially the same terms and conditions (including, without
limitation, expiration date, vesting and exercise provisions) as were applicable
to VTE Stock Options immediately prior to the Effective Time. Premiere
acknowledges that all outstanding VTE Stock Options specifically disclosed
herein will become fully vested immediately prior to the Effective Time in
accordance with the terms of the agreements relating thereto, except to the
-------------
extent that any such vesting would preclude pooling of interest accounting
- - --------------------------------------------------------------------------
treatment for the Merger.
- - ------------------------
(b) Premiere agrees that (i) within fifteen (15) days after the Effective
Time it will cause to be filed one or more registration statements on Form S-8
under the Securities Act, or amendments
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to its existing registration statements on Form S-8 or amendments to such other
registration statements as may be available, in order to register the Premiere
Common Stock issuable upon exercise of the aforesaid converted VTE Stock Options
(the "Underlying Stock"), provided, however, that no such Form S-8 is required
to be filed if Premiere has registered sufficient shares under its current S-8
to cover all the Underlying Stock plus all shares underlying stock options
currently outstanding and issuable not otherwise exempt from registration, and
(ii) at or prior to the Effective Time, Premiere shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of Premiere
Common Stock for delivery upon exercise of the options substituted pursuant to
this Section 3.6. The consummation of the Merger shall not be treated as a
termination of employment for purposes of the VTE Option Plans.
ARTICLE 4
EXCHANGE OF SHARES
------------------
4.1 EXCHANGE PROCEDURES. At the Effective Time, Premiere and VTE shall
-------------------
cause SunTrust, as the exchange agent selected by Premiere (the "Exchange
Agent") to mail to each holder of record of a certificate or certificates which
represented shares of VTE Common Stock immediately prior to the Effective Time
(the "Certificates") or, at the election of the respective Stockholders, deliver
to the Stockholder or his or its duly appointed representative at the Closing
appropriate transmittal materials and instructions (which shall specify that
delivery shall be effected, and risk of loss and title to such Certificates
shall pass, only upon proper delivery of such Certificates to the Exchange
Agent). The Certificate or Certificates of VTE Common Stock so delivered shall
be duly endorsed as the Exchange Agent may require. In the event of a transfer
of ownership of shares of VTE Common Stock represented by Certificates that are
not registered in the transfer records of VTE, the consideration provided in
Section 3.1 may be issued to a transferee if the Certificates representing such
shares are delivered to the Exchange Agent, accompanied by all documents
required to evidence such transfer and by evidence reasonably satisfactory to
the Exchange Agent that any applicable stock transfer taxes have been paid. If
any Certificate shall have been lost, stolen, mislaid or destroyed, upon receipt
of (i) an affidavit of that fact from the holder claiming such Certificate to be
lost, mislaid, stolen or destroyed, (ii) such bond, security or indemnity as
Premiere and the Exchange Agent may reasonably require and (iii) any other
documents necessary to evidence and effect the bona fide exchange thereof, the
Exchange Agent shall issue to such holder the consideration into which the
shares represented by such lost, stolen, mislaid or destroyed Certificate shall
have been converted. The Exchange Agent may establish such other reasonable and
customary rules and procedures in connection with its duties as it may deem
appropriate. On or promptly following the Effective Time, each holder of shares
of VTE Common Stock (other than shares to be canceled pursuant to Section 3.3 or
as to which statutory dissenters' rights have been perfected as provided in
Section 3.4) issued and outstanding at the Effective Time shall surrender the
Certificate or Certificates representing such shares to the Exchange Agent and
shall promptly upon surrender thereof (and at the Closing if so requested by the
Stockholder) receive in exchange therefor the consideration provided in Section
3.1, together with all undelivered dividends or distributions in respect of such
shares (without interest thereon) pursuant to Section 4.2. To the extent
required by Section 3.5, each holder of shares of VTE Common Stock issued and
outstanding at the Effective Time also shall receive,
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upon surrender of the Certificate or Certificates, cash in lieu of any
fractional share of Premiere Common Stock to which such holder may be otherwise
entitled (without interest). Premiere shall not be obligated to deliver the
certificates for or other consideration to which any former holder of VTE Common
Stock is entitled as a result of the Merger until such holder surrenders such
holder's Certificate or Certificates for exchange as provided in this Section
4.1. Any other provision of this Agreement notwithstanding, neither Premiere nor
the Exchange Agent shall be liable to a holder of VTE Common Stock for any
amounts paid or property delivered in good faith to a public official pursuant
to any applicable abandoned property, escheat or similar Law. Adoption of this
Agreement by the stockholders of VTE shall constitute ratification of the
appointment of the Exchange Agent.
4.2 RIGHTS OF FORMER VTE STOCKHOLDERS. At the Effective Time, the stock
---------------------------------
transfer books of VTE shall be closed as to holders of VTE Common Stock
immediately prior to the Effective Time and no transfer of VTE Common Stock by
any such holder shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 4.1, each Certificate
theretofore representing shares of VTE Common Stock (other than shares to be
canceled pursuant to Sections 3.3 and 3.4) shall from and after the Effective
Time represent for all purposes only the right to receive the consideration
provided in Sections 3.1 and 3.5 in exchange therefor,. To the extent permitted
by Law, former stockholders of record of VTE shall be entitled to vote after the
Effective Time at any meeting of Premiere stockholders the number of whole
shares of Premiere Common Stock into which their respective shares of VTE Common
Stock are converted, regardless of whether such holders have exchanged their
Certificates for certificates representing Premiere Common Stock in accordance
with the provisions of this Agreement. Whenever a dividend or other distribution
is declared by Premiere on the Premiere Common Stock, the record date for which
is at or after the Effective Time, the declaration shall include dividends or
other distributions on all shares of Premiere Common Stock issuable pursuant to
this Agreement, but no dividend or other distribution payable to the holders of
record of Premiere Common Stock as of any time subsequent to the Effective Time
shall be delivered to the holder of any Certificate until such holder surrenders
such Certificate for exchange as provided in Section 4.1. However, upon
surrender of such Certificate, both the Premiere Common Stock certificate
(together with all such undelivered dividends or other distributions without
interest) and any undelivered dividends and cash payments payable hereunder
(without interest) shall be delivered and paid with respect to each share
represented by such Certificate.
4.3 ESCROW AGREEMENT. In connection with the Closing, Premiere and the
----------------
Stockholders shall have executed and delivered to the other an escrow agreement
(the "General Escrow Agreement"), which shall be in the form of Exhibit 1 and
another escrow agreement (the "Specific Escrow Agreement"), which shall be in
the form of Exhibit 2. The shares of Premiere Common Stock to be issued
pursuant to Section 3.1(c)(ii) shall be issued and held by SunTrust, as escrow
agent pursuant to the terms of the General Escrow Agreement, and the shares of
Premiere Common Stock to be issued pursuant to Section 3.1(c)(iii) shall be
issued and held by SunTrust, as escrow agent pursuant to the terms of the
Specific Escrow Agreement.
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4.4 LEGENDING OF SECURITIES; POOLING RESTRICTIONS. Each certificate for
---------------------------------------------
Premiere Common Stock to be issued to the Stockholders as part of the Purchase
Price shall bear the following legend:
"The securities represented hereby have not been registered under the
Securities Act of 1933, as amended, and may not be offered, sold, transferred
or otherwise disposed of unless registered with the Securities and Exchange
Commission of the United States and the securities regulatory authorities of
applicable states or unless an exemption from such registration is
available."
Because the Merger will be accounted for using the pooling-of-interests method
of accounting, each Stockholder agrees that such Stockholder will not sell,
transfer or otherwise reduce such Stockholder's risks relative to the shares of
VTE Common Stock held by such Stockholder, except as contemplated by this
Agreement and will not sell, transfer or otherwise reduce such Stockholder's
risk relative to the shares of Premiere Common Stock to be received by each
Stockholder upon consummation of the Merger until such time as Premiere notifies
the undersigned that the requirements of SEC Accounting Series Release Nos. 130
and 135 ("ASR 130 and 135") have been met. Each Stockholder understands that
ASR 130 and 135 relate to publication of financial results of post-Closing
combined operations of Premiere and VTE covering a period of at least 30 days of
post-Closing combined operating results. Premiere agrees that it will publish
such results within 45 days after the end of the first fiscal quarter of
Premiere containing the required period of post-Closing combined operations and
that it will notify the undersigned promptly following such publication.
Premiere shall be entitled to place restrictive legends on the shares of
Premiere Common Stock issued to the Stockholders pursuant to the Merger to
enforce the foregoing restrictions.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF VTE AND THE STOCKHOLDERS
----------------------------------------------------------
The Stockholders and VTE, jointly and severally, hereby represent and
warrant to Premiere as follows (provided that Amway, as a Stockholder of VTE,
makes only the representations and warranties in Section 5.28 and unless
otherwise noted, for purposes of this Article 5, the term "Stockholder" does not
include Amway):
5.1 ORGANIZATION, STANDING, AND POWER. VTE is a corporation duly
---------------------------------
organized, validly existing, and in good standing under the Laws of the State of
Delaware, and has the corporate power and authority to carry on its business as
now conducted and to own, lease and operate its Assets. VTE is duly qualified or
licensed to transact business as a foreign corporation in good standing in the
States of the United States and foreign jurisdictions where the character of its
Assets or the nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have, individually or in the
aggregate, a VTE Material Adverse Effect. The minute book and other
organizational documents for VTE have been made available to Premiere for its
review and, except as disclosed in Section 5.1 of the VTE Disclosure Memorandum,
are true and complete in
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all material respects as in effect as of the date of this Agreement and
accurately reflect in all material respects all amendments thereto and all
proceedings of the Board of Directors and stockholders thereof.
5.2 AUTHORITY OF VTE; NO BREACH BY AGREEMENT.
----------------------------------------
(a) VTE has the corporate power and authority necessary to execute,
deliver, and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part
of VTE, subject to the approval of this Agreement by the holders of a
majority of the outstanding shares of VTE Common Stock, which is the only
stockholder vote required for approval of this Agreement and consummation of
the Merger by VTE. Subject to such requisite stockholder approval, this
Agreement represents a legal, valid, and binding obligation of VTE,
enforceable against VTE in accordance with its terms (except in all cases as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
may be brought).
(b) Neither the execution and delivery of this Agreement by VTE, nor
the consummation by VTE of the transactions contemplated hereby, nor
compliance by VTE with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of VTE's Certificate of Incorporation
or Bylaws or the certificate or articles of incorporation or bylaws of any
VTE Subsidiary or any resolution adopted by the board of directors or the
stockholders of any VTE Entity, or (ii) except as disclosed in Section 5.2 of
the VTE Disclosure Memorandum, constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of any VTE Entity under, any Contract or Permit of any VTE Entity,
where such Default or Lien, or any failure to obtain such Consent, is
reasonably likely to have, individually or in the aggregate, a VTE Material
Adverse Effect, or, (iii) subject to receipt of the requisite Consents
referred to in Section 91(b), constitute or result in a Default under, or
require any Consent pursuant to, any Law or Order applicable to any VTE
Entity or any of their respective material Assets (including any Premiere
Entity or any VTE Entity becoming subject to or liable for the payment of any
Tax or any of the Assets owned by any Premiere Entity or any VTE Entity being
reassessed or revalued by any Taxing authority).
(c) Other than notices under the HSR Act and a Certificate of Merger
with the Secretary of State of the State of Delaware, no notice to, filing
with, or Consent of, any public body or authority is necessary for the
consummation by VTE of the Merger and the other transactions contemplated in
this Agreement.
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<PAGE>
5.3 AUTHORITY OF STOCKHOLDERS; NO BREACH BY AGREEMENT.
-------------------------------------------------
(a) Each of the Stockholders has the absolute and unrestricted right,
power, authority, and capacity to execute and deliver this Agreement and the
Stockholders' Closing Documents and to perform its obligations under this
Agreement and the Stockholders' Closing Documents. This Agreement represents
a legal, valid, and binding obligation of each Stockholder, enforceable
against each Stockholder in accordance with its terms (except in all cases as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
may be brought). Upon the execution and delivery by the Stockholders of the
Stockholders' Closing Documents, the Stockholders' Closing Documents will
constitute the legal, valid, and binding obligations of each Stockholder,
enforceable against each Stockholder in accordance with their respective
terms.
(b) Neither the execution and delivery of this Agreement by any
Stockholder, nor the consummation by any Stockholder of the transactions
contemplated hereby, nor compliance by any Stockholder with any of the
provisions hereof, will (i) conflict with or result in a breach of any
provision of VTE's Certificate of Incorporation or Bylaws or the certificate
or articles of incorporation or bylaws of any VTE Subsidiary or the governing
instruments of any Stockholder that is not a natural person, or (ii) except
as disclosed in Section 5.3 of the VTE Disclosure Memorandum, constitute or
result in a Default under, or require any Consent pursuant to, or result in
the creation of any Lien on any Asset of any VTE Entity under, any Contract
or Permit of any VTE Entity, where such Default or Lien, or any failure to
obtain such Consent, is reasonably likely to have, individually or in the
aggregate, a VTE Material Adverse Effect, or, (iii) subject to receipt of the
requisite Consents referred to in Section 9.1(b), violate any Law or Order
applicable to any Stockholder or to any VTE Entity or any of their respective
material Assets.
(c) Other than notices under the HSR Act, no notice to, filing with,
or Consent of, any public body or authority is necessary for the consummation
by the Stockholders of the transactions contemplated in this Agreement.
5.4 CAPITAL STOCK.
-------------
(a) The authorized capital stock of VTE consists of 3,000 shares of
VTE Common Stock, of which (i) 2,500 are designated as Class A shares and of
which 330 shares are issued and outstanding as of the date of this Agreement
and not more than 425.75 shares (assuming the VTE Options are not exercised
before the Effective Time) will be issued and outstanding at the Effective
Time, and (ii) 500 shares are designated as Class B shares and of which 37.5
shares are issued and outstanding as of the date of this Agreement and not
more than 37.5 shares will be issued and outstanding at the Effective Time.
All of the issued and outstanding shares of capital stock of VTE are duly and
validly issued and outstanding and are fully paid and nonassessable. None
of the outstanding shares of capital
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<PAGE>
stock of VTE has been issued in violation of any preemptive rights of the
current or past stockholders of VTE or of the Securities Laws or any state
blue sky or securities Laws.
(b) Except as set forth in Section 5.4(a) or as disclosed in Section
5.4(b) of the VTE Disclosure Memorandum, there are no shares of capital stock
or other equity securities of VTE outstanding and no outstanding Equity
Rights relating to the capital stock of VTE. Each of the Stockholders is the
owner of all right, title and interest (legal and beneficial) in and to that
number or amount of Shares set forth next to his name in Section 5.4(a) of
the VTE Disclosure Memorandum, free and clear of all Liens. Collectively,
the Stockholders own all right, title and interest (legal and beneficial) in
and to all of the issued and outstanding shares of VTE's capital stock.
Except as specifically contemplated by this Agreement, no Person has any
Contract or any right or privilege (whether pre-emptive or contractual)
capable of becoming a Contract for the purchase from the Stockholders of any
of the Shares, or any Contract or Equity Right for the purchase, subscription
or issuance of any securities of VTE.
5.5 VTE SUBSIDIARIES. VTE has disclosed in Section 5.5 of the VTE
----------------
Disclosure Memorandum all of the VTE Subsidiaries that are corporations
(identifying its jurisdiction of incorporation, each jurisdiction in which it is
qualified and/or licensed to transact business, and the number of shares owned
and percentage ownership interest represented by such share ownership) and all
of the VTE Subsidiaries that are general or limited partnerships, limited
liability companies, or other non-corporate entities (identifying the Law under
which such entity is organized, each jurisdiction in which it is qualified
and/or licensed to transact business, and the amount and nature of the ownership
interest therein). Except as disclosed in Section 5.5 of the VTE Disclosure
Memorandum, VTE or one of its wholly-owned Subsidiaries owns all of the issued
and outstanding shares of capital stock (or other equity interests) of each VTE
Subsidiary. No capital stock (or other equity interest) of any VTE Subsidiary is
or may become required to be issued (other than to another VTE Entity) by reason
of any Equity Rights, and there are no Contracts by which any VTE Subsidiary is
bound to issue (other than to another VTE Entity) additional shares of its
capital stock (or other equity interests) or Equity Rights or by which any VTE
Entity is or may be bound to transfer any shares of the capital stock (or other
equity interests) of any VTE Subsidiary (other than to another VTE Entity).
There are no Contracts relating to the rights of any VTE Entity to vote or to
dispose of any shares of the capital stock (or other equity interests) of any
VTE Subsidiary. All of the shares of capital stock (or other equity interests)
of each VTE Subsidiary held by a VTE Entity are fully paid and nonassessable and
are owned by the VTE Entity free and clear of any Lien. Except as disclosed in
Section 5.5 of the VTE Disclosure Memorandum, each VTE Subsidiary is a
corporation, and each such Subsidiary is duly organized, validly existing, and
(as to corporations) in good standing under the Laws of the jurisdiction in
which it is incorporated or organized, and has the corporate power and authority
necessary for it to own, lease, and operate its Assets and to carry on its
business as now conducted. Each VTE Subsidiary is duly qualified or licensed to
transact business as a foreign corporation in good standing in the States of the
United States and foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
VTE Material Adverse Effect. The minute book and
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other organizational documents for each VTE Subsidiary have been made available
to Premiere for its review, and, except as disclosed in Section 5.5 of the VTE
Disclosure Memorandum, are true and complete in all material respects as in
effect as of the date of this Agreement and accurately reflect in all material
respects all amendments thereto and all proceedings of the Board of Directors
and stockholders thereof.
5.6 FINANCIAL STATEMENTS. Each of the VTE Financial Statements
--------------------
(including, in each case, any related notes) was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes to such financial statements), and fairly
presented in all material respects the consolidated financial position of VTE
and its Subsidiaries as at the respective dates and the consolidated results of
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring year-
end adjustments which were not or are not expected to be material in amount or
effect.
5.7 ABSENCE OF UNDISCLOSED LIABILITIES. No VTE Entity has any Liabilities
----------------------------------
that are reasonably likely to have, individually or in the aggregate, a VTE
Material Adverse Effect, except Liabilities which are accrued or reserved
against in the consolidated balance sheet of VTE as of December 31, 1996
included in the VTE Financial Statements delivered prior to the date of this
Agreement or reflected in the notes thereto. No VTE Entity has incurred or paid
any Liability since December 31, 1996, except for such Liabilities incurred or
paid (i) in the ordinary course of business consistent with past business
practice and which are not reasonably likely to have, individually or in the
aggregate, a VTE Material Adverse Effect or (ii) in connection with the
transactions contemplated by this Agreement. Except as disclosed in Section 5.7
of the VTE Disclosure Memorandum, no VTE Entity is directly or indirectly
liable, by guarantee, indemnity, or otherwise, upon or with respect to, or
obligated, by discount or repurchase agreement or in any other way, to guarantee
or assume any Liability of any Person for any amount in excess of $10,000.
5.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1996, except
------------------------------------
as disclosed in the VTE Financial Statements delivered prior to the date of this
Agreement or as disclosed in Section 5.8 of the VTE Disclosure Memorandum, (i)
there have been no events, changes, or occurrences which have had, or are
reasonably likely to have, individually or in the aggregate, a VTE Material
Adverse Effect, and (ii) the VTE Entities have not taken any action, or failed
to take any action, prior to the date of this Agreement, which action or
failure, if taken after the date of this Agreement, would represent or result in
a material breach or violation of any of the covenants and agreements of VTE
provided in Article 7.
5.9 TAX MATTERS.
-----------
(a) All Tax Returns required to be filed by or on behalf of any of
the VTE Entities have been timely filed (including without limitation Tax
Returns filed in accordance with extensions granted) or requests for
extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1996, and on or before the date of the most
recent fiscal year end immediately preceding the Effective Time, and all Tax
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Returns filed are complete and accurate in all material respects. All Taxes
shown on filed Tax Returns have been paid. As of the date of this Agreement,
there is no audit examination, deficiency, or refund Litigation with respect
to any Taxes, except as reserved against in the VTE Financial Statements
delivered prior to the date of this Agreement or as disclosed in Section 5.9
of the VTE Disclosure Memorandum. VTE's federal income Tax Returns have been
audited by the IRS and accepted through December 31, 1991. All Taxes and
other Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid. There are no Liens with respect to
Taxes upon any of the Assets of the VTE Entities, except for any such Liens
which are not reasonably likely to have a VTE Material Adverse Effect.
(b) None of the VTE Entities has executed an extension or waiver of
any statute of limitations on the assessment or collection of any Tax due
(excluding such statutes that relate to years currently under examination by
the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) The provision for any Taxes due or to become due for any of the
VTE Entities for the period or periods through and including the date of the
most recent VTE Financial Statements that has been made and is reflected on
such VTE Financial Statements is sufficient to cover all such Taxes.
(d) Deferred Taxes of the VTE Entities have been provided for in
accordance with GAAP.
(e) None of the VTE Entities is a party to any Tax allocation or
sharing agreement and none of the VTE Entities has been a member of an
affiliated group filing a consolidated federal income Tax Return (other than
a group the common parent of which was VTE) has any Liability for Taxes of
any Person (other than VTE and its Subsidiaries) under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign Law) as
a transferee or successor or by Contract or otherwise.
(f) Each of the VTE Entities is in compliance with, and its records
contain all information and documents (including properly completed IRS Forms
W-9) necessary to comply with, all applicable information reporting and Tax
withholding requirements under federal, state, and local Tax Laws.
(g) Except as disclosed in Section 5.9 of the VTE Disclosure
Memorandum, none of the VTE Entities has made any payments, is obligated to
make any payments, or is a party to any Contract that could obligate it to
make any payments that could be disallowed as a deduction under Section 280G
or 162(m) of the Code.
(h) Except as disclosed in Section 5.9 of the VTE Disclosure
Memorandum, no VTE Entity has or has had in any foreign country a permanent
establishment, as defined in any applicable tax treaty or convention between
the United States and such foreign country.
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5.10 ASSETS.
------
(a) Except as disclosed in Section 5.10 of the VTE Disclosure
Memorandum or as disclosed or reserved against in the VTE Financial
Statements delivered prior to the date of this Agreement, the VTE Entities
have good and marketable title, free and clear of all Liens, to all of their
respective Assets, except for any such Liens or other defects of title which
are not reasonably likely to have a VTE Material Adverse Effect. All
tangible properties used in the businesses of the VTE Entities are in good
condition, reasonable wear and tear excepted, and are usable in the ordinary
course of business consistent with VTE's past practices.
(b) All items of inventory of the VTE Entities reflected on the most
recent balance sheet included in the VTE Financial Statements delivered prior
to the date of this Agreement and prior to the Effective Time consisted and
will consist, as applicable, of items of a quality and quantity usable and
saleable in the ordinary course of business and conform to generally accepted
standards in the industry in which the VTE Entities are a part.
(c) The accounts receivable of the VTE Entities as set forth on the
most recent balance sheet included in the VTE Financial Statements delivered
prior to the date of this Agreement or arising since the date thereof are
valid and genuine; have arisen solely out of bona fide sales and deliveries
of goods, performance of services and other business transactions in the
ordinary course of business consistent with past practice; are not subject to
valid defenses, set-offs or counterclaims; and are collectible within 90 days
after billing at the full recorded amount thereof less, in the case of
accounts receivable appearing on the most recent balance sheet included in
the VTE Financial Statements delivered prior to the date of this Agreement,
the recorded allowance for collection losses on such balance sheet. The
allowance for collection losses on such balance sheet has been determined in
accordance with GAAP.
(d) All Assets which are material to VTE's business on a consolidated
basis, held under leases or subleases by any of the VTE Entities, are held
under valid Contracts enforceable in accordance with their respective terms
(except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceedings may be
brought), and each such Contract is in full force and effect.
(e) The VTE Entities currently maintain insurance similar in amounts,
scope, and coverage to that maintained by other peer organizations. None of
the VTE Entities has received notice from any insurance carrier that (i) any
policy of insurance will be canceled or that coverage thereunder will be
reduced or eliminated, or (ii) premium costs with respect to such policies of
insurance will be substantially increased. There are presently no claims for
amounts exceeding in any individual case $10,000 pending under such policies
of insurance
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and no notices of claims in excess of such amounts have been given by
any VTE Entity under such policies.
(f) The Assets of the VTE Entities include all Assets
required to operate the business of the VTE Entities as presently
conducted.
5.11 INTELLECTUAL PROPERTY
---------------------
(a) Section 5.11(a)(i) of the VTE Disclosure Memorandum
sets forth (i) a brief description of each VTE Intellectual Property
Right, and (ii) with respect to each VTE Intellectual Property Right
registered or capable of registration with any Regulatory Authority or
for which an application for registration has been filed with any
Regulatory Authority, the names of the jurisdictions covered by the
applicable registration or application, if any. Section 5.11(a)(ii) of
the VTE Disclosure Memorandum identifies and provides a brief
description of each Intellectual Property Right licensed to any VTE
Entity by any Person (except for any Intellectual Property Right that is
licensed to any VTE Entity under any third party software license
generally available to the public at a cost of less than Ten Thousand
Dollars ($10,000)), and identifies the license agreement under which
such Intellectual Property Right is being licensed to such VTE Entity.
No VTE Entity is in Default under any such license agreements. Except as
set forth in Section 5.11(a)(iii) of the VTE Disclosure Memorandum, the
VTE Entities have, and following consummation of the transactions
contemplated hereby, shall have valid and marketable title to all VTE
Intellectual Property Rights used in or reasonably necessary for the
conduct of their business free and clear of all liens and other
encumbrances, except for third party Intellectual Property Rights
licensed to any such VTE Entity, as to which it has a valid right to use
with respect to such VTE Intellectual Property Rights. No present or
former employee or owner of any VTE Entity and no other Person owns or
has any proprietary, financial or other interest, direct or indirect, in
whole or in part, in any Intellectual Property Right which any VTE
Entity owns, possesses or uses in its operations as now or heretofore
conducted. All personnel, including employees, agents, consultants, and
contractors, who have contributed to or participated in the conception
and development of any VTE Intellectual Property Right (i) have been
party to a "work-for-hire" relationship with a VTE Entity that has
accorded the VTE Entity full, effective, and exclusive original
ownership of all tangible and intangible property thereby arising with
respect to such VTE Intellectual Property Right, and/or (ii) have
executed appropriate instruments of assignment or license in favor of a
VTE Entity as assignee that have conveyed to a VTE Entity full,
effective, and exclusive ownership or use of all tangible and intangible
property thereby arising with respect to such VTE Intellectual Property
Right. Except as set forth in Section 5.11(a)(iv) of the VTE Disclosure
Memorandum, no VTE Entity is obligated to make any material payment to
any Person for the use of any VTE Intellectual Property Right. Except as
set forth in Section 5.11(a)(v) of the VTE Disclosure Memorandum, no VTE
Entity has developed jointly with any other Person any VTE Intellectual
Property Right with respect to which such other Person has any rights.
Each VTE Entity is the owner of or has a license to any Intellectual
Property Right sold or licensed to a third party by such VTE Entity in
connection with such VTE
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<PAGE>
Entity's business operations, and such VTE Entity has the right to
convey by sale or license any Intellectual Property Rights so conveyed.
(b) Except as set forth in Section 5.11(b) of the VTE
Disclosure Memorandum, each VTE Entity has taken all reasonable and
customary measures and precautions necessary to protect and maintain the
confidentiality and secrecy of all VTE Intellectual Property Rights
(except VTE Intellectual Property Rights whose value would be unimpaired
by public disclosure) and otherwise to maintain and protect the value of
all VTE Intellectual Property Rights. Except as set forth in Section
5.11(b) of the VTE Disclosure Memorandum, no VTE Entity has disclosed or
delivered, or permitted the disclosure or delivery to any Person of the
source code, or any portion or aspect of the source code, of any VTE
Intellectual Property Rights.
(c) No VTE Entity is infringing, misappropriating or making
any unlawful use of, and no VTE Entity has at any time infringed,
misappropriated or made any unlawful use of, and, except as set forth in
Section 5.11(c) of the VTE Disclosure Memorandum, no VTE Entity has
received any notice or other communication (in writing or otherwise) of
any actual, alleged, possible or potential infringement,
misappropriation or unlawful use of, any Intellectual Property Right
owned or used by any other Person. To the Knowledge of VTE, no other
Person is infringing, misappropriating or making any unlawful use of,
and no Intellectual Property Right owned or used by any other Person
infringes or conflicts with, any VTE Intellectual Property Right.
(d) The VTE Intellectual Property Rights constitute all the
Intellectual Property Rights reasonably deemed necessary to enable any
VTE Entity to conduct its business in the manner in which such business
has been and is being conducted. No VTE Entity has licensed any of the
VTE Intellectual Property Rights to any Person on an exclusive basis
and, except as set forth in Section 5.11(d) of the VTE Disclosure
Memorandum, no VTE Entity has entered into any covenant not to compete
or Contract limiting its ability to exploit fully any of the VTE
Intellectual Property Rights or to transact business in any market or
geographical area or with any Person.
(e) Except as disclosed in Section 5.11(e) of the VTE
Disclosure Memorandum, every officer, director, or employee of any VTE
Entity is a party to a Contract which requires such officer, director or
employee to assign any interest in any Intellectual Property Right to
any VTE Entity and to keep confidential any trade secrets, proprietary
data, customer information, or other business information of any VTE
Entity, and no such officer, director or employee is party to any
Contract with any Person other than a VTE Entity which requires such
officer, director or employee to assign any interest in any Intellectual
Property Right to any Person other than a VTE Entity or to keep
confidential any trade secrets, proprietary data, customer information,
or other business information of any Person other than a VTE Entity.
Except as disclosed in Section 5.11(e) of the VTE Disclosure Memorandum,
no officer, director or employee of any VTE Entity is party to any
Contract which restricts or prohibits such officer, director or employee
from engaging in activities competitive with any Person, including any
VTE Entity.
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5.12 ENVIRONMENTAL MATTERS.
---------------------
(a) Each VTE Entity, its Participation Facilities, and its
Operating Properties are, and have been, in compliance with all
Environmental Laws, except for violations which are not reasonably
likely to have, individually or in the aggregate, a VTE Material Adverse
Effect.
(b) There is no Litigation pending or, to the Knowledge of
VTE, threatened before any court, governmental agency, or authority or
other forum in which any VTE Entity or any of its Operating Properties
or Participation Facilities (or VTE in respect of such Operating
Property or Participation Facility) has been or, with respect to
threatened Litigation, may be named as a defendant (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release, discharge, spillage, or disposal into
the environment of any Hazardous Material, whether or not occurring at,
on, under, adjacent to, or affecting (or potentially affecting) a site
owned, leased, or operated by any VTE Entity or any of its Operating
Properties or Participation Facilities, except for such Litigation
pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a VTE Material Adverse Effect, nor is
there any reasonable basis for any Litigation of a type described in
this sentence, except such as is not reasonably likely to have,
individually or in the aggregate, a VTE Material Adverse Effect.
(c) During the period of (i) any VTE Entity's ownership or
operation of any of their respective current properties, (ii) any VTE
Entity's participation in the management of any Participation Facility,
or (iii) any VTE Entity's holding of a security interest in a Operating
Property, there have been no releases, discharges, spillages, or
disposals of Hazardous Material in, on, under, adjacent to, or affecting
(or potentially affecting) such properties, except such as are not
reasonably likely to have, individually or in the aggregate, a VTE
Material Adverse Effect. Prior to the period of (i) any VTE Entity's
ownership or operation of any of their respective current properties,
(ii) any VTE Entity's participation in the management of any
Participation Facility, or (iii) any VTE Entity's holding of a security
interest in a Operating Property, there were no releases, discharges,
spillages, or disposals of Hazardous Material in, on, under, or
affecting any such property, Participation Facility or Operating
Property, except such as are not reasonably likely to have, individually
or in the aggregate, a VTE Material Adverse Effect.
5.13 COMPLIANCE WITH LAWS. Except as disclosed in Section
----------------------
5.13 of the VTE Disclosure Memorandum, since January 1, 1986, each VTE Entity
has had in effect all Permits necessary for it to own, lease, or operate its
material Assets and to carry on its business as it has been, and as it is
currently, conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a VTE Material
Adverse Effect, and there has occurred no Default under any such Permit, other
than Defaults which are not reasonably likely to have, individually or in the
aggregate, a VTE Material Adverse Effect. Except as disclosed in Section 5.13 of
the VTE Disclosure Memorandum, none of the VTE Entities:
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(a) is in Default under any of the provisions of its
Certificate of Incorporation or Bylaws (or other governing instruments);
(b) is in Default under any Laws, Orders, or Permits
applicable to its business or employees conducting its business, except
for Defaults which are not reasonably likely to have, individually or in
the aggregate, a VTE Material Adverse Effect; or
(c) since January 1, 1993, has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i)
asserting that any VTE Entity is not in compliance with any of the Laws
or Orders which such governmental authority or Regulatory Authority
enforces, where such noncompliance is reasonably likely to have,
individually or in the aggregate, a VTE Material Adverse Effect, (ii)
threatening to revoke any Permits, the revocation of which is reasonably
likely to have, individually or in the aggregate, a VTE Material Adverse
Effect, or (iii) requiring any VTE Entity to enter into or consent to
the issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or to adopt any Board
resolution or similar undertaking.
Copies of all material reports, correspondence, notices and other documents
relating to any inspection, audit, monitoring or other form of review or
enforcement action by a Regulatory Authority have been made available to
Premiere.
5.14 LABOR RELATIONS. No VTE Entity is the subject of any
---------------
Litigation asserting that it or any other VTE Entity has committed an unfair
labor practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it or any other VTE Entity to bargain
with any labor organization as to wages or conditions of employment, nor is any
VTE Entity party to any collective bargaining agreement, nor is there any strike
or other labor dispute involving any VTE Entity, pending or threatened, or to
the Knowledge of VTE, is there any activity involving any VTE Entity's employees
seeking to certify a collective bargaining unit or engaging in any other
organization activity.
5.15 EMPLOYEE BENEFIT PLANS.
----------------------
(a) VTE has disclosed in Section 5.15 of the VTE Disclosure
Memorandum, and has delivered or made available to Premiere prior to the
execution of this Agreement copies in each case of, all pension,
retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus, or other
incentive plan, all other written employee programs, arrangements, or
agreements, all medical, vision, dental, or other health plans, all life
insurance plans, and all other employee benefit plans or fringe benefit
plans, including "employee benefit plans" as that term is defined in
Section 3(3) of ERISA, currently adopted, maintained by, sponsored in
whole or in part by, or contributed to by any VTE Entity or ERISA
Affiliate thereof for the benefit of employees, retirees, dependents,
spouses, directors, independent contractors, or other beneficiaries and
under which employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries are eligible to
participate (collectively, the "VTE Benefit Plans"). Any
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of the VTE Benefit Plans which is an "employee pension benefit plan," as
that term is defined in Section 3(2) of ERISA, other than those plans
described in Section 201(2) of ERISA, is referred to herein as a "VTE
ERISA Plan." No VTE ERISA Plan is subject to Title IV of ERISA. Section
5.15 of the VTE Disclosure Memorandum sets forth a list and brief
description of each VTE Benefit Plan, including a designation of whether
such VTE Benefit Plan is a VTE ERISA Plan.
(b) Except as described in Section 5.15(b) of the VTE
Disclosure Memorandum, all VTE Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other
applicable Laws the breach or violation of which are reasonably likely
to have, individually or in the aggregate, a VTE Material Adverse
Effect. Each VTE ERISA Plan which is intended to be qualified under
Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the Internal Revenue Service, and VTE is not
aware of any circumstances likely to result in revocation of any such
favorable determination letter. No VTE Entity has engaged in a
transaction with respect to any VTE Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof, would
subject any VTE Entity to a Tax imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA.
(c) Within the six-year period preceding the Effective
Time, no Liability under Subtitle C or D of Title IV of ERISA has been
or is expected to be incurred by any VTE Entity with respect to any
ongoing, frozen, or terminated single-employer plan or the
single-employer plan of any ERISA Affiliate, which Liability is
reasonably likely to have a VTE Material Adverse Effect. No VTE Entity
has incurred any withdrawal Liability with respect to a multiemployer
plan under Subtitle B of Title IV of ERISA (regardless of whether based
on contributions of an ERISA Affiliate), which Liability is reasonably
likely to have a VTE Material Adverse Effect. No notice of a "reportable
event," within the meaning of Section 4043 of ERISA for which the 30-day
reporting requirement has not been waived, has been required to be filed
for any VTE Pension Plan or by any ERISA Affiliate within the 12-month
period ending on the date hereof.
(d) Except as disclosed in Section 5.15 of the VTE
Disclosure Memorandum, no VTE Entity has any Liability for retiree
health and life benefits under any of the VTE Benefit Plans and there
are no restrictions on the rights of such VTE Entity to amend or
terminate any such retiree health or benefit Plan without incurring any
Liability thereunder, which Liability is reasonably likely to have a VTE
Material Adverse Effect.
(e) Except as disclosed in Section 5.15 of the VTE
Disclosure Memorandum, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
will (i) result in any payment (including severance, unemployment
compensation, golden parachute, or otherwise) becoming due to any
director or any employee of any VTE Entity from any VTE Entity under any
VTE Benefit Plan or otherwise, (ii) increase any benefits otherwise
payable under any VTE Benefit Plan, or (iii) result in any acceleration
of the time of payment or vesting of any such benefit, where
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such payment, increase, or acceleration is reasonably likely to have,
individually or in the aggregate, a VTE Material Adverse Effect.
(f) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of
employees and former employees of any VTE Entity and their respective
beneficiaries, other than entitlements accrued pursuant to funded
retirement plans subject to the provisions of Section 412 of the
Internal Revenue Code or Section 302 of ERISA, have been fully reflected
on the VTE Financial Statements to the extent required by and in
accordance with GAAP.
5.16 CERTAIN CONTRACTS. Except as disclosed in Section 5.16 of
-----------------
the VTE Disclosure Memorandum or otherwise reflected in the VTE Financial
Statements, none of the VTE Entities, nor any of their respective Assets,
businesses, or operations, is a party to, or is bound or affected by, or
receives benefits under, (i) any employment, severance, termination, consulting,
or retirement Contract providing for aggregate payments to any Person in any
calendar year in excess of $50,000, (ii) any Contract relating to the borrowing
of money by any VTE Entity or the guarantee by any VTE Entity of any such
obligation (other than Contracts evidencing trade payables), (iii) any Contract
which prohibits or restricts any VTE Entity from engaging in any business
activities in any geographic area, line of business or otherwise in competition
with any other Person, (iv) any Contract between or among VTE Entities,
Stockholders, any director, officer or employee of any VTE Entity and/or Related
Persons, (v) any Contract involving Intellectual Property Rights (other than
Contracts entered into in the ordinary course with customers and "shrink-wrap"
software licenses), (vi) any Contract relating to the provision of data
processing, network communication, or other technical services to or by any VTE
Entity, (vii) any Contract relating to the purchase or sale of any goods or
services (other than Contracts entered into in the ordinary course of business
and involving payments under any individual Contract not in excess of $100,000),
(ix) any Contract providing VTE with the right to purchase or redeem any VTE
Common Stock or other Equity Rights in VTE, (x) any other Contract or amendment
thereto that would be required to be filed as an exhibit to a Form 10-K, if such
form were required to be filed by VTE with the SEC as of the date of this
Agreement, (xi) any Contract relating to indebtedness for borrowed money, (xii)
any Contract relating to the lease of personal property, (xiii) any Contract
relating to the lease of real property, and (xiv) any Contract relating to the
development of strategic alternatives for, raising capital for, or selling VTE
(together with all Contracts referred to in Sections 5.10, 5.15(a) and 5.19, the
"VTE Contracts"). With respect to each VTE Contract disclosed pursuant to item
(xi) of the preceding sentence, Section 5.16 of the VTE Disclosure Memorandum
sets forth, with respect to each item of indebtedness, (A) the obligee, (B) the
obligor, (C) principal amount outstanding as of the date hereof, (D) the
interest rate, (E) payment schedule, (F) the maturity date, (G) collateral
securing such indebtedness, (H) the name(s) of any third party guarantor(s), (I)
a brief description of any Defaults which have not been cured, (J) the amount of
any prepayment penalty or premium, and (K) any third party Consents to the
transactions contemplated herein which are required pursuant to the terms of
such VTE Contract. With respect to each VTE Contract disclosed pursuant to items
(xii) and (xiii) of this Section 5.16, Section 5.16 of the VTE Disclosure
Memorandum sets forth, with respect to each such lease, (R) the lessor (S) the
lessee, (T) Assets subject to such lease, (V) expiration date
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of current term, (V) payment schedule, (W) the terms of any purchase option, (X)
a brief description of any Defaults which have not been cured, (Y) the amount of
any prepayment penalty or premium and (Z) any third party Consents to the
transactions contemplated herein which are required pursuant to the terms of
such VTE Contract. With respect to each Contract to which any VTE Entity is a
party or by which it is bound and except as disclosed in Section 5.16 of the VTE
Disclosure Memorandum: (i) the Contract is in full force and effect; (ii) no VTE
Entity is in Default thereunder, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a VTE Material Adverse Effect;
(iii) no VTE Entity has repudiated or waived any material provision of any such
Contract; and (iv) no other party to any such Contract is, to the Knowledge of
VTE, in Default in any respect or has repudiated or waived any material
provision thereunder. All of the indebtedness of any VTE Entity for money
borrowed is prepayable at any time by such VTE Entity without penalty or
premium.
5.17 LEGAL PROCEEDINGS. Except as set forth in Section 5.17 of
-----------------
the VTE Disclosure Memorandum, there is no Litigation instituted or pending, or,
to the Knowledge of VTE, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome) against any VTE Entity, or against any partner,
director, employee or employee benefit plan of any VTE Entity, or against any
Asset, interest, or right of any of them, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any VTE Entity. Section 5.17 of the VTE Disclosure
Memorandum contains a summary of all Litigation as of the date of this Agreement
to which any VTE Entity is a party and which names a VTE Entity as a defendant
or cross-defendant or for which, to the knowledge of VTE, any VTE Entity has any
potential Liability.
5.18 REPORTS. Since January 1, 1993, or the date of
-------
organization if later, each VTE Entity has timely filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with Regulatory Authorities. As of their
respective dates, each of such reports and documents, including the financial
statements, exhibits, and schedules thereto, complied in all material respects
with all applicable Laws. As of its respective date, each such report and
document did not, in all material respects, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
5.19 FRANCHISE MATTERS
-----------------
(a) Section 5.19(a) of the VTE Disclosure Memorandum
contains a true and complete copy of each form or version, currently in
effect with any Franchisee or other Person, of (i) Franchise Agreement,
(ii) SRA, and (iii) NAP Agreement.
(b) Section 5.19(b) of the VTE Disclosure Memorandum
contains a true and complete list setting forth as to each Franchise:
(i) the legal name of the Franchise; (ii) the date of the Franchise
Agreement: (iii) the version of Franchise Agreement entered into with
respect to the Franchise and a description of any material
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variances to such version contained in the Franchise Agreement in effect
for such Franchise; (iv) the geographic boundaries of Protected
Territory provided under the Franchise Agreement; (v) the number of
Sales Territories in effect for such Franchise; (vi) the location of
each VTE Center owned and/or operated pursuant to such Franchise; (vii)
the royalty rate in effect for such Franchise; (viii) the legal name of
the holder of any SRA related to the Franchise; (ix) whether a NAP
Agreement is in effect for the Franchise; (x) whether the Franchise was
previously owned by another Person and, if so, the name of the prior
owner and the date of transfer to the current Franchisee; (xi) whether
the Franchisee or any other Person has requested Consent to transfer the
Franchise and, if so, the date of such request and the identity of the
proposed transferee; and (xii) whether, at any time since January 1,
1994, the Franchisee (A) has received from VTE a notice of financial or
other Default under the Franchise Agreement, and if so, the date and
nature of such notice, or (B) has notified VTE that it considers VTE in
Default under the Franchise Agreement or otherwise in violation of any
Contract or Law related to the Franchise, and, if so, the date and the
nature of such notice.
(c) Section 5.19(c) of the VTE Disclosure Memorandum
contains a true and complete list of each Person that has proposed to
purchase from VTE or, to the Knowledge of VTE, from another Franchisee,
a Franchise, setting forth, with respect thereto, a description of the
relevant Franchise, including the Protected Territory (other than
proposals that have been consummated or terminated).
(d) Section 5.19(d) of the VTE Disclosure Memorandum
contains a true and complete list of each Franchise that, at any time
since January 1, 1994, has been terminated or not renewed, setting forth
as to each such Franchise the reason for such termination or nonrenewal.
Except as set forth on Section 5.19(d) of the VTE Disclosure Memorandum,
VTE received with respect to each such termination or nonrenewal a
release from the relevant Franchisee with respect to all obligations or
Liabilities of VTE to such Franchisee.
(e) Section 5.19(e) of the VTE Disclosure Memorandum
contains a true and complete list setting forth as to each SRA: (i) the
legal name of the Person holding rights as representative under the SRA;
(ii) the date of the SRA; (iii) the version of SRA and any material
variances from such version contained in the SRA; (iv) the identity of
each Franchise covered by the SRA; (v) the rate currently in effect
under the SRA; (vi) the termination date of the SRA; (vii) whether the
SRA was previously held by another Person and, if so, the name of the
previous owner and the date of transfer to the current holder of the
SRA; and (viii) whether, at any time since January 1, 1994, the owner of
the SRA (A) has received from VTE a notice of Default under the SRA,
and, if so, the date and nature of such notice, or (B) to the Knowledge
of VTE, has received from any Franchisee serviced under the SRA a notice
of Default, and, if so, the date and nature of such notice.
(f) Section 5.19(f) of the VTE Disclosure Memorandum
identifies each Franchisee or other Person who has a Contract with VTE
for the acquisition of additional Franchise rights or the expansion of
such Franchisee's Protected Territory, which list
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includes (i) the name of the Franchisee or other Person; (ii) the terms
and duration of the Contract; (iii) a description of the expansion area;
and (iv) whether such arrangement may be terminated by VTE by notice to
the other party. Except as listed or described in Section 5.19(f) of the
VTE Disclosure Memorandum, no Franchisee's Protected Territory is shared
in whole or in part with any other Franchisee.
(g) Section 5.19(g) of the VTE Disclosure Memorandum sets
forth a true and complete list and description of the terms of all
Contracts with independent sales representatives or agents with respect
to the sale or development of Franchises and all territorial
development, broker's and master franchise agreements or any other
Contracts under which VTE has authorized any Person to sell or promote
Franchises or licenses on behalf of VTE or agreed to rebate or share
amounts receivable under any Franchise Agreement. Except as set forth in
Section 5.19(g) of the VTE Disclosure Memorandum, each such Contract may
be terminated by VTE without Liability to the other party to the
Contract.
(h) Section 5.19(h) of the VTE Disclosure Memorandum
contains a true, complete and correct copy of the current form of
operating manual or other document containing all written, and an
accurate description of all other material, operating policies, codes
and requirements imposed on Franchisees by VTE pursuant to the Franchise
Agreements. Except as disclosed in Section 5.19(h) of the VTE Disclosure
Memorandum, (i) all Franchisees are operating under the form of
operating manual or other document attached to Section 5.19(h) of the
VTE Disclosure Memorandum and (ii) such operating manual and other
documents comply in all material respects with the requirements of the
related Franchise Agreements and relevant Laws and are substantially
consistent with the descriptions thereof in the relevant Franchise
Offering Circulars and related advertising and marketing material.
(i) Section 5.19(i) of the VTE Disclosure Memorandum
contains a true, complete and correct copy of: (i) the by-laws and other
organization and governance documents relating the NAP and the NAP
Board; (ii) the names, affiliations and term of office of each member of
the NAP Board; (iii) each Contract with a national account in effect
pursuant to the NAP; (iv) the balance sheet of the NAP as of December
31, 1996 and a statement of operations of the NAP for the years ended
December 31, 1996 and 1995, setting forth a full and fair description of
the Assets and Liabilities of the NAP and the results of operations of
the NAP at and for the periods presented.
(j) Except as set forth in Section 5.19(j) of the VTE
Disclosure Memorandum, VTE has complied in all material respects with
all Laws in connection with the offer and sale of Franchises or business
opportunities and, in connection therewith, has filed all necessary
notices or other documents, made all necessary disclosures and taken all
other necessary actions and has received all necessary Consents under
applicable Law. Section 5.19(j) of the VTE Disclosure Memorandum
contains a true and complete list of all jurisdictions in which VTE is
registered for the purpose of offering and selling Franchises. VTE has
heretofore made available for review by Premiere correct and complete
copies of
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all registrations, advertising or promotional materials, franchise
agreements and license agreements filed with any Regulatory Authority or
otherwise used by VTE in connection with the offer, sale and operation
of Franchises or business opportunities in any jurisdiction. VTE has
not, in any of the aforementioned documents (including, without
limitation, offering circulars or disclosure documents), made any untrue
statement of a material fact, or omitted to state any fact necessary to
make the statements made by VTE, taken as a whole, not misleading, in
connection with the other or sale of any franchise or business
opportunity. Except as set forth in Section 5.19(j) of the VTE
Disclosure Memorandum, Vte did not provide earnings claims, as defined
in the Uniformed Franchise Offering Circular Guidelines, in any
franchise offering circular or disclosure document, and has no knowledge
that earnings claims were prepared by, or were provided to Franchisees
by others on behalf of VTE. Except as set forth in Section 5.19(j) of
the VTE Disclosure Memorandum, no Franchisee has alleged, orally or in
writing, to VTE that VTE has acted improperly regarding (y) disparate
treatment among Franchisees or (z) providing prospective Franchisees
with inaccurate or incorrect earnings claims that violate relevant Law.
5.20 VTE PRODUCTS AND SERVICES. Except as set forth in Section
-------------------------
5.20 of the VTE Disclosure Memorandum the VTE Products and Services conform in
all material respects with any specification, documentation, performance
standard, representation or statement made or provided with respect thereto by
or on behalf of any VTE Entity, and there has not been during the last three (3)
years any claim made against any VTE Entity by any customer of any VTE Entity
or, to the Knowledge of VTE, any customer of a Franchisee, by any Franchisee or
by any other Person alleging that any VTE Product and Service (including each
version thereof that has been licensed or otherwise made available by any VTE
Entity to any Person) does not conform in all material respects with any
specification, documentation, performance standard, representation or statement
made or provided by or on behalf of any VTE Entity, and, to the Knowledge of
VTE, there is not a reasonable basis for any such claim. Notwithstanding the
generality of the foregoing, all VTE Products and Services offered or
distributed by any VTE Entity, the NAP or VTE to each of Amway, its distributors
and customers, NAP customers and the Franchisees or any other VTE customer,
conform as of the date hereof to the current and future performance standards
and service levels applicable thereto, including without limitation, those set
forth in the Contracts listed in Section 5.20 of the VTE Disclosure Memorandum,
without imposition of any performance credits or other penalties and otherwise
in accordance with the terms of such Contracts. No product liability or warranty
claims which individually or in the aggregate could exceed the reserves therefor
on the VTE Financial Statements have been communicated in writing to or
threatened in writing against any VTE Entity. The VTE Products and Services, as
of the date hereof, during and after the calendar year 2000 A.D., include
design, function and performance capabilities such that the VTE Products and
Services shall not abnormally end and/or have invalid and/or incorrect results
from and/or performance or functional degradation because of the then-current
date. The design and function of the VTE Products and Services shall ensure year
2000 A.D. and shall include, but not be limited to, date data century
recognition, calculations that accommodate same century and multicentury
formulas and date values, and date data interface values that reflect the
century.
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5.21 SYSTEM PERFORMANCE.
------------------
(a) The Network as currently equipped and maintained is
Reliably Handling an average of 70,000 messages per day (with an average
length of 120 seconds) which are transmitted from one Hub to another
("Multi-Hub Messages") in combination with an average of 100,000
messages per day which are transmitted from a Service Center to a single
Hub and back to another Service Center ("Single-Hub Messages"). The
Network as currently equipped and maintained is Reliably Handling peak
loads of 7,200 Multi-Hub Messages per hour in combination with 10,800
Single-Hub Messages per hour. The Network is capable, without additional
equipment, without an upgrade of software or hardware, and without
material degradation of delivery times or other Network performance, of
Reliably Handling an average of 280,000 Multi-Hub Messages per day in
combination with an average of 400,000 Single-Hub Messages per day, as
well as peak loads of 28,800 Multi-Hub Messages per hour in combination
with 43,200 Single-Hub Messages per hour. The Network may be improved,
at a total capital expenditure of no more than $4,500,000 based on
current prices offered by suppliers, so that it is capable of Reliably
Handling an average of 650,000 Multi-Hub Messages per day in combination
with an average of 1,000,000 Single-Hub Messages per day, as well as
peak loads of 65,000 Multi-Hub Messages per hour in combination with
100,000 Single-Hub Messages per hour.
(b) Each Service Center operated by VTE or a Franchisee as
currently equipped and maintained is capable of Reliably Handling an
average of 100 Single-Hub and Multi-Hub Messages (combined) per hour, in
combination with 700 messages per hour which are delivered from a sender
to a recipient within the same Service Center and are not transmitted to
a Hub ("Non-Hub Messages"). Twenty percent (20%) of the Service Centers
operated by VTE or its Franchisees as currently equipped and maintained
are capable of Reliably Handling an average of 300 Single-Hub and
Multi-Hub Messages (combined) per hour, in combination with 2,100
Non-Hub Messages per hour. Each Service Center equipped with one fully
loaded Centigram AIP voice mail server (with all port card slots filled
and running version 5.0 VoiceMemo software), one NIB, and one ACC Nile
Router connected to a Hub with a T1 line, is capable of Reliably
Handling an average of 400 Single-Hub and Multi-Hub Messages (combined)
per hour, in combination with 2,800 Non-Hub Messages per hour. Each
Service Center operated by VTE or a Franchisee as currently equipped and
maintained operates such that during the busiest hour of operation, nor
more than 2 out of every 100 callers will receive a busy condition or
signal referred to as "All Trunks Busy" or ATB. Each Service Center
operated by VTE or a Franchisee as currently equipped and maintained has
sufficient message storage capacity to provide the maximum number and
length of messages allowed and the number of days retained to which
every customer entitled to use the Service Center is currently entitled,
and an additional reserve storage capacity over and above that maximum
amount by 10%.
(c) The Network and Hubs as currently equipped and
maintained are capable of meeting the "Network Transmission Standards"
and the other performance requirements
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set forth in the Agreement among VTELP, the NAP and VTE contained in the
Grand Solution Documents for all periods through set forth therein.
5.22 STATEMENTS TRUE AND CORRECT. No statement, certificate,
---------------------------
instrument, or other writing furnished or to be furnished by any VTE Entity or
any Affiliate thereof to Premiere pursuant to this Agreement or any other
document, agreement, or instrument delivered pursuant hereto herein contains or
will contain any untrue statement of material fact or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All documents that any
VTE Entity or any Affiliate thereof is responsible for filing with any
Regulatory Authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions of
applicable Law.
5.23 ACCOUNTING AND REGULATORY MATTERS. No VTE Entity or any
---------------------------------
Stockholder or any Affiliate thereof has taken or agreed to take any action or
has any Knowledge of any fact or circumstance that is reasonably likely to (i)
prevent the Merger from qualifying for pooling-of-interests accounting
treatment, or (ii) materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) or result in the imposition
of a condition or restriction of the type referred to in the last sentence of
such Section.
5.24 STATE TAKEOVER LAWS. Each VTE Entity and each Stockholder
-------------------
has taken all necessary action to exempt the transactions contemplated by this
Agreement from, or if necessary to challenge the validity or applicability of,
any applicable "moratorium," "fair price," "business combination," "control
share," or other anti-takeover Laws (collectively, "Takeover Laws").
5.25 CHARTER PROVISIONS. Each VTE Entity and each Stockholder
------------------
has taken all action so that the entering into of this Agreement and the
consummation of the Merger and the other transactions contemplated by this
Agreement do not and will not result in the grant of any rights to any Person
under the Certificate of Incorporation, Bylaws or other governing instruments of
any VTE Entity or restrict or impair the ability of Premiere or any of its
Subsidiaries to vote, or otherwise to exercise the rights of a stockholder with
respect to, shares of any VTE Entity that may be directly or indirectly acquired
or controlled by them.
5.26 INVESTMENT INTENTION, ETC. Each Stockholder is acquiring
-------------------------
the shares of Premiere Common Stock to be issued pursuant to this Agreement for
investment only, for such Stockholder's own account and not as a nominee or
agent, and not with the view to, or for resale in connection with, any
distribution thereof or participation therein. Except as set forth in Section
5.26 of the VTE Disclosure Memorandum, each Stockholder is an "accredited
investor" as such term is defined in Rule 501(a) under the 1933 Act. Each
Stockholder has such knowledge and experience in business and financial matters
and with respect to investments in securities to enable the Stockholder to
understand and evaluate the risks of an investment in the Premiere Common Stock
to be acquired by the Stockholder in the Merger and to form an investment
decision with respect thereto and is able to bear the risk of such investment
for an indefinite period and to afford
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a complete loss thereof. Each Stockholder has previously completed, executed and
delivered to Premiere an Investor Questionnaire relating to the transactions
contemplated by this Agreement. The responses contained in such Investor
Questionnaires are true and complete as of the date of the Questionnaire and the
date of this Agreement. Each Stockholder understands that the shares of Premiere
Common Stock to be issued pursuant to this Agreement have not been, and will not
be, registered under the 1933 Act in reliance upon the representations set forth
herein and in the Investor Questionnaires.
5.27 BOARD RECOMMENDATION. The Board of Directors of VTE, at a
---------------------
meeting duly called and held, has by unanimous vote of the directors present
(who constituted all of the directors then in office) (i) determined that this
Agreement and the transactions contemplated hereby, including the Merger, taken
together, are fair to and in the best interests of the Stockholders and (ii)
resolved to recommend that the holders of the shares of VTE Common Stock approve
this Agreement.
5.28 AMWAY MATTERS.
-------------
(a) Amway is a corporation duly organized, validly existing, and
in good standing under the Laws of the State of Michigan, and has the
corporate power and authority to carry on its business as now
conducted and to own, lease and operate its Assets.
(b) Amway has the corporate power and authority to execute and
deliver this Agreement and the Amway Closing Documents and to perform
its obligations under this Agreement and the Amway Closing Documents.
This Agreement represents a legal, valid, and binding obligation of
Amway, enforceable against Amway in accordance with its terms (except
in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of creditors'
rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought)
and, upon the execution and delivery by Amway of the Amway Closing
Documents, the Amway Closing Documents will constitute the legal,
valid, and binding obligations of Amway, enforceable against Amway in
accordance with their respective terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar
Laws affecting the enforcement of creditors' rights generally and
except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the
court before which any proceeding may be brought).
(c) [Reserved]
(d) Amway is the owner of all right, title and interest (legal
and beneficial) in and to that number of shares of VTE Common Stock
set forth next to its name in Section 5.4(a) of the VTE Disclosure
Memorandum, free and clear of all Liens. Amway is the owner of all
right, title and interest (legal and beneficial) in and to the Amway
Convertible
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<PAGE>
Note, free and clear of all Liens. The Amway Convertible Note is
convertible into 95.75 Shares of VTE Common Stock and 78.25 shares of
VTN Common Stock. Other than the Amway Convertible Note, Amway does
not have any Contract or any right or privilege (whether pre-emptive
or contractual) capable of becoming a Contract or Equity Right for the
purchase, subscription or issuance of any securities of VTE.
(e) [Reserved]
(f) [Reserved]
(g) Amway is acquiring the shares of Premiere Common Stock to be
issued pursuant to this Agreement for investment only, for its own
account and not as a nominee or agent, and not with the view to, or
for resale in connection with, any distribution thereof or
participation therein. Amway is an "accredited investor" as such term
is defined in Rule 501(a) under the 1933 Act. Amway has such knowledge
and experience in business and financial matters and with respect to
investments in securities to enable Amway to understand and evaluate
the risks of an investment in the Premiere Common Stock to be acquired
by Amway in the Merger and to form an investment decision with respect
thereto and is able to bear the risk of such investment for an
indefinite period and to afford a complete loss thereof.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PREMIERE
------------------------------------------
Premiere hereby represents and warrants to VTE and the Stockholders
as follows:
6.1 ORGANIZATION, STANDING, AND POWER. Premiere is a corporation duly
---------------------------------
organized, validly existing, and in good standing under the Laws of the State of
Georgia, and has the corporate power and authority to carry on its business as
now conducted and to own, lease and operate its Assets. Premiere is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Premiere Material Adverse Effect.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
---------------------------------
(a) Premiere has the corporate power and authority necessary to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part
of Premiere. This Agreement represents a legal, valid, and binding
obligation of Premiere, enforceable against Premiere in accordance with its
terms (except in all cases as such
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<PAGE>
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that
the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which
any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
Premiere, nor the consummation by Premiere of the transactions contemplated
hereby, nor compliance by Premiere with any of the provisions hereof, will
(i) conflict with or result in a breach of any provision of Premiere's
Articles of Incorporation or Bylaws or any resolution adopted by the board
of directors or shareholders of Premiere or any of its Subsidiaries, or
(ii) constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any Asset of any
Premiere Entity under, any Contract or Permit of any Premiere Entity, where
such Default or Lien, or any failure to obtain such Consent, is reasonably
likely to have, individually or in the aggregate, a Premiere Material
Adverse Effect, or, (iii) subject to receipt of the requisite Consents
referred to in Section 9.1(b), constitute or result in a Default under, or
require any Consent pursuant to, any Law or Order applicable to any
Premiere Entity or any of their respective material Assets (including any
Premiere Entity or any VTE Entity becoming subject to or liable for the
payment of any Tax or any of the Assets owned by any Premiere Entity or any
VTE Entity being reassessed or revalued by any Taxing authority).
(c) Other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities Laws, and
rules of the NASD, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, or under the HSR Act, and other than Consents,
filings, or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a Premiere
Material Adverse Effect, no notice to, filing with, or Consent of, any
public body or authority is necessary for the consummation by Premiere of
the Merger and the other transactions contemplated in this Agreement.
6.3 CAPITAL STOCK.
-------------
(a) The authorized capital stock of Premiere consists of
(i)150,000,000 shares of Premiere Common Stock, of which 24,089,769 shares
are issued and outstanding as of March 17, 1997, and (ii) 5,000,000 shares
of Premiere Preferred Stock, of which no shares are issued and outstanding.
All of the issued and outstanding shares of Premiere Capital Stock are, and
all of the shares of Premiere Common Stock to be issued in exchange for
shares of VTE Common Stock upon consummation of the Merger, when issued in
accordance with the terms of this Agreement, will be, duly and validly
issued and outstanding and fully paid and nonassessable . None of the
outstanding shares of Premiere Capital Stock has been, and none of the
shares of Premiere Common Stock to be issued in exchange for shares of VTE
Common Stock upon consummation of the Merger will be, issued in violation
of any preemptive rights of the current or past stockholders of Premiere.
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(b) Except as set forth in Section 6.3(a), or as provided
pursuant to the Premiere 1994 Stock Option Plan or the Premiere 1995 Stock
Plan or as disclosed in Section 6.3 of the Premiere Disclosure Memorandum,
there are no shares of capital stock or other equity securities of Premiere
outstanding and no outstanding Equity Rights relating to the capital stock
of Premiere.
6.4 PREMIERE SUBSIDIARIES. Premiere has disclosed in Section
---------------------
6.4 of the Premiere Disclosure Memorandum all of the Premiere Subsidiaries as of
the date of this Agreement that are corporations (identifying its jurisdiction
of incorporation, each jurisdiction in which the character of its Assets or the
nature or conduct of its business requires it to be qualified and/or licensed to
transact business, and the number of shares owned and percentage ownership
interest represented by such share ownership) and all of the Premiere
Subsidiaries that are general or limited partnerships or other non-corporate
entities (identifying the Law under which such entity is organized, each
jurisdiction in which the character of its Assets or the nature or conduct of
its business requires it to be qualified and/or licensed to transact business,
and the amount and nature of the ownership interest therein). Except as
disclosed in Section 6.4 of the Premiere Disclosure Memorandum, Premiere or one
of its wholly-owned Subsidiaries owns all of the issued and outstanding shares
of capital stock (or other equity interests) of each Premiere Subsidiary. No
capital stock (or other equity interest) of any Premiere Subsidiary are or may
become required to be issued (other than to another Premiere Entity) by reason
of any Equity Rights, and there are no Contracts by which any Premiere
Subsidiary is bound to issue (other than to another Premiere Entity) additional
shares of its capital stock (or other equity interests) or Equity Rights or by
which any Premiere Entity is or may be bound to transfer any shares of the
capital stock (or other equity interests) of any Premiere Subsidiary (other than
to another Premiere Entity). There are no Contracts relating to the rights of
any Premiere Entity to vote or to dispose of any shares of the capital stock (or
other equity interests) of any Premiere Subsidiary. All of the shares of capital
stock (or other equity interests) of each Significant Subsidiary of Premiere
held by a Premiere Entity are fully paid and nonassessable and are owned by the
Premiere Entity free and clear of any Lien. Each Premiere Subsidiary is a
corporation, and is duly organized, validly existing, and (as to corporations)
in good standing under the Laws of the jurisdiction in which it is incorporated
or organized, and has the corporate power and authority necessary for it to own,
lease and operate its Assets and to carry on its business as now conducted. Each
Premiere Subsidiary is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Premiere Material
Adverse Effect.
6.5 SEC FILINGS; FINANCIAL STATEMENTS.
---------------------------------
(a) Premiere has timely filed and made available to VTE all
SEC Documents required to be filed by Premiere since March 5, 1996 (the
"Premiere SEC Reports"). The Premiere SEC Reports (i) at the time filed,
complied in all material respects with the applicable requirements of the
Securities Laws and other applicable Laws and (ii) did not, at
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the time they were filed (or, if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material fact
required to be stated in such Premiere SEC Reports or necessary in order to
make the statements in such Premiere SEC Reports, in light of the
circumstances under which they were made, not misleading. No Premiere
Subsidiary is required to file any SEC Documents.
(b) Each of the Premiere Financial Statements (including, in
each case, any related notes) contained in the Premiere SEC Reports,
including any Premiere SEC Reports filed after the date of this Agreement
until the Effective Time, complied as to form in all material respects with
the applicable published rules and regulations of the SEC with respect
thereto, was prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes to
such financial statements or, in the case of unaudited interim statements,
as permitted by Form 10-Q of the SEC), and fairly presented in all material
respects the consolidated financial position of Premiere and its
Subsidiaries as at the respective dates and the consolidated results of
operations and cash flows for the periods indicated, except that the
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be
material in amount or effect.
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Premiere Entity has
----------------------------------
any Liabilities that are reasonably likely to have, individually or in the
aggregate, a Premiere Material Adverse Effect, except Liabilities which are
accrued or reserved against in the consolidated balance sheet of Premiere as of
December 31, 1996, included in the Premiere Financial Statements delivered prior
to the date of this Agreement or reflected in the notes thereto and Liability
(including contingent Liabilities) described in the Premiere SEC Report. Except
as disclosed in the Premiere SEC Reports, no Premiere Entity has incurred or
paid any Liability since December 31, 1996, except for such Liabilities incurred
or paid (i) in the ordinary course of business consistent with past business
practice and which are not reasonably likely to have, individually or in the
aggregate, a Premiere Material Adverse Effect or (ii) in connection with the
transactions contemplated by this Agreement.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31,
------------------------------------
1996, except as disclosed in the Premiere Financial Statements delivered prior
to the date of this Agreement, as disclosed in the Premiere SEC Reports, or as
disclosed in Section 6.7 of the Premiere Disclosure Memorandum, (i) there have
been no events, changes or occurrences which have had, or are reasonably likely
to have, individually or in the aggregate, a Premiere Material Adverse Effect,
and (ii) the Premiere Entities have not taken any action, or failed to take any
action, prior to the date of this Agreement, which action or failure, if taken
after the date of this Agreement, would represent or result in a material breach
or violation of any of the covenants and agreements of Premiere provided in
Article 7.
6.8 COMPLIANCE WITH LAWS. Each Premiere Entity has in effect
--------------------
all Permits necessary for it to own, lease or operate its material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have,
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<PAGE>
individually or in the aggregate, a Premiere Material Adverse Effect, and there
has occurred no Default under any such Permit, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a Premiere Material
Adverse Effect. Except as disclosed in the Premiere SEC Reports or in Section
6.8 of the Premiere Disclosure Memorandum, none of the Premiere Entities:
(a) is in Default under its Articles of Incorporation or Bylaws
(or other governing instruments); or
(b) is in Default under any Laws, Orders or Permits applicable
to its business or employees conducting its business, except for Defaults
which are not reasonably likely to have, individually or in the aggregate,
a Premiere Material Adverse Effect; or
(c) since January 1, 1993, has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting
that any Premiere Entity is not in compliance with any of the Laws or
Orders which such governmental authority or Regulatory Authority enforces,
where such noncompliance is reasonably likely to have, individually or in
the aggregate, a Premiere Material Adverse Effect, (ii) threatening to
revoke any Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Premiere Material Adverse Effect, or
(iii) requiring any Premiere Entity to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive,
commitment or memorandum of understanding, or to adopt any Board resolution
or similar undertaking, which restricts materially the conduct of its
business.
6.9 LEGAL PROCEEDINGS. Except as disclosed in the Premiere SEC
-----------------
Reports, there is no Litigation instituted or pending, or, to the Knowledge of
Premiere, threatened (or unasserted but considered probable of assertion and
which if asserted would have at least a reasonable probability of an unfavorable
outcome) against any Premiere Entity, or against any director, employee or
employee benefit plan of any Premiere Entity, or against any Asset, interest, or
right of any of them, that is reasonably likely to have, individually or in the
aggregate, a Premiere Material Adverse Effect, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any Premiere Entity, that are reasonably likely to have,
individually or in the aggregate, a Premiere Material Adverse Effect.
6.10 STATEMENTS TRUE AND CORRECT. No statement, certificate,
---------------------------
instrument or other writing furnished or to be furnished by any Premiere Entity
or any Affiliate thereof to VTE pursuant to this Agreement or any other
document, agreement or instrument delivered pursuant hereto contains or will
contain any untrue statement of material fact or will omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. All documents that any Premiere
Entity or any Affiliate thereof is responsible for filing with any Regulatory
Authority in connection with the transactions contemplated hereby will comply as
to form in all material respects with the provisions of applicable Law.
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6.11 ACCOUNTING AND REGULATORY MATTERS. No Premiere Entity or any
---------------------------------
Affiliate thereof has taken or agreed to take any action or has any Knowledge of
any fact or circumstance that is reasonably likely to (i) prevent the Merger
from qualifying for pooling-of-interests accounting treatment or as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section. In this regard, Premiere shall execute and deliver to VTE's counsel
prior to the Effective Date a certificate substantially in the form of Exhibit 5
hereto.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
----------------------------------------
7.1 AFFIRMATIVE COVENANTS OF VTE. From the date of this Agreement
----------------------------
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of Premiere shall have been obtained, and
except as otherwise expressly contemplated herein, VTE shall and shall cause
each of its Subsidiaries to (a) operate its business only in the usual, regular,
and ordinary course, (b) preserve intact its business organization and Assets
and maintain its rights and franchises, and (c) knowingly take no action which
would (i) adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in the last sentences of
Section 9.1(b) or 9.1(c), or (ii) adversely affect the ability of any Party to
perform its covenants and agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF VTE. From the date of this Agreement until
-------------------------
the earlier of the Effective Time or the termination of this Agreement, unless
the prior written consent of Premiere shall have been obtained, and except as
otherwise expressly contemplated herein, in the VTN Merger Agreement, or in the
MPI Purchase Agreement or as disclosed in Section 7.2 of the VTE Disclosure
Memorandum, VTE covenants and agrees that it will not do or agree or commit to
do, or permit any of its Subsidiaries to do or agree or commit to do, any of the
following:
(a) amend the Certificate of Incorporation, Bylaws or other
governing instruments of any VTE Entity; or
(b) incur any additional debt obligation or other obligation for
borrowed money (other than indebtedness of a VTE Entity to another VTE
Entity) in excess of an aggregate of $25,000 (for the VTE Entities on a
consolidated basis) except in the ordinary course of the business of VTE
Subsidiaries consistent with past practices, or impose, or suffer the
imposition, on any Asset of any VTE Entity of any Lien or permit any such
Lien to exist (other than in connection with Liens in effect as of the date
hereof that are disclosed in the VTE Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange (other
than exchanges in the ordinary course under employee benefit plans),
directly or indirectly, any
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shares, or any securities convertible into any shares, of the capital stock
of any VTE Entity, or declare or pay any dividend or make any other
distribution in respect of VTE's capital stock; or
(d) except for this Agreement, or pursuant to the exercise of
stock options outstanding as of the date hereof and pursuant to the terms
thereof in existence on the date hereof, issue, sell, pledge, encumber,
authorize the issuance of, enter into any Contract to issue, sell, pledge,
encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of VTE Common Stock or any other capital
stock of any VTE Entity, or any stock appreciation rights, or any option,
warrant, or other Equity Right; or
(e) adjust, split, combine or reclassify any capital stock of
any VTE Entity or issue or authorize the issuance of any other securities
in respect of or in substitution for shares of VTE Common Stock, or sell,
lease, mortgage or otherwise dispose of or otherwise encumber (x) any
shares of capital stock of any VTE Subsidiary (unless any such shares of
stock are sold or otherwise transferred to another VTE Entity) or (y) any
Asset other than in the ordinary course of business for reasonable and
adequate consideration; or
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in either case have maturities of three
years or less, purchase any securities or make any material investment,
either by purchase of stock of securities, contributions to capital, Asset
transfers, or purchase of any Assets, in any Person other than a wholly
owned VTE Subsidiary, or otherwise acquire direct or indirect control over
any Person; or
(g) grant any increase in compensation or benefits to the
employees or officers of any VTE Entity, except in accordance with past
practice or as required by Law; pay any severance or termination pay or any
bonus other than pursuant to written policies or written Contracts in
effect on the date of this Agreement; and enter into or amend any severance
agreements with officers of any VTE Entity; grant any material increase in
fees or other increases in compensation or other benefits to directors of
any VTE Entity except in accordance with past practice; or voluntarily
accelerate the vesting of any stock options or other stock-based
compensation or employee benefits or other Equity Rights; or
(h) enter into or amend any employment Contract between any VTE
Entity and any Person (unless such amendment is required by Law) that the
VTE Entity does not have the unconditional right to terminate without
Liability (other than Liability for services already rendered), at any time
on or after the Effective Time; or
(i) adopt any new employee benefit plan of any VTE Entity or
terminate or withdraw from, or make any material change in or to, any
existing employee benefit plans of any VTE Entity other than any such
change that is required by Law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax qualified status of any such
plan, or
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make any distributions from such employee benefit plans, except as required
by Law, the terms of such plans or consistent with past practice; or
(j) make any significant change in any Tax or accounting methods
or systems of internal accounting controls, except as may be appropriate to
conform to changes in Tax Laws or regulatory accounting requirements or
GAAP; or
(k) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of any VTE Entity
for material money damages or restrictions upon the operations of any VTE
Entity; or
(l) enter into, modify, amend or terminate any material Contract
(including any loan Contract with an unpaid balance exceeding $10,000, any
Franchise Agreement and any SRA) or waive, release, compromise or assign
any material rights or claims.
7.3 COVENANTS OF PREMIERE. From the date of this Agreement until the
---------------------
earlier of the Effective Time or the termination of this Agreement, unless the
prior written consent of VTE shall have been obtained, and except as otherwise
expressly contemplated herein, Premiere covenants and agrees that it shall (a)
continue to conduct its business and the business of its Subsidiaries in a
manner designed, in its reasonable judgment, to enhance the long-term value of
the Premiere Common Stock and the business prospects of the Premiere Entities
and to the extent consistent therewith use all reasonable efforts to preserve
intact the Premiere Entities' core businesses and goodwill with their respective
employees, and (b) take no action which would (i) materially adversely affect
the ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the last sentences of Section 9.1(b) or 9.1(c), or (ii)
materially adversely affect the ability of any Party to perform its covenants
and agreements under this Agreement; provided, that the foregoing shall not
prevent any Premiere Entity from acquiring any Assets or other businesses or
from discontinuing or disposing of any of its Assets or business if such action
is, in the reasonable judgment of Premiere, desirable in the conduct of the
business of Premiere and its Subsidiaries. Premiere further covenants and agrees
that it will not, without the prior written consent of VTE, which consent shall
not be unreasonably withheld, amend the Articles of Incorporation or Bylaws of
Premiere, in each case, in any manner adverse to the holders of VTE Common Stock
as compared to rights of holders of Premiere Common Stock generally as of the
date of this Agreement.
7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give written
----------------------------
notice promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a VTE Material Adverse Effect or a Premiere Material Adverse Effect,
as applicable, or (ii) would cause or constitute a material breach of any of its
representations, warranties, or covenants contained herein, and to use its
reasonable efforts to prevent or promptly to remedy the same.
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7.5 REPORTS. Each Party and its Subsidiaries shall file all reports
-------
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity filing such
statements as of the dates indicated and the consolidated results of operations,
changes in stockholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not material). As of their
respective dates, such reports filed with the SEC will comply in all material
respects with the Securities Laws and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Any financial statements contained
in any other reports to another Regulatory Authority shall be prepared in
accordance with Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
---------------------
8.1 [RESERVED]
8.2. EXCHANGE LISTING. Premiere shall use its best efforts to list,
----------------
prior to the Effective Time, on the Nasdaq National Market the shares of
Premiere Common Stock to be issued to the holders of VTE Common Stock pursuant
to the Merger, and Premiere shall give all notices and make all filings with the
NASD required in connection with the transactions contemplated herein.
8.3 APPLICATIONS; ANTITRUST NOTIFICATION. Premiere shall prepare and
------------------------------------
file, and VTE and the Stockholders shall cooperate in the preparation and, where
appropriate, filing of, applications with all Regulatory Authorities having
jurisdiction over the transactions contemplated by this Agreement seeking the
requisite Consents necessary to consummate the transactions contemplated by this
Agreement. To the extent required by the HSR Act, each of the Parties will
promptly file with the United States Federal Trade Commission and the United
States Department of Justice the notification and report form required for the
transactions contemplated hereby and any supplemental or additional information
which may reasonably be requested in connection therewith pursuant to the HSR
Act and will comply in all material respects with the requirements of the HSR
Act. The Parties shall deliver to each other copies of all filings,
correspondence and orders to and from all Regulatory Authorities in connection
with the transactions contemplated hereby.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to
--------------------------
the conditions of this Agreement, Premiere, Sub and VTE shall execute and file
the Certificate of Merger with the Secretary of State of the State of Delaware
in connection with the Closing.
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8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
-------------------------------------
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including using its reasonable efforts to lift
or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
referred to in Article 9; provided, that nothing herein shall preclude either
Party from exercising its rights under this Agreement. Each Party shall use, and
shall cause each of its Subsidiaries to use, its reasonable efforts to obtain
all Consents necessary or desirable for the consummation of the transactions
contemplated by this Agreement.
8.6 INVESTIGATION AND CONFIDENTIALITY.
---------------------------------
(a) Prior to the Effective Time, each Party shall keep the other
Party advised of all material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or
cause to be made such investigation of the business and properties of it
and its Subsidiaries and of their respective financial and legal conditions
as the other Party reasonably requests, provided that such investigation
shall be reasonably related to the transactions contemplated hereby and
shall not interfere unnecessarily with normal operations. No investigation
by a Party shall affect the representations and warranties of the other
Party.
(b) In addition to the Parties' respective obligations under the
Confidentiality Agreement, which is hereby reaffirmed and adopted, and
incorporated by reference herein each Party shall, and shall cause its
advisers and agents to, maintain the confidentiality of all confidential
information furnished to it by the other Party concerning its and its
Subsidiaries' businesses, operations, and financial positions and shall not
use such information for any purpose except in furtherance of the
transactions contemplated by this Agreement. If this Agreement is
terminated prior to the Effective Time, each Party shall promptly return or
certify the destruction of all documents and copies thereof, and all work
papers containing confidential information received from the other Party.
(c) VTE shall use its reasonable efforts to exercise its rights
under confidentiality agreements entered into with Persons which were
considering an Acquisition Proposal with respect to VTE to preserve the
confidentiality of the information relating to the VTE Entities provided to
such Persons and their Affiliates and Representatives.
8.7 PRESS RELEASES. Prior to the Effective Time, VTE and
--------------
Premiere shall consult with each other as to the form and substance of any press
release or other public disclosure materially related to this Agreement or any
other transaction contemplated hereby; provided, that nothing in this Section
8.7 shall be deemed to prohibit any Party from making any disclosure which its
outside counsel deems necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law. If any such press release or other public
disclosure contains a reference to Amway or any Amway marks, then no such press
release shall be issued or other
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public disclosure made without the prior written consent of Amway, which consent
shall not be unreasonably withheld.
8.8 CERTAIN ACTIONS. Except with respect to this Agreement and the
----------------
transactions contemplated hereby, no VTE Entity nor any Stockholder nor any
Affiliate thereof nor any Representatives thereof retained by any VTE Entity
shall directly or indirectly solicit any Acquisition Proposal by any Person.
Except to the extent the Board of Directors of VTE, after having consulted with
and considered the advice of outside counsel, reasonably determines in good
faith that the failure to take such actions would constitute a breach of
fiduciary duties of the members of such Board of Directors to VTE's stockholder
under applicable law, no VTE Entity, any Stockholder or any Affiliate or
Representative thereof shall furnish any non-public information that it is not
legally obligated to furnish, negotiate with respect to, or enter into any
Contract with respect to, any Acquisition Proposal, but VTE may communicate
information about such an Acquisition Proposal to its stockholders if and to the
extent that it is required to do so in order to comply with its legal
obligations as advised by outside counsel. Each Stockholder and/or VTE shall
promptly advise Premiere following the receipt of any Acquisition Proposal and
the details thereof, and advise Premiere of any developments with respect to
such Acquisition Proposal promptly upon the occurrence thereof. Each Stockholder
and VTE shall (i) immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any Persons conducted heretofore
with respect to any of the foregoing, and (ii) direct and use its reasonable
efforts to cause all of its Affiliates and Representatives not to engage in any
of the foregoing.
8.9 STOCKHOLDER RELEASES. Except as set forth in Section 8.9 of the
--------------------
VTE Disclosure Memorandum and except, as to Amway, for matters arising under the
Amway Reseller Agreement, each Stockholder, effective upon the Closing, hereby
releases, remises, and forever discharges each VTE Entity, VTN, VTNLP and their
respective Representatives, Affiliates, and insurers, and their respective
successors and assigns, and each of them (hereinafter individually and
collectively, the "Releasees") of and from any and all claims, demands, debts,
accounts, covenants, agreements, obligations, costs, expenses, actions or causes
of action of every nature, character or description, now accrued or which may
hereafter accrue, without limitation of law, equity or otherwise, based in whole
or in part on any facts, conduct, activities, transactions, events or
occurrences known or unknown, which have or allegedly have existed, occurred,
happened, arisen or transpired from the beginning of time to the Effective Time
(the "Released Claims"). Each Stockholder represents and warrants that no
Released Claim released herein has been assigned, expressly, impliedly, or by
operation of Law, and that all Released Claims of such Stockholder released
herein are owned by such Stockholder, who has the sole authority to release
them. Each Stockholder agrees that such holder shall forever refrain and
forebear from commencing, instituting or prosecuting any lawsuit action or
proceeding, judicial, administrative, or otherwise, or otherwise attempting to
collect or enforce any Released Claims which are released and discharged herein.
8.10 ACCOUNTING TREATMENT. Each of the Parties undertakes and agrees
--------------------
to use its reasonable efforts to cause the Merger, and to take no action which
would be reasonably likely to cause the Merger not, to qualify for treatment as
a pooling of interests for accounting purposes.
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8.11 STATE TAKEOVER LAWS. Each VTE Entity and each Stockholder shall
-------------------
take all necessary steps to exempt the transactions contemplated by this
Agreement from, or if necessary to challenge the validity or applicability of,
any applicable Takeover Law, including Section 203 of the DGCL.
8.12 CHARTER PROVISIONS. Each VTE Entity shall take all necessary
------------------
action to ensure that the entering into of this Agreement and the consummation
of the Merger and the other transactions contemplated hereby do not and will not
result in the grant of any rights to any Person under the Certificate of
Incorporation, Bylaws or other governing instruments of any VTE Entity or
restrict or impair the ability of Premiere or any of its Subsidiaries to vote,
or otherwise to exercise the rights of a stockholder with respect to, shares of
any VTE Entity that may be directly or indirectly acquired or controlled by
them.
8.13 TAX RETURNS. Premiere agrees that it will not permit or cause
-----------
VTE to file an amended federal or state income Tax Return, or any other Tax
Return for which Premiere intends to seek indemnification, with respect to any
taxable year or period ending on or before the Closing Date without delivering a
copy of such amended Tax Return to the Escrow Committee at least five (5) days
prior to the proposed filing thereof.
8.14 NONCOMPETITION, NONSOLICITATION AND NONDISCLOSURE.
-------------------------------------------------
(a) VTE and each Stockholder (other than Amway) acknowledges:
(i) that each Stockholder has substantial special
expertise and experience in the Business Activities and possesses
substantial contacts with suppliers and customers of VTE, and that
such expertise, experience and contacts have been built up over a
number of years, including such Stockholder's period of ownership of
VTE Common Stock;
(ii) that each Stockholder will be well-compensated under
this Agreement for the expertise, knowledge and contacts he or she has
obtained, as well as the goodwill that he or she has built up in VTE,
and that this Section 8.14 is being executed as an integral part of
such Stockholder's sale of all of his or her VTE Common Stock to
Premiere pursuant to the Merger, an express element of which includes
the sale of the goodwill such Stockholder's ownership and service has
generated, and for which sale such Stockholder will receive
substantial remuneration hereunder;
(iii) that each Stockholder has occupied a position of
trust and responsibility with VTE in which he or she has had access to
a substantial amount of VTE Confidential Information and VTE Trade
Secrets, and that Premiere is entering into this Agreement in reliance
upon such Stockholder's agreement not to use or disclose such VTE
Trade Secrets and VTE Confidential Information, not to compete
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against Premiere or any Affiliate, and not to solicit Premiere's or
any such Affiliates' customers during the time periods set forth in
this Agreement;
(iv) that each Stockholder's special experience and his or
her close identification with goodwill of VTE, the harm caused by such
Stockholder's violation of the provisions of this Section 8.14 cannot
reasonably or adequately be compensated solely by damages in an action
at law;
(v) that each Stockholder is capable of competing with
and substantially harming Premiere and its Affiliates and has more
than adequate capital, experience, customer contract, supplier
contact, name recognition and industry reputation to start a competing
business, which would deprive Premiere of all or substantially all of
its bargained for goodwill and other consideration in the transactions
contemplated in this Agreement; and
(vi) that the terms of this Section 8.14 are necessary to
protect Premiere's legitimate business interests and its rights in the
VTE Trade Secrets and VTE Confidential Information and that
Stockholder's competition with Premiere or any of its Affiliates or
other violation of the covenants set forth below would cause
substantial and irreparable harm to Premiere.
(b) For three (3) years immediately following the Effective
Time, if Premiere or any of its Affiliates continues to carry on the
Business Activities of VTE, no Stockholder (other than Amway) shall,
directly or indirectly, by himself or herself or in conjunction with any
person, firm or corporation other than Premiere, engage in Business
Activities, or help anyone else engage in the Business Activities, within
the Restricted Territory. Notwithstanding anything contained herein to the
contrary, a Stockholder may own up to two percent (2%) of the shares of a
publicly-held corporation which competes with Premiere or any of its
Affiliates, provided none of his or her other relationships with such
corporation violate the terms of this Section 8.14 (provided that this
restriction shall not apply to Amway).
(c) For three (3) years immediately following the Effective
Time, no Stockholder (other than Amway) shall, for himself or herself or on
behalf of others, use or disclose any VTE Confidential Information or VTE
Trade Secrets except in the furtherance of the business of Premiere or any
of its Affiliates. No Stockholder (other than Amway) shall use or disclose
any VTE Trade Secrets at any time while the information remains a VTE Trade
Secret. Nothing in this provision shall limit the protections available to
Premiere under any federal, state or local statute or legal principle
governing confidential information or trade secrets.
(d) If a Stockholder (other than Amway) violates any portion of
this Section 8.14, such Stockholder shall forfeit all compensation due to
such Stockholder under the General Escrow Agreement or the Specific Escrow
Agreement.
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<PAGE>
(e) Each Stockholder (other than Amway) acknowledges that his
or her agreement not to compete with Premiere or any of its Affiliates is
necessarily of a special, unique and extraordinary nature, and that the
loss arising from a breach thereof cannot reasonably be compensated by
money damages and will cause Premiere and any such Affiliate irreparable
harm. Accordingly, upon the failure of any Stockholder (other than Amway)
to comply with the terms of this Section 8.14 at any time, Premiere and any
such Affiliate shall be entitled to injunctive or other extraordinary
relief in case of such breach, such injunctive or other extraordinary
relief to be cumulative to, but not in limitation of, any other remedies to
which Premiere or any such Affiliate may be entitled.
(f) Premiere and the Stockholders (other than Amway) intend
that Premiere have the broadest possible protection from unfair competition
by the Stockholders (other than Amway) with Premiere or any of its
Affiliates, consistent with public policy. Accordingly, should any court of
competent jurisdiction determine that, consistent with the established
precedent of the forum state, the public policy of such state requires a
more limited restriction in duration, geographical area, nature of
restricted activity, or any combination thereof, it would be in furtherance
of the intentions of the parties hereto for the court to so interpret and
construe the terms of this Agreement, or to modify the Agreement, to apply
to only such more limited restrictions to an appropriate degree.
8.15 EMPLOYMENT AGREEMENT. Each Stockholder listed in Section 9.1(i)
--------------------
of the VTE Disclosure Memorandum shall execute and deliver to Premiere at
Closing the relevant Employment Agreement referred to in Section 9.1(i).
8.16 NATIONAL CITY BANK PAYMENT. Upon the Closing, Premiere will pay,
--------------------------
or cause VTE to pay, the entire balance outstanding at such time on VTE's line
of credit and demand note with National City Bank.
8.17 AMWAY CONVERTIBLE NOTE. At Closing, Amway shall convert the
----------------------
Amway Convertible Note into 95.75 shares of VTE Common Stock and 78.25 shares of
VTN Common Stock; provided, however, that if the Average Closing Price (without
regard to the Average Closing Price Limitations) is less than $19.85, Amway
shall not be required to convert the Amway Convertible Note, but, in that event,
VTE shall pay in full the Amway Convertible Note at Closing and, in either
event, Amway shall release in full any other rights or remedies that it has by
reason of the Amway Convertible Note.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
-------------------------------------------------
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
---------------------------------------
obligations of each Party to perform this Agreement and consummate the Merger
and the other transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by both Parties pursuant to Section
12.6:
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<PAGE>
(a) [RESERVED]
(b) REGULATORY APPROVALS. All waiting periods required by HSR
--------------------
shall have expired.
(c) CONSENTS AND APPROVALS. VTE shall have obtained the
----------------------
Consents required for consummation of the Merger or for the preventing of
any Default under any Contract or Permit of VTE set forth on Section 5.2(b)
of the VTE Disclosure Memorandum. No Consent so obtained which is necessary
to consummate the transactions contemplated hereby shall be conditioned or
restricted in a manner which in the reasonable judgment of the Board of
Directors of Premiere would so materially adversely impact the economic or
business benefits of the transactions contemplated by this Agreement that,
had such condition or requirement been known, such Party would not, in its
reasonable judgment, have entered into this Agreement.
(d) LEGAL PROCEEDINGS. No court or governmental or regulatory
-----------------
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) or taken any other action which prohibits,
restricts or makes illegal consummation of the transactions contemplated by
this Agreement.
(e) EXCHANGE LISTING. The shares of Premiere Common Stock
----------------
issuable pursuant to the Merger shall have been approved for listing on the
Nasdaq National Market.
(f) POOLING LETTERS. Each of the Parties shall have received
---------------
letters, dated as of the Effective Time, addressed to Premiere, in form and
substance reasonably acceptable to Premiere, from Arthur Andersen LLP,
acting as auditors for Premiere, to the effect that the Merger will qualify
for pooling-of-interests accounting treatment. Each of the Parties also
shall have received letters, dated as of the Effective Time, addressed to
Premiere, in form and substance reasonably acceptable to Premiere, from
Arthur Andersen LLP, acting as auditors for VTE, to the effect that such
firm is not aware of any matters relating to VTE and its Subsidiaries which
would preclude the Merger from qualifying for pooling-of-interests
accounting treatment.
(g) [RESERVED]
(h) REGISTRATION RIGHTS. Premiere and each of the Stockholders,
-------------------
so desiring, shall have executed and delivered the Stock Restriction and
Registration Rights Agreement, in the form attached hereto as Exhibit
(i) VTN MERGER. Sub II and VTN shall have consummated the VTN
----------
Merger.
(j) MPI PURCHASE. Premiere shall have consummated the purchase
------------
of the Partner Interest from MPI pursuant to the MPI Purchase Agreement.
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9.2 CONDITIONS TO OBLIGATIONS OF PREMIERE. The obligations of
-------------------------------------
Premiere to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Premiere pursuant to Section 12.6(a):
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
------------------------------
Section 9.2(a), the accuracy of the representations and warranties of VTE
and the Stockholders set forth in this Agreement shall be assessed as of
the date of this Agreement and as of the Effective Time with the same
effect as though all such representations and warranties had been made on
and as of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such date).
All other representations and warranties of VTE and the Stockholders
contained in this Agreement or any agreement, certificate or instrument
entered into or delivered in connection herewith shall be true and correct
in all material respects.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
---------------------------------------
the agreements and covenants of VTE and the Stockholders to be performed
and complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been duly
performed and complied with in all material respects.
(c) CERTIFICATES. VTE shall have delivered to Premiere (i) a
------------
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its chief financial officer, to the effect that
the conditions set forth in Section 9.1 as relates to VTE and in Section
9.2(a), 9.2(b) and 9.2(h) have been satisfied, (ii) certified copies of
resolutions duly adopted by VTE's Board of Directors and stockholders
evidencing the taking of all corporate action necessary to authorize the
execution, delivery and performance of this Agreement, and the consummation
of the transactions contemplated hereby, all in such reasonable detail as
Premiere and its counsel shall request, and (iii) a certificate or
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its chief financial officer, in form and
substance satisfactory to Premiere and containing such supporting
information as Premiere may request, relating to the calculation of the
adjustments, if any, to the VTE Purchase Price as contemplated in Section
3.1(d)(ii)(A)-(E).
(d) OPINIONS OF COUNSEL. Premiere shall have received an
-------------------
opinion of Benesch, Friedlander, Coplan & Aronoff, counsel to VTE, in form
and substance reasonably satisfactory to Premiere. Premiere shall also have
received opinions from counsel to each of the Stockholders (other than
Amway) and an opinion of counsel to Amway, each dated as of the Closing, in
each case containing customary opinions relating to organization, authority
and enforceability.
(e) [RESERVED]
(f) [RESERVED]
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<PAGE>
(g) CLAIMS LETTERS. Each of the directors and officers of VTE
--------------
and the other Persons listed in Section 9.2(g) of the VTE Disclosure
Memorandum shall have executed and delivered to Premiere letters in
substantially the form of Exhibit 7.
(h) STOCKHOLDERS' EQUITY. VTE's stockholders' equity as of the
--------------------
Closing shall not be less than VTE's stockholders' equity as of December
31, 1996, excluding for purposes of the calculation of such stockholders'
equity the effects of (i) all costs, fees and charges, including fees and
charges of VTE's accountants, counsel and financial advisors, whether or
not accrued or paid, that are related to the transactions contemplated by
this Agreement and (ii) any reductions in VTE's stockholders' equity
resulting from any actions or changes in policies of VTE taken at the
request of Premiere or actions contemplated by this Agreement to occur on
or before the Closing.
(i) OWNERSHIP AGREEMENTS. VTE shall have used its commercially
--------------------
reasonable best efforts to have each of the persons identified in Section
9.2(i) of the VTE Disclosure Memorandum execute and deliver to VTE and
Premiere agreements, in form and substance reasonably satisfactory to
Premiere, confirming in or transferring to VTE certain Intellectual
Property Rights as described in Section 9.2(i) of the VTE Disclosure
Memorandum.
(j) [RESERVED] (K) STOCK REPURCHASES. VTE shall have
-----------------
repurchased from the Persons listed on Section 5.16(ix) of the VTE
Disclosure Memorandum the outstanding VTE Common Stock held by such Persons
pursuant to rights under and in accordance with the terms of existing
Contracts for repurchase or redemption of such VTE Common Stock as
described in Section 5.16(ix) of the VTE Disclosure Memorandum.
(l) [RESERVED]
(m) [RESERVED]
(n) GRAND SOLUTION DOCUMENTS. VTE, VTNLP, NAP and the
------------------------
Franchisees shall have executed and delivered the Grand Solution Documents
in the forms attached as Exhibit 8.
(o) EMPLOYMENT, SEVERANCE AND NONCOMPETITION AGREEMENTS. Each
---------------------------------------------------
of the Persons identified in Section 9.2(o) of the VTE Disclosure
Memorandum shall have executed and delivered to Premiere, and Premiere
shall have executed and delivered to such Persons, an employment or
severance and noncompetition agreement, in form and substance reasonably
satisfactory to the Persons and Premiere (collectively, the "Employment
Agreements").
9.3 CONDITIONS TO OBLIGATIONS OF VTE AND THE STOCKHOLDERS. The
-----------------------------------------------------
obligations of VTE and the Stockholders to perform this Agreement and consummate
the Merger and the other
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transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by VTE pursuant to Section 12.6(b):
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
------------------------------
Section 9.3(a), the accuracy of the representations and warranties of
Premiere set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as though
all such representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties which are
confined to a specified date shall speak only as of such date). The
representations and warranties of Premiere set forth in this Agreement
shall be true and correct in all material respects..
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
---------------------------------------
the agreements and covenants of Premiere to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all material respects.
(c) CERTIFICATES. Premiere shall have delivered to VTE (i) a
------------
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its chief financial officer, to the effect that
the conditions set forth in Section 9.1 as relates to Premiere and in
Section 9.3(a) and 9.3(b) have been satisfied, and (ii) certified copies of
resolutions duly adopted by Premiere's Board of Directors and, if required,
Premiere's shareholders evidencing the taking of all corporate action
necessary to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby,
all in such reasonable detail as VTE and its counsel shall request.
(d) OPINION OF COUNSEL. VTE shall have received an opinion of
------------------
Alston & Bird LLP, counsel to Premiere, dated as of the Effective Time,
containing customary opinions relating to organization, authority and
enforceability.
ARTICLE 10
INDEMNIFICATION
---------------
10.1 AGREEMENT OF INDEMNITORS TO INDEMNIFY. Subject to the terms and
-------------------------------------
conditions of this Article 10, Indemnitors jointly and severally agree to
indemnify, defend, and hold harmless Indemnitees, and each of them, from,
against, for and in respect of any and all Losses asserted against, or paid,
suffered or incurred by, an Indemnitee and resulting from, based upon, or
arising out of:
(a) the inaccuracy, untruth, incompleteness or breach of any
representation or warranty of (i) any Indemnitor or VTE contained in or
made pursuant to this Agreement or in any certificate, Schedule, or Exhibit
furnished by Indemnitors in connection herewith or (ii) VTN or any
Stockholder of VTN in the VTN Merger Agreement; provided that for purposes
of this Section 10.1(a) any qualification of such representations and
warranties by
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reference to the materiality of matters stated therein or as
to matters having or not having a "Material Adverse Effect,", and any
limitation of such representations and warranties as being "to the
knowledge of," or "known to" or words of similar effect, shall be
disregarded, in determining any inaccuracy, untruth, incompleteness or
breach thereof;
(b) a breach of or failure to perform any covenant or agreement
of (i) Indemnitors or VTE made in this Agreement or (ii) VTN or the
Stockholders of VTN in the VTN Merger Agreement; and
(c) any claim by a current or former Franchisee (or beneficiary
of an SRA) related to the ownership, control, operation, administration or
other rights to the Network or VTNLP, including without limitation any
claim based on the sale or provision of Network services or right to
control access to the Network to the extent such claim is based on a right
purportedly in existence as of the Effective Time;.
(d) any claim arising out of or related to the matters set
forth in Sections 5.9(a) and 5.15(b) of the VTE Disclosure Memorandum and
Sections 5.9(a) and 5.15(b) of the VTN Disclosure Memorandum;
(e) any claim arising out of or related to the matters set
forth in Section 5.11(c) of the VTE Disclosure Memorandum and Section
5.11(c) of the VTN Disclosure Memorandum;
(f) any claim by an officer or director or former officer or
director of VTE for indemnification under the by-laws of VTE or any
Subsidiary of VTE or pursuant to any Contract relating to a claim brought
against such officer or director in such capacity relating to any act or
omission or alleged act or omission occurring in whole or in part on or
prior to the Effective Time; and
(g) any claim by any member of the board of directors or
trustees of the NAP or the Franchisee Association pursuant to the
indemnification letter attached as Section 10.1(g) of the VTE Disclosure
Memorandum.
10.2 PROCEDURES FOR INDEMNIFICATION.
------------------------------
(a) An Indemnification Claim shall be made by an Indemnitee by
delivery of a written notice to the Stockholder Representative requesting
indemnification and specifying the basis on which indemnification is sought
and the amount of asserted Losses and, in the case of a Third Party Claim,
containing (by attachment or otherwise) such other information as such
Indemnitee shall have concerning such Third Party Claim.
(b) If the Indemnification Claim involves a Third Party Claim
the procedures set forth in Section 10.3 shall be observed by the
Indemnitee and the Stockholder Representative.
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(c) If the Indemnification Claim involves a matter other than a
Third Party Claim, the Stockholder Representative shall have 30 days to
object to such Indemnification Claim by delivery of a written notice of
such objection to such Indemnitee specifying in reasonable detail the basis
for such objection. Failure to timely so object shall constitute a final
and binding acceptance of the Indemnification Claim by the Stockholder
Representative on behalf of all Indemnitors, and the Indemnification Claim
shall be paid in accordance with subsection (d) hereof. If an objection is
timely interposed by the Stockholder Representative and the dispute is not
resolved by such Indemnitee and the Stockholder Representative within 30
days from the date the Indemnitee receives such objection, such dispute
shall be resolved by arbitration as provided in Section 10.7.
(d) Upon determination of the amount of an Indemnification
Claim, whether by agreement between the Stockholder Representative and the
Indemnitee or by an arbitration award or by any other final adjudication,
the Indemnitors shall pay the amount of such Indemnification Claim within
ten days of the date such amount is determined.
10.3 THIRD PARTY CLAIMS. The obligations and liabilities of the
------------------
parties hereunder with respect to a Third Party Claim shall be subject to the
following terms and conditions:
(a) The Indemnitee shall give the Stockholder Representative
written notice of a Third Party Claim promptly after receipt by the
Indemnitee of notice thereof, and the Stockholder Representative, on behalf
of the Indemnitors, may undertake the defense, compromise and settlement
thereof by representatives of its own choosing reasonably acceptable to the
Indemnitee. The failure of the Indemnitee to notify the Stockholder
Representative of such claim shall not relieve the Indemnitors of any
liability that they may have with respect to such claim except to the
extent the Stockholder Representative demonstrates that the defense of such
claim is prejudiced by such failure. The assumption of the defense,
compromise and settlement of any such Third Party Claim by the Stockholder
Representative shall be an acknowledgment of the obligation of the
Indemnitors to indemnify the Indemnitee with respect to such claim
hereunder. If the Indemnitee desires to participate in, but not control,
any such defense, compromise and settlement, it may do so at its sole cost
and expense. If, however, the Stockholder Representative fails or refuses
to undertake the defense of such Third Party Claim within ten (10) days
after written notice of such claim has been given to the Stockholder
Representative by the Indemnitee, the Indemnitee shall have the right to
undertake the defense, compromise and settlement of such claim with counsel
of its own choosing. In the circumstances described in the preceding
sentence, the Indemnitee shall, promptly upon its assumption of the defense
of such claim, make an Indemnification Claim as specified in Section 10.2
which shall be deemed an Indemnification Claim that is not a Third Party
Claim for the purposes of the procedures set forth herein.
(b) If, in the reasonable opinion of the Indemnitee, any Third
Party Claim or the litigation or resolution thereof involves an issue or
matter which could have a material adverse effect on the business,
operations, assets, properties or prospects of the Indemnitee (including,
without limitation, the administration of the tax returns and
responsibilities under
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the tax laws of the Indemnitee), the Indemnitee shall have the right to
control the defense, compromise and settlement of such Third Party Claim
undertaken by the Stockholder Representative, and the costs and expenses of
the Indemnitee in connection therewith shall be included as part of the
indemnification obligations of the Indemnitors hereunder. If the Indemnitee
shall elect to exercise such right, the Stockholder Representative shall
have the right to participate in, but not control, the defense, compromise
and settlement of such Third Party Claim at its sole cost and expense. Any
compromise or settlement of such Third Party Claim shall be subject to the
approval of the Stockholder Representative, which approval shall not be
unreasonably withheld, conditioned or delayed.
(c) No settlement of a Third Party Claim involving the
asserted liability of the Indemnitors under this Article shall be made
without the prior written consent by or on behalf of the Stockholder
Representative, which consent shall not be unreasonably withheld or
delayed. Consent shall be presumed in the case of settlements of $20,000 or
less where the Stockholder Representative has not responded within five
business days of notice of a proposed settlement. If the Stockholder
Representative assumes the defense of such a Third Party Claim, (a) no
compromise or settlement thereof may be effected by the Stockholder
Representative without the Indemnitee's consent unless (i) there is no
finding or admission of any violation of law or any violation of the rights
of any person and no effect on any other claim that may be made against the
Indemnitee, (ii) the sole relief provided is monetary damages that are paid
in full by the Indemnitors, and (iii) the compromise or settlement
includes, as an unconditional term thereof, the giving by the claimant or
the plaintiff to the Indemnitee of a release, in form and substance
satisfactory to the Indemnitee, from all liability in respect of such Third
Party Claim, and (b) the Indemnitee shall have no liability with respect to
any compromise or settlement thereof effected without its consent.
(d) In connection with the defense, compromise or settlement of
any Third Party Claim, the parties to this Agreement shall execute such
powers of attorney as may reasonably be necessary or appropriate to permit
participation of counsel selected by any party hereto and, as may
reasonably be related to any such claim or action, shall provide access to
the counsel, accountants and other representatives of each party during
normal business hours to all properties, personnel, books, tax records,
contracts, commitments and all other business records of such other party
related to the Third Party Claim and will furnish to such other party
copies of all such documents as may reasonably be requested (certified, if
requested).
10.4 LIMITATIONS AS TO AMOUNT. Indemnitors shall have no liability
------------------------
with respect to the matters described in Section 10.1 until the total of all
Losses with respect thereto exceeds $50,000, in which event Indemnitors shall be
obligated to indemnify the Indemnitees as provided in this Article 10 for all
such Losses. The Indemnitors shall not be liable for Losses relating to a claim
for indemnification under (i) Section 10.1(a) or 10.1(b) in excess of the
Escrow, as defined in the General Escrow Agreement (the "General Escrow"), on
deposit with the Escrow Agent pursuant to the General Escrow Agreement, and (ii)
Sections 10.1(c), 10.1(d), 10.1(e), 10.1(f) or 10.1(g) in excess of the Escrow,
as defined in the Specific Escrow Agreement (the "Specific Escrow"), and the
General Escrow on deposit with the Escrow Agent pursuant to the Specific
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Escrow Agreement and the General Escrow Agreement (all such shares of Premiere
Common Stock included in the General Escrow and the Specific Escrow,
collectively, the "Escrow Shares"). Pursuant to the terms and conditions of the
Specific Escrow Agreement and the General Escrow Agreement, any payment of any
indemnity to any Indemnitee in accordance with this Article 10 shall be made
solely and exclusively out of, and shall be limited to, the Escrow Shares and
shall be subject to any additional provisions, including those relating to order
or priority of claims, in the Specific Escrow Agreement and the General Escrow
Agreement.
10.5 TAX EFFECT AND INSURANCE. The liability of the Indemnitors with
------------------------
respect to any Indemnification Claim shall be reduced by the tax benefit
actually or reasonably anticipated to be realized and any insurance proceeds
received by the Indemnitees as a result of any Losses upon which such
Indemnification Claim is based, and shall include any tax detriment actually
suffered by the Indemnitees as a result of such Losses. The amount of any such
tax benefit or detriment shall be determined by taking into account the effect,
if any and to the extent determinable, of timing differences resulting from the
acceleration or deferral of items of gain or loss resulting from such Losses and
shall otherwise be determined so that payment by the Indemnitors of the
Indemnification Claim, as adjusted to give effect to any such tax benefit or
detriment, will make the Indemnitee as economically whole as is reasonably
practical with respect to the Losses upon which the Indemnification Claim is
based. Any dispute as to the amount of such tax benefit or detriment shall be
resolved by arbitration as provided in Section 10.8 of this Agreement.
10.6 SUBROGATION. Upon payment in full of any Indemnification Claim,
-----------
whether such payment is effected by set-off or otherwise, or the payment of any
judgment or settlement with respect to a Third Party Claim, the Indemnitors
shall be subrogated to the extent of such payment to the rights of the
Indemnitee against any person or entity with respect to the subject matter of
such Indemnification Claim or Third Party Claim.
10.7 ARBITRATION. All disputes arising under this Article 10 (other
-----------
than claims in equity) shall be resolved by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.
Arbitration shall be by a single arbitrator experienced in the matters at issue
and selected by the Stockholder Representative and Premiere in accordance with
the Commercial Arbitration Rules of the American Arbitration Association. The
arbitration shall be held in such place in Atlanta, Georgia as may be specified
by the arbitrator (or any place agreed to by the Stockholder Representative,
Premiere and the arbitrator). The decision of the arbitrator shall be final and
binding as to any matters submitted under this Article 10; provided, however, if
necessary, such decision and satisfaction procedure may be enforced by either
the Stockholder Representative or Premiere in any court of record having
jurisdiction over the subject matter or over any of the parties to this
Agreement. All costs and expenses incurred in connection with any such
arbitration proceeding (including reasonable attorneys fees) shall be borne by
the party against which the decision is rendered, or, if no decision is
rendered, such costs and expenses shall be borne equally by the Indemnitors as
one party and the Indemnitees as the other party. If the arbitrator's decision
is a compromise, the determination of which party or parties bears the costs and
expenses incurred in connection with any such arbitration proceeding shall be
made by the arbitrator on the basis of the arbitrator's assessment of the
relative merits of the parties' positions.
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10.8 EXCLUSIVITY. After the Closing, to the extent permitted by Law,
the indemnities set forth in this Article 10 shall be the exclusive remedy of
the Indemnitees for any misrepresentation, breach of warranty or nonfulfillment
or failure to be performed of any covenant or agreement contained in this
Agreement, and the parties shall not be entitled to a rescission of this
Agreement or to any further rights or claims of any nature whatsoever in respect
hereof, all of which the Indemnitees hereby waive; provided, however, that
nothing herein limits, and the Indemnitees do not waive, any right or remedy
based on any claim for fraud, which liability based on any claim of fraud, if
any, shall be several and not joint.
ARTICLE 11
TERMINATION
-----------
11.1 Termination. Notwithstanding any other provision of this
-----------
Agreement, and notwithstanding the approval of this Agreement by the
stockholders of VTE or, if required, the Shareholders of Premiere, this
Agreement may be terminated and the Merger abandoned at any time prior to the
Effective Time:
(a) By mutual consent of Premiere and VTE; or
(b) By either Party (provided that the terminating Party is not
then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a material breach by
the other Party of any representation or warranty contained in this
Agreement which cannot be or has not been cured within 30 days after the
giving of written notice to the breaching Party of such breach; or
(c) By either Party (provided that the terminating Party is not
then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a material breach by
the other Party of any covenant or agreement contained in this Agreement
which cannot be or has not been cured within 30 days after the giving of
written notice to the breaching Party of such breach; or
(d) By either Party (provided that the terminating Party is not
then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement relating to Consents of Regulatory
Authorities or approval of Stockholders) in the event any Consent of any
Regulatory Authority required for consummation of the Merger and the other
transactions contemplated hereby shall have been denied by final
nonappealable action of such authority or if any action taken by such
authority is not appealed within the time limit for appeal; or
(e) By either Party in the event that the Merger shall not have
been consummated by June 30, 1997, if the failure to consummate the
transactions contemplated hereby on or before such date is not caused by
any breach of this Agreement by the Party electing to terminate pursuant to
this Section 11.1(e); or
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(f) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event that any of
the conditions precedent to the obligations of such Party to consummate
the Merger cannot be satisfied or fulfilled, or have not been waived in
writing, by the date specified in Section 11.1(e); or
(g) By either Party if the Average Closing Price is less
than $19.50, unless, in the event the terminating party is VTE,
Premiere, within forty eight (48) hours after receipt of written notice
from VTE of its election to terminate pursuant to this Section 11.1(g)
agrees to adjust the Exchange Ratio to the quotient obtained by dividing
(i) the product of (A) the Exchange Ratio determined pursuant to Section
3.1(c) (including the application of the Average Closing Price
Limitations), multiplied by (B) $19.50, by (ii) the Average Closing
Price (without application of the Average Closing Price Limitations)
(the "Adjusted Exchange Ratio"), in which event the Firm Exchange Ratio
shall be the product of (A) either (1) .77 if the Amway Convertible Note
is converted or (2) .71 if the Amway Convertible Note is not converted
and (B) the Adjusted Exchange Ratio, and the General Escrow Exchange
Ratio shall be the product of .1 and the Adjusted Exchange Ratio and the
Specific Exchange Ratio shall be the product of (C) either (3) .13 if
the Amway Convertible Note is converted or (4) .19 if the Amway
Convertible Note is not converted and (D) the Adjusted Exchange Ratio.
11.2 EFFECT OF TERMINATION. In the event of the
---------------------
termination and abandonment of this Agreement pursuant to Section 11.1, this
Agreement shall become void and have no effect, except that (i) the provisions
of this Section 11.2 and Article 12 and Section 8.6(b) shall survive any such
termination and abandonment, and (ii) a termination pursuant to Sections
11.1(b), 11.1(c) or 11.1(f) shall not relieve the breaching Party from Liability
for an uncured willful breach of a representation or warranty or any breach of
any covenant or agreement contained in this Agreement, nor release the other
Party for any liability for any breach of any covenant or agreement contained in
this Agreement.
ARTICLE 12
MISCELLANEOUS
12.1 DEFINITIONS.
-----------
(a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as
amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"ACQUISITION PROPOSAL" with respect to a Party shall mean
any tender offer or exchange offer or any proposal for a merger,
acquisition of all of the stock or assets of, or
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other business combination involving the acquisition of such Party or
any of its Subsidiaries or the acquisition of a substantial equity
interest in, or a substantial portion of the assets of, such Party or
any of its Subsidiaries.
"AFFILIATE" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries,
controlling, controlled by or under common control with such Person;
(ii) any officer, director, partner, employer, or direct or indirect
beneficial owner of any 10% or greater equity or voting interest of
such Person; or (iii) any other Person for which a Person described in
clause (ii) acts in any such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
including the Exhibits delivered pursuant hereto and incorporated
herein by reference.
"AMWAY" shall mean Amway Corporation, a Michigan
corporation and a Stockholder of VTE.
"AMWAY CLOSING DOCUMENTS" shall mean the General Escrow
Agreement, Specific Escrow Agreement and the Registration Rights
Agreement.
"AMWAY CONVERTIBLE NOTE" shall mean the Revolving Credit
Note dated December 16, 1994 made by VTE and VTNLP to Amway in the
principal amount of $5,000,000, and the related Credit Agreement dated
December 16, 1994 among VTE, VTNLP, VTN and Amway, as amended and
supplemented thereafter.
"AMWAY RESELLER AGREEMENT" shall mean the Service and
Reseller Agreement dated September 28, 1990, between Amway and VTE, as
amended by First Amendment to Service and Reseller Agreement dated
March 19, 1996 and Second Amendment to Service and Reseller Agreement
dated June 25, 1996.
"ASSETS" of a Person shall mean all of the assets,
properties, businesses and rights of such Person of every kind,
nature, character and description, whether real, personal or mixed,
tangible or intangible, accrued or contingent, or otherwise relating
to or utilized in such Person's business, directly or indirectly, in
whole or in part, whether or not carried on the books and records of
such Person, and whether or not owned in the name of such Person or
any Affiliate of such Person and wherever located.
"BUSINESS ACTIVITIES" shall mean the provision of
interactive voice messaging services.
"CERTIFICATE OF MERGER" shall mean the Certificate of
Merger to be executed by VTE and filed with the Secretary of State of
the State of Delaware relating to the Merger as contemplated by
Section 1.1.
"CLOSING DATE" SHALL mean the date on which the Closing
occurs.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
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"CONFIDENTIALITY AGREEMENT" shall mean that certain
Confidentiality Agreement, dated January ,1997, between VTE and
Premiere.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"CONSOLIDATED INDEBTEDNESS OF VTE" shall mean the aggregate
outstanding balance of principal and accrued and unpaid interest under
funded debt and capital lease obligations of VTE and its Subsidiaries
stated on a consolidated basis in accordance with GAAP.
"Contract" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture,
instrument, lease, obligation, plan, practice, restriction,
understanding, or undertaking of any kind or character, or other
document to which any Person is a party or that is binding on any
Person or its capital stock, Assets or business.
"DEFAULT" shall mean (i) any breach or violation of,
default under any Contract, Law, Order, or Permit, (ii) any occurrence
of any event that with the passage of time or the giving of notice or
both would constitute a breach or violation of, or default under any
Contract, Law, Order, or Permit, or (iii) any occurrence of any event
that with or without the passage of time or the giving of notice would
give rise to a right of any Person to exercise any remedy or obtain
any relief under, terminate or revoke, suspend, cancel, or modify or
change the current terms of, or renegotiate, or to accelerate the
maturity or performance of, or to increase or impose any Liability
under, any Contract, Law, Order, or Permit.
"DGCL" shall mean the Delaware General Corporation Law.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to
pollution or protection of human health or the environment (including
ambient air, surface water, ground water, land surface, or subsurface
strata) and which are administered, interpreted, or enforced by the
United States Environmental Protection Agency and state and local
agencies with jurisdiction over, and including common law in respect
of, pollution or protection of the environment, including the
Comprehensive Environmental Response Compensation and Liability Act,
as amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. 6901 et seq.
("RCRA"), and other Laws relating to emissions, discharges, releases,
or threatened releases of any Hazardous Material, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of any Hazardous Material.
"EQUITY RIGHTS" shall mean all arrangements, calls,
commitments, Contracts, options, rights to subscribe to, scrip,
understandings, warrants, or other binding obligations of any
character whatsoever relating to, or securities or rights convertible
into or
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exchangeable for, shares of the capital stock of a Person or by which
a Person is or may be bound to issue additional shares of its capital
stock or other Equity Rights.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"EXHIBITS" 1 through 8, inclusive, shall mean the Exhibits
so marked, copies of which are attached to this Agreement. Such
Exhibits are hereby incorporated by reference herein and made a part
hereof, and may be referred to in this Agreement and any other related
instrument or document without being attached hereto.
"FRANCHISE" shall mean the rights granted by VTE relating
to the ownership and/or operation of one or more Service Centers in
one or more Sales Territories within a Protected Territory pursuant to
a Franchise Agreement.
"FRANCHISE AGREEMENT" shall mean a franchise or license
agreement and all amendments, supplements and modifications thereto
entered into by VTE with any Franchisee relating to a Franchise.
"FRANCHISE OFFERING CIRCULAR" shall mean a franchise
offering circular used by VTE to offer and sell Franchises.
"FRANCHISEE" shall mean any holder of a Franchise.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous
substance, hazardous material, hazardous waste, regulated substance,
or toxic substance (as those terms are defined by any applicable
Environmental Laws) and (ii) any chemicals, pollutants, contaminants,
petroleum, petroleum products, or oil (and specifically shall include
asbestos requiring abatement, removal, or encapsulation pursuant to
the requirements of governmental authorities and any polychlorinated
biphenyls).
"HSR ACT" shall mean Section 7A of the Clayton Act, as
added by Title II of the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated
thereunder.
"HUB" shall mean a site which houses switching and routing
equipment used for accepting voice message packet data from the
Service Centers via the T1 local loop and transmitting that packet
data to other Hubs or to Service Centers. There are currently twelve
Hubs, one located in each of ten U.S. cities, plus an eleventh Hub in
Toronto, Canada and a twelfth Hub in Sydney, Australia.
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"INDEMNIFICATION CLAIM" shall mean a claim for
indemnification under Article 10.
"INDEMNITEES" shall mean Premiere, VTE and their respective
officers, directors, stockholders, controlling persons, Affiliates and
Representatives.
"INDEMNITORS" shall mean the Stockholders.
"INTELLECTUAL PROPERTY RIGHT" shall mean: (a) any patent,
patent application, trademark (whether registered or unregistered),
trademark application, trade name, fictitious business name, service
mark (whether registered or unregistered), service mark application,
copyright (whether registered or unregistered), copyright application,
maskwork, maskwork application, trade secret, know-how, customer list,
system, computer software or computer program (including any source or
object codes therefor or documentation relating thereto), invention,
design, blueprint, engineering drawing, proprietary product,
technology, proprietary right or other intellectual property right or
intangible asset; and (b) any right to use or exploit any of the
foregoing.
"INVESTOR QUESTIONNAIRES" shall mean the investor
questionnaires relating to various matters under the Securities Laws
completed by Stockholders and delivered to Premiere prior to the date
hereof.
"KNOWLEDGE" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall
mean the personal knowledge after due inquiry of those facts that are
known or should reasonably have been known after due inquiry and, as
used with respect to a Person that is a corporation or other business
entity, after due inquiry by the chairman, president, chief financial
officer, chief accounting officer, chief operating officer, general
counsel, any assistant or deputy general counsel, or any senior,
executive or other vice president of such Person and the knowledge of
any such persons obtained or which would have been obtained from a
reasonable investigation.
"LAW" shall mean any code, law (including common law),
ordinance, regulation, reporting or licensing requirement, rule, or
statute applicable to a Person or its Assets, Liabilities, or
business, including those promulgated, interpreted or enforced by any
Regulatory Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or
expense (including costs of investigation, collection and defense),
claim, deficiency, guaranty or endorsement of or by any Person (other
than endorsements of notes, bills, checks, and drafts presented for
collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated,
matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default
of title, easement, encroachment, encumbrance, hypothecation,
infringement, lien, mortgage, pledge, reservation, restriction,
security interest, title retention or other security arrangement, or
any ad-
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verse right or interest, charge, or claim of any nature whatsoever of,
on, or with respect to any property or property interest, other than
(i) Liens for current property Taxes not yet due and payable, and
(iii) Liens which do not materially impair the use of or title to the
Assets subject to such Lien.
"LITIGATION" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, governmental or other
examination or investigation, hearing, administrative or other
proceeding relating to or affecting a Party, its business, its Assets
(including Contracts related to it), or the transactions contemplated
by this Agreement.
"LOSSES" shall mean any and all demands, claims, actions or
causes of action, assessments, losses, diminution in value, damages
(including special and consequential damages), liabilities, costs, and
expenses, including interest, penalties, cost of investigation and
defense, and reasonable attorneys' and other professional fees and
expenses.
"MATERIAL" for purposes of this Agreement shall be
determined in light of the facts and circumstances of the matter in
question; provided that any specific monetary amount stated in this
Agreement shall determine materiality in that instance.
"MPI" shall mean Merchandising Productions, Inc., a
Delaware corporation and wholly-owned subsidiary of Amway and the sole
limited partner of VTNLP.
"MPI PURCHASE AGREEMENT" shall mean the Purchase and Sale
Agreement of even date between Premiere and MPI.
"NAP AGREEMENT" shall mean an agreement executed by a
Franchisee and VTE in which the Franchisee agrees to be bound by the
bylaws of the NAP Board.
"NAP BOARD" shall mean the Board of Directors of the NAP.
"NAP" shall mean the National Accounts Program of VTE, an
Ohio unincorporated association.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"NASDAQ NATIONAL MARKET" shall mean the National Market
System of the National Association of Securities Dealers Automated
Quotations System.
"NETWORK" shall mean the digital frame relay network owned
by VTNLP and managed by VTE which includes the NIBs, the Hubs, all
equipment associated with the NIBs and Hubs, all connections between
the NIBs and the Hubs, and all connections between the Hubs.
"NIB" shall mean a Network interface box, developed by VTE
and utilized by VTE, VTN, VTNLP and the Franchisees.
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"OPERATING PROPERTY" shall mean any property owned, leased,
or operated by the Party in question or by any of its Subsidiaries or
in which such Party or Subsidiary holds a security interest or other
interest (including an interest in a fiduciary capacity), and, where
required by the context, includes the owner or operator of such
property, but only with respect to such property.
"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local or foreign or other
court, arbitrator, mediator, tribunal, administrative agency, or
Regulatory Authority.
"PARTICIPATION FACILITY" shall mean any facility or
property in which the Party in question or any of its Subsidiaries
participates in the management and, where required by the context,
said term means the owner or operator of such facility or property,
but only with respect to such facility or property.
"PARTNER INTEREST" shall have the meaning set forth in the
MPI Purchase Agreement.
"PARTY" shall mean either VTE or Premiere, and "Parties"
shall mean both VTE and Premiere.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets, or business.
"PERSON" shall mean a natural person or any legal,
commercial or governmental entity, such as, but not limited to, a
corporation, general partnership, joint venture, limited partnership,
limited liability company, trust, business association, group acting
in concert, or any person acting in a representative capacity.
"PREMIERE CAPITAL STOCK" shall mean, collectively, the
Premiere Common Stock, the Premiere Preferred Stock and any other
class or series of capital stock of Premiere.
"PREMIERE COMMON STOCK" shall mean the $0.01 par value
common stock of Premiere.
"PREMIERE DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Premiere Technologies, Inc. Disclosure
Memorandum" delivered prior to the date of this Agreement to VTE
describing in reasonable detail the matters contained therein and,
with respect to each disclosure made therein, specifically referencing
each Section of this Agreement under which such disclosure is being
made. Information disclosed with respect to one Section shall not be
deemed to be disclosed for purposes of any other Section not
specifically referenced with respect thereto.
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"PREMIERE ENTITIES" shall mean, collectively, Premiere and
all Premiere Subsidiaries.
"PREMIERE FINANCIAL STATEMENTS" shall mean (i) the
consolidated balance sheets (including related notes and schedules, if
any) of Premiere as of December 31, 1996 and 1995, and the related
statements of operations, changes in stockholders' equity, and cash
flows (including related notes and schedules, if any) for each of the
three fiscal years ended December 31, 1996, 1995 and 1994, as filed by
Premiere in SEC Documents, and (ii) the consolidated balance sheets of
Premiere (including related notes and schedules, if any) and related
statements of operations, changes in stockholders' equity, and cash
flows (including related notes and schedules, if any) included in SEC
Documents filed with respect to periods ended subsequent to December
31, 1996.
"PREMIERE MATERIAL ADVERSE EFFECT" shall mean an event,
change or occurrence which, individually or together with any other
event, change or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of Premiere and
its Subsidiaries, taken as a whole, or (ii) the ability of Premiere to
perform its obligations under this Agreement or to consummate the
Merger or the other transactions contemplated by this Agreement,
provided that "Material Adverse Effect" shall not be deemed to include
the impact of (a) changes in Laws of general applicability or
interpretations thereof by courts or governmental authorities, (b)
changes in generally accepted accounting principles, (c) actions and
omissions of Premiere (or any of its Subsidiaries) taken with the
prior informed written Consent of VTE in contemplation of the
transactions contemplated hereby, and (d) the direct effects of
compliance with this Agreement on the operating performance of
Premiere, including expenses incurred by Premiere in consummating the
transactions contemplated by this Agreement.
"PREMIERE PREFERRED STOCK" shall mean the $0.01 par value
preferred stock of Premiere.
"PREMIERE STOCK PLANS" shall mean the existing stock option
and other stock-based compensation plans of Premiere designated as
follows: Premiere Technologies, Inc. 1994 Stock Option Plan and
Premiere Technologies, Inc. Amended and Restated 1995 Stock Plan.
"PREMIERE SUBSIDIARIES" shall mean the Subsidiaries of
Premiere, which shall include the Premiere Subsidiaries described in
Section 6.4 and any corporation or other organization acquired as a
Subsidiary of Premiere in the future and held as a Subsidiary by
Premiere at the Effective Time.
"PROTECTED TERRITORY" shall mean the territory in which a
Franchisee solicits and provides services and products to customers
for digital voice messaging services as such territory is defined in
the applicable Franchise Agreement.
"PROXY STATEMENT" shall mean the proxy statement used by
VTE to solicit the approval of its stockholders of the transactions
contemplated by this Agreement.
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"RELIABLY HANDLING" as used in this section shall mean
delivering a complete voice mail message to electronic storage at the
Service Center which hosts the voice messaging service of the intended
recipient of the message so that the intended recipient may listen to
the message within an average of forty-five (45) minutes of the time
the message was recorded by the sender.
"REGULATORY AUTHORITIES" shall mean, collectively, the SEC,
the NASD, the Federal Trade Commission, the United States Department
of Justice, and all other federal, state, county, local or other
governmental or regulatory agencies, authorities (including self-
regulatory authorities), instrumentalities, commissions, boards or
bodies having jurisdiction over the Parties and their respective
Subsidiaries.
"RELATED PERSON" shall mean, with regard to any Stockholder
or any director, officer or employee of any VTE Entity, his or her
spouse, parent, sibling, child, aunt, uncle, niece, nephew, in-law,
grandparent and grandchild (including by adoption or remarriage) and
any trustees or other fiduciaries for the benefit of such relatives.
"REPRESENTATIVE" shall mean any investment banker,
financial advisor, attorney, accountant, consultant, or other
representative engaged by a Person.
"RESTRICTED TERRITORY" shall mean the geographic area
consisting of the territory within a fifty (50) mile radius of each
Service Center operated by VTE or a Franchisee immediately prior to
the execution of this Agreement. The Parties further agree that the
"Restricted Territory" extends only to the area in which VTE is doing
business directly, or has licensed a Franchisee to do business, at the
time of this Agreement and is only as broad as necessary to protect
the interest of Premiere in the business of VTE.
"SALES TERRITORY" shall mean the geographic areas into
which a Protected Territory is divided under the relevant Franchise
Agreement.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents
filed, or required to be filed, by a Party or any of its Subsidiaries
with any Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act,
the Investment Company Act of 1940, as amended, the Investment
Advisors Act of 1940, as amended, the Trust Indenture Act of 1939, as
amended, and the rules and regulations of any Regulatory Authority
promulgated thereunder.
"SERVICE CENTER" shall mean a site owned or operated by a
VTE Entity or a Franchisee which houses one or more Centigram voice
mail servers used to store messages for retrieval by users within the
local service area of the Service Center, as well as one or more NIBs
and routers used to transmit voice message packet data to a Hub via
the T1 local loop.
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<PAGE>
"SRA" shall mean a service representative agreement
executed by VTE and a service representative relating to the provision
of services on behalf of VTE with respect to certain Franchises.
"STOCKHOLDERS' REPRESENTATIVE shall mean the Escrow
Committee established under the General Escrow Agreement and the
Specific Escrow Agreement
"STOCKHOLDERS' CLOSING DOCUMENTS" shall mean the General
Escrow Agreement, the Specific Escrow Agreement, the Employment
Agreements, the Releases, and the Noncompetition Agreements.
"STOCKHOLDERS' MEETING" shall mean the meeting of the
stockholders of VTE to be held pursuant to Section 8.1, including any
adjournment or adjournments thereof.
"SUB COMMON STOCK" shall mean the no par value common stock
of Sub.
"SUBSIDIARIES" shall mean all those corporations,
associations, or other business entities of which the entity in
question either (i) owns or controls 50% or more of the outstanding
equity securities either directly or through an unbroken chain of
entities as to each of which 50% or more of the outstanding equity
securities is owned directly or indirectly by its parent (provided,
there shall not be included any such entity the equity securities of
which are owned or controlled in a fiduciary capacity), (ii) in the
case of partnerships, serves as a general partner, (iii) in the case
of a limited liability company, serves as a managing member, or (iv)
otherwise has the ability to elect a majority of the directors,
trustees or managing members thereof.
"SURVIVING CORPORATION" shall mean VTE as the surviving
corporation resulting from the Merger.
"SUNTRUST" shall mean SunTrust Bank of Atlanta, as Exchange
Agent or as Escrow Agent under the General Escrow Agreement and the
Specific Escrow Agreement, as applicable.
"SYSTEM" as used in this section shall mean the entire
voice messaging system currently operated by VTE, VTN, VTNLP and the
Franchisees, including but not limited to the Network, all of the
Service Centers, and all connections between the Network and the
Service Centers.
"TAX RETURN" shall mean any report, return, information
return, or other information required to be supplied to a taxing
authority in connection with Taxes, including any return of an
affiliated or combined or unitary group that includes a Party or its
Subsidiaries.
"TAX" OR "TAXES" shall mean any federal, state, county,
local, or foreign taxes, however denominated, including income, gross
receipts, excise, employment, sales, use, transfer, license, payroll,
franchise, severance, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties,
capital stock, paid-up
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capital, profits, withholding, Social Security, single business and
unemployment, disability, real property, personal property,
registration, ad valorem, value added, alternative or add-on minimum,
estimated, or other tax or governmental fee of any kind whatsoever,
imposes or required to be withheld by the United States or any state,
county, local or foreign government or subdivision or agency thereof,
including any interest, penalties, and additions imposed thereon or
with respect thereto.
"THIRD PARTY CLAIM" shall mean any Litigation that is
initiated against an Indemnitee by a Person other than an Indemnitor
and which, if prosecuted, could result in a Loss for which the
Indemnitee is entitled to indemnification under Article 10.
"UNIFORM FRANCHISE OFFERING CIRCULAR GUIDELINES" shall mean
the written guidelines for the preparation of franchise offering
circulars as adopted by the North American Securities Administrator
Association on April 25, 1993.
"VTE COMMON STOCK" shall mean the no par value common stock
of VTE.
"VTE CONFIDENTIAL INFORMATION" means information, other
than VTE Trade Secrets, which relates to VTE, VTE's business, or VTE's
suppliers or customers that is not generally known by persons not
employed by VTE and which Stockholder has learned as a consequence of
his or her relationship to VTE. Such information includes, without
limitation, to the extent it is not considered a VTE Trade Secret,
financial information, strategic plans and forecasts, marketing plans
and forecasts, franchisee lists, customer lilts including NAP
customers, customer pricing and order data, supplier lists, or
technical information relating to the VTE's products or services. "VTE
Confidential Information" shall not include information which has
become generally available to the public by the act of one who has the
right to disclose such information without violating a legal right of
Premiere or VTE.
"VTE DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Voice-Tel Enterprises, Inc. Disclosure
Memorandum" delivered prior to the date of this Agreement to Premiere
describing in reasonable detail the matters contained therein and,
with respect to each disclosure made therein, specifically referencing
each Section of this Agreement under which such disclosure is being
made. Information disclosed with respect to one Section shall not be
deemed to be disclosed for purposes of any other Section not
specifically referenced with respect thereto.
"VTE ENTITIES" shall mean, collectively, VTE and all VTE
Subsidiaries.
"VTE FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of VTE
as of December 31, 1996, and 1995, and the related statements of
income, changes in stockholders' equity, and cash flows (including
related notes and schedules, if any) for each of the three fiscal
years ended December 31, 1996, 1995 and 1994, and (ii) the
consolidated balance sheets of VTE (including related notes and
schedules, if any) and related statements of income, changes in
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stockholders' equity, and cash flows (including related notes and
schedules, if any) with respect to periods ended subsequent to
December 31, 1996.
"VTE INTELLECTUAL PROPERTY RIGHT" shall mean any
Intellectual Property Right used by any VTE Entity in the course of
its business.
"VTE MATERIAL ADVERSE EFFECT" shall mean an event, change
or occurrence which, individually or together with another event,
change or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of VTE and its
Subsidiaries, taken as a whole, or (ii) the ability of VTE to perform
its obligations under this Agreement or to consummate the Merger or
the other transactions contemplated by this Agreement, provided that
"VTE Material Adverse Effect: shall not be deemed to include the
impact of (a) changes in Laws of general applicability or
interpretations thereof by courts or governmental authorities, (b)
changes in generally accepted accounting principles, (c) actions and
omissions of VTE (or any of its Subsidiaries) taken with the prior and
informed written Consent of Premiere in contemplation of the
transactions contemplated hereby, and (d) the direct effects of
compliance with this Agreement on the operating performance of VTE,
including expenses incurred by VTE in consummating the transactions
contemplated by this Agreement.
"VTE PRODUCTS AND SERVICES" shall mean the interactive
voice messaging services and related equipment provided by the VTE
Entities to customers in the course of their business operations.
"VTE STOCK PLAN" shall mean the existing stock option plan
of VTE designated as follows: 1991 Non-Qualified and Incentive Stock
Option Plan of Voice-Tel Enterprises, Inc.
"VTE SUBSIDIARIES" shall mean the Subsidiaries of VTE,
which shall include the VTE Subsidiaries described in Section 5.5 and
any corporation or other organization acquired as a Subsidiary of VTE
in the future and held as a Subsidiary by VTE at the Effective Time.
"VTE TRADE SECRETS" shall mean all secret, proprietary or
confidential information regarding VTE or its business, including any
and all information not generally known to, or ascertainable by,
persons not employed by VTE, the disclosure or knowledge of which
would permit those persons to derive actual or potential economic
value therefrom or to cause economic or financial harm to VTE. "VTE
Trade Secrets" shall not including information that has become
generally available to the public by the act of one who has the right
to disclose such information without violating a legal right of
Premiere or VTE.
"VTN" shall mean VTN, Inc., an Ohio corporation and the
sole general partner of VTNLP.
"VTNLP" shall mean Voice-Tel Network Limited Partnership, a
Delaware limited partnership.
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<PAGE>
"VTN MERGER" shall be the merger of PTEK Merger Corporation
II ("Sub II") with and into VTN pursuant to the VTN Merger Agreement.
"VTN MERGER AGREEMENT" shall mean the Agreement and Plan of
Merger of even date herewith among Premiere, Sub II and VTN.
"VTN PURCHASE PRICE" shall have the meaning set forth in
the VTN Merger Agreement.
(b) The terms set forth below shall have the meanings
ascribed thereto in the referenced sections:
<TABLE>
<S> <C>
Average Closing Price Section 3.1(c)
Closing Section 1.2
Per Share Purchase Price Section 3.1(c)
Takeover Laws Section 5.23
Average Closing Price Limitations Section 3.1(c)
Base Exchange Ratio Section 3.1(c)
Effective Time Section 1.3
Employment Agreements Section 9.1(k)
ERISA Affiliate Section 5.15(b)
Escrow Shares Section 10.4
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Firm Exchange Ratio Section 3.1(c)
General Escrow Section 10.4
General Escrow Agreement Section 4.3
General Escrow Exchange Ratio Section 3.1(c)
Merger Section 1.1
Noncompetition Agreements Section 9.2(k)
Premiere SEC Reports Section 6.5(a)
Specific Escrow Section 10.4
Specific Escrow Agreement Section 4.3
Specific Escrow Exchange Ratio Section 3.1(c)
Tax Opinion Section 9.1(h)
Voting Agreements Section 5.25
VTE Benefit Plans Section 5.15
VTE Contracts Section 5.16
VTE ERISA Plan Section 5.15
VTE Stock Options Section 3.6
VTE Pension Plan Section 5.15
</TABLE>
(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
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<PAGE>
12.2 EXPENSES.
--------
(a) Except as otherwise provided in this Section 12.2,
each of the Parties shall bear and pay all direct costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated hereunder,
including filing, registration and application fees, printing fees, and fees and
expenses of its own financial or other consultants, investment bankers,
accountants, and counsel.
(b) Nothing contained in this Section 12.2 shall
constitute or shall be deemed to constitute liquidated damages for the willful
breach by a Party of the terms of this Agreement or otherwise limit the rights
of the nonbreaching Party.
12.3 BROKERS AND FINDERS. Except for Salomon Brothers Inc.
--------------------
as to VTE and except for Robertson, Stephens & Company as to Premiere, each of
the Parties represents and warrants that neither it nor any of its officers,
directors, employees, or Affiliates has employed any broker or finder or
incurred any Liability for any financial advisory fees, investment bankers'
fees, brokerage fees, commissions, or finders' fees in connection with this
Agreement or the transactions contemplated hereby. In the event of a claim by
any broker or finder based upon his or its representing or being retained by or
allegedly representing or being retained by VTE or any Stockholder or by
Premiere, each of VTE and the Stockholders and Premiere, as the case may be,
agrees to indemnify and hold the other Party harmless of and from any Liability
in respect of any such claim.
12.4 ENTIRE AGREEMENT. Except as otherwise expressly provided
----------------
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral (except, as to Section
8.6(b), for the Confidentiality Agreement). Nothing in this Agreement expressed
or implied, is intended to confer upon any Person, other than the Parties or
their respective successors, any rights, remedies, obligations, or liabilities
under or by reason of this Agreement.
12.5 AMENDMENTS. To the extent permitted by Law, this Agreement
----------
may be amended by a subsequent writing signed by each of the Parties upon the
approval of each of the Parties, whether before or after stockholder approval of
this Agreement has been obtained; provided, that after any such approval by the
holders of VTE Common Stock, there shall be made no amendment that reduces or
modifies in any material respect the consideration to be received by holders of
VTE Common Stock, to the extent that Section 251(d) of the DGCL requires further
approval by such stockholders, without the further approval of such
stockholders.
12.6 WAIVERS.
-------
(a) Prior to or at the Effective Time, Premiere, acting
through its Board of Directors, chief executive officer or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by VTE or the Stockholders, to waive
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<PAGE>
or extend the time for the compliance or fulfillment by VTE or the Stockholders
of any and all of its obligations under this Agreement, and to waive any or all
of the conditions precedent to the obligations of Premiere under this Agreement,
except any condition which, if not satisfied, would result in the violation of
any Law. No such waiver shall be effective unless in writing signed by a duly
authorized officer of Premiere.
(b) Prior to or at the Effective Time, VTE, acting through
its Board of Directors, chief executive officer or other authorized officer,
shall have the right to waive any Default in the performance of any term of this
Agreement by Premiere, to waive or extend the time for the compliance or
fulfillment by Premiere of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of VTE
and the Stockholders under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of VTE.
(c) The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner affect the right
of such Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
12.7 ASSIGNMENT. Except as expressly contemplated hereby,
----------
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.
12.8 Notices. All notices or other communications which are
-------
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
shall be deemed to have been delivered as of the date so delivered:
VTE or
any Stockholder
(other than Amway): Voice-Tel Enterprises, Inc.
Four Commer Park Sq., No 800
23200 Chagrin Boulevard
Cleveland, Ohio 44122
Telecopy Number: (216} 360-4410
Attention: Alan J. Carter, Chairman
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<PAGE>
Copy to Counsel: Benesch, Friedlander, Coplan & Aronoff
2300 BP America Building
200 Public Square
Cleveland, Ohio 44114
Telecopy Number: (216 363-4588
Attention: Michael Wager, Esq.
Amway: Amway Corporation
7575 Fulton Street Exit
Ada, Michigan 49335-0001
Attention: Tom Edwards
Copy to Counsel: Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Thomas C. Daniels, Esq.
Premiere: Premiere Technologies, Inc.
The Lenox Building, Suite 400
3399 Peachtree Road, NE
Atlanta, Georgia 30326
Telecopy Number: (404) 262-8450
Attention: Boland T. Jones, President
Copy to Counsel: Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309
Telecopy Number: (404) 881-7777
Attention: Jeffrey A. Allred, Esq.
12.9 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the Laws of the State of Georgia, without regard to
any applicable conflicts of Laws.
12.10 COUNTERPARTS. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
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12.11 CAPTIONS; ARTICLES AND SECTIONS. The captions contained in
-------------------------------
this Agreement are for reference purposes only and are not part of this
Agreement. Unless otherwise indicated, all references to particular Articles or
Sections shall mean and refer to the referenced Articles and Sections of this
Agreement.
12.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty
---------------
or ambiguity herein shall be construed or resolved against any party, whether
under any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. The parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of all parties
hereto.
12.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
------------------------
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
12.14 SEVERABILITY. Any term or provision of this Agreement which
------------
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
12.15 SURVIVAL. All representations, warranties and agreements
--------
contained in this Agreement or in any certificate delivered pursuant to this
Agreement shall survive the Closing notwithstanding any investigation conducted
with respect thereto or any knowledge acquired as to the accuracy or inaccuracy
of any such representation or warranty.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement
to be executed on its behalf by its duly authorized officers as of the day and
year first above written.
PREMIERE TECHNOLOGIES, INC.
By: /s/ Patrick G. Jones
--------------------------------
Senior Vice President
PTEK MERGER CORPORATION
By: /s/ Patrick G. Jones
--------------------------------
Senior Vice President
VOICE-TEL ENTERPRISES, INC.
By: /s/ Alan J. Carter
--------------------------------
Chairman
By: /s/ Martin J. Huebschman
--------------------------------
President
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
THE STOCKHOLDERS:
AMWAY CORPORATION,
a Michigan corporation
By: /s/ Tom Edwards
-------------------------------------
Title: Vice President-Corporate
Marketing
VOICE-TEL OF OHIO,
an Ohio general partnership
By: Carter Voice, Inc.
an Ohio corporation, general
partner
By: /s/ Warren E. Carter II
-------------------------------------
Title: President
By: Widdoes Enterprises, Inc.
an Ohio corporation, general
partner
By: /s/ Thomas G. Widdoes
-------------------------------------
Title: President
VIRGINIA VOICE, INC.
a Virginia corporation,
By: /s/ Alan J. Carter
-------------------------------------
Title: President
/s/ Charles M. Feuer (SEAL)
---------------------------------------
Charles M. Feuer
/s/ Martin J. Huebschman (SEAL)
---------------------------------------
Martin J. Huebschman
/s/ William H. Stephens (SEAL)
---------------------------------------
William H. Stephens
<PAGE>
EXHIBIT 1
GENERAL ESCROW AGREEMENT
This GENERAL ESCROW AGREEMENT (the "General Escrow Agreement"), dated as of
April __, 1997, is made and entered into by and among Premiere Technologies,
Inc., a Georgia corporation ("Premiere"); Voice-Tel Enterprises, Inc., a
Delaware corporation ("VTE"); VTN, Inc., an Ohio corporation ("VTN"); and the
holders of all classes of common stock of VTE and VTN executing this Agreement
(the "Stockholders" and, individually, a "Stockholder"), __________________,
__________________, and ______________, as attorneys-in-fact, representatives
and agents (collectively, the "Escrow Committee") of each of the Stockholders;
and [SunTrust Bank of Atlanta, a Georgia bank] (the "Escrow Agent").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Acquisition Agreements (as defined below).
RECITALS
--------
A. Premiere, VTE, the stockholders of VTE and PTEK Merger Corporation, a
wholly owned subsidiary of Premiere ("Sub"), are parties to an Agreement and
Plan of Merger dated as of March __, 1997 (the "VTE Agreement"), pursuant to
which Sub will merge with and into VTE (the "VTE Merger"), with Sub surviving
the VTE Merger and continuing the business operations of VTE as a wholly owned
subsidiary of Premiere. Pursuant to Section 3.1(c)(ii) of the VTE Agreement,
the stockholders of VTE (other than any VTE Entity, any Premiere Entity and
stockholders who perfect their statutory dissenters' rights) will, by virtue of
the VTE Merger, receive, in exchange for each share of VTE Common Stock,
________ shares of Premiere Common Stock , or an aggregate of _______ shares of
Premiere Common Stock. Pursuant to the terms of Section 4.3 of the VTE
Agreement, shares of Premiere Common Stock to be issued pursuant to Section
3.1(c)(ii) of the VTE Agreement will be held and disbursed by the Escrow Agent
in accordance with the terms and conditions hereof.
B. Premiere, VTN, the stockholders of VTN and Sub are parties to an
Agreement and Plan of Merger dated as of March __, 1997 (the "VTN Agreement" and
collectively with the VTE Agreement, the "Acquisition Agreements"), pursuant to
which Sub will merge with and into VTN (the "VTN Merger"), with Sub surviving
the VTN Merger and continuing the business operations of VTN as a wholly owned
subsidiary of Premiere. Pursuant to Section 3.1(c)(ii) of the VTN Agreement,
the stockholders of VTN (other than any VTN Entity, any Premiere Entity and
stockholders who perfect their statutory dissenters' rights) will, by virtue of
the VTN Merger, receive, in exchange for each share of VTE Common Stock,
________ shares of Premiere Common Stock, or an aggregate of _______ shares of
Premiere Common Stock. Pursuant to the terms of Section 4.3 of the VTN
Agreement, shares of Premiere Common Stock to be issued pursuant to Section
3.1(c)(ii) of the VTN Agreement will be held and disbursed by the Escrow Agent
in accordance with the terms and conditions hereof.
C. Former holders of VTE Common Stock and former holders of VTN Common
Stock will be jointly and severally liable for Losses (as defined below), and
any such liability will be satisfied solely from the Escrow Shares (as defined
below).
<PAGE>
D. The Escrow Committee has been constituted as agent for and on behalf
of the Stockholders, to undertake certain obligations herein.
E. The parties hereto desire to set forth the terms and conditions
relating to the Escrow Shares (the "Escrow").
F. Pursuant to Section 3.1(c)(iii) of the Acquisition Agreements,
additional shares of Premiere Common Stock to be issued pursuant to the
Acquisition Agreements have contemporaneously herewith been deposited with the
Escrow Agent pursuant to the Specific Escrow Agreement (as defined in the
Acquisition Agreements) (the "Specific Escrow").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in the Acquisition Agreements, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
AGREEMENT
---------
1. Establishment of Escrow. Pursuant to the Acquisition Agreements, on
-----------------------
the Closing Date Premiere shall deposit in escrow with the Escrow Agent on
behalf of the Stockholders a single stock certificate representing ________
shares of Premiere Common Stock, equal to ten percent (10%) of the shares
otherwise allocable to the Stockholders pursuant to the VTE Agreement and the
VTN Agreement (the "Escrow Shares"), which shall be registered in the name of
the Escrow Agent as nominee for the beneficial owners of such shares. The
Escrow Agent shall deliver a receipt therefor to the Escrow Committee. The
parties hereto agree and acknowledge that the Stockholders are the beneficial
owners of the Escrow Shares and that the aforementioned stock certificate is
registered in the name of the Escrow Agent only as a matter of administrative
convenience. The Escrow Shares shall be held and distributed by the Escrow
Agent in accordance with the terms and conditions of this General Escrow
Agreement. A list showing the pro rata interest of the Stockholders in the
Escrow Shares is set forth in Exhibit A attached hereto.
---------
2. Escrow Period. The Escrow shall commence on the Closing Date and,
-------------
subject to the provisions of Section 5(c), shall terminate on the date that is
the earlier of (i) one year from the date of the Effective Time or (ii) the date
of issuance of the first independent auditors' report on the consolidated
financial statements of Premiere which reflect at least thirty (30) days of
post-merger combined results of Premiere, VTE and VTN subsequent to the
Effective Time (the "Escrow Period").
3. Application of Escrow Shares to Claims.
--------------------------------------
(a) If Premiere shall have suffered any Losses for which it is
entitled to indemnification from the Stockholders, VTE or VTN pursuant to
Sections 10.1(a), 10.1(b), 10.1(c), 10.1(d), 10.1(e), 10.1(f) or 10.1(g) of any
of the Acquisition Agreements ("Losses"), it shall promptly give written notice
of the Indemnification Claim to the Escrow Committee in accordance with Section
10.2 of the appropriate Acquisition Agreement, with a duplicate copy delivered
to the Escrow Agent. If the Indemnification Claim involves a Third Party Claim,
the procedures set forth in Section 10.3 of the appropriate Acquisition
Agreement shall be observed by Premiere and the Escrow Committee. If the
Indemnification Claim involves a matter other than a Third Party Claim and no
objection is made by the Escrow Committee pursuant to Section 3(b)
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<PAGE>
below, the Escrow Agent shall deliver out of the Escrow to Premiere within ten
(10) calendar days after the expiration of the thirty (30) calendar day notice
period set forth in Section 3(b) below a number of Escrow Shares (rounded up to
the nearest whole number) equal to the amount of the Losses set forth in such
notice of claim divided by the Average Closing Price (as such term is defined in
the Acquisition Agreements; provided that such Average Closing Price shall be
appropriately adjusted upon the occurrence of any of the events described in
Section 6 of this Agreement).. Notwithstanding anything to the contrary in this
Escrow Agreement, (i) the Escrow Agent shall not make any payment to Premiere
from the Escrow until claims by Premiere for Losses under this General Escrow
Agreement and the Specific Escrow Agreement that are due and payable exceed
$50,000, in which event the Escrow Agent shall satisfy all such claims from the
Escrow without regard to such limitation, and (ii) the Escrow Agent shall not
make any payment to Premiere from the Escrow for a claim under Section 10.1(e)
of the Acquistion Agreements until all amounts available for satisfaction of
such a claim under the Specific Escrow have been used to satisfy the claim.
(b) If the Escrow Committee objects to the validity of any claim for
Losses it shall give written notice to Premiere within thirty (30) calendar days
following receipt of notice of such claim, with a duplicate copy to the Escrow
Agent, that it does not consent to the delivery of any of the Escrow Shares out
of Escrow to Premiere for application to such claim. In such case, the Escrow
Agent shall continue to hold the Escrow Shares in Escrow until the rights of
Premiere and the Stockholders with respect thereto have been agreed upon among
the Escrow Committee and Premiere or until such rights are finally determined in
accordance with Section 3(c) below. The Escrow Agent may rely on (1) any
memorandum of Premiere and the Escrow Committee or (ii) any determination by any
arbitration panel as provided in Section 3(c) below. In any such resolution to
determine the number of Escrow Shares to be delivered out of Escrow, the Escrow
Agent shall, as soon as practicable following receipt of a copy of such
determination, deliver Escrow Shares from the Escrow in accordance with the
terms thereof.
(c) In case the Escrow Committee shall so object in writing to any
claim or claims by Premiere, Premiere and the Escrow Committee shall attempt for
thirty (30) calendar days to agree upon the rights of the respective parties
with respect to such claim. If the Escrow Committee and Premiere should so
agree, a memorandum setting forth such agreement shall be prepared and signed by
the Escrow Committee and a duly authorized representative of Premiere and shall
be furnished to the Escrow Agent. The Escrow Agent shall be entitled to rely on
any such memorandum signed by such parties and shall distribute Escrow Shares
from the Escrow in accordance with the terms thereof. If no such agreement can
be reached within such thirty (30) day period, either Premiere or a majority of
the Escrow Committee may, by written notice to the other, demand arbitration of
the matter unless the amount of the Losses is at issue in pending litigation
with a third party, in which event arbitration shall not be commenced until such
amount is ascertained or both parties agree to arbitration; and in either such
event the matter shall be settled by arbitration conducted by a single
arbitrator experienced in the matters at issue and selected by the Escrow
Committee and Premiere in accordance with the Commercial Arbitration Rules of
the American Arbitration Association. The arbitration shall be held in such
place in Atlanta, Georgia as may be specified by the arbitrator (or any place
agreed to by the Escrow Committee, Premiere and the arbitrator). The decision
of the arbitrator shall be final and binding as to any matters submitted under
this Section 3(c); provided, however, if necessary, such decision and
satisfaction procedure may be enforced by either the Escrow Committee or
Premiere in any court of record having jurisdiction over the subject matter or
over any of the parties to this Agreement. All costs and expenses incurred in
connection with any such arbitration proceeding (including reasonable
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<PAGE>
attorneys' fees) shall be borne by the party against which the decision is
rendered, or, if no decision is rendered, such costs and expenses shall be borne
equally by the Stockholders as one party and Premiere as the other party. If the
arbitrator's decision is a compromise, the determination of which party or
parties bear the costs and expenses incurred in connection with any such
arbitration proceeding shall be made by the arbitrator on the basis of the
arbitrator's assessment of the relative merits of the parties' positions.
4. Escrow Committee.
----------------
(a) Upon consummation of the transactions contemplated by the
Acquisition Agreements and in consideration of the issuance of the Escrow
Shares, each Stockholder shall be deemed to have irrevocably appointed the
Escrow Committee as his or its attorneys-in-fact to give and receive notices and
communications, to authorize delivery to Premiere of Escrow Shares from the
Escrow in satisfaction of claims by Premiere, to object to such deliveries, to
negotiate, enter into settlements and compromises of, and demand arbitration and
comply with orders of courts and awards of arbitrators with respect to such
claim, and to take all actions necessary or appropriate in the judgment of the
Escrow Committee for the accomplishment of the foregoing. No further
documentation shall be required to evidence such appointment, and such power of
attorney shall be coupled with an interest, thereby confirming such appointment
as irrevocable. Notices or communications to or from the Escrow Committee shall
constitute notice to or from each Stockholder. A decision, act, consent or
instruction of the Escrow Committee shall constitute a decision of all
Stockholders for whom shares of Premiere Common Stock otherwise issuable to them
are deposited in the Escrow and shall be final, binding and conclusive upon each
such Stockholder, and the Escrow Agent and Premiere may rely upon any "properly
authorized" decision, act, consent or instruction of the Escrow Committee as
being the decision, act, consent or instruction of each and every such
Stockholder. The Escrow Agent and Premiere are hereby relieved from any
liability to any person for any acts done by them in accordance with such
properly authorized decision, act, consent or instruction of the Escrow
Committee. The Escrow Committee shall be empowered to act by majority vote with
respect to all matters arising under this Escrow Agreement during the term of
this Escrow Agreement, and for the purposes of this Agreement, a "properly
authorized" decision, act, consent or instruction of the Escrow Committee is one
that is approved by at least a majority of the members of the Escrow Committee.
No bond shall be required of the Escrow Committee, and members of the Escrow
Committee shall receive no compensation for their services.
(b) Neither the Escrow Committee nor any member thereof shall be
liable to anyone whatsoever by reason of any error of judgment or for any act
done or step taken or omitted by them in good faith or for any mistake of fact
or law for anything which he may do or refrain from doing in connection herewith
unless caused by or arising out of his own gross negligence or willful
misconduct, and any act done or omitted pursuant to the advice of counsel shall
be conclusive evidence of such good faith. The Stockholders shall indemnify and
hold the Escrow Committee and each member thereof harmless from any and all
liability and expense (including, without limitation, attorneys' fees) which may
arise out of any action taken or omitted by them or any one of them as an Escrow
Committee member in accordance with this Escrow Agreement including, without
limitation, any claims, demands, suits, investigations, proceedings or actions
by a third party, as the same may be amended, modified or supplemented, except
such liability and expense as may result from the gross negligence or willful
misconduct of the Escrow Committee.
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<PAGE>
(c) The Escrow Committee may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed to be genuine
and to have been signed or presented by the proper party or parties.
(d) Except as provided herein, the Escrow Committee is hereby
authorized and directed to disregard any and all notices and warnings that may
be given by any person, corporation or entity except the final order, judgment
or decree of any court or arbitration panel made, filed, entered or issued,
whether with or without jurisdiction, from which no further appeal may be taken
and the Escrow Committee is hereby authorized to comply with and obey any and
all such final orders, judgments and decrees of any court or arbitration panel
made, filed, entered or issued, whether with or without jurisdiction.
(e) If any member of the Escrow Committee shall die, become disabled
or otherwise be unable to fulfill its responsibilities hereunder, the remaining
member or members of the Escrow Committee shall select a replacement member or
members from among the Stockholders.
(f) The Escrow Committee shall have reasonable access to information
about Premiere, VTE, VTN and VTNLP and reasonable assistance of their officers,
directors, partners and employees for purpose of performing its duties and
exercising its rights hereunder, provided that the Escrow Committee shall treat
confidentially and not disclose any nonpublic information from or about
Premiere, VTE and VTN to anyone (except on a need-to-know basis to individuals
who agree to treat such information confidentially).
(g) The Escrow Committee shall be deemed to be the "Stockholder
Representative" under each of the Acquisition Agreements.
5. The Escrow Agent. The reasonable fees and expenses of the Escrow Agent
----------------
in connection with its execution and performance of this Escrow Agreement as set
forth on Exhibit B hereto shall be borne by Premiere and the Stockholders
---------
equally. The Escrow Agent shall be entitled to such rights and shall perform
such duties of the Escrow Agent as set forth herein, including but not limited
to the following (collectively, the "Duties"):
(a) The Escrow Agent shall hold and safeguard the Escrow during the
Escrow Period, shall treat such Escrow as an escrow fund in accordance with the
terms of this Escrow Agreement and not as the property of Premiere, and shall
hold and dispose of the Escrow only in accordance with the terms of this Escrow
Agreement.
(b) The Escrow Agent shall distribute to the Stockholders all
material relating to a vote of holders of Premiere Common Stock that the Escrow
Agent receives from the Premiere or any third party, and the Stockholders shall,
in such Stockholder's sole discretion, vote such shares and execute such
documents as may be necessary to permit such shares to be voted by the
Stockholders in accordance with their respective beneficial interests. The
Escrow Agent shall have no right to vote the Escrow Shares, except to the extent
so directed to do so by the beneficial owner of the respective shares.
(c) Promptly following termination of the Escrow Period as set forth
in Section 2 hereof, the Escrow Agent shall deliver to SunTrust Bank, Atlanta,
Trust Company Tower, 25 Park Place, Atlanta, Georgia 30303 Attn: Letitia
Ratford, the transfer agent of the
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<PAGE>
Premiere Common Stock (the "Transfer Agent"), the certificate representing the
Escrow Shares with instructions for the Transfer Agent to issue to each
Stockholder a new certificate, subject to Section 5(d) hereof, in the name of
each Stockholder representing each Stockholder's pro rata portion of the Escrow
Shares at the time of such distribution based on Exhibit A to this Escrow
---------
Agreement, provided, however, that in the event that there are claims by
Premiere for Losses outstanding at the time of the termination of the Escrow
Period, the Escrow Agent shall retain an amount of such Escrow Shares sufficient
in the reasonable judgment of Premiere, subject to the objection of the Escrow
Committee and subsequent resolution of the matter in the manner provided in
Section 3 above, to satisfy any unsatisfied claims for Losses specified in any
notice by Premiere theretofore delivered to the Escrow Committee and Escrow
Agent prior to termination of the Escrow Period with respect to facts and
circumstances existing prior to expiration of the Escrow Period, and to pay
expenses as provided in this Escrow Agreement. As soon as all such claims have
been fully resolved, the Escrow Agent shall deliver to the Stockholders any and
all of the Escrow Shares and other property remaining in the Escrow and not
required to satisfy such claims and expenses. Each Stockholder shall receive
that number of Escrow Shares which bears the same relationship to the total
number of Escrow Shares in the Escrow and available for distribution as the
number of Escrow Shares set forth opposite the name of each such Stockholder on
Exhibit A hereto bears to the total number of Escrow Shares on Exhibit A as
- - --------- ---------
calculated by the Escrow Agent.
(d) The Stockholders shall have no right to receive, and the Escrow
Agent shall not distribute to the Stockholders, fractional Escrow Shares. In
the event that the distribution of any Stockholder's pro rata share of the
Escrow Shares would, but for this Section 5(d), result in such Stockholder
receiving fractional shares of Premiere Common Stock, (i) the Escrow Agent shall
instruct the Transfer Agent to issue a certificate in such Stockholder's name
for his or pro rata share of Escrow Shares rounded down to the nearest whole
share, (ii) the Escrow Agent shall instruct the Transfer Agent to issue an
additional certificate representing, in the aggregate, all fractional share
interests at the time of such distribution and the Escrow Agent shall thereupon
deliver such certificate to Premiere, (iii) Premiere shall deliver to the Escrow
Agent an amount of cash representing, the aggregate market value (based on the
closing sale price of Premiere Common Stock on the day of the termination of the
Escrow Period or, if such day is not a business day, the business day immediate
preceding such date, as reported in the Wall Street Journal) of such fractional
share interests as of the time of such distribution, and (iv) the Escrow Agent
shall deliver to each applicable Stockholder cash or a check representing such
Stockholder's fractional share interest. Premiere agrees to cause all necessary
Form 1099 information reports to be filed and hereby indemnifies the Escrow
Agent against all costs resulting from the failure to file such reports.
6. Replacement of Escrow Shares. Premiere shall promptly notify the
----------------------------
Escrow Agent of any fundamental corporate change that will result in the
elimination of the Premiere Common Stock.
(a) Distribution. Any cash dividends, dividends payable in securities
------------
or other distributions of any kind (but excluding any shares of Premiere Common
Stock received upon a stock split or stock dividend accounted for as a stock
split) shall be distributed promptly by the Escrow Agent to the beneficial
holder of the Escrow Shares to which such distribution relates. Any shares of
Premiere Common Stock received by the Escrow Agent upon a stock split or stock
dividend accounted for as a stock split made in respect of any securities in the
Escrow shall be added to the Escrow and become a part thereof. Any provision
hereof or in the Acquisition Agreements concerning the distribution of Premiere
Common Stock shall be adjusted to
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<PAGE>
appropriately reflect any stock split or reverse stock split or stock dividend
accounted for as a stock split.
(b) All Cash or All Stock Merger or Consolidation or Share Exchange.
---------------------------------------------------------------
If, prior to the distribution of all Escrow Shares from the Escrow, the Escrow
Agent receives notice from Premiere that Premiere intends to merge, consolidate
or engage in a share exchange with another corporation which is not an affiliate
of Premiere in a merger or consolidation involving a payment to stockholders of
Premiere (including the Stockholders) of an amount payable either entirely in
cash or entirely in capital stock of the surviving corporation or the parent of
the surviving corporation (the surviving corporation being an entity other than
Premiere) or an exchange of shares, and the Premiere Common Stock will no longer
be outstanding following the effective time of such merger or consolidation
(because Premiere is not the surviving corporation) or the Premiere Common Stock
is owned by the acquiring corporation as a result of such share exchange, as the
case may be, then the Escrow Agent shall treat the amounts received by it (as
the recordholder of the Escrow Shares) as follows:
(i) If the consideration received is cash, the Escrow Agent
shall retain in escrow and invest in investments as directed by the Escrow
Committee the cash received pursuant to transaction described in subparagraph
(b) of this Section 6; or
(ii) If the consideration received is capital stock of the
surviving company, the shares of capital stock received pursuant to the
transactions described in subparagraph (b) of this Section 6 will be retained in
escrow.
(c) Other Transactions. In the event there occurs at any time or from
------------------
time to time prior to the distribution of all shares of Premiere Common Stock
from the Escrow any fundamental corporate change that affects the outstanding
shares of Premiere Common Stock, other than the transaction described in
subparagraph (b) above (including, without limitation, a merger or consolidation
involving a payment to Stockholders of a combination of cash and capital stock
of the surviving corporation), then the Escrow Agent shall hold the amounts
received by it (as the record holder of the Escrow Shares) until it receives
written direction from the Escrow Committee and Premiere (or its successors) as
to the appropriate disposition of such amounts so received. In addition, for
purposes of this Escrow Agreement, in the event of a fundamental corporate
change resulting in the elimination of the Premiere Common Stock, defined terms
relating to or derived from the Premiere Common Stock shall relate to or derive
from the security or other assets replacing such Premiere Common Stock.
7. Ownership of Escrow Shares. The Stockholders shall have all indicia of
--------------------------
ownership of the Escrow Shares while they are held in Escrow, including the
right to vote the Escrow Shares, the right to receive dividends (subject to the
limitations set forth in Section 6) and the obligation to pay all taxes,
assessments, and charges with respect thereto, but excluding the right to sell,
transfer, pledge or hypothecate or otherwise dispose of any Escrow Shares.
Except as contemplated hereunder, no Escrow Shares or any beneficial interest
therein may be pledged, sold, assigned or transferred, including by operation of
law, other than by will or by the laws of descent or distribution in the event
of the death of a Stockholder, by a Stockholder or be taken or reached by any
legal or equitable process in satisfaction of any debt or other liability of
such Stockholder, prior to the delivery to the Stockholder of the Escrow Shares
by the Escrow Agent.
8. Exculpatory Provisions of Escrow Agent.
--------------------------------------
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<PAGE>
(a) The Escrow Agent shall be obligated only for the performance of
such Duties as are specifically set forth herein and may rely and shall be
protected in relying or refraining from acting on any instrument reasonably
believed to be genuine and to have been signed or presented by the proper party
or parties. The Escrow Agent shall not be liable for other parties' forgeries
or fraudulent acts. The Escrow Agent shall not be liable for any act done or
omitted hereunder as escrow agent except for breach of this Escrow Agreement,
gross negligence or misconduct. The Escrow Agent shall, in no case or event be
liable for any representations or warranties of VTN or VTE or the Stockholders.
Any act done or omitted pursuant to the advice or opinion of counsel shall be
conclusive evidence of the good faith of the Escrow Agent.
(b) The Escrow Agent is hereby authorized and directed to disregard
any and all notices and warnings that may be given by any person, firm or
corporation except the final order, judgment or decree of any court or
arbitration panel made, filed, entered or issued, whether with or without
jurisdiction, from which no further appeal may be taken and the Escrow Agent is
hereby authorized to comply with and obey any and all such final orders,
judgments and decrees of any court or arbitration panel made, filed, entered or
issued, whether with or without jurisdiction. If the Escrow Agent shall comply
with or obey any such order, judgment or decree of any court, the Escrow Agent
shall not be liable to any of the parties hereto, or to any other person, firm
association or corporation, by reason of any such compliance or obedience even
if any such order, judgment or decree may be subsequently revised, modified,
annulled, set aside or vacated.
(c) The Escrow Agent shall not be liable for the outlawing of any
rights under any statute of limitations with respect to the Acquisition
Agreements or any documents deposited with the Escrow Agent.
9. Resignation and Removal of the Escrow Agent. The Escrow Agent may
-------------------------------------------
resign as Escrow Agent at any time with or without cause by giving at least
thirty (30) calendar days' prior written notice to each of Premiere and the
Escrow Committee, such resignation to be effective thirty calendar (30) days
following the date such notice is given. In addition, Premiere and the Escrow
Committee may jointly remove the Escrow Agent as escrow agent at any time with
or without cause, by an instrument (which may be executed in counterparts) given
to the Escrow Agent, which instrument shall designate the effective date of such
removal. In the event of any such resignation or removal a successor escrow
agent shall be appointed by the Escrow Committee and Premiere. Any such
successor escrow agent shall deliver to Premiere and the Escrow Committee a
written instrument accepting such appointment and thereupon it shall succeed to
all the rights and duties of the escrow agent hereunder and shall be entitled to
receive the assets in the Escrow.
10. Further Instruments. If the Escrow Agent reasonably requires other or
-------------------
further instruments in connection with performance of the Duties, the necessary
parties hereto agree to furnish such instruments.
11. Disputes. It is understood and agreed that should any dispute arise
--------
with respect to the delivery and/or ownership or right of possession of the
securities or funds held by the Escrow Agent hereunder, the Escrow Agent is
authorized and directed to act in accordance with and in reliance upon, the
terms hereof. The Escrow Agent may hold all documents and funds and may wait
for settlement of any dispute by final appropriate proceedings. Furthermore,
the Escrow Agent may in its reasonable judgment, file an action of interpleader
requiring the parties hereto to
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<PAGE>
answer and litigate any claims and right among themselves, in which case, the
Escrow Agent is authorized to deposit with the clerk of the court all documents,
securities and funds held in Escrow, except that the Escrow Agent may withhold
all reasonable costs, reasonable expenses, reasonable charges and reasonable
attorney fees incurred by the Escrow Agent due to the interpleader action. Upon
initiating such interpleader action, tile Escrow Agent shall be fully released
and discharged of and from all obligations of this Escrow Agreement.
12. Indemnification. Through the Escrow or otherwise, in consideration of
---------------
the Escrow Agent's acceptance of this appointment, the other parties hereto,
jointly and severally, agree to indemnify and hold the Escrow Agent harmless as
to any liability incurred by it to any person, firm or corporation by reason of
its having accepted such appointment or in carrying out the terms hereof and the
Acquisition Agreements, and to reimburse the Escrow Agent for all its reasonable
costs and expenses, including, among other things, attorneys' fees and expenses,
incurred by reason of any matter as to which an Indemnity is paid; provided,
--------
however, that no indemnity need be paid in case of the Escrow Agent's gross
- - -------
negligence, willful misconduct or breach of this Escrow Agreement.
13. Notices. Any notice or other communication required or permitted
-------
hereunder shall be in writing, and shall be given by registered mail, postage
prepaid, personal delivery, telecopier (confirmed by mail as aforesaid) or
courier service such as Federal Express addressed as follows:
If to Premiere, to:
Premiere Technologies, Inc.
The Lenox Building, Suite 400
3399 Peachtree Road, NE
Atlanta, Georgia 30326
Attn: Boland T. Jones, President
with a copy to:
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309
Attn: Jeffrey A. Allred, Esq.
If to VTE or VTN, to:
Voice-Tel
Enterprises, Inc.
Four Commerce Square, Suite 800
23200 Chagrin Boulevard
Cleveland, Ohio 44122
Attn: Martin J. Huebschman, President
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<PAGE>
With a copy to:
Benesch, Friedlander, Coplan & Aronoff
2300 BP America Building
Cleveland, Ohio 44144
Attn: Michael Wager, Esq.
If to the Escrow Committee, to:
______________________________
______________________________
______________________________
Attn: ________________________
With a copy to:
______________________________
______________________________
______________________________
Attn: _________________
If to Escrow Agent to:
[SunTrust Bank]
___________________
___________________
___________________
Attn: ______________
Each of the parties hereto shall be entitled to specify a different address by
giving notice as aforesaid. Such notices and communications shall be deemed
effective (i) three (3) business days after being sent, if sent by registered
mail (postage prepaid) from one location in the United States to another
location therein, (ii) on the date delivered, if delivered personally or
transmitted by confirmed facsimile or (iii) one (1) business day after being
sent if sent by overnight courier service.
14. Headings. Section headings are not to be considered part of this
--------
Escrow Agreement, are included solely for convenience and reference and are not
intended to be full or accurate descriptions of the contents of Sections to
which they relate.
15. Governing Law. The validity, construction and interpretation of this
-------------
Escrow Agreement shall be governed by the laws of the State of Georgia
applicable to contracts made in and to be performed wholly within that state.
16. Counterparts. This Escrow Agreement may be executed simultaneously in
------------
two or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
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<PAGE>
17. Amendments. This Escrow Agreement may only be amended by an
----------
instrument in writing signed by each of the parties hereto.
18. Business Day. For purposes of this Escrow Agreement a "business day"
------------
is a day on which the Escrow Agent is open for business and shall not include a
Saturday, Sunday, or legal holiday. Notwithstanding anything to the contrary in
this Escrow Agreement no action shall be required of the Escrow Agent, Premiere,
or any party receiving notice pursuant to the terms of this Escrow Agreement
except on a business day and in the event an action is required on a day which
is not a business day, such action shall be required to be performed on the next
succeeding day which is a business day.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.,
a Georgia corporation
By:__________________________________
Name:_____________________________
Title:____________________________
VTE:
VOICE-TEL ENTERPRISES, INC., a
Delaware corporation
By:__________________________________
Name:_____________________________
Title:____________________________
VTN:
VTN, Inc., an Ohio corporation
By:__________________________________
Name:_____________________________
Title:____________________________
STOCKHOLDERS
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<PAGE>
EXHIBIT A
PRO RATA INTERESTS OF STOCKHOLDERS
Name # of Escrow Shares Pro Rata Interest
- - ------ ------------------
<PAGE>
EXHIBIT 2
SPECIFIC ESCROW AGREEMENT
This SPECIFIC ESCROW AGREEMENT (the "Specific Escrow Agreement"), dated as
of April __, 1997, is made and entered into by and among Premiere Technologies,
Inc., a Georgia corporation ("Premiere"); Voice-Tel Enterprises, Inc., a
Delaware corporation ("VTE"); VTN, Inc., an Ohio corporation ("VTN"); and the
holders of all classes of common stock of VTE and VTN executing this Agreement
(the "Stockholders" and, individually, a "Stockholder"), __________________,
__________________, and ______________, as attorneys-in-fact, representatives
and agents (collectively, the "Escrow Committee") of each of the Stockholders;
and [SunTrust Bank of Atlanta, a Georgia bank] (the "Escrow Agent").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Acquisition Agreements (as defined below).
RECITALS
--------
A. Premiere, VTE, the stockholders of VTE and PTEK Merger Corporation, a
wholly owned subsidiary of Premiere ("Sub"), are parties to an Agreement and
Plan of Merger dated as of March __, 1997 (the "VTE Agreement"), pursuant to
which Sub will merge with and into VTE (the "VTE Merger"), with VTE surviving
the VTE Merger and continuing the business operations of VTE as a wholly owned
subsidiary of Premiere. Pursuant to Section 3.1(c)(iii) of the VTE Agreement,
the stockholders of VTE (other than any VTE Entity, any Premiere Entity and
stockholders who perfect their statutory dissenters' rights) will, by virtue of
the VTE Merger, receive, in exchange for each share of VTE Common Stock,
________ shares of Premiere Common Stock, or an aggregate of ________ shares of
Premiere Common Stock. Pursuant to the terms of Section 4.3 of the VTE
Agreement, shares of Premiere Common Stock to be issued pursuant to Section
3.1(c)(iii) of the VTE Agreement will be held and disbursed by the Escrow Agent
in accordance with the terms and conditions hereof.
B. Premiere, VTN, the stockholders of VTN and Sub are parties to an
Agreement and Plan of Merger dated as of March __, 1997 (the "VTN Agreement" and
collectively with the VTE Agreement, the "Acquisition Agreements"), pursuant to
which Sub will merge with and into VTN (the "VTN Merger"), with VTE surviving
the VTN Merger and continuing the business operations of VTN as a wholly owned
subsidiary of Premiere. Pursuant to Section 3.1(c)(iii) of the VTN Agreement,
the stockholders of VTN (other than any VTN Entity, any Premiere Entity and
stockholders who perfect their statutory dissenters' rights) will, by virtue of
the VTN Merger, each receive, in exchange for each share of VTN Common Stock,
________ shares of Premiere Common Stock, or an aggregate of ________ shares of
Premiere Common Stock. Pursuant to the terms of Section 4.3 of the VTN
Agreement, shares of Premiere Common Stock to be issued pursuant to Section
3.1(c)(iii) of the VTN Agreement will be held and disbursed by the Escrow Agent
in accordance with the terms and conditions hereof.
C. Former holders of VTE Common Stock and former holders of VTN Common
Stock will be jointly and severally liable for Losses (as defined below), and
any such liability will be satisfied solely from the Escrow Shares (as defined
below).
<PAGE>
D. The Escrow Committee has been constituted as agent for and on behalf
of the Stockholders, to undertake certain obligations herein.
E. The parties hereto desire to set forth the terms and conditions
relating to the Escrow Shares (the "Escrow").
F. Pursuant to Section 3.1(c)(ii) of the Acquisition Agreements
additional shares of Premiere Common Stock to be issued pursuant to the
Acquisition Agreements have contemporaneously herewith been deposited with the
Escrow Agent pursuant to the General Escrow Agreement (as defined in the
Acquisition Agreements) (the "General Escrow").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in the Acquisition Agreements, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
AGREEMENT
---------
1. Establishment of Escrow. Pursuant to the Acquisition Agreements, on
-----------------------
the Closing Date Premiere shall deposit in escrow with the Escrow Agent on
behalf of the Stockholders a single stock certificate representing ________
shares of Premiere Common Stock, equal to ______ percent (______%) of the shares
otherwise allocable to the Stockholders pursuant to the VTE Agreement and the
VTN Agreement (the "Escrow Shares"), which shall be registered in the name of
the Escrow Agent as nominee for the beneficial owners of such shares. The
Escrow Agent shall deliver a receipt therefor to the Escrow Committee. The
parties hereto agree and acknowledge that the Stockholders are the beneficial
owners of the Escrow Shares and that the aforementioned stock certificate is
registered in the name of the Escrow Agent only as a matter of administrative
convenience. The Escrow Shares shall be held and distributed by the Escrow
Agent in accordance with the terms and conditions of this Specific Escrow
Agreement. A list showing the pro rata interest of the Stockholders in the
Escrow Shares is set forth in Exhibit A attached hereto.
---------
2. Escrow Period. The Escrow shall commence on the Closing Date and,
-------------
subject to the provisions of Sections 5(c), 5(d),and5(e), shall terminate on the
third anniversary of the date of this Agreement (the "Escrow Period").
3. Application of Escrow Shares to Claims.
--------------------------------------
(a) If Premiere shall have suffered any Losses for which it is entitled to
indemnification from the Stockholders, VTE, or VTN pursuant to Section 10.1(c),
10.1(d), 10.1(e), 10.1(f) or 10.1(g) of any of the Acquisition Agreements
("Losses"), it shall promptly give written notice of the Indemnification Claim
to the Escrow Committee in accordance with Section 10.2 of the appropriate
Acquisition Agreement, with a duplicate copy delivered to the Escrow Agent. If
the Indemnification Claim involves a Third Party Claim, the procedures set forth
in Section 10.3 of the appropriate Acquisition Agreement shall be observed by
Premiere and the Escrow Committee. If the Indemnification Claim involves a
matter other than a Third Party Claim and no objection is made by the Escrow
Committee pursuant to Section 3(b) below, the Escrow Agent shall deliver out of
the Escrow to Premiere the following within ten (10) calendar days after the
expiration of the thirty (30) calendar day notice period set forth in Section
3(b) below a number of Escrow Shares (rounded up to the nearest whole number)
equal to the amount of the Losses set
-2-
<PAGE>
forth in such notice of claim divided by the Average Closing Price (as such term
is defined in the Acquisition Agreements; provided that such Average Closing
Price shall be appropriately adjusted upon the occurrence of any of the events
described in Section 6 of this Agreement). Notwithstanding anything to the
contrary in this Escrow Agreement, the Escrow Agent shall not make any payment
to Premiere from the Escrow until claims by Premiere for Losses under this
Specific Escrow Agreement and the General Escrow Agreement that are due and
payable exceed $50,000, in which event the Escrow Agent shall satisfy all such
claims from the Escrow without regard to such limitation.
(b) If the Escrow Committee objects to the validity of any claim for
Losses it shall give written notice to Premiere within thirty (30) calendar days
following receipt of notice of such claim, with a duplicate copy to the Escrow
Agent, that it does not consent to the delivery of any of the Escrow Shares out
of Escrow to Premiere for application to such claim. In such case, the Escrow
Agent shall continue to hold the Escrow Shares in Escrow until the rights of
Premiere and the Stockholders with respect thereto have been agreed upon among
the Escrow Committee and Premiere or until such rights are finally determined in
accordance with Section 3(c) below. The Escrow Agent may rely on (1) any
memorandum of Premiere and the Escrow Committee or (ii) any determination by any
arbitration panel as provided in Section 3(c) below. In any such resolution to
determine the number of Escrow Shares to be delivered out of Escrow, the Escrow
Agent shall, as soon as practicable following receipt of a copy of such
determination, deliver Escrow Shares from the Escrow in accordance with the
terms thereof.
(c) In case the Escrow Committee shall so object in writing to any
claim or claims by Premiere, Premiere and the Escrow Committee shall attempt for
thirty (30) calendar days to agree upon the rights of the respective parties
with respect to such claim. If the Escrow Committee and Premiere should so
agree, a memorandum setting forth such agreement shall be prepared and signed by
the Escrow Committee and a duly authorized representative of Premiere and shall
be furnished to the Escrow Agent. The Escrow Agent shall be entitled to rely on
any such memorandum signed by such parties and shall distribute Escrow Shares
from the Escrow in accordance with the terms thereof. If no such agreement can
be reached within such thirty (30) day period, either Premiere or a majority of
the Escrow Committee may, by written notice to the other, demand arbitration of
the matter unless the amount of the Losses is at issue in pending litigation
with a third party, in which event arbitration shall not be commenced until such
amount is ascertained or both parties agree to arbitration; and in either such
event the matter shall be settled by arbitration conducted by a single
arbitrator experienced in the matters at issue and selected by the Escrow
Committee and Premiere in accordance with the Commercial Arbitration Rules of
the American Arbitration Association. The arbitration shall be held in such
place in Atlanta, Georgia as may be specified by the arbitrator (or any place
agreed to by the Escrow Committee, Premiere and the arbitrator). The decision
of the arbitrator shall be final and binding as to any matters submitted under
this Section 3(c); provided, however, if necessary, such decision and
satisfaction procedure may be enforced by either the Escrow Committee or
Premiere in any court of record having jurisdiction over the subject matter or
over any of the parties to this Agreement. All costs and expenses incurred in
connection with any such arbitration proceeding (including reasonable attorneys'
fees) shall be borne by the party against which the decision is rendered, or, if
no decision is rendered, such costs and expenses shall be borne equally by the
Stockholders as one party and Premiere as the other party. If the arbitrator's
decision is a compromise, the determination of which party or parties bear the
costs and expenses incurred in connection with any such arbitration proceeding
shall be made by the arbitrator on the basis of the arbitrator's assessment of
the relative merits of the parties' positions.
-3-
<PAGE>
4. Escrow Committee.
----------------
(a) Upon consummation of the transactions contemplated by the
Acquisition Agreements and in consideration of the issuance of the Escrow
Shares, each Stockholder shall be deemed to have irrevocably appointed the
Escrow Committee as his or its attorneys-in-fact to give and receive notices and
communications, to authorize delivery to Premiere of Escrow Shares from the
Escrow in satisfaction of claims by Premiere, to object to such deliveries, to
negotiate, enter into settlements and compromises of, and demand arbitration and
comply with orders of courts and awards of arbitrators with respect to such
claim, and to take all actions necessary or appropriate in the judgment of the
Escrow Committee for the accomplishment of the foregoing. No further
documentation shall be required to evidence such appointment, and such power of
attorney shall be coupled with an interest, thereby confirming such appointment
as irrevocable. Notices or communications to or from the Escrow Committee shall
constitute notice to or from each Stockholder. A decision, act, consent or
instruction of the Escrow Committee shall constitute a decision of all
Stockholders for whom shares of Premiere Common Stock otherwise issuable or
payable to them are deposited in the Escrow and shall be final, binding and
conclusive upon each such Stockholder, and the Escrow Agent and Premiere may
rely upon any "properly authorized" decision, act, consent or instruction of the
Escrow Committee as being the decision, act, consent or instruction of each and
every such Stockholder. The Escrow Agent and Premiere are hereby relieved from
any liability to any person for any acts done by them in accordance with such
properly authorized decision, act, consent or instruction of the Escrow
Committee. The Escrow Committee shall be empowered to act by majority vote with
respect to all matters arising under this Escrow Agreement during the term of
this Escrow Agreement, and for the purposes of this Agreement, a "properly
authorized" decision, act, consent or instruction of the Escrow Committee is one
that is approved by at least a majority of the members of the Escrow Committee.
No bond shall be required of the Escrow Committee, and members of the Escrow
Committee shall receive no compensation for their services.
(b) Neither the Escrow Committee nor any member thereof shall be
liable to anyone whatsoever by reason of any error of judgment or for any act
done or step taken or omitted by them in good faith or for any mistake of fact
or law for anything which he may do or refrain from doing in connection herewith
unless caused by or arising out of his own gross negligence or willful
misconduct, and any act done or omitted pursuant to the advice of counsel shall
be conclusive evidence of such good faith. The Stockholders shall indemnify and
hold the Escrow Committee and each member thereof harmless from any and all
liability and expense (including, without limitation, attorneys' fees) which may
arise out of any action taken or omitted by them or any one of them as an Escrow
Committee member in accordance with this Escrow Agreement including, without
limitation, any claims, demands, suits, investigations, proceedings or actions
by a third party, as the same may be amended, modified or supplemented, except
such liability and expense as may result from the gross negligence or willful
misconduct of the Escrow Committee.
(c) The Escrow Committee may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed to be genuine
and to have been signed or presented by the proper party or parties.
(d) Except as provided herein, the Escrow Committee is hereby
authorized and directed to disregard any and all notices and warnings that may
be given by any person, corporation or entity except the final order, judgment
or decree of any court or arbitration panel
-4-
<PAGE>
made, filed, entered or issued, whether with or without jurisdiction, from which
no further appeal may be taken and the Escrow Committee is hereby authorized to
comply with and obey any and all such final orders, judgments and decrees of any
court or arbitration panel made, filed, entered or issued, whether with or
without jurisdiction.
(e) If any member of the Escrow Committee shall die, become disabled
or otherwise be unable to fulfill its responsibilities hereunder, the remaining
member or members of the Escrow Committee shall select a replacement member or
members from among the Stockholders.
(f) The Escrow Committee shall have reasonable access to information
about Premiere, VTE, VTN and VTNLP and the reasonable assistance of their
officers, directors, partners and employees for purpose of performing its duties
and exercising its rights hereunder, provided that the Escrow Committee shall
treat confidentially and not disclose any nonpublic information from or about
Premiere, VTE, VTN and VTNLP to anyone (except on a need-to-know basis to
individuals who agree to treat such information confidentially).
(g) The Escrow Committee shall be deemed to be the "Stockholder
Representative" under each of the Acquisition Agreements.
5. The Escrow Agent. The reasonable fees and expenses of the Escrow
----------------
Agent in connection with its execution and performance of this Escrow Agreement
as set forth on Exhibit B hereto shall be borne by Premiere and the Stockholders
---------
equally. The Escrow Agent shall be entitled to such rights and shall perform
such duties of the Escrow Agent as set forth herein, including but not limited
to the following (collectively, the "Duties"):
(a) The Escrow Agent shall hold and safeguard the Escrow during the
Escrow Period, shall treat such Escrow as an escrow fund in accordance with the
terms of this Escrow Agreement and not as the property of Premiere, and shall
hold and dispose of the Escrow only in accordance with the terms of this Escrow
Agreement.
(b) The Escrow Agent shall distribute to the Stockholders all
material relating to a vote of holders of Premiere Common Stock that the Escrow
Agent receives from the Premiere or any third party, and the Stockholders shall,
in such Stockholder's sole discretion, vote such shares and execute such
documents as may be necessary to permit such shares to be voted by the
Stockholders in accordance with their respective beneficial interests. The
Escrow Agent shall have no right to vote the Escrow Shares, except to the extent
so directed to do so by the beneficial owner of the respective shares.
(c) If at any time following the date of execution of this Agreement
and prior to the expiration of the Escrow Period all claims arising out of or
related to the matters set forth in Section 5.11(c) of the VTE Disclosure
Memorandum shall have been resolved to Premiere's satisfaction and all claims
for Losses in respect thereof shall have been distributed to Premiere in
accordance with Section 3, then the Escrow Agent shall distribute to each of the
Stockholders the number of Escrow Shares (rounded up to the nearest whole
number) equal to (i) the sum of (A) $3,000,000 multiplied by such Stockholder's
pro rata interest in the Escrow Shares, less (B) the Distributed Value with
respect to claims for Losses asserted by Premiere prior to the event giving rise
to the rights under this Section 5(d) multiplied by such Stockholder's pro rata
interest in the
-5-
<PAGE>
Escrow Shares, divided by (ii) the Average Closing Price; provided, however,
that the amount distributed shall be reduced by the amount of any outstanding
and unresolved claims by Premiere for Losses (which amounts shall be determined
in a manner consistent with, and shall be subject to later distribution in a
manner consistent with, the provisions of Section 5(e)), multiplied by such
Stockholder's pro rata interest in the Escrow Shares, divided by (ii) the
Average Closing Price. "Distributed Value" shall mean the number of Escrow
Shares distributed to Premiere in accordance with Section 3 multiplied by the
Average Closing Price.
(d) [RESERVED]
(e) Promptly following termination of the Escrow Period as set forth
in Section 2 hereof, the Escrow Agent shall deliver to SunTrust Bank, Atlanta,
Trust Company Tower, 25 Park Place, Atlanta, Georgia 30303 Attn: Letitia
Ratford, the transfer agent of the Premiere Common Stock (the "Transfer Agent"),
the certificate representing the Escrow Shares with instructions for the
Transfer Agent to issue to each Stockholder a new certificate, subject to
Section 5(f) hereof, in the name of each Stockholder representing each
Stockholder's pro rata portion of the Escrow Shares at the time of such
distribution based on Exhibit A to this Escrow Agreement, provided, however,
---------
that in the event that there are claims by Premiere for Losses outstanding at
the time of the termination of the Escrow Period, the Escrow Agent shall retain
an amount of such Escrow Shares sufficient in the reasonable judgment of
Premiere, subject to objection of the Escrow Committee and the subsequent
resolution of the matter in the manner provided in Section 3 above, to satisfy
any unsatisfied claims for Losses specified in any notice by Premiere
theretofore delivered to the Escrow Committee and Escrow Agent prior to
termination of the Escrow Period with respect to facts and circumstances
existing prior to expiration of the Escrow Period, and to pay expenses as
provided in this Escrow Agreement. As soon as all such claims have been fully
resolved, the Escrow Agent shall deliver to the Stockholders any and all of the
Escrow Shares and other property remaining in the Escrow and not required to
satisfy such claims and expenses. Each Stockholder shall receive that number of
Escrow Shares which bears the same relationship to the total number of Escrow
Shares in the Escrow and available for distribution as the number of Escrow
Shares set forth opposite the name of each such Stockholder on Exhibit A hereto
---------
bears to the total number of Escrow Shares on Exhibit A as calculated by the
---------
Escrow Agent.
(f) The Stockholders shall have no right to receive, and the Escrow
Agent shall not distribute to the Stockholders, fractional Escrow Shares. In
the event that the distribution of any Stockholder's pro rata share of the
Escrow Shares would, but for this Section 5(f), result in such Stockholder
receiving fractional shares of Premiere Common Stock, (i) the Escrow Agent shall
instruct the Transfer Agent to issue a certificate in such Stockholder's name
for his or pro rata share of Escrow Shares rounded down to the nearest whole
share, (ii) the Escrow Agent shall instruct the Transfer Agent to issue an
additional certificate representing, in the aggregate, all fractional share
interests at the time of such distribution and the Escrow Agent shall thereupon
deliver such certificate to Premiere, (iii) Premiere shall deliver to the Escrow
Agent an amount of cash representing, the aggregate market value (based on the
closing sale price of Premiere Common Stock on the day of the termination of the
Escrow Period or, if such day is not a business day, the business day immediate
preceding such date, as reported in the Wall Street Journal) of such fractional
share interests as of the time of such distribution, and (iv) the Escrow Agent
shall deliver to each applicable Stockholder cash or a check representing such
Stockholder's fractional share interest. Premiere agrees to cause all necessary
Form 1099 information reports to be filed and
-6-
<PAGE>
hereby indemnifies the Escrow Agent against all costs resulting from the failure
to file such reports.
6. Replacement of Escrow Shares. Premiere shall promptly notify the
----------------------------
Escrow Agent of any fundamental corporate change that will result in the
elimination of the Premiere Common Stock.
(a) Distribution. Any cash dividends, dividends payable in securities or
------------
other distributions of any kind (but excluding any shares of Premiere Common
Stock received upon a stock split or stock dividend accounted for as a stock
split) shall be distributed promptly by the Escrow Agent to the beneficial
holder of the Escrow Shares to which such distribution relates. Any shares of
Premiere Common Stock received by the Escrow Agent upon a stock split or stock
dividend accounted for as a stock split made in respect of any securities in the
Escrow shall be added to the Escrow and become a part thereof. Any provision
hereof or in the Acquisition Agreements concerning the distribution of Premiere
Common Stock shall be adjusted to appropriately reflect any stock split or
reverse stock split or stock dividend accounted for as a stock split.
(b) All Cash or All Stock Merger or Consolidation or Share Exchange. If,
---------------------------------------------------------------
prior to the distribution of all Escrow Shares from the Escrow, the Escrow
Agent receives notice from Premiere that Premiere intends to merge, consolidate
or engage in a share exchange with another corporation which is not an affiliate
of Premiere in a merger or consolidation involving a payment to stockholders of
Premiere (including the Stockholders) of an amount payable either entirely in
cash or entirely in capital stock of the surviving corporation or the parent of
the surviving corporation (the surviving corporation being an entity other than
Premiere) or an exchange of shares, and the Premiere Common Stock will not
longer be outstanding following the effective time of such merger or
consolidation (because Premiere is not the surviving corporation) or the
Premiere Common Stock is owned by the acquiring corporation as a result of such
share exchange, as the case may be, then the Escrow Agent shall treat the
amounts received by it (as the recordholder of the Escrow Shares) as follows:
(i) If the consideration received is cash, the Escrow Agent shall
retain in escrow and invest in investments as directed by the Escrow Committee
the cash received pursuant to transaction described in subparagraph (b) of this
Section 6; or
(ii) If the consideration received is capital stock of the surviving
company, the shares of capital stock received pursuant to the transactions
described in subparagraph (b) of this Section 6 will be retained in escrow.
(c) Other Transactions. In the event there occurs at any time or from
------------------
time to time prior to the distribution of all shares of Premiere Common Stock
from the Escrow any fundamental corporate change that affects the outstanding
shares of Premiere Common Stock, other than the transaction described in
subparagraph (b) above (including, without limitation, a merger or consolidation
involving a payment to Stockholders of a combination of cash and capital stock
of the surviving corporation), then the Escrow Agent shall hold the amounts
received by it (as the record holder of the Escrow Shares) until it receives
written direction from the Escrow Committee and Premiere (or its successors) as
to the appropriate disposition of such amounts so received. In addition, for
purposes of this Escrow Agreement, in the event of a fundamental corporate
change resulting in the elimination of the Premiere Common Stock, defined terms
relating
-7-
<PAGE>
to or derived from the Premiere Common Stock shall relate to or derive from the
security or other assets replacing such Premiere Common Stock.
7. Ownership of Escrow Shares. The Stockholders shall have all indicia
--------------------------
of ownership of the Escrow Shares while they are held in Escrow, including the
right to vote the Escrow Shares, the right to receive dividends (subject to the
limitations set forth in Section 6) and the obligation to pay all taxes,
assessments, and charges with respect thereto, but excluding the right to sell,
transfer, pledge or hypothecate or otherwise dispose of any Escrow Shares.
Except as contemplated hereunder, no Escrow Shares or any beneficial interest
therein may be pledged, sold, assigned or transferred, including by operation of
law, other than by will or by the laws of descent or distribution in the event
of the death of a Stockholder, by a Stockholder or be taken or reached by any
legal or equitable process in satisfaction of any debt or other liability of
such Stockholder, prior to the delivery to the Stockholder of the Escrow Shares
by the Escrow Agent.
8. Exculpatory Provisions of Escrow Agent.
--------------------------------------
(a) The Escrow Agent shall be obligated only for the performance of
such Duties as are specifically set forth herein and may rely and shall be
protected in relying or refraining from acting on any instrument reasonably
believed to be genuine and to have been signed or presented by the proper party
or parties. The Escrow Agent shall not be liable for other parties' forgeries
or fraudulent acts. The Escrow Agent shall not be liable for any act done or
omitted hereunder as escrow agent except for breach of this Escrow Agreement,
gross negligence or misconduct. The Escrow Agent shall, in no case or event be
liable for any representations or warranties of VTN or , VTE or the
Stockholders. Any act done or omitted pursuant to the advice or opinion of
counsel shall be conclusive evidence of the good faith of the Escrow Agent.
(b) The Escrow Agent is hereby authorized and directed to disregard
any and all notices and warnings that may be given by any person, firm or
corporation except the final order, judgment or decree of any court or
arbitration panel made, filed, entered or issued, whether with or without
jurisdiction, from which no further appeal may be taken and the Escrow Agent is
hereby authorized to comply with and obey any and all such final orders,
judgments and decrees of any court or arbitration panel made, filed, entered or
issued, whether with or without jurisdiction. If the Escrow Agent shall comply
with or obey any such order, judgment or decree of any court, the Escrow Agent
shall not be liable to any of the parties hereto, or to any other person, firm
association or corporation, by reason of any such compliance or obedience even
if any such order, judgment or decree may be subsequently revised, modified,
annulled, set aside or vacated.
(c) The Escrow Agent shall not be liable for the outlawing of any
rights under any statute of limitations with respect to the Acquisition
Agreements or any documents deposited with the Escrow Agent.
9. Resignation and Removal of the Escrow Agent. The Escrow Agent may
-------------------------------------------
resign as Escrow Agent at any time with or without cause by giving at least
thirty (30) calendar days' prior written notice to each of Premiere and the
Escrow Committee, such resignation to be effective thirty calendar (30) days
following the date such notice is given. In addition, Premiere and the Escrow
Committee may jointly remove the Escrow Agent as escrow agent at any time with
or without cause, by an instrument (which may be executed in counterparts) given
to the Escrow Agent, which instrument shall designate the effective date of such
removal. In the event of any such resignation or removal a successor escrow
agent shall be appointed by the Escrow Committee
-8-
<PAGE>
and Premiere. Any such successor escrow agent shall deliver to Premiere and the
Escrow Committee a written instrument accepting such appointment and thereupon
it shall succeed to all the rights and duties of the escrow agent hereunder and
shall be entitled to receive the assets in the Escrow.
10. Further Instruments. If the Escrow Agent reasonably requires other or
-------------------
further instruments in connection with performance of the Duties, the necessary
parties hereto agree to furnish such instruments.
11. Disputes. It is understood and agreed that should any dispute arise
--------
with respect to the delivery and/or ownership or right of possession of the
securities or funds held by the Escrow Agent hereunder, the Escrow Agent is
authorized and directed to act in accordance with and in reliance upon, the
terms hereof. The Escrow Agent may hold all documents and funds and may wait
for settlement of any dispute by final appropriate proceedings. Furthermore,
the Escrow Agent may in its reasonable judgment, file an action of interpleader
requiring the parties hereto to answer and litigate any claims and right among
themselves, in which case, the Escrow Agent is authorized to deposit with the
clerk of the court all documents, securities and funds held in Escrow, except
that the Escrow Agent may withhold all reasonable costs, reasonable expenses,
reasonable charges and reasonable attorney fees incurred by the Escrow Agent due
to the interpleader action. Upon initiating such interpleader action, tile
Escrow Agent shall be fully released and discharged of and from all obligations
of this Escrow Agreement.
12. Indemnification. Through the Escrow or otherwise, in consideration of
---------------
the Escrow Agent's acceptance of this appointment, the other parties hereto,
jointly and severally, agree to indemnify and hold the Escrow Agent harmless as
to any liability incurred by it to any person, firm or corporation by reason of
its having accepted such appointment or in carrying out the terms hereof and the
Acquisition Agreements, and to reimburse the Escrow Agent for all its reasonable
costs and expenses, including, among other things, attorneys' fees and expenses,
incurred by reason of any matter as to which an Indemnity is paid; provided,
--------
however, that no indemnity need be paid in case of the Escrow Agent's gross
- - -------
negligence, willful misconduct or breach of this Escrow Agreement.
13. Notices. Any notice or other communication required or permitted
-------
hereunder shall be in writing, and shall be given by registered mail, postage
prepaid, personal delivery, telecopier (confirmed by mail as aforesaid) or
courier service such as Federal Express addressed as follows:
If to Premiere, to:
Premiere Technologies, Inc.
The Lenox Building, Suite 400
3399 Peachtree Road, NE
Atlanta, Georgia 30326
Attn: Boland T. Jones, President
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<PAGE>
with a copy to:
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309
Attn: Jeffrey A. Allred, Esq.
If to VTE or VTN to:
Voice-Tel Enterprises, Inc.
Four Commerce
Square, Suite 800
23200 Chagrin Boulevard
Cleveland, Ohio 44122
Attn: Martin J. Huebschman, President
With a copy to:
Benesch, Friedlander, Coplan & Aronoff
2300 BP America Building
Cleveland, Ohio 44144
Attn: Michael Wager, Esq.
If to the Escrow Committee, to:
___________________
___________________
___________________
Attn: _____________
With a copy to:
___________________
___________________
___________________
Attn: _____________
If to Escrow Agent to:
[SunTrust Bank]
___________________
___________________
___________________
Attn: _____________
Each of the parties hereto shall be entitled to specify a different address by
giving notice as aforesaid. Such notices and communications shall be deemed
effective (i) three (3) business days
-10-
<PAGE>
after being sent, if sent by registered mail (postage prepaid) from one location
in the United States to another location therein, (ii) on the date delivered, if
delivered personally or transmitted by confirmed facsimile or (iii) one (1)
business day after being sent if sent by overnight courier service.
14. Headings. Section headings are not to be considered part of this
--------
Escrow Agreement, are included solely for convenience and reference and are not
intended to be full or accurate descriptions of the contents of Sections to
which they relate.
15. Governing Law. The validity, construction and interpretation of this
-------------
Escrow Agreement shall be governed by the laws of the State of Georgia
applicable to contracts made in and to be performed wholly within that state.
16. Counterparts. This Escrow Agreement may be executed simultaneously in
------------
two or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
17. Amendments. This Escrow Agreement may only be amended by an
----------
instrument in writing signed by each of the parties hereto.
18. Business Day. For purposes of this Escrow Agreement a "business day"
------------
is a day on which the Escrow Agent is open for business and shall not include a
Saturday, Sunday, or legal holiday. Notwithstanding anything to the contrary in
this Escrow Agreement no action shall be required of the Escrow Agent, Premiere,
or any party receiving notice pursuant to the terms of this Escrow Agreement
except on a business day and in the event an action is required on a day which
is not a business day, such action shall be required to be performed on the next
succeeding day which is a business day.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.,
a Georgia corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
VTE:
VOICE-TEL ENTERPRISES, INC., a
Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
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<PAGE>
VTN:
VTN, Inc., an Ohio corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
-12-
<PAGE>
EXHIBIT A
PRO RATA INTERESTS OF STOCKHOLDERS
Name # of Escrow Shares Pro Rata Interest
---- ------------------
<PAGE>
EXHIBIT 4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of ____________, 1997, by and among Premiere Technologies, Inc., a
Georgia corporation (the "Company"), those stockholders of Voice-Tel
Enterprises, Inc., a Delaware corporation ("VTE"), appearing as signatories
hereto, those shareholders of VTN, Inc., an Ohio corporation ("VTN"), appearing
as signatories hereto (each of the stockholders of VTE and shareholders of VTN,
a "VTE/VTN Stockholder" and collectively, the "VTE/VTN Stockholders"), and those
stockholders or other equity owners of franchisees of VTE ("Franchisees") that
execute Adoption Agreements in the form attached hereto as Exhibit A (each such
stockholder or owner, a "Franchisee Stockholder" and collectively, the
"Franchisee Stockholders" and collectively with the VTE/VTN Stockholders, the
"Stockholders").
R E C I T A L S
---------------
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger, dated as
of April __, 1997 (as the same may be amended, the "VTE Acquisition Agreement"),
by and among the Company, PTEK Merger Corporation, a Delaware corporation
("Sub"), VTE, and the stockholders of VTE, Sub shall be merged with and into VTE
(the "VTE Acquisition"), with the result that each of the outstanding shares of
no par value common stock of VTE ("VTE Common Stock") will be converted into the
right to receive shares of the $0.01 par value common stock of the Company (the
"Company Common Stock");
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger, dated as
of April __, 1997 (as the same may be amended, the "VTN Acquisition Agreement"),
by and among the Company, PTEK Merger Corporation II, an Ohio corporation ("Sub
II"), VTN and the shareholders of VTN, Sub II will be merged with and into VTN
(the "VTN Acquisition"), with the result that each of the outstanding shares of
the no par value common stock of VTN ("VTN Common Stock") will be converted into
the right to receive shares of Company Common Stock (the VTE Acquisition and the
VTN Acquisition are collectively called the "Acquisition" and the VTE
Acquisition Agreement and the VTN Acquisition Agreement are collectively called
the "Acquisition Agreement");
WHEREAS, the Company has agreed, as a condition precedent to VTE's and
VTN's obligations under the Acquisition Agreement, to grant the VTE/VTN
Stockholders certain registration rights; and
WHEREAS, the Company has agreed to acquire certain Franchisees pursuant to
the terms a Transfer Agreement between each such Franchisee, the stockholders or
other equity owners of such Franchisee and the Company (collectively, the
"Franchisee Acquisition Agreements"); and
WHEREAS, the Company has agreed, as a condition precedent to the
consummation of the transactions contemplated in the Franchisee Acquisition
Agreements, to grant the Franchisee Stockholders certain registration rights;
and
WHEREAS, the Company and the Stockholders desire to define the
aforementioned registration rights on the terms and subject to the conditions
herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as follows:
<PAGE>
1. DEFINITIONS
-----------
As used in this Agreement, the following terms have the respective meanings
set forth below:
Affiliate: shall mean, for any Person, (i) any other Person controlling,
---------
controlled by or under common control with such Person and (ii) any partner of
any such Person which is a partnership.
Amway Entity: shall mean Amway Corporation and any Affiliate thereof.
------------
Commission: shall mean the Securities and Exchange Commission or any other
----------
federal agency at the time administering the Securities Act;
Effective Date: shall mean the date on which the Acquisition is
--------------
consummated;
Exchange Act: shall mean the Securities Exchange Act of 1934, as amended;
------------
Holder: shall mean any holder of Registrable Securities;
------
Initiating Holder: shall mean any Amway Entity or any other Holder or
------------------
Holders who in the aggregate are Holders of more than 10% of the then
outstanding Registrable Securities;
Other Stockholders: shall mean Persons who, by virtue of an agreement with
------------------
the Company, are entitled to include their Securities in any registration
effected under Section 3.
Person: shall mean an individual, partnership, joint stock company, limited
------
liability company, corporation, trust or unincorporated organization, and a
government or agency or political subdivision thereof;
register, registered and registration: shall mean a registration effected
-------- ---------- ------------
by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean (A) the shares of Company Common Stock
----------------------
issued to the Stockholders under the Acquisition Agreement and the Franchisee
Acquisition Agreements, and (B) any securities of the Company issued as a
dividend or other distribution with respect to, or in exchange for or in
replacement of, the shares of Company Common Stock referred to in clause (A);
provided, that Registrable Securities shall not include (i) securities with
respect to which a registration statement with respect to the sale of such
securities has become effective under the Securities Act and all such securities
have been disposed of in accordance with such registration statement, (ii) such
securities as are actually sold pursuant to Rule 144, or (iii) such securities
as are acquired by the Company or any of its subsidiaries;
Registration Expenses: shall mean all expenses incurred by the
---------------------
Company in compliance with Sections 3(a), (b), (c) and (d) hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, fees and expenses of one counsel
for all the Holders, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company);
Rule 144: shall mean Rule 144 (or any successor provision thereto) under
--------
the Securities Act.
Rule 145: shall mean Rule 145 (or any successor provision thereto) under
--------
the Securities Act.
Security, Securities: shall have the meaning set forth in Section 2(1) of
--------------------
the Securities Act;
-2-
<PAGE>
Securities Act: shall mean the Securities Act of 1933, as amended; and
--------------
Selling Expenses: shall mean all underwriting discounts and selling
-----------------
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than fees and expenses of
one counsel for all the Holders.
2. [Reserved]
----------
3. REGISTRATION RIGHTS
-------------------
(a) Requested Registration.
----------------------
(i) Request for Registration. If the Company shall receive from
------------------------
an Initiating Holder, at any time (x) after July 15, 1997 and (y) before the end
of the nine month period following the Effective Time (the "Demand Period"), a
written request (a "Registration Request") that the Company effect any
registration with respect to Registrable Securities held by such Initiating
Holder, the Company shall:
(A) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(B) use its commercially reasonable efforts to effect such
registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) as
may be so requested as soon as practicable, but in any event no later than
ninety (90) days from the date of the request and as would permit or
facilitate the sale and distribution of all such Registrable Securities as
are specified in such request, together with (i) all of the Registrable
Securities of any Stockholder joining in such request as specified in a
written request received by the Company within twenty (20) business days
after written notice from the Company is given under Section 3(a)(i)(A)
above; provided, however, that no registration requested under this Section
3(a) shall become effective unless and until financial results covering at
least thirty (30) days of combined operations of the Company, VTE and the
Franchisees have been published within the meaning of Section 201.01 of the
Commission's Codification of Financial Reporting Policies; provided
further, that the Company shall not be obligated to effect, or take any
action to effect, any such registration pursuant to this Section 3(a):
(u) Other than by means of an underwriting in
accordance with Section 3(a)(ii);
(v) Other than pursuant to a registration statement on
Form S-3;
(w) Unless the Company has received audited financial
statements with respect to any business acquired or to be acquired to
the extent required by Rule 3-05 of Regulation S-X for so long as it
takes to obtain such statements, provided that the Company shall use
all commercially reasonable efforts to obtain such statements;
(x) If the Company, within ten (10) business days of
the receipt of the request of the Initiating Holders, gives notice of
its bona fide intention to effect the filing of a registration
statement with the Commission and to cause such registration statement
to become effective within ninety (90) days of receipt of such
request, provided that the Company actively employs, in good faith,
all commercially reasonable efforts to cause such registration
statement to become effective within such ninety (90) day period;
provided,
--------
-3-
<PAGE>
however, that the periods during which the Company shall not be
-------
required to effect a registration in accordance with this Section 3(a)
together with any periods of suspension under Section 3(g) hereof may
not exceed ninety (90) days in the aggregate;
(y) In any particular jurisdiction in which the
Company would be required to execute a general consent to service of
process in effecting such registration, qualification or compliance,
unless the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act or applicable
rules or regulations thereunder;
(z) After the Company has effected one (1) such
registration in accordance with this Section 3(a) (in the aggregate
for all Holders) and such registration has been declared or ordered
effective and the sales of such Registrable Securities thereunder
shall have closed.
Notwithstanding any other provision of this Agreement,
provided any Registration Request is made at any time during the Demand Period,
a postponement or deferral of such requested registration in accordance with
Sections 3(a)(i) or 3(g) shall only postpone or defer the requested
registration, regardless of the expiration of the Demand Period.
(ii) Underwriting. The Holders whose shares are to be
------------
included in a registration in accordance with this Section 3(a) and the Company
shall enter into underwriting and related agreements in customary form with the
representative of the underwriter or underwriters selected for such underwriting
by the Initiating Holders and reasonably acceptable to the Company. Such
underwriting agreement shall contain representations and warranties by the
Company and other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions. The Company
shall cooperate fully with the Holders and the underwriters in connection with
any underwritten offering.
If any Holder or holder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the managing underwriter. Any securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration.
(iii) Cut-Back. Notwithstanding any other provision of this
--------
Section 3(a), if the managing underwriter advises the Company and the Holders in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the securities of the Company held by Other Stockholders shall
be excluded from such registration to the extent so required by such limitation,
unless and to the extent prohibited by the terms of any registration rights or
other agreement in effect with such Other Stockholder. If, after the exclusion
of such shares, still further reductions are still required, the number of
shares included in the registration by each Holder shall be reduced on a pro
rata basis (based on the number of shares held by such Holder), by such minimum
number of shares as is necessary to comply with such request; provided, that
there shall be no reduction in the number of shares included in the registration
by any Holder until all shares of Other Stockholders have been excluded from
such registration, unless and to the extent prohibited by the terms of any
registration rights or other agreement in effect with such Other Stockholder. No
Registrable Securities or any other securities excluded from the underwriting by
reason of the underwriter's marketing limitation shall be included in such
registration. If any Other Stockholder who has requested inclusion in such
registration as provided above disapproves of the terms of the underwriting,
such person may elect to withdraw therefrom by written notice to the Company,
the underwriter and the Initiating Holder. The securities so withdrawn shall
also be withdrawn from registration. If the managing underwriter has not limited
the number of Registrable Securities or other securities to be underwritten, the
Company and officers and directors of the Company may include its or their
securities for its or their own account in such registration if the managing
underwriter so agrees and if the number of Registrable Securities and other
securities which would otherwise have been included in such registration and
underwriting will not thereby be limited.
-4-
<PAGE>
(iv) Demand Registration Rights of Other Persons. In the
-------------------------------------------
event the Company, directly or indirectly, grants any right to, or alters any
existing right of, any Person or Persons, by agreement, arrangement or
understanding, which enables such Person or Persons to exercise during the
Demand Period rights requiring the Company to prepare, or cause to be prepared,
on behalf of such Person or Persons or in cooperation with such Person or
Persons, a registration statement the form of which is, under the rules and
regulations of the Commission, suitable for the sale of any of the Company's
securities in a registered public offering, the Company shall notify the Holders
of the terms and conditions of such rights granted to such Person. Following
receipt of such notification from the Company, if requested by Holders of a
majority of the Registrable Securities, in their sole discretion, the Company
shall enter into a written agreement with the Holders, which agreement shall
amend this Agreement to permit the Holders to exercise during the Demand Period
demand registration rights on any more favorable terms and conditions which have
been granted to any such Person by the Company.
(b) Company Registration.
--------------------
(i) Notice of Registration. If at any time prior to the
----------------------
first anniversary of the date of this Agreement (the "Piggyback Period") the
Company shall determine to register any of its equity securities, either for its
own account or for the account of a security holder or holders, other than (A) a
registration relating solely to employee benefit plans, or (B) a registration
relating solely to a Rule 145 transaction, the Company shall:
(A) promptly give to each Holder written notice
thereof; and
(B) include in such registration (and any related
qualification laws or other compliance), and related underwriting, if any, all
the Registrable Securities specified in a written request or requests, made
within twenty (20) days after mailing of such written notice from the Company to
any Holder.
(ii) Underwriting. If the registration of which the
------------
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holders as a part of the written
notice given pursuant to Section 3(b)(i). In such event the right of any Holder
to registration in accordance with Section 3(b) shall be conditioned upon such
Holder's participation in such underwriting, and the inclusion of Registrable
Securities in the underwriting shall be limited to the extent provided herein.
All Holders proposing to distribute their securities through such underwriting
shall (together with the Company and the other holders distributing their
securities though such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by
the Company.
(iii) Cut-Back. Notwithstanding any other provision of this
--------
Section 3(b), if the managing underwriter advises the Company and the Holders in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the number of shares included in the registration by each
Holder and any other holder of securities of the Company whose shares are
requested to be included in a registration proposed to be filed by the Company
shall be reduced on a pro rata basis (based on the number of shares held by such
Holder and other security holder) by such minimum number of shares as is
necessary to comply with such request; subject to the terms of any registration
rights or other agreement in effect with any Other Stockholder. No Registrable
Securities or any other securities excluded from the underwriting by reason of
the underwriter's marketing limitation shall be included in such registration.
If any Other Stockholder who has requested inclusion in such registration as
provided above disapproves of the terms of the underwriting, such person may
elect to withdraw therefrom by written notice to the Company and the
underwriter. The securities so withdrawn shall also be withdrawn from
registration.
(iv) Piggyback Registration Rights of Other Persons. In
----------------------------------------------
the event the Company grants any rights, or alters any existing right, to any
Person or Persons by agreement, arrangement or
-5-
<PAGE>
understanding which enables such Person to exercise during the Piggyback Period
piggyback registration rights, the Company shall, in writing, notify, within ten
(10) calendar days of such action by the Company, the Holders of the terms and
conditions of such rights granted to such Person. Notwithstanding anything
contained in this Agreement to the contrary, the Company shall not grant during
the Piggyback Period any piggyback rights to any Person or Persons, directly or
indirectly, by agreement, arrangement or understanding that provide, in the
context of any cut back in the number of shares to be included in accordance
with piggyback registration rights, that such cut back be made on a pro rata
basis other than as provided in Section 3(b)(iii).
(v) Right to Terminate Registration. The Company shall
-------------------------------
have the right to terminate or withdraw any registration initiated by it under
this Section 3(b) prior to the effectiveness of such registration whether or not
any Holder has elected to include securities in such registration.
(c) Expenses of Registration. Registration Expenses incurred in
------------------------
connection with any registration, qualification or compliance in accordance with
this Section 3 shall be borne by the Company, and all Selling Expenses shall be
borne by the Holders of the securities registered pro rata on the basis of the
number of their shares so registered.
(d) Registration Procedures. In the case of each registration
-----------------------
effected by the Company pursuant to this Section 3, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company
shall:
(i) keep such registration effective for a period of
forty five (45) days or until the Holders, as applicable, have
completed the distribution described in the registration statement
relating thereto, whichever first occurs;
(ii) in the event of any underwritten public offering,
enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriters
of such offering;
(iii) furnish to each Holder, and to any underwriter before
filing with the Commission, copies of any registration statement
(including all exhibits) and any prospectus forming a part thereof and
any amendments and supplements thereto (including all documents
incorporated or deemed incorporated by reference therein prior to the
effectiveness of such registration statement and including each
preliminary prospectus, any summary prospectus or any term sheet (as
such term is used in Rule 434 under the Securities Act)) and any other
prospectus filed under Rule 424 under the Securities Act, which
documents, other than documents incorporated or deemed incorporated by
reference, will be subject to the review of the Holders and any such
underwriter for a period of at least five business days, and the
Company shall not file any such registration statement or such
prospectus or any amendment or supplement to such registration
statement or prospectus to which any Holder or any such underwriter
shall reasonably object within five business days after the receipt
thereof; a Holder or such underwriters, if any, shall be deemed to
have reasonably objected to such filing only if the registration
statement, amendment, prospectus or supplement, as applicable, as
proposed to be filed, contains a material misstatement or omission;
(iv) furnish to each Holder and to any underwriter, such
number of conformed copies of the applicable registration statement
and of each amendment and supplement thereto (in each case including
all exhibits) and such number of copies of the prospectus forming a
part of such registration statement (including each preliminary
prospectus, any summary prospectus or any term sheet (as such term is
used in Rule 434 under the Securities Act)) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents,
including without limitation documents incorporated or deemed to be
-6-
<PAGE>
incorporated by reference prior to the effectiveness of such
registration, as each of the Holders or any such underwriter, from
time to time may reasonably request;
(v) to the extent practicable, promptly prior to the
filing of any document that is to be incorporated by reference into
any registration statement or prospectus forming a part thereof
subsequent to the effectiveness thereof, and in any event no later
than the date such document is filed with the Commission, provide
copies of such document to the Holders, if requested, and to any
underwriter, and make representatives of the Company available for
discussion of such document and other customary due diligence matters,
and include in such document prior to the filing thereof such
information as any Holder or any such underwriter reasonably may
request;
(vi) make available at reasonable times for inspection by
the Holders, any underwriter participating in any disposition pursuant
to such registration and any attorney or accountant retained by the
Holders or any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company and cause
the officers, directors and employees of the Company to supply all
information reasonably requested by the Holders and any such
underwriters, attorneys or accountants in connection with such
registration subsequent to the filing of the applicable registration
statement and prior to the effectiveness of the applicable
registration statement;
(vii) use its commercially reasonable efforts (x) to
register or qualify all Registrable Securities and other securities
covered by such registration under such other securities or blue sky
laws of such States of the United States of America where an exemption
is not available and as the sellers of Registrable Securities covered
by such registration shall reasonably request, (y) to keep such
registration or qualification in effect for so long as the applicable
registration statement remains in effect, and (z) to take any other
action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the
securities to be sold by such sellers, except that the Company shall
not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction where it is not
so qualified, or to subject itself to taxation in any such
jurisdiction, or to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act or applicable rules or
regulations thereunder;
(viii) use its commercially reasonable efforts to cause all
Registrable Securities covered by such registration statement to be
registered with or approved by such other federal or state
governmental agencies or authorities as may be necessary in the
opinion of counsel to the Company and counsel to the Holders of
Registrable Securities to enable the Holders thereof to consummate the
disposition of such Registrable Securities;
(ix) subject to Section 3(g) hereof, promptly notify each
Holder of Registrable Securities covered by a registration statement
(A) upon discovery that, or upon the happening of any event as a
result of which, the prospectus forming a part of such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
(B) of the issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation of
proceedings for that purpose, (C) of any request by the Commission for
(1) amendments to such registration statement or any document
incorporated or deemed to be incorporated by reference in any such
registration statement, (2) supplements to the prospectus forming a
part of such registration statement or (3) additional information, or
(D) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of
any of the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, and at the request of
any such Holder promptly prepare and furnish to it a reasonable
-7-
<PAGE>
number of copies of a supplement to or an amendment of such prospectus
as may be necessary so that, as thereafter delivered to the purchasers
of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(x) use its commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of any such
registration, or the lifting of any suspension of the qualification
(or exemption from qualification) of any of the Registrable Securities
for sale in any jurisdiction;
(xi) if requested by any Initiating Holder, or any
underwriter, promptly incorporate in such registration statement or
prospectus, pursuant to a supplement or post effective amendment if
necessary, such information as the Initiating Holder and any
underwriter may reasonably request to have included therein,
including, without limitation, information relating to the "plan of
distribution" of the Registrable Securities, information with respect
to the principal amount or number of shares of Registrable Securities
being sold to such underwriter, the purchase price being paid therefor
and any other terms of the offering of the Registrable Securities to
be sold in such offering and make all required filings of any such
prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be
incorporated in such prospectus supplement or post effective
amendment;
(xii) furnish to the Holders, addressed to them, an opinion
of counsel for the Company, dated the date of the closing under the
underwriting agreement, if any, or the date of effectiveness of the
registration statement if such registration is not an underwritten
offering, and use its commercially reasonable efforts to furnish to
the Holders, addressed to them, a "cold comfort" letter signed by the
independent certified public accountants who have certified the
Company's financial statements included in such registration, covering
substantially the same matters with respect to such registration (and
the prospectus included therein) and, in the case of such accountants'
letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to underwriters
in underwritten public offerings of securities and such other matters
as the Holders may reasonably request;
(xiii) otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission,
and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least 12
months, but not more than 18 months, beginning with the first full
calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder;
(xiv) provide promptly to the Holders upon request any
document filed by the Company with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act; and
(xv) use its commercially reasonable efforts to cause all
Registrable Securities included in any registration pursuant hereto to
be listed on each securities exchange on which securities of the same
class are then listed, or, if not then listed on any securities
exchange, to be eligible for trading in any over-the-counter market or
trading system in which securities of the same class are then traded.
-8-
<PAGE>
(e) Indemnification.
---------------
(i) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors, members and partners, and each
person controlling each of the Holders, with respect to each registration which
has been effected pursuant to this Section 3, and each underwriter, if any, and
each person who controls any underwriter, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on 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 under
which they were made, not misleading, or any violation by the Company of the
Securities Act or the Exchange Act or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and will reimburse each of the Holders, each of its officers, directors, members
and partners, and each person controlling each of the Holders, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company by
the Holders or underwriter and stated to be specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities held
by it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers and each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter, each Other Stockholder and each of their
officers, directors, members and partners, and each person controlling such
Other Stockholder against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document made by such Holder,
or any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements by such Holder therein,
in light of the circumstances under which they were made, not misleading, and
will reimburse the Company and such Other Stockholders, directors, officers,
partners, members, persons, underwriters or control persons for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder and
stated to be specifically for use therein; provided, however, that the
obligations of each of the Holders hereunder and under clause (vi) below shall
be limited to an amount equal to the net proceeds to such Holder of securities
sold as contemplated herein.
(iii) Each party entitled to indemnification under this Section
3(d) (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld) and the Indemnified Party
may participate in such defense at such party's expense (unless the Indemnified
Party shall have reasonably concluded that there may be a conflict of interest
between the Indemnifying Party and the Indemnified Party in such action, in
which case the fees and expenses of one such counsel for all Indemnified Parties
shall be at the expense of the Indemnifying Party), and provided further that
the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 3 unless
the
-9-
<PAGE>
Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party (which consent shall not be unreasonably withheld or
delayed), consent to entry of any judgment or enter into any settlement which
does not include as an unconditional 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. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 3(d)
is held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue (or alleged untrue) statement of a material fact or the
omission (or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing provisions,
the provisions in such underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of the Company and
Holders is subject to the condition that, insofar as they relate to any loss,
claim, liability or damage made in a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 424(b) (the "Final
Prospectus"), such indemnity or contribution agreement shall not inure to the
benefit of any underwriter or Holder (but only if such Holder was required to
deliver such Final Prospectus) if a copy of the Final Prospectus was furnished
to the underwriter and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Securities Act.
(f) Information by the Holders. Each of the Holders holding
--------------------------
securities included in any registration shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Section 3.
(g) Holdback Agreement; Postponement. Notwithstanding the provisions
--------------------------------
of Section 3(a), if the Company shall furnish to the Initiating Holder(s) a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company it would be seriously
detrimental to the Company and its stockholders for a registration statement to
be filed, the Company's obligation to use commercially reasonable efforts to
register, qualify or comply under Section 3(a) shall be deferred for a period
not to exceed ninety (90) days from the date the Company received the
Registration Request.
(h) Assignment. The registration rights set forth in Section 3 hereof
----------
may be assigned, in whole or in part, to any transferee of Registrable
Securities (who shall be considered thereafter to be a Holder (provided that any
transferee who is not an affiliate of Stockholder shall be a Holder only with
-10-
<PAGE>
respect to such Registrable Securities so acquired and any stock of the Company
issued as a dividend or other distribution with respect to, or in exchange for
or in replacement of, such Registrable Securities) and shall be bound by all
obligations and limitations of this Agreement).
4. RULE 144 REPORTING
------------------
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
(i) make and keep public information available (as those terms are
understood and defined in Rule 144) at all times;
(ii) use its commercially reasonable efforts to file with the
Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange
Act; and
(iii) so long as there are outstanding any Registrable Securities,
furnish to each Holder, upon request, a written statement by the
Company as to its compliance with the reporting requirements of
Rule 144 and of the Securities Act and the Exchange Act, a copy
of the most recent annual or quarterly report of the Company, and
such other reports and documents so filed as such Holder may
reasonably request in availing itself of any rule or regulation
of the Commission allowing such Holder to sell any such
securities without registration.
5. INTERPRETATION OF THIS AGREEMENT
--------------------------------
(a) Directly or Indirectly. Where any provision in this
----------------------
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Georgia.
(c) Section Headings. The headings of the sections and
----------------
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof.
6. MISCELLANEOUS
-------------
(a) Notices.
-------
(i) All communications under this Agreement shall be in
writing and shall be delivered by facsimile or by hand or mailed by overnight
courier or by registered or certified mail, postage prepaid: .
(A) if to the Company, to Premiere Technologies,
Inc., The Lenox Building, Suite 400, 3399 Peachtree Road, N.E., Atlanta, Georgia
30326, Telecopy (404) 262-8450, Attention: Boland T. Jones, President, or at
such other address as it may have furnished in writing to the Stockholders;
(B) if to the VTE/VTN Stockholders, at the addresses
listed on Schedule I hereto, or at such other addresses as may have been
furnished to the Company in writing; and
-11-
<PAGE>
(C) if to the Franchisee Stockholders, at the
addresses listed in the appropriate Adoption Agreement, or at such other
addresses as may have been furnished to the Company in writing.
(ii) Any notice so addressed shall be deemed to be given:
if delivered by hand, on the date of such delivery; if mailed by courier, on the
first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of such
mailing.
(b) Reproduction of Documents. This Agreement and all documents
-------------------------
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the
Stockholder by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and the Stockholders may destroy any
original document so reproduced. The parties hereto agree and stipulate that any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Stockholders in
the regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
(c) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the
parties.
(d) Entire Agreement; Amendment and Waiver. This Agreement
--------------------------------------
constitutes the entire understanding of the parties hereto and supersedes all
prior understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and the Holders of a majority of the then
outstanding Registrable Securities.
(e) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
(f) No Inconsistent Agreements. The Company will not hereafter
--------------------------
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the Holders of Registrable Securities in this
Agreement.
(g) Remedies. Each Holder of Registrable Securities, in addition
--------
to being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(h) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended and understood that all of the rights and
privileges of each of the Holders shall be enforceable to the fullest extent
permitted by law.
-12-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
PREMIERE TECHNOLOGIES, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
VTE/VTN STOCKHOLDERS:
_____________________________________
Name:________________________________
_____________________________________
Name:________________________________
_____________________________________
Name:________________________________
_____________________________________
Name:________________________________
-13-
<PAGE>
EXHIBIT A
ADOPTION AGREEMENT
Reference is made to that certain Stock Restriction and Registration Rights
Agreement entered into as of ____________, 1997, by and among Premiere
Technologies, Inc. ("Premiere"), those stockholders of Voice-Tel Enterprises,
Inc. ("VTE") appearing as signatories thereto, those stockholders of VTN, Inc.
appearing as signatories thereto and those stockholders or other equity owners
of franchisees of VTE that execute Adoption Agreements in the form hereof (the
"Registration Rights Agreement").
WHEREAS, the undersigned is the holder of ______ shares of the common
stock, $.01 par value per share, of Premiere (the "Shares"); and
WHEREAS, Premiere has agreed to grant to the undersigned registration
rights with respect to the Shares on the terms and subject to the conditions set
forth in the Registration Rights Agreement.
NOW, THEREFORE, the undersigned hereby agrees to become a party to and be
bound by the terms and conditions of the Registration Rights Agreement,
effective as of the date hereof.
Date:________________________ _____________________________________
Name:
Address:__________________________
__________________________
__________________________
Acknowledged and Agreed:
PREMIERE TECHNOLOGIES, INC.
_____________________________
By:__________________________
Its:_________________________
<PAGE>
EXHIBIT 7
______________, 1997
Premiere Technologies, Inc.
The Lenox Building, Suite 400
3399 Peachtree Road, NE
Atlanta, Georgia 30326
Re: VTN, Inc.
Gentlemen:
This letter is delivered pursuant to Section 9.(g) of the Agreement
and Plan of Merger (the "Merger Agreement"), dated as of ______, 1997, by and
among Premiere Technologies, Inc. ("Premiere"), PTEK Merger Corporation, II
("Sub") and VTN, Inc. ("VTN").
In connection with the proposed acquisition of VTN by Premiere by
means of the merger of Sub into VTN (the "Merger") and concerning claims which I
may have against VTN or any of its Subsidiaries or Affiliates, in my capacity
as an officer or director prior to the Merger, I hereby affirm the following:
(a) VTN shall retain all liability (to the extent VTN was so
liable) for claims for salaries, wages or other compensation, employee
benefits, reimbursement of expenses or worker's compensation arising out of
employment through the effective date of the Merger;
(b) In my capacity as an officer or a director, I do not have,
and am not aware of, any claims I might have (other than those referred to
in paragraph (a) above) against VTN or any of its Subsidiaries or
Affiliates; and
(c) I hereby release VTN, and any of its Subsidiaries and
Affiliates, from any and all claims which I may now or hereafter possess
against VTN in my capacity as an officer or a director, other than those
referred to in paragraph (a) above and in Section 10.1(f) of the Merger
Agreement.
<PAGE>
By executing this letter on behalf of Premiere, you shall acknowledge
the retention by VTN of the liabilities described in paragraph (a) above.
Sincerely,
________________________________________
Signature of Officer or Director
________________________________________
Name of Officer or Director
On behalf of Premiere, I hereby acknowledge receipt of this letter as
of this ______ day of ______, 19__.
PREMIERE TECHNOLOGIES, INC.
By:_____________________________________
-2-
<PAGE>
Exhibit 8
Exhibit E
---------
VTE, VTNLP, the NAP and each Franchisee Company shall have entered into
the "Grand Solution" agreements substantially in the form attached hereto and as
reasonably satisfactory to Premiere which shall provide, among other terms and
conditions, that:
1. VTE owned service centers shall be included as "Participating
Franchisees" for purposes of electing the NAP Board of Directors and
otherwise be deemed a "Participating Franchisee" as defined in the
NAP by-laws, the Franchisee Representatives currently serving on the
Board of Directors of the NAP whose franchise rights are acquired by
Premiere shall have resigned from the NAP Board of Directors
effective upon the Closing, and the Chairman of the NAP Board of
Directors will be elected by the Board of Directors and will not be
required to be a Franchisee Representative.
2. In partial consideration for the Participating Franchisee's execution
of the Grand Solution documents, the Participating Franchisee shall
receive the opportunity to be appointed as a non-exclusive reseller
of Premiere products and services within the Participating
Franchisee's Protected Territory (which products and services
Premiere currently distributes within the Franchisee's Protected
Territory) and such Participating Franchisee shall be entitled to a
commission of ten percent (10%) on revenues actually received (less
applicable taxes). The commission will not be subject to any
royalties or system marketing fund fees.
3. Except as specifically set forth in the Franchisee's Franchise
Agreement and its Franchise NAP agreement, each Participating
Franchisee shall acknowledge and agree that it has no right to be the
exclusive reseller of VTE/VTNLP network messaging or non-messaging
services within its Protected Territory and shall otherwise have no
right to receive a royalty on non-messaging services sold or
distributed by VTE or VTNLP.
4. The parties will acknowledge and agree that as of March 31, 1997, the
Intermin Development Loan owed by the NAp to the Participating
Franchisees is $122,639; the Advance owed by the NAP to VTE equals
$500,661; and the amount to be paid by VTN to the NAP equals
$740,000.
<PAGE>
EXHIBIT 2.2
<PAGE>
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
PREMIERE TECHNOLOGIES, INC.
PTEK MERGER CORPORATION II
VTN, INC.
AND
THE STOCKHOLDERS OF VTN, INC.
DATED AS OF APRIL 2, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES.................................................................... 1
PREAMBLE................................................................... 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER............................... 1
1.1 Merger........................................................... 1
1.2 Time and Place of Closing........................................ 1
1.3 Effective Time................................................... 2
1.4 Tax-Free Reorganization.......................................... 2
ARTICLE 2 - TERMS OF MERGER................................................ 2
2.1 Articles of Incorporation........................................ 2
2.2 Code of Regulations.............................................. 2
2.3 Directors and Officers........................................... 2
ARTICLE 3 - MANNER OF CONVERTING SHARES.................................... 2
3.1 Conversion of Shares............................................. 2
3.2 Anti-Dilution Provisions......................................... 4
3.3 Shares Held by VTN or Premiere................................... 5
3.4 Dissenting Stockholders.......................................... 5
3.5 Fractional Shares................................................ 5
3.6 Stock Options.................................................... 5
ARTICLE 4 - EXCHANGE OF SHARES............................................. 6
4.1 Exchange Procedures.............................................. 6
4.2 Rights of Former VTN Stockholders................................ 7
4.3 Escrow Agreement................................................. 7
4.4 Legending of Securities; Pooling Restrictions.................... 8
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF VTN AND THE STOCKHOLDERS..... 8
5.1 Organization, Standing, and Power................................ 8
5.2 Authority of VTN; No Breach By Agreement......................... 9
5.3 Authority of Stockholders; No Breach By Agreement................ 10
5.4 Capital Stock.................................................... 10
5.5 VTN Subsidiaries; VTNLP.......................................... 11
5.6 Financial Statements............................................. 11
5.7 Absence of Undisclosed Liabilities............................... 12
5.8 Absence of Certain Changes or Events............................. 12
5.9 Tax Matters...................................................... 12
5.10 Assets........................................................... 13
5.11 Intellectual Property............................................ 15
5.12 Environmental Matters............................................ 16
5.13 Compliance with Laws............................................. 17
5.14 Labor Relations.................................................. 18
5.15 Employee Benefit Plans........................................... 18
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
5.16 Certain Contracts................................................. 20
5.17 Legal Proceedings................................................. 21
5.18 Reports........................................................... 21
5.19 Franchise Matters................................................. 21
5.20 VTN Products and Services......................................... 21
5.21 System Performance................................................ 22
5.22 Statements True and Correct....................................... 23
5.23 Accounting and Regulatory Matters................................. 23
5.24 State Takeover Laws............................................... 23
5.25 Charter Provisions................................................ 23
5.26 Investment Intention, Etc......................................... 23
5.27 Board Recommendation.............................................. 24
5.28 Amway Matters..................................................... 24
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF PREMIERE...................... 25
6.1 Organization, Standing, and Power................................. 25
6.2 Authority; No Breach By Agreement................................. 26
6.3 Capital Stock..................................................... 26
6.4 Premiere Subsidiaries............................................. 27
6.5 SEC Filings; Financial Statements................................. 28
6.6 Absence of Undisclosed Liabilities................................ 28
6.7 Absence of Certain Changes or Events.............................. 28
6.8 Compliance with Laws.............................................. 29
6.9 Legal Proceedings................................................. 29
6.10 Statements True and Correct....................................... 30
6.11 Accounting and Regulatory Matters................................. 30
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION........................ 30
7.1 Affirmative Covenants of VTN...................................... 30
7.2 Negative Covenants of VTN......................................... 30
7.3 Covenants of Premiere............................................. 32
7.4 Adverse Changes in Condition...................................... 33
7.5 Reports........................................................... 33
ARTICLE 8 - ADDITIONAL AGREEMENTS........................................... 33
8.2 Exchange Listing.................................................. 33
8.3 Applications; Antitrust Notification.............................. 33
8.4 Filings with State Offices........................................ 34
8.5 Agreement as to Efforts to Consummate............................. 34
8.6 Investigation and Confidentiality................................. 34
8.7 Press Releases.................................................... 35
8.8 Certain Actions................................................... 35
8.9 Stockholder Releases.............................................. 35
8.10 Accounting Treatment.............................................. 36
8.11 State Takeover Laws............................................... 36
8.12 Charter Provisions................................................ 36
8.13 Tax Returns....................................................... 36
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
8.14 Noncompetition, Nonsolicitation and Nondisclosure................. 36
8.15 Amway Convertible Note............................................ 38
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE............... 38
9.1 Conditions to Obligations of Each Party........................... 38
9.2 Conditions to Obligations of Premiere............................. 40
9.3 Conditions to Obligations of VTN and the Stockholders............. 42
ARTICLE 10 - INDEMNIFICATION................................................ 42
10.1 Agreement of Indemnitors to Indemnify............................. 42
10.2 Procedures for Indemnification.................................... 43
10.3 Third Party Claims................................................ 44
10.4 Limitations as to Amount.......................................... 45
10.5 Tax Effect and Insurance.......................................... 46
10.6 Subrogation....................................................... 46
10.7 Arbitration....................................................... 46
10.8 Exclusivity....................................................... 47
ARTICLE 11 - TERMINATION.................................................... 47
11.1 Termination....................................................... 47
11.2 Effect of Termination............................................. 48
ARTICLE 12 - MISCELLANEOUS.................................................. 48
12.1 Definitions....................................................... 48
12.2 Expenses.......................................................... 60
12.3 Brokers and Finders............................................... 61
12.4 Entire Agreement.................................................. 61
12.5 Amendments........................................................ 61
12.6 Waivers........................................................... 61
12.7 Assignment........................................................ 62
12.8 Notices........................................................... 62
12.9 Governing Law..................................................... 63
12.10 Counterparts...................................................... 63
12.11 Captions; Articles and Sections................................... 63
12.12 Interpretations................................................... 63
12.13 Enforcement of Agreement.......................................... 64
12.14 Severability...................................................... 64
12.15 Survival.......................................................... 64
SIGNATURES.................................................................. 65
</TABLE>
-iii-
<PAGE>
LIST OF EXHIBITS
----------------
EXHIBIT NUMBER DESCRIPTION
- - -------------- -----------
1. Form of General Escrow Agreement. ((s) 4.3).
2. Form of Specific Escrow Agreement. ((s) 5.25).
3. [Reserved]
4. Form of Registration Rights Agreement. ((s) 9.1(j)).
5. Premiere Certificate ((s) 6.11).
6. [Reserved]
7. Form of Claims Letter ((s) 9.2(g)).
8. Grand Solution Documents ((s) 9.2(n))
-iv-
<PAGE>
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of April 2, 1997, by and among PREMIERE TECHNOLOGIES, INC. ("Premiere"),
a Georgia corporation; PTEK MERGER CORPORATION II ("Sub"), an Ohio corporation
and wholly-owned subsidiary of Premiere; VTN, INC. ("VTN"), an Ohio corporation;
and the stockholders of VTN set forth on the signature pages hereof (each a
"Stockholder" and collectively the "Stockholders").
PREAMBLE
--------
This Agreement provides for the acquisition of VTN by Premiere pursuant to
the merger of Sub with and into VTN. At the effective time of such merger, the
outstanding shares of the capital stock of VTN shall be converted into shares of
the common stock of Premiere (except as provided herein). As a result,
stockholders of VTN shall become stockholders of Premiere and VTN shall continue
to conduct its business and operations. The transactions described in this
Agreement are subject expiration of the required waiting period under the HSR
Act and the satisfaction of certain other conditions described in this
Agreement. It is the intention of the parties to this Agreement that the Merger
for federal income tax purposes shall qualify as a "reorganization" within the
meaning of Section 368(a) of the Code, and for accounting purposes shall qualify
for treatment as a pooling of interests.
Certain terms used in this Agreement are defined in Section 12.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the parties agree
as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
--------------------------------
1.1 MERGER. Subject to the terms and conditions of this Agreement, at
------
the Effective Time, Sub shall be merged with and into VTN in accordance with the
provisions of Section 1701.78 of the OGCL and with the effect provided in
Section 1701.82 of the OGCL (the "Merger"). VTN shall be the Surviving
Corporation resulting from the Merger and shall continue to be governed by the
Laws of the State of Ohio. The Merger shall be consummated pursuant to the terms
of this Agreement, which has been approved and adopted by the respective Boards
of Directors of VTN, Sub and Premiere.
1.2 TIME AND PLACE OF CLOSING. The closing of the transactions
-------------------------
contemplated hereby (the "Closing") will take place at 9:00 A.M. on the date
that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the Parties,
acting through their authorized officers, may mutually agree. The Closing
<PAGE>
shall be held at the offices of Alston & Bird LLP, Atlanta, Georgia, or at such
other location as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated by
--------------
this Agreement shall become effective on the date and at the time the
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Ohio (the "Effective Time").
1.4 TAX-FREE REORGANIZATION. The Parties intend to adopt this Agreement
-----------------------
as a tax-free plan of reorganization and to consummate the Merger in accordance
with the provisions of Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code. In
this regard, Premiere represents that it currently intends, and that on the
Effective Date it will intend, to continue VTN's historic business or use a
significant portion of VTN's business assets in a business within the meaning of
Treasury Regulation Section 1.368-1(d).
ARTICLE 2
TERMS OF MERGER
---------------
2.1 ARTICLES OF INCORPORATION. The Articles of Incorporation of VTN
-------------------------
in effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation until duly amended or repealed.
2.2 CODE OF REGULATIONS. The Code of Regulations of VTN in effect
-------------------
immediately prior to the Effective Time shall be the Code of Regulations of the
Surviving Corporation until duly amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of VTN in office immediately
----------------------
prior to the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of VTN in office immediately prior to the Effective
Time, together with such additional persons as may thereafter be elected, shall
serve as the officers of the Surviving Corporation from and after the Effective
Time in accordance with the Bylaws of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
---------------------------
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article 3,
--------------------
at the Effective Time, by virtue of the Merger and without any action on the
part of Premiere, VTN, or the stockholders of the foregoing, the shares of the
following corporations shall be converted as follows:
-2-
<PAGE>
(a) Each share of Premiere Common Stock issued and outstanding immediately
prior to the Effective Time shall remain issued and outstanding from and after
the Effective Time.
(b) Each share of Sub Common Stock issued and outstanding immediately
prior to the Effective time shall cease to be outstanding and shall be converted
into one share of VTN Common Stock.
(c) Each share of VTN Common Stock (excluding shares held by any VTN
Entity or any Premiere Entity, and excluding shares held by stockholders who
perfect their statutory dissenters' rights as provided in Section 3.4) issued
and outstanding immediately prior to the Effective Time shall cease to be
outstanding and shall be converted into and exchanged for:
(i) the number of shares of Premiere Common Stock (rounded to the
nearest hundredth of a share) determined by dividing the product of (A)
either (1) .77 if the Amway Convertible Note is converted or (2) .71 if
the Amway Convertible Note is not converted and (B) the Per Share Purchase
Price, by the Average Closing Price (the "Firm Exchange Ratio");
(ii) (subject to the provisions of Section 4.3) the number of shares
of Premiere Common Stock (rounded to the nearest hundredth of a share)
determined by dividing the product of .1 and the Per Share Purchase Price
by the Average Closing Price (the "General Escrow Exchange Ratio");
(iii) (subject to the provisions of Section 4.3) the number of shares
of Premiere Common Stock (rounded to the nearest hundredth of a share)
determined by dividing the product of (A) either (1) .13 if the Amway
Convertible Note is converted or (2) .19 if the Amway Convertible Note is
not converted and (B) the Per Share Purchase Price, by the Average Closing
Price (the "Specific Escrow Exchange Ratio" and, together with the Firm
Exchange Ratio and the General Exchange Ratio, the "Exchange Ratio").
(d) For purposes of the calculation under 3.1(c):
(i) the Per Share Purchase Price shall mean that value obtained by
dividing the VTN Purchase Price by the number of shares of VTN Common
Stock issued and outstanding immediately prior to the Effective Time;
(ii) the VTN Purchase Price shall mean $5,320,000, less (A) the
--------- ----
positive amount, if any, by which the aggregate level of Consolidated
Indebtedness of VTN at November 30, 1996 (excluding the Amway Convertible
Note, but including $740,000 due to the NAP pursuant to the Grand Solution
Documents) exceeds $1,431,000, (B) the positive amount, if any, by which
the aggregate amount expended, incurred or committed by VTN to purchase or
redeem any shares of VTN
-3-
<PAGE>
Common Stock after November 30, 1996 (including purchases and
redemptions contemplated in Section 9.2(k)) exceed $288,000, (C) the
positive amount, if any, by which the aggregate amounts expended,
incurred or committed by VTN and VTNLP or any of their Subsidiaries
from May 1, 1995 though and including the Effective Time for fees and
expenses of attorneys, accountants, investment bankers, and other
consultants and travel, entertainment, printing and other out of
pocket costs associated with the actions taken and transactions
considered pursuant to the engagement by VTN of Salomon Brothers Inc.
described on Schedule 3.1(d) of the VTN Disclosure Memorandum,
including, without limitation, the transactions contemplated with the
parties described on Schedule 3.1(d) of the VTN Disclosure Memorandum,
exceed $1,500,000, (D) except to the extent specifically reflected in
the adjustments to the VTN Purchase Price pursuant to clauses (B) or
(C) above or to the extent specifically reflected in the adjustments
to the VTN Purchase Price under Section 3.1(d) of the VTN Merger
Agreement, the aggregate amount paid, payable or otherwise incurred or
to be incurred in connection with satisfying the obligations of VTN
and the Stockholders or the conditions precedent to the obligation of
Premiere, in each case, whether contained in this Agreement or in any
agreement, certificate or instrument entered into or delivered in
connection herewith, including, without limitation, satisfying the
conditions set forth in Section 9.2(i) and resolving the claim
referred to in Section 92(m), and (E) .23 times the aggregate
principal balance of the Amway Convertible Note if the Amway
Convertible Note is not converted; and
(iii) the Average Closing Price shall mean the average of
the daily last sale prices for the shares of Premiere Common Stock for
the twenty (20) consecutive trading days on which such shares are
actually traded as over-the-counter securities and quoted on the
Nasdaq National Market (as reported by The Wall Street Journal or, if
not reported thereby, any other authoritative source selected by
Premiere) ending at the close of trading on the second trading day
immediately preceding the Closing Date) provided, that for purposes of
this calculation, the Average Closing Price shall be deemed to equal
(i) $30.50 in the event the Average Closing Price is greater than
$30.50 or (ii) $22.50 in the event the Average Closing Price is less
than $22.50 (together, $30.50 and $22.50 are referred to as the
"Average Closing Price Limitations").
3.2. ANTI-DILUTION PROVISIONS. In the event Premiere changes the
------------------------
number of shares of Premiere Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date therefor (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
shall be after the Exchange Ratio has been determined in accordance with Section
31(c). In that event, prior to the Effective Time, (i) the Exchange Ratio and
the Average Closing Price Limitations shall be proportionately to the effect of
the stock split, stock dividend or recapitalization on the outstanding shares of
Premiere Common Stock adjusted, and (ii) if necessary, the anticipated Effective
Time shall be postponed for an appropriate period of time agreed upon by the
parties in
-4-
<PAGE>
order for the Average Closing Price to reflect the market effect of
such stock split, stock dividend, or similar recapitalization. Notwithstanding
the foregoing, Premiere covenants not to effect a stock split, stock dividend or
recapitalization prior to the Effective Time.
3.3 SHARES HELD BY VTN OR PREMIERE. Each of the shares of VTN Common
------------------------------
Stock held by any VTN Entity or by any Premiere Entity shall be canceled and
retired at the Effective Time and no consideration shall be issued in exchange
therefor.
3.4 DISSENTING STOCKHOLDERS. Each of the Stockholders agrees that it
-----------------------
will not seek to assert dissenters' rights to which such Stockholder otherwise
would be entitled.
3.5 FRACTIONAL SHARES. Notwithstanding any other provision of this
-----------------
Agreement, each holder of shares of VTN Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of Premiere Common Stock (after taking into account all certificates delivered
by such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of Premiere Common Stock
multiplied by the Average Closing Price used to establish the Exchange Ratio. No
such holder will be entitled to dividends, voting rights, or any other rights as
a stockholder in respect of any fractional shares.
3.6 STOCK OPTIONS.
-------------
(a) As of the Effective Time, each of the stock options listed in
Section 5.4(b) of the VTN Disclosure Memorandum (the "VTN Stock Options") which
is outstanding as of the date hereof and has not expired as of the Effective
Time shall be assumed by Premiere and converted into an option (or a new
substitute option shall be granted) to purchase the number of shares of Premiere
Common Stock (rounded down to the nearest whole share) equal to the number of
shares of VTN Common Stock subject to the VTN Stock Option multiplied by the
Exchange Ratio at an exercise price per share of Premiere Common Stock (rounded
to the nearest penny) equal to the former exercise price per share of VTN Common
Stock under such option immediately prior to the Effective Time divided by the
Exchange Ratio; provided, however, that in the case of any VTN Stock Option to
-------- -------
which Section 421 of the Code applies by reason of its qualification under
Section 422 of the Code, the conversion formula shall be adjusted, if necessary,
to comply with Section 424(a) of the Code, provided however, no adjustment shall
be made which could, in the reasonable opinion of Arthur Andersen LLP, preclude
pooling of interests accounting treatment for the Merger. Except as provided
above, the converted or substituted options for Premiere Common Stock shall be
subject to substantially the same terms and conditions (including, without
limitation, expiration date, vesting and exercise provisions) as were applicable
to VTN Stock Options immediately prior to the Effective Time. Premiere
acknowledges that all outstanding VTN Stock Options specifically disclosed
herein will become fully vested immediately prior to the Effective Time in
accordance with the terms of the agreements relating thereto, except to the
-------------
extent that any such vesting would preclude pooling of interest accounting
- - --------------------------------------------------------------------------
treatment for the Merger.
- - ------------------------
-5-
<PAGE>
(b) Premiere agrees that (i) within fifteen (15) days after the Effective
Time it will cause to be filed one or more registration statements on Form S-8
under the Securities Act, or amendments to its existing registration statements
on Form S-8 or amendments to such other registration statements as may be
available, in order to register the Premiere Common Stock issuable upon exercise
of the aforesaid converted VTN Stock Options (the "Underlying Stock"), provided,
however, that no such Form S-8 is required to be filed if Premiere has
registered sufficient shares under its current S-8 to cover all the Underlying
Stock plus all shares underlying stock options currently outstanding and
issuable not otherwise exempt from registration, and (ii) at or prior to the
Effective Time, Premiere shall take all corporate action necessary to reserve
for issuance a sufficient number of shares of Premiere Common Stock for delivery
upon exercise of the options substituted pursuant to this Section 3.6. The
consummation of the Merger shall not be treated as a termination of employment
for purposes of the VTN Option Plans.
ARTICLE 4
EXCHANGE OF SHARES
------------------
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Premiere
-------------------
and VTN shall cause SunTrust, the exchange agent selected by Premiere (the
"Exchange Agent"), to mail to each holder of record of a certificate or
certificates which represented shares of VTN Common Stock immediately prior to
the Effective Time (the "Certificates") or, at the election of the respective
Stockholders, deliver to the Stockholder or his or its duly appointed
representative at the Closing appropriate transmittal materials and instructions
(which shall specify that delivery shall be effected, and risk of loss and title
to such Certificates shall pass, only upon proper delivery of such Certificates
to the Exchange Agent). The Certificate or Certificates of VTN Common Stock so
delivered shall be duly endorsed as the Exchange Agent may require. In the event
of a transfer of ownership of shares of VTN Common Stock represented by
Certificates that are not registered in the transfer records of VTN, the
consideration provided in Section 3.1 may be issued to a transferee if the
Certificates representing such shares are delivered to the Exchange Agent,
accompanied by all documents required to evidence such transfer and by evidence
reasonably satisfactory to the Exchange Agent that any applicable stock transfer
taxes have been paid. If any Certificate shall have been lost, stolen, mislaid
or destroyed, upon receipt of (i) an affidavit of that fact from the holder
claiming such Certificate to be lost, mislaid, stolen or destroyed, (ii) such
bond, security or indemnity as Premiere and the Exchange Agent may reasonably
require and (iii) any other documents necessary to evidence and effect the bona
fide exchange thereof, the Exchange Agent shall issue to such holder the
consideration into which the shares represented by such lost, stolen, mislaid or
destroyed Certificate shall have been converted. The Exchange Agent may
establish such other reasonable and customary rules and procedures in connection
with its duties as it may deem appropriate. On or promptly following the
Effective Time, each holder of shares of VTN Common Stock (other than shares to
be canceled pursuant to Section 3.3 or as to which statutory dissenters' rights
have been perfected as provided in Section 3.4) issued and outstanding at the
Effective Time shall surrender the Certificate or Certificates representing such
shares to the Exchange Agent and shall promptly upon surrender thereof (and at
the Closing if so requested by the Stockholder) receive in exchange therefor the
consideration provided in Section 3.1, together with all undelivered dividends
or distributions in respect of such
-6-
<PAGE>
shares (without interest thereon) pursuant to Section 4.2. To the extent
required by Section 3.5, each holder of shares of VTN Common Stock issued and
outstanding at the Effective Time also shall receive, upon surrender of the
Certificate or Certificates, cash in lieu of any fractional share of Premiere
Common Stock to which such holder may be otherwise entitled (without interest).
Premiere shall not be obligated to deliver the certificates for or other
consideration to which any former holder of VTN Common Stock is entitled as a
result of the Merger until such holder surrenders such holder's Certificate or
Certificates for exchange as provided in this Section 4.1. Any other provision
of this Agreement notwithstanding, neither Premiere nor the Exchange Agent shall
be liable to a holder of VTN Common Stock for any amounts paid or property
delivered in good faith to a public official pursuant to any applicable
abandoned property, escheat or similar Law. Adoption of this Agreement by the
stockholders of VTN shall constitute ratification of the appointment of the
Exchange Agent.
4.2 RIGHTS OF FORMER VTN STOCKHOLDERS. At the Effective Time, the
---------------------------------
stock transfer books of VTN shall be closed as to holders of VTN Common Stock
immediately prior to the Effective Time and no transfer of VTN Common Stock by
any such holder shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 41, each Certificate
theretofore representing shares of VTN Common Stock (other than shares to be
canceled pursuant to Sections 33 and 34) shall from and after the Effective
Time represent for all purposes only the right to receive the consideration
provided in Sections 31 and 35 in exchange therefor,. To the extent permitted
by Law, former stockholders of record of VTN shall be entitled to vote after the
Effective Time at any meeting of Premiere stockholders the number of whole
shares of Premiere Common Stock into which their respective shares of VTN Common
Stock are converted, regardless of whether such holders have exchanged their
Certificates for certificates representing Premiere Common Stock in accordance
with the provisions of this Agreement. Whenever a dividend or other distribution
is declared by Premiere on the Premiere Common Stock, the record date for which
is at or after the Effective Time, the declaration shall include dividends or
other distributions on all shares of Premiere Common Stock issuable pursuant to
this Agreement, but no dividend or other distribution payable to the holders of
record of Premiere Common Stock as of any time subsequent to the Effective Time
shall be delivered to the holder of any Certificate until such holder surrenders
such Certificate for exchange as provided in Section 4.1. However, upon
surrender of such Certificate, both the Premiere Common Stock certificate
(together with all such undelivered dividends or other distributions without
interest) and any undelivered dividends and cash payments payable hereunder
(without interest) shall be delivered and paid with respect to each share
represented by such Certificate.
4.3 ESCROW AGREEMENT. In connection with the Closing, Premiere and
----------------
the Stockholders shall have executed and delivered to the other an escrow
agreement (the "General Escrow Agreement"), which shall be in the form of
Exhibit 1 and another escrow agreement (the "Specific Escrow Agreement"), which
shall be in the form of Exhibit 2. The shares of Premiere Common Stock to be
issued pursuant to Section 31(c)(ii) shall be issued and held by SunTrust, as
escrow agent pursuant to the terms of the General Escrow Agreement, and the
shares of Premiere Common Stock to be issued pursuant to Section 3.1(c)(iii)
shall be issued and held by SunTrust, as escrow agent pursuant to the terms of
the Specific Escrow Agreement..
-7-
<PAGE>
4.4 LEGENDING OF SECURITIES; POOLING RESTRICTIONS. Each certificate
---------------------------------------------
for Premiere Common Stock to be issued to the Stockholders as part of the
Purchase Price shall bear the following legend:
"The securities represented hereby have not been registered under the
Securities Act of 1933, as amended, and may not be offered, sold,
transferred or otherwise disposed of unless registered with the Securities
and Exchange Commission of the United States and the securities regulatory
authorities of applicable states or unless an exemption from such
registration is available."
Because the Merger will be accounted for using the pooling-of-interests method
of accounting, each Stockholder agrees that such Stockholder will not sell,
transfer or otherwise reduce such Stockholder's risks relative to the shares of
VTN Common Stock held by such Stockholder, except as contemplated by this
Agreement, and will not sell, transfer or otherwise reduce such Stockholder's
risk relative to the shares of Premiere Common Stock to be received by each
Stockholder upon consummation of the Merger until such time as Premiere notifies
the undersigned that the requirements of SEC Accounting Series Release Nos. 130
and 135 ("ASR 130 and 135") have been met. Each Stockholder understands that
ASR 130 and 135 relate to publication of financial results of post-Closing
combined operations of Premiere and VTN covering a period of at least 30 days of
post-Closing combined operating results. Premiere agrees that it will publish
such results within 45 days after the end of the first fiscal quarter of
Premiere containing the required period of post-Closing combined operations and
that it will notify the undersigned promptly following such publication.
Premiere shall be entitled to place restrictive legends on the shares of
Premiere Common Stock issued to the Stockholders pursuant to the Merger to
enforce the foregoing restrictions.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF VTN AND THE STOCKHOLDERS
----------------------------------------------------------
The Stockholders and VTN, jointly and severally, hereby represent and
warrant to Premiere as follows (provided that Amway, as a Stockholder of VTN,
makes only the representations and warranties in Section 5.28 and unless
otherwise noted, for purposes of this Article 5, the term "Stockholder" does not
include Amway):
5.1 ORGANIZATION, STANDING, AND POWER. VTN is a corporation duly
---------------------------------
organized, validly existing, and in good standing under the Laws of the State of
Ohio, and has the corporate power and authority to carry on its business as now
conducted and to own, lease and operate its Assets. VTN is duly qualified or
licensed to transact business as a foreign corporation in good standing in the
States of the United States and foreign jurisdictions where the character of its
Assets or the nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have, individually or in the
aggregate, a VTN Material Adverse Effect. The minute book and other
organizational documents for VTN have been made available to Premiere for its
review and, except as disclosed in Section 5.1 of the VTN Disclosure Memorandum,
are true and complete in
-8-
<PAGE>
all material respects as in effect as of the date of this Agreement and
accurately reflect in all material respects all amendments thereto and all
proceedings of the Board of Directors and stockholders thereof.
5.2 AUTHORITY OF VTN; NO BREACH BY AGREEMENT.
----------------------------------------
(a) VTN has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery,
and performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part
of VTN, subject to the approval of this Agreement by the holders of a
majority of the outstanding shares of VTN Common Stock, which is the only
stockholder vote required for approval of this Agreement and consummation
of the Merger by VTN. Subject to such requisite stockholder approval, this
Agreement represents a legal, valid, and binding obligation of VTN,
enforceable against VTN in accordance with its terms (except in all cases
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that
the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which
any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by VTN,
nor the consummation by VTN of the transactions contemplated hereby, nor
compliance by VTN with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of VTN's Certificate of
Incorporation or Bylaws or the certificate or agreement of limited
partnership of VTNLP or any resolution adopted by the board of directors or
the stockholders or the partners of any VTN Entity, or (ii) except as
disclosed in Section 5.2 of the VTN Disclosure Memorandum, constitute or
result in a Default under, or require any Consent pursuant to, or result in
the creation of any Lien on any Asset of any VTN Entity under, any Contract
or Permit of any VTN Entity, where such Default or Lien, or any failure to
obtain such Consent, is reasonably likely to have, individually or in the
aggregate, a VTN Material Adverse Effect, or, (iii) subject to receipt of
the requisite Consents referred to in Section 9.1(b), constitute or result
in a Default under, or require any Consent pursuant to, any Law or Order
applicable to any VTN Entity or any of their respective material Assets
(including any Premiere Entity or any VTN Entity becoming subject to or
liable for the payment of any Tax or any of the Assets owned by any
Premiere Entity or any VTN Entity being reassessed or revalued by any
Taxing authority).
(c) Other than filing of a Certificate of Merger with the
Secretary of State of the State of Ohio, no notice to, filing with, or
Consent of, any public body or authority is necessary for the consummation
by VTN of the Merger and the other transactions contemplated in this
Agreement.
-9-
<PAGE>
5.3 AUTHORITY OF STOCKHOLDERS; NO BREACH BY AGREEMENT.
-------------------------------------------------
(a) Each of the Stockholders has the absolute and unrestricted
right, power, authority, and capacity to execute and deliver this Agreement
and the Stockholders' Closing Documents and to perform its obligations
under this Agreement and the Stockholders' Closing Documents. This
Agreement represents a legal, valid, and binding obligation of each
Stockholder, enforceable against each Stockholder in accordance with its
terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the
equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
Upon the execution and delivery by the Stockholders of the Stockholders'
Closing Documents, the Stockholders' Closing Documents will constitute the
legal, valid, and binding obligations of each Stockholder, enforceable
against each Stockholder in accordance with their respective terms.
(b) Neither the execution and delivery of this Agreement by any
Stockholder, nor the consummation by any Stockholder of the transactions
contemplated hereby, nor compliance by any Stockholder with any of the
provisions hereof, will (i) conflict with or result in a breach of any
provision of VTN's Certificate of Incorporation or Bylaws or the
certificate or agreement of limited partnership of VTNLP or the governing
instruments of any Stockholder that is not a natural person, or (ii) except
as disclosed in Section 5.3 of the VTN Disclosure Memorandum, constitute or
result in a Default under, or require any Consent pursuant to, or result in
the creation of any Lien on any Asset of any VTN Entity under, any Contract
or Permit of any VTN Entity, where such Default or Lien, or any failure to
obtain such Consent, is reasonably likely to have, individually or in the
aggregate, a VTN Material Adverse Effect, or, (iii) subject to receipt of
the requisite Consents referred to in Section 9.1(b), violate any Law or
Order applicable to any Stockholder or to any VTN Entity or any of their
respective material Assets.
(c) No notice to, filing with, or Consent of, any public body or
authority is necessary for the consummation by the Stockholders of the
transactions contemplated in this Agreement.
5.4 CAPITAL STOCK
-------------
(a) The authorized capital stock of VTN consists of 750 shares
of VTN Common Stock, of which (i) 625 are designated as Class A shares and
of which 227.50 shares are issued and outstanding as of the date of this
Agreement and not more than 305.75 (assuming the VTN Options are not
exercised before the Effective Time) shares will be issued and outstanding
at the Effective Time and (ii) 125 shares are designated as Class B shares
of which 0 shares are issued and outstanding as of the date of this
Agreement and no shares will be issued and outstanding at the Effective
Time. All of the issued and outstanding shares of capital stock of VTN are
duly and validly issued and outstanding and are fully paid and
nonassessable. None of the outstanding shares of capital stock of VTN
-10-
<PAGE>
has been issued in violation of any preemptive rights of the current or
past stockholders of VTN or of the Securities Laws or any state blue sky or
securities Laws.
(b) Except as set forth in Section 5.4(a) or as disclosed in
Section 5.4(b) of the VTN Disclosure Memorandum, there are no shares of
capital stock or other equity securities of VTN outstanding and no
outstanding Equity Rights relating to the capital stock of VTN. Each of the
Stockholders is the owner of all right, title and interest (legal and
beneficial) in and to that number or amount of Shares set forth next to his
name in Section 5.4(a) of the VTN Disclosure Memorandum, free and clear of
all Liens. Collectively, the Stockholders own all right, title and interest
(legal and beneficial) in and to all of the issued and outstanding shares
of VTN's capital stock. Except as specifically contemplated by this
Agreement, no Person has any Contract or any right or privilege (whether
pre-emptive or contractual) capable of becoming a Contract for the purchase
from the Stockholders of any of the Shares, or any Contract or Equity Right
for the purchase, subscription or issuance of any securities of VTN.
5.5 VTN SUBSIDIARIES; VTNLP. VTN has no Subsidiaries. VTNLP is a
-----------------------
limited partnership validly organized under the laws of the State of Delaware.
VTN has disclosed in Section 5.5 of the VTN Disclosure Memorandum each
jurisdiction in which VTNLP is qualified and/or licensed to transact business.
VTN is the sole general partner of VTNLP and MPI is the sole limited partner of
VTNLP. No other partnership interest is or may become required to be issued by
reason of any Equity Rights, and there are no Contracts by which VTNLP is bound
to issue additional units of general or limited partner interest or other equity
interests or Equity Rights or by which VTN is or may be bound to transfer any
units of general or limited partner interest or other equity interests of VTNLP.
There are no Contracts relating to the rights of VTN or MPI to vote or to
dispose of any units of general or limited partner interest or other equity
interests. All of the units of general partner interests in VTNLP are owned by
VTN and all the units of limited partner interests in VTNLP are owned by MPI,
units of general or limited partner interest or other equity interests are fully
paid and nonassessable and are so owned free and clear of any Lien. Except as
disclosed in Section 5.5 of the VTN Disclosure Memorandum, VTNLP is duly
organized and validly existing under the Laws of the Stateof Delaware, and has
the power and authority necessary for it to own, lease, and operate its Assets
and to carry on its business as now conducted. VTNLP is duly qualified or
licensed to transact business as a foreign limited partnership in good standing
in the States of the United States and foreign jurisdictions where the character
of its Assets or the nature or conduct of its business requires it to be so
qualified or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have, individually or in
the aggregate, a VTN Material Adverse Effect. The minute book and other
organizational documents for VTNLP have been made available to Premiere for its
review, and, except as disclosed in Section 5.5 of the VTN Disclosure
Memorandum, are true and complete in all material respects as in effect as of
the date of this Agreement and accurately reflect in all material respects all
amendments thereto and all proceedings of the partners thereof.
5.6 FINANCIAL STATEMENTS. Each of the VTN Financial Statements
--------------------
(including, in each case, any related notes) was prepared in accordance with
GAAP applied on a consistent
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<PAGE>
basis throughout the periods involved (except as may be indicated in the notes
to such financial statements), and fairly presented in all material respects the
consolidated financial position of VTN and its Subsidiaries as at the respective
dates and the consolidated results of operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or are not
expected to be material in amount or effect.
5.7. ABSENCE OF UNDISCLOSED LIABILITIES. No VTN Entity has any
----------------------------------
Liabilities that are reasonably likely to have, individually or in the
aggregate, a VTN Material Adverse Effect, except Liabilities which are accrued
or reserved against in the consolidated balance sheet of VTN as of December 31,
1996 included in the VTN Financial Statements delivered prior to the date of
this Agreement or reflected in the notes thereto. No VTN Entity has incurred or
paid any Liability since December 31, 1996, except for such Liabilities incurred
or paid (i) in the ordinary course of business consistent with past business
practice and which are not reasonably likely to have, individually or in the
aggregate, a VTN Material Adverse Effect or (ii) in connection with the
transactions contemplated by this Agreement. Except as disclosed in Section 5.7
of the VTN Disclosure Memorandum, no VTN Entity is directly or indirectly
liable, by guarantee, indemnity, or otherwise, upon or with respect to, or
obligated, by discount or repurchase agreement or in any other way, to guarantee
or assume any Liability of any Person for any amount in excess of $10,000.
5.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1996,
------------------------------------
except as disclosed in the VTN Financial Statements delivered prior to the date
of this Agreement or as disclosed in Section 5.8 of the VTN Disclosure
Memorandum, (i) there have been no events, changes, or occurrences which have
had, or are reasonably likely to have, individually or in the aggregate, a VTN
Material Adverse Effect, and (ii) the VTN Entities have not taken any action, or
failed to take any action, prior to the date of this Agreement, which action or
failure, if taken after the date of this Agreement, would represent or result in
a material breach or violation of any of the covenants and agreements of VTN
provided in Article 7.
5.9 TAX MATTERS.
-----------
(a) All Tax Returns required to be filed by or on behalf of any
of the VTN Entities have been timely filed (including without limitation
Tax Returns filed in accordance with extensions granted) or requests for
extensions have been timely filed, granted, and have not expired for
periods ended on or before December 31, 1996, and on or before the date of
the most recent fiscal year end immediately preceding the Effective Time,
and all Tax Returns filed are complete and accurate in all material
respects. All Taxes shown on filed Tax Returns have been paid. As of the
date of this Agreement, there is no audit examination, deficiency, or
refund Litigation with respect to any Taxes, except as reserved against in
the VTN Financial Statements delivered prior to the date of this Agreement
or as disclosed in Section 5.9 of the VTN Disclosure Memorandum. VTN's
federal income Tax Returns have been audited by the IRS and accepted
through December 31, 1991. All Taxes and other Liabilities due with respect
to completed and settled examinations or concluded Litigation have been
paid. There are no Liens with respect to Taxes upon any of the Assets
-12-
<PAGE>
of the VTN Entities, except for any such Liens which are not reasonably
likely to have a VTN Material Adverse Effect.
(b) None of the VTN Entities has executed an extension or waiver
of any statute of limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under
examination by the Internal Revenue Service or other applicable taxing
authorities) that is currently in effect.
(c) The provision for any Taxes due or to become due for any of
the VTN Entities for the period or periods through and including the date
of the most recent VTN Financial Statements that has been made and is
reflected on such VTN Financial Statements is sufficient to cover all such
Taxes.
(d) Deferred Taxes of the VTN Entities have been provided for in
accordance with GAAP.
(e) None of the VTN Entities is a party to any Tax allocation or
sharing agreement and none of the VTN Entities has been a member of an
affiliated group filing a consolidated federal income Tax Return (other
than a group the common parent of which was VTN) has any Liability for
Taxes of any Person (other than VTN and its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or
foreign Law) as a transferee or successor or by Contract or otherwise.
(f) Each of the VTN Entities is in compliance with, and its
records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information
reporting and Tax withholding requirements under federal, state, and local
Tax Laws.
(g) Except as disclosed in Section 5.9 of the VTN Disclosure
Memorandum, none of the VTN Entities has made any payments, is obligated to
make any payments, or is a party to any Contract that could obligate it to
make any payments that could be disallowed as a deduction under Section
280G or 162(m) of the Internal Revenue Code.
(h) Except as disclosed in Section 5.9 of the VTN Disclosure
Memorandum, no VTN Entity has or has had in any foreign country a permanent
establishment, as defined in any applicable tax treaty or convention
between the United States and such foreign country.
5.10 ASSETS.
------
(a) Except as disclosed in Section 5.10 of the VTN Disclosure
Memorandum or as disclosed or reserved against in the VTN Financial
Statements delivered prior to the date of this Agreement, the VTN Entities
have good and marketable title, free and clear of all Liens, to all of
their respective Assets, except for any such Liens or other defects of
title which are not reasonably likely to have a VTN Material Adverse
Effect. All tangible
-13-
<PAGE>
properties used in the businesses of the VTN Entities are in good
condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with VTN's past practices.
(b) All items of inventory of the VTN Entities reflected on the
most recent balance sheet included in the VTN Financial Statements
delivered prior to the date of this Agreement and prior to the Effective
Time consisted and will consist, as applicable, of items of a quality and
quantity usable and saleable in the ordinary course of business and conform
to generally accepted standards in the industry in which the VTN Entities
are a part.
(c) The accounts receivable of the VTN Entities as set forth on
the most recent balance sheet included in the VTN Financial Statements
delivered prior to the date of this Agreement or arising since the date
thereof are valid and genuine; have arisen solely out of bona fide sales
and deliveries of goods, performance of services and other business
transactions in the ordinary course of business consistent with past
practice; are not subject to valid defenses, set-offs or counterclaims; and
are collectible within 90 days after billing at the full recorded amount
thereof less, in the case of accounts receivable appearing on the most
recent balance sheet included in the VTN Financial Statements delivered
prior to the date of this Agreement, the recorded allowance for collection
losses on such balance sheet. The allowance for collection losses on such
balance sheet has been determined in accordance with GAAP.
(d) All Assets which are material to VTN's business on a
consolidated basis, held under leases or subleases by any of the VTN
Entities, are held under valid Contracts enforceable in accordance with
their respective terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other
Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which
any proceedings may be brought) and each such Contract is in full force and
effect.
(e) The VTN Entities currently maintain insurance similar in
amounts, scope, and coverage to that maintained by other peer
organizations. None of the VTN Entities has received notice from any
insurance carrier that (i) any policy of insurance will be canceled or that
coverage thereunder will be reduced or eliminated, or (ii) premium costs
with respect to such policies of insurance will be substantially increased.
There are presently no claims for amounts exceeding in any individual case
$10,000 pending under such policies of insurance and no notices of claims
in excess of such amounts have been given by any VTN Entity under such
policies.
(f) The Assets of the VTN Entities include all Assets required
to operate the business of the VTN Entities as presently conducted.
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5.11 INTELLECTUAL PROPERTY.
---------------------
(a) Section 5.11(a)(i) of the VTN Disclosure Memorandum sets
forth (i) a brief description of each VTN Intellectual Property Right, and
(ii) with respect to each VTN Intellectual Property Right registered or
capable of registration with any Regulatory Authority or for which an
application for registration has been filed with any Regulatory Authority,
the names of the jurisdictions covered by the applicable registration or
application, if any. Section 5.11(a)(ii) of the VTN Disclosure Memorandum
identifies and provides a brief description of each Intellectual Property
Right licensed to any VTN Entity by any Person (except for any Intellectual
Property Right that is licensed to any VTN Entity under any third party
software license generally available to the public at a cost of less than
Ten Thousand Dollars ($10,000)), and identifies the license agreement under
which such Intellectual Property Right is being licensed to such VTN
Entity. No VTN Entity is in Default under any such license agreements.
Except as set forth in Section 5.11(a)(iii) of the VTN Disclosure
Memorandum, the VTN Entities have, and following consummation of the
transactions contemplated hereby, shall have valid and marketable title to
all VTN Intellectual Property Rights used in or reasonably necessary for
the conduct of their business free and clear of all liens and other
encumbrances, except for third party Intellectual Property Rights licensed
to any such VTN Entity, as to which it has a valid right to use with
respect to such VTN Intellectual Property Rights. No present or former
employee or owner of any VTN Entity and no other Person owns or has any
proprietary, financial or other interest, direct or indirect, in whole or
in part, in any Intellectual Property Right which any VTN Entity owns,
possesses or uses in its operations as now or heretofore conducted. All
personnel, including employees, agents, consultants, and contractors, who
have contributed to or participated in the conception and development of
any VTN Intellectual Property Right (i) have been party to a "work-for-
hire" relationship with a VTN Entity that has accorded the VTN Entity full,
effective, and exclusive original ownership of all tangible and intangible
property thereby arising with respect to such VTN Intellectual Property
Right, and/or (ii) have executed appropriate instruments of assignment or
license in favor of a VTN Entity as assignee that have conveyed to a VTN
Entity full, effective, and exclusive ownership or use of all tangible and
intangible property thereby arising with respect to such VTN Intellectual
Property Right. Except as set forth in Section 5.11(a)(iv) of the VTN
Disclosure Memorandum, no VTN Entity is obligated to make any material
payment to any Person for the use of any VTN Intellectual Property Right.
Except as set forth in Section 5.11(a)(v) of the VTN Disclosure Memorandum,
no VTN Entity has developed jointly with any other Person any VTN
Intellectual Property Right with respect to which such other Person has any
rights. Each VTN Entity is the owner of or has a license to any
Intellectual Property Right sold or licensed to a third party by such VTN
Entity in connection with such VTN Entity's business operations, and such
VTN Entity has the right to convey by sale or license any Intellectual
Property Rights so conveyed.
(b) Except as set forth in Section 5.11(b) of the VTN Disclosure
Memorandum, each VTN Entity has taken all reasonable and customary measures
and precautions necessary to protect and maintain the confidentiality and
secrecy of all VTN Intellectual Property Rights (except VTN Intellectual
Property Rights whose value would be unimpaired by public disclosure) and
otherwise to maintain and protect the value of all VTN
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Intellectual Property Rights. Except as set forth in Section 5.11(b) of the
VTN Disclosure Memorandum, no VTN Entity has disclosed or delivered, or
permitted the disclosure or delivery to any Person of the source code, or
any portion or aspect of the source code, of any VTN Intellectual Property
Rights.
(c) No VTN Entity is infringing, misappropriating or making any
unlawful use of, and no VTN Entity has at any time infringed,
misappropriated or made any unlawful use of, and, except as set forth in
Section 5.11(c) of the VTN Disclosure Memorandum, no VTN Entity has
received any notice or other communication (in writing or otherwise) of any
actual, alleged, possible or potential infringement, misappropriation or
unlawful use of, any Intellectual Property Right owned or used by any other
Person. To the Knowledge of VTN, no other Person is infringing,
misappropriating or making any unlawful use of, and no Intellectual
Property Right owned or used by any other Person infringes or conflicts
with, any VTN Intellectual Property Right.
(d) The VTN Intellectual Property Rights constitute all the
Intellectual Property Rights reasonably deemed necessary to enable any VTN
Entity to conduct its business in the manner in which such business has
been and is being conducted. No VTN Entity has licensed any of the VTN
Intellectual Property Rights to any Person on an exclusive basis and,
except as set forth in Section 5.11(d) of the VTN Disclosure Memorandum, no
VTN Entity has entered into any covenant not to compete or Contract
limiting its ability to exploit fully any of the VTN Intellectual Property
Rights or to transact business in any market or geographical area or with
any Person.
(e) Except as disclosed in Section 5.11(e) of the VTN Disclosure
Memorandum, every officer, director, or employee of any VTN Entity is a
party to a Contract which requires such officer, director or employee to
assign any interest in any Intellectual Property Right to any VTN Entity
and to keep confidential any trade secrets, proprietary data, customer
information, or other business information of any VTN Entity, and no such
officer, director or employee is party to any Contract with any Person
other than a VTN Entity which requires such officer, director or employee
to assign any interest in any Intellectual Property Right to any Person
other than a VTN Entity or to keep confidential any trade secrets,
proprietary data, customer information, or other business information of
any Person other than a VTN Entity. Except as disclosed in Section 5.11(e)
of the VTN Disclosure Memorandum, no officer, director or employee of any
VTN Entity is party to any Contract which restricts or prohibits such
officer, director or employee from engaging in activities competitive with
any Person, including any VTN Entity.
5.12 ENVIRONMENTAL MATTERS
---------------------
(a) Each VTN Entity, its Participation Facilities, and its
Operating Properties are, and have been, in compliance with all
Environmental Laws, except for violations which are not reasonably likely
to have, individually or in the aggregate, a VTN Material Adverse Effect.
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(b) There is no Litigation pending or, to the Knowledge of VTN,
threatened before any court, governmental agency, or authority or other
forum in which any VTN Entity or any of its Operating Properties or
Participation Facilities (or VTN in respect of such Operating Property or
Participation Facility) has been or, with respect to threatened Litigation,
may be named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the release,
discharge, spillage, or disposal into the environment of any Hazardous
Material, whether or not occurring at, on, under, adjacent to, or affecting
(or potentially affecting) a site owned, leased, or operated by any VTN
Entity or any of its Operating Properties or Participation Facilities,
except for such Litigation pending or threatened that is not reasonably
likely to have, individually or in the aggregate, a VTN Material Adverse
Effect, nor is there any reasonable basis for any Litigation of a type
described in this sentence, except such as is not reasonably likely to
have, individually or in the aggregate, a VTN Material Adverse Effect.
(c) During the period of (i) any VTN Entity's ownership or operation
of any of their respective current properties, (ii) any VTN Entity's
participation in the management of any Participation Facility, or (iii) any
VTN Entity's holding of a security interest in a Operating Property, there
have been no releases, discharges, spillages, or disposals of Hazardous
Material in, on, under, adjacent to, or affecting (or potentially
affecting) such properties, except such as are not reasonably likely to
have, individually or in the aggregate, a VTN Material Adverse Effect.
Prior to the period of (i) any VTN Entity's ownership or operation of any
of their respective current properties, (ii) any VTN Entity's participation
in the management of any Participation Facility, or (iii) any VTN Entity's
holding of a security interest in a Operating Property, there were no
releases, discharges, spillages, or disposals of Hazardous Material in, on,
under, or affecting any such property, Participation Facility or Operating
Property, except such as are not reasonably likely to have, individually or
in the aggregate, a VTN Material Adverse Effect.
5.13 COMPLIANCE WITH LAWS. Except as disclosed in Section 5.13 of the
--------------------
VTN Disclosure Memorandum, since January 1, 1986, each VTN Entity has had in
effect all Permits necessary for it to own, lease, or operate its material
Assets and to carry on its business as it has been, and as it is currently,
conducted, except for those Permits the absence of which are not reasonably
likely to have, individually or in the aggregate, a VTN Material Adverse Effect,
and there has occurred no Default under any such Permit, other than Defaults
which are not reasonably likely to have, individually or in the aggregate, a VTN
Material Adverse Effect. Except as disclosed in Section 5.13 of the VTN
Disclosure Memorandum, none of the VTN Entities:
(a) is in Default under any of the provisions of its Certificate
of Incorporation or Bylaws (or other governing instruments);
(b) is in Default under any Laws, Orders, or Permits applicable
to its business or employees conducting its business, except for Defaults
which are not reasonably likely to have, individually or in the aggregate,
a VTN Material Adverse Effect; or
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(c) since January 1, 1993, has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting
that any VTN Entity is not in compliance with any of the Laws or Orders
which such governmental authority or Regulatory Authority enforces, where
such noncompliance is reasonably likely to have, individually or in the
aggregate, a VTN Material Adverse Effect, (ii) threatening to revoke any
Permits, the revocation of which is reasonably likely to have, individually
or in the aggregate, a VTN Material Adverse Effect, or (iii) requiring any
VTN Entity to enter into or consent to the issuance of a cease and desist
order, formal agreement, directive, commitment, or memorandum of
understanding, or to adopt any Board resolution or similar undertaking.
Copies of all material reports, correspondence, notices and other documents
relating to any inspection, audit, monitoring or other form of review or
enforcement action by a Regulatory Authority have been made available to
Premiere.
5.14. LABOR RELATIONS. No VTN Entity is the subject of any Litigation
---------------
asserting that it or any other VTN Entity has committed an unfair labor practice
(within the meaning of the National Labor Relations Act or comparable state law)
or seeking to compel it or any other VTN Entity to bargain with any labor
organization as to wages or conditions of employment, nor is any VTN Entity
party to any collective bargaining agreement, nor is there any strike or other
labor dispute involving any VTN Entity, pending or threatened, or to the
Knowledge of VTN, is there any activity involving any VTN Entity's employees
seeking to certify a collective bargaining unit or engaging in any other
organization activity.
5.15 EMPLOYEE BENEFIT PLANS.
----------------------
(a) VTN has disclosed in Section 5.15 of the VTN Disclosure
Memorandum, and has delivered or made available to Premiere prior to the
execution of this Agreement copies in each case of, all pension,
retirement, profit-sharing, deferred compensation, stock option, employee
stock ownership, severance pay, vacation, bonus, or other incentive plan,
all other written employee programs, arrangements, or agreements, all
medical, vision, dental, or other health plans, all life insurance plans,
and all other employee benefit plans or fringe benefit plans, including
"employee benefit plans" as that term is defined in Section 3(3) of ERISA,
currently adopted, maintained by, sponsored in whole or in part by, or
contributed to by any VTN Entity or ERISA Affiliate thereof for the benefit
of employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors, or other
beneficiaries are eligible to participate (collectively, the "VTN Benefit
Plans"). Any of the VTN Benefit Plans which is an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA, other than those
plans described in Section 201(2) of ERISA, is referred to herein as a "VTN
ERISA Plan." No VTN ERISA Plan is subject to Title IV of ERISA. Section
5.15 of the VTN Disclosure Memorandum sets forth a list and brief
description of each VTN Benefit Plan, including a designation of whether
such VTN Benefit Plan is a VTN ERISA Plan.
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(b) Except as described in Section 5.15(b) of the VTE Disclosure
Memorandum, all VTN Benefit Plans are in compliance with the applicable
terms of ERISA, the Internal Revenue Code, and any other applicable Laws
the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a VTN Material Adverse Effect. Each VTN
ERISA Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from
the Internal Revenue Service, and VTN is not aware of any circumstances
likely to result in revocation of any such favorable determination letter.
No VTN Entity has engaged in a transaction with respect to any VTN Benefit
Plan that, assuming the taxable period of such transaction expired as of
the date hereof, would subject any VTN Entity to a Tax imposed by either
Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA.
(c) Within the six-year period preceding the Effective Time, no
Liability under Subtitle C or D of Title IV of ERISA has been or is
expected to be incurred by any VTN Entity with respect to any ongoing,
frozen, or terminated single-employer plan or the single-employer plan of
any ERISA Affiliate, which Liability is reasonably likely to have a VTN
Material Adverse Effect. No VTN Entity has incurred any withdrawal
Liability with respect to a multiemployer plan under Subtitle B of Title IV
of ERISA (regardless of whether based on contributions of an ERISA
Affiliate), which Liability is reasonably likely to have a VTN Material
Adverse Effect. No notice of a "reportable event," within the meaning of
Section 4043 of ERISA for which the 30-day reporting requirement has not
been waived, has been required to be filed for any VTN Pension Plan or by
any ERISA Affiliate within the 12-month period ending on the date hereof.
(d) Except as disclosed in Section 5.15 of the VTN Disclosure
Memorandum, no VTN Entity has any Liability for retiree health and life
benefits under any of the VTN Benefit Plans and there are no restrictions
on the rights of such VTN Entity to amend or terminate any such retiree
health or benefit Plan without incurring any Liability thereunder, which
Liability is reasonably likely to have a VTN Material Adverse Effect.
(e) Except as disclosed in Section 5.15 of the VTN Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute,
or otherwise) becoming due to any director or any employee of any VTN
Entity from any VTN Entity under any VTN Benefit Plan or otherwise, (ii)
increase any benefits otherwise payable under any VTN Benefit Plan, or
(iii) result in any acceleration of the time of payment or vesting of any
such benefit, where such payment, increase, or acceleration is reasonably
likely to have, individually or in the aggregate, a VTN Material Adverse
Effect.
(f) The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of any VTN Entity and their respective beneficiaries, other than
entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or
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<PAGE>
Section 302 of ERISA, have been fully reflected on the VTN Financial
Statements to the extent required by and in accordance with GAAP.
5.16 CERTAIN CONTRACTS. Except as disclosed in Section 5.16 of the VTN
-----------------
Disclosure Memorandum or otherwise reflected in the VTN Financial Statements,
none of the VTN Entities, nor any of their respective Assets, businesses, or
operations, is a party to, or is bound or affected by, or receives benefits
under, (i) any employment, severance, termination, consulting, or retirement
Contract providing for aggregate payments to any Person in any calendar year in
excess of $50,000, (ii) any Contract relating to the borrowing of money by any
VTN Entity or the guarantee by any VTN Entity of any such obligation (other than
Contracts evidencing trade payables), (iii) any Contract which prohibits or
restricts any VTN Entity from engaging in any business activities in any
geographic area, line of business or otherwise in competition with any other
Person, (iv) any Contract between or among VTN Entities, Stockholders, any
director, officer or employee of any VTN Entity and/or Related Persons, (v) any
Contract involving Intellectual Property Rights (other than Contracts entered
into in the ordinary course with customers and "shrink-wrap" software licenses),
(vi) any Contract relating to the provision of data processing, network
communication, or other technical services to or by any VTN Entity, (vii) any
Contract relating to the purchase or sale of any goods or services (other than
Contracts entered into in the ordinary course of business and involving payments
under any individual Contract not in excess of $100,000), (ix) any Contract
providing VTN with the right to purchase or redeem any VTN Common Stock or other
Equity Rights in VTN, (x) any other Contract or amendment thereto that would be
required to be filed as an exhibit to a Form 10-K, if such form were required to
be filed by VTN with the SEC as of the date of this Agreement, (xi) any Contract
relating to indebtedness for borrowed money, (xii) any Contract relating to the
lease of personal property, (xiii) any Contract relating to the lease of real
property, and (xiv) any Contract relating to the development of strategic
alternatives for, raising capital for, or selling VTN (together with all
Contracts referred to in Sections 510, 515(a) and 5.19, the "VTN Contracts").
With respect to each VTN Contract disclosed pursuant to item (xi) of the
preceding sentence, Section 5.16 of the VTN Disclosure Memorandum sets forth,
with respect to each item of indebtedness, (A) the obligee, (B) the obligor, (C)
principal amount outstanding as of the date hereof, (D) the interest rate, (E)
payment schedule, (F) the maturity date, (G) collateral securing such
indebtedness, (H) the name(s) of any third party guarantor(s), (I) a brief
description of any Defaults which have not been cured, (J) the amount of any
prepayment penalty or premium, and (K) any third party Consents to the
transactions contemplated herein which are required pursuant to the terms of
such VTN Contract. With respect to each VTN Contract disclosed pursuant to items
(xii) and (xiii) of this Section 5.16, Section 5.16 of the VTN Disclosure
Memorandum sets forth, with respect to each such lease, (R) the lessor (S) the
lessee, (T) Assets subject to such lease, (V) expiration date of current term,
(V) payment schedule, (W) the terms of any purchase option, (X) a brief
description of any Defaults which have not been cured, (Y) the amount of any
prepayment penalty or premium and (Z) any third party Consents to the
transactions contemplated herein which are required pursuant to the terms of
such VTN Contract. With respect to each Contract to which any VTN Entity is a
party or by which it is bound and except as disclosed in Section 5.16 of the VTN
Disclosure Memorandum: (i) the Contract is in full force and effect; (ii) no VTN
Entity is in Default thereunder, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a VTN Material Adverse Effect;
(iii) no VTN Entity has
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repudiated or waived any material provision of any such Contract; and (iv) no
other party to any such Contract is, to the Knowledge of VTN, in Default in any
respect or has repudiated or waived any material provision thereunder. All of
the indebtedness of any VTN Entity for money borrowed is prepayable at any time
by such VTN Entity without penalty or premium.
5.17 LEGAL PROCEEDINGS. Except as set forth in Section 5.17 of the
-----------------
VTN Disclosure Memorandum, there is no Litigation instituted or pending, or, to
the Knowledge of VTN, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome) against any VTN Entity, or against any partner,
director, employee or employee benefit plan of any VTN Entity, or against any
Asset, interest, or right of any of them, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any VTN Entity. Section 5.17 of the VTN Disclosure
Memorandum contains a summary of all Litigation as of the date of this Agreement
to which any VTN Entity is a party and which names a VTN Entity as a defendant
or cross-defendant or for which, to the knowledge of VTN, any VTN Entity has any
potential Liability.
5.18 REPORTS. Since January 1, 1993, or the date of organization if
-------
later, each VTN Entity has timely filed all reports and statements, together
with any amendments required to be made with respect thereto, that it was
required to file with Regulatory Authorities. As of their respective dates, each
of such reports and documents, including the financial statements, exhibits, and
schedules thereto, complied in all material respects with all applicable Laws.
As of its respective date, each such report and document did not, in all
material respects, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
5.19 [RESERVED]
----------
5.20 VTN PRODUCTS AND SERVICES. Except as set forth in Section 5.20
-------------------------
of the VTN Disclosure Memorandum the VTN Products and Services conform in all
material respects with any specification, documentation, performance standard,
representation or statement made or provided with respect thereto by or on
behalf of any VTN Entity, and there has not been during the last three (3) years
any claim made against any VTN Entity by any customer of any VTN Entity or, to
the Knowledge of VTN, any customer of a Franchisee, by any Franchisee or by any
other Person alleging that any VTN Product and Service (including each version
thereof that has been licensed or otherwise made available by any VTN Entity to
any Person) does not conform in all material respects with any specification,
documentation, performance standard, representation or statement made or
provided by or on behalf of any VTN Entity, and, to the Knowledge of VTN, there
is not a reasonable basis for any such claim. Notwithstanding the generality of
the foregoing, all VTN Products and Services offered or distributed by any VTN
Entity, the NAP or VTN to each of Amway, its distributors and customers, NAP
customers and the Franchisees or any other VTN customer, conform as of the date
hereof to the current and future performance standards and service levels
applicable thereto, including without limitation, those set forth in the
Contracts listed in Section 5.20 of the VTN Disclosure Memorandum, without
imposition of any
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performance credits or other penalties and otherwise in accordance with the
terms of such Contracts. No product liability or warranty claims which
individually or in the aggregate could exceed the reserves therefor on the VTN
Financial Statements have been communicated in writing to or threatened in
writing against any VTN Entity. The VTN Products and Services, as of the date
hereof, during and after the calendar year 2000 A.D., include design, function
and performance capabilities such that the VTN Products and Services shall not
abnormally end and/or have invalid and/or incorrect results from and/or
performance or functional degradation because of the then-current date. The
design and function of the VTN Products and Services shall ensure year 2000 A.D.
and shall include, but not be limited to, date data century recognition,
calculations that accommodate same century and multicentury formulas and date
values, and date data interface values that reflect the century.
5.21 SYSTEM PERFORMANCE.
------------------
(a) The Network as currently equipped and maintained is Reliably
Handling an average of 70,000 messages per day (with an average length of
120 seconds) which are transmitted from one Hub to another ("Multi-Hub
Messages") in combination with an average of 100,000 messages per day which
are transmitted from a Service Center to a single Hub and back to another
Service Center ("Single-Hub Messages"). The Network as currently equipped
and maintained is Reliably Handling peak loads of 7,200 Multi-Hub Messages
per hour in combination with 10,800 Single-Hub Messages per hour. The
Network is capable, without additional equipment, without an upgrade of
software or hardware, and without material degradation of delivery times or
other Network performance, of Reliably Handling an average of 280,000
Multi-Hub Messages per day in combination with an average of 400,000
Single-Hub Messages per day, as well as peak loads of 28,800 Multi-Hub
Messages per hour in combination with 43,200 Single-Hub Messages per hour.
The Network may be improved, at a total capital expenditure of no more than
$4,500,000 based on current prices offered by suppliers, so that it is
capable of Reliably Handling an average of 650,000 Multi-Hub Messages per
day in combination with an average of 1,000,000 Single-Hub Messages per
day, as well as peak loads of 65,000 Multi-Hub Messages per hour in
combination with 100,000 Single-Hub Messages per hour.
(b) Each Service Center operated by VTN or a Franchisee as
currently equipped and maintained is capable of Reliably Handling an
average of 100 Single-Hub and Multi-Hub Messages (combined) per hour, in
combination with 700 messages per hour which are delivered from a sender to
a recipient within the same Service Center and are not transmitted to a Hub
("Non-Hub Messages"). Twenty percent (20%) of the Service Centers operated
by VTN or its Franchisees as currently equipped and maintained are capable
of Reliably Handling an average of 300 Single-Hub and Multi-Hub Messages
(combined) per hour, in combination with 2,100 Non-Hub Messages per hour.
Each Service Center equipped with one fully loaded Centigram AIP voice mail
server (with all port card slots filled and running version 5.0 VoiceMemo
software), one NIB, and one ACC Nile Router connected to a Hub with a T1
line, is capable of Reliably Handling an average of 400 Single-Hub and
Multi-Hub Messages (combined) per hour, in combination with 2,800 Non-Hub
Messages per hour. Each Service Center operated by VTN or a Franchisee as
currently equipped and maintained operates such that during the busiest
hour of operation, nor more
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than 2 out of every 100 callers will receive a busy condition or signal
referred to as "All Trunks Busy" or ATB. Each Service Center operated by
VTN or a Franchisee as currently equipped and maintained has sufficient
message storage capacity to provide the maximum number and length of
messages allowed and the number of days retained to which every customer
entitled to use the Service Center is currently entitled, and an additional
reserve storage capacity over and above that maximum amount by 10%.
(c) The Network and Hubs as currently equipped and maintained
are capable of meeting the "Network Transmission Standards" and the other
performance requirements set forth in the Agreement among VTNLP, the NAP
and VTE contained in the Grand Solution Documents for all periods through
set forth therein.
5.22 STATEMENTS TRUE AND CORRECT. No statement, certificate,
---------------------------
instrument, or other writing furnished or to be furnished by any VTN Entity or
any Affiliate thereof to Premiere pursuant to this Agreement or any other
document, agreement, or instrument delivered pursuant hereto herein contains or
will contain any untrue statement of material fact or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All documents that any
VTN Entity or any Affiliate thereof is responsible for filing with any
Regulatory Authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions of
applicable Law.
5.23 ACCOUNTING AND REGULATORY MATTERS. No VTN Entity or any
---------------------------------
Stockholder or any Affiliate thereof has taken or agreed to take any action or
has any Knowledge of any fact or circumstance that is reasonably likely to (i)
prevent the Merger from qualifying for pooling-of-interests accounting
treatment, or (ii) materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) or result in the imposition
of a condition or restriction of the type referred to in the last sentence of
such Section.
5.24 STATE TAKEOVER LAWS. Each VTN Entity and each Stockholder has
-------------------
taken all necessary action to exempt the transactions contemplated by this
Agreement from, or if necessary to challenge the validity or applicability of,
any applicable "moratorium," "fair price," "business combination," "control
share," or other anti-takeover Laws (collectively, "Takeover Laws").
5.25 CHARTER PROVISIONS. VTN Entity and each Stockholder has taken all
------------------
action so that the entering into of this Agreement and the consummation of the
Merger and the other transactions contemplated by this Agreement do not and will
not result in the grant of any rights to any Person under the Certificate of
Incorporation, Bylaws or other governing instruments of any VTN Entity or
restrict or impair the ability of Premiere or any of its Subsidiaries to vote,
or otherwise to exercise the rights of a stockholder with respect to, shares of
any VTN Entity that may be directly or indirectly acquired or controlled by
them.
5.26 INVESTMENT INTENTION, ETC. Each Stockholder is acquiring the
-------------------------
shares of Premiere Common Stock to be issued pursuant to this Agreement for
investment only, for such
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Stockholder's own account and not as a nominee or agent, and not with the view
to, or for resale in connection with, any distribution thereof or participation
therein. Except as set forth in Section 5.26 of the VTN Disclosure Memorandum,
each Stockholder is an "accredited investor" as such term is defined in Rule
501(a) under the 1933 Act. Each Stockholder has such knowledge and experience in
business and financial matters and with respect to investments in securities to
enable the Stockholder to understand and evaluate the risks of an investment in
the Premiere Common Stock to be acquired by the Stockholder in the Merger and to
form an investment decision with respect thereto and is able to bear the risk of
such investment for an indefinite period and to afford a complete loss thereof.
Each Stockholder has previously completed, executed and delivered to Premiere an
Investor Questionnaire relating to the transactions contemplated by this
Agreement. The responses contained in such Investor Questionnaires are true and
complete as of the date of the Questionnaire and the date of this Agreement.
Each Stockholder understands that the shares of Premiere Common Stock to be
issued pursuant to this Agreement have not been, and will not be, registered
under the 1933 Act in reliance upon the representations set forth herein and in
the Investor Questionnaires.
5.27 BOARD RECOMMENDATION. The Board of Directors of VTN, at a meeting
--------------------
duly called and held, has by unanimous vote of the directors present (who
constituted all of the directors then in office) (i) determined that this
Agreement and the transactions contemplated hereby, including the Merger, taken
together, are fair to and in the best interests of the Stockholders and (ii)
resolved to recommend that the holders of the shares of VTN Common Stock
approve this Agreement.
5.28 AMWAY MATTERS.
-------------
(a) Amway is a corporation duly organized, validly existing, and
in good standing under the Laws of the State of Michigan, and has the
corporate power and authority to carry on its business as now conducted and
to own, lease and operate its Assets.
(b) Amway has the corporate power and authority to execute and
deliver this Agreement and the Amway Closing Documents to which it is a party
and to perform its obligations under this Agreement and such Amway Closing
Documents. This Agreement represents a legal, valid, and binding obligation
of Amway, enforceable against Amway in accordance with its terms (except in
all cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and
except that the availability of the equitable remedy of specific performance
or injunctive relief is subject to the discretion of the court before which
any proceeding may be brought) and, upon the execution and delivery by Amway
of the Amway Closing Documents to which it is a party, such Amway Closing
Documents will constitute the legal, valid, and binding obligations of Amway,
enforceable against Amway in accordance with their respective terms (except
in all cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and
except that the
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<PAGE>
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding may be brought).
[Reserved] (d) Amway is the owner of all right, title and interest (legal
and beneficial) in and to that number of shares of VTN Common Stock set
forth next to its name in Section 5.4(a) of the VTN Disclosure Memorandum,
free and clear of all Liens. Amway is the owner of all right, title and
interest (legal and beneficial) in and to the Amway Convertible Note, free
and clear of all Liens. The Amway Convertible Note is convertible into
78.25 Shares of VTN Common Stock and 95.75 shares of VTE Common Stock.
Other than the Amway Convertible Note, Amway does not have any Contract or
any right or privilege (whether pre-emptive or contractual) capable of
becoming a Contract or Equity Right for the purchase, subscription or
issuance of any securities of VTN.
(e) [Reserved]
(f) [Reserved]
(g) Amway is acquiring the shares of Premiere Common Stock to be
issued pursuant to this Agreement for investment only, for its own account
and not as a nominee or agent, and not with the view to, or for resale in
connection with, any distribution thereof or participation therein. Amway
is an "accredited investor" as such term is defined in Rule 501(a) under
the 1933 Act. Amway has such knowledge and experience in business and
financial matters and with respect to investments in securities to enable
Amway to understand and evaluate the risks of an investment in the Premiere
Common Stock to be acquired by Amway in the Merger and to form an
investment decision with respect thereto and is able to bear the risk of
such investment for an indefinite period and to afford a complete loss
thereof.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PREMIERE
------------------------------------------
Premiere hereby represents and warrants to VTN and the Stockholders as
follows:
6.1 ORGANIZATION, STANDING, AND POWER. Premiere is a corporation duly
---------------------------------
organized, validly existing, and in good standing under the Laws of the State of
Georgia, and has the corporate Premiere is duly qualified or licensed to
transact business as a foreign corporation in good standing in the States of the
United States and foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Premiere Material Adverse Effect.
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<PAGE>
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
---------------------------------
(a) Premiere has the corporate power and authority necessary to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part
of Premiere. This Agreement represents a legal, valid, and binding
obligation of Premiere, enforceable against Premiere in accordance with its
terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the
equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
Premiere, nor the consummation by Premiere of the transactions contemplated
hereby, nor compliance by Premiere with any of the provisions hereof, will
(i) conflict with or result in a breach of any provision of Premiere's
Articles of Incorporation or Bylaws or any resolution adopted by the board
of directors or shareholders of Premiere or any of its Subsidiaries, or
(ii) constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any Asset of any
Premiere Entity under, any Contract or Permit of any Premiere Entity, where
such Default or Lien, or any failure to obtain such Consent, is reasonably
likely to have, individually or in the aggregate, a Premiere Material
Adverse Effect, or, (iii) subject to receipt of the requisite Consents
referred to in Section 9.1(b), constitute or result in a Default under, or
require any Consent pursuant to, any Law or Order applicable to any
Premiere Entity or any of their respective material Assets (including any
Premiere Entity or any VTN Entity becoming subject to or liable for the
payment of any Tax or any of the Assets owned by any Premiere Entity or any
VTN Entity being reassessed or revalued by any Taxing authority).
(c) Other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities Laws, and
rules of the NASD, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, or under the HSR Act, and other than Consents,
filings, or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a Premiere
Material Adverse Effect, no notice to, filing with, or Consent of, any
public body or authority is necessary for the consummation by Premiere of
the Merger and the other transactions contemplated in this Agreement.
6.3 CAPITAL STOCK.
-------------
(a) The authorized capital stock of Premiere consists of
(i)150,000,000 shares of Premiere Common Stock, of which 24,089,769 shares
are issued and outstanding as of
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March 17, 1997, and (ii) 5,000,000 shares of Premiere Preferred Stock, of
which no shares are issued and outstanding. All of the issued and
outstanding shares of Premiere Capital Stock are, and all of the shares of
Premiere Common Stock to be issued in exchange for shares of VTN Common
Stock upon consummation of the Merger, when issued in accordance with the
terms of this Agreement, will be, duly and validly issued and outstanding
and fully paid and nonassessable. None of the outstanding shares of
Premiere Capital Stock has been, and none of the shares of Premiere Common
Stock to be issued in exchange for shares of VTN Common Stock upon
consummation of the Merger will be, issued in violation of any preemptive
rights of the current or past stockholders of Premiere.
(b) Except as set forth in Section 6.3(a), or as provided
pursuant to the Premiere 1994 Stock Option Plan or the Premiere 1995 Stock
Plan or as disclosed in Section 6.3 of the Premiere Disclosure Memorandum,
there are no shares of capital stock or other equity securities of Premiere
outstanding and no outstanding Equity Rights relating to the capital stock
of Premiere.
6.4 PREMIERE SUBSIDIARIES. Premiere has disclosed in Section 6.4 of
---------------------
the Premiere Disclosure Memorandum all of the Premiere Subsidiaries as of the
date of this Agreement that are corporations (identifying its jurisdiction of
incorporation, each jurisdiction in which the character of its Assets or the
nature or conduct of its business requires it to be qualified and/or licensed to
transact business, and the number of shares owned and percentage ownership
interest represented by such share ownership) and all of the Premiere
Subsidiaries that are general or limited partnerships or other non-corporate
entities (identifying the Law under which such entity is organized, each
jurisdiction in which the character of its Assets or the nature or conduct of
its business requires it to be qualified and/or licensed to transact business,
and the amount and nature of the ownership interest therein). Except as
disclosed in Section 6.4 of the Premiere Disclosure Memorandum, Premiere or one
of its wholly-owned Subsidiaries owns all of the issued and outstanding shares
of capital stock (or other equity interests) of each Premiere Subsidiary. No
capital stock (or other equity interest) of any Premiere Subsidiary are or may
become required to be issued (other than to another Premiere Entity) by reason
of any Equity Rights, and there are no Contracts by which any Premiere
Subsidiary is bound to issue (other than to another Premiere Entity) additional
shares of its capital stock (or other equity interests) or Equity Rights or by
which any Premiere Entity is or may be bound to transfer any shares of the
capital stock (or other equity interests) of any Premiere Subsidiary (other than
to another Premiere Entity). There are no Contracts relating to the rights of
any Premiere Entity to vote or to dispose of any shares of the capital stock (or
other equity interests) of any Premiere Subsidiary. All of the shares of capital
stock (or other equity interests) of each Significant Subsidiary of Premiere
held by a Premiere Entity are fully paid and nonassessable and are owned by the
Premiere Entity free and clear of any Lien. Each Premiere Subsidiary is a
corporation, and is duly organized, validly existing, and (as to corporations)
in good standing under the Laws of the jurisdiction in which it is incorporated
or organized, and has the corporate power and authority necessary for it to own,
lease and operate its Assets and to carry on its business as now conducted. Each
Premiere Subsidiary is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so qualified or licensed, except for such
jurisdictions in
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<PAGE>
which the failure to be so qualified or licensed is not reasonably likely to
have, individually or in the aggregate, a Premiere Material Adverse Effect.
6.5 SEC FILINGS; FINANCIAL STATEMENTS.
---------------------------------
(a) Premiere has timely filed and made available to VTN all SEC
Documents required to be filed by Premiere since March 5, 1996 (the
"Premiere SEC Reports"). The Premiere SEC Reports (i) at the time filed,
complied in all material respects with the applicable requirements of the
Securities Laws and other applicable Laws and (ii) did not, at the time
they were filed (or, if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to
be stated in such Premiere SEC Reports or necessary in order to make the
statements in such Premiere SEC Reports, in light of the circumstances
under which they were made, not misleading. No Premiere Subsidiary is
required to file any SEC Documents.
(b) Each of the Premiere Financial Statements (including, in each
case, any related notes) contained in the Premiere SEC Reports, including
any Premiere SEC Reports filed after the date of this Agreement until the
Effective Time, complied as to form in all material respects with the
applicable published rules and regulations of the SEC with respect thereto,
was prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes to
such financial statements or, in the case of unaudited interim statements,
as permitted by Form 10-Q of the SEC), and fairly presented in all material
respects the consolidated financial position of Premiere and its
Subsidiaries as at the respective dates and the consolidated results of
operations and cash flows for the periods indicated, except that the
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be
material in amount or effect.
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Premiere Entity has any
----------------------------------
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Premiere Material Adverse Effect, except Liabilities which are
accrued or reserved against in the consolidated balance sheet of Premiere as of
December 31, 1996, included in the Premiere Financial Statements delivered prior
to the date of this Agreement or reflected in the notes thereto and Liability
(including contingent Liabilities) described in the Premiere SEC Report. Except
as disclosed in the Premiere SEC Reports, no Premiere Entity has incurred or
paid any Liability since December 31, 1996, except for such Liabilities incurred
or paid (i) in the ordinary course of business consistent with past business
practice and which are not reasonably likely to have, individually or in the
aggregate, a Premiere Material Adverse Effect or (ii) in connection with the
transactions contemplated by this Agreement.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1996,
------------------------------------
except as disclosed in the Premiere Financial Statements delivered prior to the
date of this Agreement, as disclosed in the Premiere SEC Reports, or as
disclosed in Section 6.7 of the Premiere Disclosure Memorandum, (i) there have
been no events, changes or occurrences which have had, or are
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<PAGE>
reasonably likely to have, individually or in the aggregate, a Premiere Material
Adverse Effect, and (ii) the Premiere Entities have not taken any action, or
failed to take any action, prior to the date of this Agreement, which action or
failure, if taken after the date of this Agreement, would represent or result in
a material breach or violation of any of the covenants and agreements of
Premiere provided in Article 7.
6.8. COMPLIANCE WITH LAWS. Each Premiere Entity has in effect all
--------------------
Permits necessary for it to own, lease or operate its material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
Premiere Material Adverse Effect, and there has occurred no Default under any
such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Premiere Material Adverse Effect. Except as
disclosed in the Premiere SEC Reports or in Section 6.8 of the Premiere
Disclosure Memorandum, none of the Premiere Entities:
(a) is in Default under its Articles of Incorporation or Bylaws
(or other governing instruments); or
(b) is in Default under any Laws, Orders or Permits applicable
to its business or employees conducting its business, except for Defaults
which are not reasonably likely to have, individually or in the aggregate,
a Premiere Material Adverse Effect; or
(c) since January 1, 1993, has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting
that any Premiere Entity is not in compliance with any of the Laws or
Orders which such governmental authority or Regulatory Authority enforces,
where such noncompliance is reasonably likely to have, individually or in
the aggregate, a Premiere Material Adverse Effect, (ii) threatening to
revoke any Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Premiere Material Adverse Effect, or
(iii) requiring any Premiere Entity to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive,
commitment or memorandum of understanding, or to adopt any Board resolution
or similar undertaking, which restricts materially the conduct of its
business.
6.9 LEGAL PROCEEDINGS. Except as disclosed in the Premiere SEC
-----------------
Reports, there is no Litigation instituted or pending, or, to the Knowledge of
Premiere, threatened (or unasserted but considered probable of assertion and
which if asserted would have at least a reasonable probability of an unfavorable
outcome) against any Premiere Entity, or against any director, employee or
employee benefit plan of any Premiere Entity, or against any Asset, interest, or
right of any of them, that is reasonably likely to have, individually or in the
aggregate, a Premiere Material Adverse Effect, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any Premiere Entity, that are reasonably likely to have,
individually or in the aggregate, a Premiere Material Adverse Effect.
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<PAGE>
6.10 STATEMENTS TRUE AND CORRECT. No statement, certificate,
---------------------------
instrument or other writing furnished or to be furnished by any Premiere Entity
or any Affiliate thereof to VTN pursuant to this Agreement or any other
document, agreement or instrument delivered pursuant hereto contains or will
contain any untrue statement of material fact or will omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. All documents that any Premiere
Entity or any Affiliate thereof is responsible for filing with any Regulatory
Authority in connection with the transactions contemplated hereby will comply as
to form in all material respects with the provisions of applicable Law.
6.11 ACCOUNTING AND REGULATORY MATTERS. No Premiere Entity or any
---------------------------------
Affiliate thereof has taken or agreed to take any action or has any Knowledge of
any fact or circumstance that is reasonably likely to (i) prevent the Merger
from qualifying for pooling-of-interests accounting treatment or as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section. In this regard, Premiere shall execute and deliver to VTN's counsel
prior to the Effective Date a certificate substantially in the form of Exhibit 5
hereto.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
----------------------------------------
7.1 AFFIRMATIVE COVENANTS OF VTN. From the date of this Agreement
----------------------------
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of Premiere shall have been obtained, and
except as otherwise expressly contemplated herein, VTN shall and shall cause
each of its Subsidiaries to (a) operate its business only in the usual, regular,
and ordinary course, (b) preserve intact its business organization and Assets
and maintain its rights and franchises, and (c) knowingly take no action which
would (i) adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in the last sentences of
Section 9.1(b) or 9.1(c), or (ii) adversely affect the ability of any Party to
perform its covenants and agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF VTN. From the date of this Agreement until
-------------------------
the earlier of the Effective Time or the termination of this Agreement, unless
the prior written consent of Premiere shall have been obtained, and except as
otherwise expressly contemplated herein, in the VTE Merger Agreement, or in the
MPI Purchase Agreement or as disclosed in Section 7.2 of the VTN Disclosure
Memorandum, VTN covenants and agrees that it will not do or agree or commit to
do, or permit VTNLP to do or agree or commit to do, any of the following:
(a) amend the Certificate of Incorporation, Bylaws or other
governing instruments of any VTN Entity; or
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(b) incur any additional debt obligation or other obligation for
borrowed money (other than indebtedness of a VTN Entity to another VTN
Entity) in excess of an aggregate of $25,000 (for the VTN Entities on a
consolidated basis) except in the ordinary course of the business of VTN
Subsidiaries consistent with past practices, or impose, or suffer the
imposition, on any Asset of any VTN Entity of any Lien or permit any
such Lien to exist (other than in connection with Liens in effect as of
the date hereof that are disclosed in the VTN Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange (other
than exchanges in the ordinary course under employee benefit plans),
directly or indirectly, any shares, or any securities convertible into
any shares, of the capital stock of any VTN Entity, or declare or pay
any dividend or make any other distribution in respect of VTN's capital
stock or the general or limited partner interests of VTNLP; or
(d) except for this Agreement, or pursuant to the exercise of
stock options outstanding as of the date hereof and pursuant to the
terms thereof in existence on the date hereof, issue, sell, pledge,
encumber, authorize the issuance of, enter into any Contract to issue,
sell, pledge, encumber, or authorize the issuance of, or otherwise
permit to become outstanding, any additional shares of VTN Common Stock
or any other capital stock or units of VTNLP partner interest or any
other equity interest of any VTN Entity, or any stock appreciation
rights, or any option, warrant, or other Equity Right; or
(e) adjust, split, combine or reclassify any capital stock of
any VTN Entity or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of VTN Common
Stock or partner interests of VTNLP, or sell, lease, mortgage or
otherwise dispose of or otherwise encumber (x) any partner interest in
VTNLP or (y) any Asset other than in the ordinary course of business for
reasonable and adequate consideration; or
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in either case have maturities of
three years or less, purchase any securities or make any material
investment, either by purchase of stock of securities, contributions to
capital, Asset transfers, or purchase of any Assets, in any Person other
than a wholly owned VTN Subsidiary, or otherwise acquire direct or
indirect control over any Person; or
(g) grant any increase in compensation or benefits to the
employees or officers of any VTN Entity, except in accordance with past
practice or as required by Law; pay any severance or termination pay or
any bonus other than pursuant to written policies or written Contracts
in effect on the date of this Agreement; and enter into or amend any
severance agreements with officers of any VTN Entity; grant any material
increase in fees or other increases in compensation or other benefits to
directors of any VTN Entity except in accordance with past practice; or
voluntarily accelerate the vesting of any stock options or other
stock-based compensation or employee benefits or other Equity Rights; or
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<PAGE>
(h) enter into or amend any employment Contract between any VTN
Entity and any Person (unless such amendment is required by Law) that
the VTN Entity does not have the unconditional right to terminate
without Liability (other than Liability for services already rendered),
at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any VTN Entity or
terminate or withdraw from, or make any material change in or to, any
existing employee benefit plans of any VTN Entity other than any such
change that is required by Law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax qualified status of any such
plan, or make any distributions from such employee benefit plans, except
as required by Law, the terms of such plans or consistent with past
practice; or
(j) make any significant change in any Tax or accounting methods
or systems of internal accounting controls, except as may be appropriate
to conform to changes in Tax Laws or regulatory accounting requirements
or GAAP; or
(k) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of any VTN
Entity for material money damages or restrictions upon the operations of
any VTN Entity; or
(l) enter into, modify, amend or terminate any material Contract
(including any loan Contract with an unpaid balance exceeding $10,000 or
waive, release, compromise or assign any material rights or claims.
7.3 COVENANTS OF PREMIERE. From the date of this Agreement until the
---------------------
earlier of the Effective Time or the termination of this Agreement, unless the
prior written consent of VTN shall have been obtained, and except as otherwise
expressly contemplated herein, Premiere covenants and agrees that it shall (a)
continue to conduct its business and the business of its Subsidiaries in a
manner designed, in its reasonable judgment, to enhance the long-term value of
the Premiere Common Stock and the business prospects of the Premiere Entities
and to the extent consistent therewith use all reasonable efforts to preserve
intact the Premiere Entities' core businesses and goodwill with their respective
employees, and (b) take no action which would (i) materially adversely affect
the ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the last sentences of Section 9.1(b) or 9.1(c), or (ii)
materially adversely affect the ability of any Party to perform its covenants
and agreements under this Agreement; provided, that the foregoing shall not
prevent any Premiere Entity from acquiring any Assets or other businesses or
from discontinuing or disposing of any of its Assets or business if such action
is, in the reasonable judgment of Premiere, desirable in the conduct of the
business of Premiere and its Subsidiaries. Premiere further covenants and agrees
that it will not, without the prior written consent of VTN, which consent shall
not be unreasonably withheld, amend the Articles of Incorporation or Bylaws of
Premiere, in each case, in any manner adverse to the holders of VTN Common Stock
as compared to rights of holders of Premiere Common Stock generally as of the
date of this Agreement.
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7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give written
----------------------------
notice promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a VTN Material Adverse Effect or a Premiere Material Adverse Effect,
as applicable, or (ii) would cause or constitute a material breach of any of its
representations, warranties, or covenants contained herein, and to use its
reasonable efforts to prevent or promptly to remedy the same.
7.5 REPORTS. Each Party and its Subsidiaries shall file all reports
-------
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity filing such
statements as of the dates indicated and the consolidated results of operations,
changes in stockholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not material). As of their
respective dates, such reports filed with the SEC will comply in all material
respects with the Securities Laws and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Any financial statements contained
in any other reports to another Regulatory Authority shall be prepared in
accordance with Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
---------------------
8.1 [RESERVED]
----------
8.2 EXCHANGE LISTING. Premiere shall use its best efforts to list,
----------------
prior to the Effective Time, on the Nasdaq National Market the shares of
Premiere Common Stock to be issued to the holders of VTE Common Stock pursuant
to the Merger, and Premiere shall give all notices and make all filings with the
NASD required in connection with the transactions contemplated herein.
8.3 APPLICATIONS; ANTITRUST NOTIFICATION. Premiere shall prepare and
------------------------------------
file, and VTE and the Stockholders shall cooperate in the preparation and, where
appropriate, filing of, applications with all Regulatory Authorities having
jurisdiction over the transactions contemplated by this Agreement seeking the
requisite Consents necessary to consummate the transactions contemplated by this
Agreement. To the extent required by the HSR Act, each of the Parties will
promptly file with the United States Federal Trade Commission and the United
States Department of Justice the notification and report form required for the
transactions contemplated hereby and any supplemental or additional information
which may reasonably be requested in connection therewith pursuant to the HSR
Act and will comply in all material respects with the requirements
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of the HSR Act. The Parties shall deliver to each other copies of all filings,
correspondence and orders to and from all Regulatory Authorities in connection
with the transactions contemplated hereby.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
--------------------------
conditions of this Agreement, Premiere, Sub and VTN shall execute and file the
Certificate of Merger with the Secretary of State of the State of Delaware in
connection with the Closing.
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
-------------------------------------
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including using its reasonable efforts to lift
or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
referred to in Article 9; provided, that nothing herein shall preclude either
Party from exercising its rights under this Agreement. Each Party shall use, and
shall cause each of its Subsidiaries to use, its reasonable efforts to obtain
all Consents necessary or desirable for the consummation of the transactions
contemplated by this Agreement.
8.6 INVESTIGATION AND CONFIDENTIALITY.
---------------------------------
(a) Prior to the Effective Time, each Party shall keep the other
Party advised of all material developments relevant to its business and
to consummation of the Merger and shall permit the other Party to make
or cause to be made such investigation of the business and properties of
it and its Subsidiaries and of their respective financial and legal
conditions as the other Party reasonably requests, provided that such
investigation shall be reasonably related to the transactions
contemplated hereby and shall not interfere unnecessarily with normal
operations. No investigation by a Party shall affect the representations
and warranties of the other Party.
(b) In addition to the Parties' respective obligations under the
Confidentiality Agreement, which is hereby reaffirmed and adopted, and
incorporated by reference herein each Party shall, and shall cause its
advisers and agents to, maintain the confidentiality of all confidential
information furnished to it by the other Party concerning its and its
Subsidiaries' businesses, operations, and financial positions and shall
not use such information for any purpose except in furtherance of the
transactions contemplated by this Agreement. If this Agreement is
terminated prior to the Effective Time, each Party shall promptly return
or certify the destruction of all documents and copies thereof, and all
work papers containing confidential information received from the other
Party.
(c) VTN shall use its reasonable efforts to exercise its rights
under confidentiality agreements entered into with Persons which were
considering an Acquisition Proposal with respect to VTN to preserve the
confidentiality of the information relating to the VTN Entities provided
to such Persons and their Affiliates and Representatives.
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8.7 PRESS RELEASES. Prior to the Effective Time, VTN and Premiere
--------------
shall consult with each other as to the form and substance of any press release
or other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.7
shall be deemed to prohibit any Party from making any disclosure which its
outside counsel deems necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law. If any such press release or other public
disclosure contains a reference to Amway or any Amway marks, then no such press
release shall be issued or other public disclosure made without the prior
written consent of Amway, which consent shall not be unreasonably withheld.
8.8 CERTAIN ACTIONS. Except with respect to this Agreement and the
----------------
transactions contemplated hereby, no VTN Entity nor any Stockholder nor any
Affiliate thereof nor any Representatives thereof retained by any VTN Entity
shall directly or indirectly solicit any Acquisition Proposal by any Person.
Except to the extent the Board of Directors of VTN, after having consulted with
and considered the advice of outside counsel, reasonably determines in good
faith that the failure to take such actions would constitute a breach of
fiduciary duties of the members of such Board of Directors to VTN's stockholder
under applicable law, no VTN Entity, any Stockholder or any Affiliate or
Representative thereof shall furnish any non-public information that it is not
legally obligated to furnish, negotiate with respect to, or enter into any
Contract with respect to, any Acquisition Proposal, but VTN may communicate
information about such an Acquisition Proposal to its stockholders if and to the
extent that it is required to do so in order to comply with its legal
obligations as advised by outside counsel. Each Stockholder and/or VTN shall
promptly advise Premiere following the receipt of any Acquisition Proposal and
the details thereof, and advise Premiere of any developments with respect to
such Acquisition Proposal promptly upon the occurrence thereof. Each Stockholder
and VTN shall (i) immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any Persons conducted heretofore
with respect to any of the foregoing, and (ii) direct and use its reasonable
efforts to cause all of its Affiliates and Representatives not to engage in any
of the foregoing.
8.9 STOCKHOLDER RELEASES. Except as set forth in Section 8.9 of the
--------------------
VTN Disclosure Memorandum and except, as to Amway, for matters arising under the
Amway Reseller Agreement, each Stockholder, effective upon the Closing, hereby
releases, remises, and forever discharges each VTN Entity, VTE, VTNLP and their
respective Representatives, Affiliates, and insurers, and their respective
successors and assigns, and each of them (hereinafter individually and
collectively, the "Releasees") of and from any and all claims, demands, debts,
accounts, covenants, agreements, obligations, costs, expenses, actions or causes
of action of every nature, character or description, now accrued or which may
hereafter accrue, without limitation of law, equity or otherwise, based in whole
or in part on any facts, conduct, activities, transactions, events or
occurrences known or unknown, which have or allegedly have existed, occurred,
happened, arisen or transpired from the beginning of time to the Effective Time
(the "Released Claims"). Each Stockholder represents and warrants that no
Released Claim released herein has been assigned, expressly, impliedly, or by
operation of Law, and that all Released Claims of such Stockholder released
herein are owned by such Stockholder, who has the sole authority to release
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them. Each Stockholder agrees that such holder shall forever refrain and
forebear from commencing, instituting or prosecuting any lawsuit action or
proceeding, judicial, administrative, or otherwise, or otherwise attempting to
collect or enforce any Released Claims which are released and discharged herein.
8.10 ACCOUNTING TREATMENT. Each of the Parties undertakes and agrees
--------------------
to use its reasonable efforts to cause the Merger, and to take no action which
would be reasonably likely to cause the Merger not, to qualify for treatment as
a pooling of interests for accounting purposes.
8.11 STATE TAKEOVER LAWS. Each VTN Entity and each Stockholder shall
-------------------
take all necessary steps to exempt the transactions contemplated by this
Agreement from, or if necessary to challenge the validity or applicability of,
any applicable Takeover Law, including Section 203 of the DGCL.
8.12 CHARTER PROVISIONS. Each VTN Entity shall take all necessary
------------------
action to ensure that the entering into of this Agreement and the consummation
of the Merger and the other transactions contemplated hereby do not and will not
result in the grant of any rights to any Person under the Certificate of
Incorporation, Bylaws or other governing instruments of any VTN Entity or
restrict or impair the ability of Premiere or any of its Subsidiaries to vote,
or otherwise to exercise the rights of a stockholder with respect to, shares of
any VTN Entity that may be directly or indirectly acquired or controlled by
them.
8.13 TAX RETURNS. Premiere agrees that it will not, without the prior
-----------
written consent of the Escrow Committee, which consent will not be unreasonably
withheld or delayed, permit or cause VTN to file an amended "S" corporation
federal of state income Tax Return with respect to any taxable year or period
ending on or before the Closing Date. In addition Premiere agrees it will cause
VTN to deliver a copy of any other amended Tax Return of VTN for which Premiere
intends to seek indemnification with respect to any Tax period ended on or prior
the Closing Date that VTN proposes to file at least five (5) days prior to the
proposed filing thereof.
8.14 NONCOMPETITION, NONSOLICITATION AND NONDISCLOSURE.
-------------------------------------------------
(a) VTN and each Stockholder (other than Amway) acknowledges:
(i) that each Stockholder has substantial special
expertise and experience in the Business Activities and possesses
substantial contacts with suppliers and customers of VTN, and that
such expertise, experience and contacts have been built up over a
number of years, including such Stockholder's period of ownership of
VTN Common Stock;
(ii) that each Stockholder will be well-compensated under
this Agreement for the expertise, knowledge and contacts he or she
has obtained, as well as the goodwill that he or she has built up in
VTN, and that this Section 8.14 is being executed as an integral part
of such Stockholder's sale of all of his or her VTN Common Stock to
Premiere pursuant to the Merger, an express element of which includes
the sale of the goodwill such Stockholder's ownership and service has
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generated, and for which sale such Stockholder will receive
substantial remuneration hereunder;
(iii) that each Stockholder has occupied a position of
trust and responsibility with VTN in which he or she has had access
to a substantial amount of VTN Confidential Information and VTN Trade
Secrets, and that Premiere is entering into this Agreement in
reliance upon such Stockholder's agreement not to use or disclose
such VTN Trade Secrets and VTN Confidential Information, not to
compete against Premiere or any Affiliate, and not to solicit
Premiere's or any such Affiliates' customers during the time periods
set forth in this Agreement;
(iv) that each Stockholder's special experience and his or
her close identification with goodwill of VTN, the harm caused by
such Stockholder's violation of the provisions of this Section 8.14
cannot reasonably or adequately be compensated solely by damages in
an action at law;
(v) that each Stockholder is capable of competing with
and substantially harming Premiere and its Affiliates and has more
than adequate capital, experience, customer contract, supplier
contact, name recognition and industry reputation to start a
competing business, which would deprive Premiere of all or
substantially all of its bargained for goodwill and other
consideration in the transactions contemplated in this Agreement; and
(vi) that the terms of this Section 8.14 are necessary to
protect Premiere's legitimate business interests and its rights in
the VTN Trade Secrets and VTN Confidential Information and that
Stockholder's competition with Premiere or any of its Affiliates or
other violation of the covenants set forth below would cause
substantial and irreparable harm to Premiere.
(b) For three (3) years immediately following the Effective
Time, if Premiere or any of its Affiliates continues to carry on the
Business Activities of VTN, no Stockholder (other than Amway) shall,
directly or indirectly, by himself or herself or in conjunction with any
person, firm or corporation other than Premiere, engage in Business
Activities, or help anyone else engage in the Business Activities, within
the Restricted Territory. Notwithstanding anything contained herein to the
contrary, a Stockholder may own up to two percent (2%) of the shares of a
publicly-held corporation which competes with Premiere or any of its
Affiliates, provided none of his or her other relationships with such
corporation violate the terms of this Section 8.14 (provided that this
restriction shall not apply to Amway).
(c) For three (3) years immediately following the Effective
Time, no Stockholder (other than Amway) shall, for himself or herself or on
behalf of others, use or disclose any VTN Confidential Information or VTN
Trade Secrets except in the furtherance of the business of Premiere or any
of its Affiliates. No Stockholder (other than Amway) shall use or disclose
any VTN Trade Secrets at any time while the information remains a
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VTN Trade Secret. Nothing in this provision shall limit the protections
available to Premiere under any federal, state or local statute or legal
principle governing confidential information or trade secrets.
(d) If a Stockholder (other than Amway) violates any portion of
this Section 8.14, such Stockholder shall forfeit all compensation due to
such Stockholder under the General Escrow Agreement or the Specific Escrow
Agreement.
(e) Each Stockholder (other than Amway) acknowledges that his or
her agreement not to compete with Premiere or any of its Affiliates is
necessarily of a special, unique and extraordinary nature, and that the
loss arising from a breach thereof cannot reasonably be compensated by
money damages and will cause Premiere and any such Affiliate irreparable
harm. Accordingly, upon the failure of any Stockholder (other than Amway)
to comply with the terms of this Section 8.14 at any time, Premiere and any
such Affiliate shall be entitled to injunctive or other extraordinary
relief in case of such breach, such injunctive or other extraordinary
relief to be cumulative to, but not in limitation of, any other remedies to
which Premiere or any such Affiliate may be entitled.
(f) Premiere and the Stockholders (other than Amway) intend that
Premiere have the broadest possible protection from unfair competition by
the Stockholders (other than Amway) with Premiere or any of its Affiliates,
consistent with public policy. Accordingly, should any court of competent
jurisdiction determine that, consistent with the established precedent of
the forum state, the public policy of such state requires a more limited
restriction in duration, geographical area, nature of restricted activity,
or any combination thereof, it would be in furtherance of the intentions of
the parties hereto for the court to so interpret and construe the terms of
this Agreement, or to modify the Agreement, to apply to only such more
limited restrictions to an appropriate degree.
8.15 AMWAY CONVERTIBLE NOTE. At Closing, Amway shall convert the
----------------------
Amway Convertible Note into 95.75 shares of VTE Common Stock and 78.25 shares of
VTN Common Stock; provided, however, that if the Average Closing Price (without
-------- -------
regard to the Average Closing Price Limitations) is less than $19.85, Amway
shall not be required to convert the Amway Convertible Note, but, in that event,
VTE shall pay in full the Amway Convertible Note at Closing and, in either
event, shall release in full any other rights or remedies that it has by reason
of the Amway Convertible Note.
ARTICLE 9
---------
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
-------------------------------------------------
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
---------------------------------------
obligations of each Party to perform this Agreement and consummate the Merger
and the other transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by both Parties pursuant to Section
12.6:
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(a) [RESERVED]
----------
(b) REGULATORY APPROVALS. All waiting periods required by HSR
--------------------
shall have expired.
(c) CONSENTS AND APPROVALS. VTN shall have obtained the
----------------------
Consents required for consummation of the Merger or for the preventing of
any Default under any Contract or Permit of VTN set forth on Section 5.2(b)
of the VTN Disclosure Memorandum. No Consent so obtained which is necessary
to consummate the transactions contemplated hereby shall be conditioned or
restricted in a manner which in the reasonable judgment of the Board of
Directors of Premiere would so materially adversely impact the economic or
business benefits of the transactions contemplated by this Agreement that,
had such condition or requirement been known, such Party would not, in its
reasonable judgment, have entered into this Agreement.
(d) LEGAL PROCEEDINGS. No court or governmental or regulatory
-----------------
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) or taken any other action which prohibits,
restricts or makes illegal consummation of the transactions contemplated by
this Agreement.
(e) EXCHANGE LISTING. The shares of Premiere Common Stock
----------------
issuable pursuant to the Merger shall have been approved for listing on the
Nasdaq National Market.
(f) POOLING LETTERS. Each of the Parties shall have received
---------------
letters, dated as of the Effective Time, addressed to Premiere, in form and
substance reasonably acceptable to Premiere, from Arthur Andersen LLP,
acting as auditors for Premiere, to the effect that the Merger will qualify
for pooling-of-interests accounting treatment. Each of the Parties also
shall have received letters, dated as of the Effective Time, addressed to
Premiere, in form and substance reasonably acceptable to Premiere, from
Arthur Andersen LLP, acting as auditors for VTN, to the effect that such
firm is not aware of any matters relating to VTN and its Subsidiaries which
would preclude the Merger from qualifying for pooling-of-interests
accounting treatment.
(g) [RESERVED]
(h) REGISTRATION RIGHTS. Premiere and each of the Stockholders,
-------------------
so desiring, shall have executed and delivered the Stock Restriction and
Registration Rights Agreement, in the form attached hereto as Exhibit 4.
(i) [RESERVED]
----------
(j) VTE MERGER. PTEK Merger Corporation and shall have
----------
consummated the VTE Merger.
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(k) MPI PURCHASE. Premiere shall have consummated the purchase
------------
of the Partner Interest from MPI pursuant to the MPI Purchase Agreement.
9.2 CONDITIONS TO OBLIGATIONS OF PREMIERE. The obligations of
-------------------------------------
Premiere to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Premiere pursuant to Section 12.6(a):
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
------------------------------
Section 9.2(a), the accuracy of the representations and warranties of VTN
and the Stockholders set forth in this Agreement shall be assessed as of
the date of this Agreement and as of the Effective Time with the same
effect as though all such representations and warranties had been made on
and as of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such date).
All other representations and warranties of VTN and the Stockholders
contained in this Agreement or any agreement, certificate or instrument
entered into or delivered in connection herewith shall be true and correct
in all material respects.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
---------------------------------------
the agreements and covenants of VTN and the Stockholders to be performed
and complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been duly
performed and complied with in all material respects.
(c) CERTIFICATES. VTN shall have delivered to Premiere (i)
------------
a certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the effect
that the conditions set forth in Section 9.1 as relates to VTN and in
Section 9.2(a), 9.2(b) and 9.2(h) have been satisfied, (ii) certified
copies of resolutions duly adopted by VTN's Board of Directors and
stockholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement, and
the consummation of the transactions contemplated hereby, all in such
reasonable detail as Premiere and its counsel shall request, and (iii) a
certificate or certificate, dated as of the Effective Time and signed on
its behalf by its chief executive officer and its chief financial officer,
in form and substance satisfactory to Premiere and containing such
supporting information as Premiere may request, relating to the calculation
of the adjustments, if any, to the VTN Purchase Price as contemplated in
Section 3.1(d)(ii)(A)-(E).
(d) OPINIONS OF COUNSEL. Premiere shall have received an
-------------------
opinion dated as of the Closing Date from Benesch, Friedlander, Coplan &
Aronoff, counsel to VTN, in form and substance reasonably satisfactory to
Premiere. Premiere shall also have received opinions from counsel to each
of the Stockholders (other than Amway) and an opinion of counsel to Amway,
each dated as of the Closing, in each case containing customary opinions
relating to organization, authority and enforceability.
(e) [RESERVED]
----------
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(f) [RESERVED]
----------
(g) CLAIMS LETTERS. Each of the directors and officers of VTN
--------------
and the other Persons listed in Section 9.2(g) of the VTN Disclosure
Memorandum shall have executed and delivered to Premiere letters in
substantially the form of Exhibit 7.
(h) STOCKHOLDERS' EQUITY. VTN's stockholders' equity as of the
--------------------
Closing shall not be less than VTN's stockholders' equity as of December
31, 1996, excluding for purposes of the calculation of such stockholders'
equity the effects of (i) all costs, fees and charges, including fees and
charges of VTN's accountants, counsel and financial advisors, whether or
not accrued or paid, that are related to the transactions contemplated by
this Agreement and (ii) any reductions in VTN's stockholders' equity
resulting from any actions or changes in policies of VTN taken at the
request of Premiere or actions contemplated by this Agreement to occur on
or before the Closing.
(i) OWNERSHIP AGREEMENTS. VTN shall have used its commercially
--------------------
reasonable best efforts to have each of the persons identified in Section
9.2(i) of the VTN Disclosure Memorandum execute and deliver to VTN and
Premiere agreements, in form and substance reasonably satisfactory to
Premiere, confirming in or transferring to VTN certain Intellectual
Property Rights as described in Section 9.2(i) of the VTN Disclosure
Memorandum.
(j) [RESERVED]
(k) STOCK REPURCHASES. VTN shall have repurchased from the
-----------------
Persons listed on Section 5.16(ix) of the VTN Disclosure Memorandum the
outstanding VTN Common Stock held by such Persons pursuant to rights under
and in accordance with the terms of existing Contracts for repurchase or
redemption of such VTN Common Stock as described in Section 5.16(ix) of the
VTN Disclosure Memorandum.
(l) [RESERVED]
----------
(m) [RESERVED]
----------
(n) GRAND SOLUTION DOCUMENTS. VTN, VTNLP, NAP and the
-------------------------
Franchisees shall have executed and delivered the Grand Solution Documents
in the forms attached as Exhibit 8.
(o) EMPLOYMENT, SEVERANCE AND NONCOMPETITION AGREEMENTS. Each
---------------------------------------------------
of the Persons identified in Section 9.2(o) of the VTN Disclosure
Memorandum shall have executed and delivered to Premiere, and Premiere
shall have executed and delivered to such Persons, an employment or
severance and noncompetition agreement, in form and substance reasonably
satisfactory to the Persons and Premiere (collectively, the "Employment
Agreements").
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9.3 CONDITIONS TO OBLIGATIONS OF VTN AND THE STOCKHOLDERS. The
-----------------------------------------------------
obligations of VTN and the Stockholders to perform this Agreement and consummate
the Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by VTE pursuant to
Section 12.6(b):
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
------------------------------
Section 9.3(a), the accuracy of the representations and warranties of
Premiere set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as though
all such representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties which are
confined to a specified date shall speak only as of such date). The
representations and warranties of Premiere set forth in this Agreement
shall be true and correct in all material respects.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
---------------------------------------
the agreements and covenants of Premiere to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all material respects.
(c) CERTIFICATES. Premiere shall have delivered to VTN (i)
------------
a certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the effect
that the conditions set forth in Section 9.1 as relates to Premiere and in
Section 9.3(a) and 9.3(b) have been satisfied, and (ii) certified copies of
resolutions duly adopted by Premiere's Board of Directors and, if required,
Premiere's shareholders evidencing the taking of all corporate action
necessary to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby,
all in such reasonable detail as VTN and its counsel shall request.
(d) OPINION OF COUNSEL. VTN shall have received an opinion
------------------
of Alston & Bird LLP, counsel to Premiere, dated as of the Effective Time,
containing customary opinions relating to organization, authority and
enforceability.
ARTICLE 10
INDEMNIFICATION
---------------
10.1 AGREEMENT OF INDEMNITORS TO INDEMNIFY. Subject to the terms and
-------------------------------------
conditions of this Article 10, Indemnitors jointly and severally agree to
indemnify, defend, and hold harmless Indemnitees, and each of them, from,
against, for and in respect of any and all Losses asserted against, or paid,
suffered or incurred by, an Indemnitee and resulting from, based upon, or
arising out of:
(a) the inaccuracy, untruth, incompleteness or breach of any
representation or warranty of (i) any Indemnitor or VTN contained in or
made pursuant to this Agreement or
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in any certificate, Schedule, or Exhibit furnished by Indemnitors in
connection herewith or (ii) VTE or any Stockholder of VTE in the VTE Merger
Agreement; provided that for purposes of this Section 10.1(a) any
qualification of such representations and warranties by reference to the
materiality of matters stated therein or as to matters having or not having
a "Material Adverse Effect,", and any limitation of such representations
and warranties as being "to the knowledge of," or "known to" or words of
similar effect, shall be disregarded, in determining any inaccuracy,
untruth, incompleteness or breach thereof;
(b) a breach of or failure to perform any covenant or agreement
of (i) Indemnitors or VTN made in this Agreement or (ii) VTN or the
Stockholders of VTE in the VTE Merger Agreement; and
(c) any claim by a current or former Franchisee (or beneficiary
of an SRA) related to the ownership, control, operation, administration or
other rights to the Network or VTNLP, including without limitation any
claim based on the sale or provision of Network services or right to
control access to the Network to the extent such claim is based on a right
purportedly in existence as of the Effective Time;.
(d) any claim arising out of or related to the matters set forth
in Sections 5.9(a) and 5.15(b) of the VTN Disclosure Memorandum and
Sections 5.9(a) and 5.15(b) of the VTE Disclosure Memorandum;
(e) any claim arising out of or related to the matters set forth
in Section 5.11(c) of the VTN Disclosure Memorandum and Section 5.11(c) of
the VTE Disclosure Memorandum;
(f) any claim by an officer or director or former officer or
director of VTN for indemnification under the by-laws of VTN or any
Subsidiary of VTN or pursuant to any Contract relating to a claim brought
against such officer or director in such capacity relating to any act or
omission or alleged act or omission occurring in whole or in part on or
prior to the Effective Time; and
(g) any claim by any member of the board of directors or
trustees of the NAP or the Franchisee Association pursuant to the
indemnification letter attached as Section 10.1(g) of the VTE Disclosure
Memorandum or Sectin 10.1(g) of the VTE Disclosure Memorandum.
10.2 PROCEDURES FOR INDEMNIFICATION.
------------------------------
(a) An Indemnification Claim shall be made by an Indemnitee by
delivery of a written notice to the Stockholder Representative requesting
indemnification and specifying the basis on which indemnification is sought
and the amount of asserted Losses and, in the case of a Third Party Claim,
containing (by attachment or otherwise) such other information as such
Indemnitee shall have concerning such Third Party Claim.
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(b) If the Indemnification Claim involves a Third Party Claim
the procedures set forth in Section 10.3 shall be observed by the
Indemnitee and the Stockholder Representative.
(c) If the Indemnification Claim involves a matter other than a
Third Party Claim, the Stockholder Representative shall have 30 days to
object to such Indemnification Claim by delivery of a written notice of
such objection to such Indemnitee specifying in reasonable detail the basis
for such objection. Failure to timely so object shall constitute a final
and binding acceptance of the Indemnification Claim by the Stockholder
Representative on behalf of all Indemnitors, and the Indemnification Claim
shall be paid in accordance with subsection (d) hereof. If an objection is
timely interposed by the Stockholder Representative and the dispute is not
resolved by such Indemnitee and the Stockholder Representative within 30
days from the date the Indemnitee receives such objection, such dispute
shall be resolved by arbitration as provided in Section 10.7.
(d) Upon determination of the amount of an Indemnification
Claim, whether by agreement between the Stockholder Representative and the
Indemnitee or by an arbitration award or by any other final adjudication,
the Indemnitors shall pay the amount of such Indemnification Claim within
ten days of the date such amount is determined.
10.3 THIRD PARTY CLAIMS. The obligations and liabilities of the
------------------
parties hereunder with respect to a Third Party Claim shall be subject to
the following terms and conditions:
(a) The Indemnitee shall give the Stockholder Representative
written notice of a Third Party Claim promptly after receipt by the
Indemnitee of notice thereof, and the Stockholder Representative, on behalf
of the Indemnitors, may undertake the defense, compromise and settlement
thereof by representatives of its own choosing reasonably acceptable to the
Indemnitee. The failure of the Indemnitee to notify the Stockholder
Representative of such claim shall not relieve the Indemnitors of any
liability that they may have with respect to such claim except to the
extent the Stockholder Representative demonstrates that the defense of such
claim is prejudiced by such failure. The assumption of the defense,
compromise and settlement of any such Third Party Claim by the Stockholder
Representative shall be an acknowledgment of the obligation of the
Indemnitors to indemnify the Indemnitee with respect to such claim
hereunder. If the Indemnitee desires to participate in, but not control,
any such defense, compromise and settlement, it may do so at its sole cost
and expense. If, however, the Stockholder Representative fails or refuses
to undertake the defense of such Third Party Claim within ten (10) days
after written notice of such claim has been given to the Stockholder
Representative by the Indemnitee, the Indemnitee shall have the right to
undertake the defense, compromise and settlement of such claim with counsel
of its own choosing. In the circumstances described in the preceding
sentence, the Indemnitee shall, promptly upon its assumption of the defense
of such claim, make an Indemnification Claim as specified in Section 10.2
which shall be deemed an Indemnification Claim that is not a Third Party
Claim for the purposes of the procedures set forth herein.
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(b) If, in the reasonable opinion of the Indemnitee, any
Third Party Claim or the litigation or resolution thereof involves an
issue or matter which could have a material adverse effect on the
business, operations, assets, properties or prospects of the Indemnitee
(including, without limitation, the administration of the tax returns
and responsibilities under the tax laws of the Indemnitee), the
Indemnitee shall have the right to control the defense, compromise and
settlement of such Third Party Claim undertaken by the Stockholder
Representative, and the costs and expenses of the Indemnitee in
connection therewith shall be included as part of the indemnification
obligations of the Indemnitors hereunder. If the Indemnitee shall elect
to exercise such right, the Stockholder Representative shall have the
right to participate in, but not control, the defense, compromise and
settlement of such Third Party Claim at its sole cost and expense. Any
compromise or settlement of such Third Party Claim shall be subject to
the approval of the Stockholder Representative, which approval shall not
be unreasonably withheld, conditioned or delayed.
(c) No settlement of a Third Party Claim involving the
asserted liability of the Indemnitors under this Article shall be made
without the prior written consent by or on behalf of the Stockholder
Representative, which consent shall not be unreasonably withheld or
delayed. Consent shall be presumed in the case of settlements of $20,000
or less where the Stockholder Representative has not responded within
five business days of notice of a proposed settlement. If the
Stockholder Representative assumes the defense of such a Third Party
Claim, (a) no compromise or settlement thereof may be effected by the
Stockholder Representative without the Indemnitee's consent unless (i)
there is no finding or admission of any violation of law or any
violation of the rights of any person and no effect on any other claim
that may be made against the Indemnitee, (ii) the sole relief provided
is monetary damages that are paid in full by the Indemnitors, and (iii)
the compromise or settlement includes, as an unconditional term thereof,
the giving by the claimant or the plaintiff to the Indemnitee of a
release, in form and substance satisfactory to the Indemnitee, from all
liability in respect of such Third Party Claim, and (b) the Indemnitee
shall have no liability with respect to any compromise or settlement
thereof effected without its consent.
(d) In connection with the defense, compromise or
settlement of any Third Party Claim, the parties to this Agreement shall
execute such powers of attorney as may reasonably be necessary or
appropriate to permit participation of counsel selected by any party
hereto and, as may reasonably be related to any such claim or action,
shall provide access to the counsel, accountants and other
representatives of each party during normal business hours to all
properties, personnel, books, tax records, contracts, commitments and
all other business records of such other party related to the Third
Party Claim and will furnish to such other party copies of all such
documents as may reasonably be requested (certified, if requested).
10.4 LIMITATIONS AS TO AMOUNT. Indemnitors shall have no
------------------------
liability with respect to the matters described in Section 10.1 until the total
of all Losses with respect thereto exceeds $50,000, in which event Indemnitors
shall be obligated to indemnify the Indemnitees as provided in this Article 10
for all such Losses. The Indemnitors shall not be liable for Losses relating to
a claim for indemnification under (i) Section 10.1(a) or 10.1(b) in excess of
the Escrow, as defined
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in the General Escrow Agreement (the "General Escrow"), on deposit with the
Escrow Agent pursuant to the General Escrow Agreement, and (ii) Sections
10.1(c), 10.1(d), 10.1(e), 10.1(f) or 10.1(g) in excess of the Escrow, as
defined in the Specific Escrow Agreement (the "Specific Escrow"), and the
General Escrow on deposit with the Escrow Agent pursuant to the Specific Escrow
Agreement and the General Escrow Agreement (all such shares of Premiere Common
Stock included in the General Escrow and the Specific Escrow, collectively, the
"Escrow Shares"). Pursuant to the terms and conditions of the Specific Escrow
Agreement and the General Escrow Agreement, any payment of any indemnity to any
Indemnitee in accordance with this Article 10 shall be made solely and
exclusively out of, and shall be limited to, the Escrow Shares and shall be
subject to any additional provisions, including those relating to order or
priority of claims, in the Specific Escrow Agreement and the General Escrow
Agreement.
10.5 TAX EFFECT AND INSURANCE. The liability of the Indemnitors
------------------------
with respect to any Indemnification Claim shall be reduced by the tax benefit
actually or reasonably anticipated to be realized and any insurance proceeds
received by the Indemnitees as a result of any Losses upon which such
Indemnification Claim is based, and shall include any tax detriment actually
suffered by the Indemnitees as a result of such Losses. The amount of any such
tax benefit or detriment shall be determined by taking into account the effect,
if any and to the extent determinable, of timing differences resulting from the
acceleration or deferral of items of gain or loss resulting from such Losses and
shall otherwise be determined so that payment by the Indemnitors of the
Indemnification Claim, as adjusted to give effect to any such tax benefit or
detriment, will make the Indemnitee as economically whole as is reasonably
practical with respect to the Losses upon which the Indemnification Claim is
based. Any dispute as to the amount of such tax benefit or detriment shall be
resolved by arbitration as provided in Section 10.8 of this Agreement.
10.6 SUBROGATION. Upon payment in full of any Indemnification
-----------
Claim, whether such payment is effected by set-off or otherwise, or the payment
of any judgment or settlement with respect to a Third Party Claim, the
Indemnitors shall be subrogated to the extent of such payment to the rights of
the Indemnitee against any person or entity with respect to the subject matter
of such Indemnification Claim or Third Party Claim.
10.7 ARBITRATION. All disputes arising under this Article 10
-----------
(other than claims in equity) shall be resolved by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
Arbitration shall be by a single arbitrator experienced in the matters at issue
and selected by the Stockholder Representative and Premiere in accordance with
the Commercial Arbitration Rules of the American Arbitration Association. The
arbitration shall be held in such place in Atlanta, Georgia as may be specified
by the arbitrator (or any place agreed to by the Stockholder Representative,
Premiere and the arbitrator). The decision of the arbitrator shall be final and
binding as to any matters submitted under this Article 10; provided, however, if
necessary, such decision and satisfaction procedure may be enforced by either
the Stockholder Representative or Premiere in any court of record having
jurisdiction over the subject matter or over any of the parties to this
Agreement. All costs and expenses incurred in connection with any such
arbitration proceeding (including reasonable attorneys fees) shall be borne by
the party against which the decision is rendered, or, if no decision is
rendered, such costs and expenses shall be borne equally by the Indemnitors as
one party and the Indemnitees as the other party. If the arbitrator's decision
is a compromise, the determination of which party or
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parties bears the costs and expenses incurred in connection with any such
arbitration proceeding shall be made by the arbitrator on the basis of the
arbitrator's assessment of the relative merits of the parties' positions.
10.8 EXCLUSIVITY. After the Closing, to the extent permitted by
-----------
Law, the indemnities set forth in this Article 10 shall be the exclusive remedy
of the Indemnitees for any misrepresentation, breach of warranty or
nonfulfillment or failure to be performed of any covenant or agreement contained
in this Agreement, and the parties shall not be entitled to a rescission of this
Agreement or to any further rights or claims of any nature whatsoever in respect
hereof, all of which the Indemnitees hereby waive; provided, however, that
nothing herein limits, and the Indemnitees do not waive, any right or remedy
based on any claim for fraud, which liability based on any claim of fraud, if
any, shall be several and not joint.
ARTICLE 11
TERMINATION
-----------
11.1 TERMINATION. Notwithstanding any other provision of this
-----------
Agreement, and notwithstanding the approval of this Agreement by the
stockholders of VTN or, if required, the Shareholders of Premiere, this
Agreement may be terminated and the Merger abandoned at any time prior to the
Effective Time:
(a) By mutual consent of Premiere and VTN; or
(b) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event of a
material breach by the other Party of any representation or warranty
contained in this Agreement which cannot be or has not been cured within
30 days after the giving of written notice to the breaching Party of
such breach; or
(c) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event of a
material breach by the other Party of any covenant or agreement
contained in this Agreement which cannot be or has not been cured within
30 days after the giving of written notice to the breaching Party of
such breach; or
(d) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement relating to Consents of
Regulatory Authorities or approval of Stockholders) in the event any
Consent of any Regulatory Authority required for consummation of the
Merger and the other transactions contemplated hereby shall have been
denied by final nonappealable action of such authority or if any action
taken by such authority is not appealed within the time limit for
appeal; or
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(e) By either Party in the event that the Merger shall not
have been consummated by June 30, 1997, if the failure to consummate the
transactions contemplated hereby on or before such date is not caused by
any breach of this Agreement by the Party electing to terminate pursuant
to this Section 11.1(e); or
(f) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event that any of
the conditions precedent to the obligations of such Party to consummate
the Merger cannot be satisfied or fulfilled, or have not been waived in
writing, by the date specified in Section 11.1(e); or
(g) By either Party if the Average Closing Price is less
than $19.50, unless, in the event the terminating party is VTN,
Premiere, within forty eight (48) hours after receipt of written notice
from VTN of its election to terminate pursuant to this Section 11.1(g)
agrees to adjust the Exchange Ratio to the quotient obtained by dividing
(i) the product of (A) the Exchange Ratio determined pursuant to Section
3.1(c) (including the application of the Average Closing Price
Limitations), multiplied by (B) $19.50, by (ii) the Average Closing
Price (without application of the Average Closing Price Limitations)
(the "Adjusted Exchange Ratio"), in which event the Firm Exchange Ratio
shall be the product of (A) either (1) .77 if the Amway Convertible Note
is converted or (2) .71 if the Amway Convertible Note is not converted
and (B) the Adjusted Exchange Ratio, and the General Escrow Exchange
Ratio shall be the product of .1 and the Adjusted Exchange Ratio and the
Specific Exchange Ratio shall be the product of (C) either (3) .13 if
the Amway Convertible Note is converted or (4) .19 if the Amway
Convertible Note is not converted and (D) the Adjusted Exchange Ratio.
11.2 EFFECT OF TERMINATION. In the event of the termination and
---------------------
abandonment of this Agreement pursuant to Section 11.1, this Agreement shall
become void and have no effect, except that (i) the provisions of this Section
11.2 and Article 12 and Section 8.6(b) shall survive any such termination and
abandonment, and (ii) a termination pursuant to Sections 11.1(b), 11.1(c) or
11.1(f) shall not relieve the breaching Party from Liability for an uncured
willful breach of a representation or warranty or any breach of any covenant or
agreement contained in this Agreement, nor release the other Party for any
liability for any breach of any covenant or agreement contained in this
Agreement.
ARTICLE 12
MISCELLANEOUS
-------------
12.1 DEFINITIONS.
-----------
(a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as
amended.
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"1934 ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"ACQUISITION PROPOSAL" with respect to a Party shall mean
any tender offer or exchange offer or any proposal for a merger,
acquisition of all of the stock or assets of, or other business
combination involving the acquisition of such Party or any of its
Subsidiaries or the acquisition of a substantial equity interest in, or
a substantial portion of the assets of, such Party or any of its
Subsidiaries.
"AFFILIATE" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person; (ii) any
officer, director, partner, employer, or direct or indirect beneficial
owner of any 10% or greater equity or voting interest of such Person; or
(iii) any other Person for which a Person described in clause (ii) acts
in any such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
including the Exhibits delivered pursuant hereto and incorporated herein
by reference.
"AMWAY" shall mean Amway Corporation, a Michigan
corporation and a Stockholder of VTN.
"AMWAY CLOSING DOCUMENTS" shall mean the General Escrow
Agreement, Specific Escrow Agreement and the Registration Rights
Agreement.
"AMWAY CONVERTIBLE NOTE" shall mean the Revolving Credit
Note dated December 16, 1994 made by VTE and VTNLP to Amway in the
principal amount of $5,000,000, and the related Credit Agreement dated
December 16, 1994 among VTE, VTNLP, VTN and Amway, as amended and
supplemented thereafter.
"AMWAY RESELLER AGREEMENT" shall mean the Service and
Reseller Agreement dated September 28, 1990, between Amway and VTE, as
amended by First Amendment to Service and Reseller Agreement dated March
19, 1996 and Second Amendment to Service and Reseller Agreement dated
June 25, 1996.
"ASSETS" of a Person shall mean all of the assets,
properties, businesses and rights of such Person of every kind, nature,
character and description, whether real, personal or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of such
Person and wherever located.
"BUSINESS ACTIVITIES" shall mean the provision of
interactive voice messaging services.
"CERTIFICATE OF MERGER" shall mean the Certificate of
Merger to be executed by VTN and filed with the Secretary of State of
the State of Delaware relating to the Merger as contemplated by Section
1.1.
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"CLOSING DATE" shall mean the date on which the Closing
occurs.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"CONFIDENTIALITY AGREEMENT" shall mean that certain
Confidentiality Agreement, dated January ,1997, between VTE and
Premiere.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"CONSOLIDATED INDEBTEDNESS OF VTN" shall mean the aggregate
outstanding balance of principal and accrued and unpaid interest under
funded debt and capital lease obligations of VTN and its Subsidiaries
stated on a consolidated basis in accordance with GAAP.
"CONTRACT" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture, instrument,
lease, obligation, plan, practice, restriction, understanding, or
undertaking of any kind or character, or other document to which any
Person is a party or that is binding on any Person or its capital stock,
Assets or business.
"DEFAULT" shall mean (i) any breach or violation of,
default under any Contract, Law, Order, or Permit, (ii) any occurrence
of any event that with the passage of time or the giving of notice or
both would constitute a breach or violation of, or default under any
Contract, Law, Order, or Permit, or (iii) any occurrence of any event
that with or without the passage of time or the giving of notice would
give rise to a right of any Person to exercise any remedy or obtain any
relief under, terminate or revoke, suspend, cancel, or modify or change
the current terms of, or renegotiate, or to accelerate the maturity or
performance of, or to increase or impose any Liability under, any
Contract, Law, Order, or Permit.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to
pollution or protection of human health or the environment (including
ambient air, surface water, ground water, land surface, or subsurface
strata) and which are administered, interpreted, or enforced by the
United States Environmental Protection Agency and state and local
agencies with jurisdiction over, and including common law in respect of,
pollution or protection of the environment, including the Comprehensive
Environmental Response Compensation and Liability Act, as amended, 42
U.S.C. 9601 et seq. ("CERCLA"), the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. 6901 et seq. ("RCRA"), and other Laws
relating to emissions, discharges, releases, or threatened releases of
any Hazardous Material, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of any Hazardous Material.
"EQUITY RIGHTS" shall mean all arrangements, calls,
commitments, Contracts, options, rights to subscribe to, scrip,
understandings, warrants, or other binding obligations
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of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of a
Person or by which a Person is or may be bound to issue additional
shares of its capital stock or other Equity Rights.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"EXHIBITS" 1 through 8, inclusive, shall mean the Exhibits
so marked, copies of which are attached to this Agreement. Such Exhibits
are hereby incorporated by reference herein and made a part hereof, and
may be referred to in this Agreement and any other related instrument or
document without being attached hereto.
"FRANCHISE" shall mean the rights granted by VTE relating
to the ownership and/or operation of one or more Service Centers in one
or more Sales Territories within a Protected Territory pursuant to a
Franchise Agreement.
"FRANCHISE AGREEMENT" shall mean a franchise or license
agreement and all amendments, supplements and modifications thereto
entered into by VTE with any Franchisee relating to a Franchise.
"FRANCHISE OFFERING CIRCULAR" shall mean a franchise
offering circular used by VTE to offer and sell Franchises.
"FRANCHISEE" shall mean any holder of a Franchise.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous
substance, hazardous material, hazardous waste, regulated substance, or
toxic substance (as those terms are defined by any applicable
Environmental Laws) and (ii) any chemicals, pollutants, contaminants,
petroleum, petroleum products, or oil (and specifically shall include
asbestos requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HSR ACT" shall mean Section 7A of the Clayton Act, as
added by Title II of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"HUB" shall mean a site which houses switching and routing
equipment used for accepting voice message packet data from the Service
Centers via the T1 local loop and transmitting that packet data to other
Hubs or to Service Centers. There are currently twelve Hubs, one located
in each of ten U.S. cities, plus an eleventh Hub in Toronto, Canada and
a twelfth Hub in Sydney, Australia.
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"INDEMNIFICATION CLAIM" shall mean a claim for
indemnification under Article 10.
"INDEMNITEES" shall mean Premiere, VTN and their respective
officers, directors, stockholders, controlling persons, Affiliates and
Representatives.
"INDEMNITORS" shall mean the Stockholders.
"INTELLECTUAL PROPERTY RIGHT" shall mean: (a) any patent,
patent application, trademark (whether registered or unregistered),
trademark application, trade name, fictitious business name, service
mark (whether registered or unregistered), service mark application,
copyright (whether registered or unregistered), copyright application,
maskwork, maskwork application, trade secret, know-how, customer list,
system, computer software or computer program (including any source or
object codes therefor or documentation relating thereto), invention,
design, blueprint, engineering drawing, proprietary product, technology,
proprietary right or other intellectual property right or intangible
asset; and (b) any right to use or exploit any of the foregoing.
"INVESTOR QUESTIONNAIRES" shall mean the investor
questionnaires relating to various matters under the Securities Laws
completed by Stockholders and delivered to Premiere prior to the date
hereof.
"KNOWLEDGE" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall mean
the personal knowledge after due inquiry of those facts that are known
or should reasonably have been known after due inquiry and, as used with
respect to a Person that is a corporation or other business entity,
after due inquiry by the chairman, president, chief financial officer,
chief accounting officer, chief operating officer, general counsel, any
assistant or deputy general counsel, or any senior, executive or other
vice president of such Person and the knowledge of any such persons
obtained or which would have been obtained from a reasonable
investigation.
"LAW" shall mean any code, law (including common law),
ordinance, regulation, reporting or licensing requirement, rule, or
statute applicable to a Person or its Assets, Liabilities, or business,
including those promulgated, interpreted or enforced by any Regulatory
Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or expense
(including costs of investigation, collection and defense), claim,
deficiency, guaranty or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for
collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated,
matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default
of title, easement, encroachment, encumbrance, hypothecation,
infringement, lien, mortgage, pledge, reservation, restriction, security
interest, title retention or other security arrangement, or any ad-
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verse right or interest, charge, or claim of any nature whatsoever of,
on, or with respect to any property or property interest, other than (i)
Liens for current property Taxes not yet due and payable, and (iii)
Liens which do not materially impair the use of or title to the Assets
subject to such Lien.
"LITIGATION" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, governmental or other
examination or investigation, hearing, administrative or other
proceeding relating to or affecting a Party, its business, its Assets
(including Contracts related to it), or the transactions contemplated by
this Agreement.
"LOSSES" shall mean any and all demands, claims, actions or
causes of action, assessments, losses, diminution in value, damages
(including special and consequential damages), liabilities, costs, and
expenses, including interest, penalties, cost of investigation and
defense, and reasonable attorneys' and other professional fees and
expenses.
"MATERIAL" for purposes of this Agreement shall be
determined in light of the facts and circumstances of the matter in
question; provided that any specific monetary amount stated in this
Agreement shall determine materiality in that instance.
"MPI" shall mean Merchandising Productions, Inc., a
Delaware corporation and wholly-owned subsidiary of Amway and the sole
limited partner of VTNLP.
"MPI PURCHASE AGREEMENT" shall mean the Purchase and Sale
Agreement of even date between Premiere and MPI.
"NAP AGREEMENT" shall mean an agreement executed by a
Franchisee and VTE in which the Franchisee agrees to be bound by the
bylaws of the NAP Board.
"NAP BOARD" shall mean the Board of Directors of the NAP.
"NAP" shall mean the National Accounts Program of VTE, an
Ohio unincorporated association.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"NASDAQ NATIONAL MARKET" shall mean the National Market
System of the National Association of Securities Dealers Automated
Quotations System.
"NETWORK" shall mean the digital frame relay network owned
by VTNLP and managed by VTE which includes the NIBs, the Hubs, all
equipment associated with the NIBs and Hubs, all connections between the
NIBs and the Hubs, and all connections between the Hubs.
"NIB" shall mean a Network interface box, developed by VTE
and utilized by VTE, VTN, VTNLP and the Franchisees.
"OGCL" shall mean the Ohio General Corporation Law.
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"OPERATING PROPERTY" shall mean any property owned, leased,
or operated by the Party in question or by any of its Subsidiaries or in
which such Party or Subsidiary holds a security interest or other
interest (including an interest in a fiduciary capacity), and, where
required by the context, includes the owner or operator of such
property, but only with respect to such property.
"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
"PARTICIPATION FACILITY" shall mean any facility or
property in which the Party in question or any of its Subsidiaries
participates in the management and, where required by the context, said
term means the owner or operator of such facility or property, but only
with respect to such facility or property.
"PARTNER INTEREST" shall have the meaning set forth in the
MPI Purchase Agreement.
"PARTY" shall mean either VTN or Premiere, and "Parties"
shall mean both VTE and Premiere.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets, or business.
"PERSON" shall mean a natural person or any legal,
commercial or governmental entity, such as, but not limited to, a
corporation, general partnership, joint venture, limited partnership,
limited liability company, trust, business association, group acting in
concert, or any person acting in a representative capacity.
"PREMIERE CAPITAL STOCK" shall mean, collectively, the
Premiere Common Stock, the Premiere Preferred Stock and any other class
or series of capital stock of Premiere.
"PREMIERE COMMON STOCK" shall mean the $0.01 par value
common stock of Premiere.
"PREMIERE DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Premiere Technologies, Inc. Disclosure Memorandum"
delivered prior to the date of this Agreement to VTN describing in
reasonable detail the matters contained therein and, with respect to
each disclosure made therein, specifically referencing each Section of
this Agreement under which such disclosure is being made. Information
disclosed with respect to one Section shall not be deemed to be
disclosed for purposes of any other Section not specifically referenced
with respect thereto.
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"PREMIERE ENTITIES" shall mean, collectively, Premiere and
all Premiere Subsidiaries.
"PREMIERE FINANCIAL STATEMENTS" shall mean (i) the
consolidated balance sheets (including related notes and schedules, if
any) of Premiere as of December 31, 1996 and 1995, and the related
statements of operations, changes in stockholders' equity, and cash
flows (including related notes and schedules, if any) for each of the
three fiscal years ended December 31, 1996, 1995 and 1994, as filed by
Premiere in SEC Documents, and (ii) the consolidated balance sheets of
Premiere (including related notes and schedules, if any) and related
statements of operations, changes in stockholders' equity, and cash
flows (including related notes and schedules, if any) included in SEC
Documents filed with respect to periods ended subsequent to December 31,
1996.
"PREMIERE MATERIAL ADVERSE EFFECT" shall mean an event,
change or occurrence which, individually or together with any other
event, change or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of Premiere and
its Subsidiaries, taken as a whole, or (ii) the ability of Premiere to
perform its obligations under this Agreement or to consummate the Merger
or the other transactions contemplated by this Agreement, provided that
"Material Adverse Effect" shall not be deemed to include the impact of
(a) changes in Laws of general applicability or interpretations thereof
by courts or governmental authorities, (b) changes in generally accepted
accounting principles, (c) actions and omissions of Premiere (or any of
its Subsidiaries) taken with the prior informed written Consent of VTN
in contemplation of the transactions contemplated hereby, and (d) the
direct effects of compliance with this Agreement on the operating
performance of Premiere, including expenses incurred by Premiere in
consummating the transactions contemplated by this Agreement.
"PREMIERE PREFERRED STOCK" shall mean the $0.01 par value
preferred stock of Premiere.
"PREMIERE STOCK PLANS" shall mean the existing stock option
and other stock-based compensation plans of Premiere designated as
follows: Premiere Technologies, Inc. 1994 Stock Option Plan and Premiere
Technologies, Inc. Amended and Restated 1995 Stock Plan.
"PREMIERE SUBSIDIARIES" shall mean the Subsidiaries of
Premiere, which shall include the Premiere Subsidiaries described in
Section 6.4 and any corporation or other organization acquired as a
Subsidiary of Premiere in the future and held as a Subsidiary by
Premiere at the Effective Time.
"PROTECTED TERRITORY" shall mean the territory in which a
Franchisee solicits and provides services and products to customers for
digital voice messaging services as such territory is defined in the
applicable Franchise Agreement.
"PROXY STATEMENT" shall mean the proxy statement used by
VTN to solicit the approval of its stockholders of the transactions
contemplated by this Agreement.
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<PAGE>
"RELIABLY HANDLING" as used in this section shall mean delivering
-----------------
a complete voice mail message to electronic storage at the Service Center
which hosts the voice messaging service of the intended recipient of the
message so that the intended recipient may listen to the message within an
average of forty-five (45) minutes of the time the message was recorded by
the sender.
"REGULATORY AUTHORITIES" shall mean, collectively, the SEC, the
----------------------
NASD, the Federal Trade Commission, the United States Department of
Justice, and all other federal, state, county, local or other governmental
or regulatory agencies, authorities (including self-regulatory
authorities), instrumentalities, commissions, boards or bodies having
jurisdiction over the Parties and their respective Subsidiaries.
"RELATED PERSON" shall mean, with regard to any Stockholder or
any director, officer or employee of any VTN Entity, his or her spouse,
parent, sibling, child, aunt, uncle, niece, nephew, in-law, grandparent and
grandchild (including by adoption or remarriage) and any trustees or other
fiduciaries for the benefit of such relatives.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative engaged
by a Person.
"RESTRICTED TERRITORY" shall mean the geographic area consisting
of the territory within a fifty (50) mile radius of each Service Center
operated by VTE or a Franchisee immediately prior to the execution of this
Agreement. The Parties further agree that the "Restricted Territory"
extends only to the area in which VTE is doing business directly, or has
licensed a Franchisee to do business, at the time of this Agreement and is
only as broad as necessary to protect the interest of Premiere in the
business of VTE.
"SALES TERRITORY" shall mean the geographic areas into which a
Protected Territory is divided under the relevant Franchise Agreement.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed, or
required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, and the
rules and regulations of any Regulatory Authority promulgated thereunder.
"SERVICE CENTER" shall mean a site owned or operated by a VTE
Entity or a Franchisee which houses one or more Centigram voice mail
servers used to store messages for retrieval by users within the local
service area of the Service Center, as well as one or more NIBs and routers
used to transmit voice message packet data to a Hub via the T1 local loop.
-56-
<PAGE>
"SRA" shall mean a service representative agreement
executed by VTE and a service representative relating to the provision
of services on behalf of VTE with respect to certain Franchises.
"STOCKHOLDERS' REPRESENTATIVE" shall mean the Escrow Committee
established under the General Escrow Agreement and the Specific Escrow
Agreement
"STOCKHOLDERS' CLOSING DOCUMENTS" shall mean the General Escrow
Agreement, the Specific Escrow Agreement, the Employment Agreements, the
Releases, and the Noncompetition Agreements.
"STOCKHOLDERS' MEETING" shall mean the meeting of the
stockholders of VTN to be held pursuant to Section 8.1, including any
adjournment or adjournments thereof.
"SUB COMMON STOCK" shall mean the no par value common stock of
Sub.
"SUBSIDIARIES" shall mean all those corporations, associations,
or other business entities of which the entity in question either (i) owns
or controls 50% or more of the outstanding equity securities either
directly or through an unbroken chain of entities as to each of which 50%
or more of the outstanding equity securities is owned directly or
indirectly by its parent (provided, there shall not be included any such
entity the equity securities of which are owned or controlled in a
fiduciary capacity), (ii) in the case of partnerships, serves as a general
partner, (iii) in the case of a limited liability company, serves as a
managing member, or (iv) otherwise has the ability to elect a majority of
the directors, trustees or managing members thereof.
"SURVIVING CORPORATION" shall mean VTN as the surviving
corporation resulting from the Merger.
"SUNTRUST" shall mean SunTrust Bank of Atlanta,, as Exchange
Agent or as Escrow Agent under the General Escrow Agreement and the
Specific Escrow Agreement, as applicable.
"SYSTEM" as used in this section shall mean the entire voice
messaging system currently operated by VTE, VTN, VTNLP and the Franchisees,
including but not limited to the Network, all of the Service Centers, and
all connections between the Network and the Service Centers.
"TAX RETURN" shall mean any report, return, information return,
or other information required to be supplied to a taxing authority in
connection with Taxes, including any return of an affiliated or combined or
unitary group that includes a Party or its Subsidiaries.
"TAX" or "TAXES" shall mean any federal, state, county, local, or
foreign taxes, however denominated, including income, gross receipts,
excise, employment, sales, use, transfer, license, payroll, franchise,
severance, stamp, occupation, windfall profits, environmental, federal
highway use, commercial rent, customs duties, capital stock, paid-up
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<PAGE>
capital, profits, withholding, Social Security, single business and
unemployment, disability, real property, personal property, registration,
ad valorem, value added, alternative or add-on minimum, estimated, or other
tax or governmental fee of any kind whatsoever, imposes or required to be
withheld by the United States or any state, county, local or foreign
government or subdivision or agency thereof, including any interest,
penalties, and additions imposed thereon or with respect thereto.
"THIRD PARTY CLAIM" shall mean any Litigation that is initiated
against an Indemnitee by a Person other than an Indemnitor and which, if
prosecuted, could result in a Loss for which the Indemnitee is entitled to
indemnification under Article 10.
"VTE" shall mean Voice-Tel Enterprises, Inc., a Delaware
corporation.
"VTE MERGER" shall be the merger of PTEK Merger Corporation with
and into VTE pursuant to the VTE Merger Agreement.
"VTE MERGER AGREEMENT" shall mean the Agreement and Plan of
Merger of even date herewith among Premiere, PTEK Merger Corporation and
VNT.
"VTE PURCHASE PRICE" shall have the meaning set forth in the VTE
Merger Agreement.
"VTN COMMON STOCK" shall mean the no par value common stock of
VTN.
"VTN Confidential Information" means information, other than VTN
Trade Secrets, which relates to VTN, VTN's business, or VTN's suppliers or
customers that is not generally known by persons not employed by VTN and
which Stockholder has learned as a consequence of his or her relationship
to VNT. Such information includes, without limitation, to the extent it is
not considered a VTN Trade Secret, financial information, strategic plans
and forecasts, marketing plans and forecasts, franchisee lists, customer
lilts including NAP customers, customer pricing and order data, supplier
lists, or technical information relating to the VTN's products or services.
"VTN Confidential Information" shall not include information which has
become generally available to the public by the act of one who has the
right to disclose such information without violating a legal right of
Premiere or VTN.
"VTN DISCLOSURE MEMORANDUM" shall mean the written information
entitled "VTN, Inc. Disclosure Memorandum" delivered prior to the date of
this Agreement to Premiere describing in reasonable detail the matters
contained therein and, with respect to each disclosure made therein,
specifically referencing each Section of this Agreement under which such
disclosure is being made. Information disclosed with respect to one Section
shall not be deemed to be disclosed for purposes of any other Section not
specifically referenced with respect thereto.
"VTN ENTITIES" shall mean, collectively, VTN and all VTN
Subsidiaries.
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<PAGE>
"VTN FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of VNT as of
December 31, 1996, and 1995, and the related statements of income, changes
in stockholders' equity, and cash flows (including related notes and
schedules, if any) for each of the three fiscal years ended December 31,
1996, 1995 and 1994, and (ii) the consolidated balance sheets of VNT
(including related notes and schedules, if any) and related statements of
income, changes in stockholders' equity, and cash flows (including related
notes and schedules, if any) with respect to periods ended subsequent to
December 31, 1996.
"VTN INTELLECTUAL PROPERTY RIGHT" shall mean any Intellectual
Property Right used by any VTN Entity in the course of its business.
"VTN MATERIAL ADVERSE EFFECT" shall mean an event, change or
occurrence which, individually or together with another event, change or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of VTN and VTN, taken as a whole, or
(ii) the ability of VTN to perform its obligations under this Agreement or
to consummate the Merger or the other transactions contemplated by this
Agreement, provided that "VTN Material Adverse Effect: shall not be deemed
to include the impact of (a) changes in Laws of general applicability or
interpretations thereof by courts or governmental authorities, (b) changes
in generally accepted accounting principles, (c) actions and omissions of
VTN (or any of its Subsidiaries) taken with the prior and informed written
Consent of Premiere in contemplation of the transactions contemplated
hereby, and (d) the direct effects of compliance with this Agreement on the
operating performance of VTN, including expenses incurred by VTN in
consummating the transactions contemplated by this Agreement.
"VTN PRODUCTS AND SERVICES" shall mean the interactive voice
messaging services and related equipment provided by the VTN Entities to
customers in the course of their business operations.
"VTN STOCK PLAN" shall mean the existing stock option plan of VTN
designated as follows: 1991 Non-Qualified and Incentive Stock Option Plan
of VTN, Inc.
"VTN SUBSIDIARIES" shall mean the Subsidiaries of VTN, which
shall include the VNT Subsidiaries described in Section 5.5 and any
corporation or other organization acquired as a Subsidiary of VNT in the
future and held as a Subsidiary by VNT at the Effective Time.
"VTN TRADE SECRETS" shall mean all secret, proprietary or
confidential information regarding VTN or its business, including any and
all information not generally known to, or ascertainable by, persons not
employed by VNT, the disclosure or knowledge of which would permit those
persons to derive actual or potential economic value therefrom or to cause
economic or financial harm to VTN. "VTN Trade Secrets" shall not including
information that has become generally available to the public by the act of
one who has the right to disclose such information without violating a
legal right of Premiere or VTN.
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<PAGE>
"VTNLP" shall mean Voice-Tel Network Limited Partnership, a
Delaware limited partnership.
(b) The terms set forth below shall have the meanings ascribed
thereto in the referenced sections:
<TABLE>
<S> <C>
Average Closing Price Section 3.1(c)
Closing Section 1.2
Per Share Purchase Price Section 3.1(c)
Takeover Laws Section 5.23
Average Closing Price Limitations Section 3.1(c)
Base Exchange Ratio Section 3.1(c)
Effective Time Section 1.3
Employment Agreements Section 9.1(k)
ERISA Affiliate Section 5.15(b)
Escrow Shares Section 10.4
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Firm Exchange Ratio Section 3.1(c)
General Escrow Section 10.4
General Escrow Agreement Section 4.3
General Escrow Exchange Ratio Section 3.1(c)
Merger Section 1.1
Noncompetition Agreements Section 9.2(k)
Premiere SEC Reports Section 6.5(a)
Specific Escrow Section 10.4
Specific Escrow Agreement Section 4.3
Specific Escrow Exchange Ratio Section 3.1(c)
Tax Opinion Section 9.1(h)
Voting Agreements Section 5.25
VTN Benefit Plans Section 5.15
VTN Contracts Section 5.16
VTN ERISA Plan Section 5.15
VTN Stock Options Section 3.6
VTN Pension Plan Section 5.15
</TABLE>
(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
12.2 Expenses.
--------
(a) Except as otherwise provided in this Section 12.2, each of
the Parties shall bear and pay all direct costs and expenses incurred by it or
on its behalf in connection with the transactions contemplated hereunder,
including filing, registration and application fees, printing
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<PAGE>
fees, and fees and expenses of its own financial or other consultants,
investment bankers, accountants, and counsel.
(b) Nothing contained in this Section 12.2 shall constitute or
shall be deemed to constitute liquidated damages for the willful breach by a
Party of the terms of this Agreement or otherwise limit the rights of the
nonbreaching Party.
12.3 BROKERS AND FINDERS. Except for Salomon Brothers Inc. as to VTN
-------------------
and except for Robertson, Stephens & Company as to Premiere, each of the Parties
represents and warrants that neither it nor any of its officers, directors,
employees, or Affiliates has employed any broker or finder or incurred any
Liability for any financial advisory fees, investment bankers' fees, brokerage
fees, commissions, or finders' fees in connection with this Agreement or the
transactions contemplated hereby. In the event of a claim by any broker or
finder based upon his or its representing or being retained by or allegedly
representing or being retained by VTN or any Stockholder or by Premiere, each of
VTN and the Stockholders and Premiere, as the case may be, agrees to indemnify
and hold the other Party harmless of and from any Liability in respect of any
such claim.
12.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein,
----------------
this Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral (except, as to Section
8.6(b), for the Confidentiality Agreement). Nothing in this Agreement expressed
or implied, is intended to confer upon any Person, other than the Parties or
their respective successors, any rights, remedies, obligations, or liabilities
under or by reason of this Agreement.
12.5 AMENDMENTS. To the extent permitted by Law, this Agreement may be
----------
amended by a subsequent writing signed by each of the Parties upon the approval
of each of the Parties, whether before or after stockholder approval of this
Agreement has been obtained; provided, that after any such approval by the
holders of VTN Common Stock, there shall be made no amendment that reduces or
modifies in any material respect the consideration to be received by holders of
VTN Common Stock, to the extent that Section ________)of the DGCL requires
further approval by such stockholders, without the further approval of such
stockholders.
12.6 WAIVERS.
-------
(a) Prior to or at the Effective Time, Premiere, acting through
its Board of Directors, chief executive officer or other authorized officer,
shall have the right to waive any Default in the performance of any term of this
Agreement by VTN or the Stockholders, to waive or extend the time for the
compliance or fulfillment by VTN or the Stockholders of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of Premiere under this Agreement, except any
condition which, if not satisfied, would result in the violation of any Law. No
such waiver shall be effective unless in writing signed by a duly authorized
officer of Premiere.
-61-
<PAGE>
(b) Prior to or at the Effective Time, VTN, acting through its
Board of Directors, chief executive officer or other authorized officer, shall
have the right to waive any Default in the performance of any term of this
Agreement by Premiere, to waive or extend the time for the compliance or
fulfillment by Premiere of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of VTN
and the Stockholders under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of VTN.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
12.7 ASSIGNMENT. Except as expressly contemplated hereby, neither
----------
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.
12.8 NOTICES. All notices or other communications which are required
-------
or permitted hereunder shall be in writing and sufficient if delivered by hand,
by facsimile transmission, by registered or certified mail, postage pre-paid, or
by courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
VTN or
any Stockholder
(other than Amway): VTN Inc.
Four Commer Park Sq., No 800
23200 Chagrin Boulevard
Cleveland, Ohio 44122
Telecopy Number: (216} 360-4410
Attention: Alan J. Carter, Chairman
Copy to Counsel: Benesch, Friedlander, Coplan & Aronoff
2300 BP America Building
200 Public Square
Cleveland, Ohio 44114
Telecopy Number: (216 363-4588
Attention: Michael Wager, Esq.
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<PAGE>
Amway: Amway Corporation
7575 Fulton Street Exit
Ada, Michigan 49335-0001
Attention: Tom Edwards
Copy to Counsel: Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Thomas C. Daniels, Esq.
Premiere: Premiere Technologies, Inc.
The Lenox Building, Suite 400
3399 Peachtree Road, NE
Atlanta, Georgia 30326
Telecopy Number: (404) 262-8450
Attention: Boland T. Jones, President
Copy to Counsel: Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309
Telecopy Number: (404) 881-7777
Attention: Jeffrey A. Allred, Esq.
12.9 GOVERNING LAW. This Agreement shall be governed by and
-------------
construed in accordance with the Laws of the State of Georgia, without regard to
any applicable conflicts of Laws.
12.10 COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
12.11 CAPTIONS; ARTICLES AND SECTIONS. The captions contained in this
-------------------------------
Agreement are for reference purposes only and are not part of this Agreement.
Unless otherwise indicated, all references to particular Articles or Sections
shall mean and refer to the referenced Articles and Sections of this Agreement.
12.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty or
--------------
ambiguity herein shall be construed or resolved against any party, whether under
any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. The parties
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<PAGE>
acknowledge and agree that this Agreement has been reviewed, negotiated, and
accepted by all parties and their attorneys and shall be construed and
interpreted according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of all parties hereto.
12.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
------------------------
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
12.14 SEVERABILITY. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
12.15 SURVIVAL. All representations, warranties and agreements
--------
contained in this Agreement or in any certificate delivered pursuant to this
Agreement shall survive the Closing notwithstanding any investigation conducted
with respect thereto or any knowledge acquired as to the accuracy or inaccuracy
of any such representation or warranty.
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<PAGE>
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by its duly authorized officers as of the day and year
first above written.
PREMIERE TECHNOLOGIES, INC.
By: /s/ Patrick G. Jones
--------------------------------------
Senior Vice President
PTEK MERGER CORPORATION
By: /s/ Patrick G. Jones
--------------------------------------
Senior Vice President
VTN, INC.
By: /s/ Alan J. Carter
--------------------------------------
Chairman
By: /s/ Martin J. Huebschman
--------------------------------------
President
THE STOCKHOLDERS:
/s/ Thomas G. Widdoes
-----------------------------------(SEAL)
Thomas G. Widdoes
/s/ Warren E. Carter II
-----------------------------------(SEAL)
Warren E. Carter II
/s/ Alan J. Carter
-----------------------------------(SEAL)
Alan J. Carter
/s/ Charles M. Feuer
-----------------------------------(SEAL)
Charles M. Feuer
/s/ Martin J. Huebschman
-----------------------------------(SEAL)
Martin J. Huebschman
/s/ William H. Stephens
-----------------------------------(SEAL)
William H. Stephens
[SIGNATURES CONTINUED ON NEXT PAGE]
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<PAGE>
The undersigned, Amway Corporation, shall be deemed a Stockholder under
this Agreement and Plan of Merger if, and only if, the Amway Convertible Note is
converted prior to the Effective Time.
AMWAY CORPORATION,
a Delaware corporation
By: /s/ Tom Edwards
----------------------------------------
Title: Vice President - Corporate
Marketing
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<PAGE>
EXHIBIT 2.3
<PAGE>
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
PREMIERE TECHNOLOGIES, INC.
AND
MERCHANDISING PRODUCTIONS, INC.
Dated as of April 2, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES.................................................................... 1
PREAMBLE................................................................... 1
ARTICLE 1 - PURCHASE AND SALE.............................................. 1
1.1 Purchase and Assumption...................................... 1
1.2 Purchase Price; Payment...................................... 1
1.3 Transfer Documents........................................... 1
1.4 Time and Place of Closing.................................... 1
ARTICLE 2 - [RESERVED]..................................................... 2
ARTICLE 3 - [RESERVED]..................................................... 2
ARTICLE 4 - [RESERVED]..................................................... 2
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF MPI.......................... 2
5.1 Organization, Standing, and Power............................ 2
5.2 Authority of MPI; No Breach By Agreement..................... 2
5.3 Title........................................................ 2
5.4 Legal Proceedings............................................ 2
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF PREMIERE..................... 3
6.1 Organization, Standing, and Power............................ 3
6.2 Authority; No Breach By Agreement............................ 3
ARTICLE 7 - [RESERVED]..................................................... 4
ARTICLE 8 - ADDITIONAL AGREEMENTS.......................................... 4
8.1 Agreement as to Efforts to Consummate........................ 4
8.2 Investigation and Confidentiality............................ 4
8.3 Press Releases............................................... 4
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO
CONSUMMATE................................................................. 5
9.1 Conditions to Obligations of Each Party...................... 5
9.2 Conditions to Obligations of Premiere........................ 5
9.3 Conditions to Obligations of MPI............................. 6
ARTICLE 10 - [RESERVED].................................................... 7
ARTICLE 11 - TERMINATION................................................... 7
11.1 Termination.................................................. 7
11.2 Effect of Termination........................................ 7
ARTICLE 12 - MISCELLANEOUS................................................. 8
12.1 Definitions.................................................. 8
12.2 Expenses..................................................... 12
12.3 Brokers and Finders.......................................... 12
12.4 Entire Agreement............................................. 12
12.5 Amendments................................................... 12
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
12.6 Waivers....................................................... 12
12.7 Assignment.................................................... 13
12.8 Notices....................................................... 13
12.9 Governing Law................................................. 14
12.10 Counterparts.................................................. 14
12.11 Captions; Articles and Sections............................... 14
12.12 Interpretations............................................... 14
12.13 Enforcement of Agreement...................................... 14
12.14 Severability.................................................. 15
12.15 Survival...................................................... 15
12.16 Further Assurances............................................ 15
SIGNATURES............................................................ 15
</TABLE>
-ii-
<PAGE>
PURCHASE AND SALE AGREEMENT
---------------------------
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and
entered into as of April 2, 1997, by and between PREMIERE TECHNOLOGIES, INC.
("Premiere"), a Georgia corporation; and MERCHANDISING PRODUCTIONS, INC.
("MPI"), a Delaware corporation and wholly-owned subsidiary of AMWAY CORPORATION
("Amway"), a Michigan corporation
PREAMBLE
--------
This Agreement provides for the acquisition by Premiere or a wholly
owned subsidiary thereof of the limited partner interests held by MPI in Voice-
Tel Network Limited Partnership ("VTNLP"), a Delaware limited partnership.
Certain terms used in this Agreement are defined in Section 12.1 of
this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1 PURCHASE AND ASSUMPTION. Subject to the terms and conditions of
-----------------------
this Agreement, on the Closing Date, Premiere, or a direct or indirect wholly-
owned Subsidiary of Premiere, will purchase from MPI, and MPI will sell, grant,
convey, assign, transfer and deliver to Premiere or its direct or indirect
wholly-owned Subsidiary, the limited partnership interest held by MPI in VTNLP
(the "Partner Interest"), free and clear of all Liens, and Premiere or its
wholly owned subsidiary shall assume and perform from and after the Closing Date
all obligations of MPI in its capacity as a limited partner arising from and
after the Closing Date.
1.2 PURCHASE PRICE; PAYMENT. In consideration for the Partner
-----------------------
Interest, Premiere will pay to MPI on the Closing Date, Nine Million Two Hundred
Thousand Dollars ($9,200,000) (the "Purchase Price") in cash, by wire transfer
of immediately available funds to a bank account designated in writing by MPI.
1.3 TRANSFER DOCUMENTS. At the Closing, against payment of the
------------------
Purchase Price, MPI shall execute and deliver to Premiere or its direct or
indirect wholly-owned Subsidiary, such instrument or instruments of transfer or
assignment as Premiere shall reasonably request to convey to Premiere or its
Subsidiary the Partner Interest free and clear of all Liens.
1.4 TIME AND PLACE OF CLOSING. The closing of the transactions
-------------------------
contemplated hereby (the "Closing") will take place at such time and on such
date as the Parties, acting through
<PAGE>
their authorized officers, may mutually agree. The Closing shall be held at the
offices of Alston & Bird LLP, Atlanta, Georgia, or at such other location as may
be mutually agreed upon by the Parties.
ARTICLE 2
[RESERVED]
----------
ARTICLE 3
[RESERVED]
----------
ARTICLE 4
[RESERVED]
----------
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MPI
-------------------------------------
MPI hereby represents and warrants to Premiere as follows:
5.1 ORGANIZATION, STANDING, AND POWER. MPI is a corporation duly
---------------------------------
organized, validly existing, and in good standing under the Laws of the State of
Delaware, and has the corporate power and authority to carry on its business as
now conducted and to own, lease and operate its Assets. A true, complete and
correct copy of the VTNLP partnership agreement, as currently in effect, is
attached hereto as Schedule 5.1.
5.2 AUTHORITY OF MPI; NO BREACH BY AGREEMENT. MPI has the corporate
----------------------------------------
power and authority necessary to execute, deliver, and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby. The
execution, delivery, and performance of this Agreement and the consummation of
the transactions contemplated herein have been duly and validly authorized by
all necessary corporate action in respect thereof on the part of MPI. This
Agreement represents a legal, valid, and binding obligation of MPI, enforceable
against MPI in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought).
5.3 TITLE. MPI has good and marketable title to the Partner
-----
Interest, free and clear of all Liens.
5.4 LEGAL PROCEEDINGS. There is no Litigation instituted or pending,
-----------------
or, to the Knowledge of MPI, threatened (or unasserted but considered probable
of assertion and which if
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<PAGE>
asserted would have at least a reasonable probability of an unfavorable outcome)
against MPI or any Affiliate of MPI that could have a material adverse effect on
the Partner Interest or the ability of MPI to consummate the transaction
contemplated hereby, or against the Partner Interest, nor are there any Orders
of any Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against MPI or any Affiliate of MPI that could have a material
adverse effect on the Partner Interest or the ability of MPI to consummate the
transaction contemplated hereby.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PREMIERE
------------------------------------------
Premiere hereby represents and warrants to MPI as follows:
6.1 Organization, Standing, and Power. Premiere is a corporation
---------------------------------
duly organized, validly existing, and in good standing under the Laws of the
State of Georgia, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its Assets. Premiere is
duly qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Premiere Material Adverse Effect.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
---------------------------------
(a) Premiere has the corporate power and authority necessary to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated herein have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of
Premiere. This Agreement represents a legal, valid, and binding
obligation of Premiere, enforceable against Premiere in accordance with
its terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement
of creditors' rights generally and except that the availability of the
equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding may be
brought).
(b) Neither the execution and delivery of this Agreement by
Premiere, nor the consummation by Premiere of the transactions
contemplated hereby, nor compliance by Premiere with any of the
provisions hereof, will (i) conflict with or result in a breach of any
provision of Premiere's Articles of Incorporation or Bylaws or any
resolution adopted by the board of directors or shareholders of Premiere
or any of its Subsidiaries, or (ii) constitute or result in a Default
under, or require any Consent pursuant to, or result in the creation of
any Lien on any Asset of any Premiere Entity under, any Contract or
Permit of any Premiere Entity, where such Default or Lien, or any
failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Premiere Material Adverse Effect,
or,
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<PAGE>
(iii) subject to receipt of the requisite Consents referred to in
Section 9.1(b), constitute or result in a Default under, or require any
Consent pursuant to, any Law or Order applicable to any Premiere Entity
or any of their respective material Assets.
ARTICLE 7
[RESERVED]
----------
ARTICLE 8
ADDITIONAL AGREEMENTS
---------------------
8.1 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
---------------------------------------
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including using its reasonable efforts to lift
or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
referred to in Article 9; provided, that nothing herein shall preclude either
Party from exercising its rights under this Agreement. Each Party shall use, and
shall cause each of its Subsidiaries to use, its reasonable efforts to obtain
all Consents necessary or desirable for the consummation of the transactions
contemplated by this Agreement.
8.2 INVESTIGATION AND CONFIDENTIALITY.
---------------------------------
(a) Prior to the Closing Date, each Party shall keep the other
Party advised of all material developments relevant to the consummation
of the transactions contemplated.
(b) Each Party shall, and shall cause its advisers and agents
to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to
the Effective Time, each Party shall promptly return or certify the
destruction of all documents and copies thereof, and all work papers
containing confidential information received from the other Party.
8.3 PRESS RELEASES. Prior to the Closing Date, MPI and Premiere
---------------
shall consult with each other as to the form and substance of any press release
or other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.3
shall be deemed to prohibit any Party from making any disclosure which its
outside counsel deems necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law.
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<PAGE>
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
-------------------------------------------------
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
---------------------------------------
obligations of each Party to perform this Agreement and consummate the
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by both Parties pursuant to Section 12.6:
(a) [RESERVED]
----------
(b) [RESERVED]
----------
(c) LEGAL PROCEEDINGS. No court or governmental or regulatory
-----------------
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) or taken any other action which prohibits,
restricts or makes illegal consummation of the transactions contemplated
by this Agreement.
(d) VTE/VTN MERGERS. Sub and VTE shall have consummated the
---------------
VTE Merger, and Sub II and VTN shall have consummated the VTN Merger.
(e) MUTUAL RELEASES. MPI, on the one hand, and VTE, VTN and
---------------
VTNLP, on the other, shall have executed mutual releases reasonably
satisfactory to MPI, on the one hand, and VTE, VTN and VTNLP, on the
other; provided, however, that MPI shall not be required to release any
claims arising under the Amway Reseller Agreement.
9.2 CONDITIONS TO OBLIGATIONS OF PREMIERE. The obligations of
-------------------------------------
Premiere to perform this Agreement and consummate the transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by Premiere pursuant to Section 12.6(a):
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
------------------------------
Section 9.2(a), the accuracy of the representations and warranties of
MPI set forth in this Agreement shall be assessed as of the date of this
Agreement and as of the Closing Date with the same effect as though all
such representations and warranties had been made on and as of the
Closing Date (provided that representations and warranties which are
confined to a specified date shall speak only as of such date). All
other representations and warranties of MPI contained in this Agreement
or any agreement, certificate or instrument entered into or delivered in
connection herewith shall be true and correct in all material respects.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
---------------------------------------
the agreements and covenants of MPI to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Closing Date shall have been duly performed and complied
with in all material respects.
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<PAGE>
(c) CERTIFICATES. MPI shall have delivered to Premiere (i) a
------------
certificate, dated as of the Closing Date and signed on its behalf by
its chief executive officer and its chief financial officer, to the
effect that the conditions set forth in Section 9.1 as relates to MPI
and in Section 9.2(a) and 9.2(b) have been satisfied and (ii) certified
copies of resolutions duly adopted by MPI's Board of Directors
evidencing the taking of all corporate action necessary to authorize the
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such
reasonable detail as Premiere and its counsel shall request.
(d) OPINIONS OF COUNSEL. Premiere shall have received an
-------------------
opinion of counsel to MPI, dated as of the Closing, containing customary
opinions relating to organization, authority and enforceability.
9.3 CONDITIONS TO OBLIGATIONS OF MPI. The obligations of MPI to
--------------------------------
perform this Agreement and consummate the transactions contemplated hereby are
subject to the satisfaction of the following conditions, unless waived by MPI
pursuant to Section 12.6(b):
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
------------------------------
Section 9.3(a), the accuracy of the representations and warranties of
Premiere set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Closing Date with the same effect as though
all such representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties which are
confined to a specified date shall speak only as of such date). The
representations and warranties of Premiere set forth in this Agreement
shall be true and correct in all material respects.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
---------------------------------------
the agreements and covenants of Premiere to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Closing Date shall have been duly performed and
complied with in all material respects.
(c) CERTIFICATES. Premiere shall have delivered to MPI (i) a
------------
certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the
effect that the conditions set forth in Section 9.1 as relates to
Premiere and in Section 9.3(a) and 9.3(b) have been satisfied, and (ii)
certified copies of resolutions duly adopted by Premiere's Board of
Directors evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement, and
the consummation of the transactions contemplated hereby, all in such
reasonable detail as MPI and its counsel shall request.
(d) OPINION OF COUNSEL. MPI shall have received an opinion of
------------------
Alston & Bird LLP, counsel to Premiere, dated as of the Closing Date,
containing customary opinions relating to organization, authority and
enforceability..
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ARTICLE 10
[RESERVED]
----------
ARTICLE 11
TERMINATION
-----------
11.1 TERMINATION. Notwithstanding any other provision of this
-----------
Agreement, this Agreement may be terminated at any time prior to the Closing
Date:
(a) By mutual consent of Premiere and MPI; or
(b) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event of a
material breach by the other Party of any representation or warranty
contained in this Agreement which cannot be or has not been cured within
30 days after the giving of written notice to the breaching Party of
such breach; or
(c) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event of a
material breach by the other Party of any covenant or agreement
contained in this Agreement which cannot be or has not been cured within
30 days after the giving of written notice to the breaching Party of
such breach; or
(d) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement relating to Consents of
Regulatory Authority in the event any Consent of any Regulatory
Authority required for consummation of the transactions contemplated
hereby shall have been denied by final nonappealable action of such
authority or if any action taken by such authority is not appealed
within the time limit for appeal; or
(e) By either Party in the event that the Closing shall not
have occurred by June 30, 1997, if the failure to consummate the
transactions contemplated hereby on or before such date is not caused by
any breach of this Agreement by the Party electing to terminate pursuant
to this Section 11.1(e); or
(f) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event that any of
the conditions precedent to the obligations of such Party to consummate
the transactions contemplated hereby cannot be satisfied or fulfilled,
or have not been waived in writing, by the date specified in Section
11.1(e).
11.2 EFFECT OF TERMINATION. In the event of the termination and
---------------------
abandonment of this Agreement pursuant to Section 11.1, this Agreement shall
become void and have no effect, except that (i) the provisions of this Section
11.2 and Article 12 and Section 8.6(b) shall survive any such
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<PAGE>
termination and abandonment, and (ii) a termination pursuant to Sections
11.1(b), 11.1(c) or 11.1(f) shall not relieve the breaching Party from Liability
for an uncured willful breach of a representation or warranty or any breach of
any covenant or agreement contained in this Agreement, nor release the other
Party for any liability for any breach of any covenant or agreement contained in
this Agreement.
ARTICLE 12
MISCELLANEOUS
-------------
12.1 DEFINITIONS.
-----------
(a) Except as otherwise provided herein, the capitalized terms
set forth below shall have the following meanings:
"AFFILIATE" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person; (ii) any
officer, director, partner, employer, or direct or indirect beneficial
owner of any 10% or greater equity or voting interest of such Person; or
(iii) any other Person for which a Person described in clause (ii) acts
in any such capacity.
"AGREEMENT" shall mean this Purchase and Sale Agreement,
including the Exhibits delivered pursuant hereto and incorporated herein
by reference.
"AMWAY" shall mean Amway Corporation, a Michigan
corporation and the sole stockholder of MPI.
"AMWAY RESELLER AGREEMENT" shall mean the Services and
Reseller Agreement dated September 28, `1990, between Amway and
Voice-Tel Enterpises, Inc., as amended by First Amendment to Service and
Reseller Agreement dated March 19, 1996 and Second Amendment to Service
and Reseller Agreement dated June 25, 1996.
"ASSETS" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character
and description, whether real, personal or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of such
Person and wherever located.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
-8-
<PAGE>
"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking
of any kind or character, or other document to which any Person is a
party or that is binding on any Person or its capital stock, Assets or
business.
"DEFAULT" shall mean (i) any breach or violation of, default
under, contravention of, or conflict with, any Contract, Law, Order, or
Permit, (ii) any occurrence of any event that with the passage of time
or the giving of notice or both would constitute a breach or violation
of, default under, contravention of, or conflict with, any Contract,
Law, Order, or Permit, or (iii) any occurrence of any event that with or
without the passage of time or the giving of notice would give rise to a
right of any Person to exercise any remedy or obtain any relief under,
terminate or revoke, suspend, cancel, or modify or change the current
terms of, or renegotiate, or to accelerate the maturity or performance
of, or to increase or impose any Liability under, any Contract, Law,
Order, or Permit.
"EQUITY RIGHTS" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever
relating to, or securities or rights convertible into or exchangeable
for, shares of the capital stock of a Person or by which a Person is or
may be bound to issue additional shares of its capital stock or other
Equity Rights.
"EXHIBITS" A through B, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits
are hereby incorporated by reference herein and made a part hereof, and
may be referred to in this Agreement and any other related instrument or
document without being attached hereto.
"KNOWLEDGE" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall mean
the personal knowledge after due inquiry of those facts that are known
or should reasonably have been known after due inquiry and, as used with
respect to a Person that is a corporation or other business entity,
after due inquiry by the chairman, president, chief financial officer,
chief accounting officer, chief operating officer, general counsel, any
assistant or deputy general counsel, or any senior, executive or other
vice president of such Person and the knowledge of any such persons
obtained or which would have been obtained from a reasonable
investigation.
"LAW" shall mean any code, law (including common law), ordinance,
regulation, reporting or licensing requirement, rule, or statute
applicable to a Person or its Assets, Liabilities, or business,
including those promulgated, interpreted or enforced by any Regulatory
Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or expense
(including costs of investigation, collection and defense), claim,
deficiency, guaranty or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for
collection or
-9-
<PAGE>
deposit in the ordinary course of business) of any type, whether
accrued, absolute or contingent, liquidated or unliquidated, matured or
unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest,
title retention or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens for
current property Taxes not yet due and payable, and (iii) Liens which do
not materially impair the use of or title to the Assets subject to such
Lien.
"LITIGATION" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, governmental or other
examination or investigation, hearing, administrative or other
proceeding relating to or affecting a Party, its business, its Assets
(including Contracts related to it), or the transactions contemplated by
this Agreement.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling,
or writ of any federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
"PARTY" shall mean either MPI or Premiere, and "PARTIES" shall
mean both MPI and Premiere.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets, or business.
"PERSON" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability
company, trust, business association, group acting in concert, or any
person acting in a representative capacity.
"PREMIERE MATERIAL ADVERSE EFFECT" shall mean an event, change or
occurrence which, individually or together with any other event, change
or occurrence, has a material adverse impact on (i) the financial
position, business, or results of operations of Premiere and its
Subsidiaries, taken as a whole, or (ii) the ability of Premiere to
perform its obligations under this Agreement or to consummate the Merger
or the other transactions contemplated by this Agreement, provided that
"Material Adverse Effect" shall not be deemed to include the impact of
(a) changes in Laws of general applicability or interpretations thereof
by courts or governmental authorities, (b) changes in generally accepted
accounting principles, (c) actions and omissions of Premiere (or any of
its Subsidiaries) taken with the prior informed written Consent of MPI
in contemplation of the transactions contemplated hereby, and (d) the
direct effects of compliance with this
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<PAGE>
Agreement on the operating performance of Premiere, including expenses
incurred by Premiere in consummating the transactions contemplated by
this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the SEC, the
NASD, the Federal Trade Commission, the United States Department of
Justice, and all other federal, state, county, local or other
governmental or regulatory agencies, authorities (including self-
regulatory authorities), instrumentalities, commissions, boards or
bodies having jurisdiction over the Parties and their respective
Subsidiaries.
"VTE MERGER" shall mean the merger of PTEK Merger Corporation
with and into VTE pursuant to the VTE Merger Agreement.
"VTE MERGER AGREEMENT" shall mean the Agreement and Plan of
Merger of even data herewith among Premiere, Sub and VTE.
"MPI MATERIAL ADVERSE EFFECT" shall mean an event, change or
occurrence which, individually or together with another event, change or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of MPI and its Subsidiaries, taken as
a whole, or (ii) the ability of MPI to perform its obligations under
this Agreement or to consummate the transactions contemplated by this
Agreement, provided that "MPI Material Adverse Effect: shall not be
deemed to include the impact of (a) changes in Laws of general
applicability or interpretations thereof by courts or governmental
authorities, (b) changes in generally accepted accounting principles,
(c) actions and omissions of MPI (or any of its Subsdiaries) taken with
the prior and informed written Consent of Premiere in contemplation of
the transactions contemplated hereby, and (d) the direct effects of
compliance with this Agreement on the operating performance of MPI,
including expenses incurred by MPI in consummating the transactions
contemplated by this Agreement.
"VTN" shall mean VTN, Inc., an Ohio corporation and the sole
general partner of VTNLP.
"VTNLP" shall mean Voice-Tel Network Limited Partnership, a
Delaware limited partnership.
"VTN MERGER" shall mean the merger of PTEK Merger Corporation II
("Sub II") with and into VTN pursuant to the VTN Merger Agreement.
"VTN MERGER AGREEMENT" shall mean the Agreement and Plan of
Merger of even date herewith among Premiere, Sub II and VTN.
(b) The terms set forth below shall have the meanings ascribed
thereto in the referenced sections:
Closing Section 1.2
Premiere SEC Reports Section 6.5(a)
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<PAGE>
(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
12.2 EXPENSES.
--------
(a) Except as otherwise provided in this Section 12.2, each of
the Parties shall bear and pay all direct costs and expenses incurred by it or
on its behalf in connection with the transactions contemplated hereunder,
including filing, registration and application fees, printing fees, and fees and
expenses of its own financial or other consultants, investment bankers,
accountants, and counsel.
(b) Nothing contained in this Section 12.2 shall constitute or
shall be deemed to constitute liquidated damages for the willful breach by a
Party of the terms of this Agreement or otherwise limit the rights of the
nonbreaching Party.
12.3 BROKERS AND FINDERS. Except for Robertson, Stephens & Company as
-------------------
to Premiere, each of the Parties represents and warrants that neither it nor any
of its officers, directors, employees, or Affiliates has employed any broker or
finder or incurred any Liability for any financial advisory fees, investment
bankers' fees, brokerage fees, commissions, or finders' fees in connection with
this Agreement or the transactions contemplated hereby. In the event of a claim
by any broker or finder based upon his or its representing or being retained by
or allegedly representing or being retained by MPI or by Premiere, each of MPI
and Premiere, as the case may be, agrees to indemnify and hold the other Party
harmless of and from any Liability in respect of any such claim.
12.4 AGREEMENT. Except as otherwise expressly provided herein, this
---------
Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this Agreement
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.
12.5 AMENDMENTS. To the extent permitted by Law, this Agreement may
----------
be amended by a subsequent writing signed by each of the Parties upon the
approval of each of the Parties.
12.6 WAIVERS.
-------
(a) Prior to or at the Closing Date, Premiere, acting through
its Board of Directors, chief executive officer or other authorized officer,
shall have the right to waive any Default in the performance of any term of this
Agreement by MPI, to waive or extend the time for the compliance or fulfillment
by MPI of any and all of its obligations under this Agreement, and to waive any
or all of the conditions precedent to the obligations of Premiere under this
Agreement,
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<PAGE>
except any condition which, if not satisfied, would result in the violation of
any Law. No such waiver shall be effective unless in writing signed by a duly
authorized officer of Premiere.
(b) Prior to or at the Closing Date, MPI, acting through its
Board of Directors, chief executive officer or other authorized officer, shall
have the right to waive any Default in the performance of any term of this
Agreement by Premiere, to waive or extend the time for the compliance or
fulfillment by Premiere of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of MPI
under this Agreement, except any condition which, if not satisfied, would result
in the violation of any Law. No such waiver shall be effective unless in writing
signed by a duly authorized officer of MPI.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
12.7 ASSIGNMENT. Except as expressly contemplated hereby, neither
----------
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.
12.8 NOTICES. All notices or other communications which are required
-------
or permitted hereunder shall be in writing and sufficient if delivered by hand,
by facsimile transmission, by registered or certified mail, postage pre-paid, or
by courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
MPI: c/o Amway Corporation
7575 Fulton Street Exit
Ada, Michigan 49335-0001
Attention: Tom Edwards
Copy to Counsel: Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Thomas C. Daniels, Esq.
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<PAGE>
Premiere: Premiere Technologies, Inc.
The Lenox Building, Suite 400
3399 Peachtree Road, NE
Atlanta, Georgia 30326
Telecopy Number: (404) 262-8450
Attention: Boland T. Jones, President
Copy to Counsel: Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309
Telecopy Number: (404) 881-7777
Attention: Jeffrey A. Allred, Esq.
12.9 GOVERNING LAW. This Agreement shall be governed by and
-------------
construed in accordance with the Laws of the State of Georgia, without regard to
any applicable conflicts of Laws.
12.10 COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
12.11 CAPTIONS; ARTICLES AND SECTIONS. The captions contained in this
-------------------------------
Agreement are for reference purposes only and are not part of this Agreement.
Unless otherwise indicated, all references to particular Articles or Sections
shall mean and refer to the referenced Articles and Sections of this Agreement.
12.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty or
---------------
ambiguity herein shall be construed or resolved against any party, whether under
any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. The parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of all parties
hereto.
12.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
------------------------
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
-14-
<PAGE>
12.14 SEVERABILITY. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
12.15 SURVIVAL. All representations, warranties and agreements
--------
contained in this Agreement or in any certificate delivered pursuant to this
Agreement shall survive the Closing notwithstanding any investigation conducted
with respect thereto or any knowledge acquired as to the accuracy or inaccuracy
of any such representation or warranty.
12.16 FURTHER ASSURANCES. MPI will, at any time and from time to time
after the Closing Date, upon the request of Premiere, do, execute, acknowledge
and deliver, or will cause to be done, executed, acknowledged and delivered, all
such further acts, deeds, assignments, transfers, conveyances, powers of
attorney, receipts, acknowledgments, acceptances and assurances as may be
reasonably required to procure for Premiere any and all of the rights to the
Partner Interest purchased by Premiere hereunder.
IN WITNESS WHEREOF, each of the each of the other Parties has caused
this Agreement to be executed on its behalf by its duly authorized officers as
of the day and year first above written.
PREMIERE TECHNOLOGIES, INC.
By: /s/ Patrick G. Jones
-----------------------------
Its: Senior Vice President
MARKETING PRODUCTIONS, INC.
By: /s/ Tom Edwards
-----------------------------
Its: Authorized Agent
-15-
<PAGE>
EXHIBIT 2.4
<PAGE>
TRANSFER AGREEMENT
BY AND AMONG
PREMIERE TECHNOLOGIES, INC.,
[FRANCHISEE]
AND
OWNERS OF [FRANCHISEE]
DATED AS OF ____________ __, 1997
<PAGE>
TRANSFER AGREEMENT
------------------
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of _________
__, 1997 by and among Premiere Technologies, Inc., a Georgia corporation
("Premiere"), [Franchisee], a __________ (the "Company"), and those parties
listed on the signature pages hereto as the owners of the Company (the
"Owners").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Agreement provides for the acquisition of the Company by
Premiere pursuant to the merger of the Company with and into a wholly owned
subsidiary of Premiere ("Merger Corp"), with Merger Corp as the surviving
corporation in such merger (the "Merger");
WHEREAS, the respective Boards of Directors of Premiere and the Company
have approved the terms and conditions set forth in this Agreement;
WHEREAS, the Owners own at least [one hundred percent (100 %)] of the
equity interests in the Company;
WHEREAS, this Agreement provides for all of the Owners' equity interests in
the Company to be converted into the right to receive [shares of Premiere Stock]
[cash] in connection with the Merger;
[WHEREAS, it is also the intention of the parties hereto that the form of
the transactions with respect to the Company, Premiere and Merger Corp shall
qualify as a "reorganization" within the meaning of Section 368(a) of the Code
for federal income tax purposes; and]
[WHEREAS, it is also the intention of the parties hereto that the business
combination to be effected by the Merger be accounted for as a pooling of
interests.]
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
I. UNIFORM TERMS AND CONDITIONS
--------------------------------
1.1 Incorporation by Reference. The Uniform Terms and Conditions attached
--------------------------
hereto as Exhibit A (the "Uniform Terms") are hereby made a part of and
incorporated herein as if fully restated herein. Capitalized terms not defined
herein shall have the meanings provided in the Uniform Terms.
<PAGE>
II. TERMS OF MERGER
--------------------
2.1 The Merger.
----------
(a) Subject to the terms and conditions of this Agreement, at the
Effective Time, the Company shall be merged with and into Merger Corp in
accordance with the provisions of the business corporation act under the laws of
the State of [Company State] (the "[Company State] Act") and the laws of the
State of Georgia (the "Georgia Act"). Merger Corp shall be the surviving
corporation resulting from the Merger, shall thereafter conduct the business and
operations of the Company as a wholly owned subsidiary of Premiere and shall
continue to be governed by the laws of the State of Georgia. The Merger shall be
consummated pursuant to the terms of this Agreement, which has been approved and
adopted by the respective boards of directors of Premiere, Merger Corp and the
Company.
(b) Subject to the provisions of this Agreement, the parties
shall file [Articles] [a Certificate] of Merger executed in accordance with the
relevant provisions of the [Company State] Act and a Certificate of Merger
executed in accordance with the relevant provisions of the Georgia Act and shall
make all other filings or recordings required under each such Act as soon as
practicable on or after the Closing Date. The Merger and other transactions
contemplated by this Agreement shall become effective on the date and at the
time the [Articles] [Certificate] of Merger reflecting the Merger becomes
effective with the Secretary of State of the State of [Company State] and the
Certificate of Merger reflecting the Merger becomes effective with the Secretary
of State of the State of Georgia (the "Effective Time").
(c) The charter and Bylaws of Merger Corp in effect immediately
prior to the Effective Time shall be the charter and Bylaws of the surviving
corporation until otherwise amended or repealed, the directors of Merger Corp
immediately prior to the Effective Time shall serve as the directors of the
surviving corporation from and after the Effective Time, and the officers of
Merger Corp in office immediately prior to the Effective Time shall serve as the
officers of the surviving corporation from and after the Effective Time.
2.2 Conversion of Shares. Subject to the provisions of this Section 2.2,
--------------------
and in consideration for the transactions contemplated hereby, at the Effective
Time, by virtue of the Merger and without any action on the part of the parties
hereto or the shareholders of any of the parties hereto, the shares of the
constituent corporations of the Merger shall be converted as follows:
(a) Each share of Premiere Stock and each share of Merger Corp
common stock issued and outstanding at the Effective Time shall remain issued
and outstanding after the Effective Time.
(b) All of the shares of the capital stock, par value $___ per
share, of the Company ("Company Stock") (excluding treasury shares and excluding
shares held by shareholders who perfect their statutory dissenters' rights as
provided in Section 2.4 of this Agreement) issued and outstanding at the
Effective Time shall cease to be outstanding and shall be converted into and
exchanged for the right to receive:
(i) [the number of shares of Premiere Stock determined by
dividing (A) the product of [.X] ] multiplied by the
Company Purchase Price, by
-2-
<PAGE>
(B) the Average Closing Price] [an amount of cash
determined by multiplying the Company Purchase Price
by [.X]];
(ii) [the number of shares of Premiere Stock determined by
dividing (A) the product of .1 multiplied by the
Company Purchase Price, by (B) the Average Closing
Price] [an amount of determined by multiplying the
Company Purchase Price by .1]] (the "General Escrow
Amount"); and
(iii) [the number of shares of Premiere Stock determined by
dividing (A) the product of [.Y] multiplied by the
Company Purchase Price, by (B) the Average Closing
Price]] [an amount of cash determined by multiplying
the Company Purchase Price by [.Y]] (the "Specific
Escrow Amount");
all as determined in accordance with Section 2.3 below (collectively, the
"Consideration"). Subject to Section 2.2(d) below, the Consideration shall be
[issuable] [payable] to the Owners pro rata in accordance with their ownership
of Company Common Stock pursuant to Section 2.6, which ownership the Owners
represent has not been adjusted in contemplation of the transactions described
herein.
(c) Any and all shares of Company Common Stock held as treasury
shares by the Company shall be canceled and retired at the Effective Time, and
no consideration shall be issued in exchange therefor.
(d) Upon consummation of the Merger, the Owners shall deliver the
General Escrow Amount [and the Specific Escrow Amount] in negotiable form to the
Escrow Agent to be held in escrow pursuant to the terms and conditions of the
Escrow Agreement(s) in the form (s) attached hereto as Exhibit B [and Exhibit B-
1], which shall be executed and delivered by Premiere and the Owners at the
Closing.
2.3 Calculation of Consideration. For purposes of determining the
----------------------------
Consideration [issuable] [payable] to the Owners pursuant to Section 2.2(b)
above, the following shall apply:
(a) "Average Closing Price" shall be the average of the daily
last sale prices of Premiere Stock for the period consisting of twenty (20)
consecutive trading days on which such shares are actually traded on the Nasdaq
National Market (as reported by the Wall Street Journal or, if not reported
thereby, any other authoritative source selected by Premiere) ending at the
close of trading on the first trading day immediately preceding the Closing;
provided, however, that the Market Value Per Share shall not be less than $22.50
- - -------- -------
nor more than $30.50 (collectively, $22.50 and $30.50 are referred to as the
"Average Closing Price Limitations").
(b) "Cash Multiple" shall be _______ .
(c) "Company Purchase Price" shall be the sum of (i) the amount
determined by multiplying the Normalized EBITDA of the Company by the
appropriate Stock Multiple or Cash Multiple, plus (ii) the amount of cash
----
reflected on the Closing Date Balance Sheet, minus (iii) the aggregate amount of
-----
debt reflected on the Closing Date Balance Sheet, and minus (iv) the amount by
-----
which the Transaction Costs exceed the Deductible Amount.
-3-
<PAGE>
(d) "Deductible Amount" shall be an amount equal to $_________.
(e) "Normalized EBITDA" of the Company shall be an amount equal
to $_______, which has been determined, based on information provided by the
Company to Premiere, by (i) calculating the Company's earnings for the fiscal
year ended [December 31, 1996] as determined in accordance with generally
accepted accounting principles before expense for interest, income taxes and
depreciation and amortization, and (ii) adjusting that amount to account for
extraordinary or nonrecurring income and expense items taking into consideration
ongoing normal operational requirements as determined based on information
provided to Premiere.
(f) "Registration Right" shall mean the right to include
Premiere Stock issued in the Merger in a registration statement which Premiere
intends to file as soon as reasonably practicable after the end of the first
full fiscal quarter of Premiere containing the period of post-Merger combined
operations required by ASRs 130 and 135, pursuant to the terms and conditions of
the Stock Restriction and Registration Rights Agreement in the form attached
hereto as of Exhibit C (the "Registration Rights Agreement").
(g) "Stock Multiple" shall be six (6) if the Owners choose to
have the Registration Right and seven (7) if the Owners choose not to have the
Registration Right. Sections 3.5 and 5.2 of this Agreement shall indicate
whether the Owners have selected the Registration Right.
(h) "Transaction Costs" shall mean all amounts paid or incurred
by the Company in connection with (i) the negotiation and preparation of this
Agreement, (ii) the preparation of the Audited Financial Statements and (iii)
the consummation of the Transactions.
2.4 Dissenting Shareholders. Subject to Section 4.2, any holder of shares
-----------------------
of voting capital stock of the Company who perfects any available dissenters'
rights in accordance with and as contemplated by the [Company State] Act shall
be entitled to receive the value of such shares in cash from the Company after
the Effective Time as determined pursuant to such provision of law; provided,
that no such payment shall be made to any dissenting shareholder unless and
until such dissenting shareholder has complied with the applicable provisions of
the [Company State] Act and surrendered to the Company the certificate or
certificates representing the shares for which payment is being made. In the
event that a dissenting shareholder of the Company fails to perfect, or
effectively withdraws or loses, its right to appraisal and of payment for its
shares, Premiere shall issue and deliver the consideration to which such holder
of shares of Company capital stock is entitled under this Article II (without
interest) upon surrender of certificates representing such shares held by such
holder.
2.5 Closing. The Closing shall take place at the offices of Alston & Bird
-------
LLP, Atlanta, Georgia, at 10:00 a.m. local time, on the date set forth in the
Uniform Terms, provided all conditions set forth in Articles V and VI of the
Uniform Terms and Articles IV and V of this Agreement have been satisfied or
waived, or on such other date or at such other place and time mutually agreed
upon by the parties.
2.6 Exchange of Shares. Promptly after the Effective Time, Premiere and
------------------
Company shall cause to be mailed to the former Company shareholders appropriate
transmittal materials for the surrender of the certificate or certificates
formerly representing their shares of Company Common Stock in exchange for
[shares of Premiere Stock] [cash] as provided in this Agreement. Until
-4-
<PAGE>
surrendered for exchange in accordance herewith, each certificate theretofore
representing shares of Company Common Stock shall from and after the Effective
Time represent only the right to receive the Consideration provided in this
Agreement in exchange therefor. [No certificates representing fractional shares
will be issued as a result of the Merger. Each holder of shares of Company
Common Stock exchanged pursuant to the Merger who would otherwise have been
entitled to receive a fraction of a share of Premiere Common Stock shall
receive, in lieu thereof, cash (without interest) in an amount equal to such
fractional part of a share of Premiere Common Stock multiplied by the Actual
Closing Value.]
[2.7 Purchase for Investment, Etc. Each Owner, jointly and severally,
-----------------------------
represents and warrants the following to Premiere:
(a) such Owner has accurately completed the Investor
Questionnaire required by Premiere prior to or contemporaneous with the
execution of the Transfer Agreement and the statements therein are true and
correct and acknowledges that Premiere has relied upon such statements in
entering into this Agreement;
(b) such Owner is acquiring Premiere Stock for such Owner's own
account and not with a view to or for sale in connection with any public
distribution thereof within the meaning of the Securities Act;
(c) such Owner (i) has sufficient knowledge and experience in
financial and business matters to enable him, her or it to evaluate the merits
and risks of an investment in Premiere Stock, (ii) has the ability to bear the
economic risk of acquiring Premiere Stock for an indefinite period and to afford
a complete loss thereof and (iii) has had an opportunity to ask questions of and
to receive answers from the officers of Premiere and to obtain additional
information in writing as requested, which has been made available to and
examined by such Owner or such Owner's advisors; and
(d) such Owner (i) acknowledges that Premiere Stock has not been
registered under any securities laws and cannot be resold without registration
thereunder or exemption therefrom, (ii) agrees not to transfer all or any
Premiere Stock received by such Owner unless such transfer has been registered
or is exempt from registration under applicable securities laws and (iii)
acknowledges that the certificate(s) representing Premiere Stock shall bear the
following legend with respect to the restrictions on transfer under applicable
securities laws:
"The securities represented hereby have not been registered under
the Securities Act of 1933, as amended, and may not be offered,
sold, transferred or otherwise disposed of unless registered with
the Securities and Exchange Commission of the United States and
the securities regulatory authorities of applicable states or
unless an exemption from such registration is available."]
[2.8 Accounting, Tax and Regulatory Matters. Each Owner and the Company,
--------------------------------------
jointly and severally, represents and warrants to Premiere that neither the
Company, any Owner nor any Affiliate thereof has taken or agreed to take any
action or has any knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the Merger from qualifying for pooling-of-interests
accounting treatment or as a reorganization within the meaning of Section 368(a)
of the Code, or (ii) materially impede or delay receipt of any consents referred
to in Section 5.6 of the
-5-
<PAGE>
Uniform Terms or result in the imposition of a condition or restriction of the
type referred to in the last sentence of such Section.
III. ADDITIONAL AGREEMENTS
---------------------------
3.1 Filings with State Offices. Upon the terms and subject to the
--------------------------
conditions of this Agreement, the Company and Merger Corp shall execute and file
the [Articles] [Certificate] of Merger with the Secretary of State of the State
of [Company State] and a Certificate of Merger with the Secretary of State of
the State of Georgia in connection with the Closing.
3.2 Conditions to Closing. The Companies, the Owners and Premiere agree to
---------------------
use their commercially reasonable best efforts to satisfy the closing conditions
set forth in Articles IV and V of this Agreement by the date indicated therein
or the Closing Date, as applicable.
3.3 Additional Indemnification Items. Subject to Sections 8.2 through 8.6
--------------------------------
of the Uniform Terms, the Owners and, if the Transactions involve an Asset
Transfer, the Company, shall jointly and severally indemnify and hold harmless
Premiere, and its officers, directors, agents or affiliates, from and against
any and all Losses suffered or incurred by any such party by reason of or
arising out of any of the following:
(a) [insert matters which arise during and are unresolved
following due diligence]
[3.4 Tax Matters. The Owners understand that (i) while it is the mutual
-----------
intention of the parties hereto that the Merger qualify as a tax-free plan of
reorganization under Section 368(a) of the Code, Premiere makes no
representation or warranty regarding the tax treatment of this Agreement or the
Merger, (ii) the Closing is not subject to a condition that an Internal Revenue
Service ruling or tax opinion be obtained as to the federal income tax
consequences of this Agreement or the Merger, and (iii) the Company and the
Owners shall look to their respective advisors for advice concerning the tax
consequences of this Agreement and the Merger.]
[3.5 Registration Rights. At the Closing. Premiere and the Owners shall
-------------------
[shall not]execute and deliver the Registration Rights Agreement.]
[3.6 Accounting Treatment.
--------------------
(a) The Company and each of the Owners has accurately completed
the Pooling Questionnaire required by Premiere prior to or contemporaneous with
the execution of this Agreement, and the statements therein are true and
correct.
(b) The Company and each of the Owners agrees not to take any
action from and after the date hereof that would prevent Premiere from
accounting for the business combination to be effected by the Merger as a
pooling of interests. Without limiting the foregoing, the Company and each of
the Owners agrees not to sell, transfer, or otherwise dispose of his, her or its
interests in, or reduce his, her or its risk relative to, any of the shares of
Premiere Common Stock received in connection with the Merger until such time as
Premiere notifies the Company and each such Owner that the requirements of ASRs
130 and 135 have been met. The Company and each of the Owners understands that
ASRs 130 and 135 relate to the publication of
-6-
<PAGE>
financial results of at least thirty (30) days of post-Merger combined
operations of Premiere and the Company. Premiere agrees that it shall publish
such results within forty-five (45) days after the end of the first fiscal
quarter of Premiere containing the required period of post-Merger combined
operations and that it shall notify the Company and each of the Owners promptly
following such publication. Premiere shall be entitled to place the following
restrictive legend on the shares of Premiere Stock issued pursuant to the Merger
to enforce the foregoing restrictions:
"The shares represented by this certificate were issued pursuant to a
business combination which is accounted for as a "pooling of
interests" and may not be sold, nor may the owner thereof reduce his
risks relative thereto in any way, until such time as Premiere
Technologies, Inc. ("Premiere") has published the financial results
covering at least 30 days of combined operations after the effective
date of the merger through which the business combination was
effected.
[3.7 Affiliate Agreements. The Company has disclosed in Schedule 3.7 all
-------------------- ------------
Persons whom it reasonably believes is an "affiliate" of the Company for
purposes of Rule 145 under the 1933 Act. The Company shall use its reasonable
efforts to cause each such Person to deliver to Premiere at least 30 days prior
to the Effective Time a written agreement, substantially in the form attached
hereto as Exhibit D "3]
[3.8 Tax Representations. In connection with the opinion to be rendered to
-------------------
Premiere by Alston & Bird to the effect that the transactions contemplated
hereby will constitute a tax-free reorganization within the meaning of Section
368(a) of the Code, the Owners shall furnish such counsel with such
representations as to their plans for the disposition of the shares of Premiere
Stock to be received in the Transactions as such counsel shall reasonably
request.]
[3.9 Restricted Stock. All contractual restrictions or limitations on
----------------
transfer with respect to Company Common Stock under any plan, program, contract
or arrangement, to the extent that such restrictions or limitations have not
already lapsed (whether as a result of the Transactions or otherwise), and
except as otherwise expressly provided in such plan, program, contract or
arrangement, shall remain in full force and effect with respect to shares of
Premiere Stock into which such restricted stock is converted pursuant to Section
2.2 of this Transfer Agreement.]
[3.10 Exchange Listing. Premiere shall use its reasonable efforts to list,
----------------
prior to the Effective Time, on the Nasdaq National Market the shares of
Premiere Stock to be issued to the Owners pursuant to the Transactions, and
Premiere shall give all notices and make all filings with the NASD required in
connection with the Transactions.]
IV. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF PREMIERE
-------------------------------------------------------
In addition to the conditions of Premiere contained in Article V of the
Uniform Terms, the obligation of Premiere to consummate the Transactions is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:
4.1 Approval of Owners. The Owners shall have approved the Merger in
------------------
accordance with the requirements of the [Company State] Act and the Company
shall have provided Premiere
-7-
<PAGE>
certified copies of such resolutions, and Owners holding no more than [____
percent (__%)] of the Company Common Stock issued and outstanding immediately
prior to the Effective Time shall have exercised any of the rights described in
Section 2.4.
4.2 Approval of Premiere and Merger Corp. The Board of Directors of
------------------------------------
Premiere and the Board of Directors and the shareholder of Merger Corp shall
have approved the Merger in accordance with the requirements of applicable state
law.
4.3 Grand Solution Documents VTE, VTN, NAP and each of the Franchise
-------------------------
Companies shall have executed and delivered the Grand Solution Documents in the
forms attached hereto as Exhibit E.
[4.4 Employment and Noncompetition Agreements. The employees of the
-----------------------------------------
Company listed on Schedule 4.4 hereto shall have executed and delivered to
Premiere an employment and/or noncompetition and nondisclosure agreement in form
and substance reasonably satisfactory to Premiere.]
[4.5 Audited Financial Statements. Premiere shall have received financial
----------------------------
statements of the Company for the fiscal year(s) ended ________ (the "Audited
Financial Statements") prepared in accordance with GAAP and Regulation S-X
promulgated by the Commission, accompanied by an unqualified audit opinion of
Arthur Andersen LLP relating thereto. The Audited Financial Statements (i)
shall present fairly in all material respects the financial position of the
Company as of the dates indicated and present fairly in all material respects
the results of the Company's operations, cash flows and changes in owners equity
for the periods then ended, (ii) shall be in accordance with the books and
records of the Company, and (iii) shall not reflect any material change in the
Company's financial condition or results of operations from the condition and
results reported in the Financial Statements delivered by the Company prior to
the execution of this Agreement.]
[4.6 Pooling Letter. Premiere shall have received a letter, dated as of the
--------------
Effective Time, in form and substance reasonably acceptable to Premiere, from
Arthur Andersen LLP to the effect that the Merger will qualify for pooling of
interests accounting treatment, and no action shall have been taken by any
regulatory authority or any statute, rule, regulation or order enacted,
promulgated or issued by any regulatory authority, or any proposal made for any
such action by any regulatory authority which is reasonably likely to be put
into effect, that would prevent Premiere from accounting for the business
combination to be effected by the Merger as a pooling of interests.]
[4.7 Reorganization Opinion. Premiere shall have received an opinion of
----------------------
Alston & Bird LLP, counsel to Premiere, to the effect that the transactions
contemplated by the Agreement, including the Merger, will constitute a tax-free
reorganization within the meaning of Section 368(a) of the Code.]
-8-
<PAGE>
V. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF THE COMPANY
---------------------------------------------------------
AND THE OWNERS
--------------
In addition to the conditions of the Company and the Owners contained in
Article VI of the Uniform Terms, the obligation of the Company and the Owners to
consummate the Transactions is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions:
5.1 Approval of Premiere and Merger Corp. The Board of Directors of
------------------------------------
Premiere and the Board of Directors and the shareholder of Merger Corp shall
have approved the Merger in accordance with the requirement of applicable state
law. Premiere and Merger Corp shall have provided the Company certified copies
of such resolutions.
[5.2 Registration Rights. Premiere and each Owner shall have executed and
-------------------
delivered a Registration Rights Agreement.]
VI. MISCELLANEOUS
------------------
6.1 Notices. The addresses for notices in accordance with Section 10.1 of
-------
the Uniform Terms for the Company and the Owners are as follows:
If to the Company: With a copy to:
_____________________ _____________________
_____________________ _____________________
_____________________ _____________________
Attn: ______________ Attn: ______________
Phone: (___) ___-___ Phone: (___) ___-___
Fax: (___) ___-___ Fax: (___) ___-___
If to the Owners: With a copy to:
_____________________ ______________________
_____________________ ______________________
_____________________ ______________________
Attn: ______________. Attn: _______________
Phone: (___) ___-___ Phone: (___) ___-____
Fax: (___) ___-___ Fax: (___) ___-____
6.2 Owner's Representative. The Owners' Representative for purposes of
----------------------
Section 10.2 of the Uniform Terms shall be _________________, who shall serve as
the Owner's Representative under the terms of said Section 10.2 of the Uniform
Terms.
6.3 Certain Definitions. In addition to the terms defined elsewhere herein
-------------------
and in the Uniform Terms, as used in this Agreement:
(a) "Anticipated Closing Date" shall mean _________ __, 1997.
------------------------
-9-
<PAGE>
(b) "Knowledge" of the Company shall mean the personal knowledge
---------
after due inquiry of those facts that are known or should
reasonably have been known after due inquiry by _______ and
_______ and the knowledge of any such Persons obtained or which
would have been obtained from a reasonable investigation.
(c) "Outside Closing Date" shall mean _________ __, 1997.
--------------------
-10-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.
a Georgia corporation
By:___________________________
Title:________________________
Attest:
By:_______________________________
Title:______________________________
COMPANY:
[FRANCHISEE]
a ____________
By:___________________________
Title:________________________
Attest:
By:_______________________________
Title:______________________________
OWNERS:
______________________________
[Owner's Address] [NAME]
an individual resident of the
State of _________
Witness:
By:_______________________________
Name:______________________________
-11-
<PAGE>
EXHIBIT A
UNIFORM TERMS AND CONDITIONS
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
I. REPRESENTATIONS AND WARRANTIES OF THE OWNERS....................... 1
1.1 Ownership Interest Held and Conveyed.......................... 1
1.2 Organization, Authority and Capacity.......................... 1
1.3 Authorization and Validity.................................... 1
1.4 Absence of Conflicting Agreements or Required Consents........ 2
1.5 Interested Transactions....................................... 2
1.6 Statements True and Correct................................... 2
II. REPRESENTATIONS AND WARRANTIES OF THE OWNERS AND THE COMPANY....... 2
2.1 Organization, Authority and Capacity......................... 2
2.2 Authorization and Validity................................... 3
2.3 Absence of Conflicting Agreements or Required Consents....... 3
2.4 Franchise Matters............................................ 3
2.5 Outstanding and Authorized Capitalization.................... 3
2.6 Subsidiaries, Investments and Predecessors................... 4
2.7 Financial Statements......................................... 4
2.8 Absence of Changes........................................... 4
2.9 No Undisclosed Liabilities................................... 5
2.10 Litigation, etc.............................................. 5
2.11 No Violation of Law.......................................... 5
2.12 Real and Personal Property................................... 5
2.13 Contracts and Commitments.................................... 6
2.14 Employment and Labor Matters................................. 7
2.15 Employee Benefit Matters..................................... 8
2.16 Insurance Policies........................................... 9
2.17 Environmental Matters........................................ 9
2.18 Accounts Receivable and Payable.............................. 10
2.19 Taxes........................................................ 10
2.20 Statements True and Correct.................................. 11
2.21 Intellectual Property Rights................................. 11
2.22 Company Products and Services................................ 12
III. REPRESENTATIONS AND WARRANTIES OF PREMIERE......................... 13
3.1 Organization, Authority and Capacity.......................... 13
3.2 Authorization and Validity.................................... 13
3.3 Absence of Conflicting Agreements or Required Consents........ 13
3.4 Outstanding and Authorized Capitalization..................... 13
3.5 SEC Filings; Financial Statements............................. 13
3.6 Statements True and Correct................................... 14
IV. ADDITIONAL COVENANTS AND AGREEMENTS................................ 14
4.1 Access to Company Information................................ 14
4.2 No-Shop...................................................... 14
4.3 Affirmative Covenants of the Company......................... 14
4.4 Negative Covenants of the Company............................ 16
4.5 Confidentiality.............................................. 17
4.6 Public Announcements......................................... 17
</TABLE>
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<TABLE>
<S> <C>
4.7 Noncompetition, Nonsolicitation and Nondisclosure............ 18
4.8 Approval of Transactions..................................... 19
4.9 Delivery of Schedules........................................ 20
4.10 Tax Returns.................................................. 20
4.11 Risk of Loss................................................. 20
4.12 State Takeover Laws.......................................... 20
4.13 Documents of the Company..................................... 20
4.14 Owner Covenant............................................... 20
4.15 Consents..................................................... 21
V. CONDITIONS TO OBLIGATIONS OF PREMIERE.............................. 21
5.1 Representations and Warranties............................... 21
5.2 Performance.................................................. 21
5.3 Document Delivery - General.................................. 21
5.4 Document Delivery - Asset Transfer........................... 22
5.5 Document Delivery - Stock Transfer........................... 22
5.6 Necessary Consents and Approvals............................. 23
5.7 No Material Adverse Change................................... 23
5.8 No Injunction, Etc........................................... 23
5.9 Satisfactory Due Diligence................................... 23
5.10 Legal Opinion................................................ 23
5.11 Escrow Agreement............................................. 23
5.12 Claims Letters............................................... 23
5.13 Owners' Equity............................................... 23
VI. CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE OWNERS........... 24
6.1 Representations and Warranties................................ 24
6.2 Performance; Covenants........................................ 24
6.3 Document Delivery - General................................... 24
6.4 Document Delivery - Asset Transfer............................ 24
6.5 Document Delivery - Stock Transfer............................ 24
6.6 No Injunction, Etc............................................ 24
VII. CLOSING AND TERMINATION............................................ 25
7.1 Closing....................................................... 25
7.2 Right of Termination.......................................... 25
7.3 Effect of Termination......................................... 25
VIII. INDEMNIFICATION.................................................... 25
8.1 Indemnification of Premiere................................... 25
8.2 Notice and Opportunity to Defend.............................. 27
8.3 Survival, and Insurance....................................... 27
8.4 Establishment of Escrow....................................... 27
8.5 Arbitration................................................... 27
8.6 Other Rights and Remedies Not Affected........................ 27
IX. CERTAIN DEFINITIONS................................................ 28
X. MISCELLANEOUS...................................................... 32
10.1 Notices..................................................... 32
10.2 Owner's Representatives..................................... 33
10.3 Expenses.................................................... 33
</TABLE>
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<TABLE>
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10.4 Further Assurances.......................................... 33
10.5 Waiver...................................................... 33
10.6 Assignment.................................................. 34
10.7 Binding Effect.............................................. 34
10.8 Entire Agreement............................................ 34
10.9 Governing Law; Severability................................. 34
10.10 Counterparts................................................ 34
10.11 No Brokers.................................................. 34
10.12 Schedules and Exhibits...................................... 34
10.13 Headings.................................................... 34
10.14 Amendment................................................... 34
10.15 Enforcement................................................. 34
10.16 No Benefit to Third Parties................................. 35
</TABLE>
<PAGE>
EXHIBIT A
UNIFORM TERMS AND CONDITIONS
BACKGROUND
----------
The Owners, the Company and Premiere are those parties identified in that
certain Transfer Agreement among such parties to which these Uniform Terms and
Conditions are appended. The parties agree that the terms and conditions set
forth herein are made a part of and incorporated by reference into said Transfer
Agreement as if fully restated therein, provided that these Uniform Terms and
Conditions are subject in all respects to any contrary provision contained in
the Transfer Agreement and the Transfer Agreement shall control in the event of
any conflict with any provision herein. Capitalized terms not defined in the
text hereof have the meanings provided in the Transfer Agreement and herein,
including Article X hereof.
Premiere intends to acquire all franchisees of VTE other than the Company
(the "Other Companies" and together with the Company, the "Franchisee
Companies") and has entered or intends to enter into separate agreements for the
purchase of such Other Companies.
I. REPRESENTATIONS AND WARRANTIES OF THE OWNERS
--------------------------------------------
Each Owner, jointly and severally, represents and warrants the following to
Premiere:
1.1 Ownership Interest Held and Conveyed. Owner is the owner of all right,
------------------------------------
title and interest (legal, record and beneficial) in and to the Company Equity
Securities as set forth on Schedule 1.1, free and clear of any and all liens,
------------
encumbrances or restrictions of any nature whatsoever (except for any
restrictions on transfer imposed by securities laws), and Owner holds no other
interest in the Company. Except as provided in Schedule 1.1 or as specifically
------------
contemplated by this Agreement, no person or entity has any right or privilege
(whether preemptive or contractual) for the purchase of any Company Equity
Securities from Owner. Schedule 1.1 contains a complete list of all agreements
------------
or arrangements, whether written or oral, to which Owner is a party that relate
in any way to the Company Equity Securities. If the Transactions involve a Stock
Transfer, the delivery of such Company Equity Securities pursuant thereto will
transfer to Premiere good and marketable title to all such Company Equity
Securities held by such Owner, free and clear of all liens, encumbrances or
restrictions of any nature whatsoever other than any restrictions on transfer
imposed by federal or state securities laws.
1.2 Organization, Authority and Capacity. If Owner is a natural person,
------------------------------------
Owner has the full authority and capacity necessary to execute, deliver and
perform his or her obligations under the Transaction Documents to be executed
and delivered by Owner. If Owner is not a natural person, (i) Owner is an entity
of the type described in the Transfer Agreement, is duly organized, validly
existing and in good standing under the laws of its state of organization, and
has the full corporate, partnership or other power and authority necessary to
execute, deliver and perform its obligations under the Transaction Documents to
be executed and delivered by Owner, and (ii) Owner is duly qualified to do
business and is in good standing in each jurisdiction in which the failure to be
so qualified or in good standing could have a material adverse effect on Owner's
ability to perform its obligations under the Transaction Documents to be
executed and delivered by Owner.
1.3 Authorization and Validity.
--------------------------
(a) If Owner is not a natural person, (i) the execution, delivery and
performance of the Transaction Documents to be executed and delivered by Owner
have been duly authorized by all necessary action on the part of Owner, and (ii)
the Transaction Documents to be executed and delivered by Owner
<PAGE>
have been or will be, as the case may be, duly executed and delivered by Owner
and constitute or will constitute the legal, valid and binding obligations of
Owner, enforceable in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, fraudulent conveyance or other laws affecting
creditors' rights generally, or as may be modified by a court of equity.
(b) If Owner is a natural person, Owner has the legal capacity
required for executing, delivering and performing the Transaction Documents to
be executed and delivered by Owner. If Owner is married and Owner's interest in
the Company constitutes community property, the Transaction Documents to be
executed and delivered by Owner's spouse have been or will be, as the case may
be, duly executed and delivered by Owner's spouse and constitute or will
constitute the legal, valid and binding obligations of Owner's spouse,
enforceable in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency or other laws affecting creditors' rights generally,
or as may be modified by a court of equity.
1.4 Absence of Conflicting Agreements or Required Consents. Except as set
------------------------------------------------------
forth on Schedule 1.4, the execution, delivery and performance by Owner of each
------------
of the Transaction Documents to be executed and delivered by Owner (i) do not
require the consent of or notice to any governmental or regulatory authority or
any other third party; (ii) if Owner is not a natural person, will not conflict
with any organizational document of Owner; (iii) will not conflict with or
result in a violation of any law, ordinance, regulation, ruling, judgment, order
or injunction of any court or governmental instrumentality to which Owner is
subject or by which Owner is bound; (iv) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
require any notice under, or accelerate or permit the acceleration of any
performance required by the terms of any agreement, instrument, license or
permit material to the Transactions; and (v) will not create any encumbrance or
restriction upon the Company Equity Securities if the Transactions involve a
Stock Transfer.
1.5 Interested Transactions. Except as set forth on Schedule 1.5, Owner is
----------------------- ------------
not a party to any contract, loan or other transaction with the Company and does
not have any direct or indirect interest in or affiliation with any party to any
such a contract, loan or other transaction. Except as set forth on Schedule 1.5,
------------
Owner is not an employee, consultant, partner, principal, director or owner of,
and does not have any other direct or indirect interest in or affiliation with,
or membership in, any person or business entity that is engaged in a business
that competes with or is similar to the business of the Company.
1.6 Statements True and Correct. No representation or warranty made herein
---------------------------
by Owner, nor in any statement, certificate or instrument furnished or to be
furnished to Premiere by Owner pursuant to any Transaction Document, contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained herein and
therein not misleading.
II. REPRESENTATIONS AND WARRANTIES OF THE OWNERS AND THE COMPANY
------------------------------------------------------------
The Company and the Owners jointly and severally represent and warrant the
following to Premiere:
2.1 Organization, Authority and Capacity. The Company is an entity of the
------------------------------------
type described in the Transfer Agreement, is duly organized, validly existing,
and in good standing under the laws of its state of organization, and has the
full corporate, partnership or other power and authority necessary to (i)
execute, deliver and perform its obligations under the Transaction Documents to
be executed and delivered by the Company and (ii) carry on its business as it
has been and is now being conducted and to own and lease the Assets which it now
owns or leases. The Company is duly qualified to do business and is in good
standing in the jurisdictions set forth in Schedule 2.1, which includes every
------------
jurisdiction in which the failure to be so qualified or in good standing would
have a material adverse effect on (i) the
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Company's ability to perform its obligations under the Transaction Documents to
be executed and delivered by the Company or (ii) the Assets, results of
operations or prospects of the Company.
2.2 Authorization and Validity. The execution, delivery and performance of
--------------------------
the Transaction Documents to be executed and delivered by the Company have been
duly authorized by all necessary corporate, partnership or other action on the
part of the Company. The Transaction Documents to be executed and delivered by
the Company have been or will be, as the case may be, duly executed and
delivered by the Company and constitute or will constitute the legal, valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency, or other
laws affecting creditors' rights generally, or as may be modified by a court of
equity.
2.3 Absence of Conflicting Agreements or Required Consents. Except as set
------------------------------------------------------
forth on Schedule 2.3, the execution, delivery and performance by the Company of
------------
the Transaction Documents to be executed and delivered by the Company: (i) do
not require the consent of or notice to any governmental or regulatory authority
or any other third party; (ii) will not conflict with any provision of the
Company's organizational documents; (iii) will not conflict with or result in a
violation of any law, ordinance, regulation, ruling, judgment, order or
injunction of any court or governmental instrumentality to which the Company is
subject or by which the Company or any of its Assets are bound; (iv) will not
conflict with, constitute grounds for termination of, result in a breach of,
constitute a default under, require any notice under, or accelerate or permit
the acceleration of any performance required by the terms of any agreement,
instrument, license or permit to which the Company is a party or by which the
Company or any of its properties are bound; and (v) will not create any lien,
encumbrance or restriction upon any of the Assets owned or leased by the
Company.
2.4 Franchise Matters.
-----------------
(a) Attached to Schedule 2.4(a) is a true and complete copy of
---------------------------
(i) the Franchise Agreement, (ii) the SRA, (iii) the NAP Agreement, (iv) each
other written agreement to which the Company or any Owner, on one hand, and VTE,
VTN or any Affiliate thereof, on the other hand, are party, and (v) a
description of all material terms of any oral agreement to which the Company or
any Owner, on one hand, and VTE, VTN or any Affiliate thereof, on the other
hand, are party. Except as set forth on Schedule 2.4(a), the Company (i) has not
---------------
received a notice of financial or other Default under any of the agreements
attached to or described in Schedule 2.4(a), and (ii) has not notified any other
---------------
party to any such agreement that it considers such party in Default under such
agreement.
(b) Schedule 2.4(b) contains a true, complete and correct copy
---------------
of the operating manual or other document containing all operating policies,
codes and requirements imposed on Franchise by VTE pursuant to the Franchise
Agreement.
2.5 Outstanding and Authorized Capitalization. All authorized and
-----------------------------------------
outstanding Company Equity Securities are accurately described on Schedule 2.5.
------------
If the Company is a corporation, no shares of capital stock are held in the
treasury of the Company except as set forth on Schedule 2.5. All outstanding
------------
Company Equity Securities are listed and held of record as indicated on Schedule
--------
1.1 and have been duly and validly issued, are fully paid and nonassessable.
- - ---
None of such Company Equity Securities were issued in violation of preemptive
rights of any past or present holder of any Company Equity Security. Except as
set forth on Schedule 1.1, there are no outstanding warrants, options, rights,
------------
calls or other commitments of any nature relating to Company Equity Securities
and there are no outstanding securities of the Company convertible into or
exchangeable for any Company Equity Securities, in either case which have been
granted or created by the Company. Except as set forth on Schedule 2.5, the
------------
Company is not obligated to issue or repurchase any Company Equity Securities
for any reason and no person or entity has any right or privilege (whether
preemptive or contractual) for the purchase, subscription or issuance of any
unissued Equity Securities of the Company. There are no outstanding rights to
demand registration of
-3-
<PAGE>
securities of the Company or to sell securities of the Company in connection
with a registration by the Company under the Securities Act.
2.6 Subsidiaries, Investments and Predecessors. Except as set forth on
------------------------------------------
Schedule 2.6, the Company has not owned and does not currently own, directly or
- - ------------
indirectly, of record, beneficially or equitably, any capital stock or other
equity, ownership or proprietary interest in any corporation, partnership,
limited liability company, association, trust, joint venture or other entity.
Set forth on Schedule 2.6 is a listing of all predecessor companies of the
------------
Company, including the names of any entities from whom the Company previously
acquired material Assets, and any other entity of which the Company has been a
subsidiary or division. Except as listed on Schedule 2.6, the Company has not
------------
sold or disposed of, by way of Asset sale, stock sale, spin-off or otherwise,
any material Assets or business of the Company.
2.7 Financial Statements. Attached hereto as Schedule 2.7 are the
-------------------- ------------
financial statements of the Company for the fiscal years set forth therein, and
interim financial statements for the Company's most recently ended interim
period, which reflect the results of operations and financial condition of the
Company for such periods and as of the dates indicated (collectively, the
"Financial Statements"). The Financial Statements have been prepared in
accordance with generally accepted accounting principles consistently applied
other than as indicated on Schedule 2.7 and except for (i) the omission of notes
------------
to interim Financial Statements, and (ii) the fact that interim Financial
Statements are subject to normal and customary year-end adjustments which will
not, in the aggregate, be material. The Financial Statements present fairly in
all material respects the financial position of the Company as of the dates
indicated and present fairly in all material respects the results of the
Company's operations for the periods then ended, and are in accordance with the
books and records of the Company, which have been properly maintained and are
complete and correct in all material respects.
2.8 Absence of Changes. Except as set forth on Schedule 2.8, and except
------------------ ------------
as contemplated by this Agreement, since the date of the Latest Balance Sheet,
the Company has conducted its business only in the ordinary course and has not:
(i) suffered any material adverse change in its working capital,
condition (financial or otherwise), Assets, liabilities, reserves, business
or operations;
(ii) paid, discharged or satisfied any liability other than in
the ordinary course of business and consistent with past practices;
(iii) written off as uncollectible any account receivable other
than in the ordinary course of business and in amounts not exceeding the
reserve or allowance for doubtful accounts included in the Latest Balance
Sheet;
(iv) compromised any debts, claims or rights or disposed of any
of its properties or Assets other than in the ordinary course of business
and consistent with past practices;
(v) entered into any commitments or transactions not in the
ordinary course of business or made capital expenditures or commitments;
(vi) made any change in any method of accounting or accounting
practice;
(vii) subjected any of its Assets, tangible or intangible, to
any lien, encumbrance or restriction of any nature whatsoever, except for
liens for current property taxes not yet due and payable;
-4-
<PAGE>
(viii) increased any salaries, wages or employee benefits for
any employee of the Company;
(ix) hired, committed to hire or terminated any independent
contractor, or employee;
(x) declared, set aside or made any payment, dividend or other
distribution to any holder of a Company Equity Security or purchased,
redeemed or otherwise acquired, directly or indirectly, any Company Equity
Security;
(xi) terminated or amended any material contract, license or
other instrument to which the Company is a party or suffered any loss or
termination or threatened loss or termination of any existing business
arrangement or supplier or customer, the termination or loss of which, in
the aggregate, could materially and adversely affect the Company;
(xii) issued any Company Equity Security or otherwise effected
any change in its capital structure;
(xiii) commenced or settled any litigation; or
(xiv) agreed, whether in writing or otherwise, to take any
action described in this Section 2.8.
2.9 No Undisclosed Liabilities. Except as listed on Schedule 2.9 hereto,
-------------------------- ------------
the Company has no liabilities or obligations, whether accrued, absolute,
contingent or otherwise, except for liabilities and obligations (i) reflected in
the Financial Statements or (ii) incurred in the ordinary course of its business
since the date of the Latest Balance Sheet and immaterial in amount or effect on
the business, prospects, financial condition or results of operations of the
Company.
2.10 Litigation, etc. Except as listed on Schedule 2.10 hereto, (i) there
--------------- -------------
are no claims, lawsuits, actions, arbitrations, administrative or other
proceedings instituted or pending against the Company or against any director,
employee, employee benefit plan or Asset of the Company, and, to the Knowledge
of the Company and the Owners, no such matter is threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) and there is no basis for any
such action; (ii) to the Knowledge of the Company and the Owners, there are no
governmental or administrative investigations or inquiries pending that involve
the Company or any of its Assets; (iii) there are no judgments against or
consent decrees binding on the Company or any of its Assets; and (iv) there are
no claims not covered by insurance.
2.11 No Violation of Law. Except as set forth on Schedule 2.11, the
------------------- -------------
Company has not been and is not in violation of any applicable local, state or
federal law, ordinance, regulation, order, injunction or decree, or any other
requirement of any governmental body, agency or authority or court binding on
it, or relating to its property or business or its advertising, sales or pricing
practices, except for any such violations as would not individually or in the
aggregate have a material adverse effect on the Company, financial or otherwise.
Except as set forth on Schedule 2.11, the Company has and has always had in
-------------
effect all Permits necessary for it to own, lease and operate its Assets and to
conduct its business as it has been and is currently conducted, and there has
occurred no Default under any such Permit.
2.12 Real and Personal Property.
--------------------------
(a) Schedule 2.12(a) sets forth a list of all material Assets of the
----------------
Company, including, without limitation, all furniture, fixtures and equipment.
Except as set forth on Schedule 2.12(a), the
----------------
-5-
<PAGE>
Company (i) has good and valid title to all of its Assets, including all the
Assets reflected in the Financial Statements; and (ii) owns such Assets free and
clear of all liens, encumbrances or restrictions of any nature whatsoever.
(b) Schedule 2.12(b) contains a true and correct description of all
----------------
real property owned or leased by the Company, including all improvements located
thereon. Except as set forth on Schedule 2.12(b), the Company has good and
----------------
marketable title to all real property owned by it, free and clear of any liens,
encumbrances or restrictions of any nature whatsoever. Attached to Schedule
--------
2.12(b) are true, correct and complete copies of all leases, deeds, easements
- - -------
and other documents and instruments concerning the matters listed on Schedule
--------
2.12(b). No condemnation or similar actions are currently in effect or pending
- - -------
against any part of any real property owned or leased by the Company and, to the
best knowledge of the Company and the Owners, no such action is threatened
against any such real property. To the Knowledge of the Company, there are no
encroachments, leases, easements, covenants, restrictions, reservations or other
burdens of any nature which impair in any material respect the use of any owned
or leased real property in a manner consistent with past practices nor does any
part of any building structure or any other improvement thereon encroach on any
other property.
(c) If the Transactions involve an Asset Transfer, the delivery of
the Transferred Assets in accordance with the Transaction Documents will
transfer and convey good and valid title to such Transferred Assets free and
clear of all liens, encumbrances or restrictions of any nature whatsoever, other
than liens for liabilities reflected in the Financial Statements or as may be
specifically contemplated by the Transaction Documents.
(d) The present zoning, subdivision, building and other ordinances
and regulations applicable to any owned or leased real property permit the
continued operation, use, occupancy and enjoyment of such real property
consistent with past practices, and the Company is in compliance with, in all
material respects, and has received no notices of violations of, any applicable
zoning, subdivision or building regulation, ordinance or other law, regulation,
or requirement including, but not limited to, certificate of need. The Company
has all rights and easements necessary for public ingress thereto and egress
therefrom and for the provision of all utility services thereto, including any
required curb cut or street opening permits or licenses for vehicular access
over presently existing roads and driveways.
(e) The Company's Assets (including all buildings and improvements in
connection therewith) are in good operating condition and repair, ordinary wear
and tear excepted, and such Assets include all rights, properties, interests in
properties, and Assets necessary to permit Premiere to carry on the Company's
business as presently conducted.
(f) Except as set forth on Schedule 2.12(b), each piece of real
----------------
property owned by the Company is separately assessed for real property tax
assessment purposes and is not combined with any other real property for such
tax assessment purposes. Schedule 2.12(f) contains true, complete and correct
----------------
copies of the most recent tax bills for each piece of real property set forth on
Schedule 2.12(b).
- - ----------------
2.13 Contracts and Commitments.
-------------------------
(a) Schedule 2.13 contains a complete and accurate list of all
-------------
contracts, agreements, commitments, instruments and obligations (whether written
or oral, contingent or otherwise) of the Company of or concerning the following
matters (the "Company Agreements"):
(i) the lease (as lessee or lessor) or license (as licensee or
licensor) of any real or personal property (tangible or intangible);
-6-
<PAGE>
(ii) the employment, termination, severance or engagement of or
with respect to any officer, director, employee, consultant or agent;
(iii) any arrangement between or among the Company, its
Affiliates, the Owners, any director, officer or employee thereof and/or
Related Persons;
(iv) any arrangement limiting the freedom of the Company to
compete in any manner in any line of business or requiring the Company to
share profits;
(v) any arrangement that could reasonably be anticipated to have
a material adverse effect on the Company, financial or otherwise;
(vi) any arrangement not in the ordinary course of business;
(vii) any power of attorney, whether limited or general, granted
by or to the Company;
(viii) any other arrangement that requires performance for a
period of more than 90 days or that requires payments in excess of $10,000;
(ix) any contract or arrangement relating to the borrowing of
money by the Company or the guarantee by the Company of any third party
obligation;
(x) any agreement or arrangement involving Intellectual Property
Rights (other than contracts entered into in the ordinary course of
business with customers and "shrink-wrap" software licenses);
(xi) any contract or arrangement relating to the provision of
data processing, network communication or other technical services to or by
the Company or any Affiliate thereof; and
(xii) any contract or arrangement relating to the provision,
purchase or sale of goods or services, other than contracts entered into in
the ordinary course of business and involving payments not in excess of
$5,000.
(b) The Company has delivered to Premiere true and complete copies of
all of the Company Agreements. Except as indicated on Schedule 2.13, the
-------------
Company Agreements are valid and effective in accordance with their terms, and
there is not under any of such Company Agreements (i) any existing or claimed
Default by the Company or (ii) to the Knowledge of the Company and the Owners,
any existing or claimed Default by any other party. Except as indicated on
Schedule 2.13, the continuation, validity and effectiveness of the Company
- - -------------
Agreements will not be affected by the Transactions and the Transactions will
not result in a breach of or Default under, or require the consent of any other
party to, any of the Company Agreements. There is no actual or, to the
Knowledge of the Company and the Owners, threatened termination, cancellation or
limitation of any Company Agreements that would have a material adverse effect
on the Company, financial or otherwise. To the Knowledge of the Company and the
Owners, there is no pending or threatened bankruptcy, insolvency or similar
proceeding with respect to any other party to the Company Agreements.
2.14 Employment and Labor Matters.
----------------------------
(a) Schedule 2.14(a) sets forth (i) the number of all full-time and
----------------
part-time employees of the Company; and (ii) the name and compensation paid to
each independent contractor, employee of or
-7-
<PAGE>
consultant to the Company who received salary and bonuses for either of the
Company's two most recently ended fiscal years in excess of $20,000.
(b) To the Knowledge of the Company, the Company is in compliance in
all material respects with all applicable laws respecting employment and
employment practices, terms and conditions of employment, wages and hours,
occupational safety and health, including laws concerning unfair labor practices
within the meaning of Section 8 of the National Labor Relations Act, and the
employment of non-residents under the Immigration Reform and Control Act of
1986.
(c) Except as disclosed on Schedule 2.14(b),
----------------
(i) there are no charges, governmental audits,
investigations, administrative proceedings or complaints concerning the
Company's employment practices pending or, to the Knowledge of the Company
and the Owners, threatened before any federal, state or local agency or
court, and, to the Knowledge of the Company and the Owners, no basis for
any such matter exists;
(ii) the Company is not a party to any union or collective
bargaining agreement, and, to the Knowledge of the Company and the Owners,
no union attempts to organize the employees of the Company have been made,
nor are any such attempts now threatened; and
(iii) the Company has not experienced any organized
slowdown, work interruption, strike, or work stoppage by its employees.
2.15 Employee Benefit Matters. The employee benefit plans and agreements
------------------------
described in Schedule 2.15 hereto are the only employee benefit plans and
-------------
agreements maintained by the Company for the benefit of its shareholders,
officers, directors, employees, former employees, or independent contractors,
including, without limitation, (i) profit sharing, pension, ESOP, 401(k) or
other retirement plans or programs, (ii) current and deferred compensation,
severance, vacation, stock purchase, stock option, bonus and incentive
compensation benefits and (iii) medical, hospital, life, health, accident,
disability, death and other fringe and welfare benefits, including any split-
dollar life insurance policies, all of which plans, programs, practices,
policies and other individual and group arrangements and agreements, including
any unwritten compensation, fringe benefit, payroll or employment practices,
procedures or policies of any kind or description are hereinafter referred to as
the "Benefit Plans." Except as disclosed on Schedule 2.15, there are no
-------------
contributions or payments due with respect to any of the Benefit Plan, nor will
any such contributions or payments be due or required to be paid on or prior to
the Closing Date. Each Benefit Plan of the Company has been operated and
administered in substantial compliance with the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"), and the provisions of the Code
applicable to it. No Benefit Plan of the Company or its ERISA Affiliates which
is subject to the minimum funding standards of ERISA or the Code, if any, has
incurred any accumulated funding deficiency within the meaning of ERISA or the
Code. All contributions with respect to a Benefit Plan of the Company or its
ERISA Affiliates that is subject to Code Section 412 or ERISA Section 302 have
been timely made and there is no lien or expected to be a lien under Code
Section 412(n) or ERISA Section 302(f) or tax under Code Section 4971. No
Benefit Plan of the Company or its ERISA Affiliates has a "liquidity shortfall"
as defined in Code Section 412(m)(5). Neither the Company nor its ERISA
Affiliates are subject to or can reasonably be expected to become subject to a
lien under Code Section 401(a)(29). No event has occurred in connection with a
Benefit Plan of the Company or its ERISA Affiliates that could result in
liability to the Company under Title IV of ERISA. The Company has not incurred
any liability to the Pension Benefit Guaranty Corporation in connection with any
Benefit Plan of the Company or its ERISA Affiliates which is subject to Title IV
of ERISA, if any. The Assets of each Benefit Plan of the Company or its ERISA
Affiliates that is subject to Title IV of ERISA, if any, are
-8-
<PAGE>
sufficient to provide all "benefit liabilities" (as defined in ERISA Section
4001(a)(16) under such Benefit Plan if such Benefit Plan terminated, and are
also sufficient to provide all other benefits due under the Benefit Plan
(including, but not limited to, ancillary, disability, shutdown, early
retirement and welfare benefits). Neither the Company nor its ERISA Affiliates
have had an "obligation to contribute" (as defined in ERISA Section 4212) to a
"multiemployer pension plan" (as defined in ERISA Sections 4001(a)(3) and
3(37)(A) at any time. No event which constitutes a reportable event as defined
in Section 4043 of ERISA has occurred or is continuing with respect to any
Benefit Plan covered by ERISA. No facts exist which will result in a material
increase in the premium costs of any Benefit Plan for which benefits are insured
or a material increase in benefit costs of any Benefit Plan which provides self-
insured benefits. No "prohibited transaction" (as defined in ERISA Section 406
or Code Section 4975) has occurred with respect to any Benefit Plan. None of the
Benefit Plans has any current or projected liability in respect of post-
employment or post-retirement health or medical or life insurance benefits for
former or retired employees of the Company, except as required to avoid excise
taxes under Code Section 4980B. All Benefit Plans subject to Code Section 4980B
or Part 6 of Title I of ERISA have been maintained in compliance with the
requirements of Code Section 4980B and Part 6 of Title I of ERISA. There is no
contract, agreement, plan or arrangement covering any employee or former
employee of the Company that could result in the payment of any amount that
would not be deductible under Code Sections 162(m) or 280G. As of the Closing
Date, the Company has no material liabilities under any Benefit Plan that is not
reflected in the Financial Statements, except for accruals for contributions and
expenses for the current year.
2.16 Insurance Policies. Except as described on Schedule 2.16, all of the
------------------ -------------
Assets and business of the Company are insured in such amounts and against such
losses, casualties or risks as are reasonably customary for similar properties
and businesses, and the Company has maintained such insurance continuously from
the earlier of (i) the date of its inception and (ii) the date of inception of
any of its predecessors. Schedule 2.16 sets forth a complete and accurate list
-------------
and description of all insurance policies in force naming the Company, or any
employee, consultant or independent contractor thereof, or Owner, as an insured
or beneficiary or as a loss payee or for which the Company has paid or is
obligated to pay all or part of the premiums, including, without limitation, all
liability, professional liability, fire, health and life insurance policies. All
such policies are in full force and effect and the premiums due thereon have
been timely paid. The Company has not received notice of any pending or
threatened termination or premium increase (retroactive or otherwise) with
respect thereto, and, to the Knowledge of the Company and the Owners, the
Company and the Owners are in compliance with all conditions contained therein.
Except as set forth on Schedule 2.16, there are no pending claims against such
-------------
insurance by the Company as to which insurers are defending under reservation of
rights or have denied liability, and except as set forth on Schedule 2.16, there
-------------
exists no claim under such insurance that has not been properly filed by the
Company. To the Knowledge of the Company and the Owners, there are no
outstanding or unfulfilled requirements or recommendations of any insurance
company insuring the Company regarding any repairs to or work to be performed
with respect to the Assets of the Company. The Company has complied with any
such requirements and recommendations as to which the Company has received
notice. Schedule 2.16 contains a listing of all claims made and loss histories
-------------
in respect of any insurance maintained by the Company or any predecessor or any
Owner during the past three (3) years.
2.17 Environmental Matters. Except as set forth in Schedule 2.17, there
--------------------- -------------
are no present or past Environmental Conditions in any way relating to the
business, properties or Assets of the Company. For the purposes of this
Agreement, "Environmental Condition" means (a) the introduction into the
environment of any pollution, including without limitation any contaminant,
irritant or pollutant or other toxic or hazardous substance, in violation of any
federal, state or local law, ordinance or governmental rule or regulations, as a
result of any spill, discharge, leak, emission, escape, injection, dumping or
release of any kind whatsoever of any substance or exposure of any type in any
work places or to any medium, including without limitation air, land, surface
waters or ground waters, or from any generation,
-9-
<PAGE>
transportation, treatment, discharge, storage or disposal of waste materials,
raw materials, hazardous materials, biomedical waste including blood, toxic
materials or products of any kind or from the storage, use or handling of any
hazardous or toxic materials or other substances, as a result of which the
Company has or may become liable to any person or by any reason of which any of
the Assets of the Company may suffer or be subjected to any lien, encumbrance or
restriction of any nature, or (b) any noncompliance with any federal, state or
local environmental law, rule, regulation or order as a result of or in
connection with any of the foregoing.
2.18 Accounts Receivable and Payable. Except as set forth on Schedule
------------------------------- --------
2.18.1, the accounts receivable outstanding as of the date of the Latest Balance
- - ------
Sheet are, and the accounts receivable outstanding as of the Closing Date will
be, (i) valid and genuine accounts receivable arising solely out of bona fide
sales and delivery of goods, performance of services and other business
transactions in the ordinary course of business consistent with past practice,
(ii) subject to no defenses, counterclaims, or rights of setoff, and (iii)
collectible within ninety (90) days after billing at the full recorded amount
thereof less the recorded allowance for doubtful accounts reflected on the
Latest Balance Sheet or the Closing Date Balance Sheet, as applicable. Except as
set forth on Schedule 2.18.2, no accounts payable of the Company are, at this
---------------
date, over 30 days old and no accounts payable of the Company will be over 30
days old at the Closing Date.
2.19 Taxes.
-----
(a) Except as listed in Schedule 2.19 or as reflected in the
-------------
Financial Statements, there does not exist and will not after the Effective Time
exist any liability for taxes which may be asserted by any taxing authority
against, and no lien or other encumbrance for taxes will attach to, the Company
or any of its Assets other than (i) taxes due in respect of periods for which
tax returns are not yet due and for which adequate accruals have been made in
the Financial Statements and (ii) taxes accrued in the ordinary course of
business between the date of the Financial Statements and the Closing Date. All
federal, state and local tax returns and tax reports required to be filed prior
to the date hereof with respect to the Company have been filed (other than
returns for which extensions to file have been granted) with the appropriate
governmental agencies in all jurisdictions in which such returns and reports are
required to be filed, all of which are true, correct and complete, and all
amounts shown as owing thereon have been paid.
(b) Except as listed on Schedule 2.19, the Company has not received
-------------
notice of any tax claims being asserted or any proposed assessment by any taxing
authority and no tax returns of the Company have been examined by the Internal
Revenue Service (the "IRS") or the appropriate state agencies for any fiscal
year or period ended prior to the date hereof, and the Company is not presently
under, nor has it received notice of any, contemplated investigation or audit by
the IRS or any state agency concerning any fiscal year or period ended prior to
the date hereof. Except as listed on Schedule 2.19, the Company has not
-------------
executed any extension or waivers of any statute of limitations on the
assessment or collection of any tax due that is currently in effect.
(c) The Company and any predecessors in interest have withheld or
collected from each payment made to each of their employees the amount of all
taxes required to be withheld or collected therefrom and the Company and any
predecessors in interest have paid the same to the proper tax depositories or
collecting authorities.
(d) For purposes hereof, "taxes" shall mean any federal, state,
county, local, foreign or other tax, charge, imposition or other levy (including
interest or penalties thereon) including without limitation, income taxes
estimated taxes, excise taxes, sales taxes, use taxes, gross receipts taxes,
franchise taxes, taxes on earnings and profits, employment and payroll related
taxes, property taxes, real property transfer taxes, Federal Insurance
Contributions Act taxes, taxes on value added and import duties,
-10-
<PAGE>
whether or not measured in whole or in part by net income, imposed by the United
States or any political subdivision thereof or by any jurisdiction other than
the United States or any political subdivision thereof.
(e) If the Company is a Subchapter S corporation within the meaning
of the Code, it has been a Subchapter S corporation at all times since the date
specified on Schedule 2.19 under federal law and corresponding provisions of any
-------------
applicable state law and does not have any net unrealized built-in gain within
the meaning of Section 1374 of the Code.
2.20 Statements True and Correct. No representation or warranty made
---------------------------
herein by the Company or any of the Owners, nor in any statement, certificate or
instrument to be furnished to Premiere by the Company or any of the Owners
pursuant to any Transaction Document, contains or will contain any untrue
statement of material fact or omits or will omit to state a material fact
necessary to make these statements contained herein and therein not misleading.
2.21 Intellectual Property Rights. Schedule 2.21(a)(i) sets forth (i) a
---------------------------- -------------------
brief description of each Company Intellectual Property Right, and (ii) with
respect to each Company Intellectual Property Right registered or capable of
registration with any regulatory authority or for which an application for
registration has been filed with any regulatory authority, the names of the
jurisdictions covered by the applicable registration or application, if any.
Schedule 2.21(a)(ii) identifies and provides a brief description of each
- - --------------------
Intellectual Property Right licensed to the Company by any Person (except for
any Intellectual Property Right that is licensed to the Company under any third
party software license generally available to the public at a cost of less than
Ten Thousand Dollars ($10,000)), and identifies the license agreement under
which such Intellectual Property Right is being licensed to the Company. The
Company is not in Default under any such license agreements. Except as set forth
in Schedule 2.21(a)(iii), the Company has valid and marketable title to all
---------------------
Company Intellectual Property Rights used in or reasonably necessary for the
conduct of its business free and clear of all liens and other encumbrances,
except for third party Intellectual Property Rights licensed to the Company, as
to which it has a valid right to use with respect to such Company Intellectual
Property Rights. No present or former employee or owner of the Company and no
other Person owns or has any proprietary, financial or other interest, direct or
indirect, in whole or in part, in any Intellectual Property Right which the
Company owns, possesses or uses in its operations as now or heretofore
conducted. All personnel, including employees, agents, consultants, and
contractors, who have contributed to or participated in the conception and
development of any Company Intellectual Property Right (i) have been party to a
"work-for-hire" relationship with the Company that has accorded the Company
full, effective, and exclusive original ownership of all tangible and intangible
property thereby arising with respect to such Company Intellectual Property
Right, and/or (ii) have executed appropriate instruments of assignment in favor
of the Company as assignee that have conveyed to the Company full, effective,
and exclusive ownership of all tangible and intangible property thereby arising
with respect to such Company Intellectual Property Right. Except as set forth in
Schedule 2.21(a)(iv), the Company is not obligated to make any material payment
- - --------------------
to any Person for the use of any Company Intellectual Property Right. Except as
set forth in Schedule 2.21(a)(v), the Company has not developed jointly with any
-------------------
other Person any Company Intellectual Property Right with respect to which such
other Person has any rights. The Company is the owner of or has a license to any
Intellectual Property Right sold or licensed to a third party by the Company in
connection with its business operations, and the Company has the right to convey
by sale or license any Intellectual Property Rights so conveyed.
(b) Except as set forth in Schedule 2.21(b), the Company has taken all
----------------
reasonable and customary measures and precautions necessary to protect and
maintain the confidentiality and secrecy of all Company Intellectual Property
Rights (except Company Intellectual Property Rights whose value would be
unimpaired by public disclosure) and otherwise to maintain and protect the value
of all Company Intellectual Property Rights. Except as set forth in Schedule
--------
2.21(b), the Company has not
- - -------
-11-
<PAGE>
disclosed or delivered, or permitted the disclosure or delivery to any Person of
the source code, or any portion or aspect of the source code, of any Company
Intellectual Property Rights.
(c) The Company is not infringing, misappropriating or making any
unlawful use of, and no the Company has not at any time infringed,
misappropriated or made any unlawful use of, and, except as set forth in
Schedule 2.21(c), the Company has not received any notice or other communication
- - ----------------
(in writing or otherwise) of any actual, alleged, possible or potential
infringement, misappropriation or unlawful use of, any Intellectual Property
Right owned or used by any other Person. To the Knowledge of the Company, no
other Person is infringing, misappropriating or making any unlawful use of, and
no Intellectual Property Right owned or used by any other Person infringes or
conflicts with, any Company Intellectual Property Right.
(d) The Company Intellectual Property Rights constitute all the
Intellectual Property Rights necessary to enable the Company to conduct its
business in the manner in which such business has been and is being conducted.
The Company has not licensed any of the Company Intellectual Property Rights to
any Person on an exclusive basis and, except as set forth in Schedule 2.21(d),
----------------
the Company has not entered into any covenant not to compete or contract
limiting its ability to exploit fully any of the Company Intellectual Property
Rights or to transact business in any market or geographical area or with any
Person.
(e) Except as disclosed in Schedule 2.21(e), every officer, director,
----------------
or employee of the Company is a party to a contract which requires such officer,
director or employee to assign any interest in any Intellectual Property Right
to the Company and to keep confidential any trade secrets, proprietary data,
customer information, or other business information of the Company, and no such
officer, director or employee is party to any contract with any Person other
than the Company which requires such officer, director or employee to assign any
interest in any Intellectual Property Right to any Person other than the Company
or to keep confidential any trade secrets, proprietary data, customer
information, or other business information of any Person other than the Company.
Except as disclosed in Schedule 2.21(e), no officer, director or employee of the
----------------
Company is party to any contract which restricts or prohibits such officer,
director or employee from engaging in activities competitive with any Person,
including the Company.
2.22 Company Products and Services. The Company Products and Services
-----------------------------
conform in all material respects with any specification, documentation,
performance standard, representation or statement made or provided with respect
thereto by or on behalf of the Company, and there has not been during the last
three (3) years any claim made against the Company by any customer of the
Company or by any other Person alleging that any Company Product and Service
(including each version thereof that has been licensed or otherwise made
available by the Company to any Person) does not conform in all material
respects with any specification, documentation, performance standard,
representation or statement made or provided by or on behalf of the Company,
and, to the Knowledge of the Company, there is not a reasonable basis for any
such claim. No product liability or warranty claims which individually or in the
aggregate could exceed the reserves therefor on the Financial Statements have
been communicated in writing to or threatened in writing against the Company.
The Company Products and Services, as of the date hereof, during and after the
calendar year 2000 A.D., include design, function and performance capabilities
such that the Company Products and Services shall not abnormally end and/or have
invalid and/or incorrect results from and/or performance or functional
degradation because of the then-current date. The design and function of the
Company Products and Services shall ensure year 2000 A.D. and shall include, but
not be limited to, date data century recognition, calculations that accommodate
same century and multicentury formulas and date values, and date data interface
values that reflect the century.
-12-
<PAGE>
III. REPRESENTATIONS AND WARRANTIES OF PREMIERE
------------------------------------------
Premiere hereby represents and warrants the following to the Company and
the Owners:
3.1 Organization, Authority and Capacity. Premiere is a corporation duly
------------------------------------
organized, validly existing, and in good standing under the laws of the State of
Georgia and has the full power and authority necessary to (i) execute, deliver
and perform its obligations under the Transaction Documents to be executed and
delivered by it, and (ii) carry on its business as it has been and is now being
conducted and to own and lease the properties and Assets which it now owns or
leases. Premiere is duly qualified to do business and is in good standing in
each jurisdiction in which a failure to be so qualified or in good standing
would have a material adverse effect on (i) Premiere's ability to perform its
obligations under the Transaction Documents to be executed and delivered by it
or, (ii) the Assets, results of operations or prospects of Premiere.
3.2 Authorization and Validity. The execution, delivery and performance of
--------------------------
the Transaction Documents to be executed and delivered by Premiere have been
duly authorized by all necessary action by Premiere. The Transaction Documents
to be executed and delivered by Premiere have been or will be, as the case may
be, duly executed and delivered by Premiere and constitute or will constitute
the legal, valid and binding obligations of Premiere, enforceable in accordance
with their respective terms, except as may be limited by bankruptcy, insolvency,
or other laws affecting creditors' rights generally, or as may be modified by a
court of equity.
3.3 Absence of Conflicting Agreements or Required Consents. The execution,
------------------------------------------------------
delivery and performance by Premiere of the Transaction Documents to be executed
and delivered by it: (i) do not require the consent of or notice to any
governmental or regulatory authority or any other third party; (ii) will not
conflict with any provision of Premiere's articles of incorporation or bylaws;
or (iii) will not conflict with or result in a violation of any law, ordinance,
regulation, ruling, judgment, order or injunction of any court or governmental
instrumentality to which Premiere is a party or by which Premiere or any of its
properties are bound.
3.4 Outstanding and Authorized Capitalization. The authorized capital
-----------------------------------------
stock of Premiere consists of (a) one hundred and fifty million (150,000,000)
shares of common stock, par value $.01 per share, of which _________ shares were
issued and outstanding as of ___________ __, 1997, and (b) five million
(5,000,000) shares of preferred stock, par value $.01 per share, none of which
are issued and outstanding as of the date of this Agreement.
3.5 SEC Filings; Financial Statements.
---------------------------------
(a) Premiere has timely filed and made available to the Owners and the
Company all SEC Documents required to be filed by Premiere since March 5, 1996
(the "Premiere SEC Reports"). The Premiere SEC Reports (i) at the time filed,
complied in all material respects with the applicable requirements of the
Securities Laws and other applicable laws and (ii) did not, at the time they
were filed (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such
Premiere SEC Reports or necessary in order to make the statements in such
Premiere SEC Reports, in light of the circumstances under which they were made,
not misleading. No Premiere Subsidiary is required to file any SEC Documents.
(b) Each of the Premiere Financial Statements (including, in each
case, any related notes) contained in the Premiere SEC Reports, including any
Premiere SEC Reports filed after the date of this Agreement until the Effective
Time, complied as to form in all material respects with the applicable published
rules and regulations of the SEC with respect thereto, was prepared in
accordance with GAAP
-13-
<PAGE>
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes to such financial statements or, in the case of unaudited
interim statements, as permitted by Form 10-Q of the SEC), and fairly presented
in all material respects the consolidated financial position of Premiere and its
Subsidiaries as at the respective dates and the consolidated results of
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring year-
end adjustments which were not or are not expected to be material in amount or
effect.
3.6 Statements True and Correct. No representation or warranty made herein
---------------------------
by Premiere, nor in any statement, certificate or instrument to be furnished to
the Company or any of the Owners by Premiere pursuant to any Transaction
Document, contains or will contain any untrue statement of material fact or
omits or will omit to state a material fact necessary to make these statements
contained therein not misleading.
IV. ADDITIONAL COVENANTS AND AGREEMENTS
-----------------------------------
4.1 Access to Company Information. At all times prior to the Closing, the
-----------------------------
Company and the Owners will afford the officers and authorized representatives
of Premiere access to all of the Company's properties, books and records that
may relate to or concern the Transactions and will furnish Premiere with such
additional financial, operating and other information as to the business and
properties of the Company as Premiere may from time to time reasonably request.
Premiere shall also be allowed access, upon reasonable notice, to consult with
the officers, employees, accountants, counsel and agents of the Company in
connection with such investigation of the properties and business of the
Company. No such investigation shall diminish or otherwise affect any of the
representations, warranties, covenants or agreements of any party under this
Agreement.
4.2 No-Shop. Unless and until this Agreement is terminated pursuant to
-------
Article VII hereof, neither the Company nor any Owner shall directly or
indirectly, through any officer, director, employee, agent, intermediary or
otherwise: (i) solicit, initiate or encourage submission of proposals or offers
from any person or other entity relating to any purchase of an equity interest
in the Company, or any merger, sale of substantial Assets or any similar
transaction whether or not resulting in a change of control of the Company; (ii)
participate in any discussions or negotiations regarding, or furnish to any
other person or other entity, any information with respect to, or otherwise
cooperate or encourage, any effort or attempt by any other person or other
entity to purchase any equity interest in the Company, or engage in a merger,
purchase of substantial Assets or any similar transaction whether or not such
transaction contemplates a change of control the Company; or (iii) approve or
undertake any such transaction. The Company and the Owners shall promptly (but
in any event within twenty-four (24) hours) communicate to Premiere the terms of
any such oral or written proposal or offer upon knowledge or receipt of such
proposal or offer.
4.3 Affirmative Covenants of the Company. From the date hereof until the
------------------------------------
earlier of the Effective Time or the termination of this Agreement, the Company
covenants and agrees that, unless the prior written consent of Premiere shall
have been obtained, and except as otherwise expressly contemplated herein or in
the Transfer Agreement, the Company shall:
(i) operate its business only in the usual, regular, and ordinary
course of business, consistent with past practices;
(ii) preserve intact its business organization, licenses, permits,
vendor and supplier relationships and subscriber relationships;
-14-
<PAGE>
(iii) retain the services of its employees, agents and consultants on
terms and conditions not less favorable than those existing prior to the
date hereof and ensure that there are no material or adverse changes to
employee relations;
(iv) keep and maintain its Assets in their present condition, repair
and working order, except for normal depreciation and wear and tear, and
maintain its insurance, rights and licenses;
(v) pay all accounts payable of the Company in accordance with past
practice and collect all accounts receivable in accordance with past
practice, but not less than in accordance with prudent business practices;
(vi) consult with Premiere prior to undertaking any new business
opportunity outside the ordinary course of business and not undertake such
new business opportunity without the prior written consent of Premiere;
(vii) confer on a regular and frequent basis with one or more
designated representatives of Premiere to report material operational
matters and to report the general status of ongoing business operations;
(viii) upon request by Premiere, make available to Premiere true and
correct copies of all internal management and control reports (including
aging of accounts receivable, listings of accounts payable, and inventory
control reports) and financial statements related to the Company and
furnished to management of the Company;
(ix) cause all tax returns that have not been filed prior to the date
hereof to be prepared and filed on or before the date such tax return is
required to be filed (taking into account any extensions of the filing
deadlines granted); provided, however, that any such tax return (other than
routine employment and sales tax returns) shall not be filed without a
reasonable opportunity for prior review and comment by Premiere;
(x) as soon as reasonably practicable after they become available,
but in no event more than ten (10) days following the end of each calendar
month, deliver to Premiere true and complete copies of its monthly
financial statements for each calendar month ending subsequent to the date
hereof on the format historically utilized by the Company;
(xi) perform in all material respects all obligations under
agreements relating to or affecting its Assets, properties or rights;
(xii) keep in full force and effect present insurance policies or
other comparable insurance coverage; and
(xiii) notify Premiere of (i) any event or circumstance which is
reasonably likely to have a material adverse effect on the Company or would
cause or constitute a breach of any of the Company's representations,
warranties or covenants contained herein; or (ii) any unexpected change in
the normal course of business or in the operation of the Company's Assets,
and of any governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated), adjudicatory
proceedings, budget meetings or submissions involving any material
property. The Company agrees to keep Premiere fully informed of such
events and to permit Premiere's representatives prompt access to all
materials prepared in connection therewith.
-15-
<PAGE>
4.4 Negative Covenants of the Company. From the date hereof until the
---------------------------------
earlier of the Effective Time or the termination of this Agreement, the Company
covenants and agrees that it will not do any of the following without the prior
written consent of Premiere, except as may be contemplated herein or by the
Transfer Agreement:
(i) take any action which would (i) adversely affect the
ability of any party to the Transaction Documents to obtain any consents
required for the transactions contemplated thereby, or (ii) adversely
affect the ability of any party hereto to perform its covenants and
agreements under the Transaction Documents;
(ii) amend any of its organizational or governing documents;
(iii) incur any additional debt obligation or other obligation
for borrowed money except in the ordinary course of the business of the
Company consistent with past practices, or impose, or suffer the
imposition, on any Asset of the Company of any lien or permit any such lien
to exist;
(iv) repurchase, redeem, or otherwise acquire or exchange,
directly or indirectly, any Company Equity Securities, or any securities
convertible into any Company Equity Securities, or declare or pay any
dividend or make any other distribution in respect of Company Equity
Securities;
(v) other than pursuant to the Transaction Documents, issue,
sell, pledge, encumber, authorize the issuance of, enter into any contract
to issue, sell, pledge, encumber, or authorize the issuance of, or
otherwise permit to become outstanding, any additional Company Equity
Securities or any rights with respect to any Company Equity Securities;
(vi) purchase or acquire any Assets or properties, whether real
or personal, tangible or intangible, or sell or dispose of any Assets or
properties, whether real or personal, tangible or intangible, except in the
ordinary course of business and consistent with past practices;
(vii) adjust, split, combine or reclassify any Company Equity
Securities or issue or authorize the issuance of any other securities in
respect of or in substitution for Company Equity Securities, or sell,
lease, mortgage or otherwise dispose of or otherwise encumber any Asset;
(viii) purchase any securities or make any material investment,
either by purchase of stock or other securities, contributions to capital,
Asset transfers, or purchase of any Assets, in any entity, or otherwise
acquire direct or indirect control over any other entity;
(ix) grant any increase in compensation or benefits to the
employees or officers of the Company; pay any severance or termination pay
or any bonus other than pursuant to written policies or written contracts
in effect as of the date hereof and disclosed on the Schedules hereto;
---------
enter into or amend any severance agreements with officers of the Company;
or grant any increase in fees or other increases in compensation or other
benefits to directors of the Company;
(x) enter into or amend any employment contract between the
Company and any person or entity (unless such amendment is required by law)
that the Company does not have the unconditional right to terminate without
liability (other than liability for services already rendered), at any time
on or after the Effective Time;
-16-
<PAGE>
(xi) adopt any new employee benefit plan or make any material
change in or to any existing employee benefit plans other than any such
change that is required by law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax qualified status of any such
plan;
(xii) make any significant change in any tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in tax laws or regulatory accounting
requirements or GAAP;
(xiii) commence any litigation other than in accordance with past
practice, settle any litigation involving any liability of the Company for
material money damages or restrictions upon the operations of the Company;
(xiv) modify, amend or terminate any material contract or waive,
release, compromise or assign any material rights or claims;
(xv) make or commit to make any capital expenditure, or enter
into any lease of capital equipment as lessee or lessor;
(xvi) take any action, or omit to take any action, which would
cause any of the representations and warranties contained in Article II or
the Transfer Agreement to be untrue or incorrect; or
(xvii) make any loan to any person or increase the aggregate
amount of any loan currently outstanding to any person.
4.5 Confidentiality. Each of Premiere, the Company and the Owners agree
---------------
that from the date hereof until the earlier of termination of the Transfer
Agreement or the Effective Time, it will not, and will use reasonable commercial
efforts to ensure that none of its representatives, agents or employees will,
without the prior written consent of Premiere or the Company, as applicable, use
or disclose to or file with any other person any confidential or non-public
information relating to the other party, except for: (i) use or disclosures
required, in the reasonable judgment of Premiere, in connection with the
Transactions, and (ii) use or disclosures that are required by any law,
regulation, rule, ordinance or judicial process. Notwithstanding the foregoing,
Premiere shall not, in the course of any investigation it shall deem necessary
and desirable in connection with the transactions contemplated by this
Agreement, be prohibited from discussing the business and Assets of the Company
with VTE, the other Franchisee Companies, or their respective owners, or with
others having business dealings with the Company. The Company and the Owners
agree to restrict their use or disclosure of confidential information concerning
the other Franchisee Companies and their respective owners in a manner
consistent with the restrictions on Premiere contained in this Section 4.5 and
Premiere agrees that it will cause each of the other Franchisee Companies and
their respective owners to enter into a provision similar to this Section 4.5
with respect to information obtained by them concerning the Company and the
Owners. The Owners and the Company hereby acknowledge that the Premiere Common
Stock is publicly traded and that the Securities Laws prohibit each Owner and
any other Person who has received material non-public information about Premiere
from purchasing or selling securities of Premiere or from communicating such
information to any other Person under circumstances in which it is reasonably
foreseeable that such Person is likely to purchase or sell such securities in
reliance on such information.
4.6 Public Announcements. Neither the Company nor the Owners, nor any of
--------------------
their representatives, shall make any public announcement with respect to the
Transfer Agreement or the Transactions without the prior written consent of
Premiere, and Premiere shall not make the initial public announcement with
respect thereto without the prior written consent of the Company, unless, in
either
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case, required by law or judicial process, in which case notification shall be
given to Premiere or to the Company, as the case may be, prior to such
disclosure.
4.7 Noncompetition, Nonsolicitation and Nondisclosure.
-------------------------------------------------
(a) The parties acknowledge:
(i) that each Owner has substantial special expertise and
experience in the Business Activities (as defined below) and that such Owner
possesses substantial contacts with suppliers and customers of the Company, and
that such expertise, experience and contacts have been built up over a number of
years, including such Owner's period of ownership of Company Equity Securities;
(ii) that each Owner will be well-compensated under this
Agreement for the expertise, knowledge and contacts he or she has obtained, as
well as the goodwill that he or she has built up in the Company, and that this
Section 4.7 is being executed as an integral part of such Owner's sale of all of
his or her Company Equity Securities to Purchaser pursuant to the Transactions,
an express element of which includes the sale of the goodwill such Owner's
ownership and service has generated, and for which sale such Owner will receive
substantial remuneration hereunder;
(iii) that each Owner has occupied a position of trust and
responsibility with the Company in which he or she has had access to a
substantial amount of Confidential Information (as defined below) and Trade
Secrets (as defined below), and that Premiere is entering into this Agreement in
reliance upon such Owner's agreement not to use or disclose such Trade Secrets
and Confidential Information, not to compete against Premiere or any Affiliate,
and not to solicit Premiere's or any such Affiliate's customers during the time
periods set forth in this Agreement;
(iv) that due to each Owner's special experience and his or
her close identification with goodwill of the Company, the harm caused by such
Owner's violation of the provisions of this Section 4.7 cannot reasonably or
adequately be compensated solely by damages in an action at law;
(v) that Owner is capable of competing with and
substantially harming Premiere and its Affiliates and has more than adequate
capital, experience, customer contact, supplier contact, name recognition and
industry reputation to start a competing business, which would deprive Premiere
of all or substantially all of its bargained for goodwill and other
consideration in the Transactions; and
(vi) that the terms of this Section 4.7 are necessary to
protect Premiere's legitimate business interests, Trade Secrets and Confidential
Information and that Owner's competition with Premiere or any of its Affiliates
or other violation of the covenants set forth below would cause substantial and
irreparable harm to Premiere.
(b) For purposes of this Section 4.7, the following terms shall
have the meanings set forth below:
(i) "Business Activities" shall mean the provision of
interactive voice messaging services.
(ii) "Confidential Information" means information, other
than Trade Secrets, which relates to the Company, the Company's business, or the
Company's suppliers or customers that is not generally known by persons not
employed by the Company or VTE and which Owner has learned as a consequence of
his or her relationship to the Company or VTE. Such information includes,
without limitation, to the extent it is not considered a Trade Secret, financial
information, strategic plans and forecasts, marketing plans and
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<PAGE>
forecasts, customer lists, customer pricing and order data, supplier lists, or
technical information relating to the Company's products or services.
"Confidential Information" shall not include information which has become
generally available to the public by the act of one who has the right to
disclose such information without violating a legal right of Premiere or the
Company.
(iii) "Trade Secrets" shall mean all secret, proprietary or
confidential information regarding the Company or its business, including any
and all information not generally known to, or ascertainable by, persons not
employed by the Company or VTE, the disclosure or knowledge of which would
permit those persons to derive actual or potential economic value therefrom or
to cause economic or financial harm to the Company or VTE. "Trade Secrets"
shall not include information that has become generally available to the public
by the act of one who has the right to disclose such information without
violating a legal right of Premiere or the Company.
(c) For three (3) years immediately following the execution of
this Agreement, no Owner shall, directly or indirectly, by himself or herself or
in conjunction with any person, firm or corporation other than Premiere, engage
in Business Activities, or help anyone else engage in the Business Activities,
within the Protected Territory. Notwithstanding anything contained herein to the
contrary, Owner may own up to two percent (2%) of the shares of a publicly-held
corporation which competes with Premiere or any of its Affiliates, provided none
of his or her other relationships with such corporation violate the terms of
this Section 4.7.
(d) No Owner shall, for himself or herself or on behalf of
others, use or disclose any Confidential Information or Trade Secrets except in
the furtherance of the business of Premiere or any of its Affiliates. Trade
Secrets shall not lose the protection of this provision at the end of such
three-year period. No Owner shall use or disclose any Trade Secret at any time
while the information remains a Trade Secret. Nothing in this provision shall
limit the protections available to Premiere under any federal, state or local
statute or legal principle governing confidential information or trade secrets.
(e) Notwithstanding anything else in this Agreement to the
contrary, the terms of this Section 4.7 shall survive the expiration or
termination of this Agreement. If an Owner violates any portion of this Section
4.7, he or she shall forfeit and return all compensation due to him or her, or
already paid to him or her pursuant to this Agreement.
(f) Each Owner acknowledges that his or her agreement not to
compete with Premiere or any of its Affiliates is necessarily of a special,
unique and extraordinary nature, and that the loss arising from a breach thereof
cannot reasonably be compensated by money damages and will cause Premiere and
any such Affiliate irreparable harm. Accordingly, upon the failure of any Owner
to comply with the terms of this Section 4.7 at any time, Premiere and any such
Affiliate shall be entitled to injunctive or other extraordinary relief in case
of such breach, such injunctive or other extraordinary relief to be cumulative
to, but not in limitation of, any other remedies to which Premiere or any such
Affiliate may be entitled.
(g) Premiere and the Owners intend that Premiere have the
broadest possible protection from unfair competition by the Owners with Premiere
or any of its Affiliates, consistent with public policy. Accordingly, should any
court of competent jurisdiction determine that, consistent with the established
precedent of the forum state, the public policy of such state requires a more
limited restriction in duration, geographic area, nature of restricted activity,
or any combination thereof, it would be in furtherance of the intentions of the
parties hereto for the court to so interpret and construe the terms of this
Agreement, or to modify the Agreement, to apply to only such more limited
restrictions to an appropriate degree.
4.8 Approval of Transactions. Each Owner, through the execution and
-------------------------
delivery of the Transfer Agreement, irrevocably votes for and approves the
Transactions in its capacity as a holder of Company
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<PAGE>
Equity Securities and each such Owner does hereby waive any required notice for
any meeting concerning such matters. At any further meeting of the Owners of the
Company called to vote on the Transactions or in any other circumstances upon
which a vote, consent or other approval with respect to the Transactions is
sought, such Owner shall vote (or cause to be voted), such Owner's Company
Equity Securities in favor of the Transactions and the execution, delivery and
performance by the Company of the Transfer Agreement. Each Owner acknowledges
and agrees that he, she or it has had adequate opportunity to review the terms
and conditions of the Transactions and to seek independent legal, tax and
financial advice.
4.9 Delivery of Schedules. All Schedules required to be delivered by the
--------------------- ---------
Company and the Owners shall be delivered to Premiere in completed form upon
execution hereof. The last such Schedule delivered shall be accompanied by a
--------
certificate, executed by the Company and the Owners, stating that all Schedules
---------
required to be delivered by such parties hereunder have been delivered.
4.10 Tax Returns. The Owners shall cause to be prepared and filed, at
-----------
their expense, a short-period tax return of the Company ending on the Closing
Date, which shall be provided to Premiere for its prior review and approval,
such approval not to be unreasonably withheld or delayed. If the Company is a
Subchapter S corporation within the meaning of the Code, the Company shall
maintain its status as a Subchapter S corporation under the Code and any
corresponding provisions of any applicable state law through the Closing Date
and shall file such short-period return with that status. Premiere agrees to
make available any information in its or the Company's possession which may
reasonably be required by the Owners to complete any such short-period return.
4.11 Risk of Loss. The Company shall retain all risk of condemnation,
------------
destruction, loss or damage due to fire or other casualty from the date of this
Agreement until the Closing. If the condemnation, destruction, loss, or damage
occurring prior to the Closing is such that the operation of the Company is
materially interrupted or curtailed or any of the Assets of the Company are
materially affected, then Premiere shall have the right to terminate this
Agreement. If Premiere nonetheless elects to close, the Company shall retain as
the surviving corporation in the merger all net condemnation proceeds or third
party insurance proceeds to Premiere and the Consideration shall be adjusted at
the Closing to reflect such condemnation, destruction, loss or damage to the
extent that insurance or condemnation proceeds are not sufficient to cover such
destruction, loss or damage provided, however, in such event, the Company shall
have the right to terminate this Agreement prior to the Closing if the
Consideration is to be reduced by more than twenty percent (20%).
4.12 State Takeover Laws. The Company and each of the Owners shall take
-------------------
all necessary steps to exempt the Transactions from, or if necessary to
challenge the validity or applicability of, any applicable "moratorium," "fair
price," "business combination," "control share," or other anti-takeover laws.
4.13 Documents of the Company. True and correct copies of (i) the
------------------------
organizational documents and all amendments thereto of the Company (certified by
the Secretary of State of the state in which the Company was organized, as
applicable), (ii) the Company's minutes, which accurately reflect all
proceedings of the board of directors of the Company (and all committees
thereof) and (iii) the record books of the Company, which contain true, complete
and accurate records of the ownership of the Company, shall be provided to
Premiere at Closing in accordance with Section 5.4(c).
4.14 Owner Covenant. Each Owner acknowledges and agrees that such Owner
--------------
does not have and will not claim any individual interest in the Assets, property
or rights of the Company and, after the Closing, will claim no further equity or
other interest in the Company or its Assets, properties or rights.
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<PAGE>
4.15 Consents. The Company and the Owners shall use commercially
--------
reasonable efforts to obtain all necessary consents prior to the Closing, and to
the extent any such necessary consent has not been obtained, the Company and the
Owners shall continue their efforts to obtain such consent after the Closing. In
order, however, that the full value of the Company's contracts and agreements
may be realized, at Premiere's request, direction and expense, the Owners and
the Company shall take such action as shall be reasonably necessary in order to
preserve for the benefit of Premiere and the Company the rights and obligations
of the Company under such contracts and agreements.
V. CONDITIONS TO OBLIGATIONS OF PREMIERE
-------------------------------------
In addition to any conditions set forth in the Transfer Agreement, the
obligation of Premiere to consummate the Transactions is subject to the
satisfaction or waiver, at or prior to Closing, of each of the following
conditions:
5.1 Representations and Warranties. The representations and warranties of
------------------------------
the Company and the Owners set forth in this Agreement, or any document or
instrument delivered to Premiere hereunder, shall be true and correct as of the
Effective Time with the same force and effect as if such representations and
warranties had been made at and as of the Effective Time, except with respect to
any of such representations and warranties referring to a state of facts
existing on a specified date prior to the Closing Date, it shall be sufficient
if at the Effective Time such representation and warranty continues to describe
accurately the state of facts existing on the date so specified.
5.2 Performance. All of the terms, covenants and conditions of the
-----------
Transaction Documents to be complied with or performed by the Company or the
Owners at or prior to Closing shall have been complied with and performed in all
material respects.
5.3 Document Delivery - General. The Company and the Owners shall have
---------------------------
delivered the following:
(a) A good standing certificate regarding the Company and any
Owner that is not a natural person, certified by the Secretary of State of such
party's state of organization dated within fifteen (15) business days of the
Closing;
(b) A certificate dated as of the Closing Date signed by the
duly authorized officers of the Company and by the Owners certifying that the
representations and warranties of the Company and the Owners set forth herein
are true and correct in all material respects as of the Effective Time and that
the Company and each of the Owners have fulfilled all of the conditions of this
Article V;
(c) A certificate certifying that the documents provided
pursuant to Section 4.13 are true, accurate and complete;
(d) Resolutions of the Company and any Owner that is not a
natural person in form and substance satisfactory to Premiere approving the
execution, delivery and performance of this Agreement and the consummation of
the Transactions, certified by an appropriate officer of the Company and any
such Owner;
(e) An incumbency certificate certifying the identity of the
officers of the Company and any Owner that is not a natural person;
(f) Such further assurances, certificates or opinions as may be
specified in the Transfer Agreement with respect to the tax consequences of the
Transactions; and
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<PAGE>
(g) A certificate of the chief financial officer of the Company
certifying that the Closing Date Balance Sheet presents fairly in all material
respects the financial condition of the Company as of the Closing Date and is in
accordance with the books and records of the Company.
5.4 Document Delivery - Asset Transfer. If the Transactions involve an
----------------------------------
Asset Transfer, the Company and the Owners shall have delivered the following:
(a) A Bill of Sale, Assignment and Assumption Agreement
satisfactory to Premiere conveying the Transferred Assets as provided in the
Transfer Agreement;
(b) An acknowledgment of each Owner disclaiming any individual
interest in the Transferred Assets; and
(c) Such warranty deeds, surveys, title insurance policies,
zoning certificates, environmental reports and other matters concerning any
owned or leased real property as Premiere shall reasonably require, at its
expense, concerning the condition thereof and the conveyance of good and
marketable thereto in the case of such owned property.
5.5 Document Delivery - Stock Transfer. If the Transactions involve a
----------------------------------
Stock Transfer, the Company and the Owners, as applicable, shall have delivered
the following:
(a) Certificates representing the Company Equity Securities
being purchased or converted into the consideration specified in the Transfer
Agreement, as they case may be, together with accompanying stock transfer powers
or instruments of assignment, duly endorsed in blank;
(b) Resignations of each of the officers and directors of the
Company effective as of the Effective Time;
(c) Releases, in form and substance satisfactory to Premiere, of
each Owner and each officer and director of the Company concerning any claim
against the Company other than accrued wages and benefits;
(d) All books and records of the Company, including all
corporate and other records, minute books, stock record books, stock registers,
books of accounts, contracts, agreements and such other documents or
certificates as shall be reasonably requested by Premiere;
(e) Such documents as shall be reasonably acceptable to Premiere
by which the Company shall convey and assign to any Owner, and by which any
Owner shall accept and assume, any Asset or liability of the Company as
specified by the Transfer Agreement to be conveyed to and assumed by any such
Owner;
(f) If the Stock Transfer also involves a merger, evidence that
said merger is effective under the laws of the jurisdiction of each constituent
entity to the merger;
(g) If the Stock Transfer also involves a merger, documentary
evidence that the transfer of certain rights and Assets to the surviving
corporation in the Merger, as contemplated by the Transfer Agreement, has
occurred; and
(h) All agreements or arrangements, whether written or oral,
between the Company and any other Person, including without limitation any
Owner, that relate in any manner to the Company Equity Securities shall have
been terminated.
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<PAGE>
5.6 Necessary Consents and Approvals. Premiere, the Company and the Owners
--------------------------------
shall have obtained all licenses, consents and permits, and provided all
notices, necessary in order for Premiere, the Company and the Owners to
consummate the Transactions and for the continued operation of the business of
the Company after the Effective Time consistent with its operation prior to the
Effective Time, including all consents and approvals listed on the Schedules
---------
hereto. No consent so obtained which is necessary to consummate the Transactions
shall be conditioned or restricted in a manner which in the reasonable judgment
of the Board of Directors of Premiere would so materially adversely impact the
economic or business benefits of the Transactions that, had such condition or
requirement been known, Premiere would not have entered into this Agreement
5.7 No Material Adverse Change. There shall not have occurred any
--------------------------
material adverse change in the business, Assets, liabilities or condition,
financial or otherwise, of the Company between the date hereof and the Effective
Time, and a certificate shall have been delivered to Premiere to such effect
signed by each of the Owners and such executive officers of the Company as
Premiere may request.
5.8 No Injunction, Etc. No action, proceeding, investigation or
------------------
legislation shall have been instituted, threatened or proposed before any court,
governmental agency, or legislative body to enjoin, restrain, prohibit or obtain
substantial damages in respect of, or which is related to, arises out of, this
Agreement or the consummation of the Transactions, or which is related to or
arises out of the business or operations of the Company, if such action,
proceeding, investigation or legislation, in the reasonable judgment of Premiere
or its counsel, would make it inadvisable to consummate such transactions.
5.9 Satisfactory Due Diligence.
--------------------------
(a) Premiere shall in all respects be reasonably satisfied with
the results of its due diligence investigation of the Company, including its
continuing review of matters contained or not contained in the Schedules.
(b) Premiere shall have received Uniform Commercial Code and
court and docket searches (conducted through a date reasonably approximate in
time to the Closing) in all jurisdictions where the Company has any material
personal property or fixtures, which shall be in form, scope and substance
satisfactory to Premiere and its counsel, and which shall not disclose any
liens, security interests or encumbrances in the property or Assets of the
Company that are not listed on the Schedules hereto.
---------
5.10 Legal Opinion. Premiere shall have received an opinion of counsel to
-------------
the Company and the Owners in form and substance reasonably satisfactory to
Premiere.
5.11 Escrow Agreement. The Escrow Agent, each of the Owners and the
----------------
Company shall have executed and delivered the Escrow Agreement.
5.12 Claims Letters. Each of the Company, directors and officers of the
--------------
Company and the other Persons listed in Schedule 5.12 shall have executed and
-------------
delivered to Premiere releases concerning any claim against VTE, VTN or the NAP
in form and substance satisfactory to Premiere.
5.13 Owners' Equity. The Owners' equity as of the Closing shall not be
--------------
less than the Owners' equity as of December 31, 1996, excluding for purposes of
the calculation of such Owners' equity the effects of (i) all costs, fees, and
charges, including fees and charges of the Company's accountants, counsel and
financial advisors, whether or not accrued or paid, that are related to the
Transactions and (ii) any reductions in Owners' equity resulting from any
actions or changes in policies of the Company taken at the request of Premiere.
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<PAGE>
VI. CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE OWNERS
-------------------------------------------------------
In addition to any conditions set forth in the Transfer Agreement, the
obligations of the Company and the Owners to close the Transactions are subject
to the satisfaction or waiver, at or prior to Closing, of each of the following
conditions:
6.1 Representations and Warranties. The representations and warranties of
------------------------------
Premiere set forth in this Agreement, or any document or instrument delivered to
any party hereunder, shall be true and correct as of the Effective Time with the
same force and effect as if such representations and warranties had been made at
and as of the Effective Time, except with respect to any of such representations
and warranties referring to a state of facts existing at a specified date prior
to the Closing Date, it shall be sufficient if at the Effective Time such
representation and warranty continues to describe accurately the state of facts
existing on the date so specified.
6.2 Performance; Covenants. All of the terms, covenants and conditions of
----------------------
this Agreement to be complied with or performed by Premiere at or prior to the
Closing shall have been complied with and performed in all material respects.
6.3 Document Delivery - General Premiere shall have delivered the
---------------------------
following:
(a) The consideration required under the Transfer Agreement;
(b) A certificate dated as of the Closing Date signed by a duly
authorized officer of Premiere certifying that the representations and
warranties of Premiere set forth herein are true and correct in all material
respects as of the Effective Time and that Premiere has fulfilled all of the
conditions of this Article VI; and
(c) Resolutions adopted by the Board of Directors of Premiere in
form and substance satisfactory to the Company and the Owners approving the
execution, delivery and performance of this Agreement and the consummation of
the Transactions, certified by the Secretary of Premiere.
6.4 Document Delivery - Asset Transfer. If the Transactions involve an
----------------------------------
Asset Transfer, Premiere shall have delivered the following:
(a) A Bill of Sale, Assignment and Assumption Agreement
satisfactory to the Company and the Owners by which Premiere shall have assumed
and agreed to perform and satisfy the Assumed Liabilities after the Effective
Time.
6.5 Document Delivery - Stock Transfer. If the Transactions involve a
----------------------------------
Stock Transfer, Premiere shall have delivered the following:
(a) If the Stock Transfer also involves a merger, evidence that
said merger is effective under the laws of the jurisdiction of each constituent
entity to the merger; and
(b) Certificates representing the issuance of shares of Premiere
Stock as required by the Transfer Agreement.
6.6 No Injunction, Etc. No action, proceeding, investigation or
------------------
legislation shall have been instituted, threatened or proposed before any court,
governmental agency, or legislative body to enjoin, restrain, prohibit or obtain
substantial damages in respect of, or which is related to, arises out of, this
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<PAGE>
Agreement or the consummation of the Transactions, or which is related to or
arises out of the business or operations of Premiere, if such action,
proceeding, investigation or legislation, in the reasonable judgment of the
Company or its counsel, would make it inadvisable to consummate such
transactions.
VII. CLOSING AND TERMINATION
-----------------------
7.1 Closing. The consummation of the Transactions shall take place at the
-------
offices of Alston & Bird, One Atlantic Center, 1201 West Peachtree Street,
Atlanta, Georgia 30309-3424 on the Anticipated Closing Date, or at such other
time and date as Premiere, the Company and the Owners may mutually agree.
7.2 Right of Termination. The Transfer Agreement and the Transactions may
--------------------
be terminated as between Premiere, the Company and the Owners at any time prior
to the Closing Date:
(a) By the mutual written consent of Premiere and the Company;
(b) By Premiere in the event that the conditions set forth in
Article V of this Agreement shall not have been satisfied or waived by the
Outside Closing Date, unless such satisfaction shall have been frustrated or
made impossible by any act or failure to act of Premiere; and
(c) By the Company in the event that the conditions set forth in
Article VI of this Agreement shall not have been satisfied or waived by the
Outside Closing Date, unless such satisfaction shall have been frustrated or
made impossible by any act or failure to act of the Company or one or more of
the Owners.
7.3 Effect of Termination. In the event that this Agreement is terminated
---------------------
in accordance with Section 7.2, the Transfer Agreement shall become void and of
no further force or effect, without any liability on the part of any of the
parties hereto or their respective owners, directors, officers or employees,
except the obligations of each party under this Section 7.3 and the obligations
of each party to preserve the confidentiality of documents, certificates and
information furnished to such party pursuant thereto and for any obligation or
liability of any party based on or arising from any breach or default by such
party with respect to its representations, warranties, covenants or agreements
contained in the Transaction Documents.
VIII. INDEMNIFICATION
---------------
8.1 Indemnification of Premiere.
---------------------------
(a) Subject to the provisions of this Article VIII, each Owner
shall, severally and not jointly, indemnify and hold harmless Premiere, and its
officers, directors, agents or Affiliates, from and against any and all demands,
claims, actions or causes of action, assessments, losses, diminution in value,
damages (including special and consequential damages), liabilities, costs and
expenses, including but not limited to reasonable attorneys' fees ("Losses"),
suffered or incurred by any such party by reason of or arising out of any of the
following:
(i) the breach by such Owner of any representation or
warranty contained in Article I hereof or in any document or instrument
delivered by such Owner in connection with the Transaction Documents; and
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<PAGE>
(ii) the non-fulfillment of any covenant or agreement of
such Owner contained in Article IV hereof or in the Transfer Agreement.
(b) Subject to the provisions of this Article VIII, the Owners
and, if the Transactions involve an Asset Transfer, the Company, shall jointly
and severally indemnify and hold harmless Premiere, and its officers, directors,
agents or Affiliates, from and against any and all Losses suffered or incurred
by any such party by reason of or arising out of any of the following:
(i) the breach by the Company of any representation or
warranty contained in Article II hereof or in any Transaction Document or
any document or instrument delivered by the Company in connection
therewith;
(ii) the non-fulfillment of any covenant or agreement of
the Company or the Owners contained any Article IV hereof or in the
Transfer Agreement;
(iii) if the Transactions involve an Asset Transfer,
(A) any liability or obligation of the Company
not included in the Assumed Liabilities, and
(B) the operation and conduct of the business of
the Company prior to the Effective Time;
(iv) if the Transactions involve a Stock Transfer,
(A) any liability or obligation of the Company
expressly assumed and retained by any Owner, and
(B) any claim or demand by any person asserting
any interest in any Company Equity Security or seeking
dissenter's or appraisal rights or any other claim in
respect of the Transactions, provided that indemnification
as to dissenter's or appraisal rights shall not apply in
respect of any claimant thereof as to which the Company
notified Premiere in writing prior to the Closing; and
(v) the items listed in Section 3.3 of the Transfer
Agreement.
(c) If the Transaction is to accounted for as a pooling of
interests, no claim for indemnification with respect to any alleged
misrepresentation or breach of warranty under Section 8.1(a)(i) or Section
8.1(b)(i) may be made after the later of (i) the ninetieth (90th) day after
receipt by Premiere of its audited financial statements covering a period of at
least thirty (30) days after the Effective Time or (ii) for matters that would
not be reasonably expected to be encountered in the audit process, one year
following the Effective Time; provided, however, that the right to
-------- -------
indemnification shall extend beyond such period with respect to any claim for
which written notice was given to the Owners during such period but shall expire
on the expiration of the applicable statutes of limitations unless an action has
been brought with respect thereto, and provided further, that the
----------------
representations and warranties set forth in Sections 1.1 through 1.4, Section
1.6, Sections 2.1 through 2.3, Section 2.5, Section 2.17 and Section 2.19 shall
survive until the expiration of the statutes of limitations applicable to any
claims or causes of actions with respect to matters covered thereby. Other than
as set forth above, (i) claims for indemnification with respect to any matter in
a Transaction to be accounted for as a pooling of interests, and (ii) without
regard to the limitations set forth above, all claims for indemnification with
respect to a
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<PAGE>
Transaction to be accounted for as a purchase or other than as a pooling of
interests, may be made at any time prior to the expiration of the applicable
statutes of limitations with respect to the matter.
8.2 Notice and Opportunity to Defend. The party indemnified under this
--------------------------------
Article VIII (the "Indemnified Party") shall notify in writing the indemnifying
party (the "Indemnifying Party") of any matter giving rise to an obligation to
indemnify and the Indemnifying Party shall defend such claim at its expense with
counsel reasonably acceptable to the Indemnified Party, provided that the
Indemnifying Party may not settle any such claim without the consent of the
Indemnified Party, which consent will not be unreasonably withheld or delayed.
The Indemnified Party agrees to cooperate with the Indemnifying Party and to
make reasonably available to the Indemnifying Party any necessary records or
documents in the possession of the Indemnified Party which are necessary to
defend such claim. If the Indemnifying Party does not defend or settle such
claim, the Indemnified Party may do so without the Indemnifying Party's
participation, in which case the Indemnifying Party shall pay the expenses of
such defense, and the Indemnified Party may settle or compromise such claim
without the Indemnifying Party's consent. The failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder except to the extent that the Indemnifying Party is
actually prejudiced by such failure to give notice.
8.3 Survival and Insurance. The representations and warranties of the
----------------------
parties contained in the Transaction Documents or in any document or instrument
delivered in connection therewith shall survive the Closing and shall not be
extinguished thereby notwithstanding any investigation or other examination by
any party. Any indemnified Loss that is not covered by insurance maintained by
the Indemnifying Party shall be reduced by the amount of any insurance proceeds
actually received from insurance maintained by the Indemnified Party.
8.4 Establishment of Escrow. At the Effective Time, the Owners shall
-----------------------
deliver to the Escrow Agent certificates, or cash, as the case may be,
representing the General Escrow Amount and, if applicable, the Specific Escrow
Amount in accordance with the Transfer Agreement. The General Escrow Amount and
the Specific Escrow Amount shall be held by the Escrow Agent pursuant to the
terms of the Escrow Agreements.
8.5 Arbitration. All disputes arising under this Article VIII (other than
-----------
claims in equity) shall be resolved by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.
Arbitration shall be by a single arbitrator experienced in the matters at issue
and selected by the Owners' Representative and Premiere in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitration shall be held in such place in Atlanta, Georgia as may be specified
by the arbitrator (or any place agreed to by the Owners' Representative,
Premiere and the arbitrator). The decision of the arbitrator shall be final and
binding as to any matters submitted under this Article VIII; provided, however,
if necessary, such decision and satisfaction procedure may be enforced by either
the Owners' Representative or Premiere in any court of record having
jurisdiction over the subject matter or over any of the parties to this
Agreement. All costs and expenses incurred in connection with any such
arbitration proceeding (including reasonable attorneys fees) shall be borne by
the party against which the decision is rendered, or, if no decision is
rendered, such costs and expenses shall be borne equally by the Indemnitors as
one party and the Indemnitees as the other party. If the arbitrator's decision
is a compromise, the determination of which party or parties bears the costs and
expenses incurred in connection with any such arbitration proceeding shall be
made by the arbitrator on the basis of the arbitrator's assessment of the
relative merits of the parties' positions.
8.6 Other Rights and Remedies Not Affected. The rights of the
--------------------------------------
Indemnitees under this Article VIII are independent of and in addition to such
rights and remedies as the Indemnitees may have at law or inequity or otherwise
based upon any inaccuracy, untruth, incompleteness or breach of any
representation or warranty of any Indemnitor contained herein or in any
certificate, schedule or exhibit furnished by such
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party in connection herewith, or based upon the failure of an Indemnitor to
perform any covenant, agreement or undertaking required by the terms hereof to
be performed by such Indemnitor, including without limitation the right to seek
specific performance, recession or restitution, none of which rights or remedies
shall be affected or diminished hereby.
IX. CERTAIN DEFINITIONS
------------------------
In addition to the terms defined elsewhere herein, following terms used herein
shall have the meanings set forth below:
"1933 Act" - the Securities Act of 1933, as amended.
--------
"1934 Act" - the Securities Exchange Act of 1934, as amended.
--------
"Agreement" - The Transfer Agreement to which these Uniform Terms and
---------
Conditions are appended and these Uniform Terms and Conditions, including the
Appendices, Exhibits and Schedules delivered pursuant thereto and hereto.
"Affiliate" - of a Person shall mean: (i) any other Person directly, or
---------
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person; (ii) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or greater equity or
voting interest of such Person; or (iii) any other Person for which a Person
described in clause (ii) acts in any such capacity.
"Anticipated Closing Date" - shall be the date set forth in the Transfer
------------------------
Agreement.
"ASRs 130 and 135" shall mean SEC Accounting Series Release Nos. 130 and 135.
----------------
"Asset Transfer" - The purchase pursuant to the Transactions by Premiere, or
--------------
either of its Affiliates, of substantially all of the Assets of the Company as
specified in the Transfer Agreement.
"Assets" - of a Person shall mean all of the assets, properties, businesses
------
and rights of such Person of every kind, nature, character and description,
whether real, personal or mixed, tangible or intangible, accrued or contingent,
or otherwise relating to or utilized in such Person's business, directly or
indirectly, in whole or in part, whether or not carried on the books and records
of such Person, and whether or not owned in the name of such Person or any
Affiliate of such Person and wherever located.
"Assumed Liabilities" - If the Transactions involve an Asset Transfer, those
-------------------
liabilities, obligations and agreements of the Company identified as the
"Assumed Liabilities" in the Transfer Agreement.
"Closing" - The closing of the Transactions.
-------
"Closing Date" - The date upon which the closing of the Transactions shall
------------
occur.
"Closing Date Balance Sheet" - The unaudited balance sheet of the Company as
--------------------------
of the close of business on the Closing Date prepared by the Company.
"Code" - The Internal Revenue Code of 1986, as amended.
----
"Company" - The entity identified as such in the Transfer Agreement.
-------
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"Company Equity Securities" - Equity securities of the Company of any type,
-------------------------
including but not limited to common stock, preferred stock, limited partnership
interests, general partnership interests, limited liability company interests,
options to purchase any of the foregoing and securities convertible into any of
the foregoing.
"Company Intellectual Property Rights" - any Intellectual Property Right used
------------------------------------
by or reasonably useful to the Company in the course of its business.
"Company Products and Services" - the interactive voice messaging services and
-----------------------------
related equipment provided by the Company to customers in the course of its
business operations.
"Contract" - any written or oral agreement, arrangement, authorization,
--------
commitment, contract, indenture, instrument, lease, obligation, plan, practice,
restriction, understanding, or undertaking of any kind or character, or other
document to which any Person is a party or that is binding on any Person or its
capital stock, Assets or business.
"Default" - (i) any breach or violation of, default under, contravention of,
-------
or conflict with, any Contract, Law, Order, or Permit, (ii) any occurrence of
any event that with the passage of time or the giving of notice or both would
constitute a breach or violation of, default under, contravention of, or
conflict with, any Contract, Law, Order, or Permit, or (iii) any occurrence of
any event that with or without the passage of time or the giving of notice would
give rise to a right of any Person to exercise any remedy or obtain any relief
under, terminate or revoke, suspend, cancel, or modify or change the current
terms of, or renegotiate, or to accelerate the maturity or performance of, or to
increase or impose any Liability under, any Contract, Law, Order, or Permit.
"Effective Time" - The time on the Closing Date when all deliveries to be made
--------------
on the Closing Date have been made and all actions to be taken have been taken,
and the parties are agreed that the Closing has occurred.
"ERISA Affiliate" - of any entity means any other entity which, together with
---------------
such entity, would be treated as a single employer (i) under Section 414(b) or
(c) of the Code or (ii) for purposes of any Benefit Plan subject to Title IV of
ERISA, under Section 414(b), (c), (m) or (o) of the Code.
"Escrow Agent" - The entity identified as such in the Escrow Agreement.
------------
"Escrow Agreement" - The Escrow Agreement or Agreements substantially in the
----------------
form or forms attached as exhibits to the Transfer Agreement.
"Exchange Act" - The Securities Exchange Act of 1934, as amended.
------------
"Franchise" - the rights granted by VTE relating to the ownership and/or
---------
operation of one or more VTE Centers in one or more Sales Territories within a
Protected Territory pursuant to a Franchise Agreement.
"Franchise Agreement" - a franchise or license agreement and all amendments,
-------------------
supplements and modifications thereto entered into by VTE with the Company
relating to a Franchise.
"GAAP" - Generally accepted accounting principles, consistently applied.
----
"Intellectual Property Rights" - (a) any patent, patent application, trademark
----------------------------
(whether registered or unregistered), trademark application, trade name,
fictitious business name, service mark (whether registered or unregistered),
service mark application, copyright (whether registered or unregistered),
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copyright application, maskwork, maskwork application, trade secret, know-how,
customer list, system, computer software or computer program (including any
source or object codes therefor or documentation relating thereto), invention,
design, blueprint, engineering drawing, proprietary product, technology,
proprietary right or other intellectual property right or intangible Asset; and
(b) any right to use or exploit any of the foregoing.
"IRS" - The Internal Revenue Service.
---
"Knowledge" - as used with respect to the Company shall have the meaning set
---------
forth in the Transfer Agreement.
"Latest Balance Sheet" - the latest balance sheet included in the Financial
--------------------
Statements.
"Law" - any code, law (including common law), ordinance, regulation, reporting
---
or licensing requirement, rule, or statute applicable to a Person or its Assets,
Liabilities, or business, including those promulgated, interpreted or enforced
by any Regulatory Authority.
"Liability" - any direct or indirect, primary or secondary, liability,
---------
indebtedness, obligation, penalty, cost or expense (including costs of
investigation, collection and defense), claim, deficiency, guaranty or
endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.
"NAP" - the National Accounts Program of VTE.
---
"NAP Agreement" - an agreement executed by the Company and VTE in which the
-------------
Company agreed to be bound by the bylaws of the NAP Board of Directors.
"Order" - any administrative decision or award, decree, injunction, judgment,
----
order, quasi-judicial decision or award, ruling, or writ of any federal, state,
local or foreign or other court, arbitrator, mediator, tribunal, administrative
agency, or Regulatory Authority.
"Outside Closing Date" - shall be the date set forth in the Transfer
--------------------
Agreement.
"Owner" - The individuals or entities identified as such under the Transfer
-----
Agreement.
"Permit" - any federal, state, local, and foreign governmental approval,
-----
authorization, certificate, easement, filing, franchise, license, notice,
permit, or right to which any Person is a party or that is or may be binding
upon or inure to the benefit of any Person or its securities, Assets, or
business.
"Person" - a natural person or any legal, commercial or governmental entity,
------
such as, but not limited to, a corporation, general partnership, joint venture,
limited partnership, limited liability company, trust, business association,
group acting in concert, or any person acting in a representative capacity.
"Premiere" - Premiere Technologies, Inc., a Georgia corporation.
--------
"Premiere Financial Statements" - (i) the consolidated balance sheets
-----------------------------
(including related notes and schedules, if any) of Premiere as of December 31,
1996 and 1995, and the related statements of operations, changes in
stockholders' equity, and cash flows (including related notes and schedules, if
any) for each of the three fiscal years ended December 31, 1996, 1995 and 1994,
as filed by Premiere in SEC Documents, and (ii) the consolidated balance sheets
of Premiere (including related notes and schedules, if any) and related
statements of operations, changes in stockholders' equity, and cash flows
(including
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related notes and schedules, if any) included in SEC Documents filed with
respect to periods ended subsequent to December 31, 1996.
"Premiere Stock" - Common stock, $.01 par value per share, of Premiere.
--------------
"Protected Territory" - the territory in which the Company solicits and
-------------------
provides services and products to customers for digital voice messaging services
as such territory is defined in the Franchise Agreement.
"Regulatory Authority" - collectively, the SEC, the NASD, the Federal Trade
--------------------
Commission, the United States Department of Justice, and all other federal,
state, county, local or other governmental or regulatory agencies, authorities
(including self-regulatory authorities), instrumentalities, commissions, boards
or bodies having jurisdiction over the parties hereto and their respective
Subsidiaries.
"Related Person" - with regard to any Owner or any director, officer or
--------------
employee of the Company, his or her spouse, parent, sibling, child, aunt, uncle,
niece, nephew, in-law, grandparent and grandchild (including by adoption or
remarriage) and any trustees or other fiduciaries for the benefit of such
relatives.
"Sales Territory" - the geographic areas into which a Protected Territory is
---------------
divided under the Franchise Agreement.
"Schedules" - The disclosure schedules referred to in this Agreement.
---------
"SEC Documents" - all forms, proxy statements, registration statements,
-------------
reports, schedules, and other documents filed, or required to be filed, by
Premiere pursuant to the Securities Laws.
"Securities Laws" - the 1933 Act, the 1934 Act, the Investment Company Act of
---------------
1940, as amended, the Investment Advisors Act of 1940, as amended, the Trust
Indenture Act of 1939, as amended, and the rules and regulations of any
regulatory authority promulgated thereunder.
"SRA" - a service representative agreement executed by VTE and a service
---
representative relating to the provision of services on behalf of VTE with
respect to the Franchise.
"Stock Transfer" - The purchase by Premiere, or any of its Affiliates,
--------------
pursuant to the Transactions, of Company Equity Securities, including by means
of any merger, consolidation, share exchange or other transaction by which the
Company becomes wholly-owned by Premiere or any of its Affiliates.
"Subsidiaries" - all those corporations, associations, or other business
------------
entities of which the entity in question either (i) owns or controls 50% or more
of the outstanding equity securities either directly or through an unbroken
chain of entities as to each of which 50% or more of the outstanding equity
securities is owned directly or indirectly by its parent (provided, there shall
not be included any such entity the equity securities of which are owned or
controlled in a fiduciary capacity), (ii) in the case of partnerships, serves as
a general partner, (iii) in the case of a limited liability company, serves as a
managing member, or (iv) otherwise has the ability to elect a majority of the
directors, trustees or managing members thereof.
"Transactions" - The transactions contemplated by the Transfer Agreement and
------------
the other Transaction Documents.
"Transaction Documents" - The Transfer Agreement, including these Uniform
---------------------
Terms and Conditions, and all other agreements, instruments and documents to be
executed and delivered in connection with the Transfer Agreement and the
transactions contemplated thereby.
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<PAGE>
"Transfer Agreement" - That certain Transfer Agreement among Premiere, the
------------------
Company and the Owners and to which these terms and conditions are applicable.
"Transferred Assets" - If the Transactions involve an Asset Transfer, those
------------------
Assets of the Company identified as the "Transferred Assets" in the Transfer
Agreement.
"VTE" - Voice-Tel Enterprises, Inc., a Delaware corporation.
---
"VTE Center" - a site owned or operated by the Company which houses one or
----------
more Centigram voice mail servers used to store messages for retrieval by users
within the local service area of VTE Center, and, where applicable, one or more
network interface boxes and routers used to transmit voice message packet data
to a hub via the T1 local loop.
"VTN" - VTN, Inc., an Ohio corporation and the sole general partner of VTNLP.
---
"VTNLP" - Voice-Tel Network Limited Partnership, a Delaware limited
-----
partnership.
X. MISCELLANEOUS PROVISIONS
------------------------
10.1 Notices.
-------
(a) Any notice sent in accordance with the provisions of this
Section 10.1 shall be deemed to have been received (even if delivery is refused
or unclaimed) on the date which is : (i) the date of proper posting, if sent by
certified U.S. mail or by Express U.S. mail or private overnight courier; or
(ii) the date on which sent, if sent by facsimile transmission, with
confirmation and with the original to be sent by certified U.S. mail, addressed
as follows:
If to the Company or the Owners: To the addresses set forth in the Transfer
Agreement.
:If to Premiere:
Premiere Technologies, Inc.
The Lenox Building, Suite 400
3399 Peachtree Road, NE
Atlanta, Georgia 30326
Attn: Boland T. Jones, President
Telephone: (404)262-8400
Facsimile: (404)262-8540
with a copy to: Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attn: Jeffrey A. Allred, Esq.
Telephone: (404) 881-7000
Facsimile: (404) 881-7777
(b) Any party hereto may change its address specified for notices
herein by designating a new address by notice in accordance with this Section
10.1.
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10.2 Owner's Representatives.
-----------------------
(a) The Owners have and do hereby irrevocably make, constitute
and appoint the individual designated as the "Owner's Representative" in the
Transfer Agreement as their agent (the "Owner's Representative") and authorize
and empower him or her to fulfill the role of Owner's Representative hereunder.
In the event of the resignation of the Owner's Representative, the resigning
Owner's Representative shall appoint a successor from among the Owners and who
shall agree in writing to accept such appointment. If the Owner's Representative
should die or become incapacitated, his or her successor shall be appointed
within 15 days of his death or incapacity by a majority of the Owners, and such
successor shall be an Owner. The choice of a successor Owner's Representative
appointed in any manner permitted above shall be final and binding upon all of
the Owners. The decisions and actions of any successor Owner's Representative
shall be, for all purposes, those of a Owner's Representative as if originally
named in the Transfer Agreement.
(b) Each Owner has made, constituted and appointed and by the
execution of this Agreement hereby irrevocably makes, constitutes and appoints
the Owner's Representative as such person's true and lawful attorney in fact and
agent, for such person and in such person's name, place and stead for all
purposes necessary or desirable in order for the Owner's Representative to take
the actions contemplated by the Transaction Documents on behalf of the Owners,
with the ability to execute and deliver all instruments, certificates and other
documents of every kind incident to the foregoing to all intents and purposes
and with the same effect as such Owner could do personally, and each such Owner
hereby ratifies and confirms as his, her, or its own act, all that the Owner's
Representative shall do or cause to be done pursuant to the provisions hereof.
All Claim Notices and all other notices and communications directed to Owners
under this Agreement shall be given to the Owner's Representative.
(c) The death or incapacity of any Owner shall not terminate the
authority and agency of the Owner's Representative.
(d) The Owners hereby agree to indemnify the Owner's
Representative and to hold him or her harmless against any and all loss,
liability or expense incurred without bad faith on the part of the Owner's
Representative and arising out of or in connection with his or her duties as
Owner's Representative, including the reasonable costs and expenses incurred by
the Owner's Representative in defending against any claim or liability in
connection herewith.
10.3 Expenses (a) Except as otherwise provided in this Section 10.3 or
in the Transfer Agreement, each of the parties hereto shall bear and pay all
direct costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including filing, registration and
application fees, printing fees, and fees and expenses of its own financial or
other consultants, investment bankers, accountants and counsel.
(b) Nothing contained in this Section 10.3 shall constitute or
shall be deemed to constitute liquidated damages for the willful breach by a
party hereto of the terms of this Agreement or otherwise limit the rights of a
nonbreaching party.
10.4 Further Assurances. Each party covenants that at any time, and from
------------------
time to time, after the Closing, it will execute such additional instruments and
take such actions as may be reasonably requested by the other parties to confirm
or perfect or otherwise to carry out the intent and purposes of this Agreement.
10.5 Waiver. Any failure on the part of any party to comply with any of
------
its obligations, agreements or conditions hereunder may be waived by any other
party to whom such compliance is owed.
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<PAGE>
No waiver of any provision of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall
any waiver constitute a continuing waiver.
10.6 Assignment. Premiere may assign its rights under this Agreement to
----------
any Affiliated entity, but otherwise this Agreement shall not be assignable by
any of the parties hereto without the written consent of all other parties. Any
such assignment shall not relieve Premiere of its obligations hereunder.
10.7 Binding Effect. This Agreement shall be binding upon and inure to
--------------
the benefit of the parties hereto and their respective heirs, legal
representatives, executors, administrators, successors and assigns. This
Agreement shall survive the Closing and not be merged therein.
10.8 Entire Agreement. This Agreement and the Appendices, Exhibits,
----------------
Schedules, certificates and other documents delivered pursuant hereto or
incorporated herein by reference, contain and constitute the entire agreement
among the parties and supersede and cancel any prior agreements,
representations, warranties, or communications, whether oral or written, among
the parties relating to the transactions contemplated by this Agreement. Neither
this Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, but only by an agreement in writing signed by the party
against whom or which the enforcement of such change, waiver, discharge or
termination is sought.
10.9. Governing Law; Severability. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Georgia without regard to
conflicts of laws principles. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
10.10 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.
10.11 Brokers. The Owners, the Company and Premiere
-------
each represent to the others that no broker or finder has been employed in
connection with the transactions hereunder.
10.12 Schedules and Exhibits. All Schedules and Exhibits attached to this
----------------------
Agreement are by reference made a part hereof.
10.13 Headings. The headings contained in this Agreement are for reference
--------
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
10.14 Amendment. To the extent permitted by law, this Agreement may be
---------
amended by a subsequent writing signed by each of the parties hereto upon the
approval of each of such parties, whether before or after stockholder approval
of this Agreement has been obtained; provided, that after any such approval by
the holders of Company Common Stock, there shall be made no amendment that
reduces or modified in any material respect the consideration to be received by
holders of Company Common Stock.
10.15 Enforcement. The parties hereto agree that irreparable damage would
-----------
occur in the event that any of the provisions of this Agreement was not
performed in accordance with its specific terms or was otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
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<PAGE>
10.16 No Benefit to Third Parties. This Agreement is not intended to
---------------------------
benefit, and shall not be construed to benefit, any person other than the
parties hereto or create any third-party beneficiary right for any other person.
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EXHIBIT B
[GENERAL]
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of
_________ __, 1997, by and among Premiere Technologies, Inc., a Georgia
corporation ("Premiere"); ______________________________ (the "Owners'
Representative"), on behalf of certain owners (the "Owners") of the equity
interests in [Franchisee], a _____________ (the "Company"); and [SunTrust Bank
of Atlanta], a Georgia bank, as escrow agent hereunder (the "Escrow Agent").
W I T N E S S E T H
- - - - - - - - - -
Premiere, the Company and the Owners are parties to a Transfer Agreement
dated as of __________, 1997 (the "Merger Agreement"), pursuant to which
Premiere has acquired the Company pursuant to a merger of the Company with and
into a wholly owned subsidiary of Premiere ("Merger Corp"), with Merger Corp as
the surviving corporation in such merger (the "Merger"). Pursuant to Section
2.2 of the Merger Agreement, the Owners each received, in exchange for each
share of the Company's capital stock, the contingent right to receive [_______
shares of the $0.01 par value common stock of Premiere (the "Premiere Common
Stock")] [$______ in cash].
Pursuant to the terms of the Merger Agreement, a portion of the aggregate
consideration which each Owner is entitled to receive pursuant to the Merger,
which amount shall be held by the Escrow Agent pursuant to the terms of this
Agreement to satisfy certain indemnification claims by Premiere against the
Owners in accordance with the terms of the Merger Agreement until termination of
this Agreement as provided herein.
Pursuant to the Merger Agreement, the Owners have appointed the Owners'
Representative as their respective agent and attorney-in-fact to execute and
deliver this Escrow Agreement on their behalf and to act for them hereunder.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE 1
ESTABLISHMENT OF ESCROW
1.1 ESCROW. On this date, Premiere has delivered to the Escrow Agent [a
------
stock certificate in negotiable form representing the shares of Premiere Common
Stock constituting the General Escrow Amount (the "Escrow Shares")] [an amount
in cash equal to the General Escrow Amount (the "Escrow Fund")]. The Escrow
Agent acknowledges receipt of the [Escrow Shares] [Escrow Fund] and agrees to
hold and disburse the [Escrow Shares] [Escrow Fund] for the benefit of Premiere
and the Owners, as the case may be, in accordance with the provisions of this
Agreement.
1.2 OWNER PERCENTAGE INTERESTS. Attached as Schedule I hereto is a
--------------------------
schedule showing for each Owner (i) the respective percentage interest (the
"Percentage Interest") of each such Owner in the [Escrow Shares] [Escrow Fund],
and (ii) the corresponding aggregate maximum [number of Escrow Shares issuable]
[amount payable from the Escrow Fund] to each Owner, subject to the adjustments
provided herein.
<PAGE>
ARTICLE 2
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
2.1 ["AGGREGATE VALUE" at any time shall mean [the product of the Value
Per Share and the number of Escrow Shares then held in escrow pursuant to this
Agreement] [the aggregate value of the Escrow Fund].
2.2 "DISTRIBUTION DATE" shall mean the date that is the earlier of (i) one
year from the date of the Effective Time and (ii) the date of issuance of the
first independent accountants report on the consolidated financial statements of
Premiere which reflect at least 30 days of post-Merger combined results of
Premiere and the Company subsequent to the Effective Time.
2.3 "OWNERS' REPRESENTATIVE" shall mean ________.
2.4 ["VALUE PER SHARE" shall mean $__.__.]
2.5 Any other capitalized term used herein but not defined herein shall
have the same meaning as provided in the Merger Agreement.
ARTICLE 3
TERM; DISTRIBUTION OF ESCROW [SHARES] [FUND]; LIMITS
3.1 TERM. The term of this Agreement shall commence at the Effective
----
Time and shall terminate at such time as all of the [Escrow Shares have] [Escrow
Fund has] been distributed to the Owners or [canceled] [to Premiere] pursuant to
the terms of this Agreement.
3.2 ADJUSTMENT OF [ESCROW SHARES] [ESCROW FUND]. The [Escrow Shares]
-------------------------------------------
[Escrow Fund] subject to this Agreement shall be adjusted from time to time, as
follows:
Stock version
If, between the date of this Agreement and the Distribution Date, Premiere
shall be entitled to be indemnified pursuant to an indemnification claim under
Sections 8.1(a), 8.1(b)(i), 8.1(b)(ii), 8.1(b)(iii) or 8.1(b)(iv) of the Uniform
Terms (an "Indemnification Claim"), then Premiere shall, at its option, deliver
to the Owners' Representative a notice thereof (a "Notice of Indemnification
Obligation"), and Premiere and the Owners' Representative shall agree in writing
on the dollar amount owed by the Owners pursuant to such Indemnification Claim
(the "Indemnification Amount"). Upon execution by the parties of the agreement
setting forth the Indemnification Amount, Premiere shall (A) issue (or cause to
be issued) a new stock certificate (the "Replacement Certificate") in the names
of the Owner's Representative as representative of the pro rata interests of the
Owners, representing, for the respective pro rata interest of the Owners, the
number of shares of Premiere Common Stock equal to the product of (i) the
difference between (x) the number of Escrow Shares in escrow immediately prior
to such Notice of General Indemnification Obligation minus (y) the quotient
(rounded to the next highest whole number) obtained by dividing the
Indemnification Amount by the Value Per Share, and (ii) each such Owner's
Percentage Interest, (B) cancel the Premiere Common Stock certificate
representing the Escrow Shares in escrow immediately prior to delivery of the
Notice of Indemnification Obligation (such certificates, the "Old Certificate"),
and (C) the Escrow Agent shall hold the Replacement Certificate in escrow
pursuant to this
-2-
<PAGE>
Agreement. Upon the issuance of any Replacement Certificate, the shares
represented by such Replacement Certificates shall be deemed to be the "Escrow
Shares" for all purposes of this Agreement.]
Cash version
If, between the date of this Agreement and the Distribution Date, Premiere
shall be entitled to be indemnified pursuant to an indemnification claim under
Sections 8.1(a), 8.1(b)(i), 8.1(b)(ii), 8.1(b)(iii) or 8.1(b)(iv) of the Uniform
Terms (an "Indemnification Claim"), then Premiere shall, at its option, deliver
to the Owners' Representative a notice thereof (a "Notice of Indemnification
Obligation"), and Premiere and the Owners' Representative shall agree in writing
on the dollar amount owed by the Owners pursuant to such Indemnification Claim
(the "Indemnification Amount"). Upon execution by the parties of the agreement
setting forth the Indemnification Amount, the Escrow Agent shall pay to Premiere
from the Escrow Fund an amount equal to the Indemnification Amount and hold the
remainder of the Escrow Fund, if any, in escrow pursuant to this Agreement.
Immediately following any payment to Premiere in accordance with the previous
sentence, the amount remaining in escrow, if any, shall be deemed to be the
"Escrow Fund" for all purposes of this Agreement.]
3.3 DISTRIBUTION OF [ESCROW SHARES] [ESCROW FUND].
---------------------------------------------
Stock version
On the Distribution Date, the Escrow Agent shall cancel certificates
representing the Escrow Shares then held in escrow as of the Distribution Date
("Available Escrow Shares") and with respect to which an Indemnification Claim
is not pending. With respect to Indemnification Claims pending as of the
Distribution Date, Premiere and the Owners' Representative shall use their
reasonable efforts to agree in writing on the Indemnification Amount with
respect to any such pending Indemnification Claims; provided, that if Premiere
and the Owners' Representative are not able to agree on the Indemnification
Amount with respect to such Indemnification Claims by the Distribution Date, the
amount of the Indemnification Amount for purposes of the calculations in the
following sentence of this Section 3.3 shall be the amount claimed by Premiere
in its Notice of Indemnification Claim. Upon determination of the
Indemnification Amount in accordance with the preceding sentence, Premiere shall
promptly (i) issue and deliver to the Escrow Agent and the Escrow Agent shall
deliver to the Owners new certificates representing the number of shares of
Premiere Common Stock (the "Distribution Shares") equal to the quotient obtained
by dividing (A) the difference between the Aggregate Value immediately prior to
such Distribution Date and the aggregate Indemnification Amount with respect to
such pending Indemnification Claims by (B) the Value Per Share (the "Undisputed
--
Escrow Shares"), and such certificates shall be denominated in the names of the
respective Owners in amounts equal to the product of the Undisputed Escrow
Shares and each Owner's Percentage Interest, and (ii) issue to the Escrow Agent,
who shall retain in escrow pending final determination of the Indemnification
Amount, new certificates representing the number of shares of Premiere Common
Stock equal to the quotient obtained by dividing (C) the aggregate
Indemnification Amount with respect to such pending Indemnification Claims by
--
(D) the Value Per Share ("Disputed Escrow Shares"). Any such delivery of
Premiere Common Stock to Owners shall be of full shares and any fractional
portions shall be rounded to a whole number by the Escrow Agent so that the
number of shares remaining in escrow to be delivered will be fully allocated
among such Owners. Upon the final resolution as agreed by Premiere and the
Owners' Representative in writing of any Indemnification Claim for which
Disputed Escrow Shares were retained in escrow after the Distribution Date, the
Escrow Agent shall promptly cancel the appropriate number of Disputed Escrow
Shares corresponding to the Indemnification Amount corresponding to such
Indemnification Claim (if any) and shall deliver any remaining Disputed Escrow
Shares to the Owners in accordance with their respective Percentage Interests in
such remaining Disputed Escrow Shares.]
-3-
<PAGE>
Cash version
With respect to Indemnification Claims pending as of the Distribution Date,
Premiere and the Owners' Representative shall use their reasonable efforts to
agree in writing on the Indemnification Amount with respect to any such pending
Indemnification Claims; provided, that if Premiere and the Owners'
Representative are not able to agree on the Indemnification Amount with respect
to such Indemnification Claims by the Distribution Date, the amount of the
Indemnification Amount for purposes of the calculations in the following
sentence of this Section 3.3 shall be the amount claimed by Premiere in its
Notice of Indemnification Claim. Upon determination of the aggregate
Indemnification Amount with respect to such pending Indemnification Claims in
accordance with the preceding sentence, the Escrow Agent shall (i) promptly
distribute to the Owners in accordance with their respective Percentage
Interests the difference between (A) the amount of the Escrow Fund then held in
escrow and (B) the aggregate Indemnification Amount determined in accordance
with the preceding sentence, and (ii) retain in escrow any remainder of the
Escrow Fund (the "Disputed Portion") pending final resolution of such pending
Indemnification Claims. Upon the final resolution as agreed by Premiere and the
Owners' Representative in writing of any Indemnification Claim for which the
Disputed Portion was retained in escrow after the Distribution Date, the Escrow
Agent shall promptly distribute to the Owners in accordance with their
respective Percentage Interests or to Premiere an amount equal to the
Indemnification Amount corresponding to such Indemnification Claim (if any.]
3.4 EFFECT OF FINAL [DELIVERY] [DISTRIBUTION]. This Agreement shall
-----------------------------------------
continue in full force and effect until the Escrow Agent has [delivered or
canceled all of the Escrow Shares] [distributed all of the Escrow Fund] pursuant
to the terms hereof. After all of such [shares have been so delivered or
canceled] [fund has been so distributed], all rights, duties and obligations of
the respective parties hereunder shall terminate.
ARTICLE 4
[ESCROW STOCK CERTIFICATES; DIVIDENDS; VOTING RIGHTS
4.1 ESCROW STOCK CERTIFICATES. The Escrow Agent may, with the prior
-------------------------
written consent of the Owners' Representative, at any time issue new
certificates (or request Premiere to issue new certificates) representing the
Escrow Shares in such denominations as may be necessary or appropriate in
carrying out the Escrow Agent's obligations under this Agreement.
4.2 CASH DIVIDENDS; VOTING RIGHTS. The Owners shall be entitled to
-----------------------------
receive currently any and all cash dividends or other cash income with respect
to the Escrow Shares. Each Owner shall have the right to direct the Escrow
Agent in writing as to the exercise of voting rights with respect to such Escrow
Shares held by the Escrow Agent on behalf of such Owner, and the Escrow Agent
shall comply with any such directions if received in a timely manner. In the
absence of such directions, the Escrow Agent shall not vote any such Escrow
Shares.
4.3 STOCK SPLITS; STOCK DIVIDENDS. In the event of any stock split or
-----------------------------
stock dividend with respect to Premiere Common Stock that becomes effective
during the term of this Agreement, the additional shares so issued with respect
to the Escrow Shares shall be added to the Escrow Shares and subject to the
escrow covered by this Agreement and any other references herein to a specific
number of shares of Premiere Common Stock or references herein to prices for or
the fair market value of Premiere Common Stock shall be adjusted accordingly.]
-4-
<PAGE>
[INVESTMENT OF ESCROW FUND
The Escrow Fund shall be invested [in accordance with the written
instructions of the Owners' Representative] [in a money market fund invested in
direct obligations of the United States of America or obligations the principal
of and interest on which are unconditionally guaranteed by the United States of
America]. Any investment income earned on the Escrow Fund shall be added to and
shall become part of the Escrow Fund.]
ARTICLE 5
THE ESCROW AGENT
5.1 APPOINTMENT. Premiere and the Owners hereby designate and appoint
-----------
the Escrow Agent as "Escrow Agent" under this Agreement and the Escrow Agent
hereby accepts such designation and appointment, subject to all of the
provisions of this Agreement.
5.2 LIABILITY. The Escrow Agent, in its capacity as such, or any
---------
successor Escrow Agent, shall be liable only to hold the Escrow Shares and to
deliver the same to the persons named herein in accordance with the provisions
of this Agreement. By acceptance of this Escrow Agreement, the Escrow Agent, in
its capacity as such, or any successor Escrow Agent, is acting in the capacity
of a depository only, and shall not be liable or responsible for any damages,
losses or expenses unless such damages, losses or expenses shall be caused by
the gross negligence or malfeasance of the Escrow Agent or any successor Escrow
Agent. Neither the Escrow Agent, in its capacity as such, nor any successor
Escrow Agent, shall incur any liability with respect to (i) any action taken or
omitted in good faith upon the advice of its counsel with respect to any
questions relating to the duties and responsibilities of the Escrow Agent under
this Agreement; or (ii) any action taken or omitted in reliance upon any
instrument, including the written instructions provided for herein, not only as
to the due execution of such instrument, or the identity, or authority of any
person executing such instrument, or the validity and effectiveness of such
instrument, but also as to the truth and accuracy of any information contained
therein, provided that the Escrow Agent shall in good faith believe such
instrument to be genuine, to have been signed by a proper person or persons, and
to conform to the provisions of this Agreement. In the event of any
disagreement or the presentation of adverse claims or demands in connection with
or for any item affected hereby, the Escrow Agent shall, at its option, be
entitled to refuse to comply with any such claims or demands during the
continuance of such disagreement and may refrain from delivering any item
affected hereby, and in so doing the Escrow Agent shall not become liable to the
parties, or to any other person, due to its failure to comply with any such
adverse claim or demand. The Escrow Agent shall be entitled to continue,
without liability, to refrain and refuse to act until all of the rights of the
adverse claimants have been either fully resolved among themselves, arbitrated
to a final award, or finally adjudicated by a court having jurisdiction over the
dispute. The Escrow Agent shall be held harmless and indemnified by the parties
hereto in connection with any claims against it in connection with its service
as escrow agent hereunder. Any action requested to be taken by the Escrow Agent
hereunder and not otherwise specifically set forth herein shall require the
agreement in writing of the Owners' Representative, Premiere and any successor
Escrow Agent.
5.3 SUCCESSOR. The Escrow Agent, with the prior written consent of the
---------
Owners' Representative, may by written instrument designate a bank or trust
company to act as successor Escrow Agent. Any such successor Escrow Agent must
agree to be and shall be bound by, and shall have all the rights, duties and
responsibilities of the Escrow Agent under, this Agreement.
5.4 EXPENSES. Compensation for the normal services of the Escrow Agent
--------
or any successor Escrow Agent, if any, shall be borne by the Owners and Premiere
equally. Any successor Escrow Agent shall be reimbursed for any reasonable
expenses, including the actual out-of-pocket cost of outside legal
-5-
<PAGE>
services should such Escrow Agent deem it necessary in its reasonable discretion
to retain an outside attorney, and Premiere and the Owners shall share equally
the reimbursement of such expenses of such Escrow Agent, except that (a) if
Premiere is unsuccessful in any litigation relating to such Escrow Agent, then
the fees and expenses of such Escrow Agent in connection therewith shall be paid
by Premiere, or (b) should the Owners be the unsuccessful party in any such
litigation, then the Owners will bear the fees and expenses of such Escrow Agent
in connection therewith. The Escrow Agent and any successor Escrow Agent shall
not be liable for any action taken in good faith in accordance with the advice
of an attorney.
ARTICLE 6
OWNERS' REPRESENTATIVE
6.1 POWER AND AUTHORITY. The Owners' Representative shall have full power
-------------------
and authority to represent the Owners and their successors with respect to all
matters arising under this Agreement, and all action taken by the Owners'
Representative hereunder shall be binding upon such Owners and their successors
as if expressly ratified and confirmed in writing by each of them. Without
limiting the generality of the foregoing, the Owners' Representative shall have
full power and authority, on behalf of all the Owners and their successors, to
interpret all the terms and provisions of this Agreement, to dispute or fail to
dispute any claim of Indemnifiable Loss against the Escrow Shares made by an
Indemnitee, to negotiate and compromise any dispute which may arise under this
Agreement, to sign any releases or other documents with respect to any such
dispute, and to authorize payments to be made with respect thereto.
6.2 RESIGNATION; SUCCESSORS. The Owners' Representative, or any successor
-----------------------
hereafter appointed, may resign and shall be discharged of his duties hereunder
upon the appointment of a successor Owners' Representative as hereinafter
provided. In case of such resignation, or in the event of the death or
inability to act of the Owners' Representative, a successor shall be named from
among the Owners by a majority of the members of the Board of Directors of the
Company who served on such board prior to the Merger. Each such successor
Owners' Representative shall have all the power, authority, rights and
privileges hereby conferred upon the original Owners' Representative, and the
term "Owners' Representative" as used herein shall be deemed to include such
successor Owners' Representative.
ARTICLE 7
MISCELLANEOUS
7.1 TRANSFERABILITY. A Owner may not transfer any interest in the
---------------
[Escrow Shares] [Escrow Fund] or any other right under this Escrow Agreement to
any other party, except that upon written notice from the legal representative
of the estate of a deceased Owner to the Escrow Agent, the rights of such Owner
under this Escrow Agreement shall be transferred to the estate of such Owner,
and subsequently to any beneficiary thereof, in the event of the Owners' death;
provided, however, that any such beneficiary or the legal representative of any
such estate shall be bound by the provisions of this Escrow Agreement without
taking any further action. The Escrow Agent shall be entitled to treat the legal
representative of the estate of such Owner, and subsequently any beneficiary
thereof, as the absolute owner of the rights of such Owner under this Escrow
Agreement in all respects and shall incur no liability for distributions made in
good faith to the legal representatives of such Owner or such beneficiary in
accordance with the terms of this Escrow Agreement. The contingent right to
receive the [Escrow Shares] [Escrow Fund] shall not be transferable by the
Owners otherwise than by will or by the laws of descent and distribution.
-6-
<PAGE>
7.2 NOTICES. Each party shall keep each of the other parties hereto
-------
advised in writing of all transactions pursuant to this Agreement. Any notices
or other communications required or permitted under this Agreement shall be in
writing and shall be sufficiently given if sent by registered or certified mail,
postage prepaid, addressed as follows, or if sent by facsimile to the facsimile
numbers identified below:
If to Premiere:
Premiere Technologies, Inc.
The Lenox Building, Suite 400
3399 Peachtree Road, N.E.
Atlanta, Georgia 30326
Attn: Bolant T. Jones, President
Telecopy: (404) 262-8450
with a copy to:
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309
Attn: Jeffrey A. Allred, Esq.
Telecopy: (404) 811-7777
If to the Owners or the Owners' Representative:
________________
________________
________________
Telecopy: (___) ___-____
with a copy to:
________________
________________
________________
________________
Attn: _________
Telecopy: (___) ___-____
If to the Escrow Agent:
[SunTrust Bank of Atlanta]
______________
________, ______ ____
Attn: ___________
Telecopy: (___) ___-____
or such other person or address as shall be furnished in writing by any of the
parties and any such notice or communication shall be deemed to have been given
as of the date so mailed.
-7-
<PAGE>
7.3 CONSTRUCTION. This Agreement shall be governed by and construed in
------------
accordance with the laws of the State of Georgia, without regard to any
applicable conflicts of laws.
7.4 BINDING EFFECT. This Agreement shall inure to the benefit of and be
--------------
binding upon the respective heirs, executors, administrators, successors and
assigns of the parties hereto.
7.5 SEPARABILITY. If any provision or section of this Agreement is
------------
determined to be void or otherwise unenforceable, it shall not affect the
validity or enforceability of any other provisions of this Agreement which shall
remain unenforceable in accordance with their terms.
7.6 HEADINGS. The headings and subheadings contained in this Agreement
--------
are for reference only and for the benefit of the parties and shall not be
considered in the interpretation or construction of this Agreement.
7.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
-------------------------
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
7.8 AMENDMENTS. This Agreement may be amended from time to time but
-----------
only by written agreement signed by all of the parties hereto.
7.9 THIRD PARTY BENEFICIARIES. Each Subsidiary of Premiere and each of
-------------------------
the directors, officers and employees of Premiere and each of its Subsidiaries
are expressly intended to be third party beneficiaries of the indemnities and
obligations of the Owners as if they were parties to this Agreement.
-8-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of
the day and year first above written.
PREMIERE TECHNOLOGIES, INC.
INC.
By:___________________________
__________________
OWNERS' REPRESENTATIVE:
______________________________
__________________(SEAL)
[SUNTRUST BANK OF ATLANTA]
By:____________________________
________________
-9-
<PAGE>
SCHEDULE I
TO ESCROW AGREEMENT
OWNERS
MAXIMUM [INTEREST IN ESCROW
FUND] OF ESCROW[NUMBER
NAME SHARES] PERCENTAGE OWNERSHIP
<PAGE>
EXHIBIT C
STOCK RESTRICTION AND REGISTRATION RIGHTS AGREEMENT
---------------------------------------------------
THIS STOCK RESTRICTION AND REGISTRATION RIGHTS AGREEMENT (this "Agreement")
is made and entered into as of ____________, 1997, by and among Premiere
Technologies, Inc., a Georgia corporation (the "Company"), those stockholders of
Voice-Tel Enterprises, Inc., a Delaware corporation ("VTE"), appearing as
signatories hereto, those shareholders of VTN, Inc., an Ohio corporation
("VTN"), appearing as signatories hereto (each of the stockholders of VTE and
shareholders of VTN, a "VTE/VTN Stockholder" and collectively, the "VTE/VTN
Stockholders"), and those stockholders or other equity owners of franchisees of
VTE ("Franchisees") that execute Adoption Agreements in the form attached hereto
as Exhibit A (each such stockholder or owner, a "Franchisee Stockholder" and
collectively, the "Franchisee Stockholders" and collectively with the VTE/VTN
Stockholders, the "Stockholders").
R E C I T A L S
---------------
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger, dated as
of March __, 1997 (as the same may be amended, the "VTE Acquisition Agreement"),
by and among the Company, PTEK Merger Corporation, a Delaware corporation
("Sub"), VTE, and the stockholders of VTE, Sub shall be merged with and into VTE
(the "VTE Acquisition"), with the result that each of the outstanding shares of
no par value common stock of VTE ("VTE Common Stock") will be converted into the
right to receive shares of the $0.01 par value common stock of the Company (the
"Company Common Stock");
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger, dated as
of March __, 1997 (as the same may be amended, the "VTN Acquisition Agreement"),
by and among the Company, PTEK Merger Corporation II, an Ohio corporation ("Sub
II"), VTN and the shareholders of VTN, Sub II will be merged with and into VTN
(the "VTN Acquisition"), with the result that each of the outstanding shares of
the no par value common stock of VTN ("VTN Common Stock") will be converted into
the right to receive shares of Company Common Stock (the VTE Acquisition and the
VTN Acquisition are collectively called the "Acquisition" and the VTE
Acquisition Agreement and the VTN Acquisition Agreement are collectively called
the "Acquisition Agreement");
WHEREAS, the Company has agreed, as a condition precedent to VTE's and
VTN's obligations under the Acquisition Agreement, to grant the VTE/VTN
Stockholders certain registration rights; and
WHEREAS, the Company has agreed to acquire certain Franchisees pursuant to
the terms a Transfer Agreement between each such Franchisee, the stockholders or
other equity owners of such Franchisee and the Company (collectively, the
"Franchisee Acquisition Agreements"); and
WHEREAS, the Company has agreed, as a condition precedent to the
consummation of the transactions contemplated in the Franchisee Acquisition
Agreements, to grant the Franchisee Stockholders certain registration rights;
and
WHEREAS, the Company and the Stockholders desire to define the
aforementioned registration rights on the terms and subject to the conditions
herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as follows:
<PAGE>
1. DEFINITIONS
-----------
As used in this Agreement, the following terms have the respective meanings
set forth below:
Affiliate: shall mean, for any Person, (i) any other Person controlling,
---------
controlled by or under common control with such Person and (ii) any partner of
any such Person which is a partnership.
Amway Entity: shall mean Amway Corporation and any Affiliate thereof.
------------
Commission: shall mean the Securities and Exchange Commission or any other
----------
federal agency at the time administering the Securities Act;
Effective Date: shall mean the date on which the Acquisition is
--------------
consummated;
Exchange Act: shall mean the Securities Exchange Act of 1934, as amended;
------------
Holder: shall mean any holder of Registrable Securities;
------
Initiating Holder: shall mean any Amway Entity or any other Holder or
-----------------
Holders who in the aggregate are Holders of more than 10% of the then
outstanding Registrable Securities;
Other Stockholders: shall mean Persons who, by virtue of an agreement with
------------------
the Company, are entitled to include their Securities in any registration
effected under Section 3.
Person: shall mean an individual, partnership, joint stock company,
------
limited liability company, corporation, trust or unincorporated organization,
and a government or agency or political subdivision thereof;
register, registered and registration: shall mean a registration effected
-------- ---------- ------------
by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean (A) the shares of Company Common Stock
----------------------
issued to the Stockholders under the Acquisition Agreement and the Franchisee
Acquisition Agreements, and (B) any securities of the Company issued as a
dividend or other distribution with respect to, or in exchange for or in
replacement of, the shares of Company Common Stock referred to in clause (A);
provided, that Registrable Securities shall not include (i) securities with
respect to which a registration statement with respect to the sale of such
securities has become effective under the Securities Act and all such securities
have been disposed of in accordance with such registration statement, (ii) such
securities as are actually sold pursuant to Rule 144, or (iii) such securities
as are acquired by the Company or any of its subsidiaries;
Registration Expenses: shall mean all expenses incurred by the Company in
---------------------
compliance with Sections 3(a), (b), (c) and (d) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company);
Rule 144: shall mean Rule 144 (or any successor provision thereto) under
--------
the Securities Act.
Rule 145: shall mean Rule 145 (or any successor provision thereto) under
--------
the Securities Act.
Security, Securities: shall have the meaning set forth in Section 2(1) of
--------------------
the Securities Act;
-2-
<PAGE>
Securities Act: shall mean the Securities Act of 1933, as amended; and
--------------
Selling Expenses: shall mean all underwriting discounts and selling
----------------
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than fees and expenses of
one counsel for all the Holders.
2. [Reserved]
----------
3. REGISTRATION RIGHTS
-------------------
(a) Requested Registration.
----------------------
(i) Request for Registration. If the Company shall receive
------------------------
from an Initiating Holder, at any time (x) after July 15, 1997 and (y) before
the end of the nine month period following the Effective Time (the "Demand
Period"), a written request (a "Registration Request") that the Company effect
any registration with respect to Registrable Securities held by such Initiating
Holder, the Company shall:
(A) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(B) use its commercially reasonable efforts to effect such
registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) as
may be so requested as soon as practicable, but in any event no later than
ninety (90) days from the date of the request and as would permit or
facilitate the sale and distribution of all such Registrable Securities as
are specified in such request, together with (i) all of the Registrable
Securities of any Stockholder joining in such request as specified in a
written request received by the Company within twenty (20) business days
after written notice from the Company is given under Section 3(a)(i)(A)
above; provided, however, that no registration requested under this Section
-------- -------
3(a) shall become effective unless and until financial results covering at
least thirty (30) days of combined operations of the Company, VTE and the
Franchisees have been published within the meaning of Section 201.01 of the
Commission's Codification of Financial Reporting Policies; provided
--------
further, that the Company shall not be obligated to effect, or take any
-------
action to effect, any such registration pursuant to this Section 3(a):
(u) Other than by means of an underwriting in
accordance with Section 3(a)(ii);
(v) Other than pursuant to a registration
statement on Form S-3;
(w) Unless the Company has received audited
financial statements with respect to any business acquired or to be
acquired to the extent required by Rule 3-05 of Regulation S-X for
so long as it takes to obtain such statements, provided that the
Company shall use all commercially reasonable efforts to obtain such
statements;
(x) If the Company, within ten (10) business days
of the receipt of the request of the Initiating Holders, gives
notice of its bona fide intention to effect the filing of a
registration statement with the Commission and to cause such
registration statement to become effective within ninety (90) days
of receipt of such request, provided that the Company actively
employs, in good faith, all commercially reasonable efforts to cause
such registration statement to become effective within such ninety
(90) day period;
-3-
<PAGE>
provided, however, that the periods during which the Company shall not
-----------------
be required to effect a registration in accordance with this Section
3(a) together with any periods of suspension under Section 3(g) hereof
may not exceed ninety (90) days in the aggregate;
(y) In any particular jurisdiction in which the
Company would be required to execute a general consent to service of
process in effecting such registration, qualification or compliance,
unless the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act or applicable rules
or regulations thereunder;
(z) After the Company has effected one (1) such
registration in accordance with this Section 3(a) (in the aggregate for
all Holders) and such registration has been declared or ordered
effective and the sales of such Registrable Securities thereunder shall
have closed.
Notwithstanding any other provision of this Agreement,
provided any Registration Request is made at any time during the Demand Period,
any postponement or deferral of such requested registration in accordance with
Sections 3(a)(i) or 3(g) shall only postpone or defer the requested registration
(regardless of the expiration of the Demand Period) until such time as it may
otherwise be effected in accordance with the terms hereof.
(ii) Underwriting. The Holders whose shares are to be
------------
included in a registration in accordance with this Section 3(a) and the Company
shall enter into underwriting and related agreements in customary form with the
representative of the underwriter or underwriters selected for such underwriting
by the Initiating Holders and reasonably acceptable to the Company. Such
underwriting agreement shall contain representations and warranties by the
Company and other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions. The Company
shall cooperate fully with the Holders and the underwriters in connection with
any underwritten offering.
If any Holder or holder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the managing underwriter. Any securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration.
(iii) Cut-Back. Notwithstanding any other provision of
--------
this Section 3(b), if the managing underwriter advises the Company and the
Holders in writing that marketing factors require a limitation on the number of
shares to be underwritten, the securities of the Company held by Other
Stockholders shall be excluded from such registration to the extent so required
by such limitation, unless and to the extent prohibited by the terms of any
registration rights or other agreement in effect with such Other Stockholder.
If, after the exclusion of such shares, still further reductions are still
required, the number of shares included in the registration by each Holder shall
be reduced on a pro rata basis (based on the number of shares held by such
Holder), by such minimum number of shares as is necessary to comply with such
request; provided, that there shall be no reduction in the number of shares
included in the registration by any Holder until all shares of Other
Stockholders have been excluded from such registration, unless and to the extent
prohibited by the terms of any registration rights or other agreement in effect
with such Other Stockholder. No Registrable Securities or any other securities
excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration. If any Other Stockholder who
has requested inclusion in such registration as provided above disapproves of
the terms of the underwriting, such person may elect to withdraw therefrom by
written notice to the Company, the underwriter and the Initiating Holder. The
securities so withdrawn shall also be withdrawn from registration. If the
underwriter has not limited the number of Registrable Securities or other
securities to be underwritten, the Company and officers and directors of the
Company may include its or their securities for its or their own account in such
registration if the representative so agrees and if the number of Registrable
Securities and other securities which would otherwise have been included in such
registration and underwriting will not thereby be limited.
-4-
<PAGE>
(iv) Demand Registration Rights of Other Persons. In
-------------------------------------------
the event the Company, directly or indirectly, grants any right to, or alters
any existing right of, any Person or Persons, by agreement, arrangement or
understanding, which enables such Person or Persons to exercise during the
Demand Period rights requiring the Company to prepare, or cause to be prepared,
on behalf of such Person or Persons or in cooperation with such Person or
Persons, a registration statement the form of which is, under the rules and
regulations of the Commission, suitable for the sale of any of the Company's
securities in a registered public offering, the Company shall notify the Holders
of the terms and conditions of such rights granted to such Person. Following
receipt of such notification from the Company, if requested by Holders of a
majority of the Registrable Securities, in their sole discretion, the Company
shall enter into a written agreement with the Holders, which agreement shall
amend this Agreement to permit the Holders to exercise during the Demand Period
demand registration rights on any more favorable terms and conditions which have
been granted to any such Person by the Company.
(b) Company Registration.
---------------------
(i) Notice of Registration. If at any time prior to the
----------------------
first anniversary of the date of this Agreement (the "Piggyback Period") the
Company shall determine to register any of its equity securities, either for its
own account or for the account of a security holder or holders, other than (A) a
registration relating solely to employee benefit plans, or (B) a registration
relating solely to a Rule 145 transaction, the Company shall:
(A) promptly give to each Holder written notice
thereof; and
(B) include in such registration (and any related
qualification laws or other compliance), and related underwriting, if any, all
the Registrable Securities specified in a written request or requests, made
within twenty (20) days after mailing of such written notice from the Company to
any Holder.
(ii) Underwriting. If the registration of which the Company
------------
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3(b)(i). In such event the right of any Holder to
registration in accordance with Section 3(b) shall be conditioned upon such
Holder's participation in such underwriting, and the inclusion of Registrable
Securities in the underwriting shall be limited to the extent provided herein.
All Holders proposing to distribute their securities through such underwriting
shall (together with the Company and the other holders distributing their
securities though such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by
the Company.
(iii) Cut-Back. Notwithstanding any other provision of this
--------
Section 3(b), if the managing underwriter advises the Company and the Holders in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the number of shares included in the registration by each
Holder and any other holder of securities of the Company whose shares are
requested to be included in a registration proposed to be filed by the Company
shall be reduced on a pro rata basis (based on the number of shares held by such
Holder and other security holder)by such minimum number of shares as is
necessary to comply with such request; subject to the terms of any registration
rights or other agreement in effect with any Other Stockholder. No Registrable
Securities or any other securities excluded from the underwriting by reason of
the underwriter's marketing limitation shall be included in such registration.
If any Other Stockholder who has requested inclusion in such registration as
provided above disapproves of the terms of the underwriting, such person may
elect to withdraw therefrom by written notice to the Company and the
underwriter. The securities so withdrawn shall also be withdrawn from
registration.
-5-
<PAGE>
(iv) Piggyback Registration Rights of Other Persons. In the
-----------------------------------------------
event the Company grants any rights, or alters any existing right, to any Person
or Persons by agreement, arrangement or understanding which enables such Person
to exercise during the Piggyback Period piggyback registration rights, the
Company shall, in writing, notify, within ten (10) calendar days of such action
by the Company, the Holders of the terms and conditions of such rights granted
to such Person. Notwithstanding anything contained in this Agreement to the
contrary, the Company shall not grant during the Piggyback Period any piggyback
rights to any Person or Persons, directly or indirectly, by agreement,
arrangement or understanding that provide, in the context of any cut back in the
number of shares to be included in accordance with piggyback registration
rights, that such cut back be made on a pro rata basis other than as provided in
Section 3(b)(iii).
(v) Right to Terminate Registration. The Company shall have
--------------------------------
the right to terminate or withdraw any registration initiated by it under this
Section 3(b) prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
(c) Expenses of Registration. Registration Expenses incurred in
------------------------
connection with any registration, qualification or compliance in accordance with
this Section 3 shall be borne by the Company, and all Selling Expenses shall be
borne by the Holders of the securities registered pro rata on the basis of the
number of their shares so registered.
(d) Registration Procedures. In the case of each registration
-----------------------
effected by the Company pursuant to this Section 3, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company
shall:
(i) keep such registration effective for a period of forty five
(45) days or until the Holders, as applicable, have completed the distribution
described in the registration statement relating thereto, whichever first
occurs;
(ii) in the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriters of such offering;
(iii) furnish to each Holder, and to any underwriter before filing
with the Commission, copies of any registration statement (including all
exhibits) and any prospectus forming a part thereof and any amendments and
supplements thereto (including all documents incorporated or deemed
incorporated by reference therein prior to the effectiveness of such
registration statement and including each preliminary prospectus, any summary
prospectus or any term sheet (as such term is used in Rule 434 under the
Securities Act)) and any other prospectus filed under Rule 424 under the
Securities Act, which documents, other than documents incorporated or deemed
incorporated by reference, will be subject to the review of the Holders and any
such underwriter for a period of at least five business days, and the Company
shall not file any such registration statement or such prospectus or any
amendment or supplement to such registration statement or prospectus to which
any Holder or any such underwriter shall reasonably object within five business
days after the receipt thereof; a Holder or such underwriters, if any, shall be
deemed to have reasonably objected to such filing only if the registration
statement, amendment, prospectus or supplement, as applicable, as proposed to
be filed, contains a material misstatement or omission;
(iv) furnish to each Holder and to any underwriter, such number
of conformed copies of the applicable registration statement and of each
amendment and supplement thereto (in each case including all exhibits) and such
number of copies of the prospectus forming a part of such registration
statement (including each preliminary prospectus, any summary prospectus or any
term sheet (as such term is used in Rule 434 under the Securities Act)) and any
other prospectus filed
-6-
<PAGE>
under Rule 424 under the Securities Act, in conformity with the requirements of
the Securities Act, and such other documents, including without limitation
documents incorporated or deemed to be incorporated by reference prior to the
effectiveness of such registration, as each of the Holders or any such
underwriter, from time to time may reasonably request;
(v) to the extent practicable, promptly prior to the filing of
any document that is to be incorporated by reference into any registration
statement or prospectus forming a part thereof subsequent to the effectiveness
thereof, and in any event no later than the date such document is filed with
the Commission, provide copies of such document to the Holders, if requested,
and to any underwriter, and make representatives of the Company available for
discussion of such document and other customary due diligence matters, and
include in such document prior to the filing thereof such information as any
Holder or any such underwriter reasonably may request;
(vi) make available at reasonable times for inspection by the
Holders, any underwriter participating in any disposition pursuant to such
registration and any attorney or accountant retained by the Holders or any such
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company and cause the officers, directors and employees of
the Company to supply all information reasonably requested by the Holders and
any such underwriters, attorneys or accountants in connection with such
registration subsequent to the filing of the applicable registration statement
and prior to the effectiveness of the applicable registration statement;
(vii) use its commercially reasonable efforts (x) to register or
qualify all Registrable Securities and other securities covered by such
registration under such other securities or blue sky laws of such States of the
United States of America where an exemption is not available and as the sellers
of Registrable Securities covered by such registration shall reasonably
request, (y) to keep such registration or qualification in effect for so long
as the applicable registration statement remains in effect, and (z) to take any
other action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the securities
to be sold by such sellers, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where it is not so qualified, or to subject
itself to taxation in any such jurisdiction, or to execute a general consent to
service of process in effecting such registration, qualification or compliance,
unless the Company is already subject to service in such jurisdiction and
except as may be required by the Securities Act or applicable rules or
regulations thereunder;
(viii) use its commercially reasonable efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the Company and
counsel to the Holders of Registrable Securities to enable the Holders thereof
to consummate the disposition of such Registrable Securities;
(ix) subject to Section 3(g) hereof, promptly notify each Holder
of Registrable Securities covered by a registration statement (A) upon
discovery that, or upon the happening of any event as a result of which, the
prospectus forming a part of such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
(B) of the issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation of proceedings
for that purpose, (C) of any request by the Commission for (1) amendments to
such registration statement or any document incorporated or deemed to be
incorporated by reference in any such registration statement, (2) supplements
to the prospectus forming a part of such registration statement or (3)
additional information, or (D) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the
-7-
<PAGE>
Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, and at the request of any such Holder promptly
prepare and furnish to it a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(x) use its commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of any such registration,
or the lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction;
(xi) if requested by any Initiating Holder, or any underwriter,
promptly incorporate in such registration statement or prospectus, pursuant to
a supplement or post effective amendment if necessary, such information as the
Initiating Holder and any underwriter may reasonably request to have included
therein, including, without limitation, information relating to the "plan of
distribution" of the Registrable Securities, information with respect to the
principal amount or number of shares of Registrable Securities being sold to
such underwriter, the purchase price being paid therefor and any other terms of
the offering of the Registrable Securities to be sold in such offering and make
all required filings of any such prospectus supplement or post-effective
amendment as soon as practicable after the Company is notified of the matters
to be incorporated in such prospectus supplement or post effective amendment;
(xii) furnish to the Holders, addressed to them, an opinion of
counsel for the Company, dated the date of the closing under the underwriting
agreement, if any, or the date of effectiveness of the registration statement
if such registration is not an underwritten offering, and use its commercially
reasonable efforts to furnish to the Holders, addressed to them, a "cold
comfort" letter signed by the independent certified public accountants who have
certified the Company's financial statements included in such registration,
covering substantially the same matters with respect to such registration (and
the prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities and such other matters as the Holders may reasonably request;
(xiii) otherwise use its commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least 12 months, but not more than 18
months, beginning with the first full calendar month after the effective date
of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder;
(xiv) provide promptly to the Holders upon request any document
filed by the Company with the Commission pursuant to the requirements of
Section 13 and Section 15 of the Exchange Act; and
(xv) use its commercially reasonable efforts to cause all
Registrable Securities included in any registration pursuant hereto to be
listed on each securities exchange on which securities of the same class are
then listed, or, if not then listed on any securities exchange, to be eligible
for trading in any over-the-counter market or trading system in which
securities of the same class are then traded.
-8-
<PAGE>
(e) Indemnification.
---------------
(i) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors, members and partners, and each
person controlling each of the Holders, with respect to each registration which
has been effected pursuant to this Section 3, and each underwriter, if any, and
each person who controls any underwriter, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on 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 under
which they were made, not misleading, or any violation by the Company of the
Securities Act or the Exchange Act or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and will reimburse each of the Holders, each of its officers, directors, members
and partners, and each person controlling each of the Holders, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company by
the Holders or underwriter and stated to be specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities
held by it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers and each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter, each Other Stockholder and each of their
officers, directors, members and partners, and each person controlling such
Other Stockholder against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document made by such Holder,
or any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements by such Holder therein,
in light of the circumstances under which they were made, not misleading, and
will reimburse the Company and such Other Stockholders, directors, officers,
partners, members, persons, underwriters or control persons for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder and
stated to be specifically for use therein; provided, however, that the
obligations of each of the Holders hereunder and under clause (vi) below shall
be limited to an amount equal to the net proceeds to such Holder of securities
sold as contemplated herein.
(iii) Each party entitled to indemnification under this
Section 3(d) (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld) and the Indemnified Party
may participate in such defense at such party's expense (unless the Indemnified
Party shall have reasonably concluded that there may be a conflict of interest
between the Indemnifying Party and the Indemnified Party in such action, in
which case the fees and expenses of one such counsel for all Indemnified Parties
shall be at the expense of the Indemnifying Party), and provided further that
the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 3 unless
the
-9-
<PAGE>
Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party (which consent shall not be unreasonably withheld or
delayed), consent to entry of any judgment or enter into any settlement which
does not include as an unconditional 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. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section
3(d) is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or expense
referred to herein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue (or alleged untrue) statement of a material fact or the
omission (or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing provisions,
the provisions in such underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of the Company and
Holders is subject to the condition that, insofar as they relate to any loss,
claim, liability or damage made in a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 424(b) (the "Final
Prospectus"), such indemnity or contribution agreement shall not inure to the
benefit of any underwriter or Holder (but only if such Holder was required to
deliver such Final Prospectus) if a copy of the Final Prospectus was furnished
to the underwriter and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Securities Act.
(f) Information by the Holders. Each of the Holders holding
--------------------------
securities included in any registration shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Section 3.
(g) Holdback Agreement; Postponement. Notwithstanding the provisions
--------------------------------
of Section 3(a), if the Company shall furnish to the Initiating Holder(s) a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company it would be seriously
detrimental to the Company and its stockholders for a registration statement to
be filed, the Company's obligation to use commercially reasonable efforts to
register, qualify or comply under Section 3(a) shall be deferred for a period
not to exceed ninety (90) days from the date the Company received the
Registration Request.
(h) Assignment. The registration rights set forth in Section 3
----------
hereof may be assigned, in whole or in part, to any transferee of Registrable
Securities (who shall be considered thereafter to be a Holder (provided that any
transferee who is not an affiliate of Stockholder shall be a
-10-
<PAGE>
Holder only with respect to such Registrable Securities so acquired and any
stock of the Company issued as a dividend or other distribution with respect to,
or in exchange for or in replacement of, such Registrable Securities) and shall
be bound by all obligations and limitations of this Agreement).
4. RULE 144 REPORTING
------------------
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
(i) make and keep public information available (as those terms are
understood and defined in Rule 144) at all times;
(ii) use its commercially reasonable efforts to file with the Commission
in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and
(iii) so long as there are outstanding any Registrable Securities, furnish
to each Holder, upon request, a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 and of
the Securities Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other reports
and documents so filed as such Holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing
such Holder to sell any such securities without registration.
5. INTERPRETATION OF THIS AGREEMENT
--------------------------------
(a) Directly or Indirectly. Where any provision in this Agreement
----------------------
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Georgia.
(c) Section Headings. The headings of the sections and subsections of
----------------
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
6. MISCELLANEOUS
-------------
(a) Notices.
-------
(i) All communications under this Agreement shall be in writing
and shall be delivered by facsimile or by hand or mailed by overnight courier or
by registered or certified mail, postage prepaid: .
(A) if to the Company, to Premiere Technologies, Inc., The
Lenox Building, Suite 400, 3399 Peachtree Road, N.E., Atlanta, Georgia 30326,
Telecopy (404) 262-8450, Attention: Boland T. Jones, President, or at such other
address as it may have furnished in writing to the Stockholders;
(B) if to the VTE/VTN Stockholders, at the addresses listed
on Schedule I hereto, or at such other addresses as may have been furnished to
the Company in writing; and
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<PAGE>
(C) if to the Franchisee Stockholders, at the addresses
listed in the appropriate Adoption Agreement, or at such other addresses as may
have been furnished to the Company in writing.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier, on the
first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of such
mailing.
(b) Reproduction of Documents. This Agreement and all documents
-------------------------
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the
Stockholder by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and the Stockholders may destroy any
original document so reproduced. The parties hereto agree and stipulate that
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Stockholders in
the regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
(c) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the
parties.
(d) Entire Agreement; Amendment and Waiver. This Agreement
--------------------------------------
constitutes the entire understanding of the parties hereto and supersedes all
prior understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and the Holders of a majority of the then
outstanding Registrable Securities.
(e) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
(f) No Inconsistent Agreements. The Company will not hereafter
--------------------------
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the Holders of Registrable Securities in this
Agreement.
(g) Remedies. Each Holder of Registrable Securities, in
--------
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(h) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended and understood that all of the rights and
privileges of each of the Holders shall be enforceable to the fullest extent
permitted by law.
-12-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
PREMIERE TECHNOLOGIES, INC.
By: ______________________________
Name:________________________________
Title:_______________________________
VTE/VTN STOCKHOLDERS:
_____________________________________
Name:________________________________
_____________________________________
Name:________________________________
_____________________________________
Name:________________________________
_____________________________________
Name:________________________________
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<PAGE>
EXHIBIT A
ADOPTION AGREEMENT
Reference is made to that certain Stock Restriction and Registration Rights
Agreement entered into as of ____________, 1997, by and among Premiere
Technologies, Inc. ("Premiere"), those stockholders of Voice-Tel Enterprises,
Inc. ("VTE") appearing as signatories thereto, those stockholders of VTN, Inc.
appearing as signatories thereto and those stockholders or other equity owners
of franchisees of VTE that execute Adoption Agreements in the form hereof (the
"Registration Rights Agreement").
WHEREAS, the undersigned is the holder of ______ shares of the common
stock, $.01 par value per share, of Premiere (the "Shares"); and
WHEREAS, Premiere has agreed to grant to the undersigned registration
rights with respect to the Shares on the terms and subject to the conditions set
forth in the Registration Rights Agreement.
NOW, THEREFORE, the undersigned hereby agrees to become a party to and be
bound by the terms and conditions of the Registration Rights Agreement,
effective as of the date hereof.
Date:________________________ ______________________________________
Name:
Address: ______________________
______________________
______________________
Acknowledged and Agreed:
PREMIERE TECHNOLOGIES, INC.
___________________________
By:________________________
Its:_______________________
<PAGE>
EXHIBIT D
AFFILIATE AGREEMENT
-------------------
Premiere Technologies, Inc.
The Lenox Building, Suite 400
3399 Peachtree Road, NE
Atlanta, Georgia 30326
Attention: Boland T. Jones
President
Gentlemen:
The undersigned is a stockholder of [Franchisee] (the "Company"), a
corporation organized and existing under the laws of the State of ________, and
will become a shareholder of Premiere Technologies, Inc. ("Premiere"), a
corporation organized and existing under the laws of the State of Georgia,
pursuant to the transactions described in the Transfer Agreement dated as of
____________, 1997 (the "Agreement"), by and among Premiere, the Company, and
certain stockholders of the Company. Under the terms of the Agreement, the
Company will be merged into and with a wholly owned subsidiary of Premiere (the
"Merger"), and the shares of the $____ par value common stock of the Company
("Company Common Stock") will be converted into and exchanged for shares of the
$0.01 par value common stock of Premiere ("Premiere Common Stock"). This
Affiliate Agreement represents an agreement between the undersigned and Premiere
regarding certain rights and obligations of the undersigned in connection with
the shares of Premiere to be received by the undersigned as a result of the
Merger.
In consideration of the Merger and the mutual covenants contained herein,
the undersigned and Premiere hereby agree as follows:
1. Affiliate Status. The undersigned understands and agrees that as to
----------------
the Company he or she is an "affiliate" under Rule 145(c) as defined in Rule 405
of the Rules and Regulations of the Securities and Exchange Commission ("SEC")
under the Securities Act of 1933, as amended ("1933 Act"), and the undersigned
anticipates that he or she will be such an "affiliate" at the time of the
Merger.
2. Initial Restriction on Disposition. The undersigned agrees that he or
----------------------------------
she will not sell, transfer, or otherwise dispose of his or her interests in, or
reduce his or her risk relative to, any of the shares of Premiere Common Stock
into which his or her shares of Company Common Stock are converted upon
consummation of the Merger until such time as Premiere notifies the undersigned
that the requirements of SEC Accounting Series Release Nos. 130 and 135 ("ASR
130 and 135") have been met. The undersigned understands that ASR 130 and 135
relate to publication of financial results of post-Merger combined operations of
Premiere and the Company. Premiere agrees that it will publish such results
within 45 days after the end of the first fiscal quarter of Premiere containing
the required period of post-Merger combined operations and that it will notify
the undersigned promptly following such publication.
3. Covenants and Warranties of Undersigned. The undersigned represents,
---------------------------------------
warrants and agrees that:
(a) The Premiere Common Stock received by the undersigned as a result of
the Merger will be taken for his or her own account and not for others,
directly or indirectly, in whole or in part.
<PAGE>
(b) Premiere has informed the undersigned that any distribution by the
undersigned of Premiere Common Stock has not been registered under the 1933
Act and that shares of Premiere Common Stock received pursuant to the Merger
can only be sold by the undersigned (1) following registration under the 1933
Act, or (2) in conformity with the volume and other requirements of Rule
145(d) promulgated by the SEC as the same now exist or may hereafter be
amended, or (3) to the extent some other exemption from registration under
the 1933 Act might be available. The undersigned understands that except as
set forth in that certain Stock Restriction and Registration Rights Agreement
of even date herewith between Premiere and the undersigned, Premiere is under
no obligation to file a registration statement with the SEC covering the
disposition of the undersigned's shares of Premiere Common Stock or to take
any other action necessary to make compliance with an exemption from such
registration available.
(c) The undersigned will, and will cause each of the other parties whose
shares are deemed to be beneficially owned by the undersigned pursuant to
Section 8 hereof to, have all shares of Company Common Stock beneficially
owned by the undersigned registered in the name of the undersigned or such
parties, as applicable, prior to the effective date of the Merger and not in
the name of any bank, broker-dealer, nominee or clearinghouse.
(d) During the 30 days immediately preceding the Effective Time of the
Merger, the undersigned has not sold, transferred, or otherwise disposed of
his or her interests in, or reduced his or her risk relative to, any of the
shares of Company Common Stock beneficially owned by the undersigned as of
the record date for determination of stockholders entitled to vote at the
Stockholders' Meeting of the Company held to approve the Merger.
(e) The undersigned is aware that Premiere intends to treat the Merger as
a tax-free reorganization under Section 368 of the Internal Revenue Code
("Code") for federal income tax purposes. The undersigned agrees to treat the
transaction in the same manner as Premiere for federal income tax purposes.
The undersigned acknowledges that Section 1.368-1(b) of the Income Tax
Regulations requires "continuity of interest" in order for the Merger to be
treated as tax-free under Section 368 of the Code. This requirement is
satisfied if, taking into account those stockholders of the Company who
receive cash in exchange for their stock, who receive cash in lieu of
fractional shares, or who dissent from the Merger, there is no plan or
intention on the part of the the stockholders of the Company to sell or
otherwise dispose of the Premiere Common Stock to be received in the Merger
that will reduce such stockholders' ownership to a number of shares having,
in the aggregate, a value at the time of the Merger of less than 50% of the
total fair market value of the Company Common Stock outstanding immediately
prior to the Merger. The undersigned has no prearrangement, plan or intention
to sell or otherwise dispose of an amount of his or her Premiere Common Stock
to be received in the Merger which would cause the foregoing requirement not
to be satisfied.
4. Restrictions on Transfer. The undersigned understands and agrees that
------------------------
stop transfer instructions with respect to the shares of Premiere Common Stock
received by the undersigned pursuant to the Merger will be given to Premiere's
Transfer Agent and that there will be placed on the certificates for such
shares, or shares issued in substitution thereof, a legend stating in substance:
"The shares represented by this certificate were issued pursuant to a
business combination which is accounted for as a "pooling of interests" and
may not be sold, nor may the owner thereof reduce his risks relative thereto
in any way, until such time as Premiere Technologies, Inc. ("Premiere") has
published the financial results covering at least 30 days of combined
operations after the effective date of the merger through which the business
combination was effected. In addition, the shares represented by this
certificate may not be sold, transferred or otherwise disposed of except or
unless (1) covered by an effective registration statement under the
Securities Act of 1933, as amended, (2) in accordance with (i) Rule 145(d)
(in the case of shares issued to an individual who is not an affiliate of
---
Premiere) or (ii) Rule 144 (in the case of shares issued to an individual who
is an
-2-
<PAGE>
affiliate of Premiere) of the Rules and Regulations of such Act, or (3) in
accordance with a legal opinion satisfactory to counsel for Premiere that
such sale or transfer is otherwise exempt from the registration requirements
of such Act."
Such legend will also be placed on any certificate representing Premiere
securities issued subsequent to the original issuance of the Premiere Common
Stock pursuant to the Merger as a result of any transfer of such shares or any
stock dividend, stock split, or other recapitalization as long as the Premiere
Common Stock issued to the undersigned pursuant to the Merger has not been
transferred in such manner to justify the removal of the legend therefrom. Upon
the request of the undersigned, Premiere shall cause the certificates
representing the shares of Premiere Common Stock issued to the undersigned in
connection with the Merger to be reissued free of any legend relating to
restrictions on transfer by virtue of ASR 130 and 135 as soon as practicable
after the requirements of ASR 130 and 135 have been met. In addition, if the
provisions of Rules 144 and 145 are amended to eliminate restrictions applicable
to the Premiere Common Stock received by the undersigned pursuant to the Merger,
or at the expiration of the restrictive period set forth in Rule 145(d),
Premiere, upon the request of the undersigned, will cause the certificates
representing the shares of Premiere Common Stock issued to the undersigned in
connection with the Merger to be reissued free of any legend relating to the
restrictions set forth in Rules 144 and 145(d) upon receipt by Premiere of an
opinion of its counsel to the effect that such legend may be removed.
5. Understanding of Restrictions on Dispositions. The undersigned has
---------------------------------------------
carefully read the Agreement and this Affiliate Agreement and discussed their
requirements and impact upon his ability to sell, transfer, or otherwise dispose
of the shares of Premiere Common Stock received by the undersigned, to the
extent he or she believes necessary, with his or her counsel or counsel for the
Company.
6. Filing of Reports by Premiere. Premiere agrees, for a period of two
-----------------------------
years after the effective date of the Merger, to file on a timely basis all
reports required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended, so that the public information provisions of
Rule 145(d) promulgated by the SEC as the same are presently in effect will be
available to the undersigned in the event the undersigned desires to transfer
any shares of Premiere Common Stock issued to the undersigned pursuant to the
Merger.
7. Transfer Under Rule 145(d). If the undersigned desires to sell or
--------------------------
otherwise transfer the shares of Premiere Common Stock received by him in
connection with the Merger at any time during the restrictive period set forth
in Rule 145(d), the undersigned will provide the necessary representation letter
to the transfer agent for Premiere Common Stock together with such additional
information as the transfer agent may reasonably request. If Premiere's counsel
concludes that such proposed sale or transfer complies with the requirements of
Rule 145(d), Premiere shall cause such counsel to provide such opinions as may
be necessary to Premiere's Transfer Agent so that the undersigned may complete
the proposed sale or transfer.
8. Acknowledgments. The undersigned recognizes and agrees that the
---------------
foregoing provisions also apply to all shares of the capital stock of the
Company and Premiere that are deemed to be beneficially owned by the undersigned
pursuant to applicable federal securities laws, which the undersigned agrees may
include, without limitation, shares owned or held in the name of (i) the
undersigned's spouse, (ii) any relative of the undersigned or of the
undersigned's spouse who has the same home as the undersigned, (iii) any trust
or estate in which the undersigned, the undersigned's spouse, and any such
relative collectively own at least a 10% beneficial interest or of which any of
the foregoing serves as trustee, executor, or in any similar capacity, and (iv)
any corporation or other organization in which the undersigned, the
undersigned's spouse and any such relative collectively own at least 10% of any
class of equity securities or of the equity interest. The undersigned further
recognizes that, in the event that the undersigned is a director or officer of
Premiere or becomes a director or officer of Premiere upon consummation of the
Merger, among other things, any sale of Premiere Common Stock by the undersigned
within a period of less than six months following the effective time of the
Merger may subject the undersigned to liability pursuant to Section 16(b) of the
Securities Exchange Act of 1934, as amended.
-3-
<PAGE>
9. Miscellaneous. This Affiliate Agreement is the complete agreement
-------------
between Premiere and the undersigned concerning the subject matter hereof. Any
notice required to be sent to any party hereunder shall be sent by registered or
certified mail, return receipt requested, using the addresses set forth herein
or such other address as shall be furnished in writing by the parties. This
Affiliate Agreement shall be governed by the laws of the State of Georgia.
This Affiliate Agreement is executed as of the ____ day of _________, 1997.
Very truly yours,
___________________________
Signature
___________________________
Print Name
___________________________
___________________________
___________________________
Address
[add below the signatures of all registered
owners of shares deemed beneficially owned
by the affiliate]
___________________________
Name:
___________________________
Name:
___________________________
Name:
AGREED TO AND ACCEPTED as of
_______________, 1997
PREMIERE TECHNOLOGIES, INC.
By:_________________________
-4-
<PAGE>
EXHIBIT 99.1
<PAGE>
[LETTERHEAD OF PREMIERE TECHNOLOGIES, INC. APPEARS HERE]
FOR IMMEDIATE RELEASE
PRESS RELEASE
Contact:
Premiere Technologies, Inc. Dewe Rogerson Inc.
Patrick G. Jones Debra Wasser (investor inquiries)
Senior Vice President Jenna Focarino (media inquires)
(404) 262-8429 Vice President
(212) 688-6840
Premiere Technologies, Inc.
David Allison
Director, Corporate Communications
(404) 262-8464
PREMIERE TECHNOLOGIES TO ACQUIRE VOICE-TEL
WILL OFFER PERSONAL COMMUNICATIONS SERVICES VIA PC, 800 LINES AND LOCAL
LINES STRATEGIC ACQUISITION DOUBLES COMPANY SIZE
(Atlanta April 2, 1997) -- Premiere Technologies (NASDAQ: PTEK: www.premtek.com)
today announced that it has signed definitive agreements to acquire Voice-Tel
Enterprises, together with certain independently operated franchisees, whose
current revenues will double the size of Premiere. Voice-Tel manages the
world's largest private digital voice and data messaging network. With the
acquisition of Voice-Tel's network, Premiere believes it will be the first
computer telephony integrator (CTI) to deliver a comprehensive, integrated suite
of personal communications services accessible through personal computer, toll-
free 800 lines and local seven-digit phone numbers.
"Personal communication services, and especially unified messaging, are all the
rage right now," said Boland T. Jones, Chief Executive Officer of Premiere, "but
show me another CTI player that can offer people access to any and all of their
personal communications devices -- car phone, laptop, fax, pager, cell phone,
home phone, or office voicemail -- without asking them to change service
providers, buy new devices, or add new software. Then tell me if that CTI
company can offer all that with the added economic benefit of doing it through a
local phone line on a flat-rate basis. With these acquisitions, Premiere
Technologies will be the first to be able to do this, and the first with a fully
functional, operational network-based system that offers a totally integrated
unified messaging and personal communications solution."
-more-
<PAGE>
With Voice-Tel, Premiere acquires a private frame relay network with local
access connected to it, reaching approximately 90% of the U.S. and 100% of
Canada, Australia and New Zealand, and soon the United Kingdom; an instant
audience of approximately 600,000 new subscribers; and a sales force of some 300
professionals in four countries.
"The acquisition of Voice-Tel brings Premiere a critical asset that other CTI
players are missing--and that is local access. Local access gives us the ability
to offer our services on a more cost-effective basis to more users. It's an
ideal strategic fit for Premiere, and to our knowledge, there are no other
private networks of this depth and scope that could offer local access,"
continued Jones.
While specific terms of the primarily stock transaction were not disclosed, the
acquisitions, including the value of related transactions contemplated under
Letters of Intent, are valued at approximately $185 million. The transactions,
which will be accounted for primarily as a pooling of interests and are subject
to various closing conditions, are expected to be completed in the second
quarter of 1997.
Mr. Jones added, "Premiere has long had the technology part of the task in place
and working. What we have now, with Voice-Tel, is a new and important avenue for
distribution of our personal communications services. The ease and affordability
of local flat-rate telephone access will significantly alter our traditional
subscriber base. Where, with our measured 800-line access we attracted primarily
a mobile business traveler, with local access we can attract a much broader
market. Our target market is now anyone with a telephone or a computer."
Premiere's comprehensive suite of integrated personal communications services
will include the following: universal messaging with voice mail, fax mail, and
e-mail; screen-based messaging; follow-me single number services; long-distance
calling while traveling; conference calling; e-mail over the phone; virtual
receptionist; and content services such as news, weather and travel information.
These services will be accessible equally by telephone or computer and will be
available bundled or unbundled to individual as well as corporate users.
Premiere Technologies, founded in 1991, is a technology company specializing in
the integration of information and telecommunications services, commonly
referred to as computer telephony. The Company's state-of-the-art network-based
platform uses proprietary software to deliver innovative services and customized
data for millions of users in over 100 countries. The Company markets its
services directly under the names Premiere Worldlink and Orchestrate and also
through strategic partners. Premiere also licenses its platform and technologies
to other telecommunications companies and large corporations. Premiere
Technologies is based in Atlanta, Georgia.
Statements made in this press release, other than those concerning historical
information, should be considered forward-looking and subject to various risks
and uncertainties. Such forward-looking statements are made based on
management's belief as well as assumptions made by, and information currently
available to, management pursuant to the `safe harbor' provisions of the Private
Securities Litigation Reform Act of 1995. Premiere's actual results may differ
materially from the results anticipated in these forward-looking statements as a
result of a variety of factors, including those identified in Premiere's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996, and, in
particular, the risks associated with business acquisitions, including, without
limitation, the risk that the acquisitions do not close.
###
