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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
MONEYGRAM PAYMENT SYSTEMS, INC.
(NAME OF SUBJECT COMPANY)
PINE VALLEY ACQUISITION CORPORATION
AND
VIAD CORP
(BIDDERS)
COMMON STOCK, $.01 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
608910105
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
<TABLE>
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PETER J. NOVAK, ESQ. Copy to:
VICE PRESIDENT AND GENERAL COUNSEL FRANK M. PLACENTI, ESQ.
VIAD CORP BRYAN CAVE LLP
1850 NORTH CENTRAL AVENUE, SUITE 2212 2800 NORTH CENTRAL AVENUE, SUITE 2100
PHOENIX, ARIZONA 85077-2212 PHOENIX, ARIZONA 85004-1098
(602) 207-4000 (TELEPHONE) (602) 230-7000 (TELEPHONE)
(602) 207-5480 (FAX) (602) 266-5938 (FAX)
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON
BEHALF OF BIDDERS)
</TABLE>
CALCULATION OF FILING FEE
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TRANSACTION AMOUNT OF
VALUATION FILING FEE
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$280,734,600*........................................ $56,147.00
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* For purposes of calculating the amount of the filing fee only. The amount
assumes the purchase of 16,513,800 shares of common stock, $.01 par value of
MoneyGram Payment Systems, Inc. (the "Company") at a price per share of
$17.00 in cash (the "Offer Price"). Such number of shares represents all the
Shares outstanding as of April 4, 1998.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
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Amount Previously Paid: Not applicable Filing Party: Not applicable
Form or Registration No.: Not applicable Date Filed: Not applicable
</TABLE>
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This Tender Offer Statement on Schedule 14D-1 (the "Statement") relates to
the offer by Pine Valley Acquisition Corporation, a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Viad Corp, a Delaware corporation
("Parent"), to purchase all outstanding shares of Common Stock, par value $.01
per share (the "Shares"), of MoneyGram Payment Systems, Inc., a Delaware
corporation (the "Company"), at a price per Share of $17.00, net to the seller
in cash, without interest, upon the terms and subject to the conditions set
forth in Purchaser's Offer to Purchase dated April 10, 1998 (the "Offer to
Purchase") and in the related Letter of Transmittal (which, as amended or
supplemented from time to time, together constitute the "Offer"), copies of
which are attached hereto as Exhibits (a)(1) and (a)(2), respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is MoneyGram Payment Systems, Inc.,
which has its principal executive offices at 7401 West Mansfield Avenue,
Lakewood, Colorado 80235.
(b) The class of equity securities being sought is all the outstanding
shares of Common Stock, par value $.01 per share, of the Company. The
information set forth in the Introduction and Section 1 ("Terms of the Offer")
of the Offer to Purchase is incorporated herein by reference.
(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market set forth in Section 6 ("Price Range of Shares; Dividends") of the Offer
to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement is filed by Purchaser and Parent. The
information concerning the name, state or other place of organization, principal
business and address of the principal office of each of Purchaser and Parent,
and the information concerning the name, business address, present principal
occupation or employment and the name, principal business and address of any
corporation or other organization in which such employment or occupation is
conducted, material occupations, positions, offices or employments during the
last five years and citizenship of each of the executive officers and directors
of Purchaser and Parent are set forth in the Introduction, Section 8 ("Certain
Information Concerning Purchaser and Parent") and Schedule I of the Offer to
Purchase and are incorporated herein by reference.
(e) and (f) During the last five years, none of Purchaser or Parent, and,
to the best knowledge of Purchaser and Parent, none of the persons listed in
Schedule I of the Offer to Purchase has been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) The information set forth in the Introduction, Section 8 ("Certain
Information Concerning Purchaser and Parent"), Section 10 ("Background of the
Offer; Contacts with the Company") and Section 11 ("The Offer and Merger; Merger
Agreement") is incorporated herein by reference.
(b) The information set forth in the Introduction, Section 7 ("Certain
Information Concerning the Company"), Section 8 ("Certain Information Concerning
Purchaser and Parent") and Section 10 ("Background of the Offer; Contacts with
the Company") of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth in Section 9 ("Sources and Amounts of
Funds") of the Offer to Purchase is incorporated herein by reference.
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ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction, Section 10
("Background of the Offer; Contacts with the Company"), Section 11 ("The Offer
and Merger; Merger Agreement") and Section 12 ("Purpose of the Offer and the
Merger; Plans for the Company") of the Offer to Purchase is incorporated herein
by reference.
(f) and (g) The information set forth in Section 13 ("Effect of the Offer
on the Market for the Shares; Exchange Act Listing; Exchange Act Registration;
Margin Regulations") of the Offer to Purchase is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in Section 8 ("Certain Information
Concerning Purchaser and Parent") and Section 11 ("The Offer and Merger; Merger
Agreement") of the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 1 ("Terms of the
Offer"), Section 8 ("Certain Information Concerning Purchaser and Parent"),
Section 10 ("Background of the Offer; Contacts with the Company"), Section 11
("The Offer and Merger; Merger Agreement"), Section 12 ("Purpose of the Offer;
Plans for the Company") and Section 18 ("Miscellaneous") of the Offer to
Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The Purchaser is a newly formed corporation which has engaged in no
activities other than in connection with the Offer and the proposed Merger (as
defined in the Offer to Purchase). Accordingly, the financial statements of
Purchaser are not material to a decision by a security holder of the Company to
sell, tender or hold Shares. The information set forth in Section 8 ("Certain
Information Concerning Purchaser and Parent") of the Offer to Purchase and the
financial statements contained in Parent's Annual Report on Form 10-K for the
year ended December 31, 1997 at Exhibit 13, which was filed with the Securities
and Exchange Commission on March 26, 1998 are incorporated herein by reference.
The incorporation herein by reference of the above-referenced financial
information does not constitute an admission that such information is material
to a decision by a stockholder of the Company whether to sell, tender or hold
shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Introduction, Section 8 ("Certain
Information Concerning Purchaser and Parent"), Section 10 ("Background of the
Offer; Contacts with the Company"), Section 11 ("The Offer and Merger; Merger
Agreement") and Section 12 ("Purpose of the Offer and the Merger; Plans for the
Company") of the Offer to Purchase is incorporated herein by reference.
(b)-(c) and (e) The information set forth in Section 7 ("Certain
Information Concerning the Company"), Section 12 ("Purpose of the Offer and the
Merger; Plans for the Company") and Section 16 ("Certain Legal Matters;
Regulatory Approvals") of the Offer to Purchase is incorporated herein by
reference.
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(d) The information set forth in Section 13 ("Effect of the Offer on the
Market for the Shares; Exchange Act Listing; Exchange Act Registration; Margin
Regulations") and Section 16 ("Certain Legal Matters; Regulatory Approvals") of
the Offer to Purchase is incorporated herein by reference.
(f) The information set forth in the Offer to Purchase, Letter of
Transmittal and the Agreement and Plan of Merger, dated as of April 4, 1998,
among Parent, Purchaser and the Company, copies of which are attached hereto as
Exhibits (a)(1), (a)(2) and (c)(1), is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
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(a)(1) Offer to Purchase dated April 10, 1998.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from Salomon Smith Barney to Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Form of Summary Advertisement as published in The New York
Times (National Edition) on April 10, 1998.
(a)(8) Press Release issued by Parent on April 6, 1998.
(a)(9) Press Release issued by Parent on April 10, 1998.
(b)(1)(a) Amended and Restated Credit Agreement, dated as of July 24,
1996, among Parent and the Banks named therein, Citicorp
USA, Inc. and Bank of America National Trust and Savings
Association.
(b)(1)(b) First Amendment dated as of August 1, 1997 to Amended and
Restated Credit Agreement.
(b)(1)(c) Second Amendment dated as of September 11, 1997 to Amended
and Restated Credit Agreement.
(c)(1) Agreement and Plan of Merger, dated as of April 4, 1998,
among Parent, Purchaser and the Company.
(c)(2) Confidentiality Agreement, dated February 11, 1998, between
Parent and Company.
(d) None.
(e) Not applicable.
(f) None.
(g)(1) Complaint filed in Taam v. Calvano et. al., Court of
Chancery of the State of Delaware in and for New Castle
County, April 9, 1998.
(g)(2) Complaint filed in Harbor v. Calvano et. al., Court of
Chancery of the State of Delaware in and for New Castle
County, April 9, 1998.
</TABLE>
3
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SIGNATURES
After due inquiry and to the best of my knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
PINE VALLEY ACQUISITION CORPORATION
By: /s/ RONALD G. NELSON
------------------------------------------
Name: Ronald G. Nelson
------------------------------------------
Title: Vice President and Assistant Treasurer
------------------------------------------
VIAD CORP
By: /s/ RONALD G. NELSON
------------------------------------------
Name: Ronald G. Nelson
------------------------------------------
Title: Vice President -- Finance and Treasurer
------------------------------------------
April 10, 1998
4
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EXHIBIT INDEX
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EXHIBIT
NO.
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(a)(1) Offer to Purchase dated April 10, 1998
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter from Salomon Smith Barney to Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees
(a)(5) Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
(a)(7) Form of Summary Advertisement as published in The New York
Times (National Edition) on April 10, 1998
(a)(8) Press Release issued by Parent on April 6, 1998
(a)(9) Press Release issued by Parent on April 10, 1998
(b)(1)(a) Amended and Restated Credit Agreement, dated as of July 24,
1996, among Parent and the Banks named therein, Citicorp
USA, Inc. and Bank of America National Trust and Savings
Association
(b)(1)(b) First Amended dated as of August 1, 1997 to Amended and
Restated Credit Agreement
(b)(1)(c) Second Amended dated as of September 11, 1997 to Amended and
Restated Credit Agreement
(c)(1) Agreement and Plan of Merger, dated as of April 4, 1998,
among Parent, Purchaser and the Company
(c)(2) Confidentiality Agreement, dated as of February 11, 1998
between Parent and the Company
(g)(1) Complaint filed in Taam v. Calvano et. al., Court of
Chancery of the State of Delaware in and for New Castle
County, April 9, 1998.
(g)(2) Complaint filed in Harbor v. Calvano et. al., Court of
Chancery of the State of Delaware in and for New Castle
County, April 9, 1998.
</TABLE>
5
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EXHIBIT 99(a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
MONEYGRAM PAYMENT SYSTEMS, INC.
AT
$17.00 NET PER SHARE
BY
PINE VALLEY ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
VIAD CORP
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 NOON, NEW YORK CITY TIME,
ON FRIDAY, MAY 8, 1998, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THE
NUMBER OF SHARES OF MONEYGRAM PAYMENT SYSTEMS, INC. ("COMPANY") THAT SHALL
CONSTITUTE A MAJORITY OF THE THEN OUTSTANDING SHARES OF THE COMPANY ON A FULLY
DILUTED BASIS; (2) THE EXPIRATION OR TERMINATION OF THE APPLICABLE WAITING
PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED; AND (3) CERTAIN OTHER CONDITIONS, ANY OF WHICH CONDITIONS MAY BE WAIVED
BY THE PARENT. THE MINIMUM CONDITION MAY ONLY BE WAIVED BY PURCHASER WITH THE
PRIOR APPROVAL OF THE COMPANY. SEE SECTION 15 WHICH SETS FORTH IN FULL THE
CONDITIONS OF THE OFFER.
------------------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT EACH
OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE
COMPANY'S STOCKHOLDERS, AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THE OFFER.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of his or her shares
of Common Stock, par value $.01 per share, of the Company ("Shares") should
either (1) complete and sign the Letter of Transmittal (or a facsimile thereof)
in accordance with the instructions in the Letter of Transmittal and mail or
deliver it together with the certificate(s) evidencing tendered Shares, and any
other required documents, to the Depositary (as defined herein) or tender such
Shares pursuant to the procedure for book-entry transfer set forth in Section 3,
or (2) request such stockholder's broker, dealer, commercial bank, trust company
or other nominee to effect the transaction for the stockholder. Any stockholder
whose Shares are registered in the name of a broker, dealer, commercial bank,
trust company or other nominee must contact such broker, dealer, commercial
bank, trust company or other nominee if he or she desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates evidencing
such Shares are not immediately available, or who cannot comply with the
procedure for book-entry transfer on a timely basis, may tender such Shares by
following the procedure for guaranteed delivery set forth in Section 3.
Questions or requests for assistance may be directed to the Information
Agent or to the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional copies
of this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent or from
brokers, dealers, commercial banks or trust companies.
------------------------
The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
April 10, 1998
<PAGE> 2
TABLE OF CONTENTS
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PAGE
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INTRODUCTION................................................ 1
1. TERMS OF THE OFFER...................................... 3
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES........... 4
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING
SHARES.................................................. 6
4. WITHDRAWAL RIGHTS....................................... 8
5. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS............... 9
6. PRICE RANGE OF SHARES; DIVIDENDS........................ 10
7. CERTAIN INFORMATION CONCERNING THE COMPANY.............. 11
8. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT..... 15
9. SOURCES AND AMOUNTS OF FUNDS............................ 19
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY...... 20
11. THE OFFER AND MERGER; MERGER AGREEMENT.................. 23
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE
COMPANY................................................. 32
13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES;
EXCHANGE ACT LISTING; EXCHANGE ACT REGISTRATION; MARGIN
REGULATIONS............................................. 34
14. DIVIDENDS AND DISTRIBUTIONS............................. 35
15. CERTAIN CONDITIONS TO THE OFFER......................... 35
16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS............. 36
17. FEES AND EXPENSES....................................... 39
18. MISCELLANEOUS........................................... 39
Schedule I -- Directors and Executive Officers of Parent and
Purchaser................................................. I-1
</TABLE>
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To the Holders of Common Stock of MoneyGram Payment Systems, Inc.:
INTRODUCTION
Pine Valley Acquisition Corporation ("Purchaser"), a Delaware corporation
and a wholly owned subsidiary of Viad Corp, a Delaware corporation ("Parent"),
hereby offers to purchase all outstanding shares of common stock, par value $.01
per share (the "Company Common Stock" or the "Shares"), of MoneyGram Payment
Systems, Inc., a Delaware corporation ("Company"), at a purchase price of $17.00
per Share, net to the seller in cash, without interest thereon (the "Offer
Price"), upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which, as amended or
supplemented from time to time, together constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
Purchaser pursuant to the Offer. Purchaser will pay all charges and expenses of
Salomon Brothers Inc and Smith Barney Inc., collectively doing business as
Salomon Smith Barney ("Salomon"), which is acting as the Dealer Manager (in such
capacity, the "Dealer Manager"), Norwest Bank Minnesota, N.A. (the
"Depositary"), and MacKenzie Partners, Inc. (the "Information Agent"), incurred
in connection with the Offer in accordance with the terms of agreements entered
into between Purchaser and such persons. See Section 17. For purposes of this
Offer to Purchase, references to "Section" are references to a section of this
Offer to Purchase, unless the context otherwise requires.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD" OR "BOARD OF DIRECTORS")
HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER (AS
THESE TERMS ARE DEFINED HEREIN) AND HAS DETERMINED THAT THE OFFER AND THE MERGER
ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY. THE
BOARD UNANIMOUSLY RECOMMENDED ACCEPTANCE OF THE OFFER AND APPROVAL AND ADOPTION
OF THE MERGER AGREEMENT AND THE MERGER BY THE STOCKHOLDERS OF THE COMPANY.
Morgan Stanley & Co., Inc. (the "Company's Financial Advisor"), financial
advisor to the Company, has delivered to the Board a written opinion dated April
4, 1998 to the effect that, as of such date and based upon and subject to
certain matters stated in such opinion, the cash consideration to be received by
the holders of Shares in the Offer and the Merger is fair to such holders from a
financial point of view. A copy of such opinion is included with the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"),
which is being mailed to stockholders concurrently herewith, and should be read
carefully in its entirety for a description of the assumptions made, matters
considered and limitations on the review undertaken by the Company's Financial
Advisor.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THE
NUMBER OF SHARES THAT CONSTITUTE A MAJORITY OF THE THEN OUTSTANDING SHARES OF
THE COMPANY ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"); (2) THE
EXPIRATION OR TERMINATION OF THE APPLICABLE WAITING PERIOD UNDER THE HART-
SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"); AND
(3) CERTAIN OTHER CONDITIONS, ANY OF WHICH CONDITIONS MAY BE WAIVED BY PARENT.
THE MINIMUM CONDITION MAY ONLY BE WAIVED BY PURCHASER WITH THE PRIOR APPROVAL OF
THE COMPANY. SEE SECTION 15 WHICH SETS FORTH IN FULL THE CONDITIONS TO THE
OFFER.
The Offer will expire at 12:00 Noon, New York City time, on Friday, May 8,
1998, unless extended.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of April 4, 1998 (the "Merger Agreement"), by and among Parent, Purchaser and
the Company. The Merger Agreement provides, among other things, that as promptly
as practicable following the completion of the Offer and the satisfaction or
waiver of certain conditions, including the purchase of Shares pursuant to the
Offer (sometimes referred to
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herein as the "consummation" of the Offer) and the approval and adoption of the
Merger Agreement by the stockholders of the Company, if required by applicable
law, Purchaser will be merged with and into the Company (the "Merger"), with the
Company as the surviving corporation (the "Surviving Corporation"). In the
Merger, each issued and outstanding Share (other than Dissenting Shares (as
hereinafter defined)) will be converted into and represent the right to receive
$17.00 in cash or any higher price that may be paid per Share in the Offer,
without interest (the "Merger Price"). See Section 11.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer, and from time to time thereafter, in addition
to its rights under applicable law and the Company's Certificate of
Incorporation and By-laws, Purchaser shall be entitled to designate up to such
number of directors, rounded up to the next whole number, on the Board of the
Company and the board of each of its subsidiaries as shall give Purchaser
representation on the Board of the Company and the board of each of its
subsidiaries equal to the product of the total number of directors on the Board
of the Company and the board of each of its subsidiaries (giving effect to
directors so elected) multiplied by the percentage that the aggregate number of
Shares beneficially owned by Purchaser or any affiliates of Purchaser following
such purchase bears to the total number of Shares then outstanding. In the
Merger Agreement, the Company has agreed to promptly take all actions necessary
to cause Purchaser's designees to be elected as directors of the Company and
each of its subsidiaries, including increasing the size of such boards or
securing the resignations of incumbent directors or both. The Company has also
agreed, at such time, to use all reasonable efforts to cause persons designated
by Purchaser to constitute the same percentage of each committee of the Board as
persons designated by Purchaser shall constitute of the Board of each committee
of the Board to the extent permitted by applicable law.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the approval and adoption of the Merger Agreement
by the requisite vote of the stockholders of the Company. See Section 11. Under
the Company's Certificate of Incorporation and the General Corporation Law of
the State of Delaware ("Delaware Law"), the affirmative vote of the holders of a
majority of the outstanding Shares is required to approve and adopt the Merger
Agreement and the Merger. Consequently, if Purchaser acquires (pursuant to the
Offer, the Merger Agreement or otherwise) at least a majority of the outstanding
Shares, Purchaser will have sufficient voting power to approve and adopt the
Merger Agreement and the Merger without the vote of any other stockholder.
Under Delaware Law, if Purchaser acquires, pursuant to the Offer, the
Merger Agreement or otherwise, at least 90% of the then outstanding Shares,
Purchaser will be able to approve and adopt the Merger Agreement and the
transactions contemplated thereby, including the Merger, without a vote of the
Company's stockholders. In such event, Parent, Purchaser and the Company have
agreed to take, at the request of Purchaser, all necessary and appropriate
action to cause the Merger to become effective as soon as reasonably practicable
after such acquisition, without a meeting of the Company's stockholders. If,
however, Purchaser does not acquire at least 90% of the then outstanding Shares
pursuant to the Offer, the Merger Agreement or otherwise, a significantly longer
period of time will be required to effect the Merger. See Section 11. The Merger
Agreement provides that, following the consummation of the Offer but prior to
the time when the Merger shall become effective ("Effective Time"), (i) the
Company will, if requested by the Purchaser, issue Shares to the Purchaser
representing a maximum of 19.9% of the Shares outstanding immediately prior to
such issuance and (ii) the Company will terminate the Credit Agreement between
the Company and The Northern Trust Company.
Pursuant to the Merger Agreement, the Company advised Purchaser that as of
April 4, 1998, 16,513,800 Shares were issued and outstanding, and 1,180,266
Shares were issuable pursuant to employee stock options outstanding under the
Company's Plans. As of April 4, 1998, options for 270,905 Shares were
exercisable. However, on April 7, 1997, certain stockholders of the Company
unaffiliated with Parent reported an increase in their beneficial ownership of
Shares to approximately 31.03% of the total outstanding Shares of the Company.
On January 12, 1997, those same shareholders had reported beneficial ownership
of 14.20% of the total outstanding Shares of the Company. Under the Company's
Plans (as defined in Section 7), the acquisition by a person of 25% or more of
the outstanding Shares constitutes a Change in Control (as defined under the
Plans). Upon a Change in Control, the Company is obligated to immediately cancel
all outstanding
2
<PAGE> 5
options and, within ten days of the Change of Control, remit a cash payment of
an amount based on the price of a Share (as calculated pursuant to the Plans) in
lieu of such options to the option holder. See Section 7.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), Purchaser will accept for payment and will pay for all Shares which
are validly tendered prior to the Expiration Date (as hereinafter defined) and
not withdrawn in accordance with the provisions set forth in Section 4 herein,
as soon as practicable after such Expiration Date. The term "Expiration Date"
means 12:00 Noon, New York City time, on Friday, May 8, 1998, unless and until
Purchaser, in its sole discretion (but subject to the terms of the Merger
Agreement), shall have extended the period of time during which the Offer is
open, in which event the term "Expiration Date" shall refer to the latest time
and date at which the Offer, as so extended by Purchaser, shall expire.
Purchaser expressly reserves the right, in its sole discretion (but subject
to the terms and conditions of the Merger Agreement), at any time and from time
to time, to extend for any reason the period of time during which the Offer is
open, including the occurrence of any of the conditions specified in Section 15,
by giving oral or written notice of such extension to the Depositary. During any
such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the rights of a tendering stockholder to
withdraw his or her Shares. See Section 4. Under no circumstance will interest
be paid on the purchase price for tendered Shares, whether or not the Offer is
extended.
Subject to the applicable regulations of the Securities and Exchange
Commission (the "Commission"), Purchaser also expressly reserves the right, in
its sole discretion (but subject to the terms and conditions of the Merger
Agreement), at any time and from time to time, (i) to delay acceptance for
payment of, or regardless of whether such Shares were theretofore accepted for
payment, payment for, any Shares pending receipt of regulatory approval
specified in Section 16, (ii) to terminate the Offer and not accept for payment
any Shares upon the occurrence of any of the conditions specified in Section 15
and (iii) to waive any condition or otherwise amend the Offer in any respect, by
giving oral or written notice of such delay, termination, waiver or amendment to
the Depositary and by making a public announcement thereof.
The Merger Agreement provides that Purchaser will not (i) waive the Minimum
Condition without the consent of the Company, (ii) decrease the price per Share
payable in the Offer, (iii) reduce the maximum number of Shares to be purchased
in the Offer, or (iv) impose conditions to the Offer in addition to those set
forth in the Merger Agreement, as described in Section 15.
Notwithstanding the foregoing, Purchaser may, without the consent of the
Company, (i) extend the Offer beyond the scheduled Expiration Date if, at the
scheduled Expiration Date, any of the conditions to Purchaser's obligation to
accept for payment, and to pay for, the Shares, shall not be satisfied or
waived, (ii) extend the Offer for any period required by any rule, regulation or
interpretation of the Commission or the staff thereof applicable to the Offer,
or (iii) extend the Offer for any aggregate period of not more than 10 business
days beyond the latest applicable date that would otherwise be permitted under
clause (i) or (ii), if as of such date, all of the conditions to Purchaser's
obligations to accept for payment, and to pay for, the Shares are satisfied or
waived, but the number of Shares validly tendered and not withdrawn pursuant to
the Offer equals 75% or more, but less than 90%, of the outstanding Shares on a
fully diluted basis; provided, however, that if, on the initial Expiration Date,
(A) the sole condition remaining unsatisfied is either (x) the failure of the
waiting period under the HSR Act to have expired or been terminated, or (y) the
failure to obtain any authorizations, consents or approvals required to
consummate the Offer ("Pre-Offer Approvals"), Purchaser shall extend the Offer
from time to time until five business days after the later of the expiration or
termination of the waiting period under the HSR Act or the receipt of all
Pre-Offer Approvals (see Section 16 for a description of regulatory approval
requirements) or (B) if the sole condition remaining unsatisfied on
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<PAGE> 6
the initial Expiration Date is the condition that the Company shall have not
failed to perform in any material respect any obligation or to comply in any
material respect with any agreement or covenant of the Company to be performed
or complied with by it under the Merger Agreement. Purchaser shall, so long as
the breach can be cured and the Company is vigorously attempting to cure such
breach, extend the Offer from time to time until five business days after such
breach is cured (provided that Purchaser shall not be required to extend the
Offer under (A) or (B) above beyond 45 calendar days after such initial
scheduled Expiration Date).
Any such extension, delay, amendment, waiver, or termination will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be issued no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Subject to applicable law (including Rules 14d-4(c), 14d-6(d)
and 14e-1(d) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) and without limiting the manner in which Purchaser may choose
to make any public announcement, Purchaser shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
issuing a press release to the Dow Jones News Service.
If Purchaser extends the Offer, or if Purchaser (whether before or after
its acceptance for payment of Shares) is delayed in its purchase of or payment
for Shares or is unable to pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may retain tendered Shares on behalf of Purchaser, and such Shares may not be
withdrawn except to the extent tendering stockholders are entitled to withdrawal
rights as described in Section 4. However, the ability of Purchaser to delay the
payment for Shares which Purchaser has accepted for payment is limited by Rule
14e-1(c) under the Exchange Act, which requires that a bidder pay the
consideration offered or return the securities deposited by or on behalf of
holders of securities promptly after the termination or withdrawal of the Offer.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer
(including the Minimum Condition), subject to the Merger Agreement, Purchaser
will disseminate additional tender offer materials and extend the Offer if and
to the extent required by Rules 14d-4(c) and 14d-6(d) under the Exchange Act.
The minimum period during which the Offer must remain open following material
changes in the terms of the Offer or information concerning the Offer, other
than a change in price or a change in percentage of securities sought, will
depend upon the facts and circumstances, including the relative materiality of
the terms or information. With respect to a change in price or a change in
percentage of securities sought, a minimum ten business day period is required
to allow for adequate dissemination to stockholders and investor response.
Subject to the terms of the Merger Agreement, if, prior to the Expiration Date,
Purchaser should decide to decrease or increase the price per Share being
offered in the Offer, such decrease or increase will be applicable to all
stockholders whose Shares are accepted for payment pursuant to the Offer. As
used in this Offer to Purchase, "business day" means any day, other than a
Saturday, Sunday or a federal holiday, and consists of the time period from
12:01 AM through 12:00 midnight, New York City time, as computed in accordance
with Rule 14d-1 under the Exchange Act.
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares and will be furnished to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the terms of the Merger Agreement and the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), Purchaser will accept
for payment, and will pay for, all Shares validly tendered and not properly
withdrawn prior to the Expiration Date as soon as practicable after (i) the
Expiration Date, (ii) the expiration or termination of any applicable waiting
periods under the HSR Act, and (iii) the satisfaction or waiver of the
conditions of the Offer set forth in Section 15. Subject to applicable rules of
the Commission, Purchaser
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<PAGE> 7
expressly reserves the right to delay acceptance for payment of, or payment for,
Shares pending receipt of any regulatory approvals specified in Section 16 or in
order to comply in whole or in part with any other applicable law.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
evidencing such Shares (the "Stock Certificates") or timely confirmation of a
book-entry transfer (a "Book-Entry Confirmation") of such Shares into the
Depositary's account at the Book-Entry Transfer Facility (as defined herein, see
Section 3), (ii) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) or, in the case of a book-entry transfer, an Agent's
Message (as defined herein, see Section 3) and (iii) any other required
documents. For a description of the procedure for tendering Shares pursuant to
the Offer, see Section 3. Accordingly, payment may be made to tendering
stockholders at different times if delivery of the Shares and other required
documents occur at different times.
On April 10, 1998, Parent filed with the Federal Trade Commission (the
"FTC") and the Antitrust Division of the Department of Justice (the "Antitrust
Division") a Premerger Notification and Report Form under the HSR Act with
respect to the Offer and the Merger Agreement. Accordingly, it is anticipated
that the waiting period under the HSR Act applicable to the Offer will expire at
11:59 P.M., New York City time, on Saturday, April 25, 1998. Prior to the
expiration or termination of such waiting period, the FTC or the Antitrust
Division may extend such waiting period by requesting additional information
from the parties with respect to the Offer. If such a request is made with
respect to the purchase of Shares in the Offer, the waiting period will expire
at 11:59 p.m., New York City time, on the tenth calendar day after substantial
compliance by Parent with such a request. Thereafter, the waiting period may
only be extended by court order. Alternatively, if the FTC or Antitrust Division
believes that the transaction is likely to have anticompetitive effects, the
reviewing agency may seek an injunction to prevent consummation of the
transaction. The waiting period under the HSR Act may be terminated by the FTC
and the Antitrust Division prior to its expiration. Parent has requested early
termination of the waiting period, although there can be no assurance that this
request will be granted. See Section 16 for additional information regarding the
HSR Act.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn if, as and when Purchaser gives oral or written notice to the
Depositary of its acceptance for payment of such Shares. Upon the terms and
subject to the conditions of the Offer, payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payment from Purchaser and transmitting such payments to
tendering stockholders whose Shares have been accepted for payment. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID BY PURCHASER ON THE CONSIDERATION PAID FOR
SHARES PURSUANT TO THE OFFER, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT.
If, prior to the Expiration Date, the Purchaser increases the consideration
to be paid per Share pursuant to the Offer, Purchaser will pay such increased
consideration for all such Shares purchased pursuant to the Offer, whether or
not such Shares were tendered prior to such increase in consideration.
Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of its affiliates the right to purchase Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve Purchaser of its obligations under the Offer or prejudice the rights of
tendering stockholders to receive payment for Shares validly tendered and
accepted for payment.
If any tendered Shares are not accepted for payment for any reason pursuant
to the Offer, or if Certificates evidencing Shares ("Stock Certificates") are
submitted for more Shares than are tendered, Stock Certificates evidencing
Shares not purchased or tendered will be returned (or, in the case of Shares
tendered by book-entry transfer, such Shares will be credited to an account
maintained at the Book-Entry Transfer Facility (as defined in Section 3)),
without expense to the tendering stockholder, as promptly as practicable after
the expiration or termination of the Offer.
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<PAGE> 8
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES
Valid Tender. To validly tender Shares pursuant to the Offer, either (a) a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees or an Agent's Message (in the
case of any book-entry transfer), and any other documents required by the Letter
of Transmittal must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
and either (i) the Stock Certificates evidencing such Shares to be tendered must
be received by the Depositary at such address along with the Letter of
Transmittal or (ii) such Shares must be delivered to the Depositary pursuant to
the procedures for book-entry transfer described below and a Book-Entry
Confirmation (as defined below) must be received by the Depositary, including an
Agent's Message, in each case prior to the Expiration Date, or (b) the tendering
stockholder must comply with the guaranteed delivery procedures described below.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility (defined below) to and received by the Depositary and forming
a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the participant in the
Book-Entry Transfer Facility tendering the Shares which are the subject of such
Book-Entry Confirmation that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that Purchaser may enforce
such agreement against such
participant.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date of
this Offer to Purchase, and any financial institution that is a participant in
the system of the Book-Entry Transfer Facility may make book-entry delivery of
Shares by causing the Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account at the Book-Entry Transfer Facility in accordance with
the procedures of the Book-Entry Transfer Facility. However, although delivery
of Shares may be effected through book-entry transfer, the Letter of Transmittal
(or facsimile thereof) properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message, and any other required
documents, must, in any case, be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or the guaranteed delivery procedures described below must be
complied with. DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of the Medallion Signature Guarantee
Program or by any other "eligible guarantor institution," as such term is
defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing, an
"Eligible Institution"), except in cases where (a) the Letter of Transmittal is
signed by the registered holder of the Shares tendered therewith and such holder
has not completed the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal, or (b)
such Shares are tendered for the account of an Eligible Institution. If a Stock
Certificate is registered in the name of a person other than the signer of the
Letter of Transmittal, or if payment is to be made, or a Stock Certificate not
accepted for payment or not tendered is to be returned, to a person other than
the registered holder(s), then the Stock Certificate must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear on the Stock Certificate, with the
signature(s) on such Stock Certificate or stock powers guaranteed as described
above. See Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Stock Certificates evidencing such Shares are
not immediately available or time will not permit all required documents to
reach the Depositary on or prior to the Expiration Date, or the procedure for
book-entry transfer cannot be completed on a timely basis, such Shares may
nevertheless be tendered if all the following conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
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<PAGE> 9
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, is
received by the Depositary prior to the Expiration Date as provided below;
and
(iii) the Stock Certificates for such Shares, in proper form for
transfer (or a Book-Entry Confirmation), together with a properly completed
and duly executed Letter of Transmittal (or facsimile thereof), with any
required signature guarantees (or in the case of a book-entry transfer, an
Agent's Message), and any other documents required by the Letter of
Transmittal, are received by the Depositary within three New York Stock
Exchange trading days after the date of execution of such Notice of
Guaranteed Delivery. A "New York Stock Exchange trading day" is any day on
which the New York Stock Exchange (the "NYSE") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand, transmitted by
facsimile transmission or mailed to the Depositary and must include a guarantee
by an Eligible Institution in the form set forth in the Notice of Guaranteed
Delivery.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after a timely receipt by the Depositary of the
Stock Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, or, in the case of book-entry transfer, an
Agent's Message, with any required signature guarantees, and any other documents
required by the Letter of Transmittal.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. INSTEAD OF DELIVERY
BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND-DELIVERY
SERVICE, PROPERLY INSURED. IF DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT SUCH
CERTIFICATES AND DOCUMENTS BE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH
RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
INSURE TIMELY DELIVERY.
Backup Federal Income Tax Withholding. Under the federal income tax laws,
the Depositary will be required to withhold 31% of the amount of any cash
payments made to certain stockholders pursuant to the Offer. In order to avoid
such backup withholding, each tendering stockholder must provide the Depositary
with such stockholder's correct taxpayer identification number and certify that
such stockholder is not subject to backup federal income tax withholding by
completing and filing the Substitute Form W-9 included in the Letter of
Transmittal (see Instruction 10 of the Letter of Transmittal) or a Form W-9 with
the Depositary prior to the time any payments are made pursuant to the Offer.
Certain stockholders (including, among others, corporations and certain foreign
persons) are not subject to backup withholding provided they establish their
status when required to do so. If the stockholder is a nonresident alien or
foreign entity not subject to backup withholding, the stockholder must give the
Depositary a completed Form W-8, "Certificate of Foreign Status", prior to the
time any such payments are made.
Other Requirements. By executing a Letter of Transmittal as set forth
above (including through delivery of an Agent's Message), a tendering
stockholder irrevocably appoints designees of Purchaser as the stockholder's
attorneys-in-fact and proxies, in the manner set forth in the Letter of
Transmittal, each with full power of substitution, to the full extent of the
stockholder's rights with respect to the Shares tendered by the stockholder and
accepted for payment by Purchaser (and any and all other Shares or other
securities or property issued or issuable in respect of such Shares on or after
the date of the Merger Agreement). All such proxies and powers of attorney shall
be irrevocable and coupled with an interest in the tendered Shares. Such
appointment is effective only upon acceptance for payment of the Shares by
Purchaser. Upon such acceptance for payment, all prior proxies and consents
given by the stockholder with respect to such Shares (and such other Shares and
other securities) will, without further action, be revoked, and no subsequent
proxies may be given nor any subsequent written consent executed by such
stockholder (and, if given or executed, will not be deemed to be effective) with
respect thereto. The designees of Purchaser will, with respect to the Shares and
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<PAGE> 10
other securities for which the appointment is effective, be empowered to
exercise all voting and other rights of such stockholder as they in their sole
discretion may deem proper at any annual or special meeting of the Company's
stockholders, or any adjournment or postponement thereof, by written consent or
otherwise. Purchaser reserves the right to require that, in order for Shares to
be deemed validly tendered, immediately upon Purchaser's acceptance for payment
of such Shares, Purchaser is able to exercise full voting and other rights with
respect to such Shares (including voting at any meeting of stockholders then
scheduled or acting by written consent without a meeting).
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer, as well as the tendering stockholder's representation
and warranty that such stockholder has the full power and authority to tender
and assign the Shares tendered, as specified in the Letter of Transmittal.
Purchaser's acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering stockholder and Purchaser
upon the terms and subject to the conditions of the Offer.
Determination of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tendered Shares will be determined by Purchaser in its sole discretion,
which determination shall be final and binding on all parties. Purchaser
reserves the absolute right to reject any or all tenders of any Shares
determined by it not to be in proper form or the acceptance for payment of, or
payment for which may, in the opinion of Purchaser's counsel, be unlawful.
Purchaser also reserves the absolute right to waive any defect or irregularity
in any tender of Shares of any particular stockholder, whether or not similar
defects or irregularities are waived in the case of other stockholders. No
tender of Shares will be deemed to have been validly made until all defects and
irregularities relating thereto have been cured or waived. None of Purchaser,
Parent, the Depositary, the Dealer Manager, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or will incur any liability for failure to give any
such notification. Purchaser's interpretation of the terms and conditions of the
Offer in this regard (including the Letter of Transmittal and the Instructions
thereto) will be final and binding.
4. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn at any time after Monday, June 8, 1998 if they have
not previously been accepted for payment as provided in this Offer to Purchase.
If Purchaser extends the Offer, is delayed in its acceptance for payment of
Shares or is unable to accept Shares for payment pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may, nevertheless, on behalf of the Purchaser, retain tendered
Shares, and such Shares may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as described herein. Any such
delay will be an extension of the Offer to the extent required by law.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase. Any such notice
of withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn, contain a statement that such
stockholder is withdrawing all or a portion of its tender and the name of the
registered holder, if different from that of the person who tendered such
Shares. If Stock Certificates evidencing Shares to be withdrawn, have been
delivered to the Depositary or otherwise identified to the Depositary, a signed
notice of withdrawal with signatures guaranteed by an Eligible Institution
(except in the case of Shares tendered by an Eligible Institution), must be
submitted prior to the release of such Shares. In addition, such notice must
specify, in the case of Shares tendered by delivery of Stock Certificates, the
name of the registered holder (if different from that of the tendering
stockholder) and the serial numbers shown on the particular Stock Certificates
evidencing the Shares to be withdrawn, or, in the case of Shares tendered by
book-entry transfer as set forth in Section 3, the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares.
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Withdrawals may not be rescinded, and Shares withdrawn will thereafter be
deemed not validly tendered for purposes of the Offer. However, withdrawn Shares
may be retendered by again following one of the procedures described in Section
3 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination will be final and binding. None of Purchaser, Parent, the
Depositary, the Dealer Manager, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
5. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary addresses the material federal income tax
consequences to holders of Shares who sell their Shares in the Offer or the
Merger. The summary does not address all aspects of federal income taxation that
may be relevant to a particular holder of Shares and thus, for example, may not
be applicable to holders of Shares who are not citizens or residents of the
United States, who acquired their Shares pursuant to the exercise of
compensatory stock options, or who are entities that are otherwise subject to
special tax treatment under the Internal Revenue Code of 1986, as amended (the
"Code") (such as insurance companies, tax-exempt entities and regulated
investment companies); nor does this summary address the effect of any
applicable state, local, foreign, or other tax laws. The discussion assumes that
each holder of Shares holds such Shares as capital assets within the meaning of
Section 1221 of the Code. The federal income tax discussion set forth below is
included for general information only and is based upon present law. The precise
tax consequences of the Offer or the Merger will depend on the particular
circumstances of the holder. HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS
WITH RESPECT TO THE SPECIFIC FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX
CONSEQUENCES TO THEM OF THE PROPOSED TRANSACTION.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign tax laws. In general, a
holder who receives cash for Shares pursuant to the Offer or the Merger will
recognize gain or loss for federal income tax purposes equal to the difference
between the amount of cash received in exchange for the Shares and the holder's
adjusted tax basis in such Shares. In the case of a holder that is a
corporation, such gain or loss will be taxed at a maximum federal tax rate of
35%. In the case of a holder who is an individual, such gain or loss will be
capital gain or loss, and may be taxed at the maximum federal tax rate of 39.6%
(if the Shares were held by the holder for one year or less), 28% (if the Shares
were held by the holder for more than one year but not more than 18 months), or
20% (if the Shares were held by the holder for more than 18 months). The gain or
loss of an individual holder who is otherwise in the 15% federal tax bracket
will be taxed at the tax rate of 15% (if the Shares were held by the holder for
18 months or less) or 10% (if the Shares were held by the holder for more than
18 months). Legislation has been proposed in both the United States Senate and
the United States House of Representatives that would eliminate the 18-month
holding period and provide that the gain from the sale of capital assets held
for more than one year would in some cases be taxed at maximum rates different
from those set forth above, effective for taxable years beginning after December
31, 1997. It is not possible to predict whether or in what form any such
legislation may be enacted, or the effective date of such legislation if
enacted.
Amounts received in exchange for a holder's Shares pursuant to the Offer or
the Merger will not generally be subject to federal income tax withholding.
Withholding at the rate of 31% ("backup withholding"), however, will be required
if a holder fails to comply with certain reporting and certification
requirements. In order to prevent such backup withholding, each holder tendering
Shares pursuant to the Offer must provide the Depositary with such holder's
correct taxpayer identification number and certify that such holder is not
subject to backup withholding by completing and filing the Substitute Form W-9
included in the Letter of Transmittal (see Instruction 10 of the Letter of
Transmittal) or a Form W-9 with the Depositary prior to the time any payments
are made pursuant to the Offer. Certain stockholders (including, among others,
corporations and certain foreign persons) are not subject to backup withholding
provided they
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<PAGE> 12
establish their status when required to do so. If the holder is a nonresident
alien or foreign entity not subject to backup withholding, the holder must give
the Depositary a completed Form W-8, "Certificate of Foreign Status", prior to
the time any such payments are made.
A holder who does not sell Shares in the Offer or the Merger and who
exercises his or her dissenter's rights with respect to such Shares will
recognize capital gain or loss (and may recognize an amount of interest income)
attributable to any payment received pursuant to the exercise of such rights
based upon the principles described above. See Section 16.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS NOT INTENDED TO BE A SUBSTITUTE FOR CAREFUL TAX
PLANNING. MOREOVER, THE DISCUSSION IS BASED UPON PRESENT LAW AND IT IS
IMPOSSIBLE TO PREDICT THE EFFECT, IF ANY, THAT FUTURE LEGISLATION COULD HAVE ON
THE TAX CONSEQUENCES OF THE PROPOSED TRANSACTION. HOLDERS ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE
OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF THE
ALTERNATIVE MINIMUM TAX, AND STATE, LOCAL AND FOREIGN TAX LAWS.
6. PRICE RANGE OF SHARES; DIVIDENDS
The Shares are listed on the NYSE under the symbol "MNE". The following
table sets forth, for the indicated calendar periods, the reported high and low
prices of the Shares on the NYSE Composite Table. The Shares have been listed on
the NYSE since December 11, 1996.
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
1996:
First Quarter.......................................... N/A N/A
Second Quarter......................................... N/A N/A
Third Quarter.......................................... N/A N/A
Fourth Quarter(December 11 through December 31)........ $14.50 $13.25
1997:
First Quarter.......................................... $14.50 $ 6.875
Second Quarter......................................... $15.75 $ 8.375
Third Quarter.......................................... $18.625 $14.50
Fourth Quarter......................................... $17.875 $ 8.50
1998:
First Quarter (through March 31, 1998)................. $15.125 $10.375
Second Quarter (through April 9, 1998)................. $17.75 $15.25
</TABLE>
No dividends have been paid on the Shares in the past. Additionally, the
Merger Agreement prohibits the Company from declaring or paying any dividends
until the effectiveness of the Merger.
On February 23, 1998, the day that Parent submitted an initial indication
of interest to the Company, the last reported sales price on the NYSE was
$12.5625. On March 6, 1998, approximately one month prior to the public
announcement of the execution of the Merger Agreement, the last reported sales
price on the NYSE was $12.6250. On April 3, 1998, the last full trading day
prior to the announcement of the terms of the Merger Agreement, the last
reported sales price per Share on the NYSE was $15.5625. On April 9, 1998, the
last full trading day prior to the commencement of the Offer, the last reported
sales price per Share on the NYSE was $17.3125.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
10
<PAGE> 13
7. CERTAIN INFORMATION CONCERNING THE COMPANY
Except as otherwise set forth herein, the information concerning the
Company contained in this Offer to Purchase has been taken from or is based upon
publicly available documents on file with the Commission, other publicly
available information and information provided by the Company. Although neither
Purchaser nor Parent has any knowledge that would indicate that such information
is untrue, neither Purchaser nor Parent takes any responsibility for, or makes
any representation with respect to, the accuracy or completeness of such
information or for any failure by the Company to disclose events that may have
occurred that may affect the significance or accuracy of any such information
but which are unknown to Purchaser or Parent.
General. The Company is a Delaware corporation with its principal
executive office located at 7401 West Mansfield Avenue, Lakewood, Colorado
80235. The Company is a leading non-bank provider of consumer money wire
transfer services, with a strong, well-recognized brand-name. It offers
customers the ability to transfer funds quickly, reliably and conveniently
through its approximately 22,000 agent locations in 105 countries worldwide. The
Company targets its services to individuals without traditional banking
relationships, expatriates who send money to their country of origin,
traditional bank customers in need of emergency money transfer services,
tourists without local bank accounts and businesses that need rapid and
economical money transfer services. The Company also provides an express bill
payment service through many of its agent locations in the United States, and
recently began to offer money orders through a wholly owned subsidiary. The
number of agent locations has grown from approximately 18,500 in 1996 to
approximately 22,000 in March 1998. In each of 1996 and 1997, the Company
processed approximately 5.8 million transactions, and transferred $1.55 billion
and $1.57 billion principal amount of funds, respectively.
Available Information. The Company is subject to the informational
requirements of the Exchange Act, and in accordance therewith, is required to
file reports, proxy statements and other information with the Commission
relating to its business, financial condition and other matters. Information, as
of particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities and any material interest of such persons in transactions
with the Company is required to be described in periodic proxy statements
distributed to the Company's stockholders and filed with the Commission. Such
reports, proxy statements, and other information, including (i) the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (the
"Company 10-K") and (ii) the Company's Current Reports, on Form 8-K dated
December 24, 1997 (filed January 1, 1998) and January 8, 1998 (filed January 21,
1998 and amended on March 9, 1998), should be available for inspection and
copying at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should also be available for inspection at the Commission's regional offices
located at Seven World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material may also be obtained by mail, upon payment of the
Commission's customary fees, by writing to its principal office at 450 Fifth
Street, N.W., Washington D.C. 20549. The information should also be available
for inspection at the offices of the NYSE, 20 Broad Street, New York, New York
10005. The Commission also maintains an Internet site on the worldwide web at
http://www.sec.gov that contains reports and other information.
A copy of this Offer to Purchase, and certain of the agreements referred to
herein, are attached to Purchaser's Tender Offer Statement on Schedule 14D-1,
dated April 10, 1998 (the "Schedule 14D-1"), which has been filed with the
Commission. The Schedule 14D-1 and the exhibits thereto, along with such other
documents as may be filed by Purchaser with the Commission, may be examined and
copied from the offices of the Commission in the manner set forth above.
Certain Financial Information for the Company. The following table sets
forth selected financial data for the Company for 1997 and prior years,
presented on a carve-out basis for the transition of the business from an
operating subsidiary of Integrated Payment Systems, Inc. ("IPS") to a stand
alone public company and are derived from historical financial data of IPS
excerpted or derived from the audited financial statements contained in the
Company 10-K. The financial data includes allocations of operating and general
and administrative expenses to the Company from IPS. Such allocations do not
necessarily reflect the
11
<PAGE> 14
expenses that were or will be incurred by the Company operating as a stand-alone
entity. Management of the Company stated in the Company 10-K that it believed
that costs had been determined and allocated on a reasonable basis and all costs
attributable to conducting the business of the Company had been included in the
Company's financial statements. In the opinion of the Company's management, such
expenses were not materially affected by the Company operating as a stand-alone
entity. The selected financial data below should be read in conjunction with
"Management's Discussion and Analysis" and the financial statements appearing in
the Company 10-K. The financial and operating information for the years ended
December 31, 1993, and 1994 are derived from unaudited financial statements.
More comprehensive financial information is included in such reports and other
documents filed by the Company with the Commission, and the following summary is
qualified in its entirety by reference to such documents (which may be inspected
and obtained as described above), including the financial statements and related
notes contained therein. Neither Parent nor Purchaser assumes any responsibility
for the accuracy of the financial information set forth below.
MONEYGRAM PAYMENT SYSTEMS, INC.
SELECTED FINANCIAL AND OTHER DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Statement of Operating Data:
Revenues:
Fee and other.................... $113,637 $108,578 $ 94,242 $71,015 $48,815
Foreign exchange................. 27,274 29,141 42,826 20,373 3,070
-------- -------- -------- ------- -------
Total revenues.............. 140,911 137,719 137,068 91,388 51,885
Expenses:
Agent commissions and
amortization of agent contract
acquisition costs.............. 52,851 44,255 34,801(1) 28,742 22,112
Processing costs................. 26,702 23,930 24,542 15,334 12,361
Advertising and promotion........ 28,091 29,113 33,822 19,523 13,708
Selling, service and general and
administrative................. 25,457 16,745(2) 14,247(2) 8,378 6,900
-------- -------- -------- ------- -------
Total expenses.............. 133,101 114,043 107,412 71,977 55,081
Income (loss) before income taxes..... 7,810 23,676 29,656 19,411 (3,196)
Net income (loss)..................... $ 11,680 $ 14,631 $ 18,294 $12,176 $(2,077)
Basic net income (loss) per common
share(3)............................ $ .70 $ .88 $ 1.10 $ .73 $ (.12)
Diluted net income (loss) per common
share............................... $ .70 $ .88 $ 1.10 $ .73 $ (.12)
</TABLE>
- ---------------
(1) Net of a $2.5 million commission rebate from Banamex received by the Company
during the first quarter of 1995.
(2) Includes costs and expenses related to obtaining consents from Company
agents to permit the assignment of their agent contracts to the Company of
$375,000 in the fourth quarter of 1995 and $500,000 in 1996.
(3) Gives effect to the Company's issuance to IPS of 16,624,900 common shares
prior to the initial public offering completed on December 11, 1996.
12
<PAGE> 15
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data (at end of period):
Assets restricted to settlement of
Company transactions................ $14,040 $11,287 $26,010 $20,927 $12,827
Fixed assets at cost, net of
depreciation........................ 10,540 9,127 6,000 3,084 1,275
Cost of acquiring agent contracts, net
of amortization..................... 15,943 18,175 7,979 3,401 1,956
Total assets........................... 136,718 113,729 41,618 28,583 16,502
Total liabilities...................... 35,556 24,299 40,449 35,411 17,358
Stockholders' equity (deficit)......... 101,162 89,430 1,169 (6,828) (856)
Operating Data:
Number of Company agent locations (at
end of period)...................... 22.0 18.5 17.2 16.0 14.1
Number of transactions................. 5,867 5,781 5,393 3,285 2,040
</TABLE>
Projected and First Quarter 1998 Financial Information. In connection with
Parent's review of the Company and in the course of the negotiations described
in Section 10, the Company and its representatives provided Parent with certain
business and financial information which Parent and Purchaser believe is not
publicly available. This information included projections (the "Projections")
for the fiscal years ended December 31, 1998, 1999 and 2000, for revenues of
$164,780,000, $199,439,421 and $248,878,784, respectively, and for net income
for such periods of $13,663,000, $22,545,508 and $35,514,291, respectively. The
Projections also included forecasts for the four quarters ending March 31, June
30, September 30 and December 31, 1998 for revenues of $34,018,000, $40,073,000,
$44,158,000, and $46,531,000, respectively and for net income of $1,173,000,
$2,995,000, $4,403,000 and $5,092,000, respectively.
The information provided to Parent also included preliminary unaudited
information for the individual months ended January and February 1998 of
revenues of $10,867,000 and $11,070,000, respectively, and net income of
$303,000 and $368,000, respectively.
Parent expressed concern regarding the ability of the Company to achieve
the Projections, which generally were substantially higher than published
consensus analyst estimates for the Company, and informed the Company that it
disagreed with a number of its assumptions and did not believe that such
Projections could be achieved. Based on the historical performance of the
Company and the results of the Parent's due diligence (including its analysis of
the Company's preliminary unaudited results of operations for January and
February of 1998), Parent did not rely to any material degree upon the
Projections in performing its valuation analysis of the Company. Furthermore,
the Parent has been advised by the Company and Morgan Stanley that the Board did
not rely on the Projections in evaluating the Offer.
In evaluating the Company, Parent considered the Company's financial
condition, results of operations, business and prospects, including the
preliminary unaudited results of operations for January and February of 1998.
Additionally, the Parent considered the possibility that the Company's
relationship with one or more key agents were subject to uncertainty and that
the Company's relationships with its principal agent in its largest market is
subject to renewal in 2002. Parent also considered the future capital needs and
management resources necessary to effect the Company's systems reinvention to
achieve Year 2000 compliance and foreign currency functionality and the need to
execute promptly in order to timely introduce new products and avoid business
disruption.
The Parent also evaluated the Company's deferred tax asset and the impact
of amortization of existing and anticipated agent signing bonuses on the future
earnings and cash flows of the Company. Parent has also evaluated the potential
operating expense savings which could be realized with the combination of its
operations with the Company's. Parent has considered as part of its analysis the
Company's growth relative to the industry and trends in the markets in which it
competes (including trends in transaction volumes and pricing).
13
<PAGE> 16
THE COMPANY HAS ADVISED PARENT AND PURCHASER THAT THE PROJECTIONS WERE NOT
PREPARED WITH A VIEW TO PUBLIC DISCLOSURE OR COMPLIANCE WITH THE PUBLISHED
GUIDELINES OF THE COMMISSION OR THE GUIDELINES ESTABLISHED BY THE AMERICAN
INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING PROJECTIONS. THE PROJECTIONS
ARE INCLUDED IN THIS OFFER TO PURCHASE ONLY BECAUSE THEY WERE PROVIDED TO
PARENT. THEY WERE NOT PREPARED WITH A VIEW TO RELIANCE BY COMPANY STOCKHOLDERS
IN MAKING A DECISION IN CONNECTION WITH THE OFFER OR IN MAKING ANY OTHER
INVESTMENT DECISION. NONE OF PARENT, PURCHASER, THE COMPANY OR ANY OF THEIR
RESPECTIVE ADVISORS OR ANY OTHER PARTY WHO RECEIVED SUCH INFORMATION ASSUMES ANY
RESPONSIBILITY FOR THE VALIDITY, REASONABLENESS, ACCURACY OR COMPLETENESS OF THE
PROJECTIONS. ALTHOUGH PRESENTED WITH NUMERICAL SPECIFICITY, THE PROJECTIONS ARE
BASED UPON A VARIETY OF ASSUMPTIONS, ALL ESTABLISHED BY MANAGEMENT OF THE
COMPANY, RELATING TO THE BUSINESSES OF THE COMPANY, INDUSTRY PERFORMANCE,
GENERAL BUSINESS AND ECONOMIC CONDITIONS AND OTHER MATTERS, ALL OF WHICH MAY NOT
BE REALIZED AND ARE FORWARD LOOKING STATEMENTS AND ARE SUBJECT TO SIGNIFICANT
UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE CONTROL OF THE
COMPANY. THERE CAN BE NO ASSURANCE THAT THE PROJECTIONS SET FORTH ABOVE WILL BE
REALIZED, AND ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE SHOWN. THE
PROJECTIONS HAVE NOT BEEN EXAMINED OR COMPILED BY THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS.
FOR THESE REASONS, AS WELL AS THE BASES ON WHICH THE PROJECTIONS WERE
COMPILED, THERE CAN BE NO ASSURANCE THAT ACTUAL RESULTS WILL NOT DIFFER
MATERIALLY FROM THOSE ESTIMATED. THE INCLUSION OF THE PROJECTIONS HEREIN SHOULD
NOT BE REGARDED AS AN INDICATION THAT PARENT, PURCHASER, THE COMPANY, ANY OF
THEIR RESPECTIVE ADVISORS OR ANY OTHER PARTY WHO RECEIVED SUCH INFORMATION
CONSIDERS IT AN ACCURATE PREDICTION OF FUTURE EVENTS. PARENT PERFORMED AN
INDEPENDENT ASSESSMENT OF THE COMPANY'S VALUE AND DID NOT RELY UPON THE
PROJECTIONS. NONE OF THE COMPANY, PARENT, PURCHASER OR ANY OTHER PARTY HAS MADE,
OR MAKES, ANY REPRESENTATION TO ANY PERSON REGARDING THE INFORMATION CONTAINED
IN THE PROJECTIONS AND NONE OF THEM INTENDS PUBLICLY TO UPDATE OR OTHERWISE
PUBLICLY REVISE THE PROJECTIONS SET FORTH ABOVE EVEN IF EXPERIENCE OR FUTURE
CHANGES MAKE IT CLEAR THAT THE PROJECTIONS WILL NOT BE REALIZED.
Recent Developments
Options Plans. On April 6, 1998, Gotham Partners L.P. and certain
affiliates ("Gotham") became the beneficial owner of more than 25% of the
Shares. Amendment No. 3 to Gotham's Schedule 13D filed with the Commission on
April 8, 1998 alleges that the consideration to be paid to the Company's
stockholders in the Offer and Merger is inadequate. For a description of the
holdings of Shares by Gotham, see "Annex I -- Security Ownership of Certain
Beneficial Owners and Management" to Schedule 14D-9 prepared by the Company and
distributed to stockholders of the Company in conjunction with this Offer to
Purchase. Pursuant to the Company's 1996 Stock Option Plan (as adopted December
6, 1996) and the Company's 1996 Broad-Based Stock Option Plan (as adopted
December 6, 1996)(collectively, the "Plans"), the acquisition by a person of 25%
or more of the outstanding Shares constitutes a Change in Control (as defined
under the Plans). Upon a Change in Control, the Company is obligated to
immediately cancel all outstanding options and, within ten days of the Change in
Control, remit in cash to each option holder an amount equal to the number of
Shares then subject to such option, multiplied by the excess of (i) the greater
of (A) the highest per share price offered to stockholders of the Company in any
transaction whereby the Change in Control takes place or (B) the Fair Market
Value (as defined under the Plans) of a Share on the date of occurrence of the
Change in Control over (ii) the purchase price per share of Common Stock subject
to the option. The Company estimates that its payment obligation under the Plans
is approximately $6.0 million, which will be reflected as a pre-tax operating
charge to the Company's earnings, incurred in the second quarter of 1998.
Pending Litigation. Following the April 6, 1998, announcement of the
proposed acquisition of the Company by Parent and Purchaser, two putative class
action complaints ("Complaints") on behalf of stockholders of the Company were
filed in the Delaware Court of Chancery.
In Harbor Finance Partners v. James F. Calvano, et al. (Case No. 16306-NC),
the plaintiff is Harbor Finance Partners on behalf of itself and allegedly on
behalf of all others similarly situated. The defendants are the Company and the
directors and certain officers of the Company. Plaintiff alleges, among other
things, that the individual defendants have violated their fiduciary obligations
to the Company's stockholders and that the consideration to be paid to the
Company's stockholders in the Merger is inadequate. The relief sought by
14
<PAGE> 17
plaintiff includes, among other things, an injunction against consummation of
the proposed transactions or, alternatively, rescission and setting aside of
such transactions, damages in an unspecified amount, costs, attorneys' fees, and
such other relief as may be just and proper.
In TAAM Associates, Inc. v. James F. Calvano, et al. (Case No. 16305-NC),
the plaintiff is TAAM Associates, Inc. on behalf of itself and allegedly on
behalf of all others similarly situated. The defendants are the Company, the
directors and certain officers of the Company, and Parent. Plaintiff alleges,
among other things, that the individual defendants have violated their fiduciary
obligations to the Company's stockholders; that the consideration to be paid to
the Company's stockholders in the Merger is inadequate; and that Parent aided
and abetted such breaches of duty. The relief sought by plaintiff includes,
among other things, an injunction against consummation of the proposed
transactions or, alternatively, rescission and setting aside of such
transactions, damages in an unspecified amount, costs, attorneys' fees, and such
other relief as may be deems just and proper.
Copies of the Complaints, filed as exhibits 99(g)(1) and 99(g)(2) to the
Parent and Purchaser's Schedule 14D-1 filed in connection with this Offer, may
be obtained in the manner described in Section 8 and are incorporated herein by
reference.
Parent believes, and has been advised by the Company that it believes, the
allegations contained in both Complaints are meritless for the reasons set forth
elsewhere herein (see Section 10) and intends to defend both actions vigorously.
8. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT
General. Purchaser is a newly incorporated Delaware corporation organized
in connection with the Offer and the Merger and has not carried on any
activities other than in connection with the Offer and the Merger. The principal
offices of Purchaser are located in c/o Viad Corp, 1850 North Central Avenue,
Phoenix, Arizona 85077-2212. Purchaser is a wholly owned subsidiary of Parent.
Until immediately prior to the time that Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Merger. Because Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information regarding
Purchaser is available.
Parent is a Delaware corporation. Its executive offices are located at 1850
North Central Avenue, Phoenix, Arizona 85077-2410. Parent is comprised of
various operating companies and a division which conduct diversified service
businesses in payment services, airline catering, convention services, and
travel and leisure services. Parent operates nationally and internationally
through its Exhibitgroup/Giltspur division and through its various subsidiaries
which include Travelers Express Company, Inc. ("Travelers"), Dobbs International
Services, Inc., GES Exposition Services, Inc., Greyhound Leisure Services, Inc.,
Brewster Transport Company Limited and Restaura, Inc. It is the intention of
Parent that following the consummation of the Merger, the Company will operate
as a part of Travelers. Travelers and its subsidiaries operate the payment
services business of the Travel and Leisure and Payment Services segment of
Parent. See Section 12.
The name, citizenship, business address, principal occupation or
employment, and five-year employment history for each of the directors and
executive officers of Purchaser and Parent and certain other information are set
forth in Schedule I hereto.
Available Information. Parent is subject to the informational requirements
of the Exchange Act and, in accordance therewith, is required to file periodic
reports, proxy statements and other information with the Commission relating to
its business, financial condition and other matters. Information, as of
particular dates, concerning Parent's directors and officers, their
remuneration, stock options granted to them, the principal holders of Parent's
securities and any material interest of such persons in transactions with Parent
is required to be described in proxy statements distributed to Parent's
stockholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection and copying at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and should also be available for
inspection at the Commission's regional offices located at Seven World
15
<PAGE> 18
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
may also be obtained by mail, upon payment of the Commission's customary fees,
by writing to its principal office at 450 Fifth Street, N.W., Washington, D.C.
20549. The information should also be available for inspection at the NYSE, 20
Broad Street, New York, New York 10005. The Commission also maintains an
Internet site on the worldwide web at http://www.sec.gov that contains reports
and other information.
Certain Financial Information for Parent. Set forth below is a summary of
certain consolidated financial and operating data relating to Parent and its
consolidated subsidiaries derived from the information contained in or
incorporated by reference into Parent's Annual Report on Form 10-K for the year
ended December 31, 1997 filed with the Commission (the "Parent 10-K"). More
comprehensive financial information is included in or incorporated by reference
into the Parent 10-K and other documents filed by Parent with the Commission
(which Parent 10-K and other documents are hereby incorporated by reference
herein), and the financial information summary set forth below is qualified in
its entirety by reference to the Parent 10-K and such other documents and all
the financial information and related notes contained therein.
16
<PAGE> 19
VIAD CORP
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Operations:
Revenues(1)......................................... $ 2,417,470 $ 2,263,228 $1,976,745 $1,806,597 $1,337,940
=========== =========== ========== ========== ==========
Income from continuing operations(2)................ $ 97,794 $ 69,071 $ 70,781 $ 61,173 $ 31,975
Income (loss) from discontinued operations(3)....... (40,694) (73,465) 79,138 110,111
----------- ----------- ---------- ---------- ----------
Income (loss) before extraordinary charge and
cumulative effect of change in accounting
principle......................................... 97,794 28,377 (2,684) 140,311 142,086
Extraordinary charge for early retirement of debt... (8,458) (21,601)
Cumulative effect of change in accounting
principle(4)...................................... (13,875)
----------- ----------- ---------- ---------- ----------
Net income (loss)................................... $ 89,336 $ 28,377 $ (16,559) $ 140,311 $ 120,485
=========== =========== ========== ========== ==========
Diluted Income (Loss) per Common Share:(5)
Continuing operations(2)............................ $ 1.03 $ 0.74 $ 0.79 $ 0.69 $ 0.36
Discontinued operations(3).......................... (0.44) (0.83) 0.92 1.29
----------- ----------- ---------- ---------- ----------
Income (loss) per share before extraordinary charge
and cumulative effect of change in accounting
principle......................................... 1.03 0.30 (0.04) 1.61 1.65
Extraordinary charge................................ (0.09) (0.25)
Cumulative effect of change in accounting
principle(4)...................................... (0.16)
----------- ----------- ---------- ---------- ----------
Diluted net income (loss) per common share.......... $ 0.94 $ 0.30 $ (0.20) $ 1.61 $ 1.40
=========== =========== ========== ========== ==========
Average outstanding and potentially dilutive common
shares............................................ 93,786 91,339 88,479 86,507 85,331
=========== =========== ========== ========== ==========
Basic Income (Loss) per Common Share:(5)
Continuing operations(2)............................ $ 1.06 $ 0.76 $ 0.80 $ 0.71 $ 0.37
Discontinued operations(3).......................... (0.45) (0.84) 0.93 1.31
----------- ----------- ---------- ---------- ----------
Income (loss) per share before extraordinary charge
and cumulative effect of change in accounting
principle......................................... 1.06 0.31 (0.04) 1.64 1.68
Extraordinary charge................................ (0.09) (0.26)
Cumulative effect of change in accounting
principle(4)...................................... (0.16)
----------- ----------- ---------- ---------- ----------
Basic net income (loss) per common share............ $ 0.97 $ 0.31 $ (0.20) $ 1.64 $ 1.42
=========== =========== ========== ========== ==========
Average outstanding common shares................... 90,804 88,814 86,543 84,861 83,903
=========== =========== ========== ========== ==========
Dividends declared per common share(6)................ $ 0.32 $ 0.48 $ 0.62 $ 0.59 $ 0.56
=========== =========== ========== ========== ==========
Financial Position at Year-End:
Working capital (deficit), excluding payment service
obligations and current portion of payment service
assets(7,8)....................................... $ (92,309) $ (146,185) $ (183,318) $ (103,313) $ (2,188)
Payment service obligations......................... $ 2,248,004 $ 1,887,497 $1,747,624 $1,438,960 $1,147,063
Funds, agents' receivables and current maturities of
investments restricted for payment service
obligations, after eliminating $90,000 (1997,
1996, 1995), $80,000 (1994) and $65,000 (1993)
invested in Parent commercial paper(8)............ 630,141 704,640 804,227 661,252 533,019
----------- ----------- ---------- ---------- ----------
Excess of payment service obligations over current
portion of payment service assets(8).............. $(1,617,863) $(1,182,857) $ (943,397) $ (777,708) $ (614,044)
Investments restricted for payment service
obligations(9).................................... $ 1,615,464 $ 1,144,279 $ 880,035 $ 678,550 $ 506,560
Total assets, excluding intangibles................. $ 3,199,279 $ 2,912,686 $3,197,216 $2,782,624 $2,341,722
Total assets........................................ $ 3,730,313 $ 3,453,312 $3,716,548 $3,228,083 $2,699,283
Total debt(6)....................................... $ 410,140 $ 521,127 $ 889,291 $ 741,969 $ 629,829
$4.75 Redeemable preferred stock.................... $ 6,612 $ 6,604 $ 6,597 $ 6,590 $ 6,586
Common stock and other equity....................... $ 529,161 $ 432,218 $ 548,169 $ 555,093 $ 469,688
Other Data:
EBITDA(1,10)........................................ $ 266,100 $ 240,943 $ 218,737 $ 200,633 $ 152,191
Debt-to-capital ratio(11)........................... 43% 54% 61% 57% 56%
</TABLE>
- ---------------
(1) Parent's payment services subsidiary is investing increasing amounts in
tax-exempt securities. On a fully taxable equivalent basis, revenues and
EBITDA would be higher by $28,724,000, $21,489,000,
17
<PAGE> 20
$16,000,000, $7,897,000 and $3,967,000 for 1997, 1996, 1995, 1994 and 1993,
respectively.
(2) Includes a nonrecurring gain on the sale of Parent's interest in the
Phoenix Suns of $19,025,000, or $0.21 per diluted and basic share, and
nonrecurring spin-off costs and management transition expenses of
$28,985,000, or $0.32 per diluted and basic share, in 1996. Also includes a
nonrecurring gain of $2,260,000, or $0.03 per diluted and basic share, due
to the curtailment of certain postretirement medical benefits in 1995.
(3) See Notes A and E of Notes to Consolidated Financial Statements set forth
in the Parent's 10-K.
(4) Initial application of SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
(5) Income (loss) or share for all periods has been calculated in accordance
with the requirements of SFAS No. 128, "Earnings Per Share." Accordingly,
income (loss) per share amounts previously reported for prior periods have
been restated to conform with the requirements of SFAS No. 128.
(6) The declines in dividends declared per common share in 1997 and 1996, as
well as the decline in total debt and common stock and other equity in
1996, reflect the spin-off of The Dial Corporation to Parent's stockholders
on August 15, 1996. Parent's quarterly dividend decreased from $0.16 to
$0.08 per share following the spin-off. The Dial Corporation's initial
quarterly dividend of $0.08 per share after the spin-off maintained the
1995 annual dividend rate for stockholders who retained shares of both
companies following the spin-off.
(7) Parent maintains current assets at the lowest practicable levels while at
the same time taking advantage of payment terms offered by trade creditors.
Parent has adequate external financing sources available to fund working
capital requirements in the event cash flow from operations, trade accounts
receivable sales and proceeds from sales of non-core assets are not
sufficient. See also EBITDA in table above.
(8) Payment service assets held by Parent's payment services subsidiary are
restricted by state regulatory agencies to satisfy the liability to pay,
upon presentment, payment service obligations, and accordingly such assets
are not available to satisfy working capital or other financing
requirements of Parent.
(9) Represents long-term marketable securities held by Parent's payment
services subsidiary classified as non-current, which along with notes
receivable held by Parent's payment services subsidiary of approximately
$11,104,000, $20,398,000, $17,345,000, $19,351,000 and $56,940,000 in 1997,
1996, 1995, 1994 and 1993, respectively, classified as long-term assets
under the caption "Other investments and assets", are available to satisfy
payment service obligations.
(10) EBITDA is defined as income from continuing operations before interest
expense, income taxes, depreciation and amortization and the nonrecurring
items described above. EBITDA data are presented as a measure of the
ability to service debt, fund capital expenditures and finance growth. Such
data should not be considered an alternative to net income, operating
income, cash flows from operations or other operating or liquidity
performance measures prescribed by generally accepted accounting
principles. Cash expenditures for various long-term assets, interest
expense and income taxes have been, and will be, incurred which are not
reflected in the EBITDA presentations.
(11) Debt-to-capital is defined as total debt divided by capital. Capital is
defined as total debt plus minority interests, preferred stock and common
stock and other equity.
Parent beneficially owns no Shares. Except as described in this Offer to
Purchaser, (i) none of Purchaser, Parent nor, to the best knowledge of Purchaser
and Parent, any of the persons listed in Schedule I to this Offer to Purchase or
any associate or majority-owned subsidiary of Purchaser, Parent or any of the
persons so listed beneficially owns or has any right to acquire, directly or
indirectly, any Shares and (ii) none of Purchaser, Parent nor, to the best
knowledge of Purchaser and Parent, any of the persons or entities referred to
above nor any director, executive officer or subsidiary of any of the foregoing
has effected any transaction in the Shares during the past 60 days.
Except as provided in the Merger Agreement and as otherwise described in
this Offer to Purchase, none of Purchaser, Parent nor, to the best knowledge of
Purchaser and Parent, any of the persons listed in Schedule I to this Offer to
Purchase, has any contract, arrangement, understanding or relationship with any
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other person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or voting of such securities, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guaranties of loans, guaranties against
loss guarantees of profits, division of profits or loss or the giving or
withholding of proxies. Except as set forth in this Offer to Purchase, since
January 1, 1995, neither Purchaser nor Parent nor, to the best knowledge of
Purchaser and Parent, any of the persons listed on Schedule I hereto, has had
any business relationship or transaction with the Company or any of its
executive officers, directors or affiliates that is required to be reported
under the rules and regulations of the Commission applicable to the Offer.
Except as set forth in this Offer to Purchase, since January 1, 1995, there have
been no contacts, negotiations or transactions between any of Purchaser, Parent,
or any of their respective subsidiaries or, to the best knowledge of Purchaser
and Parent, any of the persons listed in Schedule I to this Offer to Purchase,
on the one hand, and the Company or its affiliates, on the other hand,
concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.
9. SOURCES AND AMOUNTS OF FUNDS
Purchaser estimates that the total amount of funds required to purchase the
number of Shares that are outstanding pursuant to the Offer, and to pay fees and
expenses related to the Offer and the Merger will be approximately $300 million.
Purchaser plans to obtain all funds needed for the Offer through capital
contributions, which will be made by Parent to Purchaser at the time Shares
tendered pursuant to the Offer are accepted for payment and in connection with
the payment of Merger Consideration. Parent currently intends to obtain the
funds necessary to make the capital contributions from available cash, and from
some combination of borrowings (currently estimated to be $255 million) under
the $300 million long-term revolving bank credit facility available under the
Credit Agreement (as defined below), all of which is available as of the date of
this filing, uncommitted bank money market loans, or under such other financing
resources available to Parent.
The material terms of the Amended and Restated Credit Agreement, dated July
24, 1996, as amended by that First Amendment dated as of August 1, 1997 (the
"First Amendment"), and as further amended by that Second Amendment dated as of
September 11, 1997 (the "Second Amendment") (the Amended and Restated Credit
Agreement, the First Amendment, and the Second Amendment are collectively
referred to as the "Credit Agreement"), with Citicorp USA, Inc. (as
"Administrative Agent"), Bank of America National Trust and Savings Association
(as "Documentation Agent"), and a syndicate of financial institutions (such
financial institutions, the "Lenders") are generally summarized below.
The obligation of the Lenders to fund advances under the Credit Agreement
is subject to customary conditions, including, among other things, (i) that each
of the representations and warranties made by Parent in the Credit Agreement is
true and correct on each funding date, before and after giving effect to the
advance and to the application of the proceeds from the advance, and (ii) that
no event has occurred and is continuing, or would result from such advance or
from the application of the proceeds of the advance, which would constitute an
event of default or a potential event of default, as defined in the Credit
Agreement. The term of the Credit Agreement expires on August 15, 2002.
Borrowings under the Credit Agreement bear interest at either a fluctuating
base rate or an adjusted eurodollar rate based on Parent's credit rating. Based
on current interest rates, Parent anticipates that its effective borrowing cost
would be approximately 6%.
Borrowings under the Credit Agreement are subject to mandatory prepayment
upon the occurrence of any of the following events: (i) any person or group of
persons acting in concert acquires beneficial ownership of more than 40% of
Parent's voting stock; (ii) during any period of up to 12 months, individuals
who at the beginning of such period were directors of Parent shall cease to
constitute a majority of Parent's Board of Directors; or (iii) any outstanding
debt of Parent or any of its subsidiaries (exclusive of debt under the Credit
Agreement) in the aggregate amount of at least $15.0 million shall be required
to be prepaid prior to the stated maturity thereof.
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The Credit Agreement contains financial covenants relating to the
maintenance of consolidated net worth. The Credit Agreement also contains
restrictive covenants pertaining to the management and operation of Parent and
its subsidiaries. The covenants include, among others, limitations on liens,
mergers and sales, leases or other dispositions of assets, pension plan changes,
margin stock, debt ratios and interest rate swaps.
The Credit Agreement provides for events of default customary in similar
credit facilities, including, among others, (i) failure to make a payment of
principal when due or failure to make a payment of interest within five days of
the date due; (ii) breach of representations or warranties in any material
respect when made; (iii) failure to observe or perform any term, covenant or
agreement contained in the Credit Agreement; (iv) default under any agreement
relating to debt for borrowed money in excess of $15.0 million in the aggregate;
(v) bankruptcy defaults; (vi) failure to pay judgments in excess of $25.0
million; and (vii) the occurrence of an ERISA Event, as defined in the Credit
Agreement.
The foregoing summary description of the Credit Agreement does not purport
to be complete and is qualified in its entirety by reference to the copy of the
Credit Agreement (including the Amended and Restated Agreement, the First
Amendment and the Second Amendment) filed as Exhibits (b)(1)(a), (b)(1)(b) and
(b)(1)(c), respectively, to Schedule 14D-1, a copy of which may be obtained from
the offices of the Commission in the manner set forth with respect to
information concerning Parent in Section 8.
It is anticipated that the indebtedness incurred through borrowings under
the Credit Agreement will be repaid by Parent from time to time from funds
generated internally by Parent and its subsidiaries, including the Surviving
Corporation, from the proceeds of other borrowings, through the public or
private sale of debt or equity securities, through application of proceeds of
dispositions, or through a combination of two or more such sources.
No final decisions have been made by Parent concerning the specific source
of funds to be used for purchase of the Shares or the method of repayment of any
such indebtedness; however, the Offer is not conditioned on obtaining financing.
Such decisions, when made, will be based on Parent's review from time to time of
the advisability of particular actions, as well as prevailing interest rates and
financial and other economic conditions.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY
The acquisition of complementary businesses is an important element of the
overall business strategy of Parent. Parent regularly evaluates potential
acquisition opportunities in the industries in which Parent competes. Because of
(i) the overlap of the agent distribution channel, (ii) operational similarities
and (iii) similarities of the end consumers, Parent views the wire transfer
market as an attractive complementary market segment for Travelers, which is a
leading provider of money orders and other payment services. Accordingly,
Parent, together with Travelers, periodically reviews acquisition or new product
development opportunities in the wire transfer market. In 1995, First Data
Corporation ("First Data"), the former parent of the Company, agreed to divest
itself of its controlling interest in Company in order to resolve FTC objections
to a merger between First Data and First Financial Management Corp., the former
parent of Western Union Financial Services, Inc. As part of that process, in
1996, Travelers, through its investment bankers, Salomon, contacted First Data
about the possibility of acquiring the Company. However, discussions did not
proceed beyond preliminary stages and Travelers did not submit a bid at that
time.
In December 1996, the Company was divested by First Data through an initial
public offering of the Company's stock at a price of $12.00 per share. Travelers
continued to monitor the performance and operations of the Company and the
possibility of an acquisition.
During the summer and continuing into the fall of 1997, the Company was
approached by, and held preliminary discussions with, a potential strategic
partner who signed a confidentiality agreement and conducted both business and
financial due diligence. However, agreement on valuation was not reached and a
formal written proposal was never made. Also during the fall of 1997, the
Company had preliminary discussions with one other potential strategic partner
who signed a confidentiality agreement but did not conduct diligence to further
pursue discussions.
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In December 1997, Parent directed its financial advisor, Salomon, to
contact the Company's Chief Executive Officer, James F. Calvano, regarding a
potential merger of the Company with Travelers. On December 23, 1997, Robert H.
Bohannon, Chairman, President and Chief Executive Officer of Parent, met with
Mr. Calvano near his home in Florida. Mr. Bohannon and Mr. Calvano discussed
several topics, including the rationale for a transaction. Mr. Calvano agreed to
present the potential for a transaction to the Board of Directors of the Company
and to contact Mr. Bohannon after determining the level of interest of the
Board. Also, during this time frame, two additional parties contacted Mr.
Calvano to express interest in a transaction with the Company.
In the first week of January 1998, Mr. Calvano contacted each member of the
Board of Directors of the Company regarding the interest of Parent and other
parties in pursuing a strategic transaction. Each member of the Board agreed
that Mr. Calvano should investigate strategic opportunities and retain a
financial advisor.
In early January, the senior management of the Company met with
representatives from Morgan Stanley to discuss overall strategic alternatives,
valuation, recommended sales process and potential buyers for the Company.
Morgan Stanley recommended that the Company begin a formal sale process.
On January 23, 1998, representatives of the Company's management and
representatives of Morgan Stanley initiated a formal sale process. Morgan
Stanley then contacted potential strategic and financial buyers to solicit
interest in the Company. A total of 18 potential buyers, including Travelers and
the four other potential buyers referred to above, were contacted.
Confidentiality agreements were executed between the Company and four interested
parties (in addition to the two parties that executed confidentiality agreements
in 1997). One additional party that had expressed interest did not sign a
confidentiality agreement.
On February 6, 1998, members of one potential buyer's management met with
the Company's management and representatives from Morgan Stanley in the
Company's New Jersey offices. At that meeting, management of the Company
presented a detailed overview of the Company and responded to questions.
On February 10, 1998, the Board of Directors of the Company held its
regular meeting at the Company's New Jersey offices. Representatives of Shearman
& Sterling, counsel to the Company, discussed the Board's fiduciary duties and
the potential transaction structures available to the Company. Morgan Stanley
updated the Board on the status of the sale process, interested potential
parties and the valuation of the Company.
On February 11, 1998, members of Parent's and Travelers' management,
together with representatives from Salomon, met with Company's management and
representatives from Morgan Stanley at the offices of Morgan Stanley in New
York. At that meeting, the Company presented a detailed overview of the Company
and responded to questions.
During the week of February 13, 1998, representatives of the Company and
representatives of Morgan Stanley, met with two additional potential bidders at
the offices of Morgan Stanley in New York. At those meetings, the Company
presented a detailed overview of the Company and responded to questions.
On February 23, 1998, Morgan Stanley received, on behalf of the Company,
letters from Parent and only one of the other potential buyers who had attended
a management presentation indicating interest in the Company. Parent's letter
outlined Parent's interest in acquiring 100% of the equity of the Company at a
price of $16.00 per Share. The Parent's proposal was not subject to a financing
contingency. The other potential buyer's proposal indicated a price range of
$15.00 - $17.00 per Share but was subject to further due diligence and to a
contingency for obtaining acquisition financing. Both parties were invited to
conduct further due diligence.
On March 4, 1998, members of Travelers' management team and representatives
from Salomon conducted due diligence with members of the Company's management in
the Company's Colorado offices. This due diligence meeting focused on the
operational aspects of Company's business and included meetings with the
Company's management team.
On March 6, 1998, representatives from Morgan Stanley and Shearman &
Sterling participated in a conference call with the Company's senior management
to discuss the status of the sale process and
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<PAGE> 24
recommend a course of action to further negotiations and secure formal proposals
from the two interested parties.
On March 9 and 10, 1998, representatives from Parent, Travelers, Salomon,
as well as representatives from Parent's counsel, Bryan Cave LLP ("Bryan Cave"),
conducted further due diligence at the offices of Shearman & Sterling in New
York. These due diligence sessions included a review of financial and
operational documents, as well as additional interviews with the senior
management group of the Company. On March 13, 1998, the Company's senior
management and systems experts participated in a conference call with Travelers'
management and information systems experts to discuss systems issues.
On March 16, 1998, representatives of the other bidder conducted due
diligence at the offices of Shearman & Sterling in New York. In addition,
representatives from Morgan Stanley met with such representatives from the other
potential buyer at the Company's New Jersey offices to discuss the potential for
a transaction. At such meeting, Morgan Stanley expressed concern about the
ability of such potential buyer to obtain financing but invited it to continue
due diligence and submit a formal proposal. No such proposal was ever made.
On March 19, 1998, representatives of the Company, Parent and Travelers
participated in an additional conference call to continue the due diligence
process and address follow-up issues regarding the Company's systems, including
Year 2000 compliance contingencies.
On March 23, 1998, Parent's Board of Directors and its Executive Committee
held telephonic meetings to discuss a potential transaction with the Company.
All members of the Executive Committee and Board were in attendance. The
Parent's Board and its Executive Committee received presentations from
Travelers' management as to the status of discussions with Company, the results
of the due diligence evaluation of Company, the principal terms of the proposed
transaction, including several terms that were yet to be resolved, and the
merits of the transaction. The Parent Board unanimously approved the
transaction, subject to resolution of several key issues.
During this time, the Company was again contacted by one of the potential
strategic buyers with whom preliminary discussions had been held previously but
who did not sign a Confidentiality Agreement or submit an indication of interest
on February 23. However, such potential buyer was unable to satisfactorily
address the Company's concern that its acquisition of the Company could not be
consummated due to the likelihood of opposition by federal antitrust regulators.
On March 24, 1998, Parent reiterated its original proposal to purchase all
outstanding Shares at $16.00 per Share in cash and through its counsel, Bryan
Cave, provided proposed changes to the draft merger agreement that had been
previously provided by the Company's legal counsel to Parent. At the Company's
request, Morgan Stanley rejected the Parent's proposal but suggested that the
two parties continue discussions. On March 26, 1998, senior management of the
Company and Morgan Stanley participated in a conference call with
representatives of Parent, Travelers, and Salomon to discuss Parent's business
assumptions regarding the Company. Based on these discussions, Morgan Stanley
suggested that Parent increase its proposal.
During the weekend of March 28, 1998, Parent raised its proposal to $17.00
per Share.
On March 30 and 31, 1998, representatives from Company, Morgan Stanley and
Shearman & Sterling analyzed and discussed Parent's revised proposal as well as
the status of negotiations with the remaining potential buyers. Based on the
Parent's ability to consummate the transaction quickly with the proposed terms
and other relevant criteria, the Company chose to continue to pursue discussions
with Parent.
On April 2 and 3, 1998, representatives from Parent, Travelers, Salomon and
Bryan Cave, met with representatives from the Company, Shearman & Sterling and
Morgan Stanley at Shearman & Sterling's offices in New York for further due
diligence and to continue negotiations concerning the terms and conditions of a
proposed merger agreement.
On April 4, 1998, the Board of the Company held a special meeting to
review, with the advice and assistance of the Company's financial and legal
advisors, the proposed terms and conditions of the proposed
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transaction. All members of the Board participated either in person or by
telephone. At such meeting, Morgan Stanley provided an oral and a written
opinion that, as of such date and based upon and subject to the matters
discussed with the Board of the Company and contained in such written opinion,
the cash consideration to be received by the holders of the Shares in the Offer
and the Merger was fair from a financial point of view to such holders. Shearman
& Sterling reviewed the Board's fiduciary duties to shareholders and outlined
the principal terms of the Offer and the Merger. The Board then unanimously
determined that the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger, are fair to and in the best interests of the
Company's stockholders, and approved the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger and authorized the
execution and delivery of the Merger Agreement, recommended that the Company's
stockholders accept the Offer and tender their Shares pursuant to the Offer, and
recommended that the Company's stockholders approve and adopt the Merger
Agreement.
Following approval by the Boards of Directors of the Company, the Parent
and the Purchaser, the Merger Agreement was executed and delivered on April 4,
1998. The transaction was publicly announced through a joint press release
before the opening of the financial markets in the United States on April 6,
1998.
Purchaser commenced the Offer on April 10, 1998.
11. THE OFFER AND MERGER; MERGER AGREEMENT
The following is a summary of the Merger Agreement, a copy of which is
filed as an Exhibit to the Schedule 14D-1 filed by Purchaser and Parent with the
Commission in connection with the Offer. Such summary does not purport to be
complete and is qualified in its entirety by reference to the Merger Agreement.
Capitalized terms used in this Section 11, Section 12 and Section 15 but not
otherwise defined shall have the meanings ascribed to them in the Merger
Agreement.
The Offer. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, Purchaser will commence the Offer as promptly as
reasonably practicable, but in no event later than five business days after the
initial public announcement of Purchaser's intention to commence the Offer. The
obligation of Purchaser to accept for payment Shares tendered pursuant to the
Offer is subject to the satisfaction of the Minimum Condition and certain other
conditions that are described in Section 15 hereof. Purchaser and Parent have
agreed that no change in the Offer may be made which waives the Minimum
Condition, and no change may be made which decreases the price per Share payable
in the Offer, reduces the maximum number of Shares to be purchased in the Offer
or which imposes conditions to the Offer in addition to those set forth in
Section 15 of this Offer to Purchase without the prior consent of the Company.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, and in accordance with Delaware Law, at the Effective
Time, Purchaser shall be merged with and into the Company. As a result of the
Merger, the separate corporate existence of Purchaser will cease and the Company
will continue as the Surviving Corporation of the Merger. At the Effective Time,
by virtue of the Merger and without any action on the part of the Purchaser, the
Company or holders of any Shares, (a) each Share issued and outstanding
immediately prior to the Effective Time (other than any Shares held in the
treasury of the Company, or owned by Purchaser, Parent or any direct or indirect
wholly owned subsidiary of Parent or of the Company and any Shares which are
held by stockholders who have not voted in favor of the Merger or consented
thereto in writing and who shall have demanded properly in writing appraisal for
such Shares in accordance with Delaware Law) shall be cancelled and shall be
converted automatically into the right to receive $17.00 in cash (the "Merger
Consideration") payable, after reduction for any required Tax withholding,
without interest, to the holder of such Share, upon surrender, in the manner
provided in the Letter of Transmittal, of the certificate that formerly
evidenced such Share; (b) each Share held in the treasury of the Company and
each Share owned by Purchaser, Parent or any direct or indirect wholly owned
Subsidiary of Parent or the Company immediately prior to the Effective Time
shall be cancelled without any conversion thereof and no payment or distribution
will be made with respect thereto; and (c) each share of common stock, par value
$.01 per share, of Purchaser issued and outstanding immediately prior to the
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Effective Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of common stock, par value $.01 per share, of
the Surviving Corporation.
The Merger Agreement provides that the directors and officers of Purchaser
immediately prior to the Effective Time will be the initial directors and
officers of the Surviving Corporation each to hold office in accordance with the
Certificate of Incorporation and By-laws of the Surviving Corporation, in each
case until their respective successors are duly elected or appointed and
qualified. The Merger Agreement provides that, at the Effective Time, the
Certificate of Incorporation of the Company restated in a form acceptable to
Purchaser will be the Certificate of Incorporation of the Surviving Corporation;
provided, however, that such restated Certificate of Incorporation will contain
provisions in accordance with the Directors' and Officers' Indemnification and
Insurance provision of the Merger Agreement. The Merger Agreement also provides
that the By-laws of Purchaser, as in effect immediately prior to the Effective
Time, will be the By-laws of the Surviving Corporation.
The Merger Agreement provides that each Company Stock Option outstanding at
the Effective Time under the Company Stock Option Plans shall be canceled by the
Company immediately prior to the Effective Time, and each holder of a canceled
Company Stock Option shall be entitled to receive at the Effective Time or as
soon as practicable thereafter from the Company in consideration for the
cancellation of such Company Stock Options an amount equal to the product of (i)
the number of Shares previously subject to such Company Stock Option and (ii)
the excess, if any, of the per share amount over the exercise price per share of
Company Common Stock previously subject to such Company Stock Option, which
shall be paid in cash, after reduction for applicable tax withholding. The
Merger Agreement also provides that the Company Stock Option Plans shall
terminate upon the Effective Time.
The Merger Agreement provides that notwithstanding any provision of the
Merger Agreement to the contrary, Shares that are outstanding immediately prior
to the Effective Time and which are held by stockholders who shall have not
voted in favor of the Merger or consented thereto in writing and who shall have
demanded properly in writing appraisal for such Shares in accordance with
Section 262 of the Delaware Law shall not be converted into or represent the
right to receive the Merger Consideration. Such stockholders shall be entitled
to receive payment of the appraised value of such Shares held by them in
accordance with the provisions of such Section 262, except that all Dissenting
Shares held by stockholders who shall have failed to perfect or who effectively
shall have withdrawn or lost their rights to appraisal of such Shares under such
Section 262 shall thereupon be deemed to have been converted into and to have
become exchangeable for, as of the Effective Time, the right to receive the
Merger Consideration, without any interest thereon, upon surrender, in the
manner provided in the Merger Agreement, of the certificate or certificates that
formerly evidenced the Shares.
Agreements of Parent, Purchaser and the Company. Pursuant to the Merger
Agreement, the Company shall, if required by applicable law in order to
consummate the Merger, (i) duly call, give notice of, convene and hold an annual
or special meeting of its stockholders as soon as practicable following
consummation of the Offer for the purpose of considering and taking action on
the Merger Agreement and the transactions contemplated thereby (the
"Stockholders' Meeting"); and (ii) subject to its fiduciary duties under
applicable law after receiving the advice of independent counsel, (A) include in
the proxy statement for such meeting sent to stockholders (the "Proxy
Statement") the recommendation of the Board that the stockholders of the Company
approve and adopt the Merger Agreement and the transactions contemplated thereby
and (B) use all reasonable efforts to obtain such approval and adoption. At the
Stockholders' Meeting, Parent and Purchaser will cause all Shares owned by them
and their Subsidiaries to be voted in favor of the approval and adoption of the
Merger Agreement and the transactions contemplated thereby.
The Merger Agreement provides that, notwithstanding the preceding
paragraph, in the event that Purchaser acquires at least 90% of the then
outstanding Shares, subject to certain conditions, Parent, Purchaser and the
Company agree, at the request of Purchaser, to take all necessary and
appropriate action to cause the Merger to become effective in accordance with
Section 263 of Delaware Law, as soon as reasonably practicable after such
acquisition, without a meeting of the Company's stockholders, in accordance with
Delaware Law.
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The Merger Agreement provides that the Company will, if required by
applicable law, as soon as practicable following consummation of the Offer, file
an information or proxy statement (the "Proxy Statement") with the Commission
under the Exchange Act, and use all reasonable efforts to have the Proxy
Statement cleared by the Commission. Parent, Purchaser and the Company will
cooperate with each other in the preparation of the Proxy Statement, and the
Company will notify Parent of the receipt of any comments of the Commission with
respect to the Proxy Statement and of any requests by the Commission for any
amendment or supplement thereto or for additional information and shall provide
to Parent promptly copies of all correspondence between the Company or any
representative of the Company and the Commission. The Company will (i) give
Parent and its counsel the opportunity to review the Proxy Statement prior to
its being filed with the Commission; (ii) give Parent and its counsel the
opportunity to review all amendments and supplements to the Proxy Statement and
all responses to requests for additional information and replies to comments
prior to their being filed with, or sent to, the Commission; and (iii) consider
in good faith the comments and information provided by Parent, Purchaser and
their counsel with respect thereto. Each of the Company, Parent and Purchaser
agreed to use all reasonable efforts, after consultation with the other parties,
to respond promptly to all such comments of and requests by the Commission and
to cause the Proxy Statement and all required amendments and supplements thereto
to be mailed to the holders of Shares entitled to vote at the Stockholders'
Meeting at the earliest practicable time.
The Merger Agreement provides that except as contemplated therein, neither
the Company nor any Subsidiary shall, between the date of the Merger Agreement
and the Effective Time, directly or indirectly do, or propose to do, any of the
following, without the prior written consent of Parent: (a) amend or otherwise
change its Certificate of Incorporation or By-laws or equivalent organizational
documents; (b) issue, sell, pledge, dispose of, grant, encumber or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of (i) any shares of
capital stock of any class of the Company or any Subsidiary, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest (including,
without limitation, any phantom interest), of the Company or any Subsidiary
(except for the issuance of a maximum of 1,180,625 Shares issuable pursuant to
employee stock options outstanding on the date of the Merger Agreement) or (ii)
any assets of the Company or any Subsidiary except in the ordinary course of
business consistent with past practice; (c) declare, set aside, make or pay any
dividend or other distribution, payable in cash, stock, property or otherwise,
with respect to any of its capital stock; (d) reclassify, combine, split,
subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any
of its capital stock; (e) form any new Subsidiaries or implement the formation
of a holding company or expend any funds in preparation for any corporate
restructuring (including, but not limited to, the formation of a holding company
or the merger of any Subsidiary with and into the Company); (f) (i) acquire
(including, without limitation, by merger, consolidation or acquisition of stock
or assets) any corporation, partnership, other business organization or any
division thereof or any material amount of assets; (ii) except for borrowings
under existing credit facilities in the ordinary course of business, incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become responsible for,
the obligations of any person or, except as permitted pursuant to paragraph (j)
below, or the posting of letters of credit required by licensing or regulatory
authorities in the ordinary course of business, make any loans or advances; (g)
authorize capital expenditures in excess of the amount set forth on the Merger
Agreement; provided, however, that (i) before making any expenditures for the
Coleman Bennet Multi-Currency Project, the Company will involve Purchaser in the
selection of a consultant and will not expend in excess of $5,500,000 for a
systems software package or $150,000 in consulting fees payable to Coleman
Bennett, without the consent of Purchaser and (ii) the Company will not make any
expenditures for new software or hardware for the Future System/Year 2000
Project prior to June 1, 1998, but the Company may incur consulting and similar
fees not to exceed $500,000 in aggregate prior to such date and (iii) the
Company will not make any capital expenditures other than as set forth in
clauses (g)(i) and (g)(ii) in excess of $4,000,000 in the aggregate without the
prior consent of Purchaser; or (iv) enter into or amend any contract, agreement,
commitment or arrangement with respect to any matter set forth in therein; (h)
other than as set forth in the Merger Agreement, increase the compensation
payable or to become payable to its officers or employees, except for increases
in accordance with past practices in salaries or wages of employees of the
Company or any Subsidiary who are not officers of the Company, or, other than in
accordance with
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existing policies, grant any severance or termination pay to, or enter into any
employment or severance agreement with any director, officer or other employee
of the Company or any Subsidiary, or establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director, officer or employee; (i) other
than as required by generally accepted accounting principles and except for the
reclassification of the financial paper outstanding from fiduciary liability to
operating liability on the balance sheet, make any material change to its
accounting policies or procedures; (j) (i) make any advances to agents or, other
than potential contractual arrangements with American Express, enter into any
agreement with any agent that guarantees or assures payment of minimum aggregate
commissions or which grants any signing or other bonus in an amount in excess of
$1,500,000 in the aggregate; or (ii) enter into any agreement which would
increase the period of time during which any agent retains the proceeds of money
order or wire transfer sales prior to remitting such proceeds to the Company
provided, however, notwithstanding any other provision of Section 5.01 of the
Merger Agreement, the Company may enter into a contract with American Express
Travel Related Services, Inc. ("American Express") containing terms
substantially similar to those in a specified form of draft contract previously
provided to the Purchaser if such contract does not contain any provision that
would confer upon American Express any right of termination, amendment,
acceleration, cancellation or withholding of services or payments upon the
consummation of the Offer or the Merger or any other transaction contemplated
under the Merger Agreement (a "Transaction"); (k) enter into or amend any
agreement with any agent, with respect to which the aggregate credit exposure
(measured as actual agent remittances due on any one Business Day) is greater
than $500,000; (l) establish any new lines of credit or other credit facilities
or replace existing credit facilities with facilities that have terms that are
less favorable to the Company; (m) pay, settle, discharge or enter into any
agreement for the settlement or compromise of any pending or threatened
litigation requiring payment(s) by the Company or any Subsidiary in excess of
$1,000,000 in the aggregate; (n) agree in writing, or otherwise, to take any of
the foregoing actions or to any other action which would make any representation
or warranty of the Company in the Merger Agreement untrue or incorrect in any
material respect; or (o) make any tax election or settle or compromise any
material federal, state local or foreign income tax liability.
Also pursuant to the Merger Agreement, after the date thereof and prior to
the Effective Time or the earlier termination of this Agreement, unless Parent
shall otherwise agree in writing, the Company covenanted and agreed that it
will, and cause each of its Subsidiaries to: (a) conduct their respective
businesses in the ordinary and usual course of business consistent with past
practice; (b) confer with Parent's designated representatives on a regular and
frequent basis regarding operational matters of a material nature and the
general status of the ongoing business of the Company; (c) promptly notify
Parent of any significant changes in the business, financial condition or
results of operation of the Company or its Subsidiaries taken as a whole; (d)
promptly notify Parent of any judgment, decree, injunction, rule, notice or
order of any Governmental Authority (as defined below) which is reasonably
likely to materially restrict the business of the Company and its Subsidiaries
as currently conducted or is reasonably likely to have a Material Adverse Effect
(as defined below); (e) maintain or renew with financially responsible insurance
companies, (i) insurance on its tangible assets and its business in such amounts
and against such risks and losses as are consistent with past practice and (ii)
the Company's existing directors and officers indemnification insurance; and (f)
use all reasonable best efforts to preserve the business, reputation and
prospects of the Company and the Subsidiaries and preserve the current relations
of the Company and its Subsidiaries with customers, employees, agents, suppliers
and other persons with which the Company or its Subsidiaries has business
relations.
The Merger Agreement defines "Governmental Authority" as any agent,
instrumentality, department, commission, court, tribunal or board of any
government, whether foreign or domestic and whether national, federal, state,
provincial or local.
The Merger Agreement defines "Material Adverse Effect" as any change,
effect, condition, event or circumstance that is or is reasonably likely to be
materially adverse to the business, financial condition, assets, properties or
results of operations of the Company and the Subsidiaries, taken as a whole,
including, (x) termination of the Company's Agency Agreement with Banamex or (y)
termination of the Company's
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agency agreements with agents (other than American Express Travel Related
Services Company, Inc. ("American Express") and Safeway, Inc.), representing ten
percent or more of the aggregate send or receive transaction volume either sent
or received by the Company and its Subsidiaries during 1997; provided, however,
that "Material Adverse Effect" shall not include any change, effect, condition,
event or circumstance arising out of or attributable to (i) any decrease in the
market price of the Shares (but not any change, effect, condition, event or
circumstance underlying such decrease to the extent that it would otherwise
constitute a Material Adverse Effect), (ii) changes, effects, conditions, events
or circumstances that generally affect the industries in which the Company
operates (including legal and regulatory changes), (iii) general economic
conditions or change, effects, conditions or circumstances affecting the
securities markets generally, (iv) changes arising from the consummation of the
Transaction or the announcement of the execution of the Merger Agreement, (v)
any reduction in the price of services or products offered by the Company in
response to the reduction in price of comparable services or products offered by
a competitor, or (vi) any of the items set forth in Schedule 9.03(e) of the
Merger Agreement, generally relating to the failure to enter into a definitive
agency agreement with American Express, termination of the current relationship
with American Express, or termination of the agency agreement with Safeway, Inc.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer, and from time to time thereafter, in addition
to its rights under applicable law and the Company's Certificate of
Incorporation and By-Laws, Purchaser shall be entitled to designate up to such
number of directors, rounded up to the next whole number, on the Board and the
boards of each of its Subsidiaries as shall give Purchaser representation on the
board and the Boards of each of its Subsidiaries equal to the product of the
total number of directors on the Board and the Boards of each of its
Subsidiaries (giving effect to the directors elected pursuant to this sentence),
multiplied by the percentage that the aggregate number of Shares beneficially
owned by Purchaser or any Affiliate of Purchaser following such purchase bears
to the total number of Shares then outstanding, and the Company shall, at such
time, promptly take all actions necessary to cause Purchaser's designees to be
elected as directors of the Company and each of its Subsidiaries, including
increasing the size of the Board and the Boards of each of its Subsidiaries or
securing the resignations of incumbent directors, or both. The Merger Agreement
also provides that, at such times, the Company shall use all reasonable efforts
to cause persons designated by Purchaser to constitute the same percentage as
persons designated by Purchaser shall constitute of the Board of each committee
of the Board to the extent permitted by applicable law.
The Merger Agreement provides that the Company shall promptly take all
actions required pursuant to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder in order to fulfill its obligations under Section 6.03
thereof and shall include in the Schedule 14D-9 such information with respect to
the Company and its officers and directors as is required under Section 14(f)
and Rule 14f-1 to fulfill such obligations. The Merger Agreement further
provides that Parent or Purchaser shall supply to the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and Affiliates required by such Section 14(f) and
Rule 14f-1.
The Merger Agreement provides that following the election of designees of
Purchaser in accordance with the second preceding paragraph and prior to the
Effective Time, any amendment of the Merger Agreement, or the Certificate of
Incorporation or the By-laws of the Company, any termination of the Merger
Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or Purchaser or
waiver of any of the Company's rights thereunder, will require the concurrence
of a majority of those directors of the Company then in office who were neither
designated by Purchaser nor are employees of the Company.
Pursuant to the Merger Agreement, from the date thereof until the Effective
Time, the Company shall, and shall cause the Subsidiaries and the officers,
directors, employees, auditors and agents of the Company and the Subsidiaries
to, afford the officers, employees and agents of Parent and Purchaser and
persons providing or committing to provide Parent or Purchaser with financing
for the transactions contemplated by the Merger Agreement reasonable access at
all reasonable times to the officers, employees, agents, properties, offices,
plants and other facilities, books and records of the Company and each
Subsidiary, and shall furnish Parent and Purchaser and persons providing or
committing to provide Parent or Purchaser with financing for
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the transactions contemplated by the Merger Agreement with all financial,
operating and other data and information as Parent or Purchaser, through its
officers, employees or agents, may reasonably request and Parent and Purchaser
have agreed to keep such information confidential pursuant to a separate
Confidentiality Agreement. The Company, Parent and Purchaser each also agree to
promptly advise each other of information required to update or correct any
document filed, published or issued by such parties pursuant to the Offer, the
Stockholders' Meeting or Proxy Statement.
The Merger Agreement provides that the Company will, and will direct and
use reasonable efforts to cause its officers, directors, employees,
representatives and agents to, immediately cease any discussions or negotiations
with any parties that may be ongoing with respect to an Acquisition Proposal (as
defined below). The Company will not, nor will it permit any of its Subsidiaries
to, nor will it authorize or permit any of its officers, directors or employees
or any investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its Subsidiaries to, directly or
indirectly, (i) solicit, initiate or encourage (including by way of furnishing
information), or take any other action designed or reasonably likely to
facilitate, any inquiries or the making of any proposal which constitutes, or
may reasonably be expected to lead to, any Acquisition Proposal or (ii)
participate in any discussions or negotiations regarding any Acquisition
Proposal, provided, however, that if, at any time prior to the consummation of
the Offer, the Board of Directors of the Company determines in good faith, after
receipt of advice from its outside counsel, that it is necessary to do so in
order to comply with its fiduciary duties to the Company's stockholders under
applicable law, the Company may, in response to an Acquisition Proposal which
was not solicited by or on behalf of the Company subsequent to the date hereof,
and subject to compliance with Section 6.05(b) and (c) of the Merger Agreement,
(x) furnish information with respect to the Company to any person pursuant to a
customary confidentiality agreement (as determined by the Company after receipt
of written advice from its outside counsel) and (y) participate in negotiations
regarding such Acquisition Proposal. The Merger Agreement defines "Acquisition
Proposal" as any inquiry, proposal or offer from any person relating to any
direct or indirect acquisition or purchase of 15% or more of the assets of the
Company and its Subsidiaries or 15% or more of any class of equity securities of
the Company or any of its Subsidiaries, any tender offer or exchange offer that
if consummated would result in any person beneficially owning 15% or more of any
class of equity securities of the Company or any of its Subsidiaries, any
merger, consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any of
its Subsidiaries, other than the transactions contemplated by the Merger
Agreement, or any other transaction that could reasonably be expected to prevent
or materially delay the consummation of the Offer or Merger.
The Merger Agreement further provides that except as set forth therein,
neither the Board of Directors of the Company nor any committee thereof shall
(i) withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Parent or Purchaser, the approval or recommendation by such Board of
Directors or such committee of the Offer, the Merger, the Transactions or the
Merger Agreement, (ii) approve or recommend, or propose publicly to approve or
recommend, any Acquisition Proposal or (iii) cause the Company to enter into any
letter of intent, agreement in principle, acquisition agreement or other similar
agreement related to any Acquisition Proposal within any Person other than the
Parent or its Affiliates. Notwithstanding the foregoing, in the event that prior
to the Offer, the Board of Directors of the Company determines in good faith,
after receipt of advice from outside counsel, that it is necessary to do in
order to comply with its fiduciary duties to the Company's stockholders under
applicable law, the Board of Directors of the Company may (x) withdraw or modify
its approval or recommendation of the Offer, the Merger, the Transactions or the
Merger Agreement, or (y) approve or recommend a Superior Proposal (as defined
below) or terminate the Merger Agreement and, if it so chooses, cause the
Company to enter into any agreement with respect to any Superior Proposal). The
Merger Agreement defines "Superior Proposal" as any bona fide proposal made by a
third party to acquire, directly or indirectly, for consideration consisting of
cash and/or securities, more than 50% of the combined voting power of the shares
of the Company's Common Stock then outstanding or all or substantially all of
the assets of the Company and its Affiliates on terms which the Board determines
in its good faith judgment to be more favorable to the Company's stockholders
than the Offer and the Merger, and for which financing is committed or, in the
good faith judgment of the Board, is
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reasonably likely to be timely obtained, and also taking into account the
likelihood of any prohibition of, or delay in closing, such Superior Proposal
under applicable antitrust law.
In addition to the obligations of the Company summarized in the preceding
two paragraphs, the Merger Agreement provides that if the Company intends to
withdraw or amend its recommendation of the Offer in accordance with Section
6.05 of the Merger Agreement, the Company shall give Purchaser 48 hours advance
written notice, such notice to specify the identity of any third party that has
made an Acquisition Proposal and the material terms of such Acquisition
Proposal. Following the delivery of such notice, the Company has also agreed
promptly to inform the Purchaser of material developments with respect to such
Acquisition Proposal.
The Merger Agreement provides that Parent agrees that for a period of two
years immediately following the Effective Time, it will, or will cause the
Surviving Corporation and its Subsidiaries to, continue to maintain employee
benefit and welfare plans, programs, contracts, agreements, severance plans and
policies (each referred to, for purposes of this paragraph, as a "plan"), for
the benefit of active employees of the Company and its Subsidiaries which in the
aggregate provide benefits that are comparable to and no less favorable than,
benefits provided to such active employees on the date of the Merger Agreement,
or to provide during such period benefits equivalent to those provided under
corresponding plans of Travelers or Travelers' Subsidiaries if such benefits are
greater. Parent guaranteed the Surviving Corporation's performance of such
obligations.
Pursuant to the Merger Agreement, Parent and Purchaser agreed to honor,
without modification, and after the purchase of Shares pursuant to the Offer,
Parent agreed to cause the Company and its Subsidiaries to honor, all contracts,
agreements, arrangements, policies, plans and commitments of the Company (or any
of its Subsidiaries) in effect as of the date of the Merger Agreement which are
applicable to any employee or former employee or any director or former director
of the Company (or any of its Subsidiaries) set forth therein, including,
without limitation, the Company's Executive Retention Plan dated May 13, 1997,
as amended on July 8, 1997 and July 21, 1997.
Pursuant to the Merger Agreement, Parent and Purchaser agreed to allow
active employees of the Company to be eligible to participate in incentive
compensation plans and stock option plans applicable to Travelers or its
Subsidiaries on terms comparable to the terms on which employees of comparable
status and seniority at other comparable Subsidiaries of Parent participate.
The Merger Agreement further provides that the Certificate of Incorporation
of the Surviving Corporation shall contain provisions no less favorable with
respect to indemnification than are set forth in Article 8 of the Certificate of
Incorporation of the Company, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would materially and adversely affect the rights thereunder of
individuals who at the Effective Time were directors, officers, employees,
fiduciaries or agents of the Company, unless such modification shall be required
by law.
The Merger Agreement also provides that, regardless of whether the Merger
becomes effective, the Company shall indemnify and hold harmless, and after the
Effective Time indemnify and hold harmless, each present and former director,
officer, employee, fiduciary and agent of the Company and each Subsidiary to the
fullest extent permitted under the Certificate of Incorporation and the By-laws
of the Company for a period of six years after the date of the Merger Agreement.
The Merger Agreement provides that the Parent and the Surviving Corporation
shall use their respective reasonable best efforts to maintain in effect for six
years from the Effective Time, if available, the current directors' and
officers' liability insurance policies maintained by the Company (provided that
the Surviving Corporation may substitute therefor policies of at least the same
coverage containing terms and conditions which are not materially less
favorable) with respect to matters occurring prior to the Effective Time;
provided, however, that if the existing policies expire, are terminated or
canceled during such period Parent or the Surviving Corporation will use its
reasonable best efforts to obtain substantially similar policies.
Notwithstanding the foregoing, in no event shall Parent or the Surviving
Corporation be required to expend pursuant to the Merger Agreement more than an
amount per year equal to 200% of current annual premiums paid by the Company for
such insurance.
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The Merger Agreement provides that, subject to its terms and conditions,
each of the parties thereto shall (i) make promptly its respective filings, and
thereafter make any other required submissions, under the HSR Act with respect
to the Transactions and (ii) use its reasonable best efforts to take, or cause
to be taken, all appropriate action, and to do or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by the Merger
Agreement, including, without limitation, using all reasonable efforts to obtain
all licenses, permits, consents, approvals, authorizations, qualifications and
orders of governmental authorities and parties to contracts with the Company and
the Subsidiaries as are necessary for the consummation of the Transactions and
to fulfill the conditions to the Offer and the Merger. In case at any time after
the Effective Time any further action is necessary or desirable to carry out the
purposes of the Merger Agreement, the proper officers and directors of each
party to the Merger Agreement are required to use their reasonable best efforts
to take all such action.
The Merger Agreement provides that if any "fair price," "moratorium,"
"control share acquisition" or other similar antitakeover statute or regulation
enacted under state or federal laws in the United States, including, without
limitation, Section 203 of the Delaware Code, is or may become applicable to the
Offer, the Merger, the Merger Agreement, or any Transactions, the Company and
the members of its Board of Directors (or any required and duly constituted
Committee thereof) will grant such approvals, and take such actions as are
necessary so that the transactions contemplated by the Merger Agreement may be
consummated as promptly as practicable on the terms contemplated thereby and
otherwise act to eliminate or minimize the effects of any Takeover Statute on
any of the transactions contemplated thereby.
The Merger Agreement provides that, following the consummation of the Offer
but prior to the Effective Time, (i) the Company will, if requested by the
Purchaser, issue Shares to the Purchaser representing a maximum of 19.9% of the
Shares outstanding immediately prior to such issuance and (ii) the Company will
terminate the Credit Agreement between the Company and The Northern Trust
Company.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto, including,
without limitation, representations by the Company as to the organization and
qualification, capitalization, authority to enter into the transactions
contemplated by the Merger Agreement, no conflicts, required filings and
consents, compliance with law, Commission filings, financial statements, absence
of certain changes or events concerning the Company's business, absence of
litigation, employee benefit plans, labor matters, offer documents, taxes,
brokers, certain contracts, real property and leases, trademarks, patents,
copyrights and intellectual property, environmental matters, state takeover
statutes, insurance and agents. The Merger Agreement also contains customary
representations and warranties of the Parent and Purchaser as to corporate
organization, authority relative to the Merger Agreement, no conflict, required
filings and consents, financing, offer documents, and brokers. The
representations and warranties in the Merger Agreement shall terminate at the
Effective Time or upon the termination of the Merger Agreement pursuant to the
terms thereof.
Conditions to the Merger. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the satisfaction
at or prior to the Effective Time of the following conditions: (a) the Merger
Agreement and the transactions contemplated thereby shall have been approved and
adopted by the affirmative vote of the stockholders of the Company to the extent
required by Delaware Law; (b) no Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any law, rule, regulation, executive
order, decree, injunction or other order (whether temporary, preliminary or
permanent) which is then in effect and has the effect of making the acquisition
of Shares by Parent or Purchaser or any Affiliate of either of them illegal or
otherwise restricting, preventing consummation of the Transactions; and (c)
Purchaser or its permitted assignee shall have purchased all Shares validly
tendered and not withdrawn pursuant to the Offer; provided, however, that this
condition shall not be applicable to the obligations of Parent or Purchaser if
Purchaser fails to purchase any Shares validly tendered and not withdrawn
pursuant to the Offer.
Termination: Fees and Expenses. The Merger Agreement provides that it may
be terminated and the Merger and the other Transactions may be abandoned at any
time prior to the Effective Time, notwithstanding any requisite approval and
adoption of the Merger Agreement and the Transactions by the stockholders of
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the Company: (a) by mutual written consent duly authorized by the Boards of
Directors of Parent, Purchaser and the Company; (b) by either Parent, Purchaser
or the Company if (i) the Offer is not completed on or before August 30, 1998;
provided, however, that the right to terminate the Merger Agreement under this
clause (i) shall not be available to any party whose failure to fulfill any
obligation under the Merger Agreement has been the cause of, or resulted in, the
failure to complete the Offer on or before such date; (ii) the Effective Time
shall not have occurred on or before October 30, 1998; provided, however, that
the right to terminate the Agreement under this clause (ii) shall not be
available to any party whose failure to fulfill any obligation under the Merger
Agreement has been the cause of, or resulted in, the failure of the Effective
Time to occur on or before such date; or (iii) any Governmental Authority shall
have enacted or promulgated any law, rule or regulation or shall have issued an
order, decree, ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Offer or Merger or making the acquisition of Shares by
Parent or Purchaser, or any Affiliate thereof, illegal, and such law, rule,
regulation and such order, decree, ruling or other action shall remain in effect
or have become final and nonappealable; (c) by Parent if (i) due to an
occurrence or circumstance that would result in a failure to satisfy any
condition listed in Section 15 of the Offer or the continuing existence of those
conditions set forth in Section 15 of the Offer, Purchaser shall have (A) failed
to commence the Offer within 5 Business Days following the date of the Merger
Agreement, (B) terminated the Offer without having accepted any Shares for
payment thereunder or (C) failed to pay for Shares pursuant to the Offer within
75 calendar days following the commencement of the Offer, unless such failure to
pay for Shares shall have been caused by or resulted from the failure of Parent
or Purchaser to perform in any material respect any material covenant or
agreement of either of them contained in the Merger Agreement or the material
breach by Parent or Purchaser of any material representation or warranty of
either of them contained in the Merger Agreement; or (ii) prior to the purchase
of Shares pursuant to the Offer the Board or any committee thereof shall have
withdrawn or modified in a manner adverse to Purchaser or Parent its approval or
recommendation of the Offer, the Merger Agreement, the Merger or any other
Transaction or shall have taken any action to facilitate (other than as
contemplated by the Agreement) any Acquisition Proposal; or (d) by the Company,
upon approval of the Board, if (i) Purchaser shall have (A) failed to commence
the Offer within 5 Business Days following the date of the Merger Agreement, (B)
terminated the Offer without having accepted any Shares for payment thereunder
or (C) failed to pay for Shares pursuant to the Offer within 75 calendar days
following the commencement of the Offer, unless such failure to pay for Shares
shall have been caused by or resulted from the failure of the Company to perform
in any material respect any material covenant or agreement of it contained in
the Merger Agreement or the material breach by the Company of any representation
or warranty of it contained in the Merger Agreement; or (ii) the Board shall
have withdrawn or modified in a manner adverse to Purchaser or Parent its
approval or recommendation of the Offer, the Agreement, the Merger or any other
Transaction in order to enter into any agreement for any Acquisition Proposal.
In the event of the termination of the Merger Agreement pursuant to the
terms of the Merger Agreement, the Merger Agreement provides that it shall
forthwith become void and there shall be no liability thereunder on the part of
any party thereto except under the provisions of the Merger Agreement related to
fees and expenses described below, and under certain other provisions of the
Merger Agreement which survive termination provided, nothing in the Merger
Agreement shall relieve any party from liability for any breach of the Merger
Agreement.
The Merger Agreement provides that (a) in the event that (i) the Merger
Agreement is terminated pursuant to clause (c)(ii) or (d)(ii) of the second
preceding paragraph, (ii) the Merger Agreement is terminated pursuant to clause
(b) of the second preceding paragraph and (A) an Acquisition Proposal shall have
been publicly disclosed prior to the date of such termination and (B) a Superior
Proposal shall have been consummated on or prior to the first anniversary of
such termination, the Company shall pay Parent promptly (but, in no event later
than three Business Days after such termination shall have occurred or such
Superior Proposal shall have been consummated, as the case may be), a fee of
$10,000,000 (the "Fee"), which amount shall be payable in immediately available
funds.
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Except as set forth in the Merger Agreement, the Merger Agreement provides
that all costs and expenses incurred in connection with the Merger Agreement and
the Transactions shall be paid by the party incurring such expenses, whether or
not any Transaction is consummated.
The Merger Agreement provides that in the event that the Company fails to
pay the Fee when due, the Company shall reimburse Parent and the Purchaser for
the costs and expenses actually incurred or accrued by Parent and the Purchaser
(including, without limitation, fees and expenses of counsel) in connection with
the collection and enforcement of Section 8.03 of the Merger Agreement, together
with interest on such unpaid Fee, commencing on the date that the Fee became
due, at a rate of interest equal to the Base Rate periodically announced by
Citibank, N.A., plus two percent.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY
Purpose of the Offer and the Merger. The purpose of the Offer and the
Merger is for Purchaser to acquire control of, and the entire equity interest
in, the Company. Unless the Minimum Condition is waived, consummation of the
Offer will provide Purchaser with at least a majority equity interest in the
Company. The Merger will allow Purchaser to acquire all outstanding Shares not
tendered and purchased pursuant to the Offer. The acquisition of the entire
equity interest in the Company has been structured as a cash tender offer and a
cash merger in order to provide a prompt and orderly transfer of ownership of
the Company from the public stockholders of the Company to Parent. The purchase
of Shares pursuant to the Offer will be a precondition for the Merger to be
consummated. After consummation of the Offer, Parent and Purchaser may continue
to assess various aspects of the Company's business and operations to maximize
Company's strengths in implementing Parent's long-term strategy.
Under Delaware Law, the approval of the Board and the affirmative vote of
the holders of a majority of the outstanding Shares is required to approve and
adopt the Merger Agreement and the transactions contemplated thereby, including
the Merger. The Board of Directors of the Company has unanimously approved and
adopted the Merger Agreement and the transactions contemplated thereby, and,
unless the Merger is consummated pursuant to the short-form merger provisions
under Delaware Law described below, the only remaining required corporate action
of the Company is the approval and adoption of the Merger Agreement and the
transactions contemplated thereby by the affirmative vote of the holders of a
majority of the Shares. Accordingly, if the Minimum Condition is satisfied,
Purchaser will have sufficient voting power to cause the approval and adoption
of the Merger Agreement and the transactions contemplated thereby without the
affirmative vote of any other stockholder.
In the Merger Agreement, the Company has agreed to take all action
necessary to convene a meeting of its stockholders as soon as practicable after
the consummation of the Offer for the purpose of considering and taking action
on the Merger Agreement and the transactions contemplated thereby, if such
action is required by Delaware Law. Parent and Purchaser have agreed that all
Shares owned by them and their subsidiaries will be voted in favor of the Merger
Agreement and the transactions contemplated thereby.
If Purchaser purchases Shares pursuant to the Offer, the Merger Agreement
provides that Purchaser will be entitled to designate representatives to serve
on the Board in proportion to Purchaser's ownership of Shares following such
purchase. See Section 11. Purchaser expects that such representation would
permit Purchaser to exert substantial influence over the Company's conduct of
its business and operations.
Under Delaware Law, if Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the outstanding Shares, Purchaser will be able to
approve the Merger without a vote of the Company's stockholders. In such event,
Parent, Purchaser and the Company have agreed in the Merger Agreement to take,
at the request of Purchaser, all necessary and appropriate action to cause the
Merger to become effective as soon as reasonably practicable after such
acquisition, without a meeting of the Company's stockholders. If, however,
Purchaser does not acquire at least 90% of the outstanding Shares pursuant to
the Offer or otherwise and a vote of the Company's stockholders is required
under Delaware Law, a significantly longer period of time would be required to
effect the Merger. The Merger Agreement provides that, following the
consummation of the Offer but prior to the Effective Time, (i) the Company will,
if requested by the Purchaser, issue
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Shares to the Purchaser representing a maximum of 19.9% of the Shares
outstanding immediately prior to such issuance and (ii) the Company will
terminate the Credit Agreement between the Company and The Northern Trust
Company.
No appraisal rights are available in connection with the Offer. However, if
the Merger is consummated, stockholders will have certain rights under Delaware
Law to dissent and demand appraisal of, and to receive payment in cash of the
fair value of, their Shares. Such rights to dissent, if the statutory procedures
are complied with, could lead to a judicial determination of the fair value of
the Shares, as of the day prior to the date on which the stockholders' vote was
taken approving the Merger or similar business combination (excluding any
element of value arising from the accomplishment or expectation of the Merger),
required to be paid in cash to such dissenting holders for their Shares. In
addition, such dissenting stockholders would be entitled to receive payment of a
fair rate of interest from the date of consummation of the Merger on the amount
determined to be the fair value of their Shares. In determining the fair value
of the Shares, the court is required to take into account all relevant factors.
Accordingly, such determination could be based upon considerations other than,
or in addition to, the market value of the Shares, including, among other
things, asset values and earning capacity. In Weinberger v. UOP, Inc., the
Delaware Supreme Court stated, among other things, that "proof of value by any
techniques or methods which are generally considered acceptable in the financial
community and otherwise admissible in court" should be considered in an
appraisal proceeding. Therefore, the value so determined in any appraisal
proceeding could be the same, more or less than the purchase price per Share in
the Offer or the Merger Consideration.
In addition, several decisions by Delaware courts have held that, in
certain circumstances, a controlling stockholder of a company involved in a
merger has a fiduciary duty to other stockholders which requires that the merger
be fair to such other stockholders. In determining whether a merger is fair to
minority stockholders, Delaware courts have considered, among other things, the
type and amount of consideration to be received by the stockholders and whether
there was fair dealing among the parties. The Delaware Supreme Court stated in
Weinberger and Rabkin v. Phillip A. Hunt Chemical Corp. that the remedy
ordinarily available to minority stockholders in a cash-out merger is the right
to appraisal described above. However, a damages remedy or injunctive relief may
be available if a merger is found to be the product of procedural unfairness,
including fraud, misrepresentation or other misconduct.
The Commission has adopted Rule 13e-3 under the Exchange Act which is
applicable to certain "going private" transactions and which may be under
certain circumstances be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer in which
Purchaser seeks to acquire the remaining Shares not held by it. Purchaser
believes, however, that Rule 13e-3 will not be applicable to the Merger,
assuming it is consummated more than one year after the termination of the
Offer. Rule 13e-3 requires, among things, that certain financial information
concerning the Company and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such transaction, be filed with the Commission and disclosed to stockholders
prior to the consummation of the transaction.
Plans for the Company. It is expected that, initially following the
Merger, the business and operations of the Company will, except as set forth in
this Offer to Purchase, be continued by the Company substantially as they are
currently being conducted. Parent will continue to evaluate the business and
operations of the Company during the pendency of the Offer and the Merger and
after the consummation of the Offer and the Merger, and will take such actions
as it deems appropriate under the circumstances then existing. Parent intends to
seek additional information about the Company during this period. Thereafter,
Parent intends to review such information as part of a comprehensive review of
the Company's business, operations, capitalization and management with a view to
optimizing the Company's potential in conjunction with Parent's businesses. It
is expected that the business and operations of the Company would form an
important part of Parent's future business plans. It is also the intention of
the Parent that following the consummation of the Merger, the Company will
operate as a part of Travelers. Travelers operates the payment services business
of the Travel and Leisure and Payment Services segment of Parent. Established in
1940, Travelers currently sells 275 million money orders annually, and also
provides official check, share draft processing, and electronic bill payment
services for financial institutions. Its payment systems group currently
services more than 5,000
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banks or financial institutions. Travelers currently processes annually about
750 million payment transactions valued at approximately $100 billion.
Except as indicated in this Offer to Purchase, Parent does not have any
present plans or proposals which relate to or would result prior to the Merger
in an extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any subsidiary, a sale or transfer of a
material amount of assets of the Company or any subsidiary to a third party, any
change in the present capitalization or dividend policy or any other material
changes in the Company's corporate structure or business, or the composition of
the Board.
13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE ACT LISTING;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS
The purchase of Shares by Purchaser pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and may reduce the number
of holders of Shares, which could adversely affect the liquidity and market
value of the remaining Shares held by stockholders other than Purchaser.
Purchaser cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on the
market price for or marketability of the Shares or whether it would cause future
market prices to be greater or less than the Offer Price.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the NYSE for continued listing and
may, therefore, be delisted from such exchange. According to the NYSE's
published guidelines, the NYSE could consider delisting the Shares if, among
other things, the number of publicly held Shares (excluding Shares held by
officers, directors, their immediate families and other concentrated holdings of
10% or more) were less than 600,000, there were less than 1,200 holders of at
least 100 Shares or the aggregate market value of the publicly held Shares was
less than $5 million. If, as a result of the purchase of Shares pursuant to the
Offer, the Shares no longer meet the requirements of the NYSE for continued
listing and the listing of Shares on such exchanges is discontinued, the market
for the Shares could be adversely affected. Parent currently intends to cause
the delisting of the Shares by the NYSE following consummation of the Offer.
If the NYSE were to delist the Shares, it is possible that the Shares would
trade on another securities exchange or in the over-the-counter market and that
price quotations for the Shares would be reported by such exchange or through
Nasdaq or other sources. The extent of the public market for the Shares and the
availability of such quotations would, however, depend upon such factors as the
number of holders and/or the aggregate market value of the publicly held Shares
at such time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration of the Shares under
the Exchange Act as described below, and other factors. Parent currently has no
intention to seek a listing of the Shares on any other exchange or on Nasdaq.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of the Shares. Depending upon factors similar to those
described above regarding listing and market quotations, it is possible that
following the Offer, the Shares would no longer constitute "margin securities"
for the purposes of the margin regulations of the Federal Reserve Board and
therefore could no longer be used as collateral for loans made by brokers.
The Shares are currently registered under the Exchange Act. Registration of
the Shares under the Exchange Act may be terminated upon application of the
Company to the Commission if the Shares are neither listed on a national
securities exchange nor held by 300 or more holders of record. Termination of
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to its stockholders and to
the Commission and would make certain provisions of the Exchange Act no longer
applicable to the Company, such as the short-swing profit recovery provisions of
Section 16(b) of the Exchange Act, the requirement of furnishing a proxy
statement pursuant to Section 14(a) of the Exchange Act in connection with
stockholders' meetings and the related requirement of
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furnishing an annual report to stockholders and the requirements of Rule 13e-3
under the Exchange Act with respect to "going private" transactions. Further,
the ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144 or
144A promulgated under the Securities Act may be impaired or eliminated. It is
the current intention of Parent to deregister the Shares after consummation of
the Offer if the requirements for termination of registration are met.
14. DIVIDENDS AND DISTRIBUTIONS
The Merger Agreement provides that the Company shall not, between the date
of the Merger Agreement and the Effective Time, directly or indirectly, without
the prior written consent of Parent, (a) issue, sell, pledge, dispose of, grant,
encumber, or authorize the issuance, sale, pledge, disposition, grant or
encumbrance of any shares of capital stock of any class of the Company or any
options, warrants, convertible securities or other rights of any kind to acquire
any shares of such capital stock, or any other ownership interest (including,
without limitation, any phantom interest), of the Company or any Subsidiary; (b)
declare, set aside, make or pay any dividend or other distribution payable in
cash, stock, property, or otherwise, with respect to any of its capital stock;
or (c) reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock. See Section 11.
15. CERTAIN CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or pay for any Shares tendered pursuant to the
Offer, and may terminate or amend the Offer and may postpone the acceptance for
payment of and payment for Shares tendered, if (a) the Minimum Condition shall
not have been satisfied, (b) any applicable waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer,
(c) any Pre-Offer Approval shall not have been obtained; or (d) at any time on
or after the date of the Merger Agreement, and prior to the acceptance for
payment of Shares pursuant to the Offer, any of the following conditions shall
exist:
(a) there shall be pending before any court any action or proceeding
instituted by any Governmental Authority (i) that is reasonably likely to
prohibit or limit materially the ownership or operation by the Company,
Parent or any of their Subsidiaries, of all or any material portion of the
business or assets of the Company and the Subsidiaries, taken as a whole,
or any material portion of the business or assets of Parent and its
Subsidiaries, taken as a whole, or to compel the Company, Parent or any of
their Subsidiaries to dispose of or hold separate all or any material
portion of the business or assets of the company and the Subsidiaries,
taken as a whole, or Parent and its Subsidiaries taken as a whole, as a
result of the Transactions; (ii) reasonably likely to impose or confirm
limitations on the ability of Parent or Purchaser to exercise effectively
full rights of ownership of any Shares, including, without limitation, the
right to vote any Shares acquired by Purchaser pursuant to the Offer or
otherwise on all matters properly presented to the Company's stockholders
including, without limitation, the approval and adoption of the Merger
Agreement and the transactions contemplated thereby; or (iii) seeking to
require divestiture by Parent or Purchaser of any Shares.
(b) there shall have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, entered, enforced, promulgated, amended, issued and deemed
applicable to (i) Parent, the Company or any Subsidiary or Affiliate of
Parent or the Company or (ii) any Transaction, by any Governmental
Authority, domestic or foreign, which is reasonably likely to result,
directly or indirectly in any of the consequences referred to in clauses
(i) through (iii) of paragraph (a) above;
(c) there shall have occurred, and be continuing, any change,
condition, event or other development that, individually or in the
aggregate, has a Material Adverse Effect;
(d) any representation or warranty of the Company in the Merger
Agreement that is qualified by materiality or Material Adverse Effect shall
not be true and correct, or without regard to such qualifications, any such
representations or warranties shall not be true and correct so as to in
aggregate
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have a Material Adverse Effect, or any representation or warranty not so
qualified shall not be true and correct in all material respects, in each
case as if such representation or warranty was made as of such time on or
after the date of the Merger Agreement (except for representations and
warranties made as of a specific date which shall be true and correct as of
such date) or the Company shall not have delivered to Parent a certificate
of the Company to such effect signed by a duly authorized officer thereof
and dated as of the date on which Parent shall first accept Shares for
payment;
(e) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement;
(f) the Merger Agreement shall have been terminated in accordance with
its terms; or
(g) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of a payment for
Shares thereunder.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or may be waived by Purchaser or Parent in
whole or in part at any time and from time to time in their sole discretion
(provided, however, that the Minimum Condition may not be waived without the
prior approval of the Company and that no change may be made which decreases the
price per Share payable in the Offer or which imposes conditions to the Offer in
addition to those set forth in this Section 15). The failure by Parent or
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right; the waiver of any such right with respect to
particular facts and other circumstances shall not be deemed a waiver with
respect to any other facts and circumstances; and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
General. Except as described in this Section 16, based upon a review of
publicly available filings by the Company with the Commission and other publicly
available information concerning the Company and the review of certain
information furnished by the Company to Parent and discussions of
representatives of Parent with representatives of the Company during Parent's
investigation of the Company (see Section 10), neither Parent nor Purchaser is
aware of any license or regulatory permit that appears to be material to the
business of the Company and its subsidiaries, taken as a whole, that might be
adversely affected by the acquisition of Shares by Purchaser or Parent pursuant
to the Offer, the Merger or otherwise or, except as set forth below, of any
approval or other action by any governmental, administrative or regulatory
agency or authority, domestic or foreign, that would be required prior to the
acquisition of Shares by Purchaser pursuant to the Offer, the Merger or
otherwise. Should any such approval or other action be required, Purchaser and
Parent currently contemplate that it will be sought. While Purchaser does not
currently intend to delay the acceptance for payment of Shares tendered pursuant
to the Offer pending the outcome of any such matter (subject to Purchaser's
right to decline to purchase Shares if any of the conditions in Section 15 have
occurred), there can be no assurance that any such approval or other action, if
needed, would be obtained or would be obtained without substantial conditions or
that adverse consequences might not result to the business of the Company,
Parent or Purchaser or that certain parts of the business of the Company, Parent
or Purchaser might not have to be disposed of or other substantial conditions
complied with in order to obtain such approval or other action or in the event
that such approvals were not obtained or any other actions were not taken.
Purchaser's obligation under the Offer to accept for payment and pay for Shares
is subject to certain conditions, including conditions relating to certain of
the legal matters discussed in this Section 16. See Section 15.
Pending Litigation. Following the April 6, 1998, announcement of the
proposed acquisition of the Company by Parent and Purchaser, two putative class
actions on behalf of stockholders of the Company were filed in the Delaware
Court of Chancery. See Section 7.
State Takeover Laws. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of Delaware Law prevents an
"interested stockholder" (generally a person who owns or
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has the right to acquire 15% or more of a corporation's outstanding voting
stock, or an affiliate or associate thereof) from engaging in a "business
combination" (defined to include mergers and certain other transactions) with a
Delaware corporation for a period of three years following the date such person
became an interested stockholder unless, among other things, prior to such date
the board of directors of the corporation approved either the business
combination or the transaction in which the interested stockholder became an
interested stockholder. On April 4, 1998, prior to the execution of the Merger
Agreement, the Board of Directors of the Company, by unanimous vote of all
directors present at a meeting held on such date, approved the Merger Agreement,
determined that each of the Offer and the Merger is fair to, and in the best
interest of, the stockholders of the Company. Accordingly, Section 203 is
inapplicable to the Offer and the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987 in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of
Indiana may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of stockholders in the state and were incorporated
there.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer or the Merger and has not complied with any such laws.
Should any person seek to apply any state takeover law, Purchaser will take such
action as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Purchaser might be unable to accept for
payment any Shares tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer, and the Merger. In such case, Purchaser may not be
obligated to accept for payment any Shares tendered. See Section 15.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The acquisition
of Shares by Purchaser pursuant to the Offer are subject to such requirements.
See Section 2.
Pursuant to the HSR Act on April 10, 1998, Parent filed a Premerger
Notification and Report Form with the Antitrust Division and the FTC in
connection with the purchase of Shares pursuant to the Offer. Under the
provisions of the HSR Act applicable to the Offer, the purchase of Shares
pursuant to the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by Parent. Accordingly, the
waiting period under HSR Act applicable to the purchase of Shares pursuant to
the Offer will expire at 11:59 p.m., New York City time, on April 22, 1998,
unless such waiting period is earlier terminated by the FTC and the Antitrust
Division or extended by a request from the FTC or the Antitrust Division for
additional information or documentary material prior to the expiration of the
waiting period. Pursuant to the HSR Act, Parent has requested early termination
of the waiting period applicable to the Offer. There can be no assurance,
however, that the 15-day HSR Act waiting period will be terminated early. If
either the FTC or the Antitrust Division were to request additional information
or documentary material from the parties with respect to the Offer, the waiting
period with respect to the Offer would expire at 11:59 p.m., New York City time,
on the tenth calendar day after the date of substantial compliance by Parent
with such request. Thereafter, the waiting period could be extended only by
court order, or the FTC or Antitrust Division could seek an injunction to
prevent consummation of the transaction. If the acquisition of Shares is delayed
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pursuant to a request by the FTC or the Antitrust Division for additional
information or documentary material pursuant to the HSR Act, the Offer may, but
need not, be extended and, in any event, the purchase of and payment for Shares
will be deferred until 10 days after the request is substantially complied with,
or until the waiting period is sooner terminated by the FTC and the Antitrust
Division. Only extension of such waiting period pursuant to a request for
additional information is authorized by the HSR Act and the rules promulgated
thereunder, except by court order. Any such extension of the waiting period will
not give rise to any withdrawal rights not otherwise provided for by applicable
law. See Section 4. It is a condition to the Offer that the waiting period
applicable under the HSR Act to the Offer expire or be terminated. See Section 2
and Section 15.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Purchaser pursuant to the Offer. At any time before or after the purchase of
Shares pursuant to the Offer by Purchaser, the FTC or the Antitrust Division
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking the divestiture of Shares purchased by
Purchaser or the divestiture of substantial assets of Parent, the Company or
their respective subsidiaries. Private parties and state attorneys general may
also bring legal action under federal or state antitrust laws under certain
circumstances. There can be no assurance that a challenge to the Offer on
antitrust grounds will not be made or, if such a challenge is made, what the
result would be. See Section 15 for certain conditions to the Offer, including
certain conditions with respect to litigation.
Federal Reserve Board Regulations. The margin regulations promulgated by
the Federal Reserve Board place restrictions on the amount of credit that may be
extended for the purpose of purchasing margin stock (including the Shares) if
such credit is secured directly or indirectly by margin stock. Purchaser and
Parent believe that the financing of the acquisition of the Shares will not be
subject to the margin regulations.
State Change In Control Rules. The Company generally conducts its business
pursuant to separate licenses issued by each of the states in which Company
operates. Many of these states, as well as Puerto Rico and Canada, have state
laws addressing a change in control of a licensee. Purchaser or Parent will be
subject to these laws in connection with the Offer or the Merger. While these
laws differ from jurisdiction to jurisdiction, they typically require prior
notice to the licensing authority of a proposed change in control. In some
cases, the licensing authority must approve the change in control in advance of
a transaction effectuating a change in control. In other cases, express approval
is not required prior to the change in control, but the relevant laws, expressly
or by implication, authorize the licensing authority to deny a transaction
resulting in a change in control. Some typical factors that may be considered by
the licensing authorities when reviewing a change in control notice or
application are the financial condition, competence, experience, and moral
character of the acquiror, as well as an assessment of whether the acquiror will
conduct the business of the licensee in compliance with applicable laws. There
can be no assurance that the Purchaser or Parent will be able to satisfy or
comply with such laws or that compliance or noncompliance will not have adverse
consequences for the Company or any subsidiary or the Parent after purchase of
the Shares pursuant to the Offer and the Merger.
Foreign Approvals. According to publicly available information, the
Company conducts business in a number of other foreign countries and
jurisdictions. In connection with the acquisition of the Shares pursuant to the
Offer or the Merger, the laws of certain of those foreign countries and
jurisdictions may require the filing of information with, or the obtaining of
the approval or consent of, governmental authorities in such countries and
jurisdictions. The governments in such countries and jurisdictions might attempt
to impose additional conditions on the Company's operations conducted in such
countries and jurisdictions as a result of the acquisition of the Shares
pursuant to the Offer or the Merger. If such approvals or consents are found to
be required the parties intend to make the appropriate filings and applications.
In the event such a filing or application is made for the requisite foreign
approvals or consents, there can be no assurance that such approvals or consents
will be granted and, if such approvals or consents are received, there can be no
assurance as to the date of such approvals or consents. In addition, there can
be no assurance that the Purchaser will be able to cause the Company or its
subsidiaries to satisfy or comply with such laws or that compliance or
noncompliance will not have adverse consequences for the Company or any
subsidiary after purchase of the Shares pursuant to the Offer or the Merger.
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17. FEES AND EXPENSES
Purchaser and Parent have retained Salomon to act as the Financial Advisor
and to provide certain financial advisory services in connection with the
proposed acquisition of the Company (including acting as Dealer Manager). In
connection with such services. Parent has agreed to pay Salomon a fee of
$150,000 which was paid upon execution of the engagement letter; an additional
fee of $250,000 contingent upon the rendering of certain advice to Parent as to
the consideration to be paid in the Offer, and, which became payable upon
receipt thereof; an additional fee of $250,000 contingent upon and, which became
payable promptly following execution of the Merger Agreement; and an additional
fee of $3.0 million (less the $650,000 payable pursuant to the preceding
clauses), payable upon consummation of the Offer. If following or in connection
with the termination or abandonment of the Offer and Merger, the Company
receives a so-called "breakup", "termination", "topping" or similar fee or
payment (except in certain circumstances), or obtains any profit on any option
on any Shares, Salomon will be entitled to an additional cash fee equal to 10%
of the excess (if any) of such fees, payments and profits over the direct
out-of-pocket expenses incurred in connection with such transaction. Parent will
also reimburse Salomon for certain reasonable out-of-pocket expenses, including
reasonable attorneys' fees. Parent will also indemnify the Dealer Manager
against certain liabilities and expenses in connection with the Offer, including
certain liabilities under the federal securities laws. Purchaser and Parent have
retained MacKenzie Partners, Inc. to act as the Information Agent and Norwest
Bank Minnesota, N.A. to serve as the Depositary in connection with the Offer.
The Dealer Manager and the Information Agent may contact holders of Shares by
mail, telephone, telex, telecopy, telegraph and personal interview and may
request banks, brokers, dealers and other nominee stockholders to forward
materials relating to the Offer to beneficial owners. The Information Agent and
the Depositary each will receive reasonable and customary compensation for their
services, be reimbursed for certain reasonable out-of-pocket expenses and be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities and expenses under the federal securities laws.
Neither Purchaser nor Parent will pay any fees or commissions to any broker
or dealer or other person or entity (other than as described in the preceding
paragraph) in connection with the solicitation of tenders of Shares pursuant to
the Offer. Brokers, dealers, commercial banks and trust companies will be
reimbursed by Purchaser upon request for customary mailing and handling expenses
incurred by them in forwarding material to their customers.
18. MISCELLANEOUS
Purchaser is not aware of any jurisdiction in which the making of the Offer
is not in compliance with applicable law. If Purchaser becomes aware of any
jurisdiction in which the making of the Offer would not be in compliance with
applicable law, Purchaser will make a good faith effort to comply with any such
law. If, after such good faith effort, Purchaser cannot comply with any such
law, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares residing in such jurisdiction. In those
jurisdictions whose securities or blue sky laws require the Offer to be made by
a licensed broker or dealer, the Offer is being made on behalf of Purchaser by
the Dealer Managers or one or more registered brokers or dealers which are
licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER NOT CONTAINED IN THIS OFFER TO PURCHASE OR
IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
39
<PAGE> 42
Purchaser and Parent have filed with the Commission the Tender Offer
Statement on Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act,
together with exhibits, furnishing certain additional information with respect
to the Offer, and may file amendments thereto. Such Schedule 14D-1 and any
amendments thereto, including exhibits, should be available for inspection and
copies should be obtainable in the manner set forth in Section 8 (except that
such material will not be available at the regional offices of the Commission).
Pine Valley Acquisition Corporation
April 10, 1998
40
<PAGE> 43
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER
The name, age, present principal occupation or employment and five-year
employment history of each director and executive officer of Viad Corp
("Parent") and certain other information are set forth below. Unless otherwise
indicated, the business address of each director and executive officer of Parent
is: c/o Viad Corp, 1850 North Central Avenue, Phoenix, Arizona 85077. Unless
otherwise indicated, each occupation set forth below next to an individual's
name refers to employment with Parent. All directors and executive officers
listed below are citizens of the United States. Unless otherwise indicated, each
such person has held his or her present occupation as set forth below, or has
been an executive officer of Parent, or the organization indicated, for the past
five years.
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME AGE POSITIONS HELD, PRINCIPAL BUSINESS ADDRESS
---- --- ----------------------------------------------------
<S> <C> <C>
Robert H. Bohannon..................... 53 Chairman, President and Chief Executive Officer of
Parent. Director of Parent since 1996. Also Director
of Purchaser. Prior to January, 1997, Mr. Bohannon
served as President and Chief Operating Officer of
Parent since August 15, 1996. Prior thereto he was
President and Chief Executive Officer of Travelers
Express Company, Inc. since 1993, and prior to that
was a senior officer at Marine Midland Bank of
Buffalo, New York.
Jess Hay............................... 67 Director of Parent since 1981. Chairman, Texas
Foundation for Higher Education, and Chairman of the
Board of HCB Enterprises Inc, a private investment
firm. Retired Chairman and Chief Executive Officer of
Lomas Financial Group. Also a director of Exxon
Corporation, SBC Communications, Inc., and Trinity
Industries, Inc. Mr. Hay's business address is: P.O.
Box 239, Dallas, Texas 75221-0239.
Judith K. Hofer........................ 58 Director of Parent since 1984. President and Chief
Executive Officer of Filene's, a retail department
store division of The May Department Stores Company.
Ms. Hofer's business address is: c/o Filene's, 426
Washington Street, Boston, Massachusetts 02108.
Jack F. Reichert....................... 67 Director of Parent since 1984. Chairman of the Board,
Retired, and a director of Brunswick Corporation, a
leader in marine power, pleasure boating and
recreation products and services. Trustee, Carroll
College; Executive in Residence, University of
Wisconsin-Milwaukee; Director, Professional Bowlers
Association. Mr. Reichert's business address is: c/o
Brunswick Corporation, 1 North Field Court, Lake
Forest, Illinois 60045-4811.
Linda Johnson Rice..................... 41 Director of Parent since 1992. President and Chief
Operating Officer and a director of Johnson Publishing
Company, Inc., publisher of Ebony and other magazines.
Also a director of Bausch & Lomb Incorporated, and
Kimberly-Clark Corporation. Ms. Johnson's business
address is: c/o Johnson Publishing Company, Inc., 820
South Michigan Avenue, Chicago, Illinois 60605.
</TABLE>
I-1
<PAGE> 44
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME AGE POSITIONS HELD, PRINCIPAL BUSINESS ADDRESS
---- --- ----------------------------------------------------
<S> <C> <C>
Douglas L. Rock........................ 51 Director of Parent since 1996. Chairman of the Board
and Chief Executive Officer of Smith International,
Inc., a supplier of products and services to the oil
and gas drilling and production industry. Mr. Rock's
business address is: c/o Smith International, Inc.,
16470 Hardy Street, Houston, Texas 77032.
John C. Tolleson....................... 49 Director of Parent since 1997. Founder and former
Chairman and Chief Executive Officer of First USA,
Inc., a financial services company specializing in the
credit card business; and currently Chairman of The
Tolleson Group, a private investment group. Also a
director of Banc One Corporation, Capstead Mortgage
Corporation, and Paymentech, Inc. Mr. Tolleson's
business address is: c/o The Tolleson Group, 1601 Elm
Street, 47th Floor, Dallas, Texas 75201.
Timothy R. Wallace..................... 44 Director of Parent since 1996. President and Chief
Operating Officer and a director of Trinity
Industries, Inc., a manufacturer of railcars and
equipment. Mr. Wallace's business address is: c/o
Trinity Industries, Inc., 2525 Stemmons Freeway,
Dallas, Texas 75207.
L. Gene Lemon.......................... 57 Vice President -- Administration of Parent since 1996
and prior thereto was Vice President and General
Counsel of Parent.
Ronald G. Nelson....................... 56 Vice President -- Finance and Treasurer of Parent
since 1994 and prior thereto was Vice
President-Treasurer.
Peter J. Novak......................... 58 Vice President and General Counsel of Parent since
1996. Prior to February, 1996, Mr. Novak was Deputy
General Counsel of Parent, and prior to serving in
that position was Group General Counsel of Parent.
Scott E. Sayre......................... 51 Secretary and Associate General Counsel of Parent
since January, 1997. Prior to January, 1997, Mr. Sayre
served as Assistant Secretary and Assistant General
Counsel of the Parent since February, 1996, and prior
thereto was Assistant General Counsel.
Richard C. Stephan..................... 58 Vice President -- Controller of Parent since 1980.
Wayne A. Wight......................... 55 Vice President -- Corporate Development of Parent,
since February, 1998. Prior to February, 1998, Mr.
Wight served as Executive Director -- Corporate
Development of Parent.
Charles J. Corsentino.................. 51 President and Chief Executive Officer of
Exhibitgroup/Giltspur, a division of Parent, since
1991.
Frederick J. Martin.................... 63 President and Chief Executive Officer of Dobbs
International Services, Inc., a subsidiary of Parent,
since 1985.
Philip W. Milne........................ 39 President and Chief Executive Officer of Travelers
Express Company, Inc., a subsidiary of Parent, since
August, 1996. Prior to August, 1996, Mr. Milne was
Vice President -- General Manager -- Retail Payment
Products of Travelers Express Company, Inc., since May
15, 1993, and prior thereto served in similar
executive capacities at Travelers Express Company,
Inc.
</TABLE>
I-2
<PAGE> 45
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME AGE POSITIONS HELD, PRINCIPAL BUSINESS ADDRESS
---- --- ----------------------------------------------------
<S> <C> <C>
Paul B. Mullen......................... 43 President and Chief Executive Officer of GES
Exposition Services, Inc., a subsidiary of Parent.
Prior to May, 1996, Mr. Mullen was President and Chief
Executive Officer of Giltspur, Inc. Prior thereto, he
was Executive Vice President and Chief Operating
Officer of Giltspur, Inc. since 1994, and prior to
that, he was President of the Pittsburgh Division of
Giltspur, Inc. since 1992.
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
The name, age, present principal occupation or employment and five-year
employment history of, and certain other information relating to, each director
and executive officer of Pine Valley Acquisition Corporation ("Purchaser") are
set forth below. The present principal occupation or employment and five-year
employment history of such persons who are executive officers of Parent are set
forth earlier in this Schedule I. The business address of each director and
executive officer of Purchaser is: c/o Viad Corp, 1850 North Central Avenue,
Phoenix, Arizona 85077. Unless otherwise indicated, each occupation set forth
next to an individual's name refers to employment with Purchaser. All directors
and executive officers listed below are citizens of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AGE MATERIAL POSITIONS HELD
---- --- -------------------------------------------
<S> <C> <C>
Robert H. Bohannon..................... 53 Director of Purchaser since March, 1998. (See
information set forth above.)
Ronald G. Nelson....................... 56 Director, Vice President and Assistant Treasurer of
Purchaser since March, 1998. (See information set
forth above.)
Philip W. Milne........................ 39 Director, President and Chief Executive Officer of
Purchaser. (See information set forth above.)
Carol L. Lenhart....................... 47 Vice President and Treasurer of Purchaser since March,
1998. Ms. Lenhart also is Vice President-Treasurer of
Travelers, having been in that position since March,
1997. Prior thereto Ms. Lenhart was Assistant
Treasurer of SuperValu Inc. since 1993 and Director of
Corporate Finance since 1989.
Anthony P. Ryan........................ 35 Vice President and Chief Financial Officer and
Assistant Treasurer of Purchaser since March, 1998.
Mr. Ryan also is Vice President and Chief Financial
Officer and Assistant Treasurer of Travelers since
May, 1997; since September, 1996, he was Vice
President-Division Controller; and since May, 1995,
was Controller-Payment Systems Group. Prior to May,
1995, he was Director of Finance or served in similar
management positions at FirstData Corporation since
August, 1985.
Scott E. Sayre......................... 51 Secretary of Purchaser since March, 1998. (See
information set forth above.)
</TABLE>
I-3
<PAGE> 46
The Letter of Transmittal, certificates for Shares and any other required
documents should be sent or delivered by each stockholder of the Company or his
broker, dealer, commercial bank or other nominee to the Depositary at one of its
addresses set forth below.
The Depositary for the Offer is:
NORWEST BANK MINNESOTA, N.A.
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Overnight Courier:
Norwest Shareowner Services (612) 450-4163 Norwest Shareowner Services
P.O. Box 64858 Confirm by Telephone: 161 North Concord Exchange
St. Paul, MN 55164-0858 (612) 450-4110 Reorganization Department
South St. Paul, MN 55075
By Hand:
Norwest Shareowner Services The Depository Trust Company
161 North Concord Exchange 1st Floor
2nd Floor 55 Water Street
South St. Paul, MN 55075 New York, NY 10041
</TABLE>
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent at its telephone numbers and location
listed below. You may also contact your broker, dealer, commercial bank or trust
company or nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MacKenzie Partners, Inc. Logo
156 Fifth Avenue
New York, New York 10010
Call collect: (212) 929-5500
or
Call Toll-Free (800) 322-2885
The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
333 South Hope Street
Los Angeles, California 90071
(213)253-1842 (Call Collect)
<PAGE> 1
EXHIBIT 99(a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
MONEYGRAM PAYMENT SYSTEMS, INC.
AT $17.00 NET PER SHARE
PURSUANT TO THE OFFER TO PURCHASE DATED APRIL 10, 1998
BY
PINE VALLEY ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
VIAD CORP
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 NOON, NEW YORK CITY TIME,
ON FRIDAY, MAY 8, 1998, UNLESS THE OFFER IS EXTENDED.
This Letter of Transmittal (or a facsimile thereof), certificates for
Shares and any other required documents should be sent or delivered by each
stockholder of the Company or his or her broker, dealer, commercial bank or
other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
NORWEST BANK MINNESOTA, N.A.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier:
Norwest Shareowner Services Norwest Shareowner Services
P.O. Box 64858 Reorganization Department
St. Paul, MN 55164-0858 161 North Concord Exchange
South St. Paul, MN 55075
By Hand:
Norwest Shareowner Service The Depository Trust Company
161 North Concord Exchange 55 Water Street
2nd Floor 1st Floor
South St. Paul, MN 55075 New York, NY 10041
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE,
WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER
OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED.
This Letter of Transmittal is to be completed by stockholders of the shares
of Common Stock, par value $.01 per share (collectively, the "Company Common
Stock" or the "Shares"), of Pine Valley Acquisition Corporation, a Delaware
corporation (the "Company"), in connection with the Offer to Purchase dated
April 10, 1998 (the "Offer to Purchase") of PINE VALLEY ACQUISITION CORPORATION,
a Delaware corporation ("Purchaser") and a wholly owned subsidiary of VIAD CORP,
a Delaware corporation ("Parent"), to either (i) deliver certificates evidencing
the Shares (the "Stock Certificates") herewith or (ii) deliver Shares by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or (the "Book-Entry Transfer Facility"), pursuant to the procedures set
forth in Section 3 of the Offer to Purchase (as defined below). Stockholders
whose Stock Certificates are not immediately available or who cannot deliver
their Stock Certificates or deliver confirmation of the book-entry transfer of
the Shares into
<PAGE> 2
the Depositary's account at the Book-Entry Transfer Facility ("Book-Entry
Confirmation") and all other documents required hereby to the Depositary prior
to the Expiration Date and who wish to tender their Shares must do so pursuant
to the guaranteed delivery procedure described in Section 3 in the Offer to
Purchase. See Instruction 2.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY. BOXES BELOW FOR USE BY ELIGIBLE
INSTITUTIONS ONLY.
ACCOUNT INFORMATION
(COMPLETE ONE METHOD OF TENDER ONLY)
- --------------------------------------------------------------------------------
[ ] Check here if Shares are being delivered in physical form and complete the
following information:
Name of Registered Holder(s):
---------------------------------------------------------------------------
[ ] Check here if Shares are being delivered by book-entry transfer made to the
account maintained by the Depositary with the Book-Entry Transfer Facility
and complete the following:
Name of DTC Participant:
---------------------------------------------------------------------------
Account Number:
---------------------------------------------------------------------------
Transaction Code Number:
---------------------------------------------------------------------------
[ ] Check here if Shares are being delivered pursuant to a notice of guaranteed
delivery previously delivered to the Depositary and complete the following:
Name of Record Holder(s):
---------------------------------------------------------------------------
Window Ticket No. (if any):
---------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
---------------------------------------------------------------------------
Name of Eligible Institution that Guaranteed Delivery:
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) TOTAL NUMBER
(PLEASE FILL IN EXACTLY AS NAME APPEARS ON FACE STOCK OF SHARES NUMBER
OF THE STOCK CERTIFICATES TENDERED OR ON A SECURITY CERTIFICATE REPRESENTED OF SHARES
POSITION LISTING WITH RESPECT TO SUCH SHARES) NUMBER(S)* BY CERTIFICATES** TENDERED
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Stock Certificate delivered to the
Depositary are being tendered hereby. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to PINE VALLEY ACQUISITION CORPORATION, a
Delaware corporation ("Purchaser") and wholly owned subsidiary of VIAD CORP, a
Delaware corporation ("Parent"), the above-described shares of Common Stock, par
value $.01 per share (collectively, the "Shares"), of MoneyGram Payment Systems,
Inc., a Delaware corporation (the "Company"), at $17.00 per Share, net to the
seller in cash, without interest, upon the terms and subject to the conditions
set forth in the Offer to Purchase of Purchaser dated April 10, 1998 (the "Offer
to Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, as amended or supplemented from time to time, together
constitute the "Offer"). The undersigned understands that Purchaser reserves the
right to transfer or assign, in whole or in part from time to time to Parent or
one or more direct or indirect wholly owned subsidiaries of Parent, the right to
purchase Shares tendered pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), subject to, and effective upon, acceptance for payment of the
Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer, the undersigned hereby sells, assigns and transfers to,
or upon the order of, Purchaser all right, title and interest in and to all of
the Shares that are being tendered hereby and all other Shares or other
securities or property issued or issuable in respect thereof on or after April
4, 1998 (such other Shares, securities or property other than the Shares being
referred to herein as "Other Securities") and irrevocably appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares and all Other Securities with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (a) deliver Stock Certificates evidencing such
Shares and all Other Securities, or transfer ownership of such Shares on the
account books maintained by the Book-Entry Transfer Facility, together, in
either case, with all accompanying evidences of transfer and authenticity, to or
upon the order of Purchaser, upon receipt by the Depositary, as the
undersigned's agent, of the purchase price (adjusted, if appropriate, as
provided in the Offer to Purchase), (b) present such Shares and all Other
Securities for transfer on the books of the Company, and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares and all Other Securities, all in accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Parent, Robert H. Bohannon,
Philip W. Milne and Michael J. Berry, and each of them, or any other designees
of Purchaser, the attorneys and proxies of the undersigned, each with full power
of substitution, to the full extent of the undersigned's rights, including to
exercise such voting and other rights as each such attorney and proxy or his (or
her) substitute shall, in his (or her) sole discretion, deem proper, and
otherwise act (including pursuant to written consent), with respect to all of
the Shares tendered hereby which have been accepted for payment by Purchaser
(and any and all Other Securities issued or issuable in respect thereof on or
after April 4, 1998), which the undersigned is entitled to vote at any meeting
of stockholders of the Company (whether annual or special and whether or not an
adjourned meeting), or written consent in lieu of such meeting, or otherwise.
This proxy and power of attorney is coupled with an interest in the Shares
tendered hereby and is irrevocable and is granted in consideration of, and is
effective upon, the acceptance for payment of such Shares by Purchaser in
accordance with the terms of the Offer. Such acceptance for payment shall,
without further action, revoke all prior proxies and consents granted by the
undersigned with respect to such Shares and all Other Securities, and no
subsequent proxy or power of attorney or written consent shall be given (and if
given or executed, shall be deemed not to be effective) with respect thereto by
the undersigned. Purchaser reserves the right to require that, in order for
Shares to be deemed validly tendered, immediately upon Purchaser's acceptance
for payment of such Shares, Purchaser is able to exercise full voting and other
rights with respect to such Shares (including voting at any meeting of
stockholders then scheduled or acting by written consent without a meeting).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares and all
Other Securities tendered hereby, and that when such
<PAGE> 4
Shares are accepted for payment by Purchaser, Purchaser will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances, and that none of such Shares will be
subject to any adverse claim. The undersigned, upon request, shall execute and
deliver any signature guarantees or additional documents deemed by the
Depositary or Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby and all Other Securities.
In addition, the undersigned shall remit and transfer to the Depository for the
account of Purchaser all Other Securities in respect of the Shares tendered
hereby, accompanied by appropriate documentation of transfer, and pending such
remittance or appropriate assurance thereof, Purchaser shall be entitled to all
rights and privileges as owner of such Other Securities and may withhold the
entire purchase price or value thereof, as determined by Purchaser in its sole
discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned. Except as stated in
the Offer to Purchase, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and Purchaser upon the terms and subject to the conditions of the Offer. The
undersigned recognizes that under certain circumstances set forth in the Offer
to Purchase, Purchaser may not be required to accept for payment any of the
Shares tendered hereby. The Purchaser's acceptance for payment of Shares
pursuant to the Offer will constitute a binding agreement between the
undersigned and the Purchaser upon the terms and subject to the conditions of
the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Stock
Certificates evidencing Shares not tendered or not accepted for payment in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered." Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price and/or return any
Stock Certificates evidencing Shares not tendered or accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Shares Tendered." In the event that
both the Special Delivery Instructions and the Special Payment Instructions are
completed, please issue the check for the purchase price and/or return any Stock
Certificates evidencing Shares not purchased (together with accompanying
documents as appropriate) in the name(s) of, and deliver said check and/or
return such Stock Certificates to, the person or persons so indicated.
Stockholders tendering Shares by book-entry transfer may request that any
Shares not accepted for payment be returned by crediting such account maintained
at the Book-Entry Transfer Facility as such stockholder may designate by making
an appropriate entry under "Special Payment Instructions." The undersigned
recognizes that Purchaser has no obligation pursuant to the Special Payment
Instructions to transfer any Shares from the name of the registered holder(s)
thereof if Purchaser does not accept for payment any of the Shares so tendered.
<PAGE> 5
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6, AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Stock Certificates evidencing Shares not tendered or not
purchased are to be issued in the name of someone other than the
undersigned.
Issue Check and/or Certificate(s) to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
(PLEASE PRINT)
------------------------------------------------------------
(ZIP CODE)
------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
[ ] Check here if any of the Stock Certificates that you own and wish to
tender have been lost, destroyed or stolen. (See Instruction 11.)
Number of Shares represented by lost, destroyed or stolen certificates:
----------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Stock Certificates evidencing Shares not tendered or not
purchased are to be mailed to someone other than the undersigned, or to
the undersigned at an address other than that shown under "Description of
Shares Tendered."
Mail Check and/or Certificate(s) to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
(PLEASE PRINT)
------------------------------------------------------------
(ZIP CODE)
------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
(PLEASE ALSO COMPLETE THE ENCLOSED SUBSTITUTE FORM W-9 HEREIN)
<PAGE> 6
IMPORTANT
STOCKHOLDERS SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
SIGNATURE(S) OF HOLDER(S)
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of corporation or any person acting in a fiduciary or
representative capacity, please set forth full title and provide proper evidence
of such capacity. See Instruction 5. For information concerning signature
guarantees, see Instruction 1.)
Dated:
- --------------------------- , 1998
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Capacity (full title):
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDING ZIP CODE)
<TABLE>
<S> <C>
Area Code and
Telephone No. (Home): ----------------------------- (Business): --------------------------------------------
</TABLE>
Tax Identification or Social Security Number:
- ----------------------------------------------------------------------
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
- --------------------------------------------------------------------------------
AUTHORIZED SIGNATURE
- --------------------------------------------------------------------------------
NAME (PLEASE PRINT OR TYPE)
- -------------------------------------- --------------------------------------
FULL TITLE NAME OF FIRM
- --------------------------------------------------------------------------------
ADDRESS (INCLUDE ZIP CODE)
- --------------------------------------------------------------------------------
AREA CODE AND TELEPHONE NUMBER
Date:
- --------------------------- , 1998
<PAGE> 7
INSTRUCTIONS
(FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER)
1. Guarantee of Signatures. All signatures on this Letter of Transmittal
must be guaranteed by a firm which is a member of the Medallion Signature
Guarantee Program, or by any other "eligible guarantor institution," as such is
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended
(each, an "Eligible Institution"), except in cases where (i) this Letter of
Transmittal is signed by the registered holder(s) of Shares (which term, for the
purposes of this document, shall include any participant in the Book-Entry
Transfer Facility whose name appears on a security position listing as the owner
of Shares) tendered hereby and such holder(s) has (have) not completed either
the box entitled "Special Delivery Instructions" or the box entitled "Special
Payment Instructions" on this Letter of Transmittal or (ii) such Shares are
tendered for the account of an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Stock Certificates; Guaranteed
Delivery Procedures. This Letter of Transmittal is to be completed by
stockholders either if Stock Certificates are to be forwarded herewith or if a
tender of Shares is to be made pursuant to the procedures for delivery by
book-entry transfer set forth in Section 3 of the Offer to Purchase. Stock
Certificates evidencing all physically tendered Shares, or confirmation
("Book-Entry Confirmation") of any book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility of Shares delivered by book-entry
transfer as well as a properly completed and duly executed Letter of Transmittal
(or an Agent's Message, in the case of a book-entry transfer), must be received
by the Depositary, at one of the addresses set forth herein prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase). If Stock
Certificates are forwarded to the Depositary in multiple deliveries, a properly
completed and duly executed Letter of Transmittal must accompany each such
delivery. Stockholders whose Stock Certificates are not immediately available,
who cannot deliver their Stock Certificates and all other required documents to
the Depositary prior to the Expiration Date or who cannot comply with the
book-entry transfer procedures on a timely basis may tender their Shares by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant
to the guaranteed delivery procedure set forth in Section 3 of the Offer to
Purchase. Pursuant to such procedure, (i) such tender must be made by or through
an Eligible Institution, (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by Purchaser, must be
received by the Depositary prior to the Expiration Date and (iii) the Stock
Certificates evidencing all physically tendered Shares (or Book-Entry
Confirmation with respect to such Shares), as well as a properly completed and
duly executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees (or an Agent's Message, in the case of a book-entry
transfer) and any other documents required by this Letter of Transmittal, must
be received by the Depositary within three New York Stock Exchange trading days
after the date of execution of such Notice of Guaranteed Delivery, all as
provided in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARES AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. INSTEAD OF DELIVERY
BY MAIL, IT IS RECOMMENDED THAT STOCKHOLDERS USE AN OVERNIGHT OR HAND-DELIVERY
SERVICE, PROPERLY INSURED. IF DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT SUCH
CERTIFICATES AND DOCUMENTS BE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH
RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
INSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted. All
tendering stockholders, by execution of this Letter of Transmittal (or facsimile
thereof), waive any right to receive any notice of the acceptance of their
Shares for payment.
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the certificate numbers and/or the number of
Shares tendered should be listed on a separate signed schedule and attached
hereto.
<PAGE> 8
4. Partial Tenders. (Not applicable to stockholders who tender by
book-entry transfer.) If fewer than all the Shares evidenced by any Stock
Certificate submitted are to be tendered, fill in the number of Shares which are
to be tendered in the box entitled "Number of Shares Tendered." In such case,
new Stock Certificate(s) evidencing the remainder of the Shares that were
evidenced by the old Stock Certificate(s) will be sent to the registered holder,
unless otherwise provided in the appropriate box on this Letter of Transmittal,
as soon as practicable after the Expiration Date. All Shares represented by
Stock Certificates delivered to the Depositary will be deemed to have been
tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the Stock Certificate(s) without alteration, enlargement
or any change whatsoever. If any of the Shares tendered hereby are held of
record by two or more persons, all such persons must sign this Letter of
Transmittal.
If any tendered Shares are registered in different names on several Stock
Certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of such Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares evidenced by Stock Certificates listed and transmitted hereby, no
endorsements of Stock Certificates or separate stock powers are required unless
payment is to be made to or Stock Certificates evidencing Shares not tendered or
purchased are to be issued in the name of a person other than the registered
holder(s), in which case the Stock Certificate(s) evidencing the Shares tendered
hereby must be endorsed or accompanied by appropriate stock powers, in either
case signed exactly as the name(s) of the registered holder(s) appear(s) on such
Stock Certificate(s). Signatures on such certificates and stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Stock Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names of
the registered stockholder or stockholders appear on the Stock Certificate(s).
Signatures on such Stock Certificate(s) or stock powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal or any Stock Certificates or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact, agent,
officer of a corporation or any person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.
6. Stock Transfer Taxes. Except as set forth in this Instruction 6,
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of Shares to it or its order pursuant to the Offer. If,
however, payment of the purchase price is to be made to, or if Stock
Certificates evidencing Shares not tendered or purchased are to be registered in
the name of, any person other than the registered holder(s), or if Stock
Certificates evidencing tendered Shares are registered in the name of any person
other than the person(s) signing this Letter of Transmittal, the amount of any
stock transfer taxes (whether imposed on the registered holder(s) or such other
person) payable on account of the transfer to such person will be deducted from
the purchase price unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted. Except as provided in this instruction 6, it
will not be necessary for transfer tax stamps to be affixed to the
certificate(s) listed in this Letter of Transmittal.
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Stock Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name of
a person other than the person(s) signing this Letter of Transmittal or if such
check or any such Stock Certificate is to be sent and/or any Stock Certificates
are to be returned to someone other than the signer above, or to the signer
above but at an address other than that shown in the box entitled "Description
of Shares Tendered" on the first page hereof, the appropriate boxes on this
Letter of Transmittal should be completed. Stockholders tendering Shares by
book-entry transfer may request that Shares not purchased be credited to such
account maintained at the Book-Entry Transfer Facility as such stockholder
<PAGE> 9
may designate under "Special Delivery Instructions." If no such instructions are
given, any such Shares not purchased will be returned by crediting the account
at the Book-Entry Transfer Facility designated above.
8. Request for Assistance or Additional Copies. Requests for assistance
may be directed to, or additional copies of the Offer to Purchase, this Letter
of Transmittal and the Notice of Guaranteed Delivery may be obtained from, the
Information Agent or the Dealer Manager at the telephone numbers and addresses
set forth below. Stockholders may also contact their broker, dealer, commercial
bank or trust company.
9. Waiver of Conditions. Except as otherwise provided in the Offer to
Purchase, Purchaser reserves the right in its sole discretion to waive in whole
or in part at any time or from time to time any of the specified conditions of
the Offer or any defect or irregularity in tender with regard to any Shares
tendered.
10. Substitute Form W-9. The tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN"), generally
the stockholder's social security or employer identification number, on
Substitute Form W-9, which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, whether he or she is subject to
backup withholding of federal income tax. If a tendering stockholder is subject
to backup withholding, he or she must cross out item (2) of the Certification
Box in Part 2 on Substitute Form W-9. Failure to provide the information on
Substitute Form W-9 may subject the tendering stockholder to 31% federal income
tax withholding on the payment of the purchase price. If the tendering
stockholder has not been issued a TIN and has applied for a number or intends to
apply for a number in the near future, he or she should write "Applied For" in
the space provided for the TIN in Part 1, check the box entitled "Awaiting TIN"
in Part 3, sign and date the Substitute Form W-9, and sign and date the
Certificate of Awaiting Taxpayer Identification Number. Notwithstanding that the
box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification
Number is completed, the Depositary will withhold 31% of all payments made prior
to the time a properly certified TIN is provided to the Depositary.
11. Mutilated, Lost, Stolen or Destroyed Certificates. Any holder of a
Stock Certificate whose certificate(s) has been mutilated, lost, stolen or
destroyed should (i) complete this Letter of Transmittal and check the
appropriate box on this Letter of Transmittal and (ii) complete and return to
the Depositary any additional documentation, including the posting of any
indemnity bond, requested by the Depositary. If required by Purchaser, the
holder will be required to post a bond in such reasonable amount as Purchaser
may direct as indemnity against any claim that may be made against Parent,
Purchaser or any of their respective affiliates with respect to such
certificate(s).
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (OR AN AGENT'S MESSAGE, IN THE CASE OF A BOOK-ENTRY
TRANSFER), TOGETHER WITH CERTIFICATES (OR BOOK-ENTRY CONFIRMATION) AND ALL OTHER
REQUIRED DOCUMENTS OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE
EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payor) with such
stockholder's correct TIN on Substitute Form W-9 below or otherwise establish a
basis for exemption from backup withholding. If such stockholder is an
individual, the TIN is such stockholder's Social Security Number. If the
Depositary is not provided with the correct TIN or a certificate of exemption
from backup withholding or other adequate basis for exemption, the stockholder
may be subject to a $50 penalty imposed by the Internal Revenue Service and
payments made to a holder with respect to the Shares pursuant to the Offer may
be subject to backup withholding. Failure to comply truthfully with the backup
withholding requirements may also result in the imposition of severe criminal
and/or civil fines or penalties.
Certain stockholders (including, among others, corporations and foreign
individuals or entities) are not subject to these backup withholding
requirements. Exempt stockholders should furnish their TIN, write
<PAGE> 10
"Exempt" on the face of the substitute Form W-9, and sign, date and return the
Substitute Form W-9 to the Depositary. A foreign individual or entity may
qualify as an exempt recipient by submitting to the Depositary a properly
completed Internal Revenue Service Form W-8, signed under penalties of perjury,
attesting to that holder's foreign status. A Form W-8 can be obtained from the
Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of tax, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares tendered pursuant to the Offer, the stockholder is
required to notify the Depositary of his or her correct TIN by completing the
Substitute Form W-9 contained herein, certifying that the TIN provided on the
Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN) and
that (1) the stockholder is exempt from backup withholding, (2) the stockholder
has not been notified by the Internal Revenue Service that he or she is subject
to backup withholding as a result of a failure to report all interest or
dividends, or (3) the Internal Revenue Service has notified the stockholder that
he or she is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual owner,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidance on which number to report.
If the tendering stockholder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future, he or she should
write "Applied For" in the space provided for the TIN in Part 1, check the box
entitled "Awaiting TIN" in Part 3, sign and date the Substitute Form W-9, and
sign and date the Certificate of Awaiting Taxpayer Identification Number.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
<PAGE> 11
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: ------------------------
- ----------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT Social Security Number or
FORM W-9 AND CERTIFY BY SIGNING AND DATING BELOW.
/ /
----------------------------
Taxpayer Identification Number
-----------------------------------------------------------------------------------------------
PART 2 -- Certification -- Under penalties of
perjury, I certify that:
PAYER'S REQUEST FOR (1) The number shown on this form is my correct Taxpayer Identification Number (or I am
TAXPAYER IDENTIFICATION waiting for a number to be issued to me), and
NUMBER (TIN) (2) I am not subject to backup withholding because (i) I am exempt from backup
withholding, (ii) I have not been notified by the Internal Revenue Service ("IRS") that I
am subject to backup withholding as a result of a failure to report all interest or
dividends, or (iii) the IRS has notified me that I am no longer subject to backup
withholding.
-----------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out item PART 3 --
(2) in Part 2 above if you have been notified by the
IRS that you are currently subject to backup
withholding because of underreporting interest or Awaiting TIN
dividends on your tax return. However, if after being [ ]
notified by the IRS that you are subject to backup
withholding you received another notification from
the IRS stating that you are no longer subject to
backup withholding, do not cross out item (2).
Signature --------------------- Date -----------, 1998
Name (Please Print)-----------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF
ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE
FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM
W-9.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me and either (a) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office, or (b) I intend to mail or deliver an application
in the near future. I understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of all reportable
payments made to me will be withheld.
<TABLE>
<S> <C>
Signature Date ---------------------,
- ------------------------------------------------------------ 1998
Name (Please Print)
- ------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE> 12
Any questions concerning the completion of this form or tender procedures
or requests for additional copies of the Offer to Purchase or this Letter of
Transmittal should be directed to the Information Agent for the Offer.
MacKenzie Partners, Inc. Logo
156 Fifth Avenue
New York, New York 10010
Call Collect: (212) 959-5500
or
Toll-Free (800) 322-2885
Any questions concerning the terms of the Offer should be directed to the
Dealer Manager.
SALOMON SMITH BARNEY
333 South Hope Street
Suite 3200
Los Angeles, California 90071
(213) 253-1842 (Call Collect)
Shares tendered, together with this Letter of Transmittal and any other
required documents, must be delivered to the Depositary at its address set forth
on the front page hereof.
<PAGE> 1
EXHIBIT 99(a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
MONEYGRAM PAYMENT SYSTEMS, INC.
AT
$17.00 NET PER SHARE
PURSUANT TO THE OFFER TO PURCHASE DATED APRIL 10, 1998
BY
PINE VALLEY ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
VIAD CORP
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 NOON,
NEW YORK CITY TIME, ON FRIDAY, MAY 8, 1998, UNLESS THE OFFER IS EXTENDED.
As set forth in Section 3 of the Offer to Purchase (as defined below), this
Notice of Guaranteed Delivery, or one substantially in the form hereof, must be
used to accept the Offer (as defined below) (i) if certificates ("Stock
Certificates") evidencing shares of common stock, par value $.01 per share (the
"Common Stock" or the "Shares") of MONEYGRAM PAYMENT SYSTEMS, INC., a Delaware
corporation (the "Company"), are not immediately available, (ii) if Stock
Certificates and all other required documents cannot be delivered to Norwest
Bank Minnesota, N.A., as Depositary (the "Depositary"), prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) or (iii) if the
procedures for delivery by book-entry transfer cannot be completed on a timely
basis. This Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by facsimile transmission to the Depositary. See Section 3 of the
Offer to Purchase.
The Depositary for the Offer is:
NORWEST BANK MINNESOTA, N.A.
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Overnight Courier:
Norwest Shareowner Services (612) 450-4163 Norwest Shareowner Services
P.O. Box 64858 Confirm by Telephone: Reorganization Department
St. Paul, MN 55164-0858 (612) 450-4110 161 North Concord Exchange
South St. Paul, MN 55075
By Hand:
Norwest Shareowner Service The Depository Trust Company
161 North Concord Exchange 55 Water Street
2nd Floor 1st Floor
South St. Paul, MN 55075 New York, NY 10041
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
<PAGE> 2
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
QUESTIONS REGARDING THE OFFER OR COMPLETION OF THIS NOTICE OF GUARANTEED
DELIVERY SHOULD BE DIRECTED TO MACKENZIE PARTNERS, INC., THE INFORMATION AGENT
FOR THE OFFER, AT 156 FIFTH AVENUE, NEW YORK, NEW YORK 10010. CALL COLLECT AT
(212) 929-5500 OR TOLL FREE AT (800) 322-2885.
Ladies and Gentlemen:
The undersigned hereby tenders to PINE VALLEY ACQUISITION CORPORATION, a
Delaware corporation and a wholly owned subsidiary of VIAD CORP, a Delaware
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase dated April 10, 1998 (the "Offer to Purchase") and the related
Letter of Transmittal (which, as amended or supplemented from time to time,
together constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares specified below pursuant to the guaranteed
delivery procedure described in Section 3 of the Offer to Purchase.
The undersigned authorizes the Depositary to deliver this Notice of
Guaranteed Delivery to Purchaser as evidence of the undersigned's acceptance of
the terms and conditions of the Offer, including the terms and conditions of the
Letter of Transmittal, and understands that the acceptance given hereby will be
effective upon receipt of the Notice of Guaranteed Delivery by the Depositary,
regardless of whether or when the certificate(s) for the tendered Shares (or
confirmation of book entry transfer of the Shares into the Depositary's account
at a Book-Entry Transfer Facility), the executed Letter of Transmittal (or, in
the case of a book entry transfer, an Agent's Message), and any other required
documents are received by the Depositary.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to accept the Offer. The undersigned will, upon
request, execute and deliver any additional documents deemed by the Depositary,
Purchaser, Parent or the Company to be necessary or desirable to perfect the
undersigned's acceptance of Offer, as indicated below.
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TO BE TENDERED
- -------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S) (PLEASE FILL
IN EXACTLY AS NAME APPEARS ON FACE TOTAL NUMBER
OF THE STOCK CERTIFICATES TENDERED STOCK OF SHARES NUMBER
OR ON A SECURITY POSITION LISTING CERTIFICATE REPRESENTED OF SHARES
WITH RESPECT TO SUCH SHARES) NUMBER(S)* BY CERTIFICATES** TENDERED
- -------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
* Need not be completed by shareholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Stock Certificate
delivered to the Depositary are being tendered hereby.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 3
PLEASE SIGN AND COMPLETE
Name(s) of Record Holder:
- --------------------------------------------------------------------------------
---------------------------------------------------------
Signature(s):
- --------------------------------------------------------------------------------
Name(s) (please print):
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Area Code and Telephone Number:
- --------------------------------------------------------------------------------
Date:
- --------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member firm of the Medallion Signature
Guarantee Program, or any other Eligible Institution as defined in the Offer to
Purchase, hereby guarantees to deposit with the Depositary, at one of its
addresses set forth above, certificates evidencing the Notes tendered hereby or
timely confirmation of the book-entry transfer of the Stock Certificates into
the Depositary's account at the book-entry transfer facility described in
Section 3 of the Offer to Purchase together with a properly completed and duly
executed Letter of Transmittal, and any other documents required by the Letter
of Transmittal, all within three (3) New York Stock Exchange trading days after
the date of execution of this Notice of Guaranteed Delivery.
SIGN HERE
Name of Firm:
- --------------------------------------------------------------------------------
Authorized Signature:
- --------------------------------------------------------------------------------
Name (please type or print):
- --------------------------------------------------------------------------------
Title:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
-------------------------------------------------------------------------
Area Code and Telephone Number:
- --------------------------------------------------------------------------------
Date:
- --------------------------------------------------------------------------------
DO NOT SEND SHARES WITH THIS FORM. ACTUAL SURRENDER OF SHARES MUST BE MADE
PURSUANT TO, AND ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER
OF TRANSMITTAL (OR, IN THE CASE OF A BOOK ENTRY TRANSFER, AN AGENT'S MESSAGE)
AND ANY OTHER REQUIRED DOCUMENTS.
3
<PAGE> 4
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed
and duly executed copy of this Notice of Guaranteed Delivery (or facsimile
thereof) and any other documents required by this Notice of Guaranteed Delivery
must be received by the Depositary at its address set forth herein on or prior
to the Expiration Date. The method of delivery of this Notice of Guaranteed
Delivery and any other required documents to the Depositary is at the election
and risk of the holder, and the delivery will be deemed made only when actually
received by the Depositary. Instead of delivery by mail, it is recommended that
the holder use an overnight or hand-delivery service, properly insured. If
delivery is by mail, it is recommended that such certificates and documents be
sent by registered mail, properly insured, with return receipt requested. In all
cases sufficient time should be allowed to assure timely delivery.
2. SIGNATURES ON THIS NOTICE OF GUARANTEED DELIVERY. If this Notice of
Guaranteed Delivery is signed by the holder(s) of the Shares specified herein,
the signature(s) must correspond with exactly the name(s) as written on the face
of the Stock Certificates or on a security position listing with respect thereto
without any alteration, enlargement or change whatsoever. If any of the tendered
Shares are held by two or more persons, all such persons must sign this Notice
of Guaranteed Delivery. If any of the tendered Shares are registered in
different names, it will be necessary to complete, sign and submit as many
separate Notices of Guaranteed Delivery as there are different registrations.
If this Notice of Guaranteed Delivery is signed by a person other than the
holder(s) of any Shares specified herein or a participant of the Book-Entry
Transfer Facility, this Notice of Guaranteed Delivery must be accompanied by
appropriate stock powers, signed as the name of the holder(s) appears on the
Stock Certificates or signed as the name of the participant shown on the
Book-Entry Transfer Facility's security position listing.
If this Notice of Guaranteed Delivery or any other instruments of transfer
are signed by a trustee, executor, administrator, guardian, attorney-in-fact,
agent, officer of a corporation, or other person(s) acting in a fiduciary or
representative capacity, such person(s) should so indicate when signing and must
submit proper evidence satisfactory to the Depositary and Purchaser of their
authority so to act.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
or additional copies of the Offer to Purchase or the Letter of Transmittal or
this Notice of Guaranteed Delivery should be directed to the Information Agent
at the telephone number set forth on the cover hereof or at the address and
telephone number set forth on the back cover page of the Letter of Transmittal
and on the back cover page of the Offer to Purchase.
4
<PAGE> 1
EXHIBIT 99(a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
MONEYGRAM PAYMENT SYSTEMS, INC.
AT
$17.00 NET PER SHARE
BY
PINE VALLEY ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
VIAD CORP
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 NOON, NEW YORK CITY TIME,
ON FRIDAY, MAY 8, 1998, UNLESS THE OFFER IS EXTENDED.
April 10, 1998
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been appointed by PINE VALLEY ACQUISITION CORPORATION, a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of VIAD CORP, a Delaware
corporation ("Parent"), to act as Dealer Manager in connection with its offer to
purchase all outstanding shares of common stock, par value $.01 per share
(collectively, the "Shares"), of MONEYGRAM PAYMENT SYSTEMS, INC., a Delaware
corporation (the "Company"), at $17.00 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in the
Purchaser's Offer to Purchase dated April 10, 1998 (the "Offer to Purchase") and
in the related Letter of Transmittal (which, as amended or supplemented from
time to time, together constitute the "Offer"), copies of which are enclosed
herewith.
For your information and for forwarding to your clients for whose accounts
you hold Shares registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. Offer to Purchase;
2. Letter of Transmittal for your use and for the information of your
clients, together with Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information relating
to backup federal income tax withholding;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares and all other required documents cannot be delivered to the
Depositary by the Expiration Date (as defined in the Offer to Purchase);
4. A form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer;
5. Solicitation/Recommendation Statement on Schedule 14D-9 issued by
the Company; and
6. A return envelope addressed to Norwest Bank Minnesota, N.A., as
the Depositary.
<PAGE> 2
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of April 4, 1998 (the "Merger Agreement"), by and among Parent, Purchaser and
the Company. The Merger Agreement provides that, among other things, following
the consummation of the Offer and the satisfaction or waiver of the other
conditions set forth in the Merger Agreement, Purchaser will be merged with and
into the Company (the "Merger"). At the effective time of the Merger, each
outstanding Share (other than Shares held in the treasury of the Company, owned
by Parent, Purchaser or any wholly owned subsidiary of Parent or the Company or
held by stockholders who perfect their dissenters' rights under Delaware law)
will be converted into the right to receive the per Share price paid in the
Offer, without interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER, HAS DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY
AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND APPROVE THE
MERGER.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will be deemed to have accepted for payment, and will
pay for, all Shares validly tendered and not properly withdrawn by the
Expiration Date (as defined in the Offer to Purchase) if, as and when the
Purchaser gives oral or written notice to the Depositary of the Purchaser's
acceptance of the tenders of such Shares for payment pursuant to the Offer.
Payment for Shares purchased pursuant to the Offer will be made only after
timely receipt by the Depositary of (i) certificates evidencing such Shares or
timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility (as defined in Section
3 of the Offer to Purchase), (ii) a properly completed and duly executed Letter
of Transmittal (or facsimile thereof) or, in the case of a book-entry transfer,
an Agent's Message (as defined in the Offer to Purchase) and (iii) any other
documents required by the Letter of Transmittal.
In order to tender Shares pursuant to the Offer, a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message (in the case of any book-entry
transfer), and any other documents required by the Letter of Transmittal, should
be sent to the Depositary, and either certificates representing the tendered
Shares should be delivered or such Shares must be delivered to the Depositary
pursuant to the procedures for book-entry transfers, all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender their Shares, but it is impracticable
for them to deliver their certificates on or prior to the Expiration Date or to
comply with the book-entry transfer procedures on a timely basis, a tender may
be effected by following the guaranteed delivery procedures specified in Section
3 of the Offer to Purchase.
Neither Parent nor Purchaser will pay any fees or commissions to any
broker, dealer or other person (other than the Dealer Manager, the Information
Agent and the Depositary as described in the Offer to Purchase) in connection
with the solicitation of tenders of Shares pursuant to the Offer. Purchaser
will, however, upon request, reimburse brokers, dealers, commercial banks and
trust companies for reasonable expenses incurred by them in forwarding materials
to their customers. Purchaser will pay all stock transfer taxes applicable to
its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the
Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 NOON,
NEW YORK CITY TIME, ON MAY 8, 1998, UNLESS THE OFFER IS EXTENDED.
2
<PAGE> 3
Any inquiries you may have with respect to the Offer may be addressed to
the Information Agent or the undersigned at the addresses and telephone numbers
set forth on the back cover page of the Offer to Purchase. Requests for
additional copies of the enclosed materials may be directed to the Information
Agent or the Dealer Manager.
Very truly yours,
Salomon Smith Barney
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY PERSON THE AGENT OF PURCHASER, PARENT, THE COMPANY, ANY AFFILIATE OF THE
COMPANY, THE DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE> 1
EXHIBIT 99(a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
MONEYGRAM PAYMENT SYSTEMS, INC.
AT
$17.00 NET PER SHARE
BY
PINE VALLEY ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
VIAD CORP
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 NOON, NEW YORK CITY TIME,
ON FRIDAY, MAY 8, 1998, UNLESS THE OFFER IS EXTENDED.
April 10, 1998
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated April 10,
1998 (the "Offer to Purchase") and the related Letter of Transmittal (which, as
amended or supplemented from time to time, together constitute the "Offer") and
other materials relating to the Offer by PINE VALLEY ACQUISITION CORPORATION, a
Delaware corporation ("Purchaser") and a wholly owned subsidiary of VIAD CORP, a
Delaware corporation ("Parent"), to purchase all of the outstanding shares of
common stock, par value $.01 per share (collectively, the "Shares"), of
MONEYGRAM PAYMENT SYSTEMS, INC., a Delaware corporation (the "Company"), at
$17.00 per Share, net to the seller in cash, without interest, upon the terms
and subject to the conditions set forth in the Offer. Also enclosed is the
letter to stockholders of the Company from the Chairman of the Board and Chief
Executive Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9. This material is being
sent to you as the beneficial owner of Shares held by us for your account but
not registered in your name. A tender of such Shares can be made only by us as
the holder of record and pursuant to your instructions. The Letter of
Transmittal accompanying this letter is furnished to you for your information
only and cannot be used by you to tender Shares held by us for your account.
We request instructions as to whether you wish to have us tender any or all
of the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender price is $17.00 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions of the
Offer.
2. The Offer and withdrawal rights will expire at 12:00 Noon, New
York City time, on Friday, May 8, 1998, unless the Offer is extended.
3. The Offer is being made pursuant to an Agreement and Plan of
Merger, dated as of April 4, 1998 (the "Merger Agreement"), by and among
Parent, Purchaser and the Company. The Merger Agreement provides that,
among other things, following the consummation of the Offer and the
satisfaction or waiver of the other conditions set forth in the Merger
Agreement, Purchaser will be
<PAGE> 2
merged with and into the Company (the "Merger"). At the effective time of
the Merger, each outstanding Share (other than Shares held in the treasury
of the Company, owned by Parent, Purchaser or any wholly owned subsidiary
of Parent or the Company or held by stockholders who perfect their
dissenters' rights under Delaware law) will be converted into the right to
receive the per Share price paid in the Offer, without interest.
4. Purchaser reserves the right, in its sole discretion, at any time
or from time to time, subject to the terms of the Merger Agreement, to
extend the period of time during which the Offer is open by giving oral or
written notice of such extension to Norwest Bank Minnesota, N.A. (the
"Depositary"). Any such extension will be followed as promptly as
practicable by a public announcement thereof no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
date on which the Offer was to expire. During any such extension, all
Shares previously tendered and not withdrawn will remain subject to the
Offer. If, on the initial scheduled expiration date of the Offer, (A) the
sole condition remaining unsatisfied is either (x) the failure of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act ("HSR
Act") to have expired or been terminated, or (y) the failure to obtain a
Pre-Offer Approval relating to certain regulatory approvals (as defined in
the Merger Agreement), the Purchaser shall extend the Offer from time to
time until five business days after the later of expiration or termination
of the waiting period under the HSR Act or the receipt of all Pre-Offer
Approvals or (B) if the sole condition remaining unsatisfied on the initial
scheduled expiration date of the Offer is due to the Company's failure to
perform in any material respect any obligation or to comply in any material
respect with any agreement or covenant of the Company to be performed or
complied with by it under the Merger Agreement, the Purchaser shall, so
long as the breach can be cured and the Company is vigorously attempting to
cure such breach, extend the Offer from time to time until five business
days after such breach is cured (provided that Purchaser shall not be
required to extend the Offer under (A) or (B) above beyond 45 calendar days
after such initial scheduled expiration date).
5. The Board of Directors of the Company has unanimously approved the
Merger Agreement, the Offer and the Merger, has determined that the Offer
and the Merger are fair to and in the best interests of the stockholders of
the Company and unanimously recommends that stockholders accept the Offer
and approve the Merger.
6. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the Offer, at
least that number of Shares constitute a majority of the outstanding Shares
of the Company on a fully diluted basis ("Minimum Condition"). Subject to
the terms of the Merger Agreement, the Offer is also subject to other terms
and conditions set forth in the Offer to Purchase, which may be waived by
Purchaser or Parent in whole or in part at any time and from time to time
in their sole discretion, provided, however, that the Minimum Condition may
not be waived without the prior approval of the Company and that no change
may be made which decreases the price per Share payable in the Offer or
which imposes conditions to the Offer in addition to those set forth in the
Merger Agreement.
7. Any stock transfer taxes applicable to the sale of Shares to
Purchaser pursuant to the Offer will be paid by Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
The Offer is being made to all holders of Shares. The Offer is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares in
any jurisdiction in which the making of the Offer or acceptance thereof would
not be in compliance with the laws of such jurisdiction. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
Purchaser by Salomon Smith Barney or one or more registered brokers or dealers
licensed under the laws of such jurisdictions.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing and returning to us the
instruction form set forth below. Please forward your instructions to us in
ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer. If you authorize the tender of your Shares, all such
Shares will be tendered unless otherwise specified on the instruction form set
forth below.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
MONEYGRAM PAYMENT SYSTEMS, INC.
AT $17.00 NET PER SHARE
BY
PINE VALLEY ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
VIAD CORP
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated April 10, 1998 and the related Letter of Transmittal, in
connection with the offer by PINE VALLEY ACQUISITION CORPORATION, a Delaware
corporation and a wholly owned subsidiary of VIAD CORP, a Delaware corporation,
to purchase for cash all outstanding shares of common stock, par value $.01 per
share (collectively, the "Shares"), of MONEYGRAM PAYMENT SYSTEMS, INC., a
Delaware corporation.
This will instruct you to tender the number of Shares indicated below (or
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer and the related Letter of Transmittal.
Dated:
- --------------------------- , 1998
NUMBER OF SHARES TO BE TENDERED: --------------------------- SHARES*
Signature(s):
- --------------------------------------------------------------------------------
---------------------------------------------------------------------
Please Print Name(s):
- --------------------------------------------------------------------------------
Please Print Address(es):
- --------------------------------------------------------------------------------
Area Code and Telephone Number(s):
-----------------------------------------------
Tax Identification or Social Security Number(s):
---------------------------------------
* I (We) understand that if I (we) sign this instruction form without indicating
a lesser number of Shares in the space above, all Shares held by you for my
(our) account will be tendered.
<PAGE> 1
EXHIBIT 99(a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payor.
NAME. If you are an individual, you must generally enter the name shown on your
social security card. However, if you have changed your name, for instance, due
to marriage, without informing the Social Security Administration of the name
change, please enter your first name, the last name shown on your social
security card, and your new last name.
<TABLE>
<CAPTION>
- ------------------------------------------------------------
GIVE THE NAME AND
SOCIAL SECURITY
NUMBER OR
EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
<C> <S> <C>
1. Individual The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under state law
5. Sole proprietorship The owner(3)
- ------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------
GIVE THE NAME AND
SOCIAL SECURITY
NUMBER OR
EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
<C> <S> <C>
6. A valid trust, estate, or pension The legal entity(4)
trust
7. Corporate The corporation
8. Association, club, religious, The organization
charitable, educational, or other
tax-exempt organization
9. Partnership The partnership
10. A broker or registered nominee The broker or
nominee
11. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a state or
local government, school district,
or prison) that receives agricul-
tural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
your employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the TIN of the personal representative or trustee unless the
legal entity itself is not designated in the account title).
NOTE: If no name is circled when there is more than one name listed, the number
will be considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
Note: Section references are to the Internal Revenue Code of 1986, as amended,
unless otherwise noted.
PURPOSE OF FORM. A person who is required to file an information return with
the IRS must get your correct Taxpayer Identification Number ("TIN") to report,
for example, income paid to you, real estate transactions, mortgage interest you
paid, acquisition or abandonment of secured property, cancellation of debt, or
contributions you made to an IRA. Use Form W-9 to give your correct TIN to the
requester (the person requesting your TIN) and, when applicable, (1) to certify
the TIN you are giving is correct (or you are waiting for a number to be
issued), (2) to certify you are not subject to backup withholding, or (3) to
claim exemption from backup withholding if you are an exempt payee.
NOTE: If a requester gives you a form other than a W-9 to request your TIN, you
must use the requester's form if it is substantially similar to Form W-9.
WHAT IS BACKUP WITHHOLDING? Persons making certain payments to you must
withhold and pay to the IRS 31% of such payments under certain conditions. This
is called "backup withholding." Payments that may be subject to backup
withholding include interest, dividends, broker and barter exchange
transactions, rents, royalties, nonemployee pay, and certain payments from
fishing boat operators. Real estate transactions are not subject to backup
withholding. If you give the requester your correct TIN, make the proper
certifications, and report all your taxable interest and dividends on your tax
return, payments you receive will not be subject to backup withholding. Payments
you receive WILL be subject to backup withholding if:
1. You do not furnish your TIN to the requester, or
2. The IRS tells the requester that you furnished an incorrect TIN, or
3. The IRS tells you that you are subject to backup withholding because you did
not report all your interest and dividends on your tax return (for reportable
interest and dividends only), or
4. You do not certify to the requester that you are not subject to backup
withholding under 3 above (for reportable interest and dividend accounts opened
after 1983 only), or
5. You do not certify your TIN when required. See chart above for details.
Certain payees and payments are exempt from backup withholding and information
reporting. See below.
OBTAINING A TIN. If you do not have a TIN, apply for one immediately. You can
obtain Form SS-5, "Application for a Social Security Card" (for individuals),
Form W-7, "Application for IRS Individual Taxpayer Identification Number" (for
individuals who are not U.S. citizens or nationals), or Form SS-4, "Application
for Employer Identification Number" (for businesses and all other entities), at
the local office of the Social Security Administration or the IRS, or by calling
1-800-TAX-FORM (1-800-829-3676).
If you do not have a TIN, write "Applied For" in the space for the TIN in Part
1, check the box entitled "Awaiting TIN" in Part 3, sign and date the Substitute
Form W-9, and sign and date the Certificate of Awaiting Taxpayer Identification
Number, and give it to the requester. NOTE: Checking the box titled "Awaiting
TIN" on the form means that you have already applied for a TIN OR that you
intend to apply for one soon. Notwithstanding that the box in Part 3 is checked
and the Certificate of Awaiting Taxpayer Identification Number is completed, the
Depositary will withhold 31% of all payments made prior to the time a properly
certified TIN is provided to the Depositary.
As soon as you receive your TIN, complete another Form W-9, include your TIN,
sign and date the form, and give it to the requester.
PAYEES AND PAYMENTS EXEMPT FORM BACKUP WITHHOLDING. Individuals (including sole
proprietors) are NOT exempt from backup withholding. Corporations are exempt
from backup withholding for certain payments, such as interest and dividends.
If you are exempt from backup withholding, you should still complete Substitute
Form W-9 to avoid possible erroneous backup withholding. Enter your correct TIN
in Part 1, write "Exempt" on the face of the form, sign and date the form, and
return it to the Requester. If you are a nonresident alien or a foreign entity
not subject to backup withholding, give the requester a completed Form W-8,
"Certificate of Foreign Status."
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
items (1) through (13) and a person registered under the Investment Advisors Act
of 1940 who regularly acts as a broker are exempt. Payments subject to reporting
under sections 6041 and 6041A are generally exempt from backup withholding only
if made to payees described in items (1) through (7), except a corporation
(other than certain hospitals described in Regulations section 1.6041-3(c)) that
provides medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information reporting.
Only payees described in items (1) through (5) are exempt from backup
withholding for barter exchange transactions and patronage dividends.
(1) An organization exempt from tax under section 501(a), an IRA, or a
custodial account under section 403(b)(7) if the account satisfies the
requirements of section 401(f)(2).
(2) The United States or any of its agencies or instrumentalities.
(3) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(4) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(5) An international organization or any of its agencies or
instrumentalities.
(6) A corporation.
<PAGE> 3
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 -- (CONTINUED)
PAGE 3
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States, the District of Columbia or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends that generally are exempt from
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident alien partner.
- Payments of patronage dividends not paid in money.
- Payments made by certain foreign organizations.
- Section 404(k) payments made by an ESOP.
- Payments made to a nominee.
Payments of interest that generally are exempt from backup withholding
include the following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payor's trade or business and you have not provided
your correct TIN to the payor.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments of mortgage interest to you.
- Payments made to a nominee.
Exempt payees described above should file substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE REQUESTER, FURNISH YOUR
TIN, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE FORM AND RETURN
IT TO THE REQUESTER. IF YOU ARE A NONRESIDENT ALIEN OR A FOREIGN ENTITY NOT
SUBJECT TO BACKUP WITHHOLDING, FILE FORM W-8, "CERTIFICATE OF FOREIGN STATUS"
WITH THE REQUESTER.
Certain payments that are not subject to information reporting are also not
subject to backup withholding. For details, see sections 6041, 6041A, 6042,
6044, 6045, 6049, 6050A and 6050N and the regulations promulgated thereunder.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividends,
interest, or other payments to give TINs to persons who must report the payments
to the IRS. The IRS uses the numbers for identification purposes and to help
verify the accuracy of your tax return. The IRS may also provide the information
to the Department of Justice for civil and criminal litigation and to cities,
states and the District of Columbia to carry out their tax laws.
You must provide your TIN whether or not you are required to file a tax return.
Payors must generally withhold 31% of taxable interest, dividends, and certain
other payments to a payee who does not give a TIN to a payor. Certain penalties
may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TIN.--If you fail to furnish your correct TIN
to a requester, you are subject to a penalty of $50 for each such failure unless
your failure is due to reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis that results in no imposition of
backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
(4) MISUSE OF TINS.--If the requester discloses or uses TINs in violation of
Federal law, the requester may be subject to civil and criminal penalties.
FOR ADDITIONAL INFORMATION CONTACT YOUR
TAX CONSULTANT OR THE IRS.
<PAGE> 1
EXHIBIT 99(a)(7)
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SHARES (AS DEFINED BELOW). THE OFFER (AS DEFINED BELOW) IS MADE SOLELY
BY THE OFFER TO PURCHASE DATED APRIL 10, 1998 AND THE RELATED LETTER OF
TRANSMITTAL AND IS BEING MADE TO ALL HOLDERS OF SHARES. THE OFFER IS NOT BEING
MADE TO, NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF, HOLDERS OF SHARES IN
ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER OR ACCEPTANCE THEREOF WOULD
NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. IN THOSE JURISDICTIONS
WHERE SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE OFFER TO BE BY A LICENSED
BROKER OR DEALER, THE OFFER SHALL BE DEEMED TO BE MADE ON BEHALF OF PURCHASER
(AS DEFINED BELOW) BY SALOMON SMITH BARNEY OR ONE OR MORE REGISTERED BROKERS OR
DEALERS LICENSED UNDER THE LAWS OF SUCH JURISDICTIONS.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
MONEYGRAM PAYMENT SYSTEMS, INC.
AT
$17.00 NET PER SHARE
BY
PINE VALLEY ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
VIAD CORP
PINE VALLEY ACQUISITION CORPORATION, a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of VIAD CORP, a Delaware corporation
(the "Parent"), is offering to purchase all outstanding shares of common stock,
par value $.01 per share (the "Common Stock" or the "Shares"), of MONEYGRAM
PAYMENT SYSTEMS, INC., a Delaware corporation (the "Company"), at $17.00 per
Share, net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated April 10, 1998 (the
"Offer to Purchase") and in the related Letter of Transmittal (which, as amended
or supplemented from time to time, together constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 NOON, NEW YORK CITY
TIME, ON FRIDAY, MAY 8, 1998, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer, that number of
Shares which, together with any Shares beneficially owned by Parent or
Purchaser, represents at least a majority of the Shares outstanding on a fully
diluted basis. The Offer is subject to other terms and conditions, including the
expiration or termination of the applicable waiting period under the HSR Act and
the receipt of regulatory approvals, set forth in the Offer to Purchase. If any
such condition is not satisfied, Purchaser shall not be required to accept for
payment or pay for, and may delay the acceptance for payment of, or (whether or
not the Shares have theretofore been accepted for payment) the payment for, any
Shares tendered, and may terminate or extend the Offer and not accept for
payment any Shares in accordance with the terms of the Merger Agreement (as
defined below). Purchaser may waive any or all of the conditions to the Offer in
whole or in part at any time, to the extent permitted by applicable law and the
provisions of the Merger Agreement.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of April 4, 1998 (the "Merger Agreement"), by and among Parent, Purchaser and
the Company. The Merger Agreement provides that, among other things, following
the consummation of the Offer and the satisfaction or waiver of the other
<PAGE> 2
conditions set forth in the Merger Agreement, Purchaser will be merged with and
into the Company and become a wholly owned subsidiary of Parent (the "Merger").
At the effective time of the Merger, each outstanding Share (other than Shares
held in the treasury of the Company, owned by Parent, Purchaser or any wholly
owned subsidiary of Parent or held by stockholders who perfect their dissenters'
rights under Delaware law) will be converted into the right to receive the per
Share price paid in the Offer, without interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER, HAS UNANIMOUSLY DETERMINED THAT THE OFFER
AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE
COMPANY AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER.
The term "Expiration Date" means 12:00 noon, New York City time, on Friday,
May 8, 1998, unless and until the Purchaser, without the consent of the Company
shall have extended the period during which the offer is open in accordance with
the terms of the Merger Agreement, in which event, the term "Expiration Date"
shall mean the latest time and date at which the Offer, as so extended by the
Purchaser, shall expire.
Purchaser reserves the right, in its sole discretion, at any time or from
time to time, subject to the terms of the Merger Agreement and to applicable
securities laws, to extend the period of time during which the Offer is open by
giving oral or written notice of such extension to Norwest Bank Minnesota, N.A.
(the "Depositary"). Any such extension will be followed as promptly as
practicable by a public announcement thereof no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled date on which
the Offer was to expire. During any such extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer.
If, on the initial scheduled expiration date of the Offer, (A) the sole
condition remaining unsatisfied is either (x) the failure of the waiting period
under the HSR Act to have expired or been terminated, or (y) the failure to
obtain a Pre-Offer Approval relating to certain state regulatory approvals (as
defined in the Merger Agreement), the Purchaser shall extend the Offer from time
to time until five business days after the later of expiration or termination of
the waiting period under the HSR Act or the receipt of all Pre-Offer Approvals,
or (B) the sole condition remaining unsatisfied due the Company's failure to
perform in any material respect any obligation or to comply in any material
respect with any agreement or covenant of the Company to be performed or
complied with by it under the Merger Agreement, Purchaser shall, so long as the
breach can be cured and the Company is vigorously attempting to cure such
breach, extend the Offer from time to time until five business days after such
breach is cured (provided that the Purchaser shall not be required to extend the
Offer under (A) or (B) above beyond 45 calendar days after such initial
scheduled expiration date).
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment tendered Shares if, as and when Purchaser gives oral or written notice
to the Depositary of its acceptance of the tenders of such Shares. Upon the
terms and subject to the conditions of the Offer, payment for Shares accepted
for payment pursuant to the Offer will be made by deposit of the purchase price
therefor with its Depositary, which will act as agent for tendering stockholders
for the purpose of receiving payment from the Purchaser and transmitting
payment. Payment for Shares accepted for payment pursuant to the Offer will be
made only after timely receipt by the Depositary of certificates for such Shares
(or a timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility (as defined in the
Offer to Purchase)), a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) with any required signature guarantees (or in
the case of a book-entry transfer, an Agent's Message (as defined in the Offer
to Purchase)) and any other documents required by the Letter of Transmittal.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. After that, such tenders are irrevocable, except
that they may be withdrawn at any time after Monday, June 8, 1998, if they have
not previously been accepted for payment as provided in the Offer to Purchase.
To be effective, a written or facsimile transmission notice of withdrawal must
be timely received by the Depositary at one of its addresses set forth in the
Offer to Purchase and must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn, contain a
statement that
2
<PAGE> 3
such stockholder is withdrawing all or a portion of its tender, and the name of
the registered holder, if different from that of the person who tendered such
Shares.
If stock certificates evidencing Shares to be withdrawn have been delivered
to the Depositary or otherwise identified to the Depositary, a signed notice of
withdrawal with signatures guaranteed by an Eligible Institution (as defined in
the Offer to Purchase) must be submitted prior to the release of such Shares
(except in the case of Shares tendered by an Eligible Institution (as defined in
the Offer to Purchase)). In addition, such notice must specify the serial
numbers shown on the particular certificates evidencing the Shares to be
withdrawn, or, in the case of Shares tendered by book-entry transfer, the name
and number of the account at the Book-Entry Transfer Facility to be credited
with the withdrawn Shares. Withdrawals of tenders may not be rescinded, and
Shares withdrawn will thereafter be deemed not validly tendered for purposes of
the Offer. All questions as to the form and validity (including time of receipt)
of notices of withdrawal will be determined by Purchaser, in its sole
discretion, whose determination will be final and binding.
The information required to be disclosed by paragraph (e)(1)(vii) of Rule
14d-6 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended, is contained in the Offer to Purchase and is incorporated
herein by reference.
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares.
The Offer to Purchase and the Letter of Transmittal will be mailed to
record holders of Shares and will be furnished to brokers, banks and similar
persons whose names, or the names of whose nominees, appear on the stockholder
list or, if applicable, who are listed as participants in a clearing agency's
security position listing for subsequent transmittal to beneficial owners of
Shares.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
3
<PAGE> 4
Requests for copies of the Offer to Purchase, the Letter of Transmittal and
other tender offer materials may be directed to the Information Agent as set
forth below, and copies will be furnished promptly at Purchaser's expense.
Neither Parent nor Purchaser will pay any fees or commissions to any broker or
dealer or any other person (other than the Dealer Manager, the Information Agent
and the Depositary) in connection with the solicitation of tenders of Shares
pursuant to the Offer.
The Information Agent for the Offer is:
MacKenzie Partners, Inc. Logo
156 Fifth Avenue
New York, New York 10010
Call Collect: (212) 929-5500
or
Toll-Free (800) 322-2885
The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
333 South Hope Street
Los Angeles, California 90071
(213) 253-1842 (Call Collect)
<PAGE> 1
EXHIBIT 99(A)(8)
[VIAD CORP LETTERHEAD]
NEWS
FOR IMMEDIATE RELEASE
CONTACT: William Peltier
(602) 207-5812
[email protected]
April 6, 1998
VIAD CORP TO ACQUIRE MONEYGRAM PAYMENT SYSTEMS, INC.
------------------------
MONEYGRAM TO BE COMBINED WITH TRAVELERS EXPRESS COMPANY
PHOENIX, Ariz., April 6, 1998 -- Viad Corp (NYSE:VVI), and MoneyGram Payment
Systems, Inc. (NYSE:MNE), announced today that they have signed a definitive
agreement in which Viad will acquire MoneyGram, one of the nation's leading
money wire transfer companies. Viad will commence a cash tender offer no later
than April 10th for all outstanding MoneyGram shares at a purchase price of $17
per share. MoneyGram's 1997 revenues were $141 million. The offer is subject to
customary conditions, including regulatory approvals and the valid tender of a
majority of MoneyGram's outstanding shares.
The transaction will be non-dilutive to Viad's 1998 income from continuing
operations and is expected to be accretive to Viad's 1999 earnings per share.
Viad's cost of the acquisition is expected to be $287 million, excluding
transaction costs. The board of directors of MoneyGram has recommended approval
of the transaction.
The MoneyGram business is intended to be part of Viad's Travelers Express
Company of Minneapolis, the nation's largest money order and second largest
electronic bill payment services company.
"We are very pleased to be bringing together MoneyGram and Travelers
Express," said Robert H. Bohannon, Viad's chairman, president, and chief
executive officer. "The acquisition is a big move toward accelerating growth in
one of our leading core businesses -- financial payment systems. It allows us to
quickly enter the billion dollar global wire transfer market while providing
cross-marketing opportunities for both money order and money wire transfer
products."
Headquartered in Lakewood, Colo., MoneyGram was formed in 1988 by American
Express and became a separate publicly traded company in 1996 following its FTC
mandated divestiture by First Data Corporation, a former subsidiary of American
Express.
"We are excited about the combination of these complimentary businesses,"
said James F. Calvano, MoneyGram's chairman and chief executive officer. "This
transaction addresses many of the strategic challenges MoneyGram has faced in
the marketplace, particularly in distribution and technology, and presents an
outstanding opportunity to grow our business."
The wire transfer market has been growing 20 to 30 percent per year for the
last ten years. MoneyGram is operating in more than 100 countries, with its
strongest presence in the wire transfer of money from the U.S. to Mexico. The
company's agent network in Latin America is increasing, and the company recently
added agents in the U.K., Spain, Germany, Switzerland, Belgium, Norway and
Ireland.
Philip W. Milne, president and chief executive officer of Travelers
Express, said, "MoneyGram's strong brand awareness and consumer recognition
provides a great fit with our Travelers Express money order and retail
electronic bill payment businesses. Combining our 47,000 retail locations with
22,000 MoneyGram locations, gives us a tremendous opportunity for cross-selling
our products. This is a further step in our long-term strategy to put together a
comprehensive package of financial services for consumers and financial
institutions."
<PAGE> 2
Travelers Express has completed six acquisitions since 1996, including
Financial Services Management Corp., the nation's leading processor of rebate
checks, and Game Financial Corporation, a company providing casinos with cash
access services for patrons through the use of credit card cash advances, check
cashing and automated teller machines.
In addition to money wire transfer, MoneyGram provides express bill payment
services, phone card sales and money orders through a number of its agent
locations in the U.S., all of which complement and add to Travelers Express'
product lines.
Established in 1940, Travelers Express sells 275 million money orders
annually, and also provides official check, share draft processing, and
electronic bill payment services for financial institutions. Its payment systems
group serves more than 5,000 banks, credit unions and other financial
institutions. Travelers Express annually processes about 750 million payment
transactions valued at approximately $100 billion.
Salomon Smith Barney advised Viad Corp on the transaction, and Morgan
Stanley Dean Witter advised MoneyGram.
Viad Corp is a $2.5 billion S&P MidCap 400 services company with interests
in payment services, airline catering, convention services and travel and
leisure. Headquarters are in Phoenix, Ariz.
# # # #
2
<PAGE> 1
VIAD CORP
EXHIBIT 99(a)(9)
CONTACT: William Peltier
(602) 207-5812
[email protected]
PRESS RELEASE
------------------------
VIAD COMMENCES CASH TENDER OFFER
FOR ALL OUTSTANDING SHARES OF MONEYGRAM PAYMENT
SYSTEMS, INC. AT $17.00 PER SHARE
PHOENIX, Ariz., April 10, 1998 -- Viad Corp (NYSE:VVI), today announced
that Pine Valley Acquisition, Viad's newly formed wholly owned subsidiary has
commenced a cash tender offer for all outstanding shares of the common stock of
MoneyGram Payment Systems, Inc. at $17.00 a share.
The offer is being made pursuant to the previously announced merger
agreement among Viad Pine Valley Acquisition Corporation and MoneyGram. The
offer is conditioned upon, among other things, the tender of a majority of the
outstanding shares of MoneyGram on a fully diluted basis, the expiration or
termination of the HSR Act waiting period and receipt of regulatory approvals.
The tender offer and withdrawal rights are scheduled to expire at 12:00
noon, New York City time, on Friday, May 8, 1998.
Salomon Smith Barney is acting as the Dealer Manager and MacKenzie
Partners, Inc. is acting as the Information Agent in connection with the offer.
The information filed with the Securities and Exchange Commission in connection
with the tender offer may be obtained by calling MacKenzie Partners, Inc.
collect at (212) 929-5500 or toll free at (800) 322-2885.
Viad Corp is a $2.5 billion S&P MidCap 400 services company with interests
in payment services, airline catering, convention services and travel and
leisure.
<PAGE> 1
Exhibit 99(b)(1)(a)
U.S. $400,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of July 24, 1996
Among
THE DIAL CORP
(to be known as VIAD CORP upon
the effectiveness of this Agreement)
as Borrower
and
THE BANKS NAMED HEREIN
as Lenders
and
CITICORP USA, INC.
as Administrative Agent
and
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION
as Documentation Agent
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS. . . . . . . . . . .2
SECTION 1.01. Certain Defined Terms . . . . . . . . . . .2
SECTION 1.02. Computation of Time Periods . . . . . . . .17
SECTION 1.03. Accounting Terms. . . . . . . . . . . . . .17
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES . . . . . . . . . .18
SECTION 2.01. The Committed Advances. . . . . . . . . . .18
SECTION 2.02. Making the Committed Advances . . . . . . .18
SECTION 2.03. Making the Bid Advances . . . . . . . . . .21
SECTION 2.04. Fees. . . . . . . . . . . . . . . . . . . .25
SECTION 2.05. Termination and Reduction of the
Commitments . . . . . . . . . . . . . . . .26
SECTION 2.06. Repayment and Prepayment of Advances. . . .27
SECTION 2.07. Interest on Committed Advances. . . . . . .28
SECTION 2.08. Interest Rate Determination . . . . . . . .29
SECTION 2.09. Voluntary Conversion or Continuation of
Committed Advances. . . . . . . . . . . . .29
SECTION 2.10. Increased Costs . . . . . . . . . . . . . .30
SECTION 2.11. Payments and Computations . . . . . . . . .31
SECTION 2.12. Taxes . . . . . . . . . . . . . . . . . . .32
SECTION 2.13. Sharing of Payments, Etc. . . . . . . . . .34
SECTION 2.14. Evidence of Debt. . . . . . . . . . . . . .34
SECTION 2.15. Use of Proceeds . . . . . . . . . . . . . .35
SECTION 2.16. Extension of the Commitment Termination
Date. . . . . . . . . . . . . . . . . . . .35
SECTION 2.17. Substitution of Lenders . . . . . . . . . .36
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND LENDING . . . . . . .37
SECTION 3.01. Documents to be Delivered on the Closing
Date. . . . . . . . . . . . . . . . . . . .37
SECTION 3.02. Conditions Precedent to Effective Time. . .38
SECTION 3.03. Conditions Precedent to Each Committed
Borrowing . . . . . . . . . . . . . . . . .40
SECTION 3.04. Conditions Precedent to Each Bid
Borrowing . . . . . . . . . . . . . . . . .40
<PAGE> 3
ARTICLE IV
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . .41
SECTION 4.01. Representations and Warranties of the
Borrower. . . . . . . . . . . . . . . . . .41
ARTICLE V
COVENANTS OF THE BORROWER . . . . . . . . . . . . . .44
SECTION 5.01. Affirmative Covenants . . . . . . . . . . .44
SECTION 5.02. Negative Covenants. . . . . . . . . . . . .49
ARTICLE VI
EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . .51
SECTION 6.01. Events of Default . . . . . . . . . . . . .51
ARTICLE VI
THE AGENTS. . . . . . . . . . . . . . . . . . . . . .54
SECTION 7.01. Authorization and Action. . . . . . . . . .54
SECTION 7.02. Agents' Reliance, Etc.. . . . . . . . . . .55
SECTION 7.03. CUSA, B of A and Affiliates . . . . . . . .55
SECTION 7.04. Lender Credit Decision. . . . . . . . . . .56
SECTION 7.05. Indemnification . . . . . . . . . . . . . .56
SECTION 7.06. Successor Agent . . . . . . . . . . . . . .56
ARTICLE VIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . .57
SECTION 8.01. Amendments, Etc.. . . . . . . . . . . . . .57
SECTION 8.02. Notices, Etc. . . . . . . . . . . . . . . .57
SECTION 8.03. No Waiver; Remedies . . . . . . . . . . . .58
SECTION 8.04. Costs, Expenses and Indemnification . . . .58
SECTION 8.05. Right of Set-off. . . . . . . . . . . . . .59
SECTION 8.06. Binding Effect; Effectiveness; Entire
Agreement . . . . . . . . . . . . . . . . .60
SECTION 8.07. Assignments and Participations. . . . . . .60
<PAGE> 4
SECTION 8.08. Confidentiality . . . . . . . . . . . . . .64
SECTION 8.09. Governing Law . . . . . . . . . . . . . . .64
SECTION 8.10. Execution in Counterparts . . . . . . . . .64
SECTION 8.11. Consent to Jurisdiction; Waiver of
Immunities. . . . . . . . . . . . . . . . .65
SECTION 8.12. Waiver of Trial by Jury . . . . . . . . . .65
<PAGE> 5
SCHEDULES
SCHEDULE I List of Applicable Lending Offices
EXHIBITS
EXHIBIT A-1 Notice of Committed Borrowing
EXHIBIT A-2 Notice of Bid Borrowing
EXHIBIT B Assignment and Acceptance
EXHIBIT C-1 Form of Opinion of Counsel for the Borrower as of
the Closing Date
EXHIBIT C-2 Form of Opinion of Counsel for the Borrower as of
the Effective Date
EXHIBIT D-1 Form of Opinion of Counsel to the Agents as of
the Closing Date
EXHIBIT D-2 Form of Opinion of Counsel to the Agents as of
the Effective Date
EXHIBIT E Form of Extension Request
EXHIBIT F Form of Compliance Certificate
EXHIBIT G-1 Form of Committed Note
EXHIBIT G-2 Form of Bid Note
EXHIBIT H Form of Designation Agreement
<PAGE> 6
U.S. $400,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of July 24, 1996
This AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") is among
THE DIAL CORP, a Delaware corporation, to be known as VIAD CORP on and after the
Effective Date (as defined below) (the "Borrower"), the banks (the "Banks")
listed on the signature pages hereof, CITICORP USA, INC. ("CUSA"), as
administrative agent for the Lenders hereunder (in such capacity, the
"Administrative Agent"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION ("B of A"), as documentation agent for the Lenders hereunder (in
such capacity, the "Documentation Agent"; the Administrative Agent and the
Documentation Agent being referred to together as the "Agents"). Certain
capitalized terms have the meanings given to them in Section 1.01 hereof.
PRELIMINARY STATEMENTS
WHEREAS, the Borrower desires to effect the spin-off to the Borrower's
stockholders of the Consumer Products Business currently being conducted by the
Borrower directly and through certain of its subsidiaries;
WHEREAS, pursuant to the Distribution Agreement, on the Effective Date
the Borrower shall (i) contribute all of the assets and liabilities of the
Consumer Products Business, including the stock of certain subsidiaries, to The
Dial Corporation, a newly formed Delaware corporation ("Newco") and a
wholly-owned subsidiary of the Borrower, and (ii) distribute to the holders of
Borrower Common Stock approximately 94.8 million shares of Newco Common Stock;
WHEREAS, pursuant to the Distribution Agreement and in conjunction with
the Distribution, immediately prior to the Effective Date, Exhibitgroup shall be
merged with and into the Borrower, with the Borrower as the surviving
corporation;
WHEREAS, the Borrower, certain of the Banks, the Exiting Banks (as
hereinafter defined), and Citibank and B of A, as Agents, are parties to that
certain amended and restated credit agreement dated as of December 15, 1993, as
such agreement has been and may be amended from time to time (as so amended, the
"Existing Credit Agreement");
WHEREAS, the Borrower, the Banks, and the Agents desire to amend and
restate the Existing Credit Agreement in its entirety in this Agreement in order
to reflect the Distribution, but have agreed that this Agreement shall not
become effective (except to the extent set forth in Section 8.06 hereof) and the
Existing Credit Agreement shall remain in place until the
<PAGE> 7
Effective Date (which shall be the date of the Distribution) and the
satisfaction of the terms and conditions set forth herein;
WHEREAS, the Borrower, certain financial institutions, and the Agents
further desire to enter into the Newco Credit Agreement concurrently with this
Agreement, and the Newco Credit Agreement shall not become effective until the
Effective Date, at which time the Borrower shall assign and Newco shall assume
the Newco Credit Agreement, upon the satisfaction of the terms and conditions
set forth therein; and
WHEREAS, the Borrower and each bank that is party to the Existing
Credit Agreement but is not a party to this Agreement (an "Exiting Bank") have
agreed, pursuant to those certain letter agreements dated as of August 15, 1996,
that all funding obligations and other obligations of the Exiting Banks under
the Existing Credit Agreement will be terminated upon the effectiveness of this
Agreement and, except as set forth in such letter agreements, all payment
obligations and other obligations of the Borrower with respect to the Exiting
Banks under the Existing Credit Agreement, on the terms and conditions set forth
in such letter agreements, will be satisfied upon the effectiveness of this
Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ADDITIONS TO CAPITAL" means the sum of (i) the aggregate net
proceeds, including cash and the fair market value of property other
than cash (as determined in good faith by the Board of Directors of the
Borrower as evidenced by a Board resolution), received by the Borrower
from the issue or sale (other than to a Subsidiary) of capital stock of
the Borrower and (ii) the aggregate of 25% of the after tax gain
realized from unusual, extraordinary, and major nonrecurring items
including, but not limited to, the sale, transfer, or other disposition
of (x) any of the stock of any of the Borrower's Subsidiaries or (y)
substantially all of the assets of any geographic or other division or
line of business of the Borrower or any of its Subsidiaries (but
excluding any after tax loss realized on any such unusual,
extraordinary, and major nonrecurring items to the extent they exceed
any after tax gains on such items).
"ADJUSTED EURODOLLAR RATE" means, for any Interest Period for
each Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the
<PAGE> 8
rate per annum obtained by dividing (a) the average (rounded upward to
the nearest whole multiple of 1/16 of 1% per annum, if such average is
not such a multiple) of the rate per annum at which deposits in U.S.
dollars are offered by the principal office of each of the Reference
Banks in London, England to prime banks in the London interbank market
at 11:00 A.M. (London time) two Business Days before the first day of
such Interest Period in an amount substantially equal to the respective
Reference Bank's Eurodollar Rate Advance comprising part of such
Borrowing and for a period equal to such Interest Period by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage.
The Adjusted Eurodollar Rate for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing shall be
determined by the Administrative Agent on the basis of applicable rates
furnished to and received by the Administrative Agent from the
Reference Banks two Business Days before the first day of such Interest
Period, subject, however, to the provisions of Section 2.08.
"ADMINISTRATIVE AGENT" means CUSA, or any Person serving as
its successor agent.
"ADVANCE" means a Committed Advance or a Bid Advance.
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person.
"AGENT" or "AGENTS" has the meaning specified in the
introductory paragraph of this Agreement; provided, that, for purposes
of Sections 7.02, 7.04, 7.05, 8.04, 8.07(b)(iv) and 8.12 of this
Agreement the term "Agent" or "Agents", as the case may be, shall
include Arrangers.
"AGREEMENT" means this Amended and Restated Credit Agreement
as it may be amended, supplemented or otherwise modified from time to
time.
"APPLICABLE LENDING OFFICE" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base
Rate Advance, and such Lender's Eurodollar Lending Office in the case
of a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means, for any period for which any
interest payment is to be made with respect to any Advance, the
interest rate per annum derived by dividing (i) the sum of the Daily
Margins for each of the days included in such period by (ii) the number
of days included in such period.
"ARRANGERS" means Citicorp Securities, Inc. and BA Securities,
Inc., collectively, and each individually is an "ARRANGER."
"ASSIGNMENT AND ACCEPTANCE" means an assignment and
<PAGE> 9
acceptance entered into by a Lender and an Eligible Assignee, and
accepted by the Administrative Agent, in substantially the form of
EXHIBIT B hereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy" as now and hereafter in effect, or any successor
statute.
"BASE RATE" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum
shall at all times be equal to the highest of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate (which is a rate set by Citibank based
upon various factors including Citibank's costs and desired
return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate);
(b) the sum of (A) 1/2 of one percent per annum, plus
(B) the rate obtained by dividing (x) the latest three-week
moving average of secondary market morning offering rates in
the United States for three-month certificates of deposit of
major United States money market banks (such three-week moving
average being determined weekly by Citibank on the basis of
such rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank, in either case
adjusted to the nearest 1/4 of one percent or, if there is no
nearest 1/4 of one percent, to the next higher 1/4 of one
percent), by (y) a percentage equal to 100% minus the average
of the daily percentages specified during such three-week
period by the Board of Governors of the Federal Reserve System
for determining the maximum reserve requirement (including,
but not limited to, any marginal reserve requirements for
Citibank in respect of liabilities consisting of or including
(among other liabilities) three-month nonpersonal time
deposits of at least $100,000), plus (C) the average during
such three-week period of the daily net annual assessment
rates estimated by Citibank for determining the current annual
assessment payable by Citibank to the Federal Deposit
Insurance Corporation for insuring three-month deposits in the
United States; or
(c) 1/2 of one percent per annum above the Federal
Funds Rate.
"BASE RATE ADVANCE" means a Committed Advance which bears
interest at a rate per annum determined on the basis
<PAGE> 10
of the Base Rate, as provided in Section 2.07(a).
"BID ADVANCE" means an advance by a Lender to the Borrower as
part of a Bid Borrowing resulting from the auction bidding procedure
described in Section 2.03(a).
"BID BORROWING" means a borrowing consisting of simultaneous
Bid Advances of the same Type from each of the Lenders whose offer to
make one or more Bid Advances as part of such borrowing has been
accepted by the Borrower under the auction bidding procedure described
in Section 2.03(a).
"BID REDUCTION" has the meaning specified in Section 2.01(a).
"BORROWER" means The Dial Corp, a Delaware corporation, to be
known as Viad Corp on and after the Effective Date.
"BORROWER COMMON STOCK" means the approximately 94.8 million
shares of common stock, par value of $1.50 per share, of Borrower
currently outstanding.
"BORROWING" means a Committed Borrowing or a Bid Borrowing.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized to close in New York City or Los Angeles and, if
the applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"CAPITAL LEASE" means, with respect to any Person, any lease
of any property by that Person as lessee which would, in conformity
with GAAP, be required to be accounted for as a capital lease on the
balance sheet of that Person.
"CASH" means money, currency or a credit balance in a deposit
account.
"CASH EQUIVALENTS" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States government or
issued by any agency thereof and backed by the full faith and credit of
the United States, in each case maturing within one year from the date
of acquisition thereof, (b) marketable direct obligations issued by any
state of the United States of America or any political subdivision of
any such state or any public instrumentality thereof maturing within
one year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating generally obtainable from either
S&P or Moody's, (c) commercial paper maturing no more than one year
from the date of creation thereof and, at the time of acquisition,
having a rating of A-1 or higher from S&P or P-1 or higher from
Moody's, and (d)
<PAGE> 11
certificates of deposit or bankers' acceptances maturing within one
year from the date of acquisition thereof issued by any lender.
"CITIBANK" means Citibank, N.A.
"CLOSING DATE" means the date this Agreement is executed and
the documents referred to in Section 3.01 are delivered to the Agents,
which shall be July 24, 1996 or such other date as may be agreed upon
by the Borrower and the Agents.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITMENT" has the meaning specified in Section 2.01
"COMMITMENT TERMINATION DATE" means, with respect to any
Lender, the fifth anniversary of the Effective Date, or such later date
to which the Commitment Termination Date of such Lender may be extended
from time to time pursuant to Section 2.16 (or if any such date is not
a Business Day, the next preceding Business Day).
"COMMITTED ADVANCE" means an advance by a Lender to the
Borrower as part of a borrowing consisting of simultaneous Advances
from each of the Lenders pursuant to Section 2.01 and refers to a Base
Rate Advance or a Eurodollar Rate Advance, each of which shall be a
"Type" of Advance.
"COMMITTED BORROWING" means a borrowing consisting of
simultaneous Committed Advances of the same Type made on the same day
pursuant to the same Notice of Borrowing by each of the Lenders
pursuant to Section 2.01(b).
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT F hereto, delivered to the Lenders by the Borrower
pursuant to Section 5.10(b)(iii).
"CONVERT," "CONVERSION" and "CONVERTED" each refers to a
conversion of Advances of one Type into Advances of another Type
pursuant to Section 2.09.
"CONSUMER PRODUCTS BUSINESS" means the consumer products
business, including certain assets and liabilities thereof, currently
being conducted by the Borrower directly and through certain of its
subsidiaries, to be contributed to Newco pursuant to the Distribution
Agreement.
"DAILY MARGIN" means, for any date of determination, for the
designated Level, Utilization Ratio applicable to such date of
determination and Type of Advance, the following interest rates per
annum:
<PAGE> 12
<TABLE>
<CAPTION>
DAILY MARGIN WHEN DAILY MARGIN WHEN
UTILIZATION RATIO UTILIZATION RATIO
IS EQUAL TO OR IS GREATER THAN
LESS THAN 0.50:1.00 0.50:1.00
---------------------------- ----------------------------
TYPE OF ADVANCE TYPE OF ADVANCE
---------------------------- ----------------------------
BASE RATE EURODOLLAR BASE RATE EURODOLLAR
ADVANCE RATE ADVANCE ADVANCE RATE ADVANCE
<S> <C> <C> <C> <C>
LEVEL 1 0% 0.2000% 0% 0.2500%
LEVEL 2 0% 0.2400% 0% 0.2900%
LEVEL 3 0% 0.2750% 0% 0.3250%
LEVEL 4 0% 0.4375% 0% 0.4375%
LEVEL 5 0% 0.5000% 0% 0.5000%
</TABLE>
For purposes of this definition, (a) "UTILIZATION RATIO" means, as of
any date of determination, the ratio of (1) the aggregate outstanding
principal amount of all Advances as of such date to (2) the aggregate
amount of all Commitments in effect as of such date (whether used or
unused), (b) if any change in the rating established by S&P, Moody's or
Duff & Phelps with respect to Long-Term Debt shall result in a change
in the Level, the change in the Daily Margin shall be effective as of
the date on which such rating change is publicly announced, and (c) if
the ratings established by any two of S&P, Moody's or Duff & Phelps
with respect to Long-Term Debt are unavailable for any reason for any
day, then the applicable level for such day shall be deemed to be Level
5 (or, if the Requisite Lenders consent in writing, such other Level as
may be reasonably determined by the Requisite Lenders from a rating
with respect to Long-Term Debt for such day established by another
rating agency reasonably acceptable to the Requisite Lenders).
"DEBT" means (i) indebtedness for borrowed money or for the
deferred purchase price of property or services, (ii) obligations as
lessee under Capital Leases, (iii) obligations under guarantees in
respect of indebtedness or in respect of obligations of others of the
kinds referred to in clause (i) or (ii) above, (iv) liabilities in
respect of unfunded vested benefits under Single Employer Plans, and
(v) Withdrawal Liability incurred under ERISA by the Borrower or any of
its ERISA Affiliates to any Multi-employer Plans; provided that "Debt"
shall not include payment obligations in the ordinary course of the
business of Travelers Express Company, Inc. ("Travelers Express")
arising from (x) payments made by banks on checks or money orders
issued by Travelers Express and presented to such banks and (y)
contingent obligations of Travelers Express to banks which have issued
official checks drawn on Travelers Express and have paid to Travelers
Express the amounts of
<PAGE> 13
such official checks, to repay to such banks such amounts if such
official checks are not negotiated.
"DESIGNATED BIDDER" means (i) an Eligible Assignee or (ii) a
special purpose corporation which is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its
business and that issues (or the parent of which issues) commercial
paper rated at least "Prime-1" by Moody's or "A-1" by S&P or a
comparable rating from the successor or either of them, that, in either
case, (w) is organized under the laws of the United States or any State
thereof, (x) shall have become a party hereto pursuant to Section
8.07(d), (e) and (f), (y) is not otherwise a Lender and (z) shall have
been consented to by the Borrower, which consent shall not be
unreasonably withheld.
"DESIGNATION AGREEMENT" means a designation agreement entered
into by a Lender (other than a Designated Bidder) and a Designated
Bidder, and accepted by the Administrative Agent, in substantially the
form of EXHIBIT H hereto.
"DISTRIBUTION" means the distribution of approximately 94.8
million shares of Newco Common Stock, constituting 100% of the
outstanding Newco Common Stock, to the holders of Borrower Common Stock
pursuant to the Distribution Agreement, together with the consummation
of the other transactions to occur in connection with such
distribution, as set forth in the Distribution Agreement.
"DISTRIBUTION AGREEMENT" means that certain Distribution
Agreement by and among the Borrower, Newco, and Exhibitgroup, in the
form of EXHIBIT A attached to the Form 10, with such changes as may be
approved by the Requisite Lenders.
"DISTRIBUTION TIME" means the time of the Distribution on the
Effective Date.
"DOCUMENTATION AGENT" means B of A, or any Person serving as
its successor agent.
"DOLLARS" and the sign "$" each means lawful money of the
United States of America.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, or such other office
of such Lender as such Lender may from time to time specify to the
Borrower and the Agents.
"DUFF & PHELPS" means Duff & Phelps Inc.
"EBITDA" means, for any period, consolidated net income
<PAGE> 14
plus provision for taxes of the Borrower and its Subsidiaries
(excluding extraordinary, unusual, or nonrecurring gains or losses),
plus interest expense of the Borrower and its Subsidiaries, plus
depreciation expense of the Borrower and its Subsidiaries, plus
amortization of intangibles of the Borrower and its Subsidiaries, as
determined on a consolidated basis in conformity with GAAP; provided
that to the extent that during such period the Borrower or any of its
Subsidiaries has acquired or disposed of a business or businesses in an
amount for any transaction or series of related transactions exceeding
$15,000,000, such calculations shall be made as if such acquisition or
disposition took place on the first day of such period (on a pro forma
basis for the portion of such period prior to the date of such
acquisition (or after the date of such disposition) and on an actual
basis for the portion of such period after the date of such acquisition
(or before the date of such disposition)).
"EFFECTIVE DATE" means the date on which the Distribution
occurs, as provided for in the Distribution Agreement, and the
conditions set forth in Section 3.02 are satisfied.
"EFFECTIVE TIME" means the time, immediately prior to the
Distribution Time, at which this Agreement shall become fully effective
upon satisfaction of the conditions precedent set forth in Section 3.02
hereof.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized
under the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $100,000,000; (ii) a
commercial bank organized under the laws of any other country which is
a member of the Organization for Economical Cooperation and Development
(the "OECD"), or a political subdivision of any such country and having
a combined capital and surplus of at least $100,000,000, provided that
such bank is acting through a branch or agency located in the country
in which it is organized or another country which is also a member of
the OECD; and (iii) any Person engaged in the business of lending and
that is an Affiliate of a Lender or of a Person of which a Lender is a
Subsidiary.
"ENVIRONMENTAL LAW" means any and all statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or other
governmental restrictions of any federal, state or local governmental
authority within the United States or any State or territory thereof
and which relate to the environment or the release of any materials
into the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
<PAGE> 15
"ERISA AFFILIATE" means any Person who for purposes of Title
IV of ERISA is a member of the Borrower's controlled group, or under
common control with the Borrower, within the meaning of Section 414 of
the Code and the regulations promulgated and rulings issued thereunder.
"ERISA EVENT" means (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA (other than an event
arising out of the transactions contemplated by the Distribution
Agreement), unless the 30-day notice requirement with respect thereto
has been waived by the PBGC; (ii) the provision by the administrator of
any Pension Plan of a notice of intent to terminate such Pension Plan
pursuant to Section 4041(a)(2) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of ERISA);
(iii) the cessation of operations at a facility in the circumstances
described in Section 4062(e) of ERISA; (iv) the withdrawal by the
Borrower or an ERISA Affiliate from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (v) the failure by the Borrower or any
ERISA Affiliate to make a payment to a Pension Plan required under
Section 302(f)(1) of ERISA, which Section imposes a lien for failure to
make required payments; (vi) the adoption of an amendment to a Pension
Plan requiring the provision of security to such Pension Plan, pursuant
to Section 307 of ERISA; or (vii) the institution by the PBGC of
proceedings to terminate a Pension Plan, pursuant to Section 4042 of
ERISA, or the occurrence of any event or condition which, in the
reasonable judgment of the Borrower, might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, a Pension Plan.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on SCHEDULE I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office
is specified, its Domestic Lending Office), or such other office of
such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"EURODOLLAR RATE ADVANCE" means a Committed Advance which
bears interest as provided in Section 2.07(b) and/or a Bid Advance
which bears interest based on the Adjusted Eurodollar Rate as provided
in Section 2.03(a).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period
for any Eurodollar Rate Advance means the reserve percentage applicable
during such Interest Period (or if
<PAGE> 16
more than one such percentage shall be so applicable, the daily average
of such percentages for those days in such Interest Period during which
any such percentage shall be so applicable) under regulations issued
from time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve
requirements (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for member banks in
the Federal Reserve System with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXHIBITGROUP" means Exhibitgroup Inc., a Delaware corporation
and wholly-owned subsidiary of the Borrower which operates part of the
Borrower's convention services business, and which shall be merged into
the Borrower pursuant to the Merger.
"EXISTING CREDIT AGREEMENT" means that certain amended and
restated credit agreement, dated as of December 15, 1993, by and among
the Borrower, certain of the Lenders, certain of the Exiting Banks, and
Citibank and B of A, as Agents, as such agreement has been and may be
amended from time to time.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"FIXED RATE" means, for the period for each Fixed Rate Advance
comprising part of the same Bid Borrowing, the fixed interest rate per
annum determined for such Advance, as provided in Section 2.03(a).
"FIXED RATE ADVANCE" means a Bid Advance which bears interest
at a fixed rate per annum determined as provided in Section 2.03(a).
"FORM 8-K" means that certain Current Report on Form 8-K filed
by the Borrower with the SEC on June 13, 1996.
"FORM 10" means that certain Registration Statement on Form 10
originally filed by Newco with the SEC on June 5, 1996, as amended on
July 18, 1996.
<PAGE> 17
"FUNDED DEBT" means outstanding Debt of the Borrower and its
Subsidiaries of the kind described in clauses (i), (ii) and (iii) of
the definition of Debt.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession, which
are applicable to the circumstances as of the date of determination.
"HOSTILE ACQUISITION" means the acquisition of the capital
stock or other equity interests of a Person (the "Target") through a
tender offer or similar solicitation of the owners of such capital
stock or other equity interests which has not been approved (prior to
such acquisition) by resolutions of the Board of Directors of the
Target or by similar action if the Target is not a corporation and as
to which such approval has not been withdrawn.
"INSUFFICIENCY" means, with respect to any Pension Plan, the
amount, if any, of its unfunded benefit liabilities, as defined in
Section 4001(a)(18) of ERISA.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance, or on the date of continuation of
such Advance as a Eurodollar Rate Advance upon expiration of successive
Interest Periods applicable thereto, or on the date of Conversion of a
Base Rate Advance into a Eurodollar Rate Advance, and ending on the
last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be
one, two, three or six months, as the Borrower may select in the Notice
of Borrowing or the Notice of Conversion/Continuation for such Advance;
provided, however, that:
(i) the Borrower may not select any Interest Period
which ends after the earliest Commitment Termination Date of
any Lender then in effect;
(ii) Interest Periods commencing on the same date for
Advances comprising part of the same Borrowing shall be of the
same duration; and
(iii) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided, that if such
extension would cause the last day of such Interest Period to
occur in
<PAGE> 18
the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business
Day.
"LENDERS" means the Banks listed on the signature pages hereof
and each Eligible Assignee that shall become a party hereto pursuant to
Section 8.07 and, except when used in reference to a Committed Advance,
a Committed Borrowing, a Commitment or a related term, each Designated
Bidder.
"LEVEL" means Level 1, Level 2, Level 3, Level 4 or Level 5,
as the case may be.
"LEVEL l" means that, as of any date of determination, the
Borrower's Long-Term Debt rating is equal to or higher than at least
two of the following: BBB+ from S&P, Baal from Moody's and/or BBB+ from
Duff & Phelps.
"LEVEL 2" means that, as of any date of determination, the
Borrower's Long-Term Debt rating is equal to at least two of the
following: BBB from S&P, Baa2 from Moody's and/or BBB from Duff &
Phelps.
"LEVEL 3" means that, as of any date of determination, the
Borrower's Long-Term Debt rating is equal to at least two of the
following: BBB- from S&P, Baa3 from Moody's and/or BBB- from Duff &
Phelps.
"LEVEL 4" means that, as of any date of determination, the
Borrower's Long-Term Debt rating is equal to at least two of the
following: BB+ from S&P, Bal from Moody's and/or BB+ from Duff &
Phelps.
"LEVEL 5" means that, as of any date of determination, the
Borrower's Long-Term Debt rating is lower than at least two of the
following: BB+ from S&P, Bal from Moody's and/or BB+ from Duff &
Phelps.
"LIEN" means any lien, mortgage, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or
other title retention agreement and any lease in the nature thereof).
"LOAN DOCUMENTS" means this Agreement and the related
documents.
"LONG-TERM DEBT" means senior, unsecured, long term debt
securities of the Borrower.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U promulgated by the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"MATERIAL SUBSIDIARY" means any Subsidiary of the
<PAGE> 19
Borrower having total assets in excess of $10,000,000.
"MERGER" means the merger, pursuant to the Distribution
Agreement, of the Borrower and Exhibitgroup, with the Borrower as the
surviving corporation.
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate of the Borrower is making, or is obligated to make,
contributions or has within any of the preceding six plan years been
obligated to make or accrue contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, which (i) is maintained for
employees of the Borrower or an ERISA Affiliate and at least one Person
other than the Borrower and its ERISA Affiliates or (ii) was so
maintained and in respect of which the Borrower or an ERISA Affiliate
could have liability under Section 4063, 4064 or 4069 of ERISA in the
event such plan has been or were to be terminated.
"NET INCOME" means net income in accordance with GAAP.
"NET WORTH" means minority interests, preferred stock and
common stock and other equity, as shown on the consolidated balance
sheet of the Borrower and its Subsidiaries; provided that there shall
be excluded from the calculation of Net Worth any unrealized gains or
losses (net of taxes) on securities available for sale.
"NEWCO" means The Dial Corporation, a Delaware corporation,
which immediately prior to the Distribution shall be capitalized by the
Borrower with the assets and liabilities of the Consumer Products
Business pursuant to the Distribution Agreement.
"NEWCO COMMON STOCK" means the approximately 94.8 million
shares of common stock, par value of $0.01 per share, of Newco to be
issued pursuant to the Distribution.
"NEWCO CREDIT AGREEMENT" means the Credit Agreement dated as
of the Closing Date among the Borrower, the Banks and the Agents, which
shall not become effective until the Effective Time upon the
satisfaction or waiver of the terms and conditions contained therein
and which shall be assumed by Newco at the Distribution Time.
"NOTICE OF BID BORROWING" has the meaning specified in Section
2.03(a).
<PAGE> 20
"NOTICE OF BORROWING" means a Notice of Committed Borrowing or
a Notice of Bid Borrowing, as the case may be.
"NOTICE OF COMMITTED BORROWING" has the meaning specified in
Section 2.02(a).
"NOTICE OF CONVERSION/CONTINUATION" has the meaning specified
in Section 2.09.
"PAYMENT OFFICE" means the principal office of CUSA, located
on the date hereof at 1 Court Square, 7th Floor Zone 1, Long Island
City, N.Y. 11120 (or such other place as the Administrative Agent may
designate by notice to the Borrower and the Lenders from time to time).
"PBGC" means the U.S. Pension Benefit Guaranty Corporation.
"PENSION PLAN" means a Single Employer Plan or a Multiple
Employer Plan or both.
"PERSON" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association,
joint venture or other entity, or a government or any political
subdivision or agency thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within any
applicable grace or cure period.
"REFERENCE BANKS" means, B of A, Citibank, and Bank of
Montreal.
"REGISTER" has the meaning specified in Section 8.07(c).
"REQUISITE LENDERS" means at any time Lenders holding at least
66-2/3% of the then aggregate unpaid principal amount of the Committed
Advances held by Lenders, or, if no such principal amount is then
outstanding, Lenders having at least 66-2/3 % of the Commitments
(provided that, for purposes hereof, neither the Borrower, nor any of
its Affiliates, if a Lender, shall be included in (i) the Lenders
holding such amount of the Committed Advances or having such amount of
the Commitments or (ii) determining the aggregate unpaid principal
amount of the Committed Advances or the total Commitments).
"S&P" means Standard & Poor's Ratings Group, a
<PAGE> 21
division of The McGraw-Hill Companies.
"SEC" means the Securities and Exchange Commission and any
successor agency.
"SINGLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, which (i) is maintained for
employees of the Borrower or any ERISA Affiliate and no Person other
than the Borrower and its ERISA Affiliates or (ii) was so maintained
and in respect of which the Borrower or an ERISA Affiliate could have
liability under Section 4062 or 4069 of ERISA in the event such plan
has been or were to be terminated.
"SUBSIDIARY" of any Person means any corporation, association,
partnership or other business entity of which at least 50% of the total
voting power of shares of stock or other securities entitled to vote in
the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or
more of the other Subsidiaries of that Person or a combination thereof.
"SWAPS" means, with respect to any Person, payment obligations
with respect to interest rate swaps, currency swaps and similar
obligations obligating such Person to make payments, whether
periodically or upon the happening of a contingency.
"TERMINATION DATE" means, with respect to any Lender, the
earlier of (i) the Commitment Termination Date of such Lender and (ii)
the date of termination in whole of the Commitments of all Lenders
pursuant to Section 2.05 or 6.01.
"TOTAL UTILIZATION OF COMMITMENTS" means at any date of
determination the sum of (i) the aggregate principal amount of all
Committed Advances outstanding at such date plus (ii) the aggregate
principal amount of all Bid Advances outstanding at such date.
"TYPE" means, with reference to an Advance, a Base Rate
Advance, a Eurodollar Rate Advance, or a Fixed Rate Advance.
"WITHDRAWAL LIABILITY" has the meaning given such term under
Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms
<PAGE> 22
not specifically defined herein shall be construed in accordance with GAAP. All
computations determining compliance with financial covenants or terms, including
definitions used therein, shall be prepared in accordance with generally
accepted accounting principles in effect at the time of the preparation of, and
in conformity with those used to prepare, the historical financial statements
delivered to the Lenders pursuant to Section 4.01(e). If at any time the
computations for determining compliance with financial covenants or provisions
relating thereto utilize generally accepted accounting principles different than
those then being utilized in the financial statements being delivered to the
Lenders, such financial statements shall be accompanied by a reconciliation
statement.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE COMMITTED ADVANCES.
(a) Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make Committed Advances to the Borrower from
time to time on any Business Day during the period from the Effective
Date until the Termination Date of such Lender in an aggregate amount
not to exceed at any time outstanding the amount set opposite such
Lender's name on the signature pages hereof or, if such Lender has
entered into any Assignment and Acceptance, set forth for such Lender
in the Register maintained by the Administrative Agent pursuant to
Section 8.07(c), as such amount may be reduced pursuant to Section 2.04
(such Lender's "Commitment"); provided that the aggregate amount of the
Commitments of the Lenders shall be deemed used from time to time to
the extent of the aggregate amount of the Bid Advances and such deemed
use of the aggregate amount of the Commitments shall be applied to the
Lenders ratably according to their respective Commitments (such deemed
use of the aggregate amount of the Commitments resulting from the Bid
Advances being the "Bid Reduction"); provided further that (i) in no
event shall the aggregate principal amount of Committed Advances from
any Lender outstanding at any time exceed its Commitment then in effect
and (ii) the Total Utilization of Commitments shall not exceed the
aggregate Commitments then in effect.
(b) Each Committed Borrowing shall be in an aggregate amount
not less than $5,000,000 or an integral multiple of $1,000,000 in
excess thereof and shall consist of Committed Advances of the same Type
made on the same day by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender's Commitment,
the Borrower may from time to time borrow, prepay pursuant to Section
2.06(c) and reborrow under this Section 2.01.
<PAGE> 23
SECTION 2.02. MAKING THE COMMITTED ADVANCES.
(a) Each Committed Borrowing shall be made on notice, given
not later than (x) 11:00 A.M. (New York City time) on the date of a
proposed Committed Borrowing consisting of Base Rate Advances and (y)
11:00 A.M. (New York City time) on the third Business Day prior to the
date of a proposed Committed Borrowing consisting of Eurodollar Rate
Advances, by the Borrower to the Administrative Agent, which shall give
to each Lender prompt notice thereof by telecopier, telex or cable.
Each such notice of a Committed Borrowing (a "Notice of Committed
Borrowing") shall be by telecopier, telex or cable, confirmed
immediately in writing, in substantially the form of EXHIBIT A-1
hereto, specifying therein the requested (i) date of such Committed
Borrowing, (ii) Type of Committed Advances comprising such Committed
Borrowing, (iii) aggregate amount of such Committed Borrowing, and (iv)
in the case of a Committed Borrowing comprised of Eurodollar Rate
Advances, the initial Interest Period for each such Committed Advance.
The Borrower may, subject to the conditions herein provided, borrow
more than one Committed Borrowing on any Business Day. Each Lender
shall, before 2:00 P.M. (New York City time) in the case of a Committed
Borrowing consisting of Base Rate Advances and before 11:00 A.M. (New
York City time) in the case of a Committed Borrowing consisting of
Eurodollar Rate Advances, in each case on the date of such Committed
Borrowing, make available for the account of its Applicable Lending
Office to the Administrative Agent at its address referred to in
Section 8.02, in same day funds, such Lender's ratable portion of such
Committed Borrowing. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in
Article III, the Administrative Agent will make such funds available to
the Borrower at the Administrative Agent's aforesaid address.
(b) Anything in subsection (a) above to the contrary
notwithstanding,
(i) the Borrower may not select Eurodollar Rate
Advances for any Committed Borrowing or with respect to the
Conversion or continuance of any Committed Borrowing if the
aggregate amount of such Committed Borrowing or such
Conversion or continuance is less than $5,000,000;
(ii) there shall be no more than five Interest
Periods relating to Committed Borrowings consisting of
Eurodollar Rate Advances outstanding at any time;
(iii) if any Lender shall, at least one
<PAGE> 24
Business Day before the date of any requested Committed
Borrowing, notify the Administrative Agent that the
introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or that any central
bank or other governmental authority asserts that it is
unlawful, for such Lender or its Eurodollar Lending Office to
perform its obligations hereunder to make Eurodollar Rate
Advances or to fund or maintain Eurodollar Rate Advances
hereunder, the Commitment of such Lender to make Eurodollar
Rate Advances or to Convert all or any portion of Base Rate
Advances shall forthwith be suspended until the Administrative
Agent shall notify the Borrower that such Lender has
determined that the circumstances causing such suspension no
longer exist and such Lender's then outstanding Eurodollar
Rate Advances, if any, shall be Base Rate Advances; to the
extent that such affected Eurodollar Rate Advances become Base
Rate Advances, all payments of principal that would have been
otherwise applied to such Eurodollar Rate Advances shall be
applied instead to such Lender's Base Rate Advances; provided
that if Requisite Lenders are subject to the same illegality
or assertion of illegality, then the right of the Borrower to
select Eurodollar Rate Advances for such Committed Borrowing
or any subsequent Committed Borrowing or to Convert all or any
portion of Base Rate Advances shall forthwith be suspended
until the Administrative Agent shall notify the Borrower that
the circumstances causing such suspension no longer exist, and
each Committed Advance comprising such Committed Borrowing
shall be a Base Rate Advance;
(iv) if fewer than two Reference Banks furnish timely
information to the Administrative Agent for determining the
Adjusted Eurodollar Rate for any Eurodollar Rate Advances
comprising any requested Committed Borrowing, the right of the
Borrower to select Eurodollar Rate Advances for such Committed
Borrowing or any subsequent Committed Borrowing shall be
suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such
suspension no longer exist, and each Advance comprising such
Committed Borrowing shall be made as a Base Rate Advance; and
(v) if the Requisite Lenders shall, at least one
Business Day before the date of any requested Committed
Borrowing, notify the Administrative Agent that the Adjusted
Eurodollar Rate for Eurodollar Rate Advances comprising such
Committed Borrowing will not adequately reflect the cost to
such Requisite Lenders of making, funding
<PAGE> 25
or maintaining their respective Eurodollar Rate Advances for
such Committed Borrowing, the right of the Borrower to select
Eurodollar Rate Advances for such Committed Borrowing or any
subsequent Committed Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders
that the circumstances causing such suspension no longer
exist, and each Committed Advance comprising such Committed
Borrowing shall be made as a Base Rate Advance.
(c) Each Notice of Committed Borrowing shall be irrevocable
and binding on the Borrower. In the case of any Committed Borrowing
which the related Notice of Committed Borrowing specifies is to be
comprised of Eurodollar Rate Advances, the Borrower shall indemnify
each Lender against any loss, cost or expense incurred by such Lender
by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Advance to be made by such Lender
as part of such Committed Borrowing or by reason of the termination of
hedging or other similar arrangements, in each case when such Advance
is not made on such date (other than by reason of (i) a breach of a
Lender's obligations hereunder or (ii) a suspension of Eurodollar Rate
Advances under clauses (iii), (iv) or (v) of paragraph (b) of this
Section 2.02), including without limitation, as a result of any failure
to fulfill on or before the date specified in such Notice of Committed
Borrowing for such Committed Borrowing the applicable conditions set
forth in Article III.
(d) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Committed Borrowing that such
Lender will not make available to the Administrative Agent such
Lender's ratable portion of such Committed Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Committed
Borrowing in accordance with subsection (a) of this Section 2.02 and
the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and
to the extent that such Lender shall not have so made such ratable
portion available to the Administrative Agent, such Lender and the
Borrower severally agree to repay to the Administrative Agent forthwith
on demand such corresponding amount together with interest thereon, for
each day from the date such amount is made available to the Borrower
until the date such amount is repaid to the Administrative Agent, at
(i) in the case of the Borrower, the interest rate applicable at the
time to Advances comprising such Committed Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall repay
to the Administrative Agent such
<PAGE> 26
corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Committed Borrowing for purposes of
this Agreement.
(e) The failure of any Lender to make the Advance to be made
by it as part of any Committed Borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its Advance on the
date of such Borrowing, but no Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by such
other Lender on the date of any Committed Borrowing.
SECTION 2.03. MAKING THE BID ADVANCES.
(a) Each Lender severally agrees that the Borrower may make
Bid Borrowings in Dollars under this Section 2.03 from time to time on
any Business Day during the period from the Effective Date until the
date occurring one month prior to the Termination Date, in the manner
set forth below; provided that, after giving effect to the making of
each Bid Borrowing, the Total Utilization of Commitments shall not
exceed the aggregate Commitments then in effect and the aggregate
amount of the Bid Advances of all Lenders then outstanding shall not
exceed the aggregate Commitments then in effect.
(i) The Borrower may request a Bid Borrowing under
this Section 2.03 by delivering to the Administrative Agent,
by telecopier, telex or cable, confirmed immediately in
writing, a notice of a Bid Borrowing (a "Notice of Bid
Borrowing"), in substantially the form of EXHIBIT A-2 hereto,
specifying the date and aggregate amount of the proposed Bid
Borrowing, the maturity date for repayment of each Bid Advance
to be made as part of such Bid Borrowing (which maturity date
may not be earlier than the date occurring thirty (30) days
(in the case of Fixed Rate Advances) or one (1) month (in the
case of Eurodollar Rate Advances) after the date of such Bid
Borrowing, or in any case later than the Termination Date),
whether the Lenders should offer to make Fixed Rate Advances
or Eurodollar Rate Advances, the interest payment date or
dates relating thereto, and any other terms to be applicable
to such Bid Borrowing, not later than 10:00 A.M. (New York
City time) (A) at least one (1) Business Day prior to the date
of a proposed Bid Borrowing consisting of Fixed Rate Advances
and (B) at least four (4) Business Days prior to the date of a
proposed Bid Borrowing consisting of Eurodollar Rate Advances.
The Administrative Agent shall in turn promptly notify each
Lender of each request for a Bid Borrowing received by it from
the Borrower by sending such Lender a copy of the related
Notice of Bid Borrowing.
<PAGE> 27
(ii) Each Lender may, if, in its sole discretion, it
elects to do so, irrevocably offer to make one or more Bid
Advances to the Borrower as part of such proposed Bid
Borrowing at a Fixed Rate or Rates or a margin or margins
relative to the Adjusted Eurodollar Rate, as requested by the
Borrower. Each Lender electing to make such an offer shall do
so by notifying the Administrative Agent (which shall give
prompt notice thereof to the Borrower), before 10:00 A.M. (New
York City time) (A) the date of such proposed Bid Borrowing,
in the case of a Notice of Bid Borrowing delivered pursuant to
clause (A) of paragraph (i) above and (B) three (3) Business
Days before the date of such proposed Bid Borrowing, in the
case of a Notice of Bid Borrowing delivered pursuant to clause
(B) of paragraph (i) above, of the amount of each Bid Advance
which such Lender would be willing to make as part of such
proposed Bid Borrowing (which amount may, subject to the
proviso to the first sentence of this Section 2.03(a), exceed
such Lender's Commitment, if any), the Fixed Rate or Rates or
margin or margins relative to the Adjusted Eurodollar Rate, as
requested by the Borrower, which such Lender would be willing
to accept for such Bid Advance and such Lender's Applicable
Lending Office with respect to such Bid Advance; provided that
if the Administrative Agent in its capacity as a Lender, or
any affiliate of the Administrative Agent in its capacity as a
Lender, shall, in its sole discretion, elect to make any such
offer, it shall notify the Borrower of such offer before 9:00
A.M. (New York City time) on the date on which notice of such
election is to be given to the Agent by the other Lenders.
(iii) The Borrower, in turn, (A) before 12:00 P.M.
(New York City time) the date of such proposed Bid Borrowing,
in the case of a Notice of Bid Borrowing delivered pursuant to
clause (A) of paragraph (i) above and (B) before 12:00 Noon
(New York City time) three (3) Business Days before the date
of such proposed Bid Borrowing, in the case of a Notice of Bid
Borrowing delivered pursuant to clause (B) of paragraph (i)
above, either
(x) cancel such Bid Borrowing by giving the
Administrative Agent notice to that effect, or
(y) accept one or more of the offers made by
any Lender or Lenders pursuant to paragraph (ii)
above, in its sole discretion, by giving notice to
the Administrative Agent of the amount of each Bid
Advance to be made by each
<PAGE> 28
Lender as part of such Bid Borrowing, and reject any
remaining offers made by Lenders pursuant to
paragraph (ii) above by giving the Administrative
Agent notice to that effect; provided that acceptance
of offers may only be made on the basis of ascending
rates for Bid Borrowings of the same Type and
duration; and provided further that the Borrower may
not accept offers in excess of the aggregate amount
requested in the Notice of Bid Borrowing; and
provided further still if offers are made by two or
more Lenders for the same Type of Bid Borrowing for
the same duration and with the same rate of interest,
in an aggregate amount which is greater than the
amount requested, such offers shall be accepted on a
pro rata basis in proportion to the amount of the
offer made by each such Lender.
(iv) If the Borrower notifies the Administrative
Agent that such Bid Borrowing is cancelled pursuant to
paragraph (iii)(x) above, the Administrative Agent shall give
prompt notice thereof to the Lenders and such Bid Borrowing
shall not be made.
(v) If the Borrower accepts (which acceptance may not
be revoked) one or more of the offers made by any Lender or
Lenders pursuant to paragraph (iii)(y) above, the
Administrative Agent shall in turn promptly notify (A) each
Lender that has made an offer as described in paragraph (ii)
above, of the date and aggregate amount of such Bid Borrowing
and whether or not any offer or offers made by such Lender
pursuant to paragraph (ii) above have been accepted by the
Borrower, (B) each Lender that is to make a Bid Advance as
part of such Bid Borrowing, of the amount of each Bid Advance
to be made by such Lender as part of such Bid Borrowing, and
(C) each Lender that is to make a Bid Advance as part of such
Bid Borrowing, upon receipt, that the Administrative Agent has
received forms of documents appearing to fulfill the
applicable conditions set forth in Article III.
(b) Each Lender that is to make a Bid Advance as part of a Bid
Borrowing shall, before 1:00 P.M. (New York City time) on the date of
such Bid Borrowing specified in the Notice of Bid Borrowing relating
thereto, make available for the account of its Applicable Lending
Office to the Administrative Agent at such account maintained at the
Payment Office for Dollars as shall have been notified by the
Administrative Agent to the Lenders prior thereto and in same day
funds, such Lender's portion of such Bid
<PAGE> 29
Borrowing. Upon fulfillment of the applicable conditions set forth in
Article III and after receipt by the Administrative Agent of such
funds, the Administrative Agent will make such funds available to the
Borrower requesting a Bid Advance at the aforesaid applicable Payment
Office. Promptly after each Bid Borrowing the Administrative Agent will
notify each Lender of the amount of the Bid Borrowing, the consequent
Bid Reduction and the dates upon which such Bid Reduction commenced and
will terminate. The Borrower shall indemnify each Lender which is to
make a Bid Advance (as a result of the acceptance by the Borrower of
one or more offers by such Lender) as part of a Bid Borrowing against
any loss, cost or expense incurred by such Lender by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Bid Advance to be made by such Lender as part of
such Bid Borrowing or by reason of the termination of hedging or other
similar arrangements, in each case when such Bid Advance is not made on
such date (other than by reason of a breach of a Lender's obligations
hereunder), including without limitation, as a result of any failure to
fulfill on or before the date specified in such notice of Bid Borrowing
for such Bid Borrowing the applicable conditions set forth in Article
III.
(c) Each Bid Borrowing shall be in an aggregate principal
amount of not less than $5,000,000 with increments of $1,000,000 and,
following the making of each Bid Borrowing, the Borrower and each
Lender shall be in compliance with the limitations set forth in the
proviso to the first sentence of subsection (a) above.
(d) Within the limits and on the conditions set forth in this
Section 2.03, the Borrower may from time to time borrow under this
Section 2.03, repay or prepay pursuant to subsection (e) below, and
reborrow under this Section 2.03; provided that a Notice of Bid
Borrowing shall not be given within seven (7) Business Days of the date
of any other Notice of Bid Borrowing.
(e) The Borrower shall repay to the Administrative Agent for
the account of each Lender which has made, or holds the right to
repayment of, a Bid Advance to such Borrower on the maturity date of
each Bid Advance (such maturity date being that specified by the
Borrower for repayment of such Bid Advance in the related Notice of Bid
Borrowing delivered pursuant to subsection (a)(i) above) the then
unpaid principal amount of such Bid Advance. The Borrower shall not
have the right to prepay any principal amount of any Bid Advance
unless, and then only on the terms, specified by the Borrower for such
Bid Advance in the related Notice of Bid Borrowing delivered pursuant
to subsection (a)(i) above.
(f) The Borrower shall pay interest on the unpaid
<PAGE> 30
principal amount of each Bid Advance from the date of such Bid Advance
to the date the principal amount of such Bid Advance is repaid in full,
at the rate of interest for such Bid Advance specified by the Lender
making such Bid Advance in its notice with respect thereto delivered
pursuant to subsection (a)(ii) above, payable on the interest payment
date or dates specified by the Borrower for such Bid Advance in the
related Notice of Bid Borrowing delivered pursuant to subsection (a)(i)
above; provided that any principal amount of any Bid Rate Advance which
is not paid when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest from the date on which such amount is
due until such amount is paid in full, payable on demand, at a rate per
annum equal at all times to (A) until the scheduled maturity date of
such Bid Advances, the greater of (x) 2% per annum above the Base Rate
in effect from time to time and (y) 2% per annum above the rate per
annum required to be paid on such amount immediately prior to the date
on which such amount became due, and (B) from and after the scheduled
maturity date of such Bid Advances, 2% per annum above the Base Rate in
effect from time to time.
SECTION 2.04. FEES.
(a) FACILITY FEES. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender (other than the
Designated Bidders) a facility fee on such Lender's daily average
Commitment, whether used or unused and without giving effect to any Bid
Reduction, from the Effective Date in the case of each Lender and from
the effective date specified in the Assignment and Acceptance pursuant
to which it became a Lender in the case of each other Lender until the
Termination Date of such Lender, payable quarterly in arrears on the
last day of each March, June, September and December during the term of
such Lender's Commitment, commencing September 30, 1996, and on the
Termination Date of such Lender, in an amount equal to the product of
(i) such Lender's daily average Commitment, whether used or unused and
without giving effect to any Bid Reduction, in effect during the period
for which such payment that is to be made times (ii) the weighted
average rate per annum that is derived from the following rates: (a) a
rate of 0.10% per annum with respect to each day during such period
that the ratings with respect to Long-Term Debt were at Level 1, (b) a
rate of 0.110% per annum with respect to each day during such period
that such ratings were at Level 2, (c) a rate of 0.125% per annum with
respect to each day during such period that such ratings were at
Level 3, (d) a rate of 0.1875% per annum with respect to each day
during such period that such ratings were at Level 4, and (e) at the
rate of 0.2500% per annum with respect to each day during such period
that such ratings were at Level 5. If any change in the rating
established by S&P, Moody's or Duff & Phelps with
<PAGE> 31
respect to Long-Term Debt shall result in a change in the Level, the
change in the commitment fee shall be effective as of the date on which
such rating change is publicly announced. If the ratings established by
any two of S&P, Moody's or Duff & Phelps with respect to Long-Term Debt
are unavailable for any reason for any day, then the applicable level
for purposes of calculating the commitment fee for such day shall be
deemed to be Level 5 (or, if the Requisite Lenders consent in writing,
such other Level as may be reasonably determined by the Requisite
Lenders from a rating with respect to Long-Term Debt for such day
established by another rating agency reasonably acceptable to the
Requisite Lenders).
(b) BID ADVANCE ADMINISTRATION FEE. The Borrower agrees to pay
the Administrative Agent for its own account a handling fee as set
forth in that certain fee letter dated July 24, 1996 between the
Administrative Agent and the Borrower in connection with each request
for a Bid Advance pursuant to Section 2.03.
(c) AGENTS' FEES. The Borrower agrees to pay to each of the
Agents the fees payable to each such Agent pursuant to the fee letters
dated as of July 24, 1996 between the Borrower and CUSA and the fee
letter dated as of July 9, 1996 between the Borrower and B of A, in the
amounts and at the times specified in each of such letters.
(d) ADDITIONAL FEES. In the event the Effective Date has not
occurred on or before September 30, 1996, the Borrower agrees to pay to
the Administrative Agent for account of each Lender the fees payable to
such Lenders pursuant to that certain fee letter dated as of July 24,
1996 between the Borrower and the Administrative Agent.
SECTION 2.05. TERMINATION AND REDUCTION OF THE COMMITMENTS.
(a) MANDATORY TERMINATION. In the event that a mandatory
prepayment in full of the Advances is required by the Requisite Lenders
pursuant to Section 2.06(b) (whether or not there are Advances
outstanding), the Commitments of the Lenders shall immediately
terminate.
(b) OPTIONAL REDUCTIONS. The Borrower shall have the right,
upon at least three (3) Business Days' notice to the Administrative
Agent, to terminate in whole or reduce ratably in part the unused
portions of the respective Commitments of the Lenders; provided that
(i) each partial reduction shall be in the aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof, and
(ii) the aggregate of the Commitments of the Lenders shall not be
reduced to an amount which is less than the Total Utilization of
<PAGE> 32
Commitments.
(c) NO REINSTATEMENT. Once so reduced or terminated pursuant
to this Section 2.05, Commitments of the Lenders shall not be
reinstated.
SECTION 2.06. REPAYMENT AND PREPAYMENT OF ADVANCES.
(a) MANDATORY REPAYMENT ON CERTAIN DATE. The Borrower shall
repay the outstanding principal amount of (i) each Committed Advance
made by each Lender on the Termination Date of such Lender, and (ii)
each Bid Advance at the maturity date specified in the Notice of Bid
Borrowing.
(b) MANDATORY PREPAYMENT IN CERTAIN EVENTS. If any one of the
following events shall occur:
(i) any Person or Persons acting in concert shall
acquire beneficial ownership of more than 40% of the
Borrower's voting stock; or
(ii) during any period of up to 12 months,
individuals who at the beginning of such period were directors
of the Borrower shall cease to constitute a majority of the
Borrower's board of directors; or
(iii) any Debt which is outstanding in a principal
amount of at least $15,000,000 in the aggregate (but excluding
Debt arising under this Agreement) of the Borrower or any of
its Subsidiaries (as the case may be) shall be required to be
prepaid (other than by a regularly scheduled required
prepayment or by a required prepayment of insurance proceeds
or by a required prepayment as a result of formulas based on
asset sales or excess cash flow), redeemed, purchased or
defeased, or an offer to prepay, redeem, purchase or defease
such Debt shall be required to be made, in each case prior to
the stated maturity thereof (other than as set forth in
Section 6.01(d));
then, and in any such event, if the Administrative Agent shall have
received notice from the Requisite Lenders that they elect to have the
Advances prepaid in full and the Administrative Agent shall have
provided notice to the Borrower that the Advances are to be prepaid in
full, the Borrower shall immediately prepay in full the Advances,
together with interest accrued to the date of prepayment and will
reimburse the Lenders in respect thereof pursuant to Section 8.04(b).
(c) VOLUNTARY PREPAYMENTS OF COMMITTED BORROWINGS.
(i) The Borrower shall have no right to prepay any
principal amount of any Advances other than as provided in
this subsection (c).
<PAGE> 33
(ii) The Borrower may, upon notice to the
Administrative Agent no later than 11:00 A.M. (New York time)
(i) on the date the Borrower proposes to prepay Committed
Advances in the case of Base Rate Advances and (ii) at least
two (2) Business Days' notice to the Administrative Agent in
the case of Eurodollar Rate Advances, stating the proposed
date and aggregate principal amount of the prepayment, and if
such notice is given the Borrower shall, prepay the
outstanding principal amounts of the Advances comprising part
of the same Committed Borrowing in whole or ratably in part;
provided, however, that (x) each partial prepayment shall be
in an aggregate principal amount not less than $5,000,000 and
integral multiples of $1,000,000 in excess thereof, and (y) in
the case of any such prepayment of any Eurodollar Rate
Advance, the Borrower shall pay all accrued interest to the
date of such prepayment on the portion of such Eurodollar Rate
Advance being prepaid and shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 8.04(b).
(d) NO PREPAYMENT OF BID BORROWINGS. The Borrower shall have
no right to prepay any principal amount of any Bid Advances.
SECTION 2.07. INTEREST ON COMMITTED ADVANCES. The Borrower shall pay to
each Lender interest accrued on the principal amount of each Committed Advance
outstanding from time to time from the date of such Advance until such principal
amount shall be paid in full, at the following rates per annum:
(a) BASE RATE ADVANCES. If such Committed Advance is a Base
Rate Advance, a rate per annum equal at all times to (i) the Base Rate
in effect from time to time plus (ii) the Applicable Margin, if any,
payable quarterly in arrears on the last day of each March, June,
September and December during the term of this Agreement, commencing
September 30, 1996, and on the Termination Date of the applicable
Lender; provided that any amount of principal, interest, fees and other
amounts payable under this Agreement (including, without limitation,
the principal amount of Base Rate Advances, but excluding the principal
amount of Eurodollar Rate Advances) which is not paid when due (whether
at stated maturity, by acceleration or otherwise) shall bear interest
from the date on which such amount is due until such amount is paid in
full, payable on demand, at a rate per annum equal at all times to 2%
per annum above the Base Rate in effect from time to time.
(b) EURODOLLAR RATE ADVANCES. If such Committed Advance is a
Eurodollar Rate Advance, a rate per annum
<PAGE> 34
equal at all times during the Interest Period for such Advance to the
sum of (i) the Adjusted Eurodollar Rate for such Interest Period plus
(ii) the Applicable Margin, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more
than three months, on the day which occurs during such Interest Period
three months from the first day of such Interest Period; provided that
any principal amount of any Eurodollar Rate Advance which is not paid
when due (whether at stated maturity, by acceleration or otherwise)
shall bear interest from the date on which such amount is due until
such amount is paid in full, payable on demand, at a rate per annum
equal at all times to (A) during the Interest Period applicable to such
Eurodollar Rate Advance, the greater of (x) 2% per annum above the Base
Rate in effect from time to time and (y) 2% per annum above the rate
per annum required to be paid on such amount immediately prior to the
date on which such amount became due and (B) after the expiration of
such Interest Period, 2% per annum above the Base Rate in effect from
time to time.
SECTION 2.08. INTEREST RATE DETERMINATION.
(a) Each Reference Bank agrees to furnish to the
Administrative Agent timely information for the purpose of determining
each Adjusted Eurodollar Rate. If any one or more of the Reference
Banks shall not furnish such timely information to the Administrative
Agent for the purpose of determining any such interest rate, the
Administrative Agent shall determine such interest rate on the basis of
timely information furnished by the remaining Reference Banks, subject
to Section 2.02(b)(iv).
(b) The Administrative Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rate determined by
the Administrative Agent for purposes of Section 2.07(a) or 2.07(b),
and the applicable rate, if any, furnished by each Reference Bank for
the purpose of determining the applicable interest rate under Section
2.07(b).
SECTION 2.09. VOLUNTARY CONVERSION OR CONTINUATION OF COMMITTED
ADVANCES.
(a) The Borrower may on any Business Day, upon notice given to
the Administrative Agent not later than 12:00 noon (New York City time)
on the third Business Day prior to the date of the proposed Conversion
or continuance (a "Notice of Conversion/Continuation") and subject to
the provisions of Section 2.02(b), (1) Convert all Committed Advances
of one Type comprising the same Committed Borrowing into Advances of
another Type and (2) upon the expiration of any Interest Period
applicable to Committed Advances which are Eurodollar Rate Advances,
continue all (or, subject to Section 2.02(b), any portion of) such
Advances as Eurodollar
<PAGE> 35
Rate Advances and the succeeding Interest Period(s) of such continued
Advances shall commence on the last day of the Interest Period of the
Advances to be continued; provided, however, that any Conversion of any
Eurodollar Rate Advances into Base Rate Advances shall be made on, and
only on, the last day of an Interest Period for such Eurodollar Rate
Advances. Each such Notice of Conversion/Continuation shall, within the
restrictions specified above, specify (i) the date of such continuation
or Conversion, (ii) the Committed Advances (or, subject to Section
2.02(b), any portion thereof) to be continued or Converted, (iii) if
such continuation is of, or such Conversion is into, Eurodollar Rate
Advances, the duration of the Interest Period for each such Committed
Advance, and (iv) in the case of a continuation of or a Conversion into
a Eurodollar Rate Advance, that no Potential Event of Default or Event
of Default has occurred and is continuing.
(b) If upon the expiration of the then existing Interest
Period applicable to any Committed Advance which is a Eurodollar Rate
Advance, the Borrower shall not have delivered a Notice of
Conversion/Continuation in accordance with this Section 2.09, then such
Advance shall upon such expiration automatically be Converted to a Base
Rate Advance.
(c) After the occurrence of and during the continuance of a
Potential Event of Default or an Event of Default, the Borrower may not
elect to have an Advance be made or continued as, or Converted into, a
Eurodollar Rate Advance after the expiration of any Interest Period
then in effect for that Advance.
SECTION 2.10. INCREASED COSTS.
(a) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve
requirements in the case of Eurodollar Rate Advances included in the
Eurodollar Rate Reserve Percentage) in or in the interpretation of any
law or regulation or (ii) the compliance with any guideline or request
from any central bank or other governmental authority (whether or not
having the force of law), there shall be any increase in the cost to
any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time,
upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account
of such Lender additional amounts sufficient to compensate such Lender
for such increased cost. A reasonably detailed certificate as to the
amount and manner of calculation of such increased cost, submitted to
the Borrower and the Administrative Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
<PAGE> 36
(b) If any Lender (other than Designated Bidders) determines
that compliance with any law or regulation or any guideline or request
from any central bank or other governmental authority (whether or not
having the force of law) affects or would affect the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is
increased by or based upon the existence of such Lender's commitment to
lend hereunder and other commitments of this type, then, upon demand by
such Lender (with a copy of such demand to the Administrative Agent),
the Borrower shall immediately pay to the Administrative Agent for the
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent that such
Lender reasonably determines such increase in capital to be allocable
to the existence of such Lender's commitment to lend hereunder. A
reasonably detailed certificate as to such amounts and the manner of
calculation thereof submitted to the Borrower and the Administrative
Agent by such Lender shall be conclusive and binding for all purposes,
absent manifest error.
(c) If a Lender shall change its Applicable Lending Office,
such Lender shall not be entitled to receive any greater payment under
Sections 2.10 and 2.12 than the amount such Lender would have been
entitled to receive if it had not changed its Applicable Lending
Office, unless such change was made at the request of the Borrower or
at a time when the circumstances giving rise to such greater payment
did not exist.
SECTION 2.11. PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder not later
than 1:00 P.M. (New York City time) on the day when due in Dollars to
the Administrative Agent at its address referred to in Section 8.02 in
same day funds. Subject to the immediately succeeding sentence, the
Administrative Agent will promptly thereafter cause to be distributed
like funds relating to the payment of principal or interest or
commitment fees ratably (other than amounts payable pursuant to Section
2.10 or 2.12 or, to the extent the Termination Date is not the same for
all Lenders, pursuant to Section 2.06(a)) to the Lenders for the
account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender to
such Lender for the account of its Applicable Lending Office, in each
case to be applied in accordance with the terms of this Agreement. Upon
receipt of principal or interest paid after an Event of Default and an
acceleration or a deemed acceleration of amounts due
<PAGE> 37
hereunder, the Administrative Agent will promptly thereafter cause to
be distributed like funds relating to the payment of principal or
interest ratably in accordance with each Lender's outstanding Advances
(other than amounts payable pursuant to Section 2.10 or 2.12) to the
Lenders for the account of their respective Applicable Lending Offices.
Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section
8.07(c), from and after the effective date specified in such Assignment
and Acceptance, the Administrative Agent shall make all payments
hereunder in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods
prior to such effective date directly between themselves.
(b) All computations of interest based on the Base Rate shall
be made by the Administrative Agent on the basis of a year of 365 or
366 days, as the case may be, and all computations of interest based on
the Adjusted Eurodollar Rate, the Federal Funds Rate or the Fixed Rate
and of commitment fees shall be made by the Administrative Agent on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the
period for which such interest or such fees are payable. Each
determination by the Administrative Agent of an interest rate hereunder
shall be conclusive and binding for all purposes. absent manifest
error.
(c) Whenever any payment hereunder shall be stated to be due
on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or
commitment fee, as the case may be; provided, however, if such
extension would cause payment of interest on or principal of Eurodollar
Rate Advances to be made in the next following calendar month, such
payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment in full,
the Administrative Agent may assume that the Borrower has made such
payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent that the Borrower
shall not have so made such payment in
<PAGE> 38
full to the Administrative Agent, each Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to
such Lender together with interest thereon, for each day from the date
such amount is distributed to such Lender until the date such Lender
repays such amount to the Administrative Agent, at the Federal Funds
Rate.
SECTION 2.12. TAXES.
(a) Any and all payments by the Borrower hereunder shall be
made, in accordance with Section 2.11, free and clear of and without
deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding (i) in the case of each Lender and each Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender or such Agent (as the
case may be) is organized or any political subdivision thereof or in
which its principal office is located, (ii) in the case of each Lender
taxes imposed on its net income, and franchise taxes imposed on it, by
the jurisdiction of such Lender's Applicable Lending Office or any
political subdivision thereof and (iii) in the case of each Lender and
each Agent, taxes imposed by the United States by means of withholding
at the source if and to the extent that such taxes shall be in effect
and shall be applicable on the date hereof in the case of each Bank and
on the effective date of the Assignment and Acceptance pursuant to
which it became a Lender in the case of each other Lender, on payments
to be made to the Agents or such Lender's Applicable Lending Office
(all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Lender or either Agent, (i)
the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 2.12) such Lender or such
Agent (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement (hereinafter referred to as "Other Taxes").
<PAGE> 39
(c) The Borrower will indemnify each Lender and each Agent for
the full amount of Taxes or Other Taxes (including, without limitation,
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under this Section 2.12) paid by such Lender or such Agent (as the case
may be) and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or
Other Taxes were correctly or legally asserted. This indemnification
shall be made within 30 days from the date such Lender or such Agent
(as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Agent, at its address
referred to in Section 8.02, the original or a certified copy of a
receipt evidencing payment thereof.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Bank and on the date of
the Assignment and Acceptance pursuant to which it becomes a Lender in
the case of each other Lender, and from time to time thereafter if
requested in writing by the Borrower (but only so long as such Lender
remains lawfully able to do so), shall provide the Borrower with
Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying
that such Lender is entitled to benefits under an income tax treaty to
which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States. If the form
provided by a Lender at the time such Lender first becomes a party to
this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered
excluded from "Taxes" as defined in Section 2.12(a).
(f) For any period with respect to which a Lender has failed
to provide the Borrower with the appropriate form described in Section
2.12(e) (other than if such failure is due to a change in law occurring
subsequent to the date on which a form originally was required to be
provided, or if such form otherwise is not required under the first
sentence of subsection (e) above), such Lender shall not be entitled to
indemnification under Section 2.12(a) with respect to Taxes imposed by
the United States; provided, however, that should a Lender become
subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall, at the expense of such Lender, take such
steps as the
<PAGE> 40
Lender shall reasonably request to assist the Lender to recover such
Taxes.
(g) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.12 shall survive the payment in
full of principal and interest hereunder.
SECTION 2.13. SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) on account of the Advances made by it (other than pursuant
to Section 2.10 or 2.12 or, to the extent the Termination Date is not the same
for all Lenders, pursuant to Section 2.06(a)) in excess of its ratable share of
payments on account of the Committed Advances obtained by all the Lenders, such
Lender shall forthwith purchase from the other Lenders such participations in
the Committed Advances made by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.13 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
SECTION 2.14. EVIDENCE OF DEBT.
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the
Borrower to such Lender resulting from each Advance owing to such
Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.
(b) The Register maintained by the Administrative Agent
pursuant to Section 8.07(c) shall include a control account, and a
subsidiary account for each Lender, in which accounts (taken together)
shall be recorded (i) the date, amount and tenor, as applicable, of
each Borrowing, the Type of Advances comprising such Borrowing and the
Interest Period applicable thereto,
<PAGE> 41
(ii) the terms of each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender
hereunder, and (iv) the amount of any sum received by the
Administrative Agent from the Borrower hereunder and each Lender's
share thereof.
(c) The entries made in the Register shall be conclusive and
binding for all purposes, absent manifest error.
(d) If, in the opinion of any Lender, a promissory note or
other evidence of debt is required, appropriate or desirable to reflect
or enforce the indebtedness of the Borrower resulting from the
Committed Advances or Bid Advances made, or to be made, by such Lender
to the Borrower, then, upon request of such Lender, the Borrower shall
promptly execute and deliver to such Lender a promissory note
substantially in the form of EXHIBIT G-1 in the case of Committed
Advances and EXHIBIT G-2 in the case of Bid Advances, payable to the
order of such Lender in an amount up to the maximum amount of Committed
Advances or Bid Advances, as the case may be, payable or to be payable
by such Borrower to the Lender from time to time hereunder.
SECTION 2.15. USE OF PROCEEDS.
(a) Advances shall be used by the Borrower for commercial
paper backup and for general corporate purposes; provided that proceeds
of Advances and proceeds of commercial paper as to which this Agreement
provides backup shall not be used for any Hostile Acquisition.
(b) No portion of the proceeds of any Advances under this
Agreement shall be used by the Borrower or any of its Subsidiaries in
any manner which might cause the Advances or the application of such
proceeds to violate, or require any Lender to make any filing or take
any other action under, Regulation G, Regulation U, Regulation T, or
Regulation X of the Board of Governors of the Federal Reserve System or
any other regulation of such Board or to violate the Securities
Exchange Act of 1934, in each case as in effect on the date or dates of
such Advances and such use of proceeds.
SECTION 2.16. EXTENSION OF THE COMMITMENT TERMINATION DATE. The
Borrower may not more than once in any calendar year and not later than 45 days
prior to an anniversary of the Effective Date, request that the Commitment
Termination Date of all Eligible Lenders (as defined below) be extended for a
period of one year by delivering to the Administrative Agent a signed copy of an
<PAGE> 42
extension request (an "Extension Request") in substantially the form of EXHIBIT
E hereto. The Administrative Agent shall promptly notify each Eligible Lender of
its receipt of such Extension Request. On or prior to ten days prior to the
applicable anniversary of the Effective Date in each calendar year in which
there has been an Extension Request (the "Determination Date"), each Eligible
Lender shall notify the Administrative Agent and the Borrower of its willingness
or unwillingness to extend its Commitment Termination Date hereunder. Any
Eligible Lender that shall fail to so notify the Administrative Agent and the
Borrower on or prior to the Determination Date shall be deemed to have declined
to so extend. In the event that, on or prior to the Determination Date, Eligible
Lenders representing 66-2/3% or more of the aggregate amount of the Commitments
of all Eligible Lenders then in effect shall consent to such extension, upon
confirmation by the Administrative Agent of such consent, the Administrative
Agent shall so advise the Lenders and the Borrower, and, subject to execution of
documentation evidencing such extension and consents, the Commitment Termination
Date of each Eligible Lender (each a "Consenting Lender") that has consented on
or prior to the Determination Date to so extend shall be extended to the date
one year after the Commitment Termination Date of such Eligible Lender in
existence on the date of the related Extension Request. Thereafter, (i) for each
Consenting Lender, the term "Commitment Termination Date" shall at all times
refer to such date, unless it is later extended pursuant to this Section 2.16,
and (ii) for each Lender that is not an Eligible Lender and for each Eligible
Lender that either has declined on or prior to the Determination Date to so
extend or is deemed to have so declined, the term "Commitment Termination Date"
shall at all times refer to the date which was the Commitment Termination Date
of such Lender immediately prior to the delivery to the Administrative Agent of
such Extension Request. In the event that, as of the Determination Date, the
Consenting Lenders represent less than 66-2/3% of the aggregate amount of the
Commitments of all Eligible Lenders then in effect, and the Agents confirm the
same, the Administrative Agent shall so advise the Lenders and the Borrower, and
none of the Lenders' Commitment Termination Dates shall be extended to the date
indicated in the Extension Request and each Lender's Commitment Termination Date
shall continue to be the date which was the Commitment Termination Date of such
Lender immediately prior to the delivery to the Agents of such Extension
Request. For purposes of this Section 2.16, the term "Eligible Lenders" means,
with respect to any Extension Request, (i) all Lenders if no Lender's Commitment
Termination Date had been extended pursuant to this Section 2.16 prior to the
delivery to the Agents of such Extension Request, and (ii) in all other cases,
those Lenders which had extended their Commitment Termination Date in the most
recent extension of any Commitment Termination Date effected pursuant to this
Section 2.16.
<PAGE> 43
SECTION 2.17. SUBSTITUTION OF LENDERS. If any Lender requests
compensation from the Borrower under Section 2.10(a) or (b) or Section 2.12 or
if any Lender declines to extend its Commitment Termination Date pursuant to
Section 2.16, the Borrower shall have the right, with the assistance of the
Agents, to seek one or more Eligible Assignees (which may be one or more of the
Lenders) reasonably satisfactory to the Agents and the Borrower to purchase the
Advances and assume the Commitments of such Lender, and the Borrower the Agents,
such Lender, and such Eligible Assignees shall execute and deliver an
appropriately completed Assignment and Acceptance pursuant to Section 8.07(a)
hereof to effect the assignment of rights to and the assumption of obligations
by such Eligible Assignees; provided that (i) such requesting Lender shall be
entitled to compensation under Section 2.10 and 2.12 for any costs incurred by
it prior to its replacement, (ii) no Event of Default, or event which with the
giving of notice or lapse of time or both would be an Event of Default, has
occurred and is continuing, (iii) the Borrower has satisfied all of its
obligations under the Loan Documents relating to such Lender, including without
limitation obligations, if any, under Section 8.04(b), and (iv) the Borrower
shall have paid the Administrative Agent a $3,000 administrative fee if such
replacement Lender is not an existing Lender.
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND LENDING
SECTION 3.01. DOCUMENTS TO BE DELIVERED ON THE CLOSING DATE. The
Closing Date shall be deemed to have occurred when this Agreement shall have
been executed and delivered by the parties hereto and (a) the Agents shall have
received the following, each dated the Closing Date or within two days prior to
the Closing Date unless otherwise indicated, and each in form and substance
satisfactory to the Agents unless otherwise indicated and in sufficient copies
for each Lender:
(i) Copies of resolutions of the Board of Directors
of the Borrower (or its Executive Committee, together with
evidence of the authority of the Executive Committee)
approving this Agreement, and of all documents evidencing
other necessary corporate action and governmental approvals,
if any, with respect to this Agreement, certified as of a
recent date prior to the Closing Date.
(ii) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to sign
this Agreement and the other documents to be delivered by the
Borrower hereunder.
(iii) Certified copies of the Borrower's
<PAGE> 44
Certificate of Incorporation, together with good standing
certificates from the state of Delaware and the jurisdiction
of the Borrower's principal place of business, each to be
dated a recent date prior to the Closing Date;
(iv) Copies of the Borrower's Bylaws, certified as of
the Closing Date by their respective Secretary or an Assistant
Secretary;
(v) Executed originals of this Agreement and the
other documents to be delivered by the Borrower hereunder;
(vi) A favorable opinion of the General Counsel of
the Borrower, substantially in the form of EXHIBIT C-1 hereto;
(vii) A favorable opinion of O'Melveny & Myers LLP,
counsel for the Agents, substantially in the form of EXHIBIT
D-1 hereto;
(viii) The Form 10, in the form filed with the SEC;
(ix) The Form 8-K, in the form filed with the SEC;
(x) A certificate of an authorized officer of the
Borrower to the effect that since December 31, 1995, there has
been no material adverse change in the operations, business or
financial or other condition or properties of the Borrower and
its Subsidiaries, taken as a whole and since March 31, 1996
there has been no material adverse change in the operations,
business or financial or other condition or properties of the
Borrower and its Subsidiaries, taken as a whole, in each case
on a pro forma basis after giving effect to the Distribution;
and
(xi) Evidence that the Newco Credit Agreement has
been duly executed and delivered and the Closing Date
thereunder has occurred; and
(b) the Agents shall have received such other approvals,
opinions or documents as the Requisite Lenders through the Agents may
reasonably request.
SECTION 3.02. CONDITIONS PRECEDENT TO EFFECTIVE TIME. This Agreement
shall become fully effective pursuant to Section 8.06(b) at the Effective Time
on the Effective Date upon the satisfaction of, and the obligation of each
Lender to make its initial Advance is subject to, the conditions precedent that:
(a) the Agents shall have received on or before
<PAGE> 45
the Effective Date the following, each dated the Effective Date unless
otherwise indicated, and each in form and substance satisfactory to the
Requisite Lenders and in sufficient copies for each Lender:
(i) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying that the documents,
certificates and statements referred to in Section 3.01(a)(i)
through (iv) remain in full force and effect and are true and
correct as of the Effective Date as if executed and made on
the Effective Date;
(ii) A favorable opinion of the General Counsel of
the Borrower, substantially in the form of EXHIBIT C-2 hereto;
(iii) A favorable opinion of O'Melveny & Myers LLP,
counsel for the Agents, substantially in the form of EXHIBIT
D-2 hereto;
(iv) A certificate of an authorized officer of the
Borrower certifying that the statements made in the
certificate referred to in Section 3.01(a)(x) remain true and
correct as of the Effective Date;
(v) Evidence reasonably satisfactory to the Requisite
Lenders that the Distribution Agreement is in full force and
effect and has not been amended, supplemented, waived or
otherwise modified without the consent of Requisite Lenders,
and executed and conformed copies thereof (including all
exhibits and schedules thereto) and any amendments thereto and
all documents executed in connection therewith shall have been
delivered to Agents;
(vi) Evidence reasonably satisfactory to the
Requisite Lenders that the Merger has become effective and
that the Distribution will become effective immediately after
the Effective Time at the Distribution Time in accordance with
the terms and conditions of the Distribution Agreement;
(vii) Evidence that the SEC has declared the Form 10
effective;
(viii) Evidence reasonably satisfactory to the
Requisite Lenders that all approvals, permits, licenses,
authorizations and consents, if any, from any governmental or
regulatory authority necessary to effectuate the Distribution
have been duly obtained and are in full force and effect as of
the Effective Date;
<PAGE> 46
(ix) Evidence that the Newco Credit Agreement has
become effective in accordance with the terms and conditions
set forth therein; and
(x) Letter agreements between the Borrower and the
Exiting Banks, reasonably satisfactory to the Requisite
Lenders terminating (1) all funding obligations and other
obligations of the Exiting Banks under the Existing Credit
Agreement upon the effectiveness of this Agreement, and (2)
all payment obligations and other obligations of the Borrower
under the Existing Credit Agreement to the Exiting Banks upon
the terms and conditions set forth in such letter agreements;
and
(b) the Agents shall have received the fees set forth in
Section 2.04(c) if such fees are payable to the Agents and the Banks on
or prior to the Effective Date; and
(c) the Agents shall have received such other approvals,
opinions or documents as the Requisite Lenders through the Agents may
reasonably request.
SECTION 3.03. CONDITIONS PRECEDENT TO EACH COMMITTED BORROWING. The
obligation of each Lender to make a Committed Advance on the occasion of a
Committed Borrowing (including the initial Committed Borrowing) shall be subject
to the further conditions precedent that (x) the Administrative Agent shall have
received a Notice of Committed Borrowing with respect thereto in accordance with
Section 2.02 and (y) on the date of such Borrowing (a) the following statements
shall be true (and each of the giving of the applicable Notice of Borrowing and
the acceptance by the Borrower of the proceeds of such Borrowing shall
constitute a representation and warranty by the Borrower that on the date of
such Borrowing such statements are true):
(i) The representations and warranties of the
Borrower contained in Section 4.01 are correct on and as of
the date of such Borrowing, before and after giving effect to
such Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, except to
the extent that any such representation or warranty expressly
relates only to an earlier date, in which case they were
correct as of such earlier date; and
(ii) No event has occurred and is continuing, or
would result from such Borrowing or from the application of
the proceeds therefrom, which constitutes an Event of Default,
or a Potential Event of Default; and
<PAGE> 47
(b) the Agents shall have received such other approvals,
opinions or documents as the Requisite Lenders through the Agents may
reasonably request.
SECTION 3.04. CONDITIONS PRECEDENT TO EACH BID BORROWING. The
obligation of each Lender to make a Bid Advance on the occasion of a Bid
Borrowing (including the initial Bid Borrowing) shall be subject to the further
conditions precedent that (x) the Administrative Agent shall have received a
Notice of Bid Borrowing with respect thereto in accordance with Section 2.03 and
(y) on the date of such Borrowing the following statements shall be true (and
each of the giving of the applicable Notice of Bid Borrowing and the acceptance
by the Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
such statements are true):
(i) The representations and warranties of the Borrower
contained in Section 4.01 are correct on and as of the date of such
Borrowing, before and after giving effect to such Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date, except to the extent that any such representation or warranty
expressly relates only to an earlier date, in which case they were
correct as of such earlier date; and
(ii) No event has occurred and is continuing, or would result
from such Borrowing or from the application of the proceeds therefrom,
which constitutes an Event of Default, or a Potential Event of Default.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
(a) DUE ORGANIZATION, ETC. The Borrower and each Material
Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation.
The Borrower and each of its Material Subsidiaries are qualified to do
business in and are in good standing under the laws of each
jurisdiction in which failure to be so qualified would have a material
adverse effect on the Borrower and its Subsidiaries, taken as a whole.
(b) DUE AUTHORIZATION, ETC. The execution, delivery and
performance by the Borrower of this Agreement and the other Loan
Documents are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and do not
<PAGE> 48
contravene (i) the Borrower's Certificate of Incorporation or (ii)
applicable law or any material contractual restriction binding on or
affecting the Borrower.
(c) GOVERNMENTAL CONSENT. No authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution,
delivery and performance by the Borrower of this Agreement and the
other Loan Documents.
(d) VALIDITY. This Agreement is the legal, valid and binding
obligation of the Borrower enforceable against the Borrower in
accordance with its terms subject to the effect of applicable
bankruptcy, insolvency, arrangement, moratorium and other similar laws
affecting creditors' rights generally and to the application of general
principles of equity.
(e) CONDITION OF THE BORROWER. The consolidated balance sheet
of the Borrower and its Subsidiaries as at December 31, 1995, and the
related consolidated statements of income and retained earnings of the
Borrower and its Subsidiaries for the fiscal year then ended, copies of
which have been previously furnished to each Bank, and the pro forma
consolidated balance sheet of the Borrower and its Subsidiaries as at
March 31, 1996 and the pro forma statements of consolidated income of
the Borrower and its Subsidiaries for the three months ended March 31,
1996 and 1995 and for the year ended December 31, 1995, in each case
after giving effect to the Distribution, copies of which are contained
in the Form 8-K furnished to each Bank pursuant to Section 3.01(a)(ix),
fairly present the consolidated financial condition of the Borrower and
its Subsidiaries (on a pro forma basis after giving effect to the
Distribution with respect to such pro forma financial statements) as at
such date and the results of the operations of the Borrower and its
Subsidiaries for the periods ended on such dates, all in accordance
with GAAP consistently applied, and as of the Effective Date, there has
been no material adverse change in the business, condition (financial
or otherwise), operations or properties of the Borrower and its
Subsidiaries, taken as a whole, since March 31, 1996, after giving
effect to the Distribution.
(f) LITIGATION. (i) There is no pending action or proceeding
against the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator, and (ii) to the knowledge of the
Borrower, there is no pending or threatened action or proceeding
affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator, which in either case, in the
reasonable judgement of
<PAGE> 49
the Borrower could reasonably be expected to materially adversely
affect the financial condition or operations of the Borrower and its
Subsidiaries, taken as a whole, or with respect to actions of third
parties which purports to affect the legality, validity or
enforceability of this Agreement.
(g) MARGIN REGULATIONS. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System), and no proceeds of any
Advance will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin
stock in any manner that violates, or would cause a violation of,
Regulation G, Regulation T, Regulation U or Regulation X. Less than 25
percent of the fair market value of the assets of (i) the Borrower or
(ii) the Borrower and its Subsidiaries consists of Margin Stock.
(h) PAYMENT OF TAXES. The Borrower and each of its
Subsidiaries have filed or caused to be filed all material tax returns
(federal, state, local and foreign) required to be filed and paid all
material amounts of taxes shown thereon to be due, including interest
and penalties, except for such taxes as are being contested in good
faith and by proper proceedings and with respect to which appropriate
reserves are being maintained by the Borrower or any such Subsidiary,
as the case may be.
(i) GOVERNMENTAL REGULATION. The Borrower is not subject to
regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act or the Investment
Company Act of 1940, each as amended, or to any Federal or state
statute or regulation limiting its ability to incur indebtedness for
money borrowed. No Subsidiary of the Borrower is subject to any
regulation that would limit the ability of the Borrower to enter into
or perform its obligations under this Agreement.
(j) ERISA.
(i) No ERISA Event which might result in liability of
the Borrower or any of its ERISA Affiliates in excess of
$10,000,000 (or, in the case of an event described in clause
(v) of the definition of ERISA Event, $750,000) (other than
for premiums payable under Title IV of ERISA) has occurred or
is reasonably expected to occur with respect to any Pension
Plan.
(ii) Schedule B (Actuarial Information) to the most
recently completed annual report prior to
<PAGE> 50
the Effective Date (Form 5500 Series) for each Pension Plan,
copies of which have been filed with the Internal Revenue
Service and furnished to the Agents, is complete and, to the
best knowledge of the Borrower, accurate, and since the date
of such Schedule B there has been no material adverse change
in the funding status of any such Pension Plan.
(iii) Neither the Borrower nor any ERISA Affiliate
has incurred, or, to the best knowledge of the Borrower, is
reasonably expected to incur, any Withdrawal Liability to any
Multiemployer Plan which has not been satisfied or which is or
might be in excess of $10,000,000.
(iv) Neither the Borrower nor any ERISA Affiliate has
been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA, and, to
the best knowledge of the Borrower, no Multiemployer Plan is
reasonably expected to be in reorganization or to be
terminated within the meaning of Title IV of ERISA.
(k) ENVIRONMENTAL MATTERS.
(i) The Borrower and each of its Subsidiaries is in
compliance in all material respects with all Environmental
Laws the non-compliance with which could reasonably be
expected to have a material adverse effect on the financial
condition or operations of the Borrower and its Subsidiaries,
taken as a whole, and (ii) there has been no "release or
threatened release of a hazardous substance" (as defined by
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. 9601 et seq.) or
any other release, emission or discharge into the environment
of any hazardous or toxic substance, pollutant or other
materials from the Borrower's or its Subsidiaries' property
other than as permitted under applicable Environmental Law and
other than those which would not have a material adverse
effect on the financial condition or operations of the
Borrower and its Subsidiaries, taken as a whole. Other than
disposals (A) for which the Borrower has been indemnified in
full or (B) which would not have a material adverse effect on
the financial condition or operations of the Borrower and its
Subsidiaries, taken as a whole, all "hazardous waste" (as
defined by the Resource Conservation and Recovery Act, 42
U.S.C. 6901 et seq. (1976) and the regulations thereunder, 40
CFR Part 261 ("RCRA")) generated at the Borrower's or any
Subsidiaries' properties have in the past been and
<PAGE> 51
shall continue to be disposed of at sites which maintain valid
permits under RCRA and any applicable state or local
Environmental Law.
(l) DISCLOSURE. As of the Closing Date and as of the Effective
Date, to the best of the Borrower's knowledge, no representation or
warranty of the Borrower or any of its Subsidiaries contained in this
Agreement or any other Loan Document or statement made in the Form 10
(including all Exhibits thereto filed with the Securities and Exchange
Commission) or the Form 8-K or in any other document, certificate or
written statement furnished to the Banks by or on behalf of the
Borrower or any of its Subsidiaries contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements contained in such agreements, documents,
certificates and statements not misleading in light of the
circumstances in which the same were made.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will unless the Requisite Lenders shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS ETC. Comply, and cause each of its
Subsidiaries to comply, with all applicable laws, rules, regulations
and orders, such compliance to include, without limitation, (i)
complying with all Environmental Laws and (ii) paying before the same
become delinquent all taxes, assessments and governmental charges
imposed upon it or upon its property except to the extent contested in
good faith, except where failure to so comply would not have a material
adverse effect on the business, condition (financial or otherwise),
operations or properties of the Borrower and its Subsidiaries, taken as
a whole.
(b) REPORTING REQUIREMENTS. Furnish to the Administrative
Agent (in sufficient quantity for delivery to each Lender) for prompt
distribution by the Administrative Agent to the Lenders and furnish to
the Documentation Agent:
(i) as soon as available and in any event within 60
days after the end of each of the first three quarters of each
fiscal year of the Borrower, consolidated balance sheets as of
the end of such quarter and consolidated statements of source
and application of funds of the Borrower and its Subsidiaries
and consolidated statements
<PAGE> 52
of income and retained earnings of the Borrower and its
Subsidiaries for such quarter and the period commencing at the
end of the previous fiscal year and ending with the end of
such quarter and certified by the chief financial officer or
chief accounting officer of the Borrower;
(ii) as soon as available and in any event within 120
days after the end of each fiscal year of the Borrower, a copy
of the annual audit report for such year for the Borrower and
its Subsidiaries, containing financial statements (including a
consolidated balance sheet and consolidated statement of
income and cash flows of the Borrower and its Subsidiaries)
for such year, certified by and accompanied by an opinion of
Deloitte & Touche or other nationally recognized independent
public accountants. The opinion shall be unqualified (as to
going concern, scope of audit and disagreements over the
accounting or other treatment of offsets) and shall state that
such consolidated financial statements present fairly in all
material respects the financial position of the Borrower and
its Subsidiaries as at the dates indicated and the results of
their operations and cash flow for the periods indicated in
conformity with GAAP and that the examination by such
accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted
auditing standards;
(iii) together with each delivery of the report of
the Borrower and its Subsidiaries pursuant to subsections (i)
and (ii) above, a Compliance Certificate for the year executed
by the chief financial officer or treasurer of the Borrower
demonstrating in reasonable detail compliance during and at
the end of such accounting periods with the restrictions
contained in Section 5.02(e) and (f) (and setting forth the
arithmetical computation required to show such compliance) and
stating that the signer has reviewed the terms of this
Agreement and has made, or caused to be made under his or her
supervision, a review in reasonable detail of the transactions
and condition of the Borrower and its Subsidiaries during the
accounting period covered by such financial statements and
that such review has not disclosed the existence during or at
the end of such accounting period, and that the signer does
not have knowledge of the existence as at the date of the
compliance certificate, of any condition or event that
constitutes an Event of Default or Potential Event of Default
or, if any such
<PAGE> 53
condition or event existed or exists, specifying the nature
and period of existence thereof and what action the Borrower
has taken, is taking and proposes to take with respect
thereto;
(iv) as soon as possible and in any event within five
days after the occurrence of each Event of Default and each
Potential Event of Default, continuing on the date of such
statement, a statement of an authorized financial officer of
the Borrower setting forth details of such Event of Default or
event and the action which the Borrower has taken and proposes
to take with respect thereto;
(v) promptly after any material change in accounting
policies or reporting practices, notice and a description in
reasonable detail of such change;
(vi) promptly and in any event within 30 days after
the Borrower or any ERISA Affiliate knows or has reason to
know that any ERISA Event referred to in clause (i) of the
definition of ERISA Event with respect to any Pension Plan has
occurred which might result in liability to the PBGC a
statement of the chief accounting officer of the Borrower
describing such ERISA Event and the action, if any, that the
Borrower or such ERISA Affiliate has taken or proposes to take
with respect thereto;
(vii) promptly and in any event within 15 days after
the Borrower or any ERISA Affiliate knows or has reason to
know that any ERISA Event (other than an ERISA Event referred
to in (vi) above) with respect to any Pension Plan has
occurred which might result in liability to the PBGC in excess
of $100,000, a statement of the chief accounting officer of
the Borrower describing such ERISA Event and the action, if
any, that the Borrower or such ERISA Affiliate has taken or
proposes to take with respect thereto;
(viii) promptly and in any event within five Business
Days after receipt thereof by the Borrower or any ERISA
Affiliate from the PBGC, copies of each notice from the PBGC
of its intention to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan;
(ix) promptly and in any event within 15 days after
receipt thereof by the Borrower or any ERISA Affiliate from
the sponsor of a
<PAGE> 54
Multiemployer Plan, a copy of each notice received by the
Borrower or any ERISA Affiliate concerning (w) the imposition
of Withdrawal Liability by a Multiemployer Plan in excess of
$100,000, (x) the determination that a Multiemployer Plan is,
or is expected to be, in reorganization within the meaning of
Title IV of ERISA, (y) the termination of a Multiemployer Plan
within the meaning of Title IV of ERISA or (z) the amount of
liability incurred, or expected to be incurred, by the
Borrower or any ERISA Affiliate in connection with any event
described in clause (w), (x) or (y) above;
(x) promptly after the commencement thereof, notice
of all material actions, suits and proceedings before any
court or government department, commission, board, bureau,
agency or instrumentality, domestic or foreign, affecting the
Borrower or any of its Subsidiaries, of the type described in
Section 4.01(f);
(xi) promptly after the occurrence thereof, notice of
(A) any event which makes any of the representations contained
in Section 4.01(k) inaccurate in any material respect or (B)
the receipt by the Borrower of any notice, order, directive or
other communication from a governmental authority alleging
violations of or noncompliance with any Environmental Law
which could reasonably be expected to have a material adverse
effect on the financial condition of the Borrowers and its
Subsidiaries, taken as a whole;
(xii) promptly after any change in the rating
established by S&P, Moody's or Duff & Phelps, as applicable,
with respect to Long-Term Debt, a notice of such change, which
notice shall specify the new rating, the date on which such
change was publicly announced, and such other information with
respect to such change as any Lender through either Agent may
reasonably request;
(xiii) promptly after the sending or filing thereof,
copies of all reports which the Borrower sends to any of its
public security holders, and copies of all reports and
registration statements which the Borrower files with the SEC
or any national security exchange;
(xiv) promptly after the Borrower or any ERISA
Affiliate creates any employee benefit plan to provide health
or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of the Borrower
or any of its ERISA Affiliates (except as provided in
<PAGE> 55
Section 4980B of the Code and except as provided under the
terms of any employee welfare benefit plans provided pursuant
to the terms of collective bargaining agreements) under the
terms of which the Borrower and/or any of its ERISA Affiliates
are not permitted to terminate such benefits, a notice
detailing such plan; and
(xv) such other information respecting the condition
or operations, financial or otherwise, of the Borrower or any
of its Subsidiaries as any Lender through either Agent may
from time to time reasonably request.
(c) CORPORATE EXISTENCE, ETC. The Borrower will, and will
cause each of its Subsidiaries to, at all times preserve and maintain
its fundamental business and preserve and keep in full force and effect
its corporate existence (except as permitted under Section 5.02(b)
hereof) and all rights, franchises and licenses necessary or desirable
in the normal conduct of its business; provided, however, that this
paragraph (c) shall not apply in any case when, in the good faith
business judgment of the Borrower, such preservation or maintenance is
neither necessary nor appropriate for the prudent management of the
business of the Borrower.
(d) INSPECTION. The Borrower will permit and will cause each
of its Subsidiaries to permit any authorized representative designated
by either Agent or any Lender at the expense of such Agent or such
Lender, to visit and inspect any of the properties of the Borrower or
any of its Subsidiaries, including its and their financial and
accounting records, and to take copies and to take extracts therefrom,
and discuss its and their affairs, finances and accounts with its and
their officers and independent public accountants, all during normal
hours, upon reasonable notice and as often as may be reasonably
requested.
(e) INSURANCE. The Borrower will maintain and will cause each
of its Subsidiaries to maintain insurance to such extent and covering
such risks as is usual for companies engaged in the same or similar
business and on request will advise the Lenders of all insurance so
carried.
(f) TAXES. The Borrower will and will cause each of its
Subsidiaries to pay and discharge, before the same shall become
delinquent, (x) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (y) all lawful claims
that, if unpaid, might by law become a lien upon their property;
provided, however, that neither the Borrower nor any such Subsidiary
shall be required to pay or discharge any such tax, assessment, charge
or levy (A)
<PAGE> 56
that is being contested in good faith and by proper proceedings and for
which appropriate reserves are being maintained, or (B) the failure to
pay or discharge which would not have a material adverse effect on the
financial condition or operations of the Borrower and its Subsidiaries
taken as a whole.
(g) MAINTENANCE OF BOOKS, ETC. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of records and
accounts, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Borrower and
each of its domestic Subsidiaries in accordance with GAAP and with
respect to foreign Subsidiaries in accordance with customary accounting
standards in the applicable jurisdiction, in each case consistently
applied and consistent with prudent business practices.
SECTION 5.02. NEGATIVE COVENANTS. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, without the written
consent of the Requisite Lenders:
(a) LIENS, ETC. The Borrower will not create or suffer to
exist, or permit any of its Subsidiaries to create or suffer to exist,
any Lien, upon or with respect to any of its properties, whether now
owned or hereafter acquired, or assign, or permit any of its
Subsidiaries to assign, any right to receive income, in each case to
secure or provide for the payment of any Debt of any Person, unless the
Borrower's obligations hereunder shall be secured equally and ratably
with, or prior to, any such Debt; provided however that the foregoing
restriction shall not apply to the following Liens which are permitted:
(i) Liens on assets of any Subsidiary of the Borrower
existing at the time such Person becomes a Subsidiary (other
than any such Lien created in contemplation of becoming a
Subsidiary);
(ii) Liens on accounts receivable resulting from the
sale of such accounts receivable by the Borrower or a
Subsidiary of the Borrower, so long as, at any time, the
aggregate outstanding amount of cash advanced to the Borrower
or such Subsidiary, as the case may be, and attributable to
the sale of such accounts receivable does not exceed
$300,000,000;
(iii) purchase money Liens upon or in any property
acquired or held by the Borrower or any Subsidiary in the
ordinary course of business to secure the purchase price of
such property or to
<PAGE> 57
secure Debt incurred solely for the purpose of financing the
acquisition of such property (provided that the amount of Debt
secured by such Lien does not exceed 100% of the purchase
price of such property and transaction costs relating to such
acquisition) and Liens existing on such property at the time
of its acquisition (other than any such Lien created in
contemplation of such acquisition); and the interest of the
lessor thereof in any property that is subject to a Capital
Lease;
(iv) any Lien securing Debt that was incurred prior
to or during construction or improvement of property for the
purpose of financing all or part of the cost of such
construction or improvement, provided that the amount of Debt
secured by such Lien does not exceed 100% of the fair market
value of such property after giving effect to such
construction or improvement;
(v) any Lien securing Debt of a Subsidiary owing to
the Borrower;
(vi) Liens resulting from any extension, renewal or
replacement (or successive extensions, renewals or
replacements), in whole or in part, of any Debt secured by any
Lien referred to in clauses (i), (iii) and (iv) above so long
as (x) the aggregate principal amount of such Debt shall not
increase as a result of such extension, renewal or replacement
and (y) Liens resulting from any such extension, renewal or
replacement shall cover only such property which secured the
Debt that is being extended, renewed or replaced; and
(vii) Liens other than Liens described in clauses (i)
through (vi) hereof, whether now existing or hereafter
arising, securing Debt in an aggregate amount not exceeding
$50,000,000.
(b) RESTRICTIONS ON FUNDAMENTAL CHANGES. The Borrower will
not, and will not permit any of its Material Subsidiaries to, merge or
consolidate with or into, or convey, transfer, lease or otherwise
dispose of (whether in one transaction or in a series of transactions)
all or a substantial portion of its assets (whether now owned or
hereafter acquired) to any Person, or enter into any partnership, joint
venture, syndicate, pool or other combination, unless no Event of
Default or Potential Event of Default has occurred and is continuing or
would result therefrom and, in the case of a merger or consolidation of
the Borrower, (i) the Borrower is the surviving entity or (ii) the
<PAGE> 58
surviving entity assumes all of the Borrower's obligations under this
Agreement in a manner satisfactory to the Requisite Lenders.
(c) PLAN TERMINATIONS. The Borrower will not, and will not
permit any ERISA Affiliate to, terminate any Pension Plan so as to
result in liability of the Borrower or any ERISA Affiliate to the PBGC
in excess of $15,000,000, or permit to exist any occurrence of an event
or condition which reasonably presents a material risk of a termination
by the PBGC of any Pension Plan with respect to which the Borrower or
any ERISA Affiliate would, in the event of such termination, incur
liability to the PBGC in excess of $15,000,000.
(d) MARGIN STOCK. The Borrower will not permit 25% or more of
the fair market value of the assets of (i) the Borrower or (ii) the
Borrower and its Subsidiaries to consist of Margin Stock.
(e) MINIMUM NET WORTH. The Borrower will not permit at any
time Net Worth to be less than the sum of (i) 80% of Net Worth as of
the Effective Date, plus (ii) 25% of Net Income (if a positive number)
from the Effective Date to the then most recent June 30 or December 31,
plus (iii) all Additions to Capital from the Effective Date to the then
most recent June 30 or December 31.
(f) MAXIMUM FUNDED DEBT RATIO. The Borrower will not permit at
any time the ratio of (i) Funded Debt to (ii) EBITDA, for each period
consisting of the most recently ended four consecutive fiscal quarters
of the Borrower, to exceed 3.00 to 1.00.
(g) SWAPS. The Borrower will not and will not permit any of
its Subsidiaries to create or suffer to exist any Lien, upon or with
respect to any of its properties, whether now owned or hereafter
acquired, or assign any right to receive income, in each case to secure
or provide for the payment of any Swaps.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable or the Borrower shall
fail to pay any interest on any Advance or any fees or other amounts
payable hereunder within five days of the date due; or
(b) Any representation or warranty made or deemed
<PAGE> 59
made by the Borrower herein or by the Borrower pursuant to this
Agreement (including any notice, certificate or other document
delivered hereunder) shall prove to have been incorrect in any material
respect when made; or
(c) The Borrower shall fail to perform or observe (i) any
term, covenant or agreement contained in this Agreement (other than any
term, covenant or agreement contained in Section 5.01(b)(iv), 5.01(c)
or 5.02) on its part to be performed or observed and the failure to
perform or observe such other term, covenant or agreement shall remain
unremedied for 30 days after the Borrower obtains knowledge of such
breach or (ii) any term, covenant or agreement contained in Section
5.02 and either of the Agents or the Requisite Lenders shall have
notified the Borrower that an Event of Default has occurred, or (iii)
any term, covenant or agreement contained in Section 5.01(b)(iv) or
5.01(c); or
(d) The Borrower or any of its Subsidiaries shall fail to pay
any principal of or premium or interest on any Debt which is
outstanding in a principal amount of at least $15,000,000 in the
aggregate (but excluding Debt arising under this Agreement) of the
Borrower or such Subsidiary (as the case may be), when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such Debt; or the Borrower or any of its
Subsidiaries shall fail to perform or observe any other agreement, term
or condition contained in any agreement or instrument relating to any
such Debt (or if any other event or condition of default under any such
agreement or instrument shall exist) and such failure, event or
condition shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such
failure, event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable as a result of such failure, event or
condition; or
(e) The Borrower or any of its Material Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against the Borrower or any of its Material
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief
of debtors, or
<PAGE> 60
seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for a
substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 60
days, or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official
for, it or for any substantial part of its property) shall occur; or
the Borrower or any of its Material Subsidiaries shall take any
corporate action to authorize any of the actions set forth above in
this subsection (e); or
(f) Any judgment or order for the payment of money in excess
of $25,000,000 shall be rendered against the Borrower or any of its
Material Subsidiaries and either (i) enforcement proceedings shall have
been commenced by any creditor upon a final or nonappealable judgment
or order or (ii) there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason
of a pending appeal or otherwise, shall not be in effect;
(g) (i) Any ERISA Event with respect to a Pension Plan shall
have occurred and, 30 days after notice thereof shall have
been given to the Borrower by either of the Agents, (x) such
ERISA Event shall still exist arid (y) the sum (determined as
of the date of occurrence of such ERISA Event) of the
Insufficiency of such Pension Plan and the Insufficiency of
any and all other Pension Plans with respect to which an ERISA
Event shall have occurred and then exist (or in the case of a
Pension Plan with respect to which an ERISA Event described in
clause (iii) through (vi) of the definition of ERISA Event
shall have occurred and then exist, the liability related
thereto) is equal to or greater than $25,000,000; or
(ii) The Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that it
has incurred an aggregate Withdrawal Liability for all years
to such Multiemployer Plan in an amount that, when aggregated
with all other amounts then required to be paid to
Multiemployer Plans by the Borrower and its ERISA Affiliates
as Withdrawal Liability (determined as of the date of such
notification), exceeds $25,000,000 and it is reasonably likely
that all amounts then required to be paid to Multiemployer
Plans by the Borrower and its ERISA Affiliates as Withdrawal
Liability will exceed $25,000,000; or
<PAGE> 61
(iii) The Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV or ERISA, and it is
reasonably likely that as a result of such reorganization or
termination the aggregate annual contributions of the Borrower
and its ERISA Affiliates to all Multiemployer Plans that are
then in reorganization or being terminated have been or will
be increased over the amounts contributed to such
Multiemployer Plans for the plan year of such Multiemployer
Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding
$25,000,000;
then, and in any such event, either of the Agents (i) shall at the
request, or may with the consent, of the Requisite Lenders, by notice
to the Borrower, declare the obligation of each Lender to make Advances
to be terminated, whereupon the same shall forthwith terminate, and
(ii) shall at the request, or may with the consent, of the Requisite
Lenders, by notice to the Borrower, declare the Advances, all interest
thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Advances, all such interest
and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided,
however, that in the event of an actual or deemed entry of an order for
relief with respect to the Borrower or any of its Subsidiaries under
the Bankruptcy Code, (A) the obligation of each Lender to make Advances
shall automatically be terminated and (B) the Advances, all such
interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENTS
SECTION 7.01. AUTHORIZATION AND ACTION. Each Lender hereby appoints and
authorizes CUSA to act as Administrative Agent under this Agreement and B of A
to act as Documentation Agent under this Agreement and authorizes each Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to each Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. As to any matters not expressly
provided for by the Loan Documents (including, without limitation, enforcement
or collection of the
<PAGE> 62
Advances and other amounts owing hereunder), no Agent shall be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Requisite Lenders, and such
instructions shall be binding upon all Lenders; provided, however, that no Agent
shall be required to take any action which exposes such Agent to personal
liability or which is contrary to any of the Loan Documents or applicable law.
Each Agent agrees to give to each Lender prompt notice of each notice given to
it by the Borrower pursuant to the terms of the Loan Documents.
SECTION 7.02. AGENTS' RELIANCE, ETC. Neither the Agents nor any of
their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them under or in connection
with any of the Loan Documents, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing, the
Agents: (i) may treat the payee of any Advance as the holder thereof until the
Administrative Agent receives and accepts an Assignment and Acceptance entered
into by the Lender which is the payee of such Advance, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 8.07; (ii) may consult
with legal counsel (including counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) make no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with any of the Loan Documents; (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of any of the Loan Documents on the part of the Borrower
or to inspect the property (including the books and records) of the Borrower;
(v) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any of the Loan
Documents or any other instrument or document furnished pursuant hereto; and
(vi) shall incur no liability under or in respect of any of the Loan Documents
by acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 7.03. CUSA, B OF A AND AFFILIATES. With respect to its
respective Commitment and the respective Advances made by it, CUSA and B of A
shall each have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not an Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include B of
A and CUSA
<PAGE> 63
respectively in its individual capacity. B of A or CUSA and their respective
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business (including without
limitation the investment banking business) with, the Borrower, any of its
subsidiaries and any Person who may do business with or own securities of the
Borrower or any such subsidiary, all as if B of A or CUSA, as the case may be
was not Agent and without any duty to account therefor to the Lenders.
SECTION 7.04. LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon either the Agents or any other
Lender and based on the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agents or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. INDEMNIFICATION. The Lenders (other than the Designated
Bidders) agree to indemnify each Agent (to the extent not reimbursed by the
Borrower), ratably according to the respective principal amounts of the
Committed Advances then held by each of them (or if no such Advances are at the
time outstanding or if any such Advances are held by Persons which are not
Lenders, ratably according to the respective amounts of their Commitments), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against such
Agent in any way relating to or arising out of any of the Loan Documents or any
action taken or omitted by such Agent under any of the Loan Documents, provided
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from any Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender (other than the Designated
Bidders) agrees to reimburse each Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including counsel fees) incurred by such
Agent in connection with the preparation, execution, delivery, administration,
syndication, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, the Loan Documents, to the extent that such
Agent is not reimbursed for such expenses by the Borrower.
SECTION 7.06. SUCCESSOR AGENT. Each Agent may resign at any time by
giving written notice thereof to the
<PAGE> 64
Lenders and the Borrower and may be removed at any time with or without cause by
the Requisite Lenders. Upon any such resignation or removal, the Requisite
Lenders shall have the right to appoint a successor Agent. If no successor Agent
shall have been so appointed by the Requisite Lenders, and shall have accepted
such appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Requisite Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent which
shall be a commercial bank organized under the laws of the United States of
America or of any State thereof or any Bank and, in each case having a combined
capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as an Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under the Loan Documents. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article VII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under the Loan Documents.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Requisite Lenders, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (a) waive any of the
conditions specified in Section 3.01, (b) increase the Commitments of the
Lenders or subject the Lenders to any additional obligations, (c) reduce the
principal of, or interest on, the Advances or any fees or other amounts payable
hereunder, (d) postpone any date fixed for any payment of principal of, or
interest on, the Advances or any fees or other amounts payable hereunder, (e)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Advances, or the number of Lenders, which shall be required for
the Lenders or any of them to take any action hereunder or (f) amend Section
2.15 or this Section 8.01; and provided, further, that no amendment, waiver or
consent shall, unless in writing and signed by an Agent in addition to the
Lenders required above to take such action, affect the rights or duties of such
Agent under this Agreement.
SECTION 8.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable
<PAGE> 65
communication) and mailed, telecopied, telegraphed, telexed, cabled or
delivered, if to the Borrower, at its address at Dial Tower, Phoenix, Arizona
850772343, Attn: Treasurer; if to any Bank, at its Domestic Lending Office
specified opposite its name on Schedule I hereto; if to any other Lender, at its
Domestic Lending Office specified in the Assignment and Acceptance pursuant to
which it became a Lender; if to the Administrative Agent at its address at
Citicorp USA, Inc., Loan Syndications Operations, 1 Court Square, 7th Floor Zone
1, Long Island City, New York 11120 (with a copy of notices, other than those
given pursuant to Sections 2.01 through 2.14 hereof, to Citicorp USA, Inc. c/o
Citicorp North America, Inc., One Sansome Street, San Francisco, California
94104, Attn: Rosanna Bartolazo) and if to the Documentation Agent at its address
at 1455 Market Street, San Francisco, California 94103, Agency Management
Services No. 5596; or, as to the Borrower or either Agent, at such other address
as shall be designated by such party in a written notice to the other parties
and, as to each other party, at such other address as shall be designated by
such party in a written notice to the Borrower and the Agents. All such notices
and communications shall, when personally delivered, mailed, telecopied,
telegraphed, telexed or cabled, be effective when personally delivered, after
five (5) days after being deposited in the mails, when confirmed by telecopy
response, when delivered to the telegraph company, when confirmed by telex
answerback or when delivered to the cable company, respectively, except that
notices and communications to any Agent pursuant to Article II or VII shall not
be effective until received by such Agent.
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part of any Lender
or either Agent to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 8.04. COSTS, EXPENSES AND INDEMNIFICATION.
(a) The Borrower agrees to pay promptly on demand all
reasonable costs and out-of-pocket expenses of the Agents in connection
with the preparation, execution, delivery, administration, syndication,
modification and amendment of this Agreement, and the other documents
to be delivered hereunder or thereunder, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel for the
Agents (including the allocated time charges of each Agent's legal
departments, as their respective internal counsel) with respect thereto
and with respect to advising the Agents as to their rights and
responsibilities under this Agreement. The Borrower further agrees to
pay promptly on demand all costs and expenses of the Agents and of each
Lender, if any (including, without limitation,
<PAGE> 66
reasonable counsel fees and out-of-pocket expenses), in connection with
the enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement and the other documents to be delivered
hereunder or thereunder, including, without limitation, reasonable
counsel fees and out-of-pocket expenses in connection with the
enforcement of rights under this Section 8.04(a). Such expenses shall
be reimbursed by the Borrower upon a presentation of statement of
account, regardless of whether the Closing Date, the Effective Date or
the Distribution occurs.
(b) If any payment of principal of any Eurodollar Rate Advance
is made other than on the last day of the interest period for such
Advance, as a result of a payment pursuant to Section 2.06 or
acceleration of the maturity of the Advances pursuant to Section 6.01
or for any other reason, the Borrower shall, upon demand by any Lender
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or
expenses which it may reasonably incur as a result of such payment,
including, without limitation, any loss, cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.
(c) The Borrower agrees to indemnify and hold harmless each
Agent, each Lender and each director, officer, employee, agent,
attorney and affiliate of each Agent and each Lender (each an
"indemnified person") in connection with any expenses, losses, claims,
damages or liabilities to which an Agent, a Lender or such indemnified
persons may become subject, insofar as such expenses, losses, claims,
damages or liabilities (or actions or other proceedings commenced or
threatened in respect thereof) arise out of the transactions referred
to in this Agreement or arise from any use or intended use of the
proceeds of the Advances, or in any way arise out of activities of the
Borrower that violate Environmental Laws, and to reimburse each Agent,
each Lender and each indemnified person, upon their demand, for any
reasonable legal or other out-of-pocket expenses incurred in connection
with investigating, defending or participating in any such loss, claim,
damage, liability, or action or other proceeding, whether commenced or
threatened (whether or not such Agent, such Lender or any such person
is a party to any action or proceeding out of which any such expense
arises). Notwithstanding the foregoing, the Borrower shall have no
obligation hereunder to an indemnified person with respect to
indemnified liabilities which have resulted from the gross negligence,
bad faith or willful misconduct of such
<PAGE> 67
indemnified person.
SECTION 8.05. RIGHT OF SET-OFF. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agents to
declare the Advances due and payable pursuant to the provisions of Section 6.01,
each Lender is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits (time
or demand, provisional or final, or general, but not special) at any time held
and other indebtedness at any time owing by such Lender to or for the credit or
the account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement that are then due and
payable, whether or not such Lender shall have made any demand under this
Agreement. Each Lender agrees promptly to notify the Borrower after any such
set-off and application made by such Lender; provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which such
Lender may have.
SECTION 8.06. BINDING EFFECT; EFFECTIVENESS, ENTIRE AGREEMENT.
(a) This Agreement shall be deemed to have been executed and
delivered when it shall have been executed by the Borrower and the
Agents and when the Agents shall have been notified by each Bank that
such Bank has executed it and thereafter shall be binding upon and
inure to the benefit of the Borrower, each Agent and each Lender and
their respective successors and permitted assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of all Lenders.
(b) This Agreement (except for the provisions of Section
2.04(d), Articles VII and VIII hereof and related definitions) shall
not become effective and the Existing Credit Agreement shall remain in
place until the time at which the conditions set forth in Section 3.02
have been satisfied or otherwise waived at the Effective Time, at which
time this Agreement shall become fully effective and replace the
Existing Credit Agreement, which shall be deemed to be completely
amended and restated hereby at such time. At such time this Agreement
(including the Schedules and Exhibits attached hereto) shall constitute
the entire agreement among the parties hereto with respect to the
subject matter hereof and supersede all prior agreements,
understandings and negotiations, both written and oral, among the
parties with respect to such subject matter, including, but not limited
to, the Existing Credit
<PAGE> 68
Agreement. If the Effective Date has not occurred by December 31, 1996,
then this Agreement shall terminate on such date and the Existing
Credit Agreement shall remain in place in accordance with its terms.
SECTION 8.07. ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Lender (other than the Designated Bidders) may assign
to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or
a portion of its Commitment and the Advances owing to it); provided,
however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all of the assigning Lender's rights and
obligations under this Agreement (other than any right to make Bid
Advances or Bid Advances held by it), (ii) after giving effect to any
such assignment, (1) the assigning Lender shall no longer have any
Commitment or (2) the amount of the Commitment of both the assigning
Lender and the Eligible Assignee party to such assignment (in each case
determined as of the date of the Assignment and Acceptance with respect
to such assignment) shall not be less than $10,000,000, (iii) each such
assignment shall be to an Eligible Assignee, (iv) the parties to each
such assignment shall execute and deliver to the Administrative Agent,
for its acceptance and recording in the Register, an Assignment and
Acceptance, and a processing and recordation fee of $3,000 to the
Administrative Agent, and (v) the Borrower and the Agents shall have
consented to such assignment, which consent shall not be unreasonably
withheld. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor
thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto). Any Lender may at any time pledge or assign all or any portion
of its rights hereunder to a Federal Reserve Bank; provided, that no
such pledge or assignment shall release such Lender from any of its
obligations hereunder.
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i)
<PAGE> 69
other than as provided in such Assignment and Acceptance, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with any of the Loan Documents
or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any of the Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower
or the performance or observance by the Borrower of any of its
obligations under any of the Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (iii) such assignee
confirms that it has received a copy of the Loan Documents, together
with copies of the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment
and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agents, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under the Loan Documents; (v) such assignee confirms that
it is an Eligible Assignee; (vi) such assignee appoints and authorizes
each Agent to take such action as agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to such Agent by
the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform
in accordance with their terms all of the obligations which by the
terms of the Loan Documents are required to be performed by it as a
Lender.
(c) Within five (5) days of its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee representing
that it is an Eligible Assignee (together with a processing and
recordation fee of $3,000 with respect thereto) and upon evidence of
consent of the Borrower and the Agents thereto, which consent shall not
be unreasonably withheld, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially
the form of EXHIBIT B hereto, (1) accept such Assignment and Acceptance
and (2) record the information contained therein in the Register. All
communications with the Borrower with respect to such consent of the
Borrower shall be sent pursuant to Section 8.02.
(d) Each Lender (other than the Designated
<PAGE> 70
Bidders) may designate one or more banks or other entities to have a
right to make Bid Advances as a Lender pursuant to Section 2.03;
provided, however, that (i) no such Lender shall be entitled to make
more than two such designations, (ii) each such Lender making one or
more of such designations shall retain the right to make Bid Advances
as a Lender pursuant to Section 2.03, (iii) each such designation shall
be to a Designated Bidder and (iv) the parties to each such designation
shall execute and deliver to the Agent, for its acceptance and
recording in the Register, a Designation Agreement. Upon such
execution, delivery, acceptance and recording, from and after the
effective date specified in each Designation Agreement, the designee
thereunder shall be a party hereto with a right to make Bid Advances as
a Lender pursuant to Section 2.03 and the obligations related thereto.
(e) By executing and delivering a Designation Agreement, the
Lender making the designation thereunder and its designee thereunder
confirm and agree with each other and the other parties hereto as
follows: (i) such Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such Lender makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such designee
confirms that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 4.01 and such
other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into the Designation
Agreement; (iv) such designee will, independently and without reliance
upon the Agent, such designating Lender or any other Lender and based
on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such designee confirms that it is a
Designated Bidder; (vi) such designee appoints and authorizes the Agent
to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and
(vii) such designee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement
are required to be performed by it as a Lender.
<PAGE> 71
(f) Upon its receipt of a Designation Agreement executed by a
designating Lender and a designee representing that it is a Designated
Bidder, the Agent shall, if such Designation Agreement has been
completed and is substantially in the form of EXHIBIT H hereto, (i)
accept such Designation Agreement, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof
to the Borrower.
(g) The Administrative Agent shall maintain at its address
referred to in Section 8.02 a copy of each Assignment and Acceptance
and each Designation Agreement delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders
and, with respect to Lenders other than Designated Bidders, the
Commitment of, the Commitment Termination Date of, and principal amount
of the Advances owing to, each such Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Agents and the Lenders may treat each Person whose name is recorded in
the Register as a Lender hereunder for all purposes of the Loan
Documents. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(h) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or
a portion of its Commitment and the Advances owing to it; provided,
however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such
Advance for all purposes of this Agreement, (iv) the Borrower, the
Agents and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under the Loan Documents, (v) no Lender shall grant any
participation under which the participant shall have rights to require
such Lender to take or omit to take any action hereunder or under the
other Loan Documents or approve any amendment to or waiver of this
Agreement or the other Loan Documents, except to the extent such
amendment or waiver would: (A) extend the Termination Date of such
Lender; or (B) reduce the interest rate or the amount of principal or
fees applicable to Advances or the
<PAGE> 72
Commitment in which such participant is participating or change the
date on which interest, principal or fees applicable to Advances or the
Commitment in which such participant is participating are payable, (vi)
such Lender shall notify the Borrower of the sale of the participation,
and (vii) the Person purchasing such participation shall agree to
customary provisions relating to the confidentiality of nonpublic
information received by such Person in connection with its purchase of
the participation.
(i) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 8.07, disclose to the assignee or participant or proposed
assignee or participant, any information relating to the Borrower
furnished to such Lender by or on behalf of the Borrower; provided
that, prior to any such disclosure, the assignee or Participant or
proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the
Borrower received by it from such Lender.
SECTION 8.08. CONFIDENTIALITY. Each Lender agrees, insofar as is
legally possible, to use its best efforts to keep in confidence all financial
data and other information relative to the affairs of the Borrower heretofore
furnished or which may hereafter be furnished to it pursuant to the provisions
of this Agreement; provided, however, that this Section 8.08 shall not be
applicable to information otherwise disseminated to the public by the Borrower;
and provided further that such obligation of each Bank shall be subject to each
Bank's (a) obligation to disclose such information pursuant to a request or
order under applicable laws and regulations or pursuant to a subpoena or other
legal process, (b) right to disclose any such information to bank examiners, its
affiliates (including, without limitation, in the case of B of A, BA Securities,
Inc. and in the case of CUSA, Citicorp Securities, Inc.), bank, auditors,
accountants and its counsel and other Banks, and (c) right to disclose any such
information, (i) in connection with the transactions set forth herein including
assignments and sales of participation interests pursuant to Section 8.07 hereof
or (ii) in or in connection with any litigation or dispute involving the Banks
and the Borrower or any transfer or other disposition by such Bank of any of its
Advances or other extensions of credit by such Bank to the Borrower or any of
its Subsidiaries, provided that information disclosed pursuant to this proviso
shall be so disclosed subject to such procedures as are reasonably calculated to
maintain the confidentiality thereof.
SECTION 8.09. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 8.10. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and
<PAGE> 73
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 8.11. CONSENT TO JURISDICTION, WAIVER OF IMMUNITIES. The
Borrower hereby irrevocably submits to the jurisdiction of any New York state or
Federal court sitting in New York, New York in any action or proceeding arising
out of or relating to this Agreement, and the Borrower hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such New York state or Federal court. The Borrower hereby
irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding. The
Borrower agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Section 8.11 shall affect
the right of any Lender or Agent to serve legal process in any other manner
permitted by law or affect the right of any Lender or Agent to bring any action
or proceeding against the Borrower or its property in the courts of any other
jurisdiction.
SECTION 8.12. WAIVER OF TRIAL BY JURY. THE BORROWER, THE BANKS, THE
AGENTS AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, OTHER LENDERS EACH HEREBY
AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. The Borrower, the Banks, the Agents and,
by its acceptance of the benefits hereof, other Lenders each (i) acknowledges
that this waiver is a material inducement for the Borrower, the Lenders and the
Agents to enter into a business relationship, that the Borrower, the Lenders and
the Agents have already relied on this waiver in entering into this Agreement or
accepting the benefits thereof, as the case may be, and that each will continue
to rely on this waiver in their related future dealings and (ii) further
warrants and represents that each has reviewed this waiver with its legal
counsel, and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
[Remainder of page intentionally left blank]
<PAGE> 74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers "hereunto duly authorized, as of the date
first above written.
THE DIAL CORP, a Delaware
corporation (to be known as VIAD
CORP upon the on and after the
Effective Date)
By: /s/ Ronald G. Nelson
Vice President-Finance
and Treasurer
CITICORP USA, INC., as
Administrative Agent
By: /s/ Marjorie Futornick
Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Documentation Agent
By: /s/ Robert Troutman
Managing Director
<PAGE> 75
COMMITMENT LENDER
$42,500,000 CITICORP USA, INC.
By: /s/ Marjorie Futornick
Vice President
$42,500,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Robert Troutman
Managing Director
$30,000,000 BANK OF MONTREAL
By: /s/ Michael Joyce
Managing Director
$30,000,000 THE CHASE MANHATTAN BANK, N.A.
By: /s/ Ted Swimmer
Vice President
$30,000,000 CIBC INC.
By: /s/ Robert J. Wagner
Managing Director
$30,000,000 NATIONSBANK OF TEXAS, N.A.
By: /s/ Gloria M. Holland
Vice President
$30,000,000 ROYAL BANK OF CANADA
By: /s/ Tom J. Oberaigner
Manager
$25,000,000 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: /s/ Diana Imhoff
Vice President
$25,000,000 NBD BANK
By: /s/ James B. Junker
Authorized Agent
$20,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY
By: /s/ T. Akiyama
Joint General Manager
$20,000,000 WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH
By: /s/ Karen E. Hoplock
Vice President
By: /s/ Thomas Lee
Associate
<PAGE> 76
$15,000,000 THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., LOS ANGELES AGENCY
By: /s/ T. Morgan Edwards
Deputy General Manager
$15,000,000 MELLON BANK, N.A.
By: /s/ L.C. Ivey
Vice President
$15,000,000 THE NORTHERN TRUST COMPANY
By: /s/ Martin G. Alston
Vice President
$15,000,000 UNION BANK OF CALIFORNIA
By: /s/ Cary Moore
Vice President
$15,000,000 WELLS FARGO BANK OF ARIZONA,
NATIONAL ASSOCIATION
By: /s/ Kevin Halloran
Vice President
<PAGE> 77
SCHEDULE I
LIST OF APPLICABLE LENDING OFFICES
<TABLE>
<CAPTION>
DOMESTIC LENDING EURODOLLAR LENDING
NAME OF BANK OFFICE OFFICE
<S> <C> <C> <C> <C>
CITIBANK, N. A. Central Corporate Central Corporate Customer Services Customer Services
One Court Square One Court Square
7th Floor 7th Floor
Long Island City, NY Long Island City, NY 11120 11120
Attn: Aureli Almonte Attn: Aureli Almonte
Bank Loan Syndication Bank Loan Syndication
</TABLE>
BANK OF AMERICA 1850 Gateway Blvd. 1850 Gateway Blvd.
NATIONAL TRUST AND Concord, CA 94520 Concord, CA 94520
SAVINGS ASSOCIATION Attn: Barbara Garibaldi Attn: Barbara
Garibaldi
BANK OF MONTREAL 115 South LaSalle 115 South LaSalle
12th Floor 12th Floor
Chicago, IL 60603 Chicago, IL 60603
Attn: Betty Rutherford Attn: Betty Rutherford
CIBC, INC. 2727 Paces Ferry Road 2727 Paces Ferry Road
2 Paces West 2 Paces West
Suite 1200 Suite 1200
Atlanta, Georgia 30339 Atlanta, Georgia 30339
Attn: Ann Milam Attn: Ann Milam
THE CHASE 140 East 45th Street 140 East 45th Street
MANHATTAN BANK, 29th Floor 29th Floor
N.A. New York, New York 10017 New York, New York 10017
Attn: Miranda Chin Attn: Miranda Chin
NATIONSBANK OF c/o NationsBank c/o NationsBank
TEXAS, N.A. 901 Main Street 901 Main Street
14th Floor 14th Floor
Dallas, TX 75202 Dallas, TX 75202
Attn: Stacey Smith Attn: Stacey Smith
ROYAL BANK OF 1 Financial Square 1 Financial Square
CANADA 23rd Floor 23rd Floor
New York, NY 10005 New York, NY 10005
Attn: Linda Smith Attn: Linda Smith
WELLS FARGO BANK Arizona RCBO 4101-251 Arizona RCBO 4101-251
OF ARIZONA, P.O. Box 53456 P.O. Box 53456
NATIONAL Phoenix, AZ 85072-3456 Phoenix, AZ 85072-3456
ASSOCIATION Attn: Kevin Halloran Attn: Kevin Halloran
Street Address: Street Address:
100 West Washington 100 West Washington
Phoenix, AZ 85072-3456 Phoenix, AZ 85072-3456
THE INDUSTRIAL 350 S. Grand Ave. 350 S. Grand Ave.
BANK OF JAPAN, Suite 1500 Suite 1500
LIMITED, LOS Los Angeles, CA 90071 Los Angeles, CA 90071
ANGELES AGENCY Attn: Lynn Santos Attn: Lynn Santos
THE LONG-TERM 350 S. Grand Ave. 350 S. Grand Ave.
CREDIT BANK OF Suite 3000 Suite 3000
JAPAN, LTD., Los Angeles, CA 90071 Los Angeles, CA 90071
LOS ANGELES AGENCY Attn: Cindy Ly Attn: Cindy Ly
MELLON BANK, N.A. Three Mellon Bank Center Three Mellon Bank Center
Room 2303 Room 2303
Pittsburgh, PA 15259 Pittsburgh, PA 15259
Attn: Damon Carr Attn: Damon Carr
<PAGE> 78
NBD BANK 611 Woodward Avenue 611 Woodward Avenue
Detroit, MI 48226 Detroit, MI 48226
Attn: Chris Dickens Attn: Chris Dickens
MORGAN GUARANTY c/o J.P. Morgan Nassau, Bahamas Office
TRUST COMPANY OF Services, Inc. c/o J.P. Morgan Services,
NEW YORK 500 Stanton - Inc.
Christiana Road Loan Operations - 3rd Flr
Newark, Delaware 19713 500 Stanton - Christiana Road
Attn: Lisa Lynch Newark, Delaware 19713
Attn: Lisa Lynch
THE NORTHERN 50 S. La Salle 50 S. La Salle
TRUST COMPANY B-12 B-12
Chicago, IL 60675 Chicago, IL 60675
Attn: Linda Honda Attn: Linda Honda
UNION BANK OF 550 S. Hope Street 550 S. Hope Street
CALIFORNIA 3rd Floor 3rd Floor
Los Angeles, CA 90071 Los Angeles, CA 90071
Attn: Hisako Sakamoto Attn: Hisako Sakamoto
WESTDEUTSCHE 1211 Avenue of the 1211 Avenue of the
LANDESBANK Americas Americas
GIROZENTRALE, New York, NY 10036 New York, NY
10036
NEW YORK BRANCH Attn: Cheryl Wilson Attn: Cheryl Wilson
<PAGE> 79
EXHIBIT A-1
[FORM OF NOTICE OF COMMITTED BORROWING]
NOTICE OF COMMITTED BORROWING
Citicorp USA, Inc., as Administrative
Agent for the Lenders party
to the Credit Agreement
referred to below
c/o Citicorp Bank Loan
Syndications Operations
One Court Square
Long Island City, New York 11120
[Date]
Attention: [ ]
Gentlemen:
The undersigned, [The Dial Corp][Viad Corp] (the "Borrower"), refers to
that certain Amended and Restated Credit Agreement dated as of July 24, 1996 (as
it may be amended, supplemented, restated or otherwise modified from time to
time, the "Credit Agreement", the terms defined therein being used herein as
therein defined), by and among the Borrower, certain Lenders party thereto,
Citicorp USA, Inc., as Administrative Agent for said Lenders, and Bank of
America National Trust and Savings Association, as Documentation Agent for said
Lenders. The Borrower hereby gives you notice, irrevocably, pursuant to Section
2.02 of the Credit Agreement, that the Borrower hereby requests a Borrowing
under the Credit Agreement, and in that connection sets forth below the
information relating to such Borrowing (the "Proposed Committed Borrowing") as
required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Committed Borrowing is
[ ], 19[ ].
(ii) The Type of Committed Advances comprising the Proposed
Committed Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Committed Borrowing
is $[ ].
(iv) If the Type of Advances comprising the Proposed Committed
Borrowing is Eurodollar Rate Advances, the Interest Period for each
Advance made as part of the Proposed Committed Borrowing is [ ]
month[s].
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Committed
Borrowing:
(A) the representations and warranties contained in Section
4.01 of the Credit Agreement are correct, before and after giving
effect to the Proposed Committed Borrowing and to the application of
the proceeds therefrom, as though made on and as of such date, except
to the extent that any such representation or warranty expressly
relates only to an earlier date, in which case they were correct as of
such earlier date; and
(B) no event has occurred and is continuing, or will result
from such Proposed Committed Borrowing or from the application of the
proceeds therefrom, which constitutes an Event of Default or a
Potential Event of Default.
Very truly yours,
[THE DIAL CORP] [VIAD CORP]
By:
Title:
<PAGE> 80
EXHIBIT A-2
[FORM OF NOTICE OF BID BORROWING]
NOTICE OF BID BORROWING
Citicorp USA, Inc.,
as Administrative Agent
for the Lenders party to
the Credit Agreement referred
to below
c/o Citicorp Bank Loan
Syndications Operations
One Court Square
Long Island City, New York 11120
[Date]
Attention: [ ]
Gentlemen:
The undersigned, [The Dial Corp][Viad Corp] (the "Borrower"), refers to
that certain Amended and Restated Credit Agreement dated as of July 24, 1996 (as
it may be amended, supplemented, restated or otherwise modified from time to
time, the "Credit Agreement", the terms defined therein being used herein as
therein defined), by and among the Borrower, certain Lenders party thereto,
Citicorp USA, Inc., as Administrative Agent for said Lenders, and Bank of
America National Trust and Savings Association, as Documentation Agent for said
Lenders. The Borrower hereby gives you notice pursuant to Section 2.03(a) of the
Credit Agreement that the undersigned hereby requests a Bid Borrowing under the
Credit Agreement, and in that connection sets forth below the terms on which
such Bid Borrowing (the "Proposed Bid Borrowing") is requested to be made:
(A) Date of Proposed Bid Borrowing:
(B) Aggregate Amount of Proposed Bid Borrowing:
(C) Maturity Date:
(D) Currency if the Proposed Bid Borrowing is comprised of
Eurodollar Advances:
(E) Interest Payment Date(s):
(F) Other Terms
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Bid Borrowing:
(A) the representations and warranties contained in Section
4.01 of the Credit Agreement are correct, before and after giving
effect to the Proposed Bid Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date, except to
the extent that any such representation or warranty expressly relates
only to an earlier date, in which case they were correct as of such
earlier date; and
(B) no event has occurred and is continuing, or will result
from such Proposed Bid Borrowing or from the application of the
proceeds therefrom, which constitutes an Event of Default or a
Potential Event of Default.
The undersigned hereby confirms that the Proposed Bid Borrowing is to
be made available to it in accordance with Section 2.03 of the Credit Agreement.
Very truly yours,
[THE DIAL CORP] [VIAD CORP]
By:
Title:
<PAGE> 81
EXHIBIT B
[FORM OF ASSIGNMENT AND ACCEPTANCE]
ASSIGNMENT AND ACCEPTANCE
Dated [ ], 19[ ]
Reference is made to that certain Amended and Restated Credit Agreement
dated as of July 24, 1996 (as it may be amended, supplemented, restated or
otherwise modified from time to time, the "Credit Agreement") among [The Dial
Corp][Viad Corp] (the "Borrower"), the Lenders (as defined in the Credit
Agreement), Citicorp USA, Inc., as Administrative Agent for the Lenders, and
Bank of America National Trust and Savings Association, as Documentation Agent
for the Lenders. Terms defined in the Credit Agreement and not defined herein
are used herein with the same meaning.
[ ] (the "Assignor") and [ ] (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns without recourse to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, that
interest in and to all of the Assignor's rights and obligations under the Credit
Agreement as of the Effective Date which represents the percentage interest
specified on Schedule 1 of all outstanding rights and obligations under the
Credit Agreement, including, without limitation, such interest in the Assignor's
Commitment and the Advances owing to the Assignor. After giving effect to such
sale and assignment, the Assignee's Commitment, the amount of the Advances owing
to the Assignee, and the Commitment Termination Date of the Assignee will be as
set forth in Section 2 of Schedule 1. In consideration of Assignor's assignment,
Assignee hereby agrees to pay to Assignor, on the Effective Date, the amount of
$[ ] in immediately available funds by wire transfer to Assignor's office at
[ ].
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agents, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement as are delegated to such Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(v) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; and (vi) specifies as its Domestic Lending Office
(and address for notices) and Eurodollar Lending Office the offices set forth
beneath its name on the signature pages hereof [and (vii) attaches the forms
prescribed by the Internal Revenue Service of the United States certifying as to
the Assignee's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Credit Agreement or such other documents as are necessary to indicate that
all such payments are subject to such rates at a rate reduced by an applicable
tax treaty].*
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date of this
Assignment and Acceptance shall be the date of acceptance thereof by the
Administrative Agent, unless otherwise specified on Schedule 1 hereto (the
"Effective Date").
5. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
- --------------
*If the Assignee is organized under the laws of a jurisdiction outside
the United States.
<PAGE> 82
6. Upon such acceptance and recording by the Administrative Agent, from
and after the Effective Date, the Administrative Agent shall make all payments
under the Credit Agreement in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and fees
with respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for periods prior
to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers "hereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
<PAGE> 83
Schedule 1
to
Assignment and Acceptance
Dated [ ], 19[ ]
Section 1.
Percentage Interest: [ ]%
Section 2.
Assignee's Commitment: $[ ]
Aggregate Outstanding Principal
Amount of Advances owing to
the Assignee: $[ ]
Advances payable to the Assignee
Principal amount: [ ]
Advances payable to the Assignor
Principal amount: [ ]
Assignee's Commitment Termination
Date: [ ], 199[ ]
Section 3.
Effective Date*: [ ], 199[ ]
[NAME OF ASSIGNOR]
By:
Title:
[NAME OF ASSIGNEE]
By:
Title:
- ------------------
* This date should be no earlier than the date of acceptance by the
Administrative Agent.
<PAGE> 84
Domestic Lending Office
(and address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this [ ] day
of [ ], 199[ ]
CITICORP USA, INC., as
Administrative Agent
By:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Documentation Agent
By:
Title:
[THE DIAL CORP] [VIAD CORP]
By:
Title:
<PAGE> 85
EXHIBIT C-l
[FORM OF OPINION OF COUNSEL TO BORROWER
AS OF THE CLOSING DATE]
[CLOSING DATE]
Citicorp USA, Inc.,
as Administrative Agent
1 Court Square
Long Island City, New York 11120
Bank of America National Trust
and Savings Association,
as Documentation Agent
1455 Market Street
San Francisco, California 94103
and
The Banks (the "Banks") Listed on
Schedule I Party to the Credit
Agreement Referred to Below
Re: Amended and Restated Credit Agreement dated as of July 24, 1996, among
The Dial Corp, the Banks named therein, Citicorp USA, Inc. as
Administrative Agent, and Bank of America National Trust and Savings
Association, as Documentation Agent
Ladies and Gentlemen:
I am Vice President and General Counsel of The Dial Corp, a Delaware
corporation (the "Borrower"), and as such have acted as counsel to the Borrower
in connection with the negotiation, execution and delivery by the Borrower of
the Amended and Restated Credit Agreement dated as of July 24, 1996 (the "Credit
Agreement") among the Borrower, the Banks, Citicorp USA, Inc. as Administrative
Agent, and Bank of America National Trust and Savings Association as
Documentation Agent. Terms defined in the Credit Agreement and not otherwise
defined herein are used herein as therein defined.
This opinion is delivered to you pursuant to Section 3.01(a)(vi) of the
Credit Agreement. I have examined the Credit Agreement and I have examined or am
familiar with originals or copies, the authenticity of which has been
established to my satisfaction of such other documents, corporate records,
agreements and instruments, and certificates of public officials and of officers
of the Borrower as I have deemed necessary or appropriate to enable me to
express the opinions set forth below. As to questions of fact material to such
opinions, I have, when relevant facts were not independently established, relied
upon certification by officers of the Borrower, which I believe to be reliable.
The opinions hereinafter expressed are subject to the fact that I am a
member of the State Bar of Arizona and do not hold myself out as an expert on
the laws of other states or jurisdictions except (i) the federal law of the
United States of America, (ii) the General Corporation Law of the State of
Delaware, and (iii) the laws of New York relevant to the opinions herein
expressed.
Based upon the foregoing and having regard to legal considerations
which I have deemed relevant, it is my opinion that:
1. The Borrower is a corporation validly existing and in good standing
under the laws of the State of Delaware and is duly qualified to do business as
a foreign corporation in good standing in all other jurisdictions which require
such qualification, except to the extent that failure to so qualify would not
have a material adverse effect on the Borrower. The Borrower has all requisite
corporate power and authority to own and operate its properties, to conduct its
business as presently conducted, and to execute, deliver and perform its
obligations under the Credit Agreement.
2. The Credit Agreement has been duly authorized by all necessary
corporate action on the part of the Borrower and has been duly executed and
delivered by the Borrower. The Credit Agreement constitutes the legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency and reorganization laws and other similar laws governing
the enforcement of lessors' or creditors' rights and by the effects of specific
performance, injunctive relief and other equitable remedies.
<PAGE> 86
3. Neither the execution and delivery by the Borrower of the Credit
Agreement, nor consummation of the transactions contemplated thereby, nor
compliance on or prior to the date hereof with the terms and conditions thereof
by the Borrower conflicts with or is a violation of, its certificate of
incorporation or bylaws, each as in effect on the date hereof. Neither the
execution and delivery by the Borrower of the Credit Agreement, nor the
consummation of the transactions contemplated thereby, nor compliance on or
prior to the date hereof with the terms and conditions thereof by the Borrower
will result in a violation of any applicable federal or New York law,
governmental rule or regulation or of the Corporation Law of the State of
Delaware or conflicts with, will result in a breach of, or constitutes a default
under, any provision of any indenture, agreement or other instrument to which
the Borrower is a party or any of its properties may be bound ("Material
Agreements"), or any order, judgment or decree to which the Borrower or any of
its assets are bound ("Judicial Orders"), or will result in the creation or
imposition of any lien upon any property or assets of the Borrower pursuant to
any Material Agreement or Judicial Order.
4. Neither the making of the Advances pursuant to, nor application of
the proceeds thereof in accordance with, the Credit Agreement, will violate
Regulations G, T, U or X promulgated by the Board of Governors of the Federal
Reserve System.
5. No consent, approval or authorization of, and no registration,
declaration or filing with, any administrative, governmental or other public
authority of the United States of America or the State of New York or under the
Corporation Law of the State of Delaware is required by law to be obtained or
made by the Borrower for the execution, delivery and performance by the Borrower
of the Credit Agreement, except such filings as may be required in the ordinary
course to keep in full force and effect rights and franchises material to the
business of the Borrower and in connection with the payment of taxes.
6. The Borrower is not an "investment company" or a Person directly or
indirectly "controlled" by or "acting on behalf of an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
This opinion is delivered to the Agents and the Banks as of the date
hereof in connection with the Credit Agreement, and may not be relied upon by
any person other than the Agents and the Banks and their permitted assignees, or
by them in any other context, and may not be furnished to any other person or
entity without my prior written consent, provided that each Bank and its
permitted assignees may provide this opinion (i) to bank examiners and other
regulatory authorities should they so request or in connection with their normal
examination, (ii) to the independent auditors and attorneys of such Bank, (iii)
pursuant to order or legal process of any court or governmental agency, (iv) in
connection with any legal action to which the Bank is a party arising out of the
transactions contemplated by the Credit Agreement, or (v) in connection with the
assignment of or sale of participations in the Advances.
Very truly yours,
<PAGE> 87
EXHIBIT C-2
[FORM OF OPINION OF COUNSEL TO BORROWER
AS OF THE EFFECTIVE DATE]
[EFFECTIVE DATE]
Citicorp USA, Inc.,
as Administrative Agent
1 Court Square
Long Island City, New York 11120
Bank of America National
Trust and Savings Association,
as Documentation Agent
1455 Market Street
San Francisco, California 94103
and
The Banks (the "Banks") Listed on
Schedule I Party to the Credit
Agreement Referred to Below
Re: Amended and Restated Credit Agreement dated as of July 24, 1996, among
The Dial Corp, the Banks named therein, Citicorp USA, Inc. as
Administrative Agent, and Bank of America National Trust and Savings
Association as Documentation Agent
Ladies and Gentlemen:
I am Vice President and General Counsel of The Dial Corp, a Delaware
corporation (the "Borrower"), and as such have acted as counsel to the Borrower
in connection with the negotiation, execution and delivery by the Borrower of
the Amended and Restated Credit Agreement dated as of July 24, 1996 (the "Credit
Agreement") among the Borrower, the Banks, Citicorp USA, Inc. as Administrative
Agent, and Bank of America National Trust and Savings Association as
Documentation Agent. Terms defined in the Credit Agreement and not otherwise
defined herein are used herein as therein defined.
This opinion is delivered to you pursuant to Section 3.02(a)(ii) of the
Credit Agreement. I have examined the Credit Agreement and I have examined or am
familiar with originals or copies, the authenticity of which has been
established to my satisfaction of such other documents corporate records,
agreements and instruments, and certificates of public officials and of officers
of the Borrower as I have deemed necessary or appropriate to enable me to
express the opinions set forth below. As to questions of fact material to such
opinions, I have, when relevant facts were not independently established, relied
upon certification by officers of the Borrower, which I believe to be reliable.
The opinions hereinafter expressed are subject to the fact that I am a
member of the State Bar of Arizona and do not hold myself out as an expert on
the laws of other states or jurisdictions except (i) the federal law of the
United States of America, (ii) the General Corporation Law of the State of
Delaware, and (iii) the laws of New York relevant to the opinions herein
expressed.
Based upon the foregoing and having regard to legal considerations
which I have deemed relevant, it is my opinion that:
1. The Borrower is a corporation validly existing and in good standing
under the laws of the State of Delaware and is duly qualified to do business as
a foreign corporation in good standing in all other jurisdictions which require
such qualification, except to the extent that failure to so qualify would not
have a material adverse effect on the Borrower. The Borrower has all requisite
corporate power and authority to own and operate its properties, to conduct its
business as presently conducted, and to execute, deliver and perform its
obligations under the Credit Agreement.
2. The Credit Agreement has been duly authorized by all necessary
corporate action on the part of the Borrower and has been duly executed and
delivered by the Borrower. The Credit Agreement constitutes the legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency and reorganization laws and other similar laws governing
the enforcement of lessors' or creditors' rights and by the effects of specific
performance, injunctive relief and other equitable remedies.
<PAGE> 88
3. Neither the execution and delivery by the Borrower of the Credit
Agreement, nor consummation of the transactions contemplated thereby, nor
compliance on or prior to the date hereof with the terms and conditions thereof
by the Borrower conflicts with or is a violation of, its certificate of
incorporation or bylaws, each as in effect on the date hereof. Neither the
execution and delivery by the Borrower of the Credit Agreement, nor the
consummation of the transactions contemplated thereby, nor compliance on or
prior to the date hereof with the terms and conditions thereof by the Borrower
will result in a violation of any applicable federal or New York law,
governmental rule or regulation or of the Corporation Law of the State of
Delaware or conflicts with, will result in a breach of, or constitutes a default
under, any provision of any indenture, agreement or other instrument to which
the Borrower is a party or any of its properties may be bound ("Material
Agreements"), or any order, judgment or decree to which the Borrower or any of
its assets are bound ("Judicial Orders"), or will result in the creation or
imposition of any lien upon any property or assets of the Borrower pursuant to
any Material Agreement or Judicial Order.
4. Neither the making of the Advances pursuant to, nor application of
the proceeds thereof in accordance with, the Credit Agreement, will violate
Regulations G, T, U or X promulgated by the Board of Governors of the Federal
Reserve System.
5. No consent, approval or authorization of, and no registration,
declaration or filing with, any administrative, governmental or other public
authority of the United States of America or the State of New York or under the
Corporation Law of the State of Delaware is required by law to be obtained or
made by the Borrower for the execution, delivery and performance by the Borrower
of the Credit Agreement, except such filings as may be required in the ordinary
course to keep in full force and effect rights and franchises material to the
business of the Borrower and in connection with the payment of taxes.
6. The Borrower is not an "investment company" or a Person directly or
indirectly "controlled" by or "acting on behalf of an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
This opinion is delivered to the Agents and the Banks as of the date
hereof in connection with the Credit Agreement, and may not be relied upon by
any person other than the Agents and the Banks and their permitted assignees, or
by them in any other context, and may not be furnished to any other person or
entity without my prior written consent, provided that each Bank and its
permitted assignees may provide this opinion (i) to bank examiners and other
regulatory authorities should they so request or in connection with their normal
examination, (ii) to the independent auditors and attorneys of such Bank, (iii)
pursuant to order or legal process of any court or governmental agency, (iv) in
connection with any legal action to which the Bank is a party arising out of the
transactions contemplated by the Credit Agreement, or (v) in connection with the
assignment of or sale of participations in the Advances.
Very truly yours,
<PAGE> 89
EXHIBIT D-1
[FORM OF OPINION OF O'MELVENY & MYERS
AS OF THE CLOSING DATE]
[CLOSING DATE]
Citicorp USA, Inc., as
Administrative Agent
1 Court Square
Long Island City, New York 11120
Bank of America National Trust
and Savings Association, as
Documentation Agent
1455 Market Street
San Francisco, California 94103
and
The Banks Party to the Credit Agreement
Referred to Below
Re: Amended and Restated Credit Agreement dated as of July 24, 1996 among
The Dial Corp, the Banks named therein, Citicorp USA, Inc., as
Administrative Agent, and Bank of America National Trust and Savings
Association, as Documentation Agent
Gentlemen:
We have participated in the preparation of the Amended and Restated
Credit Agreement dated as of July 24, 1996 (the "Credit Agreement"; capitalized
terms defined therein and not otherwise defined herein are used herein as
therein defined) among The Dial Corp (the "Borrower"), the Banks named therein
(the "Banks"), Citicorp USA, Inc., as Administrative Agent, and Bank of America
National Trust and Savings Association, as Documentation Agent (Documentation
Agent and Administrative Agent, collectively, are hereinafter referred to as
"Agents"), and have acted as special counsel for the Agents for the purpose of
rendering this opinion pursuant to Section 3.01(a)(vii) of the Credit Agreement.
We have participated in various conferences and telephone conferences
with representatives of the Borrower and the Agents and conferences and
telephone calls with counsel to the Borrower, and with your representatives,
during which the Credit Agreement and related matters have been discussed, and
we have also participated in the meeting held on the date hereof (the "Closing")
incident to the effectiveness of the Credit Agreement. We have reviewed the
forms of the Credit Agreement and the exhibits thereto, and the opinion of [L.
Gene Lemon], General Counsel of the Borrower (the "Opinion"), and officers'
certificates and other documents delivered at the Closing. We have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals or copies, the due authority of all persons executing the same, and
we have relied as to factual matters on the documents which we have reviewed.
On the basis of such examination, our reliance upon the assumptions
contained herein and our consideration of those questions of law we considered
relevant and subject to the limitations and qualifications in this opinion, we
are of the opinion that:
1. The Credit Agreement constitutes the legally valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights generally
(including, without limitation, fraudulent conveyance laws) and by general
principles of equity including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief, regardless of whether considered in a
proceeding in equity or at law. In giving the foregoing opinion, we have
assumed, without independent investigation, that the Credit Agreement has been
duly authorized by all necessary corporate action on the part of the Borrower
and has been duly executed and delivered by the Borrower.
2. The Opinion is satisfactory in form to us and, in our opinion, you
are justified in relying thereon.
Our opinions in paragraph 1 above as to the enforceability of the
Credit Agreement are subject to:
(a) public policy considerations, statutes or court decisions
that may limit the rights of a party to obtain indemnification against
its own gross negligence, willful misconduct or unlawful conduct; and
(b) the unenforceability under certain circumstances of
waivers of rights granted by law where the waivers are against public
policy or prohibited by law.
We express no opinion as to the effect of non-compliance by you with
any state or federal laws or regulations applicable to the transactions
contemplated by the Credit Agreement because of the nature of your business.
The law covered by this opinion is limited to the present federal law
of the United States and the present law of the State of New York. We express no
opinion as to the laws of any other jurisdiction. This opinion is furnished by
us as special counsel for the Agents and may be relied upon by you only in
connection with the Credit Agreement. It may not be used or relied upon by you
for any other purpose or by any other person, nor may copies be delivered to any
other person, without in each instance our prior written consent. You may,
however, deliver a copy of this opinion to permitted assignees of all or a
portion of a Lender's rights and obligations under the Credit Agreement in
connection with such assignment, and such assignees may rely on this opinion as
if it were addressed and had been delivered to them on the date of this opinion.
This opinion may also be disclosed to regulatory and other governmental
authorities having jurisdiction over you requesting (or requiring) such
disclosure.
Respectfully submitted,
<PAGE> 90
EXHIBIT D-2
[FORM OF OPINION OF O'MELVENY & MYERS
AS OF THE EFFECTIVE DATE]
[EFFECTIVE DATE]
Citicorp USA, Inc., as
Administrative Agent
1 Court Square
Long Island City, New York 11120
Bank of America National Trust
and Savings Association, as
Documentation Agent
1455 Market Street
San Francisco, California 94103
and
The Banks Party to the Credit Agreement
Referred to Below
Re: Amended and Restated Credit Agreement dated as of July 24, 1996 among
The Dial Corp, the Banks named therein, Citicorp USA, Inc., as
Administrative Agent, and Bank of America National Trust and Savings
Association as Documentation Agent
Gentlemen:
We have participated in the preparation of the Amended and Restated
Credit Agreement dated as of July 24, 1996 (the "Credit Agreement"; capitalized
terms defined therein and not otherwise defined herein are used herein as
therein defined) among The Dial Corp (the "Borrower"), the Banks named therein
(the "Banks"), Citicorp USA, Inc., as Administrative Agent, and Bank of America
National Trust and Savings Association, as Documentation Agent (Documentation
Agent and Administrative Agent, collectively, are hereinafter referred to as
"Agents"), and have acted as special counsel for the Agents for the purpose of
rendering this opinion pursuant to Section 3.01(a)(vii) of the Credit Agreement.
We have participated in various conferences and telephone conferences
with representatives of the Borrower and the Agents and conferences and
telephone calls with counsel to the Borrower, and with your representatives,
during which the Credit Agreement and related matters have been discussed, and
we have also participated in the meeting held on the date hereof (the "Closing")
incident to the effectiveness of the Credit Agreement. We have reviewed the
forms of the Credit Agreement and the exhibits thereto, and the opinion of [L.
Gene Lemon], General Counsel of the Borrower (the "Opinion"), and officers'
certificates and other documents delivered at the Closing. We have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals or copies, the due authority of all persons executing the same, and
we have relied as to factual matters on the documents which we have reviewed.
<PAGE> 91
On the basis of such examination, our reliance upon the assumptions
contained herein and our consideration of those questions of law we considered
relevant and subject to the limitations and qualifications in this opinion, we
are of the opinion that:
1. The Credit Agreement constitutes the legally valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights generally
(including, without limitation, fraudulent conveyance laws) and by general
principles of equity including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief, regardless of whether considered in a
proceeding in equity or at law. In giving the foregoing opinion, we have
assumed, without independent investigation, that the Credit Agreement has been
duly authorized by all necessary corporate action on the part of the Borrower
and has been duly executed and delivered by the Borrower.
2. The Opinion is satisfactory in form to us and, in our opinion, you
are justified in relying thereon.
Our opinions in paragraph 1 above as to the enforceability of the
Credit Agreement are subject to:
(a) public policy considerations, statutes or court decisions
that may limit the rights of a party to obtain indemnification against
its own gross negligence, willful misconduct or unlawful conduct; and
(b) the unenforceability under certain circumstances of
waivers of rights granted by law where the waivers are against public
policy or prohibited by law.
We express no opinion as to the effect of non-compliance by you with
any state or federal laws or regulations applicable to the transactions
contemplated by the Credit Agreement because of the nature of your business.
The law covered by this opinion is limited to the present federal law
of the United States and the present law of the State of New York. We express no
opinion as to the laws of any other jurisdiction.
This opinion is furnished by us as special counsel for the Agents and
may be relied upon by you only in connection with the Credit Agreement. It may
not be used or relied upon by you for any other purpose or by any other person,
nor may copies be delivered to any other person, without in each instance our
prior written consent. You may, however, deliver a copy of this opinion to
permitted assignees of all or a portion of a Lender's rights and obligations
under the Credit Agreement in connection with such assignment, and such
assignees may rely on this opinion as if it were addressed and had been
delivered to them on the date of this opinion. This opinion may also be
disclosed to regulatory and other governmental authorities having jurisdiction
over you requesting (or requiring) such disclosure.
Respectfully submitted,
<PAGE> 92
EXHIBIT E
[FORM OF EXTENSION REQUEST]
[THE DIAL CORP] [VIAD CORP]
REQUEST FOR EXTENSION OF COMMITMENT
TERMINATION DATE
[Date]
[Name and Address of Eligible Lender]
Pursuant to that certain Amended and Restated Credit Agreement dated as
of July 24, 1996 (as amended from time to time, the "Credit Agreement", the
terms defined therein being used herein as therein defined) among [The Dial
Corp][Viad Corp] (the "Borrower"), certain Lenders party thereto, Citicorp USA,
Inc., as Administrative Agent for said Lenders, and Bank of America National
Trust and Savings Association, as Documentation Agent for said Lenders, this
represents the Borrower's request to extend the Commitment Termination Date of
each Eligible Lender to [1] pursuant to Section 2.16 of the Credit Agreement.
The Borrower hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the effectiveness of the
extension requested hereby ("Proposed Extension"):
(a) the representations and warranties contained in Section
4.01 of the Credit Agreement are correct, before and after giving
effect to the Proposed Extension, as though made on and as of such
date, except to the extent that any such representation or warranty
expressly relates only to an earlier date, in which case they were
correct as of such earlier date;
(b) no event has occurred and is continuing, or would result
from the Proposed Extension, which constitutes an Event of Default or a
Potential Event of Default; and
- -------------
[1] Insert date which is one year or two years after the latest
Commitment Termination Date in effect.
<PAGE> 93
(c) the balance sheet of the Borrower and its Subsidiaries as
at [ ], 199[ ][2], and the related statements of income and retained
earnings of the Borrower and its Subsidiaries for the fiscal year then
ended, copies of each of which have been furnished to each Lender,
fairly present the financial condition of the Borrower and its
Subsidiaries as at such applicable date and the results of the
operations of the Borrower and its Subsidiaries for the fiscal year
ended on such applicable date, all in accordance with GAAP consistently
applied, and since [ ], 199[ ][2], there has been no material adverse
change in the business, condition (financial or otherwise), operations
or properties of the Borrower and its Subsidiaries, taken as a whole.
Please indicate your consent to such extension of the Commitment
Termination Date by signing the attached copy of this request in the space
provided below and returning the same to the undersigned.
Very truly yours,
[THE DIAL CORP] [VIAD CORP]
By:
Title:
The undersigned Eligible Lender
hereby consents to the extension
of its Commitment Termination Date
as requested above. This consent
is subject to the terms of
Section 2.16 of the Credit Agreement.
DATED:
[ELIGIBLE LENDER]
By:
Title:
- ------------------
[2] Insert date of the most recent audited balance sheet of the
Borrower and its Subsidiaries.
<PAGE> 94
EXHIBIT F
[FORM OF COMPLIANCE CERTIFICATE]
The undersigned certifies that: (i) this Certificate is as of [ ] and
pertains to the period from [ ] to [ ], (ii) the undersigned has reviewed the
terms of that certain Amended and Restated Credit Agreement, dated as of July
24, 1996, among The Dial Corp (to be known as The Viad Corp upon the
effectiveness of such Credit Agreement), the Banks named therein, Citicorp USA,
Inc., as Administrative Agent, and Bank of America National Trust and Savings
Association, as Documentation Agent (as it may be amended, supplemented,
restated or otherwise modified from time to time, the "Credit Agreement") and
has made, or caused to be made under the undersigned's supervision, a review in
reasonable detail of the transactions and condition of the Borrower and its
Subsidiaries during the period set forth above and (iii) such review has not
disclosed the existence during or at the end of such period, and the undersigned
does not have knowledge of the existences as of the date of this Certificate, of
any condition or event that constitutes an Event of Default or Potential Event
of Default.[3] Capitalized terms used herein shall have the meanings set forth
in the Credit Agreement.
A. Net Worth
For the Borrower and its Subsidiaries:
1. Net Worth as of the Effective Date $[ ]
2. 80% multiplied (1) $[ ]
3. Net Income (if a positive number)
from the Effective Date to most
recent June 30 or December 31 $[ ]
4. 25% multiplied (3) $[ ]
- -------------
[3] If any event or condition that constitutes an Event of Default or
Potential Event of Default exists, the Certificate should include the nature and
period of existence of such event or condition and what action the Borrower has
taken, is taking and proposes to take with respect thereto.
<PAGE> 95
5. aggregate net proceeds, including
cash and the fair market value of
property other than cash, received
by the Borrower from the issue or sale
of capital stock of the Borrower
from the Effective Date to the most
recent June 30 or December 31 $[ ]
6. aggregate of 25% of the after tax
gains realized from unusual,
extraordinary, and major nonrecurring
items from the Effective Date to the
most recent June 30 or December 31 $[ ]
7. Additions to Capital [(5) plus (6)] $[ ]
8. Net Worth $[ ]
9. Minimum Net Worth permitted under
Credit Agreement
[(2) plus (4) plus (7)] $[ ]
B. Maximum Funded Debt Ratio.
For the Borrower and its Subsidiaries
(for each period consisting of the most
recently ended four consecutive fiscal
quarters of the Borrower):
1. indebtedness for borrowed money
or for the deferred purchase price
of property or services $[ ]
2. obligations as lessee under leases
which shall have been or should be,
in accordance with GAAP, recorded as
capital leases $[ ]
3. obligations under guarantees in
respect of indebtedness or
obligations of others of the
kinds referred to in clauses (1) and
(2) of this Section B $[ ]
4. Funded Debt [(1) plus (2) plus (3)] $[ ]
5. consolidated net income plus provision
for taxes (excluding extraordinary,
unusual, or nonrecurring gains or
losses) $[ ]
6. interest expense $[ ]
7. depreciation expense and
amortization of intangibles $[ ]
8. EBITDA [(5) plus (6) plus (7)] $[ ]
9. Ratio of Funded Debt to EBITDA
[(4):(8)] [ : ]
10. Maximum Funded Debt Ratio required
under Credit Agreement 3.00:1.00
By:
Title:
<PAGE> 96
EXHIBIT G-1
[FORM OF PROMISSORY NOTE (COMMITTED ADVANCES)]
PROMISSORY NOTE
[ ] Dated: [ ], 19[ ]
FOR VALUE RECEIVED, the undersigned, [THE DIAL CORP][VIAD CORP], a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
[ ] (the "Lender"), for the account of its Applicable Lending Office, the unpaid
principal amount of each Advance made by the Lender to the Borrower pursuant to
the Credit Agreement referred to below on or before the Termination Date of the
Lender. The Borrower promises to pay interest on the unpaid principal amount of
each such Advance on the dates and at the rate or rates provided for in the
Credit Agreement. All such payments of principal and interest shall be made in
United States dollars in same day funds at the Administrative Agent's office, as
specified in the Credit Agreement.
All Advances made by the Lender, the respective maturities thereof and
all repayments of principal thereof shall be recorded by the Lender and, prior
to any transfer hereof, appropriate notations to evidence the foregoing
information with respect to each such Advance then outstanding shall be endorsed
by the Lender on the schedule attached hereto, or on a continuation of such
schedule attached to and made a part hereof, or in the records of such Lender in
accordance with its usual practice; provided that the failure of the Lender to
make any such recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Credit Agreement.
This promissory note is one of the promissory notes referred to in
Section 2.14(d) of that certain Amended and Restated Credit Agreement dated as
of July 24, 1996, among the Borrower, the Lenders named therein, Citicorp USA,
Inc., as Administrative Agent, and Bank of America National Trust and Savings
Association as Documentation Agent (said Credit Agreement, as it may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement are used herein with the same meanings.
Reference is hereby made to the Credit Agreement for provisions relating to this
promissory note, including, without limitation, the mandatory and optional
prepayment hereof and the acceleration of the maturity hereof.
[THE DIAL CORP] [VIAD CORP]
By:
Title:
<PAGE> 97
TRANSACTIONS ON PROMISSORY NOTE
Amount of
Advance Amount
Made This Maturity Interest of Notation
Date Date Period Rate Payment Made By
- ---- --------- -------- -------- ------- --------
<PAGE> 98
EXHIBIT G-2
[FORM OF PROMISSORY NOTE (BID ADVANCES)]
PROMISSORY NOTE
[ ] Dated: [__________], 19[ ]
FOR VALUE RECEIVED, the undersigned, [THE DIAL CORP][VIAD CORP], a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
[ ] (the "Lender") for the account of its Applicable Lending Office (as defined
in the Credit Agreement referred to below) the principal amount of each Bid
Advance (as defined below) made by the Lender to the Borrower pursuant to the
Credit Agreement on the maturity date of such Bid Advance determined pursuant
to the Credit Agreement.
The Borrower further promises to pay interest on the unpaid principal
amount of each Bid Advance from the date of such Bid Advance until such
principal amount is paid in full, at such interest rates, and payable at such
times, in accordance with the terms of the Credit Agreement .
Both principal and interest are payable in lawful money of the United
States of America to Citicorp USA, Inc., as Agent, at the office of Citibank,
N.A. located at 1 Court Square, 7th Floor, Long Island City, New York, 11120 in
same day funds. Each Bid Advance made by the Lender to the Borrower pursuant to
the Credit Agreement, and all payments made on account of principal thereof,
shall be recorded by the Lender and, prior to any transfer hereof, endorsed on
the grid attached hereto which is part of this Promissory Note.
This Promissory Note is one of the promissory notes referred to in
Section 2.14(d) of, and is entitled to the benefits of, that certain Amended and
Restated Credit Agreement dated as of July 24, 1996 (as it may be amended,
supplemented, restated or otherwise modified from time to time, the "Credit
Agreement") by and among Borrower, the financial institutions named therein,
Citicorp USA, Inc., as Administrative Agent and Bank of America National Trust
and Savings Association, as Documentation Agent. The Credit Agreement, among
other things, contains provisions for the making of certain advances (the "Bid
Advances") at the discretion of the Lender, and for the acceleration of the
maturity of the Bid Advances upon the happening of certain stated events.
The date and amount of each Bid Advance, the maturity thereof and the
interest rate applicable thereto and all payments made by the Borrower on
account of principal hereof shall be recorded by the Lender and, prior to any
transfer of this Promissory Note, entered by the Lender on the grid attached
hereto, which is part of this Promissory Note, provided that the Lender shall
not be liable to the Borrower or to any other person for failure to record any
of the foregoing matters on the grid or otherwise in the Lender's records. Such
grid or such other record maintained by the Lender shall, in the absence of
manifest error, be conclusive evidence of the matters so recorded.
The Borrower hereby waives presentment, demand, protest, and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York, United States.
[THE DIAL CORP] [VIAD CORP]
By:
Title:
<PAGE> 99
TRANSACTIONS ON PROMISSORY NOTE
Amount of
Advance Amount
Made This Maturity Interest of Notation
Date Date Period Rate Payment Made By
- ---- --------- -------- -------- ------- --------
<PAGE> 100
EXHIBIT H
[FORM OF DESIGNATION AGREEMENT]
DESIGNATION AGREEMENT
Dated [ ], 19[ ]
Reference is made to that certain Amended and Restated Credit Agreement
dated as of July 24, 1996 (as it may be amended, supplemented, restated or
otherwise modified from time to time, the "Credit Agreement"; the terms defined
therein being used herein as therein defined) by and among [The Dial Corp][Viad
Corp], a Delaware corporation (the "Company"), the financial institutions named
therein, Citicorp USA, Inc., as Administrative Agent, and Bank of America
National Trust and Savings Association, as Documentation Agent.
[ ] (the "Designator") and [ ] (the "Designee") agree as follows:
1. The Designator hereby designates the Designee, and the Designee
hereby accepts such designation, to have a right to make Bid Advances pursuant
to Section 2.03 of the Credit Agreement.
2. The Designator makes no representation or warranty and assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto and
(ii) the financial condition of any Borrower or the performance or observance by
any Borrower of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto.
3. The Designee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Designation Agreement; (ii) agrees that it will, independently and without
reliance upon the Agent, the Designator or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is a Designated Bidder; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(v) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; and (vi) specifies as its Applicable Lending Office
with respect to Bid Advances (and address for notices) the offices set forth
beneath its name on the signature page[s] hereof.
[Remainder of page intentionally left blank]
<PAGE> 101
A. This Designation Agreement shall be effective upon the execution of
this Agreement by the Designator, Designee and the Agent and the approval of the
Company as provided in the Credit Agreement.
1. This Designation Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
[NAME OF DESIGNATOR]
By:
Title:
[NAME OF DESIGNEE]
By:
Title:
Domestic Lending Office
(and address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this [ ] day
of [ ], 19[ ]
Citicorp USA, Inc.
as Administrative Agent
By:
Title:
Bank of America National
Trust and Savings Association
as Documentation Agent
By:
Title:
<PAGE> 1
Exhibit 99(b)(1)(b)
VIAD CORP
FIRST AMENDMENT DATED AS OF AUGUST 1, 1997
TO AMENDED AND RESTATED CREDIT AGREEMENT
This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is dated as of August 1, 1997 and entered into by and among VIAD
CORP, a Delaware corporation (formerly, Dial Corp, hereinafter the "Borrower"),
the banks (the "Banks") listed on the signature pages hereof, CITICORP USA,
INC., as administrative agent for the Banks hereunder (in such capacity, the
"Administrative Agent") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as documentation agent for the Banks hereunder (in such capacity,
the "Documentation Agent"; the Administrative Agent and the Documentation Agent
being referred to herein together as the "Agents"), and is made with reference
to the Amended and Restated Credit Agreement dated as of July 24, 1996 (the
"Credit Agreement"). Capitalized terms used herein without definition shall have
the same meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, the Borrower has requested that the provisions restricting
liens on accounts receivable resulting from the sale of such accounts receivable
be amended as set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENT TO SECTIONS 1.01 AND 5.02 OF THE CREDIT AGREEMENT.
1.1. AMENDMENT TO SECTION 1.01. CERTAIN DEFINED TERMS.
Section 1.1 of the Credit Agreement is hereby amended by
adding the following definition, which shall be inserted in appropriate
alphabetical order:
"'TEC' means Travelers Express, Inc., a Subsidiary of the
Borrower."
1.2. AMENDMENT TO SECTION 5.02. NEGATIVE COVENANTS.
A. Clause (ii) of subsection 5.02(a) of the Credit Agreement
is hereby amended by deleting such clause in its entirety and
substituting the following therefor:
"(ii) Liens on accounts receivable or general intangibles
resulting from the sale of such accounts receivable or general
intangibles by the Borrower or a Subsidiary of the Borrower
(other than TEC or a
<PAGE> 2
Subsidiary of TEC) so long as, at any time, the aggregate
outstanding amount of cash advanced to the Borrower or such
Subsidiary, as the case may be, and attributable to the sale
of such accounts receivable or general intangibles does not
exceed $150,000,000;"
B. Subsection 5.02(a) of the Credit Agreement is hereby
further amended by renumbering clauses (iii)-(v) as clauses (iv)-(vi)
and adding a new clause (iii) thereto to read in its entirety as
follows:
"(iii) Liens on accounts receivable or general intangibles
resulting from the sale of such accounts receivable or general
intangibles by TEC or a Subsidiary of TEC;"
C. Subsection 5.02(a) is hereby further amended by renumbering
clause (vi) as clause (vii) and deleting the phrase ""(i), (iii) or
(iv)" in the place in which it appears in such subsection and
substituting the phrase "(i), (ii), (iv) or (v)" therefor.
D. Subsection 5.02(a) is hereby further amended by renumbering
clause (vii) thereof as clause (viii) and changing the number "(vi)" in
the place in which it appears in-such subsection to "(vii").
SECTION 2. BORROWER'S REPRESENTATIONS AND WARRANTIES.
To induce the Banks to enter into this Amendment and to amend the
Credit Agreement in the manner provided herein, the Borrower represents and
warrants to each Bank that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. The Borrower has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement, as amended by this Amendment (the "Amended Agreement").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the consummation of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of the Borrower.
C. NO CONFLICT. The execution and delivery by the Borrower of this
Amendment and the consummation by the Borrower of the Amended Agreement do not
and will not (i) violate any provision of any law or any governmental rule or
regulation applicable to the Borrower-or its Subsidiaries, the certificate of
incorporation or bylaws of the Borrower or any order, judgment or decree of any
court or other agency of government binding on the Borrower or its Subsidiaries,
(ii) conflict with, result in a breach of or constitute (with due notice or
lapse of time or
<PAGE> 3
both) a default under any material contractual restriction of the Borrower or
its Subsidiaries, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of the Borrower or its Subsidiaries,
or (iv) require any approval of stockholders or any approval or consent of any
Person under any contractual obligation of the Borrower or its Subsidiaries
(other than the parties hereto).
D. GOVERNMENTAL CONSENTS. The execution and delivery by the Borrower of
this Amendment and the consummation by the Borrower of the Amended Agreement do
not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment has been duly executed and
delivered by the Borrower and this Amendment and the Amended Agreement are the
legally valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by principles of equity and
commercial reasonableness.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 4.01 of the
Credit Agreement are true, correct and complete in all material respects to the
same extent as though made on and as of the date hereof, except as provided
above or to the extent such representations and warranties specifically relate
to an earlier date, in which case they were true, correct and complete in all
material respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would, upon the giving of notice, the passage of time, or otherwise,
constitute an Event of Default.
SECTION 3. CONDITIONS TO EFFECTIVENESS.
Section 1 of this Amendment shall become effective on the first date on
which all of the following conditions precedent shall have been satisfied (such
date being referred to herein as the "Amendment Effective Date"):
A. On or before the Amendment Effective Date, the Borrower shall
deliver to the Banks (or to the Agents with sufficient originally executed
copies, where appropriate, for each Bank and its counsel) the following, each,
unless otherwise noted, dated the Amendment Effective Date:
1. Signature and incumbency certificates of its officers
executing this Amendment; and
<PAGE> 4
2. Executed copies of this Amendment.
B. On or before the Amendment Effective Date, all corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by the Agents, acting on behalf of the Banks, and their counsel shall
be satisfactory in form and substance to the Agents and such counsel, and the
Agents and such counsel shall have received all such counterpart originals or
certified copies of such documents as the Agents may reasonably request.
SECTION 4. MISCELLANEOUS.
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(i) On and after the date this Amendment becomes effective in
accordance with its terms, each reference in the Credit Agreement to
"this Agreement", "hereunder", "hereof", "herein" or words of like
import referring to the Credit Agreement shall mean and be a reference
to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement shall remain in full force and effect and is hereby
ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of, any right, power
or remedy of the Agents or any Bank under, the Credit Agreement.
B. FEES AND EXPENSES. The Borrower acknowledges that all costs, fees
and expenses as described in Section 8.04 of the Credit Agreement incurred by
the Administrative Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of the
Borrower.
C. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CON8TRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE 8TATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such
<PAGE> 5
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment shall become effective as of the date hereof
upon the execution and delivery of a counterpart hereof by the Borrower, the
Agents and the Banks.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
VIAD CORP, a Delaware corporation
By: /s/ Ronald G. Nelson
Vice President-Finance &
Treasurer
CITICORP USA, INC., as
Administrative Agent
By: /s/ J. Gregory Davis
Attorney-in-Fact
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as
Documentation Agent
By: /s/ Robert Troutman
Managing Director
CITICORP USA, INC.
By: /s/ J. Gregory Davis
Attorney-in-Fact
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Robert Troutman
Managing Director
Bank of Montreal
By: /s/ B.A. Blucher
Senior Vice President
THE CHASE MANHATTAN BANK
By: /s/ Timothy J. Storms
<PAGE> 6
Managing Director
CIBC INC.
By: /s/ Carter W. Harned
Associate, CIBC Wood
Gundy Securities Corp.,
AS AGENT
NATIONSBANK OF TEXAS, N.A.
By: /s/ Frank M. Johnson
Senior Vice President
ROYAL BANK OF CANADA
By: /s/ Tom J. Oberaigner
Manager
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: /s/ Robert Bottamedi
Vice President
NBD BANK, N.A.
By: /s/ Mark A. Isley
FVP
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY
By: /s/ Wataru Ogawa
Joint General Manager
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH
By: /s/ Michael F. McWalters
Managing Director
By: /s/ Cathy Ruhland
Vice President
THE LONG-TERM CREDIT BANK OF JAPAN
LTD., LOS ANGELES AGENCY
<PAGE> 7
By: /s/ Koh Takemoto
General Manager
MELLON BANK, N.A.
By: /s/ L.C. Ivey
Vice President
THE NORTHERN TRUST COMPANY
By: /s/ John E. Burda
Second Vice President
UNION BANK OF CALIFORNIA
By: /s/ Cary Moore
Vice President
WELLS FARGO BANK, N.A. (FORMERLY
WELLS FARGO BANK OF ARIZONA,
NATIONAL ASSOCIATION)
By: /s/ Steve Newell
AVP
By: /s/ Tod Wuertz
AVP
<PAGE> 1
Exhibit 99(b)(1)(c)
VIAD CORP
SECOND AMENDMENT DATED AS OF SEPTEMBER 11, 1997
TO AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is dated as of September 11, 1997 and entered into by and among
VIAD CORP, a Delaware corporation (formerly, Dial Corp, hereinafter the
"Borrower"), the banks (the "Banks") listed on the signature pages hereof,
CITICORP USA, INC., as administrative agent for the Banks hereunder (in such
capacity, the "Administrative Agent") and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as documentation agent for the Banks hereunder (in such
capacity, the "Documentation Agent"; the Administrative Agent and the
Documentation Agent being referred to herein together as the "Agents"), and is
made with reference to the Amended and Restated Credit Agreement dated as of
July 24, 1996, as amended by the First Amendment to Amended and Restated Credit
Agreement dated as of August 1, 1997 (as so amended, the "Credit Agreement".
Capitalized terms used herein without definition shall have the same meanings
herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, the Borrower has requested that the amount of the Commitments
be reduced on other than a pro rata basis;
WHEREAS, certain of the Lenders desire to terminate their Commitments;
and
WHEREAS, certain of the Lenders and certain other financial
institutions desire to assume a portion of the Commitments being terminated.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENT; TO THE CREDIT AGREEMENT
1.1 AMENDMENT TO SECTION 1.01. CERTAIN DEFINED TERMS.
A. Section 1.01 of the Credit Agreement is hereby amended by adding the
following definitions, which shall be inserted in appropriate alphabetical
order:
"'New Lenders' means Norwest Bank, N.A. and Wachovia Bank,
N.A."
"'Prior Lenders' means Bank of Montreal, The Northern Trust
Company and The Long-term Credit Bank of Japan, Ltd., Los Angeles
Agency."
<PAGE> 2
"'Second Amendment' means the Second Amendment dated as of
September 11, 1997 to the Agreement."
"'Second Amendment Effective Date' means the date the Second
Amendment shall have been executed and delivered by the parties thereto
and the conditions precedent set forth in Section 3 thereof shall have
been satisfied."
B. Section 1.01 of the Credit Agreement is hereby further amended by
deleting the definition of "Lenders" therein and substituting the following
there~ or:
"'Lenders' means (i) the Banks listed on the signature pages
of the Agreement from the Effective Date until the Second Amendment
Effective Date, (ii) the Banks listed on the signature pages of the
Second Amendment, other than the Prior Lenders, from the Second
Amendment Effective Date, (iii) each Eligible Assignee that shall
become a party pursuant to Section 8.07 and, (iv) except when used in
reference to a Committed Advance, a Committed Borrowing, a Commitment
or a related term, each Designated Bidder."
C. Section 1.01 of the Credit Agreement is hereby still further amended
by deleting the definition of "Termination Date" therein and substituting the
following therefor:
"'Termination Date' means, (i) with respect to any Lender
other than a Prior Lender, the earlier of (x) the Commitment
Termination Date of such Lender and (y) the date of termination in
whole of the commitments of all Lenders pursuant to Section 2.05 or
6.01, and (ii) with respect to a Prior Lender, the Second Amendment
Effective Date."
1.2. AMENDMENTS TO ARTICLE II. AMOUNTS AND TERMS OF THE ADVANCES.
A. Subsection 2.01(a) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"(a) Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make Committed Advances to the Borrower from
time to time on any Business Day during the period from the Effective
Date until the Second Amendment Effective Date in an aggregate amount
not to exceed at any time outstanding the amount set opposite such
Lender's name on the signature pages hereof and from the Second
Amendment Effective Date until the Termination Date of such Lender in
an aggregate amount not to exceed at any time outstanding the amount
set forth opposite such Lender's name on the signature pages of the
Second Amendment or, if such Lender has entered into any Assignment and
Acceptance, set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 8.07(c), as such amount may be
reduced pursuant to Section 2.05 (such Lender's Commitment"); provided
that the aggregate amount of the Commitments of the Lenders shall be
deemed used from
<PAGE> 3
time to time to the extent of the aggregate amount of the Bid Advances
and such deemed use of the aggregate amount of the Commitments shall be
applied to the Lenders ratably according to their respective
Commitments (such deemed use of the aggregate amount of the Commitments
resulting from the Bid Advances being the Bid Reduction"); provided
further that (i) in no event shall the aggregate principal amount of
Committed Advances from any Lender outstanding at any time exceed its
Commitment then in effect and (ii) the Total Utilization of Commitments
shall not exceed the aggregate Commitments then in effect."
B. Subsection 2.04(a) of the Credit Agreement is amended and restated
in its entirety as follows:
"SECTION 2.04. FEES.
(a) FACILITY FEES. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender (other than the Designated
Bidders) a facility fee on such Lender's daily average Commitment,
whether used or unused and without giving effect to any Bid Reduction,
from the Effective Date in the case of each Lender, other than a New
Lender, from the Second Amendment Effective Date with respect to a New
Lender and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case of each
other Lender, in each case, until the Termination Date of such Lender,
payable quarterly in arrears on the last day of each March, June,
September and December during the term of such Lender's Commitment,
commencing September 30, 1996 with respect to each Lender, other than a
New Lender, and from the Second Amendment Effective Date with respect
to a New Lender, and, in each case, on the Termination Date of such
Lender, in an amount equal to the product of (i) such Lender's daily
average Commitment, whether used or unused and without giving effect to
any Bid Reduction, in effect during the period for which such payment
that is to be made times (ii) the weighted average rate per annum that
is derived from the following rates: (a) a rate of 0.10% per annum with
respect to each day during such period that the ratings with respect to
Long-Term Debt were at Level 1, (b) a rate of 0.110% per annum with
respect to each day during such period that such ratings were at Level
2, (c) a rate of 0.125% per annum with respect to each day during such
period that such ratings were at Level 3, (d) a rate of 0.1875% per
annum with respect to each day during such period that such ratings
were at Level 4, and (e) at the rate of 0.2500% per annum with respect
to each day during such period that such ratings were at Level 5. If
any change in the rating established by S&P, Moody's or Duff & Phelps
with respect to Long-Term Debt shall result in a change in the Level,
the change in the commitment fee shall be effective as of the date on
which such rating change is publicly announced. If the ratings
established by any two of S&P, Moody's or Duff & Phelps with respect to
Long-Term Debt are unavailable for
<PAGE> 4
any reason for any day, then the applicable level for purposes of
calculating the commitment fee for such day shall be deemed to be Level
5 (or, if the Requisite Lenders consent in writing, such other Level as
may be reasonably determined by the Requisite Lenders from a rating
with respect to Long-Term Debt for such day established by another
rating agency reasonably acceptable to the Requisite Lenders).
C. Schedule I is hereby amended by deleting the Applicable Lending
Offices of the Prior Lenders in the place in which it appears in such Schedule
and adding thereto the Applicable Lending Offices of the New Lenders set forth
on Annex 1 hereto.
SECTION 2. BORROWER'S REPRESENTATIONS AND WARRANTIES.
To induce the Banks to enter into this Amendment and to amend the
Credit Agreement in the manner provided herein, the Borrower represents and
warrants to each Bank that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. The Borrower has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement, as amended by this Amendment (the "Amended Agreement").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the consummation of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of the Borrower.
C. NO CONFLICT. The execution and delivery by the Borrower of this
Amendment and the consummation by the Borrower of the Amended Agreement do not
and will not (i) violate any provision of any law or any governmental rule or
regulation applicable to the Borrower or its Subsidiaries, the certificate of
incorporation or bylaws of the Borrower or any order, judgment or decree of any
court or other agency of government binding on the Borrower or its Subsidiaries,
(ii) conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any material contractual restriction of
the Borrower or its Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of the Borrower or
its Subsidiaries, or (iv) require any approval of stockholders or any approval
or consent of any Person under any contractual obligation of the Borrower or its
Subsidiaries (other than the parties hereto).
D. GOVERNMENTAL CONSENTS. The execution and delivery by the Borrower of
this Amendment and the consummation by the Borrower of the Amended Agreement do
not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
<PAGE> 5
E. BINDING OBLIGATION. This Amendment has been duly executed and
delivered by the Borrower and this Amendment and the Amended Agreement are the
legally valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by principles of equity and
commercial reasonableness.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 4.01 of the
Credit Agreement are true, correct and complete in all material respects to the
same extent as though made on and as of the date hereof, except as provided
above or to the extent such representations and warranties specifically relate
to an earlier date, in which case they were true, correct and complete in all
material respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would, upon the giving of notice, the passage of time, or otherwise,
constitute an Event of Default.
SECTION 3. CONDITIONS TO EFFECTIVENESS.
Section 1 of this Amendment shall become effective on the first date on
which all of the following conditions precedent shall have been satisfied (such
date being referred to herein as the "Amendment Effective Date"):
A. On or before the Amendment Effective Date, the Borrower shall
deliver to the Banks (or to the Agents with sufficient originally executed
copies, where appropriate, for each Bank and its counsel) the following, each,
unless otherwise noted, dated the Amendment Effective Date:
1. Signature and incumbency certificates of its officers
executing this Amendment; and
2. Executed copies of this Amendment.
B. On or before the Amendment Effective Date, all corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by the Agents, acting on behalf of the Banks, and their counsel shall
be satisfactory in form and substance to the Agents and such counsel, and the
Agents and such counsel shall have received all such counterpart originals or
certified copies of such documents as the Agents may reasonably request.
C. On or before the Amendment Effective Date, Borrower shall pay to
each of the Prior Lenders, all amounts owned to such Prior Lenders pursuant to
Section 8.04 of the Agreement.
<PAGE> 6
SECTION 4. NEW LENDER.
Each New Lender (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into the
Second Amendment; (ii) agrees that it will, independently and without reliance
upon the Agents, any Prior Lenders or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers under the Agreement as are delegated to such Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (v)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Agreement are required to be performed by
it as a Lender; and (vi) specifies as its Domestic Lending Office (and address
for notices) and Eurodollar Lending Office the offices set forth in Section
1.2(c) hereof.
SECTION 5. MISCELLANEOUS.
A. Reference to and Effect on the Credit Agreement and the Other Loan
Documents.
(i) On and after the date this Amendment becomes effective in
accordance with its terms, each reference in the Credit Agreement to
"this Agreement", "hereunder", "hereof", "herein" or words of like
import referring to the Credit Agreement shall mean and be a reference
to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement shall remain in full force and effect and is hereby
ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of, any right, power
or remedy of the Agents or any Bank under, the Credit Agreement.
B. FEES AND EXPENSES. The Borrower acknowledges that all costs, fees
and expenses as described in Section 8.04 of the Credit Agreement incurred by
the Administrative Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of the
Borrower.
C. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other
<PAGE> 7
purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment shall become effective as of the date hereof
upon the execution and delivery of a counterpart hereof by the Borrower, the
Agents and the Banks.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
VIAD CORP, a Delaware corporation
By: /s/ Robert H. Bohannon
Chairman, President and
Chief Executive Officer
By: /s/ Ronald G. Nelson
Vice President-Finance
and Treasurer
CITICORP USA, INC., as
Administrative Agent
By: /s/ J. Gregory Davis
Attorney-in-Fact
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as
Documentation Agent
By: /s/ Robert Troutman
Managing Director
Commitment: $32,000,000 CITICORP USA, INC.
By: /s/ J. Gregory Davis
Attorney-in-Fact
<PAGE> 8
Commitment: $32,000,000 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Robert Troutman
Managing Director
Commitment: 0 BANK OF MONTREAL
By: /s/ B.A. Blucher
Senior Vice President
Commitment: $24,000,000 THE CHASE MANHATTAN BANK
By: /s/ Timothy J. Storms
Managing Director
Commitment: $24,000,000 CIBC INC.
By: /s/ Cheryl L. Root
Director, CIBC Wood Gundy
Securities Corp., as
Agent
Commitment: $24,000,000 NATIONSBANK OF TEXAS, N.A.
By: /s/ Frank M. Johnson
Senior Vice President
Commitment: $24,000,000 ROYAL BANK OF CANADA
By: /s/ Tom J. Oberaigner
Manager
Commitment: $20,000,000 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: /s/ Robert Bottamedi
Vice President
Commitment: $20,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ James D. Benko
Vice President
Commitment: $16,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY
By: /s/ Vicente L. Timiraos
<PAGE> 9
SVP & Senior Manager
Commitment: $16,000,000 WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH
By: /s/ Sal Battinelli
VP
By: /s/ Elizabeth Wields
Associate
Commitment: 0 THE LONG-TERM CREDIT BANK OF JAPAN
LTD., LOS ANGELES AGENCY
By: /s/ T. Morgan Edwards II
Deputy General Manager
Commitment: $12,000,000 MELLON BANK, N.A.
By: /s/ L.C. Ivey
Vice President
Commitment: 0 THE NORTHERN TRUST COMPANY
By: /s/ John E. Burda
Second Vice President
Commitment: $12,000,000 UNION BANK OF CALIFORNIA
By: /s/ Cedric Henley
Credit Officer
By: /s/ Cary Moore
Vice President
Commitment: $12,000,000 WELLS FARGO BANK, N.A. (SUCCESSOR
TO FIRST INTERSTATE BANK OF
ARIZONA, N.A.)
By: /s/ Edith R. Lim
Vice President
By: /s/ David B. Hollingsworth
Vice President
Commitment: $16,000,000 NORWEST BANK ARIZONA, N.A.
By: /s/ Jaclyn Noel
AVP
<PAGE> 10
Commitment: $16,000,000 WACHOVIA BANK, N.A.
By: /s/ Michael S. Simms
Vice President
<PAGE> 1
EXHIBIT 99(C)(1)
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
AMONG
VIAD CORP,
PINE VALLEY ACQUISITION CORPORATION
AND
MONEYGRAM PAYMENT SYSTEMS, INC.
DATED AS OF APRIL 4, 1998
- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
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ARTICLE I
THE OFFER
Section 1.01. The Offer................................................... 1
Section 1.02. Company Action.............................................. 3
ARTICLE II
THE MERGER
Section 2.01. The Merger.................................................. 4
Section 2.02. Effective Time; Closing..................................... 4
Section 2.03. Effect of the Merger........................................ 5
Section 2.04. Certificate of Incorporation; By-laws....................... 5
Section 2.05. Directors and Officers...................................... 5
Section 2.06. Conversion of Securities.................................... 5
Section 2.07. Employee Stock Options...................................... 6
Section 2.08. Dissenting Shares........................................... 6
Section 2.09. Surrender of Shares; Stock Transfer Books................... 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.01. Organization and Qualification; Subsidiaries................ 8
Section 3.02. Certificate of Incorporation and By-laws.................... 9
Section 3.03. Capitalization.............................................. 9
Section 3.04. Authority Relative to this Agreement........................ 9
Section 3.05. No Conflict; Required Filings and Consents.................. 10
Section 3.06. Compliance.................................................. 11
Section 3.07. SEC Filings; Financial Statements........................... 11
Section 3.08. Absence of Certain Changes or Events........................ 12
Section 3.09. Absence of Litigation....................................... 13
Section 3.10. Employee Benefit Plans...................................... 13
Section 3.11. Labor Matters............................................... 15
Section 3.12. Offer Documents; Schedule 14D-9; Proxy Statement............ 15
Section 3.13. Taxes....................................................... 16
Section 3.14. Brokers..................................................... 16
Section 3.15. Certain Contracts........................................... 16
Section 3.16. Real Property and Leases.................................... 17
Section 3.17. Trademarks, Patents, Copyrights and Intellectual Property... 17
Section 3.18. Environmental Matters....................................... 18
Section 3.19. Statute Takeover Statutes................................... 18
Section 3.20. Insurance................................................... 18
Section 3.21. Agents...................................................... 19
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Section 4.01. Corporate Organization...................................... 19
Section 4.02. Authority Relative to this Agreement........................ 20
Section 4.03. No Conflict; Required Filings and Consents.................. 20
Section 4.04. Financing................................................... 21
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Section 4.05. Offer Documents; Proxy Statement............................ 21
Section 4.06. Brokers..................................................... 21
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.01. Conduct of Business by the Company Pending the Merger....... 22
Section 5.02. Additional Covenants........................................ 24
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01. Stockholders' Meeting....................................... 25
Section 6.02. Proxy Statement............................................. 26
Section 6.03. Company Board Representation; Section 14(f)................. 26
Section 6.04. Access to Information; Confidentiality...................... 27
Section 6.05. No Solicitation of Transactions............................. 27
Section 6.06. Employee Benefits Matters................................... 29
Section 6.07. Directors' and Officers' Indemnification and Insurance...... 29
Section 6.08. Further Action; Reasonable Best Efforts..................... 30
Section 6.09. Public Announcements........................................ 30
Section 6.10. Confidentiality Agreement................................... 30
Section 6.11. SEC and Stockholder Filings................................. 31
Section 6.12. Takeover Statutes........................................... 31
Section 6.13. Certain Actions............................................. 31
ARTICLE VII
CONDITIONS TO THE MERGER
Section 7.01. Conditions to the Merger.................................... 31
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.01. Termination................................................. 32
Section 8.02. Effect of Termination....................................... 33
Section 8.03. Fees........................................................ 33
Section 8.04. Amendment................................................... 34
Section 8.05. Waiver...................................................... 34
ARTICLE IX
GENERAL PROVISIONS
Section 9.01. Non-Survival of Representations, Warranties and
Agreements.................................................. 34
Section 9.02. Notices..................................................... 35
Section 9.03. Certain Definitions......................................... 36
Section 9.04. Severability................................................ 38
Section 9.05. Entire Agreement; Assignment................................ 39
Section 9.06. Parties in Interest......................................... 39
Section 9.07. Governing Law............................................... 39
Section 9.08. Headings.................................................... 39
Section 9.09. Counterparts................................................ 39
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ANNEX A
Conditions to the Offer
ANNEX B
Agreement Respecting the Plans and Other Employee Benefit Matters
SCHEDULES
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3.01........................................................ Subsidiaries
3.03........................................................ Stock Options
3.04(b)..................................................... Company Approvals
3.05(a)..................................................... Conflicts
3.05(b)..................................................... State/Foreign Regulatory
Consents/Notices
3.06........................................................ Compliance
3.07(c)..................................................... Financials
3.08........................................................ Certain Changes or Events
3.09........................................................ Litigation
3.10(a)..................................................... Employee Benefits Plans
3.10(f)..................................................... WARN Disclosure
3.10(g)..................................................... Foreign Benefit Plans
3.13........................................................ Taxes
3.15........................................................ First Data Corporation Agreements
3.17(b)..................................................... Intellectual Property
3.17(c)..................................................... Intellectual Property
3.20........................................................ Insurance
3.21........................................................ Agents
5.01(g)..................................................... Capital Expenditures
9.03........................................................ Material Adverse Affect
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GLOSSARY OF DEFINED TERMS(NOT PART OF THIS AGREEMENT)
</TABLE>
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DEFINED TERM LOCATION OF DEFINITION
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Acquisition Proposal........................................ sec. 6.05(a)
Affiliate................................................... sec. 9.03(a)
Agents...................................................... sec. 3.21
Agreement................................................... Preamble
American Express............................................ sec. 5.01(j)
Banamex..................................................... sec. 3.15
Beneficial Owner............................................ sec. 9.03(b)
Blue Sky Laws............................................... sec. 3.05(b)
Board....................................................... Recitals
Business Day................................................ sec. 9.03(c)
Certificate of Merger....................................... sec. 2.02
Certificates................................................ sec. 2.09(b)
Code........................................................ sec. 9.03(d)
Company..................................................... Preamble
Company Approvals........................................... sec. 3.04(b)
Company Common Stock........................................ Recitals
Company Stock Option........................................ sec. 2.07
Company Stock Option Plans.................................. sec. 2.07
Confidentiality Agreement................................... sec. 6.04(c)
Control..................................................... sec. 9.03(e)
Delaware Law................................................ Recitals
Dissenting Shares........................................... sec. 2.08
Effective Time.............................................. sec. 2.02
Environmental Laws.......................................... sec. 9.03(f)
Environmental Permits....................................... sec. 3.18
ERISA....................................................... sec. 3.10(a)
Exchange Act................................................ sec. 1.02(b)
Fee......................................................... sec. 8.03(a)
Foreign Plan................................................ sec. 3.10(g)
Governmental Authority...................................... sec. 9.03(g)
Hazardous Substances........................................ sec. 9.03(h)
HSR Act..................................................... sec. 3.05(b)
Indemnified Parties......................................... sec. 6.07(b)
Intellectual Property....................................... sec. 3.17(b)
IRS......................................................... sec. 3.10(a)
Material Adverse Effect..................................... sec. 9.03(i)
Merger...................................................... Recitals
Merger Consideration........................................ sec. 2.06(a)
Minimum Condition........................................... sec. 1.01(a)
Morgan Stanley.............................................. sec. 1.02(a)
1997 Balance Sheet.......................................... sec. 3.07(c)
Offer....................................................... Recitals
Offer Documents............................................. sec. 1.01(b)
Offer to Purchase........................................... sec. 1.01(b)
Option Spread............................................... sec. 2.07
Parent...................................................... Preamble
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<TABLE>
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DEFINED TERM LOCATION OF DEFINITION
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Paying Agent................................................ sec. 2.09(a)
Per Share Amount............................................ Recitals
Person...................................................... sec. 9.03(j)
Plans....................................................... sec. 3.10(a)
Pre-Offer Approvals......................................... sec. 3.05(b)
Proxy Statement............................................. sec. 3.12
Purchaser................................................... Preamble
Returns..................................................... sec. 9.03(k)
Schedule 14D-1.............................................. sec. 1.01(b)
Schedule 14D-9.............................................. sec. 1.02(a)
SEC......................................................... sec. 9.03(l)
SEC Reports................................................. sec. 3.07(a)
SEC Rules................................................... sec. 9.03(m)
Securities Act.............................................. sec. 3.07(a)
Shares...................................................... Recitals
Stockholders' Meeting....................................... sec. 6.01(a)
Subsidiary.................................................. sec. 9.03(n)
Superior Proposal........................................... sec. 6.05(b)
Surviving Corporation....................................... sec. 2.01
Takeover Statute............................................ sec. 6.12
Tax......................................................... sec. 9.03(o)
Taxpayer.................................................... sec. 3.13
Transactions................................................ sec. 3.04(a)
WARN........................................................ sec. 3.10(f)
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<PAGE> 7
AGREEMENT AND PLAN OF MERGER dated as of April 4, 1998 (this "Agreement")
among VIAD CORP, a Delaware corporation ("Parent"), PINE VALLEY ACQUISITION
CORPORATION, a Delaware corporation and a wholly owned Subsidiary of Parent
("Purchaser"), and MONEYGRAM PAYMENT SYSTEMS, INC., a Delaware corporation (the
"Company").
WHEREAS, the Boards of Directors of Parent, Purchaser and the Company have
each determined that it is in the best interests of their respective
stockholders for Parent to acquire the Company upon the terms and subject to the
conditions set forth herein; and
WHEREAS, in furtherance of such acquisition, it is proposed that Purchaser
shall make a cash tender offer (the "Offer") to acquire all the issued and
outstanding shares of Common Stock, par value $0.01 per share, of the Company
("Company Common Stock") (such shares of Company Common Stock being hereinafter
collectively referred to as "Shares") for $17.00 per Share (such amount, or any
greater amount per Share paid pursuant to the Offer, being hereinafter referred
to as the "Per Share Amount") net to the seller in cash, upon the terms and
subject to the conditions of this Agreement and the Offer; and
WHEREAS, the Board of Directors of the Company (the "Board") has
unanimously approved the making of the Offer and resolved and agreed to
recommend that holders of Shares tender their Shares pursuant to the Offer; and
WHEREAS, also in furtherance of such acquisition, the Boards of Directors
of Parent, Purchaser and the Company have each approved the merger (the
"Merger") of Purchaser with and into the Company in accordance with the General
Corporation Law of the State of Delaware ("Delaware Law") following the
consummation of the Offer and upon the terms and subject to the conditions set
forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
Section 1.01. The Offer. (a) Upon the terms, and subject to the conditions
of this Agreement, Purchaser shall commence the Offer as promptly as reasonably
practicable after the date hereof, but in no event later than five Business Days
after the initial public announcement of Purchaser's intention to commence the
Offer. The obligation of Purchaser to accept for payment and pay for Shares
tendered pursuant to the Offer shall be subject to the condition (the "Minimum
Condition") that at least the number of Shares that when added to the Shares
already owned by Parent shall constitute a majority of the then outstanding
Shares on a fully diluted basis (including, without limitation, all Shares
issuable upon the conversion of any convertible securities or upon the exercise
of any options, warrants or rights) shall have been validly tendered and not
withdrawn prior to the expiration of the Offer and also shall be subject to the
satisfaction of the other conditions set forth in Annex A hereto. Purchaser
expressly reserves the right to waive any such condition, to increase the price
per Share payable in the Offer, and to make any other changes in the terms and
conditions of the Offer; provided, however, that the Minimum Condition may not
be waived without the prior approval of the Company and that no change may be
made which decreases the price per Share payable in the Offer or which reduces
the maximum number of Shares to be purchased in the Offer or which imposes
conditions to the Offer in addition to those set forth in Annex A hereto.
Notwithstanding the foregoing, Purchaser may, without the consent of the
Company, (i) extend the Offer beyond the scheduled expiration date (the initial
scheduled expiration date being 20 Business Days following the commencement of
the Offer computed in accordance with SEC Rules) if, at the scheduled expiration
date of the Offer, any of the conditions to Purchaser's obligation to accept for
payment, and to pay for, the Shares, shall not be satisfied or waived, (ii)
extend the Offer for any period required by the SEC Rules applicable to the
Offer, or (iii) extend the Offer for an aggregate period of not more than 10
Business Days beyond the latest applicable date that would otherwise be
permitted under clause (i) or (ii) of this sentence, if as of such date, all of
the conditions to Purchaser's obligations to accept for payment, and to pay for,
the Shares are satisfied or waived, but the
1
<PAGE> 8
number of Shares validly tendered and not withdrawn pursuant to the Offer equals
75 percent or more, but less than 90 percent, of the outstanding Shares on a
fully diluted basis; provided, however, that (A) if, on the initial scheduled
expiration date of the Offer, the sole condition remaining unsatisfied is either
(x) the failure of the waiting period under the HSR Act to have expired or been
terminated, or (y) the failure to obtain a Pre-Offer Approval, the Purchaser
shall extend the Offer from time to time until five Business Days after the
later of expiration or termination of the waiting period under the HSR Act or
the receipt of all Pre-Offer Approvals and (B) if the sole condition remaining
unsatisfied on the initial scheduled expiration date of the Offer is the
condition set forth in paragraph (e) of Annex A, the Purchaser shall, so long as
the breach can be cured and the Company is vigorously attempting to cure such
breach, extend the Offer from time to time until five Business Days after such
breach is cured (provided that Purchaser shall not be required to extend the
Offer under A or B beyond 45 calendar days after such initial scheduled
expiration date). The Per Share Amount shall, subject to applicable withholding
of taxes, be net to the seller in cash, upon the terms and subject to the
conditions of the Offer. Subject to the terms and conditions of the Offer,
Purchaser shall pay, as promptly as practicable after expiration of the Offer,
for all Shares validly tendered and not withdrawn.
(b) As soon as reasonably practicable on the date of commencement of the
Offer, Purchaser shall file with the SEC (i) a Tender Offer Statement on
Schedule 14D-1 (together with all amendments and supplements thereto, the
"Schedule 14D-1") with respect to the Offer. The Schedule 14D-1 shall contain or
shall incorporate by reference an offer to purchase (the "Offer to Purchase")
and forms of the related letter of transmittal and any related summary
advertisement (the Schedule 14D-1, the Offer to Purchase and such other
documents, together with all supplements and amendments thereto, being referred
to herein collectively as the "Offer Documents"). Parent, Purchaser and the
Company agree to correct promptly any information provided by any of them for
use in the Offer Documents which shall have become false or misleading, and
Parent and Purchaser further agree to take all steps necessary to cause the
Schedule 14D-1 as so corrected to be filed with the SEC and the other Offer
Documents as so corrected to be disseminated to holders of Shares, in each case
as and to the extent required by applicable federal securities laws.
Section 1.02. Company Action. (a) The Company hereby approves of and
consents to the Offer and represents and warrants that (i) the Board, at a
meeting duly called and held on April 4, 1998, has unanimously (A) determined
that this Agreement and the transactions contemplated hereby, including each of
the Offer and the Merger, are fair to and in the best interests of the holders
of Shares, (B) approved and adopted this Agreement and the transactions
contemplated hereby (such approval and adoption having been made in accordance
with the provisions of sec.203 of Delaware Law) and (C) recommended that the
stockholders of the Company accept the Offer and approve and adopt this
Agreement and the transactions contemplated hereby, and (ii) Morgan Stanley,
Dean Witter, Discover & Co. ("Morgan Stanley") has delivered to the Board a
written opinion that the consideration to be received by the holders of Shares
pursuant to each of the Offer and the Merger is fair to the holders of Shares
from a financial point of view. Unless the recommendation of the Board has been
withdrawn in accordance with Section 6.05, the Company hereby consents to the
inclusion in the Offer Documents of the recommendation of the Board described in
the immediately preceding sentence and agrees to cause Morgan Stanley to consent
to the inclusion of its written opinion in the offering documents forming a part
of the Solicitation/Recommendation Statement on Schedule 14D-9 (together with
all amendments and supplements thereto, the "Schedule 14D-9"). The Company has
been advised by each of its directors and executive officers that they intend
either to tender all Shares beneficially owned by them to Purchaser pursuant to
the Offer or to vote such Shares in favor of the approval and adoption by the
stockholders of the Company of this Agreement and the transactions contemplated
hereby.
(b) As soon as reasonably practicable on the date of commencement of the
Offer, the Company shall file with the SEC the Schedule 14D-9 containing, unless
the recommendation of the Board has been withdrawn in accordance with Section
6.05, the recommendation of the Board described in Section 1.02(a) and shall
disseminate the Schedule 14D-9 to the extent required by Rule 14d-9 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
any other applicable federal securities laws. The Company, Parent and Purchaser
agree to correct promptly any information provided by any of them for use in the
Schedule 14D-9 which shall have become false or misleading, and the Company
further agrees to
2
<PAGE> 9
take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed
with the SEC and disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws.
(c) The Company shall promptly furnish Purchaser with mailing labels
containing the names and addresses of all record holders of Shares and with
security position listings of Shares held in stock depositories, each as of a
recent date, together with all other available listings and computer files
containing names, addresses and security position listings of record holders and
beneficial owners of Shares. The Company shall furnish Purchaser with such
additional information, including, without limitation, updated listings and
computer files of stockholders, mailing labels and security position listings,
and such other assistance as Parent, Purchaser or their agents may reasonably
request. Subject to the requirements of applicable law, and except for such
steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer or the Merger, Parent and Purchaser
shall hold in confidence the information contained in such labels, listings and
files, shall use such information only in connection with the Offer and the
Merger, and, if this Agreement shall be terminated in accordance with Section
8.01, shall deliver to the Company all copies of such information then in their
possession.
ARTICLE II
THE MERGER
Section 2.01. The Merger. Upon the terms and subject to the conditions set
forth in Article VII, and in accordance with Delaware Law, at the Effective Time
(as hereinafter defined) Purchaser shall be merged with and into the Company. As
a result of the Merger, the separate corporate existence of Purchaser shall
cease and the Company shall continue as the surviving corporation of the Merger
(the "Surviving Corporation").
Section 2.02. Effective Time; Closing. As promptly as practicable after
the satisfaction or, if permissible, waiver of the conditions set forth in
Article VII, the parties hereto shall cause the Merger to be consummated by
filing this Agreement or a certificate of merger or certificate of ownership and
merger (in either case, the "Certificate of Merger") with the Secretary of State
of the State of Delaware, in such form as is required by, and executed in
accordance with the relevant provisions of, Delaware Law. The Merger shall
become effective at the time of filing of the Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with Delaware Law or
such later time as may be specified in the Certificate of Merger (the date and
time when the Merger shall become effective being the "Effective Time").
Section 2.03. Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of Delaware Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
the Company and Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities, obligations, restrictions, disabilities and duties of the
Company and Purchaser shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
Section 2.04. Certificate of Incorporation; By-laws. (a) At the Effective
Time, the Certificate of Incorporation of the Company shall be restated in the
form acceptable to Purchaser and shall be the Certificate of Incorporation of
the Surviving Corporation until thereafter amended as provided by law and such
Certificate of Incorporation; provided, however, that such restated Certificate
of Incorporation shall be in accordance with the provisions of Section 6.07
hereof.
(b) The By-laws of Purchaser, as in effect immediately prior to the
Effective Time, shall be the By-laws of the Surviving Corporation until
thereafter amended as provided by law, the Certificate of Incorporation of the
Surviving Corporation and such By-laws.
Section 2.05. Directors and Officers. The directors and officers of
Purchaser immediately prior to the Effective Time shall be the initial directors
and officers of the Surviving Corporation, each to hold office in
3
<PAGE> 10
accordance with the Certificate of Incorporation and By-laws of the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualified.
Section 2.06. Conversion of Securities. At the Effective Time, by virtue
of the Merger and without any action on the part of Purchaser, the Company or
the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be canceled pursuant to Section
2.06(b) and any Dissenting Shares (as hereinafter defined)) shall be
canceled and shall be converted automatically into the right to receive an
amount equal to the Per Share Amount in cash (the "Merger Consideration")
payable, after reduction for any required Tax withholding, without
interest, to the holder of such Share, upon surrender, in the manner
provided in Section 2.08, of the certificate that formerly evidenced such
Share;
(b) Each Share held in the treasury of the Company and each Share
owned by Purchaser, Parent or any direct or indirect wholly owned
Subsidiary of Parent or of the Company immediately prior to the Effective
Time shall be canceled without any conversion thereof and no payment or
distribution shall be made with respect thereto; and
(c) Each share of Common Stock, par value $.01 per share, of Purchaser
issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued, fully paid and
nonassessable share of Common Stock, par value $.01 per share, of the
Surviving Corporation.
Section 2.07. Employee Stock Options. Each stock option (a "Company Stock
Option") outstanding at the Effective Time under the Company's 1996 Stock Option
Plan or 1996 Broad-Based Stock Option Plan (the "Company Stock Option Plans")
shall be canceled by the Company immediately prior to the Effective Time, and
each holder of a canceled Company Stock Option shall be entitled to receive at
the Effective Time or as soon as practicable thereafter from the Company in
consideration for the cancellation of such Company Stock Option an amount (the
"Option Spread") equal to the product of (i) the number of Shares previously
subject to such Company Stock Option and (ii) the excess, if any, of the Per
Share Amount over the exercise price per share of Company Common Stock
previously subject to such Company Stock Option. The Option Spread, after
reduction for applicable Tax withholding, if any, shall be paid in cash. Upon
the Effective Time, the Company Stock Option Plans shall terminate.
Section 2.08. Dissenting Shares. Notwithstanding any provision of this
Agreement to the contrary, Shares that are outstanding immediately prior to the
Effective Time and which are held by stockholders who shall have not voted in
favor of the Merger or consented thereto in writing and who shall have demanded
properly in writing appraisal for such Shares in accordance with Section 262 of
Delaware Law (collectively, the "Dissenting Shares") shall not be converted into
or represent the right to receive the Merger Consideration. Such stockholders
shall be entitled to receive payment of the appraised value of such Shares held
by them in accordance with the provisions of such Section 262, except that all
Dissenting Shares held by stockholders who shall have failed to perfect or who
effectively shall have withdrawn or lost their rights to appraisal of such
Shares under such Section 262 shall thereupon be deemed to have been converted
into and to have become exchangeable for, as of the Effective Time, the right to
receive the Merger Consideration, without any interest thereon, upon surrender,
in the manner provided in Section 2.09, of the certificate or certificates that
formerly evidenced such Shares.
Section 2.09. Surrender of Shares; Stock Transfer Books. (a) Prior to the
Effective Time, Purchaser shall designate a bank or trust company to act as its
paying agent (the "Paying Agent") who shall also act as agent for the holders of
Shares in connection with the Merger to receive the funds to which holders of
Shares shall become entitled pursuant to Section 2.06(a). Promptly upon receipt,
any such funds shall be invested by the Paying Agent as directed by the
Surviving Corporation, provided that such investments shall be in obligations of
or guaranteed by the United States of America or of any agency thereof and
backed by the full faith and credit of the United States of America, in
commercial paper obligations rated A-1 or P-1 or better by Moody's Investors
Services, Inc. or Standard & Poor's Corporation, respectively, or in deposit
accounts, certificates of deposit or banker's acceptances of, repurchase or
reverse repurchase agreements with, or
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Eurodollar time deposits purchased from, commercial banks with capital, surplus
and undivided profits aggregating in excess of $500 million (based on the most
recent financial statements of such bank which are then publicly available at
the SEC or otherwise).
(b) Promptly after the Effective Time, the Surviving Corporation shall
cause to be mailed to each person who was, at the Effective Time, a holder of
record of Shares entitled to receive the Merger Consideration pursuant to
Section 2.06(a) a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "Certificates") shall pass, only upon proper
delivery of the Certificates to the Paying Agent) and instructions for use in
effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Certificate, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as may be required
pursuant to such instructions, the holder of such Certificate shall be entitled
to receive in exchange therefor the Merger Consideration for each Share formerly
evidenced by such Certificate, after reduction for any required withholding Tax
and such Certificate shall then be canceled. No interest shall accrue or be paid
on the Merger Consideration payable upon the surrender of any Certificate for
the benefit of the holder of such Certificate. If payment of the Merger
Consideration is to be made to a person other than the person in whose name the
surrendered Certificate is registered on the stock transfer books of the
Company, it shall be a condition of payment that the Certificate so surrendered
shall be endorsed properly or otherwise be in proper form for transfer and that
the person requesting such payment shall have paid all transfer and other Taxes
required by reason of the payment of the Merger Consideration to a person other
than the registered holder of the Certificate surrendered or shall have
established to the satisfaction of the Surviving Corporation that such Taxes
either have been paid or are not applicable.
(c) At any time following the sixth month after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to deliver
to it any funds which had been made available to the Paying Agent and not
disbursed to holders of Shares (including, without limitation, all interest and
other income received by the Paying Agent in respect of all funds made available
to it), and thereafter such holders shall be entitled to look to the Surviving
Corporation (subject to abandoned property, escheat and other similar laws) only
as general creditors thereof with respect to any Merger Consideration that may
be payable upon due surrender of the Certificates held by them. Notwithstanding
the foregoing, neither the Surviving Corporation nor the Paying Agent shall be
liable to any holder of a Share for any Merger Consideration delivered in
respect of such Share to a public official pursuant to any abandoned property,
escheat or other similar law.
(d) At the close of business on the day of the Effective Time, the stock
transfer books of the Company shall be closed and thereafter there shall be no
further registration of transfers of Shares on the records of the Company. From
and after the Effective Time, the holders of Shares outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
Shares except as otherwise provided herein or by applicable law.
(e) Parent and/or the Surviving Corporation shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of Shares such amounts, if any, as Parent and/or the Surviving
Corporation is required to deduct and withhold with respect to the making of
such payment under the Code, or any provision of state, local or foreign Tax
law. To the extent that amounts are so withheld by Parent and/or the Surviving
Corporation, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares in respect of which
such deduction and withholding was made by Parent and/or the Surviving
Corporation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Purchaser that:
Section 3.01. Organization and Qualification; Subsidiaries. (a) Each of
the Company and each Subsidiary of the Company is duly organized, validly
existing and in good standing under the laws of its
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jurisdiction of organization and has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be so organized, existing or in good standing or to have such power, authority
and governmental approvals would not, individually or in the aggregate, have a
Material Adverse Effect (as defined below). Each of the Company and each
Subsidiary is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that would not, individually or in
the aggregate, have a Material Adverse Effect. A true and complete list of all
the Subsidiaries, together with the jurisdiction of incorporation of each
Subsidiary and the percentage of the outstanding capital stock of each
Subsidiary owned by the Company and each other Subsidiary, is set forth in
Schedule 3.01. Except as disclosed in Schedule 3.01, the Company and its
Subsidiaries does not directly or indirectly own any equity or similar interest
in, or any interest convertible into or exchangeable or exercisable for any
equity or similar interest in, any corporation, partnership, joint venture or
other business association or entity.
Section 3.02. Certificate of Incorporation and By-laws. The Company has
heretofore furnished to Parent a complete and correct copy of the Certificate of
Incorporation and the By-laws or equivalent organizational documents, each as
amended to date, of the Company and each Subsidiary. Such Certificates of
Incorporation and By-Laws or equivalent organizational documents are in full
force and effect, and neither the Company nor any Subsidiary is in violation of
any provision thereof.
Section 3.03. Capitalization. The authorized capital stock of the Company
consists of 100,000,000 Shares. As of the date hereof, (i) 16,513,800 Shares are
issued and outstanding, all of which are validly issued, fully paid and
nonassessable and free of preemptive rights, (ii) 111,200 Shares are held in the
treasury of the Company, (iii) no Shares are held by the Subsidiaries and (iv)
1,200,000 Shares are reserved for future issuance pursuant to employee stock
options granted pursuant to the Company's Stock Option Plans. Except as set
forth in this Section 3.03, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock of the Company or any Subsidiary or obligating the
Company or any Subsidiary to issue or sell any shares of capital stock of, or
other equity interests in, the Company or any Subsidiary. All Shares subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. Schedule 3.03 contains a list of
all options to purchase any capital stock of the Company. There are no
outstanding contractual obligations of the Company or any Subsidiary to provide
funds to, or make any investment (in the form of a loan, capital contribution or
otherwise) in, any Subsidiary or any other person other than to agents and
wholly owned Subsidiaries of the Company, in the ordinary course of business
consistent with past practice. There are no commitments, understandings,
restrictions or arrangements obligating the Company to purchase, redeem or
acquire, or register under any securities law any shares of capital stock or any
securities or rights convertible into, exchangeable for, or evidencing the right
to subscribe to any shares of capital stock of the Company. Except for any
obligations in connection with this Agreement, there are not as of the date
hereof, and there will not be at the Closing Date, any stockholder agreement,
voting trust or other agreements or understandings to which the Company is a
party or to which it is bound, relating directly or indirectly to any Company
Common Stock.
Section 3.04. Authority Relative to this Agreement. (a) The Company has
all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby (the "Transactions"). The execution and delivery of this
Agreement by the Company and the consummation by the Company of the Transactions
have been duly and validly authorized by all necessary corporate action and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the Transactions (other than, with
respect to the Merger, the approval and adoption of this Agreement by the
holders of a majority of the then outstanding Shares if and to the extent
required by applicable law, and the filing and recordation of appropriate merger
documents as required by Delaware Law). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Parent and Purchaser, constitutes a legal, valid and
binding obligation of the Company.
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(b) Schedule 3.04(b) lists all material permits, registrations, licenses,
franchises, certifications and other approvals, including without limitation,
all money transfer or sale of checks licenses (collectively, the "Company
Approvals") required from any Governmental Authority, in order for the Company
and its Subsidiaries to conduct its business as presently conducted. The Company
has obtained all Company Approvals except where the lack of such Company
Approvals would not, individually or in the aggregate, have a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is subject to, nor bound
by, any agreement with, or judgment, decree or order issued by, any Governmental
Authority which, individually or in the aggregate, has a Material Adverse
Effect.
Section 3.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement and the consummation of the Transactions by the
Company will not, (i) conflict with or violate the Certificate of Incorporation
or By-laws or equivalent organizational documents of the Company or any
Subsidiary, (ii) except as set forth in Schedule 3.05(a), conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Company or any Subsidiary or by which any property or asset of the Company or
any Subsidiary is bound or affected other than conflicts or violations that
would not, individually or in the aggregate, have a Material Adverse Effect, or
(iii) except as set forth on Schedule 3.05(a), result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of the Company or any Subsidiary
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation, other than
breaches or defaults that would not, individually or in the aggregate, have a
Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement and the consummation of the Transactions
by the Company will not, require any consent, approval, authorization or permit
of, or filing with or notification to, any Governmental Authority, except (i)
for applicable requirements, if any, of the Exchange Act, state securities or
"blue sky" laws ("Blue Sky Laws") and state takeover laws, the pre-merger
notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder (the "HSR Act"), and
filing and recordation of appropriate merger documents as required by Delaware
Law, (ii) requirements of state and foreign banking, currency or other
regulatory authorities (all of which requirements including, without limitation,
the identification of all authorizations, consents or approvals required to
consummate the Offer ("Pre-Offer Approvals") are set forth in Schedule 3.05(b))
and (iii) where failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or delay
consummation of the Offer or the Merger, or otherwise prevent the Company from
performing its obligations under this Agreement, and would not, individually or
in the aggregate, have a Material Adverse Effect.
Section 3.06. Compliance. Except as set forth on Schedule 3.06, neither
the Company nor any Subsidiary is in conflict with, or in default or violation
of, (i) any law, rule, regulation, order, judgment or decree applicable to the
Company or any Subsidiary or by which any property or asset of the Company or
any Subsidiary is bound or affected, including, without limitation, the Foreign
Corrupt Practices Act of 1977, as amended, the Money Laundering Control Act, and
the Bank Secrecy Act, or (ii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any property or asset of the Company or any Subsidiary is bound or
affected, except for any such conflicts, defaults or violations that would not,
individually or in the aggregate, have a Material Adverse Effect.
Section 3.07. SEC Filings; Financial Statements. (a) The Company has filed
all forms, reports and documents required to be filed by it with the SEC since
December 11, 1996 and has heretofore made available to Parent, in the form filed
with the SEC, (i) its Registration Statement on Form S-1, as amended, filed with
the SEC on December 11, 1996, (ii) its Annual Reports on Form 10-K for the
fiscal years ended December 31, 1996 and 1997, (iii) all proxy statements
relating to the Company's meetings of stockholders (whether annual or special)
held since December 31, 1996 and (iv) all other forms, reports and other
registration statements filed by the Company with the SEC since January 1, 1996
(the forms, reports and
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other documents referred to in clauses (i), (ii), (iii) and (iv) above being
referred to herein, collectively, as the "SEC Reports"). The SEC Reports (i)
were prepared in accordance with the requirements of the Securities Act of 1933,
as amended (the "Securities Act"), and the Exchange Act, as the case may be, and
the rules and regulations thereunder and (ii) did not at the time they were
filed contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. No Subsidiary is required to file any form, report or
other document with the SEC.
(b) Each of the consolidated financial statements (including, in each case,
any notes thereto) contained in the SEC Reports was prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated and each fairly presented the consolidated
financial position, results of operations and changes in financial position of
the Company and the Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein (except as otherwise noted therein and
subject, in the case of unaudited statements, to normal and recurring year-end
adjustments).
(c) Except as and to the extent set forth on the consolidated balance sheet
of the Company and the Subsidiaries as at December 31, 1997, including the notes
thereto (the "1997 Balance Sheet"), neither the Company nor any Subsidiary has
any liability or obligation of any nature (whether accrued, absolute, contingent
or otherwise) which would be required to be reflected on a balance sheet
prepared in accordance with generally accepted accounting principles, except for
liabilities and obligations (i) incurred in the ordinary course of business
consistent with past practice since December 31, 1997, (ii) that would not,
individually or in the aggregate, have a Material Adverse Effect or (iii) as set
forth on Schedule 3.07(c).
(d) The Transactions Summaries, dated March 10, 1998 and April [1], 1998,
provided to Parent and Purchaser by the Company, accurately sets forth the
number of transactions sent and received by the Company and its Subsidiaries
during the 1997 fiscal year and January and February 1998.
Section 3.08. Absence of Certain Changes or Events. From December 31, 1997
through the date hereof, except as set forth on Schedule 3.08 or disclosed in
any SEC Report, there has not been (i) a Material Adverse Effect, (ii) any
material change by the Company in its accounting methods, principles or
practices, (iii) any entry by the Company or any Subsidiary into any contract
material to the Company and the Subsidiaries, taken as a whole, (iv) any
declaration, setting aside or payment of any dividend or distribution in respect
of any capital stock of the Company or any redemption, purchase or other
acquisition of any of its securities or (v) other than pursuant to the contracts
specified in Section 3.10 and Annex B, any increase in or establishment of any
bonus, insurance, severance, deferred compensation, pension, retirement, profit
sharing, stock option (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards, or restricted stock
awards), stock purchase or other employee benefit plan, or any other increase in
the compensation payable or to become payable to any officers or key employees
of the Company or any Subsidiary, except in the ordinary course of business
consistent with past practice.
Section 3.09. Absence of Litigation. Except as set forth on Schedule 3.09,
as of the date hereof, there is no claim, action, proceeding or investigation
pending or, to the knowledge of the Company, threatened against the Company or
any Subsidiary, or any property or asset of the Company or any Subsidiary,
before any court, arbitrator or administrative, governmental or regulatory
authority or body, domestic or foreign, that, individually or in the aggregate,
is reasonably likely to have a Material Adverse Effect. As of the date hereof,
neither the Company nor any Subsidiary nor any property or asset of the Company
or any Subsidiary is subject to any order, writ, judgment, injunction, decree,
determination or award having, individually or in the aggregate, a Material
Adverse Effect.
Section 3.10. Employee Benefit Plans. (a) Schedule 3.10(a) contains a true
and complete list of all employee benefit plans (within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) and all material bonus, stock option, incentive, deferred
compensation, severance or other benefit plans, programs or arrangements, and
all material employment, termination, severance or other contracts or agreements
to which the Company or any Subsidiary is a party, with respect to which the
Company or any Subsidiary has any obligation or which are maintained,
contributed to or sponsored by the Company or any Subsidiary for the benefit of
any current or former employee, officer or director of the
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Company or any Subsidiary (collectively, the "Plans"). Each Plan is in writing
and the Company has previously made available to Parent a true and complete copy
of (i) each trust or other funding arrangement, (ii) each summary plan
description and summary of material modifications, (iii) the most recently filed
Internal Revenue Service (the "IRS") Form 5500. Neither the Company nor any
Subsidiary has any express or implied commitment (i) to create, incur liability
with respect to or cause to exist any other employee benefit plan, program or
arrangement, (ii) to enter into any contract or agreement to provide material
compensation or benefits to any individual or (iii) to modify or terminate any
Plan, other than with respect to a modification, change or termination required
by ERISA or the Code.
(b) Other than as specifically disclosed in Schedule 3.10(a), none of the
Plans are subject to Title IV of ERISA. The Company does not maintain or
contribute to any Voluntary Employee Benefit Association under Section 501(c)(9)
of the Code. Other than as specifically disclosed in Schedule 3.10(a), none of
the Plans (i) provides for the payment of separation, severance, termination or
similar-type benefits to any person, (ii) obligates the Company or any
Subsidiary to pay separation, severance, termination or other benefits as a
result of any Transaction or (iii) obligates the Company or any Subsidiary to
make any payment or provide any benefit that could be subject to a tax under
Section 4999 of Code. Other than as specifically disclosed in Schedule 3.10(a),
none of the Plans provides for or promises retiree medical, disability or life
insurance benefits to any current or former employee, officer or director of the
Company or any Subsidiary. The Company is not a Party to any Multi-Employer Plan
as that term is defined in ERISA.
(c) Each Plan which is intended to be qualified under Section 401(a) of the
Code is so qualified, and each trust established in connection with any Plan
which is intended to be exempt from federal income taxation under Section 501(a)
of the Code is so exempt, it being understood that the Company has yet to file a
determination letter request with the IRS with regard to such plans.
(d) There has been no prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) with respect to any Plan that could
reasonably be expected to result in a material liability to the Company or any
Subsidiary. The Company has not incurred any material liability under, arising
out of or by operation of Title IV of ERISA (other than liability for premiums
to the Pension Benefit Guaranty Corporation arising in the ordinary course). No
Reportable Event (within the meaning of Section 4043 of ERISA) has occurred or
is expected to occur with respect to any Plan subject to Title 4 of ERISA other
than a Reportable Event with respect to which the 30-day notice requirement has
been waived).
(e) Each Plan is now and has been operated in all material respects in
accordance with the requirements of all applicable laws, including, without
limitation, ERISA and the Code, and the Company and each Subsidiary has
performed all material obligations required to be performed by them under, are
not in any material respect in default under or in violation of, and has no
knowledge of any material default or violation by any party to, any Plan. No
Plan is under audit or investigation by any Governmental Authority nor has the
Company or any Subsidiary been notified of any audit or investigation.
(f) The Company and the Subsidiaries have not incurred any liability under,
and have complied in all material respects with, the Worker Adjustment
Retraining Notification Act and the regulations promulgated thereunder ("WARN")
and do not reasonably expect to incur any such liability as a result of actions
taken or not taken prior to the Effective Time. Schedule 3.10(f) lists (i) all
the employees terminated or laid off by the Company or any Subsidiary during the
90 days prior to the date hereof and (ii) all the employees of the Company or
any Subsidiary who have experienced a reduction in hours of work of more than
50% during any month during the 90 days prior to the date hereof and describes
all notices given by the Company and the Subsidiaries in connection with WARN.
The Company will, by written notice to Parent and Purchaser, update Schedule
3.10(f) to include any such terminations, layoffs and reductions in hours from
the date hereof through the Effective Time and will provide Parent and Purchaser
with any related information which they may reasonably request.
(g) Except as set forth in Schedule 3.10(g) the Company and its
Subsidiaries do not have any Plan that is not subject to the laws of the United
States or governed by the laws of any other country (a "Foreign Plan"). With
respect to each Foreign Plan: (i) each Foreign Plan required to be registered
has been registered and has been maintained in good standing with applicable
regulatory authorities. Each Foreign Benefit Plan is
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now and has always been operated in full compliance with all applicable
non-United States laws. No Foreign Benefit Plan is under audit, or notice of
audit or investigation; (ii) all employer and employee contributions to each
Foreign Plan required by law or by the terms of such Foreign Plan have been
made, or if applicable, accrued in accordance with normal accounting practices
and a pro rata contribution for the period prior to and including the Effective
Time has been made or accrued; and (iii) the fair market value of the assets of
each funded Foreign Plan, the liability of each insurer of any Foreign Plan
funded through insurance, or the book reserve established by the Company for any
Foreign Plan, together with any accrued contributions, is sufficient to procure
or provide for the benefits determined on any ongoing basis (actual or
contingent) accrued to the Effective Time with respect to all current and former
participants under such Plan according to actuarial assumptions and valuations
most recently used to determine employer contributions to such Plan or benefit
liabilities for such Plan and no transaction contemplated by this Agreement
shall cause such assets or insurance obligations to be less than such benefit
obligations.
Section 3.11. Labor Matters. (i) There are no controversies pending, or,
to the knowledge of the Company, threatened between the Company or any
Subsidiary and any of their respective employees, which controversies have or
could have a Material Adverse Effect, and (ii) neither the Company nor any
Subsidiary is a party to any collective bargaining agreement or other labor
union contract applicable to persons employed by the Company or any Subsidiary
or, to the knowledge of the Company, are there any activities or proceedings of
any labor union to organize any such employees.
Section 3.12. Offer Documents; Schedule 14D-9; Proxy Statement. Neither
the Schedule 14D-9 nor any information supplied by the Company for inclusion in
the Offer Documents shall, at the respective times the Schedule 14D-9, the Offer
Documents or any amendments or supplements thereto are filed with the SEC or are
first published, sent or given to stockholders of the Company or at the
expiration date or the date of purchase, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they are made, not misleading. Neither the proxy
statement to be sent to the stockholders of the Company in connection with the
Stockholders' Meeting (as hereinafter defined) or the information statement to
be sent to such stockholders, as appropriate (such proxy statement or
information statement, as amended or supplemented, being referred to herein as
the "Proxy Statement"), shall, at the date the Proxy Statement (or any amendment
or supplement thereto) is first mailed to stockholders of the Company, at the
time of the Stockholders' Meeting and at the Effective Time, be false or
misleading with respect to any material fact, or omit to state any material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they are made, not
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Stockholders' Meeting which
shall have become false or misleading. The Schedule 14D-9 and the Proxy
Statement shall comply in all material respects as to form with the requirements
of the Exchange Act and the rules and regulations thereunder.
Section 3.13. Taxes. Except as disclosed on Schedule 3.13, the Company and
each of its Subsidiaries, its previously owned subsidiaries and any affiliated
group within the meaning of Section 1504 of the Code of which the Company, its
Subsidiaries or previously owned Subsidiaries is or has been a member (each a
"Taxpayer") has timely filed, or caused to be timely filed all Returns required
to be filed and all such Returns were complete and accurate in all material
respects, and has paid, collected or withheld, or caused to be paid, collected
or withheld, all Taxes required to be paid, collected or withheld, other than
(i) such Taxes for which adequate reserves in the Company's financial statements
have been established or which are being contested in good faith or (ii) such
Taxes that, individually or in the aggregate, would not have a Material Adverse
Effect. Neither the IRS nor any other taxing authority or agency, domestic or
foreign, is now asserting or, to the best knowledge of the Company, threatening
to assert against the Company or any Subsidiary any deficiency or claim for
additional Taxes or interest thereon or penalties in connection therewith that
individually or in the aggregate, would have a Material Adverse Effect. Neither
the Company nor any Subsidiary has made an election under Sections 341(f) or
338(h)(10) of the Code, except as set forth in Schedule 3.13. Except as set
forth on Schedule 3.13, neither the Company nor any of its Subsidiaries is a
party to any Tax sharing agreement or any other agreement with respect to Taxes.
As of the date hereof, the Company has not received
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any notification from the IRS or First Data Corporation, whether formal or
informal, that the IRS has taken or is considering taking a position, which if
upheld, would result in the inability of the Company to use, for accounting
purposes, the deferred tax asset currently reflected in the financial
statements. The Company will take no action with respect to the tax treatment of
such deferred tax asset prior to the consummation of the Offer.
Section 3.14. Brokers. No broker, finder or investment banker (other than
Morgan Stanley) is entitled to any brokerage, finder's or other fee or
commission in connection with the Transactions based upon arrangements made by
or on behalf of the Company. The Company has heretofore furnished to Parent a
complete and correct copy of all agreements between the Company and Morgan
Stanley pursuant to which such firm would be entitled to any payment relating to
the Transactions.
Section 3.15. Certain Contracts. The contracts listed on Schedule 3.15
between the Company and First Data Corporation or its Affiliates, and the agent
agreement between the Company (as assignee) and Banco Nacional de Mexico, S.N.C.
("Banamex") are valid, binding and legal obligations of the parties, enforceable
in accordance with their respective terms, and are in full force and effect.
There has been no event and there are no circumstances constituting, and the
execution, delivery and performance of this Agreement and the consummation of
the Transactions will not (i) constitute a breach of or an event of default (or
an event which with notice or lapse of time or both would become such a default)
or (ii) confer upon First Data Corporation or Banamex, as the case may be, any
right of termination, amendment, acceleration, cancellation or withholding of
performance, under such agreements.
Section 3.16. Real Property and Leases. All leases of real property leased
for the use or benefit of the Company or any Subsidiary to which the Company or
any Subsidiary is a party requiring rental payments in excess of $100,000 during
any calendar year are in full force and effect, and there exists no default
under any such lease by the Company or any Subsidiary, nor any event which with
notice or lapse of time or both would constitute a default hereunder by the
Company or any Subsidiary, except as would not, individually or in the
aggregate, have a Material Adverse Effect.
Section 3.17. Trademarks, Patents, Copyrights and Intellectual
Property. (a) The Company and the Subsidiaries own or possess adequate licenses
or other valid rights to use all patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, copyrights, service marks, trade
secrets, applications for trademarks and for service marks, know-how and other
proprietary rights and information used or held for use in connection with the
business of the Company and the Subsidiaries as currently conducted or as
contemplated to be conducted, and the Company is unaware of any assertion or
claim challenging the validity of any of the foregoing which would, individually
or in the aggregate, have a Material Adverse Effect. To the knowledge of the
Company, the conduct of the business of the Company and the Subsidiaries as
currently conducted and as contemplated to be conducted does not conflict in any
way with, violate or infringe upon, any patent, patent right, license,
trademark, trademark right, trade name, trade name right, service mark,
copyright, trade secret or other intellectual property of any third party that
would, individually or in the aggregate, have a Material Adverse Effect. To the
knowledge of the Company, neither it nor any Subsidiary has licensed or
otherwise permitted the use by any third party of any proprietary information on
terms or in a manner that would, individually or in the aggregate, have a
Material Adverse Effect.
(b) Schedule 3.17(b) sets forth a complete list of each material patent,
trademark or service mark registration, copyright registration and application
therefor, and a complete list of all material software (including any software
being developed by or for the Company) owned, used, licensed, or assigned by or
to the Company which is used in or is reasonably necessary to conduct the
business and operations of the Company and its Subsidiaries ("Intellectual
Property").
(c) Except as set forth on Schedule 3.17(c) and as would not, individually
or in the aggregate, have a Material Adverse Effect:
(i) The Company or a Subsidiary is the sole and exclusive owner of, or
has the unrestricted right to use, any and all Intellectual Property and
all items of Intellectual Property are valid and subsisting and
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Schedule 3.17(b) identifies the owner, licensor and licensee of each item
of Intellectual Property, as applicable; and
(ii) The use, licensing or sale by or to the Company or its
Subsidiaries of any of the Intellectual Property does not require the
acquiescence, agreement or consent of any third party. In addition, to the
Company's knowledge, the Intellectual Property and the products and
services of the Company and its Subsidiaries are not subject to a challenge
or claim of infringement, interference or unfair competition or other claim
and the Intellectual Property is not being infringed upon or violated by
any third party.
Section 3.18. Environmental Matters. To the knowledge of the Company or as
would not, individually or in the aggregate, have a Material Adverse Effect: (i)
the Company and its Subsidiaries have not violated and are not in violation of
any Environmental Law; (ii) none of the properties owned or leased by the
Company or any Subsidiary (including, without limitation, soils and surface and
ground waters) are contaminated with any Hazardous Substance; (iii) the Company
and its Subsidiaries are not liable for any off-site contamination; (iv) the
Company and its Subsidiaries are not liable under any Environmental Law
(including, without limitation, pending or threatened liens); (v) the Company
and its Subsidiaries have all permits, licenses and other authorizations
required under any Environmental Law ("Environmental Permits"); and (vi) the
Company and its Subsidiaries are in compliance with their Environmental Permits.
Section 3.19. Statute Takeover Statutes. The Board of Directors of the
Company has approved the Merger and any related transactions, and, to the
knowledge of the Company, no provision of any Takeover Statute will prevent,
impair, impede or prevent, any Transactions. Section 203 of Delaware Law is and
shall be inapplicable to the Merger, the other Transactions and this Agreement.
Section 3.20. Insurance. Schedule 3.20 contains a description of all
policies of fire, liability, workers' compensation and other forms of insurance
providing insurance coverage to or for the Company or its Subsidiaries
(including any such policies which name the Company or its Subsidiaries as a
loss payee or pursuant to which such party otherwise has rights). The Company
and/or its Subsidiaries is a named insured under such policies owned by them,
all premiums with respect thereto have been paid when due and no notice of
cancellation or termination has been received with respect to any such policy.
In the three year period ending on the date hereof, neither the Company nor its
Subsidiaries has received any written notice from, or on behalf of, any
insurance carrier relating to or involving an increase in insurance rates
(except to the extent that insurance risks may be increased for similarly
situated risks) or non-renewal of a policy, or requiring or suggesting material
alternation of any of the Company's or its Subsidiaries' assets, purchase of
material addition equipment or material modification of any of the Company's or
any of its Subsidiaries' methods of doing business. Neither the Company nor any
of its Subsidiaries has made any material claim for reimbursement from its
insurance carriers (other than health insurance carriers) since December 11,
1996.
Section 3.21. Agents. Part I of Schedule 3.21 sets forth the five largest
money order agents, the fifteen largest wire transfer agents by send transaction
volume and the five largest wire transfer agents by receive transaction volume
of the Company and its Subsidiaries (collectively, the "Agents"), in each case
during the fiscal year ended December 31, 1997. Except as described in Part II
of Schedule 3.21, with respect to any Agent on the date hereof, (i) no Agent of
the Company or any Subsidiary has canceled or otherwise terminated, or
threatened in writing to cancel or otherwise terminate, its relationship with
the Company or any Subsidiary or has during the twelve months period ending on
the date hereof, decreased materially or limited materially, or threatened to
decrease materially or limit materially, its services to the Company or any
Subsidiary or its usage or purchase of the services of the Company and its
Subsidiaries, and the Company has no knowledge of any material breach by any
Agent of its agency agreements with the Company or any Subsidiary; and (ii)
there has been no event and there are no circumstances constituting an event,
and the execution, delivery and performance of this Agreement and the
consummation of the Transactions will not (x) constitute a breach or an event of
default (or an event which with notice, lapse of time or both, would become such
a default) or (y) confer upon any such Agent any right of termination,
amendment, acceleration, cancellation or withholding of services or payments.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby, jointly and severally, represent and warrant
to the Company that:
Section 4.01. Corporate Organization. Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be so organized, existing or in good standing or to have such power, authority
and governmental approvals would not, individually or in the aggregate, have a
material adverse effect on the ability of Parent or Purchaser to perform their
obligations hereunder, or prevent or materially delay the consummation of the
Transactions.
Section 4.02. Authority Relative to this Agreement. Each of Parent and
Purchaser has all necessary corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by Parent and
Purchaser and the consummation by Parent and Purchaser of the Transactions have
been duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Parent or Purchaser are necessary to
authorize this Agreement or to consummate the Transactions (other than, with
respect to the Merger, the filing and recordation of appropriate merger
documents as required by Delaware Law). This Agreement have been duly and
validly executed and delivered by Parent and Purchaser and, assuming the due
authorization, execution and delivery by the Company, constitutes legal, valid
and binding obligations of each of Parent and Purchaser enforceable against each
of Parent and Purchaser in accordance with its terms.
Section 4.03. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Parent and Purchaser do not, and the
performance of this Agreement by Parent and Purchaser will not, (i) conflict
with or violate the Certificate of Incorporation or By-laws of either Parent or
Purchaser, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Parent or Purchaser or by which any property or
asset of either of them is bound or affected, or (iii) result in any breach of
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of Parent or Purchaser pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Parent or Purchaser
is a party or by which Parent or Purchaser or any property or asset of either of
them is bound or affected, except for any such violations, breaches, defaults or
other occurrences which would not, individually or in the aggregate, have a
material adverse effect on the ability of Parent or Purchaser to perform their
obligations hereunder, or prevent or materially delay the consummation of the
Transactions.
(b) The execution and delivery of this Agreement by Parent and Purchaser do
not, and the performance of this Agreement by Parent and Purchaser will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or foreign,
except (i) for applicable requirements, if any, of the Exchange Act, Blue Sky
Laws and state takeover laws, the HSR Act, and filing and recordation of
appropriate merger documents as required by Delaware Law, (ii) requirements of
state and foreign banking currency or other regulatory authorities (all of which
requirements are set forth in Schedule 3.05(b)) and (iii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not, individually or in the aggregate, have a
material adverse effect on the ability of Parent or Purchaser to perform their
obligations hereunder, or prevent or materially delay the consummation of the
Transactions.
Section 4.04. Financing. Parent has existing commitments from responsible
financial institutions (true and correct copies of which have been provided to
the Company), to enable it to borrow sufficient funds to permit Purchaser to
acquire all the outstanding Shares in the Offer and the Merger.
Section 4.05. Offer Documents; Proxy Statement. The Offer Documents will
not, at the time the Offer Documents are filed with the SEC or are first
published, sent or given to stockholders of the Company, as the
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case may be, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which they
are made, not misleading. The information supplied by Parent for inclusion in
the Proxy Statement will not, on the date the Proxy Statement (or any amendment
or supplement thereto) is first mailed to stockholders of the Company, at the
time of the Stockholders' Meeting and at the Effective Time, contain any
statement which, at such time and in light of the circumstances under which it
is made, is false or misleading with respect to any material fact, or omits to
state any material fact required to be stated therein or necessary in order to
make the statements therein not false or misleading or necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Stockholders' Meeting which shall have become false or
misleading. Notwithstanding the foregoing, Parent and Purchaser make no
representation or warranty with respect to any information supplied by the
Company or any of its representatives which is contained in any of the foregoing
documents or the Offer Documents. The Offer Documents shall comply in all
material respects as to form with the requirements of the Exchange Act and the
rules and regulations thereunder.
Section 4.06. Brokers. No broker, finder or investment banker (other than
Salomon Smith Barney) is entitled to any brokerage, finder's or other fee or
commission in connection with the Transactions based upon arrangements made by
or on behalf of Parent or Purchaser.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.01. Conduct of Business by the Company Pending the
Merger. Except as contemplated by this Agreement, neither the Company nor any
Subsidiary shall, between the date of this Agreement and the Effective Time,
directly or indirectly do, or propose to do, any of the following without the
prior written consent of Parent:
(a) amend or otherwise change its Certificate of Incorporation or
By-laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of, (i) any
shares of capital stock of any class of the Company or any Subsidiary, or
any options, warrants, convertible securities or other rights of any kind
to acquire any shares of such capital stock, or any other ownership
interest (including, without limitation, any phantom interest), of the
Company or any Subsidiary (except for the issuance of a maximum of
1,180,266 Shares issuable pursuant to employee stock options outstanding on
the date hereof) or (ii) any assets of the Company or any Subsidiary except
in the ordinary course of business consistent with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) form any new Subsidiaries or implement the formation of a holding
company or expend any funds in preparation for or implement any corporate
restructuring, including, but not limited to the formation of a holding
company or the merger of any Subsidiary with and into the Company;
(f) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any corporation,
partnership, other business organization or any division thereof or any
material amount of assets; (ii) except for borrowings under existing credit
facilities in the ordinary course of business, incur any indebtedness for
borrowed money or issue any debt securities or assume, guarantee or
endorse, or otherwise as an accommodation become responsible for, the
obligations of any person, or (iii) except as permitted pursuant to
paragraph (j) below or the posting of letters of credit required by
licensing or regulatory authorities in the ordinary course of business,
make any loans or advances;
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(g) authorize or make capital expenditures in excess of the amounts
set forth on Schedule 5.01(g); provided, however, that (i) before making
any expenditures for the Coleman Bennet Multi-Currency Project, the Company
will involve Purchaser in the selection of a consultant and will not expend
in excess of $5,500,000 for a systems software package or $150,000 in
consulting fees payable to Coleman Bennett, without the consent of
Purchaser, which consent will not be unreasonably withheld or delayed, (ii)
the Company will not make any expenditures for new software or hardware for
the Future System/Year 2000 Project prior to June 1, 1998, but the Company
may incur consulting and similar fees not to exceed $500,000 in aggregate
prior to such date, and (iii) the Company will not make any capital
expenditures other than as set forth in clauses (i) and (ii) above in
excess of $4,000,000 in the aggregate without the prior consent of the
Purchaser, which consent will not be unreasonably withheld or delayed;
(h) other than as set forth in Annex B, increase the compensation
payable or to become payable to its officers or employees, except for
increases in accordance with past practices in salaries or wages of
employees of the Company or any Subsidiary who are not officers of the
Company, or, other than in accordance with existing policies, grant any
severance or termination pay to, or enter into any employment or severance
agreement with any director, officer or other employee of the Company or
any Subsidiary, or establish, adopt, enter into or amend any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee;
(i) other than as required by generally accepted accounting
principles, and except for the reclassification of the financial paper
outstanding from fiduciary liability to operating liability on the balance
sheet, make any change to its accounting policies or procedures;
(j) (i) make any advances to agents or enter into any agreement with
any agent that guarantees or assures payment of minimum aggregate
commissions or which grants any signing or other bonus in an amount in
excess of $1,500,000 in the aggregate; or (ii) enter into any agreement
which would increase the period of time during which any agent retains the
proceeds of money order or wire transfer sales prior to remitting such
proceeds to the Company; provided, however, notwithstanding any other
provision of this Section 5.01, the Company may enter into a contract with
American Express Travel Related Services, Inc. ("American Express")
containing terms substantially similar to those in the draft contract,
version 8, previously provided to the Purchaser if such contract does not
contain any provision that would confer upon American Express any right of
termination, amendment, acceleration, cancellation or withholding of
services or payments upon the consummation of the Offer, the Merger or any
other Transaction;
(k) enter into or amend any agreement with any agent, with respect to
which the credit exposure (measured as actual agent remittances due on any
one Business Day) is greater than $500,000;
(l) establish any new lines of credit or other credit facilities or
replace existing credit facilities with facilities that have terms that are
less favorable to the Company;
(m) pay, settle, discharge or enter into any agreement for the
settlement or compromise of any pending or threatened litigation requiring
payment(s) by the Company or any Subsidiary in excess of $1,000,000 in the
aggregate;
(n) agree in writing, or otherwise, to take any of the foregoing
actions or to take any other action which would make any representation or
warranty of the Company in this Agreement untrue or incorrect in any
material respect; or
(o) make any tax election or settle or compromise any material
federal, state local or foreign income tax liability.
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Section 5.02. Additional Covenants. After the date hereof and prior to the
Effective Time or the earlier termination of this Agreement, unless Parent shall
otherwise agree in writing, the Company covenants and agrees that it shall, and
cause each of its Subsidiaries to:
(a) Conduct their respective businesses in the ordinary and usual
course of business consistent with past practice;
(b) Confer with Parent's designated representatives on a regular and
frequent basis regarding operational matters of a material nature and the
general status of the ongoing business of the Company;
(c) Promptly notify Parent of any significant changes in the business,
financial condition or results of operation of the Company or its
Subsidiaries taken as a whole;
(d) Promptly notify Parent of any judgment, decree, injunction, rule,
notice or order of any Governmental Authority which is reasonably likely to
materially restrict the business of the Company and its Subsidiaries as
currently conducted or is reasonably likely to have a Material Adverse
Effect;
(e) Maintain or renew with financially responsible insurance
companies, (i) insurance on its tangible assets and its business in such
amounts and against such risks and losses as are consistent with past
practice (ii) the Company's existing directors and officers indemnification
insurance; and
(f) Use all reasonable best efforts to preserve the business,
reputation and prospects of the Company and its Subsidiaries and preserve
the current relationships of the Company and its Subsidiaries with
customers, employees, agents, suppliers and other persons with which the
company or any Subsidiary has business relations.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01. Stockholders' Meeting. (a) If required by applicable law in
order to consummate the Merger, the Company, acting through the Board, shall, in
accordance with applicable law and the Company's Certificate of Incorporation
and By-laws, (i) duly call, give notice of, convene and hold an annual or
special meeting of its stockholders as soon as practicable following
consummation of the Offer for the purpose of considering and taking action on
this Agreement and the transactions contemplated hereby (the "Stockholders'
Meeting") and (ii) subject to its fiduciary duties under applicable law after
receiving the advice of independent counsel, (A) include in the Proxy Statement
the recommendation of the Board that the stockholders of the Company approve and
adopt this Agreement and the transactions contemplated hereby and (B) use all
reasonable efforts to obtain such approval and adoption. At the Stockholders'
Meeting, Parent and Purchaser shall cause all Shares then owned by them and
their Subsidiaries to be voted in favor of the approval and adoption of this
Agreement and the transactions contemplated hereby.
(b) Notwithstanding the foregoing, in the event that Purchaser shall
acquire at least 90 percent of the then outstanding Shares, the parties hereto
agree, at the request of Purchaser, subject to Article VII, to take all
necessary and appropriate action to cause the Merger to become effective, in
accordance with Section 253 of Delaware Law, as soon as reasonably practicable
after such acquisition, without a meeting of the stockholders of the Company.
Section 6.02. Proxy Statement. If required by applicable law, as soon as
practicable following consummation of the Offer, the Company shall file the
Proxy Statement with the SEC under the Exchange Act, and shall use all
reasonable efforts to have the Proxy Statement cleared by the SEC. Parent,
Purchaser and the Company shall cooperate with each other in the preparation of
the Proxy Statement, and the Company shall notify Parent of the receipt of any
comments of the SEC with respect to the Proxy Statement and of any requests by
the SEC for any amendment or supplement thereto or for additional information
and shall provide to Parent promptly copies of all correspondence between the
Company or any representative of the Company and the SEC. The Company shall (i)
give Parent and its counsel the opportunity to review the Proxy Statement prior
to its being filed with the SEC; (ii) give Parent and its counsel the
opportunity to
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review all amendments and supplements to the Proxy Statement and all responses
to requests for additional information and replies to comments prior to their
being filed with, or sent to, the SEC; and (iii) consider in good faith the
comments and information provided by Parent, Purchaser and their counsel with
respect thereto. Each of the Company, Parent and Purchaser agrees to use all
reasonable efforts, after consultation with the other parties hereto, to respond
promptly to all such comments of and requests by the SEC and to cause the Proxy
Statement and all required amendments and supplements thereto to be mailed to
the holders of Shares entitled to vote at the Stockholders' Meeting at the
earliest practicable time.
Section 6.03. Company Board Representation; Section 14(f). (a) Promptly
upon the purchase by Purchaser of Shares pursuant to the Offer, and from time to
time thereafter, in addition to its rights under applicable law and the
Company's Certificate of Incorporation and By-Laws, Purchaser shall be entitled
to designate up to such number of directors, rounded up to the next whole
number, on the Board and the boards of each of its Subsidiaries as shall give
Purchaser representation on the Board and the boards of each of its Subsidiaries
equal to the product of the total number of directors on the Board and the
boards of each of its Subsidiaries (giving effect to the directors elected
pursuant to this sentence) multiplied by the percentage that the aggregate
number of Shares beneficially owned by Purchaser or any Affiliate of Purchaser
following such purchase bears to the total number of Shares then outstanding,
and the Company shall, at such time, promptly take all actions necessary to
cause Purchaser's designees to be elected as directors of the Company and each
of its Subsidiaries, including increasing the size of the Board and the boards
of each of its Subsidiaries or securing the resignations of incumbent directors
or both. At such times, the Company shall use all reasonable efforts to cause
persons designated by Purchaser to constitute the same percentage as persons
designated by Purchaser shall constitute of the Board of each committee of the
Board to the extent permitted by applicable law.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under this Section 6.03 and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 to fulfill such
obligations. Parent or Purchaser shall supply to the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and Affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the election of designees of Purchaser pursuant to this
Section 6.03, prior to the Effective Time, any amendment of this Agreement or
the Certificate of Incorporation or By-laws of the Company, any termination of
this Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or Purchaser or
waiver of any of the Company's rights hereunder shall require the concurrence of
a majority of the directors of the Company then in office who neither were
designated by Purchaser nor are employees of the Company.
Section 6.04. Access to Information; Confidentiality. (a) From the date
hereof to the Effective Time, the Company shall, and shall cause the
Subsidiaries and the officers, directors, employees, auditors and agents of the
Company and the Subsidiaries to, afford the officers, employees and agents of
Parent and Purchaser and persons providing or committing to provide Parent or
Purchaser with financing for the Transactions reasonable access at all
reasonable times to the officers, employees, agents, properties, offices, plants
and other facilities, books and records of the Company and each Subsidiary, and
shall furnish Parent and Purchaser and persons providing or committing to
provide Parent or Purchaser with financing for the Transactions with all
financial, operating and other data and information as Parent or Purchaser,
through its officers, employees or agents, may reasonably request.
(b) The Company, Parent and Purchaser each agree to promptly advise each
other of any information required to update or correct any documents filed,
published or issued by such parties pursuant to the Offer or pursuant to Section
6.01 or 6.02
(c) All information obtained by Parent or Purchaser pursuant to this
Section 6.04 shall be kept confidential in accordance with the confidentiality
agreement, dated February 11, 1998 (the "Confidentiality Agreement"), between
Parent and the Company.
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Section 6.05. No Solicitation of Transactions. (a) The Company shall, and
shall direct and use reasonable efforts to cause its officers, directors,
employees, representatives and agents to, immediately cease any discussions or
negotiations with any parties that may be ongoing with respect to an Acquisition
Proposal (as hereinafter defined). The Company shall not, nor shall it permit
any of its Subsidiaries to, nor shall it authorize or permit any of its
officers, directors or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by it or any of its
Subsidiaries to, directly or indirectly, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other action designed
or reasonably likely to facilitate, any inquiries or the making of any proposal
which constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal or (ii) participate in any discussions or negotiations regarding any
Acquisition Proposal; provided, however, that if, at any time prior to the
consummation of the Offer, the Board determines in good faith, after receipt of
advice from its outside counsel, that it is necessary to do so in order to
comply with its fiduciary duties to the Company's stockholders under applicable
law, the Company may, in response to an Acquisition Proposal which was not
solicited by or on behalf of the Company subsequent to the date hereof, and
subject to compliance with Section 6.05(b) and (c), (x) furnish information with
respect to the Company to any person pursuant to a customary confidentiality
agreement (as determined by the Company after receipt of advice from its outside
counsel) and (y) participate in negotiations regarding such Acquisition
Proposal. "Acquisition Proposal" means (i) any inquiry, proposal or offer from
any person relating to any direct or indirect acquisition or purchase of 15% or
more of the assets of the Company and its Subsidiaries or 15% or more of any
class of equity securities of the Company or any of its Subsidiaries, (ii) any
tender offer or exchange offer that if consummated would result in any person
beneficially owning 15% or more of any class of equity securities of the Company
or any of its Subsidiaries, (iii) any merger, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any of its Subsidiaries, other than the
Transactions, or (iv) any other transaction that could reasonably be expected to
prevent or materially delay the consummation of the Offer or the Merger.
(b) Except as set forth in this Section 6.05, neither the Board nor any
committee thereof shall (i) withdraw or modify, or propose publicly to withdraw
or modify, in any manner adverse to Parent or Purchaser, the approval or
recommendation by such Board or committee of the Offer, the Merger, the other
Transactions or this Agreement, (ii) approve or recommend, or propose publicly
to approve or recommend, any Acquisition Proposal or (iii) cause the Company to
enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement related to any Acquisition Proposal with any Person
other than Parent or its Affiliates. Notwithstanding the foregoing, in the event
that prior to the Offer, the Board determines in good faith, after receipt of
advice from outside counsel, that it is necessary to do in order to comply with
its fiduciary duties to the Company's stockholders under applicable law, the
Board may (A) withdraw or modify its approval or recommendation of the Offer,
the Merger, the other Transactions or this Agreement, or (B) approve or
recommend a Superior Proposal (as hereinafter defined ) or terminate this
Agreement and, if it so chooses, cause the Company to enter into any agreement
with respect to a Superior Proposal. For purposes of this Agreement, a "Superior
Proposal" means any bona fide proposal made by a third party to acquire,
directly or indirectly, for consideration consisting of cash and/or securities,
more than 50% of the combined voting power of the shares of the Company's Common
Stock then outstanding or all or substantially all of the assets of the Company
and its Affiliates on terms which the Board determines in its good faith
judgment to be more favorable to the Company's stockholders than the Offer and
the Merger and for which financing is committed or, in the good faith judgment
of the Board, is reasonably likely to be timely obtained, and also taking into
account the likelihood of any prohibition of, or delay in closing, such Superior
Proposal under applicable antitrust law.
(c) In addition to the obligations of the Company set forth in paragraphs
(a) and (b) of this Section 6.05, if the Company intends to withdraw or amend
its recommendation of the Offer in accordance with this Section 6.05, it shall
give the Purchaser 48 hours advance written notice, such notice to specify the
identity of any third party that has made an Acquisition Proposal and the
material terms of such Acquisition Proposal. Following the delivery of such
notice, the Company will promptly inform the Purchaser of material developments
with respect to such Acquisition Proposal.
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(d) Nothing contained in this Section 6.05 shall prohibit the Company from
taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders.
Section 6.06. Employee Benefits Matters. Annex B hereto sets forth certain
agreements among the parties hereto with respect to the Plans and other employee
benefits matters.
Section 6.07. Directors' and Officers' Indemnification and Insurance. (a)
The Certificate of Incorporation of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification than are set forth
in Article 8, of the Certificate of Incorporation of the Company, which
provisions shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would materially and
adversely affect the rights thereunder of individuals who at the Effective Time
were directors, officers, employees, fiduciaries or agents of the Company,
unless such modification shall be required by law.
(b) Regardless of whether the Merger becomes effective, the Company shall
indemnify and hold harmless, and, after the Effective Time, the Surviving
Corporation shall, indemnify and hold harmless, each present and former
director, officer, employee, fiduciary and agent of the Company and each
Subsidiary (collectively, the "Indemnified Parties") to the fullest extent
permitted under the Certificate of Incorporation and the By-laws of the Company
for a period of six years after the date hereof.
(c) Company, Parent and the Surviving Corporation shall use their
respective reasonable best efforts to maintain in effect for six years from the
Effective Time, if available, the current directors' and officers' liability
insurance policies maintained by the Company (provided that Parent and the
Surviving Corporation may substitute therefor policies of at least the same
coverage containing terms and conditions which are not materially less
favorable) with respect to matters occurring prior to the Effective Time;
provided, however, that if the existing policies expire, are terminated or
canceled during such period Parent or the Surviving Corporation will use its
reasonable best efforts to obtain substantially similar policies.
Notwithstanding the foregoing, in no event shall Parent or the Surviving
Corporation be required to expend pursuant to this Section 6.07(c) more than an
amount per year equal to 200% of current annual premiums paid by the Company for
such insurance (which premiums the Company represents and warrants to be
$183,352 in the aggregate).
Section 6.08. Further Action; Reasonable Best Efforts. Upon the terms and
subject to the conditions hereof, each of the parties hereto shall (i) make
promptly its respective filings, and thereafter make any other required
submissions, under the HSR Act with respect to the Transactions and (ii) use its
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
Transactions, including, without limitation, using all reasonable efforts to
obtain all licenses, permits, consents, approvals, authorizations,
qualifications and orders of governmental authorities and parties to contracts
with the Company and the Subsidiaries as are necessary for the consummation of
the Transactions and to fulfill the conditions to the Offer and the Merger. In
case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall use their reasonable best
efforts to take all such action.
Section 6.09. Public Announcements. Parent and the Company shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to this Agreement, any Transaction or the Company's
earnings for the first quarter of 1998, and shall not issue any such press
release or make any such public statement without the prior consent of the other
parties, except and until as may be required by law or any listing agreement
with a national securities exchange to which Parent or the Company is a party.
Section 6.10. Confidentiality Agreement. The Company hereby waives the
provisions of the Confidentiality Agreement as and to the extent necessary to
permit the consummation of each Transaction. Upon the acceptance for payment of
Shares pursuant to the Offer, the Confidentiality Agreement shall be deemed to
have terminated without further action by the parties thereto.
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Section 6.11. SEC and Stockholder Filings. The Company shall deliver to
Parent in accordance with Section 9.02 a copy of all material public reports and
materials as and when it sends the same to its stockholders, the SEC or any
state or foreign securities commission.
Section 6.12. Takeover Statutes. If any "fair price" "moratorium,"
"control share acquisition" or other similar antitakeover statute or regulation
enacted under state or federal laws in the United States (each a "Takeover
Statute"), including, without limitation, Section 203 of the Delaware Code, is
or may become applicable to the Offer, the Merger, this Agreement, or any
Transactions, the Company and the members of its Board of Directors (or any
required and duly constituted Committee thereof) will grant such approvals, and
take such actions as are necessary so that the transactions contemplated by this
Agreement may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize the effects of
any Takeover Statute on any of the transactions contemplated hereby.
Section 6.13. Certain Actions. Following the consummation of the Offer but
prior to the Effective Time, (i) the Company agrees, if requested by the
Purchaser, to issue Shares to the Purchaser representing a maximum of 19.9% of
the Shares outstanding immediately prior to such issuance and (ii) the Company
shall terminate the Credit Agreement between the Company and Northern Trust.
ARTICLE VII
CONDITIONS TO THE MERGER
Section 7.01. Conditions to the Merger. The respective obligations of each
party to effect the Merger shall be subject to the satisfaction at or prior to
the Effective Time of the following conditions:
(a) Stockholder Approval. This Agreement and the transactions
contemplated hereby shall have been approved and adopted by the affirmative
vote of the stockholders of the Company to the extent required by Delaware
Law;
(b) No Order. No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, executive
order, decree, injunction or other order (whether temporary, preliminary or
permanent) which is then in effect and has the effect of making the
acquisition of Shares by Parent or Purchaser or any Affiliate of either of
them illegal or otherwise preventing consummation of the Transactions; and
(c) Offer. Purchaser or its permitted assignee shall have purchased
all Shares validly tendered and not withdrawn pursuant to the Offer;
provided, however, that this condition shall not be applicable to the
obligations of Parent or Purchaser if Purchaser fails to purchase any
Shares validly tendered and not withdrawn pursuant to the Offer in breach
of this Agreement or the terms of the Offer.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.01. Termination. This Agreement may be terminated and the Merger
and the other Transactions may be abandoned at any time prior to the Effective
Time, notwithstanding any requisite approval and adoption of this Agreement and
the transactions contemplated hereby by the stockholders of the Company:
(a) By mutual written consent duly authorized by the Boards of
Directors of Parent, Purchaser and the Company; or
(b) By either Parent, Purchaser or the Company if (i) the Offer is not
completed on or before August 30, 1998; provided, however, that the right
to terminate this Agreement under this clause (i) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure to complete the Offer on or
before such date; (ii) the Effective Time shall not have occurred on or
before October 30, 1998; provided, however, that the right to terminate
this
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<PAGE> 27
Agreement under this clause (ii) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause
of, or resulted in, the failure of the Effective Time to occur on or before
such date; or (iii) any Governmental Authority shall have enacted or
promulgated any law, rule or regulation or shall have issued an order,
decree, ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Offer or the Merger or making the acquisition of
Shares by Parent or Purchaser, or any Affiliate thereof, illegal, and such
law, rule, regulation, order, decree, ruling or other action shall remain
in effect or have become final and nonappealable;
(c) By Parent if (i) due to an occurrence or circumstance that would
result in a failure to satisfy any condition set forth in Annex A hereto or
the continuing existence of those conditions set forth in clauses (a)
through (i) in Annex A hereto, Purchaser shall have (A) failed to commence
the Offer within five Business Days following the date of this Agreement,
(B) terminated the Offer without having accepted any Shares for payment
thereunder or (C) failed to pay for Shares pursuant to the Offer within 75
calendar days following the commencement of the Offer, unless such failure
to pay for Shares shall have been caused by or resulted from the failure of
Parent or Purchaser to perform in any material respect any material
covenant or agreement of either of them contained in this Agreement or the
material breach by Parent or Purchaser of any material representation or
warranty of either of them contained in this Agreement; or (ii) prior to
the purchase of Shares pursuant to the Offer, the Board or any committee
thereof shall have withdrawn or modified in a manner adverse to Purchaser
or Parent its approval or recommendation of the Offer, this Agreement, the
Merger or any other Transaction or shall have taken any action to
facilitate (other than as contemplated by this Agreement), approve or
recommend any Acquisition Proposal; or
(d) By the Company, upon approval of the Board, if (i) Purchaser shall
have (A) failed to commence the Offer within five Business Days following
the date of this Agreement, (B) terminated the Offer without having
accepted any Shares for payment thereunder or (C) failed to pay for Shares
pursuant to the Offer within 75 calendar days following the commencement of
the Offer, unless such failure to pay for Shares shall have been caused by
or resulted from the failure of the Company to perform in any material
respect any material covenant or agreement of it contained in this
Agreement or the material breach by the Company of any material
representation or warranty of it contained in this Agreement; or (ii) prior
to the purchase of Shares pursuant to the Offer, the Board shall have
withdrawn or modified in a manner adverse to Purchaser or Parent its
approval or recommendation of the Offer, this Agreement, the Merger or any
other Transaction in order to enter into an agreement for any Acquisition
Proposal.
Section 8.02. Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.01, this Agreement shall forthwith become
void, and there shall be no liability on the part of any party hereto, except
(i) as set forth in Sections 6.04, 8.03 and 9.01 and (ii) nothing herein
(including the expiration of representations and warranties in accordance with
Section 9.01) shall relieve any party from liability for any breach hereof.
Section 8.03. Fees. (a) In the event that (x) this Agreement is terminated
pursuant to Section 8.01(c)(ii) or Section 8.01(d)(ii), or (y) this Agreement is
terminated pursuant to Section 8.01(b) and (A) an Acquisition Proposal shall
have been publicly disclosed prior to the date of such termination and (B) a
Superior Proposal shall have been consummated on or prior to the first
anniversary of such termination; then the Company shall pay Parent promptly (but
in no event later than three Business Days after such termination shall have
occurred or such Superior Proposal shall have been consummated, as the case may
be) a fee of $10 million (the "Fee"), which amount shall be payable in
immediately available funds.
(b) Except as set forth in this Section 8.03, all costs and expenses
incurred in connection with this Agreement and the Transactions shall be paid by
the party incurring such expenses, whether or not any Transaction is
consummated.
(c) In the event that the Company shall fail to pay the Fee when due, the
Company shall reimburse Parent and the Purchaser for the costs and expenses
actually incurred or accrued by Parent and Purchaser (including, without
limitation, fees and expenses of counsel) in connection with the collection
under and
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enforcement of this Section 8.03, together with interest on such unpaid Fee,
commencing on the date that the Fee became due, at a rate equal to the rate of
interest publicly announced by Citibank, N.A., from time to time, in the City of
New York, as such bank's Base Rate plus 2%.
Section 8.04. Amendment. Subject to Section 6.03, this Agreement may be
amended by the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective Time;
provided, however, that after the approval and adoption of this Agreement and
the transactions contemplated hereby by the stockholders of the Company, no
amendment may be made which would reduce the amount or change the type of
consideration into which each Share shall be converted upon consummation of the
Merger. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
Section 8.05. Waiver. At any time prior to the Effective Time, any party
hereto may (i) extend the time for the performance of any obligation or other
act of any other party hereto, (ii) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any agreement or condition contained herein. Any
such extension or waiver shall be valid only if expressly set forth in an
instrument in writing signed by the party or parties to be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.01, as the case may be, except that the agreements set
forth in Article II and Sections 6.06 and 6.07 shall survive the Effective Time
indefinitely and those set forth in Sections 6.04 and 8.03 shall survive
termination indefinitely.
Section 9.02. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section 9.02):
if to Parent or Purchaser:
Viad Corp
1850 North Central Avenue
Phoenix, Arizona 85077-2212
Attention: Vice President, General Counsel
Fax: (602) 207-5480
with copies to:
Travelers Express Company, Inc.
1550 Utica Avenue South
Minneapolis, Minnesota 55402
Fax: (612) ( 591-3870
Attention: President
Bryan Cave LLP
2800 North Central Avenue
Phoenix, Arizona 85004
Fax: (602) 266-5938
Attention: Frank M. Placenti, Esq.
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if to the Company:
MoneyGram Payment Systems, Inc.
Park 80 West Plaza 1
Saddle Brook, NJ 07663
Fax: (201) 291-3626
Attention: John Fowler
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Fax: (212) 848-7179
Attention: Peter D. Lyons
Section 9.03. Certain Definitions. For purposes of this Agreement, the
term:
(a) "Affiliate" of a specified person means a person who directly or
indirectly through one or more intermediaries controls, is controlled by,
or is under common control with, such specified person;
(b) "Beneficial Owner" with respect to any Shares means a person who
shall be deemed to be the beneficial owner of such Shares (i) which such
person or any of its Affiliates or associates (as such term is defined in
Rule 12b-2 promulgated under the Exchange Act) beneficially owns, directly
or indirectly, (ii) which such person or any of its Affiliates or
associates has, directly or indirectly, (A) the right to acquire (whether
such right is exercisable immediately or subject only to the passage of
time), pursuant to any agreement, arrangement or understanding or upon the
exercise of consideration rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement, arrangement
or understanding or (iii) which are beneficially owned, directly or
indirectly, by any other persons with whom such person or any of its
Affiliates or associates or person with whom such person or any of its
Affiliates or associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any Shares;
(c) "Business Day" means any day on which the principal offices of the
SEC in Washington, D.C. are open to accept filings, or, in the case of
determining a date when any payment is due, any day on which banks are not
required or authorized to close in the City of New York;
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and the regulations, revenue rulings, revenue procedures and announcements
promulgated thereunder. All citations to the Code or to the regulations
promulgated thereunder shall include any amendments or any substitute or
successor provisions thereto.
(e) "Control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
(f) "Environmental Laws" means any federal, state or local law, as in
effect on the date hereof, relating to (A) releases or threatened releases
of Hazardous Substances or materials containing Hazardous Substances; (B)
the manufacture, handling, transport, use, treatment, storage or disposal
of Hazardous Substances or materials containing Hazardous Substances; or
(C) otherwise relating to pollution of the environment or the protection of
human health.
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(g) "Government Authority" means any agency, instrumentality,
department, commission, court, tribunal or board of any government, whether
foreign or domestic and whether national, federal, state, provincial or
local.
(h) "Hazardous Substances" means (A) those substances defined in or
regulated under the following federal statutes and their state
counterparts, as each may be amended from time to time, and all regulations
thereunder; the Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Federal Insecticide, Fungicide, and
Rodenticide Act and the Clean Air Act; (B) petroleum and petroleum products
including crude oil and any fractions thereof; (C) natural gas, synthetic
gas and any mixtures thereof; (D) radon; (E) any substance with respect to
which a federal, state or local agency requires environmental
investigation, monitoring, reporting or remediation.
(i) "Material Adverse Effect" means any change, effect, condition,
event or circumstance that is or is reasonably likely to be materially
adverse to the business, financial condition, assets, properties or results
of operations of the Company and the Subsidiaries, taken as a whole,
including, (x) termination of the Company's Agency Agreement with Banamex
or (y) termination of the Company's agency agreements with agents (other
than American Express Travel Related Services Company, Inc. and Safeway,
Inc.), representing ten percent or more of the aggregate send or receive
transaction volume either sent or received by the Company and its
Subsidiaries during 1997; provided, however, that "Material Adverse Effect"
shall not include any change, effect, condition, event or circumstance
arising out of or attributable to (i) any decrease in the market price of
the Shares (but not any change, effect, condition, event or circumstance
underlying such decrease to the extent that it would otherwise constitute a
Material Adverse Effect), (ii) changes, effects, conditions, events or
circumstances that generally affect the industries in which the Company
operates (including legal and regulatory changes), (iii) general economic
conditions or change, effects, conditions or circumstances affecting the
securities markets generally, (iv) changes arising from the consummation of
the Transactions or the announcement of the execution of this Agreement,
(v) any reduction in the price of services or products offered by the
Company in response to the reduction in price of comparable services or
products offered by a competitor, (vi) any of the items set forth in
Schedule 9.03(e).
(j) "Person" means an individual, corporation, partnership, limited
partnership, syndicate, person (including, without limitation, a "person"
as defined in Section 13(d)(3) of the Exchange Act), trust, association or
entity or government, political subdivision, agency or instrumentality of a
government.
(k) "Returns" shall mean all returns, declarations, reports,
statements, and other documents required to be filed with any government or
taxing authority in respect of Taxes, and the term "Return" shall mean any
one of the foregoing Returns.
(l) "SEC" means the U.S. Securities and Exchange Commission.
(m) "SEC Rules" means any rules, regulations or interpretations of the
SEC or the staff thereof.
(n) "Subsidiary" or "Subsidiaries" of the Company, the Surviving
Corporation, Parent or any other person means an Affiliate controlled by
such person, directly or indirectly, through one or more intermediaries.
(o) "Tax" or "Taxes" shall mean (A) all federal, state and local and
foreign taxes and assessments of any nature whatsoever, based on the laws
and regulations in effect from time to time through the Closing Date,
including, without limitation, all income, profits, franchise, gross
receipts, capital, sales, use, withholding, value added, ad valorem,
transfer, employment, social security, disability, occupation, property,
severance, production, exercise, environmental and other taxes, duties and
other similar governmental charges and assessments imposed by or on behalf
of any government or taxing authority, including all interest, penalties
and additions imposed with respect to such amounts, and (B) any obligations
under any agreements or arrangements with respect to any Taxes described in
clause (A) above.
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Section 9.04. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner materially adverse
to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
Section 9.05. Entire Agreement; Assignment. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes, except as set forth in Sections 6.04 and 6.10, all prior agreements
and undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof. This Agreement shall not be assigned by
operation of law or otherwise, except that Parent and Purchaser may assign all
or any of their rights and obligations hereunder to any wholly-owned Subsidiary
of Parent provided that no such assignment shall relieve the assigning party of
its obligations hereunder if such assignee does not perform such obligations.
Section 9.06. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, other than Section 6.06 and 6.07 (which is intended to be for
the benefit of the persons covered thereby and may be enforced by such persons).
Section 9.07. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined in any Delaware state court.
Section 9.08. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
Section 9.09. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
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<PAGE> 32
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
VIAD CORP
A Delaware Corporation
By /s/ PHILIP W. MILNE
----------------------------------
Name: Philip W. Milne
Title: Authorized Agent; President
and CEO of Travelers Express
Company, Inc.
PINE VALLEY ACQUISITION
CORPORATION
A Delaware Corporation
By /s/ PHILIP W. MILNE
----------------------------------
Name: Philip W. Milne
Title: President and CEO
MONEYGRAM PAYMENT
SYSTEMS, INC.
A Delaware Corporation
By /s/ JAMES F. CALVANO
----------------------------------
Name: James F. Calvano
Title: Chairman and CEO
26
<PAGE> 33
ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or pay for any Shares tendered pursuant to the
Offer, and may terminate or amend the Offer and may postpone the acceptance for
payment of and payment for Shares tendered, if (w) the Minimum Condition shall
not have been satisfied, (x) any applicable waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer,
(y) any Pre-Offer Approval shall not have been obtained, (z) at any time on or
after the date of this Agreement, and prior to the acceptance for payment of
Shares, any of the following conditions shall exist:
(a) there shall be pending before any court any action or proceeding
instituted by any Governmental Authority (i) that is reasonably likely to
prohibit or limit materially the ownership or operation by the Company,
Parent or any of their Subsidiaries, of all or any material portion of the
business or assets of the Company and the Subsidiaries, taken as a whole,
or any material portion of the business or assets of Parent and its
Subsidiaries, taken as a whole, or to compel the Company, Parent or any of
their Subsidiaries to dispose of or hold separate all or any material
portion of the business or assets of the Company and the Subsidiaries,
taken as a whole, or Parent and its Subsidiaries taken as a whole, as a
result of the Transactions; (ii) reasonably likely to impose or confirm
limitations on the ability of Parent or Purchaser to exercise effectively
full rights of ownership of any Shares, including, without limitation, the
right vote any Shares acquired by Purchaser pursuant to the Offer or
otherwise on all matters properly presented to the Company's Stockholders
including, without limitation, the approval and adoption of this Agreement
and the transactions contemplated hereby; or (iii) seeking to require
divestiture by Parent or Purchaser of any Shares;
(b) there shall have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, entered, enforced, promulgated, amended, issued and deemed
applicable to (i) Parent, the Company or any Subsidiary or Affiliate of
Parent or the Company or (ii) any Transaction, by any Governmental
Authority, domestic or foreign, which is reasonably likely to result,
directly or indirectly in any of the consequences referred to in clauses
(i) through (iii) of paragraph (a) above;
(c) there shall have occurred, and be continuing, any change,
condition, event or other development that, individually or in the
aggregate, has a Material Adverse Effect;
(d) any representation or warranty of the Company in this Agreement,
that is qualified by materiality or Material Adverse Effect shall not be
true and correct or, without regard to such qualification, any such
representations or warranties shall not be true and correct so as to in
aggregate have a Material Adverse Effect, or any representation or warranty
not so qualified shall not be true and correct in all material respects, in
each case as if such representation or warranty was made as of such time on
or after the date of this Agreement (except for representations and
warranties made as of a specific date which shall be true and correct as of
such date) or the Company shall not have delivered to Parent a certificate
of the Company to such effect signed by a duly authorized officer thereof
and dated as of the date on which Parent shall first accept Shares for
payment.
(e) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under this
Agreement;
(f) this Agreement shall have been terminated in accordance with its
terms; or
(g) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of or payment
for Shares thereunder.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or may be waived by
A-1
<PAGE> 34
Purchaser or Parent in whole or in part at any time and from time to time in
their sole discretion. The failure by Parent or Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right; the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances; and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
A-2
<PAGE> 35
ANNEX B
AGREEMENT RESPECTING THE PLANS
AND OTHER EMPLOYEE BENEFIT MATTERS
1. IN GENERAL
Parent hereby agrees that for a period of two years immediately following
the Effective Time, it shall, or shall cause the Surviving Corporation and its
Subsidiaries to, continue to maintain employee benefit and welfare plans,
programs, contracts, agreements, severance plans and policies (each referred to,
for purposes of this paragraph, as a "plan"), for the benefit of active
employees of the Company and its Subsidiaries which in the aggregate provide
benefits that are comparable to, and no less favorable than, the benefits
provided to such active employees pursuant to the plans set forth in Sections A,
B and F of Schedule 3.10(a) Part I on the date hereof, or to provide during such
period benefits equivalent to those provided under corresponding plans of
Travelers Group or its Subsidiaries if such benefits are greater. Parent hereby
guarantees the Surviving Corporation's performance of the obligations under this
paragraph.
2. CERTAIN CONTRACTS
Parent and Purchaser hereby agree to honor, without modification, and after
the purchase of Shares pursuant to the Offer, Parent agrees to cause the Company
and its Subsidiaries to honor, all contracts, agreements, arrangements,
policies, plans and commitments of the Company (or any of its Subsidiaries) in
effect as of the date hereof which are applicable to any employee or former
employee or any director or former director of the Company (or any of its
Subsidiaries), including, without limitation, the Company Executive Retention
Plan dated May 13, 1997, as amended on July 8, 1997 and July 21, 1997.
3. CERTAIN PLANS
Parent and Purchaser hereby agree to allow active employees of the Company
to be eligible to participate in incentive compensation plans and stock option
plans of Travelers Group or its Subsidiaries on terms comparable to the terms on
which employees of comparable status and seniority at other comparable
Subsidiaries of Parent participate.
B-1
<PAGE> 1
Exhibit 99(c)(2)
February 11, 1998
Mr. Robert Bohannon
Chief Executive Officer
Viad Corp
1850 North Central Ave.
Phoenix, AZ 85077
CONFIDENTIALITY AGREEMENT
Dear Mr. Bohannon:
In connection with your interest in a potential acquisition transaction
(the "Transaction") involving MoneyGram Payment Systems, Inc. (the "Company"),
you have requested that we or our representatives furnish you or your
representatives with certain information relating to the Company or the
Transaction. All such information (whether written or oral) furnished after the
date hereof by us or our directors, officers, employees, affiliates,
representatives (including, without limitation, financial advisors, attorneys
and accountants) or agents (collectively, "our Representatives") to you or your
directors, officers, employees, affiliates, representatives (including, without
limitation, financial advisors, attorneys and accountants) or agents or your
potential sources of financing for the Transaction (collectively, "your
Representatives") and all analyses, compilations, forecasts, studies or other
documents prepared by you or your Representatives in connection with your or
their review of, or your interest in, the Transaction which contain or reflect
any such information is hereinafter referred to as the "Information." The term
Information does not, however, include information which (i) is or becomes
publicly available other than as a result of a disclosure by you or your
Representatives; (ii) is in the possession of you or your Representative prior
to the date hereof, and was obtained from a source, or becomes available to you
or your Representatives from a source (other than us or our Representatives)
which is in either case, to the best of your knowledge or your Representatives'
knowledge, is, or was at the time, not prohibited from disclosing such
information to you or your Representative, as the case may be, by a legal,
contractual or fiduciary obligation to us; or (iii) is independently developed
by you or your Representatives.
Accordingly, you hereby agree that:
1. You and your Representatives (i) will keep the Information confidential
and will not (except as otherwise required by law, regulation or legal process,
and only after compliance with paragraph 3 below, or except as expressly
permitted by a definitive acquisition agreement entered into with respect to the
Transaction), without our prior written consent, disclose any Information in any
manner whatsoever, and (ii) will not use any Information other than in
connection with the Transaction; provided, however, that you may reveal the
Information to your Representatives (a) who need to know the Information for the
purpose of evaluating the Transaction, (b) who are informed by you of the
confidential nature of the Information, and (c) who agree to act in accordance
with the terms of this letter agreement. You will cause your Representatives to
observe the terms of this letter agreement, and by any of your Representatives.
2. You and your Representatives will not (except as otherwise required by
law, regulation or legal process, and only after compliance with paragraph 3
below, or except as expressly permitted by a definitive acquisition agreement
entered into with respect to the Transaction), without our prior written
consent, disclose to any person the fact that the Information exists or has been
made available, that you are considering the Transaction or any other
transaction involving the Company, or that discussions or negotiations are
taking or have taken place concerning the Transaction or involving the Company
or any term, condition or other fact relating to the Transaction or such
discussions or negotiations, including, without limitation, the status thereof,
3. In the event that you or any of your Representatives are requested
pursuant to, or required by, law, regulation or legal process to disclose any of
the Information, you will notify us promptly so that we may seek a
<PAGE> 2
protective order or other appropriate remedy or, in our sole discretion, waive
compliance with the terms of this letter agreement. In the event that no such
protective order or other remedy is obtained, or that the Company waives
compliance with the terms of this letter agreement, you will furnish only that
portion of the Information which you are advise by your counsel is legally
required.
4. If you determine not to proceed with the Transaction, you will promptly
inform our Representative, Morgan Stanley & Co. Incorporated ("Morgan Stanley"),
of that decision and, in that case, and at any time upon the request of the
Company or any of our Representatives, you will either (i) promptly destroy, or
cause to be destroyed in connection with your Representatives, all copies of the
written Information in your or your Representatives' possession and confirm such
destruction to us writing, or (ii) promptly deliver, or cause to be delivered in
connection with your Representatives, to the Company at your own expense all
copies of the written Information in your or your Representatives' possession.
Any oral Information will continue to be subject to the terms of this letter
agreement.
5. You acknowledge that neither we, nor Morgan Stanley or its affiliates,
nor our other Representatives, nor any of our or their respective officers,
directors, employees, agents or controlling persons within the meaning of
Section 20 of the Securities Exchange Act of 1934, as amended, makes any express
or implied representation of (sic) warranty as to the accuracy or completeness
of the Information, and you agree that no such person will have any liability
relating to the Information or for any errors therein or omissions therefrom.
You further agree that you are not entitled to rely on the accuracy or
completeness of the Information and that you will be entitled to rely solely on
such representations and warranties as may be included in any definitive
agreement with respect to the Transaction, subject to such limitations and
restrictions as may be contained therein.
6. You are aware, and you will advise your Representatives who are
informed of the matters that are the subject of this letter agreement, of the
restrictions imposed by the United States securities laws on the purchase or
sale of securities by any person who has received material, nonpublic
information from the issuer of such securities and on the communication of such
information to any other person when it is reasonably foreseeable that such
other person is likely to purchase or sell such securities in reliance upon such
information.
7. In consideration of receiving material nonpublic information as
described in the first paragraph of this agreement, and subject to the immediate
paragraph below, you agree that, for a period of one year from the date of this
letter agreement, neither you nor any of your affiliates will, without the prior
written consent of the Company or its Board of Directors: (i) acquire, offer to
acquire, or agree to acquire, directly or indirectly, by purchase or otherwise,
any voting securities or direct or indirect rights to acquire any voting
securities of the Company or any subsidiary thereof, or any assets of the
Company or any subsidiary or division thereof; (ii) make, or in any way
participate in, directly or indirectly, any "solicitation" of "proxies" (as such
terms are used in the rules of the Securities Exchange Commission) to vote, or
seek to advise or influence any person or entity with respect to the voting of,
any voting securities of the Company; (iii) make any public announcement with
respect to, or submit a proposal for, or offer of (with or without conditions)
any extraordinary transaction involving the Company or its securities or assets;
(iv) form, join or in any way participate in a "group" (as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended) in connection with
any of the foregoing; or (v) request the Company or any of our Representatives,
directly or indirectly, to amend or waive any provision of this paragraph.
In the event that any other person or entity not affiliated or otherwise
acting with you (i) makes an unsolicited public announcement of its desire to
enter into an Acquisition Transaction (as defined below), setting forth a
proposed purchase price and other material terms and conditions of such proposed
transaction, or (ii) enters into an agreement with the Company providing for an
Acquisition Transaction, you may then make any proposal (or request permission
to make any proposal) to engage in an Acquisition Transaction. For purposes of
this Agreement, an "Acquisition Transaction" shall mean any merger or other
business combination or acquisition of any substantial part of the assets or
greater than 25% of the voting stock of the Company.
2
<PAGE> 3
8. You agree that, for a period of eighteen (18) months from the date of
this letter agreement, you will not, directly or indirectly, solicit for
employment any employee of the Company or any of its subsidiaries with whom you
have had contact, or who became known to you, after the date of this letter
agreement in connection with your consideration of the Transaction so long as
they are employed by the Company or any of its subsidiaries and for a period of
three months thereafter. Provided, however, the foregoing restriction on
solicitation of employees does not apply (i) general solicitations for
employment, (ii) to situations in which you have not knowingly solicited for
hire, or assisted in the hiring of, any person presently employed by or for the
Company or any of its subsidiaries, or (iii) individuals who have already
interviewed with you concerning an employment opportunity prior to the date
hereof.
9. You agree that all (i) communications regarding the Transaction, (ii)
requests for additional information, facility tours or management meetings, and
(iii) discussions or questions regarding procedures with respect to the
Transaction, will be first submitted or directed to Morgan Stanley and not to
the Company. You acknowledge and agree that (a) we and our Representatives are
free to conduct the process leading up to a possible Transaction as we and our
Representatives, in our sole discretion, determine (including, without
limitation, by negotiating with any prospective buyer and entering into a
preliminary or definitive agreement without prior notice to you or any other
person), (b) we reserve the right, in our sole discretion, to change the
procedures relating to our consideration of the Transaction at any time without
prior notice to you or any other person, to reject any and all proposals made by
you or any of your Representatives with regard to the Transaction, and to
terminate discussions and negotiations with you at any time and for any reason,
and (c) unless and until a written definitive agreement concerning the
Transaction has been executed, neither of us, our Representatives or your
Representatives will have any liability, other than as set forth herein, with
respect to the Transaction.
10. You acknowledge that remedies at law may be inadequate to protect us
against any actual or threatened breach of this letter agreement by you or by
your Representatives, and, without prejudice to any other rights and remedies
otherwise available to us, you agree that Company shall have the right to
petition for injunctive relief from a court of competent jurisdiction as may be
necessary and appropriate to prevent any unauthorized use of Information by you
or your Representatives, and that you will not oppose such injunction on the
grounds that an adequate remedy is available at law. In the event of litigation
relating to this letter agreement, if a court of competent jurisdiction
determines in a final, nonappealable order that this letter agreement has been
breached by you or by your Representatives, then you will reimburse the Company
for its reasonable costs and expenses (including, without limitation, legal fees
and expenses) incurred in connection with all such litigation.
11. You agree that no failure or delay by us in exercising any right,
power or privilege hereunder will operate as a waiver thereof, nor will any
single or partial exercise thereof preclude any other further exercise thereof
or the exercise of any right, power or privilege hereunder.
Accordingly, Company hereby agrees that:
12. Company and our Representatives will not (except as otherwise required
by law, regulation or legal process), without your prior written consent,
disclose to any person the fact that you are considering the Transaction or any
other transaction involving the Company, or that discussions or negotiations are
taking or have taken place concerning the Transaction or involving you and your
Representatives or any term, condition or other fact relating to the Transaction
or such discussions or negotiations, including, without limitation, the status
thereof.
13. In the event that you are the prevailing party in litigation relating
to this letter agreement, then Company will reimburse you for your costs and
expenses (including, without limitation, legal fees and expenses) incurred in
connection with all such litigation.
Accordingly, the parties hereto hereby agree that:
14. This letter agreement will be governed by and construed in accordance
with the laws of the State of Delaware applicable to contracts between residents
of that State and executed in and to be performed in that State.
3
<PAGE> 4
15. All obligations under this letter agreement shall terminate upon the
consummation of a Transaction with you, or one year after the date hereof,
except in connection with paragraph 8 above, which is eighteen (18) months after
the date hereof, whichever shall occur sooner.
16. This letter agreement contains the entire agreement between you and us
concerning the confidentiality of the Information, and no modifications of this
letter agreement or waiver of the terms and conditions hereof will be binding
upon you or us, unless approved in writing by each of you and us.
Please confirm your understanding and agreement with the foregoing by
signing and returning to the undersigned the duplicate copy of this letter
enclosed herewith.
Very truly yours,
MONEYGRAM PAYMENT SYSTEMS, INC.
<TABLE>
<S> <C> <C>
By: /s/ JOHN FOWLER
--------------------------------------
Name: John Fowler
--------------------------------------
Title: Chief Financial Officer
--------------------------------------
</TABLE>
Accepted and Agreed as of the
date first written above.
VIAD CORP
<TABLE>
<S> <C> <C>
By: /s/ PHILIP W. MILNE
----------------------------------------------
Name: Philip W. Milne
----------------------------------------------
Title: President/CEO of Travelers Express Company, Inc.
----------------------------------------------
</TABLE>
4
<PAGE> 1
Exhibit 99(g)(1)
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ----------------------------------------)
)
TAAM ASSOCIATES, INC. )
)
Plaintiff, )
)
v. ) C.A. No. 16305-NC
)
JAMES F. CALVANO, ROBBIN L. AYERS, )
JOHN M. FOWLER, BRIAN J. FITZPATRICK, )
WILLIAM D. GUTH, SANFORD MILLER, )
MONEYGRAM PAYMENT SYSTEMS, INC., )
AND VIAD CORP., )
)
Defendants. )
- ----------------------------------------
CLASS ACTION COMPLAINT
Plaintiff alleges upon information and belief, except for paragraph 1
hereof, which is alleged upon knowledge, as follows:
1. Plaintiff has been the owner of the common stock of MoneyGram
Payment Systems, Inc., ("MoneyGram" or the "Company") since prior to the
transaction herein complained of and continuously to date.
2. MoneyGram is a corporation duly organized and existing under the
laws of the State of Delaware. The Company was founded by American Express in
1988 and became a separate publicly-traded company in 1996 following its
federally mandated divesture by First Data Corporation, a former subsidiary of
American Express. MoneyGram provides money wire transfer and express bill
payment services, phone card sales and money orders through agent locations
throughout the United States.
<PAGE> 2
3. Defendant Viad Corp. ("Viad") is a Delaware corporation based in
Phoenix, Arizona and provides payment services, airline catering, convention
services and travel and leisure services.
4. Defendant James F. Calvano is Chairman of the Board and Chief
Executive Officer of the Company.
5. Defendant Robbin L. Ayers is an Executive Vice President and
Director of the Company.
6. Defendant John M. Fowler is an Executive Vice President and
Director of the Company.
7. Defendants Brian J. Fitzpatrick, William D. Guth and Sanford
Miller are Directors of the Company.
8. The Individual Defendants are in a fiduciary relationship with
Plaintiff and the other public stockholders of MoneyGram and owe them the
highest obligations of good faith and fair dealing.
CLASS ACTION ALLEGATIONS
9. Plaintiff brings this action on its own behalf and as a class
action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
all common stockholders of the Company (except the defendants herein and any
person, firm, trust, corporation, or other entity related to or affiliated with
any of the defendants) and their successors in interest, who are or will be
threatened with injury arising from defendants' actions as more fully described
herein.
-2-
<PAGE> 3
10. This action is properly maintainable as a class action because:
(a) The class is so numerous that joinder of all members is
impracticable. As of April 10, 1997, there were approximately 16,625,000 shares
of MoneyGram common stock outstanding owned by hundreds, if not thousands, of
record and beneficial holders;
(b) There are questions of law and fact which are common to the class
including, inter alia, the following: (i) whether defendants have breached their
fiduciary and other common law duties owned by them to plaintiff and the
members of the class; and (ii) whether the class is entitled to injunctive
relief or damages as a result of the wrongful conduct committed by defendants.
(c) Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of the
plaintiff are typical of the claims of other members of the class and
plaintiff has the same interests as the other members of the class. Plaintiff
will fairly and adequately represent the class.
(d) Defendants have acted in manner which affects plaintiff and all
members of the class alike, thereby making appropriate injunctive relief and/or
corresponding declaratory relief with respect to the class as a whole.
(e) The prosecution of separate actions by individual members of the
Class would create a risk of inconsistent
-3-
<PAGE> 4
or varying adjudications with respect to individual members of the Class, which
would establish incompatible standards of conduct for defendants, or
adjudications with respect to individual members of the Class which would, as
a practical matter, be dispositive of the interests of other members or
substantially impair or impede their ability to protect their interests.
SUBSTANTIVE ALLEGATIONS
11. On January 28, 1998, MoneyGram announced earnings for the fourth
quarter ending December 31, 1997 that were substantially below analysts'
estimates. The Company noted that the fourth-quarter results included charges
for impairment reserves on certain underperforming agent contacts, entered into
prior to 1996, with guaranteed minimum commission payments. Charges were also
recorded for non-recurring expenses of converting MoneyGram operations, which
had been conducted under licenses held by First Data Corporation in various
state jurisdictions, to licenses issued directly to MoneyGram. Additionally, the
Company also took reserves for miscellaneous asset write downs and other items.
As a result of this temporary earnings downturn, the price of MoneyGram stock
has declined and does not reflect the intrinsic value of the Company.
12. On April 6, 1998, MoneyGram and Viad announced that they had
entered into a definitive merger agreement whereby Viad will acquire MoneyGram
in a transaction valued at $287 million. Under the terms of the transaction
as presently proposed, Viad will commence a cash tender offer for all of
MoneyGram's
-4-
<PAGE> 5
outstanding common shares at a price of $17.00 per share. The tender offer will
be followed by a merger in which any untendered shares of MoneyGram will be
acquired for $17.00 per share in cash.
13. Defendants have attempted to portray the Viad offer as fair to the
Company's shareholders by claiming that the $17 per share offer represents 22.5
times analyst's projected earnings for 1998. However, this analysis is flawed
and significantly undervalues the Company because, under Generally Accepted
Accounting Principles ("GAAP"), the Company's projected earnings do not reflect
the value of the Company's $58 million deferred tax asset. Additionally,
analysts' projections of the Company's earnings for 1998 are far from uniform.
For example, James Marks of Credit Suisse First Boston estimates that the
Company will achieve earnings per share of $1.31, which would reduce the price
to earnings multiple on Viad's offer to 13.
14. The price to earnings multiple analysis is also flawed and
seriously undervalues the Company because, under GAAP, MoneyGram's earnings are
significantly reduced by contract amortization charges that are the result of
the Company's separation from First Data Corporation and are not indicative of
conditions under which new agent contracts are being signed. Furthermore, the
projections used by defendants to portray the offer as "fair" are significantly
lower than other estimates. Since, according to the joint press release "[t]he
wire transfer market has been growing 20 to 30 percent per year for the last
ten years," defendants' reliance
-5-
<PAGE> 6
on the price to earnings multiple analysis to justify the offer is seriously
flawed.
15. By entering into the agreement with Viad, the MoneyGram Board has
initiated a process to sell the Company which imposes heightened fiduciary
responsibilities on its directors and requires enhanced scrutiny by the Court.
However, the terms of the proposed transaction were not the result of an auction
process or active market check; they were arrived at without a full and
thorough investigation by the Individual Defendants; and they are intrinsically
unfair and inadequate from the standpoint of the MoneyGram shareholders.
16. The Individual Defendants failed to make an informed decision, as
no market check of the Company's value was obtained. In agreeing to the merger,
the Individual Defendants failed to properly inform themselves of MoneyGram's
highest transactional value.
17. The Individual Defendants have violated the fiduciary duties owed
to the public shareholders of MoneyGram. The Individual Defendants' agreement to
the terms of the transaction, its timing, and the failure to auction the Company
and invite other bidders, and defendants' failure to provide a market check
demonstrate a clear absence of the exercise of due care and of loyalty to
MoneyGram's public shareholders.
18. The Individual Defendants' fiduciary obligations under these
circumstances require them to:
-6-
<PAGE> 7
(a) Undertake an appropriate evaluation of MoneyGram's net
worth as a merger/acquisition candidate; and
(b) Engage in a meaningful auction with third parties in an
attempt to obtain the best value for MoneyGram's public shareholders.
19. The Individual Defendants have breached their fiduciary duties by
reason of the acts and transactions complained of herein, including their
decision to merge with Viad without making the requisite effort to obtain the
best offer possible.
20. Plaintiff and other members of the Class have been and will be
damaged in that they have not and will not receive their fair proportion of the
value of MoneyGram's assets and business, and will be prevented from obtaining
fair and adequate consideration for their shares of MoneyGram common stock.
21. The consideration to be paid to class members in the proposed
merger is unfair and inadequate because, among other things:
(a) The intrinsic value of MoneyGram common stock is
materially in excess of the amount offered for those securities in their merger
giving due consideration to the anticipated operating results, net asset value,
cash flow, and profitability of the Company;
(b) The merger price in not the result of an appropriate
consideration of the value of MoneyGram because the MoneyGram Board approved
the proposed merger without undertaking
-7-
<PAGE> 8
steps to accurately ascertain MoneyGram's value through open bidding or at
least a "market check mechanism"; and
(c) By entering into the agreement with Viad, the Individual Defendants
have allowed the price of MoneyGram stock to be capped, thereby depriving
plaintiff and the Class of the opportunity to realize any increase in the value
of MoneyGram stock.
22. By reason of the foregoing, each member of the Class will suffer
irreparable injury and damages absent injunctive relief by this Court.
23. Defendant Viad has knowingly aided and abetted the breaches of
fiduciary duty committed by the other defendants to the detriment of
MoneyGram's public shareholders. Indeed, the proposed merger could not take
place without the active participation of Viad. Furthermore, Viad and its
shareholders are the intended beneficiaries of the wrongs complained of and
would be unjustly enriched absent relief in this action.
24. Plaintiff and the other members of the Class have no adequate remedy at
law.
WHEREFORE, plaintiff demands judgment against defendants as follows:
A. Declaring that this action is properly maintainable as a class action
and certifying plaintiff as the representative of the Class;
B. Preliminarily and permanently enjoining defendants and their counsel,
agents, employees and all persons acting under,
-8-
<PAGE> 9
in concert with, or for them, from proceeding with, consummating, or closing
the proposed transaction;
C. In the event that the proposed transaction is consummated, rescinding it
and setting it aside, or awarding rescissory damages to the Class;
D. Awarding compensatory damages against defendants, individually and
severally, in an amount to be determined at trial, together with pre-judgment
and post-judgment interest at the maximum rate allowable by law, arising from
the proposed transaction;
E. Awarding plaintiff its costs and disbursements and reasonable allowances
for fees of plaintiff's counsel and experts and reimbursement of expenses; and
F. Granting plaintiff and the Class such other and further relief as the
Court may deem just and proper.
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By /s/ ILLEGIBLE
--------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
BERNSTEIN LIEBHARD & LIFSHITZ
274 Madison Avenue
New York, NY 10016
(212) 779-1414
-9-
<PAGE> 1
Exhibit 99(g)(2)
IN THE COURT CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ---------------------------------
HARBOR FINANCE PARTNERS,
Individually Case No. 16306NC
And On Behalf of All Others
Similarly Situated,
Plaintiff,
CLASS ACTION
-against- COMPLAINT
JAMES F. CALVANO, JOHN M.
FOWLER, ROBBIN L. AYERS,
WILLIAM D. GUTH, BRIAN J.
FITZPATRICK, SANFORD MILLER, and
MONEYGRAM PAYMENT SYSTEMS, INC.,
Defendants.
- ---------------------------------
Plaintiff, by its attorneys, alleges upon personal knowledge as to its own
acts and upon information and belief as to all other matters, as follows:
NATURE OF THE ACTION
1. Plaintiff brings this action individually and as a class action on
behalf of all persons, other than defendants, who own the securities of
MoneyGram Payment Systems, Inc. ("MoneyGram" or the "Company"), who are
similarly situated, for injunctive and other appropriate relief in connection
with the proposed transaction (the "Proposed Transaction") announced by the
Company and Viad Corporation ("Viad") on April 6, 1998, pursuant to which Viad
will pay $17.00 for all of the outstanding MoneyGram
<PAGE> 2
common stock. The Proposed Transaction and the acts of the MoneyGram director
defendants, as more particularly alleged herein, constitute a breach of their
fiduciary duties to plaintiff and the class to take all necessary steps to
ensure that MoneyGram's stockholders will receive the maximum value realizable
for their shares in a sale of the Company. In the context of this action, the
board of directors, having manifested their willingness to sell MoneyGram, must
take all reasonable steps to assure the maximization of stockholder value
through appropriate market checks, including the implementation of a bidding
mechanism to foster a fair auction of the Company to the highest bidder or the
exploration of strategic alternatives which will return maximum value to
plaintiff and the class.
PARTIES
2. Plaintiff has been a continuous owner of shares of MoneyGram
common stock at all times relevant hereto.
3. MoneyGram is a corporation duly organized and existing under the
laws of the State of Delaware, with its principal offices located at 7401 West
Mansfield Avenue, Lakewood, Colorado. The Company has approximately 16,625,000
shares of common stock outstanding. MoneyGram's principal business is the
electronic transfer of money which allows its customers to quickly send money
worldwide.
4. Defendant James F. Calvano ("Calvano"), at all times material
hereto, has been the Chief Executive Officer and Chairman of the Board of
MoneyGram.
5. Defendant John M. Fowler ("Fowler"), at all times material
hereto has been an Executive Vice President, Chief Financial Officer, and a
Director of MoneyGram.
2
<PAGE> 3
6. Defendant Robbin L. Ayers ("Ayers"), at all times material
hereto has been an Executive Vice President, General Manager, and a Director of
MoneyGram.
7. William D. Guth, Brian J. Fitzpatrick, and Sanford Miller are
Directors of MoneyGram.
8. The Individual Defendants are fiduciaries to and for the
Company's shareholders, which fiduciary relationship requires them to exercise
their best judgment and to act in a prudent manner and in the best interests
of the Company's shareholders.
CLASS ACTION ALLEGATIONS
9. Plaintiff brings this action individually on its own behalf and
as a class action, on behalf of all stockholders of the Company (except the
defendants herein and any person, firm, trust, corporation, or other entity
related to or affiliated with any of the defendants) and their successors in
interest, who are or will be threatened with injury arising from defendants'
actions as more fully described herein (the "Class").
10. This action is properly maintainable as a class action because:
(a) The Class is so numerous that joinder of all members is
impracticable. There are hundreds of shareholders who hold the approximately
16.6 million shares of MoneyGram common stock outstanding.
(b) There are questions of law and fact involved affecting the
members of the Class including, inter alia, the following:
(1) whether the Proposed Transaction is grossly unfair to
the stockholders of MoneyGram;
3
<PAGE> 4
(2) whether defendants have wrongfully failed to maximize
shareholder value through an adequate auction or market check process;
(3) whether defendants have breached the fiduciary and other common
law duties owed by them to plaintiff and the members of the Class; and
(4) whether plaintiff and other members of the Class would be
irreparably damaged were the transaction complained of herein consummated.
(c) Plaintiff is a member of the Class and is committed to prosecuting
this action. Plaintiff has retained competent counsel experienced in litigation
of this nature. The claims of plaintiff are typical of the claims of other
members of the Class, and plaintiff has the same interests as the other members
of the Class. Plaintiff does not have interests antagonistic to or in conflict
with those he seeks to represent. Plaintiff is an adequate representation of the
Class.
SUBSTANTIVE ALLEGATIONS
11. On April 6, 1998, the Bloomberg newswire reported that MoneyGram and
Viad had signed a definitive agreement whereby Viad would acquire all the
outstanding shares of MoneyGram in a transaction valued at $287 million.
12. Pursuant to the Proposed Transaction, stockholders of MoneyGram will
receive $17.00 per share in cash for each share of MoneyGram stock. This offer
constitutes a premium of 9.2% over the unaffected trading price of MoneyGram
stock on April 3, 1998, which is well-below the customary premium offered to
shareholders in similar transactions.
4
<PAGE> 5
13. On April 6, 1998, Gotham Partners, L.P., Gotham Partners II, L.P. and
Gotham International Advisors, L.L.C. (collectively "Gotham"), which
collectively control 31.03% of MoneyGram's outstanding stock, filed a Form 13D
with the Securities and Exchange Commission ("SEC") objecting to the Proposed
Transaction as being inadequate and valuing MoneyGram at a substantial discount
to the fair market value of the Company.
14. Gotham objected to the Proposed Transaction for the following
reasons:
(a) The Proposed Transaction does not properly account for the
Company's $58 million deferred tax asset;
(b) The Proposed Transaction does not reflect amortization charges
as a result of the Company's separation from First Data Corporation and are not
indicative of conditions under which new agent contracts are being signed; and
(c) The projections used by the Company are significantly lower than
projections used by analysts following the Company.
15. The Proposed Transaction further fails to account for the future
growth of the money-transfer business segment, which, by the Company's own
estimates, is projected to grow 20-30% per year.
16. Defendants have wrongfully, and in violation of their fiduciary
obligations to maximize stockholder value, failed to ascertain MoneyGram's true
value through an open bidding process or at least a "market check" mechanism.
Defendants
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have not adequately considered other potential purchasers of MoneyGram in a
manner designed to obtain the highest possible price for MoneyGram public
stockholders.
17. The consideration to be paid to the MoneyGram shareholders in the
merger is unfair, inadequate, and substantially below the fair or inherent
value of the Company. The intrinsic value of the equity of MoneyGram is
materially greater than the merger consideration, taking into account
MoneyGram's asset value, its expected growth, and the strength of its business
segment.
18. The Proposed Transaction will deny class members their right to
share proportionately in the true value of MoneyGram's valuable assets,
profitable business, and future growth in profits and earnings.
19. As a result of the action of defendants, plaintiff and the Class
have been and will be damaged in that they will not receive the fair value of
MoneyGram's assets and businesses.
20. Unless enjoined by this Court, defendants will continue to breach
their fiduciary duties owed to plaintiff and the Class, to the irreparable harm
of the Class.
21. Plaintiff and the Class have no adequate remedy of law.
WHEREFORE, plaintiff prays for judgment and relief as follows:
A. declaring that this lawsuit is properly maintainable as a class
action and certifying the plaintiff as proper representative of the Class;
B. preliminarily and permanently enjoining defendants and their counsel,
agents, employees, and all persons acting under, in concert with, or for them,
from proceeding with, consummating the Proposed Transaction;
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C. requiring defendants to place the Company up for auction and to
conduct a market-check prior to completion of any transaction for the sale of
the Company;
D. in the event the Proposed Transaction is consummated, rescinding it
and setting it aside;
E. awarding compensatory damages against the defendants, jointly and
severally, in an amount to be determined at trial, together with prejudgment
interest at the maximum rate allowable by law;
F. awarding plaintiff and the Class their costs and disbursements and
reasonable allowances for plaintiff's counsel and experts' fees and expenses;
and
G. granting such other and further relief as may be just and proper.
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By: /s/ [ILLEGIBLE]
-------------------------------
Suite 1401, Mellon Bank Center
919 Market Street
Wilmington, Delaware 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
WECHSLER, HARWOOD
HALEBIAN & FEFFER LLP
488 Madison Avenue
New York, New York 10022
(212) 935-7400
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