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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.
THE PEAK TECHNOLOGIES GROUP, INC.
(NAME OF SUBJECT COMPANY)
KIRKWOOD ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
MOORE CORPORATION LIMITED
(BIDDER)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
INCLUDING THE ASSOCIATED PREFERRED STOCK
PURCHASE RIGHTS
(TITLE OF CLASS OF SECURITIES)
0007046831
(CUSIP NUMBER OF CLASS OF SECURITIES)
JOSEPH M. DUANE, ESQ.
KIRKWOOD ACQUISITION CORP.
1 FIRST CANADIAN PLACE
TORONTO, ONTARIO, CANADA M5X 1G5
(416) 364-2600
(NAME, ADDRESS AND TELEPHONE NUMBERS OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
Copy to:
DENNIS J. FRIEDMAN, ESQ.
DAVID M. WILF, ESQ.
CHADBOURNE & PARKE LLP
30 ROCKEFELLER PLAZA
NEW YORK, NY 10112
(212) 408-5100
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
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$175,092,541 $37,415
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* Based on the offer to purchase all outstanding shares of Common Stock of the
Subject Company together with the associated preferred stock purchase rights
at $18.00 cash per share and, as of April 15, 1997, as reported to the
Offeror by the Subject Company, the number of shares of Common Stock issued
and outstanding (9,297,472), the number of shares of Common Stock reserved
for issuance upon the exercise of outstanding options to purchase shares of
Common Stock with an exercise price of less than $18.00 per share (750,226),
the number of shares of Common Stock issuable upon the exercise of certain
outstanding warrants (12,250) and the number of shares of Common Stock
reserved for issuance under the Subject Company's Employee Stock Purchase
Plan (112,991).
[ ] 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: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
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This statement relates to a tender offer by Kirkwood Acquisition Corp., a
Delaware corporation (the "Offeror"), a wholly owned subsidiary of FRDK, Inc., a
New York corporation ("FRDK"), a wholly owned subsidiary of Moore U.S.A. Inc., a
Delaware corporation (the "Parent"), a wholly owned subsidiary of Moore
Corporation Limited ("Moore"), a corporation organized under the laws of
Ontario, Canada, to purchase all outstanding shares of Common Stock, par value
$0.01 per share (the "Common Stock"), of The Peak Technologies Group, Inc., a
Delaware corporation (the "Company"), including the associated preferred stock
purchase rights issued pursuant to the Rights Agreement, dated as of March 28,
1997, between the Company and ChaseMellon Shareholder Services, as Rights Agent,
as amended (the "Rights" and, together with the Common Stock, the "Shares"), at
a purchase price of $18.00 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 29, 1997 (the "Offer to Purchase"), and in the related
Letter of Transmittal (which together constitute the "Offer"), copies of which
are filed as Exhibits (a)(1) and (a)(2) hereof, respectively, and which are
incorporated herein by reference.
ITEM 1. SECURITY AND SUBJECT COMPANY.
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(a) The name of the subject company is The Peak Technologies Group, Inc., a Delaware
Corporation, and the address of its principal executive offices is 600 Madison
Avenue, New York, New York 10022.
(b) The exact title of the class of equity securities being sought in the Offer is
the Common Stock, par value $0.01 per share, including associated Rights, of the
Company. The information set forth in the Introduction to the Offer to Purchase
is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares; Dividends") of
the Offer to Purchase is incorporated herein by reference.
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ITEM 2. IDENTITY AND BACKGROUND.
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(a)-(d);(g) The information set forth in the Introduction and Section 9 ("Certain
Information Concerning the Parent and the Offeror") of the Offer to Purchase,
and in Annex I thereto, is incorporated herein by reference.
(e)-(f) Neither the Offeror nor Parent nor, to the best of their knowledge, any of the
persons listed in Annex I of the Offer to Purchase, has during the last five
years (i) been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) or (ii) been 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.
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ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
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(a) None.
(b) The information set forth in the Introduction and Section 11 ("Background of the
Offer; Past Contacts, Transactions or Negotiations with the Company") of the
Offer to Purchase is incorporated herein by reference.
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ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
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(a)-(b) The information set forth in Section 10 ("Source and Amount of Funds") of the
Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
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ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
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(a)-(e) The information set forth in the Introduction, Section 11 ("Background of the
Offer; Past Contacts, Transactions or Negotiations with the Company"), Section
12 ("Purpose of the Offer and the Merger; Plans for the Company"), Section 13
("The Merger Agreement") and Section 14 ("Dividends and Distributions") of the
Offer to Purchase is incorporated herein by reference.
(f)-(g) The information set forth in Section 7 ("Certain Effects of the Transaction") of
the Offer to Purchase is incorporated herein by reference.
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ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
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(a)-(b) The information set forth in the Introduction, Section 9 ("Certain Information
Concerning Moore, Parent, FRDK and the Offeror") and Section 13 ("The Merger
Agreement") of the Offer to Purchase is incorporated herein by reference.
</TABLE>
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
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The information set forth in the Introduction and Section 11 ("Background of the
Offer; Past Contacts, Transactions or Negotiations with the Company") of the
Offer to Purchase is incorporated herein by reference.
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ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
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The information set forth in the Introduction and in Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
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ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
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The information set forth in Section 9 ("Certain Information Concerning Moore,
Parent, FRDK and the Offeror") of the Offer to Purchase is incorporated herein
by reference.
The incorporation by reference herein of the above-mentioned financial
information does not constitute an admission that such information is material
to a decision by a security holder of the Company as whether to sell, tender or
hold Shares being sought in the Offer.
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ITEM 10. ADDITIONAL INFORMATION.
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(a) Not applicable.
(b)-(c) The information set forth in Section 16 ("Certain Legal Matters") of the Offer
to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Certain Effects of the Transaction") of
the Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of Transmittal
is incorporated herein by reference in its entirety.
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ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
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(a)(1) Offer to Purchase, dated April 29, 1997.
(a)(2) Letter of Transmittal with respect to the Shares and Rights.
(a)(3) Letter, dated April 29, 1997, from Lazard Freres & Co. LLC, as Dealer Manager, to
Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(4) Letter to be sent by Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees to their Clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) IRS Guidelines for Certification of Taxpayer Identification Number on Substitute Form
W-9.
(a)(7) Form of Summary Advertisement, dated April 29, 1997.
(a)(8) Press Release issued by Moore on April 23, 1997.
(a)(9) Press Release issued by Moore on April 29, 1997.
(b)(1) Credit Agreement, dated as of August 10, 1995, among FRDK, Inc., Moore, Certain
Commercial Banks and The Bank of Nova Scotia, as amended by a First Amendment, dated
as of September 1, 1995, and by a Second Amendment, dated as of August 8, 1996.
(c)(1) Agreement and Plan of Merger, dated as of April 23, 1997, among Parent, the Offeror
and the Company.
(d) None.
(e) Not applicable.
(f) None.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: April 29, 1997 Moore Corporation Limited
By: /s/ JOSEPH M. DUANE, ESQ.
------------------------------------
Name: Joseph M. Duane, Esq.
Title: Vice President, Corporate
Development and General
Counsel
By: /s/ STEPHEN A. HOLINSKI
------------------------------------
Name: Stephen A. Holinski
Title: Senior Vice President and
Chief Financial Officer
Kirkwood Acquisition Corp.
By: /s/ JOSEPH M. DUANE, ESQ.
------------------------------------
Name: Joseph M. Duane, Esq.
Title: Director and President
4
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EXHIBIT INDEX
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(a)(1) Offer to Purchase, dated April 29, 1997.
(a)(2) Letter of Transmittal with respect to the Shares and Rights.
(a)(3) Letter, dated April 29, 1997, from Lazard Freres & Co. LLC, as Dealer Manager, to
Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(4) Letter to be sent by Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees to their Clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) IRS Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9.
(a)(7) Form of Summary Advertisement, dated April 29, 1997.
(a)(8) Press Release issued by Moore on April 23, 1997.
(a)(9) Press Release issued by Moore on April 29, 1997.
(b)(1) Credit Agreement, dated as of August 10, 1995, among FRDK, Inc., Moore, Certain
Commercial Banks and The Bank of Nova Scotia, as amended by a First Amendment, dated
as of September 1, 1995, and by a Second Amendment, dated as of August 8, 1996.
(c)(1) Agreement and Plan of Merger, dated as of April 23, 1997, among Parent, the Offeror
and the Company.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
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EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THE PEAK TECHNOLOGIES GROUP, INC.
AT
$18.00 NET PER SHARE
BY
KIRKWOOD ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
MOORE CORPORATION LIMITED
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, MAY 27, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF SHARES OF
COMMON STOCK, PAR VALUE $0.01 PER SHARE, INCLUDING THE ASSOCIATED PREFERRED
STOCK PURCHASE RIGHTS ("SHARES"), OF THE PEAK TECHNOLOGIES GROUP, INC. (THE
"COMPANY") CONSTITUTING A MAJORITY OF THE OUTSTANDING SHARES (DETERMINED ON A
FULLY DILUTED BASIS FOR ALL OUTSTANDING STOCK OPTIONS AND ANY OTHER RIGHTS TO
ACQUIRE SHARES), (ii) EXPIRATION OR TERMINATION OF THE APPLICABLE WAITING PERIOD
UNDER (1) THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED,
AND (2) SECTION 24a, SUBSECTION 2, SENTENCE 1 OF THE GERMAN ACT AGAINST
RESTRAINTS OF TRADE, AND (iii) SATISFACTION OF CERTAIN OTHER TERMS AND
CONDITIONS. SEE SECTION 15.
THE OFFER IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND PLAN OF
MERGER, DATED AS OF APRIL 23, 1997 AMONG MOORE U.S.A. INC., KIRKWOOD ACQUISITION
CORP. AND THE COMPANY. THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE
OFFER, THE MERGER AND THE MERGER AGREEMENT, HAS DETERMINED THAT THE TERMS OF
EACH OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE
COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT HOLDERS OF THE SHARES ACCEPT THE
OFFER AND TENDER THEIR SHARES IN THE OFFER
------------------------
IMPORTANT
Any stockholder desiring to tender Shares should either (i) complete and
sign the Letter of Transmittal or a facsimile thereof in accordance with the
instructions in the Letter of Transmittal and deliver the Letter of Transmittal
with the Shares and all other required documents to the Depositary, or follow
the procedure for book-entry transfer set forth in Section 3, or (ii) request
such stockholder's broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for the stockholder. Stockholders having
Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such person if they desire to tender their
Shares.
Any stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, may tender such
Shares pursuant to the guaranteed delivery procedure set forth in Section 3.
Questions and requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information Agent
or the Dealer Manager at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase.
------------------------
The Dealer Manager for the Offer is:
LAZARD FRERES & CO. LLC
April 29, 1997
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TABLE OF CONTENTS
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PAGE
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Introduction........................................................................ 1
1. Terms of the Offer............................................................. 2
2. Acceptance for Payment and Payment for Shares.................................. 4
3. Procedure for Tendering Shares................................................. 5
4. Withdrawal Rights.............................................................. 8
5. Certain Federal Income Tax Consequences........................................ 8
6. Price Range of Shares; Dividends............................................... 9
7. Certain Effects of the Transaction............................................. 10
8. Certain Information Concerning the Company..................................... 11
9. Certain Information Concerning Moore, Parent, FRDK and the Offeror............. 12
10. Source and Amount of Funds..................................................... 14
11. Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company........................................................................ 15
12. Purpose of the Offer and the Merger; Plans for the Company..................... 16
13. The Merger Agreement........................................................... 17
14. Dividends and Distributions.................................................... 23
15. Certain Conditions of the Offer................................................ 24
16. Certain Legal Matters.......................................................... 25
17. Fees and Expenses.............................................................. 27
18. Miscellaneous.................................................................. 27
Annex I. Certain Information Concerning the Directors and Executive Officers of
Moore, Parent, FRDK and the Offeror........................................ 29
</TABLE>
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TO THE HOLDERS OF COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF THE PEAK
TECHNOLOGIES GROUP, INC.
INTRODUCTION
Kirkwood Acquisition Corp., a Delaware corporation (the "Offeror"), a
wholly owned subsidiary of FRDK, Inc., a New York corporation ("FRDK"), a wholly
owned subsidiary of Moore U.S.A. Inc., a Delaware corporation (the "Parent"), a
wholly owned subsidiary of Moore Corporation Limited ("Moore"), a corporation
organized under the laws of Ontario, Canada, hereby offers to purchase all
outstanding shares of Common Stock, par value $0.01 per share (the "Common
Stock"), of The Peak Technologies Group, Inc., a Delaware corporation (the
"Company"), including the associated preferred stock purchase rights issued
pursuant to the Rights Agreement, dated as of March 28, 1997, between the
Company and ChaseMellon Shareholder Services, as Rights Agent, as amended (the
"Rights Agreement") (the "Rights" and, together with the Common Stock, the
"Shares"), at a purchase price of $18.00 per Share (the "Offer Price"), net to
the seller in cash, without interest, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together constitute the "Offer"). Tendering holders of Shares
will not be obligated to pay brokerage fees or commissions or, except as set
forth in the Letter of Transmittal, transfer taxes on the purchase of Shares by
the Offeror pursuant to the Offer. The Offeror will pay all charges and expenses
of Lazard Freres & Co. LLC (the "Dealer Manager"), IBJ Schroder Bank & Trust
Company (the "Depositary") and MacKenzie Partners, Inc. (the "Information
Agent") in connection with the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER, THE MERGER
(AS HEREINAFTER DEFINED) AND THE MERGER AGREEMENT (AS HEREINAFTER DEFINED), HAS
DETERMINED THAT THE TERMS OF EACH OF THE OFFER AND THE MERGER ARE FAIR TO AND IN
THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS, AND RECOMMENDS THAT THE
COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF SHARES OF
THE COMPANY CONSTITUTING A MAJORITY OF THE OUTSTANDING SHARES (DETERMINED ON A
FULLY DILUTED BASIS FOR ALL OUTSTANDING STOCK OPTIONS AND ANY OTHER RIGHTS TO
ACQUIRE SHARES) (THE "MINIMUM CONDITION"), (ii) EXPIRATION OR TERMINATION OF THE
APPLICABLE WAITING PERIOD UNDER (1) THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS
ACT OF 1976, AS AMENDED (THE "HSR ACT") AND (2) SECTION 24a, SUBSECTION 2,
SENTENCE 1 OF THE GERMAN ACT AGAINST RESTRAINTS OF TRADE (THE "GERMAN
COMPETITION ACT"), AND (iii) SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS.
SEE SECTION 15.
WILLIAM BLAIR & COMPANY, THE COMPANY'S FINANCIAL ADVISOR, HAS DELIVERED TO
THE COMPANY'S BOARD OF DIRECTORS ITS WRITTEN OPINION THAT THE CASH CONSIDERATION
TO BE RECEIVED BY THE STOCKHOLDERS OF THE COMPANY PURSUANT TO THE OFFER AND THE
MERGER IS FAIR TO SUCH STOCKHOLDERS FROM A FINANCIAL POINT OF VIEW. A COPY OF
SUCH OPINION IS CONTAINED IN THE COMPANY'S STATEMENT ON SCHEDULE 14D-9, WHICH IS
BEING DISTRIBUTED TO THE COMPANY'S STOCKHOLDERS.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of April 23, 1997 (the "Merger Agreement"), among Parent, the Offeror and the
Company pursuant to which, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, the Offeror will be merged with
and into the Company (the "Merger"), with the Company surviving the Merger (as
such, the "Surviving Corporation") as a wholly owned subsidiary of FRDK. In the
Merger, each outstanding Share (other than Shares owned by the Company, any
subsidiary of the Company, Parent, the Offeror or any other subsidiary of Parent
or by stockholders, if any, who are entitled to and who properly exercise
dissenters' rights under
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Delaware law) will be converted into the right to receive from the Surviving
Corporation the Offer Price in cash, without interest (the "Merger
Consideration"). See Section 12.
The Merger is subject to a number of conditions, including approval by
stockholders of the Company, if such approval is required by applicable law. If
the Offeror acquires 90% or more of the outstanding Shares pursuant to the Offer
or otherwise, the Offeror would be able to effect the Merger pursuant to the
short-form merger provisions of the Delaware General Corporation Law (the
"DGCL"), without prior notice to, or any action by, any other stockholder of the
Company. See Section 12.
The Merger Agreement is more fully described in Section 13.
The Company has informed the Offeror, that, as of April 15, 1997, there
were 9,297,472 Shares issued and outstanding, 970,329 Shares reserved for
issuance upon the exercise of outstanding options to purchase Shares ("Stock
Options"), 12,250 Shares issuable upon the exercise of certain outstanding
warrants ("Warrants") and 112,991 Shares reserved for issuance under the
Company's Employee Stock Purchase Plans ("ESPP Shares"). Based upon the
foregoing, the Offeror believes that approximately 5,196,522 Shares constitute a
majority of the outstanding Shares on a fully diluted basis. Accordingly, the
Minimum Condition will be satisfied if at least 5,196,522 Shares, or
approximately 55.89% of the outstanding shares as of April 15, 1997 (50.00% plus
1 share of the Shares on a fully diluted basis), are validly tendered and not
withdrawn prior to the Expiration Date (as defined herein). If the Minimum
Condition is satisfied and the Offeror accepts for payment Shares tendered
pursuant to the Offer, the Offeror will be able to elect a majority of the
members of the Company's Board of Directors and to effect the Merger without the
affirmative vote of any other stockholder of the Company.
Certain Federal income tax consequences of the sale of Shares pursuant to
the Offer and the conversion of Shares pursuant to the Merger are described in
Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ 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 any extension or
amendment), the Offeror will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4. The term "Expiration Date" means 12:00 midnight, New
York City time, on May 27, 1997, unless and until the Offeror shall have
extended the period of time during which the Offer is open, in which event the
term "Expiration Date" shall mean the latest time and date at which the Offer,
as so extended by the Offeror, will expire.
In the Merger Agreement the Offeror has agreed that it will not, without
the consent of the Company, extend the Offer, except that, without the consent
of the Company, the Offeror may extend the Offer (a) if at the scheduled or
extended Expiration Date any of the conditions to the Offeror's obligation to
accept Shares for payment are not satisfied or waived, until such time as such
conditions are satisfied or waived, (b) for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the "Commission") or the staff thereof applicable to the Offer, (c) from time
to time until two business days after the expiration of the last to expire of
the waiting period under the HSR Act and the German Competition Act and (d) for
a period of not more than 15 business days, notwithstanding that all conditions
to the Offer are satisfied as of such Expiration Date, if, immediately prior to
such Expiration Date (as it may be extended), the Shares tendered and not
withdrawn pursuant to the Offer equal less than 90% of the outstanding Shares
(on a fully diluted basis). As used in this Offer to Purchase, "business day"
has the meaning set forth in Rule 14d-1 under the Securities and Exchange Act of
1934, as amended (the "Exchange Act").
In addition, the Offeror has agreed in the Merger Agreement that it will
not, without the consent of the Company, (a) reduce the number of Shares subject
to the Offer, (b) reduce the Offer Price, (c) add to the
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conditions set forth in Section 14, (d) change the form of consideration payable
in the Offer, (e) extend the Offer, except as provided in the Merger Agreement,
(f) amend any other term of or add any new term to the Offer in any manner
materially adverse to the Company's stockholders or (g) waive the Minimum
Condition.
Subject to the terms of the Merger Agreement and the applicable rules and
regulations of the Commission, the Offeror reserves the right (but shall not be
obligated), at any time and from time to time, and regardless of whether or not
any of the events or facts set forth in Section 15 hereof shall have occurred,
(a) to extend the period of time during which the Offer is open, and thereby
delay acceptance for payment of and the payment for any Shares, by giving oral
or written notice of such extension to the Depositary and (b) to amend the Offer
in any other respect by giving oral or written notice of such amendment to the
Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE
FOR TENDERED SHARES, WHETHER OR NOT THE OFFEROR EXERCISES ITS RIGHT TO EXTEND
THE OFFER.
If by 12:00 midnight, New York City time, on May 27, 1997 (or any date or
time then set as the Expiration Date), any or all of the conditions to the Offer
have not been satisfied or waived, the Offeror reserves the right (but shall not
be obligated), subject to the terms and conditions contained in the Merger
Agreement and to the applicable rules and regulations of the Commission, (a) to
terminate the Offer and not accept for payment or pay for any Shares and return
all tendered Shares to tendering stockholders, (b) to waive all the unsatisfied
conditions other than the Minimum Condition and accept for payment and pay for
all Shares validly tendered prior to the Expiration Date and not theretofore
withdrawn, (c) to extend the Offer and, subject to the right of stockholders to
withdraw Shares until the Expiration Date, retain the Shares that have been
tendered during the period or periods for which the Offer is extended or (d) to
amend the Offer.
There can be no assurance that the Offeror will exercise its right to
extend the Offer. Any extension, waiver, amendment or termination will be
followed as promptly as practicable by public announcement. In the case of an
extension, Rule 14e-l(d) under the Exchange Act, requires that the announcement
be issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date in accordance with the public
announcement requirements of Rule 14d-4(c) under the Exchange Act. Subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that any material change in the information published, sent or
given to stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change) and without limiting the manner in which the Offeror may choose to make
any public announcement, the Offeror will not have any obligation to publish,
advertise or otherwise communicate any such public announcement other than by
making a release to the Dow Jones News Service.
If the Offeror extends the Offer or if the Offeror is delayed in its
acceptance for payment of or payment (whether before or after its acceptance for
payment of Shares) for Shares or it is unable to pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Offeror's rights under the
Offer, the Depositary may retain tendered Shares on behalf of the Offeror, and
such Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in Section 3. However, the ability of
the Offeror to delay the payment for Shares that the Offeror 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 such bidder's offer.
If the Offeror 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, with the Company's consent, a waiver of the Minimum Condition), the
Offeror will disseminate additional tender offer materials and extend the Offer
to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange
Act. The minimum period during which an 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 the percentage of securities sought,
will depend upon the facts and circumstances then existing, including the
relative materiality of the changed terms or information.
3
<PAGE> 6
With respect to a change in price or a change in the percentage of securities
sought, a minimum period of 10 business days is generally required to allow for
adequate dissemination to stockholders.
Consummation of the Offer is conditioned upon satisfaction of the Minimum
Condition, the expiration or termination of all waiting periods imposed by the
HSR Act and the German Competition Act and the other conditions set forth in
Section 15. Subject to the terms and conditions contained in the Merger
Agreement, the Offeror reserves the right (but shall not be obligated) to waive
any or all such conditions. However, if the Offeror waives or amends the Minimum
Condition (which action may not be taken without the Company's consent) during
the last five business days during which the Offer is open, the Offeror will be
required to extend the Expiration Date so that the Offer will remain open for at
least five business days after the announcement of such waiver or amendment is
first published, sent or given to holders of Shares and may also be required to
extend the Offer if other conditions are waived, depending upon the materiality
of the waiver.
The Company has provided the Offeror with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed by the Offeror to record holders of
Shares, and will be furnished to brokers, dealers, banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
stockholder lists, 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 Offeror is not offering to purchase any of the Stock Options or
Warrants. The Merger Agreement provides that the Company will amend its Stock
Option Plans (as defined herein) to provide that if the optionees do not
exercise their unexercised options within thirty (30) days of a notice that the
Company proposes to merge into another corporation, to the extent that an
optionee does not exercise within thirty (30) days of the notice and agrees in
writing thereto, the optionee shall receive, in settlement of each option held
by the optionee, a "cash amount" (less any applicable withholding taxes) with
respect to the number of previously unexercised Shares underlying the option
immediately prior to the effectiveness of the Merger. Each option shall
terminate no later than the effectiveness of the Merger. The cash amount payable
for each option shall equal the product of (i) the Merger Consideration minus
the exercise price per Share of each such option and (ii) the number of
previously unexercised Shares covered by each such option. Pursuant to the
Merger Agreement, the Company is required to provide such notice to participants
in its stock option plans. Except as may be otherwise agreed to by Parent or Sub
and the Company, the Company's stock option plans shall terminate as of the
effectiveness of the Merger and the provisions in any other plan, program or
arrangement providing for the issuance or grant of any other interest in respect
of the capital stock of the Company or any of its subsidiaries shall be deleted
as of the effective time. The Company shall use its best efforts so that
following the effective time no holder of employee stock options will have any
right to receive Shares upon exercise of an employee stock option. The Company
shall give notice as promptly as permitted by the terms thereof to each holder
of a Transferable Warrant dated as of July 20, 1993 (issued in connection with
the acquisition of Concord Technologies, Inc. by the Company) pursuant to
Section 8(ii) thereof permitting such warrant holders to exercise their warrants
in full in accordance with the terms of Section 9 thereof. See Section 13, "The
Merger Agreement -- Stock Options; Warrants."
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
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), the Offeror will accept for payment and will pay for all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4 promptly after the later to occur of (a) the
Expiration Date and (b) subject to compliance with Rule 14e-1(c) under the
Exchange Act, the satisfaction or waiver of the conditions set forth in Section
15. Subject to compliance with Rule 14e-1(c) under the Exchange Act, the Offeror
expressly reserves the right to delay payment for Shares in order to comply in
whole or in part with any applicable law. See Sections 1 and 16. In all cases,
payment for Shares tendered and accepted for payment pursuant to the Offer will
be made only after timely receipt by the Depositary of (i) certificates for such
Shares or timely confirmation (a "Book-Entry Confirmation") of a book-entry
transfer of such Shares into the Depositary's account at The Depository Trust
Company or the Philadelphia Depository Trust Company (collectively, the
"Book-Entry Transfer
4
<PAGE> 7
Facilities"), pursuant to the procedures set forth in Section 3, (ii) a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof) with all required signature guarantees or, in the case of a
book-entry transfer, an Agent's Message (as defined below) and (iii) any other
documents required by the Letter of Transmittal.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Offeror may enforce such agreement against the participant.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when the Offeror gives oral or written notice to the Depositary of the
Offeror's acceptance of such Shares for payment. In all cases, payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price with the Depositary, which will act as agent for tendering stockholders
for the purpose of receiving payment from the Offeror and transmitting such
payment to tendering stockholders. If, for any reason whatsoever, acceptance for
payment of any Shares tendered pursuant to the Offer is delayed, or the Offeror
is unable to accept for payment Shares tendered pursuant to the Offer, then,
without prejudice to the Offeror's rights under Section 1, the Depositary may,
nevertheless, on behalf of the Offeror, retain tendered Shares, and such Shares
may not be withdrawn, except to the extent that the tendering stockholders are
entitled to withdrawal rights as described in Section 4 below and as otherwise
required by Rule 14e-1(c) under the Exchange Act. Under no circumstances will
interest be paid by the Offeror because of any delay in making such payment.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted for
more Shares than are tendered, certificates for such unpurchased or untendered
Shares will be returned, without expense to the tendering stockholder (or, in
the case of Shares delivered by book-entry transfer to a Book-Entry Transfer
Facility, such Shares will be credited to an account maintained within such
Book-Entry Transfer Facility), as promptly as practicable after the expiration,
termination or withdrawal of the Offer.
If, prior to the Expiration Date, the Offeror increases the price being
paid for Shares accepted for payment pursuant to the Offer, such increased
consideration will be paid to all stockholders whose Shares are purchased
pursuant to the Offer, whether or not such Shares were tendered prior to such
increase in consideration.
The Offeror 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 the Offeror of its obligations under the Offer or prejudice the rights
of tendering stockholders to receive payment for Shares validly tendered and
accepted for payment.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tenders. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof), with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and any other required documents, 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, or the tendering
stockholder must comply with the guaranteed delivery procedure set forth below.
In addition, either (i) certificates representing such Shares must be received
by the Depositary along with the Letter of Transmittal or such Shares must be
tendered pursuant to the procedure for book-entry transfer set forth below, and
a Book-Entry Confirmation must be received by the Depositary, in each case prior
to the Expiration Date, or (ii) the guaranteed delivery procedures set forth
below must be complied with. No alternative, conditional or contingent tenders
will be accepted.
5
<PAGE> 8
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at each Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in a Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. Although delivery of Shares may be
effected through book-entry at a Book-Entry Transfer Facility prior to the
Expiration Date, (i) the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer, and
any other required documents, must, in any case, be transmitted to and received
by the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase or (ii) the guaranteed delivery procedures described below
must be complied with.
Signature Guarantee. Signatures on the Letter of Transmittal must be
guaranteed by a member in good standing of the Securities Transfer Agents
Medallion Program, or by any other bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule 17Ad-15 under the Exchange Act (each of the
foregoing being referred to as an "Eligible Institution" and, collectively, as
"Eligible Institutions"), unless the Shares tendered thereby are tendered (i) by
a registered holder of Shares who has not completed either the box labeled
"Special Delivery Instructions" or the box labeled "Special Payment
Instructions" on the Letter of Transmittal or (ii) for the account of any
Eligible Institution. If the certificates evidencing Shares are registered in
the name of a person or persons other than the signer of the Letter of
Transmittal, or if payment is to be made, or delivered to, or certificates
evidencing unpurchased Shares are to be issued or returned to, a person other
than the registered owner or owners, then the tendered certificates must be
endorsed or accompanied by duly executed stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates, with the signatures on the certificates or stock powers guaranteed
by an Eligible Institution as provided in the Letter of Transmittal. See
Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit all required documents to reach the Depositary
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 of
the following guaranteed delivery procedures are duly complied with:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Offeror, is
received by the Depositary, as provided below, prior to the Expiration
Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or a manually signed 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 trading days after the date of such Notice
of Guaranteed Delivery. The term "trading day" is any day on which The
NASDAQ Stock Market, Inc.'s National Market ("NASDAQ") is open for
business.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile transmission or by mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
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<PAGE> 9
TRANSFER FACILITY, IS AT THE ELECTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. DELIVERY OF THIS LETTER OF
TRANSMITTAL AND ACCOMPANYING SHARES WILL BE DEEMED EFFECTIVE AND RISK OF LOSS
WITH RESPECT TO SUCH LETTER OF TRANSMITTAL AND ACCOMPANYING CERTIFICATE(S) WILL
PASS ONLY WHEN SUCH LETTER OF TRANSMITTAL AND ACCOMPANYING CERTIFICATE(S) ARE
ACTUALLY RECEIVED BY THE EXCHANGE AGENT.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for such Shares or a Book-Entry
Confirmation, (ii) a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof), with all required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
(iii) any other documents required by the Letter of Transmittal.
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT "BACKUP" FEDERAL INCOME
TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE OF SHARES
PURCHASED PURSUANT TO THE OFFER, EACH STOCKHOLDER MUST PROVIDE THE DEPOSITARY
WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER ("TIN") AND
CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX
WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF
TRANSMITTAL. FOREIGN HOLDERS MUST SUBMIT A COMPLETED FORM W-8 TO AVOID BACKUP
WITHHOLDING. THIS FORM MAY BE OBTAINED FROM THE DEPOSITARY. SEE INSTRUCTIONS 8
AND 9 SET FORTH IN THE LETTER OF TRANSMITTAL.
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 tender of Shares will be determined by the Offeror, in its sole
discretion, and its determination will be final and binding on all parties. The
Offeror reserves the absolute right to reject any or all tenders of any Shares
that are determined by it not to be in proper form or the acceptance of or
payment for which may, in the opinion of the Offeror, be unlawful. The Offeror
also reserves the absolute right to waive any of the conditions of the Offer,
subject to the limitations set forth in the Merger Agreement, or any defect or
irregularity in the tender of any Shares. The Offeror's interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal and the
Instructions to the Letter of Transmittal) will be final and binding on all
parties. No tender of Shares will be deemed to have been validly made until all
defects and irregularities have been cured or waived. None of the Offeror, the
Parent, the Dealer Manager, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification.
Other Requirements. By executing the Letter of Transmittal as set forth
above (including through delivery of an Agent's Message), a tendering
stockholder irrevocably appoints designees of the Offeror as such stockholder's
attorneys-in-fact and proxies, each with full power of substitution, in the
manner set forth in the Letter of Transmittal, to the full extent of such
stockholder's right with respect to the Shares tendered by such stockholder and
accepted for payment by the Offeror (and any and all other Shares or other
securities issued or issuable in respect of such Shares on or after April 23,
1997). All such powers of attorney and proxies shall be considered coupled with
an interest in the tendered Shares. This appointment is effective when, and only
to the extent that, the Offeror accepts for payment the Shares deposited with
the Depositary. Upon acceptance for payment, all prior powers of attorney and
proxies given by the stockholder with respect to such Shares or other securities
or rights will, without further action, be revoked and no subsequent proxies may
be given or written consent executed (and, if given or executed, will not be
deemed effective). The designees of the Offeror will, with respect to the Shares
and other securities or rights, be empowered to exercise all voting and other
rights of such stockholder as they in their sole judgment deem proper in respect
of any annual or special meeting of the Company's stockholders, or any
adjournment or postponement thereof. The Offeror reserves the right to require
that, in order for Shares to be deemed validly tendered, immediately upon the
Offeror's payment for such Shares, the Offeror must be able to exercise full
voting and other rights with respect to such
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<PAGE> 10
Shares and the other securities or rights issued or issuable in respect of such
Shares, including voting at any meeting of stockholders (whether annual or
special or whether or not adjourned) in respect of such Shares.
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 (i) such stockholder has the full power and authority to
tender, sell, assign and transfer the tendered Shares (and any and all other
Shares or other securities issued or issuable in respect of such Shares on or
after April 23, 1997), and (ii) when the same are accepted for payment by the
Offeror, the Offeror will acquire good and unencumbered title thereto, free and
clear of all liens, restrictions, charges and encumbrances and not subject to
any adverse claims. The Offeror's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering
stockholder and the Offeror upon the terms and subject to the conditions of the
Offer.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment pursuant to the Offer, may also be withdrawn at any time
after June 27, 1997. If purchase of or payment for Shares is delayed for any
reason or if the Offeror is unable to purchase or pay for Shares for any reason,
then, without prejudice to the Offeror's rights under the Offer, tendered Shares
may be retained by the Depositary on behalf of the Offeror and may not be
withdrawn except to the extent that tendering stockholders are entitled to
withdrawal rights as set forth in this Section 4, subject to Rule 14e-1(c) under
the Exchange Act, which provides that no person who makes a tender offer shall
fail to pay the consideration offered or return the securities deposited by or
on behalf of security holders promptly after the termination or withdrawal of
the Offer.
For a withdrawal of Shares tendered pursuant to the Offer to be effective,
a written, telegraphic, telex 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 notice of withdrawal must specify
the name of the person who tendered the Shares to be withdrawn, the number of
Shares to be withdrawn and the name in which the certificates representing such
Shares are registered, if different from that of the person who tendered the
Shares. If certificates for Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution, the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been tendered pursuant to
the procedures for book-entry transfer set forth in Section 3, any notice of
withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and must
otherwise comply with such Book-Entry Transfer Facility's procedures. All
questions as to the form and validity (including time of receipt) of notices of
withdrawal will be determined by the Offeror, in its sole discretion, and its
determination will be final and binding on all parties. None of the Offeror,
Moore, the Dealer Manager, the Depositary, 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.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of certain United States federal income tax
consequences of the Offer and the Merger to holders whose Shares are purchased
pursuant to the Offer or whose Shares are converted to cash in the Merger
(including pursuant to the exercise of appraisal rights). The discussion is for
general information only and does not purport to consider all aspects of federal
income taxation that may be relevant to holders of Shares. The discussion is
based on current provisions of the Internal Revenue Code of 1986, as
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<PAGE> 11
amended (the "Code"), existing, proposed and temporary regulations promulgated
thereunder and administrative and judicial interpretations thereof, all of which
are subject to change. The discussion applies only to holders of Shares in whose
hands Shares are capital assets within the meaning of Section 1221 of the Code,
and may not apply to Shares received pursuant to the exercise of employee stock
options or otherwise as compensation, or to certain types of holders of Shares
(such as insurance companies, tax-exempt organizations and broker-dealers) who
may be subject to special rules. This discussion does not discuss the federal
income tax consequences to a holder of Shares who, for United States federal
income tax purposes, is a non-resident alien individual, a foreign corporation,
a foreign partnership or a foreign estate or trust, nor does it consider the
effect of any foreign, state or local tax laws.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD
CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE
RULES DISCUSSED BELOW TO SUCH HOLDER AND THE PARTICULAR TAX EFFECTS TO SUCH
HOLDER OF THE OFFER AND THE MERGER, INCLUDING THE APPLICATION AND EFFECT OF
STATE, LOCAL AND OTHER INCOME TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for federal income tax purposes. In general, for federal
income tax purposes, a holder of Shares will recognize gain or loss equal to the
difference between the holder's adjusted tax basis in the Shares sold pursuant
to the Offer or converted to cash in the Merger and the amount of cash received
therefor. Gain or loss must be determined separately for each block of Shares
(i.e., Shares acquired at the same cost in a single transaction) sold pursuant
to the Offer or converted to cash in the Merger. Such gain or loss will be
capital gain or loss and will be long-term gain or loss if the holder held the
Shares for more than one year, on the date of sale (in the case of the Offer) or
the effective time of the Merger (in the case of the Merger). The receipt of
cash for Shares pursuant to the exercise of appraisal rights will generally be
taxed in the same manner as described above. Long-term capital gain of
individuals currently is taxed at a maximum federal income tax rate of 28%.
Payments in connection with the Offer or the Merger may be subject to "backup
withholding" at a rate of 31%, unless a holder of Shares (a) is a corporation or
comes within certain exempt categories and, when required, demonstrates this
fact or (b) provides a correct TIN to the payor, certifies as to no loss of
exemption from backup withholding and otherwise complies with applicable
requirements of the backup withholding rules. A holder who does not provide a
correct TIN may be subject to penalties imposed by the Internal Revenue Service.
Any amount paid as backup withholding does not constitute an additional tax and
will be creditable against the holder's federal income tax liability. Each
holder of Shares should consult with his or her own tax advisor as to his or her
qualification for exemption from backup withholding and the procedure for
obtaining such exemption. Holders tendering their Shares in the Offer may
prevent backup withholding by completing the Substitute Form W-9 included in the
Letter of Transmittal. See Section 3. Similarly, holders who convert their
Shares into cash in the Merger may prevent backup withholding by completing a
Substitute Form W-9 and submitting it to the paying agent for the Merger.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are traded on NASDAQ under the symbol PEAK. The following table
sets forth for the periods indicated the high and low sales prices per Share on
NASDAQ as reported by the Company in the 1996 Annual Report on Form 10-K with
respect to the years ended December 31, 1995 and December 31, 1996, and as
reported by published financial sources with respect to quarterly periods after
December 31, 1996.
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<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
Year Ended December 31, 1995:
First Quarter............................................ $21.25 $14.75
Second Quarter........................................... $20.75 $16.75
Third Quarter............................................ $30.50 $25.25
Fourth Quarter........................................... $34.75 $20.00
Year Ended December 31, 1996:
First Quarter............................................ $30.75 $18.25
Second Quarter........................................... $27.25 $17.50
Third Quarter............................................ $24.00 $19.50
Fourth Quarter........................................... $21.75 $10.50
Year Ended December 31, 1997:
First Quarter............................................ $12.75 $ 8.50
Second Quarter (through April 28, 1997).................. $17.75 $11.00
</TABLE>
On April 22, 1997, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, the closing price per
Share as reported on NASDAQ was $13.00. On April 28, 1997, the last full day of
trading prior to the commencement of the Offer, the closing price per Share as
reported on NASDAQ was $17.69. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET
QUOTATIONS FOR THE SHARES.
7. CERTAIN EFFECTS OF THE TRANSACTION.
The purchase of the Shares by the Offeror pursuant to the Offer will reduce
the number of Shares that might otherwise trade publicly and will reduce the
number of holders of Shares, which will adversely affect the liquidity and
market value of the remaining Shares held by stockholders other than the
Offeror.
NASDAQ Listing. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued inclusion
in NASDAQ, which require that an issuer have at least 200,000 publicly held
shares with a market value of at least $1,000,000, held by at least 400
shareholders or 300 shareholders of round lots. If these standards are not met,
the Shares might nevertheless continue to be quoted in the over-the-counter
"additional list" or in one of the "local lists", but if the number of holders
of the Shares falls below 300, or if the number of publicly held Shares falls
below 100,000 or there are not at least two registered and active market makers
for the Shares, the Shares would no longer be "qualified" for NASDAQ reporting
and NASDAQ would cease to provide any quotations. Shares held directly or
indirectly by directors, officers or beneficial owners of more than 10% of the
Shares are not considered as being publicly held for this purpose. In the event
the Shares are no longer eligible for NASDAQ quotation, quotations might still
be available from other sources. The extent of the public market for the Shares
and the availability of such quotations would, however, depend in the number of
holders of Shares remaining at such time, the interest in maintaining a market
in the Shares on the part of securities firms, the possible termination of
registration under the Exchange Act, as described below, and other factors.
According to the Company, as of March 31, 1997, there were approximately 120
holders of record of Shares and 4000 beneficial owners of Shares and as of March
31, 1997, there were 9,305,385 Shares outstanding.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application by the
Company to the Commission if the Shares are not listed on a national securities
exchange and there are fewer than 300 record holders of Shares. It is the
intention of the Offeror to seek to cause an application for such termination to
be made as soon after consummation of the Offer as the requirements for
termination of registration of the Shares are met. If such registration were
terminated, the Company would no longer legally be required to disclose publicly
in proxy materials distributed to stockholders the information which it now must
provide under the Exchange Act or to make public disclosure of financial and
other information in annual, quarterly and other reports required to be filed
with the Commission under the Exchange Act; and the officers, directors and 10%
stockholders of the Company would no longer be subject to the "short-swing"
insider trading reporting and profit recovery
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<PAGE> 13
provisions of the Exchange Act. Furthermore, if such registration were
terminated, persons holding "restricted securities" of the Company may be
deprived of their ability to dispose of such securities under Rule 144 or 144A
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
If the registration of the Shares is not terminated prior to the Merger,
then the Shares will be delisted from all stock exchanges and the registration
of the shares under the Exchange Act will be terminated following the
consummation of the Merger.
Margin Regulations. 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. If registration of Shares under the Exchange Act were terminated,
the Shares would no longer be "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as otherwise set forth herein, the information concerning the
Company contained in this Offer to Purchase, including financial information,
has been taken from or based upon publicly available documents and records on
file with the Commission and other public sources. Although neither the Offeror
nor the Parent has any knowledge that would indicate that statements contained
herein based upon such documents are untrue, neither the Offeror, Moore, the
Parent nor the Dealer Manager assumes any responsibility for the accuracy or
completeness of the information concerning the Company, furnished by the
Company, or contained in such documents and records or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to the
Offeror or the Parent.
The Company is a corporation organized under the laws of Delaware with its
principal executive offices located at 600 Madison Avenue, New York, New York
10022. The Company is the largest systems integrator and full service value
added distributor of bar code based data capture and wireless data
communications systems. The Company focuses principally on industrial
applications, including warehousing, manufacturing and distribution.
Set forth below is certain summary consolidated financial data with respect
to the Company excerpted or derived from financial information contained in the
Company's 1996 Form 10-K. More comprehensive financial information is included
in such report and other documents filed by the Company with the Commission, and
the following summary is qualified in its entirety by reference to such report
and such other documents and all the financial information (including any
related notes) contained therein. Such report and other documents should be
available for inspection and copies thereof should be obtainable in the manner
set forth below.
THE PEAK TECHNOLOGIES GROUP, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR YEARS ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Total operating revenues................................. $215,681 $184,629 $136,481
Operating income (loss).................................. (12,194) 11,966 10,222
Net income (loss)........................................ (12,559) 6,350 4,850
Net earnings (loss) per share............................ (1.37) 0.74 0.71
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
---------------------
1996 1995
-------- --------
<S> <C> <C>
BALANCE SHEET DATA
Total current assets..................................... 80,182 67,526
Total assets............................................. 136,402 103,777
Total current liabilities................................ 48,016 33,134
Long-term debt........................................... 24,928 2,476
Total stockholders' equity............................... 136,402 103,777
</TABLE>
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files periodic reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. The Company is required to disclose in such proxy
statements certain 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 interests of such
persons in transactions with the Company. Such reports, proxy statements and
other information may be inspected at the public reference facilities maintained
by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the regional offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street (Suite 400), Chicago, Illinois 60661. Copies of such material may
also be obtained by mail, at prescribed rates, from the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also
maintains a World Wide Web site on the internet at http://www.sec.gov that
contains reports and other information regarding registrants that file
electronically with the Commission. Such material should also be available for
inspection at the offices of NASDAQ, 1735 K Street, N.W., Washington, D.C.
20006.
9. CERTAIN INFORMATION CONCERNING MOORE, PARENT, FRDK AND THE OFFEROR.
The Offeror is a Delaware corporation. To date, the Offeror has not
conducted any business other than that incident to its formation, the execution
and delivery of the Merger Agreement and the commencement of the Offer.
Accordingly, no meaningful financial information with respect to the Offeror is
available. The Offeror is a wholly owned subsidiary of FRDK. The principal
executive office of the Offeror is located at 275 N. Field Drive, Lake Forest,
Illinois 60045.
FRDK, a New York corporation, is a wholly owned subsidiary of Parent. The
principal executive office of FRDK is located at 275 N. Field Drive, Lake
Forest, Illinois 60045.
Parent, a Delaware corporation, is a wholly owned subsidiary of Moore. The
principal executive office of Parent is located at 275 N. Field Drive, Lake
Forest, Illinois 60045. Parent is the largest subsidiary of Moore with $1.634
billion in revenues in 1996.
Moore was incorporated under the laws of Ontario in 1882. Its registered
office is at Suite 7200, P.O. Box 78, 1 First Canadian Place, Toronto, Ontario
Canada M5X 1G5.
Moore is the leading global partner helping companies communicate through
print and digital technologies. Moore designs, manufactures and delivers
business communications products, services in business forms and systems,
business equipment, print management outsourcing, commercial and digital
printing, labels, personalized direct mail, statement printing and related
services. Moore has approximately 19,000 employees and over 100 manufacturing
facilities serving customers in 47 countries. Sales in 1996 were U.S.$2.5
billion.
Moore operates in two key market segments: (1) Forms, Print Management and
Related Products which includes Labels and Label Systems and (2) Customer
Communication Services. Moore operates on a decentralized strategic business
unit basis within each geographical location. In order to better serve customer
needs for sales and marketing, Moore also specializes by industry segment and
process application. Moore operates in the following geographic segments: (1)
Canada, (2) United States, (3) Europe, (4) Latin America and (5) Asia Pacific.
12
<PAGE> 15
Set forth below is certain summary consolidated financial data with respect
to Moore and its subsidiaries excerpted or derived from financial information
contained in Moore's Annual Report on Form 10-K for the year ended December 31,
1996. More comprehensive financial information is included in such report and
other documents filed by Parent with the Commission, and the following summary
is qualified in its entirety by reference to such report and such other
documents and all the financial information (including any related notes)
contained therein.
MOORE CORPORATION LIMITED
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR YEARS ENDED DECEMBER 31,
----------------------------------------
1996 1995 1994
---------- ---------- ----------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE
DATA)
<S> <C> <C> <C>
STATEMENT OF INCOME DATA
Total revenues....................................... $2,517,673 $2,602,254 $2,406,048
Income from continuing operations.................... 142,608 113,612 135,263
Net income........................................... 149,923 267,501 121,400
Net earnings per share............................... $ 1.50 $ 2.68 $ 1.22
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------
1996 1995
---------- ----------
(U.S. DOLLARS, IN
THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA
Total assets......................................... $2,224,040 $2,235,638
Total liabilities.................................... 674,221 747,468
Total stockholders' equity........................... 1,549,819 1,488,170
</TABLE>
On April 23, 1997, Moore announced that its Board of Directors approved two
programs to repurchase shares of its common stock. The first program involves a
repurchase of 12,000,000 shares at a range between CDN$28.00 and CDN$32.00.
Moore is making this offer through a Dutch auction tender, which allows
shareholders to tender shares at any price in the range. The purchase price will
be the lowest price within the range at or below which up to 12,000,000 shares
are tendered. Under the second program, Moore intends to purchase up to
5,000,000 shares in a normal course issuer bid through the facilities of the
Toronto and Montreal stock exchanges during the 12 month period commencing in
June 1997 after obtaining usual regulatory approvals.
Moore announced on April 23, 1997 that it had entered into an agreement in
principal to acquire United Ad Label Co., Inc. ("United Ad Label") for an
undisclosed amount. Moore expects to complete the acquisition through an
indirect wholly owned subsidiary by May 30, 1997. United Ad Label specializes in
supplying pressure sensitive labels to the healthcare industry. There can be no
assurance that this acquisition will be completed.
Moore is subject to the informational requirements of the Exchange Act and
in accordance therewith files periodic reports and other information with the
Commission relating to its business, financial condition and other matters. Such
reports and other information are available for inspection and copying at the
offices of the Commission in the same manner as set forth with respect to the
Company in Section 8 and at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
The name, citizenship, business address, present principal occupation and
material positions held during the past five years of each of the directors and
executive officers of Moore, the Parent, FRDK and the Offeror are set forth in
Annex I to this Offer to Purchase.
Except as described in this Offer to Purchase, none of the Offeror, the
Parent, or to the best knowledge of the Offeror or the Parent, any of the
persons listed in Annex I to this Offer to Purchase owns or has any right to
acquire any Shares and none of them has effected any transaction in the Shares
during the past 60 days.
13
<PAGE> 16
Except as set forth in this Offer to Purchase, none of the Offeror, the
Parent or, to the best knowledge of the Offeror or the Parent, any of the
persons listed in Annex I hereto, has any contract, arrangement, understanding
or relationship with any 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 the voting of any such securities,
joint ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies. Except as set
forth in this Offer to Purchase, there have been no contacts, negotiations or
transactions between the Offeror or the Parent, or, to the best of their
knowledge, any of the persons listed in Annex I hereto, on the one hand, and the
Company or its affiliates, on the other hand, concerning a merger, consolidation
or acquisition, a tender offer or other acquisition of securities, an election
of directors, or a sale or other transfer of a material amount of assets. Except
as described in this Offer to Purchase, none of the Offeror, the Parent or, to
the best knowledge of the Parent or the Offeror, any of the persons listed in
Annex I hereto, has had any transaction with the Company or any of its executive
officers, directors or affiliates that would require disclosure under the rules
and regulations of the Commission applicable to the Offer.
10. SOURCE AND AMOUNT OF FUNDS.
The Offeror plans to obtain all funds needed for the Offer and the Merger
through a capital contribution and loans that will be made by FRDK to the
Offeror. While FRDK intends to borrow funds for the bulk of such capital
contribution pursuant to a credit agreement (as amended by a First Amendment on
September 1, 1995 and by a Second Amendment as of August 8, 1996, the "Credit
Agreement") entered into between Moore, FRDK and the Bank of Nova Scotia
("ScotiaBank") on August 10, 1995 for a US $1,100,000,000 revolving credit
facility (the "Credit Facility"), this Offer is not conditioned upon any
financing arrangements. The total amount of funds required by the Offeror to
consummate the Offer and the Merger is expected to be approximately $175 million
(excluding related fees and expenses). The proceeds of the loans may be used,
among other things, for general corporate purposes of Moore and its direct and
indirect subsidiaries (including, subject to certain limitations, for the
acquisition of other businesses). Moore has guaranteed FRDK's payment
obligations under the Credit Agreement.
The Credit Agreement provides that interest on the loans outstanding under
the Credit Agreement will bear interest, at FRDK's option, at either
Scotiabank's (i) alternate base rate or (ii) reserve-adjusted LIBO rate plus
25.0 basis points. A commitment fee (the "Commitment Fee") will be paid with
respect to the daily average unused portion of the Credit Agreement commitment
amount (whether or not then available), in an amount equal to 6.0 basis points
per annum and will mature on August 7, 1997.
The Credit Agreement includes conditions precedent customary for the type
of transaction proposed including, without limitation: (i) for the first
borrowing under the Credit Facility, no material adverse change in the financial
condition, operations, or prospects of Moore on a consolidated basis since
December 31, 1994; and for each subsequent borrowing under the Credit Facility,
no material adverse change in the financial condition, operations, or properties
of Moore on a consolidated basis since December 31, 1994; (ii) receipt of
closing certificates, opinions of counsel, and related documentation customary
for the type of transaction involved; (iii) no event of default or condition
which with, the giving of notice or the passage of time (or both) would
constitute an event of default shall have occurred and be continuing; and (iv)
representations and warranties made in the Credit Agreement are accurate in all
material respects.
The Credit Agreement contains representations and warranties from both FRDK
and Moore that are customary for transactions of similar size and type.
The Credit Agreement contains affirmative and negative covenants customary
for transactions of similar size and type, and these covenants are binding on
both FRDK and Moore. Under the Credit Agreement, these covenants include,
without limitation, restrictions on the incurrence of liens or other
encumbrances by Moore and its subsidiaries, except for the following: (a) liens
and encumbrances covering margin stock, (b) liens and encumbrances securing
indebtedness not to exceed US $100,000,000 in the aggregate, and (c) certain
other negotiated exceptions.
14
<PAGE> 17
The Credit Agreement includes certain financial covenants. One of these is
a specified maximum consolidated total debt to total capitalization ratio
(defined as total debt of specified types (including indebtedness for borrowed
money, capitalized lease obligations, letter of credit repayment obligations) to
the sum of such debt plus book equity) of Moore not to exceed 55% (all
accounting terms to be interpreted, and all accounting determinations and
computations to be made, in accordance with Canadian generally accepted
accounting principles, as conformed to U.S. generally accepted accounting
principles). Another financial covenant restricts the maximum amount of
purchase-money debt and specified contingent liabilities, including guarantees,
in respect of debt issued by persons that are not majority-owned subsidiaries of
Moore.
The Credit Agreement contains customary events of default, including
without limitation (i) a cross-default to other indebtedness of Moore and any of
its subsidiaries, with a principal amount in excess of U.S. $25,000,000 (subject
to certain exceptions, including inter-company indebtedness where the relevant
defaults have been waived by the holder of such indebtedness), and (ii) a
"Change of Control" (as defined in the Credit Agreement) of Moore.
The Credit Agreement contains certain other customary provisions, including
indemnification rights for "Lenders" (as defined in the Credit Agreement),
assignment and participation rights for Lenders, expense payment undertakings,
waivers of jury trial, choice of law provisions and other terms specified in the
Credit Agreement.
The foregoing summary of the Credit Agreement does not purport to be
complete and is qualified in its entirety by reference to the Credit Agreement,
a copy of which (together with its amendments) is attached hereto as an exhibit.
If sufficient funds are not available under the Credit Agreement for any
reason, Moore will supply funds from cash on hand.
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY.
On October 18, 1996, the Company's financial advisor, William Blair &
Company, L.L.C. ("William Blair"), received an inquiry, through Lazard Freres &
Co. LLC ("Lazard Freres") , the financial advisor to Parent, pursuant to which
Lazard Freres communicated Parent's interest in investigating a potential
transaction with the Company. On October 21, 1996, the Company received certain
information regarding Parent through William Blair. On October 28, 1996, the
Company informed Parent that it was not interested in pursuing a transaction at
that time, but indicated that it would be willing to consider a specific
proposal from Parent should Parent desire to present such a proposal.
On November 27, 1996, Lazard Freres contacted the Company to arrange a
meeting between the Company and Parent. The Company agreed to an "informational
meeting." Management of the Company and Parent met on December 6, 1996 at the
offices of Lazard Freres and discussed certain information regarding the
Company.
On February 18, 1997, the Company formally retained William Blair as a
financial advisor with respect to the potential transaction with Parent and on
February 19, 1997, the Company and Parent entered into a confidentiality and
standstill agreement.
On February 28, 1997, representatives from Parent's management visited the
Company's corporate offices in New York City at which time confidential data was
presented, explained and discussed. Between March 1-17, 1997, the Company
delivered additional requested information to Parent.
On March 28, 1997, Parent communicated to the Company, by telephone, that
it would consider a transaction in the form of a tender offer followed by a
merger, with Parent offering to acquire all outstanding shares for $17.00 per
share (subject to negotiation of definitive documentation and completion of due
diligence), which was confirmed in writing on March 31, 1997. On that day, in
conjunction with its public announcement of 1996 earnings, the Company publicly
announced that it had received an offer relating to an acquisition of the
Company at a premium to its then current per share trading price.
15
<PAGE> 18
After receiving a revised, written indication of Parent's proposal on April
2, 1997 increasing the purchase price to $18.50 per share (subject to
negotiation of definitive documentation and completion of due diligence) the
Company and Parent entered into an exclusivity agreement on April 4, 1997. From
that point until the execution of the Merger Agreement, Parent conducted an
extensive due diligence investigation of the Company and its business and the
parties circulated and negotiated drafts of the Merger Agreement and other
related agreements.
During this time, the Company's Board of Directors met on several occasions
to discuss the proposed transaction with Parent and adopted resolutions
authorizing negotiation of the Proposed transaction.
Following negotiation of definitive documentation and completion of due
diligence, the parties agreed to a final purchase price of $18.00 per share.
At a meeting of the Company's Board of Directors held on April 22, 1997,
the Company's Board of Directors considered and discussed the terms and
conditions of the Merger Agreement. At such meeting, William Blair delivered its
fairness opinion stating that the cash consideration to be received by the
Company's stockholders pursuant to the Offer and Merger was fair to such
stockholders from a financial point of view. By unanimous vote of the directors
present at the meeting, the Company's Board of Directors approved the Merger
Agreement and the transactions contemplated thereby. The Company's Board of
Directors also adopted resolutions (i) stating that the Merger Agreement was in
the best interest of the stockholders, and (ii) calling for the Company to file
a Recommendation Statement on Schedule 14D-9 recommending that stockholders
tender their Shares pursuant to the Offer.
As a part of the transaction, the parties agreed to restructure the
severance arrangements of certain employees as described more fully in the
Schedule 14D-9 filed by the Company in connection with this transaction.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY.
Purpose. The purpose of the Offer is to enable Parent to acquire control
of, and the entire equity interest in, the Company. The Offer, as the first step
in the acquisition of the Company, is intended to facilitate the acquisition of
all the Shares. The purpose of the Merger is to acquire all Shares not tendered
and purchased pursuant to the Offer or otherwise.
Appraisal Rights. Holders of Shares do not have appraisal rights as a
result of the Offer. However, if the Merger is consummated, holders of Shares at
the effective time of the Merger will have certain rights pursuant to the
provisions of Section 262 of the DGCL ("Section 262") to dissent and demand
appraisal of their Shares. Under Section 262, dissenting stockholders who comply
with the applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of their Shares (exclusive of any element of
value arising from the accomplishment or expectation of the Merger) and to
receive payment of such fair value in cash, together with a fair rate of
interest, if any. Any such judicial determination of the fair value of Shares
could be based upon factors other than, or in addition to, the price per Share
to be paid in the Merger or the market value of the Shares. The value so
determined could be more or less than the price per Share to be paid in the
Merger.
The foregoing summary of Section 262 does not purport to be complete and is
qualified in its entirety by reference to Section 262. FAILURE TO FOLLOW THE
STEPS REQUIRED BY SECTION 262 OF THE DGCL FOR PERFECTING APPRAISAL RIGHTS MAY
RESULT IN THE LOSS OF SUCH RIGHTS.
Going Private Transactions. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain "going private" transactions.
The Offeror does not believe that Rule 13e-3 will be applicable to the Merger
unless the Merger is consummated more than one year after the termination of the
Offer. If applicable, Rule 13e-3 requires, among other things, that certain
financial information concerning the fairness of the Merger 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
Merger.
Except as otherwise described in this Offer to Purchase, the Offeror and
Parent have no current plans or proposals that would relate to, or result in,
any extraordinary corporate transaction involving the Company, such as a merger,
reorganization or liquidation involving the Company or any of its subsidiaries,
a sale or transfer of a material amount of assets of the Company or any of its
subsidiaries, any change in the Company's
16
<PAGE> 19
capitalization or dividend policy or any other material change in the Company's
business, corporate structure or personnel.
13. THE MERGER AGREEMENT.
The Merger Agreement. The Merger Agreement provides that following the
satisfaction or waiver of the conditions described below under "Conditions to
the Merger", the Offeror will be merged with and into the Company, and each then
outstanding Share (other than Shares owned by the Company, any subsidiary of the
Company, Parent, the Offeror, any other subsidiary of Parent or by stockholders,
if any, who are entitled to and who properly exercise dissenters' rights under
Delaware law) will be converted into the right to receive an amount in cash
equal to the price per Share paid pursuant to the Offer.
Vote Required To Approve Merger. The DGCL requires, among other things,
that the adoption of any plan of merger or consolidation of the Company must be
approved by the Board of Directors and generally by the holders of the Company's
outstanding voting securities. The Board of Directors of the Company has
approved the Offer and the Merger; consequently, the only additional action of
the Company that may be necessary to effect the Merger is approval by the
Company's stockholders if the "short-form" merger procedure described below is
not available. Under the DGCL, the affirmative vote of holders of a majority of
the outstanding Shares (including any Shares owned by the Offeror) is generally
required to approve the Merger. If the Offeror acquires, through the Offer or
otherwise, voting power with respect to a majority of the outstanding Shares
(which would be the case if the Minimum Condition were satisfied and the Offeror
were to accept for payment Shares tendered pursuant to the Offer), it would have
sufficient voting power to effect the Merger without the vote of any other
stockholder of the Company.
The DGCL also provides that if a parent company owns at least 90% of each
class of stock of a subsidiary, the parent company can effect a short-form
merger with that subsidiary without the action of the other stockholders of the
subsidiary. Accordingly, if, as a result of the Offer or otherwise, the Offeror
owns at least 90% of the outstanding Shares, the Offeror could, and intends to,
effect the Merger without prior notice to, or any action by, any other
stockholder of the Company.
Conditions to the Merger. The Merger Agreement provides that the Merger is
subject to the satisfaction of certain conditions, including the following: (a)
if required by applicable law, the Merger Agreement and the transactions
contemplated thereby shall have been approved by the affirmative vote of the
holders of a majority of the Shares; (b) no statute, rule, regulation, executive
order, decree, temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other Federal,
state or local government or any court, tribunal, administrative agency or
commission or other governmental or other regulatory authority or agency,
domestic, foreign or supranational (a "Governmental Entity") or other legal
restraint or prohibition preventing the consummation of the Merger shall be in
effect; provided, however, that each of the Company, the Offeror and Parent
shall have used reasonable efforts to prevent the entry of any such injunction
or other order and to appeal as promptly as possible any injunction or other
order that may be entered; (c) the Offeror shall have previously accepted for
payment and paid for Shares pursuant to the Offer; and (d) the applicable
waiting periods under the HSR Act and the German Competition Act shall have
expired or been terminated.
Termination of the Merger Agreement. The Merger Agreement may be
terminated at any time prior to the effective time of the Merger, whether before
or after approval of the terms of the Merger Agreement by the stockholders of
the Company:
(1) by mutual written consent of Parent and the Company;
(2) by either Parent or the Company if (a)(i) as a result of the
failure of any of the conditions to the Offer, the Offer shall have
terminated or expired in accordance with its terms without the Offeror
having accepted for payment any Shares pursuant to the Offer or (ii) the
Offeror shall not have accepted for payment any Shares pursuant to the
Offer prior to November 23, 1997, provided, however, that the right to
terminate the Merger Agreement pursuant to either clause (2)(a)(i) or
(2)(a)(ii) shall not be available to any party whose failure to perform any
of its obligations under the Merger Agreement results
17
<PAGE> 20
in the failure of any such condition or if the failure of such condition
results from facts or circumstances that constitute a breach of
representation or warranty under the Merger Agreement by such party; or (b)
if any Governmental Entity shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the acceptance for payment of, or payment for, Shares pursuant
to the Offer or the Merger and such order, decree or ruling or other action
shall have become final and nonappealable;
(3) by Parent or the Offeror (a) prior to the purchase of Shares
pursuant to the Offer, in the event of a breach by the Company of any
representation, warranty, covenant or other agreement contained in the
Merger Agreement which (i) would give rise to the failure of a condition
set forth in paragraph (e) or (f) of Section 15 and (ii) cannot be or has
not been cured within 20 days after the giving of written notice to the
Company; or (b) if either Parent or the Offeror is entitled to terminate
the Offer as a result of (i) the Board of Directors of the Company or any
committee thereof having withdrawn or modified in a manner adverse to
Parent or the Offeror its approval or recommendation of the Offer, the
Merger or the Merger Agreement, or approved or recommended any Takeover
Proposal (as defined below), (ii) the Company having entered into any
agreement with respect to any Superior Proposal (as defined below) under
circumstances described below under "Takeover Proposals" or (iii) the Board
of Directors of the Company or any committee thereof having resolved to
take any of the actions described in clauses (3)(b)(i) or (3)(b)(ii); or
(4) by the Company (a) in connection with entering into a definitive
agreement in accordance with the terms of the Merger Agreement as described
below under "Takeover Proposal", provided it has complied with all
provisions thereof, including the notice provisions therein, and that it
makes simultaneous payment of the Termination Fee (as defined below under
"Fees and Expenses"), (b) if Parent or the Offeror shall have breached in
any material respect any of their respective representations, warranties,
covenants or other agreements contained in the Merger Agreement, which
breach or failure to perform is incapable of being cured or has not been
cured within 20 days after the giving of written notice to Parent or the
Offeror, except, in any case, such breaches and failures which are not
reasonably likely to affect adversely Parent's or the Offeror's ability to
complete the Offer or the Merger or (c) if Parent, Offeror or any of their
affiliates shall have failed to commence the Offer on or prior to five
business days following the date of the initial public announcement of the
Offer; provided, that the Company may not terminate the Merger Agreement
pursuant to this clause 4(c) if the Company is at such time in breach of
its obligations under the Merger Agreement such as to cause a material
adverse effect on the Company and its Subsidiaries, taken as a whole.
Takeover Proposals. The Merger Agreement provides that the Company will
not, nor will it permit any of its subsidiaries to, 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, directly or indirectly, (1) to solicit, initiate or encourage
(including by way of furnishing information), or take any other action to
facilitate, any inquiries or the making of any proposal which constitutes, or
may reasonably be expected to lead to, any Takeover Proposal or (2) to
participate in any discussions or negotiations regarding any Takeover Proposal;
provided, however, that if, at any time prior to the acceptance for payment of
Shares pursuant to the Offer, the Board of Directors of the Company determines
in good faith, after consultation with 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 unsolicited Takeover
Proposal, and subject to compliance with the notification provisions discussed
below, (i) furnish information with respect to the Company to any person
pursuant to a confidentiality agreement in a form approved by the Company and
Parent (such approval not to be unreasonably withheld) and (ii) participate in
negotiations regarding such Takeover Proposal. The Merger Agreement defines
"Takeover Proposal" as any inquiry, proposal or offer from any person relating
to any direct or indirect acquisition or purchase of 20% or more of the assets
of the Company and its subsidiaries or 20% 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 20% or more of any class of equity securities of the Company or any of
its subsidiaries, any merger, consolidation, business combination, sale of
substantially all the assets, recapitalization, liquidation, dissolu-
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<PAGE> 21
tion or similar transaction involving the Company or any of its subsidiaries,
other than the transactions contemplated by the Merger Agreement, or any other
transaction the consummation of which could reasonably be expected to impede,
interfere with, prevent or materially delay the Offer or the Merger or which
would reasonably be expected to dilute materially the benefits to Parent of the
transactions contemplated thereby.
The Merger Agreement provides further that, except as described below,
neither the Board of Directors of the Company nor any committee thereof shall
(i) withdraw or modify, or propose to withdraw or modify, in a manner adverse to
Parent, the approval or recommendation by such Board of Directors or such
committee of the Offer, the Merger Agreement or the Merger, (ii) approve or
recommend, or propose to approve or recommend, any Takeover Proposal or (iii)
cause the Company to enter into any agreement with respect to any Takeover
Proposal. Notwithstanding the foregoing, in the event that prior to the
acceptance for payment of Shares pursuant to the Offer the Board of Directors of
the Company determines in good faith, after consultation with 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, such Board of Directors may
(subject to the other provisions regarding Takeover Proposals) withdraw or
modify its approval or recommendation of the Offer, the Merger Agreement or the
Merger, approve or recommend a Superior Proposal, cause the Company to enter
into an agreement with respect to a Superior Proposal or terminate the Merger
Agreement, in each case at any time after the second business day following
Parent's receipt of written notice (a "Notice of Superior Proposal") advising
Parent that the Board of Directors of the Company has received a Superior
Proposal, specifying the material terms and conditions of such Superior Proposal
and identifying the person making such Superior Proposal. In the event that a
Notice of Superior Proposal is delivered and any material term or condition of
the Superior Proposal described therein is subsequently changed, the Company
must deliver a supplemental Notice of Superior Proposal describing such change
and may withdraw or modify its approval or recommendation of the Offer, the
Merger Agreement and the Merger, approve or recommend the modified Superior
Proposal or cause the Company to enter into an agreement with respect to the
modified Superior Proposal only at a time that is after the second business day
following Parent's receipt of the supplemental Notice of Superior Proposal. In
addition, if the Company proposes to enter into an agreement with respect to any
Takeover Proposal, it must concurrently with entering into such agreement pay,
or cause to be paid, to Parent the Termination Fee. See "Fees and Expenses". For
purposes of the Merger Agreement, a "Superior Proposal" means any bona fide
proposal to acquire, directly or indirectly, for consideration consisting of
cash and/or securities, more than 50% of the Shares then outstanding or all or
substantially all the assets of the Company and otherwise on terms which the
Board of Directors of the Company determines in its good faith judgment (based
on the advice of a financial advisor of nationally recognized reputation) to be
more favorable to the Company's stockholders than the Offer and the Merger.
In addition to the obligations of the Company described in the preceding
two paragraphs, the Merger Agreement provides that the Company shall immediately
advise Parent orally and in writing of any request for information or of any
Takeover Proposal, the material terms and conditions of such request or Takeover
Proposal and the identity of the person making any such request or Takeover
Proposal. The Company is further required under the terms of the Merger
Agreement to keep Parent fully informed of the status and details (including
amendments or proposed amendments) of any such request or Takeover Proposal.
The Merger Agreement provides that nothing contained therein 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 if, in the good faith judgment of
the Board of Directors of the Company, after consultation with outside counsel,
failure to so disclose would be inconsistent with its fiduciary duties to the
Company's stockholders under applicable law; provided, however, that neither the
Company nor its Board of Directors nor any committee thereof shall, except as
permitted by the Merger Agreement and as described above, withdraw or modify, or
propose to withdraw or modify, its position with respect to the Merger or
approve or recommend, or propose to approve or recommend, a Takeover Proposal.
Fees and Expenses. The Merger Agreement provides that the Company shall
pay to Parent an amount equal to $5.6 million (the "Termination Fee"), plus an
amount, not to exceed $1.0 million, equal to Parent's
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<PAGE> 22
actual and reasonably documented out-of-pocket fees and expenses incurred by
Parent and Offeror in connection with the Offer, the Merger, the Merger
Agreement and the consummation of the transactions contemplated by the Merger
Agreement, which shall be payable in same day funds, if (a) the Company shall
terminate the Merger Agreement pursuant to clause 4(a) under "Termination of the
Merger Agreement," (b) Parent shall terminate the Merger Agreement pursuant to
clause 3(b) under "Termination of the Merger Agreement", or (c) either the
Company or Parent terminates the Merger Agreement pursuant to clause 2(a)(i) and
(ii) under "Termination of the Merger Agreement," and (i) prior thereto there
shall have been publicly announced another Takeover Proposal or an event set
forth in paragraph (i) of Section 15 shall have occurred and (ii) a Takeover
Proposal shall be consummated on or prior to April 30, 1998.
The Termination Fee and Parent's good faith estimate of its expenses shall
be paid (1) in the case of terminations referenced in subparts (a) and (b)
above, concurrently with any such termination and (2) in the case of termination
referenced in subpart (c) above, at the time of consummation of a Takeover
Proposal as described in subpart (c)(ii) above, together in each case with
delivery of a written acknowledgement by the Company of its obligation to
reimburse Parent for its actual expenses in excess of such estimated expenses
payment.
Conduct of Business by the Company. The Merger Agreement provides that,
except as otherwise expressly contemplated by the Merger Agreement or to the
extent that Parent shall otherwise consent in writing, until such time as
Parent's designees constitute a majority of the Board of Directors of the
Company, (a) the Company and its subsidiaries will, subject to certain
exceptions set forth in the Merger Agreement, carry on their respective
businesses in the ordinary course (it being understood that the foregoing does
not cover future events resulting from public announcement of the Offer and the
Merger) and use all reasonable efforts to preserve intact their current business
organizations, keep available the services of their current officers and
employees and preserve their relationships with customers, suppliers and others
having business dealings with them; (b) the Company will not, and will not
permit any of its subsidiaries to, (i) declare or pay any dividends on or make
other distributions in respect of any of its capital stock (other than dividends
by a direct or indirect subsidiary of the company to its parent), (ii) split,
combine or reclassify any of its capital stock or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (iii) repurchase, redeem or
otherwise acquire any shares of capital stock of the Company or its subsidiaries
or any other securities thereof except pursuant to contracts existing on the
date of the Merger Agreement; (c) the Company will not, and will not permit any
of its subsidiaries to, issue, deliver, sell, pledge or encumber, or authorize
the issuance, delivery, sale, pledge or encumbrance of, any shares of its
capital stock of any class or any securities convertible into, or rights,
warrants, calls, subscriptions or options to acquire, any such shares or
convertible securities, or any other ownership interest in the Company, other
than (i) the issuance of Shares upon the exercise of stock options outstanding
on the date of the Merger Agreement in accordance with their terms, (ii) the
issuance of Shares upon the exercise of Warrants outstanding on the date of the
Merger Agreement in accordance with their terms, or (iii) the issuance of Shares
under Employee Stock Purchase Plans in accordance with clause (d) under
" -- Stock Options; Warrants;" (d) the Company will not, and it will not permit
any of its subsidiaries to, amend or propose to amend its certificate of
incorporation or its by-laws (or similar organizational documents); (e) the
Company will not, and it will not permit any of its subsidiaries to, acquire or
agree to acquire (i) (by merging, consolidating, acquiring stock or assets or by
any other manner) any business, corporation, partnership, joint venture,
association or other business organization or division thereof or (ii) any
assets that are material, individually or in the aggregate, to the Company and
its subsidiaries taken as a whole, except purchases of inventory in the ordinary
course of business consistent with past practice; (f) the Company will not, and
it will not permit any of its subsidiaries to, sell, lease, license, encumber or
otherwise dispose of, or agree to sell, lease, license, encumber or otherwise
dispose of, any of its assets, other than sales or licenses of its products to
customers and dispositions of equipment, in each case in the ordinary course of
business consistent with past practice; (g) the Company will not, and it will
not permit any of its subsidiaries to, (i) incur or guarantee indebtedness for
borrowed money or issue or sell any debt securities or warrants or rights to
acquire any debt securities of the Company (or any of its subsidiaries),
guarantee any debt securities of others, enter into any "keep-well" or other
agreement to maintain any financial statement condition of another person or
enter into any arrangement having the economic effect of any of the foregoing,
except for working capital borrowings incurred in the ordinary course of
business consistent with past practice or (ii) make any loans, advances or
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<PAGE> 23
capital contributions to, or investments in, any other person, other than, with
respect to both of the foregoing clauses (i) and (ii), (A) to the Company or any
direct or indirect wholly owned subsidiary of the Company or (B) any advances to
employees in accordance with past practice; (h) the Company will confer with
Parent on a regular basis as reasonably requested by Parent, report on
operational matters and promptly advise Parent of any material adverse change
with respect to the Company and will promptly provide to Parent (or its counsel)
copies of all filings made by the Company with any governmental entity in
connection with the Merger Agreement and the transactions contemplated thereby;
(i) neither the Company nor any of its subsidiaries will make any tax election
that would have a material adverse effect on the Company or any of its
subsidiaries or settle or compromise any material income tax liability of the
Company or any of its subsidiaries, and the Company will, before filing any
material tax return of the Company or any of its subsidiaries, consult with
Parent and its advisors and shall take such positions or make such elections as
the Company and Parent shall jointly agree; (j) neither the Company nor any of
its subsidiaries will make or agree to make any new capital expenditure or
expenditures other than in accordance with the Company's 1997 Operating Plan;
(k) the Company will not, and it will not permit any of its subsidiaries to,
discharge any claims, liabilities or obligations, other than the discharge of
certain liabilities of the Company in the ordinary course of business consistent
with past practice or in accordance with their terms; (l) except in the ordinary
course of business, neither the Company nor any of its subsidiaries shall (i)
modify, amend or terminate any material contract or agreement to which the
Company or such subsidiary is a party, (ii) waive, release or assign any
material rights or claims or (iii) grant any rights to Intellectual Property
except for licenses in the ordinary course of business consistent with past
practice (employment agreements entered into in connection with the Merger are
"material contracts or agreements"); (m) the Company and its subsidiaries will
not, except as may be required by law and except as otherwise specifically
permitted, (A) enter into, adopt, amend or terminate any Company Benefit Plan
(as defined) or other employee benefit plan or any agreement, arrangement, plan
or policy for the benefit of any director, officer or current or former
employee, (B) except for normal increases or bonuses in the ordinary course of
business consistent with past practice that, in the aggregate, do not result in
a material increase in benefits or compensation expense to the Company, increase
in any manner the compensation or fringe benefits of, or pay any bonus to, any
director, officer or employee or (C) pay any benefit not required by any plan or
arrangement as currently in effect (including the granting of, acceleration of
exercisability of or vesting of stock options, stock appreciation rights or
restricted stock); (n) neither the Company nor any of its subsidiaries will
authorize any of, or commit or agree to take any of, the foregoing actions; and
(o) the company shall deliver to Parent as promptly as practicable following the
date of the Merger Agreement a fully executed engagement letter from Goldman,
Sachs & Co. in the form of that attached to the Merger Agreement as Schedule
6.01(o). Pursuant to the Merger Agreement, the Company has agreed that, without
the prior consent of Parent, the Company will not seek a fairness opinion from
Goldman Sachs & Co.
In addition to the foregoing, the Company has agreed that it will not take
any action, or permit any of its subsidiaries to take any action, that would
result in (a) any of the representations and warranties of the Company set forth
in the Merger Agreement that are qualified as to materiality becoming untrue,
(b) any of such representations and warranties that are not so qualified
becoming untrue in any material respect or (c) any of the conditions to the
Offer set forth in Section 15 not being satisfied.
Board of Directors. The Merger Agreement provides that promptly upon the
acceptance for payment of, and payment for, any Shares by the Offeror pursuant
to the Offer, the Offeror shall be entitled to designate, subject to compliance
with Section 14(f) of the Exchange Act, a majority of the directors on the
Company's Board of Directors, and the Company and its Board of Directors shall,
at such time, take all such action needed to cause the Offeror's designees to be
appointed to, and to constitute a majority of, the Company's Board of Directors.
Subject to applicable law, the Company has agreed to take all action requested
by Parent necessary to effect any such election, including mailing to its
stockholders the Information Statement containing the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, which
Information Statement is attached as Schedule I to the Schedule 14D-9 filed by
the Company in connection with this transaction.
Stock Options; Warrants. The Merger Agreement provides that (a) the
Company will amend The Peak Technologies Group, Inc. Nonqualified Stock Option
Plan, The Peak Technologies Group, Inc. Incentive
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<PAGE> 24
Stock Option Plan, the Peak Technologies Group, Inc. 1995 Non-Employee Directors
Stock Option Program and any other program or plan pursuant to which there are
holders of options to purchases Shares granted by the Company (collectively, the
"Stock Option Plans") to provide that if the optionees do not exercise their
unexercised options within thirty (30) days of a notice that the Company
proposes to merge into another corporation, to the extent that an optionee does
not exercise within thirty (30) days of the notice and signs a written
acknowledgement, the optionee shall receive, in settlement of each option held
by the optionee, a "cash amount" (less any applicable withholding taxes) with
respect to the number of previously unexercised Shares underlying the option
immediately prior to the effectiveness of the Merger. Each option shall
terminate as of the effectiveness of the Merger. The cash amount payable for
each option shall equal the product of (i) the Merger Consideration minus the
exercise price per Share of each such option and (ii) the number of previously
unexercised Shares covered by each such option; (b) the Company will provide
such notice referenced in clause (a) of this section to participants in its
Stock Option Plans; (c) except as may be otherwise agreed to by Parent or Sub
and the Company, the Company's Stock Option Plans shall terminate as of the
effective time and the provisions in any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any of its subsidiaries shall be deleted as of
the effective time; (d) the Company will use its best efforts so that following
the effective time no holder of employee stock options will have any right to
receive Shares upon exercise of an employee stock option, (e) outstanding
purchase rights under the Company's Employees Stock Purchase Plan and Global
Employees Stock Purchase Plan (the "Company ESPPs") shall be exercised upon the
earlier of (i) the next scheduled purchase date under the Company ESPPs or (ii)
immediately prior to the effective time of the Merger, and each participant in
the Company ESPPs shall accordingly be issued Shares at that time which shall be
canceled at the effective time of the Merger and converted into the right to
receive the Merger Consideration for those Shares. The Company ESPPs shall
terminate with such exercise date, and no purchase rights shall be subsequently
granted or exercised under the Company ESPPs.
The Merger Agreement, however, provides that, notwithstanding anything to
the contrary in clauses (a) through (d) above, if it is determined that
compliance with any of the actions described in such clauses would cause any
individual subject to Section 16 of the Exchange Act to become subject to the
profit recovery provisions thereof, any Stock Options held by such individual
will be canceled or purchased, as the case may be, at the effective time of the
Merger or at such later time as may be necessary to avoid application of such
profit recovery provisions and such individual will be entitled to receive from
the Company or the Surviving Corporation an amount equal to the excess, if any,
of the Merger Consideration over the per Share exercise price of such Stock
Option multiplied by the number of Shares subject thereto, and the parties
hereto will cooperate so as to achieve the intent of the foregoing without
giving rise to such profit recovery.
The Merger Agreement further provides that the Company shall give notice as
promptly as permitted by the terms thereof to each holder of a Transferable
Warrant dated as of July 20, 1993 (issued in connection with the acquisition of
Concord Technologies, Inc. by the Company) pursuant to Section 8(ii) thereof
permitting such warrant holders to exercise their warrants in full in accordance
with the terms of Section 9 thereof.
The Merger Agreement provides that the Company shall amend (and the Company
has duly amended) the Rights Agreement to make the Rights inapplicable to the
Merger Agreement, the offer and the purchase of shares pursuant to the offer.
Indemnification and Insurance. In the Merger Agreement, Parent and the
Offeror have agreed that all rights to indemnification for acts or omissions
occurring prior to the effectiveness of the Merger that are in existence as of
the date of the Merger Agreement in favor of the current or former directors or
officers of the Company and its subsidiaries as provided in their respective
certificates of incorporation or by-laws or contractual arrangements or as
otherwise provided by applicable law shall survive the Merger and shall continue
in full force and effect in accordance with their terms. Pursuant to the Merger
Agreement, Parent will, for a period of six years from the effectiveness of the
Merger, unless Parent agrees in writing to guarantee the indemnification
obligations set forth above, maintain in effect the Company's current directors'
and officers' liability insurance covering those persons who are currently
covered by the Company's directors' and officers' liability insurance policy
except that, to the extent that such coverage is not obtainable at less than or
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equal to 200% of the current per annum cost, Parent will be obligated to
purchase only so much coverage as may then be obtained for such amount.
Reasonable Efforts. The Merger Agreement provides that each of the parties
will use its reasonable efforts to take, or cause to be taken, all actions
necessary to comply promptly with all legal requirements which may be imposed on
itself with respect to the Offer and the Merger and will promptly cooperate with
and furnish information to each other in connection with any such requirements
imposed upon any of them or any of their subsidiaries in connection with the
Offer and the Merger and will, and will cause its subsidiaries to, use its
reasonable efforts to take all reasonable actions necessary to obtain (and will
cooperate with each other in obtaining) any consent, authorization, order or
approval of, or any exemption by, any governmental entity or other public or
private third party required to be obtained or made by any of them or any of
their subsidiaries in connection with the Offer and the Merger or the taking of
any action contemplated thereby or by the Merger Agreement, except that no party
need waive any substantial rights or agree to any substantial limitation on its
operations or to dispose of any assets.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties.
Procedure for Termination, Amendment, Extension or Waiver. The Merger
Agreement provides that in the event the Offeror's designees are appointed or
elected to the Board of Directors of the Company as described above under "Board
of Directors", after the acceptance for payment of Shares pursuant to the Offer
and prior to the effective time of the Merger, the affirmative vote of the
directors of the Company not designated by Parent or Offeror is required for the
Company to amend or terminate the Merger Agreement, exercise or waive any of its
rights or remedies under the Merger Agreement, or extend the time for
performance of the Offeror's and Parent's respective obligations under the
Merger Agreement.
14. DIVIDENDS AND DISTRIBUTIONS.
Pursuant to the terms of the Merger Agreement, the Company is prohibited
from taking any of the actions described in the two succeeding paragraphs, and
nothing herein shall constitute a waiver by the Offeror or Parent of any of its
rights under the Merger Agreement or a limitation of remedies available to the
Offeror or Parent for any breach of the Merger Agreement, including termination
thereof.
If, on or after April 23, 1997, the Company should (a) split, combine or
otherwise change the Shares or its capitalization, (b) acquire or otherwise
cause a reduction in the number of outstanding Shares or other securities or (c)
issue or sell additional Shares, shares of any other class of capital stock,
other voting securities or any securities convertible into, or rights, warrants
or options, conditional or otherwise, to acquire any of the foregoing, other
than Shares issued pursuant to the exercise of outstanding Company Stock Options
or warrants, then, subject to the provisions of Section 15, the Offeror, in its
sole discretion, may make such adjustments as it deems appropriate in the Offer
Price and other terms of the Offer, including, without limitation, the number or
type of securities offered to be purchased.
If, on or after April 23, 1997, the Company should declare or pay any cash
dividend on the Shares or other distribution on the Shares, or issue with
respect to the Shares any additional Shares, shares of any other class of
capital stock, other voting securities or any securities convertible into, or
rights, warrants or options, conditional or otherwise, to acquire, any of the
foregoing, payable or distributable to stockholders of record on a date prior to
the transfer of the Shares purchased pursuant to the Offer to the Offeror or its
nominee or transferee on the Company's stock transfer records, then, subject to
the provisions of Section 15, (a) the Offer Price may, in the sole discretion of
the Offeror, be reduced by the amount of any such cash dividend or cash
distribution and (b) the whole of any such noncash dividend, distribution or
issuance to be received by the tendering stockholders will (i) be received and
held by the tendering stockholders for the account of the Offeror and will be
required to be promptly remitted and transferred by each tendering stockholder
to the Depositary for the account of the Offeror, accompanied by appropriate
documentation of transfer, or (ii) at the direction of the Offeror, be exercised
for the benefit of the Offeror, in which case the proceeds of such exercise will
promptly be remitted to the Offeror. Pending such remittance and subject to
applicable law, the Offeror will be entitled to all rights and privileges as
owner of any such noncash dividend, distribution,
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<PAGE> 26
issuance or proceeds and may withhold the entire Offer Price or deduct from the
Offer Price the amount or value thereof, as determined by the Offeror in its
sole discretion.
15. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other term of the Offer or the Merger Agreement, the
Offeror shall not be required to accept for payment or, subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act (relating to the Offeror's obligation to pay for or
return tendered Shares after the termination or withdrawal of the Offer), to pay
for, and may delay the acceptance for payment of or, subject to the restriction
referred to above, the payment for, any Shares tendered pursuant to the Offer
unless (i) the Minimum Condition shall have been satisfied and (ii) any waiting
periods under the HSR Act and the German Competition Act applicable to the
purchase of Shares pursuant to the Offer shall have expired or been terminated.
Furthermore, notwithstanding any other term of the Offer or the Merger
Agreement, the Offeror shall not be required to accept for payment or, subject
as aforesaid, to pay for any Shares not theretofore accepted for payment or paid
for, and may terminate the Offer if, at any time on or after the date of the
Merger Agreement and before the acceptance of such Shares for payment or the
payment therefor, any of the following conditions exists (other than as a result
of any action or inaction of Parent or any of its subsidiaries that constitutes
a breach of the Merger Agreement):
(a) there shall be threatened, instituted or pending by any person or
Governmental Entity any suit, action, investigation or proceeding (i)
challenging the acquisition by Parent or the Offeror of any Shares under
the Offer, seeking to restrain or prohibit the making or consummation of
the Offer or the Merger or the performance of any of the other transactions
contemplated by the Merger Agreement, or seeking to obtain from the
Company, Parent or the Offeror any damages that are material in relation to
the Company and its subsidiaries taken as a whole, (ii) seeking to prohibit
or impose any material limitations on Parent's or the Offeror's ownership
or operation (or that of any of their respective Subsidiaries or
affiliates) of all or a material portion of their or the Company's
businesses or assets, or to compel Parent or the Offeror or their
respective Subsidiaries and affiliates to dispose of or hold separate any
material portion of the business or assets of the Company or Parent and
their respective Subsidiaries, in each case taken as a whole, (iii)
challenging the acquisition by Parent or the Offeror of any Shares under
the Offer, seeking to restrain or prohibit the making or consummation of
the Offer or the Merger or the performance of any of the other transactions
contemplated by the Merger Agreement, or seeking to obtain from the
Company, Parent or the Offeror any damages that are material in relation to
the Company and its subsidiaries taken as a whole, (iv) seeking to impose
material limitations on the ability of the Offeror, or render the Offeror
unable, to accept for payment, pay for or purchase some or all of the
Shares pursuant to the Offer and the Merger, (v) seeking to impose material
limitations on the ability of the Offeror or Parent effectively to exercise
full rights of ownership of the Shares, including, without limitation, the
right to vote the Shares purchased by it on all matters properly presented
to the Company's stockholders, or (vi) which otherwise is reasonably likely
to have a material adverse effect on the Company;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, or any other action shall be taken by any
Governmental Entity or court, other than the application to the Offer or
the Merger of applicable waiting periods under the HSR Act or the German
Competition Act that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (i) through
(vi) of paragraph (a) above;
(c) there shall have occurred any events after the date of the Merger
Agreement that, either individually or in the aggregate, have caused or are
reasonably likely to cause a material adverse change with respect to the
Company other than a change resulting from the announcement of the Offer or
the Merger;
(d)(i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Parent or the
Offeror its approval or recommendation of the Offer, the
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<PAGE> 27
Merger or the Merger Agreement, or approved or recommended any Takeover
Proposal, (ii) the Company shall have entered into any agreement with
respect to any Superior Proposal in accordance with the Merger Agreement or
(iii) the Board of Directors of the Company or any committee thereof shall
have resolved to take any of the foregoing actions (see "The Merger
Agreement -- Takeover Proposals" in Section 12);
(e) any of the representations and warranties of the Company set forth
in the Merger Agreement that are qualified as to materiality shall not be
true and correct or any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each
case at the date of the Merger Agreement and at the scheduled or extended
expiration of the Offer;
(f) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any
material agreement or covenant of the Company to be performed or complied
with by it under the Merger Agreement;
(g) the Merger Agreement shall have been terminated in accordance with
its terms;
(h) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange or on NASDAQ, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (iii) a
commencement of a war, armed hostilities or other international or national
calamity directly involving the armed forces of the United States, (iv) any
general limitation (whether or not mandatory) by any governmental authority
on the extension of credit by banks or other lending institutions, (v) in
the case of any of the foregoing existing at the time of the commencement
of the Offer, a material acceleration or worsening thereof, (vi) a decline
of at least twenty percent (20%) in the Dow Jones Industrial Average or the
Standard and Poors 500 Index from the date of the Merger Agreement to the
expiration or termination of the Offer or (vii) a change in general
financial, bank or capital market conditions which materially and adversely
affects the ability of financial institutions in the United States to
extend credit or syndicate loans; or
(i) any person acquires beneficial ownership (as defined in Rule 13d-3
promulgated under the Exchange Act), of at least 20% of the outstanding
Common Stock of the Company (other than any person not required to file a
Schedule 13D under the rules promulgated under the Exchange Act).
The foregoing conditions are for the sole benefit of Parent and the
Offeror, may be asserted by Parent or the Offeror regardless of the
circumstances giving rise to such condition (including any action or inaction by
Parent or the Offeror not in violation of the Merger Agreement) and may be
waived by Parent or the Offeror in whole or in part at any time and from time to
time in the sole discretion of Parent or the Offeror, subject in each case to
the terms of the Agreement. The failure by Parent or the Offeror at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
16. CERTAIN LEGAL MATTERS.
Except as set forth in this Section, the Offeror is not aware of any
approval or other action by any governmental or administrative agency which
would be required for the acquisition or ownership of Shares by the Offeror as
contemplated herein. Should any such approval or other action be required, it
will be sought, but the Offeror has no current intention to delay the purchase
of Shares tendered pursuant to the Offer pending the outcome of any such matter,
subject, however, to the Offeror's right to decline to purchase Shares if any of
the conditions specified in Section 15 shall 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 Company's business or that certain parts of
the Company's business might not have to be disposed of if any such approvals
were not obtained or other action taken.
U. S. Antitrust. Under the provisions of the HSR Act applicable to the
Offer, the acquisition of Shares under the Offer may be consummated following
the expiration of a 15-day waiting period following the filing by Moore of a
Premerger Notification and Report Form with respect to the Offer, unless Moore
receives a request for additional information or documentary material from the
Department of Justice, Antitrust Division
25
<PAGE> 28
(the "Antitrust Division") or the Federal Trade Commission (the "FTC") or unless
early termination of the waiting period is granted. Moore made such a filing on
April 23, 1997 and, accordingly, the initial waiting period will expire at 11:59
P.M. on May 8, 1997. If, within the initial 15-day waiting period, either the
Antitrust Division or the FTC request additional information or documentary
material concerning the Offer, the waiting period will be extended through the
tenth day after the date of substantial compliance by all parties receiving such
requests. Complying with a request for additional information or documentary
material can take a significant amount of time.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Offeror's proposed acquisition of
the Company. At any time before or after the Offeror's acquisition of Shares
pursuant to the Offer, the Antitrust Division or the FTC could take such action
under the antitrust laws as either deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger, or seeking the divestiture of Shares
acquired by the Offeror or the divestiture of substantial assets of the Company
or its subsidiaries or Parent or its subsidiaries. Private parties may also
bring legal action under the antitrust laws under certain circumstances. There
can be no assurance that a challenge to the Offer or to the consummation of the
Merger on antitrust grounds will not be made, or, if such a challenge is made,
of the result thereof.
Under the provisions of the German Competition Act applicable to the Offer,
the Merger is subject to a premerger notification requirement and may be
consummated subject to the condition precedent that (i) a written notice has
been received from the German Federal Cartel Office (the "GFCO") pursuant to
which the criteria for a prohibition of the Merger pursuant to Section 24a of
the German Competition Act are not satisfied, or (ii) one month after receipt by
the GFCO of the complete premerger notification, the parties have not received
the notice that the GFCO has undertaken to review the Merger as provided for in
Section 24a, Subsection 2, Sentence 1 of the German Competition Act or (iii)
despite receipt of the notice referred to in (ii), the prohibition period of 4
months after receipt of the complete premerger notification by the GFCO provided
for in Section 24a, Subsection 2, Sentence 1 of the German Competition Act has
expired without a prohibition having been ordered. Moore intends to file the
premerger notification with the GFCO concurrently with the filing of this Offer
to Purchase, and the initial waiting period will expire one month from that
filing date, in which the GFCO must also advise whether it considers the
premerger notification complete. Following receipt of the premerger
notification, the GFCO may undertake independent research in order to verify the
information contained in the premerger notification and, as part of such
process, may also divulge to third parties the merger under review and the
information contained in the premerger notification, provided, however, that the
notifying party may claim a business secrets privilege to certain parts of the
notification, making such information private and confidential. In addition,
third parties may request a third-party summons to join the proceedings in order
to furnish the GFCO with information on the Merger. While third parties may join
the GFCO decision-making process in such a manner, third parties do not have any
legal remedies against the decision of the GFCO. There can be no assurance that
a challenge to the Offer or to the consummation of the Merger under the German
Competition Act will not be made, or, if such a challenge is made, of the result
thereof.
If any applicable waiting periods under the HSR Act and the German
Competition Act have not expired or been terminated prior to the Expiration
Date, the Offeror will not be obligated to proceed with the Offer or the
purchase of any Shares not theretofore purchased pursuant to the Offer. See
Section 15.
Section 203 of the DGCL. Section 203 of the DGCL, in general, prohibits a
Delaware corporation such as the Company from engaging in a "Business
Combination" (defined as a variety of transactions, including mergers, as set
forth below) with an "Interested Stockholder" (defined generally as a person
that is the beneficial owner of 15% or more of a corporation's outstanding
voting stock) for a period of three years following the date that such person
became an Interested Stockholder unless, among other things, prior to the date
such person became an Interested Stockholder, the board of directors of the
corporation approved either the Business Combination or the transaction that
resulted in the stockholder becoming an Interested Stockholder. The Company's
Board of Directors has unanimously approved the Merger Agreement and the
Offeror's acquisition of Shares pursuant to the Offer. Therefore, Section 203 of
the DGCL is inapplicable to the Merger.
26
<PAGE> 29
Other State Takeover Laws. 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., in
1982, the Supreme Court of the United States (the "U.S. Supreme Court")
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 U.S. 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 acquirer from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the U.S. 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 and in Canada and several
countries in Europe, some of which have enacted takeover laws. The Offeror 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, the Offeror 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, the Offeror might be required to file certain information
with, or receive approvals from, the relevant state authorities. In addition, if
enjoined, the Offeror 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, the Offeror may not be obligated to accept for payment
any Shares tendered. See Section 15.
17. FEES AND EXPENSES.
Neither the Offeror nor Parent, nor any officer, director, stockholder,
agent or other representative of the Offeror or Parent, will pay any fees or
commissions to any broker, dealer or other person (other than the Dealer
Manager, the Information Agent and the Depositary) for soliciting tenders of
Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by the Offeror
for customary mailing and handling expenses incurred by them in forwarding
materials to their customers.
Lazard Freres is acting as Dealer Manager in connection with the Offer and
has provided certain financial advisory services to Parent and the Offeror in
connection with the proposed acquisition of the Shares. Parent has agreed to pay
Lazard Freres a fee of $2 million upon the earlier of the acquisition by Parent
of beneficial ownership of more than 50% of the Shares or the consummation of
the Offer or the Merger. In addition, Parent has agreed to reimburse Lazard
Freres for its out-of-pocket expenses related to its engagement, including the
fees and expenses of its counsel, and has agreed to indemnify Lazard Freres
against certain liabilities and expenses, including under the federal securities
laws. Lazard Freres has and will continue to provide financial advisory services
to Parent on a variety of financial matters unrelated to the Company.
The Offeror has retained MacKenzie Partners, Inc., as Information Agent,
and IBJ Schroder, as Depositary, in connection with the Offer. The Information
Agent and the Depositary will receive reasonable and customary compensation for
their services hereunder and reimbursement for their reasonable out-of-pocket
expenses. The Information Agent and the Depositary will also be indemnified by
the Offeror against certain liabilities in connection with the Offer. The
Information Agent may contact holders of Shares by mail, telex, telegraph and
personal interviews and may request brokers, dealers and other nominee
stockholders to forward materials relating to the Offer to beneficial owners of
Shares.
18. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the
27
<PAGE> 30
securities, blue sky or other 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 the
Offeror by the Dealer Manager or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of the Offeror other than as contained in this Offer to
Purchase or in the Letter of Transmittal and, if any such information or
representation is given or made, it should not be relied upon as having been
authorized by the Offeror or Parent.
The Offeror and Parent have filed with the Commission a Schedule 14D-1,
pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-3 promulgated
thereunder, furnishing certain information with respect to the Offer. Such
Schedule 14D-1 and any amendments thereto, including exhibits, may be examined
and copies may be obtained at the same places and in the same manner as set
forth with respect to the Company in Section 8 (except that they will not be
available at the regional offices of the Commission).
KIRKWOOD ACQUISITION CORP.
April 29 , 1997
28
<PAGE> 31
ANNEX I
CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF MOORE, PARENT, FRDK AND THE OFFEROR
1. DIRECTORS AND EXECUTIVE OFFICERS OF MOORE. Set forth below are the
name, current business address, citizenship, present principal occupation or
employment and five-year employment history of each director and executive
officer of Moore. Unless otherwise indicated the principal business address of
each director or executive officer is Moore Corporation Limited, 1 First
Canadian Place, Toronto, Ontario M5X 1G5, Canada.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST FIVE YEARS,
NAME POSITIONS WITH MOORE AND CERTAIN DIRECTORSHIPS
- ---------------------------------------- ----------------------------------------------------------
<S> <C>
Reto Braun.............................. Chairman of the Board since April 1995; President and
Chief Executive Officer and a director since September
1993; between March 1991 and September 1993, Mr. Braun
was a director, President and Chief Operating Officer of
Unisys Corporation; prior to March 1991, Mr. Braun was
Executive Vice President of Unisys Corporation. Mr.
Braun is a director of Paine Webber Group Inc., New
York. Mr. Braun is a citizen of Switzerland.
Derek H. Burney......................... Director since April 1993; Chairman, President and Chief
Bell Canada International, Ltd. Executive Officer of Bell Canada International Inc.;
1000 rue de la Gauchetiere Ouest, prior to January 1993, Mr. Burney was Canada's
Suite 1100 Ambassador to the United States. Mr. Burney is a citizen
Montreal, Quebec H3B 4Y8 of Canada.
Shirley A. Dawe......................... Director since November 1989; President of Shirley Dawe
Shirley Dawe Associates Inc. Associates Inc., a consulting firm specializing in
119 Crescent Road retail management. Ms. Dawe is a citizen of Canada.
Toronto, Ontario M4W 1T8
Arden R. Haynes......................... Director since January 1987; prior to September 1992, Mr.
Haynes was Chairman and Chief Executive Officer of
Imperial Oil Limited, an oil producer and manufacturer
of petroleum products. Mr. Haynes is a director of Rio
Algom Ltd. Mr. Haynes is a citizen of Canada.
Richard J. Lehmann...................... Director since April 1997; President and Chief Operating
Banc One Corporation Officer of Banc One Corporation; between April 1995 and
100 E. Broad Street January 1996, Mr. Lehmann was President of Banc One
Columbus, Ohio 43271-0261 Corporation; prior to April 1995, Mr. Lehmann was
Chairman and Chief Executive Officer of Banc One Arizona
Corporation (formerly Valley National Corporation) and
Bank One, Arizona, N.A. (formerly Valley National Bank).
Mr. Lehmann is a citizen of the United States.
Jeanette P. Lerman...................... Director since June 1995; Vice President -- Corporate
Time Warner, Inc. Communications, Time Warner Inc. Ms. Lerman is a citizen
75 Rockefeller Plaza of the United States.
New York, New York 10019
</TABLE>
29
<PAGE> 32
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST FIVE YEARS,
NAME POSITIONS WITH MOORE AND CERTAIN DIRECTORSHIPS
- ---------------------------------------- ----------------------------------------------------------
<S> <C>
Brian M. Levitt......................... Director since December 1996; President and Chief
Imasco Limited Executive Officer of Imasco Limited; between May 1993
600 de Maisonneuve Blvd. West and May 1995, Mr. Levitt was President and Chief
20th Floor Operating Officer of Imasco Limited; prior to May 1993,
Montreal, Quebec H3A 3K7 Mr. Levitt was President of Imasco Limited. Mr. Levitt
is a citizen of Canada.
Carl E. Lindholm........................ Director since February 1985. Mr. Lindholm is a director
of American Supplier Institute. Mr. Lindholm is a
citizen of the United States.
John T. Mayberry........................ Director since February 1996; President and Chief
Dofasco Inc. Executive Officer of Dofasco Inc., a steel producer;
1330 Burlington Street East between August 1992 and January 1993, Mr. Mayberry was
Hamilton, Ontario L8N 3J5 Executive Vice President and Chief Operating Officer of
Dofasco Inc.; prior to August 1992, Mr. Mayberry was
Executive Vice President of Dofasco Inc. Mr. Mayberry is
a citizen of Canada.
J. Robert S. Prichard................... Director since April 1996; President of the University of
University of Toronto Toronto. Mr. Prichard is a citizen of Canada.
Simcoe Hall, Room 206
27 King's College Circle
Toronto, Ontario M5S 1A1
William C. Lowe......................... Executive Vice President and President of Moore N.A.
Business Systems; between January 1994 and December
1995, Mr. Lowe was President and Chief Executive Officer
of New England Business Service; prior to January 1994,
Mr. Lowe was Chairman, President and CEO of Gulfstream
Aerospace Corporation. Mr. Lowe is a citizen of the
United States.
Stephen A. Holinski..................... Senior Vice President and Chief Financial Officer; prior
to May 1994, Mr. Holinski held various positions with
Northern Telecom Limited, most recently he was Vice
President and Treasurer; between September 1993 and
March 1994, Mr. Holinski was Vice President -- Products
Finance of Northern Telecom Limited; prior to September
1993, Mr. Holinski was Vice President -- Finance Europe
of Northern Telecom Limited. Mr. Holinski is a Director
of JetForm Corporation. Mr. Holinski is a citizen of
Canada.
Wayne K. Adams.......................... Vice President of Moore Corporation Limited and President
of Moore Latin America since December 1994; prior to
December 1994, Mr. Adams was a retired IBM executive.
Mr. Adams is a citizen of the United States.
</TABLE>
30
<PAGE> 33
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST FIVE YEARS,
NAME POSITIONS WITH MOORE AND CERTAIN DIRECTORSHIPS
- ---------------------------------------- ----------------------------------------------------------
<S> <C>
Charles E. Buchheit..................... Vice President of Moore Corporation Limited and President
of Integrated Customer Solutions; between July 1995 and
July 1996, Mr. Buchheit was President of Moore Graphic
Services; prior to July 1995, Mr. Buchheit was General
Manager -- U.S. Printing Systems Business of Xerox
Corporation. Mr. Buchheit is a citizen of the United
States.
Charles E. Canfield..................... Vice President, Human Resources; prior to July 1992, Mr.
Canfield was Director, Human Resources. Mr. Canfield is
a citizen of the United States.
Roy S. Clements......................... Vice President of Moore Corporation Limited and President
of Moore Asia Pacific; prior to July 1994, Mr. Clements
held various positions at Unisys Corporation, most
recently he was Area General Manager; prior to January,
1993, Mr. Clements was General Manager of a Hong Kong
subsidiary of Unisys Corporation. Mr. Clements is a
citizen of the United Kingdom.
Joseph M. Duane......................... Vice President, Corporate Development and General Counsel;
between January 1994 and August 1996, Mr. Duane was Vice
President and General Counsel; prior to January 1994,
Mr. Duane was Associate General Counsel of Unisys
Corporation. Mr. Duane is a citizen of the United
States.
Charles J. Evans........................ Vice President, Taxation; between December 1993 and
February 1995, Mr. Evans was a Tax Consultant with
Gentra Inc.; prior to December 1993, Mr. Evans was Vice
President/Managing Partner, Taxation of Royal Trustco
Limited. Mr. Evans is a citizen of Canada.
George H. Gilmore Jr.................... Vice President of Moore Corporation Limited and President
of Moore Document Solutions; between July 1994 and
December 1995, Mr. Gilmore was Vice President of Moore
Corporation Limited and President of Moore Business
Systems; prior to July 1994, Mr. Gilmore was President,
Multigraphics Division of AM International Inc. Mr.
Gilmore is a citizen of the United States.
Clive W. Ingham......................... Vice President of Moore Corporation Limited and President
of Moore Europe; between December 1995 and May 1996, Mr.
Ingham was retired; prior to December 1995, Mr. Ingham
held various positions with Unisys Corporation, most
recently he was Vice President and Group General
Manager, European Group. Mr. Ingham is a citizen of the
United Kingdom.
</TABLE>
31
<PAGE> 34
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST FIVE YEARS,
NAME POSITIONS WITH MOORE AND CERTAIN DIRECTORSHIPS
- ---------------------------------------- ----------------------------------------------------------
<S> <C>
Russell I. Johnson...................... Vice President, Procurement; prior to October 1994, Mr.
Johnson was Director, Capital Purchasing of Champion
International Corporation. Mr. Johnson is a citizen of
the United States.
Shoba Khetrapal......................... Vice President and Treasurer; between February 1992 and
January 1995, Ms. Khetrapal was Treasurer; prior to
February 1992, Ms. Khetrapal was Assistant Treasurer.
Ms. Khetrapal is a citizen of Canada.
Hilda A. Mackow......................... Vice President, Communications; prior to December 1994,
Ms. Mackow held various positions at Imperial Oil
Limited, most recently Ms. Mackow was Manager, Marketing
Services for Products and Chemicals; prior to June 1993,
Ms. Mackow was Brand Marketing/Customer Services Manager
of Imperial Oil Products Division. Ms. Mackow is a
citizen of Canada.
Thomas J. McKiernan..................... Vice President of Moore Corporation Limited and President
of Moore Customer Communication Services; prior to
September 1995, Mr. McKiernan was President of Moore
Response Marketing Services. Mr. McKiernan is a citizen
of the United States.
Arthur N. Mitchell...................... Vice President and Controller; between April 1994 and
November 1995, Mr. Mitchell was Chief Financial Officer
of AlliedSignal Canada, Inc.; prior to April 1994, Mr.
Mitchell was Vice President and Controller of Lawson
Mardon Group Limited. Mr. Mitchell is a citizen of
Canada.
Joan M. Wilson.......................... Vice President and Secretary; prior to March 1993, Ms.
Wilson was Secretary. Ms. Wilson is a citizen of Canada.
James D. Wyner.......................... Vice President of Moore Corporation Limited and President
of Moore Labels and Label Systems; between September
1991 and June 1996, Mr. Wyner was Executive Vice
President-Operations of Paxar Corporation; prior to
September 1991, Mr. Wyner was Vice President and General
Manager, Zellerbach Division of Mead Corporation. Mr.
Wyner is a citizen of the United States.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF MOORE U.S.A. INC.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST FIVE YEARS,
NAME POSITIONS WITH MOORE AND CERTAIN DIRECTORSHIPS
- ---------------------------------------- ----------------------------------------------------------
<S> <C>
Reto Braun.............................. Director; Chairman, President & CEO
George H. Gilmore, Jr................... Director; Vice President
Stephen A. Holinski..................... Director; Senior Vice President & Chief Financial Officer
</TABLE>
32
<PAGE> 35
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST FIVE YEARS,
NAME POSITIONS WITH MOORE AND CERTAIN DIRECTORSHIPS
- ---------------------------------------- ----------------------------------------------------------
<S> <C>
Timothy J. Cunningham................... Director and Vice President; Vice President, Finance,
Moore Document Solutions; between March, 1995 and July,
1996 Mr. Cunningham was Controller, ConAgra Refrigerated
Foods Co.; prior to August, 1994, Mr. Cunningham was
Vice President, Finance, North America, British Steel
William F. Goins........................ Director and Vice President; Vice President, Sales, Moore
Document Solutions since June, 1996; between January,
1995 and November, 1995 Mr. Goins was Chief Operating
Officer, Education Alternatives; prior to December,
1994, Mr. Goins was a Senior Vice President of Xerox
Corporation
William C. Lowe......................... Director; Executive Vice President
Thomas J. McKiernan..................... Director; Vice President
Robert E. McNulty....................... Director and Vice President; Vice President and Chief
Information Officer.
Joseph M. Duane......................... Vice President, Corporate Development & General Counsel
Charles J. Evans........................ Vice President, Taxation
Russell I. Johnson...................... Vice President, Procurement
Shoba Khetrapal......................... Vice President and Treasurer
Arthur N. Mitchell...................... Vice President and Controller
Joan M. Wilson.......................... Vice President and Secretary
Gary W. Ampulski........................ Vice President and President, Moore Business
Communications Services since January, 1993; prior to
December, 1992, Mr. Ampulski was Managing Partner,
Midwest Generics
Patrick T. Brong........................ Vice President and Vice President, Manufacturing, Moore
Document Solutions since May, 1996; prior to May, 1996
Mr. Brong was Vice President, Manufacturing, Moore
Canadian Division.
Charles E. Buchheit..................... Vice President
Siegfied E. Buck........................ Vice President and Vice President and General Manager,
Moore Document Automation Systems since January, 1996.
Timothy J. Cunningham................... Vice President
Thomas M. Gregorien..................... Vice President and President, Moore Data Management
Services.
Christian J. Hipp....................... Vice President and Vice President, Research, Moore
Research Center.
Gary M. Hubbard......................... Vice President and Vice President, Mergers and
Acquisitions since August, 1996; prior to July, 1996 Mr.
Hubbard was Vice President and Controller, Moore
Business Forms and Systems
</TABLE>
33
<PAGE> 36
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST FIVE YEARS,
NAME POSITIONS WITH MOORE AND CERTAIN DIRECTORSHIPS
- ---------------------------------------- ----------------------------------------------------------
<S> <C>
Mark Kilgore............................ Vice President and President, Moore Graphics Services
since November, 1996; between January, 1995 and October,
1996, Mr. Kilgore was Vice President, Marketing, Moore
Business Systems; prior to December, 1994, Mr. Kilgore
was Vice President, Marketing, AM Multigraphics.
Paul L. Matson.......................... Vice President and Vice President, Human Resources, Moore
N.A. Business Systems.
Anil Shrikhande......................... Vice President and Vice President, Strategy and
Development since November, 1996; prior to November,
1996 Mr. Shrikhande was Vice President, Strategy and
Business Development, Communications Market Sector,
Unisys Corporation.
James B. Treleaven...................... Vice President and Vice President, Marketing, Moore
Document Solutions since July, 1996; prior to July, 1996
Mr. Treleaven was Vice President, Marketing, UARCO
Incorporated.
Mark D. Weishaar........................ Vice President and Vice President, Business Development,
Moore N.A. Business Systems.
James D. Wyner.......................... Vice President
Richard J. Zagorski..................... Vice President and President, Moore Response Marketing
Services
</TABLE>
3. DIRECTORS AND EXECUTIVE OFFICERS OF FRDK, INC.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST FIVE YEARS,
NAME POSITIONS WITH MOORE AND CERTAIN DIRECTORSHIPS
- ---------------------------------------- ----------------------------------------------------------
<S> <C>
275 North Field Drive Lake Forest,
Illinois 60045
Joseph M. Duane......................... Director and President
Stephen A. Holinski..................... Director and Vice President and Treasurer
Joan M. Wilson.......................... Director and Vice President and Secretary
</TABLE>
4. DIRECTORS AND EXECUTIVE OFFICERS OF THE OFFEROR. Unless otherwise
indicated, for each person identified below all information concerning the
current business address, present principal occupation or employment and
five-year employment history for such person is the same as the information
given above. Each person was elected in April 1997.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST FIVE YEARS,
NAME AGE POSITIONS WITH THE OFFEROR AND CERTAIN DIRECTORSHIPS
- ---------------------------------------- --- ----------------------------------------------------------
<S> <C> <C>
Joseph M. Duane......................... 49 Director and President.
Stephen A. Holinski..................... 50 Director and Treasurer.
Joan M. Wilson.......................... 41 Director and Secretary.
</TABLE>
34
<PAGE> 37
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and 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, trust company or other nominee to the Depositary at one
of the addresses set forth below:
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<CAPTION>
By Mail: By Hand: By Overnight Courier:
<S> <C> <C>
P.O. Box 84 1 State Street 1 State Street
Bowling Green Station New York, New York 10004 New York, New York 10004
New York, New York 10274-0084 Attn: Reorganization Attn: Reorganization
Attn: Reorganization Operations Dept. Operations Dept.
Operations Dept. Securities Processing Window Securities Processing Window
SC-1 SC-1
Facsimile for Eligible
Institutions:
(212) 858-2611
Confirm by Telephone:
(212) 858-2103
</TABLE>
Any questions or requests for assistance or additional copies of the Offer
to Purchase and the Letter of Transmittal and Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Manager at their respective
telephone numbers and locations listed below. Stockholders may also contact
their broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
[MACKENZIE PARTNERS LOGO]
156 FIFTH AVENUE
NEW YORK, NY 10010
(212) 929-5500 (CALL COLLECT)
(800) 322-2885 (TOLL-FREE)
The Dealer Manager for the Offer is:
LAZARD FRERES & CO. LLC
30 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10020
(212) 632-6717 (Call collect)
<PAGE> 1
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
THE PEAK TECHNOLOGIES GROUP, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED APRIL 29, 1997
BY
KIRKWOOD ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
MOORE CORPORATION LIMITED
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME,
ON TUESDAY, MAY 27, 1997, UNLESS THE OFFER IS EXTENDED.
The Depositary:
IBJ SCHRODER BANK AND TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Courier:
P.O. Box 84 1 State Street 1 State Street
Bowling Green Station New York, New York 10004 New York, New York 10004
New York, New York 10274-0084 Attn: Reorganization Attn: Reorganization
Attn: Reorganization Operations Dept. Operations Dept.
Operations Dept. Securities Processing Window SC-1 Securities Processing Window SC-1
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE
SUBSTITUTE FORM W-9 SET FORTH BELOW.
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 Peak
Technologies Group, Inc. if certificates are to be forwarded herewith or, unless
an Agent's Message (as defined in the Offer to Purchase) is utilized, if
delivery of Shares (as defined below) is to be made by book-entry transfer to
the Depositary's account at The Depository Trust Company or the Philadelphia
Depository Trust Company (hereinafter collectively referred to as the
"Book-Entry Transfer Facilities") pursuant to the procedures set forth in
Section 3 of the Offer to Purchase. Delivery of documents to a Book-Entry
Transfer Facility does not constitute delivery to the Depositary.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their Shares and all other documents required hereby to the
Depositary by the Expiration Date (as defined in the Offer to Purchase), or who
cannot comply with the book-entry transfer procedures on a timely basis, may
nevertheless tender their Shares pursuant to the guaranteed delivery procedures
set forth in Section 3 of the Offer to Purchase. See Instruction 2.
<PAGE> 2
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESSES OF REGISTERED HOLDER(S) SHARES TENDERED
(PLEASE FILL IN, IN BLANK) (ATTACH ADDITIONAL LIST, IF NECESSARY)
------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
SHARE SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
Total Shares
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the depositary are being tendered. See
Instruction 4.
================================================================================
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution
- --------------------------------------------------------------------------------
Account Number
- --------------------------------------------------------------------------------
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Transaction Code Number
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Stockholder(s)
- --------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
-----------------------------------------------------------------
Name of Institution that Guaranteed Delivery
------------------------------------------------------------------------
Window Ticket Number (if any)
- --------------------------------------------------------------------------------
Name of Institution of Guaranteed Delivery
---------------------------------------------------------------------------
If delivery is by book-entry transfer
- --------------------------------------------------------------------------------
Name of Tendering Institution
- --------------------------------------------------------------------------------
Account Number
- --------------------------------------------------------------------------------
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Transaction Code Number
- --------------------------------------------------------------------------------
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to Kirkwood Acquisition Corp., a Delaware
corporation (the "Offeror"), a wholly owned subsidiary of FRDK, Inc., a New York
Corporation, a wholly owned subsidiary of Moore U.S.A. Inc., a Delaware
Corporation (the "Parent"), a wholly owned subsidiary of Moore Corporation
Limited, a corporation organized under the laws of Ontario, Canada, the
above-described shares of Common Stock, par value $0.01 per share, of The Peak
Technologies Group, Inc., a Delaware corporation (the "Company"), including the
associated preferred stock purchase rights issued pursuant to the Rights
Agreement, dated as of March 28, 1997, between the Company and ChaseMellon
Shareholder Services, as Rights Agent (collectively, the "Shares"), pursuant to
the Offeror's offer to purchase all of the outstanding Shares at a purchase
price of $18.00 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 29, 1997 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together with the Offer
to Purchase constitute the "Offer"). The Offer is being made in connection with
the Agreement and Plan of Merger, dated as of April 23, 1997 (the "Merger
Agreement"), among the Parent, the Offeror and the Company.
Subject to and effective upon acceptance for payment of and payment for the
Shares tendered herewith, the undersigned hereby sells, assigns and transfers to
or upon the order of the Offeror all right, title and interest in and to all the
Shares that are being tendered hereby (and any and all other Shares or other
securities issued or issuable in respect thereof on or after April 29, 1997) and
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares (and all such other Shares or
securities), with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) deliver
certificates for such Shares (and all such other Shares or securities), or
transfer ownership of such Shares (and all such other Shares or securities) on
the account books maintained by any of the Book-Entry Transfer Facilities,
together, in any such case, with all accompanying evidences of transfer and
authenticity, to or upon the order of the Offeror, (b) present such Shares (and
all such other Shares or 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 such other Shares or securities), all in
accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints each designee of the Offeror as
the attorney-in-fact and proxy of the undersigned, each with full power of
substitution, to exercise all voting and other rights of the undersigned in such
manner as each such attorney and proxy or his substitute shall in his sole
judgment deem proper, with respect to all of the Shares tendered hereby which
have been accepted for payment by the Offeror prior to the time of any vote or
other action (and any and all other Shares or other securities or rights issued
or issuable in respect of such Shares on or after April 29, 1997) at any meeting
of stockholders of the Company (whether annual or special and whether or not an
adjourned meeting) or otherwise. This proxy is irrevocable, shall be coupled
with an interest, and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by the Offeror in accordance with the
terms of the Offer. Such acceptance for payment shall revoke any other proxy or
written consent granted by the undersigned at any time with respect to such
Shares (and all such other Shares or other securities or rights), and no
subsequent proxies will be given or written consents will be executed by the
undersigned (and if given or executed, will not be deemed effective).
The undersigned hereby represents and warrants (and if more than one, each
undersigned hereby represents and warrants jointly and it severally that the
undersigned has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby and that when the same are accepted for payment by
the Offeror, the Offeror will acquire good and unencumbered title thereto, free
and clear of all liens, restrictions, charges and encumbrances and not subject
to any adverse claims.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Depositary or the Offeror to be necessary or desirable
to complete the sale, assignment and transfer of the Shares tendered hereby (and
all such other Shares or other securities or rights).
All authority herein conferred or agreed to be conferred shall survive the
death, bankruptcy or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned. Except as stated in the Offer, this
tender is irrevocable.
<PAGE> 4
The undersigned understands that tenders 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 an agreement between the undersigned and the
Offeror upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of any Shares purchased, and return any
Shares not tendered or not purchased, in the name(s) of the undersigned.
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price of any Shares purchased and return
any certificates for Shares not tendered or not purchased (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signature(s). In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the purchase price of any Shares purchased and return any Shares
not tendered or not purchased in the name(s) of, and mail said check and any
certificates to, the person(s) so indicated. The undersigned recognizes that the
Offeror has no obligation, pursuant to the "Special Payment Instructions," to
transfer any Shares from the name of the registered holder(s) thereof if the
Offeror does not accept for payment any of the Shares so tendered.
------------------------------------------------------
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 certificates for 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
----------------------------------------------
----------------------------------------------
(ZIP CODE)
----------------------------------------------
(TAXPAYER IDENTIFICATION NO.)
(SEE SUBSTITUTE FORM W-9)
==============================================
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or certificates for 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 below the undersigned's signature(s).
Mail check and/or certificate(s) to:
Name
----------------------------------------------
(PLEASE PRINT)
---------------------------------------------
Address
----------------------------------------------
----------------------------------------------
(ZIP CODE)
---------------------------------------------
<PAGE> 5
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, signatures
on all Letters of Transmittal must be guaranteed by a member in good standing of
the Securities Transfer Agents Medallion Program or by any other bank, broker,
dealer, credit union, savings association or other entity which is an "eligible
guarantor institution," as such term is defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended (each of the foregoing constituting
an "Eligible Institution"), unless the Shares tendered thereby are tendered (i)
by a registered holder of Shares who has not completed either the box labeled
"Special Payment Instructions" or the box labeled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. See Instruction 5. If the certificates evidencing Shares
are registered in the name of a person or persons other than the signer of this
Letter of Transmittal, or if payment is to be made or delivered to, or
certificates evidencing unpurchased Shares are to be issued or returned to, a
person other than the registered owner or owners, then the tendered certificates
must be endorsed or accompanied by duly executed stock powers, in either case
signed exactly as the name or names of the registered owner or owners appear on
the certificates or stock powers, with the signatures on the certificates or
stock powers guaranteed by an Eligible Institution as provided herein. See
Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of
Transmittal is to be used either if certificates are to be forwarded herewith
or, unless an Agent's Message is utilized, if the delivery of Shares is to be
made by book-entry transfer pursuant to the procedures set forth in Section 3 of
the Offer to Purchase. Certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at one of
the Book-Entry Transfer Facilities of all Shares delivered electronically, as
well as a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof) and any other documents required by this
Letter of Transmittal or an Agent's Message in the case of a book-entry
delivery, must be received by the Depositary at one of its addresses set forth
on the front page of this Letter of Transmittal by the Expiration Date.
Stockholders who cannot deliver their Shares and all other required documents to
the Depositary by the Expiration Date must tender their Shares pursuant to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.
Pursuant to such procedures: (a) such tender must be made by or through an
Eligible Institution; (b) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by the Offeror, must be
received by the Depositary prior to the Expiration Date; and (c) the
certificates for all tendered Shares, in proper form for transfer (or a
Book-Entry Confirmation with respect to such Shares), together with a properly
completed and duly executed Letter of Transmittal (or a manually signed
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
this Letter of Transmittal must be received by the Depositary within three
trading days after the date of such Notice of Guaranteed Delivery, all as
provided in Section 3 of the Offer to Purchase. The term "trading day" is any
day on which NASDAQ is open for business.
The method of delivery of Shares, the Letter of Transmittal and all other
required documents, including delivery through a Book-Entry Transfer Facility,
is at the election and sole risk of the tendering stockholder. If delivery is by
mail, registered mail with return receipt requested, properly insured, is
recommended. Delivery of this Letter of Transmittal and accompanying
certificate(s) will pass only when such Letter of Transmittal and accompanying
certificate(s) are actually received by the Exchange Agent.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal (or
a manually signed facsimile thereof), the tendering stockholder waives any right
to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. Partial Tenders (not applicable to stockholders who tender by book-entry
transfer). If fewer than all the Shares represented by any certificate
delivered to the Depositary 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, a new
<PAGE> 6
certificate for the remainder of the Shares represented by the old certificate
will be sent to the person(s) signing this Letter of Transmittal unless
otherwise provided in the appropriate box on this Letter of Transmittal, as
promptly as practicable following the expiration or termination of the Offer.
All Shares represented by 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 with the name(s) as written on
the face of the certificates 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 of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the purchase price is to be made, or Shares not
tendered or not purchased are to be returned, in the name of any person other
than the registered holder(s). Signatures on any such certificates or 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 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(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Offeror of the authority of such person so to act must be submitted.
6. Stock Transfer Taxes. The Offeror will pay any stock transfer taxes
with respect to the sale and transfer of any Shares to it or its order pursuant
to the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be returned in the name of, any
person other than the registered holder(s), then the amount of any stock
transfer taxes (whether imposed on the registered holder(s), such other person
or otherwise) 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 certificates listed in this Letter of
Transmittal.
7. Special Payment and Delivery Instruction. If the check for the purchase
price of any Shares purchased is to be issued, or any Shares not tendered or not
purchased are to be returned, in the name of a person other than the person(s)
signing this Letter of Transmittal or if the check or any certificates for
Shares not tendered or not purchased are to be mailed to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal at an address other than that shown above, 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 at any of the Book-Entry Transfer Facilities as such stockholder
may designate under "Special Payment Instructions." If no such instructions are
given, any such Shares not purchased will be returned by crediting the account
at the Book-Entry Transfer Facilities designated above.
8. Substitute Form W-9. The tendering stockholder is required to provide
the Depositary with such stockholder's correct TIN on Substitute Form W-9, which
is provided below, unless an exemption applies. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder to
a
<PAGE> 7
$50 penalty and to 31% federal income tax backup withholding on the payment of
the purchase price for the Shares.
9. Foreign Holders. Foreign holders must submit a completed IRS Form W-8
to avoid 31% backup withholding. IRS Form W-8 may be obtained by contacting the
Depositary at one of the addresses on the face of this Letter of Transmittal.
10. Requests for Assistance or Additional Copies. Requests for assistance
or additional copies of the Offer to Purchase and this Letter of Transmittal may
be obtained from the Information Agent or the Dealer Manager at their respective
addresses or telephone numbers set forth below.
11. Waiver of Conditions. The conditions of the Offer may be waived by
Offeror (subject to certain limitations in the Merger Agreement), in whole or in
part, at any time or from time to time, in Offeror's sole discretion.
Important: This letter of Transmittal or a manually signed facsimile copy
hereof (together with certificates or confirmation of book-entry transfer and
all other required documents) or a Notice of Guaranteed Delivery must be
received by the Depositary on or prior to the Expiration Date (as defined in the
Offer to Purchase).
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary with such
stockholder's correct TIN on the Substitute Form W-9. 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, the stockholder may be subject
to a $50 penalty imposed by the Internal Revenue Service. In addition, payments
that are made to such stockholder with respect to Shares purchased pursuant to
the Offer may be subject to backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such statements may be
obtained from the Depositary. All exempt recipients (including foreign persons
wishing to qualify as exempt recipients) should 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 backup withholding results in an
overpayment of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding on payments that are made
to a stockholder with respect to Shares purchased pursuant to the Offer, the
stockholder is required to notify the Depositary of such stockholder's correct
TIN by completing the form certifying that the TIN provided on the Substitute
Form W-9 is correct.
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 guidelines on which number to
report.
<PAGE> 8
SIGN HERE
(Complete Substitute Form W-9 on reverse)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF OWNER(S)
Name(s) ------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Capacity (full title)
-----------------------------------------------------------------
Address-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
-----------------------------------------------------
- --------------------------------------------------------------------------------
Taxpayer Identification Number
--------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
- --------------------------- , 199
(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 the 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, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5).
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY, PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
Authorized signature(s)
-------------------------------------------------------------
Name --------------------------------------------------------------------------
Name of Firm
---------------------------------------------------------------------
Address-------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
-----------------------------------------------------
Dated:
- --------------------------- , 199
<PAGE> 9
<TABLE>
<C> <S> <C>
- ----------------------------------------------------------------------------------------------------------------
PAYOR'S NAME: DEPOSITARY
================================================================================================================
SUBSTITUTE PART I -- PLEASE PROVIDE YOUR TIN IN THE TIN:
FORM W-9 BOX AT THE RIGHT AND CERTIFY BY SIGNING AND ------------------------------------
DATING BELOW Social Security Number
or Employer Identification Number
------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY PART II -- For Payees exempt from backup withholding, see the enclosed Guidelines
INTERNAL REVENUE SERVICE for Certification of Taxpayer Identification Number on Substitute Form W-9 and
complete as instructed therein.
------------------------------------------------------------------------------------
Certification -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a number
to be issued to me); and
(2) I am not subject to backup withholding because (a) I am exempt from backup
withholding or (b) 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 (c) the IRS has notified me that I am no
longer subject to backup withholding.
PAYER'S REQUEST FOR
TAXPAYER IDENTIFICATION
NUMBER ("TIN")
AND CERTIFICATION
- ----------------------------------------------------------------------------------------------------------------
SIGNATURE: DATE:
---------------------------- -----------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding, you received
another notification from the IRS that you were no longer subject to backup
withholding, do not cross out item (2). (Also see the instructions in the
enclosed Guidelines.)
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 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 ARE AWAITING YOUR TIN.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a TIN has not been issued to me,
and either (1) I have mailed or delivered an application to receive a TIN to the
appropriate IRS Center or Social Security Administration Officer or (2) I intend
to mail or deliver an application in the near future. I understand that if I do
not provide a TIN by the time of payment, 31% of all payments pursuant to the
Offer made to me thereafter will be withheld until I provide a number.
Signature: Date:
----------------------------------------------- -----------------
<PAGE> 10
The Information Agent for the Offer is:
[MACKENZIE PARTNERS LOGO]
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
Banks and Brokers Call Collect: (212) 929-5500
All Others Call Toll-Free: (800) 322-2885
The Dealer Manager for the Offer is:
LAZARD FRERES & CO. LLC
30 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10020
(212) 632-6717 (call collect)
<PAGE> 1
EXHIBIT (a)(3)
LAZARD FRERES & CO. LLC
30 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10020
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THE PEAK TECHNOLOGIES GROUP, INC.
AT
$18.00 NET PER SHARE
BY
KIRKWOOD ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
MOORE CORPORATION LIMITED
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, MAY 27, 1997, UNLESS THE OFFER IS EXTENDED.
April 29, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Kirkwood Acquisition Corp., a Delaware
corporation (the "Offeror"), a wholly owned subsidiary of FRDK, Inc., a New York
Corporation, a wholly owned subsidiary of Moore U.S.A. Inc., a Delaware
Corporation (the "Parent"), a wholly owned subsidiary of Moore Corporation
Limited, a corporation organized under the laws of Ontario, Canada, to act as
Dealer Manager in connection with the Offeror's offer to purchase all
outstanding shares of Common Stock, par value $0.01 per share, of The Peak
Technologies Group, Inc., a Delaware corporation (the "Company"), including the
associated preferred stock purchase rights issued pursuant to the Rights
Agreement, dated as of March 28, 1997, between the Company and ChaseMellon
Shareholders Services, as Rights Agent (collectively, the "Shares"), at a
purchase price of $18.00 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 29, 1997 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which together constitute the "Offer") enclosed herewith. The Offer
is being made in connection with the Agreement and Plan of Merger, dated as of
April 23, 1997, among the Parent, the Offeror and the Company (the "Merger
Agreement"). Holders of Shares whose certificates for such Shares (the
"Certificates") are not immediately available or who cannot deliver their
Certificates and all other required documents to the Depository or complete the
procedures for book-entry transfer prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase) must tender their Shares according to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares in your name or in the name of your nominee.
<PAGE> 2
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated April 29, 1997.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. facsimile copies of the Letter of Transmittal
(with manual signatures) may be used to tender Shares.
3. A letter to stockholders of the Company from Nicholas R.H. Toms,
the Chairman and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company and mailed to the
stockholders of the Company.
4. The Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if neither of the two procedures for tendering Shares set forth
in the Offer to Purchase can be completed on a timely basis.
5. A printed form of letter which may be sent to your clients for
whose accounts you hold Shares registered in your name, with space provided
for obtaining such clients' instructions with regard to the Offer.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to the Depository.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, MAY 27, 1997, UNLESS
THE OFFER IS EXTENDED.
Please note the following:
1. The tender price is $18.00 per Share, net to the seller in cash
without interest.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, May 27, 1997, unless the Offer is extended (the
"Expiration Date").
4. The Offer is conditioned upon, among other things (1) there being
validly tendered and not withdrawn prior to the Expiration Date that number
of Shares constituting a majority of the outstanding Shares (determined on
a fully diluted basis for all outstanding stock options and any other
rights to acquire Shares), (ii) the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and Section 24a, Subsection 2,
Sentence 1 of the German Law Against Restraints of Trade, and (iii) the
satisfaction of certain other terms and conditions. See Section 15 of the
Offer to Purchase.
5. 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 on the transfer of Shares pursuant to the
Offer.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal (or a manually signed facsimile thereof) and any
required signature guarantees or, in the case of a book-entry transfer, an
Agent's Message (as defined in the Offer to Purchase) or other required
documents should be sent to the Depositary and (ii) Certificates representing
the tendered Shares or a timely Book-Entry Confirmation (as defined in the Offer
to Purchase) should be delivered to the Depositary in accordance with the
instructions set forth in the Offer.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Certificates or other required documents or complete the
procedures for book-entry transfer prior to the Expiration Date, a tender may be
effected by following the guaranteed delivery procedures specified in Section 3
of the Offer to Purchase.
2
<PAGE> 3
Neither the Offeror, the Parent nor any officer, director, stockholder,
agent or other representative of the Offeror will pay any fees or commissions to
any broker, dealer or other person (other than the Dealer Manager, the
Depositary and the Information Agent as described in the Offer to Purchase) for
soliciting tenders of Shares pursuant to the Offer. The Offeror will, however,
upon request, reimburse you for customary mailing and handling expenses incurred
by you in forwarding any of the enclosed materials to your clients. The Offeror
will pay or cause to be paid any transfer taxes payable on the transfer of
Shares to it, except as otherwise provided in Instruction 6 of the Letter of
Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
MacKenzie Partners, Inc., the Information Agent for the Offer, 156 Fifth Avenue,
New York, NY 10010, (800) 322-2885 (toll-free) or Lazard Freres & Co. LLC, the
Dealer Manager for the Offer, at 30 Rockefeller Plaza, New York, NY 10020, (212)
632-6717 (call collect).
Requests for additional copies of the enclosed materials may be directed to
the Information Agent at the above address and telephone number.
Very truly yours,
LAZARD FRERES & CO. LLC
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PARENT, THE OFFEROR, THE DEPOSITARY, THE
INFORMATION AGENT, THE DEALER MANAGER OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE> 1
EXHIBIT (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THE PEAK TECHNOLOGIES GROUP, INC.
AT
$18.00 NET PER SHARE
BY
KIRKWOOD ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
MOORE CORPORATION LIMITED
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, MAY 27, 1997, UNLESS THE OFFER IS EXTENDED.
April 29, 1997
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated April 29,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer"), relating to an offer by Kirkwood Acquisition
Corp., a Delaware corporation (the "Offeror"), a wholly owned subsidiary of
FRDK, Inc., a New York Corporation, a wholly owned subsidiary of Moore U.S.A.
Inc., a Delaware Corporation (the "Parent"), a wholly owned subsidiary of Moore
Corporation Limited, a corporation organized under the laws of Ontario, Canada,
to purchase all outstanding shares of Common Stock, par value $0.01 per share,
of The Peak Technologies Group, Inc., a Delaware corporation (the "Company"),
including the associated preferred stock purchase rights issued pursuant to the
Rights Agreement, dated as of March 28, 1997, between the Company and
ChaseMellon Shareholder Services, as Rights Agent (collectively, the "Shares"),
at a purchase price of $18.00 per Share, net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in the Offer.
The Offer is being made in connection with the Agreement and Plan of Merger,
dated as of April 23, 1997, among the Parent, the Offeror and the Company (the
"Merger Agreement"). This material is being forwarded to you as the beneficial
owner of Shares carried by us in 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 is furnished to you for
your information only and cannot be used by you to tender Shares held by us for
your account.
Accordingly, we request instructions as to whether you wish to tender any
or all of the Shares held by us for your account, upon the terms and conditions
set forth in the Offer.
Please note the following:
1. The tender price is $18.00 per Share, net to the seller in cash
without interest.
2. The Offer is being made for all of the outstanding Shares.
<PAGE> 2
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, May 27, 1997, unless the Offer is extended (the
"Expiration Date").
4. The Offer is conditioned upon, among other things (1) there being
validly tendered and not withdrawn prior to the Expiration Date that number
of Shares constituting a majority of the outstanding Shares (determined on
a fully diluted basis for all outstanding stock options and any other
rights to acquire Shares), (ii) the expiration or termination of the
applicable waiting period under (1) the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and (2) Section 24a, Subsection 2,
Sentence 1 of the German Law Against Restraints of Trade., and (iii) the
satisfaction of certain other terms and conditions. See Section 15 of the
Offer to Purchase
5. 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 on the transfer of Shares pursuant to the
Offer.
If you wish to have us tender any or all of the Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
contained in this letter. An envelope to return your instruction to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise indicated in such instruction form. PLEASE FORWARD
YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO TENDER
YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto. The Offer is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares
residing in any jurisdiction in which the making of the Offer or acceptance
thereof would not be in compliance with the securities 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 will be
deemed to be made on behalf of the Offeror by Lazard Freres & Co. LLC or by one
or more registered brokers or dealers licensed under the laws of such
jurisdiction.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THE PEAK TECHNOLOGIES GROUP, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated April 29, 1997 (the "Offer to Purchase"), and the
related Letter of Transmittal (which together constitute the "Offer") in
connection with the offer by Kirkwood Acquisition Corp., a Delaware corporation
(the "Offeror"), a wholly owned subsidiary of FRDK, Inc., a New York
Corporation, a wholly owned subsidiary of Moore U.S.A. Inc., a Delaware
Corporation (the "Parent"), a wholly owned subsidiary of Moore Corporation
Limited, a corporation organized under the laws of Ontario, Canada, to purchase
all outstanding shares of Common Stock, par value $0.01 per share, of The Peak
Technologies Group, Inc., a Delaware corporation, including the associated
preferred stock purchase rights issued pursuant to the Rights Agreement, dated
as of March 28, 1997, between the Company and ChaseMellon Shareholder Services,
as Rights Agent, (collectively, the "Shares").
This will instruct you to tender to the Offeror the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
- -------------------------------------------
Number of Shares to be Tendered:*
- -------------------------------------------
<TABLE>
<S> <C>
Account Number: SIGN HERE
---------------------------------------------
Date: ---------------------------------------------
Date: SIGNATURE(S)
=============================================
(PRINT NAME(S))
=============================================
(PRINT ADDRESS(ES))
---------------------------------------------
(AREA CODE AND TELEPHONE NUMBER(S))
---------------------------------------------
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER(S))
</TABLE>
- ---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
<PAGE> 1
EXHIBIT (a)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
THE PEAK TECHNOLOGIES GROUP, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, MAY 27, 1997, UNLESS THE OFFER IS EXTENDED.
This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates for shares of Common Stock, par
value $0.01 per share, of The Peak Technologies Group, Inc., a Delaware
corporation (the "Company"), including the associated preferred stock purchase
rights issued pursuant to the Rights Agreement, dated as of March 28, 1997,
between the Company and ChaseMellon Shareholder Services, as Rights Agent,
(collectively, the "Shares"), are not immediately available or if the procedure
for book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary on or prior to the
Expiration Date (as defined in the Offer to Purchase). Such form may be
delivered by hand, facsimile transmission, or mail to the Depositary. See
Section 3 of the Offer to Purchase, dated April 29, 1997 (the "Offer to
Purchase").
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Courier:
P.O. Box 84 1 State Street 1 State Street
Bowling Green Station New York, New York 10004 New York, New York 10004
New York, New York 10274-0084 Attn: Reorganization Attn: Reorganization
Attn: Reorganization Operations Dept. Operations Dept.
Operations Dept. Securities Processing Window SC-1 Securities Processing Window SC-1
</TABLE>
Facsimile for Eligible Institutions:
(212) 858-2611
Confirm by Telephone:
(212) 858-2103
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUMENTS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES
NOT CONSTITUTE A VALID DELIVERY.
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.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message and certificates for Shares to the Depositary within the time
period shown herein. Failure to do so could result in a financial loss to such
Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Kirkwood Acquisition Corp., a Delaware
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, and the related Letter of Transmittal, receipt of which are hereby
acknowledged, Shares of the Company, pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase.
Number of Shares:
- --------------------------------------------------------------------------------
Certificate No(s). (if available):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
If securities will be tendered by book-entry transfer
- ----------------------------------------------------
Name of Tendering Institution:
- --------------------------------------------------------------------------------
Account Number:
- --------------------------------------------------------------------------------
at
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
SIGN HERE
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(ZIP CODE)
Area Code and Telephone Number:
- --------------------------------------------------------------------------------
Signature(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings association
or other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program or a bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934,
as amended, guarantees the delivery to the Depositary of the Shares tendered
hereby, together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile(s) thereof) and any other required
documents, or an Agent's Message (as defined in the Offer to Purchase) in the
case of a book-entry delivery of Shares, all within three New York Stock
Exchange trading days of the date hereof.
<TABLE>
<S> <C>
Name of Firm:
---------------------------------- Title:
------------------------------------------
Name:
- ------------------------------------------ ------------------------------------------
(AUTHORIZED SIGNATURE) (PLEASE PRINT OR TYPE)
Address:
----------------------------------------- Area Code and Telephone No.:
----------------
</TABLE>
DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM -- CERTIFICATES SHOULD BE
SENT WITH LETTER OF TRANSMITTAL.
Date:
- ---------------------------------------- , 199
<PAGE> 1
EXHIBIT (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-000-0000. 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 payer.
<TABLE>
<CAPTION>
------------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- ------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of the
account) account or, if combined
funds, any one of the
individuals(1)
3. Husband and wife (joint account) The actual owner of the
account or, if joint
funds, either person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the
minor is the only
contributor, the minor(1)
6. Account in the name of guardian The ward, minor, or
or committee for a designated incompetent person(3)
ward, minor, or incompetent
person
7. a. The usual revocable savings The grantor-trustee(1)
trust account (grantor is
also trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under State law
8. Sole proprietorship account The owner(4)
- ------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- ------------------------------------------------------------
<S> <C>
9. A valid trust, estate, or The legal entity (Do not
pension trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated
in the account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held in the The partnership
name of the business
13. Association, club or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or nominee
15. 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 agricultural program
payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE:If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer identification Number, at the local office of the
Social Security Administration or the internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any political subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to 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 partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to 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 payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1984, payers must generally
withhold 20% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--if you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which 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.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
<PAGE> 1
EXHIBIT A(7)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell these securities. The Offer is made only by the Offer to Purchase and
the related Letter of Transmittal and is not being made to (nor will tenders be
accepted from) holders of Shares in any jurisdiction in which the Offer or the
acceptance thereof would not be in compliance with the securities laws of such
jurisdiction. In those jurisdictions where securities laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Offeror by Lazard Freres & Co. LLC or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
The Peak Technologies Group, Inc.
at
$18.00 Net Per Share
by
Kirkwood Acquisition Corp.
an indirect wholly owned subsidiary of
Moore Corporation Limited
Kirkwood Acquisition Corp., a Delaware corporation (the "Offeror"), a
wholly owned subsidiary of FRDK, Inc., a New York Corporation, a wholly owned
subsidiary of Moore U.S.A. Inc., a Delaware Corporation (the "Parent"), a wholly
owned subsidiary of Moore Corporation Limited, a corporation organized under the
laws of Ontario, Canada, hereby offers to purchase all outstanding shares of
Common Stock, par value $0.01 per share (the "Common Stock"), of The Peak
Technologies Group, Inc., a Delaware corporation (the "Company"), including the
associated preferred stock purchase rights issued pursuant to the Rights
Agreement, dated as of March 28, 1997, between the Company and ChaseMellon
Shareholder Services, as Rights Agent, (the "Rights" and, together with the
Common Stock, the "Shares"), at a purchase price of $18.00 per Share, net to the
seller in cash, without interest, upon the terms and subject to the conditions
set forth in this Offer to Purchase and in the related Letter of Transmittal
(which together constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE ON 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, MAY 27, 1997, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger dated
as of April 23, 1997 (the "Merger Agreement") among the Parent, the Offeror and
the Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with relevant provisions of Delaware law, the Offeror will be merged
with and into the Company (the "Merger"). At the effective time of the Merger
(the "Effective Time"), each Share issued and outstanding immediately prior to
the Effective Time (other than Shares owned by the Company or any subsidiary of
the Company, or by the Parent, the Offeror
<PAGE> 2
or any other subsidiary of the Parent, or, if holders of Shares are entitled to
appraisal rights under Delaware law, Shares which are held by shareholders, if
any, who properly exercise their appraisal rights under Delaware law) will be
converted into the right to receive $18.00 in cash, or any higher price that is
paid in the Offer, without interest.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the Expiration Date (as hereinafter defined)
that number of Shares constituting a majority of the outstanding Shares
(determined on a fully diluted basis for all outstanding stock options and any
other rights to acquire Shares), (ii) expiration or termination of the
applicable waiting period under (1) the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and (2) Section 24a, Subsection 2, Sentence 1 of the
German Act Against Restraint of Trade, and (iii) satisfaction of certain other
terms and conditions. See section 15 of the Offer to Purchase.
The Board of Directors of the Company has approved the Offer, the Merger
and the Merger Agreement, has determined that the terms of each of the Offer and
the Merger are fair to and in the best interests of the Company's stockholders,
and recommends that the Company's stockholders accept the Offer and tender their
Shares in the Offer. Subject to the terms of the Merger Agreement and applicable
law, the Offeror expressly reserves the right, at any time or from time to time,
to extend the period of time during which the Offer is open and thereby delay
acceptance for payment of, or payment for, any Shares by giving oral or written
notice of such extension to the Depositary (as defined in the Offer to Purchase)
and to amend the Offer in any other respect by giving oral or written notice of
such extension to the Depositary. The Offeror shall not have any obligation to
pay interest on the purchase price for tendered Shares whether or not the
Offeror exercises its rights to extend the period of time during which the Offer
is open. Any such extension will be followed by a public announcement thereof by
no later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer, subject
to the right of a tendering stockholder to withdraw such stockholder's Shares.
Without limiting the manner in which the Offeror may choose to make any public
announcement, Offeror will have no obligation to publish, advertise or otherwise
communicate any such announcement other than by issuing a release to the Dow
Jones News Service or as otherwise may be required by law.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn if and
when the Offeror gives oral or written notice to the Depositary of the Offeror's
acceptance of such Shares for payment. In all cases, payment for Shares
purchased pursuant to the Offer will be made by deposit of the purchase price
with the Depositary, which shall act as agent for tendering stockholders for the
purpose of receiving payment from the Offeror and transmitting payment to the
tendering stockholders. Payment for Shares accepted for payment pursuant to the
Offer will be made only after timely receipt by
2
<PAGE> 3
the Depositary of certificates for such Shares or timely confirmation of a
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facilities (as defined in the Offer to Purchase) pursuant to
the procedures set forth in the Offer to Purchase and timely receipt by the
Depositary of a properly completed and duly executed Letter of Transmittal (or
manually signed 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.
If any of the conditions set forth in the Offer to Purchase that relate to
the Offeror's obligations to purchase the Shares are not satisfied by 12:00
Midnight, New York City time, on Tuesday, May 27, 1997 (or any other time then
set as the Expiration Date), the Offeror may, subject to the terms of the Merger
Agreement, (i) extend the Offer and, subject to applicable withdrawal rights,
retain all tendered Shares until the expiration of the Offer as so extended,
(ii) subject to complying with applicable rules and regulations of the
Securities and Exchange Commission, accept for payment all Shares so tendered
and not extend the Offer, (iii) amend the Offer or (iv) terminate the Offer and
not accept for payment any Shares and return all tendered Shares to tendering
stockholders. The term "Expiration Date" shall mean 12:00 Midnight, New York
City time, on Tuesday, May 27, 1997, unless the Offeror shall have extended the
period of time for which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date at which the Offer, as so extended by
the Offeror, shall expire. The Offeror expressly reserves the right, in its sole
discretion, at any time or from time to time, subject to applicable law and to
the terms of the Merger Agreement, to extend the period during which the Offer
is open by giving oral or written notice of such extension to the Depositary
followed by, as promptly as practicable, a public announcement thereof no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. Except as otherwise provided in Section 4
of the Offer to Purchase, tenders of Shares made pursuant to the Offer are
irrevocable, except that Shares tendered pursuant to the Offer may be withdrawn
at any time prior to the Expiration Date, and, unless theretofore accepted for
payment, may also be withdrawn at any time after June 27, 1997. For a withdrawal
to be effective, a written, telegraphic, telex 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 the 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 and the name of the registered
holder, if different from the name of the person who tendered the Shares. If
certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered for the account of an
Eligible Institution (as defined in the Offer to Purchase), the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution. All
questions as to the form and validity
3
<PAGE> 4
(including time of receipt) of a notice of withdrawal will be determined by the
Offeror, in its sole discretion, and its determination shall be final and
binding on all parties.
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 to the Offeror its lists of
stockholders and security position listings for the purpose of disseminating the
Offer to holders of Shares. The Offer to Purchase, the related Letter of
Transmittal and other related materials are being mailed to record holders of
Shares and will be mailed to brokers, dealers, commercial banks, trust companies
and similar persons whose names, or the names of whose nominees, appear on the
stockholder lists 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 related Letter of Transmittal contain
important information that should be read before any decision is made with
respect to the Offer. Requests for copies of the Offer to Purchase and the
related Letter of Transmittal and other tender offer materials may be directed
to the Information Agent or the Dealer Manager as set forth below, and copies
will be furnished promptly at the Offeror's expense. Questions or requests for
assistance may also be directed to the Information Agent or the Dealer Manager.
No fees or commissions will be payable to brokers, dealers or other persons
other than the Information Agent, the Dealer Manager and the Depositary for
soliciting 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
(212) 929-5500 (call collect)
or
Call Toll-Free (800) 322-2885
The Dealer Manager for the Offer is:
LAZARD FRERES & CO. LLC
30 Rockefeller Plaza
New York, New York 10020
(212) 632-6717
(call collect)
April 29, 1997
4
<PAGE> 1
EXHIBIT (a)(8)
NEWS RELEASE
[MOORE LETTERHEAD]
MOORE ENTERS DEFINITIVE AGREEMENT TO ACQUIRE
LEADING SYSTEMS INTEGRATOR
Moore builds on high margin - high technology growth strategy as the
leading provider of label systems solutions
TORONTO, ON & CHICAGO, IL, (April 23, 1997) - Moore Corporation Limited
announced today it has entered into a definitive agreement with The Peak
Technologies Group, Inc. to merge in an all-cash transaction valued at
approximately US$210 million. Moore Corporation, through an indirect wholly
owned subsidiary, will commence an all-cash tender offer for all outstanding
shares of The Peak Technologies Group, Inc. stock at a price of $18.00 per
share.
Peak is the leading systems integrator in the high growth $12 billion
bar code-based data capture market, a part of which forms a significant
component of the label & labels systems industry.
Reto Braun, chairman & CEO of Moore Corporation said, "This acquisition
moves Moore another step forward in our strategy to increase the percentage of
our revenues coming from the high technology segment of our business which
brings higher margin and higher growth. Peak complements Moore's position as the
global leader in label systems and brings to Moore leading edge technologies in
bar code-based data capture systems as well as a strong track record in
capturing increased market share."
Peak is the world's largest systems integrator of bar code-based data
capture systems and equipment. Peak has approximately 1,000 employees in 110
locations in the U.S. and Europe. Revenues in 1996 were US$216 million. As Peak
does not manufacture labels, Moore will provide products from of its worldwide
plants to Peak's customers.
Nicholas Toms, chairman & CEO of The Peak Technologies Group, Inc.
said, "We are pleased to join Moore's team and look forward to serving our
mutual customers worldwide. I am confident that our combined expertise will
result in providing customers with superior data capture and labeling solutions
better and faster than anyone else in the labels and label systems industry."
James Wyner, president of Labels and Label Systems at Moore said, "This
acquisition will double our segment revenues and significantly enhance Moore's
broad range of label systems products and services from consultation and
assessment to design and delivery. Peak further complements our operations by
bringing new customer segments and additional capabilities that will generate
highly profitable incremental growth for Moore."
The offer is conditioned upon, among other things, the tendering of at
least a majority of the outstanding shares of The Peak Technologies Group, Inc.
and the expiration of governmental waiting periods related to acquisitions.
###
Moore Corporation Limited (T&E, ME, NYSE: MCL) is the leading global partner
helping companies communicate through print and digital technologies. As the
leading supplier of document formulated information, print outsourcing and
data-based marketing, Moore designs, manufactures and delivers business
communications products, services and solutions to customers. Founded in 1982,
Moore has approximately 19,000 employees and over 100 manufacturing facilities
serving customers in 47 countries. Sales in 1996 were US$2.5 billion. The Moore
internet address is http;//www.moore.com.
The Peak Technologies Group, Inc. (NASDAQ: Peak) is the dominant
integrator of data capture, printing and service solutions around the globe.
Offering its customers Peak's software and professional services along with
"best of breed" hardware from the leading manufacturers. Peak operates from 110
locations worldwide, 80 of which are in the United States and Canada and 30 of
which are in Europe. The Peak internet address is www.peaktech.com.
<PAGE> 1
EXHIBIT (a)(9)
MOORE COMMENCES TENDER OFFER FOR PEAK AT $18 PER SHARE
TORONTO,ON (April 29, 1997)--Moore Corporation Limited today commenced the
tender offer announced on April 23, 1997 for Peak Technologies Group Inc. at
U.S.$18.00 per share in cash through its indirect wholly owned subsidiary,
Kirkwood Acquisition Corp. As previously announced, any shares not purchased in
the tender offer will be acquired by Moore in a subsequent merger at the same
$18.00 cash price.
The Board of Directors of Peak has approved the offer and the merger and
determined that the terms of the offer and the merger are fair and in the best
interests of the stockholders of Peak, and recommends that stockholders of Peak
accept the offer and tender their shares. The offer is conditioned upon, among
other things, there being tendered and not withdrawn a number of Peak shares
which is not less than a majority of the shares outstanding on a fully diluted
basis and expiration of governmental waiting periods relating to acquisitions.
The offer and withdrawal rights will expire at 12:00 midnight EST, on May 27,
1997, unless the offer is extended.
Lazard Freres & Co. LLC. is serving as dealer manager in connection with the
tender offer. MacKenzie Partners, Inc. will act as information agent in
connection with the tender offer.
Moore Corporation Limited (TSE, ME, NYSE:MCL) is the leading global partner
helping companies communicate through print and digital technologies. As the
leading supplier of document formatted information, Moore designs, manufactures
and delivers business communications products, services and solutions to
customers. Founded in 1882, Moore has approximately 19,000 employees and over
100 manufacturing facilities serving customers in 47 countries. Sales in 1996
were US $2.5 billion. The Moore Internet address is http://www.moore.com.
<PAGE> 1
EXHIBIT (b)(1)
U.S. $1,100,000,000
CREDIT AGREEMENT,
dated as of August 10, 1995,
among
FRDK, INC.,
as the Borrower,
MOORE CORPORATION LIMITED,
as the Guarantor,
CERTAIN COMMERCIAL BANKS,
as the Lenders
and
THE BANK OF NOVA SCOTIA,
as the Agent for the Lenders.
<PAGE> 2
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms...................................................... 1
1.2. Use of Defined Terms............................................... 13
1.3. Cross-References................................................... 13
1.4. Accounting and Financial Determinations............................ 14
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
2.1. Commitments........................................................ 14
2.1.1. Commitment of Each Lender.......................................... 14
2.1.2. Lenders Not Permitted or Required To Make Loans.................... 14
2.2. Reduction of Commitment Amount..................................... 14
2.3. Borrowing Procedure................................................ 15
2.4. Continuation and Conversion Elections.............................. 15
2.5. Funding............................................................ 15
2.6. Notes.............................................................. 16
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments......................................... 16
3.2. Interest Provisions................................................ 17
3.2.1. Rates.............................................................. 17
3.2.2. Post-Maturity Rates................................................ 18
3.2.3. Payment Dates...................................................... 18
3.3. Fees............................................................... 19
3.3.1. Commitment Fee..................................................... 19
3.3.2. Other Fees......................................................... 19
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1. LIBO Rate Lending Unlawful......................................... 20
4.2. Deposits Unavailable............................................... 20
4.3. Increased LIBO Rate Loan Costs, etc................................ 20
4.4. Funding Losses..................................................... 21
4.5. Increased Capital Costs............................................ 21
4.6. Taxes.............................................................. 22
4.7. Payments, Computations, etc........................................ 23
<PAGE> 3
SECTION PAGE
4.8. Sharing of Payments................................................ 24
4.9. Setoff............................................................. 25
4.10. Replacement of Lenders............................................. 25
ARTICLE V
CONDITIONS TO BORROWING
5.1. Initial Borrowing.................................................. 26
5.1.1. Resolutions, etc................................................... 26
5.1.2. Delivery of Notes.................................................. 26
5.1.3. Opinions of Counsel................................................ 26
5.1.4. Closing Fees, Expenses, etc........................................ 26
5.1.5. Satisfactory Legal Form............................................ 26
5.2. All Borrowings..................................................... 27
5.2.1. Compliance with Warranties, No Default, etc........................ 27
5.2.2. Borrowing Request.................................................. 27
5.2.3. Satisfactory Legal Form............................................ 27
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Organization, etc.................................................. 27
6.2. Due Authorization, Non-Contravention, etc.......................... 28
6.3. Government Approval, Regulation, etc............................... 28
6.4. Validity, etc...................................................... 29
6.5. Financial Information.............................................. 29
6.6. No Material Adverse Change......................................... 29
6.7. Litigation, Labor Controversies, etc............................... 29
6.8. Ownership of Properties............................................ 29
6.9. Taxes.............................................................. 30
6.10. Pension and Welfare Plans.......................................... 30
6.11. Environmental Warranties........................................... 30
6.12. Regulations G, T, U and X.......................................... 32
6.13. Accuracy of Information............................................ 32
ARTICLE VII
COVENANTS
7.1. Affirmative Covenants.............................................. 32
7.1.1. Financial Information, Reports, Notices, etc....................... 33
7.1.2. Compliance with Laws, etc.......................................... 34
7.1.3. Books and Records.................................................. 35
7.1.4. Environmental Covenant............................................. 35
7.1.5. Use of Proceeds.................................................... 35
7.2. Negative Covenants................................................. 35
7.2.1. Business Activities................................................ 35
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<PAGE> 4
SECTION PAGE
7.2.2. Indebtedness....................................................... 36
7.2.3. Liens.............................................................. 36
7.2.4. Contingent Obligations............................................. 38
7.2.5. Dissolution, etc................................................... 38
7.2.6. Transactions with Affiliates....................................... 38
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Listing of Events of Default....................................... 38
8.1.1. Non-Payment of Obligations......................................... 38
8.1.2. Breach of Warranty................................................. 39
8.1.3. Non-Performance of Certain Covenants and Obligations............... 39
8.1.4. Non-Performance of Other Covenants and Obligations................. 39
8.1.5. Default on Other Indebtedness...................................... 39
8.1.6. Judgment........................................................... 40
8.1.7. Pension Plans...................................................... 40
8.1.8. Change in Control.................................................. 41
8.1.9. Bankruptcy, Insolvency, etc........................................ 41
8.2. Action if Bankruptcy............................................... 41
8.3. Action if Other Event of Default................................... 42
ARTICLE IX
THE AGENT
9.1. Actions............................................................ 42
9.2. Funding Reliance, etc.............................................. 43
9.3. Exculpation........................................................ 43
9.4. Successor.......................................................... 43
9.5. Loans by Scotiabank................................................ 44
9.6. Credit Decisions................................................... 44
9.7. Copies, etc........................................................ 44
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Waivers, Amendments, etc........................................... 45
10.2. Notices............................................................ 46
10.3. Payment of Costs and Expenses...................................... 46
10.4. Indemnification.................................................... 47
10.5. Survival........................................................... 48
10.6. Severability....................................................... 48
10.7. Headings........................................................... 48
10.8. Execution in Counterparts, Effectiveness, etc...................... 48
10.9. Governing Law; Entire Agreement.................................... 49
10.10. Successors and Assigns............................................. 49
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<PAGE> 5
SECTION PAGE
10.11. Sale and Transfer of Loans and Note; Participations in
Loans and Note................................................... 49
10.11.1. Assignments........................................................ 49
10.11.2. Participations..................................................... 51
10.12. Other Transactions................................................. 52
10.13. Forum Selection and Consent to Jurisdiction........................ 52
10.14. Waiver of Jury Trial............................................... 53
ARTICLE XI
GUARANTY PROVISIONS
11.1. Guaranty........................................................... 53
11.2. Acceleration of Guaranty........................................... 53
11.3. Guaranty Absolute, etc............................................. 54
11.4. Reinstatement, etc................................................. 55
11.5. Waiver, etc........................................................ 55
11.6. Postponement of Subrogation, etc................................... 55
11.7. Judgment........................................................... 56
SCHEDULE I - Disclosure Schedule
EXHIBIT A - Form of Note
EXHIBIT B - Form of Borrowing Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Lender Assignment Agreement
EXHIBIT E - Form of Opinion of New York Counsel
to the Obligors
EXHIBIT F - Form of Opinion of Canadian Counsel
to the Obligors
-iv-
<PAGE> 6
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of August 10, 1995, among FRDK, INC., a New
York corporation (the "Borrower"), MOORE CORPORATION LIMITED, an Ontario
corporation (the "Guarantor"), the various commercial banks as are or may become
parties hereto (collectively, the "Lenders"), and THE BANK OF NOVA SCOTIA
("Scotiabank"), as agent (the "Agent") for the Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower is a wholly-owned Subsidiary of the Guarantor; and
WHEREAS, the Borrower desires to obtain Commitments from the Lenders
pursuant to which Loans, in a maximum aggregate principal amount at any one time
outstanding not to exceed $1,100,000,000, will be made to the Borrower from time
to time prior to the Commitment Termination Date; and
WHEREAS, the Guarantor desires to unconditionally guarantee the obligations
of the Borrower hereunder; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend such
Commitments and make such Loans to the Borrower; and
WHEREAS, the proceeds of such Loans will be used (i) to finance in part the
acquisition of up to all of the issued and outstanding shares of capital stock
of Wallace Computer Services, Inc., a Delaware corporation ("WCSI"), and to pay
expenses arising in connection with such acquisition (including certain
restructuring costs arising subsequent to and as a result of such acquisition)
and (ii) for general corporate purposes of the Guarantor, the Borrower and their
direct and indirect Subsidiaries (including the acquisition of other businesses,
subject to Section 7.2.1);
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
<PAGE> 7
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing
general partners; or
(b) to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"Agent" is defined in the preamble and includes each other Person as shall
have subsequently been appointed as the successor Agent pursuant to Section 9.4.
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"Alternate Base Rate" means, on any date and with respect to all Base Rate
Loans, a fluctuating rate of interest per annum equal to the higher of
(a) the rate of interest most recently established by Scotiabank at
its Domestic Office as its base rate for Dollar loans; and
(b) the Federal Funds Rate most recently determined by the Agent plus
1/2 of 1%.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by Scotiabank in connection with extensions of credit.
Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans will take effect simultaneously with each change in the Alternate
Base Rate. The Agent will give notice promptly to the Borrower and the Lenders
of changes in the Alternate Base Rate.
"Assignee Lender" is defined in Section 10.11.1.
"Authorized Officer" means, relative to either Obligor, those of its
officers whose signatures and incumbency shall have been certified to the Agent
and the Lenders pursuant to Section 5.1.1.
-2-
<PAGE> 8
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Borrower" is defined in the preamble.
"Borrowing" means the Loans of the same type and, in the case of LIBO Rate
Loans, having the same Interest Period made by all Lenders on the same Business
Day and pursuant to the same Borrowing Request in accordance with Section 2.1.
"Borrowing Request" means a loan request and certificate duly executed by
an Authorized Officer of the Borrower, substantially in the form of Exhibit B
hereto.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal holiday
on which banks are authorized or required to be closed in New York City,
Toronto, Canada, Chicago, Illinois or Atlanta, Georgia; and
(b) relative to the making, continuing, prepaying or repaying of any
LIBO Rate Loans, any day on which dealings in Dollars are carried on in the
London interbank market.
"Capitalized Lease Liabilities" means all monetary obligations of the
Guarantor or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of
(x) beneficial ownership (within the meaning of Rules 13d-3 and
13d-5 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) of, or
-3-
<PAGE> 9
(y) the right to acquire (whether such right is exercisable
immediately, after the passage of time, upon the happening of an event
or otherwise, but excluding any such right that is subject to the
consent of the Required Lenders hereunder)
30% or more of the outstanding shares of the stock of the Guarantor having the
power to vote for the election of directors of the Guarantor, on a fully diluted
basis.
"Code" means the Internal Revenue Code of 1986, as amended or otherwise
modified from time to time.
"Commitment" means, relative to any Lender, such Lender's obligation to
make Loans pursuant to Section 2.1.1.
"Commitment Amount" means, on any date, $1,100,000,000, as such amount may
be reduced from time to time pursuant to Section 2.2.
"Commitment Termination Date" means the earliest of
(a) August 8, 1996;
(b) the date on which the Commitment Amount is terminated in full or
reduced to zero pursuant to Section 2.2; and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (b) or (c), the Commitments
shall terminate automatically and without further action.
"Commitment Termination Event" means
(a) the occurrence of any Event of Default described in clauses (a)
through (d) of Section 8.1.9 with respect to either Obligor; or
(b) the occurrence and continuance of any other Event of Default and
either
(i) the declaration of the Loans to be due and payable pursuant
to Section 8.3, or
(ii) in the absence of such declaration, the giving of notice by
the Agent, acting at the direction of the Required Lenders, to the
Borrower that the Commitments have been terminated.
-4-
<PAGE> 10
"Contingent Liability" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability at any time
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount of the debt, obligation or other liability
guaranteed thereby at such time.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
"Controlled Group" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Guarantor, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
"Debt" means the outstanding amount of all Indebtedness of the Guarantor
and its Subsidiaries of the type referred to in clauses (a), (b) and (c) of the
definition of "Indebtedness", determined on a consolidated basis for the
Guarantor and its Subsidiaries.
"Default" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Agent and the Required
Lenders.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means, relative to any Lender, the office of such Lender
designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time
-5-
<PAGE> 11
by notice from such Lender, as the case may be, to each other Person party
hereto.
"Effective Date" means the date this Agreement becomes effective pursuant
to Section 10.8.
"Environmental Laws" means all applicable federal, state, provincial or
local statutes, laws, ordinances, codes, rules, regulations and guidelines
(including consent decrees and administrative orders) relating to public health
and safety and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"Event of Default" is defined in Section 8.1.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to
(a) 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
(b) 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 Scotiabank from three federal funds brokers of recognized
standing selected by it.
"Fee Letter" means the confidential letter, dated August 3, 1995, between
the Guarantor and Scotiabank.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months ending
on December 31; references to a Fiscal Year with a number corresponding to any
calendar year (e.g. the "1995 Fiscal Year") refer to the Fiscal Year ending on
the December 31 occurring during such calendar year.
"F.R.S. Board" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"GAAP" is defined in Section 1.4.
-6-
<PAGE> 12
"Guarantor" is defined in the preamble.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any other applicable
federal, state, provincial or local law, regulation, ordinance or
requirement (including consent decrees and administrative orders) relating
to or imposing liability or standards of conduct concerning any hazardous,
toxic or dangerous waste, substance or material, all as amended or
hereafter amended.
"Hedging Obligations" means, with respect to any Person, all liabilities of
such Person under interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency exchange rates.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of the Guarantor, any qualification or exception to such opinion or
certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
the Guarantor to be in default of any of its obligations under Section
7.2.2.
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"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases which have
been or should be, in accordance with GAAP, recorded as Capitalized Lease
Liabilities;
(d) all other items which, in accordance with GAAP, would be included
as liabilities on the liability side of the balance sheet of such Person as
of the date at which Indebtedness is to be determined;
(e) net amounts owing by such Person under all Hedging Obligations
(after giving effect to amounts owed to such Person under such Hedging
Obligations which it is permitted to set off against amounts payable by it
thereunder or any defense to payment it may have, including as a result of
a default by a counterparty);
(f) whether or not so included as liabilities in accordance with GAAP,
all obligations of such Person to pay the deferred purchase price of
property or services, and indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse; and
(g) all Contingent Liabilities of such Person in respect of any of the
foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint
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venturer which has liability as a general partner, unless, in any such case, no
holder of such Indebtedness has any recourse to such Person in respect thereof.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Interest Period" means, relative to any LIBO Rate Loans, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4
and shall end on (but exclude) the day which numerically corresponds to such
date one, two, three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), as the
Borrower may select in its relevant notice pursuant to Section 2.3 or 2.4;
provided, however, that
(a) the Borrower shall not be permitted to select Interest Periods to
be in effect at any one time which have expiration dates occurring on more
than eight different dates;
(b) Interest Periods commencing on the same date for Loans comprising
part of the same Borrowing shall be of the same duration;
(c) if such Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first Business
Day of a calendar month, in which case such Interest Period shall end on
the Business Day next preceding such numerically corresponding day); and
(d) no Interest Period may end later than the date set forth in clause
(a) of the definition of "Commitment Termination Date".
"knowledge" means, in the context of a Borrowing other than the initial
Borrowing, with respect to the Guarantor or the Borrower, the actual knowledge
of the (a) the Chairman of the Guarantor, (b) the President or Chief Executive
Officer of the Guarantor, (c) the Chief Financial Officer of the Guarantor or
(d) the General Counsel of the Guarantor.
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit D hereto.
"Lenders" is defined in the preamble.
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"Leverage Ratio" means, as of any date of determination, the ratio of
(a) Debt
to
(b) Total Capitalization.
"LIBO Rate" is defined in Section 3.2.1.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" is defined in Section 3.2.1.
"LIBOR Office" means, relative to any Lender, the office of such Lender
designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender as designated from time to
time by notice from such Lender to the Borrower and the Agent, whether or not
outside the United States, which shall be making or maintaining LIBO Rate Loans
of such Lender hereunder; provided that any such designation shall not increase
any amount payable pursuant to Section 4.5 or 4.6 hereof.
"LIBOR Reserve Percentage" is defined in Section 3.2.1.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Loan" is defined in Section 2.1.1.
"Loan Document" means this Agreement, the Notes, the Fee Letter, each
Borrowing Request and each Continuation/Conversion Notice.
"Material Adverse Effect" means any material adverse effect on (i) the
financial condition or operations of the Guarantor and its Subsidiaries (taken
as a whole) or (ii) the legality, validity or enforceability of this Agreement,
the Notes or any other Loan Document.
"Note" means a promissory note of the Borrower payable to any Lender, in
the form of Exhibit A hereto (as such promissory note may be amended, endorsed
or otherwise modified from time to time), evidencing the aggregate Indebtedness
of the Borrower to
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such Lender resulting from outstanding Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"Obligations" means all obligations (monetary or otherwise) of the Borrower
and the Guarantor arising under or in connection with this Agreement and each
other Loan Document.
"Obligors" means the Borrower and the Guarantor.
"Organic Document" means, relative to either Obligor, its certificate of
incorporation, its by-laws and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its authorized shares of capital
stock.
"Participant" is defined in Section 10.11.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in section 4001(a)(3) of ERISA), and which is sponsored by the
Guarantor or any corporation, trade or business that is, along with the
Guarantor, a member of a Controlled Group.
"Percentage" means, relative to any Lender, the percentage set forth
opposite its signature hereto or set forth in the Lender Assignment Agreement,
as such percentage may be adjusted from time to time pursuant to Lender
Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and
delivered pursuant to Section 10.11.
"Permitted Liens" means any Lien permitted under Section 7.2.3(a) through
(n), inclusive.
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity, whether
acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Quarterly Payment Date" means the last day of each March, June, September,
and December or, if any such day is not a Business Day, the next succeeding
Business Day.
"Release" means a "release", as such term is defined in CERCLA.
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"Relevant Indebtedness" is defined in Section 8.1.5.
"Relevant Person" means (a) the Guarantor, (b) the Borrower, (c) each
Significant Subsidiary and (d) each other Subsidiary of the Guarantor that, if
an Event of Default of the type described in Section 8.1.9 occurred with respect
to such other Subsidiary, it would reasonably be expected to have a Material
Adverse Effect.
"Replacement Notice" is defined in Section 4.10.
"Required Lenders" means, at any time, Lenders holding at least 51% of the
then aggregate outstanding principal amount of the Notes then held by the
Lenders, or, if no such principal amount is then outstanding, Lenders having at
least 51% of the Commitments.
"Resource Conservation and Recovery Act" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect from time to
time.
"Scotiabank" is defined in the preamble.
"Significant Subsidiary" means each Subsidiary of the Guarantor that
(a) accounted for at least 10% of consolidated revenues of the
Guarantor and its Subsidiaries, in each case for the Fiscal Year of the
Guarantor immediately preceding the date as of which any such determination
is made (or, if such Subsidiary was not a Subsidiary of the Guarantor
during any portion of such Fiscal Year, would have accounted for at least
10% of consolidated revenues of the Guarantor and its Subsidiaries if it
had been a Subsidiary of the Guarantor during all of such Fiscal Year) and
as reflected on the financial statements of the Guarantor for such period;
or
(b) has assets which represent at least 10% of the consolidated assets
of the Guarantor and its Subsidiaries as of the last day of the Fiscal Year
immediately preceding the date as of which any such determination is made
(or, if such Subsidiary was not a Subsidiary of the Guarantor as of the
last day of such Fiscal Year, would have had assets which represented at
least 10% of the consolidated assets of the Guarantor and its Subsidiaries
if it had been a Subsidiary of the Guarantor as of the last day of such
Fiscal Year) and as reflected on the financial statements of the Guarantor
as of such date.
"Stated Maturity Date" means August 8, 1996.
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"Subject Lender" is defined in Section 4.10.
"Subsidiary" means, with respect to any Person, any corporation of which
more than 50% of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person, by such
Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person.
"Taxes" is defined in Section 4.6.
"Total Capitalization" shall mean, on any date of determination, the sum of
(i) Debt of the Guarantor and its Subsidiaries on a consolidated basis and (ii)
the amount, determined on a consolidated basis, in the capital stock account
plus (or minus in the case of a deficit) the additional paid-in capital and
retained earnings of the Guarantor and its Subsidiaries, and in any event, net
of the value of treasury stock in such capital stock account.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"United States" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
"WCSI" is defined in the preamble.
"Welfare Plan" means a "welfare plan", as such term is defined in section
3(1) of ERISA.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in the Disclosure Schedule and in each Note,
Borrowing Request, Continuation/Conversion Notice, Loan Document, notice and
other communication delivered from time to time in connection with this
Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
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SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under Section 7.2.2) shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be prepared in
accordance with, those generally accepted accounting principles in Canada as in
effect on December 31, 1994, provided that (x) for purposes of Section 7.2.2 and
for purposes of any certificate related to determining compliance with such
Section delivered pursuant to Section 7.1.1(b) or (c), such accounting
principles will be conformed to U.S. generally accepted accounting principles
and (y) for purposes of Sections 7.1.1 (a) and (b), the financial statements
referred to therein will be conformed to U.S. generally accepted accounting
principles to the extent required for the filing of the Guarantor's reports on
Forms 10-K and 10-Q of the Securities and Exchange Commission ("GAAP").
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. Commitments. On the terms and subject to the conditions of
this Agreement (including Article V), each Lender severally agrees to make Loans
pursuant to the Commitments described in this Section 2.1.
SECTION 2.1.1. Commitment of Each Lender. From time to time on any Business
Day occurring prior to the Commitment Termination Date, each Lender will make
loans (relative to such Lender, and of any type, its "Loans") to the Borrower
equal to such Lender's Percentage of the aggregate amount of the Borrowing
requested by the Borrower to be made on such day. On the terms and subject to
the conditions hereof, the Borrower may from time to time borrow, prepay and
reborrow Loans.
SECTION 2.1.2. Lenders Not Permitted or Required To Make Loans. No Lender
shall be permitted or required to make any Loan if, after giving effect thereto,
the aggregate outstanding principal amount of all Loans
(a) of all Lenders would exceed the Commitment Amount,
or
(b) of such Lender would exceed such Lender's Percentage of the
Commitment Amount.
SECTION 2.2. Reduction of Commitment Amount. The Borrower may, from time to
time on any Business Day, voluntarily reduce
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the Commitment Amount; provided, however, that all such reductions shall require
at least three Business Days' prior notice to the Agent and be permanent, and
any partial reduction of the Commitment Amount shall be in a minimum amount of
$1,000,000 and in an integral multiple of $1,000,000.
SECTION 2.3. Borrowing Procedure. By delivering a Borrowing Request to the
Agent on or before 10:00 a.m., New York City time, on a Business Day, the
Borrower may from time to time irrevocably request, on not less than one (in the
case of Base Rate Loans) and three (in the case of LIBO Rate Loans) nor more
than ten (in the case of all Loans) Business Days' notice, that a Borrowing be
made in a minimum amount of $1,000,000 and an integral multiple of $1,000,000,
or in the unused amount of the Commitments. On the terms and subject to the
conditions of this Agreement, each Borrowing shall be comprised of the type of
Loans, and shall be made on the Business Day, specified in such Borrowing
Request. On or before 11:00 a.m. (New York City time) on such Business Day each
Lender shall deposit with the Agent same day funds in an amount equal to such
Lender's Percentage of the requested Borrowing. Such deposit will be made to an
account which the Agent shall specify from time to time by notice to the
Lenders. To the extent funds are received from the Lenders, the Agent shall make
such funds available to the Borrower by wire transfer to the accounts the
Borrower shall have specified in its Borrowing Request (and, if such an account
is maintained at a bank located in the United States, the Agent will make such
funds available by no later than 2:00 p.m. (New York City time) on the day so
received). No Lender's obligation to make any Loan shall be affected by any
other Lender's failure to make any Loan.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Agent on or before 10:00 a.m., New York
City time, on a Business Day, the Borrower may from time to time irrevocably
elect, on not less than three nor more than ten Business Days' notice that all,
or any portion in an aggregate minimum amount of $1,000,000 and an integral
multiple of $1,000,000, of any Loans be, in the case of Base Rate Loans,
converted into LIBO Rate Loans or, in the case of LIBO Rate Loans, be converted
into a Base Rate Loan or continued as a LIBO Rate Loan (in the absence of
delivery of a Continuation/Conversion Notice with respect to any LIBO Rate Loan
at least three Business Days before the last day of the then current Interest
Period with respect thereto, such LIBO Rate Loan shall, on such last day,
automatically convert to a Base Rate Loan); provided, however, that (i) each
such conversion or continuation shall be pro rated among the applicable
outstanding Loans of all Lenders, and (ii) no portion of the outstanding
principal amount of any Loans may be continued as, or be converted into, LIBO
Rate Loans when any Event of Default has occurred and is continuing.
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SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender (including for purposes of Sections 4.3 through
4.6, inclusive), and the obligation of the Borrower to repay such LIBO Rate Loan
shall nevertheless be to such Lender for the account of such foreign branch,
affiliate or international banking facility. In addition, each of the Guarantor
and the Borrower hereby consent and agree that, for purposes of any
determination to be made for purposes of Sections 4.1, 4.2, 4.3 or 4.4, it shall
be conclusively assumed that each Lender elected to fund all LIBO Rate Loans by
purchasing Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.6. Notes. Each Lender's Loans under its Commitment shall be
evidenced by a Note payable to the order of such Lender in a maximum principal
amount equal to such Lender's Percentage of the original Commitment Amount. The
Borrower hereby irrevocably authorizes each Lender to make (or cause to be made)
appropriate notations on the grid attached to such Lender's Note (or on any
continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of, the outstanding principal of, and the interest rate and
Interest Period applicable to the Loans evidenced thereby. Such notations shall
be conclusive and binding on the Borrower absent manifest error; provided,
however, that the failure of any Lender to make any such notations shall not
limit or otherwise affect any Obligations of either of the Obligors.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. The Borrower shall repay in full
the unpaid principal amount of each Loan upon the Stated Maturity Date. Prior
thereto, the Borrower
(a) may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of any
Loans; provided, however, that
(i) any such prepayment shall be made pro rata among Loans of the
same type (such type to be specified by the Borrower) and, if
applicable, having the same Interest Period (such Interest Period or
Interest
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Periods to be specified by the Borrower) of all Lenders;
(ii) all such voluntary prepayments shall require at least three
(or, in the case of Base Rate Loans, two) but no more than ten
Business Days' prior written notice to the Agent; and
(iii) all such voluntary partial prepayments shall be in an
aggregate minimum amount of $1,000,000 and an integral multiple of
$1,000,000;
(b) shall, on each date when any reduction in the Commitment Amount
shall become effective, including pursuant to Section 2.2, make a mandatory
prepayment of all Loans equal to the excess, if any, of the aggregate,
outstanding principal amount of all Loans over the Commitment Amount as so
reduced; and
(c) shall, immediately upon any acceleration of the Stated Maturity
Date of any Loans pursuant to Section 8.2 or Section 8.3, repay all Loans,
unless, pursuant to Section 8.3, only a portion of all Loans is so
accelerated, in which case the portion of the Loans so accelerated shall be
repaid.
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4. No voluntary
prepayment of principal of any Loans shall cause a reduction in the Commitment
Amount.
SECTION 3.2. Interest Provisions. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
SECTION 3.2.1. Rates. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a Base Rate Loan,
equal to the Alternate Base Rate from time to time in effect; and
(b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus a margin of 1/4 of 1%.
The "LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a
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LIBO Rate Loan for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) determined pursuant to the following
formula:
LIBO Rate LIBO Rate
(Reserve Adjusted) = -------------------------------
1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Agent on the basis of the LIBOR Reserve
Percentage in effect on, and the applicable rates furnished to and received by
the Agent from Scotiabank, two Business Days before the first day of such
Interest Period.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans, the
rate of interest equal to the average (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the rates per annum for Dollar deposits (for delivery on
the first day of such Interest Period) which appear on the display designated
"LIBO" on the Reuter Monitor Money Rates Service (or such other page as may
replace the LIBO page on such system for the purpose of displaying London
interbank offered rates for Dollar deposits) as at or about 11:00 a.m. London
time two Business Days prior to the beginning of such Interest Period.
"LIBOR Reserve Percentage" means, relative to any Interest Period for LIBO
Rate Loans, the reserve percentage (expressed as a decimal) equal to the average
maximum aggregate reserve requirements of the Lenders (including all basic,
emergency, supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of and including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
All LIBO Rate Loans shall bear interest from and including the first day of
the applicable Interest Period to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such LIBO Rate
Loan.
SECTION 3.2.2. Post-Maturity Rates. After the date any principal amount of
any Loan is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise), or after any other monetary Obligation of the
Borrower shall have become due and payable, the Borrower shall pay, but only to
the extent permitted by law, interest (after as well as before judgment) on such
amounts at a rate per annum equal to the Alternate Base Rate plus a margin of
2%.
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SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in part, of
principal outstanding on such Loan, but only on the amount so prepaid;
(c) with respect to Base Rate Loans, on each Quarterly Payment Date;
(d) with respect to LIBO Rate Loans, the last day of each applicable
Interest Period (and, if such Interest Period shall exceed three months, on
the three-month anniversary of the first day of such Interest Period);
(e) with respect to any Base Rate Loans converted into LIBO Rate Loans
on a day when interest would not otherwise have been payable pursuant to
clause (c), on the date of such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of which is
accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such
acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth in this
Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fee. The Borrower agrees to pay to the Agent for
the account of each Lender, for the period (including any portion thereof when
its Commitment is suspended by reason of the Borrower's inability to satisfy any
condition of Article V) commencing on August 4, 1995 and continuing to but
excluding the final Commitment Termination Date, a commitment fee at the rate of
0.07% per annum on such Lender's Percentage of the sum of the average daily
unused portion of the Commitment Amount. Such commitment fees shall be payable
by the Borrower in arrears (i) on the Effective Date, in respect of fees that
have accrued from August 4, 1995 through (and including) the Effective Date and
(ii) thereafter, on each Quarterly Payment Date, commencing with the first such
day following the Effective Date, and on the Commitment Termination Date.
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SECTION 3.3.2. Other Fees. The Borrower agrees to pay to Scotiabank for its
own account the fees set forth in the Fee Letter.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall reasonably
determine (which determination shall, upon notice thereof to the Borrower and
the Lenders, be conclusive and binding on the Borrower) that the introduction of
or any change in or in the interpretation of any law makes it unlawful, or any
central bank or other governmental authority asserts that it is unlawful, for
such Lender to make, continue or maintain any Loan as, or to convert any Loan
into, a LIBO Rate Loan, the obligations of such Lender to make, continue,
maintain or convert any such Loans shall, upon such determination, forthwith be
suspended until such Lender shall notify the Agent that the circumstances
causing such suspension no longer exist, and all LIBO Rate Loans of such Lender
shall automatically convert into Base Rate Loans at the end of the then current
Interest Periods with respect thereto or sooner, if required by such law or
assertion.
SECTION 4.2. Deposits Unavailable. If the Agent shall have determined that
(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to the Required Lenders in the London
interbank market; or
(b) by reason of circumstances affecting the London interbank market,
adequate means do not exist for ascertaining the interest rate applicable
hereunder to LIBO Rate Loans,
then, upon notice from the Agent to the Borrower and the Lenders, the
obligations of all Lenders under Section 2.3 and Section 2.4 to make or continue
any Loans as, or to convert any Loans into, LIBO Rate Loans shall forthwith be
suspended until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. The Borrower agrees to
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert)
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any Loans into, LIBO Rate Loans, resulting from any change after the date hereof
in United States federal, state or foreign laws or regulations or the adoption
or making after the date hereof of any interpretations, directives or
requirements applying to a class of commercial banks that includes such Lender
under any United States federal, state or foreign laws or regulations (whether
or not having the force of law) by any court or governmental or monetary
authority charged with the interpretation or administration thereof. Such Lender
shall promptly notify the Agent and the Borrower in writing of the occurrence of
any such event, such notice to state, in reasonable detail, the reasons therefor
and the additional amount required fully to compensate such Lender for such
increased cost or reduced amount. Such additional amounts shall be payable by
the Borrower directly to such Lender within five Business Days of its receipt of
such notice, and such notice (which shall include calculations in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower.
SECTION 4.4. Funding Losses. In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
as a result of
(a) any conversion or repayment or prepayment of the principal amount
of any LIBO Rate Loans on a date other than the scheduled last day of the
Interest Period applicable thereto, whether pursuant to Section 3.1 or
otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance with the
Borrowing Request therefor as a result of any action taken or not taken by
either Obligor; or
(c) any Loans not being continued as, or converted into, LIBO Rate
Loans in accordance with the Continuation/ Conversion Notice therefor as a
result of any action taken or not taken by either Obligor,
then, upon the written notice of such Lender to the Borrower (with a copy to the
Agent), the Borrower shall, within ten days of its receipt thereof, pay directly
to such Lender such amount as will (in the reasonable determination of such
Lender) reimburse such Lender for such loss or expense. Such written notice
(which shall include calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Borrower.
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SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, in each case after the date hereof, any law or regulation,
directive, guideline, decision or request (whether or not having the force of
law) of any court, central bank, regulator or other governmental authority
affects or would affect the amount of capital required or expected to be
maintained by any Lender or any Person controlling such Lender, and such Lender
determines (in its sole and absolute discretion) that the rate of return on its
or such controlling Person's capital as a consequence of its Commitment or the
Loans made by such Lender is reduced to a level below that which such Lender or
such controlling Person could have achieved but for the occurrence of any such
circumstance, then, in any such case upon notice from time to time by such
Lender to the Borrower, the Borrower shall, within five days of its receipt of
such notice, pay directly to such Lender additional amounts sufficient to
compensate such Lender or such controlling Person for such reduction in rate of
return. A statement of such Lender as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Borrower. In determining such
amount, such Lender may use any method of averaging and attribution that it
reasonably shall deem applicable.
SECTION 4.6. Taxes.
(a) All payments by either of the Obligors of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be
made free and clear of and without deduction for any present or future
income, excise, stamp or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any
taxing authority, but excluding United States withholding taxes, franchise
taxes and taxes imposed on or measured by any Lender's or the Agent's
income or receipts (such non-excluded items being called "Taxes"). In the
event that any withholding or deduction from any payment to be made by
either of the Obligors hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then such Obligor will
(i) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(ii) promptly forward to the Agent an official receipt or other
documentation reasonably satisfactory to the Agent evidencing such
payment to such authority; and
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(iii) pay to the Agent for the account of the Lenders such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount
such Lender would have received had no such withholding or deduction
been required.
Moreover, if any Taxes are directly asserted against the Agent or any
Lender with respect to any payment received by the Agent or such Lender
hereunder, the Agent or such Lender may pay such Taxes and such Obligor
will promptly pay such additional amounts (including any penalties,
interest or expenses) as is necessary in order that the net amount received
by such person after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such person would have received
had not such Taxes been asserted.
(b) If either of the Obligors fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Agent, for the
account of the respective Lenders, the required receipts or other required
documentary evidence, such Obligor shall indemnify the Lenders for any
incremental Taxes, interest or penalties that may become payable by any
Lender as a result of any such failure. For purposes of this Section 4.6, a
distribution hereunder by the Agent or any Lender to or for the account of
any Lender shall be deemed a payment by the Obligor that made the relevant
payment to the Agent.
(c) On or prior to the making of the first Loan hereunder, and
thereafter upon the request of the Borrower or the Agent, each Lender that
is organized under the laws of a jurisdiction other than the United States
shall execute and deliver to the Borrower and the Agent, on or about the
first scheduled payment date in each Fiscal Year, one or more (as the
Borrower or the Agent may reasonably request) United States Internal
Revenue Service Forms 4224 or Forms 1001 or such other forms or documents
(or successor forms or documents), appropriately completed, as may be
applicable to establish the extent, if any, to which a payment to such
Lender is exempt from withholding or deduction of Taxes.
SECTION 4.7. Payments, Computations, etc. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes or
any other Loan Document shall be made by the Borrower to the Agent for the pro
rata account of the Lenders entitled to receive such payment. All such payments
required to be made to the Agent shall be transmitted by the Borrower to the
Agent, without setoff, deduction or counterclaim, not later than 11:00 a.m., New
York City time, on the date due, in immediately
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available funds, to such account as the Agent shall specify from time to time by
notice to the Borrower. Funds received after that time shall be deemed to have
been received by the Agent on the next succeeding Business Day. The Agent shall
promptly remit in same day funds to each Lender its share, if any, of such
payments received by the Agent for the account of such Lender. All interest and
fees shall be computed on the basis of the actual number of days (including the
first day but excluding the last day) occurring during the period for which such
interest or fee is payable over a year comprised of 360 days (or, in the case of
interest on a Base Rate Loan, 365 days or, if appropriate, 366 days). Whenever
any payment to be made shall otherwise be due on a day which is not a Business
Day, such payment shall (except as otherwise required by clause (c) of the
definition of the term "Interest Period") be made on the next succeeding
Business Day and such extension of time shall be included in computing interest
and fees, if any, in connection with such payment.
SECTION 4.8. Sharing of Payments. If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Sections
4.3, 4.4 and 4.5) in excess of its pro rata share of payments then or therewith
obtained by all Lenders, such Lender shall purchase from the other Lenders such
participations in Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing Lender,
the purchase shall be rescinded and each Lender which has sold a participation
to the purchasing Lender shall repay to the purchasing Lender the purchase price
to the ratable extent of such recovery together with an amount equal to such
selling Lender's ratable share (according to the proportion of
(a) the amount of such selling Lender's required repayment to the
purchasing Lender, to
(b) 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. Each of the Obligors agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section may, to the fullest extent permitted by law, exercise all its rights of
payment (including pursuant to Section 4.9) with respect to such participation
as fully as if such Lender were the direct creditor of such Obligor in the
amount of such participation. If under any applicable bankruptcy, insolvency or
other similar law, any
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Lender receives a secured claim in lieu of a setoff to which this Section
applies, such Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Lenders entitled under this Section to share in the benefits of any recovery on
such secured claim.
SECTION 4.9. Setoff. Each Lender shall, upon the occurrence of any Event of
Default described in clause (a) of Section 8.1.9, have the right to set off
against and apply to the payment of the Obligations then due and payable to it
any and all balances, credits, deposits, accounts or moneys of such Obligor then
or thereafter maintained with such Lender; provided, however, that any such
appropriation and application shall be subject to the provisions of Section 4.8
and any applicable laws. Each Lender agrees promptly to notify the Obligors and
the Agent after any such setoff and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of each Lender under this Section are in
addition to other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Lender may have.
SECTION 4.10. Replacement of Lenders. Each Lender hereby severally agrees
that if such Lender (a "Subject Lender") either (i) gives a notice pursuant to
Section 4.1 or (ii) makes a demand upon the Borrower for (or if the Borrower is
otherwise required to pay) amounts pursuant to Section 4.3, 4.5 or 4.6, the
Borrower may, within 90 days of receipt by the Borrower of such notice or demand
(or the occurrence of such other event causing the Borrower to be required to
pay such compensation) give notice (a "Replacement Notice") in writing to the
Agent and such Lender of its intention to replace such Lender with a commercial
lending institution designated in such Replacement Notice. If the Agent shall,
in the exercise of its reasonable discretion and within 30 days of its receipt
of such Replacement Notice, notify the Borrower and such Subject Lender in
writing that the designated commercial lending institution is satisfactory to
the Agent, then such Lender shall, so long as no Default shall have occurred and
be continuing, assign, in accordance with Section 10.11.1, all of its
Commitments, Loans, Notes and other rights and obligations under this Agreement
and all other Loan Documents to such designated commercial lending institution;
provided, however, that (i) such assignment shall be without recourse,
representation or warranty and shall be on terms and conditions reasonably
satisfactory to such Lender and such designated commercial lending institution
and (ii) the purchase price paid by such designated commercial lending
institution shall be in the amount of such Lender's Loans, together with all
accrued and unpaid interest and fees in respect thereof, plus all other amounts
(including the amounts demanded and unreimbursed under
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Section 4.3, 4.5 or 4.6, as the case may be), owing to the Subject Lender
hereunder. Upon the effective date of such Assignment, the Borrower shall issue
a replacement Note or Notes, as the case may be, to such designated commercial
lending institution and such institution shall become a "Lender" for all
purposes under this Agreement and the other Loan Documents.
ARTICLE V
CONDITIONS TO BORROWING
SECTION 5.1. Initial Borrowing. The obligations of the Lenders to fund the
initial Borrowing shall be subject to the prior or concurrent satisfaction of
each of the conditions precedent set forth in this Section 5.1.
SECTION 5.1.1. Resolutions, etc. The Agent shall have received from each
Obligor a certificate, dated the date of the initial Borrowing, of its Secretary
or Assistant Secretary as to
(a) resolutions of its Board of Directors then in full force and
effect authorizing the execution, delivery and performance of this
Agreement and each other Loan Document to be executed by it; and
(b) the incumbency and signatures of those of its officers authorized
to act with respect to this Agreement and each other Loan Document executed
by it,
upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of the Secretary of such Obligor canceling or
amending such prior certificate.
SECTION 5.1.2. Delivery of Notes. The Agent shall have received, for the
account of each Lender, its Note duly executed and delivered by the Borrower.
SECTION 5.1.3. Opinions of Counsel. The Agent shall have received opinions,
dated the date of the initial Borrowing and addressed to the Agent and all
Lenders, from
(a) Chadbourne & Parke LLP, New York counsel to the Obligors,
substantially in the form of Exhibit E hereto; and
(b) Tory Tory DesLauriers & Binnington, Ontario counsel to the
Obligors, substantially in the form of Exhibit F hereto.
SECTION 5.1.4. Closing Fees, Expenses, etc. The Agent shall have received
for its own account, or for the account of
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each Lender, as the case may be, all fees, costs and expenses due and payable
pursuant to Sections 3.3 and 10.3, if then invoiced.
SECTION 5.1.5. Satisfactory Legal Form. All documents executed or submitted
pursuant hereto by or on behalf of either Obligor shall be reasonably
satisfactory in form and substance to the Agent and its counsel; the Agent and
its counsel shall have received all information, approvals, opinions, documents
or instruments as the Agent or its counsel may reasonably request.
SECTION 5.2. All Borrowings. The obligation of each Lender to fund any Loan
on the occasion of any Borrowing (including the initial Borrowing) shall be
subject to the satisfaction of each of the conditions precedent set forth in
this Section 5.2.
SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both before and
after giving effect to any Borrowing (but, if any Default of the nature referred
to in Section 8.1.5 shall have occurred with respect to any Relevant
Indebtedness referred to in Section 8.1.5, without giving effect to the
application, directly or indirectly, of the proceeds thereof) the following
statements shall be true and correct
(a) the representations and warranties set forth in Article VI shall
be true and correct in all material respects with the same effect as if
then made (unless stated to relate solely to an earlier date, in which case
such representations and warranties shall be true and correct in all
material respects as of such earlier date); and
(b) no Default shall have then occurred and be continuing.
SECTION 5.2.2. Borrowing Request. The Agent shall have received a Borrowing
Request for such Borrowing. Each of the delivery of a Borrowing Request and the
acceptance by the Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Obligors that on the date of such Borrowing
(both immediately before and after giving effect to such Borrowing and the
application of the proceeds thereof) the statements made in Section 5.2.1 are
true and correct.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into this Agreement
and to make Loans hereunder, each of the Guarantor and the Borrower represents
and warrants to the Agent and each Lender as set forth in this Article VI.
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SECTION 6.1. Organization, etc. Each of the Guarantor and the Borrower and
each of the Significant Subsidiaries
(a) is a corporation validly organized and existing and (except in the
case of the Guarantor and the Borrower, solely as of the date of this
Agreement) in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction where the nature of its business
requires such qualification, except where any such failure to be so
qualified would not reasonably be expected to have a Material Adverse
Effect (and, provided, that any dissolution, liquidation, amalgamation,
consolidation or merger of any Significant Subsidiary shall not, in and of
itself, be a misrepresentation under this Section 6.1(a)), and
(b) has full power and authority and holds all requisite governmental
licenses, permits and other approvals to (i) enter into and perform its
Obligations under this Agreement, the Notes and each other Loan Document to
which it is a party and (ii) except where the failure to hold such
licenses, permits and other approvals, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect, to own
and hold under lease its property and to conduct its business substantially
as currently conducted by it.
On the date hereof, for the purposes of the Business Corporations Act (Ontario),
the Borrower is a Subsidiary of the Guarantor.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by each of the Guarantor and the Borrower of this
Agreement, the Notes and each other Loan Document executed or to be executed by
it, are within the Guarantor's and the Borrower's corporate powers, as
applicable, have been duly authorized by all necessary corporate action, and do
not
(a) contravene the Guarantor's or the Borrower's Organic Documents;
(b) contravene any contractual restriction, law or governmental
regulation or court decree or order binding on or affecting the Guarantor
or the Borrower that is, in each such case, material or the contravention
of which could materially adversely affect the Lenders; or
(c) result in, or require the creation or imposition of, any Lien
(other than Permitted Liens) on any of the Guarantor's or the Borrower's
properties.
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SECTION 6.3. Government Approval, Regulation, etc. Except to the extent
required in connection with the acquisition of the capital stock of WCSI
referred to in the recitals, no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
or other Person is required for the due execution, delivery or performance by
the Guarantor or the Borrower of this Agreement, the Notes or any other Loan
Document, except for authorizations, approvals, actions, notices and filings
which have been duly obtained, taken, given or made and are in full force and
effect. Neither the Guarantor, the Borrower nor any of their respective
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 6.4. Validity, etc. This Agreement constitutes, and the Notes and
each other Loan Document executed by the Guarantor and the Borrower will, on the
due execution and delivery thereof, constitute, the legal, valid and binding
obligations of the Guarantor and the Borrower, as the case may be, enforceable
against each of the Guarantor and the Borrower, as the case may be, in
accordance with their respective terms, except as enforceability may be limited
by any applicable bankruptcy, moratorium, insolvency, fraudulent conveyance or
other laws affecting creditors' rights generally.
SECTION 6.5. Financial Information. The consolidated balance sheet of the
Guarantor and each of its Subsidiaries as at December 31, 1994, and the related
consolidated statements of earnings and cash flows of the Guarantor and each of
its Subsidiaries, copies of which have been furnished to the Agent, have been
prepared in accordance with GAAP consistently applied, and present fairly the
consolidated financial condition of the Guarantor and its Subsidiaries covered
thereby as at the dates thereof and the results of their operations for the
periods then ended, in accordance with GAAP.
SECTION 6.6. No Material Adverse Change. Since the date of the financial
statements described in Section 6.5 to and including the date of the initial
Borrowing, there has been no material adverse change in the prospects of the
Guarantor and its Subsidiaries, taken as a whole. Since the date of
the financial statements described in Section 6.5, there has been no material
adverse change in the financial condition, operations or properties of the
Guarantor and its Subsidiaries, taken as a whole.
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SECTION 6.7. Litigation, Labor Controversies, etc. There is no pending or,
to the knowledge of the Guarantor and the Borrower, threatened litigation,
action, proceeding, or labor controversy affecting the Guarantor, the Borrower
or any of their respective Subsidiaries, or any of their respective properties,
businesses, assets or revenues, which would reasonably be expected to have a
Material Adverse Effect, except as disclosed in Item 6.7 ("Litigation") of the
Disclosure Schedule.
SECTION 6.8. Ownership of Properties. The Guarantor and each of its
Subsidiaries has valid title to or rights to use all of its material properties
and assets, real and personal, tangible and intangible, of any nature whatsoever
(including patents, trademarks, trade names, service marks and copyrights), free
and clear of all Liens or claims (including infringement claims with respect to
patents, trademarks, copyrights and the like) except Permitted Liens, except
where the failure to have such title or right would not reasonably be expected
to have a Material Adverse Effect.
SECTION 6.9. Taxes. The Guarantor and each of its Subsidiaries has filed
all material tax returns and reports required by law to have been filed by it
and has paid all taxes and governmental charges thereby shown to be owing,
except any such taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.
SECTION 6.10. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of (a) the execution and
delivery of this Agreement and (b) any Borrowing hereunder, no steps have been
taken to terminate any Pension Plan which has or would result in a material
liability to the Guarantor and its Subsidiaries, taken as a whole, and no
contribution failure has occurred with respect to any Pension Plan sufficient to
give rise to a Lien under section 302(f) of ERISA which has or would result in a
material liability to the Guarantor and its Subsidiaries, taken as a whole. No
condition exists or event or transaction has occurred with respect to any
Pension Plan which would reasonably be expected to result in the incurrence by
the Guarantor or any member of the Controlled Group of any liability which would
reasonably be expected to have a Material Adverse Effect. Except as disclosed in
Item 6.10 ("Employee Benefit Plans") of the Disclosure Schedule, neither of the
Obligors has any contingent liability with respect to any post-retirement
benefit under a Welfare Plan which has or would result in a material liability
to the Guarantor and its Subsidiaries, taken as a whole, other than liability
for continuation coverage described in Part 6 of Title I of ERISA.
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SECTION 6.11. Environmental Warranties. Except as set forth in Item 6.11
("Environmental Matters") of the Disclosure Schedule:
(a) all facilities and property (including underlying groundwater)
owned or leased by the Guarantor or any of its Subsidiaries have been, and
continue to be, owned or leased by the Guarantor and its Subsidiaries in
compliance with all Environmental Laws, except for instances of
non-compliance that would not reasonably be expected to have a Material
Adverse Effect;
(b) there are no pending or threatened
(i) claims, complaints, notices or requests for information
received by the Guarantor or any of its Subsidiaries with respect to
any alleged violation of any Environmental Law, which violation, if
proven, has the reasonable potential to result in a fine, penalty or
order that would reasonably be expected to have a Material Adverse
Effect, or
(ii) complaints or governmental notices or inquiries to the
Guarantor or any of its Subsidiaries regarding potential material
liability under any Environmental Law;
(c) there have been no Releases of Hazardous Materials at, on or under
any property now (or, to the Guarantor's knowledge, any property
previously) owned or leased by the Guarantor or any of its Subsidiaries
that, singly or in the aggregate, have, or would reasonably be expected to
have, a Material Adverse Effect;
(d) the Guarantor and its Subsidiaries have been issued and are in
material compliance with all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters and necessary for
the conduct of their businesses, or, if such permit, certificate, approval,
license or other authorization has not been issued, its absence would not
reasonably be expected to have a Material Adverse Effect;
(e) no property now (or, to the Guarantor's knowledge, no property
previously) owned or leased by the Guarantor or any of its Subsidiaries is
listed or proposed for listing (with respect to owned property only) on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list of sites requiring investigation or clean-up;
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(f) to the knowledge of the Guarantor, there are no underground
storage tanks, active or abandoned, including petroleum storage tanks, on
or under any property now or previously owned or leased by the Guarantor or
any of its Subsidiaries that, singly or in the aggregate, have, or may
reasonably be expected to have, a Material Adverse Effect;
(g) neither the Guarantor nor any Subsidiary of the Guarantor has
directly transported or directly arranged for the transportation of any
Hazardous Material to any location which is listed or proposed for listing
on the National Priorities List pursuant to CERCLA, on the CERCLIS or on
any similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to material
claims against the Guarantor or such Subsidiary thereof for any remedial
work, damage to natural resources or personal injury, including claims
under CERCLA; and
(h) to the knowledge of the Guarantor, there are no polychlorinated
biphenyls or friable asbestos present at any property now or previously
owned or leased by the Guarantor or any Subsidiary of the Guarantor that,
singly or in the aggregate, have, or may reasonably be expected to have, a
Material Adverse Effect.
SECTION 6.12. Regulations G, T, U and X. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Loans (including the proceeds of Loans used to
purchase any capital stock of WCSI) will be used for a purpose which violates
F.R.S. Board Regulation G, T, U or X. Terms for which meanings are provided in
F.R.S. Board Regulation G, T, U or X or any regulations substituted therefor, as
from time to time in effect, are used in this Section with such meanings.
SECTION 6.13. Accuracy of Information. All factual information heretofore
or contemporaneously furnished by or on behalf of the Guarantor or the Borrower
in writing to the Agent or any Lender for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of the Guarantor and the
Borrower in writing to the Agent or any Lender will be, true and accurate in
every material respect on the date as of which such information is dated or
certified, and such information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make such
information not misleading in light of the circumstances in which made.
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ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. Each of the Guarantor and the Borrower
agrees with the Agent and each Lender that, until all Commitments have
terminated and all Obligations have been paid and performed in full, the
Guarantor and the Borrower will perform the obligations set forth in this
Section 7.1.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The Guarantor
will furnish, or will cause to be furnished, to the Agent (with sufficient
copies for each Lender) copies of the following financial statements, reports,
notices and information:
(a) as soon as available and in any event within 60 days after the end
of each of the first three Fiscal Quarters of each Fiscal Year of the
Guarantor, a consolidated balance sheet of the Guarantor and its
Subsidiaries as of the end of such Fiscal Quarter and consolidated
statements of earnings and cash flows of the Guarantor and its Subsidiaries
for such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter,
certified by the chief financial Authorized Officer of the Guarantor (the
Guarantor may, at its option, comply with this clause (a) by furnishing,
within the 60-day period referred to above, the appropriate report filed by
it on Form 10-Q under the Securities Exchange Act of 1934);
(b) as soon as available and in any event within 120 days after the
end of each Fiscal Year of the Guarantor, a copy of the annual audit report
for such Fiscal Year for the Guarantor and its Subsidiaries, including
therein a consolidated balance sheet of the Guarantor and its Subsidiaries
as of the end of such Fiscal Year and consolidated statements of earnings
and cash flows of the Guarantor and its Subsidiaries for such Fiscal Year,
in each case certified (without any Impermissible Qualification) by Price
Waterhouse or other recognized firm of chartered accountants, together with
a certificate from such accountants containing a computation of, and
showing compliance with, each of the financial ratios and restrictions
contained in Section 7.2.2 (the Guarantor may, at its option, comply with
this clause (b) by furnishing, within the 120-day period referred to above,
the appropriate report filed by it on Form 10-K under the Securities
Exchange Act of 1934);
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(c) as soon as available and in any event within 60 days after the end
of each Fiscal Quarter, a certificate, executed by the chief financial
Authorized Officer of the Guarantor, showing (in reasonable detail and with
appropriate calculations and computations) compliance with the financial
covenant set forth in Section 7.2.2;
(d) as soon as possible and in any event within five Business Days
after the occurrence of each Default, a statement of the chief financial
Authorized Officer of the Guarantor setting forth details of such Default
and the action which the Guarantor has taken and proposes to take with
respect thereto;
(e) within ten Business Days of becoming aware of the institution of
any steps by the Guarantor or any other Person to terminate any Pension
Plan, or the failure to make a required contribution to any Pension Plan if
such failure is sufficient to give rise to a Lien under section 302(f) of
ERISA, or the taking of any action with respect to a Pension Plan which
could result in the requirement that the Guarantor furnish a bond or other
security to the PBGC or such Pension Plan, or the occurrence of any event
with respect to any Pension Plan which could result in the incurrence by
the Guarantor of any material liability, or any material increase in the
contingent liability of the Guarantor with respect to any post-retirement
Welfare Plan benefit, notice thereof and copies of all documentation
relating thereto; and
(f) such other information respecting the condition or operations,
financial or otherwise, of the Guarantor or any of its Subsidiaries as any
Lender through the Agent (or, in the case of information regarding any such
Subsidiary that is not a Significant Subsidiary, as the Agent) may from
time to time reasonably request.
SECTION 7.1.2. Compliance with Laws, etc. The Guarantor will, and will
cause each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders, except for any failures to
comply that would not reasonably be expected to have a Material Adverse Effect,
such compliance to include (without limitation), the payment, before the same
become delinquent, of all material taxes, assessments and governmental charges
imposed upon it or upon its property except to the extent being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.
SECTION 7.1.3. Books and Records. The Guarantor will, and will cause each
of its Subsidiaries to, keep books and records
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which accurately reflect its business affairs and transactions and, upon
reasonable notice to the Guarantor, (x) permit the Agent and each Lender or any
of their respective representatives, at reasonable times and intervals, to visit
all of its offices, to discuss its financial matters with its officers and to
examine any of its books or other corporate records, subject to normal security
and confidentiality rules of the Guarantor, and (y) permit the Agent and each
Lender and any of their respective representatives, once annually at the
Guarantor's expense and at any other reasonable interval at any Lender's
expense, to discuss financial matters with its independent public accountants,
with the Guarantor present (if it so chooses) during such discussions (and the
Guarantor hereby authorizes such independent public accountants to discuss the
Guarantor's financial matters with each Lender or its representatives).
SECTION 7.1.4. Environmental Covenant. The Guarantor will, and will cause
each of its Subsidiaries to,
(a) use and operate all of its facilities and properties in material
compliance with all Environmental Laws, keep all necessary material
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws; and
(b) within five Business Days after the receipt of the same, notify
the Agent and provide copies upon receipt of all written claims,
complaints, notices of violation or orders relating to compliance with
Environmental Laws or the handling or release of Hazardous Materials,
unless such document alleges or relates to an alleged violation or
circumstance that would not reasonably be expected to have a Material
Adverse Effect.
SECTION 7.1.5. Use of Proceeds. The Borrower agrees that it will apply the
proceeds of each Borrowing only for the purposes set forth in the fifth recital.
SECTION 7.2. Negative Covenants. Each of the Guarantor and Borrower agrees
with the Agent and each Lender that, until all Commitments have terminated and
all Obligations have been paid and performed in full, the Guarantor and the
Borrower will perform the obligations set forth in this Section 7.2.
SECTION 7.2.1. Business Activities. The Guarantor will not, and will not
permit any of its Significant Subsidiaries to, engage in any business activity,
except those business activities (a) currently engaged in by the Guarantor and
its Subsidiaries
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and by WCSI and its Subsidiaries and (b) related to the information handling
business and (c) such other activities as may be incidental thereto.
SECTION 7.2.2. Indebtedness. The Guarantor will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Debt, if, either before or after
giving effect to the creation, incurrence or assumption of such Debt (and the
repayment of any Indebtedness refinanced thereby), the Leverage Ratio exceeds
(or would exceed) 0.55:1.
SECTION 7.2.3. Liens. The Guarantor will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any
of its property, revenues or assets, whether now owned or hereafter acquired,
except:
(a) Liens granted prior to the Effective Date to secure payment of
Indebtedness that is identified in the financial statements of the
Guarantor referred to in Section 6.5 as secured debt;
(b) Liens granted to secure payment of Indebtedness which is incurred
by the Guarantor or any of its Significant Subsidiaries to a vendor of any
assets to finance its acquisition of such assets and covering only those
assets acquired with the proceeds of such Indebtedness;
(c) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on its books and Liens arising under ERISA to the extent permitted by
Section 8.1.7;
(d) Liens of carriers, warehousemen, mechanics, materialmen and
landlords and similar Liens arising by operation of law incurred in the
ordinary course of business for sums not overdue for more than 30 days or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on its books;
(e) Liens incurred in the ordinary course of business, including bank
set-off rights and Liens incurred in connection with workmen's
compensation, unemployment insurance or other forms of governmental
insurance or benefits, or to secure performance of tenders, statutory
obligations, leases and contracts (other than for borrowed
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money) entered into in the ordinary course of business or to secure
obligations on surety or appeal bonds;
(f) judgment Liens in existence less than 30 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies;
(g) Liens granted by the Borrower in any margin stock, as defined in
F.R.S. Board Regulations G,T,U, or X (or any regulation substituted
therefor), owned by it whether or not such margin stock is purchased with
the proceeds of the Loans;
(h) easements, rights-of-way, zoning and use restrictions and other
similar encumbrances which, in the aggregate, do not materially interfere
with the occupation, use, and enjoyment by the Guarantor or any Subsidiary
of the property to assets encumbered thereby in the normal course of
business or materially impair the value of the property subject thereto;
(i) Liens securing obligations of any Subsidiary of the Guarantor
(other than the Borrower) to any other Subsidiary of the Guarantor;
(j) Liens arising under any of the Loan Documents;
(k) Liens on bank accounts maintained by the Guarantor, to the extent
that (i) such Liens secure Debt of Subsidiaries of the Guarantor held by
the bank at which such bank account is maintained (or any affiliate or
nominee of such bank) and (ii) such Debt is secured by such Liens;
(l) Liens existing on property at the time of its acquisition
(directly or indirectly), other than any such Lien created in contemplation
of such acquisition that is not otherwise permitted by clause (b) above;
(m) Any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Lien referred to in
Sections 7.2.3(a) through (l) hereof, provided that (1) the Lien shall be
limited to all or a part of the property covered by the Lien extended,
renewed or replaced (plus improvements thereon) and (2) that any Debt
secured by such Lien is not increased; and
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(n) Liens not otherwise permitted by this Section 7.2.3 securing
Indebtedness in the aggregate not in excess of $100,000,000.
SECTION 7.2.4. Contingent Obligations. The Guarantor will not permit the
sum of the following (determined on a consolidated basis without duplication) to
exceed $15,000,000 at any time:
(a) the aggregate amount of Indebtedness of the Guarantor and its
Subsidiaries of the type referred to in clause (f) of the definition
thereof, plus
(b) the aggregate amount of Contingent Liabilities of the Guarantor
and its Subsidiaries in respect of Indebtedness of a Person (other than a
Subsidiary of the Guarantor) that is of a type described in clause (a),
(b), (c) or (f) of the definition of "Indebtedness" (other than any
Contingent Liability in respect of Indebtedness under this Agreement).
SECTION 7.2.5. Dissolution, etc. The Guarantor will not liquidate or
dissolve. The Borrower will not liquidate or dissolve, unless its obligations
under the Loan Documents have been assumed by another Person in accordance with
Section 10.10(a). The Guarantor will not consolidate or amalgamate with or merge
into, any other Person unless at the time thereof and after giving effect
thereto, no Event of Default shall be continuing and either (a) the Guarantor is
the surviving entity of such consolidation, amalgamation or merger or (b) the
surviving entity of such consolidation, amalgamation or merger assumes the
obligations of the Guarantor hereunder in writing.
SECTION 7.2.6. Transactions with Affiliates. Except as expressly
contemplated in this Agreement, the Guarantor will not, and will not permit any
of its Subsidiaries to, enter into, or cause, suffer or permit to exist any
arrangement or contract with any of its other Affiliates (other than (x)
salaries and fees to its directors, officers and employees as the Guarantor or
such Subsidiary may determine are appropriate in relationship to the services
performed and (y) arrangements or contracts solely among Subsidiaries of the
Guarantor or between the Guarantor and any Subsidiary), unless such arrangement
or contract is fair and equitable to the Guarantor or such Subsidiary and is an
arrangement or contract of the kind which would be entered into by a prudent
Person in the position of the Guarantor or such Subsidiary with a Person which
is not one of its Affiliates.
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ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following events or
occurrences described in this Section 8.1 shall constitute an "Event of
Default".
SECTION 8.1.1. Non-Payment of Obligations. The Guarantor or the Borrower
shall default in the payment or prepayment when due of any principal of any
Loan; or the Guarantor or the Borrower shall default (and such default shall
continue unremedied for a period of five Business Days) in the payment when due
of any interest on any Loan, any commitment fee or any other Obligation.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of the
Guarantor or the Borrower made or deemed to be made hereunder or in any other
Loan Document executed by it or any other certificate furnished by or on behalf
of the Guarantor or the Borrower to the Agent or any Lender for the purposes of
or in connection with this Agreement or any such other Loan Document (including
any certificates delivered pursuant to Article V) is or shall be incorrect in
any material respect when made or deemed to be made.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations. The
Obligors shall default in the due performance and observance of any of their
obligations under Section 7.2.2 or 7.2.4; or the Obligors shall default (and
such default shall continue unremedied for a period of 15 days after notice
thereof shall have been given to the Borrower by the Agent or any Lender) in the
due performance and observance of any of their other obligations under Section
7.2 or any of their obligations under Section 7.1.1 or Section 7.1.4 (for the
avoidance of doubt, no Default will be deemed to occur under this Agreement
solely as the result of any sale, pledge or disposition of, or any change in the
market value of, any margin stock (as that term is used in F.R.S. Board
Regulations G, T, U and X)).
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations. The
Guarantor or the Borrower shall default in the due performance and observance of
any other agreement contained herein or in any other Loan Document executed by
it, and such default shall continue unremedied for a period of 30 days after
notice thereof shall have been given to the Borrower by the Agent or any Lender.
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SECTION 8.1.5. Default on Other Indebtedness. Either of the following shall
occur:
(i) a default in the payment when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any Indebtedness of the
Guarantor or any of its Subsidiaries having a principal amount (or, in the
case of Hedging Obligations, the net amount payable by the Guarantor or
such Subsidiary in respect thereof), individually or in the aggregate, in
excess of $25,000,000 (other than (x) Indebtedness described in
Section 8.1.1, (y) Indebtedness of the type described in paragraph (d) of
the definition of "Indebtedness" (and any Contingent Liability in respect
of Indebtedness of the type described in such paragraph (d)) and (z) for
purposes of this clause(i) only, intercompany Indebtedness owing by the
Guarantor or a Subsidiary of the Guarantor to another Subsidiary of the
Guarantor or to the Guarantor, to the extent such default has been waived
within ten Business Days of the occurrence thereof by the holder of such
intercompany Indebtedness)(the "Relevant Indebtedness"), or
(ii) a default in the performance or observance of any obligation or
condition with respect to such Relevant Indebtedness if the effect of such
default is to accelerate the maturity of any such Relevant Indebtedness or
to permit the holder or holders of such Relevant Indebtedness, or any
trustee or agent for such holders, to cause such Relevant Indebtedness to
become due and payable prior to its expressed maturity;
provided that no Default shall be deemed to have occurred under this Section
with respect to any default under any agreement evidencing Indebtedness owed to
a Lender or any affiliate of a Lender if such default shall relate solely to a
restriction on margin stock (as that term is used in F.R.S. Board Regulations G,
T, U and X).
SECTION 8.1.6. Judgment. Any final, non-appealable judgment or order for
the payment of money in excess of $50,000,000 shall be rendered against the
Guarantor, the Borrower or any Subsidiary by a court or other governmental
authority of competent jurisdiction and there shall be a period of 30
consecutive days (or any longer period which under applicable law is allowed for
appeal or stay of execution of such judgment or order) during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect, unless such judgment or order shall have been
vacated, satisfied, dismissed or bonded upon appeal; provided, however, that any
such judgment or order shall not be an Event of Default hereunder if and for so
long as (i) such judgment or order is
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covered by a valid and binding policy of insurance and (ii) the insurer in
respect of such policy has been notified of, and has not disputed the claim for
payment of, the claim in respect of such judgment or order.
SECTION 8.1.7. Pension Plans. Any of the following events shall occur with
respect to any Pension Plan
(a) the institution of any steps by the Guarantor, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, the Guarantor or any such member could be
required to make a contribution to such Pension Plan, or could reasonably
expect to incur a liability or obligation to such Pension Plan, which may
reasonably be expected to have a Material Adverse Effect; or
(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA, which Lien
is not removed within 90 days after such Lien is imposed.
SECTION 8.1.8. Change in Control. Any Change in Control shall occur.
SECTION 8.1.9. Bankruptcy, Insolvency, etc. Any Relevant Person shall
(a) become insolvent or generally fail to pay, or admit in writing its
inability or unwillingness to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for such Relevant Person
or its property under any bankruptcy or insolvency law, or make a general
assignment for the benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for any Relevant Person or for a
substantial part of the property of such Relevant Person under any
bankruptcy or insolvency law, and such trustee, receiver, sequestrator or
other custodian shall not be discharged within 90 days;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect of any Relevant Person under any bankruptcy or
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insolvency law, and, if any such case or proceeding is not commenced by
such Relevant Person, such case or proceeding shall be consented to or
acquiesced in by such Relevant Person or shall result in the entry of an
order for relief or shall remain for 90 days undismissed; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION 8.2. Action if Bankruptcy. If any Event of Default described in
clauses (a) through (d) of Section 8.1.9 shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable, without notice or
demand.
SECTION 8.3. Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in clauses (a) through (d) of Section
8.1.9) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Agent, upon the direction of the Required Lenders, shall by
notice to the Guarantor and the Borrower declare all or any portion of the
outstanding principal amount of the Loans and other Obligations to be due and
payable and/or the Commitments (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Loans and other Obligations which shall
be so declared due and payable shall be and become immediately due and payable,
without further notice, demand or presentment, and/or, as the case may be, the
Commitments shall terminate.
ARTICLE IX
THE AGENT
SECTION 9.1. Actions. Each Lender hereby appoints Scotiabank as its Agent
under and for purposes of this Agreement, the Notes and each other Loan
Document. Each Lender authorizes the Agent to act on behalf of such Lender under
this Agreement, the Notes and each other Loan Document and, in the absence of
other written instructions from the Required Lenders received from time to time
by the Agent (with respect to which the Agent agrees that it will comply, except
as otherwise provided in this Section or as otherwise advised by counsel), to
exercise such powers hereunder and thereunder as are specifically delegated to
or required of the Agent by the terms hereof and thereof, together with such
powers as may be reasonably incidental thereto. Each Lender hereby indemnifies
(which indemnity shall survive any termination of this Agreement) the Agent, pro
rata
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according to such Lender's Percentage, from and against any and all liabilities,
obligations, losses, damages, claims, costs or expenses of any kind or nature
whatsoever which may at any time be imposed on, incurred by, or asserted
against, the Agent in any way relating to or arising out of this Agreement, the
Notes and any other Loan Document, including reasonable attorneys' fees, and as
to which the Agent is not reimbursed by the Guarantor or the Borrower; provided,
however, that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, claims, costs or expenses which are
determined by a court of competent jurisdiction in a final proceeding to have
resulted solely from the Agent's gross negligence or wilful misconduct. The
Agent shall not be required to take any action hereunder, under the Notes or
under any other Loan Document, or to prosecute or defend any suit in respect of
this Agreement, the Notes or any other Loan Document, unless it is indemnified
hereunder to its satisfaction. If any indemnity in favor of the Agent shall be
or become, in the Agent's determination, inadequate, the Agent may call for
additional indemnification from the Lenders and cease to do the acts indemnified
against hereunder until such additional indemnity is given.
SECTION 9.2. Funding Reliance, etc. Unless the Agent shall have been
notified by telephone, confirmed in writing, by any Lender by 5:00 p.m., New
York City time, on the day prior to a Borrowing that such Lender will not make
available the amount which would constitute its Percentage of such Borrowing on
the date specified therefor, the Agent may assume that such Lender has made such
amount available to the Agent and, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If and to the extent that such
Lender shall not have made such amount available to the Agent, such Lender, the
Guarantor and the Borrower agree to repay the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
the Agent made such amount available to the Borrower to the date such amount is
repaid to the Agent, at the interest rate applicable at the time to Loans
comprising such Borrowing.
SECTION 9.3. Exculpation. Neither the Agent nor any of its directors,
officers, employees or agents shall be liable to any Lender for any action taken
or omitted to be taken by it under this Agreement or any other Loan Document, or
in connection herewith or therewith, except for its own wilful misconduct or
gross negligence, nor responsible for any recitals or warranties herein or
therein, nor for the effectiveness, enforceability, validity or due execution of
this Agreement or any other Loan Document, nor to make any inquiry respecting
the performance by the Guarantor or the Borrower of its obligations hereunder or
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under any other Loan Document. Any such inquiry which may be made by the Agent
shall not obligate it to make any further inquiry or to take any action. The
Agent shall be entitled to rely upon advice of counsel concerning legal matters
and upon any notice, consent, certificate, statement or writing which the Agent
believes to be genuine and to have been presented by a proper Person.
SECTION 9.4. Successor. The Agent may resign as such at any time upon at
least 60 days' prior notice to the Borrower and all Lenders. If the Agent at any
time shall resign, the Required Lenders may appoint another Lender as a
successor Agent which shall thereupon become the Agent hereunder. If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
notice of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be one of the Lenders or a commercial
banking institution (which, so long as no Default shall be continuing, shall be
reasonably acceptable to the Guarantor) organized under the laws of the U.S. (or
any State thereof) or a U.S. branch or agency of a commercial banking
institution (which, so long as no Default shall be continuing, shall be
reasonably acceptable to the Guarantor), and having a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall be entitled to
receive from the retiring Agent such documents of transfer and assignment as
such successor Agent may reasonably request, and shall thereupon succeed to and
become vested with all rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation
hereunder as the Agent, the provisions of
(a) this Article IX shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Agent under this Agreement;
and
(b) Section 10.3 and Section 10.4 shall continue to inure to its
benefit.
SECTION 9.5. Loans by Scotiabank. Scotiabank shall have the same rights and
powers with respect to (x) the Loans made by it or any of its affiliates, and
(y) the Notes held by it or any of its affiliates as any other Lender and may
exercise the same as if it were not the Agent. Scotiabank and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Guarantor and the Borrower or any Subsidiary or Affiliate of
the Guarantor and the Borrower as if Scotiabank were not the Agent hereunder.
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SECTION 9.6. Credit Decisions. Each Lender acknowledges that it has,
independently of the Agent and each other Lender, and based on such Lender's
review of the financial information of the Guarantor and the Borrower, this
Agreement, the other Loan Documents (the terms and provisions of which being
satisfactory to such Lender) and such other documents, information and
investigations as such Lender has deemed appropriate, made its own credit
decision to extend its Commitment. Each Lender also acknowledges that it will,
independently of the Agent and each other Lender, and based on such other
documents, information and investigations as it shall deem appropriate at any
time, continue to make its own credit decisions as to exercising or not
exercising from time to time any rights and privileges available to it under
this Agreement or any other Loan Document.
SECTION 9.7. Copies, etc. The Agent shall give prompt notice to each Lender
of each notice or request required or permitted to be given to the Agent by the
Guarantor or the Borrower pursuant to the terms of this Agreement (unless
concurrently delivered to the Lenders by the Guarantor or the Borrower). The
Agent will distribute to each Lender each document or instrument received for
its account and copies of all other communications received by the Agent from
the Guarantor or the Borrower for distribution to the Lenders by the Agent in
accordance with the terms of this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of this Agreement
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by the Guarantor, the Borrower and the Required Lenders; provided, however,
that:
(x) any amendment that is entered into solely to effect assignments
made in accordance with Section 10.11.1 shall require only the consent of
the Guarantor, the Borrower and the Agent; and
(y) no such amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular action
be taken by all the Lenders or by the Required Lenders shall be
effective unless consented to by each Lender;
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(b) modify this Section 10.1, change the definition of "Required
Lenders", increase the Commitment Amount or the Percentage of any
Lender, reduce any fees (including, without limitation, the commitment
fees) described in Article III, or extend the Commitment Termination
Date shall be made without the consent of each Lender;
(c) extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or interest on any
Loan (or reduce the principal amount of or rate of interest on any
Loan) shall be made without the consent of the holder of that Note
evidencing such Loan;
(d) modify the guaranty contained in Article XI; or
(e) affect adversely the interests, rights or obligations of the
Agent qua the Agent shall be made without consent of the Agent.
No failure or delay on the part of the Agent, any Lender or the holder of any
Note in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Guarantor or the Borrower in any case shall entitle it to any notice or
demand in similar or other circumstances. No waiver or approval by the Agent or
any Lender under this Agreement or any other Loan Document shall, except as may
be otherwise stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval hereunder shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 10.2. Notices. All notices and other communications provided to any
party hereto under this Agreement or any other Loan Document shall be in writing
or by facsimile and addressed, delivered or transmitted to such party at its
address or facsimile number set forth below its signature hereto or set forth in
the Lender Assignment Agreement or at such other address or facsimile number as
may be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid or if properly addressed and
sent by pre-paid courier service, shall be deemed given when received; any
notice, if transmitted by facsimile, shall be deemed given when the confirmation
of transmission thereof is received by the transmitter.
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SECTION 10.3. Payment of Costs and Expenses. The Guarantor and the Borrower
jointly and severally agree to pay on demand all reasonable expenses of the
Agent (including the reasonable fees and out-of-pocket expenses of one special
counsel to the Agent and of one local counsel, if any, who may be retained by
counsel to the Agent) in connection with
(a) the negotiation, preparation, execution and delivery of this
Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from time
to time hereafter be requested by the Guarantor or the Borrower, whether or
not the transactions contemplated hereby are consummated; and
(b) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Guarantor and the Borrower further jointly and severally agree to pay, and
to save the Agent and the Lenders harmless from all liability for, any stamp or
other taxes which may be payable in connection with the execution or delivery of
this Agreement, the Borrowings hereunder, or the issuance of the Notes or any
other Loan Documents. The Guarantor and the Borrower also jointly and severally
agree to reimburse the Agent and each Lender upon demand for all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and out-of-pocket
expenses) incurred by the Agent or such Lender in connection with (x) the
negotiation of any restructuring or "work-out", whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations.
SECTION 10.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
the Guarantor and the Borrower hereby jointly and severally indemnify, exonerate
and hold the Agent and each Lender and each of their respective officers,
directors, employees and agents (collectively, the "Indemnified Parties") free
and harmless from and against any and all actions, causes of action, suits,
losses, costs, liabilities and damages, and expenses incurred in connection
therewith (other than any of the foregoing related to or arising from taxes),
irrespective of whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought, including reasonable attorneys' fees
and disbursements (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to
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<PAGE> 53
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan, including the
purchase of any margin stock or other equity interests in another Person;
(b) the entering into and performance of this Agreement and any other
Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of the Guarantor or the Borrower as the result of
any determination by the Required Lenders pursuant to Article V not to fund
any Borrowing, but excluding any controversies that are solely among
Lenders or among Lenders and the Agent);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower, the Guarantor or any
of its Subsidiaries of all or any portion of the stock or assets of any
Person, whether or not the Agent or such Lender is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Guarantor or any of its
Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Guarantor or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the control
of, the Guarantor or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Guarantor and the Borrower
hereby jointly and severally agree to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
SECTION 10.5. Survival. The obligations of the Guarantor and the Borrower
under Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the
Lenders under Section 9.1, shall in each case survive any termination of this
Agreement, the payment in full of all Obligations and the termination of all
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<PAGE> 54
Commitments. The representations and warranties made by the Guarantor and the
Borrower in this Agreement and in each other Loan Document shall survive the
execution and delivery of this Agreement and each such other Loan Document.
SECTION 10.6. Severability. Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.
SECTION 10.7. Headings. The various headings of this Agreement and of each
other Loan Document are inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement or such other Loan Document or any
provisions hereof or thereof.
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. This Agreement
may be executed by the parties hereto in several counterparts, each of which
shall be executed by the Guarantor, the Borrower and the Agent and be deemed to
be an original and all of which shall constitute together but one and the same
agreement. This Agreement shall become effective when counterparts hereof
executed on behalf of the Guarantor, the Borrower and each Lender (or notice
thereof satisfactory to the Agent) shall have been received by the Agent and
notice thereof shall have been given by the Agent to the Guarantor and each
Lender.
SECTION 10.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE NOTES
AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. This Agreement, the
Notes and the other Loan Documents constitute the entire understanding among the
parties hereto with respect to the subject matter hereof and supersede any prior
agreements, written or oral, with respect thereto.
SECTION 10.10. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
(a) neither the Guarantor nor the Borrower may assign or transfer its
rights or obligations hereunder without the prior written consent of the
Agent and all Lenders, except that the Borrower may assign its rights and
delegate its obligations hereunder to any wholly-owned direct or indirect
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<PAGE> 55
Subsidiary of the Guarantor (that is organized under the laws of any state
of the United States) that assumes such obligations in writing or by
operation of law (including by merger or consolidation); and
(b) the rights of sale, assignment and transfer of the Lenders are
subject to Section 10.11.
SECTION 10.11. Sale and Transfer of Loans and Note; Participations in Loans
and Note. Each Lender may assign, or sell participations in, its Loans and
Commitment to one or more other Persons in accordance with this Section 10.11.
SECTION 10.11.1. Assignments. Any Lender,
(a) with the written consents of the Borrower and the Agent (which
consents shall not be unreasonably delayed or withheld) may at any time
assign and delegate to one or more commercial banks; and
(b) with notice to the Borrower and the Agent, but without the consent
of the Borrower or the Agent, may assign and delegate to any of its
affiliates or to any other Lender;
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of such Lender's total Loans and
Commitment (which assignment and delegation shall be of a constant, and not a
varying, percentage of all the assigning Lender's Loans and Commitment);
provided, however, that any such Assignee Lender will comply, if applicable,
with the provisions contained in Section 4.6 and further, provided, however,
that, the Borrower and the Agent shall be entitled to continue to deal solely
and directly with such Lender in connection with the interests so assigned and
delegated to an Assignee Lender until
(c) written notice of such assignment and delegation, together with
payment instructions, addresses and related information with respect to
such Assignee Lender, shall have been given to the Borrower and the Agent
by such Lender and such Assignee Lender;
(d) such Assignee Lender shall have executed and delivered to the
Borrower and the Agent a Lender Assignment Agreement, accepted by the
Agent; and
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(e) the processing fees described below shall have been paid.
From and after the date that the Agent accepts such Lender Assignment Agreement,
(x) the Assignee Lender thereunder shall be deemed automatically to have become
a party hereto and to the extent that rights and obligations hereunder have been
assigned and delegated to such Assignee Lender in connection with such Lender
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and under the other Loan Documents, and (y) the assignor Lender, to
the extent that rights and obligations hereunder have been assigned and
delegated by it in connection with such Lender Assignment Agreement, shall be
released from its obligations hereunder and under the other Loan Documents.
Within five Business Days after its receipt of notice that the Agent has
received an executed Lender Assignment Agreement, the Borrower shall execute and
deliver to the Agent (for delivery to the relevant Assignee Lender) a new Note
evidencing such Assignee Lender's assigned Loans and Commitment and, if the
assignor Lender has retained Loans and a Commitment hereunder, a replacement
Note in the principal amount of the Loans and Commitment retained by the
assignor Lender hereunder (such Note to be in exchange for, but not in payment
of, that Note then held by such assignor Lender). Each such Note shall be dated
the date of the predecessor Note. The assignor Lender shall mark the predecessor
Note "exchanged" and deliver it to the Borrower. Accrued interest on that part
of the predecessor Note evidenced by the new Note, and accrued fees, shall be
paid as provided in the Lender Assignment Agreement. Accrued interest on that
part of the predecessor Note evidenced by the replacement Note shall be paid to
the assignor Lender. Accrued interest and accrued fees shall be paid at the same
time or times provided in the predecessor Note and in this Agreement. Such
assignor Lender or such Assignee Lender must also pay a processing fee to the
Agent upon delivery of any Lender Assignment Agreement in the amount of $3,000.
Any attempted assignment and delegation not made in accordance with this Section
10.11.1 shall be null and void.
SECTION 10.11.2. Participations. Any Lender may at any time sell to one or
more commercial banks (each of such commercial banks being herein called a
"Participant") participating interests in any of the Loans, its Commitment, or
other interests of such Lender hereunder; provided, however, that
(a) no participation contemplated in this Section 10.11 shall relieve
such Lender from its Commitment or its other obligations hereunder or under
any other Loan Document;
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<PAGE> 57
(b) such Lender shall remain solely responsible for the performance of
its Commitment and such other obligations;
(c) the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and each of the other Loan Documents;
(d) no Participant, unless such Participant is an affiliate of such
Lender, or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any Participant that such
Lender will not, without such Participant's consent, take any actions of
the type described in clause (b) or (c) of Section 10.1; and
(e) the Guarantor and the Borrower shall not be required to pay any
amount under this Agreement (including Section 4.6) that is greater than
the amount which it would have been required to pay had no participating
interest been sold.
The Borrower and the Guarantor each acknowledges and agrees that, subject to
clause (e) above, each Participant, for purposes of Sections 4.3, 4.4, 4.5, 4.6,
4.8, 4.9, 10.3 and 10.4, shall be considered a Lender.
SECTION 10.12. Other Transactions. Nothing contained herein shall preclude
the Agent or any other Lender from engaging in any transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Guarantor, the Borrower or any of its Affiliates in which the Guarantor, the
Borrower or such Affiliate is not restricted hereby from engaging with any other
Person.
SECTION 10.13. Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS, THE GUARANTOR
OR THE BORROWER SHALL, TO THE FULLEST EXTENT PERMITTED BY LAW, BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. EACH OF THE
GUARANTOR AND THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL
JUDGMENT RENDERED
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THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH OF THE GUARANTOR AND THE
BORROWER HEREBY IRREVOCABLY APPOINTS CSC NETWORKS (THE "PROCESS AGENT"), WITH AN
OFFICE ON THE DATE HEREOF AT 375 HUDSON STREET, NEW YORK, NEW YORK 10014, UNITED
STATES, AS ITS AGENT TO RECEIVE, ON THE GUARANTOR'S AND ON THE BORROWER'S BEHALF
AND ON BEHALF OF ITS PROPERTY, SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT
AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH
SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO THE
GUARANTOR OR THE BORROWER IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S
ABOVE ADDRESS, AND EACH OF THE GUARANTOR AND THE BORROWER HEREBY IRREVOCABLY
AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF.
AS AN ALTERNATIVE METHOD OF SERVICE, EACH OF THE GUARANTOR AND THE BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
EACH OF THE GUARANTOR AND THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE GUARANTOR OR THE
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE GUARANTOR AND THE BORROWER HEREBY IRREVOCABLY WAIVE
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
SECTION 10.14. Waiver of Jury Trial. THE AGENT, THE LENDERS, THE GUARANTOR
AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS, THE GUARANTOR OR
THE BORROWER. EACH OF THE GUARANTOR AND THE BORROWER ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND
EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS
ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
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ARTICLE XI
GUARANTY PROVISIONS
SECTION 11.1. Guaranty. The Guarantor hereby absolutely, unconditionally
and irrevocably
(a) guarantees the full and punctual payment when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand
or otherwise, of all Obligations of the Borrower, whether for principal,
interest, fees, expenses or otherwise (including all such amounts which
would become due but for the operation of the automatic stay under Section
362(a) of the United States Bankruptcy Code, 11 U.S.C. Section 362(a), and
the operation of Sections 502(b) and 506(b) of the United States Bankruptcy
Code, 11 U.S.C. Section 502(b) and Section 506(b)); and
(b) indemnifies and holds harmless each Lender and the Agent for any
and all costs and reasonable expenses (including reasonable attorney's fees
and expenses) incurred by such Lender or the Agent, as the case may be, in
enforcing any rights under this Article.
The guaranty contained in this Section constitutes a guaranty of payment of the
Obligations when due and not of collection, and the Guarantor specifically
agrees that it shall not be necessary or required that any Lender or the Agent
exercise any right, assert any claim or demand or enforce any remedy whatsoever
against the Borrower or any other Person before or as a condition to the
obligations of the Guarantor hereunder.
SECTION 11.2. Acceleration of Guaranty. The Guarantor agrees that upon the
occurrence of any Event of Default of the type set forth in Section 8.1.9 with
regard to the Borrower at a time when any of the Obligations of the Borrower may
not then be due and payable, the Guarantor will pay to the Lenders forthwith the
full amount which would be payable hereunder by the Guarantor if all such
Obligations were then due and payable.
SECTION 11.3. Guaranty Absolute, etc. This Guaranty shall in all respects
be a continuing, absolute, unconditional and irrevocable guaranty of payment,
and shall remain in full force and effect until all Obligations of the Borrower
have been paid in full, all obligations of the Guarantor hereunder shall have
been paid in full and all Commitments shall have terminated. The Guarantor
guarantees that the Obligations of the Borrower will be paid strictly in
accordance with the terms of this Agreement and each other Loan Document under
which they arise, and the
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<PAGE> 59
liability of the Guarantor under this Article shall be absolute, unconditional
and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of this
Agreement, any Note or any other Loan Document;
(b) the failure of any Lender or the Agent
(i) to assert any claim or demand or to enforce any right or
remedy against the Borrower under the provisions of this Agreement,
any Note, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other guarantor
of, or collateral (if any) securing, any Obligations;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations or any other extension,
compromise or renewal of any Obligation;
(d) any reduction, limitation, impairment or termination of the
Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and the
Guarantor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, the
Obligations or otherwise, except for payment in full of the Obligations;
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of this Agreement, any Note
or any other Loan Document;
(f) to the extent applicable, any addition, exchange, release,
surrender or non-perfection of any collateral, or any amendment to or
waiver or release or addition of, or consent to departure from, any other
guaranty, held by any Lender or the Agent securing any of the Obligations;
or
(g) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, the Borrower, any
surety or any guarantor, except for payment in full of the Obligations.
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SECTION 11.4. Reinstatement, etc. The Guarantor agrees that its obligations
under this Article shall continue to be effective or be reinstated, as the case
may be, if at any time any payment (in whole or in part) of any of the
Obligations is rescinded or must otherwise be restored by any Lender or the
Agent, upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise, all as though such payment had not been made.
SECTION 11.5. Waiver, etc. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and the guaranty contained in this Article and any requirement that
the Agent or any Lender protect, secure, perfect or insure any security interest
or Lien, or any property subject thereto, or exhaust any right or take any
action against the Borrower or any other Person (including any other guarantor)
or entity or any collateral securing the Obligations, as the case may be.
SECTION 11.6. Postponement of Subrogation, etc. The Guarantor will not
exercise any rights which it may acquire by way of rights of subrogation under
this Article, by any payment made hereunder or otherwise, until the prior
payment, in full and in cash, of all Obligations. Any amount paid to the
Guarantor on account of any such subrogation rights prior to the payment in full
of all Obligations shall be held in trust for the benefit of the Lenders and the
Agent and shall immediately be paid to the Agent and credited and applied
against the Obligations, whether matured or unmatured, in accordance with the
terms of this Agreement; provided, however, that if
(a) the Guarantor has made payment to the Lenders and the Agent of all
or any part of the Obligations, and
(b) all Obligations have been paid in full and all Commitments have
been permanently terminated,
each Lender and the Agent agrees that, at the Guarantor's request, the Agent, on
behalf of the Lenders, will execute and deliver to the Guarantor appropriate
documents (without recourse and without representation or warranty) necessary to
evidence the transfer by subrogation to the Guarantor of an interest in the
Obligations resulting from such payment by the Guarantor. In furtherance of the
foregoing, for so long as any Obligations or Commitments remain outstanding, the
Guarantor shall refrain from taking any action or commencing any proceeding
against the Borrower (or its successors or assigns, whether in connection with a
bankruptcy proceeding or otherwise) to recover any amounts in the respect of
payments made under this Article to any Lender or the Agent.
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<PAGE> 61
SECTION 11.7. Judgment. The Guarantor hereby agrees that:
(a) if, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder or under any Loan Document in
Dollars into another currency, the rate of exchange used shall be that at
which in accordance with normal banking procedures the Agent could purchase
Dollars with such other currency on the Business Day preceding that on
which final judgment is given; and
(b) the obligation of the Guarantor in respect of any sum due from it
to any Lender or the Agent hereunder shall, notwithstanding any judgment in
a currency other than Dollars, be discharged only to the extent that on the
Business Day following receipt by such Lender or the Agent, as the case may
be, of any sum adjudged to be so due in such other currency such Lender or
the Agent, as the case may be, may, in accordance with normal banking
procedures, purchase Dollars with such other currency; in the event that
the Dollars so purchased are less than the sum originally due to such
Lender or the Agent in Dollars, the Guarantor, as a separate obligation and
notwithstanding any such judgment, hereby indemnifies and holds harmless
such Lender and the Agent against such loss, and if the Dollars so
purchased exceed the sum originally due to such Lender or the Agent in
Dollars, such Lender or the Agent, as the case may be, shall remit to the
Guarantor such excess.
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<PAGE> 62
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
FRDK, INC.
By: /s/ S. Khetrapal
Title:
By: /s/ D.J. Fischer
Title: Vice President and Controller
Address: 1 First Canadian Place
Toronto, Ontario, Canada
M5X 1G5
Facsimile No.: 416-364-3364
Attention: Joan M. Wilson
with copies to:
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112-0127
Facsimile No.: 212-541-5369
Attention: Dennis J. Friedman
Moore Corporation Limited
1 First Canadian Place
Toronto, Ontario, Canada
M5X 1G5
Facsimile No.: 416-364-1667
Attention: Shoba Khetrapal
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<PAGE> 63
MOORE CORPORATION LIMITED
By: /s/ S. Khetrapal
Title: Vice President and Treasurer
By: /s/ D.J. Fischer
Title: Vice President and Controller
Address: 1 First Canadian Place
Toronto, Ontario, Canada
M5X 1G5
Facsimile No.: 416-364-1667
Attention: Shoba Khetrapal
with a copy to:
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112-0127
Facsimile No.: 212-541-5369
Attention: Dennis J. Friedman
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<PAGE> 64
THE BANK OF NOVA SCOTIA,
as Agent
By: /s/ A.S. Norsworthy
Title: Assistant Agent
Address: 600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Facsimile No.: 404-888-8998
Attention: Amanda Norsworthy
with a copy to:
The Bank of Nova Scotia
16/F 44 King Street West
Toronto, Ontario M5H 1H1
Facsimile No.: 416-866-2009
Attention: Vice President,
Corporate Banking
Toronto
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<PAGE> 65
PERCENTAGE LENDERS
100% THE BANK OF NOVA SCOTIA
By: /s/ A.S. Norsworthy
Title: Assistant Agent
Domestic
Office: 600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Facsimile No.: 404-888-8998
Attention: Amanda Norsworthy
with a copy to:
The Bank of Nova Scotia
16/F 44 King Street West
Toronto, Ontario M5H 1H1
Facsimile No.: 416-866-2009
Attention: Vice President,
Corporate Banking
Toronto
LIBOR
Office: 600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Facsimile No.: 404-888-8998
Attention: Amanda Norsworthy
with a copy to:
The Bank of Nova Scotia
16/F 44 King Street West
Toronto, Ontario M5H 1H1
Facsimile No.: 416-866-2009
Attention: Vice President,
Corporate Banking
Toronto
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<PAGE> 66
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of September 1, 1995
(this "Amendment"), among FRDK, INC., a New York corporation (the "Borrower"),
MOORE CORPORATION LIMITED, an Ontario corporation (the "Guarantor"), the
various commercial banks as are parties hereto (collectively, the "Lenders"),
and THE BANK OF NOVA SCOTIA, as agent (the "Agent") for the Lenders,
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantor, certain of the Lenders and the
Agent have heretofore entered into a certain Credit Agreement, dated as of
August 10, 1995 (the "Credit Agreement");
WHEREAS, Citibank, N.A., Credit Suisse and Royal Bank of Canada
(collectively, the "Co-Agents") desire to become party to the Credit Agreement
as "Co-Agents" thereunder;
WHEREAS, Citibank, N.A., Credit Suisse, Royal Bank of Canada, Deutsche
Bank AG, The Industrial Bank of Japan, Limited, Nationsbank of Georgia, N.A.,
Wachovia Bank of Georgia, N.A., Bank of Montreal, Banque Paribas, Commerzbank
AG, Isittuto Bancario San Paolo Di Torino, SPA, LTCB Trust Company and Mellon
Bank, N.A. (collectively, the "New Lenders") desire to become party to the
Credit Agreement as "Lenders" thereunder; and
WHEREAS, the Borrower, the Guarantor, the Lenders and the Agent now
desire to amend the Credit Agreement to allow the New Lenders to become party
thereto, as hereinafter provided;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Use Of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in the Credit
Agreement shall have such meanings when used in this Amendment.
<PAGE> 67
ARTICLE II
AMENDMENTS
Subject to this Amendment becoming effective as provided in Section
3.3, but effective as of the date hereof, the Credit Agreement shall be amended
as follows:
SECTION 2.1. New Lenders. Each of the New Lenders shall be deemed to
be a "Lender" under and for all purposes of the Credit Agreement and each
reference therein to "Lender" or "Lenders" shall be deemed to include the New
Lenders.
SECTION 2.2. Amendments to Article I. Article I of the Credit
Agreement is hereby amended as follows:
(a) by inserting the following new definitions in the
appropriate alphabetical order:
"'Amendment No. 1' means the First Amendment to Credit
Agreement, dated as of September 1, 1995, among the Borrower,
the Guarantor, the Lenders, and the Agent."
"'Co-Agents' means Citibank, N.A., Credit Suisse and
Royal Bank of Canada. The Co-Agents, in such capacity, have no
rights, duties or obligations under the Loan Documents."
(b) by amending the definition of "Percentage" in its entirety
to read as follows:
"'Percentage' means, relative to any Lender, the
percentage set forth opposite its signature to Amendment No. 1
or set forth in the Lender Assignment Agreement, as such
percentage may be adjusted from time to time pursuant to Lender
Assignment Agreement(s) executed by such Lender and its Assignee
Lender(s) and delivered pursuant to Section 10.11."
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.1. Ratification of and References to the Credit Agreement.
This Amendment shall be deemed to be an amendment to the Credit Agreement, and
the Credit Agreement, as amended hereby, is hereby ratified, approved and
confirmed in each and every respect. All references to the Credit Agreement in
any
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<PAGE> 68
other document, instrument, agreement or writing shall hereafter be deemed to
refer to the Credit Agreement as amended hereby.
SECTION 3.2. Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or
interpretation of this Amendment or any provisions hereof.
SECTION 3.3. Execution in Counterparts, Effectiveness, etc. This
Amendment may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement. This Amendment shall become effective
when counterparts hereof executed on behalf each Obligor and each Lender (or
notice thereof satisfactory to the Agent) shall have been received by the Agent
and notice thereof shall have been given by the Agent to each Obligor and each
Lender.
SECTION 3.4. Governing Law; Entire Agreement. THIS AMENDMENT AND EACH
OTHER LOAN DOCUMENT EXECUTED IN CONNECTION HEREWITH SHALL EACH BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
This Amendment and the other Loan Documents constitute the entire understanding
among the parties hereto with respect to the subject matter hereof and supersede
any prior agreements, written or oral, with respect thereto.
-3-
<PAGE> 69
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
FRDK, INC.
By: /s/
-----------------------------------
Title: Vice President and Treasurer
By: /s/ Joan M. Wilson
------------------------------------
Title: Vice President and Secretary
Address: 1 First Canadian Place
Toronto, Ontario, Canada
M5X 1G5
Facsimile No.: 416-364-3364
Attention: Joan M. Wilson
with copies to:
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112-0127
Facsimile No.: 212-541-5369
Attention: Dennis J. Friedman
Moore Corporation Limited
1 First Canadian Place
Toronto, Ontario Canada
M5X 1G5
Facsimile No.: 416-364-1667
Attention: Shoba Khetrapal
-4-
<PAGE> 70
MOORE CORPORATION LIMITED
By: /s/ S. Khetrapal
------------------------------------
Title: Vice President and Treasurer
By: /s/
------------------------------------
Title: Vice President and Controller
Address: 1 First Canadian Place
Toronto, Ontario, Canada
M5X 1G5
Facsimile No.: 416-364-1667
Attention: Shoba Khetrapal
with a copy to:
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112-0127
Facsimile No.: 212-541-5369
Attention: Dennis J. Friedman
-5-
<PAGE> 71
THE BANK OF NOVA SCOTIA,
as Agent
By: /s/ A.S. Norsworthy
------------------------------
Title:
Address: 600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Facsimile No.: 404-888-8998
Attention: Amanda Norsworthy
with copies to:
The Bank of Nova Scotia
16/F 44 King Street West
Toronto, Ontario M5H 1H1
Facsimile No.: 416-866-2009
Attention: Vice President,
Corporate Banking
Toronto
The Bank of Nova Scotia, Chicago
Representative Office
Suite 3700
181 West Madison Street
Chicago, Illinois 60602
Facsimile No.: 312-201-4108
Attention: Vice President
-6-
<PAGE> 72
CITIBANK, N.A., as Co-Agent
By: /s/ Marjorie Futornick
------------------------
Title: Marjorie Futornick
Vice President
Address: One Court Square
7th Floor/Zone 4
Long Island City, NY 11120
Facsimile No.: (718) 248-7485
Attention: Carolyn Bodmer
CREDIT SUISSE, acting through
its New York Branch, as Co-Agent
By: /s/ Matthew B. Bauer
----------------------------------
Title: Matthew B. Bauer
Member of Senior Management
By: /s/ Richard M. Dunn
----------------------------------
Title: Richard M. Dunn
Member of Senior Management
Address: 12 East 49th Street
New York, New York 10017
Facsimile No.: (212) 238-5425
Attention: Jennifer Segrove
-7-
-7-
<PAGE> 73
ROYAL BANK OF CANADA, as Co-Agent
By: /s/
------------------------------------
Title:
Address: One Financial Square
New York, New York 10005
Facsimile No.: (212) 428-2372
Attention: Manager Loans Admin.
with a copy to:
One North Franklin Street
Suite 700
Chicago, Illinois 60606
Facsimile No.: 312-551-0805
Attention: Preston Jones
-8-
<PAGE> 74
PERCENTAGE LENDERS
- ---------- -------
11.8181818% THE BANK OF NOVA SCOTIA
By: /s/
_____________________
Title:
Domestic
Office: 600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Facsimile No.: 404-888-8998
Attention: Amanda Norsworthy
with copies to:
The Bank of Nova Scotia
16/F 44 King Street West
Toronto, Ontario M5H 1H1
Facsimile No.: 416-866-2009
Attention: Vice President
Corporate Banking
Toronto
The Bank of Nova Scotia, Chicago
Representative Office
Suite 3700
181 West Madison Street
Chicago, Illinois 60602
Facsimile No.: 312-201-4108
Attention: Vice President
LIBOR
Office: 600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Facsimile No.: 404-888-8998
Attention: Amanda Norsworthy
-9-
<PAGE> 75
with copies to:
The Bank of Nova Scotia
16/F 44 King Street West
Toronto, Ontario M5H 1H1
Facsimile No.: 416-866-2009
Attention: Vice President,
Corporate Banking
Toronto
The Bank of Nova Scotia, Chicago
Representative Office
Suite 3700
181 West Madison Street
Chicago, Illinois 60602
Facsimile No.: 312-201-4108
Attention: Vice President
-10-
<PAGE> 76
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of August 8, 1996
(this "Amendment"), among FRDK, INC., a New York corporation (the "Borrower"),
MOORE CORPORATION LIMITED, an Ontario corporation (the "Guarantor"), the
various commercial banks as are parties hereto (collectively, the "Lenders"),
and THE BANK OF NOVA SCOTIA, as agent (the "Agent") for the Lenders,
W I T N E S S E T H :
WHEREAS, the Borrower, the Guarantor, the Lenders and the Agent have
heretofore entered into a certain Credit Agreement, dated as of August 10, 1995
(as amended, the "Credit Agreement");
WHEREAS, the financial institutions listed on the Schedule A hereto
under the caption "New Lenders" (collectively, the "New Lenders") desire to
become party to the Credit Agreement as "Lenders" thereunder; and
WHEREAS, the financial institutions listed on the Schedule A hereto
under the caption "Terminating Lenders" (collectively, the "Terminating
Lenders") desire to no longer be party to the Credit Agreement; and
WHEREAS, the Borrower, the Guarantor, the Lenders and the Agent now
desire to amend the Credit Agreement, as hereinafter provided;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in the Credit
Agreement shall have such meanings when used in this Amendment.
<PAGE> 77
ARTICLE II
AMENDMENTS
Subject to this Amendment becoming effective as provided in Section
3.3, but effective as of the date hereof, the Credit Agreement shall be amended
as follows:
Section 2.1. New Lenders and Terminating Lenders.
(a) Each of the New Lenders shall be deemed to be a "Lender"
under and for all purposes of the Credit Agreement and each reference
therein to "Lender" or "Lenders" shall be deemed to include the New
Lenders.
(b) Each of the Terminating Lenders shall no longer be a
"Lender" under the Credit Agreement and each reference therein to
"Lender" or "Lenders" shall not include any Terminating Lenders.
(c) The definition of "Percentage" in Article I of the
Credit Agreement shall be amended in its entirety to read as follows:
"'Percentage' means, relative to any Lender, the
percentage set forth opposite its name on the Schedule
A to Amendment No. 2, as such percentage may be
adjusted from time to time pursuant to a Lender
Assignment Agreement(s) executed by such Lender and
its Assignee Lender(s) and delivered pursuant to
Section 10.11."
SECTION 2.2. Amendments to Article I. Article I of the Credit
Agreement is hereby amended as follows:
(a) by inserting the following new definition in the
appropriate alphabetical order:
"'Amendment No. 2' means the Second Amendment to Credit
Agreement, dated as of August 8, 1996, among the Borrower,
the Guarantor, the Lenders and the Agent."
(b) by amending clause (a) of the definition of "Commitment
Termination Date" in its entirety to read as follows:
"(a) August 7, 1997;" and
-2-
<PAGE> 78
(c) by amending the definition of "Fee Letter" in its entirety to read
as follows:
"'Fee Letter' means the confidential letter, dated July 9, 1996,
between the Guarantor and Scotiabank."; and
(d) by amending the definition of "Stated Maturity Date" in its
entirety to read as follows:
"'Stated Maturity Date' means August 7, 1997."
SECTION 2.3. Amendment to Article III. Article III of the Credit Agreement
is hereby amended by deleting the percentage "0.07%" appearing in Section 3.3.1
and inserting the percentage "0.06%" in lieu thereof.
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.1. Ratification of and References to the Credit Agreement. This
Amendment shall be deemed to be an amendment to the Credit Agreement, and the
Credit Agreement, as amended hereby, is hereby ratified, approved and confirmed
in each and every respect. All references to the Credit Agreement in any other
document, instrument, agreement or writing shall hereafter be deemed to refer to
the Credit Agreement as amended hereby.
SECTION 3.2. Representations and Warranties. The Borrower represents and
warrants to the Lenders and the Agent that the representations and warranties
set forth in Article VI of the Credit Agreement are true and correct in all
material respects on the date hereof as if made on the date hereof (unless
stated to relate solely to an earlier date, in which case such representation
and warranty shall be true and correct in all material respects as of such
earlier date).
SECTION 3.3. Headings. The various headings of this Amendment are inserted
for convenience only and shall not affect the meaning or interpretation of this
Amendment or any provisions hereof.
SECTION 3.4. Execution in Counterparts, Effectiveness, etc. This Amendment
may be executed by the parties hereto in several counterparts, each of which
shall be deemed to be an original and all of which shall constitute together but
one and the same agreement. This Amendment shall become effective when
counterparts hereof executed on behalf each Obligor and each Lender (or notice
thereof satisfactory to the Agent) shall have
-3-
<PAGE> 79
been received by the Agent and notice thereof shall have been given by the
Agent to each Obligor and each Lender.
SECTION 3.5. Governing Law; Entire Agreement. THIS AMENDMENT AND EACH
OTHER LOAN DOCUMENT EXECUTED IN CONNECTION HEREWITH SHALL EACH BE DEEMED TO BE
A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW
YORK. This Amendment and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter
hereof and supersede any prior agreements, written or oral, with respect
thereto.
-4-
<PAGE> 80
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
FRDK, INC.
By: /s/ Joseph M. Duane
----------------------------------
Title:
By:
----------------------------------
Title:
Address: 275 North Field Drive
Lake Forest, Ill. 60045
MOORE CORPORATION LIMITED
By: /s/ Shoba Khetrapal
----------------------------------
Title:
By: /s/ A. N. Mitchell
----------------------------------
Title:
THE BANK OF NOVA SCOTIA,
as Agent and Lender
By: /s/
----------------------------------
Title:
-5-
<PAGE> 1
EXHIBIT (c)(1)
AGREEMENT AND PLAN OF MERGER
Among
MOORE U.S.A. INC.,
KIRKWOOD ACQUISITION CORP.
and
THE PEAK TECHNOLOGIES GROUP, INC.
Dated as of April 23, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I The Offer ..................................................... 2
SECTION 1.01. The Offer ............................................. 2
SECTION 1.02. Company Actions ....................................... 4
ARTICLE II The Merger ................................................... 6
SECTION 2.01. The Merger ............................................ 6
SECTION 2.02. Closing ............................................... 6
SECTION 2.03. Effective Time ........................................ 6
SECTION 2.04. Effects of the Merger ................................. 6
SECTION 2.05. Certificate of Incorporation and By-
laws ............................................ 7
SECTION 2.06. Directors ............................................. 7
SECTION 2.07. Officers .............................................. 7
ARTICLE III Effect of the Merger on the Capital Stock
of the Constituent Corporations;
Exchange of Certificates ............................... 7
SECTION 3.01. Effect on Capital Stock ............................... 7
SECTION 3.02. Exchange of Certificates .............................. 9
ARTICLE IV Representations and Warranties of the
Company ................................................ 11
SECTION 4.01. Organization .......................................... 11
SECTION 4.02. Subsidiaries .......................................... 11
SECTION 4.03. Capitalization ........................................ 12
SECTION 4.04. Authority ............................................. 13
SECTION 4.05. Consents and Approvals; No Violations ................. 13
SECTION 4.06. SEC Reports and Financial Statements .................. 14
SECTION 4.07. Absence of Certain Changes or Events .................. 15
SECTION 4.08. No Undisclosed Liabilities ............................ 17
SECTION 4.09. Information Supplied .................................. 17
SECTION 4.10. Benefit Plans ......................................... 18
SECTION 4.11. Other Compensation Arrangements ....................... 20
SECTION 4.12. Litigation ............................................ 20
SECTION 4.13. Compliance with Applicable Law ........................ 20
SECTION 4.14. Tax Matters ........................................... 21
SECTION 4.15. State Takeover Statutes ............................... 23
SECTION 4.16. Brokers; Fees and Expenses ............................ 23
SECTION 4.17. Opinion of Financial Advisor .......................... 24
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
SECTION 4.18. Intellectual Property ................................. 24
SECTION 4.19. Rights Agreement ...................................... 26
SECTION 4.20. Labor Matters ......................................... 27
ARTICLE V Representations and Warranties of Parent
and Sub. ............................................... 28
SECTION 5.01. Organization .......................................... 28
SECTION 5.02. Authority ............................................. 28
SECTION 5.03. Consents and Approvals; No Violations ................. 29
SECTION 5.04. Information Supplied .................................. 29
SECTION 5.05. Interim Operations of Sub. ............................ 30
SECTION 5.06. Brokers ............................................... 30
SECTION 5.07. Financing ............................................. 30
SECTION 5.08. Share Ownership ....................................... 30
ARTICLE VI Covenants .................................................... 30
SECTION 6.01. Covenants of the Company .............................. 30
SECTION 6.02. No Solicitation ....................................... 35
SECTION 6.03. Other Actions ......................................... 37
ARTICLE VII Additional Agreements ....................................... 38
SECTION 7.01. Stockholder Approval; Preparation of
Proxy Statement ................................. 38
SECTION 7.02. Access to Information ................................. 39
SECTION 7.03. Reasonable Efforts .................................... 39
SECTION 7.04. Options; Concord Warrants ............................. 40
SECTION 7.05. Directors ............................................. 42
SECTION 7.06. Fees and Expenses ..................................... 43
SECTION 7.07. Indemnification; Insurance ............................ 44
SECTION 7.08. Certain Litigation .................................... 44
ARTICLE VIII Conditions ................................................. 45
SECTION 8.01. Conditions to Each Party's Obligation
To Effect the Merger ............................ 45
ARTICLE IX Termination and Amendment .................................... 46
SECTION 9.01. Termination ........................................... 46
SECTION 9.02. Effect of Termination ................................. 47
SECTION 9.03. Amendment ............................................. 48
SECTION 9.04. Extension; Waiver ..................................... 48
ARTICLE X Miscellaneous ................................................. 48
SECTION 10.01. Nonsurvival of Representations and
Warranties ...................................... 48
SECTION 10.02. Notices .............................................. 49
SECTION 10.03. Interpretation ....................................... 50
SECTION 10.04. Counterparts ......................................... 50
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
SECTION 10.05. Entire Agreement; Third Party
Beneficiaries ...................................... 51
SECTION 10.06. Governing Law ........................................... 51
SECTION 10.07. Publicity ............................................... 51
SECTION 10.08. Assignment .............................................. 51
SECTION 10.09. Enforcement ............................................. 51
</TABLE>
Exhibits
Exhibit A - Conditions of the Offer
<PAGE> 5
AGREEMENT AND PLAN OF MERGER dated as of April 23, 1997, among MOORE
U.S.A. INC., a Delaware corporation ("Parent"), KIRKWOOD ACQUISITION CORP., a
Delaware corporation and an indirect wholly owned subsidiary of Parent ("Sub"),
and THE PEAK TECHNOLOGIES GROUP, INC., a Delaware corporation (the "Company").
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth in the Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to
cause Sub to make a tender offer (as it may be amended from time to time as
permitted under the Agreement, the "Offer") to purchase all the outstanding
shares of Common Stock, par value $0.01 per share, of the Company (the "Company
Common Stock"; all the outstanding shares of Company Common Stock being
hereinafter collectively referred to as the "Shares") including the associated
Rights (as defined in Section 4.19 of the Agreement) at a purchase price of $18
per share (the "Offer Price"), net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the
Agreement; and the Board of Directors of the Company has adopted resolutions
approving the Offer and the Merger (as defined below), recommending that the
Company's stockholders accept the Offer and approving the acquisition of Shares
by Sub pursuant to the Offer;
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have each approved the merger of Sub into the Company (the "Merger"),
upon the terms and subject to the conditions set forth in the Agreement, whereby
each share of Company Common Stock, other than shares of Company Common Stock
owned directly or indirectly by Parent or the Company and Dissenting Shares (as
defined in Section 3.01(d)), will be converted into the right to receive the
price per share paid in the Offer; and
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Sub and the Company hereby agree as follows:
<PAGE> 6
ARTICLE I
THE OFFER
SECTION 1.01. The Offer. (a) Subject to the provisions of the
Agreement, as promptly as practicable but in no event later than five business
days after the date of the public announcement by Parent and the Company of the
execution and delivery of this Agreement, Sub shall, and Parent shall cause Sub
to, commence the Offer. The obligation of Sub to, and of Parent to cause Sub to,
commence the Offer and accept for payment, and pay for, any Shares tendered
pursuant to the Offer shall be subject to the conditions set forth in Exhibit A
(the "Offer Conditions") and to the terms and conditions of the Agreement. Sub
expressly reserves the right to modify the terms of the Offer, except that,
without the consent of the Company, Sub shall not (i) reduce the number of
Shares subject to the Offer, (ii) reduce the Offer Price, (iii) add to the Offer
Conditions, (iv) except as provided in the next sentence, extend the Offer, (v)
change the form of consideration payable in the Offer, (vi) amend any other term
of or add any new term to the Offer in any manner materially adverse to the
holders of the Shares or (vii) waive the Minimum Condition (as defined in
Exhibit A). Notwithstanding the foregoing, Sub may, without the consent of the
Company, (A) Subject to Section 9.01(b)(i)(Y), extend the Offer, if at the
scheduled or extended expiration date of the Offer any of the Offer Conditions
shall not be satisfied or waived, until such time as such conditions are
satisfied or waived, (B) extend the Offer for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the "SEC") or the staff thereof applicable to the Offer, (C) extend the Offer
from time to time until two business days after the expiration of the last to
expire of the waiting period under the HSR Act (as defined in Section 4.05
below) and Section 24 a, Subsection 2, sentence 1 of the German Law Against
Restraints of Trade (the "German Competition Act") and (D) extend the Offer for
a period not to exceed 15 business days, notwithstanding that all conditions to
the Offer are satisfied as of such expiration date of the Offer, if, immediately
prior to such expiration date (as it may be extended), the Shares tendered and
not withdrawn pursuant to the Offer equal less than 90% of the outstanding
Shares (on a fully diluted basis). Subject to the terms and conditions of the
Offer and the Agreement, Sub shall, and Parent shall cause Sub to, accept for
payment, and pay for, all Shares validly tendered and not withdrawn pursuant to
the Offer that Sub becomes obligated to accept for payment, and pay for,
pursuant to the Offer as soon as practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall
file with the SEC a Tender Offer
2
<PAGE> 7
Statement on Schedule 14D-1 (the "Schedule 14D-1") with respect to the Offer,
which shall contain an offer to purchase and a related letter of transmittal and
summary advertisement (such Schedule 14D-1 and the documents included therein
pursuant to which the Offer will be made, together with any supplements or
amendments thereto, the "Offer Documents"). Parent and Sub agree that the Offer
Documents shall comply as to form in all material respects with the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder and the Offer Documents, on the date first
published, sent or given to the Company's stockholders, shall not 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 therein, in
light of the circumstances under which they were made, not misleading, except
that no representation or warranty is made by Parent or Sub with respect to
information supplied by the Company or any of its stockholders specifically for
inclusion or incorporation by reference in the Offer Documents. Parent, Sub and
the Company each agrees promptly to correct any information provided by it for
use in the Offer Documents if and to the extent that such information shall have
become false or misleading in any material respect, and Parent and Sub 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 securities laws. The Company and its counsel shall be given
reasonable opportunity to review and comment upon the Offer Documents prior to
their filing with the SEC or dissemination to the stockholders of the Company.
Parent and Sub agree to provide the Company and its counsel any comments Parent,
Sub or their counsel may receive from the SEC or its staff with respect to the
Offer Documents promptly after the receipt of such comments.
(c) Parent shall provide or cause to be provided to Sub on a timely
basis the funds necessary to accept for payment, and pay for, any Shares that
Sub becomes obligated to accept for payment, and pay for, pursuant to the Offer.
(d) The Company agrees that neither the Offer nor purchases of
Shares thereunder breach the terms of the Confidentiality Agreement (as defined
in Section 7.02 below).
SECTION 1.02. Company Actions. (a) The Company hereby approves of
and consents to the Offer and represents that the Board of Directors of the
Company, at a meeting duly called and held, duly adopted resolutions approving
the Agreement, the Offer and the Merger, determining that the terms of the Offer
and the Merger are fair to, and in the best interests of, the Company's
stockholders and
3
<PAGE> 8
recommending that the Company's stockholders accept the Offer, tender their
shares pursuant to the Offer and approve and adopt the Agreement. The Company
represents that such approval constitutes approval of the Offer, the Agreement
and the transactions contemplated hereby, including the Merger, for purposes of
Section 203 of the Delaware General Corporation Law, as amended (the "DGCL"),
such that Section 203 of the DGCL will not apply to the transactions
contemplated by the Agreement. The Company represents that its Board of
Directors has received the opinion of William Blair & Company dated as of April
22, 1997 that the proposed consideration to be received by the holders of Shares
pursuant to the Offer and the Merger is fair to such holders from a financial
point of view, and a complete and correct signed copy of such opinion has been
delivered by the Company to Parent for inclusion in the Offer Documents.
(b) At the time the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, the "Schedule 14D-9") containing the recommendation described in
paragraph (a) and shall mail the Schedule 14D-9 to the stockholders of the
Company. The Schedule 14D-9 shall comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder and, on the date filed with the SEC and on the date first
published, sent or given to the Company's stockholders, shall not 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 therein, in
light of the circumstances under which they were made, not misleading, except
that no representation or warranty is made by the Company with respect to
information supplied by Parent or Sub specifically for inclusion in the Schedule
14D-9. Each of the Company, Parent and Sub agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that such information shall have become false or misleading in any material
respect, and the Company further agrees to take all steps necessary to amend or
supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or
supplemented to be filed with the SEC and disseminated to the Company's
stockholders, in each case as and to the extent required by applicable Federal
securities laws. Parent and its counsel shall be given reasonable opportunity to
review and comment upon the Schedule 14D-9 prior to its filing with the SEC or
dissemination to stockholders of the Company. The Company agrees to provide
Parent and its counsel any comments the Company or its counsel may receive from
the SEC or its staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments.
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(c) In connection with the Offer and the Merger, the Company shall
furnish or cause its transfer agent to furnish Sub promptly with mailing labels
containing the names and addresses of the record holders of Shares as of a
recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of stockholders, security position
listings and computer files and all other information in the Company's
possession or control regarding the beneficial owners of Shares, and shall
furnish to Sub such information and assistance (including updated lists of
stockholders, security position listings and computer files) as Parent may
reasonably request in communicating the Offer to the Company's stockholders.
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 Merger, Parent and Sub and their agents shall hold in
confidence the information contained in any such labels, listings and files,
will use such information only in connection with the Offer and the Merger and,
if the Agreement shall be terminated, will, upon request, deliver, and will use
their best efforts to cause their agents to deliver, to the Company all copies
of such information then in their possession or control.
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. Upon the terms and subject to the
conditions set forth in the Agreement, and in accordance with DGCL, Sub shall be
merged with and into the Company at the Effective Time (as defined in Section
2.03). Following the Effective Time, the separate corporate existence of Sub
shall cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation") and shall succeed to and assume all the rights and
obligations of Sub in accordance with the DGCL. At the election of Parent, any
direct or indirect wholly owned subsidiary (as defined in Section 10.03) of
Moore Corporation Limited may be substituted for Sub as a constituent
corporation in the Merger. In such event, the parties agree to execute an
appropriate amendment to the Agreement in order to reflect the foregoing.
SECTION 2.02. Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. (New York City time) on a date to be specified by
Parent or Sub, which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article VIII (the "Closing
Date"), at the offices of Chadbourne & Parke LLP, 30 Rockefeller Plaza, New
York, New York 10112, unless another date, time or place is agreed to in writing
by the parties hereto.
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SECTION 2.03. Effective Time. Subject to the provisions of the
Agreement, as soon as practicable on or after the Closing Date, the parties
shall file a certificate of merger or other appropriate documents (in any such
case, the "Certificate of Merger") executed in accordance with the relevant
provisions of the DGCL and shall make all other filings or recordings required
under the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Delaware Secretary of State, or at
such other time as Sub and the Company shall agree should be specified in the
Certificate of Merger (the time the Merger becomes effective being hereinafter
referred to as the "Effective Time").
SECTION 2.04. Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL.
SECTION 2.05. Certificate of Incorporation and By-laws. (a) The
Restated Certificate of Incorporation of the Company, as in effect immediately
prior to the Effective Time, shall be amended as of the Effective Time so that
ARTICLE FOURTH of such certificate of incorporation reads in its entirety as
follows: "The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 1000 shares of Common Stock, par
value $.01 per share" and, as so amended, such certificate of incorporation
shall be the certificate of incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
(b) The by-laws of the Company as in effect immediately prior to the
Effective Time shall be the by-laws of the Surviving Corporation, until
thereafter changed or amended as provided therein or by applicable law.
SECTION 2.06. Directors. The directors of Sub immediately prior to
the Effective Time shall be the directors of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be, and the Company shall
procure, prior to and as a condition to the Closing, the resignation of each of
its directors effective as of the Closing.
SECTION 2.07. Officers. The officers of the Company immediately
prior to the Effective Time shall be the officers of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
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ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 3.01. Effect on Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
Shares or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of Sub shall be converted into and become 1000 fully paid and
nonassessable shares of Common Stock, par value $.01 per share, of the Surviving
Corporation.
(b) Cancellation of Treasury Stock and Parent Owned Stock. Each
share of Company Common Stock that is owned by the Company or by any subsidiary
of the Company and each Share that is owned by Parent, Sub or any other
subsidiary of Parent shall automatically be canceled and retired and shall cease
to exist, and no consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section 3.01(d),
each Share issued and outstanding (other than Shares to be canceled in
accordance with Section 3.01(b)) shall be converted into the right to receive
from the Surviving Corporation in cash, without interest, the price paid in the
Offer (the "Merger Consideration"). As of the Effective Time, all such Shares
shall no longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each holder of a certificate representing any such
Shares shall cease to have any rights with respect thereto, except the right to
receive the Merger Consideration, without interest.
(d) Shares of Dissenting Stockholders. Notwithstanding anything in
the Agreement to the contrary, any issued and outstanding Shares held by a
person (a "Dissenting Stockholder") who complies with all the provisions of
Delaware law concerning the right of holders of Company Common Stock to dissent
from the Merger and require appraisal of their Shares ("Dissenting Shares")
shall not be converted as described in Section 3.01(c) but shall become the
right to receive such consideration as may be determined to be due to such
Dissenting Stockholder pursuant to the laws of the State of Delaware. If, after
the Effective Time, such Dissenting Stockholder withdraws his demand for
appraisal or fails to perfect or otherwise loses his right of appraisal, in any
case pursuant to the DGCL, his Shares shall be deemed to be converted as of the
Effective Time into the right to receive the Merger Consideration. The Company
shall give Parent (i) prompt notice of any demands for appraisal of
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Shares received by the Company and (ii) the opportunity to participate in and
direct all negotiations and proceedings with respect to any such demands. The
Company shall not, without the prior written consent of Parent, make any payment
with respect to, or settle, offer to settle or otherwise negotiate, any such
demands.
(e) Withholding Tax. Parent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
holder of shares of Common Stock outstanding immediately prior to the Effective
Time such amounts as may be required to be deducted and withheld with respect to
the making of such payment under the Internal Revenue Code of 1986, as amended
(the "Code"), or any provision of state, local or foreign tax law. To the extent
that amounts are so withheld, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Common Stock outstanding immediately prior to the Effective Time in respect of
which such deduction and withholding was made.
SECTION 3.02. Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Parent shall
designate a bank or trust company to act as paying agent in the Merger (the
"Paying Agent"), and, from time to time on, prior to or after the Effective
Time, Parent shall make available, or cause the Surviving Corporation to make
available, to the Paying Agent funds in amounts and at the times necessary for
the payment of the Merger Consideration upon surrender of certificates
representing Shares as part of the Merger pursuant to Section 3.01 (it being
understood that any and all interest earned on funds made available to the
Paying Agent pursuant to the Agreement shall be turned over to Parent).
(b) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented Shares (the "Certificates"), (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Paying
Agent and shall be in a form and have such other provisions as Parent may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Paying Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor the amount
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of cash into which the Shares theretofore represented by such Certificate shall
have been converted pursuant to Section 3.01, and the Certificate so surrendered
shall forthwith be canceled. In the event of a transfer of ownership of Shares
that is not registered in the transfer records of the Company, payment may be
made to a person other than the person in whose name the Certificate so
surrendered is registered, if such Certificate shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting such payment
shall pay any transfer or other taxes required by reason of the payment to a
person other than the registered holder of such Certificate or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 3.02, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the amount of cash, without
interest, into which the Shares theretofore represented by such Certificate
shall have been converted pursuant to Section 3.01. No interest will be paid or
will accrue on the cash payable upon the surrender of any Certificate.
(c) No Further Ownership Rights in Company Common Stock. All cash
paid upon the surrender of Certificates in accordance with the terms of this
Article III shall be deemed to have been paid in full satisfaction of all rights
pertaining to the Shares theretofore represented by such Certificates. At the
Effective Time, the stock transfer books of the Company shall be closed, and
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of the Shares that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation or the Paying Agent for any reason, they
shall be canceled and exchanged as provided in this Article III.
(d) Termination of Fund; No Liability. At any time following six
months after the Effective Time, the Surviving Corporation shall be entitled to
require the Paying Agent to deliver to it any funds (including any interest
received with respect thereto) which had been made available to the Paying Agent
and which have not been disbursed to holders of Certificates, and thereafter
such holders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat or other similar laws) only as general creditors
thereof with respect to the Merger Consideration payable upon due surrender of
their Certificates, without any interest thereon. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Paying Agent shall be liable to any
holder of a Certificate for Merger Consideration delivered to a public official
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pursuant to any applicable abandoned property, escheat or similar law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the schedule attached to this Agreement
setting forth exceptions to the Company's representations and warranties set
forth herein (the "Company Disclosure Schedule"), the Company represents and
warrants to Parent and Sub as set forth below. The Company Disclosure Schedule
will be arranged in sections corresponding to sections of this Agreement to be
modified by such disclosure schedule.
SECTION 4.01. Organization. The Company and each of its subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to carry on its business as now being conducted, except
where the failure to be so organized, existing and in good standing or to have
such power and authority would not have a material adverse effect (as defined in
Section 10.03) on the Company. The Company and each of its subsidiaries is duly
qualified or licensed to do business and in good standing in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing necessary, except
in such jurisdictions where the failure to be so duly qualified or licensed and
in good standing would not have a material adverse effect on the Company or
prevent or materially delay the consummation of the Offer and/or the Merger. The
Company has made available to Parent complete and correct copies of its Amended
and Restated Certificate of Incorporation and By-laws and the certificates of
incorporation and by-laws (or similar organizational documents) of its
subsidiaries.
SECTION 4.02. Subsidiaries. The subsidiaries of the Company are as
set forth on Schedule 4.02. All the outstanding shares of capital stock of each
such subsidiary, other than director qualifying shares of foreign subsidiaries,
are owned by the Company, by another wholly owned subsidiary of the Company or
by the Company and another wholly owned subsidiary of the Company, free and
clear of all pledges, claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever (collectively, "Liens"), except for
immaterial Liens on outstanding shares of capital stock of foreign subsidiaries
of the Company, and are duly authorized, validly issued, fully paid and
nonassessable. Except for the capital stock of its subsidiaries, the Company
does not own, directly or
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indirectly, any capital stock or other ownership interest in any corporation,
partnership, joint venture or other entity.
SECTION 4.03. Capitalization. The authorized capital stock of the
Company consists of 15,000,000 shares of Company Common Stock and 2,000,000
shares of preferred stock, par value $0.01 per share ("Company Preferred
Stock"). At the close of business on April 15, 1997, (i) 9,297,472 shares of
Company Common Stock were issued and outstanding, (ii) 8250 shares of Company
Common Stock were held by the Company in its treasury, (iii) 970,329 shares of
Company Common Stock were reserved for issuance upon exercise of outstanding
Options (as defined in Section 7.04), (iv) a maximum of 12,250 shares of Company
Common Stock were issuable upon the exercise of certain outstanding warrants,
(v) 100,000 shares of Preferred Stock are designated as Series A Junior
Participating Preferred Stock, none of which are issued and outstanding and (vi)
112,991 shares of Company Common Stock have been reserved for issuance pursuant
to the Company ESPPs (as defined in Section 7.04). Except as set forth above and
except for Shares issued upon the exercise of Options since April 15, 1997, as
of the date of the Agreement, no shares of capital stock or other voting
securities of the Company were issued, reserved for issuance or outstanding. All
outstanding shares of capital stock of the Company are, and all shares which may
be issued will be, when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. There are no bonds,
debentures, notes or other indebtedness of the Company having the right to vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which stockholders of the Company may vote. Except as set
forth above, and except for obligations to grant options, subject to the
approval of the Board of Directors of the Company, as of the date of the
Agreement, there are no securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which the
Company or any of its subsidiaries is a party or by which any of them is bound
obligating the Company or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of the Company or of any of its subsidiaries or
obligating the Company or any of its subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. As of the date of the Agreement, there
are not any outstanding contractual obligations (i) of the Company or any of its
subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of the Company or (ii) of the Company to vote or to dispose of any shares
of the capital stock of any of its subsidiaries.
SECTION 4.04. Authority. The Company has the requisite corporate
power and authority to execute and
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deliver the Agreement and to consummate the transactions contemplated hereby
(other than, with respect to the Merger, the approval and adoption of the terms
of the Agreement by the holders of a majority of the Shares (the "Company
Stockholder Approval")). The execution, delivery and performance of the
Agreement and the consummation by the Company of the Merger and of the other
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company and no other corporate proceedings
on the part of the Company are necessary to authorize the Agreement or to
consummate the transactions so contemplated (in each case, other than, with
respect to the Merger, the Company Stockholder Approval). The Agreement has been
duly executed and delivered by the Company and, assuming the Agreement
constitutes a valid and binding obligation of Parent and Sub, constitutes a
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.
SECTION 4.05. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act (including the
filing with the SEC of the Schedule 14D-9 and a proxy statement relating to any
required approval by the Company's stockholders of the Agreement (the "Proxy
Statement")), the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), the German Competition Act, the DGCL, the laws of other
states in which the Company is qualified to do or is doing business, state
takeover laws and foreign laws, neither the execution, delivery or performance
of the Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby will (i) conflict with or result in any breach
of any provision of the Amended and Restated Certificate of Incorporation or
By-laws of the Company or of the similar organizational documents of any of its
subsidiaries, (ii) require any filing with, or permit, authorization, consent or
approval of, any Federal, state or local government or any court, tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency, domestic, foreign or supranational (a "Governmental
Entity") (except where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings would not have a material adverse
effect on the Company or prevent or materially delay the consummation of the
Offer and/or the Merger), (iii) except as set forth on Schedule 4.05, result in
a violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right
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of termination, amendment, cancellation or acceleration) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which the
Company or any of its subsidiaries is a party or by which any of them or any of
their properties or assets may be bound, provided, however, that certain
contracts and agreements, the material ones of which have been identified to
Parent by the Company, (A) provide for their termination upon a change of
control of the Company or (B) contain provisions restricting their assignment,
or (iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Company, any of its subsidiaries or any of their properties or
assets, except in the case of clauses (iii) or (iv) for violations, breaches or
defaults that would not have a material adverse effect on the Company or prevent
or materially delay the consummation of the Offer and/or the Merger.
SECTION 4.06. SEC Reports and Financial Statements. The Company has
filed with the SEC, and has heretofore made available to Parent true and
complete copies of, all forms, reports, schedules, statements and other
documents required to be filed by it since December 31, 1994, under the Exchange
Act or the Securities Act of 1933 (the "Securities Act") (such forms, reports,
schedules, statements and other documents, including any financial statements or
schedules included therein, are referred to as the "Company SEC Documents"). The
Company SEC Documents, at the time filed, (a) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading and (b) complied in
all material respects with the applicable requirements of the Exchange Act and
the Securities Act, as the case may be, and the applicable rules and regulations
of the SEC thereunder. Except to the extent revised or superseded by a
subsequently filed Company Filed SEC Document (as defined in Section 4.07) (a
copy of which has been made available to Parent prior to the date hereof) or by
the Company's annual earnings press release dated April 1, 1997, the Company SEC
Documents and such press release, considered as a whole as of their date, do not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated or incorporated by reference therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading (it being understood that the foregoing does not cover
future events resulting from public announcement of the Offer and the Merger).
The financial statements of the Company included in the Company SEC Documents
comply as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have
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been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited statements, as
permitted by Forms 10-Q and 8-K of the SEC) and fairly present (subject, in the
case of the unaudited statements, to normal, recurring audit adjustments) the
consolidated financial position of the Company and its consolidated subsidiaries
as at the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended.
SECTION 4.07. Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Documents filed and publicly available prior to the
date of the Agreement (the "Company Filed SEC Documents"), and except as
disclosed in the Company's financial statements dated as of December 31, 1996
audited by Ernst & Young LLP (the "Company 1996 Financial Statements") (a copy
of which has been delivered to Parent by the Company), and except as
contemplated by Section 7.04, since December 31, 1996, the Company and its
subsidiaries have conducted their respective businesses only in the ordinary
course, and there has not been any material adverse change (as defined in
Section 10.03) with respect to the Company. Except as disclosed in the Company
Filed SEC Documents or the Company 1996 Financial Statements, since December 31,
1996, there has not been (i) any declaration, setting aside or payment of any
dividend or other distribution with respect to its capital stock or any
redemption, purchase or other acquisition of any of its capital stock, (ii) any
split, combination or reclassification of any of its capital stock or any
issuance or the authorization of any issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock, (iii) (w) any
granting by the Company or any of its subsidiaries to any officer of the Company
or any of its subsidiaries of any increase in compensation, except in the
ordinary course of business (including in connection with promotions) consistent
with past practice, (x) any granting by the Company or any of its subsidiaries
to any such officer of any increase in severance or termination pay, except as
part of a standard employment package to any person promoted or hired (but not
including the five most senior officers), (y) except employment arrangements in
the ordinary course of business consistent with past practice with employees
other than any executive officer of the Company, any entry by the Company or any
of its subsidiaries into any employment, severance or termination agreement with
any such employee or executive officer or (z) except as contemplated by Section
7.04, any increase in or establishment of any bonus, insurance, deferred
compensation, pension, retirement, profit-sharing, stock option (including the
granting of stock options, stock appreciation rights, performance awards or
restricted stock awards or the amendment of any existing
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stock options, stock appreciation rights, performance awards or restricted stock
awards), stock purchase or other employee benefit plan or agreement or
arrangement, except in the ordinary course of business consistent with past
practice, (iv) any damage, destruction or loss, whether or not covered by
insurance, that has or reasonably could be expected to have a material adverse
effect on the Company, (v) any revaluation by the Company of any of its material
assets, (vi) any material change in accounting methods, principles or practices
by the Company or (vii) (A) any licensing or other agreement with regard to the
acquisition or disposition of any material Intellectual Property (as defined in
Section 4.18) or rights thereto other than licenses or other agreements in the
ordinary course of business consistent with past practice or (B) any amendment
or consent with respect to any licensing agreement filed, or required to be
filed, by the Company with the SEC.
SECTION 4.08. No Undisclosed Liabilities. Except as and to the
extent set forth in the Company 1996 Financial Statements, as of December 31,
1996, neither the Company nor any of its subsidiaries had any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise, that
would be required by generally accepted accounting principles to be reflected on
a consolidated balance sheet of the Company and its subsidiaries (including the
notes thereto). Since December 31, 1996, except as and to the extent set forth
in the Company Filed SEC Documents, neither the Company nor any of its
subsidiaries has incurred any liabilities of any nature, whether or not accrued,
contingent or otherwise, that would have a material adverse effect on the
Company. The Company and its subsidiaries do not have consolidated indebtedness
for borrowed money in excess of $30,000,000.
SECTION 4.09. Information Supplied. None of the information supplied
or to be supplied by the Company specifically for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
information to be filed by the Company in connection with the Offer pursuant to
Rule 14f-1 promulgated under the Exchange Act (the "Information Statement") or
(iv) the Proxy Statement, will, in the case of the Offer Documents, the Schedule
14D-9 and the Information Statement, at the respective times the Offer
Documents, the Schedule 14D-9 and the Information Statement are filed with the
SEC or first published, sent or given to the Company's stockholders, or, in the
case of the Proxy Statement, at the time the Proxy Statement is first mailed to
the Company's stockholders or at the time of the Stockholders Meeting (as
defined in Section 7.01), 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 therein, in light of the circumstances under which
they are made, not
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misleading. The Schedule 14D-9, the Information Statement and the Proxy
Statement will comply as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by
Parent or Sub specifically for inclusion or incorporation by reference therein.
SECTION 4.10. Benefit Plans. (a) Each "employee pension benefit
plan" (as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) (a "Pension Plan"), "employee welfare benefit
plan" (as defined in Section 3(1) of ERISA) (a "Welfare Plan") and each other
plan, binding pensions arrangement or policy (written or oral) relating to stock
options, stock purchases, compensation, deferred compensation, bonuses,
severance, fringe benefits or other employee benefits, in each case maintained
or contributed to, or required to be maintained or contributed to, by the
Company or its subsidiaries for the benefit of any present or former employee,
officer or director (each of the foregoing, a "Benefit Plan") has been
administered in all material respects in accordance with its terms, except for
such failures which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect. The Company and its subsidiaries and
all the Benefit Plans are in compliance in all material respects with the
applicable provisions of ERISA, the Code, all other applicable laws, except for
such failures which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect.
(b) Schedule 4.10 attached hereto sets forth a complete list of each
Benefit Plan as well as each employment, termination and severance agreement,
contract, binding arrangement and understanding (whether written or oral) with
employees of the Company and its subsidiaries.
(c) None of the Pension Plans is subject to Title IV of ERISA or
Section 412 of the Code and none of the Company or any other person or entity
that, together with the Company, is treated as a single employer under Section
414 (b), (c), (m) or (o) of the Code (each, including the Company, a "Commonly
Controlled Entity"): (i) currently contributes to, or during any time during the
last six years had an obligation to contribute to, a Pension Plan subject to
Title IV of ERISA or Section 412 of the Code, or (ii) has incurred any liability
to the Pension Benefit Guaranty Corporation (other than for payment of premiums
not yet due), which liability has not been fully paid. All contributions and
other payments required to be made by the Company to any Pension Plan with
respect to any period ending before the
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Closing Date have been made or reserves adequate for such contributions or other
payments have been or will be set aside therefor and have been or will be
reflected in financial statements, except for such failures which, individually
or in the aggregate, could not reasonably be expected to have a material adverse
effect.
(d) Neither the Company nor any Commonly Controlled Entity is
required to contribute to any "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA) or has withdrawn from any multiemployer plan where such
withdrawal has resulted or would result in any "withdrawal liability" (within
the meaning of Section 4201 of ERISA) or "mass withdrawal liability" within the
meaning of PBGC Regulation 4219.2 that has not been fully paid.
(e) Each Benefit Plan that is a Welfare Plan may be amended or
terminated, upon thirty (30) days notice, at any time after the Effective Time
without material liability to the Company or its subsidiaries.
(f) Except as set forth in Schedule 4.10, or as required under
Section 4980B of the Code, the Company does not have any obligation to provide
post-retirement health benefits.
(g) The Company has heretofore delivered to Parent correct and
complete copies of each of the following:
(1) All written, and descriptions of all binding oral,
employment, termination and severance agreements, contracts, arrangements
and understandings listed on Schedule 4.10;
(2) Each Benefit Plan and all amendments thereto; the trust
instrument and/or insurance contracts, if any, forming a part of such
Benefit Plan and all amendments thereto;
(3) The most recent IRS Form 5500 and all schedules thereto,
if any;
(4) The most recent determination letter issued by the IRS
regarding the qualified status of each such Pension Plan;
(5) The most recent accountant's report, if any; and
(6) The most recent summary plan description, if any.
SECTION 4.11. Other Compensation Arrangements. Except as disclosed
in the Company Filed SEC Documents or on
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Schedule 4.11, or except as provided in the Agreement, as of the date of the
Agreement, neither the Company nor any of its subsidiaries is a party to any
binding oral or written (i) consulting agreement not terminable on not more than
60 calendar days notice (except for third party agreements for the development
of, and assignment to, the Company of Intellectual Property in the ordinary
course of business) and involving the payment of more than $100,000 per annum,
(ii) agreement with any executive officer or other key employee of the Company
or any of its subsidiaries (x) the benefits of which are contingent, or the
terms of which are materially altered, upon the occurrence of a transaction
involving the Company of the nature contemplated by the Agreement or (y)
providing any term of employment or compensation guarantee extending for a
period longer than two years or the payment of more than $100,000 per annum or
(iii) agreement or plan, including any stock option plan, stock appreciation
right plan, restricted stock plan or stock purchase plan, any of the benefits of
which will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by the
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by the Agreement.
SECTION 4.12. Litigation. There is no suit, claim, action,
proceeding or investigation pending before any Governmental Entity or, to the
best knowledge of the Company, threatened against the Company or any of its
subsidiaries that could reasonably be expected to have a material adverse effect
on the Company. Neither the Company nor any of its subsidiaries is subject to
any outstanding order, writ, injunction or decree that could reasonably be
expected to have a material adverse effect on the Company.
SECTION 4.13. Compliance with Applicable Law. The Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses (the "Company Permits"), except for failures to hold such
permits, licenses, variances, exemptions, orders and approvals that would not
have a material adverse effect on the Company. The Company and its subsidiaries
are in compliance with the terms of the Company Permits, except where the
failure so to comply would not have a material adverse effect on the Company.
Except as disclosed in the Company Filed SEC Documents, to the best knowledge of
the Company, the businesses of the Company and its subsidiaries are not being
conducted in violation of any law, ordinance or regulation of any Governmental
Entity, except for possible violations that would not have a material adverse
effect on the Company or prevent or materially delay the consummation of the
Offer and/or the Merger. As of the date of the Agreement, no investigation or
review by any
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Governmental Entity with respect to the Company or any of its subsidiaries is
pending or, to the best knowledge of the Company, threatened, nor has any
Governmental Entity indicated an intention to conduct any such investigation or
review, other than, in each case, those the outcome of which would not be
reasonably expected to have a material adverse effect on the Company or prevent
or materially delay the consummation of the Offer and/or the Merger.
SECTION 4.14. Tax Matters. (a) The Company and each of its
subsidiaries has timely filed all Federal income tax returns and all other
material tax returns and reports required to be filed by it. All such returns
are complete and correct in all material respects (except to the extent a
reserve has been established on the financial statements contained in the
Company Filed SEC Documents or the Company 1996 Financial Statements). Each of
the Company and its subsidiaries (i) has paid (or the Company has paid on its
subsidiaries' behalf) to the appropriate authorities all taxes required to be
paid by it (without regard to whether a tax return is required), except taxes
for which an adequate reserve has been established on the financial statements
contained in the Company Filed SEC Documents or the Company 1996 Financial
Statements, and (ii) has withheld and paid to the appropriate authorities all
material withholding taxes required to be withheld by it. The most recent
financial statements contained in the Company Filed SEC Documents reflect an
adequate reserve for all taxes payable by the Company and its subsidiaries for
all taxable periods and portions thereof through the date of such financial
statements.
(b) No Federal income tax return or other material tax return of the
Company or any of its subsidiaries is under audit or examination by any taxing
authority, and no written or unwritten notice of such an audit or examination
has been received by the Company or any of its subsidiaries. Each material
deficiency resulting from any audit or examination relating to taxes by any
taxing authority has been paid, except for deficiencies being contested in good
faith. No material issues relating to taxes were raised in writing by the
relevant taxing authority in any completed audit or examination that can
reasonably be expected to recur in a later taxable period. The Federal income
tax returns of the Company and each of its subsidiaries do not contain any
positions that could give rise to a material substantial understatement penalty
within the meaning of Section 6662 of the Code.
(c) There is no agreement or other document extending, or having the
effect of extending, the period of assessment or collection of any taxes and no
power of attorney with respect to any taxes has been executed or filed with any
taxing authority.
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(d) No material liens for taxes exist with respect to any assets or
properties of the Company or any of its subsidiaries, except for liens for taxes
not yet due.
(e) None of the Company or any of its subsidiaries is a party to or
is bound by any tax sharing agreement, tax indemnity obligation or similar
agreement, arrangement or practice with respect to taxes (including any advance
pricing agreement, closing agreement or other agreement relating to taxes with
any taxing authority).
(f) None of the Company or any of its subsidiaries shall be required
to include in a taxable period ending after the Effective Time taxable income
attributable to income that accrued in a prior taxable period but was not
recognized in any prior taxable period as a result of the installment method of
accounting, the completed contract method of accounting, the long-term contract
method of accounting, the cash method of accounting or Section 481 of the Code
or comparable provisions of state, local or foreign tax law.
(g) Neither the Company nor any of its subsidiaries (i) is a party
to a safe harbor lease within the meaning of Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect prior to amendment by the Tax
Equity and Fiscal Responsibility Act of 1982, (ii) is a "consenting corporation"
under Section 341(f) of the Code, (iii) has agreed or is obligated to make any
payments for services which would not be deductible pursuant to Sections
162(a)(1), 162(m) or 280G of the Code, (iv) has participated in an international
boycott as defined in Section 999 of the Code, or (v) is required to make any
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise.
(i) As used in the Agreement, "taxes" shall include all Federal,
state, local and foreign income, property, sales, excise, withholding and other
taxes, tariffs or governmental charges of any nature whatsoever.
SECTION 4.15. State Takeover Statutes. The Board of Directors of the
Company has approved the Offer, the Merger, the Agreement and the acquisition of
Shares by Sub pursuant to the Offer and such approval is sufficient to render
inapplicable to the Offer, the Merger, the Agreement and the transactions
contemplated by the Agreement and the provisions of Section 203 of the DGCL. To
the actual knowledge of the Company without investigation, no other state
takeover statute or similar statute or regulation applies or purports to apply
to the Offer, the Merger, the Agreement, or any of the transactions contemplated
by the Agreement.
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SECTION 4.16. Brokers; Fees and Expenses. No broker, investment
banker, financial advisor or other person, other than William Blair & Company,
the fees and expenses of which will be paid by the Company, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by the Agreement based upon
arrangements made by or on behalf of the Company. The estimated fees and
expenses incurred and to be incurred by the Company in connection with the
Agreement and the transactions contemplated by the Agreement (including the fees
of the Company's legal counsel and the legal counsel for its financial advisor)
are set forth in a letter dated April 23, 1997 from the Company to Parent. The
Company represents that it has not, and covenants, without the prior written
consent of Parent, not to request that Goldman, Sachs & Co. undertake a study to
enable Goldman Sachs & Co. to render their opinion as to the fairness of the
financial consideration to be received by stockholders of the Company or the
Company.
SECTION 4.17. Opinion of Financial Advisor. The Company has received
the opinion of William Blair & Company, dated April 22, 1997, to the effect
that, as of that date, the consideration to be received in the Offer and the
Merger by the Company's stockholders is fair from a financial point of view, and
a complete and correct signed copy of such opinion has been, or promptly upon
receipt thereof will be, delivered to Parent.
SECTION 4.18. Intellectual Property. (a) Except as listed on
Schedule 4.18, the Company has made available to Parent true and correct copies
of all license agreements relating to Intellectual Property to which the Company
and its subsidiaries are a party that are material, individually or in the
aggregate, to the Company and its subsidiaries and its and their operations,
taken as a whole.
(b) Except to the extent that the inaccuracy of any of the following
(or the circumstances giving rise to such inaccuracy) would not have a material
adverse effect on the Company:
(1) the Company and each of its subsidiaries owns, or is
licensed or otherwise has the right to use (in each case, clear of any
liens or encumbrances of any kind), all Intellectual Property used in or
necessary for the conduct of its business as currently conducted;
(2) no claims are pending or, to the best knowledge of the
Company, threatened that the Company or any of its subsidiaries is
infringing on or otherwise violating the rights of any person with
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regard to any Intellectual Property owned by and/or licensed to the
Company or its subsidiaries;
(3) to the best knowledge of the Company, no person is
infringing on or otherwise violating any right of the Company or any of
its subsidiaries with respect to any Intellectual Property owned by and/or
licensed to the Company or its subsidiaries;
(4) none of the former or current members of management or key
personnel of the Company or any of its subsidiaries, including all former
and current employees, agents, consultants and contractors who have
contributed to or participated in the conception and development of
computer software or other Intellectual Property of the Company or any of
its subsidiaries have any valid claim against the Company or any of its
subsidiaries in connection with the involvement of such persons in the
conception and development of any computer software or other Intellectual
Property of the Company or any of its subsidiaries, and no such claim has
been asserted or threatened;
(5) except as set forth in Schedule 4.18, the execution and
delivery of the Agreement, compliance with its terms and the consummation
of the transactions contemplated hereby do not and will not conflict with
or result in any violation or default (with or without notice or lapse of
time or both) or give rise to any right, license or encumbrance relating
to Intellectual Property owned by the Company or its subsidiaries or with
respect to which the Company or its subsidiaries now has or has had any
agreement with any third party, or right of termination, cancellation or
acceleration of any material Intellectual Property right or obligation set
forth in any agreement to which the Company or its subsidiaries are a
party, or the loss or encumbrance of any Intellectual Property or material
benefit related thereto, or result in or require the creation, imposition
or extension of any lien or encumbrance upon any Intellectual Property or
right, other than certain contracts and agreements, the material ones of
which have been identified to Parent by the Company, that (A) provide for
their termination upon a change of control of the Company or (B) contain
provisions restricting their assignment;
(6) except as set forth in Schedule 4.18, and except in the
ordinary course of business consistent with past practice, no licenses or
rights have been granted to distribute the source code of, or to use
source code to create Derivative Works (as hereinafter defined) of any
product currently marketed by, commercially available from or under
development by
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the Company or any of its subsidiaries for which the Company possesses the
source code; and
(7) the Company and each of its subsidiaries has taken
reasonable and necessary steps to protect their Intellectual Property and
their rights thereunder, and to the best knowledge of the Company no such
rights to Intellectual Property have been lost or are in jeopardy of being
lost through failure to act by the Company or any of its subsidiaries.
As used herein, "Derivative Work" shall mean a work that is
based upon one or more preexisting works, such as a revision, enhancement,
modification, abridgment, condensation, expansion or any other form in
which such preexisting works may be recast, transformed or adapted, and
which, if prepared without authorization of the owner of the copyright in
such preexisting work, would constitute a copyright infringement. For
purposes hereof, a Derivative Work shall also include any compilation that
incorporates such a preexisting work as well as translations from one
human language to another and from one type of code to another.
(c) For purposes of the Agreement, "Intellectual Property" shall
mean trademarks (registered or unregistered), service marks, brand names,
certification marks, trade dress, assumed names, trade names and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; inventions, discoveries and ideas, whether
patented, patentable or not in any jurisdiction; trade secrets and confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any person; writings and other works, whether copyrighted,
copyrightable or not in any jurisdiction; registration or applications for
registration of copyrights in any jurisdiction, and any renewals or extensions
thereof; any similar intellectual property or proprietary rights and computer
programs and software (including source code, object code and data); licenses,
immunities, covenants not to sue and the like relating to the foregoing; and any
claims or causes of action arising out of or related to any infringement or
misappropriation of any of the foregoing.
SECTION 4.19. Rights Agreement. The Company has taken all action
which may be necessary under the Rights Agreement dated as of March 28, 1997
between the Company and ChaseMellon Shareholder Services, as Rights Agent (the
"Rights Agreement"), so that (x) the execution of the Agreement and any
amendments thereto by the parties hereto
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and the consummation of the transactions contemplated thereby shall not cause
(i) Parent and/or Sub to become an Acquiring Person (as defined in the Rights
Agreement) or (ii) a Distribution Date or a Shares Acquisition Date (as such
terms are defined in the Rights Agreement) to occur, irrespective of the number
of Shares acquired pursuant to the Offer, and (y) the Rights (as defined in the
Rights Agreement) shall not be exercisable and shall expire immediately prior to
the Effective Time.
SECTION 4.20. Labor Matters (a) Neither the Company nor any of its
subsidiaries is a party to any employment, labor or collective bargaining
agreement and there are no employment, labor or collective bargaining agreements
which pertain to employees of the Company or its subsidiaries.
(b) No employees of the Company or its subsidiaries are represented
by any labor organization; no labor organization or group of employees of the
Company or its subsidiaries has made a pending demand for recognition or
certification to the Company or its subsidiaries and, to the knowledge of the
Company, there are no representation or certification proceedings or petitions
seeking a representation proceeding presently pending or threatened to be
brought or filed with the National Labor Relations Board or any other labor
relations tribunal or authority relating to the Company or its subsidiaries. To
the knowledge of the Company, there are no organizing activities involving the
Company or its subsidiaries pending with any labor organization or group of
employees of the Company or its subsidiaries.
(c) There are no unfair labor practice charges, grievances or
complaints pending or, to the knowledge of the Company, threatened in writing by
or on behalf of any employee or group of employees of the Company or its
subsidiaries.
(d) There are no complaints, charges, or claims against the Company
or its subsidiaries pending, or threatened in writing to be brought or filed,
with any Governmental Entity or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment or any individual by the Company or its subsidiaries.
(e) The Company and its subsidiaries are in material compliance with
all laws and regulations governing the employment of labor, including, but not
limited to, all such laws and regulations relating to wages, hours, collective
bargaining, discrimination, civil rights, safety and health, workers'
compensation and the collection and payment of withholding and/or Social
Security taxes and
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similar taxes except where noncompliance individually or in the aggregate will
not have a material adverse effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
SECTION 5.01. Organization. Each of Parent and Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to carry on its business as now being conducted, except where the
failure to be so organized, existing and in good standing or to have such power
and authority would not be reasonably expected to prevent or materially delay
the consummation of the Offer and/or the Merger.
SECTION 5.02. Authority. Parent and Sub have requisite corporate
power and authority to execute and deliver the Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of the
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Parent and Sub
and no other corporate proceedings on the part of Parent and Sub are necessary
to authorize the Agreement or to consummate such transactions. No vote of Parent
shareholders is required to approve the Agreement or the transactions
contemplated hereby. The Agreement has been duly executed and delivered by
Parent and Sub, as the case may be, and, assuming the Agreement constitutes a
valid and binding obligation of the Company, constitutes a valid and binding
obligation of each of Parent and Sub enforceable against them in accordance with
its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
SECTION 5.03. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act (including the
filing with the SEC of the Offer Documents), the HSR Act, the German Competition
Act, the DGCL, the laws of other states in which Parent is qualified to do or is
doing business, state takeover laws and foreign laws, neither the execution,
delivery or performance of the Agreement by Parent and Sub nor the consummation
by Parent and Sub of the transactions contemplated hereby will (i) conflict with
or result in any
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breach of any provision of the respective certificate of incorporation or
by-laws of Parent and Sub, (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity (except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings would not be reasonably expected to prevent or materially delay the
consummation of the Offer and/or the Merger), (iii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, lease, contract, agreement or other
instrument or obligation to which Parent or any of its subsidiaries is a party
or by which any of them or any of their properties or assets may be bound or
(iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent, any of its subsidiaries or any of their properties or
assets, except in the case of clauses (iii) and (iv) for violations, breaches or
defaults which would not, individually or in the aggregate, be reasonably
expected to prevent or materially delay the consummation of the Offer and/or the
Merger.
SECTION 5.04. Information Supplied. None of the information supplied
or to be supplied by Parent or Sub specifically for inclusion or incorporation
by reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
Information Statement or (iv) the Proxy Statement will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information Statement, at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to the Company's
stockholders, or, in the case of the Proxy Statement, at the time the Proxy
Statement is first mailed to the Company's stockholders or at the time of the
Stockholders Meeting, 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 therein, in light of the circumstances under which they are
made, not misleading. The Offer Documents will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made by Parent or Sub
with respect to statements made or incorporated by reference therein based on
information supplied by the Company specifically for inclusion or incorporation
by reference therein.
SECTION 5.05. Interim Operations of Sub. Sub was formed solely for
the purpose of engaging in the transactions contemplated hereby, has engaged in
no other business activities and has conducted its operations only as
contemplated hereby.
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SECTION 5.06. Brokers. No broker, investment banker, financial
advisor or other person, other than Lazard Freres & Co. LLC, the fees and
expenses of which will be paid by Parent, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated by the Agreement based upon arrangements made by or on
behalf of Parent or Sub.
SECTION 5.07. Financing. Parent has sufficient funds readily
available to purchase, or to cause Sub to purchase, all the Shares pursuant to
the Offer and the Merger and to pay all fees and expenses related to the
transactions contemplated by the Agreement.
SECTION 5.08. Share Ownership Neither Parent or
Sub owns any Shares.
ARTICLE VI
COVENANTS
SECTION 6.01. Covenants of the Company. Until such time as Parent's
designees shall constitute a majority of the members of the Board of Directors
of the Company, the Company agrees as to itself and its subsidiaries that
(except as expressly contemplated or permitted by the Agreement, or to the
extent that Parent shall otherwise consent in writing):
(a) Ordinary Course. The Company shall, and shall cause its
subsidiaries to, carry on their respective businesses in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted (it
being understood that the foregoing does not cover future events resulting from
public announcement of the Offer and the Merger) and shall use all reasonable
efforts to preserve intact their present business organizations, keep available
the services of their present officers and employees and preserve their
relationships with customers, suppliers and others having business dealings with
the Company and its subsidiaries.
(b) Dividends; Changes in Stock. The Company shall not, and shall
not permit any of its subsidiaries to, (i) declare or pay any dividends on or
make other distributions in respect of any of its capital stock, except for
dividends by a direct or indirect wholly owned subsidiary of the Company to its
parent, (ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock or (iii) repurchase,
redeem or otherwise acquire any shares of capital stock of the Company or its
subsidiaries or any
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other securities thereof except pursuant to contracts existing on the date of
the Agreement.
(c) Issuance of Securities. The Company shall not, and shall not
permit any of its subsidiaries to, issue, deliver, sell, pledge or encumber, or
authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any
shares of its capital stock of any class or any securities convertible into, or
any rights, warrants, calls, subscriptions or options to acquire, any such
shares or convertible securities, or any other ownership interest (including
stock appreciation rights or phantom stock) other than (i) the issuance of
shares of Company Common Stock upon the exercise of Options outstanding on the
date of the Agreement and in accordance with the terms of such Options, (ii) the
issuance of shares of Company Common Stock upon the exercise of warrants
outstanding on the date of the Agreement and in accordance with the terms of
such warrants as of the date of the Agreement and (iii) issuances of Company
Common Stock under ESPPs in accordance with Section 7.04(d).
(d) Governing Documents. The Company shall not, and shall not permit
any of its subsidiaries to, amend or propose to amend its certificate of
incorporation or by-laws (or similar organizational documents).
(e) No Acquisitions. The Company shall not, and shall not permit any
of its subsidiaries to, acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business or
any corporation, partnership, joint venture, association or other business
organization or division thereof or (ii) any assets that are material,
individually or in the aggregate, to the Company and its subsidiaries taken as a
whole, except purchases of inventory in the ordinary course of business
consistent with past practice.
(f) No Dispositions. Other than sales or licenses of its products to
customers in the ordinary course of business consistent with past practice, the
Company shall not, and shall not permit any of its subsidiaries to, sell, lease,
license, encumber or otherwise dispose of, or agree to sell, lease, license,
encumber or otherwise dispose of, any of its assets, except for the disposition
of equipment in the ordinary course of business consistent with past practice.
(g) Indebtedness. The Company shall not, and shall not permit any of
its subsidiaries to, (i) incur (which shall not be deemed to include entering
into credit agreements, lines of credit or similar agreements until borrowings
are made under such agreements) any indebtedness for borrowed money or guarantee
any such indebtedness or issue or sell any debt securities or warrants or rights
to
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acquire any debt securities of the Company or any of its subsidiaries, guarantee
any debt securities of others, enter into any "keep-well" or other agreement to
maintain any financial statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing, except for
working capital borrowings incurred in the ordinary course of business
consistent with past practice, or (ii) make any loans, advances or capital
contributions to, or investments in, any other person, other than, with respect
to both clause (i) and (ii) above, (A) to the Company or any direct or indirect
wholly owned subsidiary of the Company or (B) any advances to employees in
accordance with past practice.
(h) Advice of Changes; Filings. The Company shall confer with Parent
on a regular and frequent basis as reasonably requested by Parent, report on
operational matters and promptly advise Parent orally and, if requested by
Parent, in writing of any material adverse change with respect to the Company.
The Company shall promptly provide to Parent (or its counsel) copies of all
filings made by the Company with any Governmental Entity in connection with the
Agreement and the transactions contemplated hereby.
(i) Tax Matters. Neither the Company nor any of its subsidiaries
shall make any tax election that would have a material effect on the tax
liability of the Company or any of its subsidiaries or settle or compromise any
material income tax liability of the Company or any of its subsidiaries. The
Company shall, before filing or causing to be filed any material tax return of
the Company or any of its subsidiaries, consult with Parent and its advisors as
to the positions and elections that may be taken or made with respect to such
return, and shall take such positions or make such elections as the Company and
Parent shall jointly agree.
(j) Capital Expenditures. Neither the Company nor any of its
subsidiaries shall make or agree to make any new capital expenditure or
expenditures other than in accordance with the Company's 1997 Operating Plan,
which plan has been made available to Parent.
(k) Discharge of Liabilities. The Company shall not, and shall not
permit any of its subsidiaries to, pay, discharge, settle or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business consistent with past practice
or in accordance with their terms, of (i) liabilities recognized or disclosed in
the Company 1996 Financial Statements, (ii) liabilities not required by
generally accepted accounting principles to be recognized or disclosed therein,
or (iii) liabilities
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incurred since the date of such financial statements in the ordinary course of
business consistent with past practice. The Company shall not, and shall not
permit any of its subsidiaries to, willfully waive the benefits of, or agree to
modify in any manner, any confidentiality, standstill or similar agreement to
which the Company or any of its subsidiaries is a party.
(l) Material Contracts. Except in the ordinary course of business,
neither the Company nor any of its subsidiaries shall (i) modify, amend or
terminate any material contract or agreement to which the Company or such
subsidiary is a party, (ii) waive, release or assign any material rights or
claims or (iii) grant any rights to Intellectual Property except for licenses in
the ordinary course of business consistent with past practice. The employment
agreements entered into in connection with the transactions contemplated hereby
are "material contracts or agreements."
(m) Compensation of Company Employees. Except as provided in Section
7.04, the Company and its subsidiaries will not, without the prior written
consent of Parent, except as may be required by law, (i) enter into, adopt,
amend or terminate any Company Benefit Plan or other employee benefit plan or
any agreement, arrangement, plan or policy for the benefit of any director,
officer or current or former employee, (ii) except for normal increases or
bonuses in the ordinary course of business consistent with past practice that,
in the aggregate, do not result in a material increase in benefits or
compensation expense to the Company, increase in any manner the compensation or
fringe benefits of, or pay any bonus to, any director, officer or employee or
(iii) pay any benefit not required by any plan or arrangement as in effect as of
the date hereof (including the granting of, acceleration of exercisability of or
vesting of stock options, stock appreciation rights or restricted stock).
(n) General. The Company shall not, and shall not permit any of its
subsidiaries to, authorize any of, or commit or agree to take any of, the
foregoing actions described in this Section 6.01.
(o) Goldman Sachs Engagement Letter. The Company shall deliver to
Parent as promptly as practicable following the date hereof a fully executed
engagement letter from Goldman, Sachs & Co. in the form of that attached to the
Company Disclosure Schedule as Schedule 6.01(o). The breach of this obligation
shall constitute a failure of condition (f) of the Conditions of the Offer
attached hereto as Exhibit A.
SECTION 6.02. No Solicitation. (a) The Company and its officers,
directors, employees, representatives and agents shall immediately cease any
discussions or
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negotiations with any parties that may be ongoing with respect to a Takeover
Proposal (as hereinafter defined). The Company shall not, nor shall it permit
any of its subsidiaries to, 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 to facilitate, any inquiries
or the making of any proposal which constitutes, or may reasonably be expected
to lead to, any Takeover Proposal or (ii) participate in any discussions or
negotiations regarding any Takeover Proposal; provided, however, that if, at any
time prior to the acceptance for payment of Shares pursuant to the Offer, the
Board of Directors of the Company determines in good faith, after consultation
with 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 unsolicited Takeover Proposal, and subject to compliance
with Section 6.02(c), (x) furnish information with respect to the Company to any
person pursuant to a confidentiality agreement in a form approved by the Company
and Parent (such approval not to be unreasonably withheld) and (y) participate
in negotiations regarding such Takeover Proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the preceding sentence by any director or executive officer of the Company or
any of its subsidiaries or any investment banker, financial advisor, attorney,
accountant or other representative of the Company or any of its subsidiaries,
whether or not such person is purporting to act on behalf of the Company or any
of its subsidiaries or otherwise, shall be deemed to be a breach of this Section
6.02(a) by the Company. For purposes of the Agreement, "Takeover Proposal" means
any inquiry, proposal or offer from any person relating to any direct or
indirect acquisition or purchase of 20% or more of the assets of the Company and
its subsidiaries or 20% 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 20% or more of any
class of equity securities of the Company or any of its subsidiaries, any
merger, consolidation, business combination, sale of substantially all the
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries, other than the transactions
contemplated by the Agreement, or any other transaction the consummation of
which could reasonably be expected to impede, interfere with, prevent or
materially delay the Offer and/or the Merger or which would reasonably be
expected to dilute materially the benefits to Parent of the transactions
contemplated hereby.
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(b) Except as set forth in this Section 6.02, neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw or modify,
or propose to withdraw or modify, in a manner adverse to Parent, the approval or
recommendation by such Board of Directors or such committee of the Offer, the
Agreement or the Merger, (ii) approve or recommend, or propose to approve or
recommend, any Takeover Proposal or (iii) cause the Company to enter into any
agreement with respect to any Takeover Proposal. Notwithstanding the foregoing,
in the event that prior to the acceptance for payment of Shares pursuant to the
Offer the Board of Directors of the Company determines in good faith, after
consultation with 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 Board of Directors of the Company may (subject to the other provisions
of Section 6.02) withdraw or modify its approval or recommendation of the Offer,
the Agreement and the Merger, approve or recommend a Superior Proposal (as
defined below), cause the Company to enter into an agreement with respect to a
Superior Proposal or terminate the Agreement, but in each case only at a time
that is after the second business day following Parent's receipt of written
notice (a "Notice of Superior Proposal") advising Parent that the Board of
Directors of the Company has received a Superior Proposal, specifying the
material terms and conditions of such Superior Proposal and identifying the
person making such Superior Proposal. In the event that a Notice of Superior
Proposal is delivered and any material term or condition of the Superior
Proposal described therein is subsequently changed, the Company shall deliver a
supplemental Notice of Superior Proposal describing such change and may withdraw
or modify its approval or recommendation of the Offer, the Agreement and the
Merger, approve or recommend the modified Superior Proposal or cause the Company
to enter into an agreement with respect to the modified Superior Proposal only
at a time that is after the second business day following Parent's receipt of
the supplemental Notice of Superior Proposal. In addition, if the Company
proposes to enter into an agreement with respect to any Takeover Proposal, it
shall concurrently with entering into such agreement pay, or cause to be paid,
to Parent the Termination Fee (as such term is defined in Section 7.06(b)). For
purposes of the 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 shares of Company
Common Stock then outstanding or all or substantially all the assets of the
Company and otherwise on terms which the Board of Directors of the Company
determines in its good faith judgment (based on the advice of a financial
advisor of nationally recognized reputation) to be more favorable to the
Company's stockholders than the Offer and the Merger.
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(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 6.02, the Company shall immediately
advise Parent orally and in writing of any request for information or of any
Takeover Proposal, the material terms and conditions of such request or Takeover
Proposal and the identity of the person making such request or Takeover
Proposal. The Company will keep Parent fully informed of the status and details
(including amendments or proposed amendments) of any such request or Takeover
Proposal.
(d) Nothing contained in this Section 6.02 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 if, in the good faith judgment of the
Board of Directors of the Company, after consultation with outside counsel,
failure so to disclose would be inconsistent with its fiduciary duties to the
Company's stockholders under applicable law; provided, however, neither the
Company nor its Board of Directors nor any committee thereof shall, except as
permitted by Section 6.02(b), withdraw or modify, or propose to withdraw or
modify, its position with respect to the Offer, the Agreement or the Merger or
approve or recommend, or propose to approve or recommend, a Takeover Proposal.
SECTION 6.03. Other Actions. The Company shall not, and shall not
permit any of its subsidiaries to, take any action that would, or that could
reasonably be expected to, result in (i) any of the representations and
warranties of the Company set forth in the Agreement that are qualified as to
materiality becoming untrue, (ii) any of such representations and warranties
that are not so qualified becoming untrue in any material respect or (iii) any
of the Offer Conditions not being satisfied (subject to the Company's right to
take actions specifically permitted by Section 6.02).
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ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. Stockholder Approval; Preparation of Proxy Statement.
(a) If the Company Stockholder Approval is required by law, the Company will, at
Parent's request, as soon as practicable following the acceptance for payment
of, and payment for, any Shares by Sub pursuant to the Offer and the expiration
of the Offer, duly call, give notice of, convene and hold a meeting of its
stockholders (the "Stockholders Meeting") for the purpose of obtaining the
Company Stockholder Approval. The Company will, through its Board of Directors,
recommend to its stockholders that the Company Stockholder Approval be given.
Notwithstanding the foregoing, if Sub or any other subsidiary of Parent shall
acquire at least 90% of the outstanding Shares, the parties shall, at the
request of Parent, take all necessary and appropriate action to cause the Merger
to become effective as soon as practicable after the expiration of the Offer
without a Stockholders Meeting in accordance with Section 253 of the DGCL.
Without limiting the generality of the foregoing, the Company agrees that its
obligations pursuant to the first sentence of this Section 7.01(a) shall not be
affected by (i) the commencement, public proposal, public disclosure or
communication to the Company of any Takeover Proposal or (ii) the withdrawal or
modification by the Board of Directors of the Company of its approval or
recommendation of the Offer, the Agreement or the Merger.
(b) If the Company Stockholder Approval is required by law, the
Company will, at Parent's request, as soon as practicable following the
acceptance for payment of, and payment for, any Shares by Sub pursuant to the
Offer and the expiration of the Offer, prepare and file a preliminary Proxy
Statement with the SEC and will use its best efforts to respond to any comments
of the SEC or its staff and to cause the Proxy Statement to be mailed to the
Company's stockholders as promptly as practicable after responding to all such
comments to the satisfaction of the staff. The Company will notify Parent
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and will supply Parent with copies of
all correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement or the Merger. If at any time prior to the Stockholders Meeting there
shall occur any event that should be set forth in an amendment or supplement to
the Proxy Statement, the Company will promptly prepare and mail to its
stockholders such an amendment or supplement. The Company will not mail any
Proxy Statement, or any amendment or supplement thereto, to which Parent
reasonably objects.
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(c) Parent agrees to cause all Shares purchased pursuant to the
Offer and all other Shares owned by Parent or any subsidiary of Parent to be
voted in favor of the Company Stockholder Approval.
SECTION 7.02. Access to Information. Upon reasonable notice and
subject to restrictions contained in confidentiality agreements to which the
Company is subject (from which it shall use reasonable efforts to be released),
the Company shall, and shall cause each of its subsidiaries to, afford to Parent
and to the officers, employees, accountants, counsel and other representatives
of Parent access, during normal business hours during the period prior to the
Effective Time, to all their respective properties, books, contracts,
commitments and records and, during such period, the Company shall (and shall
cause each of its subsidiaries to) furnish promptly to Parent (a) a copy of each
report, schedule, registration statement and other document filed or received by
it during such period pursuant to the requirements of the Federal or state
securities laws or the Federal tax laws and (b) all other information concerning
its business, properties and personnel as Parent may reasonably request
(including the Company's outside accountants' work papers). Except as otherwise
agreed to by the Company, unless and until Parent and Sub shall have purchased a
majority of the outstanding Shares pursuant to the Offer, and notwithstanding
termination of the Agreement, the terms of the confidentiality agreement (the
"Confidentiality Agreement"), dated February 19, 1997 shall continue to apply.
SECTION 7.03. Reasonable Efforts. Each of the Company, Parent and
Sub agree to use its reasonable efforts to take, or cause to be taken, all
actions necessary to comply promptly with all legal requirements which may be
imposed on itself with respect to the Offer and the Merger (which actions shall
include furnishing all information required under the HSR Act, the German
Competition Act and in connection with approvals of or filings with any other
Governmental Entity) and will promptly cooperate with and furnish information to
each other in connection with any such requirements imposed upon any of them or
any of their subsidiaries in connection with the Offer and the Merger. Each of
the Company, Parent and Sub will, and will cause its subsidiaries to, use its
reasonable efforts to take all reasonable actions necessary to obtain (and will
cooperate with each other in obtaining) any consent, authorization, order or
approval of, or any exemption by, any Governmental Entity or other public or
private third party required to be obtained or made by Parent, Sub, the Company
or any of their subsidiaries in connection with the Offer and the Merger or the
taking of any action contemplated thereby or by the Agreement, except that no
party need waive any substantial
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rights or agree to any substantial limitation on its operations or to dispose of
any assets.
SECTION 7.04. Options; Concord Warrants. (a) The Company shall amend
The Peak Technologies Group, Inc. Nonqualified Stock Option Plan, The Peak
Technologies Group, Inc. Incentive Stock Option Plan, The Peak Technologies
Group, Inc. 1995 Non-Employee Directors Stock Option Program and any other
program pursuant to which there are holders of options to purchase Shares
granted by the Company (the "Options") to provide that if the optionees do not
exercise their unexercised Options within thirty (30) days of a notice that Peak
proposes to merge into another corporation, to the extent that an optionee does
not exercise within thirty (30) days of the notice the optionee shall receive,
in settlement of each Option held by the optionee, a "Cash Amount" (less any
applicable withholding taxes) with respect to the number of previously
unexercised Shares underlying the Option immediately prior to the Effective
Time. Each Option shall terminate as of the Effective Time. The Cash Amount
payable for each Option shall equal the product of (i) the Merger Consideration
minus the exercise price per Share of each such Option and (ii) the number of
previously unexercised Shares covered by each such Option.
(b) The Company shall provide notice to participants in The Peak
Technologies Group, Inc. Nonqualified Stock Option Plan, The Peak Technologies
Group, Inc. Incentive Stock Option Plan, The Peak Technologies Group Inc. 1995
Non-Employee Directors Stock Option Program and other holders of Options to
purchase Shares granted by the Company that Peak proposes to merge into another
corporation; that the Optionee under the plans or program may exercise his
Options in full for all shares not theretofore purchased by him within thirty
(30) days after such notice; and that the plans and program have been amended to
provide that to the extent an optionee does not exercise such Options within
thirty (30) days of the notice the optionee shall receive, in settlement of each
Option held by the optionee, a "Cash Amount" (less any applicable withholding
taxes) with respect to the number of previously unexercised Shares underlying
the Option immediately prior to the Effective Time. Each Option shall terminate
as of the Effective Time. The Cash Amount payable for each Option shall equal
the product of (i) the Merger Consideration minus the exercise price per Share
of each such Option and (ii) the number of previously unexercised Shares covered
by each such Option.
(c) Except as may be otherwise agreed to by Parent or Sub and the
Company, the Company's 1995 Non-Employee Directors Stock Option Program, the
Incentive Stock Option Plan and the Nonqualified Stock Option Plan (the "Option
Plans") shall terminate as of the Effective Time and the provisions in any other
plan, program or arrangement
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providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any of its Subsidiaries shall be deleted as of
the Effective Time.
(d) The Company shall use its best efforts so that following the
Effective Time no holder of employee stock options will have any right to
receive Shares upon exercise of an employee stock option.
(e) Outstanding purchase rights under the Company's Employees Stock
Purchase Plan and Global Employees Stock Purchase Plan (the "Company ESPPs")
shall be exercised upon the earlier of (i) the next scheduled purchase date
under the Company ESPPs or (ii) immediately prior to the Effective Time, and
each participant in the Company ESPPs shall accordingly be issued Shares at that
time which shall be canceled at the Effective Time and converted into the right
to receive the Merger Consideration (less any applicable withholding taxes) for
those Shares. The Company ESPPs shall terminate with such exercise date, and no
purchase rights shall be subsequently granted or exercised under the Company
ESPPs and any cash amounts held under the Company ESPPs and not applied to
acquire Shares shall be returned to the appropriate participants in such plans.
(f) Notwithstanding anything to the contrary herein, if it is
determined that compliance with any of the foregoing would cause any individual
subject to Section 16 of the Exchange Act to become subject to the profit
recovery provisions thereof, any Options held by such individual will be
canceled or purchased, as the case may be, at the Effective Time or at such
later time as may be necessary to avoid application of such profit recovery
provisions and such individual will be entitled to receive from the Company or
the Surviving Corporation an amount in cash or other consideration satisfactory
to the Surviving Corporation and such individual equal to the excess, if any, of
the Merger Consideration over the per Share exercise price of such Option
multiplied by the number of Shares subject thereto (less any applicable
withholding taxes), and the parties hereto will cooperate and take any and all
necessary actions so as to achieve the intent of the foregoing without giving
rise to such profit recovery.
(g) The Company shall give notice as promptly as permitted by the
terms thereof to each holder of a Transferrable Warrant dated as of July 20,
1993 (issued in connection with the acquisition of Concord Technologies, Inc. by
the Company) pursuant to Section 8(ii) thereof permitting such warrant holders
to exercise their warrants in full in accordance with the terms of Section 9
thereof.
SECTION 7.05. Directors. Promptly upon the acceptance for payment
of, and payment for, any Shares by Sub
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pursuant to the Offer, Sub shall be entitled to designate such number of
directors on the Board of Directors of the Company as will give Sub, subject to
compliance with Section 14(f) of the Exchange Act, a majority of such directors,
and the Company shall, at such time, cause Sub's designees to be so elected by
its existing Board of Directors; provided, however, that in the event that Sub's
designees are elected to the Board of Directors of the Company, until the
Effective Time such Board of Directors shall have at least two directors who are
directors on the date of the Agreement and who are not officers of the Company
(the "Independent Directors"); and provided further that, in such event, if the
number of Independent Directors shall be reduced below two for any reason
whatsoever, the remaining Independent Director shall designate a person to fill
such vacancy who shall be deemed to be an Independent Director for purposes of
the Agreement or, if no Independent Directors then remain, the other directors
shall designate two persons to fill such vacancies who shall not be officers or
affiliates of the Company or any of its subsidiaries, or officers or affiliates
of Parent or any of its subsidiaries, and such persons shall be deemed to be
Independent Directors for purposes of the Agreement. Subject to applicable law,
the Company shall take all action requested by Parent necessary to effect any
such election, including mailing to its stockholders the Information Statement
containing the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder, and the Company agrees to make such mailing
with the mailing of the Schedule 14D-9 (provided that Sub shall have provided to
the Company on a timely basis all information required to be included in the
Information Statement with respect to Sub's designees). In connection with the
foregoing, the Company will promptly, at the option of Parent, either increase
the size of the Company's Board of Directors and/or obtain the resignation of
such number of its current directors as is necessary to enable Sub's designees
to be elected or appointed to, and to constitute a majority of, the Company's
Board of Directors as provided above.
SECTION 7.06. Fees and Expenses. (a) Except as provided below in
this Section 7.06, all fees and expenses incurred in connection with the Offer,
the Merger, the Agreement and the transactions contemplated by the Agreement
shall be paid by the party incurring such fees or expenses, whether or not the
Offer or the Merger is consummated.
(b) If (w) the Company shall terminate this Agreement pursuant to
Section 9.01(d)(i), (x) Parent shall terminate this Agreement pursuant to
Section 9.01(c)(ii) hereof, or (y) either the Company or Parent terminates this
Agreement pursuant to Section 9.01(b)(i) and (a) prior thereto there shall have
been publicly announced another Takeover Proposal or an event set forth in
paragraph (i) of Annex A shall have occurred and (b) a Takeover Proposal shall
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be consummated on or prior to April 30, 1998, the Company shall pay to Parent,
an amount equal to $5.6 million (the "Termination Fee"), plus an amount, not to
exceed $1.0 million, equal to Parent's actual and reasonably documented
out-of-pocket fees and expenses incurred by Parent and Sub in connection with
the Offer, the Merger, this Agreement and the consummation of the transactions
contemplated hereby, which shall be payable in same day funds. The Termination
Fee and Parent's good faith estimate of its expenses shall be paid (1) in the
case of terminations referenced in subparts (w) and (x) above, concurrently with
any such termination and (2) in the case of termination referenced in subpart
(y) above, at the time of consummation of a Takeover Proposal as described in
subpart (y)(b) above, together in each case with delivery of a written
acknowledgment by the Company of its obligation to reimburse Parent for its
actual expenses in excess of such estimated expenses payment.
SECTION 7.07. Indemnification; Insurance. (a) Parent and Sub agree
that all rights to indemnification for acts or omissions occurring prior to the
Effective Time now existing in favor of the current or former directors or
officers (the "Indemnified Parties") of the Company and its subsidiaries as
provided in their respective certificates of incorporation or by-laws (or
similar organizational documents) or existing indemnification contracts as filed
with the Company Filed SEC Documents shall survive the Merger and shall continue
in full force and effect in accordance with their terms.
(b) For six years from the Effective Time, Parent shall, unless
Parent agrees in writing to guarantee the indemnification obligations set forth
in Section 7.07(a), maintain in effect the Company's current directors' and
officers' liability insurance covering those persons who are currently covered
by the Company's directors' and officers' liability insurance policy (a copy of
which has been heretofore delivered to Parent); provided, however, that in no
event shall Parent be required to expend in any one year an amount in excess of
200% of the annual premiums currently paid by the Company for such insurance
which the Company represents is not more than $175,000; and, provided, further,
that if the annual premiums of such insurance coverage exceed such amount,
Parent shall be obligated only to obtain a policy with the greatest coverage
available for a cost not exceeding such amount.
(c) This Section 7.07 shall survive the consummation of the Merger
at the Effective Time, is intended to benefit the Company, Parent, the Surviving
Corporation and the Indemnified Parties, and shall be binding on all successors
and assigns of Parent and the Surviving Corporation.
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SECTION 7.08. Certain Litigation. The Company agrees that it will
not settle any litigation commenced after the date hereof against the Company or
any of its directors by any stockholder of the Company relating to the Offer,
the Merger or the Agreement, without the prior written consent of Parent. In
addition, the Company will not voluntarily cooperate with any third party which
may hereafter seek to restrain or prohibit or otherwise oppose the Offer or the
Merger and will cooperate with Parent and Sub to resist any such effort to
restrain or prohibit or otherwise oppose the Offer or the Merger, unless the
Board of Directors of the Company determines in good faith, after consultation
with outside counsel, that failing so to cooperate with such third party or
cooperating with Parent or Sub, as the case may be, would constitute a breach of
the Board's fiduciary duties under applicable law.
ARTICLE VIII
CONDITIONS
SECTION 8.01. Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Company Stockholder Approval. If required by applicable law, the
Company Stockholder Approval shall have been obtained.
(b) No Injunctions or Restraints. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
Governmental Entity or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; provided, however, that each of
the parties shall have used reasonable efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any injunction
or other order that may be entered.
(c) Purchase of Shares. Sub shall have previously accepted for
payment and paid for Shares pursuant to the Offer.
(d) Competition Approvals. The applicable waiting periods under the
HSR Act and the German Competition Act shall have expired or been terminated.
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ARTICLE IX
TERMINATION AND AMENDMENT
SECTION 9.01. Termination. The Agreement may be terminated at any
time prior to the Effective Time, whether before or after approval of the terms
of the Agreement by the stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company
(i) if (x) as a result of the failure of any of the Offer
Conditions the Offer shall have terminated or expired in accordance with its
terms without Sub having accepted for payment any Shares pursuant to the Offer
or (y) Sub shall not have accepted for payment any Shares pursuant to the Offer
prior to November 23, 1997; provided, however, that the right to terminate the
Agreement pursuant to this Section 9.01(b)(i) shall not be available to any
party whose failure to perform any of its obligations under the Agreement
results in the failure of any such condition or if the failure of such condition
results from facts or circumstances that constitute a breach of representation
or warranty under the Agreement by such party; or
(ii) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the acceptance for payment of, or payment for, shares of
Company Common Stock pursuant to the Offer or the Merger and such order, decree
or ruling or other action shall have become final and nonappealable;
(c) by Parent or Sub
(i) prior to the purchase of Shares pursuant to the Offer in
the event of a breach by the Company of any representation, warranty, covenant
or other agreement contained in the Agreement which (i) would give rise to the
failure of a condition set forth in paragraph (e) or (f) of Exhibit A and (ii)
cannot be or has not been cured within 20 days after the giving of written
notice to the Company;
(ii) if either Parent or Sub is entitled to terminate the
Offer as a result of the occurrence of any event set forth in paragraph (d) of
Exhibit A to the Agreement; or
(iii) if, due to an occurrence, not involving a breach by
Parent or Sub of their obligations hereunder, which makes it impossible to
satisfy any of the
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conditions set forth in Annex A hereto, Parent, Sub or any of their affiliates
shall have failed to commence the Offer on or prior to five business days
following the date of the initial public announcement of the Offer;
(d) by the Company
(i) in connection with entering into a definitive agreement in
accordance with Section 6.02(b), provided it has complied with all provisions
thereof, including the notice provisions therein, and that it makes simultaneous
payment of the Termination Fee;
(ii) if Sub or Parent shall have breached in any material
respect any of their respective representations, warranties, covenants or other
agreements contained in the Agreement, which breach or failure to perform is
incapable of being cured or has not been cured within 20 days after the giving
of written notice to Parent or Sub, as applicable, except, in any case, such
breaches and failures which are not reasonably likely to affect adversely
Parent's or Sub's ability to complete the Offer or the Merger; or
(iii) if Parent, Sub or any of their affiliates shall have
failed to commence the Offer on or prior to five business days following the
date of the initial public announcement of the Offer; provided, that the Company
may not terminate the Agreement pursuant to this Section 9.01(d)(iii) if the
Company is at such time in breach of its obligations under the Agreement such as
to cause a material adverse effect on the Company and its Subsidiaries, taken as
a whole.
SECTION 9.02. Effect of Termination. In the event of a termination
of the Agreement by either the Company or Parent as provided in Section 9.01,
the Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Sub or the Company or their respective
officers or directors, except with respect to the last sentence of Section
1.02(c), Section 4.16, Section 5.06, the last sentence of Section 7.02, Section
7.06, this Section 9.02 and Article X; provided, however, that nothing herein
shall relieve any party for liability for any breach hereof.
SECTION 9.03. Amendment. The Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after obtaining the Company Stockholder Approval (if
required by law), but, after any such approval, no amendment shall be made which
by law requires further approval by such shareholders without obtaining such
further approval. The Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto. Following the election
or appointment of the Sub's designees
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pursuant to Section 7.05 and prior to the Effective Time, the affirmative vote
of a majority of the Independent Directors then in office shall be required by
the Company to (i) amend or terminate the Agreement by the Company, (ii)
exercise or waive any of the Company's rights or remedies under the Agreement or
(iii) extend the time for performance of Parent and Sub's respective obligations
under the Agreement.
SECTION 9.04. Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (iii) subject
to the proviso of Section 9.03, waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party to the
Agreement to assert any of its rights under the Agreement or otherwise shall not
constitute a waiver of those rights.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Nonsurvival of Representations and Warranties. The
representations and warranties in the Agreement or in any instrument delivered
pursuant to the Agreement shall terminate at the Effective Time or, in the case
of the Company, shall terminate upon the acceptance for payment of, and payment
for, Shares by Sub pursuant to the Offer, unless the survival thereof is
provided for by their terms.
SECTION 10.02. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed), sent by overnight courier (providing proof of
delivery) or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Parent or Sub, to:
Moore U.S.A. Inc.
100 N. Field Drive
Suite 220-B
One Conway Place
Lake Forest, Illinois 60045
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Attention: Joseph M. Duane, Esq.
Telecopy No.: (847) 615 5784
with a copy to:
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112
Attention: David M. Wilf, Esq.
Telecopy No.: (212) 541 5369
and
(b) if to the Company, to:
The Peak Technologies Group, Inc.
9200 Berger Road
Columbia, Maryland 21046
Attention: Dianne Sagner, Esq.
Telecopy No.: (410) 312 6080
with a copy to:
Milbank, Tweed, Hadley & McCloy
One Chase Manhattan Plaza
New York, New York 10005
Attention: John T. O'Connor, Esq.
Telecopy No.: (212) 530 5219
SECTION 10.03. Interpretation. When a reference is made in the
Agreement to an Article or a Section , such reference shall be to an Article or
a Section of the Agreement unless otherwise indicated. The table of contents and
headings contained in the Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of the Agreement. Whenever
the words "include", "includes" or "including" are used in the Agreement, they
shall be deemed to be followed by the words "without limitation". The phrase
"made available" in the Agreement shall mean that the information referred to
has been made available if requested by the party to whom such information is to
be made available. As used in the Agreement, the term "subsidiary" of any person
means another person, an amount of the voting securities, other voting ownership
or voting partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if there are no
such voting interests, 50% or more of the equity interests of which) is owned
directly or indirectly by such first person. As used in the Agreement, "material
adverse change" or "material adverse effect" means, when used in connection with
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the Company, any change or effect (or any development that, insofar as can
reasonably be foreseen, is likely to result in any change or effect) that,
individually or in the aggregate with any such other changes or effects, is
materially adverse to the business, financial condition or results of operations
of the Company and its subsidiaries taken as a whole. Notwithstanding the
foregoing, a material adverse change or material adverse effect shall not
include any material adverse change or material adverse effect caused by any
change resulting from the announcement of the Offer or the Merger.
SECTION 10.04. Counterparts. The Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
SECTION 10.05. Entire Agreement; Third Party Beneficiaries. The
Agreement (including the documents and the instruments referred to herein) (a)
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) except as provided in Section 7.07, are not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
SECTION 10.06. Governing Law. The Agreement shall be governed and
construed in accordance with the laws of the State of New York without regard to
any applicable conflicts of law, except to the extent the DGCL shall be held to
govern the terms of the Merger.
SECTION 10.07. Publicity. Except as otherwise required by law or the
rules of the NYSE or the Nasdaq National Market, for so long as the Agreement is
in effect, neither the Company nor Parent shall, or shall permit any of its
subsidiaries to, issue or cause the publication of any press release or other
public announcement with respect to the transactions contemplated by the
Agreement without the consent of the other party, which consent shall not be
unreasonably withheld.
SECTION 10.08. Assignment. Neither the Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to any
direct or indirect wholly owned subsidiary of Moore Corporation Limited. Subject
to the
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preceding sentence, the Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and assigns.
SECTION 10.09. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of the Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of the Agreement and to enforce
specifically the terms and provisions of the Agreement in any court of the
United States located in the State of Delaware or in a Delaware state court,
this being in addition to any other remedy to which they are entitled at law or
in equity. In addition, each of the parties hereto (i) consents to submit such
party to the personal jurisdiction of any Federal court located in the State of
Delaware or any Delaware state court in the event any dispute arises out of the
Agreement or any of the transactions contemplated hereby, (ii) agrees that such
party will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, (iii) agrees that such party will
not bring any action relating to the Agreement or any of the transactions
contemplated hereby in any court other than a Federal court sitting in the state
of Delaware or a Delaware state court and (iv) waives any right to trial by jury
with respect to any claim or proceeding related to or arising out of the
Agreement or any of the transactions contemplated hereby.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused
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the Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
MOORE U.S.A. INC.
By: /s/ Joseph M. Duane
------------------------
Name: Joseph M. Duane
Title: Vice President
Corporate Development
and General Counsel
By: ________________________
Name:
Title:
KIRKWOOD ACQUISITION CORP.
By: /s/ Joseph M. Duane
------------------------
Name: Joseph M. Duane
Title: President and
Director
By: ________________________
Name:
Title:
THE PEAK TECHNOLOGIES GROUP,
INC.
By: /s/ Nicholas R. H. Toms
------------------------
Name: Nicholas R. H. Toms
Title: Chairman of the
Board and Chief Executive
Officer
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EXHIBIT A
Conditions of the Offer
Notwithstanding any other term of the Offer or the Agreement, and in
addition to (and not in limitation of) Sub's right to extend and amend the Offer
at any time in its sole discretion (subject to the provisions of the Agreement),
Sub shall not be required to accept for payment or, subject to applicable rules
and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered Shares after the
termination or withdrawal of the Offer), to pay for, and may delay the
acceptance for payment of or, subject to the restriction referred to above, the
payment for, any Shares tendered pursuant to the Offer unless (i) there shall
have been validly tendered and not withdrawn prior to the expiration of the
Offer such number of Shares that would constitute a majority of the outstanding
Shares (determined on a fully diluted basis for all outstanding stock options
and any other rights to acquire Shares) (the "Minimum Condition") and (ii) any
waiting period under the HSR Act and the German Competition Act applicable to
the purchase of Shares pursuant to the Offer shall have expired or been
terminated. Furthermore, notwithstanding any other term of the Offer or the
Agreement, Sub shall not be required to accept for payment or, subject as
aforesaid, to pay for any Shares not theretofore accepted for payment or paid
for, and may terminate the Offer if, at any time on or after the date of the
Agreement and before the acceptance of such Shares for payment or the payment
therefor, any of the following conditions exists:
(a) there shall be threatened, instituted or pending by any person
or Governmental Entity any suit, action, investigation or proceeding (i)
challenging the acquisition by Parent or Sub of any Shares under the Offer or
seeking to restrain or prohibit the making or consummation of the Offer or the
Merger or the performance of any of the other transactions contemplated by the
Agreement, or seeking to obtain from the Company, Parent or Sub any damages that
are material in relation to the Company and its subsidiaries taken as a whole,
(ii) seeking to prohibit or impose any material limitations on Parent's or Sub's
ownership or operation (or that of any of their respective Subsidiaries or
affiliates) of all or a material portion of their or the Company's businesses or
assets, or to compel Parent or Sub or their respective Subsidiaries and
affiliates to dispose of or hold separate any material portion of the business
or assets of the Company or Parent and their respective Subsidiaries, in each
case taken as a whole, (ii) challenging the acquisition by Parent or Sub of any
Shares under the Offer, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or the performance of any of the
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other transactions contemplated by the Agreement, or seeking to obtain from the
Company, Parent or Sub any damages that are material in relation to the Company
and its subsidiaries taken as a whole, (iii) seeking to impose material
limitations on the ability of Sub, or render Sub unable, to accept for payment,
pay for or purchase some or all of the Shares pursuant to the Offer and the
Merger, (iv) seeking to impose material limitations on the ability of Sub or
Parent effectively to exercise full rights of ownership of the Shares,
including, without limitation, the right to vote the Shares purchased by it on
all matters properly presented to the Company's stockholders, or (v) which
otherwise is reasonably likely to have a material adverse effect on the Company;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to the
Offer or the Merger, or any other action shall be taken by any Governmental
Entity or court, other than the application to the Offer or the Merger of
applicable waiting periods under the HSR Act or the German Competition Act that
is reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above;
(c) there shall have occurred any events after the date of the
Agreement that, either individually or in the aggregate, have caused or are
reasonably likely to cause a material adverse change with respect to the Company
other than a change resulting from the announcement of the Offer or the Merger;
(d)(i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent or Sub
its approval or recommendation of the Offer, the Merger or the Agreement, or
approved or recommended any Takeover Proposal, (ii) the Company shall have
entered into any agreement with respect to any Superior Proposal in accordance
with Section 6.02(b) of the Agreement or (iii) the Board of Directors of the
Company or any committee thereof shall have resolved to take any of the
foregoing actions;
(e) any of the representations and warranties of the Company set
forth in the Agreement that are qualified as to materiality shall not be true
and correct or any such representations and warranties that are not so qualified
shall not be true and correct in any material respect, in each case at the date
of the Agreement and at the scheduled or extended expiration of the Offer;
(f) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any material
agreement or covenant
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of the Company to be performed or complied with by it under the Agreement;
(g) the Agreement shall have been terminated in accordance with its
terms;
(h) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock Exchange
or on NASDAQ, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) a commencement of a
war, armed hostilities or other international or national calamity directly
involving in the armed forces of the United States, (iv) any general limitation
(whether or not mandatory) by any governmental authority on the extension of
credit by banks or other lending institutions, (v) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof, (vi) a decline of at least twenty percent
(20%) in the Dow Jones Industrial Average or the Standard and Poors 500 Index
from the date of the Agreement to the expiration or termination of the Offer or
(vii) a change in general financial, bank or capital market conditions which
materially and adversely affects the ability of financial institutions in the
United States to extend credit or syndicate loans; or
(i) any person acquires beneficial ownership (as defined in Rule
13d-3 promulgated under the Exchange Act), of at least 20% of the outstanding
Common Stock of the Company (other than any person not required to file a
Schedule 13D under the rules promulgated under the Exchange Act).
The foregoing conditions are for the sole benefit of Parent and Sub,
may be asserted by Parent or Sub regardless of the circumstances giving rise to
such condition (including any action or inaction by Parent or Sub not in
violation of the Agreement) and may be waived by Parent or Sub in whole or in
part at any time and from time to time in the sole discretion of Parent or Sub,
subject in each case to the terms of the Agreement. The failure by Parent or Sub
at any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time.
50
