UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
DecisionOne Holdings Corp.
(Name of Issuer)
Common Stock, $.01 par value per share
(Title of Class of Securities)
243458 10 0
(CUSIP Number)
David P. Kreisler, Esq.
Hutchins, Wheeler & Dittmar, 101 Federal Street, Boston, MA 02110 (617) 951-6600
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 7, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 243458 10 0
1. NAME OF REPORTING PERSON - Thomas H. Lee Equity Fund III, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - 04-3279871
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) [ ]
6.CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. SOLE VOTING POWER
695,016
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 695,016
PERSON WITH
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
695,016
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6%
14. TYPE OF REPORTING PERSON
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 243458 10 0
1. NAME OF REPORTING PERSON - Thomas H. Lee Foreign Fund III, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - 04-3303055
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) [ ]
6.CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. SOLE VOTING POWER
43,006
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 43,006
PERSON WITH
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
43,006
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.3%
14. TYPE OF REPORTING PERSON
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 243458 10 0
1. NAME OF REPORTING PERSON - Thomas H. Lee Equity Advisors III Limited
Partnership
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - 04-3279882
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
N/A
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) [ ]
6.CITIZENSHIP OR PLACE OF ORGANIZATION
Massachusetts
7. SOLE VOTING POWER
0
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 738,022
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 0
PERSON WITH
10. SHARED DISPOSITIVE POWER
738,022
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
738,022
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.0%
14. TYPE OF REPORTING PERSON
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 243458 10 0
1. NAME OF REPORTING PERSON - THL Equity Trust III
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - 04-3279892
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
N/A
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) [ ]
6.CITIZENSHIP OR PLACE OF ORGANIZATION
Massachusetts
7. SOLE VOTING POWER
0
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 738,022
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 0
PERSON WITH
10. SHARED DISPOSITIVE POWER
738,022
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
738,022
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.0%
14. TYPE OF REPORTING PERSON
OO
<PAGE>
SCHEDULE 13D
CUSIP No. 243458 10 0
1. NAME OF REPORTING PERSON - THL Co-Investors III-A, LLC
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - 04-3361519
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) [ ]
6.CITIZENSHIP OR PLACE OF ORGANIZATION
Massachusetts
7. SOLE VOTING POWER
43,910
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 43,910
PERSON WITH
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
43,910
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.4%
14. TYPE OF REPORTING PERSON
CO
<PAGE>
SCHEDULE 13D
CUSIP No. 243458 10 0
1. NAME OF REPORTING PERSON - THL Co-Investors III-B, LLC
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - 04-3361521
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) [ ]
6.CITIZENSHIP OR PLACE OF ORGANIZATION
Massachusetts
7. SOLE VOTING POWER
28,185
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 28,185
PERSON WITH
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
28,185
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.2%
14. TYPE OF REPORTING PERSON
CO
<PAGE>
SCHEDULE 13D
Item 1. Security and Issuer
The class of equity securities to which this statement relates is the
common stock, $0.01 par value per share (the "Shares") of DecisionOne Holdings
Corp., a Delaware corporation ("DecisionOne"). The principal executive offices
of DecisionOne are located at 50 East Swedesford Road, Frazer, Pennsylvania,
19355.
Item 2. Identity and Background.
(a) - (c) and (f)
This Schedule 13D is being filed jointly on behalf of the following
persons (collectively, the "Reporting Persons"): (1) Thomas H. Lee Equity Fund
III, L.P., a Delaware limited partnership ("Equity Fund III"), (2) Thomas H. Lee
Foreign Fund III, L.P., a Delaware limited partnership ("Foreign Fund III"), (3)
Thomas H. Lee Equity Advisors III Limited Partnership, a Massachusetts limited
partnership ("Advisors III"), (4) THL Equity Trust III, a Massachusetts business
trust ("Trust III"), (5) THL Co-Investors III-A, LLC, a Massachusetts limited
liability corporation ("Investors III-A") and (6) THL Co-Investors III-B, LLC, a
Massachusetts limited liability corporation ("Investors III-B").
The address of each of the Reporting Persons is c/o Thomas H. Lee
Company, 75 State Street, Boston, Massachusetts 02109.
Each of Equity Fund III, Foreign Fund III, Investors III-A and
Investors III-B are principally engaged in the business of investment in
securities. Advisors III is principally engaged in the business of serving as
general partner of Equity Fund III and Foreign Fund III. Trust III is
principally engaged in the business of serving as general partner of Advisors
III.
Due to an existing arrangement between Equity Fund III, Advisors III
and Trust III, each of Equity Fund III, Advisors III and Trust III could be
deemed to be the beneficial owner of all Shares beneficially owned by Equity
Fund III. Advisors III and Trust III each disclaim beneficial ownership of such
Shares.
Due to an existing arrangement between Foreign Fund III, Advisors III
and Trust III, each of Foreign Fund III, Advisors III and Trust III could be
deemed to be the beneficial owner of all Shares beneficially owned by Foreign
Fund III. Advisors III and Trust III each disclaim beneficial ownership of such
Shares.
Attached as Schedule A to this Schedule 13D is information concerning
the Reporting Persons and other persons and entities as to which such
information is required to be disclosed in response to Item 2 and General
Instruction C to Schedule 13D.
<PAGE>
(d) and (e)
None of the Reporting Persons or any of their officers or trustees has
been convicted in a criminal proceeding during the past five years (excluding
traffic violations and similar misdemeanors).
None of the Reporting Persons or any of their officers or trustees has
been party to a civil proceeding of a judicial or administrative body of
competent jurisdiction during the past five years as a result of which it was or
is subject to a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to the Subscription Agreement and the Merger Agreement (both
as defined below in Item 4), the total consideration paid by Equity Fund III,
Foreign Fund III, Investors IIIA and Investors III-B (collectively, the "THL
Entities") in connection with their purchase of the Shares was $16,694,380.25
The acquisition of the Shares is described below in Item 4.
The THL Entities obtained funds to make the purchase described herein
through capital contributions from their investors.
Item 4. Purpose of Transactions.
The THL Entities entered into the Agreements (as defined below) to
purchase the Shares for general investment purposes. The THL Entities retain the
right to change their investment intent. Subject to market conditions and other
factors, the THL Entities may acquire or dispose of shares of DecisionOne from
time to time in future open-market, privately negotiated or other transactions,
may enter into agreements with third parties relating to acquisitions of
securities issued or to be issued by the Surviving Corporation, may enter into
agreements with the management of DecisionOne relating to acquisitions of shares
of the Surviving Corporation by members of management, insurances of options to
management or their employment by the surviving corporation, or may effect other
similar agreements or transactions.
Except as set forth herein, the Reporting Persons do not have any plans
or proposals which would relate to or result in any of the transactions
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
On May 4, 1997, DecisionOne and Quaker Holding Co. ("Quaker"), a
Delaware corporation that, as of May 4, 1997, was wholly-owned by certain funds
affiliated with Donaldson, Lufkin & Jenrette, Inc., entered into an Agreement
and Plan of Merger (as amended on July 15, 1997, the "Merger Agreement,"
attached hereto as Exhibit 2). The Merger Agreement provides, among other
things, for the merger of Quaker with and into DecisionOne
<PAGE>
(the "Merger"), with DecisionOne as the surviving corporation (the "Surviving
Corporation"). The Merger contemplates that approximately 94.7% of the issued
and outstanding Shares of DecisionOne will be converted into cash and that
approximately 5.3% of such Shares will be retained by existing stockholders. The
transactions contemplated by the Merger Agreement were approved by the
stockholders of DecisionOne and were consummated, in each case, on August 7,
1997. From and after the Effective Time (as defined below), the Surviving
Corporation will possess all the rights, privileges, powers and franchises and
be subject to all of the restrictions, disabilities and duties of the Company
and Quaker, all as provided under Delaware Law.
Pursuant to the terms of the Merger Agreement, on August 7, 1997 (the
"Closing Date"), DecisionOne Holdings Corp. filed a Certificate of Merger with
the Secretary of the State of Delaware, and the Merger was effective as of the
filing of such certificate (the "Effective Time"). In connection therewith,
immediately prior to the Effective Time, Quaker entered into a Subscription
Agreement (the "Subscription Agreement") (attached hereto and made a part hereof
as Exhibit 3) with DLJ Merchant Banking Partners II, L.P., DLJ Merchant Banking
Partners II-A, L.P., DLJ Offshore Partners, L.P., DLJ Diversified Partners,
L.P., DLJ Diversified Partners-A, L.P., DLJ Millennium Partners, L.P., DLJ
Millennium Partners-A, L.P., DLJMB Funding II, Inc., DLJ First ESC, L.L.C., DLJ
EAB Partners, L.P., UK investment Plan 1997 Partners (collectively, the
"DLJMB Funds"), Apollo Investment Fund III, L.P., Apollo Overseas Partners
III, L.P., Apollo (U.K.) Partners III, L.P. (collectively, "Apollo"), Bain
Capital Fund V, L.P., Bain Capital Fund V-B, L.P., BCIP Trust Associates
(collectively, "Bain"), the THL Entities, DLJ Capital Corporation ("DLJCC"),
Sprout and Sprout CEO (collectively, "Sprout") and Ontario Teachers' Pension
Plan Fund ("Teachers", and collectively with Apollo, Bain, THL and
Sprout, the "Institutional Investors"), dated August 7, 1997, pursuant to which
the DLJMB Funds and the Institutional Investors purchased shares of Common
Stock of Quaker on the Terms set forth in the Subscription Agreement. Upon
consummation of the Merger and the purchase of the Shares, the percentage
ownership of the outstanding Shares is as follows: (1) DLJMB Funds, 60.6%;
(2) Apollo, 6.5%; (3) Bain 6.5%; (4) THL Entities 6.5%; (5) Sprout,
3.8%; and (6) Teachers, 4.0%.
In addition, DecisionOne, the DLJMB Funds, the Institutional Investors
and certain members of DecisionOne management (the "Management Shareholders"),
have entered into an Investors' Agreement dated as of August 7, 1997 (the
"Investors' Agreement") (attached hereto and made part hereof as Exhibit 4). The
Investors' Agreement together with the Merger Agreement and the Subscription
Agreement are sometimes referred to herein as the "Agreements."
The Investors' Agreement provides that subject to certain ownership
levels, the Institutional Investors will have certain corporate governance
rights and that (i) the Board of Directors of DecisionOne will comprise seven
members, four of which will be nominated by the DLJMB Funds, two of which will
be independent directors satisfactory to the DLJMB Funds and one of which will
be nominated by the Management Shareholders; and (ii) the Institutional
<PAGE>
Investors will have certain tag-along rights, drag-along rights and registration
rights with respect to the Shares (each as defined in the Investors' Agreement).
The Investors' Agreement also provides certain restrictions regarding the
investment made by the Management Shareholders as more fully described therein.
Further, the Investors' Agreement provides for certain subscription rights in
the event DecisionOne proposes to issue equity securities.
Each of the Agreements is filed as an exhibit to this Schedule 13D and
is incorporated herein by reference. The foregoing descriptions of the
Agreements are qualified in their entirety by reference to such exhibits.
Item 5. Interest in Securities of the Issuer.
Equity Fund III has acquired 695,016 Shares pursuant to the
Subscription Agreement and the Merger Agreement, representing approximately 5.6%
of the outstanding Shares as of August 8, 1997 (the "Outstanding Shares").
Equity Fund III has, subject to the Agreements, sole voting and sole dispositive
power with respect to such Shares.
Foreign Fund III has acquired 43,066 Shares pursuant to the
Subscription Agreement and the Merger Agreement, representing approximately 0.3%
of the Outstanding Shares. Foreign Fund III has, subject to the Agreements, sole
voting and sole dispositive power with respect to such Shares.
Investors III-A has acquired 28,185 Shares pursuant to the Subscription
Agreement and the Merger Agreement, representing approximately 0.4% of the
Outstanding Shares. Investors III-A has, subject to the Agreements, sole voting
and sole dispositive power with respect to such Shares.
Investors III-B has acquired 43,066 Shares pursuant to the Subscription
Agreement and the Merger Agreement, representing approximately 0.3% of the
Outstanding Shares. Investors III-B has, subject to the Agreements, sole voting
and sole dispositive power with respect to such Shares.
Each of Advisors III and Trust III may be deemed, pursuant to the
attribution rules of Rule 13d-3 of the Exchange Act, to be the beneficial owner
of 738,022 Shares, representing approximately 6.0% of the Outstanding Shares.
Each of Advisors III and Trust III disclaim beneficial ownership of such Shares.
The statements in this Schedule 13D shall not be construed as an
admission that a Reporting Person is the beneficial owner of any of the Shares
other than those which such Reporting Person has acquired pursuant to the
Agreements.
<PAGE>
In addition, by virtue of the Agreements, each of the Reporting
Persons may be deemed to share voting and dispositive power with respect to the
Shares. The Reporting Persons disclaim the existence of such shared power.
(c) The responses to Items 3 and 4 of this Schedule 13D are incorporated
herein.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
The responses to Items 3, 4, and 5 of this Schedule 13D and the
Exhibits to this Schedule 13D are incorporated herein by reference.
Except for the agreements described in the response to Item 4, to the
best of knowledge of the Reporting Persons, there are no contracts,
arrangements, understandings or relationships (legal or otherwise) between the
persons enumerated in Item 2, and any other person, with respect to any
securities of DecisionOne, including, but not limited to, transfer or voting of
any of the securities, finder's fees, joint ventures, loan or option
arrangements, put or calls, guarantees of profits division of profits or less,
or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit 1: Joint filing agreement among the Reporting Persons
Exhibit 2: Agreement and Plan of Merger dated as of May 4, 199
between DecisionOne Holdings Corp. and Quaker
Holding Co.
Exhibit 3: Subscription Agreement dated as of August 7, 1997
among Quaker Holding Co. and the buyers named
therein.
Exhibit 4: Investors' Agreement dated as of August 7, 1997
among DecisionOne Holdings Corp., the DLJ Funds and
certain other persons named therein.
<PAGE>
Schedule A
Each of the following individuals is a United States citizen, and is
employed by the Thomas H. Lee Company, 75 State Street, Boston, Massachusetts,
02109.
THL Equity Trust
Officers:
Chairman Thomas H. Lee
1 Old Farm Road, Lincoln, MA 01773
President David V. Harkins
8 Corn Point Road, Marblehead, MA 01945
Vice Presidents C. Hunter Boll
45 Fletcher Street, Winchester, MA 01890
Thomas R. Shepherd
172 Harvard Road, Stow, MA 01775
Anthony J. DiNovi
167 Commonwealth Avenue,#9, Boston, MA 02116
Thomas M. Hagerty
256 Beacon Street, Apt. #4, Boston, MA 02116
Joseph J. Incandela
139 Abbott Road, Wellesley Hills, MA 02181
Scott A. Schoen
65 Laurel Road, Weston, MA 02193
Warren C. Smith, Jr.
38 Coolidge Lane, Dedham, MA 02026
Scott M. Sperling
4 Moore Road, Wayland, MA 01778
Seth W. Lawry
330 Dartmouth Street, Apt.#7S,
Boston, MA 02116
<PAGE>
Treasurer Wendy L. Masler
11 Waverly Street, #3, Brookline, MA 02115
Assistant Treasurer Andrew D. Flaster
69 Wilshire Park, Needham, MA 02192
Clerk Wendy L. Masler
11 Waverly Street, #3, Brookline, MA 02115
Assistant Clerks Charles W. Robins, Esq.
50 Lehigh Road, Wellesley, MA 02181
Jeffrey S. Wieand, Esq.
1695 Lowell Road, Concord, MA 01742
Trustees:
Thomas H. Lee 1 Old Farm Road, Lincoln, MA 01773
David V. Harkins 8 Corn Point Road, Marblehead, MA 01945
C. Hunter Boll 45 Fletcher Street, Winchester, MA 01890
Thomas R. Shepherd 172 Harvard Road, Stow, MA 01775
Anthony J. DiNovi 167 Commonwealth Avenue, #9, Boston, MA 02116
Thomas M. Hagerty 256 Beacon Street, Apt. #4, Boston, MA 02116
Warren C. Smith, Jr. 38 Coolidge Lane, Dedham, MA 02026
Scott M. Sperling 4 Moore Road, Wayland, MA 01778
THL Co-Investors III-A, LLC
Officers:
Chairman Thomas H. Lee
1 Old Farm Road, Lincoln, MA 01773
President David V. Harkins
8 Corn Point Road, Marblehead, MA 01945
Vice Presidents C. Hunter Boll
45 Fletcher Street, Winchester, MA 01890
Thomas R. Shepherd
172 Harvard Road, Stow, MA 01775
<PAGE>
Anthony J. DiNovi
167 Commonwealth Avenue,#9,Boston, MA 02116
Thomas M. Hagerty
256 Beacon Street, Apt.#4, Boston, MA 02116
Joseph J. Incandela
139 Abbott Road, Wellesley Hills, MA 02181
Scott A. Schoen
65 Laurel Road, Weston, MA 02193
Warren C. Smith, Jr.
38 Coolidge Lane, Dedham, MA 02026
Scott M. Sperling
4 Moore Road, Wayland, MA 01778
Seth W. Lawry
330 Dartmouth Street, Apt.#7S,
Boston, MA 02116
Treasurer Wendy L. Masler
11 Waverly Street, #3, Brookline, MA 02115
Assistant Treasurer Andrew D. Flaster
69 Wilshire Park, Needham, MA 02192
Clerk Wendy L. Masler
11 Waverly Street, #3, Brookline, MA 02115
Assistant Clerks Charles W. Robins, Esq.
50 Lehigh Road, Wellesley, MA 02181
Jeffrey S. Wieand, Esq.
1695 Lowell Road, Concord, MA 01742
THL Co-Investors III-B, LLC
Officers:
Chairman Thomas H. Lee
1 Old Farm Road, Lincoln, MA 01773
<PAGE>
President David V. Harkins
8 Corn Point Road, Marblehead, MA 01945
Vice Presidents C. Hunter Boll
45 Fletcher Street, Winchester, MA 01890
Thomas R. Shepherd
172 Harvard Road, Stow, MA 01775
Anthony J. DiNovi
167 Commonwealth Avenue,#9, Boston, MA 02116
Thomas M. Hagerty
256 Beacon Street, Apt.#4, Boston, MA 02116
Joseph J. Incandela
139 Abbott Road, Wellesley Hills, MA 02181
Scott A. Schoen
65 Laurel Road, Weston, MA 02193
Warren C. Smith, Jr.
38 Coolidge Lane, Dedham, MA 02026
Scott M. Sperling
4 Moore Road, Wayland, MA 01778
Seth W. Lawry
330 Dartmouth Street, Apt.#7S,
Boston, MA 02116
Treasurer Wendy L. Masler
11 Waverly Street, #3, Brookline, MA 02115
Assistant Treasurer Andrew D. Flaster
69 Wilshire Park, Needham, MA 02192
Clerk Wendy L. Masler
11 Waverly Street, #3, Brookline, MA 02115
Assistant Clerks Charles W. Robins, Esq.
50 Lehigh Road, Wellesley, MA 02181
Jeffrey S. Wieand, Esq.
1695 Lowell Road, Concord, MA 01742
<PAGE>
Signatures
After reasonable inquiry and to the best knowledge and belief of each
of the undersigned, such person certifies that the information set forth in this
Statement with respect to such person is true, complete and correct.
THOMAS H. LEE EQUITY FUND III, L.P.
By: THL Equity Advisors III Limited Partnership,
its General Partner
By: THL Equity Trust III, its General Partner
By: /s/ Scott A. Schoen
Name: Scott A. Schoen
Title: Vice President
THOMAS H. LEE FOREIGN FUND III, L.P.
By: THL Equity Advisors III Limited Partnership,
its General Partner
By: THL Equity Trust III, its General Partner
By: /s/ Scott A. Schoen
Name: Scott A. Schoen
Title: Vice President
THOMAS H. LEE EQUITY ADVISORS III
LIMITED PARTNERSHIP
By: THL Equity Trust III, its General Partner
By: /s/ Scott A. Schoen
Name: Scott A. Schoen
Title: Vice President
THL EQUITY TRUST III
By: /s/ Scott A. Schoen
Name: Scott A. Schoen
Title: Vice President
<PAGE>
THL CO-INVESTORS III-A, LLC
By: /s/ Scott A. Schoen
THL CO-INVESTORS III-B, LLC
By: /s/ Scott A. Schoen
<PAGE>
Exhibit 1 to Schedule 13D for
DecisionOne Holdings Corp.
AGREEMENT
Agreement made this 21st day of August, 1997, by and between each of
the undersigned.
WHEREAS, each of the undersigned is required to file a Schedule 13D
with respect to ownership of securities in DecisionOne Holdings Corp.; and
WHEREAS, each of the undersigned is individually eligible to use this
Schedule 13D;
NOW, THEREFORE, the undersigned agree to file only one Schedule 13D
reflecting their combined beneficial ownership of securities in DecisionOne
Holdings Corp.
THOMAS H. LEE EQUITY FUND III, L.P.
By: THL Equity Advisors III Limited Partnership,
its General Partner
By: THL Equity Trust III, its General Partner
By: /s/ Scott A. Schoen
Name: Scott A. Schoen
Title: Vice President
THOMAS H. LEE FOREIGN FUND III, L.P.
By: THL Equity Advisors III Limited Partnership,
its General Partner
By: THL Equity Trust III, its General Partner
By: /s/ Scott A. Schoen
Name: Scott A. Schoen
Title: Vice President
<PAGE>
THOMAS H. LEE EQUITY ADVISORS III
LIMITED PARTNERSHIP
By: THL Equity Trust III, its General Partner
By: /s/ Scott A. Schoen
Name: Scott A. Schoen
Title: Vice President
THL EQUITY TRUST III
By: /s/ Scott A. Schoen
Name: Scott A. Schoen
Title: Vice President
THL CO-INVESTORS III-A, LLC
By: /s/ Scott A. Schoen
THL CO-INVESTORS III-B, LLC
By: /s/ Scott A. Schoen
CONFORMED COPY
EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
dated as of
May 4, 1997
among
DECISIONONE HOLDINGS CORP.
and
QUAKER HOLDING CO.
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<TABLE>
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TABLE OF CONTENTS<F1>
PAGE
<S> <C>
ARTICLE 1
THE MERGER
SECTION 1.01. The Merger.......................................................................1
SECTION 1.02. Conversion (or Retention) of Shares..............................................2
SECTION 1.03. Elections........................................................................3
SECTION 1.04. Proration of Election Price......................................................5
SECTION 1.05. Surrender and Payment............................................................6
SECTION 1.06. Dissenting Shares................................................................8
SECTION 1.07. Stock Options....................................................................9
SECTION 1.08. Warrants.........................................................................9
SECTION 1.09. Fractional Shares...............................................................10
ARTICLE 2
THE SURVIVING CORPORATION
SECTION 2.01. Certificate of Incorporation....................................................10
SECTION 2.02. Bylaws .........................................................................10
SECTION 2.03. Directors and Officers..........................................................10
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Corporate Existence and Power...................................................11
SECTION 3.02. Corporate Authorization.........................................................11
SECTION 3.03. Governmental Authorization......................................................11
SECTION 3.04. Non-contravention...............................................................12
SECTION 3.05. Capitalization..................................................................12
SECTION 3.06. Subsidiaries....................................................................13
SECTION 3.07. SEC Filings.....................................................................14
SECTION 3.08. Financial Statements............................................................14
SECTION 3.09. Disclosure Documents............................................................15
SECTION 3.10. Absence of Certain Changes......................................................16
SECTION 3.11. No Undisclosed Material Liabilities.............................................17
SECTION 3.12. Litigation......................................................................17
SECTION 3.13. Taxes .........................................................................18
SECTION 3.14. ERISA .........................................................................19
SECTION 3.15. Employees.......................................................................21
SECTION 3.16. Labor Matters...................................................................21
SECTION 3.17. Compliance with Laws and Court Orders...........................................22
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<F1>The Table of Contents is not a part of this Agreement.
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SECTION 3.18. Licenses and Permits............................................................22
SECTION 3.19. Repairable Parts................................................................22
SECTION 3.20. Intellectual Property...........................................................22
SECTION 3.21. Finders' Fees...................................................................23
SECTION 3.22. Inapplicability of Certain Restrictions.........................................23
SECTION 3.23. Rights Plan.....................................................................23
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF MERGERSUB
SECTION 4.01. Corporate Existence and Power...................................................24
SECTION 4.02. Corporate Authorization.........................................................24
SECTION 4.03. Governmental Authorization......................................................24
SECTION 4.04. Non-contravention...............................................................24
SECTION 4.05. Disclosure Documents............................................................25
SECTION 4.06. Finders' Fees...................................................................25
SECTION 4.07. Financing.......................................................................25
SECTION 4.08. Capitalization..................................................................26
ARTICLE 5
COVENANTS OF THE COMPANY
SECTION 5.01. Conduct of the Company..........................................................27
SECTION 5.02. Stockholder Meeting; Proxy Material.............................................29
SECTION 5.03. Access to Information...........................................................29
SECTION 5.04. Other Offers....................................................................30
SECTION 5.05. Notices of Certain Events.......................................................33
SECTION 5.06. Resignation of Directors........................................................33
SECTION 5.07. Preferred Stock.................................................................33
SECTION 5.08. Solvency Advice.................................................................33
ARTICLE 6
COVENANTS OF MERGERSUB
SECTION 6.01. SEC Filings.....................................................................34
SECTION 6.02. Voting of Shares................................................................34
SECTION 6.03. Director and Officer Liability..................................................34
SECTION 6.04. Employee Plans and Benefit Arrangements.........................................35
SECTION 6.05. Financing.......................................................................36
SECTION 6.06. NASDAQ Listing..................................................................36
SECTION 6.07. Access to Information...........................................................36
ARTICLE 7
COVENANTS OF MERGERSUB AND THE COMPANY
SECTION 7.01. Best Efforts....................................................................36
SECTION 7.02. Certain Filings.................................................................37
<PAGE>
SECTION 7.03. Public Announcements............................................................38
SECTION 7.04. Further Assurances..............................................................38
ARTICLE 8
CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Obligations of Each Party.....................................38
SECTION 8.02. Conditions to the Obligations of MergerSub......................................39
SECTION 8.03. Condition to the Obligation of the Company......................................41
ARTICLE 9
TERMINATION
SECTION 9.01. Termination.....................................................................42
SECTION 9.02. Effect of Termination...........................................................43
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices........................................................................43
SECTION 10.02. Survival of Representations and Warranties.....................................44
SECTION 10.03. Amendments; No Waivers.........................................................44
SECTION 10.04. Expenses.......................................................................45
SECTION 10.05. Successors and Assigns; Benefit................................................45
SECTION 10.06. Governing Law..................................................................45
SECTION 10.07. Counterparts; Effectiveness....................................................45
SECTION 10.08. Knowledge Defined..............................................................46
Exhibit A Amendments to the Company's Certificate of Incorporation
</TABLE>
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of May 4, 1997 among DecisionOne
Holdings Corp., a Delaware corporation (the "Company") and Quaker Holding Co., a
Delaware corporation ("MergerSub").
W I T N E S S E T H:
WHEREAS, as of the date of execution of this Agreement, all of the
outstanding capital stock of, or other ownership interest in, MergerSub is
owned, in the aggregate, by DLJ Merchant Banking Partners II, L.P., DLJ Offshore
Partners II, C.V., DLJ Diversified Partners, L.P., DLJMB Funding II, Inc., UK
Investment Plan 1997 Partners and DLJ First ESC LLC;
WHEREAS, MergerSub is unwilling to enter into this Agreement unless,
contemporaneously with the execution and delivery of this Agreement, certain
beneficial and record stockholders of the Company enter into a Voting Agreement
and Irrevocable Proxy providing for certain actions relating to certain of the
shares of common stock, options and warrants of the Company owned by them;
WHEREAS, MergerSub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger (as defined in Section 1.01) and also to prescribe certain conditions to
the Merger;
WHEREAS, it is intended that the Merger be recorded as a
recapitalization for financial reporting purposes and both parties, after
discussion with their auditors, believe that the Merger is eligible for such
accounting treatment;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.01. The Merger. (a) At the Effective Time, MergerSub shall be
merged (the "Merger") with and into the Company in accordance with the Delaware
Law, and in accordance with the terms and conditions hereof, whereupon the
separate existence of MergerSub shall cease, and the Company shall be the
surviving corporation (the "Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the extent permitted
hereunder, waiver of all conditions to the Merger, the Company and MergerSub
<PAGE>
will file a certificate of merger with the Secretary of State of the State of
Delaware and make all other filings or recordings required by Delaware Law in
connection with the Merger. The Merger shall become effective at such time as
the certificate of merger is duly filed with the Secretary of State of the State
of Delaware or at such later time as is specified in the certificate of merger
(the "Effective Time").
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, privileges, powers and franchises and be subject to all
of the restrictions, disabilities and duties of the Company and MergerSub, all
as provided under Delaware Law.
(d) The Company hereby represents that its Board of Directors, at a
meeting duly called and held and acting on the unanimous recommendation of the
Board of Directors of the Company, other than any directors expected to become
affiliated with MergerSub, has (i) determined that this Agreement and the
transactions contemplated hereby, including the Merger, are fair to and in the
best interest of the Company's stockholders, (ii) approved this Agreement and
the transactions contemplated hereby, including the Merger, which approval
satisfies in full the requirements of the General Corporation Law of the State
of Delaware (the "Delaware Law") including, without limitation, Section 203
thereof with respect to the transactions contemplated hereby, and (iii) resolved
to recommend approval and adoption of this Agreement and the Merger by its
stockholders. The Company further represents that Smith Barney Inc. has
delivered to the Company's Board of Directors its opinion that the consideration
to be paid in the Merger is fair to the holders of shares of common stock of the
Company, par value $0.01 per share (each, a "Share"), from a financial point of
view.
SECTION 1.02. Conversion (or Retention) of Shares. At the Effective
Time:
(a) each Share held by the Company as treasury stock or owned by
MergerSub immediately prior to the Effective Time shall be canceled, and no
payment shall be made with respect thereto;
(b) each share of common stock, par value $.01 per share, of MergerSub
("MergerSub Common Stock") outstanding immediately prior to the Effective Time
shall be converted into and become 1 share of common stock of the Surviving
Corporation with the same rights, powers and privileges as the shares so
converted;
(c) each share of preferred stock, par value $.01 per share, of
MergerSub ("MergerSub Preferred Stock"), if any, outstanding immediately prior
to the Effective Time shall be converted into and become 1 share of preferred
stock of the Surviving Corporation with the same rights, powers and privileges
as the shares of preferred stock so converted;
<PAGE>
(d) each outstanding warrant to purchase shares of MergerSub common
stock (each, a "MergerSub Warrant") shall be automatically amended to constitute
a warrant to acquire shares of common stock of the Surviving Corporation on the
same terms and conditions as the MergerSub Warrant; and
(e) each Share outstanding immediately prior to the Effective Time
shall, except as otherwise provided in Section 1.02(a)-(d) or as provided in
Section 1.06 with respect to Shares as to which appraisal rights have been
exercised, be converted into the following (the "Merger Consideration"):
(i) for each such Share with respect to which an election to retain
Company Stock (as defined below) has been effectively made and not
revoked or lost pursuant to Sections 1.03(c), (d) and (e) ("Stock
Electing Shares"), or is deemed made pursuant to Section 1.04(d)(ii),
as the case may be, the right to retain one share of common stock (the
"Stock Election Price"), par value $.01 per share ("Company Stock");
and
(ii) for each such Share (other than Stock Electing Shares and Shares
as to which an election to retain Company Stock is deemed made pursuant
to Section 1.04(d)(ii)), the right to receive in cash from MergerSub an
amount equal to $23.00 (the "Cash Election Price").
SECTION 1.03. Elections. (a) Each person who, on or prior to the
Election Date referred to in (c) below, is a record holder of Shares will be
entitled, with respect to such Shares, to make an unconditional election on or
prior to such Election Date to retain the Stock Election Price (a "Stock
Election"), on the basis hereinafter set forth. For purposes of this Agreement,
"Election" means a Stock Election.
(b) Prior to the mailing of the Company Proxy Statement (as defined in
Section 3.09), MergerSub shall appoint an agent reasonably acceptable to the
Company (the "Exchange Agent") for the purpose of exchanging certificates
representing Shares for the Merger Consideration.
(c) MergerSub shall prepare and mail a form of election, which form
shall be subject to the reasonable approval of the Company (the "Form of
Election"), with the Company Proxy Statement to the record holders of Shares as
of the record date for the Company Stockholder Meeting (as defined in Section
5.02), which Form of Election shall be used by each record holder of Shares who
makes an Election with respect to any or all its Shares. The Company will use
its reasonable best efforts to make the Form of Election and the Company Proxy
Statement available to all persons who become holders of Shares during the
period between such record date and the Election Date referred to below. Any
such holder's Election shall have been properly made only if the Exchange Agent
shall have received at its designated office, by 5:00 p.m., New York City time
on
<PAGE>
the business day (the "Election Date") next preceding the date of the Company
Stockholder Meeting, a Form of Election properly completed and signed and
accompanied by certificates for the Shares to which such Form of Election
relates, duly endorsed in blank or otherwise in form acceptable for transfer on
the books of the Company (or by an appropriate guarantee of delivery of such
certificates as set forth in such Form of Election from a firm which is a member
of a registered national securities exchange or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office
or correspondent in the United States, provided such certificates are in fact
delivered to the Exchange Agent within five New York Stock Exchange trading days
after the date of execution of such guarantee of delivery).
(d) Any Form of Election may be revoked by the holder submitting it to
the Exchange Agent only by written notice received by the Exchange Agent (i)
prior to 5:00 p.m., New York City time on the Election Date or (ii) after the
date of the Company Proxy Statement, if (and to the extent that) the Exchange
Agent is legally required to permit revocations, and the Effective Time shall
not have occurred prior to such date. In addition, all Forms of Election shall
automatically be revoked if the Exchange Agent is notified in writing by
MergerSub or the Company that the Merger has been abandoned or this Agreement
has been terminated. If a Form of Election is revoked, the certificate or
certificates (or guarantees of delivery, as appropriate) for the Shares to which
such Form of Election relates shall be promptly returned to the stockholder
submitting the same to the Exchange Agent.
(e) The determination of the Exchange Agent shall be binding whether
or not Elections have been properly made or revoked pursuant to this Section
1.03 with respect to Shares and when elections and revocations were received by
it. If the Exchange Agent determines that any Election either (x) was not
properly made or (y) was not submitted to or received by the Exchange Agent with
respect to any Shares, such Shares shall be converted into Merger Consideration
in accordance with Section 1.04(b)(iii) or Section 1.04(d)(ii), as the case may
be. The Exchange Agent shall also make all computations as to the allocation and
the proration contemplated by Section 1.04, and any such computation shall be
conclusive and binding on the holders of Shares. The Exchange Agent may, with
the mutual agreement of MergerSub and the Company, make such rules as are
consistent with this Section 1.03 for the implementation of the elections
provided for herein as shall be necessary or desirable fully to effect such
elections.
SECTION 1.04. Proration of Election Price. (a) Notwithstanding anything
in this Agreement to the contrary but subject to Sections 1.02(a) and 1.06, the
number of Shares to be converted into the right to retain Company Stock at the
Effective Time (the "Stock Election Number") shall be the sum of (A) 1,474,345
plus (B) 5.3% of the number of Shares, if any, issued after April 21, 1997 but
prior to the Effective Time in respect of Options (as defined below) or Warrants
<PAGE>
(as defined below) (excluding for this purpose any Shares to be canceled
pursuant to Section 1.02(a)).
(b) If the number of Stock Electing Shares exceeds in the aggregate
the Stock Election Number, then the Stock Electing Shares for each Stock
Election shall be converted into the right to retain the Stock Election Price or
the right to receive the Cash Election Price in accordance with the terms of
Section 1.02(e) in the following manner:
(i) A stock proration factor (the "Stock Proration Factor") shall be
determined by dividing the Stock Election Number by the total number of
Stock Electing Shares.
(ii) The number of Stock Electing Shares covered by each Stock Election
to be converted into the right to retain the Stock Election Price shall
be determined by multiplying the Stock Proration Factor by the total
number of Stock Electing Shares covered by such Stock Election.
(iii) Each Stock Electing Share, other than any Shares converted into
the right to receive the Stock Election Price in accordance with
Section 1.04(b)(ii), shall be converted into the right to receive the
Cash Election Price as if such shares were not Stock Electing Shares in
accordance with the terms of Section 1.02(e)(ii).
(c) If the number of Stock Electing Shares is equal to the Stock
Election Number, then all Stock Electing Shares shall be converted into the
right to receive the Stock Election Price in accordance with the terms of
Section 1.02(e)(i), and all Shares other than Stock Electing Shares shall be
converted into the right to receive the Cash Election Price.
(d) If the number of Stock Electing Shares is less in the aggregate
than the Stock Election Number, then:
(i) All Stock Electing Shares shall be converted into the right to
receive the Stock Election Price in accordance with Section 1.02(e)(i).
(ii) Such number of Shares with respect to which a Stock Election is
not in effect ("Non-Electing Shares") shall be converted into the right
to retain the Stock Election Price (and a Stock Election shall be
deemed to have been made with respect to such Shares) in accordance
with Section 1.02(e) in the following manner:
(A) a cash proration factor (the "Cash Proration Factor")
shall be determined by dividing (x) the difference between the
Stock Election Number and the number of Stock
<PAGE>
Electing Shares, by (y) the total number of Shares other than
Stock Electing Shares and Dissenting Shares (as defined in
Section 1.06); and
(B) the number of Shares in addition to Stock Electing
Shares to be converted into the right to retain the Stock
Election Price shall be determined by multiplying the Cash
Proration Factor by the total number of Shares other than
Stock Electing Shares and Dissenting Shares so that the
aggregate number of Stock Electing Shares and Non-Electing
Shares converted into such right equals the Stock Election
Number.
Subject to the provisions of Section 1.04(d)(ii), the Exchange Agent
shall determine (on a consistent basis among stockholders who held Shares as to
which they did not make the election referred to in Section 1.02(e)(i), pro rata
to the number of shares as to which they did not make such election) which
NonElecting Shares shall be converted into the right to receive the Stock
Election Price.
SECTION 1.05. Surrender and Payment. (a) As soon as reasonably
practicable as of or after the Effective Time, MergerSub shall deposit with the
Exchange Agent, for the benefit of the holders of Shares, for exchange in
accordance with this Article 1, the Merger Consideration. For purposes of
determining the Merger Consideration to be made available, MergerSub shall
assume that no holder of Shares will perfect his right to appraisal of his
Shares. Promptly after the Effective Time, MergerSub will send, or will cause
the Exchange Agent to send, to each holder of Shares at the Effective Time a
letter of transmittal for use in such exchange (which shall specify that the
delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of the certificates representing Shares to the Exchange Agent).
(b) Each holder of Shares that have been converted into a right to
receive the Merger Consideration, upon surrender to the Exchange Agent of a
certificate or certificates representing such Shares, together with a properly
completed letter of transmittal covering such Shares, will be entitled to
receive the Merger Consideration payable in respect of such Shares. Until so
surrendered, each such certificate shall, after the Effective Time, represent
for all purposes, only the right to receive such Merger Consideration. No
interest will be paid or will accrue on any cash payable as Merger Consideration
or in lieu of any fractional shares of Company Stock.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly
<PAGE>
endorsed or otherwise be in proper form for transfer and that the Person
requesting such payment shall pay to the Exchange Agent any transfer or other
taxes required as a result of such payment to a Person other than the registered
holder of such Shares or establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not payable. For purposes of this Agreement,
"Person" means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or any agency or instrumentality
thereof.
(d) After the Effective Time, there shall be no further registration
of transfers of Shares. If, after the Effective Time, certificates representing
Shares are presented to the Surviving Corporation, they shall be canceled and
exchanged for the Merger Consideration provided for, and in accordance with the
procedures set forth, in this Article 1.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.05(a) that remains unclaimed by the holders
of Shares six months after the Effective Time shall be returned to MergerSub,
upon demand, and any such holder who has not exchanged his Shares for the Merger
Consideration in accordance with this Section prior to that time shall
thereafter look only to MergerSub for payment of the Merger Consideration in
respect of his Shares. Notwithstanding the foregoing, MergerSub shall not be
liable to any holder of Shares for any amount paid to a public official pursuant
to applicable abandoned property laws. Any amounts remaining unclaimed by
holders of Shares two years after the Effective Time (or such earlier date
immediately prior to such time as such amounts would otherwise escheat to or
become property of any governmental entity) shall, to the extent permitted by
applicable law, become the property of MergerSub free and clear of any claims or
interest of any Person previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.05(a) to pay for Shares for which appraisal
rights have been perfected shall be returned to MergerSub, upon demand.
(g) No dividends or other distributions with respect to Company Stock
with a record date after the Effective Time shall be paid to the holder of any
unsurrendered certificate for Shares with respect to the shares of Company Stock
represented thereby and no cash payment in lieu of fractional shares shall be
paid to any such holder pursuant to Section 1.09 until the surrender of such
certificate in accordance with this Article 1. Subject to the effect of
applicable laws, following surrender of any such certificate, there shall be
paid to the holder of the certificate representing whole shares of Company Stock
issued in exchange therefor, without interest, (i) at the time of such surrender
or as promptly after the sale of the Excess Shares (as defined in Section 1.09)
as practicable, the amount of any cash payable in lieu of a fractional share of
Company Stock to which such
<PAGE>
holder is entitled pursuant to Section 1.09 and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole shares of Company Stock, and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such whole shares of
Company Stock.
SECTION 1.06. Dissenting Shares. Notwithstanding Section 1.02, Shares
which are issued and outstanding immediately prior to the Effective Time and
which are held by a holder who has not voted such shares in favor of the Merger,
who shall have delivered a written demand for appraisal of such Shares in the
manner provided by the Delaware Law and who, as of the Effective Time, shall not
have effectively withdrawn or lost such right to appraisal ("Dissenting Shares")
shall not be converted into a right to receive the Merger Consideration. The
holders thereof shall be entitled only to such rights as are granted by Section
262 of the Delaware Law. Each holder of Dissenting Shares who becomes entitled
to payment for such Shares pursuant to Section 262 of the Delaware Law shall
receive payment therefor from the Surviving Corporation in accordance with the
Delaware Law; provided, however, that (i) if any such holder of Dissenting
Shares shall have failed to establish his entitlement to appraisal rights as
provided in Section 262 of the Delaware Law, (ii) if any such holder of
Dissenting Shares shall have effectively withdrawn his demand for appraisal of
such Shares or lost his right to appraisal and payment for his Shares under
Section 262 of the Delaware Law or (iii) if neither any holder of Dissenting
Shares nor the Surviving Corporation shall have filed a petition demanding a
determination of the value of all Dissenting Shares within the time provided in
Section 262 of the Delaware Law, such holder shall forfeit the right to
appraisal of such Shares and each such Share shall be treated as if it had been
a Non-Electing Share and had been converted, as of the Effective Time, into a
right to receive the Merger Consideration, without interest thereon, from the
Surviving Corporation as provided in Section 1.02 hereof. The Company shall give
MergerSub prompt notice of any demands received by the Company for appraisal of
Shares, and MergerSub shall have the right to participate in all negotiations
and proceedings with respect to such demands. The Company shall not, except with
the prior written consent of MergerSub, make any payment with respect to, or
settle or offer to settle, any such demands.
SECTION 1.07. Stock Options. (a) Immediately prior to the Effective
Time, each outstanding option to acquire Shares granted to employees and
directors, whether vested or not (the "Options") shall be canceled and, in lieu
thereof, as soon as reasonably practicable as of or after the Effective Time,
the holders of such Options shall receive, with respect to each Option, a cash
payment in an amount equal to the product of (x) the excess, if any, of $23.00
over the
<PAGE>
exercise price of such Option multiplied by (y) the number of Shares subject to
such Option.
(b) Prior to the Effective Time, the Company shall (i) obtain any
consents from holders of options to purchase Shares granted under the Company's
stock option or compensation plans or arrangements and (ii) make any amendments
to the terms of such stock option or compensation plans or arrangements that are
necessary to give effect to the transactions contemplated by Section 1.07(a).
Notwithstanding any other provision of this Section, payment may be withheld in
respect of any Option until necessary consents are obtained.
SECTION 1.08. Warrants. The Company shall use its reasonable best
efforts to cause holders of all outstanding warrants ("Warrants") to surrender
such Warrants to the Company prior to the Effective Time in exchange for payment
immediately after the Effective Time of an amount equal to the difference
between the exercise price in respect of each Share for which such Warrant is
exercisable and $23.00, multiplied by the number of Shares subject to such
Warrant, and upon such other terms and conditions satisfactory to MergerSub.
With respect to Warrants that are not surrendered prior to the Effective Time,
after the Effective Time, the Surviving Corporation shall comply with all
applicable terms of such unsurrendered Warrants.
SECTION 1.09. Fractional Shares. (a) No certificates or scrip
representing fractional shares of Company Stock shall be issued upon the
surrender for exchange of certificates representing Shares, and such fractional
share interests will not entitle the owner thereof to vote or to any rights of a
stockholder of the Surviving Corporation; and
(b) Notwithstanding any other provision of this Agreement, each holder
of Shares exchanged pursuant to the Merger who would otherwise have been
entitled to receive a fraction of a share of Company Stock (after taking into
account all Shares delivered by such holder) shall receive, in lieu thereof, a
cash payment (without interest) representing such holder's proportionate
interest in the net proceeds from the sale by the Exchange Agent (following the
deduction of applicable transaction costs), on behalf of all such holders, of
the shares (the "Excess Shares") of Company Stock representing such fractions.
Such sale shall be made as soon as practicable after the Effective Time.
ARTICLE 2
THE SURVIVING CORPORATION
SECTION 2.01. Certificate of Incorporation. The certificate of
incorporation of the Company in effect immediately prior to the Effective Time
shall be amended as of the Effective Time as set forth in Exhibit A, and as so
<PAGE>
amended, shall be the certificate of incorporation of the Surviving Corporation
until thereafter amended in accordance with applicable law.
SECTION 2.02. Bylaws. The bylaws of MergerSub in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 2.03. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, (a) the directors of MergerSub at the Effective Time shall
be the directors of the Surviving Corporation, and (b) the officers of the
Company at the Effective Time shall be the officers of the Surviving
Corporation.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to MergerSub that:
SECTION 3.01. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. The Company is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect. The Company has heretofore delivered to MergerSub true
and complete copies of the Company's certificate of incorporation and bylaws as
currently in effect. For purposes of this Agreement, "Material Adverse Effect"
means any material adverse effect on the condition (financial or otherwise),
business, assets, or results of operations of the Company and the Subsidiaries
taken as a whole, but excluding (i) any change resulting from general economic
conditions and (ii) with respect to Section 3.10(a) and Section 3.10(h) (in the
case of the latter, with respect to agreements only), any change arising out of
the transactions contemplated by this Agreement and the public announcement
thereof.
SECTION 3.02. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the Company's corporate
powers and, except for any required approval by the Company's stockholders by
majority vote in connection with the consummation of the
<PAGE>
Merger, have been duly authorized by all necessary corporate and stockholder
action. This Agreement constitutes a valid and binding agreement of the Company.
SECTION 3.03. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation of the Merger
by the Company require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than (a) the filing of a
certificate of merger in accordance with Delaware Law; (b) compliance with any
applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"); (c) compliance with any applicable
requirements of the Securities Exchange Act of 1934, as amended and the rules
and regulations promulgated thereunder (the "Exchange Act"); (d) compliance with
the applicable requirements of the Securities Act of 1933, as amended and the
rules and regulations promulgated thereunder (the "Securities Act"); (e)
compliance with any applicable foreign or state securities or Blue Sky laws; and
(f) where the failure to take such action would not, individually or in the
aggregate, have a Material Adverse Effect.
SECTION 3.04. Non-contravention. Except as set forth on Schedule 3.04,
the execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby do not and
will not (a) contravene or conflict with the certificate of incorporation or
bylaws of the Company, (b) assuming compliance with the matters referred to in
Section 3.03, contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, writ, injunction, order or decree of
any court or governmental authority binding upon or applicable to the Company or
any Subsidiary or any of their properties or assets, (c) except under the
Revolving Credit Agreement dated as of April 26, 1996 among the Company, certain
of its Subsidiaries and the banks named therein, as amended (the "Revolving
Credit Agreement") constitute a default under or give rise to a right of
termination, cancellation or acceleration of any right or obligation of the
Company or any Subsidiary or to a loss of any benefit to which the Company or
any Subsidiary is entitled under any provision of any agreement, contract or
other instrument binding upon the Company or any Subsidiary or any license,
franchise, permit or other similar authorization held by the Company or any
Subsidiary, or (d) result in the creation or imposition of any Lien on any asset
of the Company or any Subsidiary, except, in the case of clauses (b), (c) and
(d), to the extent that any such violation, failure to obtain any such consent
or other action, default, right, loss or Lien would not, individually or in the
aggregate, have a Material Adverse Effect. For purposes of this Agreement,
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset.
<PAGE>
SECTION 3.05. Capitalization. The authorized capital stock of the
Company consists of (i) 100,000,000 shares of common stock ("Common Stock"), par
value $.01 per share, of which as of April 21, 1997, there were outstanding
27,817,830 shares of Common Stock and Options to purchase an aggregate of not
more than 2,932,014 shares of Common Stock (of which options to purchase an
aggregate of 1,364,014 shares of Common Stock were exercisable) and (ii)
5,000,000 shares of preferred stock ("Preferred Stock"), par value $.01 per
share, of which as of April 21, 1997 none were issued and outstanding. As of
April 21, 1997 there were Warrants to purchase: (i) 134,478 shares of common
stock of the Company at an exercise price of $5.90 per share and (ii) 468,750
shares or common stock of the Company at an exercise price of $0.10 per share.
The aggregate exercise price of the (i) Options outstanding as of April 21, 1997
is $22,064,966.50 and (ii) Warrants outstanding as of April 21, 1997 is
$840,295.20. All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable. Except
as set forth in this Section and except for changes since April 21, 1997
resulting from the exercise of Options and Warrants, in each case, outstanding
on such date, there are outstanding (a) no shares of capital stock or other
voting securities of the Company, (b) no securities of the Company convertible
into or exchangeable for shares of capital stock or voting securities of the
Company, and (c) no options or other rights to acquire from the Company, and no
obligation of the Company to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of the Company (the items in clauses 3.05(a), 3.05(b) and 3.05(c)
being referred to collectively as the "Company Securities"). There are no
outstanding obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any Company Securities.
SECTION 3.06. Subsidiaries. (a) Each Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted and is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except where the failure to have such
licenses, authorizations, consents and approvals or for those jurisdictions
where failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect. For purposes of this Agreement, "Subsidiary"
means any corporation or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are directly or
indirectly owned by the Company and/or one or more Subsidiary, except for
Properties Holding Corporation, Decision Data Computer Investment Corporation,
Decision Data Computer International S.A. and Properties Development
Corporation, none of which (i) is
<PAGE>
performing any activity significant to the business of the Company and its
Subsidiaries or (ii) has any material assets or liabilities (together, the
"Immaterial Subsidiaries"), provided, however that for the purposes of Articles
5, 6 and 7 hereof, the term "Subsidiaries" shall be deemed to include the
Immaterial Subsidiaries. All Subsidiaries and their respective jurisdictions of
incorporation are identified in the Company's annual report on Form 10-K for the
fiscal year ended June 30, 1996 (the "Company 10-K").
(b) Except for the restrictions on disposition of capital stock
pursuant to the Revolving Credit Agreement, all of the outstanding capital stock
of, or other ownership interests in, each Subsidiary, is owned by the Company,
directly or indirectly, free and clear of any Lien and free of any other
limitation or restriction (including any restriction on the right to vote, sell
or otherwise dispose of such capital stock or other ownership interests). All
such capital stock has been duly authorized and validly issued and is fully paid
and non-assessable. There are no outstanding (i) securities of the Company or
any Subsidiary convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary, and (ii)
options or other rights to acquire from the Company or any Subsidiary, and no
other obligation of the Company or any Subsidiary to issue, any capital stock,
voting securities or other ownership interests in, or any securities convertible
into or exchangeable for any capital stock, voting securities or ownership
interests in, any Subsidiary (the items in clauses 3.06(b)(i) and 3.06(b)(ii)
being referred to collectively as the "Subsidiary Securities"). There are no
outstanding obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any outstanding Subsidiary Securities.
SECTION 3.07. SEC Filings. (a) The Company has made available to
MergerSub (i) the Company 10-K, (ii) its quarterly reports on Form 10-Q for its
fiscal quarters ended September 30, 1996 and December 31, 1996 (collectively,
the "Forms 10-Q"), (iii) its proxy or information statements relating to
meetings of, or actions taken without a meeting by, the stockholders of the
Company held since January 1, 1996, and (iv) all of its other reports,
statements, schedules and registration statements filed with the Securities and
Exchange Commission (the "SEC") since January 1, 1996 (the documents referred to
in clauses (i)-(iv), together with Schedule 3.08 collectively, the "SEC
Documents").
(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.
(c) Each such registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act, as of the date such statement
or amendment became effective did not contain any untrue statement of a material
<PAGE>
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
SECTION 3.08. Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company included in its annual reports on Form 10-K, in the Forms 10-Q and in
Schedule 3.08 fairly present, in all material respects, in conformity with
generally accepted accounting principles applied on a consistent basis (except
as may be indicated in the notes thereto), the consolidated financial position
of the Company and its consolidated subsidiaries as of the dates thereof and
their consolidated results of operations and changes in financial position for
the periods then ended (subject to normal year-end adjustments in the case of
any unaudited interim financial statements). For purposes of this Agreement,
"Balance Sheet" means the consolidated balance sheet of the Company and its
subsidiaries as of June 30, 1996 set forth in the Company 10-K and "Balance
Sheet Date" means June 30, 1996.
SECTION 3.09. Disclosure Documents. (a) Each document required to be
filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "Company Disclosure Documents"), including,
without limitation, the proxy or information statement of the Company containing
information required by Regulation 14A under the Exchange Act, and, if
applicable, Rule 13e-3 and Schedule 13E-3 under the Exchange Act (the "Company
Proxy Statement"), to be filed with the SEC in connection with the Merger, and
any amendments or supplements thereto will, when filed, comply as to form in all
material respects with the applicable requirements of the Exchange Act. The
representations and warranties contained in this Section 3.09(a) will not apply
to statements or omissions included in the Company Disclosure Documents based
upon information furnished to the Company in writing by MergerSub specifically
for use therein.
(b) At the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company and at the
time such stockholders vote on adoption of this Agreement, the Company Proxy
Statement, as supplemented or amended, if applicable, will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. At the time of the filing of any
Company Disclosure Document other than the Company Proxy Statement and at the
time of any distribution thereof, such Company Disclosure Document will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties contained in this Section 3.09(b) will not apply to statements or
omissions
<PAGE>
included in the Company Disclosure Documents based upon information furnished to
the Company in writing by MergerSub specifically for use therein.
(c) The information with respect to the Company or any Subsidiary that
the Company furnishes to MergerSub in writing specifically for use in the
MergerSub Disclosure Documents (as defined in Section 6.01) will not, at the
time of the filing thereof, at the time of any distribution thereof and at the
time of the meeting of the Company's stockholders, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the light
of the circumstances under which they were made, not misleading.
SECTION 3.10. Absence of Certain Changes. Since the Balance Sheet Date,
the Company and Subsidiaries have conducted their business in the ordinary
course consistent with past practice and there has not been:
(a) except as disclosed in the Forms 10-Q and Schedule 3.08, any
event, occurrence or development of a state of facts which, individually or in
the aggregate, has had, or would reasonably be expected to have a Material
Adverse Effect;
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of the Company, or
(other than any retirement of Options or Warrants contemplated pursuant to this
Agreement) any repurchase, redemption or other acquisition by the Company or any
Subsidiary of any outstanding shares of capital stock or other securities of, or
other ownership interests in, the Company or any Subsidiary;
(c) except as disclosed in the SEC Documents, any amendment of any
material term of any outstanding security of the Company or any Subsidiary;
(d) except as disclosed in the SEC Documents, any incurrence,
assumption or guarantee by the Company or any Subsidiary of any indebtedness for
borrowed money, other than in the ordinary course of business and in amounts and
on terms consistent with past practices;
(e) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company or any
Subsidiary which, individually or in the aggregate, has had, or would reasonably
be expected to have, a Material Adverse Effect;
(f) except as disclosed in Schedule 5.01, any material change in any
method of accounting or accounting practice by the Company or any Subsidiary,
except for any such change required by reason of a concurrent change in
generally accepted accounting principles;
<PAGE>
(g) except as disclosed in the SEC Documents or in Schedule 3.10(g),
any (i) grant of any severance or termination pay to any director, officer or
employee of the Company or any Subsidiary, (ii) entering into of any employment,
deferred compensation or other similar agreement (or any amendment to any such
existing agreement) with any director, officer or employee of the Company or any
Subsidiary, (iii) increase in benefits payable under any existing severance or
termination pay policies or employment agreements or (iv) increase in
compensation, bonus or other benefits payable to directors, officers or
employees of the Company or any Subsidiary, other than in the ordinary course of
business consistent with past practice; or
(h) any cancellation of any licenses, sublicenses, franchises, permits
or agreements to which the Company or any Subsidiary is a party, or any
notification to the Company or any Subsidiary that any party to any such
arrangements intends to cancel or not renew such arrangements beyond its
expiration date as in effect on the date hereof, which cancellation or
notification, individually or in the aggregate, has had, or would reasonably be
expected to have, a Material Adverse Effect.
SECTION 3.11. No Undisclosed Material Liabilities. There are no
liabilities of the Company or any Subsidiary of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, which,
individually or in the aggregate, would reasonably be expected to be material to
the business of the Company and its Subsidiaries taken as a whole, other than:
(a) liabilities disclosed or provided for in the Balance Sheet;
(b) liabilities disclosed in the SEC Documents filed after the Balance
Sheet Date but prior to the date of this Agreement;
(c) liabilities incurred in the ordinary course of business consistent
with past practice since the Balance Sheet Date, which in the aggregate would
not have a Material Adverse Effect;
(d) liabilities under this Agreement; and
(e) liabilities under contracts or agreements of the Company or any
Subsidiary entered into in the ordinary course of business (as to which
contracts or agreements there is no breach or violation by the Company or any
Subsidiary).
SECTION 3.12. Litigation. Except as disclosed in Schedule 3.12, there is no
action, suit, investigation or proceeding (or any basis therefor) pending
against, or to the knowledge of the Company threatened against or affecting, the
Company or any Subsidiary or any of their respective properties before any court
or
<PAGE>
arbitrator or any governmental body, agency or official which, if determined or
resolved adversely to the Company or any Subsidiary in accordance with the
plaintiff's demands, would reasonably be expected to have a Material Adverse
Effect or which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the Merger or any of the other transactions contemplated
hereby.
SECTION 3.13. Taxes. (a) All material tax returns, statements, reports
and forms (including estimated tax returns and reports and information returns
and reports) required to be filed with any taxing authority with respect to any
tax period (or portion thereof) ending on or before the Effective Time (a
"PreClosing Tax Period") by or on behalf of the Company or any Subsidiary of the
Company (collectively, the "Returns"), were filed when due (including any
applicable extension periods) in accordance with all applicable laws.
(b) The Company and its Subsidiaries have timely paid, or withheld and
remitted to the appropriate taxing authority, all material taxes shown as due
and payable on all Returns that have been filed.
(c) The charges, accruals and reserves for taxes with respect to the
Company and any Subsidiary for any Pre-Closing Tax Period (including any
PreClosing Tax Period for which no Return has yet been filed, with respect to
which Periods the Company has made estimates in accordance with past practice)
reflected on the books of the Company and its Subsidiaries (excluding any
provision for deferred income taxes) are adequate to cover such taxes.
(d) There is no material claim (including under any indemnification or
tax-sharing agreement), audit, action, suit, proceeding, or investigation now
pending or threatened in writing against or in respect of any tax or "tax asset"
of the Company or any Subsidiary, other than (i) periodic sales tax audits
occurring in the ordinary course of business, the resolution of which,
individually or in the aggregate, the Company believes will not have a Material
Adverse Effect, and (ii) claims, audits, actions, suits, proceedings or
investigations with respect to which the Company is indemnified in full pursuant
to the Stock Purchase Agreement among Decision Servcom, Inc., Bell Atlantic
Business Systems Services, Inc., and Bell Atlantic Business Systems, Inc. dated
September 19, 1995. For purposes of this Section 3.13, the term "tax asset"
shall include any net operating loss, net capital loss, investment tax credit,
foreign tax credit, charitable deduction or any other credit or tax attribute
which could reduce taxes.
(e) There are no Liens for taxes upon the assets of the Company or its
Subsidiaries except for Liens for current taxes not yet due.
(f) Neither the Company nor any of its Subsidiaries has been a United
States real property holding corporation within the meaning of Section 897(c)(2)
<PAGE>
of the Internal Revenue Code of 1986, as amended (the "Code") during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
SECTION 3.14. ERISA. (a) Schedule 3.14(a) sets forth a list identifying
each "employee benefit plan", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), which (i) is subject to any
provision of ERISA and (ii) is maintained, administered or contributed to by the
Company or any affiliate (as defined below) and covers any employee or former
employee of the Company or any affiliate or under which the Company or any
affiliate has any liability. Copies of such plans (and, if applicable, related
trust agreements) and all amendments thereto and written interpretations thereof
have been furnished to MergerSub together with (A) the three most recent annual
reports (Form 5500 including, if applicable, Schedule B thereto) prepared in
connection with any such plan and (B) the most recent actuarial valuation report
prepared in connection with any such plan. Such plans are referred to
collectively herein as the "Employee Plans". For purposes of this Section,
"affiliate" of any Person means any other Person which, together with such
Person, would be treated as a single employer under Section 414 of the Code. The
only Employee Plans which individually or collectively would constitute an
"employee pension benefit plan" as defined in Section 3(2) of ERISA (the
"Pension Plans") are identified as such in the list referred to above. The
Company will make available to MergerSub complete age, salary, service and
related data as of the most recently available date for employees and former
employees of the Company and any affiliate covered under the Pension Plans.
(b) No Employee Plan constitutes a "multiemployer plan", as defined in
Section 3(37) of ERISA (a "Multiemployer Plan"), and no Employee Plan is
maintained in connection with any trust described in Section 501(c)(9) of the
Code. Except as otherwise identified in Schedule 3.14(b), no Employee Plan is
subject to Title IV of ERISA and no "accumulated funding deficiency", as defined
in Section 412 of the Code, has been incurred with respect to any Pension Plan,
whether or not waived. The Company knows of no "reportable event", within the
meaning of Section 4043 of ERISA, and no event described in Section 4041, 4042,
4062 or 4063 of ERISA has occurred in connection with any Employee Plan, other
than a "reportable event" or other event that individually or in the aggregate,
has not had, and would not reasonably be expected to have, a Material Adverse
Effect. To the Company's knowledge, no condition exists and no event has
occurred that could constitute grounds for termination of any Employee Plan
subject to Title IV of ERISA and neither the Company nor any of its affiliates
has incurred any liability under Title IV of ERISA arising in connection with
the termination of, or complete or partial withdrawal from, any plan covered or
previously covered by Title IV of ERISA. Nothing done or omitted to be done and
no transaction or holding of any asset under or in connection with any Employee
Plan has or will make the Company or any Subsidiary, any officer or director of
the Company or any Subsidiary subject to
<PAGE>
any liability under Title I of ERISA or liable for any tax pursuant to Section
4975 of the Code which liability, individually or in the aggregate, has had, or
would reasonably be expected to have, a Material Adverse Effect.
(c) Each Employee Plan which is intended to be qualified under Section
401(a) of the Code is either a standardized prototype plan covered by an opinion
letter issued by the IRS or an individually designed plan covered by a
determination letter issued by the IRS and, to the knowledge of the Company,
nothing has occurred since the date of the opinion or determination letter which
resulted, or is likely to result, in the Company's inability to rely on such
letters. The Company has furnished to MergerSub copies of the most recent
Internal Revenue Service opinion determination letters with respect to each such
Plan. Each Employee Plan has been maintained in substantial compliance with its
terms and with the requirements prescribed by any and all statutes, orders,
rules and regulations, including but not limited to ERISA and the Code, which
are applicable to such Plan.
(d) Except as set forth in Schedule 3.14(d) there is no contract,
agreement, plan or arrangement covering any employee or former employee of the
Company or any affiliate that, individually or collectively, could give rise to
the payment of any amount that would not be deductible pursuant to the terms of
Section 280G of the Code.
(e) Schedule 3.14(e) sets forth a list of each employment, severance
or other similar contract, arrangement or policy and each plan or arrangement
(written or oral) providing for insurance coverage (including any self-insured
arrangements), workers' compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits or for deferred
compensation, profit-sharing, bonuses, stock options, stock appreciation or
other forms of incentive compensation or post-retirement insurance, compensation
or benefits which (i) is not an Employee Plan, (ii) is entered into, maintained
or contributed to, as the case may be, by the Company or any of its Subsidiaries
and (iii) covers any employee or former employee of the Company or any of its
Subsidiaries. Such contracts, plans and arrangements as are described above,
copies or descriptions of all of which have been furnished previously to
MergerSub are referred to collectively herein as the "Benefit Arrangements".
Each Benefit Arrangement has been maintained in substantial compliance with its
terms and with the requirements prescribed by any and all statutes, orders,
rules and regulations that are applicable to such Benefit Arrangement.
(f) To the knowledge of the Company, no condition exists that would
prevent the Company or any Subsidiary from amending or terminating any Employee
Plan or Benefit Arrangement providing health or medical benefits in respect of
any active employee of the Company or any Subsidiary.
<PAGE>
(g) Except as disclosed on Schedule 3.14(g), there has been no
amendment to, written interpretation or announcement (whether or not written) by
the Company or any of its affiliates relating to, or change in employee
participation or coverage under, any Employee Plan or Benefit Arrangement which
would increase materially the expense of maintaining such Employee Plan or
Benefit Arrangement above the level of the expense incurred in respect thereof
for the fiscal year ended on the Balance Sheet Date other than with regard to
any changes mandated by law.
(h) Except as disclosed in Section 3.15, neither the Company nor any
Subsidiary is a party to or subject to any union contract or any employment
contract or arrangement providing for annual future compensation (excluding
sales commissions) of $150,000 or more with any officer, director or employee.
SECTION 3.15. Employees. The Company has disclosed to MergerSub in
writing on the date of this Agreement the names, titles, annual salaries and
other compensation of all employees of the Company (the "Key Employees") whose
base compensation, together with any other cash compensation (excluding sales
commissions), was in excess of $150,000 per annum for calendar year 1996. Except
as disclosed to MergerSub in writing on the date of this Agreement, none of the
Key Employees has indicated to the Company in writing on or prior to the date
hereof that he or she intends to resign or retire as a result of the
transactions contemplated by this Agreement or otherwise within three months
after the Effective Time.
SECTION 3.16. Labor Matters. The Company is in compliance with all
currently applicable laws respecting employment practices, terms and conditions
of employment and wages and hours, and is not engaged in any unfair labor
practice, the failure to comply with which or engagement in which, as the case
may be, individually or in the aggregate, has not had, and would not reasonably
be expected to have, a Material Adverse Effect. There is no unfair labor
practice complaint pending or, to the knowledge of the Company, threatened
against the Company before the National Labor Relations Board. Except as
otherwise set forth on Schedule 3.16, there are no strikes, slowdowns, union
organizational campaigns or other protected concerted activity under the
National Labor Relations Act or, to the knowledge of Company, threats thereof,
by or with respect to any employees of the Company.
SECTION 3.17. Compliance with Laws and Court Orders. Neither the
Company nor any Subsidiary is in violation of, or has since January 1, 1996
violated, and to the knowledge of the Company none is under investigation with
respect to or has been threatened to be charged with or given notice of any
violation of, in each case, by any governmental agency or authority, any
applicable law, rule, regulation, judgment, injunction, order or decree, except
for
<PAGE>
violations that have not had, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
SECTION 3.18. Licenses and Permits. Except as set forth on Schedule
3.18 or except as has not had, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (i) the Permits are
valid and in full force and effect, (ii) neither the Company nor any Subsidiary
is in default under, and no condition exists that with notice or lapse of time
or both would constitute a default under, the Permits and (iii) none of the
Permits will be terminated or impaired or become terminable, in whole or in
part, as a result of the transactions contemplated hereby. "Permits" means each
material license, franchise, permit, certificate, approval or other similar
authorization affecting, or relating in any way to, the assets or business of
the Company and its Subsidiaries.
SECTION 3.19. Repairable Parts. The repairable parts set forth in the
Balance Sheet were stated therein at cost less accumulated amortization. Since
the Balance Sheet Date, the repairable parts of the Company and its Subsidiaries
have been maintained in the ordinary course of business. All such repairable
parts are owned free and clear of all Liens, except for a purchase money
security interest in certain parts in favor of Electronic Data Systems Corp. to
secure the issuance of approximately $2,000,000 of credits. The repairable parts
recorded on the Balance Sheet consist of, and all repairable parts of the
Company and its Subsidiaries as of the Effective Time will consist of, items of
a quality usable in the normal course of business consistent with past practices
(it being understood that at any given time, a portion of repairable parts are
not in good repair) and are and will be in quantities sufficient for the normal
operation of the business of the Company and its Subsidiaries in accordance with
past practice.
SECTION 3.20. Intellectual Property. Except for that litigation
involving certain independent service providers referred to in "Item 3. Legal
Proceedings" in the Company 10-K, provided that the Company is not a party to
litigation of such nature which would be required to be disclosed in response to
this sentence, the Company and the Subsidiaries own or possess adequate licenses
or other rights to use all Intellectual Property Rights necessary to conduct the
business now operated by them, except where the failure to own or possess such
licenses or rights, individually or in the aggregate, has not had, and would not
reasonably be expected to have, a Material Adverse Effect. To the knowledge of
the Company, the Intellectual Property Rights of the Company and the
Subsidiaries do not conflict with or infringe upon any Intellectual Property
Rights of others to the extent that, if sustained, such conflict or
infringement, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect. For purposes of this Agreement, "Intellectual
Property Right" means any trademark, service mark, trade name, mask work,
copyright, patent, software license, other data base, invention, trade secret,
know-how (including any
<PAGE>
registrations or applications for registration of any of the foregoing) or any
other similar type of proprietary intellectual property right.
SECTION 3.21. Finders' Fees. With the exception of fees payable to
Smith Barney Inc., a copy of whose engagement agreement has been provided to
MergerSub, there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of, the Company or
any Subsidiary who might be entitled to any fee or commission from the Company
or any Subsidiary or any of its affiliates upon consummation of the transactions
contemplated by this Agreement.
SECTION 3.22. Inapplicability of Certain Restrictions. Section 203 of
the Delaware Law does not in any way restrict the consummation of the Merger or
the other transactions contemplated by this Agreement. The adoption of this
Agreement by the affirmative vote of the holders of Shares entitling such
holders to exercise at least a majority of the voting power of the Shares is the
only vote of holders of any class or series of the capital stock of the Company
required to adopt this Agreement or to approve the Merger or any of the other
transactions contemplated hereby, and no higher or additional vote is required
pursuant to of the Company's certificate of incorporation or otherwise.
SECTION 3.23. Rights Plan. Neither the Company nor any of its
Subsidiaries has any rights plan or similar common stock or preferred stock
purchase plan or similar arrangement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF MERGERSUB
MergerSub represents and warrants to the Company that:
SECTION 4.01. Corporate Existence and Power. MergerSub is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. Since the date of its incorporation, MergerSub
has not engaged in any activities other than in connection with or as
contemplated by this Agreement and the Merger or in connection with arranging
any financing required to consummate the transactions contemplated hereby.
MergerSub has furnished to the Company true and correct copies of its
certificate of incorporation and by-laws, which shall not be amended or modified
prior to the Effective Time except to reflect the terms of the MergerSub
Preferred Stock.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by MergerSub of this Agreement and the consummation by
<PAGE>
MergerSub of the transactions contemplated hereby are within the corporate
powers of MergerSub and have been duly authorized by all necessary corporate and
stockholder action. This Agreement constitutes a valid and binding agreement of
MergerSub.
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by MergerSub of this Agreement and the consummation by MergerSub of
the transactions contemplated by this Agreement require no action by or in
respect of, or filing with, any governmental body, agency, official or authority
other than (a) the filing of a certificate of merger in accordance with the
Delaware Law, (b) compliance with any applicable requirements of the HSR Act;
(c) compliance with any applicable requirements of the Exchange Act; (d)
compliance with the applicable requirements of the Securities Act; and (e)
compliance with any applicable foreign or state securities or Blue Sky laws.
SECTION 4.04. Non-contravention. The execution, delivery and
performance by MergerSub of this Agreement and the consummation by MergerSub of
the transactions contemplated hereby do not and will not (a) contravene or
conflict with the certificate of incorporation or bylaws of MergerSub, (b)
assuming compliance with the matters referred to in Section 4.03, contravene or
conflict with any provision of law, regulation, judgment, order or decree
binding upon MergerSub, or (c) constitute a default under or give rise to any
right of termination, cancellation or acceleration of any right or obligation of
MergerSub or to a loss of any benefit to which MergerSub is entitled under any
agreement, contract or other instrument binding upon MergerSub.
SECTION 4.05. Disclosure Documents. (a) The information with respect to
MergerSub that MergerSub furnishes to the Company in writing specifically for
use in any Company Disclosure Document will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading (i) in the case of the Company Proxy Statement at the
time the Company Proxy Statement or any amendment or supplement thereto is first
mailed to stockholders of the Company, at the time the stockholders vote on
adoption of this Agreement and at the Effective Time, and (ii) in the case of
any Company Disclosure Document other than the Company Proxy Statement, at the
time of the filing thereof and at the time of any distribution thereof.
(b) The MergerSub Disclosure Documents (as defined in Section 6.01),
when filed, will comply as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and will not at the time
of the filing thereof, at the time of any distribution thereof or at the time of
the meeting of the Company's stockholders, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not
<PAGE>
misleading, provided, that this representation and warranty will not apply to
statements or omissions in the MergerSub Disclosure Documents based upon
information furnished to MergerSub in writing by the Company specifically for
use therein.
SECTION 4.06. Finders' Fees. Except for Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJSC"), a copy of whose engagement agreement has been
provided to the Company and whose fees will be paid by MergerSub, there is no
investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of MergerSub who might be entitled to any
fee or commission from MergerSub or any of its affiliates upon consummation of
the transactions contemplated by this Agreement.
SECTION 4.07. Financing. The Company has received copies of (a) a
commitment letter dated May 4, 1997 from DLJ Merchant Banking Partners II, L.P.,
DLJ Offshore Partners II, C.V., DLJ Diversified Partners, C.V., DLJ Funding II,
Inc., UK Investment Plan 1997 Partners and DLJ First ESC LLC pursuant to which
each of the foregoing has committed, subject to the terms and conditions set
forth therein, to purchase securities of MergerSub for an aggregate amount equal
to $310,000,007, (b) a letter dated May 4, 1997 from DLJSC pursuant to which
DLJSC has indicated that it is highly confident of its ability to place
privately, or underwrite in the public markets, Senior Subordinated Notes of
DecisionOne Corporation, a Delaware corporation ("Operating Co.") in the amount
of $150,000,000, and (c) a commitment letter dated April 30, 1997 from DLJ
Capital Funding, Inc. ("DLJ Senior Debt Fund") pursuant to which DLJ Senior Debt
Fund has committed, subject to the terms and conditions set forth therein, to
enter into one or more credit agreements providing for loans to Operating Co. of
up to $575,000,000. As used in this Agreement, the aforementioned entities shall
hereinafter be referred to as the "Financing Entities." The aforementioned
credit agreements and commitments to purchase equity securities of MergerSub or
Operating Co. shall be referred to as the "Financing Agreements" and the
financing to be provided thereunder and under the arrangements described in
clause (b) above shall be referred to as the "Financing." The aggregate proceeds
of the Financing are in an amount sufficient to pay the Merger Consideration, to
repay all of the Company's and its Subsidiaries' indebtedness together with any
interest, premium or penalties payable in connection therewith, to provide a
reasonable amount of working capital financing and to pay related fees and
expenses (collectively, the "Required Amounts"). As of the date hereof, none of
the commitment letters relating to the Financing Agreements referred to above
has been withdrawn and MergerSub does not know of any facts or circumstances
that may reasonably be expected to result in any of the conditions set forth in
the commitment letters relating to the Financing Agreements not being satisfied.
MergerSub believes that the Financing will not create any liability to the
directors and stockholders of the Company under any federal or state fraudulent
conveyance or transfer law.
<PAGE>
MergerSub further believes that, upon the consummation of the transactions
contemplated hereby, including, without limitation, the Financing, the Surviving
Corporation (i) will not become insolvent, (ii) will not be left with
unreasonably small capital, (iii) will not have incurred debts beyond its
ability to pay such debts as they mature, and (iv) the capital of the Company
will not become impaired.
SECTION 4.08. Capitalization. The authorized capital stock of MergerSub
consists of (i) 30,000,000 shares of MergerSub Common Stock, of which as of the
date hereof, there were outstanding 101 shares and (ii) 15,000,000 shares of
MergerSub Preferred Stock, of which as of the date hereof no shares were
outstanding. All outstanding shares of capital stock of MergerSub have been duly
authorized and validly issued and are fully paid and nonassessable. As of the
moment immediately prior to the Effective Time, 9,782,609 shares of MergerSub
Common Stock, 3,400,000 shares of MergerSub Preferred Stock (or, in lieu
thereof, Senior Discount Notes of MergerSub in an equivalent proceeds amount of
$85,000,000) and MergerSub Warrants to acquire 1,417,180 shares of MergerSub
Common Stock at an exercise price of not less than $0.01 per share, will be
outstanding; provided that if any Shares are issued after the date hereof but
prior to the Effective Time in respect of Options or Warrants as set forth in
Section 1.04(a), the number of MergerSub Warrants shall be increased to reflect
any such issuances.
ARTICLE 5
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 5.01. Conduct of the Company. Except as otherwise specifically
provided in this Agreement, from the date hereof to the Effective Time, the
Board of Directors of the Company shall not approve or authorize any action that
would allow the Company and its Subsidiaries to carry on their respective
businesses other than in the ordinary and usual course of business and
consistent with past practice or any action that would prevent the Company and
its Subsidiaries from using their best efforts to (i) preserve intact their
respective present business organizations, (ii) maintain in effect all federal,
state and local licenses, approvals and authorizations, including, without
limitation, all permits that are required for the Company or any of its
Subsidiaries to carry on its business, (iii) keep available the services of
their respective key officers and employees and (iv) maintain satisfactory
relationships with their respective customers, lenders, suppliers and others
having business relationships with any of them. Without limiting the generality
of the foregoing, and except as otherwise specifically provided in this
Agreement, without the prior written consent of MergerSub, prior to the
Effective
<PAGE>
Time, the Board of Directors of the Company shall not, nor shall it authorize or
direct the Company or any Subsidiary, directly or indirectly, to:
(a) adopt or propose any change in its certificate of incorporation or
bylaws (other than as contemplated by this Agreement);
(b) except pursuant to existing agreements or arrangements (i) acquire
(by merger, consolidation or acquisition of stock or assets) any material
corporation, partnership or other business organization or division thereof, or
sell, lease or otherwise dispose of a material subsidiary or a material amount
of assets or securities; (ii) make any investment whether by purchase of stock
or securities, contributions to capital or any property transfer, or purchase
any property or assets of any other individual or entity other than the purchase
of inventory, supplies, office equipment or repairable parts in the ordinary
course of business (it being understood that purchases pursuant to the agreement
referenced in 8.02(i) are in the ordinary course of business) in the aggregate
for an amount in excess of $3,000,000; (iii) waive, release, grant, or transfer
any rights of material value; (iv) modify or change in any material respect any
existing material license, lease, contract, or other document; (v) other than
endorsements of negotiable instruments in the ordinary course, guaranties of
obligations of Subsidiaries or guaranties or other liabilities related to the
purchases of inventory, repairable parts, office equipment or supplies which
arise in the ordinary course of business, assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person which, are in excess of
$1,500,000 in the aggregate; (vi) make any loans, advances or capital
contributions to, or investments in, any other Person which, are in excess of
$1,000,000 in the aggregate or (vii) make any capital expenditure which,
individually, is in excess of $1,000,000 or, in the aggregate with any other
such expenditure, are in excess of $5,000,000;
(c) take any action that would make any representation and warranty of
the Company hereunder inaccurate in any respect at, or as of any time prior to,
the Effective Time, or omit to take any action necessary to prevent any such
representation or warranty from being inaccurate in any respect at any such
time;
(d) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
other than cash dividends and distributions by a wholly owned subsidiary of the
Company to the Company or to a subsidiary all of the capital stock which is
owned directly or indirectly by the Company, or redeem, repurchase or otherwise
acquire or offer to redeem, repurchase, or otherwise acquire any of its
securities or any securities of its subsidiaries;
<PAGE>
(e) adopt or amend any bonus, profit sharing, compensation, severance,
termination, stock option, pension, retirement, deferred compensation,
employment or employee benefit plan, agreement, trust, plan, fund or other
arrangement for the benefit and welfare of any director, officer or employee, or
(except for normal increases in the ordinary course of business that are
consistent with past practices and that, in the aggregate, do not result in a
material increase in benefits or compensation expense to the Company or any
Subsidiary) increase in any manner the compensation or fringe benefits of any
director, officer or employee or pay any benefit not required by any existing
plan or arrangement (including, without limitation, the granting of stock
options or stock appreciation rights or the removal of existing restrictions in
any benefit plans or agreements);
(f) revalue in any material respect any significant portion of its
assets, including, without limitation, writing down the value of inventory in
any material manner or write-off of notes or accounts receivable in any material
manner;
(g) pay, discharge or satisfy any material claims, liabilities or
obligations (whether absolute, accrued, asserted or unasserted, contingent or
otherwise) other than the payment, discharge or satisfaction in the ordinary
course of business, consistent with past practices, of liabilities reflected or
reserved against in the consolidated financial statements of the Company or
incurred in the ordinary course of business, consistent with past practices;
(h) make any tax election with respect to or settle or compromise any
material income tax liability;
(i) take any action other than in the ordinary course of business and
consistent with past practices with respect to accounting policies or
procedures; or
(j) agree or commit to do any of the foregoing.
SECTION 5.02. Stockholder Meeting; Proxy Material. The Company shall
cause a meeting of its stockholders (the "Company Stockholder Meeting") to be
duly called and held as soon as reasonably practicable for the purpose of voting
on the approval and adoption of this Agreement and the Merger. The Board of
Directors of the Company shall, subject to its fiduciary duties as determined in
good faith and as advised by counsel, recommend approval and adoption of this
Agreement and the Merger by the Company's stockholders. In connection with such
meeting, the Company (a) shall promptly prepare and file with the SEC, shall use
its reasonable best efforts to have cleared by the SEC and shall thereafter mail
to its stockholders as promptly as practicable the Company Proxy Statement and
all other proxy materials for such meeting, (b) subject to its fiduciary duties
as determined in good faith and as advised by counsel, shall use its reasonable
best efforts to obtain the necessary approvals by its stockholders of this
Agreement and
<PAGE>
the transactions contemplated hereby and (c) shall otherwise comply with all
legal requirements applicable to such meeting.
SECTION 5.03. Access to Information. From the date hereof until the
Effective Time, the Company shall give MergerSub, its counsel, financial
advisors, auditors and other authorized representatives full access to the
offices, properties, books and records of the Company and the Subsidiaries
during normal business hours, will furnish to MergerSub, their counsel,
financial advisors, auditors and other authorized representatives such financial
and operating data and other information as such Persons may reasonably request
and will instruct the Company's and its Subsidiaries' employees, counsel and
financial advisors to cooperate with MergerSub in its investigation of the
business of the Company and the Subsidiaries; provided that no investigation
pursuant to this Section shall affect any representation or warranty given by
the Company to MergerSub hereunder; and provided, further that any information
provided to MergerSub pursuant to this Section 5.03 shall be subject to the
Confidentiality Agreement dated as of March 19, 1997 between the Company and DLJ
Merchant Banking II, Inc. (the "Confidentiality Agreement").
SECTION 5.04. Other Offers. (a) Neither the Company nor any of its
Subsidiaries shall (whether directly or indirectly through advisors, agents or
other intermediaries), nor shall the Company or any of its Subsidiaries
authorize or permit any of its or their officers, directors, agents,
representatives, advisors or Subsidiaries to, (i) solicit, initiate or take any
action knowingly to facilitate the submission of inquiries, proposals or offers
from any Third Party (as defined below) (other than MergerSub) relating to (A)
any acquisition or purchase of 20% or more of the consolidated assets of the
Company and its Subsidiaries or of over 20% of any class of equity securities of
the Company or any of its Subsidiaries, (B) any tender offer (including a self
tender offer) or exchange offer that if consummated would result in any Third
Party beneficially owning 20% or more of any class of equity securities of the
Company or any of its Subsidiaries, (C) any merger, consolidation, business
combination, sale of substantially all assets, recapitalization, liquidation,
dissolution or similar transaction involving the Company, or any of its
Subsidiaries whose assets, individually or in the aggregate, constitute more
than 20% of the consolidated assets of the Company, other than the transactions
contemplated by this Agreement, or (D) any other transaction the consummation of
which would, or could reasonably be expected to impede, interfere with, prevent
or materially delay the Merger or which would, or could reasonably be expected
to, materially dilute the benefits to MergerSub of the transactions contemplated
hereby (collectively, "Acquisition Proposals"), or agree to or endorse any
Acquisition Proposal, or (ii) enter into or participate in any discussions or
negotiations regarding any of the foregoing, or furnish to any Third Party any
information with respect to its business, properties or assets or any of the
foregoing, or otherwise cooperate in any way with, or knowingly assist or
participate in, facilitate or encourage, any effort or attempt by any Third
Party
<PAGE>
(other than MergerSub) to do or seek any of the foregoing; provided, however,
that the foregoing shall not prohibit the Company (either directly or indirectly
through advisors, agents or other intermediaries) from (i) publicly disclosing
in a press release, in a general manner, the Company's permitted activities
hereunder, (ii) furnishing information pursuant to an appropriate
confidentiality letter (which letter shall not be less favorable to the Company
in any material respect than the Confidentiality Agreement, and a copy of which
shall be provided for informational purposes only to MergerSub) concerning the
Company and its businesses, properties or assets to a Third Party who has made a
bona fide Acquisition Proposal, (iii) engaging in discussions or negotiations
with such a Third Party who has made a bona fide Acquisition Proposal, (iv)
following receipt of a bona fide Acquisition Proposal, taking and disclosing to
its stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) under
the Exchange Act or otherwise making disclosure to its stockholders, (v)
following receipt of a bona fide Acquisition Proposal, failing to make or
withdrawing or modifying its recommendation referred to in Section 5.02 and/or
(vi) taking any non-appealable, final action ordered to be taken by the Company
by any court of competent jurisdiction but in each case referred to in the
foregoing clauses (ii) through (vi) only to the extent that the Board of
Directors of the Company shall have concluded in good faith on the basis of
advice from counsel that such action is required to prevent the Board of
Directors of the Company from breaching its fiduciary duties to the stockholders
of the Company under applicable law; provided, further, that (A) the Board of
Directors of the Company shall not take any of the foregoing actions until
reasonable notice to MergerSub of its intent to take such action shall have been
give to MergerSub; and (B) if the Board of Directors of the Company receives an
Acquisition Proposal, to the extent it may do so without breaching its fiduciary
duties as advised by counsel and as determined in good faith, and without
violating any of the conditions of such Acquisition Proposal, then the Company
shall promptly inform MergerSub of the terms and conditions of such proposal and
the identity of the person making it. Subject to the provisions of the previous
sentence, the Company shall immediately cease and cause its Subsidiaries and its
and their advisors, agents and other intermediaries to cease any and all
existing activities, discussions or negotiations with any parties (other than
MergerSub) conducted heretofore with respect to any of the foregoing, and shall
use its reasonable best efforts to cause any such parties in possession of
confidential information about the Company that was furnished by or on behalf of
the Company to return or destroy all such information in the possession of any
such party (other than MergerSub) or in the possession of any agent or advisor
of any such party. As used in this Agreement, the term "Third Party" means any
Person or "group," as described in Rule 13d- 5(b) promulgated under the Exchange
Act, other than MergerSub or any of its affiliates.
<PAGE>
(b) If a Payment Event (as hereinafter defined) occurs, the Company
shall pay to MergerSub, within two business days following such Payment Event, a
fee of $20,947,000.00.
(c) "Payment Event" shall mean that at least one enumerated event has
occurred in all of the following clauses (i)-(iii): (i) a Third Party shall have
made an Acquisition Proposal prior to the Company Stockholder Meeting, (ii) this
Agreement shall have been terminated pursuant to any of Sections 9.01(e),
9.01(f) or 9.01(g) and (iii) any Acquisition Proposal (whether or not proposed
prior to the Company Stockholders Meeting and whether or not it involves the
Third Party making the Acquisition Proposal referred to in Section 5.04(c)(i)
above) shall have been consummated within 12 months following the termination of
this Agreement.
(d) Upon the termination of this Agreement for any reason other than
(i) a termination by the Company pursuant to Section 9.01(c), (ii) a termination
by either the Company or MergerSub pursuant to Section 9.01(a), (iii) a
termination that follows a failure of the condition set forth in Section 8.01(e)
or Section 8.02(e) to be satisfied, or (iv) any termination that follows a
refusal by MergerSub to consummate the Merger because Section 3.10(a) or 3.10(h)
is not true and correct as of the Effective Time, by reason of an event that
occurs between the date hereof and the Effective Time, the Company shall
reimburse MergerSub and its affiliates not later than two business days after
submission of reasonable documentation thereof for 100% of their documented
out-of-pocket fees and expenses (including, without limitation, the reasonable
fees and expenses of their counsel and investment banking fees), actually
incurred by any of them or on their behalf in connection with this Agreement and
the transactions contemplated hereby and the arrangement, obtaining the
commitment to provide or obtaining the Financing for the transactions
contemplated by this Agreement (including fees payable to the Financing Entities
and their respective counsel) provided that the aggregate amount payable
pursuant to this Section 5.04(d) shall not exceed $8,250,000; provided further,
that (i) in the event that a fee is paid pursuant to Section 5.04(b) or (ii) in
the event of any termination of this Agreement which follows a refusal of
MergerSub to consummate the Merger by reason of the condition set forth in
Section 8.01(c) or Section 8.02(b), the aggregate amount payable pursuant to
this Section 5.04(d) shall not include any investment banking fee payable to
DLJSC as disclosed in Section 4.06 and the limit set forth in the immediately
proceeding clause shall be reduced from $8,250,000 to $5,750,000.
(e) The Company acknowledges that the agreements contained in this
Section 5.04 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, MergerSub would not enter into
this Agreement; accordingly, if the Company fails to promptly pay any amount due
pursuant to this Section 5.04, and, in order to obtain such payment, the other
party commences a suit which results in a judgment against the Company for the
<PAGE>
fee or fees and expenses set forth in this Section 5.04, the Company shall also
pay to MergerSub its costs and expenses incurred in connection with such
litigation.
(f) Sections 5.04(b)-(e) shall survive any termination of this Agreement,
however caused.
SECTION 5.05. Notices of Certain Events. The Company shall promptly
notify MergerSub of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating to or
involving or otherwise affecting the Company or any Subsidiary which, if pending
on the date of this Agreement, would have been required to have been disclosed
pursuant to Section 3.12 or which relate to the consummation of the transactions
contemplated by this Agreement.
SECTION 5.06. Resignation of Directors. Prior to the Effective Time,
the Company shall deliver to MergerSub evidence satisfactory to MergerSub of the
resignation of all directors of the Company effective at the Effective Time.
SECTION 5.07. Preferred Stock. Provided that MergerSub shall have
provided to Company reasonably in advance of the first mailing to stockholders
of the Company Proxy Statement the terms thereof, prior to the Effective Time,
the Board of Directors of the Company shall take all necessary action to
establish the terms of the Mirror Preferred Stock and file the Certificate of
Designations with the Delaware Secretary of State, all in accordance with the
applicable provisions of Delaware Law. The "Mirror Preferred Stock" shall be
Preferred Stock of the Company, the terms of and certificate of designations of
which shall be identical in all respects (except the name of the Company) to the
terms of the MergerSub Preferred Stock and the certificate of designations
therefor.
SECTION 5.08. Solvency Advice. The Company shall request an
independent advisor to deliver the advice contemplated by Section 8.03(a) as
promptly as practicable.
<PAGE>
ARTICLE 6
COVENANTS OF MERGERSUB
MergerSub agrees that:
SECTION 6.01. SEC Filings. As soon as practicable after the date of
announcement of the execution of the Merger Agreement, MergerSub shall file
(separately, or as part of the Company Proxy Statement) with the SEC, if
required, a Rule 13E-3 Transaction Statement ("Transaction Statement") with
respect to the Merger (together with any supplements or amendments thereto,
collectively the "MergerSub Disclosure Documents"). MergerSub and the Company
each agrees to correct any information provided by it for use in the MergerSub
Disclosure Documents if and to the extent that it shall have become false or
misleading in any material respect. MergerSub agrees to take all steps necessary
to cause the MergerSub Disclosure Documents as so corrected to be filed with the
SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given reasonable opportunity to review and comment on each
MergerSub Disclosure Document prior to its being filed with the SEC.
SECTION 6.02. Voting of Shares. MergerSub agrees to vote all Shares
beneficially owned by it in favor of adoption of this Agreement at the Company
Stockholder Meeting.
SECTION 6.03. Director and Officer Liability. (a) For a period of 6
years after the Effective Time, MergerSub shall cause the Surviving Corporation
to indemnify and hold harmless the present and former officers and directors of
the Company in respect of acts or omissions occurring prior to the Effective
Time to the extent provided under the Company's certificate of incorporation and
bylaws in effect on the date hereof; provided that such indemnification shall be
subject to any limitation imposed from time to time under applicable law. For a
period of 6 years after the Effective Time, MergerSub shall cause the Surviving
Corporation to provide officers' and directors' liability insurance in respect
of acts or omissions occurring prior to the Effective Time covering each such
Person currently covered by the Company's officers' and directors' liability
insurance policy on terms with respect to coverage and amount no less favorable
than those of such policy in effect on the date hereof (or, if such insurance
policy cannot be obtained, such insurance policy on terms with respect to
coverage and amount as favorable as can be obtained, subject to the proviso at
the conclusion of this sentence), provided that in satisfying its obligation
under this Section, MergerSub shall not be obligated to cause the Surviving
Corporation to pay premiums in excess of 125% of the amount per annum the
Company paid in its last full fiscal year, which amount has been disclosed to
MergerSub.
<PAGE>
(b) In furtherance of and not in limitation of the preceding
paragraph, MergerSub agrees that the officers and directors of the Company that
are defendants in all litigation commenced by stockholders of the Company with
respect to (x) the performance of their duties as such officers and/or directors
under federal or state law (including litigation under federal and state
securities laws) and (y) the Merger, including, without limitation, any and all
such litigation commenced on or after the date of this Agreement (the "Subject
Litigation") shall be entitled to be represented, at the reasonable expenses of
the Company, in the Subject Litigation by one counsel (and Delaware counsel if
appropriate and one local counsel in each jurisdiction in which a case is
pending) each of which counsel shall be selected by a plurality of such director
defendants; provided that the Company shall not be liable for any settlement
effected without its prior written consent (which consent shall not be
unreasonably withheld) and that a condition to the indemnification payments
provided in Section 6.03(a) shall be that such officer/director defendant not
have settled any Subject Litigation without the consent of the Surviving
Corporation (such consent not to be unreasonably withheld) and, prior to the
Effective Time, MergerSub; and provided further that neither MergerSub nor the
Surviving Corporation shall have any obligation hereunder to any
officer/director defendant when and if a court of competent jurisdiction shall
ultimately determine, and such determination shall have become final and
non-appealable, that indemnification of such officer/director defendant in the
manner contemplated hereby is prohibited by applicable law.
SECTION 6.04. Employee Plans and Benefit Arrangements. (a) From and
after the Effective Time, subject to applicable law, the Surviving Corporation
and its subsidiaries will honor obligations of the Company and its Subsidiaries
incurred prior to the Effective Time under all existing Employee Plans and
Benefit Arrangements (as defined in Section 3.14).
(b) MergerSub agrees that, for at least one year from the Effective
Time, subject to applicable law, the Surviving Corporation and its Subsidiaries
will provide benefits to their employees which will, in the aggregate, be
comparable to those currently provided by the Company and its subsidiaries to
their employees. Notwithstanding the foregoing, nothing herein shall obligate or
require the Surviving Corporation or any of its subsidiaries to provide its
employees with a plan or arrangement similar to any equity based compensation
plans currently maintained by the Company and nothing herein shall otherwise
limit the Surviving Corporation's right to amend, modify or terminate any
Employee Plan or Benefit Arrangement, as defined in Section 3.14.
(c) It is MergerSub's current intention to maintain the Surviving
Corporation's headquarters at its present location or another location in the
greater Philadelphia area.
<PAGE>
SECTION 6.05. Financing. MergerSub shall use its reasonable best
efforts to obtain the Financing. In the event that any portion of such Financing
becomes unavailable, regardless of the reason therefor, MergerSub will use its
reasonable best efforts to obtain alternative financing on substantially
comparable or more favorable terms from other sources.
SECTION 6.06. NASDAQ Listing. MergerSub will not take any action, for
at least three years after the Effective Time of the Merger, to cause the
Company Stock to be de-listed from The NASDAQ National Market System ("NASDAQ");
provided, however, that MergerSub may cause or permit the Company Stock to be
de-listed in connection with any transaction which results in the termination of
registration of such securities under Section 12 of the Exchange Act, and
provided, further, that nothing in this Section 6.06 shall require the Company
to take any affirmative action to prevent the Company Stock from being de-listed
by NASDAQ if the Company Stock ceases to meet the applicable listing standards.
SECTION 6.07. Access to Information. From the date hereof until the
Effective Time, MergerSub shall give the Company and its independent advisor any
such information regarding MergerSub as may be necessary to permit such
independent advisor to render the advice to be delivered to the Company's Board
of Directors pursuant to Section 8.03(b).
ARTICLE 7
COVENANTS OF MERGERSUB AND THE COMPANY
The parties hereto agree that:
SECTION 7.01. Best Efforts. Subject to the terms and conditions of this
Agreement, each party will use its reasonable best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement. Each party shall also refrain from
taking, directly or indirectly, any action contrary to or inconsistent with the
provisions of this Agreement, including action which would impair such party's
ability to consummate the Merger and the other transactions contemplated hereby.
Without limiting the foregoing, the Company and its Board of Directors shall use
their reasonable best efforts to (a) take all action necessary so that no state
takeover statute or similar statute or regulation is or becomes applicable to
the Merger or any of the other transactions contemplated by this Agreement and
(b) if any state takeover statute or similar statute or regulation becomes
applicable to any of the foregoing, take all reasonable action necessary so that
the Merger and the other
<PAGE>
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the other
transactions contemplated by this Agreement.
SECTION 7.02. Certain Filings. (a) The Company and MergerSub shall use
their respective reasonable best efforts to take or cause to be taken, (i) all
actions necessary, proper or advisable by such party with respect to the prompt
preparation and filing with the SEC a registration statement on Form S-4 (the
"Registration Statement"), the Company Disclosure Documents and the MergerSub
Disclosure Documents, (ii) such actions as may be required to have the
Registration Statement declared effective under the Securities Act and to have
the Company Proxy Statement cleared by the SEC, in each case as promptly as
practicable, and (iii) such actions as may be required to have to be taken under
state securities or applicable Blue Sky laws in connection with the issuance of
the securities contemplated hereby.
(b) The Company agrees to provide, and will cause its Subsidiaries and
its and their respective officers, employees and advisors to provide, all
necessary cooperation in connection with the arrangement of any financing to be
consummated contemporaneous with or at or after the Closing in respect of the
transactions contemplated by this Agreement, including without limitation, (x)
participation in meetings, due diligence sessions and road shows, (y) the
preparation of offering memoranda, private placement memoranda, prospectuses and
similar documents, and (z) the execution and delivery of any commitment letters,
underwriting or placement agreements, pledge and security documents, other
definitive financing documents, or other requested certificates or documents,
including a certificate of the chief financial officer of the Company with
respect to solvency matters, comfort letters of accountants and legal opinions
as may be requested by MergerSub; provided that the form and substance of any of
the material documents referred to in clause (y), and the terms and conditions
of any of the material agreements and other documents referred to in clause (z),
shall be substantially consistent with the terms and conditions of the financing
required to satisfy the condition precedent set forth in Section 8.01(e).
(c) The Company and MergerSub shall cooperate with one another (i) in
determining whether any action by or in respect of, or filing with, any
governmental body, agency or official, or authority is required, or any actions,
consents, approvals or waivers are required to be obtained from parties to any
material contracts, in connection with the consummation of the transactions
contemplated by this Agreement (including the Financing) and (ii) in seeking any
such actions, consents, approvals or waivers or making any such filings,
furnishing information required in connection therewith or with the Registration
Statement, the Company Disclosure Documents and MergerSub Disclosure
<PAGE>
Documents and seeking timely to obtain any such actions, consents, approvals or
waivers.
SECTION 7.03. Public Announcements. MergerSub and the Company will
consult with each other before issuing any press release or making any public
statement with respect to this Agreement and the transactions contemplated
hereby and, except for any press release or public statement as may be required
by applicable law or any listing agreement with any national securities
exchange, will not issue any such press release or make any such public
statement prior to such consultation.
SECTION 7.04. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or MergerSub, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or MergerSub, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets of the Company acquired or to be acquired by the Surviving Corporation as
a result of, or in connection with, the Merger.
ARTICLE 8
CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Obligations of Each Party. The
obligations of the Company and MergerSub to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) this Agreement shall have been adopted by the stockholders of the
Company in accordance with Delaware Law;
(b) any applicable waiting period under the HSR Act relating to the
Merger shall have expired or been terminated;
(c) no provision of any applicable law or regulation and no judgment,
order, decree or injunction shall prohibit or restrain the consummation of the
Merger; provided, however, that the Company and MergerSub shall each use its
reasonable best efforts to have any such judgment, order, decree or injunction
vacated; and
(d) all consents, approvals and licenses of any governmental or other
regulatory body required in connection with the execution, delivery and
performance of this Agreement and for the Surviving Corporation to conduct the
business of the Company in substantially the manner now conducted, shall have
<PAGE>
been obtained, unless the failure to obtain such consents, authorizations,
orders or approvals would not have a Material Adverse Effect after giving effect
to the transactions contemplated by this Agreement (including the Financing);
(e) the funds in an amount at least equal to the Required Amounts
shall have been made available to MergerSub and/or Operating Co. as
contemplated in Section 4.07; and
(f) the Registration Statement shall have been declared effective and
no stop order suspending the effectiveness of the Registration Statement shall
be in effect and no proceedings for such purpose shall be pending before or
threatened by the SEC.
SECTION 8.02. Conditions to the Obligations of MergerSub. The
obligations of MergerSub to consummate the Merger are subject to the
satisfaction of the following further conditions:
(a) the Company shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time, the representations and warranties of the Company contained in
this Agreement and in any certificate or other writing delivered by the Company
pursuant hereto shall be true in all material respects at and as of the
Effective Time (provided that representations made as of a specific date shall
be required to be true as of such date only) as if made at and as of such time
and MergerSub shall have received a certificate signed by any Vice President of
the Company to the foregoing effect;
(b) There shall not be instituted or pending (x) any action or
proceeding by any government or governmental authority or agency, or (y) any
action or proceeding by any other person, that has a reasonable likelihood of
success, in any case referred to in clauses (x) or (y), before any court or
governmental authority or agency, (i) challenging or seeking to make illegal, to
delay materially or otherwise directly or indirectly to restrain or prohibit the
consummation of the Merger or seeking to obtain material damages or otherwise
directly or indirectly relating to the transactions contemplated by this
Agreement, (ii) seeking to restrain or prohibit MergerSub's (including its
Subsidiaries and affiliates) ownership or operation of all or any material
portion of the business or assets of the Company and its Subsidiaries, taken as
a whole, or to compel MergerSub or any of its Subsidiaries or affiliates to
dispose of or hold separate all or any material portion of the business or
assets of the Company and its Subsidiaries, taken as a whole, (iii) seeking to
impose or confirm material limitations on the ability of MergerSub or any of its
Subsidiaries or affiliates to effectively control the business or operations of
the Company and its Subsidiaries, taken as a whole, or effectively to exercise
full rights of ownership of the Shares or Company Stock, including, without
limitation, the right to vote any Shares or Company Stock acquired or
<PAGE>
owned by MergerSub or any of its Subsidiaries or affiliates on all matters
properly presented to the Company's stockholders, or (iv) seeking to require
divestiture by MergerSub or any of its Subsidiaries or affiliates of any Shares
or Company Stock, and no court, arbitrator or governmental body, agency or
official shall have issued any judgment, order, decree or injunction, and there
shall not be any statute, rule or regulation, that, in the sole judgment of
MergerSub is likely, directly or indirectly, to result in any of the
consequences referred to in the preceding clauses (i) through (iv);
(c) MergerSub shall have received all documents it may reasonably
request relating to the existence of the Company and the Subsidiaries and the
authority of the Company for this Agreement, all in form and substance
satisfactory to MergerSub;
(d) the holders of not more than 3% of the outstanding Shares shall
have demanded appraisal of their Shares in accordance with Delaware Law;
(e) MergerSub shall be reasonably satisfied that the Merger will be
recorded as a "recapitalization" for financial reporting purposes;
(f) MergerSub shall have received undertakings in writing from each
person, if any, who according to counsel for the Company might reasonably be
considered "affiliates" of the Company within the meaning of Rule 145(c) of the
SEC pursuant to the Securities Act (each, an "Affiliate"), in each case in form
and substance satisfactory to counsel for MergerSub providing (i) such Affiliate
will notify MergerSub in writing before offering for sale or selling or
otherwise disposing of any shares of Company Stock owned by such Affiliate and
(ii) no such sale or other disposition shall be made unless and until the
Affiliate has supplied to MergerSub an opinion of counsel for the Affiliate
(which opinion and counsel shall be reasonably satisfactory to MergerSub) to the
effect that such transfer is not in violation of the Securities Act;
(g) the Registration Rights Agreement dated as of October 20, 1995,
entered into among the Company and the Significant Security Holders (as defined
therein), shall have been amended in the manner previously agreed;
(h) The certificate of designation for the Mirror Preferred Stock shall
have been accepted for filing by the Delaware Secretary of State; and
(i) Total indebtedness (long and short term) of the Company and its
Subsidiaries as of the Effective Time, excluding any indebtedness attributable
to "Phase II" as defined in the Agreement for Services for End-Of-Life Inventory
Management dated as of June 7, 1996 between Operating Co. and Compaq Computer
Corporation ("Attributable Indebtedness") shall not exceed
<PAGE>
$240,000,000 and shall not exceed $255,000,000 including Attributable
Indebtedness.
SECTION 8.03. Condition to the Obligation of the Company. The
obligation of the Company to consummate the Merger is subject to the
satisfaction of the following further conditions:
(a) MergerSub shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the
Effective Time, the representations and warranties of MergerSub contained in
this Agreement and in any certificate or other writing delivered by either of
them pursuant hereto shall be true in all material respects at and as of the
Effective Time (except for any inaccuracies in such representations and
warranties that are solely due to an action taken after the date hereof of the
type described in Section 5.01 which is taken specifically in accordance with
Section 5.01) (provided that representations made as of a specific date shall be
required to be true as of such date only) as if made at and as of such time and
the Company shall have received a certificate signed by any Vice President of
MergerSub to the foregoing effect; and
(b) The Board of Directors of the Company shall have received advice,
reasonably satisfactory to the Board, from an independent advisor confirming the
belief of MergerSub set forth in the last sentence of Section 4.07.
ARTICLE 9
TERMINATION
SECTION 9.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(a) by mutual written consent of the Company and MergerSub;
(b) by either the Company or MergerSub, if the Merger has not been
consummated by the later of (x) the earlier of September 15, 1997 and ten
business days after the Company Stockholders Meeting, and (y) August 15, 1997,
provided that the party seeking to exercise such right is not then in breach in
any material respect of any of its obligations under this Agreement;
(c) by either the Company or MergerSub, if MergerSub (in the case of
termination by the Company), or the Company (in the case of termination by
MergerSub) shall have breached in any material respect any of its obligations
under this Agreement or any representation and warranty of MergerSub (in the
<PAGE>
case of termination by the Company) or the Company (in the case of termination
by MergerSub) shall have been incorrect in any material respect when made or at
any time prior to the Closing;
(d) by either the Company or MergerSub, if there shall be any law or
regulation that makes consummation of the Merger illegal or otherwise prohibited
or if any judgment, injunction, order or decree enjoining MergerSub or the
Company from consummating the Merger is entered and such judgment, injunction,
order or decree shall become final and nonappealable;
(e) by MergerSub if the Board of Directors of the Company shall have
withdrawn or modified or amended, in a manner adverse to MergerSub, its approval
or recommendation of this Agreement and the Merger or its recommendation that
stockholders of the Company adopt and approve this Agreement and the Merger, or
approved, recommended or endorsed any proposal for a transaction other than the
Merger (including a tender or exchange offer for Shares) or if the Company has
failed to call the Company Stockholders Meeting or failed as promptly as
reasonably practicable after the Registration Statement is declared effective to
mail the Company Proxy Statement to its stockholders or failed to include in
such statement the recommendation referred to above;
(f) by the Company if prior to the Effective Time the Board of
Directors of the Company shall have withdrawn or modified or amended, in a
manner adverse to MergerSub, its approval or recommendation of this Agreement
and the Merger or its recommendation that stockholders of the Company adopt and
approve this Agreement and the Merger in order to permit the Company to execute
a definitive agreement providing for the acquisition of the Company or in order
to approve a tender or exchange offer for any or all of the Shares, in either
case, as determined by the Board of Directors of the Company to be on terms more
favorable to the Company's stockholders than the Merger from a financial point
of view, provided that the Company shall be in compliance with Section 5.04;
(g) by either the Company or MergerSub if, at a duly held
stockholders meeting of the Company or any adjournment thereof at which this
Agreement and the Merger is voted upon, the requisite stockholder adoption and
approval shall not have been obtained.
The party desiring to terminate this Agreement pursuant to Sections
9.01(b)-(g) shall give written notice of such termination to the other party in
accordance with Section 10.01.
SECTION 9.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 9.01, this Agreement shall become void and of no effect with
<PAGE>
no liability on the part of any party hereto, except that the agreements
contained in Sections 5.04(b)-(f) and 10.04 shall survive the termination
hereof.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including telecopy or similar writing)
and shall be given,
if to MergerSub, to:
Peter T. Grauer
C/O DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, New York 10172
Telecopy: 212-892-7552
with a copy to:
George R. Bason, Jr.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: (212) 450-4800
if to the Company, to:
Thomas M. Molchan
DecisionOne Holdings Corp.
50 East Swedesford Road
Frazer, PA 19355
Telecopy: (610) 408-3820
with a copy to:
David R. King
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103-6993
Telecopy: (215) 963-5299
<PAGE>
or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective (a) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.
SECTION 10.02. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement except for the agreements
set forth in Sections 6.03, 6.04, 6.06 and 7.04 which will survive the Effective
Time and Sections 5.04(b)-(f) and 10.04 which will survive any termination
hereof.
SECTION 10.03. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Company and MergerSub or in the case of a waiver, by the party against
whom the waiver is to be effective; provided that after the adoption of this
Agreement by the stockholders of the Company, no such amendment or waiver shall,
without the further approval of such stockholders, alter or change (i) the
amount or kind of consideration to be received in exchange for any shares of
capital stock of the Company, (ii) any term of the certificate of incorporation
of the Surviving Corporation or (iii) any of the terms or conditions of this
Agreement if such alteration or change would adversely affect the holders of any
shares of capital stock of the Company.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 10.04. Expenses. Except as provided in Section 5.04, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
SECTION 10.05. Successors and Assigns; Benefit. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto. Nothing in this
Agreement, expressed or implied, shall confer on any Person other than the
parties hereto, and their respective successors and assigns, any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except that the present and former
<PAGE>
officers and directors of the Company shall have the rights set forth in Section
6.03 hereof.
SECTION 10.06. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware, without
reference to the conflicts of laws rules thereof.
SECTION 10.07. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Knowledge Defined. When used with respect to the Company,
"knowledge" means the actual knowledge of any of the following officers of the
Company or any of their successors: Kenneth Draeger, Stephen Felice, Thomas
Fitzpatrick and Thomas Molchan.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
DECISIONONE HOLDINGS CORP.
By: /s/ Kenneth Draeger
Name: Kenneth Draeger
Title: Chief Executive Officer
QUAKER HOLDING CO.
By: /s/ Peter T. Grauer
Name: Peter T. Grauer
Title: President
CONFORMED COPY
Exhibit 3
SUBSCRIPTION AGREEMENT
dated as of
August 7, 1997
among
QUAKER HOLDING CO.
and
THE BUYERS NAMED HEREIN
relating to the purchase and sale
of
Common Stock
of
Quaker Holding Co.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Page
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions......................................................................1
ARTICLE 2
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale................................................................3
SECTION 2.02. Closing..........................................................................3
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
SECTION 3.01. Corporate Existence and Power....................................................4
SECTION 3.02. Corporate Authorization..........................................................4
SECTION 3.03. Governmental Authorization.......................................................5
SECTION 3.04. Noncontravention.................................................................5
SECTION 3.05. Capitalization and Voting Rights.................................................5
SECTION 3.06. Valid Issuance of Common Stock...................................................6
SECTION 3.07. Litigation.......................................................................6
SECTION 3.08. Brokers or Finders' Fees.........................................................6
SECTION 3.09. Newly Formed Corporation.........................................................6
SECTION 3.10. Meaning of Seller................................................................6
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYERS
SECTION 4.01. Existence and Power..............................................................7
SECTION 4.02. Authorization....................................................................7
SECTION 4.03. Governmental Authorization.......................................................7
SECTION 4.04. Purchase for Investment..........................................................7
SECTION 4.05. Private Placement................................................................7
SECTION 4.06. Litigation.......................................................................9
SECTION 4.07. Brokers or Finders' Fees.........................................................9
ARTICLE 5
CONDITIONS TO CLOSING
SECTION 5.01. Conditions to Obligations of Each Buyer and Seller...............................9
SECTION 5.02. Conditions to Obligation of Each Buyer...........................................9
SECTION 5.03. Conditions to Obligation of Seller..............................................10
<PAGE>
ARTICLE 6
SURVIVAL; INDEMNIFICATION
SECTION 6.01. Survival........................................................................10
SECTION 6.02. Indemnification.................................................................11
SECTION 6.03. Procedures and Third Party Claims...............................................11
SECTION 6.04. Calculation of Damages..........................................................12
SECTION 6.05. Exclusivity.....................................................................13
--
ARTICLE 7
TERMINATION
SECTION 7.01. Grounds for Termination.........................................................13
SECTION 7.02. Effect of Termination...........................................................13
ARTICLE 8
MISCELLANEOUS
SECTION 8.01. Notices.........................................................................14
SECTION 8.02. Amendments and Waivers..........................................................15
SECTION 8.03. Expenses........................................................................15
SECTION 8.04. Successors and Assigns..........................................................15
SECTION 8.05. Governing Law...................................................................15
SECTION 8.06. Jurisdiction....................................................................15
SECTION 8.07. Waiver Of Jury Trial............................................................16
SECTION 8.08. Counterparts; Third Party Beneficiaries.........................................16
SECTION 8.09. Entire Agreement................................................................16
SECTION 8.10. Captions........................................................................16
SECTION 8.11. Severability....................................................................16
SECTION 8.12. Interpretation..................................................................16
Schedule A Schedule of Investors
Exhibit A Certificate of Incorporation
</TABLE>
<PAGE>
SUBSCRIPTION AGREEMENT
AGREEMENT dated as of August 7, 1997 between Quaker Holding Co., a
Delaware corporation ("Seller"), and the Persons named on Schedule A hereto
(each a "Buyer" and collectively, the "Buyers").
W I T N E S S E T H :
WHEREAS, the Seller has agreed to merge with and into DecisionOne
Holdings Corp. (the "Company") on the terms and conditions set forth in the
Agreement and Plan of Merger dated as of May 4, 1997 (the "Merger") between
Seller and the Company (as subsequently amended, the "Merger Agreement");
WHEREAS, to finance, in part, the payment of the consideration payable
in the Merger, Seller intends to issue shares of common stock, par value $0.01
per share (the "Common Stock" or the "Securities");
WHEREAS, all of the outstanding capital stock of the Seller is
currently owned by DLJ Merchant Banking Partners II, L.P. ("DLJMB") and
affiliated funds and entities (collectively, the "DLJMB Funds");
WHEREAS, certain institutional investors wish to invest in the Seller
incident to the Merger;
WHEREAS, Seller desires to issue and sell the Common Stock to each of
the Buyers, and each of the Buyers desires to purchase the Common Stock from
Seller, upon the terms and subject to the conditions hereinafter set forth;
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein, have
the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person.
"Closing Date" means the date of the Closing.
<PAGE>
"Common Share" means one share of Common Stock.
"Investors' Agreement" means the Investors' Agreement dated as of the
date hereof among Quaker Holding Co., DLJ Merchant Banking Partners II, L.P.,
DLJ Merchant Banking Partners II-A, L.P., DLJ Offshore Partners II, C.V., DLJ
Diversified Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ Millenium
Partners, L.P., DLJ Funding II, Inc., DLJ EAB Partners, L.P., UK Investment Plan
1997 Partners, DLJ First ESC, LLC, and certain other shareholders listed on the
signature pages thereto.
"Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest or encumbrance in respect of such
property or asset.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"1933 Act" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"Tax" means, with respect to any Person, any net income tax, or
franchise tax based on net income including any alternative or add-on minimum
tax, together with any interest, penalty, addition to tax or additional amount
due from such Person imposed by any governmental authority (domestic or foreign)
responsible for the imposition of any such tax.
"Tax Benefit" means any deduction, amortization, exclusion from income
or other allowance.
"Transaction Documents" means this Agreement, the Merger Agreement
and the Investors' Agreement.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
Accredited Investor 4.06(h)
Certificate of Incorporation 3.08
Claim 6.03
<PAGE>
Closing 2.02
Common Stock Recitals
Company Recitals
Damages 6.02
DLJMB Recitals
DLJMB Funds Recitals
Indemnified Party 6.03
Indemnifying Party 6.03
Purchase Price 2.01
Securities Recitals
Third Party Claim 6.03
ARTICLE 2
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, Seller agrees to issue and sell to each Buyer, and
each Buyer agrees, severally and not jointly, to purchase from Seller the Common
Stock set forth opposite such Buyer's name on Schedule A hereto at the Closing.
The purchase price for the Common Stock (the "Purchase Price") is the amount in
cash specified on Schedule A hereto. The Purchase Price shall be paid as
provided in Section 2.02.
SECTION 2.02. Closing. The closing (the "Closing") of the purchase and
sale of the Common Stock hereunder shall take place at the offices of Davis Polk
& Wardwell, 450 Lexington Avenue, New York, New York, as soon as possible, but
in no event later than five business days, after satisfaction of the conditions
set forth in Article 5, or at such other time or place as Buyers and Seller may
agree. At the Closing:
(a) Each Buyer shall deliver to Seller, in immediately available
funds, the Aggregate Purchase Price set forth opposite such Buyer's name on
Schedule A hereto, by wire transfer (or other means acceptable to Seller) to an
account of Seller with a bank in New York City designated by Seller, by notice
to such Buyer, not later than two business days prior to the Closing Date.
(b) Seller shall deliver to each Buyer certificates for the Common
Shares duly registered in the name of such Buyer.
(c) If the Closing has occurred but the Merger is not consummated
prior to the close of business on Friday, August 8, 1997, then Seller shall
immediately
<PAGE>
deliver to each Buyer, against delivery by such Buyer of the stock certificates
representing the shares of Common Stock purchased by such Buyer, the Aggregate
Purchase Price paid to Seller by such Buyer (as set forth opposite such Buyer's
name on Schedule A hereto), and this Agreement shall thereupon be terminated.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to each Buyer as of the date hereof and
as of the Closing Date that:
SECTION 3.01. Corporate Existence and Power. Seller is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted and as proposed to be conducted.
SECTION 3.02. Corporate Authorization. The execution, delivery and
performance by Seller of each of the Transaction Documents and the consummation
of the transactions contemplated hereby and thereby (including the issuance and
sale of the Common Stock) are within Seller's corporate powers and have been
duly authorized by all necessary corporate action on the part of Seller. Each of
the Transaction Documents constitutes a valid and binding agreement of Seller,
enforceable against Seller in accordance with its respective terms, except (i)
as limited by the applicable bankruptcy, insolvency, reorganization, moratorium,
and other laws of general application affecting enforcement or creditors' rights
generally, or (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
SECTION 3.03. Governmental Authorization. The execution, delivery and
performance by Seller of each of the Transaction Documents and the consummation
of the transactions contemplated hereby and thereby require no order, license,
consent, authorization or approval of, or exemption by, or action by or in
respect of, or notice to, or filing or registration with, any governmental body,
agency or official except such as have been obtained.
SECTION 3.04. Noncontravention. The execution, delivery and performance
by Seller of each of the Transaction Documents and the consummation of the
transactions contemplated hereby and thereby do not and will not (i) violate the
certificate of incorporation or bylaws of Seller, (ii) violate any applicable
law, rule, regulation, judgment, injunction, order or decree, (iii) require any
consent or other action by any Person under, constitute a default under (with
due notice or lapse of time or both), or give rise to any right of termination,
cancellation or acceleration of any right or obligation of Seller or to a loss
of any benefit to which Seller is entitled under any provision of any agreement
or other
<PAGE>
instrument binding upon Seller or any of Seller's assets or properties or (iv)
result in the creation or imposition of any material Lien on any property or
asset of Seller.
SECTION 3.05. Capitalization and Voting Rights. (a) The authorized
capital stock of the Seller consists of 30,000,000 shares of Common Stock and
15,000,000 shares of preferred stock, and the outstanding capital stock of the
Seller immediately prior to the Closing is 101 shares of Common Stock and no
shares of preferred stock. The rights, privileges and preferences of the Common
Stock are set forth in the Certificate of Incorporation attached hereto as
Exhibit A (the "Certificate of Incorporation").
(b) Immediately following the Closing the outstanding capital stock of
the Seller will be 10,918,979 shares of Common Stock. 148,400 warrants to
purchase 281,960 shares of Common Stock will be issued shortly after Closing to
purchasers of Seller's 11 1/2% Senior Discount Debentures due 2008.
(c) Except as set forth in this Section 3.05 there are, and immediately
after the Closing there will be, no outstanding (i) shares of capital stock or
voting securities of the Seller, (ii) securities of the Seller convertible into
or exchangeable for shares of capital stock or voting securities of the Seller,
(iii) options or other rights to acquire from the Seller, or other obligation of
the Seller to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of the
Seller or (iv) other than as expressly permitted in the Transaction Documents or
employment plans, no obligation of the Seller to repurchase or otherwise acquire
or retire any shares of capital stock or any convertible securities, rights or
options of the type described in (i), (ii), or (iii).
SECTION 3.06. Valid Issuance of Common Stock. The shares of Common
Stock which are being issued to the Buyers hereunder, have been duly and validly
authorized and when issued, sold and delivered in accordance with the terms
hereof for the consideration expressed herein, will be fully paid and
nonassessable, and based in part on the representations of the Buyers herein,
will be validly issued in compliance with all applicable federal and state
securities laws.
SECTION 3.07. Litigation. There is no action, suit, investigation or
proceeding pending against, or to the knowledge of Seller, threatened against or
affecting Seller or any of its respective properties before any court or
arbitrator or any governmental body, agency or official which in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by this Agreement or which could reasonably be
expected to have a material adverse effect on the business, financial condition,
properties or operations of Seller, nor is Seller aware that there is any basis
for the foregoing.
<PAGE>
SECTION 3.08. Brokers or Finders' Fees. Other than Donaldson, Lufkin &
Jenrette Securities Corporation there is no investment banker, broker, finder or
other intermediary which has been retained by, will be retained by, or is
authorized to act on behalf of Seller who might be entitled to any fee or
commission from the Seller in connection with the transactions contemplated by
this Agreement.
SECTION 3.09. Newly Formed Corporation. Seller was incorporated on
April 30, 1997 in the State of Delaware solely for the purpose of effectuating
the transactions contemplated in this Agreement and the Merger Agreement and has
not conducted any business or entered into any agreements or commitments except
with respect to the foregoing.
SECTION 3.10. Meaning of Seller. Except as otherwise specifically
provided herein, references to the Seller contained in this Article 3 shall be
construed to refer to the Seller immediately prior to the consummation of the
transactions contemplated by the Merger Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYERS
Each Buyer represents and warrants to Seller, severally as to itself
only and not jointly or as to any other Buyer, as of the date hereof and as of
the Closing Date that:
SECTION 4.01. Existence and Power. Such Buyer, if not an individual, is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all powers (corporate, partnership or
otherwise) and all material governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted. Such
Buyer, if an individual, has the legal capacity to enter into this Agreement and
the Investors' Agreement.
SECTION 4.02. Authorization. The execution, delivery and performance by
such Buyer of each of this Agreement and the Investors' Agreement and the
consummation of the transactions contemplated hereby and thereby are within the
powers (corporate, partnership or otherwise) of such Buyer and have been duly
authorized by all necessary action on the part of such Buyer. Each of this
Agreement and the Investors' Agreement constitutes a valid and binding agreement
of such Buyer, enforceable in accordance with their respective terms, except (i)
as limited by the applicable bankruptcy, insolvency, reorganization, moratorium,
and other laws of general application affecting enforcement or creditors' rights
generally, or (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
<PAGE>
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by such Buyer of this Agreement and the Investors' Agreement and the
consummation of the transactions contemplated hereby and thereby require no
order, license, consent, authorization or approval of, or exemption by, or
action by or in respect of, or notice to, or filing or registration with, any
governmental body, agency or official.
SECTION 4.04. Purchase for Investment. Such Buyer is purchasing the
Common Stock for investment for its own account and not with a view to, or for
sale in connection with, any distribution thereof.
SECTION 4.05. Private Placement. (a) Such Buyer understands that (i)
the offering and sale of the Securities hereby is intended to be exempt from
registration under the 1933 Act and (ii) there is only a limited market for the
Common Stock, and there can be no assurance that any Buyer will be able to sell
or dispose of the Common Stock to be purchased by such Buyer.
(b) Such Buyer's financial situation is such that such Buyer
can afford to bear the economic risk of holding the Common Stock acquired
hereunder for an indefinite period of time, and such Buyer can afford to suffer
the complete loss of the investment in the Common Stock .
(c) Such Buyer's knowledge and experience in financial and
business matters are such that it is capable of evaluating the merits and risks
of the investment in the Common Stock, or such Buyer has been advised by a
representative possessing such knowledge and experience.
(d) Such Buyer understands that the Common Stock acquired
hereunder are a speculative investment which involves a high degree of risk of
loss of the entire investment therein, that there are substantial restrictions
on the transferability of the Common Stock as set forth in the Investors'
Agreement, and that for an indefinite period following the date hereof there
will be no (or only a limited) public market for the Common Stock and that,
accordingly, it may not be possible for such Buyer to sell the Common Stock in
case of emergency or otherwise.
(e) Such Buyer and its representatives, including, to the
extent it deems appropriate, its professional, financial, tax and other
advisors, have reviewed all documents provided to them in connection with the
investment in the Common Stock, and such Buyer understands and is aware of the
risks related to such investment.
(f) Such Buyer and its representatives have been given the
opportunity to examine all documents and to ask questions of, and to receive
answers from, Seller and its representatives concerning the terms and conditions
<PAGE>
of the acquisition of the Common Stock and related matters and to obtain all
additional information which such Buyer or its representatives deem necessary.
(g) All information which such Buyer has provided to Seller
and its representatives concerning such Buyer and such Buyer's financial
position is true, complete and correct, and such Buyer agrees to promptly notify
Seller if at any time this ceases to be the case prior to the Closing.
(h) Such Buyer is an "accredited investor" as such term is
defined in Regulation D under the 1933 Act.
SECTION 4.06. Litigation. There is no action, suit, investigation or
proceeding pending against, or to the knowledge of such Buyer threatened against
or affecting, such Buyer before any court or arbitrator or any governmental
body, agency or official which in any manner challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated by this
Agreement or the Investors' Agreement.
SECTION 4.07. Brokers or Finders' Fees. There is no investment banker,
broker, finder or other intermediary which has been retained by, will be
retained by or is authorized to act on behalf of such Buyer who might be
entitled to any fee or commission from the Company, Seller or the DLJ entities
upon consummation of the transactions contemplated by this Agreement (as defined
in the Investors' Agreement of even date herewith).
ARTICLE 5
CONDITIONS TO CLOSING
SECTION 5.01. Conditions to Obligations of Each Buyer and Seller. The
obligations of Buyer and Seller to consummate the Closing are subject to the
satisfaction of the following conditions:
(a) No provision of any applicable law, rule or regulation and no
judgment, injunction, order or decree by any governmental entity of
competent jurisdiction shall prohibit the consummation of the Closing
or the Merger.
(b) All material actions by or in respect of, or filings with, any
governmental body, agency, official or authority required to permit the
consummation of the Closing shall have been taken, made or obtained.
(c) The conditions to the consummation of the Merger
Agreement (other than the condition set forth in Section 8.01(e)
<PAGE>
thereof, which shall be reasonably certain to occur immediately after
the Closing) shall have been satisfied or waived.
SECTION 5.02. Conditions to Obligation of Each Buyer. The obligation of
each Buyer to consummate the Closing is subject to the satisfaction of the
following further conditions:
(a) (i) Seller shall have performed in all material respects all of
its obligations hereunder required to be performed by it on or prior to
the Closing Date and (ii) the representations and warranties of Seller
contained in this Agreement and in any certificate or other writing
delivered by Seller pursuant hereto shall be true in all material
respects when made and at and as of the Closing Date, as if made at and
as of such date.
(b) Such Buyer shall have received all documents it may reasonably
request relating to the existence of Seller and the authority of Seller
for this Agreement, all in form and substance reasonably satisfactory
to such Buyer.
SECTION 5.03. Conditions to Obligation of Seller. The obligation of
Seller to consummate the Closing with respect to any Buyer is subject to the
satisfaction of the following further conditions:
(a) (i) Such Buyer shall have performed in all material
respects all of its obligations hereunder required to be performed by
it at or prior to the Closing Date and (ii) the representations and
warranties of such Buyer contained in this Agreement and in any
certificate or other writing delivered by such Buyer pursuant hereto
shall be true in all material respects when made and at and as of the
Closing Date, as if made at and as of such date.
(b) Seller shall have received all documents it may reasonably
request relating to the existence of such Buyer and the authority of
such Buyer for this Agreement, all in form and substance reasonably
satisfactory to Seller.
ARTICLE 6
SURVIVAL; INDEMNIFICATION
SECTION 6.01. Survival. The representations and warranties of the
parties hereto contained in this Agreement or in any certificate delivered
pursuant hereto or in connection herewith shall survive the Closing until twelve
months after the Closing Date, provided that the representations and warranties
contained in
<PAGE>
Sections 3.01, 3.02, 3.04, 3.05, 3.06 and 4.01 shall survive indefinitely for
the maximum period permitted by applicable law, if longer. Notwithstanding the
preceding sentence, any representation or warranty in respect of which indemnity
may be sought under this Agreement shall survive the time at which it would
otherwise terminate pursuant to the preceding sentence, if notice of the
inaccuracy or breach thereof giving rise to such right of indemnity shall have
been given to the party against whom such indemnity may be sought prior to such
time, but only as to such inaccuracy or breach. A breach of any representation
or warranty made in this Agreement shall not affect in any manner whatsoever the
relative rights and obligations of the parties to and under the Investors'
Agreement.
SECTION 6.02. Indemnification. (a) Seller hereby indemnifies each Buyer
and its Affiliates, limited partners, general partners, directors, officers and
employees against and agrees to hold each of them harmless from any and all
damage, loss, liability and expense (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding) ("Damages") incurred or suffered
by any such party arising out of any misrepresentation or breach of warranty,
covenant or agreement made or to be performed by Seller pursuant to this
Agreement; provided that with respect to any Buyer, (i) Seller shall not be
liable under this Section 6.02(a) unless the aggregate amount of Damages with
respect to all matters referred to in this Section 6.02(a) for which such Buyer
has sought indemnification exceeds $100,000 and then only to the extent of such
excess and (ii) Seller's maximum liability under this Section 6.02(a) shall not
exceed the amount of the Purchase Price paid by such Buyer.
(b) Each Buyer hereby indemnifies, severally and not jointly, Seller
and its Affiliates, limited partners, general partners, directors, officers and
employees against and agrees to hold each of them harmless from any and all
Damages incurred or suffered by any such party arising out of any
misrepresentation or breach of warranty, covenant or agreement made or to be
performed by such Buyer pursuant to this Agreement; provided that (i) such Buyer
shall not be liable under this Section 6.02(b) unless the aggregate amount of
Damages with respect to all matters referred to in this Section 6.02(b) exceeds
$100,000 and then only to the extent of such excess and (ii) such Buyer's
maximum liability under this Section 6.02(b) shall not exceed the amount of
Purchase Price paid by such Buyer.
SECTION 6.03. Procedures and Third Party Claims. (a) The party seeking
indemnification under Section 6.02 (the "Indemnified Party") agrees to give
prompt notice to the party against whom indemnity is sought (the "Indemnifying
Party") of the assertion of any claim, or the commencement of any suit, action
or proceeding ("Claim") in respect of which indemnity may be sought under such
Section and will provide the Indemnifying Party such information with respect
thereto that the Indemnifying Party may reasonably request. The failure to so
notify the Indemnifying Party shall not relieve the Indemnifying Party of its
<PAGE>
obligations hereunder, except to the extent such failure shall have adversely
prejudiced the Indemnifying Party (except that the Indemnifying Party shall not
be liable for any expenses incurred during the period in which the Indemnified
Party failed to give such notice).
(b) The Indemnifying Party shall be entitled to participate in the
defense of any Claim asserted by any third party ("Third Party Claim") and,
subject to the limitations set forth in this Section, shall be entitled to
control and appoint lead counsel for such defense, in each case at its expense.
(c) If the Indemnifying Party shall assume the control of the defense
of any Third Party Claim in accordance with the provisions of this Section, (i)
the Indemnifying Party shall obtain the prior written consent of the Indemnified
Party (which shall not be unreasonably withheld) before entering into any
settlement of such Third Party Claim, if the settlement does not release the
Indemnified Party from all liabilities and obligations with respect to such
Third Party Claim or the settlement imposes injunctive or other equitable relief
against the Indemnified Party and (ii) the Indemnified Party shall be entitled
to participate in the defense of such Third Party Claim and to employ separate
counsel of its choice for such purpose. The fees and expenses of such separate
counsel shall be borne by the Indemnified Party.
(d) Each party shall cooperate, and cause its respective Affiliates to
cooperate, in the defense or prosecution of any Third Party Claim and shall
furnish or cause to be furnished such records, information and testimony, and
attend such conferences, discovery proceedings, hearings, trials or appeals, as
may be reasonably requested in connection therewith.
SECTION 6.04. Calculation of Damages. (a) The amount of any Damages
payable under Section 6.02 by the Indemnifying Party shall be net of any (i)
amounts recovered or recoverable by the Indemnified Party under applicable
insurance policies, (ii) Tax cost incurred by the Indemnified Party arising from
the receipt of indemnity payments and (iii) Tax Benefit realized by the
Indemnified Party arising from the incurrence or payment of any such Damages. In
computing the amount of any such Tax cost or Tax Benefit, the Indemnified Party
shall be deemed to fully utilize, at the highest marginal tax rate then in
effect, all Tax items arising from the receipt of any indemnity payment
hereunder or the incurrence or payment of any indemnified Damages.
(b) The Indemnifying Party shall not be liable under Section 6.02 for
any (i) incidental Damages, (ii) consequential or punitive Damages or (iii)
Damages for lost profits.
SECTION 6.05. Exclusivity. After the Closing, Section 6.02 will provide the
exclusive remedy for any misrepresentation, breach of warranty, covenant or
<PAGE>
other agreement or other claim arising out of this Agreement or the transactions
contemplated hereby.
ARTICLE 7
TERMINATION
SECTION 7.01. Grounds for Termination. This Agreement may be
terminated at any time prior to the Closing:
(a) by mutual written agreement of Seller and Buyers;
(b) by either Seller or any Buyer as to such Buyer if the Closing
shall not have been consummated as of the close of business on Friday,
August 8, 1997; or
(c) by either Seller or any Buyer if consummation of the transactions
contemplated hereby would violate any non-appealable final order,
decree or judgment of any court or governmental body having competent
jurisdiction.
The party desiring to terminate this Agreement pursuant to clauses 7.01(b) or
(c) shall give notice of such termination to the other party.
SECTION 7.02. Effect of Termination. If this Agreement is terminated as
permitted by Section 7.01, such termination shall be without liability of either
party (or any stockholder, general partner, limited partner, director, officer,
employee, agent, consultant or representative of such party) to the other party
to this Agreement; provided that if such termination shall result from the
willful (i) failure of either party to fulfill a condition to the performance of
the obligations of the other party, (ii) failure to perform a covenant of this
Agreement or (iii) breach by either party hereto of any representation or
warranty or agreement contained herein, such party shall be fully liable for any
and all Damages incurred or suffered by the other party as a result of such
failure or breach. The provisions of Sections 8.03, 8.05 and 8.06 shall survive
any termination hereof pursuant to Section 7.01.
<PAGE>
ARTICLE 8
MISCELLANEOUS
SECTION 8.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given,
if to any Buyer, to such Buyer at the address specified by such Buyer
on the signature pages of this Agreement or in a notice given by such Buyer to
Seller for such purpose;
if to Seller, to:
Quaker Holding Co.
c/o DLJ Merchant Banking Partners II, L.P.
277 Park Avenue
New York, New York 10172
Attention: Peter T. Grauer
Fax: (212) 892-7272
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: George R. Bason, Jr.
Fax: (212) 450-4800
or to such other address or telecopy number and with such other copies as such
party may hereafter specify for the purpose of notice.
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
SECTION 8.02. Amendments and Waivers. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of
<PAGE>
any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 8.03. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense,
except that if the Closing shall occur, the Company shall reimburse (i) the
Buyers other than the DLJ Entities (as that term is defined in the Investors'
Agreement) for up to $20,000 in respect of fees and expenses of one counsel
retained to represent such Buyers and (ii) the DLJ Entities for all costs and
expenses incurred by the DLJ Entities.
SECTION 8.04. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto.
SECTION 8.05. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York.
SECTION 8.06. Jurisdiction. The parties hereto agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby may only be brought in the United States District Court for
the Southern District of New York or any New York State court sitting in New
York City, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 8.01 shall be deemed
effective service of process on such party.
SECTION 8.07. Waiver Of Jury Trial. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 8.08. Counterparts; Third Party Beneficiaries. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
<PAGE>
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
SECTION 8.09. Entire Agreement. This Agreement along with the
Investors' Agreement (including the documents, schedules and exhibits referred
to herein and therein) constitute the entire agreement between the parties with
respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement.
SECTION 8.10. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 8.11. Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
executed from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforced in
accordance with its terms to the maximum extent permitted by law.
SECTION 8.12. Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
QUAKER HOLDING CO.
By: /s/ Kirk Wortman
Name: Kirk Wortman
Title: Vice-President
DLJ MERCHANT BANKING PARTNERS
II, L.P., a Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By: /s/ Kirk Wortman
Name: Kirk B. Wortman
Title: Attorney-in-Fact
Address: c/o DLJ Merchant
Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
<PAGE>
DLJ MERCHANT BANKING PARTNERS
II-A, L.P.,a Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-Fact
Address: c/o DLJ Merchant
Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ OFFSHORE PARTNERS II, C.V., a
Netherlands Antilles Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as advisory general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-Fact
Address: c/o DLJ Merchant
Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
<PAGE>
DLJ DIVERSIFIED PARTNERS, L.P., a
Delaware Limited Partnership
By: DLJ Diversified Partners II, Inc.,
as managing general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-Fact
Address: c/o DLJ Merchant
Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ DIVERSIFIED PARTNERS-A, L.P., a
Delaware Limited Partnership
By: DLJ Diversified Partners II, Inc.,
as managing general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-Fact
Address: c/o DLJ Merchant
Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
<PAGE>
DLJ MILLENIUM PARTNERS, L.P., a
Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-Fact
Address: c/o DLJ Merchant
Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ MILLENIUM PARTNERS-A, L.P.
By: DLJ Merchant Banking II, Inc., as
managing general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-Fact
Address: c/o DLJ Merchant
Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJMB FUNDING II, INC., a Delaware
corporation
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-Fact
Address: c/o DLJ Merchant
Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
<PAGE>
DLJ FIRST ESC, L.L.C.,
By: DLJ LBO Plans Management Corporation,
as manager
By: /s/ Kirk B. Wortman
Name: Kirk B.Wortman
Title: Attorney-in-Fact
Address: c/o DLJ Merchant
Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
UK INVESTMENT PLAN 1997
PARTNERS
By: Donaldson, Lufkin & Jenrette, Inc.,
as general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-Fact
Address: c/o DLJ Merchant
Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
<PAGE>
DLJ EAB PARTNERS, L.P.
By:DLJ Merchant Banking Funding II, Inc.,
its general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-Fact
Address: c/o DLJ Merchant
Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
APOLLO INVESTMENT FUND III, L.P.
By: Apollo Advisors II, L.P., its
general partner
By: Apollo Capital Management II, Inc.,
its general partner
By: /s/ Josh Harris
Name: Josh Harris
Title: Vice President
Address: 1301 Avenue of the Americas
38th Floor
New York, NY 10019
<PAGE>
APOLLO OVERSEAS PARTNERS III, L.P.
By: Apollo Advisors II, L.P., its
general partner
By: Apollo Capital Management II, Inc.,
its general partner
By: /s/ Josh Harris
Name: Josh Harris
Title: Vice President
Address: 1301 Avenue of the Americas
38th Floor
New York, NY 10019
APOLLO U.K. PARTNERS III, L.P.
By: Apollo Advisors II, L.P., its
general partner
By: Apollo Capital Management II, Inc.,
its general partner
By: /s/ Josh Harris
Name: Josh Harris
Title: Vice President
Address: 1301 Avenue of the Americas
38th Floor
New York, NY 10019
<PAGE>
BAIN CAPITAL FUND V, L.P.
By: Bain Capital Partners V, L.P.,
its general partner
By: Bain Capital Investors V, Inc.,
its general partner
By: /s/ Stephen Pagliuca
Name: Stephen Pagliuca
Title: General Parter
Address: c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Attention: Stephen Pagliuca
BAIN CAPITAL FUND, V-B, L.P.
By: Bain Capital Partners V, L.P.,
its general partner
By: Bain Capital Investors V, Inc.,
its general partner
By: /s/ Stephen Pagliuca
Name: Stephen Pagliuca
Title: General Partner
Address: c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Attention: Stephen Pagliuca
<PAGE>
BCIP ASSOCIATES
By: /s/ Stephen Pagliuca
Name: Stephen Pagliuca
Title: General Partner
Address: c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Attention: Stephen Pagliuca
BCIP TRUST ASSOCIATES, L.P.
By: Bain Capital Partners V, L.P.,
its general partner
By: Bain Capital Investors V, Inc.,
its general partner
By: /s/ Stephen Pagliuca
Name: Stephen Pagliuca
Title: General Partner
Address: c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Attention: Stephen Pagliuca
<PAGE>
THOMAS H. LEE EQUITY FUND III, L.P.
By: THL Equity Advisors III
Limited Partnership
By: THL Equity Trust III
By: /s/ Scott Schoen
Name: Scott Schoen
Title: Managing Director
Address: 75 State Street
Boston, MA 02109
THOMAS H. LEE FOREIGN FUND III, L.P.
By: THL Equity Advisors III
Limited Partnership
By: THL Equity Trust III
By: /s/ Scott Schoen
Name: Scott Schoen
Title: Managing Director
Address: 75 State Street
Boston, MA 02109
THL CO-INVESTORS III-A LLC
By: /s/ Thomas H. Lee
Name: Thomas H. Lee
Title: Manager
Address: 75 State Street
Boston, MA 02109
THL CO-INVESTORS III-B LLC
By: /s/ Thomas H. Lee
Name: Thomas H. Lee
Title: Manager
Address: 75 State Street
Boston, MA 02109
<PAGE>
DLJ CAPITAL CORP.
By: /s/ Richard E. Kroon
Name: Richard E. Kroon
Title: President
Address: 277 Park Avenue
New York, NY 10172
SPROUT GROWTH II, L.P.
By: DLJ Capital Corporation,
its managing general partner
By: /s/ Richard E. Kroon
Name: Richard E. Kroon
Title: President
Address: 277 Park Avenue
New York, NY 10172
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corporation,
its managing general partner
By: /s/ Richard E. Kroon
Name: Richard E. Kroon
Title: President
Address: 277 Park Avenue
New York, NY 10172
<PAGE>
ONTARIO TEACHERS' PENSION
PLAN BOARD
By: /s/ Dean Metcalf
Name: Dean Metcalf
Title: Portfolio Manager,
Merchant Banking
Address: 5650 Yonge Street
North York, Ontario
Canada, M2M 4H5
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Investor No. of Common Shares Aggregate Purchase
<S> <C> <C>
DLJ Merchant Banking Partners II, L.P 4,703,762 96,932,137.08
DLJ Merchant Banking Partners II-A,L.P. 187,326 3,860,284.87
DLJ Offshore Partners, L.P. 231,307 4,766,622.62
DLJ Diversified Partners, L.P. 275,003 5,667,095.07
DLJ Diversified Partners-A, L.P. 102,127 2,104,560.24
DLJ Millennium Partners, L.P. 76,055 1,567,276.12
DLJ Millennium Partners - A, L.P. 14,834 305,685.43
DLJMB Funding II, Inc. 946,201 19,498,728.27
DLJ First ESC, L.L.C. 874,223 18,015,434.00
DLJ EAB Partners, L.P. 21,119 435,204.97
UK Investment Plan 1997 Partners 88,052 1,814,515.60
Apollo Investment Fund III, L.P. 738,693 15,222,519.19
Apollo Overseas Partners III, L.P. 44,117 909,143.31
Apollo (U.K.) Partners III, L.P. 27,307 562,718.22
Bain Capital Fund V L.P. 158,619 3,268,702.22
Bain Capital Fund V-B, L.P. 413,039 8,511,678.44
BCIP Associates 124,016 2,555,635.04
BCIP Trust Associates 114,443 2,358,365.01
Thomas H. Lee Equity Fund III, L.P. 695,016 14,322,454.99
Thomas H. Lee Foreign Fund III, L.P. 43,006 886,234.74
THL Co. - Investors III - A LLC 43,910 904,865.69
THL Co. - Investors III - B LLC 28,185 580,825.30
DLJ Capital Corp. 10,568 217,752.91
DLJ Merchant Banking Partners II, L.P. 4,703,762 96,932,137.08
Sprout Growth II, L.P. 457,319 9,424,167.36
The Sprout CEO Fund, L.P. 7,617 156,960.76
Ontario Teachers' Pension Plan Fund 493,115 10,161,797.96
</TABLE>
CONFORMED COPY
Exhibit 4
INVESTORS' AGREEMENT
dated as of
August 7, 1997
among
DECISIONONE HOLDINGS CORP.,
DLJ MERCHANT BANKING PARTNERS II, L.P.,
DLJ MERCHANT BANKING PARTNERS II - A, L.P.,
DLJ OFFSHORE PARTNERS II, C.V.,
DLJ DIVERSIFIED PARTNERS, L.P.,
DLJ DIVERSIFIED PARTNERS - A, L.P.,
DLJ MILLENNIUM PARTNERS, L.P.,
DLJ MILLENNIUM PARTNERS - A, L.P.,
DLJMB FUNDING II, INC.,
UK INVESTMENT PLAN 1997 PARTNERS,
DLJ EAB PARTNERS, L.P.,
DLJ FIRST ESC, LLC,
AND
CERTAIN OTHER PERSONS NAMED HEREIN
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.............................................................2
ARTICLE 2
CORPORATE GOVERNANCE AND MANAGEMENT
SECTION 2.01. Composition of the Board...............................................10
SECTION 2.02. Removal................................................................10
SECTION 2.03. Vacancies..............................................................10
SECTION 2.04. Action by the Board....................................................11
SECTION 2.05. Conflicting Charter or Bylaw Provision.................................11
ARTICLE 3
RESTRICTIONS ON TRANSFER
SECTION 3.01. General................................................................12
SECTION 3.02. Legends................................................................12
SECTION 3.03. Permitted Transferees..................................................13
SECTION 3.04. Restrictions on Transfers by Institutional Shareholders................13
SECTION 3.05. Restrictions on Transfers by Management Shareholders...................13
ARTICLE 4
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS; PREEMPTIVE RIGHTS
SECTION 4.01. Rights to Participate in Transfer......................................15
SECTION 4.02. Right to Compel Participation in Certain Transfers.....................17
SECTION 4.03. Preemptive Rights......................................................19
SECTION 4.04. Certain Other Purchases of Common Stock................................20
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. Demand Registration....................................................21
SECTION 5.02. Piggyback Registration.................................................23
SECTION 5.04. Registration Procedures................................................25
SECTION 5.05. Indemnification by the Company.........................................29
SECTION 5.06. Indemnification by Participating Shareholders..........................29
SECTION 5.08. Contribution...........................................................31
<PAGE>
SECTION 5.09. Participation in Public Offering.......................................33
SECTION 5.10. Cooperation by the Company.............................................33
SECTION 5.11. No Transfer of Registration Rights.....................................33
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
SECTION 6.01. Confidentiality........................................................33
SECTION 6.02. Reports................................................................34
SECTION 6.03. Limitations on Subsequent Registration.................................35
SECTION 6.04. Exclusive Financial Advisor and Investment Banking Advisor.............35
SECTION 6.05. Limitation on Purchase of Common Stock.................................35
ARTICLE 7
MISCELLANEOUS
SECTION 7.01. Entire Agreement.......................................................35
SECTION 7.02. Binding Effect; Benefit................................................36
SECTION 7.03. Assignability..........................................................36
SECTION 7.04. Amendment; Waiver; Termination.........................................36
SECTION 7.05. Notices................................................................37
SECTION 7.06. Headings...............................................................38
SECTION 7.07. Counterparts...........................................................38
SECTION 7.08. Applicable Law.........................................................38
SECTION 7.09. Specific Enforcement...................................................38
SECTION 7.10. Consent to Jurisdiction; Expenses......................................39
SECTION 7.11. Severability...........................................................39
</TABLE>
<PAGE>
INVESTORS' AGREEMENT
AGREEMENT dated as of August 7, 1997 among (i) DecisionOne Holdings
Corp. (the "Company"), (ii) DLJ Merchant Banking Partners II, L.P. ("DLJMB"),
DLJ Offshore Partners II, C.V., DLJ Diversified Partners, L.P., DLJMB Funding
II, Inc., DLJ Merchant Banking Partners II - A, L.P., DLJ Diversified Partners -
A., L.P., DLJ Millennium Partners, L.P., DLJ Millennium Partners - A, L.P., UK
Investment Plan 1997 Partners, DLJ EAB Partners, L.P., and DLJ First ESC, LLC
(each a "DLJ Entity" and a "Shareholder" and collectively the "DLJ Entities"),
(iii) Apollo Investment Fund III L.P. ("Apollo Investment"), Apollo Overseas
Partners III L.P. ("Apollo Overseas"), Apollo (U.K.) Partners III, L.P. ("Apollo
U.K."), Bain Capital Fund V L.P. ("Bain Capital V"), Bain Capital Fund, V-B,
L.P. ("Bain Capital V-B"), BCIP Associates ("BCIP"), BCIP Trust Associates L.P.
("BCIP Trust"), Thomas H. Lee Equity Fund III, L.P. ("THL"), Thomas H. Lee
Foreign Fund III, L.P. ("THL Foreign Fund"), THL Co-Investors III-A, LLC ("THL
Co-Investors A"), THL Co-Investors III-B, LLC ("THL Co-Investors B"), DLJ
Capital Corp. ("DLJ Capital"), Sprout Growth II, L.P. ("Sprout"), The Sprout CEO
Fund, L.P. ("Sprout CEO Fund"), and Ontario Teachers' Pension Plan Board (each a
"Shareholder" and collectively, the Shareholders listed in this clause (iii) are
referred to as the "Institutional Shareholders") and (iv) certain other Persons
listed on the signature pages hereof (each a "Shareholder" and collectively, the
"Management Shareholders").
W I T N E S S E T H :
WHEREAS, pursuant to the Subscription Agreement and the DecisionOne
Direct Investment Program (as defined below) certain parties hereto are or will
be acquiring securities of Quaker Holding Co. and the Company, respectively; and
WHEREAS, pursuant to the terms of the Merger Agreement (as defined
below), Quaker Holding Co. will be merged with and into the Company, with the
Company as the surviving corporation (the "Merger");
WHEREAS, the parties hereto desire to enter into this Agreement to
govern certain of their rights, duties and obligations after consummation of the
transactions contemplated by the Merger Agreement, the Subscription Agreement
and the DecisionOne Direct Investment Program;
The parties hereto agree as follows:
<PAGE>
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein, have
the following meanings:
"Adjusted Initial Ownership" means, with respect to any Management
Shareholder, the number of shares of Common Stock and Common Stock Equivalents
owned as of the date hereof, or in the case of any Person that shall become a
party to this Agreement on a later date, as of such date, taking into account
any stock split, stock dividend, reverse stock-split or similar event.
"Adverse Person" means any Person whom the Board of Directors of the
Company determines is a competitor or a potential competitor of the Company or
its Subsidiaries.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person, provided that no securityholder of the Company shall be deemed an
Affiliate of any other securityholder solely by reason of any investment in the
Company. For the purpose of this definition, the term "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
"Affiliated Employee Benefit Trust" means any trust that is a successor
to the assets held by a trust established under an employee benefit plan subject
to ERISA or any other trust established directly or indirectly under such plan
or any other such plan having the same sponsor.
"Apollo Entities" means Apollo Investment, Apollo Overseas, Apollo
U.K. and their Permitted Transferees.
"Bain Entities" means Bain Capital V, Bain Capital V-B, BCIP, BCIP
Trust and their Permitted Transferees.
"beneficially own" shall have the meaning set forth in Rule 13d-3 of
the Exchange Act.
"Board" means the board of directors of the Company.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized by law to close.
<PAGE>
"Change of Control" means such time as (a) the DLJ Entities shall own
less than 20% of the outstanding shares of Common Stock, (b) the transfer of all
or substantially all of the assets of the Company to any Person or group shall
have been consummated, or (c) the Company shall have been liquidated.
"Closing Date" means August 7, 1997.
"Common Stock" shall mean the common stock, par value $.01 per share,
of the Company and any stock into which such Common Stock may thereafter be
converted or changed.
"Common Stock Equivalent" means
(20.61 - P) x N
---------------
20.61
where "N" equals the number of Roll-Over Options, and "P" equals the exercise
price of such Roll-Over Option.
"DecisionOne Direct Investment Program" means the investment program of
the Company pursuant to which certain members of the Company's management will
acquire shares of Common Stock.
"Drag-Along Portion" means, with respect to any Other Shareholder and
any class of Common Stock, the number of such class of Common Stock beneficially
owned by such Other Shareholder multiplied by a fraction, the numerator of which
is the number of such class of Common Stock proposed to be sold by the DLJ
Entities on behalf of the DLJ Entities and the Other Shareholders and the
denominator of which is the total number of such class of Common Stock on a
Fully Diluted basis beneficially owned by the Shareholders.
"Equity Securities" means the Common Stock, securities convertible into
or exchangeable for Common Stock and options, warrants or other rights to
acquire Common Stock, preferred stock or any other equity security issued by the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"First Public Offering" means the first sale after the date hereof of
Common Stock pursuant to an effective registration statement under the
Securities Act (other than a registration statement on Form S-8 or any successor
form).
"Fully Diluted" means all outstanding shares of Common Stock and all
shares issuable in respect of securities convertible into or exchangeable for
such Common Stock, stock appreciation rights or options, warrants and other
irrevocable rights to purchase or subscribe for such Common Stock or securities
<PAGE>
convertible into or exchangeable for such Common Stock; provided that no Person
shall be deemed to own such number of Fully Diluted shares of any Common Stock
as such Person has the right to acquire from any Person other than the Company.
"Initial Ownership" means, with respect to any Shareholder, the number
of shares of Common Stock beneficially owned (and (without duplication) which
such Persons have the right to acquire from any Person) as of the date hereof,
or in the case of any Person that shall become a party to this Agreement on a
later date, as of such date, taking into account any stock split, stock
dividend, reverse stock split or similar event.
"Merger Agreement" means the Agreement and Plan of Merger dated as of
May 4, 1997, as subsequently amended, between the Company and Quaker Holding Co.
"Other Shareholders" means all Shareholders other than the DLJ
Entities.
"Percentage Ownership" means, with respect to any Shareholder at any
time, (i) the number of shares of Fully Diluted Common Stock that such
Shareholder beneficially owns (and (without duplication) has the right to
acquire from any Person) at such time, divided by (ii) the total number of
shares of Fully Diluted Common Stock at such time.
"Permitted Transferee" means (i) in the case of an Institutional
Shareholder (a) any general or limited partner or shareholder of such
Shareholder, and any corporation, partnership or other entity that is an
Affiliate of such Shareholder (collectively, "Shareholder Affiliates"), (b) any
general partner, limited partner, employee, officer or director of such
Shareholder or a Shareholder Affiliate, or any spouse, lineal descendant,
sibling, parent, heir, executor, administrator, testamentary trustee, legatee or
beneficiary of any of the foregoing persons described in this clause (b)
(collectively, "Shareholder Associates"), and (c) any trust, the beneficiaries
of which, or any corporation, limited liability company or partnership,
stockholders, members or general or limited partners of which include only such
Shareholder, such Shareholder Affiliates or Shareholder Associates;
(ii) in the case of a Management Shareholder (a) any other Shareholder,
(b) a spouse or lineal descendant (whether natural or adopted), sibling, parent,
heir, executor, administrator, testamentary trustee, legatee or beneficiary of
any of such Management Shareholder, (c) any trust, the beneficiaries of which,
or any corporation, limited liability company or partnership, stockholders,
members or general or limited partners of which include only the Persons named
in clauses (a) or (b) or (d) any charitable remainder trust; or
<PAGE>
(iii) in the case of any DLJ Entity (A) any other DLJ Entity, (B) any
general or limited partner of any such entity (a "DLJ Partner"), and any
corporation, partnership, Affiliated Employee Benefit Trust or other entity
which is an Affiliate of any DLJ Partner (collectively, the "DLJ Affiliates"),
(C) any managing director, general partner, director, limited partner, officer
or employee of such DLJ Entity or a DLJ Affiliate, or the heirs, executors,
administrators, testamentary trustees, legatees or beneficiaries of any of the
foregoing Persons referred to in this clause (C) (collectively, "DLJ
Associates"), and (D) any trust, the beneficiaries of which, or any corporation,
limited liability company or partnership, the stockholders, members or general
or limited partners of which, include only such DLJ Entity, DLJ Affiliates, DLJ
Associates, their spouses or their lineal descendants. The term "DLJ Entities",
to the extent such entities shall have transferred any of their Shares to
"Permitted Transferees", shall mean the DLJ Entities and the Permitted
Transferees of the DLJ Entities, taken together, and any right or action that
may be exercised or taken at the election of the DLJ Entities may be exercised
or taken at the election of the DLJ Entities and such Permitted Transferees.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Pro Rata Portion" means the number of Shares a Shareholder holds
(either Purchased Shares or non-Purchased Shares, as the case may be) multiplied
by a fraction, the numerator of which is the number of Shares to be sold by the
DLJ Entities and the Institutional Shareholders and their Permitted Transferees
in a Public Offering and the denominator of which is the total number of Shares,
on a Fully Diluted basis, held in the aggregate by the DLJ Entities and the
Institutional Shareholders and their Permitted Transferees prior to such Public
Offering.
"Public Offering" means any primary or secondary public offering of
Common Stock pursuant to an effective registration statement under the
Securities Act other than pursuant to a registration statement filed in
connection with a transaction of the type described in Rule 145 of the
Securities Act or for the purpose of issuing securities pursuant to an employee
benefit plan.
"Purchased Shares" means those Shares purchased by a Management
Shareholder on the Closing Date for cash and/or with the proceeds of a
promissory note of the type contemplated by the DecisionOne Direct Investment
Plan.
"Registrable Securities" means at any time, with respect to any
Shareholder or its Permitted Transferees, any shares of Common Stock then owned
by such Shareholder or its Permitted Transferees until (i) a registration
statement covering such securities has been declared effective by the SEC and
<PAGE>
such securities have been disposed of pursuant to such effective
registration statement, (ii) such securities are sold under circumstances in
which all of the applicable conditions of Rule 144 (or any similar provisions
then in force) under the Securities Act are met or such securities may be sold
pursuant to Rule 144(k) or (iii) such securities are otherwise transferred, the
Company has delivered a new certificate or other evidence of ownership for such
securities not bearing the legend required pursuant to this Agreement and such
securities may be resold without subsequent registration under the Securities
Act.
"Registration Expenses" means (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the securities registered), (iii) printing expenses, (iv)
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), (v) reasonable fees and disbursements of counsel for the Company and
customary fees and expenses for independent certified public accountants
retained by the Company (including expenses relating to any comfort letters or
costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letters requested pursuant to Section 5.04(g)
hereof), (vi) the reasonable fees and expenses of any special experts retained
by the Company in connection with such registration, (vii) reasonable fees and
expenses of up to one counsel for the Shareholders participating in the
offering, (viii) fees and expenses in connection with any review of underwriting
arrangements by the National Association of Securities Dealers, Inc. (the
"NASD") including fees and expenses of any "qualified independent underwriter"
and (ix) fees and disbursements of underwriters customarily paid by issuers or
sellers of securities, but shall not include any underwriting fees, discounts or
commissions attributable to the sale of Registrable Securities, or any
out-of-pocket expenses (except as set forth in clause (vii) above) of the
Shareholders or any fees and expenses of underwriter's counsel.
"Restriction Termination Date" means the fourth anniversary of the
Closing Date.
"Roll-Over Option" means an option granted by the Company to a
Management Shareholder prior to the Merger which option, at the effective time
of the Merger, was converted into an option to purchase shares of Common Stock
of the surviving corporation.
"Section 4.03 Portion" means the pro rata portion of any Equity
Securities proposed to be issued by the Company with respect to which
Shareholders shall be entitled to exercise their rights under Section 4.03,
(a) in the case of any Institutional Shareholder, based upon such
Institutional Shareholder's Initial Ownership of shares of Common Stock as a
<PAGE> percentage of the sum of (i) the Initial Ownership of Common Stock of the
DLJ Entities and all Institutional Stockholders and (ii) the Adjusted Initial
Ownership of all Management Stockholders, or
(b) in the case of any Management Shareholder, based upon such
Management Shareholder's Adjusted Initial Ownership of shares of Common Stock as
a percentage of the sum of (i) the Initial Ownership of the DLJ Entities and the
Institutional Shareholders and (ii) the Adjusted Initial Ownership of all
Management Shareholders.
"Section 4.04 Portion" means, with respect to any Shareholder at any
time, the number of shares of common stock purchased by DLJ Entities in a
transaction subject to Section 4.04, multiplied by a fraction, the numerator of
which is (i) the number of shares of Common Stock on a Fully Diluted basis that
such Shareholder beneficially owns at such time, and the denominator of which is
(ii) the total number of shares of Common Stock on a Fully Diluted basis
beneficially owned at such time by all Other Shareholders and the DLJ Entities.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shareholder" means each Person (other than the Company) who shall be a
party to this Agreement, whether in connection with the execution and delivery
hereof as of the date hereof, pursuant to Section 7.03 or otherwise, so long as
such Person shall beneficially own any Common Stock.
"Shares" means shares of Common Stock held by the Shareholders.
"Sprout Entities" means DLJ Capital, Sprout, Sprout CEO Fund, and their
Permitted Transferees.
"Subject Securities" means the Common Stock beneficially owned by the
Management Shareholders and Institutional Shareholders to be transferred in a
Section 4.02 Sale.
"Subscription Agreement" means the Subscription Agreement of even date
herewith among Quaker Holding Co., the DLJ Entities and the Institutional
Investors.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
<PAGE>
"THL Entities" means THL, THL Foreign Fund, THL Co-Investors A, THL
Co-Investors B, and their Permitted Transferees.
"Tag-Along Portion" means the number of shares of Common Stock held
(or, without duplication, that such Shareholder has the right to acquire from
any Person) by the Tagging Person or the Selling Person, as the case may be,
multiplied by a fraction, the numerator of which is the number of shares of
Common Stock proposed to be sold by the Selling Person pursuant to Section 4.01,
and the denominator of which is the aggregate number of shares of Common Stock
on a Fully Diluted basis owned by all Shareholders.
"Third Party" means a prospective purchaser of Common Stock in an
arm's-length transaction from a Shareholder where such purchaser is not a
Permitted Transferee of such Shareholder.
"Underwritten Public Offering" means a firmly underwritten public
offering of Registrable Securities of the Company pursuant to an effective
registration statement under the Securities Act.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
Cause 2.02
Confidential Information 6.01(b)
Demand Registration 5.01(a)
Drag-Along Rights 4.02(a)
Holders 5.01(a)(ii)
Incidental Registration 5.02(a)
Indemnified Party 5.07
Indemnifying Party 5.07
Inspectors 5.04(g)
Maximum Offering Size 5.01(e)
Nominee 2.03(a)
Piggyback Registration 5.02(a)
Public Offering Limitations 3.05(a)
Records 5.04(g)
Representatives 6.01(b)
Section 4.01 Response Notice 4.01(a)
Section 4.02 Sale 4.02(a)
Section 4.02 Notice 4.02(a)
Section 4.02 Sale Price 4.02(a)
Section 4.02 Notice Period 4.02(a)
Section 4.03 Notice 4.03
Section 4.03 Portion 4.03
Section 4.04 Notice 4.04
Selling Person 4.01(a)
Selling Shareholder 5.01(a)
Shareholder 7.03
Tag-Along Notice 4.01(a)
Tag-Along Notice Period 4.01(a)
Tag-Along Offer 4.01(a)
Tag-Along Right 4.01(a)
Tag-Along Sale 4.01(a)
Tagging Person 4.01(a)
Transfer 3.01(a)
Trigger Date 6.05
<PAGE>
ARTICLE 2
CORPORATE GOVERNANCE AND MANAGEMENT
SECTION 2.01. Composition of the Board. The Board shall consist of
seven members, of whom four shall be nominated by DLJMB, two shall be nominated
by DLJMB and shall be individuals which are not "Affiliates" or "Associates" (as
those terms are used within the meaning of Rule 12b-2 of the General Rules and
Regulations under the Exchange Act) of any Shareholder or its Affiliates, and
one shall be nominated by the Management Shareholders. Each Shareholder entitled
to vote for the election of directors to the Board agrees that it will vote its
shares of Common Stock or execute consents, as the case may be, and take all
other necessary action (including causing the Company to call a special meeting
of shareholders) in order to ensure that the composition of the Board is as set
forth in this Section 2.01; provided that, no Shareholder shall be required to
vote for another Shareholder's nominee(s) if the number of shares of Common
Stock held by the Shareholder or group of Shareholders, as applicable, making
the nomination (or, in the case of a nomination by DLJMB, of the DLJ Entities)
is, at the close of business on the day preceding such vote or execution of
consents, less than 10% of such Shareholder's or group of Shareholders' (or the
DLJ Entities'), as applicable, Initial Ownership of Common Stock on a Fully
Diluted basis.
SECTION 2.02. Removal. Each Shareholder agrees that if, at any time, it
is then entitled to vote for the removal of directors of the Company, it will
not vote any of its shares of Common Stock in favor of the removal of any
director who shall have been designated or nominated pursuant to Section 2.01
unless such removal shall be for Cause or the Person(s) entitled to designate or
nominate such director shall have consented to such removal in writing, provided
that if the Persons entitled to designate or nominate any director pursuant to
Section 2.01 shall request the removal, with or without Cause, of such director
in writing, such Shareholder shall vote its shares of Common Stock in favor of
such removal.
<PAGE>
Removal for "Cause" shall mean removal of a director because of such director's
(a) willful and continued failure substantially to perform his duties with the
Company in his established position, (b) willful conduct which is injurious to
the Company or any of its Subsidiaries, monetarily or otherwise, (c) conviction
for, or guilty plea to, a felony or a crime involving moral turpitude, or (d)
abuse of illegal drugs or other controlled substances or habitual intoxication.
SECTION 2.03. Vacancies. If, as a result of death, disability, retirement,
resignation, removal (with or without Cause) or otherwise, there shall exist or
occur any vacancy on the Board:
(a) The Shareholder(s) entitled under Section 2.01 to nominate such
director whose death, disability, retirement, resignation or removal resulted in
such vacancy, may, subject to the provisions of Section 2.01, nominate another
individual (the "Nominee") to fill such vacancy and serve as a director of the
Company; and
(b) each Shareholder then entitled to vote for the election of the
Nominee as a director of the Company agrees that it will vote its shares of
Common Stock, or execute a written consent, as the case may be, in order to
ensure that the Nominee be elected to the Board; provided that, no Shareholder
shall be required to vote for another party's Nominee(s) if the Percentage
Ownership of the Shareholder or group of Shareholders, as applicable, making the
nomination (or, in the case of a nomination by DLJMB, of the DLJ Entities), at
the close of business of the day preceding such vote or execution of consents,
is less than 10% on a Fully Diluted basis of such Shareholder's or group of
Shareholders' (or the DLJ Entities'), as applicable, Initial Ownership of Common
Stock.
SECTION 2.04. Action by the Board. (a) A quorum of the Board shall
consist initially of four directors; provided that DLJMB shall have the right,
in its sole discretion, until such time as the Percentage Ownership of the DLJ
Entities is less than 10% on a Fully Diluted basis of the DLJ Entities' Initial
Ownership of Common Stock, to increase or decrease the number of directors
necessary to constitute a quorum.
(b) All actions of the Board shall require the affirmative vote of at
least a majority of the directors at a duly convened meeting of the Board at
which a quorum is present or the unanimous written consent of the Board;
provided that, in the event there is a vacancy on the Board and an individual
has been nominated to fill such vacancy, the first order of business shall be to
fill such vacancy.
SECTION 2.05. Conflicting Charter or Bylaw Provision. Each Shareholder
shall vote its shares of Common Stock, and shall take all other actions
reasonably necessary, to ensure that the Company's certificate of incorporation
<PAGE>
and bylaws copies of which are attached hereto as Exhibits A and B) facilitate
and do not at any time conflict with any provision of this Agreement.
ARTICLE 3
RESTRICTIONS ON TRANSFER
SECTION 3.01. General. (a) Each Shareholder understands and agrees that
the Common Stock purchased pursuant to the Subscription Agreement or the
DecisionOne Direct Investment Program have not been registered under the
Securities Act and are restricted securities. Each Shareholder agrees that it
will not, directly or indirectly, sell, assign, transfer, grant a participation
in, pledge or otherwise dispose of ("transfer") any Common Stock (or solicit any
offers to buy or otherwise acquire, or take a pledge of any Common Stock) except
in compliance with the Securities Act and the terms and conditions of this
Agreement.
(b) Any attempt to transfer any Common Stock not in compliance with
this Agreement shall be null and void and the Company shall not, and shall cause
any transfer agent not to, give any effect in the Company's stock records to
such attempted transfer.
SECTION 3.02. Legends. (a) In addition to any other legend that may be
required, each certificate for shares of Common Stock that is issued to any
Shareholder shall bear a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT IN
COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS
ON TRANSFER AS SET FORTH IN THE INVESTORS' AGREEMENT DATED AS OF AUGUST 7, 1997,
COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM DECISIONONE HOLDINGS CORP. OR
ANY SUCCESSOR THERETO."
(b) If any Common Stock shall cease to be Registrable Securities under
clause (i) or clause (ii) of the definition thereof, the Company shall, upon the
written request of the holder thereof, issue to such holder a new certificate
evidencing such shares without the first sentence of the legend required by
Section 3.02(a) endorsed thereon. If any Common Stock cease to be subject to any
and all restrictions on transfer set forth in this Agreement, the Company shall,
upon the written request of the holder thereof, issue to such holder a new
certificate evidencing such Common Stock without the second sentence of the
legend required by Section 3.02(a) endorsed thereon.
<PAGE>
SECTION 3.03. Permitted Transferees. Notwithstanding anything in this
Agreement to the contrary, any Shareholder may at any time transfer any or all
of its Common Stock to one or more of its Permitted Transferees without the
consent of the Board or any other Shareholder or group of Shareholders and
without compliance with Sections 3.04, 3.05 and 4.01 so long as (a) such
Permitted Transferee shall have agreed in writing to be bound by the terms of
this Agreement and (b) the transfer to such Permitted Transferee is not in
violation of applicable federal or state securities laws.
SECTION 3.04. Restrictions on Transfers by Institutional Shareholders.
(a) Except as provided in Section 3.03, each Institutional Shareholder and each
Permitted Transferee of such Institutional Shareholder may transfer its Common
Stock only as follows:
(i) in a transfer made in compliance with Section 4.01 or 4.02;
(ii) in a Public Offering in connection with the exercise of its
rights under Article 5 hereof; or
(iii) following the earlier to occur of (i) the date on which the
Percentage Ownership of such Institutional Shareholder is less than 25%
of its Initial Ownership of Common Stock and (ii) the seventh
anniversary of the Closing Date, to any Person other than any Adverse
Person.
(b) The restrictions set forth in Section 3.04(a)(i) and (a)(ii) shall
terminate at such time as aggregate Percentage Ownership of the DLJ Entities and
their Permitted Transferees is equal to or less than 50% of the aggregate
Initial Ownership of Common Stock of DLJ Entities.
SECTION 3.05. Restrictions on Transfers by Management Shareholders.
(a) Except as provided in Section 3.03, each Management Shareholder and each
Permitted Transferee of such Management Shareholder may transfer its Common
Stock only as follows:
(i) in a transfer made in compliance with Section 4.01 or 4.02;
(ii) subject to the Public Offering Limitations (as defined below), in
a Public Offering in connection with the exercise of its rights under
Article 5 hereof;
(iii) 180 days following a Public Offering, to any Third Party, in a
transfer made in compliance with Rule 144 promulgated under the
Securities Act; provided, however, that until the Restriction
Termination Date, the Percentage Ownership of such Management
Shareholder as a result of such transfer shall be equal to or exceed
the greater of (x) 50% of such Management Shareholder's Initial
Ownership of Common Stock and
<PAGE>
(y) a percentage of such Management Shareholder's Initial Ownership
equal to the Remaining Percentage. For purposes of this Section
3.05(a)(iii), "Remaining Percentage" means the Percentage Ownership of
the DLJ Entities and the Institutional Investors immediately prior to
such proposed transfer pursuant to this Section 3.05(a)(iii) calculated
by subtracting from the Initial Ownership of the DLJ Entities and the
Institutional Investors the number of shares of Common Stock
theretofore transferred by the DLJ Entities and the Institutional
Investors; or
(iv) following the Restriction Termination Date, to any Third Party
other than an Adverse Person for consideration consisting solely of cash,
provided, however, that the number of Shares transferred by such Management
Shareholder pursuant to this Section 3.05(a)(iv) in any twelve-month period
shall not exceed 20% of such Management Shareholder's Percentage Ownership at
the beginning of such twelve month period.
For purposes of this Agreement, "Public Offering Limitations" means (A)
except as set forth in the proviso at the end of this paragraph, no Management
Shareholder shall be permitted to exercise its rights under Section 5.02 hereof
(x) with respect to the First Public Offering and (y) until such time as the
Percentage Ownership of the DLJ Entities and the Institutional Shareholders and
their Permitted Transferees shall be less than 50% of their aggregate Initial
Ownership of Common Stock and (B) in each Public Offering following the First
Public Offering, such Management Shareholder shall be entitled to transfer a
number of Shares not exceeding such Management Shareholder's Pro Rata Portion of
non- Purchased Shares; provided, however, that notwithstanding the restrictions
set forth in clauses (A) and (B), each Management Shareholder shall be permitted
to exercise its rights pursuant to Section 5.02 hereof in respect of such
Management Shareholder's Pro Rata Portion of its Purchased Shares in any Public
Offering and transfer such Purchased Shares pursuant to Section 3.05(a)(ii).
(b) The provisions of Section 3.05(a) shall terminate upon the
earliest to occur of (i) one or more Public Offerings of Shares yielding
aggregate gross proceeds of at least $100,000,000, (ii) the fourth anniversary
of the Closing Date and (iii) a Change of Control. Notwithstanding the foregoing
sentence, the provisions of Section 3.05(a) shall not terminate with respect to
any Management Shareholder's Shares which shall have been pledged to the Company
as security in connection with any indebtedness for borrowed money owed by such
Management Shareholder to the Company unless the proceeds from the sale of such
Shares, net of any taxes due on such proceeds, are applied to repay the such
indebtedness in full.
<PAGE>
ARTICLE 4
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS; PREEMPTIVE RIGHTS
SECTION 4.01. Rights to Participate in Transfer. (a) If DLJ Entities
(the "Selling Person") propose to transfer (other than transfers of shares of
Common Stock (i) in a Public Offering, (ii) to any Permitted Transferee of any
of the DLJ Entities or (iii) up to 2.5% in the aggregate of the securities of
such class outstanding on the date of the first transfer of any shares of Common
Stock by any of the DLJ Entities (such percentage, the "Free Percentage")), in a
transaction otherwise permitted by Article 3 hereof, (a "Tag-Along Sale"), the
Other Shareholders may, at their option, elect to exercise their rights under
this Section 4.01 (each such Shareholder, a "Tagging Person"). In the event of
such a proposed transfer, the Selling Person shall provide each Other
Shareholder written notice of the terms and conditions of such proposed transfer
("Tag-Along Notice") and offer each Tagging Person the opportunity to
participate in such sale. The Tag-Along Notice shall identify the number of
shares of Common Stock subject to the offer ("Tag-Along Offer"), the cash price
at which the transfer is proposed to be made, and all other material terms and
conditions of the Tag-Along Offer, including the form of the proposed agreement,
if any. From the date of the Tag-Along Notice, each Tagging Person shall have
the right (a "Tag- Along Right"), exercisable by written notice ("Section 4.01
Response Notice") given to the Selling Person within 5 Business Days (the
"Tag-Along Notice Period"), to request that the Selling Person include in the
proposed transfer the number of Shares held by such Tagging Person as is
specified in such notice; provided that if the aggregate number of Shares
proposed to be sold by the Selling Person and all Tagging Persons in such
transaction exceeds the number of Shares which can be sold on the terms and
conditions set forth in the Tag-Along Notice, then only the Tag-Along Portion of
Shares of the Selling Person and each Tagging Person shall be sold pursuant to
the Tag-Along Offer. In the event the DLJ Entities shall propose to transfer a
number of Shares in excess of the Free Percentage, the Tag-Along Portion shall
be calculated with respect to all of the Shares proposed to be transferred by
the DLJ Entities. If the Tagging Persons exercise their Tag-Along Rights
hereunder, each Tagging Person shall deliver, together with its Section 4.01
Response Notice, to the Selling Person the certificate or certificates
representing the Shares of such Tagging Person to be included in the transfer,
together with a limited power-of-attorney authorizing the Selling Person to
transfer such Shares on the terms set forth in the Tag-Along Notice. It is
understood that to the extent the DLJ Entities can do so without affecting the
other terms on which the Tag-Along Sale is proposed to be made, the DLJ Entities
will seek to exclude from the terms of such Tag-Along Sale any material
restrictions on the ability, following such Tag-Along Sale, of any Tagging
Person to conduct its business in a manner consistent with past practice.
Delivery of such certificate or certificates representing the Shares to be
transferred and the limited power-of-attorney authorizing the Selling Person to
transfer such Shares shall constitute an irrevocable acceptance of the Tag-Along
Offer by such Tagging Persons. If, at the end of a 120 day period after such
delivery, the Selling
<PAGE>
Person has not completed the transfer of all such Shares on substantially the
same terms and conditions set forth in the Tag-Along Notice, the Selling Person
shall return to each Tagging Person the limited power-of-attorney (and all
copies thereof) together with all certificates representing the Shares which
such Tagging Person delivered for transfer pursuant to this Section 4.01.
(b) Concurrently with the consummation of the Tag-Along Sale, the
Selling Person shall notify the Tagging Persons thereof, shall remit to the
Tagging Persons the total consideration (by bank or certified check) for the
Shares of the Tagging Persons transferred pursuant thereto, and shall, promptly
after the consummation of such Tag-Along Sale furnish such other evidence of the
completion and time of completion of such transfer and the terms thereof as may
be reasonably requested by the Tagging Persons.
(c) If at the termination of the Tag-Along Notice Period any Tagging
Person shall not have elected to participate in the Tag-Along Sale, such Tagging
Person will be deemed to have waived its rights under Section 4.01(a) with
respect to the transfer of its securities pursuant to such Tag-Along Sale.
(d) If any Tagging Person declines to exercise its Tag-Along Rights or
elects to exercise its Tag-Along Rights with respect to less than such Tagging
Person's Tag-Along Portion, the DLJ Entities shall be entitled to transfer,
pursuant to the Tag-Along Offer, a number of Shares held by the DLJ Entities
equal to the number of Shares constituting the portion of such Tagging Person's
Tag-Along Portion with respect to which Tag-Along Rights were not exercised.
(e) The DLJ Entities and any Tagging Person who exercises the TagAlong
Rights pursuant to this Section 4.01 may sell the Shares subject to the Tag-
Along Offer on the terms and conditions set forth in the Tag-Along Notice
(provided, however, that the cash price payable in any such sale may exceed the
cash price specified in the Tag-Along Notice by up to 10%) within 120 days of
the date on which Tag-Along Rights shall have been waived, exercised or expire.
SECTION 4.02. Right to Compel Participation in Certain Transfers. (a)
If (i) the DLJ Entities propose to transfer not less than 50% of their Initial
Ownership of Common Stock to a Third Party in a bona fide sale, (ii) the DLJ
Entities propose a transfer in which the Shares to be transferred by the DLJ
Entities, the Institutional Shareholders and their Permitted Transferees
constitute more than 50% of the outstanding shares of Common Stock (a "Section
4.02 Sale"), the DLJ Entities may at their option require all Other Shareholders
to sell the Subject Securities ("Drag-Along Rights") then held by every Other
Shareholder, and (subject to and at the closing of the Section 4.02 Sale) to
exercise all, but not less than all, of the options held by every Other
Shareholder and to sell all of the shares of Common Stock received upon such
exercise to such Third Party, for the same consideration per share of Common
Stock and otherwise on the same terms and conditions as the DLJ Entities;
provided that any
<PAGE>
Other Shareholder who holds options the exercise price per share of which is
greater than the per share price at which the Shares are to be sold to the Third
Party may, if required by the DLJ Entities to exercise such options, in place of
such exercise, submit to irrevocable cancellation thereof without any liability
for payment of any exercise price with respect thereto. In the event the Section
4.02 Sale is not consummated with respect to any shares acquired upon exercise
of such options, or the Section 4.02 Sale is not consummated, such options shall
be deemed not to have been exercised or cancelled, as applicable. DLJMB shall
provide written notice of such Section 4.02 Sale to the Other Shareholders (a
"Section 4.02 Notice") not later than the 15th day prior to the proposed Section
4.02 Sale. The Section 4.02 Notice shall identify the transferee, the number of
Subject Securities, the consideration for which a transfer is proposed to be
made (the "Section 4.02 Sale Price") and all other material terms and conditions
of the Section 4.02 Sale. The number of shares of Common Stock to be sold by
each Other Shareholder will be the Drag-Along Portion of the shares of Common
Stock that such Other Shareholder owns. Subject to Section 4.02(d), each Other
Shareholder shall be required to participate in the Section 4.02 Sale on the
terms and conditions set forth in the Section 4.02 Notice and to tender all its
Subject Securities as set forth below. It is understood that to the extent the
DLJ Entities can do so without affecting the other terms on which the Section
4.02 Sale is proposed to be made, the DLJ Entities will seek to exclude from the
terms of such Section 4.02 Sale any material restrictions on the ability,
following such Section 4.02 Sale, of any Other Shareholder to conduct its
business in a manner consistent with past practice. The price payable in such
transfer shall be the Section 4.02 Sale Price. Not later than the 10th day
following the date of the Section 4.02 Notice (the "Section 4.02 Notice
Period"), each of the Other Shareholders shall deliver to a representative of
DLJMB designated in the Section 4.02 Notice certificates representing all
Subject Securities held by such Other Shareholder, duly endorsed, together with
all other documents required to be executed in connection with such Section 4.02
Sale or, if such delivery is not permitted by applicable law, an unconditional
agreement to deliver such Subject Securities pursuant to this Section 4.02 at
the closing for such Section 4.02 Sale against delivery to such Other
Shareholder of the consideration therefor. If an Other Shareholder should fail
to deliver such certificates to DLJMB, the Company shall cause the books and
records of the Company to show that such Subject Securities are bound by the
provisions of this Section 4.02 and that such Subject Securities shall be
transferred to the purchaser of the Subject Securities immediately upon
surrender for transfer by the holder thereof.
(b) The DLJ Entities shall have a period of 90 days from the date of
receipt of the Section 4.02 Notice to consummate the Section 4.02 Sale on the
terms and conditions set forth in such Section 4.02 Sale Notice. If the Section
4.02 Sale shall not have been consummated during such period, DLJMB shall return
to each of the Other Shareholders all certificates representing Shares that such
Other Shareholder delivered for transfer pursuant hereto, together with any
documents in the possession of DLJMB executed by the Other Shareholder in
<PAGE>
connection with such proposed transfer, and all the restrictions on transfer
contained in this Agreement or otherwise applicable at such time with respect to
Common Stock owned by the Other Shareholders shall again be in effect.
(c) Concurrently with the consummation of the transfer of Shares
pursuant to this Section 4.02, DLJMB shall give notice thereof to all
Shareholders, shall remit to each of the Shareholders who have surrendered their
certificates the total consideration (by bank or certified check) for the Shares
transferred pursuant hereto and shall furnish such other evidence of the
completion and time of completion of such transfer and the terms thereof as may
be reasonably requested by such Shareholders.
(d) Notwithstanding any provision of this Agreement to the contrary,
in the event the terms on which a Section 4.02 Sale is proposed to be made shall
include a provision which materially and adversely affects the ability of any
Other Shareholder to compete in any line of business or geographic area, such
Other Shareholder shall not be required to participate in the Section 4.02 Sale
on the terms and conditions set forth in the Section 4.02 Notice. In the event
any Shareholder shall elect, pursuant to the preceding sentence, not to
participate in the Section 4.02 Sale, the DLJ Entities shall have the right to
purchase, and such Shareholder shall be obligated to sell to the DLJ Entities,
such Shareholder's Subject Securities, at the Section 4.02 Sale Price and on
substantially the same terms (other than any such non-compete provision), not
later than immediately prior to the consummation of the Section 4.02 Sale.
SECTION 4.03. Preemptive Rights. (a) The Company shall provide each
Shareholder with a written notice (a "Section 4.03 Notice") of any proposed
issuance by the Company of Equity Securities at least 10 days prior to the
proposed issuance date. Such notice shall specify the price at which the Equity
Securities are to be issued and the other material terms of the issuance. In the
event the DLJ Entities propose to purchase any such Equity Securities from the
Company, each Other Shareholder shall be entitled to purchase, at the price and
on the terms at which the DLJ Entities propose to purchase such Equity
Securities and specified in such Section 4.03 Notice, such Shareholder's Section
4.03 Portion of the Equity Securities proposed to be issued. A Shareholder may
exercise its rights under this Section 4.03 by delivering written notice of its
election to purchase Equity Securities to the Company, DLJMB and each Other
Shareholder within 5 days of receipt of the Section 4.03 Notice. A delivery of
such a written notice (which notice shall specify the number of shares (or
amount) of Equity Securities to be purchased by the Shareholder submitting such
notice) by such Shareholder shall constitute a binding agreement of such
Shareholder to purchase, subject to the purchase by the DLJ Entities of their
portion of such Equity Securities, at the price and on the terms specified in
the Section 4.03 Notice, the number of shares (or amount) of Equity Securities
specified in such Shareholder's written notice. In the event the Equity
Securities proposed to be issued by the Company are not shares of Common Stock,
it shall be a condition to
<PAGE>
the consummation of the purchase of such Equity Securities pursuant to this
Section 4.03 by any Shareholder that such Shareholder shall execute an amendment
of this Agreement on the terms consistent with this Agreement reasonably
satisfactory to the Company and the DLJ Entities.
(b) In the event any Other Shareholder declines to exercise its
preemptive rights under this Section 4.03 or elects to exercise such rights with
respect to less than such Shareholder's Section 4.03 Portion, the DLJ Entities
shall be entitled to purchase from the Company the number of Equity Securities
constituting the Section 4.03 Portion with respect to which such Other
Shareholder shall not have exercised its preemptive rights.
(c) In the case of any issuance of Equity Securities, the Company
shall have 90 days from the date of the Section 4.03 Notice to consummate the
proposed issuance of any or all of such Equity Securities which the Shareholders
have not elected to purchase at the price and upon terms that are not materially
less favorable to the Company than those specified in the Section 4.03 Notice.
At the consummation of such issuance, the Company shall issue certificates
representing the Equity Securities to be purchased by each Shareholder
exercising preemptive rights pursuant to this Section 4.03 registered in the
name of such Shareholder, against payment by such Shareholder of the purchase
price for such Equity Securities. If the Company proposes to issue Equity
Securities after such 90-day period, it shall again comply with the procedures
set forth in this Section.
(d) Notwithstanding the foregoing, no Shareholder shall be entitled to
purchase Equity Securities as contemplated by this Section 4.03 in connection
with issuances of Equity Securities (i) to employees of the Company or any
Subsidiary pursuant to employee benefit plans or arrangements approved by the
Board (including upon the exercise of employee stock options), (ii) in
connection with any bona fide, arm's-length restructuring of outstanding debt of
the Company or any Subsidiary, or (iii) in connection with any bona fide,
arm'slength direct or indirect merger, acquisition or similar transaction. The
Company shall not be under any obligation to consummate any proposed issuance of
Equity Securities, regardless of whether it shall have delivered a Section 4.03
Notice in respect of such proposed issuance.
(e) The Company will use its reasonable best efforts to provide the
Section 4.03 Notice at least 15 Business Days prior to any proposed issuance of
Equity Securities. In the event it is impracticable to provide the Section 4.03
Notice at least 15 Business Days prior to such issuance, any Shareholder may
offer to finance or arrange to finance the purchase by any other Shareholder of
such other Shareholder's Section 4.03 Portion and such financing or arranging
Shareholder shall be entitled to receive as compensation for such services
reasonable and customary fees and expenses. No Shareholder shall be under any
obligation to provide or arrange such financing for any other Shareholder.
<PAGE>
SECTION 4.04. Certain Other Purchases of Common Stock. In the event, at
any time prior to the Trigger Date, the DLJ Entities shall acquire any shares of
Common Stock from any Person other than the Shareholders, the DLJ Entities shall
deliver, within five Business Days of the date of such acquisition, a notice to
each Other Shareholder (a "Section 4.04 Notice") specifying the number of shares
of Common Stock acquired and the weighted average of price per share paid by the
DLJ Entities. Such Section 4.04 Notice shall constitute an offer to each such
Other Shareholder to purchase such Shareholder's Section 4.04 Portion of the
number of shares of Common Stock acquired by the DLJ Entities. A Shareholder may
exercise its rights under this Section 4.04 by delivering written notice of its
election to purchase its Section 4.04 Portion within 10 days of receipt of the
Section 4.04 Notice. A delivery of such written notice (which shall specify the
number of shares of Common Stock to be purchased by the Shareholder submitting
such notice) by such Shareholder shall constitute a binding agreement of such
Shareholder to purchase, at the price and on the terms specified in the Section
4.04 Notice, the number of shares of Common Stock specified in such notice. At
the consummation of the transfer of the shares of Common Stock purchased by the
DLJ Entities to any Shareholder that shall have exercised its rights hereunder,
the DLJ Entities shall deliver to such Shareholder certificates representing the
shares of Common Stock to be purchased against payment by such Shareholder of
the purchase price for such shares of Common Stock.
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. Demand Registration. (a) If the Company shall receive a
written request by the DLJ Entities or their Permitted Transferees (any such
requesting Person, a "Selling Shareholder") that the Company effect the
registration under the Securities Act of all or a portion of such Selling
Shareholder's Registrable Securities, and specifying the intended method of
disposition thereof, then the Company shall promptly give written notice of such
requested registration (a "Demand Registration") at least 5 days prior to the
anticipated filing date of the registration statement relating to such Demand
Registration to the Other Shareholders and thereupon will use its best efforts
to effect, as expeditiously as possible, the registration under the Securities
Act of:
(i) the Registrable Securities which the Company has been so
requested to register by the Selling Shareholders, then held by the
Selling Shareholders; and
(ii) subject to the restrictions set forth in Section 5.02, all other
Registrable Securities of the same type as that to which the request by
the Selling Shareholders relates which any Other Shareholder entitled
to request the Company to effect a Piggyback Registration (as such term
is
<PAGE>
defined in Section 5.02) pursuant to Section 5.02 (all such
Shareholders, together with the Selling Shareholders, the "Holders")
has requested the Company to register by written request received by
the Company within 2 days (one of which shall be a Business Day) after
the receipt by such Holders of such written notice given by the
Company,
all to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered; provided that, subject to Section 5.01(d) hereof, the Company shall
not be obligated to effect more than six Demand Registrations for the DLJ
Entities; and provided further that the Company shall not be obligated to effect
a Demand Registration unless the aggregate proceeds expected to be received from
the sale of the Common Stock requested to be included in such Demand
Registration, in the reasonable opinion of DLJMB exercised in good faith, equals
or exceeds (x) $50,000,000 if such Demand Registration would constitute the
First Public Offering, or (y) $10,000,000 in all other cases. In no event will
the Company be required to effect more than one Demand Registration within any
four-month period.
(b) Promptly after the expiration of the 2-day period referred to in
Section 5.01(a)(ii) hereof, the Company will notify all the Holders to be
included in the Demand Registration of the other Holders and the number of
Registrable Securities requested to be included therein. The Selling
Shareholders requesting a registration under Section 5.01(a) may, at any time
prior to the effective date of the registration statement relating to such
registration, revoke such request, without liability to any of the other
Holders, by providing a written notice to the Company revoking such request, in
which case such request, so revoked, shall be considered a Demand Registration
unless such revocation arose out of the fault of the Company or unless the
participating Shareholders reimburse the Company for all costs incurred by the
Company in connection with such registration, in which case such request shall
not be considered a Demand Registration.
(c) The Company will pay all Registration Expenses in connection with
any Demand Registration.
(d) A registration requested pursuant to this Section 5.01 shall not
be deemed to have been effected (i) unless the registration statement relating
thereto (A) has become effective under the Securities Act and (B) has remained
effective for a period of at least 180 days (or such shorter period in which all
Registrable Securities of the Holders included in such registration have
actually been sold thereunder); provided that if after any registration
statement requested pursuant to this Section 5.01 becomes effective (x) such
registration statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court and (y)
less than 75% of the Registrable Securities included in such registration
statement has been sold thereunder, such registration statement shall not be
considered a Demand Registration, or (ii) if the
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Maximum Offering Size (as defined below) is reduced in accordance with Section
5.01(e) such that less than 66 2/3% of the Registrable Securities of the Selling
Shareholders sought to be included in such registration are included.
(e) If a Demand Registration involves an Underwritten Public Offering
and the managing underwriter shall advise the Company and the Selling
Shareholders that, in its view, (i) the number of shares of Registrable
Securities requested to be included in such registration (including any
securities which the Company proposes to be included which are not Registrable
Securities) or (ii) the inclusion of some or all of the shares of Registrable
Securities owned by the Holders, in any such case, exceeds the largest number of
shares which can be sold without having an adverse effect on such offering,
including the price at which such shares can be sold (the "Maximum Offering
Size"), the Company will include in such registration, in the priority listed
below, up to the Maximum Offering Size:
(A) first, all Registrable Securities requested to be
registered by the parties requesting such Demand Registration
and all Registrable Securities requested to be included in
such registration by any other Holder (allocated, if necessary
for the offering not to exceed the Maximum Offering Size, pro
rata among such Holders on the basis of the relative number of
Registrable Securities so requested to be included in such
registration); and
(B) second, any securities proposed to be registered by
the Company.
(f) Upon written notice to each Selling Shareholder, the Company may
postpone effecting a registration pursuant to this Section 5.01 on one occasion
during any period of six consecutive months for a reasonable time specified in
the notice but not exceeding 90 days (which period may not be extended or
renewed), if (1) an investment banking firm of recognized national standing
shall advise the Company and the Selling Shareholders in writing that effecting
the registration would materially and adversely affect an offering of securities
of such Company the preparation of which had then been commenced or (2) the
Company is in possession of material non-public information the disclosure of
which during the period specified in such notice the Company believes, in its
reasonable judgment, would not be in the best interests of the Company.
(g) After the Company has effected two Demand Registrations pursuant
to this Section 5.01 of Common Stock, the Other Shareholders, upon request of
the Other Shareholders owning a majority of the Shares acquired by the Other
Shareholders on Closing Date, may request that the Company register Common Stock
which are Registrable Securities then owned by such Other Shareholders. In no
event will the Company be required to effect more than one such Demand
<PAGE>
Registration. The provisions of this Article 5 shall apply, mutatis mutandis,
to any such Demand Registration.
SECTION 5.02. Piggyback Registration. (a) If the Company proposes to
register any of its Common Stock under the Securities Act (including pursuant to
a Demand Registration), whether or not for sale for its own account, it will
each such time, subject to the provisions of Section 5.02(b) hereof, give prompt
written notice at least 5 days prior to the anticipated filing date of the
registration statement relating to such registration to all Shareholders and
their respective Permitted Transferees (or, in the case of a Demand Registration
requested by the DLJ Entities, to all Other Shareholders), which notice shall
set forth such Shareholders' rights under this Section 5.02 and shall offer all
Shareholders the opportunity to include in such registration statement such
number of shares of Common Stock as each such Shareholder may request (a
"Piggyback Registration"). Upon the written request of any such Shareholder made
within 2 days (one of which shall be a Business Day) after the receipt of notice
from the Company (which request shall specify the number of shares of Common
Stock intended to be disposed of by such Shareholder), the Company will use its
reasonable best efforts to effect the registration under the Securities Act of
all shares of Common Stock which the Company has been so requested to register
by such Shareholders, to the extent requisite to permit the disposition of the
shares of Common Stock so to be registered; provided that (i) if such
registration involves an Underwritten Public Offering, all such Shareholders
requesting to be included in the Company's registration must sell their
Registrable Securities to the underwriters selected as provided in Section
5.04(f) on the same terms and conditions as apply to the Company or the Selling
Shareholder, as applicable, and (ii) if, at any time after giving written notice
of its intention to register any stock pursuant to this Section 5.02(a) and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register such stock, the Company shall give written notice to all such
Shareholders and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration; and provided
further that the right of the Management Shareholders and their Permitted
Transferees to request a Piggyback Registration will be subject to the Public
Offering Limitations. No registration effected under this Section 5.02 shall
relieve the Company of its obligations to effect a Demand Registration to the
extent required by Section 5.01 hereof. The Company will pay all Registration
Expenses in connection with each registration of Registrable Securities
requested pursuant to this Section 5.02.
(b) If a registration pursuant to this Section 5.02 involves an
Underwritten Public Offering (other than in the case of an Underwritten Public
Offering requested by the DLJ Entities in a Demand Registration, in which case
the provisions with respect to priority of inclusion in such offering set forth
in Section 5.01(e) shall apply) and the managing underwriter advises the Company
that, in its view, the number of shares of Common Stock which the Company and
<PAGE>
the selling Shareholders intend to include in such registration exceeds the
Maximum Offering Size, the Company will include in such registration, in the
following priority, up to the Maximum Offering Size:
(i) first, so much of the Common Stock proposed to be registered for
the account of the Company as would not cause the offering to exceed
the Maximum Offering Size; and
(ii) second, all Registrable Securities requested to be included in
such registration by any Shareholder pursuant to Section 5.02
(allocated, if necessary for the offering not to exceed the Maximum
Offering Size, pro rata among such Shareholders on the basis of the
relative number of shares of Registrable Securities so requested to be
included in such registration).
SECTION 5.03. Holdback Agreements. With respect to each and every
firmly underwritten Public Offering, each Shareholder agrees and their Permitted
Transferees will agree not to offer or sell any shares of Common Stock (except
for shares of Common Stock, if any, sold in that Public Offering) during the 14
days prior to the effective date of the applicable registration statement for a
public offering of shares of Common Stock (except as part of such registration)
and during the period after such effective date equal to the lesser of: (i) 180
days or (ii) any such shorter period as the Company and the lead managing
underwriter of an Underwritten Public Offering agree.
SECTION 5.04. Registration Procedures. Whenever Shareholders request
that any Registrable Securities be registered pursuant to Section 5.01 or 5.02
hereof, the Company will, subject to the provisions of such Sections, use its
reasonable best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof as quickly as practicable, and in connection with any such request:
(a) The Company will as expeditiously as possible prepare and file
with the SEC a registration statement on any form selected by counsel for the
Company and which form shall be available for the sale of the Registrable
Securities to be registered thereunder in accordance with the intended method of
distribution thereof, and use its reasonable best efforts to cause such filed
registration statement to become and remain effective for a period of not less
than 180 days (or such shorter period in which all of the Registrable Securities
of the Holders included in such registration statement shall have actually been
sold thereunder).
(b) The Company will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to each
Shareholder and each underwriter, if any, of the Registrable Securities covered
by such registration statement copies of such registration statement as proposed
to be filed, and thereafter the Company will furnish to such Shareholder and
<PAGE>
underwriter, if any, such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein), the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as such Shareholder or underwriter may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by such
Shareholder. Each Shareholder shall have the right to request that the Company
modify any information contained in such registration statement, amendment and
supplement thereto pertaining to such Shareholder and the Company shall use its
reasonable best efforts to comply with such request, provided, however, that the
Company shall not have any obligation to so modify any information if so doing
would cause the prospectus to contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
(c) After the filing of the registration statement, the Company will
(i) cause the related prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act, (ii) comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
registration statement during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
registration statement or supplement to such prospectus and (iii) promptly
notify each Shareholder holding Registrable Securities covered by such
registration statement of any stop order issued or threatened by the SEC or any
state securities commission under state blue sky laws and take all reasonable
actions required to prevent the entry of such stop order or to remove it if
entered.
(d) The Company will use its reasonable best efforts to (i) register
or qualify the Registrable Securities covered by such registration statement
under such other securities or blue sky laws of such jurisdictions in the United
States as any Shareholder holding such Registrable Securities reasonably (in
light of such Shareholder's intended plan of distribution) requests and (ii)
cause such Registrable Securities to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Shareholder to
consummate the disposition of the Registrable Securities owned by such
Shareholder; provided that the Company will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph (d), (B) subject itself to taxation
in any such jurisdiction or (C) consent to general service of process in any
such jurisdiction.
(e) The Company will immediately notify each Shareholder holding such
Registrable Securities covered by such registration statement, at any time
<PAGE>
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and promptly prepare and make available to each such Shareholder and
file with the SEC any such supplement or amendment.
(f) In connection with (i) any Demand Registration requested by the
DLJ Entities or their Permitted Transferees or (ii) any registration of
Registrable Securities pursuant to this Article 5 the Company shall appoint the
underwriter or underwriters chosen by DLJMB. The Company will enter into
customary agreements (including an underwriting agreement in customary form) and
take such other actions as are reasonably required in order to expedite or
facilitate the disposition of such Registrable Securities, including the
engagement of a "qualified independent underwriter" in connection with the
qualification of the underwriting arrangements with the NASD.
(g) Upon execution of confidentiality agreements in form and substance
reasonably satisfactory to the Company, the Company will make available for
inspection by any Shareholder and any underwriter participating in any
disposition pursuant to a registration statement being filed by the Company
pursuant to this Section 5.04 and any attorney, accountant or other professional
retained by any such Shareholder or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records") as shall be
reasonably requested by any such Person, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
Inspectors in connection with such registration statement.
(h) The Company will furnish to each such Shareholder and to each such
underwriter, if any, a signed counterpart, addressed to such underwriter and the
participating Shareholders, of (i) an opinion or opinions of counsel to the
Company and (ii) a comfort letter or comfort letters from the Company's
independent public accountants, each in customary form and covering such matters
of the type customarily covered by opinions or comfort letters, as the case may
be, as a majority of such Shareholders or the managing underwriter therefor
reasonably requests.
(i) The Company will otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the SEC and the relevant
state blue sky commissions, and make available to its securityholders, as soon
as reasonably practicable, an earnings statement covering a period of 12 months,
beginning within three months after the effective date of the registration
<PAGE>
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act.
(j) The Company may require each such Shareholder to promptly furnish
in writing to the Company information regarding the distribution of the
Registrable Securities as the Company may from time to time reasonably request
and such other information as may be legally required in connection with such
registration.
(k) Each such Shareholder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
5.04(e) hereof, such Shareholder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Shareholder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 5.04(e) hereof, and,
if so directed by the Company, such Shareholder will deliver to the Company all
copies, other than any permanent file copies then in such Shareholder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event that the Company shall give
such notice, the Company shall extend the period during which such registration
statement shall be maintained effective (including the period referred to in
Section 5.04(a) hereof) by the number of days during the period from and
including the date of the giving of notice pursuant to Section 5.04(e) hereof to
the date when the Company shall make available to such Shareholder a prospectus
supplemented or amended to conform with the requirements of Section 5.04(e)
hereof.
(l) The Company will use its reasonable best efforts to list such
Registrable Securities on any securities exchange on which the Common Stock is
then listed or on NASDAQ if the Common Stock is then quoted on NASDAQ not later
than the effective date of such registration statement.
SECTION 5.05. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Shareholder holding Registrable Securities
covered by a registration statement, its officers, directors, employees,
partners and agents, and each Person, if any, who controls such Shareholder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (and officers, directors, employees, partners and agents of such
controlling Persons) from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Registrable Securities (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue
<PAGE>
statement or omission or alleged untrue statement or omission so made in strict
conformity with information furnished in writing to the Company by such
Shareholder or on such Shareholder's behalf expressly for use therein; provided
that with respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus, or in any prospectus,
as the case may be, the indemnity agreement contained in this paragraph shall
not apply to the extent that any such loss, claim, damage, liability or expense
results from the fact that a current copy of the prospectus (or, in the case of
a prospectus, the prospectus as amended or supplemented) was not sent or given
to the Person asserting any such loss, claim, damage, liability or expense at or
prior to the written confirmation of the sale of the Registrable Securities
concerned to such Person if it is determined that the Company has provided such
current copy of such prospectus (or such amended or supplemented prospectus, as
the case may be) to such Shareholder in a timely manner prior to such sale and
it was the responsibility of such Shareholder under the Securities Act to
provide such Person with a current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) and such current copy of the
prospectus (or such amended or supplemented prospectus, as the case may be)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense. The Company also agrees to indemnify any underwriters of the
Registrable Securities, their officers and directors and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Shareholders provided in this Section 5.05.
SECTION 5.06. Indemnification by Participating Shareholders. Each
Shareholder holding Registrable Securities included in any registration
statement agrees, severally but not jointly, to indemnify and hold harmless the
Company, its officers, directors and agents and each Person (other than such
Shareholder) if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to such Shareholder, but only
(i) with respect to information furnished in writing by such Shareholder or on
such Shareholder's behalf expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus or (ii) to the extent that any
loss, claim, damage, liability or expense described in Section 5.05 results from
the fact that a current copy of the prospectus (or, in the case of a prospectus,
the prospectus as amended or supplemented) was not sent or given to the Person
asserting any such loss, claim, damage, liability or expense at or prior to the
written confirmation of the sale of the Registrable Securities concerned to such
Person if it is determined that it was the responsibility of such Shareholder to
provide such Person with a current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) and such current copy of the
prospectus (or such amended or supplemented prospectus, as the case may be)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense. Each such Shareholder shall be prepared, if required by the
underwriting agreement, to indemnify and hold
<PAGE>
harmless underwriters of the Registrable Securities, their officers and
directors and each person who controls such underwriters on substantially the
same basis as that of the indemnification of the Company provided in this
Section 5.06. As a condition to including Registrable Securities in any
registration statement filed in accordance with Article 5 hereof, the Company
may require that it shall have received an undertaking reasonably satisfactory
to it from any underwriter to indemnify and hold it harmless to the extent
customarily provided by underwriters with respect to similar securities.
No Shareholder shall be liable under Section 5.06 for any damage
thereunder in excess of the net proceeds realized by such Shareholder in the
sale of the Registrable Securities of such Shareholder.
SECTION 5.07. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
this Article 5, such Person (an "Indemnified Party") shall promptly notify the
Person against whom such indemnity may be sought (the "Indemnifying Party") in
writing and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all fees and expenses; provided that the failure of
any Indemnified Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent that the
Indemnifying Party is materially prejudiced by such failure to notify. In any
such proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of such Indemnified Party representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Indemnified Parties, such firm shall be designated in writing by the Indemnified
Parties. The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent, or if there be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any and all losses, claims, damages, liabilities and expenses or
liability (to the extent stated above) by reason of such settlement or judgment.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such
<PAGE>
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability arising out of such proceeding.
SECTION 5.08. Contribution. If the indemnification provided for in this
Article 5 is held by a court of competent jurisdiction to be unavailable to the
Indemnified Parties in respect of any losses, claims, damages or liabilities
referred to herein, then each such Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (i)
as between the Company and the Shareholders holding Registrable Securities
covered by a registration statement and their related Indemnified Parties on the
one hand and the underwriters and their related Indemnified Parties on the
other, in such proportion as is appropriate to reflect the relative benefits
received by the Company and such Shareholders on the one hand and the
underwriters on the other, from the offering of the Shareholders' Registrable
Securities, or if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits but also
the relative fault of the Company and such Shareholders on the one hand and of
such underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations and (ii) as between the Company and
their related Indemnified Parties on the one hand and each such Shareholder and
their related Indemnified Parties on the other, in such proportion as is
appropriate to reflect the relative fault of the Company and of each such
Shareholder in connection with such statements or omissions, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and such Shareholders on the one hand and such underwriters on the other
shall be deemed to be in the same proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company and such Shareholders bear to the total
underwriting discounts and commissions received by such underwriters, in each
case as set forth in the table on the cover page of the prospectus. The relative
fault of the Company and such Shareholders on the one hand and of such
underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and such Shareholders or by such underwriters. The
relative fault of the Company on the one hand and of each such Shareholder on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Shareholders agree that it would not be just and
equitable if contribution pursuant to this Section 5.08 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the
<PAGE>
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5.08 no underwriter shall be
required to contribute any amount in excess of the underwriting discount
applicable to securities purchased by such underwriter in such offering, less
the aggregate amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no Shareholder shall be required to contribute any
amount in excess of the amount by which the net proceeds realized on the sale of
the Registrable Securities of such Shareholder exceeds the amount of any damages
which such Shareholder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Each Shareholder's obligation
to contribute pursuant to this Section 5.08 is several in the proportion that
the proceeds of the offering received by such Shareholder bears to the total
proceeds of the offering received by all such Shareholders and not joint.
SECTION 5.09. Participation in Public Offering. No Person may
participate in any Underwritten Public Offering hereunder unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and the provisions of
this Agreement in respect of registration rights.
SECTION 5.10. Cooperation by the Company. In the event any Shareholder
shall transfer any Registrable Securities pursuant to Rule 144A under the
Securities Act, the Company shall cooperate, to the extent commercially
reasonable, with such Shareholder and shall provide to such Shareholder such
information as such Shareholder shall reasonably request.
SECTION 5.11. No Transfer of Registration Rights. None of the rights of
Shareholders under this Article 5 shall be assignable by any Shareholder to any
Person acquiring securities of such Shareholder in any Public Offering or
pursuant to Rule 144A of the Securities Act.
<PAGE>
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
SECTION 6.01. Confidentiality. (a) Each Shareholder hereby agrees that
Confidential Information (as defined below) furnished and to be furnished to it
was and will be made available in connection with such Shareholder's investment
in the Company. Each Shareholder agrees that it will use the Confidential
Information only in connection with its investment in the Company and not for
any other purpose. Each Shareholder further acknowledges and agrees that it will
not disclose any Confidential Information to any Person; provided that
Confidential Information may be disclosed (i) to such Shareholder's
Representatives (as defined below) in the normal course of the performance of
their duties or to any financial institution providing credit to such
Shareholder, (ii) to the extent required by applicable law, rule or regulation
(including complying with any oral or written questions, interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process to which a Shareholder is subject; provided that such
Shareholder gives the Company prompt notice of such request(s), to the extent
practicable, so that the Company may seek an appropriate protective order or
similar relief (and the Shareholder shall cooperate with such efforts by the
Company, and shall in any event make only the minimum disclosure required by
such law, rule or regulation)), (iii) to any Person to whom such Shareholder is
contemplating a transfer of its Shares (provided that such transfer would not be
in violation of the provisions of this Agreement and as long as such potential
transferee is advised of the confidential nature of such information and agrees
to be bound by a confidentiality agreement in form and substance satisfactory to
the Company (it being understood that a confidentiality agreement consistent
with the provisions hereof shall be satisfactory to the Company)) or (iv) if the
prior written consent of the Board shall have been obtained. Nothing contained
herein shall prevent the use (subject, to the extent possible, to a protective
order) of Confidential Information in connection with the assertion or defense
of any claim by or against the Company or any Shareholder.
(b) "Confidential Information" means any information concerning the
Company and Persons which are or become its subsidiaries or the financial
condition, business, operations or prospects of the Company and Persons which
are or become its subsidiaries in the possession of or furnished to any
Shareholder (including, without limitation by virtue of its present or former
right to designate a director of the Company); provided that the term
"Confidential Information" does not include information which (i) is or becomes
generally available to the public other than as a result of a disclosure by a
Shareholder or its partners, directors, officers, employees, agents, counsel,
investment advisers or representatives (all such persons being collectively
referred to as "Representatives") in violation of the Merger Agreement or this
Agreement, (ii) is or was available to such Shareholder on a nonconfidential
basis prior to its disclosure to such Shareholder or its Representatives by the
Company or (iii) was or becomes available to such Shareholder on a
non-confidential basis from a source other than the Company,
<PAGE>
provided that such source is or was (at the time of receipt of the relevant
information) not, to the best of such Shareholder's knowledge, bound by a
confidentiality agreement with (or other confidentiality obligation to) the
Company or another Person.
SECTION 6.02. Reports. The Company will furnish the Institutional
Shareholders with the quarterly and annual financial reports that the Company is
required to file with the Securities and Exchange Commission pursuant to Section
13 or Section 15(d) of the Exchange Act promptly after the filing thereof or, in
the event the Company is not required to file such reports, quarterly and annual
reports containing the same information as would be required in such reports on
the date that such reports would otherwise be filed.
SECTION 6.03. Limitations on Subsequent Registration. The Company shall
not enter into any agreement with any holder or prospective holder of any
securities of the Company (a) that would allow such holder or prospective holder
to include such securities in any registration filed pursuant to Section 5.01 or
5.02 hereof, unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of such securities would not reduce the amount of
the Registrable Securities of the Shareholders included therein or (b) on terms
otherwise more favorable than this Agreement.
SECTION 6.04. Exclusive Financial Advisor and Investment Banking
Advisor. During the period from and including the date hereof through and
including the fifth anniversary of the date hereof, Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJSC"), or any Affiliate that DLJMB may choose in its
sole discretion, shall be engaged as the exclusive financial advisor and
investment banker for the Company on financial and other terms customary in the
industry to be agreed between the Company and DLJSC.
SECTION 6.05. Limitation on Purchase of Common Stock. Until the earlier
to occur of (i) the seventh anniversary of the Closing Date or (ii) the date on
which at least 40% of the outstanding Common Stock on a Fully Diluted basis of
the Company is held by Persons other than the Shareholders (the "Trigger Date"),
no Institutional Shareholder shall acquire any shares of Common Stock except (i)
in a purchase of Equity Securities pursuant to Section 4.03 or Section 4.04
hereof or (ii) in a transfer from any other Shareholder which is otherwise
permitted under the terms of Article 3 hereof.
<PAGE>
ARTICLE 7
MISCELLANEOUS
SECTION 7.01. Entire Agreement. This Agreement, the Merger Agreement
and the Subscription Agreement constitute the entire agreement among the parties
with respect to the subject matter hereof and thereof and supersede all prior
and contemporaneous agreements and understandings, both oral and written,
between the parties with respect to the subject matter hereof and thereof.
SECTION 7.02. Binding Effect; Benefit. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, successors, legal representatives and permitted assigns. Nothing in this
Agreement, expressed or implied, is intended to confer on any Person other than
the parties hereto, and their respective heirs, successors, legal
representatives and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
SECTION 7.03. Assignability. (a) Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by the Company or any Shareholder; provided that any Person acquiring
shares of Common Stock who is required by the terms of this Agreement to become
a party hereto shall execute and deliver to the Company an agreement to be bound
by this Agreement and shall thenceforth be a "Shareholder".
(b) Any Permitted Transferee of a Management Shareholder who shall
become a party hereto shall be deemed a "Management Shareholder".
(c) Any Permitted Transferee of an Institutional Shareholder who shall
become a party to this Agreement shall be deemed an "Institutional Shareholder".
SECTION 7.04. Amendment; Waiver; Termination. (a) No provision of this
Agreement may be waived except by an instrument in writing executed by the party
against whom the waiver is to be effective. No provision of this Agreement may
be amended or otherwise modified except by an instrument in writing executed by
the Company with approval of the Board of Directors and holders of at least 50%
of the Shares held by the parties to this Agreement at the time of such proposed
amendment or modification.
(b) In addition, any amendment or modification of any provision of
this Agreement that would adversely affect any DLJ Entity may be effected only
with the consent of such DLJ Entity.
<PAGE>
(c) In addition, any amendment or modification of any provision of
this Agreement that would adversely affect any (i) Institutional Shareholder may
be effected only with the consent of Institutional Shareholders holding at least
50% of the shares held by the Institutional Shareholders or (ii) Management
Shareholder may be effected only with the consent of Management Shareholders
holding at least 50% of the shares held by the Management Shareholders.
(d) This Agreement shall terminate on the tenth anniversary of the
date hereof unless earlier terminated.
SECTION 7.05. Notices. (a) All notices and other communications given
or made pursuant hereto or pursuant to any other agreement among the parties,
unless otherwise specified, shall be in writing and shall be deemed to have been
duly given and received when sent by fax (with confirmation in writing via first
class U.S. mail) or delivered personally or on the third Business Day after
being sent by registered or certified U.S. mail (postage prepaid, return receipt
requested) to the parties at the fax number or address set forth below or at
such other addresses as shall be furnished by the parties by like notice:
if to the Company to:
DecisionOne Holdings Corp.
50 East Swedesford Road
Frazer, PA 19355
Attention: Thomas M. Molchan, Esq.
Fax: 610-408-3820
if to any Shareholder, to such Shareholder at the address
specified by such Shareholder on the signature pages of this
Agreement or in a notice given by such Shareholder to the
Company for such purpose with a copy, in the case of the
Institutional Shareholders (other than the Sprout Entities),
to
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: David A. Katz, Esq.
Fax: 212-403-2000
Any Person who becomes a Shareholder shall provide its address and fax
number to the Company, which shall promptly provide such information to each
other Shareholder.
(b) Notices required to be given pursuant to Sections 5.01(a) and
5.01(b) and Section 5.02 by the Company shall be deemed given only if such
notices are
<PAGE>
also be given telephonically and by fax to the following persons (or any other
individual the respective entities may designate in writing to the Company to
replace such person):
(i) for the benefit of the Management Shareholders, to Thomas
M. Molchan at 610-296-6212 and fax: 610-408-3820;
(ii) for the benefit of the Apollo Entities, to any of Michael Gross
at 212-261-4009, fax: 212-___-____, Joshua Harris at 212-261-4032, fax:
212-___-____, or Marc Becker at 212-261-4061, fax: 212-___-____;
(iii) for the benefit of the Bain Entities, to Stephen Pagliuca at
617-572-2629, fax: 617-___-____ or Domenic Ferrante at 617-572-2563,
fax: 617-___-____;
(iv) for the benefit of the THL Entities, to any of Scott A. Schoen,
Scott M. Sperling or Kent R. Weldon at 617-227-1050, fax: 617-___-
----;
(v) for the benefit of the Sprout Entities, to __________;
(vi) for the benefit of the Ontario Teachers' Pension Plan Board,
to Dean Metcalf at 416-730-6166, fax: 416-___-____;
(vii) in the case of any registration not requested by the DLJ
Entities, for the benefit of the DLJ Entities, to Peter Grauer, at
212-892-3636, fax: 212-892-7272; and
(viii) to David Katz at 212-403-1000, fax: 212-403-2000.
SECTION 7.06. Headings. The headings contained in this Agreement are
for convenience only and shall not affect the meaning or interpretation of this
Agreement.
SECTION 7.07. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument.
SECTION 7.08. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the conflicts of laws rules of such state.
SECTION 7.09. Specific Enforcement. Each party hereto acknowledges that
the remedies at law of the other parties for a breach or threatened breach of
this Agreement would be inadequate and, in recognition of this fact, any party
to this Agreement, without posting any bond, and in addition to all other
remedies
<PAGE>
which may be available, shall be entitled to obtain equitable relief in the form
of specific performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available.
SECTION 7.10. Consent to Jurisdiction; Expenses. (a) Any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in any Federal Court sitting in New York,
New York, or any New York State court sitting in New York, New York, and each of
the parties hereby consents to the exclusive jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party by any method provided in Section 7.05 shall be
deemed effective service of process on such party and consents to the personal
jurisdiction of any Federal Court sitting in New York, New York, or any New York
State court sitting in New York, New York.
(b) In any dispute arising under this Agreement among any of the
parties hereto, the costs and expenses (including, without limitation, the
reasonable fees and expenses of counsel) incurred by the prevailing party shall
be paid by the party that does not prevail.
SECTION 7.11. Severability. If one or more provisions of this Agreement
are held to be unenforceable to any extent under applicable law, such provision
shall be interpreted as if it were written so as to be enforceable to the
maximum possible extent so as to effectuate the parties' intent to the maximum
possible extent, and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms to the maximum extent permitted by law.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
DECISIONONE HOLDINGS CORP.
By: /s/ Thomas J. Fitzpatrick
Name: Thomas J. Fitzpatrick
Title: Vice President and Chief
Financial Officer
DLJ MERCHANT BANKING PARTNERS
II, L.P., a Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-fact
Address:
c/o DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ MERCHANT BANKING PARTNERS
II-A, L.P., a Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-fact
Address:
c/o DLJ Merchant Banking II, Inc.
<PAGE>
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ OFFSHORE PARTNERS II, C.V., a
Netherlands Antilles Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as advisory general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-fact
Address:
c/o DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ DIVERSIFIED PARTNERS, L.P., a
Delaware Limited Partnership
By: DLJ Diversified Partners II, Inc.,
as managing general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-fact
Address:
c/o DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
<PAGE>
DLJ DIVERSIFIED PARTNERS-A, L.P., a
Delaware Limited Partnership
By: DLJ Diversified Partners II, Inc.,
as managing general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-fact
Address:
c/o DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJ MILLENNIUM PARTNERS, L.P., a
Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-fact
Address:
c/o DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
<PAGE>
DLJ MILLENNIUM PARTNERS-A, L.P.,
a Delaware Limited Partnership
By: DLJ Merchant Banking II, Inc.,
as managing general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-fact
Address:
c/o DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
DLJMB FUNDING II, INC., a Delaware
corporation
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-fact
Address:
c/o DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
<PAGE>
DLJ FIRST ESC, L.L.C.,
By: DLJ LBO Plans Management Corporation,
as manager
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-fact
Address:
c/o DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
UK INVESTMENT PLAN 1997 PARTNERS
By: Donaldson, Lufkin & Jenrette, Inc.,
as general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-fact
Address:
c/o DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
<PAGE>
DLJ EAB PARTNERS, L.P.
By: DLJ Merchant Banking Funding II, Inc.,
its general partner
By: /s/ Kirk B. Wortman
Name: Kirk B. Wortman
Title: Attorney-in-fact
Address:
c/o DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, NY 10172
Fax: 212-892-7272
APOLLO INVESTMENT FUND III, L.P.
By Apollo Advisors II, L.P., its
general partner
By Apollo Capital Management II, Inc.,
its general partner
By: /s/ Josh Harris
Name: Josh Harris
Title: Vice President
Address:
1301 Avenue of the Americas
38th Floor
New York, NY 10019
Fax: 212-261-4102
<PAGE>
APOLLO OVERSEAS PARTNERS III L.P.
By Apollo Advisors II, L.P., its
general partner
By Apollo Capital Management II, Inc.,
its general partner
By: /s/ Josh Harris
Name: Josh Harris
Title: Vice President
Address:
1301 Avenue of the Americas
38th Floor
New York, NY 10019
Fax: 212-261-4102
APOLLO U.K. PARTNERS III, L.P.
By Apollo Advisors II, L.P., its
general partner
By Apollo Capital Management II, Inc.,
its general partner
By: /s/ Josh Harris
Name: Josh Harris
Title: Vice President
Address:
1301 Avenue of the Americas
38th Floor
New York, NY 10019
Fax: 212-261-4102
<PAGE>
BAIN CAPITAL FUND V L.P.
By: Bain Capital Partners V, L.P.,
its general partner
By: Bain Capital Investors V, Inc., its
general partner
By: /s/ Stephen Pagliuca
Name: Stephen Pagliuca
Title: General Partner
Address:
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Attention: Stephen Pagliuca
Fax: 617-572-3274
BAIN CAPITAL FUND, V-B, L.P.
By: Bain Capital Investors V, L.P., its
general partner
By: Bain Capital Investors V, Inc.,
its general partner
By: /s/ Stephen Pagliuca
Name: Stephen Pagliuca
Title: General Partner
Address:
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Attention: Stephen Pagliuca
Fax: 617-572-3274
BCIP ASSOCIATES
By: /s/ Stephen Pagliuca
<PAGE>
Name: Stephen Pagliuca
Title: General Partner
Address:
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Attention: Stephen Pagliuca
Fax: 617-572-3274
BCIP TRUST ASSOCIATES, L.P.
By: Bain Capital Investors V, L.P., its
general partner
By: /s/ Stephen Pagliuca
Name: Stephen Pagliuca
Title: General Partner
Address:
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Attention: Stephen Pagliuca
Fax: 617-572-3274
<PAGE>
THOMAS H. LEE EQUITY FUND III, L.P.
By: THL Equity Advisors III
Limited Partnership
By: THL Equity Trust III
By: /s/ Scott Schoen
Name: Scott Schoen
Title: Managing Director
Address:
c/o Thomas H. Lee Company
75 State Street
Boston, MA 02109
Fax: 617-227-3514
THOMAS H. LEE FOREIGN FUND III, L.P.
By: THL Equity Advisors III
Limited Partnership
By: THL Equity Trust III
By: /s/ Scott Schoen
Name: Scott Schoen
Title: Managing Director
Address:
c/o Thomas H. Lee Company
75 State Street
Boston, MA 02109
Fax: 617-227-3514
<PAGE>
THL CO-INVESTORS III-A LLC
By: /s/ Thomas H. Lee
Name: Thomas H. Lee
Title: Manager
Address:
c/o Thomas H. Lee Company
75 State Street
Boston, MA 02109
Fax: 617-227-3514
THL CO-INVESTORS III-B LLC
By: /s/ Thomas H. Lee
Name: Thomas H. Lee
Title: Manager
Address:
c/o Thomas H. Lee Company
75 State Street
Boston, MA 02109
Fax: 617-227-3514
DLJ CAPITAL CORP.
By: /s/ Art Zuckerman
Name: Art Zuckerman
Title:
Address:
277 Park Avenue
New York, NY 10172
Fax: 212-892-3444
<PAGE>
SPROUT GROWTH II, L.P.
By: DLJ Capital Corporation,
its managing general partner
By: /s/ Art Zuckerman
Name: Art Zuckerman
Title:
Address:
277 Park Avenue
New York, NY 10172
Fax: 212-892-3444
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corporation,
its managing general partner
By: /s/ Art Zuckerman
Name: Art Zuckerman
Title:
Address:
277 Park Avenue
New York, NY 10172
Fax: 212-892-3444
<PAGE>
ONTARIO TEACHERS' PENSION PLAN BOARD
By: /s/ Dean Metcalf
Name: Dean Metcalf
Title: Portfolio Manager, Merchant
Banking
Address:
5650 Yonge Street
North York, Ontario
Canada M2M 4H5
Fax: 416-730-5374
<PAGE>
By: /s/ Kenneth Drager
Kenneth Draeger
By: /s/ Steve Felice
Steve Felice
By: /s/ Tom Fitzpatrick
Tom Fitzpatrick
By: /s/ Steve Friedman
Steve Friedman
By: /s/ Joe Giordano
Joe Giordano
By: /s/ Jim Greenwell
Jim Greenwell
By: /s/ Tom Molchan
Tom Molchan
By: /s/ Dwight Wilson
Dwight Wilson
By: /s/ John Baldus
John Baldus
By: /s/ Bill Beaumont
Bill Beaumont
<PAGE>
By: /s/ Mark Davis
Mark Davis
By: /s/ Tom Farrell
Tom Farrell
By: /s/ Tom Fogarty
Tom Fogarty
By: /s/ Tom Fogelsong
Tom Fogelsong
By: /s/ Dan Harkins
Dan Harkins
By: /s/ Judy Johnson
Judy Johnson
By: /s/ Bill Lanam
Bill Lanam
By: /s/ Mike Rogers
Mike Rogers
By: /s/ Kirk Scott
Kirk Scott
By: /s/ Tom Walker
Tom Walker
