EXHIBIT 99.1
Agreement and Plan of Merger dated as of April 22, 1998, by and among
the Registrant, American Teleconferencing Services, Ltd., PTEK
Missouri Acquisition Corp. and the shareholders of American
Teleconferencing Services, Ltd.
EXHIBIT 99.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
PREMIERE TECHNOLOGIES, INC.,
PTEK MISSOURI ACQUISITION CORP.,
AMERICAN TELECONFERENCING SERVICES, LTD
AND
THE SHAREHOLDERS OF AMERICAN TELECONFERENCING SERVICES, LTD
DATED AS OF APRIL 22, 1998
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 TRANSACTIONS AND TERMS OF MERGER........................ 1
1.1 Merger.................................................. 1
1.2 Time and Place of Closing............................... 2
1.3 Effective Time.......................................... 2
1.4 Time and Placing of Closing............................. 2
1.5 Final Determination of Exchange Ratio................... 3
ARTICLE 2 TERMS OF MERGER......................................... 4
2.1 Charter................................................. 4
2.2 Bylaws.................................................. 4
2.3 Directors and Officers.................................. 4
ARTICLE 3 MANNER OF CONVERTING SHARES............................. 4
3.1 Conversion of Shares.................................... 4
3.2 Anti-Dilution Provisions................................ 6
3.3 Fractional Shares....................................... 6
ARTICLE 4 EXCHANGE OF SHARES...................................... 6
4.1 Exchange Procedures..................................... 6
4.2 Rights of Former ATS Shareholders....................... 7
4.3 Escrow Agreement........................................ 8
4.4 Legending of Securities................................. 8
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF ATS................... 8
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS...... 34
6.1 Ownership of Shares..................................... 34
6.2 Authority of Shareholder; No Breach By Agreement........ 35
6.3 Absence of Conflicting Agreements or Required Consents.. 35
6.4 Legal Proceedings....................................... 35
6.5 Investment Intention; Access to Information............. 35
6.6 Tax and Regulatory Matters.............................. 36
6.7 Charter Provisions...................................... 37
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF PREMIERE.............. 37
7.1 Organization, Standing, and Power....................... 37
7.2 Authority; No Breach By Agreement....................... 37
7.3 Capital Stock........................................... 38
7.4 SEC Filings; Financial Statements....................... 38
7.5 Financing............................................... 39
ARTICLE 8 CONDUCT OF BUSINESS PENDING CONSUMMATION................ 39
8.1 Affirmative Covenants of ATS............................ 39
8.2 Negative Covenants of ATS............................... 39
8.3 Covenants of Premiere................................... 41
8.4 Adverse Changes in Condition............................ 42
8.5 Reports................................................. 42
ARTICLE 9 ADDITIONAL AGREEMENTS................................... 42
-1-
9.1 Shareholder Approval................................... 42
9.2 Exchange Listing....................................... 42
9.3 Applications; Antitrust Notification................... 43
9.4 Filings with State Offices............................. 43
9.5 Agreement as to Efforts to Consummate.................. 43
9.6 Investigation and Confidentiality...................... 43
9.7 Press Releases......................................... 44
9.8 Certain Actions........................................ 44
9.9 Shareholder Releases................................... 44
9.10 Tax Treatment.......................................... 45
9.11 State Takeover :Laws................................... 45
9.12 Charter Provisions..................................... 45
9.13 Assignment of Contracts and Rights..................... 45
9.14 Tax Returns............................................ 45
9.15 Distributions.......................................... 46
ARTICLE 10 CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE...... 46
10.1 Conditions to Obligations of Each Party................ 46
10.2 Conditions to Obligations of Premiere.................. 47
10.3 Conditions to Obligations of ATS and the Shareholders.. 50
ARTICLE 11 INDEMNIFICATION........................................ 51
11.1 Agreement of Indemnitors to Indemnify.................. 51
11.2 Procedures for Indemnification......................... 51
11.3 Third Party Claims..................................... 52
11.4 Other Rights and Remedies Not Affected................. 53
11.5 Survival............................................... 53
11.6 Limitations as to Amount............................... 54
11.7 Tax Effect and Insurance............................... 54
11.8 Escrow................................................. 54
11.9 Subrogation............................................ 54
11.10 Appointment of Shareholder Representative.............. 55
11.11 Arbitration............................................ 55
ARTICLE 12 TERMINATION............................................ 56
12.1 Termination............................................ 56
12.2 Effect of Termination.................................. 56
ARTICLE 13 MISCELLANEOUS.......................................... 57
13.1 Definitions............................................ 57
13.2 Expenses............................................... 68
13.3 Brokers and Finders.................................... 68
13.4 Entire Agreement....................................... 69
13.5 Amendments............................................. 69
13.6 Waivers................................................ 69
13.7 Assignment............................................. 69
13.8 Notices................................................ 70
13.9 Governing Law.......................................... 71
13.10 Counterparts........................................... 71
-2-
13.11 Captions; Articles and Sections........................ 71
13.12 Gender and Person...................................... 71
13.13 Interpretations........................................ 71
13.14 Enforcement of Agreement............................... 71
13.15 Severability........................................... 71
13.16 Shareholder Representative............................. 72
-3-
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of April 22, 1998, by and among PREMIERE TECHNOLOGIES, INC.
("Premiere"), a Georgia corporation; PTEK MISSOURI ACQUISITION CORP. ("Sub"), a
Missouro corporation; AMERICAN TELECONFERENCING SERVICES, LTD ("ATS"), a
Missouri corporation; and the shareholders of ATS identifies in Schedule I
hereto (each a "Shareholder" and collectively the "Shareholders").
PREAMBLE
--------
The Shareholders and the respective Boards of Directors of ATS, Sub
and Premiere are of the opinion that the transactions described herein are in
the best interests of the parties to this Agreement and their respective
shareholders. This Agreement provides for the acquisition of ATS by Premiere
pursuant to the merger of ATS with and into Sub. At the effective time of such
merger, the outstanding shares of the capital stock of ATS shall be converted
into the right to receive a cash payment from Premiere and shares of Premiere
Common Stock (except as provided herein). As a result, shareholders of ATS shall
become shareholders of Premiere and Sub shall conduct the business and
operations of ATS as a wholly owned subsidiary of Premiere. The transactions
described in this Agreement are subject to the approvals of the shareholders of
ATS, the expiration of the required waiting period under the HSR Act, and the
satisfaction of certain other conditions described in this Agreement. It is the
intention of the parties to this Agreement that the Merger for federal income
tax purposes shall qualify as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code.
Certain terms used in this Agreement are defined in Section 13.1 of
this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
--------------------------------
1.1 MERGER. Subject to the terms and conditions of this Agreement,
------
at the Effective Time, ATS shall be merged with and into Sub in accordance with
the provisions of the BCA and with the effect provided in the BCA (the
"Merger"). Sub shall be the Surviving Corporation resulting from the Merger and
shall continue to be governed by the Laws of the State of Missouri. The Merger
shall be consummated pursuant to the terms of this Agreement, which has been
approved and adopted by the respective Boards of Directors of ATS, Sub and
Premiere and by Premiere, as the sole shareholder of Sub.
1.2 TIME AND PLACE OF CLOSING. The closing of the transactions
-------------------------
contemplated hereby (the "Closing") will take place at 9:00 A.M. on the date
that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the Parties,
acting through their authorized officers, may mutually agree. The Closing shall
be held at such location as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated
--------------
by this Agreement shall become effective on the date and at the time the
Articles of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Missouri (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the authorized officers of each Party, the Parties shall use their
reasonable efforts to cause the Effective Time to occur on the first business
day following the last to occur of (i) the effective date (including expiration
of any applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger, and (ii)
the date on which the shareholders of ATS approve this Agreement to the extent
such approval is required by applicable Law; or such later date within 30 days
thereof as may be specified by Premiere.
1.4 TIME AND PLACE OF CLOSING.
-------------------------
(a) At the Closing:
(i) each Shareholder shall deliver to ATS certificates
representing all the shares of ATS Common Stock, free and clear of any Liens.
Each Shareholder hereby appoints ATS as the Shareholder's agent to receive, hold
and deliver the documents in accordance with Section 4.1, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
or any successor Chief Executive Officer of ATS as the Shareholder's
attorney-in-fact to transfer the Shares on the books of ATS with full power of
substitution in the premises. These appointments are irrevocable and coupled
with an interest, and may under no circumstances be revoked.
(ii) ATS shall deliver to the Transfer Agent all share
certificates received from the Shareholders, and shall deliver to Premiere all
other documents received from the Shareholders, the resignations (or evidence of
the removal) of each director and officer of each ATS Entity and the signature
cards or other evidence reasonably requested by Premiere to ensure that only
those individuals designated by Premiere may access accounts of the ATS
Entities.
(iii) Premiere and the Shareholder Representative shall
estimate the Exchange Ratio (the "Estimated Exchange Ratio"). Premiere shall
direct the Transfer Agent to list each of the Shareholders and the Escrow Agent
as shareholders of Premiere holding the number of shares of Premiere Common
Stock that such Person would receive pursuant to Section 3.1(c) below if the
Estimated Exchange Ratio equaled the Exchange Ratio. The Shareholders, however,
shall not be deemed holders of the Premiere Common Stock for any purpose unless
and until shares of Premiere Common Stock are delivered to such Shareholder in
accordance with Section 4.1 below. Accordingly, the Shareholders shall not be
entitled to vote for the election of
-2-
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value, or change of stock to no par value, consolidation, merger, conveyance, or
otherwise) or to receive notice of meetings.
(b) As soon as practicable after the Exchange Ratio has
been Finally Determined in accordance with Section 1.5, and in any event within
three (3) business days thereafter (the "Settlement Date"), Premiere shall
instruct the Transfer Agent to deliver (A) to each Shareholder one or more
certificates for the number of shares of Premiere Common Stock determined in
accordance with Section 3.1 hereof, such certificates to be registered in the
name of such Shareholder and (B) to the Escrow Agent one or more certificates
for the number of shares of Premiere Common Stock determined in accordance with
Section 3.1(e) hereof, such certificates to be registered in the name of the
Escrow Agent. Premiere shall also cause the Transfer Agent to deliver to the
Shareholders or the Escrow Agent, as appropriate, all distributions (whether in
cash, securities of Premiere or other property) that the Shareholders or the
Escrow Agent would have received if the shares of Premiere Common Stock
delivered on the Settlement Date had been delivered on the Closing Date and
otherwise to treat the Shareholders or the Escrow Agent, as appropriate, as the
record owner of such shares for the purposes of any record date that occurs
between the Closing Date and the Settlement Date with respect to any event which
occurs after the Settlement Date.
1.5 FINAL DETERMINATION OF EXCHANGE RATIO.
-------------------------------------
(a) As soon as reasonably practical after the Closing and in any event
within thirty (30) days thereafter, Premiere shall prepare and deliver to the
Shareholder Representative a certificate (signed by an executive officer of
Premiere) that sets forth a proposed Exchange Ratio and an explanation of the
differences, if any, between the proposed Exchange Ratio and the Estimated
Exchange Ratio.
(b) If the Shareholder Representative disputes Premiere's proposed
Exchange Ratio, then the Shareholder Representative shall give Premiere written
notice within ten (10) days after the date of Premiere's certificate that sets
forth any dispute with the certificate and a description of the nature of the
dispute. If the Shareholder Representative fails to give Premiere notice of any
dispute within the prescribed 10-day period, then the Exchange Ratio proposed in
Premiere's certificate shall be deemed to be the Exchange Ratio. If Premiere
and the Shareholder Representative are unable to resolve the dispute within ten
(10) business days after the date of the Shareholder Representative's notice,
then each of Premiere and the Shareholder Representative shall submit to the
Atlanta, Georgia office of Price Waterhouse LLP (the "Accountant") a certificate
that sets forth the last Exchange Ratio proposed by such Party and an
explanation of the differences, if any, between the proposed Exchange Ratio and
the Estimated Exchange Ratio. If only one Party submits a certificate to the
Accountant within the prescribed 10-day period, then the Exchange Ratio proposed
in the
-3-
submitted certificate shall be deemed to be the Exchange Ratio. If both Parties
submit certificates to the Accountant within the prescribed 10-day period, then
the Accountant shall choose the proposed Exchange Ratio submitted by either
Premiere or the Shareholder Representative within thirty (30) days after the
date of the last certificate to be submitted. The Accountant may not make any
other determination of the Exchange Ratio. Each of the Parties shall bear all
costs and expenses incurred by it in connection with this Section 1.5, except
that the fees and expenses of the Accountant shall be borne by the Party whose
proposed Exchange Ratio was not chosen. This Section 1.5 shall be specifically
enforceable by Premiere and the Shareholder Representative and the decision of
the Accountant in accordance with the provisions hereof shall be final and
binding and there shall be no right of appeal therefrom. The final determination
of the Exchange Ratio is referred to herein as the "Final Determination," and
such Exchange Ratio is deemed to be "Finally Determined."
(c) Notwithstanding anything herein to the contrary, in the event the
Exchange Ratio does not equal the Estimated Exchange Ratio, the number of shares
of Premiere Common Stock issued in exchange for each share of ATS Common Stock
shall be adjusted such that the Cash Payment and the Exchange Ratio paid for
each share of ATS Common Stock does not exceed the Aggregate Per Share Merger
Consideration.
ARTICLE 2
TERMS OF MERGER
---------------
2.1 CHARTER. The Articles of Incorporation of Sub in effect
-------
immediately prior to the Effective Time shall be the Articles of Incorporation
of the Surviving Corporation until duly amended or repealed.
2.2 BYLAWS. The Bylaws of Sub in effect immediately prior to the
------
Effective Time shall be the Bylaws of the Surviving Corporation until duly
amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of Sub in office
----------------------
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws of
the Surviving Corporation. The officers of Sub in office immediately prior to
the Effective Time, together with such additional persons as may thereafter be
elected, shall serve as the officers of the Surviving Corporation from and after
the Effective Time in accordance with the Bylaws of the Surviving Corporation.
-4-
ARTICLE 3
MANNER OF CONVERTING SHARES
---------------------------
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article
--------------------
3, at the Effective Time, by virtue of the Merger and without any action on the
part of Premiere, ATS, Sub or the shareholders of any of the foregoing, the
shares of the constituent corporations shall be converted as follows:
(a) Each share of capital stock of Premiere issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) Each share of Sub Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding from
and after the Effective Time.
(c) Each share of ATS Common Stock issued and outstanding
immediately prior to the Effective Time shall cease to be outstanding and shall
be converted into and exchanged for the right to receive from Premiere,
(i) the Cash Payment (less any required withholding of
Taxes); and
(ii) the number of shares of Premiere Common Stock (rounded
to the nearest hundredths of a share) determined by dividing the product of .51
and the Aggregate Per Share Merger Consideration by the Average Closing Price
(the "Exchange Ratio").
(d) For purposes of the calculation under Section 3.1(c),
Cash Payment = Aggregate Merger Consideration x .49
------------------------------------
Outstanding Shares
Exchange Ratio = (Aggregate Merger Consideration x .51) / Outstanding Shares
----------------------------------------------------------
Average Closing Price
"Aggregate Merger Consideration" shall mean $58,000,000, less Indebtedness and
Transaction Costs (as those terms are defined below).
"Indebtedness" shall mean on the Closing Date all unpaid and long and short term
debt obligations of ATS including notes payable and capitalized leases
obligations.
"Transaction Costs" shall mean (whether or not accrued or paid) (A) all costs
and expenses to ATS in connection with the transaction, including fees and
expenses of investment advisors, brokers, legal counsel, consultants and
accountants, (B) all distributions payable by ATS to any employee, shareholder,
former employee or other person as set forth on Schedule 3.1(d) and
-5-
(C) the costs of any accounting audit or review conducted by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
required by the transaction (other than as may be required pursuant to Section
1.5(b)).
"Average Closing Price" shall mean $32.21.
"Outstanding Shares" shall mean all of the shares of ATS Common Stock issued and
outstanding on the Closing Date determined on a Fully-Diluted Basis.
"Aggregate Per Share Merger Consideration" shall mean the Aggregate Merger
Consideration divided by the Outstanding Shares.
(e) Each of ▇▇▇▇▇, ▇▇▇▇▇ and ▇▇▇▇▇ agrees that five percent (5%)
of Aggregate Merger Consideration which such Shareholder is entitled to receive
pursuant to Section 3.1(c) shall be placed in escrow pursuant to Section 4.3
hereof.
3.2 ANTI-DILUTION PROVISIONS. In the event Premiere changes the
------------------------
number of shares of Premiere Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date therefor (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted. In the event Premiere changes the number of shares of
Premiere Common Stock issued and outstanding prior to the Effective Time as a
result of a stock split, stock dividend, or similar recapitalization with
respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be after the
Exchange Ratio has been determined in accordance with Section 3.1(c) and prior
to the Effective Time, the Exchange Ratio shall be proportionately adjusted.
3.3 FRACTIONAL SHARES. Notwithstanding any other provision of this
-----------------
Agreement, each holder of shares of ATS Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of Premiere Common Stock (after taking into account all certificates delivered
by such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of Premiere Common Stock
multiplied by the market value of one share of Premiere Common Stock at the
Effective Time. The market value of one share of Premiere Common Stock at the
Effective Time shall be the Average Closing Price. No such holder will be
entitled to dividends, voting rights, or any other rights as a shareholder in
respect of any fractional shares.
ARTICLE 4
EXCHANGE OF SHARES
------------------
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time,
-------------------
Premiere and ATS shall cause the exchange agent selected by Premiere (the
"Exchange Agent") to mail to each holder of record of a certificate or
certificates which represented shares of ATS Common Stock immediately prior to
the Effective Time (the "Certificates") appropriate transmittal materials and
-6-
instructions (which shall specify that delivery shall be effected, and risk of
loss and title to such Certificates shall pass, only upon proper delivery of
such Certificates to the Exchange Agent). The Certificate or Certificates of ATS
Common Stock so delivered shall be duly endorsed as the Exchange Agent may
require. In the event of a transfer of ownership of shares of ATS Common Stock
represented by Certificates that are not registered in the transfer records of
ATS, the consideration provided in Section 3.1 may be issued to a transferee if
the Certificates representing such shares are delivered to the Exchange Agent,
accompanied by all documents required to evidence such transfer and by evidence
satisfactory to the Exchange Agent that any applicable stock transfer taxes have
been paid. If any Certificate shall have been lost, stolen, mislaid or
destroyed, upon receipt of (i) an affidavit of that fact from the holder
claiming such Certificate to be lost, mislaid, stolen or destroyed, (ii) such
bond, security or indemnity as Premiere and the Exchange Agent may reasonably
require and (iii) any other documents necessary to evidence and effect the bona
fide exchange thereof, the Exchange Agent shall issue to such holder the
consideration into which the shares represented by such lost, stolen, mislaid or
destroyed Certificate shall have been converted. The Exchange Agent may
establish such other reasonable and customary rules and procedures in connection
with its duties as it may deem appropriate. After the Effective Time, each
holder of shares of ATS Common Stock issued and outstanding at the Effective
Time shall surrender the Certificate or Certificates representing such shares to
the Exchange Agent and shall promptly upon surrender thereof receive in exchange
therefor the consideration provided in Section 3.1, together with all
undelivered dividends or distributions in respect of such shares (without
interest thereon) pursuant to Section 4.2. Each holder of shares of ATS Common
Stock issued and outstanding at the Effective Time also shall receive, upon
surrender of the Certificate or Certificates, cash in lieu of any fractional
share of Premiere Common Stock to which such holder may be otherwise entitled
(without interest). Premiere shall not be obligated to deliver the consideration
to which any former holder of ATS Common Stock is entitled as a result of the
Merger until such holder surrenders such holder's Certificate or Certificates
for exchange as provided in this Section 4.1. Any other provision of this
Agreement notwithstanding, neither Premiere, the Surviving Corporation nor the
Exchange Agent shall be liable to a holder of ATS Common Stock for any amounts
paid or property delivered in good faith to a public official pursuant to any
applicable abandoned property, escheat or similar Law. Adoption of this
Agreement by the shareholders of ATS shall constitute ratification of the
appointment of the Exchange Agent.
4.2 RIGHTS OF FORMER ATS SHAREHOLDERS. At the Effective Time, the
---------------------------------
stock transfer books of ATS shall be closed as to holders of ATS Common Stock
immediately prior to the effective Time and no transfer of ATS Common Stock by
any such holder shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 4.1, each Certificate
theretofore representing shares of ATS Common Stock shall from and after the
Effective Time represent for all purposes only the right to receive the
consideration provided in Sections 3.1 and 3.3 in exchange therefor, subject,
however, to the Surviving Corporation's obligation to pay any dividends or make
any other distributions with a record date prior to the Effective Time which
have been declared or made by ATS in respect of such shares of ATS Common Stock
in accordance with the terms of this Agreement and which remain unpaid at the
Effective Time. To the extent permitted by Law, former shareholders of record of
ATS shall be entitled to vote after the Effective Time at any meeting of
Premiere shareholders the number of
-7-
whole shares of Premiere Common Stock into which their respective shares of ATS
Common Stock are converted, regardless of whether such holders have exchanged
their Certificates for certificates representing Premiere Common Stock in
accordance with the provisions of this Agreement. Whenever a dividend or other
distribution is declared by Premiere on the Premiere Common Stock, the record
date for which is at or after the Effective Time, the declaration shall include
dividends or other distributions on all shares of Premiere Common Stock issuable
pursuant to this Agreement, but no dividend or other distribution payable to the
holders of record of Premiere Common Stock as of any time subsequent to the
Effective Time shall be delivered to the holder of any Certificate until such
holder surrenders such Certificate for exchange as provided in Section 4.1.
However, upon surrender of such Certificate, both the Premiere Common Stock
certificate (together with all such undelivered dividends or other distributions
without interest) and any undelivered dividends and cash payments payable
hereunder (without interest) shall be delivered and paid with respect to each
share represented by such Certificate.
4.3 ESCROW AGREEMENT. In connection with the Closing, Premiere,
----------------
Cowan, Jaffe, ▇▇▇▇▇ and the Escrow Agent shall have executed and delivered to
the others an escrow agreement (the "Escrow Agreement"), which shall be in the
form of Exhibit 1. The shares of Premiere Common Stock to be issued pursuant to
Section 3.1(e) shall be issued and held by Escrow Agent pursuant to the terms of
the Escrow Agreement.
4.4 LEGENDING OF SECURITIES. Each certificate for Premiere Common
-----------------------
Stock to be issued to the Shareholders as part of the purchase price shall bear
the following legend:
"The securities represented hereby have not been registered
under the Securities Act of 1933, as amended, and may not be offered,
sold, transferred or otherwise disposed of unless registered with the
Securities and Exchange Commission of the United States and the
securities regulatory authorities of applicable states or unless an
exemption from such registration is available."
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ATS
-------------------------------------
ATS hereby represents and warrants to Premiere as follows:
5.1 ORGANIZATION, STANDING, AND POWER. ATS is a corporation duly
---------------------------------
organized, validly existing, and in good standing under the Laws of the State of
Missouri, and has the corporate power and authority to carry on its business as
now conducted and to own, lease and operate its Assets. ATS is duly qualified or
licensed to transact business as a foreign corporation in good standing in the
States of the United States and foreign jurisdictions where the character of its
Assets or the nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have, individually or in the
aggregate, an ATS Material Adverse Effect, all of which jurisdictions are listed
in Section 5.1 of the ATS Disclosure Memorandum. The minute book and other
organizational documents for ATS have been made available to Premiere for its
review and, except as disclosed in Section 5.1 of the ATS Disclosure Memorandum,
are true and
-8-
complete in all material respects as in effect as of the date of this Agreement
and accurately reflect in all material respects all amendments thereto and all
proceedings of the Board of Directors and shareholders thereof.
5.2 AUTHORITY OF ATS; NO BREACH BY AGREEMENT.
----------------------------------------
(a) ATS has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly authorized
by all necessary corporate and shareholder action. This Agreement represents a
legal, valid, and binding obligation of ATS, enforceable against ATS in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Except as set forth in Section 5.2(b) of the ATS Disclosure
Memorandum, neither the execution and delivery of this Agreement by ATS, nor the
consummation by ATS of the transactions contemplated hereby, nor compliance by
ATS with any of the provisions hereof, will (i) conflict with or result in a
breach of any provision of ATS's Articles of Incorporation or Bylaws or the
certificate or articles of incorporation or bylaws of any ATS Subsidiary or any
resolution adopted by the board of directors or the shareholders of any ATS
Entity, or (ii) except as disclosed in Section 5.2(b) of the ATS Disclosure
Memorandum, constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any Asset of any ATS
Entity under, any Contract or Permit of any ATS Entity, or (iii) subject to
receipt of the requisite Consents referred to in Section 10.1(b), constitute or
result in a Default under, or require any Consent pursuant to, any Law or Order
applicable to any ATS Entity or any of their respective material Assets
(including any Premiere Entity or any ATS Entity becoming subject to or liable
for the payment of any Tax or any of the Assets owned by any Premiere Entity or
any ATS Entity being reassessed or revalued by any Taxing authority).
(c) Other than as required under the HSR Act or as disclosed in
Section 5.2(c) of the ATS Disclosure Memorandum, no notice to, filing with, or
Consent of, any public body or authority is necessary for the consummation by
ATS of the Merger and the other transactions contemplated in this Agreement.
5.3 AUTHORITY OF SHAREHOLDERS; NO BREACH BY AGREEMENT.
-------------------------------------------------
To ATS's Knowledge:
(a) Each of the Shareholders has the absolute and unrestricted
right, power, authority, and capacity to execute and deliver this Agreement and
the Shareholders' Closing Documents and to perform its obligations under this
Agreement and the Shareholders'
-9-
Closing Documents. This Agreement represents a legal, valid, and binding
obligation of each Shareholder, enforceable against each Shareholder in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought). Upon the execution and
delivery by the Shareholders party to each of the Shareholders' Closing
Documents, each such Shareholders' Closing Document will constitute the legal,
valid, and binding obligations of each such Shareholder, enforceable against
such Shareholder in accordance with its respective terms.
(b) Neither the execution and delivery of this Agreement by any
Shareholder, nor the consummation by any Shareholder of the transactions
contemplated hereby, nor compliance by any Shareholder with any of the
provisions hereof, will (i) conflict with or result in a breach of any provision
of ATS's Articles of Incorporation or Bylaws or the certificate or articles of
incorporation or bylaws of any ATS Subsidiary or the governing instruments of
any Shareholder that is not a natural person, or (ii) except as disclosed in
Section 5.3(b) of the ATS Disclosure Memorandum, constitute or result in a
Default under, or require any Consent pursuant to, or result in the creation of
any Lien on any Asset of any ATS Entity under, or permit any acceleration or
modification under, any Contract or Permit of any ATS Entity, or (iii) subject
to receipt of the requisite Consents referred to in Section 10.1(b), violate any
Law or Order applicable to any Shareholder or to any ATS Entity or any of their
respective material Assets.
(c) Other than as required under the HSR Act or as disclosed in
Section 5.3(c) of the ATS Disclosure Memorandum, no notice to, filing with, or
Consent of, any public body or authority is necessary for the consummation by
the Shareholders of the transactions contemplated in this Agreement.
5.4 CAPITAL STOCK.
-------------
(a) The authorized capital stock of ATS consists of 100,000
shares of ATS Common Stock, of which 76,308 shares are issued and outstanding as
of the date of this Agreement and not more than 76,308 shares will be issued and
outstanding at the Effective Time. All of the issued and outstanding shares of
capital stock are duly and validly issued and outstanding and are fully paid and
nonassessable under the BCA. None of the outstanding shares of capital stock of
ATS has been issued in violation of any preemptive rights of the current or past
shareholders of ATS.
(b) Except as set forth in Section 5.4(a) or as disclosed in
Section 5.4(b) of the ATS Disclosure Memorandum, there are no shares of capital
stock or other equity securities of ATS outstanding and no outstanding Equity
Rights relating to the capital stock of ATS. To ATS's Knowledge, each of the
Shareholders is the owner of all right, title and interest (legal and
beneficial) in and to that number or amount of Shares set forth next to his or
her name in Section 5.4(b) of the ATS Disclosure Memorandum, free and clear of
all Liens. To ATS's Knowledge, the Shareholders own all right, title and
interest (legal and beneficial) in and to all of
-10-
the issued and outstanding shares of ATS's capital stock. Except as specifically
disclosed in Section 5.4(b) of the ATS Disclosure Memorandum, no Person has any
Contract or any right or privilege (whether pre-emptive or contractual) capable
of becoming a Contract for the purchase from the Shareholders of any of the
shares of ATS Common Stock, or any Contract or Equity Right for the purchase,
subscription or issuance of any securities of ATS.
5.5 ATS SUBSIDIARIES. ATS has disclosed in Section 5.5 of the ATS
----------------
Disclosure Memorandum all of the ATS Subsidiaries that are corporations
(identifying its jurisdiction of incorporation, each jurisdiction in which it is
qualified and/or licensed to transact business, and the number of shares owned
and percentage ownership interest represented by such share ownership) and all
of the ATS Subsidiaries that are general or limited partnerships, limited
liability companies, or other non-corporate entities (identifying the Law under
which such entity is organized, each jurisdiction in which it is qualified
and/or licensed to transact business, and the amount and nature of the ownership
interest therein). Except as disclosed in Section 5.5 of the ATS Disclosure
Memorandum, ATS or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock (or other equity interests) of each ATS
Subsidiary. No capital stock (or other equity interest) of any ATS Subsidiary is
or may become required to be issued (other than to another ATS Entity) by reason
of any Equity Rights, and there are no Contracts by which any ATS Subsidiary is
bound to issue (other than to another ATS Entity) additional shares of its
capital stock (or other equity interests) or Equity Rights or by which any ATS
Entity is or may be bound to transfer any shares of the capital stock (or other
equity interests) of any ATS Subsidiary (other than to another ATS Entity).
There are no Contracts relating to the rights of any ATS Entity to vote or to
dispose of any shares of the capital stock (or other equity interests) of any
ATS Subsidiary. All of the shares of capital stock (or other equity interests)
of each ATS Subsidiary held by a ATS Entity are fully paid and nonassessable
under the applicable corporation Law of the jurisdiction in which such
Subsidiary is incorporated or organized and are owned by the ATS Entity free and
clear of any Lien (except to the extent set forth in Section 5.5 of the ATS
Disclosure Memorandum). Except as disclosed in Section 5.5 of the ATS Disclosure
Memorandum, each ATS Subsidiary is a corporation, and each such Subsidiary is
duly organized, validly existing, and (as to corporations) in good standing
under the Laws of the jurisdiction in which it is incorporated or organized, and
has the corporate power and authority necessary for it to own, lease, and
operate its Assets and to carry on its business as now conducted. Each ATS
Subsidiary is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, an ATS Material
Adverse Effect. The minute book and other organizational documents for each ATS
Subsidiary have been made available to Premiere for its review, and, except as
disclosed in Section 5.5 of the ATS Disclosure Memorandum, are true and complete
in all material respects as in effect as of the date of this Agreement and
accurately reflect in all material respects all amendments thereto and all
proceedings of the Board of Directors and shareholders thereof.
-11-
5.6 FINANCIAL STATEMENTS.
--------------------
(a) The ATS Financial Statements are attached as Section 5.6(a)
of the ATS Disclosure Memorandum and have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby, except as
otherwise noted therein, are true, correct and complete, do not contain any
untrue statement of a material fact or omit to state a material fact required by
GAAP to be stated therein or necessary in order to make any statements contained
therein not misleading, and fairly present the financial condition and results
of operations of ATS and its Subsidiaries, on the bases therefor stated, as of
the respective dates thereof, and for the respective periods covered thereby
subject, in the case of unaudited financial statements to normal nonmaterial
year-end audit adjustments and accruals.
(b) Neither the ATS Disclosure Memorandum, the ATS Financial
Statements, this Agreement nor any document or certificate furnished or to be
furnished by or on behalf of ATS or any of the Shareholders pursuant to this
Agreement or any document executed or required to be executed by or on behalf of
ATS or the Shareholders pursuant thereto or thereto or to consummate the Merger
and the transactions contemplated by this Agreement (collectively, the
"Transaction Documents"), contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact required to be
stated in such document by its terms or necessary in order to make the
statements contained herein or therein not misleading and all such Transaction
Documents are and will be true, correct and complete in all respects; provided
that:
(i) with respect to projections contained or referred to in
the ATS Disclosure Memorandum, ATS represents and warrants only that such
projections were prepared in good faith on the basis of the past business of ATS
and other information and assumptions which ATS and the Shareholders believe to
be reasonable,
(ii) each such Transaction Document will not be deemed
misleading by virtue of the absence of factual recitations or references not
germane thereto and necessary to the purpose thereof, and
(iii) responses to due diligence requests will not be subject to
this Section 5.6(b) except to the extent that, to ATS's Knowledge, such response
is materially misleading.
5.7 ABSENCE OF UNDISCLOSED LIABILITIES. No ATS Entity has any
----------------------------------
Liabilities except (a) Liabilities which are accrued or reserved against in the
consolidated balance sheets of ATS as of March 31, 1998, included in the ATS
Financial Statements delivered prior to the date of this Agreement or reflected
in the notes thereto, and (b) such Liabilities incurred or paid since March 31,
1998 (i) in the ordinary course of business consistent with past business
practice or (ii) in connection with the transactions contemplated by this
Agreement and included in Transaction Expenses. Except as disclosed in Section
5.7 of the ATS Disclosure Memorandum or as disclosed in the ATS Financial
Statements, no ATS Entity is directly or indirectly liable, by guarantee,
indemnity, or otherwise, upon or with respect to, or obligated, by discount or
-12-
repurchase agreement or in any other way, to provide funds in respect to, or
obligated to guarantee or assume any Liability of any Person for any amount in
excess of $10,000.
5.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the
------------------------------------
most recent ATS Financial Statements, except as disclosed in the ATS Financial
Statements delivered prior to the date of this Agreement or as disclosed in
Section 5.8 of the ATS Disclosure Memorandum, (i) there have been no events,
changes, or occurrences which have had, or are reasonably likely to have,
individually or in the aggregate, an ATS Material Adverse Effect, and (ii) the
ATS Entities have not taken any action, or failed to take any action, prior to
the date of this Agreement, which action or failure, if taken after the date of
this Agreement (so far as ATS can now reasonably foresee), would represent or
result in a material breach or violation of any of the covenants and agreements
of ATS provided in Article 8 (except for changes in general economic
conditions).
5.9 TAX MATTERS.
-----------
(a) All Tax Returns required to be filed by or on behalf of any
of the ATS Entities have been timely filed or requests for extensions have been
timely filed, granted, and have not expired for periods ended on or before
December 31, 1997, or for periods on or before the date of the most recent
fiscal year end immediately preceding the Effective Time. All filed Tax Returns
are complete and accurate (true, correct and complete copies of which have been
furnished by ATS to Premiere). All Taxes shown on filed Tax Returns have been
fully paid. There is no audit examination, deficiency, or refund Litigation with
respect to any Taxes, except as reserved against in the ATS Financial Statements
delivered prior to the date of this Agreement or as disclosed in Section 5.9 of
the ATS Disclosure Memorandum. ATS's federal income Tax Returns have been filed
with the Internal Revenue Service ("IRS") through June 30, 1997 and there are no
current audits. All Taxes and other Liabilities due, including interest and
penalties, with respect to completed and settled examinations or concluded
Litigation have been fully paid. There are no Liens with respect to Taxes upon
any of the Assets of the ATS Entities, except for any such Liens which are not
reasonably likely to have an ATS Material Adverse Effect.
(b) None of the ATS Entities has executed an extension or waiver
of any statute of limitations, which currently is in effect, on the assessment
or collection of any Tax for any taxable years ended on or before the Effective
Time.
(c) The provision for any Taxes due or to become due for any of
the ATS Entities for the period or periods through and including the date of the
respective ATS Financial Statements that has been made and is reflected on such
ATS Financial Statements is sufficient to cover all such Taxes.
(d) Deferred Taxes of the ATS Entities have been provided for in
accordance with GAAP.
(e) Except as set forth in Section 5.9(e) of the ATS Disclosure
Memorandum, none of the ATS Entities is a party to any Tax allocation or sharing
agreement and
-13-
none of the ATS Entities has been a member of an affiliated group filing a
consolidated federal income Tax Return (other than a group the common parent of
which was ATS) or has any Liability for Taxes of any Person (other than ATS and
its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign Law) as a transferee or successor or by
Contract or otherwise.
(f) Each of the ATS Entities is in compliance with, and its
records contain all information and documents (including properly completed IRS
Forms W-9) necessary to comply with, all applicable information reporting and
Tax withholding requirements under federal, state, and local Tax Laws, and such
records identify with specificity all accounts subject to backup withholding
under Section 3406 of the Internal Revenue Code.
(g) Except as disclosed in Section 5.9(g) of the ATS Disclosure
Memorandum, none of the ATS Entities has made any payments, is obligated to make
any payments, or is a party to any Contract that could obligate it to make any
payments that would be disallowed as a deduction under Section 280G or 162(m) of
the Internal Revenue Code.
(h) Except as set forth in Section 5.9(h) of the ATS Disclosure
Memorandum, there has not been an ownership change, as defined in Section 382(g)
of the Internal Revenue Code, of the ATS Entities that occurred during or after
any Taxable period in which the ATS Entities incurred a net operating loss that
carries over to any Taxable period ending after December 31, 1997.
(i) No ATS Entity has or has had in any foreign country a
permanent establishment, as defined in any applicable tax treaty or convention
between the United States and such foreign country.
5.10 ASSETS.
------
(a) Except as disclosed in Section 5.10(a) of the ATS Disclosure
Memorandum or as disclosed or reserved against in the ATS Financial Statements
delivered prior to the date of this Agreement, the ATS Entities have good and
marketable title, free and clear of all Liens, to all of their respective
Assets, except for any such Liens or other defects of title which are not
reasonably likely to have an ATS Material Adverse Effect. All tangible
properties used in the businesses of the ATS Entities are in good condition,
reasonable wear and tear excepted, and are usable in the ordinary course of
business consistent with ATS's past practices.
(b) Except as disclosed in Section 5.10(b) of the ATS Disclosure
Memorandum, or as reflected on the most recent balance sheet included in the ATS
Financial Statements delivered prior to the date of this Agreement and prior to
the Effective Time all items of inventory of the ATS Entities consisted and will
consist, as applicable, of items of a quality and quantity usable and salable in
the ordinary course of business and conform to generally accepted standards in
the industry in which the ATS Entities are a part.
-14-
(c) Except as disclosed in Section 5.10(c) of the ATS Disclosure
Memorandum, the notes and accounts receivable of the ATS Entities as set forth
on the most recent balance sheet included in the ATS Financial Statements
delivered prior to the date of this Agreement or arising since the date thereof
are valid and genuine; have arisen solely out of bona fide sales and deliveries
of goods, performance of services or other business transactions in the ordinary
course of business consistent with past practice; are not subject to valid
defenses, set-offs or counterclaims; with respect to such accounts receivable,
are collectible within 90 days after billing at the full recorded amount thereof
less, in the case of accounts receivable appearing on the most recent balance
sheet included in the ATS Financial Statements delivered prior to the date of
this Agreement, the recorded allowance for collection losses on such balance
sheet; and, with respect to such notes receivable, are collectible in accordance
with the terms thereof. The allowance for collection losses on such balance
sheet has been determined in accordance with GAAP.
(d) All Assets which are material to ATS's business on a
consolidated basis, including those held under leases or subleases by any of the
ATS Entities, are held under valid Contracts enforceable in accordance with
their respective terms.
(e) The ATS Entities currently maintain insurance similar in
amounts, scope, and coverage to that maintained by other peer organizations.
Except as disclosed in Section 5.10(e) of the ATS Disclosure Memorandum, none of
the ATS Entities has received notice from any insurance carrier that (i) any
policy of insurance will be canceled or that coverage thereunder will be reduced
or eliminated, or (ii) premium costs with respect to such policies of insurance
will be substantially increased. Except as disclosed in Section 5.10(e) of the
ATS Disclosure Memorandum, there are presently no claims for amounts exceeding
in any individual case $10,000 pending under such policies of insurance and no
notices of claims in excess of such amounts have been given by any ATS Entity
under such policies.
(f) The Assets of the ATS Entities include all Assets required to
operate the business of the ATS Entities as presently conducted.
5.11 INTELLECTUAL PROPERTY.
---------------------
(a) Except as disclosed in Section 5.11(a) of the ATS Disclosure
Memorandum, each ATS Entity owns or has a license to use all of the Intellectual
Property used by such ATS Entity in the course of its business. No ATS Entity
uses any Intellectual Property except such property described in Section 5.11(a)
of the ATS Disclosure Memorandum. Each ATS Entity is the owner of or has a
license to any Intellectual Property sold or licensed to a third party by such
ATS Entity in connection with such ATS Entity's business operations, and such
ATS Entity has the right to convey by sale or license any Intellectual Property
so conveyed. No ATS Entity is in Default under any of its Intellectual Property
licenses.
(b) Except as disclosed in Section 5.11(b) of the ATS Disclosure
Memorandum, no proceedings have been instituted, or are pending or to the
Knowledge of ATS threatened, which challenge the rights of any ATS Entity with
respect to Intellectual Property
-15-
used, sold or licensed by such ATS Entity in the course of its business, nor has
any person claimed or alleged any rights to such Intellectual Property. The
conduct of the business of the ATS Entities does not infringe any Intellectual
Property of any other person. Except as disclosed in Section 5.11(b) of the ATS
Disclosure Memorandum, no ATS Entity is obligated to pay any recurring royalties
to any Person with respect to any such Intellectual Property.
(c) Except as disclosed in Section 5.11(c) of the ATS Disclosure
Memorandum, every officer, director, consultant or employee of any ATS Entity is
a party to a Contract which requires such officer, director, consultant or
employee to assign any interest in any Intellectual Property to a ATS Entity and
to keep confidential any trade secrets, proprietary data, customer information,
or other business information of a ATS Entity, and no such officer, director,
consultant or employee is party to any Contract with any Person other than a ATS
Entity which requires such officer, director, consultant or employee to assign
any interest in any Intellectual Property to any Person other than a ATS Entity
or to keep confidential any trade secrets, proprietary data, customer
information, or other business information of any Person other than an ATS
Entity. No consultant or contractor has any rights to any Intellectual Property
of any ATS Entity.
(d) Except as disclosed in Section 5.11(d) of the ATS Disclosure
Memorandum, no officer, director or employee of any ATS Entity is party to any
Contract which restricts or prohibits such officer, director or employee from
engaging in activities competitive with any Person, including any ATS Entity.
(e) The computer software of ATS included in the Intellectual
Property (the "Software") performs in accordance with the documentation and
other written material used in connection with the Software and is in machine-
readable form, contains all current revisions of such software, includes all
computer programs, materials, tapes, know-how, object and source codes, other
written materials, know-how and processes related to the Software and to ATS's
Knowledge is free of defects in programming and operation. ATS has delivered to
Premiere complete and correct copies of all user and technical documentation
related to the Software.
(f) Neither ATS nor to the best Knowledge of ATS, any employee or
agent thereof has developed or assisted in the enhancement of the Software
except for enhancements included in the Software as delivered to Premiere
pursuant hereto or the development of any program or product based on the
Software or any part thereof.
(g) To ATS's Knowledge, no employee or contractor of ATS is, or
is now expected to be, in default under any term of any employment contract,
agreement or arrangement relating to the Software or noncompetition arrangement,
or any other Contract or any restrictive covenant relating to the Software or
its development or exploitation. Except as disclosed in Section 5.11(g) of the
ATS Disclosure Memorandum, the Software was developed entirely by the employees
of ATS during the time they were employees only of ATS or by contractors of ATS
while retained pursuant to Contracts containing enforceable invention assignment
agreements and such Software does not include any inventions of the employees
made
-16-
prior to the time such employees became employees of ATS nor any intellectual
property of any previous employer of such employee.
(h) All right, title and interest in and to the Software is owned
by ATS, free and clear of all liens, claims, charges or encumbrances, are fully
transferable to Premiere, and no party other than ATS has any interest in the
Software, including without limitation, any security interest, license,
contingent interest or otherwise. ATS's development, use, sale or exploitation
of the Software does not violate any rights of any other person or entity and
Seller has not received any communication alleging such a violation. ATS does
not have any obligation to compensate any Person for the development, use, sale
or exploitation of the Software nor has ATS granted to any other person or
entity any license, option or other rights to develop, use, sell or exploit in
any manner the Software, whether requiring the payment of royalties or not.
(i) ATS has kept secret and has not disclosed the source code for
the Software to any person or entity other than certain employees of ATS who are
subject to the terms of a binding confidentiality agreement with respect
thereto. ATS has taken all appropriate measures to protect the confidential and
proprietary nature of the Software, including without limitation the use of
confidentiality agreements with all of its employees having access to the
Software source and object code. There have been no patents applied for and no
copyrights registered for any part of the Software. There are no trademark
rights of any person or entity in the name "Customer Care".
5.12 ENVIRONMENTAL MATTERS.
---------------------
(a) Except as set forth in Section 5.12(a) of the ATS Disclosure
Memorandum, ATS and each Subsidiary:
(i) is in compliance in all material respects with all
Environmental Laws and has not been notified that it is liable or potentially
liable, has not received any request for information or other correspondence
concerning any site or facility, and is not a "responsible party" or
"potentially responsible party" under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, the Resource Conservation
Recovery Act of 1976, as amended, or any similar state law;
(ii) has not entered into or received any consent decree,
compliance order, or administrative order relating to Environmental
Requirements;
(iii) is not a party in interest or in default under any
judgment, order, writ, injunction or decree or any final order relating to
Environmental Requirements; and
(iv) has obtained all material Governmental Authorizations
and Private Authorizations (including without limitation all Environmental
Permits) and made all Governmental Filings which are required to be filed by ATS
and each Subsidiary for the ownership of its property, facilities and assets and
the operation of its businesses under all Environmental Laws, is and at all
times since its organization has been in material compliance with
-17-
the terms and conditions of all such required Governmental and Private
Authorizations and all Environmental Requirements, and is not the subject of or,
to ATS's Knowledge, threatened with any litigation involving a demand for
damages or any other potential liability with respect to violations or breaches
of any Environmental Requirement.
(b) Except as set forth in Section 5.12(b) of the ATS Disclosure
Memorandum:
(i) no spill, disposal, release, burial or placement of
Hazardous Materials in the soil, air or water has occurred on any property or
facility owned, leased, operated or occupied by ATS or any Subsidiary during the
period that such facilities and properties were owned, leased, operated or
occupied by it or, to the Knowledge of ATS, at any other time or at any other
facility or site to which Hazardous Materials from or generated by ATS or any
Subsidiary may have been taken at any time in the past,
(ii) there has been no spill, disposal, release, burial or
placement of Hazardous Materials, in the soil, air or water on any property
which could reasonably be expected to result or has resulted in contamination of
or beneath any properties or facilities owned, leased, operated or occupied by
ATS or any Subsidiary during the period that such facilities and properties were
owned, leased, operated or occupied by it (or, to the Knowledge of ATS, at any
other time), and
(iii) no notice has been received by ATS or any Subsidiary
and no Lien has arisen on its or any Subsidiary's properties or facilities under
Environmental Law.
(c) Except as set forth in Section 5.12(c) of the ATS Disclosure
Memorandum, neither ATS nor any Subsidiary has any above-ground or underground
tanks on property owned, leased, operated or occupied by it for the storage of
Hazardous Materials.
(d) There has not been, and on or prior to the Closing Date,
there will not be, any past or present Events or plans of ATS or any Subsidiary
or any of its predecessors, which, individually or in the aggregate, constitute
a breach of any Environmental Requirements or which, individually or in the
aggregate, may interfere with or prevent continued compliance with all
Environmental Requirements, or which, individually or in the aggregate, may give
rise to any common law, statutory or other legal liability, or otherwise form
the basis of any Claim, assessment or remediation cost, fine, penalty or
assessment based on or related to the transportation, transmission, gathering,
processing, distribution, use, treatment, storage, disposal or handling, or the
emission, discharge, release or threatened release into the environment, of any
Hazardous Material with respect to ATS or any Subsidiary or any of its
predecessors or its or any of their business, operations or property which could
have any ATS Material Adverse Effect.
(e) Except as set forth in Section 5.12(e) of the ATS Disclosure
Memorandum, neither ATS nor any Subsidiary has used any Hazardous Materials in
the conduct of its business. To the extent that any Hazardous Materials are so
set forth, Section 5.12(e) of the ATS Disclosure Memorandum also sets forth (i)
a description of Hazardous Materials used, (ii)
-18-
the annual volume of each of the Hazardous Materials used, (iii) the years
during which each of the Hazardous Materials used occurred, and (iv) the Persons
to whom such Hazardous Materials were transferred and/or transported after such
use.
(f) Section 5.12(f) of the ATS Disclosure Memorandum contains a
complete and correct description of all Hazardous Materials generated by ATS or
any Subsidiary which are not set forth in Section 5.12(e), the approximate
annual volumes of each of the Hazardous Materials, and all Persons to whom such
Hazardous Materials have been transferred and/or transported.
(g) No site assessment, audit, study, test or other investigation
has been conducted by or on behalf of ATS or any Subsidiary, nor has ATS
received any notice from any governmental agency, or financial institution as to
environmental matters at any property owned, leased, operated or occupied by ATS
or any Subsidiary, except as set forth in Section 5.12(g) of the ATS Disclosure
Memorandum.
(h) ATS agrees to cooperate with Premiere in connection with
Premiere's application for the transfer, renewal or issuance of any permits,
licenses, approvals, or other authorizations or to satisfy any environmental
requirements or regulations involving ATS's business.
5.13 AUTHORIZATIONS AND COMPLIANCE WITH LAWS.
---------------------------------------
(a) Section 5.13(a) of the ATS Disclosure Memorandum sets forth a
true, correct and complete list and description of each Private Authorization
which individually is material to ATS or ATS and its Subsidiaries taken as a
whole, all of which are in full force and effect. Each of ATS and each
Subsidiary has obtained all Private Authorizations which are necessary for the
ownership by ATS or each Subsidiary of its properties and the conduct of its
business as now conducted or as presently proposed to be conducted or which, if
not obtained and maintained, could, singly or in the aggregate, result in an ATS
Material Adverse Effect. Neither ATS nor any Subsidiary is in breach or
violation of, or is in default in the performance, observance or fulfillment of,
any Private Authorization, and no Event exists or has occurred, which
constitutes, or but for any requirement of giving of notice or passage of time
or both would constitute, such a breach, violation default, under any Contract
or Private Authorization, except for such defaults, breaches or violations, as
do not and, to ATS's Knowledge, will not have in the aggregate any ATS Material
Adverse Effect, or the ability of ATS to perform any of the obligations set
forth in this Agreement or any Transaction Document executed or required to be
executed pursuant hereto or thereto or to consummate the Merger and the
Transactions. No Private Authorization is the subject of any pending or, to
ATS's Knowledge, threatened attack, revocation or termination.
(b) Section 5.13(b) of the Disclosure Memorandum contains a
description of:
-19-
(i) all Legal Actions which are pending or, other than
those finally adjudicated or settled on or before December 31, 1995, in which
ATS or any of its Subsidiaries, or any of its officers or directors, is, or at
any time since its organization has been, engaged, or which involves, or at any
time during such period involved, the business, operations or properties of ATS
or any of its Subsidiaries or, to ATS's Knowledge, which is threatened or
contemplated against, or in any other manner relating Adversely to, ATS or any
of its Subsidiaries or the business, operations or properties, or the officers
or directors, or any of them in connection therewith; and
(ii) each Governmental Authorization to which ATS or any
Subsidiary is subject and which relates to the business, operations, properties,
prospects, condition (financial or other), or results of operations of ATS or
ATS and its Subsidiaries taken as a whole, all of which are in full force and
effect.
(c) Each of ATS and each of its Subsidiaries has obtained all
Governmental Authorizations which are necessary for the ownership or uses of its
properties and the conduct of its business as now conducted or as presently
proposed to be conducted by ATS or which, if not obtained and maintained, could
singly or in the aggregate, have any ATS Material Adverse Effect. No
Governmental Authorization is the subject of any pending or, to ATS's Knowledge,
threatened attack, revocation or termination. Neither ATS nor any Subsidiary nor
any officer or director (in connection with the business, operations and
properties of ATS or any Subsidiary) is or at any time since January 1, 1991 has
been, or is or has during such time been charged with, or to the Knowledge of
ATS, is threatened or under investigation with respect to any material breach or
violation of, or in default in the performance, observance or fulfillment of,
any Governmental Authorization or any Law, and no Event exists or has occurred,
which constitutes, or but for any requirement of giving of notice or passage of
time or both would constitute, such a breach, violation or default, under
(i) any Governmental Authorization or any Law, except for
such breaches, violations or defaults as do not and, to ATS's Knowledge, will
not have in the aggregate any ATS Material Adverse Effect or the ability of ATS
to perform any of the obligations set forth in this Agreement or any collateral
document executed or required to be executed pursuant hereto or thereto, or to
consummate the Merger and the transactions, or
(ii) any requirement of any insurance carrier, applicable
to its business, operations or properties, except as otherwise specifically
described in Section 5.13(c) of the ATS Disclosure Memorandum.
(d) With respect to matters, if any, of a nature referred to in
Sections 5.13(b) or 5.13(c) of the ATS Disclosure Memorandum, all such
information and matters set forth in the Disclosure Memorandum, individually and
in the aggregate, if adversely determined against ATS or any Subsidiary, will
not result in an ATS Material Adverse Effect, or the ability of ATS to perform
its obligations under this Agreement or required to be executed pursuant hereto
or thereto or to consummate the Merger and the transactions contemplated hereby.
-20-
5.14 EMPLOYMENT ARRANGEMENTS AND LABOR RELATIONS.
-------------------------------------------
(a) Neither ATS nor any Subsidiary has any obligation or
liability, contingent or other, under any Employment Arrangement (whether or not
listed in Section 5.15(a) of the ATS Disclosure Memorandum), other than those
listed or described in Section 5.14(a) of the ATS Disclosure Memorandum. Neither
ATS nor any Subsidiary is now or during the past five (5) years has been subject
to or involved in or, to ATS's Knowledge, threatened with any election for the
certification of a bargaining representative for any employees, petitions
therefor or other organizational activities, including but not limited to
voluntary requests for recognition as a bargaining representative, or
organizational campaigns of any nature, except as described in Section 5.14(a)
of the ATS Disclosure Memorandum. None of the employees of ATS or any Subsidiary
are now, or during the past five (5) years have been, represented by any labor
union or other employee collective bargaining organization. Neither ATS nor any
Subsidiary are parties to any labor or other collective bargaining agreement,
and there are no pending grievances, disputes or controversies with any union or
any other employee collective bargaining organization of such employees, or, to
ATS's Knowledge, threats of strikes, work stoppages or slowdowns or any pending
demands for collective bargaining by any union or other such organization. ATS
and each Subsidiary have performed all material obligations required to be
performed under all Employment Arrangements and are not in breach or violation
of or in default or arrears under any of the terms, provisions or conditions
thereof.
(b) Except as set forth in Section 5.14(b) of the ATS Disclosure
Memorandum, no employee will accrue or receive additional benefits, service or
accelerated rights to payments of benefits under any Employment Arrangement,
including the right to receive any parachute payment, as defined in Section 280G
of the Code, or become entitled to severance, termination allowance or similar
payments as a direct result of the transactions contemplated by this Agreement.
(c) ATS considers its and each Subsidiary's relationships with
employees to be good, and except as set forth in Section 5.14(c) of the ATS
Disclosure Memorandum, neither ATS nor any Subsidiary has experienced a work
slowdown or stoppage due to labor problems. Neither ATS nor any Subsidiary has
received notice of any claim that it has failed to comply with any federal or
state law, or is the subject of any investigation by any federal or state agency
to determine compliance with any federal or state law, relating to the
employment of labor, including any provisions relating to wages, hours,
collective bargaining, the payment of taxes, discrimination, equal employment
opportunity, employment discrimination, worker injury and/or occupational
safety, nor to the Knowledge of ATS is there any reasonable basis for such a
claim.
(d) Neither ATS nor any Subsidiary has conducted, and will not
conduct, a "plant closing" or "mass layoff" of employees of ATS or any
Subsidiary as defined by the Worker Adjustment and Retraining Notification Act
of 1988 ("the WARN Act"), 29 U.S.C. 2101-2109 as amended, or discharge, layoff,
or reduce the hours of work, of employees in a sufficient number or manner to
trigger any state or local law or regulation conditioning or
-21-
regulating in any manner the discharge, layoff, or reduction in hours of
employees or the closing of a facility, plant, workplace, division or
department, on the Closing Date or during the twelve-month period immediately
prior thereto.
5.15 EMPLOYEE BENEFIT PLANS.
----------------------
(a) ATS has disclosed in Section 5.15(a) of the ATS Disclosure
Memorandum, and has delivered or made available to Premiere prior to the
execution of this Agreement copies in each case of, all pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, or other incentive plan, all other written
employee programs, arrangements, or agreements, all medical, vision, dental, or
other health plans, all life insurance plans, and all other employee benefit
plans or fringe benefit plans, including "employee benefit plans" as that term
is defined in Section 3(3) of ERISA, currently adopted, maintained by, sponsored
in whole or in part by, or contributed to by any ATS Entity or ERISA Affiliate
thereof for the benefit of employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries and under which employees,
retirees, dependents, spouses, directors, independent contractors, or other
beneficiaries are eligible to participate (collectively, the "ATS Benefit
Plans"), and has described in Section 5.15(a) of the ATS Disclosure Memorandum
the benefits offered under any unwritten ATS Benefit Plan. Any of the ATS
Benefit Plans which is an "employee pension benefit plan," as that term is
defined in Section 3(2) of ERISA, is referred to herein as an "ATS ERISA Plan."
Each ATS ERISA Plan which is also a "defined benefit plan" (as defined in
Section 414(j) of the Internal Revenue Code) is referred to herein as a "ATS
Pension Plan."
(b) For each ATS Benefit Plan, ATS has delivered copies of all
(i) trust agreements or other funding arrangements for such ATS Benefit Plan
(including insurance contracts), and all amendments thereto, (ii) determination
letters (including determination letters for each prior version of such ATS
Benefit Plan and each plan that has been merged into such ATS Benefit Plan),
rulings, opinion letters, information letters, or advisory opinions issued by
the Internal Revenue Service, the Department of Labor, or the Pension Benefit
Guaranty Corporation after December 31, 1988, (iii) annual reports or returns,
audited or unaudited Financial Statements, actuarial valuations and reports, and
summary annual reports prepared for any ATS Benefit Plan with respect to the
most recent three plan years, (iv) the most recent summary plan description and
any material modifications thereto) and (v) copies of any filings with the
Internal Revenue Service under Revenue Procedure 98-22 or any predecessor
Revenue Procedures related to the VCR Program or Closing Agreement Program, and
(vi) copies of documentation prepared in reliance on the portion of Revenue
Procedure 98-22 related to the Administrative Policy Regarding Sanctions, or on
any IRS field directive related to the Administrative Policy Regarding Self-
Correction or Administrative Policy Regarding Sanctions.
(c) All ATS Benefit Plans are in compliance with the applicable
terms of ERISA, the Internal Revenue Code, all applicable state and federal
securities laws, and any other applicable Laws the breach or violation of which
are reasonably likely to have, individually or in the aggregate, an ATS Material
Adverse Effect. Each ATS ERISA Plan (and all prior versions of such ATS ERISA
Plan) which is intended to be qualified under Section 401(a) of the
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Code has received a favorable determination letter from the
Internal Revenue Service, and ATS is not aware of any circumstances likely to
result in revocation of any such favorable determination letter.
(d) Except as disclosed in Section 5.15(d) of the ATS Disclosure
Memorandum, all ATS Benefit Plan documents, and annual reports or returns,
audited or unaudited financial statements, actuarial valuations, summary annual
reports, and summary plan descriptions issued with respect to the ATS Benefit
Plans are correct and complete, have been timely filed with the Internal Revenue
Service, the Department of Labor, or distributed to participants of an ATS
Benefit Plan (as required by law), and there have been no changes in the
information set forth therein.
(e) No ATS Pension Plan is or has been a multiemployer plan
within the meaning of Section 3(37) of ERISA.
(f) No "party in interest" (as defined in Section 3(14) of ERISA)
or "disqualified person" (as defined in Section 4975(e)(2) of the Code) with
respect to any ATS Benefit Plan has engaged in any nonexempt "prohibited
transaction" (described in Section 4975(c) of the Code or Section 406 of ERISA).
(g) No ATS Pension Plan has any "unfunded current liability," as
that term is defined in Section 302(d)(8)(A) of ERISA or a "liquidity
shortfall," as defined in Internal Revenue Code 414(412(m)(5), and the fair
market value of the assets of any such plan exceeds the present value of all
benefits (whether vested or not) accrued to date by all present and former
participants in such ATS Pension Plan. For this purpose, the assumptions
prescribed by the Pension Benefit Guaranty Corporation for valuing plan assets
or liabilities upon plan termination shall be applied and the term "benefits"
shall include the value of all benefits, rights and features protected under
Code (S)411(d)(6) or its successors and any ancillary benefits (including
disability, shutdown, early retirement and welfare benefits) provided under such
ATS Pension Plan, and "benefit liabilities" as defined in ERISA Section
4001(a)(16). Since the date of the most recent actuarial valuation, there has
been (i) no material change in the financial position of any ATS Pension Plan,
(ii) no change in the actuarial assumptions with respect to any ATS Pension
Plan, and (iii) no increase in benefits under any ATS Pension Plan as a result
of plan amendments or changes in applicable Law which is reasonably likely to
have, individually or in the aggregate, an ATS Material Adverse Effect or
materially adversely affect the funding status of any such plan. Neither any ATS
Pension Plan nor any "single-employer plan," within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by any ATS Entity, or the
single-employer plan of any entity which is considered one employer with ATS
under Section 4001 of ERISA or Section 414 of the Internal Revenue Code or
Section 302 of ERISA (whether or not waived) (an "ERISA Affiliate") has an
"accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA. No lien exists or can be expected
to exist with under Internal Revenue Code Section 412(n) or ERISA 302(f) and no
tax has been imposed or can be expected to be imposed under Code Section 4971
with respect to any ATS Benefit Plan. No ATS Entity has provided, or is required
to provide, security to a ATS
-23-
Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the Internal Revenue Code.
(h) Within the six-year period preceding the Effective Time, No
Liability under Subtitle C or D of Title IV of ERISA has been or is reasonably
expected to be incurred by any ATS Entity with respect to any ongoing, frozen,
or terminated single-employer plan or the single-employer plan of any ERISA
Affiliate. There has been no (i) "reportable event" (as defined in Section 4043
of ERISA), or event described in Section 4041, 4042, 4062 (including 4062(e)),
Section 4063, 4064 or 4069 of ERISA), or (ii) termination or partial
termination, withdrawal or partial withdrawal with respect to any ATS Benefit
Plan which Seller maintains or contributes to or has maintained or contributed
to. The Company has not incurred any liability under Title IV of ERISA,
including any liability that could arise as a result of the Company's membership
in a "controlled group" as defined in ERISA Section 4001(a)(14) and ERISA
Section 4001(b)(1).
(i) Except as disclosed in Section 5.15(i) of the ATS Disclosure
Memorandum, no ATS Entity maintains or has ever maintained an ATS Benefit Plan
providing welfare benefits (as defined in ERISA Section 3(1)) to employees after
retirement or other separation from service except to the extent required under
Part 6 of Title I of ERISA or Code Section 4980B or their successors. For any
such ATS Benefit Plan, there are no restrictions on the rights of such ATS
Entity to amend or terminate any such retiree health or benefit Plan without
incurring any Liability thereunder. No tax under Code Sections 4980B or 5000
has been incurred with respect to any ATS Benefit Plan and no circumstances
exist which could give rise to such taxes.
(j) Except as disclosed in Section 5.15(j) of the ATS Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of any ATS Entity from
any ATS Entity under any ATS Benefit Plan or otherwise, (ii) increase any
benefits otherwise payable under any ATS Benefit Plan, or (iii) result in any
acceleration of the time of payment or vesting of any such benefit.
(k) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of any ATS Entity and their respective beneficiaries have been
fully reflected on the ATS Financial Statements to the extent required by and in
accordance with GAAP.
(l) Except as disclosed in Section 5.15(l) of the ATS Disclosure
Memorandum, all ATS Benefit Plans that permit participants to direct the
investment of plan assets comply with the requirements of ERISA Section 404(c)
and accompanying regulations.
(m) Except as disclosed in Section 5.15(m) of the ATS Disclosure
Memorandum, all individuals participating in (or eligible to participate in) any
ATS Benefit Plan
-24-
maintained (or contributed to) by ATS are common-law employees under the
rationale set forth in Professional and Executive Leasing, Inc., 89 T.C. 225
----------------------------------------
(1987).
(n) Section 5.15(n) of the ATS Disclosure Memorandum lists the
names of all highly compensated employees (as defined in Internal Revenue Code
Section 414(q)) who are eligible to participate in any ATS Benefit Plan.
(o) Section 5.15(o) of the ATS Disclosure Memorandum lists the
names of each employee of an ATS Entity and the number of days of accrued
vacation days, sick leave and personal leave for such employee.
(p) Section 5.15(p) of the ATS Disclosure Memorandum lists the
names of each employee of an ATS Entity who has a loan agreement with an ATS
Entity pursuant to the employee loan program as described in the American
Teleconferencing Services, Ltd. Human Resources Policy and Procedure Manual
(September 1, 1996), the amount which is outstanding under such loan agreement,
and the repayment schedule of such loan agreement.
5.16 MATERIAL CONTRACTS.
------------------
(a) Except as listed in Section 5.16(a) of the ATS Disclosure
Memorandum, ATS is not a party to any written or oral:
(i) agreement, contract or commitment with any present or
former employee or consultant or for the employment of any person, including any
consultant;
(ii) agreement, contract or commitment for the future
purchase of, or payment for, supplies or products, or for the performance of
services by a third party which supplies, products or services are used in the
conduct of ATS's business involving in any one case $25,000 or more;
(iii) agreement, contract or commitment to sell or supply
products ("Goods Contracts") or to perform services ("Services Contracts") in
connection with the business involving in any one case $25,000 or more;
(iv) agreement, contract or commitment not otherwise listed
on the Disclosure Memorandum and continuing over a period of more than six
months from the date hereof or exceed $100,000 in value;
(v) distribution, dealer, representative or sales agency
agreement, contract or commitment;
(vi) lease under which ATS is either lessor or lessee
relating to the Assets or any property at which the Assets are located;
-25-
(vii) note, debenture, bond, equipment trust agreement,
letter of credit agreement, loan agreement or other contract or commitment for
the borrowing or lending of money relating to the business of ATS or agreement
or arrangement for a line of credit or guarantee, pledge or undertaking of the
indebtedness of any other person;
(viii) agreement, contract or commitment for any charitable
or political contribution;
(ix) commitment or agreement for any capital expenditure or
leasehold improvement in excess of $50,000;
(x) agreement, contract or commitment limiting or
restraining ATS, or any successor thereto from engaging or competing in any
manner or in any business, nor, to ATS's Knowledge, is any employee of ATS
subject to any such agreement, contract or commitment;
(xi) license, franchise, distributorship or other
agreement, which relates in whole or in part to any software, patent, trademark,
trade name, service ▇▇▇▇ or copyright or to any ideas, technical assistance or
other know-how of or used by ATS in the conduct of the Business;
(xii) any agreement between or among ATS Entities; or
(xiii) material agreement, contract or commitment of ATS not
made in the ordinary course of business.
(b) Each of the agreements, contract, commitments, leases, plans
and other instruments, documents and undertakings listed in the ATS Disclosure
Memorandum in response to this Section, or not required to be listed therein
because of the amount thereof, is valid and enforceable in accordance with its
terms; ATS is, and to ATS's Knowledge all other parties thereto are, in
compliance with the provisions thereof; ATS is not, and to ATS's Knowledge no
other party thereto is, in default in the performance, observance or fulfillment
of any material obligation, covenant or condition contained therein; and no
event has occurred which with or without the giving of notice or lapse of time,
or both, would constitute a default thereunder. Furthermore, no such agreement,
contract, commitment, lease, plan or other instrument, document or undertaking,
in the reasonable opinion of ATS, contains any contractual requirement with
which there is a reasonable likelihood ATS or any other party thereto will be
unable to comply. No written or oral agreement, contract or commitment described
therein requires the consent of any party to its assignment in connection with
the transaction contemplated hereby. True, complete and correct copies of each
such agreement have been furnished by ATS to Premiere (or true, complete and
correct descriptions thereof are set forth in Section 5.16(a) of the ATS
Disclosure Memorandum if such agreement is oral). All of the indebtedness of any
ATS Entity for money borrowed is prepayable at any time by such ATS Entity
without penalty or premium.
-26-
(c) Each Goods Contract and Services Contract (i) is in one of
the forms attached to Section 5.16(a) of the ATS Disclosure Memorandum with only
such changes thereto as are necessary to reflect applicable fees, products, and
time periods and such other changes therein as do not materially affect the
rights or obligations of ATS thereunder and (ii) can be satisfied or performed
by ATS at margins permitting an operating profit.
(d) Section 5.16(d) of the ATS Disclosure Memorandum accurately
discloses with respect to each Services Contract disclosed therein, the top
twenty customers of ATS and the historical revenues for such customers for the
past three (3) years. ATS has no reason to believe that its profit margin with
respect to such customer might be less than it has customarily achieved in the
past.
(e) Except as set forth in Section 5.16(e) of the ATS Disclosure
Memorandum, the ATS Products and Services conform in all material respects with
any specification, documentation, performance standard, representation or
statement made or provided with respect thereto by or on behalf of any ATS
Entity, and there has not been during the last three (3) years any claim made
against any ATS Entity by any customer of any ATS Entity or by any other Person
alleging that any ATS Product and Service (including each version thereof that
has been licensed or otherwise made available by any ATS Entity to any Person)
does not conform in all material respects with any specification, documentation,
performance standard, representation or statement made or provided by or on
behalf of any ATS Entity, and, to the Knowledge of ATS, there is not a
reasonable basis for any such claim. Notwithstanding the generality of the
foregoing, all ATS Products and Services offered or distributed by any ATS
Entity, conform as of the date hereof to the current and future performance
standards and service levels applicable thereto, including without limitation,
those set forth in the Contracts listed in Section 5.16(a) of the ATS Disclosure
Memorandum, without imposition of any performance credits or other penalties and
otherwise in accordance with the terms of such Contracts. No product liability
or warranty claims which individually or in the aggregate could exceed the
reserves therefor on the ATS Financial Statements have been communicated in
writing to or threatened in writing against any ATS Entity. The ATS Products
and Services, as of the date hereof, during and after the calendar year 2000
A.D., include design, function and performance capabilities such that the ATS
Products and Services shall not abnormally end and/or have invalid and/or
incorrect results from and/or performance or functional degradation because of
the then-current date. The design and function of the ATS Products and Services
shall ensure year 2000 A.D. and shall include, but not be limited to, date data
century recognition, calculations that accommodate same century and multicentury
formulas and date values, and date data interface values that reflect the
century.
5.17 LEGAL PROCEEDINGS. Except as set forth on Section 5.17 of the
-----------------
ATS Disclosure Memorandum, there is no Litigation instituted or pending, or, to
the Knowledge of ATS, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome) against, by or involving any ATS Entity, or against, by
or involving any director, employee or employee benefit plan of any ATS Entity,
or against any Asset, interest, or right of any of them, nor are there any
Orders of any Regulatory Authorities, other governmental authorities, or
arbitrators outstanding against any
-27-
ATS Entity. Section 5.17 of the ATS Disclosure Memorandum contains a summary of
all Litigation involving any ATS Entity or which any ATS Entity has threatened
against a party settled or otherwise concluded since January 1, 1993.
5.18 REPORTS. Since January 1, 1993, or the date of organization if
-------
later, each ATS Entity has timely filed all reports and statements, together
with any amendments required to be made with respect thereto, that it was
required to file with Regulatory Authorities (except, in the case of state
securities authorities, failures to file which are not reasonably likely to
have, individually or in the aggregate, an ATS Material Adverse Effect). As of
their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date, each such report
and document did not, in all material respects, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
5.19 STATEMENTS TRUE AND CORRECT. No statement, certificate,
---------------------------
instrument, or other writing furnished or to be furnished by any ATS Entity or
any Affiliate thereof to Premiere pursuant to this Agreement or any other
document, agreement, or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. All documents that any ATS Entity or any
Affiliate thereof is responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of applicable Law.
5.20 TAX AND REGULATORY MATTERS. No ATS Entity or any Affiliate
--------------------------
thereof or to the Knowledge of ATS, any Shareholder or any Affiliate thereof has
taken or agreed to take any action or has any Knowledge of any fact or
circumstance that is reasonably likely to (i) prevent the Merger from qualifying
as a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 10.1(b) or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
5.21 CERTAIN STATE STATUTES INAPPLICABLE. The provisions of
-----------------------------------
applicable Missouri Takeover Laws, if any, will not apply to this Agreement or
the Merger.
5.22 CHARTER PROVISIONS. Each ATS Entity and, to the Knowledge of
------------------
ATS, each Shareholder has taken all action so that the entering into of this
Agreement and the consummation of the Merger and the other transactions
contemplated by this Agreement do not and will not result in the grant of any
rights to any Person under the Articles of Incorporation, Bylaws or other
governing instruments of any ATS Entity or restrict or impair the ability of
Premiere or any of its Subsidiaries to vote, or otherwise to exercise the rights
of a shareholder with respect to, shares of any ATS Entity that may be directly
or indirectly acquired or controlled by them.
-28-
5.23 SHARES OF PREMIERE COMMON STOCK; INVESTMENT INTENTION.
-----------------------------------------------------
Each Shareholder is acquiring the shares of Premiere Common Stock to be issued
pursuant to this Agreement for investment only, for such Shareholder's own
account and not as a nominee or agent, and not with the view to, or for resale
in connection with, any distribution thereof or participation therein. Each
Shareholder is an "accredited investor" as such term is defined in Rule 501(a)
under the 1933 Act. Each Shareholder understands that the shares of Premiere
Common Stock to be issued pursuant to this Agreement have not been, and will not
be, registered under the 1933 Act in reliance upon the representations set forth
herein (except pursuant to the Registration Rights Agreement) and may not be
resold except pursuant to an effective registration statement under the 1933 Act
or pursuant to an exemption from registration. Each Shareholder represents and
warrants that such Shareholder are able to bear the economic risk of an
investment in the Premiere Common Stock acquired pursuant to this Agreement and
can afford to sustain a total loss on such investment and has such Knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the proposed investment and therefore has the capacity
to protect their own interests in connection with the acquisition of the
Premiere Common Stock. Each Shareholder acknowledges that prior to the Closing
of the Merger, each Shareholder has had access to Premiere's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, as amended, and any
subsequent filings of SEC Documents through the date hereof. Each Shareholder
will at that time confirm that they have had an adequate opportunity to ask
questions and receive answers from the officers of Premiere concerning any and
all matters relating to this Agreement and the Merger. Each Shareholder agrees
not to offer, sell, assign, exchange, transfer, encumber, pledge, distribute or
otherwise dispose of the Premiere Common Stock to be acquired by it pursuant to
this Agreement except after full compliance with all of the applicable
provisions of the 1933 Act and applicable state securities Laws, and any attempt
by a Stockholder to do so will be treated as ineffective for all purposes.
5.24 BOARD RECOMMENDATION. The Board of Directors of ATS, at a
--------------------
meeting duly called and held, has by unanimous vote of those directors present
(who constituted all of the directors then in office) (i) determined that this
Agreement and the transactions contemplated hereby, including the Merger, and
the transactions contemplated thereby, taken together, are fair to and in the
best interests of the shareholders and (ii) resolved to recommend that the
holders of the shares of ATS Common Stock approve this Agreement.
5.25 EXISTING CONDITION. Except as disclosed in Section 5.25 of the
------------------
ATS Disclosure Memorandum, since March 31, 1998 ATS has not:
(a) incurred any Liabilities, other than Liabilities incurred in
the ordinary course of business consistent with past practice, or discharged or
satisfied any lien or encumbrance, or paid any Liabilities, other than in the
ordinary course of business consistent with past practice, or failed to pay or
discharge when due any Liabilities of which the failure to pay or discharge has
caused or will cause any material damage or risk of material loss to it or any
of its assets or properties;
(b) sold, encumbered, assigned or transferred any assets or
properties which would have been included in the Assets if the Closing had been
held on March 31, 1998 or
-29-
on any date since then, except for the sale of inventory in the ordinary course
of business consistent with past practice;
(c) created, incurred, assumed or guaranteed any indebtedness for
money borrowed, or mortgaged, pledged or subjected any of its Assets to any
mortgage, lien, pledge, security interest, conditional sales contract or other
encumbrance of any nature whatsoever;
(d) made or suffered any amendment or termination of any material
agreement, contract, commitment, lease or plan to which it is a party or by
which it is bound, or canceled, modified or waived any substantial debts or
claims held by it or waived any rights of substantial value, whether or not in
the ordinary course of business;
(e) declared, set aside or paid any dividend or made or agreed to
make any other distribution or payment in respect of its capital shares or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
acquire any of its capital shares;
(f) suffered any damage, destruction or loss, whether or not
covered by insurance, (i) materially and adversely affecting its business,
operations, assets, properties or prospects or (ii) of any item or items carried
on its books of account individually or in the aggregate at more than $5,000, or
suffered any repeated, recurring or prolonged shortage, cessation or
interruption of supplies or utility or other services required to conduct its
business and operations;
(g) suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or otherwise);
(h) received notice or had Knowledge of any actual or threatened
labor trouble, strike or other occurrence, event or condition of any similar
character which has had or might have an adverse effect on its business,
operations, assets, properties or prospects;
(i) made commitments or agreements for capital expenditures or
capital additions or betterments exceeding in the aggregate $25,000 except such
as may be involved in ordinary repair, maintenance or replacement of its assets;
(j) increased the salaries or other compensation of, or made any
advance (excluding advances for ordinary and necessary business expenses) or
loan to, any of its employees or made any increase in, or any addition to, other
benefits to which any of its employees may be entitled;
(k) changed any of the accounting principles followed by it or
the methods of applying such principles; or
(l) entered into any transaction other than in the ordinary
course of business consistent with past practice.
-30-
Until the Closing Date, neither ATS nor any Subsidiary will permit any of the
foregoing except as may be specifically required or permitted by the terms of
this Agreement, or approved in writing by Premiere.
5.26 CONDITION OF TANGIBLE ASSETS. Except as disclosed in Section
----------------------------
5.26 of the ATS Disclosure Memorandum, all buildings, structures, facilities,
equipment and other material items of tangible property and assets which would
be included in the Assets if the Closing took place on the date hereof are in
good operating condition and repair, subject to normal wear and maintenance, are
usable in the regular and ordinary course of business and conform to all
applicable laws, ordinances, codes, rules and regulations, and Authorizations
relating to their construction, use and operation. No person other than ATS owns
any equipment or other tangible assets or properties situated on the premises of
ATS or necessary to the operation of the business of ATS, except for leased
items disclosed in the ATS Disclosure Memorandum and for items of immaterial
value.
5.27 TRANSACTIONS WITH AFFILIATES. Except as disclosed in Section
----------------------------
5.27 of the ATS Disclosure Memorandum, no shareholder, director, officer or
employee of ATS, or any member of his or her immediate family or any other to
its, his or her affiliates, owns or has a 5% or more ownership interest in any
corporation or other entity that is or was during the last three years a party
to, or in any property which is or was during the last three years the subject
of, any material contract, agreement or understanding, business arrangement or
relationship with ATS. There are no distributions payable to any employee,
shareholder or former employee of ATS or any other Person as a result of the
Merger or the transactions contemplated hereby, other than distributions
included within the definition of Transaction Costs.
5.28 INSURANCE. The assets, properties and operations of ATS are
---------
insured under various policies of general liability and other forms of
insurance, all of which are described in Section 5.28 of the ATS Disclosure
Memorandum, which discloses for each policy the risks insured against, coverage
limits, deductible amounts, all claims outstanding or resolved within the past
three (3) years thereunder, and whether the terms of such policy provide for
retrospective premium adjustments. All such policies are in full force and
effect in accordance with their terms, no notice of cancellation has been
received, and there is no existing default or event which, with the giving of
notice or lapse of time or both, would constitute a default thereunder. Such
policies are in amounts which are adequate in relation to the business and
assets of ATS and all premiums to date have been paid in full, except as
disclosed in Section 5.28 of the ATS Disclosure Memorandum. ATS has not been
refused any insurance, nor has its coverage been limited, by any insurance
carrier to which it has applied for insurance or with which it has carried
insurance during the past five years. Section 5.28 of the ATS Disclosure
Memorandum also contains a true and complete description of all outstanding
bonds and other surety arrangements issued or entered into in connection with
the business, assets and liabilities of ATS.
5.29 RESTRICTIONS. No ATS Entity is a party to any indenture,
------------
agreement, contract, commitment, lease, plan, license, permit, authorization or
other instrument, document or understanding, oral or written, or subject to any
charter or other corporate restriction or any
-31-
judgment, order, writ, injunction, decree or award which materially adversely
affects or materially restricts, the business, operations, assets, properties,
prospects or condition (financial or otherwise) of ATS after consummation of the
transactions contemplated hereby.
5.30 CONDITIONS AFFECTING ATS. There is no fact, development or
------------------------
threatened development with respect to the markets, products, services, clients,
customers, facilities, computer software, data bases, personnel, vendors,
suppliers, operations, assets or prospects of the business which are known to
ATS which would materially adversely affect the business, operations or
prospects of ATS considered as a whole, other than such conditions as may affect
as a whole the economy generally. ATS has used its best efforts to keep
available the services of the employees, agents, customers and suppliers of ATS
active in the conduct of the business. ATS does not have any reason to believe
that any loss of any employee, agent, customer or supplier or other advantageous
arrangement will result because of the consummation of the transactions
contemplated hereby. Section 5.30 of the ATS Disclosure Memorandum sets forth a
schedule for completion of each of the strategic initiatives of ATS and a
description of the resources (financial and otherwise) to be devoted to each
such initiative.
5.31 TITLE TO PROPERTIES; LEASES.
---------------------------
(a) Each of ATS and its Subsidiaries has good legal and insurable
title, with respect to all real property owned or leased (in fee simple if owned
and leasehold if leased) and marketable title if owned (in fee simple), if any,
reflected as an asset on the most recent balance sheet forming part of the ATS
Financial Statements, or held by ATS or any of its Subsidiaries for use in its
business if not so reflected, and good indefeasible and merchantable title to
all other assets, tangible and intangible (excluding leased property), reflected
on such balance sheet, or held by ATS or any of its Subsidiaries for use in its
business if not so reflected, or purported to have been acquired by ATS or any
of its Subsidiaries since such date, except inventory sold or depleted, or
property, plant and other equipment used up or retired, since such date, in each
case in the ordinary course of business consistent with past practice of ATS and
its Subsidiaries, free and clear of all Liens, except such as are reflected in
the most recent balance sheet, or the notes thereto, forming part of the
Financial Statements or set forth in Section 5.31(a) of the ATS Disclosure
Memorandum. Except for financing statements evidencing Liens referred to in the
preceding sentence (a true, correct and complete list and description of which
is set forth in Section 5.31(a) of the ATS Disclosure Memorandum), to ATS's
Knowledge, no financing statements under the Uniform Commercial Code and no
other filing which names ATS or any of its Subsidiaries as debtor or which
covers or purports to cover any of the property of ATS or any of its
Subsidiaries is on file in any state or other jurisdiction, and neither ATS nor
any Subsidiary has signed or agreed to sign any such financing statement or
filing or any agreement authorizing any secured party thereunder to file any
such financing statement or filing. Each Lease or other occupancy or other
agreement under which ATS or any of its Subsidiaries holds real or personal
property has been duly authorized, executed and delivered by ATS or Subsidiary,
as the case may be, and, to ATS's Knowledge, by each of the parties thereto.
Each such Lease is a legal, valid and binding obligation of ATS or a Subsidiary,
as the case may be, and, to ATS's Knowledge, of each other party thereto,
enforceable in accordance with its terms. Each of ATS and its Subsidiaries has a
valid leasehold interest in and enjoys peaceful and undisturbed possession under
all Leases
-32-
pursuant to which it holds any real property or tangible personal property, none
of which contains any provision which would impair ATS's ability to use such
property as it is currently used by ATS, except as described in Section 5.31(a)
of the ATS Disclosure Memorandum. All of such Leases are valid and subsisting
and in full force and effect. Neither ATS nor any of its Subsidiaries nor, to
ATS's Knowledge, any other party thereto, is in default in the performance,
observance or fulfillment of any obligation, covenant or condition contained in
any such Lease.
(b) Section 5.31(b) of the ATS Disclosure Memorandum is a true,
correct and complete description of all real estate owned or leased by ATS or
any of its Subsidiaries and all Leases and an identification of all material
items of fixed assets and machinery and equipment. None of the fixed assets and
machinery and equipment is subject to contracts of sale, and none is held by ATS
or any of its Subsidiaries as lessee or as conditional sales venue under any
Lease or conditional sales contract and none is subject to any title retention
agreement, except as set forth in Section 5.31(b) of the ATS Disclosure
Memorandum. The real property (other than land), fixtures, fixed assets and
machinery and equipment are in a state of good repair and maintenance and are in
good operating condition, reasonable wear and tear excepted.
(c) Except as set forth in Section 5.31(c) of the ATS Disclosure
Memorandum:
(i) all real property owned or leased by ATS or any of its
Subsidiaries conforms to and complies with all applicable title covenants,
conditions, restrictions and reservations and all Environmental Laws and all
applicable zoning, wetlands, land use and other Law, and
(ii) neither ATS nor any Subsidiary, nor, to the Knowledge
of ATS, any landlord, tenant or other occupant or user of any such real
property, has used such real property for the storage or disposal of Hazardous
Materials or engaged in the business of storing or disposing of Hazardous
Materials, except for use in the ordinary course of business of the type
conducted by ATS.
5.32 RELATED TRANSACTIONS. Section 5.32 of the ATS Disclosure
--------------------
Memorandum sets forth a true, correct and complete description of any Contract
or transaction, not fully discharged or consummated, as the case may be, on or
before the beginning of the ATS's current fiscal year, between ATS or any of its
Subsidiaries and any of its officers, directors, employees, stockholders, or any
Affiliate of any thereof (other than reasonable compensation for services as
officers, directors and employees and reimbursement for out-of-pocket expenses
reasonably incurred in support of ATS's business), now existing or which, at any
time since its organization, existed or occurred, including without limitation
any providing for the furnishing of services to or by, providing for rental of
property, real, personal or mixed, to or from, or providing for the lending or
borrowing of money to or from or otherwise requiring payments to or from, any
officer, director, stockholder or employee, or any Affiliate of any thereof. All
such Contracts and transactions were and are on terms and conditions no less
favorable to ATS or any of its Subsidiaries than would be customary for such
between Persons who are not Affiliates or upon
-33-
terms and conditions on which similar Contracts and transactions with Persons
who are not Affiliates could fairly and reasonably be expected to be entered
into, except as otherwise set forth in Section 5.32 of the ATS Disclosure
Memorandum.
5.33 BANK ACCOUNTS. A true and correct and complete list as of the
-------------
date of this Agreement of all banks, trust companies, savings and loan
associations and brokerage firms in which ATS or any Subsidiary has an account
or a safe deposit box and the names of all Persons authorized to draw thereon,
to have access thereto, or to authorize transactions therein, the names of all
Persons, if any, holding powers of attorney from ATS or any Subsidiary and a
summary statement as to the terms thereof is described in Section 5.33 of the
ATS Disclosure Memorandum.
5.34 SYSTEM PERFORMANCE. The Network as currently equipped and
------------------
maintained is capably of Reliably Handling and has Reliable Handled eight
million (8,000,000) minutes of conferencing per month and peak loads of 110,000
minutes of conferencing per hour. The Network is capable, without additional
equipment, without an upgrade of software or hardware, and without material
degradation of service of Network performance, of Reliably Handling nine million
(9,000,000) minutes per month of conferencing and peak loads of 229,000 minutes
of conferencing per hour. The Network is in compliance with all Year 2000
standards, or will be by the end of 1998 at a cost of not more than $50,000.
5.35 BROKER OR FINDER. No Person assisted in or brought about the
----------------
negotiation of this Agreement, the Merger or the subject matter of the
Transactions in the capacity of broker, agent or finder or in any similar
capacity on behalf of ATS or any Stockholder, except as set forth in Section
5.35 of the ATS Disclosure Memorandum.
5.36 ABSENCE OF SENSITIVE PAYMENTS. ATS has not, nor has any
-----------------------------
Subsidiary, or, to ATS's Knowledge, any of its or any Subsidiary's officers,
directors, employees or representatives, (a) made any contributions, payments or
gifts to or for the private use of any governmental office, employee or agent
where either the payment or the purpose of such contribution, payment or gift is
illegal under the laws of the United States or the jurisdiction in which made,
(b) established or maintained any unrecorded fund or asset for any purpose or
made any false or artificial entries on its books, or (c) made any payments to
any person with the intention or understanding that any part of such payment was
to be used for any purpose other than that described in the documents supporting
the payment.
5.37 PREDECESSOR STATUS. Set forth in Section 5.37 of the ATS
------------------
Disclosure Memorandum is a listing of all names of all predecessor companies of
ATS and the names of any Entities from which, since December 31, 1991, ATS
previously acquired material properties or assets. Except as disclosed in
Section 3.31 of the ATS Disclosure Memorandum, ATS has never been a Subsidiary
or division of another Entity, nor a part of an acquisition which was later
rescinded.
-34-
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
--------------------------------------------------
Each of the Shareholders, severally but not jointly, hereby represents
and warrants to Premiere as of the date that such Shareholder becomes a party to
this Agreement and as of the Closing Date as follows:
6.1 OWNERSHIP OF SHARES. The Shareholder is the owner of all
-------------------
right, title and interest (legal, record and beneficial) in and to the number of
ATS Common Stock listed below Shareholder's signature to this Agreement, free
and clear of any and all Liens. The delivery to Premiere of the ATS Common Stock
pursuant to the provisions of this Agreement will transfer to Premiere good and
marketable title to all of such Shares free and clear of all Liens. Other than
the ATS Common Stock listed opposite the name of the Shareholder on Section
5.4(a) of the ATS Disclosure Memorandum, the Shareholder owns no right, title or
interest (legal, record or beneficial) to any securities of ATS or right of any
kind to have any such security issued. No Person has any agreement or option or
any right or privilege (whether pre-emptive or contractual) capable of becoming
an agreement or option for the purchase of any of the ATS Common Stock from the
Shareholder.
6.2 AUTHORITY OF SHAREHOLDER; NO BREACH BY AGREEMENT. The
------------------------------------------------
Shareholder has the absolute and unrestricted right, power, authority, and
capacity to execute and deliver the Shareholders' Closing Documents and to
perform its obligations under the Shareholders' Closing Documents. This
Agreement represents a legal, valid, and binding obligation of the Shareholder,
enforceable against the Shareholder in accordance with its terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought). Upon the execution and delivery by the Shareholder
of the Shareholders' Closing Documents, the Shareholders' Closing Documents will
constitute the legal, valid, and binding obligations of the Shareholder,
enforceable against the Shareholder in accordance with their respective terms.
6.3 ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS. The
------------------------------------------------------
execution, delivery and performance by the Shareholder of the Shareholders'
Closing Documents (with or without the giving of notice, the lapse of time, or
both): (a) other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NASD or under the HSR Act, no notice to, filing with, or Consent of, any
public body or authority is necessary for the consummation by the Shareholder of
the transactions contemplated in this Agreement, (b) will not conflict with,
result in a breach of, or constitute a default under any ruling, judgment, order
or injunction, or to the Knowledge of the Shareholder any law, ordinance or
regulation, of any court or governmental instrumentality to which the
Shareholder is subject or by which the Shareholder, or his, her or its Assets,
are bound; and (c) will not create any Lien upon the Shares owned by the
Shareholder.
-35-
6.4 LEGAL PROCEEDINGS. There are no claims, lawsuits, actions,
-----------------
arbitrations, administrative or other proceedings, or to the Knowledge of the
Shareholder, governmental investigations or inquiries, pending or threatened
against the Shareholder affecting the performance by the Shareholder of the
Shareholders' Closing Documents and, to the Knowledge of the Shareholder, there
is no basis for any action or any state of facts or occurrence of any event
which might give rise to the foregoing.
6.5 INVESTMENT INTENTION; ACCESS TO INFORMATION.
-------------------------------------------
(a) The Shareholder is acquiring the shares of Premiere Common
Stock to be issued pursuant to this Agreement for investment only, for the
Shareholder's own account and not as a nominee or agent, and not with the view
to, or for resale in connection with, any distribution thereof or participation
therein. The Shareholder is an "accredited investor" as such term is defined in
Rule 501(a) under the 1933 Act. The Shareholder understands that the shares of
Premiere Common Stock to be issued pursuant to this Agreement have not been, and
will not be, registered under the 1933 Act in reliance upon the representations
set forth herein. The Shareholder also understands that the Shares will be
subject to the transfer restrictions set forth in the Registration Rights
Agreement.
(b) The Shareholder understands that the offering and sale of the
Premiere Common Stock is intended to be exempt from registration under the 1933
Act, by virtue of Section 4(2) of the 1933 Act and Regulation D of the 1933 Act.
The Shareholder has the financial ability to bear the economic risk of the
Shareholder's investment and has adequate means for providing for the
Shareholder's current needs and personal or other contingencies.
(c) The Shareholder meets any additional or different suitability
standards imposed by the Shareholder's state of incorporation or organization,
or imposed by any other applicable laws.
(d) The Shareholder:
(i) has been given the opportunity to ask questions of,
and receive answers from, the executive officers of Premiere concerning the
terms and conditions of the Merger; has received any documents which the
Shareholder may have requested and such additional information as it has deemed
necessary or that was otherwise provided to evaluate the merits and risks of the
Merger; and has not been furnished any offering literature or prospectus other
than as described herein;
(ii) except as described in clause (i) above, has not been
furnished with any oral or written representation or oral or written information
in connection with the Merger which is not contained herein; and
(iii) has determined that the shares of Premiere Common
Stock are a suitable investment for it and that, at this time, it has no need
for liquidity of its investment and could bear a complete loss of such
investment.
-36-
(e) The Shareholder is not relying on ATS or Premiere, or the
references to any legal opinion in this Agreement, with respect to individual
and corporate tax and other economic considerations involved in this investment.
(f) The Shareholder will not sell or otherwise transfer shares of
Premiere Common Stock or any portion thereof without registration under any
applicable Securities Laws or an exemption therefrom, and fully understands and
agrees that the Shareholder must bear the economic risk of this purchase for an
indefinite period of time.
6.6 TAX AND REGULATORY MATTERS. No Shareholder has taken or agreed
--------------------------
to take any action or has any Knowledge of any fact or circumstance that is
reasonably likely to (i) prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or (ii)
materially impede or delay receipt of any Consents of Regulatory Authorities
referred to in Section 10.1(b) or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.
6.7 CHARTER PROVISIONS. Each Shareholder has taken all action so
------------------
that the entering into of this Agreement and the consummation of the Merger and
the other transactions contemplated by this Agreement do not and will not result
in the grant of any rights to any Person under the Articles of Incorporation,
Bylaws or other governing instruments of any ATS Entity or restrict or impair
the ability of Premiere or any of its Subsidiaries to vote, or otherwise to
exercise the rights of a shareholder with respect to, shares of any ATS Entity
that may be directly or indirectly acquired or controlled by them.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PREMIERE
------------------------------------------
Premiere hereby represents and warrants to ATS and the Shareholders as
follows:
7.1 ORGANIZATION, STANDING, AND POWER. Premiere is a corporation
---------------------------------
duly organized, validly existing, and in good standing under the Laws of the
State of Georgia, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its material Assets.
Premiere is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Premiere Material
Adverse Effect.
7.2 AUTHORITY; NO BREACH BY AGREEMENT.
---------------------------------
(a) Premiere has the corporate power and authority necessary to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the
-37-
consummation of the transactions contemplated herein, including the Merger, have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of Premiere. This Agreement represents a legal, valid, and
binding obligation of Premiere, enforceable against Premiere in accordance with
its terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
Premiere, nor the consummation by Premiere of the transactions contemplated
hereby, nor compliance by Premiere with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of Premiere's Articles of
Incorporation or Bylaws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of any Premiere Entity under, any Contract or Permit of any Premiere
Entity, where such Default or Lien, or any failure to obtain such Consent, is
reasonably likely to have, individually or in the aggregate, a Premiere Material
Adverse Effect, or, (iii) subject to receipt of the requisite Consents referred
to in Section 10.1(b), constitute or result in a Default under, or require any
Consent pursuant to, any Law or Order applicable to any Premiere Entity or any
of their respective material Assets (including any Premiere Entity or any ATS
Entity becoming subject to or liable for the payment of any Tax or any of the
Assets owned by any Premiere Entity or any ATS Entity being reassessed or
revalued by any Taxing authority).
(c) Other than in connection or compliance with the provisions of
the Securities Laws, applicable state corporate and securities Laws, and rules
of the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act, and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a Premiere Material Adverse Effect, no notice to, filing with, or
Consent of, any public body or authority is necessary for the consummation by
Premiere of the Merger and the other transactions contemplated in this
Agreement.
7.3 CAPITAL STOCK.
-------------
(a) The authorized capital stock of Premiere consists of (i)
150,000,000 shares of Premiere Common Stock, of which 45,255,594 shares were
issued and outstanding as of March 26, 1998, and (ii) 5,000,000 shares of
Premiere Preferred Stock, of which 1 share was issued and outstanding as of
March 26, 1998. All of the issued and outstanding shares of Premiere Capital
Stock are, and all of the shares of Premiere Common Stock to be issued in
exchange for shares of ATS Common Stock upon consummation of the merger, when
issued in accordance with the terms of this Agreement, will be, duly and validly
issued and outstanding and fully paid and nonassessable. None of the
outstanding shares of Premiere Capital Stock has been, and none of the shares of
Premiere Common Stock to be issued
-38-
in exchange for shares of ATS Common Stock upon consummation of the merger will
be, issued in violation of any preemptive rights of the current or past
shareholders of Premiere.
(b) Except as set forth in Section 7.3(a) or as disclosed in
Section 7.3 of the Premiere Disclosure Memorandum, there are no shares of
capital stock or other equity securities of Premiere outstanding and no
outstanding Equity Rights relating to the capital stock of Premiere.
7.4 SEC FILINGS; FINANCIAL STATEMENTS.
---------------------------------
(a) Premiere has timely filed and made available to ATS and each
of the Shareholders all SEC Documents required to be filed by Premiere since
December 31, 1992 (the "Premiere SEC Reports"). The Premiere SEC Reports (i) at
the time filed, complied in all material respects with the applicable
requirements of the Securities Laws and other applicable Laws and (ii) did not,
at the time they were filed (or, if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated in such Premiere SEC Reports or necessary in order to make the statements
in such Premiere SEC Reports, in light of the circumstances under which they
were made, not misleading. No Premiere Subsidiary is required to file any SEC
Documents.
(b) Each of the Premiere Financial Statements (including, in each
case, any related notes) contained in the Premiere SEC Reports, including any
Premiere SEC Reports filed after the date of this Agreement until the Closing
Date, complied as to form in all material respects with the applicable published
rules and regulations of the SEC with respect thereto, was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited interim statements, as permitted by Form 10-Q of
the SEC), and fairly presented in all material respects the consolidated
financial position of Premiere and its Subsidiaries as at the respective dates
and the consolidated results of operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or are not
expected to be material in amount or effect.
7.5 FINANCING. Premiere has, or will have sufficient funds or
---------
available financing to enable it or its Subsidiaries or Sub to pay the cash
payment for all shares of ATS Common Stock as provided in Section 3.1 of Article
3 and all obligations of Premiere or Sub for fees and expenses related to the
Merger.
ARTICLE 8
CONDUCT OF BUSINESS PENDING CONSUMMATION
----------------------------------------
8.1 AFFIRMATIVE COVENANTS OF ATS. From the date of this Agreement
----------------------------
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of Premiere shall have been obtained, and
except as otherwise expressly contemplated herein, ATS shall and shall cause
each of its Subsidiaries to (a) operate its business only in the
-39-
usual, regular, and ordinary course, (b) preserve intact its business
organization and Assets and maintain its rights and franchises, and (c) take no
action which would (i) adversely affect the ability of any Party to obtain any
Consents required for the transactions contemplated hereby without imposition of
a condition or restriction of the type referred to in Section 10.1(b) or
10.1(c), or (ii) adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement. ATS shall use its best efforts to
keep available the services of its present employees and agents and to maintain
the relations and goodwill with the suppliers, customers, distributions and any
others having business relations with ATS.
8.2 NEGATIVE COVENANTS OF ATS. From the date of this Agreement until
-------------------------
the earlier of the Effective Time or the termination of this Agreement, unless
the prior written consent of Premiere shall have been obtained, and except as
otherwise expressly contemplated herein, ATS covenants and agrees that it will
not do or agree or commit to do, or permit any of its Subsidiaries to do or
agree or commit to do, any of the following:
(a) amend the Articles of Incorporation, Bylaws or other
governing instruments of any ATS Entity, or
(b) incur any additional debt obligation or other obligation for
borrowed money (other than indebtedness of a ATS Entity to another ATS Entity)
in excess of an aggregate of $25,000 (for the ATS Entities on a consolidated
basis) except in the ordinary course of the business of ATS Subsidiaries
consistent with past practices, or impose, or suffer the imposition, on any
Asset of any ATS Entity of any Lien or permit any such Lien to exist (other than
in connection with Liens in effect as of the date hereof that are disclosed in
the ATS Disclosure Memorandum); or
(c) except as disclosed in Section 8.2(c) of the ATS Disclosure
Memorandum, repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of the
capital stock of any ATS Entity, or declare or pay any dividend or make any
other distribution in respect of ATS's capital stock; or
(d) except for this Agreement, or as disclosed in Section 8.2(d)
of the ATS Disclosure Memorandum, issue, sell, pledge, encumber, authorize the
issuance of, enter into any Contract to issue, sell, pledge, encumber, or
authorize the issuance of, or otherwise permit to become outstanding, any
additional shares of ATS Common Stock or any other capital stock of any ATS
Entity, or any stock appreciation rights, or any option, warrant, or other
Equity Right; or
(e) adjust, split, combine or reclassify any capital stock of any
ATS Entity or issue or authorize the issuance of any other securities in respect
of or in substitution for shares of ATS Common Stock, or sell, lease, mortgage
or otherwise dispose of or otherwise encumber (x) any shares of capital stock of
any ATS Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another ATS Entity) or (y) any Asset other than in the ordinary
course of business for reasonable and adequate consideration; or
-40-
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in either case have maturities of three
years or less, purchase any securities or make any material investment, either
by purchase of stock of securities, contributions to capital, Asset transfers,
or purchase of any Assets, in any Person other than a wholly owned ATS
Subsidiary, or otherwise acquire direct or indirect control over any Person,
other than in connection with (i) foreclosures in the ordinary course of
business, or (iii) the creation of new wholly owned Subsidiaries organized to
conduct or continue activities otherwise permitted by this Agreement; or
(g) grant any increase in compensation or benefits to the
employees or officers of any ATS Entity, except in accordance with past practice
disclosed in Section 8.2(g) of the ATS Disclosure Memorandum or as required by
Law; pay any severance or termination pay or any bonus other than pursuant to
written policies or written Contracts in effect on the date of this Agreement
and disclosed in Section 8.2(g) of the ATS Disclosure Memorandum; and enter into
or amend any severance agreements with officers of any ATS Entity; grant any
material increase in fees or other increases in compensation or other benefits
to directors of any ATS Entity except in accordance with past practice disclosed
in Section 8.2(g) of the ATS Disclosure Memorandum; or
(h) enter into or amend any employment Contract between any ATS
Entity and any Person (unless such amendment is required by Law) that the ATS
Entity does not have the unconditional right to terminate without Liability
(other than Liability for services already rendered), at any time on or after
the Effective Time; or
(i) adopt any new employee benefit plan of any ATS Entity or
terminate or withdraw from, or make any material change in or to, any existing
employee benefit plans of any ATS Entity other than any such change that is
required by Law or that, in the opinion of counsel, is necessary or advisable to
maintain the tax qualified status of any such plan, or make any distributions
from such employee benefit plans, except as required by Law, the terms of such
plans or consistent with past practice; or
(j) make any significant change in any Tax or accounting methods
or systems of internal accounting controls, except as may be appropriate to
conform to changes in Tax Laws or regulatory accounting requirements or GAAP; or
(k) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of any ATS Entity for
material money damages or restrictions upon the operations of any ATS Entity; or
(l) enter into, modify, amend or terminate any material Contract
(including any loan Contract with an unpaid balance exceeding $10,000) or waive,
release, compromise or assign any material rights or claims.
-41-
8.3 COVENANTS OF PREMIERE. From the date of this Agreement until
---------------------
the earlier of the Effective Time or the termination of this Agreement, unless
the prior written consent of ATS shall have been obtained, and except as
otherwise expressly contemplated herein, Premiere covenants and agrees that it
shall (a) continue to conduct its business and the business of its Subsidiaries
in a manner designed in its reasonable judgment, to enhance the long-term value
of the Premiere Common Stock and the business prospects of the Premiere Entities
and to the extent consistent therewith use all reasonable efforts to preserve
intact the Premiere Entities' core businesses and goodwill with their respective
employees and the communities they serve, and (b) take no action which would (i)
materially adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in [the last sentences] of
Section 10.1(b) or 10.(c), or (ii) materially adversely affect the ability of
any Party to perform its covenants and agreements under this Agreement;
provided, that the foregoing shall not prevent any Premiere Entity from
acquiring any Assets or other businesses or from discontinuing or disposing of
any of its Assets or business if such action is, in the judgment of Premiere,
desirable in the conduct of the business of Premiere and its Subsidiaries.
Premiere further covenants and agrees that it will not, without the prior
written consent of ATS, which consent shall not be unreasonably withheld, amend
the Articles of Incorporation or Bylaws of Premiere, in each case, in any manner
adverse to the holders of ATS Common Stock as compared to rights of holders of
Premiere Common Stock generally as of the date of this Agreement.
8.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give
----------------------------
written notice promptly to the other Party upon becoming aware of the occurrence
or impending occurrence of any event or circumstance relating to it or any of
its Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, an ATS Material Adverse Effect or a Premiere Material Adverse Effect,
as applicable, or (ii) would cause or constitute a material breach of any of its
representations, warranties, or covenants contained herein, and to use its
reasonable efforts to prevent or promptly to remedy the same.
8.5 REPORTS. Each Party and its Subsidiaries shall file all
-------
reports required to be filed by it with Regulatory Authorities between the
date of this Agreement and the Effective Time and shall deliver to the other
Party copies of all such reports promptly after the same are filed. If
financial statements are contained in any such reports filed with the SEC, such
financial statements will fairly present the consolidated financial position of
the entity filing such statements as of the dates indicated and the consolidated
results of operations, changes in shareholders' equity, and cash flows for the
periods then ended in accordance with GAAP (subject in the case of interim
financial statements to normal recurring year-end adjustments that are not
material). As of their respective dates, such reports filed with the SEC will
comply in all material respects with the Securities Laws and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Any financial statements contained in any other reports to another
Regulatory Authority shall be prepared in accordance with Laws applicable to
such reports.
-42-
ARTICLE 9
ADDITIONAL AGREEMENTS
---------------------
9.1 SHAREHOLDER APPROVAL. ATS shall call a Shareholders' Meeting,
--------------------
to be held as soon as reasonably practicable after execution of this Agreement,
for the purpose of voting upon approval of this Agreement and such other related
matters as it deems appropriate. In connection with the Shareholders' Meeting,
(i) the Board of Directors of ATS shall recommend to its shareholders the
approval of the matters submitted for approval, and (ii) the Board of Directors
and officers of ATS shall use their reasonable efforts to obtain such
shareholders' approval.
9.2 EXCHANGE LISTING. Premiere shall use its reasonable efforts to
----------------
list, prior to the Effective Time, on the Nasdaq National Market the shares of
Premiere Common Stock to be issued to the holders of ATS Common Stock pursuant
to the Merger, and Premiere shall give all notices and make all filings with the
NASD required in connection with the transactions contemplated herein.
9.3 APPLICATIONS; ANTITRUST NOTIFICATION. Premiere shall prepare
------------------------------------
and file, and ATS and the Shareholders shall cooperate in the preparation and,
where appropriate, filing of, applications with all Regulatory Authorities
having jurisdiction over the transactions contemplated by this Agreement seeking
the requisite Consents necessary to consummate the transactions contemplated by
this Agreement. To the extent required by the HSR Act, each of the Parties will
file with the United States Federal Trade Commission and the United States
Department of Justice the notification and report form required for the
transactions contemplated hereby and any supplemental or additional information
which may reasonably be requested in connection therewith pursuant to the HSR
Act and will comply in all material respects with the requirements of the HSR
Act. The Parties shall deliver to each other copies of all filings,
correspondence and orders to and from all Regulatory Authorities in connection
with the transactions contemplated hereby.
9.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
--------------------------
conditions of this Agreement, Premiere, Subsidiary and ATS shall execute and
file the Articles of Merger with the Secretary of State of the State of Missouri
in connection with the Closing.
9.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms
-------------------------------------
and conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including using its reasonable efforts to lift
or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
referred to in Article 10; provided, that nothing herein shall preclude either
Party from exercising its rights under this Agreement. Each Party shall use, and
shall cause each of its Subsidiaries to use, its reasonable efforts to obtain
all Consents necessary or desirable for the consummation of the transactions
contemplated by this Agreement.
-43-
9.6 INVESTIGATION AND CONFIDENTIALITY.
---------------------------------
(a) Prior to the Effective Time, ATS shall keep Premiere
advised of all material developments relevant to its business and to
consummation of the Merger and shall permit Premiere to make or cause to be made
such investigation of the business and properties of ATS and its Subsidiaries
and of their respective financial and legal conditions as Premiere reasonably
requests, provided that such investigation shall be reasonably related to the
transactions contemplated hereby and shall not interfere unnecessarily with
normal operations. No investigation by a Party shall affect the representations
and warranties of the other Party.
(b) In addition to the Parties' respective obligations under
the Confidentiality Agreement, which is hereby reaffirmed and adopted, and
incorporated by reference herein each Party shall, and shall cause its advisers
and agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Effective Time, each Party shall promptly return or certify the destruction of
all documents and copies thereof, and all work papers containing confidential
information received from the other Party.
(c) Each Party agrees to give the other Party notice as soon
as practicable after any determination by it of any fact or occurrence relating
to the other Party which it has discovered through the course of its
investigation and which represents, or is reasonably likely to represent, either
a material breach of any representation, warranty, covenant or agreement of the
other Party or which has had or is reasonably likely to have an ATS Material
Adverse Effect or a Premiere Material Adverse Effect, as applicable.
9.7 PRESS RELEASES. Prior to the Effective Time, ATS and Premiere
--------------
shall consult with each other as to the form and substance of any press release
or other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 9.7
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
9.8 CERTAIN ACTIONS. Except with respect to this Agreement and
---------------
the transactions contemplated hereby, no ATS Entity nor any Shareholder nor any
Affiliate thereof nor any Representatives thereof retained by any ATS Entity
shall directly or indirectly solicit any Acquisition Proposal by any Person. No
ATS Entity, any Shareholder or any Affiliate or Representative thereof shall
furnish any non-public information that it is not legally obligated to furnish,
negotiate with respect to, or enter into any Contract with respect to, any
Acquisition Proposal. Each Shareholder and ATS shall promptly advise Premiere
following the receipt of any Acquisition Proposal and the details thereof, and
advise Premiere of any developments with respect to such Acquisition Proposal
promptly upon the occurrence thereof. Each Shareholder and ATS shall (i)
immediately cease and cause to be terminated any existing activities,
discussions
-44-
or negotiations with any Persons conducted heretofore with respect to any of the
foregoing, and (ii) direct and use its reasonable efforts to cause all of its
Affiliates and Representatives not to engage in any of the foregoing.
9.9 SHAREHOLDER RELEASES. Except as set forth in Section 9.9 of
--------------------
the ATS Disclosure Memorandum, each Shareholder hereby releases, remises, and
forever discharges each ATS Entity and their respective Representatives,
Affiliates, employees, directors, officers and insurers, and their respective
successors and assigns, and each of them (hereinafter individually and
collectively, the "Releases") of and from any and all claims, demands, debts,
accounts, covenants, agreements, obligations, costs, expenses, actions or causes
of action of every nature, character or description, now accrued or which may
hereafter accrue, without limitation of law, equity or otherwise, based in whole
or in part on any facts, conduct, activities, transactions, events or
occurrences known or unknown, which have or allegedly have existed, occurred,
happened, arisen or transpired from the beginning of time to the Effective Time
(the "Released Claims"). Each Shareholder represents and warrants that no
Released Claim released herein has been assigned, expressly, impliedly, or by
operation of Law, and that all Released Claims of such Shareholder released
herein are owned by such Shareholder, who has the sole authority to release
them. Each Shareholder agrees that such holder shall forever refrain and
forebear from commencing, instituting or prosecuting any lawsuit action or
proceeding, judicial, administrative, or otherwise, or otherwise attempting to
collect or enforce any Released Claims which are released and discharged herein.
9.10 TAX TREATMENT. Each of the Parties undertakes and agrees to
-------------
use its reasonable efforts to cause the Merger, and to take no action which
would cause the Merger not, to qualify for or as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code for federal income tax
purposes.
9.11 STATE TAKEOVER LAWS. Each ATS Entity and each Shareholder
-------------------
shall take all necessary steps to exempt the transactions contemplated by this
Agreement from, or if necessary to challenge the validity or applicability of,
any applicable Takeover Law, including any applicable section of the BCA.
9.12 CHARTER PROVISIONS. Each ATS Entity shall take all necessary
------------------
action to ensure that the entering into of this Agreement and the consummation
of the Merger and the other transactions contemplated hereby do not and will not
result in the grant of any rights to any Person under the Articles of
Incorporation, Bylaws or other governing instruments of any ATS Entity or
restrict or impair the ability of Premiere or any of its Subsidiaries to vote,
or otherwise to exercise the rights of a shareholder with respect to, shares of
any ATS Entity that may be directly or indirectly acquired or controlled by
them.
9.13 ASSIGNMENT OF CONTRACTS AND RIGHTS. Anything in this
----------------------------------
Agreement to the contrary notwithstanding, this Agreement will not constitute an
agreement to assign any Claim, Contractual Obligation, Governmental
Authorization, Lease, Private Authorization, commitment, sales, service or
purchase order, or any claim, right or benefit arising thereunder or resulting
therefrom, if the Merger or the transactions would be deemed an attempted
assignment thereof
-45-
without the required consent of a third party thereto and would constitute a
breach thereof or in any way affect the rights of ATS or Sub thereunder. If such
consent is not obtained, or if consummation of the Merger and the transactions
would affect the rights of ATS thereunder so that the Surviving Corporation
would not in fact receive all such rights, ATS and the Shareholders will
cooperate with Premiere in any arrangement designed to provide for the benefits
thereof to the Surviving Corporation, including subcontracting, sub-licensing or
subleasing to the Surviving Corporation or enforcement for the benefit of the
Surviving Corporation of any and all rights of ATS or its Subsidiaries against a
third party thereto arising out of the breach or cancellation by such third
party or otherwise. Any assumption by the Surviving Corporation of ATS's rights
thereunder by operation of law in connection with the Merger which will require
the consent or approval of any third party will be made subject to such consent
or approval being obtained.
9.14 TAX RETURNS. The Shareholder Representatives will cause all
-----------
Tax Returns of ATS and its Subsidiaries with respect to taxable periods ending
on or before the Effective Time to be prepared in a manner consistent with past
practices and Premiere will file such Tax Returns promptly upon receipt thereof
from the Shareholder Representative or ATS. At least thirty days before the due
date (including any extensions) for any such Tax Returns, the Shareholder
Representative or the Company will provide drafts of such Tax Returns to
Premiere for its review and comment (which reasonable comments will be
incorporated into the final Tax Returns), and Premiere will cooperate with the
Shareholder Representative and provide the Shareholder Representative with
access to any books and records reasonably necessary for their preparation of
such draft Tax Returns. Premiere will file no amended Tax Returns with respect
to ATS and the Subsidiaries for any taxable period ending on or before the
Effective Time if the Shareholder Representative reasonably objects thereto and
furnishes Premiere with indemnification satisfactory in form and substance to
it, including without limitation, indemnification for all interest, penalties
and expenses resulting from the failure to amend such Tax Returns and all
proceedings in connection therewith.
9.15 DISTRIBUTIONS. ATS and Premiere acknowledge and agree that
-------------
ATS contemplates that (i) prior to the Effective Date it will make certain
distributions to Shareholders, employees of and consultants to ATS. ATS agrees
that distributions will be made by ATS only to the extent provided in Section
9.15 of the ATS Disclosure Memorandum, and provided that such recipient executes
a release in favor of the Releases in substance as described in Section 9.9
hereof and an invention assignment agreement in the form provided by Premiere to
ATS.
ARTICLE 10
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
-------------------------------------------------
10.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
---------------------------------------
obligations of each Party to perform this Agreement and consummate the Merger
and the other transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by both Parties pursuant to Section
13.6:
-46-
(A) SHAREHOLDER APPROVAL. The shareholders of ATS shall have
--------------------
[adopted][approved] this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent required by Law
or by the provisions of any governing instruments.
(B) REGULATORY APPROVALS. All waiting periods required by Law shall
--------------------
have been terminated or expired.
(C) LEGAL PROCEEDINGS. No court or governmental or regulatory
-----------------
authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Law or Order (whether temporary, preliminary or
permanent) or taken any other action which prohibits, restricts or makes illegal
consummation of the transactions contemplated by this Agreement.
(D) EXCHANGE LISTING. The shares of Premiere Common Stock issuable
----------------
pursuant to the Merger shall have been approved for listing on the Nasdaq
National Market.
(E) REGISTRATION RIGHTS. Premiere and each of the Shareholders shall
-------------------
have executed and delivered the Stock Restriction and Registration Rights
Agreement, in the form attached hereto as Exhibit 2.
---------
10.2 CONDITIONS TO OBLIGATIONS OF PREMIERE. The obligations of
-------------------------------------
Premiere to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Premiere pursuant to Section 13.6(a):
(A) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
------------------------------
10.2(a), the accuracy of the representations and warranties of ATS and the
Shareholders set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as though all
such representations and warranties had been made on and as of the Effective
Time (provided that representations and warranties which are confined to a
specified date shall speak only as of such date). There shall not exist
inaccuracies in the representations and warranties of ATS and the Shareholders
set forth in this Agreement such that the aggregate effect of such inaccuracies
has, or is reasonably likely to have, an ATS Material Adverse Effect; provided
that, for purposes of this sentence only, those representations and warranties
which are qualified by references to "material" or "Material Adverse Effect" or
to the "Knowledge" of any Person shall be deemed not to include such
qualifications.
(B) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
---------------------------------------
agreements and covenants of ATS and the Shareholders to be performed and
complied with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and complied
with in all material respects.
-47-
(C) CERTIFICATES. Each of the Shareholders and ATS shall have
------------
delivered to Premiere (i) a certificate, dated as of the Effective Time and
signed on its behalf by its chief executive officer and its assistant secretary,
to the effect that the conditions set forth in Section 10.1 as relates to ATS
and in Section 10.2(a) and 10.2(b) have been satisfied, and (ii) certified
copies of resolutions duly adopted by ATS's Board of Directors and Shareholders
evidencing the taking of all corporate action necessary to authorize the
execution, delivery and performance of this Agreement, and the consummation of
the transactions contemplated hereby, all in such reasonable detail as Premiere
and its counsel shall request.
(D) REGULATORY APPROVALS AND CONSENTS. All Consents of, filings and
---------------------------------
registrations with, and notifications to, all Regulatory Authorities required
for consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by Law shall have
expired. No Consent obtained from any Regulatory Authority which is necessary
to consummate the transactions contemplated hereby shall be conditioned or
restricted in a manner (including requirements relating to the raising of
additional capital or the disposition of Assets) which in the reasonable
judgment of the Board of Directors of Premiere would so materially adversely
impact the economic or business benefits of the transactions contemplated by
this Agreement that, had such condition or requirement been known, Premiere
would not, in its reasonable judgment, have entered into this Agreement. ATS
shall have obtained any and all Consents required for consummation of the Merger
(other than those referred to in Section 10.1(b)) or for the preventing of any
Default under any Contract or Permit of such Party which, if not obtained or
made, is reasonably likely to have, individually or in the aggregate, an ATS
Material Adverse Effect. No Consent so obtained which is necessary to consummate
the transactions contemplated hereby shall be conditioned or restricted in a
manner which in the reasonable judgment of the Board of Directors of Premiere
would so materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement that, had such condition or
requirement been known, such Party would not, in its reasonable judgment, have
entered into this Agreement.
(E) EMPLOYMENT AGREEMENTS. Each of the persons identified in Section
---------------------
10.2(e)) of the ATS Disclosure Memorandum shall have executed and delivered to
Premiere an employment agreement in substantially the form of Exhibit 3.
---------
(F) OPINION OF COUNSEL. Premiere shall have received an opinion of
------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to ATS and the Shareholders , dated as of the
Closing, in form reasonably satisfactory to Premiere, as to the matters set
forth in Exhibit 4.
---------
(G) ACCOUNTING TREATMENT. There shall have been no reasonable
--------------------
determination by the Board of Directors of Premiere that the consummation of the
transactions contemplated by this Agreement is not in the best interests of
Premiere or its shareholders by reason of any reasonable determination by the
Board of Directors of Premiere that consummation of the Merger and the other
transactions contemplated by this Agreement would result in the creation of more
than $46,000,000 of goodwill or other intangible assets on the books of
Premiere, as determined in accordance with GAAP.
-48-
(H) NONCOMPETITION AGREEMENTS. Each of the persons identified in
-------------------------
Section 9.2(h) of the ATS Disclosure Memorandum shall have executed and
delivered to Premiere a Noncompetition Agreement in substantially the form of
Exhibit 5.
---------
(I) ESCROW AGREEMENT. ATS, the Shareholders and the Escrow Agent
----------------
shall have executed and delivered the Escrow Agreement.
(J) CLAIMS. No Litigation shall be pending or threatened at any time
------
prior to or on the Closing Date before or by any Authority or by any other
Person seeking to restrain or prohibit, or damages or other relief in connection
with, the execution and delivery of this Agreement or the consummation of the
Merger and the Transactions or which might in the reasonable judgment of
Premiere have any ATS Material Adverse Effect or, assuming consummation of the
Merger, Premiere and its Subsidiaries taken as a whole.
(K) FINANCIAL STATEMENTS. Premiere shall have received from its
--------------------
accountants, a certificate or letter, dated the Closing Date, to the effect
that, on the basis of a limited review in accordance with the standards for such
reviews promulgated by the American Institute of Certified Public Accountants as
outlined in Statement of Standards of accounting and Review Services No. 1, they
have no reason to believe that the unaudited ATS Financial Statements were not
prepared in accordance with GAAP and practices consistent with those followed in
the preparation of the audited ATS Financial Statements audited by the
accountants as contemplated by Section 5.6, or that any material modifications
of such unaudited ATS Financial Statements are required for a fair presentation
of the financial position or results of operations or changes in financial
position of ATS or that during the period from the last day covered by the most
recent ATS Financial Statements prepared by the accountants as contemplated by
Section 5.6 to a date not more than five (5) days prior to the Closing Date,
there has been any adverse change in the financial position or results of the
operations of ATS or ATS and its Subsidiaries taken as a whole.
(L) ENVIRONMENTAL AUDITS. Premiere shall have received copies of any
--------------------
environmental audits ATS has received in respect of all real property owned or
leased by ATS or any of its Subsidiaries. Premiere, in its sole discretion and
at its sole expense, may engage an independent environmental engineer to perform
such audits and the results thereof shall not be materially inconsistent with
the representations and warranties set forth in Section 5.12.
(M) RESIGNATIONS. Each of the directors of ATS and each of its
------------
Subsidiaries shall have submitted his or her unqualified written resignation,
dated as of the Effective Time.
(N) TERMINATION OF CERTAIN AGREEMENTS. Each of the following
---------------------------------
agreements shall have been terminated:
(i) Shareholders' Agreement dated October 2, 1997 by and between
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ and ATS;
-49-
(ii) Shareholders Agreement dated as of February 9, 1989,
by and among ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ATS;
(iii) ATS Stock Option Agreements for each of ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇;
(iv) Employment Agreement, dated as of September 29, 1997,
by and between ATS and ▇▇▇ ▇▇▇▇▇▇▇▇▇; and
(v) Stock Issuance and Restrictive Stock Agreement, dated
as of August 2, 1995, by and between ATS and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
(O) RELATED PARTY OBLIGATIONS. All loans or advances by any ATS
-------------------------
Entity to any Shareholder, employee or related entity shall have been repaid in
full.
(P) TAX MATTERS. Premiere shall have received a written
-----------
opinion of counsel from ▇▇▇▇▇▇ & Bird LLP, in form reasonably satisfactory to
such Parties (the "Tax Opinion"), to the effect that (i) the Merger will
constitute a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code, and (ii) Premiere will recognize no gain or loss as a consequence
of the Merger (except for amounts resulting from any required change in
accounting methods and any income and deferred gain recognized pursuant to
Treasury regulations issued under Section 1502 of the Internal Revenue Code). In
rendering such Tax Opinion, such counsel shall be entitled to rely upon
representations of the Shareholders and of officers of ATS and Premiere
reasonably satisfactory in form and substance to such counsel.
(Q) IRS FORM W-9. Premiere shall have received from each
------------
Shareholder such Shareholder's current IRS Form W-9.
10.3 CONDITIONS TO OBLIGATIONS OF ATS AND THE SHAREHOLDERS. The
-----------------------------------------------------
obligations of ATS and the Shareholders to perform this Agreement and consummate
the Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by ATS pursuant to
Section 13.6(b):
(A) REPRESENTATIONS AND WARRANTIES. For purposes of this
------------------------------
Section 10.3(a), the accuracy of the representations and warranties of Premiere
set forth in this Agreement shall be assessed as of the date of this Agreement
and as of the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the Effective Time
(provided that representations and warranties which are confined to a specified
date shall speak only as of such date). There shall not exist inaccuracies in
the representations and warranties of Premiere set forth in this Agreement such
that the aggregate effect of such inaccuracies has, or is reasonably likely to
have, a Premiere Material Adverse Effect; provided that, for purposes of this
sentence only, those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" or to the "Knowledge" of
any Person shall be deemed not to include such qualifications.
-50-
(B) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
---------------------------------------
agreements and covenants of Premiere to be performed and complied with pursuant
to this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all material
respects.
(C) CERTIFICATES. Premiere shall have delivered to ATS (i) a
------------
certificate, dated as of the Effective Time and signed on its behalf by its
executive vice president of strategic development and its senior vice president
of finance and legal, to the effect that the conditions set forth in Section
10.1 as relates to Premiere and in Section 10.3(a) and 10.3(b) have been
satisfied, and (ii) certified copies of resolutions duly adopted by Premiere's
Board of Directors and Sub's Board of Directors and sole shareholder evidencing
the taking of all corporate action necessary to authorize the execution,
delivery and performance of this Agreement, and the consummation of the
transactions contemplated hereby, all in such reasonable detail as ATS and its
counsel shall request.
(D) OPINION OF COUNSEL. ATS shall have received an opinion of ▇▇▇▇▇▇
------------------
& Bird LLP, counsel to Premiere, dated as of the Effective Time, in form
reasonably acceptable to ATS, as to the matters set forth in Exhibit 6.
---------
ARTICLE 11
INDEMNIFICATION
---------------
11.1 AGREEMENT OF INDEMNITORS TO INDEMNIFY. Subject to the terms and
-------------------------------------
conditions of this Article 11, Indemnitors jointly and severally agree to
indemnify, defend, and hold harmless Indemnitees, and each of them, from,
against, for and in respect of any and all Losses asserted against, or paid,
suffered or incurred by, an Indemnitee and resulting from, based upon, or
arising out of:
(a) the inaccuracy, untruth, incompleteness or breach of any
representation or warranty of any Shareholder or ATS contained in or made
pursuant to this Agreement or in any certificate, Schedule, or Exhibit furnished
by ATS or any Shareholder in connection herewith;
(b) a breach of or failure to perform any covenant or agreement of
Shareholders or ATS made in this Agreement; and
(c) any claim related to the infringement by ATS of any patents
issued to ▇▇▇▇▇▇ ▇▇▇▇▇▇ (including patents assigned by ▇▇▇▇▇▇ ▇▇▇▇▇▇ to ▇▇▇▇▇▇
Communications, Inc.);
(d) any liability for taxes on account of periods ending on or prior
to the Effective Time, whether or not such liability is a breach of Section 5.9
or is disclosed on Section 5.9 or in the ATS Financial Statements;
-51-
(e) any liability related to any ATS Benefit Plan on account of
periods ending on or prior to the Effective Time, whether or not such liability
is in breach of Section 5.15 or is disclosed in Section 5.15 or in the ATS
Financial Statements;
(f) any claim by any recipient of any distribution described on
Schedule 3.1(d) of the ATS Disclosure Memorandum that would have been released
or discharged had such recipient executed a release as described in Section 9.15
hereof.
11.2 PROCEDURES FOR INDEMNIFICATION.
------------------------------
(a) An Indemnification Claim shall be made by an Indemnitee by
delivery of a written notice to the Shareholder Representative requesting
indemnification and specifying the basis on which indemnification is sought and
the amount of asserted Losses and, in the case of a Third Party Claim,
containing (by attachment or otherwise) such other information as such
Indemnitee shall have concerning such Third Party Claim.
(b) If the Indemnification Claim involves a Third Party Claim
the procedures set forth in Section 11.3 shall be observed by the Indemnitee and
the Shareholder Representative.
(c) If the Indemnification Claim involves a matter other than a
Third Party Claim, the Shareholder Representative shall have thirty (30) days to
object to such Indemnification Claim by delivery of a written notice of such
objection to such Indemnitee specifying in reasonable detail the basis for such
objection. Failure to timely so object shall constitute a final and binding
acceptance of the Indemnification Claim by the Shareholder Representative on
behalf of all Indemnitors, and the Indemnification Claim shall be paid in
accordance with subsection (d) hereof. If an objection is timely interposed by
the Shareholder Representative and the dispute is not resolved by such
Indemnitee and the Shareholder Representative within fifteen (15) days from the
date the Indemnitee receives such objection, such dispute shall be resolved by
arbitration as provided in Section 11.11.
(d) Upon determination of the amount of an Indemnification
Claim, whether by agreement between the Shareholder Representative and the
Indemnitee or by an arbitration award or by any other final adjudication, the
Indemnitors shall pay the amount of such Indemnification Claim within ten (10)
days of the date such amount is determined.
11.3 THIRD PARTY CLAIMS. The obligations and liabilities of the
------------------
parties hereunder with respect to a Third Party Claim shall be subject to the
following terms and conditions:
(a) The Indemnitee shall give the Indemnitor Representative
written notice of a Third Party Claim promptly after receipt by the Indemnitee
of notice thereof, and the Indemnitor Representative, on behalf of the
Indemnitors, may undertake the defense, compromise and settlement thereof by
representatives of its own choosing reasonably acceptable to the Indemnitee. The
failure of the Indemnitee to notify the Indemnitor Representative of such claim
-52-
shall not relieve the Indemnitors of any liability that they may have with
respect to such claim except to the extent the Indemnitor Representative
demonstrates that the defense of such claim is prejudiced by such failure. The
assumption of the defense, compromise and settlement of any such Third Party
Claim by the Indemnitor Representative shall be an acknowledgment of the
obligation of the Indemnitors to indemnify the Indemnitee with respect to such
claim hereunder. If the Indemnitee desires to participate in, but not control,
any such defense, compromise and settlement, it may do so at its sole cost and
expense. If, however, the Indemnitor Representative fails or refuses to
undertake the defense of such Third Party Claim within ten (10) days after
written notice of such claim has been given to the Indemnitor Representative by
the Indemnitee, the Indemnitee shall have the right to undertake the defense,
compromise and settlement of such claim with counsel of its own choosing. In the
circumstances described in the preceding sentence, the Indemnitee shall,
promptly upon its assumption of the defense of such claim, make an
Indemnification Claim as specified in Section 10.2 which shall be deemed an
Indemnification Claim that is not a Third Party Claim for the purposes of the
procedures set forth herein.
(b) If, in the reasonable opinion of the Indemnitee, any Third Party
Claim or the litigation or resolution thereof involves an issue or matter which
could have a material adverse effect on the business, operations, assets,
properties or prospects of the Indemnitee (including, without limitation, the
administration of the tax returns and responsibilities under the tax laws of the
Indemnitee), the Indemnitee shall have the right to control the defense,
compromise and settlement of such Third Party Claim undertaken by the Indemnitor
Representative, and the costs and expenses of the Indemnitee in connection
therewith shall be included as part of the indemnification obligations of the
Indemnitors hereunder. If the Indemnitee shall elect to exercise such right, the
Indemnitor Representative shall have the right to participate in, but not
control, the defense, compromise and settlement of such Third Party Claim at its
sole cost and expense.
(c) No settlement of a Third Party Claim involving the asserted
liability of the Indemnitors under this Article shall be made without the prior
written consent by or on behalf of the Indemnitor Representative, which consent
shall not be unreasonably withheld or delayed. Consent shall be presumed in the
case of settlements of $20,000 or less where the Indemnitor Representative has
not responded within five business days of notice of a proposed settlement. If
the Indemnitor Representative assumes the defense of such a Third Party Claim,
(a) no compromise or settlement thereof may be effected by the Indemnitor
Representative without the Indemnitee's consent unless (i) there is no finding
or admission of any violation of law or any violation of the rights of any
person and no effect on any other claim that may be made against the Indemnitee,
(ii) the sole relief provided is monetary damages that are paid in full by the
Indemnitors, and (iii) the compromise or settlement includes, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the
Indemnitee of a release, in form and substance satisfactory to the Indemnitee,
from all liability in respect of such Third Party Claim, and (b) the Indemnitee
shall have no liability with respect to any compromise or settlement thereof
effected without its consent.
(d) In connection with the defense, compromise or settlement of any
Third Party Claim, the parties to this Agreement shall execute such powers of
attorney as may
-53-
reasonably be necessary or appropriate to permit participation of counsel
selected by any party hereto and, as may reasonably be related to any such claim
or action, shall provide access to the counsel, accountants and other
representatives of each party during normal business hours to all properties,
personnel, books, tax records, contracts, commitments and all other business
records of such other party and will furnish to such other party copies of all
such documents as may reasonably be requested (certified, if requested).
11.4 OTHER RIGHTS AND REMEDIES NOT AFFECTED. The rights of the
--------------------------------------
Indemnitees under this Article 11 are independent of and in addition to such
rights and remedies as the Indemnitees may have at law or in equity or otherwise
based upon any inaccuracy, untruth, incompleteness or breach of any
representation or warranty of any Indemnitor contained herein or in any
certificate, schedule or exhibit furnished by such party in connection herewith,
or based upon the failure of an Indemnitor to perform any covenant, agreement or
undertaking required by the terms hereof to be performed by such Indemnitor,
including without limitation the right to seek specific performance, recession
or restitution, none of which rights or remedies shall be affected or diminished
hereby.
11.5 SURVIVAL. All representations, warranties and agreements
--------
contained in this Agreement or in any certificate delivered pursuant to this
Agreement shall survive the Closing notwithstanding any investigation conducted
with respect thereto or any Knowledge acquired as to the accuracy or inaccuracy
of any such representation or warranty, and will remain operative and in full
force and effect as follows: (i) Section 5.9, Section 5.15 and Section 5.35
until sixty (60) days after the applicable statute of limitations, as the same
may be extended from time to time, has terminated; (ii) Section 5.12 until the
sixth anniversary date of this Agreement; and (iii) all other Sections, until
the twenty-four month anniversary of the Closing Date.
11.6 LIMITATIONS AS TO AMOUNT.
------------------------
(a) Indemnitors shall have no liability with respect to the
matters described in Section 11.1 until the total of all Losses with respect
thereto exceeds $50,000 in which event the Indemnitors shall be obligated to
indemnify the Indemnitees as provided in this Article 11 for all such Losses.
The limitations set forth in this Section shall not apply to any intentional
misrepresentation or breach of warranty of any Indemnitor or any intentional
failure to perform or comply with any covenant or agreement of any Indemnitor,
and the Indemnitors shall be liable for all Losses with respect thereto.
(b) In no event shall the aggregate liability of the Indemnitors
under this Article 11 exceed the Aggregate Merger Consideration received by the
Indemnitors.
11.7 TAX EFFECT AND INSURANCE. The liability of the Indemnitors
------------------------
with respect to any Indemnification Claim shall be reduced by the tax benefit
actually realized and any insurance proceeds received by the Indemnitees as a
result of any Losses upon which such Indemnification Claim is based, and shall
include any tax detriment actually suffered by the Indemnitees as a result of
such Losses. The amount of any such tax benefit or detriment shall be determined
by taking into account the effect, if any and to the extent determinable, of
timing
-54-
differences resulting from the acceleration or deferral of items of gain or loss
resulting from such Losses and shall otherwise be determined so that payment by
the Indemnitors of the Indemnification Claim, as adjusted to give effect to any
such tax benefit or detriment, will make the Indemnitee as economically whole as
is reasonably practical with respect to the Losses upon which the
Indemnification Claim is based. Any dispute as to the amount of such tax benefit
or detriment shall be resolved by arbitration as provided in Section 11.11 of
this Agreement.
11.8 ESCROW. Upon notice to the Shareholder Representative
------
specifying in reasonable detail the basis therefor, the Indemnitee may give
notice of a Claim in such amount under the Escrow Agreement. Neither the
exercise of nor the failure to exercise such right of set-off or to give a
notice of a Claim under the Escrow Agreement shall constitute an election of
remedies nor limit Indemnitee in any manner in the enforcement of any other
remedies that may be available to it.
11.9 SUBROGATION. Upon payment in full of any Indemnification
-----------
Claim, whether such payment is effected by set-off or otherwise, or the payment
of any judgment or settlement with respect to a Third Party Claim, the
Indemnitors shall be subrogated to the extent of such payment to the rights of
the Indemnitee against any person or entity with respect to the subject matter
of such Indemnification Claim or Third Party Claim.
11.10 APPOINTMENT OF SHAREHOLDER REPRESENTATIVE. Each Indemnitor
-----------------------------------------
constitutes and appoints the Shareholder Representative as his or her true and
lawful attorney-in-fact to act for and on behalf of such Indemnitor in all
matters relating to or arising out of this Article 10 and the liability or
asserted liability of such Indemnitor hereunder, including specifically, but
without limitation, accepting and agreeing to the liability of such Indemnitor
with respect to any Indemnification Claim, objecting to any Indemnification
Claim, disputing the liability of such Indemnitor, or the amount of such
liability, with respect to any Indemnification Claim and prosecuting and
resolving such dispute as herein provided, accepting the defense, compromise and
settlement of any Third Party Claim on behalf of such Indemnitor or refusing to
accept the same, settling and compromising the liability of such Indemnitor
hereunder, instituting and prosecuting such actions (including arbitration
proceedings) as the Shareholder Representative shall deem appropriate in
connection with any of the foregoing, retaining counsel, accountants, appraisers
and other advisers in connection with any of the foregoing, all for the account
of the Indemnitor, such Indemnitor agreeing to be fully bound by the acts,
decisions and agreements of the Shareholder Representative taken and done
pursuant to the authority herein granted. Each Indemnitor hereby agrees to
indemnify and to save and hold harmless the Shareholder Representative from any
liability incurred by the Shareholder Representative based upon or arising out
of any act, whether of omission or commission, of the Shareholder Representative
pursuant to the authority herein granted, other than acts, whether of omission
or commission, of the Shareholder Representative that constitute gross
negligence or willful misconduct in the exercise by the Shareholder
Representative of the authority herein granted.
11.11 ARBITRATION. All disputes arising under this Article 10
-----------
(other than claims in equity) shall be resolved by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
Arbitration shall be by a single arbitrator experienced in
-55-
the matters at issue and selected by the Shareholder Representative and Premiere
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitration shall be held in such place in Atlanta, Georgia as
may be specified by the arbitrator (or any place agreed to by the Shareholder
Representative, Premiere and the arbitrator). The decision of the arbitrator
shall be final and binding as to any matters submitted under this Article 11;
provided, however, if necessary, such decision and satisfaction procedure may be
enforced by either the Shareholder Representative or Premiere in any court of
record having jurisdiction over the subject matter or over any of the parties to
this Agreement. All costs and expenses incurred in connection with any such
arbitration proceeding (including reasonable attorneys fees) shall be borne by
the party against which the decision is rendered, or, if no decision is
rendered, such costs and expenses shall be borne equally by the Indemnitors as
one party and the Indemnitees as the other party. If the arbitrator's decision
is a compromise, the determination of which party or parties bears the costs and
expenses incurred in connection with any such arbitration proceeding shall be
made by the arbitrator on the basis of the arbitrator's assessment of the
relative merits of the parties' positions.
ARTICLE 12
TERMINATION
-----------
12.1 TERMINATION. Notwithstanding any other provision of this
-----------
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of ATS, this Agreement may be terminated and the Merger abandoned
at any time prior to the Effective Time:
(a) By mutual consent of Premiere and ATS; or
(b) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a material breach by the
other Party of any representation or warranty contained in this Agreement which
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching Party of such breach and which breach is reasonably
likely, in the opinion of the non-breaching Party, to have, individually or in
the aggregate, an ATS Material Adverse Effect or a Premiere Material Adverse
Effect, as applicable, on the breaching Party; or
(c) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a material breach by the
other Party of any covenant or agreement contained in this Agreement which
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching Party of such breach; or
(d) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event any Consent of any
Regulatory Authority required for consummation of the Merger and the other
transactions contemplated hereby shall have been denied by final nonappealable
action of such authority or if any action taken by such authority is not
appealed within the time limit for appeal; or
-56-
(e) By either Party in the event that the Merger shall not
have been consummated by May 31, 1998, if the failure to consummate the
transactions contemplated hereby on or before such date is not caused by any
breach of this Agreement by the Party electing to terminate pursuant to this
Section 12.1(e); or
(f) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event that any of the conditions
precedent to the obligations of such Party to consummate the Merger cannot be
satisfied or fulfilled by the date specified in Section 12.1(e).
12.2 EFFECT OF TERMINATION. In the event of the termination and
---------------------
abandonment of this Agreement pursuant to Section 12.1, this Agreement shall
become void and have no effect, except that (i) the provisions of this Section
12.2 and Article 12 and Section 8.6(b) shall survive any such termination and
abandonment, and (ii) a termination pursuant to Sections 12.1(b), 12.1(c) or
12.1(f) shall not relieve the breaching Party from Liability for an uncured
willful breach of a representation, warranty, covenant, or agreement giving rise
to such termination.
ARTICLE 13
MISCELLANEOUS
-------------
13.1 DEFINITIONS.
-----------
(a) Except as otherwise provided herein, the capitalized terms
set forth below shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"ACQUISITION PROPOSAL" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger, acquisition of
all of the stock or assets of, or other business combination involving the
acquisition of such Party or any of its Subsidiaries or the acquisition of
a substantial equity interest in, or a substantial portion of the assets
of, such Party or any of its Subsidiaries.
"ADVERSE, ADVERSELY" when used alone or in conjunction with
other terms (including without limitation "Affect," "Change," and "Effect")
means, with respect to ATS, Premiere, or Sub, as the case may be, any Event
which could reasonably be expected to (a) adversely affect the validity or
enforceability of this Agreement or any Collateral Document executed or
required to be executed pursuant hereto or thereto, or (b) adversely affect
the business, operations, management, properties or the condition
(financial or other), or results of operation of ATS, Premiere or Sub, as
the case may be, or (c) impair ATS's, Premiere's or Sub's ability to
fulfill its obligations under the terms of this Agreement or any Collateral
Document executed or required to be executed pursuant
-57-
hereto or thereto, or (d) adversely affect the aggregate rights and
remedies of ATS or Premiere under this Agreement and any Collateral
Document executed or required to be executed pursuant hereto or thereto, in
all cases, unless otherwise specifically set forth, in a material respect
or manner or to a material degree.
"AFFILIATE" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person; (ii) any officer,
director, partner, employer, or direct or indirect beneficial owner of any
10% or greater equity or voting interest of such Person; or (iii) any other
Person for which a Person described in clause (ii) acts in any such
capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
including the Exhibits delivered pursuant hereto and incorporated herein by
reference.
"ARTICLES OF MERGER" shall mean the Articles of Merger to be
executed by ATS and filed with the Secretary of State of the State of
Missouri relating to the Merger as contemplated by Section 1.1.
"ASSETS" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character and
description, whether real, personal or mixed, tangible or intangible,
accrued or contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in part, whether or
not carried on the books and records of such Person, and whether or not
owned in the name of such Person or any Affiliate of such Person and
wherever located.
"ATS COMMON STOCK" shall mean the $.00125 par value common stock
of ATS.
"ATS DISCLOSURE MEMORANDUM" shall mean the written information
entitled "American Teleconferencing Services, Ltd Disclosure Memorandum"
delivered prior to the date of this Agreement to Premiere describing in
reasonable detail the matters contained therein and, with respect to each
disclosure made therein, specifically referencing each Section of this
Agreement under which such disclosure is being made. Information disclosed
with respect to one Section shall not be deemed to be disclosed for
purposes of any other Section not specifically referenced with respect
thereto.
"ATS ENTITIES" shall mean, collectively, ATS and all ATS
Subsidiaries.
"ATS FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of ATS as of
June 30, 1997 and 1996, and the related statements of income, changes in
shareholders' equity, and cash flows (including related notes and
schedules, if any) for each of the three fiscal years ended June 30, 1997,
1996 and 1995, and (ii) the consolidated balance sheets of ATS (including
related notes and schedules, if any) and related statements of income,
changes
-58-
in shareholders' equity, and cash flows (including related notes and
schedules, if any) with respect to periods ended subsequent to June 30,
1997.
"ATS MATERIAL ADVERSE EFFECT" shall mean an event, change or
occurrence which, individually or together with any other event, change or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of ATS and its Subsidiaries, taken as a
whole, or (ii) the ability of ATS to perform its obligations under this
Agreement or to consummate the Merger or the other transactions
contemplated by this Agreement, provided that "Material Adverse Effect"
shall not be deemed to include the impact of (a) changes in
telecommunications and similar laws of general applicability or
interpretations thereof by courts or governmental authorities, (b) changes
in generally accepted accounting principles, (c) actions and omissions of
ATS (or any of its Subsidiaries) taken with the prior informed written
Consent of Premiere in contemplation of the transactions contemplated
hereby, and (d) the direct effects of compliance with this Agreement or the
operating performance of ATS, including expenses incurred by ATS in
consummating the transactions contemplated by this Agreement.
"ATS PRODUCTS AND SERVICES" shall mean the teleconferencing and
related services and related equipment provided by the ATS Entities to
customers in the course of their business operations.
"ATS SUBSIDIARIES" shall mean the Subsidiaries of ATS, which
shall include the ATS Subsidiaries described in Section 5.5 and any
corporation or other organization acquired as a Subsidiary of ATS in the
future and held as a Subsidiary by ATS at the Effective Time.
"AUTHORITY" means any governmental or quasi-governmental
authority, whether administrative, executive, judicial, legislative or
other, or any combination thereof, including without limitation any
federal, state, territorial, county, municipal or other government or
governmental or quasi-governmental agency, arbitrator, authority, board,
body, branch, bureau, central bank or comparable agency or Entity,
commission, corporation, court, department, instrumentality, master,
mediator panel, referee, system, or other political unit or Subdivision or
other Entity of any of the foregoing, whether domestic or foreign.
"BCA" shall mean the Missouri Business Corporation Act.
"▇▇▇▇▇" shall mean ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"COLLATERAL DOCUMENT" means any agreement, instrument,
certificate, opinion, memorandum, schedule or other document delivered by
ATS, Premiere, Sub, or a Shareholder pursuant to this Agreement or in
connection with the Merger.
-59-
"CONFIDENTIALITY AGREEMENT" shall mean that certain
Confidentiality Agreement, dated January 30, 1998, between ATS and
Premiere.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person pursuant
to any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking of
any kind or character, or other document to which any Person is a party or
that is binding on any Person or its capital stock, Assets or business.
"▇▇▇▇▇" shall mean ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"DEFAULT" shall mean (i) any breach or violation of, default
under, contravention of, or conflict with, any Contract, Law, Order, or
Permit, (ii) any occurrence of any event that with the passage of time or
the giving of notice or both would constitute a breach or violation of,
default under, contravention of, or conflict with, any Contract, Law,
Order, or Permit, or (iii) any occurrence of any event that with or without
the passage of time or the giving of notice would give rise to a right of
any Person to exercise any remedy or obtain any relief under, terminate or
revoke, suspend, cancel, or modify or change the current terms of, or
renegotiate, or to accelerate the maturity or performance of, or to
increase or impose any Liability under, any Contract, Law, Order, or
Permit, where, in any such event, such Default is reasonably likely to
have, individually or in the aggregate, an ATS Material Adverse Effect or a
Premiere Material Adverse Effect, as applicable.
"EMPLOYMENT ARRANGEMENT" means, with respect to any Person, any
employment, consulting, retainer, severance or similar contract, agreement,
plan, arrangement or policy (exclusive of any which is terminable within
thirty (30) days without liability, penalty or payment of any kind by such
Person or any Affiliate), or providing for severance, termination payments,
insurance coverage (including any self-insured arrangements), workers
compensation, disability benefits, life, health, medical dental or
hospitalization benefits, supplemental unemployment benefits, vacation or
sick leave benefits, pension or retirement benefits or for deferred
compensation, profit-sharing, bonuses, stock options, stock purchase or
appreciation rights or other forms of incentive compensation or post-
retirement insurance, compensation or benefits, or any collective
bargaining or other labor agreement, whether or not any of the foregoing is
subject to the provisions of ERISA.
"ENTITY" means any corporation, firm, unincorporated
organization, association, partnership, limited liability company, trust
(inter vivos or testamentary), estate of deceased, insane or incompetent
individual, business trust, joint stock company,
-60-
joint venture or other organization, entity or business, whether acting in
an individual, fiduciary or other capacity, or any Authority.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air,
surface water, ground water, land surface, or subsurface strata) and which
are administered, interpreted, or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq.
("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42
U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases, or threatened releases of any Hazardous Material, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of any Hazardous
Material.
"ENVIRONMENTAL PERMIT" means any Governmental Authorization
required by or pursuant to any Environmental Law.
"ENVIRONMENTAL REQUIREMENTS" means all applicable present and
future Governmental Authorizations, Private Authorizations or other
requirements (including without limitation those pertaining to reporting,
licensing and permitting) relating to or required by or pursuant to any
Environmental Law, including without limitation all requirements pertaining
or relating to:
(a) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of, or the remediation,
emission, discharge or release into the air, surface water, groundwater or
land of, Hazardous Materials ;
(b) the protection of the health and safety of employees or
the public;
(c) the reclamation or restoration of land; and
(d) the ownership or operation of underground storage tanks.
"EQUITY RIGHTS" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever relating
to, or securities or rights convertible into or exchangeable for, shares of
the capital stock of a Person or by which a Person is or may be bound to
issue additional shares of its capital stock or other Equity Rights.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ESCROW AGENT" shall mean SunTrust Bank, Atlanta.
-61-
"EVENT" means the occurrence or existence of any act, action,
activity, circumstance, condition, event, fact, failure to act, omission,
incident or practice, or any set or combination of the foregoing.
"EXHIBITS" 1 through 6, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits are
hereby incorporated by reference herein and made a part hereof, and may be
referred to in this Agreement and any other related instrument or document
without being attached hereto.
"FULLY DILUTED BASIS" shall mean with respect to common stock of
an issuer all of the issued and outstanding shares of such stock,
calculated as if all convertible securities had been fully converted and
any outstanding warrants, options or other rights to purchase such shares
or convertible securities had been fully exercised.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GOVERNMENTAL AUTHORIZATIONS" means all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of each applicable Authority.
"GOVERNMENTAL FILINGS" means all filings, including franchise and
similar Tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with each applicable Authority.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental Laws)
and (ii) any chemicals, pollutants, contaminants, petroleum, petroleum
products, or oil (and specifically shall include asbestos requiring
abatement, removal, or encapsulation pursuant to the requirements of
governmental authorities and any polychlorinated biphenyls).
"HSR ACT" shall mean Section 7A of the ▇▇▇▇▇▇▇ Act, as added by
Title II of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.
"INDEMNIFICATION CLAIM" shall mean a claim for indemnification
under Article 10.
"INDEMNITEES" shall mean Premiere, ATS and their respective
officers, directors, shareholders, controlling persons, Affiliates and
Representatives.
"INDEMNITORS" shall mean ▇▇▇▇▇, ▇▇▇▇▇ and ▇▇▇▇▇.
-62-
"INTELLECTUAL PROPERTY" shall mean copyrights, patents,
trademarks, service marks, service names, trade names, applications
therefor, technology rights and licenses, computer software (including any
source or object codes therefor or documentation relating thereto), trade
secrets, franchises, know-how, inventions, and other intellectual property
rights.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated thereunder.
"▇▇▇▇▇" shall mean ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇.
"KNOWLEDGE" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall mean
those facts that are known or should reasonably have been known after due
inquiry by the chairman, president, chief financial officer, chief
accounting officer, chief operating officer, general counsel, any assistant
or deputy general counsel, or any senior, executive or other vice president
of such Person and the knowledge of any such persons obtained or which
would have been obtained from a reasonable investigation.
"LAW" shall mean any code, law (including common law), ordinance,
regulation, reporting or licensing requirement, rule, or statute applicable
to a Person or its Assets, Liabilities, or business, including those
promulgated, interpreted or enforced by any Regulatory Authority.
"LEASE" shall mean any lease of property, whether real, personal
or mixed, and all amendments thereto.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or expense
(including costs of investigation, collection and defense), claim,
deficiency, guaranty or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for collection
or deposit in the ordinary course of business) of any type, whether
accrued, absolute or contingent, liquidated or unliquidated, matured or
unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest, title
retention or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property
Taxes not yet due and payable, and (iii) Liens which do not materially
impair the use of or title to the Assets subject to such Lien.
"LITIGATION" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, governmental or other examination
or investigation, hearing, administrative or other proceeding relating to
or affecting a Party, its business, its
-63-
Assets (including Contracts related to it), or the transactions
contemplated by this Agreement.
"LOSSES" shall mean any and all demands, claims, actions or
causes of action, assessments, losses, diminution in value, damages
(including special and consequential damages), liabilities, costs, and
expenses, including interest, penalties, cost of investigation and defense,
and reasonable attorneys' and other professional fees and expenses.
"MATERIAL" for purposes of this Agreement shall be determined in
light of the facts and circumstances of the matter in question; provided
that any specific monetary amount stated in this Agreement shall determine
materiality in that instance.
"NETWORK" shall mean (i) all bridging equipment either purchased
from third party suppliers or internally developed consisting of no less
than 4500 ports as of the Effective Time, (ii) all telecommunications
switching equipment consisting of no less than 11,000 ports as of the
Effective Time, and (iii) all other telecommunications equipment and
computer hardware and software, including connections and cabling, owned or
operated by ATS in conjunction with the development, provisioning and
support of its business activities.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"NASDAQ NATIONAL MARKET" shall mean the National Market System of
the National Association of Securities Dealers Automated Quotations System.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or
writ of any federal, state, local or foreign or other court, arbitrator,
mediator, tribunal, administrative agency, or Regulatory Authority.
"PARTY" shall mean either ATS or Premiere, and "PARTIES" shall
mean both ATS and Premiere.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a party
or that is or may be binding upon or inure to the benefit of any Person or
its securities, Assets, or business.
"PERSON" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting
in a representative capacity.
-64-
"PREMIERE CAPITAL STOCK" shall mean, collectively, the Premiere
Common Stock, the Premiere Preferred Stock and any other class or series of
capital stock of Premiere.
"PREMIERE COMMON STOCK" shall mean the $.01 par value common
stock of Premiere.
"PREMIERE DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Premiere Technologies, Inc. Disclosure Memorandum"
delivered prior to the date of this Agreement to ATS describing in
reasonable detail the matters contained therein and, with respect to each
disclosure made therein, specifically referencing each Section of this
Agreement under which such disclosure is being made. Information disclosed
with respect to one Section shall not be deemed to be disclosed for
purposes of any other Section not specifically referenced with respect
thereto.
"PREMIERE ENTITIES" shall mean, collectively, Premiere and all
Premiere Subsidiaries.
"PREMIERE FINANCIAL STATEMENTS" shall mean the consolidated
balance sheets (including related notes and schedules, if any) of Premiere
as of December 31, 1997 and 1996, and the related statements of operations,
changes in shareholders' equity, and cash flows (including related notes
and schedules, if any) for each of the three fiscal years ended December
31, 1997, 1996 and 1995, as filed by Premiere in SEC Documents.
"PREMIERE MATERIAL ADVERSE EFFECT" shall mean an event, change or
occurrence which, individually or together with any other event, change or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of Premiere and its Subsidiaries, taken
as a whole, or (ii) the ability of Premiere to perform its obligations
under this Agreement or to consummate the Merger or the other transactions
contemplated by this Agreement, provided that "Material Adverse Effect"
shall not be deemed to include the impact of (a) changes in
telecommunications and similar Laws of general applicability or
interpretations thereof by courts or governmental authorities, (b) changes
in generally accepted accounting principles, (c) actions and omissions of
Premiere (or any of its Subsidiaries) taken with the prior informed written
Consent of ATS in contemplation of the transactions contemplated hereby,
and (d) the direct effects of compliance with this Agreement on the
operating performance of Premiere, including expenses incurred by Premiere
in consummating the transactions contemplated by this Agreement.
"PREMIERE PREFERRED STOCK" shall mean the $.01 par value
preferred stock of Premiere.
"PREMIERE SUBSIDIARIES" shall mean the Subsidiaries of Premiere,
which shall include the Premiere Subsidiaries described in Section 6.4 and
any corporation or
-65-
other organization acquired as a Subsidiary of Premiere in the future and
held as a Subsidiary by Premiere at the Effective Time.
"PRIVATE AUTHORIZATIONS" means all approvals, concessions,
consents, franchises, licenses, permits, and other authorizations of all
Persons (other than each Authority) including without limitation those with
respect to patents, trademarks, service marks, trade names, copyrights,
computer software programs, technology and know-how.
"REGULATORY AUTHORITIES" shall mean, collectively, the SEC, the
NASD, the Federal Trade Commission, the United States Department of
Justice, and all other federal, state, county, local or other governmental
or regulatory agencies, authorities (including self-regulatory
authorities), instrumentalities, commissions, boards or bodies having
jurisdiction over the Parties and their respective Subsidiaries.
"RELIABLY HANDLING OR RELIABLY HANDLE" shall mean (i) maintenance
of Bellcore standard 99.87% network uptime of those components under the
direct control of ATS; (ii) 90% ontime commencement of dialout conference
calls; (iii) incorrect conference call admission of no more than one in
every five hundred (500) attempts; and (iv) 70% of monthly reservations
calls answered within thirty (30) seconds or less.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative engaged
by a Person.
"SEC" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Laws.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed, or
required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, and the
rules and regulations of any Regulatory Authority promulgated thereunder.
"SHAREHOLDERS' CLOSING DOCUMENTS" shall mean the Escrow
Agreement, the Employment Agreements, the Releases, and the Noncompetition
Agreements.
"SHAREHOLDERS' MEETING" shall mean the meeting of the
shareholders of ATS to be held pursuant to Section 8.1, including any
adjournment or adjournments thereof.
"SHAREHOLDER REPRESENTATIVE" shall mean ▇▇▇▇▇ and ▇▇▇▇▇.
-66-
"SUB COMMON STOCK" shall mean the $.01 par value common stock of
Sub.
"SUBSIDIARIES" shall mean all those corporations, associations,
or other business entities of which the entity in question either (i) owns
or controls 50% or more of the outstanding equity securities either
directly or through an unbroken chain of entities as to each of which 50%
or more of the outstanding equity securities is owned directly or
indirectly by its parent (provided, there shall not be included any such
entity the equity securities of which are owned or controlled in a
fiduciary capacity), (ii) in the case of partnerships, serves as a general
partner, (iii) in the case of a limited liability company, serves as a
managing member, or (iv) otherwise has the ability to elect a majority of
the directors, trustees or managing members thereof.
"SURVIVING CORPORATION" shall mean Sub as the surviving
corporation resulting from the Merger.
"TAKEOVER LAWS" Any applicable "moratorium," "fair price,"
"business combination," "control share," or any other anti-takeover Law.
"TAX RETURN" shall mean any report, return, information return,
or other information required to be supplied to a taxing authority in
connection with Taxes, including any return of an affiliated or combined or
unitary group that includes a Party or its Subsidiaries.
"TAX" or "TAXES" (and "TAXABLE," which means subject to Tax)
shall mean any federal, state, county, local, or foreign taxes, charges,
fees, levies, imposts, duties, or other assessments, including income,
gross receipts, excise, telecommunications, employment, sales, use,
transfer, license, payroll, franchise, severance, stamp, occupation,
windfall profits, environmental, federal highway use, commercial rent,
customs duties, capital stock, paid-up capital, profits, withholding,
Social Security, single business and unemployment, disability, real
property, personal property, registration, ad valorem, value added,
alternative or add-on minimum, estimated, or other tax or governmental fee
of any kind whatsoever, imposes or required to be withheld by the United
States or any state, county, local or foreign government or subdivision or
agency thereof, including any interest, penalties, and additions imposed
thereon or with respect thereto.
"TAXING AUTHORITY" means any Authority responsible for the
imposition of any Tax.
"THIRD PARTY CLAIM" shall mean any claim, suit or proceeding
(including, without limitation, a binding arbitration or an audit by any
Taxing Authority) that is instituted against an Indemnitee by a person or
entity other than an Indemnitor and which, if prosecuted successfully,
would result in a loss for which such Indemnitee is entitled to
indemnification hereunder.
-67-
(b) The terms set forth below shall have the meanings ascribed
thereto in the referenced sections:
Aggregate Merger Consideration Section 3.1(c)
Aggregate Per Share Merger Consideration Section 3.1(c)
ATS Benefit Plans Section 5.15
ATS Contracts Section 5.16
ATS ERISA Plan Section 5.15
ATS Option Plans Section 3.5(b)
ATS Pension Plan Section 5.15
Average Closing Price Section 3.1(c)
Base Exchange Ratio Section 3.1(c)
Cash Payment Section 3.1(c)
Certificates Section 4.1
Closing Section 1.2
Effective Time Section 1.3
Employment Agreements Section 10.1(e)
ERISA Affiliate Section 5.15(b)
Escrow Agreement Section 4.3
Escrow Exchange Ratio Section 3.1(c)
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Firm Exchange Ratio Section 3.1(c)
Goods Contracts Section 5.16(a)
Indebtedness Section 3.1(a)
Maximum Amount Section 9.15
Merger Section 1.1
Noncompetition Agreements Section 10.2(b)
Outstanding Shares Section 3.1(c)
Per Share Purchase Price Section 3.1(c)
Premiere Contracts Section 7.15
Premiere SEC Reports Section 7.5(a)
Released Claims Section 9.9
Releases Section 9.9
Services Contracts Section 5.16(a)
Software Section 5.11(e)
Tax Opinion Section 10.2(r)
Transaction Costs Section 3.1(c)
Transaction Documents Section 5.6(b)
(c) Any singular term in this Agreement shall be deemed to include
the plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
-68-
13.2 EXPENSES. Except as otherwise provided in this Section 13.22,
--------
each of the Parties shall bear and pay all direct costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated hereunder,
including filing, registration and application fees, printing fees, and fees and
expenses of its own financial or other consultants, investment bankers,
accountants, and counsel.
13.3 BROKERS AND FINDERS. Except for ▇.▇. ▇▇▇▇▇▇▇▇▇, Towbin as to ATS
-------------------
and except for BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as to Premiere, each of the
Parties represents and warrants that neither it nor any of its officers,
directors, employees, or Affiliates has employed any broker or finder or
incurred any Liability for any financial advisory fees, investment bankers'
fees, brokerage fees, commissions, or finders' fees in connection with this
Agreement or the transactions contemplated hereby. In the event of a claim by
any broker or finder based upon his or her representing or being retained by or
allegedly representing or being retained by ATS or any Shareholder or by
Premiere, each of ATS and the Shareholders and Premiere, as the case may be,
agrees to indemnify and hold the other Party harmless of and from any Liability
in respect of any such claim.
13.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein,
----------------
this Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral (except, as to Section
9.6(b), for the Confidentiality Agreement). Nothing in this Agreement expressed
or implied, is intended to confer upon any Person, other than the Parties or
their respective successors, any rights, remedies, obligations, or liabilities
under or by reason of this Agreement.
13.5 AMENDMENTS. To the extent permitted by Law, this Agreement may
----------
may be amended by a subsequent writing signed by each of ATS, Premiere and the
Shareholder Representative.
13.6 WAIVERS.
-------
(a) Prior to or at the Effective Time, Premiere, acting through
its Board of Directors, chief executive officer or other authorized officer,
shall have the right to waive any Default in the performance of any term of this
Agreement by ATS or the Shareholders, to waive or extend the time for the
compliance or fulfillment by ATS or the Shareholders of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of Premiere under this Agreement, except any
condition which, if not satisfied, would result in the violation of any Law. No
such waiver shall be effective unless in writing signed by a duly authorized
officer of Premiere.
(b) Prior to or at the Effective Time, ATS, acting through its
Board of Directors, chief executive officer or other authorized officer, shall
have the right to waive any Default in the performance of any term of this
Agreement by Premiere, to waive or extend the time for the compliance or
fulfillment by Premiere of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of ATS
and the
-69-
Shareholders under this Agreement, except any condition which, if not satisfied,
would result in the violation of any Law. No such waiver shall be effective
unless in writing signed by a duly authorized officer of ATS.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
13.7 ASSIGNMENT. Except as expressly contemplated hereby, neither
----------
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.
13.8 NOTICES. All notices or other communications which are required
-------
or permitted hereunder shall be in writing and sufficient if delivered by hand,
by registered or certified mail, postage pre-paid, or by courier or overnight
carrier, to the persons at the addresses set forth below (or at such other
address as may be provided hereunder), and shall be deemed to have been
delivered as of the date so delivered:
ATS: American Teleconferencing Services, Ltd
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇
Copy to Counsel: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
Twelve Wyandotte Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Shareholder Representative: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-70-
Copy to Counsel: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
Twelve Wyandotte Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Premiere: Premiere Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Copy to Counsel: ▇▇▇▇▇▇ & Bird LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
13.9 GOVERNING LAW. This Agreement shall be governed by and construed
-------------
in accordance with the Laws of the State of Georgia, without regard to any
applicable conflicts of Laws.
13.10 COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
13.11 CAPTIONS; ARTICLES AND SECTIONS. The captions contained in this
-------------------------------
Agreement are for reference purposes only and are not part of this Agreement.
Unless otherwise indicated, all references to particular Articles or Sections
shall mean and refer to the referenced Articles and Sections of this Agreement.
13.12 GENDER AND PERSON. Words used herein, regardless of the number and
-----------------
and gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine, or
neuter, as the context requires. Any reference to a "person" herein shall
include an individual, firm, corporation, partnership, trust, governmental
authority or body, association, unincorporated organization or any other entity.
13.13 INTERPRETATIONS. Neither this Agreement nor any uncertainty or
---------------
ambiguity herein shall be construed or resolved against any party, whether under
any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. The parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all
-71-
parties and their attorneys and shall be construed and interpreted according to
the ordinary meaning of the words used so as fairly to accomplish the purposes
and intentions of all parties hereto.
13.14 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
------------------------
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
13.15 SEVERABILITY. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
13.16 SHAREHOLDER REPRESENTATIVE.
--------------------------
(a) The Shareholders herein have and do hereby irrevocably make,
constitute and appoint the individuals designated as their agent (the
"Shareholder's Representative") and authorize and empower him or her to fulfill
the role of Shareholder's Representative hereunder. In the event of the
resignation of the Shareholder's Representative, the resigning Shareholder's
Representative shall appoint a successor from among the Shareholders and who
shall agree in writing to accept such appointment. If the Shareholder's
Representative should die or become incapacitated, his or her successor shall be
appointed within 15 days of his or her death or incapacity by a majority of the
Shareholders, and such successor shall be an Shareholder. The choice of a
successor Shareholder's Representative appointed in any manner permitted above
shall be final and binding upon all of the Shareholders. (The decisions and
actions of any successor Shareholder's Representative shall be, for all
purposes, those of a Shareholder's Representative as if originally named in the
Transfer Agreement.)
(b) Each Shareholder has made, constituted and appointed and by the
execution of this Agreement hereby irrevocably makes, constitutes and appoints
the Shareholder's Representative as such person's true and lawful attorney in
fact and agent, for such person and in such person's name, place and stead for
all purposes necessary or desirable in order for the Shareholder's
Representative to take the actions contemplated by the Transaction Documents on
behalf of the Shareholders, with the ability to execute and deliver all
instruments, certificates and other documents of every kind incident to the
foregoing to all intents and purposes and with the same effect as such
Shareholder could do personally, and each such Shareholder hereby ratifies and
confirms as his, her, or its
-72-
own act, all that the Shareholder's Representative shall do or cause to be done
pursuant to the provisions hereof. All notices and communications directed to
Shareholders under this Agreement shall be given to the Shareholder's
Representative.
(c) The death or incapacity of any Shareholder shall not terminate the
authority and agency of the Shareholder's Representative.
(d) The Shareholders hereby agree to indemnify the Shareholder's
Representative and to hold him or her harmless against any and all loss,
liability or expense incurred without bad faith on the part of the Shareholder's
Representative and arising out of or in connection with his or her duties as
Shareholder's Representative, including the reasonable costs and expenses
incurred by the Shareholder's Representative in defending against any claim or
liability in connection herewith.
IN WITNESS WHEREOF, each of the each of the other Parties has caused this
Agreement to be executed on its behalf by its duly authorized officers as of the
day and year first above written.
PREMIERE TECHNOLOGIES, INC.
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
PTEK MISSOURI ACQUISITION CORPORATION
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
AMERICAN TELECONFERENCING SERVICES, LTD
BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
-73-
THE SHAREHOLDERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, AS TRUSTEE OF ▇▇▇▇▇ 1996
IRREVOCABLE TRUST DATED 12/2/96
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (SEAL)
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, SUCCESSOR TRUSTEE UNDER
AGREEMENT DATED NOVEMBER 3, 1986
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, TRUSTEES UNDER
LIVING TRUST AGREEMENT DATED DECEMBER 18, 1995
-74-
LIST OF EXHIBITS
----------------
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
1. FORM OF ESCROW AGREEMENT. ((S) 4.3).
2. FORM OF REGISTRATION RIGHTS AGREEMENT. ((S) 10.1(E)).
3. FORM OF EMPLOYMENT AGREEMENT. ((S) 10.2(E)).
4. MATTERS AS TO WHICH ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ WILL OPINE. ((S)
10.2(F)).
5. FORM OF NONCOMPETITION AGREEMENT. ((S) 10.2(H)).
6. MATTERS AS TO WHICH ▇▇▇▇▇▇ & BIRD LLP WILL OPINE. ((S) 10.3(D)).
-75-
Exhibit 1
Form of Escrow Agreement
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of
---------
April __, 1998, by and among Premiere Technologies, Inc., a Georgia corporation
("Premiere"), the shareholders of American Teleconferencing Services, Ltd., a
--------
Missouri corporation ("ATS"), identified on Schedule I hereto (each a
---
"Shareholder" and collectively the "Shareholders"), and SunTrust Bank, Atlanta,
------------ ------------
a Georgia banking corporation, as escrow agent hereunder (the "Escrow Agent").
------------
W I T N E S S E T H
- - - - - - - - - -
PTEK Missouri Acquisition Corp. ("Sub") is a wholly owned subsidiary of
---
Premiere and each of Premiere and Sub is a party to an Agreement and Plan of
Merger (the "Merger Agreement") with ATS, of even date hereof, pursuant to which
----------------
ATS has on this date merged (the "Merger") with and into Sub with Sub surviving
------
the Merger and remaining a wholly owned subsidiary of Premiere. Pursuant to
Section 3.1 of the Merger Agreement, the Shareholders each received, in exchange
for each share of ATS capital stock, the contingent right to receive $288.8213
in cash and 9.3326 shares of the $.01 par value common stock of Premiere (the
"Premiere Common Stock"), or aggregate contingent rights to receive a total of
----------------------
approximately $20,795,118.07 in cash and 671,948.00 shares of Premiere Common
Stock, as may be adjusted pursuant to Section 1.5 of the Merger Agreement.
Pursuant to the terms of the Merger Agreement, a portion of the aggregate
cash (the "Escrow Funds") and a portion of the aggregate number of shares of
------------
Premiere Common Stock (the "Escrow Shares") which each Shareholder is entitled
-------------
to receive pursuant to the Merger shall be held by the Escrow Agent pursuant to
the terms of this Agreement to satisfy certain indemnification claims by
Premiere against the Shareholders in accordance with Section 10 of the Merger
Agreement until termination of this Agreement as provided herein.
The Shareholders have appointed the Shareholder Representative as their
respective agent and attorney-in-fact to execute and deliver this Agreement on
their behalf and to act for them hereunder.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE 1
ESTABLISHMENT OF ESCROW
1.1 ESCROW FUNDS AND ESCROW SHARES. On this date, Premiere has delivered
------------------------------
to the Escrow Agent the Escrow Funds and a stock certificate in negotiable form
representing the Escrow Shares. The Escrow Agent acknowledges receipt of the
Escrow Funds and the Escrow Shares and agrees to hold and disburse the Escrow
Funds and Escrow Shares for the benefit of Premiere and the Shareholders, as the
case may be, in accordance with the provisions of this Agreement.
1.2 SHAREHOLDER PERCENTAGE INTERESTS. Attached as Schedule I hereto is a
--------------------------------
schedule showing for each Shareholder (i) the respective percentage interest
(the "Percentage Interest") of each such Shareholder in the Escrow Funds and the
-------------------
Escrow Shares, (ii) the corresponding aggregate cash payment payable to each
Shareholder, subject to adjustments provided herein, and (ii) the corresponding
aggregate maximum number of shares of Premiere Common Stock issuable to each
Shareholder, subject to the adjustments provided herein.
ARTICLE 2
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
2.1 "AGGREGATE VALUE" at any time shall mean the product of the Value Per
Share and the number of Escrow Shares then held in escrow pursuant to this
Agreement.
2.2 "DISTRIBUTION DATE" shall mean the date that is one (1) year from the
date of this Agreement.
2.3 "SHAREHOLDER REPRESENTATIVE" shall mean ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇.
2.4 "VALUE PER SHARE" shall mean $__.__.[INSERT AVERAGE CLOSING PRICE]
2.5 Any other capitalized term used herein but not defined herein shall
have the same meaning as provided in the Merger Agreement.
ARTICLE 3
TERM; DISTRIBUTION OF ESCROW FUNDS AND ESCROW SHARES; LIMITS
3.1 TERM. The term of this Agreement shall commence at the Effective Time
----
and shall terminate at such time as all Escrow Funds and Escrow Shares have been
distributed to the Shareholders or canceled pursuant to the terms of this
Agreement.
-2-
3.2 ADJUSTMENT OF ESCROW FUNDS AND ESCROW SHARES. The Escrow Funds and
--------------------------------------------
the number of Escrow Shares subject to this Agreement shall be adjusted from
time to time, as follows: If, between the date of this Agreement and the
Distribution Date, Premiere shall be entitled to be indemnified pursuant to an
Indemnification Claim under Section 10 of the Merger Agreement, then Premiere
shall deliver to the Shareholder Representative a notice thereof (a "Notice of
---------
Indemnification Obligation"), and Premiere and the Shareholder Representative
--------------------------
shall agree in writing on the dollar amount owed by the Shareholders pursuant to
such Indemnification Claim or, if Premiere and the Shareholder Representative do
not agree on such amount, the amount shall be determined in accordance with the
arbitration procedures set forth in Section 10.11 of the Merger Agreement (the
"Indemnification Amount"). Upon execution by Premiere and the Shareholder
-----------------------
Representative of the agreement setting forth the Indemnification Amount, and
pursuant to that agreement, the Escrow Agent shall distribute to Premiere an
amount of the Escrow Funds as equals .49 the amount of the Indemnification Claim
and shall hold any remaining Escrow Funds as Escrow Funds under this Agreement.
Premiere shall (A) issue (or cause to be issued) new stock certificates (the
"Replacement Certificates") in the respective names of the Shareholders
-------------------------
representing, in each case, the number of shares of Premiere Common Stock equal
to the product of (i) the difference between (x) the number of Escrow Shares in
escrow immediately prior to such Notice of Indemnification Obligation minus (y)
the quotient (rounded to the next highest whole number) obtained by dividing .51
of the Indemnification Amount by the Value Per Share, and (ii) each such
Shareholder's Percentage Interest, and (B) cancel the Premiere Common Stock
certificates representing the Escrow Shares held in escrow immediately prior to
delivery of the Notice of Indemnification Obligation (such certificates, the
"Old Certificates"). The Escrow Agent shall hold the Replacement Certificates
-----------------
in escrow pursuant to this Agreement. Upon the issuance of any Replacement
Certificates, the shares represented by such Replacement Certificates shall be
deemed to be "Escrow Shares" for all purposes of this Agreement.
3.3 DISTRIBUTION OF ESCROW SHARES. On the Distribution Date, the Escrow
-----------------------------
Agent shall deliver to the Company for cancellation certificates representing
the Escrow Shares then held in escrow as of the Distribution Date ("Available
---------
Escrow Shares") and with respect to which an Indemnification Claim is not
-------------
pending. With respect to Indemnification Claims pending as of the Distribution
Date, Premiere and the Shareholder Representative shall use their reasonable
efforts to agree in writing on the Indemnification Amount with respect to any
such pending Indemnification Claims; provided, that if Premiere and the
Shareholder Representative are not able to agree on the Indemnification Amount
with respect to such Indemnification Claims by the Distribution Date, the amount
of the Indemnification Amount for purposes of the calculations in the following
sentence of this Section 3.3 shall be the amount claimed by Premiere in its
Notice of Indemnification Claim. Upon determination of the Indemnification
Amount in accordance with the preceding sentence, the Escrow Agent shall
promptly distribute to the Shareholders, in accordance with their respective
Percentage Interests, the Escrow Funds, less an amount equal to .49 the
aggregate Indemnification Amount with respect to such pending Indemnification
Claims (the "Undisputed Escrow Funds") and retain in escrow all remaining Escrow
-----------------------
Funds ("Disputed Escrow Funds"). Premiere shall promptly (i) issue and deliver
---------------------
to the Escrow Agent and the Escrow Agent shall deliver to the Shareholders new
certificates representing the number of shares of Premiere Common Stock (the
"Distribution Shares") equal to the quotient obtained by dividing
--------------------
-3-
(A) the difference between the Aggregate Value immediately prior to such
Distribution Date and .51 of the aggregate Indemnification Amount with respect
to such pending Indemnification Claims by (B) the Value Per Share (the
--
"Undisputed Escrow Shares"), and such certificates shall be denominated in the
-------------------------
names of the respective Shareholders in amounts equal to the product of the
Undisputed Escrow Shares and each Shareholder's Percentage Interest, and (ii)
issue to the Escrow Agent, who shall retain in escrow pending final
determination of the Indemnification Amount, new certificates representing the
number of shares of Premiere Common Stock equal to the quotient obtained by
dividing (C) the aggregate Indemnification Amount with respect to such pending
Indemnification Claims by (D) the Value Per Share ("Disputed Escrow Shares").
-- ----------------------
Any such delivery of Premiere Common Stock to Shareholders shall be of full
shares and any fractional portions shall be rounded to a whole number by the
Escrow Agent so that the number of shares remaining in escrow to be delivered
will be fully allocated among such Shareholders. Upon the final resolution as
agreed by Premiere and the Shareholder Representative in writing (or pursuant to
the arbitration procedures set forth in Section 10.11 of the Merger Agreement)
of any Indemnification Claim for which Disputed Escrow Funds and the Disputed
Escrow Shares were retained in escrow after the Distribution Date, the Escrow
Agent according to written instructions jointly executed by Premiere and the
Shareholder Representative, shall promptly deliver to the Company for
cancellation the appropriate number of Disputed Escrow Shares corresponding to
.51 of the Indemnification Amount and distribute to Premiere an amount of the
disputed Escrow Funds corresponding to .49 of the Indemnification Amount
corresponding to such Indemnification Claim (if any) and shall deliver any
remaining Disputed Escrow Shares and Disputed Escrow Funds to the Shareholders
in accordance with their respective Percentage Interests in such remaining
Disputed Escrow Shares and Disputed Escrow Funds.
3.4 EFFECT OF FINAL DELIVERY. This Agreement shall continue in full force
------------------------
and effect until the Escrow Agent has delivered all of the Escrow Funds and
delivered all of the Escrow Shares pursuant to the terms hereof. After all of
such funds and shares have been so delivered, all rights, duties and obligations
of the respective parties hereunder shall terminate.
ARTICLE 4
ESCROW STOCK CERTIFICATES; DIVIDENDS;
VOTING RIGHTS; INVESTMENT OF ESCROW FUNDS
4.1 ESCROW STOCK CERTIFICATES. The Escrow Agent may, with the prior
-------------------------
written consent of the Shareholder Representative, at any time issue new
certificates (or request Premiere to issue new certificates) representing the
Escrow Shares in such denominations as may be necessary or appropriate in
carrying out the Escrow Agent's obligations under this Agreement.
4.2 CASH DIVIDENDS; VOTING RIGHTS. The Shareholders shall be entitled to
-----------------------------
receive currently any and all cash dividends or other cash income with respect
to the Escrow Shares. Each Shareholder shall have the right to direct the
Escrow Agent in writing as to the exercise of voting rights with respect to such
Escrow Shares held by the Escrow Agent on behalf of such Shareholder, and the
Escrow Agent shall comply with any such directions if received at least three
-4-
(3) business days prior to such vote. In the absence of such directions, the
Escrow Agent shall not vote any such Escrow Shares.
4.3 MAILINGS TO SHAREHOLDERS. With respect to any meeting of the holders
------------------------
of Premiere Common Stock at which such holders are entitled to vote (a "Premiere
Meeting") and with respect to any written consent sought by Premiere from its
holders of Common Stock (a "Premiere Consent"), the Escrow Agent will mail or
cause to be mailed (or otherwise communicate in the same manner as Premiere
utilized in communications to holders of Premiere Common Stock) to each of the
Shareholders as soon as reasonably practicable after the initial mailing or
notice (or other communication) with respect thereto is given by Premiere to the
holders of Premiere Common Stock:
(a) a copy of the notice of such Premiere meeting or Premiere Consent,
together with any related proxy or other materials provided to the
holders of Premiere Common Stock;
(b) a statement that the Shareholder is entitled (i) to instruct the
Escrow Agent as to the exercise of its voting rights at such Premiere
Meeting or Premiere Consent, as the case may be, or (ii) to attend
such Premiere Meeting and to exercise personally the voting rights
thereat;
(c) a statement that, if no such instructions are received from the
Shareholder, the voting rights with respect to Escrow Shares held on
behalf of such Shareholder will not be exercised;
(d) a letter of instruction whereby the Shareholder may so direct and
instruct the Escrow Agent as contemplated herein; and
(e) a statement of the time and date by which such letter of instruction
must be received by the Escrow Agent in order to be binding upon it,
and of the method for revoking or amending such instructions.
For the purpose of determining the voting rights to which any Shareholder
is entitled in respect of any such Premiere Meeting or Premiere Consent, the
number of Escrow Shares owned of record by the Shareholder shall be determined
at the close of business on the record date established by Premiere or by
applicable law for purposes of determining the holders of Premiere Common Stock
entitled to vote at such Premiere Meeting or to give written consent in
connection with such Premiere Consent.
4.4 STOCK SPLITS; STOCK DIVIDENDS. In the event of any stock split or
-----------------------------
stock dividend with respect to Premiere Common Stock that becomes effective
during the term of this Agreement, the additional shares so issued with respect
to the Escrow Shares shall be added to the Escrow Shares and subject to the
escrow covered by this Agreement and any other references herein to a specific
number of shares of Premiere Common Stock or references herein to prices for or
the fair market value of Premiere Common Stock shall be adjusted accordingly.
-5-
4.5 OTHER OBLIGATIONS. The Shareholders shall have the obligation to pay
-----------------
all taxes, assessments, and charges with respect thereto, but excluding the
right to sell, transfer, pledge or hypothecate or otherwise dispose of any
Escrow Shares. Except as contemplated hereunder, no Escrow Shares or any
beneficial interest therein may be pledged, sold, assigned or transferred,
including by operation of law, other than by will or by the laws of descent or
distribution in the event of the death of a Shareholder, by a Shareholder or be
taken or reached by any legal or equitable process in satisfaction of any debt
or other liability of such Shareholder, prior to the delivery to the Shareholder
of the Escrow Shares by the Escrow Agent. If the Escrow Agent receives
notification that a Shareholder's Escrow Shares or any beneficial interest
therein has been assigned or transferred by will or by the laws of descent or
distribution in the event of the death of such Shareholder, the Escrow Agent
shall receive written verification from Premiere and the Shareholder
Representative prior to taking any action to assign or transfer the deceased
Shareholder's beneficial ownership to a third party.
4.6 INVESTMENT OF ESCROW FUNDS. The Escrow Agent shall invest the Escrow
--------------------------
Funds as directed in writing by Premiere, provided that such investments shall
be limited to (i) direct obligations of the United States of America, (ii)
obligations for which the full faith and credit of the Untied States of America
is pledged to provide for the payment of principal and interest, (iii)
commercial paper rates of the highest qualify by ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's") or Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.
-------
("S&P"), and (iv) certificates of deposit issued by a commercial bank (which may
---
be the Escrow Agent or any affiliate of the Escrow Agent) whose long-term debt
obligations are rated at least A2 by Moody's or at least A by S&P, in each case
having a maturity not in excess of 90 days, or a money market fund that invests
exclusively in said investments including but not limited to, Federated Treasury
Obligations Money Market Fund. The Escrow Agent shall have no liability or
responsibility for loss of interest or penalties which are imposed because of
early withdrawal of the securities or certificates in which any portion of the
Escrow Funds may be invested and the Escrow Agent is hereby authorized to make
such early withdrawal of the securities or certificates in which any portion of
the Escrow Funds may be invested and the Escrow Agent is hereby authorized to
make such early withdrawal if necessary to make a distribution from the Escrow
Funds in accordance with this Agreement. Any investment income earned on the
Escrow Funds shall be added to and shall become part of the Escrow Funds.
ARTICLE 5
THE ESCROW AGENT
5.1 APPOINTMENT. Premiere and the Shareholders hereby designate and
-----------
appoint the Escrow Agent as "Escrow Agent" under this Agreement and the Escrow
------------
Agent hereby accepts such designation and appointment, subject to all of the
provisions of this Agreement.
5.2 LIABILITY. The Escrow Agent, in its capacity as such, or any
---------
successor escrow agent, shall be liable only to hold the Escrow Funds and the
Escrow Shares and to deliver the same to the persons named herein in accordance
with the provisions of this Agreement. By acceptance of this Agreement, the
Escrow Agent, in its capacity as such, or any successor escrow agent, is
-6-
acting in the capacity of a depository only, and shall not be liable or
responsible for any damages, losses or expenses unless such damages, losses or
expenses shall be caused by the gross negligence or willful misconduct of the
Escrow Agent or any successor escrow agent. Neither the Escrow Agent, in its
capacity as such, nor any successor escrow agent, shall incur any liability with
respect to (i) any action taken or omitted in good faith upon the advice of its
counsel with respect to any questions relating to the duties and
responsibilities of the Escrow Agent under this Agreement; or (ii) any action
taken or omitted in reliance upon any instrument, including the written
instructions provided for herein, not only as to the due execution of such
instrument, or the identity, or authority of any person executing such
instrument, or the validity and effectiveness of such instrument, but also as to
the truth and accuracy of any information contained therein, provided that the
Escrow Agent shall in good faith believe such instrument to be genuine, to have
been signed by a proper person or persons, and to conform to the provisions of
this Agreement. In the event of any disagreement or the presentation of adverse
claims or demands in connection with or for any item affected hereby, the Escrow
Agent shall, at its option, be entitled to refuse to comply with any such claims
or demands during the continuance of such disagreement and may refrain from
delivering any item affected hereby, and in so doing the Escrow Agent shall not
become liable to the parties, or to any other person, due to its failure to
comply with any such adverse claim or demand. The Escrow Agent shall be
entitled to continue, without liability, to refrain and refuse to act until all
of the rights of the adverse claimants have been either fully resolved among
themselves, with joint written notice of such resolution executed by the Parties
and delivered to Escrow Agent, or arbitrated to a final award, or finally
adjudicated by a court having jurisdiction over the dispute. The Escrow Agent
shall be held harmless and indemnified by the parties hereto in connection with
any claims against it in connection with its service as escrow agent hereunder.
Any action requested to be taken by the Escrow Agent hereunder and not otherwise
specifically set forth herein shall require the agreement in writing of the
Shareholder Representative and Premiere.
5.3 SUCCESSOR. The Shareholder Representative and Premiere may by written
---------
instrument designate a bank or trust company to act as successor escrow agent.
Any such successor escrow agent must agree to be and shall be bound by, and
shall have all the rights, duties and responsibilities of the Escrow Agent under
this Agreement. In the event Escrow Agent resigns as Escrow Agent, such
resignation shall be effective not later than thirty (30) days after written
notice has been given by the Escrow Agent of its resignation. The Escrow Agent
shall have no responsibility for the appointment of a successor escrow agent.
If a successor escrow agent is not selected within thirty (30) days of the
resignation of Escrow Agent, the Escrow Agent shall have the right to institute
a ▇▇▇▇ of Interpleader or other appropriate judicial proceeding in any court of
competent jurisdiction, and shall be entitled to tender into the registry or
custody of any court of competent jurisdiction all money or property in its hand
under the terms of this Agreement, whereupon the parties hereto agree Escrow
Agent shall be discharged from all further duties under this Agreement. The
filing of any such legal proceedings shall not deprive Escrow Agent of its
compensation earned prior to such filing. The Escrow Agent may be removed for
cause in writing by Premiere and the Shareholder Representative upon five (5)
days advance written notice. The removal of the Escrow Agent shall not deprive
the Escrow Agent of its compensation earned prior to such removal.
-7-
5.4 EXPENSES. Compensation for the normal services of the Escrow Agent or
--------
any successor escrow agent, if any, shall be borne one-half (1/2) by the
Shareholders and one-half (1/2) by Premiere. The Escrow Agent and any successor
escrow agent shall be reimbursed for any reasonable expenses, including the
actual out-of-pocket fees and expenses of outside legal services should such
Escrow Agent deem it necessary in its reasonable discretion to retain an outside
attorney, and Premiere and the Shareholders shall share equally the
reimbursement of such expenses of such Escrow Agent, except that (a) if Premiere
is unsuccessful in any litigation relating to such Escrow Agent, then the fees
and expenses of such Escrow Agent in connection therewith shall be paid by
Premiere, or (b) should the Shareholders be the unsuccessful party in any such
litigation, then the Shareholders will bear the fees and expenses of such Escrow
Agent in connection therewith. The Escrow Agent and any successor escrow agent
shall not be liable for any action taken in good faith in accordance with the
advice of an attorney.
5.5 SECURITY INTERESTS. Premiere and the Shareholders Representative each
------------------
warrant to and agree with the Escrow Agent that, unless otherwise expressly set
forth in this Agreement, there is no security interest in the Escrow Funds or
the Escrow Shares or any part of the Escrow Funds or Escrow Shares; no financing
statement under the Uniform Commercial Code of any jurisdiction is on file in
any jurisdiction claiming a security interest in or describing, whether
specifically or generally, the Escrow Funds or Escrow Shares or any part of the
Escrow Funds or the Escrow Shares; and the Escrow Agent shall have no
responsibility at any time to ascertain whether or not any security interest
exists in the Escrow Funds or the Escrow Shares or any part of the Escrow Funds
or the Escrow Shares or to file any financing statement under the Uniform
Commercial Code of any jurisdiction with respect to the Escrow Funds or Escrow
Shares or any part thereof.
5.6 REPRESENTATIONS OF THE ESCROW AGENT. Premiere and the Shareholders
-----------------------------------
acknowledge that the Escrow Agent is serving as escrow agent for the limited
purposes set forth herein and each represent, covenant and warrant to the Escrow
Agent that no statement or representation, whether oral or in writing, has been
or will be made to any prospective subscribers of the Premiere Common Stock to
the effect that the Escrow Agent has investigated the desirability or
advisability of investment in the Premiere Common Stock or approved, endorsed or
passed upon the merits of such investment or is otherwise involved in any manner
with the transactions or events contemplated in the Merger Agreement other than
as the Escrow Agent under this Agreement. It is further agreed that no party
shall in any way use the name "SunTrust Bank, Atlanta" or "SunTrust Banks, Inc."
in any sales presentation or literature except in the context of the duties of
the Escrow Agent as escrow agent of the offering of the Premiere Common Stock in
the strictest sense. Any breach or violation of the paragraph shall be grounds
for immediate termination of the Agreement by the Escrow Agent in accordance
with the terms and provisions set forth herein.
Without limitation to any release, indemnification or hold harmless
provision in favor of the Escrow Agent as elsewhere provided in this Agreement,
Premiere covenants and agrees to indemnify Escrow Agent and its officers,
directors, employees and agents harmless from and against all liability, cost,
losses and expenses, including but not limited to attorneys' fees and expenses
which are suffered or incurred by Escrow Agent or any such officer, director,
employee
-8-
or agent as a direct or indirect result of the threat or the commencement of any
claim or proceeding against Escrow Agent or any such officer, director, employee
or agent based in whole or in part upon the allegation of a misrepresentation or
an omission of a material or significant fact in connection with the sale or
distribution of the Premiere Common Stock. The Escrow Agent shall have no
responsibility for approving or accepting on behalf or Premiere or the
Shareholders Representative any proceeds delivered to it hereunder, nor shall
the Escrow Agent be responsible for authorizing the issuance of the Premiere
Common Stock or for determining the qualification of any purchaser or the
accuracy of the information contained in the Acquisition Agreement. The
indemnification provisions set forth herein shall survive the termination of
this Agreement.
ARTICLE 6
SHAREHOLDER REPRESENTATIVE
6.1 POWER AND AUTHORITY. The Shareholder Representative shall have full
-------------------
power and authority to represent the Shareholders and their successors with
respect to all matters arising under this Agreement, and all action taken by the
Shareholder Representative hereunder shall be binding upon such Shareholders and
their successors as if expressly ratified and confirmed in writing by each of
them. Without limiting the generality of the foregoing, the Shareholder
Representative shall have full power and authority, on behalf of all the
Shareholders and their successors, to give and receive notices and
communications, to interpret all the terms and provisions of this Agreement, to
dispute or fail to dispute any claim of Indemnifiable Loss against the Escrow
Funds and the Escrow Shares made by an Indemnitee, to negotiate and compromise
any dispute which may arise under this Agreement, to sign any releases or other
documents with respect to any such dispute, and to authorize payments to be made
with respect thereto. Notices or communications to or from the Shareholder's
Representative shall constitute notice to or from each Shareholder.
6.2 RESIGNATION; SUCCESSORS. The Shareholder Representative, or any
-----------------------
successor hereafter appointed, may resign and shall be discharged of his duties
hereunder upon the appointment of a successor Shareholder Representative as
hereinafter provided. In the event of the resignation of the Shareholder's
Representative, the resigning Shareholder's Representative shall appoint a
successor from among the Shareholders who shall agree in writing to accept such
appointment. If the Shareholder's Representative should die or become
incapacitated, his or her successor shall be appointed within 15 days of his or
her death or incapacity by a majority of the Shareholders, and such successor
shall be a Shareholder. The choice of a successor Shareholder's Representative
appointed in any manner permitted above shall be final and binding upon all of
the Shareholders. Each such successor Shareholder Representative shall have all
the power, authority, rights and privileges hereby conferred upon the original
Shareholder Representative, and the term "Shareholder Representative" as used
--------------------------
herein shall be deemed to include such successor Shareholder Representative.
6.3 INDEMNIFICATION OF SHAREHOLDER REPRESENTATIVE. The Shareholders
---------------------------------------------
hereby agree to indemnify the Shareholder's Representative and to hold him or
her harmless against any and all loss, liability or exposure incurred without
bad faith on the part of the Shareholder's
-9-
Representative and arising out of or in connection with his or her duties as
Shareholder's Representative, including the reasonable costs and expenses
incurred by the Shareholder's Representative in defending against any claim or
liability in connection herewith.
ARTICLE 7
MISCELLANEOUS
7.1 TRANSFERABILITY. A Shareholder may not transfer any interest in the
---------------
Escrow Funds or the Escrow Shares or any other right under this Agreement to any
other party, except that upon written notice from the legal representative of
the estate of a deceased Shareholder to the Escrow Agent, the rights of such
Shareholder under this Agreement shall be transferred to the estate of such
Shareholder, and subsequently to any beneficiary thereof, in the event of the
Shareholder's death; provided, however, that any such beneficiary or the legal
representative of any such estate shall be bound by the provisions of this
Agreement without taking any further action. The Escrow Agent shall be entitled
to treat the legal representative of the estate of such Shareholder, and
subsequently any beneficiary thereof, as the absolute owner of the rights of
such Shareholder under this Agreement in all respects and shall incur no
liability for distributions made in good faith to the legal representatives of
such Shareholder or such beneficiary in accordance with the terms of this
Agreement. The contingent right to receive Escrow Funds and Escrow Shares shall
not be transferable by the Shareholders otherwise than by will or by the laws of
descent and distribution.
7.2 NOTICES. Each party shall keep each of the other parties hereto
-------
advised in writing of all transactions and transfers of interest, if any,
pursuant to this Agreement. Any notices or other communications required or
permitted under this Agreement shall be in writing and sufficient if delivered
by hand, registered or certified mail, postage pre-paid, or by courier or
overnight carrier, and shall be deemed to have been delivered as of the date so
delivered:
If to Premiere:
Premiere Technologies, Inc.
The ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
3399 Peachtree Road, N.E.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
FEIN: 593074176
-10-
with a copy to:
▇▇▇▇▇▇ & Bird LLP
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to the Shareholders or the Shareholder Representative:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
Twelve Wyandotte Plaza
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to the Escrow Agent:
SunTrust Bank, Atlanta
Corporate Trust Department
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇-▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
or such other person or address as shall be furnished in writing by any of the
parties.
7.3 CONSTRUCTION. This Agreement shall be governed by and construed in
------------
accordance with the laws of the State of Georgia, without regard to any
applicable conflicts of laws.
-11-
7.4 BINDING EFFECT. This Agreement shall inure to the benefit of and be
--------------
binding upon the respective heirs, executors, administrators, successors and
assigns of the parties hereto.
7.5 SEPARABILITY. If any provision or section of this Agreement is
------------
determined to be void or otherwise unenforceable, it shall not affect the
validity or enforceability of any other provisions of this Agreement which shall
remain unenforceable in accordance with their terms.
7.6 HEADINGS. The headings and subheadings contained in this Agreement
--------
are for reference only and for the benefit of the parties and shall not be
considered in the interpretation or construction of this Agreement.
7.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
-------------------------
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
7.8 AMENDMENTS. This Agreement may be amended from time to time but only
----------
by written agreement signed by all of the parties hereto.
7.9 THIRD PARTY BENEFICIARIES. Each Subsidiary of Premiere and each of
-------------------------
the directors, officers and employees of Premiere and each of its Subsidiaries
are expressly intended to be third party beneficiaries of the indemnities and
obligations of the Shareholders as if they were parties to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of
the day and year first above written.
PREMIERE TECHNOLOGIES, INC.
BY:___________________________
SHAREHOLDERS:
______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, TRUSTEE OF THE ▇▇▇▇▇ 1996
IRREVOCABLE TRUST DATED 12/2/96
-12-
___________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇'▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SUNTRUST BANK, ATLANTA
BY:________________________________
-13-
SCHEDULE I
TO ESCROW AGREEMENT
SHAREHOLDERS
PERCENTAGE
OWNERSHIP
NAME IN ESCROW ESCROW FUNDS ESCROW SHARES
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 46.67% $ 485,244.76 15,678.00
▇▇▇▇▇ ▇. ▇▇▇▇▇ 40.00% $ 415,900.74 13,439.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 8.89% $ 92,437.14 2,986.00
▇▇▇▇▇ ▇▇▇▇▇, Trustee 4.44% $ 46,218.36 1,493.00
of the ▇▇▇▇▇ 1996
Irrevocable Trust
dated 12/2/96
============= =========
TOTAL 100.00% $1,039,801.00 33,596.00
-14-
Exhibit 2
Form of Registration Rights Agreement
STOCK RESTRICTION AND REGISTRATION RIGHTS AGREEMENT
---------------------------------------------------
THIS STOCK RESTRICTION AND REGISTRATION RIGHTS AGREEMENT (this "Agreement")
is made and entered into as of April 22, 1998, by and among Premiere
Technologies, Inc., a corporation ("Premiere"), and those shareholders of
American Teleconferencing Services, Ltd., a Missouri corporation ("ATS"),
appearing as signatories hereto (each, an "Investor" and collectively, the
"Investors").
R E C I T A L S
---------------
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger, dated as
of April 22, 1998 (as the same may be amended, the "Acquisition Agreement"), by
and between Premiere, PTEK Missouri Acquisition Corp. ("Sub") and ATS, ATS shall
be merged with and into Sub (the "Acquisition"), with the result that each of
outstanding shares of $.0125 par value common stock of ATS ("ATS Common Stock")
will be converted into the right to receive cash and shares of the $.01 par
value common stock of Premiere ("Premiere Common Stock"); and
WHEREAS, Premiere has agreed, as a condition precedent to ATS's obligations
under the Acquisition Agreement, to grant the Investors certain registration
rights; and
WHEREAS, Premiere and the Investors desire to define such registration
rights on the terms and subject to the conditions herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS
-----------
As used in this Agreement, the following terms have the respective meanings
set forth below:
Commission: shall mean the Securities and Exchange Commission or any other
----------
federal agency at the time administering the Securities Act;
▇▇▇▇▇: shall mean ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
-----
Effective Date: shall mean the date on which the Acquisition is
--------------
consummated;
Exchange Act: shall mean the Securities Exchange Act of 1934, as amended;
------------
Holder: shall mean any holder of Registrable Securities;
------
▇▇▇▇▇: shall mean ▇▇▇▇▇ ▇. ▇▇▇▇▇;
-----
-1-
Other Stockholders: shall mean Persons who, by virtue of an agreement with
------------------
Premiere, are entitled to include their Securities in any registration effected
under Section 3;
Person: shall mean an individual, partnership, joint stock company,
------
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;
register, registered and registration: shall mean a registration effected
-------- ---------- ------------
by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean (A) one-half ( 1/2) of the aggregate of
----------------------
the shares of Premiere Common Stock issued to ▇▇▇▇▇ under the Acquisition
Agreement, (B) the aggregate of the shares of Premiere Common Stock issued to
the Investors (other than ▇▇▇▇▇) under the Acquisition Agreement and (C) any
securities of Premiere issued as a dividend or other distribution with respect
to, or in exchange for or in replacement of, the shares of Premiere Common Stock
referred to in clause (A) and (B); provided, that Registrable Securities shall
not include (i) securities with respect to which a registration statement with
respect to the sale of such securities has become effective under the Securities
Act and all such securities have been disposed of in accordance with such
registration statement, (ii) such securities as are actually sold pursuant to
Rule 144 (or any successor provision thereto) under the Securities Act ("Rule
144"), or are eligible for sale pursuant to Rule 144, (iii) such securities as
are acquired by Premiere or any of its subsidiaries or (iv) the shares of
Premiere Common Stock issued to the Investors under the Acquisition Agreement
that are held by the escrow agent under that certain Escrow Agreement, dated of
even date hereof, by and among Premiere, the Investors and SunTrust Bank,
Atlanta;
Registration Expenses: shall mean all expenses incurred by Premiere in
---------------------
compliance with Sections 3(a) and (b) hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for Premiere, fees and expenses of one counsel for all the Holders, blue
sky fees and expenses and the expense of any special audits incident to or
required by any such registration (but excluding the compensation of regular
employees of Premiere, which shall be paid in any event by Premiere);
Restricted Securities: shall mean the shares of Premiere Common Stock
---------------------
issued to the Investors under the Acquisition Agreement;
Security, Securities: shall have the meaning set forth in Section 2(1) of
--------------------
the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as amended; and
--------------
Selling Expenses: shall mean all underwriting discounts and selling
----------------
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than fees and expenses of
one counsel for all the Holders.
-2-
Shareholder Representative: shall have the meaning given that term in the
--------------------------
Acquisition Agreement.
Shelf Filing Date: shall mean the date that is ninety (90) days following
-----------------
the Effective Date.
2. RESTRICTIONS ON TRANSFER
------------------------
(a) Prior to any proposed transfer of any Restricted Securities (other than
under the circumstances described in Section 3 hereof), the Holder thereof shall
give written notice to Premiere of its intention to effect such transfer. Each
such notice shall describe the manner of the proposed transfer and, if requested
by Premiere, shall be accompanied by an opinion of counsel reasonably
satisfactory to Premiere to the effect that the proposed transfer may be
effected without registration under the Securities Act, whereupon such Holder
shall be entitled to transfer the Restricted Securities in accordance with the
terms of its notice. Each certificate or instrument transferred as above
provided shall bear the legend set forth in Section 2(b), except that such
certificate or instrument shall not bear such legend if (i) such transfer is in
accordance with the provisions of Rule 144 (or any other rule permitting public
sale without registration under the Securities Act) or (ii) the opinion of
counsel referred to above is to the further effect that the transferee and any
subsequent transferee would be entitled to transfer such Restricted Securities
in a public sale without registration under the Securities Act. Notwithstanding
anything herein to the contrary, in no event shall ▇▇▇▇▇, during the period
commencing on the date hereof and ending on the one (1) year anniversary of the
date hereof, transfer in any three (3) month period a number of shares of
Registrable Securitiesin excess of twenty-five percent (25%) of the Registrable
Securities held by ▇▇▇▇▇ as of the Effective Date except pursuant to a Premiere
Registration pursuant to Section 3(a) below; provided that the limitations
provided by this sentence shall cease to apply (a) upon the occurrence of a
"change of control" of Premiere reportable under Item 1 of Form 8-K under the
Exchange Act, (b) upon the closing of a Commission Rule 145 transaction unless
the stockholders of Premiere immediately prior to such transaction continue to
hold more than 50% of the shares of the surviving entity immediately following
such transaction, and (c) in the event that the closing stock price of Premiere
Common Stock, as reported by The Wall Street Journal, is less than 66% of the
Average Closing Price (as defined in the Acquisition Agreement) for three
consecutive trading days..
(b) Each certificate evidencing Restricted Securities issued to any Holder
in connection with the Acquisition shall bear a legend in substantially the
following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES ACTS AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES ACTS OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
-3-
(c) In the event that any Restricted Securities shall cease to be
subject to the restrictions on transfer set forth in this Agreement, Premiere
shall, upon the written request of the Holder thereof, issue to such Holder a
new certificate evidencing such Restricted Securities without the legend
required by Section 2(b) hereof endorsed thereon.
3. REGISTRATION RIGHTS
-------------------
(a) Premiere Registration.
---------------------
(i) If Premiere shall determine to register at any time prior to
the one (1) year anniversary of the date of this Agreement any of its equity
securities either for its own account or for the account of Other Stockholders,
other than a registration relating solely to benefit plans, or a registration
relating solely to a Commission Rule 145 transaction, or a registration covering
any method of distribution which is not an underwritten public offering, or a
registration on any registration form which does not permit secondary sales or
does not include substantially the same information as would be required to be
included in a registration statement covering the sale of Registrable
Securities, Premiere will:
(A) promptly give to each of the Holders a written notice
thereof (which shall include a list of the jurisdictions in which Premiere
intends to a ttempt to qualify such securities under the applicable blue
sky or other state securities laws); and
(B) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in
a written request or requests, made by any Holder within ten (10) business
days after the giving of the written notice from Premiere described in
clause (i) above, except as set forth in Section 3(a)(ii) below. Such
written request shall specify the amount of Registrable Securities intended
to be disposed of by a Holder and may specify all or a part of the Holders'
Registrable Securities.
Notwithstanding the foregoing, if, at any time after giving such written notice
of its intention to effect such registration and prior to the effective date of
the registration statement filed in connection with such registration, Premiere
shall determine for any reason not to register such equity securities Premiere
may, at its election, give written notice of such determination to the Holders
and thereupon Premiere shall be relieved of its obligation to register such
Registrable Securities in connection with the registration of such equity
securities (but not from its obligation to pay Registration Expenses to the
extent incurred in connection therewith as provided herein).
Notwithstanding anything to the contrary set forth in this Agreement, no Holder
shall have any right to include any Registrable Securities in any registration
statement filed pursuant to any of the following: the 5-3/4% Convertible
Subordinated Notes Due 2004 Registration Rights Agreement dated as of June 15,
1997, by and among Premiere and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC, Alex. ▇▇▇▇▇ &
Sons Incorporated and ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation; the
Stock Restriction and Registration Rights Agreement dated April 30, 1997 by and
among Premiere, and those Stockholders of Voice-Tel Enterprises, Inc. ("VTE"),
VTN, Inc. and the
-4-
stockholders of franchisees of VTE appearing as signatories thereto; or the
Stock Restriction and Registration Rights Agreement dated September 30, 1997 by
and among Premiere and those shareholders of VoiceCom Holdings, Inc. appearing
as signatories thereto.
(ii) Underwriting. The right of each of the Holders to registration
------------
pursuant to this Section 3(a) shall be conditioned upon such Holders'
participation in such underwriting and the inclusion of such Holders'
Registrable Securities in the underwriting to the extent provided herein. The
Holders whose shares are to be included in such registration shall (together
with Premiere and the Other Stockholders distributing their securities through
such underwriting) enter into an underwriting agreement in customary form with
the representative of the underwriter or underwriters selected for the
underwriting by Premiere or such Other Stockholders, as the case may be. Such
underwriting agreement will contain such representations and warranties by
Premiere and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution to the effect and to the extent
provided in Section 3(e) hereof and the provision of opinions of counsel and
accountants' letters to the effect and to the extent provided in Section 3(f),
and the representations and warranties by, and the other agreements on the part
of, Premiere to and for the benefit of such underwriters shall also be made to
and for the benefit of the Holders whose shares are to be included in such
registration. Notwithstanding any other provision of this Section 3, if the
representative determines that marketing factors require a limitation on the
number of shares to be underwritten, Premiere shall so advise all holders of
securities requesting registration, and the number of shares of securities that
are entitled to be included in the registration and underwriting shall be
allocated by Premiere in its sole discretion, subject to agreements between
Premiere and the Other Stockholders. If any of the Holders or any officer,
director or Other Stockholder disapproves of the terms of any such underwriting,
he or she may elect to withdraw therefrom by written notice to Premiere and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
(b) Shelf Registration.
------------------
(i) On or before the Shelf Filing Date Premiere shall file a
"shelf" registration statement pursuant to Rule 415 under the Securities Act
(the "Shelf Registration") with respect to the Registrable Securities to be
issued under the Acquisition Agreement; provided, however, Premiere shall not be
required to file or effect, or take any action to file or effect, any Shelf
Registration pursuant to this Section 3(b) if all of the Registrable Securities
are or were included in, or are or were eligible for sale under, any such
registration pursuant to Section 3(a) hereof. Premiere shall, subject to Section
3(g) hereof, use its reasonable best efforts to cause the Shelf Registration to
become effective as soon as practicable after the date of filing thereof, and
shall use its reasonable best efforts to keep the Shelf Registration
continuously effective from the date such Shelf Registration is effective until
the first anniversary of the Effective Date in order to permit the prospectus
forming a part thereof to be usable by Holders during such period. The Shelf
Registration may include securities of Premiere other than Registrable
Securities. The Registrable Securities may be included in another Shelf
Registration that otherwise meets the requirements set forth herein.
-5-
(ii) Subject to Section 3(g) hereof, Premiere shall supplement or
amend the Shelf Registration, (A) as required by the registration form utilized
by Premiere or by the instructions applicable to such registration form or by
the Securities Act or the rules and regulations promulgated thereunder and (B)
to include in such Shelf Registration any additional securities that become
Registrable Securities by operation of the definition thereof.
(iii) The Holders may, at their election and upon written notice by
the Shareholder Representative to Premiere, effect offers and sales under the
Shelf Registration by means of one or more offerings (provided that Premiere
shall not be required to effect any underwritten offering); provided, however,
that Premiere shall not be obligated to effect, or take any action to effect,
any such registration:
(A) In any particular jurisdiction in which Premiere would be
required to execute a general consent to service of process in effecting
such registration, qualification or compliance, unless Premiere is already
subject to service in such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations thereunder.
(B) Other than pursuant to a registration statement on Form S-3.
If Other Stockholders request inclusion in any such registration under
Section 3(b)(iii), the Holders shall offer to include the securities of such
Other Stockholders and may condition such offer on their acceptance of the
further applicable provisions of this Section 3. Notwithstanding any other
provision of this Section 3(b)(iii), if a recognized national independent
investment banking firm advises the Holders in writing that marketing factors
require a limitation on the number of shares to be included in the registration,
the Shareholder Representative shall so advise Premiere and the securities of
Premiere held by Other Stockholders shall be excluded from such registration to
the extent so required by such limitation. No Registrable Securities or any
other securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration.
(c) Expenses of Registration. All Registration Expenses incurred in
------------------------
connection with any registration, qualification or compliance pursuant to this
Section 3 (including all Registration Expenses incurred in connection with the
Shelf Registration and any supplements or amendments thereto, whether or not it
becomes effective, and whether all, none or some of the Registrable Securities
are sold pursuant to the Shelf Registration) shall be borne by Premiere, and all
Selling Expenses shall be borne by the Holders of the securities so registered
pro rata on the basis of the number of their shares so registered.
(d) Registration Procedures. In the case of each registration effected by
-----------------------
Premiere pursuant to this Section 3, Premiere will keep the Holders, as
applicable, advised in writing as to the initiation of each registration and as
to the completion thereof. At its expense, Premiere will:
(i) furnish to the Shareholder Representative, and to any underwriter
simultaneously with filing with the Commission, copies of any registration
statement
-6-
(including all exhibits) for a registration in which the Holders have
elected to participate pursuant to Section 3(a) and any prospectus forming
a part thereof and any amendments and supplements thereto (including all
documents incorporated or deemed incorporated by reference therein prior to
the effectiveness of such registration statement and including each
preliminary prospectus, any summary prospectus or any term sheet (as such
term is used in Rule 434 under the Securities Act)) and any other
prospectus filed under Rule 424 under the Securities Act;
(ii) furnish to the Shareholder Representative, and to any
underwriter before filing with the Commission, copies of any registration
statement (including all exhibits) for a Shelf Registration and any
prospectus forming a part thereof and any amendments and supplements
thereto (including all documents incorporated or deemed incorporated by
reference therein prior to the effectiveness of such registration statement
and including each preliminary prospectus, any summary prospectus or any
term sheet (as such term is used in Rule 434 under the Securities Act)),
which documents, other than documents incorporated or deemed incorporated
by reference, will be subject to the review of the Shareholder
Representative and any such underwriter for a period of at least five
business days, and Premiere shall not file any such registration statement
or such prospectus or any amendment or supplement to such registration
statement or prospectus to which the Shareholder Representative or any such
underwriter shall reasonably object within five business days after the
receipt thereof; the Shareholder Representative or such underwriters, if
any, shall be deemed to have reasonably objected to such filing only if the
registration statement, amendment, prospectus or supplement, as applicable,
as proposed to be filed, contains a material misstatement or omission;
(iii) furnish to the Shareholder Representative and to any
underwriter, such number of conformed copies of the applicable registration
statement and of each amendment and supplement thereto (in each case
including all exhibits) and such number of copies of the prospectus forming
a part of such registration statement (including each preliminary
prospectus, any summary prospectus or any term sheet (as such term is used
in Rule 434 under the Securities Act)) and any other prospectus filed under
Rule 424 under the Securities Act, in conformity with the requirements of
the Securities Act, and such other documents, including without limitation
documents incorporated or deemed to be incorporated by reference prior to
the effectiveness of such registration, as the Shareholder Representative
or any such underwriter, from time to time may reasonably request;
(iv) to the extent practicable, promptly prior to the filing of any
document that is to be incorporated by reference into any registration
statement or prospectus forming a part thereof subsequent to the
effectiveness thereof, and in any event no later than the date such
document is filed with the Commission, provide copies of such document to
the Shareholder Representative, if requested, and to any underwriter, and
make representatives of Premiere available for discussion of such document
and other customary due diligence matters, and include in such document
prior to the filing thereof such information as Shareholder Representative
or any such underwriter reasonably may request;
-7-
(v) use its reasonable best efforts (x) to register or qualify
all Registrable Securities and other securities covered by such registration
under such other securities or blue sky laws of such States of the United
States of America where an exemption is not available and as the sellers of
Registrable Securities covered by such registration shall reasonably request,
(y) to keep such registration or qualification in effect for so long as the
applicable registration statement remains in effect, and (z) to take any
other action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the securities
to be sold by such sellers, except that Premiere shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where it is not so qualified, or to subject
itself to taxation in any such jurisdiction, or to execute a general consent
to service of process in effecting such registration, qualification or
compliance, unless Premiere is already subject to service in such
jurisdiction and except as may be required by the Securities Act or
applicable rules or regulations thereunder;
(vi) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or authorities
as may be necessary in the opinion of counsel to Premiere and counsel to the
Holders of Registrable Securities to enable the Holders thereof to consummate
the disposition of such Registrable Securities;
(vii) subject to Section 3(g) hereof, promptly notify each Holder
of Registrable Securities covered by a registration statement (A) upon
discovery that, or upon the happening of any event as a result of which, the
prospectus forming a part of such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, (B) of the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or the initiation
of proceedings for that purpose, (C) of any request by the Commission for (1)
amendments to such registration statement or any document incorporated or
deemed to be incorporated by reference in any such registration statement,
(2) supplements to the prospectus forming a part of such registration
statement or (3) additional information, or (D) of the receipt by Premiere of
any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation of any proceeding for such purpose, and at
the request of any such Holder promptly prepare and furnish to it a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(viii) use its reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of any such registration, or the
lifting of any suspension of the
-8-
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction;
(ix) if requested by the Shareholder Representative or any
underwriter, promptly incorporate in such registration statement or
prospectus, pursuant to a supplement or post effective amendment if
necessary, such information as the Shareholder Representative and any
underwriter may reasonably request to have included therein, including,
without limitation, information relating to the "plan of distribution" of the
Registrable Securities, information with respect to the principal amount or
number of shares of Registrable Securities being sold to such underwriter,
the purchase price being paid therefor and any other terms of the offering of
the Registrable Securities to be sold in such offering and make all required
filings of any such prospectus supplement or post-effective amendment as soon
as practicable after Premiere is notified of the matters to be incorporated
in such prospectus supplement or post effective amendment;
(x) in the event the offering is an underwritten offering,
furnish to the Holders, addressed to them, an opinion of counsel for
Premiere, dated the date of the closing under the underwriting agreement, if
any, or the date of effectiveness of the registration statement if such
registration is not an underwritten offering, and use its reasonable best
efforts to furnish to the Holders, addressed to them, a "cold comfort" letter
signed by the independent certified public accountants who have certified
Premiere's financial statements included in such registration, covering
substantially the same matters with respect to such registration (and the
prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements,
as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten public
offerings of securities and such other matters as the Shareholder
Representative may reasonably request;
(xi) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months, but not more than 18 months,
beginning with the first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;
(xii) provide promptly to the Holders upon request any document
filed by Premiere with the Commission pursuant to the requirements of Section
13 and Section 15 of the Exchange Act; and
(xiii) use its reasonable best efforts to cause all Registrable
Securities included in any registration pursuant hereto to be listed on each
securities exchange on which securities of the same class are then listed,
or, if not then listed on any securities exchange, to be eligible for trading
in any over-the-counter market or trading system in which securities of the
same class are then traded.
-9-
(e) Indemnification.
---------------
(i) Premiere will indemnify each of the Holders, as applicable, each
of its officers, directors, members and partners, and each person controlling
each of the Holders, with respect to each registration which has been effected
pursuant to this Section 3, and each underwriter, if any, and each person who
controls any underwriter, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by Premiere of the
Securities Act or the Exchange Act or any rule or regulation thereunder
applicable to Premiere and relating to action or inaction required of Premiere
in connection with any such registration, qualification or compliance, and will
reimburse each of the Holders, each of its officers, directors, members and
partners, and each person controlling each of the Holders, each such underwriter
and each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating and defending any
such claim, loss, damage, liability or action, provided that Premiere will not
be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission based upon written information furnished to Premiere by the Holders or
underwriter and stated to be specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities held by it
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify Premiere, each of its directors and
officers and each underwriter, if any, of Premiere's securities covered by such
a registration statement, each person who controls Premiere or such underwriter,
each Other Stockholder and each of their officers, directors, members and
partners, and each person controlling such Other Stockholder against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document made by such Holder, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements by such Holder therein not misleading, and will reimburse
Premiere and such Other Stockholders, directors, officers, partners, members,
persons, underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to Premiere by such Holder and
stated to be specifically for use therein; provided, however, that the
obligations of each of the Holders hereunder and under clause (vi) below shall
be limited to an amount equal to the net proceeds to such Holder of securities
sold as contemplated herein.
-10-
(iii) Each party entitled to indemnification under this Section 3(e)
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party's expense (unless the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of one such counsel for all Indemnified Parties shall be at
the expense of the Indemnifying Party), and provided further that the failure of
any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 3 unless the
Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party (which consent shall not be unreasonably withheld or
delayed), consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 3(e) is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue (or alleged untrue) statement of a material fact or the
omission (or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with any underwritten public offering contemplated by
this Agreement are in conflict with the foregoing provisions, the provisions in
such underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of Premiere and Holders is
subject to the condition that, insofar as they relate to any loss, claim,
liability or damage made in a preliminary prospectus but eliminated or remedied
in the amended prospectus on file with the
-11-
Commission at the time the registration statement in question becomes effective
or the amended prospectus filed with the Commission pursuant to Commission Rule
424(b) (the "Final Prospectus"), such indemnity or contribution agreement shall
not inure to the benefit of any underwriter or Holder (but only if such Holder
was required to deliver such Final Prospectus) if a copy of the Final Prospectus
was furnished to the underwriter and was not furnished to the person asserting
the loss, liability, claim or damage at or prior to the time such action is
required by the Securities Act.
(f) Information by the Holders. Each of the Holders holding
--------------------------
securities included in any registration shall furnish to Premiere such
information regarding such Holder and the distribution proposed by such Holder
as Premiere may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Section 3.
(g) Holdback Agreement; Postponement. Notwithstanding the provisions
--------------------------------
of Sections 3(a) and (b), if the Board of Directors of Premiere determines in
good faith that it is in the best interests of Premiere (A) not to disclose the
existence of facts surrounding any proposed or pending acquisition, disposition,
strategic alliance or financing transaction involving Premiere or (B) for any
reasonable purpose relating to the business of Premiere, to suspend the
registration rights set forth herein, Premiere may, by notice to the Shareholder
Representative in accordance with Section 6(a), (1) suspend the rights of the
Holders to make sales pursuant to any effective registration statement, and (2)
postpone any obligation of Premiere hereunder to take any action for such a
period of time as the Board of Directors may determine in its sole discretion;
provided, however, that such periods of suspension may not exceed 90 days in the
aggregate.
(h) Assignment. The registration rights set forth in Section 3 hereof
----------
may be assigned, in whole or in part, to any transferee of Registrable
Securities (who shall be considered thereafter to be a Holder (provided that any
transferee who is not an affiliate of Investor shall be a Holder only with
respect to such Registrable Securities so acquired and any stock of Premiere
issued as a dividend or other distribution with respect to, or in exchange for
or in replacement of, such Registrable Securities) and shall be bound by all
obligations and limitations of this Agreement).
4. RULE 144 REPORTING
------------------
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, Premiere agrees to:
(i) make and keep public information available (as those terms are
understood and defined in Rule 144) at all times;
(ii) use its reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required of Premiere
under the Securities Act and the Exchange Act; and
-12-
(iii) so long as there are outstanding any Registrable Securities, furnish
to each Holder, upon request, a written statement by Premiere as to
its compliance with the reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly report of Premiere, and such other reports and documents
so filed as such Holder may reasonably request in availing itself of
any rule or regulation of the Commission allowing such Holder to sell
any such securities without registration.
5. INTERPRETATION OF THIS AGREEMENT
--------------------------------
(a) Directly or Indirectly. Where any provision in this Agreement
----------------------
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Georgia.
(c) Section Headings. The headings of the sections and subsections of
----------------
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
6. MISCELLANEOUS
-------------
(a) Notices.
-------
(i) All communications under this Agreement shall be in writing
and shall be delivered by facsimile or by hand or mailed by overnight courier or
by registered or certified mail, postage prepaid: .
(A) if to Premiere, to Premiere Technologies, Inc., The
Lenox Building, Suite 400, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President and Chief Executive Officer, with a
required copy to ▇▇▇▇▇▇ & Bird LLP, One Atlantic Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq., or at such
other address as it may have furnished in writing to the Investors;
(B) if to the Investors, at the addresses listed on Schedule
I hereto, or at such other addresses as may have been furnished Premiere in
writing.
(C) if to the Shareholder Representative, to ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and to ▇▇▇▇▇, 2677 :▇▇▇▇▇▇ #104,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at such other address as it may have furnished
in writing to Premiere.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier, on the
first business day following the date of
-13-
such mailing; and if mailed by registered or certified mail, on the third
business day after the date of such mailing.
(b) Reproduction of Documents. This Agreement and all documents
-------------------------
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the Investor
by any photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and the Investors may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Investors in the regular course
of business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
(c) Entire Agreement; Amendment and Waiver. This Agreement
--------------------------------------
constitutes the entire understanding of the parties hereto and supersedes all
prior understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of Premiere and the Holders of a majority of the then
outstanding Registrable Securities.
(d) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
(e) No Inconsistent Agreements. Premiere will not hereafter enter
--------------------------
into any agreement with respect to its securities which is inconsistent with the
rights granted to the Holders of Registrable Securities in this Agreement.
(f) Remedies. Each Holder of Registrable Securities, in addition to
--------
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. Premiere agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(g) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended and understood that all of the rights and privileges
of each of the Holders shall be enforceable to the fullest extent permitted by
law.
[Signatures on the following page.]
-14-
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
PREMIERE TECHNOLOGIES, INC.
By:_______________________
Name:____________________
Title:___________________
INVESTORS:
____________________________(SEAL)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
____________________________(SEAL)
▇▇▇▇▇ ▇. ▇▇▇▇▇
____________________________(SEAL)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
____________________________(SEAL)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Successor Trustee under
Agreement dated November 3, 1986
____________________________(SEAL)
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
____________________________(SEAL)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
____________________________(SEAL)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustees under
Living Trust Agreement dated December 18, 1995
-15-
____________________________(SEAL)
▇▇▇▇▇ ▇▇▇▇▇, Trustee of the ▇▇▇▇▇ 1996 Irrevocable
Trust dated 12/2/96
-16-
Exhibit 3
Form of Employment Agreement
AMERICAN TELECONFERENCING SERVICES, LTD.
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT is made and entered into by and between AMERICAN
TELECONFERENCING SERVICES, LTD., a Missouri corporation (the "Company"), and
_______________________ (the "Employee"), as of _____________, 199___ (the
"Effective Date").
BACKGROUND STATEMENT
The Company provides teleconferencing, video conferencing, data
conferencing and related services throughout the United States. The Employee
has substantial knowledge of the Company's business; the Company considers it to
be in its best interest to have the benefit of the Employee's services as
provided in this Agreement; and the Employee is willing to render such services
to the Company in accordance with the provisions of this Agreement.
THEREFORE, in consideration of and reliance upon the foregoing background
statement and the representations and warranties contained in this Agreement,
the Company and the Employee agree to the following provisions:
TERMS
SECTION 1. DUTIES. The Company hereby employs the Employee as
__________________ of the Company. The Employee will have the powers, duties
and responsibilities from time to time assigned to him by ___________________,
including rendering services on behalf of Premiere Technologies, Inc.
("Premiere") or any of Premiere's other subsidiaries. During the term of his
employment under this Agreement, the Employee will perform such duties and
exercise such authority as are customarily performed and exercised by the
____________________, subject to the ultimate direction and control of the
____________________. The Employee will devote substantially all of his
business time to faithfully and industriously perform his duties and promote the
business and best interests of the Company. The Employee's duties hereunder are
to be performed (subject to such travel as may be required in the conduct of his
duties hereunder) at the Company's corporate offices currently located in
____________________; provided, however, in the event that the Company's Board
of Directors determines that it is in the best interest of the Company that the
Employee's duties hereunder be performed (subject to such travel as may be
required in the conduct of his duties hereunder) at ____________________, which
are currently located in ____________________, then the Employee shall perform
his duties hereunder (subject to such travel as may be required in the conduct
of his duties hereunder) at ____________________; provided, that the employee
shall not be required to relocate his personal residence to
____________________.
SECTION 2. COMPENSATION.
SECTION 2.1. BASE SALARY. During the term of the Employee's employment
under this Agreement, the Company will pay the Employee an annual base salary of
$____________, payable in accordance with the Company's standard payroll
practices. At the beginning of each calendar year after 1998, during the term
of this Agreement, the Employee shall receive an increase in his base salary
equal to _____ percent (___%) of the previous year's base salary.
SECTION 2.2. BONUS COMPENSATION. In addition to his base salary, the
Employee may be entitled to earn an annual bonus, subject to the sole discretion
of the Board of Directors of the Company.
SECTION 2.3. EMPLOYEE BENEFITS. During the term of his employment under
this Agreement, the Employee will be entitled to participate in all employee
benefit programs, including pension and profit-sharing plans, and any medical,
health, dental, disability and other insurance programs generally available to
other officers of the Company.
SECTION 2.4. SEVERANCE PAY. If the Company terminates the Employee's
employment under this Agreement without Cause (as defined herein), then in
addition to any other rights or remedies the Employee may have, the Employee
will be entitled to receive severance pay equal to the Employee's base salary in
effect at the date of termination, payable in accordance with the Company's
standard payroll practices over the ____________ period following the date of
termination.
SECTION 2.5. DISABILITY OF EMPLOYEE. If during the term of the Employee's
employment under this Agreement, the Employee, in the opinion of a majority of
the Board of Directors of the Company (excluding the Employee if he is a
director), as confirmed by competent medical evidence, becomes physically or
mentally unable to perform his duties hereunder ("Disability"), then for the
first six (6) months of his Disability the Employee will receive his full base
salary and for the next six (6) months of his Disability he will receive one-
half (1/2) of his base salary. (The Company may satisfy this obligation in
whole or in part by payments to the Employee provided through disability
insurance.) The Company will not, however, be obligated to pay any salary to
the Employee under this Section beyond expiration of his term of employment
hereunder. Nor will the Company be obligated to pay bonus compensation with
respect to the period of Disability. Bonus compensation in this circumstance
will be a pro rata portion of the bonus the Employee would have earned absent
the period of Disability based upon the number of days during the fiscal year
the Employee was not Disabled. When the Employee is again able to perform his
duties he will be entitled to resume his full position and salary; provided, if
the Employee's Disability endures for a continuous period of at least 12
(twelve) months, then the Company may terminate the Employee's employment under
this Agreement after delivery of ten (10) days written notice. The Employee
hereby agrees to submit himself for appropriate medical examination by a
physician selected by the Company for the purposes of this Section 2.5.
-2-
SECTION 2.6. DEATH OF EMPLOYEE. Within forty-five (45) days after the
Employee's death during the term of this Agreement, the Company will pay to the
Employee's estate, or his heirs, the amount of any accrued and unpaid base
salary (determined as of the date of death).
SECTION 2.7. REIMBURSEMENT OF EXPENDITURES. The Company will reimburse
the Employee for all reasonable expenditures incurred by the Employee in the
course of his employment in promoting the interests of the Company, including
expenditures for (i) transportation, lodging and meals during overnight business
trips, (ii) business meals and entertainment, (iii) supplies and business
equipment, and (iv) long-distance telephone calls. Notwithstanding the
foregoing, the Company will have no obligation to pay reimbursements under this
Section 2.7 unless the Employee submits timely reports of his expenditures to
the Company in the manner prescribed by the Company.
SECTION 2.8. VACATION. The Employee will be entitled to
__________________ paid vacation annually. Unused vacation time will accumulate
and carryover to subsequent years. Any unused vacation time at the date of
termination of the Employee's employment under this Agreement will be paid to
the Employee, unless such employment is terminated by the Company with Cause (as
defined herein) or by the Employee without Adequate Justification (as defined
herein), in which case no unused vacation time will be paid to the Employee.
SECTION 3. TERM OF EMPLOYMENT. Subject to Section 4 hereof, the
Employee's initial term of employment under this Agreement will begin on the
Effective Date and will expire on the ____________ anniversary of the Effective
Date.
SECTION 4. TERMINATION OF EMPLOYMENT.
SECTION 4.1. AUTOMATIC TERMINATION. The Employee's employment hereunder
will terminate automatically upon the death of the Employee.
SECTION 4.2. TERMINATION BY THE COMPANY. The Company may terminate the
Employee's employment under this Agreement for Cause or for Disability as
provided in Section 2.5 hereof. "Cause" shall consist of any of the following:
(i) the commission by the Employee of a willful act (including, without
limitation, a dishonest or fraudulent act) or a grossly negligent act, or the
willful or grossly negligent omission to act by the Employee, which is intended
to cause, causes or is reasonably likely to cause material harm to the Company,
Premiere or any of Premiere's subsidiaries (including harm to the business
reputation of the Company, Premiere or any of Premiere's subsidiaries); (ii) the
indictment of the Employee for the commission or perpetration of any felony or
any crime involving dishonesty, moral turpitude or fraud; (iii) the breach by
the Employee of any material term or covenant of this Agreement that remains
uncured ten (10) days following the expiration of the thirty (30) day period
described in the next sentence; or (iv) the failure of the Employee to devote
substantially all of his business time to the Company's
-3-
business and affairs as provided in Section 1 hereof. Termination for Cause
will not be effective unless the Company delivers to the Employee thirty (30)
days advance written notice setting forth in reasonable detail the allegations
of Cause, and the Employee does not convince the Board of Directors of the
Company within such 30-day period that Cause does not exist. The final
determination for the Company of whether a termination of the Employee was with
or without Cause shall rest with the Board of Directors of the Company, which
shall act by a majority of the directors, with the Employee abstaining from the
consideration of and vote on the matter if he is a director. From the date of
notice through the date of decision, the Company may place the Employee on
administrative leave with pay, and in such event restrict the authority and
activities of the Employee in any manner the Company deems appropriate.
SECTION 4.3. TERMINATION BY THE EMPLOYEE. The Employee may terminate his
employment under this Agreement by giving the Company at least thirty (30) days
prior written notice. If the Employee terminates his employment under this
Agreement, then he will be entitled to pro rata portions of his base salary and
bonus compensation with respect to the fiscal year in which the termination
occurs (based on the number of days the Employee is employed by the Company
during such fiscal year); provided, however, that the Employee will not be
entitled to any bonus compensation if he terminates his employment without
"Adequate Justification," which shall consist of a material breach by the
Company of this Agreement, including the failure by the Company to make any
payments due to the Employee hereunder, and such breach is not cured by the
Company within thirty (30) days following receipt of written notice from the
Employee, which notice specifies in reasonable detail the events which the
Employee believes constitute Adequate Justification. The final determination
for the Company of whether the Employee terminated his employment with or
without Adequate Justification shall rest with the Board of Directors of the
Company, which shall act by a majority of the directors, with the Employee
abstaining from the consideration of and vote on the matter if he is a director.
SECTION 5. RESTRICTIVE COVENANTS.
SECTION 5.1. PROHIBITED ACTIVITIES. During the Restricted Period (defined
below), Employee will not, directly or indirectly, for Employee's own account or
for or on behalf of any other person or entity, whether as an officer, director,
employee, partner, principal, joint venturer, consultant, investor, shareholder,
independent contractor or otherwise:
(i) Non-Competition: Engage in any activity in which Employee will
----------------
perform the same or substantially similar duties as those performed with the
Company for or on behalf any business, or other entity in competition with the
business of the Company which shall include teleconferencing, video
conferencing, data conferencing and related services (the "Business of the
Company"), within the states of Colorado, Missouri or Kansas, it being expressly
acknowledged that Company engages in substantial business both within and beyond
the area herein defined, and that Employee will perform services
-4-
on behalf of Company throughout the area herein defined, and that Employee will
have substantial influence and control over the goodwill of the Company
throughout the area herein defined.
(ii) Non-Solicitation: Solicit or accept business in competition with
----------------
the Business of the Company from any (a) clients of the Company who were clients
of the Company at the time of the termination of Employee's employment, or (b)
entities or individuals who were clients of the Company during the one (1) year
period preceding such termination with whom Employee had any contact (defined as
direct or indirect influence over any goodwill generated with such client either
through Employee's communications with such client, or by virtue of Employee's
status as a key employee of Company), or (c) any prospective clients of the
Company who, within two (2) years prior to such termination, had been solicited
by the Company and where the Employee supervised or participated in any way in
such solicitation activities.
(iii) Non-Recruitment: Hire or employ, or attempt to hire or employ,
----------------
in any fashion (whether as an employee, independent contractor or otherwise),
any employee or independent contractor of the Company or its predecessor, or
solicit or induce, or attempt to solicit or induce, any of the Company's
employees, consultants, clients, customers, vendors, suppliers, or independent
contractors to terminate their relationship with the Company and to establish a
relationship with a competitor of Company.
(iv) Non-Disparagement: Speak or act in any manner that is intended
-----------------
to, or does in fact, damage the goodwill or the business or reputation of the
Company, Premiere or any of their affiliates.
For purposes of this Agreement, the Restricted Period will be a period
beginning on the Effective Date and continuing for a period of two (2) years
after the termination or expiration of the Employee's employment hereunder,
regardless of the reason for such termination or expiration.
The foregoing notwithstanding, the Employee may own up to five percent
(5%) of any class of securities registered pursuant to the Securities Exchange
Act of 1934, as amended, of any corporation engaged in competition with the
Company so long as the Employee does not otherwise (a) participate in the
management or operation of any such business in such a manner as to be engaged
in competition with the Company, or (b) violate any other provision of this
Agreement.
The Employee understands and agrees that, by virtue of the Employee's
position with the Company, the Employee will have substantial access to and
impact on the goodwill, confidential information and other legitimate business
interests of the Company, and therefore will be in a position to have a
substantial adverse impact on the Company's business interests should the
Employee engage in activities in violation of the restrictive covenants of this
Section 5.1. The Employee further acknowledges that the Company is materially
relying upon the Employee's compliance with the terms of this Section 5.1 and
-5-
that the Employee's covenants herein are material to Premiere's acquisition of
the Company. The Employee acknowledges that the Employee's adherence to the
restrictive covenants set forth in this Section 5.1 is also an important and
substantial part of the consideration that the Company is receiving under this
Agreement, and agrees that the restrictive covenants in this Section 5.1 are
enforceable in all respects. The Employee consents to the entry of injunctive
relief to enforce such covenants, in addition to such other relief to which the
Company may be entitled by law.
SECTION 5.2. TRADE SECRETS.
(i) The Employee agrees to maintain in strict confidence, and not use
or disclose except pursuant to written instructions from the Company, any Trade
Secret (as defined below) of the Company, for so long as the pertinent data or
information remains a Trade Secret, provided that the obligation to protect the
confidentiality of any such information or data shall not be excused if such
information or data ceases to qualify as a Trade Secret as a result of the acts
or omissions of the Employee.
(ii) The Employee agrees to maintain in strict confidence and, except
as necessary to perform his duties hereunder, not to use or disclose any
Confidential Business Information (as hereinafter defined) during his employment
hereunder and for a period of one (1) year thereafter.
(iii) Upon termination of his employment, the Employee shall leave
with the Company all business records, contracts, calendars, telephone lists,
rolodexes, and other materials or business records relating to the Company, its
business or customers, including all physical and electronic copies thereof,
whether or not the Employee prepared such materials or records himself; provided
that the Employee shall have the right to retain any personal property
(including personal records) maintained at the Company's offices or otherwise.
(iv) The Employee may disclose Trade Secrets or Confidential Business
Information pursuant to any order or legal process requiring him (in his legal
counsel's reasonable opinion) to do so, provided that the Employee shall first
have notified the Company in writing of the request or order to so disclose the
Trade Secrets or Confidential Business Information in sufficient time to allow
the Company to seek an appropriate protective order.
(v) "Trade Secret" shall mean any information, including, but not limited
to, technical or non-technical data, a formula, a pattern, a compilation, a
program, a plan, a device, a method, a technique, a drawing, a process,
financial data, financial plans, product plans, or a list of actual or potential
customers or suppliers which (a) derives economic value, actual or potential,
from not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or
use, and (b) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy. "Confidential Business Information" shall
mean any
-6-
non-public information of a competitively sensitive or personal nature,
other than Trade Secrets, acquired by the Employee, directly or indirectly, in
connection with the Employee's employment (including his employment with the
Company's predecessor prior to the date of this Agreement), including (without
limitation) oral and written information concerning the Company's financial
positions and results of operations (revenues, margins, assets, net income,
etc.)), annual and long-range business plans, marketing plans and methods,
account invoices, oral or written customer information, and personnel
information.
SECTION 5.3. REMEDIES. In the event the Employee violates or threatens to
violate the provisions of this Section 5, damages at law will be an insufficient
remedy and the Company will be entitled to equitable relief in addition to any
other remedies or rights available to the Company and no bond or security will
be required in connection with such equitable relief.
SECTION 5.4. COUNTERCLAIMS. The existence of any claim or cause of action
the Employee may have against the Company will not at any time constitute a
defense to the enforcement by the Company of the restrictions or rights provided
by this Section 5.
SECTION 5.5. COMPANY. For purposes of this Section 5, "Company" shall
include Premiere and all of direct and indirect subsidiaries and any
predecessors of the Company.
SECTION 5.6. MODIFICATION. The Employee and the Company agree that they
will negotiate in good faith to amend this Agreement from time to time to modify
the terms of this Section 5, including the definition of the terms "Trade
Secrets" and "Confidential Business Information," to reflect changes in the
Company's business and affairs so that the scope of the limitations placed on
the Employee's activities by this Section 5 accomplish the parties' intent in
relation to the then current facts and circumstances. Any such amendment shall
be effective only when embodied in a written document signed by the Employee and
the Company. This Section 5 shall survive any termination of this Agreement.
SECTION 6. OWNERSHIP OF EMPLOYEE'S WORK
SECTION 6.1. COMPANY DEVELOPMENTS. The Employee hereby assigns to the
Company all of the Employee's right, title, and interest (including, without
limitation, the right to file and prosecute applications for domestic and
foreign letters patent and to have issued such letters patent) in any and all
Company Developments. "Company Developments" means any Development that (i) is
conceived, completed or reduced to practice during the Employee's employment, or
that has been conceived, completed or reduced to practice during the Employee's
previous employment with the Company or its predecessor solely or jointly by the
Employee, or created wholly or in part by the Employee, whether or not such
Development is patentable, copyrightable or susceptible to other forms of
protection, and (ii)(a) relates to the actual or anticipated business, research
or development of the Company, (b) results from any work the Employee does using
any
-7-
equipment, facilities, materials, trade secrets or personnel of the Company,
or (c) is suggested by or results from any task assigned to the Employee or work
performed by the Employee for or on behalf of the Company or its predecessor.
"Development" means any idea, invention, discovery, improvement, innovation,
design of a useful article (whether the design is ornamental or otherwise),
computer program and related documentation, and other work of authorship.
SECTION 6.2. WORKS MADE FOR HIRE. The Employee acknowledges that all
writings and works of authorship, including, without limitation, works that
contain software program codes, that the Employee makes or conceives, alone or
with others, during the period of time the Employee is employed by the Company
or has been employed by the Company or its predecessor and that relate in any
way to the actual or then-prospective business of the Company or its
subsidiaries are works made for hire and the property of the Company, including,
without limitation, copyrights on those writings and works of authorship and the
right to file and prosecute applications for domestic and foreign letters patent
and to have issued such letters patent with respect to such writings and works
of authorship.
SECTION 6.3. COPYRIGHTS. The Employee hereby assigns to the Company
all the Employee's right, title, and interest of any kind, and nature in and to
all copyrights, copyright licenses, and copyright interests of every kind and
nature, and any and all renewals and extensions thereof that may be secured
under all laws now or hereafter in force and any and all causes of action
heretofore accrued or which may hereafter accrue in the Employee's favor for
infringement of such copyrights, copyright licenses, and copyright interests
that the Employee makes or conceives, alone or with others, during the period of
time in which the Employee is employed by the Company or was employed by the
Company, and that relate in any way to the actual or then-prospective business
of the Company or its subsidiaries, whether or not published, to the full extent
of such rights.
SECTION 7. COMPLIANCE WITH OTHER AGREEMENTS. The Employee represents
and warrants to the Company that he is free to enter this Agreement and that the
execution of this Agreement and the performance of his obligations under this
Agreement will not, as of the date of this Agreement or with the passage of
time, conflict with, cause a breach of or constitute a default under any
agreement to which the Employee is a party or may be bound.
SECTION 8. SEVERABILITY. Every provision of this Agreement is intended to
be severable. If any provision or portion of a provision is illegal or invalid,
then the remainder of this Agreement will not be affected. Moreover, any
provision of this Agreement which is determined to be unreasonable, arbitrary or
against public policy will be modified as necessary so that it is not
unreasonable, arbitrary or against public policy.
SECTION 9. WAIVER. A waiver by a party to this Agreement of any breach of
this Agreement by the other party will not operate or be construed as a waiver
of any other breach or a waiver of the same breach on a future occasion. No
delay or omission by
-8-
either party to enforce any rights it may have under this Agreement will operate
or be construed as a waiver.
SECTION 10. MODIFICATION. This Agreement may not be modified or amended
except by a writing signed by both parties.
SECTION 11. HEADINGS. The various headings contained in this Agreement
are inserted only as a matter of convenience and in no way define, limit or
extend the scope or intent of any of the provisions of this Agreement.
SECTION 12. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which will be deemed an original, but all of which taken
together will constitute one and the same instrument.
SECTION 13. NUMBER AND PRONOUNS. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural will include
the singular and the plural and pronouns stated in the masculine, feminine or
neuter gender will include the masculine, feminine and neuter genders.
SECTION 14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The respective
representations and warranties of the parties to this Agreement will survive the
execution of this Agreement and continue without limitation.
SECTION 15. ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any
right or interest hereunder shall be assignable by either the Employee or the
Company without the other party's prior written consent; provided, however, that
nothing in this Section 15 shall preclude (i) the Employee from designating a
beneficiary to receive any benefits payable hereunder upon his death, or (ii)
the executors, administrators or other legal representatives of the Employee or
his estate from assigning any rights hereunder to the person or persons entitled
thereto. Except as otherwise provided herein, this Agreement will be binding
upon and inure to the benefit of the parties hereto and their respective legal
representatives, administrators, executors, successors and assigns.
SECTION 16. WAIVER OF JURY. With respect to any dispute which may arise
in connection with this Agreement each party to this Agreement hereby
irrevocably waives all rights to demand a jury trial.
SECTION 17. ENTIRE AGREEMENT. With respect to its subject matter, this
Agreement constitutes the entire understanding of the parties superseding all
prior agreements, understandings, negotiations and discussions between them,
whether written or oral, and there are no other understandings, representations,
warranties or commitments with respect thereto.
-9-
SECTION 18. GOVERNING LAW. This Agreement will be governed by and
interpreted in accordance with the substantive laws of the State of
____________________ without reference to conflicts of law.
SECTION 19. NOTICES. Any notices or other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given and delivered when delivered in person, two (2) days after being
mailed postage prepaid by certified or registered mail with return receipt
requested, or when delivered by overnight delivery service to the recipient at
the following address, or to such other address as to which the other party
subsequently shall have been notified in writing by such recipient:
If to the Company:
American Teleconferencing Services, Ltd.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
With a copy to:
Premiere Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
The ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
If to the Employee:
--------------------------------
--------------------------------
--------------------------------
--------------------------------
-10-
Exhibit 4
Matters as to which ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ will opine
FORM OF LEGAL OPINION
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
1) The Company was duly incorporated as a corporation, and is existing and
in good standing, under the laws of the State of Missouri.
2) The Company has the corporate power to execute and deliver each
Transaction Document to which it is a party, to perform its obligations
thereunder, to own and use its Assets and to conduct its business, and the
Shareholder has the power to execute and deliver each Transaction Document to
which he is a party and to perform his obligations thereunder.
3) The Company has duly authorized the execution and delivery of each
Transaction Document to which it is a party, and all performance by the Company
thereunder, and each of the Company and the Shareholder has duly executed and
delivered the Merger Agreement.
4) Except as disclosed in the ATS Disclosure Memorandum, the execution and
delivery by the Company and the Shareholder of each Transaction Document to
which it or he is a party, and if the Company and the Shareholder were now to
perform its or his obligations under each Transaction Document to which it or he
is a party, such performance would not result in any:
i) violation of the Articles of Incorporation or Bylaws;
ii) violation of any existing federal or state constitution, statute,
regulation, rule, order, or law to which the Company, the Shareholder or the
Assets are subject;
iii) breach of or default under any material written agreements;
iv) creation or imposition of a contractual lien or security interest
in, on or against the Assets under any material written agreements; or
v) violation of any judicial or administrative decree, writ, judgment
or order to which, to our knowledge, the Company, the Shareholder or the Assets
are subject.
With your permission we have assumed that the term "material written
agreements" used in clauses (iii) and (iv) above includes only those agreements
that have been identified by an officer of the Company as being agreements
which, if terminated or not renewed, would have a materially adverse effect on
the Company's business, operations or condition (financial or otherwise).
5) Assuming compliance with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and compliance with applicable securities laws, no
consent, approval, authorization or other action by, or filing with, any
governmental authority of the United States or the State of Missouri is required
for the Company's or the Shareholder's execution and delivery of any Transaction
Document or consummation of the Merger.
6) Each Transaction Document to which the Company is a party is
enforceable against the Company. Each Transaction Document to which the
Shareholder is a party is enforceable against the Shareholder.
7) The authorized capital stock (the "Capital Stock") of the Company
consists of (i) 100,000 shares of the Company's $0.00125 par value per share
common stock, of which ___________ shares are issued and outstanding as of
_________. All of the issued and outstanding shares of capital stock of the
Company are duly and validly issued and outstanding and are fully paid and
nonassessable. None of the outstanding shares of capital stock of the Company
has been issued in violation of any preemptive rights of the current or past
shareholders of the Company. To our knowledge, except as set forth above or as
disclosed in Section 5.4 of the Company's Disclosure Memorandum, as of
__________, there were no shares of capital stock or other equity securities of
the Company outstanding relating to the capital stock of the Company.
Based upon the limitations and qualifications set forth above, we
confirm to you that:
1) Members of this firm are licensed to practice law in the State of
Missouri and before the federal courts having jurisdiction in Missouri, and we
express no opinion with respect to the laws of any jurisdiction other than the
United States of America and the State of Missouri. To the extent that any of
the matters discussed in this opinion purport to be governed by the laws of the
State of Georgia (or other jurisdiction other than the State of Missouri or the
United States of America), we have assumed for purposes of this Opinion that the
laws of the State of Georgia (or such other jurisdiction) are the same as the
laws of the State of Missouri. The opinions stated herein are as of the date
hereof. We assume no obligation to update or supplement this opinion to reflect
any facts or circumstances which may hereafter come to our attention or any
changes in laws which may hereafter occur. The opinion relates solely to the
matters explicitly covered herein, and no opinion is implied or may be inferred
with respect to any other matter.
2) To our knowledge, except as set forth on Section 5.17 of the ATS
Disclosure Memorandum, no litigation or other proceeding against the Company or
any of its properties is pending or overtly threatened by a written
communication to the Company.
3) The Company is qualified to transact business as a foreign corporation
in the states of Arizona, California, Colorado, Georgia, Florida, Illinois,
Kansas, Maryland, New Jersey, New York, Ohio, Texas, Alabama, Massachusetts, and
New Hampshire. The foregoing statement is based solely upon certificates
provided by agencies of those states, copies of which the Company has delivered
to you at the closing of the Merger, and is limited to the meaning ascribed to
such certificates by each applicable state agency.
Exhibit 5
Form of Noncompetition Agreement
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is made and entered into
as of April ___, 1998, by and among Premiere Technologies, Inc., a Georgia
corporation ("Premiere") and _________, a shareholder (the "Shareholder") of
American Teleconferencing Services, Ltd., a Missouri corporation ("ATS").
WITNESSETH
----------
WHEREAS, Premiere and the shareholders of ATS are parties to an Agreement
and Plan of Merger (the "Merger Agreement") by and among Premiere, PTEK Missouri
Acquisition Corp. ("Sub"), a wholly-owned subsidiary of Premiere, ATS, and the
shareholders of ATS, pursuant to which ATS will be merged with and into Sub (the
"Merger") with Sub surviving the Merger and remaining a wholly owned subsidiary
of Premiere;
WHEREAS, pursuant to the Merger Agreement, the Shareholder will receive, in
exchange for ATS Common Stock, the contingent right to receive cash and shares
of Premiere Common Stock;
WHEREAS, the Shareholder has agreed, as a condition precedent to Premiere's
obligations under the Merger Agreement, to execute and deliver to Premiere a
Noncompetition Agreement; and
WHEREAS, the Shareholder is engaged in the Business Activities throughout
the Restrictive Territory.
NOW, THEREFORE, in consideration of the transactions contemplated by the
Merger Agreement, and the consideration to be paid to the Shareholder under the
Merger Agreement, and the foregoing premises and for other good and valuable
consideration, the parties hereby agree as follows:
1. DEFINITIONS.
-----------
As used in this Agreement, the following terms shall have the following
meanings:
"ATS Confidential Information" means information, other than ATS Trade
Secrets, which relates to ATS, ATS' business, or ATS' suppliers or customers
that is not generally known by persons not employed by ATS and which Shareholder
has learned as a consequence of his or her relationship to ATS. Such
information includes, without limitation, to the extent it is not considered an
ATS Trade Secret, financial information, strategic plans and forecasts,
marketing plans and forecasts, franchisee lists, customer lists, customer
pricing and order data, supplier lists, or technical information relating to
ATS' products and services. "ATS Confidential Information" shall not include
information
-1-
which is generally available to the public by the act of one who has the right
to disclose such information without violating a legal right of Premiere or ATS.
"ATS TRADE SECRETS" shall mean all secret, proprietary or confidential
information regarding ATS or its business, including any and all information not
generally known to, or ascertainable by, persons not employed by ATS, the
disclosure or knowledge of which would permit those persons to derive actual or
potential economic value therefrom or to cause economic or financial harm to
ATS. "ATS Trade Secrets" shall not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating a legal right of Premiere or ATS.
"BUSINESS ACTIVITIES" shall mean the business conducted by ATS as of the
Effective Time and any business in which ATS intends to expand as of the
Effective Time which includes, but is not limited to, the provision of
teleconferencing, data conferencing, video conferencing and related services.
"COMPETING BUSINESS" shall mean any business organization of whatever form
engaged, either directly or indirectly, in any business or enterprise which is
the same as, or substantially the same as, any of the Business Activities.
"RESTRICTIVE TERRITORY" shall mean the geographic area within which the
Business Activities are conducted including the United States.
"RESTRICTIVE PERIOD" shall mean the period commencing with the Effective
Time and ending on the fourth (4th) anniversary hereof.
Any other capitalized terms used herein but not defined herein shall have
the same meaning as provided in the Merger Agreement.
2. REPRESENTATIONS OF THE SHAREHOLDER. The Shareholder acknowledges that:
----------------------------------
(a) The Shareholder has substantial special expertise and experience in the
Business Activities and possesses substantial contacts with suppliers and
customers of ATS, and that such expertise, experience and contacts have been
built up over a number of years, including the Shareholder's period of ownership
of ATS Common Stock;
(b) The Shareholder will be well-compensated under the Merger Agreement for
the expertise, knowledge and contacts he or she has obtained, as well as the
goodwill that he or she has built up in ATS, and that this Agreement is being
executed as an integral part of the Shareholder's sale of all of his or her ATS
Common Stock to Premiere pursuant to the Merger, an express element of which
includes the sale of the goodwill the Shareholder's ownership and service has
generated, and for which sale the Shareholder will receive substantial
remuneration under the Merger Agreement;
-2-
(c) The Shareholder has occupied a position of trust and responsibility
with ATS in which he or she has had access to a substantial amount of ATS
Confidential Information and ATS Trade Secrets, and that Premiere is entering
into this Agreement in reliance upon the Shareholder's agreement not to use or
disclose such ATS Trade Secrets and ATS Confidential Information, not to compete
against Premiere or any Affiliate, and not to solicit Premiere's or any such
Affiliates' customers during the time periods set forth in this Agreement;
(d) Because of the Shareholder's special experience and his or her close
identification with the goodwill of ATS, the harm caused by such Shareholder's
violation of the provisions of this Agreement cannot reasonably or adequately be
compensated solely by damages in an action at law;
(e) The Shareholder is capable of competing with and substantially harming
Premiere and its Affiliates and has more than adequate capital, experience,
customer contact, supplier contact, name recognition and industry reputation to
start a competing business, which would deprive Premiere of all or substantially
all of its bargained for goodwill and other consideration in the transactions
contemplated in this Agreement; and
(f) The terms of this Agreement are necessary to protect Premiere's
legitimate business interests and its rights in the ATS Trade Secrets and ATS
Confidential Information and the Shareholder's competition with Premiere or any
of its Affiliates or other violation of the covenants set forth below would
cause substantial and irreparable harm to Premiere.
(g) The Shareholder is engaged in the Business Activities in and throughout
the Restrictive Territory.
3. RESTRICTIVE COVENANTS.
---------------------
(a) During the Restrictive Period, the Shareholder shall not, directly or
indirectly, by himself or herself or in conjunction with any person, firm or
corporation other than Premiere, engage in any of the Business Activities, or
help anyone else engage in any of the Business Activities, within the
Restrictive Territory. Notwithstanding anything contained herein to the
contrary, the Shareholder may own up to five percent (5%) of the shares of a
publicly-held corporation which competes with Premiere or any of its Affiliates,
provided none of his or her other relationships with such corporation violate
the terms of this Agreement.
(b) During the Restrictive Period, the Shareholder shall not, for himself
or herself or on behalf of others, use or disclose any ATS Confidential
Information or ATS Trade Secrets except in the furtherance of the business of
Premiere or any of its Affiliates. No Shareholder shall use or disclose any ATS
Trade Secrets at any time while the information remains a ATS Trade Secret.
Nothing in this provision shall limit the
-3-
protections available to Premiere under any federal, state or local statute or
legal principle governing confidential information or trade secrets.
(c) During the Restrictive Period, the Shareholder will not, without the
prior written consent of Premiere, either directly or indirectly, on his or her
own behalf or in the service or on behalf of others, (i) solicit, divert or
appropriate to or for a Competing Business any person or entity which is a
customer of ATS, Premiere or any of its Affiliates at the Effective Time or was
such customer during the two (2) year period preceding the Effective Time, or
(ii) attempt to solicit, divert, or appropriate to or for a Competing Business,
any such person or entity.
(d) During the Restrictive Period, the Shareholder will not, without the
prior written consent of Premiere, either directly or indirectly, on his or her
own behalf or in the service or on behalf of others, solicit, divert, or hire
away, or attempt to solicit, divert, or hire away, from the employment of ATS,
Premiere or any of its Affiliates, any person employed by ATS, Premiere or any
such Affiliate, whether or not such employee is a full-time employee or
temporary employee of a ATS, Premiere, or such Affiliate, and whether or not
such employment is pursuant to written agreement and whether or not such
employment is for a determined period or is at will.
4. REMEDIES.
--------
(a) The Shareholder acknowledges that his or her agreement not to compete
with Premiere or any of its Affiliates is necessarily of a special, unique and
extraordinary nature, and that the loss arising from a breach thereof cannot
reasonably be compensated by money damages and will cause Premiere and any such
Affiliate irreparable harm. Accordingly, upon the failure of any Shareholder to
comply with the terms of this Agreement at any time, Premiere and any such
Affiliate shall be entitled to injunctive or other extraordinary relief in case
of such breach, such injunctive or other extraordinary relief to be cumulative
to, but not in limitation of, any other remedies to which Premiere or any such
Affiliate may be entitled.
(b) In addition, Premiere shall be entitled, upon any breach of Section 3
of this agreement by the Shareholder, to demand an accounting and repayment of
all profits, compensation and other benefits realized by the Shareholder or any
Competing Business controlled by the Shareholder as a result of such breach.
(c) Premiere and the Shareholder intend that Premiere have the broadest
possible protection from unfair competition by the Shareholders with Premiere or
any of its Affiliates, consistent with public policy. Accordingly, should any
court of competent jurisdiction determine that, consistent with the established
precedent of the forum state, the public policy of such state requires a more
limited restriction in duration, geographical area, nature of restricted
activity, or any combination thereof, it would be in furtherance of the
intentions of the parties hereto for the court to so interpret and construe the
terms of
-4-
this Agreement, or to modify the Agreement, to apply to only such more limited
restrictions to an appropriate degree.
5. NOTICES. Any notices or other communications required or permitted under
-------
this Agreement shall be in writing and sufficient if delivered by hand, by
registered or certified mail, postage pre-paid, or by courier or overnight
carrier, to the persons at the addresses set forth below (or at such other
address as may be provided hereunder), and shall be deemed to have been
delivered as of the date so delivered:
If to Premiere:
Premiere Technologies, Inc.
The ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
3399 Peachtree Road, N.E.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & Bird LLP
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
If to the Shareholder:
________________
________________
________________
with a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
Twelve Wyandotte Plaza
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
6. CONSTRUCTION. This Agreement shall be governed by and construed in
------------
accordance with the laws of the State of Georgia, without regard to any
applicable conflicts of laws.
7. ASSIGNMENT. This Agreement shall inure to the benefit of and be binding
----------
upon the parties hereto and their respective successors and assigns. This
Agreement and the rights and obligations of the parties hereunder may not be
assigned by any party, except
-5-
that Premiere may assign this Agreement (or any portion thereof) to a purchaser
or any successor to the Business Activities.
8. SEVERABILITY. If any provision or section of this Agreement is determined
------------
to be void or otherwise unenforceable, it shall not affect the validity or
enforceability of any other provisions of this Agreement which shall remain
unenforceable in accordance with their terms.
9. WAIVER. The waiver by Premiere of any breach of this Agreement by the
------
Shareholder shall not be effective unless in writing, and no such waiver shall
operate or be construed as the waiver of the same or another breach on a
subsequent occasion.
10. AMENDMENT. No amendment or modification of this Agreement shall be valid
---------
or binding upon Premiere or the Shareholder unless made in writing and signed by
the parties hereto.
11. HEADINGS. The headings and subheadings contained in this Agreement are for
--------
reference only and for the benefit of the parties and shall not be considered in
the interpretation or construction of this Agreement.
12. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of
-------------------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Noncompetition Agreement
as of the day and year first above written.
PREMIERE TECHNOLOGIES, INC.
BY:___________________
SHAREHOLDER:
BY:___________________
PRINTED NAME:_________
-6-
Exhibit 6
Matters as to which ▇▇▇▇▇▇ & Bird LLP will opine
FORM OF LEGAL OPINION
▇▇▇▇▇▇ & BIRD LLP
(1) The Company was duly organized as a corporation, and is existing and in
good standing, under the laws of the State of Georgia.
(2) The Company has the corporate power to execute and deliver the
Transaction Documents, to perform its obligations thereunder, to own and use its
Assets and to conduct its business.
(3) The Company has duly authorized the execution and delivery of the
Transaction Documents and all performance by the Company thereunder and has duly
executed and delivered the Transaction Documents.
(4) The execution and delivery by the Company of the Agreement does not,
and if the Company were now to perform its obligations under the Transaction
Documents, such performance would not, result in any:
(i) violation of the Articles of Incorporation or Bylaws;
(ii) violation of any existing federal or state constitution, statute,
regulation, rule, order, or law to which the Company or the Assets are subject;
(iii) to our knowledge, breach of or default under any material written
agreements;
(iv) to our knowledge, creation or imposition of a contractual lien or
security interest in, on or against the Assets, under any material written
agreements; or
(v) violation of any judicial or administrative decree, writ, judgment or
order to which, to our knowledge, the Company or the Assets are subject.
With your permission we have assumed that the term "material written
agreements" used in clauses (iii) and (iv) above includes only those agreements
that have been identified by an officer of the Company as being agreements
which, if terminated or not renewed, would have a materially adverse effect on
the Company's business, operations or condition (financial or otherwise).
(5) Assuming compliance with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and compliance with applicable securities laws, no
consent, approval, authorization or other action by, or filing with, any
governmental authority of the United States or the State of Georgia is required
for Company's execution and delivery of the Transaction Documents and
consummation of the Transaction.
(6) The Transaction Documents are enforceable against the Company.
