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DRAFT: 2/2/96
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
XXXXX-XXXXX COMMUNICATIONS, INC.
AND
HHD ACQUISITION CORP.
AND
DIMARK, INC.
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TABLE OF CONTENTS
ARTICLE I
THE MERGER
SECTION 1.01 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Closing; Closing Date; Effective Time . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.03. Effect of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.04. Certificate of Incorporation; Bylaws . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.05. Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Merger Consideration; Conversion and Cancellation of Securities . . . . . . . . . 3
SECTION 2.02. Exchange and Surrender of Certificates . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization and Qualification; Subsidiaries . . . . . . . . . . . . . . . . . . . 6
SECTION 3.02. Charter and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.03. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.04. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.05. No Conflict; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.06. Permits; Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.07. SEC Reports; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.08. Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.09. Absence of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.10. Employee Benefit Plans; Labor Matters . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.11. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.12. Tax Matters; Pooling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.13. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.14. Certain Business Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.16. Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.17. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.18. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.19. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.20. Certain Contracts and Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 19
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SECTION 3.21. Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.22. Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.23 Pooling Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
SECTION 4.01. Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.02. Charter and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.03. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.04. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.05. No Conflict; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.06. Permits; Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.07. SEC Reports; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.08. Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.09. Absence of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.11. Tax Matters; Pooling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.12. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.13. Certain Business Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.14. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.15. Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.16. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.17. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.18. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.19. Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.20. Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.21. Pooling Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE V
COVENANTS
SECTION 5.01. Affirmative Covenants of the Company . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.02. Negative Covenants of the Company . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.03. Affirmative and Negative Covenants of Parent . . . . . . . . . . . . . . . . . . . 31
SECTION 5.04. Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Meetings of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.02. Registration Statement; Joint Proxy Statement/Prospectus . . . . . . . . . . . . . 33
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SECTION 6.03. Appropriate Action; Consents; Filings . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.04. Affiliates; Pooling; Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.05. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.06. NYSE Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.07. Comfort Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.08 Stock Option Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.09 Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.10 Merger Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.11 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VII
CLOSING CONDITIONS
SECTION 7.01. Conditions to Obligations of Each Party Under This Agreement . . . . . . . . . . . 40
SECTION 7.02. Additional Conditions to Obligations of the Parent Companies . . . . . . . . . . . 41
SECTION 7.03. Additional Conditions to Obligations of the Company . . . . . . . . . . . . . . . 43
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.02. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.03. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.04. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.05. Fees, Expenses and Other Payments . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Effectiveness of Representations, Warranties and Agreements . . . . . . . . . . . 49
SECTION 9.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 9.03. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 9.04. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 9.05. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 9.06. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 9.07. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 9.08. Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 9.09. Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 9.10. Failure or Indulgence Not Waiver; Remedies Cumulative . . . . . . . . . . . . . . 53
SECTION 9.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 9.12. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 9.13. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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SECTION 9.14 Irrevocable Proxy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
EXHIBITS
Exhibit A Company Affiliate's Agreement
Exhibit B Parent Affiliate's Agreement
Exhibit C Irrevocable Proxy of Certain Stockholders of the Company
Exhibit D Irrevocable Proxy of Certain Stockholders of Parent
Exhibit E Opinion of Company Counsel
Exhibit F Opinion of Parent Counsel
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of February __, 1996 (this
"Agreement"), is by and among Xxxxx-Xxxxx Communications, Inc., a Delaware
corporation ("Parent"), HHD Acquisition Corp., a New Jersey corporation and
wholly owned subsidiary of Parent ("Merger Sub"), and DiMark, Inc., a New
Jersey corporation (the "Company"). Parent and Merger Sub are sometimes
referred to herein as the "Parent Companies."
WHEREAS, Merger Sub, upon the terms and subject to the conditions of
this Agreement and in accordance with the Business Corporation Act of the State
of New Jersey ("New Jersey Law"), will merge with and into the Company (the
"Merger"), and pursuant thereto, the issued and outstanding shares of common
stock, no par value, of the Company ("the Company Common Stock") not owned
directly or indirectly by the Company or the Parent Companies or their
respective subsidiaries will be converted into the right to receive shares of
common stock, $1.00 par value, of Parent (the "Parent Common Stock"), as set
forth herein;
WHEREAS, the Board of Directors of the Company has determined that the
Merger is fair to, and in the best interests of, the Company and its
stockholders and has approved and adopted this Agreement and the transactions
contemplated hereby;
WHEREAS, the Board of Directors of Parent has determined that the
Merger is fair to, and in the best interests of, Parent and its stockholders
and has approved and adopted this Agreement and the transactions contemplated
hereby;
WHEREAS, the Board of Directors of Merger Sub has approved and adopted
this Agreement and Parent, as the sole stockholder of Merger Sub, has approved
and adopted this Agreement;
WHEREAS, for federal income tax purposes, it is intended that the
Merger qualify as a reorganization under the provisions of Section 368(a) of
the United States Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Merger is intended to be treated as a "pooling of
interests" for financial accounting purposes;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
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ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with New Jersey Law,
at the Effective Time (as defined in Section 1.02 of this Agreement), Merger
Sub shall be merged with and into the Company. As a result of the Merger, the
separate corporate existence of Merger Sub shall cease and the Company shall
continue as the surviving corporation of the Merger (the "Surviving
Corporation"). Certain terms used in this Agreement are defined in Section
9.03 hereof.
SECTION 1.02. Closing; Closing Date; Effective Time. Unless this
Agreement shall have been terminated pursuant to Section 8.01, and subject to
the satisfaction or waiver of the conditions set forth in Article VII, the
consummation of the Merger and the closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Xxxxxx &
Xxxx, L.L.P., 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx as soon as practicable (but in
any event within two business days) after the satisfaction or waiver of the
conditions set forth in Article VII, or at such other date, time and place as
Parent and the Company may agree; provided, that the conditions set forth in
Article VII shall have been satisfied or waived at or prior to such time. The
date on which the Closing takes place is referred to herein as the "Closing
Date". As promptly as practicable on the Closing Date, the parties hereto
shall cause the Merger to be consummated by filing a certificate of merger with
the Secretary of State of the State of New Jersey, in such form as required by,
and executed in accordance with the relevant provisions of, New Jersey Law (the
date and time of such filing, or such later date or time agreed upon by Parent
and the Company and set forth therein, being the "Effective Time"). For all
Tax purposes, the Closing shall be effective at the end of the day on the
Closing Date.
SECTION 1.03. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of New
Jersey Law.
SECTION 1.04. Certificate of Incorporation; Bylaws. At the
Effective Time, the certificate of incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation and thereafter shall continue to be
its certificate of incorporation until amended as provided therein and pursuant
to New Jersey Law. The bylaws of the Company, as in effect immediately prior
to the Effective Time, shall be the bylaws of the Surviving Corporation and
thereafter shall continue to be its bylaws until amended as provided therein
and pursuant to New Jersey Law.
SECTION 1.05. Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation, each to hold office in accordance with the charter and bylaws of
the Surviving Corporation, and the officers of the Company immediately prior to
the Effective Time shall be the officers of the Surviving Corporation, each to
hold office in accordance with the bylaws of the Surviving Corporation, in each
case until their respective successors are duly elected or appointed and
qualified.
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ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Merger Consideration; Conversion and Cancellation of
Securities. At the Effective Time, by virtue of the Merger and without any
action on the part of the Parent Companies, the Company or their respective
stockholders:
(a) Subject to the other provisions of this Article II,
each share of Company Common Stock issued and outstanding immediately
prior to the Effective Time (excluding any Company Common Stock
described in Section 2.0l (b) of this Agreement) shall be converted
into the right to receive .656 shares of Parent Common Stock (the
"Exchange Ratio"). Notwithstanding the foregoing, if between the date
of this Agreement and the Effective Time the outstanding shares of
Parent Common Stock or Company Common Stock shall have been changed
into a different number of shares or a different class, by reason of
any stock dividend, subdivision, reclassification, recapitalization,
split, combination or exchange of shares, the Exchange Ratio shall be
correspondingly adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of
shares.
(b) Notwithstanding any provision of this Agreement to
the contrary, each share of Company Common Stock held in the treasury
of the Company and each share of Company Common Stock owned by Parent
or any direct or indirect wholly owned subsidiary of Parent or of the
Company immediately prior to the Effective Time shall be canceled and
extinguished without any conversion thereof and no payment shall be
made with respect thereto.
(c) All shares of the Company Common Stock shall cease to
be outstanding and shall automatically be canceled and retired, and
each certificate previously evidencing the Company Common Stock
outstanding immediately prior to the Effective Time (other than
Company Common Stock described in Section 2.01(b) of this Agreement)
("Converted Shares") shall thereafter represent the right to receive,
subject to Section 2.02(e) of this Agreement, that number of shares of
Parent Common Stock determined pursuant to the Exchange Ratio and, if
applicable, cash pursuant to Section 2.02(e) of this Agreement (the
"Merger Consideration"). The holders of certificates previously
evidencing Converted Shares shall cease to have any rights with
respect to such Converted Shares except as otherwise provided herein
or by law. Such certificates previously evidencing Converted Shares
shall be exchanged for certificates evidencing whole shares of Parent
Common Stock upon the surrender of such Certificates in accordance
with the provisions of Section 2.02 of this Agreement, without
interest. No fractional shares of Parent Common Stock shall be issued
in connection with the Merger and, in lieu thereof, a cash payment
shall be made pursuant to Section 2.02(e) of this Agreement.
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(d) Each share of common stock, par value $1.00 per
share, of Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into one share of common stock, par
value $1.00 per share, of the Surviving Corporation.
SECTION 2.02. Exchange and Surrender of Certificates.
(a) As soon as practicable after the Effective Time, each
holder of a certificate previously evidencing Converted Shares shall
be entitled, upon surrender thereof to Parent or its transfer agent
(as specified in the letter of transmittal described in Section 2.02
(c)), to receive in exchange therefor a certificate or certificates
representing the number of whole shares of Parent Common Stock into
which the Converted Shares so surrendered shall have been converted as
aforesaid, in such denominations and registered in such names as such
holder may request. Each holder of Converted Shares who would
otherwise be entitled to a fraction of a share of Parent Common Stock
shall, upon surrender of the certificates representing such shares
held by such holder as aforesaid, be paid an amount in cash in
accordance with the provisions of Section 2.02(e). Until so
surrendered and exchanged, each certificate previously evidencing
Converted Shares shall represent solely the right to receive Parent
Common Stock and cash in lieu of fractional shares. Unless and until
any such certificates shall be so surrendered and exchanged, no
dividends or other distributions payable to the holders of record of
Parent Common Stock as of any time on or after the Effective Time
shall be paid to the holders of such certificates previously
evidencing Converted Shares; provided, however, that, upon any such
surrender and exchange of such certificates, there shall be paid to
the record holders of the certificates issued and exchanged therefor
(i) the amount, without interest thereon, of dividends and other
distributions, if any, with a record date on or after the Effective
Time theretofore paid with respect to such whole shares of Parent
Common Stock, and (ii) at the appropriate payment date, the amount of
dividends or other distributions, if any, with a record date on or
after the Effective Time but prior to surrender and a payment date
occurring after surrender, payable with respect to such whole shares
of Parent Common Stock. Notwithstanding the foregoing, no party
hereto (or Parent's transfer agent) shall be liable to any former
holder of Converted Shares for any cash, Parent Common Stock or
dividends or distributions thereon delivered to a public official
pursuant to applicable abandoned property, escheat or similar law.
(b) All shares of Parent Common Stock issued upon the
surrender for exchange of certificates previously representing
Converted Shares in accordance with the terms hereof (including any
cash paid pursuant to Section 2.02 (e)) shall be deemed to have been
issued in full satisfaction of all rights pertaining to such Converted
Shares. At and after the Effective Time, there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of Company Common Stock that was outstanding immediately
prior to the Effective Time. If, after the Effective Time,
certificates which previously evidenced Converted Shares are presented
to the Surviving Corporation for any reason, they shall be canceled
and exchanged as provided in this Article II.
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(c) As promptly as practicable after the Effective Time,
Parent will send or cause to be sent to each record holder of Company
Common Stock at the Effective Time a letter of transmittal and other
appropriate materials for use in surrendering certificates as
contemplated hereby.
(d) If any certificate for shares of Parent Common Stock
is to be issued in a name other than that in which the certificate
surrendered in exchange therefor is registered, it shall be a
condition of the issuance thereof that the certificate so surrendered
shall be properly endorsed, with signatures guaranteed, and otherwise
in proper form for transfer and that the person requesting such
exchange shall have paid to Parent or its transfer agent any transfer
or other taxes required by reason of the issuance of a certificate for
shares of Parent Common Stock in any name other than that of the
registered holder of the certificate surrendered, or established to
the satisfaction of Parent or its transfer agent that such tax has
been paid or is not payable.
(e) No certificates or scrip evidencing fractional shares
of Parent Common Stock shall be issued upon the surrender for exchange
of certificates, and such fractional share interests will not entitle
the owner thereof to any rights of a stockholder of Parent. In lieu
of any such fractional shares, each holder of a certificate previously
evidencing Converted Shares, upon surrender of such certificate for
exchange pursuant to this Article II, shall be paid an amount in cash
(without interest), rounded to the nearest cent, determined by
multiplying (a) the per share closing price as reported by the Wall
Street Journal on the New York Stock Exchange Composite Tape of Parent
Common Stock on the date of the Effective Time (or, if shares of
Parent Common Stock do not trade on the New York Stock Exchange (the
"NYSE") on such date, the first date of trading of Parent Common Stock
on the NYSE after the Effective Time) by (b) the fractional interest
to which such holder would otherwise be entitled (after taking into
account all Converted Shares held of record by such holder at the
Effective Time).
(f) Parent shall be entitled to deduct and withhold from
the consideration otherwise payable pursuant to this Agreement to any
former holder of Converted Shares such amounts as Parent (or any
affiliate thereof) is required to deduct and withhold with respect to
the making of such payment under the Code, or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld
by Parent, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the former holder of the
Converted Shares in respect of which such deduction and withholding
was made by Parent.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise disclosed on the disclosure schedule delivered to
Parent by the Company on the date hereof (the "Company Disclosure Schedule")
the Company hereby represents and warrants to the Parent Companies that:
SECTION 3.01. Organization and Qualification; Subsidiaries. Each
of the Company and its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, has all requisite power and authority to own,
lease and operate its properties and to carry on its business as it is now
being conducted and is duly qualified and in good standing to do business in
each jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary,
other than where the failure to be so duly qualified and in good standing would
not have a Company Material Adverse Effect. The term "Company Material Adverse
Effect" as used in this Agreement shall mean any change or effect that,
individually or when taken together with all other such changes or effects,
would be materially adverse to the business, operations, assets, financial
condition, results of operations or prospects of the Company and its
subsidiaries, taken as a whole. Schedule 3.01 of the Company Disclosure
Schedule sets forth, as of the date of this Agreement, a true and complete list
of all the Company's directly or indirectly owned subsidiaries, together with
the jurisdiction of incorporation or organization of each subsidiary and the
percentage of each subsidiary's outstanding capital stock or other equity
interests owned by the Company or another subsidiary of the Company. Except as
set forth on Schedule 3.01, neither the Company nor any of its subsidiaries
owns an equity interest in any other partnership or joint venture arrangement
or other business entity.
SECTION 3.02. Charter and Bylaws. The Company has heretofore
furnished to Parent complete and correct copies of the charter and the bylaws
or the equivalent organizational documents, in each case as amended or
restated, of the Company and each of its subsidiaries. Neither the Company nor
any of its subsidiaries is in violation of any of the provisions of its charter
or bylaws (or equivalent organizational documents).
SECTION 3.03. Capitalization.
(a) The authorized capital stock of the Company consists
of (i) 20,000,000 shares of Company Common Stock, of which as of
January 23, 1996 (l) 9,209,188 shares were issued and outstanding, (2)
62,500 shares were held in treasury by the Company, (3) 2,343,332
shares were reserved for future issuance pursuant to outstanding stock
options ("Stock Options") granted pursuant to the Equity Plan for
Directors or the Amended and Restated 1986 Employee Stock Option Plan
(collectively, the "Option Plans" and individually, an "Option Plan"),
(4) 250,000 shares were reserved for issuance upon exercise of certain
outstanding warrants, and (5) approximately 440,658 shares were
reserved for issuance pursuant to earnouts; and (ii) 2,000,000 shares
of preferred stock,
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par value $.10 per share (the "Company Preferred Stock"), of which no
shares are issued and outstanding. Except as described in this
Section 3.03 or in Schedule 3.03(a) of the Company Disclosure
Schedule, as of the date of this Agreement, no shares of capital stock
of the Company are reserved for any purpose. Except as set forth on
Schedule 3.03(a) each of the outstanding shares of capital stock of
the Company and its subsidiaries is duly authorized, validly issued,
and fully paid and nonassessable, and has not been issued in violation
of (nor are any of the authorized shares of capital stock of the
Company and its subsidiaries subject to) any preemptive or similar
rights created by statute, the charter or bylaws (or the equivalent
organizational documents) of the Company or any of its subsidiaries,
or any agreement to which the Company or any of its subsidiaries is a
party or bound, and such outstanding shares or other equity interests
owned by the Company or a subsidiary of the Company are owned free and
clear of all security interests, liens, claims, pledges, agreements,
limitations on the Company's or such subsidiary's voting rights,
charges or other encumbrances of any nature whatsoever.
(b) Except as set forth in Section 3.03(a) above or in
Schedule 3.03(b) (i) to the Company Disclosure Schedule, there are no
options, warrants or other rights, agreements, arrangements or
commitments of any character to which the Company or any of its
subsidiaries is a party relating to the issued or unissued capital
stock of the Company or any of its subsidiaries or obligating the
Company or any of its subsidiaries to grant, issue or sell any shares
of the capital stock of the Company or any of its subsidiaries, by
sale, lease, license or otherwise. Except as set forth in Schedule
3.03(b)(ii) to the Company Disclosure Schedule, there are no
obligations, contingent or otherwise, of the Company or any of its
subsidiaries to (A) repurchase, redeem or otherwise acquire any shares
of the Company Common Stock or other capital stock of the Company, or
the capital stock or other equity interests of any subsidiary of the
Company; or (B) (other than advances to subsidiaries in the ordinary
course of business) provide material funds to, or make any material
investment in (in the form of a loan, capital contribution or
otherwise), or provide any guarantee with respect to the obligations
of, any subsidiary of the Company or any other person. Except as
described in Schedule 3.03(b)(iii) to the Company Disclosure Schedule,
neither the Company nor any of its subsidiaries (x) directly or
indirectly owns, (y) has agreed to purchase or otherwise acquire or
(z) holds any interest convertible into or exchangeable or exercisable
for, 5% or more of the capital stock of any corporation, partnership,
joint venture or other business association or entity (other than the
subsidiaries of the Company set forth in Schedule 3.01 of the Company
Disclosure Schedule). Except as set forth in Schedule 3.03(b)(iv) of
the Company Disclosure Schedule and except for any agreements,
arrangements or commitments between the Company and its subsidiaries
or between such subsidiaries, there are no agreements, arrangements or
commitments of any character (contingent or otherwise) pursuant to
which any person is or may be entitled to receive any payment based on
the revenues or earnings, or calculated in accordance therewith, of
the Company or any of its subsidiaries. There are no voting trusts,
proxies or other agreements or understandings to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound with respect to the voting of any shares of
capital stock of the Company or any of its subsidiaries.
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13
(c) The Company has delivered to Parent complete and
correct copies of (i) each of the Option Plans and the forms of Stock
Options issued pursuant to each such Option Plan, including all
amendments thereto and (ii) all Stock Options which are not in the
respective forms thereof provided under clause (i) above. Schedule
3.03(c) to the Company Disclosure Schedule sets forth a complete and
correct list of all outstanding Stock Options, including any not
granted pursuant to the Option Plans, setting forth as of the date
hereof (i) the number and type of Stock Options outstanding,
specifying the Option Plan under which such Stock Options were issued,
(ii) the exercise price of each outstanding Stock Option, (iii) the
number of Stock Options exercisable, and (iv) assuming no amendment or
waiver of the terms thereof, the number of Stock Options which will
become exercisable on account of the Merger or any other transaction
contemplated hereby.
SECTION 3.04. Authority. The Company has all requisite corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby
(subject to, with respect to the Merger, the adoption of this Agreement by the
stockholders of the Company as described in Section 3.16 hereof). The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby have been duly authorized
by all necessary corporate action and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby (subject to, with respect to the Merger,
the adoption of this Agreement by the stockholders of the Company as described
in Section 3.16 hereof). This Agreement has been duly executed and delivered
by the Company and, assuming the due authorization, execution and delivery
thereof by the Parent Companies, constitutes the legal, valid and binding
obligation of the Company.
SECTION 3.05. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the
Company does not, and the consummation of the transactions
contemplated hereby will not (i) conflict with or violate the charter
or bylaws, or the equivalent organizational documents, in each case as
amended or restated, of the Company or any of its subsidiaries, (ii)
conflict with or violate any material federal, state, foreign or local
law, statute, ordinance, rule, regulation, order, judgment or decree
(collectively, "Laws") applicable to the Company or any of its
subsidiaries or by which any of their respective properties is bound
or subject or (iii) except as set forth on Schedule 3.05 to the
Company Disclosure Schedule, result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would
become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or require payment under,
or result in the creation of a lien or encumbrance on any of the
properties or assets of the Company or any of its subsidiaries
pursuant to, any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its subsidiaries is a party
or by or to which the Company or any of its subsidiaries or any of
their respective properties is bound or subject. The Board of
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14
Directors of the Company has taken all actions necessary under New
Jersey law, including approving the transactions contemplated by this
Agreement and taking appropriate actions under the New Jersey
Shareholder Protection Act, to ensure that restrictions on business
combinations set forth in the New Jersey Shareholder Protection Act do
not, and will not apply with respect or as a result of the
transactions contemplated by this Agreement.
(b) The execution and delivery of this Agreement by the
Company does not, and consummation of the transactions contemplated
hereby will not, require the Company to obtain any consent, license,
permit, approval, waiver, authorization or order of, or to make any
filing with or notification to, any governmental or regulatory
authority, domestic or foreign (collectively, "Governmental
Entities"), except for applicable requirements, if any, of the
Securities Act of 1933, as amended (the "Securities Act"), and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
state securities or blue sky laws ("Blue Sky Laws"), and the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and the filing and recordation of appropriate merger
documents as required by New Jersey Law, and applicable requirements,
if any, of the Code and state and local tax laws, and where failure to
obtain such consents, approvals, authorizations or permits, or to make
such filings or notifications, would not prevent or delay consummation
of any of the transactions contemplated hereby in any material
respect, or otherwise prevent the Company from performing its
obligations under this Agreement in any material respect, and would
not, individually or in the aggregate, have a Company Material Adverse
Effect.
SECTION 3.06. Permits; Compliance. To the knowledge of the
Company, each of the Company and its subsidiaries is in possession of all
material franchises, grants, authorizations, licenses, permits, easements,
variances, exemptions, consents, certificates, approvals and orders necessary
to own, lease and operate its properties and to carry on its business as it is
now being conducted (collectively, the "Company Permits"), and there is no
action, proceeding or, to the knowledge of the Company investigation pending or
threatened regarding suspension or cancellation of any of the Company Permits.
Neither the Company nor any of its subsidiaries is in material conflict with,
or in material default or violation of (a) any Law applicable to the Company or
any of its subsidiaries or by or to which any of their respective properties is
bound or subject or (b) any of the Company Permits. Since February 28, 1995,
neither the Company nor any of its subsidiaries has received from any
Governmental Entity any written notification with respect to possible material
conflicts, defaults or violations of Laws.
SECTION 3.07. SEC Reports; Financial Statements.
(a) Since February 28, 1993, the Company and its
subsidiaries have filed all forms, reports, statements and other
documents required to be filed with the Securities and Exchange
Commission (the "SEC") including, without limitation, (l) all Annual
Reports on Form l0-K, (2) all Quarterly Reports on Form l0-Q, (3) all
proxy statements relating to meetings of stockholders (whether annual
or special), and (4) all Current
Page 9
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Reports on Form 8-K (collectively referred to as the "Company SEC
Reports"). The Company SEC Reports, including all Company SEC Reports
filed after the date of this Agreement and prior to the Effective
Time, (i) were or will be prepared in all material respects in
accordance with the requirements as to form of the Securities Act,
Exchange Act and the rules and regulations thereunder, and (ii) did
not at the time they were filed or will not at the time they are
filed, contain any untrue statement of material fact or omit to state
a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) Each of the consolidated financial statements
(including, in each case, any related notes thereto) and each of the
financial statements (including any related notes thereto) relating to
subsidiaries of the Company which are not otherwise contained in the
consolidated financial statements filed in the Company SEC Reports
prior to the Effective Time (i) have been or will be prepared in
accordance with the published rules and regulations of the SEC and
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except (A) to the extent required by
changes in generally accepted accounting principles and (B) with
respect to the Company SEC Reports filed prior to the date of this
Agreement, as may be indicated in the notes thereto) and (ii) fairly
present or will fairly present the financial position of the Company
and its subsidiaries (as applicable, on a consolidated basis) as of
the respective dates thereof and the results of operations and cash
flows (as applicable, on a consolidated basis) for the periods
indicated (including reasonable estimates of normal and recurring
year-end adjustments), except that (x) any unaudited interim financial
statements were or will be subject to normal and recurring year-end
adjustments and (y) any pro forma financial information contained in
such financial statements is not necessarily indicative of the
financial position of the Company and its subsidiaries as of the
respective dates thereof and the results of operations and cash flows
for the periods indicated.
SECTION 3.08. Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Reports filed prior to the date of this Agreement
or as contemplated by this Agreement or as set forth in Schedule 3.08 of the
Company Disclosure Schedule, since November 30, 1995 the Company and its
subsidiaries have conducted their respective businesses only in the ordinary
course and in a manner consistent with past practice and there has not been:
(i) any material damage, destruction or loss (whether or not covered by
insurance) with respect to any material assets of the Company or any of its
subsidiaries; (ii) any material change by the Company or its subsidiaries in
their accounting methods, principles or practices; (iii) except for dividends
by a subsidiary of the Company to the Company or another subsidiary of the
Company, any declaration, setting aside or payment of any dividends or
distributions in respect of shares of the Company Common Stock (other than a
5:4 stock dividend paid on May 15, 1995) or the shares of stock of, or other
equity interests in, any subsidiary of the Company, or any redemption, purchase
or other acquisition by the Company or any of its subsidiaries of any of the
Company's securities or any of the securities of any subsidiary of the Company;
(iv) any increase in the benefits under, or the establishment or amendment of,
any bonus, insurance, severance, deferred compensation, pension, retirement,
profit sharing, stock option (including,
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16
without limitation, the granting of stock options, stock appreciation rights,
performance awards, or restricted stock awards), stock purchase or other
employee benefit plan, or any increase in the compensation payable or to become
payable to directors, officers or employees of the Company or its subsidiaries,
except for (A) increase in salaries or wages payable or to become payable in
the ordinary course of business and consistent with past practice or (B) the
granting of stock options pursuant to the Option Plans in the ordinary course
of business to employees of the Company or its subsidiaries who are not
directors or executive officers of the Company; (v) any revaluation by the
Company or any of its subsidiaries of any of their assets, including the
writing down of the value of inventory or the writing down or off of notes or
accounts receivable, other than in the ordinary course of business and
consistent with past practices; (vi) any entry by the Company or any of its
subsidiaries into any commitment or transaction material to the Company and its
subsidiaries, taken as a whole (other than this Agreement and the transactions
contemplated hereby); (vii) any material increase in indebtedness for borrowed
money; or (viii) any Company Material Adverse Effect.
SECTION 3.09. Absence of Litigation. Except as set forth in
Schedule 3.09 of the Company Disclosure Schedule, there is no claim, action,
suit, litigation, proceeding, arbitration or, to the knowledge of the Company,
investigation of any kind, at law or in equity (including actions or
proceedings seeking injunctive relief), pending or, to the knowledge of the
Company, threatened against the Company or any of its subsidiaries or any
properties or rights of the Company or any of its subsidiaries (except for
claims, actions, suits, litigation, proceedings, arbitrations or investigations
which could not reasonably be expected to have a Company Material Adverse
Effect), and neither the Company nor any of its subsidiaries is subject to any
continuing order of, consent decree, settlement agreement or other similar
written agreement with, or, to the knowledge of the Company, continuing
investigation by, any Governmental Entity, or any judgment, order, writ,
injunction, decree or award of any Government Entity or arbitrator, including,
without limitation, cease-and-desist or other orders.
SECTION 3.10. Employee Benefit Plans; Labor Matters.
(a) Set forth in Schedule 3.10(a) to the Company
Disclosure Schedule is a complete and correct list of all "employee
benefit plans" (as defined in the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")), all plans or policies providing
for "fringe benefits" (including but not limited to vacation, paid
holidays, personal leave, employee discount, educational benefit or
similar programs), and each other bonus, incentive compensation,
deferred compensation, profit sharing, stock, severance, retirement,
health, life, disability, group insurance, employment, stock option,
stock purchase, stock appreciation right, supplemental unemployment,
layoff, consulting, or any other similar plan, agreement, policy or
understanding (whether written or oral, qualified or nonqualified,
currently effective or terminated), and any trust, escrow or other
agreement related thereto, which (a) is or has been established,
maintained or contributed to by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate has any
liability, or (b) provides benefits, or describes policies or
procedures applicable, to any officer, employee, director, former
officer, former employee or former director of the Company or any
ERISA Affiliate, or any
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dependent thereof, regardless of whether funded (each, an "Employee
Plan," and collectively, the "Employee Plans").
(b) To the Company's knowledge, no written or oral
representations have been made to any employee or officer or former
employee or officer of the Company or its subsidiaries promising or
guaranteeing any coverage under any employee welfare plan for any
period of time beyond the end of the current plan year (except to the
extent of coverage required under Code Section 4980B). The
consummation of the transactions contemplated by this Agreement will
not accelerate the time of payment or vesting, or increase the amount
of compensation (including amounts due under Employee Plans) due to
any employee, officer, former employee or former officer of the
Company, or its subsidiaries.
(c) All employees of the Company and its subsidiaries are
terminable at the will of the Company, and neither the Company, nor
any present or former director, or officer, employee or agent of the
Company has made any binding commitments of the Company or any of its
subsidiaries, written or verbal, to any present or former director,
officer, agent or employee concerning his term, condition, benefits or
employment other than as set forth in Schedule 3.10(c).
(d) With respect to each Employee Plan, the Company has
furnished to Buyer true, correct and complete copies of (i) the plan
documents and summary plan description; (ii) the most recent
determination letter received from the Internal Revenue Service, if
applicable; (iii) the annual reports required to be filed for the two
most recent plan years of each such Employee Plan; (iv) all related
trust agreements, insurance contracts or other funding agreements
which implement such Employee Plan; and (v) all other documents,
records or other materials related thereto reasonably requested by
Buyer.
(e) Set forth on Schedule 3.10(e) to the Company
Disclosure Schedule is a complete and correct list of all employee
pension benefit plans maintained by the Company or any ERISA
Affiliate; and (b) to the Company's knowledge, each such plan meets
the qualification requirements of the Code in form and operation, and
such plan, and each trust (if any) forming a part thereof, has
received a favorable determination letter from the Internal Revenue
Service as to the qualification under the Code of such plan and the
tax-exempt status of such related trust, and nothing has occurred
since the date of such determination letter that may materially
adversely affect the qualification of such plan or the tax-exempt
status of such related trust. All Employee Plans purporting to
qualify for special tax treatment under any provision of the Code,
including, without limitation, Code Sections 79, 105, 106, 125, 127,
129, 132, 422 or 501(c)(9) meet the requirement of such sections in
form and in operation. All reports, returns or filings required by
any government agency have been timely filed in accordance with all
applicable requirements or the Company intends to do so.
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18
(f) No condition exists that would subject the Company,
any ERISA Affiliate or Parent to any excise tax, penalty tax or fine
related to any Employee Plan.
(g) There are no agreements which will or may provide
payments to any officer, employee, shareholder, or highly compensated
individual which will be "parachute payments" under Code Section 280G
that are nondeductible to the Company or subject to tax under Code
Section 4999 for which the Company or any ERISA Affiliate would have
withholding liability.
(h) There is no Employee Plan that is subject to Part 3
of Title I of ERISA or Title IV of ERISA; each Employee Plan has been
operated in all respects in compliance with ERISA, the Code and all
other applicable laws; none of the Employee Plans is a "multiple
employer plan" or "multiemployer plan" (as described or defined in
ERISA or the Code), nor has the Company or any ERISA Affiliate ever
contributed or been required to contribute to any such plan; there are
no material unfunded liabilities existing under any Employee Plans
other than contributions due in the ordinary course of business, and
each Employee Plan could be terminated as of the Closing Date without
any material liability to the Parent, the Company or any ERISA
Affiliate.
(i) There are no actions, suits, claims, audits, or
investigations pending or, to the knowledge of the Company, threatened
against, or with respect to, any of the Employee Plans or their
assets; and all contributions required to be made to the Employee
Plans have been made timely or will be timely made as in the ordinary
course of business.
(j) Neither the Company nor any of its subsidiaries is a
party to any collective bargaining or other labor union contract. No
collective bargaining agreement is being negotiated by the Company or
any of its subsidiaries. The Company and its subsidiaries are in
compliance with all applicable laws respecting employment, employment
practices and wages and hours. There is no pending or threatened
labor dispute, strike or work stoppage against the Company or any of
its subsidiaries which may interfere with the respective business
activities of the Company or any of its subsidiaries. None of the
Company, its subsidiaries or any of their respective representatives
or employees has committed any unfair labor practices in connection
with the operation of the respective businesses of the Company or its
subsidiaries, and there is no pending or threatened charge or
complaint against the Company or any of its subsidiaries by the
National Labor Relations Board or any comparable state agency.
(k) Neither the Company nor any of its subsidiaries is a
party to or is bound by any severance agreements, programs, policies,
plans or arrangements, whether or not written. Schedule 3.10(k) of
the Company Disclosure Schedule sets forth, and the Company has
provided to Parent true and correct copies of, (i) all employment
agreements with officers or employees of the Company or its
subsidiaries; (ii) all agreements with consultants of the Company or
its subsidiaries obligating the Company or any subsidiary to make
annual cash payments in an amount exceeding $50,000; and (iii) all
non-competition agreements with the Company.
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(l) Neither the Company nor any of its subsidiaries has
amended or taken any other action with respect to any of the Employee
Plans or any of the plans, programs, agreements, policies or other
arrangements described in Section 3.10(d) of this Agreement since
February 28, 1995.
SECTION 3.11. Taxes.
(a) Except for such matters as would not have a Company
Material Adverse Effect, and except as set forth on Schedule 3.11(a)
to the Company Disclosure Schedule, (i) all returns and reports ("Tax
Returns") of or with respect to any Tax which is required to be filed
on or before the Closing Date by or with respect to the Company or any
its subsidiaries have been or will be duly and timely filed, (ii) all
items of income, gain, loss, deduction and credit or other items
required to be included in each such Tax Return have been or will be
so included and all information provided in each such Tax Return is
true, correct and complete, (iii) all Taxes which have become or will
become due with respect to the period covered by each such Tax Return
have been or will be timely paid in full, (iv) all withholding Tax
requirements imposed on or with respect to the Company or any of its
subsidiaries have been or will be satisfied in full in all respects,
and (v) no penalty, interest or other charge is or will become due
with respect to the late filing of any such Tax Return or late payment
of any such Tax.
(b) All Tax Returns of or with respect to the Company or
any of its subsidiaries, with unexpired or extended statutes of
limitations, which have not been audited by the applicable
governmental authority are set forth in Schedule 3.11(b) to the
Company Disclosure Schedule.
(c) Except as set forth on Schedule 3.11(c) to the
Company Disclosure Schedule, there is not in force any extension of
time with respect to the due date for the filing of any Tax Return of
or with respect to the Company or any its subsidiaries or any waiver
or agreement for any extension of time for the assessment, collection
or payment of any Tax of or with respect to the Company or any of its
subsidiaries.
(d) There are no pending audits, actions, proceedings,
investigations, disputes or claims with respect to or against the
Company or any of its subsidiaries for or with respect to any Taxes,
no assessment, deficiency or adjustment has been assessed or proposed
with respect to any Tax Return of or with respect to the Company or
any of its subsidiaries, and there is no reasonable basis on which any
claim for material Taxes can be asserted against the Company or any of
its subsidiaries, other than those disclosed (and to which are
attached true and complete copies of all audit or similar reports) on
Schedule 3.11(d) to the Company Disclosure Schedule or which would not
have a Company Material Adverse Effect.
(e) The total amounts set up as liabilities for current
and deferred Taxes in the financial statements referred to in Section
3.07 of this Agreement are sufficient to cover
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in all material respects the payment of all Taxes, whether or not
assessed or disputed, which are, or are hereafter found to be, or to
have been, due by or with respect to the Company and any of its
subsidiaries up to and through the periods covered thereby.
(f) The Company has previously delivered to Parent true
and complete copies of each written Tax allocation or sharing
agreement and a true and complete description of each unwritten Tax
allocation or sharing arrangement affecting the Company or any of its
subsidiaries.
(g) Except for statutory liens for current Taxes not yet
due, no material liens for Taxes exist upon the assets of any of the
Company or its subsidiaries.
(h) Neither the Company nor any of its subsidiaries will
be required to include any amount in income for any taxable period
beginning after February 28, 1995 as a result of a change in
accounting method for any taxable period ending on or before February
28, 1995 or pursuant to any agreement with any Tax authority with
respect to any such taxable period.
(i) Except as set forth on Schedule 3.11(i) to the
Company Disclosure Schedule, none of the property of the Company or
any of its subsidiaries is held in an arrangement for which
partnership Tax Returns are being filed, and neither the Company nor
any of its subsidiaries owns any interest in any controlled foreign
corporation (as defined in section 957 of the Code), passive foreign
investment company (as defined in section 1296 of the Code) or other
entity the income of which is required to be included in the income of
the Company or such subsidiary.
(j) Except as set forth on Schedule 3.11 (j) to the
Company Disclosure Schedule, none of the property of the Company or
any of its subsidiaries is subject to a safe-harbor lease (pursuant to
section 168(f) (8) of the Internal Revenue Code of 1954 as in effect
after the Economic Recovery Tax Act of 1981 and before the Tax Reform
Act of 1986) or is "tax-exempt use property" (within the meaning of
section 168(h) of the Code) or "tax-exempt bond financed property"
(within the meaning of section 168(g) (5) of the Code).
(k) Except as set forth on Schedule 3.11(k) to the
Company Disclosure Schedule, none of the transactions contemplated by
this Agreement will result in any Tax liability or the recognition of
any item of income or gain to the Company or any of its subsidiaries.
(l) Neither the Company nor any of its subsidiaries has
made an election under section 341(f) of the Code.
(m) Neither the Company nor any subsidiary has ever been
a member of an affiliated group of corporations (as defined in Section
1504(a) of the Internal Revenue Code) other than the group of which
the Company is currently the common parent.
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(n) Neither the Company nor any subsidiary is or has ever
been subject to Taxes in any jurisdiction outside the United States.
(o) The Company and each subsidiary will prepare any
applicable Tax Reports for the tax year ending February 29, 1996, in
an orderly manner, and Parent shall be given the opportunity to review
any such Tax Returns before they are filed.
SECTION 3.12. Tax Matters; Pooling.
(a) Neither the Company nor, to the knowledge of the
Company, any of its affiliates has taken or agreed to take any action
that would prevent the Merger from (a) constituting a reorganization
qualifying under the provisions of Section 368(a) of the Code or (b)
being treated for financial accounting purposes as a "pooling of
interests" in accordance with generally accepted accounting principles
and the rules, regulations and interpretations of the SEC (a "Pooling
Transaction").
(b) To the knowledge of the Company, there is no plan or
intention by any stockholder of the Company who owns five percent or
more of the Company Common Stock, and to the best knowledge of the
Company there is no plan or intention on the part of any of the
remaining stockholders of the Company Common Stock, to sell, exchange
or otherwise dispose of a number of shares of Parent Common Stock to
be received in the Merger that would reduce the Company stockholders'
ownership of Parent Common Stock to a number of shares having a value,
as of the Effective Time, of less than 50 percent of the value of all
of the Company Common Stock (including shares of the Company Common
Stock exchanged for cash in lieu of fractional shares of Parent Common
Stock) outstanding immediately prior to the Effective Time.
(c) Following the Merger, the Company will hold at least
90 percent of the fair market value of its net assets and at least 70
percent of the fair market value of its gross assets held immediately
prior to the Merger. For purposes of this representation, amounts
used by the Company to pay Merger expenses and all redemptions and
distributions made by the Company will be included as assets of the
Company immediately prior to the Merger.
(d) The Company and the holders of the Company Common
Stock will each pay their respective expenses, if any, incurred in
connection with the Merger.
(e) There is no intercorporate indebtedness existing
between the Company and Parent or between the Company and Merger Sub
that was issued, acquired, or will be settled at a discount.
(f) The Company is not an investment company as defined
in Section 368(a) (2) (F) (iii) and (iv) of the Code.
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(g) The Company is not under the jurisdiction of a court
in a title 11 or similar case within the meaning of section
368(a)(3)(A) of the Code.
(h) The total amount of cash to be received by
stockholders of the Company Common Stock in lieu of fractional shares
of Parent Common Stock will not exceed one percent of the total fair
market value of the Parent Common Stock (as of the Effective Time) to
be issued in the Merger.
SECTION 3.13. Affiliates. Schedule 3.13 to the Company Disclosure
Schedule identifies all persons who, to the knowledge of the Company, may be
deemed to be affiliates of the Company under Rule 145 of the Securities Act,
including, without limitation, all directors and executive officers of the
Company. Concurrently with the execution and delivery of this Agreement, the
Company has delivered to Parent an executed letter agreement, substantially in
the form of Exhibit A hereto, from certain of such persons identified on
Schedule 3.13 to the Company Disclosure Schedule who will receive Parent Common
Stock in exchange for Company Common Stock in the Merger and will deliver to
Parent within ten days after the date of this Agreement an executed letter
agreement, substantially in the form of Exhibit A hereto, from each of the
other persons identified on Schedule 3.13 who will receive Parent Common Stock
in exchange for Company Common Stock in the Merger.
SECTION 3.14. Certain Business Practices. None of the Company, any
of its subsidiaries or any directors, officers, agents or employees of the
Company or any of its subsidiaries has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties
or campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, or (iii) made any other unlawful payment.
SECTION 3.15. Environmental Matters. Except for matters disclosed
in Schedule 3.15 of the Company Disclosure Schedule and except for matters that
would not result, individually or in the aggregate with all other such matters,
in liability to the Company or any of its subsidiaries in excess of $500,000,
to the knowledge of the Company (i) the properties, operations and activities
of the Company and its subsidiaries are in compliance with all applicable
Environmental Laws; (ii) the Company and its subsidiaries and the properties
and operations of the Company and its subsidiaries are not subject to any
existing, pending or, to the knowledge of the Company, threatened action, suit,
claim, investigation, inquiry or proceeding by or before any governmental
authority under any Environmental Law; (iii) all notices, permits, licenses, or
similar authorizations, if any, required to be obtained or filed by the Company
or any of its subsidiaries under any Environmental Law in connection with any
aspect of the business of the Company or its subsidiaries, including without
limitation those relating to the treatment, storage, disposal or release of a
hazardous or otherwise regulated substance, have been duly obtained or filed
and will remain valid and in effect after the Merger, and the Company and its
subsidiaries are in compliance with the terms and conditions of all such
notices, permits, licenses and similar authorizations; (iv) the Company and its
subsidiaries have satisfied and are currently in compliance with all financial
responsibility requirements applicable to their operations and
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imposed by any governmental authority under any Environmental Law, and the
Company and its subsidiaries have not received any notice of noncompliance with
any such financial responsibility requirements; (v) to the Company's knowledge,
there are no physical or environmental conditions existing on any property of
the Company or its subsidiaries or resulting from the Company's or such
subsidiaries' operations or activities, past or present, at any location, that
would give rise to any on-site obligations imposed on the Company or any of its
subsidiaries under any Environmental Laws or that would impact the soil,
groundwater, surface water or human health; (vi) to the Company's knowledge,
since the effective date of the relevant requirements of applicable
Environmental Laws and to the extent required by such applicable Environmental
Laws, all hazardous substances generated by the Company and its subsidiaries
have been transported only by carriers authorized under Environmental Laws to
transport such substances and wastes; and (vii) the Company and its
subsidiaries have made available to Parent all internal and external
environmental audits and studies and all correspondence on substantial
environmental matters in the possession of the Company or its subsidiaries
relating to any of the current or former properties or operations of the
Company and its subsidiaries.
For purposes of this Agreement, the term "Environmental Laws" shall
mean any and all laws, statutes, ordinances, rules, regulations, or orders of
any Governmental Entity pertaining to health or the environment currently in
effect in any and all jurisdictions in which the Company and its subsidiaries
own property or conduct business, including without limitation, the Clean Air
Act, as amended, the Comprehensive Environmental, Response, Compensation, and
Liability Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976 ("RCRA"), as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Hazardous & Solid Waste Amendments Act of 1984, as
amended, the Superfund Amendments and Reauthorization Act of 1986, as amended,
any state laws implementing the foregoing federal laws, and all other
environmental conservation or protection laws. For purposes of this Agreement,
the terms "hazardous substance" and "release" have the meanings specified in
CERCLA and RCRA and shall include petroleum and petroleum products, radon and
PCB's, and the term "disposal" has the meaning specified in RCRA; provided,
however, that to the extent the laws of the state in which the property is
located establish a meaning for "hazardous substance," "release," or "disposal"
that is broader than that specified in either CERCLA or RCRA, such broader
meaning shall apply.
SECTION 3.16. Vote Required. The only vote of the holders of any
class or series of the Company capital stock necessary to approve the Merger
and adopt this Agreement is the affirmative vote of the holders of a majority
of the outstanding shares of the Company Common Stock voted at the Company
Stockholders Meeting.
SECTION 3.17. Brokers. Except as set forth in Schedule 3.17 to the
Company Disclosure Schedule, no broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company. Prior to the date of this Agreement, the Company has
delivered to Parent a complete and correct copy of all agreements
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referenced in Schedule 3.l7 to the Company Disclosure Schedule pursuant to
which such firm will be entitled to any payment relating to the transactions
contemplated by this Agreement.
SECTION 3.18. Insurance. The Company and each of its subsidiaries
are currently insured, and during each of the past five calendar years have
been insured, for reasonable amounts against such risks as companies engaged in
a similar business would, in accordance with good business practice,
customarily be insured.
SECTION 3.19. Properties. Except (i) as set forth in Schedule 3.19
to the Company Disclosure Schedule, (ii) for liens arising in the ordinary
course of business after the date hereof and (iii) properties and assets
disposed of in the ordinary course of business after November 30, 1995, the
Company and its subsidiaries have good and marketable title, free and clear of
all material liens, to all their material properties and assets, whether
tangible or intangible, real, personal or mixed, reflected in the November 30,
1995 consolidated balance sheet contained in the Company's most recent Annual
Report on Form 10-K as being owned by the Company and its subsidiaries as of
the date thereof. All buildings, and all fixtures, equipment and other
property and assets which are material to its business on a consolidated basis,
held under leases by any of the Company or its subsidiaries are held under
valid instruments enforceable by the Company or its subsidiaries in accordance
with their respective terms. Substantially all of the Company's and its
subsidiaries' equipment in regular use has been reasonably maintained and is in
good and serviceable condition, reasonable wear and tear excepted.
SECTION 3.20. Certain Contracts and Restrictions. Schedule 3.20(a)
to the Company Disclosure Schedule lists, as of the date of this Agreement,
each agreement, contract or commitment to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound (i) involving consideration during the previous twelve months in excess
of $500,000, or (ii) which is otherwise material to the financial condition,
results of operations or current or future business or operations of the
Company and its subsidiaries, taken as a whole.
SECTION 3.21. Information Supplied. Without limiting any of the
representations and warranties contained herein, no representation or warranty
of the Company herein and no statement by the Company or other information
contained in the Company Disclosure Schedule or any document incorporated
therein by reference or delivered by the Company to Parent pursuant to this
Agreement, as of the date of such representation, warranty, statement or
document, contains any untrue statement of material fact, or omits to state a
material fact necessary in order to make the statements contained therein, in
light of the circumstances under which such statements were made, not
misleading.
SECTION 3.22. Opinion of Financial Advisor. The Company has
received the opinion of Alex. Xxxxx & Sons Incorporated to the effect that, as
of the date of delivery of such opinion, the Merger Consideration to be
received by the holders of the Company Common Stock in the Merger is fair, from
a financial point of view, to such holders. The Company will promptly deliver
to Parent a true and complete written copy of such opinion.
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SECTION 3.23 Pooling Letter. The Company has received and
delivered to Parent a letter from its accountants, Xxxxxx Xxxxxxxx, L.L.P.,
stating that the Merger as described in this Agreement shall be treated as a
"pooling of interests" for financial accounting purposes.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Except as otherwise disclosed on the disclosure schedule delivered to
the Company by Parent on the date hereof (the "Parent Disclosure Schedule"),
the Parent Companies hereby represent and warrant to the Company that:
SECTION 4.01. Organization and Qualification. Each of the Parent
Companies is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted and is duly qualified and in
good standing to do business in each jurisdiction in which the nature of the
business conducted by it or the ownership or leasing of its properties makes
such qualification necessary, other than where the failure to be so duly
qualified and in good standing would not have a Parent Material Adverse Effect.
The term "Parent Material Adverse Effect" as used in this Agreement shall mean
any change or effect that, individually or when taken together with all such
other changes or effects, would be materially adverse to the business,
operations, assets, financial condition, results of operations or prospects of
Parent and its subsidiaries, taken as a whole.
SECTION 4.02. Charter and Bylaws. Parent has heretofore furnished
to the Company a complete and correct copy of the charter and bylaws, as
amended or restated, of each of the Parent Companies. None of the Parent
Companies is in violation of any of the provisions of its charter or bylaws.
SECTION 4.03. Capitalization.
(a) The authorized capital stock of Parent as of the date
hereof consists of (1) 50,000,000 shares of Parent Common Stock, of
which as of December 31, 1995, (x) 29,971,709 shares were issued and
outstanding, (2) no shares were held in treasury and (3) 3,863,328
shares were reserved for future issuance pursuant to Parent's 1984 and
1991 Stock Option Plans and Parent's 1994 Employee Stock Purchase
Plan; and (ii) 1,000,000 shares of preferred stock, par value $1.00
per share ("Parent Preferred Stock"), of which no shares are issued
and outstanding. Except as described in this Section 4.03 or in
Schedule 4.03 (a) of the Parent Disclosure Schedule, as of the date of
this Agreement, no shares of capital stock of Parent are reserved for
any purpose. The outstanding shares of capital stock of Parent are
duly authorized, validly issued, fully paid and nonassessable, and
have not been issued in violation of (nor are any of the authorized
shares of capital stock of Parent subject to) any preemptive or
similar rights created by
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statute, the charter or bylaws of Parent, or any agreement to which
Parent is a party or bound.
(b) Except as set forth in Section 4.03(a) above or in
Schedule 4.03(b)(i) to the Parent Disclosure Schedule, as of the date
hereof there are no options, warrants or other rights, agreements,
arrangements or commitments of any character to which Parent is a
party relating to the issued or unissued capital stock of Parent or
obligating Parent to grant, issue or sell any shares of the capital
stock of Parent, by sale, lease, license or otherwise. Except as set
forth in Schedule 4.03(b)(ii) to the Parent Disclosure Schedule, as of
the date hereof there are no obligations, contingent or otherwise, of
Parent or any of its subsidiaries to repurchase, redeem or otherwise
acquire any shares of Parent Common Stock or other capital stock of
Parent. There are no voting trusts, proxies or other agreements or
understandings to which Parent is a party or by which Parent is bound
with respect to the voting of any shares of capital stock of Parent.
(c) The authorized capital stock of Merger Sub consists
of 1,000 shares of common stock, par value $1.00 per share ("Merger
Sub Common Stock"). As of the date of this Agreement, 1,000 shares of
Merger Sub Common Stock were issued and outstanding and held by
Parent, all of which are duly authorized, validly issued, fully paid
and nonassessable and not subject to preemptive rights created by
statute, Merger Sub's charter or bylaws or any agreement to which
Merger Sub is a party or is bound.
(d) The shares of Parent Common Stock to be issued
pursuant to the Merger (i) will, when issued, be duly authorized,
validly issued, fully paid and nonassessable and not subject to
preemptive rights created by statute, Parent's charter or bylaws or
any agreement to which Parent is a party or is bound and (ii) will,
when issued, be listed on the NYSE.
SECTION 4.04. Authority. Each of the Parent Companies has all
requisite corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby (subject to, with respect to the issuance of the Parent
Common Stock in the Merger, the approval thereof by the holders of the Parent
Common Stock as described in Section 4.12). The execution and delivery of this
Agreement by each of the Parent Companies and the consummation by each of the
Parent Companies of the transactions contemplated hereby have been duly
authorized by all necessary corporate action and no other corporate proceedings
on the part of any of the Parent Companies are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby (subject to,
with respect to the issuance of the Parent Common Stock in the Merger, the
approval thereof by the holders of the Parent Common Stock as described in
Section 4.12). This Agreement has been duly executed and delivered by each of
the Parent Companies and, assuming the due authorization, execution and
delivery thereof by the Company, constitutes the legal, valid and binding
obligation of each of the Parent Companies.
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SECTION 4.05. No Conflict; Required Filings and Consent.
(a) The execution and delivery of this Agreement by each
of the Parent Companies does not, and the consummation of the
transactions contemplated hereby will not (i) conflict with or violate
the charter or bylaws, or the equivalent organizational documents, in
each case as amended or restated, of Parent or any of Parent's
subsidiaries, (ii) conflict with or violate any material Laws
applicable to Parent or any of Parent's subsidiaries or by which any
of their respective properties is bound or subject, or (iii) result in
any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of a lien or encumbrance on any of the
properties or assets of Parent or any of Parent's subsidiaries
pursuant to, any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or any of Parent's subsidiaries is a party
or by or to which Parent or any of Parent's subsidiaries or any of
their respective properties is bound or subject.
(b) The execution and delivery of this Agreement by each
of the Parent Companies does not, and the consummation of the
transactions contemplated hereby will not, require any of the Parent
Companies to obtain any consent, license, permit, approval, waiver,
authorization or order of, or to make any filing with or notification
to, any Governmental Entities, except for applicable requirements, if
any, of the Securities Act, the Exchange Act, Blue Sky Laws, the
Federal Communications Act, and the HSR Act and the filing and
recordation of appropriate merger documents as required by New Jersey
Law, and applicable requirements, if any, of the Code and state and
local tax laws, and where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications,
would not prevent or delay consummation of any of the transactions
contemplated hereby in any material respect, or otherwise prevent
Parent from performing its obligations under this Agreement in any
material respect, and would not, individually or in the aggregate,
have a Parent Material Adverse Effect.
SECTION 4.06. Permits; Compliance. To the knowledge of the Parent,
each of Parent and its subsidiaries is in possession of all material
franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary to own,
lease and operate its properties and to carry on its business as it is now
being conducted (collectively, the "Parent Permits"), and there is no action,
proceeding or investigation pending or threatened regarding suspension or
cancellation of any of the Parent Permits. Neither Parent nor any of its
subsidiaries is in material conflict with, or in material default or violation
of (a) any Law applicable to Parent or any of its subsidiaries or by or to
which any of their respective properties is bound or subject or (b) any of the
Parent Permits. Since December 31, 1994, neither Parent nor any of its
subsidiaries has received from any Governmental Entity any written notification
with respect to possible material conflicts, defaults or violations of Laws.
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SECTION 4.07. SEC Reports; Financial Statements.
(a) Since December 31, 1993, Parent and its subsidiaries
have filed all forms, reports, statements and other documents required
to be filed with the SEC, including, without limitation, (1) all
Annual Reports on Form l0-K, (2) all Quarterly Reports on Form 10-Q,
(3) all proxy statements relating to meetings of stockholders (whether
annual or special), (4) all Current Reports on Form 8-K and (5) all
other reports, schedules, registration statements or other documents
(collectively, the "Parent SEC Reports"). The Parent SEC Reports,
including all Parent SEC Reports filed after the date of this
Agreement and prior to the Effective Time (i) were or will be prepared
in all material respects in accordance with the requirements as to
form of the Securities Act, Exchange Act and the rules and regulations
thereunder and (ii) did not at the time they were filed, or will not
at the time they are filed, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the
Parent SEC Reports filed prior to the Effective Time (i) have been or
will be prepared in accordance with the published rules and
regulations of the SEC and generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except
(A) to the extent required by changes in generally accepted accounting
principles and (B) with respect to Parent SEC Reports filed prior to
the date of this Agreement, as may be indicated in the notes thereto)
and (ii) fairly present or will fairly present the consolidated
financial position of Parent and its subsidiaries as of the respective
dates thereof and the consolidated results of operations and cash
flows for the periods indicated (including reasonable estimates of
normal and recurring year-end adjustments), except that (x) any
unaudited interim financial statements were or will be subject to
normal and recurring year-end adjustments and (y) any pro forma
financial information contained in such consolidated financial
statements is not necessarily indicative of the consolidated financial
position of Parent and its subsidiaries as of the respective dates
thereof and the consolidated results of operations and cash flows for
the periods indicated.
SECTION 4.08. Absence of Certain Changes or Events. Except as
disclosed in the Parent SEC Reports filed prior to the date of this Agreement
or as contemplated by this Agreement or as set forth in Schedule 4.08 to the
Parent Disclosure Schedule, since September 30, 1995, each of Parent and its
subsidiaries have conducted their respective businesses only in the ordinary
course and in a manner consistent with past practice, and there has not been:
(i) any material damage, destruction or loss (whether or not covered by
insurance) with respect to any material assets of Parent or any of its
subsidiaries; (ii) any material change by Parent or its subsidiaries in their
accounting methods, principles or practices; (iii) except for dividends by a
subsidiary of Parent to Parent or another subsidiary of Parent, any
declaration, setting aside or payment of any dividends or distributions in
respect of shares of Parent Common Stock (other than regular quarterly
dividends in an amount not exceeding $.025 per share and a three-for-two
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stock split effected as a stock dividend paid December 15, 1995) or the shares
of stock of, or other equity interests in, any subsidiary of Parent, or any
redemption, purchase or other acquisition by Parent or any of Parent's
subsidiaries of any of Parent's securities or any of the securities of any
subsidiary of Parent; or (iv) any Parent Material Adverse Effect.
SECTION 4.09. Absence of Litigation. Except as set forth in
Schedule 4.09 to the Parent Disclosure Schedule, there is no claim, action,
suit, litigation, proceeding, arbitration or, to the knowledge of Parent,
investigation of any kind, at law or in equity (including actions or
proceedings seeking injunctive relief), pending or, to the knowledge or Parent,
threatened against Parent or any of its subsidiaries or any properties or
rights of Parent or any of its subsidiaries (except for claims, actions, suits,
litigation, proceedings, arbitrations or investigations which could not
reasonably be expected to have a Parent Material Adverse Effect) and neither
Parent nor any of its subsidiaries is subject to any continuing order of,
consent decree, settlement agreement or other similar written agreement with,
or, to the knowledge of Parent, continuing investigation by, any Governmental
Entity, or any judgment, order, writ, injunction, decree or award of any
Governmental Entity or arbitrator, including, without limitation,
cease-and-desist or other orders.
SECTION 4.10. Taxes. Except for such matters as would not have a
Parent Material Adverse Effect, and except as set forth on Schedule 4.10 to the
Parent Disclosure Schedule, (i) all returns and reports ("Tax Returns") of or
with respect to any Tax which is required to be filed on or before the Closing
Date by or with respect to Parent or any its subsidiaries have been or will be
duly and timely filed, (ii) all items of income, gain, loss, deduction and
credit or other items required to be included in each such Tax Return have been
or will be so included and all information provided in each such Tax Return is
true, correct and complete, (iii) all Taxes which have become or will become
due with respect to the period covered by each such Tax Return have been or
will be timely paid in full, (iv) all withholding Tax requirements imposed on
or with respect to the Parent or any of its subsidiaries have been or will be
satisfied in full in all respects, and (v) no penalty, interest or other charge
is or will become due with respect to the late filing of any such Tax Return or
late payment of any such Tax.
SECTION 4.11. Tax Matters; Pooling. None of the Parent Companies
nor, to the knowledge of Parent, any of their affiliates has taken or agreed to
take any action that would prevent the Merger (a) from constituting a
reorganization qualifying under the provisions of Section 368(a) of the Code or
(b) from being treated as a Pooling Transaction for financial accounting
purposes.
SECTION 4.12. Affiliates. Schedule 4.12 to the Parent Disclosure
Schedule identifies all persons who, to the knowledge of Parent, may be deemed
to be affiliates of Parent under Rule 1-02 of Regulation S-X of the SEC or Rule
145 under the Securities Act, including, without limitation, all directors and
executive officers of Parent. Concurrently with the execution and delivery of
this Agreement, the Parent has delivered to Company an executed letter
agreement, substantially in the form of Exhibit B hereto, from certain of such
persons identified on Schedule 4.12 to the Parent Disclosure Schedule and will
deliver to Company
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within ten days after the date of this Agreement an executed letter agreement,
substantially in the form of Exhibit B hereto, from each of the other persons
identified on Schedule 4.12.
SECTION 4.13. Certain Business Practices. None of the Parent, any
of its subsidiaries or any directors, officers, agents or employees of the
Parent or any of its subsidiaries has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties
or campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, or (iii) made any other unlawful payment.
SECTION 4.14. Environmental Matters. To the knowledge of the
Parent, except for matters that do not constitute a Parent Material Adverse
Effect, (i) the properties, operations and activities of the Parent and its
subsidiaries are in compliance with all applicable Environmental Laws; (ii) the
Parent and its subsidiaries and the properties and operations of the Parent and
its subsidiaries are not subject to any existing, pending or, to the knowledge
of the Parent, threatened action, suit, claim, investigation, inquiry or
proceeding by or before any governmental authority under any Environmental Law;
(iii) all notices, permits, licenses, or similar authorizations, if any,
required to be obtained or filed by the Parent or any of its subsidiaries under
any Environmental Law in connection with any aspect of the business of the
Parent or its subsidiaries, including without limitation those relating to the
treatment, storage, disposal or release of a hazardous or otherwise regulated
substance, have been duly obtained or filed and will remain valid and in effect
after the Merger, and the Parent and its subsidiaries are in compliance with
the terms and conditions of all such notices, permits, licenses and similar
authorizations; (iv) the Parent and its subsidiaries have satisfied and are
currently in compliance with all financial responsibility requirements
applicable to their operations and imposed by any governmental authority under
any Environmental Law, and the Parent and its subsidiaries have not received
any notice of noncompliance with any such financial responsibility
requirements; (v) to the Parent's knowledge, there are no physical or
environmental conditions existing on any property of the Parent or its
subsidiaries or resulting from the Parent's or such subsidiaries' operations or
activities, past or present, at any location, that would give rise to any
on-site obligations imposed on the Parent or any of its subsidiaries under any
Environmental Laws or that would impact the soil, groundwater, surface water or
human health; and (vi) to the Parent's knowledge, since the effective date of
the relevant requirements of applicable Environmental Laws and to the extent
required by such applicable Environmental Laws, all hazardous substances
generated by the Parent and its subsidiaries have been transported only by
carriers authorized under Environmental Laws to transport such substances and
wastes.
SECTION 4.15. Vote Required. The only vote of the holders of any
class or series of Parent capital stock necessary to approve the issuance of
the Parent Common Stock in the Merger is, pursuant to the Rule 312 of the NYSE,
the affirmative vote of the holders of a majority of the outstanding shares of
Parent Common Stock voted on the proposal to so issue the Parent Common Stock;
provided that the total vote cast on such proposal represents over 50% in
interest of the outstanding Parent Common Stock. No vote of the holders or any
class or series
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of Parent capital stock is required to approve the Merger and adopt this
Agreement. Parent, as the sole stockholder of Merger Sub, has voted to approve
the Merger and adopt this Agreement.
SECTION 4.16. Brokers. Except for fees payable to Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation by Parent, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of any of the Parent Companies.
SECTION 4.17. Insurance. The Parent and each of its subsidiaries
are currently insured, and during each of the past five calendar years have
been insured, for reasonable amounts against such risks as companies engaged in
a similar business would, in accordance with good business practice,
customarily be insured.
SECTION 4.18. Properties. Except for liens arising in the ordinary
course of business after the date hereof and properties and assets disposed of
in the ordinary course of business after September 30, 1995, Parent and its
subsidiaries have good and marketable title, free and clear of all material
liens, to all their material properties and assets, whether tangible or
intangible, real, personal or mixed, reflected in the September 30, 1995
consolidated balance sheet contained in Parent's most recent Quarterly Report
on Form 10-Q as being owned by Parent and its subsidiaries as of the date
thereof. All buildings, and all fixtures, equipment and other property and
assets which are material to its business on a consolidated basis, held under
leases by any of Parent or its subsidiaries are held under valid instruments
enforceable by Parent or its subsidiaries in accordance with their respective
terms. Substantially all of Parent's and its subsidiaries' equipment in
regular use has been reasonably maintained and is in good and serviceable
condition, reasonable wear and tear excepted.
SECTION 4.19. Information Supplied. Without limiting any of the
representations and warranties contained herein, no representation or warranty
of the Parent Companies herein and no statement by the Parent Companies or
other information contained in the Parent Disclosure Schedule or any document
incorporated therein by reference or delivered by Parent to the Company
pursuant to this Agreement, as of the date of such representation, warranty,
statement or document, contains any untrue statement of material fact, or,
omits to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which such statements
were made, not misleading.
SECTION 4.20. Opinion of Financial Advisor. Parent has received
the opinion of Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation to the
effect that, as of the date of delivery of such opinion, the Exchange Ratio is
fair, from a financial point of view, to the holders of Parent Common Stock.
Parent will promptly deliver to the Company a true and complete written copy of
such opinion.
SECTION 4.21. Pooling Letter. Parent has received and delivered to
the Company a letter from its accountants, KPMG Peat Marwick, stating that the
Merger as described in this Agreement shall be treated as a "pooling of
interests" for financial accounting purposes.
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ARTICLE V
COVENANTS
SECTION 5.01. Affirmative Covenants of the Company. The Company
hereby covenants and agrees that, prior to the Effective Time, unless otherwise
expressly contemplated by this Agreement or consented to in writing by Parent,
the Company will and will cause its subsidiaries to:
(a) operate its business in all material respects in the
usual and ordinary course consistent with past practices;
(b) use all reasonable efforts to preserve substantially
intact its business organization, maintain its material rights and
franchises, retain the services of its respective officers and key
employees and maintain its relationships with its material customers
and suppliers;
(c) maintain and keep its material properties and assets
in as good repair and condition as at present, ordinary wear and tear
excepted, and maintain supplies and inventories in quantities
consistent with its customary business practice; and
(d) use all reasonable efforts to keep in full force and
effect insurance and bonds comparable in amount and scope of coverage
to that currently maintained.
SECTION 5.02. Negative Covenants of the Company. Except as
expressly contemplated by this Agreement or otherwise consented to in writing
by Parent, from the date of this Agreement until the Effective Time, the
Company will not do, and will not permit any of its subsidiaries to do, any of
the foregoing:
(a) (i) increase the compensation payable to or to become
payable to any director or executive officer, unless such increase
results from the operation of compensation arrangements in effect
prior to the date hereof; (ii) grant any severance or termination pay
(other than pursuant to the normal severance policy of the Company or
its subsidiaries as in effect on the date of this Agreement) to, or
enter into or amend any employment or severance agreement with, any
director, officer or employee; (iii) establish, adopt or enter into
any employee benefit plan or arrangement; or (iv) except as may be
required by applicable law and actions that are not inconsistent with
the provisions of Section 6.08 of this Agreement, amend in any
material respect, or take any other actions with respect to, any of
the Benefit Plans or any of the plans, programs, agreements, policies
or other arrangements described in Section 3.10(d) of this Agreement;
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(b) declare or pay any dividend on, or make any other
distribution in respect of, outstanding shares of capital stock,
except for dividends by a wholly owned subsidiary of the Company to
the Company or another wholly owned subsidiary of the Company;
(c) (i) except as described in Schedule 3.03(b) (ii) of
the Company Disclosure Schedule, redeem, purchase or otherwise acquire
any shares of its or any of its subsidiaries' capital stock or any
securities or obligations convertible into or exchangeable for any
shares of its or its subsidiaries' capital stock (other than any such
acquisition directly from any wholly owned subsidiary of the Company
in exchange for capital contributions or loans to such subsidiary), or
any options, warrants or conversion or other rights to acquire any
shares of its or its subsidiaries' capital stock or any such
securities or obligations (except in connection with the exercise of
outstanding Stock Options or warrants in accordance with their terms);
(ii) effect any reorganization or recapitalization; or (iii) split,
combine or reclassify any of its or its subsidiaries' capital stock or
issue or authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for, shares of its or its
subsidiaries' capital stock;
(d) (i) except pursuant to outstanding options, warrants,
or other rights, agreements, arrangements or commitments described in
Schedule 3.03(b)(i) of the Company Disclosure Schedule, issue,
deliver, award, grant or sell, or authorize or propose the issuance,
delivery, award, grant or sale (including the grant of any security
interests, liens, claims, pledges, limitations in voting rights,
charges or other encumbrances) of, any shares of any class of its or
its subsidiaries' capital stock (including shares held in treasury),
any securities convertible into or exercisable or exchangeable for any
such shares, or any rights, warrants or options to acquire any such
shares (except as permitted pursuant to Section 6.08 of this Agreement
or for the issuance of shares upon the exercise of outstanding Stock
Options or warrants); (ii) amend or otherwise modify the terms of any
such rights, warrants or options the effect of which shall be to make
such terms more favorable to the holders thereof; or (iii) take any
action to accelerate the exercisability of Stock Options or warrants,
except such stock options or warrants relating to 1,109,053 shares of
Company Common Stock that will become exercisable on account of the
Merger or any other transaction contemplated hereby;
(e) acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a portion
of the assets of, or by any other manner, any business or any
corporation, partnership, association or other business organization
or division thereof, or otherwise acquire or agree to acquire any
assets of any other person (other than the purchase of assets from
suppliers or vendors in the ordinary course of business and consistent
with past practice);
(f) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage,
pledge, transfer or otherwise dispose of, any of its material assets
or any material assets of any of its subsidiaries, except for
dispositions of inventories and of assets in the ordinary course of
business and consistent with past practice;
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(g) initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action to
facilitate, any inquiries or the making of any proposal relating to,
or that may reasonably be expected to lead to, any Competing
Transaction (as defined below), or enter into discussions or negotiate
with any person or entity in furtherance of such inquiries or to
obtain a Competing Transaction, or agree to or endorse any Competing
Transaction, or authorize or permit any of the officers, directors or
employees of the Company or any of its subsidiaries or any investment
banker, financial advisor, attorney, accountant or other
representative retained by the Company or any of the Company's
subsidiaries to take any such action, and the Company shall promptly
notify Parent of all relevant terms of any such inquiries and
proposals received by the Company or any of its subsidiaries or by any
such officer, director, investment banker, financial advisor,
attorney, accountant or other representative relating to any of such
matters and if such inquiry or proposal is in writing, the Company
shall promptly deliver or cause to be delivered to Parent a copy of
such inquiry or proposal; provided, however, that nothing contained in
this subsection (g) shall prohibit the Board of Directors of the
Company from (i) furnishing information to, or entering into
discussions or negotiations with, any person or entity in connection
with an unsolicited bona fide written proposal, which proposal is at a
materially higher value and not subject to a financing condition, by
such person or entity to acquire the Company pursuant to a merger,
consolidation, share exchange, business combination or other similar
transaction or to acquire a substantial portion of the assets of the
Company or any of its Significant Subsidiaries, if, and only to the
extent that (A) the Board of Directors of the Company, after
consultation with and based upon the advice of independent legal
counsel (who may be the Company's regularly engaged independent legal
counsel), determines in good faith that such action is necessary for
such Board of Directors to comply with its fiduciary duties to
stockholders under applicable law and (B) prior to furnishing such
information to, or entering into discussions or negotiations with,
such person or entity the Company (x) provides five days prior written
notice to Parent to the effect that it is furnishing information to,
or entering into discussions or negotiations with, such person or
entity and (y) enters into with such person or entity a
confidentiality agreement in reasonably customary form on terms not
more favorable to such person or entity than the terms contained in
those certain Confidentiality Agreements dated respectively, as of
April 19, 1995 and June 14, 1995 between Parent and the Company (the
"Confidentiality Agreements"); (ii) complying with Rule 14e-2
promulgated under the Exchange Act with regard to a Competing
Transaction; or (iii) failing to make or withdrawing or modifying its
recommendation referred to in Section 6.02(a) if there exists a
Competing Transaction and the Board of Directors of the Company, after
consultation with and based upon the advice of independent legal
counsel (who may be the Company's regularly engaged independent legal
counsel), determines in good faith that such action is necessary for
such Board of Directors to comply with its fiduciary duties to
stockholders under applicable law. For purposes of this Agreement,
"Competing Transaction" shall mean any of the following (other than
the transactions contemplated by this Agreement) involving the Company
or any of its subsidiaries: (i) any merger, consolidation, share
exchange, business combination or similar transaction; (ii) any sale,
lease, exchange, mortgage,
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pledge, transfer or other disposition of 20% or more of the assets of
the Company and its subsidiaries, taken as a whole, (iii) any tender
offer or exchange offer for 20% or more of the outstanding shares of
capital stock of the Company or the filing of a registration statement
under the Securities Act in connection therewith; (iv) any person
having acquired beneficial ownership of, or any group (as such term is
used in Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder) having been formed which
beneficially owns or has the right to acquire beneficial ownership of,
20% or more of the outstanding shares of capital stock of the Company;
or (v) any public announcement of a proposal, plan or intention to do
any of the foregoing or any agreement to engage in any of the
foregoing;
(h) release any third party from its obligations, or
grant any consent, under any existing standstill provision relating to
a Competing Transaction or otherwise under any confidentiality or
other agreement, or fail to fully enforce any such agreement;
(i) adopt or propose to adopt any amendments to its
charter or bylaws;
(j) (A) change any of its methods of accounting in effect
at February 28, 1995, or (B) make or rescind any express or deemed
election relating to Taxes, settle or compromise any claim, action,
suit, litigation, proceeding, arbitration, investigation, audit or
controversy relating to Taxes (except where the amount of such
settlements or controversies, individually or in the aggregate, does
not exceed $250,000), or change any of its methods of reporting income
or deductions for federal income tax purposes from those employed in
the preparation of the federal income tax returns for the taxable year
ending February 28, 1995, except, in each case, as may be required by
Law or generally accepted accounting principles;
(k) incur any obligation for borrowed money or purchase
money indebtedness, whether or not evidenced by a note, bond,
debenture or similar instrument, except in the ordinary course of
business consistent with past practice or pursuant to the Company's
existing credit facility and in no event in excess of $1,000,000 in
the aggregate;
(l) enter into any material arrangement, agreement or
contract with any third party (other than customers in the ordinary
course of business) which provides for an exclusive arrangement with
that third party or is substantially more restrictive on the Company
or substantially less advantageous to the Company than arrangements,
agreements or contracts existing on the date hereof;
(m) take (and will use reasonable best efforts to prevent
any affiliate of the Company from taking) any action that, in the
judgment of KPMG Peat Marwick would cause the Merger not to be treated
as a "pooling of interests" for financial accounting purposes; or
(n) agree in writing or otherwise to do any of the
foregoing.
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SECTION 5.03. Affirmative and Negative Covenants of Parent.
(a) Parent hereby covenants and agrees that, prior to the
Effective Time, unless otherwise expressly contemplated by this
Agreement or consented to in writing by the Company, Parent will and
will cause its subsidiaries to:
(i) operate its business in all material respects
in the usual and ordinary course consistent with past
practices;
(ii) use all reasonable efforts to preserve
substantially intact its business organization, maintain its
material rights and franchises, retain the services of its
respective officers and key employees and maintain its
relationships with its material customers and suppliers;
(iii) maintain and keep its material properties and
assets in as good repair and condition as at present, ordinary
wear and tear excepted, and maintain supplies and inventories
in quantities consistent with its customary business practice;
and
(iv) use all reasonable efforts to keep in full
force and effect insurance and bonds comparable in amount and
scope of coverage to that currently maintained.
(b) Except as expressly contemplated by this Agreement or
otherwise consented to in writing by the Company, from the date of
this Agreement until the Effective Time, Parent will not do, and will
not permit any of its subsidiaries to do, any of the following:
(i) knowingly take any action which would result
in a failure to maintain the trading of the Parent Common
Stock on the NYSE;
(ii) declare or pay any dividend on, or make any
other distribution in respect of, outstanding shares of
capital stock, except for dividends by a wholly owned
subsidiary of Parent to Parent or another wholly owned
subsidiary of Parent and except for regular quarterly
dividends with respect to Parent Common Stock in an amount not
to exceed $.025 per share;
(iii) acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a
portion of the assets of, or by any other manner, any business
or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or
agree to acquire any assets of any other person (other than
the purchase of assets from suppliers or vendors in the
ordinary course of business and consistent with past
practice), which, in each case, would prevent the consummation
of the transactions contemplated by this Agreement;
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(iv) adopt or propose to adopt any amendments to
its charter or bylaws, which would have an adverse impact on
the consummation of the transactions contemplated by this
Agreement;
(v) take (and will use reasonable best efforts to
prevent any affiliate of Parent from taking) any action that,
in the judgment of KPMG Peat Marwick, would cause the Merger
not to be treated as a "pooling of interests" for financial
accounting purposes; or
(vi) agree in writing or otherwise to do any of
the foregoing.
SECTION 5.04. Access and Information.
(a) The Company shall, and shall cause its subsidiaries
to (i) afford to Parent and its officers, directors, employees,
accountants, consultants, legal counsel, agents and other
representatives (collectively, the "Parent Representatives")
reasonable access at reasonable times, upon reasonable prior notice,
to the officers, employees, agents, properties, offices and other
facilities of the Company and its subsidiaries and to the books and
records thereof and (ii) furnish promptly to Parent and the Parent
Representatives such information concerning the business, properties,
contracts, records and personnel of the Company and its subsidiaries
(including, without limitation, financial, operating and other data
and information) as may be reasonably requested, from time to time, by
Parent.
(b) Parent shall, and shall cause its subsidiaries to (i)
afford to the Company and its officers, directors, employees,
accountants, consultants, legal counsel, agents and other
representatives (collectively, the "Company Representatives")
reasonable access at reasonable times, upon reasonable prior notice,
to the officers, employees, accountants, agents, properties, offices
and other facilities of Parent and its subsidiaries and to the books
and records thereof and (ii) furnish promptly to the Company and the
Company Representatives such information concerning the business,
properties, contracts, records and personnel of Parent and its
subsidiaries (including, without limitation, financial, operating and
other data and information) as may be reasonably requested, from time
to time, by the Company.
(c) Notwithstanding the foregoing provisions of this
Section 5.04, neither party shall be required to grant access or
furnish information to the other party to the extent that such access
or the furnishing of such information is prohibited by law. No
investigation by the parties hereto made heretofore or hereafter shall
affect the representations and warranties of the parties which are
herein contained and each such representation and warranty shall
survive such investigation.
(d) The information received pursuant to Section 5.04 (a)
and (b) shall be deemed to be "Confidential Information" for purposes
of the Confidentiality Agreements.
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ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Meetings of Stockholders.
(a) The Company shall, promptly after the date of this
Agreement, take all actions necessary in accordance with New Jersey
Law and its charter and bylaws to convene a special meeting of the
Company's stockholders to approve this Agreement (the "Company
Stockholders Meeting"), and the Company shall consult with Parent in
connection therewith. The Company shall use its best efforts to
solicit from stockholders of the Company proxies in favor of the
approval and adoption of this Agreement and to secure the vote of
stockholders required by New Jersey Law and its charter and bylaws to
approve and adopt this Agreement, unless otherwise necessary due to
the applicable fiduciary duties of the directors of the Company, as
determined by such directors in good faith after consultation with and
based upon the advice of independent legal counsel (who may be the
Company's regularly engaged independent legal counsel).
(b) Parent shall, promptly after the date of this
Agreement, take all actions necessary in accordance with the Delaware
General Corporation Law and its charter and bylaws to convene a
special meeting of Parent's stockholders to approve the issuance of
the Parent Common Stock in connection with the Merger pursuant to the
requirements of Rule 312 of the NYSE (the "Parent Stockholders
Meeting"). Parent shall use its best efforts to solicit from
stockholders of Parent proxies in favor of the approval of such
issuance of Parent Common Stock and to secure the vote of stockholders
required by Rule 312 of the NYSE and its charter and bylaws to approve
such issuance of Parent Common Stock, unless otherwise necessary due
to the applicable fiduciary duties of the directors of the Parent, as
determined by such directors in good faith after consultation with and
based upon the advice of independent legal counsel (who may be the
Parent's regularly engaged independent legal counsel).
SECTION 6.02. Registration Statement; Joint Proxy
Statement/Prospectus.
(a) As promptly as practicable after the execution of
this Agreement, Parent, with the cooperation of the Company, shall
prepare and file with the SEC a registration statement on Form S-4
(such registration statement, together with any amendments thereof or
supplements thereto, being the "Registration Statement"), containing a
joint proxy statement/prospectus for stockholders of the Company and
Parent (in the form mailed to Parent or Company stockholders, as
applicable, the "Joint Proxy Statement/Prospectus") (together with any
amendments thereof or supplements thereto), in connection with the
registration under the Securities Act of the offer and sale of Parent
Common Stock to be issued in the Merger and the other transactions
contemplated by this Agreement. Parent shall use all reasonable
efforts, and the Company will cooperate with
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Parent, to have the Registration Statement declared effective by the
SEC as promptly as practicable and to keep the Registration Statement
effective as long as is necessary to consummate the Merger. Parent
shall, as promptly as practicable, provide copies of any written
comments received from the SEC with respect to the Registration
Statement to the Company and advise the Company of any verbal comments
with respect to the Registration Statement received from the SEC.
Parent shall use its best efforts to obtain, prior to the effective
date of the Registration Statement, all necessary state securities
laws or "Blue Sky" permits or approvals required to carry out the
transactions contemplated by this Agreement. Parent will advise the
Company, promptly after it receives notice thereof, of the time when
the Registration Statement has become effective or any supplement or
amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the Parent Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction,
or any request by the SEC for amendment of the Joint Proxy
Statement/Prospectus or the Registration Statement or comments thereon
and responses thereto or requests by the SEC for additional
information. Each of Parent and the Company shall furnish to the
other all information concerning it and the holders of its capital
stock as the other may reasonably request in connection with such
actions. As promptly as practicable after the Registration Statement
shall have been declared effective, the Company shall mail the Joint
Proxy Statement/Prospectus to its stockholders entitled to notice of
and to vote at the Company Stockholders Meeting and Parent shall mail
the Joint Proxy Statement/Prospectus to its stockholders entitled to
notice of and to vote at the Parent Stockholders Meeting. The Joint
Proxy Statement/Prospectus shall include the recommendation of the
Company's Board of Directors in favor of the Merger and adoption of
this Agreement, unless otherwise necessary due to the applicable
fiduciary duties of the directors of the Company, as determined by
such directors in good faith after consultation with and based upon
the advice of independent legal counsel (who may be the Company's
regularly engaged independent legal counsel). The Joint Proxy
Statement/Prospectus shall include the recommendation of Parent's
Board of Directors in favor of approval of the issuance of the Parent
Common Stock in the Merger, unless otherwise necessary due to the
applicable fiduciary duties of the directors of the Parent, as
determined by such directors in good faith after consultation with and
based upon the advice of independent legal counsel (who may be the
Parent's regularly engaged independent legal counsel).
(b) The information supplied by the Company for inclusion
in the Registration Statement shall not, at the time the Registration
Statement is declared effective, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. The information supplied by the Company for inclusion in
(i) the Joint Proxy Statement/Prospectus to be sent to the
stockholders of the Company in connection with the Company
Stockholders Meeting shall not, at the date the Joint Proxy
Statement/Prospectus (or any supplement thereto) is first mailed to
stockholders, at the time of the Company Stockholders Meeting or at
the Effective Time and (ii) the Joint Proxy Statement/Prospectus to be
sent to the stockholders of Parent in connection with the Parent
Stockholders Meeting shall not, at the date the Joint Proxy
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Statement/Prospectus (or any supplement thereto) is first mailed to
stockholders, at the time of the Parent Stockholders Meeting or at the
Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. If at any
time prior to the Effective Time any event or circumstance relating to
the Company or any of its affiliates, or its or their respective
officers or directors, should be discovered by the Company that should
be set forth in an amendment to the Registration Statement or a
supplement to the Joint Proxy Statement/Prospectus, the Company shall
promptly inform Parent thereof in writing. All documents that the
Company is responsible for filing with the SEC in connection with the
transactions contemplated herein will comply as to form in all
material respects with the applicable requirements of the Securities
Act and the rules and `regulations thereunder and the Exchange Act and
the rules and regulations thereunder.
(c) The information supplied by Parent for inclusion in
the Registration Statement shall not, at the time the Registration
Statement is declared effective, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. The information supplied by Parent for inclusion in (i)
the Joint Proxy Statement/Prospectus to be sent to the stockholders of
the Company in connection with the Company Stockholders Meeting shall
not, at the date the Joint Proxy Statement/Prospectus (or any
supplement thereto) is first mailed to stockholders, at the time of
the Company Stockholders Meeting or at the Effective Time and (ii) the
Joint Proxy Statement/Prospectus to be sent to the stockholders of
Parent in connection with the Parent Stockholders Meeting shall not,
at the date the Joint Proxy Statement/Prospectus (or any supplement
thereto) is first mailed to stockholders, at the time of the Parent
Stockholders Meeting or at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
are made, not misleading. If at any time prior to the Effective Time
any event or circumstance relating to Parent or any of its affiliates,
or to their respective officers or directors, should be discovered by
Parent that should be set forth in an amendment to the Registration
Statement or a supplement to the Joint Proxy Statement/Prospectus,
Parent shall promptly inform the Company thereof in writing. All
documents that Parent is responsible for filing with the SEC in
connection with the transactions contemplated hereby will comply as to
form in all material respects with the applicable requirements of the
Securities Act and the rules and regulations thereunder and the
Exchange Act and the rules and regulations thereunder.
SECTION 6.03. Appropriate Action; Consents; Filings.
(a) The Company and Parent shall each use, and shall
cause each of their respective subsidiaries to use, all reasonable
efforts to (i) take, or cause to be taken, all appropriate action, and
do, or cause to be done, all things necessary, proper or advisable
under applicable Law or otherwise to consummate and make effective the
transactions
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contemplated by this Agreement, (ii) obtain from any Governmental
Entities any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained or made by Parent or
the Company or any of their subsidiaries in connection with the
authorization, execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, including,
without limitation, the Merger, (iii) make all necessary filings, and
thereafter make any other required submissions, with respect to this
Agreement and the Merger required under (A) the Securities Act (in the
case of Parent) and the Exchange Act and the rules and regulations
thereunder, and any other applicable federal or state securities laws,
(B) the HSR Act and (C) any other applicable Law; provided that Parent
and the Company shall cooperate with each other in connection with the
making of all such filings, including providing copies of all such
documents to the nonfiling party and its advisors prior to filings
and, if requested, shall accept all reasonable additions, deletions or
changes suggested in connection therewith. The Company and Parent
shall furnish all information required for any application or other
filing to be made pursuant to the rules and regulations of any
applicable Law (including all information required to be included in
the Joint Proxy Statement/Prospectus or the Registration Statement) in
connection with the transactions contemplated by this Agreement.
Parent and the Company shall request early termination of the waiting
period with respect to the Merger under the HSR Act.
(b) Parent and the Company agree to cooperate with
respect to, and shall cause each of their respective subsidiaries to
cooperate with respect to, and agree to use all reasonable efforts
vigorously to contest and resist, any action, including legislative,
administrative or judicial action, and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order
(whether temporary, preliminary or permanent) (an "Order") of any
Governmental Entity that is in effect and that restricts, prevents or
prohibits the consummation of the Merger or any other transactions
contemplated by this Agreement, including, without limitation, by
vigorously pursuing all available avenues of administrative and
judicial appeal and all available legislative action.
(c) (i) Each of the Company and Parent shall give (or
shall cause their respective subsidiaries to give) any notices to
third parties, and use, and cause their respective subsidiaries to use
all reasonable efforts to obtain any third party consents (A)
necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, (B) otherwise required under any
contracts, licenses, leases or other agreements in connection with the
consummation of the transactions contemplated hereby or (C) required
to prevent a Company Material Adverse Effect from occurring prior to
the Effective Time or a Parent Material Adverse Effect from occurring
prior to or after the Effective Time.
(ii) In the event that any party shall fail to
obtain any third party consent described in subsection (c)(i) above,
such party shall use all reasonable efforts, and shall take any such
actions reasonably requested by the other parties, to limit the
adverse effect upon the Company and Parent, their respective
subsidiaries, and their
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respective businesses resulting, or which could reasonably be expected
to result after the Effective Time, from the failure to obtain such
consent.
(d) Each of Parent and the Company shall promptly notify
the other of (i) any material change in its current or future
business, financial condition or results of operations, (ii) any
complaints, investigations or hearings (or communications indicating
that the same may be contemplated) of any Governmental Entities with
respect to its business or the transactions contemplated hereby, (iii)
the institution or the threat of material litigation involving it or
any of its subsidiaries or (iv) any event or condition that might
reasonably be expected to cause any of its representations,
warranties, covenants or agreements set forth herein not to be true
and correct at the Effective Time. As used in the preceding sentence,
"material litigation" means any case, arbitration or adversary
proceeding or other matter which would have been required to be
disclosed on the Company Disclosure Schedule pursuant to Section 3.09
or the Parent Disclosure Schedule pursuant to Section 4.09, as the
case may be, if in existence on the date hereof, or in respect of
which the legal fees and other costs to the Company or Parent (or
their respective subsidiaries), as the case may be, might reasonably
be expected to exceed $250,000 over the life of the matter.
SECTION 6.04. Affiliates; Pooling; Tax Treatment.
(a) The Company shall use all reasonable efforts to
obtain from any person who will receive Parent Common Stock in
exchange for Company Common Stock in the Merger and may be deemed to
have become an affiliate of the Company after the date of this
Agreement and on or prior to the Effective Time, a written agreement
substantially in the form of Exhibit A hereto as soon as practicable
after attaining such status.
(b) Parent shall use all reasonable efforts to obtain
from any person who may be deemed to have become an affiliate of
Parent after the date of this Agreement and on or prior to the
Effective Time, a written agreement substantially in the form of
Exhibit B hereto as soon as practicable after obtaining such status.
(c) Parent shall not be required to maintain the
effectiveness of the Registration Statement for the purpose of resale
by stockholders of the Company who may be affiliates of the Company or
Parent pursuant to Rule 145 under the Securities Act.
(d) Each party hereto shall use all reasonable efforts to
cause the Merger to be treated for financial accounting purposes as a
Pooling Transaction, and shall not take, and shall use all reasonable
efforts to prevent any affiliate of such party from taking, any
actions which could prevent the Merger from being treated for
financial accounting purposes as a Pooling Transaction,
(e) Each party hereto shall use all reasonable efforts to
cause the Merger to qualify, and shall not take, and shall use all
reasonable efforts to prevent any affiliate of
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such party from taking, any actions which could prevent the Merger
from qualifying as a reorganization under the provisions of Section
368(a) of the Code.
SECTION 6.05. Public Announcements. Parent and the Company shall
consult with each other before issuing any press release or otherwise making
any public statements with respect to the Merger and shall not issue any such
press release or make any such public statement prior to such consultation.
The press release announcing the execution and delivery of this Agreement shall
be a joint press release of Parent and the Company.
SECTION 6.06. NYSE Listing. Parent shall use all reasonable
efforts to cause the shares of Parent Common Stock to be issued in the Merger
to be approved for listing (subject to official notice of issuance) on the NYSE
prior to the Effective Time.
SECTION 6.07. Comfort Letters.
(a) The Company shall use all reasonable efforts to cause
Xxxxxx Xxxxxxxx, L.L.P. to deliver a letter dated as of the date of
the Joint Proxy Statement/Prospectus, and addressed to itself and
Parent and their respective Boards of Directors, in form and substance
reasonably satisfactory to Parent, and customary in scope and
substance for agreed-upon procedures letters delivered by independent
public accountants in connection with registration statements and
proxy statements similar to the Registration Statement and the Joint
Proxy Statement/Prospectus.
(b) Parent shall use all reasonable efforts to cause KPMG
Peat Marwick to deliver a letter dated as of the date of the Joint
Proxy Statement/Prospectus, and addressed to itself and the Company
and their respective Boards of Directors, in form and substance
reasonably satisfactory to the Company, and customary in scope and
substance for agreed-upon procedures letters delivered by independent
public accounts in connection with registration statements and proxy
statements similar to the Registration Statement and the Joint Proxy
Statement/Prospectus.
SECTION 6.08. Stock Option Plans.
(a) Option Plans. Parent and the Company shall take such
actions not inconsistent with the Merger being accounted for financial
accounting purposes as a Pooling Transaction, including (with respect
to the Company) the amendment of the Option Plans and Stock Options,
to permit Parent to assume, and Parent shall assume, effective at the
Effective Time, each Stock Option that remains unexercised in whole or
in part as of the Effective Time and substitute shares of Parent
Common Stock for the shares of the Company Common Stock purchasable
under each such assumed option ("Assumed Option"), which assumption
and substitution shall be effected as follows:
(i) the Assumed Option shall not give the
optionee additional benefits which such optionee did not have
under the Stock Option before such assumption
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and shall be assumed on the same terms and conditions as the
Stock Option being assumed, subject to Section 6.08(a) (ii)
and (iii) below;
(ii) the number of shares of Parent Common Stock
purchasable under the Assumed Option shall be equal to the
number of shares of Parent Common Stock that the holder of the
Stock Option being assumed would have received (without regard
to any vesting schedule) upon consummation of the Merger had
such Stock Option been exercised in full immediately prior to
consummation of the Merger; and
(iii) the per share exercise price of such Assumed
Option shall be an amount equal to the per share exercise
price of the Stock Option being assumed divided by the
Exchange Ratio.
It is the intention of the parties that, to the extent that
any such Stock Option constituted an "incentive stock option" (within
the meaning of Section 422 of the Code) immediately prior to the
Effective Time, such Stock Option shall continue to qualify as an
incentive stock option to the maximum extent permitted by Section 422
of the Code, and that the assumption of the Company Stock Options
provided by this Section 6.08(a) satisfy the conditions of Section
424(a) of the Code.
(b) Registration. Parent shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of
Parent Common Stock for delivery upon exercise of the Assumed Options,
and, as soon as practicable after the Effective Time, but in no event
later than ten days after the Effective Time, Parent shall file a
registration statement on Form S-8 (or other appropriate form) with
respect to the shares of Parent Common Stock subject to the Assumed
Options, and shall use its best efforts to maintain the effectiveness
of such registration statement for so long as any of the Assumed
Options remain outstanding.
SECTION 6.09. Warrants.
(a) Parent and the Company shall take such actions not
inconsistent with the Merger being accounted for financial accounting
purposes as a Pooling Transaction, including (with respect to the
Company) the amendment of the warrants referred to in Section
3.03(a)(i)(4), to permit Parent to assume, and Parent shall assume,
effective at the Effective Time, each warrant that remains unexercised
in whole or in part as of the Effective Time and substitute shares of
Parent Common Stock for the shares of the Company Common Stock
purchasable under each such assumed warrant ("Assumed Warrant"), which
assumption and substitution shall be effected as follows:
(i) the Assumed Warrant shall not give the holder
additional benefits which such holder did not have before such
assumption and shall be assumed on the same terms and
conditions as the warrant being assumed, subject to Section
6.09(a) (ii) and (iii) below;
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(ii) the number of shares of Parent Common Stock
purchasable under the Assumed Warrant shall be equal to the
number of shares of Parent Common Stock that the holder of the
warrant being assumed would have received upon consummation of
the Merger had such warrant been exercised in full immediately
prior to consummation of the Merger; and
(iii) the per share exercise price of such Assumed
Warrant shall be an amount equal to the per share exercise
price of the warrant being assumed divided by the Exchange
Ratio.
(b) Reservation. Parent shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of
Parent Common Stock for delivery upon exercise of the Assumed
Warrants.
SECTION 6.10. Merger Sub. Prior to the Effective Time, Merger Sub
shall not conduct any business or make any investments other than as
specifically contemplated by this Agreement and will not have any assets (other
than a de minimis amount of cash paid to Merger Sub for the issuance of its
stock to Parent) or liabilities.
SECTION 6.11. Indemnification.
(a) For a period of six years after the Effective
Time, Parent shall not amend or otherwise modify Article
Eighth of the charter of the Company or Article
VIII-Indemnification of the bylaws of the Company (in each
case as in effect on the date hereof) in a manner that would
adversely affect the rights thereunder of any individuals who
at any time prior to the Effective Time were directors or
officers of the Company in respect of acts or omissions
occurring at or prior to the Effective Time (including,
without limitation, the transactions contemplated by this
Agreement), unless such amendment or modification is required
by law.
(b) Parent agrees to purchase, or cause to be purchased a
customary director's and officer's liability insurance "tail" policy
from a reputable insurer in the amount of $5,000,000 in respect of
claims arising out of facts or events that occurred on or before the
Effective Date, so long as the total premium cost thereof does not
exceed $175,000, which policy shall be maintained for a period of
three years after the Effective Date. This Section 6.11 is intended
to be for the benefit of, and shall be enforceable by, the persons
referred to above, their heirs and personal representatives, and shall
be binding on Parent and its successors and assigns.
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ARTICLE VII
CLOSING CONDITIONS
SECTION 7.01. Conditions to Obligations of Each Party Under This
Agreement. The respective obligations of each party to effect the Merger and
the other transactions contemplated hereby shall be subject to the satisfaction
at or prior to the Closing Date of the following conditions, any or all of
which may be waived in writing by the parties hereto, in whole or in part, to
the extent permitted by applicable law:
(a) Effectiveness of the Registration Statement; Blue
Sky. The Registration Statement shall have been declared effective by
the SEC under the Securities Act. No stop order suspending the
effectiveness of the Registration Statement shall have been issued by
the SEC and no proceedings for that purpose shall have been initiated
by the SEC. Parent shall have received all Blue Sky and other
authorizations necessary to consummate the transactions contemplated
by this Agreement.
(b) Stockholder Approval. This Agreement and the Merger
shall have been approved and adopted by the requisite vote of the
stockholders of the Company, and the issuance of the Parent Common
Stock in the Merger shall have been approved by the requisite vote of
the stockholders of Parent.
(c) No Order. No Governmental Entity or federal or state
court of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect
of making the Merger illegal or otherwise prohibiting consummation of
the Merger; and no such Governmental Entity shall have initiated or
threatened to initiate any proceeding seeking any of the foregoing.
(d) HSR Act. The applicable waiting period under the HSR
Act with respect to the transactions contemplated by this Agreement
shall have expired or been terminated.
(e) Pooling of Interests. Parent and the Company shall
have been advised in writing by KPMG Peat Marwick on the Closing Date
that the Merger shall be treated for financial accounting purposes as
a Pooling Transaction.
SECTION 7.02. Additional Conditions to Obligations of the Parent
Companies. The obligations of the Parent Companies to effect the Merger and
the other transactions contemplated hereby are also subject to the satisfaction
at or prior to the Closing Date of the following conditions, any or all of
which may be waived in writing by Parent, in whole or in part:
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(a) Representations and Warranties. Each of the
representations and warranties of the Company contained in this
Agreement shall be true and correct as of the Closing Date as though
made on and as of the Closing Date (except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall be true and
correct as of such earlier date). The Parent Companies shall have
received a certificate of the President and the Chief Financial
Officer of the Company, dated the Closing Date, to such effect.
(b) Agreements and Covenants. The Company shall have
performed or complied with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to
the Closing Date. The Parent Companies shall have received a
certificate of the President and the Chief Financial Officer of the
Company, dated the Closing Date, to that effect.
(c) Material Adverse Change. Since November 30, 1995,
there shall have been no change, occurrence or circumstance in the
current or future business, financial condition or results of
operations of the Company or any of its subsidiaries having or
reasonably likely to have, individually or in the aggregate, a
material adverse effect on the financial condition, results of
operations, business, operations or prospects of the Company and its
subsidiaries, taken as a whole. The Parent Companies shall have
received a certificate of the President and the Chief Financial
Officer of the Company, dated the Closing Date, to such effect.
(d) Absence of Regulatory Conditions. There shall not be
any action taken, or any statute, rule, regulation or order enacted,
entered, enforced or deemed applicable to the Merger, by any
Governmental Entity in connection with the grant of a regulatory
approval necessary, in the reasonable business judgment of Parent, to
the continuing operation of the current or future business of the
Company, which imposes any condition or restriction upon the Parent
Companies or the business or operations of the Company which, in the
reasonable business judgment of Parent, would be materially burdensome
in the context of the transactions contemplated by this Agreement.
(e) Tax Opinion. Xxxxxx & Xxxx, L.L.P. shall have
delivered to Parent its written opinion as of the date that the Joint
Proxy Statement/Prospectus is first mailed to Parent stockholders
substantially to the effect that (i) the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code, (ii)
Parent, Merger Sub and the Company will each be a party to that
reorganization within the meaning of Section 368(b) of the Code, and
(iii) Parent, Merger Sub and the Company will not recognize any gain
or loss for U.S. federal income tax purposes as a result of the
Merger, and such opinion shall not have been withdrawn or modified in
any material respect.
(f) Employment Agreements. The employees of the Company
set forth in a letter from Parent to the Company delivered on or prior
to the date of this Agreement shall have entered into employment
agreements with the Company, effective as of the Effective Time, in
form and substance reasonably acceptable to Parent.
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(g) Opinion of Company Counsel. Counsel to the Company
shall give an opinion in substantially the form attached hereto as
Exhibit E.
(h) The Company shall have amended each of (i) that
certain Asset Purchase Agreement by and among the Company, H&R
Communications, Inc., Xxxxxx X. Xxxxxx and Xxxxx Xxxxx (the "H&R
Agreement") and (ii) that certain Asset Purchase Agreement by and
among the company, Pro Direct Response Corp., Pro Direct Response,
Inc. of New Jersey, Pro Direct Interviewing Corp., Inc., Xxxxx Xxxx,
and Xxxxxx Xxxxxx (the "Pro Direct Agreement"), to provide that any
amounts payable by the Company in cash or in Company Common Stock
pursuant to any Earnout (as defined in the H&R Agreement or Pro Direct
Agreement, as applicable) shall be payable only in cash or in Parent
Common Stock.
SECTION 7.03. Additional Conditions to Obligations of the Company.
The obligations of the Company to effect the Merger and the other transactions
contemplated hereby are also subject to the satisfaction at or prior to the
Closing Date of the following conditions, any or all of which may be waived in
writing by the Company, in whole or in part:
(a) Representations and Warranties. Each of the
representations and warranties of the Parent Companies contained in
this Agreement shall be true and correct as of the Closing Date as
though made on and as of the Closing Date (except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall be true and
correct as of such earlier date). The Company shall have received a
certificate of the President and the Chief Financial Officer of the
Parent, dated the Closing Date, to such effect.
(b) Agreements and Covenants. The Parent Companies shall
have performed or complied with all agreements and covenants required
by this Agreement to be performed or complied with by them on or prior
to the Closing Date. The Company shall have received a certificate of
the President and the Chief Financial Officer of the Parent, dated the
Closing Date, to that effect.
(c) Material Adverse Change. Since September 30, 1995,
there shall have been no change, occurrence or circumstance in the
current or future business, financial condition or results of
operations of Parent or any of its subsidiaries having or reasonably
likely to have, individually or in the aggregate, a material adverse
effect on the financial condition, results of operations, business,
operations or prospects of Parent and its subsidiaries, taken as a
whole. The Company shall have received a certificate of the President
and the Chief Financial Officer of each of the Parent Companies, dated
the Closing Date, to such effect.
(d) Absence of Regulatory Conditions. There shall not be
any action taken, or any statute, rule, regulation or order enacted,
entered, enforced or deemed applicable to
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the Merger, by any Governmental Entity in connection with the grant of
a regulatory approval necessary, in the reasonable business judgment
of the Company, to the continuing operation of the current or future
business of Parent, which imposes any condition or restriction upon
Parent or the business or operations of Parent which, in the
reasonable business judgment of the Company, would be materially
burdensome in the context of the transactions contemplated by this
Agreement.
(e) New York Stock Exchange Listing. The shares of
Parent Common Stock to be issued in the Merger shall have been
approved for listing (subject only to official notice of issuance) on
the NYSE.
(f) Tax Opinion. Mesirov Xxxxxx Xxxxx Xxxxxx & Xxxxxxxx
shall have delivered to the Company its written opinion as of the date
that the Joint Proxy Statement/Prospectus is first mailed to the
Company stockholders substantially to the effect that (i) the Merger
will constitute a reorganization within the meaning of Section 368(a)
of the Code, (ii) Parent, Merger Sub and the Company will each be a
party to that reorganization within the meaning of Section 368(b) of
the Code, and (iii) no gain or loss for U.S. federal income tax
purposes will be recognized by the holders of the Company Common Stock
upon receipt of shares of Parent Common Stock in the Merger, except
with respect to any cash received in lieu of a fractional share
interest in Parent Common Stock, and such opinion shall not have been
withdrawn or modified in any material respect.
(g) Opinion of Parent Counsel. Counsel to the Parent
Companies shall give an opinion in substantially the form attached
hereto as Exhibit F.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after approval of this
Agreement and the Merger by the stockholders of the Company:
(a) by mutual consent of Parent and the Company;
(b) by Parent, upon a breach of any representation,
warranty, covenant or agreement on the part of the Company set forth
in this Agreement, or if any representation or warranty of the Company
shall have become untrue, in either case such that the conditions set
forth in Section 7.02(a) or Section 7.02(b) of this Agreement, as the
case may be, would be incapable of being satisfied by July 31, 1996;
provided, that in any case, a willful breach shall be deemed to cause
such conditions to be incapable of being satisfied for purposes of
this Section 8.01(b);
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(c) by the Company, upon a breach of any representation,
warranty, covenant or agreement on the part of the Parent Companies
set forth in this Agreement, or if any representation or warranty of
the Parent Companies shall have become untrue, in either case such
that the conditions set forth in Section 7.03(a) or Section 7.03(b) of
this Agreement, as the case may be, would be incapable of being
satisfied by July 31, 1996; provided, that in any case, a willful
breach shall be deemed to cause such conditions to be incapable of
being satisfied for purposes of this Section 8.01(c);
(d) by either Parent or the Company, if there shall be
any Order which is final and nonappealable preventing the consummation
of the Merger, except if the party relying on such Order to terminate
this Agreement has not complied with its obligations under Section
6.03(b) of this Agreement;
(e) by either Parent or the Company, if the Merger shall
not have been consummated before July 31, 1996;
(f) by either Parent or the Company, if this Agreement
and the Merger shall fail to receive the requisite vote for approval
and adoption by the stockholders of the Company at the Company
Stockholders Meeting or if the issuance of the Parent Common Stock in
connection with the Merger shall fail to receive the requisite vote
for approval by the stockholders of Parent at the Parent Stockholders
Meeting;
(g) by Parent, if (i) the Board of Directors of the
Company withdraws, modifies or changes its recommendation of this
Agreement or the Merger in a manner adverse to Parent or shall have
resolved to do any of the foregoing; (ii) the Board of Directors of
the Company shall have recommended to the stockholders of the Company
any Competing Transaction or shall have resolved to do so; (iii) a
tender offer or exchange offer for 20% or more of the outstanding
shares of capital stock of the Company is commenced, and the Board of
Directors of the Company does not recommend that stockholders not
tender their shares into such tender or exchange offer or; (iv) any
person (other than Parent or an affiliate thereof) shall have acquired
beneficial ownership or the right to acquire beneficial ownership of,
or any "group" (as such term is used in Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder) shall have
been formed which beneficially owns or has the right to acquire
beneficial ownership of, 20% or more of the then outstanding shares of
capital stock of the Company;
(h) by the Company, if the Board of Directors of the
Company (i) fails to make or withdraws its recommendation referred to
in Section 6.02(a) if there exists at such time a Competing
Transaction, or (ii) recommends to the Company's stockholders approval
or acceptance of a Competing Transaction, in each case only if the
Board of Directors of the Company, after consultation with and based
upon the advice of independent legal counsel (who may be the Company's
regularly engaged independent legal counsel), determines in good faith
that such action is necessary for such Board of Directors to comply
with its fiduciary duties to stockholders under applicable law;
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(i) by the Company, if (i) the Board of Directors of the
Parent withdraws, modifies or changes its recommendation of this
Agreement or the Merger in a manner adverse to the Company or shall
have resolved to do any of the foregoing; (ii) the Board of Directors
of Parent shall have recommended to the stockholders of Parent any
Alternate Transaction (as defined below) or shall have resolved to do
so; (iii) a tender offer or exchange offer for 40% or more of the
outstanding shares of capital stock of Parent is commenced, and the
Board of Directors of Parent does not recommend that stockholders not
tender their shares into such tender or exchange offer or; (iv) any
person (other than the Company or an affiliate thereof) shall have
acquired beneficial ownership or the right to acquire beneficial
ownership of, or any "group" (as such term is used in Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder)
shall have been formed which beneficially owns or has the right to
acquire beneficial ownership of, 40% or more of the then outstanding
shares of capital stock of Parent; or
(j) by Parent, if the Board of Directors of Parent (i)
fails to make or withdraws its recommendation referred to in Section
6.02(a) if there exists at such time an Alternate Transaction, or (ii)
recommends to Parent's stockholders approval or acceptance of an
Alternate Transaction, in each case only if the Board of Directors of
Parent, after consultation with and based upon the advice of
independent legal counsel (who may be Parent's regularly engaged
independent legal counsel), determines in good faith that such action
is necessary for such Board of Directors to comply with its fiduciary
duties to stockholders under applicable law. As used herein
"Alternate Transaction" shall mean any of the following (other than
the transactions contemplated by this Agreement) involving Parent or
any of its subsidiaries: (i) any merger, consolidation, share
exchange, business combination or similar transaction, which
precludes, or materially interferes with, the consummation of the
Merger; (ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition of 40% or more of the assets of Parent and its
subsidiaries, taken as a whole, (iii) any tender offer or exchange
offer for 40% or more of the outstanding shares of capital stock of
Parent or the filing of a registration statement under the Securities
Act in connection therewith; (iv) any person having acquired
beneficial ownership of, or any group (as such term is used in Section
13(d) of the Exchange Act and the rules and regulations promulgated
thereunder) having been formed which beneficially owns or has the
right to acquire beneficial ownership of, 40% or more of the
outstanding shares of capital stock of Parent; or (v) any public
announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
The right of any party hereto to terminate this Agreement pursuant to this
Section 8.01 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.
SECTION 8.02. Effect of Termination. Except as provided in Section
8.05 or Section 9.01 of this Agreement, in the event of the termination of this
Agreement pursuant to
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Section 8.01, this Agreement shall forthwith become void, there shall be no
liability on the part of the Parent Companies or the Company to the other and
all rights and obligations of any party hereto shall cease, except that nothing
herein shall relieve any party of any liability for (i) any breach of such
party's covenants or agreements contained in this Agreement, or (ii) any
willful breach of such party's representations or warranties contained in this
Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time; provided, however, that,
after approval of the Merger by the stockholders of the Company, (i) no
amendment, which under applicable law may not be made without the approval of
the stockholders of the Company, may be made without such approval, and (ii) no
amendment, which under the applicable rules of the NYSE, may not be made
without the approval of the stockholders of Parent, may be made without such
approval. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any inaccuracies
in the representations and warranties of the other party contained herein or in
any document delivered pursuant hereto and (c) waive compliance by the other
party with any of the agreements or conditions contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed by the party or parties to be bound thereby. For purposes of
this Section 8.04, the Parent Companies as a group shall be deemed to be one
party.
SECTION 8.05. Fees, Expenses and Other Payments.
(a) Except as provided in Section 8.05(c) of this
Agreement, all Expenses (as defined in paragraph (b) of this Section
8.05) incurred by the parties hereto shall be borne solely and
entirely by the party which has incurred such Expenses; provided,
however, that the allocable share of the Parent Companies as a group
and the Company for all Expenses related to printing, filing and
mailing the Registration Statement, the Joint Proxy
Statement/Prospectus and all SEC and other regulatory filing fees
incurred in connection with the Registration Statement, the Joint
Proxy Statement/Prospectus and the Xxxx-Xxxxx-Xxxxxx Premerger
Notification and Report shall be one-half each.
(b) "Expenses" as used in this Agreement shall include
all out-of-pocket expenses (including, without limitation, all fees
and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party
or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement,
the preparation, printing, filing and mailing of the Registration
Statement, the Company Proxy Statement and the Parent Proxy Statement,
the solicitation of stockholder approvals and all other matters
related to the consummation of the transactions contemplated hereby.
(c) The Company agrees that if this Agreement is
terminated pursuant to:
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(i) Section 8.01(b) and (i) such termination is
the result of a willful breach of any representation,
warranty, covenant or agreement of the Company contained
herein and (ii) the Company shall have entered into material
negotiations relating to a Competing Transaction, in any such
case at any time within the period commencing on the date of
this Agreement through the date of termination of this
Agreement; or
(ii) Section 8.01 (f) because this Agreement and
the Merger shall fail to receive the requisite vote for
approval and adoption by the stockholders of the Company at
the Company Stockholders Meeting and at the time of such
meeting there shall exist a Competing Transaction; or
(iii) Section 8.01(g)(i) and at the time of the
withdrawal, modification or change (or resolution to do so) of
its recommendation by the Board of Directors of the Company,
there exists a Competing Transaction; or
(iv) Sections 8.01(g)(ii) or (iii); or
(v) Section 8.01(h); and
there has been no material adverse change as described in Section
7.03(c) or material breach by Parent of any representation, warranty
or covenant on the part of Parent set forth in this Agreement, then
the Company shall pay to Parent an amount equal to $4,000,000, which
amount is inclusive of all of Parent's Expenses.
(d) Parent agrees that if this Agreement is terminated
pursuant to:
(i) Section 8.01(c) and (i) such termination is
the result of a willful breach of any representation,
warranty, covenant or agreement of Parent contained herein and
(ii) Parent shall have entered into material negotiations
relating to an Alternate Transaction, in any such case at any
time within the period commencing on the date of this
Agreement through the date of termination of this Agreement;
or
(ii) Section 8.01 (f) because this Agreement and
the Merger shall fail to receive the requisite vote for
approval and adoption by the stockholders of Parent at the
Parent Stockholders Meeting and at the time of such meeting
there shall exist an Alternate Transaction; or
(iii) Section 8.01(i)(i) and at the time of the
withdrawal, modification or change (or resolution to do so) of
its recommendation by the Board of Directors of Parent, there
exists an Alternate Transaction; or
(iv) Sections 8.01(i)(ii) or (iii); or
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(v) Section 8.01(j); and
there has been no material adverse change as described in Section 7.02(c) or
material breach by the Company of any representation, warranty or covenant on
the part of the Company set forth in this Agreement, then Parent shall pay to
the Company an amount equal to $4,000,000, which amount is inclusive of all of
the Company's Expenses.
(e) Any payment required to be made pursuant to Section
8.05(c) or (d) of this Agreement shall be made as promptly as
practicable but not later than ten business days after termination of
this Agreement, and shall be made by wire transfer of immediately
available funds to an account designated by Parent or the Company, as
applicable.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Effectiveness of Representations, Warranties and
Agreements.
(a) Except as set forth in Section 9.01(b) of this
Agreement, the representations, warranties and agreements of each
party hereto shall remain operative and in full force and effect from
the date of this Agreement until the Effective Date regardless of any
investigation made by or on behalf of any other party hereto, any
person controlling any such party or any of their officers, directors,
representatives or agents, whether prior to or after the execution of
this Agreement.
(b) The representations, warranties and agreements in
this Agreement shall terminate at the Effective Time or upon the
termination of this Agreement pursuant to Article VIII, except that
the agreements set forth in Articles I and II and IX and Sections
6.08, 6.09 and 6.11 shall survive the Effective Time and those set
forth in Sections 5.04(d), 8.02 and 8.05 and Article IX hereof shall
survive termination. Nothing herein shall be construed to cause the
Confidentiality Agreements to terminate upon the termination of this
Agreement pursuant to Article VIII.
SECTION 9.02. Notices. All notices and other communications given
or made pursuant hereto shall be in writing and shall be deemed to have been
duly given upon receipt, if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested) to the parties at
the following addresses (or at such other address for a party as shall be
specified by like changes of address) or sent by electronic transmission to the
telecopier number specified below:
(a) If to any of the Parent Companies, to:
Xxxxx-Xxxxx Communications, Inc.
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000 Xxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopier No. (000) 000-0000
with a copy to:
Xxxxxx & Xxxx, L.L.P.
2800 Bank One Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
(b) If to the Company, to:
DiMark, Inc.
0000 Xxxxx Xxxxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Xxxxxxx Xxxx
Telecopier No.: (000) 000-0000
with a copy to:
Mesirov Xxxxxx Xxxxx Xxxxxx & Xxxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
SECTION 9.03. Certain Definitions. For the purposes of this
Agreement, the term:
(a) "affiliate" means a person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned
person;
(b) a person shall be deemed a "beneficial owner" of or
to have "beneficial ownership" of the Company Common Stock or Parent
Common Stock, as the case may be, in accordance with the
interpretation of the term "beneficial ownership" as defined in Rule
13d-3 under the Exchange Act, as in effect on the date hereof;
provided that a
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person shall be deemed to be the beneficial owner of, and to have
beneficial ownership of, the Company Common Stock or Parent Common
Stock, as the case may be, that such person or any affiliate of such
person has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise.
(c) "business day" means any day other than a day on
which banks in the State of New York are authorized or obligated to be
closed;
(d) "control" (including the terms "controlled,"
"controlled by," and "under common control with") means the
possession, directly or indirectly, or as trustee or executor, of the
power to direct or cause the direction of the management or policies
of a person, whether through the ownership of stock or as trustee or
executor, by contract or credit arrangement or otherwise;
(e) "ERISA Affiliate" means the Company and each
corporation, partnership, or other trade or business, whether or not
incorporated, which is or has been treated as a single employer or
controlled group member with the Company pursuant to Code Section 414
or ERISA Section 4001.
(f) "knowledge" or "known" means with respect to any
matter in question, if an executive officer of the Company or Parent,
as the case may be, has actual knowledge of such matter;
(g) "person" means an individual, corporation,
partnership, association, trust, unincorporated organization, other
entity or group (as used in Section l3(d) of the Exchange Act);
(h) "Registrable Securities" shall mean any shares of
Parent Common Stock issued to affiliates of the Company pursuant to
Section 2.01 of this Agreement. As to any particular Registrable
Securities, once issued such securities shall cease to be Registrable
Securities when (i) a registration statement with respect to the sale
of such securities shall have become effective under the Securities
Act and such securities shall have been disposed of in accordance with
such registration statement, (ii) they shall have been sold pursuant
to Rule 145(d) (or any successor provision) under the Securities Act
or be freely saleable under Rule 145(d) under the Securities Act in
the written opinion of outside counsel, addressed to the holders
thereof, selected by the Company and reasonable acceptable to such
holders, (iii) they shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent
disposition of them shall not require registration or qualification of
them under the Securities Act or any state securities or blue sky law
then in force, or (iv) they shall have ceased to be outstanding.
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(i) "subsidiary" or "subsidiaries" of the Company,
Parent, the Surviving Corporation or any other person, means any
corporation, partnership, joint venture or other legal entity of which
the Company, Parent, the Surviving Corporation or any such other
person, as the case may be (either alone or through or together with
any other subsidiary), owns, directly or indirectly, 50% or more of
the stock or other equity interests the holders of which are generally
entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity; and
(j) "Tax" or "Taxes" means any and all taxes, charges,
fees, levies, assessments, duties or other amounts payable to any
federal, state, local or foreign taxing authority or agency,
including, without limitation, (x) income, franchise, profits, gross
receipts, minimum, alternative minimum, estimated, ad valorem, value
added, sales, use, service, real or personal property, capital stock,
license, payroll, withholding, disability, employment, social
security, workers compensation, unemployment compensation, utility,
severance, excise, stamp, windfall profits, transfer and gains taxes,
(y) customs, duties, imposts, charges, levies or other similar
assessments of any kind, and (z) interest, penalties and additions to
tax imposed with respect thereto.
SECTION 9.04. Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement Section references herein are, unless the
context otherwise requires, references to sections of this Agreement.
SECTION 9.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
SECTION 9.06. Entire Agreement. This Agreement (together with the
Exhibits, the Company Disclosure Schedule and the Parent Disclosure Schedule)
and the Confidentiality Agreements constitute the entire agreement of the
parties, and supersede all prior agreements and undertakings, both written and
oral, among the parties or between any of them, with respect to the subject
matter hereof. The Company agrees that nothing contained in this Agreement,
the proxies granted by certain officers and directors of the Company to Parent
on or about the date hereof or the transactions contemplated hereby or thereby
shall be deemed to violate the Confidentiality Agreements and that such
agreements and proxies have been entered into or granted with the prior written
consent of the Company.
SECTION 9.07. Assignment. This Agreement shall not be assigned by
operation of law or otherwise.
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SECTION 9.08. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied (other than as contemplated by Section 6.08 and
Section 6.11), is intended to or shall confer upon any other person any right,
benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
SECTION 9.09. Specific Performance. The parties hereby acknowledge
and agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part to the consummation of the Merger, will cause irreparable injury to the
other parties for which damages, even if available, will not be an adequate
remedy. Accordingly, each party hereby consents to the issuance of injunctive
relief by any court of competent jurisdiction to compel performance of such
party's obligations and to the granting by any court of the remedy of specific
performance of its obligations hereunder.
SECTION 9.10. Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of any party hereto in the
exercise of any right hereunder shall impair such right or be construed to be a
waiver of, or acquiescence in, any breach of any representation, warranty or
agreement herein, nor shall any single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights
and remedies existing under this Agreement are cumulative to, and not exclusive
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 9.11. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of
conflicts of law, except to the extent that the laws of New Jersey mandatorily
apply.
SECTION 9.12. Registration Rights.
(a) Piggyback Registration.
(1) If, at any time in the first two years following
the Closing, the Parent proposes to register any of its Common
Stock under the Securities Act (other than on a registration
statement on Form S-4 or S-8, or any successor or other forms
promulgated for similar purposes), the Parent shall give
written notice to the holders of any Registrable Securities
at least 15 days prior to the anticipated filing date of such
proposed registration statement and upon the written request
of any such holder, given within 10 days of the receipt of any
such written notice (which request shall specify the
Registrable Securities intended to be disposed of by such
holder), the Parent will use its best efforts to include in
such registration statement all of the Registrable Securities
held by such holders and specified in such requests; provided,
however, that (i) the maximum number of securities to be sold
by such holders shall not exceed the number of securities
which the managing underwriter (or the Parent in the event the
offering is not underwritten)
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considers, in good faith, to be appropriate based on market
conditions and other relevant factors (including pricing and
the number of securities to be sold by the Parent and
stockholders and option holders of the Parent) at such time;
and (ii) if the total number of securities desired to be sold
exceeds such amount, the Parent or, in the case of
registration required pursuant to a demand registration right
granted to other stockholders of the Parent, the stockholders
that demanded such registration, shall be entitled to include
in the offering the full number of securities which it desires
to include, and any holders of Registrable Securities, and
other stockholders and option holders of the Parent who elect
to participate in the offering shall each be entitled to sell
a portion of any remaining amount of the number of securities
pro rata based on the number of shares of Common Stock each
such holder notified the Parent that such holder wished to
sell. In any case, any such holder shall have the right to
withdraw its request for inclusion of its securities in any
registration statement pursuant hereto by giving written
notice to the Parent of its request to withdraw prior to the
effective date of such registration statement. At any time
prior to the effective date of any registration statement
pursuant hereto, the Parent shall have the right to
discontinue such registration hereunder. No registration
effected pursuant to this Section 9.12(a) shall relieve the
Parent from its obligation to effect any registration on
request pursuant to Section 9.12(b) hereof.
(2) If any holder of Registrable Securities
elects to participate in an underwritten offering of
securities, the Parent will enter into an underwriting
agreement with the underwriters for such offering, such
agreement to be reasonably satisfactory in form and substance
to the Parent, each such selling holder and the underwriters,
and to contain such representations, warranties and covenants
by the Parent and such other terms as are customarily
contained in such agreements used by the managing underwriter,
including without limitation indemnities and contributions to
the effect and to the extent provided herein or as may
otherwise be required by the managing underwriter. Each such
selling holder shall be party to any underwriting agreement
relating to an underwritten sale of its securities. Such
holder shall not be required to make any representations or
warranties to or agreements with the Parent or the
underwriters except as related to such holder and except for
the indemnities and contribution to the effect and to the
extent provided herein or as may otherwise be required by the
managing underwriter.
(b) Registration on Request.
(1) For a period of two years following the
Closing, upon the written request of holders holding
Registrable Securities requesting that the Parent effect the
registration under the Securities Act of not less than 500,000
shares of such Registrable Securities, the Parent shall
promptly provide written notice of such request to all holders
of Registrable Securities, and thereupon will use its best
efforts to register under the Securities Act the Registrable
Securities held by such
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holders which the Parent has been so requested by such holders
to register and all other Registrable Securities which the
Parent has been requested by any other holder by written
request given to the Parent within 10 days after giving of
such written notice by the Parent, subject to the limitation
of subsection (3) below.
(2) The registration rights granted hereby are
subject to the following limitations: (i) the Parent shall
not be obligated to file more than one such registration
statements pursuant hereto; (ii) the Parent shall not be
obligated to cause any registration statement filed hereunder
to be declared effective less than six months after the
effective date of any other registration statement filed by
the Parent; and (iii) if with respect thereto, the managing
underwriter, the SEC, the Securities Act, or the form on which
the registration statement is to be filed, would require the
conduct of an audit other than the regular audit conducted by
the Parent at the end of its fiscal year, in which case the
filing may be delayed until the completion of such regular
audit (unless the holders requesting registration agree to pay
the expenses of the Parent in connection with such an audit
other than the regular audit). In addition, the Parent shall
have the right to postpone the filing of any registration
statement requested pursuant hereto for up to three (3) months
if, in the opinion of the Board of Directors of the Parent,
the filing of any such registration statement would interfere
with any material transaction then being pursued by the Parent
or other material, pending development. The Parent shall
select any underwriter or underwriters used in connection with
any public offering of securities registered pursuant to this
paragraph.
(3) The Parent may elect to include in any
registration statement filed and any offering pursuant hereto,
newly issued shares of Common Stock and shares held by other
stockholders of the Parent ("Other Sellers"); provided that if
the number of securities desired to be offered by the Parent
and such Other Sellers together with the Registrable
Securities which the Parent has been requested to register
exceeds the maximum number of securities which any managing
underwriter recommends including in the offering, then the
holders of Registrable Securities and the Parent shall be
entitled to include in the offering the full number of
securities which they desire to include, and each of the Other
Sellers who elect to participate in the offering shall be
entitled to sell a portion of the remaining maximum number, if
any, pro rata based on the number of securities each such
Other Seller notified the Parent that such Other Seller wished
to sell. If, pursuant to the preceding sentence, all the
securities of the Other Sellers are excluded, and the number
of securities proposed to be included by the holders of
Registrable Securities and the Parent exceeds the maximum
number, such holders shall be entitled to include in the
offering the full number of Registrable Securities and the
Parent shall be entitled to sell the remaining amount up to
the maximum number. Each of the holders of Registrable
Securities and the Parent (in the event that any securities
are to be offered by the Parent) may withdraw from any demand
registration pursuant hereto by giving written notice to the
Parent prior to
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the closing with respect to such offering; provided, however,
that after such withdrawal, no such withdrawing holder may
demand any registration pursuant hereto.
(c) Cooperation. If so requested by any managing
underwriter of any offering of securities pursuant hereto, all holders
of Registrable Securities and the Parent shall agree not to sell any
shares of Common Stock (other than shares to be sold in such offering)
without the consent of any such managing underwriter for a period of
seven days prior to and up to three months after the effective date of
the registration statement filed with respect to such offering.
(d) Information. A holder of Registrable Securities
wishing to have any Registrable Securities included in a registration
statement shall furnish to the Parent all such information and
material as may be reasonably requested by the Parent or its counsel,
including without limitation all information and material concerning
such holder of Registrable Securities as may be required to be
included in such registration statement under the Securities Act and
the securities laws of the jurisdictions in which any public offering
is made. Such holder shall also do all such things and execute all
such additional instruments as may be necessary or desirable in the
opinion of the Parent or its counsel in connection with such
registration statement and shall comply in all respects with the
Securities Act and the securities laws of the jurisdictions in which
any public offering is made. The Parent may require each seller of
any Registrable Securities as to which any registration is being
effected to furnish the Parent such information regarding such seller
and the distribution of such Registrable Securities as the Parent may
from time to time request in writing and as shall be required by law
to effect such registration.
(e) Obligations of the Parent. Whenever the Parent is
required by the provisions hereof to register any Registrable
Securities under the Securities Act, the Parent shall, as
expeditiously as possible:
(1) prepare and file with the SEC, and use its
best efforts to cause to be declared and remain effective, the
registration statement and any amendments and supplements to
the registration statement and the prospectus used in
connection therewith as may be necessary to keep the
registration statement current and to comply with the
provisions of the Securities Act with respect to the
disposition of all securities covered by the registration
statement required to effect the distribution of such
securities, but in no event shall the Parent be required to do
so for a period of more than 180 days following the effective
date of the registration or such longer period as may be
required under any underwriting agreement;
(2) use its best efforts to register or qualify
the securities covered by the registration statement under
such other securities or blue sky laws of such jurisdictions
in the United States as any managing underwriter reasonably
shall request; provided, however, that in no event shall the
Parent be required to qualify to do business as a foreign
corporation in any jurisdiction where it is not so
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qualified, to conform the composition of its assets at the
time to the securities or blue sky laws of any jurisdiction,
or to subject itself to taxation in any jurisdiction where it
has not theretofore done so;
(3) otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC;
(4) assist the sellers of any such Registrable
Securities and any managing underwriter in the marketing
process with respect to such public offering to such extent as
they shall reasonably request;
(5) furnish to each seller of such Registrable
Securities such number of copies of such registration
statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies
of the prospectus included in such registration statement
(including each preliminary prospectus), in conformity with
the requirements of the Securities Act, and such other
documents, as such seller may reasonably request in order to
facilitate the disposition of the Common Stock owned by such
seller; and
(6) notify each seller of any such Registrable
Securities covered by such registration statement, at any time
when a prospectus relating thereto is required to be delivered
under the Securities Act within the period mentioned in
subdivision (1) of this Section 9.12(e), of the happening of
any event as a result of which the prospectus included in 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 not misleading in light of the
circumstances under which they were made (and upon receipt of
such notice and until a supplemented or amended prospectus as
set forth below is available, each such seller shall not offer
or sell any securities covered by such registration statement
and shall return all copies of such prospectus to the Parent
if requested to do so by it), and at the request of any such
seller prepare and furnish to such seller a reasonable number
of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter 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 not
misleading in light of the circumstances under which they were
made.
(f) Expenses. The Parent will pay all registration
expenses in connection with each registration of Registrable
Securities requested pursuant to Sections 9.12(a) and 9.12(b) and any
other fees and expenses relating to the Parent, and each holder shall
pay all fees and expenses of counsel to such holder, underwriting
discounts and commissions, and transfer taxes, if any, relating to the
sale or disposition of such holder's Registrable Securities pursuant
to a registration statement effected pursuant to Sections 9.12(a) and
9.12(b).
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(g) Indemnification.
(1) In the event of any registration under the
Securities Act of any securities of the Parent pursuant
hereto, the Parent shall (i) indemnify and hold harmless any
holder of Registrable Securities whose securities are included
in the registration statement (the "Seller"), any underwriter,
and each other person, if any, who controls any Seller or
underwriter within the meaning of Section 15 of the Securities
Act, against any losses, claims, damages or liabilities, joint
or several ("Claims"), to which each such indemnified party
may become subject, under the Securities Act or otherwise,
insofar as any claims (or actions in respect thereof) that
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or preliminary prospectus (if used
prior to the effective date of the registration statement) or
summary or final prospectus or any amendment or supplement
thereto (if used during the period that the Parent is required
to keep the registration statement current) or any document
filed under a state securities or blue sky law (collectively,
"Registration Documents") or insofar as any Claims (or actions
in respect thereof) that arise out of or are based upon the
omission or alleged omission to state in any Registration
Document a material fact required to be stated therein or
necessary to make the statements made therein not misleading;
and (ii) reimburse each indemnified party for all legal or
other expenses reasonably incurred by it in connection with
investigating or defending any Claim or action, excluding any
amounts paid in settlement of any litigation, commenced or
threatened, if such settlement is effected without the prior
written consent of the Parent; provided, however, that the
Parent shall not be liable to a particular indemnified party
in any case to the extent that any Claim or expense arises out
of or is based upon any untrue statement or alleged untrue
statement or omission made in any Registration Document in
reliance upon and in conformity with information furnished by
such indemnified party. In addition, the Parent will not
indemnify (unless otherwise required by the managing
underwriter) any underwriter or any person who is associated
with or controls any underwriter with respect to any
preliminary prospectus if the underwriter failed to send or to
give a copy of the final prospectus to the person asserting
the Claim at or prior to the written confirmation of the sale
of the securities of the Parent to such person, if the untrue
statement or omission at issue had been corrected in the final
prospectus.
(2) In the event of any registration under the
Securities Act of any Registrable Securities pursuant hereto,
each Seller severally shall (i) indemnify and hold harmless
the Parent, each of its directors, each of its officers who
have signed the registration statement, each other person, if
any, who controls the Parent within the meaning of Section 15
of the Securities Act, and each underwriter and each other
person, if any, who controls such underwriter within the
meaning of Section 15 of the Securities Act against any Claims
to which each such indemnified party may become subject under
the Securities Act or otherwise,
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insofar as such Claims (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any
Registration Document, or arise out of or are based upon the
omission or alleged omission to state in any Registration
Document a material fact required to be stated therein or
necessary to make the statements made therein not misleading,
and (ii) reimburse each indemnified party for all legal or
other expenses reasonably incurred by it in connection with
investigating or defending any such Claim or action, excluding
any amounts paid in settlement of any litigation, commenced or
threatened, if the settlement is effected without the prior
written consent of the Seller; provided, however, that such
indemnification or reimbursement shall be payable only if, and
to the extent that any Claim or expense arises out of or is
based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Registration Document
in reliance upon and in conformity with written information
furnished to the Parent by the Seller specifically stating
that it is for use in the preparation thereof.
(3) The Parent will not be required to register
Registrable Securities held by any Seller unless such Seller
executes an agreement to indemnify the Parent and other
Sellers and associated persons upon the same terms and
conditions as the Seller agrees to indemnify the Parent as
provided herein.
(4) Promptly after receipt by a party to be
indemnified of notice of the commencement of any action, the
indemnified party shall notify the party from whom indemnity
may be sought in writing of the commencement thereof, if a
claim in respect thereof is to be made against an indemnifying
party hereunder; but the omission of such notice shall not
relieve the indemnifying party from any liability which it may
have to any indemnified party otherwise than pursuant hereto.
In case any action is brought against the indemnified party
and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to
participate in, and to the extent that it chooses, to assume
the defense thereof with counsel reasonably satisfactory to
the indemnified party, and after notice from the indemnifying
party to the indemnified party that it so chooses, the
indemnifying party shall not be liable for any legal or other
expenses subsequently incurred by the indemnified party in
connection with the defense thereof; provided, however, that
(i) if the indemnifying party fails to take reasonable steps
necessary to defend diligently the claim within 20 days after
receiving notice from the indemnified party that the
indemnified party believes it has failed to do so, or (ii) if
the indemnified party who is a defendant in any action or
proceeding which is also brought against the indemnifying
party reasonably shall have concluded that there may be legal
defenses available to the indemnified party that are not
available to the indemnifying party, or (iii) if
representation of both parties by the same counsel is
otherwise inappropriate under applicable standards of
professional conduct, the indemnified party shall have the
right to assume or continue its own defense as set forth above
(but with no more than one firm of counsel for all indemnified
parties in each jurisdiction, except to the extent
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any indemnified party or parties reasonably shall have
concluded that there may be legal defenses available to some
indemnified parties that are not available to all, or to the
extent representation of all indemnified parties by the same
counsel is otherwise inappropriate under applicable standards
of professional conduct) and the indemnifying party shall be
liable for any expenses therefor. 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, 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.
(5) Any indemnity agreements contained herein
shall be in addition to any other rights to indemnification or
contribution which any indemnified party may have pursuant to
law or contract and shall remain operative and in full force
and effect regardless of any investigation made or omitted by
or on behalf of any indemnified party.
(6) If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an
indemnified party, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified
party as a result of such losses, claims, damages, liabilities
or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying
party on the one hand and the indemnified party on the other
or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the
indemnified party than the amount hereinafter calculated, in
such proportion as is appropriate to reflect not only the
relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other, but also the
relative fault of the indemnifying party and the indemnified
party, as well as any other relevant equitable considerations.
No person guilty of fraudulent misrepresentations (within the
meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(h) All agreements with respect to indemnification
pursuant to this Agreement shall remain in full force and effect and
shall survive delivery of and payment for any Registrable Securities
registered pursuant to this Section 9.12.
SECTION 9.13. Counterparts. This Agreement may be executed in
multiple counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
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SECTION 9.14. Irrevocable Proxy.
(a) Upon execution of this Agreement, the Company shall
cause each of Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxx and Xxxxxxx X. Xxxxxx
to execute and deliver an irrevocable proxy in favor of Parent with
respect to all of the voting stock of the Company held by such persons
equal to approximately 28.2% of the total shares of Company voting
stock outstanding as of the date hereof, in substantially the form
attached as Exhibit C to this Agreement.
(b) Upon execution of this Agreement, Parent shall cause
each of Xxxxx Xxxxxxxx and Houston X. Xxxxx to execute and deliver an
irrevocable proxy in favor of the Company with respect to the voting
stock of Parent held by such persons equal to approximately 28.2% of
the total shares of Parent voting stock as of the date hereof in
substantially the form attached as Exhibit D to this Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
XXXXX-XXXXX COMMUNICATIONS, INC.
By:
----------------------------------------
President and Chief Executive Officer
HHD ACQUISITION CORP.
By:
----------------------------------------
President
DIMARK, INC.
By:
----------------------------------------
Chairman
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EXHIBIT A
COMPANY AFFILIATE'S AGREEMENT
Xxxxx-Xxxxx Communications, Inc.
000 Xxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
I have been advised that as of the date hereof, I may be deemed to be
an "affiliate" of DiMark, Inc., a New Jersey corporation (the "Company"), as
that term is defined for purposes of paragraphs (c) and (d) of Rule 145 of the
Rules and Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "Securities Act").
Pursuant to the terms and subject to the conditions of that certain
Agreement and Plan of Merger by and among Xxxxx-Xxxxx Communications, Inc., a
Delaware corporation ("Parent"), HHD Acquisition Corp., a New Jersey
corporation and a wholly owned subsidiary of Parent ("Merger Sub"), and the
Company dated as of February __, 1996 (the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub with and into the Company (the
"Merger"), I will be entitled to receive shares of common stock, par value
$1.00 per share, of Parent ("Parent Common Stock"), in exchange for shares of
common stock, no par value, of the Company ("the Company Common Stock") owned
by me at the Effective Time (as defined in the Merger Agreement) of the Merger
as determined pursuant to the Merger Agreement.
I further understand that the Merger will be treated for financial
accounting purposes as a "pooling of interests" in accordance with generally
accepted accounting principles and that the staff of the SEC has issued certain
guidelines that should be followed to ensure the pooling of the entities.
In consideration of the agreements contained herein, Parent's reliance
on this letter in connection with the consummation of the Merger and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, I hereby represent, warrant and agree that (i) I will not
make any sale, transfer or other disposition of the Company Common Stock owned
by me during the period commencing 30 days before the Effective Time and ending
at the earlier of the Effective Time and the termination of the Merger
Agreement, and (ii) I will not make any sale, transfer or other disposition of
Parent Common Stock owned by me after the Effective Time until such time as
financial statements that include at least 30 days of combined operations of
the Company and Parent after the Merger shall have been publicly reported,
unless I shall have delivered to Parent prior to any such sale, transfer or
other disposition, a written opinion from KPMG Peat Marwick, independent public
accountants for Parent, or a written no-
Exhibit A-1
69
action letter from the accounting staff of the SEC, in either case in form and
substance reasonably satisfactory to Parent, to the effect that such sale,
transfer or other disposition will not cause the Merger not to be treated as a
"pooling of interests" for financial accounting purposes in accordance with
generally accepted accounting principles and the rules, regulations and
interpretations of the SEC and (iii) I will not make any sale, transfer or
other disposition of any shares of Parent Common Stock received by me pursuant
to the Merger in violation of the Securities Act or the Rules and Regulations.
I have been advised that the issuance of the shares of Parent Common Stock
pursuant to the Merger will have been registered with the SEC under the
Securities Act on a Registration Statement on Form S-4. However, I have also
been advised, and I agree, that since I may be deemed to be an affiliate of the
Company at the time the Merger is submitted for a vote of the stockholders of
the Company, the Parent Common Stock received by me pursuant to the Merger can
be sold by me only (i) pursuant to an effective registration statement under
the Securities Act, (ii) in conformity with the volume and other limitations of
Rule 145 promulgated by the SEC under the Securities Act, or (iii) in reliance
upon an exemption from registration that is available under the Securities Act.
I also understand and agree that stop transfer instructions will be
given to Parent's transfer agent with respect to the Parent Common Stock to be
received by me pursuant to the Merger and that there will be placed on the
certificates representing such shares of Parent Common Stock, or any
substitutions therefor, a legend stating in substance as follows:
"These shares were issued in a transaction to which Rule 145 promulgated under
the Securities Act of 1933 applies. These shares may only be transferred in
accordance with the terms of such Rule and an Affiliate's Agreement between the
original holder of such shares and [Parent], a copy of which agreement is on
file at the principal offices of such company."
It is understood and agreed that the legend set forth above shall be
removed upon surrender of certificates bearing such legend by delivery of
substitute certificates without such legend if I shall have delivered to Parent
an opinion of counsel, in form and substance reasonably satisfactory to Parent,
to the effect that the sale or disposition of the shares represented by the
surrendered certificates may be effected without registration of the offering,
sale and delivery of such shares under the Securities Act.
By its execution hereof, Parent agrees that it will, as long as I own
any Parent Common Stock to be received by me pursuant to the Merger, the resale
of which remains subject to Rule 145 under the Securities Act, take all
reasonable efforts to make timely filings with the SEC of all reports required
to be filed by it pursuant to the Securities Exchange Act of 1934, as amended,
and will promptly furnish upon written request of the undersigned a written
statement confirming that such reports have been so timely filed.
Exhibit A-2
70
If you are in agreement with the foregoing, please so indicate by
signing below and returning a copy of this letter to the undersigned, at which
time this letter shall become a binding agreement between us.
Very truly yours,
By:
----------------------------------------
Name:
Title:
Date:
Address:
ACCEPTED this ______ day
of _____________, 1996
Xxxxx-Xxxxx Communications, Inc.
By:
------------------------------
Name:
Title:
Exhibit A-3
71
EXHIBIT B
PARENT AFFILIATE'S AGREEMENT
Xxxxx-Xxxxx Communications, Inc.
000 Xxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
I have been advised that as of the date hereof, I may be deemed to be
an "affiliate" of Xxxxx-Xxxxx Communications, Inc., a Delaware corporation
("Parent"), as that term is defined in Rule 1-02 of Regulation S-X of the Rules
and Regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "SEC").
I understand that, pursuant to the terms and subject to the conditions
of that certain Agreement and Plan of Merger dated as of February __, 1996 (the
"Merger Agreement") by and among Parent, HHD Acquisition Corp., a New Jersey
corporation and a wholly owned subsidiary of Parent ("Merger Sub"), and DiMark,
Inc., a New Jersey corporation ("the Company"), Merger Sub will be merged with
and into the Company (the "Merger") at the Effective Time (as defined in the
Merger Agreement).
I further understand that the Merger will be treated for financial
accounting purposes as a "pooling of interests" in accordance with generally
accepted accounting principles and that the staff of the SEC has issued certain
guidelines that should be followed to ensure the pooling of the entities.
In consideration of the agreements contained herein, Parent's reliance
on this letter in connection with the consummation of the Merger and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, I hereby represent, warrant and agree that (i) I will not
make any sale, transfer or other disposition of Parent Common Stock (as defined
in the Merger Agreement) owned by me during the period commencing 30 days
before the Effective Time and ending at the earlier of the Effective Time and
the termination of the Merger Agreement, and (ii) I will not make any sale,
transfer or other disposition of Parent Common Stock owned by me after the
Effective Time until such time as financial statements that include at least 30
days of combined operations of the Company and Parent after the Merger shall
have been publicly reported, unless I shall have delivered to Parent prior to
any such sale, transfer or other disposition, a written opinion from KPMG Peat
Marwick, independent public accountants for Parent, or a written no-action
letter from the accounting staff of the SEC, in either case in form and
substance reasonably satisfactory to Parent, to the effect that such sale,
transfer or other disposition will not cause the Merger not to be treated as a
"pooling of interests"
Exhibit B-1
72
for financial accounting purposes in accordance with generally accepted
accounting principles and the rules, regulations and interpretations of the
SEC.
Very truly yours,
By:
----------------------------------------
Name:
Title:
Date:
Address:
Exhibit B-2
73
EXHIBIT C
___________, 1996
Re: IRREVOCABLE PROXY
Ladies and Gentlemen:
In connection with the execution of that certain merger agreement by
and among Xxxxx-Xxxxx Communications, Inc., HHD Acquisition Corp., and DiMark,
Inc. (the "Company") dated February ___, 1996 (the "Merger Agreement"), the
undersigned ("Grantor") hereby irrevocably appoints (*) (or its designees),
with full power of substitution, as proxy for the Grantor to vote the shares of
common stock ("Common Stock") of the Company which the Grantor is entitled to
vote (the "Proxy Shares"), for and in the name, place and stead of the Grantor,
at any meeting of the holders of shares of Company Common Stock or any
adjournments or postponements thereof or pursuant to any consent in lieu of a
meeting, or otherwise, with respect only to the approval of the Merger
Agreement, any matters related to or in connection with the proposed merger and
any corporate action the consummation of which would violate, frustrate the
purposes of, or prevent or delay the consummation of the transactions
contemplated by the Merger Agreement (including without limitation any proposal
to amend the articles of incorporation or by-laws of the Company or approve any
merger, consolidation, sale or purchase of any assets, issuance of Company
Common Stock or any other equity security of the Company (or a security
convertible into an equity security of the Company), reorganization,
recapitalization, liquidation or winding up of or by the Company). The
undersigned represents and warrants that the undersigned has all necessary
power and authority to deliver this proxy.
This proxy is coupled with an interest and is expressly made
irrevocable and will expire on the earliest to occur of (i) the closing of the
transaction contemplated by the Merger Agreement, (ii) the termination of the
Merger Agreement pursuant to its terms, or (iii) July 31, 1996.
This proxy shall be filed with the Secretary of the Company.
-------------------------------------
Printed Name
-------------------------
No. of Proxy Shares
------------------
Exhibit C-1
74
EXHIBIT D
___________, 1996
Re: IRREVOCABLE PROXY
Ladies and Gentlemen:
In connection with the execution of that certain merger agreement by
and among Xxxxx-Xxxxx Communications, Inc. ("Parent"), HHD Acquisition Corp.
and DiMark, Inc. dated February __, 1996 (the "Merger Agreement"), the
undersigned ("Grantor") hereby irrevocably appoints (*) (or its designees),
with full power of substitution, as proxy for the Grantor to vote the shares of
common stock ("Common Stock") of Parent, which the Grantor is entitled to vote
(the "Proxy Shares"), for and in the name, place and stead of the Grantor, at
any meeting of the holders of shares of Parent Common Stock or any adjournments
or postponements thereof or pursuant to any consent in lieu of a meeting, or
otherwise, with respect only to the approval of the issuance of Parent Common
Stock pursuant to the Merger Agreement (the "Stock Issuance"), any matters
related to or in connection with the Stock Issuance and any corporate action
the consummation of which would violate, frustrate the purposes of, or prevent
or delay the consummation of the transactions contemplated by the Merger
Agreement (including without limitation any proposal to amend the certificate
of incorporation or by-laws of Parent or approve any merger, consolidation,
sale or purchase of any assets, issuance of Parent Common Stock or any other
equity security of Parent (or a security convertible into an equity security of
Parent), reorganization, recapitalization, liquidation or winding up of or by
Parent). The undersigned represents and warrants that the undersigned has all
necessary power and authority to deliver this proxy.
This proxy is coupled with an interest and is expressly made
irrevocable and will expire on the earliest to occur of (i) the closing of the
transaction contemplated by the Merger Agreement, (ii) the termination of the
Merger Agreement pursuant to its terms, or (iii) July 31, 1996.
This proxy shall be filed with the Secretary of Parent.
-------------------------------------
Printed Name
-------------------------
No. of Proxy Shares
------------------
Exhibit D-1
75
EXHIBIT E
OPINION OF COMPANY COUNSEL
Exhibit E-1
76
EXHIBIT F
OPINION OF PARENT COUNSEL
Exhibit F-1
