1
Exhibit C
EXECUTION COPY
================================================================================
AGREEMENT AND PLAN OF MERGER
among
UNITED DOMINION INDUSTRIES LIMITED,
UD DELAWARE CORP.
and
IMO INDUSTRIES INC.
Dated as of June 26, 1997
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2
TABLE OF CONTENTS
Page
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ARTICLE I.
THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.01 The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02 Note Tender Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.03 Company Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.04 Parent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II.
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.01 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.02 Effective Time; Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.03 Effect of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.04 Certificate of Incorporation; Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.05 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.06 Conversion of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.07 Employee and Director Stock Options; Deferred Director
Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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SECTION 2.08 Surrender of Shares: Stock Transfer Books . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.09 Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.01 Organization and Qualification; Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.02 Certificate of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.03 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.04 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.05 No Conflict; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.06 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.07 SEC Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.08 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.09 Absence of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.10 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.11 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.12 Offer Documents; Schedule 14D-9; Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.13 Tangible Property; Real Property and Leases . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.14 Trademarks, Patents and Copyrights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.17 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.18 Insurance; Workers' Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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SECTION 3.19 Certain Payments; Absence of Certain Business Practices . . . . . . . . . . . . . . . . . . . 23
SECTION 3.20 Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.21 Letters of Credit, Surety Bonds, Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.22 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.01 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.02 Authority Relative to This Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.03 No Conflict; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.04 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.05 Offer Documents; Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE V.
CONDUCT OF BUSINESS PENDING THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.01 Conduct of Business by the Company Pending the Merger . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VI.
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.01 Special Stockholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.02 Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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SECTION 6.03 Company Board Representation; Section 14(f) . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.04 Access to Information; Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.05 No Solicitation of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.06 Employee Benefits Matters; Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.07 Directors' and Officers' Indemnification and Insurance . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.08 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.09 Further Action; Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.10 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.11 Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VII.
CONDITIONS TO THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 7.01 Conditions to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VIII.
TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 8.01 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 8.02 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8.03 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8.04 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.05 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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ARTICLE IX.
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 9.01 Non-Survival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . 39
SECTION 9.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 9.03 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.04 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.05 Entire Agreement, Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.06 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.07 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 9.08 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 9.09 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 9.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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GLOSSARY OF DEFINED TERMS
Location of
Definitions
-----------
affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.03(a)
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
beneficial owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.03(b)
Blue Sky Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.05(b)
Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
business day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.03(c)
Certificate of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.02
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.08(b)
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.10(b)
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.04(b)
Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Consent Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Constituent Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.02
control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.03(d)
controlled by . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.03(d)
Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.04
Credit Suisse First Boston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.03
Delaware Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.01
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Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.09
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.02
Environmental Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.16(a)
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.10(a)
ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.10(c)
ERISA Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.10(b)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.03(b)
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.03(c)
Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.03(a)
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.07(b)
Hazardous Substances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.16(a)
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.05(b)
Indemnified Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.07(b)
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.04
Information Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.12
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.10(a)
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.01
Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.17
Material Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.01
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital
Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.06(a)
Minimum Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.01(a)
Multiemployer Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.10(b)
1996 Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.07(c)
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Note Offer to Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.02(b)
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Note Tender Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Note Tender Offer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.02(b)
Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Offer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.01(b)
Offer to Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.01(b)
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.08(a)
Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.10(b)
Per Share Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.03(e)
Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.10(a)
Proposed Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.02(c)
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.12
Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Purchaser's Election Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.01
Requisite Consent Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.02(a)
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.06(a)
Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.06(a)
Schedule 14D-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.01(b)
Schedule 14D-9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.03(b)
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SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.01(a)
SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.07(a)
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.07(a)
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Special Stockholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.01
Stock Option Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.07(a)
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.01
subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.03(f)
Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.02(c)
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.01
Tax or Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.15(n)
Third Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.03(f)
Third Party Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.03(f)
Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.04
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AGREEMENT AND PLAN OF MERGER, dated as of June 26, 1997 (this "Agreement"),
among UNITED DOMINION INDUSTRIES LIMITED, a corporation organized under the
laws of Canada ("Parent"), UD DELAWARE CORP., a Delaware corporation and an
indirect wholly owned subsidiary of Parent ("Purchaser"), and IMO INDUSTRIES
INC., a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Parent, Purchaser and
the Company have each determined that it is in the best interests of their
respective stockholders for Parent to acquire the Company upon the terms and
subject to the conditions set forth herein; and
WHEREAS, in furtherance of such acquisition, it is
proposed that Purchaser shall make a cash tender offer (the "Offer") to acquire
all the issued and outstanding shares of common stock, par value U.S. $1.00 per
share, of the Company (the "Shares"), together with the associated Rights (as
hereinafter defined), for U.S. $6.00 per Share (such amount, or any greater
amount per Share paid pursuant to the Offer, being hereinafter referred to as
the "Per Share Amount") net to the seller in cash, subject to withholding of
taxes, if applicable, upon the terms and subject to the conditions of this
Agreement and the Offer; and
WHEREAS, also in furtherance of such acquisition, it is
proposed that, simultaneously with the Offer, Parent shall make an offer to
purchase for cash (the "Note Offer to Purchase") all of the Company's 11 3/4%
Senior Subordinated Notes due 2006 (the "Notes") and solicit consents
("Consents") from the holders of the Notes to amend the Indenture (as defined
herein) as herein provided (the "Consent Solicitation" and collectively with
the Note Offer to Purchase, the "Note Tender Offer") at a price of 120% of the
principal amount of the Notes, upon the terms and subject to the conditions of
this Agreement and the Note Tender Offer; and
WHEREAS, the Board of Directors of the Company (the
"Board"), including all the disinterested directors on the Board, has
unanimously approved the making of the Offer and the Note Tender Offer and
resolved and agreed to recommend that holders of Shares tender their Shares
pursuant to the Offer; and
WHEREAS, the Boards of Directors of Parent, Purchaser and
the Company have each approved the merger (the "Merger") of Purchaser with and
into the Company in accordance with the General Corporation Law of the State of
Delaware ("Delaware Law") following the consummation of the Offer and the Note
Tender Offer and upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Purchaser and the Company hereby agree as follows:
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ARTICLE I.
THE OFFER
SECTION 1.01 The Offer. (a) Provided that this Agreement
shall not have been terminated in accordance with Section 8.01 and none of the
events or circumstances set forth in Annex A hereto shall have occurred or be
existing, Purchaser agrees to, and Parent agrees to cause Purchaser to, commence
the Offer as promptly as reasonably practicable after the date hereof, but in no
event later than five business days after the first public announcement of the
execution hereof. Parent and Purchaser agree that the obligation of Purchaser
to accept for payment and pay for Shares tendered pursuant to the Offer shall be
subject to the condition (the "Minimum Condition") that the number of Shares
validly tendered and not withdrawn prior to the expiration of the Offer,
combined with the Shares already owned by Parent, Purchaser or any of their
affiliates, constitute more than 80% of the then outstanding Shares at the
expiration of the Offer and also shall be subject to the satisfaction of the
other conditions set forth in Annex A. Purchaser expressly reserves the right
to waive any such condition, to increase the price per Share payable in the
Offer, and to make any other changes in the terms and conditions of the Offer;
provided, however, that Parent and Purchaser agree that no change may be made
without the consent of the Company which decreases the price per Share payable
in the Offer, which changes the form of consideration to be paid in the Offer,
which reduces the maximum number of Shares to be purchased in the Offer, which
extends the expiration date of the Offer (except that Purchaser may extend the
expiration date of the Offer (a) as required to comply with any rule, regulation
or interpretation of the Securities and Exchange Commission (the "SEC") or (b)
for one or more times each for an aggregate period of up to 15 days (and not to
exceed 60 days from the date of commencement) for any reason other than those
specified in the immediately preceding clause (a)) or which imposes conditions
to the Offer in addition to those set forth in Annex A hereto. The Per Share
Amount shall, subject to applicable withholding of taxes, be net to the seller
in cash, upon the terms and subject to the conditions of the Offer. Subject to
the terms and conditions of the Offer (including, without limitation, the
Minimum Condition), Purchaser agrees to, and Parent agrees to cause Purchaser
to, pay, as promptly as practicable after expiration of the Offer, for all
Shares validly tendered and not withdrawn.
(b) As soon as reasonably practicable on the date
of commencement of the Offer, Parent and Purchaser agree that Purchaser will
file with the SEC a Tender Offer Statement on Schedule 14D-1 (together with all
amendments and supplements thereto, the "Schedule 14D-1") with respect to the
Offer and the other Transactions (as hereinafter defined), which shall have
been provided to the Company and to which the Company shall not have reasonably
objected. Parent and Purchaser agree that the Schedule 14D-1 will contain or
will incorporate by reference an offer to purchase (the "Offer to Purchase")
and forms of the related letter of transmittal and any related summary
advertisement (the Schedule 14D-1, the Offer to Purchase
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and such other documents, together with all supplements and amendments thereto,
being referred to herein collectively as the "Offer Documents"). Parent,
Purchaser and the Company agree to correct promptly any information provided by
any of them for use in the Offer Documents which shall have become false or
misleading, and Parent and Purchaser further agree to take all steps necessary
to cause the Schedule 14D-1 as so corrected to be filed with the SEC and the
other Offer Documents as so corrected to be disseminated to holders of Shares,
in each case as and to the extent required by applicable federal securities
laws.
SECTION 1.02 Note Tender Offer. (a) Provided that
this Agreement shall not have been terminated in accordance with Section 8.01
and none of the events or circumstances set forth in Annex B hereto shall have
occurred or be existing, Parent agrees that it or its designee will commence
the Note Offer to Purchase as promptly as reasonably practicable after the date
hereof, but in no event later than five business days after the first public
announcement of the execution hereof. In connection with the Note Offer to
Purchase, Parent intends to solicit Consents to amend Sections 4.02 (other than
the first and last sentences thereof), 4.03(a) (in order to permit loans to be
made to the Company by its affiliates), 4.04 (in order to eliminate the
restrictions on indebtedness of the Company's foreign subsidiaries), 4.05,
4.06, 4.07, 4.08, 4.09, 4.11, 4.12, 4.16 and 5.01(a)(iii) of the Indenture and
any other sections thereof agreed to by the Company, so that such Sections are
not applicable to the Merger or following the consummation of the Note Tender
Offer or the Merger. Parent agrees that its obligation to accept for payment
and pay for the Notes and related Consents tendered pursuant to the Note Tender
Offer shall be subject to the condition that Parent receive Consents from a
majority of the outstanding principal amount of the Notes (the "Requisite
Consent Condition") and also shall be subject to the satisfaction of the other
conditions set forth in Annex B hereto. Parent expressly reserves the right to
waive any such condition, to increase the price payable for each Note and
related Consent tendered in the Note Tender Offer, and to make any other
changes in the terms and conditions of the Note Tender Offer; provided,
however, that Parent agrees that no change may be made without the consent of
the Company which decreases the price payable for each Note and related Consent
tendered in the Note Tender Offer, which changes the form of consideration to
be paid in the Note Tender Offer, which reduces the maximum number of Notes to
be purchased in the Note Tender Offer or which imposes conditions to the Note
Tender Offer in addition to those set forth in Annex B hereto. Subject to the
terms and conditions of the Note Tender Offer (including, without limitation,
the Requisite Consent Condition), Parent agrees to pay, as promptly as
practicable after expiration of the Note Tender Offer, for all Notes and
related Consents validly tendered and not withdrawn.
(b) Parent agrees to disseminate to the record
holders of the Notes, and to the extent disclosed to Parent by the Company, the
beneficial owners of the Notes (collectively, the "Noteholders"), the Note
Tender Offer pursuant to the terms of an offer to purchase and consent
solicitation statement, together with related letters of transmittal and
similar ancillary agreements (such documents, together with all supplements and
amendments thereto, being referred to herein collectively as the "Note Tender
Offer Documents"), which shall have been
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provided to the Company and to which the Company shall not have reasonably
objected. Parent, Purchaser and the Company agree to correct promptly any
information provided by any of them for use in the Note Tender Offer Documents
which shall have become false or misleading, and Parent further agrees to take
all steps necessary to cause the Note Tender Offer Documents as so corrected to
be disseminated to holders of Notes, in each case as and to the extent required
by applicable federal securities laws.
(c) Assuming the Requisite Consent Condition is
satisfied and all other conditions to the Note Tender Offer set forth on Annex
B have been satisfied or waived by Parent, the Company agrees to execute, and
will use all reasonable efforts to cause the trustee under the Indenture to
execute, a supplemental indenture (the "Supplemental Indenture") in order to
give effect to the amendments of the Indenture contemplated in the Note Tender
Offer Documents immediately following the expiration date of the Note Tender
Offer; provided, however, that the proposed amendments set forth in the
Supplemental Indenture (the "Proposed Amendments") will not become operative
until the date Parent accepts all Notes (and related Consents) validly tendered
for purchase and payment pursuant to the Note Tender Offer. In such event, the
parties hereto agree that the Proposed Amendments will be deemed effective as
of immediately prior to such acceptance for payment, and Parent will thereafter
be obligated to make all payments for the Notes (and related Consents) so
tendered.
(d) The Company agrees to promptly furnish Parent
with mailing labels containing the names and addresses of all record holders of
Notes and with security position listings of the Notes held in depositories,
each as of a recent date, together with all other available listings and
computer files containing names, addresses and security position listings of
Noteholders. The Company agrees to furnish Parent with such additional
information, including, without limitation, updated listings and computer files
of Noteholders, mailing labels and security position listings, and such other
assistance as Parent or its agents may reasonably request. Subject to the
requirements of applicable law, and except for such steps as are necessary to
disseminate the Note Tender Offer Documents and any other documents necessary
to consummate the transactions contemplated thereby, Parent shall hold in
confidence the information contained in such labels, listings and files, shall
use such information only in connection with the Note Tender Offer and, if this
Agreement shall be terminated in accordance with Section 8.01, shall deliver to
the Company all copies of such information then in its possession.
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SECTION 1.03 Company Action. (a) The Company hereby
approves of and consents to the Offer and the Note Tender Offer and represents
that (i) the Board, at a meeting duly called and held on June 25, 1997, has
unanimously (A) determined that this Agreement and the transactions
contemplated hereby, including each of the Offer and the Merger, are fair to
and in the best interests of the stockholders of the Company, (B) approved and
adopted this Agreement and the transactions contemplated hereby, including,
without limitation, the Merger, and such approval constitutes approval of the
foregoing for purposes of Section 203 of Delaware Law, (C) taken all action to
avoid the occurrence of a "Distribution Date" or a "Triggering Event" (each as
defined in the Rights Agreement referred to in Section 2.06) with respect to
the Rights and (D) recommended that the stockholders of the Company accept the
Offer and approve and adopt this Agreement and the transactions contemplated
hereby, including, without limitation, the Merger, and (ii) Credit Suisse First
Boston Corporation ("Credit Suisse First Boston") has delivered to the Board a
written opinion to the effect that, as of the date of such opinion, the
consideration to be received by the holders of Shares (other than Parent,
Purchaser and their affiliates) pursuant to each of the Offer and the Merger is
fair to such holders of Shares from a financial point of view. Subject only to
the fiduciary duties of the Board under applicable law as advised by the
Company's counsel, the Company hereby consents to the inclusion in the Offer
Documents of the recommendation of the Board described in the immediately
preceding sentence. The Company represents to Purchaser that the Company has
been advised by each of its directors and executive officers that they intend
either to tender or cause to be tendered all Shares beneficially owned by them
to Purchaser pursuant to the Offer or to vote such Shares in favor of the
approval and adoption by the stockholders of the Company of this Agreement and
the transactions contemplated hereby.
(b) As soon as reasonably practicable on the date
of commencement of the Offer, the Company agrees that it will file with the SEC
a Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing, subject
only to the fiduciary duties of the Board under applicable law as advised by
the Company's counsel, the recommendation of the Board described in Section
1.03(a) and shall disseminate the Schedule 14D-9 to the extent required by Rule
14d-9 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and any other applicable federal securities laws. The
Company, Parent and Purchaser agree to correct promptly any information
provided by any of them for use in the Schedule 14D-9 which shall have become
false or misleading, and the Company further agrees to take all steps necessary
to cause the Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to holders of Shares, in each case as and to the extent required
by applicable federal securities laws.
(c) The Company agrees to promptly furnish
Purchaser with mailing labels containing the names and addresses of all record
holders of Shares and with security position listings of Shares held in stock
depositories, each as of a recent date, together with all other available
listings and computer files containing names, addresses and security position
listings of record holders and beneficial owners of Shares. The Company agrees
to furnish Purchaser with such additional information, including, without
limitation, updated listings and computer
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files of stockholders, mailing labels and security position listings, and such
other assistance as Parent, Purchaser or their agents may reasonably request.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Offer or the Merger, Parent and Purchaser shall hold in
confidence the information contained in such labels, listings and files, shall
use such information only in connection with the Offer and the Merger and, if
this Agreement shall be terminated in accordance with Section 8.01, shall
deliver to the Company all copies of such information then in their possession.
SECTION 1.04 Parent Action. Parent agrees that (a)
Parent will cause the Company to be provided with sufficient funds immediately
prior to the Purchaser's Election Date, to refinance the Company's obligations
under the Credit Agreement, dated as of April 29, 1996 (the "Credit
Agreement"), among the Company, Varo Inc., Xxxxxx Pumps Inc., the lenders from
time to time party thereto, the issuing banks from time to time party thereto
and Citicorp USA, Inc., as Agent, as amended, (b) from and after the
Purchaser's Election Date, Parent will cause the Company to be provided with
sufficient funds, on terms that comply with the Indenture dated as of April 15,
1996 (the "Indenture"), between the Company and IBJ Xxxxxxxx Bank & Trust
Company, as Trustee, with respect to the Notes to satisfy the Company's
obligations under Section 4.10 of the Indenture and (c) that such funds will be
provided to the Company on terms no less favorable to the Company than those
contained in the Credit Agreement.
ARTICLE II.
THE MERGER
SECTION 2.01 The Merger. Upon the terms and subject to
the conditions set forth in Article VII, and in accordance with Delaware Law,
at the Effective Time (as hereinafter defined), Purchaser shall be merged with
and into the Company. As a result of the Merger, the separate corporate
existence of Purchaser shall cease and the Company shall continue as the
surviving corporation of the Merger (the "Surviving Corporation"), and shall
continue to be governed by the laws of the State of Delaware.
SECTION 2.02 Effective Time; Closing. As promptly as
practicable after the satisfaction or, if permissible, waiver of the conditions
set forth in Article VII, the parties hereto shall cause the Merger to be
consummated by filing a certificate of merger (the "Certificate of Merger")
with the Secretary of State of the State of Delaware, in such form as is
required by, and executed in accordance with the relevant provisions of,
Delaware Law. The Merger shall become effective upon such filing or at such
time thereafter as is provided in the Certificate of Merger as the Company and
Purchaser shall agree (the "Effective Time"). Prior to such filing, a closing
shall be held at the offices of Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A., 0000
Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, or such other place as
the
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parties shall agree, for the purpose of confirming the satisfaction or waiver,
as the case may be, of the conditions set forth in Article VII.
SECTION 2.03 Effect of the Merger. At the Effective
Time, the effect of the Merger shall be as provided in the applicable
provisions of Delaware Law. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, all the property, rights,
privileges, powers and franchises of the Company and Purchaser shall vest in
the Surviving Corporation, and all debts, liabilities, obligations,
restrictions, disabilities and duties of the Company and Purchaser shall become
the debts, liabilities, obligations, restrictions, disabilities and duties of
the Surviving Corporation.
SECTION 2.04 Certificate of Incorporation; Bylaws. (a)
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 until thereafter amended as provided by applicable law
and such Certificate of Incorporation.
(b) The Bylaws of the Company, as in effect
immediately prior to the Effective Time, shall be the Bylaws of the Surviving
Corporation until thereafter amended as provided by law, the Certificate of
Incorporation of the Surviving Corporation and such Bylaws.
SECTION 2.05 Directors and Officers. The directors of
Purchaser immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation, each to hold office in accordance with
the Certificate of Incorporation and Bylaws of the Surviving Corporation, and
the officers of the Company immediately prior to the Effective Time shall be
the initial officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified.
SECTION 2.06 Conversion of Securities. At the Effective
Time, by virtue of the Merger and without any action on the part of Purchaser,
the Company or the holders of any of the Shares:
(a) Each Share, together with the
associated right to purchase shares of Series B Junior
Participating Preferred Stock, par value $1.00
(individually, the "Right" and collectively, the
"Rights"), issued pursuant to the Rights Agreement dated
as of April 30, 1997, between the Company and First
Chicago Trust Company of New York, as Rights Agent (the
"Rights Agreement"), issued and outstanding immediately
prior to the Effective Time (other than any Shares to be
canceled pursuant to Section 2.06(b) and Dissenting
Shares (as defined in Section 2.09)) shall be canceled
and shall be converted automatically into the right to
receive an amount equal to the Per Share Amount in cash
(the "Merger Consideration"), payable, without interest,
to the holder of such Share, upon surrender, in the
manner provided in Section 2.08, of the certificate that
formerly evidenced such Share;
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(b) Each Share, together with the
associated Right, owned by Purchaser, Parent, the Company
or any direct or indirect wholly owned subsidiary of
Parent or of the Company immediately prior to the
Effective Time shall be canceled and retired without any
conversion thereof and no payment or distribution shall
be made with respect thereto; and
(c) Each share of common stock of
Purchaser issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for
one validly issued, fully paid and nonassessable share of
common stock, par value U.S. $1.00 per share, of the
Surviving Corporation.
SECTION 2.07 Employee and Director Stock Options;
Deferred Director Fees.
(a) In accordance with the terms of
the Company's Amended and Restated Equity Incentive Plan
for Key Employees, the Company's Amended and Restated
1988 Equity Incentive Plan for Outside Directors or the
Company's 1995 Equity Incentive Plan for Outside
Directors (collectively, the "Stock Option Plans"), each
outstanding option to purchase Shares granted under the
Stock Option Plans shall, immediately prior to the
Effective Time, become exercisable regardless of the
vesting schedule contained in any stock option agreement
or in any of the Stock Option Plans and shall be canceled
at the Effective Time. In the event that any unexercised
option is canceled by the Company, each holder of a
canceled option shall be entitled to receive, at the
Effective Time or as soon as practicable thereafter, from
the Company, in consideration for the cancellation of
such option, an amount (subject to any applicable
withholding tax) in cash equal to the product of (i) the
number of Shares previously subject to such option and
(ii) the excess, if any, of the Merger Consideration over
the exercise price per Share previously subject to such
option.
(b) At the Effective Time, the
Company shall pay to each individual who served as a
Director of the Company prior to the Effective Time any
and all deferred director fees owed to such individual.
SECTION 2.08 Surrender of Shares: Stock Transfer Books.
(a) Prior to the Effective Time, Purchaser shall designate a bank or trust
company to act as agent (the "Paying Agent") for the holders of Shares in
connection with the Merger to receive the funds to which holders of Shares
shall become entitled pursuant to Section 2.06(a), and Parent shall cause the
Purchaser to deposit with such Paying Agent an amount sufficient to pay the
aggregate Merger Consideration. Such funds shall be invested by the Paying
Agent as directed by the Surviving Corporation, provided that such investments
shall be in obligations of or guaranteed by the United States of America or of
any agency thereof and backed by the full faith and credit of the United States
of America or in commercial paper obligations rated A-1 or P-1 or better by
Xxxxx'x Investors Service, Inc. or Standard & Poor's Ratings Group,
respectively.
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(b) Promptly after the Effective Time, the
Surviving Corporation shall cause to be mailed to each person who was, at the
Effective Time, a holder of record of Shares entitled to receive the Merger
Consideration pursuant to Section 2.06(a) a form of letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the certificates evidencing such Shares (the "Certificates") shall
pass, only upon proper delivery of the Certificates to the Paying Agent) and
instructions for use in effecting the surrender of the Certificates pursuant to
such letter of transmittal (or, if such Shares are uncertificated, such other
form of evidence of record ownership as is required by the Paying Agent). Upon
surrender to the Paying Agent of a Certificate (or, with respect to
uncertificated Shares, such other evidence of record ownership as is required
by the Paying Agent), together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions thereto, and such
other documents as may be required pursuant to such instructions, the holder of
such Certificate (or uncertificated Share, as the case may be) shall be
entitled to receive in exchange therefor the Merger Consideration for each
Share formerly evidenced by such Certificate (or uncertificated Share, as the
case may be), and such Certificate (or uncertificated Share, as the case may
be) shall then be canceled. No interest shall accrue or be paid on the Merger
Consideration payable upon the surrender of any Certificate (or uncertificated
Share, as the case may be) for the benefit of the holder of such Certificate
(or uncertificated Share, as the case may be). If payment of the Merger
Consideration is to be made to a person other than the person in whose name the
surrendered Certificate (or uncertificated Share, as the case may be) is
registered on the stock transfer books of the Company, it shall be a condition
of payment to the holder of a Certificate that it be endorsed properly or, with
respect to Certificates and uncertificated Shares, otherwise be in proper form
for transfer and that, with respect to Certificates and uncertificated Shares,
the person requesting such payment shall have paid all transfer and other taxes
required by reason of the payment of the Merger Consideration to a person other
than the registered holder thereof or shall have established to the
satisfaction of the Surviving Corporation that such taxes either have been paid
or are not applicable.
(c) At any time following the sixth month after
the Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it any funds which had been made available to the
Paying Agent and not disbursed to holders of Shares (including, without
limitation, all interest and other income received by the Paying Agent in
respect of all funds made available to it) and, thereafter, such holders shall
be entitled to look to the Surviving Corporation (subject to abandoned
property, escheat and other similar laws) only as general creditors thereof
with respect to any Merger Consideration that may be payable upon due surrender
of the Certificates held by them (or, if such Shares are uncertificated, such
other form of evidence of record ownership as is required by the Paying Agent).
Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying
Agent shall be liable to any holder of a Share for any Merger Consideration
delivered in respect of such Share to a public official pursuant to any
abandoned property, escheat or other similar law.
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(d) At the close of business on the day of the
Effective Time, the stock transfer books of the Company shall be closed and,
thereafter, there shall be no further registration of transfers of Shares on
the records of the Company. From and after the Effective Time, the holders of
Shares outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such Shares except as otherwise provided herein or
by applicable law.
SECTION 2.09 Dissenting Shares.
Notwithstanding any other provision of this Agreement to the contrary, Shares
that are outstanding immediately prior to the Effective Time and which are held
by stockholders who shall have not voted in favor of the Merger or consented
thereto in writing and who properly shall have demanded appraisal for such
shares in accordance with Delaware Law (collectively, the "Dissenting Shares")
shall not be converted into or represent the right to receive the Merger
Consideration. Such stockholders instead shall be entitled to receive payment
of the appraised value of such Shares held by them in accordance with the
provisions of Delaware Law, except that all Dissenting Shares held by
stockholders who shall have failed to perfect or who effectively shall have
withdrawn or otherwise lost their rights to appraisal of such Shares under
Delaware Law shall thereupon be deemed to have been converted into and to have
become exchangeable, as of the Effective Time, for the right to receive,
without any interest thereon, the Merger Consideration upon surrender in the
manner provided in Section 2.08, of the Certificate or Certificates (or, if
such Shares are uncertificated, such other form of evidence of record ownership
as is required by the Paying Agent) that, immediately prior to the Effective
Time, evidenced such Shares.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and
Purchaser that:
SECTION 3.01 Organization and Qualification;
Subsidiaries. Each of the Company and each subsidiary of the Company (a
"Subsidiary") is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as it is now
being conducted, except where the failure to be so organized, existing or in
good standing or to have such power, authority and governmental approvals would
not, individually or in the aggregate, have a Material Adverse Effect (as
defined below). The Company and each Subsidiary is duly qualified or licensed
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in good
standing that would not, individually or in the aggregate, have a Material
Adverse Effect. When used in connection with the Company or any Subsidiary,
the term "Material Adverse Effect" means any effect that is or is reasonably
likely
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to be materially adverse to the business, operations, financial condition,
assets or liabilities (including, without limitation, contingent liabilities)
of the Company and the Subsidiaries taken as a whole. A true and complete list
of all the Subsidiaries, together with the jurisdiction of incorporation of
each Subsidiary and the percentage of the outstanding capital stock of each
Subsidiary owned by the Company and each other Subsidiary, is set forth in
Section 3.01 of the Disclosure Schedule, which has been delivered prior to the
date of this Agreement by the Company to Parent (the "Disclosure Schedule").
Except as disclosed in such Section 3.01, the Company does not directly or
indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, limited liability company, joint venture or other
business association or entity. The term "Material Subsidiaries" means the
Subsidiaries identified as Material Subsidiaries in Section 3.01 of the
Disclosure Schedule. The Subsidiaries that are not Material Subsidiaries are
not, individually and in the aggregate, material to the business, operations or
financial condition of the Company and all of the Subsidiaries taken as a whole
and do not, individually and in the aggregate, have any material assets or
liabilities (including contingent liabilities) when considered in relation to
the Company and all of the Subsidiaries taken as a whole.
SECTION 3.02 Certificate of Incorporation and Bylaws.
The Company has heretofore furnished or made available to Parent a complete and
correct copy of the Certificate of Incorporation and the Bylaws or equivalent
organizational documents, each as amended to date (the "Constituent
Documents"), of the Company and each Material Subsidiary. The Constituent
Documents of the Company and its Material Subsidiaries are in full force and
effect. Neither the Company nor any Material Subsidiary is in violation of any
provision of its Constituent Documents.
SECTION 3.03 Capitalization. The authorized capital
stock of the Company consists of 5,000,000 shares of preferred stock (none of
which is issued and outstanding) and 25,000,000 Shares. As of June 24, 1997,
(i) 17,126,609 Shares are issued and outstanding, all of which are validly
issued, fully paid and nonassessable, (ii) no Shares are held by the
Subsidiaries, and (iii) 2,882,657 Shares are reserved for issuance pursuant to
grants or awards under the Stock Option Plans. Except as set forth in this
Section 3.03 or Section 3.03 of the Disclosure Schedule, there are no options,
warrants or other rights, agreements, arrangements or commitments of any
character obligating the Company or any Material Subsidiary to issue or sell
any shares of capital stock of, or other equity interests in, the Company or
any Material Subsidiary. Section 3.03 of the Disclosure Schedule sets forth a
list, as of the date hereof, of the names of each person holding options under
the Stock Option Plans, and the number of shares purchasable under, the
exercise price of such options and date such options were granted. All Shares
subject to issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, will be duly
authorized, validly issued, fully paid and nonassessable. Except as set forth
in Section 3.03 of the Disclosure Schedule, there are no outstanding
contractual obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any Shares or any capital stock of
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any Subsidiary or to provide funds to, or make any investment (in the form of a
loan, capital contribution or otherwise) in, any Subsidiary or any other
person. Each outstanding share of capital stock of each Material Subsidiary is
duly authorized, validly issued, fully paid and nonassessable, and, except as
set forth in Section 3.03 of the Disclosure Schedule, each such share owned by
the Company or another Subsidiary is owned free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Company's or such other Subsidiary's voting
rights, charges and other encumbrances of any nature whatsoever.
SECTION 3.04 Authority Relative to this Agreement. The
Company has all necessary corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby, including, without limitation, the Merger,
the Offer and the Note Tender Offer (the "Transactions"). The execution and
delivery of this Agreement by the Company and the consummation by the Company
of the Transactions have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or to consummate the Transactions
(other than, with respect to the Merger, the approval and adoption of this
Agreement by the affirmative vote of the stockholders of the Company to the
extent required by Delaware Law, the filing of the Certificate of Merger and,
with respect to the execution of the Supplemental Indenture, the satisfaction
of the Requisite Consent Condition). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Parent and Purchaser, constitutes a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms.
SECTION 3.05 No Conflict; Required Filings and Consents.
(a) Except as set forth in Section 3.05(a) of the Disclosure Schedule, the
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Constituent Documents of the Company or any Material Subsidiary,
(ii) assuming that required filings under the HSR Act (as hereinafter defined)
are made by the appropriate parties, conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to the Company or any
Subsidiary or by which any property or asset of the Company or any Subsidiary
is bound or affected or (iii) result in any breach of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance of
any nature on any property or asset of the Company or any Material Subsidiary
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Company or any Material Subsidiary is a party or by which the Company or any
Material Subsidiary or any property or asset of the Company or any Material
Subsidiary is bound or affected, except, in cases of (ii) and (iii), for any
such conflicts, violations, breaches, defaults or other occurrences which would
not, individually or in the aggregate, have a Material Adverse Effect.
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(b) Except as set forth in Section 3.05(b) of the
Disclosure Schedule, the execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company will not,
require any consent, approval, authorization or permit of, or filing with, or
notification to, any governmental or regulatory authority, domestic or foreign,
except (i) for applicable requirements, if any, of the Exchange Act, state
securities or "blue sky" laws ("Blue Sky Laws") and state takeover laws, the
pre-merger notification requirements of the Xxxx-Xxxxx- Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder (the "HSR Act"), the Foreign Ownership, Control and Influence
regulations of the U.S. Department of Defense and filing of the Certificate of
Merger pursuant to Delaware Law, and (ii) where failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or delay consummation of the Offer or the
Merger, or otherwise prevent the Company from performing its obligations under
this Agreement, and would not, individually or in the aggregate, have a
Material Adverse Effect.
SECTION 3.06 Compliance. Except as set forth in Section
3.06 of the Disclosure Schedule, neither the Company nor any Subsidiary is in
default or violation of (i) any law, rule, regulation, order, judgment or
decree applicable to the Company or any Subsidiary or by which any property or
asset of the Company or any Subsidiary is bound or subject or (ii) any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary or any property
or asset of the Company or any Subsidiary is bound or affected, except for any
such defaults or violations that would not, individually or in the aggregate,
have a Material Adverse Effect.
SECTION 3.07 SEC Filings; Financial Statements. (a) The
Company has filed all forms, reports and documents required to be filed by it
with the SEC since December 31, 1994, and has heretofore delivered or made
available to Parent, in the form filed with the SEC, (i) its Annual Reports on
Form 10-K for the fiscal years ended December 31, 1994, 1995 and 1996,
respectively, (ii) its Quarterly Report on Form 10-Q for the period ended Xxxxx
00, 0000, (xxx) all proxy statements relating to the Company's meetings of
stockholders (whether annual or special) held since December 31, 1994 and (iv)
all other forms, reports and other registration statements (other than
Quarterly Reports on Form 10-Q not referred to in clause (ii) above) filed by
the Company with the SEC since December 31, 1994 (the forms, reports and other
documents referred to in clauses (i), (ii), (iii) and (iv) above being referred
to herein, collectively, as the "SEC Reports"). The SEC Reports (i) were
prepared in accordance with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and the Exchange Act, as the case may be, and
the rules and regulations promulgated thereunder and (ii) did not, at the time
they were filed (or at the effective date thereof with respect to registration
statements under the Securities Act), contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not
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misleading. No Subsidiary is required to file any form, report or other
document with the SEC.
(b) Each of the consolidated financial statements
(including, in each case, any notes thereto) contained in the SEC Reports was
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis ("GAAP") throughout the periods
indicated (except as may be indicated in the notes thereto) and each fairly
presents the consolidated financial position, results of operations and changes
in stockholders equity and cash flows of the Company and the consolidated
Subsidiaries as at the respective dates thereof and for the respective periods
indicated therein (subject, in the case of unaudited statements, to normal and
recurring year-end adjustments which were not and are not expected,
individually or in the aggregate, to have a Material Adverse Effect).
(c) Except as and to the extent set forth on the
consolidated balance sheet of the Company and the consolidated Subsidiaries as
at December 31, 1996 including the notes thereto (the "1996 Balance Sheet"), in
Section 3.07 of the Disclosure Schedule or in any SEC Report filed by the
Company after December 31, 1996, neither the Company nor any Subsidiary has any
liability or obligation of any nature (whether accrued, absolute, contingent or
otherwise) that would be required to be reflected on a balance sheet, or in the
notes thereto, prepared in accordance with GAAP, except for liabilities and
obligations incurred in the ordinary course of business consistent with past
practice since December 31, 1996.
(d) The Company has heretofore furnished or made
available to Parent complete and correct copies of all amendments and
modifications (if any) that have not been filed by the Company with the SEC to
all agreements, documents and other instruments that previously had been filed
by the Company with the SEC and are currently in effect.
SECTION 3.08 Absence of Certain Changes or Events.
Since December 31, 1996, except as set forth in Section 3.08 of the Disclosure
Schedule or as contemplated by this Agreement or disclosed in any SEC Report
filed since December 31, 1996 and prior to the date of this Agreement, the
Company and the Subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice and, since
December 31, 1996, there has not been (i) any change in the business,
operations, properties, financial condition, assets or liabilities (including,
without limitation, contingent liabilities) of the Company or any Subsidiary
having, individually or in the aggregate, a Material Adverse Effect, (ii) any
damage, destruction or loss (whether or not covered by insurance) with respect
to any property or asset of the Company or any Subsidiary having, individually
or in the aggregate, a Material Adverse Effect, (iii) any material change by
the Company in its accounting methods, principles or practices, (iv) any
material revaluation by the Company of any asset (including, without
limitation, any writing down of the value of inventory or writing off of notes
or accounts receivable), (v) any failure by the Company to revalue any asset in
accordance with GAAP, (vi) any entry by the Company or any Subsidiary into any
commitment or transaction material to the Company and the Subsidiaries taken as
a whole,
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(vii) any declaration, setting aside or payment of any dividend or distribution
in respect of any capital stock of the Company or any redemption, purchase or
other acquisition of any of its securities, (viii) any increase in or
establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other
employee benefit plan, or any other increase in the compensation payable or to
become payable to any officers or key employees of the Company or any
Subsidiary, except in the ordinary course of business consistent with past
practice, or (ix) any entering into, renewal, modification or extension of, any
contract, arrangement or agreement with any other party having, individually or
in the aggregate, a Material Adverse Effect.
SECTION 3.09 Absence of Litigation. Except as set forth
in Section 3.09 of the Disclosure Schedule or as disclosed in the SEC Reports
filed prior to the date of this Agreement, (a) there is no claim, action,
proceeding or investigation pending or, to the knowledge of the Company,
threatened against the Company or any Subsidiary, or any property or asset of
the Company or any Subsidiary, before any court, arbitrator or administrative,
governmental or regulatory authority or body, domestic or foreign, which (i)
individually or in the aggregate, would have a Material Adverse Effect or (ii)
seeks to, or is reasonably likely to, delay or prevent the consummation of any
Transaction and (b) as of the date hereof, neither the Company nor any
Subsidiary nor any property or asset of the Company or any Subsidiary is
subject to any order, writ, judgment, injunction, decree, determination or
award having, individually or in the aggregate, a Material Adverse Effect.
SECTION 3.10 Employee Benefit Plans. (a) Section
3.10(a) of the Disclosure Schedule contains a true and complete list of (i) all
employee benefit plans (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus,
stock option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental retirement or
severance plans, programs or policies, and all employment, termination or
severance contracts to which the Company or any Subsidiary is a party, with
respect to which the Company or any Subsidiary has any obligation or which are
maintained, contributed to or sponsored by the Company or any Subsidiary for
the benefit of any current or former employee, officer or director of the
Company or any Subsidiary (collectively, the "Plans") and (ii) each employee
benefit plan for which the Company or any Subsidiary could incur liability
under Section 4069 of ERISA in the event such plan were terminated, or under
Section 4212(c) of ERISA, or in respect of which the Company or any Subsidiary
remains secondarily liable under Section 4204 of ERISA. Except as set forth in
Section 3.10(a) of the Disclosure Schedule, no Plan is a "defined benefit plan"
within the meaning of Section 3(35) of ERISA and no Plan is subject to Part IV
of ERISA. The Company has previously furnished or made available to Parent a
true and complete copy of each Plan and a true and complete copy of each
material document prepared in connection with each Plan, including, without
limitation, to the extent applicable (i) a copy of each trust or other funding
arrangement, (ii) each summary plan description and summary
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of material modifications, (iii) the most recently filed Internal Revenue
Service ("IRS") Form 5500, (iv) the most recently received IRS determination
letter for each such Plan, and (v) the most recently prepared financial
statement in connection with each such Plan. Except as set forth in Section
3.10(a) of the Disclosure Schedule, neither the Company nor any Subsidiary has
made a general written announcement or entered into an agreement (i) to create
or adopt a new benefit plan or (ii) except in the ordinary course of business
consistent with past practice or as required by applicable law, to amend any
Plan.
(b) All Plans subject to Parts 2, 3 and 4 of
Subtitle A, Title I of ERISA, other than "multiemployer plans" ("Multiemployer
Plans"), within the meaning of Section 3(37) of ERISA (the "ERISA Plans"), are
in compliance with ERISA, except for such non-compliance which would not have,
individually or in the aggregate, a Material Adverse Effect. Except as set
forth in Section 3.10 of the Disclosure Schedule, each ERISA Plan which is an
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA
("Pension Plan") and which is intended to be qualified under Section 401(a) of
the Internal Revenue Code of 1986, as amended (the "Code") has received a
favorable determination letter from the IRS, and there are no circumstances
likely to result in revocation of any such favorable determination letter which
would have, individually or in the aggregate, a Material Adverse Effect. There
is no litigation pending or, to the knowledge of the Company, threatened
relating to the ERISA Plans which would have, individually or in the aggregate,
a Material Adverse Effect. Neither the Company nor any of the Subsidiaries has
engaged in a transaction with respect to any ERISA Plan that, assuming the
taxable period of such transaction expired as of the date thereof, insofar as
may be reasonably foreseen, is likely to subject the Company or any of the
Subsidiaries to a tax or penalty imposed by either Section 4975 of the Code or
Section 502(i) of ERISA in an amount which would have, individually or in the
aggregate, a Material Adverse Effect.
(c) Neither the Company nor any of the
Subsidiaries has any outstanding liability under Subtitle C or D of Title IV of
ERISA with respect to any ongoing, frozen or terminated "single-employer plan",
within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or the single-employer plan of any entity which is
considered one employer with the Company under Section 4001 of ERISA or Section
414 of the Code (an "ERISA Affiliate"). Neither the Company nor any of the
Subsidiaries presently contributes to a Multiemployer Plan, nor has it
contributed to a Multiemployer Plan within the past five calendar years. No
notice of a "reportable event", within the meaning of Section 4043 of ERISA for
which the 30 day reporting requirement has not been waived, has been required
to be filed for any Pension Plan within the 12-month period ending on the date
hereof.
(d) All contributions required to be made under
the terms of any ERISA Plan have been timely made, except for such failures
which, individually or in the aggregate, would not have a Material Adverse
Effect. No Pension Plan has an "accumulated funding deficiency" (whether or
not waived) within the meaning of Section 412 of the Code or Section 302 of
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ERISA. Neither the Company nor any of the Subsidiaries has provided, or is
required to provide, security to any Pension Plan or to any single-employer
plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the Code.
(e) Under each Pension Plan which is a
single-employer plan, as of the last day of the most recent plan year ended
prior to the date hereof, the present value of all accrued "benefit
liabilities", within the meaning of Section 4001(a)(16) of ERISA (as determined
on the basis of the actuarial assumptions and methods contained in the Plan's
most recent actuarial valuation), did not exceed the then current value of the
assets of such Plan.
(f) Except as set forth in Section 3.10(f) of the
Disclosure Schedule, neither the Company nor any of the Subsidiaries has any
obligation for retiree health and life benefits under any ERISA Plan.
(g) Except as set forth in Section 3.10(g) of the
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
payment of severance or unemployment compensation becoming due to any director
or any employee of the Company or any of the Subsidiaries under any Plan or
otherwise from the Company or any of the Subsidiaries, (ii) increase any
benefits otherwise payable under any Plan, or (iii) result in any acceleration
of the time of payment or vesting of any such benefit.
(h) Except as disclosed in Section 3.10(h) of the
Disclosure Schedule, the Company and the Material Subsidiaries do not have any
unfunded liabilities under pension, retirement or other employee benefit plans,
programs or arrangements maintained outside the United States by the Company or
any of the Material Subsidiaries for the employees thereof, the payment of
which by the Company or such Material Subsidiary, individually or in the
aggregate, would have a Material Adverse Effect.
SECTION 3.11 Labor Matters. Except as set forth in
Section 3.11(a) of the Disclosure Schedule and except for those matters that,
individually or in the aggregate, would not have a Material Adverse Effect, (i)
there are no controversies pending or, to the knowledge of the Company,
threatened between the Company or any Subsidiary and any of their respective
employees; (ii) neither the Company nor any Subsidiary has breached or
otherwise failed to comply with any provision of any collective bargaining
agreement or other labor union contract applicable to persons employed by the
Company or any Subsidiary and there are no grievances outstanding against the
Company or any Subsidiary under any such agreement or contract; (iii) there are
no unfair labor practice complaints pending against the Company or any
Subsidiary before the National Labor Relations Board or any current union
representation questions involving employees of the Company or any Subsidiary;
and (iv) there is no strike, slowdown, work stoppage or lockout, or, to the
knowledge of the Company, threat thereof, by or with respect to any employees
of the Company or any Subsidiary. Section 3.11(b) of the Disclosure Schedule
sets forth each collective bargaining agreement or other labor union
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contract applicable to persons employed by the Company or any domestic
Subsidiary and any other material collective bargaining agreement or labor
contract applicable to persons employed by any foreign Subsidiary. To the
knowledge of the Company, there are no activities or proceedings of any labor
union to organize any employees of the Company or any Subsidiary.
SECTION 3.12 Offer Documents; Schedule 14D-9; Proxy
Statement. None of the Schedule 14D-9, the information supplied by the Company
for inclusion in the Offer Documents or the Note Tender Offer Documents or the
information to be filed by the Company in connection with the Offer pursuant to
Rule 14f-1 promulgated under the Exchange Act (the "Information Statement")
shall, at the respective times the Schedule 14D-9, the Offer Documents, the
Note Tender Offer Documents, the Information Statement or any amendments or
supplements thereto are filed with the SEC or are first published, sent or
given to stockholders of the Company, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they are made, not misleading. The
proxy statement to be sent to the stockholders of the Company in connection
with the Special Stockholders' Meeting (as defined in Section 6.01 hereof)
(such proxy statement, as amended or supplemented, being referred to herein as
the "Proxy Statement") shall not, at the date the Proxy Statement is first
mailed to stockholders of the Company or at the time of the Special
Stockholders' Meeting and the Effective Time, and, with respect to the
Information Statement at the time Shares are accepted for payment in the Offer
and with respect to the Note Tender Offer at the time the Notes (and related
Consents) are accepted for payment in the Note Tender Offer, be false or
misleading with respect to any material fact, or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they are made, not
misleading or, with respect to the Proxy Statement, necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Special Stockholders' Meeting which shall have become false or
misleading. Notwithstanding the foregoing, the Company makes no representation
or warranty with respect to any information supplied by Parent, Purchaser or
any of their representatives which is contained in any of the foregoing
documents or the Offer Documents or the Note Tender Offer Documents. The
Schedule 14D-9, the Information Statement and the Proxy Statement shall comply
in all material respects as to form with the requirements of the Exchange Act
and the rules and regulations thereunder.
SECTION 3.13 Tangible Property; Real Property and
Leases. (a) The Company and the Subsidiaries have sufficient title to all
their tangible properties and assets to conduct their respective businesses as
currently conducted or as contemplated to be conducted, with only such
exceptions as, individually or in the aggregate, would not have a Material
Adverse Effect.
(b) No parcel of real property owned or leased by
the Company is subject to any governmental decree or order to be sold nor is
being condemned, expropriated or otherwise taken by any public authority with
or without payment of compensation therefor, nor, to the
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knowledge of the Company, has any such condemnation, expropriation or taking
been proposed.
(c) All leases of real property leased for the
use or benefit of the Company or any Subsidiary to which the Company or any
Subsidiary is a party requiring rental payments in excess of U.S. $100,000
during the period of the lease and all amendments and modifications thereto are
in full force and effect and have not been modified or amended, and there
exists no default under any such lease by the Company or any Subsidiary, nor
any event which with notice or lapse of time or both would constitute a default
thereunder by the Company or any Subsidiary, except as, individually or in the
aggregate, would not have a Material Adverse Effect or as set forth in Section
3.13 of the Disclosure Schedule.
SECTION 3.14 Trademarks, Patents and Copyrights. Except
as set forth in Section 3.14(a) of the Disclosure Schedule, the Company and the
Subsidiaries own or possess adequate licenses or other valid rights to use all
patents, patent rights, trademarks, trademark rights, trade names, trade dress,
trade name rights, copyrights, servicemarks, trade secrets, applications for
trademarks and for servicemarks, mask works, know-how and other proprietary
rights and information used or held for use in connection with the business of
the Company and the Subsidiaries as conducted since December 31, 1996, as
currently conducted or as contemplated to be conducted, and the Company is
unaware of any assertion or claim challenging the validity of any of the
foregoing which, individually or in the aggregate, would have a Material
Adverse Effect. Section 3.14(b) of the Disclosure Schedule lists each material
patent owned by the Company or any Subsidiary and specifies the number and date
of each such patent. Section 3.14(c) of the Disclosure Schedule lists each
agreement pursuant to which a material patent is licensed to the Company or any
Material Subsidiary as licensee for use in the business of the Company and the
Subsidiaries as currently conducted. The conduct of the business of the
Company and the Subsidiaries as conducted since December 31, 1996, as currently
conducted and as contemplated to be conducted did not, does not and will not
conflict in any way with any patent, patent right, license, trademark,
trademark right, trade dress, trade name, trade name right, service xxxx, mask
work or copyright of any third party except for conflicts that, individually or
in the aggregate, would not have a Material Adverse Effect.
SECTION 3.15 Taxes. Except as set forth in Section 3.15
of the Disclosure Schedule or as otherwise previously disclosed to Parent:
(a) The Company and the Subsidiaries, and each
affiliated group (within the meaning of Section 1504 of the Internal Revenue
Code of 1986, as amended (the "Code")) or combined or unitary group of which
the Company or any Subsidiary is or has been a member, has timely filed all
federal income Tax Returns (as defined below), and all other material Tax
Returns required to be filed by them. All such Tax Returns are true and
correct in all material respects. Except to the extent adequately reserved for
in accordance with GAAP, all material Taxes (as defined below) due and payable
by the Company and the Subsidiaries have been timely paid. The most recent
consolidated financial statements contained in the SEC Reports
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reflect an adequate reserve in accordance with GAAP for all Taxes payable by
the Company and its Subsidiaries for all taxable periods and portions thereof
through the date of such financial statements.
(b) No material deficiencies for any Taxes have
been proposed, asserted or assessed against the Company or any of the
Subsidiaries that have not been fully paid or adequately provided for in the
appropriate financial statements of the Company and its Subsidiaries, no
waivers of the time to assess any Taxes are outstanding, and no power of
attorney granted by the Company or any Subsidiary with respect to any Taxes is
currently in force. No material issues relating to Taxes have been raised in
writing (or, in the case of the presently pending Federal income tax audit of
the Company and the Subsidiaries, verbally to the knowledge of the Company's
Vice President of Taxes) by any governmental authority during any presently
pending audit or examination.
(c) There are no material liens or encumbrances
for Taxes on any of the assets of the Company or the Subsidiaries (other than
for current taxes not yet due and payable).
(d) The Company and the Subsidiaries have
complied in all material respects with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes.
(e) None of the Company or the Subsidiaries has
filed a consent under Section 341(f) of the Code.
(f) None of the Company or the Subsidiaries is a
party to any agreement that could obligate it to make any payments that would
not be deductible by reason of Section 280G of the Code.
(g) Neither the Company nor, since the date of
its acquisition by the Company, any Material Subsidiary is a party to any tax
allocation, tax sharing agreement, any closing agreement or similar agreement
relating to Taxes with any taxing authority of the Company.
(h) No federal, state, local or foreign audits or
other administrative proceedings or court proceedings are presently pending
with regard to any federal income or material state, local or foreign Taxes or
Tax Returns of the Company or any of the Subsidiaries and neither the Company
nor any of the Subsidiaries has received a written notice of any pending audit
or proceeding.
(i) Neither the Company nor, since the date of
its acquisition by the Company, any Material Subsidiary has agreed to or is
required to make any material adjustment under Section 481(a) of the Code.
(j) To the knowledge of the Company, no property
owned by the Company or any Subsidiary (i) is property required to be treated
as being owned by another person pursuant to
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the provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended and in effect immediately prior to the enactment of the Tax Reform Act
of 1986; or (ii) constitutes "tax exempt use property" within the meaning of
Section 168(h)(1) of the Code.
(k) The Company has not been (and will not be) a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code during the 5-year period ending on the consummation of
the Offer.
(l) To the knowledge of the Company, neither the
Company nor any Subsidiary has participated in or cooperated with an
international boycott within the meaning of Section 999 of the Code.
(m) The Company estimates that, to its knowledge,
the fair market value of the assets of the Company and the Subsidiaries, in the
aggregate, is more than the aggregate adjusted basis of such assets, determined
as of the date of this Agreement.
(n) For purpose of this Agreement, (A) the terms
"Tax" or "Taxes" shall mean all taxes, fees, duties, tariffs, levies, imposts,
or other charges of any kind (together with any interest, penalties, additions
to tax or additional amounts imposed by any taxing authority with respect
thereto), including, without limitation, taxes or other charges on or with
respect to income, franchise, gross receipts, property, sales, use, profits,
capital stock, payroll, employment, social security, workers compensation,
unemployment compensation or net worth, taxes or charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added or gains taxes;
license registration and documentation fees; and customs duties, tariffs and
similar charges of any kind whatsoever, and (B) the term "Tax Return" shall
mean any report, return, document, declaration or any other information or
filing required to be supplied to any taxing authority with respect to Taxes.
SECTION 3.16 Environmental Matters. (a) For purposes of
this Agreement, the following terms shall have the following meanings: (i)
"Hazardous Substances" means (A) those substances defined as hazardous in or
regulated as hazardous under the following federal statutes and their state
counterparts, as each may be amended from time to time, and all regulations
thereunder: the Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation, and Liability Act, the Clean Water Act, the Safe Drinking Water
Act, the Federal Insecticide, Fungicide, and Rodenticide Act and the Clean Air
Act; (B) any asbestos or asbestos- containing material, petroleum and petroleum
products, including crude oil and any fractions thereof, natural gas, natural
gas liquids, synthetic gas, polychlorinated biphenyls or radon; or (C) any
substance with respect to which a federal, state or local environmental agency
requires environmental investigation, monitoring, reporting or remediation; and
(ii) "Environmental Law" means any applicable federal, state or local law
relating to (A) releases or threatened releases of Hazardous Substances or
materials containing Hazardous Substances; (B) the manufacture,
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handling, transport, use, treatment, storage or disposal of Hazardous
Substances or materials containing Hazardous Substances; or (C) otherwise
relating to pollution of the environment.
(b) Except as described in Section 3.16 of the
Disclosure Schedule: (i) the Company and each Subsidiary is in compliance with
all applicable Environmental Laws, except for noncompliances that individually
or in the aggregate would not have a Material Adverse Effect; (ii) the Company
and each Subsidiary have obtained all permits, licenses and other material
governmental authorizations required under applicable Environmental Laws, and
are in compliance with the terms and conditions thereof, except for failures to
obtain or noncompliance that individually or in the aggregate would not have a
Material Adverse Effect; (iii) neither the Company nor any of its Subsidiaries
has received written notice of, or, to the knowledge of the Company, is the
subject of, any action, cause of action, claim, investigation, demand or notice
by any person or entity alleging liability under or noncompliance with any
Environmental Law that individually or in the aggregate would have a Material
Adverse Effect; and (iv) there is no environmental condition on any of the
properties currently or, to the knowledge of the Company, formerly owned or
leased by the Company or any Subsidiary that individually or in the aggregate
would have a Material Adverse Effect.
SECTION 3.17 Material Contracts. The SEC Reports
reflect each contract or agreement to which the Company or any of the Material
Subsidiaries is a party not made in the ordinary course of business which is
material to the Company and its Subsidiaries, taken as a whole, and that is to
be performed in whole or part after the date hereof (a "Material Contract").
No condition or state of facts exists that, with notice or the passage of time,
or both, would constitute a material default by the Company or any Material
Subsidiary or to the knowledge of the Company, any third party under such
Material Contracts. The Company or the applicable Material Subsidiary has duly
complied in all material respects with the provision of each Material Contract
to which it is a party.
SECTION 3.18 Insurance; Workers' Compensation.
(a) Section 3.18 of the Disclosure Schedule sets
forth a true, complete and accurate list of each currently effective material
insurance policy issued in favor of the Company and each Material Subsidiary,
setting forth the identity of the respective insurance carriers and a
description of the policy. All premiums due and payable in respect of such
policies have been paid, such policies are in full force and effect and free
from any right granted by Company of termination on the part of the insurance
carriers, except as provided in the respective policies. Schedule 3.18 of the
Disclosure Schedule sets forth a description, indicating dates and nature of
claims, of the workers' compensation experience as of March 31, 1997 of the
Company and each domestic Material Subsidiary since December 31, 1994, or since
the dates of their respective acquisition if later than December 31, 1994 in
the case of the Material Subsidiaries.
(b) Neither the Company nor any Material
Subsidiary has received any notice of cancellation with respect to any of its
insurance policies, and, within the three years preceding
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the date hereof, neither the Company nor any Material Subsidiary has been
refused any insurance coverage sought or applied for, in each case where such
cancellation or refusal, individually or in the aggregate, would have a
Material Adverse Effect.
SECTION 3.19 Certain Payments; Absence of Certain
Business Practices. To the knowledge of the Company, except as set forth in
Section 3.19 of the Disclosure Schedule, no employee or agent of the Company or
any Subsidiary, nor any other person acting on behalf of Company or any
Subsidiary, has within the past five years violated the Foreign Corrupt
Practices Act or made or caused to be made any payments to government officials
in violation of the laws of the United States or any other jurisdiction and, as
of the date hereof, neither the IRS nor any other federal, state, local or
foreign government agency or entity has notified the Company or any Subsidiary
of any pending or threatened investigation of any payment made by or on behalf
of the Company or any Subsidiary of, or alleged to be of, the type described in
the immediately preceding sentence.
SECTION 3.20 Licenses and Permits. The Company and each
Material Subsidiary have obtained all governmental licenses and permits
necessary to conduct their respective businesses in accordance with past
practice, except for failures that, individually or in the aggregate, would not
have a Material Adverse Effect. Such licenses and permits are valid and in
full force and effect, and no such licenses or permits will be terminated or
materially impaired or become terminable as a result of the Transactions,
except for those that, individually or in the aggregate, would not have a
Material Adverse Effect.
SECTION 3.21 Letters of Credit, Surety Bonds,
Guarantees. Section 3.21 of the Disclosure Schedule lists, as of the date
hereof, all letters of credit, performance or payment bonds, guaranty
arrangements and surety bonds of any nature involving amounts in excess of
$100,000 relating to the Company or any Subsidiary.
SECTION 3.22 Brokers. No broker, finder or investment
banker (other than Credit Suisse First Boston) is entitled to any brokerage,
finder's or other fee or commission in connection with the Transactions based
upon arrangements made by or on behalf of the Company. The Company has
heretofore furnished to Parent a complete and correct copy of all agreements
between the Company and Credit Suisse First Boston pursuant to which such firm
would be entitled to any payment relating to the Transactions.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby, jointly and severally,
represent and warrant to the Company that:
SECTION 4.01 Corporate Organization. Each of Parent and
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as it is now
being conducted, except where the failure to be so organized, existing or in
good standing or to have such power, authority and governmental approvals would
not, individually or in the aggregate, have a material adverse effect on the
business, operations, financial condition, assets or liabilities (including,
without limitation, contingent liabilities) of Parent and Purchaser and their
respective subsidiaries, taken as a whole.
SECTION 4.02 Authority Relative to This Agreement. Each
of Parent and Purchaser has all necessary corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the Transactions. The execution and delivery of this Agreement by
Parent and Purchaser and the consummation by Parent and Purchaser of the
Transactions have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of Parent or Purchaser
are necessary to authorize this Agreement or to consummate the Transactions
(other than with respect to the Merger, the filing of the Certificate of
Merger). This Agreement has been duly and validly executed and delivered by
Parent and Purchaser and, assuming the due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation of
each of Parent and Purchaser enforceable against each of Parent and Purchaser
in accordance with its terms.
SECTION 4.03 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent and Purchaser do
not, and the performance of this Agreement by Parent and Purchaser will not,
(i) conflict with or violate the Articles of Incorporation or Bylaws (or
equivalent documents) of either Parent or Purchaser, (ii) assuming that
required filings under the HSR Act are made by the appropriate parties,
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Parent or Purchaser or by which any property or asset of either
of them is bound or affected, or (iii) result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of Parent or Purchaser pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or Purchaser is a
party or by which Parent or Purchaser or any property or asset of either of
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them is bound or affected, except, in cases of (ii) and (iii), for any such
conflicts, violations, breaches, defaults or other occurrences which would not,
individually or in the aggregate, have a material adverse effect on the
business, operations, financial condition, assets or liabilities (including,
without limitation, contingent liabilities) of Parent or Purchaser and their
respective subsidiaries, taken as a whole.
(b) The execution and delivery of this Agreement
by Parent and Purchaser do not, and the performance of this Agreement by Parent
and Purchaser will not, require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory
authority, domestic or foreign, except (i) for applicable requirements, if any,
of the Exchange Act, Blue Sky Laws and state takeover laws, the HSR Act, and
the filing of the Certificate of Merger as required by Delaware Law and (ii)
where failure to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not prevent or delay consummation
of the Offer or the Merger, or otherwise prevent Parent or Purchaser from
performing their respective obligations under this Agreement.
SECTION 4.04 Financing. Parent has, or has commitments
to obtain, sufficient funds to permit Purchaser (i) to acquire all the
outstanding Shares in the Offer and the Merger and (ii) to acquire all of the
Notes (and obtain all of the related Consents) in the Note Tender Offer,
written evidence of which has been provided to the Company.
SECTION 4.05 Offer Documents; Proxy Statement. Neither
the Offer Documents nor the Note Tender Offer Documents will, at the time such
documents are filed with the SEC or are first published, sent or given to
stockholders of the Company, as the case may be, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the light
of the circumstances under which they are made, not misleading. The
information supplied by Parent for inclusion in the Schedule 14D-9, the
Information Statement or the Proxy Statement will not, on the date such
document (or any amendment or supplement thereto) is first mailed to
stockholders of the Company, with respect to the Information Statement, at the
time Shares are accepted for payment in the Offer and with respect to the Note
Tender Offer Documents, at the time the Notes (and related Consents) are
accepted for payment in the Note Tender Offer, and with respect to the Proxy
Statement at the time of the Special Stockholders' Meeting and at the Effective
Time, contain any statement which, at such time and in light of the
circumstances under which it is made, is false or misleading with respect to
any material fact, or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein not false or
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Special Stockholders'
Meeting which shall have become false or misleading. Notwithstanding the
foregoing, Parent and Purchaser make no representation or warranty with respect
to any information supplied by the Company or any of its representatives which
is contained in any of the foregoing documents or the Offer Documents or the
Note Tender Offer Documents. The Offer Documents and the Note Tender Offer
Documents shall comply in all material respects as to form with the
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requirements of the Exchange Act, the Trust Indenture Act of 1939, as amended,
and the rules and regulations thereunder.
ARTICLE V.
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01 Conduct of Business by the Company Pending
the Merger. The Company covenants and agrees that, between the date of this
Agreement and the election or appointment of Purchaser's designees to the Board
pursuant to Section 6.03 upon the purchase by Purchaser of any Shares pursuant
to the Offer (the "Purchaser's Election Date"), unless Parent shall otherwise
agree in writing, the businesses of the Company and the Subsidiaries shall be
conducted only in, and the Company and the Subsidiaries shall not take any
action except in, the ordinary course of business consistent with past practice
and the Company shall use all reasonable efforts to preserve substantially
intact the business organization of the Company and the Subsidiaries, to keep
available the services of the current officers, employees and consultants of
the Company and the Subsidiaries and to preserve the current relationships of
the Company and the Subsidiaries with customers, suppliers and other persons
with which the Company or any Subsidiary has significant business relations.
By way of amplification and not limitation, except as contemplated by this
Agreement or by Section 5.01 of the Disclosure Schedule, the Company agrees
that neither the Company nor any Subsidiary shall, between the date of this
Agreement and the Purchaser's Election Date, directly or indirectly do, or
propose to do, any of the following without the prior written consent of
Parent:
(a) amend or otherwise change its
Constituent Documents;
(b) issue, sell, pledge, dispose of,
grant, encumber, or authorize the issuance, sale, pledge,
disposition, grant or encumbrance of (i) any shares of
capital stock of any class of the Company or any
Subsidiary, or any options, warrants, convertible
securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership
interest (including, without limitation, any phantom
interest), of the Company or any Subsidiary (except for
the issuance of a maximum of 2,000,000 Shares issuable
pursuant to employee stock options outstanding on the date
hereof and including up to 1,250 restricted Shares per
quarter issuable to outside directors in accordance with
past practice pursuant to the Stock Option Plans) or (ii)
any assets of the Company or any Subsidiary, except for
sales in the ordinary course of business and in a manner
consistent with past practice;
(c) declare, set aside, make or pay
any dividend or other distribution, payable in cash,
stock, property or otherwise, with respect to any of its
capital stock, except for such declarations, set asides
dividends and other distributions made by any Subsidiary
to the Company;
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(d) reclassify, combine, split,
subdivide or redeem, purchase or otherwise acquire,
directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without
limitation, by merger, consolidation, or acquisition of
stock or assets or any other business combination) any
corporation, partnership, other business organization or
any division thereof or any material amount of assets
other than in the ordinary course of business consistent
with past practice; (ii) incur any indebtedness for
borrowed money or issue any debt securities or assume,
guarantee or endorse, pledge in respect of or otherwise
as an accommodation become responsible for the
obligations of any person, or make any loans or advances,
except in the ordinary course of business consistent with
past practice; (iii) enter into any contract or
agreement, other than any contract or agreement entered
into in the ordinary course of business consistent with
past practice and which requires payments by the Company
or the Subsidiaries in an aggregate amount of less than
U.S. $250,000; (iv) terminate, cancel or request any
material change in, or agree to any material change in,
any Material Contract, except in the ordinary course of
business consistent with past practice; or (v) authorize
any single capital expenditure (excluding software
development activity) which is in excess of U.S. $500,000
or capital expenditures which are, in the aggregate, in
excess of U.S. $2,500,000 for the Company and the
Subsidiaries taken as a whole;
(f) increase the compensation payable
or to become payable to its officers or employees, except
for increases in accordance with past practices in
salaries or wages of employees of the Company or any
Subsidiary who are not officers of the Company, or grant
any severance or termination pay to, or enter into any
employment or severance agreement with, any director,
officer or other employee of the Company or any
Subsidiary (other than in connection with hiring and
terminating employees in the ordinary course of the
Company's business), or establish, adopt, enter into or
amend any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment,
termination or severance plan, agreement, trust, fund,
policy or arrangement for the benefit of any director,
officer or employee or circulate to any employee any
details of any proposal to adopt or amend any such plan;
(g) take any action, other than
reasonable and usual actions in the ordinary course of
business consistent with past practice, with respect to
accounting policies or procedures (including, without
limitation, procedures with respect to the payment of
accounts payable and collection of accounts receivable);
(h) make any material tax election or
settle or compromise any material federal, state, local
or foreign income tax liability;
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(i) pay, discharge or satisfy any
claim, liability or obligation (absolute, accrued,
asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past
practice, of liabilities reflected or reserved against in
the Balance Sheet included in the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997
or subsequently incurred in the ordinary course of
business consistent with past practice; or
(j) settle or comprise any pending or
threatened suit, action or claim that is material or
which relates to any of the Transactions; or
(k) announce an intention, enter into
any formal or informal agreement, or otherwise make a
commitment, to do any of the foregoing.
ARTICLE VI.
ADDITIONAL AGREEMENTS
SECTION 6.01 Special Stockholders' Meeting. The Company,
acting through the Board, shall, in accordance with applicable law and its
Constituent Documents, unless not required under applicable "short-form" merger
provisions of Delaware Law, (i) duly call, give notice of, convene and hold a
special meeting of its stockholders as soon as practicable following
consummation of the Offer for the purpose of considering and taking action on
this Agreement and the transactions contemplated hereby (the "Special
Stockholders' Meeting") and (ii) subject to its fiduciary duties under
applicable law as advised by independent counsel, (A) include in the Proxy
Statement the unanimous recommendation of the Board that the stockholders of
the Company approve and adopt this Agreement and the Transactions, including,
without limitation, the Merger and (B) use all reasonable efforts to obtain
such approval and adoption. At the Special Stockholders' Meeting (or by
consent if a stockholders meeting is not required), Parent and Purchaser shall
cause all Shares then owned by them and their subsidiaries to be voted in favor
of the approval and adoption of this Agreement and the Transactions, including,
without limitation, the Merger.
SECTION 6.02 Proxy Statement. As soon as practicable
following consummation of the Offer, the Company shall file the Proxy Statement
with the SEC under the Exchange Act, unless the Special Stockholders' Meeting
is not required under applicable "short-form" merger provisions of Delaware
Law, and shall use its best efforts to have the Proxy Statement cleared by the
SEC. Parent, Purchaser and the Company shall cooperate with each other in the
preparation of the Proxy Statement, and the Company shall notify Parent of the
receipt of any comments of the SEC with respect to the Proxy Statement and of
any requests by the SEC for any amendment or supplement thereto or for
additional information and shall provide to Parent promptly copies of all
correspondence between the Company or any representative of the
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Company and the SEC. The Company shall give Parent and its counsel the
opportunity to review the Proxy Statement prior to its being filed with the SEC
and shall give Parent and its counsel the opportunity to review all amendments
and supplements to the Proxy Statement and all responses to requests for
additional information and replies to comments prior to their being filed with,
or sent to, the SEC. Each of the Company, Parent and Purchaser agrees to use
all reasonable efforts, after consultation with the other parties hereto, to
respond promptly to all such comments of and requests by the SEC and to cause
the Proxy Statement and all required amendments and supplements thereto to be
mailed to the holders of Shares entitled to vote at the Special Stockholders'
Meeting at the earliest practicable time.
SECTION 6.03 Company Board Representation; Section
14(f). (a) Promptly upon the purchase by Purchaser of Shares pursuant to the
Offer, and from time to time thereafter, Purchaser shall be entitled to
designate up to such number of directors, rounded up to the next whole number,
on the Board as shall give Purchaser representation on the Board equal to the
product of the total number of directors on the Board (giving effect to the
directors elected pursuant to this sentence) multiplied by the percentage that
the aggregate number of Shares beneficially owned by Purchaser or any affiliate
of Purchaser at such time bears to the total number of Shares then outstanding,
and the Company shall, at such time, promptly take all actions necessary to
cause Purchaser's designees to be elected as directors of the Company,
including increasing the size of the Board or securing the resignations of
incumbent directors or both. At such times, the Company shall use all
reasonable efforts to cause persons designated by Purchaser to constitute the
same percentage as persons designated by Purchaser shall constitute of the
Board with respect to (i) each committee of the Board (some of whom may be
required to be independent as required by applicable law or requirements of the
New York Stock Exchange), (ii) each board of directors of each Subsidiary and
(iii) each committee of each such board, in each case only to the extent
permitted by applicable law. Notwithstanding the foregoing, until the time
Purchaser acquires a majority of the then outstanding Shares on a fully diluted
basis, the Company shall use all reasonable efforts to ensure that all the
members of the Board and each committee of the Board and such boards and
committees of the Subsidiaries as of the date hereof who are not employees of
the Company shall remain members of the Board and of such boards and
committees.
(b) The Company shall promptly take all actions
required pursuant to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder in order to fulfill its obligations under this Section
6.03 and shall include the Information Statement containing such information
with respect to the Company and its officers and directors as is required under
Section 14(f) and Rule 14f-1 as an annex to the Schedule 14D-9 to fulfill such
obligations. Parent or Purchaser shall supply to the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the election or appointment of
designees of Purchaser pursuant to this Section 6.03, prior to the Effective
Time, any amendment of this Agreement or the Constituent
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Documents of the Company, any termination of this Agreement by the Company, any
extension by the Company of the time for the performance of any of the
obligations or other acts of Parent or Purchaser or waiver of any of the
Company's rights hereunder shall require the concurrence of a majority of the
directors of the Company then in office who neither were designated by
Purchaser nor are employees of the Company or if no such directors are then in
office, no such amendment, termination, extension or waiver shall be effected
which is materially adverse to the holders of Shares (other than Parent and its
subsidiaries).
SECTION 6.04 Access to Information; Confidentiality.
(a) From the date hereof to the consummation of the Offer, the Company shall,
and shall cause the Subsidiaries to, afford the officers, employees and agents
of Parent and Purchaser and persons providing or committing to provide Parent
or Purchaser with financing for the Transactions complete access at all
reasonable times to the officers, employees, agents, properties, offices,
plants and other facilities, books and records of the Company and each
Subsidiary, and shall furnish Parent and Purchaser and persons providing or
committing to provide Parent or Purchaser with financing for the Transactions
with all financial, operating and other data and information as Parent or
Purchaser, through its officers, employees or agents, may reasonably request.
(b) Parent agrees that all information obtained
by Parent or Purchaser pursuant to this Section 6.04 shall be kept
confidential, by Purchaser, by Parent and by any other party which is to be
afforded access pursuant to Section 6.04(a), in accordance with the
confidentiality agreement, dated April 25, 1997 (the "Confidentiality
Agreement"), between Parent and the Company.
SECTION 6.05 No Solicitation of Transactions. Neither
the Company nor any Subsidiary shall, directly or indirectly, through any
officer, director, agent or otherwise, solicit, initiate or encourage the
submission of any proposal or offer from any person relating to any acquisition
or purchase of all or any material portion of the assets of, or any equity
interest in, the Company or any Material Subsidiary or any business combination
with the Company or any Material Subsidiary or participate in any negotiations
regarding, or furnish to any other person any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any other person to do or seek any of the
foregoing and the Company immediately shall cease and cause to be terminated
all existing discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing. Notwithstanding the foregoing or any
other provision hereof, nothing shall prohibit the Board from furnishing
information to, or entering into discussions or negotiations with, any person
in connection with an unsolicited (from the date of this Agreement) proposal in
writing by such person to acquire the Company pursuant to a merger,
consolidation, share exchange, business combination or other similar
transaction or to acquire all or substantially all of the assets of the Company
or any of its Subsidiaries, if, and only to the extent that, (i) the Board,
after consultation with independent legal counsel (which may include its
regularly engaged independent legal counsel), determines in good faith that
such action is required for the Board to comply with its fiduciary duties to
stockholders imposed by
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Delaware Law and (ii) prior to furnishing such information to, or entering into
discussions or negotiations with, such person the Company uses its reasonable
efforts to obtain from such person an executed confidentiality agreement on
terms no less favorable to the Company than those contained in the
Confidentiality Agreement. The Company shall notify Parent promptly if any
such proposal or offer, or any inquiry or contact with any person with respect
thereto, is made. The Company agrees not to release any third party from, or
waive any provision of, any confidentiality or, subject to the fiduciary duties
of the Board, standstill agreement to which the Company is or may become a
party.
SECTION 6.06 Employee Benefits Matters; Employment
Agreements. Annex C hereto sets forth certain agreements among the parties
hereto with respect to the Plans and other employee benefits matters.
SECTION 6.07 Directors' and Officers' Indemnification
and Insurance. (a) The Certificate of Incorporation and Bylaws of the
Surviving Corporation shall contain provisions no less favorable with respect
to indemnification than are set forth in Article XIII of the Bylaws of the
Company, which provisions shall not be amended, repealed or otherwise modified
for a period of six years from the Effective Time in any manner that would
affect adversely the rights thereunder of individuals who at any time from and
after the date of this Agreement and to and including the Effective Time were
directors, officers, employees, fiduciaries or agents of the Company in respect
of acts or omissions occurring at or prior to the Effective Time (including,
without limitation, the matters contemplated by this Agreement), unless such
modification shall be required by law. From and after the Purchaser's Election
Date, the Company shall not amend, repeal or otherwise modify the
indemnification and advancement of expenses provisions of Article XIII of the
Bylaws of the Company or the indemnification or advancement of expenses
provisions in the Constituent Documents of any of the Subsidiaries in any
manner that would adversely affect the rights thereunder of individuals who at
any time from and after the date of this Agreement and to and including the
Effective Time were directors, officers, employees, fiduciaries or agents of
the Company or any of the Subsidiaries in respect of acts or omissions
occurring at or prior to the Effective Time (including, without limitation, the
matters contemplated by this Agreement), unless such modification is required
by law.
(b) The Company shall, to the fullest extent
permitted under applicable law, indemnify and hold harmless, and, after the
Effective Time, Parent and the Surviving Corporation shall, to the fullest
extent permitted under applicable law, indemnify and hold harmless, each
present and former director, officer, employee, fiduciary and agent of the
Company and each Subsidiary (collectively, the "Indemnified Parties") against
all costs and expenses (including reasonable attorneys' fees), judgments,
fines, losses, claims, damages, liabilities and settlement amounts paid in
connection with any claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), whether civil, criminal,
administrative or investigative, arising out of or pertaining to any act or
omission in their capacity as an officer, director, employee, fiduciary or
agent, whether occurring before or
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after the Effective Time, for a period of six years after the date hereof (and
shall pay any expenses in advance of the final disposition of any such action
or proceeding to each Indemnified Party to the fullest extent permitted under
Delaware Law, and, with respect to Indemnified Parties who are or were
directors or officers of the Company, upon receipt from the Indemnified Party
to whom expenses are advanced of any undertaking to repay such advances
required under Delaware Law). In the event of any such claim, action, suit,
proceeding or investigation, (i) the Company, Parent or the Surviving
Corporation, as the case may be, shall pay the reasonable fees and expenses of
counsel selected by the Indemnified Parties, which counsel shall be reasonably
satisfactory to the Company, Parent or the Surviving Corporation, promptly
after statements therefor are received (subject to the provision of an
undertaking as set forth in the prior sentence, if applicable) and (ii) the
Company, Parent and the Surviving Corporation shall cooperate in the defense of
any such matter; provided, however, that neither the Company, Parent nor the
Surviving Corporation (i) shall be liable for any settlement effected without
its written consent (which consent shall not be unreasonably withheld); or (ii)
shall be obligated pursuant to this Section 6.07(b) to pay the fees and
expenses of more than one counsel for all Indemnified Parties in any single
action except to the extent that two or more of such Indemnified Parties shall
have conflicting interests in the outcome of such action; and provided further
that, in the event that any claim for indemnification is asserted or made
within such six-year period, all rights to indemnification in respect of such
claim shall continue until the disposition of such claim.
(c) The Company shall maintain in effect from and
after the date of this Agreement and to and including the Effective Time, and
Parent shall cause the Surviving Corporation from the Effective Time until six
years thereafter to maintain in effect, insurance coverage, if available,
equivalent to that provided by the directors' and officers' liability insurance
policies currently maintained by the Company with respect to matters occurring
on or prior to the Effective Time; provided, however, that the Surviving
Corporation may substitute therefor policies of at least the same coverage
containing terms and conditions which are not materially less favorable; and
provided further that, in no event shall the Surviving Corporation be required
to expend pursuant to this Section 6.07(c) more than an amount per year equal
to 250% of current annual premiums paid by the Company for such insurance
(which annual premiums the Company represents to be approximately $300,000).
(d) In the event the Company, Parent or the
Surviving Corporation or any of their respective successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger
or (ii) transfers all or substantially all of its properties and assets to any
person, then, and in each such case, proper provision shall be made so that the
successors and assigns of the Company, Parent or the Surviving Corporation, as
the case may be, shall assume the obligations set forth in this Section 6.07.
SECTION 6.08 Notification of Certain Matters. The
Company shall give prompt notice to Parent, and Parent shall give prompt notice
to the Company, of (i) the occurrence or
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non-occurrence of any event the occurrence or non-occurrence of which causes
any representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect and (ii) any failure of the Company, Parent
or Purchaser, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section
6.08 shall not limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
SECTION 6.09 Further Action; Reasonable Efforts. Upon
the terms and subject to the conditions hereof, each of the parties hereto
shall (i) make promptly its respective filings, and thereafter make any other
required submissions, under the HSR Act with respect to the Transactions and
(ii) use all reasonable efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective the Transactions, including, without limitation, using all reasonable
efforts to obtain all licenses, permits (including, without limitation,
environmental permits), consents, approvals, authorizations, qualifications and
orders of governmental authorities and parties to contracts with the Company
and the Subsidiaries as are necessary for the consummation of the Transactions
and to fulfill the conditions to the Offer, the Note Tender Offer and the
Merger and (iii) except as contemplated by this Agreement, use all reasonable
efforts not to take any action, or enter into any transaction, which would
cause any of its representations or warranties contained in this Agreement to
be untrue or result in a breach of any covenant made by it in this Agreement.
In case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of Parent and the Company shall use all reasonable efforts to take
all such action.
SECTION 6.10 Public Announcements. Parent and the
Company shall consult with each other before issuing any press release or
otherwise making any public statements with respect to this Agreement or any
Transaction and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by law or any
listing agreement with a national securities exchange or foreign securities
exchange to which Parent or the Company is a party.
SECTION 6.11 Confidentiality Agreement. Assuming the
Minimum Condition has been satisfied, upon the acceptance for payment of Shares
pursuant to the Offer, the Confidentiality Agreement shall be deemed to have
terminated without further action by the parties thereto.
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ARTICLE VII.
CONDITIONS TO THE MERGER
SECTION 7.01 Conditions to the Merger. The respective
obligations of each party to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) Stockholder Approval. This
Agreement and the Transactions, including, without
limitation, the Merger, shall have been approved and
adopted by the affirmative vote of the stockholders of
the Company (unless the vote of the stockholders is not
required by Delaware Law);
(b) HSR Act. Any waiting period (and
any extension thereof) applicable to the consummation of
the Merger under the HSR Act shall have expired or been
terminated;
(c) No Order. No foreign, United
States or state governmental authority or other agency or
commission or foreign, United States or state court of
competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any law, rule,
regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) which
is then in effect and has the effect of making the
acquisition of Shares by Parent or Purchaser or any
affiliate of either of them or the consummation of the
Merger illegal under applicable law or otherwise
restricting, preventing or prohibiting under applicable
law consummation of the Transactions;
(d) Offer. Purchaser or its
permitted assignee shall have purchased all Shares
validly tendered and not withdrawn pursuant to the Offer;
provided, however, that neither Parent nor Purchaser
shall be entitled to assert the failure of this condition
if, in breach of this Agreement or the terms of the
Offer, Purchaser fails to purchase any Shares validly
tendered and not withdrawn pursuant to the Offer; and
(e) Note Tender Offer. The
Supplemental Indenture shall have been entered into and
Parent or its permitted assignee shall have purchased all
Notes validly tendered and not withdrawn pursuant to the
Note Tender Offer; provided, however, that Parent shall
not be entitled to assert the failure of this condition
if, in breach of this Agreement or the terms of the Note
Tender Offer, Parent fails to purchase any Notes validly
tendered and not withdrawn pursuant to the Note Tender
Offer.
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ARTICLE VIII.
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01 Termination. This Agreement may be
terminated and the Merger and the other Transactions may be abandoned at any
time prior to the Effective Time, notwithstanding any requisite approval and
adoption of this Agreement and the transactions contemplated hereby by the
stockholders of the Company:
(a) By mutual written consent duly
authorized by the Boards of Directors of Parent,
Purchaser and the Company prior to Purchaser's Election
Date; or
(b) By Parent, Purchaser or the
Company if (i) the Effective Time shall not have occurred
on or before December 31, 1997; provided, however, that
the right to terminate this Agreement under this Section
8.01(b) shall not be available to any party whose failure
to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure of the
Effective Time to occur on or before such date or (ii)
any court of competent jurisdiction in the United States
or other governmental authority shall have issued an
order, decree, ruling or taken any other action
restraining, enjoining or otherwise prohibiting the
Merger and such order, decree, ruling or other action
shall have become final and nonappealable; or
(c) By Parent if (i) due to an
occurrence or circumstance that would result in a failure
to satisfy any condition set forth in Annex A or Annex B
hereto, as applicable, Purchaser shall have (A) failed to
commence the Offer within five business days following
the date of public announcement of the execution of this
Agreement, (B) failed to commence the Note Tender Offer
within 10 business days following the date of public
announcement of the execution of this Agreement, (C)
terminated the Offer or the Note Tender Offer without
having accepted any Shares or Notes (and without having
obtained related Consents), as the case may be, for
payment thereunder or (D) failed to pay for Shares or
Notes (and obtain related Consents) pursuant to the Offer
or the Note Tender Offer, as the case may be, within 90
days following the commencement thereof; unless such
action or inaction under (A), (B), (C) or (D) shall have
been caused by or resulted from the failure of Parent or
Purchaser to perform in any material respect any material
covenant or agreement of either of them contained in this
Agreement or the material breach by Parent or Purchaser
of any material representation or warranty of either of
them contained in this Agreement or (ii) prior to the
purchase of Shares pursuant to the Offer or the Notes
pursuant to the Note Tender Offer, the Board or any
committee thereof shall have withdrawn or modified in a
manner adverse to Purchaser or Parent its approval or
recommendation of the Offer, this Agreement, the Merger
or any other Transaction or shall have recommended
another merger, consolidation, business combination with,
or acquisition of, the
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46
Company or its assets or another tender offer or exchange
offer for Shares, or shall have resolved to do any of the
foregoing; or
(d) By the Company, upon approval of
the Board if (i) Purchaser shall have (A) failed to
commence the Offer within five business days following
the date of public announcement of the execution of this
Agreement, (B) failed to commence the Note Tender Offer
within 10 business days following the date of public
announcement of the execution of this Agreement, (C)
terminated the Offer or the Note Tender Offer without
having accepted any Shares or Notes (and without having
obtained related Consents), as the case may be, for
payment thereunder or (D) failed to pay for Shares
pursuant to the Offer or the Notes (and obtain related
Consents) pursuant to the Note Tender Offer within 90
days following the commencement thereof, unless such
action or inaction under (A), (B), (C) or (D) shall have
been caused by or resulted from the failure of the
Company to perform in any material respect any material
covenant or agreement of it contained in this Agreement
or the material breach by the Company of any material
representation or warranty of it contained in this
Agreement or (ii) prior to the purchase of Shares
pursuant to the Offer or the Notes pursuant to the Note
Tender Offer, the Board shall have withdrawn or modified
in a manner adverse to Purchaser or Parent its approval
or recommendation of the Offer, this Agreement, the
Merger or any other Transaction in order to approve the
execution by the Company of a definitive agreement
providing for the acquisition of the Company or any of
its assets by a sale, merger or other business
combination or in order to approve a tender offer or
exchange offer for Shares by a third party, in either
case, as the Board determines in good faith that such
action is required for the Board to comply with its
fiduciary duties to stockholders, after consultation with
its independent legal counsel and financial advisers, and
is on terms more favorable to the Company's stockholders
than the Offer and the Merger taken together; provided,
however, that such termination under this clause (ii)
shall not be effective until the Company has made payment
to Parent of the Fee (as hereinafter defined) required to
be paid pursuant to Section 8.03(a)(iv) and has deposited
with a mutually acceptable escrow agent $2.0 million for
reimbursement of Expenses (as hereinafter defined).
SECTION 8.02 Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 8.01, this Agreement shall
forthwith become void, and there shall be no liability on the part of any party
hereto, except as set forth in Sections 8.03 and 9.01, and nothing herein shall
relieve any party from liability for any breach hereof.
SECTION 8.03 Fees and Expenses. (a) In the event that
(i) any person (including, without
limitation, the Company or any affiliate thereof), other
than Parent or any affiliate of Parent, shall have become
the beneficial owner of more than 20% of the then
outstanding Shares, this Agreement shall have been
terminated pursuant to Section 8.01 (other than pursuant
to Section 8.01(c)(ii) or
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47
8.01(d)(ii)) and within 12 months of such termination a
Third Party Acquisition (as defined hereinafter) shall
occur; or
(ii) any person shall have commenced,
publicly proposed or communicated to the Company a
proposal that is publicly disclosed for a tender or
exchange offer for 25% or more of the then outstanding
Shares (or which, assuming the maximum amount of
securities that could be purchased, would result in any
person beneficially owning 25% or more of the then
outstanding Shares) or otherwise for the direct or
indirect acquisition of the Company or all or
substantially all of its assets for per Share
consideration having a value greater than the Per Share
Amount and (w) the Offer shall have remained open for at
least 20 business days, (x) the Minimum Condition shall
not have been satisfied, (y) this Agreement shall have
been terminated pursuant to Section 8.01 (and other than
pursuant to Section 8.01(c)(ii) or 8.01(d)(ii)) and (z)
within 12 months of such termination a Third Party
Acquisition shall occur; or
(iii) if the Minimum Condition or the
Requisite Consent Condition shall not have been satisfied
on or prior to the date that is 60 days from the date of
commencment of the Offer, Parent desires to extend the
Offer beyond such 60 day period but the Company declines
to consent to such extension pursuant to Section 1.01,
this Agreement is terminated pursuant to Section 8.01
(and other than pursuant to Section 8.01(c)(ii) or
8.01(d)(ii)) and within 12 months of such termination a
Third Party Acquisition shall occur; or
(iv) this Agreement is terminated
pursuant to Section 8.01(c)(ii) or 8.01(d)(ii)
then, in any such event, provided that neither Parent nor Purchaser is in
material breach of its obligations under this Agreement, the Company shall pay
Parent promptly (but in no event later than one business day after (a) the
consummation of the Third Party Acquisition, with respect to the events
described in clauses (i), (ii) or (iii), or (b) such termination with respect
to clause (iv)) a fee of U.S. $8 million (the "Fee"), which amount shall be
payable in immediately available funds, plus all Expenses.
(b) Provided that neither Parent nor Purchaser is
in material breach of its obligations under this Agreement and Parent is not
entitled to the Fee pursuant to Section 8.03(a), if (i) this Agreement is
terminated pursuant to Section 8.01(c) due to the occurrence of the condition
set forth in paragraph (g) of Annex A or (ii) this Agreement is terminated
pursuant to Section 8.01(c) because of the occurrence of the condition set
forth in paragraph (f) of Annex A and such occurrence results from the failure
of the representations and warranties of the Company in this Agreement to be
true and correct in accordance with their respective terms, then, in either
case (i) or (ii), the Company shall promptly reimburse Parent and Purchaser for
all Expenses.
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(c) "Expenses" means all reasonable out-of-pocket
expenses and fees up to U.S. $2 million in the aggregate (including, without
limitation, reasonable fees and expenses payable to all banks, investment
banking firms, other financial institutions and other persons and their
respective agents and counsel for arranging, committing to provide or providing
any financing for the Transactions or structuring the Transactions and all
reasonable fees of counsel, accountants, experts and consultants to Parent and
Purchaser, and all printing and advertising expenses) actually incurred by
either of them or on their behalf in connection with the Transactions,
including, without limitation, the financing thereof, and actually incurred by
banks, investment banking firms, other financial institutions and other persons
and assumed by Parent and Purchaser in connection with the negotiation,
preparation, execution and performance of this Agreement, the structuring and
financing of the Transactions and any financing commitments or agreements
relating thereto.
(d) Except as set forth in this Section 8.03, all
costs and expenses incurred in connection with this Agreement and the
Transactions shall be paid by the party incurring such expenses, whether or not
any Transaction is consummated.
(e) In the event that the Company shall fail to
pay the Fee or any Expenses when due, the term "Expenses" shall be deemed to
include the reasonable costs and expenses actually incurred by Parent and
Purchaser (including, without limitation, reasonable fees and expenses of
counsel) in connection with the collection under and enforcement of this
Section 8.03, together with interest on such unpaid Fee and Expenses,
commencing on the date that the Fee or such Expenses became due, at a per annum
rate equal to the rate of interest publicly announced by Xxxxxx Guaranty Trust
Company of New York, from time to time, in the City of New York, as such bank's
prime rate plus 1%.
(f) "Third Party Acquisition" means the
occurrence of any of the following events: (i) the acquisition of the Company
by merger, consolidation or other business combination transaction by any
person other than Parent, Purchaser or any affiliate thereof (a "Third Party");
(ii) the acquisition by any Third Party of all or substantially all of the
assets of the Company and its Subsidiaries, taken as a whole; (iii) the
acquisition by a Third Party of 50% or more of the outstanding Shares whether
by tender offer, exchange offer or otherwise; (iv) the adoption by the Company
of a plan of liquidation or the declaration or payment of an extraordinary
dividend; or (v) the repurchase by the Company or any of its Subsidiaries of
50% or more of the outstanding Shares.
SECTION 8.04 Amendment. Subject to the limitations set
forth in Section 6.03(c), this Agreement may be amended by the parties hereto
by action taken by or on behalf of their respective Boards of Directors at any
time prior to the Effective Time; provided, however, that, after the approval
and adoption of this Agreement and the transactions contemplated hereby by the
stockholders of the Company, no amendment may be made which would reduce the
amount or change the type of consideration into which each Share shall be
converted upon
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consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 8.05 Waiver. Subject to the limitations set
forth in Section 6.03(c), at any time prior to the Effective Time, any party
hereto may (i) extend the time for the performance of any obligation or other
act of any other party hereto, (ii) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant hereto
and (iii) waive compliance with any agreement or condition contained herein.
Any such extension or waiver shall be valid if set forth in an instrument in
writing signed by the party or parties to be bound thereby.
ARTICLE IX.
GENERAL PROVISIONS
SECTION 9.01 Non-Survival of Representations, Warranties
and Agreements. The representations, warranties and agreements in this
Agreement shall terminate at the Effective Time or upon the termination of this
Agreement pursuant to Section 8.01, as the case may be, except that the
agreements set forth in Articles II and IX and Section 6.07 shall survive the
Effective Time indefinitely and those set forth in Sections 6.04(b), 8.03 and
Article IX shall survive termination indefinitely.
SECTION 9.02 Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly given upon receipt) by delivery in
person, by telecopy or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 9.02):
if to Parent or Purchaser:
United Dominion Industries Limited
2300 One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Telecopy No.: 000-000-0000
Attn: Xxxxxxx X. Xxxxx, Esq.
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with a copy to:
Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A.
0000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy No.: 704-378-4000
Attn: Xxxxxxx X. Xxxxx, Esq.
if to the Company:
Imo Industries Inc.
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxx Xxxxxx 00000-0000
Telecopy No.: 000-000-0000
Attn: Xxxxxx X. Xxxx, Esq.
with a copy to:
Weil, Gotshal and Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: 000-000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
SECTION 9.03 Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" of a specified person means a
person who directly or indirectly through one or more intermediaries controls,
is controlled by, or is under common control with, such specified person;
(b) "beneficial owner" with respect to any Shares
means a person who shall be deemed to be the beneficial owner of such Shares
(i) that such person or any of its affiliates or associates (as such term is
defined in Rule 12b-2 promulgated under the Exchange Act) beneficially owns,
directly or indirectly, (ii) that such person or any of its affiliates or
associates has, directly or indirectly, (A) the right to acquire (whether such
right is exercisable immediately or subject only to the passage of time),
pursuant to any agreement, arrangement or understanding or upon the exercise of
consideration rights, exchange rights, warrants or options, or otherwise, or
(B) the right to vote pursuant to any agreement, arrangement or understanding
or (iii) that are beneficially owned, directly or indirectly, by any other
persons with whom such person or any of its affiliates or associates or person
with whom such person or any of its affiliates or associates has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of any Shares;
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(c) "business day" means any day on which the
principal offices of the SEC in Washington, D.C. are open to accept filings,
or, in the case of determining a date when any payment is due, any day on which
banks are not required or authorized to close in the City of New York;
(d) "control" (including the terms "controlled
by" and "under common control with") means the possession, directly or
indirectly or as trustee or executor, of the power to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
(e) "person" means an individual, corporation,
partnership, limited partnership, syndicate, person (including, without
limitation, a "person" as defined in Section 13(d)(3) of the Exchange Act),
trust, association or entity or government, political subdivision, agency or
instrumentality of a government; and
(f) "subsidiary" or "subsidiaries" of the
Company, the Surviving Corporation, Parent or any other person means an
affiliate controlled by such person, directly or indirectly, through one or
more intermediaries.
SECTION 9.04 Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable of being enforced
by any rule of law, or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the Transactions is not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the Transactions be consummated as originally
contemplated to the fullest extent possible.
SECTION 9.05 Entire Agreement, Assignment. This
Agreement constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes, except as set forth in Section
6.04(b), all prior agreements and undertakings, both written and oral, among
the parties, or any of them, with respect to the subject matter hereof. This
Agreement shall not be assigned by operation of law or otherwise, except that
Purchaser may assign all or any of its rights and obligations hereunder to any
affiliate of Parent provided that no such assignment shall relieve the
assigning party of its obligations hereunder if such assignee does not perform
such obligations.
SECTION 9.06 Parties in Interest. This Agreement shall
be binding upon and inure solely to the benefit of each party hereto, and
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person any right, benefit or remedy of any nature
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whatsoever under or by reason of this Agreement, other than Section 6.07 (which
is intended to be for the benefit of the persons covered thereby and may be
enforced by such persons).
SECTION 9.07 Specific Performance. The parties hereto
agree that irreparable damage would occur in the event any provision of this
Agreement was not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity.
SECTION 9.08 Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Delaware.
SECTION 9.09 Headings. The descriptive headings
contained in this Agreement are included for convenience of reference only and
shall not affect in any way the meaning or interpretation of this Agreement.
SECTION 9.10 Counterparts. This Agreement may be
executed in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
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IN WITNESS WHEREOF, Parent, Purchaser and the Company
have caused this Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
UNITED DOMINION INDUSTRIES LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. Vice President
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
UD DELAWARE CORP.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. Vice President
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
IMO INDUSTRIES INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the
Board, President
and Chief Executive
Officer
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ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Purchaser shall not
be required to accept for payment or pay for any Shares tendered pursuant to
the Offer, and may terminate or amend the Offer and may postpone the acceptance
for payment of and payment for Shares tendered, if (i) the Minimum Condition
shall not have been satisfied, (ii) the Note Tender Offer shall have been
terminated in accordance with the terms of Annex B hereto, (iii) any applicable
waiting period under the HSR Act shall not have expired or been terminated
prior to the expiration of the Offer or (iv) at any time on or after the date
of this Agreement, and prior to the acceptance for payment of Shares, any of
the following conditions shall exist:
(a) there shall have been instituted or be pending any
action or proceeding brought by any governmental, administrative or
regulatory authority or agency, domestic or foreign, before any court
or governmental, administrative or regulatory authority or agency,
domestic or foreign, (i) challenging or seeking to make illegal,
materially delay or otherwise directly or indirectly restrain or
prohibit or make materially more costly the making of the Offer, the
acceptance for payment of, or payment for, any Shares by Parent,
Purchaser or any other affiliate of Parent pursuant to the Offer or
the consummation of any other Transaction, or seeking to obtain
material damages in connection with any Transaction; (ii) seeking to
prohibit or limit materially the ownership or operation by the Company
or Parent of all or any material portion of its business or to compel
the Company or Parent to dispose of or hold separate all or any
material portion of its business as a result of the Transactions;
(iii) seeking to impose or confirm limitations on the ability of
Parent, Purchaser or any other affiliate of Parent to exercise
effectively full rights of ownership of any Shares, including, without
limitation, the right to vote any Shares acquired by Purchaser
pursuant to the Offer, or otherwise on all matters properly presented
to the Company's stockholders, including, without limitation, the
approval and adoption of this Agreement and the transactions
contemplated hereby; or (iv) seeking to require divestiture by Parent,
Purchaser or any other affiliate of Parent of any Shares; provided
that Parent shall have used all reasonable efforts to cause any such
action or proceeding described in this paragraph (a) to be dismissed
or withdrawn;
(b) there shall have been issued any injunction, order or
decree by any court or governmental, administrative or regulatory
authority or agency, domestic or foreign, resulting from any action or
proceeding brought by any person other than any governmental,
administrative or regulatory authority or agency, domestic or foreign,
that (i) restrains or prohibits the making of the Offer or the
consummation of any other Transaction; (ii) prohibits or limits
ownership or operation by the Company or Parent
A-1
55
of all or any material portion of its business or assets or compels
the Company or Parent to dispose of or hold separate all or any
material portion of its business or assets, in each case as a result
of the Transactions; (iii) imposes limitations on the ability of
Parent or Purchaser to exercise effectively full rights of ownership
of any Shares, including, without limitation, the right to vote any
Shares acquired by Purchaser pursuant to the Offer, or otherwise on
all matters properly presented to the Company's stockholders,
including, without limitation, the approval and adoption of this
Agreement and the Transactions or (iv) requires divestiture by Parent
or Purchaser of any Shares; provided that Parent shall have used all
reasonable efforts to cause any such injunction, order or decree
described in this paragraph (b) to be vacated or lifted;
(c) there shall have been any action taken, or any
statute, rule, regulation, order or injunction enacted, entered,
enforced, promulgated, amended, issued or deemed applicable to (i)
Parent, the Company or any subsidiary or affiliate of Parent or the
Company or (ii) any Transaction, by any legislative body, court,
government or governmental, administrative or regulatory authority or
agency, domestic or foreign, in the case of both (i) and (ii) other
than the routine application of the waiting period provisions of the
HSR Act to the Offer or the Merger, in each case that results in any
of the consequences referred to in clauses (i) through (iv) of
paragraph (b) above; provided that Parent shall have used all
reasonable efforts to cause any such action, order or injunction
described in this paragraph (c) to be vacated or lifted;
(d) there shall have occurred (i) any general suspension
of, or limitation on prices for, trading in securities of (x) the
Company on the New York Stock Exchange or (y) Parent on any of The
Toronto Stock Exchange, The Montreal Exchange or the New York Stock
Exchange, (ii) any decline, measured from the date hereof, in the
Standard & Poor's 500 Index by an amount in excess of 30%, (iii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or Canada, (iv) any limitation
(whether or not mandatory) by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign,
on the extension of credit by banks or other lending institutions, (v)
a commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United
States or (vii) in the case of any of the foregoing existing on the
date hereof, a material acceleration or worsening thereof;
(e) (i) it shall have been publicly disclosed or
Purchaser shall have otherwise learned that beneficial ownership
(determined for the purposes of this paragraph as set forth in Rule
13d-3 promulgated under the Exchange Act) of 20% or more of the then
outstanding Shares has been acquired by any person, other than Parent
or any of its affiliates or (ii) (A) the Board or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent
or Purchaser the approval or recommendation of the Offer, the Merger
or the Agreement or approved or recommended any takeover
A-2
56
proposal or any other acquisition of Shares other than the Offer and
the Merger or (B) the Board or any committee thereof shall have
resolved to do any of the foregoing;
(f) (i) any representation or warranty of the Company
in the Agreement shall not be true and correct; or
(ii) there shall have occurred, since the date of
the Agreement, a change in the business, operations, financial
condition, assets or liabilities of the Company or any Subsidiary
with the effect that such failure of any such representation or
warranty to be true and correct or such change, when taken together
with all other such failures of such representations and warranties to
be true and correct (both favorable and adverse) and all other such
changes (both favorable and adverse), in the aggregate would have, a
Material Adverse Effect; provided, however that, for the purpose of
the foregoing condition, in determining whether any such
representation or warranty is true or correct, any qualification as to
materiality or Material Adverse Effect contained in any such
representation and warranty shall be deemed not to apply;
(g) the Company shall have failed to perform in any
material respect any material obligation or to comply in any material
respect with any material agreement or material covenant of the
Company to be performed or complied with by it under the Agreement;
(h) the Agreement shall have been terminated in
accordance with its terms; or
(i) Purchaser and the Company shall have agreed that
Purchaser shall terminate the Offer or postpone the acceptance for
payment of or payment for Shares thereunder; which, in the sole
judgment of Purchaser, in any such case, and regardless of the
circumstances (including any action or inaction by Parent or any of
its affiliates) giving rise to any such condition, makes it
inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Purchaser and
Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such condition or may be waived by Purchaser
or Parent in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right; the waiver
of any such right with respect to particular facts and other circumstances
shall not be deemed a waiver with respect to any other facts and circumstances;
and each such right shall be deemed an ongoing right that may be asserted at
any time and from time to time.
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ANNEX B
CONDITIONS TO THE NOTE TENDER OFFER
Notwithstanding any other provision of the Note Tender Offer, Parent
shall not be required to accept for payment or pay for any Notes or related
Consents tendered pursuant to the Note Tender Offer and may terminate or amend
the Note Tender Offer and may postpone the acceptance for payment of and
payment for Notes and related Consents tendered, if (i) the Requisite Consent
Condition shall not have been satisfied, (ii) the Offer shall have been
terminated in accordance with the terms of Annex A hereto or (iii) at any time
on or after the date of this Agreement, and prior to the acceptance for payment
of Notes and related Consents, any of the following conditions shall exist:
(a) there shall have been instituted or be pending any
action or proceeding brought by any governmental, administrative or
regulatory authority or agency, domestic or foreign, before any court
or governmental, administrative or regulatory authority or agency,
domestic or foreign, (i) challenging or seeking to make illegal,
materially delay or otherwise directly or indirectly restrain or
prohibit or make materially more costly the making of the Note Tender
Offer, the acceptance for payment of, or payment for, any Notes or
related Consents by Parent or any other affiliate of Parent pursuant
to the Note Tender Offer or the consummation of any other Transaction,
or seeking to obtain material damages in connection with any
Transaction; (ii) seeking to prohibit or limit materially the
ownership or operation by the Company or Parent of all or any material
portion of its business or to compel the Company or Parent to dispose
of or hold separate all or any material portion of its business as a
result of the Transactions; (iii) seeking to impose or confirm
limitations on the ability of Parent or any affiliate of Parent to
exercise effectively full rights of ownership of any Notes or related
Consents, or (iv) seeking to require divestiture by Parent or any
affiliate of Parent of any Notes; provided that Parent shall have used
all reasonable efforts to cause any such action or proceeding
described in this paragraph (a) to be dismissed or withdrawn;
(b) there shall have been issued any injunction, order or
decree by any court or governmental, administrative or regulatory
authority or agency, domestic or foreign, resulting from any action or
proceeding brought by any person other than any governmental,
administrative or regulatory authority or agency, domestic or foreign,
that (i) restrains or prohibits the making of the Note Tender Offer or
the consummation of any other Transaction; (ii) prohibits or limits
ownership or operation by the Company or Parent of all or any material
portion of its business or assets or compels the Company or Parent to
dispose of or hold separate all or any material portion of its
business or assets, in each case as a result of the Transactions;
(iii) imposes limitations
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58
on the ability of Parent or Purchaser to exercise effectively full
rights of ownership of any Notes; or (iv) requires divestiture by
Parent of any Notes; provided that Parent shall have used all
reasonable efforts to cause any such injunction, order or decree
described in this paragraph (b) to be vacated or lifted;
(c) there shall have been any action taken, or any
statute, rule, regulation, order or injunction enacted, entered,
enforced, promulgated, amended, issued or deemed applicable to (i)
Parent, the Company or any subsidiary or affiliate of Parent or the
Company or (ii) any Transaction, by any legislative body, court,
government or governmental, administrative or regulatory authority or
agency, domestic or foreign, in the case of both (i) and (ii) other
than the routine application of the waiting period provisions of the
HSR Act to the Offer or the Merger, in each case that results in any
of the consequences referred to in clauses (i) through (iv) of
paragraph (b) above; provided that Parent shall have used all
reasonable efforts to cause any such action, order or injunction
described in this paragraph (c) to be vacated or lifted;
(d) there shall have occurred (i) any general suspension
of, or limitation on prices for, trading in securities of (x) the
Company on the New York Stock Exchange or (y) Parent on any of The
Toronto Stock Exchange, The Montreal Exchange or the New York Stock
Exchange, (ii) any decline, measured from the date hereof, in the
Standard & Poor's 500 Index by an amount in excess of 30%, (iii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or Canada, (iv) any limitation
(whether or not mandatory) by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign,
on the extension of credit by banks or other lending institutions, (v)
a commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United
States or (vii) in the case of any of the foregoing existing on the
date hereof, a material acceleration or worsening thereof;
(e) (i) it shall have been publicly disclosed or
Purchaser shall have otherwise learned that beneficial ownership
(determined for the purposes of this paragraph as set forth in Rule
13d-3 promulgated under the Exchange Act) of 20% or more of the then
outstanding Shares has been acquired by any person, other than Parent
or any of its affiliates or (ii) (A) the Board or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent
or Purchaser the approval or recommendation of the Offer, the Merger
or the Agreement or approved or recommended any takeover proposal or
any other acquisition of Shares other than the Offer and the Merger or
(B) the Board or any committee thereof shall have resolved to do any
of the foregoing;
(f) (i) any representation or warranty of the Company
in the Agreement shall not be true and correct; or
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59
(ii) there shall have occurred, since the date of
the Agreement, a change in the business, operations, financial
condition, assets or liabilities of the Company or any Subsidiary
with the effect that such failure of any such representation or
warranty to be true and correct or such change, when taken together
with all other such failures of such representations and warranties to
be true and correct (both favorable and adverse) and all other such
changes (both favorable and adverse), in the aggregate would have, a
Material Adverse Effect; provided, however that, for the purpose of
the foregoing condition, in determining whether any such
representation or warranty is true or correct, any qualification as to
materiality or Material Adverse Effect contained in any such
representation and warranty shall be deemed not to apply;
(g) the Company shall have failed to perform in any
material respect any material obligation or to comply in any material
respect with any material agreement or material covenant of the
Company to be performed or complied with by it under the Agreement;
(h) the Agreement shall have been terminated in
accordance with its terms; or
(i) Purchaser and the Company shall have agreed that
Purchaser shall terminate the Note Tender Offer or postpone the
acceptance for payment of or payment for Notes and related Consents
thereunder; which, in the sole judgment of Purchaser, in any such
case, and regardless of the circumstances (including any action or
inaction by Parent or any of its affiliates) giving rise to any such
condition, makes it inadvisable to proceed with such acceptance for
payment or payment.
The foregoing conditions are for the sole benefit of Purchaser and
Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such condition or may be waived by Purchaser
or Parent in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right; the waiver
of any such right with respect to particular facts and other circumstances
shall not be deemed a waiver with respect to any other facts and circumstances;
and each such right shall be deemed an ongoing right that may be asserted at
any time and from time to time.
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60
ANNEX C
For a period of one year from the Effective Time, Parent shall, or shall cause
the Company or the Surviving Corporation to, maintain the Plans (other than the
Stock Option Plans) which the Company maintains for the benefit of, or which
are open to, a majority of the employees of the Company on the terms in effect
on the date hereof, or such other plans, arrangements or programs as will
provide employees with benefits that in the aggregate are substantially
equivalent to, and no less favorable than, those provided under the Plans
(other than the Stock Option Plans) as in effect on the date hereof. In
addition, Parent shall, or shall cause the Surviving Corporation to, assume and
agree to perform those Change of Control Agreements listed in Schedule 6.06 of
the Disclosure Schedule in the same manner and to the same extent that the
Company is required to perform such agreements.
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