AGREEMENT AND PLAN OF MERGER AMONG ITT CORPORATION OYSTER ACQUISITION CORP. AND O.I. CORPORATION Dated as of September 13, 2010
EXHIBIT
2.1
EXECUTION
COPY
AGREEMENT
AND PLAN OF MERGER
AMONG
ITT
CORPORATION
OYSTER
ACQUISITION CORP.
AND
O.I.
CORPORATION
Dated as
of September 13, 2010
Page
|
||||
ARTICLE
I THE MERGER
|
1
|
|||
Section
1.1
|
The
Merger
|
1
|
||
Section
1.2
|
Effective
Time
|
2
|
||
Section
1.3
|
Effects
of the Merger
|
2
|
||
Section
1.4
|
Charter
and Bylaws; Directors and Officers
|
2
|
||
Section
1.5
|
Conversion
of Securities
|
2
|
||
Section
1.6
|
Exchange
Agent
|
3
|
||
Section
1.7
|
Withholding
|
4
|
||
Section
1.8
|
Return
of Exchange Fund
|
4
|
||
Section
1.9
|
No
Further Ownership Rights in Company Common Stock
|
4
|
||
Section
1.10
|
Closing
of Company Transfer Books
|
4
|
||
Section
1.11
|
Lost
Certificates
|
4
|
||
Section
1.12
|
Company
Stock Options
|
5
|
||
Section
1.13
|
Certain
Adjustments
|
6
|
||
Section
1.14
|
Further
Assurances
|
6
|
||
Section
1.15
|
Closing;
Closing Deliveries
|
6
|
||
ARTICLE
II REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
|
8
|
|||
Section
2.1
|
Organization,
Standing and Power
|
8
|
||
Section
2.2
|
Authority
|
8
|
||
Section
2.3
|
Consents
and Approvals; No Violation
|
9
|
||
Section
2.4
|
Litigation
|
10
|
||
Section
2.5
|
Brokers
|
10
|
||
Section
2.6
|
Operations
of Sub
|
10
|
||
Section
2.7
|
Proxy
Statement
|
10
|
||
Section
2.8
|
Financing
|
11
|
||
ARTICLE
III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
11
|
|||
Section
3.1
|
Organization,
Standing and Power
|
11
|
||
Section
3.2
|
Capital
Structure
|
12
|
||
Section
3.3
|
Authority
|
13
|
||
Section
3.4
|
Consents
and Approvals; No Violation
|
13
|
||
Section
3.5
|
SEC
Documents, Other Reports and Xxxxxxxx-Xxxxx
|
14
|
||
Section
3.6
|
Proxy
Statement
|
16
|
||
Section
3.7
|
Absence
of Certain Changes or Events; No Undisclosed Liabilities
|
16
|
||
Section
3.8
|
Permits;
Compliance with Laws
|
17
|
||
Section
3.9
|
Tax
Matters
|
18
|
||
Section
3.10
|
Litigation
|
19
|
||
Section
3.11
|
Certain
Agreements
|
19
|
||
Section
3.12
|
ERISA
|
21
|
||
Section
3.13
|
Compliance
with Worker Safety Laws; Environmental Matters
|
24
|
||
Section
3.14
|
Labor
Matters
|
26
|
||
Section
3.15
|
Intellectual
Property
|
26
|
||
Section
3.16
|
Properties
and Assets
|
28
|
i
TABLE OF
CONTENTS
Page
|
||||
Section
3.17
|
Key
Customers and Suppliers
|
29
|
||
Section
3.18
|
Insurance
|
30
|
||
Section
3.19
|
Absence
of Certain Payments
|
30
|
||
Section
3.20
|
Related
Party Transactions
|
30
|
||
Section
3.21
|
Opinion
of Financial Advisor
|
30
|
||
Section
3.22
|
State
Takeover Statutes; Certain Charter Provisions
|
30
|
||
Section
3.23
|
Required
Vote of Company Shareholders
|
31
|
||
Section
3.24
|
Brokers
|
31
|
||
Section
3.25
|
Accounts
Receivable
|
31
|
||
ARTICLE
IV COVENANTS RELATING TO CONDUCT OF BUSINESS
|
31
|
|||
Section
4.1
|
Conduct
of Business Pending the Merger
|
31
|
||
Section
4.2
|
No
Solicitation
|
35
|
||
Section
4.3
|
Third
Party Standstill Agreements
|
37
|
||
ARTICLE
V ADDITIONAL AGREEMENTS
|
38
|
|||
Section
5.1
|
Shareholder
Meeting
|
38
|
||
Section
5.2
|
Proxy
Statement
|
38
|
||
Section
5.3
|
Access
to Information
|
39
|
||
Section
5.4
|
Fees
and Expenses
|
39
|
||
Section
5.5
|
Commercially
Reasonable Efforts
|
40
|
||
Section
5.6
|
Public
Announcements
|
41
|
||
Section
5.7
|
Real
Estate Transfer Taxes
|
41
|
||
Section
5.8
|
State
Takeover Laws
|
41
|
||
Section
5.9
|
Indemnification
of Directors and Officers
|
41
|
||
Section
5.10
|
Notification
of Certain Matters
|
41
|
||
Section
5.11
|
Employee
Benefit Plans and Agreements
|
42
|
||
Section
5.12
|
Certain
Litigation
|
43
|
||
ARTICLE
VI CONDITIONS PRECEDENT TO THE MERGER
|
43
|
|||
Section
6.1
|
Conditions
to Each Party’s Obligation to Effect the Merger
|
43
|
||
Section
6.2
|
Conditions
to Obligation of the Company to Effect the Merger
|
43
|
||
Section
6.3
|
Conditions
to Obligations of Parent and Sub to Effect the Merger
|
44
|
||
ARTICLE
VII TERMINATION, AMENDMENT AND WAIVER
|
45
|
|||
Section
7.1
|
Termination
|
45
|
||
Section
7.2
|
Effect
of Termination
|
46
|
||
Section
7.3
|
Amendment
|
46
|
||
Section
7.4
|
Waiver
|
47
|
||
ARTICLE
VIII GENERAL PROVISIONS
|
47
|
|||
Section
8.1
|
Non-Survival
of Representations and Warranties
|
47
|
||
Section
8.2
|
Notices
|
47
|
ii
TABLE OF
CONTENTS
Page
|
||||
Section
8.3
|
Interpretation
|
48
|
||
Section
8.4
|
Counterparts
|
48
|
||
Section
8.5
|
Entire
Agreement; No Third-Party Beneficiaries
|
48
|
||
Section
8.6
|
Governing
Law; Submission to Jurisdiction; Waiver of Jury Trial
|
49
|
||
Section
8.7
|
Assignment
|
49
|
||
Section
8.8
|
Severability
|
49
|
||
Section
8.9
|
Enforcement
of this Agreement
|
49
|
||
Section
8.10
|
Definitions
|
50
|
iii
EXHIBITS
Exhibit
A
|
Form
of Shareholder Agreement
|
iv
TABLE OF
DEFINED TERMS
Defined Term
|
Section
|
|
Acquisition
Transaction
|
4.2(g)(i)
|
|
Actions
|
2.4
|
|
Affiliate
|
8.10
|
|
Agreement
|
Introduction
|
|
Certificate
of Merger
|
1.2
|
|
Certificates
|
1.6(b)
|
|
Closing
|
1.15(a)
|
|
Closing
Date
|
1.15(a)
|
|
Closing
Dividend
|
4.1(a)
|
|
Closing
Trigger Date
|
1.15(b)
|
|
Code
|
1.7
|
|
Company
|
Introduction
|
|
Company
Adverse Recommendation Change
|
4.2(d)
|
|
Company
Business Personnel
|
3.14(a)
|
|
Company
Bylaws
|
1.15(e)(iii)
|
|
Company
Charter
|
1.4(a)
|
|
Company
Common Stock
|
Recitals
|
|
Company
Contracts
|
3.11(a)
|
|
Company
Foreign Benefit Plan
|
3.12(j)
|
|
Company
Letter
|
Article
III
|
|
Company
Multiemployer Plan
|
3.12(c)
|
|
Company
Leased Real Property
|
3.16(c)
|
|
Company
Owned Real Property
|
3.16(b)
|
|
Company
Permits
|
3.8(a)
|
|
Company
Plan
|
3.12(c)
|
|
Company
Recommendation
|
5.1
|
|
Company
SEC Documents
|
3.5(a)
|
|
Company
Shareholders
|
1.6(b)
|
|
Company
Stock Option Plans
|
3.2(a)
|
|
Company
Stock Options
|
3.2(a)
|
|
Company
Stock Plans
|
3.2(a)
|
|
Company
Stock Purchase Plan
|
3.2(a)
|
|
Confidentiality
Agreement
|
5.3
|
|
Constituent
Corporations
|
Introduction
|
|
Contract
|
3.2(a)
|
|
Dissenting
Shares
|
1.5(d)
|
|
Effective
Time
|
1.2
|
|
Employee
Agreement
|
3.12(d)
|
|
Environmental
Claims
|
3.13(b)
|
|
Environmental
Laws
|
3.13(b)
|
|
Environmental
Permits
|
3.13(b)
|
|
ERISA
|
3.12(a)
|
|
ERISA
Affiliate
|
3.12(c)
|
|
Exchange
Act
|
2.3
|
|
Exchange
Agent
|
1.6(a)
|
v
TABLE OF
DEFINED TERMS
Exchange
Fund
|
1.6(a)
|
|
Financial
Statements
|
3.5(a)
|
|
GAAP
|
3.5(a)
|
|
Governmental
Entity
|
3.8(a)
|
|
Hazardous
Materials
|
3.13(b)
|
|
Intellectual
Property Rights
|
3.15(a)
|
|
IRS
|
3.9
|
|
Key
Customers
|
3.17
|
|
Key
Suppliers
|
3.17
|
|
Knowledge
of Parent
|
8.10
|
|
Knowledge
of the Company
|
8.10
|
|
Law
|
8.10
|
|
Liens
|
3.2(b)
|
|
Material
Adverse Change
|
2.3
|
|
Material
Adverse Effect
|
2.3
|
|
Merger
|
Recitals
|
|
Merger
Consideration
|
1.5(c)
|
|
NASDAQ
|
3.5(f)
|
|
Net
Cash Amount
|
8.10
|
|
Notice
Period
|
4.2(e)
|
|
OGCA
|
1.1
|
|
Order
|
8.10
|
|
Parent
|
Introduction
|
|
Parent
Letter
|
2.3
|
|
Person
|
8.10
|
|
Prepaid
Expense Amount
|
8.10
|
|
Proxy
Statement
|
5.2
|
|
Receivables
|
3.25
|
|
Release
|
3.13(b)
|
|
Representatives
|
4.2(a)
|
|
Xxxxxxxx-Xxxxx
Act
|
3.5(b)
|
|
SEC
|
3.3
|
|
Shareholder
Agreements
|
Recitals
|
|
Shareholder
Meeting
|
5.1
|
|
Sub
|
Introduction
|
|
Subsidiary
|
2.3
|
|
Superior
Proposal
|
4.2(g)
|
|
Surviving
Corporation
|
1.1
|
|
Takeover
Proposal
|
4.2(g)
|
|
Tax
Return
|
3.9(e)
|
|
Taxes
|
3.9(e)
|
|
Third
Party
|
4.2(g)(iii)
|
|
Transaction
Expense Amount
|
8.10
|
|
Transfer
Taxes
|
5.7
|
|
Transmittal
Letter
|
1.6(b)
|
|
WARN
Act
|
3.14(b)
|
|
Worker
Safety Laws
|
3.13(a)
|
vi
AGREEMENT
AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER, dated as of September 13, 2010 (this “Agreement”), among
ITT Corporation, an Indiana corporation (“Parent”), Oyster
Acquisition Corp., an Oklahoma corporation and a direct wholly owned subsidiary
of Parent (“Sub”), and O.I.
Corporation, an Oklahoma corporation (the “Company”) (Sub and
the Company being hereinafter collectively referred to as the “Constituent
Corporations”).
WITNESSETH:
WHEREAS,
the respective Boards of Directors of Sub and the Company have approved and
declared advisable the merger of Sub with and into and the Company (the “Merger”), upon the
terms and subject to the conditions set forth herein, whereby each issued and
outstanding share of common stock, $0.10 par value, of the Company (“Company Common
Stock”) not owned directly or indirectly by Parent or the Company will be
converted into the right to receive the Merger Consideration (as hereinafter
defined);
WHEREAS,
the respective Boards of Directors of Sub and the Company have determined that
the Merger is in furtherance of and consistent with their respective long-term
business strategies and is in the best interest of their respective
shareholders; and
WHEREAS,
in order to induce Parent and Sub to enter into this Agreement, concurrently
with the execution and delivery of this Agreement the directors and certain
shareholders of the Company are entering into agreements (the “Shareholder
Agreements”), substantially in the form attached hereto as Exhibit A, pursuant
to which, among other things, each such Person has agreed to vote in favor of
this Agreement and the Merger.
NOW,
THEREFORE, in consideration of the premises, representations, warranties and
agreements herein contained, the parties agree as follows:
ARTICLE
I
THE
MERGER
Section
1.1 The
Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the Oklahoma General Corporation Act
(the “OGCA”),
Sub shall be merged with and into the Company at the Effective Time (as
hereinafter defined). Following the Merger, the separate corporate
existence of Sub shall cease and the Company shall continue as the surviving
corporation (the “Surviving
Corporation”) and shall succeed to and assume all the rights and
obligations of Sub in accordance with the OGCA. Notwithstanding
anything to the contrary herein, at the election of Parent, any direct wholly
owned Subsidiary (as hereinafter defined) of Parent may be substituted for Sub
as a constituent corporation in the Merger; provided that such
substituted corporation is an Oklahoma corporation which is formed solely for
the purpose of engaging in the transactions contemplated by this Agreement and
has engaged in no other business activities. In such event, the
parties agree to execute an appropriate amendment to this Agreement, in form and
substance reasonably satisfactory to Parent and the Company, in order to reflect
such substitution.
Section
1.2 Effective
Time. The Merger shall become effective when a certificate of
merger (the “Certificate of
Merger”), executed in accordance with the relevant provisions of the
OGCA, is filed with the Secretary of State of the State of Oklahoma; provided, however, that, upon
mutual consent of the Constituent Corporations, the Certificate of Merger may
provide for a later date of effectiveness of the Merger not more than 30 days
after the date the Certificate of Merger is filed. When used in this
Agreement, the term “Effective Time” shall
mean the date and time at which the Certificate of Merger is accepted for
recording or such later time established by the Certificate of
Merger. The filing of the Certificate of Merger shall be made on the
date of the Closing (as hereinafter defined).
Section
1.3 Effects
of the Merger. The Merger shall have the effects set forth in
this Agreement and in Section 1088 of the OGCA.
Section
1.4 Charter and Bylaws;
Directors and Officers.
(a) At
the Effective Time, the Articles of Incorporation of the Company (the “Company Charter”), as
in effect immediately prior to the Effective Time, shall be amended so that
Article V reads in its entirety as follows: “The total number of
shares of all classes of capital stock which the Corporation shall have
authority to issue is 1,000 shares of Common Stock, $0.10 par
value.” As so amended, the Company Charter shall be the Certificate
of Incorporation of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable Law. At the Effective
Time, the Bylaws of Sub, as in effect immediately prior to the Effective Time,
shall be the Bylaws of the Surviving Corporation until thereafter changed or
amended as provided therein or in the Certificate of Incorporation of the
Surviving Corporation.
(b) The
directors and officers of Sub at the Effective Time shall be the directors and
officers of the Surviving Corporation, until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified, as
the case may be.
Section
1.5 Conversion of
Securities. At the Effective Time, by virtue of the Merger and
without any action on the part of Sub, the Company or the holders of any
securities of the Constituent Corporations:
(a) Each
issued and outstanding share of common stock, $0.01 par value, of Sub shall be
converted into one validly issued, fully paid and nonassessable share of common
stock of the Surviving Corporation.
(b) All
shares of Company Common Stock that are held in the treasury of the Company or
by any wholly owned Subsidiary of the Company and any shares of Company Common
Stock owned by Parent or any wholly owned Subsidiary of Parent shall be
canceled, and no consideration shall be delivered in exchange
therefor.
(c) Subject
to the provisions of Section 1.13, each
share of Company Common Stock issued and outstanding immediately prior to the
Effective Time (other than Dissenting Shares (as hereinafter defined) and shares
to be canceled in accordance with Section 1.5(b)) shall
be converted into the right to receive $[12], in cash and without
interest (the “Merger
Consideration”). Each such share, when so converted, shall no
longer be outstanding and shall automatically be canceled and retired, and each
holder of a certificate representing any such shares shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration in respect of each such share upon the surrender of such
certificate in accordance with Section
1.6.
2
(d) Notwithstanding
anything in this Agreement to the contrary, shares of Company Common Stock
issued and outstanding immediately prior to the Effective Time which are held of
record by shareholders who shall not have voted such shares in favor of the
Merger and who shall have demanded properly in writing appraisal of such shares
in accordance with Section 1091 of the OGCA (“Dissenting Shares”)
shall not be converted into the right to receive the Merger Consideration as set
forth in Section
1.5(c), but the holders thereof instead shall be entitled to, and the
Dissenting Shares shall only represent the right to receive, payment of the fair
value of such shares in accordance with the provisions of Section 1091 of the
OGCA; provided,
however, that
(i) if such a holder fails to demand properly in writing from the Surviving
Corporation the appraisal of his shares in accordance with Section 1091 of the
OGCA or, after making such demand, subsequently delivers an effective written
withdrawal of such demand, or fails to establish his entitlement to appraisal
rights as provided in Section 1091 of the OGCA, if so required, or (ii) if a
court shall determine that such holder is not entitled to receive payment for
his shares or such holder shall otherwise lose his appraisal rights, then, in
any such case, each share of Company Common Stock held of record by such holder
or holders shall automatically be converted into and represent only the right to
receive the Merger Consideration as set forth in Section 1.5(c), upon
surrender of the certificate or certificates representing such Dissenting
Shares. The Company shall give Parent and Sub prompt notice of any
demands received by the Company for appraisal of such shares, and Parent and Sub
shall have the right to participate in all negotiations and proceedings with
respect to such demands except as required by applicable Law. The
Company shall not, except with the prior written consent of Parent, make any
payment with respect to any demands for fair value for Dissenting Shares or
offer to settle, settle or negotiate in respect of any such
demands. Any cash paid in respect of Dissenting Shares shall be paid
by the Company solely with its own funds, and the Company shall not be
reimbursed therefor by Parent or any of its Subsidiaries, either directly or
indirectly.
Section
1.6 Exchange
Agent.
(a) As
of the Effective Time, Parent shall designate, and enter into an agreement with,
a bank or trust company, or with another Person reasonably acceptable to the
Company, to act as exchange agent in the Merger (the “Exchange Agent”),
which agreement shall provide that Parent shall deposit with the Exchange Agent
as of the Effective Time cash sufficient to effect the payment of the Merger
Consideration to which holders of shares of Company Common Stock are entitled
pursuant to Section 1.5(c)
(the “Exchange
Fund”).
(b) Parent
shall request the Exchange Agent to, promptly after the Effective Time, mail to
each holder of record of a certificate or certificates (collectively, the “Certificates”)
representing shares of Company Common Stock issued and outstanding immediately
prior to the Effective Time (collectively, the “Company
Shareholders”) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon actual delivery thereof to the Exchange Agent and shall contain
instructions for use in effecting the surrender of such Certificates in exchange
for the consideration specified in Section 1.5(c) (the
“Transmittal
Letter”)). Upon surrender for cancellation to the Exchange
Agent of all Certificates held by any Company Shareholder, together with the
Transmittal Letter, duly executed, such Company Shareholder shall be entitled to
receive the Merger Consideration in exchange for each share of Company Common
Stock represented by such Certificates, and any Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of
Company Common Stock that is not registered in the transfer records of the
Company, payment may be made to a Person other than the Person in whose name the
Certificate so surrendered is registered, if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the Person requesting
such payment shall pay any transfer or other Taxes required by reason of the
payment to a Person other than the registered holder of such Certificate or
establish to the satisfaction of Parent that such Tax has been paid or is not
applicable.
3
Section
1.7 Withholding. Parent
and the Surviving Corporation shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement (including Sections 1.5(c) and
1.12(a)) to any
Person such amounts as Parent or the Surviving Corporation is required to deduct
and withhold with respect to the making of such payment under the Internal
Revenue Code of 1986, as amended (the “Code”), or under any
provision of state, local or foreign tax Law. To the extent that
amounts are so withheld by Parent or the Surviving Corporation, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the Person who otherwise would have received the payment in respect of which
such deduction and withholding was made by Parent or the Surviving
Corporation.
Section
1.8 Return
of Exchange Fund. Any portion of the Exchange Fund that
remains undistributed by the Exchange Agent to the Company Shareholders for 180
days after the Effective Time shall be delivered to Parent, upon demand of
Parent, and any such Company Shareholders who have not theretofore complied with
this Article I
shall thereafter look only to Parent for payment of the consideration specified
in Section 1.5
to which they are entitled. None of the Exchange Agent, Parent or the
Surviving Corporation shall be liable to any former holder of Company Common
Stock for any consideration payable in accordance with this Article I which is
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
Section
1.9 No
Further Ownership Rights in Company Common Stock. All cash
paid upon the surrender for exchange of Certificates in accordance with the
terms hereof shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Company Common Stock.
Section
1.10 Closing of
Company Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed, and no transfer of shares of
Company Common Stock shall thereafter be made on the records of the
Company. If, after the Effective Time, Certificates are presented to
the Surviving Corporation, Parent or the Exchange Agent, such Certificates shall
be canceled and exchanged as provided in this Article
I.
Section
1.11 Lost
Certificates. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required by
Parent or the Exchange Agent, the posting by such Person of a bond, in such
amount as Parent or the Exchange Agent may direct as indemnity against any claim
that may be made against Parent, the Surviving Corporation or the Exchange Agent
with respect to such Certificate, Parent will pay or cause to be paid in
exchange for such lost, stolen or destroyed Certificate the consideration to
which the holder thereof is entitled pursuant to Section
1.5.
4
Section
1.12 Company Stock
Options.
(a) All
outstanding Company Stock Options heretofore granted under any Company Stock
Plan, whether or not then exercisable or vested, shall cease to represent, as of
the Effective Time, a right to acquire shares of Company Common Stock and shall
be converted, in settlement and cancellation thereof, into the right to receive,
at the Effective Time, a lump sum cash payment, without interest, by the
Surviving Corporation of an amount equal to the product of (i) the excess, if
any, of (A) the Merger Consideration plus the per share amount of the Closing
Dividend over (B) the exercise price per share of Company Common Stock subject
to such Company Stock Option, multiplied by (ii) the number of shares of Company
Common Stock for which such Company Stock Option shall not theretofore have been
exercised.
(b) The
Company shall take all action necessary under the Company Stock Purchase Plan to
provide that: (i) no new subscription contract shall be submitted
after the date of this Agreement; (ii) all options under the Company Stock
Purchase Plan outstanding as of the date of this Agreement shall be exercised,
to the extent of any accumulated payroll deductions as of the exercise date, on
the earlier to occur of (A) last day of the calendar quarter pending as of the
date of this Agreement and (B) a date that is at least five (5) business days
prior the Effective Time; and (iii) the Company Stock Purchase Plan shall be
terminated effective immediately prior to the Effective Time.
(c) Effective
at or before the Effective Time, the Company Stock Plans and all awards
thereunder shall terminate, and all rights under any provision of any other
plan, program or arrangement providing for the issuance or grant of any other
interest with respect to the capital stock or other equity interests of the
Company or any of its Subsidiaries shall be canceled, without any liability on
the part of the Company or any of its Subsidiaries (except as otherwise
expressly provided in this Agreement).
(d) From
and after the Effective Time, no Person shall have any right under the Company
Stock Plans or under any other plan, program, agreement or arrangement with
respect to equity interests of the Company or any of its Subsidiaries (except as
otherwise expressly provided in this Agreement).
(e) Not
later than immediately prior to the Effective Time, the Board of Directors of
the Company or any committee thereof administering the Company Stock Plans shall
adopt all resolutions necessary to provide for the foregoing, and the Company
shall take any other action necessary to effect the foregoing. As
soon as reasonably practicable after the Effective Time, the Surviving
Corporation shall pay the holders of Company Stock Options the cash payments
specified in this Section
1.12. No interest shall be paid or accrue on cash payments to
holders of Company Stock Options. The Company shall cooperate with
Parent, and keep Parent fully informed, with respect to all resolutions, actions
and consents that the Company intends to adopt, take and obtain in connection
with the matters described in this Section
1.12. Without limiting the foregoing, the Company shall
provide Parent with a reasonable opportunity to review and comment on all such
resolutions and consents and shall not undertake any obligation in connection
with any such resolution, action or consent without the prior written consent of
Parent.
5
Section
1.13 Certain
Adjustments. If, between the date of this Agreement and the
Effective Time, (a) the outstanding shares of Company Common Stock shall be
increased, decreased, changed into or exchanged for a different number of shares
or different class, in each case, by reason of any reclassification,
recapitalization, stock split, split-up, combination or exchange of shares, (b)
a stock dividend or dividend payable in any other securities of the Company
shall be declared with a record date within such period, (c) any other
securities of the Company shall be declared with a record date within such
period or (d) any similar event shall have occurred, then the Merger
Consideration shall be appropriately adjusted to provide the holders of shares
of Company Common Stock (and Company Stock Options) the same economic effect as
contemplated by this Agreement prior to such event.
Section
1.14 Further
Assurances. If at any time after the Effective Time the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation its right, title or interest in, to or under any of
the rights, privileges, powers, franchises, properties or assets of either of
the Constituent Corporations, or (b) otherwise to carry out the purposes of this
Agreement, the Surviving Corporation and its proper officers and directors or
their designees shall be authorized to execute and deliver, in the name and on
behalf of either of the Constituent Corporations, all such deeds, bills of sale,
assignments and assurances and to do, in the name and on behalf of either
Constituent Corporation, all such other acts and things as may be necessary,
desirable or proper to vest, perfect or confirm the Surviving Corporation’s
right, title or interest in, to or under any of the rights, privileges, powers,
franchises, properties or assets of such Constituent Corporation and otherwise
to carry out the purposes of this Agreement.
Section
1.15 Closing; Closing
Deliveries.
(a) The
closing of the transactions contemplated by this Agreement (the “Closing”) and all
actions specified in this Agreement to occur at the Closing shall take place at
the offices of Sidley Austin LLP, 0 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, at
10:00 a.m., local time, no later than the Closing Trigger Date or at such other
time and place as Parent and the Company shall agree (the date and time on which
the Closing actually occurs is referred to herein as the “Closing
Date”).
(b) For
purposes of this Agreement, “Closing Trigger Date”
means the later of (x) the second business day following the day on
which the last of the conditions set forth in Article VI (other
than those conditions that by their nature are to be satisfied at the Closing,
but subject to the fulfillment or waiver of those conditions) shall have been
fulfilled or waived (if permissible) in accordance with this Agreement, or (y)
the business date (which date shall not be later than the tenth business day
following the day on which the last of the conditions set forth in Article VI (other
than those conditions that by their nature are to be satisfied at the Closing,
but subject to the fulfillment or waiver of those conditions) shall have been
fulfilled or waived (if permissible) in accordance with this Agreement)
specified by the Company in a notice to Parent, in form and substance reasonably
satisfactory to Parent to the effect that the Company expects to be able to
declare and pay the Closing Dividend immediately prior to the Closing if the
Closing is delayed to such date. Such notice to Parent may not be delivered on
or after the day on which the last of the conditions set forth in Article VI (other
than those conditions that by their nature are to be satisfied at the Closing,
but subject to the fulfillment or waiver of those conditions) shall have been
fulfilled or waived (if permissible) in accordance with this
Agreement.
6
(c) Subject
to fulfillment or waiver of the conditions set forth in Article VI, at the
Closing Parent shall deliver to the Company a certificate of the Secretary or an
Assistant Secretary of Parent, dated the Closing Date, in form and substance
reasonably satisfactory to the Company, as to the incumbency and signatures of
the officers of Parent executing this Agreement and any other agreement,
certificate or instrument executed by Parent hereunder.
(d) Subject
to fulfillment or waiver of the conditions set forth in Article VI, at the
Closing Sub shall deliver to the Company all of the following:
(i) a
copy of the Certificate of Incorporation of Sub certified as of a recent date by
the Secretary of State of the State of Oklahoma;
(ii) a
certificate of good standing of Sub, issued as of a recent date by the Secretary
of State of the State of Oklahoma; and
(iii) a
certificate of the Secretary or an Assistant Secretary of Sub, dated the Closing
Date, in form and substance reasonably satisfactory to the Company, as to (A) no
amendments to the Certificate of Incorporation of Sub since a specified date,
(B) the Bylaws of Sub, (C) the resolutions of the Board of Directors of Sub
authorizing the execution and performance of this Agreement and the transactions
contemplated herein, (D) the written consent of Parent in its capacity as sole
shareholder of Sub adopting this Agreement in accordance with 1081 of the OGCA
and (E) the incumbency and signatures of the officers of Sub executing this
Agreement and any other agreement, certificate or instrument executed by Sub
hereunder.
(e) Subject
to fulfillment or waiver of the conditions set forth in Article VI, at the
Closing the Company shall deliver to Parent all of the following:
(i) a
copy of the Company Charter, certified as of a recent date by the Secretary of
State of the State of Oklahoma;
(ii) a
certificate of good standing of the Company, issued as of a recent date by the
Secretary of State of the State of Oklahoma;
(iii) certificate
of the Secretary or an Assistant Secretary of the Company, dated the Closing
Date, in form and substance reasonably satisfactory to Parent, as to (A) no
amendments to the Company Charter since a specified date, (B) the Bylaws of the
Company (the “Company
Bylaws”), (C) the resolutions of the Board of Directors of the Company
authorizing the execution and performance of this Agreement and the transactions
contemplated herein, (D) the resolutions of the shareholders of the Company
approving and adopting this Agreement in accordance with Section 1081 of the
OGCA and (E) the incumbency and signatures of the officers of the Company
executing this Agreement and any other agreement, certificate or instrument
executed by the Company hereunder; and
7
(iv) all
consents, waivers or approvals obtained by the Company with respect to the
consummation of the transactions contemplated by this Agreement.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF PARENT AND SUB
Parent
and Sub represent and warrant to the Company as follows:
Section
2.1 Organization, Standing and
Power. Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Indiana and has the
requisite corporate power and authority to carry on its business as now being
conducted. Sub is a corporation duly organized, validly existing and
in good standing under the laws of the State of Oklahoma and has the requisite
corporate power and authority to carry on its business as now being
conducted.
Section
2.2 Authority. On
or prior to the date of this Agreement, the Board of Directors of Sub has
determined that this Agreement and the transactions contemplated hereby,
including the Merger, are advisable and fair to and in the best interest of Sub
and Parent, as the sole shareholder of Sub, has approved and adopted this
Agreement and the transactions contemplated hereby, including the Merger, in
accordance with the OGCA. Each of Parent and Sub has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Parent and Sub, and the consummation by Parent and Sub of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action on the part of Parent and Sub, subject to the filing of the
Certificate of Merger as required by the OGCA. This Agreement has
been duly executed and delivered by Parent and Sub and, assuming the valid
authorization, execution and delivery of this Agreement by the Company and the
validity and binding effect hereof on the Company, this Agreement constitutes
the valid and binding obligation of Parent and Sub enforceable against each of
them in accordance with its terms, except to the extent its enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting the enforcement of creditors’
rights generally and by the effect of general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at
law).
8
Section
2.3 Consents and Approvals; No
Violation. Assuming that all consents, approvals,
authorizations and other actions described in this Section 2.3 have been
obtained and all filings and obligations described in this Section 2.3 have been
made, the execution and delivery of this Agreement by Parent and Sub, do not,
and the consummation of the transactions contemplated hereby and compliance with
the provisions hereof by Parent and Sub will not, result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give to
others a right of termination, cancellation or acceleration of any obligation
under, or result in the loss of a benefit under, or result in the creation of
any Lien upon any of the properties or assets of Parent or Sub under, any
provision of (i) the Articles of Incorporation, as amended, of Parent or the
Bylaws, as amended, of Parent or the Certificate of Incorporation or Bylaws of
Sub, (ii) any material Contract applicable to Parent or any of its Subsidiaries
or any of their respective properties or assets or (iii) any Order or Law
applicable to Parent or any of its Subsidiaries or any of their respective
properties or assets, other than, in the case of clause (iii), any such
violations, defaults, rights or Liens that would not, individually or in the
aggregate, have a Material Adverse Effect on Parent or materially impair the
ability of Parent or Sub to perform their respective obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby by
Parent or Sub. No notification to, filing or registration with, or
authorization, consent or approval of, any Person is required by or with respect
to Parent or Sub in connection with the execution and delivery of this Agreement
by Parent or Sub or is necessary for the consummation by Parent or Sub of the
Merger and the other transactions contemplated by this Agreement, except for (I)
in connection, or in compliance, with the provisions of the Securities Exchange
Act of 1934 (together with the rules and regulations promulgated thereunder, the
“Exchange
Act”), (II) the filing of the Certificate of Merger with the Secretary of
State of the State of Oklahoma and appropriate documents with the relevant
authorities of other states in which the Company or any of its Subsidiaries is
qualified to do business, (III) such filings as may be required in connection
with Taxes described in Section 5.7, and (IV)
such other notifications, consents, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would not,
individually or in the aggregate, be adverse, in any material respect, to Parent
or Sub (including by impairing, in any material respect, the ability of Parent
or Sub to conduct its business) or materially impair the ability of Parent or
Sub to perform its obligations hereunder or prevent the consummation of any of
the transactions contemplated hereby by Parent or Sub.
For
purposes of this Agreement, “Material Adverse
Change” or “Material Adverse
Effect” means, when used with respect to Parent or the Company, as the
case may be, any event, occurrence, fact, condition, change, development or
effect that individually or when taken together with all other such events,
occurrences, facts, conditions, changes, developments or effects is or would
reasonably be expected to be materially adverse to the business, assets,
liabilities, condition (financial or otherwise) or results of operations of
Parent and its Subsidiaries, taken as a whole, or the Company and its
Subsidiaries, taken as a whole, as the case may be, other than, in each case,
any event, occurrence, fact, condition, change, development or effect arising
out of or resulting from (i) general economic conditions or changes in financial
markets (but only, with respect to the Company, to the extent that the Company
and its Subsidiaries are not adversely affected in a disproportionate manner
relative to other participants in the industries in which the Company and its
Subsidiaries operate), (ii) conditions in or affecting the industries in which
the Parent and its Subsidiaries or the Company and its Subsidiaries, as the case
may be, operate generally (but only, with respect to the Company, to the extent
that the Company and its Subsidiaries are not adversely affected in a
disproportionate manner relative to other participants in the industries in
which the Company and its Subsidiaries operate), (iii) any change, in and of
itself, in the trading price or trading volume of the Company’s Common Stock
after the date of this Agreement (provided, however, that this
clause (iii) shall not exclude any underlying event occurrence, fact, condition,
change, development or effect that may have caused such change in market price),
(iv) the announcement or the existence of, or compliance with, or taking any
action required by this Agreement or the transactions contemplated hereby, (v)
any action taken at the written request of Parent or Sub, (vi) the adoption,
implementation, promulgation, repeal, modification or amendment, in each case
after the date of this Agreement, of any Law (but only, with respect to the
Company, to the extent that the Company and its Subsidiaries are not adversely
affected in a disproportionate manner relative to other participants in the
industries in which the Company and its Subsidiaries operate) or (vii) the
commencement, occurrence or continuation of any war, armed hostilities or acts
of terrorism involving or affecting the United States of America or any part
thereof (but, only with respect to the Company, to the extent that the Company
and its Subsidiaries are not adversely affected in a disproportionate manner
relative to other participants in the industries in which the Company and its
Subsidiaries operate). For purposes of this Agreement, “Subsidiary” means any
corporation, partnership, limited liability company, joint venture, trust,
association or other entity of which Parent or the Company, as the case may be
(either alone or through or together with any other Subsidiary), owns, directly
or indirectly, 50% or more of the stock or other equity interests the holders of
which are generally entitled to vote for the election of the Board of Directors
or other governing body of such corporation, partnership, limited liability
company, joint venture or other entity.
9
Section
2.4 Litigation. There
are no actions, suits, claims, demands, labor disputes or other litigation,
legal, administrative or arbitration proceedings or governmental investigations
(“Actions”)
pending or, to the Knowledge of Parent, threatened against or affecting Parent
or any of its Subsidiaries or, to the Knowledge of Parent, any of its or their
present or former officers, directors, employees, consultants, agents or
shareholders, as such, or any of its or their properties, assets or business, in
each case relating to the transactions contemplated by this
Agreement.
Section
2.5 Brokers. Except
as set forth in Section 2.5 of the
letter dated the date hereof and delivered on the date hereof by Parent to the
Company, which letter relates to this Agreement and is designated therein as the
Parent Letter (the “Parent Letter”), no
broker, investment banker or other Person is entitled to any broker’s, finder’s
or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent or Sub.
Section
2.6 Operations of
Sub. Sub is a direct, wholly owned subsidiary of Parent, was
formed solely for the purpose of engaging in the transactions contemplated
hereby, has engaged in no other business activities and has conducted its
operations only as contemplated hereby.
Section
2.7 Proxy
Statement. None of the information supplied or to be supplied
in writing by or on behalf of Parent or Sub specifically for inclusion or for
incorporation by reference in the Proxy Statement will, at the time it is so
supplied, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading. If at the time of the mailing of the Proxy Statement
and at the time of the Shareholder Meeting, any such information contains any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not misleading, Parent
will notify the Company accordingly.
10
Section
2.8 Financing. Parent
has sufficient cash and/or available credit facilities to pay the aggregate
Merger Consideration in accordance with this Agreement and to make all other
necessary payments of fees and expenses required to be paid by Parent and Sub in
connection with the transactions contemplated by this Agreement.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
(i) as disclosed in any Company SEC Document that is a report on Form 10-K, Form
10-Q, Form 8-K or a definitive proxy statement on Schedule 14A filed with the
SEC in 2010 and prior to the date of this Agreement (excluding any risk factor
disclosures contained under the heading “Risk Factors,” any disclosure of risks
included in any “forward-looking statements” disclaimer or any other statements
that are similarly predictive or forward-looking in nature); provided, however, that any
disclosures in such Company SEC Documents that are the subject of this clause
(i) shall be deemed to qualify a representation or warranty only if the
relevance of such disclosure to such representation or warranty is readily
apparent from the text of such disclosure; provided, further, that the
disclosures in the Company SEC Documents shall not be deemed to qualify any
representations or warranties made in Section 3.2, or (ii)
as set forth in the letter dated the date hereof and delivered on the date
hereof by the Company to Parent, which letter relates to this Agreement, is
designated the Company Letter (the “Company Letter”) and
is arranged in numbered and lettered sections corresponding to the numbered and
lettered sections contained in this Article III, and the
disclosure of any item in any section or subsection of the Company Letter shall
be deemed to qualify or apply to other sections in this Article III to the
extent (and only to the extent) that the relevance of such disclosure to such
other sections in this Article III is
readily apparent from the text of such disclosure, the Company represents and
warrants to Parent and Sub as follows:
Section
3.1 Organization, Standing and
Power. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Oklahoma and has
the requisite corporate power and authority to carry on its business as now
being conducted. Each Subsidiary of the Company is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate (in the case of a Subsidiary that
is a corporation) or other entity power and authority to carry on its business
as now being conducted. The Company and each of its Subsidiaries are
duly qualified to do business, and are in good standing, in each jurisdiction
where the character of their properties owned or held under lease or the nature
of their activities makes such qualification or good standing necessary, except
where the failure to be so qualified and in good standing would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company.
11
Section
3.2 Capital
Structure.
(a) The
authorized capital stock of the Company consists of 10,000,000 shares of Company
Common Stock and 3,000,000 shares of preferred stock, $0.10 par
value. At the close of business on September 13, 2010: (i)
4,103,377 shares of Company Common Stock were issued and outstanding, all of
which were validly issued, fully paid and nonassessable and free of preemptive
rights; (ii) 1,741,749 shares of Company Common Stock were held in the treasury
of the Company or by Subsidiaries of the Company; (iii) an aggregate of 134,500
shares of Company Common Stock were reserved for issuance pursuant to
outstanding options (the “Company Stock
Options”) to purchase shares of Company Common Stock pursuant to (A) the
Company’s 1993 Incentive Compensation Plan and (B) the Company’s 2003 Incentive
Compensation Plan (collectively, the “Company Stock Option
Plans”); and (iv) not more than 1,750 shares of Company Common Stock will
be issued after the date of this Agreement pursuant to the Company’s Employee
Stock Purchase Plan (the “Company Stock Purchase
Plan” and, together with the Company Stock Option Plans, the “Company Stock
Plans”). No shares of the Company’s preferred stock are issued
and outstanding. The Company Stock Option Plans and the Company Stock
Purchase Plan are the only benefit plans of the Company or any of its
Subsidiaries under which any securities of the Company or any of its
Subsidiaries are issuable. Each share of Company Common Stock which
may be issued pursuant to any Company Stock Option Plan or the Company Stock
Purchase Plan has been duly authorized and, if and when issued pursuant to the
terms thereof, will be validly issued, fully paid and nonassessable and free of
preemptive rights. Except as set forth above, no shares of capital
stock or other voting securities of the Company are issued, reserved for
issuance or outstanding. Except for the Company Stock Options, there
are no options, warrants, calls, rights, puts or Contracts to which the Company
or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound obligating the Company or any of its Subsidiaries to
issue, deliver, sell or redeem or otherwise acquire, or cause to be issued,
delivered, sold or redeemed or otherwise acquired, any shares of capital stock
(or other voting securities or equity equivalents) of the Company or any of its
Subsidiaries or obligating the Company or any of its Subsidiaries to grant,
extend or enter into any such option, warrant, call, right, put or
Contract. The Company does not have any outstanding bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or convertible into or exercisable for securities having the right to
vote) with the shareholders of the Company on any matter. Other than
the Shareholder Agreements, there are no Contracts to which the Company, any of
its Subsidiaries or any of their respective officers or directors is a party
concerning the voting of any capital stock of the Company or any of its
Subsidiaries. For purposes of this Agreement, “Contract” means any
contract, agreement, instrument, guarantee, indenture, note, bond, mortgage,
permit, franchise, concession, commitment, lease, license, arrangement,
obligation or understanding, whether written or oral.
(b) Section
3.2(b) of Company Letter sets forth the name, jurisdiction of incorporation and
the number of issued and outstanding shares of capital stock (or other voting
securities or equity interests as the case may be) of each Subsidiary of the
Company. All of the outstanding shares of capital stock (or other
voting securities or equity interests as the case may be) of each Subsidiary of
the Company are duly authorized, validly issued, fully paid and nonassessable,
and all such shares (or other voting securities or equity interests as the case
may be) are owned by the Company free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, limitations on voting
rights, charges and other encumbrances of any nature whatsoever (“Liens”). Except
as set forth in Section 3.2(b) of the Company Letter, neither Company nor any
Subsidiary of the Company directly or indirectly (i) owns, of record or
beneficially, any outstanding voting securities or other equity interests in any
Person or (ii) has the power to direct or cause the direction of the management
and policies of any Person, whether through the ownership of voting securities,
by contract or otherwise.
12
Section
3.3 Authority. On
or prior to the date of this Agreement, the Board of Directors of the Company
has (i) determined that this Agreement and the transactions contemplated hereby,
including the Merger, are advisable and fair to and in the best interests of the
Company and its shareholders, (ii) approved this Agreement and the transactions
contemplated hereby, including the Merger, in accordance with the OGCA, (iii)
approved the Shareholder Agreements, (iv) resolved to recommend the approval and
adoption of this Agreement by the Company’s shareholders and (v) directed that
this Agreement be submitted to the Company’s shareholders for approval and
adoption. The Company has all requisite corporate power and authority
to enter into this Agreement and, subject to approval of this Agreement by the
shareholders of the Company, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of the
Company, subject to (x) approval and adoption of this Agreement by the
shareholders of the Company and (y) the filing of appropriate merger documents
as required by the OGCA. This Agreement has been duly executed and
delivered by the Company and, assuming the valid authorization, execution and
delivery of this Agreement by Parent and Sub and the validity and binding effect
of this Agreement on Parent and Sub, this Agreement constitutes the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except to the extent enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by the effect of general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law). The filing of the Proxy Statement
with the Securities and Exchange Commission (the “SEC”) has been duly
authorized by the Company’s Board of Directors. The Company has
delivered to Parent complete and correct copies of the Company Charter and
Company Bylaws and the Articles of Incorporation and Bylaws (or similar
organizational documents) of each of its Subsidiaries.
Section
3.4 Consents and Approvals; No
Violation. Assuming that all consents, approvals,
authorizations and other actions described in this Section 3.4 have been
obtained and all filings and obligations described in this Section 3.4 have been
made, except as set forth in Section 3.4 of the Company Letter, the execution
and delivery of this Agreement by the Company do not, and the consummation of
the transactions contemplated hereby and compliance with the provisions hereof
by the Company will not, result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give to others a right of
termination, cancellation or acceleration of any obligation under, or result in
the loss of a benefit under, or result in the creation of any Lien upon any of
the properties or assets of the Company or any of its Subsidiaries under, any
provision of (i) the Company Charter or the Company Bylaws, (ii) the Articles of
Incorporation or Bylaws (or similar organizational documents) of any of the
Company’s Subsidiaries, (iii) any material Company Contract or (iv) any Order or
Law applicable to the Company or any of its Subsidiaries or any of their
respective properties or assets. No notification to, filing or
registration with, or authorization, consent or approval of, any Person is
required by or with respect to the Company or any of its Subsidiaries in
connection with the execution and delivery of this Agreement by the Company or
is necessary for the consummation by the Company of the Merger and the other
transactions contemplated by this Agreement, except for (I) in connection, or in
compliance, with the provisions of the Exchange Act, (II) the filing of the
Certificate of Merger with the Secretary of State of the State of Oklahoma and
appropriate documents with the relevant authorities of other states in which the
Company or any of its Subsidiaries is qualified to do business, (III) such
filings as may be required in connection with Taxes described in Section 5.7 and (IV)
such other notifications, consents, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would not,
individually or in the aggregate, be adverse, in any material respect, to the
Company or any of its Subsidiaries (including by impairing, in any material
respect, the ability of the Company or any of its Subsidiaries to conduct its
business) or materially impair the ability of the Company to perform its
obligations hereunder or prevent the consummation of any of the transactions
contemplated hereby.
13
Section
3.5 SEC
Documents, Other Reports and Xxxxxxxx-Xxxxx.
(a) The
Company has timely filed with the SEC all documents required to be filed by it
under the Securities Act or the Exchange Act since January 1, 2007 (the “Company SEC
Documents”). As of their respective filing dates or, if
amended, as of the date of the last amendment prior to the date hereof, the
Company SEC Documents complied in all material respects with the requirements of
the Securities Act of 1933 or the Exchange Act, as the case may be, and, at the
respective times they were filed, none of the Company SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. The consolidated financial statements (including, in each
case, any notes thereto) of the Company included in the Company SEC Documents
(the “Financial
Statements”) complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with U.S. generally accepted
accounting principles (“GAAP”) (except, in
the case of the unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto) and fairly presented in all material
respects the consolidated financial position of the Company and its Subsidiaries
as at the respective dates thereof and the results of their operations and their
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments and to any other adjustments
described therein). Except as disclosed in the Company SEC Documents
filed with the SEC prior to the date hereof or as required by GAAP, since
January 1, 2007, the Company has not made or adopted any change in its
accounting methods, practices or policies in effect on January 1,
2007.
(b) The
principal executive officer and principal financial officer of the Company (or
each former principal executive officer and former principal financial officer
of Company, as applicable) has made all certifications required under Sections
302 and 906 of the Xxxxxxxx-Xxxxx Act of 2002 and the related rules and
regulations promulgated thereunder or under the Exchange Act (the “Xxxxxxxx-Xxxxx Act”)
with respect to the Company SEC Documents and, at the time of filing of each
such certification, such certification was true and accurate in all material
respects. The Company has made available to Parent a summary of any
disclosure made by the Company’s management to the Company’s auditors and the
audit committee of the Company’s Board of Directors referred to in such
certifications. For purposes of this Section 3.5(b),
“principal executive officer” and “principal financial officer” shall have the
meanings ascribed to such terms in the Xxxxxxxx-Xxxxx Act.
14
(c) The
Company has established and maintains a system of internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange
Act) sufficient to provide reasonable assurance (i) that the Company
maintains records that, in reasonable detail, accurately and fairly reflect the
respective transactions and dispositions of assets of the Company and its
Subsidiaries, (ii) that transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP, (iii) that receipts
and expenditures are being made only in accordance with authorizations of
management and the Board of Directors of the Company and (iv) regarding
prevention or timely detection of the unauthorized acquisition, use or
disposition of the Company’s and its Subsidiaries’ assets that could have a
material effect on the Company’s financial statements. The Company’s
management has completed an assessment of the effectiveness of the Company’s
internal control over financial reporting and, to the extent required by
applicable Law, presented in any applicable Company SEC Document that is a
report on Form 10-K or Form 10-Q or any amendment thereto its conclusions about
the effectiveness of the internal control over financial reporting as of the end
of the period covered by such report or amendment based on such
evaluation. As of their respective filing dates or, if amended, as of
the date of the last amendment prior to the date hereof, to the extent required
by applicable Law, the Company has disclosed, in any applicable Company SEC
Document that is a report on Form 10-K or Form 10-Q or any amendment thereto,
any change in the Company’s internal control over financial reporting that
occurred during the period covered by such report or amendment that has
materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting. The Company has disclosed,
based on the most recent evaluation of internal control over financial
reporting, to the Company’s auditors and the audit committee of the Company’s
Board of Directors (x) all significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting that are
reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information and (y) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the Company’s internal control over financial reporting.
(d) The
Company has established and maintains disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) to ensure that
all information (both financial and non-financial) required to be disclosed by
the Company in the reports that it files or furnishes under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the SEC, and that all such information is accumulated
and communicated to the Company’s management as appropriate to allow timely
decisions regarding disclosure and to make the certifications required pursuant
to Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act. The Company’s
management has completed an assessment of the effectiveness of the Company’s
disclosure controls and procedures and, as of their respective filing dates or,
if amended, as of the date of the last amendment prior to the date hereof, to
the extent required by applicable Law, presented in any applicable Company SEC
Document that is a report on Form 10-K or Form 10-Q or any amendment thereto its
conclusions about the effectiveness of the disclosure controls and procedures as
of the end of the period covered by such report or amendment based on such
evaluation.
(e) No
accounting rule, opinion, standard, consensus or pronouncement applicable to the
Company or any of its Subsidiaries has been finally adopted and not subsequently
withdrawn by the SEC, the Financial Accounting Standards Board, the Emerging
Issues Task Force, the Public Company Accounting Oversight Board or any similar
body that the Company or any of its Subsidiaries is required to implement
(whether currently or after a prescribed transition period) but has not yet
implemented as of the date of this Agreement and that, if so implemented, would
reasonably be expected to have a Material Adverse Effect on the
Company.
15
(f) The
Company is in compliance in all material respects with (i) the applicable
provisions of the Xxxxxxxx-Xxxxx Act and (ii) the applicable listing and
corporate governance rules and regulations of The NASDAQ Global Market (“NASDAQ”). Except
as permitted by the Exchange Act, including Sections 13(k)(2) and 13(k)(3),
since the enactment of the Xxxxxxxx-Xxxxx Act, neither the Company nor any of
its Affiliates has made, arranged or modified personal loans to any executive
officer or director of the Company.
Section
3.6 Proxy
Statement. None of the information to be included or
incorporated by reference in the Proxy Statement (other than information with
respect to Parent or Sub supplied in writing by Parent to the Company expressly
for inclusion in the Proxy Statement) will, at the time of the
mailing of the Proxy Statement and at the time of the Shareholder Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. If at any time prior to the Shareholder Meeting any event
shall occur which is required at that time to be described in the Proxy
Statement, such event shall be so described, and an appropriate amendment or
supplement shall be promptly filed with the SEC and, as required by Law,
disseminated to the shareholders of the Company. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act.
Section
3.7 Absence
of Certain Changes or Events; No Undisclosed
Liabilities.
(a) Except
as disclosed in Section 3.7(a) of the Company Letter, since December 31,
2009: (i) the Company and its Subsidiaries have conducted their
businesses, in all material respects, in the ordinary course consistent with
past practice; (ii) the Company and its Subsidiaries have not sustained any loss
or interference with their business or properties from fire, flood, windstorm,
accident or other calamity (whether or not covered by insurance) that has,
individually or in the aggregate, had a Material Adverse Effect on the Company;
(iii) there has not been any action taken or committed to be taken by the
Company or any of its Subsidiaries which, if taken following entry by the
Company into this Agreement, would have required the consent of Parent pursuant
to Section 4.1;
and (iv) there has been no event, occurrence, fact, condition, effect, change or
development which, individually or in the aggregate, has had or would reasonably
be expected to have, a Material Adverse Change with respect to the
Company.
(b) Neither
the Company nor any of its Subsidiaries has any debts, liabilities, commitments
or obligations of any nature (whether accrued or fixed, absolute or contingent,
matured or unmatured, direct or indirect, known or unknown, asserted or
unasserted), except (i) liabilities and obligations reflected or reserved
against in the balance sheet of the Company dated June 30, 2010 included in the
Form 10-Q filed by the Company with the SEC on August 16, 2010 (or described in
the notes thereto), (ii) liabilities and obligations incurred since June 30,
2010 in the ordinary course of business consistent with past practice not in
excess of $50,000 individually and (iii) liabilities and obligations incurred in
connection with this Agreement or the transactions contemplated
hereby.
16
Section
3.8 Permits;
Compliance with
Laws.
(a) Each
of the Company and its Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, charters, easements, variances, exceptions,
consents, certificates, approvals and orders of any domestic (federal and
state), foreign or supranational court, commission, governmental body,
regulatory agency, authority or tribunal (a “Governmental Entity”)
that are necessary for the Company or any of its Subsidiaries to own, lease and
operate its properties or to carry on its business as it is now being conducted
(the “Company
Permits”), and no suspension or cancellation of any of the Company
Permits is pending or, to the Knowledge of the Company, threatened, except where
the failure to be in possession or the suspension or cancellation of any of the
Company Permits would not, individually or in the aggregate, be adverse, in any
material respect, to the Company or any of its Subsidiaries (including by
impairing, in any material respect, the ability of the Company or any of its
Subsidiaries to conduct its business) or materially impair the ability of the
Company to perform its obligations hereunder or prevent the consummation of any
of the transactions contemplated hereby. Section 3.8(a) of the
Company Letter sets forth a list of each Company Permit.
(b) Neither
the Company nor any of its Subsidiaries is in violation of (i) its Certificate
of Incorporation or Bylaws (or similar organizational documents), (ii) any
applicable Law or (iii) any Order, except, in the case of clauses (ii) and
(iii), for any violations that would not, individually or in the aggregate, be
adverse, in any material respect, to the Company or any of its Subsidiaries
(including by impairing, in any material respect, the ability of the Company or
any of its Subsidiaries to conduct its business) or materially impair the
ability of the Company to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby. No
notice of any such violation or non-compliance has been received by the Company
or any of its Subsidiaries.
(c) None
of the Company, any of its Subsidiaries, any of their respective directors or
officers or, to the Knowledge of the Company, any of their respective employees,
consultants, contractors or agents have committed (or taken any action to
promote or conceal) any violation of any Law relating to procurement, the Arms
Export Control Act, the International Traffic in Arms Regulations, the Atomic
Energy Act of 1954, Executive Order 12958 (April 17, 1995), Executive Order
12829 (January 6, 1993), Executive Order 13292 (March 25, 2003), and directives
and policies issued pursuant thereto, including the National Industrial Security
Program Operating Manual.
17
Section
3.9 Tax
Matters. Except as set forth in Section 3.9 of the Company
Letter: (i) the Company and its Subsidiaries have filed all federal,
and all material state, local and foreign, Tax Returns required to have been
filed, and such Tax Returns are correct and complete in all material respects
and disclose in all material respects all Taxes required to be paid by the
Company and its Subsidiaries for the periods covered thereby; (ii) all Taxes
shown to be due on such Tax Returns have been timely paid in all material
respects; (iii) the Company and its Subsidiaries have complied in all
material respects with all rules and regulations relating to the withholding of
Taxes; (iv) the Tax Returns referred to in clause (i) relating to federal and
state income Taxes have been examined by the applicable Governmental Entity or
the period for assessment of the Taxes in respect of which such Tax Returns were
required to be filed has expired; (v) no material issues that have been raised
in writing by the relevant Governmental Entity in connection with the
examination of the Tax Returns referred to in clause (i) are currently pending;
(vi) all material deficiencies asserted or assessments made as a result of any
examination of such Tax Returns by any Governmental Entity have been paid in
full; (vii) neither the Company nor any of its Subsidiaries has any material
liability for Taxes of any other person as successor, by contract, or otherwise;
(viii) neither the Company nor any of its Subsidiaries has waived in writing any
statute of limitations in respect of Taxes; (ix) there is no action, suit,
investigation, audit, claim or assessment pending or proposed or threatened in
writing with respect to Taxes of the Company or any of its Subsidiaries; (x)
there has not been any material income or gain of the Company (or any
predecessor) or any of its Subsidiaries (or any predecessor) deferred pursuant
to Treasury Regulation §§ 1.1502-13 or -14, or any similar or predecessor
Treasury Regulation, whether proposed, temporary or final; (xi) during the past
three years, neither the Company nor any of its Subsidiaries has been a
distributing or controlled corporation in a transaction intended to qualify for
tax-free treatment under Section 355 of the Code; (xii) no withholding is
required under Section 1445 of the Code in connection with the Merger or any of
the other transactions contemplated hereby; (xiii) during the last five years,
neither the Company nor any of its Subsidiaries has been a party to any
so-called “listed transaction” within the meaning of Treasury
Regulation 1.6011-4(b)(2) identified by the Internal Revenue Service
(“IRS”); (xiv) during
the most recently ended ten taxable years (and during the period since the end
of the most recently ended taxable year), and to the Knowledge of the Company
during any prior period, neither the Company nor any of its Subsidiaries (nor
any predecessor of the Company or any of its Subsidiaries) has for income tax
purposes filed Tax Returns on a consolidated, combined, unitary or similar basis
with any group of corporations other than a group consisting solely of the
Company and its Subsidiaries; (xv) during the most recently ended five taxable
years (and during the period since the end of the most recently ended taxable
year) no Subsidiary of the Company organized under the Laws of a jurisdiction
outside the United States (and, with respect to the Company or any of its
Subsidiaries, no predecessor thereof organized under the Laws of a jurisdiction
outside the United States) has been acquired from any third party (directly or
indirectly) by the Company or any of its Subsidiaries; and (xvi) no stock
transfer Taxes, sales Taxes, use Taxes, real estate transfer Taxes or other
similar Taxes will be imposed on the transactions contemplated by this
Agreement. For purposes of this Agreement: (A) “Taxes”
means: (I) any federal, state, local or foreign net income, gross
income, gross receipts, windfall profit, severance, property, production, sales,
use, license, excise, franchise, employment, payroll, withholding, alternative
or add-on minimum, ad valorem, value-added, transfer, stamp or environmental
(including taxes under Section 59A of the Code) tax, or any other tax, custom,
duty, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty, addition to tax or additional
amount imposed by any governmental authority; and (II) any liability of the
Company or any of its Subsidiaries for the payment of amounts with respect to
payments of a type described in clause (I) as a result of being a member of an
affiliated, consolidated, combined or unitary group, or as a result of any
obligation of the Company or any of its Subsidiaries under any Tax indemnity
arrangement or any written or unwritten arrangement for the allocation or
payment of Tax liabilities or payment for Tax benefits with respect to a
consolidated, combined or unitary Tax Return which Tax Return includes or has
included the Company or any of its Subsidiaries; and (B) “Tax Return” means any
return, report or similar statement (including the attached schedules) required
to be filed with respect to any Tax, including any information return, claim for
refund, amended return or declaration of estimated Tax.
18
Section
3.10 Litigation. Except
as set forth in the Company SEC Documents filed prior to the date of this
Agreement and except as set forth in Section 3.10 of the Company Letter, there
are, and since January 1, 2007 there have been, no outstanding Orders of any
Governmental Entity against or involving the Company or any of its Subsidiaries
or, to the Knowledge of the Company, against or involving any of the present or
former directors, officers, employees or consultants, agents or shareholders of
the Company or any of its Subsidiaries as such, or any of its or their
properties, assets or business or any Company Plan (as hereinafter defined) that
would, individually or in the aggregate, be adverse, in any material respect, to
the Company or any of its Subsidiaries (including by impairing, in any material
respect, the ability of the Company or any of its Subsidiaries to conduct its
business) or materially impair the ability of the Company to perform its
obligations hereunder or prevent the consummation of any of the transactions
contemplated hereby. Except as set forth in the Company SEC Documents
filed prior to the date of this Agreement or in Section 3.10 of the Company
Letter, there are, and since January 1, 2007 there have been, no Actions pending
or, to the Knowledge of the Company, threatened against or involving the Company
or any of its Subsidiaries or, to the Knowledge of the Company, any of its or
their present or former directors, officers, employees or consultants, agents or
shareholders as such, or any of its or their properties, assets or business or
any Company Plan (a) that would, individually or in the aggregate, be adverse,
in any material respect, to the Company or any of its Subsidiaries (including by
impairing, in any material respect, the ability of the Company or any of its
Subsidiaries to conduct its business) or materially impair the ability of the
Company to perform its obligations hereunder or prevent the consummation of any
of the transactions contemplated hereby or (b) relating to the transactions
contemplated by this Agreement.
Section
3.11 Certain
Agreements.
(a) Except
as set forth in Section 3.11(a) of the Company Letter, neither the Company nor
any of its Subsidiaries is a party to or bound by:
(i) any
Contract which is a “material contract” (as such term is defined in Item
601(b)(10) of Regulation S-K under the Exchange Act);
(ii) any
Contract which purports to materially limit or restrict the manner or localities
in which the Company or any of its Affiliates (including Parent or any of its
Subsidiaries following the Merger) may conduct business, or any Contract which
obligates the Company or any of its Affiliates (including Parent or any of its
Subsidiaries following the Merger) to extend most-favored nation pricing to any
Person, or any Contract imposing exclusivity obligations on the Company or any
of its Affiliates (including Parent or any of its Subsidiaries following the
Merger) with respect to customers or suppliers or imposing obligations on the
Company or any of its Affiliates (including Parent or any of its Subsidiaries
following the Merger) with respect to non-solicitation provisions with respect
to customers or suppliers;
19
(iii) any
Contract which requires any payment by the Company or any of its Subsidiaries in
excess of $50,000 in any year or $100,000 in the aggregate and which is not
terminable within one year without penalty, or which requires any payment to the
Company or any of its Subsidiaries in excess of $50,000 in any year or $100,000
in the aggregate and which is not terminable within one year without
penalty;
(iv) any
Contract relating to or guaranteeing indebtedness for borrowed
money;
(v) any
Contract of indemnification or any guaranty by the Company or any of its
Subsidiaries other than any Contract entered into in connection with the sale or
license by the Company or any of its Subsidiaries of products or services in the
ordinary course of business;
(vi) any
Contract to provide source code to any third party for any product or technology
that is material to the Company and its Subsidiaries, taken as a
whole;
(vii) any
Contract, other than standard end-user license and sale Contracts and related
maintenance and support Contracts entered into in the ordinary course of
business, that (A) grants to any third party a license to use, manufacture or
reproduce any product, service or Intellectual Property Right of the Company or
any of its Subsidiaries, (B) grants to the Company or any of its Subsidiaries a
license to use, manufacture or reproduce any product, service or Intellectual
Property Right of a third party or (C) permits any third party to sell,
distribute or market any product, service or Intellectual Property Right of the
Company or any of its Subsidiaries;
(viii) since
January 1, 2005, any Contract relating to the acquisition or disposition of any
business (whether by merger, sale or purchase of stock or assets or
otherwise);
(ix) any
settlement Contract which materially affects the conduct of the Company’s or any
of its Subsidiaries’ businesses; or
(x) any
other Contract that is material to the business, assets, liabilities, financial
condition or results of operations of the Company and its Subsidiaries, taken as
a whole.
The
Company has previously made available to Parent complete and correct copies of
each Contract of the type described in this Section 3.11 which
was entered into on or prior to the date hereof. All Contracts of the
type described in this Section 3.11 or Section 3.16 shall be
referred to as “Company Contracts”
regardless of whether they were entered into before or after the date
hereof.
(b) All
of the Company Contracts are valid and in full force and effect (except those
which are cancelled, rescinded or terminated after the date hereof in accordance
with their terms). To the Knowledge of the Company, no Person is
challenging the validity or enforceability of any Company
Contract. Neither the Company nor any of its Subsidiaries and, to the
Knowledge of the Company, none of the other parties thereto, is in breach of any
provision of, or committed or failed to perform any act which (with or without
notice or lapse of time or both) would constitute a default under the provisions
of, any Company Contract.
20
Section
3.12 ERISA.
(a) Each
Company Plan is listed in Section 3.12(a) of the Company Letter. With
respect to each Company Plan, the Company has delivered to Parent a true and
correct copy of (i) the three (3) most recent annual reports (Form 5500) filed
with the IRS, (ii) each such Company Plan that has been reduced to writing and
all amendments thereto, (iii) each trust, insurance or administrative Contract
relating to each such Company Plan, (iv) a written summary of each unwritten
Company Plan, (v) the most recent summary plan description and summary of
material modifications or other written explanation of each Company Plan
provided to participants, (vi) the most recent determination letter, if
any, issued by the IRS with respect to any Company Plan intended to be qualified
under Section 401(a) of the Code, (vii) any request for a determination
currently pending before the IRS and (viii) all correspondence with the
IRS, the Department of Labor, the SEC or Pension Benefit Guaranty Corporation
relating to any outstanding controversy, investigation or audit. Each
Company Plan has been operated and administered in all material respects in
accordance with its terms and the Employee Retirement Income Security Act of
1974 (“ERISA”),
the Code and any other applicable Law. All material contributions
required to be made to each Company Plan and Employee Agreement have been timely
made and all material obligations in respect of each Company Plan and Employee
Agreement have been properly accrued and reflected on the Company’s financial
statements. None of the Company, any of its Subsidiaries or any of
their respective ERISA Affiliates currently maintains, contributes to or has any
liability under or, at any time in the past has maintained, contributed to or
had any liability under, any pension plan which is subject to Section 412 of the
Code or Section 302 of ERISA or Title IV of ERISA. None of the
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
currently maintains, contributes to or has any liability under or, at any time
in the past has maintained, contributed to or had any liability under, any
Company Multiemployer Plan (as hereinafter defined).
(b) No
event or set of circumstances has occurred and, to the Knowledge of the Company,
except as would not reasonably be expected to result in a material liability to
the Company and its Subsidiaries taken as a whole, no condition exists, in
connection with which the Company, any of its Subsidiaries or any of their
respective ERISA Affiliates or any Company Plan fiduciary could be subject to
any liability under the terms of such Company Plans, ERISA, the Code or any
other applicable Law. All Company Plans that are intended by their
terms to be, or are otherwise treated by the Company as, qualified under Section
401(a) of the Code and their related trusts have been the subject of
determination letters from the IRS to the effect that such Company Plans are so
qualified, or a timely application for such determination is now pending and the
Company is not aware of any reason any such Company Plan is not so qualified in
operation. No Company Plan has been amended since the date of its
most recent determination letter or application therefor in any respect that
would adversely affect its qualification or materially increase its
costs. Except as set forth in Section 3.12(b) of the Company Letter,
none of the Company, any of its Subsidiaries or any of their respective ERISA
Affiliates has any liability or obligation under any welfare plan or Contract to
provide benefits after termination of employment to any employee or dependent
other than as required by Section 4980B of the Code or similar
Law. None of the Company, any of its Subsidiaries or any of their
respective ERISA Affiliates has any liability for a failure to comply with
Section 4980B of the Code or Part 6 of Subtitle B of Title I of
ERISA.
21
(c) For
purposes of this Agreement: (i) “Company Plan” means a
“pension plan” (as defined in Section 3(2) of ERISA (other than a Company
Multiemployer Plan)), a “welfare plan” (as defined in Section 3(1) of ERISA) or
any bonus, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, equity or equity-based incentive,
phantom stock, directors’ compensation, holiday pay, vacation, severance, death
benefit, sick leave, fringe benefit, insurance or other plan, arrangement or
understanding, in each case established or maintained by the Company, any of its
Subsidiaries or any of their respective ERISA Affiliates or as to which the
Company, any of its Subsidiaries or any of their respective ERISA Affiliates has
contributed or otherwise may have any liability; (ii) “Company Multiemployer
Plan” means a “multiemployer plan” (as defined in Section 4001(a)(3) of
ERISA) to which the Company, any of its Subsidiaries or any of their respective
ERISA Affiliates is or has been obligated to contribute or otherwise may have
any liability; and (iii) “ERISA Affiliate”
means, with respect to any Person, any trade or business (whether or not
incorporated) which is under common control or would be considered a single
employer with such Person pursuant to Section 414(b), (c), (m) or (o) of the
Code and the rules and regulations promulgated under those sections or pursuant
to Section 4001(b) of ERISA and the rules and regulations promulgated
thereunder.
(d) Section
3.12(d) of the Company Letter contains a complete and correct list, and the
Company has heretofore provided to Parent a complete and correct copy, of all
(i) Employee Agreements, (ii) material consulting Contracts to which the Company
or any of its Subsidiaries is a party, (iii) severance programs and policies of
the Company and each of its ERISA Affiliates with or relating to its employees
and (iv) plans, programs, Contracts and other arrangements of the Company and
each of its ERISA Affiliates with or relating to its current and former
employees containing change of control or similar provisions. For
purposes of this Agreement, “Employee Agreement”
means each management, employment, severance, termination, incentive
compensation, retention, consulting or other similar Contract between the
Company or any of its Subsidiaries and any current or former employee,
consultant, director or officer of the Company or any of its
Subsidiaries.
(e) None
of the Company, any of its Subsidiaries, any officer of the Company or of any of
its Subsidiaries or any of the Company Plans which are subject to ERISA, any
trusts created thereunder or any trustee or administrator thereof has engaged in
a “prohibited transaction” (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) or any other breach of fiduciary responsibility that
would reasonably be expected to result in a material liability to the Company
and its Subsidiaries taken as a whole.
(f) Any
arrangement of the Company or any of its Subsidiaries that is subject to Section
409A of the Code complies in form and in operation with Section 409A of the Code
in all material respects. Neither the Company nor any of
its Subsidiaries has any obligation to provide any gross-up payment to any
individual with respect to any income tax, additional tax or interest charge
imposed pursuant to Section 409A of the Code.
(g) With
respect to any Company Plan that is an employee welfare benefit plan, (i) no
such Company Plan is unfunded or funded through a “welfare benefits fund” (as
such term is defined in Section 419(e) of the Code) and (ii) each such Company
Plan that is a “group health plan” (as such term is defined in Section
5000(b)(1) of the Code), complies with the applicable requirements of Section
4980B(f) of the Code in all material respects.
22
(h) No
amount that could be received, whether in cash or property or the vesting of
property, as a result of the Merger or any other transaction contemplated hereby
by any employee, officer or director of the Company or any of its Affiliates who
is a “disqualified individual,” as such term is defined in Treasury Regulation
Section 1.280G-1, under any Company Plan or Employee Agreement, either alone or
together with any other event, could be characterized as a “parachute payment,”
as defined in Section 280G of the Code. Set forth in Section 3.12(h)
of the Company Letter is the estimated maximum amount that could be paid to each
employee, officer or director of the Company or any of its Subsidiaries as a
result of the Merger and the other transactions contemplated hereby, either
alone or together with any other event, under all Employee Agreements and
Company Plans.
(i) The
execution, delivery and performance by the Company of this Agreement do not, and
the consummation of the Merger and the other transactions contemplated hereby
and compliance with the terms hereof will not, (i) entitle any employee, officer
or director of the Company or any of its Subsidiaries to any severance,
transaction bonus, retention or other payment, (ii) except as required under
Section 1.12 of
this Agreement, accelerate the time of payment or vesting or trigger any payment
or funding, through a grantor trust or otherwise, of compensation or benefits
under, increase the amount payable or trigger any other material obligation
pursuant to, any Company Plan or Employee Agreement or (iii) result in any
breach or violation of, or a default under, any Company Plan or Employee
Agreement.
(j) Except
as set forth in Section 3.12(j) of the Company Letter, with respect to each
Company Plan not subject to United States Law (a “Company Foreign Benefit
Plan”), (i) the fair market value of the assets of each funded Company
Foreign Benefit Plan, the liability of each insurer for any Company Foreign
Benefit Plan funded through insurance or the reserve shown on the consolidated
financial statements of the Company included in the Company SEC Documents for
any unfunded Company Foreign Benefit Plan, together with any accrued
contributions, is sufficient to procure or provide for the projected benefit
obligations, as of the Effective Time, with respect to all current and former
participants in such plan based on reasonable, country specific actuarial
assumptions and valuations and no transaction contemplated by this Agreement
shall cause such assets or insurance obligations or book reserve to be less than
such projected benefit obligations and (ii) each Company Foreign Benefit Plan
required to be registered with a Governmental Entity has been registered, and
has been maintained in good standing with the appropriate Governmental Entity,
has been maintained and operated in all respects in accordance with its terms
and is in compliance with all applicable Law.
(k) Except
as set forth in Section 3.12(k) of the Company Letter, neither the Company nor
any of its Subsidiaries, with respect to employees outside of the United
States: (i) is under any legal liability other than as required under
statutorily required plans or programs, to pay pensions, gratuities,
superannuation allowances or the like to any past or present directors,
officers, employees or dependents of employees; (ii) has made ex-gratia or
voluntary payments by way of superannuation allowance or pension; or (iii)
maintains or has contemplated any pension schemes or arrangements for payment of
the pensions or death benefits or similar arrangements.
23
Section
3.13 Compliance with Worker
Safety Laws;
Environmental Matters.
(a) The
properties, assets and operations of the Company and each of its Subsidiaries
are in compliance in all material respects with all applicable federal, state,
local and foreign Laws, rules and regulations, Orders, permits and licenses
relating to public and worker health and safety (collectively, “Worker Safety
Laws”). With respect to such properties, assets and
operations, including any previously owned, leased or operated properties,
assets or operations, there are no events, conditions, circumstances,
activities, practices, incidents, actions or plans of the Company or any of its
Subsidiaries that would reasonably be expected to interfere with or prevent
compliance or continued compliance in all material respects with applicable
Worker Safety Laws. To the Knowledge of the Company, there are no
pending or proposed amendments to any Worker Safety Laws currently applicable in
any material respect to the operations of the Company or any of its
Subsidiaries.
(b) Other
than exceptions to any of the following that would not, individually or in the
aggregate, be adverse, in any material respect, to the Company or any of its
Subsidiaries (including by impairing, in any material respect, the ability of
the Company or any of its Subsidiaries to conduct its business) or materially
impair the ability of the Company to perform its obligations hereunder or
prevent the consummation of any of the transactions contemplated
hereby:
(i) Each
of the Company and its Subsidiaries possesses all Environmental Permits (as
hereinafter defined) necessary to conduct its businesses and operations as
currently conducted; neither the Company nor any of its Subsidiaries has
received any communication indicating that any such Environmental Permit may be
revoked, adversely modified or not re-issued, and to the Knowledge of the
Company there is no basis for any such revocation, adverse modification or
non-reissuance.
(ii) Each
of the Company and its Subsidiaries is in compliance with all applicable
Environmental Laws (as hereinafter defined) and all applicable Environmental
Permits, and has not violated any such Environmental Laws or Environmental
Permits.
(iii) Neither
the Company nor any of its Subsidiaries has received any (A) communication from
any Governmental Entity or other Person that alleges that the Company or any of
its Subsidiaries has violated or is liable under any Environmental Law or (B)
request for information pursuant to applicable Environmental Laws concerning the
Release (as hereinafter defined) of Hazardous Materials (as hereinafter defined)
or compliance with Environmental Laws.
(iv) There
are no Environmental Claims (as hereinafter defined) pending or, to the
Knowledge of the Company, threatened against the Company or any of its
Subsidiaries.
(v) Neither
the Company nor any of its Subsidiaries has entered into any consent decree,
agreement or order or is subject to any Order imposing any material liability or
requirement to investigate or clean up any Hazardous Materials under any
applicable Environmental Law.
24
(vi) There
have been no Releases of any Hazardous Materials at any Company Owned Real
Property or any Company Leased Real Property or, to the Knowledge of the
Company, at any other location that would reasonably be expected to form the
basis of any Environmental Claim against or affecting the Company or any of its
Subsidiaries.
All
reports, non-privileged memoranda and other similar documents concerning
environmental assessments, studies, compliance audits or other environmental
reviews, which contain material information relating to the Company or any of
its Subsidiaries and are in the possession or reasonably within the control of
the Company or any of its Subsidiaries, have been made available to
Parent.
For
purposes of this Agreement:
(A) “Environmental Claims”
means, in respect of any Person: (i) any and all administrative,
regulatory or judicial Actions, Orders, Liens or notices of noncompliance,
liability or violation by any Governmental Entity or other Person alleging
liability arising out of, based on or related to any Environmental Law,
including matters arising out of, based on or related to (x) the presence,
Release or threatened Release of, or exposure to, any Hazardous Materials at any
location, whether or not owned, operated, leased or managed by the Company or
any of its Subsidiaries, or (y) circumstances forming the basis of any violation
or alleged violation of, or liability or obligation under, any Environmental Law
or Environmental Permit; and (ii) any and all claims by any Person seeking
damages (including natural resource damages and restoration costs, investigation
costs, and attorney, expert and consultant costs and expenses), contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
the presence, Release or exposure to, any Hazardous Material;
(B) “Environmental Laws”
means all Laws, Orders, notices, government enforcement policies, common law,
judgments, treaties or binding agreements, as applicable, in each case issued
by, promulgated by or entered into with any Governmental Entity relating in any
way to pollution or protection of the environment (including ambient air, indoor
air, surface water, groundwater, soils, soil gas, land surface or subsurface
strata), the preservation or reclamation of natural resources, the protection of
human health as it relates to exposure to Hazardous Materials or the use,
generation, management, handling, transport, treatment, disposal, storage,
Release or threatened Release of Hazardous Materials;
(C) “Environmental
Permits” means all franchises, grants, authorizations, licenses, permits,
charters, easements, variances, exceptions, consents, certificates, approvals
and orders of any Governmental Entity arising under or relating to Environmental
Laws;
(D) “Hazardous Materials”
means any chemical, material, substance, waste, pollutant or contaminant (i)
that is or contains radioactive materials, asbestos-containing materials, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum
byproducts and derivatives (including fractions or constituents thereof) or
radon gas or (ii) that is prohibited, limited or regulated by or pursuant to any
Environmental Law or that is regulated, defined, listed or identified under any
Environmental Law as a “hazardous waste,” “hazardous substance,” “toxic
substance” or words of similar import thereunder; and
25
(E) “Release” means any
actual or threatened releasing, spilling, leaking, pumping, pouring, emitting,
discharging, escaping, leaching, dumping, disposing, dispersing, injecting,
depositing, emptying, seeping, placing, emanating or migrating in, into, onto or
through the environment (including ambient air, indoor air, surface water,
ground water, soils, soil gas, land surface or subsurface strata) or within any
building, structure, facility or fixture.
Section
3.14 Labor
Matters.
(a) Neither
the Company nor any of its Subsidiaries is a party to any collective bargaining
Contract or any labor Contract. Neither the Company nor any of its
Subsidiaries has engaged in any unfair labor practice or violated any state or
local labor, wage and hour or employment Laws practice with respect to any
Persons employed by or otherwise performing services primarily for the Company
or any of its Subsidiaries (the “Company Business
Personnel”), and there is no unfair labor practice complaint, grievance,
employment standards complaint, pay equity complaint, occupational health and
safety charge, claim or investigation of wrongful (including constructive)
discharge, employment and discrimination or retaliation, sexual harassment or
other Action pending or threatened in writing against the Company or any of its
Subsidiaries with respect to the Company Business Personnel, except where such
unfair labor practice complaint, grievance, charge, claim, investigation or
other Action would not, individually or in the aggregate, be adverse, in any
material respect, to the Company or any of its Subsidiaries (including by
impairing, in any material respect, the ability of the Company or any of its
Subsidiaries to conduct its business). There is no labor strike,
dispute, slowdown or stoppage pending or, to the Knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries which may
interfere with the respective business activities of the Company or any of its
Subsidiaries, except where such dispute, strike or work stoppage would not,
individually or in the aggregate, be adverse, in any material respect, to the
Company or any of its Subsidiaries (including by impairing, in any material
respect, the ability of the Company or any of its Subsidiaries to conduct its
business).
(b) The
Company and each of its Subsidiaries are and have been in compliance with the
requirements of the Workers Adjustment and Retraining Notification Act and all
similar state laws (the “WARN Act”) and have
no liabilities or unfulfilled notice obligations pursuant to the WARN
Act.
Section
3.15 Intellectual
Property.
(a) Except
as set forth in Section 3.15(a) of the Company Letter, the Company and its
Subsidiaries own or have a valid right to use all patents, trademarks, trade
names, service marks, domain names, copyrights and any applications and
registrations for any of the foregoing, trade secrets, know-how, technology,
computer software and other tangible and intangible proprietary information and
intellectual property rights (collectively, “Intellectual Property
Rights”), as are necessary to conduct the business of the Company and its
Subsidiaries as currently conducted by the Company and its
Subsidiaries. Following the Closing, the Company and its Subsidiaries
will continue to have all such Intellectual Property Rights. Neither
the Company nor any of its Subsidiaries has infringed, misappropriated or
violated in any material respect any Intellectual Property Rights of any third
party. To the Knowledge of the Company, no third party infringes,
misappropriates or violates, in any material respect, any Intellectual Property
Rights owned or exclusively licensed by or to the Company or any of its
Subsidiaries.
26
(b) Section
3.15(b) of the Company Letter contains a list as of the date hereof of (i) all
registered United States, state and foreign trademarks, service marks, logos,
trade dress and trade names and pending applications to register the foregoing,
(ii) all United States and foreign patents and patent applications, (iii) all
registered United States and foreign copyrights and pending applications to
register the same and (iv) all domain names, in each case owned by the Company
and its Subsidiaries. Except as set forth in Section 3.15(b) of the
Company Letter, all registrations for copyrights, patents and trademarks
identified therein are valid and in force, and all applications to register any
unregistered copyrights, patent rights and trademarks so identified are pending
and in good standing.
(c) Except
as set forth in Section 3.15(c) of the Company Letter, as of the date of this
Agreement, there are no Actions pending or, to the Knowledge of the Company,
threatened that challenge or question the Intellectual Property Rights of the
Company or any of its Subsidiaries.
(d) The
Company and its Subsidiaries have taken reasonable steps to maintain the
confidentiality of or otherwise protect and enforce their rights in all
Intellectual Property Rights owned by them (“Owned Intellectual Property
Rights”), and to protect and preserve through the use of customary
non-disclosure agreements the confidentiality of all confidential information
that is owned, used or held by the Company or any of its Subsidiaries in the
conduct of its business. To the Knowledge of Company, such
confidential information has not been used, disclosed to or discovered by any
Person except pursuant to valid and appropriate non-disclosure agreements which
have not been breached.
(e) All
personnel, including employees, agents, consultants and contractors, who have
contributed to or participated in the conception or development, or both, of the
Owned Intellectual Property Rights (i) have been and are a party to
“work-for-hire” arrangements with Company or a Subsidiary of the Company or (ii)
have assigned to Company or a Subsidiary of the Company all ownership of all
tangible and intangible property arising in connection with the conception or
development of such Owned Intellectual Property Rights.
(f) None
of the software of the Company or any of its Subsidiaries that is licensed
separately or incorporated into products of the Company or any of its
Subsidiaries incorporates or is based on, comprised of or distributed with any
publicly available free software or is otherwise subject to the provisions of
any “open source” or similar license agreement, except as would not,
individually or in the aggregate, be adverse, in any material respect, to the
Company or any of its Subsidiaries (including by impairing, in any material
respect, the ability of the Company or any of its Subsidiaries to conduct its
business) or materially impair the ability of the Company to perform its
obligations hereunder or prevent the consummation of any of the transactions
contemplated hereby.
27
Section
3.16 Properties and
Assets.
(a) The
Company or a Subsidiary of the Company has good and marketable title to or, in
the case of leased property and leased tangible assets, a valid leasehold
interest in, all of the Company’s and its Subsidiaries’ properties and assets,
including, the Company Owned Real Property and the Company Leased Real Property,
free and clear of all Liens, except those Liens for Taxes not yet due and
payable and such other Liens or minor imperfections of title, if any, that do
not detract, in any material respect, from the value or interfere
with the present use of the affected property or asset. Such
properties and assets, together with all properties and assets held by the
Company and its Subsidiaries under leases or licenses, include all tangible and
intangible property, assets, Contracts and rights necessary or required for the
operation of the business of the Company and its Subsidiaries as presently
conducted.
(b) Section
3.16(b) of the Company Letter sets forth a list and brief description of (i)
each parcel of real property owned by the Company or any Subsidiary of the
Company (the “Company
Owned Real
Property”) (showing the record title holder, legal description, permanent
index number, location, improvements, the uses being made thereof and any
indebtedness secured by a mortgage or other Lien thereon) and (ii) each option
held by the Company or any Subsidiary of the Company to acquire any
real property. The occupancy and use of the Company Owned Real
Property, as well as the management, maintenance, servicing and operation of the
Company Owned Real Property, comply in all material respects with all applicable
Laws; and all certificates of occupancy and all other Permits required by
applicable Laws for the proper use and operation of the Company Owned Real
Property are in full force and effect. The Company and its
Subsidiaries have fulfilled and performed in all material respects all of their
obligations under each of the Liens to which the Company Owned Real Property is
subject, and neither the Company nor any of its Subsidiaries is in breach or
default under, or in violation of or noncompliance with, any such Liens, and no
event has occurred and no condition or state of facts exists which, with the
passage of time or the giving of notice or both, would constitute such a breach,
default, violation or noncompliance. The consummation of the
transactions contemplated by this Agreement will not result in any breach or
violation of, default under or noncompliance with, or any forfeiture or
impairment of any rights under, any Lien to which the Company Owned Real
Property is subject, or require any consent, approval or act of, or the making
of any filing with, any Person party to or benefited by or possessing the power
or authority to exercise rights or remedies under or with respect to any such
Lien. All public utilities, including water, sewer, gas, electric,
telephone and drainage facilities, give adequate service to the Company Owned
Real Property, and the Company Owned Real Property has unlimited access to and
from publicly dedicated streets, the responsibility for maintenance of which has
been accepted by the appropriate Governmental Entity. To the
Knowledge of the Company, there are no material defects in the roof, foundation,
sprinkler mains, structural, mechanical and HVAC systems and masonry walls in
any of the improvements upon the Company Owned Real Property, and no significant
repairs thereof are required. Complete and correct copies of any
title opinions, surveys and appraisals in the Company’s possession or any
policies of title insurance currently in force and in the possession of the
Company with respect to each parcel of Company Owned Real Property have
previously been made available by the Company to Parent.
28
(c) Section 3.16(c) of the Company Letter sets forth
a list and brief description of each lease or similar agreement (showing the
parties thereto, annual rental, expiration date, renewal and purchase options,
if any, the improvements thereon, the uses being made thereof, and the location
and the legal description of the real property covered by such lease or other
agreement) under which (i) the Company or any Subsidiary of the
Company is lessee of, or holds or operates, any real property owned
by any third (the “Company Leased Real
Property”) or (ii) the Company or any Subsidiary of the Company is lessor
of any of the Company Owned Real Property. Except as set forth in
such Section, the Company has the right to quiet enjoyment of all the Company
Leased Real Property for the full term of the lease or similar agreement (and
any renewal option related thereto) relating thereto, and the leasehold or other
interest of the Company or any Subsidiary of the Company in the
Company Leased Real Property is not subject or subordinate to any Lien, except
for Liens for Taxes not yet due and payable. Complete and correct
copies of any title opinions, surveys and appraisals in the Company’s possession
or any policies of title insurance currently in force and in the possession of
the Company with respect to each parcel of Company Leased Real Property have
previously been made available by the Company to Parent.
(d) Neither
the whole nor any part of the Company Owned Real Property or the Company Leased
Real Property is subject to any pending suit for condemnation or other taking by
any Governmental Entity, and, to the Knowledge of the Company, no such
condemnation or other taking is threatened or contemplated.
Section
3.17 Key
Customers and Suppliers. Section
3.17 of the Company Letter sets forth a list for each of the twelve
months ended December 31, 2009 and the six (6) months ended June 30, 2010 of (a)
the top ten revenue producing customers of the Company and its Subsidiaries
(collectively, the “Key Customers”) and
(b) the top ten suppliers of the Company and its Subsidiaries (collectively, the
“Key
Suppliers”), including the amount of revenue received from each such Key
Customer and the amount of purchases from each such Key Supplier, in each case
for the twelve months ended December 31, 2009 and the six (6) months ended June
30, 2010. Since January 1, 2010 there has been no actual or, to the
Knowledge of the Company, threatened termination, cancellation or material
limitation of, or material modification or change in, the business relationship
of the Company or any of its Subsidiaries with any one or more of the Key
Customers or the Key Suppliers. To the Knowledge of the Company,
there exists no present condition or state of facts or circumstances involving
any Key Customer or Key Supplier and their relationships with the Company or any
of its Subsidiaries which would, individually or in the aggregate, be adverse,
in any material respect, to the Company or any of its Subsidiaries (including by
impairing, in any material respect, the ability of the Company or any of its
Subsidiaries to conduct its business after the consummation of the transactions
contemplated by this Agreement in essentially the same manner in which such
business has heretofore been conducted).
29
Section
3.18 Insurance. The
Company has provided to Parent prior to the date of this Agreement
copies of all insurance policies which are maintained by the Company or any of
its Subsidiaries or which names the Company or any of its Subsidiaries as an
insured (or loss payee), including those which pertain to the Company’s or any
of its Subsidiaries’ assets, employees or operations. All such insurance
policies are in full force and effect and all premiums due thereunder have been
paid. Neither the Company nor any of its Subsidiaries has received written
notice of cancellation of default under any such policy or written notice of any
pending or threatened termination or cancellation, coverage limitation or
reduction or material premium increase with respect to any such policy. Neither
the Company nor any of its Subsidiaries is in breach of, or default under, any
such insurance policy. There is no claim by the Company or any of its
Subsidiaries pending under any such insurance policy covering the assets,
business, equipment, properties, operations, employees, officers and directors
of the Company or any of its Subsidiaries as to which coverage has been
questioned, denied or disputed by the underwriters of such
policies.
Section
3.19 Absence of Certain
Payments. Since
January 1, 2005, none of the Company, any of its Subsidiaries, any of their
respective directors or officers or, to the Knowledge of the Company, any of
their respective agents or employees, or any other Person acting on behalf of
the Company or any of its Subsidiaries, has, directly or
indirectly: (i) used any of the funds of the Company or any of its
Subsidiaries for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity; (ii) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from the Company’s or any of its Subsidiaries’
funds; (iii) violated any provision of the Foreign Corrupt Practices Act of
1977; (iv) established or maintained any unlawful or unrecorded fund of the
monies or other assets of the Company or any of its Subsidiaries; (v) made any
false or fictitious entry on the books or records of the Company or any of its
Subsidiaries; or (vi) made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment, to any person or entity, private or public,
regardless of form, whether in money, property, or services, to obtain favorable
treatment in securing business or to obtain special concessions for the Company
or any of its Subsidiaries, or to pay for favorable treatment for business
secured or for special concessions already obtained for the Company or any of
its Subsidiaries.
Section
3.20 Related Party
Transactions. Except
for the transactions and arrangements set forth on Section 3.20 of the Company
Letter, no Related Party (i) has borrowed money from or loaned money to the
Company or any of its Subsidiaries that is currently outstanding or otherwise
has any cause of action or claim against the Company or any of its Subsidiaries,
(ii) has any ownership interest in any property or asset used by the Company or
any of its Subsidiaries in the conduct of its business or (iii) is a party to
any Contract or is engaged in any ongoing transaction or other relationship with
the Company or any of its Subsidiaries. For purposes of this
Agreement, “Related
Party” means any shareholder, director, officer or Affiliate of
the Company or any of its Subsidiaries, and if any such Person is a natural
person, any member of the immediate family of any such natural
person.
Section
3.21 Opinion of Financial
Advisor. The
Company has received the opinion of Blackhill Advisors, L.P., to the effect
that, as of the date hereof, the Merger Consideration is fair to the Company’s
shareholders from a financial point of view, a copy of which opinion has been
delivered to Parent.
Section
3.22 State
Takeover Statutes; Certain Charter Provisions. The
Company has taken all action
(including appropriate approvals of the Board of Directors of the Company)
necessary to exempt Parent, its Subsidiaries and Affiliates, the Merger, this
Agreement, the Shareholder Agreements and the transactions contemplated hereby
and thereby from the requirements of any “fair price,” “moratorium,” “control
share acquisition” statute or similar anti-takeover Law, or any takeover
provision in the Company Charter or the Company Bylaws.
30
Section
3.23 Required Vote of Company
Shareholders. The
affirmative vote of the holders of a majority of the outstanding shares of
Company Common Stock is required to approve and adopt this
Agreement. No other vote of the securityholders of the Company is
required by Law, the Company Charter, the Company Bylaws or otherwise in order
for the Company to consummate the Merger and the transactions contemplated
hereby.
Section
3.24 Brokers. No
broker, investment banker or other Person, other than Blackhill Advisors, L.P.,
the fees and expenses of which will be paid by the Company (as reflected in an
agreement between Blackhill Advisors, L.P. and the Company, dated August 11,
2010, a copy of which has been furnished to Parent, is entitled to any broker’s,
finder’s or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company.
Section
3.25 Accounts
Receivable. All
accounts receivable reflected on the Financial Statements (“Receivables”) result
from bona fide transactions with third parties. The Company and its
Subsidiaries have not received any written notice from or on behalf of any
account debtor asserting any defense to payment or right of setoff with respect
to any of the Receivables in excess of amounts reserved on the Financial
Statements.
ARTICLE
IV
COVENANTS
RELATING TO CONDUCT OF BUSINESS
Section
4.1 Conduct
of Business Pending the Merger. Except
as expressly permitted by paragraphs (a) through (bb) of this Section 4.1, during
the period from the date of this Agreement through the Effective Time, the
Company shall, and shall cause each of its Subsidiaries to, conduct its business
in the ordinary course of business consistent with past practice and, to the
extent consistent therewith, use commercially reasonable efforts to preserve
intact its current business organization, keep available the services of its
current officers and employees and preserve its relationships with material
customers, suppliers and others having material business dealings with
it. Without limiting the generality of the foregoing, and except as
otherwise expressly contemplated by this Agreement or as set forth in Section
4.1 of the Company Letter (with specific reference to the applicable subsection
below), the Company shall not, and shall not permit any of its Subsidiaries to,
without the prior written consent of Parent:
(a) (i) declare,
set aside or pay any dividends on, or make any other actual, constructive or
deemed distributions in respect of, any of its capital stock, or otherwise make
any payments to its shareholders in their capacity as such, other than dividends
or distributions from Subsidiaries of the Company to the Company, provided, that, prior
to the Closing, the Company may declare and, (A) continue to pay a quarterly
cash dividend of $0.05 per share of Company Common Stock on dates and in the
manner consistent with prior practice and (B) immediately prior to the Closing,
pay a one-time cash dividend of up to $0.50 per share of Company Common Stock
then outstanding (the “Closing Dividend”),
provided, further, that in no
event shall the payment of such Closing Dividend cause the Net Cash Amount as of
immediately prior to the Effective Time to be less than $4,145,000, (ii) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (iii) purchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its Subsidiaries or any
other securities thereof or any rights, warrants or options to acquire, any such
shares or other securities;
31
(b) authorize
for issuance, issue, deliver, sell, pledge, dispose of, grant, transfer or
otherwise encumber any shares of its capital stock, any other voting securities
or equity equivalent or any securities convertible into or exchangeable for, or
any rights, warrants or options to acquire, any such shares, voting securities,
equity equivalent or convertible or exchangeable securities, other than the
issuance of shares of Company Common Stock upon the exercise of Company Stock
Options outstanding on the date of this Agreement and pursuant to the Company
Stock Purchase Plan, in each case, in accordance with their current
terms;
(c) amend
its Certificate of Incorporation or Bylaws (or similar organizational
documents);
(d) acquire
or agree to acquire by merging or consolidating with, by purchasing a
substantial portion of the assets of or equity in or by any other manner, any
business or any corporation, limited liability company, partnership, association
or other business organization or division thereof or otherwise acquire, or
agree to acquire, any assets other than assets acquired in the ordinary course
of business consistent with past practice and not material to the Company and
its Subsidiaries, taken as a whole;
(e) sell,
transfer, lease, license (as licensor of Intellectual Property Rights of the
Company or any of its Subsidiaries), mortgage, pledge, encumber or otherwise
dispose of any of its properties or assets, other than sales, leases or licenses
of products or services in the ordinary course of business consistent with past
practice and not material to the Company and its Subsidiaries, taken as a
whole;
(f) (i)
incur, assume or modify any indebtedness for borrowed money, guarantee, endorse
or otherwise become liable or responsible for (whether directly, contingently or
otherwise) any such indebtedness or other obligations of another Person or make
any loans, advances or capital contributions to, or other investments in, any
other Person, other than indebtedness, loans, advances, capital contributions
and investments between the Company and its Subsidiaries, (ii) issue or sell any
debt securities or warrants or other rights to acquire any debt securities of
the Company or any of its Subsidiaries, (iii) enter into any “keep well” or
other agreement to maintain any financial statement condition of another Person
or (iv) enter into any arrangement having the economic effect of any of the
foregoing;
(g) alter
(through merger, liquidation, reorganization, restructuring or in any other
fashion) the corporate structure or ownership of the Company or any of its
Subsidiaries;
(h) enter
into any transaction, Contract, arrangement or understanding with any Related
Party (other than as expressly required by this Agreement);
32
(i)
(i) delay payment of any account payable of
the Company or any of its Subsidiaries more than ten (10) days beyond its due
date or the date when such account payable would have been paid in the ordinary
course of business consistent with past practice (other than as a result of a
good faith dispute with the payee or creditor), provided, that the
aggregate amount of accounts payable for which payment has been delayed for more
than ten (10) days shall not exceed more than ten percent (10%) of the aggregate
amount of the Company’s and its Subsidiaries’ accounts payable, (ii) request or
facilitate any payment of any account receivable of the Company or any of its
Subsidiaries prior to the due date, other than in the ordinary course of
business consistent with past practice or (iii) revalue any portion of the
assets, properties or business of the Company, including any write-down or
write-off of the value of inventory or other assets, other than in the ordinary
course of business consistent with past practice;
(j)
modify, amend, terminate, supplement
or permit the lapse of, in any material manner, any lease of, operating
agreement or other agreement relating to any Company Owned Real Property or
Company Leased Real Property (except for the lapse or termination of any lease
or agreement in accordance with its terms);
(k) enter
into any sale arrangement directly with a Person in an “embargoed country” or on
the “restricted or denied parties list,” as such terms are defined by the Export
Administration Regulations, that would be prohibited under applicable
Law;
(l)
allow any material Intellectual Property Rights to expire or
lapse;
(m) cancel
or terminate any insurance policy or cause any of the coverage thereunder to
lapse, unless simultaneously with such termination, cancellation or lapse,
replacement policies providing coverage equal to or greater than the coverage
under the cancelled, terminated or lapsed policies, for premiums not more than
the current market rates, are in full force and effect;
(n) enter
into, adopt, amend, terminate or waive any rights under any severance plan or
Contract, Company Plan (including the Company Stock Option Plans), Employee
Agreement or consulting Contract, except as required by applicable
Law;
(o) increase
the compensation or benefits payable or to become payable to its directors,
officers or employees or grant any severance or termination pay to, or enter
into or amend any employment or severance Contract with, any current or former
director or officer of the Company or any of its Subsidiaries, except, in case
of employees other than directors or officers, increases in base compensation in
the ordinary course of business consistent with the Company’s past practice in
connection with annual compensation reviews, or establish, adopt, enter into or,
except as may be required to comply with applicable Law, amend or take action to
enhance or accelerate any rights or benefits under, any collective bargaining
unit or any labor, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, Contract, trust, fund, policy or
arrangement for the benefit of any current or former director, officer or
employee;
(p) terminate
the employment of or hire any Person whose annual base compensation exceeded or
is reasonably expected to exceed $100,000;
(q) knowingly
violate or knowingly fail to perform any obligation or duty imposed upon the
Company or any of its Subsidiaries by any applicable federal, state or local
Law, rule, regulation, guideline or ordinance;
33
(r) make
or adopt any change to its accounting methods, practices, policies or procedures
(other than actions required to be taken by GAAP);
(s) except
as required by applicable Law, prepare or file any Tax Return inconsistent with
past practice or, on any such Tax Return, take any position, make any election
or adopt any method that is inconsistent with positions taken, elections made or
methods used in preparing or filing similar Tax Returns in prior
periods;
(t) except
as required by applicable Law, make any material tax election or settle or
compromise any material federal, state, local or foreign income tax
liability;
(u) (i)
enter into, amend, modify or terminate any Company Contract, (ii) waive, release
or assign any rights under any Company Contract or (iii) terminate, amend,
modify or waive any provision of, or release any other Person from, any
confidentiality, non-disclosure or similar agreement to which the Company or any
of its Subsidiaries is a party;
(v) enter
into or amend any Contract (i) that would, after the Effective Time, restrict
Parent or any of its Subsidiaries (including the Company or any of its
Subsidiaries) with respect to engaging in any line of business or in any
geographical area or (ii) that contains exclusivity, most favored nation pricing
or non-solicitation provisions with respect to any customer or
supplier;
(w) make
or agree to make any new capital expenditure or expenditures which,
individually, is in excess of $40,000 or, in the aggregate, are in excess of
$80,000;
(x) waive
or release any material right or claim or pay, discharge or satisfy any material
claims, liabilities or obligations (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 or in accordance
with their terms, of liabilities reflected or reserved against in the most
recent Company SEC Documents filed prior to the date hereof or incurred in the
ordinary course of business consistent with past practice;
(y) initiate,
settle or compromise any Action; provided, however, that the
Company may pay an amount not to exceed $50,000 to pay in full any amounts owed
or deemed to be owed in connection with the State of Texas sales tax
audit;
(z) enter
into any agreement or arrangement that would be required to be reported by the
Company pursuant to Item 404 of Regulation S-K promulgated by the
SEC;
(aa) take
any action that would reasonably be expected to, or omit to take any action
where such omission would reasonably be expected to, prevent, materially delay
or impede the consummation of the Merger or the other transactions contemplated
by this Agreement; or
(bb) authorize,
recommend, propose or announce an intention to do any of the foregoing or enter
into any Contract to do any of the foregoing.
34
Section
4.2 No
Solicitation.
(a) From
the date hereof until the earlier of the Effective Time or the date on which
this Agreement is terminated in accordance with the terms hereof, the Company
shall not, nor shall it permit any of its Subsidiaries to, nor shall it
authorize or permit any officer, director or employee of the Company or any of
its Subsidiaries, or any financial advisor, attorney or other advisor or
representative (“Representatives”) of
the Company or any of its Subsidiaries, to, directly or indirectly (i) solicit,
initiate or knowingly facilitate, induce or encourage the submission of any
Takeover Proposal (as hereinafter defined) or any proposal that could reasonably
be expected to lead to a Takeover Proposal, (ii) enter into any letter of
intent, agreement in principle or Contract providing for, relating to or in
connection with, any Takeover Proposal or any proposal that could reasonably be
expected to lead to a Takeover Proposal, (iii) enter into, continue or otherwise
participate in any discussions or negotiations with any Third Party with respect
to any Takeover Proposal or (iv) furnish to any Third Party any information
regarding the Company or any of its Subsidiaries, or afford access to the
properties, books and records of the Company or any of its Subsidiaries, to any
Third Party in connection with or in response to any Takeover Proposal; provided, however, that prior
to the Shareholder Meeting, nothing contained in this Agreement shall prevent
the Company or its Board of Directors from taking any of the actions described
in clauses (iii) and (iv) above in response to any unsolicited bona fide written
Takeover Proposal by such Third Party if, and only to the extent that, (1) such
Takeover Proposal would, if consummated, in the reasonable good faith judgment
of the Company’s Board of Directors be likely to result in a Superior Proposal, (2) in the reasonable good faith
judgment of the Board of Directors of the Company, after consultation with its
outside financial advisors, the Third Party making such Superior Proposal has
the financial means to conclude such transaction, (3) the failure to take such
action, in the reasonable good faith judgment of the Board of Directors
of the Company, after consultation with the outside corporate counsel of the
Company, would be inconsistent with the exercise of the fiduciary duties of the
Board of Directors of the Company to the Company’s shareholders under applicable
Law, (4) prior to furnishing such non-public information to, or entering into
discussions or negotiations with, such Third Party, the Board of Directors of
the Company receives from such Third Party an executed confidentiality agreement
with provisions not less favorable to the Company than those contained in the
Confidentiality Agreement (as hereinafter defined), (5) the Company shall have
provided to Parent in accordance with Section 4.2(b) all
materials and information required under Section 4.2(b) to be
delivered by the Company to Parent and (6) the Company shall have fully complied
with this Section
4.2.
(b) The
Company shall promptly, and in any event no later than twenty-four (24) hours
after it receives any Takeover Proposal, or any written request for information
regarding the Company or any of its Subsidiaries in connection with a Takeover
Proposal or any inquiry with respect to, or which could reasonably be expected
to lead to, any Takeover Proposal, advise Parent orally and in writing of such
Takeover Proposal or request, including providing the identity of the Third
Party making or submitting such Takeover Proposal or request, and (i) if it is
in writing, a copy of such Takeover Proposal and any related draft agreements
and other written material setting forth the material terms and conditions of
such Takeover Proposal and (ii) if oral, a reasonably detailed written summary
thereof that is made or submitted by any Third Party during the period between
the date hereof and the Closing. The Company shall keep Parent
informed in all material respects on a prompt basis of the status and details of
any such Takeover Proposal or with respect to any change to the material terms
of any such Company Takeover Proposal. The Company agrees that,
subject to restrictions under Laws applicable to the Company and its
Subsidiaries, it shall, prior to or concurrent with the time it is provided to
any Third Party, provide to Parent any non-public information concerning the
Company and its Subsidiaries that the Company provides to any Third Party in
connection with any Takeover Proposal which was not previously provided to
Parent.
35
(c)
Immediately following the execution of this Agreement, the Company agrees
that it and each of its Subsidiaries shall, and the Company shall direct its and
each of its Subsidiaries’ respective Representatives to, immediately cease and
cause to be terminated any activities, discussions or negotiations with any
Third Party with respect to any Takeover Proposal.
(d) Except
as otherwise provided in Section 4.2(e),
neither the Board of Directors of the Company nor any committee thereof shall
withdraw or, in a manner adverse to Parent or Sub, modify or qualify the Company
Recommendation (any such action being referred to as a “Company Adverse
Recommendation Change”).
(e) Notwithstanding
anything in this Agreement to the contrary, prior to the approval and adoption
of this Agreement by the Company Shareholders at the Shareholder Meeting, in
response to the receipt of a Superior Proposal that has not been withdrawn and
provided the Company and its Subsidiaries have complied in all material respects
with this Section
4.2, the Company’s Board of Directors may make a Company Adverse
Recommendation Change; provided, that the
Company has complied in all material respects with the following sentence of
this Section
4.2(e) and, after so complying, such proposal continues to constitute a
Superior Proposal and the Company’s Board of Directors determines in good faith,
after consultation with the Company’s outside legal and financial advisors, that
the failure to make a Company Adverse Recommendation Change would be
inconsistent with the exercise of the fiduciary duties of the Board of Directors
of the Company to the Company’s shareholders under applicable
Law. The Board of Directors of the Company shall not make a Company
Adverse Recommendation Change unless (i) the Company has, at least five (5)
business days in advance (the “Notice Period”),
provided a written notice to Parent advising Parent that the Board of Directors
of the Company has received a Superior Proposal, specifying the material terms
and conditions of such Superior Proposal, identifying the Person making such
Superior Proposal and providing copies of any agreements intended to effect such
Superior Proposal, and (ii) during such five (5) business day period, the
Company and its Representatives have negotiated in good faith with Parent
regarding any revisions to the terms of this Agreement and the transactions
contemplated hereby in response to such Superior Proposal; provided, however, that if
during the Notice Period any revisions are made to the Superior Proposal and
such revisions are material (it being understood and agreed that any change to
consideration with respect to such proposal is material), the Company shall
provide written notice of such revisions to Parent and the Notice Period shall
be extended by one (1) business day.
(f) Nothing
in this Section 4.2
shall prohibit the Board of Directors of the Company from taking and disclosing
to the Company’s shareholders a position contemplated by Rule 14e-2(a),
Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under
the Exchange Act so long as such disclosure is limited to (i) a “stop, look
and listen” or similar communication of the type contemplated by Rule 14d-9(f)
promulgated under the Exchange Act, (ii) an express rejection of an
applicable Takeover Proposal or (iii) an express reaffirmation of the Company
Recommendation; provided, however, that any
action that constitutes a Company Adverse Recommendation Change may only be made
in compliance with Section
4.2(e).
36
(g) For
purposes of this Agreement:
(i) “Acquisition
Transaction” means any transaction or series of related transactions
other than the Merger involving: (A) any acquisition or purchase from
the Company by any Third Party of more than a 15% interest in the total
outstanding voting securities of the Company or any of its Subsidiaries; (B) any
tender offer or exchange offer that if consummated would result in any Third
Party beneficially owning 15% or more of the total outstanding voting securities
of the Company or any of its Subsidiaries; (C) any merger, consolidation,
business combination, recapitalization or similar transaction involving the
Company pursuant to which the shareholders of the Company immediately preceding
such transaction hold less than 85% of the equity interests in the surviving or
resulting entity of such transaction in substantially the same proportion as
prior to such transaction; (D) any sale, lease, exchange, transfer, license,
acquisition or disposition of more than 15% of the assets (based on the fair
market value thereof) of the Company or any of its Subsidiaries; or (z) any
liquidation or dissolution of the Company or any of its
Subsidiaries;
(ii) “Superior Proposal”
means an unsolicited, bona fide written Takeover Proposal to acquire more than
(A) 50% of the outstanding voting securities of the Company or (B) 50% of the
consolidated assets of the Company and its Subsidiaries, in either case on terms
that, in the reasonable good faith judgment of the Board of Directors of the
Company, after consultation with its outside financial advisors and its outside
legal counsel, (x) is more favorable, from a financial point of view, to the
shareholders of the Company than the Merger, taking into account all of the
terms and conditions of such proposal and this Agreement (including any changes
to the terms of this Agreement proposed by Parent in response to such proposal
or otherwise), and (y) is reasonably capable of being completed on the terms set
forth in the proposal, taking into account all financial, legal, regulatory and
other aspects thereof;
(iii) “Third Party” means
any Person or group (as defined under Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder) other than Parent and its
Affiliates; and
(iv) “Takeover Proposal”
means any inquiry, offer or proposal by a Third Party relating to any
Acquisition Transaction.
Section
4.3 Third
Party Standstill Agreements. During
the period from the date of this Agreement through the Effective Time, the
Company shall not terminate, amend, modify or waive any provision of any
confidentiality agreement relating to a Takeover Proposal or standstill
agreement to which the Company or any of its Subsidiaries is a party (other than
any involving Parent). During such period, the Company agrees to
enforce, to the fullest extent permitted under applicable Law, the provisions of
any such agreements, including obtaining injunctions to prevent any breaches of
such agreements and to enforce specifically the terms and provisions thereof in
any court of the United States or any state thereof having
jurisdiction.
37
ARTICLE
V
ADDITIONAL
AGREEMENTS
Section
5.1 Shareholder
Meeting. The
Company will, as soon as reasonably practicable following the date of this
Agreement, duly call, give notice of, convene and hold a meeting of shareholders
(the “Shareholder
Meeting”) for the purpose of considering the approval and adoption of
this Agreement. The Company shall, except to the extent that the
Company has made a Company Adverse Recommendation Change in compliance with
Section 4.2(e),
through its Board of Directors, recommend to its shareholders approval and
adoption of this Agreement and the transactions contemplated hereby, including
the Merger (the “Company
Recommendation”), and shall use commercially reasonable efforts to
solicit such approval and adoption by its shareholders, and such Board of
Directors or committee thereof shall not withhold, withdraw, qualify, amend or
modify in a manner adverse to Parent the Company Recommendation or its
declaration that this Agreement and the Merger are advisable and fair to and in
the best interests of the Company and its shareholders or resolve or publicly
propose to do any of the foregoing. Notwithstanding any Company
Adverse Recommendation Change pursuant to Section 4.2(e), the
Company agrees to submit this Agreement to its shareholders for approval and
adoption.
Section
5.2 Proxy
Statement. As
soon as reasonably practicable after the date of this Agreement, the Company
shall prepare and file with the SEC a proxy statement and related materials with
respect to the Merger and the other transactions contemplated hereby
(collectively, including all amendments or supplements thereto, the “Proxy
Statement”). The Company shall ensure that the Proxy Statement
complies as to form in all material respects with the applicable provisions of
the Exchange Act. The Company shall use its reasonable best efforts
to have the Proxy Statement cleared by the SEC and mailed to its shareholders as
promptly as practicable after its filing with the SEC. The Company
shall, as promptly as practicable after receipt thereof, provide Parent with
copies of all written comments, and advise Parent of all oral comments, with
respect to the Proxy Statement received from the SEC. If, at any time
prior to the Effective Time, any information relating to the Company, any of its
Subsidiaries or any of their respective officers or directors should be
discovered by Parent or the Company that should be set forth in an amendment or
supplement to the Proxy Statement so that such document would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, then the party that discovers such information shall
promptly notify the other party hereto and, to the extent required by Law, the
Company shall promptly file with the SEC and disseminate to its shareholders an
appropriate amendment or supplement describing such
information. Notwithstanding the foregoing, prior to filing or
mailing the Proxy Statement (or any amendment or supplement thereto) or
responding to any comments of the SEC with respect thereto, the Company shall
(i) provide Parent with a reasonable opportunity to review and comment on such
document or response and (ii) include in such document or response all
reasonable comments that Parent proposes. On the date of their filing
or delivery, the Company shall provide Parent with a copy of all such filings
with, and all such responses delivered to, the SEC. Notwithstanding
anything to the contrary in this Agreement, no amendment or supplement
(including by incorporation by reference) to the Proxy Statement shall be made
without the approval of Parent, which approval shall not be unreasonably
withheld, conditioned or delayed.
38
Section
5.3 Access to
Information. The
Company shall, and shall cause each of its Subsidiaries to, afford to the
accountants, counsel, financial advisors, environmental consultants and other
representatives of Parent reasonable access to, and permit them to make such
inspections as they may reasonably require of, all of its employees, customers,
properties, books, contracts, commitments and records (including the work papers
of independent accountants, if available and subject to the consent of such
independent accountants) during normal business hours during the period from the
date of this Agreement through the Effective Time and, during such period, the
Company shall, and shall cause each of its Subsidiaries to, furnish promptly to
Parent (i) a copy of each report, schedule, registration statement and other
document filed by it during such period pursuant to the requirements of federal
or state securities Laws and (ii) all other information concerning its business,
properties and personnel as Parent may reasonably request. No
investigation pursuant to this Section 5.3 shall
affect any representation or warranty in this Agreement of any party hereto or
any condition to the obligations of the parties hereto. All information obtained
pursuant to this Section 5.3 shall be
kept confidential in accordance with the confidentiality agreement, dated May
26, 2010, between Parent and the Company (the “Confidentiality
Agreement”).
Section
5.4 Fees and
Expenses.
(a) Except
as provided in this Section 5.4 and Section 5.7, whether
or not the Merger is consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby, including the fees
and disbursements of counsel, financial advisors and accountants, shall be paid
by the party incurring such costs and expenses.
(b) Notwithstanding
any provision in this Agreement to the contrary, if this Agreement is terminated
(i) by the Company or Parent pursuant to Section 7.1(d) and
Parent is entitled to payment under Section 5.4(c), (ii)
by the Company or Parent pursuant to Section 7.1(e) or
(iii) by Parent pursuant to Section 7.1(b) or
7.1(f), then,
in each case, the Company shall (without prejudice to any other rights Parent
may have against the Company for breach of this Agreement) reimburse Parent upon
demand by wire transfer of immediately available funds to an account specified
in writing by Parent for all reasonable out-of-pocket fees and expenses incurred
or paid by or on behalf of Parent or any Affiliate of Parent in connection with
this Agreement and the transactions contemplated herein, including all fees and
expenses of counsel, investment banking firms, accountants and consultants;
provided, however, that the
Company shall not be obligated to make payments pursuant to this Section 5.4(b) in
excess of $285,000 in the aggregate.
(c) Notwithstanding
any provision in this Agreement to the contrary, if (i) this Agreement is
terminated by Parent pursuant to Section 7.1(b) or by
the Company or Parent pursuant to Section 7.1(d) or
7.1(e) and a
Takeover Proposal existed between the date hereof and the date of the
termination of this Agreement and, concurrently with or within twelve months
after any such termination an Acquisition Transaction is consummated or the
Company or any of its Subsidiaries shall enter into any letter of intent,
agreement in principle or other similar Contract with respect to an Acquisition
Transaction or (ii) by Parent pursuant to Section 7.1(f), then,
in each case, the Company shall (in addition to any obligation under Section 5.4(b) and
without prejudice to any other rights that Parent may have against the Company
for a breach of this Agreement) pay to Parent a fee of $1,000,000 by wire
transfer of immediately available funds to an account specified in writing by
Parent, such payment to be made promptly, but in no event later than (x) in the
case of clause (i), the earlier to occur of such an Acquisition Transaction and
the entry into such letter of intent, agreement in principle or other similar
Contract with respect to an Acquisition Transaction or (y) in the case of clause
(ii), on the business day following such termination.
39
(d) The
Company acknowledges that the agreements contained in this Section 5.4 are an
integral part of the transactions contemplated by this Agreement and that
without these agreements Parent would not enter into this
Agreement. Accordingly, if the Company fails to promptly pay any
amount due pursuant to this Section 5.4 and, in
order to obtain any such payment Parent commences a suit which results in a
judgment against the Company for any of the amounts set forth in this Section 5.4, the
Company shall pay to Parent its costs and expenses (including reasonable
attorneys’ fees) in connection with collecting such amount, together with
interest on the amounts due pursuant to this Section 5.4 at the
prime rate of JPMorgan Chase Bank, N.A. in effect on the date such payment was
required to be made.
Section
5.5 Commercially
Reasonable Efforts.
(a) Upon
the terms and subject to the conditions set forth in this Agreement, each of
Parent and the Company agrees to use commercially reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including using commercially reasonable efforts to accomplish the
following: (i) the taking of all commercially reasonable acts
necessary to cause the conditions precedent set forth in Article VI to be
satisfied; and (ii) the obtaining of all necessary actions or nonactions,
waivers, consents, approvals, orders and authorizations from Governmental
Entities and from Persons other than Governmental Entities and the making of all
necessary registrations, declarations and filings (including registrations,
declarations and filings with Governmental Entities, if any) and the taking of
all commercially reasonable steps as may be necessary to avoid any Action by any
Governmental Entity.
(b) Each
party shall use all commercially reasonable efforts to not 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.
(c) Notwithstanding
anything to the contrary contained in this Agreement, (i) neither Parent nor any
of its Affiliates shall be required to divest or hold separate or otherwise take
or commit to take any action that limits its freedom of action with respect to,
or its ability to retain, the Company or any of the businesses, product lines or
assets of Parent, the Company or any of their respective Subsidiaries or
Affiliates, or that otherwise would, individually or in the aggregate, have a
Material Adverse Effect on Parent or the Company, and (ii) the Company shall
not, without Parent’s prior written consent, take or agree to take any such
action.
40
Section
5.6 Public
Announcements. Neither
Parent nor the Company will issue any press release with respect to the
transactions contemplated by this Agreement or otherwise issue any written
public statements with respect to such transactions without prior consultation
with the other party, except as may be required by applicable Law or by
obligations pursuant to any listing agreement with any national securities
exchange or the rules of NASDAQ.
Section
5.7 Real Estate
Transfer Taxes. Parent
and the Company agree that either the Company or the Surviving Corporation will
pay any state or local transfer, gains or similar Taxes which are attributable
to the transfer of the beneficial ownership of the Company’s or any of its
Subsidiaries’ real property, if any (collectively, the “Transfer Taxes”), and
any penalties or interest with respect to the Transfer Taxes, payable in
connection with the consummation of the Merger. The Company and
Parent agree to cooperate with the other in the filing of any returns with
respect to the Transfer Taxes, including supplying in a timely manner a complete
list of all real property interests held by the Company and its Subsidiaries and
any information with respect to such properties that is reasonably necessary to
complete such returns. The portion of the consideration allocable to
the real properties of the Company and its Subsidiaries shall be determined by
Parent in its reasonable discretion. The shareholders of the Company
shall be deemed to have agreed to be bound by the allocation established
pursuant to this Section 5.7 in the
preparation of any return with respect to the Transfer Taxes.
Section
5.8 State
Takeover Laws. If
any “fair price,” “business combination” or “control share acquisition” statute
or other similar statute or regulation shall become applicable to the
transactions contemplated hereby or in the Shareholder Agreements, Parent and
the Company and their respective Boards of Directors shall use their
commercially reasonable efforts to grant such approvals and take such actions as
are necessary so that the transactions contemplated hereby and thereby may be
consummated as promptly as practicable on the terms contemplated hereby and
thereby and otherwise act to minimize the effects of any such statute or
regulation on the transactions contemplated hereby and thereby.
Section
5.9 Indemnification of Directors
and Officers. Subject
to applicable Law, for a period of six (6) years after the Effective Time,
Parent agrees to cause the Surviving Corporation to indemnify and hold harmless
all past and present officers and directors of the Company and its Subsidiaries
to the same extent such Persons are indemnified as of the date of this Agreement
by the Company pursuant to the Company Charter, the Company Bylaws and any
indemnification agreement entered into by and between the Company and any such
officer or director prior to the date hereof and set forth in Section 3.11 of
the Company Letter for acts or omissions occurring at or prior to the Effective
Time.
Section
5.10 Notification of Certain
Matters. Parent
shall use its reasonable best efforts to give prompt
notice to the Company, and the Company shall use its reasonable best efforts to
give prompt notice to Parent, of: (i) the occurrence, or
non-occurrence, of any event the occurrence, or non-occurrence, of which it is
aware and which would be reasonably likely to cause (A) any representation or
warranty of the notifying party contained in this Agreement to be untrue or
inaccurate in any material respect or (B) any covenant, condition or agreement
of the notifying party contained in this Agreement not to be complied with or
satisfied in all material respects; (ii) any failure of Parent or the Company,
as the case may be, to comply in a timely manner with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder; and
(iii) any change, event or effect which would be reasonably likely to,
individually or in the aggregate, have a Material Adverse Effect on the Company
or on Parent, as the case may be. The delivery of any notice pursuant
to this Section
5.10 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
41
Section
5.11 Employee
Benefit Plans and Agreements.
(a) Parent
agrees that it will cause the Surviving Corporation from and after the Effective
Time to honor all Company Plans and all Employee Agreements entered into by the
Company prior to the date hereof and described in Section 3.12 of the Company
Letter; provided, however, that nothing
in this Agreement shall be interpreted as limiting the power of Parent or the
Surviving Corporation to amend or terminate any Company Plan, any Employee
Agreement or any other individual employee benefit plan, program, Contract or
policy or as requiring Parent or the Surviving Corporation to offer to continue
the employment of any employee or independent contractor or, other than as
required by its terms, any written employment contract. Nothing in
this Agreement shall be interpreted as an amendment or other modification of any
Company Plan, Employee Agreement or other employee benefit plan, program or
arrangement or the establishment of any employee benefit plan, program or
arrangement. Nothing herein shall be deemed to be a guarantee of
employment for any employee of the Surviving Corporation or any of its
Subsidiaries, or to restrict the right of the Surviving Corporation, Parent or
any of their respective Subsidiaries to terminate or cause to be terminated the
employment of any employee at any time for any or no reason with or without
notice. Parent and the Company acknowledge and agree that all
provisions contained in this Section 5.11 are
included for the sole benefit of Parent, Merger Sub, the Company, the Surviving
Corporation and their respective Subsidiaries, and that nothing in this Section 5.11, whether
express or implied, shall create any third party beneficiary or other rights (i)
in any other Person, including any employees, former employees, any participant
in any employee benefit plan, program or arrangement (or any dependent or
beneficiary thereof) of Parent, the Company or the Surviving Corporation or any
of their respective Subsidiaries, or (ii) to continued employment with Parent,
the Company, the Surviving Corporation, or any of their respective Subsidiaries
or continued participation in any employee benefit plan, program or
arrangement.
(b) To
the extent Parent causes employees of the Company or any of its Subsidiaries to
be eligible to participate in a Parent Plan, Parent shall cause such Parent Plan
to recognize prior service of such employees with the Company and its
Subsidiaries as service with Parent and its Subsidiaries (i) for purposes of any
waiting period and eligibility requirements under any Parent Plan that is not a
“pension plan” (as defined in Section 3(2) of ERISA) and (ii) for purposes of
eligibility and vesting (but not benefit accrual) under any Parent Plan that is
a “pension plan” (as defined in Section 3(2) of ERISA). As used
herein: (A) “Parent Plan” means a
“pension plan” (as defined in Section 3(2) of ERISA (other than a Parent
Multiemployer Plan)), a “welfare plan” (as defined in Section 3(1) of ERISA) or
any bonus, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, holiday pay, vacation,
severance, death benefit, sick leave, fringe benefit, insurance or other plan,
arrangement or understanding, in each case established or maintained by Parent
or any of its ERISA Affiliates or as to which Parent or any of its ERISA
Affiliates has contributed or otherwise may have any liability; and (B) “Parent Multiemployer
Plan” means a “multiemployer plan” (as defined in Section 4001(a)(3) of
ERISA) to which Parent or any of its ERISA Affiliates is or has been obligated
to contribute or otherwise may have any liability.
42
(c) If
requested by Parent in writing at least 20 days prior to the Effective Time, the
Company shall take all action necessary to terminate any 401(k) plan maintained
by the Company or any of its Subsidiaries.
Section
5.12 Certain
Litigation. The
Company shall promptly advise Parent orally and in writing of any Action
commenced after the date of this Agreement against the Company or any of its
directors by any shareholder of the Company relating to this Agreement, the
Merger and the transactions contemplated hereby and shall keep Parent reasonably
informed regarding any such litigation. The Company shall give Parent
the opportunity to consult with the Company regarding the defense or settlement
of any such Action and shall consider Parent’s views with respect to such Action
and shall not settle any such Action without the prior written consent of
Parent.
ARTICLE
VI
CONDITIONS
PRECEDENT TO THE MERGER
Section
6.1 Conditions
to Each Party’s Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment or waiver by Parent and the Company at or prior to the Effective
Time of the following conditions:
(a) Shareholder
Approval. This Agreement shall have been duly approved and
adopted by the requisite vote of shareholders of the Company in accordance with
applicable Law.
(b) No
Order. No court or other Governmental Entity having
jurisdiction over the Company or Parent, or any of their respective
Subsidiaries, shall have enacted, issued, promulgated, enforced or entered any
Law, rule, regulation or Order (whether temporary, preliminary or permanent)
which is then in effect prohibiting or having the effect of making illegal the
consummation of the Merger and no Governmental Entity shall have instituted any
Action that is pending seeking such an Order.
Section
6.2 Conditions to
Obligation of the Company to Effect the Merger. The
obligation of the Company to effect the Merger shall be subject to the
fulfillment or waiver by the Company at or prior to the Effective Time of the
following additional conditions:
(a) Performance of
Obligations. Each of Parent and Sub shall have performed in
all material respects each of its agreements contained in this Agreement
required to be performed on or prior to the Effective Time.
(b) Representations and
Warranties. Each of the representations and warranties of
Parent and Sub contained in this Agreement that is qualified by materiality
shall be true and correct on and as of the Effective Time as if made on and as
of such date (other than representations and warranties which address matters
only as of a certain date which shall be true and correct as of such certain
date) and each of the representations and warranties that is not so qualified
shall be true and correct in all material respects on and as of the Effective
Time as if made on and as of such date (other than representations and
warranties which address matters only as of a certain date which shall be true
and correct in all material respects as of such certain date), in each case
except as contemplated or permitted by this Agreement.
43
(c) Officer’s
Certificate. The Company shall have received a certificate of
an executive officer of Parent as to the satisfaction of each of the conditions
set forth in this Section
6.2.
Section
6.3 Conditions to
Obligations of Parent and Sub to Effect the Merger. The
obligations of Parent and Sub to effect the Merger shall be subject to the
fulfillment or waiver by Parent at or prior to the Effective Time of the
following additional conditions:
(a) Performance of
Obligations. The Company shall have performed in all material
respects each of its agreements contained in this Agreement required to be
performed on or prior to the Effective Time.
(b) Representations and
Warranties. (i) The representations and warranties
of the Company contained in Section 3.2 shall be
true and correct in all respects as of the date of this Agreement and as of the
Effective Time as though made on and as of such date (other than representations
and warranties which address matters only as of a certain date, which shall be
true and correct in all respects as of such certain date); (ii) each of the
representations and warranties of the Company contained in this Agreement (other
than in Section
3.2) that is qualified by materiality shall be true and correct on and as
of the Effective Time as if made on and as of such date (other than
representations and warranties which address matters only as of a certain date
which shall be true and correct as of such certain date); and (iii) each of the
representations and warranties that is not so qualified (other than in Section 3.2) shall be
true and correct in all material respects on and as of the Effective Time as if
made on and as of such date (other than representations and warranties which
address matters only as of a certain date which shall be true and correct in all
material respects as of such certain date), in each case except as contemplated
or permitted by this Agreement.
(c) Material Adverse
Effect. Since the date of this Agreement, there shall
not have been any event, occurrence, fact, condition, effect, change or
development that, individually or in the aggregate, has had or would be
reasonably expected to have a Material Adverse Effect on the
Company.
(d) Consents. All
notifications to, authorizations, consents, orders, declarations or approvals of
or filings with, or terminations or expirations of waiting periods imposed by,
any Governmental Entity, the failure of which to obtain, make or occur would
have the effect of making the Merger or any of the transactions contemplated
hereby illegal or would, individually or in the aggregate, have a Material
Adverse Effect on Parent (assuming the Merger had taken place), shall have been
obtained, shall have been made or shall have occurred. Further, the
Company shall have provided notice to, or obtained the consent or approval of,
each Person that is not a Governmental Entity who is required to be notified, or
whose consent or approval shall be required, in connection with the transactions
contemplated hereby under any material Contract by which the Company or any of
its Subsidiaries is bound.
(e) No Litigation or
Injunction. There shall not be instituted or pending any
Action (i) by any Person relating to this Agreement, the Shareholder Agreements
or any of the transactions contemplated herein or therein or (ii) which would
have, individually or in the aggregate, a Material Adverse Effect on the Company
or Parent.
44
(f) Dissenting
Shareholders. The Dissenting Shares shall include no more than
five percent (5%) of the shares of Company Common Stock outstanding immediately
prior to the Effective Time.
(g) Net Cash
Amount. The Net Cash Amount as of immediately prior to the
Effective Time (including after giving effect to the payment of any dividend
permitted by Section
4.1(a)(i)) shall not be less than $4,145,000.
(h) Officers’
Certificate. Parent shall have received (i) a certificate
signed on behalf of the Company by its Chief Executive Officer and its Chief
Financial Officer to the effect that each of the conditions set forth in Sections 6.3(a) –
6.3(g) has been
satisfied and (ii) such evidence as it may reasonably request with respect to
the satisfaction of the condition set forth in Section
6.3(g).
ARTICLE
VII
TERMINATION,
AMENDMENT AND WAIVER
Section
7.1 Termination. This
Agreement may be terminated at any time prior to the Effective Time, whether
before or after any approval of the matters presented in connection with the
Merger by the shareholders of the Company:
(a) by
mutual written consent of Parent and the Company;
(b) by
Parent if there has been a breach of any representation, warranty, covenant or
other agreement made by the Company in this Agreement, or any such
representation and warranty shall have become untrue after the date of this
Agreement, in each case such that Section 6.2(a) or
6.2(b) would
not be satisfied and such breach or condition is not curable or, if curable, is
not cured within 30 days after written notice thereof is given by Parent to the
Company;
(c) by
the Company if there has been a breach of any representation, warranty, covenant
or other agreement made by Parent or Sub in this Agreement, or any such
representation and warranty shall have become untrue after the date of this
Agreement, in each case such that Section 6.3(a) or
6.3(b) would
not be satisfied and such breach or condition is not curable or, if curable, is
not cured within 30 days after written notice thereof is given by the Company to
Parent;
(d) by
either Parent or the Company if: (i) the Merger has not been effected
on or prior to the close of business on March 31, 2011; provided, however, that the
right to terminate this Agreement pursuant to this Section 7.1(d)(i)
shall not be available to any party whose failure to fulfill any of its
obligations contained in this Agreement has been the cause of, or resulted in,
the failure of the Merger to have occurred on or prior to the aforesaid date; or
(ii) any court or other Governmental Entity having jurisdiction over a party
hereto shall have issued or enacted an Order or Law or taken any other action
permanently enjoining, restraining or otherwise prohibiting or having the effect
of making illegal the consummation of the Merger and such Order, Law or other
action shall have become final and nonappealable;
45
(e) by
either Parent or the Company if the shareholders of the Company do not approve
this Agreement at the Shareholder Meeting or at any adjournment or postponement
thereof; provided, however, that the
Company may not terminate this Agreement pursuant to this Section 7.1(e) if the
Company has not complied with its obligations under Sections 4.2, 5.1 and 5.2 or has otherwise
breached in any material respect its obligations under this Agreement in any
manner that could reasonably have caused the failure of the shareholder approval
to be obtained at the Shareholder Meeting or at any adjournment or postponement
thereof;
(f) by
Parent if: (i) the Company shall have breached any of the provisions
of Section 4.2,
5.1 or 5.2; (ii) the Board
of Directors of the Company or any committee thereof shall have effected a
Company Adverse Recommendation Change or shall have taken any other action or
made any other statement in connection with the Shareholder Meeting inconsistent
with the Company Recommendation or shall have resolved or proposed to do any of
the foregoing; (iii) the Board of Directors of the Company or any committee
thereof shall have recommended to the shareholders of the Company any Takeover
Proposal or shall have resolved to do so; (iv) a tender offer or exchange offer
for 15% or more of the outstanding shares of capital stock of the Company is
commenced, and the Board of Directors of the Company fails to recommend against
acceptance of such tender offer or exchange offer by its shareholders (including
by taking no position with respect to the acceptance of such tender offer or
exchange offer by its shareholders); or (v) the Company’s Board of Directors
fails to reaffirm (publicly, if so requested by Parent) its recommendation in
favor of the adoption and approval of this Agreement within five (5) business
days after Parent requests in writing that such recommendation be reaffirmed;
or
(g) by
Parent if there shall have been a Material Adverse Change with respect to the
Company and such Material Adverse Change is not curable or, if curable, is not
cured within 10 days after written notice thereof is given by Parent to the
Company.
The right
of any party hereto to terminate this Agreement pursuant to this Section 7.1 shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any party hereto, any Person controlling any such party
or any of their respective officers or directors, whether prior to or after the
execution of this Agreement.
Section
7.2 Effect of
Termination. In
the event of termination of this Agreement by either Parent or the Company, as
provided in Section
7.1, this Agreement shall forthwith become void, and there shall be no
liability hereunder on the part of the Company, Parent, Sub or their respective
officers or directors (except for the last sentence of Section 5.3 and the
entirety of Section
5.4, which shall survive the termination); provided, however, that nothing
contained in this Section 7.2 shall
relieve any party hereto from any liability for any willful breach of a
representation or warranty contained in this Agreement or the breach of any
covenant contained in this Agreement.
Section
7.3 Amendment. This
Agreement may be amended by the parties hereto at any time before or after
approval of the matters presented in connection with the Merger by the
shareholders of the Company, but, after any such approval, no amendment shall be
made which by Law requires further approval by such shareholders without such
further approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties
hereto.
46
Section
7.4 Waiver. At
any time prior to the Effective Time, the parties hereto may (i) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (iii) waive
compliance with any of the covenants, agreements or conditions contained herein
which may legally be waived. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE
VIII
GENERAL
PROVISIONS
Section
8.1 Non-Survival
of Representations and Warranties. The
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall terminate at the Effective Time.
Section
8.2 Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed given when delivered personally, one day after being delivered to an
overnight courier or on the business day received (or the next business day if
received after 5 p.m. local time or on a weekend or day on which banks are
closed) when sent via facsimile (with a confirmatory copy sent by overnight
courier) to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(a) if
to Parent or Sub, to
ITT
Corporation
0000
Xxxxxxxxxxx Xxxxxx
Xxxxx
Xxxxxx, XX 00000
Attention: General
Counsel
Fax: (000)
000-0000
with a
copy to:
Sidley
Austin LLP
0 Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention: Xxxx
X. Xxxxx
Fax: (000)
000-0000
(b) if
to the Company, to
O.I.
Corporation
000
Xxxxxx Xxxx
Xxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx
Xxxxxx
Fax: (000)
000-0000
47
with a
copy to:
Xxxxxxx
Xxxxx LLP
000
Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attention: Xxx
X. Xxxxxx
Fax: (000)
000-0000
Section
8.3 Interpretation. When
a reference is made in this Agreement to a Section, Article, Exhibit or
Schedule, such reference shall be to a Section or Article of, or an Exhibit or
Schedule attached to, this Agreement unless otherwise indicated. The
Schedules and Exhibits referred to herein shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein. The table of contents, table of defined terms and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement. For purposes of this Agreement, (i) the words “include,”
“includes” or “including” shall be deemed to be followed by the words “without
limitation,” (ii) the words “herein,” “hereof,” “hereby,” “hereto” and
“hereunder” refer to this Agreement as a whole and (iii) the word “or” is not
exclusive. The meaning assigned to each term defined herein shall be
equally applicable to both the singular and plural forms of such term, and words
denoting any gender shall include all genders. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. Each of the
parties has participated in the drafting and negotiation of this
Agreement. If an ambiguity or question of intent or interpretation
arises, this Agreement must be construed as if it is drafted by all the parties,
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of authorship of any of the provisions of this
Agreement.
Section
8.4 Counterparts. This
Agreement may be executed in counterparts, all of which shall be considered one
and the same agreement, and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other
parties.
Section
8.5 Entire
Agreement; No Third-Party Beneficiaries. This
Agreement, except as provided in the last sentence of Section 5.3,
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement, except for the provisions of
Sections 5.9
and 5.11, is
not intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder.
48
Section
8.6 Governing
Law; Submission to Jurisdiction; Waiver of Jury Trial.
(a) This
Agreement shall be deemed to be made in and in all respects shall be
interpreted, construed and governed by and in accordance with the laws of the
state of Oklahoma without regard to the conflict of law principles
thereof. The parties hereby irrevocably submit to the jurisdiction of
the courts of the State of Oklahoma and the federal courts of the United States
of America located in the State of Oklahoma solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof or
of any such document, that it is not subject thereto or that such action, suit
or proceeding may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a court. The parties hereby consent to and
grant any such court jurisdiction over the person of such parties and over the
subject matter of such dispute and agree that mailing of process or other papers
in connection with any such action or proceeding in the manner provided in Section 8.2 or in
such other manner as may be permitted by law shall be valid and sufficient
service thereof.
(b) EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES
THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION
8.6.
Section
8.7 Assignment. Subject
to Section 1.1,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties.
Section
8.8 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 terms,
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic and legal substance of the transactions
contemplated hereby are 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 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 contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.
Section
8.9 Enforcement
of this Agreement. In
addition to any remedy to which any party hereto is
specifically entitled by the terms hereof, each party shall be entitled to
pursue any other remedy available to it at law or in equity (including damages,
specific performance or other injunctive relief) in the event that any of the
provisions of this Agreement were not performed in accordance with their terms
or were otherwise breached.
49
Section
8.10 Definitions. For
purposes of this Agreement:
“Affiliate” of any
Person means another Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
such first Person, and “control” has the
meaning specified in Rule 405 under the Securities Act.
“Knowledge of Parent”
means the actual knowledge of the individuals identified in Section 8.10 of the
Parent Letter.
“Knowledge of the
Company” means the actual knowledge of the individuals identified in
Section 8.10 of the Company Letter.
“Law” means any
federal, state, local, foreign, international or multinational treaty,
constitution, statute, law, ordinance, rule or regulation.
“Net Cash Amount” as
of any date means an amount equal to (i) the sum of (A) the aggregate amount of
cash and cash equivalents of the Company and its Subsidiaries as of such date
plus (B) the Prepaid Expense Amount, minus (ii) the sum of (A) the aggregate
principal amount of indebtedness for borrowed money and indebtedness evidenced
by notes, debentures, bonds or similar instruments of the Company and its
Subsidiaries, together with all accrued and unpaid interest thereon, plus (B)
the amount by which the aggregate of all unpaid costs and expenses incurred by
the Company and its Subsidiaries in connection with this Agreement and the
transactions contemplated hereby is greater than the Transaction Expense
Amount.
“Order” means
judgment, order, writ, award, injunction (temporary or permanent) or decree of
any Governmental Entity.
“Person” means any
individual, firm, corporation, partnership, limited liability company, trust,
joint venture, Governmental Entity or other entity.
“Prepaid Expense
Amount” means an amount up to and including $175,000 consisting of all
costs and expenses paid by the Company following the date hereof and prior to
the Closing Date, in each case to the extent incurred by the Company in
connection with this Agreement and the transactions contemplated
hereby.
“Transaction Expense
Amount” means an amount equal to the excess, if any, of $175,000 over the
Prepaid Expense Amount.
[Remainder
of page intentionally left blank; signature page follows.]
50
IN
WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement to be
signed by their respective officers thereunto duly authorized all as of the date
first written above.
ITT
CORPORATION
|
||
By:
|
/s/ Xxxx Xxxxxxx
|
|
Name:
|
Xxxx
Xxxxxxx
|
|
Title:
|
Senior
Vice President
|
|
OYSTER
ACQUISITION CORP.
|
||
By:
|
/s/ Xxxxxx Xxxxxx
|
|
Name:
|
Xxxxxx
Xxxxxx
|
|
Title:
|
President
|
|
O.I.
CORPORATION
|
||
By:
|
/s/ J. Xxxxx Xxxxxxxxx
|
|
Name:
|
J.
Xxxxx Xxxxxxxxx
|
|
Title:
|
CEO
& CFO
|
[Signature
Page to Agreement and Plan of Merger]
[Signature
Page to Shareholder Agreement]