EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
Dated as of April 10, 2001
Among
ILLINOIS TOOL WORKS INC.
XXXXXX ACQUISITION INC.
and
FOILMARK, INC.
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS..................................................................1
SECTION 1.01 Definitions........................................1
ARTICLE II
THE OFFER AND THE MERGER....................................................10
SECTION 2.01 The Offer.........................................10
SECTION 2.02 Company Actions...................................12
SECTION 2.03 Board of Directors; Section 14(f).................13
SECTION 2.04 The Merger........................................14
SECTION 2.05 Closing...........................................14
SECTION 2.06 Effective Time....................................14
SECTION 2.07 Certificate of Incorporation and By-laws..........14
SECTION 2.08 Directors.........................................15
SECTION 2.09 Officers..........................................15
ARTICLE III
EFFECT ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES..........................15
SECTION 3.01 Effect on Capital Stock...........................15
SECTION 3.02 Exchange of Certificates..........................16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............................18
SECTION 4.01 Organization, Standing and Power..................18
SECTION 4.02 Company Subsidiaries; Equity Interests............19
SECTION 4.03 Capital Structure.................................19
SECTION 4.04 Authorization; Validity of Agreement;
Necessary Action................................20
SECTION 4.05 No Conflicts; Consents............................21
SECTION 4.06 SEC Documents; Financial Statements;
Undisclosed Liabilities.......................21
SECTION 4.07 Information Supplied..............................22
SECTION 4.08 Absence of Certain Changes or Events..............22
SECTION 4.09 Taxes.............................................23
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SECTION 4.10 Benefit Plans; ERISA Compliance; Excess
Parachute Payments............................25
SECTION 4.11 Litigation........................................26
SECTION 4.12 Compliance with Applicable Laws...................27
SECTION 4.13 Contracts; Debt Instruments.......................28
SECTION 4.14 Guarantees........................................28
SECTION 4.15 Intellectual Property.............................29
SECTION 4.16 Takeover Laws.....................................29
SECTION 4.17 Affiliate Transactions............................30
SECTION 4.18 Environmental, Health, and Safety.................30
SECTION 4.19 Real and Personal Property........................31
SECTION 4.20 Insurance.........................................32
SECTION 4.21 Compensation......................................33
SECTION 4.22 Certain Advances..................................33
SECTION 4.23 Licenses and Permits..............................33
SECTION 4.24 Copies of Certain Documents.......................34
SECTION 4.25 Underlying Documents..............................34
SECTION 4.26 Risk Management Instruments.......................34
SECTION 4.27 Brokers; Fees and Expenses........................34
SECTION 4.28 Opinion of Financial Advisor......................34
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB............................35
SECTION 5.01 Organization, Standing and Power..................35
SECTION 5.02 Sub...............................................35
SECTION 5.03 Financing.........................................35
SECTION 5.04 Ownership of Company Common Stock.................35
SECTION 5.05 Authorization; Validity of Agreement;
Necessary Action................................35
SECTION 5.06 No Conflicts; Consents............................36
SECTION 5.07 Information Supplied..............................36
SECTION 5.08 Brokers...........................................37
SECTION 5.09 Litigation........................................37
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS ..................................37
SECTION 6.01 Conduct of Business...............................37
SECTION 6.02 No Solicitation...................................40
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ARTICLE VII
ADDITIONAL AGREEMENTS.......................................................43
SECTION 7.01 Preparation of Proxy Statement; Stockholders
Meeting.........................................43
SECTION 7.02 Access to Information; Confidentiality............43
SECTION 7.03 Reasonable Best Efforts; Notification.............44
SECTION 7.04 Stock Options.....................................46
SECTION 7.05 ESPP..............................................46
SECTION 7.06 Indemnification; D&O Insurance....................47
SECTION 7.07 Public Announcements..............................48
SECTION 7.08 Transfer Taxes....................................48
SECTION 7.09 Potential Litigation..............................48
SECTION 7.10 Certain Employee Matters..........................49
SECTION 7.11 Parent Guarantee of Bradford Agreement;
Shareholder Notes...............................49
ARTICLE VIII
CONDITIONS PRECEDENT........................................................50
SECTION 8.01 Conditions to Each Party's Obligation to
Effect the Merger...............................50
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER...........................................50
SECTION 9.01 Termination.......................................50
SECTION 9.02 Effect of Termination; Fees and Expenses..........52
SECTION 9.03 Amendment.........................................53
SECTION 9.04 Extension; Waiver.................................53
SECTION 9.05 Procedure for Termination, Amendment,
Extension or Waiver.............................53
ARTICLE X
GENERAL PROVISIONS..........................................................54
SECTION 10.01 Nonsurvival of Representations and
Warranties......................................54
SECTION 10.02 Notices..........................................54
SECTION 10.03 Interpretation...................................55
SECTION 10.04 Severability.....................................56
SECTION 10.05 Counterparts.....................................56
SECTION 10.06 Entire Agreement; No Third-Party Beneficiaries...56
SECTION 10.07 Governing Law....................................56
SECTION 10.08 Assignment.......................................56
SECTION 10.09 Enforcement......................................56
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AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER dated as of April 10, 2001 (the
"Agreement"), between Illinois Tool Works Inc., a Delaware corporation
("Parent"), Xxxxxx Acquisition Inc., a Delaware corporation ("Sub"), and a
wholly owned subsidiary of Parent, and Foilmark, Inc., a Delaware corporation
(the "Company").
WHEREAS the respective Boards of Directors of Parent, Sub
and the Company have approved the acquisition of the Company by Parent on
the terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent
proposes to cause Sub to make a tender offer (as it may be amended from
time to time as permitted under this Agreement, the "Offer") to purchase
all of the issued and outstanding shares of Company Common Stock (as
defined herein) for U.S. $6.36 per share of Company Common Stock (the
"Offer Price"), net to the Seller in cash upon the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, the respective Boards of Directors of Sub and
the Company have approved the merger (the "Merger") of Sub into the
Company, on the terms and subject to the conditions set forth in this
Agreement, whereby each issued share of Company Common Stock not owned
directly or indirectly by Parent or the Company, will be converted into the
right to receive an amount in cash equal to the Offer Price;
WHEREAS, simultaneously with the execution and delivery
of this Agreement, Parent and the Principal Company Stockholders (as
defined herein) are entering into Stock Option and Tender Agreements (as
defined herein); and
WHEREAS, Parent, Sub and the Company desire to make
certain representations, warranties, covenants and agreements in connection
with the Offer and the Merger and also to prescribe various conditions to
the Offer and the Merger.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. (a) As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" means, for any Person, another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such first Person,
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where "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management policies of a Person,
whether through the ownership of voting securities, by contract, as trustee
or executor, or otherwise.
"Affiliated Group" means any affiliated group within the meaning
of Section 1504(a) of the Code or any similar group defined under a similar
provision of state, local, or foreign law.
"Alternative Acquisition" has the meaning set forth in Section
6.02(a).
"Alternative Acquisition Proposal" has the meaning set forth in
Section 6.02(a).
"Applicable Law" means any statute, law (including common law),
ordinance, rule or regulation applicable to the Company or any Company
Subsidiary or their respective properties or assets.
"Applicable Tax Law" means any Applicable Law relating to Taxes,
including regulations and other official pronouncements of any Governmental
Entity or political subdivision of such jurisdiction charged with
interpreting such Applicable Law.
"Bradford" has the meaning set forth in Section 7.11.
"Certificate" or "Certificates" mean the certificate or
certificates that immediately prior to the Effective Time represented
outstanding shares of Company Common Stock.
"Certificate of Merger" means a certificate of merger, or other
appropriate documents, to be filed with the Secretary of State of the State
of Delaware to effect the Merger.
"Closing" means the closing of the Merger.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the heading hereof.
"Company Board" means the Board of Directors of the Company.
"Company By-laws" means the by-laws of the Company, as amended to
the date of this Agreement.
"Company Capital Stock" has the meaning set forth in Section 4.03.
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"Company Charter" means the certificate of incorporation of the
Company, as amended to the date of this Agreement.
"Company Common Stock" means the common stock, par value $.01 per
share, of the Company.
"Company Disclosure Letter" means the letter, dated as of the date
of this Agreement, delivered by the Company to Parent and Sub.
"Company Employee Stock Option" means any option to purchase
Company Common Stock granted under any Company Option Plan and any
Individual Option.
"Company Leased Real Property" has the meaning set forth in
Section 4.19(a).
"Company Material Adverse Effect" means a material adverse effect
on the business, assets and liabilities (taken together), results of
operations, financial condition or prospects of the Company and the Company
Subsidiaries taken as a whole, or a material adverse effect on the ability
of the Company to perform its obligations under the Transaction Agreements
to which it is a party or on the ability of the Company to consummate the
Offer, the Merger and the other Transactions.
"Company Option Plans" means the Company's Amended and Restated 1995
Stock Incentive Compensation Plan, the 1997 Non-Employee Director's Stock Plan
and the HoloPak Technologies, Inc. 1993 Non-Qualified Stock Option Plan.
"Company Owned Real Property" has the meaning set forth in Section
4.19(a).
"Company Plans" has the meaning set forth in Section 4.10(a).
"Company Preferred Stock" has the meaning set forth in Section
4.03.
"Company SAR" means any stock appreciation right linked to the
price of Company Common Stock and granted under any Company Option Plan.
"Company SEC Documents" means all reports, schedules, forms,
statements and other documents required to be filed by the Company with the
SEC since June 30, 1997.
"Company Stockholder Approval" has the meaning set forth in
Section 4.04(c).
"Company Stockholders Meeting" means a meeting of the Company's
stockholders for the purpose of seeking Company Stockholder Approval.
"Company Subsidiaries" means all the Subsidiaries of the Company.
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"Company Warrants" means warrants to purchase Company Common Stock.
"Confidentiality Agreement" means the confidentiality agreement,
dated November 3, 2000, between the Company and Parent.
"Consent" means any consent, approval, license, Permit, Order or
authorization.
"Consulting Agreement" has the meaning set forth in Section 7.11.
"Contract" means any contract, lease, license, indenture, note,
bond, mortgage, agreement, Permit, concession, franchise, instrument,
undertaking, commitment, understanding or other arrangement (whether
written or oral).
"DGCL" means the Delaware General Corporation Law, as amended from
time to time.
"D&O Insurance" means directors' and officers' insurance.
"Dissenters' Shares" means shares of Company Common Stock that are
outstanding immediately prior to the Effective Time and that are held by
any Person who is entitled to demand and properly demands payment of the
fair value of such shares pursuant to, and who complies in all respects
with, Section 262 of the DGCL.
"Effective Time" shall have the meaning set forth in Section 2.06.
"Environmental, Health and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the
Resource Conservation and Recovery Act of 1976 and the Occupational Safety
and Health Act of 1970, each as amended, together with all other Applicable
Laws (including rules, regulations, codes, common law, plans, injunctions,
judgments, Orders, decrees, rulings and charges thereunder) of any
Governmental Entity concerning pollution or protection of the environment,
public health and safety, or employee health and safety, including laws
relating to emissions, discharges, releases, or threatened releases of
Hazardous Substances into ambient air, surface water, ground water, or
lands or otherwise relating to the manufacture, generation, processing,
distribution, use, treatment, storage, disposal, clean-up, transport, or
handling of Hazardous Substances, in each case as now in effect and
applicable to the Company.
"ERISA" means the Employment Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means, with respect to any Person, any
corporation, trade or business which, together with such Person, is a
member of a controlled group of corporations or a group of trades or
businesses under common control within the meaning of section 414 of the
Code.
"ESPP" has the meaning set forth in Section 7.05(a).
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Fund" shall have the meaning set forth in Section
3.02(a).
"Filed Company SEC Documents" means all Company SEC Documents that
were filed and publicly available prior to the date of this Agreement.
"Financial Statements" means the consolidated financial statements
of the Company and its Subsidiaries included in each of the Company's
Annual Report on Form 10-K for the fiscal years ended June 30, 1999 and
June 30, 2000, each of Company's Quarterly Reports on Form 10-Q for the
quarters ended September 30, 2000 and December 31, 2000 and any
consolidated financial statements of the Company filed with the SEC after
the date hereof, including in each case the footnotes thereto.
"Fully Diluted Shares" has the meaning set forth in Exhibit A
hereto.
"GAAP" as to any Person means generally accepted United States
accounting principles, applied on a basis consistent with the basis on
which the most recent audited financial statements of such Person were
prepared prior to the date of this Agreement.
"Governmental Entity" means any:
(i) federal, state, local, municipal, or foreign government;
(ii) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official,
instrumentality or entity and any court or other tribunal);
(iii) multi-national organization or body; or
(iv) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority
or power.
"Hazardous Substance" means any hazardous, acutely hazardous, or
toxic substance, waste or contaminant, or any other material, including,
without limitation, petroleum hydrocarbons and asbestos, regulated under
any Environmental, Health and Safety Law and applicable to the material,
substance, waste or contaminant in the jurisdiction in which such material,
substance, waste or contaminant is located.
"HoloPak" has the meaning set forth in Section 7.11.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
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"Incumbent Directors" has the meaning set forth in Section
2.03(c).
"Indebtedness" means, without duplication, (i) all obligations for
borrowed money, or with respect to deposits or advances of any kind, (ii)
all obligations evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations upon which interest charges are
customarily paid, (iv) all obligations under conditional sale or other
title retention agreements relating to purchased property, (v) all
obligations issued or assumed as the deferred purchase price of property or
services (excluding obligations to creditors for raw materials, inventory,
services and supplies incurred in the ordinary and usual course of
business), (vi) all capitalized lease obligations, (vii) all obligations of
others secured by a Lien, other than Permitted Liens under clauses (i),
(ii) or (iii) of the definition thereof, on property or assets of the
Company or a Company Subsidiary, whether or not the obligations secured
thereby have been assumed, (viii) all obligations under interest rate or
currency hedging transactions (valued at the termination value thereof),
(ix) all letters of credit and (x) all guarantees and arrangements having
the economic effect of a guarantee of any indebtedness of any other Person
(other than a Company Subsidiary).
"Indemnified Party" has the meaning set forth in Section 7.06.
"Individual Options" means the options granted (i) to Xxxxx
Xxxxxx, Xxxxxxx Xxxxx and Xxxx Xxxxxxxx under the two Stock Option
Agreements dated as of January 4, 1990 (as the same may have been amended
pursuant to the letter agreements dated May 3, 1999, (ii) to Xxxxxx Xxxxxx
under the Stock Option Agreement dated as of July 31, 1991, and (iii) to
Xxxxx Xxxxxx under the Stock Option Agreement dated as of July 31, 1991.
"Intellectual Property Rights" means, collectively, the
registrations and applications for all patents, patent rights, trademarks,
trademark rights, trade names, trade name rights, service marks, service
xxxx rights, copyrights and other proprietary intellectual property rights
and all technology, know-how, data, computer programs and other tangible or
intangible proprietary information or material.
"IRS" means the Internal Revenue Service.
"Knowledge" means an individual will be deemed to have "Knowledge" of
a particular fact or other matter if:
(i) such individual is actually aware of such fact or other matter; or
(ii) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of
conducting a due inquiry.
The Company will be deemed to have "Knowledge" of a particular
fact or other matter if: Xxxxx X. Xxxxx, Xx., Xxxxx Xxxxx, Xxxxxx Xxxxxx,
Xxxx Xxxxxxxx, Xxxxx Xxxxx, Xxxxxxx Xxxxxx, Xxxxxx Xxxxxx; or a Company
Subsidiary has Knowledge of such fact or other matter.
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"Liens" means pledges, liens, charges, mortgages, encumbrances and
security interests of any kind or nature whatsoever.
"Material Contracts" means Contracts that are material to the
business, properties, assets and liabilities (taken together), financial
condition, results of operations or prospects of the Company and the
Company Subsidiaries taken as a whole and those which are set forth in
Section 4.13(a) of the Company Disclosure Letter.
"Material Intellectual Property Rights" means all Intellectual
Property Rights which are material to the conduct of the business of the
Company and the Company Subsidiaries taken as a whole.
"Maximum Premium" has the meaning set forth in Section 7.06(b).
"Merger" has the meaning set forth in the recitals hereto.
"Merger Consideration" means the U.S. dollar cash amount equal to
the price per share of Company Common Stock paid pursuant to the Offer.
"Minimum Tender Condition" has the meaning set forth in Exhibit A
hereto.
"Offer" has the meaning set forth in the recitals hereto.
"Offer Documents" has the meaning set forth in Section 2.01(b).
"Offer Price" has the meaning set forth in the recitals hereto.
"Order" means with respect to any Person, any award, decision,
injunction, judgment, stipulation, order, ruling, subpoena, writ, decree,
consent decree, or verdict entered, issued, made, or rendered by any court,
administrative agency, arbitrator or other Governmental Entity affecting
such Person or any of its properties.
"ordinary and usual course of business" means an action taken by a
Person that is consistent with the past practices of such Person and is
taken in the ordinary course of normal day-to-day operations of such
Person.
"Outside Date" has the meaning set forth in Section 9.01(b)(i).
"Parent" has the meaning set forth in the heading hereto.
"Parent Board" has the meaning set forth in Section 5.05.
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"Parent Disclosure Letter" means the letter, dated as of the date
of this Agreement, delivered by Parent to the Company.
"Parent Material Adverse Effect" means a material adverse effect
on the ability of Parent or Sub to perform its obligations under this
Agreement or on the ability of Parent or Sub to consummate the Offer, the
Merger and the other Transactions.
"Paying Agent" means the bank or trust company selected by Parent
prior to the Effective Time to act as paying agent for the payment of the
Merger Consideration.
"Pending Offering Period" has the meaning set forth in Section
7.05(a).
"Permit" has the meaning set forth in Section 4.23.
"Permitted Liens" has the meaning set forth in Section 4.19(a).
"Person" means any individual, firm, corporation (including any
non-profit corporation), general or limited partnership, company, limited
liability company, trust, joint venture, estate, association, organization,
labor union, or other entity or Governmental Entity.
"Principal Company Stockholders" means those stockholders of the
Company identified in Part A of the Parent Disclosure Letter.
"Proceedings" means any action, arbitration, audit, hearing,
proceeding, investigation, litigation, or suit (whether civil, criminal,
administrative or investigative) commenced, brought, conducted or heard by
or before, or otherwise involving, any Governmental Entity or arbitrator.
"Proxy Statement" means a proxy or information statement of the
Company relating to the approval of this Agreement by the Company's
stockholders.
"Schedule 14D-9" means the Solicitation/Recommendation Statement
on Schedule 14D-9 with respect to the Offer, as amended from time to time.
"Schedule TO" means the Tender Offer Statement on Schedule TO with
respect to the Offer, as amended from time to time.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Option and Tender Agreements" means the agreements entered
into by Parent and the Principal Company Stockholders pursuant to which
each of the Principal Company Stockholders has agreed to take specified
actions in furtherance of the Offer and the Merger.
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"Stock Transfer Taxes" means any state, local, foreign or
provincial Tax which is attributable to the transfer of Company Common
Stock pursuant to this Agreement.
"Sub" has the meaning set forth in the heading hereto.
"Sub Board" has the meaning set forth in Section 5.05.
"Subsequent Transaction" has the meaning set forth in Section
7.03(c).
"Subsidiary" means, with respect to any Person, any corporation,
association, general or limited partnership, company, limited liability
company, trust, joint venture, organization or other entity of which more
than 50% of the total voting power of shares of capital stock or other
interests (including partnership interests) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly
or indirectly, by (i) such Person, (ii) such Person and one or more
Subsidiaries of such Person or (iii) one or more Subsidiaries of such
Person.
"Superior Company Proposal" has the meaning set forth in Section
6.02(e).
"Surviving Corporation" has the meaning set forth in Section 2.04.
"Tax" or "Taxes" means: (i) any income, corporation, gross income,
gross receipts, franchise, profits, gains, capital stock, capital duty,
withholding, social security (or similar), employment, unemployment,
disability, real property, personal property, wealth, welfare, stamp,
excise, license, severance, environmental (including taxes under Section
59A of the Code), customs duties, occupation, sales, use, transfer,
registration, value added, payroll, premium, property, or windfall profits
tax, estimated, ad valorem or excise tax, alternative or add-on minimum tax
or other tax of any kind whatsoever (whether or not measured in whole or in
part by net income and including any fee, assessment or other charge in the
nature of or in lieu of any tax) imposed by any Tax Authority, including
any interest, penalty, or addition thereto, whether disputed or not; and
(ii) any liability by contract or agreement for the payment of any amount
of the type described in clause (i) as a result of the Company or any
Company Subsidiary being a successor to or transferee of any other
corporation at any time on or prior to the Closing Date, and any interest,
penalties, additions to tax (whether imposed by law, contractual agreement
or otherwise) and any liability in respect of any tax as a result of being
a member of any affiliated, consolidated, combined, unitary or similar
group.
"Tax Authority" means, with respect to any Tax, the Governmental
Entity or political subdivision thereof that imposes such Tax, and the
agency (if any) charged with the collection of such Taxes for such entity
or subdivision, including any Governmental Entity that imposes, or is
charged with collecting, social security or similar charges or premiums.
9
"Tax Period" means, with respect to any Tax, the period for which
the Tax is reported as provided under any Applicable Tax Law.
"Tax Return" means all Federal, state, local, provincial and
foreign Tax Returns, declarations, statements, reports, schedules, forms
and information Returns and any amended Tax Return relating to Taxes.
"Termination Fee" has the meaning set forth in Section 9.02(b).
"Transactions" means, collectively, the Offer, the Merger and the
other transactions contemplated by the Transaction Agreements.
"Transaction Agreements" means this Agreement and the Stock Option and
Tender Agreements.
"Transfer Taxes" means any state, local, foreign or provincial Tax
which is attributable to the transfer of the beneficial ownership of the
Company's or the Company's Subsidiaries' real or personal property.
"Voting Company Debt" means any bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote) on any matters on
which stockholders of the Company may vote.
ARTICLE II
THE OFFER AND THE MERGER
SECTION 2.01 The Offer.
(a) As promptly as practicable but in no event later than ten (10)
business days after the date of this Agreement, Sub shall, and Parent shall
cause Sub to, commence the Offer within the meaning of the applicable rules
and regulations of the SEC. The obligation of Sub to, and of Parent to
cause Sub to, accept for payment, and pay for, any shares of Company Common
Stock tendered pursuant to the Offer shall be subject only to the
conditions set forth in Exhibit A (any of which may be waived by Sub in its
sole discretion, except as otherwise provided herein). Sub expressly
reserves the right to modify the terms of the Offer, except that, without
the consent of the Company, Sub shall not (i) reduce the number of shares
of Company Common Stock subject to the Offer or reduce or waive the Minimum
Tender Condition, (ii) reduce the consideration per share of Company Common
Stock to be paid pursuant to the Offer below the Offer Price, (iii) modify
or add to the conditions set forth in Exhibit A, (iv) except as provided in
the next sentence, extend the Offer or (v) change the form of consideration
payable in the Offer. Notwithstanding the foregoing, Sub may, without the
consent of the Company, (A) extend the Offer for up to forty-five (45)
days, if at the
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initial scheduled expiration date of the Offer (which shall be twenty (20)
business days following the commencement of the Offer) any of the
conditions to Sub's obligation to purchase shares of Company Common Stock
are not satisfied or waived, until such time as such conditions are
satisfied or waived, (B) extend the Offer, if all of the conditions to the
Offer are satisfied or waived but the number of the Shares validly tendered
and not withdrawn is less than ninety percent (90%) of the then outstanding
number of shares on a Fully Diluted Basis, for an aggregate period not to
exceed twenty (20) business days (for all such extensions); provided, that
Sub shall immediately accept and promptly pay for all Company Common Stock
tendered prior to the date of an extension pursuant to clause (B) and shall
otherwise meet the requirements of Rule 14d-11 under the Exchange Act in
connection with each such extension, (C) extend the Offer for any period
required by any rule, regulation, interpretation or position of the SEC or
the staff thereof applicable to the Offer, and (D) extend the Offer in
increments of not more than twenty (20) business days, if at the initial
scheduled expiration of the Offer (or any extension thereof) the waiting
period (and any extension thereof) applicable to any of the Transactions
under the HSR Act shall not have been terminated or shall not have expired
or any consents, approvals and filings under any foreign antitrust law, the
absence of which would prohibit the consummation of the Merger, shall not
have been obtained or made. On the terms and subject to the conditions of
the Offer and this Agreement, Sub shall pay for all shares of Company
Common Stock validly tendered and not withdrawn pursuant to the Offer as
soon as practicable after the expiration of the Offer and, with respect to
any extension of the Offer, as soon as practicable after shares of Company
Common Stock are validly tendered. Sub may, at any time, transfer or assign
to one or more Subsidiaries of Parent the right to purchase all or any
portion of the shares of Company Common Stock tendered pursuant to the
Offer, but any such transfer or assignment shall not relieve Sub or Parent
of their respective obligations under the Offer or prejudice the rights of
tendering stockholders to receive payment for shares of Company Common
Stock validly tendered and accepted for payment.
(b) On the date of commencement of the Offer, Parent and Sub shall
file with the SEC a Tender Offer Statement on Schedule TO with respect to
the Offer, which shall contain an offer to purchase and a related letter of
transmittal and summary advertisement (such Schedule TO and the documents
included therein pursuant to which the Offer will be made, together with
any supplements or amendments thereto, the "Offer Documents"). The Offer
Documents will comply as to form in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
promulgated thereunder. Parent shall deliver copies of the proposed forms
of the Offer Documents to the Company within a reasonable time prior to the
commencement of the Offer for review and comment by the Company and its
counsel. Each of Parent, Sub and the Company shall promptly correct any
information provided by it for use in the Offer Documents if and to the
extent that such information shall have become false or misleading in any
material respect, and each of Parent and Sub shall take all steps necessary
to amend or supplement the Offer Documents and to cause the Offer
Documents, as so amended or supplemented, to be filed with the SEC and to
be disseminated to the Company's stockholders, in each case as and to the
extent required by applicable Federal securities laws. Parent and Sub shall
provide the Company and its counsel in writing with any comments Parent,
Sub or their counsel may receive from the SEC or its staff with respect to
the Offer Documents promptly after the receipt of such comments.
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SECTION 2.02 Company Actions.
(a) The Company hereby approves of and consents to each of the
Transactions.
(b) On the date the Offer Documents are filed with the SEC, the
Company shall file with the SEC the Schedule 14D-9 containing the
recommendations described in Section 4.04(b) and shall mail the Schedule
14D-9 to the holders of Company Common Stock. The Schedule 14D-9 will
comply as to form in all material respects with the applicable provisions
of the Exchange Act and the rules and regulations promulgated thereunder.
The Company shall deliver copies of the proposed form of the Schedule 14D-9
to Parent within a reasonable time prior to the filing thereof with the SEC
for review and comment by Parent and its counsel. Each of the Company,
Parent and Sub shall promptly correct any information provided by it for
use in the Schedule 14D-9 if and to the extent that such information shall
have become false or misleading in any material respect, and the Company
shall take all steps necessary to amend or supplement the Schedule 14D-9
and to cause the Schedule 14D-9 as so amended or supplemented to be filed
with the SEC and disseminated to the Company's stockholders, in each case
as and to the extent required by applicable Federal securities laws. The
Company shall provide Parent and its counsel in writing with any comments
the Company or its counsel may receive from the SEC or its staff with
respect to the Schedule 14D-9 promptly after the receipt of such comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to furnish Sub promptly with mailing labels containing the
names and addresses of the record holders of Company Common Stock as of a
recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of stockholders, security position
listings, computer files and all other information in the Company's
possession or control regarding the beneficial owners of Company Common
Stock, and shall furnish to Sub such information and assistance (including
updated lists of stockholders, security position listings and computer
files) as Parent may reasonably request in communicating the Offer to the
Company's stockholders. Subject to the requirements of Applicable Law, and
except for such steps as are necessary to disseminate the Offer Documents
and any other documents necessary to consummate the Transactions, Parent
and Sub shall hold in confidence the information contained in any such
labels, listings and files, shall use such information only in connection
with the Offer and the Merger and, if this Agreement shall be terminated,
shall deliver to the Company or destroy all copies of such information then
in their possession.
SECTION 2.03 Board of Directors; Section 14(f).
(a) If requested by Parent, promptly after the acceptance for
payment of the shares of Company Common Stock to be purchased pursuant to
the Offer as a result of which Sub and its Affiliates own at least enough
shares of Company Common Stock to satisfy the Minimum Tender Condition, Sub
shall be entitled to designate such number of directors on the Company
Board (and on each committee of the Company Board and on each board of
directors of each Company
12
Subsidiary designated by Parent) as will give Sub representation on the
Company Board (or such committee or Company Subsidiary board of directors)
equal to at least that number of directors, rounded up to the next whole
number, which is the product of (a) the total number of directors on the
Company Board (or such committee or Company Subsidiary board of directors)
giving effect to the directors appointed or elected pursuant to this
sentence multiplied by (b) the percentage that (i) such number of shares of
Company Common Stock so accepted for payment and paid for by Sub plus the
number of shares of Company Common Stock otherwise owned by Sub or any
other subsidiary of Parent bears to (ii) the Fully Diluted Shares, and the
Company shall, at such time, cause Sub's designees to be so appointed or
elected. The Company shall take all actions necessary to cause the persons
designated by Parent to be directors on the Company Board (or a committee
of the Company Board or the board of directors of a Company Subsidiary
designated by Parent) pursuant to the preceding sentence to be so appointed
or elected (whether, at the request of Parent, by means of increasing the
size of the Company Board (or such committee or Company Subsidiary board of
directors) or seeking the resignation of directors and causing Parent's
designees to be appointed or elected).
(b) The Company's obligation to appoint designees of Parent and/or
Sub to the Company Board shall be subject to Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder. The Company shall promptly take
all actions required pursuant to Section 14(f) and Rule l4f-1 in order to
fulfill its obligations under this Section 2.03, and shall include in the
Schedule 14D-9 such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14f-1.
Parent and Sub will supply to the Company any information with respect to
any of them and their nominees, officers, directors and Affiliates required
by Section 14(f) and Rule 14f-1.
(c) Notwithstanding anything in this Section 2.03 to the contrary,
until the Effective Time, the Company shall retain as members of the
Company Board at least two (2) directors who are directors of the Company
as of the date hereof (the "Incumbent Directors"). Following the election
or appointment of Parent's and/or Sub's designees pursuant to this Section
2.03 and prior to the Effective Time, any amendment or termination of this
Agreement, extension for the performance or waiver of the obligations or
other acts of Parent or Sub or waiver of the Company's rights hereunder,
will require the concurrence of each of the Incumbent Directors.
SECTION 2.04 The Merger. On the terms and subject to the
conditions set forth in this Agreement, and in accordance with the DGCL,
Sub shall be merged with and into the Company at the Effective Time. At the
Effective Time, the separate corporate existence of Sub shall cease and the
Company shall continue as the surviving corporation (the "Surviving
Corporation"). At the election of Parent, any direct or indirect Subsidiary
or other Affiliate of Parent may be substituted for Sub as a constituent
corporation in the Merger. In such event, the parties shall execute an
appropriate amendment to this Agreement in order to reflect the foregoing.
SECTION 2.05 Closing. The Closing shall take place at the offices of
Xxxxx, Xxxxx & Xxxxx, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 at
10:00 a.m. on the second business day
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following the satisfaction (or, to the extent permitted by Applicable Law,
waiver by all parties) of the conditions set forth in Article VIII (or, to
the extent permitted by law, waived by the parties entitled to the benefits
thereof), or at such other place, time and date as shall be agreed in
writing between Parent and the Company.
SECTION 2.06 Effective Time. As soon as practicable after the
Closing, Parent and the Company will cause the Certificate of Merger to be
executed and filed with the Secretary of State of the State of Delaware as
provided in Section 251 or 253 of the DGCL. The Merger shall become
effective at the time when the Certificate of Merger has been duly filed
with the Secretary of State of the State of Delaware or such other time as
shall be agreed upon by the parties and set forth in the Certificate of
Merger in accordance with the DGCL (the "Effective Time"). From and after
the Effective Time, the Merger shall have all the effects provided by
Section 259 of the DGCL, including without limitation, the effect that the
Surviving Corporation shall possess all of the assets, rights, privileges,
powers and franchises and shall be subject to all of the liabilities,
restrictions, disabilities and duties of the Company and Sub, all as
provided under the DGCL.
SECTION 2.07 Certificate of Incorporation and By-laws. (a) The
Certificate of Incorporation of the Company, as in effect immediately prior
to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter changed or amended as provided
therein or by Applicable Law; provided, however, that such Certificate of
Incorporation shall be amended to become identical to the Certificate of
Incorporation of Sub as in effect immediately prior to the Effective Time
except that Article I thereof shall be amended to change the name of the
Surviving Corporation to the name of the Company.
(b) The By-laws of Sub as in effect immediately prior to the
Effective Time shall be the By-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by Applicable Law.
SECTION 2.08 Directors. The directors of Sub immediately prior to
the Effective Time shall be the directors of the Surviving Corporation,
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the
Surviving Corporation's certificate of incorporation and by-laws.
SECTION 2.09 Officers. The officers of the Company shall, from and
after the Effective Time, be the officers of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the
Surviving Corporation's certificate of incorporation and by-laws.
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ARTICLE III
EFFECT ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 3.01 Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of
any shares of Company Common Stock or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each
share of Company Common Stock that is owned by the Company, the Company
Subsidiaries, Parent or Sub shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock and Options. (i) Subject to
Sections 3.01(b), and 3.01(d), each issued and outstanding share of Company
Common Stock shall be converted into the Merger Consideration.
(ii) As of the Effective Time, all such shares of Company
Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist,
and each holder of a certificate representing any such shares of
Company Common Stock shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration upon
surrender of such certificate in accordance with Section 3.02,
without interest.
(iii) Company Employee Stock Options shall be treated as
set forth in Section 7.04.
(d) Dissenters' Rights. Notwithstanding anything in this Agreement
to the contrary, Dissenters' Shares shall not be converted into Merger
Consideration as provided in Section 3.01(c), but rather the holders of
Dissenters' Shares shall be entitled to payment of the fair value of such
Dissenters' Shares in accordance with Section 262 of the DGCL; provided,
however, that if any such holder shall fail to perfect or otherwise shall
waive, withdraw or lose the right to receive payment of fair value under
Section 262 of the DGCL, then the right of such holder to be paid the fair
value of such holder's Dissenters' Shares shall cease and such Dissenters'
Shares shall be treated as if they had been converted as of the Effective
Time into Merger Consideration as provided in Section 3.01(c). The Company
shall provide prompt notice to Parent of any demands received by the
Company for appraisal of any shares of Company Common Stock, attempted
withdrawals of any such demands and any other documents received in
connection with any assertion of rights to payment of fair value under
Section 262 of the DGCL, and Parent shall have the right to participate
15
in and direct all negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to, or settle or offer to settle, any
such demands, or agree to do any of the foregoing.
SECTION 3.02 Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Parent shall select
a bank or trust company to act as the Paying Agent for the payment of the
Merger Consideration upon surrender of Certificates representing Company
Common Stock. The Surviving Corporation shall provide to the Paying Agent
on a timely basis, as and when needed after the Effective Time, cash
necessary to pay for the shares of Company Common Stock converted into the
right to receive the Merger Consideration pursuant to Section 3.01(c) (such
cash being hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedure. As soon as reasonably practicable after
the Effective Time, the Paying Agent shall mail to each holder of record of
a Certificate or Certificates, (i) 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 delivery of the Certificates to the
Paying Agent and shall be in a form and have such other provisions as
Parent may reasonably specify) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for Merger Consideration.
Upon surrender of a Certificate for cancellation to the Paying Agent or to
such other agent or agents as may be appointed by Parent, together with
such letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Paying Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger Consideration
into which the shares of Company Common Stock theretofore represented by
such Certificate shall have been converted pursuant to Section 3.01, and
the Certificate so surrendered shall forthwith be canceled. In the event of
a transfer of ownership of Company Common Stock which 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 (A) pay any
transfer or other Taxes required by reason of the payment to a Person other
than the registered holder of such Certificate, or (B) establish to the
satisfaction of the Surviving Corporation that such Tax has been paid or is
otherwise not applicable. Until surrendered as contemplated by this Section
3.02, each Certificate shall be deemed at any time after the Effective Time
to represent only the right to receive upon such surrender the Merger
Consideration, without interest, into which the shares of Company Common
Stock theretofore represented by such Certificate shall have been converted
pursuant to Section 3.01(c). No interest shall be paid or shall accrue on
any Merger Consideration payable upon the surrender of any Certificate.
(c) No Further Ownership Rights in Company Common Stock. The
Merger Consideration paid in accordance with the terms of this Article III
upon conversion of any shares of Company Common Stock shall be deemed to
have been paid in full satisfaction of all rights pertaining to such
shares, and there shall be no further registration of transfers on the
stock transfer books of the
16
Surviving Corporation of shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, any certificates formerly representing shares of Company
Common Stock are presented to the Surviving Corporation or the Paying Agent
for any reason, they shall be canceled and exchanged as provided in this
Article III.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund
that remains undistributed to the holders of Company Common Stock six
months after the Effective Time shall be delivered to the Surviving
Corporation and any holder of Company Common Stock who has not theretofore
complied with this Article III shall thereafter look only to the Surviving
Corporation for payment of its claim for Merger Consideration.
(e) No Liability. None of Parent, Sub, the Company, the Surviving
Corporation or the Paying Agent shall be liable to any Person in respect of
any cash from the Exchange Fund delivered to a public official pursuant to
any applicable abandoned property, escheat or similar Applicable Law. If
any Certificate has not been surrendered prior to the date that is five
years after the Effective Time (or immediately prior to such earlier date
on which Merger Consideration in respect of such Certificate would
otherwise escheat to or become the property of any Governmental Entity),
any such shares, cash, dividends or distributions in respect of such
Certificate shall, to the extent permitted by Applicable Law, become the
property of the Surviving Corporation, free and clear of all claims or
interest of any Person previously entitled thereto.
(f) Investment of Exchange Fund. The Paying Agent shall invest any
cash included in the Exchange Fund, as directed by Parent, on a daily
basis. Any interest and other income resulting from such investments shall
be paid to Parent.
(g) Withholding Rights. The Surviving Corporation shall be
entitled to deduct and withhold from the consideration otherwise payable to
any holder of Company Common Stock pursuant to this Agreement such amounts
as may be required to be deducted and withheld with respect to the making
of such payment under the Code, or under any provision of state, local or
foreign tax law. To the extent that amounts are so withheld and paid over
to the appropriate Tax Authority, the Surviving Corporation will be treated
as though it withheld an appropriate amount of the type of consideration
otherwise payable pursuant to this Agreement to any holder of Company
Common Stock, sold such consideration for an amount of cash equal to the
fair market value of such consideration at the time of such deemed sale and
paid such cash proceeds to the appropriate Tax Authority.
(h) Lost, Stolen or Destroyed Certificates. In the event 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, the Paying Agent shall issue in exchange for
such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof as determined in accordance with Section
3.01 hereof, provided that the Person to whom the Merger Consideration is
paid shall, as a condition precedent to the payment thereof, indemnify the
Surviving Corporation in a manner satisfactory to it (including, without
limitation, the posting by such Person of such bond and security as the
Surviving Corporation may reasonably request) against any claim that may be
17
made against the Surviving Corporation with respect to the Certificate
claimed to have been lost, stolen or destroyed.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as follows:
SECTION 4.01 Organization, Standing and Power. The Company and
each of the Company Subsidiaries is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is organized
and has full power and authority and possesses all Permits necessary to
enable it to own, lease or otherwise hold its properties and assets and to
conduct its business as presently conducted, other than such Permits the
lack of which, individually or in the aggregate, has not had and could not
reasonably be expected to have a Company Material Adverse Effect. The
Company and each Company Subsidiary is duly qualified to do business in
each jurisdiction (i) listed in Section 4.01 of the Company Disclosure
Letter and (ii) where the nature of its business or its ownership of its
properties make such qualification necessary or beneficial, except in such
jurisdictions where the failure to be so qualified, individually or in the
aggregate, has not had and could not reasonably be expected to have a
Company Material Adverse Effect. True and complete copies of the Company
Charter, the Company By-laws and the charter documents, by-laws,
organizational documents and partnership, limited liability company and
joint venture agreements (and in each case all amendments thereto) of each
of the Company Subsidiaries as in effect immediately prior to the date
hereof have been delivered to Parent. Neither the Company nor any of the
Company Subsidiaries is in violation of any term of its respective
certificate of incorporation or by-laws (or other organizational
documents).
SECTION 4.02 Company Subsidiaries; Equity Interests. (a) The
Company owns directly or indirectly each of the outstanding shares of
capital stock or a 100% ownership interest, as applicable, of each of the
Company Subsidiaries free and clear of all Liens. Each of the outstanding
shares of capital stock of each of the Company Subsidiaries having
corporate form is duly authorized, validly issued, fully paid and
nonassessable. The following information for each Company Subsidiary is set
forth in Section 4.02 of the Company Disclosure Letter: (i) its name and
jurisdiction of incorporation or organization; (ii) its authorized capital
stock or share capital; and (iii) the name of each stockholder or owner and
the number of issued and outstanding shares of capital stock or share
capital held by it or the type and amount of any ownership interest.
(b) Except for its interests in the Company Subsidiaries, neither
the Company nor any Company Subsidiary (i) owns, has any right to, or is
involved in negotiations to, acquire, directly or indirectly, any capital
stock, membership interest, partnership interest, joint venture interest or
other equity interest in any Person or (ii) has the ability to control
(whether through the ownership of voting securities or otherwise) any other
Person.
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SECTION 4.03 Capital Structure. The authorized capital stock of
the Company consists of 15,000,000 shares of Company Common Stock and
500,000 shares of preferred stock, par value $0.01 per share (the "Company
Preferred Stock" and collectively with the Company Common Stock, "Company
Capital Stock"). As of the date hereof, (i) 8,092,572 shares of Company
Common Stock and no shares of Company Preferred Stock were issued and
outstanding, (ii) 39,200 shares of Company Common Stock and no shares of
Company Preferred Stock were held by the Company in its treasury, and (iii)
1,189,414 shares of Company Common Stock were subject to outstanding
Company Employee Stock Options and the weighted average exercise price of
such options was $4.73 per share. Section 4.03 of the Company Disclosure
Letter sets forth a full list of all outstanding Company Employee Stock
Options, including the name of the Person to whom such options have been
granted, the number of shares subject to each option, the per share
exercise price for each option, the vesting schedule for each option and
whether such option automatically terminates in the event of a change in
control of the Company. Except as set forth above, and except for the ESPP,
as of the date hereof, no shares of capital stock or other voting
securities of the Company were issued, reserved for issuance or
outstanding. All outstanding shares of Company Capital Stock are, and all
such shares that may be issued prior to the Effective Time will be when
issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to or issued in violation of any purchase option, call option,
right of first refusal, preemptive right, subscription right or any similar
right under any provision of the DGCL, the Company Charter, the Company By-
laws or any Contract to which the Company is a party or otherwise bound.
There are no Voting Company Debts, Company Warrants or Company SARs issued
or outstanding and the only rights outstanding under any Company Option
Plan are Employee Stock Options. Except as set forth above, as of the date
of this Agreement, there are no options, warrants, rights, convertible or
exchangeable securities, "phantom" stock rights, stock appreciation rights,
stock-based performance units, commitments, contracts, arrangements or
undertakings of any kind to which the Company or any Company Subsidiary is
a party or by which any of them is bound (A) obligating the Company or any
Company Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other equity
interests in, or any security convertible or exercisable for or
exchangeable into any capital stock of or other equity interest in, the
Company or of any Company Subsidiary or any Voting Company Debt or (B)
obligating the Company or any Company Subsidiary to issue, grant, extend or
enter into any such option, warrant, call, right, security, commitment,
Contract, arrangement or undertaking. Except as set forth in Section 4.03
of the Company Disclosure Letter, there are not any (1) outstanding
contractual obligations of the Company or any Company Subsidiary to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company or any Company Subsidiary, or (2) voting trusts or other agreements
or understandings to which the Company or any of the Company Subsidiaries
is a party with respect to the voting or transfer of capital stock of the
Company or any of the Company Subsidiaries.
SECTION 4.04 Authorization; Validity of Agreement; Necessary
Action. (a) The Company has full corporate power and authority to execute
and deliver each Transaction Agreement to which it is a party and each
agreement, document and instrument to be executed and delivered by or on
behalf of it pursuant to, or in connection with or as contemplated by the
Transaction Agreements and to consummate the Transactions. The execution,
delivery and performance by the Company of
19
each Transaction Agreement to which it is a party and the consummation by
the Company of the Transactions have been duly authorized by all necessary
corporate action on the part of the Company, and except for the Company
Stockholder Approval in the case of the Merger, no other corporate action
on the part of the Company is necessary to authorize the consummation of
the Transactions. The Transaction Agreements to which the Company is a
party have been duly executed and delivered by the Company and constitute
(assuming the due authorization, execution and delivery by Parent and Sub),
valid and binding obligations of the Company enforceable against the
Company in accordance with their respective terms, except to the extent
that enforceability may be limited by applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally and subject to general principles of equity.
(b) The Company Board, at a meeting duly called and held prior to
execution of any of the Transaction Agreements, duly adopted resolutions by
a unanimous vote of those directors present at the meeting (i) approving
and declaring advisable this Agreement and the other Transaction Agreements
to which the Company is a party, the Merger and the other Transactions,
(ii) determining that the terms of the Offer, the Merger and the other
Transactions are fair to and in the best interests of the Company and its
stockholders, (iii) recommending that the holders of Company Common Stock
accept the Offer and tender their shares of Company Common Stock pursuant
to the Offer, (iv) recommending that the Company's stockholders approve and
adopt this Agreement and (v) adopting this Agreement and the other
Transaction Agreements to which the Company is a party. Such resolutions
are sufficient to render inapplicable to Parent and Sub and this Agreement
and the other Transaction Agreements to which the Company is a party, the
Offer, the Merger and the other Transactions the provisions of Section 203
of the DGCL. The Company has been advised by each of its directors and
officers that each such Person intends to tender all shares of Company
Common Stock owned by such Person pursuant to the Offer, except to the
extent of any restrictions created by Section 16(b) of the Exchange Act.
(c) The only vote of holders of any class or series of Company
Capital Stock necessary to approve and adopt this Agreement and the Merger
is the approval of this Agreement by the holders of a majority of the
outstanding shares of Company Common Stock (the "Company Stockholder
Approval"). No vote or approval of any holder of Company Capital Stock is
necessary to approve any Transaction Agreement other than this Agreement or
to consummate the Offer or any Transaction other than the Merger.
SECTION 4.05 No Conflicts; Consents. Except as set forth in
Section 4.05 of the Company Disclosure Letter, the execution and delivery
by the Company of each Transaction Agreement to which it is a party do not,
and the consummation of the Offer, the Merger and the other Transactions
and compliance with the terms hereof and thereof will not, conflict with,
or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any Person
under, or result in the creation of any Lien (other than Permitted Liens)
upon any of the properties or assets of the Company or any Company
Subsidiary under, any provision of (i) the Company Charter, the Company
By-laws or the
20
comparable charter or organizational documents of any Company Subsidiary,
(ii) any Material Contract or (iii) subject to the filings and other
matters referred to in the following sentence, any provision of any Order
or Applicable Law applicable to the Company or any Company Subsidiary or
their respective properties or assets, other than, in the cases of clause
(ii) or (iii) above, any such items that, individually or in the aggregate,
have not had and could not reasonably be expected to have a Company
Material Adverse Effect. Except as set forth in Section 4.05 of the Company
Disclosure Letter, no Consent of, or registration, declaration or filing
with, any Governmental Entity is required to be obtained or made by or with
respect to the Company or any Company Subsidiary in connection with the
execution, delivery and performance of any Transaction Agreement to which
it is a party or the consummation of the Transactions, other than (A)
compliance with and filings under the HSR Act, (B) the filing with the SEC
of (1) the Schedule 14D-9, (2) a Proxy Statement, if such approval is
required by Applicable Law, and (3) such reports under Section 13 of the
Exchange Act, as may be required in connection with this Agreement and the
other Transaction Agreements, the Offer, the Merger and the other
Transactions, (C) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate documents with
the relevant authorities of the other jurisdictions in which the Company is
qualified to do business, (D) such filings as may be required in connection
with the Taxes described in Section 7.07, and (E) such other items as are
set forth in Section 4.05 of the Company Disclosure Letter.
SECTION 4.06 SEC Documents; Financial Statements; Undisclosed
Liabilities. (a) The Company has timely filed with the SEC all Company SEC
Documents. As of its respective date, each Company SEC Document, including,
without limitation, any financial statements or schedules included therein,
complied in all material respects with the requirements of the Securities
Act and Exchange Act, as the case may be, and the rules and regulations of
the SEC promulgated thereunder applicable to such Company SEC Documents,
and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading. Except to the extent that information
contained in any Company SEC Document has been revised or superseded by a
later filed Filed Company SEC Document, none of the Company SEC Documents
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 light of the circumstances under which they were
made, not misleading.
(b) The Financial Statements comply as to form in all material
respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP (except, in the case of 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 in the notes thereto) and
fairly present the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
21
(c) The Company and the Company Subsidiaries have no liabilities
or obligations of any nature, whether accrued, absolute, contingent or
otherwise, asserted or unasserted, due or to become due, known or unknown,
and whether or not required to be disclosed on a balance sheet prepared in
accordance with GAAP, except liabilities (i) stated or adequately reserved
against in the Financial Statements of the Company included in the Filed
Company SEC Documents or disclosed in Section 4.06(b) of the Company
Disclosure Letter, or (ii) incurred in the ordinary and usual course of
business since December 31, 2000.
SECTION 4.07 Information Supplied. None of the information
supplied or to be supplied by the Company for inclusion or incorporation by
reference in (i) the Offer Documents or the Schedule 14D-9 will, at the
time such document is filed with the SEC, at any time it is amended or
supplemented or at the time it is first published, sent or given to the
Company's stockholders, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, or (ii) the Proxy Statement
will, at the date it is first mailed to the Company's stockholders or at
the time of the Company Stockholders 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. The Schedule
14D-9 and the Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder, except that no representation is made
by the Company with respect to statements made or incorporated by reference
therein based on information supplied by Parent or Sub for inclusion or
incorporation by reference therein.
SECTION 4.08 Absence of Certain Changes or Events. Except as
disclosed in the Filed Company SEC Documents or in Section 4.08 of the
Company Disclosure Letter, from the date of the most recent audited
financial statements included in the Filed Company SEC Documents to the
date of this Agreement, the Company has conducted its business only in the
ordinary and usual course of business, and during such period there has not
been (a) any Company Material Adverse Effect, (b) any change by the Company
in its accounting or tax principles or practices, (c) any declaration,
payment or setting aside for payment of any dividends, or any redemption,
purchase or other acquisition of any of its capital stock, or (d) any
revaluation by the Company of any of its assets other than in the ordinary
and usual course of business.
SECTION 4.09 Taxes. (a) Each of the Company and the Company
Subsidiaries has filed all Tax Returns required to be filed through the
date hereof, and has paid or caused to be paid all material Taxes required
to be paid through the date hereof as shown on any Tax Return, except Taxes
which have not yet accrued or otherwise become due or accrued Taxes which
are in dispute, for which adequate provision has been made in the most
recent audited financial statements included in the Filed Company SEC
Documents. All such Tax Returns were correct and complete in all material
respects. The provisions for Taxes on the Financial Statements is
sufficient for the payment of all accrued and unpaid Taxes of any nature of
the Company and the Company Subsidiaries, whether or not assessed or
disputed. All material Taxes and other material assessments and levies
which the Company or any of the Company Subsidiaries is required to
withhold or collect have been
22
withheld and collected and have been paid over to the proper Governmental
Entities. Except as set forth in Section 4.09 of the Company Disclosure
Letter, there is no pending dispute or claim concerning any Tax liability
of the Company or any of the Company Subsidiaries either (A) claimed or
raised by any Tax Authority or (B) as to which the Company has Knowledge
based upon personal contact with any agent of or other Person acting on
behalf of or for such Tax Authority. Except as set forth in Section 4.09 of
the Company Disclosure Letter, neither the Company nor any of the Company
Subsidiaries has received notice of any audit of any Tax Return filed by
such Person. Except as set forth in Section 4.09 of the Company Disclosure
Letter, (A) neither the Company nor any of the Company Subsidiaries has
received written notice of any claim made by any authority in a
jurisdiction where the Company or such Company Subsidiary does not file Tax
Returns that the Company or such Company Subsidiary is or may be subject to
taxation by that jurisdiction, and (B) there is no such claim as to which
the Company has Knowledge based upon personal contact with any agent of or
other Person acting on behalf of or for such Tax Authority. There are no
Liens recorded or asserted on any of the assets or properties of the
Company or any of the Company Subsidiaries that arose in connection with
any failure (or alleged failure) to pay any Tax.
(b) The Company has made available to Parent correct and complete
copies of all Tax Returns, examination reports, statements of deficiencies
assessed against or agreed to by the Company or any of the Company
Subsidiaries and all other communications relating thereto since December
31, 1997.
(c) Neither the Company nor any of the Company Subsidiaries has
waived any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency. Except as
set forth in Section 4.09 of the Company Disclosure Letter, neither the
Company nor any of the Company Subsidiaries currently is the beneficiary of
any extension of time within which to file any Tax Return.
(d) Neither the Company nor any of the Company Subsidiaries has
filed a consent under Section 341(f) of the Code concerning collapsible
corporations or agreed to have Section 341(f)(2) of the Code apply. Except
as set forth in Section 4.09 of the Company Disclosure Letter, neither the
Company nor any of the Company Subsidiaries has made any payments, is
obligated to make any payments, or is party to any agreement that would
obligate it to make any payments that will not be deductible under Section
280G or Section 162(m) of the Code. Neither the Company nor any of the
Company Subsidiaries has been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code. Each
of the Company and the Company Subsidiaries has disclosed on its respective
federal income Tax returns all positions taken therein that could give rise
to a substantial understatement of federal income Tax within the meaning of
Section 6662 of the Code. Neither the Company nor any of the Company
Subsidiaries is a party to any Tax allocation or sharing agreement. Neither
the Company nor any of the Company Subsidiaries (A) has been a member of an
affiliated group filing a consolidated federal income Tax return or (B) has
any liability for the Taxes of any Person under Treasury Regulation
ss.1.1502-6 (or any similar provision of state, local, or foreign law), as
a transferee or successor, by contract or agreement. Neither the Company
23
nor any of the Company Subsidiaries is or will be required to include in
income any adjustment pursuant to Section 481(a) of the Code by reason of a
voluntary change in accounting method initiated by the Company or a Company
Subsidiary (nor does the Company have any Knowledge that the Internal
Revenue Service has proposed any such adjustment or change of accounting
method). There are no requests for rulings or determinations in respect of
any Tax or Tax matter pending between the Company or any of the Company
Subsidiaries and any Tax Authority.
(e) Each Affiliated Group has filed all income Tax Returns that it
was required to file for each Tax Period during which any of the Company
and the Company Subsidiaries was a member of the group. All such Tax
Returns were correct and complete (A) in all respects insofar as they
relate to any of the Company and the Company Subsidiaries and (B) in all
material respects insofar as they do not relate to the Company and the
Company Subsidiaries. All income Taxes owed by any Affiliated Group
(whether or not shown on any Tax Return) have been paid for each taxable
period during which any of the Company and the Company Subsidiaries was a
member of the group.
(f) To the Knowledge of the Company there is no dispute or claim
concerning any income Tax liability of any Affiliated Group for any taxable
period during which any of the Company and the Company Subsidiaries was a
member of the group either (A) claimed or raised by any authority in
writing or (B) as to which the Company has Knowledge based upon personal
contact with any agent of such authority. No Affiliated Group has waived
any statute of limitations in respect of any income Taxes or agreed to any
extension of time with respect to an income Tax assessment or deficiency
for any taxable period during which any of the Company and Company
Subsidiaries was a member of the group.
SECTION 4.10 Benefit Plans; ERISA Compliance; Excess Parachute
Payments. (a) Section 4.10 of the Company Disclosure Letter contains a true
and complete list of each "employee benefit plan" (within the meaning of
section 3(3) of ERISA, including, without limitation, multiemployer plans
within the meaning of ERISA section 3(37)), stock purchase, stock option,
severance, employment, change-in-control, fringe benefit, collective
bargaining, bonus, incentive, deferred compensation and all other employee
benefit plans, agreements, programs, policies or other arrangements,
whether or not subject to ERISA (including any funding mechanism therefor
now in effect or required in the future as a result of any Transaction,
including the Offer or the Merger or otherwise), whether formal or
informal, oral or written, under which any employee or former employee of
the Company, the Company Subsidiaries or any of their respective ERISA
Affiliates has any present or future right to benefits or under which the
Company, the Company Subsidiaries or any of their respective ERISA
Affiliates has any present or contingent liability. All such plans,
agreements, programs, policies and arrangements shall be collectively
referred to as the "Company Plans".
(b) With respect to each Company Plan, the Company has delivered
to Parent a current, accurate and complete copy (or, to the extent no such
copy exists, an accurate description) thereof and, to the extent
applicable: (i) any related trust agreement or other funding instrument;
(ii) the most recent IRS determination or opinion letter, if applicable;
(iii) any summary plan description
24
and other written communications or a description of any oral
communications by the Company, the Company Subsidiaries or any of their
ERISA Affiliates concerning the extent or nature of the benefits provided
under a Company Plan; and (iv) for the three most recent years (A) the Form
5500 and attached schedules, (B) audited financial statements, and (C)
actuarial valuation reports.
(c) (i) Each Company Plan has been established and complies and
has been administered in form and operation in, in all material respects,
accordance with its terms and with the applicable provisions of ERISA, the
Code and other applicable laws, rules and regulations; (ii) to the
Knowledge of the Company, each Company Plan which is intended to be
qualified within the meaning of Code section 401(a) is so qualified and has
received a favorable determination letter or, in the case of a prototype
plan, opinion letter from the IRS as to its qualification under section
401(a) of the Code and the tax-exempt status of any trust which forms a
part of such plan under section 501(a) of the Code, which favorable
determination letter or, in the case of a prototype plan, opinion letter
covers all amendments to the plan for which the remedial amendment period
(within the meaning of section 401(b) of the Code and applicable
regulations) has expired, and to the Knowledge of the Company nothing has
occurred, whether by action or failure to act, that could reasonably be
expected to cause the loss of such qualification; (iii) to the Knowledge of
the Company no event has occurred and no condition exists that would
subject the Company, the Company Subsidiaries or any of their respective
ERISA Affiliates, either directly or indirectly, to any material Tax, fine,
Lien, penalty or other liability imposed by ERISA, the Code or other
applicable laws, rules and regulations; (iv) for each Company Plan with
respect to which a Form 5500 has been filed, no material adverse change has
occurred with respect to the matters covered by the most recent Form since
the date thereof; (v) no "prohibited transaction" (as such term is defined
in ERISA section 406 and Code section 4975) has occurred with respect to
any Company Plan; and (vi) other than continuation coverage benefits
required by Applicable Law, no Company Plan provides post-termination
welfare benefits (except as required by section 4980B of the Code) and none
of the Company or any Company Subsidiaries has any obligations to provide
any post-termination welfare benefits.
(d) With respect to any Company Plan (or the assets thereof), (i)
no actions, suits or claims (other than routine claims for benefits in the
ordinary and usual course of business) are pending or, to the Knowledge of
the Company, threatened and to the Knowledge of the Company no facts or
circumstances exist that could give rise to any such actions, suits or
claims and (ii) none of the assets of any Company Plan subject to Part IV
of Title I of ERISA are invested in employer securities or employer real
property.
(e) Except as set forth in Section 4.10 of the Company Disclosure
Letter, no Company Plan exists that could result in the payment to any
present or former employee of the Company or the Company Subsidiaries of
any money or other property or accelerate or provide any other rights or
benefits to any present or former employee of the Company or any Company
Subsidiary as a result of the Transactions, including the Offer and the
Merger, whether or not such payment would constitute a parachute payment
within the meaning of Code section 280G. Except as set forth in Section
4.10 of the Company Disclosure Letter, no Company Plan exists that could
give rise to the
25
payment of any amount that would not be deductible by the Company or the
Company Subsidiaries under Section 162(m) of the Code.
(f) With respect to each Company Plan that is subject to Title IV
of ERISA, (i) there has been no reportable event (as described in section
4043 of ERISA), (ii) no steps have been taken to terminate any such plan,
(iii) there has been no withdrawal (within the meaning of section 4063 of
ERISA) of a "substantial employer" (as defined in section 4001(a)(2) of
ERISA), (iv) no event or condition has occurred which might constitute
grounds under section 4042 of ERISA for the termination of or the
appointment of a trustee to administer any such plan; and (v) if each such
plan were terminated immediately after the Closing, there would be no
unfunded liabilities with respect to any such plan, its participants or
beneficiaries or the Pension Benefit Guaranty Corporation.
(g) None of the Company Plans are multiemployer plans.
SECTION 4.11 Litigation. Except as set forth in Section 4.11 of
the Company Disclosure Letter, there are (i) no continuing Orders, to which
the Company or any Company Subsidiary is a party or by which any of their
respective properties or assets are bound or, to the Knowledge of the
Company, to which any of their respective directors, officers or employees,
in such capacities, is a party or by which any of their respective
properties or assets are bound, and (ii) no Proceedings pending and for
which service of process has been made against the Company or any Company
Subsidiary or, to the Knowledge of the Company, against any of their
respective directors, officers or employees, in such capacities or, to the
Knowledge of the Company, threatened or pending against the Company or any
Company Subsidiary, or, to the Knowledge of the Company, against any of
their respective directors, officers or employees, at law or in equity, or
before or by any Governmental Entity. There are no Proceedings pending or,
to the Knowledge of the Company, threatened against the Company or any
Company Subsidiary which may call into question the validity or hinder the
enforceability or performance of this Agreement or any of the Transaction
Agreements.
SECTION 4.12 Compliance with Applicable Laws. (a) The business of
the Company and each Company Subsidiary has been and is being conducted in
compliance in all material respects with all Applicable Laws and Orders,
including, without limitation, all Applicable Laws and Orders relating to
antitrust or trade regulation, employment practices and procedures and the
health and safety of employees. Except as set forth in Section 4.12(a) of
the Company Disclosure Letter, none of the Company or the Company
Subsidiaries has, since June 30, 1997, been subject to any Order with
respect to any of the foregoing or received any notice, demand letter,
federal or state administrative inquiry, or formal complaint or claim with
respect to any of the foregoing or the enforcement of any of the foregoing,
nor has the Company or any Company Subsidiary been the subject of any
criminal Proceedings or convicted of any felony or misdemeanor, except for
such Orders, inquiries, complaints or claims which would not result in a
Company Material Adverse Effect. In particular, and without limiting the
foregoing, to the Knowledge of the Company: (i) neither any director,
officer, agent, employee, nor other Person associated with or acting on
behalf of the Company or any Company Subsidiary has, directly or
indirectly, used any corporate funds
26
of the Company or any Company Subsidiary for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity;
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; (ii) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; (iii) established or maintained any
unlawful or unrecorded fund of corporate moneys or other assets or
properties of the Company or any Company Subsidiary; made any false or
fictitious entry on the book or records of the Company or any Company
Subsidiary; made any bribe, rebate, payoff, influence payment, kickback, or
other unlawful payment; or (iv) made any bribe, kickback or other payment
of a similar or comparable nature, whether lawful or not, to any Person,
regardless of form, whether in money, property, or services, to obtain
favorable treatment in securing business or to obtain special concessions,
or to pay for favorable treatment for business secured or for special
concessions already obtained. The Company and each Company Subsidiary has
adequate financial controls as necessary to comply with applicable
financial auditing standards under GAAP.
(b) The Company and the Company Subsidiaries employ the number of
full-time and part-time employees as are indicated in Section 4.12(b) of
the Company Disclosure Letter. Except as set forth in Section 4.12(b) of
the Company Disclosure Letter: (i) none of the Company or any of the
Company Subsidiaries is delinquent in payments to any of its employees for
any wages, salaries, commissions, fees, bonuses or other direct
compensation for any services performed for it to the date hereof or
amounts required to be reimbursed to such employees; (ii) there are no
charges of employment discrimination, retaliation, or unfair labor
practices or strikes, slowdowns, stoppages of work, or any other concerted
interference with normal operations existing, pending or, to the Knowledge
of the Company, threatened against or involving the Company or any of the
Company Subsidiaries; (iii) there are no attempts pending or, to the
Knowledge of the Company, threatened, to organize for purposes of
collective bargaining any employees of the Company or the Company
Subsidiaries; (iv) there are no demands to recognize any Person as the
exclusive representative of any such employees; (v) no question concerning
representation exists respecting any group of employees of the Company or
any of the Company Subsidiaries; and (vi) there are no claims or charges
relating to or alleging violations of any Applicable Laws, including,
without limitation, laws relating to discrimination, harassment, health and
safety, family leave or wage payments, existing, pending or, to the
Knowledge of the Company, threatened against the Company or any of the
Company Subsidiaries nor, to the Knowledge of the Company, has there
occurred any event or does there exist any condition on the basis of which
any such claim is reasonably likely to be asserted.
SECTION 4.13 Contracts; Debt Instruments. (a) Except as disclosed
in Section 4.13(a) of the Company Disclosure Letter, there are no Material
Contracts. Neither the Company nor any of the Company Subsidiaries is in
violation of or in default under (nor, to the Knowledge of the Company,
does there exist any condition which with the passage of time or the giving
of notice or both would cause such a violation of or default under) any
Material Contract to which it is a party or by which it or any of its
properties or assets is bound, except for violations or defaults that have
not and could not, individually or in the aggregate, reasonably be expected
to result in a Company Material Adverse Effect. Each Material Contract is
in full force and effect, and is a legal, valid and
27
binding obligation of the Company or a Company Subsidiary and, to the
Knowledge of the Company, each of the other parties thereto, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and
general principles of equity (regardless of whether considered in a
proceeding in equity or at law). To the Knowledge of the Company, no
condition exists or event has occurred which (whether with or without
notice or lapse of time or both) would constitute a default by the Company
or a Company Subsidiary or any other party thereto under any Material
Contract or result (other than due to consummation of the Offer or the
Merger) in a right of termination of any Material Contract.
(b) Set forth in Section 4.13(b) of the Company Disclosure Letter
is (i) a list of all loan or credit agreements, notes, bonds, mortgages,
indentures and other agreements and instruments pursuant to which any
Indebtedness of the Company or the Company Subsidiaries in an aggregate
principal amount in excess of $100,000 is outstanding or may be incurred,
and (ii) the respective principal amounts currently outstanding thereunder.
SECTION 4.14 Guarantees. Except as otherwise noted in Section 4.14
of the Company Disclosure Letter, none of the material obligations or
liabilities of the Company or the Company Subsidiaries is guaranteed by any
Person. Section 4.14 of the Company Disclosure Letter sets forth a correct
and complete list of all guarantees by, or other contingent obligations of,
the Company or the Company Subsidiaries showing the parties and amounts
involved and the expiration dates thereof.
SECTION 4.15 Intellectual Property. (a) The Company and the
Company Subsidiaries own, or are validly licensed or otherwise have the
enforceable right to use, all Material Intellectual Property Rights which
are used in the conduct of the business of the Company and the Company
Subsidiaries, as presently conducted. Section 4.15 of the Company
Disclosure Letter sets forth a list of all patents, patent applications,
registrations and applications for registration of trademarks, service
marks, copyrights and domain names owned by the Company and the Company
Subsidiaries.
(b) Except as set forth in Section 4.15 of the Company Disclosure
Letter, no claims with respect to any Material Intellectual Property Rights
owned or used by the Company and the Company Subsidiaries are currently
being asserted or have been threatened in writing in the last three (3)
years by any Person against the Company or any of the Company Subsidiaries
(i) to the effect that the manufacture, sale, licensing or use of any of
the products or services of the Company or any of the Company Subsidiaries
as now manufactured, sold or licensed or used or proposed for manufacture,
use, sale or licensing by the Company or any of the Company Subsidiaries
infringes on any Intellectual Property Rights of another Person, (ii)
against the use by the Company or any of the Company Subsidiaries of any
Intellectual Property Rights of another Person, or (iii) challenging the
ownership by the Company or any of the Company Subsidiaries or the validity
of any of the Intellectual Property Rights owned or used by the Company and
the Company Subsidiaries, except claims which have not had and could not
reasonably be expected to have,
28
individually or in the aggregate, a Company Material Adverse Effect. Except
as set forth in Section 4.15 of the Company Disclosure Letter,
registrations of trademarks, service marks, and copyrights held by the
Company are active and subsisting, except to the extent any failure has not
had and could not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. Except as set forth in
Section 4.15 of the Company Disclosure Letter, to the Knowledge of the
Company, there is no unauthorized use, infringement or misappropriation of
any of the Intellectual Property Rights owned or used by the Company and
the Company Subsidiaries by any third party, including any employee or
former employee of the Company or any of the Company Subsidiaries, which
has had or could reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. Except as set forth in
Section 4.15 of the Company Disclosure Letter, no Material Intellectual
Property Rights owned or used by the Company and the Company Subsidiaries
or product of the Company or any of the Company Subsidiaries is subject to
any outstanding Order restricting in any manner the licensing thereof by
the Company or any of the Company Subsidiaries, except to the extent any
such restriction has not had and could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
Neither the Company nor any of the Company Subsidiaries has entered into
any Contract that is currently in effect under which the Company or any of
the Company Subsidiaries is restricted from selling, licensing or otherwise
distributing any of its current products to any class of customers, in any
geographic area, during any period of time or in any segment of the market.
SECTION 4.16 Takeover Laws. The Company's Board of Directors has
taken all action necessary to ensure that Section 203 of the DGCL will not
impose any additional procedural, voting, approval, fairness or other
restrictions on the timely consummation of the Transactions or restrict,
impair or delay the ability of Parent to engage in any transaction with the
Company or to vote or otherwise exercise all rights as a stockholder of the
Company. No other "fair price," "moratorium," "control share acquisition"
or other anti-takeover statute or regulation of any Governmental Entity is
applicable to the Company or the Transactions.
SECTION 4.17 Affiliate Transactions. Except as set forth in
Section 4.17 of the Company Disclosure Letter, there are no loans, leases
or other continuing transactions between the Company or any of the Company
Subsidiaries and any present or former stockholder, director or officer
thereof or any member of such officer's, director's or stockholder's
family, or any Person controlled by such executive officer, director or
stockholder or his or her family, including, without limitation, any
transaction that would be disclosable pursuant to Item 404 of SEC
Regulation S-K. To the Knowledge of the Company, no director or officer of
the Company or any of the Company Subsidiaries nor any of their respective
spouses or family members, owns directly or indirectly on an individual or
joint basis any interest in, or serves as an officer or director or in
another similar capacity of, any supplier or other independent contractor
of the Company or any of the Company Subsidiaries, or any organization
which has a Contract or arrangement with the Company or any of the Company
Subsidiaries.
SECTION 4.18 Environmental, Health, and Safety. Except as set forth
in Section 4.18 of the Company Disclosure Letter, (a) The Company, the Company
Subsidiaries, and their respective
29
predecessors and Affiliates have complied with all Environmental, Health,
and Safety Laws, and no action, suit, Proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed, commenced or to
the Company's Knowledge, threatened against any of them alleging any
failure so to comply, except in each case where the effect thereof would
not result in a Company Material Adverse Effect. Without limiting the
generality of the preceding sentence, the Company, the Company Subsidiaries
and their respective predecessors and Affiliates have obtained and been in
compliance with all of the terms and conditions of all Permits, licenses,
and other authorizations which are required under, and have complied with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables which are contained
in, all Environmental, Health, and Safety Laws, except in each case where
the effect thereof would not result in a Company Material Adverse Effect.
(b) None of the Company or any Company Subsidiary has received
written notice that it has any liability (and neither the Company, the
Company Subsidiaries nor their respective predecessors and Affiliates has
disposed of any Hazardous Substance, arranged for the disposal of any
Hazardous Substance, exposed any employee or other individual to any
Hazardous Substance or condition, or owned or operated any property or
facility in any manner that, could form the basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
or demand against the Company or any Company Subsidiary giving rise to any
liability) for damage to any site, location, or body of water (surface or
subsurface), for any illness of or personal injury to any employee or other
individual, or for any reason under any Environmental, Health, and Safety
Law.
SECTION 4.19 Real and Personal Property.
(a) Real Property. Schedule 4.19(a) of the Company Disclosure
Letter sets forth a complete list of all real properties that are owned by
the Company or any of the Company Subsidiaries (the "Company Owned Real
Property"). The Company and each Company Subsidiary has good and marketable
title to, or valid leasehold interests in, all real properties owned, used
or occupied by them except for such as are no longer used or useful in the
conduct of its businesses or as have been disposed of in the ordinary and
usual course of business and except for defects in title, easements,
restrictive covenants and similar encumbrances or impediments that, in the
aggregate, do not and will not materially interfere with its ability to
conduct its business as currently conducted. Except as set forth in Section
4.19(a) of the Company Disclosure Letter, all such properties, other than
properties in which the Company or the Company Subsidiaries has leasehold
interests, are free and clear of all Liens and except for (i) statutory
Liens of carriers, warehousemen, mechanics, repairmen, workmen and
materialmen incurred in the ordinary and usual course of business for
amounts not yet overdue or being contested in good faith, (ii) Liens for
Taxes not yet due and payable or being contested in good faith in
appropriate proceedings during which collection or enforcement is stayed
and (iii) Liens that, in the aggregate, do not and will not materially
interfere with the ability of the Company and the Company Subsidiaries to
conduct business as currently conducted (any or all of such liens under
clauses (i), (ii) or (iii), "Permitted Liens"). Neither the Company nor any
Company Subsidiary has an option to purchase any real property. All of the
real property leased by the Company and each of the Company Subsidiaries is
identified in Section
30
4.19(a) of the Company Disclosure Letter (herein referred to as the
"Company Leased Real Property").
(i) Status of Leases. All leases of the Company Leased
Real Property are identified in Section 4.19(a)(i) of the Company
Disclosure Letter, and true and complete copies thereof have been
delivered to Parent. Each of said leases has been duly authorized
and executed by the Company or the Company Subsidiary party
thereto, is in full force and effect and constitutes the legal,
valid and binding obligation of the Company or the Company
Subsidiary party thereto, and is enforceable in accordance with
its respective terms, except to the extent that the enforceability
may be limited by applicable bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally and subject to general principles of equity. The Company
or the Company Subsidiary party thereto has not received notice of
any default under any of said leases, nor, to the Knowledge of the
Company, has any event occurred which, with notice or the passage
of time, or both, would give rise to such a default. To the
Knowledge of the Company, the other party to each of said leases
is not in default under any of said leases and there is no event
which, with notice or the passage of time, or both, would give
rise to such a default.
(ii) Condition of Real Property. Except as set forth in
Section 4.19(a)(ii) of the Company Disclosure Letter, all premises
constituting a part of the Company Owned Real Property or the
Company Leased Real Property are in good operating condition and
repair, and there are no material defects in the physical
condition of any buildings or improvements constituting part of
the Company Owned Real Property or the Company Leased Real
Property that, individually or in the aggregate, would materially
impair the usefulness of the Company Owned Real Property or the
Company Leased Real Property for its current purposes.
(iii) Compliance with the Law. None of the Company or any
of the Company Subsidiaries has received any notice from any
Governmental Entity of any violation of any Applicable Law, Order
or Permit issued with respect to any Company Owned Real Property
or Company Leased Real Property that has not been heretofore
corrected and no such violation exists which could have a material
adverse effect on the operation of any Company Owned Real Property
or Company Leased Real Property. All improvements located on or
constituting part of any Company Owned Real Property or Company
Leased Real Property and the use and operation thereof by Company
or any of the Company Subsidiaries are in compliance in all
material respects with all Applicable Laws or Permits. None of the
Company or any of the Company Subsidiaries has received any notice
of any real estate Tax deficiency or assessment and, to the
Knowledge of the Company, there is no proposed deficiency, claim
or assessment with respect to any of the Company Owned Real
Property or the Company Leased Real Property, or any pending or
threatened condemnation thereof.
(iv) Other Matters. Neither the Company nor any Company
Subsidiary leases or subleases any real or personal property as lessor
or sublessor.
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(b) Personal Property. The Financial Statements reflect all of the
assets and properties, real and personal, used by the Company and the
Company Subsidiaries in their business or otherwise held by the Company or
a Company Subsidiary. Except as set forth in Section 4.19(b) of the Company
Disclosure Letter, the Company or one of the Company Subsidiaries has good
and valid title to all assets and properties included in the Financial
Statements or thereafter acquired, in each case free and clear of any Lien.
SECTION 4.20 Insurance. The physical properties, assets, business,
operations, employees, officers and directors of the Company and the
Company Subsidiaries are insured to the extent disclosed in Section 4.20 of
the Company Disclosure Letter. There is no claim by the Company or any of
the Company Subsidiaries pending under any such policies as to which
coverage has been questioned, denied or disputed by the insurer. Said
insurance policies and arrangements are in full force and effect, all
premiums with respect thereto are currently paid, and the Company and the
Company Subsidiaries are in compliance with the terms thereof. Section 4.20
of the Company Disclosure Letter also sets forth a list of insurance
policies to which other parties (including Affiliates of the Company) are
named insureds which relate to the properties, assets or operations of the
Company or any Company Subsidiary and the names of such other parties. No
notice of cancellation or termination has been received by the Company or
any Company Subsidiary with respect to any insurance policy described in
Section 4.20 of the Company Disclosure Letter. The Company and each Company
Subsidiary carry insurance in amounts and types of coverage which are
adequate and customary in the industry and against risks and losses which
are usually insured against by Persons holding or operating similar
properties and similar businesses. No claims have been asserted by the
Company or any Company Subsidiary under any of the insurance policies of
the Company or any Company Subsidiary or relating to their properties,
assets or operations. Each such insurance policy shall continue to be in
full force and effect following consummation of the Transactions.
SECTION 4.21 Compensation. Section 4.21 of the Company Disclosure
Letter constitutes a full and complete list of each director, officer or
employee of the Company or any Company Subsidiary whose total compensation
from the Company or the Company Subsidiaries on an annualized basis exceeds
$100,000 specifying their names and job designations, the total amount paid
or payable, the basis of such compensation, whether fixed or commission or
a combination thereof, and their current rate of pay. Except as otherwise
disclosed in Section 4.21 of the Company Disclosure Letter, since June 30,
2000 there has been no material change in compensation, by means of wages,
salaries, bonuses, gratuities or otherwise, to any such director, officer
or employee of the Company or any Company Subsidiary or any change in
compensation, either material in amount or other than in the ordinary and
usual course of business, to any other director, officer or employee of the
Company or any Company Subsidiary.
SECTION 4.22 Certain Advances. Except for agreements set forth in
Section 4.17 of the Company Disclosure Letter, there are no loans or
advances that individually or in the aggregate are in excess of $100,000 of
the Company or any Company Subsidiary owing by directors, officers,
32
employees, consultants or shareholders of the Company or any Company
Subsidiary, or owing by any Affiliate of any director or officer of the
Company or any Company Subsidiary, other than advances in the ordinary and
usual course of business to officers and employees for reimbursable
business expenses.
SECTION 4.23 Licenses and Permits. The Company and each Company
Subsidiary have obtained, and are in compliance in all material aspects
with, all necessary licenses, franchises, permits, consents, approvals,
Orders, certificates, authorizations, declarations and filings
(collectively, "Permits") required by all Governmental Entities for the
conduct of the business and operations of the Company and each Company
Subsidiary as now conducted. There are no proceedings pending or, to the
Knowledge of the Company, threatened which may result in the revocation,
cancellation or suspension, or any adverse modification of any such
Permits. There are no disciplinary actions under any such Permits pending
or, to the Knowledge of the Company, threatened, against the Company, any
Company Subsidiary or any of their respective officers, directors or
employees. No such prior proceeding or disciplinary action has during the
preceding twenty-four (24) months resulted in any materially adverse action
against the Company or any Company Subsidiary and, to the Knowledge of the
Company, there are no facts which may give rise to such Proceedings or
disciplinary actions. Section 4.23 of the Company Disclosure Letter
contains a correct and complete list of all such Permits required under any
Environmental, Health and Safety Laws.
SECTION 4.24 Copies of Certain Documents. The Company has
heretofore made available to the Parent true and complete copies of: (i)
all agreements entered into by the Company or any Company Subsidiary, if
any, providing for the acquisition or disposition of businesses or product
or service lines since January 1, 1998; and (ii) a complete list of all
investments of the Company and the Company Subsidiaries, if any, in
marketable or other securities (whether debt or equity) for investments
made in the twelve (12) months prior to the date hereof.
SECTION 4.25 Underlying Documents. All documents listed or
described in the Company Disclosure Letter and furnished to Parent are true
and complete copies, and there are no amendments or modifications thereto,
except as expressly noted in the Company Disclosure Letter in which such
documents are listed or described. The minute books of the Company and each
Company Subsidiary contain accurate records of all corporate actions taken
by the directors and shareholders of the Company and each Company
Subsidiary.
SECTION 4.26 Risk Management Instruments. There are no interest
rate swaps, caps, floors, option agreements, futures and forward contracts
and other similar risk management arrangements, whether entered into for
the Company's own account, or for the account of any of the Company
Subsidiaries or their customers.
SECTION 4.27 Brokers; Fees and Expenses. (a) Except for the fees
payable by the Company to JPMorgan Securities Inc., that are quantitatively
disclosed in Section 4.27 of the Company Disclosure Letter, no broker,
investment banker, financial advisor or other Persons are entitled to
33
any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the Offer, the Merger and or any other
Transaction based upon arrangements made by or on behalf of the Company.
(b) No valid claim against the Company or the Surviving
Corporation or, to the Company's Knowledge, against Parent or Sub exists or
will exist for payment of any "topping," "break-up," "bust-up" or
"termination" fee or any similar compensation or payment arrangement as a
result of the transactions contemplated hereby, including the Offer and the
Merger except as provided by the Transaction Agreements.
SECTION 4.28 Opinion of Financial Advisor. The Company has
received the opinion of JPMorgan Securities Inc., the Company's financial
advisor dated the date of this Agreement, that, as of such date, the
consideration to be received in the Offer and the Merger by the Company's
stockholders is, in the opinion of such advisor, fair to the Company's
stockholders from a financial point of view, a signed copy of which opinion
has been delivered to Parent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub jointly and severally represent and warrant to the
Company as follows:
SECTION 5.01 Organization, Standing and Power. (a) Each of Parent
and Sub is duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is organized and has all requisite
corporate power and authority to conduct its businesses as presently
conducted, other than such franchises, licenses, Permits, authorizations
and approvals the lack of which, individually or in the aggregate, has not
had and could not reasonably be expected to have a Parent Material Adverse
Effect.
SECTION 5.02 Sub. Sub is a wholly owned Subsidiary of Parent and,
since the date of its incorporation, Sub has not carried on any business or
conducted any operations other than the execution of the Transaction
Agreements to which it is a party, the performance of its obligations
hereunder and thereunder and matters ancillary thereto.
SECTION 5.03 Financing. Parent has or has available to it, and
will make available to Sub all funds necessary to consummate all the
Transactions and pay the related fees and expenses of Parent and Sub.
SECTION 5.04 Ownership of Company Common Stock. Except for the
transactions contemplated by the Stock Option and Tender Agreements, as of
the date of this Agreement, neither Parent nor Sub beneficially owns any
Company Common Stock.
34
SECTION 5.05 Authorization; Validity of Agreement; Necessary
Action. Each of Parent and Sub has full corporate power and authority to
execute and deliver each Transaction Agreement to which it is a party and
each agreement, document and instrument to be executed and delivered by or
on behalf of Parent and/or Sub, as the case may be, pursuant to or in
connection with the Transaction Agreements and to consummate the
Transactions. The Board of Directors of Sub (the "Sub Board") has adopted a
resolution approving this Agreement. The execution, delivery and
performance by Parent and Sub of this Agreement and the Transaction
Agreements to which either is a party and the consummation of the
Transactions have been duly authorized by the Board of Directors of Parent
(the "Parent Board") and the Sub Board and by Parent as the sole
stockholder of Sub and, except as set forth in the Section 5.05 of the
Parent Disclosure Letter, no other corporate action on the part of Parent
or Sub or any other Person is necessary to authorize the execution and
delivery by Parent and Sub of this Agreement, any Transaction Agreement or
the consummation of the Transactions. This Agreement, assuming due and
valid authorization, execution and delivery thereof by the Company,
constitutes, and when executed and delivered by the Parent and/or Sub, as
the case may be, each other Transaction Agreement will constitute, legal,
valid and binding obligations of each of Parent and Sub, as the case may
be, enforceable against each of them in accordance with its terms, except
to the extent that enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and subject to general principles of equity.
SECTION 5.06 No Conflicts; Consents. The execution and delivery by
each of Parent and Sub of each Transaction Agreement to which it is a
party, do not, and the consummation of the Offer, the Merger and the other
Transactions and compliance with the terms hereof and thereof will not,
conflict with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation under, or to
increased, additional, accelerated or guaranteed rights or entitlements of
any Person under, or result in the creation of any Lien (other than
Permitted Liens) upon any of the properties or assets of the Parent or Sub,
any provision of (i) the charter or organizational documents of Parent or
Sub, (ii) any material Contract to which Parent or Sub is a party or by
which any of their respective properties or assets is bound or (iii)
subject to the filings and other matters referred to in the following
sentence, any Order or Applicable Law applicable to Parent or Sub or their
respective properties or assets, other than, in the case of clauses (ii)
and (iii) above, any such items that, individually or in the aggregate,
have not had and could not reasonably be expected to have a Parent Material
Adverse Effect. No Consent of, or registration, declaration or filing with,
any Governmental Entity is required to be obtained or made by or with
respect to Parent or Sub in connection with the execution, delivery and
performance of any Transaction Agreement to which Parent or Sub is a party
or the consummation of the Transactions, other than (A) compliance with and
filings under the HSR Act, (B) the filing with the SEC of (x) the Offer
Documents and (y) such reports under Sections 13 and 16 of the Exchange
Act, as may be required in connection with this Agreement and the other
Transaction Agreements, the Offer, the Merger and the other Transactions,
(C) the filing of the Certificate of Merger with the Secretary of State of
the State of Delaware, (D) such filings as may be required in connection
with the taxes described in Section 7.08, (E) Consents, registrations,
declarations or filings required to be made solely by reason of the
Company's
35
participation in the Transactions and (F) such other items as are set forth
in Section 5.06 of the Parent Disclosure Letter.
SECTION 5.07 Information Supplied. None of the information
supplied or to be supplied in writing by Parent or Sub for inclusion or
incorporation by reference in (i) Offer Documents or the Schedule 14D-9
will, at the time such document is filed with the SEC, at any time it is
amended or supplemented or at the time it is first published, sent or given
to the Company's stockholders, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading, or (ii) the Proxy Statement
will, at the date it is first mailed to the Company's stockholders or at
the time of the Company Stockholders 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. The Offer
Documents will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation is made by Parent or Sub with respect to
statements made or incorporated by reference therein based on information
supplied by the Company for inclusion or incorporation by reference
therein.
SECTION 5.08 Brokers. Neither Parent nor Sub has entered into any
contract, agreement, arrangement or understanding with any Person which may
result in the obligation of Parent or Sub to pay any finder's fees,
brokerage or agent's commission or other like payments in connection with
the negotiations leading to the Transaction Agreements or consummation of
the Transactions. Parent is not aware of any claim for payment of any
finder's fees, brokerage or agent's commissions or other like payments
against Parent or Sub in connection with the negotiations leading to the
Transaction Agreements or consummation of the Transactions.
SECTION 5.09 Litigation. As of the date of this Agreement, there
are no Proceedings pending or, to the Knowledge of Parent, threatened
against Parent or Sub which may call into question the validity or hinder
the enforceability or performance of this Agreement or any of the
Transaction Agreements.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 6.01 Conduct of Business.
(a) Conduct of Business by the Company. Except for matters
expressly permitted by the Transaction Agreements, from the date of this
Agreement to the Effective Time the Company shall, and shall cause each
Company Subsidiary to, conduct its business in the ordinary and usual
course of business and use its reasonable best efforts to preserve intact
its current business organization,
36
keep available the services of its officers and employees and maintain its
relationships with customers, suppliers, vendors, licensors, licensees,
distributors and agents and others having business dealings with them. In
addition, and without limiting the generality of the foregoing, except for
matters expressly permitted by this Agreement, and except as set forth in
Section 6.01 of the Company Disclosure Letter, from the date of this
Agreement to the Effective Time, the Company shall not, and shall not
permit any Company Subsidiary to, do any of the following without the prior
written consent of Parent (which consent shall not be unreasonably withheld
or delayed):
(i) (A) declare, set aside or pay any dividends on, or
make any other distributions in respect of, any of its capital
stock, other than dividends and distributions by a direct or
indirect wholly owned subsidiary of the Company to its parent, (B)
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, (C)
purchase, redeem or otherwise acquire any shares of capital stock
of the Company or any Company Subsidiary or any other securities
thereof or any rights, warrants or options to acquire any such
shares or other securities or (D) adopt a plan of complete or
partial liquidation or resolutions providing for or authorizing
such liquidation or a dissolution, merger, consolidation,
restructuring, recapitalization or reorganization of the Company
or any of the Company Subsidiaries;
(ii) authorize for issuance, issue, deliver, sell or
grant (A) any shares of its capital stock, (B) any Voting Company
Debt or other voting securities, (C) any securities convertible
into or exchangeable for, or any options, warrants or rights to
acquire, any such shares, voting securities or convertible or
exchangeable securities or (D) any "phantom" stock, "phantom"
stock rights, stock appreciation rights or stock-based performance
units, other than the issuance of Company Common Stock upon the
exercise of Company Employee Stock Options outstanding on the date
of this Agreement and in accordance with their present terms;
(iii) amend its certificate of incorporation, by-laws or
other comparable charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any Person or
division thereof or (B) any assets outside the ordinary and usual
course of business;
(v) (A) grant to any present or former employee, officer
or director of the Company or any Company Subsidiary any increase
in compensation or fringe benefits, except for increases in salary
for non-officer employees in the ordinary and usual course of
business, (B) grant to any present or former employee, officer or
director of the Company or any Company Subsidiary any increase in
severance or termination pay, (C) other than entering into
employment agreements with employees of the Company approved in
advance by
37
Parent, enter into or amend any employment, consulting,
indemnification, severance or termination agreement with any such
present or former employee, officer or director, (D) establish,
adopt, enter into or amend in any material respect any collective
bargaining agreement or Company Plan, (E) except as permitted or
required under Section 7.04, take any action to accelerate any
rights or benefits, or make any material determinations not in the
ordinary and usual course of business, under any collective
bargaining agreement or Company Plan, (F) loan or advance money or
other property in excess of $25,000 in the aggregate, to all
present or former employees, officers or directors of the Company
or any Company Subsidiary or (G) except as permitted or required
under Section 7.04, grant any new, or amend any existing, Company
Employee Stock Option or enter into any agreement under which any
Company Employee Stock Option would be required to be issued;
(vi) make any change in accounting methods, principles or
practices affecting the reported consolidated assets, liabilities
or results of operations of the Company, except insofar as may
have been required by a change in GAAP;
(vii) sell, lease, license or otherwise dispose of or
permit to become subject to any Lien, other than a Permitted Lien,
any properties or assets, tangible or intangible, except sales of
inventory and excess or obsolete assets in the ordinary and usual
course of business;
(viii) except as disclosed in Section 6.01(a)(viii) of
the Company Disclosure Letter, (A) incur any indebtedness for
borrowed money or guarantee any such indebtedness of another
Person, issue or sell any debt securities or warrants or other
rights to acquire any debt securities of the Company or any
Company Subsidiary, guarantee any debt securities of another
Person, enter into any "keep well" or other agreement to maintain
any financial statement condition of another Person or enter into
any arrangement having the economic effect of any of the
foregoing, except for short-term borrowings incurred in the
ordinary and usual course of business, or (B) make any loans,
advances or capital contributions to, or investments in, any other
Person, other than to or in the Company or any direct or indirect
wholly owned subsidiary of the Company or to customers of the
Company or a Company Subsidiary in the ordinary and usual course
of business;
(ix) make or agree to make any new capital expenditure or
expenditures that, in the aggregate, are in excess of $250,000;
(x) make any Tax election or settle or compromise any Tax
liability or refund;
(xi) (A) pay, discharge or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction, in the ordinary and usual course of
business or in accordance with their terms, of liabilities
reflected or reserved against in the most recent consolidated
financial statements of the Company included in the Filed SEC
Documents or incurred in the ordinary and usual course of
business, (B) cancel any material indebtedness (individually or in
the
38
aggregate) or waive any claims or rights of substantial value or
(C) waive the benefits of, or agree to modify in any manner, any
confidentiality, standstill or similar agreement to which the
Company or any Company Subsidiary is a party;
(xii) amend any Material Contract providing for payments
or otherwise involving amounts in excess of $100,000 or, except in
the ordinary and usual course of business, enter into any Material
Contract; and
(xiii) authorize any of, or commit or agree to take any of,
the foregoing actions.
(b) Other Actions. The Company shall not, and shall not permit any
Company Subsidiary to, take any action that would, or that could reasonably
be expected to, result in (i) any of the representations and warranties of
the Company set forth in any Transaction Agreement becoming untrue or (ii)
any condition to the Offer set forth in Exhibit A or any condition to the
Merger set forth in Article VIII not being satisfied in all material
respects.
(c) Advice of Changes. (i) The Company shall promptly advise
Parent in writing of any change or event having, or which, insofar as can
reasonably be foreseen, would have, a Company Material Adverse Effect.
(ii) After the date hereof, the Company shall have the
continuing obligation promptly to inform Parent in writing with
respect to any matter hereafter arising or discovered which would
have been required to be set forth or described in the Company
Disclosure Letter or would have been required to be taken as an
exception to any representation or warranty of the Company in
order for the representations and warranties of the Company to be
true and correct at and as of the times such representations and
warranties are required to be true and correct in accordance with
this Agreement; provided, however, that no such information
supplied to Parent shall be deemed to amend or supplement the
Company Disclosure Letter or to correct or cure any breach of or
inaccuracy in any representation or warranty of the Company made
in this Agreement.
SECTION 6.02 No Solicitation. (a) From the date of this Agreement
until the earlier of the Effective Time or the termination of this
Agreement, the Company and the Company Subsidiaries shall not (and the
Company will use its best efforts to cause each of its and each of its
Company Subsidiaries' officers, directors or management employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its Subsidiaries not to) directly
or indirectly (i) solicit, encourage, engage in discussions or negotiate
with any Person (whether such discussions or negotiations are initiated by
the Company or otherwise) or take any other action intended or designed to
facilitate any inquiry or effort of any Person (other than Parent) relating
to any possible business combination with or any possible acquisition of
the Company (whether by way of merger, purchase of capital stock, purchase
of assets or otherwise) or any material portion of its capital stock or
assets (with any such efforts by any such Person, including a firm proposal
to make such an acquisition, to be referred to as an "Alternative
Acquisition"), (ii)
39
provide information with respect to the Company to any Person, other than
Parent, relating to a possible Alternative Acquisition by any Person, other
than Parent, (iii) enter into an agreement with any Person, other than
Parent, providing for a possible Alternative Acquisition, or (iv) make or
authorize any statement, recommendation or solicitation in support of any
possible Alternative Acquisition by any Person, other than by Parent.
Notwithstanding the foregoing, prior to the acceptance for payment of
Company Common Stock equal to at least the Minimum Tender Condition
pursuant to, and subject to the conditions of, the Offer, the Company Board
(or any committee thereof) may, to the extent required by the fiduciary
obligations of the Company Board under Delaware law, as determined in good
faith by the Company Board (or any committee thereof), in response to a
proposal for an Alternative Acquisition ("Alternative Acquisition
Proposal") that the Company Board (or any committee thereof) determines, in
good faith after consultation with independent counsel and an independent
financial advisor, is or is reasonably likely to result in a Superior
Company Proposal (as defined in Section 6.02(e)), that was not solicited by
the Company and that did not otherwise result from a breach of this Section
6.02(a) and subject to providing prior written notice of its decision to
take such action to Parent, (x) furnish information with respect to the
Company to the Person or group making such Alternative Acquisition Proposal
and its representatives pursuant to a confidentiality agreement with terms
not materially more favorable to the Person making the Alternative
Acquisition Proposal than those applicable to Parent under the
Confidentiality Agreement (except that such confidentiality agreement need
not contain any standstill provisions) and (y) participate in discussions
and negotiations with such Person or group and its representatives to the
extent required by the fiduciary duties of the Company Board regarding such
Alternative Acquisition Proposal. The Company shall, and shall cause its
representatives to, cease immediately all discussions and negotiations that
may have occurred prior to the date of this Agreement regarding any
proposal that constitutes, or may reasonably be expected to lead to, an
Alternative Acquisition Proposal. For purposes of this Section 6.02 and
Section 9.02(b)(ii), the term "Person" shall include any group as defined
in the Exchange Act. Without limiting the foregoing, it is understood that
any violation of the restrictions set forth in this Section 6.02 by any
director, officer or employee of the Company or any of its subsidiaries or
any investment banker, financial advisor, attorney, accountant or other
representative of the Company or any Company Subsidiary shall be deemed to
be a breach of this Section by the Company.
(b) Neither the Company Board nor any committee thereof shall (i)
withdraw or modify, or propose to withdraw or modify, in a manner adverse
to Parent or Sub, the approval or recommendation by the Company Board or
any such committee of this Agreement, the Offer or the Merger, (ii) approve
or cause or permit the Company to enter into any letter of intent,
agreement in principle, definitive agreement or similar agreement
constituting or relating to, or which is intended to or is reasonably
likely to lead to any Alternative Acquisition Proposal, (iii) approve or
recommend, or propose to approve or recommend, any Alternative Acquisition
Proposal or (iv) agree or resolve to take actions set forth in clauses (i),
(ii) or (iii) of this sentence. Notwithstanding the foregoing, if, during
the period prior to the acceptance for payment of the Company Common Stock
equal to the Minimum Tender Condition pursuant to the Offer, the Company
Board receives a Superior Company Proposal and the Company Board determines
in good faith, that it is necessary to do so in order to comply with its
fiduciary obligations under Delaware law, the Company Board
40
may, during such period, in response to a Superior Company Proposal that
was unsolicited and did not otherwise result from a breach of Section
6.02(a), withdraw or modify its approval or recommendation of the Offer,
the Merger and this Agreement and, in connection therewith, approve or
recommend such Superior Company Proposal.
(c) The Company promptly, and in any event within 24 hours, shall
advise Parent in writing of any Alternative Acquisition Proposal or any
inquiry with respect to or that could lead to any Alternative Acquisition
Proposal, the identity of the Person or group making any such Alternative
Acquisition Proposal or inquiry and the material terms of any such
Alternative Acquisition Proposal or inquiry. The Company shall (i) keep
Parent reasonably informed of the status, including any change to the
details, of any such Alternative Acquisition Proposal or inquiry and (ii)
provide to Parent as soon as practicable after receipt or delivery thereof
with copies of all material correspondence and other written material sent
or provided to the Company from any third party in connection with any
Alternative Acquisition Proposal or sent or provided by the Company to any
third party in connection with any Alternative Acquisition Proposal. The
Company cannot terminate this Agreement pursuant to Section 9.01(e) until
at least seventy-two (72) hours have expired since the Company provided
Parent with written notice advising Parent (i) that the Company has
received a Superior Company Proposal, (ii) of the material terms and
conditions (including, without limitation, price, sources of financing and
any material contingencies) of such Superior Company Proposal and of the
identity of the Person making such Superior Company Proposal and (iii) that
the Company intends to accept such Superior Company Proposal.
(d) Nothing contained in this Section 6.02 shall prohibit the
Company from taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from
making any required disclosure to the Company's stockholders if, in the
good faith judgment of the Company Board, after consultation with
independent counsel, failure so to disclose could be inconsistent with its
obligations under Applicable Law; provided, however, that except as set
forth in Section 6.02(b), in no event shall the Company Board or any
committee thereof withdraw or modify, or propose to withdraw or modify its
position with respect to this Agreement, the Offer or the Merger or adopt,
approve or recommend, or propose to adopt, approve or recommend any
Alternative Acquisition Proposal.
(e) For purposes of this Agreement, "Superior Company Proposal"
means any proposal made by a third party to acquire all or substantially
all the equity securities or assets of the Company, or other transaction
for the acquisition of all or substantially all the equity securities or
assets of the Company through a tender or exchange offer, a merger, a
consolidation, a liquidation or dissolution, a recapitalization, a sale or
a joint venture, that is on terms which the Company Board determines in its
good faith judgment (after consultation with a financial adviser, with only
customary qualifications, and independent legal counsel) to be superior for
the holders of the Company Common Stock, from a financial point of view, to
the Offer and the Merger, taking into account all the terms and conditions
of such proposal and this Agreement (including any proposal theretofore
made by Parent to amend the terms of this Agreement, the Offer and the
Merger) taking into account the likelihood of consummation in light of all
financial, regulatory, legal and other
41
aspects of such proposal (including, without limitation, any antitrust or
competition law approvals or non-objections).
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01 Preparation of Proxy Statement; Stockholders Meeting.
(a) If the approval of this Agreement by the Company's stockholders is
required by Applicable Law, the Company shall, as soon as practicable
following the expiration of the Offer, prepare in accordance with the rules
and regulations of the SEC and file with the SEC the Proxy Statement in
preliminary form, and each of the Company and Parent shall use its
reasonable best efforts to respond as promptly as practicable to any
comments of the SEC with respect thereto. The Company shall notify Parent
promptly of the receipt of any comments from the SEC or its staff and of
any request by the SEC or its staff for amendments or supplements to the
Proxy Statement or for additional information and shall supply Parent with
copies of all correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement. If at any time prior to receipt
of Company Stockholder Approval there shall occur any event that should be
set forth in an amendment or supplement to the Proxy Statement, the Company
shall promptly prepare and mail to its stockholders such an amendment or
supplement. The Company shall not mail any Proxy Statement, or any
amendment or supplement thereto, to which Parent reasonably objects. The
Company shall use its reasonable best efforts to cause the Proxy Statement
to be mailed to the Company's stockholders as promptly as practicable after
filing with the SEC.
(b) If the approval of this Agreement by the Company's
stockholders is required by Applicable Law, the Company shall, as soon as
practicable following the expiration of the Offer, duly call, give notice
of, convene and hold the Company Stockholders Meeting for the purpose of
seeking Company Stockholder Approval. The Company shall, through the
Company Board, recommend to its stockholders that they approve this
Agreement and the Merger, except to the extent that the Company Board shall
have withdrawn or modified its approval or recommendation of this
Agreement, the Offer or the Merger as permitted by Section 6.02(b).
Notwithstanding the foregoing, if Sub or any other Subsidiary of Parent
shall acquire at least 90% of the outstanding shares of Company Common
Stock, the parties shall, at the request of Parent, take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after the expiration of the Offer without a stockholders
meeting in accordance with Section 253 of the DGCL.
(c) Parent shall cause all shares of Company Common Stock
purchased pursuant to the Offer and all other shares of Company Common
Stock owned by Sub or any other Subsidiary of Parent to be voted in favor
of the approval of this Agreement and the Merger.
42
SECTION 7.02 Access to Information; Confidentiality. The Company
shall, and shall cause each of the Company Subsidiaries to, afford to
Parent, and to Parent's officers, employees, accountants, counsel,
financial advisers and other representatives, reasonable access during
normal business hours during the period prior to the Effective Time to all
their respective properties, books, Contracts, commitments, personnel and
records and, during such period, the Company shall, and shall cause each of
the Company 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. Without limiting
the generality of the foregoing, the Company shall, within two business
days of request therefor, provide to Parent the information described in
Rule 14a-7(a)(2)(ii) under the Exchange Act and any information to which a
holder of Company Common Stock would be entitled under Section 220 of the
DGCL (assuming such holder met the requirements of such section). All
information exchanged pursuant to this Section 7.02 shall be subject to the
Confidentiality Agreement and the Confidentiality Agreement shall remain in
full force and effect in accordance with its terms except that the seventh
and eighth paragraphs thereof (regarding standstill) are hereby terminated
and of no further force and effect.
SECTION 7.03 Reasonable Best Efforts; Notification. (a) Upon the
terms and subject to the conditions set forth in this Agreement each of the
parties shall use their respective reasonable best 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 Offer, the Merger and the other
Transactions, including (i) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities,
including, without limitation, the execution of any documents required to
be filed in accordance with the New Jersey Industrial Site Recovery Act,
and the making of all necessary registrations and filings and the taking of
all reasonable steps as may be necessary to obtain any necessary approval
or waiver from, or to avoid an action or proceeding by, any Governmental
Entity, including under the HSR Act, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending of
any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or any other Transaction
Agreement or the consummation of the Transactions, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed and (iv) the execution and delivery
of any additional instruments necessary to consummate the Transactions and
to fully carry out the purposes of the Transaction Agreements. In
connection with and without limiting the foregoing, the Company and the
Company Board shall (A) take all commercially reasonable action necessary
to ensure that no state takeover statute or similar statute or regulation
is or becomes applicable to any Transaction or this Agreement or any other
Transaction Agreement, and (B) if any state takeover statute or similar
statute or regulation becomes applicable to this Agreement or any other
Transaction Agreement, take all commercially reasonable action necessary to
ensure that the Offer, the Merger and the other Transactions may be
consummated as promptly as practicable on the terms contemplated by the
Transaction Agreements
43
and otherwise to minimize the effect of such statute or regulation on the
Offer, the Merger and the other Transactions.
(b) Notwithstanding anything to the contrary in this Agreement,
(i) the Company shall not, without Parent's prior written consent, commit
to any divestitures, licenses, hold separate arrangements or similar
matters, including covenants affecting business operating practices (or
allow its Subsidiaries to commit to any divestitures, licenses, hold
separate arrangements or similar matters), and the Company shall commit to,
and shall use its reasonable best efforts to effect (and shall cause its
Subsidiaries to commit to and use their reasonable best efforts to effect),
any such divestitures, licenses, hold separate arrangements or similar
matters as Parent shall request, but solely if such divestitures, licenses,
hold separate arrangements or similar matters are contingent on
consummation of the Offer and (ii) neither Parent nor any of its
Subsidiaries shall be required to agree (with respect to (A) Parent or its
Subsidiaries or (B) the Company or its Subsidiaries) to any divestitures,
licenses, hold separate arrangements or similar matters, including
covenants affecting business operating practices, if such divestitures,
licenses, arrangements or similar matters, individually or in the
aggregate, would reasonably be expected to have a Parent Material Adverse
Effect or a Company Material Adverse Effect.
(c) Except as provided below, nothing in this Section 7.03 or any
other part of this Agreement shall require Parent to refrain from entering
into any agreement with respect to, or issuing Parent common stock or other
consideration in connection with, a business combination with, or an
acquisition of, another Person or any businesses or assets of another
Person after the date of this Agreement and prior to the Effective Time (a
"Subsequent Transaction"). In the event of a Subsequent Transaction, Parent
shall agree to any divestitures, licenses, hold separate arrangements or
similar matters (including covenants affecting business operating
practices) on a timely basis that are necessary in order to obtain approval
of the transactions contemplated by this Agreement under applicable
competition laws that would not otherwise have been required in order to
obtain such approval but for the Subsequent Transaction. Parent will
promptly advise the Company in writing if it enters into an agreement
relating to a Subsequent Transaction that is reasonably likely to have a
material adverse impact under applicable competition law on the timely
completion of the Transactions and thereafter keep the Company apprised of
the status of such Subsequent Transaction.
(d) The Company and Parent each shall keep the other apprised of
the status of matters relating to completion of the transactions
contemplated by the Transaction Agreements, including promptly furnishing
the other with copies of notice or other communications received by Parent
or the Company, as the case may be, or any of its Subsidiaries, from any
Governmental Entity with respect to Transactions.
(e) The Company shall give prompt notice to Parent, and Parent or
Sub shall give prompt notice to the Company, of, and such party shall use
its reasonable best efforts to prevent, or promptly remedy (i) any
representation or warranty made by it contained in any Transaction
Agreement that is qualified as to becoming untrue or inaccurate in any
respect or any such representation or
44
warranty that is not so qualified becoming untrue or inaccurate in any
material respect or (ii) the failure by it to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with
or satisfied by it under any Transaction Agreement; provided, however, that
no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations
of the parties under any other Transaction Agreement.
SECTION 7.04 Stock Options. (a) Except as described in Section
7.04(b) below, as soon as practicable following the date of this Agreement,
the Company Board (or, if appropriate, any committee administering the
Company Option Plans) shall adopt, or shall cause to be adopted, such
resolutions or take, or cause to be taken, such other actions as are
required to adjust the terms of all outstanding Company Employee Stock
Options (other than the Individual Options) heretofore granted under any
Company Option Plan or otherwise, to provide that each Company Employee
Stock Option outstanding immediately prior to the Effective Time (whether
or not then vested) shall be canceled as of the Effective Time in exchange
for a cash payment by the Company to be made on the date following the
Effective Time (or as soon as practicable thereafter) of an amount equal to
(i) the excess, if any, of (A) the price per share of Company Common Stock
to be paid pursuant to the Offer over (B) the exercise price per share of
Company Common Stock subject to such Company Employee Stock Option,
multiplied by (ii) the number of shares of Company Common Stock for which
such Company Employee Stock Option shall not theretofore have been
exercised.
(b) With respect to the Individual Options granted to each of the
individuals identified in Section 7.04(b) of the Company Disclosure
Schedule, the Company shall take the actions specified on Schedule 7.04(b)
of the Company Disclosure Schedule.
(c) All amounts payable pursuant to this Section 7.04 shall be
subject to any required withholding of Taxes and shall be paid without
interest. The Company shall use its reasonable best efforts to obtain all
consents of the holders of the Company Employee Stock Options as shall be
necessary to effectuate the foregoing. Notwithstanding anything to the
contrary contained in this Agreement, payment shall, at Parent's request,
be withheld in respect of any Company Employee Stock Option until all
necessary consents are obtained.
(d) The Company Board shall adopt, or shall cause to be adopted,
such resolutions or take such other actions as are required so that the
Company Option Plans and the Individual Options shall terminate as of the
Effective Time, and the provisions in any other Company Plan providing for
the issuance, transfer or grant of any capital stock of the Company or any
interest in respect of any capital stock of the Company shall be deleted as
of the Effective Time, and to ensure that following the Effective Time no
holder of a Company Employee Stock Option or any participant in any Company
Option Plan or other Company Plan shall have any right thereunder to
acquire any capital stock of the Company or the Surviving Corporation.
SECTION 7.05 ESPP. (a) The Company Board shall take such action as
may be necessary or desirable in the reasonable judgment of Parent under
the Amended and Restated Foilmark, Inc. Employee Stock Purchase Plan dated
as of January 31, 1995, as the same may be amended (the
45
"ESPP"), to cause the Offering Period (as defined in the ESPP) that is
pending at the date of this Agreement to be extended pursuant to Section
18(b) of the ESPP until such time as this Agreement may be terminated in
accordance with its terms without the Offer or the Merger being consummated
(as so extended, the "Pending Offering Period") such that there shall be no
Exercise Date (as defined in the ESPP) during the term of this Agreement.
Notwithstanding the foregoing, for purposes of participant contributions
under Sections 5 and 6 of the ESPP, the Pending Offering Period shall end
as originally scheduled.
(b) Prior to the first acceptance by Sub of shares of Company
Common Stock for payment pursuant to the Offer, the Company Board shall
take all actions as may be necessary or desirable in the reasonable
judgment of Parent to cause (i) the Pending Offering Period to be canceled
without any further purchase of shares of Company Common Stock as
contemplated by Section 17(a) of the ESPP, (ii) all amounts contributed to
the ESPP during the Pending Offering Period to be refunded to the
participants, and (iii) the ESPP to be terminated effective no later than
the date of the first acceptance by Sub of shares of Company Common Stock
for purchase pursuant to the Offer. Without limiting the generality of the
foregoing, the Company Board shall make a determination under Section 17(c)
of the ESPP that the consummation of the Offer constitutes a
"change-in-control event" within the meaning of the ESPP.
SECTION 7.06 Indemnification; D&O Insurance. (a) Parent and Sub
agree that all rights to indemnification for acts or omissions occurring
prior to the Effective Time now existing in favor of the current or former
directors, officers or employees of the Company and the Company
Subsidiaries (each, an "Indemnified Party") as provided in their respective
certificates of incorporation or by-laws or in any indemnification
agreement between the Company and any Indemnified Party as in effect
immediately prior to the date of this Agreement shall survive the Merger
and shall continue in full force and effect in accordance with their terms
for a period of not less than six years from the Effective Time.
(b) Parent shall cause to be maintained for a period of six years
from the Effective Time the Company's current D&O Insurance policy to the
extent that it provides coverage for events occurring prior to the
Effective Time for all persons who are directors and officers of the
Company on the date of this Agreement, so long as the annual premium
therefor would not be in excess of 150% of the last annual premium paid
prior to the date of this Agreement (such amount, the "Maximum Premium").
Upon request by Parent, the Company shall use its reasonable best efforts
to extend coverage under the Company's D&O Insurance by obtaining a
six-year "tail" policy on terms and conditions no less advantageous than
the existing D&O Insurance (provided that the lump sum payment to purchase
such coverage does not exceed three times the Maximum Premium) and such
"tail" policy shall satisfy Parent's obligations under this Section
7.06(b). Parent's obligations under this Section 7.06(b) shall also be
satisfied if Parent's D&O Insurance provides (or is amended to provide)
substantially similar coverage for events occurring prior to the Effective
Time for persons who are directors and officers of the Company on the date
of this Agreement. If the Company's existing D&O Insurance expires, is
terminated or canceled during such six-year period or a "tail" policy
cannot be purchased on the terms set forth above and Parent cannot or
determines
46
not to satisfy its obligations under this Section 7.06(b) pursuant to the
preceding sentence, Parent shall use reasonable best efforts to cause to be
obtained as much D&O Insurance as can be obtained for the remainder of such
period for an annualized premium not in excess of the Maximum Premium, on
terms and conditions no less advantageous than the existing D&O Insurance.
The Company represents to Parent that the last annual premium paid prior to
the date of this Agreement is not greater than $100,000.
(c) In the event the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other Person
and shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially
all of its properties and assets to any Person, then, and in each such
case, to the extent necessary, proper provision shall be made so that the
successors and assigns of Surviving Corporation assume the obligations set
forth in this Section 7.06.
(d) In the event any claim is made against any Indemnified Party
that is covered or potentially covered by D&O Insurance, neither the
Surviving Corporation nor Parent shall take any action or fail to take any
action that would forfeit, jeopardize, restrict or limit the insurance
coverage available for such claim until the final disposition thereof. The
provisions of this Section 7.06 (i) shall survive the closing of the
Transactions, are intended to benefit the Company, the Surviving
Corporation and each Indemnified Party (each of whom and their heirs and
legal representatives shall be entitled to enforce this Section 7.06
against Parent or the Surviving Corporation, and Parent shall cause Sub to
pay all reasonable legal fees and disbursements (if any) incurred by or on
behalf of any such person in successfully enforcing its rights under this
Section 7.06) and (ii) are in addition to, and not in substitution for, any
other rights to indemnification or contribution that any such person may
have by contract or otherwise.
SECTION 7.07 Public Announcements. Parent and Sub, on the one
hand, and the Company, on the other hand, shall consult with each other
before issuing, and provide each other the opportunity to review and
comment upon, any press release or other public statements with respect to
the Offer, the Merger and the other Transactions and shall not issue any
such press release or make any such public statement prior to such
consultation, except as may be required by Applicable Law, court process or
by obligations pursuant to any listing agreement with any national
securities exchange.
SECTION 7.08 Transfer Taxes. Either Sub or the Surviving
Corporation shall pay all Transfer Taxes, if any, and any penalties or
interest with respect to the Transfer Taxes, payable in connection with the
consummation of the Offer or the Merger, and all Stock Transfer Taxes, if
any, and any penalties or interest with respect to any such Stock Transfer
Taxes.
SECTION 7.09 Potential Litigation. The Company shall give Parent
the opportunity to participate fully in the conduct of the defense or the
settlement of any litigation against the Company and its directors relating
to any Transaction. No settlement of any such litigation shall be agreed to
without Parent's prior written consent.
47
SECTION 7.10 Certain Employee Matters. Parent will cause the
Surviving Corporation to maintain each Company Plan as in effect on the
date of this Agreement (other than the Company Option Plans and the ESPP),
or provide plans with benefits no less favorable than those provided under
each Company Plan for a period of one (1) year after the Effective Time. In
the event any employees of the Surviving Corporation become participants in
any substitute for a Company Plan, Parent will cause the Surviving
Corporation to give credit under such Plan to such employees for all
service with the Surviving Corporation and with the Company (and any
predecessor employer) prior to the Effective Time for purpose of
determining eligibility to participate under such plan but not for any
other purpose for which length of service may be taken into account or
recognized by the Company in the administration of the replaced Company
Plan.
SECTION 7.11 Parent Guarantee of Bradford Agreement; Shareholder
Notes.
(a) Parent will, and will cause the Surviving Corporation to
absolutely and unconditionally pay, all amounts due under that certain
Amended and Restated Consulting Agreement, dated as of October 1, 1991, as
amended ( the "Consulting Agreement") by and among HoloPak Technologies,
Inc. ("HoloPak"), Transfer Print Foils, Inc. and Bradford Associates, a New
Jersey general partnership ("Bradford") in accordance with its terms, and
Parent does hereby, and will cause the Surviving Corporation to absolutely
and unconditionally guarantee payment on a timely basis of all amounts
payable pursuant to the Consulting Agreement. Parent will cause the
Surviving Corporation to pay all shareholder notes described on Section
4.17 of the Company Disclosure Letter when due in accordance with their
respective terms.
(b) In the event (i) Parent or the Surviving Corporation
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or
merger, or, as a result of such merger or consolidation, the board of
directors of Parent shall consist of a majority of directors who were not
directors of Parent immediately prior to such merger, (ii) Parent transfers
or conveys all or substantially all of its properties and assets to any
Person, or (iii) any Person (other than any direct or indirect Subsidiary
of Parent) acquires all or substantially all of the outstanding stock or
assets of the Surviving Corporation or HoloPak, then, and in each such
case, all amounts due under the Consulting Agreement and the shareholder
notes described on Section 4.17 of the Company Disclosure Letter shall
accelerate and become automatically due and payable in full at such time
(together with interest at 8% per annum from the date such payment
accelerates and becomes due to the date of payment).
(c) The provisions of this Section 7.11 shall survive the closing
of the Transactions and are for the benefit of, and shall be enforceable
severally by, Bradford and its successors and assigns, and Bradford and the
holders of the shareholder notes described on Section 4.17 of the Company
Disclosure Letter shall each individually be entitled to enforce this
Section 7.11 against Parent or the Surviving Corporation and all successors
and assigns thereof, and Parent shall cause Sub to pay all reasonable legal
fees and disbursements (if any) incurred by or on behalf of any such person
in successfully enforcing its rights under this Section 7.11.
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ARTICLE VIII
CONDITIONS PRECEDENT
SECTION 8.01 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of
the following conditions:
(a) Stockholder Approval. If required by Applicable Law, the Company
shall have obtained Company Stockholder Approval.
(b) Antitrust. The waiting period (and any extension thereof)
applicable to any of the Transactions under the HSR Act shall have been
terminated or shall have expired and any consents, approvals and filings
under any foreign antitrust law, the absence of which would prohibit the
consummation of Merger, shall have been obtained or made.
(c) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other Order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing
or imposing any conditions or limitations on the consummation of any of the
Transactions shall be in effect; provided, however, that each of the
parties shall have used its reasonable best efforts to prevent the entry of
any such injunction or other Order and to appeal as promptly as possible
any such injunction or other order that may be entered.
(d) Acceptance of Shares. Sub shall have accepted shares of
Company Common Stock for payment pursuant to the Offer; provided, however,
that this condition shall not be applicable to the obligations of Parent or
Sub if, in breach of this Agreement or the terms of the Offer, Sub fails to
purchase any Shares validly tendered and not withdrawn pursuant to the
Offer.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after Company
Stockholder Approval:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
49
(i) if the Merger is not consummated on or before August
31, 2001 (the "Outside Date"), unless the failure to consummate
the Merger is the result of a breach of this Agreement by the
party seeking to terminate this Agreement; provided, however, that
this Agreement may not be terminated pursuant to this clause (i)
if Sub has accepted shares of Company Common Stock for payment
pursuant to the Offer;
(ii) if any Governmental Entity issues an Order or takes
any other action permanently enjoining, restraining or otherwise
prohibiting the Merger and such Order or other action shall have
become final and nonappealable;
(iii) (A) Sub shall have failed to commence the Offer
within ten (10) business days following the date of this Agreement
or (B) the Offer shall have terminated or expired in accordance
with its terms without Sub having purchased any shares of Company
Common Stock pursuant to the Offer; provided, however, that the
right to terminate this Agreement pursuant to this clause (iii)
shall not be available to any party whose failure to fulfill any
of its obligations under this Agreement or the failure of whose
representations and warranties to be true results in the failure
of any such condition; or
(iv) if, upon a vote at a duly held stockholders meeting
to obtain Company Stockholder Approval, Company Stockholder
Approval is not obtained.
(c) by Parent, if the Company breaches or fails to perform in any
material respect any of its representations, warranties, covenants or
agreements contained in this Agreement, which breach or failure to perform
(i) would give rise to the failure of a condition set forth in Exhibit A,
and (ii) cannot be or has not been cured within 30 days after the giving of
written notice to the Company of such breach (provided that Parent is not
then in material breach of any representation, warranty or covenant
contained in this Agreement); provided, however, that this Agreement may
not be terminated pursuant to this clause (c) if Sub has accepted shares of
Company Common Stock representing at least the Minimum Tender Condition for
payment pursuant to the Offer;
(d) by Parent:
(i) if the Company Board or any committee thereof
withdraws or modifies in a manner adverse to Parent its approval
or recommendation of the Offer, the Merger or this Agreement or
fails to recommend to the Company's stockholders that they accept
the Offer or give Company Stockholder Approval, or the Company
Board or any committee thereof resolves to take any of the
foregoing actions; or
(ii) if the Company Board fails to reaffirm publicly and
unconditionally its recommendation to the Company's stockholders
that they accept the Offer and give Company Stockholder Approval
within 10 business days of Parent's written request to do so
(which request may be made at any time following public disclosure
of an Alternative
50
Acquisition Proposal), which public reaffirmation must also
include the unconditional rejection of such Alternative
Acquisition Proposal;
(e) by the Company prior to the acceptance of shares of Company
Common Stock representing at least the Minimum Tender Condition for payment
pursuant to the Offer if, the Company Board shall have finally determined
to approve, endorse or recommend an Alternative Acquisition Proposal that
constitutes a Superior Company Proposal; provided, however, that the
Company may not terminate this Agreement pursuant to this Section 9.01(e)
unless (i) the Company has complied in all material respects with all of
its obligations under Section 6.02 (including, without limitation, Section
6.02(c)) in accordance with the terms thereof, and (ii) the Company has
paid to (or concurrently pays to) Parent the Termination Fee in accordance
with this Section 9.01(e) and Section 9.02; or
(f) by the Company, if Parent or Sub breaches or fails to perform
in any material respect any of its representations, warranties, covenants
or agreements contained in this Agreement, which breach or failure to
perform (i) would give rise to the failure of a condition set forth in
Article VIII and (ii) cannot be cured or has not been cured within 30 days
after the giving of written notice to Parent of such breach (provided that
the Company is not then in material breach of any representation, warranty
or covenant contained in this Agreement); provided, however, that this
Agreement may not be terminated pursuant to this clause (f) if Sub has
accepted shares of Company Common Stock representing at least the Minimum
Tender Condition for payment pursuant to the Offer.
SECTION 9.02 Effect of Termination; Fees and Expenses. (a) In the
event of termination of this Agreement by either the Company or Parent as
provided in Section 9.01, this Agreement shall forthwith become void and
have no effect, without any liability or obligation on the part of Parent,
Sub or the Company, other than Section 4.27, Section 5.08, the last
sentence of Section 7.02, this Section 9.02 and Article X and except to the
extent that such termination results from the breach by a party of any
representation, warranty or covenant set forth in this Agreement.
(b) The Company shall pay to Parent a fee in an amount equal to
$2,000,000 (the "Termination Fee") if:
(i) the Company terminates this Agreement pursuant to
Section 9.01(e); or
(ii) Parent terminates this Agreement pursuant to Section
9.01(c) (but only with respect to a breach of Section 6.02) or
Section 9.01(d).
Any fee due under this Section 9.02 shall be paid by wire transfer of
same-day funds on the date of termination of this Agreement.
(c) Except as provided below, all fees and expenses incurred in
connection with the Merger and the other Transactions shall be paid by the
party incurring such fees or expenses, whether or not
51
the Merger is consummated; provided, however, that Parent and the Company
shall share equally the filing fees in connection with the HSR Act and the
filing fees in connection with the Offer Documents.
(d) If the Company shall become obligated to pay to Parent the
Termination Fee pursuant to Section 9.02(b), such Termination Fee shall
constitute the exclusive remedy for any breach by the Company of any of the
representations, warranties or covenants contained in this Agreement.
Notwithstanding the foregoing, nothing in this Section 9.02(d) shall limit
Parent's ability to pursue any remedy it may have available to it in law or
equity for any breach by the Company of any of the representations,
warranties or covenants contained in this Agreement to the extent Parent is
not entitled to receive the Termination Fee pursuant to Section 9.02(b).
SECTION 9.03 Amendment. This Agreement may be amended by the
parties at any time before or after receipt of Company Stockholder
Approval; provided, however, that after receipt of Company Stockholder
Approval, there shall be made no amendment that by law requires further
approval by such stockholders without the further approval of such
stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
SECTION 9.04 Extension; Waiver. At any time prior to the Effective
Time, the parties may (i) extend the time for the performance of any of the
obligations or other acts of the other parties, (ii) waive any inaccuracies
in the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (iii) subject to the
proviso of Section 9.03, waive compliance with any of the agreements or
conditions contained in this Agreement. Any agreement on the part of a
party to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
SECTION 9.05 Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 9.01, an
amendment of this Agreement pursuant to Section 9.03 or an extension or
waiver pursuant to Section 9.04 shall, in order to be effective, be in
writing and require in the case of Parent, Sub or the Company, action by
its Board of Directors or the duly authorized designee of its Board of
Directors.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 Nonsurvival of Representations and Warranties. None
of the representations and warranties in this Agreement shall survive the
Effective Time. This Section 10.01 shall not limit any covenant or
agreement contained in any Transaction Agreement which by its terms
contemplates performance after the Effective Time.
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SECTION 10.02 Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given upon receipt by 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
Illinois Tool Works Inc.
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Executive Vice President
Tel: (000) 000-0000
Fax: (000) 000-0000
and
Illinois Tool Works Inc.
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Senior Vice President,
General Counsel and Secretary
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
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(b) if to the Company, to
Foilmark, Inc.
0 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Xx.
President and Chief Executive Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Bradford Ventures Limited
0 Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
and
Xxxxxxxx, Xxxxx & Xxxxxx LLP
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
and
Dechert
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. xx Xxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
SECTION 10.03 Interpretation. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this
Agreement unless otherwise indicated. The table of contents 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. Whenever
the words "include",
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"includes" or "including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation".
SECTION 10.04 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or
law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
SECTION 10.05 Counterparts. This Agreement may be executed in one
or more 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.
Delivery of an executed counterpart of this Agreement by facsimile shall be
effective to the fullest extent permitted by applicable law.
SECTION 10.06 Entire Agreement; No Third-Party Beneficiaries. The
Transaction Agreements, the Company Disclosure Letter, the Parent
Disclosure Letter and all exhibits and schedules hereto and the
Confidentiality Agreement, taken together, (i) constitute the entire
agreement, and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the Transactions and
(ii) except for Section 7.05 and, from and after the Effective Time,
Section 3.01(c)(i), Section 7.04(a), Section 7.06, Section 7.11 and Section
9.02(c) are not intended to confer upon any Person other than the parties
any rights or remedies.
SECTION 10.07 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
SECTION 10.08 Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect
wholly owned subsidiary of Parent, but no such assignment shall relieve Sub
of any of its obligations under this Agreement. Any purported assignment
without such consent shall be void. Subject to the preceding sentences,
this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
SECTION 10.09 Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of any
Transaction Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the parties
shall
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be entitled to an injunction or injunctions to prevent breaches of any
Transaction Agreement and to enforce specifically the terms and provisions
of each Transaction Agreement in any Delaware state court or any Federal
court located in the State of Delaware, this being in addition to any other
remedy to which they are entitled at law or in equity. In addition, each of
the parties hereto (a) consents to submit itself to the personal
jurisdiction of any Delaware state court or any Federal court located in
the State of Delaware in the event any dispute arises out of any
Transaction Agreement or any Transaction, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (c) agrees that it will not bring
any action relating to any Transaction Agreement or any Transaction in any
court other than any Delaware state court or any Federal court sitting in
the State of Delaware and (d) waives any right to trial by jury with
respect to any action related to or arising out of any Transaction
Agreement or any Transaction.
[Intentionally left blank]
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IN WITNESS WHEREOF, Parent, Sub and the Company have duly
executed this Agreement, all as of the date first written above.
ILLINOIS TOOL WORKS INC.
by
--------------------------------------------
Name:
Title:
XXXXXX ACQUISITION INC.
by
--------------------------------------------
Name:
Title:
FOILMARK, INC.
by
---------------------------------------------
Name:
Title:
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EXHIBIT A
Conditions of the Offer
Notwithstanding any other term of the Offer or this Agreement, Sub
shall not be required to accept for payment or, subject to any applicable
rules and regulations of the SEC, including Rule 14e-l(c) under the
Exchange Act (relating to Sub's obligation to pay for or return tendered
shares of Company Common Stock promptly after the termination or withdrawal
of the Offer), to pay for any shares of Company Common Stock tendered
pursuant to the Offer unless (i) there shall have been validly tendered and
not withdrawn prior to the expiration of the Offer that number of shares of
Company Common Stock which would represent at least a majority of the Fully
Diluted Shares (the "Minimum Tender Condition") and (ii) the waiting period
(and any extension thereof) applicable to the purchase of shares of Company
Common Stock pursuant to the Offer under the HSR Act shall have been
terminated or shall have expired and any consents, approvals and filings
under any foreign antitrust law, the absence of which would prohibit the
purchase of all shares of Company Common Stock tendered pursuant to the
Offer under the HSR Act, shall have been obtained or made prior to the
acceptance of shares of Company Common Stock pursuant to the Offer shall
have been made or obtained. The term "Fully Diluted Shares" means all
outstanding securities entitled generally to vote in the election of
directors of the Company on a fully diluted basis, after giving effect to
the exercise, conversion or termination of all options, warrants, rights
and securities exercisable or convertible into such voting securities.
Furthermore, notwithstanding any other term of the Offer or this Agreement,
Sub shall not be required to accept for payment or, subject as aforesaid,
to pay for any shares of Company Common Stock not theretofore accepted for
payment or paid for, and may terminate or amend the Offer, with the consent
of the Company or if, at any time on or after the date of this Agreement
and before the acceptance of such shares for payment or the payment
therefor, any of the following conditions exists:
(a) there shall have been instituted or pending any suit,
action or proceeding that has a reasonable likelihood of success,
(i) challenging the acquisition by Parent or Sub of any Company
Common Stock, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or any other Transaction,
or seeking to obtain from the Company, Parent or Sub any damages
that are material in relation to the Company and its subsidiaries
taken as a whole, (ii) seeking to prohibit or limit the ownership
or operation by the Company, Parent or any of their respective
subsidiaries of any material portion of the business or assets of
the Company, Parent or any of their respective subsidiaries, or to
compel the Company, Parent or any of their respective subsidiaries
to dispose of or hold separate any material portion of the
business or assets of the Company, Parent or any of their
respective subsidiaries, as a result of the Offer, the Merger or
any of the other Transactions, (iii) seeking to impose limitations
on the ability of Parent or Sub to acquire or hold, or exercise
full rights of ownership of, any shares of Company Common Stock,
including the right to vote the Company Common Stock purchased by
it on all matters properly presented to the stockholders of the
Company, (iv) seeking to prohibit Parent or any of its
subsidiaries
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from effectively controlling in any material respect the business
or operations of the Company and the Company Subsidiaries, or (v)
which otherwise is reasonably likely to have a Parent Material
Adverse Effect or a Company Material Adverse Effect;
(b) any statute, rule, regulation, legislation,
interpretation, judgment, Order or injunction shall be enacted,
entered, enforced, promulgated, amended or issued with respect to,
or deemed applicable to, or any consent or approval withheld with
respect to the Offer, the Merger or any of the other Transactions,
by any Governmental Entity that is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in
paragraph (a) above;
(c) except as disclosed in the Filed Company SEC
Documents or the Company Disclosure Letter, since the date of the
most recent audited financial statements included in the Filed
Company SEC Documents there shall have occurred any event, change,
effect or development that, individually or in the aggregate, has
had or is reasonably likely to have, a Company Material Adverse
Effect, except where such event results, directly or indirectly,
from (i) changes affecting the economy generally, (ii) changes
affecting the industry in which the Company operates generally,
(iii) the public announcement or pendency of the Offer, the Merger
or the Transactions, or (iv) compliance by the Company with any of
the terms hereof;
(d) (i) it shall have been publicly disclosed or Parent
shall have otherwise learned that beneficial ownership (determined
for the purposes of this paragraph as set forth in Rule 13d-3
promulgated under the Exchange Act) of more than 15% of the
outstanding shares of the Company Common Stock has been acquired
by another Person (including any group as defined in the Exchange
Act) or (ii) the Company Board or any committee thereof shall have
withdrawn or modified in a manner adverse to Parent its approval
or recommendation of the Offer and this Agreement or the Company
Board or any committee thereof shall have resolved to take any of
the foregoing actions;
(e) any of the representations and warranties of the
Company in this Agreement shall not be true and correct as of the
date of this Agreement and as of such time as though made at such
time, except (i) to the extent such representation and warranty
expressly relates to a specific date (in which case on and as of
such specific date), (ii) to the extent Parent had consented in
writing to any supplement or amendment to the Company Disclosure
Letter delivered to Parent pursuant to Section 6.01(c)(ii) of the
Merger Agreement, or (iii) where the failure to be so true and
correct would not, individually or in the aggregate, result in a
Company Material Adverse Effect;
(f) the Company shall have failed to perform in any
respect any obligation or to comply in any respect with any
agreement or covenant of the Company to be performed or complied
with by it under this Agreement; except for such failures which
would not, individually or in the aggregate, result in a Company
Material Adverse Effect; or
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(g) this Agreement shall have been terminated in accordance
with its terms.
which, in the reasonable judgment of Sub or Parent, in any such case, and
regardless of the circumstances giving rise to any such condition
(including any action or inaction by Parent or any of its Affiliates),
makes it inadvisable to proceed with such acceptance for payment or
payment.
The foregoing conditions are for the sole benefit of Sub and
Parent and may be asserted by Sub or Parent regardless of the circumstances
giving rise to such condition or may be waived by Sub and Parent in whole
or in part at any time and from time to time in their sole discretion. The
failure by Parent, Sub or any other Affiliate of Parent at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any
such right, the waiver of any such right with respect to particular facts
and circumstances shall not be deemed a waiver with respect to any other
facts and circumstances and each such right shall be deemed an ongoing
right that may be asserted at any time and from time to time.
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