AGREEMENT AND PLAN OF MERGER
DATED AS OF FEBRUARY 15, 1999
BETWEEN
XXXXXX GENERAL CORPORATION
AND
GLGR ACQUISITION CORP.
TABLE OF CONTENTS
Page
ARTICLE I THE TENDER OFFER...............................................2
Section 1.01. The Tender Offer........................................2
Section 1.02. Company Action..........................................3
ARTICLE II THE MERGER.....................................................4
Section 2.01. Agreement to Effect Merger..............................4
Section 2.02. The Merger..............................................4
Section 2.03. Effective Time..........................................5
Section 2.04. Effects of the Merger...................................5
Section 2.05. Certificate of Incorporation............................5
Section 2.06. Bylaws..................................................5
Section 2.07. Directors and Officers..................................5
Section 2.08. Stockholders Meeting....................................5
ARTICLE III CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES.............6
Section 3.01. Conversion of Securities................................6
Section 3.02. Exchange of Certificates and Cash.......................7
Section 3.03. Stock Transfer Books....................................9
Section 3.04. Stock Options; Payment Rights...........................9
Section 3.05. Dissenting Shares.......................................9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................10
Section 4.01. Organization and Qualifications; Subsidiaries..........10
Section 4.02. Certificate of Incorporation and Bylaws................11
Section 4.03. Capitalization.........................................11
Section 4.04. Authority Relative to This Agreement...................11
Section 4.05. No Conflict; Required Filings and Consents.............12
Section 4.06. Opinion of Financial Advisor...........................13
Section 4.07. Board Approval.........................................13
Section 4.08. Brokers................................................13
Section 4.09. SEC Filings............................................13
Section 4.10. Schedule 14D-9.........................................14
Section 4.11. Cash and Investment Securities.........................14
ARTICLE V REPRESENTATIONS AND WARRANTIES OF ACQUISITION.................14
Section 5.01. Organization and Qualification.........................14
Section 5.02. Authority Relative to This Agreement...................15
Section 5.03. No Conflict; Required Filings and Consents.............15
Section 5.04. Brokers................................................16
Section 5.05. Financial Capability...................................16
Section 5.06. Capitalization of Acquisition..........................17
Section 5.07. Offer Document.........................................17
ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER........................17
Section 6.01. Conduct of Business by the Company Pending the Merger..17
ARTICLE VII ADDITIONAL COVENANTS..........................................18
Section 7.01. Access to Information; Confidentiality.................18
Section 7.02. Proxy Statement........................................19
Section 7.03. Action by Stockholders.................................20
Section 7.04. No Solicitation........................................20
Section 7.05. Directors' and Officers' Insurance and Indemnification.21
Section 7.06. Further Action; Best Efforts...........................23
Section 7.07. Public Announcements...................................24
Section 7.08. Conveyance Taxes.......................................24
Section 7.09. Employee Benefits......................................24
Section 7.10. Knowledge of Breach....................................25
ARTICLE VIII CLOSING CONDITIONS............................................25
Section 8.01. Conditions to Obligations of Each Party to Effect the
Merger.................................................25
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER.............................26
Section 9.01. Termination............................................26
Section 9.02. Effect of Termination..................................28
Section 9.03. Amendment..............................................28
Section 9.04. Waiver.................................................29
Section 9.05. Expenses and Other Payments............................29
ARTICLE X GENERAL PROVISIONS............................................30
Section 10.01.Effectiveness of Representations, Warranties and
Agreements.............................................30
Section 10.02.Notices................................................30
Section 10.03.Certain Definitions....................................31
Section 10.04.Headings...............................................32
Section 10.05.Severability...........................................32
Section 10.06.Entire Agreement.......................................32
Section 10.07.Assignment.............................................32
Section 10.08.Parties in Interest....................................33
Section 10.09.Governing Law..........................................33
Section 10.10.Submission to Jurisdiction; Waivers....................33
Section 10.11.Enforcement of this Agreement..........................33
Section 10.12.Counterparts...........................................34
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of February 15, 1999 (the
"Agreement"), between XXXXXX GENERAL CORPORATION, a Delaware corporation
(the "Company"), and GLGR ACQUISITION CORP., a Delaware corporation (the
"Acquisition").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of this
Agreement (a) Acquisition will offer (the "Tender Offer") to purchase all
the outstanding common stock, par value $1.00 per share, of the Company
("Common Stock") at a price per share, net to the seller, in cash of $76.00
per share of Common Stock (that price, or any greater amount per share
Acquisition pays pursuant to the Tender Offer, being the "Tender Offer
Price"), and (b) if Acquisition purchases the shares which are tendered in
response to the Tender Offer, as promptly as practicable, in accordance
with the General Corporation Law of the State of Delaware (the "DGCL"),
Acquisition will merge with and into the Company in a transaction (the
"Merger") pursuant to which each outstanding share of Common Stock (other
than shares owned by Acquisition) shall be converted into the right to
receive in cash per share of Common Stock an amount equal to the Tender
Offer Price, each as more fully set forth herein;
WHEREAS, the Board of Directors of the Company, based on the
unanimous recommendation of the Special Committee (as defined in Section
1.01(d)), has determined that the Tender Offer and the Merger are fair to
and in the best interests of the Company and its stockholders and would be
more beneficial to the Company and its stockholders than either the
transaction (the "Proposed Management Transaction") which was the subject
of an Agreement and Plan of Merger dated as of November 22, 1998, as
amended on February 9, 1999 (the "River Acquisition Agreement") or any
other proposal to acquire the Company or its Common Stock which has been
received by the Company as of the date hereof, and has approved this
Agreement, Acquisition's purchasing the shares which are tendered in
response to the Tender Offer, the Merger and the other transactions
contemplated hereby and has recommended approval and adoption of this
Agreement by the stockholders of the Company.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
in this Agreement, the parties hereto agree as follows:
ARTICLE I
THE TENDER OFFER
Section 1.01. The Tender Offer. (a) Not later than the first
business day after the date of this Agreement, Acquisition will make a
public announcement of the Tender Offer.
(b) Within five business days after Acquisition makes
a public announcement of the Tender Offer, Acquisition will file with the
Securities and Exchange Commission ("SEC") a Tender Offer Statement on
Schedule 14D-1 with respect to the Tender Offer (together with any
amendments or supplements, the "Schedule 14D-1"), including forms of an
offer to purchase, a letter of transmittal and a summary advertisement (the
Schedule 14D-1 and the documents included in it by which the Tender Offer
will be made, as they may be supplemented or amended, being the "Offer
Documents") to purchase for cash all outstanding shares of Common Stock at
the Tender Offer Price, subject to there being validly tendered and not
withdrawn prior to the expiration of the Tender Offer, that number of
shares of Common Stock which, together with the Shares beneficially owned
by Acquisition or its affiliates, constitute at least a majority of the
shares of Common Stock outstanding on a fully diluted basis (the "Minimum
Condition") and to the other conditions set forth in Annex A hereto.
Promptly after that, Acquisition will communicate the Tender Offer to the
record holders and beneficial owners of the Common Stock. Each of
Acquisition and the Company will promptly correct any information provided
by it for use in the Offer Documents if and to the extent that information
becomes incomplete or inaccurate in any material respect, and Acquisition
will supplement or amend the Offer Documents to the extent required by the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
rules and regulations thereunder, file the amended or supplemented Offer
Documents with the SEC and, if required, disseminate the amended Offer
Documents to the Company's stockholders. The Company and its counsel will
be given a reasonable opportunity to review the Offer Documents and any
amendments or supplements to them before they are filed with the SEC or
disseminated to the Company's stockholders.
(c) The day on which the Tender Offer expires (the
"Expiration Date") will not be earlier than 20 business days, and (except
as provided in Section 1.01(d)) will not be later than 30 business days,
after the day on which the Schedule 14D-1 is filed with the SEC.
(d) Subject to the conditions to the Tender Offer set
forth on Annex A and the other conditions set forth in this Agreement,
Acquisition will, promptly after the initial Expiration Date or any
permitted extended Expiration Date, accept for payment and pay for all the
shares of Common Stock which are properly tendered in response to the
Tender Offer and not withdrawn. The obligation of Acquisition to accept for
payment and pay for shares which are properly tendered and not withdrawn
will not be subject to any conditions other than the Minimum Condition
(which may not be waived) and those set forth on Annex A. Acquisition will
not, without the consent of the Company acting through the Special
Committee of its Board of Directors (the "Special Committee"), (i) decrease
the Tender Offer Price below that described in the first "Whereas" clause,
(ii) decrease the number of shares being solicited in the Tender Offer,
(iii) change the form of consideration payable in the Tender Offer, or (iv)
modify or add to the conditions set forth on Annex A or otherwise modify
the terms of the Tender Offer set forth in this Agreement. Notwithstanding
the foregoing, Acquisition agrees to extend the Tender Offer for one or
more periods of not more than 10 business days, the last of which will end
no later than May 31, 1999, if at the initial expiration date of the Tender
Offer, or any extension thereof, the Minimum Condition or the condition to
the Tender Offer requiring the expiration or termination of any applicable
waiting periods under the HSR Act is not satisfied. If (A) the Tender Offer
is modified to increase the Tender Offer Price or in any other manner
permitted by this Agreement, Acquisition may extend the Expiration Date
until not more than 10 business days after the day on which Acquisition
makes a public announcement of the modification, (B) anyone other than
Acquisition makes a tender offer for Common Stock before the Tender Offer
expires, Acquisition may extend the Expiration Date until not more than 10
business days after the other tender offer expires, or (C) Acquisition is
prevented by an order of a court or other governmental agency from
accepting shares which are tendered in response to the Tender Offer,
Acquisition may extend the Expiration Date until 10 business days after
Acquisition is able to accept shares without violating any order of any
court or other governmental agency.
Section 1.02. Company Action. (a) The Company approves of
and consents to the Tender Offer and represents and warrants that its Board
of Directors, based on a recommendation of the Special Committee, has (i)
determined that this Agreement and the transactions contemplated by it are
fair to and in the best interests of the Company and its stockholders, (ii)
approved this Agreement and the transactions contemplated by it, including
the Tender Offer and the Merger, and (iii) resolved to recommend that the
Company's stockholders accept the Tender Offer, tender their shares in
response to the Tender Offer, and adopt and approve this Agreement and the
Merger. Simultaneously with the execution of this Agreement, each of the
directors and executive officers of the Company has indicated to the
Company that he or she intends to tender and sell his or her shares of
Common Stock in response to the Tender Offer, except that directors and
executive officers whose sales of their shares in response to the Tender
Offer might result in liability under Section 16(b) of the Exchange Act
intend that if they do not tender and sell their shares in response to the
Tender Offer, they will vote their shares in favor of the Merger.
Notwithstanding anything contained in this subparagraph (a) or elsewhere in
this Agreement, if the Board, based on a recommendation of the Special
Committee after consultation with independent legal counsel, determines, in
good faith to withdraw, modify or amend the recommendation, because the
failure to do so could reasonably be expected to be a breach of the
directors' fiduciary duties under applicable law, that withdrawal,
modification or amendment will not constitute a breach of this Agreement.
(b) The Company will file with the SEC, promptly
after Acquisition files the Schedule 14D-1, a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with any amendments or supplements,
the "Schedule 14D-9") containing the recommendations described in
subparagraph (a) and will disseminate the Schedule 14D-9 as required by
Rule 14d-9 under the Exchange Act. The Company and Acquisition each agrees
to correct promptly any information provided by it for use in the Schedule
14D-9 if and to the extent that information is or becomes incomplete or
inaccurate in any material respect and the Company will file any corrected
Schedule 14D-9 with the SEC and disseminate the corrected Schedule 14D-9 to
the Company's stockholders to the extent required by the Exchange Act or
the rules and regulations under it.
(c) In connection with the Tender Offer, the Company
will promptly furnish Acquisition with mailing labels, security position
listings and any other available listing or computer files containing the
names and addresses of the record holders or beneficial owners of shares of
Common Stock as of a recent date and the Company will furnish Acquisition
with such additional information and assistance (including, without
limitation, updated lists of stockholders, mailing labels and lists of
securities positions) as Acquisition or its representatives may reasonably
request in order to communicate the Tender Offer to the record holders and
beneficial owners of the Common Stock. Subject to the requirements of
applicable law, Acquisition will hold in confidence the information
contained in any such labels, listings or files, and will use that
information only in connection with the Tender Offer and the Merger. If
this Agreement is terminated, Acquisition will return to the Company the
originals and all copies of that information which are in Acquisition's
possession.
ARTICLE II
THE MERGER
Section 2.01. Agreement to Effect Merger. If (a) Acquisition
accepts and pays for the shares which are properly tendered in response to
the Tender Offer and not withdrawn, and (b) the conditions to the Merger
set forth in Section 8.01 are satisfied or waived, Acquisition will take
all steps in its power, including voting all the Common Stock it
beneficially owns or otherwise has the power to vote in favor of adoption
of this Agreement and approval of the Merger, to cause Acquisition to be
merged into the Company on the terms and with the effects set forth in
Sections 2.02 through 2.07.
Section 2.02. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the DGCL, at
the Effective Time (as defined in Section 2.03), Acquisition shall be
merged with and into the Company. Following the Merger, the separate
existence of Acquisition shall cease and the Company shall continue as the
surviving corporation of the Merger (the "Surviving Corporation").
Section 2.03. Effective Time. As soon as practicable after
the satisfaction or, if permissible, waiver of the conditions set forth in
Article VII, the parties hereto shall cause the Merger to be consummated by
filing a certificate of merger (the "Certificate of Merger") with the
Secretary of State of the State of Delaware and by making any related
filings required under the DGCL in connection with the Merger. The Merger
shall become effective at such time as the Certificate of Merger is duly
filed with the Secretary of State of the State of Delaware or at such later
time as is agreed to by the parties hereto and as is specified in the
Certificate of Merger (the "Effective Time" or the "Closing").
Section 2.04. Effects of the Merger. From and after the
Effective Time, the Merger shall have the effects set forth in the DGCL
(including, without limitation, Sections 259, 260 and 261 thereof). Without
limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the properties, rights, privileges, powers and
franchises of the Company and Acquisition shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and
Acquisition shall become the debts, liabilities and duties of the Surviving
Corporation.
Section 2.05. Certificate of Incorporation. The certificate
of incorporation of the Company immediately prior to the Effective Time
shall be the certificate of incorporation of the Surviving Corporation (the
"Surviving Certificate") until thereafter amended in accordance with the
DGCL.
Section 2.06. Bylaws. The bylaws of Acquisition immediately
prior to the Effective Time shall be the bylaws of the Surviving
Corporation until thereafter amended in accordance with the Surviving
Certificate and the DGCL.
Section 2.07. Directors and Officers. From and after the
Effective Time, until their respective successors are duly elected or
appointed and qualified in accordance with applicable law, (a) the
directors of Acquisition at the Effective Time shall be the directors of
the Surviving Corporation and (b) the officers of the Company at the
Effective Time shall be the officers of the Surviving Corporation.
Section 2.08. Stockholders Meeting. (a) If the conditions
described in clauses (a) and (b) of Section 2.01 are satisfied, and if
approval by the Company's stockholders is required by applicable law in
order to consummate the Merger, the Company will:
(i) duly call, serve notice of, convene
and hold a special meeting of its stockholders as soon as
practicable following the Expiration Date for the purpose of
adopting this Agreement and approving the Merger (the "Stockholders
Meeting");
(ii) as promptly as practicable after the
Expiration Date, (A) file with the SEC a proxy statement or
information statement (together with any amendments thereof or
supplements thereto, the "Proxy Statement") and other proxy
soliciting materials relating to the Stockholders Meeting, (B)
respond promptly to any comments made by the staff of the SEC with
respect to the Proxy Statement or other proxy soliciting materials,
(C) cause the Proxy Statement to be mailed to its stockholders at
the earliest practicable time following the Expiration Date,
and (D) in all other respects, use its best efforts to cause its
stockholders to adopt this Agreement and approve the Merger; and
(iii) include in the Proxy Statement the
recommendation of the Board, based on the unanimous recommendation
of the Special Committee, that the stockholders of the Company vote
in favor of the adoption of this Agreement and approve the Merger,
unless the Board, based upon written advice from its counsel,
determines in good faith that the failure to amend or withdraw that
recommendation could reasonably be expected to be a breach of the
directors' fiduciary duties under applicable law.
(b) Notwithstanding the foregoing, in the event that
Acquisition shall acquire at least 90% of the outstanding shares of Common
Stock in the Tender Offer, the parties hereto shall take all necessary
actions to cause the Merger to become effective, as soon as practicable
after the expiration of the Tender Offer, without a meeting of stockholders
of Company, in accordance with Section 253 of the DGCL.
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 3.01. Conversion of Securities. At the Effective
Time, by virtue of the Merger and without any action on the part of
Acquisition, the COMPANY or the holders of any of the following securities:
(a) Each share of the Common Stock issued and
outstanding immediately prior to the Effective Time (other than any shares
of Common Stock to be canceled pursuant to Section 3.01(b) and any
Dissenting Shares (as defined below)) shall be converted into the right to
receive an amount in cash equal to the Tender Offer Price, without interest
(the "Merger Consideration"). At the Effective Time, each share of Common
Stock shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each certificate previously
evidencing any such share (other than shares to be canceled pursuant to
Section 3.01(b) and any Dissenting Shares) shall thereafter represent only
the right to receive, upon the surrender of such certificate in accordance
with the provisions of Section 3.02, an amount in cash per share equal to
the Merger Consideration. The holders of such certificates previously
evidencing such shares of Common Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such shares
of Common Stock except as otherwise provided herein or by law.
(b) Each share of capital stock of the Company (i)
held in the treasury of the Company or by any wholly owned subsidiary of
the Company or (ii) owned by Acquisition or any of its subsidiaries shall
automatically be canceled, retired and cease to exist without any
conversion thereof and no payment shall be made with respect thereto.
(c) Each share of common stock of Acquisition
outstanding immediately prior to the Effective Time shall be converted into
and become one share of common stock of the Surviving Corporation and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation.
Section 3.02. Exchange of Certificates and Cash. (a)
Exchange Agent. At or before the Effective Time, Acquisition shall enter
into an agreement providing for the matters set forth in this Section 3.02
(the "Exchange Agent Agreement") with a bank or trust company selected by
Acquisition and reasonably acceptable to the Company (the "Exchange
Agent"), authorizing such Exchange Agent to act as Exchange Agent in
connection with the Merger. Immediately prior to the Effective Time,
Acquisition shall deposit or shall cause to be deposited with or for the
account of the Exchange Agent, for the benefit of the holders of shares of
Common Stock (other than Dissenting Shares and shares to be canceled
pursuant to Section 3.01(b)), an amount in cash equal to the Merger
Consideration payable pursuant to Section 3.01(a) (such cash funds are
hereafter referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as reasonably
practicable after the Effective Time, Acquisition will instruct the
Exchange Agent to mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time evidenced
outstanding shares of Common Stock (other than Dissenting Shares and shares
to be canceled pursuant to Section 3.01(b)) (the "Certificates"), (i) a
form letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only
upon proper delivery of the Certificates to the Exchange Agent and shall be
in such form and have such other provisions as Acquisition may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Exchange Agent or to such other agent
or agents as may be appointed by Acquisition, together with a letter of
transmittal, duly executed, and such other customary documents as may be
required pursuant to such instructions (collectively, the "Transmittal
Documents"), the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration for each share of Common Stock
formerly represented by such Certificate, without any interest thereon,
less any required withholding of taxes, and the Certificate so surrendered
shall thereupon be canceled. In the event of a transfer of ownership of
shares of Common Stock which is not registered in the transfer records of
the Company, the Merger Consideration may be issued and paid in accordance
with this Article III to the transferee of such shares if the Certificate
evidencing such shares of Common Stock is presented to the Exchange Agent
and is properly endorsed or otherwise in proper form for transfer. The
signature on the Certificate or any related stock power must be properly
guaranteed and the person requesting payment of the Merger Consideration
must either pay any transfer or other taxes required by reason of the
payment to a person other than the registered holder of the Certificate so
surrendered or establish to the Surviving Corporation that such tax has
been paid or is not applicable. The Merger Consideration will be delivered
by the Exchange Agent as promptly as practicable following surrender of a
Certificate and the related Transmittal Documents. Cash payments may be
made by check unless otherwise required by a depositary institution in
connection with the book-entry delivery of securities. No interest will be
payable on such Merger Consideration. Until surrendered in accordance with
this Section 3.02, each Certificate shall be deemed at any time after the
Effective Time to evidence only the right to receive, upon such surrender,
the Merger Consideration for each share of Common Stock formerly
represented by such Certificate. The Exchange Fund shall not be used for
any purpose other than as set forth in this Article III. Any interest,
dividends or other income earned on the investment of cash held in the
Exchange Fund shall be for the account of the Surviving Corporation.
(c) Termination of Exchange Fund. Any portion of the
Exchange Fund (including the proceeds of any investments thereof) which
remains undistributed to the holders of Common Stock for one year following
the Effective Time shall be delivered to the Surviving Corporation, upon
demand. Any holders of Common Stock who have not theretofore complied with
this Article III shall thereafter look only to the Surviving Corporation
for payment of the Merger Consideration.
(d) No Liability. None of Acquisition, the Surviving
Corporation or the Company shall be liable to any holder of shares of
Common Stock for any cash delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(e) Withholding Rights. The Surviving Corporation and
the Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
shares of Common Stock such amounts as the Surviving Corporation or the
Exchange Agent is required to deduct and withhold with respect to the
making of such payment under the United States Internal Revenue Code of
1986, as amended, or any provision of state, local or foreign tax law. To
the extent that amounts are so withheld by the Surviving Corporation or the
Exchange Agent, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the shares of Common
Stock in respect of which such deduction and withholding was made by the
Surviving Corporation or the Exchange Agent.
(f) Lost, Stolen or Destroyed Certificates. In the
event any Certificates evidencing shares of Common Stock shall have been
lost, stolen or destroyed, the holder of such lost, stolen or destroyed
Certificate(s) shall execute an affidavit of that fact upon request. The
holder of any such lost, stolen or destroyed Certificate(s) shall also
deliver a reasonable indemnity against any claim that may be made against
Acquisition, the Surviving Corporation or the Exchange Agent with respect
to the Certificate(s) alleged to have been lost, stolen or destroyed. The
affidavit and any indemnity which may be required hereunder shall be
delivered to the Exchange Agent, who shall be responsible for making
payment for such lost, stolen or destroyed Certificates(s) pursuant to the
terms hereof.
Section 3.03. Stock Transfer Books. At the Effective Time,
the stock transfer books of the Company shall be closed, and there shall be
no further registration of transfers of shares of Common Stock thereafter
on the records of the Company. Any Certificates presented to the Exchange
Agent or the Surviving Corporation for any reason at or after the Effective
Time shall be exchanged for the Merger Consideration pursuant to the terms
hereof.
Section 3.04. Stock Options; Payment Rights. (a) Subject to
Section 3.04(b), each Option (as defined below) which is outstanding
immediately prior to the Effective Time, whether or not then exercisable,
shall be canceled and the Company Option Plans (as defined below) shall be
assumed by the Surviving Corporation, in each case at and as of the
Effective Time, and each holder of such canceled Options shall be paid by
the Surviving Corporation as soon as practicable, but in any event within
five days after the Effective Time, for each such Option, an amount
determined by multiplying (i) the excess, if any, of the Merger
Consideration over the applicable exercise price per share of such Option
by (ii) the number of shares issuable upon exercise of such Option, subject
to any required withholding of taxes.
(b) Prior to the Effective Time, the Company shall
use its best efforts to (i) obtain any consents from holders of the Options
and (ii) make any amendments to the terms of the Company Option Plans and
any Options granted thereunder that, in the case of either (i) or (ii) are
necessary or appropriate to give effect to the transactions contemplated by
this Section 3.04.
Section 3.05. Dissenting Shares. (a) Notwithstanding any
other provision of this Agreement to the contrary, shares of Common Stock
that are outstanding immediately prior to the Effective Time and which are
held by stockholders (i) who shall not have voted in favor of adoption of
this Agreement and (ii) who shall be entitled to and shall have demanded
properly in writing appraisal for such shares in accordance with Section
262 of the DGCL ("Dissenting Shares"), shall not be converted into or
represent the right to receive the Merger Consideration unless such
stockholders fail to perfect, withdraw or otherwise lose their right to
appraisal. Such stockholders shall be entitled to receive payment of the
appraised value of such Dissenting Shares in accordance with the provisions
of the DGCL. If, after the Effective Time, any such stockholder fails to
perfect, withdraws or loses its right to appraisal, such shares of Common
Stock shall be treated as if they had been converted as of the Effective
Time into a right to receive the Merger Consideration, without interest
thereon, upon surrender of the Certificate or Certificates that formerly
evidenced such shares of Common Stock in the manner set forth in Section
3.02.
(b) The Company shall give Acquisition prompt notice
of any demands for appraisal received by it, withdrawals of such demands,
and any other instruments served pursuant to the DGCL and received by the
Company and relating thereto. Acquisition shall direct all negotiations and
proceedings with respect to demands for appraisal under the DGCL. The
Company shall not, except with the prior written consent of Acquisition,
make any payment with respect to any demands for appraisal, or offer to
settle, or settle, any such demands.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Acquisition that:
Section 4.01. Organization and Qualifications; Subsidiaries.
The Company and each significant subsidiary of the Company (a "Company
Subsidiary") within the meaning of Rule 1-02(w) of Regulation S-X under the
Exchange Act is a corporation, partnership or other legal entity duly
incorporated or organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has the
requisite power and authority and all necessary governmental approvals, to
own, lease and operate its properties and to carry on its business as it is
now being conducted, except where the failure to be so organized, existing
and in good standing would not have a Company Material Adverse Effect (as
defined below). The Company and each Company Subsidiary is duly qualified
or licensed and in good standing to do business in each jurisdiction where
the character of the properties owned, leased or operated by it or the
nature of its business makes such qualification or licensing necessary,
except for such failures to be so qualified or licensed and in good
standing that would not, individually or in the aggregate, have a material
adverse effect on the business, assets, results of operations or financial
condition of the Company and the Company Subsidiaries, taken as a whole (a
"Company Material Adverse Effect").
Section 4.02. Certificate of Incorporation and Bylaws.
Acquisition has been given access by the Company to a complete and correct
copy of the certificate of incorporation and the bylaws or equivalent
organizational documents, each as amended to the date hereof, of the
Company and each Company Subsidiary. Such certificates of incorporation,
bylaws and equivalent organizational documents are in full force and
effect. Neither the Company nor any Company Subsidiary is in violation of
any provision of its certificate of incorporation, bylaws or equivalent
organizational documents.
Section 4.03. Capitalization. The authorized capital stock
of the Company consists of 7,000,000 shares of Common Stock and 100,000
shares of preferred stock, par value $1.00 per share ("Preferred Stock").
As of December 31, 1998, (a) 1,744,949 shares of Common Stock were
outstanding, all of which were validly issued, fully paid and
nonassessable; (b) no shares of Preferred Stock were issued and outstanding
and no action had been taken by the Board of Directors of the Company with
respect to the designation of the rights and preferences of any series of
Preferred Stock; (c) 37,100 shares of Common Stock were reserved for
issuance upon the exercise of outstanding stock options (the "Options")
granted pursuant to the Company's 1981 Non-Qualified Stock Option and Stock
Appreciation Rights Plan and 1981 Incentive Stock Option and Stock
Appreciation Rights Plan (collectively, the "Company Option Plans"); (d)
357,311 shares of Common Stock and no shares of Preferred Stock were held
in the treasury of the Company; (e) no Company Subsidiary owns any shares
of the Company's capital stock; and (f) there are no securities of any
Company Subsidiary outstanding which are convertible into or exercisable or
exchangeable for capital stock of the Company. Except as set forth above,
no shares of capital stock or other voting securities of the Company have
been issued, are reserved for issuance or are outstanding. All shares of
Common Stock subject to issuance as aforesaid, upon issuance on the terms
and conditions specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully paid and
nonassessable.
Section 4.04. Authority Relative to This Agreement. The
Company has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby (other than, with respect
to the Merger, the adoption of this Agreement by the holders of a majority
of the aggregate voting power of the issued and outstanding shares of
Common Stock the "Company Stockholder Approval"), and the filing and
recordation of appropriate merger documents as required by, and in
accordance with, the DGCL. This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Acquisition, constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the rights of creditors generally and by general
principles of equity.
Section 4.05. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company do not, and
the performance of this Agreement and the consummation of the transactions
contemplated hereby will not, (i) conflict with or violate the Company's
Restated Certificate of Incorporation, as amended to the date hereof (the
"Company Charter"), or its by-laws, or the certificate of incorporation,
by-laws or other equivalent organizational documents of any Company
Subsidiary, or (ii) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to the Company or any Company
Subsidiary or by which any property or asset of the Company or any Company
Subsidiary is bound or affected, or (iii) except as previously disclosed to
Acquisition in a letter dated February 15, 1999, result in any breach of or
constitute a default (or an event which, with notice, lapse of time or
both, would become a default) under, result in the loss of a material
benefit under or give to others any right of termination, amendment,
acceleration, increased payments or cancellation of, or result in the
creation of a lien or other encumbrance on any properties or assets of the
Company or any subsidiary pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or any other
instrument or obligation to which the Company or any subsidiary is a party
or by which the Company or any subsidiary, or any of their respective
properties or assets, is bound or affected, except, in the case of clauses
(ii) and (iii), for any such conflicts, violations, breaches, defaults or
other occurrences which (A) would not prevent or delay consummation of the
Merger in any material respect or otherwise prevent the Company from
performing its obligations under this Agreement in any material respect,
and (B) would not, individually or in the aggregate, have a Company
Material Adverse Effect. Without limiting what is said above, the execution
and delivery of this Agreement by the Company do not, and the performance
of this Agreement and the consummation of the transactions contemplated
hereby will not, conflict with or violate the River Acquisition Agreement
or give anybody any rights under the River Acquisition Agreement, except
for rights to terminate the River Acquisition Agreement and rights to
reimbursement of expenses under clause (x) of Section 8.05(b) of the River
Acquisition Agreement.
(b) The execution and delivery of this Agreement by
the Company do not, and the performance of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby
by the Company will not, require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or
regulatory authority, domestic or foreign (each a "Governmental Entity"),
except (i) for (A) any applicable requirements of the Exchange Act or the
Securities Act of 1933, as amended (the "Securities Act"), (B) the
pre-merger notification requirements of the HSR Act, (C) the filing and
recordation of appropriate merger and similar documents as required by the
DGCL, (D) filings under the rules and regulations of the American Stock
Exchange, Inc. and (E) filings and consents under any applicable foreign
laws, including, without limitation, the antitrust laws or laws intended to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade and any filings and consents which may
be required by any foreign environmental, health or safety laws or
regulations pertaining to any notification, disclosure or required approval
triggered by the Merger or the transactions contemplated by this Agreement,
and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, (x)
would not prevent or delay consummation of the Merger in any material
respect or otherwise prevent the Company from performing its obligations
under this Agreement in any material respect, and (y) would not,
individually or in the aggregate, have a Company Material Adverse Effect.
Section 4.06. Opinion of Financial Advisor. Xxxxx & Company
Incorporated has delivered to the Special Committee (as defined below) its
opinion substantially to the effect that, as of the date hereof, the
consideration to be received by the stockholders of the Company pursuant to
the Tender Offer and the Merger is fair to such stockholders from a
financial point of view.
Section 4.07. Board Approval. The Board of Directors of the
Company, based on the unanimous recommendation of the Special Committee, at
a meeting duly called and held and at which a quorum was present and
voting, unanimously (a) determined that this Agreement and the Merger are
fair to and in the best interests of the Company's stockholders, (b)
approved this Agreement, the Merger and the other transactions contemplated
hereby, and (c) resolved to recommend approval and adoption of this
Agreement by the Company's stockholders.
Section 4.08. Brokers. No broker, finder or investment
banker (other than Xxxxx & Company Incorporated) is entitled to any
brokerage, finder's or other fee or commission in connection with this
Agreement, the Merger and the other transactions contemplated hereby based
upon arrangements made by or on behalf of the Company. The fees of Xxxxx &
Company Incorporated with regard to (i) the Merger (based on a Tender Offer
Price and Merger Consideration of $76.00 per share) and the other
transactions contemplated hereby, (ii) the transactions contemplated by the
River Acquisition Agreement, and (iii) any other proposed transactions
relating to sale of the Company or substantially all its stock or assets,
will not in total exceed $1,650,000.
Section 4.09. SEC Filings.
(a) Since June 30, 1997, the Company has filed with
the SEC all forms, statements, reports and other documents it has been
required to file under the Exchange Act.
(b) The Company's Annual Report on Form 10-K for the
year ended June 30, 1998 (the "1998 10-K") and its Reports on Form 10-Q for
the periods ended September 30, 1998 and December 31, 1998 (the "10-Q's")
which were filed with the SEC, including the documents incorporated by
reference in each of them, each contained all the information required to
be included in it and, when it was filed, did not contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made in it, in light of the circumstances
under which they were made, not misleading. Without limiting what is said
in the preceding sentence, the financial statements included in the 1998
10-K all were prepared, and the financial information included in the
10-Q's was derived from financial statements which were prepared, in
accordance with United States generally accepted accounting principles
applied on a consistent basis (except that financial information included
in the 10-Q's is subject to normal year end adjustments) and presented
fairly the consolidated financial condition and the consolidated results of
operations of the Company and its subsidiaries at the dates, and for the
periods, to which they relate. At the date of this Agreement, the Company
has not filed any reports with the SEC with regard to any period which
ended, or any event which occurred, after December 31, 1998, except a
Current Report on Form 8-K filed on February 10, 1999.
Section 4.10. Schedule 14D-9. Neither the Schedule 14D-9 nor
any information supplied by the Company for inclusion in the Offering
Documents will, at the respective times the Schedule 14D-9 and the Schedule
14D-1 are filed with the SEC and first published, sent or given to the
Company's stockholders, contain a false or misleading statement with
respect to any material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
However, the Company does not make any representations or warranties with
respect to information supplied by Acquisition or any of its affiliates or
representatives for inclusion in the Schedule 14D-9 or with respect to the
Offering Documents (except to the extent of information supplied by the
Company for inclusion in the Offering Documents). The Schedule 14D-9 will
comply as to form in all material respects with the requirements of the
Exchange Act and the rules under it.
Section 4.11. Cash and Investment Securities. At the date of
this Agreement the Company and its subsidiaries (including Xxxxxx General
LLC) had, and at the Effective Time the Company and its subsidiaries will
have, cash and cash equivalents and investment securities available for
sale totaling at least $45,000,000.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUISITION
Acquisition hereby makes to the Company the representations and warranties set
forth below:
Section 5.01. Organization and Qualification. Acquisition is
a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and has the requisite power and
authority and all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as it is now being
conducted. Acquisition is duly qualified or licensed and in good standing
to do business in each jurisdiction where the character of the properties
owned, leased or operated by it or the nature of its business makes such
qualification or licensing necessary, except for such failures to be so
qualified or licensed and in good standing that would not, individually or
in the aggregate, have a material adverse effect on the business, results
of operations or financial condition of Acquisition and its subsidiaries,
taken as a whole ("Acquisition Material Adverse Effect").
Section 5.02. Authority Relative to This Agreement. (a)
Acquisition has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by Acquisition and the consummation by it of the
transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of Acquisition and no other corporate proceedings on
the part of Acquisition are necessary to authorize this Agreement or to
consummate such transactions (other than the filing and recordation of
appropriate merger documents as required by the DGCL). This Agreement has
been duly and validly executed and delivered by Acquisition and, assuming
the due authorization, execution and delivery by the Company, constitutes
the legal, valid and binding obligation of Acquisition, enforceable against
it in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the rights of creditors generally and by
general principles of equity.
(b) The transactions which are the subject of this
Agreement have been approved by the Executive Board of Deutsche Lufthansa
AG (the "Lufthansa Executive Board") which includes the senior members of
the management of Deutsche Lufthansa AG, and the Lufthansa Executive Board
has recommended to the Supervisory Board of Deutsche Lufthansa AG (the
"Lufthansa Supervisory Board") that it approve those transactions.
Section 5.03. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Acquisition do not, and
the consummation of the transactions contemplated hereby will not, (i)
conflict with or violate the certificate of incorporation or by-laws of
Acquisition, (ii) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Acquisition or by which any of its
properties or assets are bound or affected, or (iii) result in any breach
of or constitute a default (or an event which, with notice, lapse of time
or both, would become a default) under, result in the loss of a material
benefit under or give to others any right of termination, amendment,
acceleration, increased payments or cancellation of, or result in the
creation of a lien or other encumbrance on any properties or assets of
Acquisition pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or any other instrument or
obligation to which Acquisition is a party or by which Acquisition or any
of its properties or assets is bound or affected, except in the case of
clauses (ii) and (iii), for any such conflicts, violations, breaches,
defaults or other occurrences which (x) would not prevent or delay
consummation of the Merger in any material respect or otherwise prevent
Acquisition from performing its obligations under this Agreement in any
material respect, or (y) would not, individually or in the aggregate, have
a Acquisition Material Adverse Effect.
(b) The execution and delivery of this Agreement by
Acquisition do not, and the performance of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby
by Acquisition will not, require any consent, approval, authorization or
permit of, or filing with or notification to, any Governmental Entity,
except (i) for (A) any applicable requirements, if any, of the Exchange
Act, the Securities Act and state takeover laws, (B) the pre-merger
notification requirements of the HSR Act, (C) filing and recordation of
appropriate merger and similar documents as required by the DGCL and (D)
filings and consents under applicable foreign law, including, without
limitation, the antitrust laws or laws intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or
restraint of trade and any filings and consents which may be required by
any foreign environmental, health or safety laws or regulations pertaining
to any notification, disclosure or required approval triggered by the
Merger or the transactions contemplated by this Agreement, and (ii) where
the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, would not (x) prevent or delay
consummation of the Merger in any material respect or otherwise prevent
Acquisition from performing its obligations under this Agreement in any
material respect, or (y) would not, individually or in the aggregate, have
a Acquisition Material Adverse Effect.
Section 5.04. Brokers. No broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in
connection with this Agreement, the Merger and the other transactions
contemplated hereby based upon arrangements made by or on behalf of
Acquisition and its affiliates.
Section 5.05. Financial Capability. GlobeGround GmbH
("GlobeGround"), a German company, which is guaranteeing the obligations of
Acquisition under this Agreement, and is agreeing to provide the funds
which Acquisition requires to pay for the shares of Common Stock which are
properly tendered in response to the Tender Offer and not withdrawn and the
funds which the Surviving Corporation will need to pay the Merger
Consideration as contemplated by this Agreement, has adequate funds
(including funds which are available from its parent, Deutsche Lufthansa
AG, and funds which are available under existing credit lines) to enable it
to provide the funds which Acquisition requires to pay for the shares of
Common Stock which are properly tendered in response to the Tender Offer
and not withdrawn and the funds which the Surviving Corporation will need
to pay the Merger Consideration and cash out all outstanding Options, and
to fulfill all GlobeGround's other obligations as guarantor of the
obligations of Acquisition under this Agreement.
Section 5.06. Capitalization of Acquisition. The authorized
capital stock of Acquisition consists of 1,000 shares of Common Stock, par
value $.01 per share ("Acquisition Common Stock"). As of the date hereof,
200 shares of Acquisition Common Stock are outstanding, all of which (i)
were validly issued, and are fully paid and nonassessable and (ii) are
owned by LAGS (USA), Inc., a Delaware corporation, which is a wholly owned
subsidiary of GlobeGround, which in turn is a wholly owned subsidiary of
Deutsche Lufthansa AG.
Section 5.07. Offer Document. Neither the Offer Documents
nor any information supplied by Acquisition for inclusion in the Schedule
14D-9 will, at the respective times the Schedule 14D-1 and the Schedule
14D-9 are filed with the SEC and first published, sent or given to the
Company's stockholders, contain a false or misleading statement with
respect to any material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. If a
Proxy Statement is mailed to the Company's stockholders, on the date the
Proxy Statement is mailed to the Company's stockholders and on the date of
the Stockholders Meeting, if there is one, none of the information supplied
by Acquisition for inclusion in the Proxy Statement will be false or
misleading with respect to any material fact or will 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 or necessary to correct any statement in any earlier
communication with respect to the Stockholders Meeting or the solicitation
of proxies to be used at the Stockholders Meeting. However, Acquisition
does not make any representations or warranties with respect to information
supplied by the Company or any of its affiliates or representatives for
inclusion in the Offer Documents, or with respect to the Schedule 14D-9 or
the Proxy Statement (except to the extent of information supplied by
Acquisition for inclusion in the Schedule 14D-9 or the Proxy Statement).
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.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.01. Conduct of Business by the Company Pending the
Merger. Except as required by the River Acquisition Agreement, as it is in
effect on the date of this Agreement, the Company covenants and agrees
that, between the date of this Agreement and the Effective Time, unless
Acquisition shall have consented (which consent shall not be unreasonably
withheld), neither the Company nor any Company Subsidiary shall:
(a) conduct its business in any manner other than in
the ordinary course of business consistent with past practice;
(b) amend or propose to amend its certificate of
incorporation or by-laws;
(c) authorize for issuance, issue, grant, sell,
pledge, redeem or acquire for value any of its or their securities,
including options, warrants, commitments, stock appreciation rights,
subscriptions, rights to purchase or otherwise (other than the issuance of
equity securities upon the conversion of outstanding convertible securities
or in connection with any dividend reinvestment plan or any Benefit Plan
with an employee stock fund or employee stock ownership plan feature,
consistent with applicable securities laws, or the exercise of options or
warrants outstanding as of the date of this Agreement and in accordance
with the terms of such options or warrants in effect on the date of this
Agreement);
(d) declare, set aside, make or pay any dividend or
other distribution, payable in cash, stock, property, or otherwise, with
respect to any of its capital stock or other equity interests, except for
(i) the regular semi-annual dividends of $.50 per share which shall be paid
consistent with past practice and (ii) dividends and other distributions
declared and paid by a Company Subsidiary only to the Company (and also to
LAGS (USA) Inc. in the case of Xxxxxx General LLC), or subdivide,
reclassify, recapitalize, split, combine or exchange any of its shares of
capital stock;
(e) take any action, other than reasonable and usual
actions in the ordinary course of business and consistent with past
practice, with respect to accounting policies or procedures (including tax
accounting policies and procedures);
(f) take any action that would, or could reasonably
be expected to result in, any of its representations and warranties set
forth in this Agreement being untrue or in any of the conditions to the
Merger set forth in Article VIII not being satisfied; or
(g) authorize any of, or commit or agree to take any
of, the foregoing actions.
ARTICLE VII
ADDITIONAL COVENANTS
Section 7.01. Access to Information; Confidentiality. From
the date hereof to the Effective Time, the Company shall (and shall cause
the Company Subsidiaries and the officers, directors, employees, auditors
and agents of the Company and each of the Company Subsidiaries to) afford
the officers, employees and agents of Acquisition ("Acquisition's
Representatives") reasonable access at all reasonable times to its
officers, employees, agents, properties, offices, plants and other
facilities, books and records, and shall furnish Acquisition's
Representatives with all financial, operating and other data and
information as may from time to time be reasonably requested. Acquisition
agrees to, and to cause its Representatives to, hold all information it
receives as a result of the access afforded as required by this Section in
confidence, except to the extent that information (i) is or becomes
available to the public (other than through a breach of this Agreement),
(ii) becomes available to Acquisition from a third party which, insofar as
Acquisition is aware, is not under an obligation to the Company, or to a
subsidiary of the Company, to keep the information confidential, (iii) was
known to Acquisition or its affiliates (which include GlobeGround and LAGS
(USA), Inc.) before it was made available to Acquisition or its
Representatives by reason of this Section, or (iv) otherwise was
independently developed by Acquisition or its affiliates. If this Agreement
is terminated prior to the Effective Time, Acquisition will, at the request
of the Company, deliver to the Company all documents and other material
obtained by Acquisition or its Representatives from the Company or a
subsidiary in connection with the transactions which are the subject of
this Agreement or evidence that that material has been destroyed by
Acquisition or its Representatives.
Section 7.02. Proxy Statement. (a) Except as provided in
Section 2.08(b), if Acquisition accepts and pays for the shares which are
tendered in response to the Tender Offer and stockholder approval of the
Merger is required by applicable law or by the rules of the American Stock
Exchange (if they are applicable), as soon as practicable after the
Expiration Date, the Company shall prepare the Proxy Statement in form and
substance reasonably satisfactory to Acquisition and, if required by the
Exchange Act, file it with the SEC. Acquisition shall furnish to the
Company such information concerning itself and its affiliates as the
Company may reasonably request in connection with the preparation of the
Proxy Statement. The Proxy Statement will comply in all material respects
with applicable federal securities laws, except that no representation is
made by the Company with respect to information supplied by Acquisition for
inclusion in the Proxy Statement. As promptly as practicable after the
Proxy Statement has been cleared by the SEC, the Company shall mail the
Proxy Statement to its stockholders. The Proxy Statement shall include the
opinion of Xxxxx & Company Incorporated referred to in Section 4.06 hereof.
(b) The information provided by each of the Company
and Acquisition for use in the Proxy Statement shall not, at (i) the time
the Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to the stockholders of the Company or (ii) the time of the
Company stockholders' meeting contemplated by such Proxy Statement, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. If at any time prior to the Effective Time any
event or circumstance relating to any party hereto, or their respective
officers or directors, should be discovered by such party which should be
set forth in an amendment or a supplement to the Proxy Statement, such
party shall promptly inform the Company and Acquisition thereof and take
appropriate action in respect thereof.
Section 7.03. Action by Stockholders. Except as otherwise
provided in Section 2.08(b) and except as otherwise required by the
fiduciary duties of the Board of Directors of the Company (as determined in
good faith by the Special Committee after consulting with its outside legal
counsel): (a) the Company, acting through its Board of Directors, shall, in
accordance with applicable law, the Company Charter and the Company's
bylaws, duly call, give notice of, convene and hold the Stockholders
Meeting as soon as practicable after the Expiration Date for the purpose of
adopting this Agreement and (b) the Company will, through the Board of
Directors based on the recommendation of the Special Committee, (i)
recommend to its stockholders the adoption of this Agreement, and (ii) use
its best efforts to cause the Company's stockholders to approve and adopt
this Agreement and approve the Merger (the "Company Stockholder Approval").
Acquisition shall vote all shares of Common Stock owned by it, if any, in
favor of the adoption of this Agreement.
Section 7.04. No Solicitation. The Company shall not, and
shall not authorize or permit any of its officers, directors, employees or
agents to directly or indirectly, solicit, encourage, participate in or
initiate discussions or negotiations with, or provide any information to,
any corporation, partnership, person or other entity or group (other than
Acquisition, any of its affiliates or representatives) (collectively, a
"Person") concerning any merger, consolidation, tender offer, exchange
offer, sale of all or substantially all of the Company's assets, sale of
shares of capital stock or similar business combination transaction
involving the Company or any principal operating or business unit of the
Company or its Subsidiaries (an "Acquisition Proposal"). Notwithstanding
the foregoing, (i) if the Company or the Special Committee receives an
unsolicited, written indication of a willingness to make an Acquisition
Proposal at a price per share which the Special Committee reasonably
concludes is in excess of the Tender Offer Price from any Person and if the
Special Committee reasonably concludes, based upon advice of its financial
advisor, that the Person delivering such indication is capable of
consummating such an Acquisition Proposal (based upon, among other things,
the availability of financing and the capacity to obtain financing, the
expectation of receipt of required antitrust and other regulatory approvals
and the identity and background of such Person), then the Company or the
Special Committee may, directly or indirectly, provide access to or furnish
or cause to be furnished information concerning the Company's business,
properties or assets to any such Person pursuant to an appropriate
confidentiality agreement and the Company or the Special Committee may
engage in discussions related thereto, and (ii) the Company or the Special
Committee may participate in and engage in discussions and negotiations
with any Person meeting the requirement set forth in clause (i) above in
response to a written Acquisition Proposal if the Special Committee
concludes, upon advice of its legal counsel, that the failure to engage in
such discussions or negotiations would be inconsistent with the Special
Committee's (and the Board's) fiduciary duties to the Company's
stockholders under applicable law. In the event that, after the Company has
received a written Acquisition Proposal (without breaching its obligations
under clause (i) or (ii) above) but prior to the purchase by Acquisition of
Common Stock pursuant to the Tender Offer, the Special Committee
determines, in good faith and upon advice of its financial advisor and
legal counsel, that it is necessary to do so in order to comply with its
fiduciary duties to the Company's stockholders under applicable law, the
Special Committee may do any or all of the following: (x) withdraw or
modify the Board of Directors' approval or recommendation of the Tender
Offer, the Merger or this Agreement and (y) terminate this Agreement in the
manner, and under the circumstances, set forth in Section 9.01(g).
Furthermore, nothing contained in this Section 7.04 shall prohibit the
Company or its Board of Directors, upon the recommendation of the Special
Committee, from taking and disclosing to the Company's stockholders a
position with respect to a tender or exchange offer by a third party
pursuant to Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or
from making such disclosure to the Company's stockholders or otherwise
which, in the judgment of the Special Committee upon advice of legal
counsel, is necessary under applicable law or rules of any stock exchange.
The Company shall promptly (but in any event within two days) advise
Acquisition in writing of any Acquisition Proposal or any inquiry regarding
the making of an Acquisition Proposal including any request for
information, the material terms and conditions of such request, Acquisition
Proposal or inquiry and the identity of the Person making such request,
Acquisition Proposal or inquiry. The Company will, to the extent reasonably
practicable, keep Acquisition fully informed of the status and details
(including amendments or proposed amendments) of any such request,
Acquisition Proposal or inquiry. So long as the River Acquisition Agreement
remains in effect, nothing contained in this Agreement shall prohibit or
limit the rights and obligations of the Company to take such actions as may
be required by the River Acquisition Agreement as it is in effect at the
date of this Agreement and such actions shall not constitute a breach under
this Agreement.
Section 7.05. Directors' and Officers' Insurance and
Indemnification. (a) From and after the consummation of the Merger, the
parties shall, and shall cause the Surviving Corporation to, indemnify,
defend and hold harmless any person who is now, or has been at any time
prior to the date hereof, or who becomes prior to the Effective Time, an
officer or director (the "Indemnified Party") of the Company and its
subsidiaries against all losses, claims, damages, liabilities, costs and
expenses (including attorneys' fees and expenses), judgments, fines,
losses, and amounts paid in settlement, with the written approval of the
Surviving Corporation (which approval shall not be unreasonably withheld),
in connection with any actual or threatened action, suit, claim, proceeding
or investigation (each a "Claim") to the extent that any such Claim is
based on, or arises out of, (i) the fact that such person is or was a
director, officer, employee or agent of the Company or any subsidiaries or
is or was serving at the request of the Company or any of its subsidiaries
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, or (ii) this
Agreement, or any of the transactions contemplated hereby, in each case to
the extent that any such Claim pertains to any matter or fact arising,
existing, or occurring prior to or at the Effective Time, regardless of
whether such Claim is asserted or claimed prior to, at or after the
Effective Time, to the full extent permitted under Delaware law or the
Company's Certificate of Incorporation, By-laws or indemnification
agreements in effect at the date hereof, including provisions relating to
advancement of expenses incurred in the defense of any action or suit.
Without limiting the foregoing, in the event any Indemnified Party becomes
involved in any capacity in any Claim, then from and after consummation of
the Merger, the parties shall cause the Surviving Corporation to
periodically advance to such Indemnified Party its legal and other expenses
(including the cost of any investigation and preparation incurred in
connection therewith), subject to the provision by such Indemnified Party
of an undertaking to reimburse the amounts so advanced in the event of a
final non-appealable determination by a court of competent jurisdiction
that such Indemnified Party is not entitled thereto.
(b) Acquisition and the Company agree that all rights
to indemnification and all limitations on liability existing in favor of
the Indemnified Party as provided in the Company's Certificate of
Incorporation and By-laws as in effect as of the date hereof shall survive
the Merger and shall continue in full force and effect, without any
amendment thereto, for a period of six years from the Effective Time to the
extent such rights are consistent with the DGCL; provided that in the event
any claim or claims are asserted or made within such six year period, all
rights to indemnification in respect of any such claim or claims shall
continue until disposition of any and all such claims; provided further,
that any determination required to be made with respect to whether an
Indemnified Party's conduct complies with the standards set forth under
Delaware law, the Company's Certificate of Incorporation or By-laws or such
agreements, as the case may be, shall be made by independent legal counsel
selected by the Indemnified Party and reasonably acceptable to the
Surviving Corporation; and, provided further, that nothing in this Section
7.05 shall impair any rights or obligations of any present or former
directors or officers of the Company.
(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 to effectuate the purposes of this
Section 7.05, proper provision shall be made so that the successors and
assigns of the Surviving Corporation assume the obligations set forth in
this Section 7.05 and none of the actions described in clauses (i) or (ii)
shall be taken until such provision is made.
(d) The parties shall cause the Surviving Corporation
to maintain the Company's existing officers' and directors' liability
insurance policy ("D&O Insurance") for a period of not less than six years
after the Effective Date; provided, that the Surviving Corporation may
substitute therefor policies of substantially similar coverage and amounts
containing terms no less advantageous to such former directors or officers
so long as such substitution does not result in gaps or lapses in coverage;
provided, further, if the existing D&O Insurance expires or is cancelled
during such period, Acquisition or the Surviving Corporation will use its
best efforts to obtain substantially similar D&O Insurance; provided,
however, that if the aggregate annual premiums for such D&O Insurance (or
successor insurance policy) at any time during such period exceed 200% of
the per annum rate of premiums currently paid by the Company for such
insurance on the date of this Agreement, then the parties will cause the
Surviving Corporation to, and the Surviving Corporation will, provide the
maximum coverage that shall then be available at an annual premium equal to
200% of such rate.
(e) This Section 7.05 is intended to be for the
benefit of, and shall be enforceable by, the Indemnified Parties, their
heirs and personal representatives, and shall be binding on the Surviving
Corporation and its respective successors and assigns.
Section 7.06. Further Action; Best Efforts. (a) Upon the
terms and subject to the conditions hereof, each of the parties hereto
shall (i) make promptly its respective filings and thereafter make any
other required submissions under the HSR Act with respect to the Merger and
the other transactions contemplated hereby, and (ii) use its reasonable
best efforts to take, or cause to be taken, all appropriate action, and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations or otherwise to consummate the Tender Offer
and consummate and make effective the Merger and the other transactions
contemplated hereby, including, without limitation, using its reasonable
best efforts to obtain all licenses, permits, waivers, orders, consents,
approvals, authorizations, qualifications and orders of Governmental
Entities and parties to contracts with the Company and the Company
Subsidiaries as are necessary for the consummation of the Merger and the
other transactions contemplated hereby.
(b) Notwithstanding the provisions of Section
7.06(a), nothing contained in this Agreement shall obligate Acquisition to
take any action to consummate the Tender Offer, the Merger and the other
transactions contemplated hereby, the consummation of which is dependent or
conditioned on the receipt of any governmental or regulatory approval or
consent, in the event that the approval or consent so received specifically
includes conditions or restrictions in addition to those imposed by laws
and regulations of general applicability as in effect from time to time
(including conditions in addition to those imposed by existing laws and
regulations which require the prior approval of any governmental or
regulatory agency to the taking of any action or the consummation of any
transaction), the direct or indirect effect of which is or would be, to
restrict, limit or otherwise subject to penalty Acquisition in the
ownership of its assets or the conduct of its business. For purposes of the
foregoing, a condition, restriction or limitation arising out of any such
approval or consent shall be deemed to be a restriction or limitation on
Acquisition (regardless of whether Acquisition is a party to or otherwise
legally obligated by such consent or approval) to the extent that the
taking of an action or the consummation of a transaction by Acquisition
would result in Acquisition, the Company or any Company Subsidiary being in
breach or violation of such consent or approval or otherwise causing such
consent or approval to terminate or expire.
(c) In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this
Agreement shall use their reasonable best efforts to take all such action.
Section 7.07. Public Announcements. Acquisition and the
Company shall consult with each other before issuing any press release or
otherwise making any public statements with respect to this Agreement or
the transactions contemplated hereby and shall not issue any such press
release or make any such public statement without the prior consent of the
other party, which consent shall not be unreasonably withheld; provided,
however, that a party may, without the prior consent of the other party,
issue such press release or make such public statement as may be required
by law, regulation or any listing agreement or arrangement to which the
Company, Acquisition or an affiliate of Acquisition is a party with a
securities exchange or securities quotation system if it has used all
reasonable efforts to consult with the other party and to obtain such
party's consent but has been unable to do so in a timely manner.
Section 7.08. Conveyance Taxes. Acquisition and the Company
shall cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or other documents regarding any real
property transfer or gains, sales, use, transfer, value added, stock
transfer and stamp taxes, any transfer, recording, registration and other
fees, and any similar taxes which become payable in connection with the
transactions contemplated by this Agreement that are required or permitted
to be filed on or before the Effective Time.
Section 7.09. Employee Benefits.
(a) For purposes hereof, "Affected Employees" shall
mean those individuals who are employees of the Company and its
subsidiaries immediately prior to the Effective Time.
(b) Surviving Corporation shall give the Affected
Employees full credit, for purposes of eligibility, vesting and benefits
accrual under any employee benefit plans or arrangements maintained by the
Company, for the Affected Employees' service with the Company and the
Company Subsidiaries to the same extent recognized by the Company and the
Company Subsidiaries immediately prior to the Effective Time.
(c) Surviving Corporation shall provide each Affected
Employee with credit for any co-payments and deductibles paid prior to the
Effective Time in satisfying any applicable deductible or out-of-pocket
requirements under any welfare benefit plans that the Affected Employees
are eligible to participate in after the Effective Time.
(d) For a period of one year immediately following
the Effective Time, the coverage and benefits provided to the Affected
Employees pursuant to employee benefit plans and arrangements maintained by
Surviving Corporation shall be, in the aggregate, no less favorable than
those provided to the Affected Employees immediately prior to the Effective
Time.
(e) The Company and Acquisition acknowledge that the
consummation of the Merger shall constitute (i) a "Change in Control" for
purposes of employment agreements between the Company and Affected
Employees and (ii) a "change in control of the Company" for purposes of
severance agreements between the Company and Affected Employees.
Section 7.10. Knowledge of Breach. If prior to the Closing
Acquisition shall have actual knowledge of any breach of a representation
and warranty or covenant of the Company, Acquisition shall promptly notify
the Company of such knowledge, including the basis of such belief set forth
in reasonable detail. If an officer of Acquisition had actual knowledge
prior to the execution of this Agreement of a breach by the Company of any
representation, warranty, covenant, agreement or condition of this
Agreement, such breach shall not be deemed to be a breach of this Agreement
for any purpose hereunder, and Acquisition shall not have any claim or
recourse against the Company or its directors, officers, employees,
affiliates, controlling persons, agents, advisors or representatives with
respect to such breach.
ARTICLE VIII
CLOSING CONDITIONS
Section 8.01. Conditions to Obligations of Each Party to
Effect the Merger. The respective obligations of each party to effect the
Merger and the other transactions contemplated hereby shall be subject to
the satisfaction at or prior to the Effective Time of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by applicable law:
(a) Stockholder Approval. If the Company Stockholder
Approval is required by applicable law or by the rules of the American
Stock Exchange (if they are applicable), the Company Stockholder Approval
shall have been obtained.
(b) No Order. No Governmental Entity or federal or
state court of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which materially restricts, prevents or
prohibits consummation of the Merger or the other transactions contemplated
by this Agreement; provided, however, that the parties shall use their
reasonable best efforts (subject to Section 7.06(b)) to cause any such
decree, judgment, injunction or other order to be vacated or lifted.
(c) HSR Act. Any waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated, and no action shall have been instituted by the Department of
Justice or the Federal Trade Commission challenging or seeking to enjoin
the consummation of the Merger, which action shall not have been withdrawn
or terminated.
(d) Lufthansa Supervisory Board. The Lufthansa
Supervisory Board shall have approved this Agreement and the transactions
contemplated by it not later than March 15, 1999.
(e) Purchase of Shares in the Tender Offer.
Acquisition or its affiliates shall have purchased all the shares of Common
Stock which are properly tendered in response to the Tender Offer and not
withdrawn.
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 adoption
of this Agreement by the stockholders of the Company:
(a) by mutual consent of the Company (acting through
the Special Committee) and Acquisition;
(b) by Acquisition, prior to its purchasing shares of
Common Stock pursuant to the Tender Offer, upon a material breach of any
covenant or agreement on the part of the Company set forth in this
Agreement which has not been cured, or if any representation or warranty of
the Company shall have become untrue in any material respect, in either
case such that such breach or untruth is incapable of being cured prior to
May 31, 1999;
(c) by the Company, prior to Acquisition's purchasing
shares of Common Stock pursuant to the Tender Offer, upon a material breach
of any covenant or agreement on the part of Acquisition set forth in this
Agreement which has not been cured, or if any representation or warranty of
the Company or Acquisition shall have become untrue in any material
respect, in either case such that such breach or untruth is incapable of
being cured prior to May 31, 1999;
(d) by either Acquisition or the Company, if any
permanent injunction, order, decree, ruling or other action by any
Governmental Entity preventing the purchase of the shares of Common Stock
which are tendered in response to the Tender Offer or consummation of the
Merger shall have become final and nonappealable;
(e) by either Acquisition or the Company, if the
Expiration Date shall not be May 31, 1999 or an earlier date (provided that
the right to terminate this Agreement under this Section 9.01(e) shall not
be available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of or resulted in the failure of the
Effective Time to occur on or before such date);
(f) by Acquisition if: (i) the Board of Directors of
the Company (acting through the Special Committee) shall withdraw, modify
or change its recommendation so that it is not in favor of this Agreement
or the Merger or shall have resolved to do any of the foregoing; or (ii)
the Board of Directors of the Company (acting through the Special
Committee) shall have recommended or resolved to recommend to its
stockholders an Acquisition Proposal from someone other than Acquisition;
(g) by the Company if (i) the Company receives a
Superior Proposal, (ii) the Company notifies Acquisition that the Company
has received a Superior Proposal, stating in the notice (A) the material
terms of the Superior Proposal, including the amount per share the
Company's stockholders will receive per share of Common Stock (valuing any
non-cash consideration at what the Special Committee determines in good
faith, after consultation with its independent financial advisor, to be the
fair value of the non-cash consideration) and (B) that, unless Acquisition
increases the Tender Offer Price to an amount at least as great as the
amount per share the Company's stockholders would receive as a result of
the Superior Proposal, the Company may terminate this Agreement, (iii)
Acquisition does not, by 5:00 p.m., New York City time, on the second
business day after the day on which the Company notifies Acquisition of the
Superior Proposal, increase the Tender Offer Price to an amount at least as
great as the amount per share the Company's stockholders would receive as a
result of the Superior Proposal, as set forth in the notice from the
Company, without changing or modifying any other of the terms and
conditions of this Agreement and (iv) the Company has paid Acquisition the
sums (including reimbursement of expenses), and delivered to Acquisition
the agreement regarding further reimbursement of expenses, required by
Section 9.05(b). A Superior Proposal is an Acquisition Proposal or
unsolicited tender offer which (A) would result in the Company's
stockholders receiving an amount per share which is greater than the Tender
Offer Price, (B) is not subject to the outcome of a due diligence review of
the Company's business or financial condition, (C) is not subject to a
financing contingency and is from a potential acquiror which the Special
Committee reasonably concludes, based upon advice of its financial advisor,
is capable of consummating the Acquisition Proposal or, if it is subject to
a financing contingency, the Special Committee concludes, based on advice
of its financial advisor, it is reasonably likely that the financing
contingency will be fulfilled and (D) the Special Committee determines in
good faith, after consultation with its financial advisor, to be more
favorable to the Company's stockholders than the Tender Offer and Merger
contemplated by this Agreement;
(h) by either the Company (acting through the Special
Committee) or Acquisition, if the Lufthansa Supervisory Board shall not
have approved this Agreement and the transactions contemplated hereby by
March 15, 1999;
(i) by the Company, if Acquisition shall have
terminated the Tender Offer, or the Tender Offer shall have expired,
without Acquisition purchasing any shares of Common Stock pursuant thereto,
provided that the Company may not terminate this Agreement pursuant to this
Section 9.01(i) if the Company is in material breach of this Agreement; and
(j) by the Company, if the Lufthansa Executive Board
shall have withdrawn or negatively modified its recommendation to the
Lufthansa Supervisory Board that it approve the transactions which are the
subject of this Agreement.
The right of any party hereto to terminate this Agreement pursuant to this
Section 9.01 shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers or
directors, whether prior to or after the execution of this Agreement.
Section 9.02. Effect of Termination. Except as provided in
Section 9.05 or Section 10.01(b), in the event of the termination of this
Agreement pursuant to Section 9.01, this Agreement shall forthwith become
void, there shall be no liability on the part of any party hereto, or any
of their respective officers or directors, to the other and all rights and
obligations of any party hereto shall cease; provided, however, that (a)
nothing herein shall relieve any party from liability for the willful
breach of any of its representations, warranties, covenants or agreements
set forth in this Agreement and (b) a termination of this Agreement after
Acquisition purchases shares of Common Stock pursuant to the Tender Offer
but before the Effective Time will not affect any provisions of this
Agreement relating to the Tender Offer, to the Offer Documents or to any
other documents relating to the Tender Offer which are filed with the SEC
in connection with the Tender Offer.
Section 9.03. Amendment. Before or after adoption of this
Agreement by the stockholders of the Company, this Agreement may be amended
by the parties hereto at any time prior to the Effective Time; provided,
however, that (a) any such amendment shall, on behalf of the Company, have
been approved by the Special Committee and (b) after adoption of this
Agreement by the stockholders of the Company, no amendment which under
applicable law may not be made without the approval of the stockholders of
the Company may be made without such approval. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto.
Section 9.04. Waiver. At any time prior to the Effective
Time, either the Company (acting through the Special Committee), on the one
hand, or Acquisition, on the other, may (a) extend the time for the
performance of any of the obligations or other acts of the other party
hereto, (b) waive any inaccuracies in the representations and warranties of
the other party contained herein or in any document delivered pursuant
hereto and (c) waive compliance by the other party with any of the
agreements or conditions contained herein. Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the
party or parties to be bound thereby and, with respect to extensions or
waivers granted by the Company, if the Special Committee shall have
approved such waiver or extension.
Section 9.05. Expenses and Other Payments. (a) Subject to
paragraph (b) of this Section 9.05, all costs and expenses (including any
expenses related to any claims or litigation in connection with the
transactions contemplated by this Agreement, or any settlement thereof),
including, without limitation, fees and disbursements of counsel, financial
advisors and accountants and other out-of-pocket expenses, incurred or to
be incurred by the parties hereto in connection with the transactions
contemplated hereby (with respect to such party, its "Expenses"), shall be
borne solely and entirely by the party which has incurred such costs and
expenses; provided, however, that all costs and expenses related to
printing and mailing the Proxy Statement shall be borne by the Company.
(b) The Company agrees that if this Agreement is
terminated by Acquisition pursuant to clause (i) or (ii) of Section 9.01(f)
hereof, or if this Agreement is terminated by the Company pursuant to
Section 9.01(g) hereof, at or before the time when this Agreement is
terminated by the Company, or promptly after this Agreement is terminated
by Acquisition, the Company will (i) pay Acquisition $3,500,000 ($2,625,000
if this Agreement is terminated before the Lufthansa Supervisory Board
approves this Agreement and the transactions contemplated by it), (ii)
reimburse Acquisition for the reasonable expenses incurred by Acquisition
in connection with the transactions which are the subject of this Agreement
for which the Company has received reasonable supporting documentation, and
(iii) agree in writing to reimburse Acquisition, promptly after the Company
receives reasonable supporting documentation, for additional reasonable
expenses which were or are incurred by Acquisition in connection with the
transactions which are the subject of this Agreement, provided that the
total reimbursement of expenses by the Company will not exceed $875,000 if
this Agreement is terminated by Acquisition pursuant to clause (i) or (ii)
of Section 9.01(f) hereof, or by the Company pursuant to Section 9.01(g)
hereof, before the Lufthansa Supervisory Board approves this Agreement and
the transactions contemplated by it, and will not exceed $1,750,000 if this
Agreement is terminated by Acquisition pursuant to clause (i) or (ii) of
Section 9.01(f) hereof, or by the Company pursuant to Section 9.01(g)
hereof, after the Lufthansa Supervisory Board approves this Agreement and
the transactions contemplated by it.
ARTICLE X
GENERAL PROVISIONS
Section 10.01. Effectiveness of Representations, Warranties
and Agreements. (a) Except as set forth in Section 10.01(b), the
representations, warranties and agreements of each party hereto shall
remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any other party hereto, any person
controlling any such party or any of their respective officers or
directors, whether prior to or after the execution of this Agreement.
(b) The representations, warranties and agreements in
this Agreement shall terminate at the Effective Time or upon the
termination of this Agreement pursuant to Article IX, except that the
agreements set forth in Articles II, III and X and Section 7.05 shall
survive the Effective Time and those set forth in the last sentence of
Section 7.01 and Sections 9.02 and 9.05 and Article X shall survive
termination.
Section 10.02. Notices. All notices and other communications
given or made pursuant hereto shall be in writing and shall be deemed to
have been duly given or made as of the date delivered or transmitted, and
shall be effective upon receipt, if delivered personally, mailed by
registered or certified mail (postage prepaid, return receipt requested) to
the parties at the following addresses (or at such other address for a
party as shall be specified by like changes of address) or sent by
electronic transmission to the telecopier number specified below:
(a) If to Acquisition:
x/x XxxxxXxxxxx XxxX
Xxxxxxxxx-Xxxxx, Xxx. 000
X-00000 Frankfurt am Main
Germany
Attention: Xxxxx Xxxxx
Telecopier No.: 00-00-000-0000
with separate copies to:
Lufthansa German Airlines
0000 Xxxxxxxxx Xxxxxxxx
Xxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopier No.: (000) 000-0000
and
Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx
Telecopier: 000-000-0000
(b) If to the Company:
Xxxxxx General Corporation
000 Xxxxx Xxxx Xxxx
X.X. Xxx 000
Xxxxx Xxxx, XX 00000
Attention: Chief Executive Officer
Telecopier No.: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
Section 10.03. Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" means a person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, the first mentioned person;
(b) "business day" means any day other than a day on
which (i) banks in the State of New York are authorized or obligated to be
closed or (ii) the SEC or The American Stock Exchange, Inc. is closed;
(c) "control" (including the terms "controlled,"
"controlled by" and "under common control with") means the possession,
directly or indirectly or as trustee or executor, of the power to direct or
cause the direction of the management or polices of a person or entity,
whether through the ownership of stock or as trustee or executor, by
contract or credit arrangement or otherwise;
(d) "person" means any person or any corporation,
partnership, limited liability company or other legal entity; and
(e) "subsidiary" or "subsidiaries" of any person
means any corporation, partnership, joint venture or other legal entity of
which such person (either alone or through or together with any other
subsidiary) owns, directly or indirectly, at least a majority of the
securities or other interests having by their terms ordinary voting power
to elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization.
Section 10.04. Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 10.05. Severability. If any term or other provision
of this Agreement is invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by
applicable law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
Section 10.06. Entire Agreement. This Agreement, together
with the guaranty by GlobeGround and the other documents delivered in
connection herewith, constitutes the entire agreement of the parties and
supersedes all prior agreements and undertakings, both written and oral,
between the parties, or any of them, with respect to the subject matter
hereof.
Section 10.07. Assignment. This Agreement shall not be
assigned by operation of law or otherwise and any purported assignment
shall be null and void, provided that Acquisition may assign its rights,
but not its obligations, under this Agreement to any of its subsidiaries.
Section 10.08. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and
nothing in this Agreement, express or implied (other than the provisions of
Section 7.05 and 7.09, which provisions are intended to benefit and may be
enforced by the beneficiaries thereof), is intended to or shall confer upon
any person any right, benefit or remedy of any nature whatsoever under or
by reason of this Agreement.
Section 10.09. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Delaware, without regard to the conflict of laws rules thereof.
Section 10.10. Submission to Jurisdiction; Waivers. Each
party hereto irrevocably agrees that any legal action or proceeding with
respect to this Agreement or for recognition and enforcement of any
judgment in respect hereof brought by the other party hereto or its
successors or assigns may be brought and determined in the Court of
Chancery, or other courts, of the State of Delaware, and each party hereto
hereby irrevocably submits with regard to any such action or proceeding for
itself and in respect to its property, generally and unconditionally, to
the nonexclusive jurisdiction of the aforesaid courts. Each party hereto
hereby irrevocably waives, and agrees not to assert, by way of motion, as a
defense, counterclaim or otherwise, in any action or proceeding with
respect to this Agreement, (a) the defense of sovereign immunity, (b) any
claim that it is not personally subject to the jurisdiction of the courts
for any reason other than the failure to serve process in accordance with
this Section 10.10, (c) that it, or its property, is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or
otherwise), and (d) to the fullest extent permitted by applicable law, that
(i) the suit, action or proceeding in any such court is brought in an
inconvenient forum, (ii) the venue of such suit, action or proceeding is
improper and (iii) this Agreement, or the subject matter hereof, may not be
enforced in or by such courts.
Section 10.11. Enforcement of this Agreement. (a) The parties
hereto agree that irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms
and provisions hereof, this being in addition to any other remedy to which
they are entitled at law or in equity.
(b) The parties hereto acknowledge and agree that no
director, officer, employee, stockholder, affiliate or representative of
Acquisition shall have any liability whatsoever for any obligation or
liability of Acquisition.
Section 10.12. Counterparts. This Agreement may be executed
in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the Company and Acquisition have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
COMPANY:
XXXXXX GENERAL CORPORATION
By: /s/ Xxxxxxx Xxxxx
---------------------------
Name: Xxxxxxx Xxxxx
Title: President
ACQUISITION:
GLGR ACQUISITION CORPORATION
By: /s/ Xxxxxx Xxxxxx
---------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
GUARANTY
In order to induce Xxxxxx General Corporation (the
"Company") to enter into the Agreement and Plan of Merger (the "Merger
Agreement"), dated as of February 15, 1999, between the Company and GLGR
Acquisition Corp. ("Acquisition"), GlobeGround GmbH, a German company, (1)
unconditionally guarantees all the obligations of Acquisition under the
Merger Agreement, (2) agrees to provide to Acquisition all the funds
Acquisition requires to pay for shares which are properly tendered in
response to the Tender Offer described in the Merger Agreement and not
withdrawn, (3) agrees to provide the Company, as the surviving corporation
of the merger which is the subject of the Merger Agreement, all funds the
Company requires to pay the Merger Consideration specified in the Merger
Agreement with regard to the Common Stock of the Company which is issued
and outstanding immediately prior to the Effective Time of that Merger and
to cash out all outstanding options pursuant to the Merger Agreement and
(4) agrees to be bound by the provisions of Section 10.10 of the Merger
Agreement.
February 15, 1999 GLOBEGROUND GmbH
By: /s/ Xxxxx Xxxxx
--------------------------
Xxxxx Xxxxx
By: /s/ Xxxx Xxxxx
--------------------------
Xx. Xxxx Xxxxx
ANNEX A
Notwithstanding any other provisions of the Tender Offer, and in
addition to (and not in limitation of) Acquisition's rights to extend and
amend the Tender Offer at any time in its sole discretion (subject to the
provisions of the Merger Agreement), Acquisition shall not be required to
accept for payment or, subject to any applicable rules and regulations of
the SEC, including Rule 14e-1(c) under the Exchange Act (relating to
Acquisition's obligation to pay for or return tendered shares of Common
Stock promptly after termination or withdrawal of the Tender Offer), pay
for, and may delay the acceptance for payment of or, subject to the
restriction referred to above, the payment for, any tendered shares of
Common Stock, and may terminate the Tender Offer if (i) any applicable
waiting period under the HSR Act has not expired or terminated prior to the
expiration of the Tender Offer, (ii) the Minimum Condition has not been
satisfied, or (iii) at any time on or after February 15, 1999 and before
the time of acceptance of shares of Common Stock for payment pursuant to
the Tender Offer, any of the following events shall occur:
(a) The Lufthansa Supervisory Board does not approve
this Agreement, the Tender Offer, and the Merger by March 15, 1999;
(b) Any statute, rule, regulation, order or
injunction has been enacted, promulgated, entered or enforced by any
national or state government or governmental authority or by any United
States court of competent jurisdiction, which (i) prohibits, or imposes any
material limitations on, Acquisition's or its parent's ownership or
operation of all or a material portion of the Company's businesses or
assets, (ii) prohibits, or makes illegal the acceptance for payment,
payment for or purchase of Common Stock or the consummation of the Tender
Offer or the Merger, (iii) results in a material delay in or restricts the
ability of Acquisition, or renders Acquisition unable, to accept for
payment, pay for or purchase some or all of the tendered Common Stock, or
(iv) imposes material limitations on the ability of Acquisition or its
parent effectively to exercise full rights of ownership of the tendered
Common Stock, including, without limitation, the right to vote the tendered
Common Stock purchased by it on all matters properly presented to the
Company's stockholders, provided that Acquisition shall have used all
reasonable efforts to cause any such judgment, order or injunction to be
vacated or lifted; provided further that the condition specified in this
paragraph (b) shall not be deemed to exist by reason of any court
proceeding pending on the date hereof and known to Acquisition, unless in
the reasonable judgment of its parent there is any material adverse
development in any such proceeding after the date hereof, or before the
date hereof if not known to Acquisition on the date hereof, which would
result in any of the consequences referred to in clauses (i) through (iv)
above;
(c) The representations and warranties of the Company
set forth in the Merger Agreement shall not be true and correct in any
material respect as of the date of consummation of the Tender Offer as
though made on or as of such date or the Company shall have breached or
failed in any material respect to perform or comply with any material
obligation, agreement or covenant required by the Merger Agreement to be
performed or complied with by it except, in each case, (i) for changes
specifically permitted by the Merger Agreement and (ii) (A) those
representations and warranties that address matters only as of a particular
date which are true and correct as of such date or (B) where the failure of
such representations and warranties to be true and correct, or the
performance or compliance with such obligations, agreements or covenants,
do not, individually or in the aggregate, have a Company Material Adverse
Effect;
(d) The Company shall have entered into a definitive
agreement or agreement in principle with any person with respect to an
Acquisition Proposal or similar business combination with the Company;
(e) The Agreement has been terminated in accordance
with its terms; or
(f) The Company's Board of Directors or the Special
Committee has withdrawn or modified in a manner adverse to Acquisition the
Board's approval or recommendation of the Tender Offer or the Merger.
The conditions set forth above are for the sole benefit of
Acquisition, and may be waived by Acquisition, in whole or in part. Any
delay by Acquisition in exercising the right to terminate the Tender Offer
because any of the conditions are not fulfilled will not be deemed a waiver
of its right to do so.
