EXHIBIT 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
Among
PUBLICIS GROUPE S.A.,
PHILADELPHIA MERGER CORP.,
PHILADELPHIA MERGER LLC
and
BCOM3 GROUP, INC.
Dated as of March 7, 2002
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TABLE OF CONTENTS
Page
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ARTICLE I
THE MERGER
SECTION 1.01 The Merger......................................................2
SECTION 1.02 Effective Time; Closing.........................................2
SECTION 1.03 Effect of the Merger............................................2
SECTION 1.04 Certificate of Incorporation; By-Laws...........................2
SECTION 1.05 Directors and Officers..........................................3
ARTICLE II
CONVERSION OF SECURITIES
SECTION 2.01 Conversion of Securities........................................3
SECTION 2.02 Sale of Debt Portion of Parent OBSAs............................4
SECTION 2.03 Separation of Legal Title and Usufruct in Certain Shares........5
SECTION 2.04 Dissolution of Voting Trust.....................................6
SECTION 2.05 Exchange of Shares..............................................6
SECTION 2.06 Stock Transfer Books............................................9
SECTION 2.07 Adjustments.....................................................9
SECTION 2.08 Company Stock Options..........................................10
SECTION 2.09 Parent ORAs and Parent OBSAs...................................10
SECTION 2.10 Dissolution of Voting Trust....................................11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01 Organization and Qualification; Subsidiaries...................11
SECTION 3.02 Capitalization.................................................12
SECTION 3.03 Authority Relative to This Agreement...........................12
SECTION 3.04 No Conflict; Required Filings and Consents.....................13
SECTION 3.05 Compliance with Laws...........................................14
SECTION 3.06 SEC Filings; Financial Statements..............................14
SECTION 3.07 Absence of Certain Changes or Events...........................15
SECTION 3.08 Absence of Litigation..........................................15
SECTION 3.09 Employee Benefit Plans; Labor Matters..........................15
SECTION 3.10 Contracts......................................................18
SECTION 3.11 Trademarks, Patents and Copyrights.............................19
SECTION 3.12 Client Relations; Media Buying.................................19
SECTION 3.13 Key Managers...................................................19
SECTION 3.14 Taxes..........................................................19
SECTION 3.15 Vote Required..................................................20
SECTION 3.16 Accounting and Reorganization Matters..........................21
SECTION 3.17 Opinion of Financial Advisor...................................21
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SECTION 3.18 Brokers........................................................21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
SECTION 4.01 Organization and Qualification; Subsidiaries...................21
SECTION 4.02 Capitalization.................................................22
SECTION 4.03 Authority Relative to this Agreement...........................23
SECTION 4.04 No Conflict; Required Filings and Consents.....................23
SECTION 4.05 Compliance with Laws...........................................24
SECTION 4.06 Parent Reports; Financial Statements...........................24
SECTION 4.07 Absence of Certain Changes or Events...........................25
SECTION 4.08 Absence of Litigation..........................................25
SECTION 4.09 Contracts......................................................26
SECTION 4.10 Trademarks, Patents and Copyrights.............................26
SECTION 4.11 Client Relations; Media Buying.................................26
SECTION 4.12 Key Managers...................................................27
SECTION 4.13 Taxes..........................................................27
SECTION 4.14 Employee Benefits Plans; Labor Matters.........................27
SECTION 4.15 Vote Required..................................................28
SECTION 4.16 Operations of Merger Sub and Parent LLC........................28
SECTION 4.17 Reorganization Matters.........................................28
SECTION 4.18 Brokers........................................................28
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01 Conduct of Business by the Company Pending the Merger..........29
SECTION 5.02 Conduct of Business by Parent Pending the Merger...............31
SECTION 5.03 Notification of Certain Matters................................32
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01 Registration Statement; Proxy Statements.......................33
SECTION 6.02 Shareholders' Meetings.........................................36
SECTION 6.03 Access to Information; Confidentiality.........................36
SECTION 6.04 No Solicitation of Transactions................................37
SECTION 6.05 Directors' and Officers' Indemnification and Insurance.........38
SECTION 6.06 Obligations of Merger Sub......................................40
SECTION 6.07 Company Affiliates.............................................40
SECTION 6.08 Further Action; Consents; Filings..............................40
SECTION 6.09 Plan of Reorganization; Tax Treatment..........................41
SECTION 6.10 Public Announcements...........................................41
SECTION 6.11 Euronext Listing...............................................41
SECTION 6.12 Parent Governance..............................................42
SECTION 6.13 Nominee Agreement..............................................42
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SECTION 6.14 Issuance of Securities to Parent LLC...........................42
SECTION 6.15 Employee Benefits Matters......................................42
SECTION 6.16 Appointment of Custodian.......................................43
SECTION 6.17 Further Assurances.............................................43
SECTION 6.18 Adjustments....................................................44
SECTION 6.19 Reporting Requirements.........................................44
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01 Conditions to the Obligations of Each Party....................44
SECTION 7.02 Conditions to the Obligations of Parent and Merger Sub.........45
SECTION 7.03 Conditions to the Obligations of the Company...................46
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01 Termination....................................................47
SECTION 8.02 Effect of Termination..........................................48
SECTION 8.03 Amendment......................................................48
SECTION 8.04 Waiver.........................................................48
SECTION 8.05 Expenses.......................................................49
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01 Non-Survival of Representations, Warranties and
Agreements.....................................................50
SECTION 9.02 Notices........................................................50
SECTION 9.03 Certain Definitions............................................51
SECTION 9.04 Severability...................................................52
SECTION 9.05 Assignment; Binding Effect; Benefit............................52
SECTION 9.06 Incorporation of Exhibits......................................53
SECTION 9.07 Specific Performance...........................................53
SECTION 9.08 Governing Law; Forum...........................................53
SECTION 9.09 WAIVER OF JURY TRIAL...........................................53
SECTION 9.10 Headings.......................................................53
SECTION 9.11 Counterparts...................................................53
SECTION 9.12 Entire Agreement...............................................53
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EXHIBITS
Exhibit A Bcom3 Group Merger Agreement
Exhibit B Terms of Transfer Restrictions on Class A Consideration
Exhibit C-1 Parent ORA Issuance Contract (in French)
Exhibit C-2 Term Sheet (in English)
Exhibit D-1 Parent OBSA Issuance Contract (in French)
Exhibit D-2 Term Sheet (in English)
Exhibit E Parent Tax Matters Certificate
Exhibit F Company Tax Matters Certificate
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GLOSSARY OF DEFINED TERMS
Location of
Defined Terms Definition
affiliate 9.03(a)
Agencies 4.06(a)
Agreement Preamble
beneficial owner 6.04(c)
Blue Sky Laws 3.04(b)
Bcom3 Merger Recitals
Bcom3 Merger Agreement Recitals
Bcom3 Merger Sub Recitals
business day 9.03(b)
Cash Payment 2.08(a)
Certificate of Merger 1.02(a)
Change in Control Agreements 5.01(a)(ii)
Class A Common Stock 2.01(a)(i)
Class A Consideration 2.01(a)(i)
Class A Exchange Fund 2.05(a)(i)
Class B Common Stock 2.01(a)(ii)
Class B Consideration 2.01(a)(ii)
Class B Exchange Fund 2.05(a)(ii)
Closing 1.02(b)
Closing Date 1.02(b)
COB 4.04(b)
Code Recitals
Company Preamble
Company Benefit Plans 3.09(a)
Company Common Stock 2.01(a)(ii)
Company Disclosure Schedule Article III
Company Foreign Benefit Plan 3.09(i)
Company Material Adverse Effect 3.01
Company Proxy Statement 6.01(a)
Company SEC Reports 3.06(a)
Company Stock Option Plans 2.08(a)
Company Stock Options 2.08(a)
Company Stockholders' Meeting 6.01(a)
Company Subsidiaries 3.01
Company Subsidiary 3.01
Company 2001 Financial Statements 3.06(c)
Competing Transaction 6.04(c)
Confidentiality Agreements 6.03(b)
control 9.03(c)
controlled by 9.03(c)
Dentsu Recitals
DGCL Recitals
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Dissenting Shares 2.05(i)
EC 3.04(b)
Effective Time 1.02(a)
ERISA 3.09(a)
Euronext 2.05(e)(ii)
Excess Shares 2.05(e)(ii)
Exchange Act 3.04(b)
Exchange Agent 2.05(a)
Exchange Funds 2.05(a)(ii)
Expenses 8.05(a)
FTC 6.08(b)
GAAP 3.06(b)
Governmental Entity 3.04(b)
HSR Act 3.04(b)
Incentive Plan 6.15(b)
Indemnified Parties 6.05(b)
IRS 3.09(a)
knowledge 9.03(d)
Law 3.04(a)
Marketing Agent 2.02(b)
Marketing Agent Agreement 2.02(b)
Merger Recitals
Merger Consideration 2.01(a)(ii)
Merger Sub Preamble
Xxxxxx Xxxxxxx 3.17
Net Cash Proceeds 2.02(d)
Nominee 2.02(a)
Nominee Agreement 2.02(a)
NYSE 4.04(b)
OBSA Issuance Contract 2.09
ORA Issuance Contract 2.09
Order 7.01(d)
Other Parent Filings 6.01(e)
Outside Date 8.01(b)
Parent Preamble
Parent Benefit Plan 4.14(a)
Parent Reports 4.06(a)
Parent Disclosure Schedule Article IV
Parent LLC Preamble
Parent Material Adverse Effect 4.01
Parent OBSAs 2.01(a)(i)
Parent OCEANES 4.02
Parent ORAs 2.01(a)(i)
Parent Ordinary Share 4.02
Parent Proposals 6.02
Parent Proxy Statement 6.01(e)
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Parent Reports 4.06(a)
Parent Shareholders' Meeting 6.01(e)
Parent Stock Options 4.02
Parent Stock Option Plans 4.02
Parent Subsidiaries 4.01
Parent 2001 Financial Statements 4.06(c)
PBGC 3.09(b)
person 9.03(f)
Proxy Statements 6.01(e)
Registration Statement 6.01(c)
Regulation 4064/89 3.04(b)
Representatives 6.03(a)(i)
SEC 3.06(a)
Securities Act 3.04(b)
Shareholders' Meetings 6.01(e)
Shares 2.01(a)(ii)
Special Nominee 2.03(a)
Special Nominee Agreement 2.03(a)
subsidiary 9.03(f)
subsidiaries 9.03(f)
Surviving Corporation 1.01
Taxes 3.14(a)
Terminating Company Breach 8.01(h)
Terminating Parent Breach 8.01(I)
Third Party Provisions 9.05
Trust Indenture Act 6.01(b)
2000 Stock Purchase Agreements 7.02(e)
under common control with 9.03(c)
Voting Trust 2.04
Voting Trustees 2.04
Voting Trust Agreement 2.04
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AGREEMENT AND PLAN OF MERGER dated as of March 7, 2002 (this "Agreement")
among PUBLICIS GROUPE S.A., a societe anonyme organized under the laws of the
Republic of France ("Parent"), PHILADELPHIA MERGER CORP., a Delaware
corporation and a wholly owned subsidiary of Parent ("Merger Sub"),
PHILADELPHIA MERGER LLC, a Delaware limited liability company ("Parent LLC")
and BCOM3 GROUP, INC., a Delaware corporation (the "Company").
W I T N E S S E T H
WHEREAS, upon the terms and subject to the conditions of this Agreement
and in accordance with the General Corporation Law of the State of Delaware
(the "DGCL"), Parent and the Company will enter into a business combination
transaction pursuant to which the Company will merge with and into Merger Sub
(the "Merger");
WHEREAS, the Board of Directors of the Company, acting on the
recommendation of a special committee thereof, (i) has determined that the
Merger is fair to, and in the best interests of, the Company and its
stockholders and has approved and adopted this Agreement, the Merger and the
other transactions contemplated by this Agreement and (ii) has recommended the
approval of this Agreement by the stockholders of the Company;
WHEREAS, the Supervisory Board and the Management Board of Parent (i) have
determined that the Merger is consistent with and in furtherance of the
long-term business strategy of Parent and fair to, and in the best interests
of, Parent and its shareholders and have approved and adopted this Agreement,
the Merger and the other transactions contemplated by this Agreement and (ii)
have approved the execution of this Agreement and agreed to recommend for
approval to the shareholders of Parent the transactions contemplated hereby;
WHEREAS, concurrently with the execution of this Agreement, and as a
condition and inducement to Parent's and the Company's willingness to enter
into this Agreement, (i) the Company and certain shareholders of Parent have
entered into a support agreement and (ii) Parent has entered into support
agreements with Dentsu Inc., a Japanese corporation ("Dentsu"), and certain
other stockholders of the Company, in each case pursuant to which, among other
things, such holders have agreed to vote their shares of Parent and the
Company, respectively, in favor of the Merger and the other transactions
contemplated by this Agreement;
WHEREAS, immediately prior to the Effective Time, Boston Three
Corporation, a Delaware corporation and wholly owned subsidiary of the Company
("Bcom3 Merger Sub"), will merge with and into the Company, with the Company as
the surviving corporation in accordance with the Agreement and Plan of Merger
attached as Exhibit A (the "Bcom3 Merger Agreement"), between the Company,
Dentsu and Bcom3 Merger Sub (the "Bcom3 Merger"); and
WHEREAS, for United States federal income tax purposes, the Merger is
intended to qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Merger Sub, Parent LLC and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the conditions set
forth in Article VII, and in accordance with the DGCL, at the Effective Time
(as defined below in Section 1.02(a)), the Company shall be merged with and
into Merger Sub. As a result of the Merger, the separate corporate existence of
the Company shall cease and Merger Sub shall continue as the surviving
corporation of the Merger (the "Surviving Corporation").
SECTION 1.02. Effective Time; Closing. (a) On the Closing Date, as
promptly as practicable after the Closing, the parties hereto shall cause the
Merger to be consummated by filing a certificate of merger or other appropriate
documents (in any case, the "Certificate of Merger") with the Secretary of
State of the State of Delaware in such form as is required by, and executed in
accordance with, the relevant provisions of the DGCL. The term "Effective Time"
means the date and time of the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware (or such later time as may be
agreed in writing by each of the parties hereto and specified in the
Certificate of Merger).
(b) The closing of the Merger (the "Closing") shall take place at 10:00 AM
(New York City time) at the offices of Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx as soon as practicable, but in any event within
three business days after satisfaction or, if permissible, waiver of the
conditions set forth in Article VII (other than those conditions that by their
nature are to be fulfilled at the Closing), unless otherwise agreed in writing
by Parent and the Company (the date upon which the Closing occurs, the "Closing
Date").
SECTION 1.03. Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of the DGCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the property, rights, privileges, powers and franchises of
the Company and Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities, obligations, restrictions, disabilities and duties of each
of the Company and Merger Sub shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
SECTION 1.04. Certificate of Incorporation; By-Laws. (a) At the Effective
Time, the Certificate of Incorporation of Merger Sub, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended as provided by law and such
Certificate of Incorporation.
(b) At the Effective Time, the By-Laws of Merger Sub, as in effect
immediately prior to the Effective Time, shall, subject to Section 6.05(a), be
the By-Laws of the
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Surviving Corporation until thereafter amended as provided by law, the
Certificate of Incorporation of the Surviving Corporation and such By-Laws.
SECTION 1.05. Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate
of Incorporation and By-Laws of the Surviving Corporation, and the officers of
the Company immediately prior to the Effective Time shall be the initial
officers of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified.
ARTICLE II
CONVERSION OF SECURITIES
SECTION 2.01. Conversion of Securities. At the Effective Time, by virtue
of the Merger and without any action on the part of Merger Sub, the Company or
the holders of any of the following securities:
(a) (i) Each share of Class A common stock, par value $0.01 per share (the
"Class A Common Stock") of the Company issued and outstanding immediately prior
to the Effective Time shall be canceled and shall be converted into the right
to receive: (A) 1.666464 fully paid and non-assessable Parent Ordinary Shares
(as defined in Section 4.02); (B) the usufruct (usufruit) interest in 0.548870
fully paid and non-assessable Parent Ordinary Shares, together with the right
to receive bare legal title (nue propriete) to such shares on the second
anniversary of the Closing Date, as provided in Section 2.03; (C) 0.098108
obligations remboursables en actions with a nominal value of
Euro549.00 each (the "Parent ORAs"); and (D) the Net Cash Proceeds from the
sale of the debt portion of Euro53.861277 in principal amount of obligations
a bons de souscription d'actions with a nominal value of Euro305.00 each (the
"Parent OBSAs"), together with warrants to purchase 1.765944 Parent Ordinary
Shares detached from such Parent OBSAs, as provided in Section 2.02, which
securities in each case of clauses (A) through (D) are to be issued by Parent
and delivered by Parent LLC as set forth in Sections 2.02, 2.03 and 2.05. The
right to receive the securities and cash described in clauses (A) through (D)
of this paragraph is collectively referred to herein as the "Class A
Consideration."
(ii) Each share of Class B common stock, par value $0.01 per share (the
"Class B Common Stock", and collectively with the Class A Common Stock, the
"Company Common Stock"; the issued and outstanding shares of Company Common
Stock being herein collectively referred to as the "Shares") of the Company
issued and outstanding immediately prior to the Effective Time shall be
canceled and shall be converted into the right to receive: (A) 4.021399 fully
paid and non-assessable Parent Ordinary Shares; (B) bare legal title (nue
propriete) to 0.957024 Parent Ordinary Shares until the second anniversary of
the Closing Date, as provided in Section 2.03; (C) 0.047940 Parent ORAs; and
(D) the Net Cash Proceeds from the sale of the debt portion of Euro26.318797
in principal amount of Parent OBSAs, together with warrants to purchase
0.862911 Parent Ordinary Shares detached from such Parent OBSAs, as provided in
Section 2.02, which securities in each case of clauses (A) through (D) are to
be issued by Parent and delivered by Parent LLC as set forth in Sections 2.02,
2.03 and 2.05. The right to receive the securities and cash described in
clauses (A) through (D) of this paragraph is
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collectively referred to herein as the "Class B Consideration." The Class A
Consideration and the Class B Consideration shall collectively be referred to
as the "Merger Consideration."
(b) Each share of Company Common Stock held in the treasury of the Company
immediately prior to the Effective Time shall be canceled and extinguished
without any conversion thereof and no payment or distribution shall be made
with respect thereto.
(c) Each share of capital stock of Merger Sub that is outstanding
immediately prior to the Effective Time shall remain issued and outstanding
immediately after the Effective Time.
(d) The Class A Consideration will be subject to the restrictions on
transfer set forth in Exhibit A.
SECTION 2.02. Sale of Debt Portion of Parent OBSAs.
(a) Appointment of Nominee. Prior to Closing, a person selected by the
Company and reasonably acceptable to Parent shall be appointed as nominee (the
"Nominee") to hold legal title to (but not beneficial or equitable ownership
of) the Parent OBSAs and the cash proceeds from the sale of the debt portion of
the Parent OBSAs. The definitive terms governing the Nominee will be determined
by Parent and the Company consistent with this Section 2.02 and will be set
forth in an agreement among Parent, the Company and the Nominee (the "Nominee
Agreement"). The Nominee Agreement shall contain customary provisions providing
for payment of a fee to the Nominee, customary indemnification and hold
harmless provisions in favor of the Nominee and otherwise be on terms
satisfactory to the Company and Parent. At the Effective Time, all Parent OBSAs
referenced in Section 2.01(a) will be issued by Parent and delivered by Parent
LLC to the Nominee, which shall act for the benefit of and on behalf of former
holders of Shares.
(b) Appointment of Marketing Agent. Prior to Closing, a person selected by
the Company and reasonably acceptable to Parent shall be appointed as marketing
agent for the debt portion of the Parent OBSAs (the "Marketing Agent"). The
definitive terms governing the responsibilities of the Marketing Agent will be
determined by the Company consistent with this Section 2.02 and will be set
forth in an agreement with the Marketing Agent (the "Marketing Agent
Agreement"). The Marketing Agent Agreement shall contain customary provisions
providing for payment of a fee to the Marketing Agent, customary
indemnification and hold harmless provisions in favor of the Marketing Agent
and otherwise be on terms satisfactory to the Company and Parent (to the extent
customary in the French market with respect to secondary offerings of bonds).
(c) Sale of Debt Portion of Parent OBSAs. The Marketing Agent will use
reasonable best efforts to effect the sale of the debt portion of the Parent
OBSAs for cash on or promptly after the Effective Time in accordance with the
Marketing Agent Agreement. The terms and conditions of such a sale shall be
determined solely in the discretion of the Marketing Agent. The Marketing Agent
shall use reasonable best efforts to have a definitive placement or
underwriting agreement executed for such sale prior to the Effective Time;
provided, however, that the execution of such agreement shall not be a
condition to the obligations of the parties to
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effect the Merger. Immediately after the Effective Time and prior to any such
sale, the Nominee will take all necessary action to detach the warrants from
such Parent OBSAs, such that only the debt portion of such Parent OBSAs will be
sold. Parent shall take all reasonably necessary action to permit, expedite and
facilitate such sale, whether through the public market or a private placement,
including without limitation, as directed by the Marketing Agent (i) submitting
to Euronext a listing application covering the debt portion of the Parent OBSAs
and obtaining their admission to trading, (ii) assisting with roadshows
customary for an offering of this type or other marketing efforts, (iii)
cooperating with due diligence requests from the purchasers and (iv) entering
into customary agreements and indemnities in connection therewith (to the
extent customary in the French market with respect to secondary offerings of
bonds). Parent shall execute prior to the Effective Time an agreement with the
Marketing Agent providing for such obligations of Parent. Prior to the time of
any sale of the debt portion of the Parent OBSAs at the direction of the
Marketing Agent, the right to receive the Net Cash Proceeds shall be subject to
reasonable transfer restrictions to be agreed upon by the Company and Parent
prior to the Effective Time.
(d) Distribution of Proceeds and Warrants. The Nominee shall (i)
immediately after the Effective Time transfer to the Exchange Agent for deposit
in the Class A Exchange Fund and the Class B Exchange Fund, as applicable, in
accordance with Section 2.01(a), the warrants detached from the Parent OBSAs
for distribution as set forth in Section 2.05(b), and (ii) immediately after
the closing of the sale of the debt portion of the Parent OBSAs, distribute the
proceeds from the sale of the debt portion of the Parent OBSAs, together with
any interest payments or other distributions made with respect to the Parent
OBSAs since the Effective Time, net of any costs, expenses or sale commissions
or underwriting fees as follows: (x) an amount equal (after conversion into
U.S. dollars at the then-prevailing euro/U.S. dollar exchange rate) to the
aggregate Cash Payment payable under Section 2.08 (plus any interest costs
incurred by the Surviving Corporation to fund the payments required by Section
2.08 between the date of such payment and the date on which such payment is
made to the Parent pursuant to this Section 2.02(d)) shall be paid to Parent
and (y) the remaining cash proceeds (the "Net Cash Proceeds") shall be
transferred to the Exchange Agent for deposit in the Class A Exchange Fund and
the Class B Exchange Fund, as applicable in accordance with Section 2.01(a),
for distribution as set forth in Section 2.05(b).
SECTION 2.03. Separation of Legal Title and Usufruct with Respect to
Certain Shares. (a) Prior to Closing, a person selected by the Company and
reasonably acceptable to Parent shall be appointed as nominee (the "Special
Nominee") to perform the functions described in this Section 2.03. The
definitive terms governing the responsibilities of the Special Nominee will be
determined by the Company consistent with this Section 2.03 and will be set
forth in an agreement (the "Special Nominee Agreement"). The Special Nominee
Agreement shall contain customary provisions providing for payment of a fee to
the Special Nominee, customary indemnification and hold harmless provisions in
favor of the Special Nominee and otherwise be on terms satisfactory to the
Company. At the Effective Time, all Parent Ordinary Shares referenced in
Section 2.01(a)(i)(B) will be issued by Parent and delivered by Parent LLC to
the Special Nominee, which shall act for the benefit of and on behalf of the
former holders of Class A Common Stock, including with respect to the holding
of the usufruct for their benefit as described below.
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(b) On the Closing Date, the Special Nominee will convey to Dentsu,
pursuant to conveyance instruments as agreed between the Special Nominee and
Dentsu, bare legal title (nue propriete) to the Parent Ordinary Shares
referenced in Section 2.01(a)(i)(B) for a two-year period, with automatic
reversion of the nue propriete to the holder of the usufruct interest in such
shares at the expiration of such two-year period. Such conveyance instruments
will result in Dentsu, for such two-year period, being the registered holder of
such Parent Ordinary Shares on the books and records of Parent and having the
right to exercise all voting rights attached thereto at all meetings of Parent
shareholders. The conveyance instruments shall contain all provisions that are
necessary or desirable to ensure that all economic interests in such shares
shall be enjoyed exclusively by the holder of the usufruct interest in such
shares. Such conveyance instruments shall further provide that in the event
that any holder of the usufruct exercises in whole or in part its preferential
subscription rights to subscribe to newly issued Parent Ordinary Shares, the
nue propriete thereof shall automatically be transferred to Dentsu, with
automatic reversion to the usufruct holder at the end of the two-year period
following the Closing Date and all other provisions governing the respective
rights of the usufruct holders and the holder of the nue propriete that apply
to the Parent Ordinary Shares referenced in Section 2.01(a)(i)(B) shall apply
mutatis mutandis to such new shares. Except as may be provided in the Special
Nominee Agreement, the usufruct interest in such shares will be retained by the
Special Nominee for the benefit of former holders of Class A Common Stock.
SECTION 2.04. Dissolution of Voting Trust. As of the date hereof, all
outstanding shares of Class A Common Stock are held of record by voting
trustees (the "Voting Trustees") pursuant to the Amended and Restated Voting
Trust Agreement dated as of January 31, 2000 and amended and restated as of
April 18, 2001 (the "Voting Trust Agreement"). Immediately prior to the
Effective Time, the Voting Trust Agreement shall be terminated and the related
trust (the "Voting Trust") dissolved, such that at the Effective Time the
former holders of trust certificates are reflected on the books and records of
the Company as record holders of uncertificated shares of Class A Common Stock.
SECTION 2.05. Exchange of Shares. (a) Exchange Funds. (i) At the Effective
Time, for the benefit of holders of Class A Common Stock converted in
accordance with Section 2.01(a)(i), Parent shall cause Parent LLC to deposit
with a bank or trust company selected by Parent and reasonably satisfactory to
the Company (the "Exchange Agent") the Parent Ordinary Shares (other than
shares delivered under Section 2.03) and the Parent ORAs to be received by the
holders of Class A Common Stock pursuant to Section 2.01(a)(i) (such
securities, together with any dividends or distributions with respect thereto
and the Net Cash Proceeds and warrants deposited pursuant to Section 2.02(d),
being hereinafter referred to as the "Class A Exchange Fund").
(ii) At the Effective Time, for the benefit of holders of Class B Common
Stock converted in accordance with Section 2.01(a)(ii), Parent shall cause
Parent LLC to deposit with the Exchange Agent the Parent Ordinary Shares (other
than shares delivered under Section 2.03) and the Parent ORAs to be received by
the holders of Class B Common Stock pursuant to Section 2.01(a)(ii) (such
securities, together with any dividends or distributions with respect thereto
and the Net Cash Proceeds and warrants deposited pursuant to Section 2.02(d),
being hereinafter referred to as the "Class B Exchange Fund"; the Class A
Exchange
6
Fund and the Class B Exchange Fund are collectively referred to herein as the
"Exchange Funds").
(b) Exchange Procedures. Except as set forth in Section 2.05(i), as
promptly as practicable after the Effective Time, the Exchange Agent shall
deliver to each holder of shares of Class A Common Stock, as reflected in the
books and records of the Company at the Effective Time, the Merger
Consideration in the Class A Exchange Fund, together with cash in lieu of any
fractional security to which such holder is entitled pursuant to Section
2.05(e) and any dividends or other distributions to which such holder is
entitled pursuant to Section 2.05(c). As promptly as practicable after the
Effective Time, the Exchange Agent shall deliver to Dentsu the Merger
Consideration in the Class B Exchange Fund, together with cash in lieu of any
fractional security to which such holder is entitled pursuant to Section
2.05(e) and any dividends or other distributions to which such holder is
entitled pursuant to Section 2.05(c). In the event of a transfer of Shares
which is not registered in the transfer records of the Company, the Merger
Consideration may be delivered to a transferee if all documents required to
evidence and effect the transfer are presented to the Exchange Agent,
accompanied by evidence that any applicable stock transfer taxes have been
paid.
(c) Distributions with Respect to Unexchanged Shares. No dividends,
interest payments or other distributions declared or paid after the Effective
Time with respect to Parent Ordinary Shares or Parent ORAs with a record date
after the Effective Time shall be paid to any former holder of Shares with
respect to Parent Ordinary Shares or Parent ORAs represented thereby, until the
Merger Consideration shall be delivered to such holder by the Exchange Agent.
Subject to the effect of escheat, tax or other applicable Laws (as defined in
Section 3.04(a)), following such delivery, there shall be paid to the holder of
Parent Ordinary Shares or Parent ORAs, without interest, (i) at the time of
such delivery, the amount of dividends or other distributions payable in
respect of such Parent Ordinary Shares or Parent ORAs with a record date after
the Effective Time and a payment date on or prior to the date of such delivery
and (ii) at the appropriate payment date, the amount of dividends, interest
payments or other distributions, with a record date after the Effective Time
but a payment date occurring after delivery, payable with respect to such
Parent Ordinary Shares or Parent ORAs; provided, however, that Parent Ordinary
Shares issued in connection with the Merger shall not be entitled to the normal
annual cash dividend declared in 2002 related to Parent's 2001 fiscal year.
(d) No Further Rights in Company Common Stock. The Merger Consideration
shall be deemed to have been issued in full satisfaction of all rights
pertaining to any Shares.
(e) No Fractional Parent Ordinary Shares, Parent ORAs or Parent Warrants.
(i) No fractional Parent Ordinary Share, Parent ORA or Parent warrant (after
aggregating all fractional Parent Ordinary Shares, Parent ORA or Parent
warrants to be received by a particular holder) shall be issued, and such
fractional Parent Ordinary Share, Parent ORA or Parent warrant will not entitle
the owner thereof to any rights of a holder thereof. Each holder of Shares
otherwise entitled to receive a fractional Parent Ordinary Share, Parent ORA or
Parent warrant will be entitled to receive in accordance with the provisions of
this Section 2.05(e) a cash payment in lieu of that fractional Parent Ordinary
Share, Parent ORA or Parent warrant.
7
(ii) With respect to a fractional Parent Ordinary Share, such cash-in-lieu
payment shall represent the holder's proportionate interest in the net proceeds
from the sale by the Exchange Agent, on behalf of all holders otherwise
entitled to fractional Parent Ordinary Shares, of the fractional Parent
Ordinary Shares which would otherwise be issued pursuant to the Merger (the
"Excess Shares"). The sale of the Excess Shares by the Exchange Agent, as agent
for the holders of Shares, shall be executed through Euronext Paris SA
("Euronext") as soon as practicable after the Effective Time at the then
prevailing market prices and the proceeds of such sale shall be converted from
Euros into U.S. Dollars at the then prevailing exchange rates. Until the net
proceeds of any such sale shall have been distributed to the holders of Shares,
the Exchange Agent shall hold such proceeds in trust for such holders.
(iii) The Surviving Corporation shall pay all commissions, transfer taxes,
foreign exchange fees, and other out-of-pocket expenses and the Exchange
Agent's compensation and expenses in connection with such sale or sales of
Parent Ordinary Shares pursuant to this Section 2.05(e). The Exchange Agent
shall determine the portion of such net proceeds to which each holder of Shares
shall be entitled, if any, by multiplying the amount of the aggregate net
proceeds by a fraction, the numerator of which is the amount of the fractional
Parent Ordinary Share to which such holder of Shares is entitled and the
denominator of which is the aggregate amount of fractional Parent Ordinary
Shares to which all holders of Shares are entitled. As soon as practicable
after the determination of the amount of cash, if any, to be paid to holders of
Shares with respect to any fractional Parent Ordinary Shares, the Exchange
Agent shall promptly pay such amounts to such holders of Shares subject to and
in accordance with this Section 2.05(e).
(iv) With respect to fractional Parent ORAs and Parent warrants, each
holder of a fractional Parent ORA or a fractional Parent warrant shall be paid
an amount in cash (rounded down to the nearest whole cent), without interest,
equal to the product of (i) such fractional Parent ORA or fractional Parent
warrant, as the case may be, multiplied by (ii) the fair market value of the
Parent ORA and Parent warrant as determined in good faith by the Board of
Directors of the Company at the Effective Time expressed in U.S. dollars and
using the same methodology as used by the Board of Directors of the Company
under Section 2.08(a). As promptly as practicable after the determination of
the amount of cash, if any, to be paid to holders of fractional Parent ORAs and
Parent warrants, the Exchange Agent shall so notify Parent, and Parent shall
deposit such amount with the Exchange Agent and shall cause the Exchange Agent
to forward payments to such holders of fractional Parent ORAs and Parent
warrants subject to and in accordance with the terms of Sections 2.05(a) and
(b).
(f) Termination of Exchange Funds. Any portion of the Exchange Funds which
remains unclaimed by former holders of Shares one year after the Effective Time
shall be delivered to Parent, upon demand, to be held in trust for former
holders of Shares, and any such former holders of Shares shall thereafter look
only to Parent for the Merger Consideration and any dividends, interest
payments or other distributions with respect to Parent Ordinary Shares and
Parent ORAs to which they are entitled pursuant to Section 2.05(c). Any portion
of the Exchange Funds remaining unclaimed by such former holders as of a date
which is immediately prior to such time as such amounts would otherwise escheat
to or become property of any government entity shall, to the extent permitted
by applicable law, become the property of Parent free and clear of any claims
or interest of any person previously entitled thereto.
8
(g) No Liability. To the extent permitted by applicable Law (as defined in
Section 3.04(a)), neither Parent nor the Surviving Corporation shall be liable
to any holder of Shares for any portion of the Merger Consideration (or
dividends or distributions with respect thereto), or cash required by Law to be
surrendered to a public official pursuant to any abandoned property, escheat or
similar Law.
(h) Withholding Rights. Each of the Surviving Corporation and Parent shall
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Shares or Company Stock Options,
such amounts as it is required to deduct and withhold with respect to the
making of such payment under the Code, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by the Surviving
Corporation or Parent, as the case may be, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
Shares or Company Stock Options in respect of which such deduction and
withholding was made by the Surviving Corporation or Parent, as the case may
be.
(i) Dissenting Shares. Notwithstanding Section 2.01, Shares outstanding
immediately prior to the Effective Time and held by a holder who has not voted
in favor of the Merger or consented thereto in writing and who has demanded
appraisal for such Shares in accordance with the DGCL (collectively, the
"Dissenting Shares") shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect, withdraws or otherwise
loses its right to appraisal. If, after the Effective Time, any such holder
fails to perfect, withdraws or loses its right to appraisal, such Shares shall
be treated as if they had been converted as of the Effective Time into a right
to receive the Merger Consideration. The Company shall give Parent prompt
notice of any demands received by the Company for appraisal of Shares, and
Parent shall have the right to participate in all negotiations and proceedings
with respect to such demands. Except with the prior written consent of Parent,
neither the Company nor the Surviving Corporation shall make any payment with
respect to, or settle or offer to settle, any such demands. The Exchange Agent
shall withhold the Merger Consideration for each Dissenting Share and, upon
demand, shall promptly return to Parent LLC the Merger Consideration made
available to the Exchange Agent by Parent LLC pursuant to Section 2.05(a) to
pay for Shares for which appraisal rights have been perfected. The amount any
holder of Class A Common Stock is entitled to receive in an appraisal
proceeding is set forth in Section 6.6 of each holder's 2000 Stock Purchase
Agreement.
SECTION 2.06. 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 thereafter on the records of the Company.
From and after the Effective Time, the holders of Shares outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Shares, except as otherwise provided in this Agreement or by
Law.
SECTION 2.07. Adjustments. Without duplication of any required adjustments
under French Law, if after the date of this Agreement and prior to the
Effective Time, any change in the outstanding shares of capital stock of the
Company or Parent shall occur, including by reason of any reclassification,
recapitalization, stock split or combination, exchange or readjustment of
shares, or any stock dividend thereon with a record date during such period,
the Class A Consideration and the Class B Consideration and any other amounts
payable pursuant to
9
this Agreement shall be appropriately adjusted to provide the holders of Shares
the same economic effect as contemplated by this Agreement prior to such event.
SECTION 2.08. Company Stock Options. (a) Each option to purchase Shares (a
"Company Stock Option") that is outstanding immediately prior to the Effective
Time pursuant to the Company's 2000 Long-Term Equity Incentive Plan and the
2001 California Stock Option Plan (collectively, the "Company Stock Option
Plans"), by virtue of the Merger and without any action on the part of the
holder thereof, shall be cancelled (and any Company stock appreciation right
that was granted in tandem with a Company Stock Option shall also be cancelled)
immediately prior to the Effective Time, and shall, subject to Section 2.08(c),
entitle the holder thereof, in cancellation and settlement therefor, to a
payment, if any, in cash by the Company (less any applicable withholding taxes)
equal to the product of (i) the total number of shares of Company Common Stock
subject to such Company Stock Option and (ii) the excess, if any, of the fair
market value of the Class A Consideration at the Effective Time over the
exercise price per share of Company Common Stock under the applicable Company
Stock Option (the "Cash Payment"). For purposes of this Section 2.08, the fair
market value of the Class A Consideration shall be expressed in U.S. dollars
and determined in good faith by the Board of Directors of the Company pursuant
to its authority as administrator of the Company Stock Option Plans.
(b) Notwithstanding anything in Section 2.08(a) to the contrary, optionees
jointly selected by Parent and the Company shall, subject to the consent of
such optionees, be paid the Cash Payment over a set period of time and on terms
to be determined. The Company shall deliver to Parent prior to the Effective
Time a true and complete list of the Company Stock Options that remain
outstanding as of immediately prior to the Effective Time. Prior to the
Effective Time, the Company shall take all necessary action to terminate the
Company Stock Option Plans, and any other plan, program or arrangement
providing for the issuance or grant of any other interest (including phantom
interest) in the capital stock of the Company or any Subsidiary, in each case
effective immediately prior to the Effective Time, except for Sections 6(e)(vi)
and 6(f) of the 2001 California Stock Option Plan and Section 6(f) of the 2000
Long-Term Equity Incentive Plan, which shall survive in their entirety and
shall continue to apply to the former option holders, except that instead of
applying exclusively to the "Option Gain" (as defined in the Company Stock
Option Plans), the sections shall apply to the Option Gain and the Cash
Payments (and solely for purposes of interpreting such sections, any previously
paid Cash Payment shall be treated as Option Gain, and any Cash Payment due in
the future will be treated as if it were an outstanding Company Stock Option),
and any such payments shall be forfeited in the event that a former option
holder engages in the activities prohibited by such sections. The Company and
Parent agree that the Cash Payments are the sole payments or consideration that
will be made or provided with respect to or in relation to the Company Stock
Options.
(c) The Cash Payments shall be subject to the provisions of Section
6.15(e).
SECTION 2.09. Parent ORAs and Parent OBSAs. (i) The Parent ORAs to be
issued pursuant to the Merger shall have the terms set forth in the contrat
d'emission governing such Parent ORAs in substantially the form attached as
Exhibit C-1 (the "ORA Issuance Contract"), an English term sheet for which is
attached as Exhibit C-2. (ii) The Parent OBSAs to be issued pursuant to the
Merger shall have the terms set forth in the contrat d'emission governing such
parent OBSAs in substantially the form attached as Exhibit D-1 (the "OBSA
10
Issuance Contract"), an English term sheet for which is attached as Exhibit
D-2. In the case of conflict, the applicable English term sheet shall govern.
SECTION 2.10. Dentsu Payment. It is agreed and understood that neither
Parent nor the Company shall directly or indirectly be required to, nor shall
they, provide any funds or other property (other than the conversion of
Dentsu's shares of Class B Common Stock into Class B Consideration (as defined
in the Bcom3 Merger Agreement) pursuant to the Bcom3 Merger and the issuance of
the Class B Consideration to Dentsu pursuant to the Merger in exchange for its
shares of Class B Common Stock) to Dentsu in connection with the Merger,
reimburse Dentsu in cash or other property for the payment of the cash
consideration required to be paid by Dentsu in the Bcom3 Merger or otherwise
assist Dentsu in financing or funding such payment.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in the Company SEC Reports (as defined in Section
3.06(a)) or as set forth in the Disclosure Schedule delivered by the Company to
Parent and Merger Sub concurrently with the execution of this Agreement (the
"Company Disclosure Schedule") and making reference to the particular section
of this Agreement to which exception is being taken, the Company hereby
represents and warrants to Parent and Merger Sub that:
SECTION 3.01. Organization and Qualification; Subsidiaries. Each of the
Company and each subsidiary of the Company (each such subsidiary a "Company
Subsidiary", and collectively the "Company Subsidiaries") is a corporation or
other entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has all
requisite corporate or other power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failures to be so organized, existing or in good standing or to have
such corporate or other power, and authority have not had, and could not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect (as defined below). Each of the Company and the Company
Subsidiaries is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that have not had, and could not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. The term "Company Material Adverse Effect" means any
change in or effect on the business of the Company and the Company Subsidiaries
that is materially adverse to the business, assets, financial condition or
results of operations of the Company and the Company Subsidiaries taken as a
whole, except for any such change or effect resulting from or arising out of
(i) changes in circumstances or conditions affecting the advertising industry
in general, (ii) changes in general United States or global economic or
business conditions or financial markets or (iii) the announcement of this
Agreement or the transactions contemplated hereby. The Company has heretofore
made available to Parent a complete and correct copy of the Amended and
Restated Certificate of Incorporation and the Amended and Restated By-Laws of
the
11
Company. Such Amended and Restated Certificate of Incorporation and Amended and
Restated By-Laws are in full force and effect.
SECTION 3.02. Capitalization. The authorized capital stock of the Company
consists of 50,000,000 shares of capital stock, consisting of (a) 40,000,000
shares of Class A Common Stock, par value $0.01 per share and (b) 10,000,000
shares of Class B Common Stock, par value $0.01 per share. As of March 5, 2002,
(i) 15,289,804 shares of Class A Common Stock and 4,284,873 shares of Class B
Common Stock were issued and outstanding, all of which are validly issued,
fully paid and nonassessable, (ii) no shares of Company Common Stock were held
in the treasury of the Company or by the Company Subsidiaries, and (iii)
1,846,660 shares were reserved for future issuance pursuant to the Company
Stock Options. As of March 5, 2002, Company Stock Options to acquire 1,742,796
shares of Class A Common Stock were issued and outstanding. All outstanding
Shares have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth in this Section 3.02 and for changes since
March 5, 2002 resulting from the exercise of Company Stock Options outstanding
on such date, there are no outstanding shares of capital stock or voting
securities of the Company, and there are no options, warrants or other
subscription rights, preemptive or similar rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock
of the Company or any Company Subsidiary or obligating the Company or any
Company Subsidiary to issue, transfer or sell any shares of capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company or any Company Subsidiary or
obligating the Company or any Company Subsidiary to grant, extend or enter into
any such option, warrant, subscription or other right, convertible security,
agreement, arrangement or commitment. All shares of Company 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. There are no
outstanding obligations of the Company or any Company Subsidiary to repurchase,
redeem or otherwise acquire any shares of Company Common Stock or any capital
stock of any Company Subsidiary, except as provided in stock purchase
agreements entered into between the Company and each shareholder substantially
in the form included as an exhibit in the Company's registration statement on
Form 10, filed with the SEC (as defined in Section 3.06(a)) on April 30, 2001
and in stock purchase agreements entered into between the Company and holders
of Company Stock Options. Each outstanding share of capital stock of each
Company Subsidiary is duly authorized, validly issued, fully paid and
nonassessable and each such share owned by the Company or another Company
Subsidiary is free and clear of any security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on the Company's or
such other Company Subsidiary's voting rights, charges and other encumbrances
of any nature whatsoever, except where the failure to own such shares free and
clear would not, individually or in the aggregate, have a Company Material
Adverse Effect.
SECTION 3.03. Authority Relative to This Agreement. The Company has all
necessary corporate power and authority to execute and deliver this Agreement,
and, subject to obtaining the necessary approvals of the Company's
stockholders, to perform its obligations hereunder and to consummate the Merger
and the other transactions contemplated by this Agreement. The execution and
delivery of this Agreement by the Company and the consummation by the Company
of the Merger and the other transactions contemplated by this Agreement have
been duly and validly authorized by all necessary corporate action and no other
12
corporate proceedings on the part of the Company are necessary to authorize
this Agreement or to consummate the Merger and the other transactions
contemplated by this Agreement (other than, with respect to the Merger, the
approval of this Agreement by the holders of a majority of then outstanding
Shares, and the filing and recordation of appropriate merger documents as
required by the DGCL). This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by Parent, Merger Sub and Parent LLC, constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms.
SECTION 3.04. 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 by the Company will not, (i) conflict with or
violate the Amended and Restated Certificate of Incorporation or Amended and
Restated By-Laws of the Company or any equivalent organizational documents of
any Company Subsidiary, (ii) assuming that all consents, approvals,
authorizations and other actions described in Section 3.04(b) have been
obtained and all filings and obligations described in Section 3.04(b) have been
made and complied with, conflict with or violate any foreign or domestic law,
statute, ordinance, rule, regulation, order, judgment or decree ("Law")
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)
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance on any property or asset of the
Company or any Company Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation binding upon the Company or any Company Subsidiary,
except, (x) with respect to clauses (ii) and (iii), for any such conflicts,
violations, breaches, defaults or other occurrences that have not had, and
could not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect, and that could not reasonably be expected to
prevent or materially delay the consummation of the transactions contemplated
by this Agreement, and (y) with respect to clause (iii), for any such
conflicts, violations, breaches, defaults or other occurrences arising under or
out of (A) agreements the loss of the net income from which, individually or in
the aggregate, would not have a Company Material Adverse Effect or (B)
agreements the Company has the right or ability to terminate without cause with
less than six months' notice.
(b) The execution and delivery of this Agreement by the Company do not,
and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any domestic or foreign governmental or regulatory authority ("Governmental
Entity"), except (i) for applicable requirements, if any, of the Securities
Exchange Act of 1934, as amended (together with the rules and regulations
promulgated thereunder, the "Exchange Act"), the Securities Act of 1933, as
amended (together with the rules and regulations promulgated thereunder (the
"Securities Act"), state securities or "blue sky" laws ("Blue Sky Laws"), state
takeover laws, the pre-merger notification requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the "HSR Act"), the filing of a notification with
the European Commission ("EC") under Council Regulation (EEC) No. 4064/89
("Regulation 4064/89"), the applicable requirements of laws, rules and
regulations in other non-U.S. jurisdictions governing antitrust or merger
control matters and the filing and recordation of appropriate merger
13
documents as required by the DGCL and (ii) where the failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, has not had, and could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, and could
not reasonably be expected to prevent or materially delay the consummation of
the transactions contemplated by this Agreement.
SECTION 3.05. Compliance with Laws. Neither the Company nor any Company
Subsidiary is in conflict with, or in default or violation of, any Law
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, except for
any such conflicts, defaults or violations that have not had, and could not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
SECTION 3.06. SEC Filings; Financial Statements. (a) The Company has filed
all forms, reports and documents required to be filed by it with the Securities
and Exchange Commission (the "SEC") since April 30, 2001 through the date of
this Agreement (collectively, the "Company SEC Reports"). As of the respective
dates they were filed (or, if amended or superseded by a filing prior to the
date hereof, on the date of such filing), (i) the Company SEC Reports were
prepared, and all forms, reports and documents filed with the SEC after the
date of this Agreement and prior to the Effective Time will be prepared, in all
material respects in accordance with the requirements of the Securities Act or
the Exchange Act, as the case may be, and (ii) none of the Company SEC Reports
contained, nor will any forms, reports and documents filed after the date of
this Agreement and prior to the Effective Time contain, any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. No Company Subsidiary
is required to file any form, report or other document with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Company SEC Reports and in any form,
report or document filed after the date of this Agreement and prior to the
Effective Time was, or will be, as the case may be, prepared in accordance with
generally accepted accounting principles ("GAAP") in the U.S. applied on a
consistent basis throughout the periods indicated (except as may be indicated
in the notes thereto or, in the case of unaudited statements, as permitted by
Form 10-Q of the SEC) and each presented or will present fairly, in all
material respects, the consolidated financial position of the Company and the
consolidated Company Subsidiaries as at the respective dates thereof and their
consolidated results of operations for the respective periods indicated
therein, except as otherwise noted therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments which were not and are
not expected, individually or in the aggregate, to have a Company Material
Adverse Effect).
(c) Schedule 3.06(c) sets forth the Company's preliminary consolidated
balance sheet as of December 31, 2001, which preliminary balance sheet is
subject to non-material reclassifications, and the Company's consolidated
income statements for each of the years in the two-year period then ended (the
"Company 2001 Financial Statements"). The Company 2001 Financial Statements
have been prepared in accordance with U.S. GAAP (except that such statements
lack footnotes and other presentation items) applied on a consistent basis
14
throughout the periods indicated and presented and present fairly, in all
material respects, the consolidated financial position of the Company and the
consolidated Company Subsidiaries as at the respective dates thereof and their
consolidated results of operations for the respective periods indicated
therein. The Company 2001 Financial Statements will not be materially different
from the corresponding items included in the audited financial statements of
the Company to be included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2001.
SECTION 3.07. Absence of Certain Changes or Events. Since April 30, 2001,
except as contemplated by or as disclosed in this Agreement, the Company and
the Company Subsidiaries have conducted their businesses only in the ordinary
course and in a manner consistent with past practice and, since such date,
there has not been (a) any event, occurrence, development or state of
circumstances or facts that, either individually or in the aggregate, has had,
or is reasonably likely to have, a Company Material Adverse Effect, (b) any
material change by the Company in its accounting methods, principles or
practices, except for any such change required by reason of a concurrent change
in GAAP or Regulation S-X under the Exchange Act, or (c) any declaration,
setting aside or payment of any dividend or distribution in respect of the
Shares or any redemption, purchase or other acquisition of any of the Company's
securities.
SECTION 3.08. Absence of Litigation. There is no litigation, suit, claim,
action, proceeding or investigation pending or, to the knowledge of the
Company, threatened against the Company or any Company Subsidiary, or any
property or asset of the Company or any Company Subsidiary, before any court,
arbitrator or Governmental Entity, domestic or foreign, which has had, or could
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. Neither the Company nor any Company Subsidiary nor any
property or asset of the Company or any Company Subsidiary is subject to any
continuing order of, or consent decree, settlement agreement or other similar
written agreement with, any Governmental Entity, or any order, writ, judgment,
injunction, decree, determination or award of any Governmental Entity or
arbitrator having or which could reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
SECTION 3.09. Employee Benefit Plans; Labor Matters. (a) With respect to
each employee benefit plan, program, policy, agreement, arrangement and
contract (including, without limitation, any "employee benefit plan," as
defined in section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) maintained or contributed to by the Company or any
Company Subsidiary on behalf of any current or former director, officer,
employee, consultant or shareholder of the Company or any Company Subsidiary,
or with respect to which the Company or any Company Subsidiary could incur
liability under Section 4069, 4212(c) or 4204 of ERISA or otherwise, including,
without limitation, any bonus plan, consulting, employment or other
compensation agreement, incentive, stock option or other equity or equity-based
compensation or deferred compensation arrangement, stock purchase, severance
pay, change of control, sick leave, vacation pay, salary continuation,
disability, hospitalization, medical insurance, life insurance, scholarship
program and any "employee pension plan," as defined in Section 3(2) of ERISA
(the "Company Benefit Plans"), the Company has made available to Parent a true
and correct copy of (i) each material Company Benefit Plan, (ii) each trust
agreement relating to such Company Benefit Plan, if any, (iii) the most recent
annual report (Form 5500) filed with the Internal Revenue Service (the "IRS"),
if any, (iv) the most recent summary plan description for such Company Benefit
Plan for which a summary plan description
15
is required, (v) the most recent actuarial report or valuation relating to a
Company Benefit Plan subject to Title IV of ERISA and (vi) the most recent
determination letter, if any, issued by the IRS with respect to any Company
Benefit Plan intended to be qualified under Section 401(a) of the Code.
Schedule 3.09(a) sets forth a complete list of all material Company Benefit
Plans. Except as specifically provided in the foregoing documents delivered to
Parent, there are no amendments to any material Company Benefit Plan that have
been adopted or approved nor has the Company or any Company Subsidiary
undertaken to make any such amendments or to adopt or approve any new material
Company Benefit Plan.
(b) With respect to each Company Benefit Plan which is subject to Title IV
of ERISA, (i) the present value of accrued benefits under such Company Benefit
Plan, based upon the actuarial assumptions used for funding purposes in the
most recent actuarial report prepared by such Company Benefit Plan's actuary
with respect to such Company Benefit Plan, did not, as of its latest valuation
date, exceed the then current value of the assets of such Company Benefit Plan
allocable to such accrued benefits, and to the Company's knowledge, no events
have occurred that would change such calculations as of the date hereof, (ii)
no "reportable event" (within the meaning of Section 4043 of ERISA) has
occurred with respect to any Company Benefit Plan for which the 30-day notice
requirement has not been waived and the consummation of the transactions
contemplated by this Agreement will not result in the occurrence of any such
reportable event, except where such reportable event would not have a Company
Material Adverse Effect, (iii) all premiums to the Pension Benefit Guaranty
Corporation (the "PBGC") have been timely paid in full, (iv) no liability
(other than for premiums to the PBGC) under Title IV of ERISA has been or is
expected to be incurred by the Company or any Company Subsidiary, (v) the PBGC
has not instituted proceedings to terminate any such Company Benefit Plan and,
to the Company's knowledge, no condition exists that presents a risk that such
proceedings will be instituted or which would constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any such Company Benefit Plan, and (vi) no condition exists which
would subject the Company or any Company Subsidiary to any fine under Section
4071 of ERISA, except where such condition would not have a Company Material
Adverse Effect. No Company Benefit Plan is a "multiemployer plan" (as such term
is defined in section 3(37) of ERISA).
(c) With respect to the Company Benefit Plans, no event has occurred, and
there exists no condition or set of circumstances, in connection with which the
Company or any Company Subsidiary could reasonably be expected to be subject to
any actual or contingent liability under the terms of such Company Benefit
Plans, ERISA, the Code or any other applicable law which has had, or could
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. Each of the Company Benefit Plans has been operated
and administered in all material respects in accordance with applicable laws
and administrative or governmental rules and regulations, including, but not
limited to, ERISA and the Code, except where a violation of any such law, rule
or regulation would not have a Company Material Adverse Effect. Each of the
Company Benefit Plans intended to be "qualified" within the meaning of Section
401(a) of the Code has received a favorable determination letter as to such
qualification from the IRS, and no event has occurred, either by reason of any
action or failure to act, and no condition exists which would cause the loss of
any such qualification, except where such loss of qualification would not have
a Company Material Adverse Effect. All contributions or other amounts payable
by the Company or any Company
16
Subsidiary with respect to each Company Benefit Plan in respect of current or
prior plan years have been paid or accrued in accordance with GAAP and Section
412 of the Code.
(d) Neither the Company nor any Company Subsidiary is a party to any
collective bargaining or other labor union contract applicable to persons
employed by the Company or any Company Subsidiary and no collective bargaining
agreement is being negotiated by the Company or any Company Subsidiary. During
the past three years, neither the Company nor any Company Subsidiary has
experienced any work stoppage or other labor difficulty, and as of the date of
this Agreement, there is no effort by or on behalf of any labor union to
organize any persons employed by the Company and there is no labor dispute,
strike or work stoppage against the Company or any Company Subsidiary pending
or threatened in writing, except where such dispute, strike or work stoppage
has not had, and could not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect. As of the date of this
Agreement, none of the Company, any Company Subsidiary, or their respective
representatives or employees, has committed any unfair labor practices in
connection with the operation of the respective businesses of the Company or
any Company Subsidiary, and there is no charge or complaint against the Company
or any Company Subsidiary by the National Labor Relations Board or any
comparable state agency pending or threatened in writing, except where such
unfair labor practice, charge or complaint has not had, and could not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(e) The Company and the Company Subsidiaries have no liability for life,
health, medical or other welfare benefits to former directors, officers,
employees or consultants or beneficiaries or dependents thereof, except for
health continuation coverage as required by Section 4980B of the Code or Part 6
of Title I of ERISA and arrangements provided to individuals at a cost that is
not material to the Company. No condition exists that would prevent the Company
or any Company Subsidiary from amending or terminating any Company Benefit Plan
providing for health, medical or life insurance benefits in respect of any
active employee, director, officer, or consultant of the Company or any Company
Subsidiary other than limitations imposed under the terms of a collective
bargaining agreement.
(f) Neither the execution and delivery of this Agreement nor the
shareholder approval, or the consummation, of the transactions contemplated
hereby will (either alone or in conjunction with any other event) result in,
cause the accelerated vesting, funding or delivery of, or increase the amount
or value of, any payment or benefit to any director, officer, employee or
consultant of the Company or any Company Subsidiary, or result in any
limitation on the right of the Company or any Company Subsidiary to amend,
merge, terminate or receive a reversion of assets from any Company Benefit Plan
or related trust. Without limiting the generality of the foregoing, no amount
paid or payable (whether in cash, in property, or in the form of benefits) by
the Company or any Company Subsidiary in connection with the transactions
contemplated hereby (either solely as a result thereof or as a result of such
transactions in conjunction with any other event) will be an "excess parachute
payment" within the meaning of Section 280G of the Code.
(g) None of the Company and any Company Subsidiary nor any other person,
including any fiduciary, has engaged in any "prohibited transaction" (as
defined in Section 4975
17
of the Code or Section 406 of ERISA), which could reasonably be expected to
subject any of the Company Benefit Plans or their related trusts, the Company,
any Company Subsidiary or any person that the Company or any Company Subsidiary
has an obligation to indemnify, to any material tax or penalty imposed under
Section 4975 of the Code or Section 502 of ERISA.
(h) There are no material pending or threatened claims (other than claims
for benefits in the ordinary course), lawsuits or arbitrations which have been
asserted or instituted, and, to the Company's knowledge, no set of
circumstances exists which may reasonably give rise to a claim or lawsuit,
against the Company Benefit Plans, or any fiduciaries thereof, with respect to
their duties to the Company Benefit Plans or the assets of any of the trusts
under any of the Company Benefit Plans that could reasonably be expected to
result in any material liability of the Company or any Company Subsidiary to
the PBGC, the Department of Treasury, the Department of Labor, any
Multiemployer Plan, any Company Benefit Plan, any participant in a Company
Benefit Plan, or any other party.
(i) Each Company Benefit Plan that is subject to or governed by the law of
any jurisdiction other than the United States or any State or Commonwealth of
the United States (each, a "Company Foreign Benefit Plan"), has been maintained
in material compliance with its terms and conditions and in material compliance
with the requirements prescribed by any and all statutory and regulatory laws
that are applicable to such Company Foreign Benefit Plan (including, without
limitation, establishing book reserves in accordance with normal accounting
practices and qualifying for special tax treatment if such treatment was
intended), except that would not, individually or in the aggregate, be expected
to have a Company Material Adverse Effect. Except as disclosed on Schedule
3.09(i), no material Company Foreign Benefit Plan is a defined benefit pension
plan.
(j) Each of the Company and the Company Subsidiaries is in compliance
with all applicable Laws and collective bargaining agreements respecting
employment and employment practices, terms and conditions of employment, wages
(including withholding) and hours and occupational safety and health, except as
could not, individually or in the aggregate, have a Company Material Adverse
Effect.
SECTION 3.10. Contracts. Except as disclosed in the Company SEC Reports,
there is no contract or agreement that is material to the financial condition
or results of operations of the Company and the Company Subsidiaries taken as a
whole. Neither the Company nor any Company Subsidiary is in violation of or in
default under (nor does there exist any condition which upon the passage of
time or the giving of notice would cause such a violation of or default under)
any loan or credit agreement, note, bond, mortgage, indenture or lease, or any
other contract, agreement, arrangement or understanding to which it is a party
or by which it or any of its properties or assets is bound, except for
violations or defaults that have not had, and could not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect.
Neither the Company nor any Company Subsidiary is party to any agreement
restricting the right of the Company or any Company Subsidiary to compete with
another person or restricting the conduct of the business of the Company or any
Company Subsidiary in any geographical area, not including exclusivity or
similar agreements that are customary in the advertising industry. Except as
disclosed in the Company SEC Documents, the
18
Company is not a party to any contract, understanding, arrangement, letter
agreement, letter of intent, memorandum of understanding or similar arrangement
with Dentsu.
SECTION 3.11. Trademarks, Patents and Copyrights. Except as would not,
individually or in the aggregate, have a Company Material Adverse Effect, the
Company and the Company Subsidiaries own or possess adequate licenses or other
valid rights to use all patents, patent rights, trademarks, trademark rights,
trade names, trade dress, trade name rights, copyrights, service marks, trade
secrets, applications for trademarks and for service marks, know-how and other
proprietary rights and information used or held for use in connection with the
business of the Company and the Company Subsidiaries as currently conducted,
and no assertion or claim has been made in writing challenging the validity of
any of the foregoing which would have a Company Material Adverse Effect. The
conduct of the business of the Company and the Company Subsidiaries as
currently conducted does not conflict in any way with any patent, patent right,
license, trademark, trademark right, trade dress, trade name, trade name right,
service xxxx or copyright of any third party that has had, or could reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect.
SECTION 3.12. Client Relations; Media Buying. (a) As of the date hereof,
to the Company's knowledge, except as would not reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect, no
material client of the Company or any of the Company Subsidiaries has advised
the Company or such Company Subsidiary orally or in writing that it is (x)
terminating or considering terminating the handling of its business by the
Company or such Company Subsidiary as a whole or in any substantial part or (y)
planning to reduce its future spending with the Company or such Company
Subsidiary in any manner which was not reflected in the 2002 revenue budget of
the Company.
(b) The Company is not a party to any long-term media-buying agreements
material to the business of the Company.
SECTION 3.13. Key Managers. As of the date hereof, to the Company's
knowledge, except as would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect, none of the key account
managers of the Company or any of the Company Subsidiaries has advised the
Company or such Company Subsidiary orally or in writing that he or she is
terminating or considering terminating his or her employment with the Company
or such Company Subsidiary.
SECTION 3.14. Taxes. (a) Except for such matters that would not have, and
could not reasonably be expected to have, a Company Material Adverse Effect,
(i) the Company and each of the Company Subsidiaries have timely filed all
returns and reports required to be filed by them with any taxing authority with
respect to Taxes (as defined below), all such returns and reports are complete
and accurate and all Taxes shown to be due on such returns have been timely
paid, (ii) all Taxes (whether or not shown on any Tax return) owed by the
Company or any Company Subsidiary and required to have been paid have been
timely paid or, in the case of Taxes which the Company or a Company Subsidiary
is presently contesting in good faith, the Company or such Company Subsidiary
has established an adequate reserve for such Taxes, (iii) there are no pending
proceedings by any taxing authority for the assessment or collection of Taxes
against the Company or any of the Company Subsidiaries and (iv) the Company and
each
19
of the Company Subsidiaries have provided adequate reserves in their financial
statements for any accrued Taxes (or Taxes otherwise due) that have not been
paid. As used in this Agreement, "Taxes" shall mean any and all taxes, fees,
levies, duties, tariffs, imposts and other charges of any kind (together with
any and all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any government or taxing authority,
including, without limitation: taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers'
compensation, unemployment compensation or net worth; taxes or other charges in
the nature of excise, withholding, ad valorem, stamp, transfer, value added or
gains taxes; license, registration and documentation fees; and customers'
duties, tariffs and similar charges.
(b) Xxx Xxxxxxx Company, Inc. was classified as an "S corporation" within
the meaning of Section 1361 of the Code for all periods from January 1, 1987
through December 31, 1998 (and for any other period, if any, as to which it
reported as an "S corporation") for US federal income tax purposes and during
such periods validly elected to be classified as an "S corporation" in each
state where it filed a Tax return on such basis. Xxx Xxxxxxx Company, Inc. and
each of its subsidiaries, was classified as an "S corporation" or a "qualified
subchapter S subsidiary" within the meaning of Section 1361 of the Code for any
period as to which it reported as an "S corporation" or a "qualified subchapter
S subsidiary", respectively, for U.S. federal income tax purposes and during
such period validly elected to be classified as an "S corporation" or a
"qualified subchapter S subsidiary", respectively, in each state where it filed
a Tax return on such basis. Neither the Company nor any Company Subsidiary
(other than Xxx Xxxxxxx Company, Inc. and its subsidiaries) has ever filed a
Tax return reporting that such corporation was classified as an "S corporation"
or a "qualified subchapter S subsidiary" within the meaning of Section 1361 of
the Code.
(c) Neither the Company nor any Company Subsidiary has constituted either
a "distributing corporation" or a "controlled corporation" within the meaning
of Section 355(a)(1)(A) of the Code in a distribution of stock intended to
qualify for tax-free treatment under Section 355 of the Code (x) in the two
years prior to the date of this Agreement (or will constitute such a
corporation in the two years prior to the Closing Date) or (y) which otherwise
constitutes part of a "plan" or "series of related transactions" within the
meaning of Section 355(e) of the Code in conjunction with the Merger.
(d) The Company and its Subsidiaries have not made any payments, are not
obligated to make any payments, and are not a party to any agreements that
under any circumstances could obligate any of them to make any payments that
would constitute compensation in excess of the limitation set forth in Section
162(m) of the Code.
SECTION 3.15. Vote Required. The only vote of the holders of any class or
series of capital stock of the Company necessary to approve this Agreement, the
Merger and the other transactions contemplated by this Agreement is the
affirmative vote of the holders of a majority of the outstanding shares of
Company Common Stock, voting as one class in favor of the approval of this
Agreement. Pursuant to the Voting Trust Agreement, each holder of record of
trust certificates of the Voting Trust has the right to direct the Voting
Trustees in the voting on the Merger of shares of Class A Common Stock
attributable to such holder, and the Voting Trustees, as record holders of all
outstanding shares of Class A Common Stock, shall solicit such
20
directions in writing and shall vote (or refrain from voting) such shares in
accordance with such directions.
SECTION 3.16. Accounting and Reorganization Matters. To the knowledge of
the Company, neither the Company nor any of its affiliates has taken or agreed
to take any action that would prevent or impede the Merger from constituting a
reorganization within the meaning of Section 368(a) of the Code. The Company is
not aware of any agreement, plan or other circumstance that would prevent or
impede the Merger from constituting a reorganization within the meaning of
Section 368(a) of the Code.
SECTION 3.17. Opinion of Financial Advisor. The Company has received the
opinion, to be confirmed in writing, of Xxxxxx Xxxxxxx & Co. Incorporated
("Xxxxxx Xxxxxxx") to the effect that, as of the date of this Agreement, the
consideration to be received by holders of Class A Common Stock in the Merger
is fair to such holders from a financial point of view, a copy of which opinion
will be delivered to Parent promptly after the date of this Agreement.
SECTION 3.18. Brokers. No broker, finder or investment banker (other than
Xxxxxx Xxxxxxx) is entitled to any brokerage, finder's or other fee or
commission in connection with the Merger or the other transactions contemplated
by this Agreement based upon arrangements made by or on behalf of the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as disclosed in the publicly available Parent Reports filed with
the Agencies or as set forth in the Disclosure Schedule delivered by Parent and
Merger Sub to the Company concurrently with the execution of this Agreement
(the "Parent Disclosure Schedule") and making reference to the particular
subsection of this Agreement to which exception is being taken, Parent and
Merger Sub hereby jointly and severally represent and warrant to the Company
that:
SECTION 4.01. Organization and Qualification; Subsidiaries. Each of Parent
and each subsidiary of Parent (the "Parent Subsidiaries") is a societe anonyme,
corporation or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization and has all requisite corporate or other power and authority to
own, lease and operate its properties and to carry on its business as it is now
being conducted, except where the failures to be so organized, existing or in
good standing or to have such corporate or other power and authority have not
had, and could not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect (as defined below). Each of Parent
and the Parent Subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature
of its business makes qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that have not had,
and could not reasonably be expected to have, individually or in the aggregate,
a Parent Material Adverse Effect. The term "Parent Material Adverse Effect"
means any change in or effect on the business of Parent and the Parent
Subsidiaries that is materially adverse to the
21
business, assets, financial condition or results of operations of Parent and
the Parent Subsidiaries taken as a whole, except for any such change or effect
resulting from or arising out of (i) changes in circumstances or conditions
affecting the advertising industry in general, (ii) changes in general United
States or global economic or business conditions or financial markets or (iii)
the announcement of this Agreement or the transactions contemplated hereby.
Parent has heretofore made available to the Company a complete and correct copy
of Parent's statuts and Certificate of Incorporation (Kbis) and the Certificate
of Incorporation and By-Laws of Merger Sub. Such statuts, Certificate of
Incorporation (Kbis), Certificate of Incorporation and By-Laws are in full
force and effect.
SECTION 4.02. Capitalization. As of March 5, 2002, (i) Parent had issued
and outstanding 139,781,849 ordinary shares having a nominal value of 0.40
Euros per ordinary share (each a "Parent Ordinary Share"), all of which are
validly issued, fully paid and nonassessable, and (ii) 4,758,024 Parent
Ordinary Shares were held in the treasury of Parent or owned by Parent
Subsidiaries. As of March 5, 2002, Parent had outstanding stock options under
stock option plans, programs and arrangements of Parent and the Parent
Subsidiaries (the "Parent Stock Option Plans") (i) to purchase 3,423,135 Parent
Ordinary Shares held in the treasury of Parent and (ii) to subscribe for
760,343 newly issued Parent Ordinary Shares (collectively, the "Parent
Options"). As of February 26, 2002, 45,349,849 Contingent Value Rights of
Parent were outstanding. As of March 1, 2002, Parent had outstanding 648,379 of
each of ADSs and ADRs and 423,847 American Depositary Contingent Value Rights
and American Depositary Contingent Value Right Receipts. As of January 18,
2002, Parent had issued and outstanding 17,624,521 obligations a option de
conversion en actions nouvelles et/ou d'echange en actions existantes ("Parent
OCEANES") convertible into 17,624,521 Parent Ordinary Shares. All outstanding
Parent Ordinary Shares have been duly authorized and validly issued and are
fully paid and nonassessable. Except as set forth in this Section 4.02 and for
changes since March 5, 2002 resulting from the exercise of Parent Stock Options
outstanding on such date which were granted pursuant to Parent Stock Option
Plans, there are no outstanding shares of capital stock or voting securities of
the Company, and there are no options, warrants or other subscription rights,
preemptive or similar rights agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of Parent or any
Parent Subsidiary or obligating Parent or any Parent Subsidiary to issue,
transfer or sell any shares of capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of the
Parent or any Parent Subsidiary or obligating the Parent or any Parent
Subsidiary to grant, extend or enter into any such option, warrant,
subscription or other right, convertible security, agreement, arrangement or
commitment. All Parent Ordinary Shares subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid
and nonassessable. There are no outstanding obligations of Parent or any Parent
Subsidiary to repurchase, redeem or otherwise acquire any Parent Ordinary
Shares or any capital stock of any Parent Subsidiary. Each outstanding share of
capital stock of each Parent Subsidiary is duly authorized, validly issued,
fully paid and nonassessable and each such share owned by Parent or another
Parent Subsidiary is free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on Parent's
or such other Parent Subsidiary's voting rights, charges and other encumbrances
of any nature whatsoever, except where failure to own such shares free and
clear would not, individually or in the aggregate, have a Parent Material
Adverse Effect. The authorized capital stock of Merger Sub consists of 100
shares of common stock, par value $.01
22
per share, all of which are duly authorized, validly issued, fully paid and
non-assessable and free of any preemptive rights in respect thereof and all of
which are owned by Parent. Each of the Parent Ordinary Shares, Parent ORAs and
Parent OBSAs, when issued pursuant to the terms of this Agreement, and the
Parent Ordinary Shares when issued upon redemption of Parent ORAs or exercise
of Parent warrants, shall be validly issued, fully paid and nonassessable and,
subject to the terms of this Agreement, will provide its holders with the same
rights as the rights of the holders of securities of the same category.
SECTION 4.03. Authority Relative to this Agreement. Each of Parent, Merger
Sub and Parent LLC has all necessary corporate or other power and authority to
execute and deliver this Agreement, and, subject to obtaining the necessary
approvals of Parent's shareholders, to perform its obligations hereunder and to
consummate the Merger and the other transactions contemplated by this
Agreement. The execution and delivery of this Agreement by each of Parent,
Merger Sub and Parent LLC and the consummation by each of Parent, Merger Sub
and Parent LLC of the Merger and the other transactions contemplated by this
Agreement have been duly and validly authorized by all necessary corporate or
other action and no other corporate proceedings on the part of Parent are
necessary to authorize this Agreement or to consummate the Merger and the other
transactions contemplated by this Agreement (other than, with respect to the
Merger, the filing and recordation of appropriate merger documents as required
by the DGCL, the approval of the issuance to Parent LLC of (i) Parent Ordinary
Shares or obligations remboursables en actions immediately redeemable into
Parent Ordinary Shares, (ii) Parent ORAs and (iii) Parent OBSAs pursuant to the
Merger by the holders of two-thirds (2/3) of the shares present or represented
at the Parent Shareholders' Meeting (as defined in Section 6.01(e)) as required
by French law) and the approval of such issuance by the Management Board of
Parent by virtue of the power given to it by the Parent Shareholders' Meeting
or by the Chairman of the Management Board by virtue of the power given to him
by the Management Board, as the case may be. This Agreement has been duly and
validly executed and delivered by each of Parent, Merger Sub and Parent LLC
and, assuming the due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of each of Parent, Merger Sub
and Parent LLC, enforceable against each of Parent, Merger Sub and Parent LLC
in accordance with its terms.
SECTION 4.04. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by each of Parent, Merger Sub and
Parent LLC do not, and the performance of this Agreement by each of Parent,
Merger Sub and Parent LLC will not, (i) conflict with or violate the statuts
and Certificate of Incorporation (Kbis) of Parent, the Certificate of
Incorporation or By-Laws of Merger Sub or any equivalent organizational
documents of any other Parent Subsidiary, (ii) assuming that all consents,
approvals, authorizations and other actions described in Section 4.04(b) have
been obtained and all filings and obligations described in Section 4.04(b) have
been made, conflict with or violate any Law applicable to Parent or any Parent
Subsidiary or by which any property or asset of Parent or any Parent Subsidiary
is bound or affected, or (iii) result in any breach of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on
any property or asset of Parent or any Parent Subsidiary pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation binding upon Parent or any Parent
Subsidiary,
23
except, with respect to clauses (ii) and (iii), for any such conflicts,
violations, breaches, defaults, or other occurrences that have not had, and
could not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect, and that could not reasonably be expected to
prevent or materially delay the consummation of the transactions contemplated
by this Agreement and (y) with respect to clause (iii), for any such conflicts,
violations, breaches, defaults or other occurrences arising under or out of (A)
agreements the loss of the net income from which, individually or in the
aggregate, would not have a Parent Material Adverse Effect or (B) agreements
the Parent has the right or ability to terminate without cause with less than
six months notice.
(b) The execution and delivery of this Agreement by each of Parent, Merger
Sub and Parent LLC do not, and the performance of this Agreement by each of
Parent, Merger Sub and Parent LLC will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Entity, except (i) for applicable requirements, if any, of the Exchange Act,
Blue Sky Laws, the Securities Act, the New York Stock Exchange, Inc. ("NYSE"),
Euronext, state takeover laws, the HSR Act, the filing of a notification with
the Commission of the European Union under Regulation 4064/89, the applicable
requirements of Laws, rules and regulations in other non-U.S. jurisdictions
governing antitrust or merger control matters, the filing and recordation of
appropriate merger documents as required by the DGCL, compliance with
applicable requirements of the Commission des Operations de Bourse (the "COB")
relating to the Parent Ordinary Shares, Parent ORAs and Parent OBSAs to be
issued pursuant to or in connection with the Merger and compliance with any
other applicable French companies or securities or takeover laws and
regulations, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, has not
had, and could not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect, and could not reasonably be
expected to prevent or materially delay the consummation of the transactions
contemplated by this Agreement.
SECTION 4.05. Compliance with Laws. Neither Parent nor any Parent
Subsidiary is in conflict with, or in default or violation of, any Law
applicable to Parent or any Parent Subsidiary or by which any property or asset
of Parent or any Parent Subsidiary is bound or affected, except for any such
conflicts, defaults or violations that have not had, and could not reasonably
be expected to have, individually or in the aggregate, a Parent Material
Adverse Effect.
SECTION 4.06. Parent Reports; Financial Statements. (a) Parent has filed
all forms, reports and documents required to be filed by it with the SEC, the
COB, the Conseil des Marches Financiers and Euronext (the "Agencies") since
December 31, 2000 through the date of this Agreement (collectively, the "Parent
Reports"). As of the respective dates they were filed (or, if amended or
superseded by a filing prior to the date hereof, on the date of such filing),
(i) the Parent Reports were prepared, and all forms, reports and documents
filed with the Agencies after the date of this Agreement and prior to the
Effective Time will be prepared, in all material respects in accordance with
the requirements of applicable Law and (ii) none of the Parent Reports
contained, nor will any forms, reports and documents filed after the date of
this Agreement and prior to the Effective Time contain, any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not
24
misleading. No Parent Subsidiary is required to file any form, report or other
document with any Agency.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Parent Reports and in any form,
report or document filed after the date of this Agreement and prior to the
Effective Time (i) was, or will be, as the case may be, prepared in accordance
with French GAAP applied on a consistent basis throughout the periods indicated
(except as may be indicated in the notes thereto or, in the case of unaudited
statements, as permitted by Agency rules), (ii) in the case of Parent Reports
filed with the SEC, was, or will be, reconciled to U.S. GAAP as required by and
in accordance with the requirements of the Exchange Act, and (iii) presented or
will present fairly, in all material respects, the consolidated financial
position of the Parent and the consolidated Parent Subsidiaries as at the
respective dates thereof and their consolidated results of operations and cash
flows for the respective periods indicated therein, except as otherwise noted
therein (subject, in the case of unaudited statements, to normal and recurring
year-end adjustments which were not and are not expected, individually or in
the aggregate, to have a Parent Material Adverse Effect).
(c) Schedule 4.06(c) sets forth Parent's consolidated balance sheets as of
December 31, 2001, 2000 and 1999 and Parent's consolidated income statements
for each of the years in the three-year period ended December 31, 2001 (the
"Parent 2001 Financial Statements"). The Parent 2001 Financial Statements have
been prepared in accordance with French GAAP (except that such statements lack
notes and other presentation items) applied on a consistent basis throughout
the periods indicated and presented and present fairly, in all material
respects, the consolidated financial position of Parent and the consolidated
Parent Subsidiaries as at the respective dates thereof and their consolidated
results of operations for the respective periods indicated therein. The Parent
2001 Financial Statements will not be materially different from the
corresponding items included in the audited financial statements of Parent to
be included in Parent's Document de Reference for the year ended December 31,
2001.
SECTION 4.07. Absence of Certain Changes or Events. Since December 31,
2000, except as contemplated by or as disclosed in this Agreement, Parent and
the Parent Subsidiaries have conducted their businesses only in the ordinary
course and in a manner consistent with past practice and, since such date,
there has not been (a) any event, occurrence, development or state of
circumstances or facts that, either individually or in the aggregate, has had
or is reasonably likely to have, a Parent Material Adverse Effect, (b) any
material change by Parent in its accounting methods, principles or practices,
or (c) any declaration, setting aside or payment of any dividend or
distribution in respect of the Parent Ordinary Shares or any redemption,
purchase or other acquisition of any of Parent's securities.
SECTION 4.08. Absence of Litigation. There is no litigation, suit, claim,
action, proceeding or investigation pending or, to the knowledge of the Parent,
threatened against Parent or any Parent Subsidiary, or any property or asset of
the Parent or any Parent Subsidiary, before any court, arbitrator or
Governmental Entity, domestic or foreign, which has had or could reasonably be
expected to have, individually or in the aggregate, a Parent Material Adverse
Effect. Neither the Parent nor any Parent Subsidiary nor any property or asset
of the Parent or any Parent Subsidiary is subject to any continuing order of,
consent decree, settlement agreement or other similar written agreement with
any Governmental Entity, or any order, writ, judgment,
25
injunction, decree, determination or award of any Governmental Entity or
arbitrator having or which would reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect.
SECTION 4.09. Contracts. Except as disclosed in the Parent Reports, there
is no contract or agreement that is material to the financial condition or
results of operations of Parent and the Parent Subsidiaries taken as a whole.
Neither Parent nor any Parent Subsidiary is in violation of or in default under
(nor does there exist any condition which upon the passage of time or the
giving of notice would cause such a violation of or default under) any loan or
credit agreement, note, bond, mortgage, indenture or lease, or any other
contract, agreement, arrangement or understanding to which it is a party or by
which it or any of its properties or assets is bound, except for violations or
defaults that have not had, and could not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect. Neither
Parent nor any Parent Subsidiary is a party to any agreement restricting the
right of Parent or any Parent Subsidiary to compete with another person or
restricting the conduct of the business of the Parent or any Parent Subsidiary
in any geographical area, not including exclusivity or similar agreements that
are customary in the advertising industry. There are no contracts,
understandings, arrangements, letter agreements, letters of intent, memoranda
of understanding or similar arrangements between Parent and Societe Anonyme
Somarel.
SECTION 4.10. Trademarks, Patents and Copyrights. Except as would not,
individually or in the aggregate, have a Parent Material Adverse Effect, Parent
and the Parent Subsidiaries own or possess adequate licenses or other valid
rights to use all patents, patent rights, trademarks, trademark rights, trade
names, trade dress, trade name rights, copyrights, service marks, trade
secrets, applications for trademarks and for service marks, know-how and other
proprietary rights and information used or held for use in connection with the
business of Parent and the Parent Subsidiaries as currently conducted, and no
assertion or claim has been made in writing challenging the validity of any of
the foregoing which would have a Parent Material Adverse Effect. The conduct of
the business of Parent and the Parent Subsidiaries as currently conducted does
not conflict in any way with any patent, patent right, license, trademark,
trademark right, trade dress, trade name, trade name right, service xxxx or
copyright of any third party that has had, or could reasonably be expected to
have, individually or in the aggregate, a Parent Material Adverse Effect.
SECTION 4.11. Client Relations; Media Buying. (a) As of the date hereof,
to Parent's knowledge, except as would not reasonably be expected, individually
or in the aggregate, to have a Parent Material Adverse Effect, no material
client of Parent or any of the Parent Subsidiaries has advised Parent or such
Parent Subsidiary orally or in writing that it is (x) terminating or
considering terminating the handling of its business by Parent or such Parent
Subsidiary as a whole or in any substantial part or (y) planning to reduce its
future spending with Parent or such Parent Subsidiary in any manner which was
not reflected in the 2002 revenue budget of Parent.
(b) Parent is not a party to any long-term media-buying agreements
material to its business.
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SECTION 4.12. Key Managers. As of the date hereof, to Parent's knowledge,
except as would not reasonably be expected, individually or in the aggregate,
to have a Parent Material Adverse Effect, none of the key account managers of
Parent or any of the Parent Subsidiaries has advised Parent or such Parent
Subsidiary orally or in writing that he or she is terminating or considering
terminating his or her employment with Parent or such Parent Subsidiary.
SECTION 4.13. Taxes. Except for such matters that would not have, and
could not reasonably be expected to have, a Parent Material Adverse Effect, (i)
Parent and each of the Parent Subsidiaries have timely filed all returns and
reports required to be filed by them with any taxing authority with respect to
Taxes, all such returns and reports are complete and accurate and all Taxes
shown to be due on such returns have been timely paid, (ii) all Taxes (whether
or not shown on any Tax return) owed by Parent or any Parent Subsidiary and
required to have been paid have been timely paid or, in the case of Taxes which
Parent or a Parent Subsidiary is presently contesting in good faith, Parent or
such Parent Subsidiary has established an adequate reserve for such Taxes,
(iii) there are no pending proceedings by any taxing authority for the
assessment or collection of Taxes against the Parent or any of the Parent
Subsidiaries and (iv) Parent and each of the Parent Subsidiaries have provided
adequate reserves in their financial statements for any accrued Taxes (or Taxes
otherwise due) that have not been paid.
SECTION 4.14. Employee Benefits Plans; Labor Matters. (a) "Parent Benefit
Plan" shall mean each "employee benefit plan", as defined in Section 3(3) of
ERISA, whether or not subject to ERISA, and each employment, severance or
similar contract, plan, arrangement or compensation, bonuses, profit-sharing,
stock option or other stock related rights or other forms of incentive or
deferred compensation, vacation benefits, insurance (including any self-insured
arrangements), health or medical benefits, employee assistance program,
disability or sick leave benefits, workers' compensation, supplemental
unemployment benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life insurance
benefits) which is maintained, administered or contributed to by Parent or any
Parent Subsidiary and covers any employee or former employee of Parent or any
Parent Subsidiary, or with respect to which Parent or any Parent Subsidiary has
any liability.
(b) Except as could not reasonably be expected to have a Parent Material
Adverse Effect, (i) each Parent Benefit Plan is in compliance with all
applicable Laws (including, without limitation, ERISA and the Code) and has
been administered and operated in accordance with its terms; (ii) each Parent
Benefit Plan, which is intended to be "qualified" within the meaning of Section
401(a) of the Code has received a favorable determination letter from the IRS
and, no event has occurred, either by reason of any action or failure to act,
and no condition exists which would cause the loss of any such qualification;
(iii) the actuarial present value of the accumulated plan benefits (whether or
not vested) under each Parent Benefit Plan covered by Title IV of ERISA, or
which otherwise is a pension plan (as defined in Section 3(2) of ERISA) or
provides for actuarially-determined benefits as of the close of its most recent
plan year did not exceed the market value of the assets allocable thereto; (iv)
the PBGC has not instituted proceedings to terminate any Parent Benefit Plan,
and to Parent's knowledge, no condition exists that presents a risk that such
proceedings will be instituted or which would constitute grounds under Section
402 of ERISA for the termination of, or the appointment of a trustee to
administer any such Parent Benefit Plan; (v) no "accumulated funding
deficiency," as
27
defined in Section 412 of the Code, has been incurred with respect to any
Parent Benefit Plan subject to Section 412; (vi) no "reportable event" within
the meaning of Section 4043 of ERISA, and no event described in Section 4062 or
4063 of ERISA, has occurred in connection with any Parent Benefit Plan; and
(vii) no material liability, claim, action, litigation, audit, examination,
investigation or administrative proceeding has been made, commenced or, to the
knowledge of Parent, threatened with respect to any Parent Benefit Plan (other
than routine claims for benefits payable in the ordinary course);
(c) Except as could not reasonably be expected, individually or in the
aggregate, to have a Parent Material Adverse Effect, (i) each of Parent and
Parent Subsidiaries is, and at all times has been, in compliance with all
federal, state or other applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and has not
and is not engaged in any unfair labor practice; (ii) no unfair labor practice
complaint against Parent or any Parent Subsidiary is pending before the
National Labor Relations Board or its foreign equivalent; (iii) during the last
three years there has not been any labor strike, dispute, slowdown or stoppage
or, to Parent's knowledge, threatened against or involving Parent or any Parent
Subsidiary; (iv) there is no effort by or on behalf of any labor union to
organize any persons employed by Parent; and (v) no arbitration proceeding
arising out of or under any collective bargaining agreement is pending and no
claim therefore has been asserted.
SECTION 4.15. Vote Required. No vote of the stockholders of Parent is
required by Law, Parent's statuts or otherwise in order for Parent, Merger Sub
and Parent LLC to consummate the Merger and the transactions contemplated
hereby other than the affirmative vote of two-thirds (2/3) of the shares
present or represented at the Parent Shareholders' Meeting, provided that the
shares present or represented on the proposal represent at least one-third
(1/3) of the outstanding Parent Ordinary Shares on first notice and one-quarter
(1/4) of the outstanding Parent Ordinary Shares if the meeting is held on
second notice.
SECTION 4.16. Operations of Merger Sub and Parent LLC. Merger Sub is a
direct, wholly owned subsidiary of Parent, was formed solely for the purpose of
engaging in the transactions contemplated by this Agreement, has engaged in no
other business activities and has conducted no business operations. Parent LLC
is an indirect, wholly owned subsidiary of Parent, was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement, has
engaged in no other business activities and has conducted no business
operations.
SECTION 4.17. Reorganization Matters. To the knowledge of Parent, neither
Parent nor any of its affiliates has taken or agreed to take any action that
would prevent or impede the Merger from constituting a reorganization within
the meaning of Section 368(a) of the Code. Parent is not aware of any
agreement, plan or other circumstance that would prevent or impede the Merger
from constituting a reorganization within the meaning of Section 368(a) of the
Code.
SECTION 4.18. Brokers. No broker, finder or investment banker (other than
Lazard Freres & Co. LLC) is entitled to any brokerage, finder's or other fee or
commission in
28
connection with the Merger or the other transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Parent.
ARTICLE V
CONDUCT OF BUSINESSES PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the Merger. (a)
The Company agrees that, between the date of this Agreement and the Effective
Time, except as set forth in Section 5.01 of the Company Disclosure Schedule or
as contemplated by any other provision of this Agreement, unless Parent shall
otherwise consent in writing (such consent not to be unreasonably withheld or
delayed):
(i) the businesses of the Company and the Company Subsidiaries shall be
conducted only in, and the Company and the Company Subsidiaries shall not take
any action except in, the ordinary course of business and in a manner
consistent with past practice; and
(ii) the Company shall use its reasonable best efforts to preserve
substantially intact its business organization, to keep available the services
of the current officers, employees and consultants of the Company and the
Company Subsidiaries and to preserve the current relationships of the Company
and the Company Subsidiaries with customers, suppliers and other persons with
which the Company or any Company Subsidiary has significant business relations,
and shall not take any actions to terminate any employee or officer prior to
the Effective Time to cause severance payments to be due under the Company's
change in control agreements (the "Change in Control Agreements").
By way of amplification and not limitation (but subject to the above
exceptions), neither the Company nor any Company Subsidiary shall, between the
date of this Agreement and the Effective Time, directly or indirectly, do any
of the following without the prior written consent of Parent (such consent not
to be unreasonably withheld or delayed):
(b) amend or otherwise change its Amended and Restated Certificate of
Incorporation or By-Laws or equivalent organizational documents;
(c) issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of, any shares of its
capital stock of any class, or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of such capital stock, or any
other ownership interest (including, without limitation, any phantom interest),
of the Company or any Company Subsidiary (except (A) for the issuance of shares
of Company Common Stock pursuant to the Company Stock Options in accordance
with their terms, or (B) securities of Company Subsidiaries for internal
restructurings solely involving the Company and/or direct or indirect
wholly-owned Company Subsidiaries);
(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, other than dividends declared and paid in accordance with past
practice and dividends from a direct or indirect wholly-owned Company
Subsidiary to the Company or any other Company Subsidiary;
26
(e) reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock except pursuant to
(i) the 2000 Stock Purchase Agreements in the form filed with the Company SEC
Reports and (ii) the stock purchase agreements between the Company and holders
of Company Stock Options;
(f) (i) acquire (including, without limitation, by merger, consolidation,
or acquisition of stock or assets, but not including internal restructurings
solely involving the Company and/or direct or indirect wholly-owned Company
Subsidiaries) any interest in any corporation, partnership or other business
organization or any division thereof, or any assets, other than acquisitions of
assets in the ordinary course of business consistent with past practice and any
other acquisitions for consideration which is not, in the aggregate, in excess
of $50 million;
(ii) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person, or
make any loans or advances, except for (a) indebtedness incurred in the
ordinary course of business and consistent with past practice and other
indebtedness incurred under the Company's $350 million debt facility or
(B) any indebtedness solely involving the Company and/or direct or
indirect wholly-owned Company Subsidiaries;
(iii) enter into any contract or agreement material to the business,
results of operations or financial condition of the Company and the
Company Subsidiaries taken as a whole other than in the ordinary course of
business and consistent with past practice;
(iv) authorize any capital expenditure, other than capital
expenditures in the ordinary course of business and consistent with past
practice;
(v) sell, lease, license or otherwise dispose of any material assets,
except in the ordinary course of business and in a manner consistent with
past practice (except for internal restructurings solely involving the
Company and/or direct or indirect wholly-owned Company Subsidiaries); or
(vi) enter into or amend any contract, agreement, commitment or
arrangement that, if fully performed, would not be permitted under this
Section 5.01(f);
(g) except (i) in the ordinary course of business consistent with past
practice, (ii) as required by applicable law, or (iii) to the extent required
under existing plans, agreements or arrangements, increase the compensation
payable or to become payable or the benefits provided or to become provided to
current or former directors, officers, employees, or consultants of the Company
or any Company Subsidiary, or increase the compensation payable or benefits
provided under any Company Benefit Plan or collective bargaining agreement or
otherwise increase or accelerate the vesting or payment of the compensation
payable or the benefits provided or compensation or benefits to become payable
or provided to any current or former director, officer, employee or consultant
of the Company or any Company Subsidiary;
(h) except (i) in the ordinary course of business consistent with past
practice, (ii) as required by applicable law, or (iii) to the extent required
under existing plans, agreements
30
or arrangements, grant any severance or termination pay to, or enter into or
amend any employment, consulting or severance agreement with any director,
officer, employee or consultant of the Company or any Company Subsidiary or
establish, adopt, enter into or amend, any Company Benefit Plan;
(i) hire or retain the services of any director, officer, employee or
consultant other than in the ordinary course of business consistent with past
practice;
(j) take any action, other than reasonable and usual actions in the
ordinary course of business and consistent with past practice and any change
required by reason of a concurrent change in GAAP or Regulation S-X under the
Exchange Act, with respect to accounting policies or procedures;
(k) amend or modify, or release any obligations under, any of the 2000
Stock Purchase Agreements, except in the case of departing employees consistent
with past practice or as set forth in Schedule 5.01; or
(l) agree or commit to do any of the foregoing.
SECTION 5.02. Conduct of Business by Parent Pending the Merger. (a) Parent
agrees that, between the date of this Agreement and the Effective Time, except
as set forth in Section 5.02 of the Parent Disclosure Schedule or as
contemplated by any other provision of this Agreement, unless the Company shall
otherwise consent in writing (such consent not to be unreasonably withheld or
delayed):
(i) the business of Parent and the Parent Subsidiaries shall be
conducted only in, and Parent and the Parent Subsidiaries shall not take
any action except in the ordinary course of business and in a manner
consistent with past practice; and
(ii) Parent shall use its reasonable best efforts to preserve
substantially intact its business organization, to keep available the
services of the current officers, employees and consultants of Parent and
the Parent Subsidiaries and to preserve the current relationships of
Parent and the Parent Subsidiaries with customers, suppliers and other
persons with which Parent or any Parent Subsidiary has significant
business relations.
By way of amplification and not limitation (but subject to the above
exceptions), neither Parent nor any Parent Subsidiary shall, between the date
of this Agreement and the Effective Time, directly or indirectly, do any of the
following without the prior written consent of the Company (such consent not to
be unreasonably withheld):
(b) amend or otherwise change its statuts or Certificate of Incorporation
(Kbis), By-Laws or equivalent organizational documents;
(c) issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of, any shares of its
capital stock of any class, or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of such capital stock, or any
other ownership interest (including, without limitation, any phantom interest),
of Parent or any Parent Subsidiary (except for the issuance of (A) Parent
Ordinary
31
Shares pursuant to the Parent Stock Options outstanding on the date of this
Agreement and the issuance, in the ordinary course of business and consistent
with past practice, of Parent Stock Options to purchase a maximum of 500,000
Parent Ordinary Shares pursuant to the Parent Stock Option Plans in effect on
the date of this Agreement and Parent Ordinary Shares issuable pursuant to such
Parent Stock Options, in accordance with the terms of the Parent Stock Option
Plans, (B) Parent Ordinary Shares in the ordinary course of business and
consistent with past practice pursuant to the Parent's Employee Stock Purchase
Plan as in existence at the Effective Time, (C) Parent Ordinary Shares upon
conversion at the option of the holders of Parent OCEANES pursuant to their
terms, or (D) securities of Parent Subsidiaries for internal restructurings
solely involving Parent and/or direct or indirect wholly owned Parent
Subsidiaries);
(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, other than dividends declared and paid in accordance with past
practice and dividends from a direct or indirect wholly-owned Parent Subsidiary
to Parent or any Parent Subsidiary;
(e) reclassify, combine, split or subdivide any of its capital stock;
(f) take any action, other than reasonable and usual actions in the
ordinary course of business and consistent with past practice and any change
required by reason of a concurrent change in GAAP or Regulation S-X under the
Exchange Act, with respect to accounting policies or procedures;
(g) sell, lease, license or otherwise dispose of any material assets,
except in the ordinary course of business and in a manner consistent with past
practice (except for internal restructurings solely involving Parent and/or
direct or indirect wholly-owned Parent Subsidiaries);
(h) acquire (including, without limitation, by merger, consolidation, or
acquisition of stock or assets, but not including internal restructurings
solely involving Parent and/or direct or indirect wholly-owned Parent
Subsidiaries) any interest in any corporation, partnership or other business
organization or any division thereof, or any assets, other than acquisitions of
assets in the ordinary course of business consistent with past practice and any
other acquisitions for consideration which is not, in the aggregate, in excess
of $50 million;
(i) incur any indebtedness for borrowed money or issue any debt securities
or assume, guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any person, or make any loans or advances,
except for (A) indebtedness incurred in the ordinary course of business and
consistent with past practice and other indebtedness with a maturity of not
more than one year in a principal amount not, in the aggregate, in excess of
$100 million or (B) any indebtedness solely involving Parent and/or direct or
indirect wholly-owned Parent Subsidiaries; or
(j) agree or commit to do any of the foregoing.
SECTION 5.03. Notification of Certain Matters. Parent shall give prompt
notice to the Company, and the Company shall give prompt notice to Parent, of
(i) the occurrence, or
32
non-occurrence, of any event the occurrence, or non-occurrence, of which could
reasonably be expected to cause (x) any representation or warranty contained in
this Agreement to be untrue or inaccurate or (y) any covenant, condition or
agreement contained in this Agreement not to be complied with or satisfied and
(ii) any failure of Parent or the Company, as the case may be, to comply with
or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 5.03 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Registration Statement; Proxy Statements. (a) As promptly as
practicable after the execution of this Agreement, the Company shall prepare
and file with the SEC a Company proxy statement (together with any amendments
thereof or supplements thereto, the "Company Proxy Statement") relating to the
meetings of the Company's stockholders (the "Company Stockholders' Meeting") to
be held to consider approval of this Agreement and the transactions
contemplated hereby. Parent shall promptly furnish all information concerning
itself as the Company may reasonably request in connection with such actions
and the preparation of the Registration Statement and the Company Proxy
Statement. As promptly as practicable after the applicable requirements of the
SEC have been satisfied, the Company shall mail the Company Proxy Statement to
its stockholders. Parent and its counsel shall be given a reasonable
opportunity to review and comment on the Company Proxy Statement prior to its
being filed with the SEC.
(b) As promptly as practicable after the execution of this Agreement,
Parent and the Company will use reasonable best efforts to obtain a no-action
letter from the SEC to permit registration of the Parent OBSAs on a
registration statement on Form F-4 without compliance with the Trust Indenture
Act of 1939 (the "Trust Indenture Act"). If such no-action letter is granted,
Parent shall prepare and file with the SEC a registration statement on Form F-4
for the registration under the Securities Act of the Parent Ordinary Shares,
Parent OBSAs and Parent ORAs to be issued pursuant to the Merger. If such
no-action letter is not granted, then at the option of the Company either (i)
if permitted under applicable Law, the offer and sale of Parent Ordinary
Shares, Parent OBSAs and Parent ORAs will not be registered under the
Securities Act, but shall be made in a private placement in reliance upon the
exemption from registration provided by Regulation D promulgated thereunder or
(ii) Parent shall prepare and file a registration statement on Form F-4 for the
registration under the Securities Act of Parent Ordinary Shares, Parent OBSAs
and Parent ORAs, and the form and terms of the Parent OBSAs shall be modified
as necessary to comply with the Trust Indenture Act.
(c) In the event a registration statement on Form F-4 (together with all
amendments thereto, the "Registration Statement") is filed, (i) each of Parent
and the Company shall use its reasonable best efforts to cause the Registration
Statement to become effective as promptly as practicable, (ii) prior to the
effective date of the Registration Statement, Parent shall take all or any
action required under any applicable U.S. federal or state and non-U.S.
securities laws in connection with the issuance of Parent Ordinary Shares,
Parent ORAs and Parent OBSAs
33
pursuant to the Merger and (iii) the Company shall furnish all information
concerning itself as Parent may reasonably request in connection with such
actions and the preparation of the Registration Statement.
(d) In the event of a private placement, (i) Parent shall take all or any
action required under any applicable U.S. federal or state and non-U.S.
securities laws to permit the issuance of Parent Ordinary Shares, Parent ORAs
and Parent OBSAs pursuant to the Merger in accordance with such laws without
registration under the Securities Act and (ii) if at any time after the Closing
any former holder of Shares (other than any such holder who is an affiliate of
Parent at such time) proposes to resell, in a manner consistent with the terms
of Exhibit A, Parent Ordinary Shares, Parent ORAs or the warrant portion of the
Parent OBSAs outside the United States but, in the opinion of counsel to such
holder, cannot do so in reliance on Regulation S or any other exemption from
registration under the Securities Act, Parent shall register such securities
pursuant to the Securities Act to permit such person to resell such securities.
(e) As promptly as practicable after the execution of this Agreement, (i)
Parent shall prepare, file, publish, make available and/or mail to Parent
Shareholders, as applicable, the resolutions related to the Parent Proposals,
the rapport du directoire et du conseil de surveillance a l'assemblee, the
rapports des commissaires and the note d'operation (together with any
amendments thereof or supplements thereto, the "Parent Proxy Statement" and,
together with the Company Proxy Statement, the "Proxy Statements") relating to
the meeting of Parent's shareholders (the "Parent Shareholders' Meeting" and,
together with the Company Stockholders' Meeting, the "Shareholders' Meetings")
to be held to consider approval of the Parent Proposals (as defined in Section
6.02); and (ii) Parent shall prepare and file with the COB all filings required
by COB regulations (the "Other Parent Filings") in connection with the Parent
Shareholders' Meeting to be held to consider approval of the Parent Proposals.
The Company shall promptly furnish all information concerning the Company as
Parent may reasonably request in connection with such actions and the
preparation of the Parent Proxy Statement and the Other Parent Filings. The
Company and its counsel shall be given a reasonable opportunity to review and
comment on the Registration Statement, the Parent Proxy Statement and the Other
Parent Filings prior to them being filed with the applicable agency.
(f) The Company Proxy Statement shall include the recommendation of the
Board of Directors of the Company to the shareholders of the Company in favor
of approval of this Agreement; provided, however, that the Board of Directors
of the Company may, at any time prior to the Effective Time, withdraw, modify
or change any such recommendation to the extent that the Board of Directors of
the Company determines in good faith after consultation with independent legal
counsel that the failure to so withdraw, modify or change its recommendation
would cause the Board of Directors of the Company to breach its fiduciary
duties to the Company's shareholders under applicable Law.
(g) The Parent Proxy Statement shall include the recommendation of the
Supervisory Board and the Management Board of Parent to the shareholders of
Parent in favor of the Parent Proposals; provided, however, that the
Supervisory Board or the Management Board of Parent may, at any time prior to
the Effective Time, withdraw, modify or change any such recommendation to the
extent that the Supervisory Board or the Management Board of Parent determines
in good faith after consultation with independent legal counsel that the
failure to so
34
withdraw, modify or change its recommendation would cause the Supervisory Board
or the Management Board of Parent to breach its fiduciary duties to Parent's
shareholders under applicable Law.
(h) No amendment or supplement to the Company Proxy Statement or the
Registration Statement will be made by the Company or Parent without the
approval of the other party (such approval not to be unreasonably withheld or
delayed). Parent and the Company each will advise the other, promptly after
they receive notice thereof, of the time when the Registration Statement has
become effective or any supplement or amendment has been filed, of the issuance
of any stop order, of the suspension of the qualification of Parent Ordinary
Shares, Parent ORAs or Parent OBSAs issuable in connection with the Merger for
offering or sale in any jurisdiction, or of any request by the SEC for
amendment of the Registration Statement or the Company Proxy Statement or
comments thereon and responses thereto or requests by the SEC for additional
information.
(i) The information supplied by Parent for inclusion in the Registration
Statement and the Company Proxy Statement shall not, at (i) the time the
Registration Statement is declared effective, (ii) the time the Company Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed to
the stockholders of the Company, (iii) the time of the Company Stockholders'
Meeting and (iv) the Effective Time, contain any untrue statement of a material
fact or fail to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If, at any time prior
to the Effective Time, any event or circumstance relating to Parent or any
Parent Subsidiary, or their respective officers or directors, should be
discovered by Parent which should be set forth in an amendment or a supplement
to the Registration Statement or the Company Proxy Statement, Parent shall
promptly inform the Company. All documents that Parent is responsible for
filing with the SEC in connection with the Merger or the other transactions
contemplated by this Agreement will comply as to form and substance in all
material aspects with the applicable requirements of the Securities Act and the
rules and regulations thereunder and the Exchange Act and the rules and
regulations thereunder.
(j) The information supplied by the Company for inclusion in the
Registration Statement and the Company Proxy Statement shall not, at (i) the
time the Registration Statement is declared effective, (ii) the time the
Company Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to the stockholders of the Company, (iii) the time of the Company
Stockholders' Meeting, and (iv) the Effective Time, contain any untrue
statement of a material fact or fail to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. The
information supplied by the Company for inclusion in the Parent Proxy Statement
shall not, at (i) the time the Parent Proxy Statement (or any amendment thereof
or supplement thereto) is first mailed to the stockholders of Parent, and (ii)
the time of the Parent Stockholders' Meeting, and the information supplied by
the Company for inclusion in the Other Parent Filings at the time such Other
Parent Filings are filed with the COB shall not, contain any untrue statement
of a material fact or fail to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If, at any time prior
to the Effective Time, any event or circumstance relating to the Company or any
Company Subsidiary, or their respective officers or directors,
35
should be discovered by the Company which should be set forth in an amendment
or a supplement to the Registration Statement, the Proxy Statements or the
Other Parent Filings, the Company shall promptly inform Parent. All documents
that the Company is responsible for filing with the SEC in connection with the
Merger or the other transactions contemplated by this Agreement will comply as
to form and substance in all material respects with the applicable requirements
of the Securities Act and the rules and regulations thereunder and the Exchange
Act and the rules and regulations thereunder.
SECTION 6.02. Shareholders' Meetings. The Company shall call and hold the
Company Stockholders' Meeting as promptly as practicable for the purpose of
voting upon, and shall use its reasonable best efforts to solicit from its
stockholders proxies in favor of, the approval of this Agreement and the
transactions contemplated by this Agreement. Parent shall call and hold the
Parent Shareholders' Meeting, as promptly as practicable for the purpose of
voting upon, and shall use its reasonable best efforts to solicit from its
stockholders proxies in favor of, (i) the approval of this Agreement and the
transactions contemplated by this Agreement, (ii) the approval of the issuance
of Parent Ordinary Shares (or of obligations remboursables en actions
immediately redeemable into Parent Ordinary Shares), Parent ORAs and Parent
OBSAs pursuant to or in connection with the Merger, (iii) the increase of the
number of members of the Supervisory Board of Parent by two, who shall be
designees of Dentsu and (iv) the approval of the modification of the Parent
statuts to provide that the respective holders of the usufruct and nue
propriete interests in the Parent Ordinary Shares are free to allocate the
voting rights between themselves and shall notify Parent of the same
(collectively, the "Parent Proposals"). Parent and the Company shall take all
other action necessary or advisable to secure the vote or consent of
shareholders required by French law or the DGCL, as applicable, to obtain such
approvals, except to the extent that the Board of Directors of the Company or
the Management Board or the Supervisory Board of Parent, as the case may be,
determines in good faith after consultation with independent legal counsel that
doing so would cause the Board of Directors of the Company, or the Management
Board or the Supervisory Board of Parent, as the case may be, to breach its
fiduciary duties to such party's shareholders under applicable Law. The Company
shall call and hold the Company Stockholders' Meeting for the purpose of
considering approval of this Agreement and the transactions contemplated hereby
regardless of whether the exception in the immediately preceding sentence
applies or the proviso in Section 6.01(f) applies, and Parent shall call and
hold the Parent Shareholders' Meeting for the purpose of considering approval
of the matters set forth above regardless of whether the exception in the
immediately preceding sentence applies or the proviso in Section 6.01(g)
applies.
SECTION 6.03. Access to Information; Confidentiality. (a) Except as
required pursuant to any confidentiality agreement or similar agreement or
arrangement to which Parent or the Company or any of their respective
subsidiaries is a party or pursuant to applicable Law, from the date of this
Agreement to the Effective Time, Parent and the Company shall (and shall cause
their respective subsidiaries to): (i) provide to the other (and its officers,
directors, employees, accountants, consultants, legal counsel, agents and other
representatives, collectively, "Representatives") access at reasonable times
upon prior notice to the officers, employees, agents, properties, offices and
other facilities of the other and its subsidiaries and to the books and records
thereof and (ii) furnish promptly such information concerning the business,
properties, contracts, assets, liabilities, personnel and other aspects of the
other party and its subsidiaries as the other party or its Representatives may
reasonably request.
36
(b) Subject to Section 6.04(d), Parent and the Company shall comply with,
and shall cause their respective Representatives to comply with, all of their
respective obligations under the Confidentiality Agreements, dated February 22,
2002 (the "Confidentiality Agreements") between the Company and Parent.
SECTION 6.04. No Solicitation of Transactions. (a) Parent will not,
directly or indirectly, and Parent will instruct its officers, directors,
employees, subsidiaries, agents or advisors or other representatives
(including, without limitation, any investment banker, attorney or accountant
retained by it), not to, directly or indirectly, solicit, initiate or knowingly
encourage (including by way of furnishing nonpublic information), or knowingly
facilitate, any inquiries or the making of any proposal or offer (including,
without limitation, any proposal or offer to its stockholders) that
constitutes, or may reasonably be expected to lead to, any Competing
Transaction (as defined below) involving Parent, or engage in discussions or
negotiate with any person or entity with respect to a Competing Transaction
involving Parent, or authorize or permit any of the officers, directors or
employees of Parent or any Parent Subsidiary, or any investment banker,
financial advisor, attorney, accountant or other representative retained by
Parent or any Parent Subsidiary, to take any such action; provided, however,
that nothing contained in this Section 6.04 shall prohibit Parent from
furnishing information to, or entering into discussions or negotiations with,
any person in connection with an unsolicited (from the date of this Agreement)
proposal for a Competing Transaction involving Parent, if, and only to the
extent that, (i) the Supervisory Board or the Management Board of Parent, after
consultation with independent legal counsel, determines in good faith that such
action is required for the Supervisory Board or the Management Board of Parent
to comply with its fiduciary duties to its shareholders imposed by applicable
Law and (ii) prior to furnishing such information to, or entering into
discussions or negotiations with, such person, (x) Parent obtains from such
person an executed confidentiality agreement on terms no less favorable to
Parent than those contained in the Confidentiality Agreement and (y) Parent
notifies the Company immediately of inquiries, proposals or offers received,
any information requested, or discussions or negotiations sought to be
initiated or continued, indicating, in connection with such notice, the name of
such person and the terms and conditions of any proposals or offers. Parent
shall notify the Company promptly if any proposal or offer, or any inquiry or
contact with any person with respect thereto regarding a Competing Transaction
involving Parent is made. Parent shall cease and cause to be terminated all
existing discussions or negotiations with any parties conducted heretofore with
respect to a Competing Transaction involving Parent. Parent agrees not to
release any third party from, or waive any provision of, any confidentiality or
standstill agreement to which it is a party.
(b) The Company will not, directly or indirectly, and the Company will
instruct its officers, directors, employees, subsidiaries, agents or advisors
or other representatives (including, without limitation, any investment banker,
attorney or accountant retained by it), not to, directly or indirectly,
solicit, initiate or knowingly encourage (including by way of furnishing
nonpublic information), or knowingly facilitate, any inquiries or the making of
any proposal or offer (including, without limitation, any proposal or offer to
its stockholders) that constitutes, or may reasonably be expected to lead to,
any Competing Transaction (as defined below) involving the Company, or engage
in discussions or negotiate with any person or entity with respect to a
Competing Transaction involving the Company, or authorize or permit any of the
officers, directors or employees of the Company or any Company Subsidiary, or
any investment banker, financial advisor, attorney, accountant or other
representative retained by the Company or any
37
Company Subsidiary, to take any such action; provided, however, that nothing
contained in this Section 6.04 shall prohibit the Company from furnishing
information to, or entering into discussions or negotiations with, any person
in connection with an unsolicited (from the date of this Agreement) proposal
for a Competing Transaction involving the Company, if, and only to the extent
that, (i) the Board of Directors of the Company, after consultation with
independent legal counsel, determines in good faith that such action is
required for the Board of Directors of the Company to comply with its fiduciary
duties to its shareholders imposed by applicable Law and (ii) prior to
furnishing such information to, or entering into discussions or negotiations
with, such person, (x) the Company obtains from such person an executed
confidentiality agreement on terms no less favorable to the Company than those
contained in the Confidentiality Agreement and (y) the Company notifies Parent
immediately of inquiries, proposals or offers received, any information
requested, or discussions or negotiations sought to be initiated or continued,
indicating, in connection with such notice, the name of such person and the
terms and conditions of any proposals or offers. The Company shall notify
Parent promptly if any proposal or offer, or any inquiry or contact with any
person with respect thereto, regarding a Competing Transaction involving the
Company is made. The Company shall cease and cause to be terminated all
existing discussions or negotiations with any parties conducted heretofore with
respect to a Competing Transaction involving the Company. The Company agrees
not to release any third party from, or waive any provision of, any
confidentiality or standstill agreement to which it is a party, other than such
releases or waivers of obligations of Dentsu to the Company which the Company
deems reasonably necessary to consummate the Merger and the transactions
contemplated by this Agreement. Nothing contained in this Agreement shall
prevent the Board of Directors of the Company from complying with Rule 14d-9 or
14e-2 under the Exchange Act with respect to any Competing Transaction.
(c) A "Competing Transaction" means any of the following involving Parent
or the Company, as the case may be (other than the Merger and the other
transactions contemplated by this Agreement): (i) a merger, consolidation,
share exchange, business combination or other similar transaction; (ii) any
sale, lease, exchange, transfer or other disposition of 25% or more of the
assets of such party and its subsidiaries, taken as a whole, (iii) the
acquisition of capital stock of such party by a person as a result of which
such person would become the beneficial owner of 25% or more of the shares of
capital stock of such party; or (iv) a tender offer or exchange offer by a
person as a result of which such person would become the beneficial owner of
25% or more of the outstanding voting securities of such party. For purposes of
this Section 6.04, the term "beneficial owner" shall have the meaning ascribed
to it in Rule 13d-3 promulgated under the Exchange Act.
(d) This Section 6.04 supersedes Section 10 of each of the Confidentiality
Agreements, which Section 10 shall have no further force or effect as of the
date hereof.
SECTION 6.05. Directors' and Officers' Indemnification and Insurance. (a)
The By-Laws of the Surviving Corporation shall contain provisions regarding
directors' and officers' indemnification and insurance reasonably satisfactory
to the Company which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner that
would affect adversely the rights thereunder of individuals who at or at any
time prior to the Effective Time were directors, officers, employees,
fiduciaries or agents of the Company.
38
(b) Prior to the Effective Time, the Company shall, to the fullest extent
permitted under applicable Law and regardless of whether the Merger becomes
effective, indemnify and hold harmless, and, after the Effective Time, Parent
and the Surviving Corporation shall, to the fullest extent permitted under
applicable Law, indemnify and hold harmless, each present and former director
or officer of the Company and each Company Subsidiary and each such person who
served at the request of the Company or any Company Subsidiary as a director,
officer, trustee, partner, fiduciary, employee or agent of another corporation,
partnership, joint venture, trust, pension or other employee benefit plan or
enterprise (collectively, the "Indemnified Parties") against all costs and
expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages, liabilities and settlement amounts paid in connection with any
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), whether civil, administrative or investigative,
arising out of or pertaining to any action or omission in their capacities as
officers or directors, in each case occurring before the Effective Time
(including the transactions contemplated by this Agreement). Without limiting
the foregoing, in the event of any such claim, action, suit, proceeding or
investigation, (i) the Company or Parent and the Surviving Corporation, as the
case may be, shall pay the fees and expenses of counsel selected by any
Indemnified Party, which counsel shall be reasonably satisfactory to the
Company or to Parent and the Surviving Corporation, as the case may be,
promptly after statements therefor are received (unless the Surviving
Corporation shall elect to defend such action) and (ii) the Company and Parent
and the Surviving Corporation shall cooperate in the defense of any such
matter, provided, however, that none of the Company, Parent or the Surviving
Corporation shall be liable for any settlement effected without its written
consent (which consent shall not be unreasonably withheld or delayed).
(c) For a period of six years after the Effective Time, Parent shall cause
to be maintained in effect the current directors' and officers' liability
insurance policies maintained by the Company (provided that Parent may
substitute therefor policies reasonably satisfactory to the Indemnified Parties
of at least the same coverage containing terms and conditions which are no less
advantageous) with respect to claims arising from facts or events that occurred
prior to the Effective Time; provided, however, that in no event shall Parent
be required to expend pursuant to this Section 6.05(c) more than an amount per
year equal to 250% of current annual premiums paid by the Company for such
insurance (which premiums the Company represents and warrants to be
approximately $440,000 per year in the aggregate), and if the annual premium
for such insurance at any time during such period shall exceed 250% of such
rate, Parent shall provide such coverage as shall then be available at an
annual premium equal to 250% of such rate.
(d) This Section 6.05 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. In the event Parent, the Company or the
Surviving Corporation or any of their respective successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity in such consolidation or merger
or (ii) transfers all or substantially all its properties and assets to any
person, then, and in each case, proper provision shall be made so that the
successors and assigns of Parent, the Company or the Surviving Corporation, as
the case may be, honor the indemnification obligations set forth in this
Section 6.05. The rights of each of the Indemnified Parties under this Section
6.05 shall be in addition to
39
any rights such person may have under the Certificate of Incorporation or
By-Laws of the Company or any of its Subsidiaries, or under Delaware Law or any
other applicable laws or under any agreement of any Indemnified Party with the
Company or any of its Subsidiaries.
SECTION 6.06. Obligations of Merger Sub and Parent LLC. Parent shall take
all action necessary to cause Merger Sub and Parent LLC to perform their
obligations under this Agreement and to consummate the Merger on the terms and
subject to the conditions set forth in this Agreement.
SECTION 6.07. Company Affiliates. No later than 30 days after the date of
this Agreement, the Company shall deliver to Parent a list of names and
addresses of those persons who were, in the Company's reasonable judgment, on
such date, affiliates (within the meaning of Rule 145 of the rules and
regulations promulgated under the Securities Act) of the Company. The Company
shall provide Parent with such information and documents as Parent shall
reasonably request for purposes of reviewing such list. The Company shall use
its reasonable best efforts to deliver or cause to be delivered to Parent,
prior to the Effective Time, an affiliate letter in the form customarily
obtained from such affiliates for purposes of Rule 145, executed by each of the
affiliates of the Company identified in the foregoing list and any person who
shall, to the knowledge of the Company, have become an affiliate of the Company
subsequent to the delivery of such list.
SECTION 6.08. Further Action; Consents; Filings. (a) Upon the terms and
subject to the conditions hereof, each of the parties hereto shall use its
reasonable best efforts to (i) take, or cause to be taken, all appropriate
action and do, or cause to be done, all things necessary, proper or advisable
under applicable law or otherwise to consummate and make effective the Merger
and the other transactions contemplated by this Agreement, (ii) obtain from
Governmental Entities any consents, licenses, permits, waivers, approvals,
authorizations, rulings or orders required to be obtained or made by Parent or
the Company or any of their subsidiaries in connection with the authorization,
execution and delivery of this Agreement and the consummation of the Merger and
the other transactions contemplated by this Agreement (in the case of any such
application for a ruling from the Internal Revenue Service, such application
shall be made jointly by Parent and the Company) and (iii) make all necessary
filings, and thereafter make any other submissions requested by any
Governmental Entities in connection with such filings, with respect to this
Agreement, the Merger and the other transactions contemplated by this Agreement
required under (A) the Exchange Act and the Securities Act and the rules and
regulations thereunder and any other applicable federal or state securities
laws, (B) the HSR Act and (C) any other applicable Law; provided, however, that
Parent shall not be obligated to agree to material restrictions on the conduct
of its business following the Effective Time or to divest any of its material
assets or material assets of any of its affiliates, or the Company or any of
its affiliates. The parties hereto shall cooperate with each other in
connection with the making of all such filings, including by providing copies
of all such documents to the nonfiling party and its advisors prior to filing
and, if requested, by accepting all reasonable additions, deletions or changes
suggested in connection therewith. The parties may, as each deems advisable and
necessary, reasonably designate any competitively sensitive material provided
to the other under this Section as "outside counsel only." Such materials and
the information contained therein shall be given only to the outside legal
counsel of the
40
recipient and will not be disclosed by such outside counsel to employees,
officers, or directors of the recipient unless express permission is obtained
in advance from the source of the materials or its legal counsel.
(b) Parent and the Company shall file as soon as practicable after the
date of this Agreement notifications under the HSR Act and shall respond as
promptly as practicable to all inquiries or requests received from the Federal
Trade Commission (the "FTC") or the Antitrust Division of the Department of
Justice --- for additional information or documentation and shall respond as
promptly as practicable to all inquiries and requests received from any State
Attorney General or other Governmental Entity in connection with antitrust
matters. Parent and the Company shall file as promptly as practicable following
the execution of this Agreement, a notification with the EC under Regulation
4064/89 and any notifications or other filings required in other non-U.S.
jurisdictions under antitrust or merger control Laws, rules or regulations.
Parent and the Company shall respond as promptly as practicable to all
inquiries and requests received from the FTC and the EC. The parties shall
cooperate with each other in connection with the making of all such filings or
responses, including providing copies of all such documents to the other party
and its advisors prior to filing or responding.
SECTION 6.09. Plan of Reorganization; Tax Treatment. (a) This Agreement is
intended to constitute a "plan of reorganization" within the meaning of
Treasury Regulation Section 1.368-2(g). Each party hereto shall use its
reasonable best efforts to cause the Merger to qualify as a reorganization
within the meaning of Section 368(a) of the Code. Each party hereto shall use
its reasonable best efforts to cause the delivery of the opinions referred to
in Sections 7.02(d) and 7.03(c) and the delivery of representations
substantially in the forms set forth in Exhibits E and F hereto.
(b) The parties agree to report the Parent ORAs as stock for U.S. federal
income tax purposes unless otherwise required by a "determination" within the
meaning of Section 1313(a) of the Code or by law, provided that the holders
thereof report the Parent ORAs as stock for such purposes.
(c) For United States federal income tax purposes, the parties agree to
report the Parent OBSAs as two separate instruments with the debt component
treated as indebtedness and the warrant component treated as a zero principal
amount security, unless otherwise required by a determination within the
meaning of Section 1313(a) of the Code or by law, provided that the holders
thereof so treat the Parent OBSAs for United States federal income tax
purposes.
SECTION 6.10. Public Announcements. The initial press release relating to
this Agreement shall be a joint press release the text of which has been agreed
to by each of Parent and the Company. Thereafter, unless otherwise required by
applicable Law or the requirements of the NYSE or Euronext, Parent and the
Company shall each use their reasonable best efforts to consult with each other
before issuing any press release or otherwise making any public statements with
respect to this Agreement, the Merger or any of the other transactions
contemplated by this Agreement.
SECTION 6.11. Euronext Listing. (a) Parent shall prepare and submit to
Euronext a listing application covering the Parent Ordinary Shares, Parent ORAs
and Parent warrants to be issued pursuant to the Merger and shall use its
reasonable best efforts to obtain
41
admission to trading of such Parent Ordinary Shares, Parent ORAs and Parent
warrants at Euronext within five business days from the Closing Date, including
without limitation the payment of costs, fees and commissions required to
obtain and maintain such admission to trading.
(b) Parent shall prepare and submit to Euronext a listing application
covering the Parent Ordinary Shares issuable upon redemption of the Parent ORAs
and shall use its reasonable best efforts to obtain admission to trading of
such Parent Ordinary Shares at Euronext at the time such shares are issued upon
redemption of the Parent ORAs.
(c) Parent shall prepare and submit to Euronext a listing application
covering the Parent Ordinary Shares issuable upon exercise of the Parent
warrants to be issued pursuant to the Merger, and shall use its reasonable best
efforts to obtain admission to trading of such Parent Ordinary Shares at
Euronext at the time such Parent warrants become exercisable.
SECTION 6.12. Parent Governance. Parent shall take all necessary action to
cause the number of members of the Supervisory Board to be increased by two as
of the Effective Time, and to cause two designees of Dentsu to be appointed to
the Supervisory Board. Parent shall take all necessary action to cause as of
the Effective Time the number of members of Parent's Management Board to be
increased to five and Xxxxx X. Xxxxx to be appointed to the Management Board
and as the President and Chief Operating Officer of Parent.
SECTION 6.13. Nominee Agreement. The Company and Parent shall use its
reasonable best efforts to execute and deliver a nominee agreement on terms
satisfactory to Parent and the Company.
SECTION 6.14. Issuance of Securities to Parent LLC. At or immediately
prior to the Effective Time, Parent shall issue to Parent LLC the Parent
Ordinary Shares, the Parent ORAs and the Parent OBSAs, in each case to which
the holders of Company Common Stock shall become entitled pursuant to the
Merger.
SECTION 6.15. Employee Benefits Matters. (a) From and after the Effective
Time until at least the first anniversary of the Effective Time, Parent shall
or shall cause the Surviving Corporation to either maintain the Company's
compensation levels and Company Benefit Plans (other than equity or
equity-based compensation or benefits) or provide compensation and employee
benefits under employee benefit plans to the employees and former employees of
the Company and the Company Subsidiaries that are in the aggregate no less
favorable than those provided to such persons pursuant to the Company Benefit
Plans as in effect immediately prior to the Effective Time (other than equity
or equity-based compensation or benefits). Parent and the Surviving Corporation
shall recognize (or cause to be recognized) service with the Company and the
Company Subsidiaries and any predecessor entities for purposes of vesting,
eligibility and level of benefits (but not benefit accrual under (i) plans for
which similarly situated employees of Parent and any Parent Subsidiary did not
receive credit for prior service upon establishment of the plan and (ii) any
defined benefit pension plans) under any plan or arrangement maintained by
Parent, the Surviving Corporation or any Parent Subsidiary or affiliate of
Parent; provided, however, that solely to the extent necessary to avoid
duplication of benefits, amounts payable under employee benefit plans provided
by Parent, the Surviving
42
Corporation or a Parent Subsidiary may be reduced by amounts payable under
similar Parent Benefit Plans with respect to the same periods of service.
(b) The cost of the Company's Annual Incentive Plan (the "Incentive Plan")
has been included in the Company's 2002 budget, which has been provided to
Parent prior to the date hereof. From and after the Effective Time until
December 31, 2002, Parent shall or shall cause the Surviving Corporation to
maintain the Incentive Plan in accordance with its terms and conditions for all
eligible employees who participate in the Incentive Plan immediately prior to
the Effective Time and any newly hired employees who will be performing in
positions in which competitive market data supports bonus participation. Such
employees shall be paid the entire amount of his or her cash bonus no later
than March 15, 2003.
(c) Following the Effective Time, Parent and the Surviving Corporation
shall use reasonable efforts to cooperate to adopt or maintain stock option
plans compliant with applicable requirements of French law, for the benefit of
selected Company employees who are key employees and who continue employment
with Parent or one of its Subsidiaries. Prior to the Effective Time, Parent and
the Company shall use reasonable best efforts to determine the number of Parent
Ordinary Shares underlying options that will be granted under such plans for
the benefit of such selected Company employees.
(d) Parent and the Company hereby agree that the transactions contemplated
by this Agreement shall not constitute a "Hostile Change in Control" under the
Change in Control Agreements.
(e) The Company shall use its reasonable best efforts to submit the Change
in Control Agreements and Xxxxx X. Xxxxx'x employment agreement, as set forth
in Section 3.09(a) of the Company Disclosure Schedule, to the eligible Voting
Trustees for shareholder approval in accordance with the shareholder approval
requirements of Section 280G(b)(5)(B) of the Code. In addition, the Company
shall use its reasonable best efforts to submit the Cash Payments, to the
extent such payments constitute "excess parachute payments" (as defined in
Section 280G(b)(1) of the Code), to the eligible Voting Trustees for
shareholder approval in accordance with the shareholder approval requirements
of Section 280G(b)(5)(B) of the Code.
SECTION 6.16. Appointment of Custodian. From and after the Effective Time,
Parent shall appoint and maintain at its expense a custodian to assist former
stockholders of the Company with matters relating to the ownership of Parent
Ordinary Shares received in the Merger. Such custodian shall provide services
similar to those provided by a depositary of American Depositary Receipts,
including with respect to distribution of voting materials, currency conversion
of dividends and receipt of avoir fiscal. It is agreed and understood that the
custodian shall not have legal, beneficial, equitable or other ownership of the
Parent Ordinary Shares.
SECTION 6.17. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Merger Sub,
any deeds, bills of sale, assignments or assurances and to take and do, in the
name and on behalf of the Company or Merger Sub, any other actions and things
to vest, perfect or confirm of record or otherwise in the Surviving Corporation
any
43
and all right, title and interest in, to and under any of the rights,
properties or assets of the Company acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger.
SECTION 6.18. Adjustments. If, after the date hereof and prior to the
earlier of the termination of this Agreement in accordance with its terms or
the Effective Time, Parent and the Company determine in their reasonable
judgment that consummation of the Merger on the terms contemplated by this
Agreement would not permit delivery of the opinions contemplated by Sections
7.02(c) or 7.03(c), Parent and the Company agree to negotiate in good faith
adjustments to this Agreement to address such matters in a manner that would
substantially preserve the economic benefits of this transaction for Parent and
the shareholders of the Company.
SECTION 6.19. Reporting Requirements. From and after the Closing, Parent
shall use reasonable best efforts to cause the Surviving Corporation to satisfy
the reporting requirements set forth in Treas. Reg. ss.1.367(a)-3(c)(6).
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party. The obligations
of the Company, Parent and Merger Sub to consummate the Merger are subject to
the satisfaction or waiver (where permissible) of the following conditions:
(a) either (i) if filed, the Registration Statement shall have been
declared effective by the SEC under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued by the SEC and no proceeding for that purpose shall have been initiated
by the SEC, or (ii) the offer and sale of the Merger Consideration under this
Agreement shall have been validly made pursuant to an exemption from Section 5
of the Securities Act;
(b) this Agreement shall have been approved and adopted by the
stockholders of the Company in accordance with the DGCL and the Voting Trust
Agreement;
(c) the Parent Proposals shall have been approved and adopted by the
requisite affirmative vote of the shareholders of Parent in accordance with
applicable French Laws and regulations, COB rules and regulations and Parent's
statuts;
(d) no Governmental Entity or court of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any law, rule, regulation,
judgment, decree, executive order or award (an "Order") which is then in effect
and has the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger;
(e) all consents, approvals and authorizations legally required to be
obtained to consummate the Merger shall have been obtained from and made with
all Governmental Entities, except for such consents, approvals and
authorizations the failure of which to obtain
44
could not have or could not reasonably be expected to have a Parent Material
Adverse Effect (assuming for purposes of this paragraph (e) that the Merger
shall have been effected);
(f) any waiting period (and any extension thereof) applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated, and, if applicable, confirmation shall have been received, by way
of a decision from the Commission of the European Union under Regulation
4064/89 (with or without the initiation of proceedings under Article 6(1)(c)
thereof), that the Merger is compatible with the common market (it being
understood for the avoidance of doubt that this condition does not depend on
receipt of any required approval for agreements or arrangements between Parent
and Dentsu);
(g) the respective parties thereto shall have executed and delivered the
Nominee Agreement; and
(h) the Bcom3 Merger shall have been completed on substantially the terms
set forth in the Bcom3 Merger Agreement.
SECTION 7.02. Conditions to the Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to consummate the Merger are subject to
the satisfaction or waiver (where permissible) of the following additional
conditions:
(a) the representations and warranties of the Company contained in this
Agreement shall be true and correct as of the Effective Time as though made on
and as of the Effective Time (except to the extent expressly made as of an
earlier date, in which case as of such date), except where the failure to be so
true and correct (without giving effect to any qualification as to
"materiality" or "Company Material Adverse Effect" set forth therein) would not
have or could not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, and Parent shall have received a
certificate of the Chief Executive Officer or Chief Financial Officer of the
Company to such effect;
(b) the Company shall have performed or complied with all agreements and
covenants required by this Agreement to be performed or complied with by it on
or prior to the Effective Time, except where the failure to so comply would not
have or could not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, and Parent shall have received a
certificate of the Chief Executive Officer or Chief Financial Officer of the
Company to that effect;
(c) Parent shall have received the opinion of Wachtell, Lipton, Xxxxx &
Xxxx, counsel to Parent, dated as of the Closing Date, based upon facts,
representations and assumptions set forth in or referred to in such opinion, to
the effect that for U.S. federal income tax purposes, the Merger will qualify
as a reorganization within the meaning of Section 368(a) of the Code. In
rendering such opinion, Wachtell, Lipton, Xxxxx & Xxxx may require and shall be
entitled to rely upon representations, rulings and opinions of Parent, the
Company or others, including representations substantially in the form of
Exhibits E and F, respectively;
(d) The holders of not more than 5% of the outstanding Company Common
Stock shall have demanded appraisal of their Shares in accordance with the
DGCL; and
45
(e) Parent and the Company shall have received the opinion of Xxxxxxxx &
Xxxxx, counsel to the Company, dated as of the date hereof and as of the
Closing Date, reasonably satisfactory in form and substance to Parent and the
Company, to the effect that, for United States federal income tax purposes: (i)
the limitations on each transferee's ownership rights set forth in the 2000
Stock Purchase Agreements between the Company and the holders of Class A Common
Stock (the "2000 Stock Purchase Agreements") constitute "nonlapse restrictions"
within the meaning of Treasury Regulation Section 1.83-3(h), (ii) each person
who has entered into a 2000 Stock Purchase Agreement with the Company owns the
Class A Common Stock covered by such person's 2000 Stock Purchase Agreement
(and owned such stock as of the date of this Agreement), and (iii) such stock
was "transferred" to such person prior to the date of this Agreement and such
stock is "substantially vested" and not subject to a "substantial risk of
forfeiture" in the hands of such person (and became so prior to the date of
this Agreement), in each case, within the meaning of Code Section 83 and the
Treasury Regulations thereunder.
SECTION 7.03. Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Merger are subject to the
satisfaction or waiver (where permissible) of the following additional
conditions:
(a) each of the representations and warranties of Parent and Merger Sub
contained in this Agreement shall be true and correct as of the Effective Time
as though made on and as of the Effective Time (except to the extent expressly
made as of an earlier date, in which case as of such date), except where
failure to be so true and correct (without giving effect to any qualification
as to "materiality" or "Parent Material Adverse Effect" set forth therein)
would not have or could not reasonably be expected to have, individually or in
the aggregate, a Parent Material Adverse Effect and the Company shall have
received a certificate of the Chief Executive Officer or Chief Financial
Officer of Parent to such effect;
(b) Parent and Merger Sub shall have performed or complied with all
agreements and covenants required by this Agreement to be performed or complied
with by it on or prior to the Effective Time, except where the failure to so
comply would not have or could not reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect, and the Company shall
have received a certificate of the Chief Executive Officer or Chief Financial
Officer of Parent to that effect; and
(c) the Company shall have received the opinion of Xxxxxxxx & Xxxxx,
special tax counsel to the Company, dated as of the Closing Date, based upon
facts, representations and assumptions set forth in or referred to in such
opinion, to the effect that for U.S. federal income tax purposes, (i) the
Merger will qualify as a reorganization within the meaning of Section 368(a) of
the Code and (ii) each transfer of property to Parent by a stockholder of the
Company pursuant to the Merger will not be subject to Section 367(a)(1) of the
Code. In rendering such opinion, Xxxxxxxx & Xxxxx may require and shall be
entitled to rely upon representations, rulings and opinions of Parent, the
Company or others including representations substantially in the form of
Exhibits E and F, respectively. The opinion set forth in clause (ii) above may
assume that any stockholder who is a "five-percent transferee shareholder"
within the meaning of Treasury Regulation Section 1.367(a)-3(c)(5)(ii) will
file the agreement described in Treasury Regulation Section
1.367(a)-3(c)(1)(iii)(B).
46
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated and the Merger
and the other transactions contemplated by this Agreement may be abandoned at
any time prior to the Effective Time, notwithstanding any requisite approval
and adoption of this Agreement and the transactions contemplated by this
Agreement, as follows:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if the Effective Time shall not have
occurred on or before September 7, 2002 (the "Outside Date"); provided,
however, that if (x) the Effective Time has not occurred by such date by reason
of non-satisfaction of any of the conditions set forth in Sections 7.01(d),
7.01(e) or 7.01(f) and (y) all other conditions in Article VII have theretofore
been satisfied or (to the extent legally permissible) waived or are then
capable of being satisfied, the Outside Date shall be December 7, 2002; and
provided further, that the right to terminate this Agreement under this Section
8.01(b) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before the applicable Outside
Date;
(c) there shall be any Order which is final and nonappealable preventing
the consummation of the Merger;
(d) by the Company if (i) the Supervisory Board or the Management Board of
Parent withdraws, modifies or changes its recommendation of this Agreement or
the transactions contemplated hereby in a manner adverse to the Company or
shall have resolved to do so; (ii) the Supervisory Board or the Management
Board of Parent shall have recommended to the shareholders of Parent a
Competing Transaction or shall have resolved to do so; and (iii) a tender offer
or exchange offer for 50% or more of the outstanding shares of capital stock of
Parent is commenced, and the Management Board or the Supervisory Board of
Parent fails to recommend against acceptance of such tender offer or exchange
offer by its shareholders (including by taking no position with respect to the
acceptance of such tender offer or exchange offer by its shareholders);
(e) by Parent if (i) the Board of Directors of the Company withdraws,
modifies or changes its recommendation of this Agreement or the transactions
contemplated hereby in a manner adverse to Parent or shall have resolved to do
so, (ii) the Board of Directors of the Company shall have recommended to the
shareholders of the Company a Competing Transaction or shall have resolved to
do so or (iii) a tender offer or exchange offer for 50% or more of the
outstanding shares of capital stock of the Company is commenced, and the Board
of Directors of the Company fails to recommend against acceptance of such
tender offer or exchange offer by its shareholders (including by taking no
position with respect to the acceptance of such tender offer or exchange offer
by its shareholders);
(f) by either Parent or the Company if this Agreement shall fail to
receive the requisite vote for approval at the Company Stockholders' Meeting;
47
(g) by either Parent or the Company if the resolutions set forth in the
Parent Proxy Statement related to the approval of the Parent Proposals shall
fail to receive the requisite vote at the Parent Shareholders' Meeting;
(h) by Parent upon a breach of any material representation, warranty,
covenant or agreement on the part of the Company set forth in this Agreement,
or if any representation or warranty of the Company shall have become untrue,
in either case such that the conditions set forth in Section 7.02(a) and
Section 7.02(b) would not be satisfied ("Terminating Company Breach");
provided, however, that, if such Terminating Company Breach is curable by the
Company through the exercise of its best efforts and for so long as the Company
continues to exercise such best efforts, Parent may not terminate this
Agreement under this Section 8.01(h); or
(i) by the Company upon a breach of any material representation, warranty,
covenant or agreement on the part of Parent and Merger Sub set forth in this
Agreement, or if any representation or warranty of Parent and Merger Sub shall
have become untrue, in either case such that the conditions set forth in
Section 7.03(a) and Section 7.03(b) would not be satisfied ("Terminating Parent
Breach"); provided, however, that, if such Terminating Parent Breach is curable
by Parent and Merger Sub through the exercise of their respective best efforts
and for so long as Parent and Merger Sub continue to exercise such best
efforts, the Company may not terminate this Agreement under this Section
8.01(i).
SECTION 8.02. Effect of Termination. Except as provided in Section 9.01,
in the event of termination of this Agreement pursuant to Section 8.01, this
Agreement shall forthwith become void, there shall be no liability under this
Agreement on the part of Parent, Merger Sub or the Company or any of their
respective officers or directors, and all rights and obligations of each party
hereto shall cease, subject to the remedies of the parties set forth in
Sections 8.05(b) and (c), provided, however, that 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.
SECTION 8.03. Amendment. This Agreement may be amended by the parties
hereto prior to the Effective Time; provided, however, that, after the approval
of this Agreement by the shareholders of the Company, no amendment shall be
made which by Law requires further approval by such shareholders without such
further approval. This Agreement may not be amended except by an instrument in
writing signed by the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any obligation or other
act of any other party hereto, (b) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant hereto,
and (c) waive compliance with any agreement or condition contained herein. Any
such extension or waiver shall be valid if set forth in an instrument in
writing signed by the party or parties to be bound thereby. No failure or delay
by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by Law.
48
SECTION 8.05. Expenses. (a) Except as set forth in this Section 8.05, all
Expenses (as defined below) incurred in connection with this Agreement and the
transactions contemplated by this Agreement shall be paid by the party
incurring such Expenses, whether or not the Merger or any other transaction is
consummated, except that the Company and Parent each shall pay one-half of all
Expenses relating to printing, filing and mailing the Registration Statement
(if required) and the Proxy Statements and all SEC, COB and other regulatory
filing fees incurred in connection with the Registration Statement and the
Proxy Statements. "Expenses" as used in this Agreement shall include all
reasonable out-of-pocket expenses (including, without limitation, all fees and
expenses of counsel, accountants, investment bankers, experts and consultants
to a party hereto and its affiliates) incurred by a party or on its behalf in
connection with or related to the authorization, preparation, negotiation,
execution and performance of this Agreement, the preparation, printing, filing
and mailing of the Registration Statement (if required) and the Proxy
Statements, the solicitation of shareholder approvals, the filing of any
required notices under the HSR Act, European Regulation 4064/89 or other
similar regulations and all other matters related to the closing of the Merger
and the other transactions contemplated by this Agreement.
(b) The Company agrees that, if: (A) Parent shall terminate this Agreement
pursuant to Section 8.01(e); (B)(i) Parent or the Company shall terminate this
Agreement pursuant to Section 8.01(f) due to the failure of the Company's
shareholders to approve this Agreement, and (ii) prior to the time of such
failure to so approve this Agreement there shall have been made a proposal for
a Competing Transaction with respect to the Company, and (iii) within twelve
(12) months following the termination of this Agreement the Company executes a
definitive agreement providing for, or consummates, a Competing Transaction; or
(C)(i) Parent or the Company shall terminate this Agreement pursuant to Section
8.01(b) because the Effective Time has not occurred on or before the applicable
Outside Date, (ii) on or before the applicable Outside Date there shall have
been made a proposal for a Competing Transaction with respect to the Company,
and (iii) within twelve (12) months following the termination of this Agreement
the Company executes a definitive agreement providing for, or consummates, a
Competing Transaction, then the Company shall pay to Parent an amount equal to
$90 million.
(c) Parent agrees that, if: (A) the Company shall terminate this Agreement
pursuant to Section 8.01(d); (B)(i) Parent or the Company shall terminate this
Agreement pursuant to Section 8.01(g) due to the failure of Parent's
shareholders to approve the Parent Proposals, (ii) prior to the time of such
failure to so approve the Parent Proposals, there shall have been made a
proposal for a Competing Transaction with respect to Parent, and (iii) within
twelve (12) months following the termination of this Agreement, Parent executes
a definitive agreement providing for, or consummates, a Competing Transaction;
or (C)(i) Parent or the Company shall terminate this Agreement pursuant to
Section 8.01(b) because the Effective Time has not occurred on or before the
applicable Outside Date, (ii) on or before the applicable Outside Date there
shall have been made a proposal for a Competing Transaction with respect to
Parent, and (iii) within twelve (12) months following the termination of this
Agreement Parent executes a definitive agreement providing for, or consummates,
a Competing Transaction, then Parent shall pay to the Company an amount equal
to $90 million.
(d) Parent agrees that the payment set forth in Section 8.05(b) shall be
the sole and exclusive remedy of Parent upon a termination of this Agreement
pursuant to Sections
49
8.01(b), (e) and (f), and such remedy shall be limited to the sum stipulated in
Section 8.05(b), regardless of the circumstances giving rise to such
termination; provided, however, that nothing herein shall relieve the Company
from liability for the willful breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
(e) The Company agrees that the payment provided for in Section 8.05(c)
shall be the sole and exclusive remedy of the Company upon a termination of
this Agreement pursuant to Sections 8.01(b), (d) and (g), and such remedy shall
be limited to the sum stipulated in Section 8.05(c), regardless of the
circumstances giving rise to such termination; provided, however, that nothing
herein shall relieve Parent from liability for the willful breach of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
(f) Except as otherwise required by Section 8.01, any payment required to
be made pursuant to Section 8.05(b) or 8.05(c) shall be made to the receiving
party not later than two business days after delivery to the paying party of
notice of demand for payment, and shall be made by wire transfer of immediately
available funds to an account designated by the notice of demand for payment
delivered pursuant to this Section 8.05(f). In the case of a payment pursuant
to Section 8.05(b)(A) or 8.05(c)(A), such notice of demand may be delivered on
or after termination of this Agreement. In the case of a payment pursuant to
Sections 8.05(b)(B), 8.05(b)(C), 8.05(c)(B) or 8.05(c)(C) hereof, such notice
of demand may be delivered on or after the earlier of execution of the
definitive agreement providing for, or the consummation of, the Competing
Transaction.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements in this Agreement and in any
certificate delivered pursuant hereto shall terminate at the Effective Time or
upon the termination of this Agreement pursuant to Section 8.01, as the case
may be, except that the agreements set forth in Articles I and II and Sections
6.01(d), 6.03(b), 6.05, 6.06, 6.09(b), 6.09(c), 6.11, 6.12, 6.15, 6.16, 6.17
and 6.19 and this Article IX shall survive the Effective Time and those set
forth in Sections 6.03(b), 8.02 and 8.05 and this Article IX shall survive
termination.
SECTION 9.02. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, facsimile, telegram or telex or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9.02):
50
if to Parent or Merger Sub or Parent LLC:
Publicis Groupe S.A.
Xxxxxx xxx Xxxxxx Xxxxxxx
00000 Xxxxx, Xxxxxx
Facsimile No.: 011-331-44-43-75-50
Attention: M. Xxxxxxx Xxxx
M. Jean-Xxxx Xxxxx
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx
Xxxxxxx X. Xxxxx
if to the Company:
Bcom3 Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxx
Xxxxxxxxx X. Xxxxxxx
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
SECTION 9.03 Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliate" of a specified person means a person who directly or
indirectly through one or more intermediaries controls, is controlled by, or is
under common control with such specified person;
(b) "business day" means any day on which the principal offices of the SEC
in Washington, D.C. are open to accept filings, or, in the case of determining
a date when any payment is due, any day on which banks are not required or
authorized to close in The City of New York;
51
(c) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities, as
trustee or executor, by contract or credit arrangement or otherwise;
(d) "knowledge" means, with respect to any matter in question, that the
named executive officers of the Company, as identified in its registration
statement on Form 10 filed with the SEC on April 30, 2001, or Parent, as
identified in its annual report on Form 20-F, as the case may be, have actual
knowledge of such matter;
(e) "person" means an individual, corporation, partnership, limited
partnership, syndicate, person (including, without limitation, a "person" as
defined in Section 13(d)(3) of the Exchange Act), trust, association or entity
or government, political subdivision, agency or instrumentality of a
government; and
(f) "subsidiary" or "subsidiaries" of 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, more than 50% of the stock or other equity interests, the holders
of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal entity.
SECTION 9.04 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement
be consummated as originally contemplated to the fullest extent possible.
SECTION 9.05 Assignment; Binding Effect; Benefit. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without
the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and assigns.
Notwithstanding anything contained in this Agreement to the contrary, except
for the provisions of Article II, Section 6.01(d), Section 6.05 and Section
6.16 (collectively, the "Third Party Provisions"), nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the
parties hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement. The Third
Party Provisions may be enforced by the beneficiaries thereof. Subject to
Section 6.05, Parent shall reimburse all expenses, including reasonable
attorneys' fees, that are incurred by any person who prevails in any litigation
or other proceeding required to enforce the obligations of the Surviving
Corporation and Parent under the Third Party Provisions.
52
SECTION 9.06 Incorporation of Exhibits. The Company Disclosure Schedule,
the Parent Disclosure Schedule and all Exhibits attached hereto and referred to
herein are hereby incorporated herein and made a part hereof for all purposes
as if fully set forth herein.
SECTION 9.07 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
SECTION 9.08 Governing Law; Forum. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed in that state and without regard
to any applicable conflicts of law. All actions and proceedings arising out of
or relating to this Agreement shall be heard and determined in the courts of
the State of Delaware or the United States District Court for the State of
Delaware. Each of the parties to this Agreement (a) consents to submit itself
to the personal jurisdiction of the courts of the State of Delaware and the
United States District Court for the State of Delaware in the event any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement, (b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court and (c)
agrees that it will not bring any action in relation to this Agreement, the
Merger or any of the other transactions contemplated by this Agreement in any
court other than the courts of the State of Delaware and the United States
District Court for the State of Delaware. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing,
each party agrees that service of process on such party as provided in Section
9.02 shall be deemed effective service of process on such party.
SECTION 9.09 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 9.10 Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
SECTION 9.11 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement. This Agreement shall become
effective when each party hereto shall have received counterparts hereof signed
by all of the other parties hereto.
SECTION 9.12 Entire Agreement. This Agreement (including the Exhibits, the
Company Disclosure Schedule and the Parent Disclosure Schedule) and the
Confidentiality Agreements constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior agreements
and understandings among the parties with respect
53
thereto. No addition to or modification of any provision of this Agreement
shall be binding upon any party hereto unless made in writing and signed by all
parties hereto.
54
IN WITNESS WHEREOF, Parent, Merger Sub, Parent LLC and the Company have
caused this Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
PUBLICIS GROUPE S.A.
By /s/ Xxxxxxx Xxxx
--------------------------------
Name: Xxxxxxx Xxxx
Title: President du Directoire
PHILADELPHIA MERGER CORP.
By /s/ Xxxx Xxxx Xxxxx
--------------------------------
Name: Xxxx Xxxx Xxxxx
Title: Treasurer and Secretary
PHILADELPHIA MERGER LLC
By: /s/ Xxxx Xxxx Xxxxx
--------------------------------
Name: Xxxx Xxxx Xxxxx
Title: Treasurer and Secretary
BCOM3 GROUP, INC.
By /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman and Chief
Executive Officer
55
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of March 7, 2002 among Bcom3 Group,
Inc., a Delaware corporation (the "Company"), Boston Three Corporation, a
Delaware corporation and a wholly-owned subsidiary of the Company ("Merger
Sub"), and Dentsu Inc., a company organized under the laws of Japan ("Dentsu").
WHEREAS, concurrently with the execution of this Agreement, the Company,
Publicis Groupe S.A., Philadelphia Merger Corp. and Philadelphia Merger LLC
("Publicis Merger Sub") are entering into an Agreement and Plan of Merger dated
as of the date hereof (the "Publicis Merger Agreement"), pursuant to which,
immediately following consummation of the Merger (as defined below)
contemplated by this Agreement, the Company will merge with and into Publicis
Merger Sub (the "Publicis Merger");
WHEREAS, the purpose of the Merger is to effect a pro rata purchase of
shares of Class A Common Stock (as defined below) by Dentsu from the holders
thereof, followed by a recapitalization of the common stock of the Company.
NOW, THEREFORE, the parties hereto agree as follows:
Article 1
THE MERGER
Section 1.01. The Merger. (a) At the Effective Time, Merger Sub shall be
merged (the "Merger") with and into the Company in accordance with the General
Corporation Law of the State of Delaware ("Delaware Law"), whereupon the
separate existence of Merger Sub shall cease, and the Company shall be the
surviving corporation (the "Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the extent permitted
hereunder, waiver of all conditions to the Merger, the Company and Merger Sub
will file a certificate of merger with the Delaware Secretary of State and make
all other filings or recordings required by Delaware Law in connection with the
Merger. The Merger shall become effective at such time (the "Effective Time")
as the certificate of merger is duly filed with the Delaware Secretary of State
(or at such later time as may be specified in the certificate of merger).
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, powers, privileges and franchises and be subject to all
of the obligations, liabilities, restrictions and disabilities of the Company
and Merger Sub, all as provided under Delaware Law.
1
Section 1.02. Conversion of Shares. At the Effective Time,
(a) except as otherwise provided in 1.02(c) or Section 1.03(d), each share
of Class A common stock, par value $0.01 per share, of the Company (the "Class
A Common Stock") outstanding immediately prior to the Effective Time shall be
cancelled and shall be converted into the right to receive (i) an amount in
cash equal to the Aggregate Cash (as defined below) divided by the total number
of shares of Class A Common Stock then outstanding, which cash shall be paid
directly from Dentsu as provided in Section 1.03(b) and (ii) 0.813619 shares of
Class A Common Stock (together, the "Class A Consideration");
(b) except as otherwise provided in 1.02(c) or Section 1.03(d), each share
of Class B common stock, par value $0.01 per share, of the Company (the "Class
B Common Stock") outstanding immediately prior to the Effective Time shall be
cancelled and shall be converted into the right to receive 1.665067 shares of
Class B Common Stock (the "Class B Consideration");
(c) each share of Class A Common Stock or Class B Common Stock held by the
Company as treasury stock immediately prior to the Effective Time shall be
canceled, and no payment shall be made with respect thereto; and
(d) each share of common stock, par value $0.01 per share, of Merger Sub
outstanding immediately prior to the Effective Time shall be canceled, and no
payment shall be made with respect thereto.
The shares of Class A Common Stock outstanding immediately prior to the
Effective Time and the shares of Class B Common Stock outstanding immediately
prior to the Effective Time are referred to herein collectively as the
"Shares". The Class A Consideration and the Class B Consideration are referred
to herein collectively as the "Merger Consideration".
Section 1.03. Delivery of Merger Consideration. Except as set forth in
Section 1.03(d), immediately after the Effective Time, the Company shall take
all necessary action to reflect on the books and records of the Company the
conversion of Shares provided for in Section 1.02, such that each person who
held Shares immediately prior to the Effective Time will be reflected in such
books and records as the record holder of the number of shares (including
fractional shares, if any) of Class A Common Stock or Class B Common Stock to
which such person is entitled by virtue of the Merger.
(b) Prior to the Effective Time, a paying agent shall be appointed (the
"Paying Agent") for the purpose of paying the cash portion of the Class A
Consideration. Dentsu hereby agrees, for its own benefit and the benefit of the
holders of Shares and not for the benefit of Publicis or the Company, to pay
$498,702,393 (the "Aggregate Cash") to the Paying Agent immediately after the
Effective Time. It is agreed and understood that neither Publicis nor the
2
Company shall directly or indirectly be required to, nor shall they, reimburse
Dentsu in cash or other property for the payment of the Aggregate Cash or
otherwise assist Dentsu in financing or funding such payment.
(c) Except as set forth in Section 1.03(d), as promptly as practicable
after the Effective Time, the Paying Agent shall deliver to each holder of
Shares of Class A Common Stock, as reflected in the books and records of the
Company at the Effective Time, such holder's applicable cash portion of the
Class A Consideration. The Paying Agent shall be entitled to deduct and
withhold from the cash otherwise payable pursuant to this Agreement to any
holder of Shares, such amounts as it is required to deduct and withhold with
respect to the making of such payment under the 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, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of Shares in
respect of which such deduction and withholding was made.
(d) Notwithstanding Section 1.02, Shares outstanding immediately prior to
the Effective Time and held by a holder who has not voted in favor of the
Merger or consented thereto in writing and who has demanded appraisal for such
Shares in accordance with the Delaware Law (collectively, the "Dissenting
Shares") shall not be converted into a right to receive the applicable Merger
Consideration, unless such holder fails to perfect, withdraws or otherwise
loses its right to appraisal. If, after the Effective Time, any such holder
fails to perfect, withdraws or loses its right to appraisal, such Shares shall
be treated as if they had been converted as of the Effective Time into a right
to receive the applicable Merger Consideration. The Merger Consideration shall
be withheld for each Dissenting Share. The amount any holder of Class A Common
Stock is entitled to receive in an appraisal proceeding is set forth in Section
6.6 of each holder's 2000 Stock Purchase Agreement with the Company.
Section 1.04. Adjustments. If, during the period between the date of this
Agreement and the Effective Time, any change in the outstanding shares of
capital stock of the Company shall occur, including by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, or any stock dividend thereon with a record date during
such period, the Merger Consideration shall be appropriately adjusted; provided
that no additional cash shall be payable by Dentsu pursuant to any such
adjustment.
Article 2
THE SURVIVING CORPORATION
Section 2.01. Certificate of Incorporation. The certificate of
incorporation of the Company in effect at the Effective Time shall be the
3
certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law.
Section 2.02. Bylaws. The bylaws of the Company in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended
in accordance with applicable law.
Section 2.03. Directors And Officers. From and after the Effective Time,
until successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the directors of the Company at the Effective Time shall be
the directors of the Surviving Corporation and (ii) the officers of the Company
at the Effective Time shall be the officers of the Surviving Corporation.
Article 3
CONDITIONS TO THE MERGER
Section 3.01. Conditions to Obligations of Each Party. The obligations of
the Company, Merger Sub and Dentsu to consummate the Merger are subject to the
satisfaction of the following conditions:
(a) this Agreement shall have been approved and adopted by the
stockholders of the Company and Merger Sub in accordance with Delaware Law;
(b) satisfaction or, if permissible, waiver by the applicable party of all
conditions set forth in Article VII of the Publicis Merger Agreement (other
than the condition relating to the completion of the Merger contemplated by
this Agreement); and
(c) no governmental entity or court of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any law, rule, regulation,
decree, executive order or award which is then in effect and has the effect of
making the Merger illegal or otherwise prohibiting consummation of the Merger.
Section 3.02. Conditions To Obligations Of Dentsu. The obligations of
Dentsu to consummate the Merger are subject to the satisfaction of the
following conditions:
(a) the Company shall have provided to Dentsu or Publicis a certificate
meeting the requirements of Treas. Reg. Sections 1.1445-2(c)(3) and 1.897-2(h)
to the effect that the shares of the Company disposed of by Dentsu in the
transactions contemplated by the Publicis Merger Agreement do not constitute a
United States real property interest within the meaning of Section 897(c)(1)(A)
of the Internal Revenue Code of 1986, as amended; and
4
(b) none of the conditions set forth in Article VII of the Publicis Merger
Agreement shall have been waived by the Company without the consent of Dentsu
(such consent not to be unreasonably withheld or delayed).
Article 4
MATTERS RELATING TO PUBLICIS MERGER
Section 4.01. Investment Agreement. The Company and Dentsu agree that the
Investment Agreement between Dentsu and the Company dated as of March 14, 2000
shall terminate immediately after the effective time of the Publicis Merger.
Section 4.02. Ownership Statement. Dentsu shall, if it is able to do so,
deliver to Publicis and the Company an ownership statement, dated as of the
Closing Date (as defined in the Publicis Merger Agreement), satisfying the
requirements of Treasury Regulation Section 1.367(a)-3(c)(5)(i) (provided that
the "related" person statement required by Treasury Regulation Section
1.367(a)-3(c)(5)(i)(C)(2) may be made to Dentsu's best knowledge), in form and
substance reasonably acceptable to Publicis and the Company.
Section 4.03. Notices Under Publicis Merger Agreement. The Company agrees
to promptly forward to Dentsu a copy of any notices given to Publicis or
Publicis Merger Sub pursuant to Section 9.02 of the Publicis Merger Agreement
and to provide a copy of any notices it receives from Publicis or Publicis
Merger Sub pursuant to Section 9.02 of the Publicis Merger Agreement.
Section 4.04. Amendment To Publicis Merger Agreement. The Company will not
amend any provision of the Publicis Merger Agreement without the prior written
consent of Dentsu (such consent not to be unreasonably withheld or delayed, it
being acknowledged that the refusal to consent to any amendment that would in
the good faith opinion of Dentsu's accountants jeopardize Dentsu's ability to
equity account, without the payment of any additional sum of money, for its
investment in Publicis after the Publicis Merger will be per se reasonable).
Section 4.05. Company Proxy Statement. Dentsu and its counsel shall be
given a reasonable opportunity to review and comment on the Company Proxy
Statement (as defined in the Publicis Merger Agreement) prior to its being
filed with the Securities and Exchange Commission.
Section 4.06. "Bare Legal Title" Matters.
(a) Pursuant to Section 2.03 of the Publicis Merger Agreement, Dentsu will
receive bare legal title (nue propriete) to certain Parent Ordinary Shares in
the Publicis Merger for a two-year period after the closing of the Publicis
Merger.
5
Dentsu shall not transfer such bare legal title in such shares to any person or
entity during such two-year period.
(b) The transfer of bare legal title to such shares to Dentsu will be
effected pursuant to conveyancing instruments between Dentsu and the Special
Nominee. Dentsu agrees that such instruments will contain all provisions that
are necessary or desirable to ensure that all economic interests in such shares
shall be enjoyed exclusively by the holder of the usufruct interest in such
shares (or such holder's successors or assigns) at all times during such
two-year period.
Section 4.07 Capital Stock Outstanding. As of March 5, 2002, (i)
15,289,804 shares of Class A Common Stock were issued and outstanding, (ii)
4,284,873 shares of Class B Common Stock were issued and outstanding, (iii) no
shares of Class A Common Stock or Class B Common Stock were held in the
treasury of the Company or by any subsidiary of the Company, (iv) options to
purchase 1,742,796 shares of Class A Common Stock were outstanding and (v)
options to purchase 103,864 shares of Class A Common Stock were available for
future grant under the Company's stock option plans.
Article 5
TERMINATION
Section 5.01. Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time (notwithstanding any
approval of this Agreement by the stockholders of the Company) by the Company,
Merger Sub or Dentsu if and at such time as the Publicis Merger Agreement has
terminated in accordance with its terms.
Section 5.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 4.01, this Agreement shall become void and of no effect
without liability of any party (or any stockholder, director, officer,
employee, agent, consultant or representative of such party) to the other party
hereto. The provisions of this Section 4.02 shall survive any termination
hereof pursuant to Section 4.01.
Article 6
MISCELLANEOUS
Section 6.01. Amendments; No Waivers. Any provision of this Agreement may
be amended or waived prior to the Effective Time if, but only if, such
amendment or waiver is in writing and is signed, in the case of an amendment,
by each party to this Agreement or, in the case of a waiver, by each party
against whom the waiver is to be effective, provided that, after the adoption
6
of this Agreement by the stockholders of the Company, no amendment shall be
made which by law requires further approval by such stockholders without such
further approval.
Section 6.02. Expenses. All costs and expenses incurred in connection with
the transactions contemplated by this Agreement shall be paid by the party
incurring such costs and expenses.
Section 6.03. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether pursuant to a merger, by operation of law or otherwise),
without the prior written consent of the other parties.
Section 6.04. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
Section 6.05. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement
were not performed in accordance with the terms hereof for which money damages
would not be an adequate remedy and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at
law or in equity. Each of the parties further agrees that in any proceeding
seeking specific performance such party will waive (a) the defense of adequacy
of a remedy at law and (b) any requirement for the securing or posting of any
bond.
Section 6.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the conflicts of law rules of such state.
Section 6.07. Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have
received counterparts hereof signed by all of the other parties hereto. Except
as provided in Article 2, no provision of this Agreement is intended to confer
any rights, benefits, remedies, obligations or liabilities hereunder upon any
Person other than the parties hereto and their respective successors and
assigns.
Section 6.08. Captions. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
Section 6.09. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect
7
and shall in no way be affected, impaired or invalidated 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 a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the transactions contemplated hereby
be consummated as originally contemplated to the fullest extent possible.
[remainder of page intentionally left blank]
8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BCOM3 GROUP, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman and Chief
Executive Officer
BOSTON THREE CORPORATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
DENTSU INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: President
9
EXHIBIT B
ORDERLY MARKETING TERM SHEET FOR PARENT ORDINARY SHARES, PARENT ORA AND PARENT
WARRANTS
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lock-up: o 25% of Common Stock and usufructs relating
to the Common Stock to be released from the
lock-up at the end of 6-, 12-, 18- and
24-month periods after closing of the
transaction.
o The lock-up will apply to both shares and
"usufructs" (i.e., economic interests in
shares). The usufructs will be allocated
entirely to the last of the four 6-month
periods described above.
o 25% of ORA and Warrants to be released from
the lock-up at the end of 30-, 36-, 42- and
48-month periods after the closing of the
transaction.
o The 25% lock-up release relates to a
percentage of the total amount of Common
Stock, ORA and Warrants (together
"Securities"), not necessarily the
percentage of Securities owned by each
individual holder provided that the
allocation methodology shall be determined
by the Company prior to closing.
o If Parent so elects in its sole discretion,
more than 25% of the Securities may be
released in any six month period, and in
such case, the remaining lock-up release
amounts will be measured on a cumulative
basis (For example, if 30% is released in
the first period, only 20% will be released
in the second period).
o Any Securities released from such lock-ups
will be freely transferable, except that
any intended sales of such Securities by
the Former Target Shareholders on the
public market shall be subject to the
following provisions.
-------------------------------------------------------------------------------
Former Target Shareholder o Either a trust, depository agent, or
Polling: largest shareholders of the Company) (the
"Polling Agent") will poll the specified
individuals (e.g. former Company
shareholders ("Former Target Shareholders")
each month as to their liquidity requests,
commencing in the month prior to the
expiration of the first six-month lock-up
period (each, a "Poll"). The Polling Agent
will report the results of the Poll to
Parent.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
o The Poll will relate to the number of
Securities, if any, each Former Target
Shareholder wishes to sell during the
ensuing month. In the case of an organized
sale, Former Target Shareholders will
specify the price range at which he/she
will authorize the sale.
o If Former Target Shareholders desire to
sell any previously released shares between
Polls, they may contact the Polling Agent
and such request will be granted subject to
maintaining an orderly distribution as
described below in "Direct Release of
Securities" and "Sale Amount and Method".
-------------------------------------------------------------------------------
Right of First o Parent has for 5 days a right of first
Refusal/Offer on ORA and refusal, in whole or in part, the market
Warrants: price of the Warrants and or the ORAs at
the time the right to purchase ORA and/or
Warrants from the Former Target
Shareholders at of first refusal is
exercised. No right of first refusal shall
be available where there is no market for
the Securities. If there is no market for
these securities, Parent has the right of
first offer.
-------------------------------------------------------------------------------
Direct Release of o If the total number of shares requested to
Securities: be sold in any one-month (the "Direct
Release Threshold"), then the Securities
may be sold on the period by a Poll
represents less than 1.4 million shares of
Common Stock public markets or otherwise
without any further restrictions under this
Orderly Marketing Agreement.
-------------------------------------------------------------------------------
Sale Amount and Method: o In the event the amount of Securities
requested to be sold exceeds the Direct
Release Threshold, Lazard and Xxxxxx
Xxxxxxx, or such other investment banks as
Parent and the Former Target Shareholders
may agree, will work together to evaluate
the market conditions for the sale of the
Securities, and determine the appropriate
method for sale and the appropriate amount
of Securities to be sold (but the amount to
be sold shall not be less than 1.4
million).
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
o If the requested amount of Securities to be
sold exceeds the actual amount sold (which
is never less than 1.4 million shares), the
proceeds from the Securities sold will be
distributed pro rata amongst the Former
Target Shareholders who have requested a
sale of their Securities, and the excess
amount will be pushed back to the next Poll
Date in a priority position for sale at
that time.
-------------------------------------------------------------------------------
Final Expiration: o Six months after the final expiration of
its applicable lock-up period, any unsold
Securities will be fully released from this
Orderly Marketing Agreement and will be
freely transferable whether on the public
market or otherwise by the Former Target
Shareholders.
-------------------------------------------------------------------------------
Fees and Expenses: o All fees and expenses associated with the
sale of the Securities will be paid by the
Former Target Shareholders.
-------------------------------------------------------------------------------
Underwriter Selection: o The Former Target Shareholders will agree
to appoint as managing/lead underwriter of
any offering such person as is selected by
Parent in its sole discretion. The Former
Target Shareholders will bear the fees and
expenses of such underwriter. The
underwriter will act on behalf of the
Former Target Shareholders.
-------------------------------------------------------------------------------
Dividends; Voting o The Former Target Shareholders shall have
Rights the right to receive all dividends and
coupon payments on the Securities and to
exercise voting rights of the Securities.
The lock-up shall not affect those rights.
-------------------------------------------------------------------------------
Black-out Period: o In the event of a material corporate event,
Parent can postpone an Black-out Period:
underwritten offering for a period of no
longer than 60 days, but this Black-out
Period shall only apply to the sale of
shares in excess of the Direct Release
Threshold.
-------------------------------------------------------------------------------
Exclusions: o Notwithstanding the foregoing, at any time
after the Closing Former Target
Shareholders shall be permitted to transfer
their Securities (i) by way of gift or
other transfer for estate planning
purposes; (ii) by way of gift to a
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
charitable organization; (iii) to any other
Former Target Shareholders for value or by
gift; and (iv) to a bank or financial
institution as collateral, by pledge or
otherwise; provided that, in the case of
clauses (i) through (iv), the transferee
agrees in writing to be bound by the terms
and conditions of transfer set forth above
and agrees explicitly not to enter into
hedging transactions with respect to
Parent's common stock.
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EXHIBIT C-2
EXECUTION COPY
TERM SHEET
-------------------------------------------------------------------------------
TERMS OF THE "ORANE" (BONDS REDEEMABLE IN NEW OR EXISTING SHARES)
-------------------------------------------------------------------------------
>> Nominal amount 857,812,500 Euros in 1,562,500 notes of 549
Euros each
>> Final Maturity 20 years from date of issue
>> Coupon
o Minimum Coupon: 0.82% of principal amount
outstanding (principal amount outstanding
= Euros 30.5 x number of shares remaining
to be redeemed in respect of each ORANE)
o First period , from date of issue up to
and including August 31, 2004: Euros 4.50
per annum with pro rata temporis coupon
on 1st September 2002
o For each subsequent 3 year period,
beginning 1st September 2004, an amount
equal to 110% of the average of dividends
paid in the year of payment of coupon and
the immediately preceding 2 years
multiplied by the number of shares
remaining to be redeemed in respect of
each ORANE, but not less than the Minimum
Coupon. By way of example, the first
coupon in respect of the period beginning
1st September 2004 shall be paid on 1st
September, 2005, and shall be calculated
on the basis of the average of dividends
paid in 2005, 2004 and 2003.
o Payable annually on 1st September
o Subject to "accelerated redemption" (see
below), if no P dividend is paid in a
given fiscal year, the coupon(s) is (are)
not paid but interest accrues (and is not
capitalized) and coupon(s) is (are) paid
the first subsequent year a dividend is
paid irrespective of the amount of the
dividend.
o Gross-up if withholding tax imposed on
payment of Coupon
- 2 - EXECUTION COPY
>> Redemption
o 18 new or existing P shares (at the
option of P) for each ORANE -total of
28,125,000 P shares
o To be redeemed in 18 consecutive
installments (one share per year for each
ORANE) on September 1 of each year,
commencing September 1, 2005 and ending
on final maturity in 2022.
>> Accelerated redemption
o At the option of each holder in the
event:-
(i) Coupon not paid for a period of 5
consecutive years due to
non-payment of dividends. If
accelerated, accrued coupons are
cancelled.
(ii) Launch of a public tender offer
("depot d'une offre publique") on
100% of the securities of P after
such public tender offer has been
cleared by the stock market
authorities and has opened.
(iii) A transfer to any third party by
P, or in the event that the
transfer is subject to shareholder
vote, any proposed transfer (in
which event, for the avoidance of
doubt, such redemption shall occur
by not later than one week prior
to the record date for
shareholders to participate in
such vote) of a material part of
the combined group's business or
assets, whether by sale, spin-off,
scission, merger or otherwise. For
purpose of this paragraph
"material part of the combined
group's assets or business" shall
mean any assets or business
representing one third or more of
consolidated revenues of the
combined group.
(iv) If at any time any person,
directly or indirectly, alone or
in concert, other than the concert
group of EB (directly or
indirectly through Seattle) and
Denver as it exists on the closing
date, comes to control or is
presumed to control, pursuant to
article L.233-3 of French
Commercial Code, P, it being
acknowledged that this paragraph
shall be deemed triggered in the
event that a third person becomes
part of the EB/ Denver concert
group and EB ceases to be the
dominant party in the concert
group or such
-------------------------------------------------------------------------------
- 3 - EXECUTION COPY
third person is engaged in a
business that is competitive with
the business of the combined group.
(v) Failure to pay coupon or to make
redemption payment when due
(vi) Failure of P to comply with other
obligations under the ORANE
(vii) Cross-default under loans entered
into by P or one of its material
subsidiaries
o Automatic redemption in the event of:
(viii) Insolvency ("etat de cessation des
paiements") of P, amicable
settlement with creditors
("concordat") voluntary
liquidation or bankruptcy filing
("depot de bilan") by P
o For the avoidance of doubt, payment in
all cases of accelerated redemption shall
be in stock, not in cash.
>> Payment of accrued
coupons In the event there are any accrued but
unpaid coupons on the date of a redemption
that has been accelerated for any reason
other than non payment of coupons pursuant
to (i) above, or in the event there are
accrued but unpaid coupons on the date of
maturity in respect of any of the 5 previous
years, accrued coupons are payable, at the
option of P, in cash or in P shares (number
calculated at 10 day average market price of
P shares immediately prior to accelerated
redemption or maturity, as applicable)
>> Listing As per Merger Agreement
>> Lock-up As per Merger Agreement and OMA.
>> Adjustments to Redemption
ratio Number of P shares to be received at
redemption to be adjusted to reflect events
affecting share capital (e.g. capital
increase, merger, incorporation of reserves,
stock split, distribution of reserves...) as
provided under Article L.225-162 and
L.225-164 of French Commercial Code and
Articles 174-1 and 174-1 A of the French
Decree of March 23rd, 1967 as well as
distribution of extraordinary dividend.
* *
*
EXHIBIT D-2
EXECUTION COPY
TERM SHEET
TERMS OF THE "OBSA" (BONDS WITH DETACHABLE WARRANTS)
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>> Nominal amount Aggregate of 857,812,500 Euros in 2,812,500
bonds with a face value of 305 Euros each
with 10 detachable warrants
>> Bonds
o Maturity 20 years
o Coupon 2.75% per annum, payable semi annually on
June 30 and December 31 (with gross-up if
withholding tax imposed)
o Redemption Annual payments of principal equal to 10% of
initial principal amount beginning in year
11 on June 30 of each year beginning June
30, 2013 and ending on 20th anniversary of
issue date, 2022.
o Events of default (i) failure to pay interest or principal
when due
(ii) failure of P to comply with other
obligations under the OBSA
(iii) P insolvency, bankruptcy or voluntary
liquidation
(iv) cross default under loans entered into
by P or one of its material
subsidiaries
If event of default occurs, outstanding
principal amount of bonds together with
accrued interest becomes immediately due and
payable after customary grace period, upon
decision of a majority of the bondholders
("masse des obligataires").
>> Warrants
o Rights attached to the warrants
- Each warrant entitles holder to purchase 1
P share at a price of 30,50 Euros per share
- Warrants exercisable at any time from 11th
anniversary of issue date through 20th
anniversary of issue date.
- 2 - EXECUTION COPY
o Acceleration of right
to exercise warrants Only at option of holder, in the event :
(i) Launch of a public tender offer
("depot d'une offre publique") on 100%
of the securities of P after such
public tender offer has been cleared
by the stock market authorities and
has opened.
(ii) A transfer to any third party by P, or
in the event that the transfer is
subject to shareholder vote, any
proposed transfer (in which event, for
the avoidance of doubt, the warrant
shall become exercisable no later than
one week prior to the record date for
shareholders to participate in such
vote) of a material part of the
combined group's business or assets,
whether by sale, spin-off, scission,
merger or otherwise. For purpose of
this paragraph "material part of the
combined group's assets of business"
shall mean any assets or business
representing one third or more of
consolidated revenues of the combined
group.
(iii) If at any time any person, directly or
indirectly, alone or in concert, other
than the concert group of EB (directly
and/or indirectly through Seattle) and
Denver as it exists on the closing
date, comes to control or is presumed
to control, pursuant to article
L.233-3 of French Commercial Code, P,,
it being acknowledged that this
paragraph shall be deemed triggered
inter alia in the event that a third
person becomes part of the EB/ Denver
concert group and EB ceases to be the
dominant party in the concert group or
such third person is engaged in a
business that is competitive with the
business of the combined group.
(iv) insolvency ("etat de cessation des
paiements") of P, amicable settlement
with creditors ("concordat") voluntary
liquidation or bankruptcy filing
("depot de bilan") by P
o Adjustments to protect
warrant holders Number of P shares to be received at
redemption to be adjusted to reflect events
affecting share capital (e.g. capital
increase, merger, incorporation of reserves,
stock split, distribution of reserves...) as
provided under Articles L.225-154 and
L.225-156 of French Commercial Code and
Articles174-1 A and 174-1 of the French
Decree of March 23rd, 1967 as well as
distribution of extraordinary dividend.
- 3 - EXECUTION COPY
>> Listing As per Merger Agreement.
>> Lock-up As per Merger Agreement and OMA.
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