1
AGREEMENT AND PLAN OF MERGER
by and among
EG&G, INC.
LIGHTHOUSE WESTON CORP.
and
LUMEN TECHNOLOGIES, INC.
Dated as of October 21, 1998
2
TABLE OF CONTENTS
ARTICLE 1
THE OFFER.................................................................. 2
1.1 The Offer............................................................ 2
1.2 Company Action....................................................... 4
1.3 Directors............................................................ 6
ARTICLE 2
THE MERGER................................................................. 7
2.1 The Merger........................................................... 7
2.2 Effect of the Merger................................................. 7
2.3 Consummation of the Merger........................................... 7
2.4 Certificate of Incorporation; By-Laws; Directors and Officers........ 8
2.5 Conversion of Securities; Payment of Merger Consideration............ 8
2.6 Exchange of Certificates............................................. 9
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND THE PURCHASER........................................... 11
3.1 Organization and Qualification...................................... 11
3.2 Authority........................................................... 12
3.3 Compliance.......................................................... 12
3.4 Information Provided................................................ 13
3.5 Interim Operations of the Purchaser................................. 13
3.6 Financing........................................................... 13
3.7 Brokers............................................................. 13
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................. 13
4.1 Organization and Qualification...................................... 14
4.2 Subsidiaries........................................................ 14
4.3 Capitalization...................................................... 15
4.4 Authority........................................................... 17
4.5 Compliance.......................................................... 17
4.6 Commission Filings; Financial Statements; Information Provided...... 18
4.7 No Undisclosed Liabilities.......................................... 19
4.8 Changes............................................................. 19
4.9 Contracts........................................................... 19
4.10 Transactions with Affiliates........................................ 20
4.11 Employee Benefits and Contracts..................................... 20
4.12 Properties and Liens................................................ 22
4.13 Environmental Matters............................................... 22
-ii-
3
4.14 Taxes............................................................... 24
4.15 Compliance with Laws; Permits....................................... 27
4.16 Intellectual Property............................................... 27
4.17 Litigation.......................................................... 27
4.18 Prepayment of Indebtedness.......................................... 27
4.19 Voting Requirements................................................. 28
4.20 Year 2000 Compliance................................................ 28
4.21 Insurance........................................................... 29
4.22 No Existing Discussion.............................................. 29
4.23 Brokers............................................................. 29
ARTICLE 5
CONDUCT OF BUSINESS....................................................... 29
5.1 Conduct Prior to Effective Time..................................... 29
ARTICLE 6
ADDITIONAL AGREEMENTS..................................................... 33
6.1 Company Stockholder Approval; Preparation of Proxy Statement........ 33
6.2 Disposition of the Shares........................................... 34
6.3 Fees and Expenses................................................... 34
6.4 Additional Agreements............................................... 35
6.5 No Solicitation..................................................... 36
6.6 Notification of Certain Matters..................................... 38
6.7 Access to Information............................................... 39
6.8 Indemnification and Insurance....................................... 40
6.9 Filings and Other Matters........................................... 41
6.10 Fair Price Structure................................................ 42
6.11 Parent Guaranty..................................................... 42
6.12 Company Options..................................................... 42
6.13 Certain Payments.................................................... 43
ARTICLE 7
CONDITIONS................................................................ 44
7.1 Conditions to Obligation of Each Party to Effect the Merger......... 44
7.2 Conditions to the Parent's and the Purchaser's Obligation to
Effect the Merger................................................... 44
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER......................................... 44
8.1 Termination......................................................... 44
8.2 Effect of Termination............................................... 46
8.3 Amendment........................................................... 46
8.4 Waiver.............................................................. 47
-iii-
4
ARTICLE 9
GENERAL PROVISIONS........................................................ 47
9.1 Publicity........................................................... 47
9.2 Notices............................................................. 47
9.3 Interpretation...................................................... 48
9.4 Representations and Warranties; etc................................. 49
9.5 Miscellaneous....................................................... 49
9.6 Validity............................................................ 50
9.7 Counterparts. ..................................................... 50
9.8 Severability........................................................ 50
ANNEX I
CONDITIONS OF THE OFFER................................................... 1
-iv-
5
TABLE OF DEFINED TERMS
Acquisition Proposal 6.5(a)
Affiliated Group 4.14(a)
Affiliated Period 4.14(a)
Agreement Preamble
business day 9.3
Certificate of Merger 2.3
Certificates 2.6(a)
CERCLA 4.13(a)
Code 1.1(e)
Company Preamble
Company Options 4.3(a)
Company's Directors 1.2(a)
Commission 1.1(b)
Commission Filings 4.6(a)
Convertible Notes 4.3(a)
Delaware Law 1.2(a)
Disclosure Schedule 4
Dissenting Shares 2.5(b)
Effective Time 2.3
Environmental Law 4.13(a)
Environmental Permits 4.13(e)
ERISA 4.11(b)
ESPP 4.3(a)
Exchange Act 1.1(a)
Fairness Opinion 1.2(c)
Financial Advisor 1.2(c)
Fully Diluted Shares Annex I
Governmental Entity 4.13(a)
Xxxx-Xxxxx-Xxxxxx Act 3.3(b)
ILC Merger Agreement 1.3(c)
Indemnified Parties 6.8
Indemnifying Party 6.8
Independent Directors 1.3(a)
Insurance Policies 4.21
Intellectual Property 4.16
Liens 4.12(b)
Material Adverse Effect 4.1
Materials of Environmental Concern 4.13(b)
Merger Background
Merger Consideration 2.5(a)
Minimum Condition Annex I
Offer Background
-v-
6
Offer Documents 1.1(c)
Option Plan 4.3(a)
Parent Preamble
Parent Common Stock 6.12(a)
Payment Agent 2.6(a)
Payment Fund 2.6(a)
Permitted Indebtedness 5.1
Preferred Stock 4.3(a)
Proceeding 6.8(b)
Proxy Statement 6.1(b)
Purchaser Preamble
Qualified Acquisition Proposal 6.5(a)
Qualified Commercial Bank 2.6(b)
Schedule 14D-1 1.1(c)
Schedule 14D-9 1.2(b)
Section 16 Shares 1.2(d)
Securities Act 4.3(c)
September 30 Financial Information 4.6(c)
Shares Background
Stockholders' Agreement Background
Stockholders Meeting 6.1(a)
Subsidiary; Subsidiaries 4.2(a)
Surviving Corporation 2.1
Tax Returns 4.14(a)
Taxes 4.14(a)
Third Party 6.5(a)
Trigger Event 6.3(e)
Year 2000 Compliant 4.20
-vi-
7
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
October 21, 1998, is by and among EG&G, Inc., a corporation organized under the
laws of the Commonwealth of Massachusetts (the "Parent"), Lighthouse Weston
Corp., a corporation organized under the laws of the State of Delaware and a
wholly owned subsidiary of the Parent (the "Purchaser"), and Lumen Technologies,
Inc., a corporation organized under the laws of the State of Delaware (the
"Company").
BACKGROUND
A. The respective Boards of Directors of the Parent, the
Purchaser and the Company have duly approved and found advisable this Agreement
and the acquisition of the Company by the Parent and the Purchaser pursuant to
the terms and conditions of this Agreement.
B. In furtherance of such acquisition, it is proposed that the
Purchaser will make a tender offer (the "Offer") to purchase all of the issued
and outstanding shares of Common Stock, $0.01 par value per share, of the
Company (the "Shares"), at a price of $7.75 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions set
forth in this Agreement.
C. The Board of Directors of the Company unanimously has
determined that the Offer is fair to, and in the best interests of, the
Company's stockholders and has duly approved the Offer and unanimously resolved
to recommend its acceptance by the holders of Shares.
D. The respective Boards of Directors of the Parent, the
Purchaser and the Company have each duly approved the merger of the Purchaser
and the Company on the terms and subject to the conditions of this Agreement
(the "Merger") following consummation of the Offer and the Boards of Directors
of the Company and the Purchaser have each, by unanimous vote, duly resolved to
recommend approval of the Merger by their respective stockholders.
E. In connection with such acquisition, the Parent and the
Purchaser have entered into a Stockholders' Agreement dated of even date
herewith (the "Stockholders' Agreement") with certain stockholders of the
Company.
F. The respective Boards of Directors of the Parent, the
Purchaser and the Company have each duly approved all of the other transactions
contemplated by this Agreement, including without limitation, for the purposes
of satisfying the requirements of Section 203 of the Delaware General
Corporation Law, the Stockholders' Agreement.
-1-
8
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Parent, the Purchaser
and the Company hereby agree as follows:
ARTICLE 1
THE OFFER
1.1 THE OFFER.
(a) Provided that this Agreement shall not have been
terminated in accordance with Section 8.1 hereof and nothing shall have occurred
and be continuing that would result in a failure to satisfy any of the
conditions set forth in ANNEX I hereto, the Purchaser shall (i) no later than
the business day following the date of this Agreement, publicly announce its
intention to make the Offer and (ii) within five business days of such
announcement, commence (within the meaning of Rule 14d-2(a) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), the Offer for all
Shares, subject to the conditions set forth in ANNEX I, at a price of $7.75 per
Share, net to the seller in cash, without interest thereon. Subject to the
conditions set forth in ANNEX I, the Purchaser shall accept for payment, and pay
for, all shares validly tendered and not withdrawn pursuant to the Offer that
the Purchaser becomes obligated to accept for payment, and pay for, pursuant to
the Offer as soon as practicable after the expiration of the Offer and in no
event later than five business days after the expiration of the Offer.
(b) The Offer shall be made by means of the Offer
Documents (as defined below), which shall not contain any condition not set
forth in ANNEX I hereto and shall be open for a period of not less than 20
business days. The Purchaser expressly reserves the right, subject to compliance
with the Exchange Act, to modify the terms of the Offer, except that, without
the consent of the Company, the Purchaser shall not amend or waive the Minimum
Condition (as defined in ANNEX I hereto), reduce the maximum number of Shares to
be purchased, reduce the price to be paid per Share pursuant to the Offer,
change the form of consideration to be paid in the Offer, impose conditions to
the Offer in addition to those set forth in ANNEX I, or amend any other material
term of the Offer in a manner adverse to the holders of the Shares.
Notwithstanding the foregoing, the Purchaser may, in its sole discretion, (A)
extend the Offer if at the scheduled or any extended expiration date of the
Offer any of the conditions set forth on ANNEX I (including the Minimum
Condition) shall not be satisfied or waived, until such time as such conditions
are satisfied or waived, and (B) extend the Offer for any period required by any
rule, regulation, interpretation or position of the Securities and Exchange
Commission (the "Commission") or the staff thereof applicable to the Offer;
provided, however, that, without the Company's written consent, the Purchaser
may not extend the expiration date of the Offer pursuant to this sentence to a
date later than 11:59 p.m. on December 31, 1998.
-2-
9
(c) On the date of commencement of the Offer, the Parent
and the Purchaser shall file with the Commission a Tender Offer Statement on
Schedule 14D-1 (together with all amendments and supplements thereto, the
"Schedule 14D-1") with respect to the Offer that will contain an offer to
purchase and the related letter of transmittal (which documents, together with
any supplements or amendments thereto, are referred to herein collectively as
the "Offer Documents") and shall promptly mail the Offer Documents to the
Company's stockholders. The Parent and the Purchaser agree that the Offer
Documents shall comply as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations promulgated thereunder, and
the Offer Documents, on the date first filed with the Commission and on the date
first published, sent or given to the Company's stockholders, shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation or warranty is made by the Parent or
the Purchaser with respect to written information supplied by the Company or any
of its stockholders specifically for inclusion or incorporation by reference in
the Offer Documents. The Parent, the Purchaser and the Company each agrees
promptly to correct any written information provided by it for use in the
Schedule 14D-1 or the Offer Documents if and to the extent that such information
shall have become false or misleading in any material respect, and the Parent
and the Purchaser further agree to take all steps necessary to amend or
supplement the Schedule 14D-1 and, as applicable, the Offer Documents and to
cause the Schedule 14D-1 as so amended and supplemented to be filed with the
Commission and the Offer Documents as so amended and supplemented to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable securities laws. The Company and its counsel shall be given
reasonable opportunity to review and comment upon the Offer Documents prior to
their filing with the Commission or dissemination to the stockholders of the
Company. The Parent and the Purchaser shall provide the Company and its counsel
with a copy of any written comments or telephonic notification of any verbal
comments the Parent or the Purchaser may receive from the Commission or its
staff with respect to the Offer promptly after the receipt thereof and shall
provide the Company and its counsel with a copy of any written responses thereto
and telephonic notification of any verbal responses thereto of the Parent or the
Purchaser or their counsel.
(d) The Parent shall provide or cause to be provided to
the Purchaser on a timely basis the funds necessary to purchase any and all
Shares that the Purchaser becomes obligated to purchase pursuant to the Offer.
(e) The Purchaser shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to the Offer such
amounts as may be required to be deducted and withheld with respect to the
making of such payment under the Internal Revenue Code of 1986, as amended (the
"Code"), or under any applicable law.
-3-
10
1.2 COMPANY ACTION.
(a) The Company hereby approves of and consents to the
Offer and represents and warrants that the Board of Directors of the Company
(the "Company's Directors"), at a meeting duly called and held, (i) has duly
adopted and approved, by unanimous vote, (A) the Offer, the Merger and this
Agreement, and the transactions contemplated hereby and thereby, and (B) solely
for the purpose of satisfying the requirements of Section 203 of the Delaware
Law, the Stockholders' Agreement and the transactions contemplated thereby; (ii)
has determined that each of the transactions contemplated by this Agreement,
including the Offer and the Merger are fair to and in the best interests of the
stockholders of the Company; and (iii) after consideration of its fiduciary
duties under applicable laws, has resolved to recommend acceptance of the Offer
by holders of Shares and to recommend adoption and approval of the Merger
pursuant to the Delaware General Corporation Law (the "Delaware Law") by holders
of Shares (if stockholder approval of the Merger is required by the Delaware
Law).
(b) The Company agrees to file with the Commission,
contemporaneously with the commencement of the Offer, a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") and to disseminate the
Schedule 14D-9, to the extent required by Rule 14d-9 promulgated under the
Exchange Act and any other applicable laws, to the stockholders of the Company
no later than the date on which the Purchaser mails the Offer Documents to such
stockholders. Except and to the extent otherwise permitted pursuant to Section
6.5 below, the Offer Documents and the Schedule 14D-9 shall contain the
recommendation of the Company's Directors that the holders of Shares accept the
Offer, and the Company hereby consents to the inclusion in the Offer Documents
of such recommendation. The Company agrees that the Schedule 14D-9 shall comply
as to form in all material respects with the requirements of the Exchange Act
and the rules and regulations promulgated thereunder and the Schedule 14D-9, on
the date first filed with the Commission and on the date first published, sent
or given to the Company's stockholders, shall not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation or warranty is made by the Company with respect to written
information supplied by the Parent or the Purchaser specifically for inclusion
or incorporation by reference in the Schedule 14D-9. The Company, the Parent and
the Purchaser each agrees promptly to correct any written information provided
by it for use in the Schedule 14D-9 if and to the extent that such information
shall have become false or misleading in any material respect, and the Company
further agrees to take all steps necessary to amend or supplement the Schedule
14D-9 and to cause the Schedule 14D-9 as so amended or supplemented to be filed
with the Commission and disseminated to the Company's stockholders, in each case
as and to the extent required by applicable securities laws. The Parent and its
counsel shall be given reasonable opportunity to review and comment upon the
Schedule 14D-9 prior to its filing with the Commission or dissemination to
stockholders of the Company. The Company shall provide the Parent and its
counsel with a copy of any written comments or telephonic
-4-
11
notification of any verbal comments the Company may receive from the Commission
or its staff with respect to the Offer promptly after the receipt thereof and
shall provide the Parent and its counsel with a copy of any written responses
thereto and telephonic notification of any verbal responses thereto of the
Company or its counsel.
(c) The Company has received the written opinion of
Xxxxxxx Xxxxx & Associates, Inc. (the "Financial Advisor"), that, on the basis
of and subject to the assumptions set forth therein, the cash consideration of
$7.75 per Share to be received by holders of Shares pursuant to the Offer and
the Merger is fair to the holders of Shares from a financial point of view (the
"Fairness Opinion"). The Company has delivered to the Parent and the Purchaser a
copy of the Fairness Opinion, together with the Financial Advisor's written
consent to the inclusion of or reference to the Fairness Opinion in the Schedule
14D-1, the Offer Documents, the Schedule 14D-9 and the Proxy Statement (as
defined in Section 6.1).
(d) The Company represents that each member of the
Company's Board of Directors and each executive officer of the Company has
advised the Company that his current intention is to tender all Shares, if any,
beneficially owned by him pursuant to the Offer, other than those individuals,
if any, for whom the tender of such Shares would cause them to incur liability
under the provisions of Section 16(b) of the Exchange Act (the "Section 16
Shares"). As to Section 16 Shares, the Company represents that each executive
officer and director holding Section 16 Shares, if any, has advised the Company
that it is his current intention to vote such Shares in favor of the Merger.
(e) In connection with the Offer and the Merger, the
Company will promptly furnish to the Purchaser or its designee mailing labels
containing the names and addresses of the record holders of the Shares as of a
recent date and of those persons becoming record holders subsequent to such date
and, to the extent known, a list of the beneficial owners of the Shares as of a
recent date, together with copies of all security position listings and all
other computer files and other information in the Company's possession or
control regarding the beneficial owners' ownership of the Shares, and shall
furnish to the Purchaser such information and assistance (including updated
lists and information) as it may reasonably request for the purpose of
communicating the Offer to the Company's stockholders. From and after the date
of this Agreement, all such information concerning the Company's record and, to
the extent known, beneficial holders shall be made available to the Purchaser.
Subject to the requirements of applicable laws and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Offer and the Merger, the Parent and the Purchaser shall,
until consummation of the Offer, hold in confidence the information contained in
any of such labels and lists, shall use such information only in connection with
the Offer and the Merger and, if this Agreement shall be terminated in
accordance with Section 8.1, shall deliver to the Company all copies of such
information then in their possession or under their control.
-5-
12
1.3 DIRECTORS.
(a) Promptly upon the acceptance for payment of and
payment by the Purchaser for any Shares pursuant to the Offer, and from time to
time thereafter as Shares are accepted for payment and paid for by the
Purchaser, the Purchaser shall be entitled to designate such number of the
Company's Directors, rounded to the nearest whole number, as will give the
Purchaser representation on the Company's Board of Directors equal to at least
that number of directors which equals the greater of (i) a majority and (ii) the
product of the total number of the Company's Directors (after giving effect to
the directors elected pursuant to this sentence) multiplied by the percentage
that such number of Shares so accepted for payment and paid for by the Purchaser
bears to the number of Shares outstanding, and the Company shall, upon the
written request of the Purchaser, at such time, promptly take such actions as
are necessary to cause the Purchaser's designees to be so elected or appointed,
including without limitation increasing the size of the Company's Board of
Directors or using its best efforts to secure the resignations of incumbent
directors or both; PROVIDED, HOWEVER, that, notwithstanding the Purchaser's
right to designate certain of the Company's Directors, until the Effective Time
(as defined in Section 2.3), the Company's Directors shall include at least
three directors who are directors on the date hereof (the "Independent
Directors"); provided further, that, if the number of Independent Directors
shall be reduced below three for any reason whatsoever, any remaining
Independent Directors shall be entitled to designate a person to fill such
vacancies and such person shall be deemed to be an Independent Director for
purposes of this Agreement or, if no Independent Directors then remain, the
other directors shall designate three persons to fill such vacancies who shall
not be designees, stockholders, directors, officers, employees or affiliates of
the Parent or the Purchaser, and such persons shall be deemed to be Independent
Directors for purposes of this Agreement. Subject to applicable laws, the
Company shall take all action necessary to effect the election of directors as
provided in this Section 1.3(a), including mailing to its stockholders the
information required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder as part of the Schedule 14D-9. The Parent and the
Purchaser shall supply to the Company and be solely responsible for any
information with respect to them and their designees required by Section 14(f)
of the Exchange Act and Rule 14f-1 promulgated thereunder.
(b) Notwithstanding anything in this Agreement to the
contrary, subject to the terms of the Company's Certificate of Incorporation and
By-laws, in the event that the Purchaser's designees are appointed or elected as
Company Directors, after the acceptance for payment of Shares pursuant to the
Offer and prior to the Effective Time, the affirmative vote of a majority (or,
if there is only one or two Independent Directors, the single or unanimous vote,
as the case may be) of the Independent Directors (who shall act as an
independent committee of the Board of Directors for this purpose) shall be
required, and alone shall be sufficient, to (i) amend or terminate this
Agreement by the Company, (ii) exercise or waive any of the Company's rights or
remedies hereunder, (iii) extend the time for performance of the Parent's and
the Purchaser's respective obligations hereunder, or (iv) approve any other
action by the Company that the Independent Directors reasonably determine would
materially
-6-
13
adversely affect the interests of the stockholders of the Company (other than
the Parent, the Purchaser and their affiliates) with respect to the transactions
contemplated hereby. The Board of Directors shall not delegate any matter set
forth in this Section 1.3(b) to any committee of the Board.
(c) The Company hereby represents and warrants that the
Company's Directors, at a meeting duly called and held, has by unanimous vote,
acknowledging that such vote will be relied upon by the Parent and the Purchaser
in connection with the transactions contemplated hereby and, to the extent
permitted by applicable law, shall therefore be irrevocable and not subject to
amendment, repeal or modification, resolved in accordance with Section 5.13 of
the Agreement and Plan of Merger dated as of October 30, 1997, among the
Company, BILC Acquisition Corp, and ILC Technology Inc. (the "ILC Merger
Agreement"), that (i) prior to the Effective Time any of the Company's Directors
elected on behalf of the Purchaser pursuant to paragraph (a) above shall
constitute "Company Nominees" and "BEC Nominees" (as such terms are defined in
the ILC Merger Agreement) and (ii) from and after the Effective Time, all of the
Company's Directors nominated or designated for election by the Parent or the
Purchaser shall constitute "Company Nominees" and "BEC Nominees" pursuant to
Section 5.13 of the ILC Merger Agreement.
ARTICLE 2
THE MERGER
2.1 THE MERGER. At the Effective Time (as defined in Section 2.3),
in accordance with this Agreement and the Delaware Law, the Purchaser shall be
merged with and into the Company, the separate existence of the Purchaser shall
cease and the Company shall continue as the surviving corporation of the Merger.
The Company is hereinafter sometimes referred to as the "Surviving Corporation."
At the election of the Parent, any direct or indirect wholly owned subsidiary of
the Parent organized under the laws of a state of the United States may be
substituted for the Purchaser as a constituent corporation in the Merger for
purposes of this Section 2.1. In such event, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect the foregoing.
2.2 EFFECT OF THE MERGER. At the Effective Time, the Surviving
Corporation shall continue its corporate existence under the laws of the State
of Delaware and the Merger shall have the effects set forth in Section 259 of
the Delaware Law.
2.3 CONSUMMATION OF THE MERGER. As soon as is practicable after
the satisfaction or waiver of the conditions set forth in Article 7 hereof, but
not prior to January 11, 1999 unless requested otherwise by the Parent, the
parties hereto will cause the Merger to be consummated by delivering to the
Secretary of State of the State of Delaware a certificate of merger or a
certificate of ownership and merger (the "Certificate of Merger") in such form
or forms as may be required by, and executed and acknowledged in accordance
with, the relevant provisions of the Delaware Law, and shall make all other
filings and recordings
-7-
14
required by the Delaware Law in connection with the Merger. The Merger shall
become effective at the time that the Secretary of State of the State of
Delaware files the Certificate of Merger in accordance with the relevant
provisions of the Delaware Law (or at such later time, which shall be as soon as
reasonably practicable, specified as the effective time in the Certificate of
Merger). The term "Effective Time" shall mean the date and time of the filing of
the Certificate of Merger by the Secretary of State of the State of Delaware (or
such later time, which shall be as soon as reasonably practicable, as may be
specified in the Certificate of Merger).
2.4 CERTIFICATE OF INCORPORATION; BY-LAWS; DIRECTORS AND OFFICERS.
The Certificate of Incorporation and By-laws of the Purchaser as in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation and By-laws of the Surviving Corporation until thereafter amended
as provided under the Delaware Law, provided that at the Effective Time (a)
Article I of the Certificate of Incorporation of the Surviving Corporation shall
be amended to read as follows: "The name of the corporation is LUMEN
TECHNOLOGIES, INC.", (b) the indemnification provisions set forth in the
Certificate of Incorporation and By-laws of the Surviving Corporation shall be
restated to conform to the indemnification provisions set forth in the
Certificate of Incorporation and By-laws, respectively, of the Company, and (c)
the title of the By-laws of the Surviving Corporation shall be amended to read
as follows: "By-laws LUMEN TECHNOLOGIES, INC." The directors of the Purchaser
immediately prior to the Effective Time will be the initial directors of the
Surviving Corporation, and the officers of the Company immediately prior to the
Effective Time will be the initial officers of the Surviving Corporation, in
each case until their successors are elected and qualified.
2.5 CONVERSION OF SECURITIES; PAYMENT OF MERGER CONSIDERATION.
(a) At the Effective Time, by virtue of the Merger and
without any action on the part of the Purchaser, the Company, the Surviving
Corporation or the holder of any of the following securities:
(i) subject to Section 2.5(b), each Share issued
and outstanding immediately prior to the Effective Time (other
than Shares to be cancelled pursuant to clause (ii) below and
any Dissenting Shares (as defined in Section 2.5(b))) shall be
cancelled and extinguished and be converted into and become a
right to receive $7.75 net in cash per Share (or any such
higher price per Share as may be paid in the Offer) without
any interest thereon (the "Merger Consideration");
(ii) each Share that is owned immediately prior
to the Effective Time by the Parent, the Purchaser or the
Company or any direct or indirect subsidiary of the Parent,
the Purchaser or the Company, including all Shares held by the
Company as "treasury stock," shall be cancelled and retired,
and no payment shall be made with respect thereto; and
-8-
15
(iii) each share of the Purchaser's capital stock
issued and outstanding immediately prior to the Effective Time
shall be converted into and become one validly issued, fully
paid and nonassessable share of the same class of capital
stock of the Surviving Corporation.
(b) (i) If, pursuant to the Delaware Law, an
affirmative vote of the Company's stockholders is required to approve the
Merger, then notwithstanding Section 2.5(a), Shares outstanding immediately
prior to the Effective Time and held by a holder who, acting in accordance with
Section 262 of the Delaware Law, (A) prior to the meeting at which the Company's
stockholders vote to approve the Merger, has delivered to the Company written
notice of such holder's intention to demand payment of the fair value of his
Shares if the Merger is effectuated and (B) has not voted in favor of the Merger
or consented thereto in writing ("Dissenting Shares"), shall not be converted
into a right to receive the Merger Consideration, unless such holder withdraws
or otherwise loses his right to demand payment for his Shares. If after the
Effective Time such holder withdraws or loses his right to demand payment for
his Shares, such Shares shall be treated as if they had been converted as of the
Effective Time into the right to receive the Merger Consideration payable in
respect of such Shares pursuant to Section 2.5(a)(i).
(ii) If, after consummation of the Offer, the
Purchaser is not required under the Delaware Law to obtain the consent of the
other stockholders of the Company in order to effect the Merger and effects the
Merger without holding a meeting of the stockholders, then, after consummating
the Merger, the Purchaser will provide notice, as required by the Delaware Law,
that it has consummated the Merger and that stockholders are entitled to
exercise their dissenters' rights. Shares of any stockholders who thereafter
fail to perfect or preserve their dissenter's rights under the Delaware Law will
be treated as if such Shares had been converted as of the Effective Time into
the right to receive the Merger Consideration payable in respect of such Shares
pursuant to Section 2.5(a)(i).
(iii) The Company shall give the Parent and the
Purchaser prompt notice of any demands for payment, or notices of intent to
demand payment, received by the Company with respect to Shares, and the Parent
and the Purchaser shall have the right to participate in and direct all
negotiations and proceedings with respect to such demands. The Company shall
not, except with the prior written consent of the Parent and the Purchaser or as
otherwise required by law, make any payment with respect to, or settle, or offer
to settle, any such demands.
2.6 EXCHANGE OF CERTIFICATES.
(a) Upon the Effective Time, a bank or trust company to
be designated by the Parent (the "Payment Agent") shall act as payment agent in
effecting the exchange, for the Merger Consideration multiplied by the number of
Shares formerly represented thereby, of certificates (the "Certificates") that,
prior to the Effective Time, represented Shares entitled to payment pursuant to
Section 2.5(a)(i). Upon the Effective Time, the Parent shall, or shall
-9-
16
cause the Purchaser to, deposit with the Payment Agent in trust for the benefit
of the holders of Certificates, as needed to pay for surrendered Shares as
provided in this Section 2.6, within such time as is necessary for the Payment
Agent to make the requisite payments for Shares, immediately available funds in
an aggregate amount (the "Payment Fund") equal to the product of the Merger
Consideration multiplied by the number of Shares entitled to payment pursuant to
Section 2.5(a)(i). Promptly after the Effective Time, the Parent or the
Purchaser shall cause to be mailed to each record holder of Certificates that
immediately prior to the Effective Time represented Shares a form of letter of
transmittal and instructions for use in surrendering such Certificates and
receiving the Merger Consideration therefor. Upon the surrender of each such
Certificate together with a duly completed and executed letter of transmittal,
the Payment Agent shall promptly pay the holder of such Certificate the Merger
Consideration multiplied by the number of Shares formerly represented by such
Certificate, without any interest thereon, in exchange therefor, and such
Certificate shall forthwith be cancelled. Until so surrendered and exchanged,
each such Certificate (other than Certificates representing Shares held by the
Parent, the Purchaser or the Company or any direct or indirect subsidiary of the
Parent, the Purchaser or the Company or Dissenting Shares) shall represent
solely the right to receive the Merger Consideration multiplied by the number of
Shares represented by such Certificate, without any interest thereon. If any
cash is to be paid to a person other than the holder in whose name the
Certificate representing Shares surrendered in exchange therefor is registered,
it shall be a condition to such payment that the person requesting such payment
shall pay to the Payment Agent any transfer or other taxes required by reason of
the payment of such cash to a person other than the registered holder of the
Certificate surrendered, or such person shall establish to the satisfaction of
the Payment Agent that such tax has been paid or is not applicable.
Notwithstanding the foregoing, neither the Payment Agent nor any party hereto
shall be liable to a holder of Shares for any Merger Consideration delivered to
a public official pursuant to applicable abandoned property, escheat and similar
laws.
(b) To the extent not immediately required for payment
for surrendered Shares as provided in Section 2.6(a), the Payment Fund shall be
invested by the Payment Agent, as directed by the Parent (so long as such
directions do not impair the rights of holders of Shares or the ability of the
Payment Agent to timely pay the Merger Consideration), in direct obligations of
the United States of America, obligations for which the full faith and credit of
the United States of America is pledged to provide for the payment of principal
and interest, commercial paper rated of the highest quality by Xxxxx'x Investors
Services, Inc. or Standard & Poor's Corporation, or certificates of deposit
issued by a commercial bank having at least $300,000,000 in assets (a "Qualified
Commercial Bank"); and any net earnings with respect thereto shall be paid to
the Parent as and when requested by the Parent.
(c) The Payment Agent shall, pursuant to irrevocable
instructions, make the payments referred to in Section 2.5(a)(i) out of the
Payment Fund. Promptly following the date that is six months after the date of
the Effective Time, the Payment Agent shall deliver to the Parent all cash,
certificates and other documents in its possession relating to the
-10-
17
transactions described in this Agreement, and the Payment Agent's duties shall
terminate. Thereafter, each holder of a Certificate formerly representing a
Share may surrender such Certificate to the Surviving Corporation or the Parent
and (subject to applicable abandoned property, escheat and similar laws) receive
in exchange therefor the Merger Consideration, without any interest thereon, but
shall have no greater rights against the Surviving Corporation or the Parent
than may be accorded to general creditors of the Surviving Corporation or the
Parent under applicable law.
(d) After the Effective Time, there shall be no transfers
on the stock transfer books of the Surviving Corporation of any Shares. If,
after the Effective Time, Certificates formerly representing Shares are
presented to the Surviving Corporation or the Payment Agent, they shall be
cancelled and exchanged for the Merger Consideration, as provided in this
Article 2, subject to applicable law in the case of Dissenting Shares.
(e) From and after the Effective Time, holders of
Certificates theretofore evidencing Shares shall cease to have any rights as
stockholders of the Company, except as provided herein or by law.
(f) In the event any Certificate evidencing Shares shall
have been lost, stolen or destroyed, the Paying Agent shall pay to such holder
the Merger Consideration required pursuant to Section 2.5(a)(i), in exchange for
such lost, stolen or destroyed Certificates, upon the making of an affidavit of
that fact by the holder thereof with such assurances as the Parent, in its
discretion and as a condition precedent to the payment of the Merger
Consideration, may reasonably require of the holder of such lost, stolen or
destroyed Certificates.
(g) The Parent and the Surviving Corporation shall be
entitled to deduct and withhold from the Merger Consideration otherwise payable
pursuant to this Agreement such amounts as may be required to be deducted and
withheld with respect to the making of such payment under the Code, or under any
applicable law.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND THE PURCHASER
The Parent and the Purchaser each represents and warrants to the
Company as follows:
3.1 ORGANIZATION AND QUALIFICATION. Each of the Parent and the
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation and has all requisite corporate
power and authority to carry on its business as it is now being conducted. Each
of the Parent and the Purchaser is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or leased or the nature of its activities makes such
qualification necessary, except for failures to be so qualified or in good
standing which would not, in the
-11-
18
aggregate, materially impair the ability of the Parent or the Purchaser to
perform its obligations hereunder.
3.2 AUTHORITY. Each of the Parent and the Purchaser has all
requisite corporate power and authority to enter into this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the Parent and the
Purchaser and the consummation by the Parent and the Purchaser of the
transactions contemplated hereby have been duly authorized by the respective
Boards of Directors of the Parent and the Purchaser and by the Parent as the
sole stockholder of the Purchaser and no other corporate proceedings on the part
of the Parent or the Purchaser are necessary to authorize the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the Parent and
the Purchaser and, assuming this Agreement constitutes a valid and binding
obligation of the other parties hereto, constitutes a valid and binding
obligation of each of them, enforceable against each of them in accordance with
its terms, subject to the effect of any applicable bankruptcy, moratorium,
insolvency, reorganization or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general principles of equity
which may limit the availability of remedies (whether in a proceeding at law or
in equity).
3.3 COMPLIANCE.
(a) Neither the execution and delivery of this Agreement
by the Parent and the Purchaser, nor the consummation by them of the
transactions contemplated hereby, nor compliance by them with any of the
provisions hereof will (i) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event that, with notice or lapse of
time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance or payment required by, or result in a right
of termination or acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
the Parent or the Purchaser or any other direct or indirect subsidiary of the
Parent under, any of the terms, conditions or provisions of (x) the charter
documents or by-laws of the Parent or the Purchaser or any other direct or
indirect subsidiary of the Parent or (y) any note, bond, mortgage, indenture,
deed of trust, license, lease, distribution agreement, joint venture agreement
or any other agreement or instrument or obligation to which the Parent or the
Purchaser or any other direct or indirect subsidiary of the Parent is a party,
or to which any of them, or any of their respective properties or assets, may be
subject, or (ii) subject to compliance with the statutes and regulations
referred to in the next paragraph, violate any judgment, ruling, order, writ,
injunction, decree, statute, rule or regulation applicable to the Parent or the
Purchaser or any other direct or indirect subsidiary of the Parent or any of
their respective properties or assets; except, in the case of each of clause (i)
and (ii) above, for such violations, conflicts, breaches, defaults,
terminations, accelerations or creations of liens, security interests, charges
or encumbrances that, in the aggregate, would not materially impair the ability
of the Parent and the Purchaser to perform their obligations hereunder.
-12-
19
(b) Other than in connection with or in compliance with
the provisions of the Delaware Law, the Exchange Act, the "takeover" or "blue
sky" laws of various states and the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976 and the rules and regulations thereunder (the "Xxxx-Xxxxx-Xxxxxx Act"),
and except for any notices, filings, authorizations, consents or approvals which
are required because of the regulatory status of the Company and its
Subsidiaries (as defined in Section 4.2) or facts specifically pertaining to
them, no notice to, filing with, or authorization, consent or approval of, any
domestic or foreign public body or authority is necessary for the consummation
by the Parent or the Purchaser of the transactions contemplated by this
Agreement, unless the failure to give such notices, make such filings, or obtain
such authorizations, consents or approvals would not, in the aggregate,
materially impair the ability of the Parent and the Purchaser to perform their
obligations hereunder.
3.4 INFORMATION PROVIDED. Any written information provided by or
on behalf of the Parent or the Purchaser for inclusion in the Schedule 14D-9
(including the Schedule 14f that is a part thereof), on the date the Schedule
14D-9 is filed with the Commission, and on the date the Schedule 14D-9 is first
published, sent or given to stockholders of the Company, will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
3.5 INTERIM OPERATIONS OF THE PURCHASER. The Purchaser was formed
solely for the purpose of engaging in the transactions contemplated by this
Agreement, has not engaged in any other business activities and has conducted
its operations only as contemplated hereby.
3.6 FINANCING. At the expiration of the Offer and at the Effective
Time, the Parent and the Purchaser will have available all the funds necessary
to purchase all the Shares pursuant to the Offer and the Merger and to pay all
fees and expenses payable by the Parent or the Purchaser related to the
transactions contemplated by this Agreement.
3.7 BROKERS. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the Offer
or the Merger based upon arrangements made by or on behalf of the Parent, the
Purchaser or any of their respective subsidiaries or affiliates.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Disclosure Schedule previously delivered by
the Company to the Parent (the "Disclosure Schedule"), the Company represents
and warrants to the Parent and the Purchaser as follows:
-13-
20
4.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to carry
on its business as it is now being conducted. The Company is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or leased or the nature
of its activities makes such qualification necessary, except for failures to be
so qualified or in good standing that, in the aggregate, have not resulted in,
and could not reasonably be expected to result in, a Material Adverse Effect.
For purposes of this Agreement, "Material Adverse Effect" means a material
adverse effect on the condition (financial or other), results of operations,
stockholders' equity, business, assets, properties, liabilities, capitalization
or operations of the Company and its Subsidiaries taken as a whole or prevents
or materially interferes with the ability of the Company to perform its
obligations hereunder or to consummate the transactions contemplated by this
Agreement. Copies of the Certificate of Incorporation and By-Laws of the Company
have heretofore been delivered to the Parent and such copies are accurate and
complete. The Company's original Certificate of Incorporation contains a
provision expressly electing not to be governed by Section 203 of the Delaware
Law and such election is in full force and effect such that Section 203 of the
Delaware Law is inapplicable to any of the transactions contemplated by this
Agreement. The resolution of the Company's Directors referred to in Section
1.3(c) is in full force and effect and has not been amended or modified.
4.2 SUBSIDIARIES.
(a) The only direct or indirect subsidiaries of the
Company (each a "Subsidiary" and collectively, the "Subsidiaries") are those
listed in the Disclosure Schedule.
(b) Each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority to carry on
its business as it is now being conducted. Each Subsidiary is duly qualified as
a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or leased or the nature
of its activities makes such qualification necessary, except for failures to be
so qualified or in good standing that, in the aggregate, have not resulted in,
and could not reasonably be expected to result in, a Material Adverse Effect.
Copies of the charter documents and by-laws of each Subsidiary have heretofore
been made available to the Parent and such copies are accurate and complete.
(c) Except for directors' qualifying shares, if any (all
of which the Company has the power to cause to be transferred for no or nominal
consideration to the Purchaser or the Purchaser's designee), the Company is,
directly or indirectly, the record and beneficial owner of all of the
outstanding shares of capital stock in each of the Subsidiaries, there are no
irrevocable proxies with respect to such shares, and no securities of any of the
Subsidiaries are or may become required to be issued by reason of any options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or
-14-
21
rights convertible into or exchangeable for, shares of any capital stock of any
Subsidiary, and there are no contracts, commitments, understandings or
arrangements by which any Subsidiary is bound to issue additional shares or
purchase shares of its capital stock or securities convertible into or
exchangeable for such shares. All of such shares so owned by the Company are
validly issued, fully paid and nonassessable and are owned by the Company free
and clear of any claim, lien, encumbrance or agreement of any kind with respect
thereto.
(d) Except for the Subsidiaries, the Company does not
directly or indirectly own any equity or similar or other interest in, or any
interest convertible into or exchangeable or exercisable for any equity or
similar or other interest in, any other corporation, partnership, joint venture,
limited liability company or other business association or entity, other than
any interests with an individual value of less than $250,000 and an aggregate
value of less than $1,000,000 and which do not require any future payments or
impose any other liabilities or obligations on the part of the Company or any of
its Subsidiaries.
4.3 CAPITALIZATION.
(a) The authorized capital stock of the Company consists
of 50,000,000 shares of Common Stock, $.01 par value, and 500,000 shares of
Preferred Stock, $1.00 par value (the "Preferred Stock"), of which 10,000 shares
of Preferred Stock are designated as Series A Preferred Stock and 490,000 shares
are undesignated. As of the date of this Agreement (except in the case of clause
(iii) below, which is stated as of the day prior to the date of this Agreement):
(i) 20,710,606 Shares are issued and 20,209,606
Shares are issued and outstanding;
(ii) 501,000 Shares are held in the treasury of
the Company;
(iii) 3,613,325 Shares are reserved for issuance
pursuant to outstanding Options (the
"Company Options") heretofore granted under
the Company's Amended and Restated 1996
Stock Incentive Plan (the "Option Plan");
(iv) no Shares are reserved for issuance in
connection with the Company's 1996 Employee
Stock Purchase Plan (the "ESPP");
(v) 1,252,835 Shares are reserved for issuance
upon conversion, at the conversion price of
$9.89 per share, of the Company's 8%
Convertible Notes due 2002 (the "Convertible
Notes") (calculated based on the outstanding
principal under the Convertible Notes and
the Conversion Price in effect as of the
date of this Agreement) and $2,774,285 is
the accrued interest payable under the
Convertible Notes; and
-15-
22
(vi) no shares of Preferred Stock are issued and
outstanding.
(b) All outstanding Shares are, and all Shares which may
be issued will be, when issued in accordance with the terms of the agreements,
plans or other documents governing their issuance, duly authorized, validly
issued, fully paid and nonassessable and not subject to or issued in violation
of any purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the Delaware Law,
the Certificate of Incorporation or the By-laws of the Company or any contract,
agreement, arrangement of understanding to which the Company is a party or
otherwise bound.
(c) Except as set forth above in this Section 4.3, there
are no other shares of capital stock or other securities of the Company
outstanding and no other outstanding options, warrants, rights to subscribe to
(including any preemptive rights), calls or commitments of any character
whatsoever to which the Company is a party or may be bound requiring the
issuance, transfer or sale of any shares of capital stock or other securities of
the Company or any securities or rights convertible into or exchangeable or
exercisable for any such shares or securities, and there are no contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to issue additional shares of its capital stock or options,
warrants or rights to purchase or acquire any additional shares of its capital
stock or securities convertible into or exchangeable or exercisable for any such
shares. As of the date of this Agreement, no awards are outstanding under the
Option Plans other than the Company Options listed on the Disclosure Schedule,
no options are outstanding under the ESPP and no other stock appreciation
rights, phantom stock, performance based rights or similar such equity rights or
obligations were outstanding. The Disclosure Schedule sets forth with respect to
each Company Option, the name of the option holder, the exercise price, the date
of grant, vesting schedule and expiration date and with respect to the Option
Plan, the number of Shares or Company Options reserved for issuance or grant and
actually issued or granted under the Option Plan and the weighted average
exercise price of all Company Options outstanding under the Option Plan as of
the date hereof. Copies of the Option Plan, the ESPP and the Indenture governing
the Convertible Notes (including the form of Convertible Notes) have heretofore
been made available to the Parent and such copies are accurate and complete.
(d) There are no outstanding contractual obligations of
the Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of its Subsidiaries.
Neither the Company nor any of it Subsidiaries is a party to any voting
agreement with respect to the voting of any of its securities. To the best of
the Company's knowledge, none of the Shares is subject to any voting trust,
transfer restrictions or other similar arrangements, except for vesting
arrangements pursuant to agreements with the Company or restrictions on transfer
imposed by the Securities Act of 1933, as amended (the "Securities Act"), and
state securities laws.
-16-
23
4.4 AUTHORITY. The Company has all requisite corporate power and
authority to enter into this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by the Company's Directors and,
except for the approval and adoption of this Agreement by the holders of a
majority of the Shares (if required under the Delaware Law), no other corporate
proceedings on the part of the Company are necessary to authorize the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the Company and,
assuming this Agreement constitutes a valid and binding obligation of the other
parties hereto, constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to the
effect of any applicable bankruptcy, moratorium, insolvency, reorganization or
other similar law affecting the enforceability of creditors' rights generally
and to the effect of general principles of equity which may limit the
availability of remedies (whether in a proceeding at law or in equity).
4.5 COMPLIANCE.
(a) Neither the execution and delivery of this Agreement
by the Company, nor the consummation by the Company of the transactions
contemplated hereby, nor compliance by the Company with any of the provisions
hereof will (i) violate, conflict with, or result in a breach of any provision
of, or constitute a default (or an event that, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance or payment required by, or result in a right of
termination or acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
the Company or any of its Subsidiaries under, any of the terms, conditions or
provisions of (x) the charter documents or by-laws of the Company or any of its
Subsidiaries, or (y) any note, bond, mortgage, indenture, deed of trust,
license, lease, distribution agreement, joint venture agreement or any other
agreement or instrument or obligation to which the Company or any of its
Subsidiaries is a party, or to which any of them or any of their respective
properties or assets, may be subject, or (ii) subject to compliance with the
statutes and regulations referred to in the next paragraph, violate any
judgment, ruling, order, writ, injunction, decree, statute, rule or regulation
applicable to the Company or any of its Subsidiaries or any of their respective
properties or assets; except, in the case of each of clauses (i)(y) and (ii)
above, for such violations, conflicts, breaches, defaults, terminations,
accelerations or creations of liens, security interests, charges or encumbrances
that, in the aggregate, have not resulted in, and could not reasonably be
expected to result in, a Material Adverse Effect.
(b) Other than in connection with or in compliance with
the provisions of the Delaware Law, the Exchange Act, the "takeover" or "blue
sky" laws of various states and the Xxxx-Xxxxx-Xxxxxx Act, no notice to, filing
with, or authorization, consent or approval of, any domestic or foreign public
body or authority is necessary for the consummation by the Company of the
transactions contemplated by this Agreement, unless the failure to give such
-17-
24
notices, make such filings, or obtain such authorizations, consents or
approvals, in the aggregate, has not resulted in, and could not reasonably be
expected to result in, a Material Adverse Effect.
4.6 COMMISSION FILINGS; FINANCIAL STATEMENTS; INFORMATION
PROVIDED.
(a) The Company has filed with the Commission all
required reports, schedules, forms, proxy and information statements,
registration statements and other documents (including exhibits) required to be
filed by it since February 14, 1996 (the "Commission Filings"). The Commission
Filings, all of which were filed on a timely basis, (i) complied, in all
material respects, with the applicable requirements of the Securities Act and
the Exchange Act and the rules and regulations thereunder, (ii) did not at the
time they were filed contain any untrue statement of material fact, and (iii)
did not at the time they were filed omit to state a material fact necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading.
(b) Each of the audited consolidated financial statements and
unaudited interim consolidated financial statements (including any related notes
or schedules) included in the Commission Filings complied as to form in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto, was prepared in accordance
with generally accepted accounting principles applied on a consistent basis,
except as may be indicated therein or in the notes or schedules thereto, and
fairly present, in all material respects, the consolidated financial position of
the Company and its Subsidiaries as at the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended, subject,
in the case of the unaudited interim financial statements, to normal year-end
audit adjustments and the absence of complete notes.
(c) The unaudited consolidated financial information with respect
to the quarter ended September 30, 1998 (including any related notes or
schedules) (the "September 30 Financial Information") included in the Disclosure
Schedule was prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as may be indicated therein or
in the notes or schedules thereto, and fairly presents, in all material
respects, the consolidated financial position of the Company and its
Subsidiaries as at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended, subject to normal year-end
audit adjustments and the absence of complete notes.
(d) Any written information provided by or on behalf of the
Company which is included in the Schedule 14D-1 or the Offer Documents, on the
date the Schedule 14D-1 is filed with the Commission and on the date the Offer
Documents are first published, sent or given to Stockholders of the Company, as
the case may be, will comply in all material respects with the provisions of
applicable securities laws and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or
-18-
25
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
4.7 NO UNDISCLOSED LIABILITIES. Except as specifically and
individually disclosed in the Commission Filings, the Disclosure Schedule or the
September 30 Financial Information, neither the Company nor any Subsidiary has
any liabilities or obligations of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, except for (a)
liabilities and obligations incurred in the ordinary course of business
consistent with past practice since September 30, 1998, and (b) liabilities and
obligations that, in the aggregate, have not resulted in, and could not
reasonably be expected to result in, a Material Adverse Effect.
4.8 CHANGES. Except as expressly contemplated by this Agreement,
set forth in the Commission Filings or reflected in the September 30 Financial
Information, since September 30, 1998, the Company and the Subsidiaries have
conducted their respective businesses only in the ordinary and usual course
consistent with past practice, and none of the following has occurred:
(a) any adverse change in the condition (financial or
other), results of operations, stockholders' equity, business, assets,
properties, liabilities, capitalization or operations of the Company and its
Subsidiaries, that has resulted in, or could reasonably be expected to result
in, a Material Adverse Effect, except as to matters which are attributable to
the announcement or performance of this Agreement and the transactions
contemplated hereby;
(b) any damage, destruction or loss, whether or not
covered by insurance, that has resulted in, or could reasonably be expected to
result in, a Material Adverse Effect;
(c) any reevaluation by the Company or any of its
Subsidiaries of any of their respective assets, including writing down the value
of inventory or writing off notes or accounts receivables other than in the
ordinary course of business consistent with past practice, that has resulted in,
or could reasonably be expected to result in, a Material Adverse Effect;
(d) any action or event listed in Section 5.1; or
(e) any agreement by the Company to do any of the things
described in the preceding clauses (a) through (d) other than as expressly
contemplated or provided for herein.
4.9 CONTRACTS.
(a) Except as identified on the exhibit indices of the
Commission Filings, there are no contracts or agreements that are material
contracts (as defined in Item 601(b)(10) of Regulation S-K) with respect to the
Company and its Subsidiaries. Neither the Company
-19-
26
nor any of its Subsidiaries 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 or both, would cause such a violation of or default under) any material
lease, permit, concession, franchise, license or any other contract or agreement
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, in the aggregate, have not
resulted in, or could not reasonably be expected to result in, a Material
Adverse Effect.
(b) Section 4.9(b) of the Disclosure Schedule sets forth
a complete list of each contract or agreement to which the Company or any
Subsidiary is a party or bound (A) with any affiliate of the Company (other than
any Subsidiary which is a direct or indirect wholly owned subsidiary of the
Company), other than any agreements which are or have been fully performed and
under which neither the Company nor any Subsidiary has any continuing liability
or obligation, or (B) that includes any non-competition or similar provision
imposing any restrictions or undertakings on the Company or any Subsidiary,
other than any non-competition or similar provision relating solely to the eye
wear and/or lens grinding business. Copies of all the agreements, contracts and
arrangements set forth in Section 4.9(b) of the Disclosure Schedule have
heretofore been made available to the Parent and such copies are accurate and
complete.
4.10 TRANSACTIONS WITH AFFILIATES. Except as set forth in the
Commission Filings, since December 28, 1995, neither the Company nor any of its
Subsidiaries has entered into any transaction with any director, officer or
other affiliate of the Company or any Subsidiary or any transaction which would
be subject to disclosure pursuant to Item 404 of Regulation S-K.
4.11 EMPLOYEE BENEFITS AND CONTRACTS. Except as set forth in
Schedule 4.11(b) of the Disclosure Schedule:
(a) Neither the Company nor any ERISA Affiliate maintains
or contributes to, or has any material obligation under, any Employee Benefit
Plans other than those identified on Schedule 4.11(b) of the Disclosure
Schedule. For the purposes of this Section 4.11, "ERISA" means the Employee
Retirement Income Security Act of 1974, as amended from time to time, and any
successor statute and all rules and regulations promulgated thereunder; "ERISA
Affiliate," as applied to the Company, means any person or trade or business
which is a member of a group which is under common control with the Company, who
together with the Company, is treated as a single employer within the meaning of
Section 414(b) and (c) of the Code; and "Employee Benefit Plan" means any
employee benefit plan within the meaning of Section 3(3) of ERISA which (a) is
maintained for employees of the Company or has been assumed by the Company in
connection with any acquisition or any of its ERISA Affiliates or (b) has at any
time since October 16, 1992 been maintained for the employees of the Company or
any current or former ERISA Affiliate.
(b) The Company and each ERISA Affiliate is in compliance
with all applicable provisions of ERISA and the regulations and published
interpretations thereunder
-20-
27
and in compliance with all Foreign Benefit Laws with respect to all Employee
Benefit Plans, except for failures to comply that in the aggregate have not
resulted in, and could not reasonably be expected to result in, a Material
Adverse Effect and except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet expired.
Each Employee Benefit Plan that is intended to be qualified under Section 401(a)
of the Code has been determined by the Internal Revenue Service to be so
qualified, and each trust related to such plan has been determined to be exempt
under Section 501(a) of the Code. No material liability has been incurred by the
Company or any ERISA Affiliate which remains unsatisfied for any taxes or
penalties with respect to any Employee Benefit Plan. For the purposes of this
Section 4.11, "Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign nation or any
province, state, territory, protectorate or other political subdivision thereof
regulating, relating to, or imposing liability or standards of conduct
concerning, any Employee Benefit Plan.
(c) Neither the Company nor any affiliate is a party to
any collective bargaining agreement. Neither the Company nor any affiliate has
ever (i) maintained an Employee Benefit Plan subject to Section 412 of the Code
or Title IV of ERISA, or (ii) had an obligation to contribute to a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA.
(d) Neither the Company nor any ERISA Affiliate has
engaged in a nonexempt prohibited transaction described in Section 406 of ERISA
or Section 4975 of the Code.
(e) There are no unfunded obligations under any Employee
Benefit Plan of the Company or any affiliate providing benefits after
termination of employment to any employee or former employee, including but not
limited to retiree health coverage and deferred compensation but excluding
continuation of health coverage required to be continued under Section 4980(B)
of the Code. Each Employee Benefit Plan of the Company, any Subsidiary or any of
their respective affiliates may be amended or terminated by the Company, such
Subsidiary or such affiliate without the consent or approval of any other person
and without any termination fees, market value adjustments, surrender charges or
other costs. There is no employment agreement, Employee Benefit Plan, stock
option plan, stock appreciation right plan, restricted stock plan, stock
purchase plan, or severance benefit plan of the Company or any affiliate, any of
the benefits of which will be increased, or the vesting of the benefits of which
will be accelerated by the occurrence of any of the transactions contemplated by
this Agreement or the benefits under which will be due as a result of or
calculated on the basis of the transactions contemplated by this Agreement.
-21-
28
(f) No material proceeding, claim, lawsuit and/or
investigation exists or to the best knowledge of the Company after due inquiry,
is threatened concerning or involving any Employee Benefit Plan.
4.12 PROPERTIES AND LIENS.
(a) All real property owned or leased by the Company or
any Subsidiary is listed on the Disclosure Schedule, other than real property
with a cost or fair market value of less than $10,000.
(b) Each of the Company and its Subsidiaries has good and
valid title to, or valid leasehold interests in or valid rights to, all of its
material tangible properties and assets (personal and real) reflected in the
balance sheet for the period ended September 30, 1998 included in the September
30 Financial Information, except for such as have been disposed of in the
ordinary course of business since September 30, 1998. All such material tangible
assets and properties, other than assets and properties in which the Company or
any Subsidiary has a leasehold interest, are free and clear of all mortgages,
security interests, pledges, liens and encumbrances ("Liens"), except for Liens
that, in the aggregate, do not materially interfere with the ability of the
Company and its Subsidiaries to conduct their business as currently conducted
and have not resulted in, and could not reasonably be expected to result in, a
Material Adverse Effect.
(c) Each of the Company and each Subsidiary has complied
in all material respects with the term of all material leases for real or
personal property to which it is a party, and all such leases are in full force
and effect. Each of the Company and each Subsidiary enjoys peaceful and
undisturbed possession under all such material leases, except for failures to do
so that, in the aggregate, have not resulted in, and could not reasonably be
expected to result in, a Material Adverse Effect.
(d) The properties and assets of the Company and its
Subsidiaries, taken as a whole, are free from material defects, have been
maintained in accordance with normal industry practice, are in good operating
condition and repair (subject to normal wear and tear) and are suitable for the
purposes for which they are presently used.
4.13 ENVIRONMENTAL MATTERS.
(a) The Company and the Subsidiaries are in compliance with
and have complied with all applicable Environmental Laws (as defined below),
except for failures to comply that, in the aggregate, have not resulted in, and
could not reasonably be expected to result in, a Material Adverse Effect. There
is no pending or, to the best knowledge of the Company, threatened civil or
criminal litigation, written notice of violation, formal administrative
proceedings or investigations, inquiries or information requests by any court,
arbitration tribunal, administrative agency or commission or other governmental
or regulatory authority or agency, domestic, foreign or supranational (a
"Governmental Entity"), relating to
-22-
29
any Environmental Law involving the Company or any of its Subsidiaries the
adverse resolution of which would, either singularly or in the aggregate, result
in, or could reasonably be expected to result in, a Material Adverse Effect. For
purposes of this Agreement, "Environmental Law" means any foreign, federal,
state, local or supranational law, statute, rule or regulation or the common law
relating to the environment or occupational health and safety, including without
limitation, any statute, regulation or order pertaining to (i) treatment,
storage, disposal, generation or transportation of industrial, toxic or
hazardous substances or solid or hazardous waste; (ii) air, water and noise
pollution; (iii) groundwater and soil contamination; (iv) the release or
threatened release into the environment of industrial, toxic or hazardous
substances, or solid or hazardous waste, including emissions, discharges,
injections, spills, escapes or dumping of pollutants, contaminants or chemicals;
(v) the protection of wild life, marine sanctuaries and wetlands, including all
endangered and threatened species; (vi) underground and other storage tanks or
vessels, abandoned, disposed or discarded barrels, containers and other closed
receptacles; (vii) health and safety of employees and the public; and (viii)
manufacture, processing, use, distribution, treatment, storage, disposal,
transportation or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or oil or petroleum products or solid or hazardous
waste. As used in this Section 4.13, the terms "release" and "environment" shall
have the meaning set forth in the federal Comprehensive Environmental
Compensation, Liability and Response Act of 1980 ("CERCLA"). As used above, the
phrase "investigation, inquiry or information request" includes, but is not
limited to, any Notice of Responsibility or Section 104(e) Information Request
issued pursuant to CERCLA or to any similar state law addressing the
investigation and/or remediation of any environmental contamination.
(b) There have been no releases of any Materials of
Environmental Concern (as defined below) into the environment by the Company or
any of its Subsidiaries, or, to the best knowledge of the Company, by any other
party at any parcel of real property or any facility formerly or currently
owned, operated or controlled by the Company or any of its Subsidiaries that, in
the aggregate, have resulted in, or could reasonably be expected to result in, a
Material Adverse Effect. With respect to any such releases of Materials of
Environmental Concern, the Company has given all notices required to be given by
the Company or any of its Subsidiaries to Governmental Entities. The Company has
no actual knowledge of any releases of Materials of Environmental Concern at
parcels of real property or facilities other than those owned, operated or
controlled by the Company or any of its Subsidiaries that, in the aggregate,
have, or could reasonably be expected to have, a material impact on the real
property or facilities owned, operated or controlled by the Company or any of
its Subsidiaries or that have resulted in, or could reasonably be expected to
result in, a Material Adverse Effect. For purposes of this Agreement, "Materials
of Environmental Concern" means any chemicals, pollutants or contaminants,
hazardous substances (as such term is defined under CERCLA), solid wastes and
hazardous wastes (as such terms are defined under the federal Resources
Conservation and Recovery Act), toxic materials, oil or petroleum and petroleum
products, or any other material subject to regulation under any Environmental
Law.
-23-
30
(c) Set forth in the Disclosure Schedule is a list of all
material environmental reports, investigations and audits conducted by or on
behalf of the Company or any of its Subsidiaries or, to the best knowledge of
the Company, conducted by or on behalf of a third party (whether done at the
initiative of the Company or directed by a Governmental Entity or other third
party) issued or conducted during the past five years relating to premises
currently owned or operated by the Company or any of its Subsidiaries. Copies of
each such report, or the results of each such investigation or audit, have
heretofore been made available to the Parent and such copies are accurate and
complete, except that the Company makes no representation as to the accuracy or
completeness of any reports prepared by or for third parties.
(d) To the best knowledge of the Company, there is no
material environmental liability of any solid or hazardous waste transporter or
treatment, storage or disposal facility that has been utilized by the Company or
any of its Subsidiaries, which have resulted in, or could reasonably be expected
to result in, either singularly or in the aggregate, a Material Adverse Effect.
(e) The Company and the Subsidiaries have all requisite
licenses, permits, certificates, permits-by-rule and approvals under the
Environmental Laws from Governmental Entities necessary to conduct its business
and operate its assets (collectively, the "Environmental Permits"), except for
such licenses, permits, certificates, permits-by-rule and approvals the absence
of which, in the aggregate, have not resulted in, and could not reasonably be
expected to result in, a Material Adverse Effect. No Environmental Permit will
cease to be effective as a result of the consummation of transactions
contemplated by this Agreement. The Environmental Permits do not contain
restrictions, limitations or other terms or conditions that will restrict the
ability of the Surviving Corporation to continue to operate its business
subsequent to the Effective Time in substantially the same manner as it is
currently being operated.
(f) To the best knowledge of the Company, neither the
Company nor any of its Subsidiaries have assumed any liability, responsibility,
commitment or obligation under any Environmental Law arising in any way from the
existence or operation of any company, organization or entity that is or was a
predecessor to the Company or any of its Subsidiaries, which liability,
responsibility, commitment or obligation has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.
4.14 TAXES.
(a) Except as set forth in Section 4.14(a) of the
Disclosure Schedule, each of the Company and the Subsidiaries has filed all Tax
Returns (as defined below) that it was required to file, and all such Tax
Returns were complete and accurate in all material respects. Except as set forth
in Section 4.14(a) of the Disclosure Schedule, neither the Company nor any
Subsidiary is or has ever been a member of a group of corporations with which it
has filed (or been required to file) consolidated, combined or unitary Tax
Returns, other than a
-24-
31
group of which only the Company and the Subsidiaries are or were members. To the
best knowledge of the Company, each group of corporations with which the Company
or any Subsidiary has filed (or was required to file) consolidated, combined,
unitary or similar Tax Returns (an "Affiliated Group") has filed all material
Tax Returns that it was required to file with respect to any period in which the
Company or a Subsidiary was a member of such Affiliated Group (an "Affiliated
Period"), and all such Tax Returns were complete and accurate in all material
respects. Each of the Company and the Subsidiaries has paid on a timely basis
all Taxes (as defined below) that were shown to be due and payable on such Tax
Returns and, to the best knowledge of the Company, each Affiliated Group has
paid all Taxes that were shown to be due and payable on such Tax Returns with
respect to all such Tax Returns filed for Affiliated Periods, except in either
case for failures to pay Taxes that, in the aggregate, have not resulted in, and
could not reasonably be expected to result in, a Material Adverse Effect. The
unpaid Taxes of the Company and the Subsidiaries for Tax periods through
September 30, 1998 do not exceed the accruals and reserves for Taxes (excluding
any assets, accruals, and reserves for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the balance sheet
as of September 30, 1998 referred to in Section 4.6(c) of this Agreement and
included in the Disclosure Schedule. All Taxes that the Company or any
Subsidiary is or was required by law to withhold or collect have been duly
withheld or collected and, to the extent required, have been paid to the proper
taxing authority, except for failures to withhold, collect or pay that, in the
aggregate, have not resulted in, and could not reasonably be expected to result
in, a Material Adverse Effect. For purposes of this Agreement, "Taxes" means all
taxes, charges, fees, levies or other similar assessments or liabilities,
including without limitation income, gross receipts, ad valorem, premium,
value-added, excise, real property, personal property, sales, use, transfer,
withholding, employment, payroll and franchise taxes imposed by the United
States of America or any state, local or foreign government, or any agency
thereof, or other political subdivision of the United States or any such
government, and any interest, fines, penalties, assessments or additions to tax
resulting from, attributable to or incurred in connection with any such tax. For
purposes of this Agreement, "Tax Returns" means all reports, returns,
declarations, statements or other information required to be supplied to a
taxing authority in connection with Taxes.
(b) The Company has made available to the Buyer complete
and accurate copies of all federal income Tax Returns filed by, and examination
reports and statements of deficiencies assessed against or agreed to by, the
Company or any Subsidiary since December 28, 1995. Except as set forth in
Section 4.14(b) of the Disclosure Schedule, the federal income Tax Returns of
the Company and each Subsidiary have been audited by the Internal Revenue
Service or are closed by the applicable statute of limitations for all taxable
years through the taxable year specified in the Disclosure Schedule. The Company
has made available to the Buyer complete and accurate copies of all other Tax
Returns of the Company and the Subsidiaries together with all related
examination reports and statements of deficiency for all periods from and after
December 28, 1995. Except as set forth in Section 4.14(b) of the Disclosure
Schedule, no examination or audit of any Tax Return of the Company or any
Subsidiary by any taxing authority is currently in progress or, to the best
knowledge of the
-25-
32
Company, threatened or contemplated, except in either case for matters that, in
the aggregate, have not resulted in, and could not reasonably be expected to
result in, a Material Adverse Effect. Neither the Company nor any Subsidiary has
been informed by any taxing authority that the taxing authority believes that
the Company or Subsidiary was required to file any Tax Return that was not
filed, except for matters that, in the aggregate, have not resulted in, and
could not reasonably be expected to result in, a Material Adverse Effect.
Neither the Company nor any Subsidiary has waived any statute of limitations
with respect to Taxes or agreed to an extension of time with respect to a Tax
assessment or deficiency, except for any waivers and extensions that, in the
aggregate, have not resulted in, and could not reasonably be expected to result
in, a Material Adverse Effect.
(c) Except as set forth in Section 4.14(c) of the
Disclosure Schedule, neither the Company nor any Subsidiary: (i) is a
"consenting corporation" within the meaning of Section 341(f) of the Code, and
none of the assets of the Company or the Subsidiaries are subject to an election
under Section 341(f) of the Code; (ii) has been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(l)(A)(ii) of the Code; or
(iii) has any actual or potential liability for any Taxes of any person (other
than the Company and its Subsidiaries) under Treasury Regulation Section
1.1502-6 (or any similar provision of federal, state, local, or foreign law), or
as a transferee or successor, by contract, or otherwise.
(d) None of the assets of the Company or any Subsidiary:
(i) is property that is required to be treated as being owned by any other
person pursuant to the provisions of former Section 168(f)(8) of the Code; (ii)
is "tax-exempt use property" within the meaning of Section 168(h) of the Code;
or (iii) directly or indirectly secures any debt the interest on which is tax
exempt under Section 103(a) of the Code.
(e) Neither the Company nor any Subsidiary has undergone,
or will undergo as a result of the transactions contemplated by this Agreement,
a change in its method of accounting resulting in an adjustment to its taxable
income pursuant to Section 481(a) of the Code.
(f) Except as set forth in Section 4.14(f) of the
Disclosure Schedule, no state or federal "net operating loss" of the Company
determined as of the Effective Time is subject to limitation on its use pursuant
to Section 382 of the Code or comparable provisions of state law as a result of
any "ownership change" within the meaning of Section 382(g) of the Code
occurring prior to the Effective Time.
(g) Except as set forth in Section 4.14(g) of the
Disclosure Schedule, there are no liens for Taxes (other than for current Taxes
not yet due and payable) upon the assets of the Company or any Subsidiary.
-26-
33
(h) Except as set forth in Section 4.14(h) of the
Disclosure Schedule, neither the Company nor any Subsidiary is a party to or
bound by any Tax indemnity, Tax sharing or Tax allocation agreement.
4.15 COMPLIANCE WITH LAWS; PERMITS. Neither the Company nor any
Subsidiary (a) is in violation of, or has violated, any applicable provisions of
any laws, statutes, ordinances or regulations or (b) has received any notice
from any Governmental Entity or any other person that either the Company or any
Subsidiary is in violation of, or has violated, any applicable provisions of any
laws, statutes, ordinances or regulations, except for violations that, in the
aggregate, have not resulted in, and could not reasonably be expected to result
in, a Material Adverse Effect. The Company and each of its Subsidiaries have all
permits, licenses and franchises from Governmental Entities required to conduct
their businesses as now being conducted or as presently contemplated to be
conducted, except for such permits, licenses and franchises the absence of
which, in the aggregate, have not resulted in, and could not reasonably be
expected to result in, a Material Adverse Effect.
4.16 INTELLECTUAL PROPERTY. The Company, or a Subsidiary, has
exclusive ownership of or rights to use each patent, patent application,
copyright (whether or not registered), copyright application, trademark (whether
or not registered), trademark application, trade name, service xxxx, and other
trade secret or proprietary intellectual property (collectively, "Intellectual
Property") owned by or used in and material to the business of the Company and
the Subsidiaries, taken as a whole. The Disclosure Schedule sets forth a
description of all patents, trademarks and copyrights and applications therefor
owned by or licensed to the Company or any Subsidiary that are material to the
conduct of the business of the Company and the Subsidiaries, taken as a whole,
as now operated. None of the previous or current development, manufacture,
marketing or distribution of products or services of or by the Company or any
Subsidiary infringes the right of any other person, except for any such
infringements that, in the aggregate, have not resulted in, and could not
reasonably be expected to result in, a Material Adverse Effect. To the best
knowledge of the Company, no other person is infringing the rights of the
Company or any Subsidiary in any such Intellectual Property, except for any such
infringements that, in the aggregate, have not resulted in, and could not
reasonably be expected to result in, a Material Adverse Effect.
4.17 LITIGATION. There are no actions, suits, proceedings or
investigations pending or, to the best knowledge of the Company, threatened
against the Company or any of its Subsidiaries, nor is the Company or any of its
Subsidiaries subject to any order, judgment, writ, injunction or decree, except
in either case for matters that, in the aggregate, have not resulted in, and
could not reasonably be expected to result in, a Material Adverse Effect.
4.18 PREPAYMENT OF INDEBTEDNESS. All of the outstanding
indebtedness (whether secured or unsecured) for borrowed money of the Company
and each of its Subsidiaries may be prepaid by the Company or its Subsidiaries
without the consent or approval of, or prior notice to, any other person, and
without payment of any premium or penalty.
-27-
34
4.19 VOTING REQUIREMENTS. The affirmative vote of the holders of a
majority of the outstanding Shares is the only vote of the holders of any class
or series of the Company's capital stock or other securities necessary to
approve the Merger. There are no bonds, debentures, notes or other indebtedness
of the Company having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which stockholders
of the Company may vote.
4.20 YEAR 2000 COMPLIANCE.
(a) All of (i) the Company's internal systems that are
material to the business or operations of the Company, including, without
limitation, computer hardware systems, software applications and embedded
systems, and (ii) the software, hardware, firmware and other technology which
constitute part of the products and services manufactured, marketed or sold by
the Company or licensed by the Company to third parties are Year 2000 Compliant
(as defined below), except in either case for any failures to be Year 2000
Compliant that in the aggregate have not resulted in, and could not reasonably
be expected to result in, a Material Adverse Effect. The Company is not aware of
any failure to be Year 2000 Compliant of any third-party system that is material
to the business or operations of the Company, including without limitation any
system belonging to any of the Company's suppliers, service providers or
customers.
(b) For purposes of this Agreement, "Year 2000 Compliant"
means that the applicable system or item:
(i) will accurately receive, record, store,
provide, recognize and process all date and
time data from, during, into and between the
twentieth and twenty-first centuries, the
years 1999 and 2000 and all leap years;
(ii) will accurately perform all date-dependent
calculations and operations (including,
without limitation, mathematical operations,
sorting, comparing and reporting) from,
during, into and between the twentieth and
twenty-first centuries, the years 1999 and
2000 and all leap years; and
(iii) will not malfunction, cease to function or
provide invalid or incorrect results as a
result of (x) the change of years from 1999
to 2000, (y) date data, including date data
which represents or references different
centuries, different dates during 1999 and
2000, or more than one century or (z) the
occurrence of any particular date;
in each case without human intervention, other than original data entry;
provided, in each case, that all applications, hardware and other systems used
in conjunction with such system
-28-
35
or item which are not owned or licensed by the Company correctly exchange date
data with or provide data to such system or item.
4.21 INSURANCE. The Company maintains insurance policies (the
"INSURANCE POLICIES") against all risks of a character and, to the Company's
best knowledge, in such amounts as are usually insured against by similarly
situated companies in the same or similar businesses. Each Insurance Policy is
in full force and effect and is valid, outstanding and enforceable, and all
premiums due thereon have been paid in full. To the Company's best knowledge,
none of the Insurance Policies that are material to the business of the Company
and its Subsidiaries taken as a whole will terminate or lapse (or be affected in
any other materially adverse manner) by reason of the transactions contemplated
by this Agreement. The Company and its Subsidiaries have complied in all
material respects with the provisions of each Insurance Policy under which it is
the insured party. Since January 1, 1996, no insurer under any Insurance Policy
that is material to the business of the Company and its Subsidiaries taken as a
whole has, in writing, canceled or generally disclaimed liability under any such
policy or indicated any intent to do so or not to renew any such policy. All
material claims under the Insurance Policies have been filed in a timely
fashion.
4.22 NO EXISTING DISCUSSION. As of the date hereof, the Company has
ceased any and all discussions or negotiations with any other party with respect
to an Acquisition Proposal (as defined in Section 6.5).
4.23 BROKERS. No broker, finder or investment banker other than the
Financial Advisor is entitled to any brokerage, finder's or other fee or
commission in connection with the Offer or the Merger based upon arrangements
made by or on behalf of the Company or any of its Subsidiaries or affiliates.
The Company has provided to the Parent a true and complete copy of its entire
agreement with the Financial Advisor.
ARTICLE 5
CONDUCT OF BUSINESS
5.1 CONDUCT PRIOR TO EFFECTIVE TIME. Except as a result of
entering into or as expressly contemplated by this Agreement or any Disclosure
Schedule relating to this Article 5, the Company covenants and agrees that,
unless the Parent shall otherwise agree in writing, prior to the Effective Time,
the business of the Company and its Subsidiaries shall in all material respects
be conducted only in, and the Company and its Subsidiaries shall not take any
material action except in, the ordinary course of business and consistent with
past practice, and the Company shall use all reasonable efforts, consistent with
past practice, to maintain and preserve its and each Subsidiary's business
organization, assets, employees and advantageous business relationships. Without
limiting the generality of the foregoing, during the period from the date of
this Agreement until the Effective Time, except as a result of entering into or
as expressly contemplated by this Agreement or any Disclosure Schedule
-29-
36
relating to this Article 5, the Company shall not, and not permit any of its
Subsidiaries to, directly or indirectly, do any of the following:
(i) other than dividends and distributions by a
direct or indirect wholly owned subsidiary of the Company to
its parent: (A) declare, set aside or pay any dividends on, or
make any other distributions (whether in cash, stock or other
property) in respect of, any of its capital stock; (B) split,
combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of,
in lieu of or in substitution of shares of its capital stock;
or (C) purchase, redeem or otherwise acquire any shares of its
capital stock or any other securities thereof or any rights,
warrants or options to acquire any such shares or other
securities, other than the payment to holders of Company
Options outstanding on the date hereof of an amount equal to
the difference between the price per Share to be paid in the
Offer and the exercise price of such Company Option in
exchange for the cancellation or termination of such Company
Option;
(ii) issue, deliver, sell, pledge or otherwise
dispose of or encumber any shares of its capital stock, any
other voting securities or any securities convertible into, or
any rights, warrants or options to acquire, any such shares,
voting securities or convertible securities (other than the
issuance of Shares upon the exercise of Company Options or
conversion of Convertible Notes outstanding on the date of
this Agreement in accordance with their present terms);
(iii) amend its Certificate of Incorporation or
By-laws or other comparable charter or organizational
documents;
(iv) acquire or agree to acquire (A) by merging
or consolidating with, or by purchasing a substantial portion
of the assets or any stock of, or by any other manner, any
business or any corporation, partnership, joint venture,
limited liability company, association or other business
organization or division thereof or (B) any assets that are
material, in the aggregate, to the Company and the
Subsidiaries, taken as a whole, except purchases of inventory
in the ordinary course of business consistent with past
practice;
(v) except in the ordinary course of business
and consistent with past practice, sell, lease, license,
pledge or otherwise dispose of or encumber any assets of the
Company or of any of its Subsidiaries (including any
indebtedness owned to them or any claims held by them);
(vi) whether or not in the ordinary course of
business or consistent with past practice, sell or dispose of
any assets material to the Company and its Subsidiaries, taken
as a whole (including any accounts, leases, contracts or
-30-
37
intellectual property or any assets or the stock of any
Subsidiaries, but excluding the sale of products in the
ordinary course of business consistent with past practice);
(vii) except as permitted by Section 6.5, enter
into an agreement with respect to any merger, consolidation,
liquidation or business combination, or any acquisition or
disposition of all or substantially all of the assets or
securities of the Company;
(viii) (A) incur or suffer to exist any
indebtedness for borrowed money, other than Permitted
Indebtedness (as defined below), or guarantee any such
indebtedness of another person, issue or sell any debt
securities or warrants or other rights to acquire any debt
securities of the Company or any of its Subsidiaries,
guarantee any debt securities of another person, enter into
any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any
arrangement having the economic effect of any of the
foregoing, or (B) make any loans, advances (other than to
employees of the Company in the ordinary course of business)
or capital contributions to, or investments in, any other
person other than between the Company and its Subsidiaries or
any of them. For purposes of this Section 5.1, "Permitted
Indebtedness" means (I) indebtedness for borrowed money that
existed as of September 30, 1998 as reflected on the balance
sheet included in the September 30, 1998 Financial
Information, (II) indebtedness for borrowed money of not more
than $2,000,000 incurred thereafter in the ordinary course of
business and consistent with past practice under loan
agreements in existence as of September 30, 1998, and (III)
indebtedness for borrowed money in an amount not exceeding the
total amount paid to the holders of Company Options as payment
for the cancellation or termination of such Company Options as
described in Section 5.1(i)(C);
(ix) make or agree to make any new capital
expenditures or expenditures not already in process on the
date of this Agreement with respect to property, plant or
equipment in excess of $150,000 in the aggregate for the
Company and the Subsidiaries, taken as a whole;
(x) make any change in accounting methods,
principles or practices, except insofar as may have been
required by a change in generally accepted accounting
principles or, except as so required, change any assumption
underlying, or method of calculating, any bad debt,
contingency or other reserve;
(xi) pay, discharge, settle or satisfy any
material claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise),
other than the payment, discharge or satisfaction, in the
ordinary course of
-31-
38
business consistent with past practice or in accordance with
their terms, of liabilities reflected or reserved against in,
or contemplated by, the most recent consolidated financial
statements (or the notes thereto) of the Company included in
the Commission Filings or the September 30 Financial
Information or incurred thereafter in the ordinary course of
business consistent with past practice, or waive any material
benefits of, or agree to modify in any material respect, any
material confidentiality, standstill or similar agreements to
which the Company or any of its Subsidiaries is a party;
(xii) except in the ordinary course of business,
materially modify, amend or terminate any material contract or
agreement to which the Company or any of its Subsidiaries is
party, or knowingly waive, release or assign any material
rights or claims;
(xiii) other than in the ordinary course of
business consistent with past practice, enter into any
material contracts or agreements relating to the distribution,
sale or marketing by third parties of the products of, or
products licensed by, the Company or any of its Subsidiaries;
(xiv) except as required to comply with applicable
law or agreements, plans or arrangements existing on the date
hereof or except as set forth in Section 5.1(xiv) of the
Disclosure Schedule, (A) adopt, enter into, terminate or amend
any written employment agreement, or any oral employment
agreement that is not terminable by the Company or any
Subsidiary without any penalty on notice of 30 days or less,
or any benefit plan for the benefit or welfare of any current
or former director, officer or employee, (B) increase in any
material respect the compensation or fringe benefits of, or
pay any bonus to, any director, officer or key employee, (C)
pay any material benefit not provided for under any benefit
plan or employment or other compensation arrangement, other
than the payment of bonuses following the date of this
Agreement to employees (other than officers and directors of
the Company or any Subsidiary) in the ordinary course of
business and of a nature and in amounts consistent with past
practice, (D) grant any awards under any bonus, incentive,
performance or other compensation plan or arrangement or
benefit plan (including the grant of stock options, stock
appreciation rights, stock based or stock related awards,
performance units or restricted stock, or the removal of
existing restrictions in any benefit plans or agreements or
awards made thereunder), or (E) take any action other than in
the ordinary course of business consistent with past practice
to fund or in any other way secure the payment of compensation
or benefits under any employee plan, agreement, contract or
arrangement or benefit plan;
-32-
39
(xv) make any tax election or, except in the
ordinary course of business consistent with past practice,
settle or compromise any federal, state, local or foreign tax
liability;
(xvi) issue any options or commence any offering
of Shares pursuant to the ESPP; or
(xvii) authorize, commit or agree, in writing or
otherwise, to take any of the foregoing actions.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 COMPANY STOCKHOLDER APPROVAL; PREPARATION OF PROXY STATEMENT.
(a) If approval of the Merger by the stockholders of the
Company is required under Delaware Law in order to consummate the Merger, the
Company will, as soon as practicable following the acceptance for payment of,
and payment for, Shares by the Purchaser pursuant to and subject to the
conditions of the Offer (coordinating the timing thereof with the Parent), duly
call, give notice of, convene and hold a special or annual meeting of its
stockholders (the "Stockholders Meeting") for the purpose of obtaining
stockholder approval of this Agreement, the Merger and the transactions
contemplated hereby. Except and to the extent otherwise permitted pursuant to
Section 6.5, the Company will, through its Board of Directors, recommend to its
stockholders that they approve the Merger. Notwithstanding the foregoing, if the
Purchaser or any other subsidiary of the Parent shall acquire at least 90% of
the outstanding Shares, the parties shall, at the request of the Parent, take
all necessary and appropriate action to cause the Merger to become effective as
soon as practicable (but in no event earlier than January 11, 1999, unless
otherwise requested by the Parent) after the expiration of the Offer without a
stockholders meeting in accordance with Section 253 of the DGCL. The Parent and
the Purchaser shall vote or cause to be voted any Shares beneficially owned by
them in favor of this Agreement, the Merger and the transactions contemplated
hereby.
(b) If approval of the Merger by the stockholders of the
Company is required under Delaware Law in order to consummate the Merger, the
Company will, at the Parent's request, as soon as practicable following the
expiration of the Offer, prepare and file a preliminary proxy or information
statement (the "Proxy Statement") with the Commission in accordance with the
Exchange Act and any other applicable laws, and will use its best efforts to
respond to any comments of the Commission or its staff and to cause the Proxy
Statement to be mailed to the Company's stockholders as promptly as practicable
after responding to all such comments to the satisfaction of the Commission or
its staff. The Company will notify the Parent promptly of the receipt of any
comments from the Commission or its staff and of any request by the Commission
or its staff for amendments or supplements to the Proxy Statement or for
additional information and will supply the Parent with copies of all
-33-
40
correspondence between the Company or any of its representatives, on the one
hand, and the Commission or its staff, on the other hand, with respect to the
Proxy Statement or the Merger. If at any time prior to the Stockholders Meeting
there shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement, the Company will promptly prepare and mail to
its stockholders and file with the Commission such an amendment or supplement.
The Company will not mail any Proxy Statement, or any amendment or supplement
thereto, to the Company's stockholders unless it has first obtained the consent
of the Parent to such mailing, which consent will not be unreasonably withheld.
6.2 DISPOSITION OF THE SHARES. The Parent and the Purchaser shall
not, and they shall cause their direct and indirect subsidiaries not to, sell,
transfer, assign, encumber or otherwise dispose of the Shares beneficially owned
by the Parent, the Purchaser or their respective direct or indirect
subsidiaries, as of the date of this Agreement, or acquired pursuant to the
Offer or otherwise prior to the meeting of the Company's stockholders, if any is
required, pursuant to which the Shares are voted with respect to the Merger,
this Agreement and the transactions contemplated hereby; provided, however, that
this Section 6.2 shall not apply to the sale, transfer, assignment, encumbrance
or other disposition of any or all of such Shares in transactions involving
solely the Parent, the Purchaser and/or one or more of their direct or indirect
subsidiaries or in connection with any Qualified Acquisition Proposal (as
defined in Section 6.5).
6.3 FEES AND EXPENSES.
(a) Except as otherwise provided in this Section 6.3,
each party shall bear all of the fees and expenses incurred by it in connection
with the negotiation and performance of this Agreement, and neither party may
recover any such fees and expenses from the other party upon any termination of
this Agreement.
(b) The Company shall immediately pay to the Parent
$7,450,000 in cash if:
(i) the Trigger Event specified in Section
6.3(e)(i) shall have occurred, and the Parent shall have
elected to terminate this Agreement pursuant to Section
8.1(c)(iii); or
(ii) the Trigger Event specified in Section
6.3(e)(ii) shall have occurred; or
(iii) the Company shall have elected to terminate
this Agreement pursuant to Section 8.1(b)(v).
(c) In addition to any payment provided for above in this
Section 6.3, if (x) any of the events specified in Section 6.3(b)(i), (ii) or
(iii) shall have occurred or (y) the Parent terminates this Agreement pursuant
to Section 8.1(c)(iv), then, the Company shall
-34-
41
immediately pay to the Parent an amount equal to the reasonable out-of-pocket
expenses incurred by the Parent and the Purchaser in connection with the
evaluation, negotiation, implementation and consummation of the transactions
contemplated by this Agreement (including fees and expenses of legal counsel,
solicitors, accountants, printers and financial advisors and investment
bankers); PROVIDED, HOWEVER, that, in no event shall the amount payable by the
Company pursuant to this Section 6.3(c) exceed $500,000. The Purchaser and the
Parent shall promptly provide the Company with invoices or other reasonable
evidence of such expenses upon written request by the Company, and the Parent
shall forthwith return any portion of expenses reimbursed by the Company as to
which such invoices or other evidence are not provided.
(d) Nothing contained in this Section 6.3 shall relieve
the Company of its obligation (except and to the extent otherwise permitted
pursuant to Section 6.5 below) to recommend that the Company's stockholders
accept and approve the Offer and the Merger. The provisions contained in this
Section 6.3 shall survive any termination of this Agreement.
(e) As used in this Agreement, the term "Trigger Event"
shall mean any of the following events:
(i) the Company's Directors, whether or not in
the exercise of their fiduciary or other legal duties, either
(A) shall have failed to approve or recommend, or shall have
withdrawn or adversely modified or taken a public position
materially inconsistent with its approval or recommendation
of, the Offer, the Merger or this Agreement or (B) take any
action (other than as expressly permitted under clauses (i)
and (ii) of the second sentence of Section 6.5(a)) with
respect to any Qualified Acquisition Proposal other than to
recommend rejection of the Qualified Acquisition Proposal
(including taking a position of neutrality or failing to take
any position within 10 business days after the making or
commencement of a Qualified Acquisition Proposal); or
(ii) prior to the final expiration of the Offer,
an Acquisition Proposal shall have become publicly known and
this Agreement is terminated (other than as a result of a
material breach of this Agreement by the Parent or the
Purchaser) and, within 12 months after such termination, (A)
the Company enters into a merger or other agreement that
contemplates the consummation of an Acquisition Proposal at a
price equal to or greater than the aggregate consideration
payable for Shares pursuant to the Offer and the Merger or (B)
the holders of Shares become entitled to receive consideration
per Share greater than the Merger Consideration in a
transaction or series of transactions in connection with an
Acquisition Proposal.
6.4 ADDITIONAL AGREEMENTS. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to
-35-
42
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement, and to cooperate with each of the other parties
hereto in connection with the foregoing, including using all reasonable efforts:
(A) to obtain all necessary waivers, consents and approvals from other parties
to loan agreements, leases and other contracts; (B) to obtain all necessary
consents, approvals and authorizations as are required to be obtained under any
federal, state or foreign laws or regulations; (C) to lift or rescind any
injunction or restraining order or other order adversely affecting the ability
of the parties to consummate the transactions contemplated hereby; (D) to effect
all necessary registrations and filings, including filings under the Xxxx-
Xxxxx-Xxxxxx Act and submissions of information requested by governmental
authorities; and (E) to fulfill all conditions to this Agreement. Each of the
Company, the Parent and the Purchaser further covenants and agrees that, prior
to the exercise by the Parent or the Purchaser of the right to terminate the
Offer under paragraphs (c) or (d) of ANNEX I hereto, each of the Company, the
Parent and the Purchaser shall use all reasonable efforts (which shall not be
construed to require the payment of any money to a third party or the
divestiture of or requirement to hold separate (through a trust or otherwise)
any business or assets) to prevent, with respect to a threatened or pending
preliminary or permanent injunction or other order, decree or ruling or statute,
rule, regulation or executive order specified in such paragraphs, the entry,
enactment or promulgation thereof, as the case may be. For purposes of the
foregoing, the obligation of the Parent and the Purchaser to use "all reasonable
efforts" to obtain waivers, consents and approvals to loan agreements, leases
and other contracts shall not include any obligation to agree to a modification
of the terms of such documents, except as expressly contemplated hereby or to
make any guaranty or monetary payment in consideration of such waiver, consent
or approval.
6.5 NO SOLICITATION.
(a) The Company shall not, and shall not authorize or
permit any of its Subsidiaries, or any of its or their officers, directors,
employees, representatives, agents or affiliates, including any investment
banker, attorney or accountant retained by the Company or any of its
Subsidiaries, to, directly or indirectly, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other action to
facilitate, any inquiries or the making of any proposal or offer that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal
(as defined below) or (ii) enter into, maintain, continue or otherwise
participate in any discussions or negotiations regarding any Acquisition
Proposal with any person, entity or group other than the Parent, the Purchaser
or their respective direct or indirect subsidiaries or affiliates (a "Third
Party"). Notwithstanding the foregoing, the Company, its Subsidiaries, and their
respective officers, directors, employees, representatives, agents and
affiliates, including any investment banker, attorney or accountant retained by
the Company or any of its Subsidiaries, may (i), in the case of a Qualified
Acquisition Proposal (as defined below) only, furnish or cause to be furnished
information concerning the Company's business, properties or assets to a Third
Party (subject to such Third Party executing a confidentiality agreement on
terms no less favorable to the Company than those in the confidentiality
agreement previously entered into by the Parent and the Company), (ii), in the
case of a Qualified Acquisition Proposal only, enter into, participate in,
conduct or
-36-
43
engage in discussions or negotiations with such Third Party, (iii) to the extent
that the Board of Directors of the Company is required by its fiduciary duties,
as advised by counsel, take any position with respect to an Acquisition Proposal
in accordance with Rules 14a-9 and 14e-2 promulgated under the Exchange Act, and
(iv) may, in the case of a Qualified Acquisition Proposal only and only prior to
the acceptance for payment of that number of Shares tendered pursuant to the
Offer sufficient to satisfy the Minimum Condition and in compliance with the
provisions of this Section 6.5 (including Section 6.5(c)), enter into an
agreement to consummate a Qualified Acquisition Proposal. For purposes of this
Agreement, "Acquisition Proposal" means an inquiry, offer or proposal regarding
any of the following (other than the transactions contemplated by this
Agreement) involving the Company or its Subsidiaries: (i) any merger,
reorganization, consolidation, share exchange, recapitalization, business
combination, liquidation, dissolution, or other similar transaction involving,
or, any sale, lease, exchange, mortgage, pledge, transfer or other disposition
of, all or any significant portion of the assets or 25% or more of the equity
securities of, the Company or any of its Subsidiaries, in a single transaction
or series of related transactions; (ii) any tender offer or exchange offer for
25% or more of the outstanding shares of capital stock of the Company or the
filing of a registration statement under the Securities Act in connection
therewith; or (iii) any public announcement of a proposal, plan or intention to
do any of the foregoing or any agreement to engage in any of the foregoing. For
purposes of this Agreement, "Qualified Acquisition Proposal" means an
unsolicited, bona fide, written Acquisition Proposal made by a Third Party that
the Board of Directors of the Company determines in its good faith judgment to
be more favorable to the Company's stockholders than the Offer and the Merger
(based on the opinion, with only customary qualifications, of the Company's
independent financial advisor that the value of the consideration to the
Company's stockholders provided for in such proposal exceeds the value of the
consideration to the Company's stockholders provided for in this Agreement by
the Offer and the Merger) and for which financing, to the extent required, is
then committed or which, in the good faith judgment of the Board of Directors of
the Company (based on the advice of the Company's independent financial
advisor), is reasonably capable of being obtained by such Third Party and which
Acquisition Proposal, in the good faith judgment of the Board of Directors of
the Company, is likely to be consummated. Nothing contained herein shall be
construed to prohibit the Company from making such disclosure to stockholders
that, in the judgment of the Board of Directors of the Company, as advised by
counsel, may be required by law or necessary to discharge any fiduciary duty
imposed thereby.
(b) The Company will immediately notify the Parent of,
and will disclose to the Parent all details of, (i) any Acquisition Proposal it
receives, (ii) any written indications that any person is interested in making
an Acquisition Proposal or (iii) the initiation and status of discussions or
negotiations relating to any Acquisition Proposal (it being understood that
pursuant to Section 6.3, any such Acquisition Proposal must be a Qualified
Acquisition Proposal). In the event that the Company furnishes any nonpublic
information to any party other than the Parent, it shall simultaneously provide
the Parent with copies of or access to all such information. Nothing in this
paragraph (b) shall be construed as interfering with the
-37-
44
Company's obligations to its stockholders under Rule 14e-2 promulgated under the
Exchange Act.
(c) Notwithstanding any other provision in this
Agreement, the Company may not enter into any agreement with any Third Party in
connection with a Qualified Acquisition Proposal unless (i) at least three
business day prior thereto the Company shall have provided the Parent and the
Purchaser a copy of the Qualified Acquisition Proposal, (ii) within such three
business day period, the Parent and the Purchaser do not make an offer which, in
the good faith judgment of the Board of Directors of the Company (based on the
advice of the Company's independent financial advisor) is at least as favorable
to the Company's stockholders as such Acquisition Proposal, (iii) the Company
shall have terminated this Agreement pursuant to Section 8.1(b)(v) below, and
(iv) prior thereto the Company shall have paid the fees specified in Section
6.3(b) and shall have deposited $500,000 in trust with a Qualified Commercial
Bank for the payment of the expenses specified in Section 6.3(c).
(d) The Company will use reasonable efforts to have all
copies of all nonpublic information it or its officers, directors, employees,
representatives or affiliates have distributed on or prior to the date of this
Agreement to other potential purchasers returned to the Company as soon as
possible.
6.6 NOTIFICATION OF CERTAIN MATTERS.
(a) The Company shall give prompt notice to the Parent,
of (i) any representation or warranty made by the Company contained in this
Agreement that is qualified as to materiality becoming untrue or inaccurate in
any respect or any such representation or warranty that is not so qualified
becoming untrue or inaccurate in any material respect, or (ii) the failure by
the Company to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement; provided, however, that no such notification shall be deemed to cure
any breach or otherwise affect the representations or warranties of the Company
or the conditions to the obligations of the parties hereunder.
(b) Without limiting the foregoing, the Company shall,
within 24 hours after it has notice of any of the following, notify the Parent
of:
(i) any notice or other communication from any
person alleging that the consent of such person is or may be
required in connection with the transactions contemplated by
this Agreement;
(ii) any notice or other communication from any
Governmental Entity in connection with the transactions
contemplated by this Agreement; and
-38-
45
(iii) any actions, suits, claims, investigations
or proceedings commenced or, to the best of its knowledge,
threatened against, relating to or involving or otherwise
affecting the Company or any Subsidiary which, if pending on
the date of this Agreement would have been required to have
been disclosed pursuant to this Agreement or which relate to
the consummation of the transaction contemplated hereby.
(c) The Parent shall give prompt notice to the Company of
(i) any representation or warranty made by the Parent or the Purchaser contained
in this Agreement that is qualified as to materiality becoming untrue or
inaccurate in any respect or any such representation or warranty that is not so
qualified becoming untrue or inaccurate in any material respect, or (ii) the
failure by the Parent or the Purchaser to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
them under this Agreement; provided, however, that no such notification shall be
deemed to cure any breach or otherwise affect the representations or warranties
of the Parent or the Purchaser or the conditions to the obligations of the
parties hereunder.
6.7 ACCESS TO INFORMATION. Except as restricted under applicable
law and the restrictions noted below, the Company shall, and shall cause its
Subsidiaries, and the Company's and such Subsidiaries' respective officers,
directors, employees and agents to, afford to the Parent and to the officers,
employees, representatives and agents of the Parent (including attorneys,
accountants and environmental consultants) reasonable access at reasonable
times, from the date hereof to the Effective Time, to the Company's and any
Subsidiary's officers, employees, agents, facilities, properties, books, records
and contracts, and shall furnish the Parent all relevant financial, operating
and other data and information as the Parent, through its officers, employees or
agents, may reasonably request, except for information (other than information
subject to disclosure to the Parent or the Purchaser pursuant to Section 6.5)
received or held by the Company pursuant to a confidentiality agreement with a
third party which confidentiality agreement would be breached by such
disclosure. Without limiting the generality of the foregoing, the parties
expressly agree that such access will include full cooperation with the Parent
in connection with any environmental investigation to be undertaken by the
Parent. All such investigations and access shall be conducted in a manner as not
to interfere unreasonably with the business operations of the Company. All
access to personnel and facilities of the Company or any Subsidiary prior to the
closing of the Offer shall be made only with the prior written consent of the
Chairman of the Board or the Chief Financial Officer, which consent shall not be
unreasonably withheld or delayed. In addition, the Company agrees to cooperate,
as reasonably requested, in connection with filings by the Parent or the
Purchaser (or any affiliate of the Parent or the Purchaser) with the Commission
(including registration statements), including, without limitation, obtaining
financial information and related accountants' consents for inclusion in the
Parent's or the Purchaser's (or any of their affiliates') Commission filings.
Without limiting the generality of the foregoing, the Company shall use its best
efforts to secure for the Company access to and copies of the workpapers of its
independent public accountants.
-39-
46
6.8 INDEMNIFICATION AND INSURANCE.
(a) The Parent and the Purchaser agree that all rights to
indemnification, advancement of expenses, exculpation, limitation of liability
and any and all similar rights now existing in favor of the present or former
employees, agents, directors or officers of the Company and its Subsidiaries
(the "Indemnified Parties"), as provided in their respective charters or by-laws
in effect on the date hereof, shall survive the Offer and the Merger and shall
continue in full force and effect for a period of six years from the Effective
Time and shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would affect adversely the
rights thereunder of individuals who at any time prior to the Effective Time
were directors, officers, employees or agents of the Company, unless such
modification shall be required by law; PROVIDED, HOWEVER, that in the event any
claim or claims are asserted or made within such six-year period, all rights to
indemnification in respect to any such claim or claims shall continue until the
disposition of any and all such claims.
(b) Subject to the terms and conditions of this Section
6.8, 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, the Surviving Corporation shall, to the fullest
extent permitted under applicable law, indemnify and hold harmless, each present
and former director, officer, employee, fiduciary and agent of the Company and
each Subsidiary and their respective heirs, executors, administrators, personal
representatives or assigns (collectively, the "Indemnified Parties") against all
costs and expenses (including attorneys' fees), judgments, fines, losses,
claims, damages, liabilities and settlement amounts paid in connection with any
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), whether civil, criminal, administrative or
investigative (a "Proceeding"), arising out of or pertaining to any action or
omission in their capacity as an officer, director, employee, fiduciary or
agent, whether occurring before or after the Effective Time, to the same extent
as provided in the Company's Certificate of Incorporation or By-laws as in
effect on the date hereof, in each case for a period of six years after the date
hereof. In the event that any claim for indemnification is asserted or made
within such six-year period, all rights to indemnification in respect of such
claim shall continue until the disposition of such claim.
(c) Each Indemnified Party shall give written notice to
the Company or the Surviving Corporation, as the case may be (the "Indemnifying
Party") promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any Proceeding resulting therefrom; provided, that counsel
for the Indemnifying Party, who shall conduct the defense of such Proceeding,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld, conditioned or delayed); and, provided, further, that the
failure of any Indemnified Party to given notice as provided herein shall not
relieve the Indemnifying Party of its obligations under Section 6.8(b) unless
and to the extent that the Indemnifying Party is adversely affected by such
failure. The Indemnified Party may participate in such defense at
-40-
47
such party's expense; provided, however, that the Indemnifying Party shall pay
such expense if representation of such Indemnified Party by the counsel retained
by the Indemnifying Party would be inappropriate due to actual or potential
differing interests between the Indemnified Party and any other party
represented by such counsel in such proceeding. In the event that the
Indemnifying Party does not assume the defense pursuant to this paragraph (c) of
any Proceeding of which the Indemnifying Party receives notice as provided
herein, any expenses incurred by the Indemnified Party in defending such
Proceeding shall be paid by the Indemnifying Party in advance of the final
disposition of such matter, provided, however, that the payment of such expenses
incurred by the Indemnified Party in advance of the final disposition of such
matter shall be made only upon receipt of an undertaking by or on behalf of the
Indemnified Party to repay all amounts so advanced in the event that it shall
ultimately be determined that the Indemnified Party is not entitled to be
indemnified by the Indemnifying Party in accordance with this Section 6.8. The
Indemnified Party shall cooperate with the Indemnifying Party and provide access
to all documents necessary or beneficial to the defense of any Proceeding.
Neither the Company nor the Surviving Corporation shall be liable for any
settlement of any Proceeding effected without its written consent.
(d) In the event the Company or the Surviving Corporation
or any of their respective successors or assigns consolidates with or merges
into any other person and shall not be the continuing or surviving corporation
or entity of such consolidation or merger, then, and in each such case, the
Parent will either guaranty the indemnification obligations referred to in this
Section 6.8 or will make or cause to be made proper provision so that the
successors and assigns of the Company or the Surviving Corporation, as the case
may be, assume the indemnification obligations described herein for the benefit
of the Indemnified Parties.
(e) The provisions of this Section 6.8 are (i) intended
to be for the benefit of, and will be enforceable by, each of the Indemnified
Parties and (ii) in addition to, and not in substitution for, any other rights
to indemnification or contribution that any such person may have by contract or
otherwise.
(f) The Parent shall maintain in effect for three years
from the date of the Effective Time, if available, directors' and officers'
liability insurance policies covering the directors and officers of the Company
as of the date hereof, with coverages and other terms substantially as favorable
to such directors and officers as is currently in effect; PROVIDED, HOWEVER,
that the Parent shall not be required to spend more than an amount per year
equal to 150% of the current annual premium paid by the Company as of the date
hereof for such insurance; and provided, further, that if the premium for such
coverage exceeds such amount, the Parent shall purchase a policy with the
greatest coverage available for such 150% of the annual premium.
6.9 FILINGS AND OTHER MATTERS. The Company shall confer with the
Parent on a regular and frequent basis as reasonably requested by the Parent
concerning operational
-41-
48
matters and promptly advise the Parent orally and in writing of any change or
event having, or which, insofar as reasonably can be foreseen, could have, a
Material Adverse Effect. The Company shall promptly provide to the Parent (or
its counsel) copies of all filings made by the Company with any Governmental
Entity in connection with this Agreement and the transactions contemplated
hereby.
6.10 FAIR PRICE STRUCTURE. If any "fair price" or "control share
acquisition" or "anti-takeover" statute, or other similar statute or regulation
or any state "blue sky" statute shall become applicable to the transactions
contemplated hereby or by the Stockholders' Agreement, the Company and the
members or the Board of Directors of the Company shall grant such approvals and
take such actions as are necessary so that the transactions contemplated hereby
and thereby may be consummated as promptly as practicable on the terms
contemplated hereby and thereby, and otherwise act to minimize the effects of
such statute or regulation on the transactions contemplated hereby or thereby.
6.11 PARENT GUARANTY. The Parent hereby unconditionally and
irrevocably guarantees the Purchaser's obligations under this Agreement and
agrees to be liable for any breach of this Agreement by the Purchaser. The
guaranty described in this Section 6.11 is a guaranty of payment and not of
collection.
6.12 COMPANY OPTIONS.
(a) As of the Effective Time, the Parent shall assume the
Option Plan and the obligations of the Company thereunder and all of the Company
Options which are then outstanding shall be assumed by the Parent. Immediately
after the Effective Time, each such Company Option shall be deemed to constitute
an option to acquire, on the same terms and conditions as were applicable under
such Company Option immediately prior to the Effective Time, such number of
shares of common stock, par value $1.00 per share, of the Parent (the "Parent
Common Stock") as is equal to the number of Shares subject to such Company
Option immediately prior to the Effective Time multiplied by a fraction, the
numerator of which is the Merger Consideration and the denominator of which is
the average closing price of the Parent Common Stock on the New York Stock
Exchange, as reported in The Wall Street Journal (or if not so reported in
another authoritative source), for the ten trading days ending on the date of
the expiration of the Offer (with any fraction resulting from such
multiplication to be rounded down to the nearest whole number). The exercise
price per share of each such assumed Company Option shall be equal to the per
share exercise price of such Company Option immediately prior to the Effective
Time multiplied by a fraction, the numerator of which is the average closing
price of the Parent Common Stock on the New York Stock Exchange, as reported in
The Wall Street Journal (or if not so reported in another authoritative source),
for the ten trading days ending on the date of the expiration of the Offer and
the denominator of which is the Merger Consideration (with any fraction
resulting from such multiplication to be rounded up to the nearest whole cent).
Except as otherwise provided in this Section 6.12, the term, exercisability,
vesting schedule, status as an "incentive stock option" under Section 422 of the
Code and all of the other terms of the Company
-42-
49
Options shall otherwise remain unchanged. This Section 6.12 is intended to meet
the requirements of Section 424(a) of the Code and shall be interpreted
consistent with such intent.
(b) As soon as practicable after the Effective Time, the
Parent shall deliver to each holder of an outstanding Company Option an
appropriate notice setting forth such holder's rights pursuant to such Company
Options, as amended by this Section 6.12, and the agreements evidencing such
Company Options shall continue in effect on the same terms and conditions
(subject to the amendments provided for in this Section 6.12 and such notice).
(c) The Parent shall take all corporate action necessary
to reserve for issuance a sufficient number of shares of Parent Common Stock for
delivery upon exercise of the Company Options assumed in accordance with this
Section 6.12. As soon as practicable after the Effective Time, the Parent shall,
with respect to all shares of Parent Common Stock subject to such Options, (i)
either (x) file a Registration Statement on Form S-8 (or any successor form)
under the Securities Act or (y) file any necessary amendments to the Company's
previously filed Registration Statements on Form S-8 in order that the Parent
will be deemed a "successor registrant" thereunder, and, in either event, shall
use all reasonable efforts to maintain the effectiveness of such registration
statement for so long as such Company Options remain outstanding, and (ii) take
all actions necessary to have such shares of Parent Common Stock approved for
listing on the New York Stock Exchange, subject to official notice of issuance.
Notwithstanding any other term of this Agreement, after the Effective Time, no
assumed Company Option may be exercised until such registration statement has
become effective and such approval has been obtained.
(d) The Company shall take all necessary actions pursuant
to the Option Plan and the agreements evidencing the Company Options to provide
for the assumption of the Company Options in accordance with this Section 6.12.
6.13 CERTAIN PAYMENTS. The Parent shall cause the Company to pay,
in accordance with their respective terms, all bonuses, severance payments,
accrued vacation pay and all other payments expressly set forth in Section 6.13
of the Disclosure Schedule to the persons set forth on such Disclosure Schedule
who will be terminated as of the closing of the Offer, within one business day
following payment and acceptance of the Shares in the Offer (except as otherwise
specifically set forth in Section 6.13 of the Disclosure Schedule, which shall
be paid in accordance therewith). The Company hereby represents and warrants
that, upon receipt of the payments listed in Section 6.13 of the Disclosure
Schedule, neither the Company nor any Subsidiary will have any further
obligation to any of the individuals listed in Section 6.13 other than (a)
pursuant to Company Options held by such individuals as set forth in Section 4.3
of the Disclosure Schedule or (b) as otherwise expressly provided for or
disclosed in this Agreement or the Disclosure Schedule.
-43-
50
ARTICLE 7
CONDITIONS
7.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment or waiver by all parties at or prior to the Effective Time of
each of the following conditions:
(a) The Parent or the Purchaser shall have made, or
caused to be made, the Offer on the terms and conditions set forth therein and
shall have purchased, or caused to be purchased, all Shares validly tendered and
not withdrawn pursuant to the Offer;
(b) this Agreement and the Merger shall have been
approved and adopted by the requisite vote or consent of the stockholders of the
Company, if any, required by the Delaware Law and the Company's Certificate of
Incorporation;
(c) any waiting period (and any extension thereof)
applicable to the consummation of the Merger under the Xxxx-Xxxxx-Xxxxxx Act
shall have expired or been terminated; and
(d) no preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent jurisdiction or by any
Governmental Entity, nor any statute, rule, regulation or executive order
promulgated or enacted by any Governmental Entity, shall be in effect, which
would make the acquisition or holding by the Parent or its subsidiaries of the
Shares or shares of common stock of the Surviving Corporation illegal or
otherwise prevent the consummation of the Merger.
7.2 CONDITIONS TO THE PARENT'S AND THE PURCHASER'S OBLIGATION TO
EFFECT THE MERGER. The obligation of the Parent and the Purchaser to consummate
the Merger shall be further subject to the condition that, at or prior to the
Effective Time, all governmental and third-party consents and approvals required
to be obtained by the Company to consummate the Merger shall have been obtained,
except for (a) consents required under the Company's credit facility with
NationsBank, National Association as in effect on the date of this Agreement and
(b) such consents and approvals where the failure to obtain such consent or
approval would not have a Material Adverse Effect.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether prior to or after approval by the
stockholders of the Company, as follows:
-44-
51
(a) Subject to Section 1.3, by mutual written consent of
the Boards of Directors of the Parent and the Company; or
(b) By the Company:
(i) if neither the Parent nor any of its
subsidiaries or affiliates shall have (A) publicly announced
its intention to make the Offer no later than the first
business day following the date of this Agreement or (B)
commenced the Offer within five business days of such
announcement unless such failure to commence the Offer is due
to the material breach of this Agreement by the Company; or
(ii) if, in the absence of any material breach of
this Agreement by the Company, (A) the Offer shall have been
terminated or the Purchaser shall have allowed the Offer to
expire without the purchase of such number of Shares
thereunder as satisfies the Minimum Condition (as defined in
ANNEX I hereto); or (B) neither the Parent nor any of its
subsidiaries or affiliates shall have paid for all Shares
validly tendered pursuant to the Offer and not withdrawn
within 60 days after the commencement of the Offer; or
(iii) if the Effective Time shall not have
occurred on or before March 31, 1999 due to a failure of any
of the conditions to the obligation of the Company to effect
the Merger set forth in Section 7.1; or
(iv) if, prior to the purchase of any Shares
pursuant to the Offer, the Parent or the Purchaser fails to
perform any of their respective obligations under this
Agreement and such failure or nonperformance materially
impairs the Parent's and the Purchaser's ability to consummate
the Offer or the Merger; or
(v) if the Company has, in accordance with the
terms of Section 6.5 above, entered into an agreement with a
Third Party to consummate a Qualified Acquisition Proposal; or
(vi) if there shall have been a breach of any
material representation and warranty of the Purchaser or the
Parent set forth herein prior to expiration or termination of
the Offer, which breach is not cured within five days
following written notice thereof by the Company to the
Purchaser and the Parent.
(c) By the Parent:
(i) if, due to an occurrence that would result
in a failure to satisfy any of the conditions set forth in
ANNEX I hereto, the Parent or any of its
-45-
52
subsidiaries or affiliates shall have (A) failed to commence
the Offer within five business days of the date on which the
Purchaser's intention to make the Offer is publicly announced;
(B) terminated the Offer without the purchase of any Shares
thereunder; or (C) failed to pay for Shares pursuant to the
Offer within 60 days after the commencement of the Offer; or
(ii) if the Effective Time shall not have
occurred on or before March 31, 1999 due to a failure of any
of the conditions to the obligations of the Parent and the
Purchaser to effect the Merger set forth in Sections 7.1 and
7.2 otherwise than as a result of a material breach or default
by the Parent or the Purchaser hereunder; or
(iii) if a Trigger Event specified in Section
6.3(e)(i) occurs; or
(iv) if, prior to the purchase of any Shares
pursuant to the Offer, the Company fails to perform in any
respect any of its material obligations under this Agreement,
which failure to perform (other than a failure to perform an
obligation set forth in Section 6.5, as to which there shall
be no cure period) is not cured within five days following
written notice thereof by the Parent to the Company.
(d) By either the Company or the Parent, if any
Governmental Entity shall have issued an order, decree or ruling or taken any
other action permanently enjoining, restraining or otherwise prohibiting the
acceptance for payment of, or payment for, Shares pursuant to the Offer or the
Merger and such order, decree or ruling or other action shall have become final
and nonappealable; provided, however, that the party seeking to terminate this
Agreement pursuant to this provision shall have performed its obligations under
Section 6.4.
(e) Notwithstanding any other provision of this
Agreement, the termination of this Agreement by the Company pursuant to Section
8.1(b)(v) above shall be of no force or effect unless prior thereto the Company
shall have complied with Section 6.5(c) above.
8.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement as provided in Section 8.1, all obligations and agreements of the
parties set forth in this Agreement shall forthwith terminate and be of no
further force or effect, and there shall be no liability on the part of the
Parent, the Purchaser or the Company hereunder, except as set forth in Section
6.3 or Section 9.4; provided that the foregoing shall not relieve any party for
liability for damages actually incurred as a result of any breach of this
Agreement.
8.3 AMENDMENT. This Agreement may not be amended except, subject
to Section 1.3, by action of the Board of Directors of each of the parties
hereto set forth in an instrument in writing signed on behalf of each of the
parties hereto; provided, however, that if this Agreement and the Merger are
subject to stockholder approval then, after such approval,
-46-
53
no amendment shall be made which by law requires further approval by such
stockholders without obtaining such further approval.
8.4 WAIVER. At any time prior to the Effective Time, whether
before or after any special meeting of the stockholders of the Company to vote
on the Merger, any party hereto, subject to Section 1.3, by action taken by its
Board of Directors, may (i) extend the time for the performance of any of the
obligations or other acts of any other party hereto or (ii) waive compliance
with any of the agreements of any other party or with any conditions to its own
obligations; provided, however, that if this Agreement and the Merger are
subject to stockholder approval then, after such approval, no waiver shall be
made which by law requires further approval by such stockholders without
obtaining such further approval. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party by a duly authorized officer. For
purposes of this Section 8.4, the Parent and the Purchaser shall be considered
to be one party.
ARTICLE 9
GENERAL PROVISIONS
9.1 PUBLICITY. The Parent and the Purchaser, on the one hand, and
the Company, on the other hand, will consult with each other before issuing, and
provide each other with a reasonable opportunity to review and comment upon, any
press release or other public statements with respect to the transactions
contemplated by this Agreement, including the Offer and the Merger, and shall
not issue, or permit any of their respective subsidiaries to issue, any such
press release or make any such public statement prior to such consultation,
except as may be required by applicable law, court process or by obligations
pursuant to any listing agreement with any national securities exchange or
national securities quotation system, in which case the party making such
release will use reasonable efforts to obtain comments from the other party
before issuance of such release or statement. The parties agree that the initial
press release to be issued with respect to the transactions contemplated by this
Agreement shall be in the form heretofore agreed to by the parties.
9.2 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been fully given if (i) delivered
personally, (ii) sent by certified or registered mail, return receipt requested,
(iii) sent by overnight courier for delivery on the next business day or (iv)
sent by confirmed telecopy, provided that a confirmation copy of all such
telecopied materials is thereafter sent within 24 hours in the manner described
in clauses (i), (ii) or (iii), to the parties at the following addresses or at
such other addresses as shall be
-47-
54
specified by the parties by like notice:
(a) If to the Parent or the Purchaser:
EG&G, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
Telecopy No.: 000-000-0000
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopy No.: 617-526-5000
(b) If to the Company:
Lumen Technologies, Inc.
000 Xxxxxxxx Xxxxx Xxxxxx
Xxxxx X000
Xxx, Xxx Xxxx 00000
Attention: President
Telecopy No.: 914-967-9405
with a copy to:
Xxxx Xxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy No.: 212-245-3009
Notices provided in accordance with this Section 9.2 shall be deemed
delivered (i) on the date of personal delivery, (ii) four business days after
deposit in the mail, (iii) one business day after delivery to an overnight
courier, or (iv) on the date of confirmation of the telecopy transmission, as
the case may be.
9.3 INTERPRETATION. When a reference is made in this Agreement to
an Article or a Section, such reference shall be to an Article or a Section of
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this
-48-
55
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, including ANNEX I, they shall be deemed to be followed by the
words "without limitation". As used in this Agreement, including ANNEX I, the
term "subsidiary" of any person means another person whether foreign or
domestic, an amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a majority of its
Board of Directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly or
indirectly by such first person. For avoidance of doubt, the parties acknowledge
that Voltarc Technologies, Inc. is a Subsidiary of the Company. As used in this
Agreement, including ANNEX I, the term "affiliate" of any person means any
person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such first person.
For purposes of this Agreement, the Company shall not be deemed to be an
affiliate or subsidiary of the Purchaser or the Parent. Inclusion of information
in the Disclosure Schedule does not constitute an admission or acknowledgment of
the materiality of such information. For purposes of this Agreement, "business
day" shall have the meaning set forth in Rule 14d-1(c)(6) of the Exchange Act.
9.4 REPRESENTATIONS AND WARRANTIES; ETC. The respective
representations and warranties of the Company, the Parent and the Purchaser
contained herein shall expire with, and be terminated and extinguished upon, the
Effective Time. This Section 9.4 shall have no effect upon any other obligation
of the parties hereto, which by their terms contemplate performance after the
Effective Time. If this Agreement shall terminate after acceptance for payment
by the Purchaser of Shares pursuant to the Offer, but prior to the Effective
Time, the agreements of the parties contained in Sections 6.3, 6.8, 6.11 and
6.13 shall also survive the termination of this Agreement.
9.5 MISCELLANEOUS. This Agreement together with the
Confidentiality Agreement between the Parent and the Company dated June 9, 1998
constitutes the entire agreement and supersedes all other prior agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof. This Agreement (i) except as provided in
Sections 6.8, 6.11 and 6.13 is not intended to confer upon any other person any
rights or remedies hereunder, create any agreement of employment with any person
or otherwise create any third-party beneficiary hereto; (ii) shall not be
assigned, except that the Purchaser may assign its rights and obligations to one
or more direct or indirect wholly owned subsidiaries of the Parent which in a
written instrument shall make all the representations and warranties of the
Purchaser set forth herein and shall agree to assume all of the Purchaser's
obligations hereunder and be bound by all of the terms and conditions of this
Agreement; provided, however, that no such assignment shall relieve the Parent
or the Purchaser of its obligations hereunder; and (iii) shall be governed in
all respects, including validity, interpretation and effect, by the internal
laws of the State of Delaware, without giving effect to the principles of
conflict of laws thereof.
-49-
56
9.6 VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
9.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
9.8 SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic and legal substance of
the transactions contemplated hereby are not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable manner in order that
the transactions contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.
[Remainder of page intentionally left blank.]
-50-
57
IN WITNESS WHEREOF, the Parent, the Purchaser and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
EG&G, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and
Chief Operating Officer
LIGHTHOUSE WESTON CORP.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LUMEN TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman Of The Board
-51-
58
ANNEX I
CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer or this Agreement,
the Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act, to pay for any Shares tendered pursuant to the Offer
unless the number of Shares tendered and not withdrawn not later than the date
and time of expiration of the Offer, shall equal at least a majority of the
Fully Diluted Shares (as defined below) (such number of Shares, the "Minimum
Condition"). For purposes of this Agreement: "Fully Diluted Shares" shall mean
all outstanding securities entitled generally to vote in the election of
directors of the Company after giving effect to the exercise or conversion of
all options, rights and securities exercisable or convertible into such voting
securities (other than (i) the exercise of Company Options that are exercisable
for Shares that would, following such exercise, be subject to the Stockholders'
Agreement and (ii) conversion of the Convertible Notes).
Furthermore, notwithstanding any other provisions of the Offer or this
Agreement, the Purchaser shall not be required to accept for payment or, subject
as aforesaid, to pay for any Shares tendered pursuant to the Offer unless all
applicable waiting periods under the Xxxx-Xxxxx- Xxxxxx Act shall have expired
or been terminated.
Furthermore, notwithstanding any other provisions of the Offer or this
Agreement, the Purchaser shall not be required to accept for payment or, subject
as aforesaid, to pay for any Shares not theretofore accepted for payment or paid
for, and may terminate the Offer if, at any time on or after the date of this
Agreement and before the acceptance of such Shares for payment or the payment
therefor, any of the following conditions exists:
(a) the Purchaser is not entitled to vote its Shares for the
Merger; or
(b) except for matters (i) which are attributable to the
announcement or performance of this Agreement and the transactions contemplated
hereby or (ii) which generally affect the economy or the industry in which the
Company is engaged, any change shall have occurred in the condition (financial
or other), results of operations, stockholders' equity, business, assets,
properties, liabilities or capitalization of the Company and its Subsidiaries
which has resulted in a Material Adverse Effect; or
(c) there shall have been instituted or pending before any
Governmental Entity any action, proceeding, application, claim or counterclaim
or any judgement, order or injunction sought or any other action taken by any
Governmental Entity or by any person who has made an Acquisition Proposal, which
(i) challenges the acquisition by the Parent or the Purchaser (or any other
affiliate of the Parent) of any Shares pursuant to the Offer, the Merger or the
Stockholders' Agreement, restrains, prohibits or materially delays the making or
A-1
59
consummation of the Offer or the Merger or the transactions contemplated by the
Agreement or the Stockholders' Agreement, prohibits the performance of any of
the contracts or other arrangements entered into by the Parent or the Purchaser
(or any other affiliates of the Parent) in connection with the acquisition of
the Company, seeks to obtain any material amount of damages, or otherwise
directly or indirectly materially adversely affects the Offer or the Merger or
the transactions contemplated by the Agreement or the Stockholders' Agreement,
(ii) seeks to prohibit or limit materially the ownership or operation by the
Company, the Parent or the Purchaser (or any other affiliate of the Parent) of
all or any material portion of the business or assets of the Company and its
Subsidiaries taken as a whole or of the Parent and its affiliates, or to compel
the Company, the Parent or the Purchaser (or any other affiliate of the Parent)
to dispose of or to hold separate all or any material portion of the business or
assets of the Parent or any of its affiliates or of the Company or any of its
Subsidiaries as a result of the transactions contemplated by the Agreement,
(iii) seeks to impose any material limitation on the ability of the Company, the
Parent, the Purchaser (or any other affiliate of the Parent) to conduct the
Company's or any Subsidiary's business or own such assets, (iv) seeks to impose
or confirm any material limitation on the ability of the Parent or the Purchaser
(or any other affiliate of the Parent) to acquire or hold, or to exercise full
rights of ownership of, any Shares, including the right to vote such Shares on
all matters properly presented to the stockholders of the Company, (v) seeks to
require divestiture by the Purchaser or any of its affiliates of all or any of
the Shares, or (vi) otherwise has resulted in, or has a substantial likelihood
of resulting in, a Material Adverse Effect; or
(d) there shall have been entered or issued any preliminary or
permanent judgement, order, decree, ruling or injunction or any other action
taken by any Governmental Entity, whether on its own initiative or the
initiative of any other person, which (i) restrains, prohibits or materially
delays the making or consummation of the Offer or the Merger or the transactions
contemplated by the Agreement or the Stockholders' Agreement, prohibits the
performance of any of the contracts or other arrangements entered into by the
Parent or the Purchaser (or any other affiliates of the Parent) in connection
with the acquisition of the Company or otherwise directly or indirectly
materially adversely affects the Offer or the Merger or the transactions
contemplated by the Agreement or the Stockholders' Agreement, (ii) prohibits or
limits materially the ownership or operation by the Company, the Parent or the
Purchaser (or any other affiliate of the Parent) of all or any material portion
of the business or assets of the Company and its Subsidiaries taken as a whole
or of the Parent and its affiliates, or compels the Company, the Parent or the
Purchaser (or any other affiliate of the Parent) to dispose of or to hold
separate all or any material portion of the business or assets of the Parent or
any of its affiliates or of the Company or any of its Subsidiaries as a result
of the transactions contemplated by the Agreement, (iii) imposes any material
limitation on the ability of the Company, the Parent, the Purchaser (or any
other affiliate of the Parent) to conduct the Company's or any Subsidiary's
business or own such assets, (iv) imposes or confirms any material limitation on
the ability of the Parent or the Purchaser (or any other affiliate of the
Parent) to acquire or hold, or to exercise full rights of ownership of, any
Shares, including the right to vote such Shares on all matters properly
presented to the stockholders of the Company, (v) requires divestiture by the
Purchaser or any of its affiliates
A-2
60
of all or any of the Shares, or (vi) otherwise has resulted in, or has a
substantial likelihood of resulting in, a Material Adverse Effect; or
(e) there shall be any statute, rule or regulation enacted,
promulgated, entered, enforced or deemed applicable to the Offer, the Merger,
the Agreement or the Stockholders' Agreement, or any other action shall have
been taken by any Government Entity, other than the routine application to the
Offer, the Merger or the transactions contemplated by the Stockholders'
Agreement of waiting periods under the Xxxx-Xxxxx-Xxxxxx Act that results in,
directly or indirectly, any of the consequences referred to in clauses (i)
through (vi) of paragraph (c) above; or
(f) the Company shall have failed to perform any material
obligation or to comply with any material agreement or covenant of the Company
to be performed or complied with by it under this Agreement within five days
following written notice of such failure by the Parent to the Company; or
(g) (i) the Board of Directors of the Company or any committee
thereof shall have (A) withdrawn or modified in a manner adverse to the Parent
or the Purchaser its approval or recommendation of the Offer, the Merger, this
Agreement or the Stockholders' Agreement or (B) approved or recommended any
Acquisition Proposal, (ii) the Company shall have entered into, or publicly
announced its intention to enter into, any agreement with respect to any
Acquisition Proposal or (iii) the Board of Directors of the Company or any
committee thereof shall have resolved to do any of the foregoing; or
(h) any of the representations and warranties of the Company set
forth in this Agreement that are qualified as to materiality shall have been
breached or not be true and correct in any respect or any such representations
and warranties that are not so qualified shall have been breached or not be true
and correct in any material respect, in each case at the date of the Agreement
(except to the extent that any such representation or warranty refers
specifically to another date, in which case such representation or warranty
shall be true and correct as of such other date); or
(i) except as to matters which are attributable to the
announcement or performance of this Agreement and the transactions contemplated
hereby, any of the representations and warranties of the Company set forth in
this Agreement that are qualified as to having or resulting in a Material
Adverse Effect shall have been breached or not be true and correct in any
respect or any such representations and warranties that are not so qualified
shall have been breached or not be true and correct and the effect of such
breach or failure to be true or correct shall be that the matter shall have a
Material Adverse Effect, in each case at the scheduled or extended expiration of
the Offer (except to the extent that any such representation or warranty refers
specifically to another date, in which case such representation or warranty
shall be true and correct as of such other date); or
(j) this Agreement shall have been terminated in accordance with
its terms.
A-3
61
The foregoing conditions are for the sole benefit of the Parent and the
Purchaser (and the other affiliates of the Parent) and may be asserted by the
Parent and the Purchaser (and the other affiliates of the Parent) regardless of
the circumstances giving rise to any such condition and may be waived by the
Parent or the Purchaser, in whole or in part, at any time and from time to time,
in their sole discretion. The failure by the Parent or the Purchaser at any time
to exercise any of the foregoing rights will not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right will be deemed an ongoing right that may be
asserted at any time and from time to time.
Terms used in this ANNEX I but not defined herein shall have the
meanings assigned to such terms in the Agreement of which this ANNEX I is a
part.
A-4
