Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
dated as of
June 27, 2001
among
CMI CORPORATION,
TEREX CORPORATION
and
CLAUDIUS ACQUISITION CORP.
ARTICLE I
THE MERGER
SECTION 1.1. The Merger.............................................1
SECTION 1.2. Conversion of Shares...................................2
SECTION 1.3. Surrender and Payment..................................4
SECTION 1.4. Stock Options and Equity Awards........................5
SECTION 1.5. Adjustments............................................6
SECTION 1.6. Fractional Shares......................................6
SECTION 1.7. Withholding Rights.....................................6
SECTION 1.8. Lost Certificates......................................7
SECTION 1.9. Shares Held by Company Affiliates......................7
SECTION 1.10. Appraisal Rights.......................................7
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 2.1. Organization and Good Standing; Organizational
Documents.............................................8
SECTION 2.2. Capitalization.........................................9
SECTION 2.3. Subsidiaries...........................................9
SECTION 2.4. Authorization; Binding Agreement......................10
SECTION 2.5. Governmental Approvals................................10
SECTION 2.6. No Violations.........................................11
SECTION 2.7. Company Securities Filings............................11
SECTION 2.8. Litigation; Liabilities...............................12
SECTION 2.9. Financial Statements..................................12
SECTION 2.10. Absence of Certain Changes............................13
SECTION 2.11. Related Party Transactions............................13
SECTION 2.12. Compliance with Laws; Permits.........................13
SECTION 2.13. Finders and Investment Bankers........................13
SECTION 2.14. Material Contracts....................................14
SECTION 2.15. Employee Benefit Plans................................15
SECTION 2.16. Taxes and Returns.....................................16
SECTION 2.17. Takeover Statutes.....................................18
SECTION 2.18. Intellectual Property.................................18
SECTION 2.19. Environmental Matters.................................19
SECTION 2.20. Property..............................................21
SECTION 2.21. Fairness Opinion......................................24
SECTION 2.22. Labor Relations.......................................24
SECTION 2.23. Insurance.............................................24
SECTION 2.24. Major Customers and Suppliers.........................25
SECTION 2.25. Tax Treatment.........................................25
SECTION 2.26. Voting Agreements.....................................25
SECTION 2.27. Miscellaneous Agreement...............................25
SECTION 2.28. Conflicts of Interest.................................25
SECTION 2.29. Accounts Receivable; Inventory........................25
SECTION 2.30. Products Liability....................................26
SECTION 2.31. Ancillary Agreements..................................26
SECTION 2.32. Accuracy of Information; Full Disclosure..............26
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
SECTION 3.1. Organization and Good Standing........................27
SECTION 3.2. Capitalization........................................27
SECTION 3.3. Authorization; Binding Agreement......................28
SECTION 3.4. Governmental Approvals................................28
SECTION 3.5. No Violations.........................................28
SECTION 3.6. Parent Securities Filings.............................28
SECTION 3.7. Tax Treatment.........................................29
SECTION 3.8. Financial Statements..................................29
SECTION 3.9. Absence of Certain Changes............................29
SECTION 3.10. Accuracy of Information; Full Disclosure..............30
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.1. Conduct of Business...................................30
SECTION 4.2. Notification of Certain Matters.......................34
SECTION 4.3. Access and Information................................35
SECTION 4.4. Recommendation; Stockholder Approval..................35
SECTION 4.5. Commercially Reasonable Efforts.......................36
SECTION 4.6. Compliance............................................36
SECTION 4.7. Company Benefit Plans.................................36
SECTION 4.8. No Solicitation.......................................36
SECTION 4.9. Commission and Stockholder Filings; Other Reports.....38
SECTION 4.10. Takeover Statutes.....................................38
ARTICLE V
COVENANTS OF PARENT
SECTION 5.1. Notification of Certain Matters.......................38
SECTION 5.2. Commercially Reasonable Efforts.......................39
SECTION 5.3. Compliance............................................40
SECTION 5.4. Director and Officer Liability........................40
SECTION 5.5. Access and Information................................40
SECTION 5.6. Blue Sky Permits......................................41
SECTION 5.7. Listing...............................................41
SECTION 5.8. Employee Benefits.....................................41
ARTICLE VI
COVENANTS OF THE PARTIES
SECTION 6.1. Registration Statement; Proxy Statement...............42
SECTION 6.2. Further Assurances....................................43
SECTION 6.3. Affiliate Letters.....................................43
SECTION 6.4. Tax Treatment.........................................43
SECTION 6.5. Letters from Accountants..............................44
SECTION 6.6. Section 16(b).........................................44
SECTION 6.7. Press Release and Public Announcements................44
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.1. Conditions to Each Party's Obligations................44
7.1.1. Company Stockholder Approval..........................44
7.1.2. No Injunction or Action...............................45
7.1.3. Governmental Approvals................................45
7.1.4. HSR Act...............................................45
7.1.5. Reorganization Opinion................................45
7.1.6. Registration Statement Effective......................45
7.1.7. Stock Exchange Listing................................45
SECTION 7.2. Conditions to Obligations of the Company..............45
7.2.1. Parent Representation and Warranties..................45
7.2.2. Performance by Parent.................................46
7.2.3. No Material Adverse Change............................46
7.2.4. Certificates and Other Deliveries.....................46
SECTION 7.3. Conditions to Obligations of Parent...................46
7.3.1. Company Representations and Warranties................46
7.3.2. Performance by the Company............................46
7.3.3. No Material Adverse Change............................46
7.3.4. Miscellaneous Agreement...............................47
7.3.5. Termination of Certain Agreements.....................47
7.3.6. Consents..............................................47
7.3.7. Certificates and Other Deliveries.....................47
ARTICLE VIII
TERMINATION
SECTION 8.1. Termination...........................................47
SECTION 8.2. Effect of Termination.................................48
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Notices...............................................49
SECTION 9.2. Non-Survival of Representations and Warranties........50
SECTION 9.3. Amendments; No Waivers................................50
SECTION 9.4. Expenses..............................................51
SECTION 9.5. Successors and Assigns................................51
SECTION 9.6. Governing Law.........................................51
SECTION 9.7. Jurisdiction..........................................51
SECTION 9.8. Waiver of Jury Trial..................................51
SECTION 9.9. Counterparts; Effectiveness...........................51
SECTION 9.10. Entire Agreement......................................52
SECTION 9.11. Captions..............................................52
SECTION 9.12. Severability..........................................52
SECTION 9.13. Specific Performance..................................52
SECTION 9.14. Disclosure Schedule...................................52
SECTION 9.15. Knowledge.............................................52
EXHIBITS
Exhibit A - Form of REI Voting Agreement
Exhibit B - Form of Xxxxxxx Voting Agreement
Exhibit C - Form of Miscellaneous Agreement
Exhibit D - Form of Xxxxxxx Non-Compete Agreement
Exhibit E - Form of Severance Agreement
Exhibit F - Form of Company Affiliate's Letter
DEFINITIONS
ACMs.........................21
Acquisition Transaction......37
Agreement.....................1
Benefit Plans................15
BOK Forbearance Agreement....31
Bylaws........................8
Cedarapids Lawsuits........AI-1
Certificate...................3
Certificate of Incorporation..8
Cifali Agreement...........AI-1
Claim........................18
Closing.......................2
Closing Date..................2
Closing Debt..................3
Closing Outstanding
Share Number.................3
Code..........................1
Commission....................6
Company.......................1
Company Class A Stock.........2
Company Common Stock..........2
Company Confidentiality
Agreement...................41
Company Disclosure Schedule...8
Company Employees............41
Company ERISA Affiliate......15
Company Group................16
Company Intellectual
Property....................19
Company Material Adverse
Effect.......................8
Company Permits..............13
Company Preferred Stock.......9
Company Proxy Statement......42
Company Securities Filings...11
Company Stock Option..........5
Company Stock Plans...........5
Company Stockholder
Approval....................35
Company Stockholders
Meeting.....................35
Company Subsidiaries..........8
Company Voting Stock..........2
Confidentiality Agreement....33
Consent......................10
Dissenting Shares.............7
Effective Time................2
End Date.....................48
Environmental Laws...........21
Environmental Matter.........21
Environmental Permits........19
ERISA........................15
Event........................13
Exchange Act..................9
Exchange Agent................4
Exchange Ratio................3
Expenses.....................48
Facilities...................21
Financial Advisor............38
Form S-4.....................42
GAAP.........................12
Governmental Authority.......10
Hazardous Materials..........21
High Target Debt..............3
HSR Act......................11
Indebtedness.................31
Indemnified Person...........40
IRS..........................15
Law..........................11
Leased Properties............23
Lien..........................9
Litigation...................12
Material Contract............14
Merger........................1
Merger Benefit Detriment.....39
Merger Consideration..........3
Merger Sub....................1
Miscellaneous Agreement.......1
New Plans....................41
NYSE..........................6
OGCA..........................1
Oklahoma Certificate of
Merger.......................2
Oklahoma Secretary of State...2
Old Plans....................41
Owned Property...............22
Parent........................1
Parent Common Stock...........3
Parent Material Adverse
Effect......................27
Parent Preferred Stock.......27
Parent Securities Filings....29
Parent Stock Option...........5
Parent Subsidiaries..........27
PCBs.........................21
Person........................4
Representatives..............36
Securities Act................6
Severance Agreement...........1
Significant Contracts........14
Significant Transaction......14
Subsidiary....................8
Superior Proposal............37
Surviving Corporation.........1
Xxxxxxx Non-Compete
Agreement....................1
Takeover Proposal............37
Takeover Statute.............18
Target Debt...................3
Tax..........................17
Tax Return...................17
Taxes........................17
Termination Fee..............48
Voting Agreements.............1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of June
27, 2001 by and among CMI CORPORATION, an Oklahoma corporation (the
"Company"), TEREX CORPORATION, a Delaware corporation ("Parent"), and
CLAUDIUS ACQUISITION CORP., an Oklahoma corporation and a wholly owned
subsidiary of Parent ("Merger Sub").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and
the Company have approved this Agreement, and deem it advisable and in the
best interests of their respective stockholders to consummate the merger of
Merger Sub with and into the Company on the terms and conditions set forth
in this Agreement (the "Merger");
WHEREAS, for United States federal income tax purposes, it is intended
that the Merger qualify as a "reorganization" within the meaning of Section
368 of the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder (the "Code");
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to the willingness of Parent to
enter into this Agreement, Parent, Merger Sub and the Company are entering
into voting agreements in the form of the agreements attached as Exhibit A
and Exhibit B (the "Voting Agreements"); and
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to the willingness of Parent to
enter into this Agreement, the Company is entering into a miscellaneous
agreement in the form of the agreement attached as Exhibit C (the
"Miscellaneous Agreement"), a non-competition, confidentiality and
non-solicitation agreement in the form of the agreement attached as Exhibit
D (the "Xxxxxxx Non-Compete Agreement") and a severance agreement in the
form of the agreement attached as Exhibit E (the "Severance Agreement").
NOW, THEREFORE, in consideration of the promises and the respective
representations, warranties, covenants, and agreements set forth herein,
the parties agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1. The Merger. (a) Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Oklahoma
General Corporation Act (the "OGCA"), Merger Sub shall be merged with and
into the Company at the Effective Time (as defined in Section 1.1(c)).
Following the Effective Time, the separate corporate existence of Merger
Sub shall cease and the Company shall be the surviving corporation (the
"Surviving Corporation") and shall continue as a wholly owned subsidiary of
Parent to be governed by the laws of the State of Oklahoma, and the
separate corporate existence of the Company, with all its rights,
privileges, immunities, powers, franchises, restrictions, disabilities and
duties, shall continue unaffected by the Merger except as set forth in this
Agreement.
(b) The closing of the Merger (the "Closing") will take place at
10:00 a.m., local time, at the offices of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 on a date to be
specified by the parties (the "Closing Date"), which shall be no later than
the second business day after the first date that all of the conditions set
forth in Article VII (other than those conditions that by their nature are
to be fulfilled at the Closing, but subject to the fulfillment or waiver of
such conditions) have been satisfied or waived, unless another place, time
or date is agreed to by the parties.
(c) Subject to the provisions of this Agreement, as soon as
practicable on or after the Closing Date, the parties shall file with the
Secretary of State of the State of Oklahoma (the "Oklahoma Secretary of
State") a certificate of merger (the "Oklahoma Certificate of Merger") in
accordance with the OGCA and make all other filings or recordings required
under the OGCA as are necessary or advisable to effect the Merger. The
Merger shall become effective at the time of the filing of the Oklahoma
Certificate of Merger with the Oklahoma Secretary of State in accordance
with the OGCA or at such subsequent date or time as Parent and the Company
shall agree and specify in the Oklahoma Certificate of Merger (the time the
Merger becomes effective being hereinafter referred to as the "Effective
Time").
(d) The Merger shall have the effects specified in the OGCA.
(e) The certificate of incorporation and bylaws of the Company,
each as in effect immediately prior to the Effective Time, shall be the
certificate of incorporation and bylaws of the Surviving Corporation until
amended in accordance with applicable law.
(f) At the Effective Time, the directors and officers of Merger
Sub shall be the directors and officers of the Surviving Corporation.
SECTION 1.2. Conversion of Shares. (a) At the Effective Time, by
virtue of the Merger and without any action on the part of the holder
thereof:
(i) each share of voting class A common stock, par value
$0.10 per share, of the Company (the "Company Class A Stock") and each
share of the voting common stock, par value $0.10 per share, of the
Company (the "Company Voting Stock" and, together with the Company
Class A Stock, the "Company Common Stock") held by the Company as
treasury stock or owned by Parent, or any Subsidiary (as defined
below) of Parent or any Subsidiary of the Company immediately prior to
the Effective Time shall be canceled, and no payment shall be made
with respect thereto;
(ii) each share of common stock, par value $0.01 per share,
of Merger Sub outstanding immediately prior to the Effective Time
shall be converted into and become one share of common stock of the
Surviving Corporation with the same rights, powers and privileges as
the shares so converted and shall constitute the only outstanding
shares of capital stock of the Surviving Corporation; and
(iii) each share of Company Common Stock outstanding
immediately prior to the Effective Time shall, except as otherwise
provided in Section 1.2(a)(i), be converted into the right to receive
0.16 shares of common stock, par value $0.01 per share, of Parent (the
"Parent Common Stock"), subject to adjustment as provided in Section
1.2(b) (the "Exchange Ratio").
(b) (i) In the event that the consolidated net debt of the
Company, calculated as specified in Appendix I, as of the end of the last
business day of the last full week immediately preceding the Closing Date
(the "Closing Debt"), is greater than $75,250,000 (the "Target Debt"), the
Exchange Ratio shall be adjusted to a number (rounded down to the nearest
ten-thousandth) equal to the product of .16 multiplied by a fraction, (A)
the numerator of which is the sum of (x) the product of $3.5536 and the
Closing Outstanding Share Number (as defined below) and (y) the Target
Debt, and (B) the denominator of which is the sum of (x) the product of
$3.5536 and the Closing Outstanding Share Number and (y) the Closing Debt.
(ii) In the event that the Closing Debt is greater than
$90,000,000 (the "High Target Debt"), the Exchange Ratio shall be
adjusted to a number (rounded down to the nearest ten-thousandth)
equal to the product of .1458 multiplied by a fraction, (A) the
numerator of which is (x) the product of $3.2382 and the Closing
Outstanding Share Number minus (y) the Closing Debt minus the High
Target Debt, and (B) the denominator of which is the product of
$3.2382 and the Closing Outstanding Share Number.
(c) One business day prior to the Closing Date, the Company shall
deliver to Parent (x) a certificate, executed by the Chief Financial
Officer of the Company, certifying to Parent the Closing Debt, the amount
of each of the items comprising the Closing Debt set forth on Appendix I,
and such other information regarding the calculation of the Closing Debt as
Parent shall reasonably request and (y) a certificate executed by the
Company's stock transfer agent certifying the number of shares of Company
Common Stock outstanding as of the close of business on the immediately
preceding business day (the "Closing Outstanding Share Number").
(d) All Parent Common Stock issued as provided in Section
1.2(a)(iii) shall be of the same class and shall have the same terms as the
currently outstanding Parent Common Stock. The shares of Parent Common
Stock to be received as consideration pursuant to the Merger with respect
to shares of Company Common Stock (together with cash in lieu of fractional
shares of Parent Common Stock as provided in Section 1.6) is referred to
herein as the "Merger Consideration."
(e) From and after the Effective Time, all shares of Company
Common Stock converted in accordance with Section 1.2(a)(iii) shall no
longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and each holder of a certificate representing any
such shares (a "Certificate") shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration and any
dividends payable pursuant to Section 1.3(f). From and after the Effective
Time, all certificates representing the common stock of Merger Sub shall be
deemed for all purposes to represent the number of shares of common stock
of the Surviving Corporation into which they were converted in accordance
with Section 1.2(a)(ii).
SECTION 1.3. Surrender and Payment. (a) Prior to the Effective Time,
Parent shall appoint American Stock Transfer & Trust Co. or such other
exchange agent reasonably acceptable to the Company (the "Exchange Agent")
for the purpose of exchanging Certificates for the Merger Consideration. At
the Effective Time, Parent shall deposit with the Exchange Agent, for the
benefit of the holders of the Certificates for exchange in accordance with
this Article I, certificates representing shares of Parent Common Stock
issuable pursuant to this Article I upon surrender of the Certificates.
Parent shall make available to the Exchange Agent from time to time as
required after the Effective Time cash necessary to pay dividends and other
distributions in accordance with this Article I and to make payments in
lieu of any fractional shares of Parent Common Stock in accordance with
Section 1.6. Promptly after the Effective Time, Parent will send, or will
cause the Exchange Agent to send, to each holder of record of shares of
Company Common Stock as of the Effective Time, a letter of transmittal for
use in such exchange (which shall specify that the delivery shall be
effected, and risk of loss and title shall pass, only upon proper delivery
of the Certificates to the Exchange Agent) in such form as the Company and
Parent may reasonably agree, for use in effecting delivery of shares of
Company Common Stock to the Exchange Agent.
(b) Each holder of shares of Company Common Stock that have been
converted into a right to receive the Merger Consideration, upon surrender
to the Exchange Agent of a Certificate, together with a properly completed
letter of transmittal, will be entitled to promptly receive the Merger
Consideration in respect of the shares of Company Common Stock represented
by such Certificate. Until so surrendered, each such Certificate shall,
after the Effective Time, represent for all purposes only the right to
receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be issued to
or registered in the name of a Person (as defined below) other than the
Person in whose name the applicable surrendered Certificate is registered,
it shall be a condition to such issuance or registration that the
surrendered Certificate shall be properly endorsed or otherwise be in
proper form for transfer and that the Person requesting such delivery of
the Merger Consideration shall pay to the Exchange Agent any transfer or
other taxes required as a result of such issuance or registration in the
name of a Person other than the registered holder of such Certificate or
establish to the reasonable satisfaction of the Exchange Agent that such
tax has been paid or is not payable. For purposes of this Agreement,
"Person" means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or any agency or
instrumentality thereof.
(d) After the Effective Time, there shall be no further
registration of transfers of shares of Company Common Stock. If, after the
Effective Time, Certificates are presented to the Exchange Agent, the
Surviving Corporation or Parent, they shall be canceled and exchanged for
the Merger Consideration provided for, and in accordance with the
procedures set forth, in this Article I.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.3(a) that remains unclaimed by the
holders of shares of Company Common Stock six months after the Effective
Time shall be returned to Parent, upon demand, and any such holder who has
not exchanged such holder's shares of Company Common Stock for the Merger
Consideration in accordance with this Section 1.3 prior to that time shall
thereafter look only to Parent for delivery of the Merger Consideration in
respect of such holder's shares. Notwithstanding the foregoing, Parent
shall not be liable to any holder of shares for any Merger Consideration
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.
(f) No dividends or other distributions with respect to shares of
Parent Common Stock shall be paid to the holder of any unsurrendered
Certificates until such Certificates are surrendered as provided in this
Section 1.3. Subject to the effect of applicable laws, following such
surrender, there shall be paid, without interest, to the record holder of
the shares of Parent Common Stock issued in exchange therefor (i) at the
time of such surrender, all dividends and other distributions payable in
respect of such Parent Common Stock with a record date after the Effective
Time and a payment date on or prior to the date of such surrender and not
previously paid and (ii) at the appropriate payment date, the dividends or
other distributions payable with respect to such Parent Common Stock with a
record date after the Effective Time but with a payment date subsequent to
such surrender. For purposes of dividends or other distributions in respect
of Parent Common Stock, all shares of Parent Common Stock to be issued
pursuant to the Merger shall be entitled to dividends pursuant to the
immediately preceding sentence as if issued and outstanding as of the
Effective Time.
(g) The Exchange Agent shall invest any cash included in the
Merger Consideration, as directed by Parent, on a daily basis; provided,
however, that no such investment or loss thereon shall affect the amounts
payable or the timing of the amounts payable to the Company's stockholders
pursuant to the provisions of this Article I. Any interest and other income
resulting from such investments shall be paid to Parent upon the six-month
anniversary of the Effective Time.
SECTION 1.4. Stock Options and Equity Awards.
-------------------------------
(a) At the Effective Time, each outstanding employee or director
option to purchase shares of Company Common Stock (a "Company Stock
Option") granted under the Company's plans or agreements pursuant to which
Company Stock Options or other stock-based awards of the Company have been
or may be granted (collectively, the "Company Stock Plans"), whether vested
or not vested, shall be deemed assumed by Parent. At and after the
Effective Time (1) each Company Stock Option then outstanding shall become
an option (a "Parent Stock Option") to acquire the number (rounded down to
the nearest whole number) of shares of Parent Common Stock determined by
multiplying (x) the number of shares of Company Common Stock subject to
such Company Stock Option immediately prior to the Effective Time by (y)
the Exchange Ratio (as adjusted pursuant to Section 1.2(b)), and (2) the
exercise price per share of Parent Common Stock subject to any such Company
Stock Option at and after the Effective Time shall be an amount (rounded
down to the nearest one-hundredth of a cent) equal to (x) the exercise
price per share of Company Common Stock subject to the applicable Company
Stock Option prior to the Effective Time, divided by (y) the Exchange Ratio
(as adjusted pursuant to Section 1.2(b)). Other than as provided above, as
of and after the Effective Time, each Parent Stock Option shall be subject
to the terms and conditions of the applicable Company Stock Option as in
effect immediately prior to the Effective Time, but giving effect to the
Merger.
(b) 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 Parent Stock Options.
(c) On or as soon as practicable after the Effective Time, Parent
shall file with the Securities and Exchange Commission (the "Commission") a
registration statement on an appropriate form or a post-effective amendment
to a previously filed registration statement under the Securities Act of
1933, as amended, and the rules and regulations thereunder (the "Securities
Act"), with respect to the Parent Common Stock subject to Parent Stock
Options and shall use commercially reasonable efforts to maintain the
current status of the prospectus contained therein, as well as comply with
any applicable state securities or "blue sky" laws, for so long as such
options remain outstanding.
SECTION 1.5. Adjustments. If at any time during the period between the
date of this Agreement and the Effective Time, any change in the
outstanding shares of capital stock of Parent or the Company shall occur by
reason of any reclassification, recapitalization, stock split or
combination, exchange or readjustment of shares, or any similar
transaction, or any stock dividend thereon with a record date during such
period, the Merger Consideration shall be appropriately adjusted to provide
the holders of shares of Company Common Stock the same economic effect as
contemplated by this Agreement prior to such event.
SECTION 1.6. Fractional Shares. No fractional shares of Parent Common
Stock shall be issued in the Merger, but in lieu thereof, each holder of
shares of Company Common Stock otherwise entitled to a fractional share of
Parent Common Stock will be entitled to receive, from the Exchange Agent in
accordance with the provisions of this Section 1.6, an amount of cash,
without interest thereon (rounded to the nearest whole cent), equal to the
product of (i) such fraction of a share of Parent Common Stock multiplied
by (ii) the average of the closing price of one share of Parent Common
Stock on The New York Stock Exchange, Inc. (the "NYSE") composite
transaction reporting system as reported in The Wall Street Journal (but
subject to correction for typographical or other manifest errors in such
reporting) over the ten trading-day period immediately preceding the
Closing Date. The fractional shares of Parent Common Stock will be
aggregated and no stockholder of the Company will be entitled to receive
cash in an amount equal to or greater than the value of one full share of
Parent Common Stock.
SECTION 1.7. Withholding Rights. Each of the Surviving Corporation and
Parent shall be entitled to deduct and withhold from the consideration
otherwise payable to any Person pursuant to this Article I such amounts as
it is required to deduct and withhold with respect to the making of such
payment under any provision of federal, state, local or foreign tax law. To
the extent that amounts are so withheld by the Surviving Corporation or
Parent, as the case may be, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares
of Company Common Stock in respect of which such deduction and withholding
was made by the Surviving Corporation or Parent, as the case may be.
SECTION 1.8. Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming the Certificate to be lost, stolen or destroyed and, if
required by Parent or the Surviving Corporation, the posting by that Person
of a bond, in such reasonable amount as the Surviving Corporation may
direct (which shall not exceed amounts generally required by Parent from
holders of Parent Common Stock under similar circumstances), as indemnity
against any claim that may be made against it with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration to be paid in
respect of the shares represented by such Certificates as contemplated by
this Article I.
SECTION 1.9. Shares Held by Company Affiliates. Notwithstanding
anything to the contrary contained in this Agreement, no shares of Parent
Common Stock (or certificates therefor) shall be issued in exchange for any
Certificate to any Person who may be an "affiliate" of the Company
(identified pursuant to Section 6.3) until the Person shall have delivered
to Parent and the Company a duly executed letter as contemplated by Section
6.3.
SECTION 1.10. Appraisal Rights. In accordance with Section 1091(B) of
the OGCA, no appraisal rights shall be available to holders of shares of
Company Class A Stock in connection with the Merger. Holders of Company
Voting Stock which are issued and outstanding immediately prior to the
Effective Time and which are held by a holder who has not voted those
shares in favor of the approval and adoption of this Agreement, who shall
have delivered a written demand for appraisal of those shares in accordance
with the OGCA and who, as of the Effective Time, shall not have effectively
withdrawn or lost this right to appraisal (the "Dissenting Shares") shall
be entitled to those rights (but only those rights) as are granted by
Section 1091 of the OGCA. Each holder of Dissenting Shares who becomes
entitled to payment for those Dissenting Shares pursuant to Section 1091 of
the OGCA shall receive payment from the Surviving Corporation in accordance
with the OGCA; provided, however, that (i) if any holder of Dissenting
Shares shall have failed to establish their entitlement to appraisal rights
as provided in Section 1091 of the OGCA, (ii) if any holder of Dissenting
Shares shall have effectively withdrawn the holder's demand for appraisal
of the holder's shares or lost the holder's right to appraisal and payment
for the holder's shares under Section 1091 of the OGCA or (iii) if neither
any holder of Dissenting Shares nor the Surviving Corporation shall have
filed a petition demanding a determination of the value of all Dissenting
Shares within the time provided in Section 1091 of the OGCA, the holder
shall forfeit the right to appraisal of those Dissenting Shares and each
Dissenting Share shall be exchanged pursuant to Section 1.2 of this
Agreement. The Company shall give Parent prompt notice of any demands
received by the Company for appraisal of Company Voting Stock, and Parent
shall have the right to conduct all negotiations and proceedings with
respect to those demands.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the corresponding sections of the Company's
disclosure schedule, which has been delivered by the Company to Parent
prior to the execution of this Agreement (the "Company Disclosure
Schedule"), the Company hereby represents and warrants to Parent as
follows:
SECTION 2.1. Organization and Good Standing; Organizational Documents.
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Oklahoma. Each of the
Company's Subsidiaries (the "Company Subsidiaries") is a corporation or
other business entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization.
Each of the Company and the Company Subsidiaries is qualified or licensed
to do business as a foreign corporation or other business entity, as
applicable, and is in good standing, in each jurisdiction where the
character of its properties owned, operated or leased or the nature of its
activities makes such qualification necessary, except where the failure to
be so qualified or licensed will not, individually or in the aggregate,
have a Company Material Adverse Effect. As used in this Agreement, the term
"Company Material Adverse Effect" means any change, effect, circumstance or
event that is or is reasonably likely to (i) be materially adverse to the
business, results of operations, assets or liabilities, financial condition
or prospects of the Company and the Company Subsidiaries taken as a whole
or (ii) materially adversely affect the ability of the Company to perform
its obligations under this Agreement or timely consummate the transactions
contemplated by this Agreement, other than any such change, effect,
circumstance or event resulting from any changes in general economic,
regulatory or political conditions. The Company and the Company
Subsidiaries have all requisite corporate or similar organizational power
and all governmental licenses, authorizations, consents and approvals
required to carry on their respective businesses as they are now being
conducted and necessary to own, operate and lease their properties and
assets, except those licenses, authorizations, consents and approvals, the
failure of which to possess will not, individually or in the aggregate,
have a Company Material Adverse Effect. As used in this Agreement, a
"Subsidiary" means, with respect to any corporation or other entity, any
other corporation or other entity in which the first entity owns, directly
or indirectly, more than fifty percent of the securities or other ownership
interest having by their terms ordinary voting power to elect at least a
majority of the board of directors or other Persons performing similar
functions.
(b) The Company has furnished or otherwise made available to
Parent a complete and correct copy of the Company's Certificate of
Incorporation and all amendments thereto, as currently in effect (the
"Certificate of Incorporation") and Bylaws and all amendments thereto, as
currently in effect (the "Bylaws"). The Certificate of Incorporation and
Bylaws and all similar organizational documents of the Company Subsidiaries
are in full force and effect. The Company is not in violation of the
Certificate of Incorporation or Bylaws and, except as will not,
individually or in the aggregate, have a Company Material Adverse Effect,
none of the Company Subsidiaries is in violation of any similar
organizational documents of such Company Subsidiary.
SECTION 2.2. Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of 20,000 shares of Company Voting
Stock, 45,000,000 shares of Company Class A Stock and 4,000,000 shares of
preferred stock, par value $1.00 per share, of the Company (the "Company
Preferred Stock"). Of such authorized shares, as of the date hereof, there
are issued and outstanding 602 shares of Company Voting Stock, 21,690,886
shares of Company Class A Stock and no shares of Company Preferred Stock.
No shares of Company Common Stock or Company Preferred Stock are issued and
held in the treasury of the Company and no other capital stock of the
Company is issued or outstanding. All issued and outstanding shares of
Company Common Stock are duly authorized, validly issued and outstanding,
fully paid and nonassessable and were issued free of preemptive rights in
compliance with applicable Law (as defined below). There are no outstanding
rights, including stock appreciation rights, subscriptions, warrants, puts,
calls, unsatisfied preemptive rights, options or other agreements of any
kind relating to, or the value of which is tied to the value of, any of the
outstanding, authorized but not issued, unauthorized or treasury shares of
the capital stock or any other security of the Company, and there is no
authorized or outstanding security of any kind convertible into or
exchangeable for any such capital stock or other security. There are no
restrictions imposed by the Company upon the transfer of or otherwise
pertaining to the securities (including, but not limited to, the ability to
pay dividends thereon) or retained earnings of the Company and the Company
Subsidiaries or the ownership thereof other than those imposed by the
Securities Act, the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (the "Exchange Act"), applicable state
securities Laws, applicable corporate Law or the Certificate of
Incorporation.
SECTION 2.3. Subsidiaries. The Company does not own, directly or
indirectly, any capital stock or other proprietary interest in any company,
association, trust, partnership, joint venture or other entity (other than
the Company Subsidiaries). Each Company Subsidiary is, directly or
indirectly, wholly owned by the Company and all of the capital stock and
other interests of the Company Subsidiaries so held by the Company are
owned by it, free and clear of any Lien (as defined below). All of the
outstanding shares of capital stock in each of the Company Subsidiaries are
duly authorized, validly issued and outstanding, fully paid and
nonassessable, and were issued free of preemptive rights in compliance with
applicable corporate and securities laws. There are no irrevocable proxies
or similar obligations with respect to such capital stock of the Company
Subsidiaries held by the Company and no equity securities or other
interests of any of the Company Subsidiaries are or may become required to
be issued or purchased by reason of any options, warrants, rights to
subscribe to, puts, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
shares of any capital stock of any Company Subsidiary, and there are no
contracts, commitments, understandings or arrangements by which any Company
Subsidiary is 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 for such
shares. The term "Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset, other than liens for Taxes not yet due and payable
in the ordinary course of business.
SECTION 2.4. Authorization; Binding Agreement. (a) The Company has all
requisite corporate power and authority to execute and deliver this
Agreement and the Voting Agreements and to consummate the transactions
contemplated hereby and thereby. This Agreement and the Voting Agreements,
the execution and delivery of this Agreement and the Voting Agreements and
the consummation of the transactions contemplated hereby and thereby,
including, but not limited to, the Merger, have been duly and validly
authorized by the Board of Directors of the Company, and no other corporate
proceedings on the part of the Company or any Company Subsidiary are
necessary to authorize the execution and delivery of this Agreement and the
Voting Agreements or to consummate the transactions contemplated hereby and
thereby (other than the approval and adoption of this Agreement and the
transactions contemplated hereby by the stockholders of the Company in
accordance with the OGCA and the Certificate of Incorporation and Bylaws
and the filing of the Oklahoma Certificate of Merger in accordance with the
OGCA). This Agreement and the Voting Agreements have been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery of (i) this Agreement by Parent and Merger Sub and
(ii) the Voting Agreements by Parent and the other parties thereto,
constitute the legal, valid and binding agreements of the Company,
enforceable against the Company in accordance with their terms.
(b) The affirmative vote of the holders of a majority of the
Company Common Stock entitled to vote at a duly called meeting of
stockholders at which a quorum is present is the only vote of the holders
of any class or series of capital stock of the Company required to approve
the Merger and this Agreement. No other vote of the stockholders or
directors of the Company or any of the Company Subsidiaries is required by
law, the Certificate of Incorporation or Bylaws or the organizational
documents of any of the Company Subsidiaries or otherwise in order for the
Company to consummate the Merger and the transactions contemplated hereby.
(c) As of the date hereof, the Board of Directors of the Company,
at a meeting duly called and held, has (i) determined that this Agreement
and the transactions contemplated hereby are advisable and are fair to and
in the best interests of the Company and has approved the same and (ii)
resolved to recommend that the Company's stockholders approve this
Agreement and the transactions contemplated herein.
(d) The Company's rights agreement, dated February 3, 1987,
between the Company and the Liberty National Bank & Trust Co. of Oklahoma
City, as rights agent, has expired and no shareholder rights plan or any
similar plan or instrument with respect to the Company is in effect.
SECTION 2.5. Governmental Approvals. No consent, approval, waiver or
authorization of, notice to or declaration or filing (collectively, a
"Consent") with any nation or government, any state or other political
subdivision thereof, any person, authority or body exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government including, without limitation, any governmental or
regulatory authority, agency, department, board, commission or
instrumentality, any court, tribunal or arbitrator and any self-regulatory
organization (each a "Governmental Authority") on the part of the Company
or any of the Company Subsidiaries is required in connection with the
execution or delivery by the Company of this Agreement and the Voting
Agreements or the consummation by the Company of the transactions
contemplated hereby and thereby other than (i) the filing of the Oklahoma
Certificate of Merger with the Oklahoma Secretary of State in accordance
with the OGCA, (ii) filings with the Commission and the NYSE, (iii)
Consents from or with Governmental Authorities set forth in Schedule 2.5 of
the Company Disclosure Schedule, (iv) Consents required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the
rules and regulations promulgated thereunder (the "HSR Act"), and (v) any
filings required or approvals necessary pursuant to any state securities or
"blue sky" laws.
SECTION 2.6. No Violations. The execution and delivery of this
Agreement and the Voting Agreements, the consummation by the Company of the
transactions contemplated hereby and thereby and compliance by the Company
with any of the provisions hereof or thereof will not (i) conflict with or
result in any breach of any provision of the Certificate of Incorporation
or Bylaws or the organizational documents of any of the Company
Subsidiaries, (ii) require any Consent under or result in a violation or
breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation or
acceleration of the performance required) under any of the terms,
conditions or provisions of any Material Contract (as defined below) or
other material obligation to which the Company or any Company Subsidiary is
a party or by which any of them or any of their respective properties or
assets may be bound, (iii) result in the creation or imposition of any Lien
upon any of the assets of the Company or any Company Subsidiary, or (iv)
assuming compliance with the matters referred to in Section 2.5 and subject
to the receipt of the Company Stockholder Approval (as defined below),
conflict with or violate any applicable provision of any constitution,
treaty, statute, law, code, rule, regulation, ordinance, policy or order of
any Governmental Authority or other matters having the force of law
including, but not limited to, any orders, decisions, injunctions,
judgments, awards and decrees of or agreements with any court or other
Governmental Authority ("Law") currently in effect to which the Company or
any Company Subsidiary or its or any of their respective assets are
subject, except in the case of clauses (ii), (iii) and (iv) above, for any
deviations from the foregoing which will not, individually or in the
aggregate, have a Company Material Adverse Effect.
SECTION 2.7. Company Securities Filings. As of their respective dates,
or as of the date of the last amendment thereof, if amended after filing,
none of the Company Securities Filings (as defined below) (including all
schedules and exhibits thereto and documents incorporated by reference
therein) filed prior to or on the date hereof, contained or, as to Company
Securities Filings filed subsequent to the date hereof, will contain, any
untrue statement of a material fact or omitted or, as to Company Securities
Filings subsequent to the date hereof, will omit, to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Each of the Company Securities Filings was filed in a timely manner and at
the time of filing or as of the date of the last amendment thereof, if
amended after filing, complied or, as to Company Securities Filings
subsequent to the date hereof, will comply with the Exchange Act, the
Securities Act or other applicable Law, except for those failures to timely
file or comply which will not, individually or in the aggregate, have a
Company Material Adverse Effect. The term "Company Securities Filings"
means: (i) the Company's Annual Reports on Form 10-K, as amended, for the
years ended December 31, 1999 and 2000, as filed with the Commission; (ii)
the Company's proxy statements relating to all of the meetings of
stockholders (whether annual or special) of the Company since January 1,
2000, as filed with the Commission; and (iii) all other reports, statements
and registration statements and amendments thereto (including, without
limitation, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K,
as amended) filed by the Company with the Commission since January 1, 2000,
together with those reports or other documents of the type described in
clauses (i) through (iii) above, subsequently filed or required to be filed
with the Commission.
SECTION 2.8. Litigation; Liabilities. (a) There is no action, cause of
action, claim, demand, suit, proceeding, citation, summons, subpoena,
inquiry or investigation of any nature, civil, criminal, regulatory or
otherwise, in law or in equity, by or before any court, tribunal,
arbitrator or other Governmental Authority ("Litigation") pending or, to
the knowledge of the Company, threatened against the Company or any Company
Subsidiary, any officer, director, employee or agent thereof, in his or her
capacity as such, or as a fiduciary with respect to any Benefit Plan (as
defined below) of the Company or any Company Subsidiary or otherwise
relating to the Company or any Company Subsidiary or the securities of any
of them, or any properties or rights of the Company or any Company
Subsidiary or any Benefit Plan of the Company or any Company Subsidiary,
except as will not, individually or in the aggregate, have a Company
Material Adverse Effect.
(b) Except for those liabilities disclosed in the financial
statements contained in the Company Securities Filings (or incorporated
therein by reference), neither the Company nor any of the Company
Subsidiaries has or is subject to any liabilities (absolute, accrued,
contingent or otherwise), except liabilities or obligations incurred in the
ordinary course of business consistent with past practice which will not,
individually or in the aggregate, have a Company Material Adverse Effect.
SECTION 2.9. Financial Statements. Each of the consolidated balance
sheets of the Company (including all related notes) included in the
financial statements contained in the Company Securities Filings (or
incorporated therein by reference) present fairly, in all material
respects, the consolidated financial position of the Company as of the
dates indicated, and each of the consolidated statements of operations,
consolidated statements of cash flows and consolidated statements of
changes in common stock and other capital of the Company (including all
related notes) included in such financial statements present fairly, in all
material respects, the consolidated results of operations and cash flows of
the Company for the respective periods indicated, in each case in
conformity with United States generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved
(except for changes in accounting principles disclosed in the notes
thereto) and the rules and regulations of the Commission, except that
unaudited interim financial statements are subject to normal and recurring
year-end adjustments and any other adjustments described therein and do not
include certain notes and other information which may be required by GAAP
but which are not required by Form 10-Q under the Exchange Act. The
financial statements included in the Company Securities Filings are in all
material respects in accordance with the books and records of the Company
and the Company Subsidiaries.
SECTION 2.10. Absence of Certain Changes. Since March 31, 2001, there
has not been: (i) any event, occurrence, fact, condition, change,
development or effect (an "Event") that has had, individually or in the
aggregate, a Company Material Adverse Effect; (ii) any declaration, payment
or setting aside for payment of any dividend (except to the Company or any
Company Subsidiary wholly owned by the Company) or other distribution or
any redemption, purchase or other acquisition of any shares of capital
stock or securities of the Company or any Company Subsidiary; (iii) any
return of any capital or other distribution of assets to stockholders of
the Company or any Company Subsidiary (except to the Company or any Company
Subsidiary wholly owned by the Company); (iv) any acquisition or
disposition by the Company or any Company Subsidiary (by merger,
consolidation, acquisition of stock or assets or otherwise) of any Person
or business; or (v) any material change by the Company to its accounting
policies, practices, or methods.
SECTION 2.11. Related Party Transactions. Since December 31, 2000, the
Company has not entered into any relationship or transaction of a sort that
would be required to be disclosed by the Company pursuant to Item 404 of
Regulation S-K of the Securities Act.
SECTION 2.12. Compliance with Laws; Permits. (a) Neither the Company
nor any of the Company Subsidiaries is in conflict with, or in default or
violation of, any Law in any jurisdiction, foreign or domestic, applicable
to the Company or any of the Company Subsidiaries or by which its or any of
their respective assets or properties is bound or affected, except for such
conflicts, defaults or violations which will not, individually or in the
aggregate, have a Company Material Adverse Effect.
(b) The Company and the Company Subsidiaries hold all permits,
licenses, easements, rights-of-way, variances, exemptions, consents,
certificates, orders and approvals (collectively, the "Company Permits"),
except where the failure to hold such Company Permits will not,
individually or in the aggregate, have a Company Material Adverse Effect.
The Company and the Company Subsidiaries are in compliance with the terms
of the Company Permits except where the failure to so comply, individually
or in the aggregate, will not have a Company Material Adverse Effect.
(c) None of the Company, any Company Subsidiary or, to the
knowledge of the Company, any director, officer, agent, employee or other
person acting on behalf of any of the foregoing has used any corporate
funds for unlawful contributions, payments, gifts or entertainment or for
the payment of other unlawful expenses relating to political activity, or
made any direct or indirect unlawful payments to governmental or regulatory
officials or others.
SECTION 2.13. Finders and Investment Bankers. Neither the Company nor
the Company Subsidiaries nor any of their respective officers or directors
has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the
transactions contemplated hereby other than pursuant to the agreements with
Credit Suisse First Boston Corporation, accurate and complete copies of
which have been provided to Parent.
SECTION 2.14. Material Contracts. (a) Neither the Company nor any
Company Subsidiary is a party or is subject to any note, bond, mortgage,
indenture, contract, lease, license, agreement, understanding, instrument,
bid or proposal that is required to be described in or filed as an exhibit
to an Annual Report on Form 10-K (each a "Material Contract") that has not
been described in or filed by the Company in a Company Securities Filing.
(b) Schedule 2.14(b) sets forth a true and complete list of the
following, true and complete copies of which have been provided or made
available to Parent:
(i) all contracts or agreements involving amounts in excess
of $100,000 (other than purchase and sales orders in the ordinary
course of business);
(ii) all contracts, agreements or other instruments related
to any Significant Transaction (as defined below) pursuant to which
the Company or any Company Subsidiary has any obligations (whether
absolute, accrued, asserted, unasserted or contingent or otherwise,
and whether pursuant to any earn-out or post-closing adjustment) to
issue any shares of capital stock or other securities of the Company
or any securities of any Company Subsidiary or deliver any other
consideration as part of any such Significant Transaction. For
purposes of this Agreement, "Significant Transaction" shall mean any
acquisition or disposition of any business, limited liability company,
association or other business organization or division thereof or any
material partnership interest or material joint venture interest or
any material assets or properties other than in the ordinary course of
business; and
(iii) each employment contract, consulting agreement,
agreement or other instrument to which the Company or any Company
Subsidiary is a party or by which the Company or any Company
Subsidiary otherwise is bound with any management employee of the
Company or any Company Subsidiary.
(c) (i) Each contract or agreement disclosed or required to be
disclosed in Schedule 2.14 of the Company Disclosure Schedule and each
Material Contract (collectively, the "Significant Contracts") is in full
force and effect and constitutes a legal, valid, binding and enforceable
obligation of the Company and each Company Subsidiary to the extent any
such entity is a party thereto and, to the knowledge of the Company, each
other party thereto, except as the enforceability thereof (with respect to
each other party thereto) may be limited by bankruptcy, insolvency,
moratorium and other similar laws relating to or affecting creditors'
rights generally or by general equitable principles.
(ii) No Consent of any person is needed in order that each
such Significant Contract shall continue in full force and effect in
accordance with its terms without penalty, acceleration or rights of
early termination by reason of the consummation of the transactions
contemplated herein, except for Consents the absence of which will
not, individually or in the aggregate, have a Company Material Adverse
Effect.
(iii) Neither the Company nor any Company Subsidiary is in
violation or breach of or default under (nor does there exist any
condition which upon the passage of time or the giving of notice would
cause such violation or default under) any such Significant Contract;
nor to the Company's knowledge is any other party to any such
Significant Contract in violation or breach of or default under (nor
does there exist any condition which upon the passage of time or the
giving of notice would cause such violation or default under) any such
Significant Contract, in each case where such violation or breach,
individually or in the aggregate, has a Company Material Adverse
Effect.
SECTION 2.15. Employee Benefit Plans. (a) Schedule 2.15 of the Company
Disclosure Schedule sets forth a complete list of all material "employee
benefit plans" (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), bonus, pension, profit
sharing, deferred compensation, incentive compensation, excess benefit,
stock, stock option, severance, termination pay, change in control or other
material employee benefit plans, programs, arrangements or agreements
currently maintained, or contributed to, or required to be maintained or
contributed to, by the Company or any Company Subsidiary for the benefit of
any current or former employees, officers, directors or independent
contractors of the Company or any Company Subsidiary or with respect to
which the Company or any Company Subsidiary has any liability
(collectively, the "Benefit Plans"). The Company has delivered or made
available to Parent true, complete and correct copies of each Benefit Plan.
(b) Each Benefit Plan has been administered in accordance with
its terms and in compliance with the applicable provisions of ERISA
(including, without limitation, the making of all contributions and
payments), the Code, and other applicable law, except where the failure to
so administer or comply will not, individually or in the aggregate, have a
Company Material Adverse Effect. All Benefit Plans intended to be qualified
under Section 401(a) of the Code are so qualified and have been the subject
of favorable determination letters from the Internal Revenue Service (the
"IRS"), and, to the knowledge of the Company, no circumstances exist that
could result in the loss of such qualified status.
(c) Neither the Company nor any Company Subsidiary, nor any
current or former Company ERISA Affiliate, has incurred any material
liability under Title IV of ERISA or Section 412 of the Code that will
have, individually or in the aggregate, a Company Material Adverse Effect.
For purposes of this Agreement, a "Company ERISA Affiliate" is a person or
entity that is considered one employer with the Company under Section
4001(a)(15) of ERISA or Section 414 of the Code. No Benefit Plan is subject
to Title IV of ERISA or Section 412 of the Code, and no Benefit Plan is a
"multi-employer plan" (as defined in Section 3(37) of ERISA).
(d) With respect to any Benefit Plan that is an employee welfare
benefit plan (as defined in Section 3(l) of ERISA), (i) no such Benefit
Plan provides benefits, including without limitation, death or medical
benefits, beyond termination of employment or retirement other than (A)
coverage mandated by statute or (B) death or retirement benefits under a
Benefit Plan qualified under Section 401(a) of the Code, and (ii) each such
Benefit Plan (including any such Plan covering retirees or other former
employees) may be amended or terminated without liability, except as will
not, individually or in the aggregate, have a Company Material Adverse
Effect.
(e) There is no pending or, to the Company's knowledge,
threatened litigation relating to employment, termination of employment,
compensation or employee benefits involving the Company or any Company
Subsidiary which, if determined adversely to the Company or any Company
Subsidiary, will, individually or in the aggregate, have a Company Material
Adverse Effect.
(f) In the event that any individual is classified by the Company
or any Company Subsidiary as a non-employee (such as an independent
contractor, leased employee, consultant or special consultant) and is later
reclassified as an employee upon governmental or judicial review,
notwithstanding such reclassification, no such individual shall be eligible
to participate in any Benefit Plan, except where such eligibility will not,
individually or in the aggregate, have a Company Material Adverse Effect.
(g) The execution of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) (i) constitute an event
under any Benefit Plan that will or may result in any payment (whether of
severance pay or otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligation to fund benefits
with respect to any employee of the Company or any Company Subsidiary, or
(ii) result in the triggering or imposition of any restrictions or
limitations on the right of the Company or Parent to cause any such Benefit
Plan to be amended or terminated (or which would result in any materially
adverse consequence for so doing). No payment or benefit that will or may
be made by the Company, Parent, or any of their respective subsidiaries or
affiliates with respect to any employee of the Company or any Company
Subsidiary under any Benefit Plan in connection with the transactions
contemplated by this Agreement will be characterized as an "excess
parachute payment," within the meaning of Section 280G(b)(1) of the Code or
will not be deductible by reason of Section 162(m) of the Code.
(h) Neither the Company nor any Company Subsidiary is a party to
any collective bargaining agreement covering any current or former
employees of either of them. There are no union organizational efforts
pending or, to the Company's knowledge, threatened involving any employees
of the Company or any Company Subsidiary.
SECTION 2.16. Taxes and Returns. (a) (i) All Tax Returns (as defined
below) required to be filed by or on behalf of the Company, each of the
Company Subsidiaries, and each affiliated, combined, consolidated or
unitary group of which the Company or any of the Company Subsidiaries is or
has been a member (a "Company Group") have been timely filed in the manner
prescribed by law, and all such Tax Returns are true, complete and accurate
except to the extent any failures to file or failures to be true, correct
or accurate will not, individually or in the aggregate, have a Company
Material Adverse Effect; (ii) all Taxes (as defined below) due and owing by
the Company, any Company Subsidiary or any Company Group (whether or not
shown on a Tax Return) have been timely paid, or adequately reserved for in
accordance with GAAP, except to the extent any failure to pay or reserve
will not, individually or in the aggregate, have a Company Material Adverse
Effect; (iii) there are no claims or assessments presently pending against
the Company, any Company Subsidiary or any Company Group, for any alleged
Tax deficiency, and the Company has no knowledge of any threatened claims
or assessments against the Company, any Company Subsidiary or any Company
Group for any alleged Tax deficiency, which in either case if upheld will,
individually or in the aggregate, have a Company Material Adverse Effect;
(iv) to the knowledge of the Company, no issues have been raised in any
audit or tax examination of the Company, any of the Company Subsidiaries or
any Company Group which, if determined adversely, will, individually or in
the aggregate, have a Company Material Adverse Effect; (v) there are no
Liens for Taxes on any asset of the Company or any Company Subsidiary,
except for Liens for Taxes not yet due and payable and Liens for Taxes that
will not, individually or in the aggregate, have a Company Material Adverse
Effect; and (vi) the Company and each of the Company Subsidiaries has
complied in all respects with all rules and regulations relating to the
withholding of Taxes (including, without limitation, employee-related
Taxes), except for failures to comply that will not, individually or in the
aggregate, have a Company Material Adverse Effect.
(b) (i) to the Company's knowledge, no taxing authority in any
jurisdiction where the Company or any Company Subsidiary does not file Tax
Returns has made a claim, assertion or threat that the Company or any
Company Subsidiary is or may be subject to Tax in such jurisdiction and
(ii) neither the Company nor any Company Subsidiary has agreed to any
adjustment under Section 481(a) of the Code (or analogous provisions of
state, local or foreign law), as a result of a change of accounting method
or otherwise, or has disposed of any assets under the installment method
pursuant to Section 453 of the Code, in each case under this clause (ii)
which would require the inclusion of a material amount in income after the
Effective Date.
(c) The statutes of limitations for the federal income Tax
Returns of the Company and the Company Subsidiaries (including, without
limitation, any Company Group) have expired or otherwise have been closed
for all taxable periods ending on or before December 31, 1996.
For purposes of this Agreement, (i) "Tax" or "Taxes" means all taxes,
levies or other like assessments, charges or fees (including estimated
taxes, charges and fees), including, without limitation, income,
corporation, advance corporation, gross receipts, transfer, excise,
property, sales, use, value-added, license, payroll, withholding, social
security and franchise or other governmental taxes or charges, imposed by
the United States or any state, county, local or foreign government or
subdivision or agency thereof, any liability for taxes, levies or other
like assessments, charges or fees of another person pursuant to Treasury
Regulation Section 1.1502-6 or any similar or analogous provision of
applicable law or otherwise (including, without limitation, as a transferee
or under a tax sharing or other agreement) and such term shall include any
interest, penalties or additions to tax attributable to such taxes, levies
or other like assessments, charges or fees and (ii) "Tax Return" means any
report, return, statement, declaration or other written information
required to be supplied to a taxing or other Governmental Authority in
connection with Taxes.
SECTION 2.17. Takeover Statutes. No "business combination," "fair
price," "moratorium," "control share acquisition," "interested stockholder"
or other similar antitakeover statute or regulation enacted under Oklahoma
or federal laws in the United States, including, without limitation,
Sections 1090.3, and 1145 to 1155, inclusive, of the OGCA (each a "Takeover
Statute") applicable to the Company or any of the Company Subsidiaries is
applicable to the Merger, this Agreement, the Voting Agreement or the
transactions contemplated hereby and thereby.
SECTION 2.18. Intellectual Property. Except to the extent that would
not, individually or in the aggregate, have a Company Material Adverse
Effect: (a) in each jurisdiction in which the Company has conducted,
conducts or proposes to conduct its business, the Company and each of the
Company Subsidiaries either (1) is the sole and exclusive owner of, with
all right, title and interest in and to, each item of Company Intellectual
Property (as defined below) free and clear of any Liens, or (2) has a valid
and enforceable license to use each item of Company Intellectual Property
free and clear of any Liens (and, for each of (a)(1) or (a)(2), the
consummation of the transactions contemplated hereby will not alter or
impair any such rights); (b) the use of any Company Intellectual Property
by the Company or any of the Company Subsidiaries for the conduct of the
business of the Company and the Company Subsidiaries as they have been,
are, and as they are presently proposed to be conducted does not infringe
on, interfere with, misappropriate or otherwise violate or come into
conflict with the rights of any Person and is in accordance with, and does
not breach, any applicable license pursuant to which the Company or any
Company Subsidiary acquired the right to use any Company Intellectual
Property, and the Company or any Company Subsidiary has not received any
charge, complaint, claim, demand, or notice ("Claim") so alleging
(including any claim that the Company or any of the Company Subsidiaries
must license or refrain from using any Intellectual Property of any other
Person); (c) to the knowledge of the Company, no Person is challenging,
infringing on, interfering with, misappropriating or otherwise violating or
coming into conflict with any right of the Company or any of the Company
Subsidiaries with respect to any Company Intellectual Property; (d) the
Company and the Company Subsidiaries have taken reasonable actions to
maintain and protect the Company Intellectual Property and, to the
knowledge of the Company, no Company Intellectual Property is being used or
enforced in a manner that would result in the abandonment, cancellation or
unenforceability of such Intellectual Property; (e) the Company is not
aware of any Claim that any item of Company Intellectual Property is
invalid nor is the Company aware of any facts that any item of Company
Intellectual Property is invalid; (f) the Company and the Company
Subsidiaries have taken reasonable precautions to protect the secrecy,
confidentiality, and value of their trade secrets, and have entered into
confidential information/non-disclosure agreements with each of its present
and former employees and independent contractors who have contributed to or
participated in the conception and development of the Company Intellectual
Property; (g) the Company Intellectual Property is all the Intellectual
Property that is necessary for the conduct of the businesses of the Company
and the Company Subsidiaries as they have been, are, and are presently
proposed to be conducted; (h) all present and former employees and
independent contractors who have contributed to or participated in the
conception and development of the Company Intellectual Property on behalf
of the Company or any of the Company Subsidiaries have executed enforceable
and appropriate instruments of assignment (including work for hire
agreements with respect to any copyrights) in favor of the Company or one
of the Company Subsidiaries in accordance with applicable Law, that have
conveyed to the Company or one of the Company Subsidiaries full, effective,
exclusive and original ownership in and to all Company Intellectual
Property arising from the efforts of such personnel, including the right to
require the applicant of any item of Company Intellectual Property which is
an application, to transfer ownership to the Company or one of the Company
Subsidiaries one it issues; and (i) the Company and the Company
Subsidiaries do not and will not need, in order to conduct their businesses
as they have been, are, or are presently proposed to be conducted, to
utilize any inventions of any of its employees, former employees (or
persons it currently intends to hire) made while not employed by the
Company or the Company Subsidiaries and the rights to which have not been
fully assigned to the Company or the Company Subsidiaries.
For purposes of this Agreement, "Intellectual Property" shall mean all
(i) trademarks, service marks, brand names, trade dress, trade names,
domain names, and other indications of origin, all goodwill associated with
the foregoing and registrations and applications in connection with the
foregoing in any jurisdiction, including any extension, modification or
renewal of any such registration or application; (ii) inventions,
discoveries and ideas, whether patentable or not and whether or not reduced
to practice and all improvements thereon, in any jurisdiction; (iii)
patents, applications for patents (including, without limitation,
divisions, continuations, continuations-in-part, and renewal applications),
and any renewals, extensions, revisions, reexaminations or reissues
thereof, in any jurisdiction; (iv) nonpublic information, trade secrets and
confidential information and rights in any jurisdiction to limit the use or
disclosure thereof by any Person; (v) writings and other works, whether
copyrightable or not, in any jurisdiction; (vi) copyrights and all
registrations, applications and any renewals thereof; (vii) any other
intellectual property or proprietary rights; (viii) all computer software
(including data and related documentation); (ix) all copies and tangible
embodiments of the foregoing categories of intellectual property (in
whatever form or medium); (x) all licenses, sublicenses, agreements, or
permissions related to any of the foregoing categories of intellectual
property; and (xi) any claims or causes of action arising out of or
relating to any infringement or misappropriation of any of the foregoing.
For the purposes of this Agreement, "Company Intellectual Property" shall
mean all Intellectual Property which is used or has been used in connection
with the businesses of the Company or any of the Company Subsidiaries.
SECTION 2.19. Environmental Matters. (a) Except as will not,
individually or in the aggregate, have a Company Material Adverse Effect:
(i) The Company and the Company Subsidiaries (a) are, and at
all times have been, in compliance with all applicable Environmental
Laws (as defined below), and (b) have obtained, and are in compliance
with, all permits, licenses, authorizations, registrations and other
governmental consents required by applicable Environmental Laws
("Environmental Permits"), and have made all appropriate filings for
issuance or renewal of such Environmental Permits.
(ii) There is no contamination of, and there have been no
releases or, to the Company's knowledge, threatened releases of
Hazardous Materials (as defined below) at the Facilities (as defined
below) or any real property formerly owned, leased or operated by the
Company or any of the Company Subsidiaries (or any predecessor of the
Company or any of the Company Subsidiaries).
(iii) There are no past or present conditions, events,
circumstances, facts, activities, practices, incidents, actions,
omissions or plans that may (a) interfere with or prevent continued
compliance by the Company or any of the Company Subsidiaries with
Environmental Laws and the requirements of Environmental Permits or
(b) to the Company's knowledge, give rise to any liability or other
obligation under any Environmental Laws.
(iv) Neither the Facilities, nor any property formerly
owned, leased, or operated by the Company or any of the Company
Subsidiaries, nor, to the Company's knowledge, any site at or to which
the Company or any of the Company Subsidiaries has disposed of,
transported, or arranged for the transportation of, any Hazardous
Materials, has been listed on, or, to the Company's knowledge,
proposed for listing on, the National Priorities List, the
Comprehensive Environmental Response, Compensation and Liability
Information System list, or any comparable state list of properties to
be investigated and/or remediated, nor has such disposal,
transportation or arrangement been conducted in violation of
Environmental Law.
(b) There are no claims, notices (including, without limitation,
notices that the Company or any of the Company Subsidiaries or any
predecessor of the Company or any of the Company Subsidiaries or any person
whose liability has been retained or assumed contractually by the Company
or any of the Company Subsidiaries is or may be a potentially responsible
person or otherwise liable in connection with any site or other location
containing Hazardous Materials or used for the storage, handling,
treatment, processing, disposal, generation or transportation of Hazardous
Materials), civil, criminal or administrative actions, suits, hearings,
investigations, inquiries or proceedings pending or, to the knowledge of
the Company, threatened that are based on or related to any Environmental
Matters relating to the business of the Company or any of the Company
Subsidiaries.
(c) Except as set forth in Schedule 2.19(c), there are no
underground or aboveground storage tanks, incinerators or surface
impoundments at, on, or about, under or within any Facilities. Schedule
2.19(c) also lists all underground or aboveground storage tanks,
incinerators or surface impoundments that were removed by or at the
direction of the Company or any predecessor entity from any Facilities for
the greater of (i) ten years and (ii) for so long as the Company or any
predecessor entity or any of their affiliates have occupied such
Facilities.
(d) The Company has delivered to Parent true and complete copies
and results of any reports, studies, analyses, tests, or monitoring
possessed or initiated by the Company or any of the Company Subsidiaries
pertaining to Environmental Matters (as defined below).
(e) For the purposes of this Section, the following terms shall
have the meanings indicated:
"Environmental Laws" means any foreign, federal, state or local law,
statute, ordinance, rule or regulation governing Environmental Matters, as
the same have been or may be amended from time to time, including any
common law cause of action providing any right or remedy relating to
Environmental Matters, all indemnity agreements and other contractual
obligations (including leases, asset purchase and merger agreements)
relating to Environmental Matters, and all applicable judicial and
administrative decisions, orders, and decrees relating to Environmental
Matters.
"Environmental Matter" means any matter arising out of, relating to,
or resulting from pollution, contamination, protection of the environment,
human health or safety, health or safety of employees, sanitation, and any
matters relating to emissions, discharges, disseminations, releases or
threatened releases, of Hazardous Materials into the air (indoor and
outdoor), surface water, groundwater, soil, land surface or subsurface,
buildings, facilities, real or personal property or fixtures or otherwise
arising out of, relating to, or resulting from the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, handling,
release or threatened release of Hazardous Materials.
"Facilities" means all real property owned, leased, or operated by the
Company or any of its Subsidiaries and any buildings, facilities,
machinery, equipment, furniture, leasehold and other improvements,
fixtures, vehicles, structures, any related capital items and other
tangible property located on, in, under, or above the real property of the
Company or any of its Subsidiaries.
"Hazardous Materials" means any pollutants, contaminants, toxic or
hazardous or extremely hazardous substances, materials, wastes,
constituents, compounds, chemicals, natural or man-made elements or forces
(including, without limitation, petroleum or any by-products or fractions
thereof, any form of natural gas, lead, asbestos and asbestos-containing
materials ("ACMs"), building construction materials and debris,
polychlorinated biphenyls ("PCBs") and PCB-containing equipment, radon and
other radioactive elements, ionizing radiation, electromagnetic field
radiation and other non-ionizing radiation, sonic forces and other natural
forces, infectious, carcinogenic, mutagenic, or etiologic agents,
pesticides, defoliants, explosives, flammables, corrosives and urea
formaldehyde foam insulation) that are regulated by, or may form the basis
of liability under, any Environmental Laws.
SECTION 2.20. Property. (a) Schedule 2.20 sets forth a list of all
real property owned, leased, or occupied by the Company and the Company
Subsidiaries as of the date hereof.
(b) The Company and the Company Subsidiaries have good and
marketable title to all of the assets and properties which they purport to
own (including those reflected in the financial statements contained in the
Company Securities Filings (or incorporated therein by reference), except
for assets and properties sold, consumed or otherwise disposed of in the
ordinary course of business since the date of such financial statements),
in each case, free and clear of all Liens.
(c) As to each parcel of real property owned in fee (the "Owned
Property"),
(1) The Company and the Company Subsidiaries have good
and marketable fee title subject only to such easements,
restrictions, reservations or other exceptions to title that
do not and will not individually or in the aggregate (x)
prevent, materially restrict or otherwise materially
adversely affect the use of an Owned Property as is
necessary for the conduct of the businesses of the Company
or any Company Subsidiary as they have been or presently are
proposed to be conducted or (y) pose a threat or forfeiture
or reversion of title to any of the Owned Properties.
(2) There are no Liens of record or inchoate against
any of the Owned Properties except for Liens for taxes not
yet due and payable and those liens listed on Schedule
2.20(b).
(3) None of the Owned Properties is subject to any
mortgages, deeds of trust or other security instruments of a
similar nature except as set forth on Schedule 2.20(b).
(4) There are no options, rights of first refusal or
first offer or contracts of sale affecting the Owned
Properties.
(5) The Owned Properties are not in violation of
applicable Laws that would materially adversely affect the
use of an Owned Property nor has the Company or any Company
Subsidiary received any notice of a violation of any Law
relating to the Owned Properties.
(6) There is no pending and, to the knowledge of the
Company and the Company Subsidiaries, no threatened
condemnation of all or any portion of an Owned Property.
(7) All existing utilities required for the use,
operation and maintenance of the Owned Properties are
adequate for such current use, operation and maintenance.
(8) The Company or the Company Subsidiaries is in
possession of the Owned Properties and there are no leases,
tenancies or other occupancies affecting the Owned
Properties.
(9) To the knowledge of the Company and the Company
Subsidiaries, there are no material latent defects or
material adverse physical conditions affecting the
improvements located on the Owned Properties.
(10) The Company and/or the Company Subsidiaries have
rights of egress and access to the Owned Properties
necessary for the conduct of the business thereon.
(d) As to the real property leased by the Company or the Company
Subsidiaries (the "Leased Properties"):
(1) The Company and/or the Company Subsidiaries have
valid and subsisting leasehold estates in the Leased
Properties.
(2) There is no notice of termination or notice of
default that has been received from the lessor of a Leased
Property, and no event has occurred which, with notice and
lapse of time, would constitute a default under any lease of
the Leased Properties.
(3) The Company and/or the Company Subsidiaries have
not assigned, transferred, conveyed, mortgaged or encumbered
any interest in the Leased Properties.
(4) The Leased Properties have all required
governmental approvals (including licenses and permits )
required in connection with the operation and maintenance
thereof and have been operated and maintained in accordance
with applicable Laws.
(5) The Leased Properties are supplied with utilities
and other services necessary for the operation and
maintenance thereof.
(6) There are rights of access for egress and ingress
to each of the Leased Properties necessary for the conduct
of business thereat.
(7) The Company and/or the Company Subsidiaries are in
possession of each of the Leased Properties.
(8) To the knowledge of the Company and the Company
Subsidiaries, there are no material latent defects or
material adverse physical conditions affecting the
improvements located on the Leased Properties.
(9) The Leased Properties are not in violation of
applicable Laws that would materially adversely affect the
use of a Leased Property nor has the Company or the Company
Subsidiaries received any notice of a violation of any Law
relating to the Leased Properties.
(e) All property and assets owned or utilized by the Company and
the Company Subsidiaries are in satisfactory operating condition and repair
(except for ordinary wear and tear), free from any defects (except such
minor defects as do not interfere with the use thereof in the conduct of
the normal operations), have been maintained consistent with the standards
generally followed in the industry and are sufficient to carry on the
business of the Company and the Company Subsidiaries as presently, or
proposed to be, conducted. All buildings, plants and other structures owned
or otherwise utilized by the Company and the Company Subsidiaries are in
good condition and repair (except for ordinary wear and tear).
SECTION 2.21. Fairness Opinion. The Board of Directors of the Company
received from Credit Suisse First Boston Corporation an opinion to the
effect that the Merger Consideration is fair to the holders of the shares
of Company Common Stock from a financial point of view.
SECTION 2.22. Labor Relations. (a) There is no charge pending or, to
the knowledge of the Company, threatened against the Company or any Company
Subsidiary alleging, with respect to any employee or employees of the
Company or any Company Subsidiary, any violation of any statute or
regulation relating to employment and employment practices, or any
violation of any collective bargaining agreement, any unlawful
discrimination in employment practices or any unfair labor practices before
any court, agency, or other judicial or arbitral body, except for any such
violations that will not, individually or in the aggregate, have a Company
Material Adverse Effect.
(b) There are no union organizational efforts, labor strikes,
disputes, slow-downs or work stoppages actually pending or, to the
Company's knowledge, threatened against the Company or any Company
Subsidiary.
(c) No employees of the Company or any Company Subsidiary are
covered by any collective bargaining agreement, and no collective
bargaining agreement or other labor union agreement or agreement with
organized labor for employees of the Company or any Company Subsidiary is
currently being negotiated or pending negotiation.
(d) There has been no concerted work stoppage with respect to the
business activities of the Company or any Company Subsidiary during the
last three years.
(e) There is no complaint against the Company issued by or
pending before the National Labor Relations Board, except for any such
complaint that will not, individually or in the aggregate, have a Company
Material Adverse Effect.
SECTION 2.23. Insurance. The Company and the Company Subsidiaries
maintain in force insurance policies and bonds in such amounts and against
such liabilities and hazards as are, to the Company's knowledge, consistent
with industry practice. A complete list of all material insurance policies
is set forth on Schedule 2.23. The Company is not liable, nor will it
become liable, for any retroactive premium adjustment not reflected in the
financial statements contained in the Company Securities Filings or
otherwise provided for as set forth on Schedule 2.23. All policies are
valid and enforceable and in full force and effect (except as the
enforceability of any such policy may be limited by the insurer's
bankruptcy, insolvency, moratorium and other similar laws relating to or
affecting creditors' rights generally or by general equitable principles),
all premiums owing in respect thereof have been timely paid, and the
Company has not received any notice of premium increase or cancellation
with respect to any of its insurance policies or bonds. Except for any
matters which will not, individually or in the aggregate, have a Company
Material Adverse Effect, there are no claims pending as to which the
insurer has denied liability or is reserving its rights, and all claims
have been timely and properly filed. Within the last three years, the
Company has not been refused any insurance coverage sought or applied for,
and the Company has no reason to believe that its existing insurance
coverage cannot be renewed as and when the same shall expire, upon terms
and conditions standard in the market at the time renewal is sought.
SECTION 2.24. Major Customers and Suppliers. (a) Schedule 2.24(a) sets
forth a list of the ten largest customers of the Company for each of the
fiscal years ended December 31, 1999 and 2000 (determined on the basis of
the total dollar amount of net revenues) showing the dollar amount of net
revenues from each such customer during each such year. To the knowledge of
the Company, no customer of the Company identified pursuant to the
preceding sentence has advised the Company orally or in writing prior to or
as of the date of this Agreement that it (i) is terminating or considering
terminating its business with the Company or (ii) is planning to reduce its
aggregate future spending with the Company or any of its Subsidiaries in
any material manner.
(b) Schedule 2.24(b) sets forth a list of the ten largest
suppliers of the Company in terms of dollar volume during the fiscal years
ended December 31, 1999 and 2000.
SECTION 2.25. Tax Treatment. Neither the Company nor any of the
Company Subsidiaries has taken or agreed to take any action or failed to
take any action, nor, to the knowledge of the Company, has any other Person
taken or agreed to take any action or failed to take any action, nor is the
Company or any of the Company Subsidiaries aware of any facts or
circumstances, that would prevent the Merger from qualifying as a
reorganization within the meaning of Section 368 of the Code.
SECTION 2.26. Voting Agreements. The Company has entered into the
Voting Agreements and such agreements are in full force and effect.
SECTION 2.27. Miscellaneous Agreement. The Company has entered into
the Miscellaneous Agreement and such agreements are in full force and
effect.
SECTION 2.28. Conflicts of Interest. No officer, director, or employee
of the Company or the Company Subsidiaries has or, to the knowledge of the
Company, claims to have (i) any interest in the property, real or personal,
tangible or intangible, including, without limitation, intangibles,
licenses, inventions, technology, processes, designs, computer programs,
know-how and formulae used in the business of the Company or the Company
Subsidiaries or (ii) any contract, commitment or arrangement with the
Company or any Company Subsidiary not generally available to all employees.
SECTION 2.29. Accounts Receivable; Inventory. (a) All accounts
receivable of the Company and the Company Subsidiaries are bona fide
accounts receivable and represent sales actually made in the ordinary
course of business and have been or, to the Company's knowledge, shall be
fully collected when due without resort to litigation and without defense,
offset or counterclaim, in the aggregate face amounts thereof, except to
the extent of the normal allowance for doubtful accounts with respect to
accounts receivable computed in a manner consistent with prior practice as
reflected on the financial statements contained in the Company Securities
Filings (or incorporated therein by reference). To the knowledge of the
Company, there has not been any material change in the collectability of
accounts receivable of the Company and the Company Subsidiaries since the
date of such financial statements.
(b) The inventory (including raw materials, work-in-progress and
finished goods) of the Company and the Company Subsidiaries is merchantable
and of a quality suitable and usable in the ordinary course of business
consistent with past practices, of the Company and the Company Subsidiaries
in all material respects, except for obsolete, damaged, defective or
otherwise unsalable items as to which a adequate provision has been made on
the books of the Company and the Company Subsidiaries. The value of all
inventory items, including finished goods, work-in-process and raw
materials, has been recorded on the books of the Company and the Company
Subsidiaries in accordance with GAAP and fairly reflect the value thereof.
The Company and the Company Subsidiaries have a sufficient quantity of each
type of such inventory and supplies in order to meet the reasonably
foreseeable requirements of the operations of the business of the Company
and the Company Subsidiaries.
SECTION 2.30. Products Liability. (a) Schedule 2.30 sets forth a list,
as of the date hereof, of all the Company's or any Company Subsidiary's
pending and, to the knowledge of the Company, threatened product liability
litigation and claims.
(b) The product liability claims presently pending against the
Company and the Company Subsidiaries do not present loss contingencies,
which, in the aggregate, are inconsistent with the loss contingency
experience of the Company and the Company Subsidiaries. To the knowledge of
the Company, there are no facts that indicate that the reserves for product
liability claims of the Company and the Company Subsidiaries reflected in
the financial statements contained in the Company Securities Filings (or
incorporated therein by reference) are or may be understated. Neither
punitive damages nor any other special damages have been assessed against
the Company or any Company Subsidiary in any product liability action since
January 1, 1990 or, to the knowledge of the Company, at any time on or
prior to such date.
SECTION 2.31. Ancillary Agreements. The Company has entered into the
Xxxxxxx Non-Compete Agreement and the Severance Agreement, and such
agreements are in full force and effect.
SECTION 2.32. Accuracy of Information; Full Disclosure. No
representation or warranty of the Company or the Company Subsidiaries
contained in this Agreement, the Voting Agreements or in the Company
Disclosure Schedule contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary
to make the statements made therein, in the context in which made, not
materially false or misleading. To the knowledge of the Company, there is
no fact that has not been disclosed to Parent that has or could have a
Company Material Adverse Effect, or that could reasonably be expected to
impair the ability of the Company or Parent to consummate the Merger and
the other transactions contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
The Parent hereby represents and warrants to the Company as follows:
SECTION 3.1. Organization and Good Standing. Parent and Merger Sub are
corporations duly organized, validly existing and in good standing under
the laws of the State of Delaware and Oklahoma, respectively. Each of
Parent's Subsidiaries (the "Parent Subsidiaries") is a corporation or other
business entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization. Each of
Parent and the Parent Subsidiaries is qualified or licensed to do business
as a foreign corporation or other business entity, as applicable, and is in
good standing, in each jurisdiction where the character of its properties
owned, operated or leased or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified or
licensed will not, individually or in the aggregate, have a Parent Material
Adverse Effect. As used in this Agreement, the term "Parent Material
Adverse Effect" means any change, effect, circumstance or event that is or
is reasonably likely to (i) be materially adverse to the business, results
of operations, assets or liabilities, or financial condition or prospects
of Parent and the Parent Subsidiaries taken as a whole or (ii) materially
adversely affect the ability of Parent and Merger Sub to perform their
obligations under this Agreement or timely consummate the transactions
contemplated by this Agreement, other than any such change, effect,
circumstance or event resulting from changes in general economic,
regulatory or political conditions.
SECTION 3.2. Capitalization. As of the date hereof, the authorized
capital stock of Parent consists of 150,000,000 shares of Parent Common
Stock and 50,000,000 shares of preferred stock, par value $.01 per share,
of Parent (the "Parent Preferred Stock"). Of such authorized shares, as of
the date hereof, there are issued and outstanding 28,813,653 shares of
Parent Common Stock and no shares of Parent Preferred Stock. No shares of
Parent Common Stock or Parent Preferred Stock are issued and held in the
treasury of Parent and no other capital stock of Parent is issued or
outstanding. All issued and outstanding shares of Parent Common Stock are
duly authorized, validly issued and outstanding, fully paid and
nonassessable and were issued free of preemptive rights in compliance with
applicable Law. There are no outstanding rights, including stock
appreciation rights, subscriptions, warrants, puts, calls, unsatisfied
preemptive rights, options or other agreements of any kind relating to, or
the value of which is tied to the value of, any of the outstanding,
authorized but not issued, unauthorized or treasury shares of the capital
stock or any other security of Parent, and there is no authorized or
outstanding security of any kind convertible into or exchangeable for any
such capital stock or other security. There are no restrictions imposed by
Parent upon the transfer of or otherwise pertaining to the securities
(including, but not limited to, the ability to pay dividends thereon) or
retained earnings of Parent or the ownership thereof other than those
imposed by the Securities Act, the Exchange Act, applicable state
securities Laws, applicable corporate Law or the certificate of
incorporation of Parent.
SECTION 3.3. Authorization; Binding Agreement. Parent and Merger Sub
each have all requisite corporate power and authority to execute and
deliver this Agreement and the Voting Agreements and to consummate the
transactions contemplated hereby and thereby. This Agreement and the Voting
Agreements, the execution and delivery of this Agreement and the Voting
Agreements and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by the Board of Directors of
each of Parent and Merger Sub and by Parent in its capacity as sole
stockholder of Merger Sub, and no other corporate proceedings on the part
of Parent or Merger Sub are necessary to authorize the execution and
delivery of this Agreement and the Voting Agreements or to consummate the
transactions contemplated hereby and thereby other than the filing and
recordation of appropriate merger documents as required by the OGCA. This
Agreement and the Voting Agreements have been duly and validly executed and
delivered by each of Parent and Merger Sub and, assuming the due
authorization, execution and delivery of (i) this Agreement by the Company
and (ii) the Voting Agreements by the Company and the other parties
thereto, constitute the legal, valid and binding agreements of Parent and
Merger Sub, enforceable against Parent and Merger Sub in accordance with
their terms.
SECTION 3.4. Governmental Approvals. No Consent from or with any
Governmental Authority on the part of Parent or Merger Sub is required in
connection with the execution or delivery by each of Parent and Merger Sub
of this Agreement and the Voting Agreements or the consummation by each of
Parent and Merger Sub of the transactions contemplated hereby and thereby
other than (i) the filing of the Oklahoma Certificate of Merger with the
Oklahoma Secretary of State in accordance with the OGCA, (ii) filings with
the Commission, the NYSE and state securities laws administrators, (iii)
Consents under the HSR Act, and (iv) those Consents that, if they were not
obtained or made, will not have a Parent Material Adverse Effect.
SECTION 3.5. No Violations. The execution and delivery of this
Agreement and the Voting Agreements, the consummation of the transactions
contemplated hereby and thereby and compliance by each of Parent and Merger
Sub with any of the provisions hereof and thereof will not (i) conflict
with or result in any breach of any provision of the certificates of
incorporation or bylaws of Parent or Merger Sub, (ii) require any Consent
under or result in a violation or breach of, or constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right
of termination, cancellation or acceleration or augment the performance
required) under any of the terms, conditions or provisions of any material
obligation to which Parent or any Parent Subsidiary is a party or by which
any of them or any of their properties or assets may be bound, (iii) result
in the creation or imposition of any Lien upon any of the assets of Parent
or any Parent Subsidiary, or (iv) assuming compliance with the matters
referred to in Section 3.3 and subject to the receipt of the Company
Stockholder Approval (as defined below), conflict with or violate any
applicable provision of any Law currently in effect to which Parent or any
Parent Subsidiary or its or any of their respective assets or properties
are subject, except in the case of clauses (ii), (iii) and (iv) above, for
any deviations from the foregoing which will not, individually or in the
aggregate, have a Parent Material Adverse Effect.
SECTION 3.6. Parent Securities Filings. As of their respective dates,
or as of the date of the last amendment thereof, if amended after filing,
none of the Parent Securities Filings (as defined below) (including all
schedules and exhibits thereto and documents incorporated by reference
therein), filed prior to or on the date hereof contained or, as to Parent
Securities Filings subsequent to the date hereof, will contain, any untrue
statement of a material fact or omitted or, as to Parent Securities Filings
subsequent to the date hereof, will omit, to state a material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. Each of
the Parent Securities Filings was filed in a timely manner and at the time
of filing or as of the date of the last amendment thereof, if amended after
filing, complied or, as to Parent Securities Filings subsequent to the date
hereof, will comply with the Exchange Act, the Securities Act or other
applicable Law, except for those failures to timely file or comply which
will not, individually or in the aggregate, have a Parent Material Adverse
Effect. The term "Parent Securities Filings" means: (i) Parent's Annual
Reports on Form 10-K, as amended, for the years ended December 31, 1999 and
2000, as filed with the Commission; (ii) Parent's proxy statements relating
to all of the meetings of stockholders (whether annual or special) of
Parent since January 1, 2000, as filed with the Commission; and (iii) all
other reports, statements and registration statements and amendments
thereto (including, without limitation, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K, as amended) filed by Parent with the
Commission since January 1, 2000, together with those reports or other
documents of the type described in clauses (i) through (iii) above,
subsequently filed or required to be filed with the Commission.
SECTION 3.7. Tax Treatment. Neither Parent nor any Parent Subsidiary
has taken or agreed to take any action or failed to take any action, nor,
to the knowledge of Parent, has any other Person taken or agreed to take
any action or failed to take any action, nor is Parent aware of any facts
or circumstances, that would prevent the Merger from qualifying as a
reorganization within the meaning of Section 368 of the Code.
SECTION 3.8. Financial Statements. Each of the consolidated balance
sheets of Parent (including all related notes) included in the financial
statements contained in the Parent Securities Filings (or incorporated
therein by reference) present fairly, in all material respects, the
consolidated financial position of Parent as of the dates indicated, and
each of the consolidated statements of income, consolidated statements of
cash flows and consolidated statements of changes in stockholders' equity
(including all related notes) included in such financial statements present
fairly, in all material respects, the consolidated results of operations
and cash flows of Parent for the respective periods indicated, in each case
in conformity with GAAP applied on a consistent basis throughout the
periods involved (except for changes in accounting principles disclosed in
the notes thereto) and the rules and regulations of the Commission, except
that unaudited interim financial statements are subject to normal and
recurring year-end adjustments and any other adjustments described therein
and do not include certain notes and other information which may be
required by GAAP but which are not required by Form 10-Q under the Exchange
Act. The financial statements included in the Parent Securities Filings are
in all material respects in accordance with the books and records of Parent
and Parent Subsidiaries.
SECTION 3.9. Absence of Certain Changes. Since March 31, 2001, there
has not been: (i) any Event, except as will not, individually or in the
aggregate, have a Parent Material Adverse Effect; (ii) any declaration,
payment or setting aside for payment of any dividend (except to Parent or
any Parent Subsidiary wholly owned by Parent) or other distribution or any
redemption, purchase or other acquisition of any shares of capital stock or
securities of Parent or any Parent Subsidiary; (iii) any return of any
capital or other distribution of assets to stockholders of the Parent or
any Parent Subsidiary (except to Parent or any Parent Subsidiary wholly
owned by Parent); (iv) any acquisition or disposition by Parent or any
Parent Subsidiary (by merger, consolidation, acquisition of stock or assets
or otherwise) of any Person or business; or (v) any material change by
Parent to its accounting policies, practices, or methods.
SECTION 3.10. Accuracy of Information; Full Disclosure. No
representation or warranty of Parent or the Parent Subsidiaries contained
in this Agreement contains an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make
the statements made therein, in the context in which made, not materially
false or misleading.
ARTICLE IV
COVENANTS OF THE COMPANY
The Company covenants and agrees as follows:
SECTION 4.1. Conduct of Business. Except as expressly contemplated by
this Agreement or as set forth in the Company Disclosure Schedule, during
the period from the date of this Agreement to the Effective Time, the
Company shall conduct, and it shall cause the Company Subsidiaries to
conduct, its or their respective businesses in the ordinary course and
consistent with past practice, subject to the limitations contained in this
Agreement and the Company shall, and it shall cause the Company
Subsidiaries to, use commercially reasonable efforts to preserve intact its
or their respective business organizations, to keep available the services
of its or their respective officers, agents and employees and to maintain
satisfactory relationships with all persons with whom any of them does
business. Without limiting the generality of the foregoing, and except as
otherwise expressly provided in this Agreement or disclosed in the Company
Disclosure Schedule, from the date of this Agreement until the Effective
Time, neither the Company nor any Company Subsidiary will, without the
prior written consent of Parent:
(i) amend or propose to amend the Certificate of
Incorporation, or Bylaws or the organizational documents of the
Company Subsidiaries;
(ii) authorize for issuance, issue, grant, sell, pledge,
dispose of or propose to issue, grant, sell, pledge or dispose of any
shares of, or any options, warrants, commitments, subscriptions or
rights of any kind to acquire or sell any shares of, the capital stock
or other securities of the Company or any Company Subsidiary
including, but not limited to, any securities convertible into or
exchangeable for shares of capital stock of any class of the Company
or any Company Subsidiary, except for the issuance of shares of
Company Common Stock pursuant to the exercise of the Company Stock
Options outstanding on the date of this Agreement and described in
Schedule 2.14 of the Company Disclosure Schedule in accordance with
their present terms;
(iii) split, combine or reclassify any shares of its capital
stock or declare, pay or set aside any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in
respect of its capital stock, other than dividends or distributions to
the Company or a Company Subsidiary wholly owned by the Company, or
redeem, purchase or otherwise acquire or offer to acquire any shares
of its capital stock or other securities;
(iv) (a) create, incur, or assume any Indebtedness; provided
that the Company and the Company Subsidiaries may incur Indebtedness
under the revolving note facility pursuant to the Restated Credit
Agreement, dated February 3, 2000, between the Company, the Bank of
Oklahoma, N.A. and the other parties thereto, as amended by the Third
Loan Modification and Forbearance Agreement dated January 15, 2001
between the Company, the Bank of Oklahoma, N.A. and the other parties
thereto (the "BOK Forbearance Agreement"), the Contrato de Abertura de
Credito Fixo, dated November 24, 1999, between Cifali & CIA Ltda. and
the Banco do Estado de Sao Paulo S.A. and the Kredietcontract, dated
May 21, 1987, between Metra Metaalwerken BVBA and KBC Bank; (b)
assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, indirectly, contingently or otherwise) for the
obligations of any Person (other than for obligations of a Company
Subsidiary that are not otherwise prohibited obligations); (c) make
any capital expenditures or make any loans, advances or capital
contributions to, or investments in, any other Person (other than to a
Company Subsidiary, and customary travel, relocation or businesses
advances or loans to employees in each case in the ordinary course of
business consistent with past practice); provided that, the Company
and Company Subsidiaries may make capital expenditures that are in the
ordinary course of business consistent with past practice and in
accordance in all material respects with the current capital budget
for the Company previously furnished to Parent; (d) acquire or agree
to acquire by merging or consolidating with, or by purchasing outside
of the ordinary course of business the assets of, or by any other
manner, (i) any business or any corporation, limited liability
company, partnership, joint venture, association or other business
organization or division thereof, or (ii) any assets that individually
or in the aggregate are material to the Company and the Company
Subsidiaries taken as a whole (except pursuant to a contract specified
in Schedule 4.1(iv)(d)(ii) of the Company Disclosure Schedule); or (e)
divest, sell, transfer, mortgage, pledge or otherwise dispose of, or
encumber, or agree to divest, sell, transfer, mortgage, pledge or
otherwise dispose of or encumber, any assets, businesses or properties
(including the Load King and Bid-Well businesses) other than to secure
debt permitted under clause (a) of this subparagraph (iv) and other
than transfers in the ordinary course of business consistent with past
practice. The term "Indebtedness" means, with respect to any person,
without duplication, (A) all obligations of such person for borrowed
money, or with respect to deposits or advances of any kind (other than
nonrefundable customer deposits) to such person, (B) all obligations
of such person evidenced by bonds, debentures, notes or similar
instruments, (C) all obligations of such person under conditional sale
or other title retention agreements relating to property purchased by
such person, (D) all obligations of such person issued or assumed as
the deferred purchase price of property or services (excluding
obligations of such person to creditors for raw materials, inventory,
services and supplies incurred in the ordinary course of such person's
business), (E) all capitalized lease obligations of such person, (F)
all obligations of such person under interest rate or currency hedging
or swap transactions (valued at the termination value thereof), (G)
all performance bonds or letters of credit issued for the account of
such person, (H) all guarantees and arrangements having the economic
effect of a guarantee of such person of any Indebtedness of any other
person, (I) all operating leases, (J) all agreements to repurchase
equipment, (K) all residual value guarantees, and (L) all performance
guarantees;
(v) increase in any material respect the compensation of any
of its officers or employees or enter into, establish, amend or
terminate any employment, consulting, retention, management
continuity, change in control, collective bargaining, bonus or other
incentive compensation, profit sharing, health or other welfare, stock
option or other equity, pension, retirement, vacation, severance,
deferred compensation or other compensation or benefit plan, policy,
agreement, trust, fund or arrangement with, for or in respect of, any
stockholder, officer, director, other employee, agent, consultant or
affiliate other than as required pursuant to the terms of agreements
in effect on the date of this Agreement;
(vi) enter into any material lease or amend any material
lease of real property;
(vii) make or rescind any express or deemed election
relating to Taxes, unless required to do so by applicable Law;
(viii) settle or compromise any material Tax liability or
agree to an extension of a statute of limitations with respect to the
assessment or determination of Taxes;
(ix) file or cause to be filed any amended Tax Return with
respect to the Company or any Company Subsidiaries or file or cause to
be filed any claim for refund of Taxes paid by or on behalf of the
Company or any Company Subsidiaries;
(x) prepare or file any Tax Return inconsistent with past
practice in preparing or filing similar Tax Returns in prior periods
or, on any such Tax Return, take any position, make any election, or
adopt any method that is inconsistent with positions taken, elections
made or methods used in preparing or filing similar Tax Returns in
prior periods, in each case except to the extent required by Law;
(xi) modify, amend, terminate or fail to renew (to the
extent such contract or agreement can be unilaterally renewed by the
Company or any Company Subsidiary) any Significant Contract or waive,
release or assign any material rights or claims thereunder;
(xii) make any material change to its accounting methods,
principles or practices, except as may be required by GAAP;
(xiii) fail to use commercially reasonable efforts to
maintain the material assets of the Company and each of the Company
Subsidiaries in their current physical condition, except for ordinary
wear and tear and damage;
(xiv) pay, discharge, or satisfy any material (on a
consolidated basis for the Company and the Company Subsidiaries taken
as a whole) claim, liability, or obligation (absolute, accrued,
asserted or unasserted, contingent or otherwise), except for claims,
liabilities or obligations payable in the ordinary course of business;
(xv) fail to pay or otherwise satisfy when due and payable
(except if being contested in good faith) any accounts payable or
other claims, liabilities or obligations payable in the ordinary
course of business consistent with past practice;
(xvi) enter into any non-compete agreement whereby the
Company or any Company Subsidiary agrees not to compete;
(xvii) except for purchase or sales orders in the ordinary
course of business consistent with past practice, enter into any
contract or incur any liability in a transaction or series of
transactions involving amounts in excess of $100,000;
(xviii) adopt a shareholder rights plan or any similar plan
or instrument which would have the effect of impairing or delaying the
consummation of the Merger;
(xix) waive any of its rights under, or release any other
party from such other party's obligations under, or amend any
provision of, any standstill agreement (other than the letter
agreement, dated as of June 12, 2000, by and between Parent and the
Company, as amended (the "Confidentiality Agreement"));
(xx) enter into any settlement agreement with respect to any
material litigation or any material claim (whether pending or
threatened);
(xxi) discount receivables at a rate of 10% or greater, or
factor receivables for less than 90% of their face value, or auction
or sell assets below current standard prices;
(xxii) enter into any distribution, dealer or similar
agreement which is not cancelable without penalty or premium by the
Company on 90 days' or less notice or not in a form reasonably
acceptable to Parent as agreed upon by Parent in writing;
(xxiii) amend or waive any of the provisions of the Voting
Agreements, the Miscellaneous Agreement, the Xxxxxxx Non-Compete
Agreement or the Severance Agreement;
(xxiv) fail to extend or continue to extend, in accordance
with their existing terms, the BOK Forbearance Agreement and/or the
Third Forbearance Agreement, dated January 15, 2001, between the
Company, Principal Life Insurance Company and other parties thereto,
if such forbearance agreements would otherwise expire prior to the
Closing Date; or
(xxv) authorize, or commit or agree to take (or fail to
take), any of the foregoing actions.
Furthermore, the Company covenants that from and after the date of
this Agreement, unless Parent shall otherwise expressly consent in writing,
the Company shall, and the Company shall cause each of the Company
Subsidiaries to, use its or their commercially reasonable efforts to comply
in all material respects with all Laws applicable to it or any of its
properties, assets or business and maintain in full force and effect all
Permits necessary for, or otherwise material to, such business.
SECTION 4.2. Notification of Certain Matters. The Company shall give
prompt notice to Parent if any of the following occurs after the date of
this Agreement: (i) any notice of, or other communication relating to, a
material default or Event which, with notice or lapse of time or both,
would become a material default under any Significant Contract; (ii)
receipt of any notice or other communication in writing from any person
alleging that the Consent of such person is or may be required in
connection with the transactions contemplated by this Agreement (other than
a Consent disclosed pursuant to Sections 2.5 or 2.6 or not required to be
disclosed pursuant to the terms of such sections); (iii) receipt of any
material notice or other communication from any Governmental Authority
(including, but not limited to, the NYSE or any other securities exchange)
in connection with the transactions contemplated by this Agreement; (iv)
the occurrence of any Event or Events which, individually or in the
aggregate, would have a Company Material Adverse Effect; (v) the
commencement or threat of any Litigation involving or affecting the Company
or any Company Subsidiary, or any of their respective properties or assets,
or, to its knowledge, any employee, agent, director or officer of the
Company or any Company Subsidiary, in his or her capacity as such or as a
fiduciary under a Benefit Plan of the Company, which, if pending on the
date hereof, would have been required to have been disclosed in or pursuant
to this Agreement or which relates to the consummation of the Merger, or
any material development in connection with any Litigation disclosed by the
Company in or pursuant to this Agreement or the Company Securities Filings;
(vi) the occurrence of any Event that causes or is reasonably likely to
cause a breach by the Company of any provision of this Agreement; and (vii)
the occurrence of any Event that occurred prior to the date of this
Agreement that would have a Company Material Adverse Effect. If the Company
receives an administrative or other order or notification relating to any
violation or claimed violation of the rules and regulations of any
Governmental Authority that could affect the ability of Parent, Merger Sub
or the Company to consummate the transactions contemplated hereby, or
should the Company become aware of any fact including any change in law or
regulations (or any interpretation thereof) that is reasonably likely to
cause such Governmental Authority to withhold its Consent to or approval of
the Merger and the transactions contemplated hereby, the Company shall
promptly notify the Parent and the Company shall use commercially
reasonable efforts to take such steps as may be necessary to remove any
such impediment to consummate the transactions contemplated by this
Agreement.
SECTION 4.3. Access and Information. Between the date of this
Agreement and the Effective Time, the Company shall give, and shall cause
each of the Company Subsidiaries to give, and shall direct its financial
advisors, accountants and legal counsel to give, upon reasonable notice,
Parent, its lenders, financial advisors, accountants and legal counsel and
their respective authorized representatives at all reasonable times access
to all offices and other facilities and to all contracts, agreements,
commitments, Tax Returns (and supporting schedules), books and records of
or pertaining to the Company and the Company Subsidiaries and to permit the
foregoing to make such reasonable inspections as they may require and will
cause its officers promptly to furnish Parent with (a) such financial and
operating data and other information with respect to the business and
properties of the Company and the Company Subsidiaries as Parent may from
time to time reasonably request and (b) a copy of each material report,
schedule and other document filed or received by the Company or any of the
Company Subsidiaries pursuant to the requirements of applicable securities
laws or the NYSE. In the event that the foregoing access is subject to
restrictions contained in confidentiality agreements to which the Company
is a party, the Company shall use commercially reasonable efforts to obtain
waivers of such restrictions. All information obtained by Parent pursuant
to this Section 4.3 shall be kept confidential in accordance with the
Confidentiality Agreement.
SECTION 4.4. Recommendation; Stockholder Approval. The Board of
Directors of the Company (i) shall recommend to the stockholders of the
Company that they approve this Agreement and the transactions contemplated
hereby and (ii) shall use commercially reasonable efforts to obtain any
necessary approval by the Company's stockholders (the "Company Stockholder
Approval") of this Agreement and the transactions contemplated hereby;
provided that the Board of Directors of the Company may withdraw, modify or
change such recommendation of this Agreement and the transactions
contemplated hereby if it has determined in good faith, based on such
matters as it deems relevant and after receiving advice from the Company's
outside legal counsel, that the failure to withdraw, modify or change its
recommendation of this Agreement and the transactions contemplated hereby
would be reasonably likely to result in a breach of the fiduciary duties of
the Board of Directors of the Company under applicable Law. Whether or not
the Board of Directors of the Company has withdrawn, modified or changed
its recommendation of this Agreement or the transactions contemplated by
this Agreement or receives a Takeover Proposal (as defined below), the
Company shall take all steps necessary to duly call, give notice of,
convene and hold a meeting of its stockholders (the "Company Stockholders
Meeting") as soon as practicable after the date hereof for the purpose of
approving this Agreement and the Merger and the transactions contemplated
hereby and for such other purposes as may be consented to by Parent and the
Company in connection with effectuating the transactions contemplated
hereby.
SECTION 4.5. Commercially Reasonable Efforts. Subject to the terms and
conditions herein provided, the Company agrees to use its commercially
reasonable efforts, in consultation with Parent, to (i) obtain all third
party Consents required in connection with the execution and delivery by
the Company of this Agreement or the consummation by the Company of the
transactions contemplated hereby, (ii) to the extent requested by Parent,
defend any Litigation against the Company or any Company Subsidiary
challenging this Agreement or the consummation of the transactions
contemplated hereby, including seeking to have any stay or temporary
restraining order entered by any court or Governmental Authority vacated or
reversed, (iii) obtain all Consents from Governmental Authorities required
for the consummation of the Merger and the transactions contemplated
hereby, and (iv) promptly make all necessary filings under the HSR Act, and
any other applicable Law, including any filing required to be made with the
Commission pursuant to the Securities Act or the Exchange Act.
SECTION 4.6. Compliance. In consummating the Merger and the
transactions contemplated hereby, the Company shall comply, and cause the
Company Subsidiaries to comply or to be in compliance, in all material
respects, with all applicable Laws.
SECTION 4.7. Company Benefit Plans. From the date of this Agreement
through the Effective Time, no discretionary award or grant under any
Benefit Plan shall be made without the consent of Parent; nor shall the
Company or a Company Subsidiary take any action or permit any action to be
taken to accelerate the vesting of any warrants or options previously
granted pursuant to any such Benefit Plan except as specifically required
pursuant to the terms thereof as in effect on the date of this Agreement.
SECTION 4.8. No Solicitation. (a) Neither the Company nor any Company
Subsidiary, nor any of their respective officers, directors, employees,
agents, affiliates, accountants, counsel, investment bankers, financial
advisors or other representatives (collectively, "Representatives") shall
(i) directly or indirectly, initiate, solicit or encourage, or take any
action to facilitate the making of, any Takeover Proposal, or (ii) directly
or indirectly engage in any discussions or negotiations with, or provide
any information or data to, or afford any access to the properties, books
or records of the Company or any Company Subsidiary to, or otherwise
assist, facilitate or encourage, any person (other than Parent or any
affiliate or associate thereof) relating to any Takeover Proposal, or (iii)
approve any letter of intent, agreement in principle, acquisition agreement
or similar agreement relating to any Takeover Proposal; provided, however,
that at any time prior to the Company Stockholders Meeting, the Company
may, in response to a Takeover Proposal that is reasonably likely to result
in a Superior Proposal (as defined below) and which was not solicited in
violation of this Section 4.8(a), and subject to providing Parent
reasonable advance written notice of its decision to take such action (x)
furnish information with respect to the Company, or the Company
Subsidiaries to any person making such Takeover Proposal pursuant to a
customary confidentiality agreement on terms no less restrictive than those
contained in the Confidentiality Agreement and (y) participate in
discussions and negotiations regarding such Takeover Proposal but, in each
case, only if the Company's Board of Directors determines, after receiving
the advice of its outside counsel, that failure to furnish such information
or to participate in such discussions or negotiations would be reasonably
likely to result in a breach of the fiduciary duties of the Board of
Directors of the Company under applicable Law. The Company shall keep
Parent apprised of any such discussions and negotiations promptly after
they occur.
(b) The Company shall promptly and as soon as possible (but in no
event later than one day after receipt thereof) advise the Parent orally
and in writing of any Takeover Proposal, the identity of the person making
any such Takeover Proposal and the material terms of any such Takeover
Proposal. The Company shall keep the Parent fully informed of the status
and material terms of any such Takeover Proposal. In the event the Company
receives a Takeover Proposal, paragraph 9 of the Confidentiality Agreement
shall immediately be terminated and shall have no further force and effect.
(c) The Company and each Company Subsidiary and each of their
Representatives shall immediately cease and cause to be terminated all
existing discussions and negotiations, if any, with any other persons
conducted heretofore with respect to any Takeover Proposal.
(d) The Merger, this Agreement and the transactions contemplated
by this Agreement shall be submitted to the stockholders of the Company for
the purpose of approving this Agreement, the Merger and the transactions
contemplated by this Agreement regardless of the recommendation or any
change in the recommendation of the Board of Directors of the Company with
respect thereto.
For purposes of this Agreement, a "Takeover Proposal" means any
inquiry, proposal or offer from any person (other than Parent) relating to
(i) any direct or indirect acquisition or purchase of a business that
constitutes 35% or more of the net revenues, net income or assets of the
Company and the Company Subsidiaries, taken as a whole, or 35% or more of
the common stock or voting power (or of securities or rights convertible
into or exercisable for such common stock or voting power) of the Company
or the Company Subsidiaries, (ii) any tender offer or exchange offer that
if consummated would result in any person beneficially owning 35% or more
of the common stock or voting power (or of securities or rights convertible
into or exercisable for such common stock or voting power) of the Company
or the Company Subsidiaries, or (iii) any merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving the Company, or any of its Subsidiaries that
constitutes 35% or more of the net revenues, net income or assets of the
Company, and its Subsidiaries taken as a whole, in each case other than the
transactions contemplated by this Agreement. Each of the transactions
referred to in clauses (i) - (iii) of the foregoing definition of Takeover
Proposal, other than the Merger proposed by this Agreement, is referred to
herein as an "Acquisition Transaction."
For purposes of this Agreement, a "Superior Proposal" means any
bona fide written proposal made by a third party to acquire, directly or
indirectly, including pursuant to a tender offer, exchange offer, merger,
consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction, for consideration consisting of cash
and/or securities, more than 35% of the combined voting power of the shares
of Company Common Stock then outstanding or more than 35% of the assets of
the Company and its Subsidiaries, taken together, that the Board of
Directors of the Company determines in its good faith judgment (based on
(x) the advice of a financial advisor of nationally recognized reputation
(the "Financial Advisor") and (y) such other matters as the Board of
Directors of the Company deems relevant, which may include without
limitation the likelihood of consummation, the ability of such third party
to finance such transaction and, if securities form a part of the
consideration, the trading market and liquidity of such securities offered
in connection with the Superior Proposal) that the terms of which are more
favorable to the Company's stockholders from a financial point of view than
those terms contained herein. If such proposal (1) is subject to a
financing condition or (2) involves consideration that is not entirely cash
or does not permit the Company's stockholders to receive the payment of the
offered consideration in respect of all shares at the same time, such
proposal shall not be deemed a Superior Proposal unless the Board of
Directors of the Company has been furnished with a written opinion of the
Financial Advisor to the effect that (in the case of clause (1)) such
proposal is readily financeable and (in the case of clause (2)) that such
proposal provides a higher value per share than the Merger Consideration.
(e) Nothing contained in this Agreement shall prohibit the Board
of Directors of the Company from taking and disclosing to its stockholders
a position contemplated by Rules 14d-9 and 14e-2 under the Exchange Act or
from making any other disclosure to its stockholders if, in the good faith
judgment of the Board of Directors of the Company, after consultation with
counsel, failure to so disclose would be inconsistent with its obligations
under applicable Law.
SECTION 4.9. Commission and Stockholder Filings; Other Reports. The
Company shall send to Parent a copy of all public reports and materials as
and when it sends the same to its stockholders, the Commission, the NYSE or
any securities exchange or any state or foreign securities commission. The
Company shall send to Parent a copy of all communications with banks,
trustees under any indentures or other debt instruments and rating agencies
as and when it sends such communications to such parties.
SECTION 4.10. Takeover Statutes. If any Takeover Statute is or may
become applicable to the Merger or the transactions contemplated hereby,
the Company and the members of its Board of Directors will grant such
approvals and will take such other actions as are necessary so that the
Merger and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated hereby and
will otherwise act to eliminate or minimize the effects of any Takeover
Statute on the Merger and any of the transactions contemplated hereby.
ARTICLE V
COVENANTS OF PARENT
Parent covenants and agrees as follows:
SECTION 5.1. Notification of Certain Matters. Parent shall give prompt
notice to the Company if any of the following occurs after the date of this
Agreement: (i) receipt of any notice or other communication in writing from
any person alleging that the Consent of such person is or may be required
in connection with the transactions contemplated by this Agreement, other
than a Consent disclosed pursuant to Section 3.4 or 3.5 above or not
required to be disclosed pursuant to the terms thereof; (ii) receipt of any
material notice or other communication from any Governmental Authority
(including, but not limited to, the NYSE or any other securities exchange)
in connection with the transactions contemplated by this Agreement; (iii)
the occurrence of any Event or Events which, individually or in the
aggregate, is reasonably likely to have a Parent Material Adverse Effect;
(iv) the commencement or threat of any Litigation involving or affecting
Parent or Merger Sub, or any of their respective properties or assets, or,
to its knowledge, any employee, agent, director or officer of Parent or
Merger Sub, in his or her capacity as such or as a fiduciary under a
Benefit Plan of Parent, which relates to the consummation of the Merger;
and (v) the occurrence of any Event that is reasonably likely to cause a
breach by Parent of any provision of this Agreement. If Parent receives an
administrative or other order or notification relating to any violation or
claimed violation of the rules and regulations of any Governmental
Authority that could affect the ability of Parent, Merger Sub or the
Company to consummate the transactions contemplated hereby, or should
Parent become aware of any fact including any change in law or regulations
(or any interpretation thereof) that is reasonably likely to cause such
Governmental Authority to withhold its consent to or approval of the Merger
and the transactions contemplated hereunder, Parent shall promptly notify
the Company and Parent shall use commercially reasonable efforts to take
such steps as may be necessary to remove any such impediment of Parent or
the Merger Sub to consummate the transactions contemplated by this
Agreement.
SECTION 5.2. Commercially Reasonable Efforts. (a) Subject to the terms
and conditions herein provided, Parent agrees to use commercially
reasonable efforts to (i) obtain all third party Consents required in
connection with the execution and delivery by Parent and Merger Sub of this
Agreement or the consummation by Parent and Merger Sub of the transactions
contemplated hereby, (ii) defend any Litigation against Parent or Merger
Sub challenging this Agreement or the consummation of the transactions
contemplated hereby, including seeking to have any stay or temporary
restraining order entered by any court or Governmental Authority vacated or
reversed, (iii) obtain all Consents from Governmental Authorities required
for the consummation of the Merger and the transactions contemplated
hereby, and (iv) promptly make all necessary filings under the HSR Act and
any other applicable Law, including any filing required to be made with the
Commission pursuant to the Securities Act or the Exchange Act.
(b) Nothing contained in this Agreement shall require, or be
construed to require, Parent, in connection with the receipt of any
regulatory approval, to proffer to, or agree to (a) sell, hold separate,
discontinue or limit, before or after the Effective Time, any assets,
businesses, or interest in any assets or businesses of Parent, the Company
or any of their respective Subsidiaries (or to consent to any sale, or
agreement to sell, or discontinuance or limitation by the Company of any of
its assets or businesses) or (b) agree to any conditions relating to, or
changes or restriction in, the operations of any such assets or businesses
which, in either case would, in the reasonable judgment of Parent,
materially adversely impact the economic or business benefits to Parent of
the transactions contemplated by this Agreement (a "Merger Benefit
Detriment").
SECTION 5.3. Compliance. In consummating the Merger and the
transactions contemplated hereby, Parent shall comply, and cause the Merger
Sub to comply or to be in compliance, in all material respects, with all
applicable Laws.
SECTION 5.4. Director and Officer Liability. (a) Parent agrees that
all rights to indemnification and all limitations on liability existing in
favor of any individual, who on or at any time prior to the Effective Time
was an officer or director of the Company or any Company Subsidiary (an
"Indemnified Person") in respect of acts or omissions of such Indemnified
Person on or prior to the Effective Time, as provided in the Certificate of
Incorporation or Bylaws or the organizational documents of the Company
Subsidiaries or an agreement between an Indemnified Person and the Company
or any Company Subsidiary in effect as of the date of this Agreement, shall
continue in full force and effect in accordance with its terms, and shall
not be amended, repealed or otherwise modified after the Effective Time in
any manner that would adversely affect the rights thereunder of the
individuals who on or at any time prior to the Effective Time were
directors or officers of the Company or any Company Subsidiary, and Parent
shall, and shall cause the Surviving Corporation to, honor all such
indemnification provisions.
(b) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other Person
and is not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially
all of its properties and assets to any Person, then, and in each such
case, Parent shall cause proper provision to be made so that the successors
and assigns of the Surviving Corporation assume the obligations set forth
in this Section 5.4.
(c) For six years after the Effective Time, Parent shall, and
shall cause the Surviving Corporation to, maintain in effect and honor the
Company's current directors' and officers' liability insurance covering
acts or omissions occurring prior to the Effective Time covering each
person currently covered by the Company's directors' and officers'
liability insurance policy on terms with respect to such coverage and
amounts no less favorable than those of each such policy in effect on the
date hereof; provided that Parent shall not be required to procure any such
coverage for an amount in excess of the amount of the Company's current
annual premium for its existing coverage and; provided, further, that
Parent may substitute therefor policies no less favorable in any material
respect to such insured persons.
(d) The provisions of this Section 5.4 are intended to be for the
benefit of, and will be enforceable by, each Indemnified Person, his or her
heirs and his or her representatives and (ii) are in addition to, and not
in substitution for, any other rights to indemnification or contribution
that any such person may have by contract or otherwise.
SECTION 5.5. Access and Information. Between the date of this
Agreement and the Effective Time, Parent shall give and shall direct its
financial advisors, accountants and legal counsel to give, upon reasonable
notice, the Company, its lenders, financial advisors, accountants and legal
counsel and their respective authorized representatives at all reasonable
times access to all offices and other facilities and to all contracts,
agreements, commitments, Tax Returns (and supporting schedules), books and
records of or pertaining to Parent and to permit the foregoing to make such
reasonable inspections as they may require and will cause its officers
promptly to furnish the Company with (a) such financial and operating data
and other information with respect to the business and properties of Parent
as the Company may from time to time reasonably request and (b) a copy of
each material report, schedule and other document filed or received by
Parent pursuant to the requirements of applicable securities laws or the
NYSE. In the event that the foregoing access is subject to restrictions
contained in confidentiality agreements to which Parent is a party, Parent
shall use commercially reasonable efforts to obtain waivers of such
restrictions. All information obtained by the Company pursuant to this
Section 5.5 shall be kept confidential in accordance with the terms of that
certain letter agreement, dated as of May 25, 2001, by and between Parent
and the Company (the "Company Confidentiality Agreement").
SECTION 5.6. Blue Sky Permits. Parent shall use commercially
reasonable efforts to obtain, prior to the effective date of the Form S-4
(as defined below), all materially necessary state securities laws or "blue
sky" permits and approvals required to carry out the transactions
contemplated by this Agreement and the Merger, and will pay all expenses
incident thereto.
SECTION 5.7. Listing. Parent shall use commercially reasonable efforts
to cause the shares of Parent Common Stock to be issued in the Merger and,
following the Effective Time, upon exercise of Parent Stock Options to be
listed on the NYSE, subject to official notice of issuance, prior to the
Closing Date.
SECTION 5.8. Employee Benefits. (a) Following the Effective Time,
Parent shall provide, or shall cause to be provided, to individuals who are
employees of the Company and the Company Subsidiaries immediately before
the Effective Time and who continue to be employed by Parent, the Surviving
Corporation and the Company Subsidiaries after the Effective Time (the
"Company Employees") employee benefits that are, in the aggregate, not less
favorable than those provided to those individuals who immediately
following the Effective Time are similarly situated employees of Parent
(other than Company Employees). The foregoing shall not be construed to
prevent the termination of employment of any Company Employee or the
amendment or termination of any particular Benefit Plan of the Company or
any Company Subsidiary to the extent permitted by its terms as in effect
immediately before the Effective Time.
(b) For purposes of eligibility and vesting under the benefit
plans of Parent and the Parent Subsidiaries providing benefits to any
Company Employees after the Effective Time (the "New Plans"), each Company
Employee shall be credited with his or her years of service with the
Company and the Company Subsidiaries and predecessor employers before the
Effective Time, to the same extent as such Company Employee was entitled,
before the Effective Time, to credit for such service under any similar
Benefit Plans, except to the extent such credit would result in a duplicate
creation of benefits. In addition, and without limiting the generality of
the foregoing: (i) each Company Employee shall be immediately eligible to
participate, without any waiting time, in any and all New Plans to the
extent coverage under such New Plan replaces coverage under a Benefit Plan
in which such Company Employee participated immediately before the
Effective Time (such plans, collectively, the "Old Plans"); and (ii) for
the purposes of each New Plan providing medical, dental, pharmaceutical
and/or vision benefits to any Company Employee, Parent shall cause all
pre-existing exclusions and actively-at-work requirements of such New Plan
to be waived for such employee and his or her covered dependents, and
Parent shall cause any eligible expenses incurred by such employee and his
or her covered dependents during the portion of the plan year of the Old
Plan ending on the date such employee's participation in the corresponding
New Plan begins to be taken into account under such New Plan for purposes
of satisfying all deductible, co-insurance and maximum out-of-pocket
requirements applicable to such employee and his or her covered dependents
for the applicable plan year as if such amounts had been paid in accordance
with such New Plan.
ARTICLE VI
COVENANTS OF THE PARTIES
Parent, Merger Sub and the Company covenants and agree as follows:
SECTION 6.1. Registration Statement; Proxy Statement. (a) Each of
Parent and the Company shall cooperate and promptly prepare and Parent
shall file with the Commission as soon as practicable a Registration
Statement on Form S-4 (or any successor form) (the "Form S-4") under the
Securities Act with respect to the shares of Parent Common Stock issuable
and deliverable pursuant to this Agreement. A portion of the Form S-4 shall
serve as a prospectus with respect to the shares of Parent Common Stock
issuable and deliverable pursuant to the terms of this Agreement and as the
Company's proxy statement with respect to the Company Stockholders Meeting
(the "Company Proxy Statement"). Each of Parent and the Company shall use
commercially reasonable efforts to have the Form S-4 declared effective by
the Commission as promptly as practicable after the filing. Parent will
advise the Company, promptly after it receives notice, of (i) the time when
the Form S-4 has become effective or any supplement or amendment thereto
has been filed, (ii) the issuance of any stop order or (iii) the suspension
of the qualification of the shares of Parent Common Stock issuable and
deliverable in connection with the Merger for offering or sale in any
jurisdiction.
(b) The Company and Parent each agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it
or its Subsidiaries for inclusion or incorporation by reference in the Form
S-4 or the Company Proxy Statement, including any amendment or supplement,
will, at the time the Form S-4 becomes effective under the Securities Act,
or, in the case of the Company Proxy Statement, at the date of mailing to
stockholders and at the time of the Company Stockholder Meeting, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If at any time prior to the date of the consummation of the
Merger any information relating to the Company or Parent, or any of their
respective affiliates, officers or directors, should be discovered by the
Company or Parent which should be set forth in an amendment and/or a
supplement to the Form S-4 or the Company Proxy Statement, so that the Form
S-4 or the Company Proxy Statement would not, at the time the Form S-4
becomes effective under the Securities Act, or, in the case of the Company
Proxy Statement, at the date of mailing to stockholders and at the time of
the Company Stockholder Meeting, include any misstatement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, the party which discovers this
information shall promptly notify the other party and, to the extent
required by Law, an appropriate amendment or supplement describing that
information shall be promptly filed with the Commission or any other
applicable Governmental Authority and, to the extent required by Law,
disseminated to the Company's stockholders.
SECTION 6.2. Further Assurances. In addition to complying with all of
the other covenants set forth in this Agreement, each party hereto shall,
subject to the fulfillment at or before the Effective Time of each of the
conditions of performance set forth herein or the waiver thereof, perform
such further acts and execute such documents as may be reasonably required
to effect the Transactions.
SECTION 6.3. Affiliate Letters. Not less than 15 days prior to the
Effective Time, the Company (i) shall have delivered to Parent a letter
identifying all Persons who, in the opinion of the Company, may be, as of
the date of the Company Stockholder Meeting, its "affiliates" for purposes
of Rule 145 under the Securities Act, and (ii) shall use commercially
reasonable efforts to cause each Person who is identified as an "affiliate"
of it in such letter to deliver, as promptly as practicable but in no event
later than 10 days prior to the Closing (or after such later date as the
Parent and the Company may agree), a signed agreement substantially in the
form attached as Exhibit F. Each of Parent and the Company shall notify the
other party from time to time after the delivery of the letter described in
this Section 6.3 of any Person not identified on such letter who then is,
or may be, such an "affiliate" and use commercially reasonable efforts to
cause each additional Person who is identified as an "affiliate" to execute
a signed agreement as set forth in this Section 6.3.
SECTION 6.4. Tax Treatment. (a) The parties hereto intend that the
Merger will qualify as a reorganization under Section 368(a) of the Code
and that this Agreement will constitute a "plan of reorganization" within
the meaning of Treasury Regulation ss. 1.368-2(g). From and after the date
hereof until the Effective Time, each party hereto shall use commercially
reasonable efforts to cause the Merger to qualify, and neither party hereto
will knowingly take any action, cause any action to be taken, fail to take
any action, or cause any action to fail to be taken which action or failure
to act could prevent the Merger from qualifying as a reorganization under
Section 368(a) of the Code.
(b) As of the date hereof, the Company does not know of any
reason why it would not be able to deliver to Fried, Frank, Harris, Xxxxxxx
& Xxxxxxxx at the date of the legal opinion referred to in Section 7.1.5, a
certificate substantially in compliance with IRS published advance ruling
guidelines, with customary exceptions and modifications thereto, to enable
such firm to deliver the legal opinion contemplated by Section 7.1.5, and
the Company agrees to deliver such certificate effective as of the date of
such opinion.
(c) As of the date hereof, Parent does not know of any reason why
it would not be able to deliver to Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
at the date of the legal opinion referred to in Section 7.1.5, a
certificate substantially in compliance with IRS published advance ruling
guidelines, with customary exceptions and modifications thereto, to enable
such firm to deliver the legal opinion contemplated by Section 7.1.5, and
Parent agrees to deliver such certificate effective as of the date of such
opinion.
SECTION 6.5. Letters from Accountants. (a) Parent shall use
commercially reasonable efforts to cause to be delivered to Parent and the
Company two "comfort" letters from PricewaterhouseCoopers LLP, one dated no
earlier than three business days prior to the date on which the Form S-4
shall become effective and one dated no earlier than three business days
prior to the Closing Date, each addressed to the Boards of Directors of
Parent and the Company, in form reasonably satisfactory to the Company and
customary in scope for comfort letters delivered by independent public
accountants in connection with registration statements similar to the Form
S-4.
(b) The Company shall use commercially reasonable efforts to
cause to be delivered to the Company and Parent two "comfort" letters from
KPMG LLP, one dated no earlier than three business days prior to the date
on which the Form S-4 shall become effective and one dated no earlier than
three business days prior to the Closing Date, each addressed to the Boards
of Directors of the Company and Parent, in form reasonably satisfactory to
Parent and customary in scope for comfort letters delivered by independent
public accountants in connection with registration statements similar to
the Form S-4.
SECTION 6.6. Section 16(b). Parent and the Company shall take all
actions required pursuant to Rules 16b-3(d) and 16b-3(e) under the Exchange
Act to cause the disposition in the Merger of the Company Common Stock and
Company Stock Options and the acquisition in the Merger of Parent Common
Stock and Parent Stock Options to be exempt from the provisions of Section
16(b) of the Exchange Act.
SECTION 6.7. Press Release and Public Announcements. The parties shall
cooperate in preparing and promptly issuing a press release announcing the
execution of this Agreement. Thereafter, so long as this Agreement is in
effect, (i) the Company shall not, and shall cause its affiliates not to,
issue or cause the publication of any press release or any other
announcement with respect to the Merger, the Company Stockholders Meeting
or the transactions contemplated by this Agreement without the consent of
Parent, except when such release or announcement is required by applicable
Law or the rules or regulations of the NYSE, in which case the Company,
prior to making such announcement, shall consult with Parent regarding the
same and (ii) prior to the issuance or publication of any press release or
any other announcement Parent shall provide the Company with reasonable
advance notice of such press release or announcement.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.1. Conditions to Each Party's Obligations. The respective
obligations of each party to effect the Merger shall be subject to the
fulfillment or waiver on or prior to the Closing Date of the following
conditions:
7.1.1. Company Stockholder Approval. The Merger Agreement and the
transactions contemplated hereby shall have been approved by the
requisite vote of the stockholders of the Company in accordance
with the OGCA and the Certificate of Incorporation.
7.1.2. No Injunction or Action. No order, statute, rule,
regulation, executive order, stay, decree, judgment or injunction
shall have been enacted, entered, promulgated or enforced or
threatened by any court or other Governmental Authority, which
prohibits or prevents the consummation of the Merger or could
reasonably be expected to have a Company Material Adverse Effect
or a Merger Benefit Detriment.
7.1.3. Governmental Approvals. All waivers, consents, approvals,
orders and authorizations of, and notices, reports and filings
with, Governmental Authorities necessary for the consummation of
the transactions contemplated hereby shall have been obtained or
made and shall be in full force and effect without the imposition
of any terms, conditions, restrictions or limitations, except for
the imposition of any terms, conditions, restrictions and
limitations in respect of, and failures to have obtained or made,
or failures to be in full force and effect of, such waivers,
consents, approvals, orders, authorizations, notices, reports or
filings which will not, individually or in the aggregate, have a
Company Material Adverse Effect or a Merger Benefit Detriment.
7.1.4. HSR Act. The waiting period (or any extension thereof)
applicable to the Merger under the HSR Act shall have expired or
been terminated.
7.1.5. Reorganization Opinion. Parent and the Company shall have
received from Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx a written
opinion, addressed to Parent and the Company and dated as of the
Closing Date, that the exchange of Company Common Stock for
Parent Common Stock pursuant to the Merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code.
In rendering its opinion, Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx may require and rely upon representations and statements
contained in the certificates from Parent and the Company
referred to in Sections 6.4(b) and (c).
7.1.6. Registration Statement Effective. The Form S-4 shall have
become effective prior to the mailing of Company Proxy Statement
and no stop order suspending the effectiveness of the Form S-4
shall then be in effect.
7.1.7. Stock Exchange Listing. The shares of Parent Common Stock
to be issued pursuant to the Merger shall have been duly approved
for listing on the NYSE, subject to official notice of issuance.
SECTION 7.2. Conditions to Obligations of the Company. The obligation
of the Company to effect the Merger shall be subject to the fulfillment on
or prior to the Closing Date of the following additional conditions, any
one or more of which may be waived by the Company:
7.2.1. Parent Representation and Warranties. The representations
and warranties of Parent contained in this Agreement shall be
true and correct when made, and as of the Closing Date as if made
on and as of such date (provided that such representations and
warranties which are expressly made as of a specific date need be
true and correct only as of such specific date), except to the
extent that any failures of such representations and warranties
to be so true and correct, would not, individually or in the
aggregate, have a Parent Material Adverse Effect (disregarding
for these purposes any materiality, Parent Material Adverse
Effect or corollary qualifications contained therein).
7.2.2. Performance by Parent. Parent shall have performed and
complied in all material respects with all of the covenants and
agreements required by this Agreement to be performed or complied
with by Parent on or prior to the Closing Date.
7.2.3. No Material Adverse Change. There shall not have occurred
after the date hereof any Event or Events that, individually or
the aggregate, has a Parent Material Adverse Effect.
7.2.4. Certificates and Other Deliveries. Parent shall have
delivered to the Company an officer's certificate to the effect
that the conditions set forth in Subsections 7.2.1, 7.2.2, and
7.2.3 above, have been satisfied.
SECTION 7.3. Conditions to Obligations of Parent. The obligations of
Parent to effect the Merger shall be subject to the fulfillment on or prior
to the Closing Date of the following additional conditions, any one or more
of which may be waived by Parent:
7.3.1. Company Representations and Warranties. The
representations and warranties of the Company contained in this
Agreement shall be true and correct when made and as of the
Closing Date as if made on and as of such date (provided that
such representations and warranties which are by their express
provisions made as of a specific date need be true and correct
only as of such specific date), except to the extent that any
failures of such representations and warranties to be so true and
correct, will not, individually or the aggregate, have a Company
Material Adverse Effect (disregarding for these purposes any
materiality, Company Material Adverse Effect or corollary
qualifications contained therein).
7.3.2. Performance by the Company. The Company shall have
performed and complied in all material respects with all
covenants and agreements required by this Agreement to be
performed or complied with by the Company on or prior to the
Closing Date.
7.3.3. No Material Adverse Change. There shall have not occurred
after the date hereof any Event or Events that would,
individually or in the aggregate, have a Company Material Adverse
Effect; provided that any actions taken by Parent or any Parent
Subsidiary in connection with the Cedarapids Lawsuits (as defined
below) shall not constitute a Company Material Adverse Effect.
7.3.4. Miscellaneous Agreement. The transactions contemplated by
the Miscellaneous Agreement shall have been consummated prior to
the Closing Date.
7.3.5. Termination of Certain Agreements. Each of the Investment
Agreement, dated as of August 19, 1991, between the Company and
the other party thereto, the Shareholders Agreement, dated as of
August 19, 1991, between the Company and the other parties
thereto and the Registration Rights Agreement, dated as of August
19, 1991, between the Company and the other party thereto shall
be terminated and shall have no further force and effect.
7.3.6. Consents. The Company shall have obtained all necessary
Consents to the completion of the Merger and the other
transactions contemplated by this Agreement and such Consents
shall be in full force and effect.
7.3.7. Certificates and Other Deliveries. The Company shall have
delivered, or caused to be delivered, to Parent (i) an officer's
certificate to the effect that the conditions set forth in
Subsections 7.3.1, 7.3.2 and 7.3.3 above, have been satisfied and
(ii) the certificates contemplated by Section 1.2(c).
ARTICLE VIII
TERMINATION
SECTION 8.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of this
Agreement and the Merger by the stockholders of the Company:
(a) by mutual consent of the Company and Parent;
(b) (1) by the Company, if there has been a breach by Parent of
any of its representations, warranties, covenants or agreements contained
in this Agreement that would cause the condition set forth in Section 7.2.1
or Section 7.2.2 not to be satisfied and, in either such case, such breach
or condition is not curable or, if curable, has not been promptly cured
within 30 days following receipt by Parent of written notice of such
breach; (2) by Parent, if there has been a breach by the Company of (x) any
of the covenants or agreements set forth in Sections 4.4 or 4.8 or (y) any
of its representations, warranties, covenants or agreements (other than
those set forth in Sections 4.4 or 4.8) contained in this Agreement that
would cause the condition set forth in Section 7.3.1 or Section 7.3.2 not
to be satisfied and, in the case of a breach described in clause (x) or
(y), such breach or condition is not curable or, or if curable, has not
been promptly cured within 10 days (in the case of a breach described in
clause (x)) or 30 days (in the case of a breach described in clause (y))
following receipt by the Company of written notice of such breach;
(c) by either Parent or the Company if any decree, permanent
injunction, judgment or order of any Governmental Authority preventing or
prohibiting consummation of the Merger shall have become final and
nonappealable;
(d) by either Parent or the Company if the Merger shall not have
been consummated before December 31, 2001 (the "End Date");
(e) by either Parent or the Company if the transactions
contemplated by this Agreement shall fail to receive the Company
Stockholder Approval at the Company Stockholders Meeting or any adjournment
or postponement thereof; or
(f) by Parent, if the Board of Directors of the Company shall
have withdrawn, or modified or changed, in a manner adverse to Parent or
Merger Sub, its approval or recommendation of the Merger or shall have
recommended any Takeover Proposal.
SECTION 8.2. Effect of Termination. (a) In the event of the
termination of this Agreement by either the Company or Parent pursuant to
Section 8.1, this Agreement shall become void and of no effect and there
shall be no liability under this Agreement on the part of Parent or the
Company, other than the provisions of this Section 8.2 and Section 9.4, and
except to the extent that such termination results from a willful breach by
a party of any of its representations, warranties, covenants or agreements
set forth in this Agreement.
(b) The Company shall pay to Parent, in such manner as is
designated by Parent, an aggregate amount equal to the Expenses (as defined
below) (without duplication for Expenses paid previously pursuant to
Section 8.2(c)), plus $3 million (the "Termination Fee"), as follows: (1)
if the Company or Parent shall terminate this Agreement pursuant to
Sections 8.1(d) or 8.1(e) and at any time after the date of this Agreement
and on or prior to the date of the Company Stockholders Meeting a Takeover
Proposal shall have been publicly announced and, within 12 months of the
termination of this Agreement, the Company enters into a definitive
agreement with respect to an Acquisition Transaction, (2) if Parent shall
terminate this Agreement pursuant to Section 8.1(b)(2) and within 12 months
of the termination of this Agreement the Company enters into a definitive
agreement with respect to an Acquisition Transaction, or (3) if Parent
shall terminate this Agreement pursuant to Section 8.1(f) and within 12
months of the termination of this Agreement the Company enters into a
definitive agreement with respect to an Acquisition Transaction.
(c) The Company shall pay to Parent, in such manner as is
designated by Parent, an amount equal to the Expenses if Parent shall
terminate this Agreement pursuant to Sections 8.1(b)(2) or 8.1(f) or if the
Company or Parent shall terminate this Agreement pursuant to Section
8.1(e).
(d) The Termination Fee required to be paid pursuant to Section
8.2(b) shall be paid at the time the Company enters into a definitive
agreement with respect to an Acquisition Transaction. The Expenses to be
paid pursuant to Sections 8.2(b) and 8.2(c) shall be paid concurrently with
notice of termination of this Agreement by the Company or Parent, as
applicable.
(e) The term "Expenses" shall mean all out-of-pocket expenses
reasonably incurred by Parent in connection with this Agreement and the
transactions contemplated hereby, including, without limitation, fees and
expenses of accountants, attorneys and financial advisors; provided,
however, that in no event shall the amount of Expenses exceed $1 million.
(f) All payments under this Section 8.2 shall be made by wire
transfer of immediately available funds to an account designated by the
recipient of such funds.
(g) The Company acknowledges that the agreements contained in
this Section 8.2 are an integral part of the transactions contemplated by
this Agreement, and that, without such agreements, Parent would not enter
into this Agreement. Accordingly, if the Company fails to promptly pay any
amounts owing pursuant to this Section 8.2 when due, the Company shall in
addition thereto pay to Parent and its affiliates all costs and expenses
(including fees and disbursements of counsel) incurred in collecting such
amounts, together with interest on such amounts (or any unpaid portion
thereof) from the date such payment was required to be made until the date
such payment is received by the Parent and its affiliates at the prime rate
of Citibank, N.A. as in effect from time to time during such period plus 2
percent.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile or similar
writing) and shall be given,
if to Parent or Merger Sub, to:
Terex Corporation
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx X Xxxxx, Senior Vice President,
Secretary and General Counsel
Facsimile No.: (000) 000-0000
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxx, Esq.
Xxxxxx X. Xxxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
if to the Company, to:
CMI Corporation
X-00 & Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxxx, Senior Vice President, Treasurer
and Chief Financial Officer
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxx Xxxxx & Xxxxxxx
000 Xxxxxx X. Xxxx Xxx., Xxxxx 0000
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Xxxxxx Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
or such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the other parties. Each such notice,
request or other communication shall be effective (a) if given by
facsimile, when such facsimile is transmitted to the facsimile number
specified in this Section and the appropriate facsimile confirmation is
received or (b) if given by any other means, when delivered at the address
specified in this Section.
SECTION 9.2. Non-Survival of Representations and Warranties. The
representations and warranties contained herein and in the certificates
delivered pursuant to Sections 7.2.4 and 7.3.7 hereof shall not survive the
Effective Time.
SECTION 9.3. Amendments; No Waivers. (a) Any provision of this
Agreement (including the Exhibits, Appendices and Schedules hereto) may be
amended or waived prior to the Effective Time at any time prior to or after
the receipt of the Company Stockholder Approval, if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment,
by the Company, Parent and Merger Sub, or in the case of a waiver, by the
party against whom the waiver is to be effective; provided that after the
receipt of the Company Stockholder Approval, if any such amendment or
waiver shall by law or in accordance with the rules and regulations of any
relevant securities exchange require further approval of stockholders, the
effectiveness of such amendment or waiver shall be subject to the necessary
stockholder approval.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 9.4. Expenses. Except as otherwise specified in Section 8.2 or
as otherwise agreed to in writing by the parties, all costs and expenses
incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
cost or expense, except that (i) the filing fees in respect to filings made
pursuant to the HSR Act and all similar filings in other jurisdictions
shall be paid by Parent; and (ii) all filing fees in connection with the
filing with the Commission of the Form S-4 and the Company Proxy Statement,
all printing, mailing and related expenses incurred in connection with
printing and mailing of the Form S-4 and the Company Proxy Statement and
all other expenses not directly attributable to any one of the parties,
shall be shared equally by Parent and the Company.
SECTION 9.5. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns; provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto except that
Merger Sub may transfer or assign, in whole or from time to time in part,
to one or more of its affiliates, its rights under this Agreement, but any
such transfer or assignment will not relieve Merger Sub of its obligations
hereunder.
SECTION 9.6. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware, without
regard to principles of conflict of laws, except to the extent that the
OGCA shall be mandatorily applicable to the Merger.
SECTION 9.7. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement, the Voting Agreements or the transactions
contemplated hereby or thereby may be brought in any federal or state court
located in the State of Delaware, and each of the parties hereby consents
to the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient
forum. Process in any such suit, action or proceeding may be served on any
party anywhere in the world, whether within or without the jurisdiction of
any such court.
SECTION 9.8. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 9.9. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto
shall have received counterparts hereof signed by all of the other parties
hereto.
SECTION 9.10. Entire Agreement. This Agreement (including the
Exhibits, Appendices and Schedules) the Voting Agreements, the
Confidentiality Agreement and the Company Confidentiality Agreement
constitute the entire agreement between the parties with respect to the
subject matter of this Agreement and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to
the subject matter hereof and thereof. Except as provided in Section 5.4,
no provision of this Agreement or any other agreement contemplated hereby
is intended to confer on any Person other than the parties hereto any
rights or remedies.
SECTION 9.11. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 9.12. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such a determination, the parties shall
negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent possible.
SECTION 9.13. Specific Performance. Each party acknowledges and agrees
that the other party could be irreparably damaged in the event that its
obligations contained in this Agreement and the Voting Agreements are not
performed in accordance with their specific terms or are otherwise breached
in each case on or prior to the Effective Time. Accordingly, each party
agrees that the other party will be entitled to an injunction or
injunctions to enforce specifically any covenants in any action in any
court having personal and subject matter jurisdiction, in addition to any
other remedy to which that party may be entitled at law or in equity.
SECTION 9.14. Disclosure Schedule. Certain information set forth in
the Company Disclosure Schedule is included solely for informational
purposes and may not be required to be disclosed pursuant to this
Agreement. The disclosure of any such information shall not be deemed to
constitute an acknowledgment that such information is required to be
disclosed in connection with the representations and warranties made by the
Company in this Agreement or that it is material, nor shall such
information be deemed to establish a standard of materiality.
SECTION 9.15. Knowledge. (a) Reference to the "knowledge" of the
Company shall be to the knowledge, after reasonable investigation, of any
of the individuals listed on Appendix II and, with respect to
representations and warranties made or deemed to be made as of the Closing
Date, unless expressly limited to a specified date, shall include knowledge
obtained at any time after the date hereof and prior to the Closing Date.
(b) Reference to the "knowledge" of Parent shall be to the
knowledge, after reasonable investigation, of any of the individuals listed
on Appendix III and, with respect to representations and warranties made or
deemed to be made as of the Closing Date, unless expressly limited to a
specified date, shall include knowledge obtained at any time after the date
hereof and prior to the Closing Date.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
TEREX CORPORATION
By: /s/ Xxxx X Xxxxx
-------------------------------------
Name: Xxxx X Xxxxx
Title: Senior Vice President
CMI CORPORATION
By: /s/ Xxxxxx Xxxxxxx Xxxxxxx, Xx.
-------------------------------------
Name: Xxxxxx Xxxxxxx Xxxxxxx, Xx.
Title: Chief Executive Officer
CLAUDIUS ACQUISITION CORP.
By: /s/ Xxxx X Xxxxx
-------------------------------------
Name: Xxxx X Xxxxx
Title: Vice President
APPENDIX I
Closing Net Debt Amount
-----------------------
Capitalized terms contained in this Appendix I shall have the meanings
ascribed to such terms in the Agreement unless otherwise defined herein.
For purposes of Section 1.2(b) of the Agreement, the consolidated net debt
of the Company shall mean all Indebtedness of the Company and the Company
Subsidiaries less unrestricted cash and adjusted to exclude intercompany
balances. Notwithstanding anything to the contrary in this Appendix I or in
the Agreement, the parties acknowledge and agree that the following
obligations shall not be considered in calculating the consolidated net
debt of the Company pursuant to Section 1.2(b) of the Agreement: (A) any
prepayment or other similar fees payable under the terms and provisions of
any of the Indebtedness as a result of the Merger or the other transactions
contemplated by the Agreement, (B) any fees payable by the Company to
Credit Suisse First Boston Corporation in connection with the consummation
of the Merger, (C) any amounts paid or payable to Xxxxxx Xxxxxxx Xxxxxxx,
Xx. or Industrial Investments in connection with the Miscellaneous
Agreement or the Xxxxxxx Non-Compete Agreement, (D) any amounts owed or
allegedly owed by the Company to Cedarapids, Inc. in connection with the
patent infringement cases pending in the U.S. District Court for the
Western District of Oklahoma and the U.S. District Court for the Northern
District of Iowa (the "Cedarapids Lawsuits"), (E) any amounts payable in
the event that the other equity holders of CMI Cifali Equipamentos, Ltda.
f/k/a Cifali & Cia. Ltda. ("Cifali") give notice of their intent to
exercise their put rights under Section 2.6.12.3 of the Stock Purchase
Agreement, dated July 26, 2000, among the Company, Cifali and certain other
parties (the "Cifali Agreement"); (F) any amounts payable to Xxxxxx X.
Xxxxxx pursuant to Section 4.3 of the Employment Agreement, dated January
7, 2000, between the Company and Xxx. Xxxxxx; (G) any contingent
liabilities relating to equipment residual value guarantees provided by the
Company or a Company Subsidiary to the CIT Group/Equipment Financing, Inc.
or other similar institution; (H) any amounts payable pursuant to the
Settlement Agreement, dated June 20, 2001, among Xxxxxx X. Xxxxx
Incorporated, Xxxxxx X. Xxxxx, Xxxxxxxxx X. Xxxxx and the Company; or (I)
any amounts payable pursuant to Section 2.1(b) of the Cifali Agreement.
For purposes of this Appendix I, the following terms shall have the
meanings set forth below:
"Indebtedness" of any entity shall mean, without duplication, (a) all
obligations of such entity for borrowed money or advances of any kind
(other than nonrefundable customer deposits), (b) all obligations of such
entity evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such entity upon which interest charges are customarily
paid, (d) all obligations of such entity under conditional sale or other
title retention agreements relating to property or assets purchased by such
entity, (e) all obligations of such entity issued or assumed as the
deferred purchase price of property or services (excluding trade accounts
payable and accrued obligations incurred in the ordinary course of
business), (f) all indebtedness of others secured by (or for which the
holder of such indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property owned or acquired by such entity,
whether or not the obligations secured thereby have been assumed, (g) all
Guarantees by such entity, (h) all Capital Lease Obligations of such
entity, and (i) all obligations of such entity as an account party in
respect of letters of credit and bankers' acceptances.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge, or security interest in or on
such asset (other than liens for taxes not yet due and payable in the
ordinary course of business), (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic
effect as any of the foregoing) relating to such asset and (c) in the case
of securities, any purchase option, call or similar right of a third party
with respect to such securities.
"Guarantee" of or by any entity shall mean any obligation, contingent
or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other entity (the "primary obligor")
in any manner, whether directly or indirectly, and including any obligation
of such entity, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or to
purchase (or advance or supply funds for the purchase or payment of) any
security for the payment of such Indebtedness, (b) to purchase or lease
property, securities or services for the purpose of assuring the owner of
such Indebtedness of the payment of such Indebtedness or (c) to maintain
working capital, equity capital or any other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor to
pay such Indebtedness; provided, however, that the term "Guarantee" shall
not include endorsements for collection or deposit in the ordinary course
of business.
"Capital Lease Obligations" of any entity shall mean the obligations
of such entity to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such entity under
GAAP, and the amount of such obligations shall be the capitalized amount
thereof determined in accordance with GAAP.
APPENDIX II
Xxxxxx Xxxxxxx Xxxxxxx, Xx.
Xxx X. Xxxxxxx
Xxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
APPENDIX III
Xxxxxx X. XxXxx
Xxxxxx X. Xxxxxx
Xxxx X Xxxxx
Xxxxx X. Xxxxx
