Exhibit (d)(1)
This AGREEMENT AND PLAN OF MERGER, dated as of August 8, 2002 (this
"Agreement"), among Bureau Veritas, S.A., a societe anonyme organized under the
laws of the French Republic ("Parent"), Voice Acquisition Corp., a Delaware
corporation and an indirect wholly owned Subsidiary of Parent ("Purchaser"),
and U.S. Laboratories Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, pursuant to this Agreement the Parent has agreed to acquire the
Company by causing the Purchaser to make a tender offer for all the issued and
outstanding shares of common stock, par value $.01 per share of the Company
(the "Company Common Stock") at a price per share of Company Common Stock of
$14.50 net to the seller in cash and as promptly as practicable after the
closing of the Offer (defined herein), causing the Purchaser to merge with and
into the Company, with each then issued and outstanding share of Company Common
Stock being converted into the same amount of cash per share as paid in the
Offer, upon the terms and conditions set forth herein; and
WHEREAS, the respective Boards of Directors of Parent, the Purchaser and the
Company have each approved the Offer and the Merger (as defined herein) and
have determined that it is in the best interests of their respective companies
and stockholders for Parent to acquire the Company upon the terms and subject
to the conditions set forth herein; and
WHEREAS, in order to complete such acquisition, the respective Boards of
Directors of Parent, the Purchaser and the Company have approved the merger of
the Purchaser with and into the Company (the "Merger"), upon the terms and
subject to the conditions of this Agreement and in accordance with the Delaware
General Corporation Law (the "DGCL"), whereby each issued and outstanding share
of Company Common Stock not owned directly or indirectly by Parent or the
Company will be converted into the right to receive the price per share in cash
actually paid in the Offer; and
WHEREAS, the Board of Directors of the Company (the "Board of Directors of
the Company") has unanimously approved this Agreement, the Offer and the
Merger, has determined that the Offer and the Merger are advisable, fair to and
in the best interests of the Company and its stockholders and is recommending
that the Company's stockholders accept the Offer, tender their shares of
Company Common Stock thereunder and, to the extent required by applicable law,
authorize, approve and adopt this Agreement and the transactions contemplated
thereby, including the Merger; and
WHEREAS, as a condition and inducement to Parent and the Purchaser entering
into this Agreement, simultaneously with the execution and delivery of this
Agreement, Xxxxxxxxx Xxxxxx is entering into a Contingent Payment Agreement
with Bureau Veritas Holdings, Inc., a direct wholly owned subsidiary of Parent
and direct owner of all the capital stock of Purchaser ("BVHI"), and the
Purchaser, a Tender and Support Agreement (the "Tender Agreement") with the
Parent and the Purchaser, pursuant to which Xxxxxxxxx Xxxxxx shall agree,
subject to the terms and conditions contained therein, to tender the Company
Common Stock held by him in the Offer and support any and all corporate action
necessary to consummate the Merger and,
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upon the consummation of the Offer, an Escrow Agreement among the Parent, BVHI,
the Purchaser, the Company, and Escrow Agent in the form of Exhibit A, B, and C
respectively.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I.
THE TENDER OFFER
1.1 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article VII hereof and none of the events set forth in Annex
A hereto (the "Offer Conditions") shall have occurred and be continuing, as
promptly as practicable, but in no event later than ten Business Days after
the date hereof, the Purchaser will commence (within the meaning of Rule
14d-2 under the Securities Exchange Act of 1934, as amended, including the
rules and regulations promulgated thereunder, the "Exchange Act") a tender
offer (the "Offer") for all shares of the Company Common Stock at a price
per share of the Company Common Stock of $14.50 net to the Seller in cash
(such price, or any higher price paid in the Offer, the "Price Per Share")
upon the terms and conditions set forth in this Agreement, including Annex A
hereto. The Offer shall be made by means of an offer to purchase containing
the terms set forth in this Agreement, the Minimum Condition and the other
conditions set forth in Annex A hereto and the Offer Documents (as defined
hereinafter). The acceptance for payment, purchase and payment for shares of
Company Common Stock pursuant to the Offer shall be referred to as the
"consummation of the Offer."
(b) The obligation of the Purchaser to accept for payment, purchase and
pay for any Company Common Stock validly tendered pursuant to the Offer on
or prior to the Expiration Date and not withdrawn prior to such Expiration
Date shall be subject only to the satisfaction or waiver of the Offer
Conditions, specifically including the Offer Condition that at least that
number of shares of Company Common Stock representing at least a majority of
the total issued and outstanding shares of Company Common Stock on a "fully
diluted basis" shall have been validly tendered and not withdrawn prior to
5:00 p.m. New York City time, on the Expiration Date (the "Minimum
Condition"). "Fully diluted basis" shall mean, as of any date, the number of
shares of Company Common Stock that are issued and outstanding, together
with the shares of Company Common Stock that may be issued by the Company
pursuant to warrants, options, rights or obligations outstanding at that
date whether or not vested or then exercisable, including the conversion of
all convertible securities, if any.
(c) The Purchaser will not, without the prior written consent of the
Company (such consent to be authorized by the Board of Directors of the
Company): (i) amend or waive the Minimum Condition, (ii) decrease the amount
or change the form of consideration payable in the Offer, (iii) decrease the
number of shares of the Company Common Stock sought in the Offer, (iv)
impose additional conditions to the Offer, (v) change any Offer Condition or
amend any other term of the Offer if any such change or amendment would be
in any manner adverse to the holders of Company Common Stock (other than
Parent or the Purchaser) or (vi) except as
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provided below, extend the Offer if all of the Offer Conditions have been
satisfied. Subject to the terms and conditions hereof, the Offer shall
remain open until midnight, New York City time, on the date that is twenty
(20) Business Days after the Offer is commenced (within the meaning of Rule
14d-2 under the Exchange Act)(the "Expiration Date"); provided, however,
that without the consent of the Board of Directors of the Company, the
Purchaser may (i) extend the Offer, if at the scheduled Expiration Date of
the Offer any of the Offer Conditions shall not have been satisfied or
waived for one (1) or more periods (none of which shall exceed ten (10)
Business Days), until such time as such conditions are satisfied or waived,
(ii) extend the Offer for one (1) or more periods, if required by any rule,
regulation, interpretation or position of the Securities and Exchange
Commission ("SEC") or the staff thereof applicable to the Offer or (iii)
extend the Offer on one (1) occasion for an aggregate period of not more
than five (5) Business Days beyond the latest Expiration Date that would
otherwise be permitted under clause (i) or (ii) of this sentence if on such
Expiration Date there shall not have been tendered that number of shares of
Company Common Stock which would equal more than ninety percent (90%) of the
issued and outstanding shares of Company Common Stock, each such extension
in (i) - (iii) being a "Subsequent Offering Period." The Purchaser agrees
that if all of the Offer Conditions are not satisfied or waived on any
Expiration Date of the Offer, then the Purchaser may, but is not required
to, from time to time extend the Offer until the earlier of (x) such time as
all such conditions are satisfied or waived or (y) October 8, 2002 (the
"Outside Date"); provided, however, that if the Offer is not consummated at
the Expiration Date due to the failure to satisfy the Offer Condition
relating to the expiration of the waiting period under the HSR Act or any
other applicable foreign antitrust statutes or regulations, Purchaser shall,
at the request of the Company, extend the Expiration Date for a period of
ten Business Days, but in no event will the Purchaser extend the Offer
beyond the Outside Date.
(d) Assuming the prior satisfaction or waiver of the Minimum Condition
and the other Offer Conditions contemplated hereby, the Purchaser shall pay
for all shares of Company Common Stock validly tendered and not withdrawn
pursuant to the Offer as soon as practicable after the Expiration Date of
the Offer. Parent shall provide or cause to be provided to the Purchaser on
a timely basis the funds necessary to purchase any shares of Company Common
Stock that Purchaser becomes obligated to purchase pursuant to the Offer. At
the expiration of the Offer and the Effective Time, Parent and the Purchaser
will have available all of the funds necessary for the acquisition of all
shares of Company Common Stock pursuant to the Offer and the Merger, as the
case may be, and to perform their respective obligations under this
Agreement.
1.2 SEC Filings.
(a) As soon as reasonably practicable on the date of commencement of the
Offer, Parent and the Purchaser shall file with the SEC a Tender Offer
Statement on Schedule TO with respect to the Offer (as supplemented or
amended from time to time, the "Schedule TO") to provide for the purchase of
the issued and outstanding shares of Company Common Stock in accordance with
the terms hereof. The Schedule TO shall contain or shall incorporate by
reference an Offer to Purchase ("Offer to Purchase") and forms of the
related Letter of Transmittal and related summary advertisement (the
Schedule TO, the Offer to Purchase and such other documents, together with
all supplements and amendments thereto being hereinafter referred to
collectively as the "Offer Documents") that the Offer Documents
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will comply in all material respects with the applicable provisions of the
federal securities laws and, on the date filed with the SEC and on the date
first published, mailed or given to the Company's stockholders and at all
times thereafter, shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary or in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by Parent or the Purchaser with respect to
information furnished by the Company to Parent or the Purchaser, in writing,
expressly for inclusion in the Offer Documents. The information supplied by
the Company to Parent or the Purchaser, in writing, expressly for inclusion
in the Offer Documents and by Parent or the Purchaser to the Company, in
writing, expressly for inclusion in the Schedule 14D-9 (as hereinafter
defined) shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Company and its counsel shall be
given an opportunity to review and comment upon the Offer Documents and any
amendment or supplement thereto prior to the filing thereof with the SEC,
and Parent and the Purchaser shall give such comments good faith
consideration appropriate under the circumstances. Parent and the Purchaser
agree to provide to the Company and its counsel any comments which Parent,
the Purchaser or their counsel may receive from the Staff of the SEC, and
any proposed responses thereto, with respect to the Offer Documents and any
amendment or supplement thereto promptly after receipt thereof. Parent, the
Purchaser and the Company agree to correct promptly any information provided
by any of them for use in the Offer Documents which shall have become false
or misleading in any material respect, and Parent and the Purchaser further
agree to take all steps necessary to cause the Schedule TO as so corrected
to be filed with the SEC and to disseminate any revised Offer Documents to
the Company's stockholders, in each case as and to the extent required by
the applicable provisions of the federal securities laws.
(b) Subject to the provisions of Section 5.4, the Board of Directors of
the Company shall recommend acceptance of the Offer to the Company's
stockholders in a Solicitation/Recommendation Statement on Schedule 14D-9
(as supplemented or amended from time to time, the "Schedule 14D-9"),
provided, however, that the Board of Directors of the Company may thereafter
amend, modify or withdraw its recommendation, or make no recommendation, to
the extent that the Board of Directors of the Company shall have determined,
in good faith after consultation with its legal counsel, that the failure to
take such action would be inconsistent with the fiduciary duties of the
Company's directors under applicable law (it being understood by the parties
that any withdrawal or modification of the recommendation of the Board of
Directors of the Company shall not alter the approval of this Agreement, the
Tender Agreements, the Offer Documents or the transaction contemplated
thereby for purposes of Section 203 of the DGCL and such amendment,
modification or withdrawal is otherwise permitted under the terms of this
Agreement). The Company shall file the Schedule 14D-9 with the SEC upon
commencement of the Offer and the Schedule 14D-9 will comply as to form and
content in all material respects with the applicable provisions of the
federal securities laws. The Company will cooperate with Parent and the
Purchaser in mailing or otherwise disseminating the Schedule 14D-9 with the
appropriate Offer Documents to the stockholders of the Company. Parent and
its counsel shall be given an opportunity to review and comment upon the
Schedule 14D-9 and any amendment or supplement thereto prior to the filing
thereof with the SEC, and the Company shall consider any such comments in
good faith. The
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Company agrees to provide to Parent and the Purchaser and their counsel any
comments which the Company or its counsel may receive from the Staff of the
SEC, and any proposed responses thereto, with respect to the Schedule 14D-9
and any amendment or supplement thereto promptly after receipt thereof. The
Company, Parent and the Purchaser agree to correct promptly any information
provided by any of them for use in the Schedule 14D-9 which shall have
become false or misleading in any material respect, and the Company further
agrees to take all steps necessary to cause such Schedule 14D-9 as so
corrected to be filed with the SEC and disseminated to the Company's
stockholders, in each case as and to the extent required by the applicable
provisions of the federal securities laws. Parent, the Purchaser and the
Company each hereby agree to provide promptly such information necessary to
the preparation of the exhibits and schedules to the Schedule 14D-9 and the
Offer Documents which the respective party responsible therefor shall
reasonably request. The Company hereby consents to the inclusion in the
Offer Documents of the recommendations and approvals referred to in this
Section 1.2 and Section 3.1(c); provided, that the Board of Directors of the
Company may withdraw or modify its recommendation in the manner specified in
Section 5.4(b).
1.3 Company Action.
(a) The Company hereby approves of and consents to the making of the
Offer and represents that the Board of Directors of the Company, at a
meeting duly called and held on August 8, 2002, at which a majority of the
Directors was present, has unanimously (i) determined that this Agreement
and the transactions contemplated hereby, including the Merger and the Offer
are fair to, and in the best interests of, the Company and its stockholders,
(ii) duly authorized and approved this Agreement and approved the Merger and
the other transactions contemplated hereby (including but not limited to the
Offer), and (iii) resolved to recommend that the stockholders of the Company
accept the Offer, tender their Company Common Stock pursuant to the Offer
and, to the extent required by applicable law, authorize, approve and adopt
this Agreement and the transactions contemplated hereby, including the
Merger (the "Company Tender Recommendation"). Subject to the terms of this
Agreement, including, without limitation, Section 5.4(b), the Company hereby
consents to the inclusion in the Offer Documents prepared in connection with
the Offer of the recommendation of the Board of Directors of the Company
described in the preceding sentence.
(b) In connection with the Offer, the Company shall promptly furnish the
Purchaser with such information (including a list of the record holders of
the Company Common Stock and their addresses, as well as mailing labels
containing the names and addresses of all record holders of Company Common
Stock, any non-objecting beneficial owner lists and lists of security
positions in written and electronic form of Company Common Stock held in
stock depositories in the Company's possession or control, in each case as
of a recent date), and shall thereafter render such assistance as Parent,
the Purchaser or their agents may reasonably request (including updated
lists of stockholders, non-objecting beneficial owner lists and security
position listings, in written and electronic form) in communicating the
Offer to the record and beneficial holders of the Company Common Stock.
Subject to the requirements of applicable law and except for such steps as
are necessary to disseminate the Offer Documents and any other documents
necessary to consummate the Offer and the Merger, Parent and the Purchaser
shall (a) hold in confidence the information contained in any of such labels
and lists, (b) use such information only in connection with the Offer and
the Merger and (c) if this Agreement is
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terminated, shall, upon request, deliver to the Company or destroy all
copies of such information then in their possession and shall certify to the
Company that it has done so.
1.4 Composition of the Board of Directors of the Company.
(a) Promptly upon the acceptance for payment of, and payment by the
Purchaser in accordance with the Offer for, not less than a majority of the
outstanding shares of Company Common Stock on a fully diluted basis pursuant
to the Offer (the "Purchase Date") and prior to the Effective Time, the
Purchaser shall be entitled to designate a majority of the Board of
Directors of the Company. Upon the request of the Purchaser, the Company
shall (i) either increase the size of the Board of Directors of the Company
or use its best efforts to secure the resignations of all of its incumbent
directors other than (x) three (3) of the current directors who are not
employees of the Company or stockholders, affiliates, or employees of the
Parent or Purchaser and (y) any other director the Parent may designate, and
(ii) cause the Purchaser's designees (equal to the aggregate number of
vacancies so created) to be elected to the Board of Directors of the
Company, in each case as may be necessary to comply with the foregoing
provisions of this Section 1.4(a). If the Company is not successful in
obtaining the requisite resignations, the Company shall increase the size of
the Board of Directors of the Company to enable the Purchaser to designate
at least a majority of the total number of directors of the Company.
(b) The Company's obligation to cause designees of the Purchaser to be
elected or appointed to the Board of Directors of the Company shall be
subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder. The Company shall promptly take all actions required pursuant to
Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this
Section 1.4, and shall include in the Schedule 14D-9 such information with
respect to the Purchaser and its designees as is required under Section
14(f) and Rule 14f-1. Parent and the Purchaser will supply to the Company in
writing and be solely responsible for any information with respect to any of
them and their designees, officers, directors and affiliates required by
Section 14(f) and Rule 14f-1 and applicable rules and regulations.
(c) After the time that Purchaser's designees constitute at least a
majority of the Board of Directors of the Company and until the Effective
Time, the Board of Directors of the Company shall always have at least three
members (the "Independent Directors") who are neither officers of Parent nor
designees, shareholders or affiliates of Parent or Parent's affiliates. Any
(i) amendment or termination of this Agreement, (ii) extension of time for
the performance or waiver of the obligations or other acts of Parent or the
Purchaser or waiver of the Company's rights hereunder or (iii) action by the
Company with respect to this Agreement and the transactions contemplated
hereby which affects the interests of the stockholders of the Company,
including the consummation of the Merger, shall require the approval of the
Independent Directors in addition to any required approval by the full Board
of Directors of the Company. If the number of Independent Directors shall be
reduced below three for any reason whatsoever, the remaining Independent
Director shall be entitled to designate persons who shall be elected by the
full Board of Directors of the Company to fill such vacancies and who shall
be deemed to be Independent Directors for purposes of this Agreement or, if
no Independent Directors then remain, the other directors shall designate
three persons to fill such vacancies who shall not be officers or affiliates
of Parent or any of Parent's affiliates, and such persons shall be deemed to
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be Independent Directors for purposes of this Agreement. The Board of
Directors of the Company shall not delegate any matter set forth in this
Section 1.4 to any committee of the Board of Directors of the Company.
ARTICLE II.
THE MERGER
2.1 The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the DGCL, the Purchaser shall be merged
with and into the Company at the Effective Time. Following the Merger, the
separate corporate existence of the Purchaser shall cease, and the Company
shall continue as the surviving corporation (the "Surviving Corporation") in
accordance with the DGCL.
2.2 Closing. The closing of the Merger (the "Closing") will take place on
the first Business Day after satisfaction or waiver (as permitted by this
Agreement and applicable law) of the conditions (excluding conditions that, by
their terms, cannot be satisfied until the Closing Date) set forth in Article
VI (the "Closing Date"), unless another time or date is agreed to in writing by
the parties hereto. The Closing shall be held at the offices of Xxxxxx Xxxx &
Priest LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another place
is agreed to in writing by the parties hereto.
2.3 Effective Time. Upon the Closing, the parties shall file with the
Secretary of State of the State of Delaware either (i) a certificate of merger,
in form and substance satisfactory to the Company and Parent, or (ii) in the
event the Purchaser shall have acquired 90% or more of the outstanding shares
of Company Common Stock, a certificate of ownership and merger (in either such
case, the "Certificate of Merger") executed in accordance with the relevant
provisions of the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Delaware Secretary of State, or at
such other time as the parties may agree and specify in the Certificate of
Merger (the time the Merger becomes effective being the "Effective Time").
2.4 Effect of the Merger. At and after the Effective Time, the Merger will
have the effects set forth in the applicable provisions of the DGCL, without
limiting the foregoing, at the Effective Time, except as otherwise provided
herein, all the property, rights, privileges, powers and franchises of the
Company shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company shall become the debts, liabilities and duties of the
Surviving Corporation.
2.5 Certificate of Incorporation. At the Effective Time and without any
further action on the part of the Company and the Purchaser, the certificate of
incorporation of the Company shall be the certificate of incorporation of the
Surviving Corporation, until thereafter changed or amended as provided therein
or by applicable law.
2.6 Bylaws. The bylaws of the Purchaser as in effect at the Effective Time
shall be the bylaws of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law.
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2.7 Officers and Directors of Surviving Corporation. The directors of the
Purchaser and/or any individuals designated by the Purchaser immediately prior
to the Effective Time (but not more than 2 persons in total) and Xxxxxxxxx
Xxxxxx shall be the initial directors of the Surviving Corporation, until the
earlier of their resignation or removal or otherwise ceasing to be a director
or until their respective successors are duly elected and qualified, as the
case may be. The officers of the Company immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation, until the
earlier of their resignation or removal or otherwise ceasing to be an officer
or until their respective successors are duly elected and qualified, as the
case may be.
2.8 Merger Without Meeting of Stockholders. As soon as practicable after
the Purchaser has acquired, pursuant to the Offer or otherwise, at least 90% of
the then issued and outstanding Company Common Stock, the Purchaser shall take,
or cause to be taken, all necessary and appropriate action to cause the Merger
to become effective, without a meeting of stockholders of the Company, in
accordance with Section 253 of the DGCL.
2.9 Information Statement/Stockholders' Meeting.
(a) If after the consummation of the Offer and after the Subsequent
Offering Period, if any, the Merger cannot be consummated under Section 253
of the DGCL pursuant to Section 2.8, the Company, acting through its Board
of Directors, shall, in accordance with applicable law: (i) obtain the
approval of the Merger by the Company's stockholders by written consent in
lieu of a meeting pursuant to Section 228 of the DGCL; and (ii) promptly
prepare in accordance with the rules and regulations of the SEC and file
with the SEC an information statement relating to the Merger and this
Agreement and obtain and furnish the information required to be included by
the SEC in an information statement (the "Information Statement") and, after
consultation with the Parent, respond promptly to any comments made by the
SEC with respect to the Information Statement and cause the Information
Statement to be mailed to its stockholders.
(b) At the election of the Company, the Company Stockholder Approval may
be obtained by duly calling, giving notice of, convening and holding a
special meeting of its stockholders in accordance with Section 251(c) of the
DGCL, in which case the Company shall promptly prepare and file with the SEC
a proxy statement (a "Proxy Statement") otherwise in accordance with the
foregoing provisions relating to the Information Statement and include in
the Proxy Statement the recommendation of the board of directors of the
Company that stockholders of the Company vote in favor of the approval of
the Merger and the adoption of this Agreement which the Company shall mail
to its stockholders.
(c) Each of Parent and the Purchaser agrees that it will execute a
written consent or vote, or cause to be voted, all of the Company Common
Stock acquired by it pursuant to the Offer and otherwise then owned by it
and its Subsidiaries in favor of the approval of the Merger and the adoption
of this Agreement. In addition, each of Parent and the Purchaser agrees that
from (and including) the Purchase Date through the Effective Time, it will
not sell, transfer, assign, pledge, exchange or otherwise dispose of any
Company Common Stock (including those purchased in the Offer) or rights
therein (whether acquired pursuant to the Offer or otherwise).
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(d) No amendment or supplement to the Information Statement (or Proxy
Statement, as the case may be) will be made by the Company without providing
the Parent with the opportunity to review and comment thereon. The Company
will advise Parent, promptly after it receives notice thereof, of any
supplement or amendment has been filed, or any request by the SEC for
amendment of the Information Statement (or Proxy Statement, as the case may
be) or comments of the SEC thereon and responses thereto or requests by the
SEC for additional information. If at any time prior to the Effective Time
the Company or Parent discovers any information relating to either party, or
any of their respective affiliates, officers or directors, that should be
set forth in an amendment or supplement to the Information Statement (or
Proxy Statement, as the case may be), so that such document would not
include any misstatement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, the party that discovers such
information shall promptly notify the other parties hereto and the parties
shall jointly prepare an appropriate amendment or supplement describing such
information which shall be promptly filed with the SEC and, to the extent
required by law or regulation, disseminated to the stockholders of the
Company.
2.10 Effect on Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of Parent, the Purchaser, the Company
or the holder of any shares of Company Common Stock or any shares of capital
stock of the Purchaser:
(a) Capital Stock of the Purchaser. Each share of capital stock of the
Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and become one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each share
of Company Common Stock that is owned by the Company and each share of
Company Common Stock that is owned by Parent or the Purchaser shall
automatically be canceled and retired and shall cease to exist, and no
Merger Consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock. At the Effective Time each
issued and outstanding share of Company Common Stock (other than shares to
be canceled in accordance with Section 2.10(b) and any Dissenting Shares (as
defined in Section 2.11(h)) shall be converted into the right to receive the
Price Per Share in cash, without interest (the "Merger Consideration"). As
of the Effective Time, all such shares of Company Common Stock shall no
longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and each holder of a certificate representing any such
shares of Company Common Stock shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration upon surrender
of such certificate in accordance with Section 2.11 or the right to
appraisal under the DGCL (as described in Section 2.11(h)).
2.11 Surrender and Payment.
(a) Exchange Agent. Prior to the Effective Time, Parent shall designate
a bank or trust company reasonably acceptable to the Company to act as agent
for the holders of shares of Company Common Stock in connection with the
Merger (the "Exchange Agent") to
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receive the Merger Consideration to which holders of shares of Company
Common Stock shall become entitled pursuant to Section 2.10. Prior to the
filing of the Certificate of Merger with the Secretary of State of the State
of Delaware, Parent or the Purchaser shall deposit with the Exchange Agent
cash in an aggregate amount equal to the product of (i) the number of shares
of Company Common Stock outstanding (and not to be canceled pursuant to
Section 2.10(b)) immediately prior to the Effective Time, multiplied by (ii)
the Merger Consideration. The deposit made by Parent or the Purchaser
pursuant to the preceding sentence is hereinafter referred to as the
"Payment Fund". The Exchange Agent shall cause the Payment Fund to be (i)
held for the benefit of the holders of Company Common Stock and (ii)
promptly applied to making the payments provided for in Section 2.10(c). The
Payment Fund shall not be used for any purpose that is not provided for
herein.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent shall cause the Exchange Agent to mail to each holder
of record of a certificate or certificates (the "Certificates") which
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock, other than shares to be canceled or retired in
accordance with Section 2.10(b), (i) a Letter of Transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration. Upon surrender of
a Certificate for cancellation to the Exchange Agent, together with such
Letter of Transmittal, duly executed, and such other documents as may
reasonably be required by the Exchange Agent, Parent shall cause the
Exchange Agent to pay the holder of such Certificate the Merger
Consideration in respect of such Certificate, less any required withholding
taxes, and the Certificate so surrendered shall forthwith be canceled. If
any portion of the Merger Consideration is to be paid to a Person other than
the registered holder of the shares represented by the Certificate or
Certificates surrendered in exchange therefor, it shall be a condition to
such payment that the Certificate or Certificates so surrendered shall be
properly endorsed or otherwise be in proper form for transfer and that the
Person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than
the registered holder of such shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable. Until
surrendered as contemplated by this Section 2.11, each Certificate (other
than Certificates representing Dissenting Shares or shares of Company Common
Stock to be canceled pursuant to Section 2.10(b)) shall be deemed at any
time after the Effective Time to represent only the right to receive the
Merger Consideration upon such surrender.
(c) No Further Ownership Rights in Company Common Stock. All Merger
Consideration paid upon the surrender for exchange of Certificates in
accordance with the terms of this Article II shall be deemed to have been
paid in full satisfaction of all rights pertaining to the shares of Company
Common Stock theretofore represented by such Certificates. At the Effective
Time, the stock transfer books of the Company shall be closed and thereafter
there shall be no further registration of transfers on the stock transfer
books of the Company, nor on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Exchange
Agent for any reason,
10
they shall be canceled and exchanged as provided in this Article II, except
as otherwise provided by law.
(d) Unclaimed Funds. Any portion of the Payment Fund made available to
the Exchange Agent pursuant to Section 2.11(a) that remains unclaimed by
holders of the Certificates for six months after the Effective Time shall be
delivered to the Surviving Corporation, upon demand, and any holders of
Certificates who have not theretofore complied with this Article II shall
thereafter look only to Parent and the Surviving Corporation as unsecured
creditors for payment of their claim for Merger Consideration.
(e) No Liability. None of Parent, the Purchaser, the Company or the
Exchange Agent shall be liable to any Person in respect of any Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificate has not been
surrendered prior to five years after the Effective Time (or immediately
prior to such earlier date on which Merger Consideration in respect of such
Certificate would otherwise escheat to or become the property of any public
official), any such shares, cash, dividends or distributions in respect of
such Certificate shall, to the extent permitted by applicable law, become
the property of the Surviving Corporation, free and clear of all claims or
interest of any person previously entitled thereto.
(f) Investment of Funds. The Payment Fund shall be invested by the
Exchange Agent in obligations of, or guaranteed by, the United States of
America, in commercial paper obligations rated A-1 or P-l or better by
Xxxxx'x Investor Services or Standard & Poor's Corporation, respectively, in
each case with maturities not exceeding seven days. All earnings thereon
shall inure to the benefit of Parent or the Purchaser and shall be treated
for federal income tax purposes as income of Parent or the Purchaser.
(g) Lost Certificates. In the event that any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact
by the Person claiming such Certificate to be lost, stolen or destroyed and,
if required by Parent, the granting of an indemnity reasonably satisfactory
to Parent against any claim that may be made against it, the Surviving
Corporation or the Exchange Agent, with respect to such Certificate, the
Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration with respect to such Certificate, to
which such Person is entitled pursuant hereto.
(h) Dissenting Shares. Notwithstanding anything in this Agreement to
the contrary, shares of Company Common Stock, outstanding immediately prior
to the Effective Time and held by a holder who has not voted in favor of the
Merger or consented thereto in writing and who has demanded appraisal for
such shares in accordance with Section 262 of the DGCL (the "Dissenting
Shares"), shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or otherwise
loses its right to appraisal. If after the Effective Time such holder fails
to perfect or withdraws or loses its right to appraisal, such shares shall
be treated as if they had been converted as of the Effective Time into a
right to receive the Merger Consideration, without interest thereon, upon
surrender of the Certificate(s) representing such Company Common Stock. The
Company shall give Parent prompt notice of any demands received by the
Company for appraisal of shares of Company Common Stock, and Parent shall
have the right to participate in all negotiations and proceedings
11
with respect to such demands. The Company shall not, except with the prior
written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands.
(i) Withholding Rights. Each of the Surviving Corporation, the Exchange
Agent and the Parent shall be entitled to deduct and withhold from the
Merger Consideration otherwise payable hereunder to any person 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 deducted and withheld, such deducted and
withheld amounts shall be treated for all purposes of this Agreement as
having been paid to such holders in respect of which such deduction and
withholding was made.
(j) Company Option Plans. (i) As soon as possible following the date of
this Agreement, the Board of Directors of the Company and any committee
administering the Company Option Plans shall adopt such resolutions and/or
take such other actions as may be necessary or appropriate to effect the
provisions of this subsection (j) and to cause the transactions contemplated
by this subsection (j) to be exempt from the provisions of Section 16(b) of
the Exchange Act.
(ii) Parent and the Company hereby acknowledge and agree that, upon
the consummation of the Offer, all conditions and restrictions with
respect to the Company Options then outstanding, including limitations
on exercisability and vesting, risks of forfeiture and conditions and
restrictions requiring continued performance of services or the meeting
of any targets or milestones with respect to the exercisability or
vesting of any such the Company Options, shall immediately lapse.
(iii) Each Company Option outstanding immediately prior to the
consummation of the Offer (whether or not vested or exercisable) shall
upon consummation of the Offer be deemed to constitute an option to
acquire, on the same terms and conditions (without regard to whether the
options were vested or exercisable) as were applicable under such
Company Option immediately prior to the consummation of the Offer, the
Merger Consideration. In addition, as contemplated by each of the
Company Option Plans, the committee which administers the Company Option
Plans shall make the provision for a cash payment to each holder of a
Company Option unexercised and outstanding at the consummation of the
Offer in accordance with this subsection (iii). Each Company Option
unexercised and outstanding upon consummation of the Offer shall be
cancelled upon the day the Offer is consummated and will no longer be
valid and enforceable in exchange for a cash payment to the holder of
the Company Option in an amount equal to the excess of (x) the Merger
Consideration multiplied by the number of shares of Company Common Stock
purchasable pursuant to such Company Option immediately prior to the
consummation of the Offer over (y) the aggregate exercise price for the
Company Common Stock purchasable pursuant to such Company Option
immediately prior to the consummation of the Offer (in each case
assuming such Company Option had been fully vested and fully exercisable
as of the consummation of the Offer as contemplated by the immediately
preceding subsection), less any amounts as are required to be deducted
and withheld under the Code or any provision of state or local tax law
in connection with such payment (the "Option Spread Payment"). The
Company shall make the Option Spread Payment at or promptly following
the Closing by check or wire transfer of immediately available funds as
directed by the holder of the Company Option.
12
(iv) Upon consummation of the Offer, the Company Option Plans shall
terminate and all rights under any provision of any other plan, program
or arrangement providing for the issuance or grant of any other interest
in respect of the capital stock of the Company or any of its
Subsidiaries shall be canceled and will be null and void. Upon and after
the consummation of the Offer, no person shall have any right under the
Company Options, the Company Option Plans or any other plan, program or
arrangement with respect to equity securities of the Surviving
Corporation or any Subsidiary thereof, except the right to receive the
amount payable under subsection (j)(iii) above.
(v) Each Company Common Stock granted to any employee or director of
the Company or any of its Subsidiaries as compensation for services that
is subject to restrictions on ownership or transferability shall vest in
full and become fully transferable and free of restrictions not later
than immediately prior to the consummation of the Offer.
(k) Warrants. Each warrant to purchase the Company Common Stock (a
"Company Warrant") outstanding immediately prior to the Effective Time shall
at the Effective Time or at an earlier time, if previously agreed to by the
Purchaser, be deemed to constitute a warrant to acquire, on the same terms
and conditions as were applicable under such Company Warrant immediately
prior to the Effective Time, the Merger Consideration. In addition, the
Company shall make the provision for a cash payment to each holder of a
Company Warrant unexercised and outstanding at the Effective Time in
accordance with this Section 2.11(k). Each Company Warrant unexercised and
outstanding at the Effective Time shall be cancelled upon the Effective Date
and will no longer be valid and enforceable in exchange for a cash payment
to the holder of the Company Warrant in an amount equal to the excess of (i)
the Merger Consideration multiplied by the number of shares of Company
Common Stock purchasable pursuant to such Company Warrant immediately prior
to the Effective Time over (ii) the aggregate exercise price for the Company
Common Stock purchasable pursuant to such Company Warrant immediately prior
to the Effective Time (in each case assuming such Company Warrant had been
fully vested and fully exercisable as of the Effective Time), less any
amounts as are required to be deducted and withheld under the Code or any
provision of state or local tax law in connection with such payment (the
"Warrant Spread Payment"). The Company shall make the Warrant Spread Payment
at or promptly following the Effective Time by check or wire transfer of
immediately available funds as directed by the holder of the Company
Warrant. Prior to consummation of the Offer, the Company shall use its best
efforts to obtain from each holder of a Company Warrant a letter of
transmittal representing such holder's agreement that (x) such holder will
accept the applicable Warrant Spread Payment (less any amounts as required
to be deducted and withheld under the Code or any provision of state or
local tax law in connection with such payment) as full payment for each
Company Warrant held by such holder and (y) upon such payment all such
Company Warrants shall be cancelled and will no longer be valid or
enforceable. As of the Effective Time, no person shall have any right under
any Company Warrants with respect to any equity securities of the Surviving
Corporation or any Subsidiary thereof, except the right to receive the
amount payable under this Section 2.11(k).
13
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as in any report,
schedule, form, registration statement, proxy statement or other document filed
with the SEC and publicly available prior to the date hereof or specifically
set forth in the Company Disclosure Schedule delivered by the Company to Parent
dated as of the date hereof (the "Company Disclosure Schedule"), the Company
represents and warrants to Parent and the Purchaser as follows:
(a) Organization, Standing and Power. Each of the Company and its
Subsidiaries has been duly organized and is validly existing and in good
standing under the laws of its jurisdiction of incorporation. Each of the
Company and its Subsidiaries is duly qualified and in good standing or
otherwise authorized or licensed to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties makes such qualification necessary, except for any such failure
to be so qualified or licensed or in good standing is not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on the
Company. The copies of the Organizational Documents of the Company and of
each of its Subsidiaries which were previously furnished or made available
to Parent are, in each case, true, complete and correct copies of such
documents as in effect on the date of this Agreement. Each of the Company
and its Subsidiaries has the requisite corporate power and corporate
authority in all material respects to own, lease and operate its properties
and to carry on its respective businesses as they are now being conducted.
Neither the Company nor any of its Subsidiaries is in violation of any
provisions of its Organizational Documents in any material respect. The list
of subsidiaries of the Company set forth in Section 3.1(a) of the Company
Disclosure Schedule is a true and accurate list of all the Subsidiaries of
the Company. Except for its interests in its Subsidiaries, the Company does
not own, directly or indirectly, any capital stock, membership interest,
partnership interest, joint venture interest or other equity interest in any
Person.
(b) Capital Structure.
(i) As of the date of this Agreement, the authorized capital stock
of the Company consists of 50,000,000 shares of Company Common Stock, of
which not more than 5,138,660 shares are issued and outstanding and
5,000,000 shares of Preferred Stock, none of which are issued and
outstanding. All issued and outstanding shares of the capital stock of
the Company are duly authorized, validly issued, fully paid and
nonassessable, and no class of capital stock is entitled to preemptive
rights. As of the date of this Agreement, there are no outstanding
options, warrants or other rights to acquire capital stock from the
Company other than options representing in the aggregate the right to
purchase not more than 563,385 shares of Company Common Stock under the
Company 1998 Stock Option Plan or as disclosed in Section 3.1(b) of the
Company Disclosure Schedule which Schedule sets forth the name of the
holder of, such option, warrant or other right to purchase capital
stock, the number of Shares that may be purchased by such holder
pursuant to such option, warrant, and other right to purchase capital
stock and the price per Share at which such Shares may be purchased.
14
(ii) All of the issued and outstanding shares of capital stock of
the Company's Subsidiaries are duly authorized, validly issued, fully
paid and nonassessable and are owned by the Company, free and clear of
any liens, pledges, security interests, claims, encumbrances,
restrictions (including any restriction on the right to vote or sell
such shares, except as may be imposed as a matter of law), preemptive
rights or any other claims of any third party ("Liens").
(iii) As of the date of this Agreement, no bonds, debentures, notes
or other indebtedness of the Company having the right to vote on any
matters on which stockholders may vote ("Company Voting Debt") are
issued or outstanding.
(iv) Except as otherwise set forth in this Section 3.1(b), as of the
date of this Agreement, there are no securities, options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings of
any kind to which the Company or its Subsidiaries is a party or by which
any of them is bound obligating (and no contract, agreement,
understanding, arrangement or obligation, whether or not contingent,
providing for) the Company or any of its Subsidiaries to issue, deliver
or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other voting securities of the Company or such
Subsidiary or obligating the Company or such Subsidiary to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. As of the date of
this Agreement, there are no outstanding obligations, arrangements,
agreements or commitments of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of
the Company or such Subsidiary.
(c) Authority; No Conflicts.
(i) The Company has all requisite corporate power and corporate
authority to enter into this Agreement and, if required, subject to the
adoption of this Agreement by the requisite vote of the holders of
Company Common Stock, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of the
Company, if required, subject in the case of the consummation of the
Merger to the adoption of this Agreement by the requisite vote of the
holders of Company Common Stock, and no other corporate proceedings are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered
by the Company and, assuming the due execution and delivery by Parent
and the Purchaser, constitutes a valid and binding agreement of the
Company, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally and by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or
at law). The Board of Directors of the Company has, at a meeting duly
called and held, (A) approved this Agreement, the Offer and the Merger
and the transactions contemplated hereby, (B) declared that the Offer,
this Agreement and the Merger are advisable, fair to and in the best
interests of the Company and its stockholders, and (C) made the Company
Tender Recommendation. Such actions are sufficient to render
inapplicable to this Agreement, the Offer and the Merger and the other
transactions contemplated hereby the restrictions on business
combinations set forth in Section 203 of the DGCL. No other state
15
takeover statute or similar statute or regulation applies or purports to
apply to the Company with respect to this Agreement, the Offer, the
Merger or any other transaction contemplated hereby.
(ii) Except as disclosed in Section 3.1(c) of the Company Disclosure
Schedule, the execution, delivery and performance of this Agreement do
not or will not, as the case may be, and the consummation of the
transactions contemplated hereby will not, conflict with, or result in
any violation of, or constitute a default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation, or the creation of a
Lien on any assets (any such conflict, violation, default, right of
termination, cancellation or acceleration, or creation, a "Violation"),
pursuant to: (A) any provision of the Organizational Documents of the
Company or any of its Subsidiaries or (B) except as is not reasonably
likely to have, individually or in the aggregate, a Material Adverse
Effect on the Company or prevent the consummation of the transactions
contemplated hereby and, subject to obtaining or making the consents,
approvals, orders, authorizations, registrations, declarations and
filings referred to in paragraph (iii) below, the terms, provisions or
conditions of any loan or credit agreement, note, mortgage, bond,
indenture, lease, compensation or benefit plan (or any grant or award
made pursuant thereto) or other agreement, obligation, instrument,
contract, permit, concession, franchise, license, judgment, order, writ,
injunction, award, decree, statute, law, ordinance, rule or regulation
applicable to the Company, the Company's Subsidiaries or any of their
respective properties or assets.
(iii) No consent, registration, permit, approval, order or
authorization of, or registration, declaration, notice, report, or other
filing with, any supranational, national, state, municipal or local
government, any instrumentality, subdivision, court, administrative
agency or commission or other authority thereof, or any
quasi-governmental or private body exercising any regulatory, taxing,
importing or other governmental or quasi-governmental authority (a
"Governmental Entity"), is required by or with respect to the Company or
any of its Subsidiaries in connection with the execution and delivery of
this Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, except for (x) those required under or
in relation to (A) the Exchange Act or the Securities Act of 1933, as
amended (the "Securities Act"), (B) the DGCL with respect to the filing
of the Certificate of Merger, (C) rules and regulations of the Nasdaq
National Market ("NNM"), (D) antitrust or other competition laws of any
applicable jurisdictions, including, without limitation, the
requirements of the HSR Act, and (E) such as may be required under any
applicable state securities or blue sky laws and (y) such consents,
approvals, orders, authorizations, registrations, declarations and
filings the failure of which to make or obtain is not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
the Company or prevent the consummation of the transactions contemplated
hereby.
(iv) The Board of Directors of the Company, or an appropriate
committee thereof, has taken (or will take prior to the Merger) all
action necessary so that the exemption from Section 16 under the
Exchange Act which is contemplated by Section 16b-3(e) is applicable to
the disposition of the Company Common Stock and Company Options in or in
connection with the Merger as contemplated by this Agreement by all
persons who are directors and/or officers of the Company.
16
(d) Reports and Financial Statements.
(i) Since January 1, 2000, the Company has timely filed all required
reports, schedules, forms, statements and other documents required to be
filed by it with the SEC (collectively, including all exhibits thereto,
the "Company SEC Reports"). The Company SEC Reports, as of their
respective dates (and, if amended or superseded by a filing prior to the
date of this Agreement or the Closing Date, then on the date of such
filing), did not, and any Company SEC Reports filed with the SEC
subsequent to the date hereof and prior to the purchase of shares
pursuant to the Offer will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated (or
incorporated by reference) therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Each of the financial statements (including the related
notes) included or to be included in, or incorporated by reference into,
the Company SEC Reports presents or will present fairly, in all material
respects, the consolidated financial position and consolidated results
of operations and cash flows of the Company and its Subsidiaries as of
the respective dates or for the respective periods set forth therein,
and were all prepared in accordance with U.S. generally accepted
accounting principles ("GAAP") consistently applied during the periods
involved except as otherwise noted therein, and subject, in the case of
the unaudited interim financial statements, to normal and recurring
year-end audit adjustments. All of such Company SEC Reports, as of their
respective dates (and as of the date of any amendment to the respective
Company SEC Report filed prior to the date hereof), complied as to form
in all material respects with the applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations
promulgated thereunder (as in effect on the dates on which such SEC
Reports were filed).
(ii) Except as set forth in Section 3.1(d)(ii) of the Company
Disclosure Schedule or in the Company SEC Reports filed and publicly
available prior to the date of this Agreement, and except for
liabilities and obligations incurred in the ordinary course of business
and consistent with past practice since March 31, 2002 (none of which
has had or is reasonably like to have, individually or in the aggregate,
a Material Adverse Effect on the Company), the Company does not have any
liabilities or obligations of any nature whether known or unknown,
asserted or unasserted, accrued or unaccrued, contingent or absolute,
liquidated or unliquidated, due or to become due, determined,
determinable or otherwise, required by GAAP to be set forth on a
consolidated balance sheet of the Company which have had or are
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
(iii) The Company has delivered to Parent a complete and correct
copy of any material amendments or modifications, which have not yet
been filed with the SEC, to all agreements, documents or other
instruments which previously had been filed by the Company with the SEC
pursuant to the Exchange Act.
(e) Information Supplied.
(i) None of the information supplied or to be supplied by the
Company for inclusion or incorporation by reference in (A) the
Information Statement advising stockholders of the Company that the
requisite number of stockholders have consented to the Merger, if
applicable, (B) the Proxy Statement relating to the Company Stockholders
Meeting, if
17
applicable, (C) the Schedule 14D-9, (D) the Offer Documents and (E) any
other document filed or to be filed with the SEC or any other
Governmental Entity (including with reference to necessary filing under
the HSR Act) in connection with the Offer will, at the respective times
such documents or any amendments or supplements thereto are filed, and,
with respect to the Offer Documents, the Information Statement, if any,
and the Proxy Statement, if any, when first published, sent or given to
the stockholders of the Company and at the Effective Time, contain an
untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not false or misleading, or necessary to correct any statement in
any earlier communication with respect to the Offer or the solicitation
of proxies for the Company Stockholders Meeting, if any, which shall
have become false or misleading. The Proxy Statement, if any, the
Information Statement, if any, and Schedule 14D-9 will comply as to form
with the requirements of the Exchange Act and the Securities Act and the
rules and regulations promulgated thereunder.
(ii) Notwithstanding the foregoing provisions of this Section
3.1(e), no representation or warranty is made by the Company with
respect to statements made or incorporated by reference in the
Information Statement, if any, the Proxy Statement, if any, or the Offer
Documents based on information supplied by Parent or the Purchaser for
inclusion or incorporation by reference therein.
(f) Compliance with Applicable Laws; Regulatory Matters. The Company
and each of its Subsidiaries holds all permits, licenses, certificates,
franchises, registrations, variances, exemptions, orders and approvals of
all Governmental Entities other than those the failure to so hold
individually or in the aggregate is not reasonably likely to have a Material
Adverse Effect on the Company (the "Company Permits"). The Company and each
of its Subsidiaries have performed its respective obligations under and are
in compliance with the terms of the Company Permits, except where the
failure to so comply or perform, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect on the Company. No event
has occurred or condition or state of facts exists which constitutes or,
after notice or lapse of time or both, would constitute a breach or default
under the Company Permits or, after notice or lapse of time or both, would
permit revocation or termination of the Company Permits, except where such
event, condition or state of state of facts, individually or in the
aggregate, is not reasonably likely to have a Material Adverse Effect on the
Company. The businesses of the Company and its Subsidiaries are not being
and have not been conducted in violation of any law, ordinance, regulation,
judgment, decree, injunction, rule or order of any Governmental Entity,
except for violations which are not reasonably likely to have a Material
Adverse Effect on the Company. As of the date of this Agreement, no lawsuit,
claim, suit, proceeding or investigation by any Governmental Entity with
respect to the Company or any of its Subsidiaries is pending or, to the best
knowledge of the Company, threatened, other than lawsuits, claims, suits,
proceedings or investigations which, individually or in the aggregate, are
not reasonably likely to have a Material Adverse Effect on the Company. This
provision shall not apply to environmental matters, which are the subject of
Section 3.1(q).
(g) Litigation. Except as disclosed in Section 3.1(g) of the Company
Disclosure Schedule, as of the date of this Agreement there is no
litigation, arbitration, claim, suit, action, investigation or proceeding
pending or, to the knowledge of the Company,
18
threatened against or affecting the Company or any of its Subsidiaries or
any of their respective properties or assets, which is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on the
Company or would prevent the consummation of the transactions contemplated
by this Agreement, nor is there any judgment, award, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding against
the Company or any of its Subsidiaries which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the Company.
This provision shall not apply to environmental matters, which are the
subject of Section 3.1(q). Further, there is no litigation, arbitration,
claim, suit, action, investigation or proceeding pending which has been made
the Company or any of its Subsidiaries, which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the Company
or would prevent the consummation of the transactions contemplated by this
Agreement.
(h) Taxes. (i) The Company and its Subsidiaries have duly and timely
filed (taking into account any valid extensions of time within which to make
such filings) all Tax Returns required to be filed by or on behalf of any of
them, and all such filed Tax Returns are complete and accurate in all
material respects; (ii) the Company and its Subsidiaries have paid all Taxes
due and payable by or on behalf of them (whether or not shown on any Tax
Return), and adequate reserves or accruals for Taxes have been provided for
in accordance with GAAP with respect to any period for which Tax Returns
have not yet been filed or for which Taxes are not yet due and owing; (iii)
except as set forth in Section 3.1(h) of the Company Disclosure Schedule, as
of the date of this Agreement, there are no pending or, to the knowledge of
the Company, threatened in writing audits, examinations, investigations or
other administrative or court proceedings or claims for deficiencies in
respect of Taxes or Tax matters relating to the Company or any of its
Subsidiaries, all material deficiencies asserted or assessments made as a
result of any examinations by the IRS or any other taxing authority of the
Tax Returns of or covering or including the Company or any of its
Subsidiaries have been fully paid, and no claim has been made in writing by
any authority in a jurisdiction where the Company and its Subsidiaries do
not file Tax Returns that the Company or any such Subsidiary is, or may be,
subject to Taxation in that jurisdiction; (iv) there are no Liens for Taxes
upon the assets of the Company or any of its Subsidiaries, other than Liens
for current Taxes not yet due and payable or Liens for Taxes that are being
contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with U.S. GAAP; (v) the Company
at any time during the five-year period ending on the date of this Agreement
is not, and was not, a "United States real property holding corporation"
within the meaning of Section 897(c) of the Code; (vi) neither the Company
nor any of its Subsidiaries has made an election under Section 341(f) of the
Code; (vii) other than the consolidated group of which the Company is now
the common parent, neither the Company nor any of its Subsidiaries has ever
been (A) a member of an affiliated group filing a consolidated federal
income Tax Return or (B) responsible for any liability for the Taxes of any
Person as a transferee or successor, by contract, by operation of law, or
otherwise; (viii) the Company and each of its Subsidiaries has (A) complied
in all material respects with all applicable laws, rules and regulations
relating to the payment and withholding of Taxes and withheld and paid all
Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, creditor, stockholder, or other third party
and (B) collected any and all amounts required from customers or other third
parties in the form of sales, use, or similar Taxes and paid, when due, such
Taxes to the appropriate governmental authority; (ix) as of the date hereof
neither the Company nor any of its
19
Subsidiaries has executed or filed with the IRS or any other taxing
authority any agreement, waiver or other document or arrangement extending
or having the effect of extending the period for assessment or collection of
Taxes (including, but not limited to, any applicable statute of limitation),
and no power of attorney with respect to any Tax matter is currently in
force; (x) Parent has had access to complete copies of (A) all federal and
other material Tax Returns of the Company and its Subsidiaries relating to
the taxable periods ending since December 31, 1999 which have been filed and
(B) any audit report issued within the last five years relating to any
material Taxes due from or with respect to the Company or any of its
Subsidiaries; (xi) neither the Company nor any other person on behalf of the
Company or any of its Subsidiaries has requested any extension of time
within which to file any material income Tax Return, which material income
Tax Return has since not been filed; (xii) neither the Company nor any of
its Subsidiaries is a party to any tax sharing or similar agreement or
arrangement (with any person other than the Company and/or any of its
Subsidiaries) pursuant to which it will have any obligation to make any
payments after the Closing; (xiii) neither the Company nor any of its
Subsidiaries is subject to any private letter ruling of the IRS or
comparable rulings of other taxing authorities; and (xiv) neither the
Company nor any of the Subsidiaries has been required to include in income
any adjustment pursuant to Section 481 of the Code by reason of a voluntary
change in accounting method initiated by the Company or any of the
Subsidiaries, and the IRS has not initiated or proposed in writing any such
adjustment or change in accounting method.
(i) Absence of Certain Changes or Events. Since March 31, 2002, except
as disclosed in Section 3.1(i) of the Company Disclosure Schedule, (A) each
of the Company and the Company's Subsidiaries has conducted its business in
the ordinary course; (B) there has not been any change in the business,
financial condition or results of operations of the Company or its
Subsidiaries that has had, or is likely to have, a Material Adverse Effect
on the Company; (C) there has not been any entry by the Company or its
Subsidiaries into any material employment agreement, severance agreement or
termination agreement with any employee or officer of the Company; (D) there
has not been any declaration, setting aside or payment of any dividend or
other distribution with respect to the capital stock of the Company nor has
there been any repurchase, redemption or other acquisition by the Company or
any of its Subsidiaries of any outstanding shares of capital stock or other
securities of, or other ownership interests in, the Company or such
Subsidiary; (E) there has not been any material change by the Company in
accounting principles, practices or methods; (F) there has not been any
material increase in the compensation payable or which could become payable
by the Company and its Subsidiaries to their officers or key employees, or
any amendment of any compensation and benefit plans resulting in a material
increase in payments thereunder; (G) there has not been any amendment of any
material term of any outstanding security of the Company or any of its
Subsidiaries; and (H) there has not been any entry by the Company or its
Subsidiaries into any material joint venture or other working arrangement
with any Person; and (I) there has not been any issuance or agreement to
issue shares of Company Common Stock, other than under the Company Option
Plans.
(j) Vote Required. The affirmative vote of the holders of a majority of
the outstanding shares of Company Common Stock (the "Company Stockholder
Approval") is the only vote of the holders of any class or series of the
Company capital stock necessary to approve this Agreement and the
transactions contemplated hereby and is only necessary in the event that
20
the number of shares of the Company Common Stock tendered pursuant to the
Offer represents less than 90% of the issued and outstanding shares of the
Company Common Stock.
(k) Certain Agreements. All "material contracts" (as such term is
defined in Item 601(b)(10) of Regulation S-K promulgated by the SEC) to
which the Company and its Subsidiaries is a party or their properties are
bound (the "Company Material Contracts") (i) have been filed, in their true
and correct form with all material amendments thereto, with the SEC in the
Company SEC Reports (except as disclosed in Section 3.1(k) of the Company
Disclosure Schedule) and (ii) all such Company Material Contracts are valid
and in full force and effect, except to the extent they have previously
expired in accordance with their terms and other than to the extent as is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on the Company. Neither the Company nor its Subsidiaries has
violated any provision of, or committed or failed to perform any act which,
with or without notice, lapse of time, or both, is reasonably likely to
constitute a default under the provisions of, any such Company Material
Contract, and neither the Company nor any of its Subsidiaries has received
notice that any party to any Company Material Contract intends to cancel,
terminate or otherwise modify the terms of any applicable Company Material
Contract, except in either case, for defaults which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on the Company. To the knowledge of the Company, no counterparty to any such
Company Material Contract has violated any provision of, or committed or
failed to perform any act which, with or without notice, lapse of time, or
both, is reasonably likely to constitute a default or other breach under the
provisions of, such Company Material Contract, except for defaults or
breaches which are not reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect on the Company. Except as disclosed in
Section 3.1(k) of the Company Disclosure Schedule or as required by
applicable law, neither the Company nor its Subsidiaries has any plans or
material agreement to which any of them is a party, or by which they or
their respective assets and properties are bound, pursuant to which any
material payment, including with respect to acceleration of benefits, will
be required upon or as a result of a "change of control" of the Company. The
Company has delivered or disclosed all Company Material Contracts to
Purchaser.
(l) Employee Benefit Plans.
(i) Section 3.1(l) of the Company Disclosure Schedule contains an
accurate and complete list of (i) each "employee benefit plan" (as such
term is defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), (ii) each employment,
severance, change in control, termination, or similar contract, plan,
arrangement or policy, and (iii) each other material employee benefit
plan, program or arrangement providing for compensation, bonuses,
profit-sharing, stock option or other stock related rights or other
forms of incentive or deferred compensation, health or medical benefits,
disability benefits, life insurance and any other paid time off
programs, workers' compensation, supplemental unemployment benefits and
post-employment or retirement benefits which is maintained, sponsored or
contributed to by the Company or any of its affiliates on behalf of any
employee or former employee of the Company or any of its Subsidiaries
located within the United States (each, a "Company Benefits Plan") and
the Company has delivered a copy of all such documents and plans to
Purchaser.
21
(ii) Each Company Employee Plan that is intended to be qualified
within the meaning of Section 401(a) of the Code has received a
determination from the United States Internal Revenue Service (the
"IRS") that such Company Employee Plan is qualified under Section 401(a)
of the Code.
(iii) Neither the Company nor any of its Subsidiaries maintains,
contributes to or has any liability under or with respect to any plan
subject to Title IV of ERISA, or any "multiemployer plan" (as defined in
Section 3(37) of ERISA). No asset of the Company or any of its
Subsidiaries is subject to any lien under ERISA or the Code. There are
no pending or, to the knowledge of the Company, threatened actions,
suits, investigations or claims with respect to any Company Benefit Plan
(other than routine claims for benefits) which could result in liability
to the Purchaser or the Parent, and to the knowledge of the Company
there are no facts which could give rise to (or be expected to give rise
to) any such actions, suits, investigations or claims, except, in each
case, for actions, suits, investigations or claims which are not
reasonably likely to result in a Material Adverse Effect on the Company.
(iv) (i) Each of the Company Benefit Plans has been maintained,
funded and administered, in both form and operation, in material
compliance with its terms and in material compliance with the applicable
provisions of ERISA, the Code and any other applicable laws, and (ii)
all filings required for the Company Benefit Plans and all contributions
to the Company Benefit Plans have been timely made. The Company and its
Subsidiaries have complied in all material respects with the health care
continuation requirements of Part 6 of 22 Subtitle B of Title I of ERISA
and Section 4980B of the Code ("COBRA"), and the Company and each of its
Subsidiaries have no obligations under any Company Employee Plan or
otherwise to provide health, medical, dental or disability benefits to
former employees of the Company or the Company Subsidiaries or any other
person, except as specifically required by COBRA.
(v) With respect to each Company Benefit Plan, the Company has made
available to the Parent and the Purchaser true, complete and correct
copies of, to the extent applicable: (i) the current plan documents and
summary plan descriptions, (ii) annual reports (Form 5500 series) filed
with the IRS (with applicable attachments) for the previous two years,
(iii) financial statements and the Company's actuarial valuation
statements for the previous two years and (iv) the most recent
determination letter received from the IRS.
(vi) None of the Company, any of its Subsidiaries, any affiliate of
the Company or any of its Subsidiaries, nor to the knowledge of the
Company, any plan fiduciary of any Company Benefit Plan, has engaged in
any transaction in violation of Section 406(a) or (b) of ERISA or any
"prohibited transaction" (as defined in Section 4975(c)(1) of the Code)
which would subject the Company, the Parent, the Purchaser or the
Surviving Corporation to any material taxes, penalties or other
liabilities resulting from such prohibited transaction and, to the
knowledge of the Company, no condition exists that would subject any of
the Company, the Parent, the Purchaser or the Surviving Corporation to
any material excise penalty tax or fine related to any Company Benefit
Plan.
(vii) Except as disclosed in Section 3.1(l)(vii) of the Company
Disclosure Schedule, the consummation of the transactions contemplated
by this Agreement will not, either alone or in combination with another
event, (i) entitle any current or former employee,
22
director or officer of the Company or any of its Subsidiaries to
severance pay, unemployment compensation or any other payment, (ii)
accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee, director or officer, or (iii)
require the immediate funding or financing of any compensation or
benefits.
(viii) Any Company Employee Plan that is intended to satisfy the
requirements of Section 501(c)(9) of the Code has so satisfied such
requirements.
(ix) Neither the Company nor any of its Subsidiaries has used the
services or workers provided by third party contract labor suppliers,
temporary employees, "leased employees" (within the meaning of Section
414(n) of the Code), or individuals who have provided services as
independent contractors in such a way that would (A) entitle such
individuals to participate in a Company Employee Plan or (B) reasonably
be expected to result in the disqualification of any of the Company
Employee Plans or the imposition of penalties or excise taxes with
respect to the Company Employee Plans by the IRS, the United States
Department of Labor, the Pension Benefit Guaranty Corporation or any
other Governmental Entity.
(x) All Company Benefit Plans maintained outside of the United
States have been and are in substantial compliance with applicable local
law except where such failure to comply is not reasonably likely to have
a Material Adverse Effect on the Company.
(m) Labor and Other Employment Matters. Except as disclosed in Section
3.1(m) of the Company Disclosure Schedule, each of the Company and its
Subsidiaries is in compliance in all material respects with all applicable
Laws respecting labor, employment, fair employment practices, terms and
conditions of employment, workers' compensation, occupational safety, plant
closings, and wages and hours. None of the Company or any of its
Subsidiaries is liable for any payment to any trust or other fund or to any
Governmental Entity, with respect to unemployment compensation benefits,
social security or other benefits or obligations for employees (other than
routine payments to be made in the ordinary course of business and
consistent with past practice). None of the Company or any of its
Subsidiaries is a party to any collective bargaining or other labor union
contract applicable to persons employed by the Company or any of its
Subsidiaries, and no collective bargaining agreement or other labor union
contract is being negotiated by the Company or any of its Subsidiaries.
There is no labor dispute, strike, slowdown or work stoppage against the
Company or any of its Subsidiaries pending or, to the knowledge of the
Company, threatened that would reasonably be expected to have a Material
Adverse Effect on the Company. No labor union or similar organization has
otherwise been certified to represent any persons employed by the Company or
any of its Subsidiaries or to the Company's knowledge has applied to
represent such employees or is attempting to organize so as to represent
such employees. Except as disclosed in Section 3.1(m) of the Company
Disclosure Schedule, there is no charge or complaint against the Company or
any of its Subsidiaries by the National Labor Relations Board or any
comparable state or foreign agency pending or, to the knowledge of the
Company, threatened, except where such charge or complaint would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. None of the Company or any of its
Subsidiaries is materially delinquent in payments to any of its employees
for any wages, salaries, commissions, bonuses or
23
other direct compensation for any services performed for it. Except as
disclosed in Section 3.1(m) of the Company Disclosure Schedule, to the
Company's knowledge, there are no controversies pending or threatened,
between the Company or any of its Subsidiaries and any of their current or
former employees, which controversies have or could reasonably be expected
to result in action, suit, proceeding, claim, arbitration or investigation
before any Governmental Entity, except for such controversies which are not
reasonably likely to have a Material Adverse Effect on the Company. To the
Company's knowledge, no employee of the Company or any of its Subsidiaries
is in violation of any term of any employment contract, non-disclosure
agreement, non-competition agreement or any restrictive covenant to a former
employer relating to the right of any such employee to be employed by the
Company or its Subsidiaries because of the nature of the business conducted
or presently proposed by the Company to be conducted by it or to the use of
trade secrets or proprietary information of others, except for such
violations which are not reasonably likely to have a Material Adverse Effect
of the Company. To the Company's knowledge, no executive officer or key
employee of the Company or any of its Subsidiaries has given notice that
such executive officer or key employee intends to terminate his or her
employment with the Company or such Subsidiary.
(n) Intellectual Property. Section 3.1(n) of the Company Disclosure
Schedule sets forth a complete and accurate list of all material
Intellectual Property Rights of the Company and its Subsidiaries.
"Intellectual Property Rights" means all United States and foreign
trademarks (registered and unregistered), service marks, trade names, brand
names, patents, copyrights and registrations in any jurisdiction of, and
applications in any jurisdiction to register the foregoing, technology,
know-how, software, tangible and intangible proprietary information or
materials, rights and processes that are used in the business and operations
of the Company and its Subsidiaries as currently conducted and any other
trade secrets related thereto. The Company and its Subsidiaries have rights
to use, whether through ownership, licensing or otherwise, all Intellectual
Property Rights material to its services, in each case free and clear of any
and all encumbrances, covenants, conditions and restrictions or other
adverse claims or interest of any kind or nature. All registrations and
pending applications for any material Intellectual Property Rights of the
Company or its Subsidiaries is in compliance with all legal requirements,
other than any requirement that, if not satisfied, would not result in a
cancellation of any such registration or otherwise affect the use, priority
or enforceability of such Intellectual Property Right in question. All
Intellectual Property Rights of the Company and its Subsidiaries are valid
and enforceable, except as such invalidity or unenforceability, individually
or in the aggregate, would not have a Material Adverse Effect on the
Company. Except as disclosed on the Company Disclosure Schedule, to the
Company's knowledge, there are no infringements by any other party of any of
the Intellectual Property Rights, nor to the knowledge of the Company, is
any third party misappropriating, infringing, diluting or violating any
Intellectual Property Rights owned or exclusively licensed to the Company,
and no claims for any of the foregoing have been brought against any third
party by the Company. Except as set forth in Section 3.1(n) of the Company
Disclosure Schedule, there are no claims, suits, actions or proceedings
pending or to the Company's knowledge, threatened against the Company or any
of its Subsidiaries alleging infringement of any intellectual property
rights of another person or challenging the ownership, use, validity or
enforceability of the Intellectual Property Rights, except for claims,
suits, actions or proceedings which would not have a Material Adverse Effect
on the Company. No Intellectual Property Rights that are owned by the
Company are subject to any outstanding order, judgment, decree, stipulation
or agreement restricting the use thereof by the Company.
24
(o) Brokers or Finders. No agent, broker, investment banker, financial
advisor or other firm or Person is or will be entitled to any broker's or
finder's fee or any other similar commission or fee in connection with any
of the transactions contemplated by this Agreement, except Xxxx Capital
Partners LLC and Xxxxxxx Xxxx, the arrangements with which have been
disclosed in writing to Parent prior to the date hereof.
(p) Opinion of Financial Advisor. The Company has received the written
opinion of Xxxx Capital Partners, LLC dated the date of this Agreement, to
the effect that, as of such date, the consideration to be paid in the Offer
and the Merger is fair, from a financial point of view, to the holders of
Company Common Stock, and has provided a copy of such opinion to Parent.
(q) Environmental Matters.
(i) Except as is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on the Company and its
Subsidiaries: (i) the Company and each Subsidiary has complied and is
currently in compliance with all Environmental Laws; and (ii) there are
no pending, or to the knowledge of the Company or any of its
Subsidiaries, threatened claims against the Company or any of its
Subsidiaries alleging a violation of Environmental Law.
(ii) The Company and each of its Subsidiaries have obtained or have
applied for all material environmental, health and safety permits and
governmental authorizations (collectively, the "Environmental Permits")
necessary for the construction of their facilities or the conduct of
their operations, and all such Environmental Permits are in good
standing or, where applicable, a renewal application has been timely
filed and is pending agency approval, and Company and each of its
Subsidiaries are in compliance in all material respects with all terms
and conditions of the Environmental Permits, and the Company believes
that any transfer, renewal or reapplication for any Environmental Permit
required as a result of the Merger can be accomplished in the ordinary
course of business.
(iii) There are no Environmental Claims pending (i) against the
Company or any of its Subsidiaries or joint ventures, or (ii) against
any real or personal property or operations the Company or any of its
Subsidiaries owns, leases or manages, in whole or in part.
(iv) To the Company's knowledge there have been no Releases (as
defined in Section 8.10 hereof) of any Hazardous Material that would be
reasonably likely to form the basis of any Environmental Claim against
the Company or any of its Subsidiaries
(v) The Company has no knowledge of any Environmental Claim pending
or threatened, or of any Release of Hazardous Materials that would be
reasonably likely to form the basis of any Environmental Claim, in each
case against any person or entity (including, without limitation, any
predecessor of the Company or any of its Subsidiaries) whose liability
the Company or any of its Subsidiaries has or may have retained or
assumed either contractually or by operation of law or against any real
or personal property which the Company or any of its Subsidiaries
formerly owned, leased or managed, in whole or in part.
25
(r) Properties.
(i) Except as disclosed in Section 3.1(r)(i) of the Company
Disclosure Schedule, the Company and the Company Subsidiaries have good
and marketable title to, or valid leasehold interests in, all of their
respective properties and assets (other than assets disposed of in the
ordinary course of business since March 31, 2002) except for defects in
title, easements, encroachments, restrictive covenants and similar
encumbrances or impediments that would not have a Material Adverse
Effect on the Company.
(ii) Except as otherwise identified in Section 3.1(r)(ii) of the
Company Disclosure Schedule, the material tangible assets of the Company
and the Company Subsidiaries, taken as a whole, including all mobile
equipment are, in the aggregate, in condition and repair, reasonable
wear and tear excepted, adequate in all material respects for the use to
which they are put in the Company's business, except to the extent that
the condition of any such assets are not in the aggregate reasonably
likely to have a Material Adverse Effect on the Company.
(s) Affiliate Transactions. Except as disclosed in the Company SEC
Filings filed prior to the date of this Agreement or in Section 3.1(s) of
the Company Disclosure Schedule, there are no material contracts,
commitments, agreements, arrangements or other transactions required to be
so disclosed between the Company or any of its Subsidiaries, on the one
hand, and any (i) executive officer or director of the Company or any of
their immediate family members, (ii) record or beneficial owner to the
extent known by the Company of ten percent or more of the voting securities
of the Company or (iii) affiliate (to the extent known by the Company) of
any such executive officer, director, family member or beneficial owner, on
the other hand.
(t) Insurance. The Company maintains insurance coverage with reputable
insurers, or maintains self-insurance practices, in such amounts and
covering such risks as are in accordance with normal industry practice for
companies engaged in businesses similar to that of the Company (taking into
account the cost and availability of such insurance).
3.2 Representations and Warranties of Parent. Except as specifically set
forth in the Parent Disclosure Schedule delivered by Parent to the Company
dated as of the date of this Agreement (the "Parent Disclosure Schedule"),
Parent represents and warrants to the Company as follows:
(a) Organization, Standing and Power. Parent has been duly organized
and is validly existing under the laws of its jurisdiction of organization.
Parent is duly qualified or otherwise authorized to do business in each
jurisdiction in which the nature of its business or the ownership or leasing
of its properties makes such qualification necessary, except where the
failure to so qualify or be so authorized is not reasonably likely to have a
Material Adverse Effect on Parent. Parent has the requisite corporate power
and corporate authority in all material respects to own, lease and operate
its properties and to carry on its businesses as they are now being
conducted. Parent is not in violation of any provisions of its
Organizational Documents in any material respect.
26
(b) Authority; No Conflicts.
(i) Parent has all requisite corporate power and corporate authority
to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part of
Parent and no other corporate proceedings are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Parent and,
assuming due execution by the Company, constitutes a valid and binding
agreement of Parent, enforceable against it in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating
to or affecting creditors generally, or by general equity principles
(regardless of whether such enforceability is considered in a proceeding
in equity or at law). The Board of Directors of Parent has at a meeting
duly called and held, unanimously approved this Agreement, the Offer,
the Merger and the other transactions contemplated by this Agreement.
(ii) The execution and delivery of this Agreement do not or will
not, as the case may be, and the consummation of the transactions
contemplated hereby will not, result in any Violation pursuant to: (A)
any provision of the Organizational Documents of Parent or any of its
Subsidiaries or (B) except as is not reasonably likely to have a
Material Adverse Effect on Parent or prevent the consummation of the
transactions contemplated hereby and subject to obtaining or making the
consents, approvals, orders, authorizations, registrations, declarations
and filings referred to in paragraph (iii) below, the terms, provisions
or conditions of any loan or credit agreement, note, mortgage, bond,
indenture, lease, compensation or benefit plan (or any grant or award
made pursuant thereto) or other agreement, obligation, instrument,
contract, permit, concession, franchise, license, judgment, order, writ,
injunction, award, decree, statute, law, ordinance, rule or regulation
applicable to Parent, any of its Subsidiaries or any of their respective
properties or assets.
(iii) No consent, registration, permit, approval, order or
authorization of, or registration, declaration, notice, report or filing
with, any Governmental Entity or securities exchange is required by or
with respect to Parent or any of its Subsidiaries in connection with the
execution and delivery of this Agreement by Parent or the consummation
by Parent of the transactions contemplated hereby, except for (A) the
consents, approvals, orders, authorizations, registrations, declarations
and filings required under or in relation to clause (x) of Section
3.1(c)(iii), (B) any filings required to be made or consents that have
to be obtained or arrangements that have to be made in order to ensure
that the United States government or any agency thereof will not
challenge the consummation of the transactions contemplated hereby on
national security grounds and (C) such consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of
which to make or obtain is not reasonably likely to have a Material
Adverse Effect on Parent or prevent the consummation of the transactions
contemplated hereby. Notwithstanding the foregoing, the Parent will use
its reasonable best efforts to obtain all the consents required to
consummate the transactions contemplated hereby.
27
(c) Information Supplied.
(i) None of the information supplied or to be supplied by Parent or
the Purchaser for inclusion or incorporation by reference in (A) the
Offer Documents or (B) the Information Statement, if any, the Proxy
Statement, if any, the Schedule 14D-9 and any other documents to be
filed with the SEC or any other Governmental Entity in connection with
the transactions contemplated hereby, including any amendment or
supplement to such documents, will, at the respective times such
documents are filed, and, with respect to the Information Statement, if
any, the Proxy Statement, if any, and the Offer Documents, when first
published, sent or given to stockholders of the Company, and at the
Effective Time, 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 made therein, in the light of the
circumstances under which they are made, not false or misleading, or
necessary to correct any statement in any earlier communication with
respect to the Offer or the solicitation of proxies for the Company
Stockholders Meeting, if any, which shall have become false or
misleading. The Offer Documents will comply as to form in all material
respects with the requirements of the Exchange Act and Securities Act
and the rules and regulations promulgated thereunder.
(ii) Notwithstanding the foregoing provisions of this Section
3.2(c), no representation or warranty is made by Parent or the Purchaser
with respect to statements made or incorporated by reference in the
Information Statement, if any, the Proxy Statement, if any, or the Offer
Documents based on information supplied by the Company for inclusion or
incorporation by reference therein.
(d) Vote Required. No vote of the holders of any class or series of
capital stock of Parent is necessary to approve this Agreement and the
transactions contemplated hereby.
(e) Brokers or Finders. Other than Lazard Freres & Co. LLC, whose fees
for services will be paid by Parent, no agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in
connection with any of the transactions contemplated by this Agreement based
upon arrangements made by or on behalf of Parent on the Purchaser.
(f) Ownership of Company Capital Stock. As of the date of this
Agreement, neither Parent nor any of its Subsidiaries (i) beneficially owns,
directly or indirectly or (ii) is party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of,
in case of either clause (i) or (ii), shares of capital stock of the
Company, except for the Tender Agreements.
(g) Litigation. As of the date of this Agreement there is no
litigation, arbitration, claim, suit, action, investigation or proceeding
pending or, to the knowledge of Parent, threatened against or affecting
Parent or any of its Subsidiaries or any of their respective properties or
assets, which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Parent or would prevent the
consummation of the transactions contemplated by this Agreement, nor is
there any judgment, award, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Parent or any of its
28
Subsidiaries which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Parent.
(h) Financing. Parent has the funds necessary to consummate the Offer
and the Merger on the terms contemplated by this Agreement.
3.3 Representations and Warranties of Parent and the Purchaser. Parent and
the Purchaser represent and warrant to the Company as follows:
(a) Organization and Corporate Power. The Purchaser is an indirect
wholly owned Subsidiary of Parent and a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware.
(b) Corporate Authorization. The Purchaser has all requisite corporate
power and corporate authority to enter into this Agreement and to consummate
the transactions contemplated hereby. The execution, delivery and
performance by the Purchaser of this Agreement and the consummation by the
Purchaser of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of the Purchaser
and no other corporate proceedings are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Purchaser and, assuming the
execution by the Company, constitutes a valid and binding agreement of the
Purchaser, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors generally, or by general equity principles (regardless of whether
such enforceability is considered in a proceeding in equity or at law). The
Board of Directors of the Purchaser has at a meeting duly called and held,
unanimously approved this Agreement, the Offer, the Merger and the other
transactions contemplated by this Agreement.
(c) Non-Contravention.
(i) The execution and delivery of this Agreement do not or will not,
as the case may be, and the consummation of the transactions
contemplated hereby will not, result in any Violation pursuant to: (A)
any provisions of the Organizational Documents of the Purchaser or (B)
except as is not reasonably likely to have a Material Adverse Effect on
the Purchaser or prevent the consummation of the transactions
contemplated hereby and subject to obtaining or making the consents,
approvals, orders, authorizations, registrations, declarations and
filings referred to in paragraph (ii) below, the terms, provisions or
conditions of any loan or credit agreement, note, mortgage, bond,
indenture, lease, compensation or benefit plan or any grant or award
made pursuant thereto or other agreement, obligation, instrument,
contract, permit, concession, franchise, license, judgment, order, writ,
injunction, award, decree, statute, law, ordinance, rule or regulation
applicable to the Purchaser or any of its properties or assets.
(ii) No consent, registration, permit, approval, order or
authorization of, or registration, declaration, notice, report or filing
with, any Governmental Entity or securities exchange is required by or
with respect to the Purchaser in connection with the execution and
delivery of this Agreement by the Purchaser or the consummation by the
Purchaser of the
29
transactions contemplated hereby except for (A) the consents, approvals,
orders, authorizations, registrations, declarations and filings required
under or in relation to clause (x) of Section 3.1(c)(iii), (B) any
filings required to be made or consents that have to be obtained or
arrangements that have to be made in order to ensure that the United
States government or any agency thereof will not challenge the
consummation of the transactions contemplated hereby on national
security grounds and (C) such consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of
which to make or obtain is not reasonably likely to have a Material
Adverse Effect on the Purchaser or to prevent the consummation of the
transactions contemplated hereby.
(d) No Business Activities. The Purchaser is not and has never been a
party to any agreement and has not conducted any activities other than in
connection with the organization of the Purchaser, the commencement of the
Offer, the negotiation and execution of this Agreement and the consummation
of the transactions contemplated hereby. the Purchaser has no Subsidiaries.
ARTICLE IV.
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 Covenants of the Company. During the period from the date of this
Agreement and continuing until the Effective Time or earlier termination of
this Agreement (except as expressly contemplated or permitted by this
Agreement, set forth in the Company Disclosure Schedule, or to the extent that
Parent shall otherwise consent in writing):
(a) Ordinary Course. The Company and its Subsidiaries shall carry on
their respective businesses in the usual, regular and ordinary course in all
respects, consistent with past practice and shall use their respective
commercially reasonable efforts (i) to preserve intact their present
business organizations and preserve their existing relationships with
customers, suppliers, employees, Governmental Entities and others having
business dealings with them; and (ii) to maintain in effect all material
foreign, federal, state and local licenses, approvals, permits and
authorizations required for the Company to carry on its business.
(b) Dividends; Changes in Share Capital. The Company shall not, and
shall not propose to, (i) declare or pay any dividends on or make other
distributions in respect of any of its capital stock, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock, (iii) repurchase, redeem or
otherwise acquire any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital stock except
as otherwise permitted with respect to the payment of the option exercise
price or tax withholding under certain option agreements in effect on the
date of this Agreement under the Company Option Plans, or (iv) effect any
reorganization or recapitalization.
(c) Issuance of Securities. The Company shall not and shall cause its
Subsidiaries not to issue, pledge, dispose of or encumber, deliver or sell,
or authorize or propose the issuance, disposition, encumbrance, pledge,
delivery or sale of, any shares of its capital stock of any class, any
Company Voting Debt or any securities convertible into or exercisable for, or
30
any rights, warrants or options to acquire, any such shares or Company
Voting Debt, or enter into any agreement with respect to any of the
foregoing, other than the issuance of Company Common Stock upon the exercise
of stock options or rights to purchase Company Common Stock outstanding on
the date of this Agreement in accordance with the terms of the Company
Option Plans as in effect on the date of this Agreement and those rights set
forth in Section 3.1(b) of the Company Disclosure.
(d) Organizational Documents. Except to the extent required to comply
with their respective obligations hereunder or required by law, the Company
and its Subsidiaries shall not amend or propose to amend their respective
Organizational Documents.
(e) Indebtedness. The Company shall not (i) incur any indebtedness for
borrowed money, deferred purchase price obligations in connection with
acquisitions, capitalized lease obligations (including equipment, motor
vehicles and other property) or guarantee any such indebtedness or
capitalized lease obligation or issue or sell any debt securities or
warrants or rights to acquire any debt securities of the Company or
guarantee any debt securities of other Persons other than any loans from
Parent or any of its affiliates or indebtedness of the Company or its
Subsidiaries to the Company or its Subsidiaries that would increase the
aggregate amount of outstanding indebtedness and capitalized lease
obligations of the Company and its Subsidiaries on a consolidated basis to
an amount greater than $15.5 million, (ii) make any loans, advances or
capital contributions to, or investments in, any other Person, other than by
the Company or its Subsidiaries to or in the Company or its Subsidiaries or
(iii) pay, discharge, modify or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than in the case of clauses (ii) and (iii), loans,
advances, capital contributions, investments, payments, discharges or
satisfactions except, in each case, as is not reasonably likely to have a
Material Adverse Effect on the Company incurred or committed to in the
ordinary course of business.
(f) Acquisitions. The Company shall not and shall not permit any of its
Subsidiaries to, acquire or agree to acquire, by merging or consolidating
with, or by purchasing a substantial equity interest in or a substantial
portion of the assets of, or by any other manner, any business or any
corporation, partnership, association or other business organization or
division thereof, or otherwise acquire or agree to acquire any assets
material to such companies taken as a whole, except for the purchase of
assets from suppliers or vendors in the ordinary course of business
consistent with the needs of the business and past practices.
(g) Dispositions. The Company shall not and shall not permit any of its
Subsidiaries to, sell, lease, license, encumber or otherwise dispose of, any
assets material to the Company and its Subsidiaries taken as a whole.
(h) Compensation. The Company shall not, and shall not permit its
Subsidiaries to, except in the ordinary course of business and consistent
with the past practices of the Company or as required under the terms of any
employment agreements validly existing on the date hereof, (i) increase the
compensation payable or to become payable to any of its executive officers
or employees or otherwise amend an agreement with any officer or employee,
or (ii) take any action with respect to the grant of any severance or
termination pay, or stay bonus or other incentive arrangement (other than as
required by applicable law or the terms of any
31
collective bargaining agreement or as required pursuant to benefit plans and
policies in effect on the date of this Agreement or as described in the
Company Disclosure Schedule with respect to the Retention Agreements), plans
or policies existing on the date hereof or as otherwise provided under this
Agreement and shall not amend any such agreement, plan or policy; provided,
however that in no event shall the Company grant, or permit to be granted,
any options or other awards under any Company Option Plan after the date of
this Agreement.
(i) Tax Elections. The Company shall not, and shall not permit its
Subsidiaries to, make or revoke any Tax election (other than immaterial Tax
elections in the ordinary course of business and consistent with past
practice), change or (or make a request to any taxing authority to change)
any material aspect of its (or its Subsidiaries') method of accounting for
Tax purposes or settle or compromise any material Tax liability.
(j) Employment. The Company shall not, and shall not permit its
Subsidiaries to, release or otherwise terminate the employment of any
employee or hire any new employees, except in the ordinary course of
business and consistent with the past practices of the Company.
(k) Benefit Plans and Agreements.
(i) Except as set forth in Section 4.1(k) the Company Disclosure
Schedule, the Company shall not, and shall not permit its Subsidiaries
to, establish, adopt or enter into any new employee benefit plans or
agreements (including pension, profit sharing, bonus, incentive
compensation, director and officer compensation, severance, medical,
disability, life or other insurance plans, and employment agreements) or
amend or modify any existing Company Benefit Plans, or extend coverage
of the Company Benefit Plans, except for extensions of such plans in the
ordinary course of business and as required by applicable law, or the
terms of any collective bargaining agreement.
(ii) No stock options or other awards shall be granted under any
Company Option Plan or Company Benefit Plan, nor shall any agreement
evidencing any warrants or rights to purchase any capital stock of the
Company be issued or granted after the date of this Agreement.
(iii) The Board of Directors of the Company shall or shall cause the
Compensation Committee of the Board of Directors to take such action as
may be necessary or appropriate to accelerate all Company Options in
accordance with the Company Option Plans and all Company Warrants in
accordance with their terms on or before the consummation of the Offer.
(iv) If requested in writing by Purchaser at least ten days prior to
the consummation of the Offer, the Company shall (A) adopt resolutions
terminating the Company 401(k) Profit Sharing Plan and the Terra Mar,
Inc. 401(k) Profit Sharing Plan (collectively, the "401(k) Plans"), and
(B) use commercially reasonable efforts to negotiate with American
United Life Insurance Company for the reduction or elimination of any
fees or charges associated with such termination and/or the ability of
the Company to pay such fees or charges on behalf of the participants of
the 401(k) Plans. If the 401(k) Plans are terminated pursuant to the
preceding
32
sentence, then after the Effective Time, the Purchaser shall cause the
Company to take any necessary or appropriate action to complete such
termination (including, without limitation, any notices and filings that
are required or that Purchaser deems advisable).
(l) Other Actions.
(i) The Company shall not, and shall not permit its Subsidiaries to,
take any action that is reasonably likely to result in any of the Offer
Conditions not being satisfied.
(ii) The Company shall not, and shall not permit its Subsidiaries
to, (A) transfer, lease, license, guarantee, sell, mortgage, pledge,
dispose of or encumber any assets except for sales of inventory in the
ordinary course of business and except for dispositions of immaterial
assets in the ordinary course of business consistent with past
practices; (B) authorize capital expenditures in any manner not
reflected in the capital budget of the Company as currently in effect or
make any acquisition of, or investment in, any business or stock of any
other person or entity; (C) settle or compromise any material claims or
litigation; or (D) permit any material insurance policy naming it as a
beneficiary or a loss payable payee to be canceled or terminated without
the prior written approval of Parent, except in the ordinary course of
business consistent with past practice.
(iii) The Company shall not, and shall cause its Subsidiaries not
to, enter into any contract or agreement that, if such agreement or
contract were in effect on the date hereof, would constitute a Company
Material Contract without the prior written consent of Parent.
4.2 Covenants of Parent and the Purchaser. During the period from the date
of this Agreement and continuing until the Effective Time (except as expressly
contemplated or permitted by this Agreement or to the extent that the Company
shall otherwise consent in writing) Parent shall not, and shall not permit any
of its Subsidiaries to, take any action that is reasonably likely to result in
(i) any of the representations and warranties of Parent and the Purchaser set
forth in this Agreement (other than those contained in Section 3.3(d)) (x) to
the extent qualified by Material Adverse Effect becoming untrue or inaccurate
and (y) shall be deemed satisfied so long as such representations and
warranties being untrue or inaccurate, taken together, do not have a Material
Adverse Effect on the Parent or the Purchaser, (ii) the representations and
warranties of Parent and the Purchaser contained in Section 3.3(d) being untrue
or inaccurate, or (iii) any of the Offer Conditions not being satisfied.
4.3 Advice of Changes; Government Filings. Each party shall (a) confer on a
regular and frequent basis with the other, (b) report (to the extent permitted
by law, regulation and any applicable confidentiality agreement) to the other
on operational matters and (c) promptly advise the other orally and in writing
of (i) any representation or warranty made by it in this Agreement (x) to the
extent qualified by Material Adverse Effect becoming untrue or inaccurate and
(y) to the extent not qualified by Material Adverse Effect becoming untrue or
inaccurate, except that this clause (y) shall be deemed satisfied so long as
such representations or warranties being untrue or inaccurate, taken
33
together, do not have a Material Adverse Effect on the Company, Parent or the
Purchaser, as the case may be, (ii) the failure by it to comply with or satisfy
in any material respect any covenant, condition or agreement required to be
complied with or satisfied by it under this Agreement, provided, however, that
no such notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement. The Company shall file all reports required to be filed
by it with the SEC (and all other Governmental Entities) between the date of
this Agreement and the Effective Time including, the Schedule 14D-9 and the
Information Statement or Proxy Statement, as the case may be, and shall (to the
extent permitted by law or regulation or any applicable confidentiality
agreement) deliver to Parent copies of all such reports promptly after the same
are filed. Subject to applicable laws relating to the exchange of information,
each of the Company and Parent shall have the right to review in advance, and
to the extent practicable each will consult with the other, with respect to all
the information relating to the other party and each of their respective
Subsidiaries, which appears in any filings, announcements or publications made
with, or written materials submitted to, any third party or any Governmental
Entity in connection with the transactions contemplated by this Agreement. In
exercising the foregoing right, each of the parties hereto agrees to act
reasonably and as promptly as practicable. Each party agrees that, to the
extent practicable, it will consult with the other party with respect to the
obtaining of all permits, consents, approvals and authorizations of all third
parties and Governmental Entities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will keep the other
party apprised of the status of matters relating to completion of the
transactions contemplated hereby.
ARTICLE V.
ADDITIONAL AGREEMENTS
5.1 Approval by the Company's Stockholders.
(a) If required by the DGCL or the Company's Organizational Documents in
order to consummate the Merger, the Company shall, as soon as practicable
following the acquisition by the Purchaser of the shares of the Company
Common Stock pursuant to the Offer, duly call, give notice of, convene and
hold a meeting of its stockholders (the "Company Stockholders Meeting") for
the purpose of obtaining the Company Stockholder Approval, and, the Company
shall, through the Board of Directors of the Company, recommend to its
stockholders that they vote in favor of the adoption of this Agreement;
provided, however, that the Board of Directors of the Company may withdraw,
modify or change such recommendation to the extent that the Board of
Directors of the Company determines to do so in exercise of its fiduciary
duties or as permitted under Section 5.4.
(b) Notwithstanding the preceding paragraph or any other provision of
this Agreement, in the event Parent, the Purchaser or any other Subsidiary
of Parent shall beneficially own, in the aggregate, at least 90% of the
outstanding shares of the Company Common Stock, the Company shall not be
required to call the Company Stockholders Meeting or to file or mail the
Proxy Statement, and the parties hereto shall, at the request of Parent and
subject to Article VI, take all necessary and appropriate action to cause
the Merger to become effective as soon as practicable after the acceptance
for payment of and payment for shares of the Company
34
Common Stock by the Purchaser pursuant to the Offer without a meeting of
stockholders of the Company in accordance with Section 253 of the DGCL.
(c) Parent agrees that it will vote, or cause to be voted, all of the
Company Common Stock then owned by it, the Purchaser or any of its other
Subsidiaries, including all shares purchased pursuant to the Offer, in favor
of the approval of the Merger and of this Agreement.
5.2 Access to Information. From the date hereof until the earlier of the
Effective Time or the termination of this Agreement, upon reasonable notice,
the Company shall afford to the officers, employees, accountants, counsel,
financial advisors and other representatives of Parent reasonable access to all
of its and its Subsidiaries properties, books, contracts, commitments and
records (including security position listings or other information concerning
beneficial and record owners of the Company's securities) and its officers,
management employees and representatives and, during such period, the Company
shall furnish promptly to Parent, consistent with its legal obligations, all
information concerning its business, properties and personnel as the other
party may reasonably request. Such information shall be held in confidence to
the extent required by, and in accordance with, the provisions of the letter
(the "Confidentiality Agreement") dated March 17, 2002, as may be amended from
time to time, between the Company and Parent, which Confidentiality Agreement
shall remain in full force and effect, and in the event this Agreement is
terminated, all information provided to Parent under the Confidentiality
Agreement shall be returned to the Company in accordance with the provisions
thereof.
5.3 Approvals and Consents; Cooperation. Each of the Company and Parent
shall cooperate with each other and use (and shall cause their respective
Subsidiaries to use) its best efforts to take or cause to be taken all actions,
and do or cause to be done all things, necessary, proper or advisable on their
part under this Agreement and applicable laws to consummate and make effective
the Offer and the Merger and the other transactions contemplated by this
Agreement as soon as practicable, including (i) preparing and filing as
promptly as practicable all documentation to effect all necessary applications,
notices, petitions, filings, and other documents and to obtain as promptly as
practicable all consents, waivers, licenses, orders, registrations, approvals,
permits, and authorizations necessary or advisable to be obtained from any
third party and any Governmental Entity in order to consummate the Offer, the
Merger and the other transactions contemplated by this Agreement and (ii)
taking all reasonable steps as may be necessary to obtain all such consents,
waivers, licenses, registrations, permits, authorizations, orders and
approvals. Without limiting the generality of the foregoing, each of the
Company and Parent agrees to make all necessary filings in connection with the
required regulatory approvals as promptly as practicable after the date of this
Agreement, including, without limitation, notifications under the HSR Act and
any foreign antitrust, investment or competition law or regulation, and to use
its reasonable best efforts to furnish or cause to be furnished, as promptly as
practicable, all information and documents requested and all inquiries made
with respect to such required regulatory approvals and shall otherwise
cooperate with the applicable Governmental Entity in order to obtain any
required regulatory approvals in as expeditious a manner as possible. Each
35
of the Company and Parent shall use its best efforts to resolve such
objections, if any, as any Governmental Entity may assert with respect to this
Agreement and the transactions contemplated hereby in connection with the
required regulatory approvals. In the event that a suit is instituted by a
Person or Governmental Entity challenging this Agreement and the transactions
contemplated hereby as violative of applicable antitrust or competition laws,
each of the Company and Parent shall use its reasonable efforts to resist or
resolve such suit. The Company and Parent each shall, upon request by the
other, furnish the other with all information concerning itself, its
Subsidiaries, directors, officers and stockholders and such other matters as
may reasonably be necessary or advisable in connection with the Offer
Documents, Schedule 14D-9, Proxy Statement or any other statement, filing,
notice or application made by or on behalf of the Company, Parent or any of
their respective Subsidiaries to any third party and any Governmental Entity in
connection with the Offer, the Merger or the other transactions contemplated by
this Agreement.
5.4 Acquisition Proposals.
(a) The Company agrees that neither the Company, its Subsidiaries, nor
any of the respective officers and directors of the Company or its
Subsidiaries, shall and the Company shall direct and use its best efforts to
cause its employees, agents and representatives (including any investment
banker, attorney or accountant retained by the Company or any of its
Subsidiaries) not to, take or cause, directly or indirectly, any of the
following actions with any party other than Parent, the Purchaser or their
respective designees: (i) directly or indirectly solicit, encourage,
initiate, participate in or otherwise facilitate (including by way of
furnishing information) any negotiations, inquiries or discussions with
respect to any Acquisition Proposal (as hereinafter defined) or (ii)
disclose, in connection with an Acquisition Proposal, any information or
provide access to its properties, books or records, other than the
transaction contemplated in this Agreement. The Company will immediately
cease and cause to be terminated any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of
the foregoing. The Company will take the necessary steps to promptly inform
the individuals or entities referred to in the first sentence of Section
5.4(a) hereof of the obligations undertaken in this Section 5.4. As used in
this Agreement "Acquisition Proposal" shall mean any tender or exchange
offer involving more than 15% of the Company Common Stock, any proposal for
a merger, consolidation or other business combination involving the Company,
any proposal or offer to acquire in any manner more than 15% of the Company
Common Stock or a substantial portion of the business or assets of the
Company (other than (i) immaterial or insubstantial assets, (ii) inventory
in the ordinary course of business, (iii) assets held for sale or (iv) other
assets sold or to be sold in the ordinary course of business), or any
proposal or offer with respect to any recapitalization or restructuring with
respect to the Company.
(b) Notwithstanding anything to the contrary contained in Section 5.4(a)
or elsewhere in this Agreement, prior to the consummation of the Offer, the
Company may participate in discussions or negotiations with, and furnish
non-public information, and afford access to the properties, books, records,
officers, employees and representatives of the Company to any Person, entity
or group if such Person, entity or group has delivered to the Company, prior
to the consummation of the Offer, an Acquisition Proposal which the Board of
Directors of the
36
Company in its good faith judgment, after consultation with its financial
advisor, determines contains terms that are financially superior (or which
the Board of Directors of the Company believes may lead to an Acquisition
Proposal with terms that are financially superior) to the terms contained in
this Agreement and the party submitting such Acquisition Proposal has
provided reasonable evidence of its ability to obtain any financing
necessary to consummate such Acquisition Proposal on the terms stated in
this Agreement and is reasonably capable of being completed, taking into
account all relevant financial, regulatory, legal and other aspects of such
Acquisition Proposal (a "Superior Proposal") and which the failure to
respond to such Superior Proposal would be inconsistent with the fiduciary
duties of the Board of Directors of the Company to the Company's
stockholders. In the event the Company receives a Superior Proposal, nothing
contained in this Agreement (but subject to the terms of this paragraph (b))
will prevent the Board of Directors of the Company from executing or
entering into an agreement relating to such Superior Proposal and
recommending such Superior Proposal to its stockholders in compliance with
Rule 14e-2 under the Exchange Act with respect to any Acquisition Proposal
or making any disclosure required by the fiduciary duties of the Company's
directors or by applicable law; in such case, the Board of Directors of the
Company may withdraw, modify or refrain from making its recommendation of
the Offer and the Merger; provided, however that the Company shall have
promptly notified Parent, and in any event within 48 hours, of any
Acquisition Proposal received by, any such information requested from, or
any such negotiations or discussions sought to be initiated with, the
Company or any of its Subsidiaries, indicating, in connection with such
notice, the name of the Person making the Acquisition Proposal or taking
such action and, in reasonable detail, the significant terms of any such
Acquisition Proposal and including with such notice any documentation
relating to such Acquisition Proposal, (a "Notice of Superior Proposal"). If
Parent does not, within five (5) Business Days after Parent's receipt of a
Notice of Superior Proposal or any such notice with respect to any amended
proposal (or, if earlier, prior to three Business Days before the expiration
of the Offer), make an irrevocable written offer or enter into a definitive
written agreement amending this Agreement to provide for a transaction that
the Board of Directors of the Company has determined in its good faith
judgment to be more favorable to the Company's stockholders than the
Superior Proposal, the Company, by action of the Board of Directors of the
Company, may terminate this Agreement and enter into an agreement with
respect to a Superior Proposal, subject to the provisions and terms of
Article VII hereto.
(c) Except as expressly set forth in Section 5.4(b), and except as may
be inconsistent with applicable law (including, without limitation, the
Exchange Act and the rules and regulations promulgated thereunder), neither
the Board of Directors of the Company nor any committee thereof (i) shall
withdraw or modify, or propose or to withdraw or modify, in a manner adverse
to Parent or the Purchaser, the approval or recommendation of the Board of
Directors of the Company or any such committee of the Offer, this Agreement
or the Merger, (ii) approve or recommend, or propose to approve or
recommend, any Acquisition Proposal, or (iii) enter into any agreement with
respect to any Acquisition Proposal.
5.5 Employee Benefits.
(a) Parent shall cause the Surviving Corporation to assume and honor in
accordance with their terms all written employment, severance, retention and
termination agreements, plans, policies and arrangements applicable to
current and former employees of the
37
Company and its Subsidiaries. Notwithstanding the foregoing, except as
provided in this Agreement, nothing shall in any way limit or restrict the
ability of Parent or the Surviving Corporation following the Effective Time
to modify, amend or terminate any Company Benefit Plan, in accordance with
the terms of such Company Benefit Plan. Nothing contained herein shall limit
or restrict the ability of Parent to terminate the employment of any
employee. Nothing contained in this Section 5.5 shall be deemed to
constitute a guarantee or undertaking of any kind on the part of Parent with
respect to the agreements, plans, policies or arrangements that are the
subject of this Section 5.5, it being expressly understood and agreed that
such agreements, plans, policies and arrangements shall constitute
obligations solely of the Surviving Corporation, to be satisfied out of the
assets of the Surviving Corporation.
(b) If the 401(k) Plans are terminated pursuant to Section 4.1(k)(iv),
Parent shall (i) cause the Surviving Corporation and its Subsidiaries to
adopt the BVHI 401(k) Profit Sharing Plan and become a participating
employer thereunder as of the Effective Time and (ii) cause the BVHI 401(k)
Profit Sharing Plan to recognize all service of the employees of the Company
or its Subsidiaries prior to the Effective Time for the purpose of
determining such employee's eligibility, vesting and rate of benefit accrual
under the BVHI 401(k) Profit Sharing Plan, but Parent shall not be required
to cause the BVHI 401(k) Profit Sharing Plan to credit such employee with
benefits for services performed prior to the Effective Time.
5.6 Employment Agreements. Parent shall cause the Surviving Corporation to
offer to enter into certain employment agreements on or before the Effective
Time with the persons listed in Section 5.6 of the Parent Disclosure Schedule.
5.7 Fees and Expenses. Whether or not the transactions contemplated hereby
are consummated, all Expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
Expenses, except (a) if the Merger is consummated, the Surviving Corporation
shall pay, or cause to be paid, any and all property or transfer taxes imposed
on the Company or its Subsidiaries, (b) the Expenses incurred in connection
with the printing, filing and mailing to stockholders of the Information
Statement, if any, or the Proxy Statement and the solicitation of stockholder
approvals shall be paid by the Parent, and (c) as provided in Section 7.2. As
used in this Agreement, "Expenses" includes all out-of-pocket expenses
including, without limitation, all fees and expenses of counsel, accountants,
investment bankers, experts and consultants to a party hereto and its
affiliates incurred by a party or on its behalf in connection with or related
to the authorization, preparation, negotiation, execution and performance of
this Agreement and the transactions contemplated hereby, including the
preparation, printing, filing and mailing of the Offer Documents and the
Information Statement, if any, or the Proxy Statement, if any, and the
solicitation of stockholder approvals and all other matters related to the
transactions contemplated hereby.
5.8 Indemnification; Directors' and Officers' Insurance. Parent shall cause
to be maintained in effect (i) the current provisions regarding indemnification
of current or former officers, directors and employees of the Company and its
Subsidiaries (each an "Indemnified Party") contained in the Organizational
Documents of the Company or its Subsidiaries and in any agreements between an
Indemnified Party and the Company or its
38
Subsidiaries, and (ii) for a period of six years after the Effective Time, a
tail policy (the "Tail Policy") to the Company's current coverage for
directors' and officers' liability insurance and fiduciary liability insurance
obtained by the Company in consultation and cooperation with Parent (provided
that Parent or the Surviving Corporation may substitute therefor policies of at
least the same coverage and amounts containing terms and conditions which are,
in the aggregate, no less advantageous to the insured and provided that such
substitution shall not result in any gaps or lapses in coverage with respect to
matters occurring prior to the Effective Time) with respect to claims arising
from facts or events that occurred on or before the Effective Time. Parent
shall not be obligated to pay more than an aggregate premium of $325,000
payable at the inception of the Tail Policy (the "Maximum Premium"). If such
insurance coverage cannot be obtained at all, or can only be obtained at an
annual premium in excess of the Maximum Premium, Parent shall maintain, or
cause to be maintained, the most advantageous policies of directors' and
officers' insurance obtainable at a premium not to exceed the Maximum Premium.
This covenant is intended to be for the benefit of, and shall be enforceable
by, each of the Indemnified Parties and their respective heirs and legal
representatives. Nothing contained in this Section 5.8, other than the express
agreements of Parent as set forth in this Section 5.8, shall be deemed to
constitute a guarantee or undertaking of any kind on the part of Parent with
respect to the indemnification obligations that are the subject of this Section
5.8, it being expressly understood and agreed that such obligations shall
constitute obligations solely of the Surviving Corporation, to be satisfied out
of the assets of the Surviving Corporation. If the Surviving Corporation or any
of its successors or assigns (i) consolidates with or merges into any other
Person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, then in each such case, proper provision
shall be made so that the successors and assigns of the Surviving Corporation
assume the obligations of the Surviving Corporation under this Section 5.8.
5.9 Public Announcements. So long as this Agreement is in effect, the
Company and Parent shall use all reasonable best efforts to develop a joint
communications plan and each party shall use all reasonable best efforts (i) to
ensure that all press releases and other public statements with respect to the
transactions contemplated hereby shall be consistent with such joint
communications plan and (ii) unless otherwise required by applicable law or by
obligations pursuant to any listing agreement with or rules of any securities
exchange, to consult with each other before issuing any press release or
otherwise making any public statement with respect to this Agreement or the
transactions contemplated hereby.
5.10 Takeover Statute. If any "fair price" "moratorium", "control share
acquisition", "interested shareholder", "business combination" or other similar
anti-takeover statute or regulation (including, without limitation, the
business combination provisions of Section 203 of the DGCL) (each a "Takeover
Statute") shall become applicable to the transactions contemplated hereby, the
Company and the members of the Board of Directors of the Company, subject to
its fiduciary duties, shall grant such approvals and take such actions as are
reasonably necessary so that the transactions contemplated hereby may be
consummated as promptly as practicable on the terms
39
contemplated hereby and otherwise act to eliminate or minimize the effects of
such Takeover Statute on the transactions contemplated hereby.
5.11 Third Party Standstill Agreements; Tortious Interference. During the
period from the date of this Agreement through the Closing of the Offer, the
Company shall not terminate, amend, modify or waive any provision of any
confidentiality or standstill or similar agreement to which the Company or any
of its Subsidiaries is a party (other than involving Parent). Subject to the
foregoing, during such period, the Company agrees to enforce, to the fullest
extent permitted under applicable law, the provisions of any such agreements,
including obtaining injunctions to prevent any breaches of such agreements and
to enforce specifically the terms and provisions thereof and any court having
jurisdiction.
5.12 Company Option Plans, Individual Stock Option Agreements. Pursuant to
Section 2.11(j), upon the consummation of the Offer, each outstanding Company
Option to purchase Company Common Stock, whether granted under an Individual
Stock Option Agreement or granted under the Company Stock Option Plans, shall
be cancelled and in exchange therefor each holder shall, upon delivery of a
cancellation agreement in form and substance satisfactory to Parent, receive a
cash payment upon consummation of the Offer (or, if later, on the fifth
business day after delivery of such cancellation agreement). All amounts
payable pursuant to Section 2.11(j) in connection with Company Options shall be
subject to any required withholding of taxes and shall be paid without
interest. In furtherance of the foregoing, the Company has, as of the date of
this Agreement, taken action under the Company Stock Option Plans to provide
that at the consummation of the Offer, each Company Option shall thereupon
represent the right, upon exercise, to receive the Merger Consideration, in
cash (without interest) and, that in lieu of exercise, each holder of the
Company Option may receive the cash payment described in this Section 5.12 upon
delivery of the cancellation agreement.
5.13 FIRPTA Certificate. The Company shall deliver to Parent, as agent for
the Company, a form of notice to the IRS in accordance with the requirements of
Treasury Regulation Section 1.897-2(h) (2) and (h)(5) and in form and substance
reasonably acceptable to Parent along with written authorization for Parent to
deliver such notice form to the IRS on behalf of the Company upon the
consummation of the Tender. At the consummation of the Tender, the Company
shall also deliver to the Purchaser and Parent a duly executed FIRPTA
certificate in form and substance satisfactory to the Purchaser.
ARTICLE VI.
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation to Effect the Merger. The
obligations of the Company, Parent and the Purchaser to effect the Merger are
subject to the satisfaction or waiver (subject to Section 1.4(c)) on or prior
to the Effective Time of the following conditions:
40
(a) Stockholder Approval. The Company shall have obtained all approvals
of holders of shares of capital stock of the Company necessary to approve
this Agreement and all the transactions contemplated hereby (including the
Merger) to the extent required by law.
(b) No Injunction or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by a court
or other Governmental Entity of competent jurisdiction shall be in effect
and have the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger.
(c) Completion of the Offer. The Purchaser shall have (i) commenced the
Offer pursuant to Section 1.1 hereof and (ii) purchased, pursuant to the
terms and conditions of such Offer, all shares of Company Common Stock duly
tendered and not withdrawn; provided, however, that neither Parent nor the
Purchaser shall be entitled to rely on the condition in clause (ii) above if
either of them shall have failed to purchase shares of Company Common Stock
pursuant to the Offer in breach of their obligations under this Agreement.
ARTICLE VII.
TERMINATION AND AMENDMENT
7.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, by action taken or authorized by the Board of Directors of the
terminating party or parties, whether before or after approval of this
Agreement and the matters contemplated herein, including the Merger, by the
stockholders of the Company:
(a) Subject to compliance with Section 1.4(c), by written consent of
Parent and the Company, by action of their respective Boards of Directors;
(b) By either the Company or Parent if (i) the Offer terminates or
expires by its terms without any Company Common Stock being purchased or
(ii) the Offer shall not have been consummated by the date which is 60 days
from the date of this Agreement; provided that the right to terminate this
Agreement under this Section 7.1(b) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Offer to be consummated on or
before such date;
(c) By Parent at any time prior to the consummation of the Offer if any
Person other than Parent, the Purchaser, or any of their affiliates or any
group of which any of them is a member, shall have entered into a definitive
agreement or an agreement in principle with the Company or any of its
Subsidiaries with respect to an Acquisition Proposal or the Board of
Directors of the Company (or any committee thereof) shall have adopted a
resolution approving any of the foregoing;
(d) By the Parent if the Minimum Condition to the Offer is not fulfilled;
(e) By either the Company or Parent if any court or other Governmental
Entity shall have issued an order, decree or ruling or taken any other
action (which order, decree, ruling or other action the parties shall have
used their reasonable best efforts to resist, resolve or lift, as
applicable, subject to the provisions of Section 5.3) permanently
restraining, enjoining or
41
otherwise prohibiting the transactions contemplated by this Agreement, and
such order, decree, ruling or other action shall have become final and
nonappealable;
(f) By Parent at any time prior to the consummation of the Offer if (i)
the Board of Directors of the Company (or any committee thereof) shall have
withdrawn or adversely modified (including by amendment of the Schedule
14D-9) its approval or recommendation of the Offer, the Merger or this
Agreement or the Board of Directors of the Company, upon request by Parent
following receipt of any Acquisition Proposal by the Company, shall fail to
reaffirm such approval or recommendation within five Business Days after
such request or shall have resolved to do any of the foregoing; (ii) the
Board of Directors of the Company shall have recommended to the stockholders
of the Company that they approve an Acquisition Proposal other than
transactions contemplated by this Agreement; or (iii) a tender offer or
exchange offer is commenced that, if successful, would result in any Person
becoming a "beneficial owner" (as such term is defined under Regulation 13D
under the Exchange Act) of 30% or more of the outstanding shares of Company
Common Stock (other than by Parent or an affiliate of Parent) and the Board
of Directors of the Company recommends that the stockholders of the Company
tender their shares in such tender or exchange offer;
(g) By the Company, prior to the purchase by the Purchaser of shares of
Company Common Stock pursuant to the Offer, if the Board of Directors of the
Company determines to accept a Superior Proposal pursuant to Section 5.4(b);
(h) By Parent, prior to the purchase by the Purchaser of shares of
Company Common Stock pursuant to the Offer, if (i) there shall be a material
breach of any of the Company's representations and warranties contained in
Section 3.1(b), (ii) there shall be a breach of any of the Company's other
representations and warranties or agreements contained in this Agreement,
(without giving effect to any materiality or material adverse effect
qualifications contained therein), except for such breaches that would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company, or (iii) there shall have been a material breach by the Company of
any of its covenants or agreements under this Agreement or the Company fails
to meet any of the Offer Conditions contained in Annex A hereto, which
breach or failure, in the case of (i) - (iii) above, is not curable or if
curable shall not have been cured within 10 Business Days of the receipt of
written notice thereof to the Company from the Parent;
(i) By the Company, if (i) there shall be a material breach of any of
the Parent or Purchaser's representations and warranties contained in this
Agreement, or (ii) there shall have been a material breach by the Parent or
Purchaser of any of their covenants or agreements under this Agreement,
which breach, in the case of (i) or (ii) above, is not curable or if curable
shall not have been cured within 10 Business Days of the receipt of written
notice thereof to the Parent from the Company; or
(j) By the Company, if the Purchaser fails to (i) commence the Offer or
keep the Offer open as provided in Section 1.1 hereof or (ii) purchase
validly tendered shares of the Company Common Stock in violation of the
terms of the Offer or this Agreement.
42
7.2 Effect of Termination.
(a) In the event of termination of this Agreement by either the Company
or Parent as provided in Section 7.1, this Agreement shall forthwith become
void and there shall be no liability or obligation on the part of Parent or
the Company except (i) with respect to Section 5.2, Section 5.8,this Section
7.2 and Section 8.5 and (ii) with respect to any liabilities or damages
incurred or suffered by a party as a result of the breach by the other party
of any of its covenants or other agreements set forth in this Agreement.
(b) In the event that this Agreement is terminated pursuant to Section
7.1(c), Section 7.1(f) or Section 7.1(g) of this Agreement or is terminated
by Parent pursuant to Section 7.1(d) because the Minimum Condition has not
been satisfied or the Offer completed on or before the Outside Date,
provided that at the time of such termination by Parent pursuant to Section
7.1(d), a Superior Proposal shall have been received by the Company prior to
termination and within 12 months after such termination of this Agreement,
the Company consummates any Superior Proposal, then the Company shall pay
the Parent in cash $3,500,000, including out-of-pocket fees, costs and
expenses incurred in connection with this transaction (the "Termination
Fee"). The Termination Fee shall be payable by wire transfer of immediately
available funds upon such termination or in the case of termination pursuant
to Section 7.1(d), upon the Company entering into a definitive agreement
with respect to a Superior Proposal or consummating a Superior Proposal. The
Company acknowledges that the agreements contained in this Section 7.2(b)
are an integral part of the transactions contemplated in this Agreement, and
that, without these agreements, the Parent and the Purchaser would not enter
into this Agreement; accordingly, if the Company fails to promptly pay the
amount due pursuant to this Section 7.2(b), and, in order to obtain such
payment, Parent or the Purchaser commences a suit which results in a
judgment against the Company for the fee set forth in this paragraph (b),
the Company shall pay to Parent or the Purchaser its costs and Expenses
(including reasonable attorneys' fees) in connection with such suit,
together with interest on the amount of the fee at the prime rate of
Citibank N.A. plus 2% per annum on the date such payment was required to be
made.
7.3 Amendment. Subject to Section 1.4(c), this Agreement may be amended by
the parties hereto, by action taken or authorized by their respective Boards of
Directors, at any time before or after approval of the matters presented in
connection with the Merger by the stockholders of the Company, but, after any
such approval, no amendment shall be made which by law or in accordance with
the rules of the NNM requires further approval by such stockholders without
such further approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
7.4 Extension; Waiver. Subject to Section 1.4(c), at any time prior to the
Effective Time, the parties hereto, by action taken or authorized by their
respective Boards of Directors, may, to the extent legally allowed, (i) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements or conditions contained
herein; provided however, that after any approval of this Agreement by the
Company's Stockholders, there may not be any extension or waiver of this
Agreement
43
which decreases the Merger Consideration or which adversely affects the rights
of the Company's stockholders thereunder without the approval of such
stockholders. Any agreement on the part of a party hereto to any such extension
or waiver shall be valid only if set forth in a written instrument signed on
behalf of such party. No delay on the part of any party hereto in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party hereto of any right, power or
privilege hereunder operate as a waiver of any other right, power or privilege
hereunder, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. Unless otherwise
provided, the rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies, which the parties hereto may otherwise
have at law, or in equity. The failure of any party to this Agreement to assert
any of its rights under this Agreement or otherwise shall not constitute a
waiver of those rights.
44
ARTICLE VIII.
GENERAL PROVISIONS
8.1 Non-Survival of Representations, Warranties and Agreements; No Other
Representations and Warranties. None of the representations and warranties in
this Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time. This Section 8.1 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time.
8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a) on the date of delivery if delivered
personally, (b) on the first Business Day following the date of dispatch if
delivered by a nationally recognized next-day courier service, (c) on the sixth
Business Day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid or (d) if sent by
facsimile transmission, with a copy mailed on the same day in the manner
provided in (a) or (b) above, when transmitted and receipt is confirmed by
telephone. All notices hereunder shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing by the
party to receive such notice:
(a) if to Parent or the Purchaser, to:
c/o Bureau Veritas, S.A.
00 xxx, Xxxxx des Reflets
La Defense 2
00000 Xxxxxxxxxx, Xxxxxx
Attn: Francois Tardan and Xxxx-France Saugnac
Fax: 000-000-0000-0000
With copies to:
Xxxxxx Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxx
Fax: 000-000-0000
45
(b) if to the Company, to:
U.S. Laboratories Inc.
0000 Xxxxxx Xxxxx
Xxxxx 00
Xxx Xxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx
Fax: 000-000-0000
With a copy to:
O'Melveny & Xxxxx LLP
Suite 100
114 Pacifica
Xxxxxx, Xxxxxxxxxx 00000
Attn: J. Xxx Xxxxxx
Fax: 000-000-0000
8.3 Interpretation. When a reference is made in this Agreement to Sections,
Exhibits or Schedules, such reference shall be to a Section of or Exhibit or
Schedule to this Agreement unless otherwise indicated. The table of contents,
glossary of defined terms and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden or proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the content requires otherwise.
8.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that both
parties need not sign the same counterpart.
8.5 Entire Agreement; No Third Party Beneficiaries.
(a) This Agreement (including the Schedules) constitutes the entire
agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter
hereof, other than the Confidentiality Agreement which Confidentiality
Agreement shall survive the execution and delivery of this Agreement or any
46
termination hereof; provided however, that in the event of any conflict or
inconsistency between any provision of this Agreement and any provisions of
the Confidentiality Agreement, the provisions of this Agreement shall govern.
(b) This Agreement shall be binding upon and inure solely to the benefit
of each party hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement, other
than Section 5.5 Employee Benefits and Section 5.8 Indemnification;
Directors' and Officers' Insurance (which is intended to be for the benefit
of each Indemnified Party covered thereby and may be enforced by each such
Indemnified Party) and Section 5.11 Company Option Plans and Individual
Stock Option Agreements.
8.6 Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) This Agreement shall be governed and construed in accordance with
the laws of the State of Delaware, without regard to the laws that might be
applicable under conflicts of laws principles.
(b) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any
Delaware State court, or Federal court of the United States of America,
sitting in Delaware, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement or the agreements
delivered in connection herewith or the transactions contemplated hereby or
thereby or for recognition or enforcement of any judgment relating thereto,
and each of the parties hereby irrevocably and unconditionally (i) agrees
not to commence any such action or proceeding except in such courts, (ii)
agrees that any claim in respect of any such action or proceeding may be
heard and determined in such Delaware State court or, to the extent
permitted by law, in such Federal court, (iii) waives, to the fullest extent
it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any such action or proceeding in
any such Delaware State or Federal court, and (iv) waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such Delaware State or
Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law. Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.2. Nothing in this
Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE
AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
47
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH
WAIVERS, (ii) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (iii) IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.6(c).
8.7 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible. Any provision of this Agreement
held invalid or unenforceable only in part, degree or certain jurisdictions
will remain in full force and effect to the extent not held invalid or
unenforceable. To the extent permitted by applicable law, each party waives any
provision of law, which renders any provision of this Agreement invalid,
illegal or unenforceable in any respect.
8.8 Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto, in whole
or in part (whether by operation of law or otherwise), without the prior
written consent of the other parties, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of and be enforceable by the parties and their respective permitted successors
and assigns.
8.9 Enforcement. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms. It is accordingly agreed that the parties
shall be entitled to specific performance of the terms hereof, this being in
addition to any other remedy to which they are entitled at law or in equity.
8.10 Definitions. As used in this Agreement:
(a) "affiliate" means any person directly or indirectly controlling,
controlled by or under common control with such other person at the time at
which the determination of affiliation is being made. The term "control"
(including, with correlative means, the term "controlled by" or "under
common control with"), as applied to any person, means the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of such person, whether through the ownership of
voting securities or other ownership interests, by contract or otherwise.
(b) "Board of Directors" means the Board of Directors of any specified
Person and any properly serving and acting committees thereof.
48
(c) "Business Day" means any day on which banks are not required or
authorized to close in the City of New York.
(d) "Code" means the Internal Revenue Code of 1986, as amended or
replaced and as in effect from time to time.
(e) "Company Option Plans" means collectively the Company's 1998 Stock
Option Plan and the Company's 1999 Stock Incentive Plan (collectively, the
"Company Plans"), each individual stock option agreement evidencing an
option granted by the Company outside the Company Plans (the "Individual
Stock Option Agreements") (options granted under the Company Plan and
Individual Stock Option Agreements, the "Company Options").
(f) "Environmental Claim" means any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, directives, claims,
liens, investigations, proceedings or notices of noncompliance or violation
by any person or entity (including any Governmental Authority) alleging
potential liability (including, without limitation, potential responsibility
for or liability for enforcement costs, investigatory costs, cleanup costs,
governmental response costs, removal costs, remedial costs, natural
resources damages, property damages, personal injuries, fines or penalties)
arising out of, based on or resulting from (A) the presence, or Release or
threatened Release into the environment, of any Hazardous Materials at any
location, whether or not owned, operated, leased or managed by the Company
or any of its subsidiaries or joint ventures (for purposes of Section
3.1(p)); or (B) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law; or (C) any and all claims by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from the presence or Release of
any Hazardous Materials.
(g) "Environmental Laws" means all federal, state, local laws, rules and
regulations relating to pollution, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or protection of human health as it relates to the
environment including, without limitation, laws and regulations relating to
Releases or threatened Releases of Hazardous Materials, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials.
(h) "HSR Act" means the Xxxx-Xxxxx Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules promulgated thereunder.
(i) "Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, and transformers or other equipment that
contain dielectric fluid containing polychlorinated biphenyls ("PCBs") in
regulated concentrations; and (b) any chemicals, materials or substances
which are now defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," or words of similar import, under any Environmental Law; and
(c) any other chemical, material, substance or waste, exposure to which is
now prohibited, limited or regulated under any Environmental Law in a
49
jurisdiction in which Company or any of its subsidiaries or joint ventures
operate (for purposes of this Section 3.1(q)).
(j) "Material Adverse Effect" means, with respect to any Person, any
change or effect that, individually or in the aggregate with all other
changes or effects, is or would reasonably be expected to have a material
adverse effect on the business, financial condition or results of operations
of such Person and its subsidiaries taken as a whole, other than any change
or effect to the extent attributable to (i) the economy in general or (ii)
this Agreement or the transactions contemplated hereby or the announcement
thereof.
(k) "Multiemployer Plan" has the meaning set forth in Section 3(37) of
ERISA.
(l) "Organizational Documents" means, with respect to any entity, the
certificate of incorporation, bylaws or other similar governing documents of
such entity, as may have been amended from time to time.
(m) "Person" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization, entity
or group (as defined in Section 13(d)(3) the Exchange Act).
(n) "Release" means any release, spill, emission, leaking, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the
atmosphere, soil, surface water, groundwater or property.
(o) "Subsidiary" when used with respect to any Person means any
corporation or other organization, whether incorporated or unincorporated,
(i) of which such Person or any other Subsidiary of such Person is a general
partner (excluding partnerships, the general partnership interests of which
held by such Person or any of its Subsidiaries of such Person do not have a
majority of the voting and economic interests in such partnership) or (ii)
at least a majority of the securities or other interests of which having by
their terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or
controlled by such Person or by any one or more of its Subsidiaries, or by
such Person and one or more of its Subsidiaries.
(p) (i) "Tax" (including, with correlative meaning, the terms "Taxes"
and "Taxable") means (x) any net income, gross income, gross receipts,
sales, use, ad valorem, transfer, transfer gains, franchise, profits,
license, withholding, payroll, employment, social security (or similar),
unemployment disability, excise, severance, stamp, rent, recording,
registration, occupation, premium, real or personal property, intangibles,
environmental (including taxes under Section 59A of the Code) or windfall
profits tax, alternative or add-on minimum tax, capital stock, customs duty
or other tax, fee, duty, levy, impost, assessment or charge of any kind
whatsoever (including, but not limited to, taxes assessed to real property
and water and sewer rents relating thereto) together with any interest and
any fine, penalty, additional to tax or additional amount or deductions
imposed by any United States or foreign governmental body (a "Tax
Authority") whether disputed or not, including any liability arising under
any tax
50
sharing agreement, with respect to the Company or any of its Subsidiaries
and any transferee or successor liability in respect of Taxes; (y) any
liability for the payment of any amount of the type described in the
immediately preceding clause (x) as a result of the Company or any of its
Subsidiaries being a member of an affiliated, consolidated or combined group
with any other corporation at any time on or prior to the Closing Date; and
(z) any liability of the Company or any of its Subsidiaries for the payment
or any amounts of the type described in the immediately preceding clause (x)
that is imposed by contract, including as a result of a contractual
obligation to indemnify any other person; and (ii) "Tax Return" means any
returns or reports (including elections, claims, declarations, disclosures,
schedules, estimates, computations and information returns) required to be
supplied to a Tax authority in any jurisdiction relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereto.
(q) "the other party" means, with respect to the Company, Parent and
means, with respect to Parent, the Company.
8.11 Performance by the Purchaser. Parent hereby agrees to cause the
Purchaser to comply with its obligations hereunder and under the Offer and to
cause the Purchaser to consummate the Merger as contemplated herein and
whenever this Agreement requires the Purchaser to take any action, such
requirement shall be deemed to include an undertaking of Parent to cause the
Purchaser to take such action.
[Remainder of page intentionally left blank]
51
IN WITNESS WHEREOF, Parent, the Company and the Purchaser have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of August 8, 2002.
BUREAU VERITAS, S.A.
BY: /s/ XXXXX XXXXXXXXXXX
-----------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: President and Chief
Executive Officer
VOICE ACQUISITION CORP.
By: /s/ XXXXX XXXXXXXXXXX
-----------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: President
U.S. LABORATORIES INC.
By: /s/ XXXXXXXXX XXXXXX
-----------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Chairman of the Board
and President
ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, and subject to the terms
and conditions of the Agreement, the Purchaser shall not be required to accept
for payment or, subject to any applicable rules and regulations of the SEC
(including Rule 14e-1(c) under the Exchange Act) pay for, and may delay the
acceptance for payment of or payment for, any shares of Company Common Stock
tendered in the Offer and (subject to the terms and conditions of the Agreement
including Section 1.1(b)) may amend, extend or terminate the Offer if, (i)
immediately prior to the expiration of the Offer (as extended in accordance
with the Agreement) the Minimum Condition shall not have been satisfied, (ii)
any applicable waiting period under the HSR Act shall not have expired or been
terminated prior to the expiration of the Offer or (iii) prior to the time of
acceptance of any shares of Company Common Stock pursuant to the Offer any of
the following shall occur:
(a) there shall be pending any suit, action, litigation or proceeding
(hereinafter, an "Action") by any Government Entity: (i) challenging the
acquisition by Parent or the Purchaser of any shares of Company Common Stock
or seeking to make illegal, materially delay, make materially more costly or
otherwise directly or indirectly restrain or prohibit the consummation of
the Offer or the Merger or seeking to obtain from the Company, Parent or the
Purchaser any damages that are material in relation to the Company and its
Subsidiaries taken as a whole, or in relation to the amount to be paid by
Parent and Purchaser for all of the shares of Company Common Stock issued
and outstanding on a fully diluted basis pursuant to the Offer an the
Merger; (ii) seeking to prohibit or impose any material limitations on
Parent's, the Purchaser's or any of their respective affiliates' ownership,
operation or effective control of all or any material portion of the
business or assets of the Company and its Subsidiaries taken as a whole
(iii) requiring divestiture by the Purchaser or any of its affiliates of any
shares of Common Stock of the Company or current material business or
material assets (including, without limitation, any material business or
material assets of the Company or any of its Subsidiaries) which is
reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect on the Company or Parent; or (iv) seeking to impose material
limitations on the ability of Parent or the Purchaser effectively to acquire
or hold, or to exercise full rights of ownership of, the shares of Company
Common Stock including the right to vote the shares of Company Common Stock
purchased by them on an equal basis with all other shares of Company Common
Stock on all matters properly presented to the shareholders of the Company;
(b) any statute, rule, regulation, decree, judgment, ruling, order or
injunction shall be enacted, promulgated, entered, enforced or deemed to or
become applicable to the Offer or the Merger, or any other action shall have
been taken by any court or other Governmental Entity, that is reasonably
likely to result in any of the effects of, or have any of the consequences
sought to be obtained or achieved in, any Action referred to in clauses (i)
through (iii) of paragraph (a) above;
(c) (i) the representations and warranties of the Company set forth in
the Agreement (x) to the extent qualified by Material Adverse Effect shall
not be true and correct
A-1
and (y) to the extent not qualified by Material Adverse Effect shall not be
true and correct, except that this clause (y) shall be deemed satisfied so
long as any failures of such representations and warranties to be true and
correct, taken together, do not have a Material Adverse Effect on the
Company, in each of clause (x) and (y) as of the date of this Agreement and
(except to the extent such representations and warranties speak as of an
earlier date), in which case such representation or warranty shall not be
true and correct as of such date as of the consummation of the Offer as
though made on and as of such date; (ii) the Company shall have breached or
failed to perform or comply in any material respect with any of its material
obligations, covenants or agreements under the Agreement and such breach or
failure to perform shall not have been cured; or (iii) any change or event
shall have occurred that has had a Material Adverse Effect on or
significantly disrupts the business, assets, liabilities, condition
(financial or otherwise) or results of operations of the Company;
(d) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on the price for, securities on the
New York Stock Exchange or NNM (excluding any coordinated trading halt
triggered as a result of a specified decrease in a market index) related to
market conditions, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or the
French Republic by any Governmental Entity, or (iii) any material limitation
by any Governmental Entity on the extension of credit by banks or other
lending institutions, (iv) in the case of any of the foregoing or of
subsection (c) above existing at the time of the making of the Offer, a
material acceleration or worsening thereof;
(e) the Board of Directors of the Company (or a special committee
thereof) (i) shall have withdrawn, modified or changed in a manner adverse
to the Parent and the Purchaser (including by amendment of the Schedule
14D-9) its recommendation of the Offer, this Agreement or the Merger, (ii)
shall have recommended or announced a neutral position with respect to an
Acquisition Proposal, (iii) shall have adopted any resolution to effect the
foregoing, or (iv) fails to reconfirm the Company Tender Recommendation
within five (5) business days after receipt of a request by the Parent or
the Purchaser, provided that any such request may be made only one time
within five (5) business days after notice of any of the following events
(as any of the following events may occur from time to time): (i) receipt by
the Company of an Acquisition Proposal, (ii) any material change to an
existing Acquisition Proposal, (iii) a public announcement of any
transaction to acquire a material portion of the Company Common Stock by a
Person other than the Purchaser, the Parent or any of their Subsidiaries or
affiliates other than an existing Acquisition Proposal, (iv) any extension
of the Offer, and (v) any other material event or circumstance reasonably
related to the Offer;
(f) any applicable waiting period under the HSR Act relating to the
Offer and the Merger shall not have expired or been terminated;
(g) the Agreement shall have been terminated in accordance with its
terms.
The foregoing conditions are for the sole benefit of the Purchaser and the
Parent and may be asserted by the Purchaser or the Parent regardless of the
circumstances giving rise to any such condition or may be waived by the Parent
or the Purchaser in whole or in part at any time and
A-2
from time to time in the sole discretion of the Parent or the Purchaser, except
with regard to the Minimum Conditions. The failure by the Parent or the
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right; the waiver of any such right with respect to
particular facts and circumstances shall not be deemed a waiver with respect to
any other facts and circumstances; and each such right shall be deemed an
ongoing right which may be asserted at any time and from time to time.
A-3
