Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
among
HARVEST/AMI HOLDINGS INC.,
SIMON ACQUISITION CORP.,
and
ASSOCIATED MATERIALS INCORPORATED
dated as of March 16, 2002
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TABLE OF CONTENTS
PAGE
ARTICLE I THE OFFER................................................................................. 1
Section 1.1 The Offer............................................................................ 1
Section 1.2 Offer Documents...................................................................... 3
Section 1.3 Company Actions...................................................................... 3
Section 1.4 Directors............................................................................ 5
ARTICLE II THE MERGER................................................................................ 6
Section 2.1 The Merger........................................................................... 6
Section 2.2 Closing.............................................................................. 6
Section 2.3 Effective Time....................................................................... 6
Section 2.4 Effects of the Merger................................................................ 6
Section 2.5 Certificate of Incorporation; Bylaws................................................. 6
Section 2.6 Directors; Officers.................................................................. 7
ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES 7
Section 3.1 Effect on Capital Stock.............................................................. 7
Section 3.2 Stock Options; ESPP.................................................................. 8
Section 3.3 Payment for Shares................................................................... 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES............................................................ 11
Section 4.1 Representations and Warranties of Company............................................ 11
Section 4.2 Representations and Warranties of Parent and Merger Sub.............................. 21
ARTICLE V CONDUCT OF BUSINESS OF COMPANY............................................................ 24
Section 5.1 Conduct of Business of Company....................................................... 24
ARTICLE VI ADDITIONAL COVENANTS...................................................................... 27
Section 6.1 Company Stockholders Meeting; Preparation of the Company Proxy Statement;
Short-Form Merger ................................................................... 27
Section 6.2 Access to Information; Confidentiality............................................... 28
Section 6.3 Reasonable Best Efforts.............................................................. 28
Section 6.4 Public Announcements................................................................. 29
Section 6.5 Acquisition Proposals................................................................ 29
Section 6.6 Consents, Approvals and Filings...................................................... 31
Section 6.7 Employee Benefit Matters............................................................. 32
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TABLE OF CONTENTS
(continued)
Section 6.8 Indemnification; Directors' and Officers' Insurance.................................. 33
Section 6.9 Transfer Taxes....................................................................... 34
Section 6.10 Notes Tender Offer; Consent Solicitation............................................. 34
Section 6.11 Financing-Related Cooperation........................................................ 34
Section 6.12 Solvency Opinion..................................................................... 35
ARTICLE VII CONDITIONS PRECEDENT...................................................................... 35
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger........................... 35
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER......................................................... 36
Section 8.1 Termination.......................................................................... 36
Section 8.2 Effect of Termination................................................................ 38
Section 8.3 Amendment............................................................................ 40
Section 8.4 Extension; Waiver.................................................................... 40
Section 8.5 Procedure for Termination, Amendment, Extension or Waiver............................ 40
ARTICLE IX GENERAL PROVISIONS........................................................................ 40
Section 9.1 Nonsurvival of Representations and Warranties........................................ 40
Section 9.2 Fees and Expenses.................................................................... 40
Section 9.3 Certain Definitions.................................................................. 40
Section 9.4 Notices.............................................................................. 42
Section 9.5 Interpretation....................................................................... 43
Section 9.6 Entire Agreement; Third-Party Beneficiaries.......................................... 43
Section 9.7 Governing Law........................................................................ 43
Section 9.8 Waiver of Jury Trial................................................................. 43
Section 9.9 Assignment........................................................................... 43
Section 9.10 Enforcement.......................................................................... 43
Section 9.11 Severability......................................................................... 44
Section 9.12 Counterparts......................................................................... 44
EXHIBIT A - Conditions to the Offer
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DISCLOSURE SCHEDULE TABLE
Sections 4.1(a) Organization Standing and Corporate Power; Significant
and 4.1 (b) Subsidiaries
Section 4.1(c) Authority; Noncontravention
Section 4.1(e) Compliance With Laws
Section 4.1(f) Capital Structure
Section 4.1(g) Financial Statements; SEC Reports
Section 4.1(h) Absence of Certain Changes and Events
Section 4.1(j) Employee Benefit Matters
Section 4.1(k) Taxes
Section 4.1(l) Litigation
Section 4.1(m) Labor and Employment Matters
Section 4.1(o) Environmental Compliance
Section 4.1(p) Material Contracts
Section 4.1(u) Title to Properties; Encumbrances
Section 4.1(v) Insurance
Section 5.1 Conduct of Business of Company
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DEFINED TERMS
2001 Form 10-K.............................. 13
Acquisition Proposal........................ 30
affiliate................................... 41
Agreement................................... 1
Applicable Law.............................. 19
Benefit Plan................................ 15
Board Percentage............................ 5
business day................................ 41
Cap......................................... 33
Capital Structure Date...................... 13
Certificate of Merger....................... 6
Certificates................................ 9
Closing..................................... 6
Closing Date................................ 6
Code........................................ 10
Commitment Letter........................... 23
Common Stock................................ 1
Company..................................... 1
Company Disclosure Documents................ 15
Company Employee............................ 32
Company Employees........................... 32
Company Material Adverse Effect............. 41
Company Permits............................. 19
Company Proxy Statement..................... 15
Company Representatives..................... 29
Confidentiality Agreement................... 28
Continuing Directors........................ 5
control..................................... 41
Delaware Courts............................. 43
Delaware State Secretary.................... 6
DGCL........................................ 1
Disclosure Schedule......................... 41
Dissenting Shares........................... 8
Effective Time.............................. 6
Environmental Liability..................... 19
Environmental Matters....................... 19
Equity Commitment........................... 24
ERISA....................................... 15
ESPP........................................ 8
Exchange Act................................ 2
Expiration Date............................. 2
Filed SEC Reports........................... 13
Financial Advisor........................... 3
GAAP........................................ 14
Governmental Entity......................... 12
HSR Act..................................... 12
Incentive Plan.............................. 8
Indemnified Parties......................... 33
knowledge................................... 41
Lender...................................... 23
Letter of Transmittal....................... 3
Liens....................................... 11
Material Contracts.......................... 19
Merger...................................... 1
Merger Consideration........................ 7
Merger Sub.................................. 1
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Minimum Share Condition..................... Exhibit A
Multiemployer Plan.......................... 15
Note Indenture.............................. 34
Notes....................................... 34
Notes Tender Offer.......................... 34
Offer....................................... 1
Offer Completion Date....................... 37
Offer Consideration......................... 2
Offer Documents............................. 3
Offer to Purchase........................... 3
on a fully-diluted basis.................... Exhibit A
Option Consideration........................ 8
Options..................................... 8
Outside Date................................ 2
Parent...................................... 1
Parent Expenses............................. 38
Parent Material Adverse Effect.............. 22
Parent's Designees.......................... 5
Paying Agent................................ 9
Payment Fund................................ 9
Permitted Investments....................... 10
person...................................... 41
Preferred Stock............................. 13
Schedule 14D-9.............................. 4
Schedule TO................................. 3
SEC......................................... 2
SEC Reports................................. 13
Securities Act.............................. 12
Significant Subsidiary...................... 11
Stockholders Meeting........................ 27
Subsequent Offering Period.................. 2
subsidiary.................................. 41
Superior Proposal........................... 30
Surviving Corporation....................... 6
Tax......................................... 18
Tax Return.................................. 18
Taxes....................................... 18
Tender Agreement............................ 1
Termination Fee............................. 38
Third Party................................. 42
Transaction Financing....................... 23
Transfer Taxes.............................. 34
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of March 16, 2002 (this
"Agreement"), is made and entered into among HARVEST/AMI HOLDINGS INC., a
Delaware corporation ("Parent"), SIMON ACQUISITION CORP., a Delaware corporation
and wholly owned subsidiary of Parent ("Merger Sub"), and ASSOCIATED MATERIALS
INCORPORATED, a Delaware corporation ("Company").
RECITALS:
A. The respective Boards of Directors of Parent, Merger Sub and Company
each have determined that it would be advisable and in the best interests of
their respective stockholders for Parent to acquire Company by means of a merger
of Merger Sub with and into Company (the "Merger") on the terms and subject to
the conditions set forth in this Agreement.
B. As a first step in the acquisition, Parent and Company each desire that
Parent cause Merger Sub to commence a cash tender offer (the "Offer") to
purchase all of Company's outstanding shares of common stock, par value $0.0025
per share ("Common Stock") on the terms and subject to the conditions set forth
in this Agreement.
C. Parent and Merger Sub are unwilling to enter into this Agreement unless
concurrently with the execution and delivery of this Agreement, a certain
stockholder of Company enters into a Tender and Voting Agreement (the "Tender
Agreement") with Parent and Merger Sub pursuant to which such stockholder will
agree to tender all Common Stock with respect to which such stockholder has
dispositive power pursuant to the Offer and to vote all Common Stock that such
stockholder has the right to vote in favor of the Merger, in each case, subject
to the terms of the Tender Agreement.
D. The Board of Directors of Company has unanimously (i) determined that
the Offer and the Merger are fair to, and in the best interests of, Company and
the holders of Common Stock, and has declared that the Offer and the Merger are
advisable, (ii) approved the Offer, the Merger and this Agreement, (iii)
approved the Tender Agreement for the purposes of Section 203 of the General
Corporation Law of the State of Delaware (the "DGCL"), and (iv) resolved to
recommend (subject to the limitations contained in this Agreement) that the
holders of Common Stock accept the Offer and tender their shares of Common Stock
pursuant to the Offer and that the holders of Common Stock adopt this Agreement.
NOW, THEREFORE, in consideration of the representations, warranties and
covenants contained in this Agreement, the parties hereto by this Agreement
agree as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article VIII, as promptly as practicable (but in any event not
later than five business days
after the public announcement of the execution and delivery of this Agreement),
Parent will cause Merger Sub to commence (within the meaning of Rule 14d-2 under
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act")), the Offer to purchase all
outstanding shares of Common Stock at a price of $50.00 per share, net to the
seller in cash (such price or any higher price paid pursuant to the Offer, the
"Offer Consideration"). Notwithstanding the foregoing, if between the date of
this Agreement and the Effective Time (as defined in Section 2.3) the
outstanding shares of Common Stock shall have been changed into a different
number of shares or a different class by reason of any stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares, the Offer Consideration shall be correspondingly adjusted on a
per-share basis to reflect such stock dividend, subdivision, reclassification,
recapitalization, split, combination, exchange of shares or similar transaction.
The obligation of Parent and Merger Sub to commence the Offer, to consummate the
Offer and to accept for payment and to pay for shares of Common Stock validly
tendered in the Offer and not withdrawn shall be subject only to those
conditions set forth in Exhibit A to this Agreement. Unless extended in
accordance with Section 1(b), the Offer shall expire 20 business days after the
date of its commencement (together with any extensions thereof, the "Expiration
Date").
(b) Without the prior written consent of Company, Merger Sub shall
not (and Parent shall cause Merger Sub not to): (i) decrease or change the form
of the Offer Consideration or decrease the number of shares of Common Stock
sought pursuant to the Offer, (ii) amend any term of the Offer in any manner
adverse to holders of Common Stock, (iii) change any condition to the Offer,
(iv) impose additional conditions to the Offer, (v) waive the Minimum Share
Condition (as defined in Exhibit A to this Agreement), or (vi) extend the
Expiration Date beyond the initial Expiration Date of the Offer. Notwithstanding
the foregoing, Merger Sub may, without the consent of Company, and shall, at
Company's request, extend the Offer at any time and from time to time: (i) if at
the then scheduled Expiration Date any of the conditions to the Offer shall not
have been satisfied or waived; and (ii) for any period required by any statute
or rule, regulation, interpretation or position of the Securities and Exchange
Commission (the "SEC") or its staff applicable to the Offer; provided, however,
that the Expiration Date may not be extended beyond May 16, 2002 (the "Outside
Date"). If the Minimum Share Condition has been satisfied and all other
conditions to the Offer have been satisfied or waived but less than 90% of the
Common Stock, calculated on a fully diluted basis (as defined in Exhibit A to
this Agreement), has been validly tendered and not withdrawn on the Expiration
Date, Merger Sub shall accept and purchase all of the Common Stock tendered in
the initial offer period and may amend the Schedule TO (as defined in Section
1.2(a)) and notify holders of Common Stock of Merger Sub's intent to provide a
"subsequent offering period" (as such term is defined in Rule 14d-1 promulgated
under the Exchange Act (the "Subsequent Offering Period")), as long as providing
for the Subsequent Offering Period does not require the extension of the initial
offer period under applicable rules and regulations of the SEC, for tender of at
least 90% of the Common Stock pursuant to Rule 14d-11 of the Exchange Act, which
Subsequent Offering Period shall not exceed 10 business days. Assuming the prior
satisfaction or waiver of the conditions to the Offer set forth in Exhibit A to
this Agreement, Merger Sub shall, and Parent shall cause Merger Sub to, as soon
as legally permissible after the commencement of the Offer, accept for payment
and pay for all shares of Common Stock validly tendered and not withdrawn
pursuant to the Offer as soon as practicable after the Expiration Date thereof.
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(c) Parent shall provide or cause to be provided to Merger Sub on a
timely basis the funds necessary to purchase any shares of Common Stock that
Merger Sub becomes obligated to purchase pursuant to the Offer and shall be
liable on a direct and primary basis for the performance by Merger Sub of its
obligations under this Agreement.
Section 1.2 Offer Documents.
(a) As soon as practicable on the date of commencement of the Offer,
Parent and Merger Sub shall file or cause to be filed with the SEC a Tender
Offer Statement on Schedule TO (together with any supplements or amendments
thereto, the "Schedule TO") with respect to the Offer which shall contain (as an
exhibit) or shall incorporate by reference the offer to purchase (the "Offer to
Purchase") and related letter of transmittal (the "Letter of Transmittal") and a
summary advertisement, as well as other ancillary Offer documents and
instruments required by Applicable Law (as defined in Section 4.1(o)) (the
Schedule TO, the Offer to Purchase, the Letter of Transmittal, the summary
advertisement and other ancillary Offer documents and instruments, together with
any supplements or amendments thereto, the "Offer Documents") and shall be
mailed promptly to the holders of Common Stock as required by applicable federal
securities laws. Company will promptly supply to Parent and Merger Sub in
writing, for inclusion in the Offer Documents, all information concerning
Company required under the Exchange Act to be included in the Offer Documents.
(b) Each of Parent, Merger Sub and Company shall promptly correct
any information provided by them for use in the Offer Documents if and to the
extent that such information shall be or have become false or misleading in any
material respect, and Parent and Merger Sub shall take all lawful action
necessary to cause the Schedule TO as so corrected to be filed promptly with the
SEC, and the other Offer Documents as so corrected to be disseminated to holders
of Common Stock as and to the extent required by applicable federal securities
law. In conducting the Offer, Parent and Merger Sub shall comply in all material
respects with the provisions of the Exchange Act and any other Applicable Law.
Company and its counsel shall be promptly provided with copies of any comments
received from the SEC or its staff with respect to the Offer Documents and shall
be given a reasonable opportunity to review and comment on the Offer Documents
and any amendments thereto prior to the filing thereof with the SEC.
Section 1.3 Company Actions.
(a) Company by this Agreement consents to the Offer and the Merger
and represents and warrants that (i) its Board of Directors (at a meeting duly
called and held) has (A) determined that each of this Agreement, the Offer and
the Merger are fair to, and in the best interests of, Company and the holders of
Common Stock, and has declared that the Offer and the Merger are advisable, (B)
approved the Offer, the Merger and this Agreement in accordance with the
provisions of the DGCL, (C) approved the Tender Agreement for purposes of
Section 203 of the DGCL, and (D) resolved (subject to the limitations contained
in this Agreement) to recommend that the holders of Common Stock accept the
Offer and tender their Common Stock pursuant to the Offer and that the holders
of Common Stock adopt this Agreement and (ii) Xxxxxxx Xxxxx Xxxxxx Inc. (the
"Financial Advisor") has delivered to the Board of Directors of Company its
opinion as described in Section 4.1(t). Company shall deliver to Parent a
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complete and correct executed copy of the written opinion of the Financial
Advisor solely for informational purposes promptly after receipt thereof by
Company. Subject to the provisions of Section 6.5(b), Company by this Agreement
consents to the inclusion in the Offer Documents of the recommendation of the
Board of Directors of Company in favor of the Offer and the adoption of this
Agreement.
(b) Company shall file with the SEC, contemporaneously with the
filing by Parent and Merger Sub of the Schedule TO, a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
supplements or amendments thereto, the "Schedule 14D-9") containing, subject to
Section 6.5(b), the recommendation of the Board of Directors of Company in favor
of the Offer and the approval of this Agreement. Each of Parent and Merger Sub
will promptly supply to Company in writing, for inclusion in the Schedule 14D-9,
all information concerning Parent's Designees (as defined in Section 1.4), as
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, and Company shall include such information in the Schedule 14D-9.
Each of Company, Parent and Merger Sub shall promptly correct any information
provided by them for use in the Schedule 14D-9 if and to the extent that such
information shall be, or shall have become false or misleading in any material
respect and Company shall take all lawful action necessary to cause the Schedule
14D-9 as so corrected to be filed promptly with the SEC and disseminated to the
holders of Common Stock as and to the extent required by applicable federal
securities law. Parent, Merger Sub and their counsel shall be promptly provided
with copies of the Schedule 14D-9, any comments received from the SEC or its
staff with respect to the Schedule 14D-9 and shall be given a reasonable
opportunity to review and comment on the Schedule 14D-9 and any amendments
thereto prior to the filing thereof with the SEC.
(c) In connection with the Offer, Company shall promptly furnish
Parent with (or cause Parent to be furnished with) mailing labels, security
position listings and all available listings or computer files containing the
names and addresses of the record holders of Common Stock as of the latest
practicable date and shall furnish Parent with (or cause Parent to be furnished
with) such information and assistance (including updated lists of stockholders,
mailing labels and lists of security positions) as Parent or its agents may
reasonably request in communicating the Offer to the record and beneficial
holders of Common Stock. Subject to the requirements of Applicable Law, and
except for such actions as are necessary to disseminate the Offer Documents and
any other documents necessary to consummate the Offer and the Merger, Parent and
Merger Sub and each of their affiliates, associates, partners, employees, agents
and advisors shall hold in confidence the information contained in such labels,
lists and files, shall use such information only in connection with the Offer
and the Merger and, if this Agreement is terminated, shall deliver promptly to
Company (or destroy and certify to Company in writing the destruction of) all
copies of such information (and any copies, compilations or extracts thereof or
based thereon) then in their possession or under their control.
(d) Company represents and warrants that it has been advised that
each of its directors and executive officers presently intends to tender
pursuant to the Offer all Common Stock owned of record and beneficially by him,
other than shares of Common Stock beneficially owned and represented by Options
(as defined in Section 3.2) and except to the extent such tender would violate
applicable securities laws; provided that the failure of any such director or
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executive officer to tender his shares pursuant to the Offer shall not
constitute a breach of this Agreement.
Section 1.4 Directors.
(a) As soon as practicable after the purchase by Merger Sub pursuant
to the Offer of such number of shares of Common Stock (together with any shares
of Common Stock then owned by Parent or any of its subsidiaries (as defined in
Section 9.3)) as represents a majority of the outstanding shares of Common Stock
(on a fully diluted basis), (i) Parent shall be entitled to designate such
number of directors ("Parent's Designees"), rounded up to the next whole number
that will give Parent, subject to compliance with Section 14(f) of the Exchange
Act, representation on the Board of Directors of Company equal to at least the
product of (x) the number of directors on the Board of Directors of Company
(giving effect to any increase in the number of directors pursuant to this
Section 1.4) and (y) the percentage that such number of shares of Common Stock
so purchased in the Offer (together with any shares of Common Stock then owned
by Parent or any of its subsidiaries) bears to the aggregate number of shares of
Common Stock outstanding on the date of purchase (such number being, the "Board
Percentage"), and (ii) Company shall use its reasonable best efforts to cause
Parent's Designees to be appointed to the Board of Directors of Company
(including using reasonable best efforts to cause relevant directors to resign
and/or increasing the size of the Board of Directors of Company (subject to the
limitations set forth in the certificate of incorporation and bylaws of
Company)). At the request of Parent, Company will use its reasonable best
efforts to cause Parent's Designees to constitute the Board Percentage of each
committee of the Board of Directors of Company, each Board of Directors of each
subsidiary of Company and each committee of each such Board of Directors.
Company's obligations to appoint such Parent's Designees shall be subject in all
instances to compliance with Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder and shall include, provided that all required information
regarding Parent's Designees is provided to Company in advance in a timely
manner by Parent, (i) mailing to its stockholders the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder or (ii)
including such information in the Schedule 14D-9 filed with the SEC and
distributed to the stockholders of Company. Merger Sub will supply to Company in
writing and Parent and Merger Sub will be solely responsible for any information
with respect to either of them, their nominees, officers, directors and
affiliates required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder to be included in the Schedule 14D-9. Notwithstanding the
foregoing, at all times prior to the Effective Time, the parties to this
Agreement shall use their respective reasonable best efforts to ensure that
Company's Board of Directors shall include at least two Continuing Directors (as
defined in Section 1.4(b)). The provisions of this Section 1.4(a) are in
addition to, and shall not limit, any rights that Parent, Merger Sub or any of
their respective affiliates may have as record or beneficial owners of Common
Stock as a matter of Applicable Law with respect to the election of directors of
Company or otherwise.
(b) Following the election or appointment of Parent's Designees
pursuant to this Section 1.4 and prior to the Effective Time, any amendment or
termination of this Agreement, waiver of the obligations or other acts of Parent
or Merger Sub or waiver of Company's rights hereunder shall require the
concurrence of a majority of the Continuing Directors then in office. For
purposes of this Agreement, the term "Continuing Directors" means
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at any time (i) those directors of Company who are directors on the date of this
Agreement and who voted to approve this Agreement, and (ii) such additional
directors of Company who are not related to or affiliated with Parent, Merger
Sub or any of their affiliates and who were designated as "Continuing Directors"
for purposes of this Agreement by a majority of the Continuing Directors in
office at the time of such designation.
ARTICLE II
THE MERGER
Section 2.1 The Merger. On the terms and subject to the conditions set
forth in this Agreement, and in accordance with the DGCL, the Merger shall be
effected and Merger Sub shall be merged with and into Company at the Effective
Time and the separate existence of Merger Sub shall cease and Company shall
continue as the surviving corporation (as such, the "Surviving Corporation").
Section 2.2 Closing. Unless this Agreement shall have been terminated and
the transactions contemplated by this Agreement shall have been abandoned
pursuant to Article VIII, and subject to the satisfaction or waiver of all of
the conditions set forth in Article VII, the closing of the Merger (the
"Closing") will take place as soon as practicable, but in any event within three
business days following satisfaction or waiver (if permissible) of all of the
conditions set forth in Article VII, other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the fulfillment or
waiver (if permissible) of those conditions, at the offices of Xxxxx, Day,
Xxxxxx & Xxxxx in Dallas, Texas, unless another date, time or place is agreed to
in writing by the parties hereto. The date on which the Closing occurs is
referred to as the "Closing Date."
Section 2.3 Effective Time. On the Closing Date (or on such other date as
Parent and Company may agree), the parties hereto shall file with the Secretary
of State of the State of Delaware (the "Delaware State Secretary") a certificate
of merger or, if applicable, a certificate of ownership and merger (as
applicable, the "Certificate of Merger") meeting the requirements of the DGCL
and any other appropriate documents, executed in accordance with the relevant
provisions of the DGCL, and shall make all other filings or recordings required
under the DGCL in connection with the Merger. The Merger shall become effective
upon the filing of the Certificate of Merger with the Delaware State Secretary,
or at such later time as is agreed to by Parent and Company and specified in the
Certificate of Merger (the "Effective Time").
Section 2.4 Effects of the Merger. The Merger shall have the effects set
forth in the applicable provisions of the DGCL. Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time, all property of
Company and Merger Sub shall vest in the Surviving Corporation, and all
liabilities and obligations of Company and Merger Sub shall become liabilities
and obligations of the Surviving Corporation.
Section 2.5 Certificate of Incorporation; Bylaws. At the Effective Time,
(a) the certificate of incorporation of Merger Sub as in effect at the Effective
Time shall, from and after the Effective Time, be the certificate of
incorporation of the Surviving Corporation until thereafter changed or amended
in accordance with the provisions thereof and Applicable Law,
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except that Article FIRST of the certificate of incorporation of the Surviving
Corporation shall be amended to read in its entirety as follows: "The name of
the corporation is "Associated Materials Incorporated;" and (b) the bylaws of
Merger Sub as in effect at the Effective Time shall, from and after the
Effective Time, be the bylaws of the Surviving Corporation until thereafter
changed or amended in accordance with the provisions thereof and Applicable Law.
Section 2.6 Directors; Officers. From and after the Effective Time, (a)
the directors of Merger Sub shall be the directors of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be, and (b) the
officers of Company shall be the officers of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly appointed and qualified, as the case may be.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 3.1 Effect on Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of any holder of shares of Common
Stock or any other shares of capital stock of Company or Merger Sub:
(a) Common Stock of Merger Sub. Each share of common stock of Merger
Sub 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 of the Surviving Corporation.
(b) Cancellation of Treasury Shares and Parent-Owned Shares. Each
share of Common Stock issued and outstanding immediately prior to the Effective
Time that is owned by Company, any subsidiary of Company or otherwise held in
the treasury of Company, or by Parent, Merger Sub or any other subsidiary of
Parent (other than shares in trust accounts, managed accounts, custodial
accounts and the like that are beneficially owned by third parties) shall
automatically be canceled and retired and shall cease to exist, and no cash or
other consideration shall be delivered or deliverable in exchange therefor.
(c) Conversion of Shares. Each share of Common Stock issued and
outstanding immediately prior to the Effective Time (other than shares of Common
Stock to be canceled and retired in accordance with Section 3.1(b) and any
Dissenting Shares (as defined in Section 3.1(d))) shall be converted into the
right to receive the Offer Consideration, payable in cash to the holder thereof,
without any interest thereon (the "Merger Consideration") in accordance with
Section 3.3. Notwithstanding the foregoing, if between the date of this
Agreement and the Effective Time, the outstanding shares of Common Stock shall
have been changed into a different number of shares or a different class, by
reason of any stock dividend, subdivision, reclassification, recapitalization,
split, combination, exchange of shares or similar transaction, the Merger
Consideration shall be correspondingly adjusted on a per-share basis to reflect
such stock dividend, subdivision, reclassification, recapitalization, split,
combination, exchange of shares or similar transaction.
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(d) Dissenting Shares. Notwithstanding anything in this Agreement to
the contrary, but only to the extent required by the DGCL, shares of Common
Stock issued and outstanding immediately prior to the Effective Time held by any
person who has the right to demand, and who properly demands, an appraisal of
such shares of Common Stock ("Dissenting Shares") in accordance with Section 262
of the DGCL (or any successor provision) shall not be converted into a right to
receive the Merger Consideration, but shall only become the right to receive
such consideration as may be determined to be due such holder of Dissenting
Shares pursuant to Delaware law. If, after the Effective Time, any such holder
fails to perfect, loses or withdraws any such right to appraisal, each share of
Common Stock of such holder shall be treated as a share of Common Stock that had
been converted as of the Effective Time into the right to receive the Merger
Consideration in accordance with Section 3.1(c). At the Effective Time, any
holder of Dissenting Shares shall cease to have any rights with respect thereto,
except the rights provided in Section 262 of the DGCL (or any successor
provision) and as provided in the immediately preceding sentence. Company shall
give Parent and Merger Sub (x) prompt notice of any written demands for
appraisal, withdrawals of demands for appraisal and any other related
instruments received by Company after the date of this Agreement and (y) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal. Company shall not voluntarily make any payment with respect to
any demands for appraisal and shall not, except with the prior written consent
of Parent, settle or offer to settle any demand.
Section 3.2 Stock Options; ESPP. At the Effective Time, each holder
of a then-outstanding option to purchase shares of Common Stock under Company's
Amended and Restated 1994 Stock Incentive Plan (the "Incentive Plan") (a true
and correct copy of which, together with forms of all applicable stock option
agreements, has been made available by Company to Parent), whether or not then
exercisable (the "Options"), shall, in settlement thereof, receive for each
share of Common Stock subject to such Option an amount (subject to any
applicable withholding tax) in cash equal to the difference between the Merger
Consideration and the per share exercise price of such Option to the extent such
difference is a positive number (such amount being hereinafter referred to as
the "Option Consideration"). Surviving Corporation will provide instructions to
the holders of Options as soon as practicable after the Effective Time, in order
to permit Option holders to receive the Option Consideration. Payment for
Options shall be made by Surviving Corporation, subject to the terms and
conditions of this Agreement, as soon as practicable after the Effective Time.
Upon receipt of the Option Consideration therefor, each Option shall be deemed
canceled. The surrender of an Option to Surviving Corporation in exchange for
the Option Consideration shall be deemed a release of any and all rights the
holder had or may have had in respect of such Option. Prior to the Effective
Time, Company shall take all action necessary to (i) terminate the Incentive
Plan effective as of the Effective Time, and (ii) cause, pursuant to Section 8
of the Incentive Plan, all outstanding Options to, effective as of the Effective
Time, represent the right, upon exercise, to receive an amount in cash equal to
the Option Consideration and no longer represent the right to receive, upon
exercise, Common Stock or any other equity securities of Company, Parent,
Surviving Corporation or any other person. On December 27, 2001, the Board of
Directors of Company suspended the Company Employee Stock Purchase Plan (the
"ESPP") effective as of December 31, 2001 and as of the date of this Agreement,
no Purchase Period (as that term is defined in the ESPP) is presently pending.
The Company shall take all action necessary to (i) continue the suspension of
the ESPP until the earlier of (A) the Effective Time (and as a result, cause no
Purchase Period to commence), or (B) the termination of this Agreement
8
pursuant to Article VIII, and (ii) cause the ESPP to be terminated effective as
of the Effective Time. Notwithstanding the foregoing, Parent and any employee of
Company or its Significant Subsidiary (as defined in Section 4.1(b)) may, prior
to the Effective Time, agree in writing with Parent that all or a portion of the
Options held by such employee shall, in lieu of being canceled in consideration
for the payment of the Option Consideration, be exchanged for or converted into
options to acquire equity securities of Parent in a manner to be agreed to
between Parent and such employee. In such event, the Surviving Corporation shall
not make any payment of Option Consideration in respect of such converted or
exchanged Options.
Section 3.3 Payment for Shares.
(a) Payment Fund. Concurrently with the Effective Time, Parent shall
deposit, or shall cause to be deposited, with or for the account of a bank or
trust company designated by Parent, which shall be reasonably satisfactory to
Company (the "Paying Agent"), for the benefit of the holders of shares of Common
Stock, cash in an amount sufficient to pay the aggregate Merger Consideration
payable upon the conversion of shares of Common Stock pursuant to Section 3.1(c)
(the "Payment Fund").
(b) Letter of Transmittal; Surrender of Certificates. As soon as
reasonably practicable after the Effective Time, Parent shall instruct the
Paying Agent to mail to each holder of record (other than Company, any
subsidiary of Company, Parent, Merger Sub or any other subsidiary of Parent) of
a certificate or certificates that, immediately prior to the Effective Time,
evidenced outstanding shares of Common Stock (the "Certificates"): (i) a form of
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Paying Agent, and shall be in such form and have such
other provisions as are reasonable and customary in transactions such as the
Merger) 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 Paying Agent together with such letter of
transmittal, duly executed and completed in accordance with the instructions
thereon, and such other customary documents as may be required pursuant to such
instructions, the holder of such Certificate shall be entitled to receive in
exchange therefor cash in an amount equal to the product of (i) the number of
shares of Common Stock theretofore represented by such Certificate and (ii) the
Merger Consideration, and the Certificate so surrendered shall forthwith be
canceled. No interest shall be paid or accrued on any cash payable upon the
surrender of any Certificate. If payment is to be made to a person other than
the person in whose name the surrendered Certificate is registered, it shall be
a condition of payment that the Certificate so surrendered shall be properly
endorsed or otherwise in proper form for transfer and that the person requesting
such payment shall pay any transfer or other taxes required by reason of the
payment to a person other than the registered holder of the surrendered
Certificate or established to the satisfaction of Parent and the Surviving
Corporation that such taxes have been paid or are not applicable.
(c) Cancellation and Retirement of Shares; No Further Rights. As of
the Effective Time, all shares of Common Stock (other than shares of Common
Stock to be canceled in accordance with Section 3.1(b) and other than Dissenting
Shares) issued and outstanding immediately prior to the Effective Time shall
cease to be outstanding and shall automatically be canceled and retired and
shall cease to exist, and each holder of any such shares of Common
9
Stock shall cease to have any rights with respect thereto or arising therefrom
(including without limitation the right to vote), except the right to receive
the Merger Consideration, without interest, upon surrender of such Certificate
in accordance with Section 3.3(b), and until so surrendered, each such
Certificate shall represent for all purposes only the right to receive the
Merger Consideration, without interest. The Merger Consideration paid upon the
surrender of Certificates in accordance with the terms of this Section 3.3 shall
be deemed to have been paid in full satisfaction of all rights pertaining to the
shares of Common Stock theretofore represented by such Certificates.
(d) Investment of Payment Fund. The Paying Agent shall invest the
Payment Fund, as directed by Parent in (i) (A) direct obligations of the United
States of America, (B) obligations for which the full faith and credit of the
United States of America is pledged to provide for the payment of principal and
interest, (C) commercial paper rated the highest quality by either Xxxxx'x
Investors Services, Inc. or Standard & Poor's Corporation, or (D) certificates
of deposit, bank repurchase agreements or bankers' acceptances of commercial
banks with capital exceeding $500 million, in each case, having a maturity not
greater than 90 days (collectively, "Permitted Investments") or (ii) money
market funds that are invested solely in Permitted Investments. Any net earnings
with respect to the Payment Fund shall be the property of and paid over to
Parent as and when requested by Parent.
(e) Termination of Payment Fund. Any portion of the Payment Fund
which remains undistributed to the holders of Certificates one year after the
Effective Time shall be delivered to the Surviving Corporation, upon demand, and
any holders of Certificates that have not theretofore complied with this Section
3.3 shall thereafter look only to the Surviving Corporation, and only as general
creditors thereof, for payment of their claim for any Merger Consideration.
(f) No Liability. None of Parent, Merger Sub, the Surviving
Corporation or the Paying Agent shall be liable to any person in respect of any
payments or distributions payable from the Payment Fund and delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
(g) Withholding Rights. The Surviving Corporation and to the extent
required by Applicable Law, Merger Sub, shall be entitled to deduct and
withhold, or cause to be deducted or withheld, from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Common Stock or
Options such amounts as are required to be deducted and withheld with respect to
the making of such payment under the Internal Revenue Code of 1986, as amended
(the "Code"), or any provision of applicable 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.
(h) Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and the posting by
such person of a bond in such reasonable amount as the Surviving Corporation may
direct as indemnity against any claim which may be made against it with respect
to such Certificate, the Paying Agent will issue, in each case, in exchange
10
for such affidavit and the posting of the bond, the Merger Consideration,
payable in respect thereof pursuant to this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of Company. Company represents
and warrants to Parent and Merger Sub, except as set forth in the Filed SEC
Reports (as defined in Section 4.1(g)) or in the Disclosure Schedule (as defined
in Section 9.3), as follows:
(a) Organization, Standing and Corporate Power. Company is duly
organized, validly existing and in good standing as a corporation under the laws
of the State of Delaware and has the requisite corporate power and authority to
carry on its business as now being conducted. Company is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed does not have, and would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect (as defined in Section 9.3). Company has made available
to Parent complete and correct copies of the certificate of incorporation and
bylaws of Company, in each case as amended to the date of this Agreement.
(b) Significant Subsidiary. Exhibit 21.1 to the 2001 Form 10-K (as
defined in Section 4.1(g)), sets forth the only "Significant Subsidiary" of
Company (defined to be the subsidiaries of Company that are, as of the date of
this Agreement, significant subsidiaries of Company, as defined in Rule 1-02(w)
of Regulation S-X, promulgated by the SEC). All of the capital stock and other
equity interests of the Significant Subsidiary are owned of record and
beneficially by Company. The Significant Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized and has the requisite power and authority to carry on its business as
now being conducted. The Significant Subsidiary of Company is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed does not have, and would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. Company has made available to Parent complete and
correct copies of the governing documents of the Significant Subsidiary of
Company, as amended to the date of this Agreement. All the issued and
outstanding shares of capital stock or other equity owned by Company of or in
the Significant Subsidiary of Company are validly issued, fully paid and
nonassessable and are owned by Company, beneficially and of record, free and
clear of all liens, security interests, charges, pledges, encumbrances or
restrictions of any kind or nature ("Liens"). The Significant Subsidiary of
Company has no (i) outstanding securities convertible into or exchangeable or
exercisable for any shares of its capital stock, there are no outstanding
options, warrants or other rights to purchase or acquire any of its capital
stock, no irrevocable proxies with respect to such shares, and no contracts,
commitments, understandings, arrangements or restrictions by which the
Significant Subsidiary of the Company or Company is bound to issue additional
shares of the capital stock of the Significant Subsidiary of the Company or (ii)
authorized or outstanding
11
bonds, debentures, notes or other indebtedness which entitle the holders to vote
(or convertible or exercisable for or exchangeable into securities which entitle
the holders to vote) with holders of Common Stock on any matter. Except for
Company's Significant Subsidiary, Company does not own, directly or indirectly,
any capital stock or other equity securities of any person. The organizational
documents of the Significant Subsidiary of Company do not contain any provision
limiting or otherwise restricting the ability of Company to control its
Significant Subsidiary.
(c) Authority; Noncontravention. Company has the requisite corporate
power and authority to enter into this Agreement and to perform its obligations
under this Agreement and, subject to the approval of holders of Common Stock
with respect to the consummation of the Merger, to consummate the transactions
contemplated by this Agreement. The execution, delivery and performance of this
Agreement by Company, and the consummation by Company of the transactions
contemplated by this Agreement, have been duly authorized and approved by its
Board of Directors, and no other corporate action on the part of Company is
necessary to authorize the execution, delivery and performance of this Agreement
by Company and the consummation of the transactions contemplated by this
Agreement, subject to the approval of its stockholders as contemplated by
Section 6.1(a). This Agreement has been duly executed and delivered by Company
and, assuming that this Agreement constitutes a valid and binding obligation of
each of Parent and Merger Sub, constitutes a valid and binding obligation of
Company, enforceable against Company in accordance with its terms. The execution
and delivery of this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of this
Agreement will not, (i) conflict with any of the provisions of the certificate
of incorporation or bylaws of Company or the organizational documents of its
Significant Subsidiary, in each case as amended to the date of this Agreement,
(ii) conflict with, result in a breach of or default under (with or without
notice or lapse of time, or both) any contract, agreement, indenture, mortgage,
deed of trust, lease or other instrument to which Company is a party or by which
Company or its Significant Subsidiary or any of their respective assets is bound
or subject, or (iii) subject to the governmental filings and other matters
referred to in Section 4.1(d), contravene any Applicable Law or any order, writ,
judgement, decree, determination or award currently in effect that is applicable
to Company or its Significant Subsidiary, which, in the case of clauses (ii) and
(iii) above has, or would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
(d) Consents and Approvals. No consent, approval or authorization
of, or declaration or filing with, or notice to, any domestic or foreign
governmental agency or regulatory authority (a "Governmental Entity"), is
required by or with respect to Company or its Significant Subsidiary in
connection with the execution and delivery of this Agreement by Company or the
consummation by Company of the transactions contemplated by this Agreement,
except for (i) compliance with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), (ii) compliance with any applicable
requirements of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Securities Act"), and the Exchange Act,
(iii) the filing of the Certificate of Merger with the Delaware State Secretary
and appropriate documents with the relevant authorities of other states in which
Company is qualified to do business and (iv) any other consents, approvals,
authorizations, filings or notices which, if not made or obtained, does not
have, and would not
12
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(e) Compliance with Laws. Neither Company nor its Significant
Subsidiary is in violation of any order of any Governmental Entity or any
Applicable Law, except where such violation does not have, and would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(f) Capital Structure. The authorized capital stock of Company
consists solely of (i) 15,000,000 shares of Common Stock, and (ii) 100,000
shares of preferred stock, par value $0.01 per share, of Company ("Preferred
Stock"). At the close of business on March 15, 2002 (the "Capital Structure
Date"): (i) 6,774,027 shares of Common Stock were issued and outstanding, (ii)
no shares of Preferred Stock were issued and outstanding, (iii) 558,000 shares
of Common Stock were reserved for issuance pursuant to outstanding Options
granted under the Incentive Plan, and (iv) 1,078,476 shares of Common Stock were
held by Company in its treasury. Except as set forth in the first sentence of
this Section 4.1(f), at the close of business on the Capital Structure Date, no
shares of capital stock or other equity securities of Company were issued,
reserved for issuance or outstanding. Since the close of business on the Capital
Structure Date, no shares of capital stock or other equity securities of Company
have been issued or reserved for issuance or become outstanding, other than
shares of Common Stock described in clause (iii) of the first sentence of this
Section 4.1(f) that have been issued upon the exercise of outstanding Options
granted under the Incentive Plan. All outstanding shares of capital stock of
Company are duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights. Except as described in this Section 4.1(f),
Company does not have outstanding any securities convertible into or
exchangeable or exercisable for any shares of its capital stock, there are no
outstanding options, warrants or other rights to purchase or acquire any of its
capital stock, and there are no contracts, commitments, understandings,
arrangements or restrictions by which Company is bound to issue additional
shares of its capital stock. Company has no authorized or outstanding bonds,
debentures, notes or other indebtedness that entitle the holders to vote (or
convertible or exercisable for or exchangeable into securities that entitle the
holders to vote) with holders of Common Stock on any matter.
(g) Financial Statements; SEC Reports. Company has previously made
available to Parent and Merger Sub true and complete copies of (i) its Annual
Report on Form 10-K for the fiscal year ended December 31, 2000 and its Annual
Report on Form 10-K for the fiscal year ended December 31, 2001 (the "2001 Form
10-K") filed by Company with the SEC, (ii) proxy statements relating to all of
Company's meetings of stockholders (whether annual or special) held or scheduled
to be held since December 31, 2000 and (iii) each other registration statement,
proxy or information statement, quarterly report on Form 10-Q or current report
on Form 8-K filed since December 31, 2000 by Company with the SEC (such items
referenced in (i) through (iii) whether filed before, on or after the date of
this Agreement, "SEC Reports"). For the purposes of this Agreement, the term
"Filed SEC Reports" means only those SEC Reports filed and publicly available
prior to the date of this Agreement. Since December 31, 2000, Company has
complied in all material respects with its SEC filing obligations under the
Exchange Act and the Securities Act. Except as set forth in or amended by a
subsequent Filed SEC Report, the financial statements and related schedules and
notes thereto of Company contained in the SEC Reports were prepared in
accordance with accounting principles generally
13
accepted in the United States ("GAAP") (except, in the case of interim unaudited
financial statements which have been prepared in all material respects in
accordance with Rule 10-01 of Regulation S-X) applied on a consistent basis
except as noted therein, and present fairly in all material respects the
consolidated financial position of Company and its consolidated subsidiaries as
of the dates thereof and the consolidated results of their operations and their
cash flows for the periods then ended, subject (in the case of interim unaudited
financial statements which have been prepared in all material respects in
accordance with Rule 10-01 of Regulation S-X) to normal year-end audit
adjustments, and, except as set forth in or amended by a subsequent Filed SEC
Report, such financial statements complied as to form as of their respective
dates in all material respects with applicable rules and regulations of the SEC.
Each SEC Report was prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as applicable, and did not, as of the date
of effectiveness in the case of a registration statement, the date of mailing in
the case of proxy statements or the date of filing in the case of any other SEC
Reports, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading, except as set forth in or amended by a subsequent Filed SEC Report.
(h) Absence of Certain Changes or Events. Since December 31, 2001
there has not been (i) any declaration, setting aside or payment of any dividend
or other distribution in respect of the capital stock of Company or any
redemption or other acquisition by Company or its Significant Subsidiary of any
of the capital stock of Company or its Significant Subsidiary; (ii) any issuance
by Company, or agreement or commitment of Company to issue, any shares of Common
Stock or securities convertible into or exchangeable for shares of Company
Common Stock, except for the issuance of shares of Common Stock in accordance
with the terms of outstanding Options and shares of Common Stock issued pursuant
to the ESPP with respect to the Purchase Period under the ESPP that expired on
December 31, 2001; (iii) any change by Company in accounting methods, principles
or practices except as required by Applicable Law or GAAP; (iv) any material
increase in wages or bonus, severance, profit sharing, retirement, deferred
compensation, change of control, insurance or other compensation or benefits or
any new compensation or benefit plans or arrangements or any amendments to any
Benefit Plans (as defined in Section 4.1(j)) existing on December 31, 2001, in
each case for officers of Company or its Significant Subsidiary, other than
bonus payments made in the ordinary course of business consistent with past
practice and such other actions taken in the ordinary course of business or
otherwise disclosed to Parent in writing prior to the date of this Agreement;
(v) any material transaction or any material agreement outside the ordinary
course of business; (vi) any Tax election or settlement and/or compromise of any
Tax liability, preparation of any Tax Returns (as defined in Section 4.1(k)) or
incurrence of any liability for Taxes other than in the ordinary course of
business or filing of a claim for refund of an amount of Taxes, in each case,
material to Company and its subsidiaries, taken as a whole; or (vii) any
agreement or commitment, whether in writing or otherwise, to take any action
described in Section 4.1(h)(i) through 4.1(h)(vi). During the period beginning
on January 1, 2002 and ending on the date of this Agreement, there has not been
any change or development that has had a Company Material Adverse Effect. Since
December 31, 2001, Company has conducted its business in all material respects
in the ordinary course, consistent with past practice, except as contemplated by
the Filed SEC Reports and this Agreement.
14
(i) Disclosure Documents.
(i) Each document required to be filed by Company with the SEC
in connection with the transactions contemplated by this Agreement (the "Company
Disclosure Documents") including, without limitation, the Schedule 14D-9, the
proxy or information statement of Company (the "Company Proxy Statement"), if
any, to be filed with the SEC in connection with the Merger, and any amendments
or supplements thereto, will, when filed, comply as to form in all material
respects with the applicable requirements of the Exchange Act.
(ii) At the time the Company Proxy Statement or any amendment
or supplement thereto is first mailed to stockholders of Company, at the time
such stockholders vote on adoption of this Agreement and approval of the Merger
and at the Effective Time, the Company Proxy Statement, as supplemented or
amended, if applicable, will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading. At the time of the filing of any Company Disclosure Document other
than the Company Proxy Statement, at the time of any distribution thereof and,
except as subsequently amended or supplemented, throughout the remaining
pendency of the Offer, each Company Disclosure Document will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The representations and warranties
contained in paragraphs (i) and (ii) of this Section 4.1(i) will not apply to
statements or omissions included in the Company Disclosure Documents (including
the Company Proxy Statement, if any), based upon information furnished to
Company in writing by Parent or Merger Sub specifically for use therein.
(iii) The information with respect to Company that Company
furnishes to Parent or Merger Sub in writing specifically for use in the Offer
Documents will not, at the time of the filing thereof, at the time of any
distribution thereof and, except as subsequently amended or supplemented,
throughout the remaining pendency of the Offer, 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 light of the
circumstances under which they were made, not misleading.
(j) Employee Benefit Matters. As used in this Agreement, the
term "Benefit Plan" means each employee benefit plan and each other material
benefit, severance, termination, retention, change in control, stock option,
stock purchase and stock-based or compensation arrangement, plan or agreement
covering employees of Company or its Significant Subsidiary or to which Company
or its Significant Subsidiary contributes or is obligated to contribute or has
any unsatisfied liability, other than any plan or arrangement mandated by law
and other than a multiemployer plan as defined in Sections 3(37) and 4001(a)(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")
("Multiemployer Plan"). The Benefit Plans and the Multiemployer Plans are listed
in Schedule 4.1(j) of the Disclosure Schedule. Correct and complete copies of
the Benefit Plans, together with, to the extent applicable, all current summary
plan descriptions, the annual report on Form 5500 (including attachments
thereto) for each of the last three plan years, the most recent actuarial
valuation report and the most recent Internal Revenue Service determination
letter, have been made available to Parent.
15
To the extent applicable, each Benefit Plan intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified, and to Company's knowledge, nothing has occurred since that
would adversely affect such qualification. In addition: (i) each Benefit Plan
has been maintained and administered in compliance with its terms and with all
Applicable Laws, including, without limitation, ERISA and the Code, except for
any failure to so comply that could not, individually, or in the aggregate,
reasonably be expected to result in a material liability of Company; (ii) there
are no pending, nor has Company received written notice of any threatened,
claims, audits, investigations or administrative proceedings against or
otherwise involving any of the Benefit Plans (other than routine claims for
benefits that could not, individually, or in the aggregate, reasonably be
expected to result in a material liability of Company); (iii) all contributions
required to be made as of the date of this Agreement to the Benefit Plans have
been made or provided for; (iv) no Benefit Plan covered by Title IV of ERISA has
been terminated, and no proceedings have been instituted to terminate or appoint
a trustee under Title IV of ERISA to administer any Benefit Plan; (v) no
reportable event as defined in Section 4043 of ERISA has occurred with respect
to any Benefit Plan covered by Title IV of ERISA; (vi) no Benefit Plan subject
to Section 412 of the Code or Section 302 of ERISA has incurred any accumulated
funding deficiency within the meaning of Section 412 of the Code or Section 302
of ERISA; and (vii) none of Company, its Significant Subsidiary or, to the
knowledge of Company, any other disqualified person or party in interest (as
such terms are defined in Section 4975(e)(2) of the Code and Section 3(14) of
ERISA, respectively) has engaged in any transaction, act or omission to act in
connection with any Benefit Plan that could reasonably be expected to result in
the imposition of a penalty or fine pursuant to Section 502 of ERISA, damages
pursuant to Section 409 of ERISA or a tax pursuant to Section 4975 of the Code,
except for any penalty, fine, damages or tax that could not, individually or in
the aggregate, reasonably be expected to result in a material liability of
Company. Neither Company nor its Significant Subsidiary has contributed to, or
has been required to contribute to, any Multiemployer Plan. As of the date of
this Agreement, neither Company nor its Significant Subsidiary has incurred any
unsatisfied withdrawal liability under Part 1 of Subtitle E of Title IV of ERISA
to any Multiemployer Plan. The number of employees for which Company and its
Significant Subsidiary contribute to Multiemployer Plans does not exceed 50
employees as of the date of this Agreement, and the aggregate contributions of
Company and its Significant Subsidiary to all such Multiemployer Plans for the
calendar year 2001 did not exceed $150,000. The execution of this Agreement and
the consummation of the transactions contemplated hereby will not (either alone
or upon the occurrence of any additional acts or subsequent event) result in any
"excess parachute payment" for purposes of Section 280G or 4999 of the Code.
Except for continuation health coverage required under Applicable Law, Company
has no present or future obligation to make any material payment to or under any
"employee welfare plan" (as defined in Section 3(1) of ERISA) which provides
benefits to retirees or to otherwise provide post-employment or retiree health,
life insurance or other welfare benefits.
(k) Taxes.
(i) Company and its Significant Subsidiary have each timely
filed all material federal, state, local and foreign Tax Returns (as defined in
this Section 4.1(k)) required to be filed by it, or on its behalf, for taxable
years or other taxable periods ending on or prior to the Offer Completion Date,
taking into account any applicable extensions, and all such Tax
16
Returns are correct and complete in all respects material to Company and its
subsidiaries, taken as a whole.
(ii) All Taxes and Tax liabilities material to Company and its
subsidiaries, taken as a whole, and due by or with respect to the income, assets
or operations of Company and its Significant Subsidiary for all taxable years or
other taxable periods that end on or before the Offer Completion Date and, with
respect to any taxable year or other taxable period beginning on or before and
ending after the Offer Completion Date, the portion of such taxable year or
period ending on and including the Offer Completion Date, have been timely paid
or will be timely paid in full on or prior to the Offer Completion Date or
accrued and adequately disclosed and fully provided for in the SEC Reports to
the extent and only to the extent required with respect to such periods or
portions thereof in accordance with GAAP.
(iii) As of the date of this Agreement, neither Company nor
its Significant Subsidiary (A) has any knowledge of any pending audit or other
examination of Taxes by the tax authorities of any nation, state or locality or
(B) has received any written notice from any taxing authority relating to any
issue that could affect the Tax liability of Company and/or its Significant
Subsidiary in a manner material to Company and its subsidiaries, taken as a
whole.
(iv) As of the date of this Agreement, neither Company nor its
Significant Subsidiary (A) has entered into an agreement or waiver or been
requested in writing to enter into an agreement or waiver extending any statute
of limitations relating to the payment or collection of Taxes of Company or its
Significant Subsidiary that has not expired or (B) is presently contesting the
Tax liability of Company or its Significant Subsidiary before any court,
tribunal or agency.
(v) Neither Company nor its Significant Subsidiary has been
included in any "consolidated," "unitary" or "combined" Tax Return provided for
under the law of the United States, any foreign jurisdiction or any state or
locality with respect to Taxes for any taxable period for which the statute of
limitations has not expired.
(vi) As of the date of this Agreement, no written claim has
been made since January 1, 2000, by any taxing authority in a jurisdiction where
Company or its Significant Subsidiary does not file Tax Returns that Company or
its Significant Subsidiary is or may be subject to material taxation by that
jurisdiction.
(vii) There are no tax sharing, allocation, indemnification or
similar agreements in effect as between Company or its Significant Subsidiary or
any predecessor or affiliate thereof and any other party under which Company,
Parent or the Surviving Corporation or any subsidiary thereof could be liable
for any Taxes or other claims of any party.
(viii) Neither Company nor its Significant Subsidiary has
applied for, been granted, or agreed to any accounting method change for which
it will be required to take into account any material adjustment under Section
481 of the Code or any similar provision of the Code or the corresponding tax
laws of any nation, state or locality.
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(ix) There are no material Liens for Taxes on the assets of
Company or its Significant Subsidiary except for Liens for current Taxes not yet
due or that are being contested in good faith.
(x) All Taxes material to Company and its subsidiaries, taken
as a whole, and that Company or its Significant Subsidiary has been required to
collect or withhold have been duly collected or withheld and, to the extent
required when due, have been or will be duly and timely paid to the proper
taxing authority.
As used in this Agreement, (i) "Tax" or "Taxes" shall mean all
taxes, fees, levies, assessments or other governmental charges imposed by the
United States, or any state, local or foreign government or subdivision or
agency thereof including, without limitation, income, gross receipts, excise,
real and personal property, sales, use, transfer, license, employment, payroll,
franchise taxes, profits, capital gains, capital stock, value-added, occupation,
excise, severance, windfall profits, stamp, social security, withholding and
other taxes, assessments, charges, duties, fees, levies or other governmental
charges of any kind whatsoever (whether payable directly or by withholding and
whether or not requiring the filing of a Tax Return), all estimated taxes,
deficiency assessments, additions to tax, penalties and interest and shall
include any liability for such amounts as a result either of being a member of a
combined, consolidated, unitary or affiliated group or of a contractual
obligation to indemnify any person and (ii) "Tax Return" shall mean any report,
return or other information (including forms, statements, elections,
declarations, disclosures, schedules and estimates) required to be supplied to
any taxing authority in connection with Taxes.
(l) Litigation. As of the date of this Agreement, there are no
actions, suits or proceedings at law or in equity, or any arbitration or any
administrative or other proceeding (or to Company's knowledge, any
investigations) pending, publicly announced or, to Company's knowledge,
threatened in writing against or affecting Company or its Significant
Subsidiary, or any of their respective properties or rights and there are no
orders, writs, judgments, injunctions, decrees, determinations or awards of any
Governmental Entity outstanding against Company or its Significant Subsidiary
that, in each case, have, or would reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
(m) Labor and Employment Matters. Neither Company nor its
Significant Subsidiary is a party to, or bound by, any collective bargaining
agreement or other contract, agreement or understanding with a labor union or
labor organization. Except for such matters which do not have, and would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, as of the date of this Agreement, there is no (i)
unfair labor practice, labor dispute (other than routine individual grievances)
or labor arbitration proceeding pending or, to the knowledge of Company,
threatened in writing against Company or its Significant Subsidiary relating to
their respective businesses, (ii) to the knowledge of Company, activity or
proceeding by a labor union or representative thereof to organize any employees
of Company or its Significant Subsidiary, or (iii) lockouts, strikes, slowdowns,
work stoppages or threats thereof by or with respect to such employees.
(n) Permits. Company and its Significant Subsidiary are each in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions,
18
consents, certificates, approvals and orders of any Governmental Entity or court
necessary for Company and its Significant Subsidiary to own, lease and operate
their respective properties or to carry on their respective business as it is
now being conducted (the "Company Permits"), except where the failure to have
any of the Company Permits does not have, and would not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect. As
of the date of this Agreement, no suspension or cancellation of any of the
Company Permits is pending or, to Company's knowledge threatened in writing,
except where the suspension or cancellation of any of the Company Permits,
individually or in the aggregate, does not have, and would not reasonably be
expected to have a Company Material Adverse Effect.
(o) Environmental Compliance. Except for any non-compliance which
does not have, and would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect, (i) Company and its
Significant Subsidiary are each in compliance with all Applicable Laws relating
to Environmental Matters (as defined in this Section 4.1(o)); (ii) Company has
obtained, and is in compliance with, all permits, licenses, authorizations,
registrations and other governmental consents required by Applicable Laws for
the use, storage, treatment, transportation, release, emission and disposal of
raw materials, by-products, wastes and other substances used or produced by or
otherwise relating to the operations of Company; and (iii) to Company's
knowledge, there are no past or present events, conditions, or activities by
Company or relating to any property owned or operated by Company or its
Significant Subsidiary that would reasonably be expected to prevent compliance
or continued compliance with any Applicable Law relating to Environmental
Matters or that would reasonably be expected to give rise to any Environmental
Liability (as defined in this Section 4.1(o)); and (iv) as of the date of this
Agreement, there are no claims, proceedings or actions against Company or its
Significant Subsidiary by any Governmental Entity or other person pending or, to
the knowledge of Company, threatened with respect to Environmental Matters, nor,
to the knowledge of Company, are there any investigations by any Governmental
Entity involving Company or its Significant Subsidiary with respect to
Environmental Matters.
As used in this Agreement, the term "Environmental Matters" means any
matter arising out of or relating to pollution or protection of the environment,
including matters relating to emissions, discharges, disposal releases or
threatened releases of pollutants, contaminants, or hazardous or toxic materials
or wastes into ambient air, surface water, ground water, or land. "Environmental
Liability" shall mean any liability or obligation arising under any Applicable
Law (including, without limitation, any liability for personal injury, property
damage or remediation) that results from, or is based upon or related to, the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened release
into the environment, of any pollutant, contaminant, chemical, or industrial,
toxic or hazardous substance or waste. "Applicable Law" shall mean any statute,
ordinance, rule, regulation, judgment, order or decree applicable to Company.
(p) Material Contracts. (i) There have been made available to Parent
true, correct and complete copies of all of the following executory contracts to
which Company or its Significant Subsidiary is a party or by which either is
bound as of the date of this Agreement (collectively, the "Material Contracts"):
(A) contracts with any current or former officer or director of Company or its
Significant Subsidiary; (B) contracts (x) for the sale of any of the material
assets or any material amount of assets of Company or its Significant
Subsidiary, other
19
than contracts entered into in the ordinary course of business, or (y) for the
grant to any person of any preferential rights to purchase any of its material
assets or any material amount of its assets; (C) contracts that restrict Company
or its Significant Subsidiary from competing in any line of business or with any
person in any geographical area in any material manner; (D) indentures, credit
agreements, security agreements, mortgages, guarantees and promissory notes, and
other contracts relating to the borrowing of money involving amounts in excess
of $1,000,000; (E) contracts involving (x) the acquisition, merger or purchase
of all or substantially all of the assets or business of any person, or (y) the
purchase or sale of assets, or a series of purchases and sales of assets,
involving aggregate consideration of $1,000,000 or more, in each case, other
than contracts entered into in the ordinary course of business; (F) contracts
with any affiliate that would be required to be disclosed under Item 404 of
Regulation S-K under the Securities Act; (G) contracts that are material to
Company and contain a "change in control" or similar provision; and (H)
contracts relating to any material joint venture, partnership, strategic
alliance or similar arrangement.
(ii) As of the date of this Agreement, all of the Material
Contracts are in full force and effect and are the legal, valid and binding
obligations of Company or its Significant Subsidiary, enforceable against it or
the Significant Subsidiary in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity). Neither Company nor its Significant Subsidiary is in breach or default
in any material respect under any Material Contract nor, to Company's knowledge,
is any other party to any Material Contract in breach or default thereunder in
any material respect, except for such breaches or defaults that do not have, and
would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
(q) Section 203 of the DGCL. The Board of Directors of Company has
taken all action necessary so that the provisions of Section 203 of the DGCL
applicable to a "business combination" (as defined in Section 203 of the DGCL)
will not apply to the Offer, the Merger and the execution, delivery or
performance of this Agreement and the Tender Agreement or the consummation of
any of the transactions contemplated hereby and thereby. Except for Section 203
of the DGCL (which has been rendered inapplicable), no other takeover statute or
similar statute or regulation of any state is applicable to the Offer, the
Merger, the Tender Agreement or this Agreement (including all of the
transactions contemplated hereby or thereby).
(r) Required Vote. The affirmative vote of the holders of a majority
of the issued and outstanding Common Stock entitled to vote hereon is the only
vote of any class of capital stock of Company required by the DGCL or the
certificate of incorporation or the bylaws of Company to adopt this Agreement
and approve the transactions contemplated hereby.
(s) Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Company (other than the Financial Advisor), which arrangements have
been disclosed in writing to Parent prior to the date of this Agreement.
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(t) Opinion of Financial Advisor. The Board of Directors of Company
has received the opinion of the Financial Advisor, a complete and correct signed
copy of which will be delivered to Parent solely for informational purposes
promptly after receipt of a written copy thereof by Company, to the effect that,
as of the date of this Agreement, the Offer Consideration to be received in the
Offer and the Merger Consideration to be received in the Merger by the holders
of Common Stock (other than Parent, Merger Sub and their respective affiliates)
is fair, from a financial point of view, to such holders.
(u) Title to Properties; Encumbrances. Company and its Significant
Subsidiary have good, valid and marketable title to, or, in the case of leased
properties and assets, valid leasehold interests in, (i) all of the material
tangible properties and assets (real and personal) reflected in the consolidated
balance sheet of Company as of December 31, 2001, included in the 2001 Form
10-K, except as indicated in the notes thereto and except for properties and
assets that have been sold or otherwise disposed of in the ordinary course of
business after such date, and except where the failure to have such good, valid
and marketable title or valid leasehold interest does not have, and would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, and (ii) all of the material tangible properties and
assets acquired by Company and its Significant Subsidiary since December 31,
2001 and not otherwise disposed of, in each case, free and clear of all Liens,
except for (A) Liens reflected or reserved against in the 2001 Form 10-K, (B)
Liens listed or described in the title reports relating to such properties, (C)
mechanics', carriers', workers', repairmen's or other Liens arising or incurred
in the ordinary course of business, (D) Liens for Taxes, assessments and other
similar governmental charges which are not due and payable or which may
thereafter be paid without penalty, (E) easements, covenants, zoning, land use,
rights-of-way, and other encumbrances or other restrictions and other
imperfections of title which do not materially impair the marketability or the
continued use of the property subject thereto as presently conducted, and (F)
such Liens that do not have, and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
(v) Insurance. Company and its Significant Subsidiary maintain
insurance policies of the type and in such amount as Company reasonably believes
is appropriate for the conduct of the business or the ownership and operation of
the assets of Company and its Significant Subsidiary. All such insurance
policies are in full force and effect. Neither Company nor its Significant
Subsidiary has received any notice of cancellation or modification in coverage
amounts of any such insurance policies.
Section 4.2 Representations and Warranties of Parent and Merger Sub.
Parent and Merger Sub jointly and severally represent and warrant to Company as
follows:
(a) Organization, Standing and Corporate Power. Each of Parent and
Merger Sub is a corporation duly organized, validly existing and in corporate
good standing under the laws of the State of Delaware and has the requisite
corporate power and authority to carry on its business as now being conducted.
Each of Parent and Merger Sub is duly qualified or licensed to do business and
is in good standing in each jurisdiction in which the nature of its business or
the ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed does not, and would not reasonably be expected to materially and
adversely affect Parent's or Merger Sub's ability to
21
timely perform the transactions contemplated by this Agreement (including the
making and consummation of the Offer and the consummation of the Merger) or the
legality or validity of this Agreement (a "Parent Material Adverse Effect").
Each of Parent and Merger Sub has delivered to Company complete and correct
copies of its certificate of incorporation and bylaws, in each case, as amended
to the date of this Agreement.
(b) Authority; Noncontravention. Parent and Merger Sub have the
requisite corporate power and authority to enter into this Agreement and the
Tender Agreement, to perform their respective obligations under this Agreement
and the Tender Agreement and to consummate the transactions contemplated by this
Agreement and the Tender Agreement. The execution, delivery and performance of
this Agreement and the Tender Agreement by Parent and Merger Sub and the
consummation by Parent and Merger Sub of the transactions contemplated by this
Agreement and the Tender Agreement have been duly authorized by the Boards of
Directors of each of Parent and Merger Sub and have been duly approved by Parent
as sole stockholder of Merger Sub, and no other corporate proceedings on the
part of Parent or Merger Sub (other than in connection with a short-form merger
under Section 253 of the DGCL) are necessary to authorize this Agreement, the
Tender Agreement or to consummate the transactions contemplated by this
Agreement and the Tender Agreement. This Agreement and the Tender Agreement have
each been duly executed and delivered by each of Parent and Merger Sub and,
assuming this Agreement constitutes a valid and binding obligation of Company,
constitute valid and binding obligations of each of Parent and Merger Sub,
enforceable against each such party in accordance with their respective terms.
None of the execution and delivery of this Agreement or the Tender Agreement,
the consummation of the transactions contemplated by this Agreement and the
Tender Agreement or compliance with the provisions of this Agreement and the
Tender Agreement, (i) conflicts with any of the provisions of the certificate of
incorporation or bylaws of Parent or Merger Sub, in each case as amended to the
date of this Agreement, (ii) conflicts with, result in a breach of or default
under (with or without notice or lapse of time, or both) any contract (including
the Commitment Letter (as defined in Section 4.2(e))), agreement, indenture,
mortgage, deed of trust, lease or other instrument to which Parent or Merger Sub
is a party or by which Parent or Merger Sub or any of their respective assets is
bound or subject, or (iii) subject to the governmental filings and other matters
referred to in Section 4.2(c), contravenes any domestic or foreign law, rule or
regulation, or any order, writ, judgment, injunction, decree, determination or
award currently in effect that is applicable to Parent or Merger Sub, which, in
the case of clauses (ii) and (iii) above, has, or would reasonably be expected
to have, individually or in the aggregate, a Parent Material Adverse Effect.
(c) Consents and Approvals. No consent, approval or authorization
of, or declaration or filing with, or notice to, any Governmental Entity is
required by or with respect to Parent or Merger Sub in connection with the
execution and delivery of this Agreement and the Tender Agreement by Parent or
Merger Sub or the consummation by Parent or Merger Sub, as the case may be, of
any of the transactions contemplated by this Agreement and the Tender Agreement,
except for (i) compliance with the HSR Act, (ii) compliance with any applicable
requirements of the Securities Act and the Exchange Act, (iii) the filing of the
Certificate of Merger with the Delaware State Secretary, and (iv) any other
consents, approvals, authorizations, filings or notices which, if not made or
obtained, does not have, and would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect.
22
(d) Disclosure Documents.
(i) The information with respect to Parent, Merger Sub and its
other affiliates that Parent furnishes to Company in writing specifically for
use in any Company Disclosure Document will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading (i) in the case of the
Company Proxy Statement, if any, at the time the Company Proxy Statement or any
amendment or supplement thereto is first mailed to stockholders of Company, at
the time the stockholders vote on adoption of this Agreement and at the
Effective Time, and (ii) in the case of any Company Disclosure Document other
than the Company Proxy Statement, at the time of the filing thereof, at the time
of any distribution thereof and, except as subsequently amended or supplemented,
throughout the remaining pendency of the Offer.
(ii) The Offer Documents will comply as to form in all
material respects with the applicable requirements of the Exchange Act and will
not, at the time of the filing thereof, at the time of any distribution thereof
and, except as subsequently amended or supplemented, throughout the remaining
pendency of the Offer contain any untrue statement of material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading; provided that no representation is made by Parent or
Merger Sub with respect to statements or omissions in the Offer Documents based
upon information furnished to Parent or Merger Sub in writing by Company
specifically for use therein.
(e) Financing. Parent has obtained a commitment letter (the
"Commitment Letter") (a true, complete and executed copy of which has been
delivered to Company) from UBS AG, Stamford Branch; UBS Warburg LLC; Credit
Suisse First Boston, Cayman Islands Branch; Canadian Imperial Bank of Commerce;
and CIBC World Markets Corp. (collectively, "Lender") pursuant to which Lender
has agreed to provide Parent and Merger Sub, subject to the conditions set forth
in the Commitment Letter and the market-flex provisions set forth in the fee
letter referred to in the Commitment Letter and no other conditions, funds that,
together with the Equity Commitment (as defined in this Section 4.2(e)) and cash
on-hand of Company at the Effective Time (in such amount as contemplated by the
Commitment Letter), would enable Parent and Merger Sub to timely perform their
obligations to (i) pay in full (A) the aggregate Offer Consideration, (B) the
aggregate Merger Consideration, (C) the aggregate Option Consideration, and (D)
all fees and expenses payable by Parent, Merger Sub and the Surviving
Corporation in connection with this Agreement and the transactions contemplated
by this Agreement and (ii) satisfy and discharge the aggregate principal amount
of the Notes (as defined in Section 6.10), together with all accrued and unpaid
interest and any required premium or prepayment penalty thereon, pursuant to the
Notes Tender Offer (as defined in Section 6.10) as contemplated by Section 6.10
and the Commitment Letter (such aggregate debt financing to satisfy clauses (i)
and (ii) obtained pursuant to the Commitment Letter or any alternate financing
obtained by Parent from one or more other sources on terms reasonably
satisfactory to Company, the "Transaction Financing"). The Commitment Letter is
in full force and effect and has not been amended. Parent and Merger Sub are not
aware of any fact or occurrence that makes any of the assumptions set forth in
the Commitment Letter unreasonable or would result in any of the conditions set
forth in the Commitment Letter not being satisfied prior to the Outside Date.
23
Lender has not advised either Parent or Merger Sub or any of their respective
affiliates of any reason why the financing contemplated by the Commitment Letter
will not be consummated in accordance with its terms. All commitment and other
fees required to be paid pursuant to the Commitment Letter and the fee letter
referred to therein on or prior to the date of this Agreement have been paid.
The total equity financing to be provided to Parent and Merger Sub that is
contemplated by the Commitment Letter (the "Equity Commitment") will consist of
equity contributed to Parent by private equity funds managed by Harvest
Partners, Inc. and investors in such private equity funds. As of the date of
this Agreement, such private equity funds and such investors have, collectively,
and at all times prior to the Effective Time, will have, collectively, funds
readily available to them, subject to no conditions (other than (1) advance
notice requirements, (2) the conditions in favor of Parent and Merger Sub set
forth in this Agreement and Exhibit A to this Agreement and (3) other
non-material conditions capable of being satisfied prior to the Offer Completion
Date), to fund the Equity Commitment.
(f) Parent-Owned Shares. As of the date of this Agreement, Parent,
Merger Sub and their respective affiliates do not own any shares of Common
Stock.
(g) Interim Operations of Parent and Merger Sub. Each of Parent and
Merger Sub was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement, and neither Parent nor Merger Sub has engaged in
any business activities or conducted any operations other than in connection
with such transactions.
ARTICLE V
CONDUCT OF BUSINESS OF COMPANY
Section 5.1 Conduct of Business of Company. Except as expressly provided
for in this Agreement, during the period commencing on the date of this
Agreement and ending on the earliest of (a) such time as Parent's Designees
shall comprise a majority of the members of the Board of Directors of Company,
(b) the Effective Time, and (c) termination of this Agreement pursuant to
Section 8.1, Company and its Significant Subsidiary shall act and carry on their
respective operations only in the ordinary course of business consistent with
past practice and, to the extent consistent therewith, use reasonable efforts to
preserve intact their respective business organizations, keep available the
services of their respective key officers and employees and preserve the
goodwill of those engaged in significant business relationships with them. To
that end, without limiting the generality of the foregoing, except as expressly
provided for in this Agreement or in the Disclosure Schedule, neither Company
nor its Significant Subsidiary shall without the prior written consent of
Parent:
(i) (A) declare, set aside or pay any dividends on, or make
any other distributions (whether in cash, securities or other property) in
respect of, any of its outstanding capital stock (other than regular quarterly
dividends not in excess of $.05 per share), (B) split, combine or reclassify any
of its outstanding capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
outstanding capital stock, or (C) purchase, redeem or otherwise acquire any
shares of outstanding capital stock or any rights, warrants or options to
acquire any such shares, except, in the case of this clause (C),
24
for the acquisition of shares of Common Stock from holders of Options in full or
partial payment of the exercise price payable by such holder upon exercise of
Options;
(ii) issue, sell, grant, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any securities
convertible into or exchangeable for, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible or exchangeable
securities, other than upon the exercise of Options outstanding on the date of
this Agreement;
(iii) amend its certificate of incorporation or bylaws (or
comparable governing documents), except for any amendment required in connection
with the performance by Company or its Significant Subsidiary of its obligations
under this Agreement including but not limited to its obligations under Section
1.4;
(iv) acquire, make any investment in, or make any capital
contributions to, any person or entity other than in the ordinary course of
business;
(v) transfer, sell, lease, license, guarantee, mortgage,
pledge or otherwise dispose or encumber any of its properties or assets that are
material to its business, except in the ordinary course of business consistent
with past practice, or otherwise in accordance with the transactions
contemplated by this Agreement;
(vi) (A) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, other than borrowings under
existing credit facilities (or extension of such credit facilities) described in
the Filed SEC Reports or otherwise in accordance with the transactions
contemplated by this Agreement, including the Transaction Financing, or (B) make
any loans or advances to any other person or entity, other than routine advances
to employees consistent with past practice;
(vii) grant or agree to grant to any officer of Company any
increase in wages or bonus, severance, profit sharing, retirement, deferred
compensation, insurance or other compensation or benefits, or establish any new
compensation or benefit plans or arrangements, or amend or agree to amend any
existing Benefit Plans, except as may be required under existing agreements or
by law or pursuant to the normal severance policies or practices of Company as
in effect on the date of this Agreement, or increases in salary or wages payable
or to become payable in the ordinary course of business or establish, adopt,
enter into or amend or terminate any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of any
directors, officers or employees, except in the ordinary course of business;
(viii) (A) enter into or amend any employment, consulting,
severance or similar agreement with any individual other than in the ordinary
course of business, except with respect to new hires of non-officer employees in
the ordinary course of business or (B) amend any noncompetition or
nonsolicitation agreement with any officer of Company;
(ix) enter into any agreement that restrains, limits or
impedes Company's ability to compete with or conduct any business or line of
business;
25
(x) sell, pledge or dispose of any stock or other equity
interest owned by it to any other person;
(xi) enter into any contract or commitment with respect to
capital expenditures with a value in excess of, or requiring expenditures by
Company and its Significant Subsidiary in excess of, $250,000, individually, or
enter into contracts or commitments with respect to capital expenditures with a
value in excess of, or requiring expenditures by Company and its Significant
Subsidiary in excess of, $1,000,000, in the aggregate, other than in accordance
with the capital expenditure budgets of Company provided in writing to Parent
prior to the date of this Agreement;
(xii) acquire, by merging or consolidating with, by purchasing
an equity interest in or a portion of the assets of, or by any other manner, any
business or any person, or otherwise acquire any assets of any person (other
than the purchase of assets in the ordinary course of business and consistent
with past practice or as contemplated by this Agreement);
(xiii) agree to the settlement of or waive any material claim
or litigation, except in the ordinary course of business;
(xiv) make any change in any Tax practice material to Company
and its subsidiaries, taken as a whole, except as required by Applicable Law;
(xv) except as required by Applicable Law or GAAP, make any
material change in its method of accounting;
(xvi) adopt or enter into a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization of Company or any of its subsidiaries (other than the
Merger) or any agreement relating to an Acquisition Proposal, except as
expressly permitted in Section 6.5;
(xvii) accelerate the payment, right to payment or vesting of
any bonus, severance, profit sharing, retirement, deferred compensation, option,
insurance or other compensation or benefits other than pursuant to the terms of
any such arrangement in effect on the date of this Agreement or as contemplated
by this Agreement or as a result of the transactions contemplated by this
Agreement;
(xviii) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction (A) of any such
claims, liabilities or obligations in the ordinary course of business and
consistent with past practice, (B) of claims, liabilities or obligations
reflected or reserved against in the most recent consolidated financial
statements (or the notes thereto) contained in the Filed SEC Reports, or (C) of
the Notes as contemplated by Section 6.10;
(xix) enter into any contract that, had it been entered into
prior to the date of this Agreement, would have constituted a Material Contract
(other than as otherwise contemplated by this Agreement), or materially modify,
amend or terminate any Material Contract or waive any of its material rights or
claims under a Material Contract, except in each case in the ordinary course of
business consistent with past practice;
26
(xx) other than as disclosed in the Filed SEC Reports, plan,
announce, implement or effect any reduction in force, lay-off, early retirement
program, severance program or other program or effort concerning the termination
of employment of employees of Company, provided, however, that routine employee
terminations shall not be considered subject to this Section 5.1(xx);
(xxi) take any action, engage in any transaction or enter into
any agreement which would cause (A) any of the representations or warranties set
forth in Article IV that are subject to, or qualified by, a "Company Material
Adverse Effect" or other materiality qualification to be untrue as of the
Effective Time, or any such representations and warranties that are not so
qualified to be untrue in any material respect, or (B) any of the conditions to
the Offer set forth in Exhibit A to this Agreement not being satisfied;
(xxii) take any action, including the adoption of any
stockholder rights plan, which would, directly or indirectly, restrict or impair
the ability of Parent to vote or otherwise to exercise the rights and receive
the benefits of a holder of Common Stock with respect to shares of Common Stock
that may be acquired or controlled by Parent or Merger Sub, or which would
permit any holder of Common Stock to acquire securities of Company on a basis
not available to Parent or Merger Sub if Parent or Merger Sub were to acquire
any shares of Common Stock; or
(xxiii) authorize any of, or commit or agree to take any of,
the foregoing actions in respect of which it is restricted by the provisions of
this Section 5.1.
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.1 Company Stockholders Meeting; Preparation of the Company Proxy
Statement; Short-Form Merger.
(a) As soon as practicable following the consummation of the Offer,
if required by Applicable Law to consummate the Merger, Company shall take all
action necessary, in accordance with the DGCL, the Exchange Act and other
Applicable Law and its certificate of incorporation and bylaws to convene and
hold a meeting of the stockholders of Company (the "Stockholders Meeting"), and
Company agrees that this Agreement shall be submitted at such meeting, for the
purpose of considering and voting upon this Agreement and to solicit proxies
pursuant to the Company Proxy Statement in connection therewith. Subject to the
provisions of Section 6.5(b), the Board of Directors of Company shall recommend
that the holders of Common Stock vote in favor of the adoption of this Agreement
at the Stockholders Meeting and shall cause such recommendation to be included
in the Company Proxy Statement. At the Stockholders Meeting, Parent and Merger
Sub shall cause all of the shares of Common Stock owned by them and any of their
affiliates to be voted in favor of the adoption of this Agreement.
(b) As soon as practicable following the consummation of the Offer,
if required by Applicable Law in order to consummate the Merger, Company, in
consultation with
27
Parent, shall promptly prepare and file the Company Proxy Statement with the SEC
in accordance with the Exchange Act. Parent, Merger Sub and Company will
cooperate with each other in the preparation of the Company Proxy Statement.
Without limiting the generality or effect of the foregoing, Company shall use
its reasonable best efforts to respond to all SEC comments with respect to the
Company Proxy Statement and, subject to compliance with SEC rules and
regulations, to cause the Company Proxy Statement to be mailed to Company's
stockholders at the earliest practicable date and, if necessary, after the
Company Proxy Statement shall have been so mailed, promptly circulate amended,
supplemental or supplemented proxy material and, if required in connection
therewith, resolicit proxies. Each of Parent and Merger Sub shall promptly
supply to Company in writing, for inclusion in the Company Proxy Statement, all
information concerning Parent and Merger Sub required under the Exchange Act or
in response to an SEC comment to be included in the Company Proxy Statement.
(c) Notwithstanding the foregoing clauses (a) and (b), if following
the consummation of the Offer, Parent, Merger Sub and any other wholly owned
subsidiary of Parent own, in the aggregate, at least 90% of the outstanding
shares of Common Stock, the parties hereto shall take all necessary action to
cause the Merger to become effective, promptly after the consummation of the
Offer (and in any event, within three business days), without a meeting of
stockholders of Company, in accordance with Section 253 of the DGCL.
Section 6.2 Access to Information; Confidentiality. Company shall and
shall cause its Significant Subsidiary to afford to Parent, its financing
sources and its officers, employees, counsel, advisors and other representatives
reasonable access (subject, however, to existing confidentiality and similar
non-disclosure obligations) during normal business hours and upon reasonable
notice during the period prior to the Effective Time to all of Company's
properties, books, contracts, commitments, Tax Returns, personnel and records
and, during such period, Company shall furnish as promptly as practicable to
such persons such information concerning Company's and its Significant
Subsidiary's businesses, properties, financial condition, operations and
personnel as such persons may from time to time reasonably request. Except as
required by law, Parent and Company will hold, and will cause its directors,
officers, employees, accountants, counsel, financing sources, advisors and other
representatives and affiliates to hold, any non-public information obtained
(including the information referenced in Section 1.3(c)) from the other in
confidence to the extent required by, and in accordance with the provisions of,
the letter agreement, dated November 28, 2001, between Harvest Partners, Inc.
and Company with respect to confidentiality and other matters (the
"Confidentiality Agreement") as if Parent and Merger Sub were originally a party
to the Confidentiality Agreement.
Section 6.3 Reasonable Best Efforts. On the terms and subject to the
conditions set forth in this Agreement, each of the parties shall use its
reasonable best efforts to take, or cause to be taken, all appropriate actions,
and do, or cause to be done, and assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Offer, the Merger and
the other transactions contemplated by this Agreement, including the
satisfaction of the covenant set forth in Section 6.11 and the conditions set
forth in Article VII and Exhibit A to this Agreement; provided, however, that
Company shall not be required to nor shall it take any action otherwise
prohibited by Section 5.1 without first obtaining the written approval of
Parent, which approval will not be unreasonably withheld or delayed.
28
Section 6.4 Public Announcements. Parent and Merger Sub, on the one hand,
and Company, on the other hand, shall consult with each other before issuing,
and provide each other the opportunity to review and comment upon, any press
release, SEC filing (including without limitation the Offer Documents, the
Schedule 14D-9 and the Company Proxy Statement) or other public statements with
respect to the transactions contemplated by this Agreement, including the Offer
and Merger, and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by Applicable
Law, by court process or by obligations pursuant to any listing agreement with
any national securities exchange or national securities association which Merger
Sub, Parent or any affiliate of Parent or Merger Sub or, as the case may be,
Company, is a party, but only if it has used all reasonable efforts to consult
with the other party unless it has been unable to do so in a timely manner.
Section 6.5. Acquisition Proposals.
(a) Company and its subsidiaries shall, and Company shall use its
reasonable best efforts to cause each of its officers, directors, employees,
representatives, consultants, investment bankers, attorneys, accountants and
other agents (collectively "Company Representatives") immediately to, cease any
discussions or negotiations with any Third Party (as defined in Section 9.3)
that may be ongoing as of the date of this Agreement with respect to any
Acquisition Proposal. Company and its subsidiaries shall not take, and Company
shall use its reasonable best efforts to cause Company Representatives not to
take, any action (i) to solicit, initiate, facilitate or knowingly encourage,
directly or indirectly, the making or submission of any Acquisition Proposal
(including, without limitation, by taking any action that would make Section 203
of the DGCL inapplicable to an Acquisition Proposal), (ii) to enter into any
agreement, arrangement or understanding with respect to any Acquisition
Proposal, or to agree to approve or endorse any Acquisition Proposal or enter
into any agreement, arrangement or understanding that would require Company to
abandon, terminate or fail to consummate the Merger or any other transaction
contemplated by this Agreement, (iii) to initiate or participate in any way in
any discussions or negotiations with, or furnish or disclose any nonpublic
information to, any Third Party in connection with any Acquisition Proposal, or
(iv) to grant any waiver or release under, or amend, any standstill,
confidentiality or similar agreement entered into by or on behalf of Company;
provided, however, that, in response to a written Acquisition Proposal that did
not result from a breach of this Section 6.5(a), Company (and Company
Representatives) may (x) request clarifications from (but not enter into
negotiations with or furnish nonpublic information to) any Third Party which
makes such written Acquisition Proposal if such action is taken solely for the
purpose of obtaining information reasonably necessary to ascertain whether such
Acquisition Proposal is a Superior Proposal, or (y) participate in discussions
and negotiations with, request clarifications from, or furnish nonpublic
information to, any Third Party which makes such written Acquisition Proposal if
(A) such action is taken subject to a confidentiality agreement with terms not
more favorable to such Third Party than the terms of the Confidentiality
Agreement (as in effect on the date of this Agreement), (B) after consultation
with outside legal counsel to Company and a nationally recognized investment
bank, a majority of the members of the entire Board of Directors of Company
determines in good faith that such Acquisition Proposal is a Superior Proposal
and (C) a majority of the members of the entire Board of Directors of Company
determines in good faith, after receiving advice from outside legal counsel to
Company (which may be Company's regular outside counsel), that the taking of
such action is necessary or appropriate to comply with
29
the fiduciary duties of the Board of Directors under Applicable Law. Company
shall use its reasonable best efforts to enforce, to the fullest extent
permitted under Applicable Law, the provisions of any standstill,
confidentiality or similar agreement entered into by or on behalf of Company
(whether before or after the date of this Agreement) in connection with the
matters contemplated by this Section 6.5 including, where necessary, by seeking
injunctions to prevent any breaches of such agreements and seeking to enforce
specifically the terms and provisions thereof in a court having jurisdiction.
(b) Neither the Board of Directors of Company nor any committee
thereof shall (i) withdraw, modify or amend, or publicly propose to withdraw,
modify or amend, in a manner adverse to Parent or Merger Sub, the approval,
adoption or recommendation of the Offer, the Merger or this Agreement (other
than as a result of circumstances that would give rise to Company's right to
terminate this Agreement pursuant to Section 8.1(b), Section 8.1(c), Section
8.1(g) or Section 8.1(h)), (ii) approve or recommend, or publicly propose to
approve or recommend, any Acquisition Proposal or (iii) resolve to do any of the
foregoing; provided that Company may take such action if (A) Company has
complied with its obligations under Section 6.5(a) and Section 6.5(c), (B) all
the conditions to Company's right to terminate this Agreement in accordance with
Section 8.1(d) have been satisfied (including the expiration of the five
business day period described therein and the payment of all amounts required
pursuant to Section 8.2(b)) and (C) simultaneously with such withdrawal,
modification or recommendation, this Agreement is terminated in accordance with
Section 8.1(d). Nothing in this Agreement (including this Section 6.5) shall
prohibit the Board of Directors of Company from making to Company's stockholders
any recommendation and related filing with the SEC as required by Rules 14e-2
and 14d-9 under the Exchange Act with respect to any tender offer or taking any
other legally required action (including, without limitation, the making of
public disclosures as may be necessary or advisable under Applicable Law).
Notwithstanding anything contained in this Agreement to the contrary, an
exercise of Company's or its Board of Directors' rights under the immediately
preceding sentence shall not constitute a breach of this Agreement by Company.
For the purposes of this Agreement, the term "Acquisition Proposal"
means any proposal or offer (including, without limitation, any public proposal
to stockholders of Company) from any Third Party relating to (i) any direct or
indirect acquisition or purchase of 20% or more of the consolidated assets of
Company and its subsidiaries or 10% or more of any class of equity securities of
Company or any of its subsidiaries, (ii) any tender offer or exchange offer
that, if consummated, would result in any Third Party beneficially owning 10% or
more of any class of equity securities of Company or any of its subsidiaries,
(iii) any merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving Company or any of its
subsidiaries or (iv) any other transaction (other than any transaction
contemplated by this Agreement or the Tender Agreement, including the
Transaction Financing) the consummation of which would reasonably be expected to
impede, interfere with, prevent or materially delay the Offer or the Merger.
For the purposes of this Agreement, the term "Superior Proposal"
means a bona fide written offer made by a Third Party to acquire all of the
Common Stock pursuant to a tender offer or a merger or to acquire all or
substantially all of the assets of Company and its subsidiaries (i) on terms
which a majority of the members of the entire Board of Directors of Company
determines in good faith to have a higher value than the consideration to be
received
30
by the stockholders of Company (in their capacity as such) than the transactions
contemplated by this Agreement (including as modified by Parent in accordance
with Section 8.1(d)), and (ii) which is reasonably capable of being consummated
(taking into account, among other things, all legal, financial, regulatory and
other aspects of such proposal (including, without limitation, conditions
imposed by such Third Party on its obligations to consummate the transactions
contemplated by such offer) and the identity of the Third Party making such
proposal).
(c) In addition to the obligations of Company set forth in Section
6.5(a), within one business day of the receipt or occurrence of any Acquisition
Proposal by Company, Company shall advise Parent of the receipt or occurrence of
such Acquisition Proposal and Company shall provide to Parent copies of any
written materials received by Company in connection with such Acquisition
Proposal, including the identity of the Third Party making such Acquisition
Proposal. Company shall keep Parent informed of the status and material details
(including amendments or proposed amendments) to any such Acquisition Proposal
and keep Parent informed as to the material details of any information requested
of or provided by Company and as to the material details of all discussions or
negotiations (if any) with respect to any such Acquisition Proposal. Company
shall promptly provide to Parent any non-public information concerning Company
provided to any Third Party in connection with any Acquisition Proposal which
had not previously been provided to Parent.
(d) Company shall, as promptly as practicable after the date of this
Agreement, request each Third Party that has executed a confidentiality
agreement on or prior to the date of this Agreement with Company in connection
with its consideration of acquiring Company or 10% or more of any class of
equity securities of Company or its subsidiaries or 20% or more of the
consolidated assets of Company and its subsidiaries to return or destroy all
confidential information heretofore furnished to such person by or on behalf of
Company, and Company shall use its reasonable efforts (consistent with the terms
of any such agreement) to have such information returned or destroyed.
Section 6.6 Consents, Approvals and Filings. Upon the terms and subject to
the conditions set forth in this Agreement, each of the parties to this
Agreement shall (a) use its reasonable best efforts to cooperate with one
another to determine which filings are required to be made prior to the
Effective Time with, and which licenses, permits, consents, approvals,
authorizations, qualifications and orders are required to be obtained from,
Governmental Entities and other Third Parties as necessary for the consummations
of the Offer, the Merger and the other transactions contemplated by this
Agreement, (b) make promptly its respective filings, and thereafter make any
other required submissions, under the HSR Act and the Exchange Act, with respect
to the Offer, the Merger and the other transactions contemplated by this
Agreement and (c) use its reasonable best efforts to take, or cause to be taken,
all appropriate action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the Offer, the Merger and the other transactions contemplated by this
Agreement, including, without limitation, using its reasonable best efforts to
obtain all licenses, permits, consents, approvals, authorizations,
qualifications and orders of Governmental Entities and Third Parties as are
necessary for the consummation of the Offer, the Merger and the other
transactions contemplated by this Agreement and to fulfill the conditions to the
Offer and the Merger. In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and
31
directors of each party to this Agreement shall use their reasonable best
efforts to take all such action.
Section 6.7 Employee Benefit Matters.
(a) From and after the Effective Time, Parent shall, and shall cause
each of its subsidiaries (including the Surviving Corporation) to, honor and
provide for payment of all cash benefits under the Incentive Plan (as provided
in Section 3.2) and all other Benefit Plans, all in accordance with their
respective terms; provided, however, that nothing in this Agreement shall
prevent or restrict Parent or the Surviving Corporation or their respective
subsidiaries from modifying or terminating any Benefit Plan in accordance with
the terms thereof, nor obligate Parent or the Surviving Corporation or their
respective subsidiaries to maintain any particular plan, program, arrangement or
agreement. For the purpose of any Benefit Plan or any other plan, program or
arrangement of Company that contains a provision relating to a change in control
of Company, Parent acknowledges that such a change in control has occurred not
later than the consummation of the Offer.
(b) For at least one year after the Effective Time, Parent shall
provide (or cause to be provided) to employees of Company and its subsidiaries
(each a "Company Employee" and collectively "Company Employees") employee
benefits and compensation not materially less favorable in the aggregate than
those provided under the Benefit Plans to such employees immediately prior to
the Effective Time (other than stock options and other stock based
compensation). To the extent that Company Employees are included in any benefit
plan of Parent or its subsidiaries, Parent agrees that Company Employees shall
receive credit under such plan for service prior to the Effective Time with
Company to the same extent such service was counted under similar Benefit Plans
for purposes of eligibility (including eligibility for higher rates of matching
contributions), vesting, eligibility for retirement (but not for benefit
accrual), and for purposes of benefit accrual with respect to vacation,
disability and severance benefits. To the extent that Company Employees are
included in any medical, dental or health plan other than the plan or plans they
participated in at the Effective Time, no such plans shall include pre-existing
condition exclusions, waiting periods or actively-at-work requirements, except
to the extent such provisions were applicable under the similar Benefit Plan at
the Effective Time, and all such plans shall provide credit for any deductibles,
co-payments and out-of-pocket limits applied or made with respect to each
Company Employee in the calendar year of the Closing.
(c) Any determination with respect to a Benefit Plan that requires
the application of Section 280G of the Code ("Section 280G"), will be made by
applying whichever provision set forth in the proposed regulations under Section
280G that were published on May 5, 1989, or in the proposed regulations under
Section 280G that were published on February 21, 2002, would be most favorable
to the employee. The preceding sentence includes, but is not limited to, in the
case of a provision in a Benefit Plan that could result in a reduction of
payments or benefits to an employee, applying the provision or provisions of
such regulations that would result in the smallest possible reduction in
payments and benefits.
(d) The provisions of this Section 6.7 shall not create in any
current or former employee of Company or its subsidiaries any rights to
employment or continued employment with Parent, the Surviving Corporation,
Company or any of their respective subsidiaries or any
32
right to specific terms or conditions of employment. Notwithstanding anything in
this Agreement to the contrary, from and after the Effective Time, the Surviving
Corporation shall have sole discretion over the hiring, promotion, retention,
termination and other terms and conditions of the employment of the employees of
the Surviving Corporation and its subsidiaries. The provisions of this Section
6.7 shall not apply to any employee of Company or its Significant Subsidiary
covered by a collective bargaining agreement or who is otherwise a party to any
employment or severance agreement with Company.
Section 6.8 Indemnification; Directors' and Officers' Insurance.
(a) From and after the Effective Time, the Surviving Corporation
will, and Parent shall cause the Surviving Corporation to, indemnify and hold
harmless each person who is now, at any time has been or who becomes prior to
the Effective Time a director or officer of Company, and their heirs and
personal representatives (the "Indemnified Parties"), against liabilities and
expenses incurred in connection with any proceeding arising out of or pertaining
to any action or omission occurring prior to the Effective Time (including,
without limitation, any proceeding which arises out of or relates to the
transactions contemplated by this Agreement), pursuant to, and honor the terms
of, their respective indemnification agreements with Company.
(b) Parent will cause the Surviving Corporation to maintain in
effect for not less than six years after the Effective Time, Company's current
directors' and officers' insurance policies, if such insurance is obtainable (or
policies equivalent in all material respects to those maintained by or on behalf
of Company on the date of this Agreement, and having at least the same coverage
and containing terms and conditions no less advantageous to the current and all
former directors and officers of Company) with respect to acts or failures to
act prior to the Effective Time; provided, however, that in order to maintain or
procure such coverage, Parent and the Surviving Corporation shall not be
required to maintain or obtain policies providing such coverage except to the
extent such coverage can be provided at an annual cost of no greater than
$500,000 (the "Cap"); and provided, further, that if equivalent coverage cannot
be obtained, or can be obtained only by paying an annual premium in excess of
the Cap, Parent or the Surviving Corporation shall only be required to obtain as
much coverage as can be obtained by paying an annual premium equal to the Cap.
(c) The certificate of incorporation and bylaws of the Surviving
Corporation shall contain the provisions with respect to indemnification set
forth in the certificate of incorporation and bylaws of Company as in effect on
the date of this Agreement, which provisions shall not be amended, repealed or
otherwise modified for a period of six years after the Effective Time in any
manner that would adversely affect the rights thereunder of the Indemnified
Parties in respect of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
this Agreement). Parent, Merger Sub and Company agree that all rights existing
in favor of any Indemnified Party under any indemnification agreement in effect
as of the date of this Agreement shall survive the Merger and shall continue in
full force and effect, without any amendment thereto.
(d) The provisions of this Section 6.8 are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties, his or
her heirs and his or her personal
33
representatives and shall be binding on all successors and assigns of Parent,
Merger Sub, Company and the Surviving Corporation.
Section 6.9 Transfer Taxes. Parent and Company shall cooperate in the
preparation, execution and filing of all returns, applications, questionnaires
or other documents regarding any real property transfer, stamp, recording,
documentary, gains, sales, use, value added, stock transfer or other taxes and
any other fees and similar taxes which become payable in connection with the
Merger (collectively, "Transfer Taxes"). From and after the Effective Time,
Parent shall pay or cause to be paid, without deduction or withholding from any
amounts payable to the holders of Common Stock, all Transfer Taxes.
Section 6.10 Notes Tender Offer; Consent Solicitation. Promptly following
the commencement of the Offer and upon such terms as Parent may reasonably
request, and at Parent's sole cost and expense (and if such costs and expenses
are first paid by Company, Parent and Merger Sub shall promptly reimburse
Company for such costs and expenses upon request), Company shall (a) commence
(within the meaning of Rule 14d-2 under the Exchange Act), a cash tender offer
to purchase all of Company's outstanding 9-1/4% Senior Subordinated Notes, due
2008 (the "Notes") as contemplated by the Commitment Letter (the "Notes Tender
Offer") and (b) solicit the consent of the holders of the Notes to, subject to
the concurrent consummation of the Offer, amend the indenture under which the
Notes were issued, dated as of March 1, 1998 (the "Note Indenture"), to permit
the transactions contemplated by this Agreement (including, without limitation,
the Transaction Financing). Company shall defease pursuant to Section 8.01 of
the Note Indenture all Notes not tendered pursuant to the Notes Tender Offer
with funds made available by the Transaction Financing or otherwise from Parent.
Notwithstanding anything in this Agreement to the contrary, Company shall not be
required to accept for payment or pay for any Notes tendered pursuant to the
Notes Tender Offer or defease any of the Notes prior to the consummation of the
Offer.
Section 6.11 Financing-Related Cooperation.
(a) Each of Parent and Merger Sub shall comply, and shall cause its
affiliates to comply, with their respective obligations under the Commitment
Letter (including, without limitation, receipt or funding of the Equity
Commitment) and shall use reasonable best efforts to obtain the funding
contemplated by the Commitment Letter (including, if necessary, any bridge
financing contemplated under the Commitment Letter). Parent and Merger Sub shall
use reasonable best efforts to enter into definitive financing agreements within
15 business days of the date of this Agreement, and in any event prior to the
Outside Date. If the Commitment Letter is terminated by Lender or such funds
shall not otherwise be available, Parent and Merger Sub shall use reasonable
best efforts to obtain an alternative source or sources for the Transaction
Financing on terms reasonably acceptable to Company. Parent and Merger Sub will
not amend, terminate or waive any provisions of the Commitment Letter without
the prior written consent of Company if the effect thereof would be reasonably
likely to prevent or materially delay the consummation of the transactions
contemplated by this Agreement or adversely affect the consummation of the Offer
or the Merger. Neither Parent, Merger Sub nor any of their respective affiliates
shall knowingly attempt, directly or indirectly, to induce or encourage Lender
not to fund any of the financing provided for in the Commitment Letter. Parent
and Merger Sub will promptly following Company's request provide Company with
such information
34
as Company may reasonably request regarding the status of the Transaction
Financing (including copies of the draft or definitive financing agreements).
Parent and Merger Sub will provide prompt written notice to Company of any
notice by the Lender or the lender or lenders of any substitute financing of its
or their unwillingness or inability to provide the Transaction Financing and the
stated reasons therefor, if known.
(b) Company agrees to provide, and will cause its subsidiaries and
its and their respective officers, employees and advisers to provide, upon the
reasonable request of Parent, and at Parent's sole cost and expense (and if such
costs and expenses are first paid by Company, Parent and Merger Sub shall
promptly reimburse Company for such costs and expenses upon request), all
cooperation reasonably necessary in connection with the arrangement of any
financing to be consummated contemporaneously with or at or after the Closing in
respect of the transactions contemplated by this Agreement, including
participation in meetings, due diligence sessions, road shows, the preparation
of offering memoranda, private placement memoranda, prospectuses and similar
documents, the execution and delivery of any commitment letters, underwriting or
placement agreements, pledge and security documents, other definitive financing
documents, or other requested certificates or documents, including a certificate
of the chief financial officer of Company with respect to solvency matters,
comfort letters of accountants and legal opinions as are customary for
transactions of this type and as may be reasonably requested by Parent and
taking such other actions as are customary for transactions of this type and as
are reasonably required to be taken by Company in connection with the
Transaction Financing. In addition, in connection with the obtaining of any such
financing, Company agrees, at the reasonable request of Parent, to call for
prepayment or redemption, or to prepay, redeem and/or renegotiate, as the case
may be, any then existing indebtedness of Company; provided that no such
prepayment, redemption or renegotiation shall actually be made or consummated
prior to the consummation of the Offer.
Section 6.12 Solvency Opinion. If (i) Parent, Merger Sub or any affiliate
of Parent or Merger Sub, or (ii) any lender of the Transaction Financing, is
provided an opinion as to solvency matters relating to Company or the
transactions contemplated by this Agreement (including the Transaction
Financing), the Board of Directors of Company shall be provided the same opinion
as an addressee.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to effect the Merger is subject to the
satisfaction or written waiver on or prior to the Effective Time of the
following conditions:
(a) Completion of the Offer. Merger Sub shall have made, or caused
to be made, the Offer and shall have accepted for payment and paid for all
shares of Common Stock validly tendered and not withdrawn pursuant to the Offer;
provided, however, that neither Parent nor Merger Sub may invoke this condition
if Merger Sub fails to make or cause to be made the Offer or accept for payment
or pay for shares of Common Stock pursuant to the Offer in violation of the
terms of the Offer or this Agreement.
35
(b) Stockholder Approval. This Agreement shall have been adopted by
the affirmative vote of the holders of the requisite number of shares of Common
Stock if such vote is required pursuant to Company's certificate of
incorporation, the DGCL or other Applicable Law; provided, however, that neither
Parent nor Merger Sub may invoke this condition if either of them or any of
their respective affiliates shall have failed to vote the shares of Common Stock
held by it in favor of this Agreement.
(c) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; provided, however, that the party
invoking this condition shall use its reasonable best efforts to have any such
order, injunction or restraint vacated.
(d) Statutes. No United States or state Governmental Entity shall
have enacted, issued, promulgated, enforced or entered any statute, rule or
regulation which prevents or prohibits the consummation of the Merger or has the
effect of making the consummation of the Merger illegal.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Effective Time, whether before or after approval of the Merger by the
stockholders of Company:
(a) by mutual consent of Parent and Merger Sub on the one hand and
Company on the other hand;
(b) by Company, if Parent or Merger Sub shall have (i) failed to
commence the Offer within five business days following the date of this
Agreement or (ii) made any change to the Offer in contravention of the
provisions of Article I;
(c) by either Parent or Company, if the Offer shall have terminated
or expired in accordance with its terms without Merger Sub having purchased any
shares of Common Stock pursuant to the Offer; provided that the failure of
Merger Sub to purchase any shares of Common Stock pursuant to the Offer shall
not have been caused by (A) the failure of one or more of the conditions set
forth in Section (iii) or Section (iv)(c) of Exhibit A to this Agreement to be
satisfied or waived (in which event termination of this Agreement shall be
governed, as applicable, by Section 8.1(f) or Section 8.1(h) of this Agreement)
or (B) the failure of the terminating party to fulfill its obligations pursuant
to this Agreement;
(d) by Company in order to accept a Superior Proposal; provided,
however, that Company may not terminate this Agreement pursuant to this Section
8.1(d) unless and until (i) five business days have elapsed following delivery
to Parent of a written notice of Company's intent to terminate this Agreement
pursuant to this Section 8.1(d) and, during such five business-day period,
Company has cooperated with Parent by, among other things, informing Parent of
36
the terms and conditions of such Superior Proposal and the identity of the Third
Party making such Superior Proposal, with the intent of enabling Parent, Merger
Sub and Company to negotiate a modification of the terms and conditions of this
Agreement so that the transactions contemplated hereby may be consummated, (ii)
at the end of such five business-day period, a majority of the members of the
entire Board of Directors of Company continues to determine in good faith,
taking into account any modifications to this Agreement offered by Parent, that
termination of this Agreement and Company's entering into an agreement to effect
such Superior Proposal is necessary or appropriate to comply with the fiduciary
duties of the Board of Directors of Company under Applicable Law and (iii) (A)
simultaneously or substantially simultaneously with such termination, Parent
receives all fees and expense reimbursements set forth in Section 8.2(b) by wire
transfer in same day funds and (B) simultaneously or substantially
simultaneously with such termination Company enters into a definitive
acquisition, merger or similar agreement to effect such Superior Proposal;
(e) by Parent, if the Board of Directors of Company or any committee
thereof shall have prior to Merger Sub's initial purchase of Common Stock in the
Offer (the "Offer Completion Date"): (i) withdrawn, modified or amended, or
resolved to withdraw, modify or amend, or publicly proposed to withdraw, modify
or amend, in a manner adverse to Parent or Merger Sub, the approval, adoption or
recommendation, as the case may be, of the Offer, the Merger or this Agreement
(other than as a result of circumstances that would give rise to Company's right
to terminate this Agreement pursuant to Section 8.1(b), Section 8.1(c), Section
8.1(g), or Section 8.1(h)); provided, however, that any public statement that
Company has received an Acquisition Proposal in compliance with Section
6.5(a)(i) or has entered into discussions with or provided information to any
Third Party regarding an Acquisition Proposal in compliance with Section
6.5(a)(iii), or otherwise only describes the operation of Section 6.5 or this
Section 8.1, shall not be deemed to be a withdrawal, change or modification of
the recommendation (or a public proposal with respect thereto) of the Board of
Directors of Company for the purposes of this Section 8.1(e), (ii) approved or
recommended, or resolved to approve or recommend, or publicly proposed to
approve or recommend, any Acquisition Proposal, (iii) not rejected any publicly
announced Acquisition Proposal within 10 business days of Company's receipt of
such Acquisition Proposal or (iv) failed to reaffirm its approval and
recommendation of the Offer, the Merger or this Agreement within 10 business
days of Parent's written request for such reaffirmation;
(f) by Parent, at any time prior to the Offer Completion Date, if
Company shall materially breach any of its representations, warranties or
obligations hereunder and (i) such breach has not been cured by Company or
waived by Parent or (ii) Company shall not have provided Parent with reasonable
assurance that such breach will be cured on or prior to the later of 10 business
days after receipt by Company of written notice from Parent of such breach and
the Outside Date, but only if such breach, individually or together with all
other such breaches, constitutes a failure of the conditions contained in
Section (iv)(c) of Exhibit A to this Agreement as of the date of such
termination;
(g) by Company, at any time prior to the Offer Completion Date, if
Parent or Merger Sub shall materially breach any of its representations,
warranties or obligations hereunder (including, without limitation, the failure
of Parent and Merger Sub to have received the Equity Commitment on or prior to
the Outside Date) and (i) such breach has not been cured by Parent or waived by
Company, or (ii) Parent and Merger Sub shall not have provided Company with
reasonable assurance that such breach will be cured
37
on or prior to the later of 10 business days after receipt by Parent of written
notice from Company of such breach and the Outside Date, but only if such
breach, individually or together with all other such breaches, constitutes a
Parent Material Adverse Effect; or
(h) by Company, if the condition contained in Section (iii) of
Exhibit A to this Agreement shall not have been satisfied by the Outside Date or
becomes incapable of fulfillment prior to the Outside Date (including, without
limitation, as a result of the inability of Parent and Merger Sub to document
the financing in a manner reasonably satisfactory to Lender or the lender or
lenders for any substitute financing, or the failure of Parent to obtain
substitute financing) (provided that the conditions set forth in Section (ii),
Section (iv)(a) and Section (iv)(d) of Exhibit A to this Agreement shall have
been satisfied or waived).
Section 8.2 Effect of Termination.
(a) Agreement Void. Upon the termination and abandonment of this
Agreement pursuant to Section 8.1 by Parent or Merger Sub, on the one hand, or
Company on the other hand, written notice thereof shall forthwith be given to
the other party or parties specifying the provision of this Agreement pursuant
to which such termination is made, and this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party hereto
or its affiliates, directors, officers or stockholders and all rights and
obligations of any party hereto shall cease, except for agreements contained in
the last sentence of Section 6.2, this Section 8.2 and Article IX, provided,
however, that nothing contained in this Section 8.2 shall relieve any party from
liability for any prior deliberate or willful breach of this Agreement, except
as provided in this Section 8.2.
(b) Fees and Expenses.
(i) If this Agreement is terminated by Company pursuant to
Section 8.1(d) or by Parent pursuant to Section 8.1(e)(ii), then Company shall
(provided that this Agreement is not then terminable by Company pursuant to
Section 8.1(g)) (A) reimburse Parent in immediately available funds an amount,
not in excess of $3,000,000, for the documented out-of-pocket cost, fees and
expenses of Parent and Merger Sub incurred on or after the date of this
Agreement related to the Offer, the Merger, the Notes Tender Offer, this
Agreement, the Transaction Financing and the transactions contemplated hereby
and thereby (including, without limitation, printing fees, filing fees and fees
and expenses of its legal and financial advisors and all fees and expenses
payable to any financing sources, but specifically excluding any fees paid to
Harvest Partners, Inc. or any of its affiliates or the cost or expense of any
employees or overhead of Parent, Merger Sub, Harvest Partners, Inc. or any of
their respective affiliates)(collectively, "Parent Expenses") and (B) pay to
Parent in immediately available funds an amount equal to $11,500,000 (the
"Termination Fee").
(ii) If this Agreement is terminated by Parent pursuant to
Section 8.1(e)(i), Section 8.1(e)(iii), Section 8.1(e)(iv) or Section 8.1(f),
then Company shall (provided that this Agreement is not then terminable by
Company pursuant to Section 8.1(g)) reimburse
38
Parent in immediately available funds an amount not in excess of $3,000,000 for
all Parent Expenses.
(iii) If this Agreement is terminated by Company pursuant to
Section 8.1(b) or Section 8.1(g), then Parent and Merger Sub shall (provided
that this Agreement is not then terminable by Parent pursuant to Section 8.1(f))
reimburse Company in immediately available funds an amount not in excess of
$3,000,000 for the documented out-of-pocket costs, fees, and expenses of Company
incurred on or after the date of this Agreement related to the Offer, the
Merger, the Notes Tender Offer, this Agreement and the transactions contemplated
hereby and thereby (including, without limitation, printing fees, filing fees
and fees and expenses of its legal and financial advisors and all fees and
expenses payable in connection with any litigation related to the Offer, the
Merger, the Notes Tender Offer, this Agreement and the transactions contemplated
hereby or thereby, but specifically excluding the costs of Company's employees
and Company's overhead).
(iv) If (A) this Agreement is terminated by Parent or Company
pursuant to Section 8.1(c) (and this Agreement is not then terminable by Company
pursuant to Section 8.1(g)), (B) all the conditions contained in Section (ii),
Section (iii), Section (iv)(a) and Section (iv)(b) of Exhibit A to this
Agreement shall have been satisfied, (C) the Minimum Share Condition shall not
have been satisfied, (D) all the conditions contained in Section (iv)(c) and
Section (iv)(d) of Exhibit A to this Agreement shall have been satisfied or
waived by Parent, (E) at any time after the date of this Agreement and prior to
the termination of this Agreement by Parent, an Acquisition Proposal with
respect to Company shall have been publicly announced or otherwise publicly
communicated (a "Third-Party Public Proposal") and such Third-Party Public
Proposal has not been terminated or withdrawn prior to the termination of this
Agreement by Parent, and (F) within one year of the termination of this
Agreement by Parent or Company, Company consummates a transaction with the
Third-Party that made such Third-Party Public Proposal (or an affiliate
thereof), Company shall pay or cause to be paid to Parent the Termination Fee
(plus an amount not in excess of $3,000,000 of Parent Expenses, provided that
Parent had not already been reimbursed such expenses pursuant to this Agreement)
promptly (and in any event within two business days) following the consummation
of such transaction. Notwithstanding anything contained in this Agreement to the
contrary, Parent shall be entitled to receive payment of only one Termination
Fee under this Agreement.
(v) The right of Parent to receive the payments contemplated
by this Section 8.2, and the right of Company to receive the payments
contemplated by this Section 8.2 and the reimbursement obligations set forth in
Section 6.10 and Section 6.11(b), shall be in lieu of (i) any liability,
damages, remedy or other claim by Parent, Merger Sub and their respective
affiliates, on the one hand, and Company and its affiliates, on the other hand,
in respect of the Offer, the Merger, the Transaction Financing, the Notes Tender
Offer and the transactions contemplated by this Agreement and (ii) any other
liability for a deliberate or willful breach of this Agreement.
(vi) This Section 8.2(b) will survive any termination of this
Agreement. Parent, Merger Sub and Company each acknowledge that the agreements
contained in this Section 8.2(b) are an integral part of the transactions
contemplated by this Agreement, and that,
39
without these agreements, Parent, Merger Sub and Company would not enter into
this Agreement.
Section 8.3 Amendment. Subject to any applicable provisions of the DGCL
and Section 1.4(b), at any time prior to the Effective Time, the parties hereto
may modify or amend this Agreement by written agreement executed and delivered
by duly authorized officers of the respective parties; provided, however, that
after the Offer Completion Date, no amendment shall be made which would reduce
the amount or change the type of consideration into which each share of Common
Stock shall be converted upon consummation of the Merger. This Agreement may not
be modified or amended except by written agreement executed and delivered by
duly authorized officers of each of the respective parties.
Section 8.4 Extension; Waiver. At any time prior to the Effective Time,
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement, or (c)
subject to Section 8.3, waive compliance with any of the agreements or
conditions of the other parties contained in this Agreement, in each case
subject to Section 1.4(b). Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in a written instrument
executed and delivered by a duly authorized officer on behalf of such party. 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 such rights.
Section 8.5 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 8.1, an amendment of this
Agreement pursuant to Section 8.3 or an extension or waiver pursuant to Section
8.4 shall, in order to be effective, require in the case of Parent, Merger Sub
or Company, action by its Board of Directors (in the case of Company, subject to
Section 1.4(b)).
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Nonsurvival of Representations and Warranties. The respective
representations and warranties of Company, on the one hand, and each of Parent
and Merger Sub, on the other hand, contained in this Agreement to or at the
Closing shall not be deemed waived or otherwise affected by any investigation
made by any party. 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 9.1 shall not limit any covenant or agreement of
the parties which by its terms contemplates performance after the Effective
Time.
Section 9.2 Fees and Expenses. Except as set forth in Section 6.10,
Section 6.11 and Section 8.2, whether or not the Merger shall be consummated,
each party hereto shall pay its own expenses incident to preparing for, entering
into and carrying out this Agreement and the consummation of the transactions
contemplated by this Agreement.
Section 9.3 Certain Definitions. For purposes of this Agreement:
40
(a) an "affiliate" of any person means another person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such first person; provided that, for the
purposes of this definition, "control" (including with correlative meanings, the
terms "controlled by" and "under common control with"), as used with respect to
any person, shall mean the possession, directly or indirectly, 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 partnership interests, by
contract or otherwise;
(b) "business day" means any day other than Saturday, Sunday or any
other day on which banks in The City of New York are required or permitted to
close;
(c) a "Company Material Adverse Effect" means a material adverse
effect on (i) the ability of Company to perform its obligations under this
Agreement or to consummate the transactions contemplated by this Agreement or
(ii) the assets, liabilities (actual or contingent), financial condition,
results of operations or business of Company and its subsidiaries, taken as a
whole, excluding any change or development resulting from or arising in
connection with (A) economic, financial market, regulatory or political
conditions generally or generally affecting the principal markets in which
Company conducts business, which in each case do not adversely affect Company
disproportionately, to other companies in the building products/siding and
windows industry, (B) changes affecting the building products/siding and windows
industry generally which do not adversely affect Company disproportionately to
other companies in the building products/siding and windows industry, (C) this
Agreement or any transaction contemplated by this Agreement or the announcement
thereof, (D) any matters disclosed in the Disclosure Schedule or (E) the failure
of the holders of any Notes to tender their Notes to Company in the Notes Tender
Offer;
(d) "Disclosure Schedule" means the disclosure schedule delivered by
Company to Parent simultaneously with the execution of this Agreement;
(e) "knowledge" means the actual knowledge of any executive officer
of Company or Parent, as the case may be, after due inquiry;
(f) "person" means an individual, a partnership, a limited liability
partnership, a joint venture, a corporation, a limited liability company, a
trust, an unincorporated organization, a group and a Governmental Entity; and
(g) a "subsidiary" of a specified person means any other person of
which (i) such specified person or any subsidiary thereof is a general partner,
(ii) voting power to elect a majority of the board of directors or others
performing similar functions with respect to such other person is held by such
specified person and/or by any one or more of its subsidiaries, or (iii) at
least 50% of the equity interests of such other person is, directly or
indirectly, owned or controlled by such specified person and/or by any one or
more of its subsidiaries. For purposes of this Agreement, AMI Management Company
is and shall be deemed to be a subsidiary of Company.
41
(h) "Third Party" means any person or "group" (as defined in Section
13(d)(3) of the Exchange Act) and their respective directors, officers,
employees, representatives, financing sources and agents other than Parent,
Merger Sub, Harvest Partners, Inc. or any of their affiliates and their
respective directors, officers, employees, representatives, financing sources
and agents.
Section 9.4 Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(i) if to Parent or to Merger Sub, to
c/o Harvest Partners, Inc.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxxxx
Telecopy: (000) 000-0000
with a copy (which shall not constitute notice) to:
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
(ii) if to Company, to
Associated Materials Incorporated
0000 Xxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
and Chief Financial Officer
Telecopy: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx, Day, Xxxxxx & Xxxxx
0000 X. Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. X'Xxxxxx
Telecopy: (000) 000-0000
42
Section 9.5 Interpretation. When a reference is made in this Agreement to
a Section or an Article, such reference shall be to a Section or an Article of
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for convenience of 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." Accounting terms used in this Agreement but not otherwise defined
in this Agreement have the meaning assigned to them in accordance with GAAP.
Section 9.6 Entire Agreement; Third-Party Beneficiaries. This Agreement
(including Exhibit A to this Agreement and the Disclosure Schedule) constitutes
the entire agreement, and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter of
this Agreement (except for the letter agreement referenced in the last sentence
of Section 6.2). Except for (i) Section 3.2 (which is intended to benefit, and
may be enforced by each holder of Options), (ii) Section 6.7 (which is intended
for the benefit of the present and former directors and officers of Company, and
may be enforced by, each present and former director and officer of Company, and
(iii) Section 6.8 (which is intended to benefit, and may be enforced by, each of
the Indemnified Parties), this Agreement is not intended to confer upon any
person, other than the parties hereto, any rights or remedies.
Section 9.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 9.8 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 9.9 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement may be assigned or delegated, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties, and any such assignment without
such prior written 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 successors and assigns.
Section 9.10 Enforcement. Irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. Accordingly, the parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement, this being in addition to any other remedy to which they are entitled
at law or in equity. Each of the parties hereto (a) hereby irrevocably and
unconditionally consents to submit to the personal jurisdiction of the courts of
the State of Delaware and of the United States of America located in the State
of Delaware (the "Delaware Courts") in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (b) shall
not object to or attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, and (c) shall not bring any
action relating to this Agreement or any of
43
the transactions contemplated by this Agreement in any other court, other than
to enforce the judgment of a Delaware Court.
Section 9.11 Severability. Whenever possible, each provision or portion of
any provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained in this Agreement.
Section 9.12 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same instrument and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
[SIGNATURE PAGE FOLLOWS]
44
IN WITNESS WHEREOF, Parent, Merger Sub and Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
HARVEST/AMI HOLDINGS INC.
By: /s/ Xxx X. Xxxxxxxx
---------------------------------------
Name: Xxx X. Xxxxxxxx
---------------------------------------
Title: President
---------------------------------------
SIMON ACQUISITION CORP.
By: /s/ Xxx X. Xxxxxxxx
----------------------------------------
Name: Xxx X. Xxxxxxxx
----------------------------------------
Title: President
---------------------------------------
ASSOCIATED MATERIALS INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxxx, Chairman, President
and Chief Executive Officer
45
EXHIBIT A
Unless otherwise defined in this Agreement, capitalized terms used in this
Agreement shall have the meanings ascribed to them in the Agreement.
Conditions to the Offer. Notwithstanding any other provision of the Offer
or the Agreement, Merger Sub shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) under the Exchange Act (relating to Merger Sub's obligation to pay for
or return tendered shares of Common Stock promptly after expiration or
termination of the Offer), to pay for any shares of Common Stock tendered
pursuant to the Offer, and, subject to the terms of the Agreement, may terminate
the Offer and may postpone the acceptance of, and payment for, any shares of
Common Stock if (i) there shall not have been validly tendered and not withdrawn
a number of shares of Common Stock (together with any shares of Common Stock
then owned by Parent, Merger Sub or any of their respective subsidiaries) which
constitutes at least a majority of the shares of Common Stock issued and
outstanding on a fully-diluted basis on the date of purchase (the "Minimum Share
Condition") ("on a fully-diluted basis" having the following meaning, as of any
date: the number of shares of Common Stock outstanding (excluding shares of
Common Stock held as treasury stock by Company), together with the number of
shares of Common Stock Company may be required to issue pursuant to obligations
outstanding at that date under the Incentive Plan or otherwise, whether or not
vested or then exercisable), (ii) any applicable waiting periods (and any
extension thereof) under the HSR Act shall not have expired or been terminated
prior to the Expiration Date of the Offer, (iii) the Transaction Financing shall
not have been obtained by Parent or Merger Sub by the Offer Completion Date, or
(iv) if at any time on or after the date of the Agreement, any of the following
events shall have occurred and be continuing:
(a) any United States or state Governmental Entity shall have
enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, injunction or other order which is in
effect and which (i) prevents or prohibits consummation of the
transactions contemplated by the Agreement, including the Offer or the
Merger, (ii) prohibits or limits materially the ownership or operation by
Parent of all or any material portion of the business or assets of Company
taken as a whole, or (iii) imposes material limitations on the ability of
Parent, Merger Sub or any other subsidiary of Parent to exercise
effectively full rights of ownership of any shares of Common Stock,
including without limitation the right to vote any shares of Common Stock
acquired by Merger Sub pursuant to the Offer or otherwise on all matters
properly presented to Company's stockholders, including without limitation
the approval and adoption of the Agreement and the transactions
contemplated thereby;
(b) the Merger Agreement shall have been terminated in accordance
with its terms;
(c) either of the following shall fail to be true:
(i) the representations and warranties of Company set forth in
Section 4.1 of the Agreement that are qualified by materiality shall
be true and
A-1
correct as of such Expiration Date (except for those representations
and warranties that speak as of an earlier date, which shall be true
and correct as of such earlier date) and the representations and
warranties of Company set forth in Section 4.1 of the Agreement that
are not so qualified shall be true and correct in all material
respects as of such Expiration Date (except for those
representations and warranties that speak as of an earlier date,
which shall be true and correct in all material respects as of such
earlier date), except for changes permitted by the Agreement, and
except, in the case of all breaches, where such breach would not
have, individually or in the aggregate, a Company Material Adverse
Effect;
(ii) the covenants of Company set forth in this Agreement to
be performed on or before such Expiration Date shall have been
performed in all material respects; or
(d) any Company Material Adverse Effect;
which, in the sole judgment of Merger Sub, in any such case, and regardless of
the circumstances giving rise to any such condition, makes it inadvisable to
proceed with the Offer and/or with such acceptance for payment or payments.
The foregoing conditions (other than the Minimum Share Condition) are for
the sole benefit of Parent and Merger Sub and their affiliates and may be
asserted by Parent or Merger Sub regardless of the circumstances giving rise to
any such condition or may be waived by Parent or Merger Sub, in whole or in
part, from time to time in their respective sole discretion, except as otherwise
provided in the Agreement. The failure by Parent or Merger Sub at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right and may be asserted
at any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions,
Parent shall cause all tendered shares of Common Stock not theretofore accepted
for payment to promptly be returned to the tendering stockholders.
A-2
