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EXHIBIT 99.2
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
NOROB GROUP, INC.
AND
U.S. VISION, INC.
DATED AS OF
JULY 2, 2001
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as
of July 2, 2001, is by and between NORUB Group, Inc., a Delaware corporation
(the "Purchaser"), and U.S. Vision, Inc., a Delaware corporation (the
"Company"). Capitalized terms used in this Agreement and not otherwise defined
herein shall have the meanings ascribed to them in Appendix A attached hereto.
BACKGROUND
WHEREAS, the respective boards of directors of the Purchaser
and the Company have approved and declared advisable the Merger of the Purchaser
with and into the Company upon the terms and subject to the conditions set forth
in this Agreement, with the Company surviving the Merger; and
WHEREAS, also in furtherance of such acquisition, the
respective Boards of Directors of the Purchaser and the Company have approved
this Agreement and the Merger in accordance with the General Corporation Law of
the State of Delaware (the "DGCL") and upon the terms and subject to the
conditions set forth herein; and
WHEREAS, the Company's Board of Directors has determined that
the consideration to be paid for each of the Shares, the Options and the
Warrants in the Merger is fair to the holders of such Shares, Options and
Warrants and has resolved to recommend that the holders of such Shares, Options
and Warrants, as applicable, approve the Merger and this Agreement upon the
terms and subject to the conditions set forth herein; and
WHEREAS, the Company and the Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger; and
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements set forth herein,
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Subject to the terms and conditions of
this Agreement, at the Effective Time, the Company and the Purchaser shall
consummate a merger pursuant to which (i) the Purchaser shall be merged with and
into the Company and the separate corporate existence of the Purchaser shall
thereupon cease, (ii) the Company shall be the surviving company in the Merger
(the "Surviving Company") and shall continue to be governed by the laws of the
State of Delaware, and (iii) the separate corporate existence of the Company
with all its rights, privileges, immunities, powers and franchises shall
continue unaffected by the Merger, except as set forth in this Section 1.1.
Pursuant to the Merger, (x) the Certificate of Incorporation of the Company
shall be amended and restated in its entirety to read as set forth in Exhibit A
and, as so amended, shall be the Certificate of Incorporation of the Surviving
Company until thereafter amended as provided by law and such Certificate of
Incorporation, and (y) the By-Laws of the Purchaser, as in effect immediately
prior to the Effective Time, shall be the By-Laws of the Surviving Company until
thereafter amended as provided by law, by such Certificate of Incorporation or
by such By-Laws. The Merger shall have the effects specified in the DGCL.
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Section 1.2 Effective Time. On the Closing Date (as defined
below), the parties shall cause the Merger to be consummated by causing a
Certificate of Merger with respect to the Merger to be executed and filed in
accordance with the relevant provisions of the DGCL and shall make all other
filings or recordings required under the DGCL. The Merger shall become effective
at the time of filing of the Certificate of Merger or at such later time as is
specified therein.
Section 1.3 Closing. The closing of the Merger shall take
place at 10:00 a.m. on a date to be agreed upon by the parties, and if such date
is not agreed upon by the parties, the Closing shall occur on the second
business day after satisfaction or waiver of all of the conditions set forth in
Article VI, other than those conditions that by their nature are to be satisfied
at the Closing, but subject to the fulfillment or waiver of those conditions
(the "Closing Date"), at the offices of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, or at such
other time, date or place as the parties may agree.
Section 1.4 Directors and Officers of the Surviving Company.
The members of the Board of Directors of the Purchaser immediately prior to the
Effective Time and the officers of the Company at the Effective Time shall, from
and after the Effective Time, be the members of the Board of Directors and
officers, respectively, of the Surviving Company until their successors shall
have been duly elected or appointed or qualified or until their earlier death,
resignation or removal in accordance with the Certificate of Incorporation and
the By-Laws of the Surviving Company. If, at the Effective Time, a vacancy shall
exist on the Company's Board of Directors or in any office of the Surviving
Company, such vacancy may thereafter be filled in the manner provided by law.
Section 1.5 Subsequent Actions. If at any time after the
Effective Time the Surviving Company will consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Company its right, title or interest in, to or under any of the
rights, properties or assets of either of the Company or the Purchaser acquired
or to be acquired by the Surviving Company as a result of, or in connection
with, the Merger or otherwise to carry out this Agreement, the officers and
members of the Board of Directors of the Surviving Company shall be authorized
to execute and deliver, in the name and on behalf of either the Company or the
Purchaser, all such deeds, bills of sale, instruments of conveyance, assignments
and assurances and to take and do, in the name and on behalf of each of such
corporations or otherwise, all such other actions and things as may be necessary
or desirable to vest, perfect or confirm any and all right, title and interest
in, to and under such rights, properties or assets in the Surviving Company or
otherwise to carry out this Agreement.
ARTICLE II
EFFECT OF THE MERGER ON SECURITIES OF
THE PURCHASER AND THE COMPANY
Section 2.1 Cancellation of Company Common Stock Owned by the
Purchaser. At the Effective Time, by virtue of the Merger and without any action
on the part of the holder thereof, all shares of Company Common Stock that are
held by the Purchaser shall be canceled and retired and shall cease to exist
without any consideration paid with respect thereto.
Section 2.2 Conversion of Certain Company Common Stock for
Merger Consideration; Converted Shares; Treasury Shares.
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(a) At the Effective Time, by virtue of the Merger and without
any action on the part of the holder thereof, each share of Company Common Stock
outstanding immediately prior to the Effective Time (other than Treasury Shares
and Dissenting Shares, if any) shall automatically be converted into the right
to receive, and each certificate which immediately prior to the Effective Time
represented a share of such Company Common Stock shall evidence solely the right
to receive, $4.25 , to be paid in cash (the "Merger Consideration") upon
surrender of the certificates formerly representing Company Common Stock as
provided in Section 2.4.
(b) At the Effective Time, by virtue of the Merger and without
any action on the part of the holders thereof, each Converted Share shall be
converted into and shall become one duly authorized, validly issued, fully paid
and non-assessable share of the Surviving Company Common Stock upon the
surrender of the certificates previously representing such Converted Shares.
(c) All Treasury Shares shall, by virtue of the Merger and
without any action on the part of the holder thereof, automatically be canceled
and no consideration shall be paid with respect thereto.
Section 2.3 Options and Warrants.
(a) Except as provided in Section 2.3(b) below, as of the
Effective Time, each outstanding Option and Warrant granted by the Company,
whether or not then exercisable, shall be canceled by the Company, and as of the
Effective Time, each former holder thereof shall be entitled to receive from the
Surviving Company in consideration of such cancellation an amount (the "Net
Amount") equal to the product of (i) the number of shares of Company Common
Stock subject to such Option or Warrant, as applicable, at the time of such
cancellation and (ii) the excess, if any, of the Merger Consideration per share
over the exercise price per share subject to such Option or Warrant, as
applicable, at the time of such cancellation, reduced by the amount of
withholding or other taxes required by law to be withheld, payable in cash..
(b) Notwithstanding the foregoing, as of the Effective Time,
any Options or Warrants owned by the following members of the Company's senior
management team, Xxxxxxx X. Xxxxxxxx, Xx., Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxx
and Xxxxxx X. XxXxxxx, Xx., shall be cancelled by the Company, as of the
Effective Time, and the former holder thereof shall be entitled to receive from
the Surviving Corporation in consideration of such cancellation payment in the
form of unsecured, subordinated promissory notes in such amount and on such
terms as are acceptable to Purchaser and those members of the Company's senior
management team named above.
(c) The Company shall take all steps to ensure that following
the Effective Time neither it nor any of its Subsidiaries is or will be bound by
any of the Options or Warrants or any other options, warrants, rights or
agreements which would entitle any Person to own any capital stock of the
Company or any of its Subsidiaries or to receive any payment in respect thereof.
Notwithstanding any other provision of this Section 2.3 to the contrary, payment
of the Net Amount shall be withheld with respect to any Option or Warrant, as
applicable, until the holder of such Option or Warrant, as applicable, shall
have delivered to the Company a consent to the foregoing cancellation and
payment, in a form reasonably satisfactory to the Purchaser or the Surviving
Company.
(d) Except as may be otherwise agreed to by the Purchaser and
the Company, the Company shall take all actions that are necessary or
appropriate so that all stock option or other equity-based plans established by
the Company or any of its Subsidiaries shall terminate as of the Effective Time
and the provisions in any other plan, program or arrangement providing for the
issuance or grant of any
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capital stock or other interest in respect of the capital stock of the Company
or any Subsidiary, or for payments based on the value of any such capital stock,
shall be deleted, terminated and of no further force or effect as of the
Effective Time.
(e) Prior to the Effective Time, the Board of Directors (or,
if appropriate, any applicable committee) of the Company shall adopt such
resolutions or use reasonable efforts to take such actions as are necessary,
subject, if necessary, to obtaining consents of the holders of the Options and
Warrants, as applicable, to carry out the terms of this Section 2.3.
Section 2.4 Exchange of Certificates.
(a) Paying Agent. The Purchaser shall designate a bank or
trust company to act as agent for the holders of the Shares in connection with
the Merger to receive in trust the funds to which holders of the Shares shall
become entitled pursuant to Section 2.2 (the "Paying Agent"). Substantially
contemporaneously with the Effective Time, the Purchaser shall deposit, or cause
to be deposited, with the Paying Agent for the benefit of holders of Shares the
aggregate consideration to which such holders shall be entitled at the Effective
Time pursuant to Section 2.2. Such funds shall be invested as directed by the
Purchaser or the Surviving Company pending payment thereof by the Paying Agent
to holders of the Shares. Earnings from such investments shall be the sole and
exclusive property of the Purchaser and the Surviving Company, and no part of
such earnings shall accrue to the benefit of holders of Shares.
(b) Exchange Procedures.
(i) As soon as reasonably practicable after the
Effective Time, and using its reasonable best efforts to do so within three (3)
Business Days thereafter, the Paying Agent shall mail to each holder of record
of an outstanding certificate or certificates that immediately prior to the
Effective Time represented shares of Company Common Stock (other than Treasury
Shares and Dissenting Shares, if any), (A) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of such certificates to the Paying
Agent and shall be in such form and have such other provisions not inconsistent
with this Agreement as the Purchaser may specify) and (B) instructions for use
in effecting the surrender of each certificate in exchange for payment of the
Merger Consideration. Upon surrender of a certificate for cancellation to the
Paying Agent or to such other agent or agents as may be appointed by the
Purchaser or the Surviving Company, together with such letter of transmittal,
duly executed, the holder of such certificate shall be entitled to receive in
exchange therefor the Merger Consideration for each Share formerly represented
by such certificate, and the certificate so surrendered shall forthwith be
canceled. No interest shall be paid or accrue on the Merger Consideration.
(ii) If payment of the Merger Consideration 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 shall be otherwise in proper form for
transfer and that the person requesting such payment shall have paid any
transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the certificate
surrendered or shall have established to the satisfaction of the Surviving
Company that such tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.4, each certificate shall be
deemed, for all corporate purposes, at any time after the Effective Time, to
represent only the right to receive the Merger Consideration in cash as
contemplated by this Section 2.4.
(iii) In the event 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
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destroyed, the Paying Agent will issue in exchange for such lost, stolen or
destroyed certificate the Merger Consideration deliverable in respect thereof as
determined in accordance with this Article II; provided that the Person to whom
the Merger Consideration is paid shall, as a condition precedent to the payment
thereof, give the Surviving Company a bond in such sum as it may direct or
otherwise indemnify the Surviving Company in a manner satisfactory to it against
any claim that may be made against the Surviving Company with respect to the
certificate claimed to have been lost, stolen or destroyed.
(iv) Until surrendered as contemplated by this
Section 2.4, each certificate formerly representing the Shares shall be deemed
at any time after the Effective Time to represent only the right to receive upon
such surrender the Merger Consideration for each such share of Company Common
Stock.
(v) Subject to the provisions of the DGCL, all cash
paid upon the surrender for exchange of certificates formerly representing
shares of Company Common Stock in accordance with the terms of this Article II
shall be deemed to have been paid in full satisfaction of all rights pertaining
to the shares exchanged for cash theretofore represented by such certificates.
(c) Transfer Books; No Further Ownership Rights in the Shares.
At the Effective Time, the stock and warrant transfer books of the Company shall
be closed, and thereafter there shall be no further registration of transfers of
the Shares or Warrants on the records of the Company. From and after the
Effective Time, the holders of certificates evidencing ownership of the Shares
or Warrants, as the case may be, outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such Shares or Warrants, as
the case may be, except as otherwise provided for herein or by applicable law.
(d) Termination of Fund; No Liability. At any time following
the day which is six (6) months after the Effective Time, the Surviving Company
shall be entitled to require the Paying Agent to deliver to it any funds
(including any earnings received with respect thereto) which had been made
available to the Paying Agent and which have not been disbursed to holders of
certificates, and thereafter such holders shall be entitled to look only to the
Surviving Company (subject to abandoned property, escheat or other similar laws)
and only as general creditors thereof with respect to the Merger Consideration
payable upon due surrender of their certificates, without any interest thereon.
Notwithstanding the foregoing, neither the Surviving Company nor the Paying
Agent shall be liable to any holder of a certificate for Merger Consideration
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
Section 2.5 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the
contrary, Dissenting Shares shall not be converted into or represent a right to
receive cash pursuant to Section 2.2, but the holder thereof shall be entitled
to only such rights as are granted by the DGCL.
(b) Notwithstanding the provisions of Section 2.5(a), if any
holder of Shares who demands appraisal of his or her Shares under the DGCL
effectively withdraws or loses (through failure to perfect or otherwise) his or
her right to appraisal, then as of the Effective Time or the occurrence of such
event, whichever later occurs, such holder's Shares shall automatically be
converted into and represent only the right to receive the Merger Consideration
as provided in Section 2.2, without interest, upon surrender of the certificate
or certificates representing such Shares pursuant to Section 2.4.
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(c) The Company shall give the Purchaser (i) prompt notice of
any written demands for payment of the fair value of any Shares, withdrawals of
such demands, and any other instruments served on the Company pursuant to the
DGCL received by the Company and (ii) the opportunity to direct all negotiations
and proceedings with respect to demands for appraisal under the DGCL. Except
with the prior written consent of the Purchaser, the Company shall not
voluntarily make any payment with respect to any demands for appraisal, or
settle or offer to settle any such demands.
Section 2.6 Withholding Rights. The Purchaser and the
Surviving Company 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, Warrants or Options such amounts as are
required to be deducted and withheld with respect to the making of such payment
under 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.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule attached hereto
as Exhibit B (each section of which qualifies only the correspondingly numbered
representation and warranty as specified therein), the Company represents and
warrants to the Purchaser that:
Section 3.1 Organization; Qualification.
(a) Each of the Company and the Subsidiaries (i) is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of its state of incorporation and (ii) has full
corporate power and authority to carry on its business as it is now being
conducted and to own the properties and assets it now owns.
(b) Each of the Company and its Subsidiaries is duly qualified
or licensed to do business as a foreign corporation in good standing in the
jurisdictions listed in the Disclosure Schedule, which include every
jurisdiction in which the property owned, leased or operated by it or the
conduct of its business makes such qualification or licensing necessary, except
where the failure to so qualify could not reasonably be expected to have a
Material Adverse Effect.
(c) The Company has, prior to the date of this Agreement, made
available to the Purchaser true, complete and correct copies of the Company's
Certificate of Incorporation, as amended, and the Company's By-Laws, as amended,
and the comparable governing documents of each of the Subsidiaries, in each case
as amended and in full force and effect as of the date of this Agreement. The
respective Certificates of Incorporation and By-Laws or other organizational
documents of the Subsidiaries do not contain any provision limiting or otherwise
restricting the ability of the Company to control any of the Subsidiaries.
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Section 3.2 Capitalization.
(a) As of the date hereof, the authorized capital stock of the
Company consists of 20,000,000 shares in the aggregate, 15,000,000 shares of
which are of Common Stock, of which 7,802,942 shares are issued and outstanding,
and 1,700,520 shares are reserved for issuance pursuant to the Company's stock
option plans or pursuant to securities exercisable for, or convertible into or
exchangeable for shares, of Common Stock, and 5,000,000 shares of which are
preferred stock, none of which are issued and outstanding. All of such
outstanding shares of capital stock are, or upon issuance will be, duly
authorized, validly issued, fully paid and nonassessable. No shares of capital
stock of the Company are subject to preemptive rights or any other similar
rights of the stockholders of the Company or any liens or encumbrances imposed
through the actions or failure to act of the Company. Other than as set forth in
the Disclosure Schedule, there are no outstanding options, warrants, scrip,
rights to subscribe for, puts, calls, rights of first refusal, agreements,
understandings, claims or other commitments or rights of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital stock of the Company or any of its Subsidiaries, or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries.
(b) There are no voting trusts or other agreements or
understandings to which the Company or any Subsidiary is a party with respect to
the voting of the capital stock of the Company or any of the Subsidiaries.
(c) Following the Effective Time, no holder of the Options or
of Warrants, as applicable, shall have any right to receive shares of Common
Stock of the Surviving Company upon exercise of the Options or the Warrants, as
applicable.
Section 3.3 Subsidiaries. The Disclosure Schedule sets forth
the name, jurisdiction of incorporation and capitalization of each Subsidiary
and the jurisdictions in which each Subsidiary is qualified to do business.
Other than the Subsidiaries listed on the Disclosure Schedule, the Company does
not own, directly or indirectly, any capital stock or other equity securities of
any corporation or have any direct or indirect equity or ownership interest in
any Person. All the outstanding capital stock of each Subsidiary, is owned
directly or indirectly by the Company (other than directors' qualifying shares
in foreign jurisdictions) free and clear of all Liens, is validly issued, fully
paid and nonassessable and is not subject to, nor was issued in violation of,
any preemptive rights. There are no outstanding options, warrants, calls,
pre-emptive rights, subscriptions or other rights, agreements, arrangements or
commitments of any kind relating to the issuance, sale or transfer of any
capital stock or other equity securities of any such Subsidiary to any Person
except the Company or any Wholly-Owned Company Subsidiary.
Section 3.4 Authorization; Validity of Agreement; Company
Action. The Company has full corporate power and authority to execute and
deliver this Agreement and, subject to the Stockholder Approval in respect of
the Merger, to consummate the Transactions. The execution, delivery and
performance by the Company of this Agreement and the consummation by it of the
Transactions, have been duly authorized by the Board of Directors of the Company
and, except for obtaining the Stockholder Approval as contemplated by Section
5.3, no other corporate action on the part of the Company is necessary to
authorize the execution and delivery by the Company of this Agreement or the
consummation by it of the Transactions (other than the filing of the Certificate
of Merger as required by
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the DGCL). This Agreement has been duly executed and delivered by the Company
and, assuming due and valid authorization, execution and delivery thereof by the
Purchaser, is a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
Section 3.5 Board Approvals Regarding Transactions. The
Company's Board of Directors, at a meeting duly called and held, has unanimously
(i) determined that each of the Agreement and the Merger are fair to and in the
best interests of the stockholders of the Company, (ii) resolved to recommend
that the stockholders of the Company approve and adopt this Agreement and the
Merger and (iii) consented to the transfer to Purchaser of all of the Shares,
and none of the aforesaid actions by the Company's Board of Directors has been
amended, rescinded or modified. No business combination, control share
acquisition or other state takeover statute is applicable to the Merger or any
of the other Transactions.
Section 3.6 Vote Required. The affirmative vote of a majority
of the votes entitled to be cast on the Agreement (the "Stockholder Approval")
is the only vote of the holders of any class or series of the Company's capital
stock necessary to approve the Merger. No vote of any class or series of the
Company's capital stock is necessary to approve any of the Transactions other
than the Merger.
Section 3.7 Consents and Approvals; No Violations.
(a) None of the execution, delivery or performance of this
Agreement by the Company, the consummation by the Company of the Transactions or
compliance by the Company with any of the provisions of this Agreement will (i)
conflict with or result in any breach of any provision of the Certificate of
Incorporation or By-Laws of the Company or similar organizational documents of
any Subsidiary, (ii) result in a violation or breach of, or constitute (with or
without due notice or the passage of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration) or loss of
any benefit under, or result in the creation of any Lien upon any of the
properties or assets of the Company or any of the Subsidiaries under, any of the
terms, conditions or provisions of any Company Agreement, or (iii) to the best
knowledge of the Company, violate any order, writ, injunction, decree, statute,
rule, regulation permit or license applicable to the Company, any Subsidiary or
any of their properties or assets.
(b) None of the execution, delivery or performance of this
Agreement by the Company, the consummation by the Company of the Transactions or
compliance by the Company with any of the provisions of this Agreement will
require any filing or registration with, or permit, authorization, consent or
approval of, or notice to any Governmental Entity or under any Company
Agreement, except as disclosed in the Disclosure Schedule and except for (A) any
required filing of a premerger notification and report form by the Company under
the HSR Act, (B) the Governmental Approvals listed on Schedule 3.7 of the
Disclosure Schedule, (C) the filing with the SEC of the Proxy Statement and such
reports under the Exchange Act as may be required in connection with this
Agreement and the Transactions, (D) the Stockholder Approval and (E) the filing
of the Certificate of Merger with the Secretary of State of the State of
Delaware.
Section 3.8 SEC Reports and Financial Statements. The Company
has filed with the SEC, and has heretofore made available to the Purchaser, true
and complete copies of, the Company SEC Documents filed prior to the date
hereof. As of their respective dates and the date hereof the Company SEC
Documents, including, without limitation, any financial statements or schedules
included therein (i) did not contain any untrue statement of a material fact or
fail to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading and (ii) complied in all material
respects with the applicable
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requirements of the Exchange Act and the Securities Act, as the case may be, and
the applicable rules and regulations of the SEC thereunder. The Company has
heretofore provided the Purchaser with true and correct copies of all amendments
and modifications to any Company SEC Documents which have not yet been filed
with the SEC but that are required to be filed with the SEC in accordance with
applicable federal securities laws and the SEC rules. None of the Subsidiaries
is required to file any forms, reports or other documents with the SEC or with
any foreign Governmental Entity regulating the shares or other ownership
interests of a publicly traded entity. The Financial Statements have been
prepared from, and are in accordance with, the books and records of the Company
and its consolidated Subsidiaries, comply in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with GAAP
applied on a consistent basis during the periods involved and consistent with
the Company's past practices (except for changes in accounting principles as may
be stated in the notes thereto) and fairly present the consolidated financial
position and the consolidated results of operations and cash flows (and changes
in financial position, if any) of the Company and its consolidated Subsidiaries
as of the times and for the periods referred to therein (subject, in the case of
unaudited statements, to normal year-end audit adjustments which are not
material).
Section 3.9 No Undisclosed Liabilities. Except for liabilities
and obligations reflected in the Balance Sheet (or in the notes thereto) and
normal and recurring liabilities and obligations incurred in the ordinary course
of business consistent with past practice since the Balance Sheet Date, neither
the Company nor any Subsidiary has any liabilities or obligations of any nature
(whether absolute, accrued, contingent or otherwise) which, individually or in
the aggregate, are reasonably likely to have a Material Adverse Effect or would
be required to be reflected or reserved against in the consolidated financial
statements of the Company and its Subsidiaries (including the notes thereto) in
accordance with GAAP.
Section 3.10 Absence of Certain Changes. Since the Balance
Sheet Date, except as disclosed in the Company SEC Documents filed prior to the
date hereof, (i) the Company and each Subsidiary have conducted their respective
businesses only in the ordinary and usual course, (ii) there have not occurred
any events or changes (including the incurrence of any liabilities of any
nature, whether absolute, accrued, contingent or otherwise) having or reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect and
(iii) the Company has not taken any action which would have been prohibited
under Section 5.1 if such section applied to the period between the Balance
Sheet Date and the date of execution of this Agreement.
Section 3.11 Litigation. There is no action, suit, inquiry,
proceeding or investigation by or before any Governmental Entity pending or, to
the knowledge of the Company after due inquiry, threatened against or involving
or affecting the Company or any Subsidiary that, individually or in the
aggregate, (i) is reasonably likely to have a Material Adverse Effect or (ii) is
reasonably likely to impair the ability of the Company to perform its
obligations under this Agreement or prevent or materially delay the consummation
of any of the Transactions. Neither the Company nor any Subsidiary is subject to
any judgment, order or decree which has had or which, insofar as can reasonably
be foreseen, may have a Material Adverse Effect.
Section 3.12 Employee Benefit Plans.
(a) The Disclosure Schedule contains a true and complete list
of each deferred compensation and each incentive compensation, stock purchase,
stock option and other equity compensation plan, program, agreement or
arrangement; each severance or termination pay, medical, surgical,
hospitalization, life insurance and other "welfare" plan, fund or program
(within the meaning of Section 3(1) of ERISA); each profit-sharing, stock bonus
or other "pension" plan, fund or program
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(within the meaning of Section 3(2) of ERISA); each employment, termination or
severance agreement; and each other employee benefit plan, fund, program,
agreement or arrangement, in each case, that is sponsored, maintained or
contributed to or required to be contributed to by the Company or by any ERISA
Affiliate, or to which the Company or an ERISA Affiliate is a party, whether
written or oral, for the benefit of any employee or former employee of the
Company or any Subsidiary. Neither the Company, any Subsidiary nor any ERISA
Affiliate has any commitment or formal plan, whether legally binding or not, to
create any additional employee benefit plan or modify or change any existing
Plan that would affect any employee or former employee of the Company or any
Subsidiary.
(b) The Company has heretofore delivered to the Purchaser true
and complete copies of each Plan and any amendments thereto (or if a Plan is not
a written Plan, a description thereof), any related trust or other funding
vehicle, any reports or summaries required under ERISA or the Code and the most
recent determination letter received from the Internal Revenue Service with
respect to each Plan intended to qualify under Section 401 of the Code.
(c) No liability under Title IV or Section 302 of ERISA has
been incurred by the Company or any ERISA Affiliate that has not been satisfied
in full, and no condition exists that presents a material risk to the Company or
any ERISA Affiliate of incurring any such liability. No Plan is a Title II Plan
and neither the Company nor any ERISA Affiliate has maintained, sponsored,
contributed to or been required to contribute to a Title IV Plan during the five
year period ending on the last day of the most recent plan year ended prior to
the Closing Date.
(d) Neither the Company or any Subsidiary, any Plan, any trust
created thereunder, nor any trustee or administrator thereof has engaged in a
transaction in connection with which the Company or any Subsidiary, any Plan,
any such trust, or any trustee or administrator thereof, or any party dealing
with any Plan or any such trust could be subject to either a civil penalty
assessed pursuant to Section 409 or 502(i) of ERISA or a tax imposed pursuant to
Section 4975 or 4976 of the Code.
(e) Each Plan has been operated and administered in all
material respects in accordance with its terms and applicable law, including but
not limited to ERISA and the Code.
(f) Each Plan intended to be "qualified" within the meaning of
Section 401(a) of the Code is so qualified, and the trusts maintained thereunder
are exempt from taxation under Section 501(a) of the Code. Each Plan intended to
satisfy the requirements of Section 501(c)(9) has satisfied such requirements.
(g) No Plan provides medical, surgical, hospitalization, death
or similar benefits (whether or not insured) for employees or former employees
of the Company or any Subsidiary for periods extending beyond their retirement
or other termination of service, other than (i) coverage mandated by applicable
law, (ii) death benefits under any "pension plan," or (iii) benefits the full
cost of which is borne by the current or former employee (or his beneficiary).
(h) No amounts payable under the Plans will fail to be
deductible for federal income tax purposes by virtue of Section 162(a)(l),
162(m) or 280G of the Code.
(i) Other than as described in the Disclosure Schedule, the
consummation of the Transactions will not, either alone or in combination with
another event, (i) entitle any current or former employee or officer of the
Company or any ERISA Affiliate to severance pay, unemployment compensation or
any other payment, except as expressly provided in this Agreement, or (ii)
accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee or officer.
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(j) There are no pending, threatened or anticipated claims by
or on behalf of any Plan, by any employee or beneficiary covered under any such
Plan, or otherwise involving any such Plan (other than routine claims for
benefits).
Section 3.13 Tax Matters; Government Benefits.
(a) The Company and the Subsidiaries have (A) duly filed (or
there has been filed on their behalf) with the appropriate Governmental Entities
all Tax Returns (as defined in Section 3.13(i)) required to be filed by them on
or prior to the date hereof, other than those Tax Returns the failure of which
to file are not, individually or in the aggregate, reasonably likely to have a
Material Adverse Effect, and such Tax Returns are true, correct and complete in
all material respects, and (B) duly paid in full or made provision in accordance
with generally accepted accounting principles (or there has been paid or
provision has been made on their behalf) for the payment of all Taxes shown to
be due on such Tax Returns.
(b) There is no audit, examination, deficiency, refund
litigation, proposed adjustment or matter in controversy with respect to any
Taxes due and owing by the Company or the Subsidiaries, nor is the Company aware
of any threatened action in this regard.
(c) There are no outstanding requests, agreements, consents or
waivers to extend the statutory period of limitations applicable to the
assessment of any Taxes or deficiencies against the Company or any of the
Subsidiaries, and no power of attorney granted by either the Company or any of
the Subsidiaries with respect to any Taxes is currently in force.
(d) Neither the Company nor any of the Subsidiaries has
entered into a closing agreement or any other similar agreement with a taxing
authority relating to Taxes of the Company or any of the Subsidiaries with
respect to a taxable period for which the statute of limitations is still open.
(e) The Company and the Subsidiaries have complied in all
material respects with all rules and regulations relating to the withholding of
Taxes.
(f) Neither the Company nor any of the Subsidiaries is a party
to any agreement providing for the allocation or sharing of Taxes.
(g) Any amount or other entitlement that could be received
(whether in cash or property or the vesting of property) as a result of any of
the transactions contemplated by this Agreement by any employee, officer or
director of the Company or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation Section
1.280G-1) under any Plan currently in effect would not be characterized as an
"excess parachute payment" (as such term is defined in Section 280G(b)(1) of the
Code).
(h) There are no liens relating to Taxes not yet due and
payable.
(i) No consent under Section 341(f) of the Code has been filed
with respect to the Company or any of the Subsidiaries.
(j) Neither the Company nor any of the Subsidiaries has any
liability under Treasury Regulation Section 1.1502-6 for U.S. federal income
Taxes of any Person other than the Company and the Subsidiaries.
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(k) The Disclosure Schedule sets forth: (i) the federal income
tax basis of the Company and each of its Subsidiaries in its assets, and (ii)
the amounts of any net operating loss carryover, net capital loss carryover,
investment credit or other business credit carryover, foreign tax credit
carryover, charitable contribution carryover and minimum tax credit carryover of
the Company and each of its Subsidiaries for federal income tax purposes as of
the end of the last taxable year of each such entity, and such amounts are true,
correct and complete in all material respects.
(l) Except as set forth in the Disclosure Schedule, since
January 1, 1995, no ownership change has been reported by the Company on any
information statement that the Company has filed pursuant to Treas. Reg. Sec.
1.382-2T(a)(2)(ii).
(m) As of January 31, 2001, the Company had a net operating
loss carryover of approximately $14,100,000, which will begin to expire in 2006.
Prior to the consummation of the Merger, approximately $5,900,000 of that loss
carryover is available to offset future taxable income without limitations and
approximately $8,200,000 of that loss carryover is limited due to prior
ownership changes. Upon the consummation of the Merger an ownership change will
have occurred and all of the Company's then existing net operating losses will
qualify for use on a restricted or limited basis under Internal Revenue Code
Section 382.
Section 3.14 Title to Properties; Encumbrances. Other than as
set forth in the Disclosure Schedule, each of the Company and the Subsidiaries
has good and marketable title to all the real properties owned by it and good
title to all its leasehold interests (except for any fixtures which would be
deemed to constitute leasehold interests) and other properties and assets, as
reflected in the Balance Sheet, except for properties and assets sold since the
date of the Balance Sheet in the ordinary course of business consistent with
past practice, free and clear of all mortgages, title defects or objections,
liens, claims, charges, security interests or other Liens, except, with respect
to all such properties and assets, (i) Liens disclosed in the SEC Reports and
Liens incurred in the ordinary course of business in connection with the
purchase of property and assets effected after the date of the Balance Sheet and
(ii) Liens for current Taxes not yet due. The Company has provided to the
Purchaser a true and complete list of all real property leased by the Company or
any Subsidiary (collectively, the "Leases"). All such Leases are in full force
and effect and there are no existing defaults by the Company or any Subsidiary
thereunder.
Section 3.15 Environmental Laws. The Company and the
Subsidiaries are and have been in compliance with all applicable Environmental
Laws. Other than as set forth in the Disclosure Schedule, the Company and the
Subsidiaries have obtained all licenses, permits, certificates and other
authorizations and approvals required by any applicable Environmental Law. The
Company is not aware of any environmental condition with respect to any of its
properties which would reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any Subsidiaries has, and the Company has no knowledge
of any other person who has, caused any release, threatened release or disposal
of any Hazardous Material at any of their properties or facilities. The Company
has no knowledge that any of its or the Subsidiaries' properties or facilities
are adversely affected by any release, threatened release or disposal of a
Hazardous Material originating or emanating from any other property. Neither the
Company nor any of the Subsidiaries has manufactured, used, generated, stored,
treated, transported, disposed of, arranged for the disposal of, released, or
otherwise managed any Hazardous Material at their properties or facilities.
Neither the Company nor any of the Subsidiaries (i) has any liability for
response or corrective action, natural resources damage, or any other harm
pursuant to any Environmental Law, (ii) is subject to, has notice or knowledge
of, or is required to give any notice of any environmental claim or (iii) has
knowledge of any condition or occurrence which could form the basis of an
Environmental Claim against the Company, any Subsidiary or any of their
properties or facilities. The Company and the Subsidiaries'
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properties and facilities are not subject to any, and the Company has no
knowledge of any, imminent restriction on the ownership, occupancy, use or
transferability of their properties and facilities arising from any
Environmental Law or release, threatened release or disposal of any Hazardous
Material. There are no conditions or circumstances at any of their properties
and facilities that pose a risk to the environment or the health or safety of
any Person.
Section 3.16 Intellectual Property. Either the Company or a
Subsidiary owns, or is licensed or otherwise possesses legally enforceable
rights to use the Company Intellectual Property, and the consummation of the
Transactions will not alter or impair such ownership or rights to use in any
material respect. To the knowledge of the Company after due inquiry, there are
no oppositions, cancellations, invalidity proceedings, interferences or
re-examination proceedings presently pending with respect to the Company
Intellectual Property that, individually or in the aggregate, are reasonably
likely to have a Material Adverse Effect. To the Company's knowledge after due
inquiry, the conduct of the business of the Company and the Company Intellectual
Property do not infringe, conflict with or violate any Intellectual Property
rights or any other proprietary right of any other Person, and neither the
Company nor any Subsidiary has received any written notice from or is subject to
any pending claim by any other Person challenging the right of the Company or
any Subsidiary to use any material portion of the Company Intellectual Property.
Neither the Company nor any Subsidiary has made any claim of a violation or
infringement by others of its rights to or in connection with the Company
Intellectual Property which is still pending.
Section 3.17 Compliance with Laws. Each of the Company and the
Subsidiaries is in compliance with, has not violated and has not received any
notice or claim (or had any action filed or commenced against it) alleging any
violation of, any applicable law, rule or regulation of any Governmental Entity
which affects the business, properties or assets of the Company and its
Subsidiaries, and (ii) all licenses, permits, certificates and other
authorizations and approvals required under such laws, rules and regulations
have been duly obtained and are in full force and effect.
Section 3.18 Insurance. All material policies of fire,
liability, workmen's compensation and other forms of insurance owned or held by
the Company and each Subsidiary are in full force and effect, without premiums
past due or pending notice of cancellation, and provide adequate insurance
coverage for the properties and assets of the Company and each Subsidiary and
their respective businesses as presently being conducted. There are no pending
claims by the Company or the Subsidiaries, singly or in the aggregate, under
such policies in excess of $50,000, which in any event are not in excess of the
limitations of coverage set forth in such policies. The Company and the
Subsidiaries have taken all actions reasonably necessary to insure that their
independent contractors obtain and maintain adequate insurance. To the Company's
knowledge, the provision or reserves reflected in the Balance Sheet are adequate
for all risks for which the Company or any of its Subsidiaries self-insures.
Section 3.19 Material Agreements. Neither the Company nor any
Subsidiary (i) has any Material Agreements other than those filed as exhibits to
Company SEC Documents filed prior to the date hereof, copies of which have
previously been provided to the Purchaser, or (ii) is restricted by agreement
from carrying on its business anywhere in the world.
Section 3.20 Labor Matters. Except to the extent set forth in
the Company SEC Documents, neither the Company nor any Subsidiary is a party to
or otherwise bound by any collective bargaining agreement, contract or other
agreement with a labor union or organization, nor is any such agreement
presently being negotiated. Neither the Company nor any Subsidiary is bound by
any consent decree with, or citation by, any governmental agency relating to
employees or employment practices. To the Company's knowledge after due inquiry,
(i) there is no organizational effort or question concerning
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representation presently being made or threatened by or on behalf of any labor
union with respect to presently non-unionized employees of the Company or the
Subsidiaries, (ii) the Company and all Subsidiaries are in compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, and are not engaged in any unfair
labor practice, (iii) there is no unfair labor practice complaint against the
Company or any Subsidiary pending before the National Labor Relations Board,
(iv) there is no labor strike, dispute, walkout, slowdown, stoppage or lockout
actually pending or threatened against or involving the Company or any
Subsidiary, (v) no grievance nor any arbitration proceeding arising out of or
under collective bargaining agreements is pending and, (vi) no collective
bargaining agreement which is binding on the Company or any Subsidiary restricts
any of them from relocating or closing any of their operations.
Section 3.21 Disclosure. The Proxy Statement at the date
mailed to the Company's stockholders and at the time of the Special Meeting (i)
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 the light of the circumstances under which they were
made, not misleading and (ii) will comply in all material respects with the
provisions of applicable federal securities laws; provided, however, that no
representation is made by the Company with respect to statements made therein
based on information furnished by the Purchaser for inclusion in the Proxy
Statement.
Section 3.22 Brokers or Finders. No agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
brokers', finder's, financial advisor's fee or other commission or similar fee
in connection with any of the Transactions, other than the fees due to Xxxxxx
Xxxxxxxxxx Xxxxx LLC for its services in connection with the Transactions as set
forth in the Disclosure Schedule.
Section 3.23 Disclaimer of Implied Representations and
Warranties. Except for the representations and warranties given or made by the
Company in this Agreement, or given or made in any other document, instrument or
agreement executed by the Company pursuant to this Agreement, the Company hereby
disclaims any and all implied representations and warranties with respect to the
Company, the Shares, the Options and the Warrants.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
The Purchaser represents and warrants to the Company that:
Section 4.1 Organization; Capitalization. The Purchaser (i) is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and (ii) has full corporate power and authority to
carry on its business as now being conducted and to own the properties and
assets it now owns.
Section 4.2 Authorization; Validity of Agreement; Necessary
Action. The Purchaser has full corporate power and authority to execute and
deliver this Agreement and to consummate the Transactions. The execution,
delivery and performance by the Purchaser of this Agreement and the consummation
by the Purchaser of the Transactions, have been duly authorized by the Board of
Directors and the stockholders of the Purchaser and, except for any further
action which may need to be taken by the Purchaser in connection with the
Financing Arrangements, no other corporate action on the part of the Purchaser
is necessary to authorize the execution and delivery by the Purchaser of this
Agreement or the consummation of the Transactions. This Agreement has been duly
executed and delivered by the
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Purchaser and, assuming due and valid authorization, execution and delivery
thereof by the Company, is a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms.
Section 4.3 Consents and Approvals; No Violations.
(a) None of the execution, delivery or performance of this
Agreement by the Purchaser, the consummation by the Purchaser of the
Transactions or compliance by the Purchaser with any of the provisions of this
Agreement will (i) conflict with or result in any breach of any provision of the
Certificate of Incorporation or By-Laws of the Purchaser, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) or loss of any benefit under, or result in the
creation of any Lien upon any of the properties or assets of the Purchaser
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which the Purchaser is a party or by which the Purchaser or any of its
respective properties or assets may be bound, or (iii) violate any order, writ,
injunction, decree, statute, rule, regulation, permit or license applicable to
the Purchaser or any of its properties or assets, except in the case of the
foregoing clauses (ii) and (iii) such violations, breaches, defaults, losses of
creations of Liens that, individually or in the aggregate, are not reasonably
likely to impair the ability of the Purchaser to perform its obligations under
this Agreement.
(b) None of the execution, delivery or performance of this
Agreement by the Purchaser, the consummation by the Purchaser of the
Transactions or compliance by the Purchaser with any of the provisions of this
Agreement will require any filing or registration with, or permit,
authorization, consent or approval of, or notice to any Governmental Entity,
except for (A) any required filing of a premerger notification and report form
by the Company under the HSR Act, (B) the filing with the SEC of such reports
under the Exchange Act as may be required in connection with this Agreement and
the Transactions, (C) the approval of the Purchaser's stockholders, if required,
as set forth in Section 4.2 hereof , (D) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware and (E) such filings,
registrations, permits, authorizations, consents, approvals and notices as may
be required in connection with the Financing Arrangements.
Section 4.4 Information in Proxy Statement. None of the
information furnished by the Purchaser expressly for inclusion in the Proxy
Statement will, on the date mailed to stockholders and at the time of the
Special Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under which
they are made, not misleading.
Section 4.5 Purchaser's Operations. The Purchaser was formed
solely for the purpose of engaging in the Transactions and has not engaged in
any business activities or conducted any operations other than in connection
with the Transactions.
Section 4.6 Brokers or Finders. No agent, broker, investment
banker, financial advisor or other firm or person is entitled or will be
entitled to any brokers', finders', or financial advisor's fee or other
commission or similar fee in connection with any of the Transactions.
Section. 4.7 Proxy Statement. As promptly as practicable after
the execution of this Agreement, the Company shall prepare and file with the SEC
such preliminary proxy statement (the "Proxy Statement") as shall be necessary
in order to seek a vote of its shareholders on the Transaction. Each party shall
provide promptly to the other party all information concerning its (and its
subsidiaries')
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business, financial condition and affairs as may be necessary or reasonably
required in connection with the preparation or filing of the Proxy Statement and
shall otherwise cooperate and cause its representatives to cooperate with the
other party's representatives in the preparation and filing of such Proxy
Statement. The Company and the Purchaser shall use all reasonable efforts to
cause the Proxy Statement to be completed as soon as practicable and to
distribute copies of the proxy statement to the stockholders of the Company.
After the execution of this Agreement and prior to the mailing of the Proxy
Statement, and thereafter until the Closing Date, the Company and Purchaser
shall promptly advise each other of any facts which should be set forth in an
amendment or supplement to the Proxy Statement.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company
covenants and agrees that during the period from the date of this Agreement to
the Effective Time, except (i) as expressly contemplated by this Agreement, (ii)
as set forth in the Disclosure Schedule, or (iii) as agreed in writing by the
Purchaser after the date hereof, the Company shall, and shall cause each of its
Subsidiaries to, conduct its businesses only in the usual, regular and ordinary
course and substantially in the same manner as heretofore conducted, use its
reasonable best efforts to (A) preserve its business organization intact, (B)
keep available the services of its current officers and employees, and (C)
maintain its existing relations with customers, suppliers, creditors, business
partners and others having business dealings with it, to the end that the
goodwill and ongoing business of each of them shall be unimpaired at the
Effective Time. Without limiting the generality of the foregoing, and subject to
exceptions set forth in clauses (i) through (iii) above, during the period from
the date of this Agreement to the Effective Time the Company shall not and shall
not permit any Subsidiary to:
(a) (i) amend or propose to amend its Certificate of
Incorporation or By-Laws or similar organizational documents (other than in the
case of any Wholly-Owned Company Subsidiary), (ii) except as required for
issuances of any class or series of its capital stock by any directly or
indirectly Wholly-Owned Company Subsidiary to its parent in the ordinary course
of business consistent with past practice, issue, sell, grant, transfer, or
subject to any Lien any shares of any class or series of its capital stock or
Voting Debt, or securities convertible into or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, any shares of any
class or series of its capital stock or any Voting Debt, or any stock or phantom
appreciation rights or performance share awards or other rights to receive
Shares other than (x) the issuance of Shares reserved for issuance on the date
hereof pursuant to the exercise in accordance with their present terms of (A)
Options and (B) Warrants, in each case to the extent outstanding on the date
hereof and (y) the issuance of Shares in accordance with past practice pursuant
to the terms of the Company's stock option plan as in effect on the date of this
Agreement, (iii) declare, set aside or pay any dividend or make any other
actual, constructive or deemed distribution payable in cash, stock or property
with respect to any shares of any class or series of its capital stock, other
than the declaration, setting aside or payment of cash dividends from any
Wholly-Owned Company Subsidiary to its parent consistent with past practice,
(iv) split, combine or reclassify any shares of any class or series of its stock
or (v) redeem, purchase or otherwise acquire directly or indirectly any shares
of any class or series of its capital stock, or any instrument or security which
consists of or includes a right to acquire such shares;
(b) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any Subsidiary (other than the Merger);
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(c) (i) incur or assume any long-term debt or incur or assume
any short-term indebtedness, (ii) modify the terms of any indebtedness or other
liability, other than under its existing line of credit and modifications of
short term debt in the ordinary course of business consistent with past
practice, (iii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other Person, the Company or any of its directly or indirectly Wholly-Owned
Company Subsidiaries, enter into any "keep well" or other agreement to maintain
any financial condition of another Person or enter into any arrangement having
the economic effect of any of the foregoing or (iv) make any loans, advances or
capital contributions to, or investments in, any other Person (other than
inter-company indebtedness between the Company and any of its Wholly-Owned
Company Subsidiaries or between such Subsidiaries);
(d) (i) make or agree to make any capital expenditures in
excess of five (5%) over the prior fiscal year, (ii) enter into any agreement
that would be a Material Agreement had such agreement been entered into prior to
the date hereof, (iii) modify, amend or terminate any of its material contracts
or waive, release or assign any material rights or claims or (iv) enter into any
agreement, understanding or commitment that restrains, limits or impedes the
Company's or any of its Subsidiaries' ability to compete with or conduct any
business or line of business, including, but not limited to, geographic
limitations on the Company's or any of its Subsidiaries' activities;
(e) (i) enter into any collective bargaining agreement, (ii)
increase by greater than five (5%) over the prior fiscal year the compensation,
including bonuses, payable or to become payable to any of its officers (i.e.
vice presidents and above) or directors, (iii) enter into or amend any
employment, severance, retention, consulting, termination or other agreement
with, or grant any additional retention, severance or termination pay to, any of
its officers, directors or employees, (iv) adopt any plan, arrangement or policy
which would become a Plan if such adoption would create or increase any
liability or obligation on the part of the Company or any Subsidiary or, except
as required by law, amend any Plan, (v) amend the terms of any Option, (vi)
change the manner in which contributions to any pension or retirement plan are
made or the basis on which such contributions are determined (including
actuarial assumptions used to calculate funding obligations) or (vii) make any
loans to any of its officers, directors, employees, Affiliates, agents or
consultants or any change in its existing borrowing or lending arrangements for
or on behalf of any of such Persons pursuant to an employee benefit plan or
otherwise;
(f) acquire or enter into any agreement or transaction
relating to the acquisition, by merger, consolidation with or the purchase of a
substantial portion of the assets of, or by any other manner, any business or
any corporation, limited liability company, partnership, joint venture,
association or other business organization or division thereof;
(g) transfer, lease (as lessor), license (as licensor), sell,
dispose of or subject to any Lien (including securitization) any assets, except
in the ordinary course of business; or
(h) pay, repurchase, discharge or satisfy any of its claims,
liabilities or obligations (absolute, accrued, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of business
consistent with past practice, of claims, liabilities or obligations reflected
or disclosed in the Balance Sheet (or the notes thereto) or incurred since the
Balance Sheet Date;
(i) permit any insurance policy naming it as a beneficiary or
a loss payee to be cancelled or terminated without notice to Purchaser;
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(j) (i) change any of the accounting methods used by it unless
required by GAAP or (ii) make any material tax election or change any material
tax election already made, adopt any material tax accounting method, change any
material tax method unless required by GAAP or any governmental authority or
regulation, enter into any closing agreement or settle or compromise any
material Tax claim or assessment or waive the statute of limitations in respect
of any such material Tax claim or assessment;
(k) take, or agree to commit to take, any action which it
believes when taken would cause any representation or warranty of the Company
contained herein that is qualified as to materiality from being untrue or
inaccurate in any respect or any such representation or warranty that is not so
qualified from being untrue or inaccurate in any material respect or that would
materially impair the ability of the Company to consummate the Merger in
accordance with the terms of this Agreement or materially delay such
consummation; and
(l) enter into an agreement, contract, commitment or
arrangement to do any of the foregoing, or to authorize, recommend, propose or
announce an intention to do any of the foregoing.
Section 5.2 No Solicitation of Competing Transaction.
(a) Neither the Company nor any Subsidiary or Affiliate of the
Company shall (and the Company shall not authorize or permit the officers,
directors, employees, representatives and agents of the Company, each Company
Subsidiary and each Affiliate of the Company, including, but not limited to,
investment bankers, attorneys and accountants, to), directly or indirectly
through any other Person, (i) solicit, initiate or encourage (including by way
of furnishing information), or take any other action designed to facilitate any
Acquisition Proposal, or afford access to the properties, books or records of
the Company or any of its Subsidiaries to any Person or group in connection with
any Acquisition Proposal, or (ii) participate in or initiate discussions or
negotiations concerning any Acquisition Proposal; provided, however, that
nothing contained in this Section 5.2 or any other provision hereof shall
prohibit the Company or the Company's Board of Directors from (A) taking and
disclosing to the Company's stockholders a position with respect to a tender or
exchange offer by a third party pursuant to Rules 14d-9 and 14e-2 promulgated
under the Exchange Act, or (B) making such disclosure to the Company's
stockholders as, in the good faith judgment of the Company's Board of Directors,
after receiving advice from outside counsel, is required under applicable law,
provided that the Company may not, except as permitted by Section 5.2(b),
withdraw or modify, or propose to withdraw or modify, its position with respect
to the Merger or approve or recommend, or propose to approve or recommend any
Acquisition Proposal, or enter into any letter of intent, agreement in principle
or agreement concerning any Acquisition Proposal. Upon execution of this
Agreement, the Company will immediately cease any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. Notwithstanding the foregoing, prior to the date of the
Special Meeting the Company may furnish information concerning its business,
properties or assets to any Person or group pursuant to customary
confidentiality agreements, and may negotiate and participate in discussions and
negotiations with such Person or group concerning a Superior Proposal if: (x)
such Person or group has, on an unsolicited basis (and otherwise in the absence
of a breach by the Company of the provisions of this Section 5.2(a)), submitted
a bona fide written proposal to the Company's Board of Directors relating to any
such Superior Proposal which the Company's Board of Directors determines in good
faith represents a superior transaction to the Merger and, in the good faith
judgement of the Company's Board of Directors, after receipt of advice from the
Company's financial advisors, for which financing is committed or which such
entity or group has the financial capacity to consummate, and (y) in the good
faith judgement of the Company's Board of Directors such action is required to
discharge the fiduciary duties of Company's Board of Directors to the Company's
stockholders under applicable law, determined only after receipt of (i) a
written opinion from the Company's investment banking firm that the Superior
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Proposal is superior, from a financial point of view, to the Merger, and (ii)
the legal advice of independent legal counsel to the Company that the failure to
provide such information or access or to engage in such discussions or
negotiations would cause the Company's Board of Directors to violate its
fiduciary duties to the Company's stockholders under applicable law.
The Company will immediately notify the Purchaser of
the existence of any request for information, proposal, discussion, negotiation
or inquiry received by the Company, and the Company will immediately communicate
to the Purchaser the terms of any proposal, discussion, negotiation or inquiry
which it may receive (and will immediately provide to the Purchaser copies of
any written materials received by the Company in connection with such proposal,
discussion, negotiation or inquiry) and the identity of the party making such
proposal or inquiry or engaging in such discussion or negotiation. The Company
will keep the Purchaser informed of the status and details (including amendments
or proposed amendments) of any such request or Acquisition Proposal. The Company
will promptly provide to the Purchaser any non-public information concerning the
Company provided to any other party which was not previously provided to the
Purchaser.
(b) Except as set forth below in this subsection (b), neither
the Company's Board of Directors nor any committee thereof shall (i) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to the Purchaser,
the approval or recommendation by the Company's Board of Directors or any such
committee this Agreement or the Merger, (ii) approve or recommend or propose to
approve or recommend, any Acquisition Proposal or (iii) cause the Company (or
any Subsidiary) to enter into any letter of intent, agreement in principle or
agreement with respect to any Acquisition Proposal. Notwithstanding the
foregoing, the Company's Board of Directors, in response to a Superior Proposal
which was not solicited by the Company and which did not otherwise result from a
breach of Section 5.2(a), may terminate this Agreement in order to enter into a
letter of intent, agreement in principle or agreement with respect to a Superior
Proposal, but only at a time that is prior to the date of the Special Meeting
and is after the fifth (5th) business day following the Purchaser's receipt of
written notice from the Company advising the Purchaser that the Company's Board
of Directors has received a Superior Proposal which it intends to accept,
specifying the material terms and conditions of such Superior Proposal,
identifying the person making such Superior Proposal; provided, however, that
prior to such termination the Company shall have caused its financial and legal
advisors to negotiate with the Purchaser; and, provided, further, however, that
prior to such termination the Purchaser has not made an offer that the Company's
Board of Directors determines in good faith after consulting with its financial
advisors is at least as favorable to the stockholders of the Company as the
Superior Proposal which the Company proposes to accept.
Section 5.3 Stockholders' Meeting.
(a) The Company, acting through its Board of Directors, shall,
in accordance with applicable law, as promptly as practicable following the
execution of this Agreement:
(i) duly call, give notice of, convene and hold a
special meeting of its stockholders for the purpose of considering and taking
action upon the approval of the Merger and the adoption of this Agreement (the
"Special Meeting");
(ii) prepare and file with the SEC a preliminary form
of the Proxy Statement relating to the Merger and this Agreement (which Proxy
Statement shall include all information concerning the Company and the Purchaser
required to be set forth therein pursuant to the Exchange Act) and use its best
efforts to obtain and furnish the information required by the SEC to be included
in the
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Proxy Statement and, after consultation with the Purchaser, to respond promptly
to any comments made by the SEC with respect to the preliminary proxy;
(iii) file a definitive form of the Proxy Statement
reflecting compliance with comments and requests of the SEC in accordance with
the Exchange Act as the Company and the Purchaser shall deem appropriate;
(iv) cause a definitive Proxy Statement, including
any amendment or supplement thereto to be mailed to its stockholders, provided
that no amendment or supplement to such Proxy Statement will be made by the
Company without consultation with the Purchaser and its counsel and shall
include therein (A) the recommendation of the Company's Board of Directors that
stockholders of the Company vote in favor of the approval of the Merger and the
adoption of this Agreement, except as may be otherwise required for Company's
Board of Directors to comply with its fiduciary duties to stockholders imposed
by law as advised by independent legal counsel, and (B) the Fairness Opinion;
(v) use all reasonable efforts to solicit from its
stockholders proxies in favor of the Merger and shall take all other action
necessary or, in the reasonable opinion of the Purchaser, advisable to secure
any vote of its stockholders required under the DGCL and its Certificate of
Incorporation and By-Laws to effect the Merger.
(b) The Purchaser will provide the Company with the
information concerning the Purchaser and its Affiliates required by the Exchange
Act to be included in the Proxy Statement.
(c) Each of the Company and the Purchaser shall consult and
confer with the other and the other's counsel regarding the Proxy Statement and
each shall have the opportunity to comment on such Proxy Statement and any
amendments and supplements thereto before the Proxy Statement, and any
amendments or supplements thereto, are filed with the SEC or mailed to Company
stockholders. Each of the Company and the Purchaser will provide to the other
copies of all correspondence between it (or its advisors) and the SEC relating
to the Proxy Statement. The Company and the Purchaser agree that all telephonic
calls and meetings with the SEC regarding the Proxy Statement and the
Transactions shall include representatives of each of the Company and the
Purchaser.
(d) The Purchaser shall vote, or cause to be voted, all Shares
owned by the Purchaser in favor of the approval of the Merger and the approval
and adoption of this Agreement.
Section 5.4 Access to Information. The Company shall (and
shall cause each Subsidiary to) afford to the officers, employees, accountants,
counsel, financing sources and other representatives of the Purchaser, full
access during the period prior to the Effective Time, to all of its officers,
employees, accountants, properties, offices and other facilities, books,
contracts, commitments and records and, during such period, the Company shall
(and shall cause each of its Subsidiaries to) furnish promptly to the Purchaser
(a) a copy of each report, schedule, and other document filed or received by it
during such period pursuant to the requirements of federal securities laws and
(b) all other information concerning its business, properties and personnel as
the Purchaser may reasonably request. Access shall include the right to conduct
such environmental studies as the Purchaser, in its discretion, shall deem
appropriate. The rights and obligations of the Purchaser hereunder, whether
based on the Company's representations, warranties, covenants and obligations or
any facts or circumstances applicable to the conditions to the Purchaser's
obligations hereunder, will not be affected by any investigation conducted by
the Purchaser or any knowledge acquired (or capable of being acquired) by the
Purchaser at any time, whether before or after the execution and delivery of
this Agreement, with respect to the accuracy or inaccuracy of or
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compliance with any such representation, warranty, covenant or obligation, or
the existence or non-existence of any applicable fact or circumstance.
Section 5.5 All Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement, the
Purchaser and the Company agree to use all reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable (subject to any applicable laws) to consummate and make
effective the Merger and the other Transactions as promptly as practicable
following the execution hereof, including the taking of all actions necessary to
obtain all approvals, consents, orders, exemptions or waivers of or by any third
party.
(b) Subject to the terms and conditions of this Agreement and
to any applicable laws, the parties hereto shall:
(i) as promptly as practical after the execution of
this Agreement, (A) file any required notification with respect to the Merger
and the other Transactions with any other Governmental Entity and (B) thereafter
promptly respond to all inquiries or requests for information or documents
received from any Governmental Entity;
(ii) in connection with the Merger and other
Transactions, (A) consult with each of the parties with respect to all filings
to be made by any party to a Governmental Entity and any information which may
be supplied by any party to a Governmental Entity; (B) promptly make any
required submissions under the HSR Act other than those referred to in clause
(i) above and promptly respond to all inquiries or requests received from the
FTC or the Department of Justice for additional information or documents; (C)
excluding information and materials which are subject to attorney client
privilege or are otherwise deemed by the Purchaser to be materials which are not
relevant for the Company's review, provide information to the other party which
information would be considered reasonably necessary to accomplish any filings
and, upon request, provide copies of any filings; and (D) promptly inform the
other parties of any communication from a Governmental Entity with respect to
the Merger or Transactions and, where practical, permit the other party to
review in advance any proposed communication to a Governmental Entity;
(iii) prior to any meeting with any Governmental
Entity in respect of any filings, investigation or other inquiry, consult with
the other parties and, to the extent permitted by such Governmental Entity, give
the other parties the opportunity to attend and participate, in each case to the
extent practicable;
(iv) to the extent that transfers, amendments or
modifications of permits or licenses granted by Government Entities (including
environmental permits) are required as a result of the execution of this
Agreement or consummation of any of the Transactions, use all reasonable efforts
to effect such transfers, amendments or modifications;
(v) not take any action after the date hereof that
would reasonably be expected to materially delay the obtaining of, or result in
not obtaining, any permission, approval or consent from any Governmental Entity
necessary to be obtained prior to Closing; and
(vi) subject to the limitations set forth in Section
5.5(c) hereof, use all reasonable efforts (and cooperate amongst themselves with
respect thereto) to contest and resist any action by any third party or
Governmental Entity, whether by legislative, administrative or judicial action,
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that challenges or seeks to prevent or prohibit the consummation of the Merger
or any other Transaction. Notwithstanding the foregoing, nothing in this
Agreement shall be deemed to require the Purchaser to commence any litigation
against any entity in order to facilitate the consummation of any of the
Transactions.
(c) Subject to the last sentence of Section 5.5(b)(vii), each
of the parties shall use their reasonable efforts to (i) avoid the entry of, or
to have vacated or terminated, any decree, order, or judgment that would
restrain or delay the Closing including defending through litigation a motion
for preliminary injunction asserted in any court by any third party and (ii)
take all steps necessary to avoid or eliminate any impediment under any
antitrust, competition, or trade regulation law that may be asserted by any
Governmental Entity with respect to the Merger or any other Transaction so as to
enable the Closing to occur as soon as reasonably possible, including proposing,
negotiating, committing to and effecting, by consent decree, hold separate
order, or otherwise, the sale, divestiture or disposition of such assets or
businesses of the Company (or any of the Subsidiaries) or otherwise take or
commit to take any actions that may be required in order to avoid the entry of,
or to effect the dissolution of any injunction, temporary restraining order, or
other order in any suit or proceeding which would otherwise have the effect of
preventing or delaying the Closing.
(d) Notwithstanding the foregoing or any other provision of
this Agreement, nothing in this Section 5.5 shall limit a party's right to
terminate this Agreement pursuant to Section 7.1 so long as such party has up to
then complied with its obligations under this Section 5.5.
Section 5.6 Financing. The Purchaser shall use all reasonable
efforts to obtain debt and equity financing arrangements necessary for the
consummation of the Merger (the "Financing Arrangements"). The Company shall
fully cooperate with and assist the Purchaser in all reasonable respects in an
effort to obtain the financing called for in the Financing Arrangements and
shall take or cause to be taken all appropriate action in furtherance of such
cooperation and assistance, including the preparation of any certificates or
disclosure documents requested by the Purchaser in order to facilitate
consummation of the financing. The obligations set forth in this Section 5.6
shall not be construed to benefit or confer any rights upon any person other
than the parties hereto.
Section 5.7 Publicity. The initial press release with respect
to the execution of this Agreement shall be a joint press release acceptable to
the Purchaser and the Company. Thereafter, until the Effective Time, or the date
the Transactions are terminated or abandoned pursuant to Article VII, neither
the Company, the Purchaser nor any of their respective Affiliates shall issue or
cause the publication of any press release or otherwise make any public
announcement with respect to the Merger, this Agreement or the other
Transactions without prior consultation with and review by the other party,
except as may be required by law or by any listing agreement with a national
securities exchange or trading market, in which case such party shall use its
best efforts prior to any such publication or announcement to consult with, and
afford the opportunity to review to, the other parties.
Section 5.8 Notification of Certain Matters. The Company shall
give prompt notice to the Purchaser of (i) the occurrence or non-occurrence of
any event the occurrence or non-occurrence of which would cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Closing and (ii) any
material failure of the Company, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 5.8
shall not limit or otherwise affect the remedies available hereunder to the
Purchaser.
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Section 5.9 Employee Matters. The Purchaser agrees that during
the period effective as of the Effective Time until December 31, 2001, the
Surviving Company and its Subsidiaries and successors shall provide the Retained
Employees with employee plans and programs which provide benefits that are no
less favorable in the aggregate to those provided to such Retained Employees
immediately prior to the date hereof. With respect to such benefits, service
accrued by such Retained Employees during employment with the Company and its
Subsidiaries prior to the Effective Time shall be recognized for all purposes,
except to the extent necessary to prevent duplication of benefits. Effective
January 1, 2002, or earlier at the Purchaser's election, the Purchaser shall
provide to the Retained Employees employee benefits pursuant to employee benefit
plans and programs maintained by the Purchaser providing coverage and benefits
which are no less favorable than those provided to employees of the Purchaser in
positions comparable to positions held by the Retained Employees.
Section 5.10 State Takeover Laws. If any state takeover
statute becomes or is deemed to become applicable to the Agreement, the Merger
or any other Transactions, the Company shall use its best efforts to render such
statute inapplicable to all of the foregoing.
Section 5.11 Deposits by Purchaser. The Purchaser has
previously deposited into an escrow account the amount of $250,000 and, upon the
execution of this Agreement, the Purchaser shall deposit an additional $250,000
into such escrow account (collectively, the "Deposits"), which Deposits shall be
disbursed upon termination of this Agreement in the manner set forth either in
Section 7.2(b) or 7.2(c) hereof.
Section 5.12 Affiliate Stockholder Agreements. Simultaneous
with the execution hereof, certain stockholders of the Company listed in the
Disclosure Schedule (collectively, the "Affiliate Stockholders") will execute
and deliver to the Purchaser irrevocable proxies in substantially the form
attached hereto as Exhibit C authorizing the Purchaser to vote all shares of
Common Stock held by such stockholders in favor of the Merger. So long as the
Voting Agreement attached hereto as Exhibit C has not been terminated, Purchaser
agrees to vote all shares of Common Stock it or any of its affiliated
stockholders owns and those of the Affiliate Stockholders it has the right to
vote pursuant to the terms of the proxies executed and delivered by such
stockholders in favor of the Merger.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect
the Merger. The respective obligation of each party to effect the Merger shall
be subject to the satisfaction at or prior to the Effective Time of each of the
following conditions, any and all of which may be waived in whole or in part by
the Company or the Purchaser, as the case may be, to the extent permitted by
applicable law:
(a) The Stockholder Approval shall have been obtained in
accordance with the DGCL and the Company's Certificate of Incorporation and
By-Laws.
(b) No statute, rule or regulation shall have been enacted or
promulgated by any Governmental Entity and no injunction, temporary restraining
order, writ or order of any nature of a court of competent jurisdiction shall be
in effect enjoining, restraining or otherwise precluding consummation of the
Merger.
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(c) Any applicable waiting period applicable to consummation
of the Merger under the HSR Act shall have expired or been terminated and no
action by the Department of Justice or FTC challenging or seeking to enjoin the
consummation of this transaction shall have been instituted and be pending.
(d) The Company shall have received the opinion of Xxxxxx
Xxxxxxxxxx Xxxxx LLC, dated as of the date of the Proxy Statement (the "Fairness
Opinion"), to the effect that, as of such date, the Merger Consideration to be
received by the holders of the Shares is fair to the holders of the Shares from
a financial point of view and the Fairness Opinion shall not have been
withdrawn, revoked or annulled or adversely modified in any material respect.
Section 6.2 Conditions to the Obligations of the Company to
Effect the Merger. The obligations of the Company to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of each of the
following conditions, any and all of which may be waived in whole or in part by
the Company to the extent permitted by applicable law:
(a) Each of the representations and warranties of the
Purchaser set forth in this Agreement (without giving effect to any limitation
as to "materiality", "material" or "Material Adverse Effect" set forth therein)
shall be true and correct as of the date of this Agreement and (except those
representations and warranties that address matters only as of a particular date
which need be true and accurate as of such date) as of immediately before the
Effective Time to the extent that the cumulative effect of all such failures to
be so true and correct are not reasonably likely to have a material adverse
effect on the Purchaser and its subsidiaries, taken as a whole and the Company
shall have received a certificate of an executive officer of the Purchaser,
dated as of the Closing Date, to such effect.
(b) The Company shall have received, at or prior to the
Closing, certified resolutions duly adopted by the Board of Directors of the
Purchaser approving the Merger, the execution and delivery of this Agreement and
all other necessary corporate action to enable the Purchaser to comply with the
terms of this Agreement.
(c) The Purchaser shall have performed and complied in all
material respects with all obligations, agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the Closing
and the Company shall have received a certificate of an executive officer of
Purchaser, dated as of the Closing Date, to such effect.
Section 6.3 Conditions to the Obligations of the Purchaser to
Effect the Merger. The obligations of the Purchaser to effect the Merger shall
be subject to the satisfaction at or prior to the Effective Time of each of the
following conditions, any and all of which may be waived in whole or in part by
the Purchaser to the extent permitted by applicable law:
(a) Each of the representations and warranties of the Company
set forth in this Agreement (without giving effect to any limitation as to
"materiality", "material" or "Material Adverse Effect" set forth therein) shall
be true and correct as of the date of this Agreement and (except those
representations and warranties that address matters only as of a particular date
which need be true and accurate as of such date) as of immediately before the
Effective Time to the extent that the cumulative effect of all such failures to
be so true and correct are not reasonably likely to have a Material Adverse
Effect and the Purchaser shall have received a certificate of an executive
officer of the Company, dated as of the Closing Date, to such effect.
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(b) The Company shall have performed and complied in all
material respects with all obligations, agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the Closing
and the Purchaser shall have received a certificate of an executive officer of
the Company, dated as of the Closing Date, to such effect.
(c) The Purchaser shall have received, at or prior to the
Closing, certified resolutions duly adopted by the Board of Directors of the
Company approving the Merger, the execution and delivery of this Agreement and
all other necessary corporate action to enable the Company to comply with the
terms of this Agreement.
(d) There shall not have occurred any Material Adverse Effect
(or any development that, insofar as reasonably can be foreseen, is reasonably
likely to have a Material Adverse Effect) since the end of the most recently
completed fiscal year of the Company.
(e) All Governmental Approvals required in connection with
consummation of the Transactions shall have been obtained, been filed or have
occurred, other than Governmental Approvals the failure of which to obtain, make
or occur, individually or in the aggregate, are not reasonably likely to have a
Material Adverse Effect; provided, however, that a Governmental Approval shall
not be deemed to have been obtained if in connection with the grant thereof
there shall have been an imposition by any Governmental Entity of any condition,
requirement or restriction, or any other action directly or indirectly related
to such grant taken by such Governmental Entity, that (i) imposes any
limitations on the Purchaser's ownership or operation (or that of any of their
respective Subsidiaries or Affiliates) of any portion of their or the Company's
businesses or assets, or seeks to compel the Purchaser to dispose of or hold
separate any portion of the business or assets of the Company or the Purchaser
and their respective Subsidiaries, or (ii) is reasonably likely to have a
Material Adverse Effect or a material adverse effect on the Purchaser.
(f) The proceeds of the Financing Arrangements shall have been
obtained by the Purchaser.
(g) The total number of Dissenting Shares shall not exceed 5%
of the outstanding shares of Company Common Stock at the Effective Time.
(h) X.X. Xxxxxx shall have entered into or otherwise agreed to
renew its contract with the Company for a period of at least five (5) years, and
X.X. Penney shall have consented or agreed to consent to the Transactions in
writing.
(i) Xxxxxx'x Bay shall have confirmed in writing its oral
consent to the Merger for the purposes of its license agreement with the
Company.
ARTICLE VII
TERMINATION
Section 7.1 Termination. The Transactions may be terminated or
abandoned at any time prior to the Effective Time:
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(a) By the mutual written consent of the Purchaser and the
Company;
(b) By either of the Company or the Purchaser:
(i) if the Merger has not been consummated on or
prior to November 30, 2001; provided, however, that the right to terminate this
Agreement under this Section 7.1(b)(i) shall not be available to any party whose
material breach of any representation, warranty, covenant or agreement set forth
in this Agreement has been the cause of, or resulted in, the failure of the
Merger to be consummated on or before such date;
(ii) if the stockholders of the Company fail to
approve the Merger and adopt this Agreement at the Special Meeting (including
any postponement or adjournment thereof); or
(iii) if any Governmental Entity shall have issued an
order, decree or ruling or taken any other action which temporarily,
preliminarily or permanently restrains, enjoins or otherwise prohibits the
Merger; provided, however, that the party seeking to terminate this Agreement
pursuant to this Section 7.1(b)(iii) shall have complied with its obligations
under Section 5.5(a) hereof.
(c) By the Company:
(i) in connection with entering into a definitive
agreement as permitted by Section 5.2(b) hereof, provided the Company has
complied with all provisions thereof, including the notice provisions therein,
and with the applicable requirements of Section 7.2(d) hereof, including the
payment to the Purchaser of the Termination Fee;
(ii) if the Purchaser shall have breached in any
material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach cannot be or has not been
cured within thirty (30) days after the giving of written notice by the Company
to the Purchaser;
or
(d) By the Purchaser:
(i) if, the Company's Board of Directors shall have
(x) failed to make, withdrawn, modified or changed in a manner adverse to the
Purchaser its approval or recommendation of this Agreement or the Merger, (y)
shall have made any recommendation with respect to an Acquisition Proposal other
than a recommendation to reject such Acquisition Proposal or (z) shall have
executed a letter of intent, agreement in principle or definitive agreement
relating to an Acquisition Proposal with a Person other than the Purchaser or
its Affiliates; or
(ii) if the Company shall have breached in any
material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach cannot be or has not been
cured within thirty (30) days after the giving of written notice by the
Purchaser to the Company.
Section 7.2 Effect of Termination.
(a) In the event of the termination of this Agreement by any
party hereto pursuant to the terms of this Agreement, (i) written notice thereof
shall forthwith be given to the other party or parties
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specifying the provision hereof pursuant to which such termination of the
Transactions is made, (ii) this Agreement shall be void and of no further force
and effect, except that this Section 7.2 and Article IX hereof shall survive any
termination of this Agreement, and (iii) there shall be no liability on the part
of the Purchaser or the Company, except for breach of this Agreement prior to
such termination and except as set forth in Section 7.2(c) below.
(b) Upon the termination of this Agreement, the Deposits (as
defined in Section 5.11) shall be paid to the Purchaser; provided, however, that
the Deposits shall be paid to the Company if and only if:
(i) this Agreement is terminated (A) by the Company
pursuant to the terms of Section 7.1(c)(ii) hereof, or (B) by either the Company
or the Purchaser after the date specified in Section 7.1(b)(i) solely as a
result of the failure of the Purchaser to satisfy the condition to Closing set
forth in Section 6.3(g) above (and not the failure of the satisfaction of any
other condition to Closing); and
(ii) at the time of such termination, the Purchaser
is not then otherwise entitled to terminate this Agreement pursuant to the
provisions of Section 7.1(d) hereof.
(c) If:
(i) either the Company or the Purchaser terminates
this Agreement pursuant to Section 7.1(b)(i) or Section 7.1(b)(ii) hereof and
prior to such termination (x) there shall have been publicly announced another
Acquisition Proposal or (y) any Person other than the Purchaser or any of their
Affiliates shall have acquired at least fifteen percent (15%) of the outstanding
Shares and, in any such case, any Acquisition Proposal shall be consummated
within twelve (12) months of such termination (provided that for purposes of
this Section 7.2(b)(i) hereof the term "Acquisition Proposal" shall have the
meaning assigned to such term in the definition contained in Appendix A hereof
except that the references to "15%" in such definition shall be deemed to be
references to "35%");
(ii) the Company terminates this Agreement pursuant
to Section 7.1(c)(i) hereof; or
(iii) the Purchaser terminates this Agreement
pursuant to Section 7.1(d)(i) hereof;
then the Company shall pay to the Purchaser an amount equal to the Termination
Fee. The Termination Fee shall be paid in same day funds (x) no later then the
date of such termination, in the case of clauses (ii) and (iii) immediately
above and (y) no later than the date on which the Acquisition Proposal referred
to in clause (i) immediately above is consummated, in the case of clause (i)
immediately above. In the event that the Company fails promptly to pay the
amount due pursuant to this Section 7.2(c), and, in order to obtain such
payment, the Purchaser commences a suit which results in a judgment against the
Company, the Company shall pay to the Purchaser its costs and expenses
(including attorneys' fees, costs and expenses) in connection with such suit,
together with interest, compounded annually, on the amount of the Termination
Fee at the prime rate of Citibank, N.A., or its successor, in effect on the date
such payment was required to be made.
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ARTICLE VIII
RULES OF INTERPRETATION
Section 8.1 Rules of Interpretation.
(a) When a reference is made in this Agreement to a section or
article, such reference shall be to a section or article of this Agreement
unless otherwise clearly indicated to the contrary.
(b) Whenever the words "include", "includes" or "including"
are used in this Agreement they shall be deemed to be followed by the words
"without limitation."
(c) The words "hereof", "herein" and "herewith" and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
article, section, paragraph, exhibit and schedule references are to the
articles, sections, paragraphs, exhibits and schedules of this Agreement unless
otherwise specified.
(d) The plural of any defined term shall have a meaning
correlative to such defined term, and words denoting any gender shall include
all genders. Where a word or phrase is defined herein, each of its other
grammatical forms shall have a corresponding meaning.
(e) A reference to any party to this Agreement or any other
agreement or document shall include such party's successors and permitted
assigns.
(f) A reference to any legislation or to any provision of any
legislation shall include any modification or re-enactment thereof, any
legislative provision substituted therefor and all regulations and statutory
instruments issued thereunder or pursuant thereto.
(g) The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Fees and Expenses. (a) Except as set forth in
Section 7.2, all costs and expenses incurred in connection with this Agreement
and the consummation of the Transactions shall be paid by the party incurring
such expenses.
Section 9.2 Amendment and Modification. Subject to applicable
law and Section 1.3, this Agreement may be amended, modified and supplemented in
any and all respects, whether before or after any vote of the stockholders of
the Company contemplated hereby, by written agreement of the parties hereto, by
action taken by their respective boards of directors, at any time prior to the
Closing Date with respect to any of the terms contained herein; provided,
however, that after the approval of this Agreement by the stockholders of the
Company, no such amendment, modification or supplement shall reduce the amount
or change the form of the Merger Consideration.
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Section 9.3 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to the Purchaser, to:
NOROB Group, Inc.
X.X. Xxx 0000
Xxxxxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxx, III
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
if to the Company, to:
U.S. Vision, Inc.
0 Xxxxxx Xxxxx
Xxxx Xxxx Xxxxxxxxxx Xxxx
Glendora, New Jersey 08029
Attention: Xxxxxxx X. Xxxxxxxx, Xx.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx, Lidji & Werbner
4400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Section 9.4 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other party.
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Section 9.5 Entire Agreement; No Third Party Beneficiaries.
This Agreement, (including the documents and the instruments referred to
herein): constitutes the entire agreement and supersedes all prior agreements,
understandings representations and warranties, both written and oral, among the
parties with respect to the subject matter hereof, including without limitation
those certain letter agreements among the Company, an affiliate of the Purchaser
and certain of the Stockholders of the Company dated December 27, 2000 and May
4, 2001, respectively.
Section 9.6 Severability. Any term or provision of this
Agreement that is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction or other authority declares that any term or
provision hereof is invalid, void or unenforceable, the parties agree that the
court making such determination shall have the power to reduce the scope,
duration, area or applicability of the term or provision, to delete specific
words or phrases, or to replace any invalid, void or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision.
Section 9.7 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
giving effect to the principles of conflicts of law thereof.
Section 9.8 Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that 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 in any court of the
United States located in the State of Delaware or in Delaware state court, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (a) consents to submit itself to
the personal jurisdiction of any Federal court located in the State of Delaware
or any Delaware state court in the event any dispute arises out of this
Agreement or any of the Transactions contemplated by this Agreement, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and (c) agrees that it will not
bring any action relating to this Agreement or any of the Transactions
contemplated by this Agreement in any court other than a Federal or state court
sitting in the State of Delaware.
Section 9.9 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 the proviso to Section 9.2, waive compliance by the
other parties with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed 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 those
rights.
Section 9.10 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party, except that Purchaser may assign, in its
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sole discretion, any or all of its rights, interests and obligations hereunder
to any company or entity which is at least 90% owned by the Purchaser, directly
or indirectly, but no such assignment shall release or discharge NOROB Group,
Inc. from any liabilities or obligations under this Agreement it may have as the
original Purchaser. 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.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.
NOROB GROUP, INC.
By: /s/
-------------------------------
Name: Xxxxxx X. Xxxxxxxx III
Title: President
U.S. VISION, INC.
By: /s/
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: President
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APPENDIX A
DEFINITIONS
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context clearly requires otherwise:
"Acquisition Proposal" shall mean any inquiry, proposal or
offer from any Person relating to any direct or indirect acquisition or purchase
of a business that constitutes 15% or more of the net revenues, net income or
the assets of the Company and its Subsidiaries, taken as a whole, or 15% or more
of any class of equity securities of the Company or any of its Subsidiaries, any
tender offer or exchange offer that if consummated would result in any Person
beneficially owning 15% or more of any class of equity securities of the Company
or any of its Subsidiaries, or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries, other than the transactions contemplated by
this Agreement.
"Affiliate" shall have the meaning set forth in Rule 12b-2 of
the Exchange Act.
"Affiliate Stockholder" shall have the meaning set forth in
Section 5.12 of the Agreement.
"Associate" shall have the meaning set forth in Rule 12b-2 of
the Exchange Act.
"Balance Sheet" shall mean the balance sheet of the Company
and its consolidated subsidiaries included in the Company's Form 10-K filed for
the period ended January 31, 2001.
"Balance Sheet Date" shall mean the date of the Balance Sheet.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which commercial banks in New York City, New York are
authorized or required by law or executive order to remain closed.
"Closing Date" shall mean the closing date referred to in
Section 1.3 of the Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Company Agreement" shall mean any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which the Company or any Subsidiary is a party or by which any of them or any
of their properties or assets may be bound.
"Company Common Stock" shall mean the common stock, par value
$.01 per share, of the Company.
"Company Intellectual Property" shall mean all Intellectual
Property that is currently used in the business of the Company or any Subsidiary
or that is necessary to conduct the business of the Company and its Subsidiaries
as presently conducted or as currently proposed to be conducted.
"Company SEC Documents" shall mean each form, report,
schedule, statement and other document required to be filed by the Company since
January 31, 1998, under the Exchange Act or the
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Securities Act, including any amendment to such document, whether or not such
amendment is required to be so filed, including any such as are filed after the
date of the Agreement.
"Company's knowledge" or "best knowledge of the Company" shall
mean the knowledge of the directors and officers of the Company after reasonable
inquiry.
"Converted Shares" shall mean the shares of Purchaser Common
Stock owned of record and beneficially by the stockholders of the Purchaser.
"Department of Justice " shall mean the Antitrust Division of
the U.S. Department of Justice.
"Disclosure Schedule" shall mean the disclosure schedule
prepared and signed by the Company and attached to the Agreement as Exhibit B.
"Dissenting Shares" shall mean any Shares as to which the
holder thereof has demanded payment with respect to the Merger and perfected his
or her entitlement to dissenters' rights in accordance with the applicable
provisions of the DGCL and as of the Effective Time has neither effectively
withdrawn nor lost (through failure to perfect or otherwise) his right to such
appraisal.
"Effective Time" shall mean the date on which the Certificate
of Merger referred to in Section 1.2 is duly filed with the Secretary of State
of the State of Delaware or such other time as is agreed upon by the parties and
specified in such Certificate of Merger.
"Environmental Claim" shall mean any claim, action,
investigation or notice by any person or entity alleging potential liability for
investigatory, cleanup or governmental response costs, or natural resources or
property damages, or personal injuries, attorney's fees or penalties relating to
(i) the presence, or release into the environment, of any Hazardous Material at
any location owned or operated by the Company or any Company Subsidiary, now or
in the past, or (ii) any violation, or alleged violation, of any Environmental
Law.
"Environmental Law" shall mean each federal, state, local and
foreign law and regulation pertaining to: (i) the protection of health, safety
and the indoor or outdoor environment; (ii) the conservation, management or use
of natural resources and wildlife; (iii) the protection or use of surface water
and ground water; (iv) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, release, threatened
release, abatement, removal, remediation or handling of, or exposure to, any
Hazardous Material; or (v) pollution (including any release to air, land,
surface water and ground water); and includes, without limitation, the
Comprehensive Environmental, Response, Compensation, and Liability Act of 1980,
as amended, and the rules and regulations promulgated thereunder and the Solid
Waste Disposal Act, as amended, 42 U.S.C. Section 6901 et seq.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA Affiliate" shall mean any trade or business, whether or
not incorporated, that together with the Company would be deemed a "single
employer" within the meaning of Section 4001(b) of ERISA.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the applicable rules and regulations thereunder.
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"Fairness Opinion" shall have the meaning set forth in Section
3.23 of the Agreement.
"Financial Statements" shall mean the financial statements of
the Company included in the Company SEC Documents.
"Financing Arrangements" shall have the meaning set forth in
Section 5.6 of the Agreement.
"FTC" shall mean the U.S. Federal Trade Commission.
"GAAP" shall mean United States generally accepted accounting
principles consistently applied.
"Governmental Approvals" shall mean any consents, approvals,
permits, authorizations, confirmations and actions of, filings or registrations
with or notices to any Governmental Entity under any applicable laws, statutes,
rules, regulations, orders, decrees, administrative or judicial directives.
"Governmental Entity" shall mean any U.S. or foreign federal,
state or local court, arbitral tribunal, administrative agency or commission or
other governmental or other regulatory authority or agency or non-governmental
self-regulatory agency, authority or commission.
"Hazardous Material" will mean any substance, chemical,
compound, product, solid, gas, liquid, waste, by-product, pollutant, contaminant
or material which is hazardous or toxic, and includes without limitation,
asbestos or any substance containing asbestos, polychlorinated biphenyls,
petroleum (including crude oil or any fraction thereof), and any hazardous or
toxic waste, material or substance regulated under any Environmental Law.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"Intellectual Property" shall mean any and all (a) trademarks,
service marks, trade names, URLs and Internet domain names together with all
goodwill, registrations and applications related to the foregoing, (b) patents
and industrial design registrations or applications (including any
continuations, divisionals, continuations in part, renewals, reissues and
applications for any of the foregoing), (c) copyrights (including any
registrations and applications therefor) and databases, and (d) technology,
inventions, know-how, trade secrets and other confidential information.
"Leases" shall have the meaning set forth in Section 3.14 of
the Agreement.
"Liens" shall mean liens, mortgages, security interests,
pledges, options, charges, claims or encumbrances of any kind (including any
agreement to give any of the foregoing).
"Material Agreement" shall mean any agreement that would be
required to be disclosed on the Disclosure Schedule in connection with the
representations set forth in Section 3.20 of the Agreement.
"Material Adverse Effect" shall mean a material adverse effect
on the business, operations (including income statement), prospects, properties,
assets, condition (financial or otherwise), results of operations or prospects
of the Company and the Subsidiaries taken as a whole.
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"Merger" shall mean the merger of Purchaser into the Company
referred to in Section 1.1.
"Net Amount" shall have the meaning ascribed to such term in
Section 2.3 of the Agreement.
"Options" shall mean the options to purchase Shares which have
been granted by the Company or a Subsidiary (or its predecessor in interest)
pursuant to a Company Stock Option Plan.
"Paying Agent" shall mean the bank or trust company designated
by the Purchaser to act as agent for the holders of the Shares pursuant to
Section 2.4(a).
"Person" shall mean a natural person, partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture, Governmental Entity or other
entity or organization.
"Plan" shall mean a plan, program, agreement, arrangement or
program required to be included in the Disclosure Schedule pursuant to Section
3.12(a).
"Proxy Statement" shall mean the proxy statement, letter to
stockholders, notice of meeting, and form of proxy to be filed by the Company
with the SEC pursuant to Section 5.3(a), together with all amendments and
supplements thereto and including the exhibits thereto.
"Purchaser Common Stock" shall mean the Common Stock, par
value $.001 per share, of the Purchaser.
"Retained Employees" shall mean those persons who were
employees of the Company or any Company Subsidiary immediately following the
Effective Time.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the applicable rules and regulations thereunder.
"Stockholder Approval" shall mean the stockholder approval
required in respect of the Merger referred to in Section 3.6.
"Shares" shall mean shares of common stock, par value $.01,
issued by the Company other than the Treasury Shares, the Converted Shares and
the Dissenting Shares, if any.
"Significant Subsidiary" shall mean any Company Subsidiary
which is a "significant subsidiary" within the meaning of Rule 1.02-(w) of
Regulation S-X promulgated under the Exchange Act, reading such Rule as if the
words "10 percent" were replaced in each instance by the words "5 percent".
"Special Meeting" shall mean the special meeting referred to
in 5.3 of the Agreement.
"Subsidiary" or "Subsidiaries" shall mean, with respect to the
Company, any corporation or other organization, whether incorporated or
unincorporated, of which (a) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
board of directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by the Company or by any one or more of its Subsidiaries, or by
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the Company and one or more of its Subsidiaries or (b) the Company or any other
Subsidiary of the Company is a general partner (excluding any such partnership
where the Company or any Subsidiary of the Company does not have a majority of
the voting interest in such partnership).
"Superior Proposal" shall mean any proposal by a third party
to acquire, directly or indirectly, including pursuant to a tender offer,
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction, for consideration consisting of cash and/or
securities, more than fifty (50%) percent of the combined voting power of the
Shares then outstanding or all or substantially all the assets of the Company
and its Subsidiaries, taken as a whole, which satisfies both subsection (x) and
subsection (y) of Section 5.2(a).
"Surviving Company Common Stock" shall mean the common stock,
par value $.01 per share, of the Surviving Company.
"Tax" or "Taxes" shall mean any and all federal, state, local,
foreign or other taxes of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto)
imposed by any taxing authority, including, without limitation, taxes or other
charges on or with respect to income, franchises, windfall or other profits,
gross receipts, property, sales, use, capital stock, payroll, employment, social
security, workers' compensation, unemployment compensation or net worth, and
taxes or other charges in the nature of excise, withholding, ad valorem or value
added.
"Tax Return" shall mean any return, report or similar
statement (including the attached schedules) required to be filed with respect
to any Tax, including, without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
"Termination Fee" shall mean the sum of $1,500,000 in U.S.
Dollars plus expenses incurred by the Purchaser in connection with the
Transactions.
"Title IV Plan" shall mean a Plan that is subject to Section
302 or Title IV of ERISA or Section 412 of the Code.
"Transactions" shall mean the transactions provided for or
contemplated by this Agreement.
"Treasury Shares" shall mean Company Common Stock held in
treasury by the Company.
"Undertakings" shall mean undertakings not requiring the
expenditure of a material amount of money to any Governmental Entity in
connection with obtaining requisite regulatory approvals, including undertakings
to make divestitures or, pending any determination of whether such divestitures
shall be required, to enter into hold separate arrangements (including pursuant
to arrangements which restrict, limit or prohibit access to any Company
Subsidiaries subject to such arrangements, or the voting of shares of capital
stock of any such Company Subsidiaries), provided, in any case, that such hold
separate arrangements divestitures need not themselves be effective or made
until immediately after actual consummation of the Transactions.
"Voting Debt" shall mean indebtedness having general voting
rights and debt convertible into securities having such rights.
"Warrants" shall mean any warrants to purchase Shares which
have been granted by the Company or a Subsidiary (or its predecessor in
interest).
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"Wholly-Owned Company Subsidiary" shall mean a Subsidiary that
is directly or indirectly wholly-owned by the Company.
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EXHIBIT A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
U.S. Vision, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify that this Amended and Restated Certificate of Incorporation was
duly adopted in accordance with Sections 242 and 245 of the General Corporation
Law of the State of Delaware as follows:
1. The Corporation's Certificate of Incorporation was
initially filed with the Office of the Secretary of State of the State of
Delaware on July 12, 1995, and the Corporation's Restated Certificate of
Incorporation was filed with the office of the Secretary of State of the State
of Delaware on the September 12, 1997.
2. This Amended and Restated Certificate of Incorporation was
duly adopted by written consent of the Board of Directors on _____________,
2001, and by written consent of the stockholders of the Corporation on
_______________, 2001, pursuant to Sections 141(f) and 228 of the Delaware
General Corporation Law.
3. This Amended and Restated Certificate of Incorporation
restates, integrates and further amends the Restated Certificate of
Incorporation of the Corporation.
4. The text of the Certificate of Incorporation, as amended,
is hereby amended and restated in its entirety to read as follows:
FIRST: The name of the Corporation is U.S. Vision, Inc. (the
"Corporation").
SECOND: The address of the Corporation's registered office in
the State of Delaware is Corporation Trust Center, 0000 Xxxxxx Xxxxxx, xxx Xxxx
xx Xxxxxxxxxx, Xxxxxx of New Castle 19801. The name of the Corporation's
registered agent at such address is Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted
or promoted is to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
FOURTH: The total number of shares of stock that the
Corporation shall have authority to issue is Eleven Million (11,000,000) shares
in the aggregate, which shall be divided into two classes as follows: (a) Ten
Million (10,000,000) shares of Common Stock, one cent ($0.01) par value per
share, and (b) One Million (1,000,000) shares of Preferred Stock, one cent
($0.01) par value per share.
Except as otherwise required by law or as otherwise provided
in this Certificate of Incorporation or in any designation of any series of
Preferred Stock pursuant to a resolution of the Board of Directors, each share
of Common Stock shall be entitled to one vote and the holders of the Common
Stock shall exclusively possess all voting power, shall be entitled to
participate equally and on the same basis as to any dividends if, as and when
declared by the Board of
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Directors and as to the distributions in the event of any dissolution,
liquidation or winding up of the Corporation, whether voluntary or involuntary.
The Board of Directors is expressly authorized from time to
time to designate one or more series of the Preferred Stock, to issue the
Preferred Stock as Preferred Stock of any such series, and in connection with
the designation of each such series to fix by resolution or resolutions
providing for the issue of shares thereof the voting and other powers, if any,
and the designations, preferences and relative, participating, optional or other
special rights, and the qualification, limitations, or restrictions thereof to
the fullest extent now or hereafter permitted by the laws of the State of
Delaware. All series of Preferred Stock shall rank equally and be identical in
all respects except as set forth in the resolutions of the Board of Directors of
the Corporation providing for the issue of such Preferred Stock.
FIFTH: The board of directors ("Board of Directors") is
authorized to make, alter or repeal the by-laws of the Corporation.
SIXTH: The number of directors shall be fixed in accordance
with the provisions of the by-laws of the Corporation. Elections of Directors
need not be by written ballot except and to the extent provided otherwise in the
by-laws of the Corporation. Cumulative voting for the election of Directors
shall not be permitted.
SEVENTH: No stockholder of the Corporation shall, by reason of
such person's holding stock of any class, have any preemptive or preferential
right to purchase or subscribe to any stock of any class of this Corporation,
now or hereafter to be authorized, nor for any of its notes, debentures, bonds
or other securities, whether or not the issuance of such stock, or such notes,
debentures, bonds or other securities would adversely affect the dividend or
voting rights of such stockholder, other than such rights, if any, as the Board
of Directors, in its discretion, may grant to the stockholders to purchase such
additional securities; and the Board of Directors may issue treasury shares of
any class of the Corporation, or any note, debentures, bonds or other securities
convertible into or of any class without offering the same in whole or in part
to existing stockholders of any class.
EIGHTH: A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law is hereafter
amended to authorize the further elimination or limitation of the liability of
directors, then the liability of the directors of the Corporation, in addition
to the limitation on personal liability provided herein, shall be limited to the
fullest extent permitted by the amended Delaware General Corporation Law. Any
repeal or modification of this paragraph by the stockholders of the Corporation
shall be prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Corporation at the time of such repeal
or modification.
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NINTH:
A. Each person who was or is a party or is threatened to be
made a party to or is involved in any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement) actually and reasonably incurred or suffered by such person in
connection therewith, and such indemnification shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that, except as provided in Paragraph B hereof, the Corporation shall indemnify
any such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. The right to
indemnification conferred in this Article NINTH shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Article NINTH or otherwise.
The Corporation may, by action of its Board of Directors, provide
indemnification to employees and agents of the Corporation with the same scope
and effect as the foregoing indemnification of directors and officers.
B. If a claim under Paragraph A of this Article NINTH is not
paid in full by the Corporation within thirty days after a written claim has
been received by the Corporation, the claimant may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it permissible under
the Delaware General Corporation Law for the Corporation to indemnify the
claimant for the amount claimed, but the burden of providing such defense shall
be on the Corporation. Neither the failure of the Corporation (including its
Board of Directors, independent legal counsel, or its stockholders) to have made
a determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General
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Corporation Law, nor an actual determination by the Corporation (including its
Board of Directors, independent legal counsel, or its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.
C. The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final disposition conferred
in this Article NINTH shall not be exclusive of any other right which any person
may have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
D. The Corporation may maintain insurance, at its expense, to
protect itself and any person who is or was a director, officer, employee or
agent of the Corporation or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any such expense, liability or
loss, whether or not the Corporation would have the power to indemnify such
person against such expense, liability or loss under the Delaware General
Corporation Law.
TENTH: The Corporation is to have perpetual existence.
ELEVENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of Incorporation,
in the manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation.
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IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be affixed hereto and this Amended and Restated Certificate of
Incorporation to be signed by its duly authorized officer this ___ day of
____________, 2001.
U.S. VISION, INC.
By:
----------------------------------
Name:
Title: President and CEO
ATTEST:
By:
---------------------
Name:
Title: Secretary
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EXHIBIT B
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
NOROB GROUP, INC.
AND
U.S. VISION, INC.
To supplement the following sections of the Agreement of which this Disclosure
Schedule is a part, the Company hereby makes the following disclosures:
SCHEDULE 3.2 - CAPITALIZATION
In addition to the 1,700,520 shares reserved for issuance to employees of the
Company for outstanding stock options under the terms of the Company's Stock
Option Plan, there are currently outstanding warrants to acquire 97,500 shares
of the Company's common stock which were issued to certain eligible directors of
the Company pursuant to the terms of the Company's 2000 Director Compensation
Plan. In addition, G. Xxxxxxx Xxxxxx received warrant to acquire 8,000 shares of
the Company's common stock as payment in full for certain consulting services
rendered by Xx. Xxxxxx to the Company.
SCHEDULE 3.3 - SUBSIDIARIES
U.S. Vision Holdings, Inc. U.S. Vision Holdings, Inc., a Delaware corporation,
is a wholly-owned subsidiary of the Company. The authorized capital stock of
U.S. Vision Holdings, Inc. consists of 1,000 shares in the aggregate, of which
1,000 shares are issued and outstanding.
USV Optical, Inc. USV Optical, Inc., a Texas corporation, is a wholly-owned
subsidiary of U.S. Vision Holdings, Inc. The authorized capital stock of USV
Optical, Inc. consists of 1,000 shares in the aggregate, of which 1,000 shares
are issued and outstanding. USV Optical, Inc. is qualified to do business as a
foreign corporation in Alabama, Alaska, Arizona, Arkansas, California, Colorado,
Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New
Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon,
Pennsylvania, South Dakota, South Carolina, Tennessee, Texas, Utah, Vermont,
Virginia, Washington, West Virginia, Wisconsin, and Wyoming, as well as the
Canadian provinces of Alberta, British Colombia, Ontario and Saskatchewan.
Styl-Rite Optical Mfg. Co., Inc. Styl-Rite Optical Mfg. Co., Inc., a Florida
corporation, is a wholly-owned subsidiary of USV Optical, Inc. The authorized
capital stock of Styl-Rite Optical Mfg. Co., Inc. consists of 100 shares in the
aggregate, of which 100 shares are issued and
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outstanding. Styl-Rite Optical Mfg. Co., Inc. is qualified to do business as a
foreign corporation in New Jersey.
9072-8411 Quebec, Inc (Optik Pro Baie 2000). 0000-0000 Xxxxxx, Inc. (Optik Pro
Baie 2000), a Quebec enterprise, is a wholly-owned subsidiary of USV Optical,
Inc. The authorized capital stock of 9072-8411 Quebec, Inc. (Optik Pro Baie
2000) consists of an unlimited number of shares of Class A and Class B common
stock, as well as an unlimited number of shares of Classes C, D, E, F, G, H and
I preferred stock, of which 100 shares of Class A common stock are issued and
outstanding.
Health Eye Care Statistics, Inc. Health Eye Care Statistics, Inc., an Ontario
corporation, is a wholly-owned subsidiary of USV Optical, Inc. The authorized
capital stock of Health Eye Care Statistics, Inc. consists of an unlimited
number of shares of common stock, Class A stock, Class B stock, and Class C
non-voting stock, of which 100 shares of common stock are issued and
outstanding.
SCHEDULE 3.7 - CONSENTS AND APPROVALS
Amended and Restated Loan Agreement with Commerce Bank, N.A dated July 31, 1998;
JCPenney Licensed Department Agreement dated February 1, 1995; Lease Agreement
with Xxxxxx'x Bay Company; and As to the following agreements, some may require
consent for this Transaction:
License Agreements with each of the Company's host stores other than
Sears, JCPenney and Xxxxxx'x Bay; and Lease Agreements covering each of
the Company's freestanding retail outlets.
SCHEDULE 3.12 - EMPLOYEE BENEFIT PLANS
1. Styl-Rite Optical Mfg. Co., Inc. contributes to a defined contribution
plan pursuant to the terms of that certain Agreement dated March 1,
1997, by and between Styl-Rite Optical Mfg. Co., Inc. and United
Optical Workers Union, Local 408, I'VE, AFL-CIO. This obligation
represents SRO's withdrawal liability only and SRO is not currently a
member of this plan.
2. The Company's 401(k) Profit Sharing Plan.
3. The Company's Stock Option Plan, as amended.
4. Employment Agreement by and between the Company and Xxxxxxx X.
Xxxxxxxx, Xx. Under the terms of this agreement, Xx. Xxxxxxxx is
entitled to salary continuation for the balance of the term of his
employment agreement, but not less than one year, if his employment is
terminated by the Company other than for cause or if he resigns for
good reason under the terms of the agreement. Further, if all or
substantially all of the assets of the Company are sold, or a merger or
sale of all or substantially all of the stock of the Company occurs
while Xx. Xxxxxxxx is employed by the Company, he is entitled to a
bonus payment in the amount of $750,000.
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5. Salary Continuation Agreements by and between the Company and each of
Xxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx, and Xxxxxx X. XxXxxxx, Xx. Under
the terms of each such agreement, the executive is entitled to salary
continuation for one year if the executive's employment is terminated
by the Company other than for cause, or of the executive resigns with
good reason under the terms of the agreement.
6. The Company's Group Life & Health Insurance Plan.
7. The Company's Cafeteria Plan.
8. The Company's Dental Plan.
SCHEDULE 3.13(b) - TAX MATTERS; GOVERNMENT BENEFITS
The Company and its Subsidiaries are from time to time subject to an audit or
informal informational request from one of the state taxing authorities in which
the Company or one of its subsidiaries is qualified to do business. To its
knowledge, however, the Company does not believe that any pending or threatened
audit or informational request would cause a Material Adverse Effect.
SCHEDULE 3.13(k) - TAX BASIS IN ASSETS AND CARRYOVERS
(i) Federal Income Tax Basis of the Company and its Subsidiaries
in its Assets:
(dollars in thousands)
GAAP TAX
---- ---
Current assets:
Cash $ 240 $ 240
Accounts Receivable 10,879 10,826
Inventory 20,954 18,315
Prepaid expenses and other 1,130 1,130
------- -------
Total current assets 33,203 30,511
Property, plant, and equipment, net 40,524 35,472
Goodwill, net of accumulated amortization 6,356 1,428
Other 995 1,038
------- -------
Total assets $81,078 $68,449
------- -------
(ii) Carryovers for Federal Income Tax Purposes:
As of January 31, 2001, the Company had a net operating loss carryover
of approximately $14,100,000, which will begin to expire in 2006. Prior
to the consummation of the Merger, approximately $5,900,000 of that
loss carryover is
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available to offset future taxable income without limitations and
approximately $8,200,000 of that loss carryover is limited due to prior
ownership changes.
SCHEDULE 3.14 - TITLE TO PROPERTIES; ENCUMBRANCES
The property located at 1 (administration building) and 10 (manufacturing
building) Xxxxxx Drive, Glendora, New Jersey are subject to certain liens in
favor of the Delaware River Port Authority. The property located at 5
(distribution building) Xxxxxx Drive is subject to certain liens in favor of
Commerce Bank, N.A.
SCHEDULE 3.15 - ENVIRONMENTAL LAWS
None.
SCHEDULE 3.22 - FEE PAYABLE TO XXXXXX XXXXXXXXXX XXXXX LLC
Approximately 1.5% of the aggregate consideration, or $365,307, plus all
out-of-pocket expenses, less $100,000 retainer previously paid by the Company.
SCHEDULE 5.1 - INTERIM OPERATIONS OF THE COMPANY
None.
SCHEDULE 5.12 - AFFILIATE STOCKHOLDERS
Grotech Partners IV, L.P.;
Grotech Partners III, L.P.;
Grotech III Companion Fund, L.P.;
Grotech III Pennsylvania Fund, L.P.;
Grotech Capital Group, Inc.;
Grotech Capital Group IV, LLC;
Xxxxxxxx Partners, L.P.;
Constitution Partners I, L.P.;
M&M General Partnership;
RKM Investment Company;
Xxxxxxx X. XxXxxxxx;
Xxxxxxx X. Xxxxxxxx, Xx.;
Xxxxx X. Xxxxx; and
G. Xxxxxxx Xxxxxx
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EXHIBIT C
FORM OF VOTING AGREEMENT
AND IRREVOCABLE PROXY
This Voting Agreement (this "Agreement") is dated as of July __, 2001,
between NOROB Group, Inc., a Delaware corporation ("Buyer"), and
____________________, a stockholder (the "Stockholder") of U.S. Vision, Inc., a
Delaware corporation ("USVI").
RECITALS
WHEREAS, the Buyer and USVI are entering into an Agreement and Plan of
Merger dated as of the date hereof (the "Merger Agreement"), pursuant to which
the Buyer shall merge with and into USVI (as set forth in the Merger Agreement)
and each share of Common Stock of USVI outstanding immediately prior to the
effective time of the Merger (as defined below) (other than Treasury Shares and
Dissenting Shares, as defined in the Merger Agreement) shall automatically be
converted into the right to receive $4.25, payable in cash ; and
WHEREAS, the Stockholder is a significant stockholder of USVI; and
WHEREAS, the terms of Section 5.12 of the Merger Agreement require the
execution and delivery of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein,
intending to be legally bound hereby, the parties hereto agree as follows:
1. Voting Proxy.
(a) At each meeting of USVI's stockholders convened to
consider and vote upon the adoption of the Merger Agreement and the merger
contemplated thereby (the "Merger"), the Stockholder shall vote all shares of
Common Stock of USVI owned of record by the Stockholder at the record date for
the vote (including, except for any shares for which the Stockholder's sole
voting power results from the Stockholder's having been named as proxy pursuant
to the proxy solicitation conducted by USVI in connection with the meeting, any
shares of USVI Common Stock over which the Stockholder has voting power, by
contract or otherwise) in favor of the approval and adoption of the Merger
Agreement and the Merger.
(b) Concurrently herewith, the Stockholder has executed and
delivered to Buyer an irrevocable proxy in the form of Annex A.
2. No Solicitation.
(a) The Stockholder may not, directly or indirectly:
(i) take any action to seek, initiate, or solicit any
offer from any person, entity, or group regarding an Acquisition
Proposal (as defined in the Merger Agreement); or
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(ii) engage in negotiations or discussions
concerning, or provide any non-public information in response to, an
Acquisition Proposal.
(b) The Stockholder shall immediately cease and cause to be
terminated all existing discussions and negotiations, if any, with any parties
conducted heretofore with respect to any Acquisition Proposal.
3. No Transfer. The Stockholder may not sell, pledge, assign, or
otherwise transfer, or authorize, propose, or agree to the sale, pledge,
assignment, or other transfer of, any of the Stockholder's shares of USVI Common
Stock.
4. Reasonable Efforts; Additional Agreements. Subject to the terms of
this Agreement and the Merger Agreement, the Stockholder shall use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things reasonably necessary, proper, or advisable in
accordance with applicable law to consummate the transactions contemplated by
this Agreement and the Merger Agreement. If any further action is reasonably
necessary or desirable to carry out the purposes of this Agreement or the Merger
Agreement, the Stockholder shall take that action.
5. Representations and Warranties. The Stockholder represents and
warrants to Buyer as follows:
(a) Authority. The Stockholder has the requisite power and
authority to enter into this Agreement, to perform the Stockholder's obligations
hereunder, and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Stockholder and
constitutes the Stockholder's legal, valid and binding obligation, enforceable
in accordance with its terms, except as the enforceability hereof may be limited
by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
the enforcement of creditors' rights generally, and except for judicial
limitations on the enforcement of the remedy of specific performance and other
equitable remedies.
(b) Title; Authority to Vote Shares. The Stockholder owns of
record and has voting power over the number of shares of USVI Common Stock as
set forth with respect to the Stockholder in the stock transfer books of USVI;
such shares of USVI Common Stock are held by the Stockholder free and clear of
all liens, charges, pledges, restrictions, and encumbrances (other than those
created by this Agreement).
(c) Noncontravention. Neither the execution and delivery of
this Agreement, nor the consummation of any of the transactions contemplated
hereby, nor compliance with any of the provisions hereof by the Stockholder,
will violate, conflict with, or result in a breach of, or constitute a default
(or an event that, with notice or lapse of time or both, would constitute a
default) under, or result in the termination or suspension of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien upon any of the properties or
assets of the Stockholder under, any agreement or instrument to which the
Stockholder is a party or any statute, rule, regulation, judgment, order,
decree, or other legal requirement applicable to the Stockholder.
(d) Litigation. There is no claim, action, proceeding, or
investigation pending or, to the best knowledge of the Stockholder, threatened
against or relating to the Stockholder before any court or governmental or
regulatory authority or body (including the National Association of Securities
Dealers, Inc.), and the Stockholder is not subject to any outstanding order,
writ, injunction, or decree that, if determined adversely, would prohibit the
Stockholder from performing the Stockholder's obligations hereunder.
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7. Termination. This Agreement may be terminated at any time before the
Effective Time (as defined in the Merger Agreement) by any party upon
termination of the Merger Agreement pursuant to Article VII thereof. In the
event of a termination of this Agreement pursuant to this Section 7, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of any party; provided, however, that nothing herein
shall release any party from any liability for any breach of this Agreement. If
this Agreement is terminated, the proxy of the Stockholder delivered under
Section 1(b) shall also terminate and be of no further force or effect, and
Buyer shall promptly return the proxy to the Stockholder.
8. Miscellaneous.
(a) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered in person or by
messenger, cable, telegram, facsimile transmission, or by a reputable overnight
delivery service that provides for evidence or receipt, to the parties as
follows (or at such other address as a party may specify by like notice);
If to the Stockholder:
-----------------------
-----------------------
-----------------------
Telephone No.: __________
Telecopy No.: ___________
with a copy to:
Xxxxxx, Lidji & Werbner
4400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx, Esquire
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to the Buyer:
NOROB Group, Inc.
X.X. Xxx 0000
Xxxxxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxx, III
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esquire
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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(b) Interpretation. The headings contained in this Agreement
are for reference purposes only and do not affect the interpretation of this
Agreement.
(c) Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered the same agreement.
(d) Entire Agreement. This Agreement (including the documents
and instruments referred to herein) and the Merger Agreement constitute the
entire agreement and supersede all prior and contemporaneous agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
(e) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement. Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be effective and valid
under applicable law.
(f) Governing Law. This Agreement shall be governed by
Delaware law, without regard to the principles of conflicts of law.
(g) Assignment. Neither this Agreement nor any of the rights,
interest, or obligations hereunder may be assigned by any party, whether by
operation of law or otherwise, without the express written consent of the other
party. 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, heirs, legal representatives, and permitted assigns. The
representations, agreements and obligations of the Stockholder contained herein
shall survive the death or incapacity of the Stockholder and shall be binding
upon the heirs, personal representatives, successors, and assigns of the
Stockholder.
(h) Remedies. In addition to all other remedies available, the
parties agree that, in the event of a breach by a party of an of its obligations
hereunder, the non-breaching party shall be entitled to specific performance or
injunctive relief.
(i) Defined Terms. All capitalized terms used but not defined
herein have the meanings given them in the Merger Agreement.
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IN WITNESS WHEREOF, each of the parties have signed this
Agreement as of the date first above written.
[STOCKHOLDER]
By:
----------------------------
Name:
Title:
NOROB GROUP, INC.
By:
----------------------------
Name:
Title:
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ANNEX A
IRREVOCABLE PROXY
The undersigned, revoking any proxy heretofore given, hereby
constitutes and appoints Xxxxxx X. Xxxxxxxx, III and Xxxxxx X. Xxxxxxxx,
Esquire, and each of them, the true and lawful attorney, with full power of
substitution, for and in the name of the undersigned to vote any and all shares
of Common Stock of U.S. Vision, Inc., a Delaware corporation (the "Company"), or
other shares of capital stock of the Company entitled to vote on the business to
be transacted: (1) registered in the name of the undersigned at the record date
for such vote; or (2) except as set forth below, over which the undersigned has
voting power by power of attorney or other contractual arrangements with the
owner of record, at any meeting of the stockholders of the Company, and at all
adjournments thereof, and pursuant to any consent of the stockholders in lieu of
a meeting or otherwise.
This Proxy is given only with respect to the approval of, and any other
matters related to or in connection with: (a) the merger and other transactions
contemplated by the Agreement and Plan of Merger between NOROB Group, Inc., a
Delaware corporation ("Buyer") and the Company dated as of July ___, 2001 (the
"Merger Agreement"). This Proxy is given to induce Buyer to enter into the
Merger Agreement, is coupled with an interest, and is irrevocable.
Notwithstanding clause (2) of the first paragraph above, this Proxy
shall not include any shares of capital stock of the Company that are not
subject to clause (1) of the first paragraph above for which the undersigned's
only voting power results from him having been named as proxy pursuant to the
proxy solicitation conducted by the Company's Board of Directors in connection
with a special or annual meeting of the stockholders of the Company to be held
to consider the Merger Agreement and over which the undersigned does not
otherwise have voting power with respect thereto.
The undersigned hereby ratifies and confirms all that the proxies named
herein may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of
this ___ day of July, 2001.
WITNESS: [STOCKHOLDER]
By: By:
------------------------- -------------------------
Name: Name:
Title: Title:
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