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EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
AMONG
CBF HOLDING LLC
CBF MERGERCO INC.
AND
CORT BUSINESS SERVICES CORPORATION
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TABLE OF CONTENTS
Page
ARTICLE I.
THE MERGER.................................................................2
SECTION 1.1 The Merger...................................................2
SECTION 1.2 Closing......................................................2
SECTION 1.3 Effective Time...............................................2
SECTION 1.4 Effects of the Merger........................................2
SECTION 1.5 Certificate of Incorporation; By-laws........................2
SECTION 1.6 Directors....................................................3
SECTION 1.7 Officers.....................................................3
ARTICLE II.
EFFECT OF THE MERGER ON THE SECURITIES
OF THE CONSTITUENT CORPORATIONS............................................3
SECTION 2.1 Effect on Capital Stock......................................3
SECTION 2.2 Stock Options................................................4
SECTION 2.3 Exchange of Certificates.....................................5
ARTICLE III.
REPRESENTATIONS AND WARRANTIES.............................................7
SECTION 3.1 Representations and Warranties of the Company................7
SECTION 3.2 Representations and Warranties of Parent and Sub............12
ARTICLE IV.
COVENANTS RELATING TO CONDUCT OF BUSINESS
PRIOR TO MERGER...........................................................15
SECTION 4.1 Conduct of Business of the Company..........................15
SECTION 4.2 ............................................................17
ARTICLE V.
ADDITIONAL AGREEMENTS.....................................................17
SECTION 5.1 Meeting of Stockholders.....................................17
SECTION 5.2 Proxy Statement; Schedule 13E-3.............................17
SECTION 5.3 Access to Information; Confidentiality......................18
SECTION 5.4 Commercially Reasonable Efforts.............................19
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SECTION 5.5 Financing...................................................20
SECTION 5.6 Indemnification; Directors' and Officers' Insurance.........20
SECTION 5.7 Public Announcements........................................22
SECTION 5.8 Acquisition Proposals.......................................22
SECTION 5.9 Stockholder Litigation......................................23
SECTION 5.10 Board Action Relating to Stock Option Plans and Options.....23
SECTION 5.11 Notices of Certain Events...................................23
SECTION 5.13 Purchase of Common Stock....................................24
ARTICLE VI.
CONDITIONS PRECEDENT......................................................24
SECTION 6.1 Conditions to Each Party's Obligation to Effect the Merger..24
SECTION 6.2 Conditions to Obligations of Parent and Sub.................25
SECTION 6.3 Conditions to Obligations of the Company....................26
ARTICLE VII.
TERMINATION, AMENDMENT AND WAIVER.........................................26
SECTION 7.1 Termination.................................................26
SECTION 7.2 Effect of Termination.......................................28
SECTION 7.3 Expenses....................................................29
SECTION 7.4 Amendment...................................................29
SECTION 7.5 Extension; Waiver...........................................29
SECTION 7.6 Procedure for Termination, Amendment, Extension or Waiver...30
ARTICLE VIII.
GENERAL PROVISIONS........................................................30
SECTION 8.1 Nonsurvival of Representations and Warranties...............30
SECTION 8.2 Fees and Expenses...........................................30
SECTION 8.3 Definitions.................................................30
SECTION 8.4 Notices.....................................................31
SECTION 8.5 Interpretation..............................................32
SECTION 8.6 Counterparts................................................32
SECTION 8.7 Entire Agreement; Third-Party Beneficiaries.................32
SECTION 8.8 Governing Law...............................................32
SECTION 8.9 Assignment..................................................32
SECTION 8.10 Enforcement.................................................33
SECTION 8.11 Severability................................................33
SECTION 8.12 WAIVER OF JURY TRIAL........................................33
SECTION 8.13 Time is of the Essence......................................33
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Exhibits
Schedule I - Affiliated Stockholders
Exhibit 2.1(c) - Retained Shares
Exhibit A - Restated Charter
Exhibit B - Series A-1 Preferred Terms
Exhibit C - Equity Commitment Letters
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated March __, 1999 (this
"Agreement"), by and among CBF HOLDING LLC, a Delaware limited liability company
("Parent"), CBF MERGERCO, INC., a Delaware corporation ("Sub"), and CORT
BUSINESS SERVICES CORPORATION, a Delaware corporation (the "Company").
Capitalized terms used herein have the meanings ascribed to them in Section 8.3.
WHEREAS, the Board of Directors of each of Parent, Sub and the
Company have adopted resolutions approving this Agreement, and deem it advisable
and in the best interests of their respective companies and stockholders to
consummate the merger of Sub with and into the Company (the "Merger") upon the
terms and subject to the conditions set forth herein; and
WHEREAS, as of the date hereof, the stockholders listed on Schedule
I hereto (the "Affiliated Stockholders") own or have the power to vote the
number of the shares of the common stock of the Company set forth thereon
(representing approximately the percentage of the total number of outstanding
shares of the Company's common stock as of the date hereof set forth thereon);
WHEREAS, in accordance with applicable law, the Company's Restated
Certificate of Incorporation, (as in effect from time to time, the "Restated
Charter") and the terms of this Agreement, the affirmative vote of the holders
of a majority of the outstanding voting common stock of the Company and the
affirmative vote of holders of a majority of the outstanding shares of voting
common stock that are not beneficially owned by the Affiliated Stockholders or
by persons that are Affiliates or Associates (as such terms are defined in
Section 8.3) of the Affiliated Stockholders are required to adopt this
Agreement; and
WHEREAS, pursuant to the Merger, shares of the Company's common
stock will be converted into the right to receive the Merger Consideration or
the Retained Share Merger Consideration (each, as defined below), as the case
may be, in the manner set forth herein;
WHEREAS, it is intended that the Merger be recorded as a
recapitalization for financial reporting purposes;
NOW, THEREFORE, in consideration of the foregoing premises and the
represen tations, warranties, covenants and agreements contained in this
Agreement, and intending to be legally bound, the parties agree as follows:
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ARTICLE I.
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement and Plan of Merger (the "Agreement"), and in
accordance with the Delaware General Corporation Law (the "DGCL") Sub shall be
merged with and into the Company at the Effective Time (as hereinafter defined).
Upon the Effective Time, the separate existence of Sub shall cease, and the
Company shall continue as the surviving corporation (the "Surviving
Corporation").
SECTION 1.2 Closing. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 7.1, and subject to the satisfaction or waiver of the
conditions set forth in Article VI, the closing of the Merger (the "Closing")
will take place at 10:00 a.m. New York City time on the third business day
following the date on which the last to be fulfilled or waived of the conditions
set forth in Article VI shall be fulfilled or waived in accordance with this
Agreement (the "Closing Date"), at the offices of Xxxxxxxx & Xxxxx, 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other date, time or place as
agreed to in writing by the Parties.
SECTION 1.3 Effective Time. The Company, with the consent of Parent,
will file with the Secretary of State of the State of Delaware (the "Delaware
Secretary of State") on the date of the Closing (or on such other date as Parent
and the Company may agree) a certificate of merger or other appropriate
documents, executed in accordance with the relevant provisions of the DGCL, and
make all other filings or recordings required under the DGCL in connection with
the Merger. The Merger shall become effective upon the filing of the certificate
of merger with the Delaware Secretary of State, or at such later time as is
specified in the certificate of merger and is agreed to by the parties (the
"Effective Time").
SECTION 1.4 Effects of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the properties,
rights, privileges, powers and franchises of the Company and Sub shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 1.5 Certificate of Incorporation; By-laws.
(a) At the Effective Time, the Restated Charter shall be
amended so as to read in its entirety as set forth in Exhibit A to this
Agreement and as so amended shall become the certificate of incorporation of the
Surviving Corporation.
(b) The By-Laws of Sub as in effect at the Effective Time
shall be, from and after the Effective Time, the By-Laws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
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SECTION 1.6 Directors. The directors of Sub at the Effective Time
shall become, from and after the Effective Time, the directors of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
SECTION 1.7 Officers. At the Effective Time, the officers of the
Company shall become the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
ARTICLE II.
EFFECT OF THE MERGER ON THE SECURITIES
OF THE CONSTITUENT CORPORATIONS
SECTION 2.1 Effect on Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of any holder:
(a) Common Stock of Sub. Each share of common stock and
preferred stock of Sub issued and outstanding immediately prior to the Effective
Time shall be converted into one share of Series A Preferred Stock, one share of
Series B Preferred Stock, one share of Series C Preferred Stock and one share of
Common Stock of the Surviving Company ("Surviving Company Securities"), which
Surviving Company Securities shall be validly issued, fully paid and
nonassessable upon such conversion.
(b) Cancellation of Treasury Stock. Each share of the Common
Stock (as defined in Section 8.3) issued or outstanding immediately prior to the
Effective Time that is owned by the Company or any of its wholly-owned
Subsidiaries shall be canceled automatically and shall cease to exist, and no
cash or other consideration shall be delivered or deliverable in exchange
therefor.
(c) Conversion of Company Shares. Each share of Common Stock
that is then issued and outstanding (such shares of Common Stock being
hereinafter referred to collectively as the "Company Shares", other than shares
to be canceled pursuant to subsection 2.1(b) above and other than Dissenting
Shares and Retained Shares (each as hereinafter defined), which shares will not
constitute "Company Shares" hereunder) shall be converted into and become the
right to receive, upon surrender of the certificate representing such Company
Shares in accordance with Section 2.3, $24 in cash, without interest thereon
(the "Per Share Cash Amount") and one (1) share of Senior Preferred (as defined
in Section 8.3) (together with the Per Share Cash Amount, the "Merger
Consideration"). Each Person set forth on the attached Exhibit 2.1(c), shall
have the right to elect, by notice to the Company and Parent prior to the
Effective Time, to exchange up to the number of shares of Common Stock set forth
on Exhibit 2.1(c) (each a "Retained Share" and collectively, the "Retained
Shares") into the right to receive, in lieu of the Merger Consideration, the
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quantities and classes of Surviving Company Securities as set forth on such
Exhibit 2.1(c) (the "Retained Share Merger Consideration").
(d) Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, shares of Common Stock issued and outstanding
immediately prior to the Effective Time held by a holder (a "Dissenting
Shareholder") (if any) who has the right to demand, and who properly demands, an
appraisal of such shares in accordance with Section 262 of the DGCL (or any
successor provision) ("Dissenting Shares") shall not be converted into a right
to receive the Merger Consideration unless such Dissenting Shareholder fails to
perfect or otherwise loses such Dissenting Shareholder's right to such
appraisal, if any. If, after the Effective Time, such Dissenting Shareholder
fails to perfect or loses any such right to appraisal, each such share of such
Dissenting Shareholder shall be treated as a share that had been converted as of
the Effective Time into the right to receive the Merger Consideration in
accordance with this Section 2.1, without interest or dividends thereon. The
Company shall give prompt notice to Parent of any demands received by the
Company for appraisal of any Company Shares, and Parent shall have the right to
participate in and direct all negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written consent of Parent,
make any payment with respect to, or settle or offer to settle, any such
demands.
(e) Cancellation and Retirement of Common Stock. As of the
Effective Time, all certificates representing shares of Common Stock, issued and
outstanding immediately prior to the Effective Time, shall no longer be
outstanding and shall automatically be canceled and shall cease to exist, and
each holder of a certificate representing any such shares of Common Stock shall
cease to have any rights with respect thereto, except the right to receive the
Merger Consideration or the Retained Share Merger Consideration, as the case may
be, upon surrender of such certificate in accordance with Section 2.3, or, in
the case of Dissenting Shares, the rights, if any, accorded under Section 262 of
the DGCL.
SECTION 2.2 Stock Options. For purposes of this Agreement, the term
"Option" means each unexercised option, warrant or other security (including
without limitation any Company Stock Option, as hereafter defined) pursuant to
which the holder thereof has the right to purchase Common Stock from the Company
(whether or not such option is vested or exercisable) that is outstanding at the
Effective Time. The term "Company Stock Options" means each outstanding option
to purchase shares of Common Stock (a "Company Stock Option") issued under the
Company Stock Option Plans (as defined in Section 3.1(c), as amended from time
to time. The Company shall use its commercially reasonable efforts to modify or
amend each Company Stock Option Plan or take such other action as may be
reasonably necessary or appropriate in order that as of the Effective Time, each
Option that by its terms is exercisable from and after the Effective Time and
has an exercise price which is less than $26.50 per share, (each, an "In the
Money Option") shall be extinguished and represent at the Effective Time the
right to receive one (1.0) share of Senior Preferred for each share of Common
Stock issuable upon exercise of such In the Money Option, and a cash amount
equal to the product of (x) the excess, if any, of (a) the Per Share Cash Amount
over (b) the exercise price of such Option (the "Cash Option Amount") multiplied
by (y)
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the aggregate number of shares of Common Stock issuable upon the exercise in
full of such Option as of the Effective Time; provided, however, that each In
the Money Option with an exercise price in excess of the Per Share Cash Amount
shall entitle the holder thereof to receive only a number of shares of Senior
Preferred equal to the product of (x) a fraction, the numerator of which is
equal to $26.50 minus the exercise price and the denominator of which is $2.50
(the initial liquidation preference of the Senior Preferred), multiplied by (y)
the aggregate number of shares of Common Stock issuable upon the exercise in
full of such Option as of the Effective Time; provided that each holder shall be
entitled to receive cash in lieu of any fractional shares of Senior Preferred
held thereby. Except as otherwise agreed to by the parties, (i) the Company
Stock Option Plans 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 other interest in respect of the capital stock of the Company or any
Subsidiary shall be terminated as of the Effective Time, and (ii) the Company
shall take all action necessary to ensure that following the Effective Time no
participant in the Company Stock Option Plans or other plans, programs or
arrangements shall have any right thereunder to acquire or participate in
changes in value of equity securities of the Company, the Surviving Corporation,
Sub or any of their respective subsidiaries and to terminate all such plans
effective as of the Effective Time; provided that for avoidance of doubt, any
such termination shall not affect the rights of any outstanding Option, except
as otherwise provided in the Company Stock Option Plans.
SECTION 2.3 Exchange of Certificates. (a) Exchange Agent. As of the
Effective Time, Sub (or the Company, as the Surviving Corporation) shall
deposit, or shall cause to be deposited, with or for the account of a bank or
trust company designated prior to the Effective Time by Sub, which shall be
reasonably satisfactory to the Company (the "Exchange Agent"), for the benefit
of the holders of Certificates (as defined herein) (i) cash in an aggregate
amount (the "Exchange Fund") equal to the sum of (x) the product of (A) the
number of Company Shares issued and outstanding at the Effective Time multiplied
by (B) the Per Share Cash Amount plus (y) the product of (A) the aggregate
number of shares of Common Stock issuable upon exercise in full of all of the In
the Money Options as of the Effective Time multiplied by (B) the Cash Option
Amount (as defined in Section 2.2 above) with respect to such In the Money
Options and (ii) a stock certificate issued in the name of the Exchange Agent or
its nominee) representing the number of shares of Senior Preferred deliverable
pursuant to Section 2.2 (including any fractional shares).
(b) Exchange Procedures. As soon as practicable following the
Effective Time, the Surviving Corporation shall cause the Exchange Agent to mail
or deliver to each record holder, as of the Effective Time, of an outstanding
certificate or certificates or option grant which immediately prior to the
Effective Time represented shares of either Common Shares or Retained Shares or
In the Money Options (the "Certificates"), 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 proper delivery of the Certificates to the
Exchange Agent) and instructions for use in effecting the surrender of the
Certificates for payment therefor. Upon surrender to the Exchange Agent of a
Certificate, together with a duly executed letter of transmittal and any other
reasonably required documents, the holder of such Certificate shall promptly
receive in exchange therefor (i) with respect to Certificates
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representing Retained Shares, the form of a certificate or certificates
representing the number of shares of Surviving Company Securities, to which such
holder is entitled pursuant to Section 2.1(c), and (ii) with respect to any
other Certificates, the amount of cash to which such holder is entitled pursuant
to Section 2.1(c) or Section 2.2 (as applicable), without interest, less any
required withholding of U.S. federal income taxes and a certificate or
certificates for the shares of Senior Preferred to which such holder is entitled
in accordance with the terms hereof, with an issuance date of the Effective
Time, and in each case, such Certificate shall be canceled. If payment or
delivery is to be made to a Person other than the Person in whose name a
Certificate so surrendered is registered, it shall be a condition of payment
that the Certificate so surrendered shall be properly endorsed or otherwise in
proper form for transfer, that the signatures on the certificate or any related
stock power shall be properly guaranteed and that the Person requesting such
payment either pay any transfer or other Taxes required by reason of the payment
to a Person other than the registered holder of the Certificate so surrendered
or establish to the satisfaction of the Surviving Corporation that such Tax has
been paid or is not applicable. Until surrendered in accordance with the
provisions of this Section 2.3, each Certificate (other than Certificates
canceled pursuant to Section 2.1(b), and Dissenting Shares) shall represent for
all purposes only the right to receive the Merger Consideration, the Retained
Share Merger Consideration or the consideration payable pursuant to Section 2.2
(the "Option Consideration"), as the case may be, in the form provided for by
this Agreement, without interest.
(c) Termination of Exchange Fund. If Certificates are not
surrendered prior to the date that is one year after the Effective Time,
unclaimed amounts (including interest thereon) remaining in the Exchange Fund
shall, to the extent permitted by applicable law, become the property of the
Surviving Corporation, free and clear of all claims or interest of any Person
previously entitled thereto. Any stockholders or optionholders of the Company
who have not theretofore complied with the provisions of this Section 2.3 shall
thereafter look only to the Surviving Corporation and only as general creditors
thereof for payment for their claims in the form and amounts to which such
stockholders or optionholders are entitled.
(d) No Further Rights in Common Stock. After the Effective
Time, there shall be no transfers on the stock transfer books of the Surviving
Corporation of the shares of Common Stock that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation, they shall be canceled and exchanged for
the Merger Consideration, Retained Share Merger Consideration or Option
Consideration, as the case may be, as provided for and in accordance with the
provisions of this Section 2.3.
(e) Investment of Exchange Fund. The Exchange Agent shall
invest the Exchange Fund, as directed by the Surviving Corporation, in (i)
direct obligations of the United States of America, (ii) obligations for which
the full faith and credit of the United States of America is pledged to provide
for the payment of principal and interest, (iii) commercial paper rated the
highest quality by either Xxxxx'x Investors Services, Inc. or Standard & Poor's
Corporation, or (iv) certificates of deposit, bank repurchase agreements or
bankers acceptances, of commercial banks with capital exceeding $100 million,
and any net earnings with respect thereto shall be paid to the
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Surviving Corporation as and when requested by the Surviving Corporation;
provided that any such investment or any such payment of earnings shall not
delay the receipt by holders of Certificates of the Merger Consideration,
Retained Share Merger Consideration or Option Consideration, as the case may be,
or otherwise impair such holders' respective rights hereunder.
(f) Withholding Rights. The Surviving Corporation, Parent or
Sub shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Company Shares or Options
such amounts (each a "Withholding Amount") as the Surviving Corporation, Parent
or Sub is required to deduct and withhold with respect to the making of such
payment under the Code (as hereinafter defined), or any provision of state,
local or foreign tax law, including, without limitation, withholdings required
in connection with payments with respect to Company Stock Options held by
employees of the Company. To the extent that amounts are so withheld by the
Surviving Corporation, Parent or Sub, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder in respect of
which such deduction and withholding was made.
(g) No dividends or other distributions with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Senior Preferred represented thereby
until the surrender of such Certificate in accordance with this Section 2.3.
Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the Certificate representing
shares of Senior Preferred issued in connection therewith, without interest, (i)
at the time of such surrender or as promptly thereafter as practicable, the
proportionate amount of dividends or other distributions with a record date
after the Effective Time of the Merger theretofore paid with respect to such
shares of Senior Preferred, and (ii) at the appropriate payment date, the
proportionate amount of dividends or other distributions, with a record date
after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable, with respect to such number of shares of
Senior Preferred.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of the Company. The
Company represents and warrants to Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
corporate authority to carry on its business as now being conducted. The Company
is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) would not have a material
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adverse effect on the business, financial condition, or results of operations of
the Company and its Subsidiaries (as defined in subsection 3.1(b) hereof) taken
as a whole (a "Material Adverse Effect"). The Company has delivered to Parent
complete and correct copies of its Restated Charter and Bylaws, as amended to
the date of this Agreement.
(b) Subsidiaries. Section 3.1(b) of the disclosure schedule
attached hereto (the "Disclosure Schedule") sets forth the name, jurisdiction of
incorporation, total capitalization and number of shares of outstanding capital
stock of each class owned, directly or indirectly, by the Company of each
corporation of which the Company owns, directly or indirectly, a majority of the
outstanding capital stock (individually, a "Subsidiary" and, collectively, the
"Subsidiaries"). All the issued and outstanding shares of capital stock of each
Subsidiary are validly issued, fully paid and nonassessable. All such shares
owned, directly or indirectly, by the Company are owned by the Company
beneficially and of record, free and clear of all liens, pledges, encumbrances
or restrictions of any kind. No Subsidiary has outstanding any securities
convertible into or exchangeable or exercisable for any shares of its capital
stock, there are no outstanding options, warrants, stock appreciation rights,
phantom stock or stock equivalents. Except as set forth in Section 3.1(c) of the
Disclosure Schedule, the Company has no outstanding stock appreciation rights,
phantom stock or stock equivalents or other rights to purchase or acquire any
capital stock of any Subsidiary, there are no irrevocable proxies with respect
to such shares, and there are no contracts, commitments, understandings,
arrangements or restrictions by which any Subsidiary or the Company is bound to
issue additional shares of the capital stock of a Subsidiary. Except for the
Subsidiaries, and as otherwise disclosed in Section 3.1(b) of 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
interest in any business. Each Subsidiary (i) is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation; (ii) has all requisite corporate power and authority and any
necessary governmental authority to carry on its business as it is now being
conducted and to own, operate and lease its properties; and (iii) is qualified
or licensed to do business as a foreign corporation and is in good standing in
each of the jurisdictions in which (A) the ownership or leasing of real property
or the conduct of its business requires such qualification or licensing and (B)
the failure to be so qualified or licensed, either singly or in the aggregate,
would have a Material Adverse Effect. The Company has previously delivered to
Parent and Sub complete and correct copies of the Certificates or Articles of
Incorporation and By-Laws of each Subsidiary, each as amended to date. All such
Certificates or Articles of Incorporation and By-Laws are in full force and
effect.
(c) Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of 40,000,000 shares of Common Stock
comprised of 20,000,000 shares of Voting Common and 20,000,000 shares of
Non-Voting Common. At the close of business on March 24, 1999 (the "Stock
Reference Date"), 13,094,585 shares of Voting Common were issued and
outstanding, 1,359,071 shares of Voting Common were reserved for issuance upon
the exercise of outstanding Options, no shares of Voting Common were reserved
for issuance upon the conversion of any outstanding shares of Non-Voting Common,
no shares of Non-Voting Common were issued and outstanding, 13,094,585 shares of
Non-Voting Common were reserved for issuance upon the
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conversion of any outstanding shares of Voting Common, and no shares of Common
Stock were held by the Company in its treasury. Except as set forth above, at
the close of business on the Stock Reference Date, no shares of capital stock or
other equity securities of the Company were issued, reserved for issuance or
outstanding. Schedule 3.1(c) of the Disclosure Schedule sets forth each plan
(collectively, the "Company Stock Option Plans") pursuant to which any options
or warrants to acquire Common Stock have been, or may be, granted. All
outstanding shares of capital stock of the Company are, and all shares which may
be issued pursuant to the Company Stock Option Plans will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. Except as set forth above or in Section 3.1(c) of the
Disclosure Schedule, the Company has no outstanding option, warrant, stock
appreciation rights, phantom stock, stock equivalents, subscription or other
right, agreement or commitment which either (i) obligates the Company to issue,
sell or transfer, repurchase, redeem or otherwise acquire or vote any shares of
the capital stock of the Company or (ii) restricts the transfer of Common Stock.
As of the Stock Reference Date Section 3.1(c) of the Disclosure Schedule
accurately sets forth the number of shares of Common Stock issuable upon
exercise of each outstanding Option, and the applicable exercise price with
respect to each such Option. Other than as set forth in Section 3.1(c) of the
Disclosure Schedule, the Company has not granted, nor is obligated to grant,
registration rights to any stockholders of the Company in respect of any of the
Common Stock.
(d) Authority; Enforceability; Noncontravention. The Company
has the requisite corporate power and authority to enter into this Agreement
and, subject to the adoption of this Agreement by its stockholders as set forth
in subsection 6.1(a) with respect to the consummation of the Merger, to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to the adoption of this
Agreement by its stockholders as set forth in subsection 6.1(a). This Agreement
has been duly executed and delivered by the Company and, assuming this Agreement
constitutes the valid and binding agreement of Parent and Sub, constitutes a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms except that the enforceability hereof may be subject
to bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and that the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought. Except as disclosed in
Section 3.1(d) of the Disclosure Schedule, the execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated by this
Agreement and compliance with the provisions hereof will not, (i) violate any of
the provisions of the Restated Charter or By-laws of the Company, (ii) subject
to the governmental filings and other matters referred to in the following
sentence, conflict with, result in a breach of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of a material benefit
under, or require the consent of any person under, any indenture or other
agreement, permit, concession, franchise, license or similar instrument or
undertaking to which the Company is a party or by which the Company or any of
its assets is bound or affected, or (iii) subject to the governmental filings
and
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other matters referred to in the following sentence, contravene any law, rule or
regulation of any state of the United States or any political subdivision
thereof or therein, or any order, writ, judgment, injunction, decree,
determination or award currently in effect, which, in the case of clauses (ii)
and (iii) above, alone or in the aggregate, would have a Material Adverse Effect
or prevent consummation of the transactions contemplated hereby. No consent,
approval or authorization of, or declaration or filing with, or notice to, any
governmental agency or regulatory authority (a "Governmental Entity"), which has
not been received or made, is required by or with respect to the Company in
connection with the execution and delivery of this Agreement by the Company or
the consummation by the Company of the transactions contemplated hereby, except
for (i) the requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); (ii) the filing of the certificate of merger with the Delaware
Secretary of State and appropriate documents with the relevant authorities of
other states in which the Company is qualified to do business; (iii) such
filings and consents as may be required under any environmental law pertaining
to any notification, disclosure or required approval triggered by the Merger or
the transactions contemplated by this Agreement other than such filings or
consents which the failure to obtain would not have a Material Adverse Effect;
(iv) any filings with the New York Stock Exchange (the "NYSE") and the
Securities and Exchange Commission (the "SEC") with respect to the delisting and
deregistration of the shares of Voting Common; (v) such other consents,
approvals, authorizations, filings or notices as are set forth in Section
3.1(d)(v) of the Disclosure Schedule and (vi) any applicable filings under state
antitakeover laws, or filings, authorizations, consents or approvals the failure
to make or obtain which, in the aggregate, would not have a Material Adverse
Effect or otherwise materially interfere with the consummation of the
transactions contemplated hereby.
(e) Financial Statements; SEC Reports. The Company has
previously furnished Parent and Sub with true and complete copies of (i) its
Annual Report on Form 10-K for the year ended December 31, 1997 (the "Annual
Report") filed by the Company with the SEC, (ii) its Quarterly Reports on Form
10-Q for the quarters ended March 31, 1998, June 30, 1998 and September 30, 1998
(collectively, the "Quarterly Reports" and, together with the Annual Report, the
"Reports") filed by the Company with the SEC, (iii) proxy statements relating to
all of the Company's meetings of shareholders (whether annual or special) held
or scheduled to be held since December 31, 1997 and (iv) each other registration
statement, proxy or information statement or current report on Form 8-K filed
since September 30, 1998 by the Company with the SEC. Since January 1, 1994, the
Company has complied in all material respects with its SEC filing obligations
under the Exchange Act. The financial statements and related schedules and notes
thereto of the Company contained in the Reports (or incorporated therein by
reference) were prepared in accordance with generally accepted accounting
principles applied on a consistent basis except as noted therein, and fairly
present in all material respects the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and, if applicable, the cash flows for
the periods then ended, subject (in the case of interim unaudited financial
statements) to normal year-end audit adjustments, and such financial statements
complied as of their respective dates in all material respects with applicable
rules and regulations of the SEC. Each such registration statement, proxy
statement and Report was prepared in accordance with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"),
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or the Exchange Act, as applicable, and did not, on the date of effectiveness in
the case of such registration statements, on the date of mailing in the case of
such proxy statements and on the date of filing in the case of such Reports,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(f) Absence of Certain Changes or Events. Except as may be
disclosed in the Reports or as otherwise disclosed in Section 3.1(f) of the
Disclosure Schedule, since September 30, 1998 there has not been (i) any change
in the business, assets, financial condition or results of operations of the
Company or its Subsidiaries or any other event which in any such case has had or
could reasonably be expected to have a Material Adverse Effect; (ii) any damage,
destruction or loss, whether covered by insurance or not, having a material
adverse effect upon the properties or business of the Company and the
Subsidiaries taken as a whole; (iii) any declaration, setting aside or payment
of any dividend, or other distribution in respect of the capital stock of the
Company or any redemption or other acquisition by the Company of any of its
capital stock; (iv) any issuance by the Company, or commitment of the Company to
issue, any shares of its Common Stock or securities convertible into or
exchangeable for shares of its Common Stock; (v) any increase in the rate or
terms of compensation payable or to become payable by the Company or any
Subsidiary to its directors, officers or key employees, except increases
occurring in the ordinary course of business in accordance with its customary
past practices; (vi) any grant or increase in the rate or terms of any bonus,
insurance, pension, severance or other employee benefit plan, payment or
arrangement made to, for or with any directors, officers or key employees,
except increases occurring in the ordinary course of business in accordance with
its customary past practices; (vii) any change by the Company in accounting
methods, principles or practices except as required by generally accepted
accounting principles; (viii) an entry into any agreement, commitment or
transaction by the Company or any Subsidiary which is material to the Company
and its Subsidiaries taken as a whole, except agreements, commitments or
transactions in the ordinary course of business; (ix) any stock split, reverse
stock split, combination or reclassification of the Common Stock; (x) any change
in the terms and conditions of the Company Stock Option Plans except as
contemplated hereby; or (xi) any agreement or commitment, whether in writing or
otherwise, to take any action described in this subsection 3.1(f). Since
December 31, 1997, the Company and the Subsidiaries have conducted their
respective businesses in all material respects only in the ordinary course,
consistent with past custom and practice, except as contemplated by this
Agreement and except to the extent such conduct would not have a Material
Adverse Effect.
(g) Company Schedule 13E-3 and Proxy Materials. All of the
information supplied by the Company for inclusion in the Rule 13e-3 Transaction
Statement on Schedule 13E-3 (the "Schedule 13E-3") referred to in Section 5.2
hereof will not, on the date the Schedule 13E-3 is first filed, and all of the
information supplied by the Company for inclusion in the Definitive Proxy
Statement referred to in Section 5.2 hereof will not, on the date when the
Definitive Proxy Statement is first mailed to the Company's shareholders, and
the Schedule 13E-3 and the Definitive Proxy Statement, as then amended or
supplemented, will not, on the date of the Company's stockholders' meeting
referred to in Section 5.1 hereof or on the Closing Date (as defined in Section
1.2 hereof),
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contain any statement which is false or misleading with respect to any material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Notwithstanding the foregoing, the
Company makes no representation or warranty regarding information furnished by
Parent or Sub for inclusion in the Schedule 13E-3 or the Definitive Proxy
Statement (or any amendment or supplement thereto). The Definitive Proxy
Statement will comply as to form and, with respect to information supplied or to
be supplied in writing by or on behalf of the Company for inclusion in the
Definitive Proxy Statement, substance in all material respects with the
requirements of the Exchange Act and the applicable rules and regulations of the
SEC thereunder.
(h) Board Recommendation. As of the date hereof, the Board of
Directors of the Company has recommended that the stockholders of the Company
vote for adoption of this Agreement, subject to Section 5.8.
(i) Undisclosed Liabilities. Neither the Company nor any of
its Subsidiaries has any material liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become due,
including any liability for taxes), except for (i) liabilities, obligations or
contingencies that are reserved or accrued against the unaudited consolidated
balance sheet of the Company and its Subsidiaries dated as of December 31, 1997
(ii) liabilities which have arisen after December 31, 1997 in the ordinary
course of business, none of which is a liability and (iii) liabilities which
individually or in the aggregate would not have a Material Adverse Effect.
(j) Takeover Provisions Inapplicable. The Restated Charter
provides that Section 203 of the GCL is inapplicable to the Merger.
(k) Brokers. No broker, investment banker, financial advisor
or other person, the fees and expenses of which will be paid by the Company, is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement.
SECTION 3.2 Representations and Warranties of Parent and Sub. Parent
and Sub represent and warrant to the Company as follows:
(a) Organization, Standing and Corporate Power. Parent is a
limited liability company duly organized and validly existing under the laws of
the State of Delaware. Sub is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware. Each of Parent and
Sub has the requisite power (corporate or otherwise) and authority (corporate or
otherwise) to carry on its business as now being conducted. Each of Parent and
Sub is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) would not have a Material Adverse Effect.
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(b) Capitalization. As of the date of this Agreement, the
authorized units of Parent consists of 1,000 common units, none of which are
presently issued and outstanding. As of the date of this Agreement, the
authorized capital stock of Sub consists of (i) 1,000 shares of common stock,
par value $.01 per share, 1,000 shares of which are presently issued and
outstanding which constitutes all of the issued and outstanding capital stock of
Sub. All of the issued and outstanding units and shares of capital stock of
Parent and Sub, as applicable, are validly issued, fully paid and nonassessable.
As of the Effective Time, the capitalization of Parent and Sub and the ownership
of the issued and outstanding shares of the capital stock or other interests of
each of Parent and Sub will be as provided to the Company for inclusion in the
Definitive Proxy Statement.
(c) Authority; Enforceability; Noncontravention. Parent and
Sub have all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by Parent and Sub and the consummation
by Parent and Sub of the transactions contemplated by this Agreement have been
duly authorized by all necessary corporate action on the part of Parent and Sub.
This Agreement has been duly executed and delivered by and, assuming this
Agreement constitutes the valid and binding agreement of the Company,
constitutes a valid and binding obligation of each of Parent and Sub,
enforceable against such party in accordance with its terms, except that the
enforceability hereof may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought. The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this Agreement and compliance
with the provisions of this Agreement will not (i) violate any of the provisions
of the charter documents of Parent, or the Certificate of Incorporation or
By-laws of Sub, (ii) subject to the governmental filings and other matters
referred to in the following sentence, conflict with, result in a breach of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or
loss of a material benefit under, or require the consent of any person under,
any indenture, or other agreement, permit, concession, franchise, license or
similar instrument or undertaking to which Parent or any of its subsidiaries is
a party or by which Parent or any of its subsidiaries or any of their assets is
bound or affected, or (iii) subject to the governmental filings and other
matters referred to in the following sentence, contravene any law, rule or
regulation of any state or of the United States or any political subdivision
thereof or therein, or any order, writ, judgment, injunction, decree,
determination or award currently in effect, which, in the case of clauses (ii)
and (iii) above, singly or in the aggregate, would have a material adverse
effect on the business, financial condition or results of operations of Parent
and Sub taken as a whole or prevent consummation of the transactions
contemplated hereby. No consent, approval or authorization of, or declaration or
filing with, or notice to, any Governmental Entity which has not been received
or made is required by or with respect to Parent or Sub in connection with the
execution and delivery of this Agreement by Parent or Sub or the consummation by
Parent or Sub, as the case may be, of any of the transactions contemplated by
this Agreement, except for (i) the requirements or the Exchange Act, (ii) the
filing of the certificate of merger with the Delaware Secretary of State and
appropriate
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documents with the relevant authorities of other states in which the Company is
qualified to do business, (iii) such other consents, approvals, authorizations,
filings or notices as are set forth in Section 3.1(d)(v) of the Disclosure
Schedule and (iv) any applicable filings under state antitakeover laws, or
filings, authorizations, consents or approvals the failure to make or obtain
which, in the aggregate, would not have a material adverse effect on the
business, financial condition or results of operations of Parent and Sub taken
as a whole or prevent consummation of the transactions contemplated hereby.
(d) Schedule 13E-3 and Proxy Materials. All of the information
to be furnished by Parent or Sub for inclusion in the Schedule 13E-3 and the
Definitive Proxy Statement (or any amendment or supplement thereto) will not, in
the case of the Schedule 13E-3, on the date it is first filed, and in the case
of the Definitive Proxy Statement, on the date it is first mailed to the
Company's shareholders, and in the case of the Schedule 13E-3 and the Definitive
Proxy Statement, as then amended or supplemented, on the date of the Company's
stockholders' meeting referred to in Section 5.1 hereof or on the Closing Date,
contain any statement which is false or misleading with respect to any material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Notwithstanding the foregoing,
Parent and Sub make no representation or warranty regarding information
furnished by the Company for inclusion in the Schedule 13E-3 (or any amendment
or supplement thereto). The information supplied or to be supplied in writing by
or on behalf of Parent or Sub for inclusion in the Schedule 13E-3 will comply as
to form and substance in all material respects with the requirements of the
Exchange Act and the applicable rules and regulations of the SEC thereunder.
(e) Brokers. No broker, investment banker, financial advisor
or other person, the fees and expenses of which will be paid by Parent of Sub,
is entitled to any broker's, finder's, financial advisor's or other similar fee
or commission in connection with the transactions contemplated by this
Agreement.
(f) Financing. Attached hereto as Exhibit C are true and
correct copies of (collectively, the "Equity Letters"); (i) a commitment letter
dated the date hereof from Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P. ("BRSLP")
pursuant to which BRSLP has committed, subject to the terms and conditions set
forth therein, to provide or cause to be provided equity funding of up to
$52,500,000; and (ii) a commitment letter dated the date hereof from Citicorp
Venture Capital, Ltd. ("CVC") pursuant to which CVC has committed, subject to
the terms and conditions set forth therein, to provide or cause to be provided
Equity Funding of up to $52,500,000.
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ARTICLE IV.
COVENANTS RELATING TO CONDUCT OF BUSINESS
PRIOR TO MERGER
SECTION 4.1 Conduct of Business of the Company. Except as
contemplated or otherwise permitted by this Agreement, during the period from
the date of this Agreement to the Effective Time, the Company shall use its
reasonable best efforts to operate, and shall cause each Subsidiary to use its
reasonable best efforts to operate, its business in the ordinary course in all
material respects and comply with applicable laws in all material respects.
Without limiting the generality of the foregoing, during the period from the
date of this Agreement to the Effective Time, except as expressly contemplated
by this Agreement and except as set forth in Section 4.1 of the Disclosure
Schedule, the Company shall not, without the prior written consent of Parent:
(i) (x) declare, set aside or pay any dividends on, or make
any other distributions (whether in cash, stock or property) in respect
of, any of the Company's outstanding capital stock, (y) split, combine or
reclassify any of its outstanding capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its outstanding capital stock, or (z) purchase,
redeem or otherwise acquire any shares of its outstanding capital stock or
any rights, warrants or options to acquire any such shares;
(ii) issue, sell, grant, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities, except for the
issuance of shares of Common Stock upon exercise of Options outstanding
prior to the date of this Agreement and disclosed in Section 3.1(c), or
take any action that would make the Company's representations and
warranties set forth in Section 3.1(c) not true and correct in all
material respects;
(iii) amend its Restated Charter or By-laws or other
comparable charter or organizational documents;
(iv) acquire any business or any corporation, partnership,
joint venture, association or other business organization or division
thereof (or any interest therein) in a transaction or series of
transactions involving aggregate consideration in excess of $25 million or
form any subsidiaries;
(v) sell or otherwise dispose of any of its substantial
assets, except in the ordinary course of business or in a transaction or
series of transactions involving assets with an aggregate value of less
than $5,000,000;
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(vi) make any capital expenditures or commitments with respect
thereto, except capital expenditures or commitments not exceeding the
Company's budget (which capital expenditures budget is described in
Section 4.1 of the Disclosure Schedule) by more than $1,000,000 in the
aggregate as the Company may, in its discretion, deem appropriate;
(vii) (x) incur any indebtedness for borrowed money or
guaranty any such indebtedness of another person, other than (A)
borrowings in the ordinary course under existing lines of credit (or under
any refinancing of such existing lines), (B) indebtedness owing to, or
guaranties of indebtedness owing to, the Company or (C) in connection with
the Financing, or (y) make any loans or advances to any other person,
other than to the Company and other than routine advances to employees,
except in the case of either (x) or (y) as disclosed in Section 4.1 of the
Disclosure Schedule;
(viii) grant or agree to grant to any employee any increase in
wages or bonus (other than any increase in the ordinary course of business
consistent with past practices), severance, profit sharing, retirement,
deferred compensation, insurance or other compensation or benefits, or
establish any new compensation or benefit plans or arrangements, or amend
or agree to amend any existing Company Stock Option Plans, except as may
be required under existing agreements disclosed in Section 3.1(a)(viii) of
the Disclosure Schedule;
(ix) merge, amalgamate or consolidate with any other entity in
any transaction, sell all or substantially all of its business or assets;
(x) enter into or amend any employment, consulting, severance
or similar agreement with any individual which provides for the payment of
an annual base salary in excess of $125,000;
(xi) change its accounting policies in any material respect,
except as required by generally accepted accounting principals;
(xii) cancel, terminate, amend, modify or waive any of the
terms of any confidentiality or standstill agreement executed with respect
to a proposed acquisition of the capital stock or substantially all of the
assets of the Company or any of its Subsidiaries by any other party prior
to the date of this Agreement;
(xiii) except as contemplated by Section 5.8 and Section
7.1(d) hereof, authorize, recommend, propose or announce an intention to
authorize, recommend or propose, or enter into an agreement in principle
or an agreement with respect to any merger, consolidation or business
combination (other than the Merger), any acquisition or disposition of a
material amount of assets or securities (including, without limitation,
the assets or securities of any Subsidiary and other than inventory in the
ordinary course); or
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(xiv) except as contemplated by Section 5.8 and Section 7.1(d)
hereof, commit or agree to take any of the foregoing actions except as
contemplated by Section 5.8 and Section 7.1(d) hereof.
SECTION 4.2 Plans. Other than in connection with the Merger, Parent
and Sub hereby covenant and agree that (a) they shall not sell, dispose of or
otherwise transfer, or cause to be sold, disposed of or otherwise transferred,
directly or indirectly, within one year of the Effective Time (i) more than 50%
of the beneficial ownership of the outstanding voting capital stock of the
Surviving Corporation or (ii) assets constituting more than 50% of the earning
power of the Company and its subsidiaries or with a book value in excess of 50%
of the book value of all assets of the Company and its subsidiaries and (b) the
Surviving Corporation shall not engage in any public offering of its common
equity securities (other than in connection with any offering of an "equity
kicker" which is part of the Financing) within one year of the Effective Time.
ARTICLE V.
ADDITIONAL AGREEMENTS
SECTION 5.1 Meeting of Stockholders. Upon receipt of the Financing
Letters, the Company will take all action necessary in accordance with
applicable law and its Restated Charter and By-laws to duly call, give notice
of, and convene a meeting of its stockholders (the "Stockholders' Meeting") to
consider and vote upon the adoption of this Agreement. The board of directors of
the Company shall recommend such adoption and approval, and subject to fiduciary
obligations under applicable law, shall not withdraw or modify such
recommendation other than in compliance with Section 5.8 and Section 7.1(d) or
if the Fairness Opinion (as defined in Section 5.2) is withdrawn by Sun Trust
Equitable Securities Corporation, and shall take all lawful action necessary to
obtain such approval.
SECTION 5.2 Proxy Statement; Schedule 13E-3. Parent will prepare and
file after consultation with the Company, and the Company will cooperate with
Parent in the preparation and filing of, the Schedule 13E-3 with the SEC with
respect to the transactions contemplated by this Agreement. Parent shall pay the
filing fee for such Schedule 13E-3 and Form S-4. In connection with the
Stockholders' Meeting contemplated by Section 5.1 above, the Company will
prepare and file (after consultations with Parent) a preliminary proxy statement
relating to the transactions contemplated by this Agreement (the "Preliminary
Proxy Statement") which shall be included as part of the registration statement
on Form S-4 (the "Form S-4") with the SEC and will use its commercially
reasonable efforts to respond to the comments of the SEC thereon, and to cause a
final proxy statement and the Form S-4 (such proxy statement together with the
Form X-0, "xxx Definitive Proxy Statement") to be mailed to the Company's
stockholders, in each case as soon as reasonably practicable after providing
Parent with reasonable opportunity to comment thereon. Each party to this
Agreement will notify the other parties promptly of the receipt of the comments
of the
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SEC, if any, and of any request by the SEC for amendments or supplements to the
Schedule 13E-3, the Preliminary Proxy Statement or the Definitive Proxy
Statement or for additional information, and will supply the others with copies
of all correspondence between such party or its representatives, on the one
hand, and the SEC or members of its staff, on the other hand, with respect to
the Schedule 13E-3, the Preliminary Proxy Statement, the Definitive Proxy
Statement or the Merger. If at any time prior to the Stockholders' Meeting, (i)
any event should occur relating to the Company or any of the Subsidiaries which
should be set forth in an amendment of, or a supplement to, the Schedule 13E-3
or the Definitive Proxy Statement, or (ii) any event should occur relating to
Parent or Sub or any of their respective Associates or Affiliates, or relating
to the plans of any such persons for the Surviving Corporation after the
Effective Time of the Merger, or relating to the Financing, in either case that
should be set forth in an amendment of, or a supplement to, the Schedule 13E-3
or the Definitive Proxy Statement, then the Company or Parent (as applicable),
will, upon learning of such event, promptly inform the other of such event and
the Company shall prepare, file and, if required, mail such amendment or
supplement to the Company's stockholders; provided that, prior to such filing or
mailing the Company shall consult with Parent with respect to such amendment or
supplement and shall afford Parent reasonable opportunity to comment thereon.
Parent will furnish to the Company the information relating to Parent and Sub,
their respective Associates and Affiliates and the plans of such persons for the
Surviving Corporation after the Effective Time of the Merger, and relating to
the Financing, which is required to be set forth in the Schedule 13E-3, the
Preliminary Proxy Statement or the Definitive Proxy Statement under the Exchange
Act and the rules and regulations of the SEC thereunder. The Definitive Proxy
Statement shall contain a copy of the written opinion (the "Fairness Opinion")
of Sun Trust Equitable Securities Corporation that the Merger Consideration is
fair from a financial point of view to the Company's stockholders, other than
the Affiliate Stockholders.
SECTION 5.3 Access to Information; Confidentiality.
(a) From the date hereof, the Parent, Sub and their financing
sources shall be entitled to make or cause to be made such reasonable
investigation of the Company and its Subsidiaries, and the financial and legal
condition thereof, as Parent, Sub and their financing sources deem reasonably
necessary or advisable, and the Company shall reasonably cooperate with any such
investigation. In furtherance of the foregoing, but not in limitation thereof,
the Company will, and will cause each of its Subsidiaries to, provide the
Parent, Sub and their financing sources and their respective agents and
representatives, or cause them to be provided, with reasonable access to any and
all of its management personnel, accountants, representatives, premises,
properties, contracts, commitments, books, records and other information of the
Company and each of its Subsidiaries upon reasonable notice during regular
business hours and shall furnish such financial and operating data, projections,
forecasts, business plans, strategic plans and other data relating to the
Company and its Subsidiaries and their respective businesses as the Parent, Sub,
its financing sources and their respective agents and representatives shall
reasonably request from time to time, including all information necessary to
satisfy closing conditions for obtaining Financing for the transactions
contemplated hereby; provided, that until the Closing Date all information
provided to Parent, Sub and their financing sources and representatives pursuant
hereto (other than the information
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(i) contained in any offering memorandum prepared in connection with the
registration, offering, placement, or syndication of any of the Financing or the
Senior Preferred, (ii) disclosed in the process of marketing the Financing or
the Senior Preferred, or (iii) contained in any filing with the SEC, the NYSE or
any other national securities exchange), shall be subject to the confidentiality
provisions set forth in Section 5.3(b). The Company agrees to cause its and its
Subsidiaries' officers, employees, consultants, agents, accountants and
attorneys to cooperate with the Parent, Sub and their financing sources and
representatives in connection with such review and the Financing, including the
preparation by the Parent, Sub and their financing sources of any offering
memorandum or related documents related to such Financing. No investigation by
the Parent or Sub heretofore or hereafter made shall modify or otherwise affect
any representations and warranties of the Company, which shall survive any such
investigation, or the conditions to the obligation of the Parent and Sub to
consummate the transactions contemplated hereby.
(b) Subject to Section 5.7 and Section 5.3(a), all information
disclosed, whether before or after the date hereof, pursuant to this Agreement
or in connection with the transactions contemplated by, or the discussions and
negotiations preceding, this Agreement to any other party (or its
representatives) shall constitute "Evaluation Material" within the meaning of
that certain Confidentiality and Standstill Agreement dated March 23, 1999,
between the Company and certain affiliates of the Parent (the "Confidentiality
Agreement") and without limiting the foregoing, shall be kept confidential by
such other party and its representatives and shall not be used by any Person,
other than in connection with evaluating and giving effect to the Merger and the
other the transactions contemplated by this Agreement including, without
limitation, in connection with procurement of the Financing and in connection
with Parent and Sub's filings under the Exchange Act. If the Merger is not
consummated and this Agreement is terminated in accordance with its terms, at
the request of the Company, Parent or Sub (as applicable) shall return or
destroy any information provided hereunder.
SECTION 5.4 Commercially Reasonable Efforts. Upon the terms and
subject to the conditions and other agreements set forth in this Agreement, each
of the parties agrees to use commercially reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including the satisfaction of the respective conditions set forth in
Article VI. Subject to the terms and provisions of the Confidentiality
Agreement, the Company and Parent shall each furnish to one another and to one
another's counsel all such information as may be required in order to accomplish
the foregoing actions. If any state takeover statute or similar statute or
regulation becomes applicable to the Merger, this Agreement or any of the other
transactions contemplated hereby, the Company and Parent will take all
commercially reasonable action necessary to ensure that the Merger and the other
transactions contemplated hereby may be consummated as promptly as practicable
on the terms contemplated by this Agreement and otherwise to minimize the effect
of such statute or regulation on the Merger and the other transactions
contemplated by this Agreement.
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SECTION 5.5 Financing. Each of Parent and Sub shall use their
commercially reasonable efforts to obtain the Financing on terms and conditions
reasonably satisfactory to them and to deliver to the Company true and correct
copies of the fully executed and delivered Definitive Financing Agreements with
respect thereto on or before the Closing Date. In furtherance thereof, not later
than thirty (30) calendar days after the date hereof, Parent or Sub will provide
the Company with true and correct copies of one or more highly confident letters
and/or commitment letters in respect of bank financing, in each case, which are
in customary, executable form, from one or more reputable commercial or
investment banks indicating the willingness to underwrite, syndicate or
otherwise provide, subject to the terms and conditions set forth therein, debt
financing to the Surviving Company, the net proceeds of which shall not be less
than $335,000,000 in the aggregate (the "Financing Letters"). Parent and Sub
shall use their commercially reasonable efforts to satisfy on or before the
Closing Date all requirements of the Financing Letters which are conditions to
closing the transactions constituting the Financing and to drawing the cash
proceeds thereunder; provided, that in no event shall Parent or Sub be required
to pay any additional fees or offer an "equity kicker" in excess of those
explicitly provided for in the Financing Letters. The obligations contained
herein are not intended, nor shall they be construed, to benefit or confer any
rights upon any person, firm or entity other than the Company.
SECTION 5.6 Indemnification; Directors' and Officers' Insurance.
(a) From and after the Effective Time, Parent shall, and shall
cause the Surviving Corporation to, indemnify and hold harmless each person who
is now, at any time has been or who becomes prior to the Effective Time a
director, officer, employee or agent of the Company or any of its subsidiaries
(the "Indemnified Parties") against any and all losses, claims, damages,
liabilities, costs, expenses (including reasonable fees and expenses of legal
counsel), judgments, fines or amounts paid in settlement in connection with any
claim, action, suit, proceeding or investigation (each a "Claim") arising in
whole or in part out of or pertaining to any action or omission occurring prior
to the Effective Time (including, without limitation, any which arise out of or
relate to the transactions contemplated by this Agreement), regardless of
whether such Claim is asserted or claimed prior to, at or after the Effective
Time, to the full extent permitted under Delaware law or the Surviving
Corporation's Certificate of Incorporation or By-laws in effect as of the
Effective Date; provided, however, that in no event shall the Surviving
Corporation be required to indemnify, defend or hold harmless any director,
officer or employee of the Company or any of its Subsidiaries in respect of any
loss, cost, damage, expense or liability incurred by such party in respect of
any Common Stock or Options held by such persons prior to or after the Effective
Time. Without limiting the generality of the preceding sentence, in the event
any Indemnified Party becomes involved in any Claim, after the Effective Time,
Parent shall, and shall cause the Surviving Corporation to, periodically advance
to such Indemnified Party its legal and other expenses (including the cost of
any investigation and preparation incurred in connection therewith), subject to
the provisions of paragraph (b) of this Section 5.6, and subject to the
providing by such Indemnified Party of an undertaking to reimburse all amounts
so advanced in the event of a final and non-appealable determination by a court
of competent jurisdiction that such Indemnified Party is not entitled thereto.
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(b) The Indemnified Party shall control the defense of any
Claim with counsel selected by the Indemnified Party, which counsel shall be
reasonably acceptable to Parent, provided that Parent and the Surviving
Corporation shall be permitted to participate in the defense of such Claim at
their own expense, and provided further that if any D&O Insurance (as defined in
paragraph (c) of this Section 5.6) in effect at the time shall require the
insurance company to control such defense in order to obtain the full benefits
of such insurance and such provision is consistent with the provisions of the
Company's D&O Insurance existing as of the date of this Agreement, then the
provisions of such policy shall govern the selection of counsel. Neither Parent
nor the Surviving Corporation shall be liable for any settlement effected
without its written consent, which consent shall not be withheld unreasonably.
(c) For a period of six years after the Effective Time (the
"Insurance Carry-Over Period"), Parent or the Surviving Corporation shall
provide officers' and directors' liability insurance ("D&O Insurance") covering
each Indemnified Party who is presently covered by the Company's officers' and
directors' liability insurance or will be so covered at the Effective Time with
respect to actions or omissions occurring prior to the Effective Time, on terms
no less favorable than such insurance maintained in effect by the Company as of
the date hereof in terms of coverage and amounts, provided that Parent and the
Surviving Corporation shall not be required to pay in the aggregate an annual
premium for D&O Insurance in excess of 200% of the last annual premium paid
prior to the date hereof, but in such case shall purchase as much coverage as
possible for such amount.
(d) The Certificate of Incorporation and By-laws of the
Surviving Corporation shall contain substantially similar provisions with
respect to indemnification, personal liability and advancement of fees and
expenses as set forth in the Restated Charter and By-laws of the Company as of
the Effective Time, which provisions shall not be amended, repealed or otherwise
modified during the Insurance Carry-Over Period in any manner that would
adversely affect the rights thereunder of the Indemnified Parties in respect of
actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the transactions contemplated by this Agreement), unless
such modification is required by law. Parent, Sub and the Company agree that all
rights existing in favor of any Indemnified Party under any indemnification
agreement in effect as of the date hereof (each of which shall be listed on
Section 5.6(d) of the Disclosure Schedule hereto shall survive the Merger and
shall continue in full force and effect, without any amendment thereto. In the
event any Claim is asserted or made, any determination required to be made with
respect to whether an Indemnified Party's conduct complies with standards set
forth under such provisions of the Restated Charter or By-laws or under the
DGCL, as the case may be, shall be made by independent legal counsel selected by
such Indemnified Party and reasonably acceptable to Parent unless the DGCL, the
Restated Charter or By-laws provide otherwise; and provided, that nothing in
this Section 5.6 shall impair any rights or obligations of any current or former
director or officer of the Company or any of its subsidiaries, including
pursuant to the respective certificates of incorporation or bylaws of Parent,
the Surviving Corporation or the Company, or their respective subsidiaries,
under the DGCL or otherwise.
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(e) The provisions of this Section 5.6 are intended to be for
the benefit of, and shall be enforceable by, each of the Indemnified Parties,
his or her heirs and his or her personal representatives and shall be binding on
all successors and assigns of Parent, Sub, the Company and the Surviving
Corporation.
SECTION 5.7 Public Announcements. Parent and Sub, on the one hand,
and the Company, on the other hand, will consult with each other before issuing,
and provide each other the opportunity to review and comment upon, any press
release or other public statements with respect to the transactions contemplated
by this Agreement, including the Merger, and shall not issue any such press
release or make any such public statement prior to such consultation; provided,
that any such party may make any public statement which it in good faith
believes, based on advice of counsel, is necessary or advisable in connection
with any requirement of applicable law, court process or by obligations pursuant
to any listing agreement with any national securities exchange, it being
understood and agreed that each party shall promptly provide the other parties
hereto with copies of such public statement.
SECTION 5.8 Acquisition Proposals.
(a) The Company shall not, nor shall it authorize or permit
any of its Representatives to, directly or indirectly, (i) solicit, initiate or
encourage the submission of any Acquisition Proposal (as hereinafter defined);
(ii) participate in any discussions or negotiations regarding, or furnish to any
person any non-public information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal; provided, however,
that the foregoing shall not prohibit the Independent Directors from furnishing
information or requiring the Company to furnish information to, or entering into
discussions or negotiations with, any person in connection with an unsolicited
bona fide Acquisition Proposal by such person if, and to the extent that such
person first enters into a standstill and confidentiality agreement with the
Company on terms no less favorable to the Company than those contained in the
Confidentiality Agreement; provided, that in no event shall the Company waive or
amend any restriction contained in any such agreement. Prior to furnishing
information to, or entering into discussions or negotiations with, such person
or entity, the Company shall provide prompt written notice to Parent to such
effect, such written notice shall include the material terms and conditions (to
the extent known to the Company) of such Acquisition Proposal or inquiry, and
the identity of the person making any such Acquisition Proposal or inquiry. For
purposes of this Agreement, "Acquisition Proposal" means any proposal with
respect to a merger, consolidation, share exchange, business combination or
similar transaction involving the Company or any of its Subsidiaries, or any
purchase of all or any significant portion of the assets of the Company or any
of its Subsidiaries, or any equity interest in the Company or any of its
Subsidiaries, other than the transactions contemplated hereby.
(b) The Company shall not enter into any agreement with
respect to any Acquisition Proposal or enter into any agreement, arrangement or
understanding requiring it to abandon, terminate or fail to consummate the
Merger or any other transactions contemplated by this
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Agreement unless: (i) the Company's Board of Directors determines in good faith
by a majority vote, after consultation with its financial and legal advisors
that such transaction (the "Alternative Transaction") (A) is more favorable to
the stockholders of the Company from a financial point of view than the
transactions contemplated by this Agreement (including any adjustment to the
terms and conditions of such transaction proposed in writing by Parent in
response to such Acquisition Proposal), (B) is not subject to any material
contingency, to which the other party thereto has not reasonably demonstrated
(as determined in good faith by the Board of Directors of the Company) its
ability to obtain, including the receipt of government consents or approvals
(including any such approval required under the HSR Act), and (C) is reasonably
likely to be consummated and is in the best interest of the stockholders of the
Company; and (ii) the Company has received both advice from its outside legal
counsel (which may be the Company's regularly retained outside counsel) that
there is a material risk that failure to approve such an Alternative Proposal
will constitute a breach of the Board of Directors' fiduciary duties under
applicable law, and (y) a written opinion (a copy of which has been delivered to
Parent and Sub) from Sun Trust Equitable Securities Corporation (or any other
nationally recognized investment banking firm) that the Alternative Transaction
is fair from a financial point of view to the stockholders of the Company, other
than any stockholders participating in the buying group in such transaction;
provided, that the Company shall immediately prior to entering into such
agreement have complied with the provisions of Section 7.1(d) hereof, including,
without limitation, the payment to Parent of its expenses as provided for in
Section 7.3.
SECTION 5.9 Stockholder Litigation. The Company shall give Parent,
at its own cost and expense, the opportunity to participate in the defense or
settlement of any stockholder litigation against the Company and its directors
relating to the transactions contemplated by this Agreement; provided, however,
that no such settlement shall be agreed to without Parent's consent, which
consent shall not be unreasonably withheld.
SECTION 5.10 Board Action Relating to Stock Option Plans and
Options. As soon as reasonably practicable following the date of this Agreement,
to the extent permitted by the Company Stock Option Plans and applicable law,
the Board of Directors of the Company (or, if appropriate, any committee
administering a Company Stock Option Plans) shall adopt such resolutions or take
such actions as may be necessary or appropriate to adjust the terms of all
outstanding Company Stock Options in accordance with Section 2.2, and shall make
such other changes to the Company Stock Option Plans as it deems necessary or
appropriate to give effect to the Merger. In addition, prior to the Effective
Time, the Board of Directors of the Company shall adopt such resolutions and
take such actions as may be required to amend the terms of all outstanding
Options in accordance with Section 2.2, to the extent permitted by the Company
Stock Option Plans and applicable law, and shall make such other changes to the
Options as it deems appropriate to give effect to the Merger.
SECTION 5.11 Notices of Certain Events. The Company and Parent shall
promptly notify the other of:
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(a) the receipt of any notice or other communication from any
person alleging that the consent of such person is or may be required in
connection with the transactions contemplated by this Agreement;
(b) the receipt of any notice or other communication from any
governmental or regulatory agency or authority in connection with the
transactions contemplated by this Agreement;
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its actual knowledge, threatened against, relating
to or involving or otherwise affecting the Company or any Subsidiary, on the one
hand, or Parent or Sub, on the other hand, which, in either case, could
materially interfere with the consummation of the transactions contemplated by
this Agreement; and
(d) any action, event or occurrence that would constitute a
breach of any representation, warranty, covenant or agreement of it set forth in
this Agreement which could reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.12 Exchange Act and Stock Exchange Filings. Unless an
exemption shall be expressly applicable to the Company, or unless Parent agrees
otherwise in writing, the Company will file with the SEC and the NYSE all
reports required to be filed by it pursuant to the rules and regulations of the
SEC and the NYSE (including, without limitation, all required financial
statements).
SECTION 5.13 Purchase of Common Stock. The Company agrees that it
will not object to the purchase by Parent or Sub of shares of Common Stock from
stockholders of the Company listed on Exhibit 2.1(c) or Affiliates or Associates
thereof, prior to the Effective Time so long as the purchase price for such
shares does not exceed the Merger Consideration.
ARTICLE VI.
CONDITIONS PRECEDENT
SECTION 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approval. This Agreement shall have been
adopted by (i) the affirmative vote of holders of a majority of the outstanding
shares of Voting Common and (ii) the affirmative vote of holders of a majority
of the outstanding shares of Voting Common that are not beneficially owned by
the Affiliated Stockholders or by persons that are Affiliates or Associates of
the Affiliated Stockholders.
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(b) Governmental and Regulatory Consents. All filings required
to be made prior to the Effective Time with, and all consents, approvals,
permits and authorizations required to be obtained prior to the Effective Time
from, Governmental Entities, including, without limitation, those set forth in
Section 3.1(d)(iii) of the Disclosure Schedule, in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby by the Company, Parent and Sub, and which, either
individually or in the aggregate, if not obtained would have a Material Adverse
Effect or would prevent consummation of the Merger, will have been made or
obtained (as the case may be).
(c) No Injunctions, Restraints or Litigation. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect; provided, however,
that the parties invoking this condition shall use reasonable efforts to have
any such order or injunction vacated. There shall not be threatened, instituted
or pending any action, proceeding, application or counterclaim by any
Governmental Entity before any court or governmental regulatory or
administrative agency, authority or tribunal (i) which if adversely determined
would have a Material Adverse Effect on the Surviving Corporation or the ability
of any party to this Agreement to perform its obligations hereunder or (ii)
which challenges or seeks to challenge, restrain or prohibit the consummation of
the Merger.
(d) Form S-4. (a) The Form S-4 shall have become effective
under the Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order; (b) any material "blue sky" and other state
securities laws applicable to the registration and qualification of, and any
rules or regulations of any self-regulatory organization applicable to, the
Senior Preferred to be issued in connection with the Merger shall have been
complied with; and (c) the Definitive Proxy Statement and the Schedule 13E-3
shall have been disseminated to the extent, and for the minimum time period
required by, the Exchange Act and the rules and regulations promulgated
thereunder.
SECTION 6.2 Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are further subject to the
following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in Section 3.1 shall be true and correct in
all respects, in each case as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date, except (i) to the
extent such representations and warranties speak as of an earlier date (ii) for
changes permitted or contemplated by this Agreement and (iii) for matters or
circumstances or events which, individually or in the aggregate, would not have
a Material Adverse Effect, provided that for purposes of determining whether any
such representation or warranty has been breached, any materiality qualifier
therein shall be disregarded, and Parent shall have received an officers'
certificate signed on behalf of the Company to the effect set forth in this
paragraph.
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(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all material obligations required
to be performed by it under this Agreement at or prior to the Closing Date, and
Parent shall have received an officers' certificate signed on behalf of the
Company to such effect.
(c) Financing. On or prior to the Effective Time, Parent
and/or Sub shall have completed their arrangements for the Financing and
received the cash proceeds thereof in an amount necessary to consummate the
transactions contemplated hereby and to pay all fees and expenses in connection
therewith, each on terms and conditions reasonably satisfactory to the Parent.
(d) Dissenting Shares. Parent shall have received evidence, in
form and substance reasonably satisfactory to it, that the number of Dissenting
Shares shall constitute no greater than 5% of the total number of shares of
Voting Stock outstanding immediately prior to the Effective Time, on a
fully-diluted basis.
SECTION 6.3 Conditions to Obligations of the Company. The obligation
of the Company to effect the Merger is further subject to the following
conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Sub set forth in Section 3.2 that are qualified by
materiality shall be true and correct and such representations and warranties of
Parent and Sub set forth in Section 3.2 that are not so qualified shall be true
and correct in all material respects, in each case as of the date of this
Agreement and as of the Closing Date as though made on and as of the Closing
Date, except (i) to the extent such representations and warranties speak as of
an earlier date and (ii) for changes permitted or contemplated by this
Agreement, and the Company shall have received a certificate signed on behalf of
Parent by the chief executive officer and the chief financial officer of Parent
to the effect set forth in this paragraph.
(b) Performance of Obligations of Parent and Sub. Parent and
Sub shall have performed in all material respects all obligations required to be
performed by them under this Agreement at or prior to the Closing Date, and the
Company shall have received a certificate signed on behalf of Parent by the
chief executive officer and the chief financial officer of Parent to such
effect.
ARTICLE VII.
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 Termination. This Agreement may be terminated and
abandoned at any time prior to the Effective Time, whether before or after
adoption of this Agreement by the stockholders of the Company or the Sub:
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(a) automatically without further action by any party, in the
event that the Financing Letters referred to in Section 5.5 shall not have been
delivered within the time period specified therein;
(b) by mutual written consent of Parent and the Company; or
(c) by either Parent or the Company:
(i) if, upon a vote at the Stockholders Meeting, or any
adjournment thereof, the adoption of this Agreement by the stockholders of
the Company required by Delaware law, the Company's Restated Charter or
the terms of this Agreement (which vote in any event shall include the
affirmative vote of both (A) the holders of a majority of the outstanding
shares of Voting Common and (B) the holders of a majority of the
outstanding shares of Voting Common, that are not beneficially owned by
the Affiliated Stockholders or by Persons that are Affiliates or
Associates of the Affiliated Stockholders) shall not have been obtained;
or
(ii) if the Merger shall not have been consummated on or
before October 31, 1999, provided that the failure to consummate the
Merger is not attributable to the failure of the terminating party to
fulfill its obligations pursuant to this Agreement; or
(iii) if any Governmental Entity shall have issued an
order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the Merger and such order, decree,
ruling or other action shall have become final and nonappealable; or
(d) by the Company, if: (i) the Board of Directors of the
Company shall have approved an Alternative Transaction after determining, in
good faith, after consultation with its financial and legal advisors, that such
transaction Alternative Transaction (A) is more favorable to the stockholders of
the Company from a financial point of view than the transactions contemplated by
this Agreement (including any adjustment to the terms and conditions of such
transaction proposed in writing by Parent in response to such Acquisition
Proposal), (B) is not subject to any material contingency as to which the other
party thereto has not reasonably demonstrated (as determined in good faith by
the Board of Directors of the Company) its ability to obtain, including the
receipt of government consents or approvals (including any such approval
required under the HSR Act), and (C) is reasonably likely to be consummated and
is in the best interest of the stockholders of the Company; and (ii) the Company
has received both (x) advice from its outside legal counsel (which may be the
Company's regularly retained outside counsel) there is a material risk that
failure to approve such an Acquisition Proposal will constitute a breach of the
Board of Directors' fiduciary duties under applicable law and (y) a written
opinion (a copy of which has been delivered to Parent and Sub) from Sun Trust
Equitable Securities Corporation (or any other nationally recognized investment
banking firm) that the Alternative Transaction is fair from a financial point of
view to the stockholders of the Company, other than any stockholders
participating
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in the buying group in such transaction; provided that, any such termination
shall not be effective unless, (i) the Company has provided Parent written
notice (the "Termination Intention Notice") that it intends to terminate this
Agreement pursuant to this Section 7.1(d), which notice shall also identify the
Alternative Transaction then determined to be more favorable and the parties
thereto and include a copy of the acquisition agreement or other similar
agreement for such Alternative Transaction in the form to be entered into, (ii)
at least five full business days after the Company has delivered the Termination
Intention Notice (provided that the opinions referred to in clauses (x) and (y)
above shall continue in effect without revision or modification), the Company
delivers to Parent and Sub a written notice (the "Termination Notice") of
termination of this Agreement pursuant to this Section 7.1(d), and (iii) upon
delivery of Termination Notice, the Company reimburses Parent for its expenses
as provided in Section 7.3 by delivery to Parent of a check or wire transfer of
immediate available funds to such account as is designated by Parent. The
payment of such expenses shall be accompanied by a written acknowledgment from
the Company and from the other party to the Alternative Transaction that the
Company and such other party have irrevocably waived any right to contest such
payment; or
(e) by Parent, if the Company or the Board of Directors of the
Company shall have (i) breached any provision of Section 5.8, (ii) withdrawn or
modified, in a manner materially adverse to Parent or Sub, the approval or
recommendation by the Board of Directors of the Company of this Agreement or the
transactions contemplated hereby or (iii) approved another Acquisition Proposal
or Alternative Transaction; or
(f) by Parent, if any of the conditions set forth in Section
6.2 shall have become incapable of fulfillment, and shall not have been waived
by Parent; or
(g) by the Company, if any of the conditions set forth in
Section 6.3 shall have become incapable of fulfillment, and shall not have been
waived by the Company; or
(h) by the Parent, if there shall have occurred a material
disruption of or a material adverse change in conditions in the banking or
capital markets which has a material adverse effect on the syndication of bank
credit facilities or consummation of high yield debt offerings:
provided, however, that the party seeking termination pursuant to clause (f) or
(g) above is not in material breach of any of its material representations,
warranties, covenants or agreements contained in this Agreement.
SECTION 7.2 Effect of Termination. In the event of termination of
this Agreement by either the Company or Parent as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company, other than the last
three sentences of Section 5.3(b) and Sections 7.2, 7.3 and 8.2. Nothing
contained in this Section shall relieve any party from any liability resulting
from any wilful and material breach of the covenants or agreements set forth in
this Agreement.
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SECTION 7.3 Expenses. In the event that this Agreement is terminated
by (i) the Company pursuant to subsection 7.1(d) or (ii) the Parent pursuant to
clauses (i) or (iii) of subsection 7.1(e), the Parent and Sub shall be entitled
to reimbursement by the Company for their out-of-pocket expenses incurred in
connection with the negotiation, execution, delivery and performance of this
Agreement and the Financing; provided, that (A) such reimbursement for expenses
shall not exceed the sum of (x) $2,000,000, plus (y) any fees and expenses
incurred in connection with obtaining the Financing if the Company requests one
or more executed Financing Letters, which in any event shall not exceed 2.0% of
the maximum amount of any such Financing and (B) such reimbursement for expenses
shall become payable promptly upon delivery by Parent to the Company of a
certificate of an officer of the Parent setting forth in reasonable detail the
true and correct amount of costs and expenses (whether paid or payable) incurred
by Parent or Sub in connection with the transactions contemplated by this
Agreement; provided, that any payment to Parent or Sub in respect of costs or
expenses paid to an Affiliate of Parent or Sub will be limited to actual
out-of-pocket expenses incurred by such affiliate. In addition, in the event
that (x) this Agreement is terminated by the Parent pursuant to clause (ii) of
subsection 7.1(e), or by either the Parent or the Company pursuant to Section
7.1(c)(i) or Section 7.1(c)(ii) and (y) within six months of such termination
the Company consummates or enters into an agreement to consummate an Alternative
Transaction which involves aggregate consideration greater than or equal to the
aggregate consideration which would otherwise be received by the stockholders of
the Company pursuant to this Agreement, upon the consummation of such
transaction, the Company shall be required to pay and reimburse Parent for its
out-of-pocket expenses in accordance with the preceding sentence.
SECTION 7.4 Amendment. Subject to the applicable provisions of the
DGCL, at any time prior to the Effective Time, whether before or after adoption
of this Agreement by the stockholders of the Company, the parties hereto may
modify or amend this Agreement, by written agreement executed and delivered by
duly authorized officers of the respective parties; provided, however, that
after adoption of this Agreement by the stockholders of the Company or the Sub,
no amendment shall be made which by law would require the further approval of
such stockholders, without such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties; provided, further, that no amendment affecting the rights of the
Independent Directors pursuant to the first proviso in the first sentence of
Section 5.8 shall be effective without the consent of the Independent Directors.
SECTION 7.5 Extension; Waiver. At any time prior to the Effective
Time, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) subject
to Section 7.4, waive compliance with any of the agreements or conditions of the
other parties 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 such rights.
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SECTION 7.6 Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 7.1 (other than
Section 7.1(a)), an amendment of this Agreement pursuant to Section 7.4 or an
extension or waiver pursuant to Section 7.5 shall, in order to be effective and
in addition to requirements of applicable law, require, in the case of Parent,
Sub or the Company, action by its Board of Directors or the duly authorized
designee of its Board of Directors.
ARTICLE VIII.
GENERAL PROVISIONS
SECTION 8.1 Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section 8.1 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time, including, without
limitation, Section 5.7.
SECTION 8.2 Fees and Expenses. Except as provided otherwise in
Sections 5.2 and 7.3, whether or not the Merger shall be consummated, each party
hereto shall pay its own expenses incident to preparing for, entering into and
carrying out this Agreement and the consummation of the transactions
contemplated hereby.
SECTION 8.3 Definitions. For purposes of this Agreement:
(a) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act;
(b) "Common Stock" means collectively, the Voting Common and
the Non-Voting Common;
(c) "Definitive Financing Agreements" means collectively any
of the documents pursuant to which the Financing is given effect.
(d) "Financing" means the financing pursuant to the terms of
the Equity Letters and the Financing Letters.
(e) "Independent Director" shall mean each of Xxxxx X. Xxxxxx
and Xxxxxxx X. Xxxxxx.
(f) "Non-Voting Common" means the Class B Common Stock, par
value $.01 per share, of the Company.
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(g) "person" or "Person" means an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization or
other entity;
(h) "Senior Preferred" means the 12.0% Exchangeable Preferred
Stock of the Surviving Corporation, $0.01 par value, having an initial
liquidation preference of $2.50 per share, and the other material terms set
forth in Exhibit B hereto.
(i) "Voting Common" means the Common Stock, par value $.01 per
share, of the Company.
SECTION 8.4 Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) or telecopy 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 Parent or Sub, to
CBR Acquisition, L.L.C.
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
with a copy (which shall not constitute notice to Parent
or Sub) to:
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
(b) if to the Company, to
Cort Business Service Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
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with a copy (which shall not constitute notice to the
Company) to:
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: G. Xxxxxx X'Xxxxxxx
SECTION 8.5 Interpretation. When a reference is made in this
Agreement to a Section or Schedule, such reference shall be to a Section of, or
a Schedule to, this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
SECTION 8.6 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 8.7 Entire Agreement; Third-Party Beneficiaries. This
Agreement, the Confidentiality Agreement and the other agreements referred to
herein constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement. This Agreement is not intended to confer upon
any person, other than the parties hereto and the third party beneficiaries
referred to in the following sentence, any rights or remedies. The parties
hereto expressly intend the provisions of Section 5.6 and Article II to confer a
benefit upon and be enforceable by, as third party beneficiaries of this
Agreement, the third persons referred to in, or intended to be benefitted by,
such provisions.
SECTION 8.8 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 8.9 Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent, not to be unreasonably withheld, of the other
parties, and any such assignment that is not consented to shall be null and
void, except that Parent may assign this Agreement without the consent of the
Company (i) to any wholly owned Subsidiary or Parent, (ii) together with all of
the outstanding capital stock of Sub, to an entity organized under the corporate
or limited liability laws of a jurisdiction of one of the United States of
America, the ownership interests of which entity are substantially identical to
the ownership interests of Parent and which entity specifically and expressly
assumes by written
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agreement the obligations of Parent under this Agreement, in either case without
Parent being released from liability hereunder, or (iii) for collateral security
purposes to any source of financing to the Parent, Sub or Surviving Company.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
SECTION 8.10 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
(without requirement to post a bond) the terms and provisions of this Agreement,
this being in addition to any other remedy to which they are entitled at law or
in equity.
SECTION 8.11 Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
SECTION 8.12 WAIVER OF JURY TRIAL EACH OF THE PARTIES HERETO WAIVES
ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON,
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY PARTY
HERETO.
SECTION 8.13 Time is of the Essence. Parent and Sub agree that time
is of the essence with respect to every covenant, condition to be satisfied, and
action to be taken hereunder within a specified period of time, and shall
proceed accordingly with respect to every action necessary, proper or advisable
to make effective the transactions contemplated by this Agreement.
* * * * *
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
CORT BUSINESS SERVICES CORPORATION
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: President
Attest:
----------------------------------
Name:
Title:
CBF HOLDING LLC
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
Attest:
----------------------------------
Name:
Title:
CBF MERGERCO INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
Attest:
----------------------------------
Name:
Title:
