Exhibit (b)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 2, 1999, (the "Agreement"),
by and among THE GEON COMPANY, a Delaware corporation ("Parent"), TGC
ACQUISITION CORPORATION, a Virginia corporation and a wholly-owned subsidiary of
Parent ("Sub"), and X'XXXXXXXX CORPORATION, a Virginia corporation (the
"Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have approved the acquisition of the Company by Parent on the terms and subject
to the conditions set forth in this Agreement;
WHEREAS, in contemplation thereof it is proposed that Sub will make a
tender offer (the "Offer") to purchase all the issued and outstanding shares of
common stock, $1.00 par value, of the Company ("Common Stock"), subject to the
terms and conditions of this Agreement, at a price per share of Common Stock of
$12.25 net to the seller in cash (the "Offer Price") and, if less than all of
the issued and outstanding shares of Common Stock are tendered and the Offer is
completed, Sub will merge with the Company in the manner hereinafter described;
WHEREAS, the Directors of the Company have unanimously determined that each
of the Offer and the Merger (as hereinafter defined) are fair to, and in the
best interests of, the holders of Common Stock, approved the Offer and the
Merger and recommended the acceptance of the Offer and approval and adoption of
this Agreement by the stockholders of the Company;
WHEREAS, in order to induce Parent and Sub to enter into this Agreement,
the Company's Board of Directors has taken action to eliminate any requirement
under the Trust Agreement for X'Xxxxxxxx Corporation Salary Continuation
Agreements, with First Union National Bank as trustee and dated as of November
18, 1997 (the "Salary Continuation Agreements Trust") that the Salary
Continuation Agreements Trust be fully funded for all current benefit
obligations upon a change of control of the Company; and
WHEREAS, as a further inducement for Parent and Sub to enter into this
Agreement, Xxxxxx X. Xxxxxx XX, Xxxxxxx X. Xxxxxx and Xxxx C. O. Xxxxxx have,
simultaneously with the execution of this Agreement, entered into share tender
agreements with Parent and Sub (the "Share Tender Agreements"), pursuant to
which they have agreed to tender into the Offer all of the shares of Common
Stock held by them.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
THE OFFER
1.1 The Offer. Provided that (a) this Agreement shall not have been
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terminated in accordance with Article VI hereof, (b) the Share Tender Agreements
shall have been executed
simultaneously with this Agreement and (c) the Board of Directors has taken
action to eliminate any requirement that the Salary Continuation Agreements
Trust be fully funded for all current benefit obligations upon a change of
control of the Company, and so long as none of the events set forth in Annex A
hereto (the "Tender Offer Conditions") shall have occurred and are continuing,
as promptly as practicable, but in no event later than the fifth business day
after the public announcement of the execution of this Agreement, Sub shall
commence the Offer. The obligations of Sub to accept for payment and promptly to
pay for any shares of Common Stock tendered shall be subject only to the Tender
Offer Conditions, any of which may be waived by Parent and Sub; provided,
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however, that, without the consent of the Company, Sub shall not waive the
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condition that there shall have been validly tendered and not validly withdrawn
prior to the expiration of the Offer a number of shares of Common Stock which
represent at least 70% of the total voting power of all shares of capital stock
of the Company outstanding on a fully diluted basis (the "Minimum Condition").
The Tender Offer Conditions are for the sole benefit of Parent and Sub and may
be asserted by Parent and Sub regardless of the circumstances giving rise to any
such Tender Offer Condition and, subject to the preceding sentence, may be
waived by Parent and Sub in whole or in part. Sub expressly reserves the right
to modify the terms of the Offer, including, without limitation, except as
provided below, to extend the Offer beyond any scheduled expiration date;
provided, however, without the consent of the Company Sub shall not (i) reduce
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the number of shares of Common Stock to be purchased in the Offer, (ii) reduce
the Offer Price, (iii) modify or add to the conditions set forth in Annex A or
(iv) change the form of consideration payable in the Offer. Notwithstanding the
foregoing, the Offer may not be extended beyond any scheduled expiration date
unless any of the Tender Offer Conditions shall not have been satisfied;
provided, however, (i) even if the Tender Offer Conditions have not been
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satisfied, the Offer may not be extended beyond the three month anniversary of
the date of commencement of the Offer and (ii) if the Tender Offer Conditions
have been satisfied, then the Offer may be extended for an additional five
business days so long as at the time of such extension, all conditions to Sub's
obligations to purchase shares of Common Stock pursuant to the Offer are
irrevocably waived.
1.2 Company Actions. The Company hereby consents to the Offer and the
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Merger and represents that (a) its Board of Directors (at a meeting duly called
and held) has (i) determined by the unanimous vote of the Directors that each of
the Offer and the Merger is fair to, and in the best interests of, the holders
of Common Stock, (ii) approved the Offer, the Merger, this Agreement and the
Share Tender Agreements, (iii) recommended acceptance of the Offer and approval
and adoption of this Agreement by the stockholders of the Company and (iv) taken
all other action necessary to render Articles 14 and 14.1 of the Virginia Stock
Corporation Act (the "VSCA") inapplicable to the Offer and the Merger; and (b)
Xxxxxx Xxxxxxxxx Xxxxxx, a Division of First Union Capital Markets Corp.
("Xxxxxx Xxxxxxxxx Xxxxxx"), has delivered to the Board of Directors of the
Company its opinion that the consideration to be received by the holders of
Common Stock pursuant to the Offer and the Merger is fair to the holders of
Common Stock from a financial point of view, subject to the usual and customary
assumptions and qualifications contained in such opinion. The Company shall
file with the Securities and Exchange Commission (the "Commission"), as soon as
practicable on the date of the commencement of the Offer a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
containing the recommendations referred to in clause (a) of the preceding
sentence; provided, however, that such recommendations may be withdrawn,
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modified or
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amended in accordance with Section 4.7. Parent, Sub and their counsel shall be
given a reasonable opportunity to review and comment upon the Schedule 14D-9
prior to its filing with the Commission. The Company agrees to provide Parent
and its counsel with any comments the Company or its counsel may receive from
the Commission or its staff with respect to the Schedule 14D-9 promptly after
the receipt of such comments and shall provide Parent and its counsel an
opportunity to participate, including by way of discussions with the Commission
or its staff, in the response of the Company to such comments. The Schedule 14D-
9 will comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the Commission and on the date first
published, sent or given to the Company's stockholders, shall not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no representation is made by the Company with respect to information
supplied by Parent or Sub for inclusion in the Schedule 14D-9. The Company,
Parent and Sub each agrees promptly to correct any information provided by it
for use in the Schedule 14D-9 if and to the extent that it shall have become
false or misleading in any material respect and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed
with the Commission and disseminated to the Company's stockholders, in each case
as and to the extent required by applicable federal securities laws. In
connection with the Offer, the Company will promptly furnish (or cause to be
furnished) Sub with mailing labels, security position listings and any available
listing or computer list containing the names and addresses of the record
holders of the Common Stock as of the most recent practicable date and shall
furnish (or cause to be furnished) Sub with such additional information
(including, but not limited to, updated lists of holders of Common Stock and
their addresses, mailing labels and lists of security positions) and such other
assistance as Sub or its agents may reasonably request in communicating the
Offer to the Company's stockholders. Subject to the requirements of applicable
law, and except for such steps as are necessary to disseminate the Offer
Documents and any other documents necessary to consummate the Merger, Parent and
Sub and their agents shall hold in confidence the information contained in any
such labels, listings and files, will use such information only in connection
with the Offer and the Merger and, if this Agreement shall be terminated, will,
upon request, deliver, and will use their best efforts to cause their agents to
deliver, to the Company all copies of such information then in their possession
or control.
1.3 Composition of the Board of Directors. Promptly upon the acceptance
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for payment of, and payment by Sub in accordance with the Offer for, at least
70% of the outstanding shares of common Stock pursuant to the Offer (the "Offer
Closing"), Sub shall be entitled to designate such number of directors on the
Board of Directors of the Company, rounded up to the next whole number, as will
give Sub, subject to compliance with Section 14(f) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), representation on such Board of
Directors equal to at least that number of directors which equals the product of
the total number of directors on the Board of Directors (giving effect to the
directors elected pursuant to this sentence) multiplied by the percentage that
such number of shares of Common Stock so accepted for payment and paid for or
otherwise acquired or owned by Sub or Parent bears to the number of shares of
Common Stock outstanding and the Company and its Board of Directors shall, at
such time, take any and all such action needed to cause Sub's designees to be
appointed to the Company's Board of Directors (including to cause directors to
resign). At all
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times before the Effective Time, Parent, Sub and the Company shall use their
reasonable efforts to ensure that at least two members of the Company's Board of
Directors, as constituted on the date hereof, remain on the Company's Board of
Directors, except to the extent that no such individuals or their appointees
agree to serve as directors (the "Continuing Directors"). In the event that one
or more Continuing Directors resign from the Company's Board of Directors,
Parent, Sub and the Company shall permit the remaining, or in the case of the
resignation of all Continuing Directors, the resigning, Continuing Director or
Continuing Directors to appoint his or their successors in his or their
reasonable discretion. The Company shall take all action requested by Parent
which is reasonably necessary to effect any such election, including mailing to
its stockholders the Information Statement containing the information required
by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and
the Company agrees to make such mailing with the mailing of the Schedule 14D-9
so long as Sub shall have provided to the Company on a timely basis all
information required to be included in the Information Statement with respect to
Sub's designees. In furtherance thereof, the Company will increase the size of
the Company's Board of Directors, or use its reasonable efforts to secure the
resignation of directors, or both, as is necessary to permit Sub's designees to
be elected to the Company's Board of Directors. As of the Offer Closing, the
Company, if so requested by Parent or Sub, will use its reasonable efforts to
cause persons designated by Sub to constitute the same percentage of each
committee of such board, each board of directors of each subsidiary of the
Company and each committee of each such board (in each case to the extent of the
Company's ability to elect such persons).
1.4 Action by Directors. Following the election or appointment of the
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Parent's designees pursuant to Section 1.3 and prior to the Effective Time,
and, so long as there shall be at least one Continuing Director, if requested by
a majority of the Continuing Directors, such designees shall abstain from acting
upon, and the approval of a majority of the Continuing Directors shall be
required to authorize, any termination of this Agreement by the Company, any
amendment of this Agreement requiring action by the Board of Directors of the
Company, any extension of time for the performance of any of the obligations or
other acts of Parent of Sub under this Agreement and any waiver of compliance
with any of the covenants, agreements or conditions under this Agreement for the
benefit of the Company, unless no such individuals or their appointees agree to
serve as Continuing Directors.
1.5 Offer Documents, Schedule 14D-1 and Proxy/Information Statement. The
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Offer will be conducted in accordance with the applicable provisions, and rules
and regulations of the Commission, under the Exchange Act. The documents
pursuant to which the Offer will be made, including a Tender Offer Statement on
Schedule 14D-1 and Offer to Purchase and related letter of transmittal
(collectively, the "Offer Documents"), will comply in all material respects with
the Exchange Act, and the rules and regulations thereunder and any other
applicable laws. If at any time prior to the expiration or termination of the
Offer any event occurs which should be described in an amendment or supplement
thereto, Sub will file and disseminate, as required, an amendment or supplement
which complies in all material respects with the Exchange Act and the rules and
regulations thereunder and any other applicable laws. The Company and its
counsel shall be given a reasonable opportunity to review and comment upon the
Offer Documents prior to their filing with the Commission. The Company agrees
that any information supplied by the Company for inclusion in the Offer
Documents will not, at the time the Offer
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Documents are first published, sent or given to the Company's stockholders,
contain an untrue statement of a material fact or omit to state any 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. The
Company will promptly correct any information provided by it for inclusion in
the Offer Documents if and to the extent that such information becomes false or
misleading in any material respect, and Parent and Sub will take all steps
necessary to cause the Offer Documents as so corrected to be filed with the
Commission and as so corrected to be disseminated to the Company's stockholders,
in each case as and to the extent required by the Exchange Act. The information
supplied or to be supplied by Parent and Sub for inclusion in the proxy or
information statement, as applicable, to be prepared in connection with the
Merger, if required (the "Proxy/Information Statement") and the Schedule 14D-9
of the Company will not, as of the date of such Proxy/Information Statement or
Schedule 14D-9, as applicable, contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made, in light of the circumstances under which they are made, not misleading.
Parent and Sub each agrees to promptly correct any information provided by it in
the Proxy/Information Statement and the Schedule 14D-9 of the Company, as
applicable, if and to the extent that such information becomes false or
misleading in any material respect.
ARTICLE II
THE MERGER AND RELATED MATTERS
2.1 The Merger. (a) Subject to the terms and conditions of this
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Agreement, at the time of the Closing (as defined in Section 2.10 hereof),
Articles of Merger (the "Articles of Merger") shall be duly prepared, executed
and acknowledged by Sub and the Company in accordance with the VSCA and shall be
filed on the Closing Date (as defined in Section 2.10 hereof). The Merger of
Sub and the Company (the "Merger") shall become effective upon the issuance of
the Certificate of Merger by the State Corporation Commission of the
Commonwealth of Virginia in accordance with the provisions and requirements of
the VSCA. The date and time when the Merger shall become effective is
hereinafter referred to as the "Effective Time".
(b) At the Effective Time, Sub shall be merged with and into the
Company and the separate corporate existence of Sub shall cease, and the Company
shall continue as the surviving corporation under the laws of the Commonwealth
of Virginia under the name of "X'Xxxxxxxx Corporation" (the "Surviving
Corporation").
(c) From and after the Effective Time, the Merger shall have the
effects set forth in Section 13.1-721 of the VSCA.
2.2 Conversion of Stock. At the Effective Time:
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(a) Each share of Common Stock then issued and outstanding (other
than any shares of Common Stock which are held by the Company as treasury shares
or otherwise or, directly or indirectly, by Parent or any direct or indirect
subsidiary of Parent (including Sub), all
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of which shall be cancelled and none of which shall receive any payment with
respect thereto) shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into and represent the right to
receive an amount in cash, without interest, equal to the price paid for each
share of Common Stock pursuant to the Offer (the "Merger Consideration").
(b) Each share of common stock, par value $1.00 per share of Sub then
issued and outstanding shall, by virtue of the Merger and without any action on
the part of the holder thereof, become one fully paid and nonassessable share of
common stock, $1.00 par value, of the Surviving Corporation.
2.3 Surrender of Certificates. (a) Concurrently with or prior to the
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Effective Time, Parent shall designate a bank or trust company located in the
United States to act as paying agent (the "Paying Agent") for purposes of making
the cash payments contemplated hereby. As soon as practicable after the
Effective Time, Parent shall cause the Paying Agent to mail and/or make
available to each holder of a certificate theretofore evidencing shares of
Common Stock (other than those which are held by the Company as treasury shares
or otherwise or, directly or indirectly by Parent or any direct or indirect
subsidiary of Parent (including Sub)) a notice and letter of transmittal
advising such holder of the effectiveness of the Merger and the procedure for
surrendering to the Paying Agent such certificate or certificates which
immediately prior to the Effective Time represented outstanding Common Stock
(the "Certificates") in exchange for the Merger Consideration deliverable in
respect thereof pursuant to this Article II. Upon the surrender for
cancellation to the Paying Agent of such Certificates, together with a letter of
transmittal, duly executed and completed in accordance with the instructions
thereon, and any other items specified by the letter of transmittal, the Paying
Agent shall promptly pay to the Person (as defined in Section 7.13 hereof)
entitled thereto the Merger Consideration deliverable in respect thereof. Until
so surrendered, each Certificate shall be deemed, for all corporate purposes, to
evidence only the right to receive upon such surrender the Merger Consideration
deliverable in respect thereof to which such Person is entitled pursuant to this
Article II. No interest shall be paid or accrued in respect of such cash
payments.
(b) If the Merger Consideration (or any portion thereof) is to be
delivered to a Person other than the Person in whose name the Certificates
surrendered in exchange therefore are registered, it shall be a condition to the
payment of the Merger Consideration that the Certificates so surrendered shall
be properly endorsed or accompanied by appropriate stock powers and otherwise in
proper form for transfer, that such transfer otherwise be proper and that the
Person requesting such transfer pay to the Paying Agent any transfer or other
taxes payable by reason of the foregoing or establish to the satisfaction of the
Paying Agent that such taxes have been paid or are not required to be paid.
(c) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof as determined in accordance with Article II,
provided that the Person to whom the Merger Consideration is paid shall, as a
condition precedent to the payment thereof, give the Surviving Corporation a
bond in such sum as it may direct or otherwise indemnify the Surviving
Corporation in a manner satisfactory to it against
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any claim that may be made against the Surviving Corporation with respect to the
Certificate claimed to have been lost, stolen or destroyed.
2.4 Payment. Concurrently with or immediately prior to the Effective Time,
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Parent or Sub shall deposit in trust with the Paying Agent cash in United States
dollars in an aggregate amount equal to the product of (i) the number of shares
of Common Stock outstanding immediately prior to the Effective Time on a fully
diluted basis (other than shares of Common Stock which are held by the Company
as treasury shares or otherwise or, directly or indirectly by Parent or any
direct or indirect subsidiary of Parent (including Sub)) and (ii) the Merger
Consideration (such amount being hereinafter referred to as the "Payment Fund").
The Payment Fund shall be invested by the Paying Agent as directed by Parent in
direct obligations of the United States, obligations for which the full faith
and credit of the United States is pledged to provide for the payment of
principal and interest, commercial paper rated of the highest quality by Xxxxx'x
Investors Services, Inc. or Standard & Poor's Ratings Group or certificates of
deposit, bank repurchase agreements or bankers' acceptances of a commercial bank
having at least $100,000,000 in assets (collectively, "Permitted Investments")
or in money market funds which are invested in Permitted Investments, and any
net earnings with respect thereto shall be paid to Parent as and when requested
by Parent. The Paying Agent shall, pursuant to irrevocable instructions, make
the payments referred to in Section 2.2(a) hereof out of the Payment Fund. The
Payment Fund shall not be used for any other purpose except as otherwise agreed
to by Parent. Promptly following the date which is three months after the
Effective Time, the Paying Agent shall return to Parent all cash, certificates
and other instruments in its possession that constitute any portion of the
Payment Fund (other than net earnings on the Payment Fund which shall be paid to
Parent) and the Paying Agent's duties shall terminate. Thereafter, each holder
of a Certificate may surrender such Certificate to the Surviving Corporation and
(subject to applicable abandoned property, escheat and similar laws) receive in
exchange therefor the Merger Consideration, without interest, but shall have no
greater rights against the Surviving Corporation or Parent than may be accorded
to general creditors of the Surviving Corporation or Parent under applicable
law. Notwithstanding the foregoing, neither the Paying Agent nor any party
hereto shall be liable to a holder of shares of Common Stock for any Merger
Consideration delivered to a public official pursuant to applicable property,
escheat and similar laws.
2.5 No Further Rights of Transfers. At and after the Effective Time, each
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holder of a Certificate shall cease to have any rights as a stockholder of the
Company, except for, in the case of a holder of a Certificate (other than shares
to be cancelled pursuant to Section 2.2(a) hereof), the right to surrender his
or her Certificate in exchange for payment of the Merger Consideration, and no
transfer of shares of Common Stock shall be made on the stock transfer books of
the Surviving Corporation. Certificates presented to the Surviving Corporation
after the Effective Time shall be cancelled and exchanged for cash as provided
in this Article II. At the close of business on the day of the Effective Time
the stock ledger of the Company with respect to Common Stock shall be closed.
2.6 Stock Option and Other Plans. Each outstanding stock option to
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purchase Common Stock (an "Option") heretofore granted under the Company's 1995
Stock Option Plan, 1995 Outside Directors Stock Option Plan or 1985 Incentive
Stock Option Plan or any other employee, director or other stock option plan now
or formerly maintained by the Company
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(collectively, the "Option Plans"), whether or not vested or exercisable, shall
be deemed to be cancelled immediately prior to the Effective Time and shall no
longer be exercisable for the purchase of shares of Common Stock. The holder of
each Option shall receive a payment in cash (subject to any applicable
withholding taxes) at the Effective Time (the "Cash Payment") equal to the
product of (x) the total number of shares of Common Stock subject to such
Option, whether or not then vested or exercisable, and (y) the excess, if any,
of the Merger Consideration over the exercise price per share of Common Stock
subject to such Option. Prior to the Effective Time, the Board of Directors of
the Company (or, if appropriate, any committee or subcommittee thereof) shall
take such further action as may be necessary or appropriate for the cancellation
of the Options and payment of the Cash Payment. The Option Plans and 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
(collectively, with the Option Plans, referred to as the "Stock Plans") shall be
terminated by the Company effective as of the Effective Time. The Company will
take all steps to ensure that neither the Company nor any of its subsidiaries is
or will be bound by any Options or other options, warrants, rights or agreements
which would entitle any Person, other than Parent or its affiliates, to own any
capital stock of the Surviving Corporation or any of its subsidiaries or to
receive any payment in respect thereof. The Company will use its best efforts to
obtain all necessary consents to ensure that as of the Effective Time, the only
rights of the holders of Options in respect of such Options will be to receive
the Cash Payment in cancellation and settlement thereof.
2.7 Articles of Incorporation of the Surviving Corporation. Subject to
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Section 4.11(a), the articles of incorporation of Sub in effect immediately
prior to the Effective Time, shall be the articles of incorporation of the
Surviving Corporation after the consummation of the Merger until amended in
accordance with applicable law.
2.8 By-Laws of the Surviving Corporation. Subject to Section 4.11(a), the
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by-laws of Sub in effect immediately prior to the Effective Time, shall be the
by-laws of the Surviving Corporation after the consummation of the Merger until
amended in accordance with applicable law.
2.9 Directors and Officers of the Surviving Corporation. At the Effective
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Time, the directors of Sub immediately prior to the Effective Time shall be the
directors of the Surviving Corporation, until their successors are duly elected
or appointed and qualified in accordance with applicable law. At the Effective
Time, the officers of Sub immediately prior to the Effective Time shall be the
officers of the Surviving Corporation, until their successors are duly elected
or appointed and qualified in accordance with applicable law.
2.10 Closing. The closing of the Merger (the "Closing") shall take place
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at the offices of Xxxxxxxx Xxxx & Xxxxx LLP, Cleveland, Ohio, as soon as
practicable after the last of the conditions set forth in Article V hereof is
fulfilled or waived (subject to applicable law) but in no event later than the
fifth business day thereafter, or at such other time and place and on such other
date as Parent and the Company shall mutually agree (the "Closing Date").
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company hereby
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represents and warrants to Parent and Sub as follows:
(a) Due Organization, Good Standing and Corporate Power. Each of the
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Company and its subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
each such corporation has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted. Each of the Company and its subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except in such jurisdictions
where the failure to be so qualified or licensed and in good standing is not
reasonably likely to have a material adverse effect on the business, properties,
assets, liabilities, operations, results of operations, condition (financial or
otherwise) or prospects (the "Condition") of the Company and its subsidiaries
taken as a whole. The Company has made available to Parent and Sub complete and
correct copies of the Articles of Incorporation and By-Laws of the Company and
its subsidiaries, in each case as amended to the date of this Agreement.
(b) Authorization and Validity of Agreement. The Company has the
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corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement by the
Company, and the consummation by it of the transactions contemplated hereby,
have been duly authorized and approved by its Board of Directors and no other
corporate action on the part of the Company is necessary to authorize the
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby (other than the approval of
this Agreement and the Merger by the holders of at least 70% of the shares of
Common Stock). This Agreement has been duly executed and delivered by the
Company and is a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and general equitable principles.
(c) Capitalization.
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(i) The authorized capital stock of the Company consists of
30,000,000 shares of Common Stock. As of the date of this Agreement,
15,594,687 shares of Common Stock are issued and outstanding and 301,242
shares of Common Stock are reserved for issuance pursuant to outstanding
Options granted under the Stock Plans. All issued and outstanding shares of
Common Stock have been validly issued and are fully paid and nonassessable,
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and are not subject to, nor were they issued in violation of, any
preemptive rights. Except as set forth in this Section 3.1(c) or on
Schedule 3.1(c) (i) of the disclosure letter to this Agreement (the
"Disclosure Letter"), (i) there are no shares of capital stock of the
Company authorized, issued or outstanding and (ii) there are not as of the
date hereof, and at the Effective Time there will not be, any outstanding
or authorized options, warrants, rights, subscriptions claims of any
character, agreements, obligations, convertible or exchangeable securities,
or other commitments, contingent or otherwise, relating to Common Stock or
any other shares of capital stock of the Company, pursuant to which the
Company is or may become obligated to issue shares of Common Stock, any
other shares of its capital stock or any securities convertible into,
exchangeable for, or evidencing the right to subscribe for, any shares of
the capital stock of the Company. The Company has no authorized or
outstanding bonds, debentures, notes or other indebtedness with respect to
which the holders thereof have the right to vote (or convertible or
exchangeable into or exercisable for securities having the right to vote)
with the stockholders of the Company or any of it subsidiaries on any
matter ("Voting Debt"). As of the Effective Time, the Surviving Corporation
will have no obligation to issue, transfer or sell any shares of Common
Stock of the Surviving Corporation pursuant to any Employee Plan (as
hereinafter defined) or otherwise. Schedule 3.1(c)(i) of the Disclosure
Letter lists, as of the date of this Agreement, the number of shares of
Common Stock subject to, and the exercise price of, each outstanding
Option. The Company has made available to Parent and Sub complete and
correct copies of the Stock Plans and the forms of option agreement used
with respect to each Option Plan.
(ii) Schedule 3.1 (c) (ii) of the Disclosure Letter lists all
of the Company's subsidiaries. All of the outstanding shares of capital
stock of each of the Company's subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable, are not subject to, nor
were they issued in violation of, any preemptive rights, and are owned, of
record and beneficially, by the Company, free and clear of all liens,
claims, security interests, charges, encumbrances, options or claims
whatsoever ("Encumbrances"). No shares of capital stock of any of the
Company's subsidiaries are reserved for issuance and there are no
outstanding or authorized options, warrants, rights, subscriptions, claims
of any character, agreements, obligations, convertible or exchangeable
securities, or other commitments, contingent or otherwise, relating to the
capital stock of any subsidiary of the Company, pursuant to which such
subsidiary is or may become obligated to issue any shares of capital stock
of such subsidiary or any securities convertible into, exchangeable for, or
evidencing the right to subscribe for, any shares of such subsidiary.
Except for the subsidiaries listed on Schedule 3.1(c)(ii) of the Disclosure
Letter, the Company does not own, directly or indirectly, any capital stock
or other equity interest in any Person or have any direct or indirect
equity or ownership interest in any Person and neither the Company nor any
of its subsidiaries is subject to any obligation or requirement to provide
funds for or to make any investment (in the form of a loan, capital
10
contribution or otherwise) to or in any Person. The Company's subsidiaries
have no Voting Debt.
(d) Consents and Approvals; No Violations. Except as disclosed in
-------------------------------------
Schedule 3.1(d) of the Disclosure Letter and assuming (i) the filings required
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), are made and the waiting period thereunder has been terminated or
has expired, (ii) the requirements of the Exchange Act relating to the
Proxy/Information Statement and the Offer are met, (iii) the filing of the
Articles of Merger and other appropriate merger documents, if any, as required
by the VSCA, is made and (iv) approval of this Agreement and the Merger by the
holders of at least 70% of the outstanding shares of Common Stock is obtained,
the execution and delivery of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby will not: (1) violate any
provision of the articles of incorporation or by-laws of the Company or any of
its subsidiaries, each as amended; (2) violate any statute, ordinance, rule,
regulation, order or decree of any court or of any governmental or regulatory
body, agency or authority applicable to the Company or any of its subsidiaries
or by which any of their respective properties or assets may be bound; (3)
require any filing with, or permit, consent or approval of, or the giving of any
notice to, any governmental or regulatory body, agency or authority; or (4)
result in a violation or breach of, conflict with, constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, or result in the creation of
any Encumbrance upon any of the properties or assets of the Company or any of
its subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, franchise, permit, agreement, lease,
franchise agreement or other instrument or obligation to which the Company or
any of its subsidiaries is a party, or by which it or any of their respective
properties or assets may be bound except, in the case of clauses (2), (3) and
(4) above, for any such filing, permit, consent, approval or violation, which is
not reasonably likely to have a material adverse effect on the Condition of the
Company and its subsidiaries, taken as a whole, and is not reasonably likely to
prevent or materially delay consummation of the transactions contemplated by
this Agreement.
(e) Company Reports and Financial Statements.
----------------------------------------
(i) Since January 1, 1998, the Company has filed all material
forms, reports, statements and other documents required to be filed by it
with the Commission, including without limitation (a) all Annual Reports on
Form 10-K, (b) all Quarterly Reports on Form 10-Q, (c) all proxy statements
relating to meetings of stockholders (whether annual or special), (d) all
Current Reports on Form 8-K and (e) all other reports, schedules,
registration statements and other documents required to be filed with the
Commission. All of the documents filed by the Company with the Commission
during such period, including all exhibits contained or incorporated by
reference in such documents, are collectively referred to as the
"Commission Filings." The Commission Filings, as amended to date, (i) were
prepared in all material respects in accordance with the requirements of
the Securities Act of 1933, as amended, or the Exchange Act, as the case
may be, and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to
be stated
11
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. The
Company has, prior to the date of this Agreement, made available to Parent
true and complete copies of all Commission Filings.
(ii) Each of the consolidated balance sheets of the Company
and its consolidated subsidiaries as of the end of the fiscal years ended
December 31, 1998 and 1997 and the consolidated statements of operations,
consolidated statement of stockholders' equity and consolidated statements
of cash flows for the fiscal years ended December 31, 1998 and 1997
included in the Commission Filings, were prepared in accordance with
generally accepted accounting principles (as in effect when prepared)
applied on a consistent basis (except as may be indicated therein or in the
notes or schedules thereto) 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 results of operations and
changes in financial position for the periods then ended.
(f) Absence of Certain Changes.
--------------------------
(i) Except as previously disclosed in the Commission Filings
or as otherwise disclosed in Schedule 3.1(f) or Schedule 3.1(k) of the
Disclosure Letter or as otherwise contemplated by this Agreement, since
December 31, 1998 (i) there has not been any material adverse change in the
Condition of the Company and its subsidiaries taken as a whole; (ii) the
businesses of the Company and each of its subsidiaries have been conducted
only in the ordinary course, the Company and its subsidiaries have not
engaged in any material transaction or entered into any material agreement
outside of the ordinary course of business and, to the knowledge of the
Company, neither the Company nor any of its subsidiaries has incurred any
material liabilities (direct, contingent or otherwise) ; (iii) there has
been no declaration, setting aside or payment of any dividend or other
distribution with respect to the Common Stock or any other capital stock of
the Company (except for regular quarterly dividends) or any repurchase,
redemption or other acquisition by the Company of any shares of Common
Stock or other capital stock of the Company; (iv) there has not been any
material amendment of any term of any outstanding security of the Company;
and (v) there has not been any change in any method of accounting or
accounting practice by the Company, except for any such change required
because of a concurrent change in generally accepted accounting principles.
(ii) Furthermore, except as disclosed in Schedule 3.1(f) of
the Disclosure Letter, since December 31, 1998, there has not been any (a)
grant of any severance or termination pay or stay-in-place bonus to any
director or officer of the Company or any of its subsidiaries, (b) entering
into of any employment, deferred compensation or other similar agreement
(or any material amendment to any such existing agreement) with any
director or officer of the Company or any of its subsidiaries, (c) increase
in benefits payable under any existing severance or
12
termination pay or stay-in-place bonus policies or agreements
with any director or officer of the Company or any of its
subsidiaries, except as provided under any Employee Plan,
contract, agreement or arrangement, or (d) increase in
compensation, bonus or other benefits payable to any director or
officer of the Company or any of its subsidiaries, except for
normal annual adjustments that are not unusual in nature or
amount or except as provided under any Employee Plan, contract,
agreement or arrangement listed in the Disclosure Letter.
(g) Permits; Compliance. Except as is disclosed in Schedule 3.1(g)
-------------------
of the Disclosure Letter, the Company is in possession of all franchises,
grants, authorizations, licenses, permits, easements, variances, exemptions,
consents, certificates, approvals and orders necessary to own, lease and operate
its properties and to carry on its business in substantially the manner as now
being conducted, other than those of which the failure of the Company to be in
possession is not reasonably likely to have a material adverse effect on the
Condition of the Company and its subsidiaries taken as a whole (collectively,
the "Company Permits"). Except as set forth in Schedule 3.1(g) of the Disclosure
Letter, the Company is not in conflict with, or in default or violation of, (a)
any federal, state or foreign law applicable to the Company or by which any of
its properties are bound or subject or (b) any of the Company Permits, other
than conflicts, defaults or violations that are not reasonably likely to have a
material adverse effect on the Condition of the Company and its subsidiaries
taken as a whole. Except as set forth in Schedule 3.1(g) of the Disclosure
Letter, since January 1, 1999, the Company has not received any notification
with respect to possible material conflicts, defaults or violations of any
federal, state, local or foreign law applicable to the Company or by which any
of its properties are bound or subject that have not been cured without any
further material liability or obligation.
(h) Litigation. Except as disclosed in the Commission Filings or
----------
in Schedule 3.1(h) of the Disclosure Letter, there is no action, suit,
proceeding at law or in equity, or any arbitration or any administrative or
other proceeding by or before (or to the best knowledge of the Company any
investigation by) any governmental or other instrumentality or agency, pending,
or, to the best knowledge of the Company, threatened, against or affecting the
Company or any of its subsidiaries, or any of their properties or rights which,
individually or in the aggregate, is reasonably likely to have a material
adverse effect on the Condition of the Company and its subsidiaries taken as a
whole. Except as disclosed in the Commission Filings or in Schedule 3.1(h) of
the Disclosure Letter, neither the Company nor any of its subsidiaries is
subject to any judgment, order or decree entered in any lawsuit or proceeding
which could have a material adverse effect on the Condition of the Company and
its subsidiaries taken as a whole or on the ability of the Company or any
subsidiary to conduct its business as presently conducted or are reasonably
likely to prevent or delay consummation of the Offer or the Merger.
(i) Employee Benefit Plans.
----------------------
(i) Schedule 3.1(i) of the Disclosure Letter lists all
"employee benefit plans" within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations thereunder ("ERISA"), including,
without limitation, all retirement, savings and other pension
plans, all health, severance, insurance, disability and other
13
employee welfare plans and all incentive, vacation, accrued leave, sick
pay, sick leave and other similar plans, all bonus, stock option, stock
purchase, restricted stock, incentive, profit-sharing, deferred
compensation, supplemental retirement, unemployment benefit, severance and
other employee benefit plans, programs or arrangements (whether or not
insured) and all material employment, termination, severance, stay-in-place
bonus or compensation agreements, in each case for the benefit of, or
relating to current or former employees or current or former directors of
the Company, whether or not in writing or exempt from the provisions of
ERISA, that the Company or any of its subsidiaries maintain, contribute to
or are otherwise a party to ("Employee Plans"). For purposes of all of the
representations contained in this Section 3.1 (i), the term "subsidiaries"
shall include all employers (whether or not incorporated) that are by
reason of common control treated together with the Company or any of its
subsidiaries as a single employer within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
thereunder (the "Code").
(ii) All Employee Plans have been maintained and operated in
all material respects in compliance with their terms and the requirements
prescribed by all applicable statutes, orders or governmental rules or
regulations with respect thereto, and the Company and its subsidiaries have
performed all material obligations required to be performed by them under,
and are not in any material respect in default under or in violation of,
any of the Employee Plans.
(iii) Except as set forth in Schedule 3.1(i) of the Disclosure
Letter, each Employee Plan intended to be qualified under Section 401(a) of
the Code has heretofore been determined by the Internal Revenue Service to
so qualify, and each trust created thereunder has heretofore been
determined by the Internal Revenue Service to so qualify, and each trust
created thereunder has heretofore been determined by the Internal Revenue
Service to be exempt from tax under the provisions of Section 501(a) of the
Code and, to the best knowledge of the Company and its subsidiaries,
nothing has occurred since the date of the most recent determination that
would be reasonably likely to cause any such Employee Plan or trust to fail
to qualify under Section 401(a) or 501(a) of the Code.
(iv) Neither the Company nor any of its subsidiaries have
incurred any material liability to the Pension Benefit Guaranty Corporation
("PBGC") under Section 4001 et seq. of ERISA, and no condition exists that
-- ----
could reasonably be expected to result in the Company or any of its
subsidiaries incurring material liability under Title IV of ERISA, either
singly or as a member of any trade or business, whether or not
incorporated, under common control of or affiliated with the Company,
within the meaning of Section 414(b), (c), (m) or (o) of the Code. All
premiums payable to the PBGC have been paid when due.
(v) The Company has made available to Parent copies of all
material documents in connection with each Employee Plan including, without
14
limitation (where applicable), (a) all Employee Plans as in effect on the
date hereof, together with all amendments thereto; (b) all current summary
plan descriptions, if applicable; (c) all current trust agreements,
declarations of trust and other documents establishing other funding
arrangements (and all amendments thereto and the latest financial
statements thereof); (d) the most recent Internal Revenue Service
determination letter, if applicable; (e) annual reports required to be
filed within the last year pursuant to ERISA or the Code with respect to
the Employee Plans; and (f) the most recently prepared financial
statements.
(vi) Neither the Company nor any of its subsidiaries has
engaged in any non-exempt prohibited transaction (within the meaning of
Section 4975 of the Code or Section 406 of ERISA) with respect to any
Employee Plan that would subject any of them to a material tax, penalty or
liability under ERISA or the Code.
(vii) Full payment has been made of all amounts which the
Company or any of its subsidiaries is required, under applicable law or
under any Employee Plan, to have paid as contributions thereto as of the
last day of the most recent fiscal year of such Employee Plan ended prior
to the date hereof and as of the date hereof.
(viii) There are no actions, suits or claims pending, or to the
best knowledge of the Company, threatened or anticipated (other than
routine claims for benefits) with respect to any Employee Plan.
(ix) Except as set forth on Schedule 3.1(i) of the Disclosure
Letter, no Employee Plan provides for the payment of severance or any other
benefits upon the termination of an employee's employment.
(j) Taxes. The Company has filed or caused to be filed, within the
-----
times and in the manner prescribed by law, all United Stated federal, state,
local and foreign tax returns and tax reports ("Tax Returns") which are required
to be filed by, or with respect to, and are material to, the Company or any of
its subsidiaries. Such Tax Returns reflect accurately all material liability for
taxes of the Company and its subsidiaries for the periods covered thereby. All
material federal, state, local and foreign income, profits, franchise, sales,
use, occupancy and excise taxes and other material taxes, assessments, duties,
fees, levies, imports or other governmental charges (including any interest and
penalties thereon) ("Taxes") payable by, or due from, the Company or any of its
subsidiaries have been fully paid or adequately disclosed and fully provided for
on the financial statements of the Company and its subsidiaries in accordance
with generally accepted accounting principles. No audit or other examination,
pending or, to the best knowledge of the Company, threatened litigation or
appeal of any Tax Return or Tax liability of the Company or any of its
subsidiaries is currently in progress (or to the best knowledge of the Company
scheduled to be conducted as of the date hereof). There are no outstanding
agreements or waivers extending the statutory period of limitation applicable to
any Tax Return of the Company or any of its subsidiaries. Except as provided in
Schedule 3.1(j) of
15
the Disclosure Letter, neither the Company nor any of its subsidiaries has been
included in any "consolidated", "unitary" or "combined" Tax Return provided for
under the laws of the United States, any foreign jurisdiction or any state or
locality for any taxable period for which the statute of limitations has not
expired. All material Taxes which the Company or any of its subsidiaries were
required by law to withhold in connection with amounts paid or owing to any
employee or independent contractor have been timely paid over to the proper
authorities to the extent due and payable. Except as provided in Schedule 3.1(j)
of the Disclosure Letter, there are no tax sharing, allocation, indemnification
or similar agreements in effect as between the Company or any predecessor or
affiliate thereof and any other party (including any of their predecessors or
affiliates) under which the Company or any of the Company's subsidiaries are
liable or could be liable for any Taxes or other claims of any party.
(k) Liabilities. Except as set forth in the Commission Filings or
-----------
as disclosed in Schedule 3.1(k) of the Disclosure Letter or as otherwise
contemplated by this Agreement, neither the Company nor any of its subsidiaries
has any material outstanding claims, liabilities or indebtedness, contingent or
otherwise, that would be required to be disclosed in the Company's consolidated
financial statements prepared in accordance with generally accepted accounting
principles applied on a consistent basis, other than liabilities incurred
subsequent to December 31, 1998 in the ordinary course of business. Neither the
Company nor any of its subsidiaries is in default in respect of the material
terms and conditions of any indebtedness or other agreement.
(l) Broker's or Finder's Fee. Except for Xxxxxx Xxxxxxxxx Xxxxxx
------------------------
(whose fees and expenses will be paid by the Company in accordance with the
Company's agreement with such firm, a true and correct copy of which has been
provided to Parent), no agent, broker, Person or firm acting on behalf of the
Company is, or will be, entitled to any fee, commission or broker's or finder's
fees from any of the parties hereto, or from any Person controlling, controlled
by, or under common control with any of the parties hereto, in connection with
this Agreement or any of the transactions contemplated hereby.
(m) Environmental Laws and Regulations. Except as disclosed in the
----------------------------------
Commission Filings or in Schedule 3.1(m) of the Disclosure Letter or as would
not, individually or in the aggregate, have a material adverse effect on the
Condition of the Company and its subsidiaries taken as a whole, (i) the Company
and its subsidiaries are in compliance with all Environmental Laws; (ii)
Hazardous Substances requiring remediation under any Environmental Law have not
been released or disposed of on any real property owned or operated by the
Company or any subsidiary of the Company; (iii) the Company and its subsidiaries
are not subject to liability for any notice of off-site disposal or
contamination; (iv) the Company and its subsidiaries have not received notice of
any Environmental Claims under any Environmental Law; and (v) there are no
facts, conditions, occurrences or circumstances regarding the Company, its
subsidiaries or any property owned or operated by the Company or its
subsidiaries that could reasonably be expected (a) to form the basis of any
Environmental Claim against the Company, its subsidiaries or any property owned
or operated by the Company or its subsidiaries, or (b) to cause such property to
be subject to any restrictions on the ownership, use, or transferability of any
such property under any Environmental Law. "Environmental Law" means any
applicable law, regulation, order or decree relating to Hazardous Substances or
the protection of human health or the environment. "Hazardous Substance" means
any hazardous or
16
toxic material, substance, waste, pollutant or contaminant as defined under any
Environmental Law, in any concentration, including, without limitation, any
petroleum or petroleum products, friable asbestos or polychlorinated biphenyls.
"Environmental Claims" means any and all administrative, regulatory or judicial
actions, suits, demand letters, claims, liens, notices of noncompliance or
violation of, investigations or proceedings relating in any way to any
Environmental Law (hereinafter "claims"), including without limitation, (i) any
and all Claims by governmental or regulatory authorities for enforcement, clean-
up, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Substances or arising from alleged
injury or threat of injury to human health, safety or the environment.
(n) State Takeover Statutes; No Stockholder Rights Plan. The Board
---------------------------------------------------
of Directors of the Company has approved the Offer, the Merger, this Agreement
and the Share Tender Agreements and such approval is sufficient to render
inapplicable to the Offer, the Merger, this Agreement and the Share Tender
Agreements the provisions of Articles 14 and 14.1 of the VSCA. The Company does
not have a stockholder rights plan or "poison pill," but the Company's Amended
and Restated Articles of Incorporation, as amended, contain a provision (which
the Company does not believe constitutes such a plan or "poison pill") requiring
a super-majority stockholder vote to approve certain matters such as the Merger.
(o) Opinion of Financial Advisor. The Company has received the
----------------------------
opinion of Xxxxxx Xxxxxxxxx Xxxxxx to the effect that, as of the date of this
Agreement, the consideration to be received in the Offer and the Merger by the
Company's stockholders is fair to the Company's stockholders from a financial
point of view, subject to the usual and customary assumptions and qualifications
contained in such opinion, and a complete and correct signed copy of such
opinion has been, or promptly upon receipt thereof will be, delivered to Parent.
(p) Material Contracts. Except as set forth in Schedule 3.1(p) of
------------------
the Disclosure Letter or as disclosed in the Commission Filings, neither the
Company nor any of its subsidiaries is a party to, or is bound by (a) any
material agreement, indenture or other instrument relating to the borrowing of
money by the Company or any of its subsidiaries or the guarantee by the Company
or any of its subsidiaries of any such obligation relating to the borrowing of
money or (b) any other contract or agreement or amendment thereto that (i)
should be or should have been filed as an exhibit to a Form 10-K filed by the
Company with the Commission or (ii) places any material restrictions on the
right of the Company or any of its subsidiaries to engage in any material
business activity currently conducted (collectively, the "Company Contracts").
Neither the Company nor any of its subsidiaries is in material default under any
of the Company Contracts, and, to the knowledge of the Company, there has not
occurred any event that, with the lapse of time or the giving of notice or both,
would constitute such a material default under any of the Company Contracts.
(q) Labor. Except as set forth on Schedule 3.1(q) of the
-----
Disclosure Letter, the Company is not a party to or bound by any collective
bargaining agreement respecting its employees, nor, to the knowledge of the
Company, is there existing or contemplated any threat
17
of any strike, organized walkout or other organized work stoppage or labor
organizational effort by any employees of the Company.
(r) Vote Required. The only vote of the holders of any class or
-------------
series of capital stock of the Company necessary to approve the Merger is the
affirmative vote of the holders of at least 70% of the outstanding shares of
Common Stock. There is no vote of the holders of any class or series of capital
stock of the Company necessary in order for Sub to commence and consummate the
Offer.
(s) Real and Personal Property.
--------------------------
(i) Schedule 3.1(s) of the Disclosure Letter lists all material
real property owned (the "Owned Real Property") or leased (the "Leased Real
Property") by the Company or any of its subsidiaries. Except as set forth
on Schedule 3.1(s) of the Disclosure Letter, the Company has (i) good and
valid title to all of the Owned Real Property, (ii) good and valid title to
all of the tangible personal property recorded as an asset in the
consolidated financial statements of the Company as of December 31, 1998,
and not disposed of since that date in the ordinary course of business, and
(iii) a valid and existing leasehold interest in all of the Leased Real
Property, that, in the case of each of clauses (i), (ii) and (iii) above,
is free and clear of any Encumbrance other than Permitted Encumbrances.
For purposes of this Section 3.1(s), "Permitted Encumbrances" means all (A)
Encumbrances that do not materially interfere with the use of, or
materially diminish the value of, the property subject thereto, (B) liens
for taxes not yet due and payable, (C) such Encumbrances as are shown in
title policies or surveys made available to Parent or Sub and (D) capital
lease obligations entered into in the ordinary course of business.
(ii) Except as set forth on Schedule 3.1(s) of Disclosure Letter,
the Owned Real Property and the Leased Real Property are, considering the
age of such property, in reasonably good condition, normal wear and tear
excepted, and are suitable in all material respects for their present
purposes. Except as set forth on Schedule 3.1(s) of the Disclosure Letter,
to the knowledge of the Company, none of the buildings or improvements
owned or leased by the Company or any of it subsidiaries is subject to any
material structural defect. The primary business operations currently
conducted on the owned Real Property and the Leased Real Property are not
in violation of applicable zoning laws and regulations, except for
violations that could not have a material adverse effect on the Condition
of the Company and its subsidiaries taken as a whole. To the knowledge of
the Company, the buildings and other structures located on the Owned Real
Property do not encroach on the real property of any other Person, and, to
the knowledge of the Company, no building or structure of any other Person
encroaches on any of the Owned Real Property, except for encroachments that
could not have a material adverse effect on the Condition of the Company
and its subsidiaries taken as a whole. The buildings and structures on the
Owned Real Property have direct vehicular access (or indirect vehicular
access through valid and enforceable
18
easements) to public roads and all appropriate utilities necessary for the
conduct of the business thereon as it is presently conducted. The Company
has made available to Parent all owner's policies of title insurance as to
Owned Real Property, lessee's policies of title insurance as to Leased Real
Property, and related surveys that are in its possession.
(t) Intellectual Property Rights.
----------------------------
(i) Schedule 3.1(t) of the Disclosure Letter lists each of the
following items: (i) material patents and applications therefor,
registrations of material trademarks (including service marks) and
applications therefor, and registration of material copyrights and
applications therefor that are owned by the Company or any of its
subsidiaries, (ii) unexpired material licenses relating to Intellectual
Property Rights that have been granted to or by the Company or any of its
subsidiaries, and (iii) all other material agreements of the Company or any
of its subsidiaries relating to Intellectual Property Rights. As used in
this Agreement, the term "Intellectual Property Rights" includes patents,
patent applications, trademarks, trademark applications, service marks,
service xxxx applications, copyrights, copyright applications, and
proprietary trade names, publication rights, computer programs (including
source codes and object codes), inventions, know how, trade secrets,
technology, processes and formulae.
(ii) Except as set forth in Section 3.1(t) of the Disclosure
Letter, the Company and its subsidiaries own or have the right to use all
of the material Intellectual Property Rights that are used in the conduct
of the business of the Company or its subsidiaries. Except as set forth in
Schedule 3.1(t) of the Disclosure Letter and to the knowledge of the
Company, such ownership and right to use are free and clear of all
Encumbrances and claims or rights to use of third parties. The Company has
no knowledge of any material allegations or claims that any product or
process manufactured, used, sold or under development by or for the Company
or its subsidiaries infringes on the Intellectual Property Rights of any
third party. Neither the Company nor any of its subsidiaries has knowledge
of any material challenge to the validity, ownership or right to use or
license by the Company of any of the Intellectual Property Rights owned,
used or licensed by the Company.
(u) Insurance. Schedule 3.1(u) of the Disclosure Letter lists, and
---------
the Company has made available to Parent for review, current and complete copies
of, all insurance policies, binders and surety and fidelity bonds relating to
the Company and its subsidiaries (including, without limitation, all policies or
binders of casualty, general liability and workers' compensation insurance, but
excluding the owner's and lessee's policies of title insurance referred to in
Section 3.1(s)), all of which are currently in full force and effect. To the
knowledge of the Company, all premiums and other amounts due and payable under
each such policy, binder and bond have been timely paid. To the knowledge of the
Company, neither the Company nor any of its subsidiaries is in default with
respect to any material provision contained in any such policy, binder or bond
and has not failed to give any notice of or present any material
19
claim thereunder as required under the terms of the policy. Except for claims
set forth on Schedule 3.1(u) of the Disclosure Letter, there are no material
outstanding unpaid claims under any such policy, binder or bond, and neither the
Company nor any of its subsidiaries has received any written notice of
cancellation or non-renewal of any such policy, binder or bond. Except as set
forth on Schedule 3.1(u) of the Disclosure Letter, neither the Company nor any
of its subsidiaries has received any written notice from any of its insurance
carriers that any insurance premiums paid by it will be materially increased in
the future as a result of the claims experience of the Company or such
subsidiary.
(v) Inventory. Since December 31, 1998, the inventory of the
---------
Company and its subsidiaries has been maintained in the ordinary course of
business and consistent with the past practices of the Company and its
subsidiaries.
(w) Computer Software and Databases. The Company owns or has the
-------------------------------
right to use pursuant to valid and existing licenses all of the material
computer software and databases necessary for the conduct of its business as
presently conducted ("Computer Software and Databases"). The Company has
undertaken a program to determine that the Computer Software and Databases, and
all computer hardware used by the Company and its subsidiaries, will process
dates correctly prior to, during, and after the calendar year 2000, including
but not limited to century recognition and calculations that accommodate same
century and multi-century formulas, date values, and interface values and that
reflect century changes ("Year 2000 Compliant"). The Company believes that it
has taken reasonable steps to determine that its vendors, customers and other
Persons with whom it does a material amount of business are Year 2000 Compliant.
3.2 Representations and Warranties of Parent and Sub. Each of Parent
------------------------------------------------
and Sub represents and warrants to the Company as follows:
(a) Due Organization; Good Standing and Corporate Power. Each of
---------------------------------------------------
Parent and Sub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which each is incorporated and
has the requisite corporate power and authority 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 on the Condition of Parent and its subsidiaries taken as
a whole. Parent has delivered to the Company complete and correct copies of its
certificate of incorporation and by-laws and the articles of incorporation and
by-laws of Sub, in each case as amended, to the date of this Agreement.
(b) Authorization and Validity of Agreement. Each of Parent and
---------------------------------------
Sub has full corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Parent and Sub, and the consummation by each of them of the
transactions contemplated hereby, have been duly authorized by the Boards of
Directors of Parent and Sub. No other corporate action on the part of either of
Parent or Sub is necessary to
20
authorize the execution, delivery and performance of this Agreement by each of
Parent and Sub and the consummation of the transactions contemplated hereby
(other than the approval of this Agreement by the sole stockholder of Sub, if
required by the VSCA). This Agreement has been duly executed and delivered by
each of Parent and Sub and is a valid and binding obligation of each of Parent
and Sub, enforceable against each of Parent and Sub in accordance with its
terms, except to the extent that its enforceability may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors' rights generally and general equitable principles.
(c) Consents and Approvals; No Violations. Assuming (i) the
-------------------------------------
filings required under the HSR Act are made and the waiting period thereunder
has been terminated or has expired, (ii) the requirements of the Exchange Act
relating to the Proxy/Information Statement and the Offer are met, (iii) the
filing of the Articles of Merger and other appropriate merger documents, if any,
as required by the laws of the VSCA is made and (iv) approval of the Merger by
the sole stockholder of Sub if required by the VSCA is received, the execution
and delivery of this Agreement by Parent and Sub and the consummation by Parent
and Sub of the transactions contemplated hereby will not: (1) violate any
provision of the articles of incorporation or by-laws of Parent or Sub, each as
amended; (2) violate any statute, ordinance, rule, regulation, order or decree
of any court or of any governmental or regulatory body, agency or authority
applicable to Parent or Sub or by which any of their respective properties or
assets may be bound; (3) require any filing with, or permit, consent or approval
of, or the giving of any notice to any governmental or regulatory body, agency
or authority; or (4) result in a violation or breach of, conflict with,
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, or
result in the creation of any Encumbrance upon any of the properties or assets
of the Parent, Sub or any of their subsidiaries under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, lease or other instrument or obligation to which
Parent or Sub or any of their subsidiaries is a party, or by which they or their
respective properties or assets may be bound except in the case of clauses (2),
(3) and (4) above for any such filing, permit, consent, approval or violation,
which is not reasonably likely to have a material adverse effect on the
Condition of the Parent and Sub, taken as a whole, and is not reasonably likely
to prevent or materially delay consummation of the transactions contemplated by
this Agreement.
(d) Broker's or Finder's Fee. No agent, broker, Person or firm
------------------------
acting on behalf of Parent or Sub is, or will be, entitled to any broker's or
finder's fees or similar fee or commission from any of the parties hereto, or
from any Person controlling, controlled by, or under common control with any of
the parties hereto, in connection with this Agreement or any of the transactions
contemplated hereby.
(e) Financing. Parent has sufficient funds available to purchase
---------
on a fully diluted basis all the outstanding shares of Common Stock pursuant to
the Offer and the Merger and to pay all fees and expenses related to the
transactions contemplated by this Agreement.
21
(f) Common Stock Ownership. As of the date hereof, none of Parent
----------------------
or its subsidiaries beneficially owns (within the meaning of Rule 13d-3 under
the Exchange Act) any shares of Common Stock.
(g) Interim Operations of Sub. Sub was formed solely for the
-------------------------
purpose of engaging in the transactions contemplated hereby and has not engaged
in any business activities or conducted any operations other than in connection
with the transactions contemplated hereby.
ARTICLE IV
TRANSACTIONS PRIOR TO CLOSING DATE
4.1 Access to Information Concerning Properties and Records. During the
-------------------------------------------------------
period commencing on the date hereof and ending on the Closing Date, the Company
shall, and shall cause each of its subsidiaries to, upon reasonable notice,
afford Parent and Sub, and their respective counsel, accountants, consultants
and other authorized representatives, reasonable access during normal business
hours to the employees, properties, books and records of the Company and its
subsidiaries in order that they may have the opportunity to make such
investigations as they shall reasonably request of the affairs of the Company
and its subsidiaries. The Company shall furnish as promptly as reasonably
practicable to Parent (a) a copy of each report, schedule, registration
statement and other document filed by it or its subsidiaries during such period
pursuant to the requirements of federal or state securities laws and (b) all
other information concerning its or its subsidiaries' business, properties and
personnel as Parent and Sub may reasonably request.
4.2 Confidentiality. Information obtained by Parent and Sub pursuant to
---------------
Section 4.1 hereof shall be subject to the provisions of the Confidentiality
Agreement between the Company and Parent dated December 16, 1998 (the "Parent
Confidentiality Agreement").
4.3 Conduct of the Business of the Company Pending the Closing Date. The
---------------------------------------------------------------
Company agrees that, except as permitted, required or specifically contemplated
by, or otherwise described in, this Agreement or otherwise consented to or
approved in writing in advance by Parent, during the period commencing on the
date hereof and ending on the Closing Date:
(a) The Company and each of its subsidiaries will conduct their
respective operations only according to their ordinary and usual course of
business consistent with past practice and will use their reasonable best
efforts to preserve intact their respective business organizations, keep
available the services of their officers and employees and maintain satisfactory
relationships with licensors, suppliers, distributors, clients and others having
business relationships with them;
(b) Neither the Company nor any of its subsidiaries shall (i) make
any change in or amendment to its articles of incorporation or by-laws (or
comparable governing documents); (ii) issue or sell any shares of its capital
stock (other than in connection with the exercise of Options outstanding on the
date hereof) or any of its other securities, or issue any securities convertible
into, or options, warrants or rights to purchase or subscribe to, or enter into
22
any arrangement or contract with respect to the issuance or sale of, any shares
of its capital stock or any of its other securities, or make any other changes
in its capital structure; (iii) sell or pledge or agree to sell or pledge any
stock owned by it in any of its subsidiaries; (iv) except for regular quarterly
dividends, declare, pay, set aside or make any dividend or other distribution or
payment with respect to, or split, combine, redeem or reclassify, any shares of
its capital stock; (v) enter into any contract or commitment with respect to
capital expenditures in excess of $1,000,000 or enter into any other material
contract except contracts in the ordinary course of business, it being
understood that the Company shall be permitted to make all capital expenditures
contemplated in its 1999 capital expenditure budget, (vi) release or relinquish
any material contract rights other than in the ordinary course of business;
(vii) adopt, enter into or amend in any material respect any Employee Plan or
non-employee benefit plan or program, employment agreement, severance agreement,
stay-in-place bonus agreement, license agreement or retirement agreement, or,
except in the ordinary course of business and consistent with past practice or
except as required under any Employee Plan, contract, agreement or arrangement
listed on Schedule 3.1(i) of the Disclosure Letter, pay or commit to pay any
bonus or contingent or other extraordinary compensation to any employee or
director or increase in any manner the compensation or fringe benefits payable
to any employee or director; (viii) merge, consolidate or enter into a share
exchange with any other Person, acquire a material amount of capital stock or
assets of any other Person, or sell, lease, license, mortgage, pledge or
otherwise dispose of a material amount of assets to any other Person, except for
the purchase or sale of inventory in the ordinary course of business consistent,
in all material respects, with past practice; (ix) other than in the ordinary
course of business, transfer, lease, license, guarantee, sell, mortgage, pledge,
dispose of, encumber or subject to any lien, any assets or incur or modify any
indebtedness or other liability or issue any debt securities or assume,
guarantee or endorse or otherwise as an accommodation become responsible for the
obligations of any Person; (x) agree to the settlement of any material claim or
litigation; (xi) make any material tax election or settle or comprise any
material tax liability; (xii) make any material change in its method of
accounting or (xiii) agree, in writing or otherwise, to take any of the
foregoing actions; and
(c) The Company shall not, and shall not permit any of its
subsidiaries to, (i) take any action, engage in any transaction or enter into
any agreement which would cause any of the representations or warranties set
forth in Section 3.1 hereof to be untrue as of the Closing Date or (ii) purchase
or acquire, or offer to purchase or acquire, any shares of capital stock of the
Company.
4.4 Proxy/Information Statement. If stockholder approval of the Merger is
---------------------------
required by law or the Company's Amended and Restated Articles of Incorporation
(as amended), as promptly as practicable, the Company will prepare and file a
preliminary Proxy/Information Statement with the Commission and will use its
best efforts to respond to the comments of the Commission in connection
therewith and to furnish all information required to prepare the definitive
Proxy/Information Statement (including, without limitation, financial statements
and supporting schedules and certificates and reports of independent public
accountants). Promptly after the expiration or termination of the Offer, if
required by the VSCA or the Company's Amended and Restated Articles of
Incorporation (as amended) in order to consummate the Merger, the Company will
cause the definitive Proxy/Information Statement to be mailed to the
stockholders of the Company and, if necessary, after the definitive
Proxy/Information Statement
23
shall have been so mailed, promptly circulate amended, supplemental or
supplemented proxy material and, if required in connection therewith, resolicit
proxies. The Company will not use any proxy materials in connection with the
meeting of its stockholders without Parent's prior approval, which approval
shall not be unreasonably withheld. The Proxy/Information Statement will comply
in all material respects with the provisions of applicable federal securities
laws and, on the date filed with the Commission and on the date first sent to
the Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation is
made by the Company with respect to information supplied by Parent and Sub for
inclusion in the Proxy/Information Statement.
4.5 Stockholder Approval. Promptly after the expiration or termination of
--------------------
the Offer, if required by the VSCA or the Company's Amended and Restated
Articles of Incorporation (as amended) in order to consummate the Merger, the
Company, acting through its Board of Directors shall, in accordance with
applicable law, call a special meeting of the holders of Common Stock for the
purpose of voting upon this Agreement and the Merger and the Company agrees that
this Agreement and the Merger shall be submitted at such special meeting. The
Company shall use its reasonable efforts to solicit from its stockholders
proxies, and shall take all other action necessary and advisable, to secure the
vote of stockholders required by applicable law or the Company's Amended and
Restated Articles of Incorporation (as amended) to obtain the approval for this
Agreement. Subject to Section 4.7 of this Agreement, the Company agrees that it
will include in this Proxy/Information Statement the recommendation of its Board
of Directors that holders of Common Stock approve and adopt this Agreement and
approve the Merger. Parent will cause all shares of Common Stock owned by
Parent and its subsidiaries to be voted in favor of the Merger.
4.6 Reasonable Best Efforts. Subject to the terms and conditions provided
-----------------------
herein, each of the Company, Parent and Sub shall, and the Company shall cause
each of its subsidiaries to, cooperate and use their respective reasonable best
efforts to take, or cause to be taken, all appropriate action, and to make, or
cause to be made, all filings necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, including, without limitation, their respective
reasonable best efforts to obtain, prior to the Closing Date, all licenses,
permits, consents, approvals, authorizations, qualifications and orders of
governmental authorities and parties to contracts with the Company and its
subsidiaries as are necessary for consummation of the transactions contemplated
by this Agreement and to fulfill the conditions to the Offer and the Merger.
The Company, Parent and Sub shall use their reasonable efforts to consummate the
Merger as promptly as practicable after the Offer Closing.
4.7 No Solicitation of Other Offers. (a) From the date of this Agreement
-------------------------------
until the Effective Time or the earlier termination of this Agreement in
accordance with Article VI, neither the Company nor any of its subsidiaries,
shall, directly or indirectly, take (and the Company shall not authorize or
permit its or its subsidiaries' officers, directors, employees, representatives,
consultants, investment bankers, attorneys, accountants or other agents or
affiliates, to so take) any action to (i) solicit, initiate, encourage or take
any other action to
24
facilitate the submission of any Acquisition Proposal, or (ii) participate in
any way in discussions or negotiations with, or, furnish any information
(whether public or nonpublic), to any Person (other than Parent or Sub) in
connection with an Acquisition Proposal; provided, however, that the Company may
-------- -------
take any action described in clause (ii) above, if (A) such action is taken in
connection with an unsolicited Acquisition Proposal, (B) the Board of Directors
believes in its good faith judgment (based on the advice of its financial and
legal advisors) that failing to take such action would constitute a breach of
its fiduciary duties and (C) in the case of the disclosure of nonpublic
information relating to the Company in connection with an Acquisition Proposal,
the disclosure of such information is covered by a confidentiality agreement
that provides substantially the same protection to the Company as is afforded by
the Parent Confidentiality Agreement.
In addition, neither the Board of Directors of the Company nor any
committee thereof shall withdraw or modify in a manner adverse to Parent or Sub
the approval and recommendation of the Offer and this Agreement or approve or
recommend any Acquisition Proposal, provided that the Board of Directors (or a
committee thereof) may, prior to the acceptance for payment of shares of Common
Stock pursuant to the Offer, recommend to its stockholders an unsolicited
Acquisition Proposal and in connection therewith withdraw or modify its approval
or recommendation of the Offer or the Merger if (i) the Board of Directors of
the Company has determined in its good faith judgment (based on the advice of
its financial and legal advisors) that the unsolicited Acquisition Proposal is a
Superior Proposal, and (ii) simultaneously with such withdrawal, modification or
recommendation, the Company terminates this Agreement in accordance with Section
6.1(e) and pays to Parent the break-up fee in accordance with Section 6.3. Any
actions permitted under, and taken in compliance with, this Section 4.7 shall
not be deemed a breach of any other covenant or agreement of such party
contained in this Agreement. It is understood and agreed that for all purposes
of this Section 4.7 any actions taken by the Company or its subsidiaries or
their officers, directors, employees, representatives, consultants, investment
bankers, attorneys, accountants or other agents or affiliates prior to the date
hereof in soliciting, encouraging, initiating, facilitating or participating in
any discussions relating to any Acquisition Proposal shall not be construed to
render an Acquisition Proposal received after the date hereof a solicited
Acquisition Proposal.
The Company will promptly notify Parent orally and in writing of any
Acquisition Proposal or any inquiries with respect thereto. Any such written
notification will include the identity of the Person making such inquiry or
Acquisition Proposal and a description of the material terms of such Acquisition
Proposal (or the nature of the inquiry) and will indicate whether the Company is
providing or intends to provide the Person making the Acquisition Proposal with
access to nonpublic information relating to the Company or any of its
subsidiaries. The Company will, to the extent reasonably practicable, also
promptly inform Parent of any material change in the details (including
amendments or proposed amendments) of any such request or Acquisition Proposal.
In the event that the Board of Directors of the Company determines that an
Acquisition Proposal is a Superior Proposal and desires to terminate this
Agreement pursuant to Section 6.1(e), it will give Parent written notice of its
intention to terminate this Agreement no later than three business days in
advance of any date that it intends to terminate this Agreement. During that
three business day period, Parent will have the right, by giving written notice
to the Company, to match the terms of such Superior Proposal. If Parent
25
notifies the Company within such three business day period that it agrees to
match the terms of the Superior Proposal, the Company will forthwith cease any
discussion with the Person making the Superior Proposal, and Parent and the
Company will promptly incorporate the terms of the Superior Proposal in this
Agreement. Except for such amendments, the provisions of this Agreement
(including the provisions of this Section 4.7) will remain in full force and
effect.
"Acquisition Proposal" shall mean any proposal or offer from any
Person relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of the Company or any of its subsidiaries (other
than investors in the ordinary course of business) or of over 20% of any class
of equity securities of the Company or any of its subsidiaries or any tender
offer or exchange offer that if consummated would result in any Person
beneficially owning more than 20% of any class of equity securities of the
Company or any of its subsidiaries, or any merger, consolidation, business
combination, sale of substantially all assets, recapitalization, liquidation,
dissolution or similar transaction involving the Company and taken as a whole
its subsidiaries other than the transactions contemplated by this Agreement.
"Superior Proposal" shall mean a bona fide Acquisition Proposal on terms which a
majority of the members of the Board of Directors of the Company determines in
its good faith judgment (based on the advice of its financial and legal
advisors) to be more favorable to the Company and its stockholders than the
transactions contemplated hereby.
(b) Immediately following the purchase of shares of Common Stock
pursuant to the Offer, the Company will request each Person which has heretofore
executed a confidentiality agreement in connection with its consideration of
acquiring the Company or any portion thereof other than Parent to return all
confidential information heretofore furnished to such Person by or on behalf of
the Company.
(c) Nothing contained in this Section 4.7 shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders if, in the opinion of the Board of Directors of the
Company, after consultation with counsel, failure to so disclose would be
inconsistent with its fiduciary duties to the Company's stockholders under
applicable law; provided that the Company does not, except as permitted by this
--------
Section 4.7, withdraw or modify, or propose to withdraw or modify, its position
with respect to the Offer or the Merger or approve or recommend, or propose to
approve or recommend, any Acquisition Proposal.
4.8 Notification of Certain Matters. The Company shall give prompt notice
-------------------------------
to Parent of: (a) any notice of, or other communication relating to, a material
default or event that, with notice or lapse of time or both, would become a
material default, received by the Company or any of its subsidiaries subsequent
to the date of this Agreement and prior to the Closing Date, under any material
contract to which the Company or any of its subsidiaries is a party or is
subject; (b) any material notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; (c) any action, suit, claim or proceeding commenced against
or, to the knowledge of the Company, any material threat of an action, suit,
claim or proceeding made against, or any pending investigation of the Company
that, if pending on the date of this Agreement, would have been required to be
26
disclosed in Schedule 3.1(h) of the Disclosure Letter or that relates to the
transactions contemplated by this Agreement; and (d) any material adverse change
in the Condition of the Company and its subsidiaries taken as a whole or the
occurrence of any event which is reasonably likely to result in any such change.
Each of the Company and Parent shall give prompt notice to the other party of
any notice or other communication from any third party alleging that the consent
of such third party is or may be required in connection with the transactions
contemplated by this Agreement.
4.9 HSR Act. The Company and Parent shall, within five business days from
-------
the date of this Agreement, file Notification and Report Forms under the HSR Act
with the Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") and shall use their best
efforts to respond as promptly as practicable to all inquiries received from the
FTC or the Antitrust Division for additional information or documentation.
4.10 Employee Benefits. Parent agrees that, during the period commencing at
-----------------
the Effective Time and ending on the second anniversary thereof, the employees
(and former employees) of the Company and its subsidiaries will continue to be
provided with employee benefits and benefit plans no less favorable than those
in the aggregate provided by the Company and its subsidiaries as of the
Effective Time. Parent will, and will cause the Surviving Corporation to, honor
employee (or former employee) benefit obligations and contractual rights
existing as of the Effective Time and all employment, incentive and deferred
compensation or severance agreements, plans or policies adopted by the Board of
Directors of the Company (or any committee or subcommittee thereof) prior to the
date hereof in accordance with their terms, in each case to the extent disclosed
in the Disclosure Letter. Parent will provide employees of the Company and its
subsidiaries with credit for service with the Company or any of its subsidiaries
or predecessors prior to the Effective Time for purposes of determining
eligibility to participate vesting, benefits and benefit accrual under any
employee benefit plans of Parent or its subsidiaries. Employees of the Company
and its subsidiaries shall not be subject to pre-existing condition limitations,
proof of insurability requirements, or any similar conditions or requirements
under health benefit plans maintained by Parent or its subsidiaries that would
delay commencement of an employee's participation in or limit an employee's
level of coverage under, any of the health benefit plans of Parent or its
subsidiaries. Subject to the action taken by the Board of Directors with respect
to the Salary Continuation Agreements Trust as set forth in Section 1.1.(c) and
from and after the Effective Time, the Surviving Corporation shall assume and
fully discharge, and Parent shall guarantee the performance of, all obligations
of the Company (and the Surviving Corporation) under the salary continuation
agreements listed on Appendix A of the Salary Continuation Agreements Trust or
on Schedule 3.1(i) of the Disclosure Letter (the "Salary Continuation
Agreements"). The Company, Parent and its subsidiaries (including the Surviving
Corporation) shall not amend or terminate any of the Salary Continuation
Agreements at any time, shall continue to make sufficient cash deposits into the
Salary Continuation Agreements Trust to permit the trustee to pay all premiums
required to be paid pursuant to life insurance contracts held in the Salary
Continuation Agreements Trust and shall not directly or indirectly take any
action that would in any way diminish or reduce the cash surrender value of such
life insurance contracts (including, but not limited to, borrowing against the
cash surrender value of the life insurance contracts).
27
4.11 Directors' and Officers' Insurance; Indemnification. (a) The articles
---------------------------------------------------
of incorporation and the by-laws of the Surviving Corporation shall contain the
provisions with respect to indemnification and exculpation from liability set
forth in the Company's Amended and Restated Articles of Incorporation (as
amended) and By-Laws on the date of this Agreement, which provisions shall not
be amended, repealed or otherwise modified for a period of six years from the
Effective Time in any manner that would adversely affect the rights thereunder
of individuals who on or prior to the Effective Time were directors, officers,
employees or agents of the Company, unless such modification is required by law.
(b) For six years from the Effective Time, Parent shall either (x)
maintain in effect the Company's current directors' and officers' liability
insurance covering those persons who are currently covered on the date of this
Agreement by the Company's directors' and officers' liability insurance policy
(a copy of which has been heretofore delivered to Parent) (the "Indemnified
Parties"); provided, however, that in no event shall Parent be required to
-------- -------
expend in any one year an amount in excess of 200% of the annual premiums
currently paid by the Company for such insurance which the Company represents to
be $107,000 for the twelve month period ending December 31, 1999; and, provided,
--------
further, that if the annual premiums of such insurance coverage exceed such
-------
amount, Parent shall be obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount and to give prompt written notice
of any reduction in the amount or scope of coverage resulting therefrom to the
directors and officers affected thereby; provided further, that Parent may
-------- -------
substitute for such Company policies, policies with at least the same coverage
containing terms and conditions which are no less advantageous and provided that
said substitution does not result in any gaps or lapses in coverage with respect
to matters occurring prior to the Effective Time or (y) cause the Parent's,
directors' and officers' liability insurance then in effect to cover those
persons who are covered on the date of this Agreement by the Company's
directors' and officers' liability insurance policy with respect to those
matters covered by the Company's directors' and officers' liability policy.
(c) Parent agrees, from and after the date of purchase of shares of Common
Stock pursuant to the Offer, to indemnify all Indemnified Parties to the fullest
extent permitted by applicable law with respect to all acts and omissions
arising out of such individuals' services as officers, directors, employees or
agents of the Company or any of its subsidiaries or as trustees or fiduciaries
of any plan for the benefit of employees, or otherwise on behalf of, the Company
or any of its subsidiaries, occurring prior to the Effective Time including,
without limitation, the transactions contemplated by this Agreement. Without
limitation of the foregoing, in the event any such Indemnified Party is or
becomes involved in any capacity in any action, proceeding or investigation in
connection with any matter, including without limitation, the transactions
contemplated by this Agreement, occurring prior to, and including, the Effective
Time, Parent, from and after the date of purchase of shares of Common Stock
pursuant to the Offer, will pay as incurred such Indemnified Party's legal and
other expenses (including the cost of any investigation and preparation)
incurred in connection therewith. Parent shall pay all expenses, including
attorneys' fees, that may be incurred by any Indemnified Party in enforcing this
Section 4.11 or any action involving an Indemnified Party resulting from the
transactions contemplated by this Agreement. If for any reason the
indemnification provided for in this Section 4.11 is unavailable with respect to
any Indemnified Party or insufficient to hold him or her harmless with respect
to any such loss, claim, damage or liability, then Parent shall contribute to
the
28
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect (i)
the relative economic interests of the Company and its affiliates on the one
hand and Parent on the other in connection with the Offer and the Merger to
which such loss, claim, damage or liability relates, (ii) the relative fault of
the Company and its affiliates on the one hand and Parent on the other with
respect to such loss, claim, damage or liability, and (iii) any other relevant
equitable considerations.
(d) This Section 4.11 shall survive the consummation of the Merger,
is intended to benefit the Company, Parent, the Surviving Corporation and the
Indemnified Parties, and shall be binding on all successors and assigns of
Parent and the Surviving Corporation.
4.12 Financing. Parent shall provide Sub with the funds necessary to
---------
consummate the Offer and the Merger and the transactions contemplated hereby in
accordance with the terms hereof.
4.13 Parent Guarantee. Parent hereby guarantees the performance of all of
----------------
Sub's obligations under this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO MERGER
5.1 Conditions Precedent to Obligation of Parent, Sub and the Company. The
-----------------------------------------------------------------
respective obligations of Parent and Sub, on the one hand, and the Company, on
the other hand, to effect the Merger are subject to the satisfaction or waiver
(subject to applicable law) at or prior to the Closing Date of each of the
following conditions:
(a) Approval of Company's Stockholders. To the extent required by
----------------------------------
applicable law or the Company's Amended and Restated Articles of Incorporation
(as amended), this Agreement and the Merger shall have been approved and adopted
by holders of at least 70% of the Common Stock of the Company in accordance with
applicable law (if required by applicable law) or the Company's Amended and
Restated Articles of Incorporation (as amended);
(b) HSR Act. Any waiting period (and any extension thereof) under
-------
the HSR Act applicable to the Merger shall have expired or been terminated;
(c) Injunctions. No preliminary or permanent injunction or other
-----------
shall have been issued by any court or any governmental or regulatory agency,
body or authority which prohibits the consummation of the Offer or the
Merger and the transactions contemplated by this Agreement and which is in
effect on the Closing Date; provided, however, that, in the case of a decree,
-------- -------
injunction or other order, each of the parties shall have used reasonable
efforts to prevent the entry of any such injunction or other order and to appeal
as promptly as possible any decree, injunction or other order that may be
entered;
29
(d) Payment for Common Stock. Sub shall have accepted for payment
------------------------
and paid for the shares of Common Stock tendered pursuant to the Offer; and
(e) Statutes. No statute, rule, regulation, executive order, decree
--------
or order of any kind shall have been enacted, entered, promulgated or enforced
by any court or governmental authority which prohibits the consummation of the
Offer or the Merger or has the effect of making the purchase of Common Stock
illegal.
5.2 Conditions Precedent to Obligation of the Company. The obligation of
-------------------------------------------------
the Company to effect the Merger is also subject to the satisfaction or waiver,
at or prior to the Closing Date, of the following condition:
(a) Performance by Parent and Sub. Each of the Parent and Sub shall
-----------------------------
have performed in all material respects all obligations and agreements, and
complied in all material respects with all covenants and conditions, contained
in Sections 1.3 and 2.4 of this Agreement to be performed or complied with by it
prior to the Closing Date.
ARTICLE VI
TERMINATION AND ABANDONMENT
6.1 Termination. This Agreement may be terminated and the transactions
-----------
contemplated hereby may be abandoned, at any time prior to the Effective Time,
whether before or after approval of the Merger by the Company's stockholders:
(a) by mutual written consent of the Company, on the one hand, and of
Parent and Sub, on the other hand;
(b) by either Parent, on the one hand, or the Company, on the other
hand, if any governmental or regulatory agency shall have issued an order,
decree or ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the acceptance for payment of, or payment for, shares of
Common Stock pursuant to the Offer or the Merger and such order, decree or
ruling or other action shall have become final and nonappealable;
(c) by either Parent, on the one hand, or the Company, on the other
hand, if the Effective Time shall not have occurred within six months after
commencement of the Offer unless the Effective Time shall not have occurred
because of a material breach of any representation, warranty, obligation,
covenant, agreement or condition set forth in this Agreement on the part of the
party seeking to terminate this Agreement;
(d) by Parent, on the one hand, or the Company, on the other hand, if
the Offer is terminated or expires in accordance with its terms without Sub
having purchased any Common Stock thereunder due to a failure of any of the
conditions set forth in Annex A hereto to be satisfied, unless such termination
or expiration has been caused by or results from the
30
failure of the party seeking to terminate this Agreement to perform in any
material respect any of its respective covenants or agreements contained in this
Agreement;
(e) subject to the provisions of Section 6.3, by either Parent, on
the one hand, or the Company, on the other hand, if the Board of Directors of
the Company determines that an Acquisition Proposal will result in a Superior
Proposal and the Board believes (and has been advised by counsel) that a failure
to terminate this Agreement and enter into an agreement to effect the Superior
Proposal would constitute a breach of its fiduciary duties;
(f) prior to the consummation of the Offer, by the Company, if (i)
any of the representations and warranties of Parent or Sub contained in this
Agreement were untrue or incorrect in any material respect when made or have
since become, and at the time of termination remain, incorrect in any material
respect, or (ii) Parent or Sub shall have breached or failed to comply in any
material respect with any of their respective obligations, covenants or
agreements under this Agreement, including, without limitation, their obligation
to commence the Offer within the time period required by Section 1.1 of this
Agreement; and
(g) by the Company, if Parent or Sub shall have terminated the Offer
prior to the Offer Closing, the Offer is terminated or expires without Sub
having purchased any shares of Common Stock or if Sub or Parent fails to
purchase validly tendered shares of Common Stock in violation of the terms and
conditions of the Offer or this Agreement.
6.2 Effect of Termination. In the event of the termination of this
---------------------
Agreement pursuant to Section 6.1 hereof by Parent or Sub, on the one hand, or
the Company, on the other hand, written notice thereof shall forthwith be given
to the other party or parties specifying the provision hereof pursuant to which
such termination is made, and this Agreement shall become void and have no
effect, and there shall be no liability hereunder on the part of Parent, Sub or
the Company, except that Section 4.2, 6.3, 7.1 and this Section 6.2 hereof shall
survive any termination of this Agreement. Nothing in this Section 6.2 shall
relieve any part to this Agreement of liability for breach of this Agreement.
6.3 Break-up Fee. (i) If this Agreement is terminated by the Company in
------------
accordance with Section 6.1 (e); (ii) if the Board of Directors of the Company
fails to recommend, withdraws, modifies or changes its recommendation of the
Offer or the Merger in any respect adverse to Parent or Sub, or has resolved to
do so, for any reason other than a breach by Parent or Sub in any material
respect of its representations or warranties contained in this Agreement or a
failure by Parent or Sub to perform in any material respect any of its covenants
or agreements contained in this Agreement; or (iii) if, prior to the purchase of
shares of Common Stock by Sub, the Company violates its obligations under
Section 4.7 in any material respect and thereafter the Company enters into an
agreement to effect a Superior Proposal, then the Company shall pay to Parent in
same day funds a fee of $5,000,000, in the case of clause (i), within two
business days after the termination of this Agreement, in the case of clause
(ii), within two business days after the withdrawal, modification or change of
the recommendation and, in the case of clause (iii), within two business days
after the execution of an agreement referred to in such clause. Payment of the
$5,000,000 fee by the Company shall be Parent and Sub's
31
exclusive remedy against the Company for any of the matters referred to in
clauses (i), (ii) or (iii) above.
ARTICLE VII
MISCELLANEOUS
7.1 Fees and Expenses. All costs and expenses incurred in connection with
-----------------
this Agreement and the consummation of the transactions contemplated hereby
shall be paid by the party incurring such costs and expenses.
7.2 Representations and Warranties. The respective representations and
------------------------------
warranties of the Company, on the one hand, and Parent and Sub, on the other
hand, contained herein or in any certificates or other documents delivered prior
to or at the Closing shall not be deemed waived or otherwise affected by any
investigation made by any party. Each and every such representation and warranty
shall expire with, and be terminated and extinguished by, the Closing and
thereafter none of the Company, Parent or Sub shall be under any liability
whatsoever with respect to any such representation or warranty. This Section 7.2
shall have no effect upon any other obligation, covenant or agreement of the
parties hereto, whether to be performed before or after the Effective Time.
7.3 Extension; Waiver. Subject to the provisions of Section 1.1 hereof, at
-----------------
any time prior to the Effective Time, the parties hereto, by action taken by or
on behalf of the respective Boards of Directors of the Company, Parent or Sub,
may (i) extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein by any other applicable party or
in any document, certificate or writing delivered pursuant hereto by any other
applicable party or (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of any 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.
7.4 Public Announcements. The Company, on the one hand, and Parent and
--------------------
Sub, on the other hand, agree to consult promptly with each other prior to
issuing any press release or otherwise making any public statement with respect
to the transactions contemplated hereby, and shall not issue any such press
release or make any such public statement prior to such consultation and review
by the other party of a copy of such release or statement, unless required by
applicable law. The Company will not issue any press release or make any public
statement that might constitute the commencement of the Offer without the prior
written consent of Parent.
7.5 Notices. All notices, requests, demands, waivers and other
-------
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person or
mailed, certified or registered mail with postage prepaid, or sent by telex,
telegram or telecopier, as follows:
32
(a) if to the Company to it at:
X'Xxxxxxxx Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
with a copy to:
McGuire, Woods, Battle & Xxxxxx LLP
One Xxxxx Center
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Xx., Esq.
(b) if to either Parent or Sub, to it at:
The Geon Company
Xxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxx 00000-0000
Attention: Chief Executive Officer
with a copy to:
The Geon Company
Xxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxx 00000-0000
Attention: General Counsel
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed, in which case on the third business day after the
mailing thereof, except for a notice of a change of address, which shall be
effective only upon receipt thereof.
7.6 Entire Agreement. This Agreement, the Disclosure Letter, the Parent
----------------
Confidentiality Agreement and the Annex and other documents referred to herein
or delivered pursuant hereto, collectively contain the entire understanding of
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings, oral and written, with
respect thereto.
7.7 Binding Effect; Benefit; Assignment. This Agreement shall inure to the
-----------------------------------
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interest or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties, which
consent shall not be unreasonably withheld in the case of an assignment to
another direct or indirect
33
wholly-owned subsidiary of Parent for purposes of avoiding recognition of
taxable gain or loss for federal income tax purposes by either Sub or the
Company in connection with the Merger. It is understood and agreed that any
permitted assignment will not cause Parent or Sub to be relieved of its
obligations under this Agreement and that the Surviving Corporation (whether the
Surviving Corporation is Sub or any other direct or indirect wholly-owned
subsidiary) shall have all the obligations of the Surviving Corporation
specified in this Agreement. Nothing in this Agreement, expressed or implied, is
intended to confer on any Person other than the parties hereto or their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, expect for Sections 4.10
and 4.11, which are intended to be for the benefit of the persons referred to
therein, and may be enforced by such persons.
7.8 Further Actions. Each of the parties hereto agrees that, subject to
---------------
legal obligations, it will use its reasonable best efforts to fulfill all
conditions precedent specified herein, to the extent that such conditions are
within its control, and to do all things reasonably necessary to consummate the
transactions contemplated hereby.
7.9 Headings. The descriptive headings of the several Articles and
--------
Sections of this Agreement are inserted for convenience only, do not constitute
a part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement.
7.10 Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed to be an original, and all of which together shall
be deemed to be one and the same instrument.
7.11 Applicable Law. This Agreement and the legal relations between the
--------------
parties hereto shall be governed by and construed in accordance with the laws of
the Commonwealth of Virginia, without regard to the conflict or choice of laws
rules thereof.
7.12 Severability. If any term, provision, covenant or restriction
------------
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
7.13 "Person" Defined. "Person" shall mean and include an individual, a
----------------
partnership, a joint venture, a corporation, a trust, a limited liability
company, an unincorporated organization, a group and a government or other
department or agency thereof.
34
IN WITNESS WHEREOF, each of Parent, Sub and the Company has caused this
Agreement to be executed by its respective officers thereunto duly authorized,
all as of the date first above written.
THE GEON COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President, General Counsel
and Secretary
TGC AQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman, President and Chief
Executive Officer
X'XXXXXXXX CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President and Chief Executive
Officer
35
ANNEX A
-------
to
Agreement and Plan of Merger
----------------------------
The capitalized terms used in this Annex A shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex A is
appended and "Purchaser" shall be deemed to refer to Sub.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1c under the Exchange Act, pay
for any shares of Common Stock tendered and may terminate or amend the Offer in
accordance with the Merger Agreement and may postpone the acceptance of, and
payment for, shares of Common Stock, if (i) there shall not have been validly
tendered and not withdrawn prior to the expiration of the Offer a number of
shares of Common Stock which represent at least 70% of the total voting power of
all shares of capital stock of the Company outstanding on a fully diluted basis
(the "Minimum Condition"), (ii) any applicable waiting period under the HSR Act
shall not have expired or been terminated or (iii) at any time on or after the
date of the Merger Agreement and at or before the expiration date of the Offer
(as the same may be extended from time to time) any of the following shall
occur:
(a) any court or domestic government or governmental authority or agency
shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, executive order, decree or injunction or
other order or the Antitrust Division or the Federal Trade Commission
has indicated to Parent and the Company that it may seek to obtain a
decree, injunction or other order which (i) makes illegal, materially
delays or otherwise directly or indirectly materially restrains or
prohibits the Offer or the Merger, (ii) prohibits or materially limits
the ownership or operation by Parent or Purchaser of all or any
material portion of the business or assets of the Company or compels
Parent or Purchaser to dispose of all or any material portion of the
business or assets of Parent or Purchaser or the Company, or imposes
any limitations on the ability of Parent or Purchaser to conduct its
business or own such assets, (iii) imposes limitations on the ability
of Parent or Purchaser effectively to exercise full rights of
ownership of the shares of Common Stock, including, without
limitation, the right to vote any shares of Common Stock acquired or
owned by Purchaser or Parent on all matters properly presented to the
Company's stockholders, (iv) requires divestiture by Parent or
Purchaser of any shares of Common Stock, or (v) otherwise materially
adversely affects the Condition of the Company and its subsidiaries
taken as a whole;
(b) there shall have occurred (i) any general suspension greater than 24
hours of trading in, or limitation on prices for, securities on any
national securities exchange or in the over the-counter market, (ii)
any material change in United States or any other currency exchange
rates or a suspension of, or limitation on, the markets therefor,
(iii) a declaration of a banking moratorium or any
36
suspension of payments in respect of banks in the United States, or
(iv) a declaration of war by the United States having a material
adverse effect on the Company or materially adversely affecting (or
materially delaying) the consummation of the Offer, or (v) in the case
of any of the situations described in clauses (i) through (iii)
inclusive existing at the date of commencement of the Offer, a
material acceleration or worsening thereof;
(c) all consents, registrations, approvals, permits, authorizations,
notices, reports or other filings required to be obtained or made by
the Company, Parent or Purchaser with or from any governmental or
regulatory entity in connection with the execution, delivery and
performance of the Merger Agreement, the Offer and the consummation of
the transactions contemplated by the Merger Agreement shall not have
been made or obtained and such failure could reasonably be expected to
have a material adverse effect on the Condition of the Company and its
subsidiaries taken as a whole or could be reasonably likely to prevent
or materially delay consummation of the transactions contemplated by
the Merger Agreement;
(d) any representation or warranty made by the Company in the Merger
Agreement (i) (A) was untrue or incorrect in any material respect when
made or (B) has become untrue or incorrect in any material respect and
(ii) at the time of termination or amendment remains untrue or
incorrect in any material respect;
(e) there shall have been a breach by the Company of any of its covenants
or agreements in any material respect contained in the Merger
Agreement;
(f) the Company's Board of Directors shall have withdrawn, modified or
amended in any respect adverse to Parent or Purchaser its
recommendation of the Offer or the Merger, or shall have resolved to
do so; or
(g) the Merger Agreement shall have been terminated in accordance with its
terms;
which, in the reasonable judgment of Purchaser, in any such case and regardless
of the circumstances giving rise to any such condition, would make it
inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Purchaser and may
be asserted by Purchaser, or may be waived by Purchaser, in whole or in part at
any time and from time to time in its sole discretion; provided, however, that
-------- -------
without the consent of the Company, Parent and Purchaser shall not waive the
Minimum Condition.
37
