AGREEMENT AND PLAN OF MERGER
AMONG
THE XXXXXXXXX CORPORATION,
MTA, INC.
AND
BANNER AEROSPACE, INC.
JANUARY 11, 1999
Table of Contents
Page
ARTICLE I
MERGER
1.1 The Merger...............................................................1
1.2 Filing ..................................................................2
1.3 Effective Time of the Merger.............................................2
ARTICLE II
CERTIFICATE OF INCORPORATION; BY-LAWS
2.1 Certificate of Incorporation.............................................2
2.2 By-Laws .................................................................2
2.3 Directors................................................................2
2.4 Officers.................................................................3
ARTICLE III
CONVERSION OF SHARES
3.1 Banner Common and Preferred Stock........................................3
3.2 MTA Common Stock; Xxxxxxxxx Owned Common Stock...........................6
3.3 Exchange of Shares.......................................................6
3.4 Stock Options............................................................8
3.5 Fractional Shares........................................................8
3.6 No Appraisal Rights......................................................9
3.7 Lost Certificates........................................................9
ARTICLE IV
CERTAIN EFFECTS OF THE MERGER
4.1 Effect of the Merger.....................................................9
4.2 Further Assurances......................................................10
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BANNER
5.1 Corporate Organization and Qualification................................10
5.2 Capitalization..........................................................11
Page
5.3 Authority Relative to This Agreement....................................11
5.4 Consents and Approvals; No Violation....................................12
5.5 SEC Reports; Financial Statements.......................................12
5.6 Absence of Certain Changes or Events....................................13
5.7 Undisclosed Liabilities.................................................13
5.8 Litigation..............................................................13
5.9 Registration Statement; Proxy Statement.................................14
5.10 Compliance with Applicable Laws.........................................14
5.11 Opinion of Investment Bankers...........................................15
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXX AND
MTA
6.1 Corporate Organization and Qualification................................15
6.2 Capitalization..........................................................16
6.3 Authority Relative to This Agreement....................................16
6.4 Consents and Approvals; No Violation....................................16
6.5 SEC Reports.............................................................17
6.6 Registration Statement; Proxy Statement.................................17
6.7 Undisclosed Liabilities.................................................18
6.8 Ownership of Shares.....................................................18
6.9 Interim Operations of MTA...............................................18
6.10 Compliance with Applicable Laws.........................................18
6.11 Brokers, Finders or Financial Advisors.................................19
6.12 Investigation by Xxxxxxxxx and MTA.....................................19
ARTICLE VII
STOCKHOLDERS' APPROVAL;
SEC MATTERS
7.1 Stockholders' Approval..................................................20
7.2 Registration Statement; Proxy...........................................20
ARTICLE VIII
COVENANTS AND AGREEMENTS
8.1 Additional Agreements; Cooperation......................................21
8.2 Publicity...............................................................21
8.3 No Solicitation.........................................................22
8.4 Access to Information...................................................22
8.5 Bank Consents...........................................................23
8.6 Notification of Certain Matters.........................................23
8.7 Fees and Expenses.......................................................23
8.8 Conduct of Business of Banner Pending the Merger........................24
8.9 Indemnification of Directors and Officers...............................24
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Page
ARTICLE IX
CONDITIONS TO CLOSING
9.1 Conditions to Obligations of Each Party to Effect the Merger............25
9.2 Additional Conditions to Obligations of Xxxxxxxxx.......................26
9.3 Additional Conditions to Obligations of Banner..........................27
ARTICLE X
TERMINATION
10.1 Termination by Mutual Consent..........................................28
10.2 Termination by Xxxxxxxxx, MTA or Banner................................28
10.3 Termination by Xxxxxxxxx or MTA........................................29
10.4 Termination by Banner..................................................29
10.5 Effect of Termination..................................................29
ARTICLE XI
MISCELLANEOUS
11.1 Survival of Representations and Warranties.............................30
11.2 Closing and Waiver.....................................................30
11.3 Notice 30
11.4 Counterparts...........................................................31
11.5 Interpretation.........................................................32
11.6 Variations and Amendment...............................................32
11.7 No Third Party Beneficiaries...........................................32
11.8 Governing Law..........................................................32
11.9 Entire Agreement.......................................................32
11.10 No Recourse Against Others............................................33
11.11 Validity..............................................................33
11.12 No Assignment.........................................................33
11.13 Joint and Several Liability...........................................33
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AGREEMENT AND PLAN OF MERGER, dated as of January 11, 1999, by and among
The Xxxxxxxxx Corporation, a Delaware corporation ("Xxxxxxxxx"), MTA, Inc., a
Delaware corporation and a wholly-owned subsidiary of Xxxxxxxxx ("MTA"), and
Banner Aerospace, Inc., a Delaware corporation ("Banner").
W I T N E S S E T H :
WHEREAS, the Board of Directors of MTA has approved the merger of MTA with
and into Banner (the "Merger") upon the terms and subject to the conditions set
forth herein and in accordance with the laws of the State of Delaware;
WHEREAS, the Board of Directors of Banner, based upon the unanimous
recommendation of a special committee of independent directors of Banner, has
determined that it is advisable and in the best interests of Banner's
stockholders (other than Xxxxxxxxx, MTA and their affiliates) for MTA to merge
with and into Banner upon the terms and subject to the conditions set forth
herein and in accordance with the laws of the State of Delaware;
WHEREAS, the Merger is intended to qualify for Federal income tax purposes
as a tax-free reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, Xxxxxxxxx is the sole owner of all of the outstanding common stock
of MTA and the Board of Directors of Xxxxxxxxx, in Xxxxxxxxx'x capacity as the
sole stockholder of MTA and in Xxxxxxxxx'x capacity as party to this Agreement
has approved the Merger upon the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto, intending to be
legally bound, agree as follows:
ARTICLE I
MERGER
1.1 The Merger. At the Effective Time (as hereinafter defined), MTA shall
be merged with and into Banner upon the
terms and conditions provided herein and in accordance with the Delaware General
Corporation Law (the "DGCL"). The Merger shall have the effect provided in the
DGCL. Without limiting the generality of the foregoing, (a) the separate
existence and corporate organization of MTA shall cease upon the Merger becoming
effective as herein provided and thereupon MTA and Banner shall be a single
corporation, Banner (herein sometimes called the "Surviving Corporation"); and
(b) the corporate existence of Banner, with all its purposes, powers and
objects, shall continue unaffected and unimpaired by the Merger.
1.2 Filing. As soon as practicable after fulfillment or waiver of the
conditions set forth in Sections 9.1, 9.2 and 9.3 or on such later date as may
be mutually agreed to between MTA and Banner, the parties hereto will cause to
be filed with the office of the Secretary of State of the State of Delaware, a
certificate of merger (the "Delaware Certificate of Merger"), in such form as
required by, and executed in accordance with, the relevant provisions of the
DGCL.
1.3 Effective Time of the Merger. The Merger shall be effective at the time
of the filing of the Delaware Certificate of Merger, or at such later time
specified in such Certificate of Merger, which time is herein sometimes referred
to as the "Effective Time" and the date thereof is herein sometimes referred to
as the "Effective Date."
ARTICLE II
CERTIFICATE OF INCORPORATION; BY-LAWS
2.1 Certificate of Incorporation. The Certificate of Incorporation of
Banner, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until the same shall
thereafter be amended in accordance with law.
2.2 By-Laws. The By-Laws of Banner, as in effect immediately prior to the
Effective Time, shall be the By-Laws of the Surviving Corporation until the same
shall thereafter be altered, amended or repealed in accordance with law, the
Certificate of Incorporation of the Surviving Corporation or said By-Laws.
2.3 Directors. The directors of Banner at the Effective Time shall, from
and after the Effective Time, be the
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directors of the Surviving Corporation until their successors are duly elected
or appointed and qualified or until their earlier death, resignation or removal
in accordance with the Surviving Corporation's Certificate of Incorporation and
Bylaws.
2.4 Officers. The officers of Banner at the Effective Time shall, from and
after the Effective Time, be the officers of the Surviving Corporation until
their successors are duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and Bylaws.
ARTICLE III
CONVERSION OF SHARES
3.1 Banner Common and Preferred Stock. (a) At the Effective Time, each
share of common stock, par value $1.00 per share, of Banner (the "Banner Common
Stock") issued and outstanding immediately prior to the Effective Time (except
for shares, if any (i) owned by Banner as treasury stock, (ii) owned by any
wholly owned Subsidiary of Banner, (iii) owned by Xxxxxxxxx, or its direct or
indirect subsidiaries prior to the Merger or (iv) as otherwise provided in
Section 3.2) shall, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into the right to receive such number of
validly issued, fully paid and nonassessable shares (the "Exchange Ratio") of
common stock, par value $0.10 per share, of Xxxxxxxxx (the "Xxxxxxxxx Common
Stock") as equals $11.00 (the "Price Target") divided by the average per share
closing price on the New York Stock Exchange (the "NYSE") of the Xxxxxxxxx
Common Stock for the 20 most recent trading days ending on the third trading day
prior to the Effective Date; provided that the Exchange Ratio (x) shall not be
less than 0.6452, which represents an average Xxxxxxxxx Common Stock price of
$17.05, and (y) shall not exceed 0.7885, which represents an average Xxxxxxxxx
Common Stock price of $13.95, ((x) and (y) being referred to as the "Collar").
The shares of Xxxxxxxxx Common Stock to be delivered in exchange for shares of
Banner Common Stock pursuant to this Section 3.1(a) are hereinafter sometimes
called the "Merger Consideration."
The Merger Consideration set forth above assumes that the value of Banner's
holdings of AlliedSignal Inc.'s common stock (the "Allied Stock"), consisting of
1,642,789 shares of
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Allied Stock (the "Allied Investment"), which excludes Allied Stock owned by
Banner subject to hedging arrangements, is between $65,333,719 (the "Allied
Floor Value") and $79,855,773 (the "Allied Ceiling Value").
In the event the Allied Investment is less than the Allied Floor Value at
the close of the third trading day prior to the Effective Date, the Price Target
shall be decreased as follows:
(i) the gross amount of the adjustment shall be calculated by
subtracting the value of the Allied Investment from the Allied Floor Value
and by multiplying such amount by 0.6;
(ii) the resulting amount shall be divided by the number of all
outstanding shares of Banner Common Stock (including shares of Banner
Common Stock owned by Xxxxxxxxx and its direct or indirect subsidiaries and
such shares deemed to exist as a result of the mandatory conversion of
Banner preferred stock set forth in clause (b) of this Section 3.1); and
(iii) the per share dollar amount derived from the foregoing steps
shall then be subtracted from the Price Target.
In the event the Allied Investment is greater than the Allied Ceiling Value
at the close of the third trading day prior to the Effective Date, the Price
Target shall be increased as follows:
(i) the gross amount of the adjustment shall be calculated by
subtracting the Allied Ceiling Value from the value of the Allied
Investment and by multiplying such amount by 0.6;
(ii) the resulting amount shall be divided by all outstanding shares
of Banner Common Stock (including shares of Banner Common Stock owned by
Xxxxxxxxx and its direct or indirect subsidiaries and such shares deemed to
exist as a result of the mandatory conversion of Banner preferred stock set
forth in clause (b) of this Section 3.1); and
(iii) the per share dollar amount derived from the foregoing steps
shall then be added to the Price Target.
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For the purposes of the foregoing, the value of the Allied Investment shall
be calculated by adding: (i) the sum of the total number of shares of Allied
Stock owned by Banner and its direct or indirect subsidiaries at the close of
the third trading day preceding the Effective Date multiplied by the average per
share closing price on the NYSE of Allied Stock for the 20 most recent trading
days ending on the third trading day prior to the Effective Date, and (ii) the
net pre-tax cash proceeds, if any, received by Banner from the sale or other
disposition of any Allied Stock owned or to be received by Banner from the date
hereof through the close of the third trading day prior to the Effective Date.
(b) Immediately prior to the Effective Time, in accordance with Sections
5.1(c), 5.2(b) and 5.3 of the Certificate of Designations, Preferences, Rights
and Limitations of the Banner Preferred, each share of Series A Convertible
Paid-In-Kind preferred stock, par value $.01 per share and liquidation value
$9.20 per share, of Banner (the "Banner Preferred") issued and outstanding
(except for shares, if any, owned by Banner as treasury stock or owned by any
wholly owned Subsidiary of Banner) shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted into one (1) share of
Banner Common Stock. The conversion of Banner Preferred is pursuant to the
provisions of Section 5.1(c) of the Certificate of Designation governing the
Banner Preferred, whereby shares of Banner Preferred shall be deemed to convert
to Banner Common Stock (the "Accelerated Mandatory Conversion"). At the
Effective Time, the shares of Banner Common Stock deemed held as a result of the
Accelerated Mandatory Conversion shall be converted into the right to receive
the Merger Consideration as set forth in Section 3.1(a), above.
(c) At the Effective Time all outstanding shares of Banner Common Stock, by
virtue of the Merger and without any action on the part of the holders thereof,
shall no longer be outstanding and shall be cancelled and retired and shall
cease to exist, and each holder of a certificate representing any such shares of
Banner Common Stock shall thereafter cease to have any rights with respect to
such shares of Banner Common Stock, except the right to receive the Merger
Consideration for such shares of Banner Common Stock specified in the foregoing
clause (a) of this Section 3.1 upon the surrender of such certificate in
accordance with Section 3.3.
(d) Immediately following the Accelerated Mandatory Conversion of shares of
Banner Preferred, by virtue of the Accelerated Mandatory Conversion and without
any action on the
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part of the holders thereof, the rights of the holders of any converted shares
of Banner Preferred, including without limitation, the right to receive
dividends on the next dividend payment date, shall cease and the persons
entitled to receive Banner Common Stock upon the Accelerated Mandatory
Conversion shall be treated for all purposes as having become the owners of such
shares of Banner Common Stock. At the Effective Time, such shares of Banner
Common Stock shall cease to exist (as set forth in clause (c), above) and each
holder of a certificate formerly representing any shares of Banner Preferred
shall thereafter cease to have any rights with respect to such shares of Banner
Common Stock as they are deemed to hold, except the right to receive the Merger
Consideration for such shares of Banner Common Stock specified in the foregoing
clause (a) upon the surrender of such former Banner Preferred certificate in
accordance with Section 3.3.
3.2 MTA Common Stock; Xxxxxxxxx Owned Stock. (a) At the Effective Time,
each share of common stock, par value $1.00 per share, of MTA ("MTA Common
Stock") issued and outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into one validly issued, fully paid and nonassessable share of
common stock, par value $1.00 per share, of the Surviving Corporation
("Surviving Corporation Common Stock").
(b) At the Effective Time, all outstanding shares of Banner Common Stock
owned by Xxxxxxxxx or MTA or any subsidiary thereof, by virtue of the Merger and
without any action on the part of the holders thereof, shall remain outstanding
and without any conversion thereof and no payment shall be made with respect
thereto.
3.3 Exchange of Shares. (a) Xxxxxxxxx shall designate a bank, trust company
or transfer agent (as defined in the rules and regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) reasonably satisfactory
to Banner to act as the Exchange Agent (the "Exchange Agent").
(b) As promptly as practicable, but in no event later than three business
days, after the Effective Time, Xxxxxxxxx shall cause the Exchange Agent to mail
to each record holder, as of the Effective Time, of an outstanding certificate
or certificates that immediately prior to the Effective Time represented shares
of Banner Common Stock or Banner Preferred, as the case may be (collectively,
the "Certificates") a form letter of transmittal (which shall specify that
delivery shall
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be effected, and risk of loss and title to the Certificates shall pass, only
upon proper delivery of the Certificates to the Exchange Agent) and instructions
for use in effecting the surrender of the Certificates for exchange.
(c) Upon surrender to the Exchange Agent of a Certificate, together with
such letter of transmittal duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor that number of shares of Xxxxxxxxx
Common Stock that such holder has the right to receive under this Article III,
and such Certificate shall forthwith be cancelled. If any shares of Xxxxxxxxx
Common Stock are to be issued to a person other than the person in whose name
the surrendered Certificate is registered, it shall be a condition of exchange
that such surrendered Certificate shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such exchange shall pay
any transfer or other taxes required by reason of the exchange by a person other
than the registered holder of the Certificate surrendered or such person shall
establish to the satisfaction of Xxxxxxxxx that such tax has been paid or is not
applicable. Until surrendered in accordance with the provisions of this Section
3.3, each Certificate shall represent, for all purposes, the right to receive
the Merger Consideration in respect of the number of shares of Banner Common
Stock evidenced by such Certificate (or, in the case of Banner Preferred, deemed
to be evidenced by such Certificate). No dividends or other distributions that
are declared after the Effective Time on shares of Xxxxxxxxx Common Stock and
payable to the holders of record thereof after the Effective Time will be paid
to holders of Certificates until such holders surrender their Certificates. Upon
such surrender, Xxxxxxxxx shall deposit with the Exchange Agent and shall cause
the Exchange Agent to pay to the record holders of the shares of Xxxxxxxxx
Common Stock representing Merger Consideration, the dividends or other
distributions, excluding interest, that became payable after the Effective Time
and were not paid because of the delay in surrendering Certificates for
exchange.
(d) From and after the Effective Time, there shall be no transfers on the
stock transfer books of Banner of the shares of Banner Common Stock (including
deemed Banner Common Stock resulting from the Accelerated Mandatory Conversion
of Banner Preferred) that were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented to Xxxxxxxxx or
the Surviving Corporation, they shall be cancelled and exchanged as provided in
this Article III.
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(e) None of Banner, Xxxxxxxxx or the Surviving Corporation shall be liable
to any holder of Certificates with respect to any Merger Consideration delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
3.4 Stock Options. (a) As of the Effective Time, by virtue of the Merger
and without any action on the part of holders thereof, each option (an "Option")
which has been granted under the 1990 Non-Qualified and Incentive Stock Option
Plan, as amended, of Banner or the 1996 Non-Employee Director Stock Option Plan
of Banner or the Stock Award Agreement for Phillipe Hercot dated September 13,
1996 (collectively, the "Option Plans") and is outstanding at the Effective
Time, whether or not then exercisable, shall be assumed by Xxxxxxxxx and shall
be deemed to constitute an option to acquire Xxxxxxxxx Common Stock on the terms
and conditions as were applicable under the respective Option, except that (i)
each Option shall be exercisable for the greatest number of whole shares of
Xxxxxxxxx Common Stock equal to the product of the number of shares of Banner
Common Stock subject to such Option immediately prior to the Effective Time
multiplied by the Exchange Ratio; (ii) the exercise price per share of Xxxxxxxxx
Common Stock shall be an amount equal to the exercise price per share of Banner
Common Stock specified under such Option in effect immediately prior to the
Effective Time divided by the Exchange Ratio (rounded up to the nearest whole
cent) and (iii) each Option to the extent not then exercisable, shall become
exercisable in full at the Effective Time. As soon as practicable after the
Effective Time, Xxxxxxxxx shall deliver to each holder of an Option an
appropriate notice setting forth the holder's right to acquire shares of
Xxxxxxxxx Common Stock, and the Option Agreements of each holder shall be deemed
to be appropriately amended so that the Options shall represent the rights set
forth above.
(b) Xxxxxxxxx shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Xxxxxxxxx Common Stock for delivery
upon exercise of the Options assumed in accordance with Section 3.4(a) and to
cause such shares to be registered under the Securities Act of 1933, as amended
(the "Securities Act"), and to be listed on the NYSE.
3.5 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of shares of Banner Common Stock or Banner Preferred who
upon surrender of Certificates would be entitled to receive fractional shares of
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Xxxxxxxxx Common Stock shall not be entitled to receive dividends on or vote
such fractional shares of Xxxxxxxxx Common Stock and shall receive, in lieu of
such fractional shares of Xxxxxxxxx Common Stock, cash in an amount equal to
such fraction multiplied by the Market Value. "Market Value" shall mean the mean
between the high and low prices of Xxxxxxxxx Common Stock as reported on the
NYSE on the trading day immediately following the Effective Time. All references
in this Agreement to Xxxxxxxxx Common Stock to be issued as Merger Consideration
shall be deemed to include any cash in lieu of fractional shares of Xxxxxxxxx
Common Stock payable pursuant to this Section 3.5.
3.6 No Appraisal Rights. In accordance with Section 262(b) of the DGCL, no
holder of shares of Banner Common Stock or Banner Preferred shall be entitled to
appraisal rights.
3.7 Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Exchange Agent, the posting by such person of a bond in such reasonable amount
as Xxxxxxxxx may direct as indemnity against any claim that may be made against
it with respect to such Certificate, Xxxxxxxxx will issue, in exchange for such
lost, stolen or destroyed Certificate, Xxxxxxxxx Common Stock and any cash in
lieu of fractional shares, and any unpaid dividends and distributions on shares
of Xxxxxxxxx Common Stock deliverable in respect thereof pursuant to this
Agreement.
ARTICLE IV
CERTAIN EFFECTS OF THE MERGER
4.1 Effect of the Merger. On and after the Effective Time and pursuant to
the DGCL, the Surviving Corporation shall possess all the rights, privileges,
immunities, powers, and purposes of each of MTA and Banner; all the property,
real and personal, including subscriptions to shares, causes of action and every
other asset (including books and records) of MTA and Banner, shall vest in the
Surviving Corporation without further act or deed; and the Surviving Corporation
shall assume and be liable for all the liabilities, obligations and penalties of
MTA and Banner; provided, however, that this shall in no way impair or affect
the indemnification obligations of any
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party pursuant to the indemnification provisions of this Agreement or under any
agreements or arrangements with present or former directors and officers of
Banner. No liability or obligation due or to become due and no claim or demand
for any cause existing against either MTA or Banner, or any stockholder, officer
or director thereof, shall be released or impaired by the Merger, and no action
or proceeding, whether civil or criminal, then pending by or against MTA or
Banner, or any stockholder, officer or director thereof, shall xxxxx or be
discontinued by the Merger, but may be enforced, prosecuted, settled or
compromised as if the Merger had not occurred, and the Surviving Corporation may
be substituted in any such action or proceeding in place of MTA or Banner.
4.2 Further Assurances. If at any time after the Effective Time, any
further action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full right, title and
possession to all assets, property, rights, privileges, powers and franchises of
either of MTA or Banner, the officers of such corporation are fully authorized
in the name of their corporation or otherwise to take, and shall take, all such
further action.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF banner
Banner hereby represents and warrants to Xxxxxxxxx and MTA that:
5.1 Corporate Organization and Qualification. Each of Banner and its
subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (ii) is
qualified and in good standing as a foreign corporation in each jurisdiction
where the properties owned, leased or operated, or the business conducted, by it
require such qualification and (iii) has all requisite power and authority to
own its properties and to carry on its business as it is now being conducted,
except where failure to so qualify, be in good standing or have such power and
authority would not, individually or in the aggregate, result in an adverse
effect (other than any change resulting from or arising out of the transactions
contemplated by this Agreement or the announcement thereof) on the financial
condition, business or properties of Banner and its subsidiaries, material to
Banner and its subsidiar-
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ies as a whole (a "Banner Material Adverse Effect").
5.2 Capitalization. The authorized capital stock of Banner consists of (i)
50,000,000 shares of Banner Common Stock, of which, as of January 11, 1999,
23,764,262 shares were issued and 21,517,295 shares were outstanding, and (ii)
10,000,000 shares of Banner Preferred, of which, as of January 11, 1999,
4,100,279 shares were issued and 3,493,457 shares were outstanding. All of the
outstanding shares have been duly authorized and validly issued and are fully
paid and nonassessable. As of January 11, 1999, options to acquire 1,131,300
shares of Banner Common Stock were reserved for issuance upon exercise of
outstanding Options pursuant to the Option Plans. Except as set forth above, as
otherwise known to Xxxxxxxxx or MTA, and except for vested options to acquire
shares pursuant to the Option Plans, there are not as of the date hereof any
outstanding or authorized options, warrants, calls, rights (including preemptive
rights), commitments or any other agreements of any character to which Banner is
a party, or by which it may be bound, requiring it to issue, transfer, sell,
purchase, redeem or acquire any shares of capital stock or any securities or
rights convertible into, exchangeable for, or evidencing the right to subscribe
for, any shares of capital stock of Banner.
5.3 Authority Relative to This Agreement. Banner has the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. This Agreement and the
consummation by Banner of the transactions contemplated hereby have been duly
and validly authorized by the Board of Directors of Banner, based upon the
unanimous recommendation of a special committee of independent directors of
Banner (the "Special Committee"), and no other corporate proceedings on the part
of Banner are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby (other than the approval of this Agreement and
the Merger by the Stockholders of Banner in accordance with Section 251 of the
DGCL, Banner's Certificate of Incorporation and Section 8.1(a) hereof). This
Agreement has been duly and validly executed and delivered by Banner and,
assuming this Agreement constitutes the valid and binding agreement of Xxxxxxxxx
and MTA and that the aforementioned approval of the stockholders of Banner is
obtained, constitutes the valid and binding agreement of Banner, enforceable
against Banner in accordance with its terms, except that the enforcement hereof
may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relat-
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ing to creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
5.4 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Banner nor the consummation by Banner of the
transactions contemplated hereby will (a) conflict with or result in any breach
of any provision of the Certificate of Incorporation or Bylaws of Banner; (b)
require of Banner or its subsidiaries any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or regulatory
authority, except (i) pursuant to the applicable requirements of the Exchange
Act and the rules and regulations promulgated thereunder, (ii) the filing of the
Certificate of Merger pursuant to the DGCL, (iii) pursuant to state blue sky
takeover statutes, (iv) pursuant to NYSE delisting requirements or (v) where the
failure to obtain such consent, approval, authorization or permit, or to make
such filing or notification, would not, individually or in the aggregate, have a
Banner Material Adverse Effect; (c) except as set forth on Schedule 5.4 attached
hereto and made a part hereof, result in a violation or breach of, or constitute
a default under any of the terms, conditions or provisions of any note, license,
agreement or other instrument or obligation by which Banner or any of its
subsidiaries may be bound, except for such violations, breaches and defaults as
to which requisite waivers or consents have been obtained or which would not,
individually or in the aggregate, have a Banner Material Adverse Effect; or (d)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Banner or any of its subsidiaries, except for violations which
would not, individually or in the aggregate, have a Banner Material Adverse
Effect.
5.5 SEC Reports; Financial Statements. (a) Since January 1, 1996, Banner
has filed all periodic reports required to be filed by it with the Securities
and Exchange Commission (the "SEC") pursuant to the federal securities laws and
the SEC rules and regulations thereunder, all of which as of their respective
dates of filing complied in all material respects with all applicable
requirements of the Exchange Act (collectively, the "Banner SEC Reports"). None
of the Banner SEC Reports, including, without limitation, any financial
statements or schedules included therein, as of their respective dates,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading provided,
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however, that no representation or warranty is made with respect to those
portions of the Banner SEC Reports that specifically make disclosures or are
required to make disclosures with respect to Xxxxxxxxx.
(b) The consolidated financial statements (including the related notes
thereto) of Banner included in Banner SEC Reports complied in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles applied on a basis consistent with
prior periods (except as otherwise noted therein) and presented fairly the
consolidated financial position of Banner and its consolidated subsidiaries as
of their respective dates, and the consolidated results of their operations and
cash flows for the periods presented therein (subject, in the case of the
unaudited interim financial statements, to normal year-end adjustments and the
absence of notes thereto).
5.6 Absence of Certain Changes or Events. Since the date of this Agreement,
or as otherwise known to Xxxxxxxxx or MTA at or prior to this Agreement, the
business of Banner has been carried on only in the ordinary and usual course,
and Banner has not suffered any Banner Material Adverse Effect, provided that no
representation or warranty is made with respect to any Banner Material Adverse
Effect known to or caused by Xxxxxxxxx or MTA.
5.7 Undisclosed Liabilities. Except as disclosed in Banner SEC Reports
filed prior to the date of this Agreement, as contemplated by this Agreement or
as otherwise known to Xxxxxxxxx or MTA at or prior to the date of this
Agreement, there are no liabilities or obligations of Banner or its subsidiaries
of any kind whatsoever, whether accrued, contingent, absolute or otherwise, that
would be required by generally accepted accounting principles to be reflected on
a consolidated balance sheet of Banner, other than liabilities or obligations
(i) incurred in the ordinary course of business consistent with past practice
since the date of this Agreement, or (ii) which would not, individually or in
the aggregate, have a Banner Material Adverse Effect.
5.8 Litigation. Except as disclosed in Banner SEC Reports filed prior to
the date of this Agreement or for any litigation relating to the transactions
contemplated by this Agreement, (i) there are no actions, claims, suits,
proceedings or governmental investigations pending or, to the knowledge of
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Banner, threatened against or involving Banner or any of its subsidiaries which,
individually or in the aggregate, are reasonably likely to have a Banner
Material Adverse Effect, and (ii) there are no judgments, decrees, injunctions,
rules or orders of any court or governmental or regulatory authority applicable
to Banner or any of its subsidiaries, which, individually or in the aggregate,
would have a Banner Material Adverse Effect.
5.9 Registration Statement; Proxy Statement. None of the information to be
supplied by and relating to Banner for inclusion or incorporation by reference
in the Registration Statement or the Proxy Statement (as such terms are
hereinafter defined in Section 7.2) will, at the time of the mailing of the
Proxy Statement and at the time of the stockholder meeting of Banner in
connection with the vote of such stockholders with respect to the Merger and
this Agreement (the "Stockholder Meeting"), contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any time prior to
the Effective Time any event with respect to Banner should occur that is
required to be described in an amendment of, or a supplement to, the Proxy
Statement or the Registration Statement, such event shall be so described, and
such amendment or supplement shall be promptly filed with the SEC and, as
required by law, disseminated to the stockholders of Banner. With respect to the
information relating to Banner, the Registration Statement and the Proxy
Statement will comply as to form in all material respects with the requirements
of the Exchange Act. For purposes of this Section 5.9, any statement which is
made or incorporated by reference in the Proxy Statement or the Registration
Statement shall be deemed modified or superseded to the extent any later filed
document incorporated by reference in the Proxy Statement or the Registration
Statement or any statement included in the Proxy Statement or the Registration
Statement modifies or supersedes such earlier statement.
5.10 Compliance with Applicable Laws. Except as otherwise known to
Xxxxxxxxx or MTA, Banner and its subsidiaries hold all permits, licenses,
variances, exemptions, orders, franchises and approvals or all governmental or
regulatory authorities necessary for the lawful conduct of their respective
businesses, except where the failure to so hold would not, individually or in
the aggregate, have a Banner Material Adverse Effect (the "Banner Permits").
Banner and its subsidiaries are in compliance with the terms of Banner Permits,
ex-
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cept where the failure so to comply would not, individually or in the aggregate,
have a Banner Material Adverse Effect. Except as disclosed in Banner SEC Reports
filed prior to the date of this Agreement, the business of Banner is not being
conducted in violation of any law, ordinance or regulation of any governmental
or regulatory authorities, except for possible violations which, individually or
in the aggregate, would not have a Banner Material Adverse Effect.
5.11 Opinion of Investment Bankers. The Special Committee has received the
opinion dated January 11, 1999 (the "Fairness Opinion") of Xxxxxxxx Xxxxx Xxxxxx
& Xxxxx (the "Investment Banker"), the Special Committee's investment banker, to
the effect that at the time of the execution and delivery of this Agreement the
consideration to be received in the Merger is fair to the holders of shares of
Banner Common Stock (other than Xxxxxxxxx and MTA and their affiliates) from a
financial point of view.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXX AND
MTA
Xxxxxxxxx and MTA represent and warrant, jointly and severally, to Banner
that:
6.1 Corporate Organization and Qualification. Each of Xxxxxxxxx and its
Significant Subsidiaries (as defined in Section 11.5 below) and MTA (i) is a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation, (ii) is qualified and in good
standing as a foreign corporation in each jurisdiction where the properties
owned, leased or operated, or the business conducted, by it require such
qualification and (iii) has all requisite power and authority to own its
properties and to carry on its business as it is now being conducted, except
where the failure to so qualify, be in such good standing or have such power and
authority would not, result in an adverse effect on the financial condition,
business or properties of Xxxxxxxxx and its subsidiaries which would be material
to the ability of Xxxxxxxxx and MTA to fulfill their obligations under this
Agreement (a "Xxxxxxxxx Material Adverse Effect").
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6.2 Capitalization. As of January 8, 1999: (i) the authorized capital stock
of Xxxxxxxxx consisted of 40,000,000 shares of Xxxxxxxxx Common Stock,
20,000,000 shares of Class B Common Stock, and 10,000,000 shares of Preferred
Stock; (ii) 19,218,806 shares of Xxxxxxxxx Common Stock were issued and
outstanding; (iii) 2,624,662 shares of Xxxxxxxxx Class B Common Stock were
issued and outstanding; (iv) no shares of Preferred Stock were issued and
outstanding; (v) 7,495,868 shares of Xxxxxxxxx Common Stock were held in the
treasury of Xxxxxxxxx; (vi) 1,839,831 shares of Xxxxxxxxx Common Stock were
reserved for issuance pursuant to issued but unexercised stock options under
Xxxxxxxxx'x stock option plans; and (vii) 900,000 shares of Xxxxxxxxx Common
Stock were reserved for issuance under issued but unexercised warrants to
purchase Xxxxxxxxx'x common stock. All of the outstanding shares have been duly
authorized and validly issued and are fully paid and nonassessable. Xxxxxxxxx'
stock option plans provide for the issuance of 1,839,831 shares of Xxxxxxxxx
Common Stock under outstanding but unexercised stock options, and allow for the
issuance of an additional 509,967 shares of Xxxxxxxxx Common Stock for future
stock option grants.
6.3 Authority Relative to This Agreement. Each of Xxxxxxxxx and MTA has the
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. This Agreement and the
consummation by Xxxxxxxxx and MTA of the transactions contemplated hereby have
been duly and validly authorized by the respective Boards of Directors of
Xxxxxxxxx and MTA, and no other corporate proceedings on the part of Xxxxxxxxx
or MTA are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Xxxxxxxxx and MTA and, assuming this Agreement
constitutes the valid and binding agreement of Banner, constitutes the valid and
binding agreement of each of Xxxxxxxxx and MTA, enforceable against each of them
in accordance with its terms, except that the enforcement hereof may be limited
by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (b)
general principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity).
6.4 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Xxxxxxxxx or MTA nor the consummation by Xxxxxxxxx
or MTA of the transactions contemplated hereby will (a) conflict with or result
in any breach of any provision of the Certificate of Incorporation
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or the Bylaws, respectively, of Xxxxxxxxx or MTA; (b) require of Xxxxxxxxx or
its subsidiaries (except Banner) any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory authority,
except (i) pursuant to the applicable requirements of the Securities Act and the
Exchange Act and the rules and regulations promulgated thereunder, (ii) the
filing of the Certificate of Merger pursuant to the DGCL, (iii) pursuant to NYSE
listing requirements with respect to the shares of Xxxxxxxxx Common Stock
constituting the Merger Consideration and shares of Xxxxxxxxx Common Stock to be
issued pursuant to options assumed in accordance with Section 3.4(a) or (iv)
where the failure to obtain such consent, approval, authorization or permit, or
to make such filing or notification, would not, individually or in the
aggregate, have a Xxxxxxxxx Material Adverse Effect; (c) result in a violation
or breach of, or constitute a default under any of the terms, conditions or
provisions of any note, license, agreement or other instrument or obligation by
which Xxxxxxxxx or any of its Significant Subsidiaries (other than Banner) may
be bound, except for such violations, breaches and defaults as to which
requisite waivers or consents have been obtained or which would not,
individually or in the aggregate, have a Xxxxxxxxx Material Adverse Effect; or
(d) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Xxxxxxxxx or any of its subsidiaries (other than Banner), except
for violations which would not, individually or in the aggregate, have a
Xxxxxxxxx Material Adverse Effect.
6.5 SEC Reports. Since January 1, 1996, Xxxxxxxxx has filed all periodic
reports required to be filed by it with the Securities and Exchange Commission
(the "SEC") pursuant to the federal securities laws and the SEC rules and
regulations thereunder.
6.6 Registration Statement; Proxy Statement. None of the information to be
supplied by Xxxxxxxxx or MTA for inclusion or incorporation by reference in the
Registration Statement or the Proxy Statement (except for information about
Banner furnished by Banner to Xxxxxxxxx) will, at the time of the mailing of the
Proxy Statement and at the time of the Stockholder Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. If at any time
prior to the Effective Time any event with respect to Xxxxxxxxx, its officers
and directors or any of its subsidiaries shall occur and is required to be
described in an amendment of, or a supplement to, the Proxy
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Statement and the Registration Statement, such event shall be so described, and
such amendment or supplement shall be promptly filed with the SEC and, as
required by law, disseminated to the stockholders of Banner. The Registration
Statement and the Proxy Statement (except with respect to information relating
to Banner) will comply as to form in all material respects with the provisions
of the Exchange Act. For purposes of this Section 6.6, any statement which is
made or incorporated by reference in the Proxy Statement or the Registration
Statement shall be deemed modified or superseded to the extent any later filed
document incorporated by reference in the Proxy Statement or the Registration
Statement or any statement included in the Proxy Statement or the Registration
Statement modifies or supersedes such earlier statement.
6.7 Undisclosed Liabilities. Since September 27, 1998, except as disclosed
in Xxxxxxxxx'x SEC Reports filed prior to the date of this Agreement or as
contemplated by this Agreement, there are no liabilities or obligations of
Xxxxxxxxx or its subsidiaries of any kind whatsoever, whether accrued,
contingent, absolute or otherwise, that would be required by generally accepted
accounting principles to be reflected on a consolidated balance sheet of
Xxxxxxxxx, other than liabilities or obligations (i) incurred in the ordinary
course of business consistent with past practice, or (ii) which would not,
individually or in the aggregate, have a Xxxxxxxxx Material Adverse Effect.
6.8 Ownership of Shares. As of the date hereof, Xxxxxxxxx owns directly or
indirectly 17,839,974 shares of Banner Common Stock, all of which Xxxxxxxxx has
the right to vote with respect to the transactions contemplated hereby, and
3,413,109 shares of Banner Preferred. Neither Xxxxxxxxx nor MTA owns or holds
any right, option or warrant, or otherwise is a party to any agreement,
arrangement or understanding, to acquire Banner Common Stock or Banner
Preferred.
6.9 Interim Operations of MTA. MTA was formed solely for the purpose of
engaging in the transaction contemplated hereby and has not engaged in any
business activities or conducted any operations other than in connection with
the transactions contemplated hereby.
6.10 Compliance with Applicable Laws. Except as otherwise known to Banner,
Xxxxxxxxx and its subsidiaries hold all permits, licenses, variances,
exemptions, orders, franchises and approvals or all governmental or regulatory
authorities necessary for the lawful conduct of their respective
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businesses, except where the failure to so hold would not, individually or in
the aggregate, have a Xxxxxxxxx Material Adverse Effect (the "Xxxxxxxxx
Permits"). Xxxxxxxxx and its subsidiaries are in compliance with the terms of
Xxxxxxxxx Permits, except where the failure so to comply would not, individually
or in the aggregate, have a Xxxxxxxxx Material Adverse Effect. Except as
disclosed in Xxxxxxxxx SEC Reports filed prior to the date of this Agreement,
the business of Xxxxxxxxx is not being conducted in violation of any law,
ordinance or regulation of any governmental or regulatory authorities, except
for possible violations, if any, which, individually or in the aggregate, would
not have a Xxxxxxxxx Material Adverse Effect.
6.11 Brokers, Finders or Financial Advisors. No agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
brokers' or finders' fee or any other commission or similar fee from Banner as a
result of Xxxxxxxxx or MTA being a party hereto or consummating any of the
transactions contemplated by this Agreement.
6.12 Investigation by Xxxxxxxxx and MTA. Xxxxxxxxx and MTA have conducted
their own independent review and analysis of the businesses, assets, condition,
operations and prospects of the Company and its subsidiaries. Each of Xxxxxxxxx
and MTA:
(a) acknowledges that, other than as set forth in this Agreement, none of
Banner, its subsidiaries or any of their respective directors, officers,
employees, affiliates, agents or representatives makes any representation or
warranty, either express or implied, as to the accuracy or completeness of any
of the information provided or made available to Xxxxxxxxx or MTA or their
respective agents or representatives prior to the execution of this Agreement,
and
(b) agrees, to the fullest extent permitted by law, that none of Banner,
its subsidiaries or any of their respective directors, officers, employees,
stockholders, affiliates, agents or representatives shall have any liability or
responsibility whatsoever to Banner or Xxxxxxxxx on any basis (including without
limitation in contract, tort or otherwise) based upon any information provided
or made available, or statements made, to Xxxxxxxxx or MTA prior to the
execution of this Agreement, except for information provided or made available
or statements made and known by such parties to be false or misleading in any
material respect.
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ARTICLE VII
STOCKHOLDERS' APPROVAL;
SEC MATTERS
7.1 Stockholders' Approval. (a) Banner shall submit this Agreement and the
transactions contemplated hereby for the approval of its stockholders at the
Stockholder Meeting as promptly as practicable and shall use all reasonable
efforts to obtain stockholder approval and adoption of this Agreement and the
transactions contemplated hereby, such Stockholder Meeting to be held as soon as
practicable following the date hereof, and Banner shall, through its Board of
Directors based upon the recommendation of the Special Committee, recommend to
its stockholders approval of the transactions contemplated by this Agreement,
subject to the provisions of Section 7.1(b) hereof.
(b) Notwithstanding the foregoing, the Special Committee or the Board of
Directors of Banner may at any time prior to the Effective Time withdraw, modify
or change any recommendation and declaration regarding this Agreement or the
Merger, or recommend and declare advisable any other offer or proposal, if, in
the opinion of the Special Committee or the Board of Directors after
consultation with its counsel, the failure to so withdraw, modify or change its
recommendation and declaration would be inconsistent with its fiduciary duties
to its stockholders under applicable law.
(c) From the date hereof to the Effective Time, Xxxxxxxxx and MTA shall not
sell or otherwise dispose of any of the Banner Common Stock and Banner Preferred
owned by them. At the Stockholder Meeting, or any adjournment thereof, Xxxxxxxxx
and MTA shall vote the shares of Banner Common Stock owned by them in favor of
the Merger.
7.2 Registration Statement; Proxy. Xxxxxxxxx and Banner will, as promptly
as practicable, prepare and file with the SEC a proxy statement, a registration
statement on Form S-4 in respect of shares of Xxxxxxxxx Common Stock comprising
the Merger Consideration (the "Registration Statement") and forms of proxy in
connection with the vote of Banner's stockholders with respect to the Merger and
this Agreement (such proxy statements, together with any amendments thereof or
supplements thereto, in each case in the form or forms mailed to Banner's
stockholders, are herein called the "Proxy Statement"). Xxxxxxxxx and Banner
will each use all reasonable efforts to cause the Registration Statement to
become effective and to
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cause the Registration Statement and the Proxy Statement to be mailed to
stockholders of Banner at the earliest practicable date.
ARTICLE VIII
COVENANTS AND AGREEMENTS
8.1 Additional Agreements; Cooperation. (a) Subject to the terms and
conditions herein provided and to the fiduciary obligations owed to their
respective stockholders, each of the parties hereto agrees to use its reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
as promptly as practicable the transactions contemplated by this Agreement, and
to cooperate with each other in connection with the foregoing, including using
its reasonable efforts (i) to obtain all necessary waivers, consents and
approvals from other parties to loan agreements, leases and other contracts,
(ii) to obtain all necessary consents, approvals and authorizations as are
required to be obtained under any federal, state or foreign law or regulations,
(iii) to defend all lawsuits or other legal proceedings commenced or instituted
by persons or entities other than the parties hereto challenging this Agreement
or the consummation of the transactions contemplated hereby, (iv) to lift or
rescind any injunction or restraining order or other order adversely affecting
the ability of the parties to consummate the transactions contemplated hereby,
(v) to effect all necessary registrations and filings, including, but not
limited to, submissions of information requested by the NYSE or governmental
authorities, and (vi) to fulfill all conditions to this Agreement.
(b) Each of the parties hereto agrees to furnish to the other party hereto
such necessary information and reasonable assistance as such other party may
request in connection with its preparation of necessary filings or submissions
to any regulatory or governmental agency or authority, including, without
limitation, any filing necessary under the provisions of the NYSE Rules or any
applicable Federal or state statute.
8.2 Publicity. Banner and Xxxxxxxxx agree to consult with each other in
issuing any press release and with respect to the general content of other
public statements with respect to the transactions contemplated hereby, and
shall not
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issue any such press release prior to such consultation, except as may be
required by law.
8.3 No Solicitation. Banner agrees that, except with Xxxxxxxxx'x consent,
prior to the Effective Time or unless this Agreement is terminated, it shall
not, and shall not authorize or permit any of its directors, officers,
employees, agents or representatives to, directly or indirectly, solicit,
initiate, facilitate or encourage (including by way of furnishing or disclosing
non-public information) any inquiries or the making of any proposal with respect
to any merger, consolidation or other business combination involving Banner or
acquisition of any kind of all or substantially all of the assets or capital
stock of Banner (an "Acquisition Transaction") or negotiate, explore or
otherwise communicate in any way with any third party (other than Xxxxxxxxx)
with respect to any acquisition transaction or enter into any agreement,
arrangement or understanding requiring it to abandon, terminate or fail to
consummate the Merger or any other transactions contemplated by this Agreement;
provided, that if at any time prior to the Effective Time, in the opinion of the
Special Committee of the Board of Directors after consultation with its counsel,
the failure to take any of the actions provided in this Section 8.3 would be
inconsistent with the fiduciary duties of such Special Committee to the
stockholders of Banner under applicable law, such Special Committee may take any
such action.
8.4 Access to Information. As of the date of this Agreement until the
Effective Time, Banner will give Xxxxxxxxx and its authorized representatives
(including counsel, environmental and other consultants, accountants and
auditors) full access to all facilities, personnel and operations and to all
books and records of it and its subsidiaries, will permit Xxxxxxxxx to make such
inspections as it may require and will cause its officers and those of its
subsidiaries to furnish Xxxxxxxxx with such financial and operating data and
other information with respect to its business and properties as Xxxxxxxxx may
request. Any and all information obtained by Xxxxxxxxx and its authorized
representatives in the foregoing manner is hereinafter referred to as the
"Confidential Information"; provided, that the term "Confidential Information"
shall not include information that at the time of its disclosure or thereafter
is generally available and known to the public, was within Xxxxxxxxx'x
possession prior to its being furnished to Xxxxxxxxx by Banner or was acquired
or developed by Xxxxxxxxx without violation of any obligation of Xxxxxxxxx to
Banner or any contractual, legal or fiduciary obligation owed by Xxxxxxxxx or
any other person or entity to Banner. Xxxxxxxxx
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and MTA acknowledge that all information designated Confidential Information
will be treated in the same manner as Xxxxxxxxx treats its own confidential
information.
8.5 Bank Consents. Each of Banner and Xxxxxxxxx will reasonably cooperate
with each other to assist the other party in obtaining any consent required from
each of Xxxxxxxxx'x and Banner's bank lenders, to effect the Merger.
8.6 Notification of Certain Matters. Banner or Xxxxxxxxx, as the case may
be, shall promptly notify the other of (i) its obtaining of actual knowledge as
to the matters set forth in clauses (x) and (y) below, or (ii) the occurrence,
or failure to occur, of any event which occurrence or failure to occur would be
likely to cause (x) any representation or warranty contained in this Agreement
to be untrue or inaccurate in any material respect at any time from the date
hereof to the Effective Time, or (y) any material failure of Banner, Xxxxxxxxx
or MTA, as the case may be, or of any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations or warranties of the
parties, the conditions to the obligations of the parties hereunder or any
liability that a party hereto may have to another party under this Agreement.
8.7 Fees and Expenses. In the event this Agreement is terminated, Banner,
Xxxxxxxxx, and MTA shall bear their respective expenses incurred in connection
with the Merger, including, without limitation, the preparation, execution and
performance of this Agreement and the transactions contemplated hereby, and all
fees and expenses of investment bankers, finders, brokers, agents,
representatives, counsel and accountants.
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8.8 Conduct of Business of Banner Pending the Merger. Except as
contemplated by this Agreement or with Xxxxxxxxx'x consent, during the period
from the date of this Agreement to the Effective Time, each of Banner and its
subsidiaries will conduct its operations according to its ordinary course of
business consistent with past practices, and will use all commercially
reasonable efforts to preserve intact its business organization, to keep
available the services of its officers and employees and to maintain
satisfactory relationships with suppliers, distributors, customers and others
having business relationships with it and will take no action which would
materially adversely affect the ability of the parties to consummate the
transactions contemplated by this Agreement.
8.9 Indemnification of Directors and Officers. (a) All rights to
indemnification now existing in favor of the present directors or officers of
Banner and its respective subsidiaries as provided in the DGCL, their respective
certificates or articles of incorporation or by-laws or otherwise in effect on
the date hereof shall survive the Merger for a period of six years, and, during
such period, the Certificate of Incorporation and Bylaws of the Surviving
corporation shall not be amended to reduce or limit the rights of indemnity of
the present directors or officers of Banner, or the ability of the Surviving
Corporation to indemnify them, nor to hinder, delay or make more difficult the
exercise of such rights of indemnity or the ability to indemnify. In addition,
Banner (and, after the Effective Time, the Surviving Corporation) shall pay
expenses in advance of the final disposition of any action or proceeding to the
full extent permitted by law to each director or officer of Banner and its
respective subsidiaries seeking indemnification pursuant to the existing rights
of indemnification required to be maintained in the preceding sentence upon
receipt of an undertaking by such director or officer to repay all amounts so
advanced if it is judicially determined that such person is not entitled to
indemnification.
(b) From and after the Effective Time, the Surviving Corporation shall
maintain, and Xxxxxxxxx agrees to cause the Surviving Corporation to maintain,
for not less than six years, Banner's current policies of directors' and
officers' liability insurance with respect to actions and omissions occurring
prior to the Effective Time to the extent available or, if not available,
substantially equivalent policies; provided that in no event shall the Surviving
Corporation be required to expend to maintain or procure insurance coverage
pursuant to this Section 8.9 an amount per annum in excess of 150% of the
current annual premiums for the twelve-month period ended September 30, 1998
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(the "Maximum Premium") with respect to such insurance or, if the cost of such
coverage exceeds the Maximum Premium, the maximum amount of coverage that can be
purchased or maintained for the Maximum Premium. In the event any claim is made
against present directors or officers of the Company that is covered, in whole
or in part, or potentially so covered by insurance, the Surviving Corporation
and Xxxxxxxxx shall do nothing that would forfeit, jeopardize, restrict or limit
the insurance coverage available for that claim until the final disposition of
that claim. Any such policy may in the sole discretion of the Surviving
Corporation be one or more "tail" policies for all or any portion of the
six-year period referred to above.
(c) This Section 8.9 shall survive the consummation of the Merger. The
provisions of this Section 8.9 are intended to be for the benefit of, and shall
be enforceable by, the present and former directors or officers of Banner, as
the case may be. If the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other corporation or entity and
is not the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers all or substantially all of its properties or assets
to any individual, corporation or any other entity, in each such case, proper
provision shall be made so that the successors and assigns of the Surviving
Corporation shall assume the obligations set forth in this Section 8.9.
8.10 Approval of Merger. At the Stockholder Meeting, Xxxxxxxxx shall vote
or cause to be voted all of the Banner Common Stock owned by it in favor of the
approval and adoption of this Agreement and the Merger.
ARTICLE IX
CONDITIONS TO CLOSING
9.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment or waiver by the Board of Directors of the waiving party
(subject to applicable law) at or prior to the Effective Date of each of the
following conditions:
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(a) this Agreement and the Merger shall have been duly approved and
adopted at the Stockholder Meeting in accordance with the DGCL;
(b) no order, statute, rule, regulation, executive order, injunction,
stay, decree or restraining order shall have been enacted, entered,
promulgated or enforced by any court of competent jurisdiction or
governmental or regulatory authority or instrumentality that prohibits the
consummation of the Merger or the transactions contemplated hereby;
(c) all necessary consents and approvals of any United States or any
other governmental authority or any other third party required for the
consummation of the transactions contemplated by this Agreement shall have
been obtained except for such consents and approvals the failure to obtain
which individually or in the aggregate would not have a material adverse
effect on Xxxxxxxxx (assuming the merger had taken place);
(d) the Registration Statement shall have become effective in
accordance with the provisions of the Securities Act. No stop order
suspending the effectiveness of the Registration Statement shall have been
issued by the SEC and remain in effect.
9.2 Additional Conditions to Obligations of Xxxxxxxxx. The obligations of
Xxxxxxxxx to effect the Merger shall be subject to the fulfillment or waiver
(subject to applicable law), at or prior to the Effective Date, of each of the
following conditions:
(a) Banner shall have furnished Xxxxxxxxx with certified copies of
resolutions duly adopted by its Board of Directors approving the execution
and delivery of this Agreement and the Merger and all other necessary
corporate action to enable Banner to comply with the terms of this
Agreement;
(b) Banner shall have performed or complied in all material respects
with all its agreements, obligations and covenants required by this
Agreement to be performed by it on or prior to the Effective Date;
(c) the representations and warranties of Banner contained herein
shall be true and correct in all material respects on the date of this
Agreement and the Effective
-26-
Date as though such representations and warranties were made at and on such
date;
(d) there shall not have occurred since the date hereof any material
adverse change in the business, operations, assets, financial condition or
results of operations of Banner;
(e) all consents required by Xxxxxxxxx'x and Banner's bank lenders to
effect the Merger shall have been obtained; and
(f) Banner shall have delivered to Xxxxxxxxx a certificate, dated the
Effective Date, of its Senior Vice President and Secretary to the effect of
(a), (b), (c),(d) and (e), above.
9.3 Additional Conditions to Obligations of Banner. The obligations of
Banner to effect the Merger shall be subject to the fulfillment or waiver
(subject to applicable law), at or prior to the Effective Date, of each of the
following conditions:
(a) Each of MTA and Xxxxxxxxx shall have furnished Banner with
certified copies of resolutions duly adopted by its Board of Directors
approving the execution and delivery of this Agreement and the Merger and
all other necessary corporate action to enable MTA and Xxxxxxxxx to comply
with the terms of this Agreement;
(b) Banner shall have been furnished with a resolution by the sole
stockholder of MTA approving the execution and delivery of this Agreement
and the Merger and all other necessary corporate action to enable MTA to
comply with the terms of this Agreement;
(c) MTA and Xxxxxxxxx shall have performed or complied in all material
respects with all its agreements, obligations and covenants required by
this Agreement to be performed by it on or prior to the Effective Date;
(d) the representations and warranties of MTA and Xxxxxxxxx contained
herein shall be true and correct in all material respects on the date of
this Agreement and the Effective Date as though such representations and
warranties were made at and on such date and Xxxxxxxxx shall have delivered
to Banner a certificate, dated the Effec-
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tive Date, of its President or Senior Vice President and its Secretary to
such effect;
(e) there shall not have occurred since the date hereof any material
adverse change in the business, operations, assets, financial condition or
results of operations of Xxxxxxxxx;
(f) all consents required by Xxxxxxxxx'x and Banner's bank lenders to
effect the Merger shall have been obtained;
(g) Banner shall have received the Fairness Opinion, which shall not
have been revoked, rescinded or annulled;
(h) the shares of Xxxxxxxxx Common Stock constituting the Merger
Consideration and the shares of Xxxxxxxxx Common Stock reserved for
issuance upon exercise of options assumed in accordance with Section 3.4(a)
shall have been listed for trading on the NYSE; and
(i) Banner shall have delivered to Xxxxxxxxx a certificate, dated the
Effective Date, of its Senior Vice President and Secretary to the effect of
(a), (b), (c), (d), (e), (f) and (h) above.
ARTICLE X
TERMINATION
10.1 Termination by Mutual Consent. This Agreement may be abandoned at any
time prior to the Effective Time, before or after the approval by stockholders
of Banner, by the mutual written consent of all the parties (with the
concurrence of the Special Committee).
10.2 Termination by Xxxxxxxxx, MTA or Banner. This Agreement may be
terminated and the Merger may be abandoned by any of Xxxxxxxxx, MTA or Banner
(with the concurrence of the Special Committee in the case of termination by
Banner), before or after the approval by stockholders of Banner if (a) any court
of competent jurisdiction in the United States or some other governmental body
or regulatory authority shall have issued an order, decree or ruling or taken
any other action permanently restraining, enjoining or otherwise prohibiting the
Merger and such order, decree, ruling or other action shall
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have become final and nonappealable, (b) the Merger shall not have been
consummated by May 31, 1999, provided that the right to terminate this Agreement
pursuant to this Section 10.2(b) shall not be available to any party whose
failure to fulfill any of its obligations under this Agreement results in the
failure of the Merger to occur on or before such date, or (c) this Agreement and
the Merger shall have been voted on by stockholders of Banner at the Stockholder
Meeting and the vote shall not have been satisfied the condition set forth in
Section 9.1(a).
10.3 Termination by Xxxxxxxxx or MTA. This Agreement may be terminated and
the Merger may be abandoned by Xxxxxxxxx or MTA, prior to the Effective Time,
before or after the approval by stockholders of Banner if Banner shall have
failed to perform in any material respect any of its material obligations under
this Agreement theretofore to be performed by Banner, which failure to perform
has not been cured within 30 days following receipt by Banner of notice of such
failure to perform from Xxxxxxxxx or MTA.
10.4 Termination by Banner. This Agreement may be terminated by Banner
(with the concurrence of the Special Committee), prior to the Effective Time,
before or after the approval by stockholders of Banner (a) if Xxxxxxxxx or MTA
shall have failed to perform in any material respect any of their material
obligations under this Agreement theretofore to be performed by Xxxxxxxxx or
MTA, which failure to perform has not been cured within 30 days following
receipt by Xxxxxxxxx of notice of such failure to perform from Banner or (b) if,
prior to consummation of the Merger, Banner shall have received a bona fide
written offer from a third party to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, more than 50% of the
combined voting power of the shares of Banner Common Stock and Banner Preferred
then outstanding or all or substantially all the assets of Banner and the
Special Committee shall have determined in its good faith judgment (based on the
advice of a financial advisor of nationally recognized reputation) that the
terms of such offer are more favorable to Banner's stockholders than the Merger.
10.5 Effect of Termination. In the event of the termination of this
Agreement pursuant to the foregoing provisions of this Article X, this Agreement
shall become void and have no effect, with no liability on the part of any party
or its stockholders or directors or officers in respect thereof except for the
provisions of Section 8.9 and agreements which survive the termination of this
Agreement and except for li-
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ability that MTA, Xxxxxxxxx or Banner might have arising from a breach of this
Agreement.
ARTICLE XI
MISCELLANEOUS
11.1 Survival of Representations and Warranties. All representations and
warranties made in this Agreement and in any document or instrument delivered
pursuant to this Agreement shall not survive beyond the earlier of termination
of this Agreement or the Effective Time. This Section 11.1 shall not limit any
covenant or agreement of the parties hereto which by its terms contemplates
performance after the Effective Time.
11.2 Closing and Waiver If this Agreement shall not have been terminated in
accordance with the provisions of Section 10.1 hereof, a closing (the "Closing"
and the date and time thereof being the "Effective Time") will be held as soon
as practicable after the conditions set forth in Article IX shall have been
satisfied or waived. The Closing will be held at the offices of Xxxxxx Xxxxxx &
Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx or at such other places as the
parties may agree. Immediately thereafter, the Delaware Certificate of Merger
will be filed.
(a) At any time prior to the Effective Date, any party hereto may (i)
extend the time for the performance of any of the obligations or other acts of
any other party hereto, (ii) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document delivered
pursuant hereto, and (iii) waive compliance with any of the agreements of any
other party or with any conditions to its own obligations contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing duly authorized by and
signed on behalf of such party.
11.3 Notice. (a) Any notice or communication to any party hereto shall be
duly given if in writing and delivered in person or mailed by first class mail
(registered or certified, return receipt requested), or overnight air courier
guaranteeing next day delivery, to such other party's address.
If to Xxxxxxxxx or MTA:
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00000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
with a copy to:
Xxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
If to Banner:
00000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx
with copies to
Xxxxxx X. Xxxxxx
Great Point Capital, Inc.
000 Xxxx 00 Xxxxxx
Xxx Xxxx, XX 00000
and
Xxxxxx Xxxxxxx, Esq.
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
(b) All notices and communications will be deemed to have been duly given:
at the time delivered by hand, if personally delivered; five business days after
being deposited in the mail, if mailed; and the next business day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next day
delivery.
11.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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11.5 Interpretation. The headings of articles and sections herein are for
convenience of reference, do not constitute a part of this Agreement, and shall
not be deemed to limit or affect any of the provisions hereof. As used in this
Agreement, "person" means any individual, corporation, limited or general
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof; "subsidiary" of any person means (i) a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by such
person or by one or more other subsidiaries of such person or by such person and
one or more subsidiaries thereof or (ii) any other person (other than a
corporation) in which such person, or one or more other subsidiaries of such
person or such person and one or more other subsidiaries thereof, directly or
indirectly, have more than a majority ownership and voting power relating to the
policies, management and affairs thereof; and "voting stock" of any person means
capital stock of such person which ordinarily has voting power for the election
of directors (or persons performing similar functions) of such person, whether
at all times or only so long as no senior class of securities has such voting
power by reason of any contingency and "knowledge" (or words of similar import)
with regard to a party to this agreement shall mean the actual knowledge of any
officer of such party. "Significant Subsidiary" shall have the meaning ascribed
to it under Rule 1-02 of Regulation S-X of the SEC.
11.6 Variations and Amendment. This Agreement may be varied or amended only
by written action of Banner (with the concurrence of the Special Committee) and
Xxxxxxxxx, before or after the Stockholder Meeting at any time prior to the
Effective Time.
11.7 No Third Party Beneficiaries. Nothing in this Agreement shall confer
any rights upon any person or entity which is not a party or permitted assignee
of a party to this Agreement.
11.8 Governing Law. This Agreement shall be governed by the laws of the
State of Delaware (regardless of the laws that might otherwise govern under
applicable Delaware principles of conflicts of law) as to all matters, including
but not limited to matters of validity, construction, effect, performance and
remedies.
11.9 Entire Agreement This Agreement constitutes the entire agreement among
the parties with respect to the sub-
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ject matter hereof and supersedes all other prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter
hereof.
11.10 No Recourse Against Others. No director, officer or employee, as
such, of Banner, MTA or Xxxxxxxxx or any of their respective subsidiaries shall
have any liability for any obligations of Banner, MTA or Xxxxxxxxx,
respectively, under this Agreement for any claim based on, in respect of or by
reason of such obligations or their creation.
11.11 Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
11.12 No Assignment. Neither this Agreement, nor any of the rights,
interests or obligations hereunder, shall be transferred or assigned (except in
the case of MTA, by operation of law upon consummation of the Merger) without
the prior written consent of the other parties hereto.
11.13 Joint and Several Liability. Xxxxxxxxx and MTA shall be jointly and
severally liable for all of the covenants, agreements and obligations made or
incurred by either of them under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Merger Agreement to
be executed by their duly authorized officers all as of the day and year first
above written.
BANNER AEROSPACE, INC.
By:____________________________
Name:
Title:
THE XXXXXXXXX CORPORATION
By:__________________________
Name:
Title:
MTA, INC.
By:____________________________
Name:
Title:
SCHEDULE 5.4
CONSENTS AND APPROVALS
Section 10.10 of the Second Amended and Restated Credit Agreement dated as of
December 12, 1996 among Banner and Banner Subsidiaries (collectively, the
"Borrowers"), Citicorp USA, Inc., as Administrative Agent and Arranger, and
Nationsbank, N.A., as Co-Arranger, Co-Agent and Syndications Agent, prohibits
the Borrowers from entering into any merger or consolidation.
