AGREEMENT AND PLAN OF MERGER
DATED AS OF
JUNE 26, 2000
BY AND AMONG
NATIONAL-STANDARD COMPANY,
HEICO HOLDING, INC.
AND
NS ACQUISITION CORP.
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of June
26, 2000, is made by and among NATIONAL-STANDARD COMPANY, an Indiana corporation
(the "Company"), HEICO HOLDING, INC., a Delaware corporation ("Parent"), and NS
ACQUISITION CORP., a Delaware corporation ("Merger Subsidiary").
W I T N E S S E T H :
WHEREAS, in furtherance of Merger Subsidiary's acquisition of all of
the issued and outstanding shares of common stock, par value $.01 per share
of the Company (the "Shares" or the "Company Common Stock"), it is proposed
that Merger Subsidiary make a cash tender offer (the "Offer") to acquire all
of the issued and outstanding shares of Company Common Stock for $1.00 per
Share, net to the seller in cash, upon the terms and conditions set forth in
this Agreement and the Offer.
WHEREAS, the Board of Directors of the Company has (i) approved this
Agreement, (ii) resolved to recommend the Offer to the Company's stockholders
and (iii) deems it advisable and in the best interests of the Company's
stockholders to consummate the merger of Merger Subsidiary with and into the
Company on the terms and conditions set forth in this Agreement (the
"Merger").
WHEREAS, the respective Boards of Directors of Parent and Merger
Subsidiary have approved this Agreement, and deem it advisable and in the
best interests of their respective stockholders to consummate the Merger on
the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the promises and the respective
representations, warranties, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
THE OFFER
Section 1.1. THE OFFER.
(a) Subject to the provisions of this Agreement and this
Agreement not having been terminated, Merger Subsidiary shall use reasonable
efforts to commence (within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the "Exchange Act")) the Offer within 10 business days of the
date hereof. The obligation of Merger Subsidiary to commence the Offer and to
accept for payment, and to pay for any shares of Company Common Stock
tendered pursuant to the Offer shall be subject to the satisfaction of the
conditions set forth in EXHIBIT A and the terms and conditions of this
Agreement (the "Offer Conditions"). Subject to the provisions of this
Agreement, the Offer shall initially expire on the 20th business day from and
after the date the Offer is commenced, including the date of the commencement
of the Offer as the first business day in accordance with Rule 14d-2 under
the Exchange Act, unless this Agreement is terminated in accordance with
Article 9, in which case the Offer (whether or not previously extended in
accordance with the terms hereof) shall expire on such date of termination.
(b) Merger Subsidiary expressly reserves the right to waive any
condition set forth on EXHIBIT A without the consent of the Company, and to
make any other changes in the terms and conditions of the Offer. However,
without the prior written consent of the Company, Merger Subsidiary shall not
(i) reduce the maximum number of Shares subject to the Offer; (ii) decrease
the Offer Price; (iii) change the form of consideration payable in the Offer;
(iv) amend or modify the Offer Conditions in any manner adverse to the
holders of Shares; or (v) waive the requirement for the Foothill Consent (as
defined below) to have been obtained at the expiration of the Offer.
Notwithstanding the foregoing, Merger Subsidiary may, without the consent of
the Company, extend the Offer at any time and from time to time: (i) if at
the then scheduled expiration date of the Offer any of the Offer Conditions
shall not have been satisfied or waived, until such time as all such
conditions shall have been satisfied or waived; (ii) for any period required
by any statute or rule, regulation, interpretation or position of the
Securities and Exchange Commission (the "Commission") or its staff applicable
to the Offer; (iii) for any period required by applicable law in connection
with an increase in the consideration to be paid pursuant to the Offer; and
(iv) from time to time, for an aggregate period of not more than ten (10)
business days (for all such extensions under this clause (iv)) beyond the
latest expiration date that would be permitted under clause (i), (ii) or
(iii) of this sentence. Subject to and in accordance with the terms and
conditions of the Offer and this Agreement (but subject to the right of
termination in accordance with Article 9), Merger Subsidiary shall accept for
payment and pay for, in accordance with the terms of the Offer, all Shares
validly tendered and not withdrawn pursuant to the Offer as soon as
practicable after the expiration of the Offer. In addition to the foregoing,
Merger Subsidiary may provide for a "subsequent offering period" to the
extent provided in Rule 14d-11 under the Exchange Act after the purchase of
Shares pursuant to the Offer.
Section 1.2 ACTIONS BY MERGER SUBSIDIARY. Within ten (10) business
days following execution of this Agreement, Merger Subsidiary shall file with
the Commission a Tender Offer Statement on Schedule TO, including all
exhibits thereto (together with all amendments and supplements thereto, the
"Schedule TO") with respect to the Offer, the Merger and the other
transactions contemplated hereby. The Schedule TO shall contain or
incorporate by reference an offer to purchase (the "Offer to Purchase") and
forms of the related letter of transmittal and any related documents (the
Schedule TO, the Offer to Purchase and such other documents, together with
all supplements or amendments thereto, collectively, the "Offer Documents").
The Company and its counsel shall be given an opportunity to review and
comment upon the Offer Documents prior to the filing thereof with the
Commission. The Offer Documents shall comply in all material respects with
the requirements of the Exchange Act. On the date filed with the Commission
and on the date first published, sent or given to the Company's stockholders,
the Offer Documents 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
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light of the circumstances under which they were made, not misleading, except
that no representation is made by Merger Subsidiary with respect to
information supplied by the Company for inclusion in the Offer Documents.
Merger Subsidiary agrees to correct promptly any information provided by it
for use in the Offer Documents if and to the extent such information shall
have become false or misleading in any material respect, and Merger
Subsidiary further agrees to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the Commission and to be
disseminated to all of the holders of Shares as and to the extent required by
applicable federal securities laws. The Company agrees to notify Merger
Subsidiary promptly as to any information provided by it for use in the Offer
Documents if and to the extent such information shall have become false or
misleading in any material respect, and Merger Subsidiary further agrees to
take all steps necessary to cause the Offer Documents as so corrected to be
filed with the Commission and to be disseminated to all of the holders of
Shares as and to the extent required by applicable federal securities laws.
Merger Subsidiary agrees to provide the Company and its counsel any comments
Merger Subsidiary or its counsel may receive from the Commission or its staff
with respect to the Offer Documents promptly after receipt of such comments.
Merger Subsidiary shall use its reasonable efforts to respond to such
comments promptly and shall provide the Company copies of any written
responses and telephonic notification of any verbal responses by Merger
Subsidiary or its counsel. Parent and Merger Subsidiary shall provide for
inclusion in the Schedule 14D-9 (as defined below) and the Information
Statement (as defined below) any information reasonably requested by the
Company, and to the extent requested by the Company, Parent and Merger
Subsidiary shall cooperate in the preparation of the Schedule 14D-9 and the
Information Statement.
Section 1.3. ACTIONS BY THE COMPANY.
(a) The Company hereby consents to the inclusion in the Offer
Documents of information relating to the recommendation of the Board of
Directors of the Company described in Section 3.2(b). The Company shall
provide for inclusion in the Offer Documents any information reasonably
requested by Merger Subsidiary, and to the extent requested by Merger
Subsidiary, the Company shall cooperate in the preparation of the Offer
Documents.
(b) As soon as reasonably practicable on or after the date of
the commencement of the Offer, the Company shall file with the Commission a
Solicitation/Recommendation Statement on Schedule 14d-9 with respect to the
Offer (such Schedule 14d-9, together with all amendments and supplements
thereto, "Schedule 14D-9") containing the recommendations of the Board of
Directors of the Company described in Section 3.2(b) and shall disseminate
the Schedule 14D-9 to the stockholders of the Company to the extent required
by Rule 14D-9 promulgated under the Exchange Act and any other applicable
federal or state securities laws. The Company shall cooperate with Merger
Subsidiary in mailing or otherwise disseminating the Schedule 14D-9 with the
appropriate Offer Documents to the Company's stockholders. Merger Subsidiary
and its counsel shall be given an opportunity to review and comment upon the
Schedule 14D-9 prior to the filing thereof with the Commission. The Schedule
14D-9 shall comply in all material respects with the requirements of the
Exchange Act. On the date filed with the Commission and on the date first
published, sent or given to the Company's stockholders, the Schedule 14D-9
shall not contain any untrue statement of a material fact or omit to state
any material fact
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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 Merger Subsidiary for inclusion in the Schedule
14D-9. The Company agrees to correct promptly any information provided by it
for use in the Schedule 14D-9 if and to the extent such information 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 to be disseminated to all of
the holders of Shares as and to the extent required by applicable federal
securities laws. Merger Subsidiary agrees to notify the Company promptly as
to any information provided by it for use in the Schedule 14D-9 if and to the
extent such information 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 to be
disseminated to all of the holders of Shares as and to the extent required by
applicable federal securities laws. The Company agrees to provide Merger
Subsidiary and its counsel in writing 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. The Company agrees to use
its reasonable efforts, after consultation with Merger Subsidiary, to respond
promptly to all such comments of and requests by the Commission. The Company
shall provide Merger Subsidiary copies of any written responses and
telephonic notification of any verbal responses by the Company and its
counsel.
(c) In connection with the Offer, the Company shall promptly,
or shall cause its transfer agent to promptly, furnish Merger Subsidiary with
mailing labels containing the names and addresses of the record holders of
Shares, each as of the most recent date together with copies of all lists of
stockholders and security position listings and all other information in the
Company's possession or control regarding the beneficial owners of Company
Common Stock, and shall furnish to Merger Subsidiary such information and
assistance (including updated lists of stockholders, security position
listings and computer files) as Merger Subsidiary 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 Offer and the Merger, Merger Subsidiary shall hold in
confidence the information contained in any of such labels, lists and files,
shall use such information only in connection with the Offer and the Merger,
and, if this Agreement is terminated in accordance with Section 9.1, shall
deliver to the Company all copies of such information then in its possession.
Section 1.4 BOARD OF DIRECTORS.
(a) Promptly upon the purchase of and payment for any Shares by
Merger Subsidiary which represent at least a majority of the outstanding
Shares, Merger Subsidiary shall be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors of
the Company as is equal to the product of the total number of directors on
such Board (giving effect to the directors designated by Parent pursuant to
this sentence) multiplied by the percentage that the aggregate number of
Shares beneficially owned by Merger Subsidiary bears to the total number of
Shares then outstanding. The Company shall, upon request of
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Merger Subsidiary, use its reasonable best efforts promptly either to
increase the size of its Board of Directors, including by amending the
By-laws of the Company if necessary to so increase the size of such Board of
Directors, or secure the resignations of such number of its incumbent
directors, or both, as is necessary to enable Merger Subsidiary's designees
to be so elected or appointed to the Company's Board of Directors, and shall
use its reasonable best efforts to cause Merger Subsidiary's designees to be
so elected or appointed at such time. At such time, the Company shall, upon
the request of Merger Subsidiary, also cause persons designated by Merger
Subsidiary to constitute the same percentage (rounded up to the next whole
number) as is on the Company's Board of Directors of (i) each committee of
the Company's Board of Directors, (ii) each board of directors (or similar
body) of each Subsidiary of the Company, and (iii) each committee (or similar
body) of each such board. The Company's obligations to appoint designees to
the Board of Directors shall be subject to Section 14(f) of the Exchange Act.
The Company shall take, at its expense, all action necessary to effect any
such election, and shall include in the Schedule 14D-9 the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder.
(b) Following the election or appointment of Merger
Subsidiary's designees pursuant to this Section 1.4 and prior to the
Effective Time, the approval of a majority of the directors of the Company
then in office who are not designated by Merger Subsidiary shall be required
to authorize any permitted termination of this Agreement by the Company, any
material amendment of this Agreement, any extension of time for the
performance of any of the obligations or other acts of Parent or Merger
Subsidiary, and any waiver of compliance with any of the agreements or
conditions contained herein for the benefit of the Company.
ARTICLE 1A
THE MERGER
Section 1A.1 THE MERGER.
(a) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company and
Merger Subsidiary will file articles of merger with the Secretary of State of
the State of Indiana and a certificate of merger with the Secretary of State
of the State of Delaware and make all other filings or recordings required by
the Business Corporation Act of the State of Indiana (the "Indiana Law") and
the General Corporation Law of the State of Delaware (the "Delaware Law") to
be made in connection with the Merger. The Merger shall become effective at
such time as the articles of merger is duly filed with the Secretary of State
of the State of Indiana and the certificate of merger is duly filed with the
Secretary of State of the State of Delaware or, if agreed to by the Company
and Parent, at such later time as is specified in the articles of merger (the
"Effective Time").
(b) At the Effective Time, Merger Subsidiary shall be merged
with and into the Company in accordance with the requirements of Indiana Law
and Delaware Law, whereupon the separate existence of Merger Subsidiary shall
cease, and the Company shall be the surviving corporation in the Merger (the
"Surviving Corporation").
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(c) From and after the Effective Time, the Surviving
Corporation shall possess all the rights, privileges, powers and franchises
and be subject to all of the restrictions, disabilities and duties of the
Company and Merger Subsidiary, all as provided under Indiana Law and Delaware
Law.
(d) The closing of the Merger (the "Closing") shall take place
(i) at the offices of XxXxxxxxx, Will & Xxxxx, 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, as soon as practicable, but in any event within
three business days, after the day on which the last to be fulfilled or
waived of the conditions set forth in Article 8 (other than those conditions
that by their nature are to be fulfilled at the Closing, but subject to the
fulfillment or waiver of such conditions) shall be fulfilled or waived in
accordance with this Agreement or (ii) at such other place and time or on
such other date as the Company and Parent may agree in writing (the "Closing
Date").
Section 1A.2 CONVERSION OF SHARES.
(a) At the Effective Time by virtue of the Merger and without
any action on the part of the holder thereof:
(i) each share of Company Common Stock held by the Company
as treasury stock or owned by Parent or any subsidiary of Parent or
the Company immediately prior to the Effective Time shall be canceled,
and no payment shall be made with respect thereto;
(ii) each share of common stock of Merger Subsidiary
outstanding immediately prior to the Effective Time shall be converted
into and become one share of common stock of the Surviving Corporation
with the same rights, powers and privileges as the shares so converted
and shall constitute the only outstanding shares of capital stock of
the Surviving Corporation; and
(iii) each share of Company Common Stock outstanding
immediately prior to the Effective Time shall, except as otherwise
provided in Section 1A.2(a)(i), be converted into the right to receive
$1.00 per share (the "Merger Consideration").
(b) From and after the Effective Time, all shares of Company
Common Stock converted in accordance with Section 1A.2(a)(iii) shall no
longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and each holder of a certificate representing any such
shares (a "Certificate") shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration. From and after the
Effective Time, all certificates representing the common stock of Merger
Subsidiary shall be deemed for all purposes to represent the number of shares
of common stock of the Surviving Corporation into which they were converted
in accordance with Section 1A.2(a)(ii).
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Section 1A.3 SURRENDER AND PAYMENT.
(a) Prior to the Effective Time, Parent shall appoint an
exchange agent reasonably acceptable to the Company (the "Exchange Agent")
for the purpose of exchanging Certificates for the Merger Consideration.
Parent will make available to the Exchange Agent, as needed, the Merger
Consideration to be delivered in respect of the shares of Company Common
Stock. Promptly after the Effective Time, Parent will send, or will cause the
Exchange Agent to send, to each holder of record of shares of Company Common
Stock as of the Effective Time, a letter of transmittal for use in such
exchange (which shall specify that the delivery shall be effected, and risk
of loss and title shall pass, only upon proper delivery of the Certificates
to the Exchange Agent) in such form as the Company and Parent may reasonably
agree, for use in effecting delivery of shares of Company Common Stock to the
Exchange Agent.
(b) Each holder of shares of Company Common Stock that have
been converted into a right to receive the Merger Consideration, upon
surrender to the Exchange Agent of a Certificate, together with a properly
completed letter of transmittal, will be entitled to receive the Merger
Consideration in respect of the shares of Company Common Stock represented by
such Certificate. Until so surrendered, each such Certificate shall, after
the Effective Time, represent for all purposes only the right to receive such
Merger Consideration. No interest will be paid or will accrue on the cash
payable upon surrender of any Certificate.
(c) If any portion of the Merger Consideration is to be paid to
any Person other than the Person in whose name the applicable surrendered
Certificate is registered, it shall be a condition to the payment of the
Merger Consideration that the surrendered Certificate shall be properly
endorsed or otherwise be in proper form for transfer and that the Person
requesting such delivery of the Merger Consideration shall pay to the
Exchange Agent any transfer or other taxes required as a result of such
payment to a Person other than the registered holder of such Certificate or
establish to the reasonable satisfaction of the Exchange Agent that such tax
has been paid or is not payable. For purposes of this Agreement, "Person"
means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or any agency or
instrumentality thereof.
(d) After the Effective Time, there shall be no further
registration of transfers of shares of Company Common Stock. If, after the
Effective Time, Certificates are presented to the Exchange Agent, the
Surviving Corporation or Parent, they shall be canceled and exchanged for the
Merger Consideration provided for, and in accordance with the procedures set
forth, in this Article 1A.
(e) Any portion of the Merger Consideration made available to
the Exchange Agent pursuant to Section 1A.3(a) that remains unclaimed by the
holders of shares of Company Common Stock one year after the Effective Time
shall be returned to Parent, upon demand, and any such holder who has not
exchanged his shares of Company Common Stock for the Merger Consideration in
accordance with this Section 1A.3 prior to that time shall thereafter look
only to Parent for delivery of the Merger Consideration in respect of such
holder's shares.
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Notwithstanding the foregoing, none of Parent, the Surviving Corporation or
the Exchange Agent shall be liable to any holder of shares for any Merger
Consideration delivered to a public official pursuant to applicable abandoned
property laws.
Section 1A.4 STOCK OPTIONS AND WARRANTS; RESTRICTED STOCK.
(a) At and after the Effective Time, any outstanding option to
purchase shares of Company Common Stock (each a "Company Stock Option") or
other stock-based awards of the Company granted under the Company's plans or
agreements pursuant to which stock options or restricted stock awards or
other stock-based awards of the Company have been or may be granted
(collectively, the "Company Stock Plans") and any outstanding warrant or
other right convertible or exchangeable into shares of capital stock of the
Company (each a "Company Warrant") will, in accordance with the terms of the
applicable Company Stock Plan or Company Warrant, by virtue of the Merger and
without any further action on the part of the Company, Parent, Merger
Subsidiary or the holder of any such Company Stock Option or Company Warrant,
be automatically converted into the right to receive an amount per share of
Company Common Stock into which such Company Stock Option (regardless of any
vesting schedule) or Company Warrant is exercisable or convertible equal to
(i) the Merger Consideration LESS (ii) any applicable exercise price or
conversion price with respect to such Company Stock Option or Company Warrant
as of the Effective Time. At the Effective Time, all outstanding Company
Stock Options shall be cancelled and all Company Stock Plans shall be
terminated and of no further force or effect.
(b) At and after the Effective Time, any outstanding restricted
stock awards of the Company (each a "Company Restricted Stock Award") granted
under any Company Stock Plan will, by virtue of the Merger and without any
further action on the part of the Company, Parent, Merger Subsidiary or the
holder of such Company Restricted Stock Award, entitle the holder thereof to
receive an amount per share of Company Common Stock covered by such
Restricted Stock Award equal to the Merger Consideration and all restrictions
under such awards shall lapse as of the Effective Time.
Section 1A.5 ADJUSTMENTS. If at any time during the period between
the date of this Agreement and the Effective Time, any change in the
outstanding shares of capital stock of the Company shall occur by reason of
any reclassification, recapitalization, stock split or combination, exchange
or readjustment of shares, any issuance of additional shares of capital stock
of the Company upon exercise of any Company Convertible Securities
outstanding on the date of this Agreement, or any similar transaction, or any
stock dividend thereon with a record date during such period, the Merger
Consideration shall be appropriately adjusted to provide the holders of
shares of Company Common Stock the same economic effect as contemplated by
this Agreement prior to such event.
Section 1A.6 WITHHOLDING RIGHTS. Each of the Surviving Corporation
and Parent shall be entitled to deduct and withhold from the consideration
otherwise payable to any Person pursuant to Article 1 or Article 1A such
amounts as it is required to deduct and withhold with respect to the making
of such payment under any provision of federal, state, local or foreign tax
8
law. To the extent that amounts are so withheld by the Surviving Corporation
or Parent, as the case may be, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Company Common Stock in respect of which such deduction and withholding was
made by the Surviving Corporation or Parent, as the case may be.
Section 1A.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 the Certificate to be lost, stolen or destroyed and, if
required by Parent or the Surviving Corporation, the posting by that Person
of a bond, in such reasonable amount as the Surviving Corporation may direct,
as indemnity against any claim that may be made against it with respect to
such Certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration to be paid in
respect of the Shares represented by such Certificates as contemplated by
this Article 1A.
Section 1A.8 DISSENTING COMPANY STOCKHOLDERS. Notwithstanding any
provision of this Agreement to the contrary, if required by Indiana Law, but
only to the extent required thereby, shares of Company Common Stock that are
issued and outstanding immediately prior to the Effective Time and which are
held by holders of such shares who have properly exercised appraisal rights
with respect thereto in accordance with Section 23-1-44-8 of Indiana Law (the
"Dissenting Shares") will not be exchangeable for the right to receive the
Merger Consideration. Each holder of such Dissenting Shares will be entitled
to receive payment of the appraised value of such Shares in accordance with
the provisions of such Section 23-1-44-8 unless and until such holder fails
to perfect or effectively waives, withdraws or loses his or her rights to
appraisal and payment under Indiana Law. If, after the Effective Time, any
such holder fails to perfect or effectively waives, withdraws or loses such
right, such shares will thereupon be treated as if they had been converted
into and to have become exchangeable for, at the Effective Time, the right to
receive the Merger Consideration, without any interest thereon. The Company
will give Parent prompt notice of any demands received by the Company for
appraisals of shares of Company Common Stock prior to the Effective Time and,
prior to the Effective Time, the Parent shall have the right to participate
in all negotiations and proceedings with respect to such demands. The Company
shall not, except with the prior written consent of Parent, voluntarily make
any payment with respect to any demands for appraisal or offer to settle or
settle any such demands.
ARTICLE 2
CERTAIN GOVERNANCE MATTERS
Section 2.1 ARTICLES OF INCORPORATION OF THE SURVIVING CORPORATION.
The certificate or articles of incorporation of the Company in effect at the
Effective Time shall be the articles of incorporation of the Surviving
Corporation (until amended in accordance with applicable law).
Section 2.2 BY-LAWS OF THE SURVIVING CORPORATION. The by-laws of the
Company in effect at the Effective Time shall be the by-laws of the Surviving
Corporation (until amended in accordance with applicable law).
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Section 2.3 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION.
From and after the Effective Time, until successors are duly elected or
appointed and qualified in accordance with applicable law, (a) the directors
of Merger Subsidiary at the Effective Time shall be the directors of the
Surviving Corporation and (b) the officers of the Company at the Effective
Time shall be the officers of the Surviving Corporation.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent that except as set
forth in the disclosure schedules relating to the sections of this Agreement
identified therein delivered by the Company to Parent simultaneously with the
execution of this Agreement (the "Company Disclosure Schedules"):
Section 3.1 CORPORATE EXISTENCE AND POWER. The Company is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Indiana, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted, except for those the absence of which
would not, individually or in the aggregate, have a Material Adverse Effect
on the Company. The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character
of the property owned or leased by it or the nature of its activities makes
such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not, individually or in the aggregate, have
a Material Adverse Effect on the Company. For purposes of this Agreement, a
"Material Adverse Effect" or "material adverse change" with respect to any
Person means any change, effect, event or occurrence that has a material
adverse impact on the financial condition, business, liabilities, properties,
assets, prospects or results of operations of such Person and its
Subsidiaries taken as a whole. The Company has heretofore made available to
Parent true and complete copies of the Company's articles of incorporation
and by-laws as currently in effect.
Section 3.2 CORPORATE AUTHORIZATION.
(a) The execution, delivery and performance by the Company of
this Agreement, other agreements contemplated hereby (the "Ancillary
Agreements") to which the Company is a party (the "Company Ancillary
Agreements") and the consummation by the Company of the transactions
contemplated hereby and thereby are within the Company's corporate powers
and, except for any required approval by the Company's stockholders in
accordance with Indiana Law (the "Company Stockholder Approval") in
connection with the consummation of the Merger, have been duly authorized by
all necessary corporate action. The affirmative vote of holders of the
outstanding shares of Company Common Stock having votes representing a
majority of the votes of all such outstanding capital stock, voting together
as a single class, in favor of the approval and adoption of this Agreement
and the Merger is the only vote of the holders of any of the Company's
capital stock necessary in connection with consummation of the Merger.
Assuming due authorization, execution and delivery of this Agreement and the
Ancillary Agreements to which Parent and/or Merger Subsidiary is a party (the
"Parent Ancillary
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Agreements") by Parent and Merger Subsidiary, as applicable, each of this
Agreement and the Company Ancillary Agreements constitutes a valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights, and to general
equity principles.
(b) The Company's Board of Directors, at a meeting duly called
and held, has (i) determined that this Agreement and the transactions
contemplated hereby (including the Offer and the Merger) are advisable, fair
to and in the best interests of the Company's stakeholders, including
stockholders, (ii) approved and adopted this Agreement and the transactions
contemplated hereby (including the Offer and the Merger), and (iii) resolved
to recommend that the Company stockholders accept the Offer and vote for the
approval and adoption of this Agreement and the Merger. The Company's Board
of Directors shall continue to recommend that the Company stockholders accept
the Offer and vote for the approval and adoption of this Agreement and the
Merger, subject to Section 7.9.
Section 3.3 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the Company of this Agreement, the Company Ancillary
Agreements and the consummation by the Company of the transactions
contemplated hereby and thereby require no action by or in respect of, or
filing by the Company with, any governmental body, agency, official or
authority other than (a) the filing of a certificate and/or articles of
merger in connection with the Merger in accordance with Indiana Law, Delaware
Law and applicable laws of any other state, (b) compliance with any
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder
(the "HSR Act"), (c) compliance with any applicable requirements of the
Exchange Act, (d) compliance with any applicable requirements of the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "Securities Act"), and (e) other actions or filings which if
not taken or made would not, individually or in the aggregate, have a
Material Adverse Effect on the Company or prevent or materially delay the
Company's consummation of the Merger.
Section 3.4 NON-CONTRAVENTION. The execution, delivery and
performance by the Company of this Agreement, the Company Ancillary
Agreements and the consummation by the Company of the transactions
contemplated hereby and thereby do not and will not (a) contravene or
conflict with the articles of incorporation or by-laws of the Company, (b)
assuming compliance with the matters referred to in Section 3.3 and subject
to receipt of the Company Stockholder Approval, contravene or conflict with
or constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to the Company or any
of its Subsidiaries, (c) subject to receipt of the Company Stockholder
Approval, constitute a default under or give rise to any right of
termination, cancellation or acceleration of any right or obligation of the
Company or any of its Subsidiaries or to a loss of any benefit to which the
Company or any of its Subsidiaries is entitled under any provision of any
agreement, contract or other instrument binding upon the Company or any of
its Subsidiaries or any license, franchise, permit or other similar
authorization held by the Company or any of its Subsidiaries, or (d) result
in the creation or imposition of any Lien on any asset of the Company or any
of its
11
Subsidiaries, except for such contraventions, conflicts or violations
referred to in clause (b) or defaults, rights of termination, cancellation or
acceleration, or losses or Liens referred to in clause (c) or (d) that would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company. For purposes of this Agreement, "Lien" means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset other than any such mortgage, lien,
pledge, charge, security interest or encumbrance (i) for Taxes (as defined in
Section 3.13) not yet due or (ii) which is a carriers', warehousemen's,
mechanics', materialmen's, repairmen's or other like lien arising in the
ordinary course of business. Neither the Company nor any Subsidiary of the
Company is a party to any agreement that expressly limits the ability of the
Company or any Subsidiary of the Company to compete in or conduct any line of
business or compete with any Person or in any geographic area or during any
period of time.
Section 3.5 CAPITALIZATION. The authorized capital stock of the
Company consists of 25,600,000 shares, consisting of 25,000,000 shares of
Company Common Stock and 600,000 shares of Preferred Stock, par value $1.00
per share. As of the close of business on June 23, 2000, there were
outstanding 5,788,569 shares of Company Common Stock and no other shares of
capital stock or other voting securities of the Company were then
outstanding. All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable.
Except for (i) Company Stock Options to acquire no more than 1,230,500 shares
of Company Common Stock issued pursuant to the Company Stock Plans, and (ii)
Company Warrants to acquire no more than 100,000 shares of Company Common
Stock, there are no outstanding options, warrants or other rights to acquire
from the Company, and no preemptive or similar rights, subscription or other
rights, convertible or exchangeable securities, agreements, arrangements or
commitments of any character, relating to the capital stock of the Company,
obligating the Company to issue, transfer or sell, any capital stock, voting
securities or securities convertible into or exchangeable for capital stock
or voting securities of the Company or obligating the Company to grant,
extend or enter into any such option, warrant, subscription or other right,
convertible or exchangeable security, agreement, arrangement or commitment
(each of the foregoing, a "Company Convertible Security"). Schedule 3.5 sets
forth a list of all Company Stock Options and Company Warrants listing the
holder, the number of shares of Company Common Stock into which such Company
Stock Options or Company Warrants are exercisable or convertible, and the
exercise price. Since the close of business on June 23, 2000, the Company has
not issued any shares of capital stock or any Company Convertible Securities
other than the issuance of Company Common Stock in connection with the
exercise of the Company Stock Options described above. There are no
outstanding obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company or any Company Convertible Securities.
Section 3.6 SUBSIDIARIES.
(a) Each Subsidiary of the Company is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, has all powers and all governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted,
except for those the absence of which would not, individually or in the
aggregate,
12
reasonably be expected to have a Material Adverse Effect on the Company. For
purposes of this Agreement, the word "Subsidiary" when used with respect to
any Person means any other Person, whether incorporated or unincorporated, of
which (i) more than fifty percent of the securities or other ownership
interests or (ii) securities or other interests having by their terms
ordinary voting power to elect more than fifty percent of the board of
directors or others performing similar functions with respect to such
corporation or other organization, is directly owned or controlled by such
Person or by any one or more of its Subsidiaries. Each Subsidiary of the
Company is duly qualified to do business and is in good standing in each
jurisdiction where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary, except for those
jurisdictions where failure to be so qualified would not, individually or in
the aggregate, have a Material Adverse Effect on the Company.
(b) All of the outstanding capital stock of, or other ownership
interests in, each Subsidiary of the Company is, directly or indirectly,
owned by the Company. All shares of capital stock of, or other ownership
interests in, Subsidiaries of the Company, directly or indirectly, owned by
the Company are owned free and clear of any Lien and free of any other
limitation or restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other ownership
interests). There are no outstanding options, warrants or other rights to
acquire from the Company or any of its Subsidiaries, and, except as may be
required by applicable foreign corporate laws, no preemptive or similar
rights, subscriptions or other rights, convertible or exchangeable
securities, agreements, arrangements or commitments of any character,
relating to, the capital stock of any Subsidiary of the Company, obligating
the Company or any of its Subsidiaries to issue, transfer or sell, any
capital stock, voting securities or other ownership interests in, or any
securities convertible into or exchangeable for any capital stock, voting
securities or ownership interests in, any Subsidiary of the Company or
obligating the Company or any Subsidiary of the Company to grant, extend or
enter into any such option, warrant, subscription or other right, convertible
or exchangeable security, agreement, arrangement or commitment (each of the
foregoing, a "Company Subsidiary Convertible Security"). There are no
outstanding obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire from any Person (other than the
Company or a wholly owned Subsidiary of the Company) any outstanding shares
of capital stock of any Subsidiary of the Company or any Company Subsidiary
Convertible Securities.
Section 3.7 COMMISSION FILINGS.
(a) The Company has made available to Parent (i) its annual
reports on Form 10-K for its fiscal years ended September 30, 1997, 1998 and
1999, (ii) its quarterly reports on Form 10-Q for its fiscal quarters ended
after September 30, 1999, (iii) its proxy or information statements relating
to meetings of, or actions taken without a meeting by, the stockholders of
the Company held since September 30, 1999, and (iv) all of its other reports,
statements, schedules and registration statements filed with the Commission
since September 30, 1999 (the documents referred to in this Section 3.7(a)
and such items filed after the date of this Agreement being referred to
collectively as the "Company Commission Documents"). The Company's quarterly
report on Form 10-Q for its fiscal quarter ended March 31, 2000 is referred
to as the "Company 10-Q".
13
(b) As of its filing date, each Company Commission Document
complied as to form in all material respects with the applicable requirements
of the Exchange Act and the Securities Act.
(c) As of its filing date, each Company Commission Document
filed pursuant to the Exchange Act did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
(d) Each registration statement, as amended or supplemented, if
applicable, filed by the Company pursuant to the Securities Act since
September 30, 1999, as of the date such statement or amendment became
effective did not contain any 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 not misleading.
Section 3.8 FINANCIAL STATEMENTS. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company (including any related notes and schedules) included in its annual
reports on Form 10-K and the quarterly reports on Form 10-Q referred to in
Section 3.7 present fairly, in all material respects, the financial position
of the Company and its Subsidiaries as of the dates thereof and their results
of operations and cash flows for the periods then ended (subject to normal
year-end adjustments and the absence of notes in the case of any unaudited
interim financial statements), in each case in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis (except
as may be indicated in the notes thereto). For purposes of this Agreement,
"Company Balance Sheet" means the consolidated balance sheet of the Company
as of March 31, 2000 set forth in the Company 10-Q and "Company Balance Sheet
Date" means March 31, 2000.
Section 3.9 DISCLOSURE DOCUMENTS. Neither (i) the proxy statement or
information statement of the Company (the "Company Proxy Statement") to be
filed with the Commission in connection with the Merger, nor (ii) any
amendment or supplement thereto, will, at the date the Company Proxy
Statement or any such amendment or supplement is first mailed to stockholders
of the Company or at the time such stockholders vote on the adoption and
approval of this Agreement and the transactions contemplated hereby, contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company Proxy
Statement will, when filed, comply as to form in all material respects with
the requirements of the Exchange Act. No representation or warranty is made
by the Company in this Section 3.9 with respect to statements made or
incorporated by reference therein based on information supplied by Parent or
Merger Subsidiary for inclusion or incorporation by reference in the Company
Proxy Statement.
Section 3.10 ABSENCE OF CERTAIN CHANGES. Since the Company Balance
Sheet Date, the Company and its Subsidiaries have conducted their respective
businesses in the ordinary course, consistent with past practice, and there
has not been:
14
(a) any event, occurrence or development which, individually or
in the aggregate, would have, or reasonably be expected to have, a Material
Adverse Effect on the Company;
(b) any declaration, setting aside or payment of any dividend
or other distribution with respect to any shares of capital stock of the
Company, or any repurchase, redemption or other acquisition by the Company or
any of its Subsidiaries of any outstanding shares of their capital stock or
any Company Convertible Securities or Company Subsidiary Convertible
Securities;
(c) any amendment of any material term of any outstanding
security of the Company or any of its Subsidiaries;
(d) any transaction or commitment made, or any contract,
agreement or settlement entered into, by (or judgment, order or decree
affecting) the Company or any of its Subsidiaries relating to its assets or
business (including the acquisition or disposition of any material amount of
assets) or any relinquishment by the Company or any of its Subsidiaries of
any contract or other right, in either case, material to the Company and its
Subsidiaries taken as a whole, other than transactions, commitments,
contracts, agreements or settlements (including without limitation
settlements of litigation and tax proceedings) in the ordinary course of
business consistent with past practice and those contemplated by this
Agreement;
(e) any change in any method of accounting or accounting
practice by the Company or any of its Subsidiaries, except for any such
change which is required by reason of a concurrent change in GAAP;
(f) any (i) grant of any severance or termination pay to (or
amendment to any such existing arrangement with) any director, officer or
employee of the Company or any of its Subsidiaries, (ii) entering into of any
employment, deferred compensation, supplemental retirement or other similar
agreement (or any amendment to any such existing agreement) with any
director, officer or employee of the Company or any of its Subsidiaries,
(iii) increase in, or accelerated vesting and/or payment of, benefits under
any existing severance or termination pay policies or employment agreements
or (iv) increase in or enhancement of any rights or features related to
compensation, bonus or other benefits payable to directors, officers or
employees of the Company or any of its Subsidiaries, in each case, other than
in the ordinary course of business consistent with past practice;
(g) any material Tax election made or changed, any material
audit settled or any material amended Tax Returns filed; or
(h) any action which, if taken during the period from the date
of this Agreement through the Effective Time, would constitute a breach of
Section 5.1.
Section 3.11 NO UNDISCLOSED LIABILITIES. There are no liabilities of
the Company or any Subsidiary of the Company of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, other
than:
15
(a) liabilities disclosed or provided for in the Company
Balance Sheet or in the notes thereto or otherwise taken into account in the
calculation of the Merger Consideration;
(b) liabilities incurred since the date of the Company Balance
Sheet in the ordinary course of business; and
(c) obligations under this Agreement and filing fees and
advisor fees and expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement.
Section 3.12 LITIGATION. There is no action, suit, proceeding or
known investigation pending against, or to the knowledge of the Company
threatened against or affecting, the Company or any of its Subsidiaries or
any of their respective properties or any of their respective officers or
directors before any court or arbitrator or any governmental body, agency or
official except as would not, individually or in the aggregate, have a
Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Merger. Neither the Company nor any Subsidiary is subject
to any outstanding order, writ, injunction or decree.
Section 3.13 TAXES.
(a) Except as provided for in the Company Balance Sheet
(including the notes thereto), (i) all Company Tax Returns required to be
filed with any taxing authority by, or with respect to, the Company and its
Subsidiaries have been filed in accordance with all applicable laws; (ii) the
Company and its Subsidiaries have timely paid all Taxes shown as due and
payable on the Company Tax Returns that have been so filed, and, as of the
time of filing, the Company Tax Returns correctly reflected the facts
regarding the income, business, assets, operations, activities and the status
of the Company and its Subsidiaries (other than Taxes which are being
contested in good faith and for which adequate reserves are reflected on the
Company Balance Sheet); (iii) the charges, accruals and reserves for Taxes
with respect to the Company and its Subsidiaries reflected on the Company
Balance Sheet are adequate under GAAP to cover the Tax liabilities accruing
through the date thereof; (iv) there is no action, suit, proceeding, audit or
claim now proposed or pending against or with respect to the Company or any
of its Subsidiaries in respect of any Tax where there is a reasonable
possibility of an adverse determination; (v) to the best of the Company's
knowledge and belief, neither the Company nor any of its Subsidiaries is
liable for any Tax imposed on any entity other than such Person, except as
the result of the application of Treas. Reg. Sections 1.1502-6 (and any
comparable provision of the tax laws of any state, local or foreign
jurisdiction) to the affiliated group of which the Company is the common
parent, and (vi) no deficiency for any Tax has been asserted or assessed by a
taxing authority against the Company or any of its Subsidiaries which
deficiency has not been paid (other than deficiencies which are being
contested in good faith and for which adequate reserves are reflected on the
Company Balance Sheet). For purposes of this Agreement, "Taxes" shall mean
any and all taxes, charges, fees, levies or other assessments, including,
without limitation, all net income, gross income, gross receipts, excise,
stamp, real or personal property, AD VALOREM, withholding, social security
(or similar), unemployment, occupation, use, production, service, service
use, license, net worth, payroll, franchise, severance, transfer, recording,
employment,
16
premium, windfall profits, environmental (including taxes under Section 59A
of the Code), customs duties, capital stock, profits, disability, sales,
registration, value added, alternative or add-on minimum, estimated or other
taxes, assessments or charges imposed by any federal, state, local or foreign
governmental entity and any interest, penalties, or additions to tax
attributable thereto. For purposes of this Agreement, "Tax Returns" shall
mean any return, report, form or similar statement required to be filed with
respect to any Tax (including any attached schedules), including, without
limitation, any information return, claim for refund, amended return or
declaration of estimated Tax.
(b) Neither the Company nor any of its Subsidiaries have been
requested in writing to give any currently effective waivers extending the
statutory period of limitation applicable to any federal or state income tax
return for any period.
(c) There are no Tax liens upon any property or assets of the
Company or any of its Subsidiaries except liens for current Taxes not yet due.
Section 3.14 EMPLOYEE BENEFIT PLANS.
(a) For purposes of this Agreement, the term "Company Employee
Plans" shall mean and include: each management, consulting, non-compete,
employment, severance or similar contract, plan, including, without
limitation, all Company Stock Plans, arrangement or policy applicable to any
director, former director, employee or former employee of the Company and
each plan, program, policy, agreement or arrangement (written or oral),
providing for compensation, bonuses, profit-sharing, stock option or other
stock related rights or other forms of incentive or deferred compensation,
vacation benefits, insurance coverage (including any self-insured
arrangements), health or medical benefits, disability benefits, workers'
compensation, supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits (including compensation, pension,
health, medical or life insurance benefits) or other employee benefits of any
kind, whether funded or unfunded, which is maintained, administered or
contributed to by the Company or any Subsidiary and covers any employee or
director or former employee or director of the Company or any Subsidiary, or
under which the Company has any liability, contingent or otherwise (including
but not limited to each "employee benefit plan," as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")). The Disclosure Schedule sets forth a list of each Company
Employee Plan.
(b) Each Company Employee Plan has been established and
maintained in material compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations (including
but not limited to ERISA and the Code) which are applicable to such Plan. No
Company Employee Plan is a "multiemployer plan," as defined in Section 3(37)
of ERISA.
(c) Neither the Company nor any affiliate of the Company has
incurred a liability under Title IV of ERISA that has not been satisfied in
full, and no condition exists that presents a material risk to the Company or
any affiliate of the Company of incurring any such liability. All
contributions required to be made under the terms of any Company Employee
Plan maintained in the United States have been made, and, where applicable to
a Company Employee Plan, the
17
Company and its affiliates have complied with the minimum funding
requirements under Section 412 of the Code and Section 302 of ERISA with
respect to each such Company Employee Plan.
(d) With respect to each Company Employee Plan which is subject
to Title IV of ERISA, (i) the present value of accrued benefits under such
Company Employee Plan, based upon the actuarial assumptions used for funding
purposes in the most recent actuarial report prepared by such Company
Employee Plan's actuary with respect to such Company Employee Plan, did not,
as of its latest valuation date, exceed the then current value of the assets
of such Company Employee Plan allocable to such accrued benefits, (ii) no
"reportable event" (within the meaning of Section 4043 of ERISA) has occurred
with respect to any Company Employee Plan for which the 30-day notice
requirement has not been waived, and (iii) no condition exists which would
subject the Company or any Company Subsidiary to any fine under Section 4071
of ERISA.
(e) Each Company Employee Plan which is intended to be
qualified under Section 401(a) of the Code is so qualified and has been so
qualified during the period from its adoption to date, and each trust forming
a part thereof is exempt from federal income tax pursuant to Section 501(a)
of the Code and, to the Company's knowledge, no circumstances exist which
will adversely affect such qualification or exemption.
(f) No director or officer or other employee of the Company or
any of its Subsidiaries will become entitled to any retirement, severance or
similar benefit or enhanced or accelerated benefit (including any
acceleration of vesting or lapse of repurchase rights or obligations with
respect to any Company Stock Plans or other benefit under any compensation
plan or arrangement of the Company) solely as a result of the transactions
contemplated hereby; and no payment made or to be made to any current or
former employee or director of the Company or any of its affiliates by reason
of the transactions contemplated hereby (whether alone or in connection with
any other event) will constitute an "excess parachute payment" within the
meaning of Section 280G of the Code.
(g) Since the Company Balance Sheet Date, there has been no
amendment to, or change in employee participation or coverage under, any
Company Employee Plan which would materially increase the expense of
maintaining such Company Employee Plan above the level of the expense
incurred in respect thereof for the 12 months ended on the Company Balance
Sheet Date.
(h) The Company and its Subsidiaries are in material compliance
with all applicable federal, state, local and foreign statutes, laws,
(including without limitation, common law), judicial decisions, regulations,
ordinances, rules, judgments, orders and codes respecting employment,
employment practices, labor, terms and conditions of employment and wages and
hours, and no work stoppage or labor strike against the Company and its
Subsidiaries are pending or, to the knowledge of the Company, threatened, nor
are the Company and its Subsidiaries involved in or, to the knowledge of the
Company, threatened with any labor dispute, grievance (other than ordinary,
immaterial individual grievances), or litigation relating to labor matters
involving any employees. There are no suits, actions, disputes, claims
18
(other than routine claims for benefits), known investigations or audits
pending or, to the knowledge of the Company, threatened in connection with
any Company Employee Plan.
(i) The Company Stock Plans allow for the treatment of Company
Options as provided in Section 1A.4.
Section 3.15 COMPLIANCE WITH LAWS. Neither the Company nor any of
its Subsidiaries is in violation of, or has violated, any applicable
provisions of any laws, statutes, ordinances or regulations except for any
violations that, individually or in the aggregate, would not have a Material
Adverse Effect on the Company.
Section 3.16 FINDERS' OR ADVISORS' FEES. Other than USBancorp Xxxxx
Xxxxxxx (a copy of whose engagement letter has been delivered to Parent),
there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of the Company or any of
its Subsidiaries who might be entitled to any fee or commission in connection
with the transactions contemplated by this Agreement.
Section 3.17 ENVIRONMENTAL MATTERS.
(a) The Company and its Subsidiaries (i) are in material
compliance with all, and are not subject to any material liability with
respect to, any Environmental Laws (as defined below), (ii) hold or have
applied for all Environmental Permits (as defined below) and (iii) are in
compliance with their respective Environmental Permits, except where the
failure to have applied for or be in compliance with any such Environmental
Permit would not, individually or in the aggregate, have a Material Adverse
Effect on the Company.
(b) Neither the Company nor any of its Subsidiaries has
received any written notice, demand, letter, claim or request for information
alleging that the Company or any of its Subsidiaries may be in violation of,
or liable under, any Environmental Law.
(c) Neither the Company nor any of its Subsidiaries (i) has
entered into or agreed to any consent decree or order or is subject to any
judgment, decree or judicial order relating to compliance with Environmental
Laws, Environmental Permits or the investigation, sampling, monitoring,
treatment, remediation, removal or cleanup of Hazardous Materials (as defined
below) and, no litigation, other proceeding or known investigation is pending
or, to the knowledge of the Company, threatened with respect thereto, or (ii)
is an indemnitor in connection with any threatened or asserted claim by any
third-party indemnitee for any liability under any Environmental Law or
relating to any Hazardous Materials; and
(d) None of the real property owned or leased by the Company or
any Company Subsidiary is listed or, to the knowledge of the Company,
proposed for listing on the "National Priorities List" under CERCLA, as
updated through the date hereof, or any similar state or foreign list of
sites requiring investigation or cleanup.
19
(e) For purposes of this Agreement:
(i) "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
(ii) "Environmental Laws" means any federal, state, local or
foreign statute, law, ordinance, regulation, rule, code, treaty, writ
or order and any enforceable judicial or administrative interpretation
thereof, including any judicial or administrative order, consent
decree, judgment, stipulation, injunction, permit, authorization,
policy, opinion, or agency requirement, in each case having the force
and effect of law, relating to the pollution, protection, investigation
or restoration of the environment, health and safety or natural
resources, including, without limitation, those relating to the use,
handling, presence, transportation, treatment, storage, disposal,
release, threatened release or discharge of Hazardous Materials or
noise, odor, wetlands, pollution, contamination or any injury or threat
of injury to persons or property.
(iii) "Environmental Permits" means any permit, approval,
identification number, license and other authorization required under
any applicable Environmental Law.
(iv) "Hazardous Materials" means (a) any petroleum, petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls or (b) any
chemical, material or other substance defined or regulated as toxic or
hazardous or as a pollutant or contaminant or waste under any
applicable Environmental Law.
Section 3.18 PERMITS. Each of the Company and its Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals,
clearances and orders of any domestic or foreign governmental, administrative
or judicial authority necessary for the Company or any of its Subsidiaries to
own, lease and operate its properties or to carry on their respective
businesses in the manner as they are now being conducted (the "Company
Permits"), and all such Company Permits are valid, and in full force and
effect, except where the invalidity or failure to be in full force and
effect, or the failure to have any of the Company Permits, would neither,
individually or in the aggregate, (a) have a Material Adverse Effect on the
Company nor (b) prevent or materially delay the performance of this Agreement
by the Company. No suspension or cancellation of any of the Company Permits
is pending or, to the knowledge of the Company, threatened, except where the
failure to have, or the suspension or cancellation of, any of the Company
Permits would neither, individually or in the aggregate, (a) have a Company
Material Adverse Effect on the Company nor (b) prevent or materially delay
the performance of this Agreement by the Company.
Section 3.19 MATERIAL CONTRACTS.
(a) The Company Disclosure Schedules set forth a complete and
correct list of all agreements of the following types to which the Company or
any of its Subsidiaries is a party or
20
may be bound (collectively, the "Material Contracts"): (i) employment,
severance, termination, consulting and retirement agreements that are not
terminable "at will"; (ii) agreements which involve future payments by the
Company of more than $50,000 or which are not cancelable without penalty by
the Company in less than 60 days, (iii) royalty and licensing agreements of
the Company acting as a licensor; (iv) agreements with any labor organization
or other collective bargaining unit; (v) agreements for the purchase, sale or
lease of any real estate; (vi) agreements for the sale of assets material to
the operation of the Company's business other than in the ordinary course of
business or the grant of any preferential rights to purchase any such
material assets; (vii) agreements which contain provisions requiring the
Company or any Subsidiary to indemnify any person not entered into in the
ordinary course of business consistent with past practice; (viii) joint
venture agreements or other agreements involving the sharing of profits; (ix)
agreements (including, without limitation, agreements not to compete and
exclusivity agreements) that reasonably could be interpreted to impose any
restriction on any business operations of the Company or the Company
Subsidiaries, except for agreements containing restrictions that would not
have a the Material Adverse Effect on the Company; or (x) any other
agreements that are material to the conduct of the business of the Company
and its Subsidiaries.
(b) All the Material Contracts are valid and in full force and
effect on the date hereof (except to the extent they have previously expired
in accordance with their terms) and constitute legal, valid and binding
obligations of, and are legally enforceable against, the Company or any of
its Subsidiaries which is a party thereto, and to the knowledge of the
Company, the other party or respective parties thereto. To the knowledge of
the Company, there have been no threatened cancellations thereof and no
outstanding disputes thereunder, except such that would not have a the
Material Adverse Effect on the Company. Each of the Company and its
Subsidiaries has in all material respects performed all the obligations under
the Material Contracts required to be performed by the Company and its
Subsidiaries to date. The Company is not in default, and to the Company's
knowledge, no party is in default, in any material respect under any of the
Material Contracts, and there has not occurred any event which (whether with
or without notice, lapse of time or the happening or occurrence of any other
event) would constitute such a default, except for defaults which would not
in the aggregate reasonably be expected to have a Material Adverse Effect.
True and complete copies of all Material Contracts have been delivered to
Parent or made available for inspection.
Section 3.20 OPINION OF FINANCIAL ADVISOR. The Company has received
the opinion of USBancorp Xxxxx Xxxxxxx to the effect that, as of the date of
its opinion, the Offer Price and the Merger Consideration are fair from a
financial point of view to the holders of shares of Company Common Stock.
Section 3.21 TAX TREATMENT. [Intentionally Omitted.]
Section 3.22 TAKEOVER STATUTES AND CHARTER PROVISIONS. The Board of
Directors of the Company has taken the necessary action to render control share
acquisitions provisions and business combinations provisions of Indiana Law, and
any other potentially applicable anti-takeover or similar statute or regulation
inapplicable to this Agreement and the transactions contemplated hereby.
21
Section 3.23 INTELLECTUAL PROPERTY MATTERS.
(a) The Company and its Subsidiaries own, free and clear of all
Liens, or have the right to use pursuant to valid license, sublicense,
agreement or permission all items of Intellectual Property (as defined in
Section 3.23(b)) necessary for their operations as presently conducted. The
conduct of the Company's and its Subsidiaries' businesses as currently
conducted does not interfere with, infringe upon, misappropriate or violate
any of the Intellectual Property rights of any third party which would result
in a Material Adverse Effect on the Company. To the best of the Company's
knowledge and belief, no third party has interfered with, infringed upon,
misappropriated, diluted, violated or otherwise come into conflict with any
Intellectual Property rights of the Company or any of its Subsidiaries which
would result in a Material Adverse Effect on the Company.
(b) The term "Intellectual Property" as used in this Agreement
means, collectively, patents, trademarks, service marks, trade dress, logos,
trade names, Internet domain names, designs, slogans and general intangibles
of like nature, copyrights and all registrations, applications, reissuances,
continuations, continuations-in-part, revisions, extensions, reexaminations
and associated good will with respect to each of the foregoing, computer
software (including source and object codes), computer programs, computer
data bases and related documentation and materials, data, documentation,
technology, trade secrets, confidential business information (including
ideas, formulae, algorithms, models, methodologies, compositions, know-how,
manufacturing and production processes and techniques, research and
development information, drawings, designs, plans, proposals and technical
data, financial, marketing and business data and pricing and cost
information) and other intellectual property rights (in whatever form or
medium).
Section 3.24 INSURANCE. The Company maintains insurance coverage
with reputable insurers in such amounts and covering such risks as are in
accordance with normal industry practice for companies engaged in businesses
similar to that of the Company, except where the failure to maintain such
insurance would not be reasonably expected to have a Material Adverse Effect
on the Company.
Section 3.25 TITLE TO ASSETS; LIENS. The Company and each of its
Subsidiaries has good and marketable title in fee simple to all its real
property and good title to all its leasehold interests and other properties,
as reflected in the Company Balance Sheet, except for properties and assets
that have been disposed of in the ordinary course of business since the date
of such balance sheet, free and clear of all mortgages, liens, pledges,
charges or encumbrances of any nature whatsoever, except (i) liens for
current taxes, payments of which are not yet delinquent, (ii) such
imperfections in title and easements and encumbrances, if any, as are not
substantial in character, amount or extent and do not materially detract from
the value, or interfere with the present use of the property subject thereto
or affected thereby, or otherwise materially impair the Company's business
operations or (iii) as disclosed in the Company Commission Documents, and
except for such matters, which individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company (any
of the foregoing, a "Permitted Lien"). All leases under which the Company
leases any real or personal property are in good
22
standing, valid and effective in accordance with their respective terms, and
there is not, under any of such leases, any existing default or event which
with notice or lapse of time or both would become a default by the Company
or, to the Company's knowledge, any other party thereto, which would
reasonably be expected to have a Material Adverse Effect on the Company. The
Company Disclosure Schedule sets forth all liens and security interests
granted by the Company or any of its Subsidiaries to third parties, except
for Permitted Liens.
Section 3.26 OFFER DOCUMENTS. None of the Schedule 14D-9, the
information statement, if any, filed by the Company in connection with the
Offer pursuant to Rule 14f-1 under the Exchange Act (the "Information
Statement"), any schedule required to be filed by the Company with the
Commission or any amendment or supplement thereto, at the respective times
such documents are filed with the Commission or first published, sent or
given to the Company's stockholders, will contain any untrue statement of a
material fact or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading except that no
representation is made by the Company with respect to information supplied by
the Parent or Merger Subsidiary specifically for inclusion in the Schedule
14D-9 or Information Statement or any amendment or supplement. None of the
information supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Offer Documents, at the time such documents
are filed with the Commission, or first published, sent or given to the
Company's stockholders, will 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. If at any time prior to the Effective
Time the Company shall obtain knowledge of any facts with respect to itself,
any of its officers and directors or any of its Subsidiaries that would
require the supplement or amendment to the Schedule 14D-9 or the information
supplied by the Company for inclusion or incorporation by reference in the
Offer Documents in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or to comply with
applicable laws, such amendment or supplement shall be promptly filed with
the Commission and, as required by applicable law, disseminated to the
stockholders of the Company, and in the event Parent shall advise the Company
as to its obtaining knowledge of any facts that would make it necessary to
supplement or amend any of the foregoing documents, the Company shall
promptly amend or supplement such document as required and distribute the
same to its stockholders.
Section 3.27 MATERIAL INFORMATION. No representations or warranties
by the Company in this Agreement and no statements or information contained
in the Company Disclosure Schedule, or in any certificate furnished or to be
furnished by the Company to Parent pursuant to the provisions of this
Agreement, contain or will contain any untrue statement of a material fact or
omit or will omit to state any material fact necessary, in light of the
circumstances under which it was made, in order to make the statements herein
or therein not misleading.
23
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company that except as set
forth in the disclosure schedules delivered by Parent to the Company
simultaneously with the execution of this Agreement (the "Parent Disclosure
Schedules"):
Section 4.1 CORPORATE EXISTENCE AND POWER. Each of Parent and Merger
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
corporate powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted, except for
those the absence of which would not, individually or in the aggregate, have
a Material Adverse Effect on Parent. Since the date of its incorporation,
Merger Subsidiary has not engaged in any activities other than in connection
with or as contemplated by this Agreement.
Section 4.2 CORPORATE AUTHORIZATION. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, the Parent
Ancillary Agreements and the consummation by Parent and Merger Subsidiary of
the transactions contemplated hereby and thereby are within the corporate
powers of Parent and Merger Subsidiary and have been duly authorized by all
necessary corporate action. Assuming due authorization, execution and
delivery of this Agreement by the Company, each of this Agreement and the
Parent Ancillary Agreements constitutes a valid and binding agreement of each
of Parent and Merger Subsidiary, in each case enforceable against such party
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
Section 4.3 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, the Parent
Ancillary Agreements and the consummation by Parent and Merger Subsidiary of
the transactions contemplated hereby and thereby require no action by or in
respect of, or filing by Parent or Merger Subsidiary with, any governmental
body, agency, official or authority other than (a) the filing of a
certificate and/or articles of merger in connection with the Merger in
accordance with Indiana Law, Delaware Law and applicable laws of any other
state, (b) compliance with any applicable requirements of the HSR Act, (c)
compliance with any applicable requirements of the Exchange Act, (d)
compliance with any applicable requirements of the Securities Act, and (e)
other actions or filings which if not taken or made would not, individually
or in the aggregate, have a Material Adverse Effect on Parent or prevent or
materially delay Parent's and/or Merger Subsidiary's consummation of the
Merger.
Section 4.4 NON-CONTRAVENTION. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, the Parent
Ancillary Agreements and the consummation by Parent and Merger Subsidiary of
the transactions contemplated hereby and thereby do not and will not (a)
contravene or conflict with the articles of incorporation or certificate of
incorporation, as the case may be, or by-laws of Parent or Merger Subsidiary,
(b) assuming compliance with the matters referred to in Section 4.3,
contravene or conflict with
24
or constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to Parent or any of
its Subsidiaries, (c) constitute a default under or give rise to any right of
termination, cancellation or acceleration of any right or obligation of
Parent or any of its Subsidiaries or to a loss of any benefit to which Parent
or any of its Subsidiaries is entitled under any provision of any agreement,
contract or other instrument binding upon Parent or any of its Subsidiaries
or any license, franchise, permit or other similar authorization held by
Parent or any of its Subsidiaries or (d) result in the creation or imposition
of any Lien on any asset of Parent or any of its Subsidiaries, except for
such contraventions, conflicts or violations referred to in clause (b) or
defaults, rights of termination, cancellation or acceleration, or losses or
Liens referred to in clause (c) or (d) that would not, individually or in the
aggregate, have a Material Adverse Effect on Parent.
Section 4.5 DISCLOSURE DOCUMENTS. None of the information supplied
or to be supplied by Parent for inclusion or incorporation by reference in
the Proxy Statement or any amendment or supplement thereto will, at the date
the Proxy Statement or any amendment or supplement thereto is first mailed to
the stockholders of the Company or at the time the stockholders vote on the
adoption and approval of this Agreement and the transactions contemplated
hereby, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Section 4.6 FINDERS' OR ADVISORS' FEES. There is no investment
banker, broker, finder or other intermediary which has been retained by or is
authorized to act on behalf of Parent or any of its Subsidiaries who might be
entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.
Section 4.7 OFFER DOCUMENTS. None of the Offer Documents or any
amendment or supplement thereto, at the respective times such documents are
filed with the Commission or first published, sent or given to the Company's
stockholders, will contain any untrue statement of a material fact or will
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading except that no representation is made by
the Parent or Merger Subsidiary with respect to information supplied by the
Company specifically for inclusion in the Offer Documents or any amendment or
supplement. None of the information supplied or to be supplied by Parent or
Merger Subsidiary for inclusion or incorporation by reference in the Schedule
14D-9 or Information Statement will, at the time such documents are filed
with the Commission or distributed to the Company's stockholders, contain any
untrue statements of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. If
at any time prior to the Effective Time the Parent or Merger Subsidiary shall
obtain knowledge of any facts with respect to itself, any of its officers and
directors or any of its Subsidiaries that would require the supplement or
amendment to the Offer Documents or the information supplied by Parent or
Merger Subsidiary for inclusion or incorporation by reference in the Schedule
14D-9 or Information Statement in order to make the statements therein, in
the light of the circumstances under which they are made, not misleading, or
to comply with
25
applicable laws, such amendment or supplement shall be promptly filed with
the Commission and, as required by applicable laws, disseminated to the
stockholders of the Company, and in the event the Company shall advise Parent
or Merger Subsidiary as to its obtaining knowledge of any facts that would
make it necessary to supplement or amend any of the foregoing documents,
Parent or Merger Subsidiary shall promptly amend or supplement such document
as required and distribute the same to the Company's stockholders.
Section 4.8 MATERIAL INFORMATION. No representations or warranties
by Parent in this Agreement and no statements or information contained in the
Parent Disclosure Schedule, or in any certificate furnished or to be
furnished by Parent to the Company pursuant to the provisions of this
Agreement, contain or will contain any untrue statement of a material fact or
omit or will omit to state any material fact necessary, in light of the
circumstances under which it was made, in order to make the statements herein
or therein not misleading.
Section 4.9 FUNDING. Parent and Merger Subsidiary have, or will have
made available to them from their affiliates, all funds necessary to
consummate the Offer and the Merger and to pay their related fees and
expenses.
ARTICLE 5
COVENANTS OF THE COMPANY
The Company agrees that:
Section 5.1. CONDUCT OF THE COMPANY. From the date of this Agreement
until the Effective Time, the Company and its Subsidiaries shall conduct
their business in the ordinary course consistent with past practice and shall
use their reasonable best efforts to preserve intact their business
organizations and relationships with third parties. Without limiting the
generality of the foregoing, from the date of this Agreement until the
Effective Time without the prior written consent of Parent:
(a) the Company will not, and will not permit any of its
Subsidiaries to, adopt or propose any change in its certificate or
articles of incorporation or by-laws;
(b) the Company will not, and will not permit any
Subsidiary of the Company to, adopt a plan or agreement of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or any of its
Subsidiaries (other than transactions between direct and/or indirect
wholly owned Subsidiaries of the Company);
(c) the Company will not, and will not permit any
Subsidiary of the Company to, issue, sell, transfer, pledge, dispose
of or encumber any shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights
of any kind to acquire, any shares of capital stock of any class or
series of the Company or any of its Subsidiaries other than issuances
of
26
Company Common Stock pursuant to the exercise of Company Stock Options
that are outstanding on the date of this Agreement;
(d) the Company will not (i) split, combine, subdivide or
reclassify its outstanding shares of capital stock, or (ii) declare,
set aside or pay any dividend or other distribution payable in cash,
stock or property with respect to its capital stock;
(e) the Company will not, and will not permit any
Subsidiary of the Company to, redeem, purchase or otherwise acquire
directly or indirectly any of the Company's capital stock, Company
Convertible Securities or Company Subsidiary Convertible Securities,
except for repurchases, redemptions or acquisitions required by or in
connection with the terms of any Company Stock Plan;
(f) the Company will not amend the terms (including
the terms relating to accelerating the vesting or lapse of
repurchase rights or obligations) of any employee or director stock
options or other stock based awards or any warrants;
(g) the Company will not, and will not permit any
Subsidiary of the Company to, (i) grant any severance or termination
pay to (or amend any such existing arrangement with) any director,
officer or employee of the Company or any of its Subsidiaries, (ii)
enter into any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any
director, officer or employee of the Company or any of its
Subsidiaries, (iii) increase any benefits payable under any existing
severance or termination pay policies or employment agreements, (iv)
increase, other than customary periodic increases in the ordinary
course of business, (or amend the terms of) any compensation, bonus
or other benefits payable to directors, officers or employees of the
Company or any of its Subsidiaries or (v) permit any director,
officer or employee who is not already a party to an agreement or a
participant in a plan providing benefits upon or following a "change
in control" to become a party to any such agreement or a participant
in any such plan;
(h) the Company will not, and will not permit any of
its Subsidiaries to, acquire a material amount of assets or property
of any other Person, other than the purchase of inventory in the
ordinary course of business;
(i) the Company will not, and will not permit any of
its Subsidiaries to, sell, lease, license or otherwise dispose of
any material amount of assets or property except pursuant to
existing contracts or commitments or otherwise in the ordinary
course of business;
(j) except for any such change which is required by
reason of a concurrent change in GAAP, the Company will not, and
will not permit any
27
Subsidiary of the Company to, change any method of accounting or
accounting practice used by it;
(k) the Company will not, and will not permit any
Subsidiary of the Company to, enter into any joint venture,
partnership or other similar arrangement;
(l) the Company will not, and will not permit any of
its Subsidiaries to, take any action that would make any
representation or warranty of the Company hereunder inaccurate in
any material respect at, or as of any time prior to, the Effective
Time;
(m) the Company will not make or change any Tax
election, settle any audit or file any amended Tax Returns, except
in the ordinary course of business consistent with past practice; and
(n) the Company will not, and will not permit any of
its Subsidiaries to, agree or commit to do any of the foregoing.
ARTICLE 6
COVENANTS OF PARENT
Parent agrees that:
Section 6.1. OBLIGATIONS OF MERGER SUBSIDIARY. Parent will take all
action necessary to cause Merger Subsidiary to perform its obligations under
this Agreement and to consummate the Merger on the terms and conditions set
forth in this Agreement.
Section 6.2 DIRECTOR AND OFFICER LIABILITY.
(a) Parent will maintain in effect for not less than six years
after the Effective Time, the Company's current directors and officers
insurance policies, if such insurance is obtainable (or policies of at least
the same coverage containing terms and conditions no less advantageous to the
current and all former directors and officers of the Company) with respect to
acts or failures to act prior to the Effective Time; provided, however, that
in order to maintain or procure such coverage, Parent shall not be required
to maintain or obtain policies providing such coverage except to the extent
such coverage can be provided at an annual cost of no greater than 150% of
the most recent annual premium paid by the Company prior to the date hereof
(the "Cap"); and provided, further, that if equivalent coverage cannot be
obtained, or can be obtained only by paying an annual premium in excess of
the Cap, Parent shall only be required to obtain as much coverage as can be
obtained by paying an annual premium equal to the Cap.
(b) Parent agrees that all rights to indemnification for acts
or omissions occurring prior to the Effective Time now existing in favor of
the current or former directors or officers of the Company and its
Subsidiaries (the "Indemnified Parties") as provided in their respective
28
articles of incorporation or by-laws (or similar organizational documents)
shall survive the Effective Time and shall continue in full force and effect
in accordance with their respective terms. The provisions of this Section 6.2
are intended to be for the benefit of, and shall be enforceable by, each of
the Indemnified Parties, their heirs and their representatives.
ARTICLE 7
ADDITIONAL AGREEMENTS
Section 7.1. PROXY STATEMENT.
(a) If approval or action in respect of the Merger by the
stockholders of the Company is required by applicable law, the Company shall
prepare and file with the Commission the Company Proxy Statement. Each of
Parent and the Company shall furnish all information concerning it and the
holders of its capital stock as the other may reasonably request in
connection with such actions and the preparation of the Proxy Statement. As
promptly as practicable after the purchase of Shares by Merger Subsidiary
pursuant to the Offer, the Company shall mail the Proxy Statement to its
stockholders. The Proxy Statement shall include the recommendation of the
Board of Directors of the Company in favor of the Merger, unless otherwise
required by the applicable fiduciary duties of the directors of the Company,
as determined by such directors in good faith after consultation with
independent legal counsel. No modification or withdrawal of such
recommendation shall relieve the Company of its obligation to submit this
Agreement and the transactions contemplated hereby to its stockholders in
accordance with applicable law.
No amendment or supplement to the Proxy Statement will be made by
Parent or the Company without the approval of the other party (which approval
shall not be unreasonably withheld or delayed). Parent and the Company each
will advise the other, promptly after it receives notice thereof, of any
request by the Commission for amendment of the Proxy Statement or comments
thereon and responses thereto or requests by the Commission for additional
information.
(b) The information supplied by Parent for inclusion in the
Proxy Statement shall not, at, (i) the time the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to the stockholders
of the Company, (ii) the time of the Company Meeting (as defined below), and
(iii) the Effective Time, 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 the light of the circumstances under
which they are made, not misleading. If at any time prior to the Effective
Time any event or circumstance relating to Parent or any of its Subsidiaries,
or their respective officers or directors, should be discovered by Parent
which should be set forth in an amendment or a supplement to the Proxy
Statement, Parent shall promptly inform the Company. All documents that the
Company is responsible for filing with the Commission in connection with the
transactions contemplated herein will comply as to form and substance in all
material aspects with the applicable requirements of the Securities Act and
the rules and regulations thereunder and the Exchange Act and the rules and
regulations thereunder.
29
(c) The information supplied by the Company for inclusion in
the Proxy Statement shall not, at (i) the time the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to the stockholders
of the Company, (ii) the time of the Company Meeting, and (iii) the Effective
Time, 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 the light of the circumstances under which they are
made, not misleading. If at any time prior to the Effective Time any event or
circumstance relating to the Company or any of its Subsidiaries, or their
respective officers or directors, should be discovered by the Company which
should be set forth in an amendment or a supplement to the Proxy Statement,
the Company shall promptly inform Parent. All documents that Parent is
responsible for filing with the Commission in connection with the
transactions contemplated herein will comply as to form and substance in all
material respects with the applicable requirements of the Securities Act and
the rules and regulations thereunder and the Exchange Act and the rules and
regulations thereunder.
Section 7.2. STOCKHOLDERS' MEETING. Unless stockholder action is
taken by written consent, the Company shall call and hold a meeting of its
stockholders (the "Company Meeting") as promptly as practicable following the
purchase of Shares by Merger Subsidiary pursuant to the Offer for the purpose
of voting upon the approval of the Merger, and the Company shall use its
reasonable best efforts to hold the Company Meeting as soon as practicable
after such date. The Company shall set the record date for the Company
Meeting or any action taken by written consent for the approval of the Merger
as the date on which Merger Subsidiary becomes the record holder of all
Shares purchased pursuant to the Offer. Parent shall cause all Shares
purchased by Merger Subsidiary pursuant to the Offer and all other Shares
owned by Parent or any other Subsidiary or affiliate of Parent to be voted in
favor of the approval of the Merger.
Section 7.3. REASONABLE BEST EFFORTS. The Company and Parent shall
each cooperate with the other and use (and shall cause their respective
Subsidiaries to use) their respective reasonable best efforts to promptly (i)
take or cause to be taken all necessary actions, and do or cause to be done
all things, necessary, proper or advisable under this Agreement and
applicable laws to consummate and make effective the Offer and the Merger and
the other transactions contemplated by this Agreement as soon as practicable,
including, without limitation, preparing and filing promptly and fully all
documentation to effect all necessary filings, notices, petitions,
statements, registrations, submissions of information, applications and other
documents and (ii) obtain all approvals, consents, registrations, permits,
authorizations and other confirmations required to be obtained from any third
party necessary, proper or advisable to consummate the Offer and the Merger
and the other transactions contemplated by this Agreement. Subject to
applicable laws relating to the exchange of information, the Company and
Parent shall have the right to review in advance, and to the extent
practicable each will consult the other on, all the information relating to
the Company and its Subsidiaries or Parent and its Subsidiaries, as the case
may be, that appears in any filing made with, or written materials submitted
to, any third party and/or any governmental authority in connection with the
Offer and the Merger and the other transactions contemplated by this
Agreement.
Section 7.4. CERTAIN FILINGS. The Company and Parent shall cooperate
with one another (a) in connection with the preparation of the Company Proxy
Statement, (b) in
30
determining whether any action by or in respect of, or filing with, any
governmental body, agency or official, or authority is required, or any
actions, consents, approvals or waivers are required to be obtained from
parties to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (c) in seeking any such
actions, consents, approvals or waivers or making any such filings,
furnishing information required in connection therewith or with the Company
Proxy Statement and seeking timely to obtain any such actions, consents,
approvals or waivers.
Section 7.5. ACCESS TO INFORMATION. From the date hereof until the
Effective Time, to the extent permitted by applicable law, the Company will
upon reasonable request give Parent, its counsel, financial advisors,
auditors and other authorized representatives access to the offices,
properties, books and records of the Company and its Subsidiaries during
normal business hours, furnish to Parent, its counsel, financial advisors,
auditors and other authorized representatives such financial and operating
data and other information as such Persons may reasonably request and will
instruct its own employees, counsel and financial advisors to cooperate with
Parent in its investigation of the business of the Company; PROVIDED that no
investigation of the Company's business shall affect any representation or
warranty given by the Company hereunder, and the Company shall not be
required to provide any such information if the provision of such information
may cause a waiver of an attorney-client privilege. All information obtained
by Parent or the Company pursuant to this Section 7.5 shall be kept
confidential in accordance with, and shall otherwise be subject to the terms
of, the Confidentiality Agreement dated February 18, 2000 between Parent and
the Company (the "Confidentiality Agreement").
Section 7.6. PUBLIC ANNOUNCEMENTS. Parent and the Company will
consult with each other before issuing any press release or making any public
statement with respect to this Agreement and the transactions contemplated
hereby and shall not issue any press release or make any public statement
without the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, any such
press release or public statement as may be required by applicable law or any
agreement with the American Stock Exchange may be issued prior to such
consultation, if the party making the release or statement has used its
reasonable efforts to consult with the other party.
Section 7.7. FURTHER ASSURANCES. At and after the Effective Time,
the officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Merger
Subsidiary, any deeds, bills of sale, assignments or assurances and to take
any other actions and do any other things, in the name and on behalf of the
Company or Merger Subsidiary, reasonably necessary to vest, perfect or
confirm of record or otherwise in the Surviving Corporation any and all
right, title and interest in, to and under any of the rights, properties or
assets of the Company acquired or to be acquired by the Surviving Corporation
as a result of, or in connection with, the Merger.
Section 7.8. NOTICES OF CERTAIN EVENTS.
(a) Each of the Company and Parent shall promptly notify the
other party of:
31
(i) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement; and
(ii) any notice or other communication from any
governmental or regulatory agency or authority in connection with
the transactions contemplated by this Agreement.
(b) The Company and Parent shall promptly notify the other
party of any actions, suits, claims, investigations or proceedings commenced
or, to the best of its knowledge threatened against, relating to or involving
or otherwise affecting such party or any of its Subsidiaries which relate to
the consummation of the transactions contemplated by this Agreement.
Section 7.9. NO SOLICITATION.
(a) The Company and its Subsidiaries will not, and will use its
reasonable best efforts to cause its respective officers, directors,
employees, investment bankers, consultants, attorneys, accountants, agents
and other representatives not to, directly or indirectly, take any action to
solicit, initiate, encourage or facilitate the making of any Acquisition
Proposal or any inquiry with respect thereto or engage in substantive
discussions or negotiations with any Person with respect thereto, or in
connection with any Acquisition Proposal or potential Acquisition Proposal,
disclose any nonpublic information relating to it or its Subsidiaries or
afford access to the properties, books or records of it or its Subsidiaries
to, any Person that has made, or to such party's knowledge, is considering
making, any Acquisition Proposal; PROVIDED, HOWEVER, that, in the event that
(X) the Company shall receive a Superior Proposal that was not solicited by
it and did not otherwise result from a breach of this Section 7.9, (Y) prior
to receipt of Company Stockholder Approval, the Board of Directors of the
Company determines in its good faith judgment, after receiving the advice of
outside counsel, that, in light of this Superior Proposal, if the Company
fails to participate in such discussions or negotiations with, or provide
such information to, the party making the Superior Proposal, there is a
reasonable possibility that such Board of Directors would be in violation of
its fiduciary duties under applicable law, and (Z) after giving Parent three
business day's notice of its intention to do so, the Company may (i) furnish
information with respect to it and its subsidiaries to the Person making such
Superior Proposal pursuant to a customary confidentiality agreement
containing terms generally no less restrictive than the terms contained in
the Confidentiality Agreement (but not containing any exclusivity provision
and permitting the Person to submit to the Board of Directors of the Company
Acquisition Proposals with respect to the Company provided that any such
Acquisition Proposal is subject to the approval of the Board of Directors of
the Company) provided that a copy of all such written information is
simultaneously provided to Parent and (ii) participate in discussions and
negotiations regarding such Superior Proposal.
(b) Nothing contained in this Agreement shall prevent the Board
of Directors of the Company from complying with Rule 14e-2 under the Exchange
Act with regard to an Acquisition Proposal; PROVIDED that the Board of
Directors of the Company shall not recommend
32
that the stockholders of the Company tender their shares in connection with a
tender offer except to the extent, after receiving a Superior Proposal, the
Board of Directors of the Company determines in its good faith judgment,
after receiving the advice of outside legal counsel, that, in light of the
Superior Proposal, there is a reasonable possibility that the Board of
Directors would be in violation of its fiduciary duties under applicable law
if it fails to make such a recommendation.
(c) The Company will (A) promptly (and in no event later than
48 hours after receipt of any Acquisition Proposal) notify (which notice
shall be provided orally and in writing and shall identify the Person making
the Acquisition Proposal and set forth the material terms thereof) the Parent
after receipt of any Acquisition Proposal, or any request for nonpublic
information relating to the Company or any Subsidiary of the Company or for
access to the properties, books or records of the Company or any Subsidiary
of the Company by any Person that has made, or to such party's knowledge may
be considering making, an Acquisition Proposal, and (B) will keep the Parent
reasonably informed of any changes to the material terms of any such
Acquisition Proposal or request. The Company shall, and shall cause its
Subsidiaries to, immediately cease and cause to be terminated, and use
reasonable best efforts to cause its officers, directors, employees,
investment bankers, consultants, attorneys, accountants, agents and other
representatives to, immediately cease and cause to be terminated, all
discussions and negotiations, if any, that have taken place prior to the date
hereof with any Persons with respect to any Acquisition Proposal.
For purposes of this Agreement, "Acquisition Proposal" means any
written offer or proposal for, or any written indication of interest in, any
(i) direct or indirect acquisition or purchase of a business or asset of the
Company or any of its Subsidiaries that constitutes 20% or more of the net
revenues, net income or assets of the Company and its Subsidiaries, taken as
a whole; (ii) direct or indirect acquisition or purchase of 20% or more of
any class of equity securities of the Company or any of its Subsidiaries
whose business constitutes 20% or more of the net revenues, net income or
assets of the Company and its Subsidiaries, taken as a whole; (iii) tender
offer or exchange offer that, if consummated, would result in any Person
beneficially owning 20% or more of any class of equity securities of the
Company or any of its Subsidiaries whose business constitutes 20% or more the
net revenues, net income or assets of the Company and its Subsidiaries, taken
as a whole; or (iv) merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
the Company or any of its Subsidiaries whose business constitutes 20% or more
of the net revenue, net income or assets of the Company and its Subsidiaries,
taken as a whole, other than the transactions contemplated by this Agreement.
For purposes of this Agreement, "Superior Proposal" means any bona fide
written Acquisition Proposal for or in respect of all of the outstanding
shares of Company Common Stock (i) on terms that the Board of Directors of
the Company determines in its good faith judgment (after consultation with
USBancorp Xxxxx Xxxxxxx or another financial advisor of nationally recognized
reputation and taking into account all the terms and conditions of the
Acquisition Proposal deemed relevant by such Board of Directors, including
any break-up fees, expense reimbursement provisions, conditions to
consummation, and the ability of the party making such proposal to obtain
financing for such Acquisition Proposal) are more favorable from a financial
point of view to its stockholders than the Merger; and (ii) that constitutes a
33
transaction that, in such Board of Directors' judgment, is reasonably likely
to be consummated on the terms set forth, taking into account all legal,
financial, regulatory and other aspects of such proposal.
(d) The Company agrees that it will take the necessary steps
promptly to inform its officers, directors, investment bankers, consultants,
attorneys, accountants, agents and other representatives of the obligations
undertaken in this Section 7.9.
Section 7.10. TAKEOVER STATUTES. If any anti-takeover or similar
statute or regulation is or may become applicable to the transactions
contemplated hereby, each of the parties and its Board of Directors shall
grant such approvals and take all such actions as are reasonable and legally
permissible so that the transactions contemplated hereby may be consummated
as promptly as practicable on the terms contemplated hereby and otherwise act
to eliminate or minimize the effects of any such statute or regulation on the
transactions contemplated hereby.
ARTICLE 8
CONDITIONS TO THE MERGER
Section 8.1. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The
obligations of the Company, Parent and Merger Subsidiary to consummate the
Merger are subject to the satisfaction (or, to the extent legally
permissible, waiver) of the following conditions:
(a) this Agreement and the Merger shall have been approved and
adopted by the stockholders of the Company in accordance with Indiana Law and
the Company shall have complied with the information and notice requirements
of Rule 14c-2 of the Exchange Act, if applicable;
(b) any applicable waiting period (including any extension
thereof) under the HSR Act relating to the Merger shall have expired or been
terminated;
(c) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit or enjoin the
consummation of the Merger;
(d) (i) all required approvals or consents of any governmental
authority (whether domestic, foreign or supranational) in connection with the
Merger and the consummation of the other transactions contemplated hereby
shall have been obtained (and all relevant statutory, regulatory or other
governmental waiting periods, whether domestic, foreign or supranational,
shall have expired) unless the failure to receive any such approval or
consent would not, and would not be reasonably expected to, have a Material
Adverse Effect on Parent at or after the Effective Time and (ii) all such
approvals and consents which have been obtained shall be on terms that would
not, and would not reasonably be expected to, have a Material Adverse Effect
on Parent at or after the Effective Time.
34
Section 8.2. CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER
SUBSIDIARY. The obligations of Parent and Merger Subsidiary to consummate the
Merger are subject to the satisfaction (or, to the extent legally
permissible, waiver) of the following further conditions:
(a) (i) the Company shall have performed in all material
respects all of its obligations hereunder required to be performed by it at
or prior to the Effective Time, (ii) the representations and warranties of
the Company contained in this Agreement and in any certificate or other
writing delivered by the Company pursuant hereto shall be true and correct in
all material respects at and as of the Effective Time as if made at and as of
such time (except to the extent expressly made as of an earlier date, in
which case as of such earlier date), and (iii) Parent shall have received a
certificate signed by an executive officer of the Company to the foregoing
effect;
(b) there shall not be instituted or pending any action or
proceeding by any governmental authority (whether domestic, foreign or
supranational) before any court or governmental authority or agency,
domestic, foreign or supranational, seeking to (i) restrain, prohibit or
otherwise interfere with the ownership or operation by Parent or any
Subsidiary of Parent of all or any portion of the business of the Company or
any of its Subsidiaries or of Parent or any of its Subsidiaries or to compel
Parent or any Subsidiary of Parent to dispose of or hold separate all or any
portion of the business or assets of the Company or any of its Subsidiaries
or of Parent or any of its Subsidiaries; (ii) to impose or confirm
limitations on the ability of Parent or any Subsidiary of Parent effectively
to exercise full rights of ownership of the shares of Company Common Stock
(or shares of stock of the Surviving Corporation) including, without
limitation, the right to vote any shares of Company Common Stock (or shares
of stock of the Surviving Corporation) on any matters properly presented to
stockholders; or (iii) seeking to require divestiture by Parent or any
Subsidiary of Parent of any shares of Company Common Stock (or shares of
stock of the Surviving Corporation), if any such matter referred in
subclauses (i), (ii) and (iii) would, or would reasonably be expected to,
have a Material Adverse Effect on Parent at or after the Effective Time;
(c) there shall not be any statute, rule, regulation,
injunction, order or decree, enacted, enforced, promulgated, entered, issued
or deemed applicable to the Merger and the other transactions contemplated
hereby (or in the case of any statute, rule or regulation, awaiting signature
or reasonably expected to become law), by any court, government or
governmental authority or agency or legislative body, domestic, foreign or
supranational, that would, or would reasonably be expected to, have a
Material Adverse Effect on Parent at or after the Effective Time;
(d) since the date of this Agreement, there shall not have
occurred a Material Adverse Effect with respect to the Company, nor shall
there have occurred a change or event which would reasonably be expected to
have a Material Adverse Effect on the Company;
(e) the consent and waiver of Foothill Capital Corporation
("Foothill") with respect to the Offer and the Merger and the termination of
the Company Warrant issued to Foothill shall have been obtained (the
"Foothill Consent");
35
(f) there shall not have been a subsequent development
(including any settlement or final settlement offer from counsel for the
plaintiffs) in any action or proceeding pending on the date of this Agreement
relating to the Company or any of its Subsidiaries or there shall not have
been instituted any action or proceeding subsequent to the date of this
Agreement that would (i) have a Material Adverse Effect on the Company, or
(ii) make materially more costly (A) the making of the Offer, (B) the
acceptance for payment of, or payment for, some or all of the shares pursuant
to the Offer, (C) the purchase of shares pursuant to the Offer, or (D) the
consummation of the Merger; or
(g) the Company shall not have (i) petitioned or applied to any
tribunal for or consented to the appointment of a receiver, (ii) admitted in
writing its inability to pay its debts as they mature, (iii) made an
assignment for the benefit of creditors, (iv) been adjudicated bankrupt or
insolvent, (v) filed voluntarily or had filed against it a petition in
bankruptcy or a petition or an answer seeking reorganization or any
arrangement with creditors or to take advantage of any bankruptcy,
reorganization, insolvency, dissolution or liquidation law or statute, or
(vi) become unable to conduct its business, taken as a whole, substantially
as currently conducted (including the purchase of inventory and supplies and
the payment of liabilities).
Section 8.3. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligation of the Company to consummate the Merger is subject to the
satisfaction (or, to the extent legally permissible, waiver) of the following
further conditions:
(a) (i) Each of Parent and Merger Subsidiary shall have
performed in all material respects all of its obligations hereunder required
to be performed by it at or prior to the Effective Time, (ii) the
representations and warranties of Parent and Merger Subsidiary contained in
this Agreement and in any certificate or other writing delivered by Parent or
Merger Subsidiary pursuant hereto shall be true and correct in all material
respects at and as of the Effective Time as if made at and as of such time
(except to the extent expressly made as of an earlier date, in which case as
of such earlier date, and (iii) the Company shall have received a certificate
signed by an executive officer of Parent to the foregoing effect;
(b) there shall not be any statute, rule, regulation,
injunction, order or decree, enacted, enforced, promulgated, entered, issued
or deemed applicable to the Merger and the other transactions contemplated
hereby (or in the case of any statute, rule or regulation, awaiting signature
or reasonably expected to become law), by any court, government or
governmental authority or agency or legislative body, domestic, foreign or
supranational, that would, or would reasonably be expected to, have a
Material Adverse Effect on the business of the Surviving Corporation at or
after the Effective Time; and
(c) the Foothill Consent shall have been obtained.
36
ARTICLE 9
TERMINATION
Section 9.1. TERMINATION. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after approval of this
Agreement and the Merger by the stockholders of the Company and Parent:
(a) by mutual consent of Parent and the Company;
(b) (i) by Parent (provided that Parent is not then in material
breach of any representation, warranty, covenant or other agreement contained
herein), if there has been a breach by the Company of any of its
representations, warranties, covenants or agreements contained in this
Agreement in any material respect, or any such representation and warranty
shall have become untrue, in any such case such that Section 8.2(a) will not
be satisfied and such breach or condition has not been promptly cured within
30 days following receipt by the Company of written notice of such breach;
(ii) by the Company (provided that the Company is not then
in material breach of any representation, warranty, covenant or other
agreement contained herein), if there has been a breach by Parent of any of
its representations, warranties, covenants or agreements contained in this
Agreement in any material respect, or any such representation and warranty
shall have become untrue, in any such case such that Section 8.3(a) will not
be satisfied and such breach or condition has not been promptly cured within
30 days following receipt by Parent of written notice of such breach;
(c) by either Parent or the Company if any decree, permanent
injunction, judgment, order or other action by any court of competent
jurisdiction or any Governmental Entity preventing or prohibiting
consummation of the Offer or the Merger shall have become final and
nonappealable;
(d) by either Parent or the Company if (i) the Offer shall not
have been consummated before October 23, 2000 or (ii) the Merger shall not
have been consummated before December 22, 2000, unless the failure of the
Closing to occur by such date shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe in all material
respects the covenants and agreements of such party set forth herein;
PROVIDED, HOWEVER, that this Agreement may be extended not more than 60 days
by Parent or the Company by written notice to the other party if the Merger
shall not have been consummated as a direct result of (i) the Company or
Parent having failed to receive all regulatory approvals or consents required
to be obtained by the Company or Parent with respect to the Offer or Merger
or (ii) the existence of litigation or any governmental proceeding seeking to
prevent or prohibit consummation of the Offer or the Merger; PROVIDED
FURTHER, that this Agreement may be extended up to 90 days by Parent (and the
Company agrees to such extension), in its sole discretion, in the event the
Foothill Consent shall not have been obtained prior to the dates set forth in
this Section 9.1(d); PROVIDED FURTHER, that the Company may not terminate
this Agreement due to the failure to obtain the Foothill Consent prior to the
expiration of the period referred to in the immediately preceeding proviso.
37
(e) by the Company if it determines to accept a Superior
Proposal; provided that such termination under clause (e) shall not be
effective unless the Company gives notice to the Parent at least three
business day prior to acceptance of a Superior Proposal and shall not be
effective until the Company has delivered the Company Breakup Fee pursuant to
Section 9.2(b). The Company shall not accept a Superior Proposal unless it
terminates this Agreement.
(f) by Parent, if the Board of Directors of the Company shall
have failed to recommend or withdrawn or modified or changed in a manner
adverse to Parent its approval or recommendation of this Agreement, the Offer
or the Merger, whether or not permitted by the terms hereof, or shall have
failed to call the Company Stockholder Meeting, or shall have recommended a
Superior Proposal (or the Board of Directors of the Company shall resolve to
do any of the foregoing);
(g) by Parent if the Agreement shall fail to receive the
requisite vote for approval and adoption by the stockholders of the Company
at the Company's Stockholder Meeting or any adjournment or postponement
thereof (except in connection with a breach by Parent of its covenants under
this Agreement).
(h) by the Company if the Agreement shall fail to receive the
requisite vote for approval and adoption by the stockholders of the Company
at the Company's Stockholder Meeting or any adjournment or postponement
thereof (except in connection with a breach by the Company of its covenants
under this Agreement).
(i) by Parent if Parent or Merger Subsidiary, as the case may
be, shall have terminated the Offer, or the Offer shall have expired, without
Parent or Merger Subsidiary, as the case may be, purchasing any shares of
Company Common Stock thereunder.
Section 9.2. EFFECT OF TERMINATION.
(a) In the event of the termination of this Agreement by either
the Company or Parent pursuant to Section 9.1, this Agreement shall forthwith
become void, there shall be no liability under this Agreement on the part of
Parent or the Company, other than the provisions of this Section 9.2, Section
9.3 the confidentiality provisions hereof, and except to the extent that such
termination results from the willful and material breach by a party of any of
its representations, warranties, covenants or agreements set forth in this
Agreement.
(b) In the event of termination of this Agreement without
consummation of the transactions contemplated hereby by the Company pursuant
to Section 9.1(e) then the Company shall make payment to Parent
simultaneously therewith by wire transfer of immediately available funds of a
breakup fee in the amount of $1,250,000 (the "Company Breakup Fee") plus all
expenses incurred by Parent in connection with the transactions contemplated
hereby (which expenses shall not exceed $500,000 in the aggregate).
(c) If (i) this Agreement is terminated without consummation of
the transactions contemplated in this Agreement by the Company pursuant to
Section 9.1(h) and (ii) at the time of the vote on the Merger by the
stockholders of the Company, an unsolicited Acquisition Proposal
38
shall have been proposed, then the Company shall immediately make payment of
the Company Breakup Fee plus all expenses incurred by Parent in connection
with the transactions contemplated hereby (which expenses shall not exceed
$500,000 in the aggregate) to the Parent by wire transfer of immediately
available funds upon consummation of a Acquisition Proposal if such
Acquisition Proposal is consummated within twelve (12) months from the time
of the vote of the stockholders of the Company on the Merger and such
consummated Acquisition Proposal is with the party (or an affiliate of the
party) which had proposed an unsolicited Acquisition Proposal which was
received by the Company prior to the Company's stockholders' vote on the
Merger.
Section 9.3. FEES AND EXPENSES. All expenses incurred by the parties
hereto shall be borne solely and entirely by the party which has incurred the
same. The Company shall pay the expenses related to printing, filing and
mailing of the Proxy Statement.
ARTICLE 10
MISCELLANEOUS
Section 10.1. NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including
facsimile or similar writing) and shall be given,
if to Parent or Merger Subsidiary, to:
Heico Holding, Inc.
0000 Xxxxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, P.C.
Facsimile No.: (000) 000-0000
if to the Company, to:
National-Standard Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxx
Facsimile No.: (000) 000-0000
39
with a copy to:
Xxxx, Xxxx & Xxxxx, LLC
Three First Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties. Each such notice, request or
other communication shall be effective (a) if given by facsimile, when such
facsimile is transmitted to the facsimile number specified in this Section
and the appropriate facsimile confirmation is received or (b) if given by any
other means, when delivered at the address specified in this Section.
Section 10.2. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained herein and in any certificate or
other writing delivered pursuant hereto shall not survive the Effective Time.
Section 10.3. AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement (including the Exhibits and
Schedules hereto) may be amended or waived prior to the Effective Time at any
time prior to or after the receipt of the Company Stockholder Approval, if,
and only if, such amendment or waiver is in writing and signed, in the case
of an amendment, by the Company, Parent and Merger Subsidiary, or in the case
of a waiver, by the party against whom the waiver is to be effective;
PROVIDED that after the receipt of any such approval, if any such amendment
or waiver shall by law or in accordance with the rules and regulations of the
Amex requires further approval of stockholders, the effectiveness of such
amendment or waiver shall be subject to the necessary stockholder approval.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
Section 10.4. SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns; PROVIDED that no party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the consent of the other parties hereto except
that Merger Subsidiary may transfer or assign, in whole or from time to time
in part, to one or more of its affiliates, its rights under this Agreement,
but any such transfer or assignment will not relieve Merger Subsidiary of its
obligations hereunder.
Section 10.5. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the law of the State of Indiana, without
regard to principles of conflicts of law.
40
Section 10.6. JURISDICTION. Any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement, or the transactions contemplated hereby or
thereby may be brought in any federal or state court located in the State of
Indiana or Illinois, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 10.1 shall be deemed effective
service of process on such party.
Section 10.7. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement shall become effective when each party hereto
shall have received counterparts hereof signed by all of the other parties
hereto.
Section 10.8. ENTIRE AGREEMENT. This Agreement (including the
Exhibits and Schedules) constitutes the entire agreement between the parties
with respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, between the parties
with respect to the subject matter hereof and thereof. No provision of this
Agreement or any other agreement contemplated hereby is intended to confer on
any Person other than the parties hereto any rights or remedies.
Section 10.9. CAPTIONS. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 10.10. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such a determination, the parties shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
Section 10.11. NO PREJUDICE. This Agreement has been jointly
prepared by the parties hereto and the terms hereof shall not be construed in
favor of or against any party on account of its participation in such
preparation.
Section 10.12. WORDS IN SINGULAR AND PLURAL FORM; GENDER. Words used
in the singular form in this Agreement shall be deemed to import the plural,
and vice versa, as the sense may require and words importing one gender shall
include the other two.
41
* * *
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
NATIONAL STANDARD COMPANY
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President & CEO
HEICO HOLDING, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Secretary
NS ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Secretary
43
EXHIBIT A
CONDITIONS TO THE OFFER
Notwithstanding any other term of the Offer or this Agreement,
Parent or Merger Subsidiary, as the case may be, shall not be required to
accept for payment or to pay for any shares of Company Common Stock not
theretofore accepted for payment or paid for, and may terminate (except as
set forth in the last paragraph of this Exhibit A) or amend the Offer if at
any time on or after the date of this Agreement and before the acceptance of
such Shares for payment or the payment therefor, any of the following
conditions exist or shall occur and remain in effect:
(a) (i) the Company shall not have performed in all material
respects all of its obligations hereunder required to be performed by it at
or prior to the scheduled or extended expiration of the Offer, (ii) the
representations and warranties of the Company contained in this Agreement and
in any certificate or other writing delivered by the Company pursuant hereto
shall not be true and correct in all material respects at and as of the
scheduled or extended expiration of the Offer as if made at and as of such
time (except to the extent expressly made as of an earlier date, in which
case as of such earlier date), and (iii) Parent shall not have received a
certificate signed by an executive officer of the Company to the foregoing
effect;
(b) there shall have been instituted or pending any action or
proceeding by any governmental authority (whether domestic, foreign or
supranational) before any court or governmental authority or agency,
domestic, foreign or supranational, seeking to (i) restrain, prohibit or
otherwise interfere with the ownership or operation by Parent or any
Subsidiary of Parent of all or any portion of the business of the Company or
any of its Subsidiaries or of Parent or any of its Subsidiaries or to compel
Parent or any Subsidiary of Parent to dispose of or hold separate all or any
portion of the business or assets of the Company or any of its Subsidiaries
or of Parent or any of its Subsidiaries; (ii) to impose or confirm
limitations on the ability of Parent or any Subsidiary of Parent effectively
to exercise full rights of ownership of the shares of Company Common Stock
(or shares of stock of the Surviving Corporation) including, without
limitation, the right to vote any shares of Company Common Stock (or shares
of stock of the Surviving Corporation) on any matters properly presented to
stockholders; or (iii) seeking to require divestiture by Parent or any
Subsidiary of Parent of any shares of Company Common Stock (or shares of
stock of the Surviving Corporation), if any such matter referred in
subclauses (i), (ii) and (iii) would, or would reasonably be expected to,
have a Material Adverse Effect on Parent at or after the scheduled or
extended expiration of the Offer;
(c) there shall have been any statute, rule, regulation,
injunction, order or decree, enacted, enforced, promulgated, entered, issued
or deemed applicable to the Offer or the Merger and the other transactions
contemplated hereby (or in the case of any statute, rule or regulation,
awaiting signature or reasonably expected to become law), by any court,
government or governmental authority or agency or legislative body, domestic,
foreign or supranational, that would, or would reasonably be expected to,
have a Material Adverse Effect on Parent at or after the scheduled or
extended expiration of the Offer;
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(d) since the date of this Agreement, there shall have occurred
a Material Adverse Effect with respect to the Company, or there shall have
occurred a change or event which would reasonably be expected to have a
Material Adverse Effect on the Company;
(e) the consent and waiver of Foothill Capital Corporation
("Foothill") with respect to the Offer and the Merger and the termination of
the Company Warrant issued to Foothill shall not have been obtained at the
expiration of the Offer;
(f) there shall have been a subsequent development (including
any settlement or final settlement offer from counsel for the plaintiffs) in
any action or proceeding pending on the date of this Agreement relating to
the Company or any of its Subsidiaries or there shall have been instituted
any action or proceeding subsequent to the date of this Agreement that would
(i) have a Material Adverse Effect on the Company, or (ii) make materially
more costly (A) the making of the Offer, (B) the acceptance for payment of,
or payment for, some or all of the shares pursuant to the Offer, (C) the
purchase of shares pursuant to the Offer, or (D) the consummation of the
Merger;
(g) the Company shall have (i) petitioned or applied to any
tribunal for or consented to the appointment of a receiver, (ii) admitted in
writing its inability to pay its debts as they mature, (iii) made an
assignment for the benefit of creditors, (iv) been adjudicated bankrupt or
insolvent, (v) filed voluntarily or had filed against it a petition in
bankruptcy or a petition or an answer seeking reorganization or any
arrangement with creditors or to take advantage of any bankruptcy,
reorganization, insolvency, dissolution or liquidation law or statute, or
(vi) become unable to conduct its business, taken as a whole, substantially
as currently conducted (including the purchase of inventory and supplies and
the payment of liabilities);
(h) this Agreement shall have been terminated in accordance
with its terms;
(i) Parent and the Company shall have agreed that Parent or
Merger Subsidiary, as the case may be, shall terminate the Offer or postpone
the acceptance for payment of or payment for Shares thereunder; or
(j) there shall not have been validly tendered and not
withdrawn at the expiration of the Offer, a number of shares of Company
Common Stock equal to at least a majority of the then outstanding shares of
Company Common Stock.
The foregoing conditions are for the sole benefit of Parent and
Merger Subsidiary and may be asserted by Parent or Merger Subsidiary
regardless of the circumstances giving rise to any such condition and may be
waived by Parent and Merger Subsidiary, in whole or in part, at any time and
from time to time, in the discretion of Parent and Merger Subsidiary. The
failure by Parent or Merger Subsidiary at any time to exercise any of the
foregoing rights will not be deemed a waiver of any right, the waiver of such
right with respect to any particular facts or circumstances shall not be
deemed a waiver with respect to any other facts or circumstances, and each
right will be deemed an ongoing right which may be asserted at any time and
from time to time.
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Should the Offer be terminated pursuant to the foregoing provisions,
all tendered shares of Company Common Stock not theretofore accepted for
payment shall promptly be returned by the depositary to the tendering
stockholders.
If the Offer Condition specified in Section (g) of this Exhibit A
shall not be satisfied due to the filing of an involuntary petition againt
the Company seeking the relief specified in such Section (g), Parent and
Merger Subsidiary may not terminate the Offer until thirty (30) days after
the filing of such involuntary petition if the involuntary petition shall not
have been dismissed prior to that time.
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