EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
Dated as of April 9, 1997
Among
XXXXXXX CORPORATION,
E&W ACQUISITION CORP.
And
STANT CORPORATION
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TABLE OF CONTENTS
Page
ARTICLE I
The Offer
SECTION 1.01. The Offer.............................................................................. 2
SECTION 1.02. Company Actions........................................................................ 4
ARTICLE II
The Merger
SECTION 2.01. The Merger............................................................................. 6
SECTION 2.02. Closing................................................................................ 6
SECTION 2.03. Effective Time......................................................................... 6
SECTION 2.04. Effects of the Merger.................................................................. 6
SECTION 2.05. Certificate of Incorporation and By-laws............................................... 6
SECTION 2.06. Directors.............................................................................. 7
SECTION 2.07. Officers............................................................................... 7
ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01. Effect on Capital Stock................................................................ 7
SECTION 3.02. Exchange of Certificates............................................................... 9
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of the Company.......................................... 11
SECTION 4.02. Representations and Warranties of Parent and Sub...................................... 27
3
Page
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business.................................................... 30
SECTION 5.02. No Solicitation........................................................ 33
ARTICLE VI
Additional Agreements
SECTION 6.01. Stockholder Approval; Preparation of Proxy Statement................... 35
SECTION 6.02. Access to Information; Confidentiality................................. 36
SECTION 6.03. Best Efforts; Notification............................................. 37
SECTION 6.04. Stock Options.......................................................... 38
SECTION 6.05. Benefit Plans.......................................................... 39
SECTION 6.06. Indemnification........................................................ 39
SECTION 6.07. Directors.............................................................. 40
SECTION 6.08. Fees and Expenses...................................................... 41
SECTION 6.09. Public Announcements................................................... 41
SECTION 6.10. Transfer Taxes......................................................... 42
ARTICLE VII
Conditions Precedent
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination............................................................ 43
SECTION 8.02. Effect of Termination.................................................. 44
SECTION 8.03. Amendment.............................................................. 44
SECTION 8.04. Extension; Waiver...................................................... 44
SECTION 8.05. Procedure for Termination, Amendment, Extension or Waiver.............. 44
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Page
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties............................... 45
SECTION 9.02. Notices..................................................................... 45
SECTION 9.03. Definitions................................................................. 46
SECTION 9.04. Interpretation.............................................................. 47
SECTION 9.05. Counterparts................................................................ 47
SECTION 9.06. Entire Agreement; No Third-Party Beneficiaries.............................. 47
SECTION 9.07. Governing Law............................................................... 47
SECTION 9.08. Assignment.................................................................. 48
SECTION 9.09. Enforcement................................................................. 48
Exhibit A Conditions of the Offer
AGREEMENT AND PLAN OF MERGER
dated as of April 9, 1997, among XXXXXXX
CORPORATION, a Delaware corporation
("Parent"), E&W ACQUISITION CORP., a
Delaware corporation ("Sub") and a wholly
owned subsidiary of Parent, and STANT
CORPORATION, a Delaware corporation (the
"Company").
WHEREAS the respective Boards of Directors of
Parent, Sub and the Company have approved the acquisition of the Company by
Parent on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition,
Parent proposes to cause Sub to make a tender offer (as it may be amended from
time to time as permitted under this Agreement, the "Offer") to purchase all
the issued and outstanding shares of Common Stock, par value $0.01 per share,
of the Company (the "Common Stock"), at a price per share of Common Stock of
$21.50, net to the seller in cash, upon the terms and subject to the conditions
set forth in this Agreement;
WHEREAS, concurrently with the execution and
delivery of this Agreement, Parent, Sub and Bessemer Capital Partners, L.P.
("BCP"), are entering into a stockholder agreement, and Parent, Sub and an
officer of the Company are entering into a stockholder agreement (collectively,
the "Stockholder Agreement" and, together with this Agreement, the "Operative
Agreements") pursuant to which BCP and such officer shall agree to take certain
actions to support the transactions contemplated by this Agreement;
WHEREAS the Board of Directors of the Company has
(a) determined that the Offer and the Merger (as defined below) are fair to and
in the best interests of the stockholders of the Company, (b) approved (i) the
acquisition of the Company by Parent on the terms and subject to the conditions
set forth in this Agreement and (ii) the transactions contemplated by the
Operative Agreements (collectively, the "Transactions"), (c) approved this
Agreement and (d) resolved to recommend acceptance of the Offer and adoption of
this Agreement by such stockholders;
WHEREAS the respective Boards of Directors of
Parent, Sub and the Company have approved the merger of Sub into the Company
(the "Merger"), on the terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding share of Common Stock not owned
directly or indirectly by Parent or the Company, except
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shares of Common Stock held by persons who object to the Merger and comply with
all the provisions of Delaware law concerning the right of holders of Common
Stock to dissent from the Merger and require appraisal of their shares of
Common Stock ("Dissenting Stockholders"), shall be converted into the right to
receive the per share consideration paid pursuant to the Offer; and
WHEREAS Parent, Sub and the Company desire to make
certain representations, warranties, covenants and agreements in connection
with the Offer and the Merger and also to prescribe various conditions to the
Offer and the Merger.
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and agreements contained in this
Agreement, the parties agree as follows:
ARTICLE I
The Offer
SECTION 1.01. The Offer. (a) Subject to the
provisions of this Agreement, as promptly as practicable but in no event later
than five business days after the announcement of the execution of this
Agreement, Sub shall, and Parent shall cause Sub to, commence the Offer. The
obligation of Sub to, and of Parent to cause Sub to, accept for payment, and
pay for, any shares of Common Stock tendered pursuant to the Offer shall be
subject to the conditions set forth in Exhibit A and to the other conditions of
this Agreement. Sub expressly reserves the right to modify the terms of the
Offer and to waive any condition of the Offer, except that, without the consent
of the Company, Sub shall not (i) reduce the number of shares of Common Stock
subject to the Offer, (ii) reduce the price per share of Common Stock to be
paid pursuant to the Offer, (iii) modify or add to the conditions set forth in
Exhibit A or otherwise amend the Offer in any manner materially adverse to the
Company's stockholders, (iv) except as provided in the next two sentences,
extend the Offer, (v) change the form of consideration payable in the Offer or
(vi) waive or modify the Minimum Tender Condition (as defined in Exhibit A).
Notwithstanding the foregoing, Sub may, without the consent of the Company, (i)
extend the Offer for a period of not more than 10 business days beyond the
initial expiration date of the Offer (which initial expiration date shall be 20
business days following
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commencement of the Offer), if on the date of such extension less than 90% of
the outstanding shares of Common Stock have been validly tendered and not
properly withdrawn pursuant to the Offer, (ii) extend the Offer from time to
time if at the initial expiration date or any extension thereof the Minimum
Tender Condition or any of the other conditions to Sub's obligation to purchase
shares of Common Stock set forth in paragraphs (a), (b) and (e) of Exhibit A
shall not be satisfied or waived, until such time as such conditions are
satisfied or waived, (iii) extend the Offer for any period required by any
rule, regulation, interpretation or position of the Securities and Exchange
Commission (the "SEC") or the staff thereof applicable to the Offer and (iv)
extend the Offer for any reason for a period of not more than 10 business days
beyond the latest expiration date that would otherwise be permitted under
clause (i), (ii) or (iii) of this sentence. In addition, Sub shall at the
request of the Company extend the Offer for five business days if at any
scheduled expiration date of the Offer any of the conditions to Sub's
obligation to purchase shares of Common Stock shall not be satisfied; provided,
however, that Sub shall not be required to extend the Offer beyond December 31,
1997. On the terms and subject to the conditions of the Offer and this
Agreement, Sub shall, and Parent shall cause Sub to, pay for all shares of
Common Stock validly tendered and not withdrawn pursuant to the Offer that Sub
becomes obligated to purchase pursuant to the Offer as soon as practicable
after the expiration of the Offer.
(b) On the date of commencement of the Offer,
Parent and Sub shall file with the SEC a Tender Offer Statement on Schedule
14D-1 with respect to the Offer, which shall contain an offer to purchase and a
related letter of transmittal and summary advertisement (such Schedule 14D-1
and the documents included therein pursuant to which the Offer shall be made,
together with any supplements or amendments thereto, the "Offer Documents").
The Offer Documents shall comply as to form in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder and, on the date
filed with the SEC and on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by Parent or Sub with respect to information supplied by
the Company for inclusion in the
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Offer Documents. Each of Parent, Sub and the Company shall promptly correct any
information provided by it for use in the Offer Documents if and to the extent
that such information shall have become false or misleading in any material
respect, and each of Parent and Sub shall take all steps necessary to amend or
supplement the Offer Documents and to cause the Offer Documents as so amended
or supplemented to be filed with the SEC and to be disseminated to the
Company's stockholders, in each case as and to the extent required by
applicable Federal securities laws. Parent and Sub shall provide the Company
and its counsel in writing with any comments Parent, Sub or their counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after the receipt of such comments.
(c) Parent shall provide or cause to be provided
to Sub on a timely basis the funds necessary to purchase any shares of Common
Stock that Sub becomes obligated to purchase pursuant to the Offer.
SECTION 1.02. Company Actions. (a) The Company
hereby approves of and consents to the Offer and represents that the Board of
Directors of the Company (the "Company Board"), at a meeting duly called and
held, has unanimously duly adopted resolutions (i) determining that the Offer,
the Merger and the other Transactions are fair to and in the best interests of
the stockholders of the Company, (ii) approving (A) the acquisition of the
Company by Parent on the terms and subject to the conditions set forth in this
Agreement and (B) the Offer, the Merger and the other Transactions, (iii)
approving this Agreement and (iv) recommending that the stockholders of the
Company accept the Offer, tender their shares of Common Stock pursuant to the
Offer and adopt this Agreement. The Company represents that the Company Board
has received the opinion of Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx
Xxxxxxx") that the proposed consideration to be received by the holders of
shares of Common Stock pursuant to the Offer and the Merger is fair to such
holders from a financial point of view, and a complete and correct signed copy
of such opinion has been delivered by the Company to Parent. The Company has
been advised by each of its directors and executive officers that each such
person intends to tender all shares of Common Stock owned by such person
pursuant to the Offer, except to the extent of any restrictions created by
Section 16(b) of the Exchange Act.
(b) On the date the Offer Documents are filed
with the SEC, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 with
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respect to the Offer (such Schedule 14D-9, as amended from time to time, the
"Schedule 14D-9") containing the recommendations described in Section 1.02(a)
and shall as promptly as practicable thereafter mail the Schedule 14D-9 to the
stockholders of the Company. The Schedule 14D-9 shall comply in all material
respects with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder and, on the date filed with the SEC and on
the date first published, sent or given to the Company's stockholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation is made by the Company with
respect to information supplied by Parent or Sub for inclusion in the Schedule
14D-9. Each of the Company, Parent and Sub shall promptly correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that such information shall have become false or misleading in any material
respect, and the Company shall take all steps necessary to amend or supplement
the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or
supplemented to be filed with the SEC and disseminated to the Company's
stockholders, in each case as and to the extent required by applicable Federal
securities laws. The Company shall provide Parent and its counsel in writing
with any comments the Company or its counsel may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the receipt of such
comments.
(c) In connection with the Offer, the Company
shall cause its transfer agent to furnish Sub promptly with mailing labels
containing the names and addresses of the record holders of Common Stock as of
a recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of stockholders, security position
listings and computer files and all other information in the Company's
possession or control regarding the beneficial owners of Common Stock, and
shall furnish to Sub such information and assistance (including updated lists
of stockholders, security position listings and computer files) as Parent may
reasonably request in communicating the Offer to the Company's stockholders.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent and Sub shall hold in confidence the
information contained in any such labels, listings and files, shall use such
information only in connection with the Offer and the Merger
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and, if this Agreement shall be terminated, shall, upon request, promptly
deliver to the Company all copies of such information then in their possession.
ARTICLE II
The Merger
SECTION 2.01. The Merger. Upon the terms and
subject to the conditions set forth in this Agreement, and in accordance with
the Delaware General Corporation Law (the "DGCL"), Sub shall be merged with and
into the Company at the Effective Time of the Merger (as hereinafter defined).
Following the Merger, the separate corporate existence of Sub shall cease and
the Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
Sub in accordance with the DGCL. At the election of Parent, any direct or
indirect wholly owned subsidiary (as defined in Section 9.03) of Parent may be
substituted for Sub as a constituent corporation in the Merger. In such event,
the parties agree to execute an appropriate amendment to this Agreement in
order to reflect the foregoing.
SECTION 2.02. Closing. The closing of the Merger
(the "Closing") shall take place at 10:00 a.m. on a date to be specified by the
parties, which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article VII (the "Closing
Date"), at the offices of Cravath, Swaine & Xxxxx, Worldwide Plaza, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, unless another date or place is agreed to in
writing by the parties hereto.
SECTION 2.03. Effective Time. On the Closing
Date, the parties shall file a certificate of merger or other appropriate
documents (in any such case, the "Certificate of Merger") executed in
accordance with the relevant provisions of the DGCL and shall make all other
filings or recordings required under the DGCL. The Merger shall become
effective at such time as the Certificate of Merger is duly filed with the
Delaware Secretary of State, or at such other time as Sub and the Company shall
agree and shall specify in the Certificate of Merger (the time the Merger
becomes effective being the "Effective Time of the Merger").
SECTION 2.04. Effects of the Merger. The Merger
shall have the effects set forth in Section 259 of the DGCL.
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SECTION 2.05. Certificate of Incorporation and
By-laws. (a) The Restated Certificate of Incorporation of the Company, as in
effect immediately prior to the Effective Time of the Merger, shall be amended
as of the Effective Time of the Merger so that Article Fourth of such Restated
Certificate of Incorporation reads in its entirety as follows: "The total
number of shares of all classes of stock which the corporation shall have
authority to issue is 1,000 shares of Common Stock, par value $0.01 per share."
and, as so amended, such Restated Certificate of Incorporation shall be the
Restated Certificate of Incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
(b) The By-laws of Sub as in effect at the
Effective Time of the Merger shall be the By-laws of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
SECTION 2.06. Directors. The directors of Sub at
the Effective Time of the Merger shall be the directors of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
SECTION 2.07. Officers. The officers of the
Company at the Effective Time of the Merger shall be the officers of the
Surviving Corporation, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case
may be.
ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01. Effect on Capital Stock. As of the
Effective Time of the Merger, by virtue of the Merger and without any action on
the part of the holder of any shares of Common Stock or any shares of capital
stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding
share of the capital stock of Sub shall be converted into and
become one fully paid and nonassessable share of Common Stock, par
value $0.01 per share, of the Surviving Corporation.
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(b) Cancellation of Treasury Stock and Parent Owned
Stock. Each share of Common Stock that is owned by the Company or
by any subsidiary of the Company and each share of Common Stock
that is owned by Parent, Sub or any other subsidiary of Parent
shall automatically be canceled and retired and shall cease to
exist, and no consideration shall be delivered in exchange
therefor.
(c) Conversion of Common Stock. Subject to Section
3.01(d), each issued and outstanding share of Common Stock (other
than shares to be canceled in accordance with Section 3.01(b))
shall be converted into the right to receive from the Surviving
Corporation in cash, without interest, the price per share of
Common Stock paid pursuant to the Offer (the "Merger
Consideration"). As of the Effective Time of the Merger, all such
shares of Common Stock 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 of Common
Stock shall cease to have any rights with respect thereto, except
the right to receive the Merger Consideration, without interest.
(d) Shares of Dissenting Stockholders. Notwithstanding
anything in this Agreement to the contrary, any issued and
outstanding shares of Common Stock held by a Dissenting Stockholder
shall not be converted as described in Section 3.01(c) but, as of
the Effective Time of the Merger, shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to
exist and shall become the right to receive such consideration as
may be determined to be due to such Dissenting Stockholder pursuant
to the laws of the State of Delaware; provided, however, that the
shares of Common Stock outstanding immediately prior to the
Effective Time of the Merger and held by a Dissenting Stockholder
who shall, after the Effective Time of the Merger, withdraw his
demand for appraisal or lose his right of appraisal, in either case
pursuant to the DGCL, shall be deemed to be converted as of the
Effective Time of the Merger, into the right to receive the Merger
Consideration. The Company shall give Parent (i) prompt notice of
any written demands for appraisal of shares of Common Stock
received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to any such demands. The
Company shall not, without the prior written consent of
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Parent, voluntarily make any payment with respect to, or settle,
offer to settle or otherwise negotiate, any such demands.
SECTION 3.02. Exchange of Certificates.
(a) Paying Agent. Parent shall designate a bank or trust company reasonably
acceptable to the Company to act as paying agent (the "Paying Agent") for the
payment of the Merger Consideration upon surrender of certificates representing
Common Stock.
(b) Parent To Provide Funds. Parent shall take
all steps necessary to enable and cause the Surviving Corporation to provide to
the Paying Agent on a timely basis, as and when needed after the Effective Time
of the Merger, funds necessary to pay for the shares of Common Stock pursuant
to Section 3.01, it being understood that any and all interest earned on funds
made available to the Paying Agent in accordance with this Agreement shall be
turned over to Parent.
(c) Exchange Procedure. As soon as reasonably
practicable after the Effective Time of the Merger, the Paying Agent shall mail
to each holder of record of a certificate or certificates which immediately
prior to the Effective Time of the Merger represented outstanding shares of
Common Stock (the "Certificates") whose shares were converted into the right to
receive the Merger Consideration pursuant to Section 3.01 (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and shall be in a form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancelation to the Paying
Agent or to such other agent or agents as may be appointed by the Parent,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor the amount of
cash into which the shares of Common Stock theretofore represented by such
Certificate shall have been converted pursuant to Section 3.01, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Common Stock which is not registered in the transfer
records of the Company, payment may be made to a person other than the person
in whose name the Certificate so surrendered is registered, if such Certificate
shall be
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properly endorsed or otherwise be in proper form for transfer and the person
requesting such payment shall pay any transfer or other taxes required by
reason of the payment to a person other than the registered holder of such
Certificate or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. Until surrendered as contemplated
by this Section 3.02, each Certificate shall be deemed at any time after the
Effective Time of the Merger to represent only the right to receive upon such
surrender the amount of cash, without interest, into which the shares of Common
Stock theretofore represented by such Certificate shall have been converted
pursuant to Section 3.01. No interest shall be paid or accrue on the cash
payable upon the surrender of any Certificate.
(d) No Further Ownership Rights in Common Stock.
All cash paid upon the surrender of Certificates in accordance with the terms
of this Article III shall be deemed to have been paid in full satisfaction of
all rights pertaining to the shares of Common Stock theretofore represented by
such Certificates, and there shall be no further registration of transfers on
the stock transfer books of the Surviving Corporation of the shares of Common
Stock which were outstanding immediately prior to the Effective Time of the
Merger. If, after the Effective Time of the Merger, Certificates are presented
to the Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Article III.
(e) No Liability. None of Parent, Sub, the
Company or the Paying Agent shall be liable to any person in respect of any
cash delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. If any Certificates shall not have been
surrendered prior to seven years after the Effective Time of the Merger (or
immediately prior to such earlier date on which any payment pursuant to this
Article III would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 4.01(d))), the payment in respect of
such Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
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ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of
the Company. The Company represents and warrants to Parent
and Sub as follows:
(a) Standing and Corporate Power. Except as set forth
in the letter (the "Company Disclosure Letter") from the Company to
Parent dated the date of this Agreement, each of the Company and
each of its subsidiaries is a corporation validly existing and in
good standing under the laws of the jurisdiction in which it is
incorporated and has the requisite corporate power and authority to
carry on its business as now being conducted. Each of the Company
and each of its subsidiaries is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its
properties makes such qualification or licensing necessary, other
than in such jurisdictions where the failure to be so qualified or
licensed (individually or in the aggregate) would not have a
material adverse effect on the Company and its subsidiaries taken
as a whole. The Company has delivered to Parent complete and
correct copies of its Restated Certificate of Incorporation and
By-laws and the certificates of incorporation and by-laws of its
Significant Subsidiaries, in each case as amended to the date of
this Agreement. For purposes of this Agreement, a "Significant
Subsidiary" means any subsidiary of the Company that constitutes a
significant subsidiary within the meaning of Rule 1-02 of
Regulation S-X of the SEC.
(b) Subsidiaries. The Company Disclosure Letter lists
each subsidiary of the Company. All the outstanding shares of
capital stock of, or other equity interests in, each such
subsidiary have been validly issued and are fully paid and
nonassessable and, except as set forth in the Company Disclosure
Letter, are owned by the Company, by another wholly owned
subsidiary of the Company or by the Company and another such wholly
owned subsidiary, free and clear of all pledges, claims, liens,
charges, encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens"). Except for the capital stock of
its subsidiaries and except for the ownership interests set forth
in the Company Disclosure Letter,
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the Company does not own, directly or indirectly, any capital stock
or other ownership interest in any corporation, partnership, joint
venture or other entity.
(c) Capital Structure. The authorized capital stock of
the Company consists of 21,000,000 shares of Common Stock and
820,000 shares of preferred stock, par value $0.01 per share, of
which 53,572 shares are Class A Preferred Stock, par value $0.01
per share, 21,786 shares are Class B Preferred Stock, par value
$0.01 per share, 100,000 shares are Class C Preferred Stock, par
value $0.01 per share, and 644,642 shares are of such series as the
Company Board may determine from time to time. As of the date of
this Agreement, (i) 16,226,815 shares of Common Stock and no shares
of preferred stock were issued and outstanding, (ii) no shares of
Common Stock were held by the Company in its treasury, (iii)
1,217,481 shares of Common Stock were reserved for issuance
pursuant to the outstanding employee stock options ("Plan Options")
granted pursuant to the Stock Plans (as defined in Section 6.04),
of which (x) Plan Options covering 700,863 shares of Common Stock
are currently exercisable and (y) Plan Options covering 516,618
shares of Common Stock are currently not exercisable, of which Plan
Options covering 485,400 shares of Common Stock have been granted
subject to obtaining approval of the Company's stockholders and
(absent such approval, which is subject to the last sentence of
Section 5.01(b)) will not become exercisable as a result of the
Transactions, and (iv) 1,457,602 shares of Common Stock were
reserved for issuance pursuant to other options ("Other Options"
and, together with the Plan Options, the "Stock Options") granted
to employees and former employees of the Company. Except as set
forth above, as of the date of this Agreement, no shares of capital
stock or other voting securities of the Company were issued,
reserved for issuance or outstanding. All outstanding shares of
capital stock of the Company are, and all shares which may be
issued pursuant to the Stock Plans or pursuant to the agreements
representing outstanding Other Options described in clause (iv)
above shall be, when issued, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. There
are not any bonds, debentures, notes or other indebtedness of the
Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any
matters on which
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stockholders of the Company may vote. Except as set forth above, as
of the date of this Agreement, there are not any securities,
options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or
any of its subsidiaries is a party or by which any of them is bound
obligating the Company or any of its subsidiaries to issue, deliver
or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of the Company
or of any of its subsidiaries or obligating the Company or any of
its subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. As of the date of this Agreement, there
are not any outstanding contractual 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 of its
subsidiaries or to provide funds to make any investment (in the
form of a loan, capital contribution or otherwise) in any
subsidiary or any other entity.
(d) Authority; Noncontravention. The Company has the
requisite corporate power and authority to enter into this
Agreement and, subject to adoption of this Agreement by the holders
of a majority of the outstanding shares of Common Stock, to
consummate the Transactions. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the
Transactions have been duly authorized by all necessary corporate
action on the part of the Company, subject to adoption of this
Agreement by the holders of a majority of the outstanding shares of
Common Stock. This Agreement has been duly executed and delivered
by the Company and constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms. The execution and delivery of the Operative Agreements do
not, and the consummation of the Transactions and compliance with
the provisions of the Operative Agreements will not, conflict with,
or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to
loss of a material benefit under, or result in the creation of any
Lien upon any of the properties or assets of the Company or any of
its subsidiaries under, (i) the Restated Certificate of
Incorporation or By-laws of the Company or the
14
comparable charter or organizational documents of any of its
subsidiaries, (ii) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to the Company or any
of its subsidiaries or their respective properties or assets or
(iii) subject to the governmental filings and other matters
referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the
Company or any of its subsidiaries or their respective properties
or assets, other than, in the case of clause (ii), any such
conflicts, violations, defaults, rights or Liens that individually
or in the aggregate would not (x) have a material adverse effect on
the Company and its subsidiaries taken as a whole, (y) impair the
ability of the Company to perform its obligations under this
Agreement or (z) prevent the consummation of any of the
Transactions (a "Company Material Adverse Effect"). No consent,
approval, order or authorization of, or registration, declaration
or filing with, any Federal, state or local government or any
court, administrative or regulatory agency or commission or other
governmental authority or agency, domestic or foreign (a
"Governmental Entity"), is required by or with respect to the
Company or any of its subsidiaries in connection with the execution
and delivery of this Agreement by the Company or the consummation
by the Company of the Transactions, except for (i) the filing of a
premerger notification and report form by the Company under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX
Xxx"), (xx) the filing with the SEC of (x) the Schedule 14D-9, (y)
a proxy or information statement relating to the adoption by the
Company's stockholders of this Agreement, if such adoption is
required by law (as amended or supplemented from time to time, the
"Proxy Statement"), and (z) such reports under Section 13(a) of the
Exchange Act as may be required in connection with the Operative
Agreements and the Transactions, (iii) the filing of the
Certificate of Merger with the Delaware Secretary of State and
appropriate documents with the relevant authorities of other states
in which the Company is qualified to do business and (iv) such
other consents, approvals, orders, authorizations, registrations,
declarations and filings (x) as may be required under the laws of
any foreign country in which the Company or any of its subsidiaries
conducts any business or owns any property or assets, the failure
to obtain or make would not have a Company Material
15
Adverse Effect, or (y) as are set forth in the Company Disclosure
Letter.
(e) SEC Documents; Undisclosed Liabilities. The
Company has filed all required reports, schedules,
forms, statements and other documents with the SEC
since January 1, 1995 (the "SEC Documents"). As of
their respective dates, the SEC Documents complied in
all material respects with the requirements of the
Securities Act of 1933 (the "Securities Act"), or the
Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder
applicable to such SEC Documents, and none of the SEC
Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be
stated therein or necessary in order to make the
statements therein, in light of the circumstances under
which they were made, not misleading. Except to the
extent that information contained in any SEC Document
has been revised or superseded by a later filed SEC
Document, none of the SEC Documents contains any untrue
statement of a material fact or omits 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. The financial statements of the
Company included in the SEC Documents comply as to form
in all material respects with applicable accounting
requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting
principles (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods
involved (except as may be indicated in the notes
thereto) and fairly present the consolidated financial
position of the Company and its consolidated
subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit
adjustments). Except as set forth in the Filed SEC
Documents (as defined in Section 4.01(g)) or in the
Company Disclosure Letter, neither the Company nor any
of its subsidiaries has any liabilities or obligations
of any nature (whether accrued, absolute, contingent or
otherwise), other than for taxes (as defined in
Section 4.01(k)), required by generally accepted
accounting principles to be set forth on a consolidated
balance sheet of the Company and its consolidated
16
subsidiaries or in the notes thereto, except for liabilities and
obligations incurred in the ordinary course of business consistent
with past practice since the date of the most recent consolidated
balance sheet included in the Filed SEC Documents which,
individually or in the aggregate, could not reasonably be expected
to have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(f) Information Supplied. None of the information
supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Offer Documents, the Schedule
14D-9, the information statement to be filed by the Company in
connection with the Offer pursuant to Rule 14f-1 promulgated under
the Exchange Act (the "Information Statement") or the Proxy
Statement will, in the case of the Offer Documents, the Schedule
14D-9 and the Information Statement, at the respective times the
Offer Documents, the Schedule 14D-9 and the Information Statement
are filed with the SEC or first published, sent or given to the
Company's stockholders, or, in the case of the Proxy Statement, at
the time the Proxy Statement is first mailed to the Company's
stockholders or at the time of the meeting of the Company's
stockholders held to vote on adoption of this Agreement, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under
which they are made, not misleading. The Schedule 14D-9, the
Information Statement and the Proxy Statement will comply as to
form in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder, except that no
representation or warranty is made by the Company with respect to
statements made or incorporated by reference therein based on
information supplied by Parent or Sub for inclusion or
incorporation by reference therein.
(g) Absence of Certain Changes or Events. Except as
disclosed in the SEC Documents filed and publicly available prior
to the date of this Agreement (the "Filed SEC Documents") or as set
forth in the Company Disclosure Letter, from December 31, 1996, to
the date of this Agreement, the Company has conducted its business
only in the ordinary course, and there has not been (i) any
material adverse change in the Company and its subsidiaries taken
as a whole, (ii) except for the regular quarterly dividend paid on
March 31, 1997, to
17
holders of record on March 14, 1997, any declaration, setting aside
or payment of any dividend or other distribution (whether in cash,
stock or property) with respect to any of the Company's capital
stock, (iii) any split, combination or reclassification of any of
its capital stock or any issuance or the authorization of any
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, (iv) (A) any granting
by the Company or any of its subsidiaries to any executive officer
of the Company or any of its subsidiaries of any increase in
compensation, except as was required under employment agreements in
effect as of the date of the most recent audited financial
statements included in the Filed SEC Documents, (B) any granting by
the Company or any of its subsidiaries to any such executive
officer of any increase in severance or termination pay, except as
was required under employment, severance or termination agreements
in effect as of the date of the most recent audited financial
statements included in the Filed SEC Documents or (C) any entry by
the Company or any of its subsidiaries into any employment,
severance or termination agreement with any such executive officer,
(v) any damage, destruction or loss, whether or not covered by
insurance, that has or could have a material adverse effect on the
Company and its subsidiaries taken as a whole, (vi) any change in
accounting methods, principles or practices by the Company
materially affecting its assets, liabilities or business, except
insofar as may have been required by a change in generally accepted
accounting principles or (vii) any action which would have been
prohibited without Parent's approval under Section 5.01(a)(vi) if
taken between the date of this Agreement and the Effective Time of
the Merger.
(h) Litigation. Except as disclosed in the Filed SEC
Documents or in the Company Disclosure Letter, as of the date of
this Agreement (i) there is no single or series of related suits,
actions or proceedings pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries, or any
unsatisfied judgment against the Company or any of its
subsidiaries, relating to or involving an amount greater than
$100,000 and (ii) there is not any judgment, decree, injunction or
similar order of any Governmental Entity or arbitrator outstanding
against the Company or any of its subsidiaries or other single or
series of related suits, actions or proceedings
18
pending or, to the knowledge of the Company, threatened that,
individually or in the aggregate, could reasonably be expected to
have a Company Material Adverse Effect.
(i) Absence of Changes in Benefit Plans. Except as
disclosed in the Filed SEC Documents or as set forth in the Company
Disclosure Letter, from December 31, 1996, to the date of this
Agreement, there has not been any adoption or amendment in any
material respect by the Company or any of its subsidiaries of any
collective bargaining agreement or any bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization,
medical or other plan, arrangement or understanding (whether or not
legally binding) providing benefits to any current or former
employee, officer or director of the Company or any of its
subsidiaries (collectively, "Benefit Plans"). Except as disclosed
in the Filed SEC Documents or as set forth in the Company
Disclosure Letter, there are no employment, consulting, severance,
termination or indemnification agreements, arrangements or
understandings between the Company or any of its subsidiaries and
any current or former employee, officer or director of the Company
or any of its subsidiaries.
(j) ERISA Compliance. (i) The Company Disclosure Letter
contains a list of all "employee pension benefit plans" (as defined
in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) (sometimes referred to herein as
"Pension Plans"), "employee welfare benefit plans" (as defined in
Section 3(1) of ERISA) and all other Benefit Plans maintained, or
contributed to, by the Company or any of its subsidiaries for the
benefit of any current or former employees, officers or directors
of the Company or any of its subsidiaries. The Company has made
available to Parent true, complete and correct copies of (A) each
Benefit Plan (or, in the case of any unwritten Benefit Plans,
descriptions thereof), (B) the most recent annual report on Form
5500 filed with the Internal Revenue Service with respect to each
Benefit Plan (if any such report was required), (C) the most recent
summary plan description for each Benefit Plan for which such
summary plan description is required and (D) each trust agreement
and group annuity contract relating to any Benefit Plan.
19
(ii) Except as disclosed in the Company Disclosure
Letter, all Pension Plans have been the subject of determination
letters from the Internal Revenue Service to the effect that such
Pension Plans are qualified and exempt from Federal income taxes
under Sections 401(a) and 501(a), respectively, of the Internal
Revenue Code of 1986, as amended (the "Code"), and no such
determination letter has been revoked nor, to the knowledge of the
Company, has revocation been threatened, nor has any such Pension
Plan been amended since the date of its most recent determination
letter or application therefor in any respect that would adversely
affect its qualification or materially increase its costs.
(iii) Each Benefit Plan has been administered in
compliance with its terms and applicable provisions of ERISA and
the Code except for any instances of non-compliance that,
individually or in the aggregate, are not reasonably expected to
have a Company Material Adverse Effect. No conditions exist in
connection with any Benefit Plan (other than claims for benefits or
contributions in the ordinary course) that could give rise to
liability under ERISA or the Code that would reasonably be expected
to have a Company Material Adverse Effect. None of the Pension
Plans has an "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA or Section 412 of the Code),
whether or not waived. Neither any of such Benefit Plans nor any of
such trusts has been terminated, nor has there been any "reportable
event" (as that term is defined in Section 4043 of ERISA) with
respect thereto, during the last five years which could give rise
to liability that would reasonably be expected to have a Company
Material Adverse Effect. Neither the Company, any of its
subsidiaries nor any entity required to be aggregated with the
Company under Section 414 of the Code has incurred any material
liability under Title IV of ERISA (other than insurance premiums)
that has not been satisfied as of the date hereof.
(iv) With respect to any Benefit Plan that is an
employee welfare benefit plan, except as disclosed in the Company
Disclosure Letter, each such Benefit Plan (including any such Plan
covering retirees or other former employees) may be amended or
terminated without material liability to the Company or any of its
subsidiaries on or at any time after the consummation of the Offer.
20
(k) Taxes. Each of the Company and each of its
subsidiaries has filed all Federal income tax returns and all other
tax returns and reports required to be filed by it, except to the
extent that a failure to file, in the individual or in the
aggregate, would not result in a Company Material Adverse Effect.
All such returns are complete and correct in all respects, other
than any inaccuracy or incompleteness that, in the individual or in
the aggregate, would not result in a Company Material Adverse
Effect. The Company and each of its subsidiaries has paid (or the
Company has paid on its subsidiaries' behalf) all taxes shown to be
due on such returns and reports. The Company and each of its
subsidiaries has paid (or the Company has paid on its subsidiaries'
behalf) all taxes for which no return was required to be filed,
except to the extent that a failure to pay, in the individual or in
the aggregate, would not result in a Company Material Adverse
Effect. All taxes not previously paid do not exceed the reserve in
the most recent financial statements contained in the Filed SEC
Documents for taxes payable by the Company and its subsidiaries for
all taxable periods and portions thereof through the date of such
financial statements by an amount that would result in a Company
Material Adverse Effect. All liabilities for taxes incurred by the
Company or any of its subsidiaries since the date of the most
recent consolidated balance sheet included in the Filed SEC
Documents have been incurred in the ordinary course of business
consistent with past practice, other than any liabilities for taxes
that, individually or in the aggregate, would not result in a
Company Material Adverse Effect. No deficiencies for any taxes have
been proposed, asserted or assessed against the Company or any of
its subsidiaries in writing that would have a Company Material
Adverse Effect, and no requests for waivers of the time to assess
any such taxes are pending. The Federal income tax returns of the
Company and each of its subsidiaries consolidated in such returns
have been examined by and settled with the United States Internal
Revenue Service for all years through 1992. As used in this
Agreement, "taxes" shall include all Federal, state, local and
foreign income, franchise, property, sales, excise and other taxes,
tariffs or governmental charges of any nature whatsoever.
(l) No Excess Parachute Payments. Other than
payments that may be made to the persons previously
discussed with counsel for Parent, any amount that
could be received (whether in cash or property or the
21
vesting of property) as a result of any of the Transactions by any
employee, officer or director of the Company or any of its
affiliates who is a "disqualified individual" (as such term is
defined in proposed Treasury Regulation Section 1.280G-1) under any
employment, severance or termination agreement, other compensation
arrangement or Benefit Plan currently in effect would not be
characterized as an "excess parachute payment" (as such term is
defined in Section 280G(b)(1) of the Code).
(m) Voting Requirements. The affirmative vote of the
holders of a majority of the outstanding shares of Common Stock
adopting this Agreement is the only vote of the holders of any
class or series of the Company's capital stock necessary to approve
this Agreement and the Transactions.
(n) State Takeover Statutes. Section 203 of the DGCL is
inapplicable to the Offer, the Merger, this Agreement, the
Stockholder Agreement and the Transactions, and the Company has
taken all necessary action in accordance with the provisions of
Section 203 to effect a valid election not to be governed by
Section 203. To the best of the Company's knowledge, no other state
takeover statute or similar statute or regulation applies or
purports to apply to the Offer, the Merger, this Agreement or any
of the Transactions.
(o) Brokers; Schedule of Fees and Expenses. No
broker, investment banker, financial advisor or other
person, other than Xxxxxx Xxxxxxx, the fees and
expenses of which shall be paid by the Company, is
entitled to any broker's, finder's, financial advisor's
or other similar fee or commission in connection with
the Transactions based upon arrangements made by or on
behalf of the Company. The Company's current estimate
of fees and expenses incurred and to be incurred by the
Company in connection with this Agreement and the
Transactions (including the fees of the Company's legal
counsel) are set forth in the Company Disclosure
Letter. A true and complete copy of the engagement
letter between Company and Xxxxxx Xxxxxxx has been
provided to Parent.
(p) Opinion of Financial Advisor. The Company
has received the opinion of Xxxxxx Xxxxxxx, dated the
date of this Agreement, to the effect that, as of such
date, the consideration to be received in the Offer and
the Merger by the Company's stockholders is fair to the
22
Company's stockholders from a financial point of view, and a signed
copy of such opinion has been delivered to Parent.
(q) Intellectual Property. Except as set forth
in the Company Disclosure Letter:
(i) The Company and its subsidiaries own and have the
right to use all copyrights, trade names, trademarks, service
marks, trade secrets, know-how, designs, software, patents,
licenses and other intellectual property rights (collectively, the
"Intellectual Property") that are necessary to provide, produce,
market and sell the products currently provided, produced, marketed
and sold by the Company and its subsidiaries and to conduct the
business of the Company and its subsidiaries as presently conducted
free and clear of all Liens, other than those rights the absence of
which individually or in the aggregate would not have a Company
Material Adverse Effect. The Company Disclosure Letter contains an
accurate and complete list setting forth all material registered
patents and trademarks and applications therefor that are owned by
the Company or any of its subsidiaries. There are no material trade
names, trademarks or service marks owned by the Company or any of
its subsidiaries that are not registered or the subject of
applications therefor.
(ii) As of the date of this Agreement, there is no
suit, action or proceeding pending or, to the Company's knowledge,
threatened against or affecting the Company or any of its
subsidiaries, which challenges the legality, validity,
enforceability of, or the Company's or any of its subsidiaries' use
or ownership of any of the Intellectual Property owned by the
Company or any of its subsidiaries or, to the Company's knowledge,
licensed to the Company or to any of its subsidiaries, other than
any such suit, action or proceeding that individually or in the
aggregate would not have a Company Material Adverse Effect.
(iii) The conduct of the Company's and its
subsidiaries' business, the Intellectual Property owned or used by
the Company and its subsidiaries, and the products or services
produced, sold or licensed by the Company and its subsidiaries do
not infringe, violate or misappropriate any Intellectual Property
right or any other proprietary right of any person or give rise to
any obligations to any person as a result of co-
23
authorship, co-inventorship, or any express or implied contract
for any use or transfer, other than any such infringement,
violation or appropriation that individually or in the aggregate
would not have a Company Material Adverse Effect.
(r) Compliance with Laws. The Company and its
subsidiaries are in compliance with, and have not violated any
applicable law, rule or regulation of any United States federal,
state, local, or foreign government or agency thereof (except for
Environmental Laws (as defined in Section 4.01(s), which are
addressed by the representations and warranties in Section 4.01(s))
which materially affects the business, properties or assets of the
Company and its subsidiaries, and no notice, charge, claim, action
or assertion has been received by the Company or any of its
subsidiaries or has been filed, commenced or, to the Company's
knowledge, threatened against the Company or any of its
subsidiaries alleging any such violation, except for any matter
which does not have a Company Material Adverse Effect. All
licenses, permits and authorizations which are required under such
laws, rules and regulations are in full force and effect, no appeal
nor any other action is pending to revoke any such permit, license
or authorization, and the Company and its subsidiaries are in full
compliance with all terms and conditions of all such permits,
licenses and authorizations, except where the failure to have all
such permits, licenses and other authorizations, the failure to be
in full force and effect and in compliance therewith or the
existence of any such appeal or other action would not have a
Company Material Adverse Effect.
(s) Environmental Protection. Except as
disclosed in the Filed SEC Documents or as set forth in
the Company Disclosure Letter:
(i) The Company and its subsidiaries have obtained all
permits, licenses and other authorizations which are required under
the Environmental Laws (as defined below) for the ownership, use
and operation of each property owned, operated or leased by the
Company and its subsidiaries (the "Property"), all such permits,
licenses and authorizations are in full force and effect, no appeal
nor any other action is pending to revoke any such permit, license
or authorization, and the Company and its subsidiaries are in full
compliance with all terms and conditions of all such
24
permits, licenses and authorizations, except where the failure to
have all such permits, licenses and other authorizations, the
failure to be in full force and effect and in compliance therewith
or the existence of any such appeal or other action would not have
a Company Material Adverse Effect.
(ii) The Company and its subsidiaries are in compliance
in all respects with all Environmental Laws, except where the
failure to be in compliance therewith is not reasonably expected to
individually or in any series of related occurrences result in
liability to the Company and its subsidiaries involving an amount
greater than $100,000; provided, however, that all instances of
noncompliance, in the aggregate, do not and will not have a Company
Material Adverse Effect.
(iii) There is no suit, action, notice, demand, claim
or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries nor, to
the knowledge of the Company, is there any investigation by any
Governmental Entity under way, in any case relating in any way to
alleged noncompliance by the Company or any of its subsidiaries
with, or liability of the Company or any of its subsidiaries under,
Environmental Laws.
(iv) The Company and its subsidiaries have not, and to
the Company's knowledge, no other person has, Released (as defined
below), placed, stored, buried or dumped any material quantities of
Hazardous Substances (as defined below) on, beneath or adjacent to
the Property or, to the knowledge of the Company, any property
formerly owned, operated or leased by the Company or its
subsidiaries, except for the presence of such Hazardous Substances
as would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(v) Neither the Company nor any of its subsidiaries has
entered into any agreement that requires them to pay to, reimburse,
guarantee, pledge, defend, indemnify or hold harmless any person
for or against any liabilities or costs in connection with any
pending or threatened suit, action, notice, proceeding or
investigation relating to alleged noncompliance with, or liability
under, Environmental Laws.
(vi) The Company and its subsidiaries have not
received any written notice or written order from any
25
Governmental Entity or private entity advising them that they are
responsible for or potentially responsible for Cleanup or paying
for the cost of Cleanup of any Hazardous Substances and neither the
Company nor any subsidiary has entered into any agreements
concerning such Cleanup, nor is the Company aware of any material
facts which the Company has specific grounds to believe will give
rise to such notice, order or agreement.
(vii) As used in this Agreement: "Cleanup" shall mean
all actions required to (a) cleanup, remove, treat or remediate
Hazardous Substances in the indoor or outdoor environment, (b)
prevent the Release of Hazardous Substances so that they do not
migrate, endanger or threaten to endanger public health or welfare
or the indoor or outdoor environment, (c) perform pre-remedial
studies and investigations and post-remedial monitoring and care,
(d) respond to any government requests for information or documents
in any way relating to cleanup, removal, treatment or remediation
or potential cleanup, removal, treatment or remediation of
Hazardous Substances in the indoor or outdoor environment or (e)
any administrative, judicial, or other proceedings related to the
above. "Environmental Laws" shall mean all applicable foreign,
federal, state and local laws, regulations, rules and ordinances
relating to pollution or protection of the environment or human
health and safety, including laws relating to Releases or
threatened Releases of Hazardous Substances into the indoor or
outdoor environment (including ambient air, surface water,
groundwater, land, surface and subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, Release, transport or handling of Hazardous
Substances and all laws and regulations with regard to
recordkeeping, notification, disclosure and reporting requirements
respecting Hazardous Substances, and all laws relating to
endangered or threatened species of fish, wildlife and plants and
the management or use of natural resources; "Hazardous Substance"
means: (a) any petrochemical or petroleum products, radioactive
materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment
that contain dielectric fluid containing levels of polychlorinated
biphenyls and radon gas; (b) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous
26
materials", "restricted hazardous materials", "extremely hazardous
substances", "toxic substances", "contaminants" or "pollutants" or
words of similar meaning and regulatory effect; or (c) any other
chemical, material or substance exposure to which is prohibited,
limited or regulated by any Environmental Law; and "Release" shall
mean any release, spill, emission, discharge, leaking, pumping,
injection, deposit, disposal, dispersal, leaching or
migration into the indoor or outdoor environment (including ambient
air, surface water, groundwater and surface or subsurface strata)
or into or out of any property, including the movement of Hazardous
Substances through or in the air, soil, surface water, groundwater
or property.
(t) Labor Relations and Employment. Except as disclosed
in the Filed SEC Documents or set forth in the Company Disclosure
Letter, as of the date of this Agreement: (i) there is no labor
strike, dispute, slowdown, stoppage or lockout actually pending, or
to the knowledge of the Company, threatened against or affecting
the business of the Company and its subsidiaries and during the
past two years there has not been any such action that was material
to the Company; (ii) to the knowledge of the Company, no union
claims to represent the employees of the Company and its
subsidiaries; (iii) neither the Company nor any subsidiary of the
Company is a party to or bound by any collective bargaining or
similar agreement with any labor organization, and no work rules or
practices agreed to with any labor organization or employee
association are applicable to employees of the Company or any
subsidiary; (iv) to the knowledge of the Company, none of the
employees of the Company or any subsidiary is represented by any
labor organization; (v) there is no unfair labor practice charge or
complaint against the Company or any subsidiary pending or, to the
knowledge of the Company, threatened before the National Labor
Relations Board or any similar state or foreign agency which, if
adversely determined, would have a Company Material Adverse Effect;
(vi) there is no grievance arising out of any collective bargaining
agreement or other grievance procedure which, if adversely
determined, would have a Company Material Adverse Effect; (vii) to
the knowledge of the Company, no charges with respect to or
relating to the Company or any subsidiary are pending before the
Equal Employment Opportunity Commission or any other agency
responsible for the prevention of unlawful employment
27
practices which, if adversely determined, would have a Company
Material Adverse Effect; and (viii) the Company has not received
notice of the intent of any federal, state, local or foreign agency
responsible for the enforcement of labor or employment laws to
conduct an investigation with respect to or relating to the Company
or any subsidiary and, to the knowledge of the Company, no such
investigation is in progress.
(u) Transactions with Affiliates. As of the date
hereof, except as disclosed in the Filed SEC Documents or in the
Company Disclosure Letter, (i) there are no outstanding amounts
payable to or receivable from, or advances by the Company or any of
its subsidiaries to, and neither the Company nor any subsidiary is
otherwise a creditor of or debtor to, BCP or any of its affiliates
or any officer, director or employee of the Company and (ii)
neither the Company nor any subsidiary is a party to any
transaction, agreement, arrangement or understanding with BCP or
any of its affiliates or any officer, director or employee of the
Company, other than, with respect to clauses (i) and (ii), items
arising out of the ordinary course of employment with the Company.
(v) Contracts. Each material note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument
or obligation to which the Company or any of its subsidiaries is a
party or by which any of them or any of their properties or assets
may be bound (the "Material Contracts") is valid and binding and in
full force and effect, except where failure to be valid and binding
and in full force and effect would not have a Company Material
Adverse Effect, and there are no defaults by the Company or any of
its subsidiaries or, to the Company's knowledge, any other party
thereto, thereunder, except those defaults that would not have a
Company Material Adverse Effect.
(w) Customers. Except for customary competitive factors
and the possible impact of the Transactions, as of the date of this
Agreement the Company does not know of any reason why any of its
top ten customers for 1996 may in the immediate future materially
reduce its purchase of products from the Company and its
subsidiaries.
(x) Product Liability. (1) Except as set forth
in the Company Disclosure Letter, there are no known
defects in design or methods of construction or
28
manufacture of Products (as defined below) which would adversely
affect performance or create an unusual risk of injury to persons
or property or which would require replacement, field fix,
retrofit, modification or recall and, to the Company's knowledge,
no facts or conditions exist which could reasonably be expected to
result in such a recall requirement. The Products have been
designed, manufactured and labeled so as to meet and comply in all
material respects with all applicable governmental standards and
specifications. As used in this Agreement, the term "Products"
means any and all products distributed or sold by the Company and
its subsidiaries, or by any predecessor of the Company and its
subsidiaries.
(2) Except as set forth in the Company Disclosure
Letter (A) there is no suit, action or proceeding pending or, to
the knowledge of the Company, threatened against the Company or any
of its subsidiaries concerning any Product which is alleged to have
been manufactured, shipped, sold, marketed, distributed, processed
or merchandised by the Company or any of its subsidiaries and
alleged to have a defect or impurity of any kind, in manufacture,
processing, design or otherwise, including any failure to warn of
the defect or impurity, nor to the knowledge of the Company is
there any valid basis for any such suit, action or proceeding,
specifically relating to any Product that could, individually or in
the aggregate, have a Company Material Adverse Effect and (B) there
has not been any product recall or post-sale warning by the Company
or any of its subsidiaries or any of their customers since December
31, 1993 concerning any Product that was manufactured, shipped,
sold, marketed, distributed, processed or merchandised by the
Company or any of its subsidiaries.
SECTION 4.02. Representations and Warranties of
Parent and Sub. Parent and Sub jointly and severally
represent and warrant to the Company as follows:
(a) Standing and Corporate Power. Each of Parent and
Sub is a corporation validly existing and in good standing under
the laws of the jurisdiction in which it is incorporated and has
the requisite corporate power and authority to carry on its
business as now being conducted.
(b) Authority; Noncontravention. Parent and Sub
have all the requisite corporate power and authority to
29
enter into this Agreement and to consummate the Transactions. The
execution and delivery of this Agreement and the consummation of
the Transactions have been duly authorized by all necessary
corporate action on the part of Parent and Sub. This Agreement has
been duly executed and delivered by Parent and Sub and constitutes
a valid and binding obligation of such party, enforceable against
such party in accordance with its terms. The execution and delivery
of the Operative Agreements do not, and the consummation of the
Transactions and compliance with the provisions of the Operative
Agreements will not, conflict with, or result in any violation of,
or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancelation or
acceleration of any obligation or to loss of a material benefit
under, or result in the creation of any Lien upon any of the
properties or assets of Parent or any of its subsidiaries under,
(i) the certificate of incorporation or by-laws of Parent or Sub or
the comparable charter or organizational documents of any other
subsidiary of Parent, (ii) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to Parent or
Sub or their respective properties or assets or (iii) subject to
the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Parent, Sub or any
other subsidiary of Parent or their respective properties or
assets, other than, in the case of clause (ii), any such conflicts,
violations, defaults, rights or Liens that individually or in the
aggregate would not (x) have a material adverse effect on Parent
and its subsidiaries taken as a whole, (y) impair the ability of
Parent and Sub to perform their respective obligations under this
Agreement or (z) prevent the consummation of any of the
Transactions. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity
is required by or with respect to Parent, Sub or any other
subsidiary of Parent in connection with the execution and delivery
of this Agreement or the consummation by Parent or Sub, as the case
may be, of any of the Transactions, except for (i) the filing of a
premerger notification and report form under the HSR Act, (ii) the
filing with the SEC of the Offer Documents and such reports under
Sections 13 and 16(a) of the Exchange Act as may be required in
connection with the Operative Agreements and the
30
Transactions, (iii) the filing of the Certificate of Merger with
the Delaware Secretary of State and appropriate documents with the
relevant authorities of other states in which the Company is
qualified to do business and (iv) such other consents, approvals,
orders, authorizations, registrations, declarations and filings as
may be required under (x) the laws of any foreign country in which
the Company or any of its subsidiaries conducts any business or
owns any property or assets or (y) the "takeover" or "blue sky"
laws of various states.
(c) Information Supplied. None of the information
supplied or to be supplied by Parent or Sub for inclusion or
incorporation by reference in the Offer Documents, the Schedule
14D-9, the Information Statement or the Proxy Statement will, in
the case of the Offer Documents, the Schedule 14D-9 and the
Information Statement, at the respective times the Offer Documents,
the Schedule 14D-9 and the Information Statement are filed with the
SEC or first published, sent or given to the Company's
stockholders, or, in the case of the Proxy Statement, at the date
the Proxy Statement is first mailed to the Company's stockholders
or at the time of the meeting of the Company's stockholders held to
vote on approval and adoption of this Agreement, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
are made, not misleading. The Offer Documents will comply as to
form in all material respects with the requirements of the Exchange
Act and the rules and regulations promulgated thereunder, except
that no representation or warranty is made by Parent or Sub with
respect to statements made or incorporated by reference therein
based on information supplied by the Company for inclusion or
incorporation by reference therein.
(d) Brokers. No broker, investment banker, financial
advisor or other person, other than Xxxxxx Automotive
International, Inc., the fees and expenses of which shall be paid
by Parent, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Parent
or Sub.
31
(e) Financing. Parent and Sub have funds available
sufficient to consummate the Offer and the Merger on the terms
contemplated by the Operative Agreements, and, at the expiration of
the Offer and the Effective Time of the Merger, Parent and Sub
shall have available all of the funds necessary for the acquisition
of all shares of Common Stock pursuant to the Offer and the Merger,
as the case may be, and to perform their respective obligations
under this Agreement.
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business. (a) Ordinary
Course. During the period from the date of this Agreement to the earlier of the
Effective Time of the Merger and the appointment or election of Sub's designees
to the Company Board pursuant to Section 6.07 (such earlier time, the "Control
Time"), the Company shall, and shall cause its subsidiaries to, carry on their
respective businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and, to the extent
consistent therewith, use all reasonable efforts to preserve intact their
current business organizations, keep available the services of their current
officers and employees and preserve their relationships with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with them to the end that their goodwill and ongoing businesses shall
be unimpaired at the Effective Time of the Merger. Without limiting the
generality of the foregoing, except as contemplated by this Agreement or
otherwise approved in writing by Parent, during the period from the date of
this Agreement to the Control Time, the Company shall not, and shall not permit
any of its subsidiaries to:
(i) (A) declare, set aside or pay any dividends on, or
make any other distributions in respect of, any of its capital
stock, other than dividends and distributions by any direct or
indirect wholly owned subsidiary of the Company to its parent, (B)
split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock or (C)
purchase, redeem or otherwise acquire any shares of capital stock
of the Company or any of its subsidiaries or any other securities
thereof
32
or any rights, warrants or options to acquire any such shares or
other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber
any shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible
securities, other than the issuance of Common Stock upon the
exercise of Stock Options outstanding on the date of this Agreement
in accordance with their present terms;
(iii) amend its certificate of incorporation, by-
laws or other comparable charter or organizational
documents;
(iv) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business
organization or division thereof or (B) any assets that are
material, individually or in the aggregate, to the Company and its
subsidiaries taken as a whole, except purchases of inventory in the
ordinary course of business consistent with past practice;
(v) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of any of its
properties or assets, except sales of inventory in the ordinary
course of business consistent with past practice;
(vi) (A) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell
any debt securities or warrants or other rights to acquire any debt
securities of the Company or any of its subsidiaries, guarantee any
debt securities of another person, enter into any "keep well" or
other agreement to maintain any financial statement condition of
another person or enter into any arrangement having the economic
effect of any of the foregoing, except for short-term borrowings
incurred in the ordinary course of business consistent with past
practice and pursuant to existing agreements, or (B) make any
loans, advances or capital contributions to, or investments in, any
other person, other than to the Company or any direct or indirect
wholly owned subsidiary of the Company;
33
(vii) make or agree to make any new capital expenditure
or expenditures which, individually, is in excess of $30,000 or, in
the aggregate, are in excess of $250,000;
(viii) (A) grant to any officer of the Company or any
of its subsidiaries any increase in compensation, except as was
required under employment agreements in effect as of December 31,
1996, (B) grant to any officer of the Company or any of its
subsidiaries any increase in severance or termination pay, except
as was required under employment, severance or termination
agreements in effect as of December 31, 1996, (C) enter into any
employment, severance or termination agreement with any officer of
the Company or any of its subsidiaries or (D) amend any Benefit
Plan in any respect;
(ix) make any change in accounting methods, principles
or practices materially affecting the Company's assets, liabilities
or business, except insofar as may have been required by a change
in generally accepted accounting principles;
(x) pay, discharge, settle or satisfy any material
claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment,
discharge, settlement or satisfaction, in the ordinary course of
business consistent with past practice or in accordance with their
terms;
(xi) except in the ordinary course of business, modify,
amend or terminate any Material Contract or waive or release or
assign any material rights or claims;
(xii) make any material tax election or settle or
compromise any material income tax liability; or
(xiii) authorize any of, or commit or agree to take
any of, the foregoing actions.
(b) Other Actions. The Company shall not, and
shall not permit any of its subsidiaries to, take any action that would, or
that could reasonably be expected to, result in (i) any of the representations
and warranties of the Company set forth in this Agreement that are qualified as
to materiality becoming untrue, (ii) any of such representations and warranties
that are not so qualified
34
becoming untrue in any material respect or (iii) except as otherwise permitted
by Section 5.02, any of the conditions to the Offer set forth in Exhibit A, or
any of the conditions to the Merger set forth in Article VII, not being
satisfied. The Company shall take appropriate action to postpone the annual
meeting of stockholders of the Company originally scheduled to be held on April
30, 1997 until termination of this Agreement, and until such time the Company
shall take no further action with respect to the matters contemplated to be
considered by the stockholders at such meeting.
(c) Advice of Changes. The Company shall promptly
advise Parent orally and in writing of any change or event having, or which,
insofar as can reasonably be foreseen, would have, a material adverse effect
on the Company and its subsidiaries taken as a whole.
SECTION 5.02. No Solicitation. (a) The Company
shall not, nor shall it permit any of its subsidiaries to, nor shall it
authorize or permit any officer, director or employee of, or any investment
banker, attorney or other advisor or representative of, the Company or any of
its subsidiaries to, (i) solicit, initiate or encourage the submission of, any
takeover proposal (as defined below), (ii) except as provided in Section
5.02(b), enter into any agreement with respect to any takeover proposal or
(iii) participate in any discussions or negotiations regarding, or furnish to
any person any non-public information with respect to the Company, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any takeover proposal;
provided, however, that prior to the acceptance for payment of shares of Common
Stock pursuant to the Offer, to the extent required by the fiduciary
obligations of the Company Board, as determined in good faith by a majority of
the members thereof based on the advice of outside counsel, the Company may, in
response to an unsolicited bona fide takeover proposal from a person that the
Company Board reasonably believes has the financial ability to make a superior
proposal (as defined in Section 5.02(b)), subject to compliance with Section
5.02(c), furnish non-public information with respect to the Company to such
person pursuant to a customary confidentiality agreement and participate in
discussions or negotiations (including the solicitation of revised takeover
proposals) with such person. Without limiting the foregoing, it is understood
that any violation of the restrictions set forth in the preceding sentence by
any executive officer of the Company or any of its subsidiaries or any
investment banker,
35
attorney or other advisor or representative of the Company or any of its
subsidiaries shall be deemed to be a breach of this Section 5.02(a) by the
Company. For purposes of this Agreement, "takeover proposal" means any proposal
for a merger or other business combination involving the Company or any of its
subsidiaries or any proposal or offer to acquire in any manner, directly or
indirectly, more than 30% of the equity securities of the Company or more than
30% of the Company's consolidated total assets, other than the Transactions.
(b) Neither the Company Board nor any committee
thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Parent or Sub, the approval or recommendation by the Company
Board or any such committee of the Offer, this Agreement or the Merger or (ii)
approve or recommend, or propose to approve or recommend, any takeover
proposal. Notwithstanding the foregoing, the Company Board, to the extent
required by the fiduciary obligations thereof, as determined in good faith by a
majority of the members thereof based on the advice of outside counsel, may
approve or recommend (and, in connection therewith withdraw or modify its
approval or recommendation of the Offer, this Agreement or the Merger) a
superior proposal. For purposes of this Agreement, "superior proposal" means a
bona fide takeover proposal made by a third party on terms which the Company
Board determines in its good faith judgment to be more favorable to the
Company's stockholders than the Offer and the Merger.
(c) The Company promptly shall advise Parent
orally and in writing of any takeover proposal or any inquiry with respect to
or which could lead to any takeover proposal and the identity of the person
making any such takeover proposal or inquiry. The Company shall keep Parent
fully informed of the status and details of any such takeover proposal or
inquiry. Nothing in this Section 5.02(c) shall require the Company or the
Company Board to take any action that the Company Board determines in good
faith, based on the advice of outside counsel, would be inconsistent with the
fiduciary duties of the Company Board.
(d) Nothing in this Section 5.02 shall prevent
the Company and the Company Board from complying with Rule 14e-2 under the
Exchange Act, or issuing a communication meeting the requirements of Rule
14d-9(e) under the Exchange Act, with respect to any tender offer; provided,
however, that the Company may not, except as permitted by Section 5.02(b),
withdraw or modify its
36
position with respect to the Offer or the Merger or approve or recommend, or
propose to approve or recommend, a takeover proposal.
ARTICLE VI
Additional Agreements
SECTION 6.01. Stockholder Approval; Preparation
of Proxy Statement. (a) If stockholder adoption of this Agreement is required
by law, the Company shall, at Parent's request, as soon as practicable
following the expiration of the Offer, duly call, give notice of, convene and
hold a meeting of its stockholders (the "Stockholders Meeting") for the purpose
of adopting this Agreement. The Company shall, through the Company Board,
recommend to its stockholders adoption of this Agreement, except to the extent
that the Company Board shall have withdrawn or modified its approval or
recommendation of the Offer, this Agreement or the Merger as permitted by
Section 5.02(b). Notwithstanding the foregoing, if Sub or any other subsidiary
of Parent shall acquire at least 90% of the outstanding shares of Common Stock,
the parties shall take all necessary and appropriate action to cause the Merger
to become effective as soon as practicable after the expiration of the Offer
without a Stockholders Meeting in accordance with Section 253 of the DGCL.
Without limiting the generality of the foregoing, the Company's obligations
pursuant to the first sentence of this Section 6.01(a) shall not be affected by
(i) the commencement, public proposal, public disclosure or communication to
the Company of any takeover proposal or (ii) the withdrawal or modification by
the Company Board of its approval or recommendation of the Offer, this
Agreement or the Merger.
(b) If stockholder adoption of this Agreement is
required by law, the Company shall, at Parent's request, as soon as practicable
following the expiration of the Offer, prepare and file a preliminary Proxy
Statement with the SEC and shall use its best efforts to respond to any
comments of the SEC or its staff and to cause the Proxy Statement to be mailed
to the Company's stockholders as promptly as practicable after such filing. The
Company shall notify Parent promptly of the receipt of any comments from the
SEC or its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and shall
supply Parent with copies of all correspondence between the Company or any of
its representatives, on the one hand, and the SEC or its staff,
37
on the other hand, with respect to the Proxy Statement or the Merger. If at any
time prior to the adoption of this Agreement by the Company's stockholders
there shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement, the Company shall promptly prepare and mail
to its stockholders such an amendment or supplement. The Company shall not mail
any Proxy Statement, or any amendment or supplement thereto, to which Parent
reasonably objects.
(c) Parent shall cause all shares of Common Stock
purchased pursuant to the Offer and all other shares of Common Stock owned by
Sub or any other subsidiary of Parent to be voted in favor of the adoption of
this Agreement.
SECTION 6.02. Access to Information;
Confidentiality. The Company shall, and shall cause each of its subsidiaries
to, afford to Parent, and to Parent's officers, employees, accountants,
counsel, financial advisers and other representatives, reasonable access during
normal business hours during the period prior to the Effective Time of the
Merger to all their respective properties, books, contracts, commitments,
personnel and records and, during such period, the Company shall, and shall
cause each of its subsidiaries to, furnish promptly to Parent (a) a copy of
each report, schedule, registration statement and other document filed by it
during such period pursuant to the requirements of Federal or state securities
laws and (b) all other information concerning its business, properties and
personnel as Parent may reasonably request. All such information shall be held
in accordance with the confidentiality agreement (the "Confidentiality
Agreement") dated March 12, 1997.
SECTION 6.03. Best Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this Agreement,
unless, to the extent permitted by Section 5.02(b), the Company Board approves
or recommends a superior proposal, each of the parties shall use its best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the Offer, the Merger, and the other
Transactions, including (i) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings (including filings with
Governmental Entities, if any) and the taking of all reasonable steps as may be
necessary to obtain an approval
38
or waiver from, or to avoid an action or proceeding by, any Governmental
Entity, (ii) the obtaining of all necessary consents, approvals or waivers from
third parties, (iii) the defending of any lawsuits or other legal proceedings,
whether judicial or administrative, challenging any Operative Agreement or the
consummation of any of the Transactions, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed and (iv) the execution and delivery of any additional
instruments necessary to consummate the Transactions and to fully carry out the
purposes of the Operative Agreements. In connection with and without limiting
the foregoing, the Company and the Company Board shall (i) take all action
necessary to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to the Offer, the Merger, any Operative
Agreement or any of the other Transactions and (ii) if any state takeover
statute or similar statute or regulation becomes applicable to the Offer, the
Merger, any Operative Agreement or any other Transaction, take all action
necessary to ensure that the Offer, the Merger and the other Transactions may
be consummated as promptly as practicable on the terms contemplated by the
Operative Agreements and otherwise to minimize the effect of such statute or
regulation on the Offer, the Merger and the other Transactions. Notwithstanding
the foregoing, the Company Board shall not be prohibited from taking any action
permitted by Section 5.02(b).
(b) The Company shall give prompt notice to
Parent, and Parent or Sub shall give prompt notice to the Company, of (i) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
SECTION 6.04. Stock Options. (a) Either prior
to or as soon as practicable following the consummation of the Offer, the
Company Board (or, if appropriate, any committee administering the Stock Plans)
shall adopt such resolutions or take such other actions as are required to
39
adjust the terms of all outstanding Stock Options heretofore granted under any
stock option program or arrangement of the Company (collectively, the "Stock
Plans") or any other stock option plan to provide that, at the Effective Time
of the Merger, each Stock Option outstanding immediately prior to the
acceptance for payment of shares of Common Stock pursuant to the Offer shall be
canceled in exchange for a cash payment by the Company of, or can only be
exercised for net cash equal to, an amount equal to (i) the excess, if any, of
(A) the price per share of Common Stock to be paid pursuant to the Offer over
(B) the exercise price per share of Common Stock subject to such Stock Option,
multiplied by (ii) the number of shares of Common Stock for which such Stock
Option shall not theretofore have been exercised. The Company represents and
warrants that no consents of the holders of the Stock Options are necessary to
effectuate the foregoing cash-out. After the date of this Agreement, neither
the Company Board nor any committee thereof shall cause any Stock Option to
become exercisable as a result of the execution of the Operative Agreements or
the consummation of the Transactions.
(b) All amounts payable pursuant to this Section 6.04
shall be subject to any required withholding of taxes and shall be
paid without interest.
(c) The Stock Plans shall terminate as of the
Effective Time of the Merger, and the provisions in any other Benefit Plan
providing for the issuance, transfer or grant of any capital stock of the
Company or any interest in respect of any capital stock of the Company shall be
deleted as of the Effective Time of the Merger, and the Company shall ensure
that following the Effective Time of the Merger no holder of a Stock Option or
any participant in any Stock Plan or other Benefit Plan shall have any right
thereunder to acquire any capital stock of the Company or the Surviving
Corporation.
SECTION 6.05. Benefit Plans. Except as provided
in Section 6.04(c), Parent shall cause the Surviving Corporation, for a period
of six months after the Effective Time of the Merger, to provide benefits to
employees of the Company and its subsidiaries that are no less favorable in the
aggregate to such employees than those in effect on the date of this Agreement.
SECTION 6.06. Indemnification. Parent and Sub
agree that all rights to indemnification for acts or omissions occurring prior
to the Effective Time of the Merger now existing in favor of the current or
former
40
directors or officers of the Company and its subsidiaries as provided in their
respective certificates of incorporation or by-laws shall survive the Merger
and shall continue in full force and effect in accordance with their terms for
a period of not less than six years from the Effective Time of the Merger, and
Parent shall ensure that all such rights to indemnification are honored on a
timely basis. Parent shall cause to be maintained for a period of not less than
three years from the Effective Time of the Merger the Company's current
directors' and officers' insurance and indemnification policy to the extent
that it provides coverage for events occurring prior to the Effective Time of
the Merger (the "D&O Insurance") for all persons who are directors and officers
of the Company on the date of this Agreement, so long as the annual premium
therefor would not be in excess of 150% of the last annual premium paid prior
to the date of this Agreement (such 150% amount, the "Maximum Premium");
provided, however, that Parent may substitute therefor policies of
substantially equivalent coverage and amounts containing terms no less
favorable to such directors or officers. If the existing D&O Insurance expires,
is terminated or canceled during such three-year period, Parent shall use its
best efforts to cause to be obtained as much D&O Insurance as can be obtained
for the remainder of such period for an annualized premium not in excess of the
Maximum Premium, on terms and conditions no less advantageous than the existing
D&O Insurance. The Company represents to Parent that the Maximum Premium is
$462,000. Following the date hereof, the Company will not amend or modify the
D&O Insurance.
SECTION 6.07. Directors. Promptly upon the
acceptance for payment of, and payment by Sub for, any shares of Common Stock
pursuant to the Offer, Sub shall be entitled to designate such number of
directors on the Company Board as shall give Sub, subject to compliance with
Section 14(f) of the Exchange Act, representation on the Company Board equal to
at least that number of directors, rounded up to the next whole number, which
is the product of (a) the total number of directors on the Company Board
(giving effect to the directors elected pursuant to this sentence) multiplied
by (b) the percentage that (i) such number of shares of Common Stock so
accepted for payment and paid for by Sub plus the number of shares of Common
Stock otherwise owned by Sub or any other subsidiary of Parent bears to (ii)
the number of such shares outstanding, and the Company shall, at such time,
cause Sub's designees to be so elected; provided, however, that in the event
that Sub's designees are appointed or elected to the Company Board, until the
Effective Time of the Merger such Board of
41
Directors shall have at least two directors who are Directors on the date of
this Agreement and who are not officers of the Company (the "Independent
Directors") or shall have at least three Independent Directors in the event the
total number of directors on the Company Board is greater than six; and
provided further that, in such event, if the number of Independent Directors
shall be reduced below two for any reason whatsoever, any remaining Independent
Directors (or Independent Director, if there shall be only one remaining) shall
be entitled to designate persons to fill such vacancies who shall be deemed to
be Independent Directors for purposes of this Agreement or, if no Independent
Directors then remain, the other directors shall designate two persons to fill
such vacancies who shall not be officers, stockholders or affiliates of the
Company, Parent or Sub, and such persons shall be deemed to be Independent
Directors for purposes of this Agreement. Subject to applicable law, the
Company shall take all action requested by Parent necessary to effect any such
election, including mailing to its stockholders the Information Statement
containing the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder, and the Company shall make such mailing with
the mailing of the Schedule 14D-9 (provided that Sub shall have provided to the
Company on a timely basis all information required to be included in the
Information Statement with respect to Sub's designees). In connection with the
foregoing, the Company shall promptly, at the option of Sub, either increase
the size of the Company Board or obtain the resignation of such number of its
current directors as is necessary to enable Sub's designees to be elected or
appointed to the Company Board as provided above. The provisions of this
Section 6.07 are in addition to and shall not limit any rights which Sub,
Parent or any of their affiliates may have as a holder or beneficial owner of
shares of Common Stock as a matter of law with respect to the election of
directors or otherwise.
SECTION 6.08. Fees and Expenses. (a) Except as
provided below and in Section 6.10, all fees and expenses incurred in
connection with the Offer, the Merger, this Agreement and the Transactions
shall be paid by the party incurring such fees or expenses, whether or not the
Offer or the Merger is consummated.
(b) The Company shall pay to Xxxxxxx PLC, the
sole stockholder of Parent, upon demand a fee of $15,000,000 (the "Termination
Fee"), payable in same day funds, if:
42
(i) this Agreement shall be terminated pursuant to
Section 8.01(b)(i) as a result of the failure of any condition set
forth in paragraph (d) of Exhibit A;
(ii) (A) after the date of this Agreement, any person
or "group" (within the meaning of Section 13(d)(3) of the Exchange
Act) shall have publicly made a takeover proposal, (B) the Offer
shall have remained open until at least the scheduled expiration
date immediately following the date such takeover proposal is made
(and in any event for at least ten business days following the date
such takeover proposal is made), (C) the Minimum Tender Condition
shall not have been satisfied at the expiration of the Offer and
(D) this Agreement shall thereafter be terminated pursuant to
Section 8.01(b)(i); or
(iii) this Agreement shall be terminated pursuant to
Section 8.01(c) or 8.01(d).
SECTION 6.09. Public Announcements. Parent and
Sub, on the one hand, and the Company, on the other hand, shall consult with
each other before issuing, and provide each other the opportunity to review and
comment upon, any press release or other public statements with respect to the
Transactions, including the Offer and the Merger, and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by applicable law, court process or by obligations
pursuant to any listing agreement with any national securities exchange.
SECTION 6.10. Transfer Taxes. Parent shall pay
or cause Sub to pay any state or local sales, use, transfer tax or similar tax
(including any real property transfer or gains tax) payable in connection with
the consummation of the Offer and/or the Merger (collectively, the "Transfer
Taxes"). The Company agrees to cooperate with Parent or Sub, as the case may
be, in the filing of any returns with respect to the Transfer Taxes, including
supplying in a timely manner a complete list of all real property interests
held by the Company and its subsidiaries and any information with respect to
such property that is reasonably necessary to complete such returns. The
portion of the consideration allocable to the assets giving rise to such
Transfer Taxes shall be agreed to by the Company and the Parent.
43
ARTICLE VII
Conditions Precedent
The respective obligation of each party to effect
the Merger is subject to the satisfaction or waiver on or
prior to the Closing Date of the following conditions:
(a) Stockholder Approval. If required by applicable
law, this Agreement shall have been adopted by the affirmative vote
or consent of the holders of a majority of the outstanding shares
of Common Stock in accordance with applicable law and the Company's
Restated Certificate of Incorporation.
(b) HSR Act. The waiting period (and any extension
thereof) applicable to the Merger under the HSR Act shall have been
terminated or shall have expired.
(c) No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger
shall be in effect; provided, however, that each of the parties
shall have used its best efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any
injunction or other order that may be entered.
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination. This Agreement may be
terminated at any time prior to the Effective Time of the Merger, whether
before or after approval of matters presented in connection with the Merger by
the stockholders of the Company:
(a) by mutual written consent of Parent and the
Company;
(b) by either Parent or the Company:
(i) if Sub shall not have purchased any
shares of Common Stock pursuant to the Offer prior
44
to December 31, 1997; provided, however, that the
passage of such period shall be tolled for any part
thereof during which any party shall be subject to a
nonfinal order, decree, ruling or action restraining,
enjoining or otherwise prohibiting the purchase of
shares of Common Stock pursuant to the Offer or the
consummation of the Merger; and provided further that
the right to terminate this Agreement pursuant to this
Section 8.01(b)(i) shall not be available to any party
whose failure to fulfill any of its obligations under
any Operative Agreement results in the failure of any
such condition; or
(ii) if any Governmental Entity shall have
issued an order, decree or ruling or taken any other
action permanently enjoining, restraining or otherwise
prohibiting the purchase of shares of Common Stock
pursuant to the Offer or the Merger and such order,
decree, ruling or other action shall have become final
and nonappealable;
(c) by the Company if (x) to the extent permitted by
Section 5.02(b), the Company Board approves or recommends a
superior proposal and (y) the Company has paid to Parent an amount
in cash equal to the sum of the Termination Fee; or
(d) by Parent or Sub if Sub terminates the Offer as a
result of the occurrence of any event set forth in paragraph (d) of
Exhibit A to this Agreement.
SECTION 8.02. Effect of Termination. In the event
of termination of this Agreement by either the Company or Parent as provided in
Section 8.01, this Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Parent, Sub or the Company,
other than the provisions of Section 4.01(o), Section 4.02(d), the last
sentence of Section 6.02, Section 6.08, this Section 8.02 and Article IX and
except to the extent that such termination results from the wilful and material
breach by a party of any of its representations, warranties, covenants or
agreements set forth in the Operative Agreements.
SECTION 8.03. Amendment. This Agreement may be
amended by the parties at any time before or after any required approval of
matters presented in connection with the Merger by the stockholders of the
Company; provided, however, that after any such approval, there shall not be
45
made any amendment that by law requires further approval by such stockholders
without the further approval of such stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties.
SECTION 8.04. Extension; Waiver. At any time
prior to the Effective Time of the Merger, the parties may (a) extend the time
for the performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations and warranties
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) subject to the proviso of Section 8.03, waive compliance with
any of the agreements or conditions contained in this Agreement. Any agreement
on the part of a party to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party. The
failure of any party to this Agreement to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of those rights.
SECTION 8.05. Procedure for Termination,
Amendment, Extension or Waiver. A termination of this Agreement pursuant to
Section 8.01, an amendment of this Agreement pursuant to Section 8.03 or an
extension or waiver pursuant to Section 8.04 shall, in order to be effective,
require (a) in the case of Parent, Sub or the Company, action by its Board of
Directors or the duly authorized designee of its Board of Directors and (b) in
the case of the Company, action by a majority of the members of the Company
Board who were members thereof on the date of this Agreement and remain as such
hereafter or the duly authorized designee of such members; provided, however,
that in the event that Sub's designees are appointed or elected to the Company
Board as provided in Section 6.07, after the acceptance for payment of shares
of Common Stock pursuant to the Offer and prior to the Effective Time of the
Merger, the affirmative vote of a majority of the Independent Directors, in
lieu of the vote required pursuant to clause (b) above, shall be required by
the Company to (i) amend or terminate this Agreement, (ii) exercise or waive
any of the Company's rights or remedies under this Agreement or (iii) extend
the time for performance of Parent's and Sub's respective obligations under
this Agreement.
46
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and
Warranties. None of the representations and warranties in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time of the Merger. This Section 9.01 shall not limit any covenant or agreement
of the parties which by its terms contemplates performance after the Effective
Time of the Merger.
SECTION 9.02. Notices. All notices, requests,
claims, demands and other communications under this Agreement shall be in
writing and shall be deemed given if delivered personally or sent by overnight
courier (providing proof of delivery) to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Xxxxxxx Corporation
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxx
(b) if to the Company, to
000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx
with a copy to:
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxx
47
SECTION 9.03. Definitions. For purposes of this
Agreement:
An "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such
first person. For the purposes of Section 4.01(u), BCP shall be
deemed not an affiliate of any portfolio company in which Bessemer
Holdings, L.P. has a controlling equity interest.
"material" means, when used in connection with the
Company or Parent, material to the business, financial condition or
results of operations of such party and its subsidiaries taken as a
whole, and the term "materially" has a correlative meaning.
"material adverse change" or "material adverse effect"
means, when used in connection with the Company or Parent, any
change or effect (or any development that, insofar as can
reasonably be foreseen, is likely to result in any change or
effect) that is materially adverse to the business, properties,
assets, condition (financial or otherwise), results of operations
or prospects of such party and its subsidiaries taken as a whole.
"person" means an individual, corporation, partnership,
company, limited liability company, joint venture, association,
trust, unincorporated organization or other entity.
A "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if
there are no such voting Interests, 50% or more of the equity
interests of which) is owned directly or indirectly by such first
person and in the case of the Company shall include the Company's
joint venture with Jideco of Bardstown, Inc.
SECTION 9.04. Interpretation. When a reference
is made in this Agreement to a Section or Exhibit, such reference shall be to a
Section of, or an Exhibit to, this Agreement unless otherwise indicated. The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
48
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
SECTION 9.05. Counterparts. This Agreement may
be executed in one or more counterparts, all of which shall be considered one
and the same agreement and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other parties.
SECTION 9.06. Entire Agreement; No Third-Party
Beneficiaries. The Operative Agreements and the Confidentiality Agreement (a)
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of the Operative Agreements and (b) except for the provisions of
Article III and Section 6.06, are not intended to confer upon any person other
than the parties any rights or remedies hereunder.
SECTION 9.07. Governing Law. This Agreement
shall be governed by, and construed in accordance with, the laws of the State
of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflict of laws thereof.
SECTION 9.08. Assignment. Neither this Agreement
nor any of the rights, interests or obligations under this Agreement shall be
assigned, in whole or in part, by operation of law or otherwise by any of the
parties without the prior written consent of the other parties, except that Sub
may assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly
owned subsidiary of Parent, but no such assignment shall relieve Sub of any of
its obligations under this Agreement. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable
by, the parties and their respective successors and assigns.
SECTION 9.09. Enforcement. The parties agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement in any
court of the United States located in the State of New York, this being
49
in addition to any other remedy to which they are entitled at law or in equity.
In addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any Federal court located in the State of New York in
the event any dispute arises out of any Operative Agreement or any of the
Transactions, (b) agrees that it shall not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court
and (c) agrees that it shall not bring any action relating to any Operative
Agreement or any of the Transactions in any court other than a Federal or state
court sitting in the State of New York.
IN WITNESS WHEREOF, Parent, Sub and the Company
have caused this Agreement to be signed by their respective officers thereunto
duly authorized, all as of the date first written above.
XXXXXXX CORPORATION,
by
/s/ Xxxxx X. Xxxxxx
---------------------
Name: Xxxxx X. Xxxxxx
Title: Power of Attorney
E&W ACQUISITION CORP.,
by
/s/ Xxxxxxxx X. Xxxxx
---------------------
Name: Xxxxxxxx X. Xxxxx
Title: Chief Executive
Officer and
President
STANT CORPORATION,
by
/s/ Xxxx X. Xxxxxx
---------------------
Name: Xxxx X. Xxxxxx
Title: President and
Chief Executive
Officer
EXHIBIT A
Conditions of the Offer
Notwithstanding any other term of the Offer or
this Agreement, Sub shall not be required to accept for payment or, subject to
any applicable rules and regulations of the SEC, including Rule 14e-l(c) under
the Exchange Act (relating to Sub's obligation to pay for or return tendered
shares of Common Stock after the termination or withdrawal of the Offer), to
pay for any shares of Common Stock tendered pursuant to the Offer unless (i)
there shall have been validly tendered and not withdrawn prior to the
expiration of the Offer that number of shares of Common Stock which would
represent at least a majority of the Fully Diluted Shares (the "Minimum Tender
Condition") and (ii) any waiting period under the HSR Act applicable to the
purchase of shares of Common Stock pursuant to the Offer shall have expired or
been terminated. The term "Fully Diluted Shares" means all outstanding
securities entitled generally to vote in the election of directors of the
Company on a fully diluted basis, after giving effect to the exercise or
conversion of all options, rights and securities exercisable or convertible
into such voting securities. Furthermore, notwithstanding any other term of the
Offer or this Agreement, Sub shall not be required to accept for payment or,
subject as aforesaid, to pay for any shares of Common Stock not theretofore
accepted for payment or paid for, and may terminate 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 exists:
(a) there shall be threatened or pending any suit,
action or proceeding by any Governmental Entity or any other person
(in the case of any suit, action or proceeding by a person other
than a Governmental Entity, such suit, action or proceeding having
a reasonable likelihood of success) (i) challenging the acquisition
by Parent or Sub of any shares of Common Stock, seeking to restrain
or prohibit the making or consummation of the Offer or the Merger
or the performance of any of the other Transactions, or seeking to
obtain from the Company, Parent or Sub any damages that are
material in relation to the Company and its subsidiaries taken as
whole, (ii) seeking to prohibit or limit the ownership or operation
by the Company, Parent or any of their respective subsidiaries of
any material portion of the business or assets of the Company,
Parent or any of their respective subsidiaries, or to compel the
Company, Parent or any of their respective subsidiaries to dispose
of or hold separate any material portion of the business or assets
2
of the Company, Parent or any of their respective subsidiaries, as
a result of the Offer or any of the other Transactions, (iii)
seeking to impose limitations on the ability of Parent or Sub to
acquire or hold, or exercise full rights of ownership of, any
shares of Common Stock, including the right to vote the Common
Stock purchased by it on all matters properly presented to the
stockholders of the Company, (iv) seeking to prohibit Parent or any
of its subsidiaries from effectively controlling in any material
respect the business or operations of the Company or its
subsidiaries, or (v) which otherwise is reasonably likely to have a
material adverse effect on the business, properties, assets,
condition (financial or otherwise), results of operations or
prospects of the Company and its subsidiaries taken as a whole;
(b) there shall be any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction
threatened, proposed, sought, enacted, entered, enforced,
promulgated, amended or issued with respect to, or deemed
applicable to, or any consent or approval withheld with respect to,
(i) Parent, the Company or any of their respective subsidiaries or
(ii) the Offer, the Merger or any of the other Transactions by any
Governmental Entity or before any court or governmental authority,
agency or tribunal, domestic or foreign, that has a substantial
likelihood of resulting, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph
(a) above;
(c) since the date of this Agreement there shall have
occurred any material adverse change, or any development that,
insofar as reasonably can be foreseen, is reasonably likely to
result in a material adverse change, in the business, properties,
assets, condition (financial or otherwise), results of operations
or prospects of the Company and its subsidiaries taken as a whole,
other than changes relating to the economy in general or to the
Company's industry in general and not specifically relating to the
Company or any of its subsidiaries;
(d)(i) the Company Board or any committee thereof shall
have withdrawn or modified in a manner adverse to Parent or Sub its
approval or recommendation of the Offer, the Merger or this
Agreement, or approved or recommended any takeover proposal or (ii)
the Company
3
Board or any committee thereof shall have resolved to do any of
the foregoing;
(e) there shall have occurred (i) any general
suspension of trading in, or limitation on prices for, securities
on the New York Stock Exchange or in the London Stock Exchange, for
a period in excess of 24 hours (excluding suspensions or
limitations resulting solely from physical damage or interference
with such exchanges not related to market conditions), (ii) a
declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States (whether or not
mandatory), (iii) a commencement of war, armed hostilities or other
international or national calamity directly or indirectly involving
the United States or involving the United Kingdom and, in the case
of armed hostilities involving the United Kingdom, having, or which
could reasonably be expected to have, a substantial continuing
general effect on business and financial conditions in the United
Kingdom, (iv) any limitation (whether or not mandatory) by any
United States or the United Kingdom governmental authority on the
extension of credit generally by banks or other financial
institutions or (v) in the case of any of the foregoing existing at
the time of the commencement of the Offer, a material acceleration
or worsening thereof;
(f) any of the representations and warranties of the
Company set forth in this Agreement that are qualified as to
materiality shall not be true and correct and any such
representations and warranties that are not so qualified shall not
be true and correct in any material respect, in each case as if
such representations and warranties were made as of such time;
(g) the Company shall have failed to perform in any
material respect any obligation or to comply in any material
respect with any agreement or covenant of the Company to be
performed or complied with by it under this Agreement; or
(h) this Agreement shall have been terminated in
accordance with its terms,
which, in the reasonable judgment of Sub, in any such case, giving rise to any
such condition, makes it inadvisable to proceed with the Offer and/or with such
acceptance for payment of or payment for any of the Shares.
4
Subject to Section 1.01(a), the foregoing
conditions (i) may be asserted by Parent and Sub regardless of the
circumstances giving rise to such condition and (ii) are for the sole benefit
of Parent and Sub and may be waived by Parent or Sub, in whole or in part at
any time and from time to time in the sole discretion of Parent or Sub. The
failure by Parent or Sub at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to
time.
