Exhibit 2
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AGREEMENT AND PLAN OF MERGER
By and Among
RICHTON INTERNATIONAL CORPORATION,
DEERE & COMPANY
and
GREEN MERGERSUB, INC.
Dated as of May 29, 2001
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms...........................................2
Section 1.2 Cross-References................................................5
ARTICLE II
THE MERGER
Section 2.1 The Merger......................................................8
Section 2.2 Effect on Securities............................................9
Section 2.3 Share Election.................................................11
Section 2.4 Proration......................................................13
Section 2.5 Exchange of Certificates.......................................14
Section 2.6 Transfer Taxes; Withholding....................................16
Section 2.7 Stock Options..................................................16
Section 2.8 Warrants.......................................................18
Section 2.9 Lost Certificates..............................................18
Section 2.10 Dissenting Shares..............................................19
ARTICLE III
THE SURVIVING CORPORATION
Section 3.1 Certificate of Incorporation...................................19
Section 3.2 By-laws........................................................19
Section 3.3 Officers and Board of Directors................................20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization and Qualification; Subsidiaries...................20
Section 4.2 Certificate of Incorporation and By-Laws.......................21
Section 4.3 Capitalization.................................................21
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Section 4.4 Authority Relative to Agreement..................................23
Section 4.5 No Conflict; Required Filings and Consents.......................23
Section 4.6 Permits; Compliance..............................................24
Section 4.7 Contracts........................................................25
Section 4.8 Company SEC Reports..............................................26
Section 4.9 Disclosure Documents.............................................27
Section 4.10 Absence of Certain Changes or Events............................27
Section 4.11 Absence of Litigation...........................................28
Section 4.12 Employee Benefit Plans..........................................28
Section 4.13 Labor Matters...................................................30
Section 4.14 Environmental Matters...........................................31
Section 4.15 Intellectual Property...........................................32
Section 4.16 Taxes...........................................................34
Section 4.17 Reorganization..................................................37
Section 4.18 Real Property...................................................37
Section 4.19 Insurance.......................................................39
Section 4.20 Customers and Suppliers.........................................39
Section 4.21 Transactions with Affiliates....................................39
Section 4.22 Opinion of Financial Advisor....................................39
Section 4.23 Vote Required...................................................40
Section 4.24 Brokers.........................................................40
Section 4.25 State Take-over Statutes and Article Eighth.....................40
Section 4.26 Rights Agreement................................................40
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
PARENT AND ACQUISITION SUB
Section 5.1 Organization and Qualification...................................41
Section 5.2 Certificate of Incorporation and By-Laws.........................41
Section 5.3 Capitalization...................................................41
Section 5.4 Authority Relative to Agreement..................................42
Section 5.5 No Conflict; Required Filings and Consents.......................42
Section 5.6 Parent SEC Reports...............................................43
Section 5.7 Disclosure Documents.............................................44
Section 5.8 Absence of Certain Changes or Events.............................44
Section 5.9 Reorganization...................................................45
Section 5.10 Brokers.........................................................45
Section 5.11 Interim Operations of Acquisition Sub...........................45
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ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1 Conduct of Business by the Company................................45
Section 6.2 Conduct of Business by Parent.....................................48
Section 6.3 Certain Tax Matters...............................................49
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 No Solicitation...................................................49
Section 7.2 Form S-4; Proxy Materials.........................................52
Section 7.3 Stockholders' Meetings............................................53
Section 7.4 Appropriate Action; Consents; Filings.............................53
Section 7.5 Access to Information; Confidentiality............................54
Section 7.6 Directors' and Officers' Indemnification and Insurance............55
Section 7.7 Notification of Certain Matters...................................55
Section 7.8 Tax Treatment.....................................................56
Section 7.9 Stock Exchange Listing............................................56
Section 7.10 Public Announcements.............................................56
Section 7.11 Affiliates of the Company........................................56
Section 7.12 Employee Matters.................................................56
Section 7.13 Further Assurances...............................................58
Section 7.14 Letters of the Company's Accountants.............................58
Section 7.15 Consulting Agreement.............................................58
Section 7.16 Non-Competition Agreement........................................58
ARTICLE VIII
CONDITIONS TO THE MERGER
Section 8.1 Conditions to the Obligations of Each Party.....................58
Section 8.2 Conditions to the Obligations of Parent and Acquisition Sub.....59
Section 8.3 Conditions to the Obligations of the Company....................60
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination.....................................................61
Section 9.2 Effect of Termination...........................................63
Section 9.3 Amendment.......................................................63
Section 9.4 Waiver..........................................................63
Section 9.5 Expenses........................................................64
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Non-Survival of Representations and Warranties.................65
Section 10.2 Notices........................................................65
Section 10.3 Severability...................................................66
Section 10.4 Entire Agreement...............................................66
Section 10.5 Assignment.....................................................66
Section 10.6 Parties in Interest............................................67
Section 10.7 Specific Performance...........................................67
Section 10.8 Governing Law..................................................67
Section 10.9 Consent to Jurisdiction........................................67
Section 10.10 WAIVER OF JURY TRIAL...........................................68
Section 10.11 Counterparts...................................................68
EXHIBITS
Exhibit A Form of Voting Agreement
Exhibit B Form of Company Representation Letter
Exhibit C Form of Parent Representation Letter
Exhibit D Form of Agreement with Company Affiliate
Exhibit E Form of Consulting Agreement
Exhibit F Form of Non-Competition Agreement
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 29, 2001 (this
"Agreement"), by and among RICHTON INTERNATIONAL CORPORATION, a Delaware
corporation (the "Company"), DEERE & COMPANY, a Delaware corporation ("Parent"),
and GREEN MERGERSUB, INC., a Delaware corporation and a newly-formed,
wholly-owned subsidiary of Parent ("Acquisition Sub").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of the Company, Parent
and Acquisition Sub, and Parent, as the sole stockholder of Acquisition Sub,
have each determined that an acquisition of the Company by Parent is advisable
and in the best interest of their respective stockholders;
WHEREAS, in furtherance of the acquisition of the Company by Parent,
the respective Boards of Directors of the Company, Parent and Acquisition Sub,
and Parent, as the sole stockholder of Acquisition Sub, have each approved and
declared advisable this Agreement and the merger of the Company with and into
Acquisition Sub (the "Merger"), upon the terms and subject to the conditions set
forth herein;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization under the provisions of Section 368(a)
of the United States Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, as a condition and inducement to Parent to enter into this
Agreement and to incur the obligations set forth herein, immediately following
the execution and delivery of this Agreement, Parent and the Acquisition Sub are
entering into a Voting Agreement, in the form of Exhibit A attached hereto (the
"Voting Agreement"), with the stockholders of the Company listed on Schedule I
thereto, pursuant to which, among other things, such stockholders are agreeing
to vote their shares of Common Stock in favor of this Agreement and the Merger
provided for herein in accordance with and subject to the terms of the Voting
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the premises,
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
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ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms. Definitions shall apply equally
to both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. All references herein to Articles, Sections and Exhibits shall be
deemed to be references to Articles and Sections of, and Exhibits to, this
Agreement unless the context shall otherwise require. All Exhibits attached
hereto shall be deemed incorporated herein as if set forth in full herein and,
unless otherwise defined therein, all terms used in any Exhibit shall have the
meaning ascribed to such term in this Agreement. The words "include," "includes"
and "including" shall be deemed to be followed by the phrase "without
limitation." The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Unless otherwise expressly
provided herein, any statute referred to herein means such statute as from time
to time amended, modified or supplemented. For the purposes of this Agreement,
the following terms have the following meanings:
"Affiliate" means, when used with respect to any Person, any other
Person directly or indirectly through one or more intermediaries controlling,
con trolled by, or under common control with such Person. As used in the
definition of "Affiliate," the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Beneficial Owner" with respect to any shares means a Person who
shall be deemed to be the beneficial owner of such shares (i) which such Person
or any of its Affiliates or associates (as such term is defined in Rule 12b-2
promulgated under the Exchange Act) beneficially owns, directly or indirectly,
(ii) which such Person or any of its Affiliates or associates has, directly or
indirectly, (A) the right to acquire (whether such right is exercisable
immediately or subject only to the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of consideration rights,
exchange rights, warrants or options, or otherwise, or (B) the right to vote
pursuant to any agreement, arrangement or understanding or (iii) which are
beneficially owned, directly or indirectly, by any other Persons with whom such
Person or any of its Affiliates or associates or any Person with whom such
Person or any of its Affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
such shares.
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"Business Day" means each day which is not a day on which banking
institutions in New York, New York are authorized or obligated by Law or
executive order to close.
"Environment" means navigable waters, waters of the contiguous zone,
ocean waters, natural resources, surface waters, ground water, drinking water
supply, land surface, subsurface strata, ambient air, both inside and outside of
buildings and structures, man-made buildings and structures, and plant and
animal life on earth.
"Environmental Claims" means any written notice of lawsuit, claim,
investigation or other notification by any Person, pursuant to Environmental
Laws or principles of common law relating to pollution, protection of the
Environment or health and safety, that any of the current or past operations of
the Company or any of its Subsidiaries, or any by-product thereof or Hazardous
Substance used thereat, or any of the property currently or formerly owned,
leased or operated by the Company or any of its Subsidiaries, or the operations
or property of any predecessor or Affili ates of the Company or any of its
Subsidiaries is subject to or may be implicated in any proceeding, action,
investigation, claim, lawsuit or order, by any Governmental Entity or any other
Person.
"Environmental Laws" means all Laws and orders relating to
pollution, protection of the Environment, or the emission, discharge, Release or
threatened Release of Hazardous Substances into the Environment or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Substances, including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. ss.9601 et seq., as amended, the Resource Conservation
and Recovery Act, 42 U.S.C. ss.6901 et seq., the Toxic Substances Control Act,
15 U.S.C. ss.2601 et seq., the Federal Water Pollution Control Act, 33 U.S.C.
ss.1251 et seq., the Clean Air Act, 42 U.S.C. ss.7401 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. ss.121 et seq., the Safe
Drinking Water Act, 42 U.S.C. ss. 300f et seq., the Oil Pollution Act of 1990
and analogous material state, local and foreign laws and orders.
"Environmental Permits" means any permit, approval, identification
number, license and other authorization required under any Environmental Law.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
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"Governmental Entity" means any foreign, supranational, federal,
state, municipal or other court, administrative agency, commission or other
govern mental or regulatory body or authority or instrumentality or political
subdivision, or any official thereof.
"Hazardous Substance" means any toxic waste, pollutant, contaminant,
hazardous substance, toxic substance, hazardous waste, special waste, industrial
substance or waste, petroleum or petroleum-derived substance or waste,
radioactive substance or waste, or any other substance regulated under or
defined by any Environ mental Law.
"Intellectual Property" means (i) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures, together
with all reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof ("Patents"), (ii) all trademarks, service
marks, trade dress, logos, slogans, trade names, corporate names and Internet
Domain Names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith
("Trademarks"), (iii) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith
("Copyrights"), (iv) all mask works and all applications, registrations, and
renewals in connection therewith, (v) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifica tions, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals),
(vi) all computer software, including all software implementation of algorithms,
models and methodologies, whether in object code or source code, databases and
compilations, all documentation and user manuals relating to the foregoing, all
rights to use the names, likenesses, biographical information and signatures of
natural Persons for promotional purposes, (viii) all other proprietary rights,
and (ix) all copies and tangible embodiments thereof (in whatever form or
medium).
"Knowledge" means the actual knowledge of the chief executive
officer, chief financial officer, chief accounting officer, treasurer, officer
primarily responsible for human resources and safety, controller and in-house
general counsel of the Company or any of its Subsidiaries, Parent or Acquisition
Sub, as the case may be, if such positions exist and, if not, the person who
performs such function.
"Lien" means, with respect to any asset or right, any mortgage, deed
of trust, lien (statutory or other), pledge, hypothecation, assignment, claim,
charge, security
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interest, conditional sale agreement, title, exception, or
encumbrance, option, right of first offer or refusal, easement, servitude,
voting or transfer restriction, or any other right of another to or adverse
claim of any kind in respect of such asset or right, including, without
limitation, under any stockholder agreement.
"Person" means any natural person, firm, individual, corporation,
limited liability company, partnership, association, joint venture, company,
business trust, trust or any other entity or organization, whether incorporated
or unincorpo rated, including a government or political subdivision or any
agency or instrumentality thereof.
"Release" means any release, spill, emission, discharge, placing,
leaking, pumping, injection, deposit, disposal, dispersal, leaching or migration
into the Environment or into or out of any property, including the movement of
Hazardous Substances through or in the Environment.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Subsidiary" or "Subsidiaries" of any Person means any corporation,
partnership, joint venture or other legal entity of which such Person (either
alone or through or together with any other subsidiary), owns, directly or
indirectly, more than 50% of the stock or other equity interests, the holders of
which are generally entitled to vote for the election of the board of directors
or other governing body of such corporation or other legal entity.
Section 1.2 Cross-References. The following terms shall have the
meanings ascribed thereto in the Section set forth opposite such term:
Acquisition Proposal......................................................7.1(d)
Acquisition Sub.........................................................Preamble
Acquisition Sub By-laws......................................................5.2
Acquisition Sub Certificate of Incorporation.................................5.2
Actions......................................................................6.3
Agreement...............................................................Preamble
AMEX......................................................................4.5(b)
Blue Sky Laws.............................................................4.5(b)
Cash Election.............................................................2.2(a)
Cash Election Shares......................................................2.2(a)
Cash Number...............................................................2.4(a)
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Cash Proration Factor.....................................................2.4(b)
Certificate of Merger.....................................................2.1(c)
Certificates..............................................................2.2(c)
Closing...................................................................2.1(b)
Closing Date..............................................................2.1(b)
Closing Sales Price.......................................................2.2(a)
CO.......................................................................4.18(a)
Code....................................................................Preamble
Common Stock..............................................................2.2(a)
Company.................................................................Preamble
Company Benefit Plans....................................................4.12(a)
Company By-laws..............................................................4.2
Company Certificate of Incorporation.........................................4.2
Company Disclosure Schedule...........................................Article IV
Company Employees........................................................7.12(a)
Company Financial Advisor...................................................4.22
Company Material Adverse Effect...........................................4.1(a)
Company Option............................................................2.7(a)
Company Permits..............................................................4.6
Company Rights ...........................................................4.3(a)
Company Rights Agreement..................................................4.3(a)
Company SEC Reports..........................................................4.8
Company Stockholder Approval..............................................7.3(a)
Company Warrant...........................................................2.8(a)
Confidentiality Agreement.................................................7.5(b)
Consulting Agreement........................................................7.15
Contracts.................................................................4.7(a)
Copyrights...................................................................1.1
Dissenting Shares...........................................................2.10
DGCL......................................................................2.1(a)
Effective Time............................................................2.1(c)
Election Date.............................................................2.3(c)
ERISA....................................................................4.12(a)
ERISA Affiliate..........................................................4.12(a)
Exchange Agent............................................................2.3(b)
Exchange Fund.............................................................2.5(e)
Exchange Ratio............................................................2.2(a)
Form S-4..................................................................7.2(a)
Form S-8..................................................................2.7(b)
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Form of Election.........................................................2.3(c)
GAAP........................................................................4.8
HSR Act..................................................................4.5(b)
Incentive Plans..........................................................2.7(a)
IP Agreements...........................................................4.15(a)
IRS.....................................................................4.12(a)
Laws.....................................................................4.5(a)
Leased Real Property....................................................4.18(b)
Merger.................................................................Preamble
Merger Consideration.....................................................2.2(a)
Merger Price.............................................................2.2(a)
Non-Competition Agreement..................................................7.16
Non-Electing Shares......................................................2.2(a)
Non-Election.............................................................2.2(a)
Non-Election Proration Factor............................................2.2(b)
NYSE.....................................................................2.2(a)
Owned Real Property.....................................................4.18(a)
Parent.................................................................Preamble
Parent By-laws..............................................................5.2
Parent Certificate of Incorporation.........................................5.2
Parent Material Adverse Effect..............................................5.1
Parent Options...........................................................5.3(a)
Parent Preferred Stock...................................................5.3(a)
Parent SEC Reports..........................................................5.6
Parent Shares............................................................2.2(a)
Parent Stock Option Plans................................................5.3(a)
Patents.....................................................................1.1
PBGC....................................................................4.12(c)
Permitted Owned Real Property Exceptions................................4.18(a)
Post-Signing Returns........................................................6.3
Preferred Stock..........................................................4.3(a)
Proxy Statement/Prospectus...............................................7.2(a)
Real Property...........................................................4.18(b)
Real Property Leases....................................................4.18(b)
Representatives..........................................................7.1(a)
SEC......................................................................2.7(b)
Secretary of State.......................................................2.1(c)
Xxxxx Xxxxxx.............................................................2.4(a)
Skadden, Arps............................................................2.1(b)
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Special Committee..........................................................4.22
Stock Election...........................................................2.2(a)
Stock Election Shares....................................................2.2(a)
Stockholders' Meeting....................................................7.2(a)
Substitute Options.......................................................2.7(a)
Substitute Warrants......................................................2.8(a)
Xxxxxxxx.................................................................2.8(c)
Superior Proposal........................................................7.1(d)
Surviving Corporation....................................................2.1(a)
Tax Authority...........................................................4.16(b)
Tax Returns.............................................................4.16(b)
Taxes...................................................................4.16(b)
Termination Date.........................................................9.1(c)
Trademarks..................................................................1.1
Trigger Event............................................................9.5(b)
Voting Agreement.......................................................Preamble
ARTICLE II
THE MERGER
Section 2.1 The Merger.
(a) Upon the terms and subject to the conditions hereof, and in
accordance with the Delaware General Corporation Law (the "DGCL"), at the
Effective Time, the Company shall be merged with and into Acquisition Sub,
whereupon the separate existence of the Company shall cease, and Acquisition Sub
shall continue as the surviving corporation (sometimes referred to herein as the
"Surviving Corporation") and shall continue to be governed by the laws of the
State of Delaware and shall continue under the name "Xxxx Deere Landscapes II,
Inc."
(b) The closing of the Merger (the "Closing") shall take place (i)
at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP ("Skadden, Arps"),
Four Times Square, New York, New York, as soon as practicable, but in any event
within three business days, after the day on which the last to be fulfilled or
waived of the conditions set forth in Article VIII (other than those conditions
that by their nature are to be fulfilled at the Closing, but subject to the
fulfillment or waiver of such condi tions) shall be fulfilled or waived in
accordance with the terms of this Agreement or (ii) at such other time, date or
place as the Company and Parent may agree to in writing (such date, the "Closing
Date").
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(c) Concurrently with the Closing, the Company, Parent and Acquisi
tion Sub shall cause a certificate of merger (the "Certificate of Merger") with
respect to the Merger to be executed and filed with the Secretary of State of
the State of Delaware (the "Secretary of State") as provided in the DGCL. The
Merger shall become effective on the date and at the time at which the
Certificate of Merger has been duly filed with the Secretary of State or at such
other date and time as is agreed between the parties and specified in the
Certificate of Merger, and such date and time is hereinafter referred to as the
"Effective Time."
(d) From and after the Effective Time, the Surviving Corporation
shall possess all rights, privileges, immunities, powers and franchises and be
subject to all of the obligations, restrictions, disabilities, liabilities,
debts and duties of the Company and Acquisition Sub.
Section 2.2 Effect on Securities.
(a) At the Effective Time, subject to the provisions of this
Agreement (including, but not limited to Sections 2.4, 2.5 and 2.10), each share
of common stock, par value $0.10 per share of the Company ("Common Stock"),
issued and outstanding immediately prior to the Effective Time (other than
shares cancelled pursuant to Section 2.2(e) and Dissenting Shares (as defined in
Section 2.10)) shall be converted into the following (the "Merger
Consideration"):
(i) for each share of Common Stock with respect to which an
election to receive cash has been effectively made and not revoked or lost,
pursuant to Section 2.3 (a "Cash Election"), the right to receive in cash from
Parent an amount equal to $36.1299 (the "Merger Price") (collectively, "Cash
Election Shares");
(ii) for each share of Common Stock with respect to which an
election to receive common stock, $1.00 par value, of Parent (the "Parent
Shares") has been effectively made and not revoked or lost, pursuant to Section
2.3 (a "Stock Election"), the right to receive from Parent, that fraction of a
Parent Share equal to the Exchange Ratio (as defined below) (collectively,
"Stock Election Shares"). For purposes of this Agreement, the "Exchange Ratio"
shall be equal to the result ob tained by dividing the Merger Price by the
average closing sales price (the "Closing Sales Price"), rounded to four decimal
points, of the Parent Shares, as reported on the
New York Stock Exchange, Inc. (the "NYSE") Composite Tape, for the period of the
ten consecutive trading days ending on the second full trading day prior to the
Effective Time; provided, however, it is expressly
9
acknowledged and agreed that if the Parent Shares have a Closing Sales Price
equal to or more than $42.9375, then the Exchange Ratio will be fixed at 0.8415.
By way of example, at the Exchange Ratio of 0.8415, if all shares of Common
Stock were exchanged for Parent Shares, the approximately 3,459,742 shares of
Common Stock would be exchanged for approximately 2,911,373 Parent Shares. If
the Closing Sales Price is below $42.9375, then the Exchange Ratio will increase
and the Common Stock would be exchanged for more Parent Shares to maintain
(based on the Closing Sales Price) the value of the aggregate consideration
received if the Closing Sales Price were $42.9375. By way of example, if the
Closing Sales Price is $40.00, then the Exchange Ratio would be 0.9032 and, if
all of the approximately 3,459,742 shares of Common Stock were exchanged for
Parent Shares, then approximately 3,124,839 Parent Shares would be received. For
purposes of calculating the Exchange Ratio, in the event that Parent declares a
stock split, stock dividend or other reclassification or exchange with respect
to the Parent Shares with a record date with respect thereto occurring prior to
the Effective Time, there will be an appropriate adjustment made to the Exchange
Ratio to provide to the holders of the Common Stock the same economic effect as
contemplated by this Agreement prior to such event; and
(iii) for each share of Common Stock other than shares as to
which a Cash Election or a Stock Election has been effectively made and not
revoked or lost, pursuant to Section 2.3 (a "Non-Election"): (A) if the total
number of Cash Election Shares and Dissenting Shares exceeds the Cash Number (as
defined in Section 2.4(a)), the right to receive from Parent, that fraction of a
Parent Share equal to the Exchange Ratio, or (B) if the total number of Cash
Election Shares and Dissenting Shares is less than or equal to the Cash Number,
the right to receive cash and Parent Shares pursuant to Section 2.2(b)
(collectively, "Non-Electing Shares").
(b) In the event that Non-Electing Shares are converted pursuant to
Section 2.2(a)(iii)(B), the Non-Electing Shares shall be converted into the
right to receive cash and Parent Shares in the following manner:
(i) a proration factor (the "Non-Election Proration Factor")
shall be a fraction, (A) the numerator of which shall be the lesser of (x) the
total number of Non-Electing Shares and (y) the Cash Number minus the total
number of Cash Election Shares and Dissenting Shares and (B) the denominator of
which shall be the total number of Non-Electing Shares; and
(ii) each Non-Electing Share shall be converted into (A) the
right to receive an amount in cash equal to the product of (x) the Merger Price
and (y) the Non-
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Election Proration Factor and (B) a fraction of a Parent Share equal to the
product of (x) the Exchange Ratio and (y) a fraction equal to one minus the Non-
Election Proration Factor.
(c) At the Effective Time, all shares of Common Stock (together with
the associated Company Rights (as defined in Section 4.3(a), if any) to be
converted into the Merger Consideration pursuant to this Section 2.2 shall, by
virtue of the Merger and without any action on the part of the holders of shares
of Common Stock, (w) cease to be outstanding, (x) be cancelled, (y) be retired
and (z) cease to exist; and each holder of a certificate evidencing any such
shares of Common Stock (the "Certificates") immediately prior to the Effective
Time shall thereafter cease to have any rights with respect to such securities,
except the right to receive (i) the Merger Consideration, (ii) any dividends and
other distributions in accordance with Section 2.5(c) and (iii) any cash to be
paid in lieu of any fractional Parent Share in accordance with Section 2.5(d).
(d) No shares of Acquisition Sub stock will be issued directly or
indirectly in the Merger. Each share of common stock, par value $0.01 per share,
of Acquisition Sub issued and outstanding immediately prior to the Effective
Time shall remain outstanding following the Effective Time.
(e) At the Effective Time, each share of Common Stock held by the
Company as treasury stock immediately prior to the Effective Time shall automati
cally be cancelled and retired and cease to exist, and no consideration or
payment shall be delivered therefor or in respect thereto.
(f) After the Effective Time, there shall be no further registration
or transfers of Common Stock. If, after the Effective Time, Certificates are
presented to the Surviving Corporation, they shall be cancelled and exchanged
for the Merger Consideration in accordance with the procedures set forth in this
Article II.
Section 2.3 Share Election.
(a) Each Person who, on or prior to the Election Date (as defined in
Section 2.3(c)) is a record holder of shares of Common Stock shall have the
right, subject to Section 2.4, to submit a Form of Election (as defined in
Section 2.3(c)) specifying (i) the number of shares of Common Stock that such
Person desires to be converted into cash pursuant to the Cash Election and/or
(ii) the number of shares of Common Stock that such Person desires to be
converted into Parent Shares pursuant to the Stock Election.
11
(b) Prior to the mailing of the Proxy Statement/Prospectus (as
defined in Section 7.2(a)) to the record holders of shares of Common Stock of
the Company, The Bank of New York, or such other bank, trust company, Person or
Persons, shall be designated by Parent to act as exchange agent (the "Exchange
Agent") for payment of the Merger Consideration.
(c) Parent or its authorized agent or representative shall prepare,
subject to the reasonable approval of the Company, a form of election (the "Form
of Election") for mailing with the Proxy Statement/Prospectus. The Form of
Election shall be (i) mailed to the record holders of shares of Common Stock as
of the record date for the Stockholders' Meeting (as defined in Section 7.2(a)),
and (ii) used by each record holder of shares of Common Stock to make either the
Cash Election or the Stock Election, subject to the provisions of Section 2.4.
The Company shall also use its reasonable efforts to make the Form of Election
and the Proxy Statement/Prospectus available to all Persons who become holders
of shares of Common Stock during the period between such record date and the
Election Date. Any such holder's election to receive cash shall have been
properly made only if the Exchange Agent shall have received at its designated
office, by 5:00 p.m., New York City time on the business day next preceding the
Closing Date (the "Election Date"), a Form of Election properly completed and
signed and accompanied by Certificate(s) for the share(s) of Common Stock to
which such Form of Election relates, duly endorsed in blank or otherwise in form
acceptable for transfer on the books of the Company (or by an appropriate
guarantee of delivery of such Certificate(s) as set forth in such Form of
Election from a firm which is a member of a registered national securities
exchange or a commercial bank or trust company having an office or correspondent
in the United States, provided that such Certificate(s) are in fact delivered to
the Exchange Agent within three NYSE trading days after the date of execution of
such guarantee of delivery).
(d) Any Form of Election may be revoked by a holder of Common Stock
submitting such Form of Election to the Exchange Agent only by written notice
received by the Exchange Agent prior to 5:00 p.m., New York City time on the
Election Date. In addition, all Forms of Election shall automatically be revoked
if the Exchange Agent is notified in writing by Parent and the Company that the
Merger has been abandoned or if the Company's stockholders fail to approve the
Merger. If a Form of Election is revoked, the Certificate(s) (or guarantee(s) of
delivery, if applica ble) for the share(s) of Common Stock, if any, to which
such Form of Election relates shall promptly be returned to the stockholder
submitting the same to the Exchange Agent.
(e) For purposes of this Agreement, a holder of Common Stock who
does not submit a Form of Election which is received by the Exchange Agent prior
to the
12
Election Date shall be deemed to have made a Non-Election. If Parent or the
Exchange Agent shall determine that any purported Cash Election or Stock
Election was not properly made, such purported Cash Election or Stock Election
shall be deemed to be of no force and effect and the holder making such
purported Cash Election or Stock Election shall for purposes of this Agreement,
be deemed to have made a Non-Election.
(f) Parent shall have the sole discretion, which it may delegate in
whole or in part to the Exchange Agent, to determine whether Forms of Election
have been properly completed, signed and submitted or revoked and to disregard
immate rial defects in Forms of Election. The decision of Parent (or the
Exchange Agent, if applicable) in such matters shall be conclusive and binding.
Neither Parent nor the Exchange Agent will be under any obligation to notify any
Person of any defect in a Form of Election submitted to the Exchange Agent. The
Exchange Agent shall make all computations contemplated by Section 2.4 and all
such computations shall be conclusive and binding on the holders of Common
Stock.
Section 2.4 Proration.
(a) Notwithstanding anything contained herein to the contrary, the
maximum number of shares of Common Stock which shall be converted into the right
to receive cash in the Merger, pursuant to Cash Elections, shall be equal to
that number which corresponds to 49% of the number of shares of Common Stock
outstanding immediately prior to the Effective Time (the "Cash Number");
provided, however, that if either (i) the tax opinion delivered to the Company
referred to in Section 8.3(c) cannot be rendered (as reasonably determined by
Xxxxx Xxxxxx Xxxxx Tischman Xxxxxxx & Xxxxx ("Xxxxx Xxxxxx"), counsel to the
Company) or (ii) the tax opinion delivered to Parent referred to in Section
8.2(c) cannot be rendered (as reasonably determined by Skadden, Arps, counsel to
Parent), then the Cash Number shall be reduced to the minimum extent necessary
to enable the relevant tax opinion or opinions, as the case may be, to be
rendered.
(b) If the total number of Cash Election Shares and Dissenting
Shares exceeds the Cash Number, then the Cash Election Shares shall be converted
into the right to receive cash and Parent Shares in the following manner:
(i) a proration factor (the "Cash Proration Factor") shall be
a fraction, (A) the numerator of which shall be the Cash Number minus the total
number of Dissenting Shares and (B) the denominator of which shall be the total
number of Cash Election Shares; and
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(ii) each Cash Election Share shall be converted into (A) the
right to receive an amount in cash equal to the product of (x) the Merger Price
and (y) the Cash Proration Factor and (B) a fraction of a Parent Share equal to
the product of (x) the Exchange Ratio and (y) a fraction equal to one minus the
Cash Proration Factor.
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Section 2.5 Exchange of Certificates.
(a) Following the Effective Time in a timely manner so that the
Exchange Agent can promptly honor the Cash Elections and Stock Elections made
and delivered to the Exchange Agent, Parent shall make available to the Exchange
Agent: (i) cash to fund payment to holders who made a Cash Election and (ii)
certificates representing Parent Shares to be exchanged for certificates
representing shares of Common Stock held by holders who made a Stock Election,
with the aggregate thereof constituting the Merger Consideration.
(b) As of or promptly following the Effective Time and the final
determination of the Cash Proration Factor, the Surviving Corporation shall
cause the Exchange Agent to mail (and to make available for collection by hand)
to each holder of record of a Certificate or Certificates, (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 proper delivery of the
Certificates to the Exchange Agent and which shall be in the form and have such
other provisions as Parent may specify) and (ii) instruc tions for use in
effecting the surrender of the Certificates in exchange for (A) a certificate or
certificates representing that number of whole Parent Shares if any, into which
the number of shares of Common Stock previously represented by such Certificate
or Certificates shall have been converted pursuant to Section 2.2 and (B) the
amount of cash, if any, into which all or a portion of the number of shares of
Common Stock previously represented by such Certificate or Certificates shall
have been converted pursuant to Section 2.2 (which instructions shall provide
that at the election of the surrendering holder, Certificates may be
surrendered, and the Merger Consideration in exchange therefor collected, by
hand delivery). Upon surrender of a Certificate for cancellation to the Exchange
Agent, together with a letter of transmittal properly completed and validly
executed in accordance with the instructions thereto, and such other documents
as may be reasonably required pursuant to such instruc tions, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration for each share of Common Stock formerly represented by such
Certificate, and the Certificate so surrendered shall be forthwith cancelled.
The Exchange Agent shall promptly accept such Certificates upon compliance with
such reasonable terms and conditions as the Exchange Agent may impose to effect
an orderly exchange thereof in accordance with customary exchange practices. No
interest shall accrue on the Merger Consideration (or the cash payable as
described in Section 2.5(c) and (d) below) payable upon the surrender of the
Certificates for the benefit of, or be paid to, the holders of the Certificates.
15
(c) No dividends or other distributions with respect to Parent
Shares with a record date on or after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the Parent Shares
represented thereby by reason of the conversion of shares of Common Stock
pursuant to Sections 2.2, 2.3 and 2.4 and no cash payment in lieu of fractional
Parent Shares shall be paid to any such holder pursuant to Section 2.5(d) until
such Certificate is surrendered in accordance with this Article II. Subject to
the effect of applicable Laws (as defined in Section 4.5(a)), following
surrender of any such Certificate, there shall be paid, without interest, to the
Person in whose name the Parent Shares representing such securities are
registered (i) at the time of such surrender, the amount of any cash payable in
lieu of fractional Parent Shares to which such holder is entitled pursuant to
Section 2.5(d) and the proportionate amount of dividends or other distributions
with a record date after the Effective Time theretofore paid with respect to
Parent Shares issued upon conversion of Common Stock, and (ii) at the
appropriate payment date or as promptly as practicable thereafter, the
proportionate amount of dividends or other distributions, with (x) a record date
with respect thereto after the Effective Time, but prior to such surrender, and
(y) a payment date subsequent to such surrender, payable with respect to such
Parent Shares.
(d) Notwithstanding any other provision hereof, no fraction of a
Parent Share will be issued and no dividend or other distribution, stock split
or interest with respect to Parent Shares shall relate to any fractional Parent
Share, and such fractional interest shall not entitle the owner thereof to vote
or to any rights as a security holder of the Parent Shares. In lieu of any such
fractional security, each holder of shares of Common Stock otherwise entitled to
a fraction of a Parent Share in accordance with the provisions of this Section
2.5 will be entitled to receive from the Exchange Agent a cash payment in an
amount equal to the product of (i) such fractional part of a Parent Share
multiplied by (ii) the closing price for a Parent Share on the NYSE Composite
Tape on the date of the Effective Time or, if such date is not a business day,
the business day immediately following the date on which the Effective Time
occurs.
(e) Any portion of the Merger Consideration deposited with the
Exchange Agent pursuant to this Section 2.5 (the "Exchange Fund") which remains
undistributed to the holders of the Certificates for six months after the
Effective Time shall be delivered to Parent or its designee, upon demand, and
any holders of shares of Common Stock prior to the Merger who have not
theretofore complied with this Article II shall thereafter look for payment of
their claim, as general creditors thereof, only to Parent for their claim for
(i) cash, if any, (ii) Parent Shares, if any, (iii) any cash without interest,
to be paid, in lieu of any fractional Parent Shares and (iv) any dividends or
other distributions with respect to Parent
16
Shares to which such holders may be entitled in accordance with the provisions
of this Section 2.5.
(f) None of Parent, Acquisition Sub, the Company or the Exchange
Agent shall be liable to any Person in respect of any Parent Shares or cash held
in the Exchange Fund (and any cash, dividends and other distributions payable in
respect thereof) delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Law.
(g) At Parent's sole discretion, the Exchange Agent shall invest any
cash included in the Exchange Fund. Any interest and other income resulting from
such investments shall be paid to Parent or its designee. Nothing contained in
this Section 2.5(g) shall relieve Parent or the Exchange Agent from making the
payments required by this Article II to be made to the holders of shares of
Common Stock.
Section 2.6 Transfer Taxes; Withholding. If any certificate for a
Parent Share is to be issued to, or cash is to be remitted to, a Person (other
than the Person in whose name the Certificate surrendered in exchange therefor
is registered), it shall be a condition of such exchange that the Certificate so
surrendered shall be properly endorsed and otherwise in proper form for transfer
and that the Person requesting such exchange shall pay to the Exchange Agent any
transfer or other Taxes required by reason of the payment of the Merger
Consideration to a Person other than the registered holder of the Certificate so
surrendered, or shall establish to the satisfaction of the Exchange Agent that
such Tax either has been paid or is not applicable. Parent or the Exchange Agent
shall be entitled to deduct and withhold from the Merger Consideration otherwise
payable pursuant to this Agreement to any holder of shares of Common Stock such
amounts as Parent or the Exchange Agent are required to deduct and withhold
under the Code, or any provision of state, local or foreign Tax law, with
respect to the making of such payment. To the extent that amounts are so
withheld by Parent or the Exchange Agent, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of shares
of Common Stock in respect of whom such deduction and withholding was made by
Parent or the Exchange Agent. Parent shall pay any transfer taxes other than
those specifically set forth in this Section 2.6 associated with the transfer of
assets or control, or otherwise due, as a result of the Merger.
Section 2.7 Stock Options.
(a) At the Effective Time, the obligation to honor each outstanding
employee or director option to purchase shares of Common Stock (a "Company
Option") granted under the Company's 1990 Long-Term Incentive Plan and 2000
Long-Term
17
Incentive Plan pursuant to which Company Options or other stock-based awards of
the Company have been or may be granted (each as may be amended or supplemented
from time to time, the "Incentive Plans"), whether vested or not vested, shall
be deemed assumed by Parent. At and after the Effective Time, (i) each Company
Option then outstanding shall entitle the holder thereof to acquire the number
(rounded up to the nearest whole number) of Parent Shares determined by
multiplying (x) the number of shares of Common Stock subject to such Company
Option immediately prior to the Effective Time by (y) the Exchange Ratio, and
(ii) the exercise price per share of Parent Shares subject to any such Company
Option at and after the Effective Time shall be an amount (rounded up to the
nearest one- hundredth of a cent) equal to (x) the exercise price per share of
Common Stock subject to such Company Option prior to the Effective Time, divided
by (y) the Exchange Ratio (the "Substitute Options"). Other than as provided
above, as of and after the Effective Time, each Substitute Option shall be
subject to the same terms and conditions of the Company Option as in effect
immediately prior to the Effective Time. Notwithstanding the foregoing, any
adjustment to a Company Option which is an "incentive stock option" shall be
made in a manner consistent with Section 424(a) of the Code.
(b) Parent shall take such corporate action as may be necessary or
appropriate to, at or promptly following the Effective Time, file with the
Securities and Exchange Commission (the "SEC") a registration statement on Form
S-8 (or any successor or other appropriate form) (the "Form S-8") with respect
to the Parent Shares subject to any Substitute Options to the extent such
registration is required under applicable Law in order for such Parent Shares to
be sold without restriction in the United States.
(c) The Board of the Directors of the Company shall take all corpo
rate action necessary to cause the Company Options outstanding at the Effective
Time to be treated in accordance with Section 2.7(a) and be assumed by Parent at
the Effective Time. Following the Effective Time, no holder of a Company Option
shall have any rights to acquire Common Stock.
(d) Parent and the Company shall take all such steps as may be
required to cause the transactions contemplated by this Section 2.7 and any
other dispositions of equity securities of the Company (including derivative
securities) or acquisitions of Parent equity securities (including derivative
securities) in connection with this Agreement by each individual who (i) is a
director or officer of the Com pany or (ii), at the Effective Time, will become
a director or officer of Parent, to be exempt under Rule 16b-3 promulgated under
the Exchange Act, such steps taken in accordance with the No-Action Letter dated
January 12, 1999, issued by the SEC to Skadden, Arps.
18
Section 2.8 Warrants.
(a) At the Effective Time, the obligation to honor each outstanding
Series B Warrant of Common Stock (a "Company Warrant") shall be deemed assumed
by Parent. At and after the Effective Time: (i) each Company Warrant then
outstanding shall entitle the holder thereof to acquire the number (rounded up
to the nearest whole number) of Parent Shares determined by multiplying (x) the
number of shares of Common Stock subject to such Company Warrant immediately
prior to the Effective Time by (y) the Exchange Ratio; and (ii) the exercise
price per share of Parent Shares subject to any such Company Warrant at and
after the Effective Time shall be an amount (rounded up to the nearest
one-hundredth of a cent) equal to (x) the exercise price per share of Common
Stock subject to such Company Warrant prior to the Effective Time, divided by
(y) the Exchange Ratio (the "Substitute Warrants"). Other than as provided
above, as of and after the Effective Time, each Substitute Warrant shall be
subject to the same terms and conditions of the Company Warrants as in effect
immediately prior to the Effective Time.
(b) The Board of the Directors of the Company shall take all corpo
rate action necessary to cause the Company Warrants outstanding at the Effective
Time to be treated in accordance with Section 2.8(a) and be assumed by Parent at
the Effective Time. Following the Effective Time, no holder of a Company Warrant
shall have any rights to acquire Common Stock.
(c) If the Company Warrant remains unexercised, the Company shall
cause an amendment to the Company Warrant, dated as of March 29, 1995, issued to
Xxxx X. Xxxxxxxx ("Xxxxxxxx") and now held by FRS Capital Company, LLC, to be
effected prior to the Closing, which would amend paragraph (j) thereof to
provide that, following the Effective Time, Parent's obligations under such
paragraph shall be subject to the Parent's including the shares related to the
Warrant in a registration statement for shares to be sold by other selling
shareholders of Parent. If the Com pany Warrant is exercised prior to the
Effective Time and Parent is notified of such exercise and that a Stock Election
is being made by the holder thereof, then the shares related to the Company
Warrant shall be exchanged for registered Parent Shares at or promptly after the
Effective Time as a part of the Merger.
Section 2.9 Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such
19
Certificate, the Exchange Agent will issue in exchange for such lost, stolen or
destroyed Certificate the Merger Consider ation to which the holder thereof is
entitled pursuant to this Article II.
Section 2.10 Dissenting Shares. Notwithstanding Section 2.2, to the
extent (if at all) that holders of Common Stock are entitled to appraisal rights
under Section 262 of the DGCL, shares of Common Stock issued and outstanding
immedi ately prior to the Effective Time and held by a holder who has properly
exercised and perfected his or her demand for appraisal rights under Section 262
of the DGCL (the "Dissenting Shares"), shall not be converted into the right to
receive the Merger Consideration, but the holders of Dissenting Shares shall be
entitled to receive from the Company such consideration as shall be determined
pursuant to Section 262 of the DGCL; provided, however, that if any such holder
shall have failed to perfect or shall effectively withdraw or lose his or her
right to appraisal and payment under the DGCL, such holder's shares of Common
Stock shall thereupon be deemed to have been converted as of the Effective Time
into the right to receive the Merger Price, without any interest thereon, or
Parent Shares or a combination thereof, as determined by Parent in its sole
discretion, and such shares shall not be deemed to be Dissenting Shares. The
Company shall give Parent (i) prompt notice of any notices or demands for
appraisal or payment for shares of Common Stock received by the Company and (ii)
the opportunity to participate and direct all negotiations and proceedings with
respect to any such demands or notices. The Company shall not, without the prior
written consent of Parent, make any payment with respect to, or settle, offer to
settle or otherwise negotiate any demands.
ARTICLE III
THE SURVIVING CORPORATION
Section 3.1 Certificate of Incorporation. The certificate of
incorpora tion of Acquisition Sub in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation until thereafter
amended as provided therein or by applicable Law, except that Article I of such
certificate of incorporation shall be amended as of the Effective Time to read
as follows: "The name of the Corporation is Xxxx Deere Landscapes II, Inc.
Section 3.2 By-laws. The by-laws of Acquisition Sub in effect at the
Effective Time shall be the by-laws of the Surviving Corporation until
thereafter amended as provided therein, by applicable Law or the certificate of
incorporation of such entity.
20
Section 3.3 Officers and Board of Directors.
(a) From and after the Effective Time, the officers of the Surviving
Corporation shall be the officers of Acquisition Sub immediately prior to the
Effec tive Time.
(b) The Board of Directors of the Surviving Corporation effective as
of, and immediately following, the Effective Time shall consist of the members
of the Board of Directors of Acquisition Sub immediately prior to the Effective
Time.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent that, except as set
forth in the disclosure letter delivered by the Company to Parent simultaneously
with the execution of this Agreement (the "Company Disclosure Schedule") to the
extent specifically referenced to a Section contained herein:
Section 4.1 Organization and Qualification; Subsidiaries.
(a) Each of the Company and its Subsidiaries is a corporation or
entity duly incorporated or formed, validly existing and in good standing under
the Laws of its jurisdiction of incorporation or formation and has the requisite
corporate power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as it is now being
conducted. Each of the Company and its Subsidiaries is duly qualified or
licensed as a foreign corpora tion to do business, and is in good standing, in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except for such failures to be so qualified or licensed
which would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect. Section 4.1(a) of the Company Disclosure
Schedule sets forth a list of the names, capitalization, and jurisdictions of
incorpora tion or other formations of the Company's Subsidiaries. The term
"Company Material Adverse Effect" means any fact, change or effect that is, or
is reasonably likely to be, materially adverse, individually or in the
aggregate, to the financial condition, business or results of operations of the
Company and its Subsidiaries taken as a whole; provided that none of the
following shall be deemed, individually or in the aggregate, to constitute a
Company Material Adverse Effect: (i) a decrease in revenues of the Company; (ii)
a decrease in customer orders; or (iii) any cancellations of customer orders to
the extent that the Company can in good faith establish that cancellations were
directly
21
attributable to the public announcement that the Company will be acquired by
Parent pursuant to the transactions contemplated hereby.
(b) All the outstanding shares of capital stock or other equity or
voting interests of each Subsidiary of the Company are owned by the Company, by
another wholly-owned Subsidiary of the Company or by the Company and another
wholly-owned Subsidiary of the Company, free and clear of all Liens, and are
duly authorized, validly issued, fully paid and nonassessable. Except as set
forth above or in Section 4.1(b) of the Company Disclosure Schedule and except
for the capital stock of, or other equity or voting interests in, its
Subsidiaries, the Company does not own, directly or indirectly, any capital
stock of, or other equity or voting interests in, any corporation, partnership,
joint venture, association or other entity.
Section 4.2 Certificate of Incorporation and By-Laws. The Company
has made available to Parent a complete and correct copy of the Restated
Certificate of Incorporation (the "Company Certificate of Incorporation") and
the by-laws (the "Company By-laws") of the Company and the certificate of
incorporation and by- laws of each of its Subsidiaries, each as amended to date.
The Company Certificate of Incorporation and the Company By-laws of the Company
and the organizational documents of its Subsidiaries are in full force and
effect. The Company is not in violation of any provision of the Company
Certificate of Incorporation and no Subsidiary of the Company is in violation of
its respective organizational documents.
Section 4.3 Capitalization.
(a) The authorized capital stock of the Company consists of
6,000,000 shares of Common Stock and 500,000 shares of preferred stock, par
value $1.00 per share (the "Preferred Stock"). As of the close of business on
April 30, 2001, (i) 3,459,742 shares of Common Stock (excluding treasury shares)
were issued and outstanding, (ii) 319,855 shares of Common Stock were held by
the Company in its treasury, (iii) 132,500 shares of Common Stock were reserved
for issuance pursuant to the Incentive Plans (of which 32,500 shares were
subject to outstanding Company Options ), (iv) 100,000 shares of Common Stock
were reserved for issuance upon conversion of a Company Warrant, and (v) no
shares of Preferred Stock (including all of the Series A Preferred Stock being
reserved for issuance in accor dance with the Rights Agreement (the "Company
Rights Agreement"), dated as of January 26, 1988, by and between the Company and
First Jersey National Bank, N.A., as Rights Agent, pursuant to which the Company
had issued rights to purchase the Series A Preferred Stock (the "Company
Rights")) were issued and outstanding or were held by the Company in its
treasury. The Company Rights Agreement
22
has terminated by its terms and has not been renewed or replaced. No shares of
Common Stock are owned by any Subsidiary of the Company. Set forth in Section
4.3(a) of the Company Disclosure Schedule is a true and complete list, as of the
date hereof of all outstanding Company Options and all other rights, if any, to
purchase or receive Common Stock granted under the Incentive Plans, the number
of shares subject to each such Company Option, the grant dates and exercise
prices of each such Com pany Option and the names of the holder thereof.
(b) Except as set forth in Section 4.3(a), as of the close of
business on April 30, 2001, no shares of capital stock of, or other equity or
voting interests in, the Company, or options, warrants or other rights to
acquire any such stock or securities were issued, reserved for issuance or
outstanding. During the period from April 30, 2001 to the date hereof, (x) there
have been no issuances by the Company of shares of capital stock of, or other
equity or voting interests in, the Company other than issuances of shares of
Common Stock pursuant to the exercise of Company Options and Company Warrants
outstanding on such date, and (y) there have been no issu ances by the Company
of options, warrants or other rights to acquire shares of capital stock of, or
other equity or voting interests in, the Company. All outstanding shares of
capital stock of the Company are, and all shares that may be issued pursuant to
the Incentive Plans and upon exercise of the Company Warrants will be, when
issued in accordance with the terms thereof, duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights. There are no
bonds, debentures, notes or other indebtedness of the Company or any of its
Subsidiaries, and, except as disclosed in Section 4.3(a), no securities or other
instruments or obligations of the Company or any of its Subsidiaries the value
of which is in any way based upon, or derived from, any capital or voting stock
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 stockholders
of the Company may vote. Except as set forth in Section 4.3(a) and except as
specifically permitted under Section 6.1, there are no contracts of any kind to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries 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 of, or other equity or voting interests
in, or securities convertible into, or exchangeable or exercisable for, shares
of capital stock of, or other equity or voting interests in, the Company or any
of its Subsidiaries or obligat ing the Company or any of its Subsidiaries to
issue, grant, extend or enter into any such security, option, warrant, call,
right or contract. To the Knowledge of the Company, as of the date hereof, there
are no irrevocable proxies and no voting agreements (other than the Voting
Agreement) with respect to any shares of the capital stock or other voting
securities of the Company or any of its Subsidiaries.
23
(c) The Company has delivered or otherwise made available to Parent
complete and correct copies of the Incentive Plans and all forms of Company
Options issued pursuant to the Incentive Plans.
Section 4.4 Authority Relative to Agreement. The Company has all
necessary power and authority to execute and deliver this Agreement, to perform
all of its obligations hereunder and, subject to obtaining any necessary
approval of its stockholders as contemplated by the provisions of this
Agreement, to consummate the Merger. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized by the Company's Board
of Directors, and no other corporate actions on the part of the Company are
necessary to authorize the execution and delivery of this Agreement. The
execution and delivery of the Voting Agreement by Parent have been duly and
validly authorized by the Company's Board of Direc tors pursuant to Section 203
of the DGCL. No other corporate action is necessary to consummate the
transactions contemplated hereby (other than, with respect to the Merger,
approval by the Company's stockholders at the Stockholders' Meeting). This
Agreement has been duly and validly executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency, moratorium, or
other similar laws, now or hereafter in effect, affecting creditors' rights
generally and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
Section 4.5 No Conflict; Required Filings and Consents.
(a) Except as set forth in Section 4.5(a) of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, (i) conflict with
or violate the Company Certificate of Incorporation, the Company By-laws or the
certificate of incorporation or by-laws of any of its Subsidiaries, (ii)
assuming the consents, approvals, authorizations, waivers or permits specified
in Section 4.5(b) have been received and the waiting periods referred to therein
have expired, conflict with or violate any federal, state or local or foreign
law, rule, regulation, order, judgment or decree (collectively, "Laws")
applicable to the Company or any of its Subsidiaries or by which any property or
asset of the Company or any of its Subsid iaries is bound or affected or (iii)
result in any breach of, or constitute a default (or an event which with notice
or lapse of time or both would
24
become a default) under, or give to others any right of termination, amendment,
acceleration, or cancellation of, or result in the creation of a Lien or other
encumbrance on any property or asset of the Company or any of its Subsidiaries
pursuant to, any note, bond, mortgage, indenture or credit agreement, or any
other contract, agreement, lease, license, permit, franchise or other instrument
or obligation to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any property or asset of the
Company or any of its Subsidiaries is bound or affected, except, with respect to
clauses (i) and (ii), for any such conflicts, violations, breaches, defaults or
other occurrences of the type referred to above which would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect and would not prevent or materially delay the consummation of the Merger.
(b) Except as set forth in Section 4.5(b) of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, require any
consent, approval, authorization, waiver or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic, foreign or
supranational, except for applicable requirements of the Exchange Act, the
Securities Act, state securities or "blue sky" laws ("Blue Sky Laws"), the
pre-merger notification arrangements of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder
(the "HSR Act") and recordation of appropriate merger documents as required by
the DGCL and the rules of the American Stock Exchange (the "AMEX") and except
where failure to obtain such consents, approvals, authoriza tions or permits, or
to make such filings or notifications, would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect and
would not prevent or materially delay the consummation of the Merger.
Section 4.6 Permits; Compliance. Except as set forth in Section 4.6
of the Company Disclosure Schedule or the absence of which would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, each of the Company and its Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certifi xxxxx, approvals and orders
necessary for the Company or any of its Subsidiaries to own, lease and operate
the properties of the Company and its Subsidiaries or to carry on their business
as it is now being conducted and contemplated to be conducted (the "Company
Permits"), and no suspension or cancellation of any of the Company Permits is
pending or, to the Knowledge of the Company, threatened. Except as set forth in
Section 4.6 of the Company Disclosure Schedule, none of the Company or any of
its Subsidiaries is in conflict with, or in default or violation of, (i) any
Laws applicable to the Company or any of its Subsidiaries or by which
25
any property or asset of the Company or any of its Subsidiaries is bound or
affected to the Knowledge of the Company, (ii) any of the Company Permits or
(iii) any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any property or asset of the Company or any of its Subsidiaries
is bound or affected, except for any such conflicts, defaults or violations that
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
Section 4.7 Contracts.
(a) The Company has made available to Parent true, complete and
correct copies of the following agreements scheduled in Section 4.7 of the
Company Disclosure Schedule (the "Contracts") to which the Company or any
Subsidiary is a party:
(i) other than sales orders entered into in the ordinary
course, agreements with consideration in excess of $100,000;
(ii) agreements involving performance over a period of more
than one year with consideration in excess of $100,000;
(iii) agreements containing confidentiality or non-competition
provisions;
(iv) other than purchase orders entered into in the ordinary
course, any agreement concerning a partnership or joint venture or any other
agree ment involving a sharing of profits, losses, costs, or liabilities by the
Company or any of its Subsidiaries with any other Person;
(v) other than purchase orders entered into in the ordinary
course, any agreement under which the Company or any of its Subsidiaries has
created, incurred, assumed or guaranteed any indebtedness or any capitalized
lease obligation, in excess of $50,000;
(vi) any agreement entered into during the prior three years,
providing for the acquisition or disposition of a significant amount of assets
or a line of business;
26
(vii) any agreement entered into during the prior three (3)
years, providing for the purchase, redemption or issuance of Common Stock the
performance of which involves consideration of more than $250,000 other than
redemption of Common Stock pursuant to the Company's stock repurchase plan
announced in the Company's Quarterly Report for the quarter ended March 31,
2000, filed May 12, 2000, by which the Company is authorized to repurchase up to
$1,000,000 of its shares (through December 31, 2000, the Company had repurchased
22,300 shares of its Common Stock for $324,000); and
(viii) each material written amendment, supplement and
modification in respect of any of the foregoing.
(b) To the Knowledge of the Company, (i) all Contracts are in full
force and effect and constitute valid and binding agreements of the Company or
its Subsidiaries and the other parties thereto in accordance with their
respective terms, and (ii) the consummation of the transactions contemplated
hereby will not, in any material respect, violate, or constitute a breach under,
any such Contract. Except as set forth in Section 4.7(b) of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries are in
default in any material respect under any of such written Contracts, have not
received any written notice of such a default, and, to the Knowledge of the
Company: (i) no other party to any such Contract is in default in any material
respect thereunder and (ii) no event has occurred or condition exists that with
notice or lapse of time or both would constitute such a default thereunder.
Section 4.8 Company SEC Reports. The Company has filed with the SEC
at or prior to the time due, and Parent has had reasonable access to copies of,
all forms, reports, schedules, statements and other documents required to be
filed with the SEC by the Company since January 1, 1997 (together with all
information incorporated therein by reference, the "Company SEC Reports"). The
Company confirms that the filings on record with the SEC are true and complete
copies of the Company's filings. No Subsidiary of the Company is required to
file any form, report, schedule, statement or other document with the SEC. As of
their respective dates or, if amended, as of the date of the last such
amendment, the Company SEC Reports complied in all material respects with the
requirements of 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
Company SEC Reports, and none of the Company SEC Reports at the time they were
filed 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. The financial statements (including the related
27
notes) included in the Company SEC Reports, as well as the financial statements
for the year ended December 31, 2000 (a copy of which has been provided to
Parent), 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 ("GAAP") and fairly present in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and their respective consolidated results of operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal and recurring year-end audit adjustments). Except (a) to the extent
disclosed in the Company SEC Reports filed prior to the date hereof or in
Section 4.8 of the Company Disclosure Schedule and (b) for liabilities and
obligations incurred in the ordinary course of business and consistent with past
practice, since December 31, 2000, neither the Company nor any of its
Subsidiaries has incurred any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) other than liabilities and
obligations which would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
Section 4.9 Disclosure Documents. The information supplied by the
Company for inclusion in the Form S-4 (as defined in Section 7.2(a)) and the
Proxy Statement/Prospectus (including by incorporation by reference) shall not,
at (i) the time the Form S-4 is declared effective, (ii) the time the Proxy
Statement/Prospectus (or any amendment thereof or supplement thereto) is first
mailed to the stockholders of the Company, (iii) the time of the Stockholders'
Meeting and (iv) the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading, except that no
representation is made by the Company with respect to the statements made in the
Proxy Statement/Prospectus based on information supplied by Parent or
Acquisition Sub in writing for inclusion in the Proxy Statement/Prospectus. If,
at any time prior to the Effective Time, any event or circumstance relating to
the Company or any of its Subsidiaries, or their respective officers or
directors, should be discovered by the Company which, pursuant to the Securities
Act or Exchange Act, should be set forth in an amendment or a supplement to the
Form S-4 or Proxy Statement/Prospectus, the Company shall promptly notify Parent
in writing. All documents that the Company is responsible for filing with the
SEC in connection with the Merger will comply as to form in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act.
Section 4.10 Absence of Certain Changes or Events. Since December
31, 2000, to the date hereof, except as disclosed in any Company SEC Report
filed prior to the date hereof or as contemplated hereby or in Section 4.10 of
the Company Disclosure
28
Schedule, there has not been any change, event or circumstance which has had or
which would, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect and (i) each of the Company and its Subsidiaries
has conducted its businesses only in the ordinary course or in a manner
consistent with past practice and (ii) there has not been (A) any material
change by the Company or any of its Subsidiaries in its material accounting
policies, practices and procedures, (B) any entry by the Company or any of its
Subsidiaries into any commitment or transaction material to the Company and its
Subsidiaries taken as a whole other than in the ordinary course of business
consistent with past practice, (C) any declaration, setting aside or payment of
any dividend or distribution in respect of any capital stock of the Company or
any of its Subsidiaries (other than cash dividends payable by any wholly-owned
Subsidiary to another Subsidiary or the Company), (D) any increase in the
compensation payable, or to become payable, to any employee of the Company or
any of its Subsidiaries, except to any Person who is not a corporate officer of
the Company, in the ordinary course of business consistent with past practice,
or (E) any action, event, occurrence or transaction that would have been
prohibited by Section 6.1 if this Agreement had been in effect since December
31, 2000.
Section 4.11 Absence of Litigation. Except as disclosed in any
Company SEC Report or in Section 4.11 of the Company Disclosure Schedule, there
is no claim, action, proceeding or investigation pending, or to the Knowledge of
the Company, threatened against the Company or any of its Subsidiaries, or
affecting any property or asset of the Company or any of its Subsidiaries,
before any court, arbitrator or Governmental Entity, in each case except to the
extent that the damages sought are less than $100,000 or if adversely determined
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect. As of the date hereof, none of the Company, any
of its Subsidiaries or any property or asset of the Company or any of its
Subsidiaries is subject to any order, writ, judgment, injunction, decree,
determination or award imposed by any court, arbitrator or Governmental Entity,
in each case except to the extent that the damages sought are less than $100,000
or if adversely determined would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
Section 4.12 Employee Benefit Plans.
(a) Section 4.12(a) of the Company Disclosure Schedule contains a
true and complete list of each deferred compensation and each bonus or other
incentive compensation, stock purchase, stock option and other equity
compensation or ownership plan, program, agreement or arrangement, each
severance or termination pay, medical, surgical, hospitalization, life insurance
and other "welfare" plan, fund or program (within the
29
meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")); each profit-sharing, stock bonus or other "pension" plan,
fund or program (within the meaning of Section 3(2) of ERISA); each employment,
retention, termination or severance agreement; and each other employee benefit
plan, fund, program, agreement or arrangement, in each case, that is sponsored,
maintained or contributed to or required to be contributed to by the Company or
by any trade or business, whether or not incorporated (an "ERISA Affiliate"),
that, together with the Company would be deemed a "single employer" within the
meaning of Section 4001(b) of ERISA, or to which the Company or an ERISA
Affiliate is party, whether written or oral, for the benefit of any employee or
director or former employee or director (or any of their respective
beneficiaries), of the Company or any of its Subsidiaries (the "Company Benefit
Plans"). With respect to each Company Benefit Plan, the Company has delivered or
made available to Parent a true and correct copy of each of the following
documents: (i) the two most recent annual report (Form 5500) filed with the
Internal Revenue Service (the "IRS"), if required under ERISA, (ii) a copy of
the Company Benefit Plan and any material amendments thereto, (iii) each trust
agreement, insurance contract or other funding vehicle relating to such Company
Benefit Plan, (iv) the most recent summary plan description for each Company
Benefit Plan for which a summary plan description is required, (v) the most
recent actuarial report or valuation relating to a Company Benefit Plan subject
to Title IV of ERISA, if any, and (vi) the most recent determination letter, if
any, issued by the IRS with respect to any Company Benefit Plan intended to
qualify under Section 401(a) or 501(c) of the Code.
(b) Each Company Benefit Plan has been administered in accordance
with its terms, and in compliance with applicable Laws, including ERISA and the
Code, the rules and regulations thereunder and all applicable collective
bargaining agreements.
(c) No liability under Title IV or Section 302 of ERISA has been
incurred by the Company or any ERISA Affiliate that has not been satisfied in
full, and no condition exists that presents a material risk to the Company or
any ERISA Affiliate of incurring any such liability, other than liability for
premiums due the Pension Benefit Guaranty Corporation ("PBGC") (which premiums
have been paid when due).
(d) No Company Benefit Plan subject to Title IV of ERISA or any
trust established thereunder has incurred any "accumulated funding deficiency"
(as defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, as of the last day of the most recent fiscal year of each such Company
Benefit Plan ended prior to the Closing Date nor has there been any application
for waiver of the minimum funding standards imposed by Section 412 of the Code.
All contributions required to be made with
30
respect to any Company Benefit Plan on or prior to the Closing Date have been
timely made or are reflected on the balance sheet.
(e) No Company Benefit Plan is a "multiemployer plan," as defined in
Section 3(37) of ERISA, nor is any Company Benefit Plan a plan described in
Section 4063(a) of ERISA.
(f) No Company Benefit Plan has, to the Knowledge of the Company,
engaged in a "prohibited transaction" (as defined in Section 4975 of the Code or
Section 406 of ERISA).
(g) Each Company Benefit Plan that is intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter from
the IRS to such effect, and no fact, condition or set of circumstances has
occurred since the date of such determination letter which could adversely
affect such favorable determination.
(h) Except as set forth in Section 4.12(h) of the Company Disclosure
Schedule, the Company and its Subsidiaries have no liability for life, health,
medical or other welfare benefits to employees or former employees (or their
beneficiaries) for periods extending beyond their respective dates of retirement
or other termination of service.
(i) Except as disclosed in Section 4.12(i) of the Company Disclosure
Schedule, or except as otherwise contemplated hereby, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will, either alone or in combination with another event, (i) entitle any
current or former employee, director or officer of the Company or any ERISA
Affiliate to severance pay, unemployment compensation or any other payment, (ii)
accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee, director or officer or (iii) require the
immediate funding or financing of any compensation or benefits.
(j) There are no pending, threatened or anticipated claims (other
than routine claims for benefits), by or on behalf of any Company Benefit Plan,
by any employee or beneficiary covered under any such Company Benefit Plan, or
otherwise involving any such Company Benefit Plan.
Section 4.13 Labor Matters. There is no labor dispute, strike, work
stoppage or lockout, or, to the Knowledge of the Company, threat thereof, by or
with respect to any employee of the Company or any of its Subsidiaries. To the
Knowledge of the Company, there are no organizational efforts with respect to
the formation of a
31
collective bargaining unit being made or threatened involving employees of the
Company or any of its Subsidiaries. None of the Company or any of its
Subsidiaries has breached or otherwise failed to comply with any provision of
any collective bargaining or other labor union contract applicable to any
employees of the Company or any of its Subsidiaries and there are no grievances
or complaints outstanding or, to the Knowledge of the Company, threatened
against the Company or any of its Subsidiaries under any such contract. The
Company and its Subsidiaries have been and are in material compliance with all
applicable Laws respecting employment and employment practices, terms and
conditions of employment, wages, hours of work and occupational safety and
health. The Company and its Subsidiaries are not and have not engaged in any
unfair labor practices as defined in the National Labor Relations Act or other
applicable Law.
Section 4.14 Environmental Matters.
(a) Except as set forth in Section 4.14(a) of the Company Disclosure
Schedule, and except as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, (i) the Company and its
Subsidiaries are in compliance with all applicable Environmental Laws (which
compliance includes the possession by the Company and each of its Subsidiaries
of all Environmental Permits, and compliance with the terms and conditions
thereof); (ii) there is no Environmental Claim pending or threatened in writing
against the Company or any of its Subsidiaries; (iii) there is no civil,
criminal or administrative judgment against the Company or any of its
Subsidiaries or, to the Knowledge of the Company or any of its Subsidiaries,
against any Person or entity whose liability for any Environmental Claim the
Company or any of its Subsidiaries has contractually or by operation of law
retained or assumed pursuant to Environmental Laws; (iv) the Company and its
Subsidiaries have all Environmental Permits required pursuant to Environmental
Laws and the Company and its Subsidiaries are in compliance with all terms and
conditions thereof; (v) the Company and its Subsidiaries have filed all notices
required under Environmental Laws indicating the past and present Release,
generation, treatment, storage or disposal of Hazardous Substances; (vi) there
is not at, on or in any of the real properties owned or leased by the Company or
any of its Subsidiaries any generation, use, handling, Release, treatment,
recycling, storage or disposal of any Hazardous Substances in a manner not in
compliance with Environmental Laws; and (vii) there are no past or present
actions, activities, circumstances, conditions, events or incidents, including
the Release or presence of any Hazardous Substances, which are reasonably likely
to form the basis of any Environmental Claim against the Company or any of its
Subsidiaries or against any Person or entity whose liability for any
Environmental Claim, the Company or any of its Subsidiaries has retained or
assumed either contractually or by operation of Law.
32
(b) The Company has made available to Parent copies of all
environmental audits, assessments or studies completed since January 1, 1997
with respect to the facilities or Real Property (as defined in Section 4.18(b))
currently owned, leased or operated by the Company or any of its Subsidiaries.
Section 4.15 Intellectual Property.
(a) Set forth in Section 4.15(a) of the Company Disclosure Schedule,
for all Intellectual Property that is owned directly or indirectly by the
Company and its Subsidiaries, is a complete and accurate list of all United
States and foreign: (A) issued and pending Patents; (B) Trademark registrations
(including Internet Domain Name registrations), trademark applications and
material unregistered Trademarks; (C) Copyright registrations, Copyright
applications and material unregistered Copyrights, and (D) all software which is
licensed, leased or otherwise used by the Company or its Subsidiaries (other
than mass market software that is available in consumer retail stores or
otherwise commercially available and subject to "shrink-wrap," "click-through"
or other standard form license agreements), and all material software which is
owned by the Company or any of its Subsidiaries, and (E) all material
agreements, in either instance pursuant to which the Company or its Subsidiaries
granted, relinquished, or obtained any right to use or practice any rights under
any Intellectual Property, including, without limitation, license agreements,
settlement agreements and covenants not to xxx ("IP Agreements").
(b) To the Knowledge of the Company, (i) all IP Agreements are in
full force and effect and constitute valid and binding agreements of the Company
or its Subsidiaries and the other parties thereto in accordance with their
respective terms, and (ii) the consummation of the transactions contemplated
hereby will not, in any material respect, violate, or constitute a breach under,
any such IP Agreement. To the Knowledge of the Company and except as set forth
in Section 4.15(b) of the Company Disclosure Schedule, (i) the Company and its
Subsidiaries are not in default in any material respect under any of such IP
Agreements and have not received any written notice of such a default, (ii) no
other party to any such IP Agreements is in default in any material respect
thereunder, and (iii) no event has occurred or condition exists that with notice
or lapse of time or both would constitute such a default thereunder.
(c) Except as set forth in Section 4.15(c) of the Company Disclosure
Schedule:
33
(i) the Company and each of its Subsidiaries owns, is licensed
or otherwise has the legal right to use, free and clear of all Liens, all
Intellectual Property used in or necessary to the conduct of their respective
businesses, except for such Intellectual Property the loss of use of which would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect;
(ii) the Company and its Subsidiaries take commercially
reasonable measures to maintain and protect each item of Intellectual Property
which is owned by the Company or its Subsidiaries; all registrations and
applications for Intellectual Property that are owned directly or indirectly by
the Company and its Subsidiaries have been maintained; and all Intellectual
Property owned by the Company and its Subsidiaries or, to the best Knowledge of
the Company, licensed to the Company and its Subsidiaries is valid and
subsisting;
(iii) either the Company or its Subsidiaries is the current
record owner of all Intellectual Property which is owned by the Company or its
Subsidiaries, respectively, and which is the subject of an application or
registration;
(iv) none of the current or former stockholders, officers,
directors, or employees of either the Company or its Subsidiaries have any
rights, title or interest, in any Intellectual Property owned or used by the
Company or its Subsidiaries;
(v) there are no material claims pending or, to the Knowledge
of the Company, threatened, nor has the Company nor any of its Subsidiaries
received written notice from any Person (1) challenging the validity of any
Intellectual Property owned or used by the Company or its Subsidiaries or (2)
alleging that the Company or its Subsidiaries has engaged in any actual or
potential infringement, dilution, misappropriation or other unauthorized use of
any Intellectual Property, and the Company has no Knowledge of any basis for
such a claim against the Company or its Subsidiaries;
(vi) there are no material claims pending or, to the Knowledge
of the Company, threatened nor has the Company or its Subsidiaries sent any
written notice to any Person regarding any actual or potential infringement,
dilution, misappropriation, or other unauthorized use of Intellectual Property
owned or used by the Company or any of its Subsidiaries;
(vii) the Company and its Subsidiaries take commercially
reasonable measures to protect the confidentiality of their respective trade
secrets;
34
(viii) no settlement agreements, consents, judgments, orders,
forbearance to xxx or similar obligations limit or restrict the Company's or any
Subsidiaries' rights in and to any Intellectual Property;
(ix) to the Knowledge of the Company, the conduct of the
businesses of the Company and its Subsidiaries does not, in any material
respect, infringe, violate or dilute any Intellectual Property rights of any
Person;
(x) the consummation of the transactions contemplated hereby
will not result in the loss or impairment of the Company's or its Subsidiaries'
rights to own or use any Intellectual Property, nor will such consummation
require the consent of any Person in respect of any Intellectual Property; and
(xi) the operation of any website by or on behalf of the
Company or its Subsidiaries, is in compliance, in all material respects, with
all applicable laws, rules and regulations, including, without limitation, those
pertaining to the collection and use of personal data.
Section 4.16 Taxes.
(a) Except as set forth in Section 4.16(a) of the Company Disclosure
Schedule or as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect:
(i) the Company and each of its Subsidiaries have timely filed
(or have had timely filed on their behalf) or, with respect to Tax Returns not
yet due, will file or cause to be timely filed, all Tax Returns required by
applicable Law to be filed by any of them prior to or as of the Effective Time.
All such Tax Returns and amendments thereto are, or with respect to Tax Returns
not yet due, will be, true, complete and correct in all material respects;
(ii) the Company and each of its Subsidiaries have paid (or
have had paid on their behalf), or have established (or have had established on
their behalf and for their sole benefit and recourse), or where payment is not
yet due, will establish or cause to be established on or before the Effective
Time (if required by GAAP), an adequate reserve in accordance with GAAP for the
payment of, all Taxes due, with respect to any period ending prior to or as of
the Effective Time;
(iii) no federal, state, local or foreign audits, assessments,
35
collections, investigations or other administrative proceedings or court
proceedings are presently pending or have been threatened in writing with regard
to any Taxes or Tax Returns of the Company or its Subsidiaries;
(iv) no deficiency or adjustment for any Taxes has been
proposed, asserted or assessed against the Company or any Subsidiary that has
not been paid or otherwise discharged or for which the Company has taken
adequate reserves in accordance with GAAP. There are no material Liens for Taxes
upon the assets of the Company or any Subsidiary, except Liens for current Taxes
not yet due and payable;
(v) neither the Company nor any of its Subsidiaries is a party
to any Tax sharing agreement, Tax indemnity agreement or similar contract,
arrangement or agreement to with respect to Taxes of the Company or any of its
Subsidiaries;
(vi) neither the Company nor any Subsidiary has constituted
either a "distributing corporation" or a "controlled corporation" (within the
meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
qualifying for tax-free treatment under Section 355 of the Code (i) in the two
years prior to the date hereof or (ii) in a distribution which could otherwise
constitute part of a "plan" or "series of related transactions" (within the
meaning of Section 355(e) of the Code) in conjunction with the Merger;
(vii) the Company has, prior to the date hereof, provided
Parent with copies of all federal Tax Returns for the tax years ending December
31, 1997 through December 31, 1999;
(viii) there are no outstanding agreements or waivers
extending or waiving the statutory period of limitation applicable to any claim
for, or the period for the collection or assessment of, Taxes due for any
taxable period with respect to any Tax for which the Company may be subject or
liable. The federal income tax years of the Company (or any consolidated group
of which the Company has been a member) that have been the subject of an audit
are disclosed in Section 4.16(a) of the Company Disclosure Schedule;
(ix) the Company has not agreed, nor is it required to make,
any material adjustment under sections 446(e) or 481(a) of the Code nor has it
entered into any closing agreement pursuant to section 7121 of the Code or any
other agreement with similar Tax purposes;
36
(x) the Company and each of its Subsidiaries has complied in
all material respects with the provisions of the Code relating to the payment
and withholding of Taxes;
(xi) neither the Company nor any of its Subsidiaries has (i)
been a member of an affiliated group filing a U.S. consolidated federal income
Tax Return or an affiliated, consolidated, combined or unitary group for state
income Tax Return purposes (other than a group the common parent of which was
the Company) or (ii) any liability for Taxes of any Person (other than the
Company or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6
(or any comparable provision of state, local or foreign law), as a transferee or
successor, by contract or otherwise;
(xii) all transactions that could give rise to an
understatement of federal income Tax have been adequately disclosed on the Tax
Returns of the Company and of its Subsidiaries in accordance with Section
6662(d)(2)(B) of the Code;
(xiii) the Company is not a "United States real property
holding corporation" as defined in Section 897 of the Code;
(xiv) no power of attorney has been granted by the Company or
any of its Subsidiaries with respect to any matter relating to Taxes which is
currently in force;
(xv) there is no pending claim that has been asserted or
proposed in writing by any taxing authority of a jurisdiction where the Company
and its Subsidiaries do not file Tax Returns to the effect that the Company or
one or more of its Subsidiaries is or may have been subject to taxation by that
jurisdiction; and
(xvi) no amount paid or payable by the Company or any of its
Subsidiaries to any executive officer of the Company or any of its Subsidiaries
in connection with the transactions contemplated hereby (either solely as a
result thereof or as a result of such transactions in conjunction with any other
event) will be an "excess parachute payment" within the meaning of Section 280G
of the Code. In addition, Section 162(m) of the Code will not apply to any
amount paid or payable by the Company or any of its Subsidiaries under any
contract or any Company Benefit Plan currently in effect.
(b) For purposes of this Agreement, the following terms shall have
the following meanings:
37
(i) "Tax" or "Taxes" means any tax, custom, duty, governmental
fee or other like assessment or charge of any kind whatsoever imposed by any
Taxing Authority (including, but not limited to, any federal, state, local,
foreign or provincial income, gross receipts, property, sales, use, gains,
license, excise, franchise, employment, social security, withholding, payroll,
alternative or added minimum, ad valorem, transfer or exercise tax or any
disability insurance contributions, unemployment insurance contributions or
workers' compensation contributions) together with any interest, addition or
penalty imposed thereon.
(ii) "Tax Authority" means the Internal Revenue Service and
any other domestic or foreign governmental authority responsible for the
administration of any Taxes.
(iii) "Tax Returns" means all federal, state, local and
foreign tax returns, declarations, statements, reports, schedules, forms and
information returns and any amended tax return relating to Taxes.
Section 4.17 Reorganization. None of the Company or any of its
Affiliates has taken or agreed to take any action, has failed to take any action
or has Knowledge of any fact, agreement, plan or other circumstance that is
reasonably likely to prevent the Merger from constituting a reorganization
qualifying under the provisions of Section 368(a) of the Code.
Section 4.18 Real Property.
(a) Ownership of the Premises. The Company or a Subsidiary has good
and marketable title to the real property described on Schedule 4.18(a) of the
Company Disclosure Schedule and to all of the buildings, structures and other
improvements located thereon (collectively, the "Owned Real Property") free and
clear of all Liens, except for (i) the Liens described in said Schedule 4.18(a),
(ii) Liens for Taxes not yet due and payable, or Liens for Taxes being contested
in good faith which are not material or for which adequate reserves have not
been taken in accordance with GAAP, (iii) mechanics' and materialmen's liens and
similar lien for amounts not more than 60 days overdue or which are being
contested in good faith for which final judgments have not been entered and (iv)
easements, rights-of-way and other non-monetary encumbrances and other title
defects that do not, individually or in the aggregate, materially diminish the
value of the Owned Real Property as currently used, occupied and operated, or
interfere in any material respect with, or materially increase the cost of, the
use, occupancy or operation of the applicable parcel of Owned Real Property as
currently used, occupied and operated (col-
38
lectively, the "Permitted Owned Real Property Exceptions"). The Owned Real
Property constitutes all of the real property owned by the Company and its
Subsidiaries. Except as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, (i) any certificates of
occupancy ("CO") or the equivalent thereof and other permits or approvals
required with respect to the buildings, structures and improvements on any of
the Owned Real Property have been obtained and are currently in effect, proper
and valid; and (ii) to the Knowledge of the Company, there is no reasonable
basis or ground for revocation or limitation of any CO issued for the Owned Real
Property or the Leased Real Property (as defined below). To the Knowledge of the
Company, no written notice from any city, county or other Governmental Entity
has been received by the Company or any of its Subsidiaries requiring or calling
attention to the need for any material work, repair, construction, alteration or
installation on, or in connection with, the Owned Real Property.
(b) Leased Properties. Schedule 4.18(b) of the Company Disclosure
Schedule is a true, correct and complete schedule of all leases, subleases, and
other agreements (collectively, the "Real Property Leases") under which the
Company or any Subsidiary uses or occupies or has the right to use or occupy
real property that is not Owned Real Property (the land, buildings and other
improvements covered by the Real Property Leases being herein called the "Leased
Real Property"). Except as Schedule 4.18(b) of the Company Disclosure Schedule
identifies upcoming lease expiration dates which may occur prior to the
Effective Date, each Real Property Lease is valid, binding and in full force and
effect and, to the Knowledge of the Company, no termination event or uncured
default (or notice thereof) of a material nature on the part of the Company or
its Subsidiaries under any Real Property Lease exists. Except in each case where
the failure would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, to the Knowledge of the Company, all
rent and other sums and charges owed and payable by the Company or its
Subsidiaries as tenants under the Real Property Leases are current. The Company
or a Subsidiary owns the leasehold interest under each Real Property Lease free
and clear of all Liens, except (i) as reflected or reserved against in the
balance sheets of the Company in the Company SEC Reports filed prior to the date
hereof, (ii)(x) general and special assessments that are (A) not in default and
(B) payable without penalty or interest, and (iii) the Liens described in
Schedule 4.18(b) of the Company Disclosure Schedule, and those other Liens which
would not materially affect the use of such Leased Real Property. A true,
correct and complete copy of each Real Property Lease has been made available to
Parent. The Leased Real Property and the Owned Real Property are hereinafter
collectively referred to as the "Real Property."
39
(c) Condemnation and Casualty. There is not any pending, or to the
best Knowledge of the Company, threatened or contemplated condemnation
proceeding affecting the Real Property or any part thereof, and no sale or other
disposition of the Real Property or any part thereof in lieu of condemnation. As
of the date hereof, to the Knowledge of the Company, no portion of the Real
Property has suffered any material damage by fire or other casualty which has
not heretofore been repaired and restored.
Section 4.19 Insurance. The Company has obtained and maintained in
full force and effect insurance of the type and in amounts customarily carried
by persons conducting businesses or owning assets similar to those of the
Company and its Subsidiaries.
Section 4.20 Customers and Suppliers.
(a) In a confidential letter provided in connection with Section
4.20(a) of the Company Disclosure Schedule, the Company sets forth a list of (i)
the names of the top five customers (in alphabetical order) for each of the
three main Subsidiaries of the Company to the extent that such customers
separately constitute at least 1% of such Subsidiaries' total revenues for the
applicable Subsidiary's fiscal year ended December 31, 2000 and (ii) the names
of the top five suppliers (in alphabetical order) for each of the three main
Subsidiaries of the Company.
(b) Except as set forth in Section 4.20(b) of the Company Disclosure
Schedule, since December 31, 2000, no material licensor, vendor, supplier,
wholesaler, licensee or customer of the Company, or any of its Subsidiaries, has
cancelled or otherwise modified its relationship with the Company or its
Subsidiaries in a manner that would, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect and, to the
Company's Knowledge, (i) no such person has expressed any intention to so cancel
or otherwise modify its relationship with the Company or any of its Subsidiaries
and (ii) the consummation of the transactions contemplated hereby will not
adversely affect such relationships.
Section 4.21 Transactions with Affiliates. Except (i) as set forth
in Section 4.21 of the Company Disclosure Schedule or the Company SEC Reports
(ii) for employee compensation or advances in the ordinary course of business or
(iii) for the Voting Agreement, since December 31, 2000, (x) there have been no
transactions between the Company or any of its Subsidiaries and any stockholder
or Affiliate of a stockholder, and (y) there are no agreements between the
Company or its Subsidiaries and a stockholder or an Affiliate of a stockholder.
40
Section 4.22 Opinion of Financial Advisor. A special, independent
committee of the Company's Board of Directors (the "Special Committee") has
received the written opinion of Gleacher & Co. LLC (the "Company Financial
Advisor") on or prior to the date hereof, to the effect that, as of the date of
such opinion, the Merger Consideration is fair to the stockholders of the
Company from a financial point of view, and the Company will deliver a copy of
such written opinion to Parent promptly after the date hereof.
Section 4.23 Vote Required. At the Stockholders' Meeting, the
affirmative vote of the holders of a majority of the votes cast by the holders
of the Common Stock entitled to vote at the Stockholders' Meeting are the only
votes of the holders of any class or series of capital stock of the Company
necessary to adopt this Agreement. The foregoing representation is made in
reliance upon the representations by Parent and Acquisition Sub contained in
Section 5.5(c) of this Agreement.
Section 4.24 Brokers. Except for the Company Financial Advisor (a
copy of whose engagement letter has been provided to Parent), no broker, finder
or investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the Merger based upon arrangements made by or on
behalf of the Company.
Section 4.25 State Take-over Statutes and Article Eighth. In
reliance upon the representations by Parent and Acquisition Sub contained in
Section 5.5(c) of this Agreement, the Company represents that the action of the
Board of Directors of the Company in approving the Merger and this Agreement is
sufficient to render inapplicable to the Merger the provisions of Section 203 of
the DGCL and the provisions of Article Eighth of the Company Certificate of
Incorporation are inapplicable to this Agreement and the transactions
contemplated hereby. To the Knowledge of the Company, no other state take-over
statute or similar statute or regulation applies, or purports to apply, to the
transactions contemplated hereby. The Board of Directors of the Company has
approved the execution of the Voting Agreement by Parent in accordance with
Section 203(a)(1) of the DGCL.
Section 4.26 Rights Agreement. The Board of Directors of the Company
has resolved to, and the Company promptly after the execution hereof will, take
all action reasonably necessary to confirm that the Company Rights Agreement has
expired by its terms and has not been extended and that no agreement similar
thereto has been created or put into effect; and, consequently, the rights found
in the terms of the Company Rights
41
Agreement are inapplicable to the Merger, this Agreement, the Voting Agreement
and the other transactions contemplated hereby and thereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
PARENT AND ACQUISITION SUB
Parent, and Acquisition Sub, jointly and severally, represent and
warrant to the Company that:
Section 5.1 Organization and Qualification. Each of Parent and
Acquisition Sub is a corporation duly incorporated, validly existing and in good
standing, under the laws of Delaware, and has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to have such power, authority and governmental approvals would
not, individually or in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect (as defined below). The term "Parent Material Adverse
Effect" means any fact, state of facts or circumstances, event, change or effect
that is or is reasonably be likely to have a material adverse effect,
individually or in the aggregate, on the assets, financial condition, prospects,
business, operations or results of operations of Parent and its Subsidiaries
taken as a whole.
Section 5.2 Certificate of Incorporation and By-Laws. Parent has
made available to the Company a complete and correct copy of the certificate of
incorporation (the "Parent Certificate of Incorporation") and the by-laws (the
"Parent By-laws"), each as amended to date, of Parent. Acquisition Sub has made
available to the Company a complete and correct copy of the certificate of
incorporation (the "Acquisition Sub Certificate of Incorporation") and the
by-laws (the "Acquisition Sub By-laws"), each as amended to date, of Acquisition
Sub. The Parent Certificate of Incorporation, the Parent By-laws, the
Acquisition Sub Certificate of Incorporation and the Acquisition Sub By-laws are
in full force and effect. Parent is not in material violation of any provision
of the Parent Certificate of Incorporation or Parent By-laws and Acquisition Sub
is not in material violation of the Acquisition Sub Certificate of Incorporation
or the Acquisition Sub By-laws.
42
Section 5.3 Capitalization.
43
(a) The authorized capital stock of Parent consists of 600,000,000
shares of Parent Shares and 200,000,000 shares of preferred stock, par value
$0.01 per share, of Parent ("Parent Preferred Stock"). As of the close of
business on April 30, 2001, (i) 266,051,855 shares of Parent Shares (excluding
treasury shares) were issued and outstanding, (ii) 31,282,222 shares of Parent
Shares were held by Parent in its treasury, (iii) 10,048,240 shares of Parent
Shares were reserved for issuance pursuant to outstanding unexercised employee
stock options ("Parent Options") granted pursuant to Parent's stock option plans
("Parent Stock Option Plans") or otherwise and (vi) no shares of Parent
Preferred Stock were issued and outstanding. No shares of capital stock of
Parent are owned by any Subsidiary of Parent.
(b) All shares of capital stock of Parent to be issued in connection
with the Merger, when issued pursuant to this Agreement, will be duly
authorized, validly issued, fully paid and non-assessable.
Section 5.4 Authority Relative to Agreement. Each of Parent and
Acquisition Sub has all necessary power and authority to execute and deliver
this Agreement, to perform their obligations hereunder and to consummate the
Merger. The execution and delivery of this Agreement by Parent and Acquisition
Sub and the consummation by Parent and Acquisition Sub of the Merger have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Parent or Acquisition Sub are necessary to
authorize the execution and delivery of this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval of the Merger by Parent, as the sole stockholder of Acquisition Sub,
which Parent hereby agrees to approve in its capacity as sole stockholder, and
the filing and recordation of appropriate merger documents as required by the
DGCL, which Parent and Acquisition Sub agree to do in accordance with the terms
of this Agreement). This Agreement has been duly and validly executed and
delivered by Parent and Acquisition Sub and this Agreement constitutes a legal,
valid and binding obligation of Parent and Acquisition Sub, enforceable against
Parent and Acquisition Sub in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency, moratorium, or
other similar laws, now or hereafter in effect, affecting creditors' rights
generally and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
Section 5.5 No Conflict; Required Filings and Consents.
44
(a) The execution and delivery of this Agreement by Parent and
Acquisition Sub does not, and the performance of this Agreement by Parent and
Acquisition Sub will not, (i) conflict with or violate the Parent Certificate of
Incorporation or the Parent By-laws or the Acquisition Sub Certificate of
Incorporation or the Acquisition Sub By-laws, (ii) assuming the consents,
approvals, authorizations, waivers or permits specified in Section 5.5(b) have
been received and the waiting periods referred to therein have expired, conflict
with or violate any Law applicable to Parent or Acquisition Sub or by which any
property or asset of Parent or Acquisition Sub is bound or affected or (iii)
result in any breach of, or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a Lien on any property or asset of Parent or Acquisition Sub
pursuant to, any material note, bond, mortgage, indenture or credit agreement,
except, with respect to clauses (ii) and (iii), for any such conflicts,
violations, breaches, defaults or other occurrences of the type referred to
above which would not, individually or in the aggregate, reasonably be expected
to have a Parent Material Adverse Effect and would not prevent or materially
delay the consummation of the Merger.
(b) The execution and delivery of this Agreement by Parent and
Acquisition Sub do not, and the performance of this Agreement by Parent and
Acquisition Sub will not, require any consent, approval, authorization, waiver
or permit of, or filing with or notification to, any Governmental Entity, except
for applicable requirements of the Exchange Act, the Securities Act, Blue Sky
Laws, the HSR Act and recordation of appropriate merger documents as required by
the DGCL and the rules of the NYSE, and except where failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, would not, individually or in the aggregate, reasonably be
expected to have a Parent Material Adverse Effect and would not prevent or
materially delay the consummation of the Merger.
(c) Parent and Acquisition Sub represent that (i) they do not
currently own, and will not own from the date hereof to and including the record
date for determination of stockholders entitled to notice to vote upon the
Merger, ten (10%) percent or more of the Common Stock and (ii) neither Parent
nor Acquisition Sub nor any "associate" (as defined in Section 203 of the DGCL)
of either of them is an "interested stockholder" (as defined in Section 203 of
the DGCL) of the Company (except as arising under the Voting Agreement (which
the Company has represented herein that it has been approved prior to execution
by the Company's Board of Directors in accordance with Section 203(a)(1) of the
DGCL)).
45
Section 5.6 Parent SEC Reports. Parent has filed with the SEC, at or
prior to the time due, and has heretofore made available to the Company true and
complete copies of, all forms, reports, schedules, statements and other
documents required to be filed with the SEC by Parent since January 1, 1997
(together with all information incorporated therein by reference, the "Parent
SEC Reports"). As of their respective dates, the Parent SEC Reports complied in
all material respects with the requirements of 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 Parent SEC Reports, and none of the
Parent SEC Reports at the time they were filed 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. The financial
statements (including the related notes) of Parent included in the Parent SEC
Reports 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 GAAP in all material respects and
fairly present in all material respects the consolidated financial position of
Parent and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal and recurring year-end
audit adjustments). Except as, and to the extent, set forth in the Parent SEC
Reports, Parent and its Subsidiaries do not have any liability or obligation of
any nature (whether accrued, absolute, contingent or otherwise) other than
liabilities and obligations which would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect.
Section 5.7 Disclosure Documents. The information supplied by Parent
for inclusion in the Form S-4 and the Proxy Statement/Prospectus (including by
incorporation by reference) shall not, at (i) the time the Form S-4 is declared
effective, (ii) the time the Proxy Statement/Prospectus (or any amendment
thereof or supplement thereto) is first mailed to the stockholders of the
Company, (iii) the time of the Stockholders' Meeting and (iv) the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. If, at any time prior to the Effective Time,
any event or circumstance relating to Parent or any of its Subsidiaries, or
their respective officers or directors, should be discovered by Parent which,
pursuant to the Securities Act or Exchange Act, should be set forth in an
amendment or a supplement to the Form S-4 or Proxy Statement/Prospectus, Parent
shall promptly notify the Company in writing. All documents that Parent is
responsible for filing with the SEC in connection with the Merger will comply as
to form in all material respects with the applicable requirements of the
Securities Act and the Exchange Act.
46
Section 5.8 Absence of Certain Changes or Events. Since December 31,
2000, except as disclosed in any Parent SEC Report filed prior to the date
hereof or as contemplated hereby, there has not been any change, event or
circumstance which, when taken individually or together with all other changes,
events or circumstances, has had or which would, individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse Effect.
Section 5.9 Reorganization. None of Parent or any of its Affiliates
has taken or agreed to take any action, has failed to take any action or has
Knowledge of any fact, agreement, plan or other circumstance that is reasonably
likely to prevent the Merger from constituting a reorganization qualifying under
the provisions of Section 368(a) of the Code.
Section 5.10 Brokers. Except for Xxxxxxx Xxxxx Xxxxxx, which has
been engaged solely to furnish a fairness opinion to Parent, no broker, finder
or investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the Merger based upon arrangements made by or on
behalf of Parent.
Section 5.11 Interim Operations of Acquisition Sub. Acquisition Sub
was formed solely for the purpose of engaging in the transactions contemplated
hereby and has not engaged, and, until the Effective Time, will not engage, in
any business other than in connection with the transactions contemplated hereby.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1 Conduct of Business by the Company. The Company hereby
covenants and agrees that, between the date hereof and the Effective Time,
except (x) as expressly contemplated hereby (including, as set forth in Section
6.1 of the Company Disclosure Schedule or as set forth as an exception or
qualification to subsections (a) through (p) of this Section 6.1), and (y) as
Parent shall otherwise agree in advance in writing, the business of the Company
and its Subsidiaries shall be conducted only in, and the Company shall not take
any action except in, the ordinary course of business and in a manner consistent
with past practice; and the Company and its Subsidiaries shall use commercially
reasonable efforts to (i) preserve intact the Company's business organization
and maintain its relations with the current officers, employees and consultants
of the Company and its Subsidiaries, (ii) maintain in effect all Company Permits
and Environmental Permits and (iii) maintain its existing relations with
customers, distributors,
47
manufacturers, dealers and suppliers with which the Company and its Subsidiaries
have business relations. By way of amplification and not limitation, between the
date hereof and the Effective Time, the Company will not, and shall not permit
any of its Subsidiaries to, directly or indirectly, do any of the following
except in compliance with the exceptions listed above:
(a) amend or otherwise change the Company Certificate of
Incorporation or the Company By-laws or those (or the equivalent organizational
documents) of any of its Subsidiaries;
(b) issue, sell, pledge, hypothecate, dispose of, grant, license,
encumber or otherwise transfer, or authorize the issuance, sale, pledge,
disposition, grant, transfer or encumbrance of, (i) any shares of its or its
Subsidiaries' capital stock, or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of its or its Subsidiaries'
capital stock or any other ownership interest (including any phantom interest),
of the Company or any of its Subsidiaries (except for the issuance of shares
issuable pursuant to any Company Options and Company Warrants outstanding as of
the date hereof), (ii) any assets except for sales of assets in the ordinary
course of business consistent with past practice and for the Liens granted in
connection with its existing banking lines of credits and loans;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to the
Company's capital stock;
(d) in the case of the Company, reclassify, combine, split,
subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any
of its capital stock;
(e) (i) acquire (including by merger, consolidation, or acquisition
of stock or assets), or otherwise make any investment in, any corporation,
partnership, limited liability company, other business organization or any
division thereof, or any material amount of assets, (ii) enter into any material
contract, agreement or transaction, other than (x) in the ordinary course of
business, and (y) which would not be reasonably likely to prevent or materially
delay the consummation of the Merger, (iii) authorize any capital expenditures
which are, in the aggregate, in excess of 125% of the amounts currently budgeted
for the fiscal year 2001 or set forth in Section 6.1(e) of the Company
Disclosure Schedule, or (iv) enter into or amend any contract, agreement,
commitment or arrangement which would require the Company to take any action
prohibited by this subsection (e);
(f) incur any indebtedness for borrowed money, issue any debt
securities, assume, guarantee or endorse, or otherwise as an accommodation
become responsible for,
48
the obligations of any Person, agree to amend or otherwise modify in any manner
any agreement or instrument pursuant to which the Company has incurred
indebtedness, or make any loans or advances, except in the ordinary course of
business and consistent with past practice, except the refinancing of existing
indebtedness, borrowings under commercial paper programs in the ordinary course
of business or borrowings under existing bank lines of credit in the ordinary
course of business;
(g) except as required by Law or by the terms of any collective
bargaining agreement or other agreement currently in effect between the Company
or any Subsidiary of the Company and any employee thereof and, except to any
Person who is not a corporate officer of the Company, for increases in the
ordinary course of business in accordance with past practices, increase the
compensation payable or to become payable to its employees, or grant any
severance or termination pay to, or enter into any employment or severance
agreement with, any director or executive officer of it or any of its
Subsidiaries, or establish, adopt, enter into or amend in any material respect
or take action to accelerate any rights or benefits under any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, corporate officer or employee,
provided that this subsection shall not prevent the Company or any of its
Subsidiaries from making severance payments to the extent contractually
obligated under contractual arrangements currently existing at the Company or
such Subsidiary and previously disclosed to Parent;
(h) change in any respect (except as required by the SEC or changes
in GAAP or applicable law which become effective after the date hereof) any
accounting policies, practices or procedures;
(i) make any material Tax election or settle or compromise any
material claim, action, suit, litigation, proceeding, audit or controversy
relating to Taxes; or make a material change to any of its methods of reporting
income, deductions or accounting for federal income tax purposes from those
employed in the preparation of its federal income Tax Return for the taxable
year ending December 31, 1999, except as may be required by law;
(j) enter into any contract, agreement, lease, license, permit,
franchise or other instrument or obligation which, if in existence and known to
the Company prior to the date hereof would have resulted in a breach of Section
4.5;
49
(k) materially modify, amend or terminate any of the agreements
material to the Company or its Subsidiaries or waive, release or assign any
material rights or claims, except in the ordinary course of business consistent
with past practice;
(l) settle or compromise any arbitration, action, suit,
investigation or proceeding, other than in the ordinary course of business
consistent with past practice;
(m) amend or waive any right under any agreement with any Affiliate
of the Company (other than its Subsidiaries) or with any stockholder of the
Company or any of its Subsidiaries or any Affiliate of any such stockholder,
other than as may be done in the ordinary course of business and that is not
material, individually or in the aggregate, to the Company and its Subsidiaries
taken as a whole;
(n) take, or agree to commit to take, any action that would make any
representation or warranty of the Company contained herein inaccurate in any
material respect at, or as of any time prior to, the Effective Time;
(o) renew, extend or replace any of the Company's Real Property
Leases scheduled to expire prior to the Closing; or
(p) enter into, or publicly announce an intention to enter into, any
contract, agreement, commitment, plan or arrangement to, do any of the foregoing
actions set forth in this Section 6.1.
Section 6.2 Conduct of Business by Parent. Parent will not do,
directly or indirectly, any of the following:
(a) amend or otherwise change, in a material respect, the Parent
Certificate of Incorporation or the Parent By-laws; or
(b) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to
Parent's capital stock other than regular, quarterly cash dividends consistent
with past practice (including increases consistent with past practice) payable
by Parent or dividends payable by a Parent Subsidiary to another Parent
Subsidiary or Parent.
(c) change in any material respect (except as required by the SEC or
changes in GAAP or applicable law which become effective after the date hereof)
any accounting policies, practices or procedures;
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(d) take, or agree to commit to take, any action that would make any
representation or warranty of Parent and Acquisition Sub contained herein
inaccurate in any material respect at, or as of any time prior to, the Effective
Time; or
(e) enter into, or publicly announce an intention to enter into, any
contract, agreement, commitment, plan or arrangement to, do any of the foregoing
actions set forth in this Section 6.2.
Section 6.3 Certain Tax Matters. During the period from the date
hereof to the Effective Time, the Company shall, and shall cause each of its
Subsidiaries to, (i) timely file all Tax Returns and Forms 5500 ("Post-Signing
Returns") required to be filed by it, (ii) timely pay all Taxes due and payable
in respect of such Post-Signing Returns that are so filed, (iii) accrue a
reserve in its books and records and financial statements in accordance with
past practice for all Taxes payable by it for which no Post-Signing Return is
due prior to the Effective Time, (iv) promptly notify Parent of any suit, claim,
action, investigation, proceeding or audit (collectively, "Actions") pending
against or with respect to the Company or any of its Subsidiaries in respect of
any Tax and not settle or compromise any such Action without Parent's consent
(unless a settlement or compromise can be reached for an amount that is not
material to the Company or any of its Subsidiaries), (v) not make any material
Tax election without Parent's consent and (vi) cause any and all existing Tax
sharing agreements, Tax indemnity obligations and similar agreements,
arrangements and practices with respect to Taxes to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its Subsidiaries
is otherwise bound to be terminated as of the Closing Date so that after such
date neither the Company nor any of its Subsidiaries shall have any further
rights or liabilities thereunder.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 No Solicitation.
(a) The Company shall not, and shall cause its Subsidiaries not to,
and will use its reasonable best efforts to see that its officers, directors,
employees, investment bankers, consultants, attorneys, accountants, agents and
other representatives (collectively, "Representatives") do not, directly or
indirectly: (i) solicit, initiate, or knowingly encourage, or take any action to
facilitate the making of any Acquisition Proposal (as defined in Section 7.1(d))
or any inquiry with respect thereto; (ii) enter into any agreement with respect
to any
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Acquisition Proposal; or (iii) engage in discussions or negotiations with, or
afford access to or provide any nonpublic information or data relating to the
Company or its Subsidiaries to any Person relating to any Acquisition Proposal,
or otherwise cooperate with, or assist or participate in, facilitate or
knowingly encourage an effort or attempt by any Person to do or seek any of the
foregoing; provided, however, that in the event an unsolicited written
Acquisition Proposal for the Company or any of its Subsidiaries is received by
the Company not in violation of this Section 7.1(a), the Company may (X) furnish
confidential information with respect to the Company and its Subsidiaries to the
Person making such Acquisition Proposal and the Person's Affiliates and
representatives pursuant to a customary confidentiality agreement and (Y)
participate in discussions and engage in negotiations with the Person and the
Person's Affiliates and representatives regarding such Acquisition Proposal, in
response to an unsolicited written Acquisition Proposal if, but only if, the
Board of Directors of the Company, or the Special Committee, concludes in good
faith and on the basis of (1) advice from financial advisors that such
Acquisition Proposal involves consideration to the holders of the Company's
Common Stock which is reasonably likely to result in a Superior Proposal (as
defined in Section 7.1(d) to the Merger set forth in this Agreement and (2)
consultation with independent outside counsel that the failure to discuss,
negotiate and consider such Acquisition Proposal could constitute a violation of
the fiduciary duties of the Company's Board of Directors, or its Special
Committee, under applicable Law; and provided, further, that the Company shall
notify Parent promptly in writing of any inquiries, expressions of interest,
proposals or offers received by the Company or any of the Company's
representatives relating to any Acquisition Proposal or possibility or
consideration of making an Acquisition Proposal indicating, in connection with
such notice, the terms and conditions of any such Acquisition Proposal and, if
the Acquisition Proposal is formally made, the name of the Person making the
Acquisition Proposal. The Company hereby agrees to furnish promptly to Parent
copies of any confidential information provided to the Person making any such
Acquisition Proposal, or itemize such confidential information to the extent
same has previously been given or made available to Parent. In addition, the
Company hereby agrees that it will take the necessary steps promptly to inform
each Person making an Acquisition Proposal of the obligations undertaken in this
Section 7.1.
(b) Nothing contained herein shall prohibit the Company (i) from
taking and disclosing to its stockholders a position contemplated by Rule 14d-9
or Rule 14e-2 promulgated under the Exchange Act or (ii) from making any
disclosure to its stockholders if, in the good faith judgment of the Board of
Directors of the Company, or its Special Committee, after consultation with
independent outside counsel, failure to so disclose could constitute a violation
of the fiduciary duties of the Board of Directors, or its Special Committee,
under applicable Law.
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(c) Neither the Board of Directors of the Company nor its Special
Committee thereof shall, except as expressly permitted by Section 7.1(a) and
this Section 7.1(c), (i) withdraw, qualify or modify, or propose publicly to
withdraw, qualify or modify, in a manner adverse to Parent or Acquisition Sub,
the approval or recommendation by such Board of Directors or its Special
Committee of the Merger or this Agreement, (ii) approve or recommend, or propose
publicly to approve or recommend, any Acquisition Proposal, or (iii) cause the
Company to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement related to any Acquisition Proposal.
Notwithstanding the foregoing, in the event that prior to the adoption of this
Agreement by the holders of the Company's Common Stock, the Board of Directors
of the Company, or its Special Committee, determines in good faith, after it has
received a Superior Proposal (as defined below) and after consultation with
independent outside counsel that the failure to do so could constitute a
violation of fiduciary duties of the Company's Board of Directors, or its
Special Committee, under applicable Law, the Board of Directors of the Company,
or its Special Committee, may (subject to this and the following sentences)
inform Company stockholders that it no longer believes that the Merger or this
Agreement is advisable and no longer recommends approval (a "Subsequent
Determination"), but only at a time that is after the fifth business day
following Parent's receipt of written notice advising Parent that the Board of
Directors of the Company, or its Special Committee, has received a Superior
Proposal specifying the material terms and conditions of such Superior Proposal,
identifying the person making such Superior Proposal, and stating that it
intends to make a Subsequent Determination. After providing such notice, the
Company shall provide a reasonable opportunity to Parent to make such
adjustments in the terms and conditions of this Agreement as would enable the
Company to proceed with its recommendation to stockholders without making a
Subsequent Determination; provided however, that any such adjustments shall be
at the discretion of the parties at such time. Notwithstanding any other
provision of this Agreement, the Company shall submit this Agreement to its
stockholders whether or not the Board of Directors of the Company, or its
Special Committee, makes a Subsequent Determination, unless Parent has
terminated this Agreement pursuant to an applicable provision of Section 9.1.
(d) The Company agrees that it will take the necessary steps
promptly to inform its Representatives of the obligations undertaken in this
Section 7.1. The Company shall, and shall cause its Subsidiaries to, immediately
cease and cause to be terminated, and use its reasonable best efforts to cause
its Representatives to, immediately cease and cause to be terminated, all
discussions and negotiations, if any, that have taken place prior to the date
hereof with any Persons with respect to any Acquisition Proposal and shall
request the return or destruction of all confidential information provided to
any such Person. For
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purposes of this Agreement, "Acquisition Proposal" means any written offer or
proposal for, or any indication of interest in, any (i) direct or indirect
acquisition or purchase of a business or asset of the Company or any of its
Subsidiaries that constitutes 20% or more of the net revenues, net income or
assets of the Company and its Subsidiaries, taken as a whole; (ii) direct or
indirect acquisition or purchase of 20% or more of any class of equity
securities of the Company or any of its Subsidiaries whose business constitutes
20% or more of the net revenues, net income or assets of the Company and its
Subsidiaries, taken as a whole; (iii) tender offer or exchange offer that, if
consummated, would result in any Person beneficially owning 20% or more of any
class of equity securities of the Company, or any of its Subsidiaries whose
business constitutes 20% or more the net revenues, net income or assets of the
Company and its Subsidiaries, taken as a whole; or (iv) merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any of its Subsidiaries whose business
constitutes 20% or more of the net revenue, net income or assets of the Company
and its Subsidiaries, taken as a whole, other than the transactions contemplated
hereby. For purposes of this Agreement, "Superior Proposal" means any bona fide
written Acquisition Proposal obtained not in breach of this Section 7.1 made by
a Person the terms of which Acquisition Proposal the Board of Directors of the
Company, or its Special Committee, determines in its good faith judgment (after
consultation with the Company Financial Advisor, or another financial advisor of
nationally recognized reputation) to be more favorable (other than in immaterial
respects) to the Company's stockholders than the Merger taking into account all
relevant factors (including (x) whether, in the good faith judgment of the Board
of Directors of the Company, or its Special Committee, after obtaining advice
from the Company Financial Advisor, or another financial advisor of nationally
recognized reputation, the Person is reasonably able to finance the transaction,
(y) the likelihood that such Acquisition Proposal will be consummated and (z)
any proposed changes to this Agreement that may be proposed by Parent in
response to the Acquisition Proposal).
Section 7.2 Form S-4; Proxy Materials.
(a) As promptly as practicable after the execution of this
Agreement, (i) the Company shall prepare and shall cause to be filed with the
SEC a proxy statement (together with any amendments thereof or supplements
thereto, the "Proxy Statement/Prospectus") relating to the meeting of the
Company's stockholders to be held to consider approval and adoption of this
Agreement (the "Stockholders' Meeting") and (ii) Parent shall prepare and file
with the SEC a registration statement on Form S-4 (together with all amendments
thereto, the "Form S-4") in which the Proxy Statement/Prospectus shall be
included as a prospectus, in connection with the registration under the
Securities Act of the Parent Shares to be issued to the stockholders of the
Company pursuant to the
54
Merger. Each of Parent and the Company shall use all reasonable efforts to cause
the Form S-4 to become effective at such time as they shall agree, and, prior to
the effective date of the Form S-4, Parent shall use all reasonable efforts to
take all or any action required under any applicable federal or state securities
Laws in connection with the issuance of Parent Shares pursuant to the Merger.
Each of Parent and the Company shall furnish all information concerning it as
may reasonably be requested by the other party in connection with such actions
and the preparation of the Proxy Statement/Prospectus and the Form S-4. As
promptly as practicable after the Form S-4 shall have become effective, the
Company shall mail the Proxy Statement/Prospectus to its stockholders. Each of
Parent and the Company shall also promptly file, use all of their respective
reasonable efforts to cause to become effective as promptly as practicable and,
if required, mail to the Company's stockholders, any amendment to the Form S-4
or Proxy Statement/Prospectus which may become necessary after the date the
Registration Statement is declared effective.
(b) No amendment or supplement to the Proxy Statement/Prospectus or
the Form S-4 will be made by Parent or the Company without the approval of the
other party, which shall not be unreasonably withheld or delayed. Each of Parent
and the Company will advise the other, promptly after it receives notice
thereof, of the time when the Form S-4 has become effective or any supplement or
amendment has been filed, the issuance of any stop order, the suspension of the
qualification of the Parent Shares issuable in connection with the Merger for
offering or sale in any jurisdiction, or any request by the SEC for amendment of
the Proxy Statement/Prospectus or the Form S-4 or comments thereon and responses
thereto or requests by the SEC for additional information.
Section 7.3 Stockholders' Meetings.
(a) The Company shall call the Stockholders' Meeting, for the
purpose of voting upon the adoption of this Agreement, and the Company shall
hold the Stockholders' Meeting as soon as practicable after the date on which
the Form S-4 becomes effective. Subject to the terms of this Agreement, the
Company shall solicit from its stockholders proxies in favor of the adoption of
this Agreement, and shall take all other action reasonably necessary or
advisable to secure the vote of its stockholders, required by the AMEX or the
DGCL, as applicable, and to obtain approval by its stockholders of the
transactions contemplated hereby (the "Company Stockholder Approval").
(b) Subject to the terms of this Agreement, the Board of Directors
of the Company shall recommend approval and adoption of this Agreement and the
Merger by the Company's stockholders.
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Section 7.4 Appropriate Action; Consents; Filings.
(a) Each of the parties hereto shall promptly make its respective
filings, and thereafter make any other required submissions under the HSR Act
with respect to the transactions contemplated herein. The parties hereto will
use their respective commercially reasonable efforts to consummate and make
effective the transactions contemplated hereby and to cause the conditions to
the Merger set forth in Article VIII to be satisfied, and will do so in a manner
designed to obtain such regulatory clearance and the satisfaction of such
conditions as expeditiously as possible.
(b) Each of Parent and the Company shall, or shall cause its
respective Subsidiaries to, give any notices to third parties, and each of
Parent and the Company shall, and shall cause each of its Subsidiaries to, use
its respective commercially reasonable efforts to obtain any third party
consents, necessary, proper or advisable to consummate the Merger. Each of the
parties hereto will furnish to the other such reasonably necessary information
and reasonable assistance as the other may request in connection with the
preparation of any required governmental filings or submissions and will
cooperate in responding to any inquiry from a Governmental Entity, including
promptly informing the other party of such inquiry, consulting in advance before
making any presentations or submissions to a Governmental Entity, and supplying
each other with copies of all material correspondence, filings or communications
between either party and any Governmental Entity with respect to this Agreement.
Section 7.5 Access to Information; Confidentiality.
(a) From the date hereof to the Effective Time, to the extent
permitted by applicable Law and Contracts to which the Company is party thereto,
the Company and its Subsidiaries will (i) provide to Parent and its
Representatives access during normal business hours to all offices, properties,
personnel, books and records, information and documents which Parent may
reasonably request regarding the business, assets, liabilities, employees and
other aspects of the Company and its Subsidiaries and (ii) instruct the
Company's and its Subsidiaries' employees, counsel and financial advisors to
cooperate with Parent in its investigation of the business of the Company and
its Subsidiaries; provided, however, that the Company shall not be required to
provide access to any information or documents which would breach any agreement
with any third-party.
(b) The parties shall comply with, and shall cause their respective
Representatives to comply with, all of their respective obligations under the
Confidentiality
56
Agreement dated January 24, 2001 (the "Confidentiality Agreement") between
Parent and the Company.
(c) No investigation pursuant to this Section 7.5 shall affect any
representation or warranty contained herein of any party hereto or any condition
to the obligations of the parties hereto.
Section 7.6 Directors' and Officers' Indemnification and Insurance.
(a) The certificate of incorporation and by-laws of the Surviving
Corporation shall contain the provisions with respect to indemnification set
forth in the Company Certificate of Incorporation and the Company By-laws on the
date hereof, which provisions shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who at any time
prior to the Effective Time were officers, directors or employees of the Company
in respect of actions or omissions occurring at or prior to the Effective Time
(including the transactions contemplated hereby), unless such modification is
required by law.
(b) The Surviving Corporation shall maintain in effect for six (6)
years from the Effective Time directors' and officers' liability insurance
covering those Persons who are currently covered by the Company's directors' and
officers' liability insurance policy on terms comparable to such existing
insurance coverage; provided, however, that in no event shall the Surviving
Corporation be required to expend pursuant to this Section 7.6(b) more than an
amount per year equal to 150% of current annual premiums paid by the Company for
such insurance and; provided, further, that if the annual premiums exceed such
amount, Parent shall be obligated to obtain a policy with the greatest coverage
available for an annual cost not exceeding such amount. In lieu of the
foregoing, the Surviving Corporation shall pay at or prior to the Closing for
tail insurance coverage for said directors and officers for said six (6) year
period if such coverage is available and on the terms and at the costs specified
in Section 7.6(b) of the Company Disclosure Schedule.
(c) In addition to the other rights provided for in this Section 7.6
and not in limitation thereof (but without in any way limiting or modifying the
obligations of any insurance carrier contemplated by Section 7.6(b)), Parent
shall honor all indemnification obligations under the Company Certificate of
Incorporation, the Company By-laws and any indemnification agreements between
the Company and any Person (all copies of which have been previously provided to
Parent) as same exist, if at all, as of the date hereof.
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Section 7.7 Notification of Certain Matters. The Company shall give
prompt written notice to Parent, and Parent shall give prompt written notice to
the Company, of (i) the occurrence, or nonoccurrence, of any event the
occurrence, or nonoccurrence, of which would be likely to cause any
representation or warranty contained herein to be untrue or inaccurate in any
material respect at or prior to the Effective Date and (ii) any material failure
of the Company or Parent, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 7.7 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
Section 7.8 Tax Treatment. The Agreement is intended to constitute a
"plan of reorganization" within the meaning of Section 1.368-2(g) of the income
tax regulations promulgated under the Code. Neither the Company nor Parent nor
their Affiliates shall directly or indirectly (without the consent of the other)
knowingly take any action, that would be reasonably likely to jeopardize the
intended Tax treatment of the transactions contemplated hereby. Letters whereby
the Company and Parent have made certain representations concerning their
respective actions and future intentions are incorporated by reference and
attached hereto as Exhibit B and Exhibit C, respectively.
Section 7.9 Stock Exchange Listing. Parent shall as promptly as
reasonably practicable prepare and submit to the NYSE a listing application
covering the Parent Shares to be issued in the Merger and the Parent Shares
underlying Company Options and Company Warrants outstanding immediately prior to
the Effective Time and shall use its reasonable best efforts to cause such
shares to be approved for listing on the NYSE prior to the Effective Time.
Section 7.10 Public Announcements. Each of Parent and the Company
shall consult with the other before issuing any press release or otherwise
making any public statements with respect to this Agreement and shall not issue
any such press release or make any such public statement without the prior
consent of the other (which consent shall not be unreasonably withheld or
delayed), except as may be required by Law or any listing agreement with the
NYSE and the AMEX to which Parent or the Company is a party.
Section 7.11 Affiliates of the Company. The Company hereby agrees
that prior to the date of the Stockholders' Meeting, the Company will deliver to
Parent a letter identifying all Persons who may be deemed Affiliates of the
Company under Rule 145 of the Securities Act, including all directors and
executive officers of the Company, and the Company hereby agrees to advise the
Persons identified in such letter of the resale
58
restrictions imposed by applicable securities laws. The Company shall use its
reasonable efforts to obtain as soon as practicable after the Company's delivery
of such letter from each Person identified in such letter a written agreement,
substantially in the form of Exhibit D.
Section 7.12 Employee Matters.
(a) During the one-year period commencing on the Effective Date,
Parent shall, or shall cause the Surviving Corporation to, provide to employees
and former employees of the Company and any of its Subsidiaries ("Company
Employees") employee benefits that, in the aggregate, are substantially
comparable to the benefits being provided to Company Employees as of the date
hereof under the Company Benefit Plans.
(b) Parent and Acquisition Sub specifically agree to honor the
change of control, severance and bonus provisions for certain employees of the
Company, as further referenced in Section 7.12(b) of the Company Disclosure
Schedule.
(c) In addition, Parent agrees to cause the Surviving Corporation to
honor, following the Effective Time, the Company Benefit Plans as set forth in
Section 7.12(e).
(d) Except to the extent necessary to avoid duplication of benefits,
Parent will, or will cause the Surviving Corporation to, give Company Employees
full credit for purposes of eligibility and vesting (but not for purposes of
benefit accrual) under any employee benefit plans or arrangements maintained by
Parent, the Surviving Corporation or any Subsidiary of Parent in which such
employees are eligible to participate for such employees' service with the
Company to the same extent recognized by the Company immediately prior to the
Effective Time. Parent will, or will cause the Surviving Corporation to (i)
waive all limitations as to preexisting conditions exclusions and waiting
periods with respect to participation and coverage requirements applicable to
Company Employees under any welfare plan that such employees may be eligible to
participate in after the Effective Time, other than limitations or waiting
periods that are already in effect with respect to such employees and that have
not been satisfied as of the Effective Time under any welfare plan maintained
for the Company Employees immediately prior to the Effective Time, and (ii)
provide each Company Employee with credit for any co-payments and deductibles
paid prior to the Effective Time in satisfying any applicable deductible or
out-of-pocket requirements under any welfare plans that such employees are
eligible to participate in after the Effective Time.
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(e) Without limiting the generality of Section 7.12(a), the
Surviving Corporation shall, or shall cause its Subsidiaries to, honor, in
accordance with the terms of the Company Benefit Plans, and shall, or shall
cause its Subsidiaries to, make required payments when due under, all Company
Benefit Plans maintained or contributed to by the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries is a party
(including employment, incentive and severance agreements and arrangements),
that are applicable with respect to any Company Employee or any director of the
Company or any of its Subsidiaries (whether current, former or retired) or their
beneficiaries; provided, however, that the foregoing shall not preclude the
Surviving Corporation or any of its Subsidiaries from amending or terminating
any Company Benefit Plan in accordance with its terms.
Section 7.13 Further Assurances. At and after the Effective Time,
the officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of the Company or Acquisition
Sub, any deeds, bills of sale, assignments or assurances and to take and do, in
the name and on behalf of the Company or Acquisition Sub, any other actions and
things to vest, perfect or confirm of record or otherwise in the Surviving
Corporation any and all right, title and interest in, to and under any of the
rights, properties or assets of the Company acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with, the Merger.
Section 7.14 Letters of the Company's Accountants. The Company shall
use commercially reasonable efforts to cause to be delivered to Parent two
"comfort" letters in customary form from Xxxxxx Xxxxxxxx LLP, the Company's
independent public accountants, the first of which shall be dated a date within
two business days before the date on which the Form S-4 shall become effective
and the second of which letter shall be dated a date within two business days
before the Closing Date, each of which shall be addressed to Parent.
Section 7.15 Consulting Agreement. Parent and Xxxxxxxx will enter
into a consulting agreement, dated as of the Closing Date (the "Consulting
Agreement"), substantially in the form of Exhibit E hereto.
Section 7.16 Non-Competition Agreement. Xxxxxxxx will enter into a
non-competition agreement, dated as of the Closing Date (the "Non-Competition
Agreement"), in favor of Parent, the Surviving Corporation and their respective
successors, substantially in the form of Exhibit F hereto.
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ARTICLE VIII
CONDITIONS TO THE MERGER
Section 8.1 Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Acquisition Sub to consummate the
transactions contemplated hereby are subject to the satisfaction (or, if
permissible, waiver by the party for whose benefit such conditions exist) of the
following conditions:
(a) this Agreement shall have been adopted by the affirmative vote
of the holders of a majority of the outstanding stock of the Company entitled to
vote thereon at the Stockholders' Meeting, or at any adjournment or postponement
thereof, in accordance with the DGCL;
(b) any applicable waiting period under the HSR Act relating to the
Merger shall have expired or been terminated;
(c) no Governmental Entity or court of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any Law, rule,
regulation, executive order or Order which is then in effect and has the effect
of making the Merger illegal or otherwise prohibiting consummation of the
Merger;
(d) the Form S-4 shall have been declared effective, and no stop
order suspending the effectiveness of the Form S-4 shall be in effect and no
proceedings for such purpose shall be pending before or threatened by the SEC;
(e) all authorizations, consents, waivers, orders or approvals for
the Merger required to be obtained, and all other filings, notices or
declarations required to be made, by Parent and the Company prior to the
consummation of the Merger and the transactions contemplated hereunder, shall
have been obtained from, and made with, all required Governmental Entities,
except for such authorizations, consents, waivers, orders, approvals, filings,
notices or declarations the failure to obtain or make which would not have a
Company Material Adverse Effect or a Parent Material Adverse Effect, as
applicable, or after the Effective Time, a material adverse effect on the
Surviving Corporation; and
(f) the Parent Shares issuable to the Company's stockholders in the
Merger and to holders of Company Options and Company Warrants outstanding
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immediately prior to the Effective Time shall have been authorized for listing
on the NYSE, upon official notice of issuance.
Section 8.2 Conditions to the Obligations of Parent and Acquisition
Sub. The obligations of Parent and Acquisition Sub to consummate the
transactions contemplated hereby are subject to the satisfaction or waiver by
Parent of the following further conditions:
(a) each of the representations and warranties of the Company
contained herein shall be true and correct in all material respects, in each
case as of the Effective Time as though made on and as of the Effective Time
(except to the extent expressly made as of an earlier date, in which case, as of
such date); provided that the representations and warranties set forth in
Sections 4.3, 4.4 and 4.23 shall be true and correct in all respects;
(b) the Company shall have performed or complied in all material
respects with all agreements and covenants required hereby to be performed or
complied with by it on or prior to the Effective Time;
(c) Parent shall have received a written opinion of Skadden, Arps,
in form and substance reasonably satisfactory to Parent, dated as of the Closing
Date, to the effect that the Merger will qualify as a reorganization within the
meaning of Section 368(a) of the Code. The issuance of such opinion shall be
conditioned upon the receipt of customary representation letters from each of
Parent, Acquisition Sub and the Company, all of which are consistent with the
state of facts existing as of the Effective Time, and such facts,
representations and assumptions as are set forth in such opinion. Each of the
customary representation letters of the Company, Acquisition Sub and Parent
shall include the representations substantially identical to those agreed upon
concurrently herewith by the Company, Parent and Acquisition Sub, as set forth
in Exhibit B hereto, and shall be dated on or before the date of such opinion
and shall not have been withdrawn or modified in any material respect; and
(d) the Company shall have furnished Parent with a certificate dated
the Closing Date signed on behalf of the Company by its President or any Vice
President to the effect that the conditions set forth in Section 8.2(a) and (b)
have been satisfied.
Section 8.3 Conditions to the Obligations of the Company. The
obligations of the Company to consummate the transactions contemplated hereby
are subject to the satisfaction or waiver by the Company of the following
further conditions:
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(a) each of the representations and warranties of Parent and
Acquisition Sub contained herein shall be true and correct in all material
respects, in each case as of the Effective Time as though made on and as of the
Effective Time (except to the extent expressly made as of an earlier date, in
which case, as of such date); provided, that the representations and warranties
set forth in Sections 5.3 and 5.4 shall be true and correct in all respects;
(b) Parent and Acquisition Sub shall have performed or complied in
all material respects with all agreements and covenants required hereby to be
performed or complied with by it on or prior to the Effective Time; and
(c) the Company shall have received a written opinion of Xxxxx
Cummis, in form and substance reasonably satisfactory to the Company, dated as
of the Closing Date, to the effect that the Merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code. The issuance of
such opinion shall be conditioned upon the receipt of customary representation
letters from each of Parent, Acquisition Sub and the Company, all of which are
consistent with the state of facts existing as of the Effective Time, and such
facts, representations and assumptions as are set forth in such opinion. Each of
the customary representation letters of the Company, Acquisition Sub and Parent
shall include the representations substantially identical to those agreed upon
concurrently herewith by the Company, Parent and Acquisition Sub, as set forth
in Exhibit C hereto, and shall be dated on or before the date of such opinion
and shall not have been withdrawn or modified in any material respect; and
(d) Parent and Acquisition Sub shall have furnished the Company with
a certificate dated the Closing Date signed on behalf of Parent, or Acquisition
Sub as applicable, by its President or any Vice President to the effect that the
conditions set forth in Section 8.3(a) and (b) have been satisfied.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, notwithstanding
any requisite approval and adoption of this Agreement, as follows:
(a) by mutual written consent of Parent and the Company;
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(b) by Parent, if the Voting Agreement is not executed within one
business day following the execution of this Agreement;
(c) by either Parent or the Company, if the Merger shall not have
occurred on or before October 31, 2001 (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section 9.1(c)
shall not be available to any party whose willful and material breach of this
Agreement has been the cause of, or resulted in, the failure of the Merger to
occur on or prior to such date;
(d) by Parent, if there is a breach by the Company of any
representation, warranty, covenant or agreement contained in this Agreement that
if not cured, would cause a condition set forth in Section 8.2(a) or (b) not to
be satisfied as of the Termination Date; provided that such breach is (i)
incapable of being cured as of the Termination Date or (ii) capable of being
cured (so as to satisfy the conditions set forth in Section 8.2(a) and (b)) as
of the Termination Date, but the Company shall not have cured such breach within
twenty (20) business days after written notice thereof shall have been received
by the Company;
(e) by the Company, if there is a breach by Parent of any
representation, warranty, covenant or agreement contained in this Agreement that
if not cured, would cause a condition set forth in Section 8.3(a) or (b) not to
be satisfied as of the Termination Date; provided that such breach is (i)
incapable of being cured as of the Termination Date or (ii) capable of being
cured (so as to satisfy the conditions set forth in Section 8.3(a) and (b)) as
of the Termination Date, but Parent shall not have cured such breach within
twenty (20) business days after written notice thereof shall have been received
by Parent;
(f) by either Parent or the Company, if any Governmental Entity
shall have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated hereby, and such order, decree, ruling or other action shall have
become final and nonappealable;
(g) by Parent, if (i) the Board of Directors of the Company shall
have failed to recommend or shall have withdrawn or modified in a manner adverse
to Parent its approval or recommendation of this Agreement or the transactions
contemplated hereby, whether or not permitted by the terms hereof, or shall have
failed to call the Stockholders' Meeting in accordance with Section 7.3; (ii)
the Board of Directors of the Company or the Special Committee shall have
recommended to the stockholders of the Company a Superior Proposal; (iii) an
Acquisition Proposal other than the Merger shall have been announced or
otherwise become publicly known and the Board of Directors of the Company shall
have failed to recommend against acceptance of such Acquisition Proposal
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by the Company's stockholders within ten (10) business days of its receipt; (iv)
the Board of Directors of the Company shall have resolved to do any of the
foregoing; (v) the Voting Agreement shall have been terminated pursuant to
Section 6(ii) thereof or (vi) the Company shall have entered into any letter of
intent, agreement in principle, acquisition agreement or other similar agreement
related to any Acquisition Proposal;
(h) by the Company, if (i) the Board of Directors of the Company
authorizes the Company, subject to complying with the terms of this Agreement,
to enter into a binding written agreement concerning a transaction that
constitutes a Superior Proposal and the Company notifies Parent in writing that
it intends to enter into such an agreement, attaching the most current version
of such agreement (or a description of all material terms and conditions
thereof) to such notice and (ii) Parent does not make, within five (5) business
days of receipt of the Company's written notification of its intention to enter
into a binding agreement for a Superior Proposal, an offer that the Board of
Directors of the Company determines, in good faith after consultation with its
financial advisors, is at least as favorable to the shareholders of the Company
as the Superior Proposal, it being understood that the Company shall not enter
into any such binding agreement during such five business day period; or
(i) by either Parent or the Company, if the approval of the
transactions contemplated hereby by the stockholders of the Company required for
the consummation of the Merger as set forth in Section 8.1(a) shall not have
been obtained by reason of the failure to obtain such required vote at a duly
held Stockholders' Meeting or at any adjournment or postponement thereof.
Section 9.2 Effect of Termination. Subject to Section 9.5, in the
event of termination of this Agreement pursuant to Section 9.1, this Agreement
shall forthwith become void, there shall be no liability under this Agreement on
the part of Parent, Acquisition Sub or the Company or any of their respective
officers or directors and all rights and obligations of each party hereto shall
cease; provided, however, that nothing herein shall relieve any party from
liability for fraud or a willful and material breach of any of its
representations, warranties, covenants or agreements set forth herein.
Section 9.3 Amendment. This Agreement may be amended by mutual
agreement of the parties hereto by action taken at any time prior to the
Effective Time; provided, however, that, after the approval and adoption of this
Agreement by the stockholders of the Company, there shall not be any amendment
that by Law requires further approval by the stockholders of the Company without
the further approval of such
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stockholders. This Agreement may not be amended except by an instrument in
writing signed by each of the parties hereto.
Section 9.4 Waiver. At any time prior to the Effective Time, any
party (to the extent the party has authority under Law to do so) hereto may (i)
extend the time for the performance of any obligation or other act of any other
party hereto, (ii) waive any inaccuracy in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) subject
to the proviso of Section 9.3, waive compliance with any agreement or condition
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
Section 9.5 Expenses.
(a) Except as set forth in this Section 9.5, all expenses incurred
in connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expenses, whether or not the Merger or any
other transaction is consummated; it being expressly understood and agreed that
if the transactions contemplated hereby take place and the Merger takes effect,
the expenses incurred by the Company will be borne by the Company and shall not
be deducted from the Merger Consideration or otherwise imposed directly upon the
Company's stockholders. While bearing their own legal, accountant, investment
banker, consultant and expert fees, the Company and Parent each shall pay
one-half of all expenses relating to (i) printing, filing and mailing the Form
S-4 and the Proxy Statement/Prospectus and all SEC and other regulatory filing
fees incurred in connection with the Form S-4, the Proxy Statement/Prospectus
and (ii) any filing with antitrust authorities; provided, however, that Parent
shall pay all Expenses relating to the Exchange Agent.
(b) The Company shall pay to Parent an amount equal to two million
dollars ($2,000,000) in any case as described in clause (i), (ii) or (iii) below
(each such case of termination being referred to as a "Trigger Event") (by wire
transfer of immediately available funds five (5) days after termination of this
Agreement pursuant to Section 9.1(g) by Parent, or concurrently with termination
of this Agreement if terminated by the Company under the provisions of Section
9.1(h), or concurrently with the execution of the definitive agreement under the
circumstances set forth in Section 9.5(b)(iii) below), if:
(i) the Company shall terminate this Agreement pursuant to
Section 9.1(h);
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(ii) Parent shall terminate this Agreement pursuant to Section
9.1(g); or
(iii) either the Company or Parent shall terminate this
Agreement pursuant to Section 9.1(i) in circumstances where the Company
Stockholder Approval has not been obtained and prior to the Stockholders'
Meeting an Acquisition Proposal is made by any Person and the Company enters
into a definitive agreement for or with respect to an Acquisition Proposal
within twelve (12) months after termination of this Agreement.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Non-Survival of Representations and Warranties. The
representations, warranties, covenants and agreements contained herein and in
any certificate delivered pursuant hereto by any Person shall terminate at the
Effective Time or upon the termination of this Agreement pursuant to Section
9.1, as the case may be, except that this Section 10.1 shall not limit any
covenant or agreement of the parties which by its terms contemplates performance
after the Effective Time or after termination of this Agreement, including those
contained in Sections 2.7(a), 2.7(b), 2.8(a), 7.5(b), 7.6, 7.8, 7.9, 7.12 and
7.13.
Section 10.2 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by facsimile (with a confirmatory copy sent by overnight courier), by
overnight courier service or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section 10.2):
if to Parent or Acquisition Sub:
Deere & Company
Xxx Xxxx Xxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel
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with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
if to the Company:
Richton International Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
with a copy to:
Xxxxx Cummis Radin Tischman Xxxxxxx & Xxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
Section 10.3 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Merger is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
Merger be consummated as originally contemplated to the fullest extent possible.
Section 10.4 Entire Agreement. This Agreement (including the
Exhibits, the Company Disclosure Schedule and the Parent Disclosure Schedule
which are hereby incorporated herein and made a part hereof for all purposes as
if fully set forth herein), the Voting Agreement, the Consulting Agreement and
the Confidentiality Agreement constitute the entire agreement among the parties
with respect to the subject matter hereof and
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supersede all prior agreements and undertakings, both written and oral, among
the parties, or any of them, with respect to the subject matter hereof.
Section 10.5 Assignment. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, provided that, except as provided herein, no party may
assign, delegate or otherwise transfer any of its rights or obligations
hereunder, in whole or in part, by operation of law or otherwise by any of the
parties, without the consent of the other parties hereto.
Section 10.6 Parties in Interest. Except as otherwise provided in
this Section 10.6, this Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing herein, express or implied, is
intended to or shall confer upon any other Person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement, other than
Sections 2.7(a), 2.7(b), 2.8(a), 7.6 and 7.12(b) (which are intended to be for
the benefit of the Persons covered thereby and may be enforced by such Persons).
Section 10.7 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
Section 10.8 Governing Law. This Agreement shall be governed by, and
construed in accordance with the laws of the State of Delaware (regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law) as to all matters, including but not limited to matters of validity,
construction, effect, performance and remedies.
Section 10.9 Consent to Jurisdiction.
(a) Each of the parties hereto hereby irrevocably submits to the
exclusive jurisdiction of the courts of the State of Delaware and the United
States District Court for the State of Delaware, for the purpose of any action
or proceeding arising out of or relating to this Agreement and each of the
parties hereto hereby irrevocably agrees that all claims in respect to such
action or proceeding may be heard and determined exclusively in any Delaware
state or federal court. Each of the parties hereto hereby agrees that a final
judgment in any action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.
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(b) Each of the parties hereto hereby irrevocably consents to the
service of the summons and complaint and any other process in any other action
or proceeding relating to the transactions contemplated hereby, on behalf of
itself or its property, by personal delivery of copies of such process to such
party. Nothing in this Section 10.9 shall affect the right of any party to serve
legal process in any other manner permitted by law.
Section 10.10 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT OR THE COMPANY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
Section 10.11 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, each of the Company, Parent and Acquisition Sub
has caused this Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
RICHTON INTERNATIONAL CORPORATION
By: _______________________________________
Name:
Title:
DEERE & COMPANY
By: _______________________________________
Name:
Title:
GREEN MERGERSUB, INC.
By: _______________________________________
Name:
Title:
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