__________________________________________________
AGREEMENT AND PLAN OF MERGER
by and among
XXXXXXX GROUP INCORPORATED,
XXXXXXX ACQUISITION CORP.
and
TOY BIZ, INC.
dated as of
December 27, 1996
__________________________________________________
Index of Defined Terms
Defined Term Section No.
Acquisition Proposal . . . . . . . . . . . 5.3
affiliate . . . . . . . . . . . . . . . . . 8.5
Agreement . . . . . . . . . . . . . . . . . Recitals
Arad . . . . . . . . . . . . . . . . . . . 1.6
Certificates . . . . . . . . . . . . . . . 2.2(b)
Class A Shares . . . . . . . . . . . . . . 2.1
Class B Shares . . . . . . . . . . . . . . 2.1
Closing . . . . . . . . . . . . . . . . . . 1.2
Closing Date . . . . . . . . . . . . . . . 1.2
Common Certificates . . . . . . . . . . . . 2.2(b)
Company . . . . . . . . . . . . . . . . . . Recitals
Company SEC Documents . . . . . . . . . . . 3.5
DGCL . . . . . . . . . . . . . . . . . . . 1.1
Dissenting Stockholders . . . . . . . . . . 2.1(c)
D&O Insurance . . . . . . . . . . . . . . . 5.8(b)
Effective Time . . . . . . . . . . . . . . 1.3
Employee Option . . . . . . . . . . . . . . 2.4(a)
Exchange Act . . . . . . . . . . . . . . . 1.7(a)
Governmental Entity . . . . . . . . . . . . 3.4
Indemnified Party . . . . . . . . . . . . . 5.8(a)
Marvel . . . . . . . . . . . . . . . . . . 3.2(c)
Merger . . . . . . . . . . . . . . . . . . 1.1
Merger Consideration . . . . . . . . . . . 2.1(c)
Parent . . . . . . . . . . . . . . . . . . Recitals
Paying Agent . . . . . . . . . . . . . . . 2.2(a)
Xxxxxxxxxx Group . . . . . . . . . . . . . 1.6
Preferred Certificates . . . . . . . . . . 2.2(b)
Preferred Merger Consideration . . . . . . 2.1(d)
Preferred Shares . . . . . . . . . . . . . 2.1
Preferred Stock . . . . . . . . . . . . . . 3.2(a)
Proxy Statement . . . . . . . . . . . . . . 1.7(a)
Purchaser . . . . . . . . . . . . . . . . . Recitals
Purchaser Common Stock . . . . . . . . . . 2.1
Qualifying Offer . . . . . . . . . . . . . 5.9(b)
SEC . . . . . . . . . . . . . . . . . . . . 1.7(a)
Secretary of State . . . . . . . . . . . . 1.3
Securities Act . . . . . . . . . . . . . . 3.5
Shares . . . . . . . . . . . . . . . . . . 2.1
Special Committee . . . . . . . . . . . . . 1.6
Special Meeting . . . . . . . . . . . . . . 1.7(a)
Stock Option Plan . . . . . . . . . . . . . 2.4(a)
Stock Purchase Agreements . . . . . . . . . 1.6
Subsidiary . . . . . . . . . . . . . . . . 3.1
Surviving Corporation . . . . . . . . . . . 1.1
Voting Debt . . . . . . . . . . . . . . . . 3.2(a)
TABLE OF CONTENTS
ARTICLE I THE MERGER . . . . . . . . . . . . . . . 1
Section 1.1 The Merger . . . . . . . . . . . . . 1
Section 1.2 Closing . . . . . . . . . . . . . . . 2
Section 1.3 Effective Time . . . . . . . . . . . 2
Section 1.4 Certificate of Incorporation and By-
Laws . . . . . . . . . . . . . . . 2
Section 1.5 Directors and Officers of the Surviv
ing Corporation . . . . . . . . . . . . 2
Section 1.6 Company Actions . . . . . . . . . . . 3
Section 1.7 Stockholders' Meeting and Proxy
Statement . . . . . . . . . . . . . 3
ARTICLE II CONVERSION OF SECURITIES . . . . . . . . 5
Section 2.1 Conversion of Capital Stock . . . . . 5
Section 2.2 Exchange of Certificates . . . . . . 6
Section 2.3 Dissenters' Rights . . . . . . . . . 8
Section 2.4 Company Plans . . . . . . . . . . . . 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE
COMPANY . . . . . . . . . . . . . . . . 9
Section 3.1 Organization . . . . . . . . . . . . 9
Section 3.2 Capitalization . . . . . . . . . . . 10
Section 3.3 Authorization; Validity of Agreement;
Company Action . . . . . . . . . . 12
Section 3.4 Consents and Approvals; No
Violations . . . . . . . . . . . . 12
Section 3.5 SEC Reports and Financial Statements 13
Section 3.6 Information in Proxy Statement . . . 13
Section 3.7 Vote Required . . . . . . . . . . . . 14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT
AND THE PURCHASER . . . . . . . . . . . 14
Section 4.1 Organization . . . . . . . . . . . . 14
Section 4.2 Authorization; Validity of Agreement;
Necessary Action . . . . . . . . . 14
Section 4.3 Consents and Approvals; No Xxxxx
tions . . . . . . . . . . . . . . . . . 15
Section 4.4 Information in Proxy Statement . . . 16
ARTICLE V COVENANTS . . . . . . . . . . . . . . . 16
Section 5.1 Interim Operations of the Company . . 16
Section 5.2 Consents and Approvals . . . . . . . 16
Section 5.3 No Solicitation . . . . . . . . . . . 17
Section 5.4 Brokers or Finders . . . . . . . . . 18
Section 5.5 Additional Agreements . . . . . . . . 19
Section 5.6 Publicity . . . . . . . . . . . . . . 19
Section 5.7 Notification of Certain Matters . . . 19
Section 5.8 Directors' and Officers' Insurance
and Indemnification . . . . . . . . 19
Section 5.9 Assignment; Purchase of Shares. . . . 20
Section 5.10 Stock Purchase Agreements . . . . . . 21
ARTICLE VI CONDITIONS . . . . . . . . . . . . . . . 22
Section 6.1 Conditions to Each Party's Obligation
to Effect the Merger . . . . . . . 22
Section 6.2 Conditions to Parent's and the
Purchaser's Obligations to Effect the
Merger . . . . . . . . . . . . . . 22
Section 6.3 Conditions to Company's Obligations
to Effect the Merger . . . . . . . 23
ARTICLE VII TERMINATION . . . . . . . . . . . . . . 23
Section 7.1 Termination . . . . . . . . . . . . . 23
Section 7.2 Effect of Termination . . . . . . . . 25
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . 25
Section 8.1 Fees and Expenses . . . . . . . . . . 25
Section 8.2 Amendment, Modification and Other
Action. . . . . . . . . . . . . . . 25
Section 8.3 Nonsurvival of Representations and
Warranties . . . . . . . . . . . . 25
Section 8.4 Notices . . . . . . . . . . . . . . . 26
Section 8.5 Interpretation . . . . . . . . . . . 27
Section 8.6 Counterparts . . . . . . . . . . . . 27
Section 8.7 Entire Agreement; No Third Party
Beneficiaries; Rights of Ownership 27
Section 8.8 Severability . . . . . . . . . . . . 28
Section 8.9 Governing Law . . . . . . . . . . . . 28
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agree-
ment"), dated as of December 27, 1996, by and among
Xxxxxxx Group Incorporated, a Delaware corporation ("Par-
ent"), Xxxxxxx Acquisition Corp., a Delaware corporation
and a wholly owned subsidiary of Parent (the "Purchas-
er"), and Toy Biz, Inc., a Delaware corporation (the
"Company").
WHEREAS, the Board of Directors of the Company
and the Board of Directors of each of Parent and Purchas-
er have approved, and deem it advisable and in the best
interests of their respective stockholders to consummate,
the acquisition of the Company by Parent and the merger
of Purchaser with and into the Company upon the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the forego-
ing and the respective representations, warranties,
covenants and agreements set forth herein, the parties
hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and
subject to the conditions of this Agreement and in accor-
dance with the General Corporation Law of the State of
Delaware (the "DGCL"), at the Effective Time (as defined
in Section 1.3), the Company and the Purchaser shall
consummate a merger (the "Merger") pursuant to which (a)
the Purchaser shall be merged with and into the Company
and the separate corporate existence of the Purchaser
shall thereupon cease, (b) the Company shall be the
successor or surviving corporation in the Merger (some-
times hereinafter referred to as the "Surviving Corpora-
tion") and shall continue to be governed by the laws of
the State of Delaware, and (c) all of the rights, privi-
leges, immunities, powers and franchises of the Company
and the Purchaser shall vest in the Surviving Corporation
and all obligations, duties, debts and liabilities of the
Company and the Purchaser shall become the obligations,
duties, debts and liabilities of the Surviving Corpora-
tion.
Section 1.2 Closing. The closing of the
Merger (the "Closing") shall take place at 10:00 a.m. on
a date to be specified by the parties, which shall be no
later than the second business day after satisfaction or
waiver of all of the conditions set forth in Article VI
hereof (the "Closing Date"), at the offices of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, unless another date or place is
agreed to in writing by the parties hereto.
Section 1.3 Effective Time. As soon as prac-
ticable following the satisfaction or waiver of the
conditions set forth in Article VI hereof, Parent, the
Purchaser and the Company will cause a Certificate of
Merger to be executed and filed on the date of the Clos-
ing (or on such other date as Parent and the Company may
agree) with the Secretary of State of Delaware (the
"Secretary of State") as provided in the DGCL. The
Merger shall become effective on the date on which the
Certificate of Merger has been duly filed with the Secre-
tary of State or such time as is agreed upon by the
parties and specified in the Certificate of Merger, and
such time is hereinafter referred to as the "Effective
Time."
Section 1.4 Certificate of Incorporation and
By-Laws. At the Effective Time, the Amended and Restat-
ed Certificate of Incorporation of the Company, as amend-
ed, as in effect immediately prior to the Effective Time,
shall be amended as set forth in Exhibit A hereto. The
Amended and Restated Certificate of Incorporation, as so
amended at the Effective Time, shall be the certificate
of incorporation of the Surviving Corporation until
thereafter amended in accordance with applicable law.
The By-Laws of the Company, as in effect immediately
prior to the Effective Time, shall be amended as set
forth in Exhibit B hereto. The by-laws of the Company,
as so amended at the Effective Time, shall be the by-laws
of the Surviving Corporation until thereafter amended in
accordance with applicable law. The Merger shall have
the effects specified in the DGCL.
Section 1.5 Directors and Officers of the
Surviving Corporation. The directors of the Purchaser
and the officers of the Company at the Effective Time
shall, from and after the Effective Time, be the direc-
tors and officers, respectively, of the Surviving Corpo-
ration until their successors shall have been duly elect-
ed or appointed or qualified or until their earlier
death, resignation or removal in accordance with the
Surviving Corporation's certificate of incorporation and
by-laws.
Section 1.6 Company Actions. The Company
hereby approves of and consents to the Merger and repre-
sents that its Board of Directors, at a meeting duly
called and held, has (i) upon the recommendation of its
Special Committee (the "Special Committee"), unanimously
determined that each of the Agreement and the Merger are
fair and in the best interests of the holders of the
Class A Shares (as defined in Section 2.1), other than
Xxx Xxxx ("Arad"), Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxxxx
T.A., a Florida trust, and ZIB Inc., a Delaware corpora-
tion (collectively, the "Xxxxxxxxxx Group"), whose shares
are to be purchased pursuant to the Stock Purchase Agree-
ment, dated as of November 20, 1996, between Parent and
Arad and the Stock Purchase Agreement, dated as of Novem-
ber 20, 1996, between Parent and the Xxxxxxxxxx Group
(together, the "Stock Purchase Agreements"), (ii) ap-
proved this Agreement and the transactions contemplated
hereby, including the Merger, and such approval consti-
tutes approval of this Agreement and the transactions
contemplated hereby, including the Merger, and (iii)
resolved to recommend that the stockholders of the Compa-
ny approve and adopt this Agreement and the Merger.
Section 1.7 Stockholders' Meeting and Proxy
Statement.
(a) If required by applicable law in order to
consummate the Merger, the Company shall, in accordance
with applicable law:
(i) duly call, give notice of, convene
and hold a special meeting of its stockholders (the
"Special Meeting") and submit this Agreement and the
Merger to a vote of the Company's stockholders for
their adoption and approval as promptly as possible
following the execution and delivery of this Agree-
ment;
(ii) prepare and file with the Securities
and Exchange Commission (the "SEC"), in accordance
with Regulation 14A and Rule 13e-3 under the Securi-
ties Exchange Act of 1934 (the "Exchange Act"), a
preliminary Proxy Statement (as hereinafter defined)
relating to the Merger and this Agreement and use
its best efforts (x) to obtain and furnish the
information required to be included by the SEC in
the Proxy Statement and, after consultation with
Parent, to respond promptly to any comments made by
the SEC with respect to the preliminary Proxy State-
ment, provided that no amendment or supplement
thereto will be made by the Company without consul-
tation with Parent and its counsel, (y) cause a
letter to stockholders, notice of meeting, defini-
tive Proxy Statement, including any amendment or
supplement thereto, and form of proxy (collectively,
the "Proxy Statement") to be mailed to its stock-
holders in connection with the Merger and (z) to
obtain the necessary approvals of the Merger and
this Agreement by its stockholders;
(iii) subject to the fiduciary obliga-
tions of the Board of Directors under applicable law
as advised by independent counsel, include in the
Proxy Statement its recommendation that the stock-
holders of the Company vote in favor of the approval
of the Merger and the adoption of this Agreement;
and
(iv) include in the Proxy Statement the
written opinion of Xxxxxxxxxxx Xxxxxxx & Co. that
the Merger Consideration (as defined in Section
2.1(c)) is fair to the holders of the Class A Shares
(other than Arad and the Xxxxxxxxxx Group) from a
financial point of view.
(b) Parent shall furnish to the Company written
information concerning itself and Purchaser expressly for
inclusion in the Proxy Statement.
(c) Parent shall vote, or cause to be voted,
all of the capital stock of the Company then owned by it,
the Purchaser or any of its other affiliates in favor of
the approval of the Merger and the adoption of this
Agreement.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As
of the Effective Time, by virtue of the Merger and with-
out any action on the part of Parent, Purchaser, the
Company or the holders of any shares of Class A common
stock, par value $.01 per share (the "Class A Shares"),
or Class B common stock, par value $.01 per share, of the
Company (the "Class B Shares" and, collectively with the
Class A Shares, the "Shares"), or the holders of any
shares of Series A Preferred Stock (the "Preferred
Shares") of the Company, or holders of common stock, par
value $1.00 per share, of the Purchaser (the "Purchaser
Common Stock")
(a) Purchaser Common Stock. Each issued and
outstanding share of the Purchaser Common Stock shall be
converted into and become one fully paid and nonassess-
able share of common stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and
Parent-Owned Stock. All Shares that are owned by the
Company as treasury stock and any Shares or other capital
stock owned by Parent, the Purchaser or any other wholly
owned Subsidiary (as defined in Section 3.1) of Parent
shall be cancelled and retired and shall cease to exist
and no consideration shall be delivered in exchange
therefor.
(c) Exchange of Shares. Each issued and
outstanding Share (other than Shares to be cancelled in
accordance with Section 2.1(b) and any Shares which are
held by stockholders ("Dissenting Stockholders") exercis-
ing appraisal rights pursuant to Section 262 of the DGCL,
which Shares shall be converted into the right, if any,
to receive payment from the Surviving Corporation of the
"fair value" of such Shares as determined in accordance
with Section 262 of the DGCL) shall be converted into the
right to receive $22.50 per Share in cash, payable to the
holder thereof, without interest (the "Merger Consider-
ation"), upon surrender of the certificate formerly
representing such Share in the manner provided in Section
2.2. All such Shares, when so converted, shall no longer
be outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of a
certificate representing any such Shares shall cease to
have any rights with respect thereto, except the right to
receive the Merger Consideration therefor upon the sur-
render of such certificate in accordance with Section
2.2.
(d) Exchange of Preferred Shares. Each issued
and outstanding Preferred Share (other than any Preferred
Shares which are held by stockholders who are Dissenting
Stockholders, which Shares shall be converted into the
right, if any, to receive payment from the Surviving
Corporation of the "fair value" of such Preferred Shares
as determined in accordance with Section 262 of the DGCL)
shall be converted into the right to receive an amount
per Preferred Share equal to the then applicable Redemp-
tion Price (as defined and as set forth in the Certifi-
cate of Designation for the Preferred Shares), payable to
the holder thereof, without interest (the "Preferred
Merger Consideration"), upon surrender of the certificate
formerly representing such Preferred Share in the manner
provided in Section 2.2. All such Preferred Shares, when
so converted, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any
such Preferred Shares shall cease to have any rights with
respect thereto, except the right to receive the Pre-
ferred Merger Consideration therefor upon the surrender
of such certificate in accordance with Section 2.2.
Section 2.2 Exchange of Certificates. (a)
Paying Agent. Prior to the Effective Time, Parent shall
designate a bank or trust company to act as agent for the
holders of the Shares and the Preferred Shares in connec-
tion with the Merger (the "Paying Agent") to receive the
funds, as needed, to which holders of the Shares and the
Preferred Shares shall become entitled pursuant to Sec-
tion 2.1(c) and 2.1(d). Such funds shall be invested by
the Paying Agent as directed by Parent or the Surviving
Corporation. All interest earned on such funds shall be
paid to Parent.
(b) Exchange Procedures. As soon as reason-
ably practicable after the Effective Time, the Paying
Agent shall mail to each holder of record of a certifi-
cate or certificates, which immediately prior to the
Effective Time represented outstanding Shares (the "Com-
mon Certificates") or Preferred Shares (the "Preferred
Certificates," and together with the Common Certificates,
the "Certificates"), whose Shares or Preferred Shares
were converted pursuant to Section 2.1 into the right to
receive the Merger Consideration and the Preferred Merger
Consideration, respectively, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Paying
Agent and shall be in such form and have such other
provisions as Parent and the Company may reasonably
specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for payment of
the Merger Consideration or the Preferred Merger Consid-
eration, as the case may be. Upon surrender of a Certif-
icate for cancellation to the Paying Agent or to such
other agent or agents as may be appointed by Parent,
together with such letter of transmittal, duly executed,
the holder of such Certificate shall be entitled to
receive in exchange therefor the Merger Consideration or
the Preferred Merger Consideration for each Share or
Preferred Share formerly represented by such Certificate
and the Certificate so surrendered shall forthwith be
cancelled. If payment of the Merger Consideration or
Preferred Merger Consideration is to be made to a person
other than the person in whose name the surrendered
Certificate is registered, it shall be a condition of
payment that the Certificate so surrendered shall be
properly endorsed or shall be otherwise in proper form
for transfer and that the person requesting such payment
shall have paid any transfer and other non-income taxes
required by reason of the payment of the Merger Consider-
ation or Preferred Merger Consideration to a person other
than the registered holder of the Certificate surrendered
or shall have established to the satisfaction of the
Surviving Corporation that such tax either has been paid
or is not applicable. Until surrendered as contemplated
by this Section 2.2, each Certificate shall be deemed at
any time after the Effective Time to represent only the
right to receive the Merger Consideration or Preferred
Merger Consideration in cash as contemplated by this
Section 2.2.
(c) Transfer Books; No Further Ownership
Rights in the Shares. At the Effective Time, the stock
transfer books of the Company shall be closed and there-
after there shall be no further registration of transfers
of the Shares or the Preferred Shares on the records of
the Company. From and after the Effective Time, the
holders of Certificates evidencing ownership of the
Shares or the Preferred Shares outstanding immediately
prior to the Effective Time shall cease to have any
rights with respect to such Shares or Preferred Shares,
except as otherwise provided for herein or by applicable
law. If, after the Effective Time, Certificates are
presented to the Surviving Corporation for any reason,
they shall be cancelled and exchanged as provided in this
Article II.
(d) Termination of Fund; No Liability. At any
time following six months after the Effective Time, the
Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it any funds (including any
interest received with respect thereto) which had been
made available to the Paying Agent and which have not
been disbursed to holders of Certificates, and thereafter
such holders shall be entitled to look to the Surviving
Corporation (subject to abandoned property, escheat or
other similar laws) only as general creditors thereof
with respect to the Merger Consideration or Preferred
Merger Consideration payable upon due surrender of their
Certificates, without any interest thereon. Notwith-
standing the foregoing, neither the Surviving Corporation
nor the Paying Agent shall be liable to any holder of a
Certificate for Merger Consideration or Preferred Merger
Consideration delivered to a public official pursuant to
any applicable abandoned property, escheat or similar
law.
Section 2.3 Dissenters' Rights. If any Dis-
senting Stockholder shall be entitled to be paid the
"fair value" of such holder's Shares or Preferred Shares,
as provided in Section 262 of the DGCL, the Company shall
give the Parent notice thereof and the Parent shall have
the right to participate in all negotiations and proceed-
ings with respect to any such demands. Neither the
Company nor the Surviving Corporation shall, except with
the prior written consent of the Parent, voluntarily make
any payment with respect to, or settle or offer to set-
tle, any such demand for payment. If any Dissenting
Stockholder shall fail to perfect or shall have effec-
tively withdrawn or lost the right to dissent, the Shares
held by such Dissenting Stockholder shall thereupon be
treated as though such Shares or Preferred Shares had
been converted into the Merger Consideration or Preferred
Merger Consideration pursuant to Section 2.1.
Section 2.4 Company Plans. (a) With respect to
each outstanding employee stock option to purchase Shares
(an "Employee Option") granted under the Company's 1995
Stock Option Plan (the "Stock Option Plan"), the Company
shall, effective as of immediately prior to the Effective
Time, and subject to the consent, if required, of the
holder of such Employee Option, (i) cause each Employee
Option, whether or not then exercisable or vested, to
become fully exercisable and vested, (ii) cause each
Employee Option that is then outstanding to be cancelled
and (iii) in consideration of such cancellation, pay to
such holder of an Employee Option an amount in respect
thereof equal to the product of (A) the excess, if any,
of the Merger Consideration over the exercise price of
each such Employee Option and (B) the number of Shares
previously subject to the Employee Option immediately
prior to its cancellation (such payment to be net of
withholding taxes).
(b) Except as may be otherwise agreed to by
the Parent or the Purchaser and the Company, the Stock
Option Plan shall terminate as of the Effective Time and
the provisions in any other plan, program or arrangement
providing for the issuance or grant of any other interest
in respect of the capital stock of the Company or any of
its subsidiaries shall be deleted as of the Effective
Time and no holder of Employee Options or any participant
in the Stock Option Plan or any other plans, programs or
arrangements shall have any right thereunder to acquire
any equity securities of the Company, the Surviving
Corporation or any subsidiary thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent
and the Purchaser as follows:
Section 3.1 Organization. Each of the Company
and its Subsidiary (as defined below) is a corporation
duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation
and has all requisite corporate power and authority and
all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as
now being conducted, except where the failure to be so
organized, existing and in good standing or to have such
power, authority and governmental approvals would not,
individually or in the aggregate, have a material adverse
effect on the Company and its Subsidiary, taken as a
whole. As used in this Agreement, the term "Subsidiary"
shall mean all corporations or other entities in which
the Company or the Parent, as the case may be, owns a
majority of the issued and outstanding capital stock or
similar interests. As used in this Agreement, any refer-
ence to any state of facts, event or effect being materi-
al or having a material adverse effect on or with respect
to any entity (or group of entities taken as a whole)
means such state of facts, event or effect is materially
adverse to the consolidated financial condition, busi-
nesses or results of operations of such entity (or, if
used with respect thereto, of such group of entities
taken as a whole). Each of the Company and its Subsid-
iary is duly qualified or licensed to do business and in
good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or
licensing necessary, except where the failure to be so
duly qualified or licensed and in good standing would
not, individually or in the aggregate, have a material
adverse effect on the Company and its Subsidiary, taken
as a whole.
Section 3.2 Capitalization. (a) The autho-
rized capital stock of the Company consists of
100,000,000 Class A Shares, 20,000,000 Class B Shares and
25,000,000 shares of preferred stock, par value $.01 per
share (the "Preferred Stock"). As of the date hereof,
(i) 20,348,794 Class A Shares are issued and outstanding
and no Class A Shares are held in the treasury of the
Company, (ii) 7,394,000 Class B Shares are issued and
outstanding and no Class B Shares are held in the trea-
sury of the Company, (iii) 59,091 Preferred Shares are
issued and outstanding, and (iv) 1,321,471 Class A Shares
are reserved for issuance upon exercise of then outstand-
ing Employee Options granted under the Stock Option Plan.
All the outstanding shares of the Company's capital stock
are, and all Class A Shares which may be issued pursuant
to the exercise of outstanding Employee Options will be,
when issued in accordance with the respective terms
thereof, duly authorized, validly issued, fully paid and
non-assessable. There are no bonds, debentures, notes or
other indebtedness having general voting rights (or
convertible into securities having such rights) ("Voting
Debt") of the Company or its Subsidiary issued and out-
standing. Except as set forth above, as of the date
hereof, (i) there are no shares of capital stock of the
Company authorized, issued or outstanding and (ii) there
are no existing options, warrants, calls, pre-emptive
rights, subscriptions or other rights, agreements, ar-
rangements or commitments of any character, relating to
the issued or unissued capital stock of the Company or
its Subsidiary, obligating the Company or its Subsidiary
to issue, transfer or sell or cause to be issued, trans-
ferred or sold any shares of capital stock or Voting Debt
of the Company or its Subsidiary or securities convert-
ible into or exchangeable for such shares or equity
interests, or obligating the Company or its Subsidiary to
grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement
or commitment.
(b) All of the outstanding shares of capital
stock of its Subsidiary are beneficially owned by the
Company, directly or indirectly, and all such shares have
been validly issued and are fully paid and nonassessable
and are owned by either the Company free and clear of all
liens, charges, claims or encumbrances.
(c) Except for the Stockholders Agreement,
dated as of March 2, 1995, by and among Arad, the
Xxxxxxxxxx Group, Marvel Entertainment Group, Inc. ("Mar-
vel") and the Company, the Voting Trust Agreement, dated
as of March 2, 1995, among Marvel, Xxxxx Xxxxxxxxxx and
the Company and the Voting Trust Agreement, dated as of
March 2, 1995, among Marvel, Arad and the Company, there
are no voting trusts or other agreements or understand-
ings to which the Company or its Subsidiary is a party
with respect to the voting of the capital stock of the
Company or its Subsidiary.
(d) Neither the Company nor its Subsidiary is
required to redeem, repurchase or otherwise acquire
shares of capital stock of the Company, or its Subsid-
iary, respectively, as a result of the transactions
contemplated by this Agreement.
Section 3.3 Authorization; Validity of
Agreement; Company Action. The Company has full corpo-
rate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance by the
Company of this Agreement, and the consummation by it of
the transactions contemplated hereby, have been duly
authorized by the Board of Directors of the Company and,
except for obtaining the approval of its stockholders as
contemplated by Section 3.7 or as otherwise required by
Delaware law, no other corporate action on the part of
the Company is necessary to authorize the execution and
delivery by the Company of this Agreement and the consum-
mation by it of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by
the Company and, assuming due and valid authorization,
execution and delivery hereof by Parent and the Purchas-
er, is a valid and binding obligation of the Company
enforceable against the Company in accordance with its
terms.
Section 3.4 Consents and Approvals; No
Violations. Except for the filings, permits, authoriza-
tions, consents and approvals as may be required under,
and other applicable requirements of, the Exchange Act
and the DGCL, neither the execution, delivery or perfor-
xxxxx of this Agreement by the Company nor the consumma-
tion by the Company of the transactions contemplated
hereby nor compliance by the Company with any of the
provisions hereof will (i) conflict with or result in any
breach of any provision of the certificate of incorpora-
tion or the by-laws of the Company or of its Subsidiary,
(ii) require any filing with, or permit, authorization,
consent or approval of, any court, arbitral tribunal,
administrative agency or commission or other governmental
or regulatory authority or agency (a "Governmental Enti-
ty"), (iii) except as set forth in Section 3.4 of the
Company Disclosure Schedule, result in a violation or
breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceler-
ation) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to
which the Company or its Subsidiary is a party or by
which either of them or any of their properties or assets
may be bound or (iv) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the
Company, its Subsidiary or any of their properties or
assets, excluding from the foregoing clauses (ii), (iii)
and (iv) such violations, breaches or defaults which
would not, individually or in the aggregate, have a
material adverse effect on the Company and its Subsid-
iary, taken as a whole, and which will not materially
impair the ability of the Company to consummate the
transactions contemplated hereby.
Section 3.5 SEC Reports and Financial
Statements. The Company has filed with the SEC, and has
heretofore delivered to Parent, true and complete copies
of, all forms, reports, schedules, statements and other
documents required to be filed by it under the Exchange
Act or the Securities Act of 1933, as amended (the "Secu-
rities Act") (as such documents have been amended since
the time of their filing, collectively, the "Company SEC
Documents"). As of their respective dates or, if amend-
ed, as of the date of the last such amendment, the SEC
Documents (a) did not contain any untrue statement of a
material fact or omit 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 and (b) complied in
all material respects with the applicable requirements of
the Exchange Act and the Securities Act, as the case may
be, and the applicable rules and regulations of the SEC
thereunder.
Section 3.6 Information in Proxy Statement.
The Proxy Statement (or any amendment thereof or supple-
ment thereto) will, at the date mailed to Company stock-
holders and at the time of the Special Meeting, not
contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein
or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not
misleading, except that no representation is made by the
Company with respect to statements made therein based on
information supplied by Parent or the Purchaser for
inclusion in the Proxy Statement. The Proxy Statement
will comply in all material respects with the provisions
of the Exchange Act and the rules and regulations there-
under, including, without limitation, Regulation 14A and
Rule 13e-3.
Section 3.7 Vote Required. The affirmative
vote of the holders of a majority of the votes represent-
ed by the outstanding Class A Shares and Class B Shares,
voting together as one class, and the affirmative unani-
mous vote of the holders of the outstanding Class B
Shares are the only votes of the holders of any class or
series of the Company's capital stock necessary to ap-
prove this Agreement and the transactions contemplated
hereby, subject to any other vote which may be required
by Delaware law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant
to the Company as follows:
Section 4.1 Organization. Each of Parent and
the Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of Delaware
and has all requisite corporate power and authority and
all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as
now being conducted, except where the failure to be so
organized, existing and in good standing or to have such
power, authority and governmental approvals would not,
individually or in the aggregate, have a material adverse
effect on Parent and the Purchaser, taken as a whole.
Each of Parent and the Purchaser is duly qualified or
licensed to do business and in good standing in each
jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by
it makes such qualification or licensing necessary,
except where the failure to be so duly qualified or
licensed and in good standing would not, individually or
in the aggregate, have a material adverse effect on
Parent and its Subsidiaries, taken as a whole.
Section 4.2 Authorization; Validity of
Agreement; Necessary Action. Each of Parent and the
Purchaser has full corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, deliv-
ery and performance by Parent and the Purchaser of this
Agreement, and the consummation by them of the transac-
tions contemplated hereby, have been duly authorized by
the Boards of Directors of Parent and the Purchaser and
by Parent as the sole stockholder of the Purchaser and no
other corporate action on the part of Parent and the
Purchaser is necessary to authorize the execution and
delivery by Parent and the Purchaser of this Agreement
and the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and deliv-
ered by Parent and the Purchaser, and, assuming due and
valid authorization, execution and delivery hereof by the
Company, is a valid and binding obligation of Parent and
the Purchaser, enforceable against them in accordance
with its terms.
Section 4.3 Consents and Approvals; No
Violations. Except for the filings, permits, authoriza-
tions, consents and approvals as may be required under,
and other applicable requirements of, the Exchange Act
and the DGCL, neither the execution, delivery or perfor-
xxxxx of this Agreement by Parent or the Purchaser nor
the consummation by Parent or the Purchaser of the trans-
actions contemplated hereby nor compliance by Parent or
the Purchaser with any of the provisions hereof will (i)
conflict with or result in any breach of any provision of
the respective certificate of incorporation or by-laws of
Parent or the Purchaser, (ii) require any filing with, or
permit, authorization, consent or approval of, any Gov-
ernmental Entity, (iii) result in a violation or breach
of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of
the terms, conditions or provisions of any note, bond,
mortgage, indenture, lease, license, contract, agreement
or other instrument or obligation to which Parent or the
Purchaser is a party or by which any of them or any of
their respective properties or assets may be bound or
(iv) violate any order, writ, injunction, decree, stat-
ute, rule or regulation applicable to Parent, any of its
Subsidiaries or any of their properties or assets, ex-
cluding from the foregoing clauses (ii), (iii) and (iv)
such violations, breaches or defaults which would not,
individually or in the aggregate, have a material adverse
effect on Parent and its Subsidiaries, taken as a whole
and which will not materially impair the ability of
Parent or the Purchaser to consummate the transactions
contemplated hereby.
Section 4.4 Information in Proxy Statement.
The information supplied by Parent or the Purchaser
specifically for inclusion or incorporation by reference
in the Proxy Statement will, at the date mailed to stock-
holders and at the time of the Special Meeting, not
contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein
or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not
misleading. All information supplied by Parent or the
Purchaser specifically for inclusion or incorporation by
reference in the Proxy Statement will comply in all
material respects with the provisions of the Exchange Act
and the rules and regulations thereunder, including,
without limitation, Regulation 14A and Rule 13e-3.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company.
The Company covenants and agrees that, except (i) as
expressly contemplated by this Agreement or (ii) as
agreed in writing by Parent, after the date hereof and
prior to the Effective Time, the business of the Company
and its Subsidiary shall be conducted only in the ordi-
nary and usual course, and, in particular: the Company
will not, directly or indirectly, (i) sell, transfer or
pledge or agree to sell, transfer or pledge any of the
Shares (other than Class A Shares reserved for issuance
on the date hereof pursuant to the exercise of Options
outstanding on the date hereof) Preferred Stock or capi-
tal stock of its Subsidiary beneficially owned by it;
(ii) amend its certificate of incorporation or by-laws;
(iii) split, combine or reclassify the outstanding Shares
or Preferred Shares; (iv) declare, set aside or pay any
dividend or other distribution payable in cash, stock or
property with respect to its capital stock; or (v) redeem
(except pursuant to the Certificate of Designation relat-
ing to the Preferred Shares), purchase or otherwise
acquire directly or indirectly any of its capital stock.
Section 5.2 Consents and Approvals. (a) Upon
the terms and subject to the conditions of this Agree-
ment, each of the parties hereto agrees to use all rea-
sonable efforts to take, or cause to be taken, all ac-
tions, and to do, or cause to be done, all things neces-
sary, proper or advisable under applicable laws and
regulations to consummate and make effective the transac-
tions contemplated by this Agreement as promptly as
practicable including, but not limited to, (i) the prepa-
ration and filing of all forms, registrations and notices
required to be filed to consummate the transactions
contemplated by this Agreement and the taking of such
actions as are necessary to obtain any requisite approv-
als, consents, order, exemptions or waivers by any third
party or Governmental Entity, and (ii) causing the satis-
faction of all conditions to the Closing.
(b) Each of Parent and the Company shall
promptly consult with the other with respect to, provide
any necessary information that is not subject to legal
privilege with respect to, and provide the other (or its
counsel) copies of, all filings made by such party with
any Governmental Entity or any other information supplied
by such party to a Governmental Entity in connection with
this Agreement and the transactions contemplated by this
Agreement. Each of Parent and the Company shall promptly
inform the other of any communication from any Governmen-
tal Entity regarding any of the transactions contemplated
by this Agreement. If such party receives a request from
any such Governmental Entity with respect to the transac-
tions contemplated by this Agreement, then such party
will endeavor in good faith to make, or cause to be made,
as soon as reasonably practicable and after consultation
with the other party, an appropriate response in compli-
ance with such request.
Section 5.3 No Solicitation. Neither the
Company nor its Subsidiary or affiliates shall (and the
Company shall use its best efforts to cause its officers,
directors, employees, representatives and agents, includ-
ing, but not limited to, investment bankers, attorneys
and accountants, not to), directly or indirectly, encour-
age, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group
(other than Parent, any of its affiliates or representa-
tives) concerning any merger, tender offer, exchange
offer, sale of assets, sale of shares of capital stock or
debt securities or similar transactions involving the
Company, its Subsidiary or any division or operating or
principal business unit of the Company (an "Acquisition
Proposal"). Notwithstanding the foregoing, the Company
may furnish information concerning its business, proper-
ties or assets to any corporation, partnership, person or
other entity or group pursuant to appropriate confidenti-
ality agreements, and may negotiate and participate in
discussions and negotiations with such entity or group
concerning an Acquisition Proposal, if the Board of
Directors of the Company concludes in good faith after
consultation with independent legal counsel that the
failure to take such action would present a reasonable
possibility of violating the fiduciary obligations of
such Board under applicable law. Nothing shall prohibit
the Company from taking and disclosing a position with
respect to a tender offer pursuant to Rules 14d-9 and
14e-2 under the Exchange Act or, with respect to any
Acquisition Proposal, from making any other disclosure
required by applicable law. The Company will immediately
communicate to Parent the terms of any Acquisition Pro-
posal or request for information or to negotiate (and
will disclose any written materials received by the
Company in connection therewith) and the identity of the
party making such Acquisition Proposal or request which
it may receive in respect of any such transaction.
Section 5.4 Brokers or Finders. Each of
Parent and the Company represents, as to itself, its
Subsidiaries and its affiliates (other, than in the case
of Parent, the Company, and in the case of the Company,
Parent or any of its affiliates, other than the Company
and its Subsidiary), that no agent, broker, investment
banker, financial advisor or other firm or person is or
will be entitled to any brokers' or finders' fee or any
other commission or similar fee in connection with any of
the transactions contemplated by this Agreement (other
than, in the case of the Company, Xxxxxxxxxxx Xxxxxxx &
Co., and in the case of the Parent and its affiliates
other than the Company and its Subsidiary, Xxxxxxxxx,
Lufkin & Xxxxxxxx, Bear Xxxxxxx & Co. Inc., and CS First
Boston Corporation) and each of Parent and the Company
agrees to indemnify and hold the other harmless from and
against any and all claims, liabilities or obligations
with respect to any other fees, commissions or expenses
asserted by any person on the basis of any act or state-
ment alleged to have been made by such party or its
affiliates.
Section 5.5 Additional Agreements. Subject to
the terms and conditions herein provided, each of the
parties hereto shall use all reasonable efforts to take,
or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable under
applicable laws and regulations, or to remove any injunc-
tions or other impediments or delays, legal or otherwise,
to consummate and make effective the Merger and the other
transactions contemplated by this Agreement. In case at
any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of the
Company and Parent shall use all reasonable efforts to
take, or cause to be taken, all such necessary actions.
Section 5.6 Publicity. The initial press
release with respect to the execution of this Agreement
shall be a joint press release acceptable to Parent and
the Company. Thereafter, so long as this Agreement is in
effect, neither the Company, Parent nor any of their
respective affiliates shall issue or cause the publica-
tion of any press release or other announcement with
respect to the Merger, this Agreement or the other trans-
actions contemplated hereby without the prior consulta-
tion of the other party, except as may be required by law
or by any listing agreement with a national securities
exchange or trading market.
Section 5.7 Notification of Certain Matters.
The Company shall give prompt notice to Parent and Parent
shall give prompt notice to the Company, of (i) the
occurrence or non-occurrence of any event the occurrence
or non-occurrence of which would cause any representation
or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the
Effective Time 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 com-
plied with or satisfied by it hereunder; provided, howev-
er, that the delivery of any notice pursuant to this
Section 5.7 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such
notice.
Section 5.8 Directors' and Officers' Insurance
and Indemnification. (a) Parent shall cause the Surviv-
ing Corporation (or any successor to the Surviving Corpo-
ration) to indemnify, defend and hold harmless the pres-
ent and former officers, directors, employees and agents
of the Company and its Subsidiary (each an "Indemnified
Party") against all losses, claims, damages, liabilities,
fees and expenses arising out of actions or omissions
occurring at or prior to the Effective Time to the full
extent permitted under Delaware law, subject to the terms
of the Company's certificate of incorporation and by-
laws, all as in effect at the date hereof.
(b) Parent or the Surviving Corporation shall
maintain the Company's existing officers' and directors'
liability insurance ("D&O Insurance") for a period of not
less than five years after the Effective Time; provided,
that the Parent may substitute therefor policies of
substantially similar coverage and amounts containing
terms no less favorable to such former directors or
officers; provided, further, that in no event shall the
Parent or the Surviving Corporation be required to pay
annual premiums for insurance under this Section in
excess of 150% of the premiums paid by the Company in
1996; and provided further, however, that if the annual
premiums for such insurance coverage exceed such amount
Parent or the Surviving Corporation shall be obligated to
obtain a policy with the greatest coverage available for
a cost not exceeding such amount.
Section 5.9 Assignment; Purchase of Shares.
(a) In the event that the condition set forth
in Section 6.2(c) is satisfied, Parent shall (i) transfer
all the outstanding shares of capital stock of the Pur-
chaser to Marvel and, if necessary, cause Marvel to
authorize the consummation of the transactions contem-
plated hereby as the then sole stockholder of the Pur-
chaser, and (ii) assign its rights, interests and obliga-
tions hereunder to Marvel (it being understood that
Marvel is not an "interested stockholder" for purposes of
Section 203 of the DGCL).
(b) In the event that the condition set forth
in Section 6.2(c) is not satisfied but is waived, Parent,
Purchaser or any of their affiliates (other than Marvel)
shall have the right to offer to purchase all of the
Class A Shares directly from the stockholders of the
Company, provided that (i) such offer shall be for any
and all outstanding Class A Shares, (ii) such offer shall
be for cash in an amount per share not less than the
Merger Consideration, and (iii) such offer shall not
contain any conditions not customary for an offer of this
type (a "Qualifying Offer").
(c) Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by opera-
tion of law or otherwise) without the prior written
consent of the other parties, except (i) as provided in
Section 5.9(a)(ii) or (ii) that Parent may assign, in its
sole discretion, any or all of its rights, interests and
obligations hereunder to any direct or indirect Subsid-
iary of Parent. Upon any such assignment (whether pursu-
ant to Section 5.9(a)(ii) or otherwise), Parent's assign-
ee shall deliver to the Company a writing evidencing its
agreement to perform Parent's covenants hereunder and in
which it makes representations to the Company substan-
tially in the form made by Parent in Article IV. No such
assignment (whether pursuant to Section 5.9(a)(ii) or
otherwise), however, shall relieve Parent of its obliga-
tions under this Agreement.
(d) The parties hereto shall take all reason-
able actions as are necessary, proper or advisable to
give effect to the provisions of this Section 5.9, in-
cluding, without limitation, the execution of an amend-
ment to this Agreement.
Section 5.10 Stock Purchase Agreements. Parent
shall not alter or amend (i) the Stock Purchase Agree-
ments or (ii) the Performance Bonus Agreement between the
Company and Arad, the Performance Bonus Agreement be-
tween the Company and Xxxxx Xxxxxxxxxx, the Amended and
Restated Consulting Agreement between the Company and
Arad or the Consulting Agreement between the Company and
Xxxxx Xxxxxxxxxx (in the case of the documents referred
to in this clause (ii), in the form previously provided
to the Company) so as to make such arrangements economi-
cally more favorable to Arad or Xxxxx Xxxxxxxxxx, or
enter into any similar agreements, without the consent of
the Company, which consent shall not unreasonably be
withheld.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's
Obligation to Effect the Merger. The respective obliga-
tion of each party to effect the Merger shall be subject
to the satisfaction on or prior to the Closing Date of
each of the following conditions, any and all of which
may be waived in whole or in part by the Company, Parent
or the Purchaser, as the case may be, to the extent
permitted by applicable law:
(a) Stockholder Approval. This Agreement
shall have been approved and adopted by the requisite
vote of the holders of the Shares, if required by appli-
cable law or the Company's certificate of incorporation,
in order to consummate the Merger;
(b) Statutes; Consents. No statute, rule,
order, decree or regulation shall have been enacted or
promulgated by any Governmental Entity which prohibits
the consummation of the Merger and all governmental
consents, orders and approvals required for the consumma-
tion of the Merger and the transactions contemplated
hereby shall have been obtained and shall be in effect at
the Effective Time; and
(c) Injunctions. There shall be no order or
injunction of a Governmental Entity of competent juris-
diction in effect precluding, restraining, enjoining or
prohibiting consummation of the Merger.
Section 6.2 Conditions to Parent's and the
Purchaser's Obligations to Effect the Merger. The obli-
gations of Parent and the Purchaser to consummate the
Merger are further subject to the fulfillment of the
following conditions, which may be waived in whole or in
part by Parent and the Purchaser:
(a) The representations and warranties of the
Company contained in this Agreement shall be true and
correct in all material respects both when made and
(except for those representations and warranties that
address matters only as of a particular date which need
only be true and correct in all material respects as of
such date) as of the Effective Time after giving effect
to the Merger as if made at and as of such time;
(b) The Company shall have performed in all
material respects each of its obligations under this
Agreement required to be performed by it at or prior to
the Effective Time;
(c) The Plan of Reorganization (with such
changes as Parent shall approve) attached as Exhibit A to
the Stock Purchase Agreement dated December 27, 1996
between Parent and Marvel shall have been confirmed and
all conditions to closing under such agreement (excluding
the condition that all conditions to the closing of this
Agreement be satisfied) shall have been satisfied or
waived.
Section 6.3 Conditions to Company's Obliga-
tions to Effect the Merger. The obligations of the
Company to consummate the Merger are further subject to
the fulfillment of the following conditions, which may be
waived in whole or in part by the Company:
(a) The representations and warranties of the
Parent and Purchaser contained in this Agreement shall be
true and correct in all material respects both when made
and (except for those representations and warranties that
address matters only as of a particular date which need
only be true and correct in all material respects as of
such date) as of the Effective Time after giving effect
to the Merger as if made at and as of such time;
(b) Each of the Parent and Purchaser shall
have performed in all material respects each of its
obligations under this Agreement required to be performed
by it at or prior to the Effective Time.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may
be terminated and the Merger contemplated herein may be
abandoned at any time prior to the Effective Time, wheth-
er before or after stockholder approval thereof:
(a) By mutual agreement of Parent, Purchaser
and the Company.
(b) By Parent or the Company:
(i) if the Merger shall not have been
consummated by June 30, 1997; provided, however,
that the right to terminate this Agreement under
this Section 7.1(b)(i) shall not be available to any
party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted
in, the failure of the Merger to occur on or prior
to such date;
(ii) if the stockholders of the Company
fail to approve and adopt this Agreement at the
Special Meeting; provided, however, that the right
to terminate this Agreement under this Section
7.1(b)(ii) shall not be available to any party whose
failure to fulfill any obligation under this Agree-
ment has been the cause of, or resulted in, the
failure of the stockholders of the Company to ap-
prove and adopt this Agreement at the Special Meet-
ing;
(iii) if any Governmental Entity shall
have issued an order, decree or ruling or taken any
other action (which order, decree, ruling or other
action the parties hereto shall use their reasonable
efforts to lift), in each case permanently restrain-
ing, enjoining or otherwise prohibiting the transac-
tions contemplated by this Agreement and such order,
decree, ruling or other action shall have become
final and non-appealable; or
(iv) if, prior to the consummation of the
Merger, (x) the Board of Directors of the Company
shall (A) have withdrawn, or modified or changed in
a manner adverse to Parent or the Purchaser its
approval of this Agreement or the Merger in order to
execute a definitive agreement relating to an Acqui-
sition Proposal which is a superior proposal to the
Merger, reasonably capable of being consummated, and
(B) have concluded in good faith after consultation
with independent legal counsel that the failure to
take such action as set forth in the preceding
clause (A) would result in the Board of Directors
violating its fiduciary obligations under applicable
law.
(c) By Parent, if it shall have purchased
Shares pursuant to a Qualifying Offer.
Section 7.2 Effect of Termination. In the
event of the termination of this Agreement as provided in
Section 7.1, written notice thereof shall forthwith be
given to the other party or parties specifying the provi-
sion hereof pursuant to which such termination is made,
and this Agreement shall forthwith become null and void,
and there shall be no liability on the part of any party
hereto except (A) for fraud or for material breach of
this Agreement and (B) as set forth in this Section 7.2
and Section 8.1.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Fees and Expenses. Except as
contemplated by this Agreement, all costs and expenses
incurred in connection with this Agreement and the con-
summation of the transactions contemplated hereby shall
be paid by the party incurring such expenses.
Section 8.2 Amendment, Modification and Other
Action. Subject to applicable law, this Agreement may be
amended, modified and supplemented in any and all re-
spects, whether before or after any vote of the stock-
holders of the Company contemplated hereby, by written
agreement of the parties hereto, at any time prior to the
Closing Date with respect to any of the terms contained
herein; provided, however, that after the approval of
this Agreement by the stockholders of the Company, no
such amendment, modification or supplement shall reduce
the amount or change the form of the Merger Consider-
ation. Notwithstanding any provision of this Agreement
to the contrary, no action by the Company referred to in
Sections 1.2 or 1.3, Article VI or VII or this Article
VIII, and no consent under the first sentence of Section
5.9(c), shall be effective without the approval of the
Special Committee.
Section 8.3 Nonsurvival of Representations and
Warranties. None of the representations and warranties
in this Agreement or in any schedule, instrument or other
document delivered pursuant to this Agreement shall
survive the Effective Time.
Section 8.4 Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service,
such as Federal Express, to the parties at the following
addresses (or at such other address for a party as shall
be specified by like notice):
if to Parent or the Purchaser, to:
Xxxxxxx Group Incorporated
0000 Xxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
MacAndrews & Forbes Holdings Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telephone No.: 000-000-0000
Telecopy: 000-000-0000
with an additional copy to:
Xxxx X. Xxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
and
if to the Company, to:
Toy Biz, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxxxx, Esq.
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Section 8.5 Interpretation. When a reference
is made in this Agreement to Sections, such reference
shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words "include", "includes" or
"including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation".
As used in this Agreement, the term "affiliate(s)" shall
have the meaning set forth in Rule l2b-2 of the Exchange
Act.
Section 8.6 Counterparts. This Agreement may
be executed in two or more counterparts, all of which
shall be considered one and the same agreement and shall
become effective when two or more counterparts have been
signed by each of the parties and delivered to the other
parties.
Section 8.7 Entire Agreement; No Third Party
Beneficiaries; Rights of Ownership. This Agreement
(including the documents and the instruments referred to
herein): (a) constitute the entire agreement and super-
sedes all prior agreements and understandings, both
written and oral, among the parties with respect to the
subject matter hereof, and (b) except as provided in
Section 5.8 is not intended to confer upon any person
other than the parties hereto any rights or remedies
hereunder.
Section 8.8 Severability. If any term, provi-
sion, covenant or restriction of this Agreement is held
by a Governmental Entity of competent jurisdiction to be
invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, im-
paired or invalidated.
Section 8.9 Governing Law. This Agreement
shall be governed by and construed in accordance with the
laws of the State of Delaware without giving effect to
the principles of conflicts of law thereof.
IN WITNESS WHEREOF, Parent, the Purchaser and
the Company have caused this Agreement to be signed by
their respective officers thereunto duly authorized as of
the date first written above.
XXXXXXX GROUP INCORPORATED
By:
Name:
Title:
XXXXXXX ACQUISITION CORP.
By:
Name:
Title:
TOY BIZ, INC.
By:
Name:
Title:
